Hanmi Financial Corporation Reports Improving Third Quarter 2010 Financial Results

LOS ANGELES, Oct. 28, 2010 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (Nasdaq:HAFC), the holding company for Hanmi Bank, today reported a substantial decline in overall net loss for the third quarter of 2010 as compared to both the immediately preceding and year ago quarters. For the third quarter of 2010, net loss fell to $14.6 million, or $0.12 per share, compared to a second quarter loss of $29.3 million, or $0.57 per share, and a loss of $59.7 million, or $1.26 per share, in the third quarter a year ago. For the first nine months of 2010, net loss totaled $93.3 million, or $1.24 per share, compared to $86.4 million, or $1.86 per share in the first nine months of 2009.

"The strong support of our shareholders, as well as the encouraging demand from the capital market, allowed us to raise gross proceeds of $120 million in new capital at the beginning of the quarter. As a result, the Bank has met the threshold for being considered 'well-capitalized' for regulatory purposes at September 30, 2010," said Jay S. Yoo, President and Chief Executive Officer.

Third Quarter 2010 Highlights

• Hanmi strengthened its capital ratios with the successful sale of $120 million of common stock at a purchase price of $1.20 per share, resulting in net proceeds to the Company of $116.3 million. Hanmi injected $110 million to the Bank which enhanced the Bank's Total Risk Based Capital Ratio to 11.61% as compared with 7.35% in the immediate prior quarter and 9.69% a year ago. The Bank's tangible common equity to tangible assets at quarter end was 8.37%, up from 7.55% a year earlier. 
• Non-performing loans fell to $194.7 million, or 8.13% of gross loans, from $242.1 million or 9.67% of gross loans in the second quarter and up from $174.4 million, or 5.85% a year ago. The coverage ratio of the allowance to non-performing loans increased to 90.41% at September 30, 2010, compared to 72.96% at the prior quarter-end and 71.53% at the end of the third quarter a year ago. 
• During the first nine months of 2010, the successful deleveraging of the balance sheet reduced total assets by 6% or $194 million to $2.97 billion, with gross loans down 15%.
• The funds raised in the capital offering and sales of loans provided sufficient liquidity with $608 million in cash and securities as of September 30, 2010.
• Although slightly reduced from the prior quarter's 3.56%, the net interest margin (NIM) significantly improved to 3.49% in the third quarter as compared with 3.00% in the third quarter a year ago. Year-to-date NIM increased 93 basis points to 3.58% from 2.65% in the first nine months of 2009. 

Successful Capital Raise

As previously announced, Hanmi successfully raised gross proceeds of $120 million of capital with approximately $47 million in its rights offering and $73 million in the best efforts public offering. Of the $116.3 million in net proceeds, $110.0 million was down-streamed from the holding company to the Bank. "With our improved capital position as compared to the immediately preceding quarter, we believe we are now substantially in compliance with our regulatory orders, and are working to finalize our strategic plan and other compliance efforts by the year end," Mr. Yoo stated.