LOS ANGELES, Oct. 22, 2024 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ:HAFC, or "Hanmi"))), the parent company of Hanmi Bank (the "Bank"), today reported financial results for the third quarter of 2024.

Net income for the third quarter of 2024 was $14.9 million, or $0.49 per diluted share, compared with $14.5 million, or $0.48 per diluted share, for the second quarter of 2024. The return on average assets for the third quarter of 2024 was 0.79% and the return on average equity was 7.55%, compared with a return on average assets of 0.77% and the return on average equity of 7.50% for the second quarter of 2024.

CEO Commentary

"Our third quarter results were strong, with solid performance across all key operating metrics in the third quarter," said Bonnie Lee, President and Chief Executive Officer of Hanmi. "Net interest margin increased five basis points to 2.74% driven by higher yields on interest-earning assets and lower funding costs. Loans grew by 2% driven by a 27% increase in loan production and total deposits were up led by 5% growth in noninterest-bearing demand deposits. These results reflect the continued success of our relationship banking model and our portfolio diversification strategy."

"During the quarter, we remained focused on our disciplined credit administration practices and are pleased to report that we resolved several criticized and nonaccrual loans and recognized a recovery on a previously charged-off loan. We also proactively moved three loans to the special mention category to monitor them more closely. These loans are current, and we are confident they are well protected."

"Hanmi is well-positioned for a strong close to 2024 with a robust balance sheet, ample liquidity, healthy capital ratios, and a solid loan pipeline. Our team remains committed to delivering the solutions our customers need and results our shareholders expect," concluded Lee.

Third Quarter 2024 Highlights:

Third quarter net income was $14.9 million, or $0.49 per diluted share, compared with $14.5 million, or $0.48 per diluted share for the second quarter of 2024. The increase reflects a $2.0 million, or 9.4%, increase in pretax, preprovision income, propelled by a 2.9% increase in net interest income.
Loans receivable were $6.26 billion at September 30, 2024, up 1.3% from the end of the second quarter of 2024, driven by a 27% increase in loan production to $347.8 million with a weighted average interest rate of 7.92%.
Deposits were $6.40 billion at September 30, 2024, up 1.2% from the end of the second quarter of 2024; noninterest-bearing demand deposits were 32.0% of total deposits. During the quarter, noninterest bearing demand deposits grew 4.7%, while time deposits declined 3.2% from the prior quarter.
Net interest income for the third quarter was $50.1 million, up 2.9% from the second quarter of 2024, driven by strong operational performance. Net interest margin (taxable equivalent) expanded five basis points to 2.74%, as the average yield on loans increased to 6.00%, while the cost of interest-bearing deposits remained unchanged at 4.27%.

Noninterest expense was $35.1 million for the third quarter, down 0.6% from the second quarter of 2024, primarily reflecting the absence of the second quarter $0.3 million branch consolidation charge.

Credit loss expense for the third quarter was $2.3 million, compared with $1.0 million for the prior quarter. The allowance for credit losses increased $1.4 million to $69.2 million at September 30, 2024, or 1.11% of loans. For the third quarter, net loan charge-offs of $0.9 million included a $1.1 million charge-off on a nonaccrual loan transferred to held-for-sale and a $1.7 million recovery of a nonaccrual loan.
Asset quality included several notable actions: nonaccrual loans fell 18.8% to $15.2 million and included pay-offs of $6.8 million while criticized assets increased, with downgrades to special mention of three loans totaling $129.8 million, offset by the move to the held-for-sale nonaccrual loan category of the previously identified $28.3 million completed construction loan, upgrades of $6.1 million, and additional loan pay-offs of $1.3 million. Subsequent to the end of the third quarter, the Bank completed the sale of the nonaccrual loan.

For more information about Hanmi, please see the Q3 2024 Investor Update (and Supplemental Financial Information), which is available on the Bank's website at www.hanmi.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov. Also, please refer to "Non-GAAP Financial Measures" herein for further details of the presentation of certain non-GAAP financial measures.

Quarterly Highlights

(Dollars in thousands, except per share data)

	As of or for the Three Months Ended															Amount Change
	September 30,			June 30,			March 31,			December 31,			September 30,			Q3-24		Q3-24
	2024			2024			2024			2023			2023			vs. Q2-24		vs. Q3-23

Net income	$	14,892		$	14,451		$	15,164		$	18,633		$	18,796		$	441	$	(3,904	)
Net income per diluted common share	$	0.49		$	0.48		$	0.50		$	0.61		$	0.62		$	0.01	$	(0.13	)

Assets	$	7,712,299		$	7,586,347		$	7,512,046		$	7,570,341		$	7,350,140		$	125,952	$	362,159
Loans receivable	$	6,257,744		$	6,176,359		$	6,177,840		$	6,182,434		$	6,020,785		$	81,385	$	236,959
Deposits	$	6,403,221		$	6,329,340		$	6,376,060		$	6,280,574		$	6,260,072		$	73,881	$	143,149

Return on average assets		0.79	%		0.77	%		0.81	%		0.99	%		1.00	%		0.02		-0.21
Return on average stockholders' equity		7.55	%		7.50	%		7.90	%		9.70	%		9.88	%		0.06		-2.33

Net interest margin		2.74	%		2.69	%		2.78	%		2.92	%		3.03	%		0.05		-0.29
Efficiency ratio ⁽¹⁾		59.98	%		62.24	%		62.42	%		58.86	%		51.82	%		-2.26		8.16

Tangible common equity to tangible assets ⁽²⁾		9.42	%		9.19	%		9.23	%		9.14	%		8.89	%		0.23		0.53
Tangible common equity per common share ⁽²⁾	$	24.03		$	22.99		$	22.86		$	22.75		$	21.45			1.04		2.58

⁽¹⁾Noninterest expense divided by net interest income plus noninterest income.
⁽²⁾Refer to "Non-GAAP Financial Measures" for further details.

Results of Operations

Net interest income for the third quarter was $50.1 million, up 2.9% from $48.6 million for the second quarter of 2024. The increase was primarily due to an increase in loan interest income. The increase in loan interest income was a result of increases in loan yields and average balances. The yield on average loans for the third quarter increased slightly to 6.00% from 5.99% for the second quarter of 2024. Average loans were $6.11 billion for the third quarter of 2024, up 0.4% from $6.09 billion for the second quarter. The cost of interest-bearing deposits was 4.27% for the third quarter of 2024, unchanged from the prior quarter. Average interest-bearing deposits were $4.40 billion for the third quarter, up 0.3%, from $4.38 billion for the prior quarter. Net interest margin (taxable equivalent) for the third quarter was 2.74%, compared with 2.69% for the second quarter of 2024.

	For the Three Months Ended (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-24			Q3-24
Net Interest Income	2024		2024		2024		2023		2023		vs. Q2-24			vs. Q3-23

Interest and fees on loans receivable⁽¹⁾	$	92,182	$	90,752	$	91,674	$	89,922	$	85,398		1.6	%		7.9	%
Interest on securities		5,523		5,238		4,955		4,583		4,204		5.4	%		31.4	%
Dividends on FHLB stock		356		357		361		341		317		-0.3	%		12.3	%
Interest on deposits in other banks		2,356		2,313		2,604		2,337		4,153		1.9	%		-43.3	%
Total interest and dividend income	$	100,417	$	98,660	$	99,594	$	97,183	$	94,072		1.8	%		6.7	%

Interest on deposits		47,153		46,495		45,638		40,277		36,818		1.4	%		28.1	%
Interest on borrowings		1,561		1,896		1,655		2,112		753		-17.7	%		107.3	%
Interest on subordinated debentures		1,652		1,649		1,646		1,654		1,646		0.2	%		0.4	%
Total interest expense		50,366		50,040		48,939		44,043		39,217		0.7	%		28.4	%
Net interest income	$	50,051	$	48,620	$	50,655	$	53,140	$	54,855		2.9	%		-8.8	%

⁽¹⁾Includes loans held for sale.

	For the Three Months Ended (in thousands)										Percentage Change
Average Earning Assets and	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-24			Q3-24
Interest-bearing Liabilities	2024		2024		2024		2023		2023		vs. Q2-24			vs. Q3-23
Loans receivable ⁽¹⁾	$	6,112,324	$	6,089,440	$	6,137,888	$	6,071,644	$	5,915,423		0.4	%		3.3	%
Securities		986,041		979,671		969,520		961,551		955,473		0.7	%		3.2	%
FHLB stock		16,385		16,385		16,385		16,385		16,385		0.0	%		0.0	%
Interest-bearing deposits in other banks		183,027		180,177		201,724		181,140		317,498		1.6	%		-42.4	%
Average interest-earning assets	$	7,297,777	$	7,265,673	$	7,325,517	$	7,230,720	$	7,204,779		0.4	%		1.3	%

Demand: interest-bearing	$	83,647	$	85,443	$	86,401	$	86,679	$	94,703		-2.1	%		-11.7	%
Money market and savings		1,885,799		1,845,870		1,815,085		1,669,973		1,601,826		2.2	%		17.7	%
Time deposits		2,427,737		2,453,154		2,507,830		2,417,803		2,438,112		-1.0	%		-0.4	%
Average interest-bearing deposits		4,397,183		4,384,467		4,409,316		4,174,455		4,134,641		0.3	%		6.3	%
Borrowings		143,479		169,525		162,418		205,951		120,381		-15.4	%		19.2	%
Subordinated debentures		130,403		130,239		130,088		129,933		129,780		0.1	%		0.5	%
Average interest-bearing liabilities	$	4,671,065	$	4,684,231	$	4,701,822	$	4,510,339	$	4,384,802		-0.3	%		6.5	%

Average Noninterest Bearing Deposits
Demand deposits - noninterest bearing	$	1,908,833	$	1,883,765	$	1,921,189	$	2,025,212	$	2,136,156		1.3	%		-10.6	%

⁽¹⁾Includes loans held for sale.

	For the Three Months Ended															Yield/Rate Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-24		Q3-24
Average Yields and Rates	2024			2024			2024			2023			2023			vs. Q2-24		vs. Q3-23
Loans receivable⁽¹⁾		6.00	%		5.99	%		6.00	%		5.88	%		5.73	%		0.01		0.27
Securities ⁽²⁾		2.27	%		2.17	%		2.07	%		1.93	%		1.79	%		0.10		0.48
FHLB stock		8.65	%		8.77	%		8.87	%		8.25	%		7.67	%		-0.12		0.98
Interest-bearing deposits in other banks		5.12	%		5.16	%		5.19	%		5.12	%		5.19	%		-0.04		-0.07
Interest-earning assets		5.48	%		5.46	%		5.47	%		5.34	%		5.19	%		0.02		0.29

Interest-bearing deposits		4.27	%		4.27	%		4.16	%		3.83	%		3.53	%		0.00		0.74
Borrowings		4.33	%		4.50	%		4.10	%		4.07	%		2.48	%		-0.17		1.85
Subordinated debentures		5.07	%		5.07	%		5.06	%		5.09	%		5.07	%		0.00		0.00
Interest-bearing liabilities		4.29	%		4.30	%		4.19	%		3.88	%		3.55	%		-0.01		0.74

Net interest margin (taxable equivalent basis)		2.74	%		2.69	%		2.78	%		2.92	%		3.03	%		0.05		-0.29

Cost of deposits		2.97	%		2.98	%		2.90	%		2.58	%		2.33	%		-0.01		0.64

⁽¹⁾Includes loans held for sale.
⁽²⁾Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Credit loss expense for the third quarter was $2.3 million, compared with $1.0 million for the second quarter of 2024. Third quarter credit loss expense included a $2.3 million credit loss expense for loan losses. Third quarter net loan charge-offs were $0.9 million, compared with second quarter net loan charge-offs of $1.8 million. Third quarter net loan charge-offs included a $1.1 million charge-off on a nonaccrual loan transferred to held-for-sale and a $1.7 million recovery on a nonaccrual loan.

Noninterest income for the third quarter increased $0.3 million to $8.4 million, or 4.7%, from $8.1 million for the second quarter of 2024. Third quarter noninterest income included a $0.9 million gain from the sale and leaseback of a branch property, while second quarter noninterest income included a $0.3 million death benefit on bank-owned life insurance. Gains on sales of SBA loans were $1.5 million for the third quarter of 2024, compared with $1.6 million for the second quarter of 2024. The volume of SBA loans sold in the third quarter decreased to $23.0 million, from $23.5 million for the second quarter of 2024, while trade premiums were 8.54% for the third quarter of 2024, unchanged from the second quarter. Mortgage loans sold in the third quarter were $20.9 million, with a premium of 2.32%, compared with $19.5 million and 2.00% for the second quarter, resulting in income of $0.3 million for the third quarter, compared with $0.4 million for the prior quarter.

	For the Three Months Ended (in thousands)											Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,			Sep 30,		Q3-24			Q3-24
Noninterest Income	2024		2024		2024		2023			2023		vs. Q2-24			vs. Q3-23
Service charges on deposit accounts	$	2,311	$	2,429	$	2,450	$	2,391		$	2,605		-4.9	%		-11.3	%
Trade finance and other service charges and fees		1,254		1,277		1,414		1,245			1,155		-1.8	%		8.6	%
Servicing income		817		796		712		772			838		2.6	%		-2.5	%
Bank-owned life insurance income (expense)		320		638		304		(29	)		280		-49.8	%		14.3	%
All other operating income		1,008		908		928		853			1,178		11.0	%		-14.4	%
Service charges, fees & other		5,710		6,048		5,808		5,232			6,056		-5.6	%		-5.7	%

Gain on sale of SBA loans		1,544		1,644		1,482		1,448			1,172		-6.1	%		31.7	%
Gain on sale of mortgage loans		324		365		443		-			-		-11.2	%		100.0	%
Gain on sale of bank premises		860		-		-		-			4,000		100.0	%		-78.5	%
Total noninterest income	$	8,438	$	8,057	$	7,733	$	6,680		$	11,228		4.7	%		-24.8	%

Noninterest expense for the third quarter decreased by $0.2 million to $35.1 million from $35.3 million for the second quarter of 2024. The decrease reflects primarily the absence of the $0.3 million branch consolidation expense recognized in the second quarter of 2024. The efficiency ratio for the third quarter was 60.0%, compared with 62.2% for the second quarter of 2024.

	For the Three Months Ended (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-24			Q3-24
	2024		2024		2024		2023		2023		vs. Q2-24			vs. Q3-23
Noninterest Expense
Salaries and employee benefits	$	20,851	$	20,434	$	21,585	$	20,062	$	20,361		2.0	%		2.4	%
Occupancy and equipment		4,499		4,348		4,537		4,604		4,825		3.5	%		-6.8	%
Data processing		3,839		3,686		3,551		3,487		3,490		4.2	%		10.0	%
Professional fees		1,492		1,749		1,893		1,977		1,568		-14.7	%		-4.8	%
Supplies and communication		538		570		601		613		552		-5.6	%		-2.5	%
Advertising and promotion		631		669		907		990		534		-5.7	%		18.2	%
All other operating expenses		2,875		3,251		3,160		3,252		2,852		-11.6	%		0.8	%
Subtotal		34,725		34,707		36,234		34,985		34,182		0.1	%		1.6	%

Branch consolidation expense		-		301		-		-		-		-100.0	%		0.0	%
Other real estate owned expense		77		6		22		15		16		1183.3	%		381.3	%
Repossessed personal property expense		278		262		189		211		47		6.1	%		491.5	%
Total noninterest expense	$	35,080	$	35,276	$	36,445	$	35,211	$	34,245		-0.6	%		2.4	%

Hanmi recorded a provision for income taxes of $6.2 million for the third quarter of 2024, compared with $6.0 million for the second quarter of 2024, representing an effective tax rate of 29.5% and 29.3%, respectively.

Financial Position

Total assets at September 30, 2024 increased 1.7%, or $126.0 million, to $7.71 billion from $7.59 billion at June 30, 2024. The sequential quarter increase was due to a $125.3 million increase in loans and loans held-for-sale, and a $31.3 million increase in securities, offset partially by a $25.3 million decrease in cash and due from banks.

Loans receivable, before allowance for credit losses, were $6.26 billion at September 30, 2024, up from $6.18 billion at June 30, 2024.

Loans held-for-sale were $54.3 million at September 30, 2024, up from $10.5 million at June 30, 2024. At the end of the third quarter, loans held-for-sale consisted of $8.8 million of the guaranteed portion of SBA 7(a) loans, $18.3 million of residential mortgage loans and the $27.2 million nonaccrual loan. Subsequent to the end of the third quarter, the Bank completed the sale of this nonaccrual loan.

	As of (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-24			Q3-24
	2024		2024		2024		2023		2023		vs. Q2-24			vs. Q3-23
Loan Portfolio
Commercial real estate loans	$	3,932,088	$	3,888,505	$	3,878,677	$	3,889,739	$	3,773,015		1.1	%		4.2	%
Residential/consumer loans		939,285		954,209		970,362		962,661		926,326		-1.6	%		1.4	%
Commercial and industrial loans		879,092		802,372		774,851		747,819		728,792		9.6	%		20.6	%
Equipment finance		507,279		531,273		553,950		582,215		592,652		-4.5	%		-14.4	%
Loans receivable		6,257,744		6,176,359		6,177,840		6,182,434		6,020,785		1.3	%		3.9	%
Loans held for sale		54,336		10,467		3,999		12,013		11,767		419.1	%		361.8	%
Total	$	6,312,080	$	6,186,826	$	6,181,839	$	6,194,447	$	6,032,552		2.0	%		4.6	%

	As of
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
	2024			2024			2024			2023			2023
Composition of Loan Portfolio
Commercial real estate loans		62.3	%		62.9	%		62.7	%		62.8	%		62.5	%
Residential/consumer loans		14.9	%		15.4	%		15.7	%		15.5	%		15.4	%
Commercial and industrial loans		13.9	%		13.0	%		12.5	%		12.1	%		12.1	%
Equipment finance		8.0	%		8.5	%		9.0	%		9.4	%		9.8	%
Loans receivable		99.1	%		99.8	%		99.9	%		99.8	%		99.8	%
Loans held for sale		0.9	%		0.2	%		0.1	%		0.2	%		0.2	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

New loan production was $347.8 million for the third quarter of 2024 at an average rate of 7.92%, while payoffs were $77.6 million during the quarter at an average rate of 6.63%.

Commercial real estate loan production for the third quarter of 2024 was $110.2 million. Commercial and industrial loan production was $105.1 million, SBA loan production was $51.6 million, equipment finance production was $40.1 million, and residential mortgage loan production was $40.8 million.

	For the Three Months Ended (in thousands)
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
	2024			2024			2024			2023			2023
New Loan Production
Commercial real estate loans	$	110,246		$	87,632		$	60,085		$	178,157		$	106,151
Commercial and industrial loans		105,086			59,007			50,789			52,079			67,907
SBA loans		51,616			54,486			30,817			48,432			36,109
Equipment finance		40,066			42,594			39,155			57,334			71,075
Residential/consumer loans		40,758			30,194			53,115			53,465			55,026
Subtotal		347,772			273,913			233,961			389,467			336,268


Payoffs		(77,603	)		(148,400	)		(86,250	)		(77,961	)		(62,140	)
Amortization		(151,674	)		(83,640	)		(90,711	)		(106,610	)		(116,411	)
Loan sales		(43,868	)		(42,945	)		(55,321	)		(29,861	)		(22,496	)
Net line utilization		9,426			1,929			(4,150	)		(11,609	)		(70,238	)
Charge-offs & OREO		(2,668	)		(2,338	)		(2,123	)		(1,777	)		(9,369	)

Loans receivable-beginning balance		6,176,359			6,177,840			6,182,434			6,020,785			5,965,171
Loans receivable-ending balance	$	6,257,744		$	6,176,359		$	6,177,840		$	6,182,434		$	6,020,785

Deposits were $6.40 billion at the end of the third quarter of 2024, up $73.9 million, or 1.2%, from $6.33 billion at the end of the prior quarter. Driving the change was a $91.8 million increase in noninterest-bearing demand deposits and a $64.0 million increase in money market and savings deposits, partially offset by a $78.3 million decrease in time deposits. Noninterest-bearing demand deposits represented 32.0% of total deposits at September 30, 2024 and the loan-to-deposit ratio was 97.7%.

	As of (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-24			Q3-24
	2024		2024		2024		2023		2023		vs. Q2-24			vs. Q3-23
Deposit Portfolio
Demand: noninterest-bearing	$	2,051,790	$	1,959,963	$	1,933,060	$	2,003,596	$	2,161,238		4.7	%		-5.1	%
Demand: interest-bearing		79,287		82,981		87,374		87,452		88,133		-4.5	%		-10.0	%
Money market and savings		1,898,834		1,834,797		1,859,865		1,734,658		1,576,006		3.5	%		20.5	%
Time deposits		2,373,310		2,451,599		2,495,761		2,454,868		2,434,695		-3.2	%		-2.5	%
Total deposits	$	6,403,221	$	6,329,340	$	6,376,060	$	6,280,574	$	6,260,072		1.2	%		2.3	%

	As of
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
	2024			2024			2024			2023			2023
Composition of Deposit Portfolio
Demand: noninterest-bearing		32.0	%		31.0	%		30.3	%		31.9	%		34.5	%
Demand: interest-bearing		1.2	%		1.3	%		1.4	%		1.4	%		1.4	%
Money market and savings		29.7	%		29.0	%		29.2	%		27.6	%		25.2	%
Time deposits		37.1	%		38.7	%		39.1	%		39.1	%		38.9	%
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Stockholders' equity at September 30, 2024 was $736.7 million, up $29.6 million from $707.1 million at June 30, 2024. The increase was due to third quarter net income, net of dividends paid, adding $7.3 million to stockholders' equity for the period. Additionally, there was a $20.7 million decrease in unrealized after-tax losses on securities available for sale and a $2.2 million decrease in unrealized after-tax losses on cash flow hedges, all due to changes in interest rates during the third quarter of 2024. Hanmi also repurchased 75,000 shares of common stock, or $1.4 million, during the quarter at an average share price of $19.10. At September 30, 2024, 1,255,000 shares remain under Hanmi's share repurchase program. Tangible common stockholders' equity was $725.7 million, or 9.42% of tangible assets, at September 30, 2024, compared with $696.0 million, or 9.19% of tangible assets at the end of the prior quarter. Please refer to the Non-GAAP Financial Measures section below for more information.

Hanmi and the Bank exceeded minimum regulatory capital requirements, and the Bank continues to exceed the minimum for the "well capitalized" category. At September 30, 2024, Hanmi's preliminary common equity tier 1 capital ratio was 11.95% and its total risk-based capital ratio was 15.04%, compared with 12.11% and 15.24%, respectively, at the end of the prior quarter.

	As of															Ratio Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-24		Q3-24
	2024			2024			2024			2023			2023			vs. Q2-24		vs. Q3-23
Regulatory Capital ratios⁽¹⁾
Hanmi Financial
Total risk-based capital		15.04	%		15.24	%		15.20	%		14.95	%		15.07	%		-0.20		-0.03
Tier 1 risk-based capital		12.29	%		12.46	%		12.40	%		12.20	%		12.30	%		-0.17		-0.01
Common equity tier 1 capital		11.95	%		12.11	%		12.05	%		11.86	%		11.95	%		-0.16		0.00
Tier 1 leverage capital ratio		10.56	%		10.51	%		10.36	%		10.37	%		10.27	%		0.05		0.29
Hanmi Bank
Total risk-based capital		14.28	%		14.51	%		14.50	%		14.27	%		14.42	%		-0.23		-0.14
Tier 1 risk-based capital		13.24	%		13.47	%		13.44	%		13.26	%		13.42	%		-0.23		-0.18
Common equity tier 1 capital		13.24	%		13.47	%		13.44	%		13.26	%		13.42	%		-0.23		-0.18
Tier 1 leverage capital ratio		11.43	%		11.41	%		11.29	%		11.32	%		11.25	%		0.02		0.18

⁽¹⁾Preliminary ratios for September 30, 2024

Asset Quality

Loans 30 to 89 days past due and still accruing were 0.24% of loans at the end of the third quarter of 2024, compared with 0.22% at the end of the prior quarter.

Criticized loans totaled $160.0 million at September 30, 2024, up from $70.9 million at the end of the second quarter of 2024.

During the third quarter, the Bank moved the previously identified $28.3 million completed construction loan for a memory-care and assisted-living facility from the special mention category to the held-for-sale nonaccrual category. In addition, the Bank recognized a $1.1 million charge-off on this loan. Subsequent to the end of the third quarter, the Bank completed the sale of this nonaccrual loan.

Also, during the third quarter, the Bank downgraded to special mention two commercial real estate loans in the hospitality industry for $109.7 million and a commercial and industrial loan in the health care industry for $20.1 million. Pay-offs of $8.1 million decreased criticized loans (and classified loans), while upgrades of $6.1 million also decreased criticized loans (and special mention loans). Offsetting the decrease in classified loans were additions of $2.5 million.

Nonperforming loans were $15.5 million at September 30, 2024, down from $19.2 million at the end of the prior quarter. The decrease primarily reflects pay-offs of $6.8 million, where the pay-off of a previously identified $3.9 million nonperforming loan resulted in a $1.7 million recovery. Offsetting the decrease were additions of $3.1 million.

Nonperforming assets were $16.3 million at the end of the third quarter of 2024, down from $20.0 million at the end of the prior quarter. As a percentage of total assets, nonperforming assets were 0.21% at September 30, 2024, and 0.26% at the end of the prior quarter.

Gross charge-offs for the third quarter of 2024 were $3.8 million, compared with $2.3 million for the preceding quarter. Charge-offs included $1.1 million on the previously identified $28.3 million completed construction loan. Recoveries of previously charged-off loans were $2.9 million in the third quarter of 2024, and included a $1.7 million recovery on a previously identified $3.9 million commercial loan in the health care industry. As a result, net charge-offs were $0.9 million for the third quarter of 2024, compared with net charge-offs of $1.8 million for the prior quarter.

The allowance for credit losses was $69.2 million at September 30, 2024, compared with $67.7 million at June 30, 2024. Specific allowances for loans decreased $1.6 million, while the allowance for quantitative and qualitative considerations increased $3.1 million. The ratio of the allowance for credit losses to loans was 1.11% at September 30, 2024 and 1.10% at June 30, 2024.

	As of or for the Three Months Ended (in thousands)															Amount Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-24			Q3-24
	2024			2024			2024			2023			2023			vs. Q2-24			vs. Q3-23
Asset Quality Data and Ratios

Delinquent loans:
Loans, 30 to 89 days past due and still accruing	$	15,027		$	13,844		$	15,839		$	10,263		$	9,545		$	1,183		$	5,482
Delinquent loans to total loans		0.24	%		0.22	%		0.26	%		0.17	%		0.16	%		0.02			0.08

Criticized loans:
Special mention	$	131,575		$	36,921		$	62,317		$	65,314		$	76,473		$	94,654		$	55,102
Classified		28,377			33,945			23,670			31,367			33,134			(5,568	)		(4,757	)
Total criticized loans	$	159,952		$	70,866		$	85,987		$	96,681		$	109,607		$	89,086		$	50,345

Nonperforming assets:
Nonaccrual loans	$	15,248		$	19,245		$	14,025		$	15,474		$	15,783		$	(3,997	)	$	(535	)
Loans 90 days or more past due and still accruing		242			-			-			-			-			242			242
Nonperforming loans*		15,490			19,245			14,025			15,474			15,783			(3,755	)		(293	)
Other real estate owned, net		772			772			117			117			117			-			655
Nonperforming assets**	$	16,262		$	20,017		$	14,142		$	15,591		$	15,900		$	(3,755	)	$	362

Nonperforming assets to assets*		0.21	%		0.26	%		0.19	%		0.21	%		0.22	%		-0.05			-0.01
Nonperforming loans to total loans		0.25	%		0.31	%		0.23	%		0.25	%		0.26	%		-0.06			-0.01

* Excludes a $27.2 million nonperforming loan held-for-sale.
** Excludes repossessed personal property of $1.2 million, $1.2 million, $1.3 million, $1.3 million, and $1.3 million as of Q3-24, Q2-24, Q1-24, Q4-23, and Q3-23, respectively

	As of or for the Three Months Ended (in thousands)
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
	2024			2024			2024			2023			2023
Allowance for credit losses related to loans:
Balance at beginning of period	$	67,729		$	68,270		$	69,462		$	67,313		$	71,024
Credit loss expense (recovery) on loans		2,312			1,248			404			(2,880	)		5,167
Net loan (charge-offs) recoveries		(878	)		(1,789	)		(1,596	)		5,029			(8,878	)
Balance at end of period	$	69,163		$	67,729		$	68,270		$	69,462		$	67,313

Net loan charge-offs (recoveries) to average loans ⁽¹⁾		0.06	%		0.12	%		0.10	%		-0.33	%		0.60	%
Allowance for credit losses to loans		1.11	%		1.10	%		1.11	%		1.12	%		1.12	%

Allowance for credit losses related to off-balance sheet items:
Balance at beginning of period	$	2,010		$	2,297		$	2,474		$	2,463		$	2,476
Credit loss expense (recovery) on off-balance sheet items		(26	)		(287	)		(177	)		11			(13	)
Balance at end of period	$	1,984		$	2,010		$	2,297		$	2,474		$	2,463

Unused commitments to extend credit	$	739,975		$	795,391		$	792,769		$	813,960		$	848,886

⁽¹⁾Annualized

Corporate Developments

On July 25, 2024, Hanmi's Board of Directors declared a cash dividend on its common stock for the 2024 third quarter of $0.25 per share. Hanmi paid the dividend on August 21, 2024, to stockholders of record as of the close of business on August 5, 2024.

Earnings Conference Call

Hanmi Bank will host its third quarter 2024 earnings conference call today, October 22, 2024, at 2:00 p.m. PT (5:00 p.m. ET) to discuss these results. This call will also be webcast. To access the call, please dial 1-877-407-9039 before 2:00 p.m. PT, using access code Hanmi Bank. To listen to the call online, either live or archived, please visit Hanmi's Investor Relations website at https://investors.hanmi.com/ where it will also be available for replay approximately one hour following the call.

About Hanmi Financial Corporation

Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 32 full-service branches and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com.

Forward-Looking Statements

This press release contains forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, statements about our anticipated future operating and financial performance, financial position and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. Although we believe that our forward-looking statements to be reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. These factors include the following:

a failure to maintain adequate levels of capital and liquidity to support our operations;
general economic and business conditions internationally, nationally and in those areas in which we operate, including any potential recessionary conditions;
volatility and deterioration in the credit and equity markets;
changes in consumer spending, borrowing and savings habits;
availability of capital from private and government sources;
demographic changes;
competition for loans and deposits and failure to attract or retain loans and deposits;
inflation and fluctuations in interest rates that reduce our margins and yields, the fair value of financial instruments, the level of loan originations or prepayments on loans we have made and make, the level of loan sales and the cost we pay to retain and attract deposits and secure other types of funding;
our ability to enter new markets successfully and capitalize on growth opportunities;
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
the effect of potential future supervisory action against us or Hanmi Bank and our ability to address any issues raised in our regulatory exams;
risks of natural disasters;
legal proceedings and litigation brought against us;
a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;
the failure to maintain current technologies;
risks associated with Small Business Administration loans;
failure to attract or retain key employees;
our ability to access cost-effective funding;
changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;
fluctuations in real estate values;
changes in accounting policies and practices;
changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank's retained earnings, net income, prior distributions made, and certain other financial tests;
strategic transactions we may enter into;
the adequacy of and changes in the methodology for computing our allowance for credit losses;
our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses;
changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;
our ability to control expenses; and
cyber security and fraud risks against our information technology and those of our third-party providers and vendors.

In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

Investor Contacts:

Romolo (Ron) Santarosa

Senior Executive Vice President & Chief Financial Officer

213-427-5636

Lisa Fortuna

Investor Relations

Financial Profiles, Inc.

lfortuna@finprofiles.com

310-622-8251

Hanmi Financial Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)

	September 30,			June 30,			Percentage			September 30,			Percentage
	2024			2024			Change			2023			Change
Assets
Cash and due from banks	$	287,767		$	313,079			-8.1	%	$	289,006			-0.4	%
Securities available for sale, at fair value		908,921			877,638			3.6	%		817,242			11.2	%
Loans held for sale, at the lower of cost or fair value		54,336			10,467			419.1	%		11,767			361.8	%
Loans receivable, net of allowance for credit losses		6,188,581			6,108,630			1.3	%		5,953,472			3.9	%
Accrued interest receivable		21,955			23,958			-8.4	%		20,715			6.0	%
Premises and equipment, net		21,371			21,955			-2.7	%		20,707			3.2	%
Customers' liability on acceptances		67			551			-87.8	%		1,386			-95.2	%
Servicing assets		6,683			6,836			-2.2	%		7,156			-6.6	%
Goodwill and other intangible assets, net		11,031			11,048			-0.2	%		11,131			-0.9	%
Federal Home Loan Bank ("FHLB") stock, at cost		16,385			16,385			0.0	%		16,385			0.0	%
Bank-owned life insurance		56,851			56,534			0.6	%		56,364			0.9	%
Prepaid expenses and other assets		138,351			139,266			-0.7	%		144,809			-4.5	%
Total assets	$	7,712,299		$	7,586,347			1.7	%	$	7,350,140			4.9	%

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	2,051,790		$	1,959,963			4.7	%	$	2,161,238			-5.1	%
Interest-bearing		4,351,431			4,369,377			-0.4	%		4,098,834			6.2	%
Total deposits		6,403,221			6,329,340			1.2	%		6,260,072			2.3	%
Accrued interest payable		52,613			47,699			10.3	%		50,286			4.6	%
Bank's liability on acceptances		67			551			-87.8	%		1,386			-95.2	%
Borrowings		300,000			292,500			2.6	%		162,500			84.6	%
Subordinated debentures		130,478			130,318			0.1	%		129,860			0.5	%
Accrued expenses and other liabilities		89,211			78,880			13.1	%		82,677			7.9	%
Total liabilities		6,975,590			6,879,288			1.4	%		6,686,781			4.3	%

Stockholders' equity:
Common stock		34			34			0.0	%		34			0.0	%
Additional paid-in capital		589,567			588,647			0.2	%		586,169			0.6	%
Accumulated other comprehensive income		(55,140	)		(78,000	)		29.3	%		(99,422	)		44.5	%
Retained earnings		340,718			333,392			2.2	%		308,007			10.6	%
Less treasury stock		(138,470	)		(137,014	)		-1.1	%		(131,429	)		-5.4	%
Total stockholders' equity		736,709			707,059			4.2	%		663,359			11.1	%
Total liabilities and stockholders' equity	$	7,712,299		$	7,586,347			1.7	%	$	7,350,140			4.9	%

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except share and per share data)

	Three Months Ended
	September 30,		June 30,		Percentage			September 30,		Percentage
	2024		2024		Change			2023		Change
Interest and dividend income:
Interest and fees on loans receivable	$	92,182	$	90,752		1.6	%	$	85,398		7.9	%
Interest on securities		5,523		5,238		5.4	%		4,204		31.4	%
Dividends on FHLB stock		356		357		-0.3	%		317		12.3	%
Interest on deposits in other banks		2,356		2,313		1.9	%		4,153		-43.3	%
Total interest and dividend income		100,417		98,660		1.8	%		94,072		6.7	%
Interest expense:
Interest on deposits		47,153		46,495		1.4	%		36,818		28.1	%
Interest on borrowings		1,561		1,896		-17.7	%		753		107.3	%
Interest on subordinated debentures		1,652		1,649		0.2	%		1,646		0.4	%
Total interest expense		50,366		50,040		0.7	%		39,217		28.4	%
Net interest income before credit loss expense		50,051		48,620		2.9	%		54,855		-8.8	%
Credit loss expense		2,286		961		137.9	%		5,154		-55.6	%
Net interest income after credit loss expense		47,765		47,659		0.2	%		49,701		-3.9	%
Noninterest income:
Service charges on deposit accounts		2,311		2,429		-4.9	%		2,605		-11.3	%
Trade finance and other service charges and fees		1,254		1,277		-1.8	%		1,155		8.6	%
Gain on sale of Small Business Administration ("SBA") loans		1,544		1,644		-6.1	%		1,172		31.7	%
Other operating income		3,329		2,707		23.0	%		6,296		-47.1	%
Total noninterest income		8,438		8,057		4.7	%		11,228		-24.8	%
Noninterest expense:
Salaries and employee benefits		20,851		20,434		2.0	%		20,361		2.4	%
Occupancy and equipment		4,499		4,607		-2.3	%		4,825		-6.8	%
Data processing		3,839		3,686		4.2	%		3,490		10.0	%
Professional fees		1,492		1,749		-14.7	%		1,568		-4.8	%
Supplies and communications		538		570		-5.6	%		552		-2.5	%
Advertising and promotion		631		669		-5.7	%		534		18.2	%
Other operating expenses		3,230		3,561		-9.3	%		2,915		10.8	%
Total noninterest expense		35,080		35,276		-0.6	%		34,245		2.4	%
Income before tax		21,123		20,440		3.3	%		26,684		-20.8	%
Income tax expense		6,231		5,989		4.0	%		7,888		-21.0	%
Net income	$	14,892	$	14,451		3.1	%	$	18,796		-20.8	%

Basic earnings per share:	$	0.49	$	0.48				$	0.62
Diluted earnings per share:	$	0.49	$	0.48				$	0.62

Weighted-average shares outstanding:
Basic		29,968,004		30,055,913					30,251,961
Diluted		30,033,679		30,133,646					30,292,872
Common shares outstanding		30,196,755		30,272,110					30,410,582

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except share and per share data)

	Nine Months Ended
	September 30,		September 30,		Percentage
	2024		2023		Change
Interest and dividend income:
Interest and fees on loans receivable	$	274,608	$	249,888		9.9	%
Interest on securities		15,717		12,356		27.2	%
Dividends on FHLB stock		1,075		888		21.1	%
Interest on deposits in other banks		7,270		9,012		-19.3	%
Total interest and dividend income		298,670		272,144		9.7	%
Interest expense:
Interest on deposits		139,286		94,431		47.5	%
Interest on borrowings		5,112		4,755		7.5	%
Interest on subordinated debentures		4,948		4,828		2.5	%
Total interest expense		149,346		104,014		43.6	%
Net interest income before credit loss expense		149,324		168,130		-11.2	%
Credit loss expense		3,474		7,210		-51.8	%
Net interest income after credit loss expense		145,850		160,920		-9.4	%
Noninterest income:
Service charges on deposit accounts		7,189		7,756		-7.3	%
Trade finance and other service charges and fees		3,945		3,586		10.0	%
Gain on sale of Small Business Administration ("SBA") loans		4,669		4,253		9.8	%
Other operating income		8,425		11,904		-29.2	%
Total noninterest income		24,228		27,499		-11.9	%
Noninterest expense:
Salaries and employee benefits		62,870		61,336		2.5	%
Occupancy and equipment		13,643		13,737		-0.7	%
Data processing		11,076		10,208		8.5	%
Professional fees		5,134		4,278		20.0	%
Supplies and communications		1,710		1,866		-8.4	%
Advertising and promotion		2,207		2,114		4.4	%
Other operating expenses		10,160		7,777		30.6	%
Total noninterest expense		106,800		101,316		5.4	%
Income before tax		63,278		87,103		-27.4	%
Income tax expense		18,772		25,695		-26.9	%
Net income	$	44,506	$	61,408		-27.5	%

Basic earnings per share:	$	1.47	$	2.01
Diluted earnings per share:	$	1.47	$	2.01

Weighted-average shares outstanding:
Basic		30,048,748		30,296,991
Diluted		30,117,269		30,338,678
Common shares outstanding		30,196,755		30,410,582

Hanmi Financial Corporation and Subsidiaries

Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)

(Dollars in thousands)

	Three Months Ended
	September 30, 2024								June 30, 2024								September 30, 2023
				Interest		Average						Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
Assets
Interest-earning assets:
Loans receivable ⁽¹⁾	$	6,112,324		$	92,182		6.00	%	$	6,089,440		$	90,752		5.99	%	$	5,915,423		$	85,398		5.73	%
Securities ⁽²⁾		986,041			5,523		2.27	%		979,671			5,238		2.17	%		955,473			4,204		1.79	%
FHLB stock		16,385			356		8.65	%		16,385			357		8.77	%		16,385			317		7.67	%
Interest-bearing deposits in other banks		183,027			2,356		5.12	%		180,177			2,313		5.16	%		317,498			4,153		5.19	%
Total interest-earning assets		7,297,777			100,417		5.48	%		7,265,673			98,660		5.46	%		7,204,779			94,072		5.19	%

Noninterest-earning assets:
Cash and due from banks		54,843								55,442								59,994
Allowance for credit losses		(67,906	)							(67,908	)							(70,173	)
Other assets		251,421								252,410								240,145

Total assets	$	7,536,135							$	7,505,617							$	7,434,745

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	83,647		$	31		0.15	%	$	85,443		$	32		0.15	%	$	94,703		$	32		0.13	%
Money market and savings		1,885,799			17,863		3.77	%		1,845,870			17,324		3.77	%		1,601,826			12,485		3.09	%
Time deposits		2,427,737			29,259		4.79	%		2,453,154			29,139		4.78	%		2,438,112			24,301		3.95	%
Total interest-bearing deposits		4,397,183			47,153		4.27	%		4,384,467			46,495		4.27	%		4,134,641			36,818		3.53	%
Borrowings		143,479			1,561		4.33	%		169,525			1,896		4.50	%		120,381			753		2.48	%
Subordinated debentures		130,403			1,652		5.07	%		130,239			1,649		5.07	%		129,780			1,646		5.07	%
Total interest-bearing liabilities		4,671,065			50,366		4.29	%		4,684,231			50,040		4.30	%		4,384,802			39,217		3.55	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,908,833								1,883,765								2,136,156
Other liabilities		171,987								162,543								159,127
Stockholders' equity		784,250								775,078								754,660

Total liabilities and stockholders' equity	$	7,536,135							$	7,505,617							$	7,434,745

Net interest income				$	50,051							$	48,620							$	54,855

Cost of deposits							2.97	%							2.98	%							2.33	%
Net interest spread (taxable equivalent basis)							1.19	%							1.16	%							1.64	%
Net interest margin (taxable equivalent basis)							2.74	%							2.69	%							3.03	%

⁽¹⁾ Includes average loans held for sale
⁽²⁾ Income calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Hanmi Financial Corporation and Subsidiaries

Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)

(Dollars in thousands)

	Nine Months Ended
	September 30, 2024								September 30, 2023
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets
Interest-earning assets:
Loans receivable ⁽¹⁾	$	6,113,214		$	274,608		6.00	%	$	5,933,525		$	249,888		5.63	%
Securities ⁽²⁾		978,439			15,717		2.17	%		969,146			12,356		1.73	%
FHLB stock		16,385			1,076		8.77	%		16,385			888		7.25	%
Interest-bearing deposits in other banks		188,290			7,269		5.16	%		247,581			9,012		4.87	%
Total interest-earning assets		7,296,328			298,670		5.47	%		7,166,637			272,144		5.08	%

Noninterest-earning assets:
Cash and due from banks		56,217								62,354
Allowance for credit losses		(68,305	)							(71,236	)
Other assets		249,517								237,111

Total assets	$	7,533,757							$	7,394,866

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	85,158		$	92		0.14	%	$	100,997		$	88		0.12	%
Money market and savings		1,849,053			51,740		3.74	%		1,506,776			29,687		2.63	%
Time deposits		2,462,779			87,454		4.74	%		2,355,923			64,656		3.67	%
Total interest-bearing deposits		4,396,990			139,286		4.23	%		3,963,696			94,431		3.19	%
Borrowings		158,419			5,112		4.31	%		194,530			4,755		3.27	%
Subordinated debentures		130,244			4,948		5.06	%		129,632			4,828		4.97	%
Total interest-bearing liabilities		4,685,653			149,346		4.26	%		4,287,858			104,014		3.24	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,904,611								2,223,891
Other liabilities		166,372								140,070
Stockholders' equity		777,121								743,047

Total liabilities and stockholders' equity	$	7,533,757							$	7,394,866

Net interest income				$	149,324							$	168,130

Cost of deposits							2.95	%							2.04	%
Net interest spread (taxable equivalent basis)							1.21	%							1.84	%
Net interest margin (taxable equivalent basis)							2.74	%							3.14	%

⁽¹⁾ Includes average loans held for sale
⁽²⁾ Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Non-GAAP Financial Measures

Tangible Common Equity to Tangible Assets Ratio

Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles ("GAAP"). This non-GAAP measure is used by management in the analysis of Hanmi's capital strength. Tangible common equity is calculated by subtracting goodwill and other intangible assets from stockholders' equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Hanmi. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated:

Tangible Common Equity to Tangible Assets Ratio (Unaudited)

(In thousands, except share, per share data and ratios)

	September 30,			June 30,			March 31,			December 31,			September 30,
Hanmi Financial Corporation	2024			2024			2024			2023			2023
Assets	$	7,712,299		$	7,586,347		$	7,512,046		$	7,570,341		$	7,350,140
Less goodwill and other intangible assets		(11,031	)		(11,048	)		(11,074	)		(11,099	)		(11,131	)
Tangible assets	$	7,701,268		$	7,575,299		$	7,500,972		$	7,559,242		$	7,339,009

Stockholders' equity ⁽¹⁾	$	736,709		$	707,059		$	703,100		$	701,891		$	663,359
Less goodwill and other intangible assets		(11,031	)		(11,048	)		(11,074	)		(11,099	)		(11,131	)
Tangible stockholders' equity ⁽¹⁾	$	725,678		$	696,011		$	692,026		$	690,792		$	652,228

Stockholders' equity to assets		9.55	%		9.32	%		9.36	%		9.27	%		9.03	%
Tangible common equity to tangible assets⁽¹⁾		9.42	%		9.19	%		9.23	%		9.14	%		8.89	%

Common shares outstanding		30,196,755			30,272,110			30,276,358			30,368,655			30,410,582
Tangible common equity per common share	$	24.03		$	22.99		$	22.86		$	22.75		$	21.45

⁽¹⁾There were no preferred shares outstanding at the periods indicated.

Hanmi Reports 2024 Third Quarter Results