Hanmi Financial Corporation Reports Fourth-Quarter and Fiscal Year 2009 Financial Results

Hanmi Financial Corporation (NASDAQ: HAFC) ("we,” "our” or "Hanmi”), the holding company for Hanmi Bank (the "Bank”), reported a fourth-quarter net loss of $35.9 million, or ($0.70) per share, primarily driven by $77 million in credit loss provisions, compared to a net loss of $3.8 million, or ($0.08) per share, in the comparable period a year ago.

For the year ended December 31, 2009, Hanmi reported a net loss of $122.3 million, or ($2.57) per share, mainly due to $196.4 million in credit loss provisions, compared to a net loss of $102.1 million, or ($2.23) per share, for the year ended December 31, 2008. In 2008, there was a non-cash impairment loss on goodwill of $107.4 million, for which there was no comparable loss in 2009.

"Over the past year, we achieved a number of positive changes in what continues to be a very difficult economic environment,” said Jay S. Yoo, Hanmi’s President and Chief Executive Officer. "Most notably, we have made significant progress in strengthening our loan monitoring and loan review departments, maintaining appropriate loan loss reserves in anticipation of asset deterioration, managing our liquidity, and enhancing our net interest margin.”

"Notwithstanding these improvements, our focus during the first half of 2010 will be to fully comply with previously announced regulatory requirements by further strengthening our capital position, improving asset quality, and enhancing liquidity. Our highest priority during the next few months will be to raise sufficient capital, executing our strategic plan to comply with regulatory requirements.

"To enhance liquidity, we will continue our efforts to reduce our illiquid assets as well as further increase our core deposits through product features and upgraded customer service. With the expectation of substantial progress in achieving these goals along with a successful capital raise,” concluded Mr. Yoo, "we will strive to be back in position for organic growth.”

Results of Operations

Net interest income before provision for credit losses increased by $1.9 million, or 7.3 percent, to $28.4 million in the fourth quarter of 2009 as compared with $26.5 million in the prior quarter as the $1.9 million decrease in interest and fees on loans was more than offset by a $4.5 million decrease in total interest expense. For the full year 2009, net interest income before provision for credit losses decreased by $33.2 million, or 24.7 percent, to $101.2 million, as compared with $134.4 million in the prior year.

The average yield on the loan portfolio was 5.54 percent in the fourth quarter of 2009, an increase of four basis points compared to 5.50 percent in the third quarter. Thanks to our proper management of high-cost time deposits that were offered through early 2009 and matured in the fourth quarter, combined with an overall decline of deposit rates in our community, the cost of average interest-bearing deposits was 2.26 percent, a decrease of 44 basis points compared to 2.70 percent in the third quarter. Consistent with this trend, net interest margin was 3.46 percent in the fourth quarter of 2009, an increase of 46 basis points compared to 3.00 percent in the third quarter.

The provision for credit losses in the fourth quarter of 2009 increased by $27.5 million to $77.0 million, compared to $49.5 million in the prior quarter, due mainly to the increase in our historical loss ratios used in the allowance for loan losses migration analysis which was the result of our increase in charge-offs in recent quarters. The charge-offs of impaired loans for the deficiency of collateral in this weakening commercial real estate ("CRE”) market also contributed to the increase. For the full year, the provision for credit losses was $196.4 million compared to $75.7 million in 2008.

Total non-interest income in the fourth quarter of 2009 was $7.8 million as compared with $8.2 million in the third quarter of 2009 and $7.4 million in the fourth quarter of 2008. The decrease in non-interest income from the third quarter is mainly attributable to the overall decrease in service charges in the slowed economy. Consistent with our balance sheet deleveraging strategy, we continued to sell SBA loans and recognized a $354,000 gain in the fourth quarter, as compared with $864,000 in the prior quarter. In the fourth quarter, we also sold investment securities, mainly municipal bonds, for risk management purposes, and recorded a net gain of $665,000. For the full year 2009, total non-interest income was $32.1 million, a decrease of $39,000, or 0.1 percent, from the prior year.

Total non-interest expense in the fourth quarter of 2009 was $22.7 million as compared with $23.7 million in the third quarter, a decrease of $979,000, or 4.1 percent, from the prior quarter. A major contributor to the sequential decrease in fourth-quarter non-interest expense was a decrease of $2.5 million in other real estate owned expenses, partially offset by an increase of $1.0 million in deposit insurance premiums and regulatory assessments. For the full year 2009, total non-interest expense was $90.4 million compared to $194.3 million in 2008. The 2008 expense included a $107.4 million impairment loss on goodwill.

With the aforementioned decreases in non-interest expense and non-interest income and the increase in net interest income before provision for credit losses, the fourth-quarter 2009 efficiency ratio (non-interest expense divided by the sum of net interest income before provision for credit losses and non-interest income) was 62.6 percent, as compared with 68.2 percent in the third quarter and 55.5 percent in the comparable period a year ago.

Balance Sheet and Asset Quality

Reflecting the Bank’s ongoing program to de-leverage the balance sheet, at December 31, 2009, total assets decreased by $294.8 million, or 8.5 percent, to $3.16 billion as compared with $3.46 billion at September 30, 2009, and decreased by $713.1 million, or 18.4 percent, in comparison to $3.88 billion at December 31, 2008.

Gross loans, net of deferred loan fees, decreased by $158.4 million, or 5.3%, to $2.82 billion as of December 31, 2009, compared with $2.98 billion at September 30, 2009, and decreased by $543 million, or 16.2%, as compared with $3.36 billion at December 31, 2008. The bulk of the decrease relative to the prior quarter-end is attributable to the stringent lending policy implementing selective loan renewals in addition to sale of loans and charge-offs.

Total deposits decreased by $242.5 million, or 8.1 percent, to $2.75 billion at December 31, 2009 compared to $2.99 billion at September 30, 2009, and decreased by $320.8 million, or 10.4 percent, compared to $3.07 billion at December 31, 2008. The decrease in total deposits compared to the previous quarter-end reflects a reduction in brokered deposits of $188.4 million and a reduction in Freedom CDs of $114.3 million. FHLB advances also decreased by $6.8 million.

Fourth-quarter charge-offs, net of recoveries, were $57.3 million compared to $29.9 million in the prior quarter and $18.6 million in the fourth quarter of 2008. Fourth-quarter charge-offs include a partial charge-off in the amount of $4.6 million on a construction loan to a senior housing project as a result of a decrease in collateral value; investment property loan charge-offs totaling $13.5 million; and other commercial term loan charge-offs totaling $30.3 million, which includes partial charge-offs from owner-occupied and single-tenant property loans. The remaining charge-offs of approximately $9 million consist of consumer, international, and SBA loans as well as commercial lines of credit. For the full year 2009, charge-offs, net of recoveries, were $122.6 million compared to $46.0 million in 2008.

At December 31, 2009, the allowance for loan losses was $145.0 million, or 5.14 percent of total gross loans (66.19 percent of total non-performing loans), compared to $71.0 million, or 2.11 percent of total gross loans (58.23 percent of total non-performing loans), at December 31, 2008. At September 30, 2009, the allowance for loan losses was $124.8 million, or 4.19 percent of total gross loans (71.53 percent of total non-performing loans). The increase in the allowance for loan losses was mainly due to an increase in quantitative reserves to $90.1 million from $61.1 million at September 30, 2009. The increase in the quantitative allowance was partially offset by a decrease in impaired reserves to $23.1 million from $36.7 million at September 30, 2009 as a result of increased charge-offs. Qualitative allowance slightly increased to $31.6 million from $26.6 million at the end of the third quarter.

Delinquent loans were $186.3 million (6.60 percent of total gross loans) at December 31, 2009, compared to $151.0 million (5.07 percent of total gross loans) at September 30, 2009, and $128.5 million (3.82 percent of total gross loans) at December 31, 2008. Contributing to the increase in delinquent loans were an increase in delinquencies of owner-occupied business property loans as well as an increase in delinquencies of SBA loans. Delinquencies from these two loan categories increased by approximately $18.0 million and $13.5 million, respectively, quarter-over-quarter.

Non-performing loans ("NPL”) at December 31, 2009 were $219.1 million (7.77 percent of total gross loans), compared with $174.4 million at September 30, 2009 (5.85 percent of total gross loans), and $121.9 million (3.62 percent of total gross loans) at December 31, 2008. The majority of the quarter-over-quarter increase in non-performing loans is attributable to an increase of approximately $20.7 million in NPLs from income-producing commercial property loans, and an increase of approximately $17.8 million in NPLs from owner-occupied business property loans. Non-performing SBA loans also increased by approximately $7.5 million compared to the prior quarter. Non-performing loans at December 31, 2009 consisted of 5.7 percent construction loans, 46.9 percent commercial and industrial ("C&I”) loans including owner/user occupied business property loans, 26.9 percent CRE loans, 16.3 percent SBA loans, 3.0 percent consumer loans, and the remaining 1.2 percent consisting of commercial lines of credit and international loans. Of the total NPL of $219.1 million, $74.0 million, or 33.8 percent, is current at December 31, 2009. Of the total NPL of $174.4 million, $51.9 million, or 29.8%, was current at September 30, 2009. Of the current NPL of $74.0 million, $35.7 million was moved to non-accrual status from accrual status due to shortfalls in collateral with negative cash flow; and of the $35.7 million that moved to non-accrual status, $7.9 million was restructured and identified as troubled debt restructured loans.

As of December 31, 2009, total non-performing assets of $245.4 million included other real estate owned assets ("OREO”) of $26.3 million compared with total non-performing assets of $201.6 million with OREO of $27.1 million at September 30, 2009, and total non-performing assets of $122.7 million with OREO of $823,000 at December 31, 2008.

The aggregate net OREO balance has shown a decreasing trend since the second quarter of 2009. The net balance decreased from $34.0 million at June 30, 2009 to $27.1 million at September 30, 2009. The balance further decreased to $26.3 million at December 31, 2009.

Capital Adequacy

The Bank’s capital ratios exceed levels defined as "adequately capitalized” by our regulators. At December 31, 2009, the Bank’s Tier 1 Leverage, Tier 1 Risk-Based Capital and Total Risk-Based Capital Ratio were 6.69 percent, 7.77 percent, and 9.07 percent, respectively, compared to 7.05 percent, 8.40 percent and 9.69 percent, respectively, at September 30, 2009. The Bank’s ratio of tangible shareholders’ equity to total tangible assets for the fourth quarter was 7.13 percent compared to 7.57 percent at September 30, 2009.

About Hanmi Financial Corporation

Headquartered in Los Angeles, Hanmi Bank, a wholly-owned subsidiary of Hanmi Financial Corporation, provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. Hanmi Bank specializes in commercial, SBA and trade finance lending, and is a recognized community leader. Hanmi Bank’s mission is to provide a full range of quality products and premier services to its customers and to maximize shareholder value. Additional information is available at www.hanmi.com.

Forward-Looking Statements

This release contains forward-looking statements, which are included in accordance with the "safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These 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 statement. These factors include the following: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of regulatory orders we have entered into and potential future supervisory action against us or Hanmi Bank; general economic and business conditions internationally, nationally and in those areas in which we operate; 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; fluctuations in interest rates and a decline in the level of our interest rate spread; risks of natural disasters related to our real estate portfolio; risks associated with Small Business Administration ("SBA”) loans; failure to attract or retain key employees; changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums; ability to receive regulatory approval for Hanmi Bank to declare dividends to Hanmi Financial; adequacy of our allowance for loan losses, credit quality and the effect of credit quality on our provision for credit losses and allowance for loan 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 successfully integrate acquisitions we may make; our ability to control expenses; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and current and periodic reports filed with the Securities and Exchange Commission thereafter, which could cause actual results to differ from those projected. You should understand that it is not possible to predict or identify all such risks. Consequently, you should not consider such disclosures to be a complete discussion of all potential risks or uncertainties. We undertake no obligation to update such forward-looking statements except as required by law.

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
		December 31,				September 30,				%			December 31,				%
		2009				2009				Change			2008				Change
ASSETS
Cash and Due from Banks		$	55,263			$	57,727			(4.3	)%		$	83,933			(34.2	)%
Interest-Bearing Deposits in Other Banks			98,847				155,607			(36.5	)%			2,014			4,808.0	%
Federal Funds Sold			—				—			—				130,000			(100.0	)%
Cash and Cash Equivalents			154,110				213,334			(27.8	)%			215,947			(28.6	)%
Investment Securities			133,289				205,901			(35.3	)%			197,117			(32.4	)%
Loans:
Gross Loans, Net of Deferred Loan Fees			2,819,060				2,977,504			(5.3	)%			3,362,111			(16.2	)%
Allowance for Loan Losses			(144,996	)			(124,768	)		16.2	%			(70,986	)		104.3	%
Loans Receivable, Net			2,674,064				2,852,736			(6.3	)%			3,291,125			(18.7	)%
Due from Customers on Acceptances			994				1,859			(46.5	)%			4,295			(76.9	)%
Premises and Equipment, Net			18,657				19,302			(3.3	)%			20,279			(8.0	)%
Accrued Interest Receivable			9,492				11,389			(16.7	)%			12,347			(23.1	)%
Other Real Estate Owned, Net			26,306				27,140			(3.1	)%			823			3,096.4	%
Deferred Income Taxes, Net			—				2,464			(100.0	)%			29,456			(100.0	)%
Servicing Assets			3,842				3,957			(2.9	)%			3,791			1.3	%
Other Intangible Assets, Net			3,382				3,736			(9.5	)%			4,950			(31.7	)%
Investment in Federal Home Loan Bank Stock, at Cost			30,697				30,697			—				30,697			—
Investment in Federal Reserve Bank Stock, at Cost			7,878				10,053			(21.6	)%			10,228			(23.0	)%
Bank-Owned Life Insurance			26,408				26,171			0.9	%			25,476			3.7	%
Income Taxes Receivable			60,162				34,908			72.3	%			11,712			413.7	%
Other Assets			13,425				13,843			(3.0	)%			17,573			(23.6	)%
TOTAL ASSETS		$	3,162,706			$	3,457,490			(8.5	)%		$	3,875,816			(18.4	)%
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-Bearing		$	556,306			$	561,548			(0.9	)%		$	536,944			3.6	%
Interest-Bearing			2,193,021				2,430,312			(9.8	)%			2,533,136			(13.4	)%
Total Deposits			2,749,327				2,991,860			(8.1	)%			3,070,080			(10.4	)%
Accrued Interest Payable			12,606				19,730			(36.1	)%			18,539			(32.0	)%
Bank Acceptances Outstanding			994				1,859			(46.5	)%			4,295			(76.9	)%
Federal Home Loan Bank Advances			153,978				160,828			(4.3	)%			422,196			(63.5	)%
Other Borrowings			1,747				1,496			16.8	%			787			122.0	%
Junior Subordinated Debentures			82,406				82,406			—				82,406			—
Accrued Expenses and Other Liabilities			11,904				12,191			(2.4	)%			13,598			(12.5	)%
Total Liabilities			3,012,962				3,270,370			(7.9	)%			3,611,901			(16.6	)%
Stockholders’ Equity			149,744				187,120			(20.0	)%			263,915			(43.3	)%
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	3,162,706			$	3,457,490			(8.5	)%		$	3,875,816			(18.4	)%

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
		Three Months Ended																		Year Ended
		Dec. 31,				Sept. 30,				%			Dec. 31,				%			Dec. 31,				Dec. 31,				%
		2009				2009				Change			2008				Change			2009				2008				Change
INTEREST AND DIVIDEND INCOME:
Interest and Fees on Loans		$	40,810			$	42,705			(4.4	)%		$	51,305			(20.5	)%		$	173,318			$	223,942			(22.6	)%
Taxable Interest on Investment Securities			1,414				1,541			(8.2	)%			1,644			(14.0	)%			5,675				9,387			(39.5	)%
Tax-Exempt Interest on Investment Securities			432				607			(28.8	)%			646			(33.1	)%			2,303				2,717			(15.2	)%
Interest on Term Federal Funds Sold			30				293			(89.8	)%			43			(30.2	)%			1,718				43			3,895.3	%
Dividends on Federal Reserve Bank Stock			136				150			(9.3	)%			164			(17.1	)%			592				692			(14.5	)%
Interest on Federal Funds Sold and Securities Purchased Under Resale Agreements			65				67			(3.0	)%			29			124.1	%			326				166			96.4	%
Interest on Interest-Bearing Deposits in Other Banks			70				68			2.9	%			5			1,300.0	%			151				10			1,410.0	%
Dividends on Federal Home Loan Bank Stock			—				64			(100.0	)%			273			(100.0	)%			64				1,226			(94.8	)%
Total Interest and Dividend Income			42,957				45,495			(5.6	)%			54,109			(20.6	)%			184,147				238,183			(22.7	)%
INTEREST EXPENSE:
Interest on Deposits			13,410				17,365			(22.8	)%			19,654			(31.8	)%			76,246				84,353			(9.6	)%
Interest on Federal Home Loan Bank Advances			412				865			(52.4	)%			2,621			(84.3	)%			3,399				14,027			(75.8	)%
Interest on Junior Subordinated Debentures			690				747			(7.6	)%			1,293			(46.6	)%			3,271				5,056			(35.3	)%
Interest on Other Borrowings			—				—			—				2			(100.0	)%			2				346			(99.4	)%
Total Interest Expense			14,512				18,977			(23.5	)%			23,570			(38.4	)%			82,918				103,782			(20.1	)%
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES			28,445				26,518			7.3	%			30,539			(6.9	)%			101,229				134,401			(24.7	)%
										—							—											—
Provision for Credit Losses			77,000				49,500			55.6	%			25,450			202.6	%			196,387				75,676			159.5	%
NET INTEREST INCOME (LOSS) AFTER PROVISION FOR CREDIT LOSSES			(48,555	)			(22,982	)		111.3	%			5,089			(1,054.1	)%			(95,158	)			58,725			(262.0	)%
NON-INTEREST INCOME:
Service Charges on Deposit Accounts			4,022				4,275			(5.9	)%			4,559			(11.8	)%			17,054				18,463			(7.6	)%
Insurance Commissions			1,062				1,063			(0.1	)%			1,174			(9.5	)%			4,492				5,067			(11.3	)%
Remittance Fees			530				511			3.7	%			651			(18.6	)%			2,109				2,194			(3.9	)%
Trade Finance Fees			439				512			(14.3	)%			614			(28.5	)%			1,956				3,088			(36.7	)%
Other Service Charges and Fees			371				489			(24.1	)%			513			(27.7	)%			1,810				2,365			(23.5	)%
Net Gain on Sales of Loans			354				864			(59.0	)%			—			—				1,220				765			59.5	%
Bank-Owned Life Insurance Income			237				234			1.3	%			237			—				932				952			(2.1	)%
Gain on Sales of Investment Securities			1,050				—			—				—			—				2,327				618			276.5	%
Loss on Sales of Investment Securities			(385	)			—			—				(58	)		563.8	%			(494	)			(541	)		(8.7	)%
Other-Than-Temporary Impairment Loss on Investment Securities			—				—			—				—			—				—				(2,410	)		(100.0	)%
Other Operating Income (Loss)			159				265			(40.0	)%			(286	)		(155.6	)%			704				1,588			(55.7	)%
Total Non-Interest Income			7,839				8,213			(4.6	)%			7,404			5.9	%			32,110				32,149			(0.1	)%
NON-INTEREST EXPENSE:
Salaries and Employee Benefits			8,442				8,648			(2.4	)%			8,846			(4.6	)%			33,101				42,209			(21.6	)%
Occupancy and Equipment			2,733				2,834			(3.6	)%			2,798			(2.3	)%			11,239				11,158			0.7	%
Deposit Insurance Premiums and Regulatory Assessments			2,998				2,001			49.8	%			1,615			85.6	%			10,418				3,713			180.6	%
Data Processing			1,606				1,608			(0.1	)%			1,069			50.2	%			6,297				5,799			8.6	%
Other Real Estate Owned Expense			873				3,372			(74.1	)%			249			250.6	%			5,890				390			1,410.3	%
Professional Fees			1,354				1,239			9.3	%			912			48.5	%			4,099				3,539			15.8	%
Advertising and Promotion			762				447			70.5	%			904			(15.7	)%			2,402				3,518			(31.7	)%
Supplies and Communications			580				603			(3.8	)%			510			13.7	%			2,352				2,518			(6.6	)%
Loan-Related Expense			357				192			85.9	%			221			61.5	%			1,947				790			146.5	%
Amortization of Other Intangible Assets			354				379			(6.6	)%			454			(22.0	)%			1,568				1,958			(19.9	)%
Other Operating Expenses			2,651				2,366			12.0	%			3,478			(23.8	)%			11,041				11,337			(2.6	)%
Impairment Loss on Goodwill			—				—			—				—			—				—				107,393			(100.0	)%
Total Non-Interest Expense			22,710				23,689			(4.1	)%			21,056			7.9	%			90,354				194,322			(53.5	)%
LOSS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES			(63,426	)			(38,458	)		64.9	%			(8,563	)		640.7	%			(153,402	)			(103,448	)		48.3	%
Provision (Benefit) for Income Taxes			(27,545	)			21,207			(229.9	)%			(4,748	)		480.1	%			(31,125	)			(1,355	)		2,197.0	%
NET LOSS		$	(35,881	)		$	(59,665	)		(39.9	)%		$	(3,815	)		840.5	%		$	(122,277	)		$	(102,093	)		19.8	%
LOSS PER SHARE:
Basic		$	(0.70	)		$	(1.26	)		(44.4	)%		$	(0.08	)		775.0	%		$	(2.57	)		$	(2.23	)		15.2	%
Diluted		$	(0.70	)		$	(1.26	)		(44.4	)%		$	(0.08	)		775.0	%		$	(2.57	)		$	(2.23	)		15.2	%
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic			50,998,103				47,413,141							45,884,462							47,570,361				45,872,541
Diluted			50,998,103				47,413,141							45,884,462							47,570,361				45,872,541
SHARES OUTSTANDING AT PERIOD-END			51,182,390				51,201,390							45,905,549							51,182,390				45,905,549

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands)
		Three Months Ended																		Year Ended
		December 31,				September 30,				%			December 31,				%			December 31,				December 31,				%
		2009				2009				Change			2008				Change			2009				2008				Change
AVERAGE BALANCES:
Average Gross Loans, Net of Deferred Loan Fees		$	2,924,722			$	3,078,104			(5.0	)%		$	3,366,601			(13.1	)%		$	3,157,133			$	3,332,133			(5.3	)%
Average Investment Securities			182,635				209,021			(12.6	)%			205,305			(11.0	)%			188,325				271,802			(30.7	)%
Average Interest-Earning Assets			3,291,042				3,552,698			(7.4	)%			3,637,232			(9.5	)%			3,611,009				3,653,720			(1.2	)%
Average Total Assets			3,356,383				3,672,253			(8.6	)%			3,789,435			(11.4	)%			3,717,179				3,866,856			(3.9	)%
Average Deposits			2,914,794				3,100,419			(6.0	)%			2,879,674			1.2	%			3,109,322				2,913,171			6.7	%
Average Borrowings			244,704				297,455			(17.7	)%			602,838			(59.4	)%			341,514				591,930			(42.3	)%
Average Interest-Bearing Liabilities			2,598,520				2,844,821			(8.7	)%			2,913,723			(10.8	)%			2,909,014				2,874,470			1.2	%
Average Stockholders’ Equity			164,767				232,136			(29.0	)%			271,544			(39.3	)%			225,708				323,462			(30.2	)%
Average Tangible Equity			161,169				228,169			(29.4	)%			266,333			(39.5	)%			221,537				264,490			(16.2	)%
PERFORMANCE RATIOS (Annualized):
Return on Average Assets			(4.24	)%			(6.45	)%						(0.40	)%						(3.29	)%			(2.64	)%
Return on Average Stockholders’ Equity			(86.40	)%			(101.97	)%						(5.59	)%						(54.17	)%			(31.56	)%
Return on Average Tangible Equity			(88.33	)%			(103.75	)%						(5.70	)%						(55.19	)%			(38.60	)%
Efficiency Ratio			62.59	%			68.21	%						55.49	%						67.76	%			116.67	%
Net Interest Spread(1)			2.99	%			2.47	%						2.74	%						2.28	%			2.95	%
Net Interest Margin(1)			3.46	%			3.00	%						3.38	%						2.84	%			3.72	%
ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period		$	124,768			$	105,268			18.5	%		$	63,948			95.1	%		$	70,986			$	43,611			62.8	%
Provision Charged to Operating Expense			77,540				49,375			57.0	%			25,660			202.2	%			196,607				73,345			168.1	%
Charge-Offs, Net of Recoveries			(57,312	)			(29,875	)		91.8	%			(18,622	)		207.8	%			(122,597	)			(45,970	)		166.7	%
Balance at End of Period		$	144,996			$	124,768			16.2	%		$	70,986			104.3	%		$	144,996			$	70,986			104.3	%
Allowance for Loan Losses to Total Gross Loans			5.14	%			4.19	%						2.11	%						5.14	%			2.11	%
Allowance for Loan Losses to Total Non-Performing Loans			66.19	%			71.53	%						58.23	%						66.19	%			58.23	%
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS:
Balance at Beginning of Period		$	4,416			$	4,291			2.9	%		$	4,306			2.6	%		$	4,096			$	1,765			132.1	%
Provision Charged to Operating Expense			(540	)			125			(532.0	)%			(210	)		153.3	%			(220	)			2,331			(109.4	)%
Balance at End of Period		$	3,876			$	4,416			(12.2	)%		$	4,096			(5.4	)%		$	3,876			$	4,096			(5.4	)%
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
		December 31,				September 30,				%			December 31,				%
		2009				2009				Change			2008				Change
NON-PERFORMING ASSETS:
Non-Accrual Loans		$	219,000			$	174,363			25.6	%		$	120,823			81.3	%
Loans 90 Days or More Past Due and Still Accruing			67				64			4.7	%			1,075			(93.8	)%
Total Non-Performing Loans			219,067				174,427			25.6	%			121,898			79.7	%
Other Real Estate Owned, Net			26,306				27,140			(3.1	)%			823			3,096.4	%
Total Non-Performing Assets		$	245,373			$	201,567			21.7	%		$	122,721			99.9	%
Total Non-Performing Loans/Total Gross Loans			7.77	%			5.85	%						3.62	%
Total Non-Performing Assets/Total Assets			7.76	%			5.83	%						3.17	%
Total Non-Performing Assets/Allowance for Loan Losses			169.2	%			161.6	%						172.9	%
DELINQUENT LOANS		$	186,257			$	151,047			23.3	%		$	128,469			45.0	%
Delinquent Loans/Total Gross Loans			6.60	%			5.07	%						3.82	%
LOAN PORTFOLIO:
Real Estate Loans		$	1,043,097			$	1,086,735			(4.0	)%		$	1,180,114			(11.6	)%
Commercial and Industrial Loans			1,714,212				1,824,042			(6.0	)%			2,099,732			(18.4	)%
Consumer Loans			63,303				68,537			(7.6	)%			83,525			(24.2	)%
Total Gross Loans			2,820,612				2,979,314			(5.3	)%			3,363,371			(16.1	)%
Deferred Loan Fees			(1,552	)			(1,810	)		(14.3	)%			(1,260	)		23.2	%
Gross Loans, Net of Deferred Loan Fees			2,819,060				2,977,504			(5.3	)%			3,362,111			(16.2	)%
Allowance for Loan Losses			(144,996	)			(124,768	)		16.2	%			(70,986	)		104.3	%
Loans Receivable, Net		$	2,674,064			$	2,852,736			(6.3	)%		$	3,291,125			(18.7	)%
LOAN MIX:
Real Estate Loans			37.0	%			36.5	%						35.1	%
Commercial and Industrial Loans			60.8	%			61.2	%						62.4	%
Consumer Loans			2.2	%			2.3	%						2.5	%
Total Gross Loans			100.0	%			100.0	%						100.0	%
DEPOSIT PORTFOLIO:
Demand - Noninterest-Bearing		$	556,306			$	561,548			(0.9	)%		$	536,944			3.6	%
Savings			111,172				98,019			13.4	%			81,869			35.8	%
Money Market Checking and NOW Accounts			685,858				723,585			(5.2	)%			370,401			85.2	%
Time Deposits of $100,000 or More			815,190				845,318			(3.6	)%			849,800			(4.1	)%
Other Time Deposits			580,801				763,390			(23.9	)%			1,231,066			(52.8	)%
Total Deposits		$	2,749,327			$	2,991,860			(8.1	)%		$	3,070,080			(10.4	)%
DEPOSIT MIX:
Demand - Noninterest-Bearing			20.2	%			18.8	%						17.5	%
Savings			4.0	%			3.3	%						2.7	%
Money Market Checking and NOW Accounts			24.9	%			24.2	%						12.1	%
Time Deposits of $100,000 or More			29.7	%			28.3	%						27.7	%
Other Time Deposits			21.2	%			25.4	%						40.0	%
Total Deposits			100.0	%			100.0	%						100.0	%
CAPITAL RATIOS (Bank Only):
Total Risk-Based			9.07	%			9.69	%						10.71	%
Tier 1 Risk-Based			7.77	%			8.40	%						9.44	%
Tier 1 Leverage			6.69	%			7.05	%						8.85	%

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID (UNAUDITED)
(Dollars in Thousands)
		Three Months Ended																														Year Ended
		December 31, 2009										September 30, 2009										December 31, 2008										December 31, 2009										December 31, 2008
		Average Balance				Interest Income/ Expense			Average Yield/ Rate			Average Balance				Interest Income/ Expense			Average Yield/ Rate			Average Balance				Interest Income/ Expense			Average Yield/ Rate			Average Balance				Interest Income/ Expense			Average Yield/ Rate			Average Balance				Interest Income/ Expense			Average Yield/ Rate
INTEREST-EARNING ASSETS
Loans:
Real Estate Loans:
Commercial Property		$	861,831			$	11,872		5.47	%		$	887,028			$	12,051		5.39	%		$	902,367			$	14,074		6.20	%		$	894,408			$	49,901		5.58	%		$	841,526			$	56,968		6.77	%
Construction			130,400				1,342		4.08	%			138,340				1,464		4.20	%			186,080				1,881		4.02	%			156,619				5,947		3.80	%			202,879				9,962		4.91	%
Residential Property			80,257				997		4.93	%			83,387				1,050		5.00	%			91,366				1,174		5.11	%			85,228				4,329		5.08	%			90,395				4,758		5.26	%
Total Real Estate Loans			1,072,488				14,211		5.26	%			1,108,755				14,565		5.21	%			1,179,813				17,129		5.78	%			1,136,255				60,177		5.30	%			1,134,800				71,688		6.32	%
Commercial and Industrial Loans			1,787,795				25,472		5.65	%			1,897,321				26,863		5.62	%			2,104,820				32,691		6.18	%			1,947,669				108,346		5.56	%			2,112,421				145,107		6.87	%
Consumer Loans			66,074				965		5.79	%			73,670				1,084		5.84	%			83,411				1,353		6.45	%			74,700				4,310		5.77	%			86,787				6,142		7.08	%
Total Gross Loans			2,926,357				40,648		5.51	%			3,079,746				42,512		5.48	%			3,368,044				51,173		6.04	%			3,158,624				172,833		5.47	%			3,334,008				222,937		6.69	%
Prepayment Penalty Income			—				162		—				—				193		—				—				132		—				—				485		—				—				1,005		—
Unearned Income on Loans, Net of Costs			(1,635	)			—		—				(1,642	)			—		—				(1,443	)			—		—				(1,491	)			—		—				(1,875	)			—		—
Gross Loans, Net			2,924,722				40,810		5.54	%			3,078,104				42,705		5.50	%			3,366,601				51,305		6.06	%			3,157,133				173,318		5.49	%			3,332,133				223,942		6.72	%
Investment Securities:
Municipal Bonds(1)			41,653				665		6.39	%			58,179				933		6.41	%			59,718				994		6.66	%			54,448				3,543		6.51	%			63,918				4,180		6.54	%
U.S. Government Agency Securities			36,500				437		4.79	%			37,969				431		4.54	%			21,720				201		3.70	%			24,417				1,108		4.54	%			65,440				2,813		4.35	%
Mortgage-Backed Securities			77,354				738		3.82	%			82,429				807		3.92	%			79,821				971		4.87	%			77,627				3,320		4.28	%			87,930				4,217		4.77	%
Collateralized Mortgage Obligations			14,312				143		4.00	%			17,066				173		4.05	%			37,853				403		4.26	%			21,365				879		4.11	%			43,842				1,865		4.25	%
Corporate Bonds			286				—		0.00	%			401				—		0.00	%			1,688				46		10.90	%			271				—		0.00	%			6,671				333		4.59	%
Other Securities			12,530				97		3.10	%			12,977				130		4.01	%			4,505				23		2.04	%			10,197				369		3.62	%			4,001				159		4.73	%
Total Investment Securities(1)			182,635				2,080		4.56	%			209,021				2,474		4.73	%			205,305				2,638		5.14	%			188,325				9,219		4.90	%			271,802				13,567		4.99	%
Other Interest-Earning Assets:
Equity Securities			40,605				136		1.34	%			41,741				214		2.05	%			42,551				437		4.11	%			41,399				656		1.58	%			38,516				1,918		4.98	%
Federal Funds Sold and Securities Purchased
Under Resale Agreements			51,713				65		0.50	%			56,568				67		0.47	%			14,410				29		0.80	%			84,363				326		0.39	%			8,934				166		1.86	%
Term Federal Funds Sold			8,500				30		1.41	%			90,239				293		1.30	%			7,609				43		2.26	%			95,822				1,718		1.79	%			1,913				43		2.25	%
Interest-Bearing Deposits in Other Banks			82,867				70		0.34	%			77,025				68		0.35	%			756				5		2.65	%			43,967				151		0.34	%			422				10		2.37	%
Total Other Interest-Earning Assets			183,685				301		0.66	%			265,573				642		0.97	%			65,326				514		3.15	%			265,551				2,851		1.07	%			49,785				2,137		4.29	%
TOTAL INTEREST-EARNING ASSETS(1)		$	3,291,042			$	43,191		5.21	%		$	3,552,698			$	45,821		5.12	%		$	3,637,232			$	54,457		5.96	%		$	3,611,009			$	185,388		5.13	%		$	3,653,720			$	239,646		6.56	%
INTEREST-BEARING LIABILITIES
Interest-Bearing Deposits:
Savings		$	104,068			$	711		2.71	%		$	93,404			$	585		2.48	%		$	83,777			$	506		2.40	%		$	91,089			$	2,328		2.56	%		$	89,866			$	2,093		2.33	%
Money Market Checking and NOW Accounts			733,063				3,508		1.90	%			629,124				2,998		1.89	%			506,062				3,963		3.12	%			507,619				9,786		1.93	%			618,779				19,909		3.22	%
Time Deposits of $100,000 or More			835,726				4,930		2.34	%			983,341				7,447		3.00	%			754,081				8,162		4.31	%			1,051,994				34,807		3.31	%			1,045,968				43,598		4.17	%
Other Time Deposits			680,959				4,261		2.48	%			841,497				6,335		2.99	%			966,965				7,023		2.89	%			916,798				29,325		3.20	%			527,927				18,753		3.55	%
Total Interest-Bearing Deposits			2,353,816				13,410		2.26	%			2,547,366				17,365		2.70	%			2,310,885				19,654		3.38	%			2,567,500				76,246		2.97	%			2,282,540				84,353		3.70	%
Borrowings:
FHLB Advances			160,754				412		1.02	%			213,583				865		1.61	%			518,058				2,620		2.01	%			257,529				3,399		1.32	%			498,875				14,026		2.81	%
Other Borrowings			1,544				—		0.00	%			1,466				—		0.00	%			2,374				3		0.50	%			1,579				2		0.13	%			10,649				347		3.26	%
Junior Subordinated Debentures			82,406				690		3.32	%			82,406				747		3.60	%			82,406				1,293		6.24	%			82,406				3,271		3.97	%			82,406				5,056		6.14	%
Total Borrowings			244,704				1,102		1.79	%			297,455				1,612		2.15	%			602,838				3,916		2.58	%			341,514				6,672		1.95	%			591,930				19,429		3.28	%
TOTAL INTEREST-BEARING LIABILITIES		$	2,598,520			$	14,512		2.22	%		$	2,844,821			$	18,977		2.65	%		$	2,913,723			$	23,570		3.22	%		$	2,909,014			$	82,918		2.85	%		$	2,874,470			$	103,782		3.61	%
NET INTEREST INCOME(1)						$	28,679									$	26,844									$	30,887									$	102,470									$	135,864
NET INTEREST SPREAD(1)									2.99	%									2.47	%									2.74	%									2.28	%									2.95	%
NET INTEREST MARGIN(1)									3.46	%									3.00	%									3.38	%									2.84	%									3.72	%
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.