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8-K - FORM 8-K - HANMI FINANCIAL CORPv59773e8vk.htm
EX-99.1 - EX-99.1 - HANMI FINANCIAL CORPv59773exv99w1.htm
Exhibit 99.2
Pro Forma Capitalization:
Hanmi Bank pro forma TE/TA ratio = 11.0%
Assumes public offering transaction expenses of $2.3 million and other capital raising expenses of $0.5 million. Assumes stock price as of June 17, 2011 of $1.05.
HANMI BANK
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in Thousands)
                         
          Pro Forma        
          Adjustments        
          (Public Offering of        
    March 31, 2011     $75 million of     March 31, 2011  
    Actual     Common Stock) (1)     Pro Forma  
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO
                       
Total Assets
  $ 2,872,804     $ 60,000     $ 2,932,804  
Less Other Intangible Assets
    (303 )           (303 )
 
                 
Tangible Assets
  $ 2,872,501     $ 60,000     $ 2,932,501  
 
                 
 
                       
Total Stockholders’ Equity
  $ 261,639     $ 60,000     $ 321,639  
Less Other Intangible Assets
    (303 )           (303 )
 
                 
Tangible Stockholders’ Equity
  $ 261,336     $ 60,000     $ 321,336  
 
                 
 
                       
Total Stockholders’ Equity to Total Assets Ratio
    9.1 %             11.0 %
Tangible Common Equity to Tangible Assets Ratio
    9.1 %             11.0 %
 
(1)   Assumes that Hanmi Financial contributed $60 million of the offering proceeds into Hanmi Bank as equity capital on March 31, 2011.

 


 

Third Party Loan Review:
Beginning in 2010, Hanmi conducted third party loan reviews on a quarterly basis utilizing four different loan review firms.
    Most recently engaged a nationally recognized firm in Q4 2010 to perform a review of 150 loans internally graded as pass
 
    The loan review firm targeted the 25 largest loans and randomly selected 125 loans in excess of $350 thousand
# of Loans Improperly Graded
(BAR CHART)
Percentage of Loans Improperly Graded
(BAR CHART)

 


 

Stress Test Analysis:
Hanmi has engaged a third party to perform quarterly stress tests in order to verify its internal loss analysis.
The third party utilized two distinct methodologies in its analysis performed on Hanmi’s loan portfolio as of Q1 2011:
    Static shock which assesses overall volatility of risk by analyzing key loss drivers, such as LTV ratios
 
    Dynamic shock which assesses current risk by analyzing loss trends by lending class/geography
The stress tests are performed over a 2-year(1) time horizon under two macroeconomic scenarios: base and adverse
2 Year Loss Estimates(1)(2) {$mm}
(BAR CHART)
 
(1) 2-year time horizon includes Q2 2011 to Q1 2013.
(2) Loss estimate range of $101 mm to $207 mm based on the following weighting assigned to loss estimates under three methodologies: 10% to third party static shock scenario, 40% to Hanmi Experience Model and 50% to third party dynamic shock scenario. Loss estimates are net of recoveries.

 


 

Pro Forma Valuation:
(BAR CHART)
 
(1) Calculated as common equity of $184.1 mm less intangibles of $2 mm. See Appendix for reconciliation of non-GAAP financial measures that follows. (2) Net proceeds of $72.2 mm is calculated using gross capital raise of $75 mm less assumed capital raise expenses of $2.8 mm. (3) Price to tangible book value assumes offering price of $1.05 per share. (4) Reflects the midpoint of the Company’s estimated range of realizable DTA from $50 million to $70 million. Such range was derived from multiple assumptions, including but not limited to the following: (i) share price at closing of offering, (ii) future federal & state NOL & NUBIL, (iii) future DTA valuation allowance at reversal, (iv) timing of reversal, (v) IRS Section 382 limitation, and (vi) U.S. Treasury long-term interest rates. The Company also considered a third party analysis valuing its realizable DTA at $69 million. Actual realization of any DTA amount is not guaranteed, and actual results may differ from the Company’s estimate. (5) Based on historical PTPP earnings for the past 8 quarters. PTPP calculated as net income before taxes + provision expense + OREO expense. See Appendix for reconciliation of non-GAAP financial measures. (6) Based on third party-provided “moderate case” stress test analysis as well as the Company’s historical loss experience model. Applied weights of 10%, 40% and 50% weights to expected losses from third party static loss scenario, Hanmi Experience model, and third party dynamic loss scenario, respectively. Estimated cumulative loan losses for the next 8 quarters (4/1/2011 — 3/31/2013). (7) Based on a reserve / loan ratio of 3.0% on the Company’s existing loan portfolio balance of $2.2 billion (per Company’s historical reserve / loan levels).

 


 

Non-GAAP Reconciliation 1 (1) Assumes Hanmi Financial contributes $60 million of the offering proceeds to Hanmi Bank as equity capital.
The non-GAAP measures included herein are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are used by management in the analysis of the Company’s performance. Management believes the presentation of these financial measures provides useful supplemental information that is essential to a proper understanding of the financial results of the Company. This disclosure should not be viewed as a substitution for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.