HANMI FINANCIAL CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

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Exhibit 99.1

LOGO

HANMI EARNS $4.2 MILLION AND REPORTS EARNINGS PER SHARE OF

$0.03 IN 3Q11

IMPROVING CREDIT METRICS, HIGHER NET INTEREST MARGIN, AND BETTER EFFICIENCY

CONTRIBUTE TO PROFITS

LOS ANGELES – October 20, 2011 – Hanmi Financial Corporation (NASDAQ: HAFC), the holding company for Hanmi Bank (the “Bank”), today reported net income of $4.2 million, or $0.03 per diluted common share, for the third quarter of 2011. Hanmi’s performance marks the fourth consecutive profitable quarter following the $8.0 million, or $0.05 per diluted common share, earned in the second quarter of 2011. In the first nine months of 2011, Hanmi earned $22.6 million, or $0.15 per diluted common share, compared to a loss of $93.3 million, or $1.24 per common share, in the first nine months of 2010.

“Hanmi’s continuing profitability in the third quarter further demonstrates the strength of our core franchise and sustainable improvements in the overall condition of the Bank,” said Jay S. Yoo, President and Chief Executive Officer. “Improvements in key asset quality measures, liquidation of problem assets, and contributions from SBA loans and investment sales highlight the third quarter profitable results.”

Hanmi Financial 2011 Quarterly Financial Highlights


	For the Three Months Ended
(Dollars in Thousands)	9/30/2011			6/30/2011			9/30/2010
Net income	$	4,203		$	8,001		$	(14,577	)
Net income per diluted common share	$	0.03		$	0.05		$	(0.12	)

Total assets	$	2,686,570		$	2,710,835		$	2,968,505
Total net loans	$	1,928,735		$	2,003,669		$	2,218,228
Total deposits	$	2,353,169		$	2,398,375		$	2,527,386

Net interest margin		3.75	%		3.65	%		3.49	%
Efficiency ratio		60.55	%		72.67	%		75.38	%

Tangible common equity per common share	$	1.33		$	1.30		$	1.13

Non-performing assets	$	95,792		$	168,442		$	215,306
Non-performing Assets/Total assets		3.57	%		6.21	%		7.25	%
Allowance for loan losses/Total gross loans		4.97	%		5.16	%		7.35	%
Allowance for loan losses/Total non-performing loans		105.54	%		65.25	%		90.41	%

Hanmi Bank
Tier 1 risk-based capital		13.42	%		12.72	%		10.28	%
Total risk-based capital		14.71	%		14.02	%		11.61	%
Tangible equity/Tangible assets		10.63	%		10.33	%		8.37	%

Third Quarter of 2011 Highlights (at or for the period ended September 30, 2011)

•

Substantial improvements in asset quality including a reduction in non-performing assets (NPAs), delinquent loans, and charge-offs

•

NPAs declined 55.5% year-over-year to $95.8 million, or 3.57% of total assets, from $215.3 million, or 7.25% of total assets in the third quarter of 2010. NPAs decreased by $72.7 million, or 43.1%, from the immediately preceding quarter, reflecting success in selling non-performing loans and slowing migration of new nonaccrual loans.

•

Delinquent loans, which are 30 to 89 days past due and still accruing, were $16.5 million, up from $15.6 million, or 5.3%, in the immediately preceding quarter, and down from $23.9 million a year ago, or 31.1%, a year ago.

•

Total net charge-offs declined to $15.5 million from $16.5 million, or 6.0%, in the second quarter of 2011, and down from $21.3 million, or 27.2%, in the third quarter of 2010.

•

All capital ratios improved from prior quarter and continues to be considered “well-capitalized” for regulatory purposes

•

The Bank’s tangible common equity to tangible assets ratio at September 30, 2011 was 10.63%, which well exceeds the 9.5% requirement set forth in the Final Order issued to the Bank by the California Department of Financial Institutions (CDFI)

•

Sustainable profitability with a positive trend on efficiency and net interest margin

•

Net income for the third quarter of 2011 totaled $4.2 million, or $0.03 per diluted common share, and earnings for the first nine months of 2011 was $22.6 million, or $0.15 per diluted common share.

•

Net interest margin (NIM) was 3.75% in the third quarter of 2011, up 10 basis points from 3.65% in the immediately preceding quarter and up 26 basis points from 3.49% in the third quarter of 2010.

•

Efficiency ratio improved to 60.6% this quarter as compared to 72.7% in the immediately preceding quarter and 75.4% in the third quarter of 2010.

Capital Management

“We are continuing to reevaluate the adequacy of our capital given the level and nature of the risks to which we are exposed. Despite volatile financial markets and economic headwinds, improving asset quality and stronger capital levels allow us time to properly evaluate options that maximize shareholder value,” said Yoo. The following table shows the Bank’s capital ratios:


Capital ratio	3Q2011			2Q2011			3Q2010
Total risk-based		14.71	%		14.02	%		11.61	%
Tier 1 risk-based		13.42	%		12.72	%		10.28	%
Tier 1 leverage		10.41	%		9.70	%		8.26	%
Tangible common equity		10.63	%		10.33	%		8.37	%

All of the Bank’s capital ratios were above the minimum regulatory standards for being considered to be “well-capitalized” for regulatory purposes. The Bank’s tangible common equity to tangible assets ratio of 10.63% at September 30, 2011, well exceeds the 9.5% requirement set forth in the Final Order issued to the Bank by the CDFI.

Asset Quality

NPLs declined 42.8% to $95.5 million at September 30, 2011, down from $167.1 million at June 30, 2011, and $194.7 million at September 30, 2010. Of the NPLs, non-performers current on payments were $50.4 million, or 52.8%, compared to $85.6 million or 51.2% at June 30, 2011 and $33.4 million or 17.2% at September 30, 2010. In addition, $17.5 million, or 18.3% of the NPLs, were recorded at the lower of cost or fair value as they were classified as held for sale. Out of the NPLs, $12.5 million is guaranteed by the Small Business Administration (SBA) and the State of California.

The following table shows NPLs by loan category:

Total Non-Performing Loans


(Dollars in Thousands)	09/30/2011		% of Total NPL			06/30/2011		% of Total NPL			12/31/2010		% of Total NPL			09/30/2010		% of Total NPL
Real Estate Loans:
Commercial Property
Retail		13,273		13.9	%		14,335		8.6	%		10,998		6.5	%		17,308		8.9	%
Land		2,723		2.9	%		25,184		15.1	%		26,808		15.9	%		29,701		15.3	%
Other		6,844		7.2	%		4,613		2.8	%		10,131		6.0	%		13,794		7.1	%
Construction		6,142		6.4	%		12,298		7.4	%		19,097		11.3	%		9,338		4.8	%
Residential Property		1,464		1.5	%		1,726		1.0	%		1,926		1.1	%		1,957		1.0	%

Commercial & Industrial Loans:
Commercial Term
Unsecured		10,395		10.9	%		10,758		6.4	%		17,065		10.1	%		18,565		9.5	%
Secured by Real Estate		29,667		31.1	%		60,053		35.9	%		45,946		27.2	%		70,564		36.2	%
Commercial Lines of Credit		2,222		2.3	%		2,905		1.7	%		2,798		1.7	%		3,692		1.9	%
SBA		21,673		22.7	%		31,163		18.6	%		33,085		19.6	%		28,632		14.7	%
International Loans							3,243		1.9	%		127		0.1	%		540		0.3	%

Consumer Loans		1,100		1.2	%		824		0.5	%		1,047		0.6	%		638		0.3	%

TOTAL NPL ⁽¹⁾		95,503		100.0	%		167,102		100.0	%		169,028		100.0	%		194,729		100.0	%

⁽¹⁾

Includes loans held for sale of $17.5 million, $22.6 million, $26.6 million and $10.7 million as of September 30, 2011, June 30, 2011, December 31, 2010 and September 30, 2010, respectively.

“NPLs declined significantly in the third quarter, as we continued to proactively sell loans and move delinquent loans through the collection process,” said J.H. Son, Executive Vice President and Chief Credit Officer. “We completed $30.6 million in non-performing loan sales and a $19.2 million short sale, despite what has been a pretty soft market. We were able to accomplish this goal with small tranche sales which helped to improve overall returns.”

The sale of other real estate owned (OREO) continued during the third quarter, with five properties valued at $2.2 million resulting in an $82,000 net gain. In the first nine months of 2011, Hanmi sold thirteen properties valued at $6.7 million resulting in a net loss of $599,000. OREO totaled $289,000 at September 30, 2011, down from $1.3 million at June 30, 2011, and down from $20.6 million at September 30, 2010.

“Loans that are less than 90 days delinquent increased minimally in the third quarter of 2011, reflecting more stable levels for the past two quarters,” Son said. Delinquent loans, 30-89 past due and still accruing interest, which are not included in NPLs, totaled $16.5 million, or 0.81% of gross loans at September 30, 2011, a marginal increase from $15.6 million, or 0.74% of gross loans at June 30, 2011.

The following table shows delinquent loans, 30-89 past due and still accruing interest, by loan category:

Delinquent Loans (30-89 days past due and still accruing interest)


(Dollars in Thousands)	9/30/2011		% of Total			6/30/2011		% of Total			12/31/2010		% of Total			9/30/2010		% of Total
Real Estate Loans:
Commercial Property
Retail		3,975		24.1	%												381		1.6	%
Land
Other		766		4.7	%		4,082		26.1	%
Construction												4,894		22.8	%		8,713
Residential Property		1,763		10.7	%		2,778		17.8	%		522		2.4	%		261		1.1	%

Commercial & Industrial Loans:
Commercial Term
Unsecured		764		4.6	%		2,079		13.3	%		3,620		16.9	%		2,494		10.4	%
Secured by Real Estate		4,523		27.5	%		4,625		29.6	%		7,251		33.8	%		6,087		25.5	%
Commercial Lines of Credit		300		1.8	%							160		0.7	%		294		1.2	%
SBA		4,045		24.6	%		1,412		9.0	%		4,381		20.4	%		4,929		20.6	%
International Loans							99		0.6	%
Consumer Loans		337		2.0	%		569		3.6	%		629		2.9	%		737		3.1	%

TOTAL ⁽¹⁾		16,473		100.0	%		15,644		100.0	%		21,457		100.0	%		23,896		100.0	%

⁽¹⁾

Includes loans held for sale of $369,000 as of September 30, 2010.

The following table shows Hanmi’s credit quality trends since the third quarter of 2007:

Credit Quality Trends (Dollars in Thousands)


	Provision for Credit Losses		Net Charge-offs		Allowance for Loan Losses to Gross Loans (%)		30-89 Days Past Due to Gross Loans (%)		Non-performing Assets to Total Assets (% )
9/30/2011		8,100		15,506		4.97		0.81		3.57
6/30/2011		—		16,501		5.16		0.74		6.21
3/31/2011		—		21,555		5.79		0.95		5.36
12/31/2010		5,000		35,249		6.44		0.95		5.95
9/30/2010		22,000		21,304		7.35		1.00		7.25
6/30/2010		37,500		38,946		7.06		0.87		9.13
3/31/2010		57,996		26,393		6.63		2.56		9.43
12/31/2009		77,000		57,312		5.14		1.46		7.76
9/30/2009		49,500		29,875		4.19		0.96		5.83
6/30/2009		23,934		23,597		3.33		1.51		5.20
3/31/2009		45,953		11,813		3.16		1.45		4.04
12/31/2008		25,450		18,622		2.11		1.23		3.14
9/30/2008		13,176		11,831		1.91		0.68		3.04
6/30/2008		19,229		8,220		1.88		0.94		2.91
3/31/2008		17,821		7,297		1.60		0.73		2.25
12/31/2007		20,704		11,628		1.33		0.61		1.37
9/30/2007		8,464		6,084		1.07		0.52		1.12

One of the factors that have contributed to the improvement of asset quality is the on-going program for NPLs. During the third quarter of 2011, Hanmi sold 26 NPLs valued at $30.6 million for net proceeds of $27.5 million. In the first nine months of 2011, it sold 66 loans with net proceeds of $73.1 million. At September 30, 2011, loans held for sale (LHFS) totaled $37.2 million, a reduction of $6.9 million, or 15.7%, from $44.1 million at June 30, 2011, and an increase of 1.60%, from $36.6 million at December 31, 2010. As illustrated in the above table, Hanmi’s NPAs to total assets peaked at March 31, 2010 at 9.43% and has improved to 3.57% at September 30, 2011.

The following table presents the details of loans held for sale:

Loans Held for Sale


(Dollars in Thousands)	09/30/2011		06/30/2011		$ Change			% Change			12/31/2010		$ Change			% Change			09/30/2010		$ Change			% Change
Real Estate Loans:
Commercial Property
Retail		6,152																		1,939		4,213
Land												1,082		(1,082	)
Other		3,545		708		2,837						1,177		2,368						227		3,318
Construction												1,406		(1,406	)
Residential Property				266

Commercial & Industrial Loans:
Commercial Term
Unsecured																				144		(144	)
Secured by Real Estate		7,382		12,857		(5,475	)		-42.6	%		14,893		(7,511	)		-50.4	%		1,697		5,685
SBA		20,123		30,274		(10,151	)		-33.5	%		18,062		2,061			11.4	%		6,653		13,470

TOTAL		37,202		44,105		(12,789	)		-15.7	%		36,620		(5,570	)		1.6	%		10,660		26,542

At September 30, 2011, the allowance for loan losses was $100.8 million or 4.97% of gross loans. The allowance for loan losses to loans peaked in September of 2010 at 7.35%, and has steadily declined over the past few quarters as credit metrics improved. The ratio of allowance for loan losses to non-performing loans at September 30, 2011, improved to 105.5% compared to 65.3% at June 30, 2011. Third quarter charge-offs, net of recoveries, were $15.5 million in the third quarter of 2011, compared to $16.5 million in the second quarter of 2011 and $21.3 million in the third quarter of 2010.

Hanmi established a provision for credit losses of $8.1 million for the third quarter of 2011. The provision related predominantly to additional provisions for impaired loans and an increase in the historical loss factor in the commercial line of credit pool. Of the total $8.1 million of provision for credit losses, $831,000 was allocated to cover off-balance sheet items, bringing the allowance for off-balance sheet items total to $3.2 million. Hanmi recorded a provision for credit losses of $22.0 million and $117.5 million in the third quarter and first nine months of 2010, respectively. With the improvement in overall credit metrics, provision expense was $8.1 million in the first nine months of 2011. This assessment also takes into account many factors, including net loan charge-offs, non-accrual loans, specific allowance for loan losses, risk-rating migration and changes in the portfolio composition and size.

Balance Sheet

Total assets decreased to $2.69 billion at September 30, 2011, down 0.9% from $2.71 billion at June 30, 2011, and down 9.5% from $2.97 billion at September 30, 2010.

Gross loans, net of deferred loan fees, totaled $2.03 billion at September 30, 2011, down 3.9% from $2.11 billion at June 30, 2011, and down 15.2% from $2.39 billion at September 30, 2010. Average gross loans, net of deferred loan fees, decreased to $2.08 billion for the third quarter of 2011, down 2.8% from $2.14 billion for the second quarter of 2011, and down 15.4% from $2.46 billion for the third quarter of 2010. The slight decline in loan balance in the third quarter this year reflects continued progress in reducing the number of problem loans, partially offset by new loans originated and a lower level of charge-offs made in the quarter.

In the third quarter of 2011, the Hanmi’s total investment portfolio increased $24.7 million with $118.6 million of new purchases yielding on average 2.81% and averaging 4.9 years in duration. In addition there was $583,000 of positive fair value adjustment, partially offset by the calling of $49.8 million of bonds, the sale of $25.2 million of securities, the payment of $15.6 million in principal, and the maturation of $3.0 million of securities. The $25.2 million of securities sold had a weighted yield to maturity of 2.41% and a weighted modified duration of 4.20 years.

The average investment securities portfolio increased substantially to $394.4 million for the third quarter of 2011, up 76%, from $223.7 million for the third quarter a year ago. At September 30, 2011, the investment portfolio totaled $415.7 million, which is an increase of 6.3%, or $24.7 million, from the second quarter of 2011. “In September, the Federal Reserve announced plans to reduce long-term interest rates through the purchase of long-term bonds through its Operation Twist initiative,” said Lonny Robinson, Executive Vice President and Chief Financial Officer. “In anticipation of a flattening yield curve, we are implementing a barbell investment strategy by purchasing a mix of high quality notes and bonds, thereby increasing returns on our investment portfolio.”

Including secured off-balance sheet lines of credit, total available liquidity to Hanmi was $912 million at September 30, 2011, representing 33.9% of total assets and 38.7% of total deposits.

Average deposits declined 1.8% to $2.38 billion for the third quarter of 2011 compared to $2.43 billion for the immediately preceding quarter, and declined 6.9% from $2.56 billion for the third quarter a year ago. This year-over-year reduction in average deposits was almost entirely due to the successful strategy of reducing time deposits, particularly high-cost promotional CDs and funds raised from rate listing services.

The improved deposit mix resulting from our new marketing campaign and renewed loan production efforts, contributed to lower interest costs. “With our new ongoing marketing campaign and proactive loan production efforts, we are continuing to rebuild our core deposit base. Core deposits, which are total deposits less time deposits equal to or greater than $100,000, now account for 64.6% of total deposits, up from, 55.4% a year ago,” said Robinson.

Total deposits decreased by 1.9% from the immediately preceding quarter and decreased 6.9% from a year ago. Both the quarterly and annual decline in total deposits was primarily due to reductions in time deposits equal to or greater than $100,000, including a $45.7 million, or 5.2% decrease for the third quarter of 2011, and $293.6 million, or 25.5% decrease year-over-year. Total deposits were $2.35 billion at September 30, 2011, compared to $2.40 billion at June 30, 2011, and $2.53 billion at September 30, 2010. There are no brokered deposits in the deposit mix at quarter-end.

Results of Operations

Net interest income, before the provision for credit losses, totaled $25.2 million for the third quarter of 2011, and $76.7 million for the first nine months of 2011, down 1.2% in the quarter and 4.0% year-over-year. Interest and dividend income was down 2.9% in the third quarter of 2011 while interest expense fell 8.8%. Year to date, interest and dividend income was down 10.7% and interest expense fell 28.6%.

The average yield on the loan portfolio improved 11 basis points to 5.60% in the third quarter of 2011 compared to 5.49% in the second quarter of 2011, and was up 16 basis points from 5.44% in the third quarter of 2010. Because interest recovery on loans that have been returned to accrual status exceeded interest reversal on loans in non-accrual status, the yield increased in the third quarter of 2011 compared to the immediately preceding quarter. The average yield on loans for the first nine months of 2011 increased 20 basis points to 5.57% from 5.37% for the first nine months of 2010.

The cost of average interest-bearing deposits in the third quarter of 2011 was down 7 basis points to 1.28% from 1.35% in the immediately preceding quarter and down 37 basis points from 1.65% in the third quarter of 2010. Year-to-date, the cost of deposits was down 39 basis points to 1.36% from 1.75% for the first nine months of 2010. As a result, NIM increased 10 basis points to 3.75% for the third quarter of 2011 compared to 3.65% for the second quarter of 2011, and was up 26 basis points from 3.49% for the third quarter of 2010. For the first nine months of 2011, NIM increased 11 basis points to 3.69% from 3.58% for the first nine months of 2010. “We have approximately $337 million in promotional CDs with a weighted average rate of 1.8% maturing over the next six months, of which $250 million will mature in March 2012. As we replace these promotional deposits with lower-cost deposits, we anticipate further margin improvement,” said Robinson.

Non-interest income in the third quarter of 2011 was $5.98 million, down 0.6% from $6.02 million in the second quarter of 2011, and up 5.4% from $5.7 million in the third quarter of 2010. For the first nine months of 2011, non-interest income dropped 9.6% to $17.5 million from $19.4 million for the first nine months of 2010. The year-over-year decline in non-interest income is due to decreased service charges on deposit accounts and net loss on sales of loans, partially offset by an increase in gain on sales of investment securities. Service charges on deposit accounts decreased to $9.6 million for the first nine months of 2011 compared to $10.8 million for the first nine months of 2010, reflecting a decrease in non-sufficient funds service charges, due to better balance management by customers and regulatory reforms on these fees. For the first nine months of 2011, Hanmi recognized a $1.9 million loss from the sale of loans which consisted of $2.9 million of impairment adjustments and $569,000 of direct losses from NPL sales, partially offset by $1.6 million of gains from sales of SBA loans. For the first nine months of 2011, Hanmi posted a net gain on sales of investment securities of $1.6 million compared to a gain of $117,000 in the first nine months of 2010.

Non-interest expense in the third quarter of 2011 decreased 17.6% to $18.9 million from $22.9 million in the immediately preceding quarter and was down 21.7% from $24.1 million in the third quarter a year ago. For the first nine months of 2011, non-interest expense decreased 16.3% to $62.8 million from $75.1 million in the first nine months of 2010. The notable year-over-year improvements were primarily attributable to lower OREO expenses, FDIC deposit insurance assessments and other regulatory costs, partially offset by $2.2 million in expenses associated with the unconsummated capital raising efforts.

Consequently, efficiency ratio improved to 60.6% this quarter as compared to 72.7% in the immediately preceding quarter and 75.4% in the third quarter of 2010. The efficiency ratio for the first nine months of 2011 showed substantial improvement to 66.6% as compared to 75.6% in the first nine months of 2010.

Conference Call Information

Management will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. ET) to discuss these results. This call will also be broadcast live via the internet. Investment professionals and all current and prospective shareholders are invited to access the live call by dialing (617) 213-8857 at 1:30 p.m. Pacific Time, using access code HANMI. To listen to the call online, either live or archived, visit the Investor Relations page of Hanmi’s website at www.hanmi.com. Shortly after the call concludes, the replay will also be available at (617) 801-6888, using access code #63388247 where it will be archived until November 11, 2011.

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 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. 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. 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 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 plans and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. 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: inability to continue as a going concern; inability to raise additional capital on acceptable terms or at all; 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 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 U.S. Securities and Exchange Commission (“SEC”), including, in particular Item 1A of our Form 10K for the year ended June 30, 2011, as well as current and periodic reports filed with the U.S. Securities and Exchange Commission 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.

Contact: Hanmi Financial Corporation


Lonny Robinson	Chief Financial Officer	(213)-368-3200
David Yang	Investor Relations Officer	(213) 637-4798

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in Thousands)


	September 30, 2011			June 30, 2011			% Change			December 31, 2010			% Change			September 30, 2010			% Change
ASSETS
Cash and Due from Banks	$	72,591		$	67,166			8.1	%	$	60,983			19.0	%	$	63,455			14.4	%
Interest-Bearing Deposits in Other Banks		156,271			131,757			18.6	%		158,737			(1.6	)%		218,843			(28.6	)%
Federal Funds Sold		—			—			—			30,000			—			—			—

Cash and Cash Equivalents		228,862			198,923			15.1	%		249,720			(8.4	)%		282,298			(18.9	)%

Investment Securities		415,698			391,045			6.3	%		413,963			0.4	%		325,428			27.7	%

Loans:
Gross Loans, Net of Deferred Loan Fees		2,029,527			2,112,698			(3.9	)%		2,267,126			(10.5	)%		2,394,291			(15.2	)%
Allowance for Loan Losses		(100,792	)		(109,029	)		(7.6	)%		(146,059	)		(31.0	)%		(176,063	)		(42.8	)%

Loans Receivable, Net		1,928,735			2,003,669			(3.7	)%		2,121,067			(9.1	)%		2,218,228			(13.1	)%

Accrued Interest Receivable		7,225			7,512			(3.8	)%		8,048			(10.2	)%		8,442			(14.4	)%
Due from Customers on Acceptances		599			1,629			(63.2	)%		711			(15.8	)%		1,375			(56.4	)%
Premises and Equipment, Net		16,627			16,869			(1.4	)%		17,599			(5.5	)%		17,639			(5.7	)%
Other Real Estate Owned, Net		289			1,340			(78.4	)%		4,089			(92.9	)%		20,577			(98.6	)%
Servicing Assets		2,884			2,545			13.3	%		2,890			(0.2	)%		3,197			(9.8	)%
Other Intangible Assets, Net		1,664			1,825			(8.8	)%		2,233			(25.5	)%		2,480			(32.9	)%
Investment in FHLB and FRB Stock, at Cost		31,451			32,565			(3.4	)%		34,731			(9.4	)%		35,201			(10.7	)%
Bank-Owned Life Insurance		28,051			27,813			0.9	%		27,350			2.6	%		27,111			3.5	%
Income Taxes Receivable		9,188			9,188			—			9,188			—			9,188			—
Other Assets		15,297			15,912			(3.9	)%		15,559			(1.7	)%		17,341			(11.8	)%

TOTAL ASSETS	$	2,686,570		$	2,710,835			(0.9	)%	$	2,907,148			(7.6	)%	$	2,968,505			(9.5	)%

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-Bearing	$	621,195		$	600,812			3.4	%	$	546,815			13.6	%	$	559,764			11.0	%
Interest-Bearing		1,731,974			1,797,563			(3.6	)%		1,919,906			(9.8	)%		1,967,622			(12.0	)%

Total Deposits		2,353,169			2,398,375			(1.9	)%		2,466,721			(4.6	)%		2,527,386			(6.9	)%
Accrued Interest Payable		13,490			14,226			(5.2	)%		15,966			(15.5	)%		13,727			(1.7	)%
Bank Acceptances Outstanding		599			1,629			(63.2	)%		711			(15.8	)%		1,375			(56.4	)%
Federal Home Loan Bank Advances		3,392			3,479			(2.5	)%		153,650			(97.8	)%		153,734			(97.8	)%
Other Borrowings		18,708			1,034			—			1,570			—			2,558			—
Junior Subordinated Debentures		82,406			82,406			—			82,406			—			82,406			—
Deferred Tax Liabilities		—			—			—			—			—			807			—
Accrued Expenses and Other Liabilities		11,603			11,321			2.5	%		12,868			(9.8	)%		13,880			(16.4	)%

Total Liabilities		2,483,367			2,512,470			(1.2	)%		2,733,892			(9.2	)%		2,795,873			(11.2	)%
Stockholders’ Equity		203,203			198,365			2.4	%		173,256			17.3	%		172,632			17.7	%

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,686,570		$	2,710,835			(0.9	)%	$	2,907,148			(7.6	)%	$	2,968,505			(9.5	)%

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Thousands, Except Per Share Data)


	Three Months Ended															Nine Months Ended
	Sept. 30, 2011			June 30, 2011			% Change			Sept. 30, 2010			% Change			Sept. 30, 2011			Sept. 30, 2010			% Change
INTEREST AND DIVIDEND INCOME:
Interest and Fees on Loans	$	29,355		$	29,249			0.4	%	$	33,681			(12.8	)%	$	89,509		$	104,862			(14.6	)%
Taxable Interest on Investment Securities		2,022			3,094			(34.6	)%		1,592			27.0	%		7,789			4,035			93.0	%
Tax-Exempt Interest on Investment Securities		39			37			5.4	%		62			(37.1	)%		116			216			(46.3	)%
Interest on Federal Funds Sold		54			27			—			40			35.0	%		116			70			65.7	%
Dividends on FRB and FHLB Stock		129			132			(2.3	)%		135			(4.4	)%		394			397			(0.8	)%
Interest on Interest-Bearing Deposits in Other Banks		75			79			(5.1	)%		165			(54.5	)%		243			319			(23.8	)%

Total Interest and Dividend Income		31,674			32,618			(2.9	)%		35,675			(11.2	)%		98,167			109,899			(10.7	)%

INTEREST EXPENSE:
Interest on Deposits		5,730			6,192			(7.5	)%		8,299			(31.0	)%		18,657			26,816			(30.4	)%
Interest on Federal Home Loan Bank Advances and Other Borrowings		46			240			(80.8	)%		364			(87.4	)%		619			1,080			(42.7	)%
Interest on Junior Subordinated Debentures		739			711			3.9	%		739			—			2,148			2,100			2.3	%

Total Interest Expense		6,515			7,143			(8.8	)%		9,402			(30.7	)%		21,424			29,996			(28.6	)%

NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES		25,159			25,475			(1.2	)%		26,273			(4.2	)%		76,743			79,903			(4.0	)%
Provision for Credit Losses		8,100			—			—			22,000			(63.2	)%		8,100			117,496			(93.1	)%

NET INTEREST INCOME (LOSS) AFTER PROVISION FOR CREDIT LOSSES		17,059			25,475			(33.0	)%		4,273			299.2	%		68,643			(37,593	)		—

NON-INTEREST INCOME:
Service Charges on Deposit Accounts		3,225			3,278			(1.6	)%		3,442			(6.3	)%		9,644			10,770			(10.5	)%
Insurance Commissions		940			1,203			(21.9	)%		1,089			(13.7	)%		3,403			3,573			(4.8	)%
Remittance Fees		469			499			(6.0	)%		484			(3.1	)%		1,430			1,469			(2.7	)%
Trade Finance Fees		341			328			4.0	%		381			(10.5	)%		966			1,144			(15.6	)%
Other Service Charges and Fees		389			368			5.7	%		409			(4.9	)%		1,090			1,193			(8.6	)%
Net Gain (Loss) on Sales of Loans		(1,445	)		(77	)		—			229			—			(1,860	)		443			—
Bank-Owned Life Insurance Income		237			233			1.7	%		237			—			700			703			(0.4	)%
Net Gain (Loss) on Sales of Investment Securities		1,704			(70	)		—			4			—			1,634			117			—
Impairment Loss on Investment Securities		—			—			—			(790	)		—			—			(790	)		—
Other Operating Income		118			255			(53.7	)%		186			(36.6	)%		496			731			(32.1	)%

Total Non-Interest Income		5,978			6,017			(0.6	)%		5,671			5.4	%		17,503			19,353			(9.6	)%

NON-INTEREST EXPENSE:
Salaries and Employee Benefits		8,146			8,762			(7.0	)%		9,552			(14.7	)%		26,032			27,349			(4.8	)%
Occupancy and Equipment		2,605			2,650			(1.7	)%		2,702			(3.6	)%		7,820			8,101			(3.5	)%
Deposit Insurance Premiums and Regulatory Assessments		1,552			1,377			12.7	%		2,253			(31.1	)%		4,999			8,552			(41.5	)%
Data Processing		1,383			1,487			(7.0	)%		1,446			(4.4	)%		4,269			4,432			(3.7	)%
Other Real Estate Owned Expense		(86	)		806			—			2,580			—			1,549			9,998			(84.5	)%
Professional Fees		1,147			1,138			0.8	%		753			52.3	%		3,074			2,841			8.2	%
Directors and Officers Liability Insurance		737			733			0.5	%		716			2.9	%		2,204			2,149			2.6	%
Expenses Related to Unconsummated Capital Raises		—			2,220			—			—			—			2,220			—			—
Other Operating Expenses		3,368			3,713			(9.3	)%		4,077			(17.4	)%		10,632			11,648			(8.7	)%

Total Non-Interest Expense		18,852			22,886			(17.6	)%		24,079			(21.7	)%		62,799			75,070			(16.3	)%

INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES		4,185			8,606			(51.4	)%		(14,135	)		—			23,347			(93,310	)		—
Provision (Benefit) for Income Taxes		(18	)		605			—			442			—			706			11			—

NET INCOME (LOSS)	$	4,203		$	8,001			(47.5	)%	$	(14,577	)		—		$	22,641		$	(93,321	)		—

EARNINGS (LOSS) PER SHARE:
Basic	$	0.03		$	0.05			(40.0	)%	$	(0.12	)		—		$	0.15		$	(1.24	)		—
Diluted	$	0.03		$	0.05			(40.0	)%	$	(0.12	)		—		$	0.15		$	(1.24	)		—
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic		151,107,790			151,104,636						122,789,120						151,091,317			75,204,528
Diluted		151,258,390			151,258,390						122,789,120						151,246,741			75,204,528

SHARES OUTSTANDING AT PERIOD-END		151,258,390			151,258,390						151,198,390						151,258,390			151,198,390

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL DATA (UNAUDITED)

(Dollars in Thousands)


	Three Months Ended															Nine Months Ended
	Sept 30, 2011			June 30, 2011			% Change			Sept 30, 2010			% Change			Sept 30, 2011			Sept 30, 2010			% Change
AVERAGE BALANCES:
Average Gross Loans, Net of Deferred Loan Fees	$	2,077,934		$	2,136,976			(2.8	)%	$	2,456,883			(15.40	)%	$	2,149,101		$	2,610,122			(17.7	)%
Average Investment Securities		394,379			497,052			(20.7	)%		223,709			76.3	%		454,560			169,558			168.1	%
Average Interest-Earning Assets		2,660,776			2,804,709			(5.1	)%		2,989,762			(11.00	)%		2,785,115			2,988,813			(6.8	)%
Average Total Assets		2,700,629			2,836,967			(4.8	)%		2,983,632			(9.5	)%		2,813,865			3,015,243			(6.7	)%
Average Deposits		2,383,639			2,427,934			(1.8	)%		2,559,116			(6.9	)%		2,423,194			2,612,891			(7.3	)%
Average Borrowings		87,386			190,447			(54.1	)%		239,992			(63.6	)%		171,212			245,708			(30.3	)%
Average Interest-Bearing Liabilities		1,859,847			2,025,392			(8.2	)%		2,238,036			(16.90	)%		2,005,110			2,296,599			(12.7	)%
Average Stockholders’ Equity		200,971			189,528			6.0	%		155,056			29.6	%		189,658			128,268			47.9	%
Average Tangible Equity		199,219			187,595			6.2	%		152,417			30.7	%		187,719			125,327			49.8	%

PER SHARE DATA:
Earnings (Loss) Per Share - Basic	$	0.03		$	0.05					$	(0.12	)				$	0.15		$	(1.24	)
Earnings (Loss) Per Share - Diluted	$	0.03		$	0.05					$	(0.12	)				$	0.15		$	(1.24	)
Book Value Per Share *⁽¹⁾*	$	1.34		$	1.31					$	1.14					$	1.34		$	1.14
Tangible Book Value Per Share *⁽²⁾*	$	1.33		$	1.30					$	1.13					$	1.33		$	1.13

PERFORMANCE RATIOS (Annualized):
Return on Average Assets		0.62	%		1.13	%					(1.94	)%					1.08	%		(4.14	)%
Return on Average Stockholders’ Equity		8.30	%		16.93	%					(37.30	)%					15.96	%		(97.27	)%
Return on Average Tangible Equity		8.37	%		17.11	%					(37.94	)%					16.13	%		(99.56	)%
Efficiency Ratio		60.55	%		72.67	%					75.38	%					66.63	%		75.63	%
Net Interest Spread *⁽³⁾*		3.34	%		3.26	%					3.07	%					3.29	%		3.17	%
Net Interest Margin *⁽³⁾*		3.75	%		3.65	%					3.49	%					3.69	%		3.58	%

ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period	$	109,029		$	125,780			(13.3	)%	$	176,667			(38.3	)%	$	146,059		$	144,996			0.7	%
Provision Charged to Operating Expense		7,269			(250	)		—			20,700			(64.9	)%		8,295			117,710			(93.0	)%
Charge-Offs, Net of Recoveries		(15,506	)		(16,501	)		(6.0	)%		(21,304	)		(27.2	)%		(53,562	)		(86,643	)		(38.2	)%

Balance at End of Period	$	100,792		$	109,029			(7.6	)%	$	176,063			(42.8	)%	$	100,792		$	176,063			(42.8	)%

Allowance for Loan Losses to Total Gross Loans		4.97	%		5.16	%					7.35	%					4.97	%		7.35	%
Allowance for Loan Losses to Total Non-Performing Loans		105.54	%		65.25	%					90.41	%					105.54	%		90.41	%

ALLOWANCE FOR OFF-BALANCE SHEET ITEMS:
Balance at Beginning of Period	$	2,391		$	2,141			11.7	%	$	2,362			1.2	%	$	3,417		$	3,876			(11.8	)%
Provision Charged to Operating Expense		831			250			—			1,300			—			(195	)		(214	)		(8.9	)%

Balance at End of Period	$	3,222		$	2,391			34.8	%	$	3,662			(12.0	)%	$	3,222		$	3,662			(12.0	)%

⁽¹⁾

Total stockholders’ equity divided by common shares outstanding.

⁽²⁾

Tangible equity divided by common shares outstanding. See “Non-GAAP Financial Measures.”

⁽³⁾

Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL DATA (UNAUDITED) (Continued)

(Dollars in Thousands)


	Sept. 30 2011			June 30, 2011			% Change			December 31, 2010			% Change			Sept. 30, 2010			% Change
NON-PERFORMING ASSETS:
Non-Accrual Loans	$	95,503		$	167,102			(42.8	)%	$	169,028			(43.5	)%	$	194,729			(51.0	)%
Loans 90 Days or More Past Due and Still Accruing		—			—			—			—			—			—			—

Total Non-Performing Loans		95,503			167,102			(42.8	)%		169,028			(43.5	)%		194,729			(51.0	)%
Other Real Estate Owned, Net		289			1,340			(78.4	)%		4,089			(92.9	)%		20,577			(98.6	)%

Total Non-Performing Assets	$	95,792		$	168,442			(43.1	)%	$	173,117			(44.7	)%	$	215,306			(55.5	)%

Total Non-Performing Loans/Total Gross Loans		4.71	%		7.91	%					7.45	%					8.13	%
Total Non-Performing Assets/Total Assets		3.57	%		6.21	%					5.95	%					7.25	%
Total Non-Performing Assets/Allowance for Loan Losses		95.0	%		154.5	%					118.5	%					122.3	%
DELINQUENT LOANS *⁽⁴⁾*	$	16,473		$	15,644			5.3	%	$	21,457			(23.2	)%	$	23,896			(31.1	)%

Delinquent Loans/Total Gross Loans		0.81	%		0.74	%					0.95	%					1.00	%
LOAN PORTFOLIO:
Real Estate Loans	$	764,169		$	788,559			(3.1	)%	$	856,527			(10.8	)%	$	885,734			(13.7	)%
Commercial and Industrial Loans *⁽⁵⁾*		1,220,245			1,277,650			(4.5	)%		1,360,865			(10.3	)%		1,456,163			(16.2	)%
Consumer Loans		44,819			46,500			(3.6	)%		50,300			(10.9	)%		53,237			(15.8	)%

Total Gross Loans		2,029,233			2,112,709			(4.0	)%		2,267,692			(10.5	)%		2,395,134			(15.3	)%
Deferred Loan Fees		294			(11	)		—			(566	)		—			(843	)		0.0	%

Gross Loans, Net of Deferred Loan Fees		2,029,527			2,112,698			(3.9	)%		2,267,126			(10.5	)%		2,394,291			(15.2	)%
Allowance for Loan Losses		(100,792	)		(109,029	)		(7.6	)%		(146,059	)		(31.0	)%		(176,063	)		(42.8	)%

Loans Receivable, Net	$	1,928,735		$	2,003,669			(3.7	)%	$	2,121,067			(9.1	)%	$	2,218,228			(13.1	)%

LOAN MIX:
Real Estate Loans		37.7	%		37.3	%					37.8	%					37.0	%
Commercial and Industrial Loans		60.1	%		60.5	%					60.0	%					60.8	%
Consumer Loans		2.2	%		2.2	%					2.2	%					2.2	%

Total Gross Loans		100.0	%		100.0	%					100.0	%					100.0	%

DEPOSIT PORTFOLIO:
Demand - Noninterest-Bearing	$	621,195		$	600,812			3.4	%	$	546,815			13.6	%	$	559,764			11.0	%
Savings		106,633			110,935			(3.9	)%		113,968			(6.4	)%		119,824			(11.0	)%
Money Market Checking and NOW Accounts		455,438			484,132			(5.9	)%		402,481			13.2	%		422,564			7.8	%
Time Deposits of $100,000 or More		833,180			878,871			(5.2	)%		1,118,621			(25.5	)%		1,126,760			(26.1	)%
Other Time Deposits		336,723			323,625			4.0	%		284,836			18.2	%		298,474			12.8	%

Total Deposits	$	2,353,169		$	2,398,375			(1.9	)%	$	2,466,721			(4.6	)%	$	2,527,386			(6.9	)%

DEPOSIT MIX:
Demand - Noninterest-Bearing		26.4	%		25.1	%					22.2	%					22.1	%
Savings		4.5	%		4.6	%					4.6	%					4.7	%
Money Market Checking and NOW Accounts		19.4	%		20.2	%					16.3	%					16.7	%
Time Deposits of $100,000 or More		35.4	%		36.6	%					45.3	%					44.6	%
Other Time Deposits		14.3	%		13.5	%					11.6	%					11.9	%

Total Deposits		100.0	%		100.0	%					100.0	%					100.0	%

CAPITAL RATIOS (Bank Only):
Total Risk-Based		14.71	%		14.02	%					12.22	%					11.61	%
Tier 1 Risk-Based		13.42	%		12.72	%					10.91	%					10.28	%
Tier 1 Leverage		10.41	%		9.70	%					8.55	%					8.26	%
Tangible equity ratio		10.63	%		10.33	%					8.59	%					8.37	%

(4)	30 to 89 days past due and still accruing interest

(5)	Commercial and industrial loans include owner-occupied property loans of $811.0 million, $848.8 million, $894.8 million and $967.9 million as of September 30, 2011, June 30, 2011, December 31, 2010 and September 30, 2010, respectively.

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID (UNAUDITED)

(Dollars in Thousands)


	Three Months Ended																							Nine Months Ended
	September 30, 2011							June 30, 2011								September 30, 2010								September 30, 2011								September 30, 2010
	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	$	686,766	$	8,974		5.18	%	$	688,142		$	9,386		5.47	%	$	773,589		$	10,638		5.46	%	$	698,818		$	27,971		5.35	%	$	806,704		$	32,363		5.36	%
Construction		40,486		663		6.50	%		50,192			621		4.96	%		71,545			862		4.78	%		50,227			1,792		4.77	%		88,424			3,202		4.84	%
Residential Property		57,164		677		4.70	%		59,323			679		4.59	%		67,291			805		4.75	%		59,141			2,039		4.61	%		70,410			2,520		4.79	%

Total Real Estate Loans		784,416		10,314		5.22	%		797,657			10,686		5.37	%		912,425			12,305		5.35	%		808,186			31,802		5.26	%		965,538			38,085		5.27	%
Commercial and Industrial Loans ⁽¹⁾		1,247,713		18,435		5.86	%		1,291,470			17,914		5.56	%		1,490,811			20,611		5.49	%		1,293,472			55,741		5.76	%		1,588,154			64,330		5.42	%
Consumer Loans		45,663		524		4.55	%		48,017			562		4.69	%		54,469			690		5.03	%		47,603			1,668		4.68	%		57,425			2,277		5.30	%

Total Gross Loans		2,077,792		29,273		5.59	%		2,137,144			29,162		5.47	%		2,457,705			33,606		5.42	%		2,149,261			89,211		5.55	%		2,611,117			104,692		5.36	%
Prepayment Penalty Income		—		81		—			—			87		—			—			75		—			—			297		—			—			170		—
Unearned Income on Loans, Net of Costs		142		—		—			(168	)		—		—			(823	)		—		—			(160	)		—		—			(994	)		—		—

Gross Loans, Net		2,077,934		29,354		5.60	%		2,136,976			29,249		5.49	%		2,456,882			33,681		5.44	%		2,149,101			89,508		5.57	%		2,610,123			104,862		5.37	%

Investment Securities:
Municipal Bonds - Taxable		10,732		115		4.29	%		13,603			140		4.12	%		—			—		—			13,930			433		4.14	%		—			—		0.00	%
Municipal Bonds -Nontaxable ⁽²⁾		4,526		60		5.30	%		4,125			57		5.53	%		6,301			95		6.03	%		4,373			179		5.46	%		7,107			332		6.23	%
U.S. Government Agency Securities		106,029		387		1.46	%		152,438			629		1.65	%		92,690			620		2.68	%		134,779			1,639		1.62	%		63,790			1,563		3.27	%
Mortgage-Backed Securities		108,398		552		2.04	%		127,413			946		2.97	%		63,439			537		3.39	%		116,857			2,137		2.44	%		61,265			1,604		3.49	%
Collateralized Mortgage Obligations		132,931		713		2.15	%		169,110			1,113		2.63	%		45,747			300		2.62	%		152,788			2,803		2.45	%		23,931			542		3.02	%
Corporate Bonds		20,381		168		3.30	%		20,121			165		3.28	%		3,130			30		3.83	%		20,236			500		3.29	%		1,055			30		3.79	%
Other Securities		11,382		87		3.06	%		10,242			101		3.94	%		12,402			103		3.32	%		11,597			277		3.18	%		12,410			295		3.17	%

Total Investment Securities ⁽²⁾		394,379		2,082		2.11	%		497,052			3,151		2.54	%		223,709			1,685		3.01	%		454,560			7,968		2.34	%		169,558			4,366		3.43	%

Other Interest-Earning Assets:
Equity Securities		32,491		129		1.59	%		34,078			133		1.56	%		36,568			135		1.48	%		34,030			394		1.54	%		37,961			397		1.39	%
Federal Funds Sold and Securities Purchased
Under Resale Agreements		4,734		5		0.42	%		7,067			9		0.51	%		6,932			8		0.46	%		6,160			22		0.48	%		11,056			41		0.49	%
Term Federal Funds Sold		42,913		49		0.46	%		13,681			18		0.53	%		22,880			32		0.56	%		25,542			94		0.49	%		10,128			29		0.38	%
Interest-Bearing Deposits in Other Banks		108,325		75		0.28	%		115,855			79		0.27	%		242,790			165		0.27	%		115,722			243		0.28	%		149,988			319		0.28	%

Total Other Interest-Earning Assets		188,463		258		0.55	%		170,681			239		0.56	%		309,170			340		0.44	%		181,454			753		0.55	%		209,133			786		0.50	%

TOTAL INTEREST-EARNING ASSETS ⁽²⁾	$	2,660,776	$	31,694		4.73	%	$	2,804,709		$	32,639		4.67	%	$	2,989,761		$	35,706		4.74	%	$	2,785,115		$	98,229		4.72	%	$	2,988,814		$	110,014		4.92	%

INTEREST-BEARING LIABILITIES
Interest-Bearing Deposits:
Savings	$	107,643	$	675		2.49	%	$	111,723		$	734		2.64	%	$	122,122		$	889		2.89	%	$	110,795		$	2,158		2.60	%	$	120,945		$	2,635		2.91	%
Money Market Checking and NOW Accounts		475,712		806		0.67	%		488,723			1,010		0.83	%		429,601			1,094		1.01	%		471,179			2,818		0.80	%		481,744			3,933		1.09	%
Time Deposits of $100,000 or More		854,894		3,237		1.50	%		926,024			3,477		1.51	%		1,133,970			5,059		1.77	%		943,366			10,773		1.53	%		1,050,248			14,793		1.88	%
Other Time Deposits		334,212		1,014		1.20	%		308,475			971		1.26	%		312,351			1,257		1.60	%		308,558			2,910		1.26	%		397,954			5,455		1.83	%

Total Interest-Bearing Deposits		1,772,461		5,732		1.28	%		1,834,945			6,192		1.35	%		1,998,044			8,299		1.65	%		1,833,898			18,659		1.36	%		2,050,891			26,816		1.75	%

Borrowings:
FHLB Advances		3,437		46		5.31	%		106,710			239		0.90	%		153,777			342		0.88	%		87,369			618		0.95	%		160,162			1,027		0.86	%
Other Borrowings		1,543		—		—			1,331			1		0.30	%		3,809			22		2.29	%		1,437			1		0.09	%		3,140			53		2.26	%
Junior Subordinated Debentures		82,406		739		3.56	%		82,406			711		3.46	%		82,406			739		3.56	%		82,406			2,148		3.49	%		82,406			2,100		3.41	%

Total Borrowings		87,386		785		3.56	%		190,447			951		2.00	%		239,992			1,103		1.82	%		171,212			2,767		2.16	%		245,708			3,180		1.73	%

TOTAL INTEREST-BEARING LIABILITIES	$	1,859,847	$	6,517		1.39	%	$	2,025,392		$	7,143		1.41	%	$	2,238,036		$	9,402		1.67	%	$	2,005,110		$	21,426		1.43	%	$	2,296,599		$	29,996		1.75	%

NET INTEREST INCOME ⁽²⁾			$	25,177							$	25,496							$	26,304							$	76,803							$	80,018

NET INTEREST SPREAD ⁽²⁾						3.34	%							3.26	%							3.07	%							3.29	%							3.17	%

NET INTEREST MARGIN ⁽²⁾						3.75	%							3.65	%							3.49	%							3.69	%							3.58	%

⁽¹⁾

Commercial and industrial loans include owner-occupied commercial real etate loans

⁽²⁾

Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

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 Bank and Hanmi Financial’s capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total 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 Bank and Hanmi Financial. 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.

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

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

(Dollars in Thousands)


	September 30, 2011			June 30, 2011			December 31, 2010			September 30, 2010
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO

Total Assets	$	2,686,570		$	2,710,835		$	2,907,148		$	2,968,505
Less Other Intangible Assets		(1,664	)		(1,825	)		(2,233	)		(2,480	)

Tangible Assets	$	2,684,906		$	2,709,010		$	2,904,915		$	2,966,025

Total Stockholders’ Equity	$	203,203		$	198,365		$	173,256		$	172,632
Less Other Intangible Assets		(1,664	)		(1,825	)		(2,233	)		(2,480	)

Tangible Stockholders’ Equity	$	201,539		$	196,540		$	171,023		$	170,152

Total Stockholders’ Equity to Total Assets Ratio		7.56	%		7.32	%		5.96	%		5.82	%
Tangible Common Equity to Tangible Assets Ratio		7.51	%		7.26	%		5.89	%		5.74	%

Common Shares Outstanding		151,258,390			151,258,390			151,198,390			151,198,390
Tangible Common Equity Per Common Share	$	1.33		$	1.30		$	1.13		$	1.13

HANMI BANK

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

(Dollars in Thousands)


	September 30, 2011			June 30, 2011			December 31, 2010			September 30, 2010
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO

Total Assets	$	2,681,517		$	2,705,997		$	2,900,415		$	2,961,039
Less Other Intangible Assets		(94	)		(184	)		(450	)		(625	)

Tangible Assets	$	2,681,423		$	2,705,813		$	2,899,965		$	2,960,414

Total Stockholders’ Equity	$	285,250		$	279,712		$	249,637		$	248,310
Less Other Intangible Assets		(94	)		(184	)		(450	)		(625	)

Tangible Stockholders’ Equity	$	285,156		$	279,528		$	249,187		$	247,685

Total Stockholders’ Equity to Total Assets Ratio		10.64	%		10.34	%		8.61	%		8.39	%
Tangible Common Equity to Tangible Assets Ratio		10.63	%		10.33	%		8.59	%		8.37	%

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