2017 Third Quarter Highlights:      

• Third quarter net income of $14.9 million, or $0.46 per diluted share, up 3.2% from the prior quarter and up 13.7% year-over-year.
• Loans and leases receivable of $4.2 billion, up 12.0% in the third quarter on an annualized basis driven by new loan and lease production of $220.4 million; Loans and leases receivable up 18.1% year-over-year.
• Deposits of $4.3 billion, up 3.6% in the third quarter on an annualized basis; Total deposits are up 14.0% year-over-year.
• Net interest income increased to $44.9 million, up 4.0% from the prior quarter and 13.5% year-over-year.
• Efficiency ratio improved to 53.3% from 54.7% for the prior quarter and 58.7% a year ago period.
• Return on average assets was 1.18% and return on average equity was 10.73% compared with 1.19% and 10.65% for the prior quarter and 1.19% and 9.88% a year ago.

LOS ANGELES, Oct. 17, 2017 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ:HAFC) or (“Hanmi”), the parent company of Hanmi Bank (the “Bank”) today reported net income for the 2017 third quarter of $14.9 million or $0.46 per diluted share, compared with $14.5 million, or $0.45 per diluted share for the 2017 second quarter and $13.1 million, or $0.41 per diluted share for the 2016 third quarter.

For the first nine months of 2017, net income increased 2.6% to $43.2 million, or $1.33 per diluted share, compared with $42.1 million, or $1.31 per diluted share, for the first nine months of 2016.

Mr. C. G. Kum, President and Chief Executive Officer, said, “Hanmi’s third quarter performance was highlighted by continued growth in earning assets and top line revenue. Loans and leases receivable increased by 3% during the third quarter, which resulted in a 9% increase on a year-to-date basis. Higher production in loans and leases drove a 4% increase in net interest income for the quarter. This growth, along with careful expense management, helped generate a quarterly net income of $14.9 million, or $0.46 per share, reflecting an attractive return on average assets of 1.18% and return on average equity of 10.73%. I am also pleased to note that the Company surpassed $5 billion in total assets.”

Mr. Kum concluded, “During the fourth quarter, we will be capitalizing on this momentum by expanding into New York City with the opening of our first retail branch in midtown Manhattan. As we look to strategically expand the Bank, the favorable demographics of New York City, which has the second largest Asian population among U.S. metropolitan areas, provides significant opportunities to grow our franchise.” 

 

Quarterly Highlights
(in thousands, except per share data)
	For the Three Months Ended																				Amount Change
	Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Q3-17			Q3-17
	2017				2017				2017				2016				2016				vs. Q2-17			vs. Q3-16
Net income	$	14,923			$	14,457			$	13,783			$	14,416			$	13,121			$	466		$	1,802
Net income per diluted common share	$	0.46			$	0.45			$	0.43			$	0.45			$	0.41			$	0.01		$	0.05
Assets	$	5,111,396			$	4,973,346			$	4,811,821			$	4,701,346			$	4,402,180			$	138,050		$	709,216
Loans and leases receivable	$	4,195,355			$	4,073,062			$	3,943,951			$	3,844,769			$	3,552,659			$	122,293		$	642,696
Deposits	$	4,299,010			$	4,259,173			$	4,083,165			$	3,809,737			$	3,771,207			$	39,837		$	527,803
Return on average assets		1.18	%			1.19	%			1.18	%			1.26	%			1.19	%			-0.01			-0.01
Return on average stockholders' equity		10.73	%			10.65	%			10.46	%			10.84	%			9.88	%			0.08			0.85
Net interest margin (1)		3.79	%			3.81	%			3.89	%			3.96	%			3.86	%			-0.02			-0.07
Net interest margin excluding acquisition accounting (2)		3.76	%			3.76	%			3.84	%			3.86	%			3.75	%			0.00			0.01
Efficiency ratio (3)		53.33	%			54.74	%			54.95	%			51.77	%			58.72	%			-1.41			-5.39
Efficiency ratio excluding merger and integration costs		53.33	%			54.75	%			55.01	%			51.15	%			58.72	%			-1.42			-5.39
Tangible common equity to tangible assets (2)		10.72	%			10.83	%			10.98	%			11.05	%			12.04	%			-0.11			-1.32
Tangible common equity per common share (2)	$	16.86			$	16.59			$	16.26			$	16.03			$	16.42			$	0.27		$	0.44
(1)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
(2)   Refer to "Non-GAAP Financial Measures" for further details.
(3)   Noninterest expense divided by net interest income plus noninterest income

Results of Operations
Third quarter 2017 net interest income increased 4.0% to $44.9 million from $43.2 million in the second quarter primarily from the solid expansion of loans and leases receivables, partially offset by an increase in interest expense on deposits.  Interest and fees on loans and leases for the third quarter increased 4.8%, or $2.3 million, from the preceding quarter while interest expense on deposits increased 9.4%, or $0.6 million.

	As of or For the Three Months Ended (in thousands)															Percentage Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-17			Q3-17
Net Interest Income	2017			2017			2017			2016			2016			vs. Q2-17			vs. Q3-16
Interest and fees on loans and leases(1)	$	50,265		$	47,971		$	45,378		$	43,780		$	41,150		4.8	%		22.2	%
Interest on securities		3,188			2,949			2,520			2,550			2,701		8.1	%		18.0	%
Dividends on FRB and FHLB stock		286			283			374			927			419		1.1	%		-31.7	%
Interest on deposits in other banks		123			123			77			55			55		0.0	%		123.6	%
Total interest and dividend income	$	53,862		$	51,326		$	48,349		$	47,312		$	44,325		4.9	%		21.5	%
Interest on deposits		7,071			6,463			5,154			4,799			4,358		9.4	%		62.3	%
Interest on borrowings		198			49			468			207			179		304.1	%		10.6	%
Interest on subordinated debentures		1,667			1,636			373			241			206		1.9	%		709.2	%
Total interest expense		8,936			8,148			5,995			5,247			4,743		9.7	%		88.4	%
Net interest income	$	44,926		$	43,178		$	42,354		$	42,065		$	39,582		4.0	%		13.5	%
(1)  Includes loans held for sale.

Net interest margin (on a taxable equivalent basis) for the third quarter of 2017 was 3.79%, down 2 basis points from 3.81% for the second quarter of 2017.  However, net interest margin, excluding acquisition accounting, for the third quarter of 2017 was 3.76%, same as the second quarter of 2017.  Loan interest income, as a percentage of average interest earning assets, increased the net interest margin by one basis point while deposit interest expense decreased the net interest margin by three basis points.  The average rate paid on interest-bearing deposits for the third quarter increased to 0.93% from 0.88% for the preceding quarter while the average cost of deposits increased similarly to 0.66% from 0.62%.  The average yield on loans and leases receivable was 4.87%, unchanged from the prior quarter.

	For the Three Months Ended (in thousands)																				Percentage Change
	Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Q3-17			Q3-17
Average Earning Assets and Interest-bearing Liabilities	2017				2017				2017				2016				2016				vs. Q2-17			vs. Q3-16
Loans and lease receivables (1)	$	4,092,131			$	3,951,934			$	3,881,686			$	3,690,955			$	3,477,428			3.5	%		17.7	%
Securities		611,538				585,384				526,549				530,241				589,832			4.5	%		3.7	%
FRB and FHLB stock		16,385				16,385				16,385				16,385				19,207			0.0	%		-14.7	%
Interest-bearing deposits in other banks		38,981				47,402				38,600				40,548				43,678			-17.8	%		-10.8	%
Average interest-earning assets	$	4,759,035			$	4,601,105			$	4,463,220			$	4,278,129			$	4,130,145			3.4	%		15.2	%
Demand: interest-bearing	$	90,720			$	93,873			$	97,602			$	95,399			$	93,852			-3.4	%		-3.3	%
Money market and savings		1,526,951				1,532,733				1,406,903				1,305,565				1,141,747			-0.4	%		33.7	%
Time deposits		1,384,724				1,320,005				1,173,184				1,165,828				1,244,127			4.9	%		11.3	%
Average interest-bearing deposits		3,002,395				2,946,611				2,677,689				2,566,792				2,479,726			1.9	%		21.1	%
Borrowings		67,935				20,000				270,500				174,674				152,935			239.7	%		-55.6	%
Subordinated debentures		117,065				116,850				30,950				18,919				18,844			0.2	%		521.2	%
Average interest-bearing liabilities	$	3,187,395			$	3,083,461			$	2,979,139			$	2,760,385			$	2,651,505			3.4	%		20.2	%
(1)  Includes loans held for sale.
	For the Three Months Ended																				Amount Change
	Sep 30,				Jun 31,				Mar 31,				Dec 31,				Sep 30,				Q3-17			Q3-17
Average Yields and Rates	2017				2017				2016				2016				2016				vs. Q2-17			vs. Q3-16
Loans and lease receivables (1)		4.87	%			4.87	%			4.74	%			4.72	%			4.71	%		0.00			0.16
Securities (2)		2.41	%			2.35	%			2.30	%			2.31	%			2.18	%		0.06			0.23
FRB and FHLB stock		6.93	%			6.93	%			9.26	%			22.63	%			8.73	%		0.00			-1.80
Interest-bearing deposits in other banks		1.25	%			1.04	%			0.81	%			0.54	%			0.50	%		0.21			0.75
Interest-earning assets		4.53	%			4.52	%			4.44	%			4.45	%			4.32	%		0.01			0.21
Interest-bearing deposits		0.93	%			0.88	%			0.78	%			0.74	%			0.70	%		0.05			0.23
Borrowings		1.16	%			0.98	%			0.70	%			0.47	%			0.47	%		0.18			0.69
Subordinated debentures		5.68	%			5.59	%			4.82	%			5.07	%			4.35	%		0.09			1.33
Interest-bearing liabilities		1.11	%			1.06	%			0.82	%			0.76	%			0.71	%		0.05			0.40
Net interest margin (taxable equivalent basis)		3.79	%			3.81	%			3.89	%			3.96	%			3.86	%		-0.02			-0.07
Cost of deposits		0.66	%			0.62	%			0.54	%			0.50	%			0.47	%		0.04			0.19
(1)  Includes loans held for sale.
(2)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

For the third quarter of 2017, Hanmi recorded a provision for loan losses of $0.3 million compared with $0.4 million for the preceding quarter.

Third quarter noninterest income decreased 9.1% to $8.8 million from $9.7 million for the second quarter of 2017 primarily due to a $0.7 million decrease in gain on sales of securities and a $0.6 million decrease in other operating income offset by a $0.4 million increase in disposition gains on PCI loans. Included in other income is income from the early pay-off of leases which was $0.6 million lower in the third quarter. Gains on sales of SBA loans were $2.5 million for the third quarter 2017, down from $2.7 million from the second quarter of 2017 as the volume of SBA loans sold increased to $32.5 million from $32.4 million for the preceding quarter. Gains on the sales of securities were $0.3 million for the third quarter of 2017, down from $0.9 million in the second quarter. Disposition gains on PCI loans were $1.0 million for the third quarter of 2017, compared with $0.5 million for the prior quarter. PCI loans from the 2014 acquisition were $8.7 million at the end of the third quarter of 2017, down 0.9% from the prior quarter.

	For the Three Months Ended (in thousands)															Percentage Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-17			Q3-17
Noninterest Income	2017			2017			2017			2016			2016			vs. Q2-17			vs. Q3-16
Service charges on deposit accounts	$	2,678		$	2,461		$	2,528		$	2,599		$	2,883		8.8	%		-7.1	%
Trade finance and other service charges and fees		1,133			1,269			1,047			1,132			992		-10.7	%		14.2	%
Other operating income		1,213			1,826			1,726			991			2,348		-33.6	%		-48.3	%
Service charges, fees & other		5,024			5,556			5,301			4,722			6,223		-9.6	%		-19.3	%
Gain on sale of SBA loans		2,546			2,668			1,464			1,787			1,616		-4.6	%		57.5	%
Disposition gain on PCI loans		979			540			183			1,559			789		81.3	%		24.1	%
Net gain on sales of securities		267			938			269			-			46		-71.5	%		480.4	%
Total noninterest income	$	8,816		$	9,702		$	7,217		$	8,068		$	8,674		-9.1	%		1.6	%

Noninterest expense for the third quarter decreased 1.0% to $0.3 million to $28.7 million from $28.9 million for the second quarter primarily due to a $0.5 million decrease in OREO expense. As a result of the increase in revenue from the growth in earning assets and the decrease in noninterest expense, the efficiency ratio improved to 53.3% in the third quarter from 54.7% in the prior quarter.

To further enhance operational efficiencies, Hanmi consolidated two branch offices at the end of the third quarter in Beverly Hills and Torrance, California. 

Hanmi will also open a new branch office in New York City in the fourth quarter.

	For the Three Months Ended (in thousands)																			Percentage Change
	Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,			Q3-17			Q3-17
	2017				2017				2017				2016				2016			vs. Q2-17			vs. Q3-16
Noninterest Expense
Salaries and benefits	$	16,947			$	16,623			$	17,104			$	16,246			$	15,950		1.9	%		6.3	%
Occupancy and equipment		3,883				3,878				3,982				3,641				3,917		0.1	%		-0.9	%
Data processing		1,779				1,738				1,631				1,455				1,330		2.4	%		33.8	%
Professional fees		1,210				1,554				1,148				1,311				1,090		-22.1	%		11.0	%
Supplies and communication		755				745				635				683				821		1.3	%		-8.0	%
Advertising and promotion		1,147				1,015				802				1,140				1,153		13.0	%		-0.5	%
Other operating expenses		2,955				2,881				2,070				1,825				4,003		2.6	%		-26.2	%
subtotal		28,676				28,434				27,372				26,301				28,264		0.9	%		1.5	%
OREO expense (income)		(16	)			519				(101	)			(658	)			73		-103.1	%		-121.9	%
Merger and integration costs		-				(9	)			(31	)			312				-		-100.0	%		0.0	%
Total noninterest expense	$	28,660			$	28,944			$	27,240			$	25,955			$	28,337		-1.0	%		1.1	%

Hanmi recorded a provision for income taxes of $9.9 million for the third quarter of 2017, representing an effective tax rate of 39.9%, compared with $9.1 million, representing an effective tax rate of 38.5%, for the preceding quarter.

Financial Position
Total assets were $5.11 billion at September 30, 2017, a 2.8% increase from $4.97 billion at June 30, 2017. The increase in total assets was primarily due to an increase in loans and leases receivable.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.20 billion at September 30, 2017, up 3.0% from $4.07 billion at June 30, 2017. The increase in loans and leases from the prior quarter reflects Hanmi’s continued strong loan production. Loans held for sale, representing the guaranteed portion of SBA loans, were $6.5 million at September 30, 2017 compared with $10.9 million at the end of the 2017 second quarter.

Loans and leases receivable, before the allowance for loan and lease losses, increased 18.1% from $3.55 billion for the third quarter last year, primarily due to strong loan production over the last twelve months, as well as last year’s fourth quarter acquisition and commencement of the Commercial Equipment Leasing division.

	As of (in thousands)															Percentage Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-17			Q3-17
	2017			2017			2017			2016			2016			vs. Q2-17			vs. Q3-16
Loan and Lease Portfolio
Commercial real estate loans	$	3,108,931		$	3,068,069		$	2,991,123		$	2,939,608		$	2,880,012		1.3	%		7.9	%
Residential real estate loans		430,627			384,044			359,152			338,767			330,675		12.1	%		30.2	%
Commercial and industrial loans		364,456			346,150			316,284			300,220			319,656		5.3	%		14.0	%
Lease receivable		272,271			257,525			259,591			243,294			-		5.7	%		NM
Consumer loans		19,070			17,274			17,801			22,880			22,316		10.4	%		-14.5	%
Loans and leases receivable		4,195,355			4,073,062			3,943,951			3,844,769			3,552,659		3.0	%		18.1	%
Loans held for sale		6,469			10,949			8,849			9,316			6,425		-40.9	%		0.7	%
Total loans	$	4,201,824		$	4,084,011		$	3,952,800		$	3,854,085		$	3,559,084		2.9	%		18.1	%
Acquired Loans(1)
PCI loans, net of discounts	$	8,704		$	8,784		$	8,960		$	9,863		$	15,540		-0.9	%		-44.0	%
Non-PCI loans, net of discounts		91,013			96,600			101,062			104,733			108,434		-5.8	%		-16.1	%
Total acquired loans	$	99,717		$	105,384		$	110,022		$	114,596		$	123,974		-5.4	%		-19.6	%
(1)  Includes UCB acquired only.

New loan production for the 2017 third quarter was $220.4 million while payoffs and amortization was $145.4 million compared with $279.0 million and $131.4 million for the second quarter of 2017. Third quarter 2017 new loan production was comprised of $91.2 million of commercial real estate loans, $43.8 million of commercial and industrial loans, $43.0 million of SBA loans, $39.5 million of commercial leases and $2.8 million of consumer loans. Loan purchases for the 2017 third quarter were $88.2 million, compared with $39.4 million in the second quarter of 2017. For the third quarter of 2017, commercial real estate loans as a percentage of total loans and leases decreased to 74.1% compared with 81.1% for the same period last year.

Deposits increased to $4.30 billion at the end of the 2017 third quarter from $4.26 billion at the end of the preceding quarter. Demand non-interest bearing deposits led this growth increasing 2.6%. The loans to deposits ratio at September 30, 2017 increased to 97.6% from 95.6% at June 30, 2017.

Deposits increased 14.0% from $3.77 billion in the third quarter last year, primarily due to the strength of Hanmi’s retail branch network as money market and savings deposits and time deposits increased 23.5% and 14.8%, respectively from a year ago.

	As of (in thousands)															Percentage Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-17			Q3-17
	2017			2017			2017			2016			2016			vs. Q2-17			vs. Q3-16
Deposit Portfolio
Demand: noninterest-bearing	$	1,293,538		$	1,260,929		$	1,241,272		$	1,203,240		$	1,231,967		2.6	%		5.0	%
Demand: interest-bearing		90,734			93,390			99,433			96,856			94,272		-2.8	%		-3.8	%
Money market and savings		1,534,457			1,528,127			1,534,578			1,329,324			1,242,502		0.4	%		23.5	%
Time deposits of $250,000 or less		949,826			916,197			731,445			734,383			819,471		3.7	%		15.9	%
Time deposits of more than $250,000		430,455			460,530			476,437			445,934			382,995		-6.5	%		12.4	%
Total deposits	$	4,299,010		$	4,259,173		$	4,083,165		$	3,809,737		$	3,771,207		0.9	%		14.0	%

At September 30, 2017, stockholders’ equity was $559.2 million, compared with $550.1 million at June 30, 2017. Tangible common stockholders’ equity was $546.6 million, or 10.72% of tangible assets, compared with $537.4 million, or 10.83% of tangible assets at June 30, 2017. Tangible book value per share was $16.86, compared to $16.59 in the second quarter.

Hanmi continues to be well capitalized, with a preliminary Tier 1 risk-based capital ratio of 12.46% and a Total risk-based capital ratio of 15.46% at September 30, 2017, versus 12.58% and 15.69%, respectively, at June 30, 2017.

	As of															Amount Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-17		Q3-17
	2017			2017			2017			2016			2016			vs. Q2-17		vs. Q3-16
Regulatory Capital ratios (1)
Hanmi Financial
Total risk-based capital	15.46	%		15.69	%		16.16	%		13.86	%		14.99	%		-0.23		0.47
Tier 1 risk-based capital	12.46	%		12.58	%		12.93	%		13.02	%		13.89	%		-0.12		-1.43
Common equity tier 1 capital	12.11	%		12.22	%		12.56	%		12.73	%		13.73	%		-0.11		-1.62
Tier 1 leverage capital ratio	10.92	%		11.08	%		11.21	%		11.53	%		11.68	%		-0.16		-0.76
Hanmi Bank
Total risk-based capital	15.30	%		15.44	%		15.91	%		13.64	%		14.61	%		-0.14		0.69
Tier 1 risk-based capital	14.54	%		14.62	%		15.07	%		12.80	%		13.50	%		-0.08		1.04
Common equity tier 1 capital	14.54	%		14.62	%		15.07	%		12.80	%		13.50	%		-0.08		1.04
Tier 1 leverage capital ratio	12.73	%		12.89	%		13.08	%		11.33	%		11.36	%		-0.16		1.37
(1)  Preliminary ratios for September 30, 2017

Hanmi declared a cash dividend of $0.21 per common share on its common stock in the 2017 third quarter, up 11% from the prior quarter. The dividend was paid on August 16, 2017, to stockholders of record as of the close of business on July 28, 2017.

Asset Quality
Nonperforming loans, excluding PCI loans, were $14.6 million at the end of the third quarter of 2017, or 0.35% of loans, compared with $16.5 million at the end of the second quarter of 2017, or 0.41% of loans. Loans past due 30 to 89 days and still accruing declined significantly to 0.12% of loans at the end of the third quarter of 2017, compared with 0.23% of loans at the end of the second quarter.

OREO was $1.9 million at the end of the third quarter of 2017, down from $4.3 million at the end of the prior quarter reflecting the sale of a $2.4 million property. Nonperforming assets were $16.5 million at the end of the third quarter of 2017, or 0.32% of assets, compared with 0.42% of assets at the end of the prior quarter.

Gross charge-offs for the third quarter of 2017 were $2.4 million compared with $665,000 for the preceding quarter. Gross-charge-offs included a $1.3 million charge-off of a commercial and industrial loan. Recoveries of previously charged-off loans for the third quarter of 2017 were $871,000 compared with $849,000 for the preceding quarter. As a result, there were net charge-offs of $1.5 million for the third quarter of 2017, compared to net recoveries of $184,000 for the preceding quarter.

The allowance for loan and lease losses was $32.5 million as of September 30, 2017, generating an allowance of loan losses to loans receivable ratio of 0.77% compared with 0.83% as of June 30, 2017.

	As of or for the Three Months Ended (in thousands)																				Amount Change
	Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Q3-17				Q3-17
	2017				2017				2017				2016				2016				vs. Q2-17				vs. Q3-16
Asset Quality
Nonperforming assets (1):
Nonaccrual loans	$	14,558			$	16,464			$	12,774			$	11,406			$	10,948			$	(1,906	)		$	3,610
Loans 90 days or more past due and still accruing		-				-				-				-				-				-				-
Nonperforming loans		14,558				16,464				12,774				11,406				10,948				(1,906	)			3,610
OREO, net		1,946				4,321				4,636				7,484				10,971				(2,375	)			(9,025	)
Nonperforming assets	$	16,504			$	20,785			$	17,410			$	18,890			$	21,919			$	(4,281	)		$	(5,415	)
Delinquent loans:
Loans, 30 to 89 days past due and still accruing	$	4,993			$	9,431			$	6,273			$	5,718			$	1,066			$	(4,438	)		$	3,927
Delinquent loans to loans		0.12	%			0.23	%			0.16	%			0.15	%			0.03	%			(0.11	)			0.09
Allowance for loan and lease losses:
Balance at beginning of period	$	33,758			$	33,152			$	32,429			$	38,972			$	39,707
Loan and lease loss provision (income)		269				422				(80	)			151				(1,450	)
Net loan charge-offs (recoveries)		1,535				(184	)			(803	)			6,694				(715	)
Balance at end of period	$	32,492			$	33,758			$	33,152			$	32,429			$	38,972
Asset quality ratios:
Nonperforming loans to loans (1)		0.35	%			0.41	%			0.32	%			0.30	%			0.31	%
Nonperforming assets to assets (1)		0.32	%			0.42	%			0.36	%			0.40	%			0.50	%
Net loan charge-offs (recoveries) to average loans (3)		0.15	%			-0.02	%			-0.08	%			0.73	%			-0.08	%
Allowance for loan losses to loans		0.77	%			0.83	%			0.84	%			0.84	%			1.10	%
Allowance for loan losses to nonperforming loans (1) (2)		217.74	%			200.67	%			252.54	%			275.80	%			305.43	%
Allowance for off-balance sheet items:
Balance at beginning of period	$	1,135			$	1,184			$	1,184			$	1,491			$	1,475
Provision (income) for off-balance sheet items		(220	)			(49	)			-				(307	)			16
Balance at end of period	$	915			$	1,135			$	1,184			$	1,184			$	1,491
(1)  Excludes PCI loans
(2)  Excludes allowance for loan losses allocated to PCI loans
(3)  Annualized

Conference Call
Management will host a conference call today, October 17, 2017 at 2:00 p.m. PT (5:00 p.m. ET) to discuss these results. This call will also be broadcast live via the internet. Investment professionals and all current and prospective stockholders are invited to access the live call by dialing 1-877-407-9039 before 2:00 p.m. PT, 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.

About Hanmi Financial Corporation
Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 39 full-service branches and 6 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com.

Forward-Looking Statements
This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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, strategic alternatives for a possible business combination, merger or sale transaction, 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: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of 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 of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests; ability to identify a suitable strategic partner or to consummate a strategic transaction; adequacy of our allowance for loan and lease losses; credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and lease losses; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to control expenses; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

Investor Contacts:
Romolo (Ron) Santarosa
Senior Executive Vice President & Chief Financial Officer
213-427-5636

Richard Pimentel
Senior Vice President & Corporate Finance Officer
213-427-3191

Lasse Glassen
Investor Relations
Addo Investor Relations
310-829-5400

Hanmi Financial Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(In thousands)

	Sep 30,				Jun 30,				Percentage			Sep 30,				Percentage
	2017				2017				Change			2016				Change
Assets
Cash and due from banks	$	138,139			$	138,507			-0.3	%		$	130,197			6.1	%
Securities available for sale, at fair value		598,440				571,846			4.7	%			548,961			9.0	%
Loans held for sale, at the lower of cost or fair value		6,469				10,949			-40.9	%			6,425			0.7	%
Loans and leases receivable, net of allowance for loan and lease losses		4,162,863				4,039,304			3.1	%			3,513,687			18.5	%
Accrued interest receivable		12,098				11,167			8.3	%			10,160			19.1	%
Customers' liability on acceptances		647				1,481			-56.3	%			1,041			-37.8	%
Servicing assets		10,428				10,480			-0.5	%			10,833			-3.7	%
Premises and equipment, net		26,648				26,869			-0.8	%			27,682			-3.7	%
Goodwill and other intangible assets, net		12,628				12,712			-0.7	%			1,456			767.3	%
Federal Home Loan Bank ("FHLB") stock, at cost		16,385				16,385			0.0	%			16,385			0.0	%
Other real estate owned ("OREO"), net		1,946				4,321			-55.0	%			10,971			-82.3	%
Income tax asset		46,210				50,286			-8.1	%			50,145			-7.8	%
Bank-owned life insurance		50,268				49,982			0.6	%			49,149			2.3	%
Prepaid expenses and other assets		28,227				29,057			-2.9	%			25,088			12.5	%
Total assets	$	5,111,396			$	4,973,346			2.8	%		$	4,402,180			16.1	%
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	1,293,538			$	1,260,929			2.6	%		$	1,231,967			5.0	%
Interest-bearing		3,005,472				2,998,244			0.2	%			2,539,240			18.4	%
Total deposits		4,299,010				4,259,173			0.9	%			3,771,207			14.0	%
Accrued interest payable		4,071				3,432			18.6	%			2,444			66.6	%
Bank's liability on acceptances		657				1,481			-55.6	%			1,041			-36.9	%
FHLB advances		110,000				20,000			450.0	%			55,000			100.0	%
Subordinated debentures		117,140				117,011			0.1	%			18,888			520.2	%
Accrued expenses and other liabilities		21,271				22,109			-3.8	%			22,402			-5.0	%
Total liabilities		4,552,149				4,423,206			2.9	%			3,870,982			17.6	%
Stockholders' equity:
Common stock		33				33			0.0	%			33			0.0	%
Additional paid-in capital		564,787				563,948			0.1	%			560,906			0.7	%
Accumulated other comprehensive income		290				137			111.7	%			7,555			-96.2	%
Retained earnings		65,858				57,717			14.1	%			33,413			97.1	%
Less treasury stock		(71,721	)			(71,695	)		0.0	%			(70,709	)		1.4	%
Total stockholders' equity		559,247				550,140			1.7	%			531,198			5.3	%
Total liabilities and stockholders' equity	$	5,111,396			$	4,973,346			2.8	%		$	4,402,180			16.1	%

Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)

	Three Months Ended
	Sep 30,				Jun 30,				Percentage			Sep 30,				Percentage
	2017				2017				Change			2016				Change
Interest and dividend income:
Interest and fees on loans and leases	$	50,265			$	47,971			4.8	%		$	41,150			22.2	%
Interest on securities		3,188				2,949			8.1	%			2,701			18.0	%
Dividends on FRB and FHLB stock		286				283			1.1	%			419			-31.7	%
Interest on deposits in other banks		123				123			0.0	%			55			123.6	%
Total interest and dividend income		53,862				51,326			4.9	%			44,325			21.5	%
Interest expense:
Interest on deposits		7,071				6,463			9.4	%			4,358			62.3	%
Interest on FHLB advances		198				49			304.1	%			179			10.6	%
Interest on subordinated debentures		1,667				1,636			1.9	%			206			709.2	%
Total interest expense		8,936				8,148			9.7	%			4,743			88.4	%
Net interest income before provision for loan and lease losses		44,926				43,178			4.0	%			39,582			13.5	%
Loan and lease loss provision (income)		269				422			-36.3	%			(1,450	)		-118.6	%
Net interest income after provision for loan and lease losses		44,657				42,756			4.4	%			41,032			8.8	%
Noninterest income:
Service charges on deposit accounts		2,678				2,461			8.8	%			2,883			-7.1	%
Trade finance and other service charges and fees		1,133				1,269			-10.7	%			992			14.2	%
Gain on sale of Small Business Administration ("SBA") loans		2,546				2,668			-4.6	%			1,616			57.5	%
Disposition gains on Purchased Credit Impaired ("PCI") loans		979				540			81.3	%			789			24.1	%
Net gain on sales of securities		267				938			-71.5	%			46			480.4	%
Other operating income		1,213				1,826			-33.6	%			2,348			-48.3	%
Total noninterest income		8,816				9,702			-9.1	%			8,674			1.6	%
Noninterest expense:
Salaries and employee benefits		16,947				16,623			1.9	%			15,950			6.3	%
Occupancy and equipment		3,883				3,878			0.1	%			3,917			-0.9	%
Data processing		1,779				1,738			2.4	%			1,330			33.8	%
Professional fees		1,210				1,554			-22.1	%			1,090			11.0	%
Supplies and communications		755				745			1.3	%			821			-8.0	%
Advertising and promotion		1,147				1,015			13.0	%			1,153			-0.5	%
OREO expense (income)		(16	)			519			-103.1	%			73			-121.9	%
Merger and integration costs		-				(9	)		-100.0	%			-			-
Other operating expenses		2,955				2,881			2.6	%			4,003			-26.2	%
Total noninterest expense		28,660				28,944			-1.0	%			28,337			1.1	%
Income before provision for income taxes		24,813				23,514			5.5	%			21,369			16.1	%
Income tax expense		9,890				9,057			9.2	%			8,248			19.9	%	`
Net income	$	14,923			$	14,457			3.2	%		$	13,121			13.7	%
Basic earnings per share:	$	0.46			$	0.45						$	0.41
Diluted earnings per share:	$	0.46			$	0.45						$	0.41
Weighted-average shares outstanding:
Basic		32,095,286				32,078,038							31,912,470
Diluted		32,260,282				32,243,034							32,088,233
Common shares outstanding		32,413,082				32,393,856							32,252,774

Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)

	Nine Months Ended
	Sep 30,				Sep 30,				Percentage
	2017				2016				Change
Interest and dividend income:
Interest and fees on loans and leases	$	143,614			$	120,862			18.8	%
Interest on securities		8,657				8,604			0.6	%
Dividends on FRB and FHLB stock		943				1,540			-38.8	%
Interest on deposits in other banks		323				152			112.5	%
Total interest and dividend income		153,537				131,158			17.1	%
Interest expense:
Interest on deposits		18,687				11,769			58.8	%
Interest on FHLB advances		714				673			6.1	%
Interest on subordinated debentures		3,677				584			529.6	%
Total interest expense		23,078				13,026			77.2	%
Net interest income before provision for loan and leas losses		130,459				118,132			10.4	%
Loan and lease loss provision (income)		611				(4,490	)		-113.6	%
Net interest income after provision for loan and lease losses		129,848				122,622			5.9	%
Noninterest income:
Service charges on deposit accounts		7,667				8,782			-12.7	%
Trade finance and other service charges and fees		3,449				3,099			11.3	%
Gain on sale of Small Business Administration ("SBA") loans		6,678				4,247			57.2	%
Net gain on sales of securities		1,473				46			3102.2	%
Disposition gains on Purchased Credit Impaired ("PCI") loans		1,702				3,411			-50.1	%
Other operating income		4,764				5,423			-12.2	%
Total noninterest income		25,733				25,008			2.9	%
Noninterest expense:
Salaries and employee benefits		50,674				47,710			6.2	%
Occupancy and equipment		11,743				11,351			3.5	%
Data processing		5,148				4,219			22.0	%
Professional fees		3,912				4,063			-3.7	%
Supplies and communications		2,135				2,266			-5.8	%
Advertising and promotion		2,964				2,769			7.0	%
OREO expense (income)		402				721			-44.2	%
Merger and integration costs		(40	)			-			-
Other operating expenses		7,905				9,170			-13.8	%
Total noninterest expense		84,843				82,269			3.1	%
Income before provision for income taxes		70,738				65,361			8.2	%
Income tax expense		27,576				23,288			18.4	%
Net income	$	43,162			$	42,073			2.6	%
Basic earnings per share:	$	1.34			$	1.31
Diluted earnings per share	$	1.33			$	1.31
Weighted-average shares outstanding:
Basic		32,058,705				31,880,466
Diluted		32,235,263				32,031,295
Common shares outstanding		32,413,082				32,252,774

Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)

	Three Months Ended
	September 30, 2017								June 30, 2017								September 30, 2016
				Interest		Average						Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
Assets
Interest-earning assets:
Loans and leases receivable (1)	$	4,092,131		$	50,265	4.87	%		$	3,951,934		$	47,971	4.87	%		$	3,477,428		$	41,150	4.71	%
Securities (2)		611,538			3,683	2.41	%			585,384			3,444	2.35	%			589,832			3,210	2.18	%
FRB and FHLB stock		16,385			286	6.93	%			16,385			283	6.93	%			19,207			419	8.73	%
Interest-bearing deposits in other banks		38,981			123	1.25	%			47,402			123	1.04	%			43,678			55	0.50	%
Total interest-earning assets		4,759,035			54,357	4.53	%			4,601,105			51,821	4.52	%			4,130,145			44,834	4.32	%
Noninterest-earning assets:
Cash and due from banks		114,108								116,750								116,779
Allowance for loan losses		(34,252	)							(33,540	)							(40,214	)
Other assets		188,813								191,158								190,993
Total assets	$	5,027,704							$	4,875,473							$	4,397,703
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	90,720		$	18	0.08	%		$	93,873		$	18	0.08	%		$	93,852		$	19	0.08	%
Money market and savings		1,526,951			3,311	0.86	%			1,532,733			3,224	0.84	%			1,141,747			1,834	0.64	%
Time deposits		1,384,724			3,742	1.07	%			1,320,005			3,221	0.98	%			1,244,127			2,505	0.80	%
Total interest-bearing deposits		3,002,395			7,071	0.93	%			2,946,611			6,463	0.88	%			2,479,726			4,358	0.70	%
FHLB advances		67,935			198	1.16	%			20,000			49	0.98	%			152,935			179	0.47	%
Subordinated debentures		117,065			1,667	5.68	%			116,850			1,636	5.59	%			18,844			206	4.35	%
Total interest-bearing liabilities		3,187,395			8,936	1.11	%			3,083,461			8,148	1.06	%			2,651,505			4,743	0.71	%
Noninterest-bearing liabilities:
Demand deposits: noninterest-bearing		1,257,954								1,219,876								1,189,693
Other liabilities		30,592								27,853								27,924
Stockholders' equity		551,763								544,283								528,581
Total liabilities and stockholders' equity	$	5,027,704							$	4,875,473							$	4,397,703
Net interest income (2)				$	45,421							$	43,673							$	40,091
Cost of deposits						0.66	%							0.62	%							0.47	%
Net interest spread (2)						3.42	%							3.46	%							3.61	%
Net interest margin (2)						3.79	%							3.81	%							3.86	%
(1)   Includes loans held for sale
(2)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

 

Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)

	Nine Months Ended
	September 30, 2017								September 30, 2016
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets
Interest-earning assets:
Loans and leases receivable (1)	$	3,976,021		$	143,614	4.83	%		$	3,333,420		$	120,862	4.84	%
Securities (2)		574,801			10,153	2.36	%			643,125			10,136	2.10	%
FRB and FHLB stock		16,385			943	7.69	%			26,809			1,540	7.67	%
Interest-bearing deposits in other banks		41,663			323	1.04	%			42,127			152	0.48	%
Total interest-earning assets		4,608,870			155,033	4.50	%			4,045,481			132,690	4.38	%
Noninterest-earning assets:
Cash and due from banks		116,206								115,235
Allowance for loan losses		(33,550	)							(41,401	)
Other assets		190,001								195,747
Total assets	$	4,881,527							$	4,315,062
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	94,040		$	56	0.08	%		$	95,264		$	56	0.08	%
Money market and savings		1,489,302			9,200	0.83	%			996,578			4,130	0.55	%
Time deposits		1,293,412			9,431	0.97	%			1,286,120			7,583	0.79	%
Total interest-bearing deposits		2,876,754			18,687	0.87	%			2,377,962			11,769	0.66	%
FHLB advances		118,736			714	0.80	%			204,106			673	0.44	%
Subordinated debentures		88,604			3,677	5.52	%			18,783			584	4.09	%
Total interest-bearing liabilities		3,084,094			23,078	1.00	%			2,600,851			13,026	0.67	%
Noninterest-bearing liabilities:
Demand deposits: noninterest-bearing		1,224,886								1,166,427
Other liabilities		29,044								32,381
Stockholders' equity		543,503								515,403
Total liabilities and stockholders' equity	$	4,881,527							$	4,315,062
Net interest income (2)				$	131,955							$	119,664
Cost of deposits						0.61	%							0.44	%
Net interest spread (2)						3.50	%							3.71	%
Net interest margin (2)						3.83	%							3.95	%
(1)   Includes loans held for sale
(2)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

Non-GAAP Financial Measures

Acquisition Accounting

Core loan yield, core deposit costs, net interest income and net interest margin excluding acquisition accounting are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s results of operations. The calculation of these measures is illustrated below. 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 results of Hanmi. 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:

	For the Three Months Ended
	September 30,				June 30,			March 31,				December 31,			September 30,
	2017				2017			2017				2016			2016
Core loan yield		4.84	%		4.82	%			4.68	%		4.63	%			4.63	%
Accretion of discount on purchased loans		0.03	%		0.05	%			0.06	%		0.09	%			0.08	%
As reported		4.87	%		4.87	%			4.74	%		4.72	%			4.71	%
Core deposit cost		0.67	%		0.63	%			0.55	%		0.54	%			0.54	%
Accretion of time deposits premium		0.01	%		0.01	%			0.01	%		0.04	%			0.07	%
As reported		0.66	%		0.62	%			0.54	%		0.50	%			0.47	%
	For the Three Months Ended
	September 30, 2017							June 30, 2017							March 31, 2017							December 31, 2016							September 30, 2016
	Amount				Rate			Amount				Rate			Amount				Rate			Amount				Rate			Amount				Rate
Net interest income and net interest margin excluding acquisition accounting (1)	$	45,049			3.76	%		$	43,129			3.76	%		$	42,230			3.84	%		$	41,489			3.86	%		$	38,874			3.75	%
Accretion of discount on Non-PCI loans		303			0.03	%			457			0.04	%			527			0.05	%			781			0.07	%			648			0.06	%
Accretion of discount on PCI loans		38			0.00	%			52			0.00	%			54			0.00	%			78			0.01	%			26			0.00	%
Accretion of time deposits premium		116			0.01	%			116			0.01	%			126			0.01	%			314			0.03	%			610			0.06	%
Amortization of subordinated debentures discount		(85	)		-0.01	%			(81	)		-0.01	%			(77	)		-0.01	%			(90	)		-0.01	%			(67	)		-0.01	%
Net impact		372			0.03	%			544			0.05	%			630			0.05	%			1,083			0.10	%			1,217			0.11	%
As reported, on a fully taxable equivalent basis (1)	$	45,421			3.79	%		$	43,673			3.81	%		$	42,860			3.89	%		$	42,572			3.96	%		$	40,091			3.86	%
(1)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate:  rates may not sum due to rounding.

Tangible Common Equity to Tangible Assets Ratio

Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Hanmi. This disclosure should not be viewed as a 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:

Tangible Common Equity to Tangible Assets Ratio (Unaudited)
(In thousands, except share, per share data and ratios)

	September 30,				June 30,				March 31,				December 31,				September 30,
Hanmi Financial Corporation	2017				2017				2017				2016				2016
Assets	$	5,111,396			$	4,973,346			$	4,811,821			$	4,701,346			$	4,402,180
Less goodwill		(11,031	)			(11,031	)			(11,031	)			(11,031	)			-
Less other intangible assets,net		(1,597	)			(1,681	)			(1,766	)			(1,858	)			(1,456	)
Tangible assets	$	5,098,768			$	4,960,634			$	4,799,024			$	4,688,457			$	4,400,724
Common Stockholders' equity	$	559,247			$	550,140			$	539,542			$	531,025			$	531,198
Less goodwill		(11,031	)			(11,031	)			(11,031	)			(11,031	)			-
Less other intangible assets		(1,597	)			(1,681	)			(1,766	)			(1,858	)			(1,456	)
Tangible Common stockholders' equity	$	546,619			$	537,428			$	526,745			$	518,136			$	529,742
Common Stockholders' equity to assets		10.94	%			11.06	%			11.21	%			11.30	%			12.07	%
Tangible common equity to tangible assets		10.72	%			10.83	%			10.98	%			11.05	%			12.04	%
Common shares outstanding		32,413,082				32,393,856				32,392,580				32,330,747				32,252,774
Tangible common equity per common share	$	16.86			$	16.59			$	16.26			$	16.03			$	16.42