Full-Year Net Income of $49.8 Million, Up 24.8% Year-Over-Year
Loan Portfolio Increases to $2.74 Billion, Up 25.7% Year-Over-Year
Integration of Central Bancorp, Inc. Remains On Track
LOS ANGELES – February 5, 2015 – Hanmi Financial Corporation (NASDAQ: HAFC, or “Hanmi”), the holding company for Hanmi Bank (the “Bank”), today reported solid growth in 2014. For the full year 2014, net income increased 24.8% to $49.8 million, or $1.56 per diluted share, compared to $39.9 million, or $1.26 per diluted share a year ago. In 2014, pretax income from continuing operations grew 16.1% to $72.6 million from $62.5 million in 2013.
Hanmi’s acquisition of Central Bancorp, Inc. (“CBI”), the parent company of United Central Bank, was completed on August 31, 2014. The combined companies began operating as Hanmi Financial Corporation and Hanmi Bank, respectively, with banking operations conducted under the Hanmi Bank brand effective as of September 1, 2014. The 2014 financial results reflect eight months of stand-alone operations of Hanmi and four months of combined operations. Hanmi’s accounting for this business combination is incomplete and has been recorded based on provisional amounts. The accounting is updated during the measurement period to reflect new information obtained about facts and circumstances that existed at the acquisition date. Adjustments to the provisional amounts during the measurement period are recognized as retrospective adjustments as of the date of the acquisition. During the fourth quarter Hanmi identified a retrospective adjustment of $8.0 million to the bargain purchase gain that was provisionally reported for the third quarter of 2014. This retrospective adjustment revises the reported third quarter net income to $21.2 million from $13.3 million as previously reported.
Fourth quarter 2014 net income totaled $6.5 million, or $0.20 per diluted share, compared $21.2 million, or $0.66 per diluted share, in the third quarter of 2014 and $9.9 million, or $0.31 per diluted share, in the fourth quarter a year ago.
Full year financial results reflect the impact of the following significant items recorded in conjunction with the CBI acquisition:
• $14.6 million provisional bargain purchase gain recorded in 2014
• $6.6 million in merger and integration related expenses in 2014
• $7.6 million in professional fees for the year, which included significant costs to strengthen our infrastructure and to meet heightened control standards
Mr. C. G. Kum, President and Chief Executive Officer, said, “2014 was a transformative year for Hanmi highlighted by the acquisition of CBI, strong loan growth and solid credit quality to help continue the growth trajectory across our enterprise. Full year profitability increased sharply with net income of $49.8 million, up 24.8% from 2013. Strong organic loan production from the legacy Hanmi team helped expand our loan portfolio by 25.7% to $2.74 billion at year end. Credit quality improved throughout the year with classified loans, excluding PCI loans, declining 42.0% during the year to $47.7 million, or 1.71% of gross loans at year end. Importantly, our activities to integrate the acquisition of CBI into Hanmi are proceeding as planned.”