 2020 Second Quarter Highlights: Net income of 9.2 million, or 0.30 per diluted share, up from net income of 2.4 million, or 0.08 per diluted share, for the prior quarter and up from net income of 2.7 million, or 0.09 per diluted share, from the same quarter a year ago. Loans receivable of 4.83 billion, up 6.2 from the end of the prior quarter reflecting 308.8 million of loans originated through the Paycheck Protection Program PPP and 225.3 million of new loan and lease production; Loans receivable up 5.9 year-over-year. Deposits of 5.21 billion, up 627.7 million or 13.7 from the end of the first quarter, led principally from increases in noninterest-bearing deposits; Deposits up 9.4 from a year ago. Second quarter cost of interest-bearing deposits declined 45 basis points from the prior quarter. Credit loss expense, under the new accounting standard, was 24.6 million, compared with 15.7 million for the prior quarter, resulting in an allowance for credit losses of 1.79 of loans at June 30, 2020 1.91 excluding PPP loans. Nonperforming assets were 0.94 of total assets at quarter-end compared with 0.93 for the prior quarter. Net interest income was 44.4 million for the second quarter compared with 44.0 million for the previous quarter; net interest margin for the second quarter was 3.15 3.21 excluding PPP loans compared with 3.36 for the prior quarter. Noninterest income was 20.9 million, up from 6.2 million for the previous quarter, and included gains on sales of securities of 15.7 million. Noninterest expense was 27.1 million, down 12.7 from the previous quarter chiefly due to deferred PPP loan origination costs; Efficiency ratio for the second quarter was 41.51 60.82 excluding securities gains and deferred PPP loan origination costs compared with 61.89 for the prior quarter. Hanmi ended the second quarter with a tangible common equity to tangible assets ratio of 8.63 9.07 excluding PPP loans and remained well-capitalized with a Total Risk-Based capital ratio of 14.04 and a Common Equity Tier 1 capital ratio of 10.47 as of June 30, 2020.For more information about our response to the COVID-19 pandemic, including detail regarding our participation in the PPP, our loan deferrals, including a breakdown by loan type and industry, as well as detail concerning our loan exposure to higher impacted industries, please see the Q2 2020 Investor Update and Supplemental Financial Information, a copy of which is available on our website at and via a current report on Form 8-K on the website of the Securities and Exchange Commission at ANGELES, July 28, 2020 GLOBE NEWSWIRE -- Hanmi Financial Corporation NASDAQ: HAFC, or Hanmi, the parent company of Hanmi Bank the Bank, today reported net income for the 2020 second quarter of 9.2 million, or 0.30 per diluted share, compared with 2.4 million, or 0.08 per diluted share for the 2020 first quarter and 2.7 million, or 0.09 per diluted share for the 2019 second quarter.Bonnie Lee, President and Chief Executive Officer, said, In an extremely challenging and uncertain operating environment resulting from the ongoing COVID-19 pandemic, Hanmis performance in the second quarter was highlighted by solid loan growth and strong deposit gathering activities. During the quarter, loan production of 534.1 million increased by 281.7 million year-over-year, which helped drive loans receivable up by 6.2 compared with the prior quarter and 5.9 from a year ago. Second quarter loan production included 225.3 million in new loans as well as more than 3,000 loans totaling 308.8 million for the SBAs Paycheck Protection Program. I am also very pleased with our deposit franchise as noninterest-bearing demand balances grew 36.5 in the quarter, resulting in total deposits increasing 13.7 for the quarter and 9.4 year-over-year.Ms. Lee further noted, We also continue to diligently support our customers and our communities in this time of need. In addition to our efforts under the Paycheck Protection Program, we are working with borrowers through modifications, deferrals and other services to help businesses impacted by the pandemic. We remain extremely focused on the management of our loan and lease portfolio by providing individualized support to our customers during this pandemic. Our objective is simpleprovide additional liquidity and payment flexibility for our customers as a means to avoid future charge-offs and ultimately help our customers through the crisis.Ms. Lee concluded, Perhaps most importantly, Hanmis capital far exceeded the minimum thresholds to be deemed well-capitalized, and the Bank has ample liquidity. Our regulatory capital ratios are strong, and as we enter the second half of 2020, I believe Hanmi is well-positioned to address these challenging times.Quarterly Highlights Dollars in thousands, except per share data As of or for the Three Months Ended Amount Change June 30, March 31, December 31, September 30, June 30, Q2-20 Q2-20 2020 2020 2019 2019 2019 vs. Q1-20 vs. Q2-19 Net income9,175 2,350 3,084 12,376 2,656 6,825 6,519 Net income per diluted common share0.30 0.08 0.10 0.40 0.09 0.22 0.21 Assets6,218,163 5,617,690 5,538,184 5,527,982 5,511,752 600,473 706,411 Loans receivable4,825,642 4,543,636 4,610,148 4,569,837 4,555,802 282,006 269,840 Deposits5,209,781 4,582,068 4,698,962 4,690,141 4,762,068 627,713 447,713 Return on average assets 0.63 0.17 0.22 0.90 0.19 0.46 0.44 Return on average stockholders equity 6.73 1.69 2.15 8.67 1.87 5.04 4.86 Net interest margin 1 3.15 3.36 3.32 3.36 3.30 -0.21 -0.15 Efficiency ratio 2 41.51 61.89 67.31 64.04 59.43 -20.38 -17.92 Tangible common equity to tangible assets 3 8.63 9.65 9.98 10.20 10.04 -1.02 -1.41 Tangible common equity per common share 317.47 17.67 17.90 18.05 17.83 0.20 0.36 1 Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented. 2 Noninterest expense divided by net interest income plus noninterest income. 3 Refer to Non-GAAP Financial Measures for further details. Results of Operations Net interest income was 44.4 million for the second quarter of 2020 compared with 44.0 million for the first quarter of 2020, an increase of 1.1. Interest and fees on loans decreased 4.4, or 2.4 million, from the preceding quarter primarily due to a 37 basis point reduction in average yields, reflecting the increase in lower yielding PPP loans and the full-quarter decline in the federal funds rate. Offsetting the decrease in interest income was a decrease in total interest expense of 24.5, or 3.7 million, from the preceding quarter driven by a 45 basis point reduction in the average rate paid on interest-bearing deposits. This was principally due to the effect of managements response to the decline in the general level of interest rates and a decrease in the average balance of time deposits. Second quarter loan prepayment penalties were 0.1 million compared with 0.5 million for the first quarter. As of or For the Three Months Ended in thousands Percentage Change Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Q2-20 Q2-20 Net Interest Income 2020 2020 2019 2019 2019 vs. Q1-20 vs. Q2-19 Interest and fees on loans receivable152,230 54,648 56,267 57,929 56,872 -4.4 -8.2 Interest on securities 3,225 3,655 3,665 3,769 3,770 -11.8 -14.5 Dividends on FHLB stock 203 289 289 286 283 -29.8 -28.3 Interest on deposits in other banks 78 333 478 193 557 -76.6 -86.0 Total interest and dividend income55,736 58,925 60,699 62,177 61,482 -5.4 -9.3 Interest on deposits 8,889 12,742 14,699 15,995 16,728 -30.2 -46.9 Interest on borrowings 760 496 325 367 - 53.2 0.0 Interest on subordinated debentures 1,645 1,712 1,739 1,757 1,764 -3.9 -6.7 Total interest expense 11,294 14,950 16,763 18,119 18,492 -24.5 -38.9 Net interest income44,442 43,975 43,936 44,058 42,990 1.1 3.4 1 Includes loans held for sale. Net interest margin was 3.15 for the second quarter of 2020 compared with 3.36 for the first quarter of 2020, principally reflecting a 55 basis point decline in the yield on earning assets offset by a 45 basis point decline in the cost of interest-bearing deposits. The average earning asset yield was 3.95 for the second quarter of 2020 compared with 4.50 for the first quarter of 2020. The 55 basis point decline reflects the increase in lower-yielding PPP loans, the reduction in securities yields and in dividends on FHLB stock, the full-quarter effect of the decline in the federal funds rate and an overall lower rate environment. The cost of interest-bearing liabilities was 1.23 for the second quarter of 2020 compared with 1.70 for the first quarter of 2020. The 45 basis point decline in the cost of interest-bearing deposits drove the lower cost of interest-bearing liabilities. For the Three Months Ended in thousands Percentage Change Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Q2-20 Q2-20 Average Earning Assets and Interest-bearing Liabilities2020 2020 2019 2019 2019 vs. Q1-20 vs. Q2-19 Loans receivable 14,680,048 4,518,395 4,487,998 4,519,770 4,491,377 3.6 4.2 Securities 589,932 623,711 624,861 630,450 629,062 -5.4 -6.2 FHLB stock 16,385 16,385 16,385 16,385 16,385 0. 