Hanmi Financial Corporation (NASDAQ:HAFC) Q4 2019 Earnings Conference Call - Final Transcript

Jan 28, 2020 • 05:00 pm ET

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Hanmi Financial Corporation (NASDAQ:HAFC) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, welcome to the Hanmi Financial Corporation's Fourth Quarter and Full-Year 2019 Conference Call. As a reminder, today's call is being recorded for replay purposes. At this time, all participants are in a listen-only mode. Following the presentation, the conference will be opened for question.

I would now like to introduce Mr. Lasse Glassen, Managing Director at Addo Investor Relations. Please go ahead.

Executive
Lasse Glassen

Thank you, operator, and thank you all for joining us today. With me to discuss Hanmi Financial's fourth quarter and full-year 2019 earnings are Bonnie Lee, President and Chief Executive Officer; Anthony Kim, Chief Banking Officer; and Ron Santarosa, Chief Financial Officer. Ms. Lee will begin with an overview of the quarter, Mr. Kim will discuss loan and deposit activities, and Mr. Santarosa will then provide more details on our operating performance. At the conclusion of our prepared remarks, we will open the session for questions.

In today's call, we may include comments and forward-looking statements, based on current plans, expectations, events, and financial industry trends that may affect the Company's future operating results and financial position. Our actual results could be different from those expressed or implied by our forward-looking statements, which involve risks and uncertainties. The speakers on this call claim the protection of the Safe Harbor provisions contained in the Securities Litigation Reform Act of 1995. For some factors that may cause our results to differ from these expectations, please refer to our SEC filings, including our most recent Form 10-K and Form 10-Q. In particular, we direct you to the discussion in our Form 10-K of certain risk factors affecting our business.

This afternoon, Hanmi Financial issued a news release outlining our financial results for the fourth quarter and full-year 2019, which can be found on our website at hanmi.com.

I will now turn the call over to Bonnie Lee. Bonnie?

Executive
Bonita I. Lee

Thank you, Lasse. Good afternoon, everyone. Thank you for joining us today, to discuss Hanmi's 2019 fourth quarter and full-year results. While Hanmi's fourth quarter included some extraordinary items that impacted our financial results in the period, I believe, our underlying performance was solid, and we continue to benefit from our strategic focus on higher yielding assets and lower deposit costs.

The following are some of the key financial and operational highlights from this past quarter and full-year. Loan and lease production was at the highest level since 2015, helping to more than offset extremely elevated levels of loan payoffs in the quarter and resulting in fourth quarter growth in loans and leases receivable of 3.6% on an annualized basis. Net interest income, before the loan and lease loss provision, was relatively consistent quarter-over-quarter, but a higher loss provision stemming from the previously disclosed troubled loan relationship, along with some non-recurring expenses impacted fourth quarter net income.

Deposit gathering activities remained strong as we achieved 8.3% increase in noninterest-bearing deposits for the full year. Throughout the year, we benefited from a favorable mix of a lower time deposits and growth in