Hanmi Financial Corporation

Ladies and gentlemen, thank you or welcome to Omni Financial Corporation's third quarter 2024 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. A question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. Once again, as a reminder, this conference is being recorded. Allow me to turn the conference over to Ben Brockowitz. and investor relations for the company. Thank you. You may go ahead.

Thank you, Matt, and thank you all for joining us today to discuss HOMNY's third quarter 2024 results. This afternoon, HOMNY issued its earnings release and quarterly supplemental slide presentation to accompany today's call. Both documents are available in the IR section of the company's website at HOMNY.com. I'm here today with Bonnie Lee, President and Chief Executive Officer of HOMNY Financial Corporation, Anthony Kim, Chief Banking Officer, and Ron Santarosa, Chief Financial Officer. Bonnie will begin today's call with an overview. Anthony will discuss loan and deposit activities. Ron will provide details on our financial performance. And then Bonnie will provide closing comments before we open the call up for your questions. Before we begin, I would like to remind you that today's comments may include forward-looking statements under the federal securities laws. Forward-looking statements are 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 may differ materially from those contemplated by our forward-looking statements, which involve risks and uncertainties. Discussion of the factors that could cause our actual results to differ materially from these forward-looking statements can be found in our SEC filings, including our reports on Forms 10-K and 10-Q. In particular, we direct you to the discussion of certain risk factors affecting our business contained in our earnings release, our investor presentation, and our Form 10-Q. With that, I would now like to turn the call over to Bonnie Lee. Bonnie, please go ahead.

Thank you, Ben. Good afternoon, everyone. Thank you for joining us today to discuss our third quarter of 2024 results. I am pleased with our overall performance this quarter as we deliver strong results, including solid performance across our core operating metrics. We made meaningful progress in executing our growth strategy by further diversifying and expanding our loan portfolio and deposit franchise. Once again, our results demonstrate the value of our relationship banking model, which continues to differentiate Hanmi in the marketplace. While focusing on growth, we also exercise the discipline expense management, maintaining a limbo cost structure that positions us well to navigate changing market conditions. In addition, we continue to employ rigorous underwriting standards and credit administration practices to ensure we maintain excellent asset quality over the long term. In a few minutes, I'll come back to the actions we took this quarter that demonstrate our corrective approach to monitoring our loan portfolio. Now, let me review some highlights of the third quarter. Net income was $14.9 million, or 49 cents per binary share. Our return on average assets were 0.79%, and the return on average stockholders' equity was 7.55%. Net interest margin expanded by five basis points due to a combination of higher yields on interest-earning assets, and lower funding costs. Total loans grew 2% sequentially, and new loan production increased by 27%. Our robust loan production was driven by a 26% increase in commercial real estate, a 78% increase in commercial and industrial, and a 35% increase in residential loan production. Deposits grew by 1.2%, led by a nearly 5% increase in non-interest-bearing deposits and a 3.5% increase in money market and savings accounts. Demand deposits now comprise 32% of total deposits. And finally, non-interest expense declined 0.6%. For the third consecutive quarter, we sold residential mortgage loans into the secondary market, bringing year-to-date sales to $70 million. We expect to continue to capitalize on market opportunities to sell residential mortgage loans to diversify our revenue and strengthen our balance sheet. Moving on to update on the strategic growth initiatives. Our corporate career initiative is performing in line with our expectations. We are seeing a growing number of customer referrals, which is a strong show of confidence in our team's expertise and capabilities. In the third quarter, we grew corporate career loans 6.1% sequentially. This growth was driven by 89% increase in loan production to 103.8 million. Corporate career currently represents approximately 14.5% of our total loan portfolio and 12.4% of our total deposits. Additionally, we recently filed an application to open a representative office in Seoul South Korea, which we believe will further enhance the growth of this strategic initiative. We recently announced the closing of the branch in Koreatown Plaza in LA, which is scheduled to be finalized in January 2025. As a reminder, this action is an integral part of our strategy to maximize growth and generate cost savings. As I have mentioned previously, we will be opening a new branch in the metro Atlanta area in the coming months. As always, we will continue to evaluate future opportunities to optimize our branch footprint. Next, I'd like to take a minute to discuss our recent credit quality actions, which Anthony will cover in more detail. During the third quarter, we successfully resolved the several current-size and non-recruited loans through sales and payoffs, and also recognized the recovery on a previously charged-up loan. In addition, we proactively moved three loans to the special measure category to monitor them more closely. It's important to note that these loans are current, and we are confident that they are adequately protected. In line with our credit administration practices, our goal is to identify and resolve any issues as quickly as possible. At quarter end, the ratio of allowance for credit losses to loans increased by a single basis point to 1.11%. And importantly, the overall credit quality of our portfolio remains strong. With that summary, I'll now turn the call over to Anthony Kim, our Chief Banking Officer, to discuss the third quarter loan production and deposit activity in more detail. Anthony?