Hanmi Financial Corporation

Ladies and gentlemen, welcome to the Omni Financial Corporation's fourth quarter and full year 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 the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. I'd like to turn the conference over to Ben Brockowitz, investor relations for the company. Please go ahead.

Thank you, Matt, and thank you all for joining us today to discuss Hominy's fourth quarter and full year 2024 results. This afternoon, Hominy 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 hominy.com. I'm here today with Bonnie Lee, President and Chief Executive Officer of Hominy 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'd 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 Form 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 in 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 fourth quarter and four-year 2024 results. Before we begin, I want to address the devastating fires in the Los Angeles area that began earlier this month. Los Angeles has been Hami's home for over 40 years, and we are deeply saddened by these events and their profound impact on our community. We have been in close contact with our team members and customers. I am pleased to report that fortunately, there has been no direct impact to our employees' homes, nor significant collateral loss or business interruption to our commercial customers. We want to thank the firefighters, first responders, and volunteers who have been instrumental in helping those affected. We know the road to the recovery will be a long one, and HANMI stands by as a trusted resource to provide assistance as the situation continues to evolve. Now, turning to our results, strong operational execution by our team in the fourth quarter resulted in a successful close to 2024 and provided a solid foundation for continued momentum in 2025. Throughout 2024, we focused on managing the factors within our control as we navigated constantly evolving and dynamic market environment. We continued to execute our strategy, leveraging our proven relationship banking model to further grow and diversify our customer base and loan portfolio. We maintained a sharp focus on prudent credit administration and disciplined expense management and we made meaningful progress in advancing our corporate career initiative. Now, let me review some highlights of the past year. Net income for 2024 reached $62.2 million, or $2.05 per diluted share. Our return on average assets were 0.83%, and return on average equity was a 7.97%. We made significant strides in diversifying our loan portfolio and deposit franchises. In line with our diversification strategy, we increased our CNI portfolio by 16%, driven by strong contribution from our USKC initiative, as well as the acquisition of new relationships throughout our network. We also closely manage our commercial real estate exposure in line with our ongoing efforts to reduce the CRE as a percentage of our portfolio over time. Importantly, Growth in our CNI portfolio contribute to the increase in non-interest-bearing demand deposits, which I'll come back to in a moment. We sold $88.4 million in residential mortgage loans into the secondary market throughout the year, generating $1.5 million of non-interest income while also strengthening our balance sheet. Deposits grew by 2.5 percent in 2024, driven by a 4.6% increase in non-interest-bearing deposits, which now account for 32.6% of total deposits. This strong performance reflects our success in building and nurturing lasting relationships with our customers, who rely on us to provide the quality banking products and services they need. In today's highly competitive banking space, Our ability to cultivate a holistic customer relationship is an important advantage. As I have highlighted in the past, our Corporate Korea, or USKC, initiative is one of our core growth strategies. Through this initiative, our dedicated bankers build relationships with the U.S. domiciled subsidiaries of Korean companies, providing them with the banking advice, lines of credit, real estate investment loans, asset-based loans, and other services. We currently serve businesses in a wide range of industries, including real estate, auto part manufacturing, hospitality, energy, and more. In 2024, we grew our USKC loan portfolio by 23%, and it now represents 15% of our total loan portfolio, up from 12.3% last year. In addition, as I previewed last quarter, We opened a representative office in Seoul, South Korea, which marks a key milestone for Hamni. Through this office, we will enhance our communication and support for our customers and expand outreach to companies looking into the U.S. market. This office complements our existing Korea desks in Los Angeles, Orange County, San Diego, and Silicon Valley, and other key cities in New York, New Jersey, Georgia, and Texas. Based on the success of our USKC initiative, we will continue to pursue opportunities to expand into additional target markets. As we diversified and grew our loan portfolio, we maintain our firm commitment to asset quality. Our asset quality remains excellent, reflecting our focus on high-quality loans, disciplined underwriting, and vigilant credit administration. Additionally, non-performing assets as a percentage of total assets improved to 0.19% and allowance for credit losses remained healthy at 1.12%. In addition to maintaining strong asset quality, we focused on enhancing efficiencies and driving growth and profitability. We made meaningful progress in optimizing our branch network, our strategic initiative to evaluate consolidation, relocation, and growth opportunities. In 2024, we consolidated three branches, one in California, two in Texas. These actions contribute to loan and deposit growth and also result in cost savings. Non-interest expenses rose modestly, just 3.5 percent for the year, as we offset some of the inflationary pressure on salaries and employee benefits with the cost savings and other categories. In 2024, we made investments in digital systems, including a new loan origination system and an online account opening system. We expect that these investments will drive operational efficiencies and improve profitability over time. We continue to retain and attract top talent across the company. Despite a highly competitive market, our employee retention remains strong, and we make key hires across business lines. I attribute our success in attracting and retaining diverse talent to our strong corporate culture and values, which are grounded in integrity, transparency, fairness, and collaboration. These attributes have established Hamni as a bank employer of choice. Finally, our strong financial and capital position allowed us to invest in growth while continuing to reward our shareholders. I am pleased to report that our board approved an 8% increase in our quarterly dividend to $0.27 per share for our next dividend payment in February. This increase underscores our confidence in our growth strategy and our commitment to delivering shareholder value. As we look ahead to 2025, we are focused on executing our growth strategy and building upon the momentum we created in 2024. Our top priorities include generating low to mid single digit loan growth with a focus on further expanding our CNI exposure while reducing CRE as a percentage of the portfolio. Continuing to sell residential mortgage and SBA loans in the secondary market to strengthen the balance sheet. Hiring additional bankers to expand our CNI business with experience in target verticals and increase our core deposit growth. maintaining our discipline credit administration practices and excellent exit quality. And last, advancing our branch optimization efforts, including the recent closure of a Korea Town Plaza branch in Los Angeles and the opening of a new branch in the greater Atlanta region in the near future. In summary, we are well-positioned to drive growth and deliver value to our shareholders in 2025 and beyond. With our relationship-driven banking model and strategic initiatives, including Corporate Korea, small business lending, and branch optimization, we remain confident that we can deliver sustainable growth by providing excellent products and services to our customers and communities. I'll now turn the call over to Anthony Kim, our Chief Banking Officer, to discuss fourth quarter loan production and deposit gathering in more detail. Anthony?