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Analogy 1: It's like a regional Wells Fargo, specializing in business banking and real estate loans.

Analogy 2: Think of it as a smaller, business-focused version of a regional bank like U.S. Bank, with an emphasis on SBA, commercial, and trade financing.

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• Deposit Accounts: Offers various accounts for individuals and businesses, including checking, savings, money market, and certificates of deposit.
• Real Estate Loans: Provides financing for commercial properties, construction projects, and residential properties.
• Commercial & Industrial Loans: Delivers business financing solutions such as commercial term loans and lines of credit.
• International Trade Finance: Facilitates global business with services like letters of credit and import/export financing.
• Consumer Loans: Offers personal financing options, including secured and unsecured loans, home equity loans, residential mortgages, and credit cards.
• Small Business Administration (SBA) Loans: Provides government-backed loans for small and middle-market businesses for various purposes.
• Equipment Lease Financing: Offers leasing solutions for businesses to acquire essential equipment.

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Major Customers of Hanmi Financial (HAFC)

Hanmi Financial Corporation, through its subsidiary Hanmi Bank, serves a diverse range of customers, including both businesses and individuals. Due to the nature of its banking services, it primarily serves a broad base of customers rather than a few identifiable major companies. Its customer base can be categorized as follows:

• Small and Middle Market Businesses: These customers utilize a variety of business banking products and services, including commercial and industrial loans (commercial term loans and lines of credit), SBA (Small Business Administration) loans for business purposes (such as owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements, renovations, inventory, equipment, and debt-refinancing), international finance, and trade services and products (letters of credit, import/export financing), and equipment lease financing.
• Commercial Real Estate Investors and Developers: This category includes customers seeking real estate loans specifically for commercial property and construction projects.
• Individuals and Consumers: These customers are served with residential property loans, consumer loans (secured and unsecured), home equity loans, residential mortgages, and credit cards. They also utilize various deposit products such as noninterest-bearing checking accounts, interest-bearing checking and savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit.

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Bonita I. Lee, President and Chief Executive Officer

Ms. Lee has served as President and Chief Executive Officer of Hanmi Financial Corporation and Hanmi Bank since May 2019. She previously held the roles of President (from June 2018) and Senior Executive Vice President and Chief Operating Officer (from August 2013) at Hanmi. With over 30 years of experience in the banking industry, Ms. Lee also served as Senior Executive Vice President and Chief Operating Officer of BBCN Bank and BBCN Bancorp, Inc., where she was Acting President and Chief Operating Officer from February to April 2013. Her prior experience includes roles as Director and Regional President of Shinhan Bank America's Western Region and Executive Vice President and Chief Credit Officer at Nara Bank, where she also served as a Member of the Office of the President. Ms. Lee is the first female chief executive in Hanmi's history and has contributed to the bank's asset growth and diversification of its loan portfolio. Her career began in a management training program as a loan officer at California Center Bank.

Romolo C. Santarosa, Senior Executive Vice President and Chief Financial Officer

Mr. Santarosa has served as Senior Executive Vice President and Chief Financial Officer of Hanmi Financial Corporation and Hanmi Bank since November 2015, bringing over 30 years of experience in banking and financial services. Before joining Hanmi, he was Executive Vice President and Chief Operating Officer at Opus Bank from June 2013, overseeing operational and support functions. Prior to that, Mr. Santarosa served as Senior Executive Vice President, Chief Financial Officer, and Chief Operating Officer at First California Financial Group, Inc. and its bank subsidiary, First California Bank, from November 2002 to May 2013. His career also includes leadership positions at various financial institutions and serving as an Audit Senior Manager with Price Waterhouse.

Anthony Kim, Senior Executive Vice President and Chief Banking Officer

Mr. Kim has served as Senior Executive Vice President and Chief Banking Officer of Hanmi Financial Corporation since 2023, having been Executive Vice President and Chief Banking Officer since 2020. He joined Hanmi Bank in September 2013 as Executive Vice President and Chief Lending Officer. With over 25 years of banking experience, Mr. Kim's background includes serving as Senior Vice President and District Manager at BBCN Bank for five years. He possesses significant expertise in commercial and retail banking and is responsible for revenue targets, including new loan production, deposit gathering, and overseeing branches and lending groups. He is recognized for his strong ties to the Korean American business community.

Michael Du, Executive Vice President and Chief Risk Officer

Mr. Du holds the position of Executive Vice President and Chief Risk Officer at Hanmi Financial Corporation.

Joseph Pangrazio, Senior Vice President and Chief Accounting Officer

Mr. Pangrazio serves as Senior Vice President and Chief Accounting Officer for Hanmi Financial Corporation.

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The key risks to Hanmi Financial's business primarily revolve around its significant concentration in commercial real estate, the prevailing interest rate environment and competitive pressures for deposits, and the potential for credit quality deterioration.

• Commercial Real Estate (CRE) Concentration Risk: Hanmi Financial has a substantial portion of its loan portfolio concentrated in commercial real estate, accounting for over 61% of its total loan book. A significant 65% of this CRE exposure is located in California, with 81% of its office CRE loans specifically in California. This high concentration makes the company particularly vulnerable to adverse economic conditions or deteriorating business environments in California, which could lead to increased loan defaults. Furthermore, this concentration in commercial real estate loans could attract heightened regulatory scrutiny, potentially resulting in increased compliance costs or restrictions on future lending activities. The company has also noted competitive pressures within the CRE lending market.
• Interest Rate Risk and Deposit Competition: As a financial institution, Hanmi Financial is significantly exposed to interest rate fluctuations. Changes in the broader interest rate environment directly impact its net interest income by influencing the yields earned on its assets and the rates paid on its interest-bearing liabilities, particularly deposits. The company has experienced rising competitive pressure in the Certificate of Deposit (CD) market, making it challenging to retain existing deposits and effectively reprice them. Difficulty in attracting and retaining deposits can constrain the bank's ability to fund new loans and expand its net interest margin, thereby affecting overall profitability.
• Credit Quality Deterioration / Nonaccrual Loans: While Hanmi Financial has historically demonstrated prudent credit management, there have been recent indications of potential credit quality deterioration. Notably, the company reported a significant rise in credit loss expense and a substantial increase in nonaccrual loans and classified loans in the first quarter of 2025. Nonaccrual loans, which represent loans on which the bank has stopped accruing interest, surged by 149.1% to $35.5 million, largely due to a single $20.0 million commercial real estate loan being designated as nonaccrual. An overall increase in past-due loans could present challenges for the company's liquidity and credit management.

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The clear emerging threats for Hanmi Financial are primarily driven by the rapid expansion and innovation of financial technology (fintech) companies and non-bank lenders.

• Disruption from Fintech and Embedded Finance Platforms in Business Lending: Fintech lenders, online platforms, and non-bank technology companies (e.g., payment processors like Block/Square, PayPal) are leveraging advanced data analytics and digital-first models to offer faster, more convenient, and often more tailored commercial, industrial, and Small Business Administration (SBA) loans. These new entrants can bypass traditional branch networks, provide quicker approval processes, and integrate financing directly into the operational workflows of small and middle-market businesses, posing a significant competitive challenge to Hanmi's core lending segments.
• Competition from Digital-Only Banks (Neobanks): While Hanmi operates through a network of physical branches and loan production offices, digital-only banks and neobanks offer competitive deposit products (checking, savings, money market accounts) with often superior digital user experiences and lower fee structures. This could lead to a gradual erosion of Hanmi's deposit base, particularly among digitally-native businesses and consumers.

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Hanmi Financial Corporation operates in several key lending and banking markets within the United States.

Addressable Markets for Hanmi Financial's Main Products and Services (U.S. Market)

• Commercial Banking: The U.S. commercial banking market size was estimated at approximately $732.5 billion in 2025 and is forecasted to reach about $915.45 billion by 2030, growing at a compound annual growth rate (CAGR) of 4.56%. This market encompasses various services, including deposit products, commercial and industrial loans, treasury management, and capital markets.
• Real Estate Loans: The U.S. Real Estate Loan Market was valued at an impressive $3.5 trillion in 2024, with a projected compound annual growth rate (CAGR) of 10.6%. This market includes financing for residential, commercial, and industrial property developments. Specifically, the U.S. commercial real estate mortgage market, a component of real estate loans, consisted of $4.5 trillion backed by income-producing properties and $470 billion of construction loans in 2023.
• Consumer Lending: The consumer lending market in the U.S. is substantial, with a reported market size of $27 trillion and growing. Total U.S. consumer debt was $16.99 trillion as of April 2023, with mortgage debt (including home equity loans) accounting for $12.33 trillion and non-mortgage debt totaling $4.66 trillion.
• SBA Loans: The U.S. small business loan market was valued at approximately $245.39 billion in 2023 and is projected to reach about $349.64 billion by 2033, demonstrating a CAGR of 3.4% from 2024 to 2033. The U.S. Small Business Administration (SBA) provided $37.8 billion in 7(a) and 504 funding in fiscal year 2024.
• Equipment Lease Financing: In 2023, the equipment finance industry in the United States expanded to an estimated $1.34 trillion. This figure represents approximately 57.7% of the total $2.3 trillion investment in equipment and software by U.S. businesses, nonprofits, and government agencies.
• Trade Finance: The U.S. trade finance market generated revenue of approximately $10.31 billion in 2024 and is expected to reach about $12.40 billion by 2030. Other estimates for the U.S. trade finance market size were approximately $10.63 billion in 2024, projected to grow to $14.96 billion by 2034 with a CAGR of 3.5%.

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Hanmi Financial (HAFC) is expected to drive future revenue growth over the next two to three years through several key strategies:

1. Diversified Loan Growth, with a Focus on Commercial and Industrial (C&I) Loans: Hanmi Financial anticipates low-to-mid single-digit loan growth, specifically aiming to expand its commercial and industrial (C&I) loan portfolio while strategically reducing its exposure to commercial real estate. In 2025, investments in banking talent led to a 36% increase in overall loan production, with C&I and residential mortgage loan production increasing by 42% and 90% respectively. The C&I portfolio expanded by 25% as part of an ongoing diversification initiative.
2. Net Interest Margin (NIM) Expansion through Optimized Funding Costs: The company expects to see further net interest margin expansion, primarily driven by declining funding costs. For instance, Hanmi planned to reprice approximately $770 million in certificates of deposit (CDs) in Q1 2025 from an average rate of 4.70% to 4.02%, which is anticipated to benefit the NIM. The net interest margin expanded by 37 basis points in 2025, reflecting a combination of lower interest-bearing deposit costs and higher average loan balances.
3. Strategic Deposit Growth and Maintaining a Stable Funding Mix: Hanmi Financial is focused on achieving solid deposit growth and maintaining a stable funding mix, with a particular emphasis on retaining a strong base of non-interest-bearing deposits. Deposits grew by 3.8% in 2025, and non-interest-bearing deposits consistently represented approximately 30% of total deposits in 2024 and 2025, contributing favorably to net interest margin expansion. This strategy is supported by their relationship-driven banking model.
4. Growth in Non-Interest Income, particularly from SBA Loan Sales: Hanmi Financial aims to grow its non-interest income, with a significant driver being the increased gain from the sale of SBA loans. In 2025, non-interest income increased by 7.6%, primarily due to a 39% increase in SBA loans sold. The company's SBA loan portfolio continues to be a strong performer.

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