Ladies and gentlemen, welcome to the Hanmi Financial Corporations Fourth Quarter and Year-End 2013 Conference Call. As a reminder, today's call is being recorded for replay purposes. [Operator Instructions] I would now like to introduce Mr. David Yang, First Vice President of Investor Relations and Business Development. Please go ahead.

Thank you, George, and thank you all for joining us today. With me to discuss Hanmi Financial's fourth quarter and full year 2013 highlights are C.G. Kum, our President and Chief Executive Officer; Bonnie Lee, Senior Executive Vice President and Chief Operating Officer; and Mark Yoon, Executive Vice President and Chief Financial Officer. Mr. Kum will begin with an overview of the quarter and Mr. Yoon will then provide more details on our operating performance and review credit quality. At the conclusion of the prepared remarks, we will open the session for questions. In today's call, we will 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 our expectations, please refer to our SEC filings, including our most recent Form 10-K and 10-Q. In particular, we direct you to the discussion in our 10-K of certain risk factors affecting our business. This morning, Hanmi Financial issued a news release outlining its financial results for the fourth quarter and full year of 2013, which can be found on our website at hanmi.com. I will now turn the call over to Mr. Kum.

Thank you, David. Good morning, everyone. Thanks to all of you for joining us on this call and thank you for your support of Hanmi Financial Corporation. As I reflect on 2013, I am pleased with the progress we have made in building momentum for loan growth, expanding our franchise into new key markets, and positioning the bank for future growth. We delivered strong earnings, meeting the challenges presented by both the macroeconomic and competitive environment. The lenders we brought on board in the third quarter had hit the ground running, generating significant loan growth during the quarter. I am particularly pleased with the success in bringing new business customers with core deposit accounts. This quarter's production confirms my belief that we are building a robust business landing capability with would diversify our loan portfolio, reduce our cost of funds with low cost business deposit accounts, and ultimately creating the foundation to build sustainable long term profits. One of the highlights of the quarter was our announcement that we will be acquiring Central Bancorp Incorporated, parent of Texas-based United Central Bank. As you know, we have been looking to make a strategic acquisition for a while. This transaction has great potential for our franchise. I believe this acquisition will be transformative for Hanmi. It will give us an entry into several new markets including, Texas, Illinois, New York, New Jersey, and Virginia. All of these markets have significant Korean-American population with potential for further penetration. But even more importantly, United Central Bank has solid penetration into other asset communities, including, Indian, Pakistani, and Chinese customers as well as mainstream customers. This acquisition is expected to close in the second half of the year and on a pro forma basis, Hanmi will be the second largest Korean-American bank in the nation.…

Mark. Thank you Mr. Kum and good morning everyone. Our fourth quarter results reflect overall improvement in our operating platform and we are increasing in confidence that our momentum will accelerate in 2014. We are strongly [ph] profitable in both the fourth quarter and the full-year 2013. We had a bit of noise in the numbers with elevated strategic review costs and tax adjustments which make comparisons bit challenging. Our pretax income declined at 10.8% in the fourth quarter and it was up 4.7% year-over-year. For the full year, pretax income grew 44.1% compared to a year ago. Our net interest margin was 3.98% for the quarter which is down 30 bps from the third quarter and improved by 12 bps from the year ago. This decline in the most recent quarter mainly reflected a increase in low-yielding assets. In addition, we had $490,000 interest reversal over non-accrued loans in the third quarter and boosted third quarter loan yields by 9 bps. For the year, NIM increased 28 bps to 4.05%. The increase was due mainly to the elimination of interest on our TPS, the decline in the cost of jumbo CDs, and deployment of low-yielding assets into higher yielding loans. Our mix of deposits continued to shift to retail transaction accounts from jumbo time deposits. We generated $27.6 million in net income before credit loss provision for the fourth quarter of 2013, compared to $28.5 million in the preceding quarter and $26.4 million in the fourth quarter a year ago. For the year, net interest income before credit loss provision, increased 7.7% to $108.8 million, from $101 million a year earlier. Average interest earning assets were up by $110.3 million in the quarter and a $23.7 million from a year ago, while average interest earning liabilities were up $63.1…

Thank you, Mark. It was a great end to a remarkable year and I want to thank all the people on the Hanmi team for their hard work in 2013. It has been just over seven months since I took the helm here at Hanmi, and it has been a very productive time for all of us. We have done a lot of work to get to know the bank and have delved deep into our operation, customer base and market potential. We have put into place the strong group of lenders and identified meaningful ways to improve our operation. And we also negotiated a major acquisition which will give us a presence in the major markets coast to coast. We believe 2014 will be an even more exciting for us and we look forward to sharing our progress with you in the coming months. Thank you. David?

George, let's open the call for questions.

(Operator Instructions) Our first question is from Gary Tenner with D.A. Davidson. Please go ahead.

Just a couple of question regarding the balance sheet in terms of, you know you talked about buying some short-duration securities in the fourth quarter. I have seen that the borrowings in FHLB were used to fund that and with the expectation that you will allow some run off during the first quarter and was that short of pre-buying given some higher yields in the fourth quarter.

We borrowed funds from FHLB to buy securities in the fourth quarter. The increase in securities of $147 million in the fourth quarter was funded by the excess liquidity in the balance sheet, carryover from the Q3 last year. So the borrowing we did prior to year-end was just for the cash flow -- the fund needs before the filing [ph] year-end and also [indiscernible] except January. So we borrow at about 4 basis points and the average yield of short duration amortizing securities we purchased in the fourth quarter was about 1.7% to 1.8% with the modified duration of about 3 or 3.5. So normally from the investment security we have would result in expected cash inflows, amortization of say about $12 million per quarter. So that is our expectation.

Gary, we are also looking to leverage our balance sheet further in 2014 and we will continue to evaluate these opportunities to enhance revenue by potentially looking at short-term cost of funding opportunities like FHLB. But we will evaluate those things in the first quarter.

Okay. And I wonder if you could put any kind of specificity around the expense initiatives and costs [ph] that you have implemented on a [indiscernible]?

Well, first of all as I mentioned, I have been here now a little over 7 months. And myself along with Bonnie Lee and Mark Yoon have been focused on the expense structure here at Hanmi Bank. Those of you who have worked with Hanmi probably notice that our expense structure has been relatively high in comparison to our peer banks. And we took the opportunity or the time to understand the makeup of Hanmi to in a sense identify potential solutions. So as part of that we were in the process of evaluating our branch structure, our technology platform, to determine ways by which -- that we could be more efficient. The way the personals are lined up in all the different parts of the organization so that, as you recall, I had said I think in the third quarter earnings call and some other meetings, our goal is to be below 50% in terms of an efficiency ratio. And we believe that with the implementation of some of the initiatives that we have in mind, that we have a pretty good chance of getting there by the end of 2014.

Okay. So does that mean we should expect some branch closing [indiscernible] again, any additional, specific details you can give.

Yes. At this point I am not prepared to give you any more specifics until all of the studies have been completed and have been approved [indiscernible] by the Board of Directors of Hanmi Financial Corporation. But generally speaking, the issues that identify will give you a pretty good indication as to where the cost cuts are going to come from.

Thank you. And our next question is from the line of Julianna Balicka with KBW. Julianna Balicka - Keefe, Bruyette, & Woods: I had a couple of questions. One, on your reserve coverage of loans, I know the methodology is a complicated mathematical formula but just in general as you think about growing into your reserves, at what level do you feel like the reserves will kind of shake out and kind of settle down versus do you still have some reserve releases and/or growing into.

Well, our ability to grow into our loan loss reserves is kind of dependent upon the velocity or the speed with which we generate additional loans and loan relationships. But I think what you are hitting on is that our reserve is relatively fat [ph] and we think there maybe opportunities in 2014 for some reserve releases, provided that there aren't any surprises associated with our asset quality, and provided that the velocity of new loan production isn't dramatically greater than what we expect. Julianna Balicka - Keefe, Bruyette, & Woods: Okay. And then in terms of your loan production growth as to the production you had this quarter, once the lenders that you have brought on are running at full capacities on your existing infrastructure, what kind of origination -- quarterly origination run rate would you like to achieve.

Well, what we generated in the fourth quarter of 2014 is probably a little bit higher than we should expect in the first quarter of -- excuse me, I said there 2013, fourth quarter 2013 -- it's a little bit higher than what should be expected for the first quarter of 2014. Typically the first quarter of the year for all banks tend to be little bits slower than the fourth quarter. But the production that we generated in the fourth quarter I think gives you a pretty good indication of the potential for loan generation by Hanmi. And not just the new members but the existing team that’s been here working hard. So I am very optimistic that in the year 2014, I believe that we are going to be comfortably in the double-digit loan growth for the year. I couldn’t tell you exactly what quarter-to-quarter it's going to be but I personally would be disappointed if we were not in the double-digits. So I think where all the indicators are at this point, they are pointing to the fact that we are going to have a very comfortable double-digit loan growth in 2014. Julianna Balicka - Keefe, Bruyette, & Woods: Excellent. And has there been any additional lender hiring year-to-date or anything late in the quarter last year.

Well, lending hires -- we will continue to evaluate opportunities to bring on production people as well as support personal. One of the major positives that all of us are very pleased with is the approaches that are being made to us by lenders from other institutions. Some who are by the way from mainstream, so I am not exclusively talking about Korean-American -- approaches only from Korean-American banking space. It's not our plan to make major changes on the lending side but we will continuously evaluate opportunities to bring in talented bankers who can generate loans or who can support the personal who generate loans. Julianna Balicka - Keefe, Bruyette, & Woods: Okay. Got it. And two quick follow-ups. One, on deposits, are you anticipating any large inflows around the New Year or any promotions in the works?

Well, I am expecting some nice increase in the first quarter as a result of some success that we had with the recruitment efforts thus far as new clients are concerned. And so we continue to expect -- I continue to expect we will, on the core deposit side, in particular in the areas of non-interest bearing DDA and the low interest corporate money market accounts. Julianna Balicka - Keefe, Bruyette, & Woods: And just a follow-up on Gary's question, the borrowings at the end of the year on your balance sheet, those are gone now, right?

Yes, almost.

(Operator Instructions) Our next question is from the line of Tim Coffey with FIG Partners. Please go ahead.

CG, I was wondering if you could give me some color on what you are seeing on competitors in terms of pricing and underwriting on those commercial business.

When you say commercial, I am assuming you are referring to C&I versus commercial real estate. Is that correct?

Yes, you are right.

We are not seeing -- I couldn’t really speak to what the competition is doing on the C&I side because I think we are the ones that have been most active in the C&I space as a result of some of the key additions to our staff. So I really couldn’t say much about that. We have adhered to a conservative underwriting philosophy and frankly we have not lost any deals to any of our peer banks whether in the Korean-American space or in the mainstream space on the basis of underwriting or, frankly, even on the pricing side. C&I area is where we are able to go after and get those deals that we want and at pricing that we want. And so, so far, it's been very positive for us in that regard.

Thank you. And just to double check because you anticipated your C&I loans would be one of the big drivers for overall loan growth in '14?

Yes. Absolutely, absolutely.

Okay.

And not only that, if we are successful with that premise that’s going to also very positively impact the growth in our core deposits because they go hand in hand as far as we are concerned.

Thank you. And our next question is from Gary Tenner with D.A. Davidson. Please go ahead.

Just had a follow-up. Regarding service charge income, it's been trending down pretty suddenly [ph] over the course of 2013. I am wondering if you could kind of just comment on that and where your expectations might be there?

Yes. The main reason for the trending down of that line item has been the reduction in NSF fees. And be design we have basically cleansed the -- we have stated DDA or the depository side of those accounts that have been contributing in NSF fees over a period of time. I believe with the advent of Consumer Financial Protection Bureau and the regulatory emphasis on consumer protection along with just from sound risk management standpoint, it just doesn’t work having those NSF fees with the potential risks. Having said that, our goal is to -- that the losses with a focus on the other service charges that we normally assess along with a continued growth and emphasis on the treasury management services.

Okay. Would you say that the fourth quarter '13 level of service charges, is that a bottom or is there more NSF generated income.

No, I think that’s the bottom. That’s the bottom.

Thank you. And our next question is from Julianna Balicka with KBW. Please go ahead. Julianna Balicka - Keefe, Bruyette, & Woods: I have a follow-up. On the redeployment of cash and also continuing to streamline the balance sheet, anything else where you can expect, in the first half of the year, first quarter, in terms of reduction of cash of the securities that you purchased? Or are you planning on selling those, redeploying into loans, or how can we think about the expense structure in these [indiscernible].

Okay. We have paid down most of the older [ph] FHLB borrowing we did, about $125 million at year-end. We still have some excess cash on the balance sheet that we are planning to deploy that excess liquidity into the securities at this quarter. And so as Mr. Kum noted previously, we are trying to expand our investment securities with making investment into mostly short duration amortizing securities. So we are looking at about 20% of assets. Certainly I think we are spending at around 16% or 17% of assets so probably you will expect a expansion of the securities portfolio of about 20% this year.

Also, Julianna, we are looking at opportunities to acquire some loans. I have spoken so far strictly in the context of organic loan growth but we have been approached by some entities who have offered us, I would say safe loans to continue to augment the portfolio. So there is an opportunity, there is a possibility of continuing to buy some of the loans to leverage the balance sheet a little bit more effectively on a go-forward basis. Don’t ask me how much, because I don’t know.

(Operator Instructions) I am showing no further questions. I will turn the call back to management for closing comments.

Thank you for listening to Hanmi Financial's fourth quarter and full-year conference call. We look forward to talking to you next quarter.

Ladies and gentlemen, this concludes our conference. Thank you for listening to Hanmi Financial's fourth quarter Conference Call. We look forward to talking to you later. You can now disconnect.