HAFC
#Yes, I mean I wouldn't say specifically, 15%.
By the way, when we referred to the drag of earnings, what we're referring to is that instead of a higher, bigger loan portfolio from CBI, we ended up picking up a bigger securities book.
And so the goal for us is to convert that securities book into higher-yielding loans and to enable us to do that, we need to meantime build up the platform through hiring of additional personnel.
So that's what we meant by the drag on earnings.
As it relates to the security book, I think ideally, for us, I'd like to be in the teens as far as that securities book is concerned.
As to the timing of it, it's going to be dependent upon the opportunities out there as far as loan growth is concerned.
And then, perhaps maybe based on some additional opportunities on the M&A side.
And so the timing of us attaining that teens, the securities book in the teens is going to be predicated upon opportunities to deploy basically the liquidity into higher-yielding loans, whichever form that may present itself.
No, we have no borrowings left other than TRPS at this point.
Yes, we don't portfolio any other than the unguaranteed portion.
The environment is still pretty good in terms of the premium income.
So it makes more sense for us to sell off the guaranteed part.
About 25%.
So during the first quarter, we actually saw positive momentum that increase of DDAs coming from a new Hanmi that we acquired.
Thank you.
Good afternoon, <UNK>.
They were all overnight funds, <UNK>.
Yes, we are confident that we can achieve that.
Well, the discounts, <UNK>, that we have on the FAS 91, the non-purchase credit impaired, the remaining discount, at March 31, there was $18.2 million; and for the SOPs, the remaining discount was $17.6 million which is ---+ and I don't have the numbers in front of me, but that split between a non-accretable portion and an accretable portion, but obviously this is going to run over ---+ run off over the next several years.
Included in the current quarter accretion, there was about $400,000 that related to the payoff of acquired loans.
So the run rate that you should anticipate excluding payoffs would be the accretion that we had in the first quarter is as detailed in the first quarter earnings release, less the $400,000.
Yes, in fact, that's one of the low-hanging fruit for us.
As these higher-rate CDs mature, we are basically not renewing them and so that will be a consistent practice on our part to drive down the funding cost.
Now, in lieu of that or in replacement of that, as <UNK> mentioned, we are actually generating some pretty decent deposits in Texas and Illinois through the efforts of the lending teams that are in both of those markets.
So the deposit bases are not exactly shrinking in those two markets because of the now focus by the two leaders, the Regional Presidents in terms of generating new deposits.
So, let me just share our first quarter experience if that's any indication of coming quarters.
So, during the first quarter, we were able to retain 50% of the mature CDs from Illinois region, and then about 70% of mature CDs in Texas.
So what I am trying to tell you is the retention rate is different from one region to another.
However, the positive thing is that during the first quarter, Illinois, the overall average costs for the mature CDs were over 1.1% and those that we let go they obviously did not stay with us, but we were able to retain the 50% of debt at a much lower cost at 0.7%.
So we'll keep an eye on the retention rate as well as the deposit costs going forward.
Just looking at this year, yes, we do have room to improve on the CD cost.
Any given quarter within this year, we have anywhere from bank wide $220 million to about $285 million CDs that are maturing and then we have some of the CDs from the New Hanmi region that's paying as high as 1.7% which is much higher than the cost of the overall bank.
My suspicion is that over the time frame that you mentioned, our CD book will be lower, but I don't think that's going to be the driving issue.
I think whatever CD book that we have is going to have lower cost of funds.
I think that's kind of the key indicator.
In addition, if we are successful in terms of increasing our core deposits, particularly in the non-interest-bearing DDAs, our target is to be in that mid-30s; that means that the CD book is going to be one of our parts of the liability, but part of our balance sheet that's going to shrink, but overall, our goal is to continue to drive down the cost of deposits by replacing the higher-yielding maturing CDs with either replacement CDs that's lower yielding or the non-interest-bearing DDAs and in money markets.
Yes, I would say, the latter; we're ready to go.
If there is bride that's interested, the groom is waiting.
So we're ready to go.
It wouldn't surprise me if we announce the deal sometime this year.
And so as you said, we do have surplus capital.
We're looking to deploy the surplus capital in the most efficient way possible and so we are actively exploring some options.
Okay.
Thank you for listening to Hanmi Financial's First Quarter Conference Call.
We look forward to speaking to you next quarter.
