Q4 2020 Hanmi Financial Corp Earnings Call
Okay.
Ladies and gentlemen, welcome to the Hanmi financial corporations fourth quarter and full year of 2020 conference call.
Today's call is being recorded for replay purposes. At this time all participants are in a listen only mode. Following the presentation of the conference will be opened for questions I would now like to introduce loss of glass and managing director at <unk> Investor Relations. Mr. Glass on the floor is yours.
Thank you operator, and thank you all for joining us today with me to discuss Hanmi financials fourth quarter and full year of 2020 earnings are Bonnie Lee President and Chief Executive Officer, Anthony Kim Chief Banking officer, and lot of of Santa Rosa Chief Financial Officer.
MS. Lee will begin with an overview of the quarter, Mr. Kim will discuss loan and deposit activities and Mr. Santa Rosa will then provide more details on our operating performance at.
At the conclusion of our prepared remarks, we will open the session for questions.
On today's call. We may 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 on.
Slide 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 90 to 95 four.
For a list of certain 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 form 10 Qs.
In particular, we direct you to the discussion of certain risk factors affecting our business.
Contained in our earnings release, our Investor presentation on our form 10-K.
This afternoon Hanmi financial issued a news release outlining our financial results for the fourth quarter on full year of 2020, along with the supplemental slide presentation to accompany today's call.
Both documents can be found in the Investor Relations section of our website at Hanmi Dot com.
With that I'll now turn the call over to Bonnie Lee Bonnie.
Lots of good after.
And on everyone. Thank you for joining us today to discuss Hanmi is 2024th quarter and full year results.
Part of ongoing challenges arising from the COVID-19 pandemic on.
On the finished the year with a strong fourth quarter driven by excellent non production stable net interest margin in California, non interest expense management.
Rob the pandemic, we have remained focused on helping our borrowers and depositors affected by the crisis and I am pleased to report that these efforts have been very successful in protecting the value of our portfolio.
Looking ahead, our solid balance sheet and kept competition all of that.
Our strong loan and deposit franchise gives me confidence that we will deliver profitable growth as we remain cautiously optimistic that the economy will continue to improve.
With that as a backdrop the following or on our results and some of the key financial and operational takeaways from the fourth quarter and full year.
We reported net income of of $14 $3 million or <unk> 47 cents per diluted share of.
From 10 cents per share in the fourth quarter last year for the full year net income was $42 $2 million or $1 38.
<unk> per diluted share an increase of of nearly 49% from two.
19.
Fourth quarter pretax pre provision income was of solidly higher on both a linked quarter and year over year basis and benefited from sharply lower interest expense arising from our lowering of the deposit costs.
Your loan production during the quarter of fourth quarter was the strong and increased 28% compared with the prior quarter.
For the full year 2020, non production increased 29% aided by our participation in the pullback from 2019 as a result of this growth over the past year loans receivable were up five 9% year over year.
Net interest margin of the 313% held steady from the prior quarter as the reduction in deposit cost offset the declining yield on earning assets.
During the course of the year, we were successful in protecting net interest margin. Despite the increasingly competitive the pricing we faced for loans and deposits.
We continue to benefit from our strategy emphasizing low cost deposits generating activity in fact, nearly 90% of the growth in total deposits. This past year came from noninterest bearing DDA.
As a result, non interest bearing demand deposits increased 36% of the total deposits of.
From 30% of a year ago I am very pleased with the results of our ongoing focus on carefully managing non interest expense, which declined nearly $7 million or five 4% for the full year 2020, and finally, the bank remains very well capitalized on.
We used the regulatory capital ratios remain very strong and we are well positioned to continue growing in a safe and sound manner.
Moving to asset quality I continue to be quite pleased with the positive EBITDA trends, we are seeing our modified portfolio.
And the initial phase of the modification program first round of requests for modifications reached the $1 $4 billion or 29% of the loan portfolio at the end of the second quarter into the next phase of the program. So it kind of on modifications declined 59 percentage of $579 million.
The third quarter or approximately 12% of the portfolio.
So at December 31st third round of modification declined again by 73% from the prior quarter to $156 million or.
Or approximately 3% of the portfolio.
And so the year end, 87% of of modified loans are providing a modified payment.
Or all sorts of kind of requests beyond the initial modification we have completed detailed reviews of the borrower's financial condition.
In some cases, we have required additional credit enhancement and settle loans had been downgraded to special mention or classified.
Throughout the pandemic, we have maintained the commitment to proactive SM management, and helping our borrowers weather the crisis, while minimizing the cherry charge offs.
Looking at other elements of the asset quality.
Criticized and non of corn those increased in the fourth quarter, reflecting as I noted our proactive asset management practices.
Similarly, 75% of our non accrual loans represent just eight loan relationships of the $2 million or more and we anticipate that several of these while deposits. You believe is positioned in the first quarter with the minimal or no loss at.
At the end of the year, our allowance for credit losses were $94 million and stood at 197% of loans excluding PPP.
We also had on allowance for off balance sheet items of the two point in Italy in and of one 7 million allowance for losses and accrued interest receivable for loans modified under the cares Act taken.
Taken together with our strong capital position strong pretax pre provision earnings and S. M management practices I am confident we will weather the effects of the pandemic well.
Before turning the call to Anthony I would like to provide an update on several initiatives that we will be focusing on the coming year.
Net are designed to provide our customers with additional products and services further diversify our sources of revenue and safely drive profitable growth.
Our new residential mortgage platform will be focused on originating nonqualified mortgages.
The house lending and we had told mortgage.
Production is ramping up with the goal of the residential loans, comprising 10% to 16% of the Hanmi loan origination activity in 2021.
In addition, we have of rolled out our use of digital banking platform that will initially focus on opening new accounts and online deposit gathering activities.
Throughout the year, we plan to extend the digitization of our banking platform to Lora.
On the scale, our services, while providing a more convenient and seamless customer experience.
And finally I am pleased with the result of our call.
But Korea initiative as we nearly doubled the loan and deposit balance is contributed by this program during 2020.
And we expect the ex surveyed our efforts in 2021.
Here, we are focusing on developing and expanding relationships with the Korean companies domiciled in the United States.
We currently have of corporate Korea test in seven strategically located branches and at year end. This effort had contributed nearly 10% of our total loans and 8% of quota.
Deposits.
Looking ahead, we expect our corporate Korea program to continue generating do zone.
Production of new deposit relationships.
With that I would like to turn the call over to Anthony Kim Our Chief banking officer to discuss the fourth quarter loan production results and deposit gathering activities Anthony.
Your body.
How many generated solid loan production volume totaling $327 8 million I think the floor of 27, 8% from the prior quarter's volume of $256 6 million.
We experienced growth of across all major categories with the exception of SBA loans.
More specifically fourth quarter production consisted primarily of on.
The $7 1 million of CRE loans, 71, $4 million of of C&I loans, and 27 5 million of its phase.
Zones round.
Rounding out fourth quarter production was 39 $8 million of the middle.
D C is nearly double the third quarter of news production.
Newly generated loans of leases for the quarter ahead of the weighted average yield of four 1%.
This compares to previous quarter's weighted average yield of 457%.
Of note amendments on the commercial lines of credit increased nearly 15% from a year ago.
988 billion. However balances on these lines of fell by 12 million on quarter over quarter at quarter end, reflecting a full quarter of utilization rate of 42, 7%.
During the fourth quarter amidst all of $21 6 million of SBA loans generating a gain on sale of of $8 million.
I was pleased with our execution in the quarter.
The SBA trading premiums increased to 10.9.
9% in the period.
Fourth quarter of payoffs of 160 million remained elevated compared with the level of experience in the past recent quarters the U.
Weighted average interest rate of the loans that paid off from the period was $4 four 4% or 33 basis points higher than the weighted average yield on new production in the quarter.
Solid loan production to the quarter in conjunction with the loan pay offs resulted in loan receivables of $4 8 billion at the end of fourth quarter of 4% on an annualized basis from the prior quarter and up five 9% from a year ago Hanmi.
<unk> remains committed to a conservative disciplined on the rate underwriting criteria for.
For the commercial real estate portfolio consistent with that the quality of data from prior quarters, the weighted average loan to value and weighted average debt coverage ratio as of the end of fourth quarter of war 48, 6% and one nine times respectively.
In light of the economic disruption caused by pandemic we.
Debt to maintain more conservative underwriting spend dollars, which includes limiting origination activities within certain high risk industries and closely monitoring the economic impact on our customers over the near term.
Now I would like to provide an update on our hospitality portfolio. The segment of our portfolio that has been most impacted by the pandemic.
As of December 31.
On a day loans totaled $907 million or 19% of the Hanmi as total portfolio.
Our hospitality loans on conservatively underwritten the.
The average loan balance is just three 3 million with the weighted average debt coverage ratio of two times and a weighted average loan to value ratio of 53%.
At year end hospitality loans comprised of $124 million or 78% of modified portfolio down 72% from 441 million at September 30.
Of the 124 million of modified hospitality loans as of year end, we were able to secure a team of reserve as of additional collateral on $52 5 million or margin of 42% of total of amounts overall.
Overall, we believe COVID-19 related risk of SAR manageable and we continue to work with our effective hospitality customers to help them through the crisis and returned to normal loan payment schedules.
Moving on to deposits. We remained very pleased with the strength of a hobbyist deposit franchise.
Total deposits were $5 two 8 billion at the end of fourth quarter.
There was a $5 one 9 billion at the end of any quarter, representing a one 6% quarter on a reported increase for.
For the full year deposit grew 12, 3%.
Importantly, we saw an improving mix shift of deposits as higher cost time deposits declined throughout the year and we replaced with a non interest bearing demand deposits, which comprised the vast majority of our total growth of deposits during the year.
The result of fourth quarter loan production of deposit gathering activities on loan to deposit ratio was 92, 5% compared with the 93, one percentage of the prior quarter.
I would now like to turn the call over to run some of that was our chief financial officer on.
Thank you Anthony and good afternoon, all let's begin with pretax pre provision income for the fourth quarter.
With net interest income of $46 9 million noninterest income of seven 8 million and noninterest expense of $30 9 million pretax pre provision income was $23 8 million up four 1% quarter over quarter. When we adjusted the fourth quarter for the $1 million benefit associated with.
The litigation settlement.
Fourth quarter pre tax pre provision income benefited from higher net interest income and higher non interest income.
Looking at net interest income, we posted $46 9 million up two 8% from the prior quarter.
The increase was the reduction in interest expense, which fell 19% or $1 8 million due to lower rates paid on interest bearing deposits.
This was partially offset by lower interest and dividend income, which declined 0.9% or $500000, reflecting lower prepayment penalties on a modest decline in average yields on loans.
Turning to net interest margin for the quarter. It was the same as the prior quarter of three 3% the average yield on loans for the fourth quarter was 434% down eight basis points from the third quarter. However, the average rate paid on interest bearing deposits dropped 23 basis points to 64 basis.
Points, our net interest margin also benefited from the continued shift in deposit mix with higher costing time deposits declining four 1% and lower costing money market and savings accounts increasing 11%.
As Anthony noted the weighted average interest rate on new loan production from the fourth quarter was four 1% slightly below the average yield posted for the quarter. However, we expect the average rate paid on time deposits will decline again as higher rate maturing deposits renew into lower rate time deposits.
As a result, we anticipate our net interest margin to remain at about the same level.
Noninterest expenses were $30 9 million in the fourth quarter up slightly from the prior quarter, primarily due to the change in other real estate owned and repossessed personal property activity.
Notwithstanding this modest increase the increase in revenues helped our efficiency ratio improved 120 basis points to 50, 553% in the fourth quarter from $56 seven 3% on the prior quarter.
Our credit loss expense for the fourth quarter was $5 1 million and included a provision for loan losses of $5 7 million on.
The negative provision for off balance sheet items of $2 9 million and a $2 $3 million provision for losses on accrued interest receivable for loans previously or currently modified under the cares Act.
Looking to the balance sheet, our allowance for credit losses increased to $90 4 million from $86 6 million. After the provision of $5 7 million and net charge offs of $1 9 billion.
Included in the allowance for credit losses were allowances for credit losses associated with individually impaired loans.
While the macroeconomic conditions continue to improve we continue to assess the risk factors associated with the pandemic and these risk factors together with an increase in specific allowances for and an increase in individually impaired loans led to an increase in the allowance for credit losses.
Our return on average assets and our return on average equity in the fourth quarter were zero point, 92% and 1.0 of 1% respectively and.
And finally, our tangible book value per share increased to $18.41 at the end of the fourth quarter and our tangible common equity ratio remains strong at nine 3% as do all of our regulatory capital ratios with that I'll turn it back to Bonnie.
Thank you Ron as I noted at the beginning we remained focused on helping our borrowers and depositors affected by the pandemic. We also remain equally focused on our communities and the health and wellbeing of our employees without whom we could not have the overall I'm very pleased with our performance again.
The challenging backdrop of the COVID-19, our solid finish to the year demonstrates.
The durability and resilience of the Hanmi franchise.
As such I am confident as we look ahead to a new year debt, we have the ability to emerge from the pandemic well positioned to drive profitable growth and value for our shareholders I look forward to sharing our continued progress with you when we report on first quarter.
2021 results in April thank you.
That concludes our prepared remarks, operator, we'd now like to open the call for questions.
Thank you ladies and gentlemen, we will now begin our question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate your line is on the question queue. You May press star two if you'd like to remove your question from the queue. The full participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
And our first question is from Matthew Clark with Piper Sandler.
Hey, good afternoon.
Okay.
First question was just around the margin.
Ron do you happen to have them the amount of P. P. P related income on the net basis that.
Help the NII.
And how much is left.
So.
For the fourth quarter net interest income or interest income I should say from the peak of three activity was $1 8 million.
Little change from the third quarter of one 7 million.
We did have.
Have a.
Our level of forgiveness, but they were the small balance loans 50000 of requests. So it really didn't change the contribution for our PPP in the fourth quarter as compared with the third quarter.
And the amount you have left I'm just so we're in the ballpark.
So we have.
When we started with about 303 $302 million at the end of.
The calendar year, we had $296 million. So we still have a way to go okay.
Got it.
Okay.
And then on.
The hotel portfolio of how are you seeing any opportunities to sell hotels in this environment.
It came across another bank. This past week I was able to sell from hotels at par.
And whether or not you would consider something like that.
Sure and debt.
It is a possibility and.
And the time to time, we have interest.
The buyers as well.
Okay.
And then just on the.
The ACL the the 197 I believe 1.97% ex PPP.
Is the expectation that you'll probably continue to build reserves kind of incrementally as you see maybe some additional migration from you.
You know the criticized into non accrual or do you feel like we're at a point, where we might keep peaking in the can start to release, a little bit maybe next year or this year I'm sorry.
So.
Which of what Youll find Matt what we tried to point out is that there was a shift in the.
<unk>.
Allowance for credit losses.
With.
The higher proportion of being assigned to individually impaired loans and a lesser portion, let's say the we'll call that the general idea.
And so if you if you think through that I'm, comparing third quarter to fourth quarter. What you saw there was a reduction in one category and an increase in the other produced the net increase which I don't think it was all of that much at about $5 1 million. So.
Expect as we go through first quarter second quarter third quarter, we will see one what will be the broad impacts of the so called macroeconomic conditions and let's assume those continue to improve then it will become down to more of the narrowed circumstances, what what's happening specifically in the portfolio. So.
Yes, it could end up with the negative provision.
I'm a bit more I'll say conservative.
Some of the St pessimistic.
It would be.
If a likely event, but I'm not sure. It's in the front end of 2021 is it is more towards the back end of 2021.
Okay.
And then.
Any thoughts updated thoughts on capital return and whether or not you might consider of buyback.
Given the stronger earnings and the ability to cover the dividend here.
Whether or not that's realistic maybe this coming quarter.
So as we've mentioned in our previous calls of the board does take up of the dividend and capital each quarter. They.
They will do so weekend here shortly and.
The decision with respect to dividend.
Share repurchase I'm sure.
Will be known soon.
Okay, and then just a housekeeping item on the tax rate a little light this quarter should we still should we assume 30% or maybe a little lower than that going forward.
No as you said on a on.
The quarter Mark the tax rate will vary around the 30%, but as you see we finished the year at around the 30%. So barring any changes in the tax law I think 30 percentage so a fairly good target.
Effective tax rate.
Okay. Thank you.
Okay.
Our next question is from Kelly Motta with K B W.
Hi, Thanks for the question this afternoon.
Okay, well I know, it's still early but with the with losses do you have an.
An idea of the general of bar ballpark kind of what you're expecting at least in the coming year and also if you have what the specific reserve was.
That component of the reserve rate here that would be helpful.
So two two.
To address part of the question Kelly.
So specific allowances at the end of the year on.
Were $14 1 million.
Up from $3 7 million at the end of the third quarter.
Again.
Specifically or individually.
Identified impaired loans.
We're about $91 million at the end of the year compared to $69 million at the end of the third quarter.
With respect to charge offs from net charge offs.
This quarter.
Mr of $2, one if I remember it correctly.
So I would think that would be let's say of somewhat.
Regular idea I know the first quarter of this past year was punctuated with the.
On that particular.
Troubled loan relationship.
And then I think we had a favorable recovery on one of the other quarters, which brought about pretty much of nil event. So.
Think.
Barring any specific credits, which could happen from time to time.
I would say the of fourth quarter and I think it would have been the second quarter of last year.
Probably.
The normalized ideas, we still are.
Waiting to understand better what are the long term effects of the pandemic.
Yeah. So the.
Those would be my two data points I would look to.
Great and then with the hotel portfolio specifically.
How much of that right now is it on.
The special non chatting criticized.
The MPL buckets.
And also I noticed in your slide deck, a lot of what's remaining on not in modification is in Texas is that is that.
On being swayed higher by a larger loan or is it is it just.
You know of a bunch of credits in that market that are struggling.
The strike like thanks.
Try to answer first part of the question.
Total downgraded.
The special mention of classified category.
It's about a $6 billion.
And then Texas loans.
Kind of.
The center is two three.
Three of our four loans.
The other in Texas.
It represents a higher percentage of the.
Modification.
But the answer to your question.
Sorry, I haven't thought of doing it.
The part of them.
When you say about four loans in Texas or are you, referring to the hospitality segment well.
On slide 13 are purchased and Jaguar.
In hospitality.
Thank you.
Okay.
And our next question is from Gary Tenner with the D. A davidson.
Thanks, Good afternoon.
Couple of questions first on SBA, obviously fourth quarter production was a little bit lauterbur debt.
And it had been or was in the third quarter of at least of.
What should the expectation be for early 'twenty 'twenty, one that cause the.
Second round of PPP might negatively affect demand.
Four of SBA or maybe just broadly what are you seeing in terms of the manta.
So I think I think it would be helpful to just the.
Overall 2021.
On average quarterly we would expect to produce about.
About 30 million, 30% to $35 million.
Particularly in the first quarter, we do have.
Healthy pipe line of.
SBA loans.
So.
And we plan to book on the first of all ahead of itself.
Okay.
Alright, Thank you and then on of on.
On the time deposits side.
Even with the shift of the mix of deposits I think its still near 25 per cent of the total deposits at year end.
Could you maybe walk us through maybe some of the.
She'd be maturities over the next few quarters.
Maybe give us a sense of of how much more you think you would want to try to work out of the backwards of different the.
Part of the buckets versus renewing.
Yes.
You have about.
Little over 260 million maturing in the first quarter at one 4%.
So historically our.
Our retention ratio is about 70% to 75% of.
Of the Cds.
In 2021, I think a little.
Over 900 of millions of maturing.
So I would say we will retain about.
70% on debt.
At the lower rate between 24% or lower.
I'm sorry, what was that last part in terms of the rate.
We'll probably able to replace reprice at 0.4% or lower.
Okay.
Great and then my last question this debt.
The two points of $1 million provision for losses on accrued interest receivable was that effectively although and that was on full payment deferral. So the interest was capitalized but then after the deferral period collection of that what integrator doubt is that the.
Of the capsule of the.
No. So what we did is we looked at all of the loans that were modified either formally modified or currently modified under the cares Act. So if you'll recall I think as Bonnie mentioned, we started off at about $1 4 billion were down to about $156 million. So we've.
Look at where we were in the collection of all of that interest.
Recognizing that some of those borrowers.
They may be downgraded further or or moved to non accrual and so we did an assessment to determine what are the potential losses from that pool.
So it's not related to a specific loan is related to that pool of loans that were at one time modified or are currently modified so think of it as a general allowance not a specific allowance of specific credits.
<unk>.
Great. Thanks for the color.
Okay.
Yes.
Okay.
Yes.
And our next call is from Timothy Coffey with Janney.
Okay. Thank you afternoon, everybody Bonnie I wanted to follow up a bit on the the the the resi mortgage origination business.
I apologize if you've talked about this on previous calls, but it's been a really busy year has.
Is that program already started up.
So we spent the fourth Q setting up the platform and we did a day.
A bit of the production in the poor Q on that.
Meaningful debt in the starting with this quarter.
The department were kicking the gear and debt.
But the full production mode.
Okay.
Do you have any kind of the.
Idea on when you might be hitting full speed on that is it like mid year or sooner.
Yeah by media of definitely we should look here.
Okay.
And did you say that you expect that to be 10% to 15% of originations.
Yes, okay.
Okay.
All three categories the non QM the.
On the warehouse and then the regular mortgage.
Correct, Okay alright.
Alright the.
Rest of my questions have been asked and answered thank you.
Okay.
And our next question is from David She of Verine with Wedbush Securities.
Hi, Thanks, I wanted to.
Follow up on loan growth what are your expectations for loan growth this year and I know there is.
Clearly some moving pieces with the P. P. P forgiveness, both on round, one and new PPP loans coming on with with round, two but what sort of your thoughts on loan growth this year.
So I think excluding.
The Q.
<unk> III program I would expect the 2021.
Loan growth to be low to mid single digit growth.
Great, Okay and then.
Shifting to back too.
The hospitality portfolio.
It's good to see well the overall portfolio, you're now seeing that the modifications.
Down the way they have in looking at the slide 13. It is nice to see that most of the loans are in the non modified category. At this point is this due to better operating performance or are the sponsors writing more checks.
If needed for for their properties.
Or is it a combination of both.
And I think the overall, our borrowers are either performing above.
The power above the industry standard industry levels.
The.
Probably the owners.
So I.
I think it's.
Certainly I think.
The early on a piece of it.
The programs have helped and then also.
Most recently.
The programs debt.
We are planning Corp, as well.
That will help them as well.
Got it and then the last one is on the corporate Korea initially.
Initiatives, thanks for the detail around the loans and deposits I was curious are these.
Mostly in your existing your southern California market or are they you know on a national basis that you're.
Able to get some of these loans and deposits pretty much wherever there's a Korean domiciled company, you're kind of targeting them regardless of their location.
So it out there of corporate Korea companies are all over the United States, particularly the automobile sectors are in.
George you on Alabama area.
Pretty much.
In terms of of corporate rate of companies they are.
In a major U.
The us cities or states.
Yeah.
I see sort of this 10% of loans and 8% of deposits that you guys have it it is kind of.
Across the U S is okay.
Correct.
Yeah, and then larger contribution is obviously from a.
California and.
Somewhat Texas area excess Georgia area.
Yeah.
It's the.
Pretty much of that May happen.
Okay.
Got it thanks very much.
Yeah.
Our next call is Kelly Motta with K B W.
Hi, I I got on the bounce off the call. So I apologize if this was on.
Asked during that time, but I was wondering if on unexpected. If this is a good run rate to kind of build off of or if there's any.
Puts or takes in.
The next year that we should keep in mind when modeling.
So with.
With respect to the fourth quarter and I guess the same for the third quarter. When you look at our non interest expenses, particularly before the effects of.
Oh are we owe and repossessed personal property and some of the other level.
Onetime ideas.
Run rate is probably about right.
And then as you kind of played out over quarters of course first quarter, we always get the sort.
The bump because of payroll taxes.
And then you just have general inflationary notions, which you could model it maybe 2% to 3%.
Yeah.
Great. Thank you very much.
Yeah.
And our next and final question is with Gary Tenner Who's a day.
The a D a davidson.
Alright, thanks for the follow up.
I apologize if you had mentioned this but in terms of the.
Mortgage products that you were talking about other than the mortgage warehouse or the other products going to be completely portfolio of products or is there going to be any sort of gain on sale component or exit.
I expect it to develop the most.
I think initially with the portfolio.
Towards the assets.
And then later on we May consider.
Selling them.
King.
Okay. Thank you.
Yes.
Yes.
Okay.
All right, ladies and gentlemen that concludes our question and answer session on now lets turn the call back over to management for closing remarks.
Thank you for listening the Hanmi financials fourth quarter on full year 2020 results conference call. We look forward to speaking with you again next quarter.
Yeah.
Alright. Thank you again, ladies and gentlemen. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great evening.