Hanmi Financial (HAFC) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $17.7 million ($0.58 per diluted share), up 16% year-over-year and flat sequentially, with returns on average assets at 0.94% and equity at 8.92%.

• Deposits increased 2.9% to $6.62 billion, driven by new commercial accounts, USKC initiative, and branch expansion.

• Loans grew 0.5% to $6.28 billion, with strong production in residential mortgages and SBA lending.

• Tangible book value per share rose to $24.49, aided by lower unrealized losses on securities.

• Asset quality weakened as nonperforming assets rose to $35.7 million, mainly due to a $20 million CRE loan on nonaccrual.

Financial highlights

• Net interest income was $55.1 million, up 3.1% sequentially and 8.8% year-over-year; net interest margin improved to 3.02%.

• Noninterest income increased 5% to $7.7 million, led by higher SBA loan sale gains.

• Noninterest expense was $35.0 million, up 1.3% sequentially; efficiency ratio improved to 55.7%.

• Credit loss expense was $2.7 million, up from $0.2 million in Q1 2024, reflecting higher reserves and net charge-offs.

• Total assets reached $7.73 billion, with stockholders' equity at $751.5 million.

Outlook and guidance

• Management expects continued prudent growth, disciplined expense control, and focus on credit quality amid macroeconomic uncertainty.

• Loan growth targeted in the low to mid-single-digit range, with emphasis on C&I and reduced CRE exposure.

• Margin expansion expected to continue but at a slower pace; deposit repricing relief anticipated in Q2 and Q3.

• Board declared a $0.27 per share quarterly dividend for Q2 2025.