Hanmi Financial (HAFC) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $14.5 million ($0.48 per diluted share), down 4.7% from the prior quarter and 29.9% year-over-year, mainly due to lower net interest income and higher expenses.

• Return on average assets was 0.77% and return on average equity was 7.50%, both down sequentially and year-over-year.

• Loan production increased 17% quarter-over-quarter, with growth in SBA and C&I segments and new customer acquisition.

• Asset quality remained strong, with criticized loans down over 17% and net charge-offs low at 0.12% of average loans annualized.

• Tangible book value per share increased to $22.99, supported by disciplined capital management.

Financial highlights

• Net interest income was $48.6 million, down 4% from Q1 and 12.3% year-over-year, mainly due to higher deposit costs.

• Net interest margin declined 9 bps to 2.69%, showing signs of stabilization in June.

• Noninterest income reached $8.1 million, up 4.2% sequentially and 1.5% year-over-year, aided by gains from loan sales.

• Noninterest expense was $35.3 million, down 3.2% sequentially but up 2.9% year-over-year, mainly due to branch consolidation and professional fees.

• Loans receivable were $6.18 billion; deposits totaled $6.33 billion, down 0.7% from the prior quarter.

Outlook and guidance

• Management expects continued margin pressure from elevated funding costs and competition, but aims for low to mid-single-digit annual loan growth if payoffs normalize.

• Focus remains on disciplined expense management, operational efficiencies, and maintaining strong capital and liquidity.

• Strategic technology investments and geographic expansion, including a new Atlanta branch, are expected to support growth.