Hanmi Financial (HAFC) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $15.1 million ($0.50 per diluted share), down from $17.7 million in Q1, mainly due to higher credit loss expense, but up from $14.5 million year-over-year, driven by higher net interest income.

• Preprovision net revenues rose 3.7% sequentially, with net interest income and noninterest income both increasing.

• Loans receivable grew to $6.31 billion, and deposits increased to $6.73 billion, with noninterest-bearing deposits at 31.3% of total.

• Asset quality improved significantly, with criticized loans dropping 71.8% and nonaccrual loans down 26.8% from Q1.

• Capital ratios remained strong; tangible common equity to tangible assets at 9.58%, CET1 at 12.12%.

Financial highlights

• Net interest income was $57.1 million, up 3.7% from Q1 and $8.5 million year-over-year; net interest margin rose to 3.07%.

• Noninterest income increased 4.5% to $8.1 million, mainly from higher SBA loan sales and bank-owned life insurance income.

• Noninterest expense rose 3.9% to $36.3 million, mainly due to higher salaries and operating expenses.

• Allowance for credit losses was $66.8 million (1.06% of loans), with nonaccrual loans at $26.0 million (0.41% of loans).

• Net charge-offs were $11.4 million for Q2, including an $8.6 million CRE loan charge-off.

Outlook and guidance

• Management expects continued focus on stable earnings, capital protection, and prudent capital management, with ongoing monitoring of interest rate and credit risk.

• Loan growth is expected in the low to mid-single-digit range for the year, with a strong pipeline for the second half.

• SBA production target increased to $40–45 million per quarter for H2 2025.

• Net interest margin expected to continue increasing, but at a slower pace.

• Expenses anticipated to remain stable, with some seasonal variation.