Core Insights - Hanmi Financial Corporation reported a net income of $21.2 million for Q4 2025, a decrease of 3.7% due to lower noninterest income [1] - The company achieved a full-year net income of $76.1 million, representing a 22% increase year-over-year [5] - The bank's loan production for the full year increased by 36%, driven by investments in banking teams and diversification of the loan portfolio [6][9] Financial Performance - Net interest income rose by 2.9% in Q4, with a net interest margin expansion of six basis points to 3.28% [5][19] - Noninterest income for Q4 was $8.3 million, down from the previous quarter, primarily due to lower gains on mortgage loan sales [20] - Noninterest expenses increased by 4.6% for the year, mainly due to salaries and benefits related to merit increases and new hires [8][21] Loan and Deposit Activities - Loan production in Q4 was $375 million, down 34% from the prior quarter, but annual production remained strong across categories [10][12] - Deposits decreased by 1.3% in Q4, driven by a decline in demand deposits, but overall deposits grew by 3.8% for the year [13][14] - Noninterest-bearing deposits accounted for approximately 30% of total deposits, reflecting the stability of the customer base [14] Strategic Initiatives - The company plans to focus on low to mid-single-digit loan growth in 2026 while diversifying its portfolio [23] - Efforts will continue to deepen existing customer relationships and attract new accounts, particularly emphasizing noninterest-bearing deposits [23][24] - Hanmi aims to maintain disciplined expense management while investing in talent and technology to support long-term growth [24] Asset Quality and Risk Management - Asset quality remains strong, with nonperforming assets at 0.26% of total assets and a healthy allowance for credit losses at 1.07% of total loans [8][22] - The company maintains conservative underwriting standards and active portfolio monitoring to manage credit risk effectively [24]

Financial Data and Key Metrics Changes - Net income for Q4 was $21.2 million, or $0.70 per diluted share, down 3.7% due to lower non-interest income [6] - For the full year 2025, net income reached $76.1 million, or $2.51 per diluted share, an increase of 22% [6] - Net interest income increased by 2.9% to $62.9 million in Q4, with net interest margin expanding by six basis points to 3.28% [14][16] - Return on average assets and return on average equity during Q4 were 1.07% and 10.14%, respectively [6] Business Line Data and Key Metrics Changes - Loan production for the full year increased by 36%, with residential and C&I loan production up 90% and 42%, respectively [7] - Commercial real estate exposure decreased from 63.1% to 61.3% of total loans [8] - Fourth quarter loan production was $375 million, down 34% from the prior quarter [10] - SBA loan production remained consistent at approximately $44 million in Q4 [11] Market Data and Key Metrics Changes - Deposits grew by 3.8% in 2025, with non-interest-bearing deposits representing approximately 30% of total deposits [8] - In Q4, deposits decreased by 1.3% from the prior quarter, driven by a decline in demand deposits [12] - USKC loan balance of $862 million represented approximately 13% of the total loan portfolio [12] Company Strategy and Development Direction - The company aims for low to mid-single-digit loan growth in 2026, focusing on diversifying the portfolio [19] - Plans to grow deposits to support loan growth while maintaining a stable funding mix [19] - Commitment to disciplined expense management and maintaining strong asset quality through conservative underwriting standards [20] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their relationship-based banking model and the strength of their operational performance [4] - The company believes it entered 2026 in a strong position to build on momentum and create value for shareholders [20] Other Important Information - Non-performing assets as a percentage of total assets and allowance for credit losses as a percentage of total loans remained healthy at 0.26% and 1.07%, respectively [8] - The efficiency ratio improved to 54.7% from 60.3% the previous year [9] Q&A Session Summary Question: Situation regarding hospitality credit downgraded to Special Mention - Management indicated that the loan is under proactive monitoring and does not foresee loss probabilities due to a strong sponsor and liquidity [22] Question: Expense outlook for the year - Management expects mid-single-digit expense growth, with some ongoing costs related to OREO [25] Question: CD repricing schedule - Approximately $1.8 billion in CDs maturing in the first half of the year, with expectations to reprice at lower rates [26] Question: Buyback strategy - The board evaluates capital return quarterly, and share repurchases will be considered based on market conditions [27] Question: Competition in the CD market - Management noted intense competition for CDs, with some competitors offering higher rates [32][33] Question: Expense seasonality and jumping-off point for Q1 - Management highlighted predictable seasonal expenses and indicated that Q1 may see a mix of increased payroll and reduced advertising costs [38]

Financial Data and Key Metrics Changes - Net income for Q4 was $21.2 million, or $0.70 per diluted share, down 3.7% due to lower non-interest income [6] - For the full year 2025, net income reached $76.1 million, or $2.51 per diluted share, an increase of 22% [6] - Net interest income increased by 2.9% to $62.9 million in Q4, with net interest margin expanding by six basis points to 3.28% [14][16] - Return on average assets and return on average equity during Q4 were 1.07% and 10.14%, respectively [6] Business Line Data and Key Metrics Changes - Loan production for the full year increased by 36%, with residential and C&I loan production up 90% and 42%, respectively [7] - Commercial real estate exposure decreased from 63.1% to 61.3% of total loans [8] - Deposits grew by 3.8% in 2025, maintaining a healthy mix of non-interest-bearing deposits at approximately 30% of total deposits [8] Market Data and Key Metrics Changes - Deposits decreased by 1.3% in Q4, driven by a decline in demand deposits, money market, and savings [12] - USKC loan balance of $862 million represented approximately 13% of the total loan portfolio [12] - The company opened a representative office in Seoul, South Korea, to strengthen relationships and support customers expanding into the U.S. market [13] Company Strategy and Development Direction - The company expects to generate low to mid-single-digit loan growth while further diversifying the portfolio [19] - Focus on growing deposits to support loan growth and maintaining a stable funding mix [19] - Commitment to disciplined expense management while investing selectively in talent and technology [20] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their relationship-based banking model and the strength of their operational performance [4] - The company believes it entered 2026 in a strong position to build on momentum and create meaningful value for shareholders [20] Other Important Information - Non-performing assets as a percentage of total assets and allowance for credit losses as a percentage of total loans remained healthy at 0.26% and 1.07%, respectively [8] - The efficiency ratio improved to 54.7% from 60.3% the previous year [9] Q&A Session Summary Question: Can you provide color on the hospitality credit that was downgraded to Special Mention? - Management indicated that the loan is a senior loan with a strong sponsor undergoing a Property Improvement Plan, and they do not foresee any loss probabilities [22] Question: Thoughts around the growth of expenses and OREO costs? - Management noted that OREO costs might continue for a couple of quarters but are not indicative of ongoing run rates [24] Question: What is the outlook for mid-single-digit expense growth? - Management confirmed that mid-single-digit expense growth is a fair expectation based on previous trends [25] Question: Can you remind us about the CD repricing schedule? - Management provided details on maturing CDs and expected repricing rates, indicating a potential benefit to lower deposit costs [26] Question: Why not be more aggressive on the buyback? - Management stated that the board evaluates capital returns quarterly and will address share repurchases based on market conditions [27] Question: Comments on competition within the CD book? - Management acknowledged intense competition for CDs, with some competitors offering higher rates [32][33] Question: How should we think about the jumping-off point for expenses from Q4? - Management discussed predictable seasonal events affecting expenses and indicated a need for further analysis [38]

Financial Data and Key Metrics Changes - Net income for Q4 2025 was $21.2 million, or $0.70 per diluted share, down 3.7% due to lower non-interest income [5] - For the full year 2025, net income reached $76.1 million, or $2.51 per diluted share, an increase of 22% [5] - Net interest income increased by 2.9% in Q4, with net interest margin expanding by six basis points to 3.28% [5][15] - Return on average assets and return on average equity during Q4 were 1.07% and 10.14%, respectively [5] Business Line Data and Key Metrics Changes - Loan production for the full year increased by 36%, with residential and C&I loan production up 90% and 42%, respectively [7] - Commercial real estate exposure decreased from 63.1% to 61.3% of total loans [8] - Deposits grew by 3.8% in 2025, maintaining a healthy mix of non-interest-bearing deposits at approximately 30% of total deposits [8] Market Data and Key Metrics Changes - Fourth quarter loan production was $375 million, down 34% from the prior quarter [10] - Deposits decreased by 1.3% in Q4, driven by a decline in demand deposits, partially offset by an increase in time deposits [12] - USKC loan balance of $862 million represented approximately 13% of the total loan portfolio [12] Company Strategy and Development Direction - The company aims for low to mid-single-digit loan growth in 2026, focusing on further diversifying the portfolio [20] - Plans to grow deposits to support loan growth while maintaining a stable funding mix [20] - Commitment to disciplined expense management and maintaining strong asset quality through conservative underwriting standards [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their relationship-based banking model and the strength of their operational performance [4] - The company believes it entered 2026 in a strong position to build on momentum and create value for shareholders [22] Other Important Information - Non-performing assets as a percentage of total assets and allowance for credit losses as a percentage of total loans remained healthy at 0.26% and 1.07%, respectively [8] - The efficiency ratio improved to 54.7% from 60.3% the previous year [9] Q&A Session Summary Question: Can you provide details on the hospitality credit that was downgraded to Special Mention? - Management indicated that the loan is a senior loan with a strong sponsor undergoing a Property Improvement Plan, and they do not foresee any loss probabilities [24] Question: What is the outlook for expenses this year? - Management expects mid-single-digit expense growth, with some ongoing costs related to OREO properties [25][26] Question: What is the CD repricing schedule for the first and second quarters? - Approximately $1.8 billion in CDs maturing at high threes and low fours in the first half of the year, with expectations to reprice at around 3.5% to 3.7% [27] Question: Why not be more aggressive on the buyback? - The board evaluates capital return quarterly, and share prices have been above tangible book value, affecting buyback decisions [28] Question: Can you comment on competition within the CD market? - Competition remains intense, with some banks offering higher rates, affecting CD retention rates [31][32]

NASDAQ | HAFC 4 Q 2 5 E a r n i n g s S u p p l e m e n t a l P r e s e n t a t i o n January 27, 2026 California | Colorado | Georgia | Illinois | New Jersey | New York | Texas | Virginia | Washington | | 4Q25 PERFORMANCE RESULTS | 5 – | 21 | | --- | --- | --- | --- | | TABLE OF | LOAN PORTFOLIO DETAILS | 22 – | 31 | | CONTENTS | | | | | | 4Q25 FINANCIAL SUMMARY | 32 – | 32 | | | NON-GAAP RECONCILIATION | 33 – | 34 | 2 FORWARD-LOOKING STATEMENTS Hanmi Financial Corporation (the "Company") cautions investor ...

Financial Performance - Net income for Q4 2025 was $21.2 million, or $0.70 per diluted share, a decrease of 3.7% from Q3 2025[3] - For the full year 2025, net income increased to $76.1 million, or $2.51 per diluted share, up 22% from $62.2 million in 2024[4] - The effective tax rate for Q4 2025 was 29.5%, with a provision for income taxes of $8.9 million, compared to $9.4 million in Q3 2025[29] - Basic earnings per share for the twelve months ended December 31, 2025, was $2.53, up from $2.06 in 2024[62] - Income before tax grew by 21.8% to $107,927,000 from $88,605,000[61] Income and Expenses - Net interest income for Q4 2025 increased by 2.9% to $62.9 million, driven by lower interest expense on deposits[11] - Noninterest income for Q4-2025 was $8,299 thousand, a decrease of 16.0% from Q3-2025, primarily due to the absence of death benefit claims and a decline in gains from residential mortgage loans[24] - Full-year 2025 noninterest income totaled $34.0 million, an increase of 7.6% from $31.6 million in 2024, driven by higher gains on SBA loans and bank-owned life insurance income[25] - Noninterest expense for Q4-2025 increased to $38.6 million, a rise of 3.5% from Q3-2025, due to higher advertising, personnel costs, and professional fees[26] - Full-year 2025 noninterest expense was $147.8 million, an increase of 4.6% from $141.3 million in 2024, primarily due to higher salaries and benefits[28] Asset and Loan Management - Total assets increased to $7.87 billion as of December 31, 2025, reflecting a 0.2% rise from $7.86 billion at September 30, 2025, driven by a $35.1 million increase in loans receivable[30] - Loans receivable rose to $6.56 billion, a 0.5% increase from the previous quarter, with loan production at $374.8 million[8] - Average interest-earning assets rose to $7,620,166 thousand, reflecting a 1.0% increase from Q3-2025 and a 4.1% increase from Q4-2024[18] - Loans receivable increased to $6,456,239 thousand, up 2.4% from Q3-2025 and 5.8% from Q4-2024[18] - New loan production for Q4 2025 was $374.8 million, with a weighted average interest rate of 6.90%, while payoffs totaled $123.1 million at an average rate of 6.46%[32] Capital and Equity - Stockholders' equity rose to $796.4 million, an increase of $16.8 million from $779.6 million at September 30, 2025, including net income of $13.1 million for Q4[36] - Hanmi's preliminary common equity tier 1 capital ratio was 12.05% as of December 31, 2025, up from 12.00% in the previous quarter[37] - Total risk-based capital ratio for Hanmi was 15.06% at the end of Q4 2025, slightly increasing from 15.05% in Q3 2025[38] - Tangible common equity per common share increased to $26.27 in December 2025 from $25.64 in September 2025[70] - Stockholders' equity to assets ratio rose to 10.12% in December 2025 from 9.92% in September 2025[70] Credit Quality - Nonperforming loans represented 0.28% of total loans, showing an improvement of two basis points from the prior quarter[8] - Criticized loans increased to $97.0 million, or 1.48% of loans, compared to $45.4 million, or 0.69% in the prior quarter[40] - Nonperforming loans decreased to $18.1 million, or 0.28% of loans, down from $19.4 million, or 0.30% in the previous quarter[41] - The allowance for credit losses was $69.9 million at December 31, 2025, stable compared to $69.8 million at September 30, 2025[45] - Credit loss expense for Q4-2025 was $1.9 million, down from $2.1 million in Q3-2025, with $1.7 million attributed to loan losses[22] Market and Operational Efficiency - The efficiency ratio for Q4-2025 was 54.95%, compared to 52.65% in Q3-2025, indicating a decline in operational efficiency[27] - The average yield on loans receivable decreased to 5.94% in Q4-2025 from 6.03% in Q3-2025[19] - The cost of deposits decreased to 2.37% in Q4-2025 from 2.51% in Q3-2025, reflecting improved funding costs[20] - Total interest and dividend income increased by 3.0% to $410,928,000 from $398,783,000[61] - Interest expense decreased by 10.9% to $174,738,000 from $196,009,000[61]

Core Insights - Hanmi Financial Corporation reported a net income of $21.2 million for Q4 2025, a decrease from $22.1 million in Q3 2025, with earnings per diluted share at $0.70 compared to $0.73 in the previous quarter [2][7] - For the full year 2025, net income increased to $76.1 million, or $2.51 per diluted share, up from $62.2 million, or $2.05 per diluted share, in 2024, reflecting a robust growth of 22% [3][4] Financial Performance - The return on average assets for Q4 2025 was 1.07%, down from 1.12% in Q3 2025, while the return on average equity decreased to 10.14% from 10.69% [2][7] - Net interest income for Q4 2025 rose by 2.9% to $62.9 million, driven by lower interest expenses on deposits [10][12] - The net interest margin for Q4 2025 was 3.28%, an increase of six basis points from the previous quarter [12][20] Loan and Deposit Growth - Loans receivable increased to $6.56 billion, a 0.5% rise from the previous quarter, with loan production for Q4 2025 at $374.8 million [7][32] - Total deposits were $6.68 billion, down 1.3% from Q3 2025, with noninterest-bearing demand deposits representing 30.2% of total deposits [7][29] Asset Quality - Nonperforming loans represented 0.28% of total loans, showing an improvement from the previous quarter [7][22] - Credit loss expense for Q4 2025 was $1.9 million, down from $2.1 million in Q3 2025, indicating strong credit quality management [22][23] Noninterest Income - Noninterest income for Q4 2025 was $8.3 million, a decrease of 16.0% from Q3 2025, primarily due to lower income from bank-owned life insurance [24][25] - For the full year 2025, noninterest income increased to $34.0 million, up 7.6% from 2024, driven by higher gains on the sale of SBA loans [25][26] Expense Management - Noninterest expense for Q4 2025 increased by 3.5% to $39.1 million, attributed to higher salaries and professional fees [26][27] - The efficiency ratio for Q4 2025 was 54.95%, compared to 52.65% in Q3 2025, reflecting increased operational costs [26][27]

Company Overview - Hanmi Financial Corporation is headquartered in Los Angeles, California, and owns Hanmi Bank, which serves multi-ethnic communities through a network of 32 full-service branches, five loan production offices, and three loan centers across several states including California, Colorado, Georgia, Illinois, New Jersey, New York, Texas, Virginia, and Washington [3]. Financial Reporting - Hanmi Financial Corporation will report its fourth quarter 2025 financial results after the market close on January 27, 2026 [1]. - A conference call will be hosted by management on the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the results [1]. Investor Access - Investment professionals and shareholders can access the live call on January 27 by dialing 1-877-407-9039 before 2:00 p.m. Pacific Time, using access code "Hanmi Bank" [2]. - The call will also be available for online listening through the investor relations page of Hanmi's website, with a replay accessible approximately one hour after the call [2].

Group 1 - Hanmi Financial Corporation (HAFC) is experiencing significant activity in the options market, particularly with the Jan 16, 2026 $20.00 Put showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Hanmi Financial holds a Zacks Rank 2 (Buy) in the Banks - West industry, which is in the top 12% of the Zacks Industry Rank, with recent analyst activity showing an increase in earnings estimates from 67 cents to 71 cents per share for the current quarter [3] Group 2 - The high implied volatility for Hanmi Financial may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay, hoping the stock does not move as much as expected by expiration [4]

Core Viewpoint - Hanmi Financial (HAFC) is currently identified as a strong value stock, holding a Zacks Rank 2 (Buy) and an A grade in the Value category, indicating its potential for undervaluation in the market [4][8]. Valuation Metrics - HAFC has a P/E ratio of 9.54, which is lower than the industry average of 9.96. Over the past year, its Forward P/E has fluctuated between 7.95 and 11.89, with a median of 9.30 [4]. - The company's P/B ratio stands at 0.99, compared to the industry average of 1.28. In the last 52 weeks, HAFC's P/B has ranged from 0.74 to 1.10, with a median of 0.94 [5]. - HAFC's P/S ratio is 1.92, which is significantly lower than the industry's average of 2.45, indicating a favorable valuation based on sales [6]. - The P/CF ratio for HAFC is 10.15, which is attractive compared to the industry average of 10.97. Its P/CF has varied from 7.18 to 11.16 over the past year, with a median of 9.60 [7]. Investment Outlook - The combination of these valuation metrics suggests that Hanmi Financial is likely undervalued, and its strong earnings outlook further positions it as one of the market's strongest value stocks [8].