Company Overview - Hanmi Financial Corporation is the holding company for Hanmi Bank, headquartered in Los Angeles, California, and operates 32 full-service branches across multiple states including Georgia [4] - The Duluth branch is Hanmi's first full-service branch in Georgia, located less than 30 miles from Atlanta [2] Economic Context - Georgia is a significant hub for Korean business investment, with Korean companies announcing over $10 billion in new investments and creating more than 12,600 jobs in fiscal year 2023 [2] - Total trade between Georgia and Korea reached $17.5 billion last year, highlighting the strong economic partnership [2] Branch Services and Community Engagement - The Duluth branch offers a comprehensive range of personal and business banking services, including checking and savings accounts, commercial lending, and SBA loans [3] - The company aims to support local businesses and individuals, contributing to the economic vitality of the region through a relationship-based banking model [3] Leadership Statements - Bonnie Lee, President and CEO of Hanmi Financial Corporation, emphasized the importance of the expansion in Georgia as a step in the company's growth plans and expressed excitement about being part of the Duluth community [3]

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited statements show asset growth to $7.73 billion and a net income increase to $17.7 million [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $7.73 billion, driven by increases in net loans and total deposits Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Assets | $7,729,035 | $7,677,925 | | Loans receivable, net | $6,211,592 | $6,181,230 | | Securities available for sale | $907,011 | $905,798 | | **Liabilities & Equity** | | | | Total Deposits | $6,619,475 | $6,435,776 | | Borrowings | $117,500 | $262,500 | | Total Stockholders' Equity | $751,485 | $732,174 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2025 net income rose to $17.7 million, driven by higher net interest income and lower noninterest expenses Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $55,092 | $50,655 | | Credit Loss Expense | $2,721 | $227 | | Noninterest Income | $7,726 | $7,733 | | Noninterest Expense | $34,984 | $36,445 | | Net Income | $17,672 | $15,164 | | Diluted EPS | $0.58 | $0.50 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including a new methodology for estimating the allowance for credit losses (ACL) - Effective January 1, 2025, the Company changed its methodology for estimating expected credit losses on its loan portfolio from a Probability of Default / Loss Given Default (PD/LGD) model to a **historical loss rate approach**[24](index=24&type=chunk)[25](index=25&type=chunk) - The company and its subsidiary bank **exceeded all minimum regulatory capital requirements** to be considered 'well capitalized' as of March 31, 2025[83](index=83&type=chunk)[86](index=86&type=chunk) Securities Available for Sale (in thousands) | Security Type | Fair Value (Mar 31, 2025) | Fair Value (Dec 31, 2024) | | :--- | :--- | :--- | | U.S. government agency and sponsored agency obligations | $752,823 | $751,860 | | U.S. Treasury securities | $89,631 | $88,929 | | Municipal bonds-tax exempt | $64,557 | $65,009 | | **Total** | **$907,011** | **$905,798** | Loan Portfolio Composition (in thousands) | Loan Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate loans | $4,955,187 | $4,900,924 | | Commercial and industrial loans | $854,406 | $863,431 | | Equipment financing agreements | $472,596 | $487,022 | | **Total Loans Receivable** | **$6,282,189** | **$6,251,377** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis highlights a 16.4% net income increase, expanded net interest margin, and a rise in nonperforming loans - Net income for Q1 2025 was **$17.7 million**, up from $15.2 million for Q1 2024, driven by higher net interest income and lower noninterest expense[177](index=177&type=chunk) - **Nonperforming assets increased significantly to $35.7 million** (0.46% of total assets), primarily due to a $20.0 million commercial real estate office loan being designated as nonaccrual[212](index=212&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - The company adopted a new Allowance for Credit Losses (ACL) methodology, transitioning to a **historical loss rate approach adjusted for economic forecasts** from Moody's[160](index=160&type=chunk)[224](index=224&type=chunk)[228](index=228&type=chunk) Key Performance Ratios | Ratio | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Return on average assets | 0.94% | 0.81% | | Return on average stockholders' equity | 8.92% | 7.90% | | Net interest margin (taxable equivalent) | 3.02% | 2.78% | [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company demonstrates asset sensitivity, with Net Interest Income projected to rise with increasing interest rates Interest Rate Sensitivity Analysis (as of March 31, 2025) | Change in Rates (bps) | 1-12 Month NII % Change | EVE % Change | | :--- | :--- | :--- | | +300 | 8.30% | 10.31% | | +200 | 5.52% | 7.75% | | +100 | 2.98% | 4.83% | | -100 | (3.57%) | (7.68%) | | -200 | (7.23%) | (17.79%) | | -300 | (10.48%) | (29.75%) | [Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2025[258](index=258&type=chunk) - **No material changes in internal control over financial reporting** occurred during the quarter, and the change in CECL model methodology did not impact these controls[259](index=259&type=chunk) [Part II – Other Information](index=61&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) Routine litigation is not expected to have a material adverse impact on the company's financial condition - Hanmi Financial and its subsidiaries are involved in routine litigation, which management believes **will not have a material adverse financial impact**[262](index=262&type=chunk) [Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors disclosed in the 2024 Annual Report - **No material changes in risk factors** have occurred since the company's 2024 Annual Report on Form 10-K[263](index=263&type=chunk) [Issuer Purchases of Equity Securities](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased 50,000 shares in Q1 2025, with 1.18 million shares remaining under the buyback program - As of March 31, 2025, **1,180,500 shares remained available for future purchases** under the company's stock repurchase program[264](index=264&type=chunk) Common Stock Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 1-31, 2025 | 50,000 | $22.49 | | **Total Q1 2025** | **50,000** | **$22.49** | [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) Filed exhibits include amendments to executive employment agreements and required officer certifications - Filed exhibits include amendments to employment agreements for Bonita I. Lee and Romolo C. Santarosa, as well as **CEO and CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906[269](index=269&type=chunk)

Core Insights - Hanmi Financial Corporation will participate in the D.A. Davidson 27th Annual Financial Institutions Conference on May 6-7, 2025, in Scottsdale, AZ [1] - Bonnie Lee, President and CEO, and Ron Santarosa, CFO, will conduct one-on-one and small group meetings during the conference [1] Company Overview - Hanmi Financial Corporation is headquartered in Los Angeles, California, and owns Hanmi Bank, which operates 32 full-service branches, five loan production offices, and three loan centers across multiple states [3] - The bank serves multi-ethnic communities and specializes in real estate, commercial, SBA, and trade finance lending to small and middle market businesses [3] Investor Relations - A copy of the presentation for institutional investors will be available in the Investor Relations section of the company's website [2] - Investor contacts include Ron Santarosa, CFO, and Lisa Fortuna from Financial Profiles, Inc. [4]

Group 1 - Hanmi Financial Corporation released its 2024 annual letter to shareholders titled "Successfully Navigating a Dynamic Market Environment" authored by President and CEO Bonnie Lee [1] - Hanmi Financial Corporation is headquartered in Los Angeles, California, and owns Hanmi Bank, which operates 32 full-service branches and additional loan production offices and centers across multiple states [2] - Hanmi Bank specializes in lending for real estate, commercial, SBA, and trade finance, targeting small and middle market businesses [2] Group 2 - The company serves multi-ethnic communities through its extensive branch network in states including California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia [2] - Investor contacts for Hanmi Financial Corporation include Romolo (Ron) Santarosa, Senior Executive Vice President & CFO, and Lisa Fortuna from Financial Profiles, Inc. [3]

Company Overview - Hanmi Financial is headquartered in Los Angeles and has experienced a price change of -3.73% this year [3] - The company currently pays a dividend of $0.27 per share, resulting in a dividend yield of 4.75%, which is higher than the Banks - West industry's yield of 3.33% and the S&P 500's yield of 1.65% [3] Dividend Performance - The current annualized dividend of Hanmi Financial is $1.08, reflecting an 8% increase from the previous year [4] - Over the past five years, the company has increased its dividend three times year-over-year, with an average annual increase of 27.60% [4] - The company's payout ratio stands at 51%, indicating that it paid out 51% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, Hanmi Financial anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 projected at $2.55 per share, representing a year-over-year earnings growth rate of 24.39% [5] Investment Considerations - Hanmi Financial is viewed as a compelling investment opportunity due to its attractive dividend and strong Zacks Rank of 2 (Buy) [7]

In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law. Investor Contacts: LOS ANGELES, April 24, 2025 (GLOB ...

Core Insights - Hanmi Financial reported revenue of $62.82 million for the quarter ended March 2025, reflecting a year-over-year increase of 7.6% [1] - The earnings per share (EPS) for the quarter was $0.58, up from $0.50 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $61.7 million by 1.81%, while the EPS also surpassed the consensus estimate of $0.57 by 1.75% [1] Financial Metrics - The net interest margin for Hanmi Financial was reported at 3%, matching the average estimate from two analysts [4] - The efficiency ratio was 55.7%, better than the average estimate of 57.9% from two analysts [4] - Total non-interest income was $7.73 million, exceeding the estimated $7.37 million from two analysts [4] Stock Performance - Over the past month, shares of Hanmi Financial have returned -5.9%, compared to a -8.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Hanmi Financial (HAFC) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.50 per share a year ago. These figures are adjusted for ...

Financial Data and Key Metrics Changes - Net income for the first quarter of 2025 was $17.7 million, or $0.58 per diluted share, representing an increase of 17% and 16% respectively compared to the first quarter of 2024 [7] - Return on average assets was 0.94% and return on average equity was 8.92% [7] - Net interest margin expanded by 11 basis points to 3.02%, driven by lower funding costs [7][22] - Total loans grew to $6.28 billion, a 0.5% increase on a linked quarter basis [8] - Non-interest income increased by 5% primarily due to the sale of SBA loans [8][23] - Deposits grew by 3% in the first quarter, reflecting new commercial accounts and contributions from new branches [8][20] Business Line Data and Key Metrics Changes - Loan production for the first quarter was $346 million, up 2% from the prior quarter [15] - Residential mortgage loan production increased by 37% to $55 million due to higher demand [19] - SBA loan production increased to $55 million, exceeding the quarterly target range [17] - C&I production decreased by 30% to $42 million, while total commitments for commercial lines of credit increased by 6% [18] - USKC loan balances were $932 million, down 0.5% from the prior quarter [20] Market Data and Key Metrics Changes - Non-interest bearing demand deposits increased by 7% over the past year, representing 31.2% of total deposits [9] - The provision for credit loss expense increased due to a CRE loan that was downgraded to non-performing status [21] - The allowance for credit losses as a percentage of loans remained stable at 1.12% [11] Company Strategy and Development Direction - The company aims to generate loan growth in the low to mid-single digit range while focusing on expanding its C&I portfolio [12] - The strategy includes diversifying and growing the loan and deposit portfolio while maintaining strong asset quality [10][26] - The company is expanding its geographic footprint, with a new branch opened in Duluth, Georgia, targeting the Korean community [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the current level of economic uncertainty but remains focused on delivering personalized relationship-driven banking [26] - The company is optimistic about its growth strategy and the potential for new relationships, particularly among mid-sized companies [10][12] - Management noted that while the loan pipeline is solid, macroeconomic conditions will be closely monitored [13] Other Important Information - The efficiency ratio improved to 55.69%, the best quarterly performance since Q4 2023 [9] - The company repurchased 50,000 shares at an average price of $22.49 during the first quarter [25] - Tangible book value per share increased by 2.6% to $24.49 [25] Q&A Session Summary Question: How is the pipeline looking and any potential tariff impacts? - The second quarter pipeline appears healthy, but loan demand may soften in the latter half of the year due to tariffs and economic uncertainty. USKC customers are reportedly in a better position than domestic companies [30][31] Question: How should expenses be modeled for the rest of the year? - Anticipated salary and benefits increases of 3% to 4% in Q2, with other expenses expected to behave in line with inflation [33] Question: Should elevated share repurchases be expected given the current stock price? - The Board reviews dividends and share repurchases each quarter, with a history of consistent repurchases over the past quarters [34] Question: Can you provide details on margin and deposit rates? - The average cost of time deposits was 4.1% in March, with expectations for some relief in the second and third quarters [38][40] Question: What is the status of the non-performing loan and its reserve? - The non-performing loan is a syndicated commercial real estate loan, with a reserve of $6.2 million set aside due to a collateral shortfall [44][45] Question: How large is the syndicated loan book as a percentage of the total loan book? - The syndicated loan book totals approximately $255 million, representing a very small percentage of the overall loan portfolio [46][47] Question: What are the expectations for future fee production? - Guidance for quarterly production stands at $87 million, with expectations for solid SBA pipeline performance [57]

Hanmi Financial Corporation (HAFC) Q1 2025 Earnings Conference Call April 22, 2025 05:00 PM ET Company Participants Operator - Conference Call ModeratorBen Brodkowitz - Investor RelationsBonnie Lee - President & Chief Executive OfficerAnthony Kim - Chief Banking OfficerRon Santarosa - Chief Financial Officer Conference Call Participants Gary Tanner - Analyst, DA DavidsonUnknown Analyst - AnalystKelly Moda - Analyst, KBWAdam Butler (on behalf of Matthew Clark) - Analyst, Piper SandlerUnknown Analyst - Analys ...