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 including California, Colorado, Georgia, Illinois, New Jersey, New York, Texas, Virginia, and Washington [3] - Hanmi Bank specializes in lending for real estate, commercial, SBA, and trade finance, targeting small and middle market businesses [3] Conference Participation - Hanmi Financial Corporation will participate in the 26th Annual KBW Community Bank Investor Conference on July 29 and 30, 2025, in New York City [1] - Bonnie Lee, President and CEO, along with Ron Santarosa, CFO, will conduct one-on-one and small group meetings during the conference [1] Investor Relations - A copy of the presentation for institutional investors will be available in the Investor Relations section of the company's website [2]

Core Viewpoint - Hanmi Financial reported quarterly earnings of $0.5 per share, missing the Zacks Consensus Estimate of $0.62 per share, representing an earnings surprise of -19.35% [1][2] Financial Performance - The company posted revenues of $65.21 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.29%, compared to year-ago revenues of $56.68 million [2] - Over the last four quarters, Hanmi Financial has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Hanmi Financial shares have increased approximately 9.7% since the beginning of the year, outperforming the S&P 500's gain of 7.2% [3] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.66 on revenues of $66.8 million, and for the current fiscal year, it is $2.54 on revenues of $263 million [7] - The estimate revisions trend for Hanmi Financial was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Zacks Industry Rank for Banks - West is currently in the top 28% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Financial Data and Key Metrics Changes - Net income for Q2 2025 was $15.1 million or $0.50 per diluted share, down from $17.7 million and $0.58 in Q1 2025, primarily due to increased credit loss expense [6][7] - Return on average assets was 0.79% and return on average equity was 7.8% [7] - Pre-provision net revenues grew 3.7% or $1 million, indicating strength in core business [7] - Net interest margin increased by five basis points to 3.07%, driven by lower funding costs [7][22] Business Line Data and Key Metrics Changes - Total loans increased by $6.31 billion, or 0.4% on a linked quarter basis, with higher contributions from commercial and industrial (C&I) and residential mortgage loans [8] - C&I production increased by $11 million or 26% to $503 million, while residential mortgage loan production rose by 52% to $84 million [18] - SBA loan production decreased to $47 million but still exceeded the high end of the target range, with year-to-date production up 20% [16][18] Market Data and Key Metrics Changes - Non-interest bearing demand deposits increased by over 7% from 2024, representing 31.3% of total deposits [9] - USKC loan and deposit portfolios remained steady, with USKC loans at $842 million, approximately 13% of total loans [19] Company Strategy and Development Direction - The company aims to drive loan growth in the low to mid single-digit range, focusing on expanding SBA activities and C&I portfolios while reducing exposure to commercial real estate (CRE) [11][28] - The strategy includes strengthening relationships in select deposit-rich markets and driving growth in key regions [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth potential despite current economic conditions, emphasizing proactive portfolio management and strong asset quality [10][11][28] - The company is well-positioned for growth, leveraging strong liquidity and maintaining robust credit metrics [11] Other Important Information - Asset quality improved significantly, with criticized loans decreasing by 72% and non-accruals down 27% [21] - The allowance for credit losses stood at 1.06% of loans at the end of Q2 2025 [26] Q&A Session Summary Question: Loan growth expectations for the second half of the year - Management indicated a strong pipeline for new loans, suggesting potential to reach mid-single-digit growth [31][32] Question: Insights on deposit costs and time deposit repricing - Average interest-bearing deposit costs were 3.64%, with expectations for net interest margin to continue increasing, albeit at a slowing rate [35][37] Question: Credit quality and criticized asset levels - Management noted significant reductions in criticized assets due to proactive management, with confidence in the overall credit quality [39][41] Question: Future C&I production and loan growth - C&I production is expected to drive loan growth in the latter half of the year, supported by a strong pipeline [47][49] Question: Plans for share buybacks and expenses - Management indicated that buyback decisions are made quarterly, with expectations for expenses to remain stable [50][51]

Financial Data and Key Metrics Changes - Net income for Q2 2025 was $15.1 million or $0.50 per diluted share, down from $17.7 million and $0.58 in Q1 2025, primarily due to an increase in credit loss expense [5][6] - Return on average assets was 0.79% and return on average equity was 7.8% [6] - Pre-provision net revenues grew 3.7% or $1 million, indicating strength in core business [6] - Net interest margin increased by five basis points to 3.07%, driven by lower funding costs [6][22] - Total loans increased by $6.31 billion, or 0.4% on a linked quarter basis, with a 1.6% annualized growth [7] Business Line Data and Key Metrics Changes - Loan production for Q2 was $330 million, down 4.7% from the prior quarter, with a weighted average interest rate of 7.1% [14] - Commercial real estate (CRE) production was $112 million, down 24% from the prior quarter [15] - SBA loan production decreased to $47 million but exceeded the high end of the quarterly target range [15] - C&I production increased by 26% to $53 million, attributed to new talent and growth efforts [17] - Residential mortgage loan production was $84 million, up 52% from the previous quarter [18] Market Data and Key Metrics Changes - Non-interest bearing demand deposits increased by over 7% from 2024, representing 31.3% of total deposits [9] - USKC loan and deposit portfolios remained steady, with USKC loans at $842 million, approximately 13% of the total loan portfolio [19] - Deposits increased by 1.7% in Q2, driven by new commercial accounts and contributions from new branches [20] Company Strategy and Development Direction - The company aims to drive loan growth in the low to mid single-digit range, focusing on expanding SBA activities and C&I portfolios while reducing exposure to CRE [11] - The strategy includes strengthening relationships in select deposit-rich markets and driving growth in key regions [28] - The company is optimistic about long-term growth potential despite current economic conditions [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute effectively and deliver sustained profitable growth [28] - The economic outlook remains dynamic, with many USKC customers taking a wait-and-see approach regarding tariffs and their impact on the economy [10] - The company is well-positioned for growth, leveraging strong liquidity and maintaining robust credit metrics [11] Other Important Information - Asset quality improved significantly, with criticized loans decreasing by 72% and non-accruals decreasing by 27% [21] - The allowance for credit losses stood at 1.06% of loans at the end of Q2 [26] - The company repurchased 70,000 shares of common stock at an average price of $23.26, totaling $1.6 million [27] Q&A Session Summary Question: Loan growth expectations for the second half of the year - Management indicated that the second half typically sees higher production, with a strong pipeline of new loans already established [32] Question: Insights on margin and deposit costs - Average interest-bearing deposit costs were 3.64% for the quarter, with expectations for net interest margin to continue increasing, albeit at a slowing rate [35][37] Question: Credit quality and criticized assets - Management noted significant success in resolving loans in the special mention category, contributing to improved asset quality metrics [41] Question: C&I production driving loan growth - C&I production is expected to drive loan growth in the second half, supported by a higher pipeline and ongoing efforts to target more C&I opportunities [49] Question: Plans for additional hires in C&I and SBA - Major hires were completed in the first half, and the number of new relationship managers is expected to remain steady [60]

Financial Performance - Net income for the second quarter was $15.1 million, a decrease of 14.5% compared to the previous quarter, primarily due to credit loss expense[8, 33] - Preprovision net revenues increased by 3.7%, or $1 million, driven by a 3.7% increase in net interest income and a 4.5% increase in noninterest income[9] - Net interest margin was 3.07%, up from 3.02% in the first quarter[8, 24] - Noninterest expense increased by 4% to $36.3 million, mainly due to a $1.1 million increase in salaries and benefits[43] Loan and Deposit Portfolio - Loan receivables reached $6.31 billion, a slight increase of 0.4% from the end of the first quarter[9] - Deposits totaled $6.73 billion, up 1.7% from the previous quarter, with noninterest-bearing deposits accounting for 31.3% of total deposits[9, 19] - Loan production for the second quarter was $329.6 million, with a weighted average interest rate of 7.10%[9] - The securities portfolio was $994.6 million, representing 13% of assets, with an unrealized loss position of $76.5 million[71] Asset Quality and Capital - Criticized loans decreased significantly by 71.8% to 0.74% of total loans, reflecting $85.3 million in loan upgrades, a $20 million loan payment, and an $8.6 million loan charge-off[9] - Nonaccrual loans fell by 26.8% to 0.41% of total loans, and loan delinquencies declined to 0.17% of total loans[9] - The ratio of tangible common equity to tangible assets was 9.58%, and the common equity tier 1 capital ratio was 12.12%, remaining essentially unchanged from the first quarter[9]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Hanmi Financial Corporation's Q2 2025 performance, highlighting key financial metrics and strategic achievements [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Hanmi Financial Corporation reported solid Q2 2025 performance, marked by an expanded net interest margin and growth in preprovision net revenue, primarily due to lower funding costs - Net interest margin expanded to **3.07%**[4](index=4&type=chunk) - Preprovision net revenue grew by **3.7%**, driven by lower funding costs[4](index=4&type=chunk) - Loans grew **1.6%** on an annualized basis, with healthy C&I and residential mortgage loan production[4](index=4&type=chunk) - Deposits increased by **1.7%** for the quarter, with noninterest-bearing demand deposits accounting for over **30%** of total deposits[4](index=4&type=chunk) - Asset quality remained excellent with significant improvement; criticized loans, nonaccrual loans, and delinquent loans all declined notably[4](index=4&type=chunk) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Hanmi's second quarter 2025 saw a decrease in net income to $15.1 million, or $0.50 per diluted share, primarily due to increased credit loss expense, despite growth in preprovision net revenue, expanded net interest margin, and improved asset quality | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------------- | :------ | :------ | :------ | :--------------------- | :--------------------- | | Net income (in thousands) | $15,117 | $17,672 | $14,451 | $(2,555) | $666 | | Net income per diluted common share | $0.50 | $0.58 | $0.48 | $(0.08) | $0.02 | | Return on average assets | 0.79% | 0.94% | 0.77% | -0.15 | 0.02 | | Return on average stockholders' equity | 7.48% | 8.92% | 7.50% | -1.44 | -0.02 | | Net interest margin | 3.07% | 3.02% | 2.69% | 0.05 | 0.38 | | Efficiency ratio | 55.74% | 55.69% | 62.24% | 0.05 | -6.50 | | Tangible common equity to tangible assets | 9.58% | 9.59% | 9.19% | -0.01 | 0.39 | | Tangible common equity per common share | $24.91 | $24.49 | $22.99 | 0.42 | 1.92 | - Preprovision net revenue grew **3.7%**, or **$1.0 million**, driven by a **3.7%** increase in net interest income, a five basis point increase in net interest margin, and a **4.5%** increase in noninterest income[9](index=9&type=chunk) - Asset quality improved significantly: criticized loans dropped **71.8%** to **0.74%** of total loans, nonaccrual loans fell **26.8%** to **0.41%** of total loans, and loan delinquencies declined to **0.17%** of total loans[9](index=9&type=chunk) - Loans receivables were **$6.31 billion**, up **0.4%** from Q1 2025, with Q2 loan production at **$329.6 million** (weighted average interest rate of **7.10%**)[9](index=9&type=chunk) - Deposits were **$6.73 billion**, up **1.7%** from Q1 2025, with noninterest-bearing demand deposits at **31.3%** of total deposits[9](index=9&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) This section details Hanmi Financial Corporation's operational performance, including net interest income, credit loss expense, noninterest income, noninterest expense, and income tax expense [Net Interest Income and Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income for Q2 2025 increased by 3.7% to $57.1 million, driven by lower rates on interest-bearing liabilities, higher interest-earning assets, and an additional day in the quarter, expanding the net interest margin to 3.07% | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Total interest and dividend income | $101,333 | $99,257 | $98,660 | 2.1% | 2.7% | | Total interest expense | $44,194 | $44,165 | $50,040 | 0.1% | -11.7% | | Net interest income | $57,139 | $55,092 | $48,620 | 3.7% | 17.5% | | Net interest margin (taxable equivalent) | 3.07% | 3.02% | 2.69% | 0.05 | 0.38 | - Average interest-earning assets increased **1.2%**, while the average yield decreased by one basis point[12](index=12&type=chunk) - Average interest-bearing liabilities increased **0.9%**, with the average rate paid declining seven basis points, primarily due to lower rates on time deposits[12](index=12&type=chunk) [Credit Loss Expense](index=3&type=section&id=Credit%20Loss%20Expense) Credit loss expense significantly increased to $7.6 million in Q2 2025 from $2.7 million in Q1 2025, primarily due to higher net charge-offs, including an $8.6 million charge-off on a syndicated commercial real estate office loan, and an increase in estimated loss rates | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Credit loss expense | $7,631 | $2,721 | $961 | 180.4% | 694.1% | - The increase in credit loss expense reflected an **$8.6 million** loan charge-off on a syndicated commercial real estate office loan designated as nonaccrual[19](index=19&type=chunk) - Q2 credit loss expense included **$7.5 million** for loan losses and **$0.1 million** for off-balance sheet items[19](index=19&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Noninterest income increased by 4.5% to $8.1 million in Q2 2025, primarily driven by higher gains from SBA loan sales and a significant increase in bank-owned life insurance income due to a death benefit claim, partially offset by the absence of gains from mortgage loan sales | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Total noninterest income | $8,071 | $7,726 | $8,057 | 4.5% | 0.2% | | Gain on sale of SBA loans | $2,160 | $2,000 | $1,644 | 8.0% | 31.4% | | Bank-owned life insurance income | $708 | $309 | $638 | 129.1% | 11.0% | | Gain on sale of mortgage loans | $- | $175 | $365 | -100.0% | -100.0% | - SBA loan sales volume increased to **$35.4 million** from **$32.2 million** in Q1 2025[20](index=20&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense rose by 3.9% to $36.3 million in Q2 2025, primarily due to increases in salaries and benefits, professional fees, advertising and promotion, and other operating expenses, partially offset by a $0.6 million gain on sale of other real estate owned, with the efficiency ratio remaining stable at 55.7% | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Total noninterest expense | $36,347 | $34,984 | $35,276 | 3.9% | 3.0% | | Salaries and employee benefits | $22,069 | $20,972 | $20,434 | 5.2% | 8.0% | | Professional fees | $1,725 | $1,468 | $1,749 | 17.5% | -1.4% | | Advertising and promotion | $798 | $585 | $669 | 36.4% | 19.3% | - The efficiency ratio for the second quarter was **55.7%**, unchanged from the first quarter of 2025[21](index=21&type=chunk) [Income Tax Expense](index=5&type=section&id=Income%20Tax%20Expense) Income tax expense for Q2 2025 was $6.1 million, a decrease from $7.4 million in Q1 2025, resulting in an effective tax rate of 28.8% for the quarter | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :---------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Income tax expense | $6,115 | $7,441 | $5,989 | -17.8% | 2.1% | | Effective tax rate | 28.8% | 29.6% | - | - | - | [Financial Position](index=5&type=section&id=Financial%20Position) This section outlines Hanmi Financial Corporation's financial position, detailing changes in assets, loan portfolio, deposits, and stockholders' equity and capital [Assets](index=5&type=section&id=Assets) Total assets at June 30, 2025, increased by 1.7% to $7.86 billion, primarily driven by increases in cash, loans held for sale, loans receivable, and securities available for sale | Asset Category | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Total assets | $7,862,363 | $7,729,035 | $7,586,347 | 1.7% | 3.6% | | Cash and due from banks | $380,050 | $329,003 | $313,079 | 15.5% | 21.4% | | Loans held for sale | $49,611 | $11,831 | $10,467 | 319.3% | 374.0% | | Loans receivable, net of allowance for credit losses | $6,239,201 | $6,211,592 | $6,108,630 | 0.4% | 2.1% | - Loans held-for-sale significantly increased to **$49.6 million**, consisting of **$41.9 million** of residential mortgage loans and **$7.7 million** of guaranteed SBA 7(a) loans[25](index=25&type=chunk) [Loan Portfolio](index=5&type=section&id=Loan%20Portfolio) Loans receivable, before allowance for credit losses, increased to $6.31 billion, with strong growth in commercial and industrial loans, a decline in equipment finance loans, and new loan production of $329.6 million at a weighted average interest rate of 7.10% | Loan Category | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Loans receivable | $6,305,957 | $6,282,189 | $6,176,359 | 0.4% | 2.1% | | Commercial real estate loans | $3,948,922 | $3,975,651 | $3,888,505 | -0.7% | 1.6% | | Residential/consumer loans | $993,869 | $979,536 | $954,209 | 1.5% | 4.2% | | Commercial and industrial loans | $917,995 | $854,406 | $802,372 | 7.4% | 14.4% | | Equipment finance | $445,171 | $472,596 | $531,273 | -5.8% | -16.2% | New Loan Production (in thousands) | New Loan Production (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------------- | :------ | :------ | :------ | | Commercial real estate loans | $111,993 | $146,606 | $87,632 | | Residential/consumer loans | $83,761 | $55,000 | $30,194 | | Commercial and industrial loans | $53,444 | $42,344 | $59,007 | | SBA loans | $46,829 | $55,242 | $54,486 | | Equipment finance | $33,567 | $46,749 | $42,594 | | **Subtotal** | **$329,594** | **$345,941** | **$273,913** | - New loan production for Q2 2025 was **$329.6 million** with an average rate of **7.10%**[26](index=26&type=chunk) [Deposits](index=6&type=section&id=Deposits) Total deposits increased by 1.7% to $6.73 billion at the end of Q2 2025, driven by increases in time deposits, noninterest-bearing demand deposits, and money market/savings deposits, with noninterest-bearing demand deposits representing 31.3% of total deposits | Deposit Category | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Total deposits | $6,729,122 | $6,619,475 | $6,329,340 | 1.7% | 6.3% | | Noninterest-bearing demand | $2,105,369 | $2,066,659 | $1,959,963 | 1.9% | 7.4% | | Interest-bearing demand | $90,172 | $80,790 | $82,981 | 11.6% | 8.7% | | Money market and savings | $2,092,847 | $2,073,943 | $1,834,797 | 0.9% | 14.1% | | Time deposits | $2,440,734 | $2,398,083 | $2,451,599 | 1.8% | -0.4% | - Noninterest-bearing demand deposits represented **31.3%** of total deposits at June 30, 2025[29](index=29&type=chunk) - The loan-to-deposit ratio was **93.7%** at June 30, 2025[29](index=29&type=chunk) [Stockholders' Equity and Capital](index=6&type=section&id=Stockholders%27%20Equity%20and%20Capital) Stockholders' equity increased to $762.8 million, driven by net income (net of dividends) and a decrease in unrealized after-tax losses on securities, while Hanmi maintained strong capital ratios, exceeding minimum regulatory requirements and remaining 'well capitalized', also repurchasing 70,000 shares of common stock | Metric | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Total stockholders' equity | $762,834 | $751,485 | $707,059 | 1.5% | 7.9% | | Tangible common stockholders' equity | $751,803 | $740,454 | $696,011 | - | - | | Tangible common equity to tangible assets | 9.58% | 9.59% | 9.19% | -0.01 | 0.39 | - Stockholders' equity increased by **$11.3 million**, including **$7.0 million** in net income (net of dividends paid) and a **$5.5 million** decrease in unrealized after-tax losses on securities available for sale[30](index=30&type=chunk) - Hanmi repurchased **70,000 shares** of common stock at a cost of **$1.6 million**, with **1,110,500 shares** remaining under the repurchase program[30](index=30&type=chunk) [Regulatory Capital Ratios](index=6&type=section&id=Regulatory%20Capital%20Ratios) Hanmi and Hanmi Bank continued to exceed minimum regulatory capital requirements, with the Bank remaining in the 'well capitalized' category, and Hanmi's common equity tier 1 capital ratio remaining stable at 12.12% | Regulatory Capital Ratios (Hanmi Financial) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :------------------------------------------ | :----------- | :----------- | :----------- | :--------------------- | :--------------------- | | Total risk-based capital | 15.20% | 15.28% | 15.24% | -0.08 | -0.04 | | Tier 1 risk-based capital | 12.46% | 12.46% | 12.46% | 0.00 | 0.00 | | Common equity tier 1 capital | 12.12% | 12.12% | 12.11% | 0.00 | 0.01 | | Tier 1 leverage capital ratio | 10.63% | 10.67% | 10.51% | -0.04 | 0.12 | | Regulatory Capital Ratios (Hanmi Bank) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | Total risk-based capital | 14.39% | 14.47% | 14.51% | -0.08 | -0.12 | | Tier 1 risk-based capital | 13.32% | 13.34% | 13.47% | -0.02 | -0.15 | | Common equity tier 1 capital | 13.32% | 13.34% | 13.47% | -0.02 | -0.15 | | Tier 1 leverage capital ratio | 11.43% | 11.49% | 11.41% | -0.06 | 0.02 | [Asset Quality](index=7&type=section&id=Asset%20Quality) This section reviews Hanmi Financial Corporation's asset quality, including delinquent and criticized loans, nonperforming assets, charge-offs and recoveries, and the allowance for credit losses [Delinquent and Criticized Loans](index=7&type=section&id=Delinquent%20and%20Criticized%20Loans) Asset quality showed significant improvement in Q2 2025, with delinquent loans decreasing to 0.17% of total loans and criticized loans dropping substantially by $118.3 million to $46.6 million, primarily due to loan upgrades and paydowns of commercial real estate loans | Metric | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Loans, 30 to 89 days past due and still accruing | $10,953 | $17,312 | $13,844 | $(6,359) | $(2,891) | | Delinquent loans to total loans | 0.17% | 0.28% | 0.22% | (0.11) | (0.05) | | Total criticized loans | $46,558 | $164,899 | $70,866 | $(118,341) | $(24,308) | | Criticized loans to total loans | 0.74% | 2.62% | 1.15% | (1.88) | (0.41) | - The **$118.3 million** decrease in criticized loans resulted from a **$105.7 million** decrease in special mention loans (including **$85.3 million** in loan upgrades of two CRE loans) and a **$12.6 million** decrease in classified loans[35](index=35&type=chunk) [Nonperforming Assets](index=7&type=section&id=Nonperforming%20Assets) Nonperforming loans and assets both decreased significantly in Q2 2025, with nonperforming loans falling by $9.6 million to $26.0 million, primarily due to charge-offs and paydowns, improving nonperforming assets as a percentage of total assets to 0.33% | Metric | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Nonaccrual loans | $25,968 | $35,459 | $19,245 | $(9,491) | $6,723 | | Nonperforming loans | $25,968 | $35,571 | $19,245 | $(9,603) | $6,723 | | Nonperforming assets | $25,968 | $35,688 | $20,017 | $(9,720) | $5,951 | | Nonperforming assets to assets | 0.33% | 0.46% | 0.26% | -0.13 | 0.07 | | Nonperforming loans to total loans | 0.41% | 0.57% | 0.31% | -0.16 | 0.10 | - The **$9.6 million** decrease in nonperforming loans primarily reflected charge-offs of **$11.6 million** and **$1.3 million** in paydowns[36](index=36&type=chunk) [Charge-offs and Recoveries](index=7&type=section&id=Charge-offs%20and%20Recoveries) Gross charge-offs increased to $12.4 million in Q2 2025, primarily due to an $8.6 million charge-off on a commercial real estate loan and $2.9 million on equipment financing agreements, resulting in net charge-offs of $11.4 million for the quarter | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | | Net loan (charge-offs) recoveries | $(11,365) | $(1,946) | $(1,789) | | Net loan charge-offs (recoveries) to average loans | 0.73% | 0.13% | 0.12% | - Gross charge-offs for Q2 2025 were **$12.4 million**, compared with **$3.2 million** for the preceding quarter[38](index=38&type=chunk) - Recoveries of previously charged-off loans were **$1.0 million** in Q2 2025[38](index=38&type=chunk) [Allowance for Credit Losses](index=7&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses decreased to $66.8 million at June 30, 2025, from $70.6 million at March 31, 2025, mainly due to a decrease in specific allowances reflecting an $8.6 million charge-off, partially offset by an increase in collectively evaluated allowances, resulting in a ratio of allowance for credit losses to loans of 1.06% | Metric | Jun 30, 2025 (in thousands) | Mar 31, 2025 (in thousands) | Jun 30, 2024 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Balance at end of period (loans) | $66,756 | $70,597 | $67,729 | | Allowance for credit losses to loans | 1.06% | 1.12% | 1.10% | | Balance at end of period (off-balance sheet items) | $2,506 | $2,399 | $2,010 | - Specific allowances for loans decreased by **$7.6 million**, a result of the **$8.6 million** charge-off[39](index=39&type=chunk) - Collectively evaluated allowances increased by **$3.8 million**[39](index=39&type=chunk) [Corporate Information](index=8&type=section&id=Corporate%20Information) This section provides details on Hanmi Financial Corporation's corporate developments, earnings conference call, and an overview of the company [Corporate Developments](index=8&type=section&id=Corporate%20Developments) Hanmi's Board of Directors declared a cash dividend of $0.27 per share for Q2 2025, which was paid on May 21, 2025 - A cash dividend of **$0.27 per share** was declared for the second quarter of 2025[44](index=44&type=chunk) [Earnings Conference Call](index=8&type=section&id=Earnings%20Conference%20Call) Hanmi Bank hosted its Q2 2025 earnings conference call on July 22, 2025, at 2:00 p.m. PST, with webcast access available on its Investor Relations website - Earnings conference call held on July 22, 2025, at **2:00 p.m. PST**[45](index=45&type=chunk) - Webcast and replay available on Hanmi's Investor Relations website[45](index=45&type=chunk) [About Hanmi Financial Corporation](index=9&type=section&id=About%20Hanmi%20Financial%20Corporation) Hanmi Financial Corporation, headquartered in Los Angeles, California, is the parent company of Hanmi Bank, which serves multi-ethnic communities through 32 full-service branches and eight loan production offices across several states, specializing in real estate, commercial, SBA, and trade finance lending to small and middle market businesses - Headquartered in Los Angeles, California[46](index=46&type=chunk) - Operates **32 full-service branches** and **eight loan production offices** in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia[46](index=46&type=chunk) - Specializes in real estate, commercial, SBA, and trade finance lending to small and middle market businesses[46](index=46&type=chunk) [Forward-Looking Statements & Risk Factors](index=9&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This section contains forward-looking statements subject to various known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from projections, including maintaining adequate capital and liquidity, general economic conditions, market volatility, changes in investor sentiment, competition, interest rate fluctuations, regulatory actions, and cybersecurity threats - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors[48](index=48&type=chunk) - Key risk factors include: failure to maintain adequate capital and liquidity, general economic and business conditions, volatility in credit and equity markets, changes in investor sentiment, competition for loans and deposits, inflation and interest rate fluctuations, ability to enter new markets, impact of geopolitical events, potential supervisory actions, natural disasters, legal proceedings, operational/security system failures, risks with SBA loans, failure to attract key employees, access to cost-effective funding, governmental policies, changes in liquidity, fluctuations in real estate values, accounting policy changes, regulatory changes, restrictions on Hanmi Bank distributions, strategic transactions, adequacy of credit loss allowance, credit quality, ability to control expenses, and cybersecurity/fraud risks[49](index=49&type=chunk) [Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents Hanmi Financial Corporation's unaudited consolidated financial statements, including balance sheets, statements of income, and average balance, yield, and rate data [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a 1.7% increase in total assets to $7.86 billion at June 30, 2025, driven by growth in cash, loans held for sale, and loans receivable, with total liabilities also increasing by 1.7% to $7.10 billion, primarily due to higher deposits, while stockholders' equity grew by 1.5% to $762.8 million | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | **Assets:** | | | | | Cash and due from banks | $380,050 | $329,003 | $313,079 | | Securities available for sale | $918,094 | $907,011 | $877,638 | | Loans held for sale | $49,611 | $11,831 | $10,467 | | Loans receivable, net | $6,239,201 | $6,211,592 | $6,108,630 | | Total assets | $7,862,363 | $7,729,035 | $7,586,347 | | **Liabilities:** | | | | | Total deposits | $6,729,122 | $6,619,475 | $6,329,340 | | Borrowings | $127,500 | $117,500 | $292,500 | | Total liabilities | $7,099,529 | $6,977,550 | $6,879,288 | | **Stockholders' Equity:** | | | | | Total stockholders' equity | $762,834 | $751,485 | $707,059 | [Consolidated Statements of Income](index=11&type=section&id=Consolidated%20Statements%20of%20Income) For Q2 2025, net income was $15.1 million, a 14.5% decrease from Q1 2025, primarily due to a significant increase in credit loss expense, despite growth in net interest income and noninterest income; for the six months ended June 30, 2025, net income increased by 10.7% to $32.8 million compared to the same period in 2024, driven by higher net interest income Three Months Ended | (Dollars in thousands, except per share data) | Three Months Ended Jun 30, 2025 | Three Months Ended Mar 31, 2025 | Three Months Ended Jun 30, 2024 | | :-------------------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Total interest and dividend income | $101,333 | $99,257 | $98,660 | | Total interest expense | $44,194 | $44,165 | $50,040 | | Net interest income before credit loss expense | $57,139 | $55,092 | $48,620 | | Credit loss expense | $7,631 | $2,721 | $961 | | Total noninterest income | $8,071 | $7,726 | $8,057 | | Total noninterest expense | $36,347 | $34,984 | $35,276 | | Income before tax | $21,232 | $25,113 | $20,440 | | Income tax expense | $6,115 | $7,441 | $5,989 | | Net income | $15,117 | $17,672 | $14,451 | | Diluted earnings per share | $0.50 | $0.58 | $0.48 | Six Months Ended | (Dollars in thousands, except per share data) | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :-------------------------------------------- | :---------------------------- | :---------------------------- | | Total interest and dividend income | $200,589 | $198,253 | | Total interest expense | $88,358 | $98,979 | | Net interest income before credit loss expense | $112,231 | $99,274 | | Credit loss expense | $10,352 | $1,188 | | Total noninterest income | $15,796 | $15,790 | | Total noninterest expense | $71,330 | $71,720 | | Income before tax | $46,345 | $42,156 | | Income tax expense | $13,556 | $12,541 | | Net income | $32,789 | $29,615 | | Diluted earnings per share | $1.08 | $0.97 | [Average Balance, Average Yield Earned, and Average Rate Paid](index=12&type=section&id=Average%20Balance%2C%20Average%20Yield%20Earned%2C%20and%20Average%20Rate%20Paid) For Q2 2025, the average yield on interest-earning assets slightly decreased to 5.44%, while the average rate paid on interest-bearing liabilities decreased to 3.68%, resulting in an improved net interest spread of 1.76% and a net interest margin of 3.07%; for the six months ended June 30, 2025, the net interest margin was 3.05%, up from 2.74% in the prior year period Average Balance, Average Yield Earned, and Average Rate Paid | (Dollars in thousands) | Jun 30, 2025 Average Balance | Jun 30, 2025 Average Yield/Rate | Mar 31, 2025 Average Balance | Mar 31, 2025 Average Yield/Rate | Jun 30, 2024 Average Balance | Jun 30, 2024 Average Yield/Rate | | :-------------------------------- | :--------------------------- | :------------------------------ | :--------------------------- | :------------------------------ | :--------------------------- | :------------------------------ | | **Interest-earning assets:** | | | | | | | | Loans receivable | $6,257,741 | 5.93% | $6,189,531 | 5.95% | $6,089,440 | 5.99% | | Total interest-earning assets | $7,468,367 | 5.44% | $7,383,443 | 5.45% | $7,265,673 | 5.46% | | **Interest-bearing liabilities:** | | | | | | | | Total interest-bearing deposits | $4,625,188 | 3.64% | $4,461,939 | 3.69% | $4,384,467 | 4.27% | | Total interest-bearing liabilities | $4,816,202 | 3.68% | $4,772,101 | 3.75% | $4,684,231 | 4.30% | | Net interest spread | | 1.76% | | 1.70% | | 1.16% | | Net interest margin | | 3.07% | | 3.02% | | 2.69% | Six Months Ended Average Balance, Average Yield Earned, and Average Rate Paid | (Dollars in thousands) | Six Months Ended Jun 30, 2025 Average Balance | Six Months Ended Jun 30, 2025 Average Yield/Rate | Six Months Ended Jun 30, 2024 Average Balance | Six Months Ended Jun 30, 2024 Average Yield/Rate | | :-------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | | **Interest-earning assets:** | | | | | | Loans receivable | $6,223,825 | 5.94% | $6,113,664 | 6.00% | | Total interest-earning assets | $7,426,140 | 5.44% | $7,295,595 | 5.46% | | **Interest-bearing liabilities:** | | | | | | Total interest-bearing deposits | $4,544,014 | 3.66% | $4,396,892 | 4.21% | | Total interest-bearing liabilities | $4,794,273 | 3.72% | $4,693,027 | 4.24% | | Net interest spread | | 1.73% | | 1.22% | | Net interest margin | | 3.05% | | 2.74% | [Non-GAAP Financial Measures](index=15&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations and explanations for non-GAAP financial measures used by Hanmi Financial Corporation to assess performance [Tangible Common Equity to Tangible Assets Ratio](index=15&type=section&id=Tangible%20Common%20Equity%20to%20Tangible%20Assets%20Ratio) The tangible common equity to tangible assets ratio, a non-GAAP measure, is used by management to assess capital strength by excluding goodwill and other intangible assets, and at June 30, 2025, this ratio was 9.58%, remaining stable compared to the prior quarter - Tangible common equity to tangible assets ratio is a non-GAAP measure used to analyze capital strength by excluding goodwill and other intangible assets[59](index=59&type=chunk) Tangible Common Equity to Tangible Assets Ratio Reconciliation | (In thousands, except ratios) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Assets | $7,862,363 | $7,729,035 | $7,586,347 | | Less goodwill and other intangible assets | $(11,031) | $(11,031) | $(11,048) | | Tangible assets | $7,851,332 | $7,718,004 | $7,575,299 | | Stockholders' equity | $762,834 | $751,485 | $707,059 | | Less goodwill and other intangible assets | $(11,031) | $(11,031) | $(11,048) | | Tangible stockholders' equity | $751,803 | $740,454 | $696,011 | | Tangible common equity to tangible assets | 9.58% | 9.59% | 9.19% | | Tangible common equity per common share | $24.91 | $24.49 | $22.99 | [Preprovision Net Revenue](index=16&type=section&id=Preprovision%20Net%20Revenue) Preprovision net revenue, a non-GAAP measure, increased by 3.7% to $28.9 million in Q2 2025, helping evaluate core operational performance by excluding credit loss expense and highlighting the company's net revenue activities and operational efficiency - Preprovision net revenue is a non-GAAP measure used to assess core operational performance by excluding credit loss expense[62](index=62&type=chunk) Preprovision Net Revenue Reconciliation | (In thousands, except percentages) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | Q2-25 vs. Q1-25 Change | Q2-25 vs. Q2-24 Change | | :--------------------------------- | :----------- | :----------- | :----------- | :--------------------- | :--------------------- | | Net income | $15,117 | $17,672 | $14,451 | - | - | | Add back: Credit loss expense | $7,631 | $2,721 | $961 | - | - | | Add back: Income tax expense | $6,115 | $7,441 | $5,989 | - | - | | Preprovision net revenue | $28,863 | $27,834 | $21,401 | 3.7% | 34.9% |

Core Viewpoint - Hanmi Financial Corporation reported a decline in net income for Q2 2025, primarily due to increased credit loss expenses, despite improvements in asset quality and operational metrics [2][3][7]. Financial Performance - Net income for Q2 2025 was $15.1 million, or $0.50 per diluted share, down from $17.7 million, or $0.58 per diluted share in Q1 2025 [2][7]. - Return on average assets decreased to 0.79% from 0.94%, and return on average equity fell to 7.48% from 8.92% [2][8]. - Preprovision net revenue grew by 3.7%, driven by lower funding costs and a 3.7% increase in net interest income [3][7]. Asset Quality - Significant improvement in asset quality was noted, with criticized loans dropping 71.8% to 0.74% of total loans, and nonaccrual loans falling 26.8% to 0.41% of total loans [7][18]. - Loan delinquencies decreased to 0.17% of total loans [7]. Loan and Deposit Growth - Loans receivable increased to $6.31 billion, up 0.4% from Q1 2025, with loan production for Q2 at $329.6 million [7][29]. - Deposits rose to $6.73 billion, a 1.7% increase from the previous quarter, with noninterest-bearing demand deposits accounting for 31.3% of total deposits [7][29]. Noninterest Income and Expenses - Noninterest income increased by 4.5% to $8.1 million, primarily due to gains from the sale of SBA loans [20][21]. - Noninterest expenses rose to $36.3 million, up 3.9% sequentially, driven by increases in salaries, professional fees, and advertising [21][22]. Capital Position - The capital position remained strong, with a tangible common equity to tangible assets ratio of 9.58% and a common equity tier 1 capital ratio of 12.12% [7][24].

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] - Hanmi Bank specializes in real estate, commercial, SBA, and trade finance lending to small and middle market businesses [3] Upcoming Financial Results - Hanmi Financial Corporation will report its second quarter 2025 financial results after the market close on Tuesday, July 22, 2025 [1] - Management will host a conference call on the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the results [1] Accessing the Conference Call - Investment professionals and current and prospective shareholders can access the live call on July 22 by dialing 1-877-407-9039 before 2:00 p.m. Pacific Time, using access code "Hanmi Bank" [2] - The call can also be listened to online via the investor relations page of Hanmi's website, with a replay available approximately one hour following the call [2]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Hanmi Financial (HAFC) currently holding a Momentum Style Score of B [2] - The Zacks Rank system complements Style Scores, with HAFC rated 2 (Buy), indicating potential for outperformance in the market [3] Group 2: Performance Metrics - HAFC shares have increased by 8.82% over the past week, outperforming the Zacks Banks - West industry, which rose by 5.2% [5] - Over the last month, HAFC's price change is 10.21%, compared to the industry's 6.54% [5] - In the last quarter, HAFC shares rose by 23.51%, and over the past year, they increased by 52.76%, while the S&P 500 only moved 10.42% and 14.64% respectively [6] Group 3: Trading Volume and Earnings Outlook - HAFC's average 20-day trading volume is 150,512 shares, which serves as a bullish indicator when combined with rising stock prices [7] - Recent earnings estimate revisions show one upward revision for the current fiscal year, increasing the consensus estimate from $2.53 to $2.54 [9] - For the next fiscal year, one estimate has also moved upwards, indicating positive sentiment around HAFC's earnings outlook [9] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, HAFC is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a promising investment opportunity [11]

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]