Hanmi Financial (US:HAFC)2023-11-08 17:43Financial Performance - Net income for Q3 2023 was $18.8 million, or $0.62 per diluted share, down from $27.2 million, or $0.89 per diluted share in Q3 2022, primarily due to an $8.2 million decrease in net interest income [152]. - For the nine months ended September 30, 2023, net income was $61.4 million, or $2.01 per diluted share, compared to $72.9 million, or $2.39 per diluted share for the same period in 2022, reflecting a decrease in net interest income of $5.0 million [153]. Loan and Deposit Growth - Total loans receivable were $6.02 billion as of September 30, 2023, an increase from $5.97 billion at December 31, 2022 [154]. - Deposits increased to $6.26 billion as of September 30, 2023, compared to $6.17 billion at December 31, 2022 [154]. - Loans receivable as of September 30, 2023, increased to $5.95 billion from $5.90 billion at December 31, 2022, reflecting $899.1 million in new loan production [193]. - The company plans to continue focusing on expanding its loan production in residential and commercial sectors to drive future growth [193]. - Total deposits increased to $6.26 billion as of September 30, 2023, up by $92.0 million, or 1.5% from $6.17 billion at December 31, 2022 [222]. Interest Income and Expense - Net interest income for Q3 2023 was $54.855 million, down from $63.086 million in Q3 2022 [156]. - Interest and dividend income increased by $22.6 million, or 31.7%, to $94.1 million for the three months ended September 30, 2023, primarily due to higher average interest-earning asset yields [162]. - Interest expense surged by $30.9 million, or 368.9%, to $39.2 million for the three months ended September 30, 2023, driven by higher deposit and borrowing rates [162]. - For the nine months ended September 30, 2023, net interest income was $168.1 million, a slight decrease from $173.1 million in the same period in 2022 [174]. Credit Losses and Loan Quality - Credit loss expense for Q3 2023 included a $5.2 million provision for loan losses, significantly higher than the $0.6 million in Q3 2022 [152]. - The Company recorded $7.2 million of credit loss expense for the nine months ended September 30, 2023, compared to $0.8 million for the same period in 2022 [181]. - Nonperforming loans rose to $15.8 million, or 0.26% of loans, at September 30, 2023, compared to $9.8 million, or 0.17%, at December 31, 2022, largely due to a $10.0 million nonperforming loan in the health-care industry [206]. - The allowance for credit losses was $67.3 million at September 30, 2023, down from $71.5 million at December 31, 2022, with the allowance for individually evaluated loans at $2.9 million [217]. Noninterest Income and Expense - Noninterest income for the three months ended September 30, 2023, was $11.2 million, an increase of $2.3 million, or 26.0%, compared to $8.9 million for the same period in 2022 [183]. - Total noninterest income for the nine months ended September 30, 2023, was $27.5 million, an increase of $0.8 million, or 2.8%, compared to $26.7 million for the same period in 2022 [185]. - Noninterest expense for the three months ended September 30, 2023, was $34.2 million, an increase of $1.0 million, or 2.9%, compared to $33.3 million for the same period in 2022 [186]. - Total noninterest expense for the nine months ended September 30, 2023, was $101.3 million, an increase of $4.9 million, or 5.1%, compared to $96.4 million for the same period in 2022 [188]. Tax and Capital Ratios - Income tax expense was $7.9 million for the three months ended September 30, 2023, representing an effective income tax rate of 29.6% [189]. - Income tax expense for the nine months ended September 30, 2023, was $25.7 million, with an effective tax rate of 29.5%, up from 28.9% in 2022 [190]. - The Bank's total risk-based capital ratio is 14.42%, with a Tier 1 risk-based capital ratio of 13.42%, indicating it is "well capitalized" under capital rules [236]. - The Company's total risk-based capital ratio stands at 15.07%, with a Tier 1 risk-based capital ratio of 12.30% and a common equity Tier 1 capital ratio of 11.95% [237]. Asset Management - Cash and due from banks decreased by $63.4 million to $289.0 million as of September 30, 2023, from $352.4 million at December 31, 2022 [154]. - As of September 30, 2023, the securities portfolio decreased by $36.6 million to $817.2 million from $853.8 million at December 31, 2022, primarily due to $74.0 million in paydowns and maturities [191]. - The average yield on total securities available for sale was 3.29% as of September 30, 2023 [192].