Hanmi Financial (US:HAFC)2024-05-03 17:28Financial Performance - Net income for Q1 2024 was $15.2 million, down 30% from $22.0 million in Q1 2023, with earnings per diluted share decreasing from $0.72 to $0.50[153] - Return on average assets decreased to 0.81% in Q1 2024 from 1.21% in Q1 2023, while return on average stockholders' equity fell from 12.19% to 7.90%[153] - Net interest income for Q1 2024 was $50.7 million, down from $57.9 million in Q1 2023, reflecting a decrease in net interest spread from 2.10% to 1.28%[158] - Noninterest income was $7.7 million, a decrease of $0.6 million, or 7.2%, compared to $8.3 million for the same period in 2023, primarily due to a decrease in all other operating income[172] - Total noninterest expense was $36.4 million, an increase of $3.7 million, or 11.1%, compared to $32.8 million for the same period in 2023[173] Asset and Loan Portfolio - Total assets as of March 31, 2024, were $7.51 billion, a slight decrease from $7.57 billion at the end of 2023[154] - Loans receivable, gross, were $6.18 billion as of March 31, 2024, compared to $6.18 billion at the end of 2023, indicating stability in the loan portfolio[154] - As of March 31, 2024, loans receivable totaled $6.11 billion, with new loan production of $234.0 million during the quarter[179] - The loan portfolio included significant concentrations, with 27.8% in nonresidential building lessors and 12.0% in hospitality[185] - The maturity distribution of outstanding loans showed a total of $6.18 billion, with $3.04 billion having fixed interest rates and $3.14 billion with variable rates[181] Credit Quality - Credit loss expense for Q1 2024 was $0.2 million, significantly lower than $2.1 million in Q1 2023, indicating improved credit quality[153] - Loans 30 to 89 days past due increased to $15.8 million from $10.3 million at the end of 2023, primarily due to a rise in past due residential loans[187] - Special mention loans decreased from $65.3 million at December 31, 2023 to $62.3 million at March 31, 2024, a reduction of $3.0 million[189] - Classified loans decreased from $31.4 million at December 31, 2023 to $23.7 million at March 31, 2024, a decrease of $7.7 million[190] - Nonaccrual loans decreased by $1.5 million, or 9.4%, from $15.5 million at December 31, 2023 to $14.0 million at March 31, 2024[193] Deposits and Capital - Total deposits increased to $6.38 billion as of March 31, 2024, up $95.5 million, or 1.5%, from $6.28 billion at December 31, 2023[215] - The loan-to-deposit ratio improved to 96.9% at March 31, 2024, compared to 98.4% at December 31, 2023[215] - Stockholders' equity rose to $703.1 million as of March 31, 2024, reflecting a net income addition of $7.5 million after dividends paid[223] - The Bank's total risk-based capital ratio was 14.50% as of March 31, 2024, placing it in the "well capitalized" category[231] Interest Rates and Income - The average yield on interest-earning assets increased to 5.47% in Q1 2024 from 4.96% in Q1 2023, while the cost of deposits rose to 2.90% from 1.69%[158] - Interest and dividend income increased by $12.3 million, or 14.1%, to $99.6 million for the three months ended March 31, 2024, primarily due to higher average interest-earning asset yields[165] - Interest expense increased by $19.5 million, or 66.2%, to $48.9 million for the three months ended March 31, 2024, primarily due to increases in deposit rates and average deposit balances[165] - The average cost of interest-bearing liabilities was 4.19% for the three months ended March 31, 2024, compared to 2.85% for the same period in 2023[169] Dividends and Share Repurchase - The company maintained dividends per share at $0.25 for both Q1 2024 and Q1 2023, reflecting a stable dividend policy[153] - The Company paid dividends of $7.7 million ($0.25 per share) for the three months ended March 31, 2024, compared to $30.5 million ($1.00 per share) for the year 2023[230] - The Company repurchased 100,000 shares of common stock during the quarter at an average price of $15.92, totaling $1.6 million[223] Risks and Market Conditions - The company faces various risks including economic conditions, competition for loans and deposits, and regulatory changes that could impact future performance[149] - The estimated impact of a 300 basis point increase in interest rates could result in a $3.974 million increase in net interest income over a 1- to 12-month horizon[226] - Market risk disclosures can be found in the Management's Discussion and Analysis section, specifically regarding interest rate risk management[236]