Hanmi Financial (HAFC) Q4 2025 Earnings Transcript

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]