Hanmi Financial (HAFC)2025-04-22 21:00Financial Data and Key Metrics Changes - Net income for Q1 2025 was 0.58 per diluted share, representing an increase of 17% and 16% respectively compared to Q1 2024 [11] - Return on average assets was 0.94%, and return on average equity was 8.92% [11] - Net interest margin expanded by 11 basis points to 3.02%, driven by lower funding costs [12] - Total loans grew to 346 million, up 2% from the prior quarter [24] - SBA loan production increased by 55 million, exceeding quarterly targets [27] - CNI production decreased by 30% to 55 million, up 37% from the previous quarter [28] - USKC loan portfolio remained stable at approximately 15% of total loans [15] Market Data and Key Metrics Changes - Non-interest-bearing demand deposits increased by 7% over the past year, representing 31.2% of total deposits [13] - Deposits from Corporate Korea clients increased significantly, contributing to a 166% increase compared to the previous quarter [31] - The new branch in Duluth, Georgia, has seen strong production in its first month [18] Company Strategy and Development Direction - The company aims to generate loan growth in the low to mid single-digit range while reducing CRE as a percentage of the portfolio [20] - Plans to hire additional banking talent to expand CNI business and increase core deposit growth [21] - Focus on maintaining strong asset quality through disciplined credit administration practices [22] - The company is well-positioned to expand its reach among Korean companies looking to establish or expand in the U.S. [15] 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 [41] - The company is optimistic about the long-term opportunities ahead, despite potential softening in loan demand due to tariffs and economic uncertainty [47] Other Important Information - The allowance for credit losses as a percentage of loans remained stable at 1.12% [16] - The company repurchased 50,000 shares at an average price of 22.49 during the quarter [39] Q&A Session Summary Question: How is the pipeline looking and any potential tariff impacts? - The second quarter pipeline looks healthy, but loan demand may soften in the latter half of the year due to tariffs and economic uncertainty [47] Question: How should expenses be modeled for the rest of the year? - Anticipated 3% to 4% increase in salaries and benefits in Q2, with other expenses behaving in line with inflation [51] Question: Should elevated share repurchases be expected? - The board reviews dividends and share repurchases each quarter, with a history of repurchases at varying amounts [55] Question: Can you provide details on margin and deposit rates? - March CDs were at 4.1%, with expectations for continued margin expansion but at a slower pace [60][62] Question: What is the status of the syndicated office loan? - The syndicated loan is 200 million, with the company holding a 10% interest [76] Question: How is the overall office CRE portfolio performing? - Over 42 to $45 million, with a solid pipeline expected [90]