LOS ANGELES, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ: HAFC, or "Hanmi”), the parent company of Hanmi Bank (the "Bank”), today reported financial results for the fourth quarter of 2024 and full year.
Net income for the fourth quarter of 2024 was $17.7 million, or $0.58 per diluted share, compared with $14.9 million, or $0.49 per diluted share, for the third quarter of 2024. The return on average assets for the fourth quarter of 2024 was 0.93% and the return on average equity was 8.89%, compared with a return on average assets of 0.79% and a return on average equity of 7.55% for the third quarter of 2024.
For the full year of 2024, net income was $62.2 million, or $2.05 per diluted share, compared with $80.0 million, or $2.62 per diluted share, for 2023. The return on average assets for 2024 was 0.83% and the return on average equity was 7.97%.
CEO Commentary
"Hanmi achieved exceptional results in the fourth quarter, delivering our best quarterly performance of the year and closing 2024 with strong momentum,” said Bonnie Lee, President and Chief Executive Officer. "Our team's outstanding execution generated significant earnings growth fueled by our net interest margin expansion of 17 basis points to 2.91%, disciplined expense management, and vigilant credit administration. These robust results highlight the strength of our relationship-driven banking model.”
"For the full year, we had a number of key accomplishments to advance our growth and diversification strategy. We delivered 16% growth in our C&I loan portfolio, driven primarily by the strong contribution from our Corporate Korea initiative. Noninterest-bearing demand deposits grew by 5% and now represent 33% of our total deposits. Finally, through our proactive monitoring of the portfolio and our successful resolution efforts, we further improved asset quality with nonperforming assets as a percentage of total assets decreasing to 0.19%.”
"With our strong capital foundation, we are well positioned to execute on our growth strategy. Our performance is the result of our team's unwavering dedication to serving our customers and the communities in which we operate. I want to thank each of them for their continued commitment to deliver long-term value for our shareholders,” concluded Lee.
Fourth Quarter 2024 Highlights:
- Fourth quarter net income was $17.7 million, or $0.58 per diluted share, up 18.8% from $14.9 million, or $0.49 per diluted share for the third quarter of 2024. The increase reflects a $3.4 million, or 6.8%, increase in net interest income, primarily due to a decrease in interest expense on deposits.
- Loans receivable were $6.25 billion at December 31, 2024, essentially unchanged from the end of the third quarter of 2024; loan production for the fourth quarter was $339.0 million, with a weighted average interest rate of 7.37%, compared with loan production for the third quarter of $347.8 million, with a weighted average interest rate of 7.92%.
- Deposits were $6.44 billion at December 31, 2024, up 0.5% from the end of the third quarter of 2024; noninterest-bearing demand deposits were 32.6% of total deposits. During the quarter, noninterest-bearing demand deposits grew 2.2%, while time deposits declined 2.0% from the prior quarter.
- Net interest income for the fourth quarter was $53.4 million, up 6.8% from the third quarter of 2024. Net interest margin (taxable equivalent) increased 17 basis points to 2.91%; the average yield on loans declined three basis points to 5.97%, while the cost of interest-bearing deposits fell 31 basis points to 3.96%.
- Credit loss expense for the fourth quarter was $0.9 million, a decrease from $2.3 million for the prior quarter. The allowance for credit losses increased $1.0 million to $70.1 million at December 31, 2024, or 1.12% of loans. For the fourth quarter, net loan recoveries were $0.1 million.
- Asset quality remained strong, as nonperforming loans declined by 7.9% to $14.3 million, or 0.23% of loans, which included pay-offs of $1.8 million, while criticized loans increased to $165.3 million, as special mention loans increased to $139.6 million and classified loans fell to $25.7 million.
Quarterly Highlights
(Dollars in thousands, except per share data)
| As of or for the Three Months Ended | Amount Change | ||||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | Q4-24 | Q4-24 | |||||||||||||||||||||
| 2024 | 2024 | 2024 | 2024 | 2023 | vs. Q3-24 | vs. Q4-23 | |||||||||||||||||||||
| Net income | $ | 17,695 | $ | 14,892 | $ | 14,451 | $ | 15,164 | $ | 18,633 | $ | 2,803 | $ | (938 | ) | ||||||||||||
| Net income per diluted common share | $ | 0.58 | $ | 0.49 | $ | 0.48 | $ | 0.50 | $ | 0.61 | $ | 0.09 | $ | (0.03 | ) | ||||||||||||
| Assets | $ | 7,677,925 | $ | 7,712,299 | $ | 7,586,347 | $ | 7,512,046 | $ | 7,570,341 | $ | (34,374 | ) | $ | 107,584 | ||||||||||||
| Loans receivable | $ | 6,251,377 | $ | 6,257,744 | $ | 6,176,359 | $ | 6,177,840 | $ | 6,182,434 | $ | (6,367 | ) | $ | 68,943 | ||||||||||||
| Deposits | $ | 6,435,776 | $ | 6,403,221 | $ | 6,329,340 | $ | 6,376,060 | $ | 6,280,574 | $ | 32,555 | $ | 155,202 | |||||||||||||
| Return on average assets | 0.93 | % | 0.79 | % | 0.77 | % | 0.81 | % | 0.99 | % | 0.14 | -0.06 | |||||||||||||||
| Return on average stockholders' equity | 8.89 | % | 7.55 | % | 7.50 | % | 7.90 | % | 9.70 | % | 1.34 | -0.81 | |||||||||||||||
| Net interest margin | 2.91 | % | 2.74 | % | 2.69 | % | 2.78 | % | 2.92 | % | 0.17 | -0.01 | |||||||||||||||
| Efficiency ratio (1) | 56.79 | % | 59.98 | % | 62.24 | % | 62.42 | % | 58.86 | % | -3.19 | -2.07 | |||||||||||||||
| Tangible common equity to tangible assets (2) | 9.41 | % | 9.42 | % | 9.19 | % | 9.23 | % | 9.14 | % | -0.01 | 0.27 | |||||||||||||||
| Tangible common equity per common share (2) | $ | 23.88 | $ | 24.03 | $ | 22.99 | $ | 22.86 | $ | 22.75 | -0.15 | 1.14 | |||||||||||||||
| (1) Noninterest expense divided by net interest income plus noninterest income. | |||||||||||||||||||||||||||
| (2) Refer to "Non-GAAP Financial Measures" for further details. | |||||||||||||||||||||||||||
Results of Operations
Net interest income for the fourth quarter was $53.4 million, up 6.8% from $50.1 million for the third quarter of 2024. The increase was primarily due to a decrease in deposit interest expense. The decrease in deposit interest expense was primarily a result of decreases in deposit rates and the average balances of interest-bearing deposits, coupled with a 3.1% increase in the average balance of noninterest-bearing demand deposits. The rate on deposits for the fourth quarter decreased 31 basis points to 3.96%, from 4.27% for the third quarter of 2024. The average balance of interest-bearing deposits decreased to $4.36 billion for the fourth quarter of 2024, from $4.40 billion for the third quarter. The average balance of noninterest-bearing deposits for the fourth quarter increased to $1.97 billion, from $1.91 billion for the third quarter of 2024. Net interest margin (taxable equivalent) for the fourth quarter was 2.91%, up 17 basis points from 2.74% for the third quarter of 2024.
Net interest income was $202.8 million for the full year of 2024 compared with $221.3 million for 2023, a decline of 8.4%. The decrease reflected higher interest rates during 2024 compared with 2023, including an increase in the cost of interest-bearing deposits, partially offset by an increase in interest-earning asset yields. The cost of interest-bearing deposits for 2024 year increased 81 basis points to 4.16% from 3.35% for 2023. The yield on average interest-earning assets for 2024 increased 31 basis points to 5.46% from 5.15% for 2023. The average balance of interest-bearing deposits for 2024 increased to $4.39 billion from $4.02 billion for 2023. The average balance of interest-earning assets for 2024 year increased 1.7% to $7.30 billion from $7.18 billion for 2023. The average balance of loans for 2024 year was $6.11 billion, up 2.4% from $5.97 billion for 2023. Net interest margin (taxable-equivalent) for 2024 year was 2.78% compared with 3.08% for 2023. The 30 basis point decrease in the net interest margin reflected the increase in the cost of interest-bearing deposits, partially offset by the increase in average loan yields.
| For the Three Months Ended (in thousands) | Percentage Change | ||||||||||||||||||||||||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Q4-24 | Q4-24 | |||||||||||||||||||||
| Net Interest Income | 2024 | 2024 | 2024 | 2024 | 2023 | vs. Q3-24 | vs. Q4-23 | ||||||||||||||||||||
| Interest and fees on loans receivable(1) | $ | 91,545 | $ | 92,182 | $ | 90,752 | $<
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