LOS ANGELES, April 22, 2025 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ: HAFC, or "Hanmi”), the parent company of Hanmi Bank (the "Bank”), today reported financial results for the first quarter of 2025.
Net income for the first quarter of 2025 was $17.7 million, or $0.58 per diluted share, unchanged from the fourth quarter of 2024. The return on average assets for the first quarter of 2025 was 0.94% and the return on average equity was 8.92%, compared with a return on average assets of 0.93% and a return on average equity of 8.89% for the fourth quarter of 2024.
CEO Commentary
"Our team delivered strong results in the first quarter with solid operating performance across all of our business lines,” said Bonnie Lee, President and Chief Executive Officer. "We achieved our third consecutive quarter of net interest margin expansion, up 11 basis points to 3.02%, primarily driven by lower funding costs.”
"Deposits increased 3% driven by new commercial accounts and contributions from our newly opened branches, a testament to our core relationship-based banking model. Loan production was solid, fueled by healthy originations in residential mortgages and our SBA business. Importantly, we maintained our strong credit quality, and continued to effectively manage our operating expenses, resulting in our best quarterly efficiency ratio since the fourth quarter of 2023.”
"Overall, our first quarter results were well-balanced and reflected continued growth and positive momentum, including the successful opening of a new branch in the Atlanta region. Despite elevated macroeconomic uncertainty, our team's focus, discipline, and commitment to providing exceptional service and market leading products positions us well to deliver long-term value to our shareholders.”
First Quarter 2025 Highlights:
- First quarter net income was $17.7 million, or $0.58 per diluted share, unchanged from fourth quarter of 2024. Preprovision net revenues increased 5.9% from the prior quarter reflecting growth in net interest income, an expanding net interest margin, a solid contribution from fee-based activities, and disciplined expense management.
- Loans receivable were $6.28 billion at March 31, 2025, up 0.5% from the end of the fourth quarter of 2024; loan production for the first quarter was $345.9 million, with a weighted average interest rate of 7.35%, compared with loan production for the fourth quarter of $339.0 million, with a weighted average interest rate of 7.37%.
- Deposits were $6.62 billion at March 31, 2025, up 2.9% from the end of the fourth quarter of 2024; noninterest-bearing demand deposits at March 31, 2025 were 31.2% of total deposits.
- Net interest income for the first quarter was $55.1 million, up 3.1% from the fourth quarter of 2024. Net interest margin (taxable equivalent) increased 11 basis points to 3.02%; the average yield on loans declined two basis points to 5.95%, while the cost of interest-bearing deposits fell 27 basis points to 3.69%.
- Credit loss expense for the first quarter was $2.7 million, an increase from $0.9 million for the prior quarter. The allowance for credit losses increased $0.5 million to $70.6 million at March 31, 2025, or 1.12% of loans. For the first quarter, net loan charge-offs were $1.9 million, or 0.13% of average loans (annualized).
- Nonperforming loans were $35.6 million at March 31, 2025, or 0.57% of loans. Criticized loans decreased to $164.9 million, as special mention loans decreased to $118.4 million, while classified loans increased to $46.5 million.
Quarterly Highlights
(Dollars in thousands, except per share data)
| As of or for the Three Months Ended | Amount Change | ||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | Q1-25 | Q1-25 | |||||||||||||||||||||
| 2025 | 2024 | 2024 | 2024 | 2024 | vs. Q4-24 | vs. Q1-24 | |||||||||||||||||||||
| Net income | $ | 17,672 | $ | 17,695 | $ | 14,892 | $ | 14,451 | $ | 15,164 | $ | (23 | ) | $ | 2,508 | ||||||||||||
| Net income per diluted common share | $ | 0.58 | $ | 0.58 | $ | 0.49 | $ | 0.48 | $ | 0.50 | $ | - | $ | 0.08 | |||||||||||||
| Assets | $ | 7,729,035 | $ | 7,677,925 | $ | 7,712,299 | $ | 7,586,347 | $ | 7,512,046 | $ | 51,110 | $ | 216,989 | |||||||||||||
| Loans receivable | $ | 6,282,189 | $ | 6,251,377 | $ | 6,257,744 | $ | 6,176,359 | $ | 6,177,840 | $ | 30,812 | $ | 104,349 | |||||||||||||
| Deposits | $ | 6,619,475 | $ | 6,435,776 | $ | 6,403,221 | $ | 6,329,340 | $ | 6,376,060 | $ | 183,699 | $ | 243,415 | |||||||||||||
| Return on average assets | 0.94 | % | 0.93 | % | 0.79 | % | 0.77 | % | 0.81 | % | 0.01 | 0.13 | |||||||||||||||
| Return on average stockholders' equity | 8.92 | % | 8.89 | % | 7.55 | % | 7.50 | % | 7.90 | % | 0.03 | 1.02 | |||||||||||||||
| Net interest margin | 3.02 | % | 2.91 | % | 2.74 | % | 2.69 | % | 2.78 | % | 0.11 | 0.24 | |||||||||||||||
| Efficiency ratio (1) | 55.69 | % | 56.79 | % | 59.98 | % | 62.24 | % | 62.42 | % | -1.10 | -6.73 | |||||||||||||||
| Tangible common equity to tangible assets (2) | 9.59 | % | 9.41 | % | 9.42 | % | 9.19 | % | 9.23 | % | 0.18 | 0.36 | |||||||||||||||
| Tangible common equity per common share (2) | $ | 24.49 | $ | 23.88 | $ | 24.03 | $ | 22.99 | $ | 22.86 | 0.61 | 1.63 | |||||||||||||||
| (1) Noninterest expense divided by net interest income plus noninterest income. | |||||||||||||||||||||||||||
| (2) Refer to "Non-GAAP Financial Measures" for further details. | |||||||||||||||||||||||||||
Net interest income for the first quarter was $55.1 million, up 3.1% from $53.4 million for the fourth quarter of 2024. The increase was primarily due to a decrease in deposit interest expense from a decrease in deposit rates. The average rate paid on interest-bearing deposits for the fourth quarter decreased 27 basis points to 3.69% from 3.96% for the fourth quarter of 2024, primarily due to the decrease in the average cost of time deposits to 4.17% for the first quarter from 4.55% for the fourth quarter of 2024. The average balance of interest-bearing deposits increased to $4.46 billion for the first quarter of 2025 from $4.36 billion for the fourth quarter. The average balance of time deposits was $2.35 billion for the first quarter of 2025, essentially unchanged from the fourth quarter. The average balance of noninterest-bearing deposits for the first quarter decreased to $1.90 billion from $1.97 billion for the fourth quarter of 2024. Net interest margin (taxable equivalent) for the first quarter was 3.02%, up 11 basis points from 2.91% for the fourth quarter of 2024.
| For the Three Months Ended (in thousands) | Percentage Change | ||||||||||||||||||||||||
| Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | Q1-25 | Q1-25 | |||||||||||||||||||
| Net Interest Income | 2025 | 2024 | 2024 | 2024 | 2024 | vs. Q4-24 | vs. Q1-24 | ||||||||||||||||||
| Interest and fees on loans receivable (1) | $ | 90,887 | $ | 91,545 | $ | 92,182 | $ | 90,752 | $ | 91,674 | -0.7 | % | -0.9 | % | |||||||||||
| Interest on securities | 6,169 | 5,866 | 5,523 | 5,238 | 4,955 | 5.2 | % | 24.5 | % | ||||||||||||||||
| Dividends on FHLB stock | 360 | 360 | 356 | 357 | 361 | 0.0 | % | -0.3 | % | ||||||||||||||||
| Interest on deposits in other banks | 1,841 | 2,342 | 2,356 | 2,313 | 2,604 | -21.4 | % | -29.3 | % | ||||||||||||||||
| Total interest and dividend income | $ | 99,257 | $ | 100,113 | $ | 100,417 | $ | 98,660 | $ | 99,594 | -0.9 | % | -0.3 | % | |||||||||||
| Interest on deposits | 40,559 | 43,406 | 47,153 | 46,495 | 45,638 | -6.6 | % | -11.1 | % | ||||||||||||||||
| Interest on borrowings | 2,024 | 1,634 | 1,561 | 1,896 | 1,655 | 23.9 | % | 22.3 | % | ||||||||||||||||
| Interest on subordinated debentures | 1,582 | 1,624 | 1,652 | 1,649 | 1,646 | -2.6 | % | -3.9 | % | ||||||||||||||||
| Total interest expense | 44,165 | 46,664 | 50,366 | 50,040 | 48,939 | -5.4 | % | -9.8 | % | ||||||||||||||||
| Net interest income | $ | 55,092 | $ | 53,449 |
| ||||||||||||||||||||