Hanmi Reports 2025 Second Quarter Results
LOS ANGELES, July 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 second quarter of 2025.
Net income for the second quarter of 2025 was $15.1 million, or $0.50 per diluted share, compared with $17.7 million, or $0.58 per diluted share for the first quarter of 2025. The return on average assets for the second quarter of 2025 was 0.79% and the return on average equity was 7.48%, compared with a return on average assets of 0.94% and a return on average equity of 8.92% for the first quarter of 2025.
CEO Commentary
"Hanmi delivered solid performance in the second quarter, highlighted by strong operational metrics," said Bonnie Lee, President and Chief Executive Officer. "We further expanded our net interest margin to 3.07%, and grew preprovision net revenue by 3.7%, primarily driven by lower funding costs."
"Loans grew 1.6% on an annualized basis with healthy C&I and residential mortgage loan production. Our relationship-based model continued to drive deposit growth, up 1.7% for the quarter. Noninterest-bearing demand deposit balances remained strong, accounting for over 30% of total deposits."
"Our second quarter net income was impacted by credit loss expense; however, importantly, asset quality remained excellent with significant improvement from the prior quarter. Criticized loans, nonaccrual loans and delinquent loans all declined notably. Looking to the second half of the year, we are encouraged by the strength of our loan pipeline and remain focused on deepening client relationships, expanding our market presence and leveraging our balance sheet to deliver sustainable long-term growth."
Second Quarter 2025 Highlights:
Second quarter net income was $15.1 million, or $0.50 per diluted share, compared with $17.7 million, or $0.58 per diluted share in the first quarter; the decline was driven by credit loss expense of $7.6 million.
Preprovision net revenue1 grew 3.7%, or $1.0 million, reflecting a 3.7% increase in net interest income, a five basis point increase in the net interest margin, a 4.5% increase in noninterest income and well-managed noninterest expenses with the efficiency ratio remaining unchanged at 55.7%.
Asset quality improved significantly from the first quarter - criticized loans dropped 71.8% to 0.74% of total loans reflecting $85.3 million in loan upgrades of two CRE loans, a $20.0 million loan payment, and an $8.6 million loan charge-off; nonaccrual loans fell 26.8% to 0.41% of total loans reflecting the loan charge-off; and loan delinquencies declined to 0.17% of total loans.
Loans receivables were $6.31 billion at June 30, 2025, up 0.4% from the end of the first quarter of 2025; loan production for the second quarter was $329.6 million, with a weighted average interest rate of 7.10%.
Deposits were $6.73 billion at June 30, 2025, up 1.7% from the end of the first quarter of 2025; noninterest-bearing demand deposits at June 30, 2025 were 31.3% of total deposits.
Hanmi's capital position remains strong with the ratio of tangible common equity to tangible assets2 at 9.58% and the common equity tier 1 capital ratio at 12.12%; both essentially unchanged from the first quarter; tangible book value per share3 was $24.91.
____________________________________1 See non-GAAP reconciliation provided at the end of this news release.
For more information about Hanmi, please see the Q2 2025 Investor Update (and Supplemental Financial Information), which is available on the Bank's website at www.hanmi.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov. Also, please refer to "Non-GAAP Financial Measures" herein for further details of the presentation of certain non-GAAP financial measures.
Quarterly Highlights (Dollars in thousands, except per share data)
As of or for the Three Months Ended
Amount Change
June 30,
March 31,
December 31,
September 30,
June 30,
Q2-25
Q2-25
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Net income
$
15,117
$
17,672
$
17,695
$
14,892
$
14,451
$
(2,555
)
$
666
Net income per diluted common share
$
0.50
$
0.58
$
0.58
$
0.49
$
0.48
$
(0.08
)
$
0.02
Assets
$
7,862,363
$
7,729,035
$
7,677,925
$
7,712,299
$
7,586,347
$
133,328
$
276,016
Loans receivable
$
6,305,957
$
6,282,189
$
6,251,377
$
6,257,744
$
6,176,359
$
23,768
$
129,598
Deposits
$
6,729,122
$
6,619,475
$
6,435,776
$
6,403,221
$
6,329,340
$
109,647
$
399,782
Return on average assets
0.79
%
0.94
%
0.93
%
0.79
%
0.77
%
-0.15
0.02
Return on average stockholders' equity
7.48
%
8.92
%
8.89
%
7.55
%
7.50
%
-1.44
-0.02
Net interest margin
3.07
%
3.02
%
2.91
%
2.74
%
2.69
%
0.05
0.38
Efficiency ratio (1)
55.74
%
55.69
%
56.79
%
59.98
%
62.24
%
0.05
-6.50
Tangible common equity to tangible assets (2)
9.58
%
9.59
%
9.41
%
9.42
%
9.19
%
-0.01
0.39
Tangible common equity per common share (2)
$
24.91
$
24.49
$
23.88
$
24.03
$
22.99
0.42
1.92
(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 second quarter was $57.1 million, up 3.7% from $55.1 million for the first quarter of 2025. The increase reflected the benefit of lower rates on interest-bearing liabilities, a higher volume of interest-earning assets and one additional day in the quarter. Average interest-earning assets increased 1.2% while the average yield decreased by one basis point. Average loans receivable increased 1.1% while the average yield decreased by two basis points to 5.93%. Average interest-bearing liabilities increased 0.9% while the average rate paid declined seven basis points. Average interest-bearing deposits, however, increased 3.7% while the average rate paid declined by five basis points to 3.64%, primarily due to lower rates paid on time deposits. Average borrowings fell 66.5% while the average rate paid increased one basis point.
Net interest margin (taxable equivalent) for the second quarter was 3.07%, up five basis points from 3.02% for the first quarter of 2025. The increase in the net interest margin reflected principally the benefit from lower average borrowings and a higher average balance of interest-bearing deposits in other banks.
____________________________________2 See non-GAAP reconciliation provided at the end of this news release.3 See non-GAAP reconciliation provided at the end of this news release.
For the Three Months Ended (in thousands)
Percentage Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
Net Interest Income
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Interest and fees on loans receivable (1)
$
92,589
$
90,887
$
91,545
$
92,182
$
90,752
1.9
%
2.0
%
Interest on securities
6,261
6,169
5,866
5,523
5,238
1.5
%
19.5
%
Dividends on FHLB stock
354
360
360
356
357
-1.7
%
-0.8
%
Interest on deposits in other banks
2,129
1,841
2,342
2,356
2,313
15.6
%
-8.0
%
Total interest and dividend income
$
101,333
$
99,257
$
100,113
$
100,417
$
98,660
2.1
%
2.7
%
Interest on deposits
41,924
40,559
43,406
47,153
46,495
3.4
%
-9.8
%
Interest on borrowings
684
2,024
1,634
1,561
1,896
-66.2
%
-63.9
%
Interest on subordinated debentures
1,586
1,582
1,624
1,652
1,649
0.3
%
-3.8
%
Total interest expense
44,194
44,165
46,664
50,366
50,040
0.1
%
-11.7
%
Net interest income
$
57,139
$
55,092
$
53,449
$
50,051
$
48,620
3.7
%
17.5
%
(1) Includes loans held for sale.
For the Three Months Ended (in thousands)
Percentage Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
Average Earning Assets and Interest-bearing Liabilities
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Loans receivable (1)
$
6,257,741
$
6,189,531
$
6,103,264
$
6,112,324
$
6,089,440
1.1
%
2.8
%
Securities
993,975
1,001,499
998,313
986,041
979,671
-0.8
%
1.5
%
FHLB stock
16,385
16,385
16,385
16,385
16,385
0.0
%
0.0
%
Interest-bearing deposits in other banks
200,266
176,028
204,408
183,027
180,177
13.8
%
11.1
%
Average interest-earning assets
$
7,468,367
$
7,383,443
$
7,322,370
$
7,297,777
$
7,265,673
1.2
%
2.8
%
Demand: interest-bearing
$
81,308
$
79,369
$
79,784
$
83,647
$
85,443
2.4
%
-4.8
%
Money market and savings
2,109,221
2,037,224
1,934,540
1,885,799
1,845,870
3.5
%
14.3
%
Time deposits
2,434,659
2,345,346
2,346,363
2,427,737
2,453,154
3.8
%
-0.8
%
Average interest-bearing deposits
4,625,188
4,461,939
4,360,687
4,397,183
4,384,467
3.7
%
5.5
%
Borrowings
60,134
179,444
141,604
143,479
169,525
-66.5
%
-64.5
%
Subordinated debentures
130,880
130,718
130,567
130,403
130,239
0.1
%
0.5
%
Average interest-bearing liabilities
$
4,816,202
$
4,772,101
$
4,632,858
$
4,671,065
$
4,684,231
0.9
%
2.8
%
Average Noninterest Bearing Deposits
Demand deposits - noninterest bearing
$
1,934,985
$
1,895,953
$
1,967,789
$
1,908,833
$
1,883,765
2.1
%
2.7
%
(1) Includes loans held for sale.
For the Three Months Ended
Yield/Rate Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
Average Yields and Rates
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Loans receivable (1)
5.93
%
5.95
%
5.97
%
6.00
%
5.99
%
-0.02
-0.06
Securities (2)
2.55
%
2.49
%
2.38
%
2.27
%
2.17
%
0.06
0.38
FHLB stock
8.65
%
8.92
%
8.75
%
8.65
%
8.77
%
-0.27
-0.12
Interest-bearing deposits in other banks
4.26
%
4.24
%
4.56
%
5.12
%
5.16
%
0.02
-0.90
Interest-earning assets
5.44
%
5.45
%
5.45
%
5.48
%
5.46
%
-0.01
-0.02
Interest-bearing deposits
3.64
%
3.69
%
3.96
%
4.27
%
4.27
%
-0.05
-0.63
Borrowings
4.58
%
4.57
%
4.59
%
4.33
%
4.50
%
0.01
0.08
Subordinated debentures
4.84
%
4.84
%
4.97
%
5.07
%
5.07
%
0.00
-0.23
Interest-bearing liabilities
3.68
%
3.75
%
4.01
%
4.29
%
4.30
%
-0.07
-0.62
Net interest margin (taxable equivalent basis)
3.07
%
3.02
%
2.91
%
2.74
%
2.69
%
0.05
0.38
Cost of deposits
2.56
%
2.59
%
2.73
%
2.97
%
2.98
%
-0.03
-0.42
(1) Includes loans held for sale.
(2) Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.
Credit loss expense for the second quarter was $7.6 million, compared with $2.7 million for the first quarter of 2025. The increase in credit loss expense reflected the increase in net charge-offs as well as an increase in quantitative and qualitative estimated loss rates. Net charge-offs included an $8.6 million loan charge-off on the syndicated commercial real estate office loan designated as nonaccrual, with an associated specific allowance of $6.2 million, in the first quarter of 2025. Second quarter credit loss expense included a $7.5 million credit loss expense for loan losses and a $0.1 million credit loss expense for off-balance sheet items. First quarter credit loss expense included a $2.4 million credit loss expense for loan losses and a $0.3 million credit loss expense for off-balance sheet items.
Noninterest income for the second quarter increased $0.4 million, or 4.5%, to $8.1 million from $7.7 million for the first quarter of 2025. The increase was primarily due to a $0.2 million increase on gains from the sale of SBA loans and an increase in bank-owned life insurance income of $0.4 million from a death benefit claim, partially offset by the absence of gain on sale of mortgage loans. Gain on sales of SBA loans were $2.2 million for the second quarter of 2025, compared with $2.0 million for the first quarter of 2025. The volume of SBA loans sold for the second quarter increased to $35.4 million from $32.2 million for the first quarter of 2025, while trade premiums were 7.61% for the second quarter of 2025 compared with 7.82% for the first quarter. There were no mortgage loans sales during the second quarter, compared with $10.0 million of mortgage loans sold at a 2.50% premium for the first quarter. Gains on mortgage loans sold were $0.2 million for the first quarter. Subsequent to the end of the second quarter, $41.9 million of mortgage loans were sold at a 2.38% premium resulting in a gain of $0.7 million.
For the Three Months Ended (in thousands)
Percentage Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
Noninterest Income
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Service charges on deposit accounts
$
2,169
$
2,217
$
2,192
$
2,311
$
2,429
-2.2
%
-10.7
%
Trade finance and other service charges and fees
1,461
1,396
1,364
1,254
1,277
4.7
%
14.4
%
Servicing income
754
732
668
817
796
3.0
%
-5.3
%
Bank-owned life insurance income
708
309
316
320
638
129.1
%
11.0
%
All other operating income
819
897
1,037
1,008
908
-8.7
%
-9.8
%
Service charges, fees & other
5,911
5,551
5,577
5,710
6,048
6.5
%
-2.3
%
Gain on sale of SBA loans
2,160
2,000
1,443
1,544
1,644
8.0
%
31.4
%
Gain on sale of mortgage loans
-
175
337
324
365
-100.0
%
-100.0
%
Gain on sale of bank premises
-
-
-
860
-
0.0
%
0.0
%
Total noninterest income
$
8,071
$
7,726
$
7,357
$
8,438
$
8,057
4.5
%
0.2
%
Noninterest expense for the second quarter increased $1.3 million to $36.3 million from $35.0 million for the first quarter of 2025. Second quarter noninterest expense was up 3.9% sequentially due to increases in salaries and benefits, professional fees, advertising and promotion and all other operating expenses, partially offset by a $0.6 million gain on sale of other real estate owned. Salaries and benefits increased $1.1 million due to annual merit adjustments and lower capitalized salaries related to loan production. Professional fees increased $0.3 million due to new project activities and fees for services. Advertising and promotion increased $0.2 million primarily due to a new branch opening. All other operating expenses increased $0.4 million due to loan and deposit operating expenses. The efficiency ratio for the second quarter was 55.7%, unchanged from the first quarter of 2025.
For the Three Months Ended (in thousands)
Percentage Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Noninterest Expense
Salaries and employee benefits
$
22,069
$
20,972
$
20,498
$
20,851
$
20,434
5.2
%
8.0
%
Occupancy and equipment
4,344
4,450
4,503
4,499
4,348
-2.4
%
-0.1
%
Data processing
3,727
3,787
3,800
3,839
3,686
-1.6
%
1.1
%
Professional fees
1,725
1,468
1,821
1,492
1,749
17.5
%
-1.4
%
Supplies and communication
515
517
551
538
570
-0.4
%
-9.6
%
Advertising and promotion
798
585
821
631
669
36.4
%
19.3
%
All other operating expenses
3,567
3,175
3,847
2,875
3,251
12.3
%
9.7
%
Subtotal
36,745
34,954
35,841
34,725
34,707
5.1
%
5.9
%
Branch consolidation expense
-
-
-
-
301
0.0
%
-100.0
%
Other real estate owned expense (income)
(461
)
41
(1,588
)
77
6
N/M
N/M
Repossessed personal property expense (income)
63
(11
)
281
278
262
-672.7
%
-76.0
%
Total noninterest expense
$
36,347
$
34,984
$
34,534
$
35,080
$
35,276
3.9
%
3.0
%
Hanmi recorded a provision for income taxes of $6.1 million for the second quarter of 2025, compared with $7.4 million for the first quarter of 2025, representing an effective tax rate of 28.8% and 29.6%, respectively.
Financial PositionTotal assets at June 30, 2025 increased 1.7%, or $133.3 million, to $7.86 billion from $7.73 billion at March 31, 2025. The increase reflected a $51.0 million increase in cash, a $37.8 million increase in loans held for sale, a $27.6 million increase in loans, a $11.1 million increase in securities available for sale, and a $6.7 million increase in prepaid expenses and other assets.
Loans receivable, before allowance for credit losses, were $6.31 billion at June 30, 2025, up from $6.28 billion at March 31, 2025.
Loans held-for-sale were $49.6 million at June 30, 2025, up from $11.8 million at March 31, 2025. At the end of the second quarter, loans held-for-sale consisted of $41.9 million of residential mortgage loans and $7.7 million of the guaranteed portion of SBA 7(a) loans.
As of (in thousands)
Percentage Change
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Q2-25
Q2-25
2025
2025
2024
2024
2024
vs. Q1-25
vs. Q2-24
Loan Portfolio
Commercial real estate loans
$
3,948,922
$
3,975,651
$
3,949,622
$
3,932,088
$
3,888,505
-0.7
%
1.6
%
Residential/consumer loans
993,869
979,536
951,302
939,285
954,209
1.5
%
4.2
%
Commercial and industrial loans
917,995
854,406
863,431
879,092
802,372
7.4
%
14.4
%
Equipment finance
445,171
472,596
487,022
507,279
531,273
-5.8
%
-16.2
%
Loans receivable
6,305,957
6,282,189
6,251,377
6,257,744
6,176,359
0.4
%
2.1
%
Loans held for sale
49,611
11,831
8,579
54,336
10,467
319.3
%
374.0
%
Total
$
6,355,568
$
6,294,020
$
6,259,956
$
6,312,080
