Hanmi Financial Corporation (HAFC, Financial) has published its second-quarter financial results, showcasing a tangible book value per share of $24.91. The company's Common Equity Tier 1 (CET1) capital ratio was reported at 13.32%, indicating a strong financial position.
The firm's operational outcomes were robust, reflecting a net interest margin expansion to 3.07%. Additionally, Hanmi saw its preprovision net revenue grow by 3.7%, largely attributed to a reduction in funding costs. The company continues to demonstrate solid performance under the leadership of its president and CEO, Bonnie Lee.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Hanmi Financial Corp (HAFC, Financial) is $27.38 with a high estimate of $28.50 and a low estimate of $26.00. The average target implies an upside of 4.80% from the current price of $26.12. More detailed estimate data can be found on the Hanmi Financial Corp (HAFC) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Hanmi Financial Corp's (HAFC, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Hanmi Financial Corp (HAFC, Financial) in one year is $22.38, suggesting a downside of 14.32% from the current price of $26.12. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Hanmi Financial Corp (HAFC) Summary page.
HAFC Key Business Developments
Release Date: April 22, 2025
- Net Income: $17.7 million, or $0.58 per diluted share, up 17% and 16% respectively from Q1 2024.
- Return on Average Assets: 0.94%.
- Return on Average Equity: 8.92%.
- Net Interest Margin: Increased by 11 basis points to 3.02%.
- Total Loans: $6.28 billion, a 0.5% increase quarter-over-quarter.
- Non-Interest Income: Grew 5%, primarily due to SBA loan sales.
- Deposits: Increased by 3% in the first quarter.
- Non-Interest-Bearing Demand Deposits: Increased by 7% over the past year, representing 31.2% of total deposits.
- Efficiency Ratio: 55.69%, best performance since Q4 2023.
- Allowance for Credit Losses: Stable at 1.12% of loans.
- Loan Production: $346 million, up 2% from the prior quarter.
- SBA Loan Production: $55 million, exceeding the target range.
- Residential Mortgage Loan Production: $55 million, up 37% from the previous quarter.
- Net Interest Income: $55.1 million, a 3.1% increase quarter-over-quarter.
- Deposit Interest Expense: Declined 6.6% from the previous quarter.
- Non-Interest Expenses: $35 million, up 1.3% from the previous quarter.
- Pre-Provision Net Revenues: Increased 6% sequentially.
- Credit Loss Expense: $2.7 million.
- Tangible Book Value Per Share: Increased 2.6% to $24.49.
- Common Equity Tier One Ratio: 12.13%.
- Total Capital Ratio: 14.48%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hanmi Financial Corp (HAFC, Financial) reported a 17% increase in net income to $17.7 million, or $0.58 per diluted share, compared to the first quarter of 2024.
- The company achieved its third consecutive quarter of net interest margin expansion, increasing by 11 basis points to 3.02%.
- Total loans grew to $6.28 billion, with solid loan production across all categories, despite the first quarter being seasonally slower.
- Deposits grew by 3% in the first quarter, driven by new commercial accounts and contributions from new branches.
- Hanmi Financial Corp (HAFC) successfully opened a new branch in Duluth, Georgia, expanding its geographic footprint and tapping into a rapidly growing market.
Negative Points
- The provision for credit loss expense increased due to a CRE loan downgraded to non-performing status.
- C&I production decreased by 30% in the first quarter, with outstanding balances declining by 6%.
- The average loan yield declined by two basis points to 5.95%, indicating pressure on loan profitability.
- Non-interest expenses increased by 1.3% from the previous quarter, although the efficiency ratio improved.
- The syndicated loan book, although small, includes a $200 million syndicated commercial real estate loan that has not yet been renewed or extended.
