Hanmi Financial Corporation Reports $17.7 Million Net Income for Q1 2025

Hanmi Financial Corporation reported a net income of $17.7 million, or $0.58 per diluted share, for the first quarter of 2025, marking an increase from $15.2 million, or $0.50 per diluted share, in the same period last year. This growth in profitability was primarily driven by a $4.4 million rise in net interest income, which totaled $55.1 million, alongside a $1.5 million reduction in noninterest expenses. However, the company also faced a $2.5 million increase in credit loss expenses, totaling $2.7 million for the quarter, compared to just $0.2 million in the prior year. The effective income tax rate for the quarter was 29.6%, slightly down from 30.2% a year earlier.

In terms of asset growth, Hanmi Financial's loans receivable increased by $30.4 million, or 0.5%, to $6.21 billion as of March 31, 2025. This increase was attributed to new loan production of $345.9 million, which was partially offset by payoffs, loan sales, and prepayments totaling $315.1 million. The company's total deposits also rose to $6.62 billion, up from $6.44 billion at the end of 2024, driven by increases in money market and savings deposits as well as time deposits. The loan-to-deposit ratio stood at 94.9%, a decrease from 97.1% at the end of the previous year.

Operationally, Hanmi Financial has made significant adjustments to its credit loss estimation methodology, transitioning to a historical loss rate approach effective January 1, 2025. This change is expected to enhance the accuracy of the allowance for credit losses, which was $70.6 million as of March 31, 2025, compared to $70.1 million at the end of 2024. The company reported a notable increase in nonaccrual loans, which rose to $35.5 million from $14.3 million, primarily due to a $20 million commercial real estate loan designated as nonaccrual.

Looking ahead, Hanmi Financial remains focused on maintaining its capital ratios, which exceed regulatory requirements, with a total risk-based capital ratio of 15.28% and a Tier 1 capital ratio of 12.46% as of March 31, 2025. The company is also committed to managing its liquidity effectively, with available borrowing capacity from the Federal Home Loan Bank and other sources. The board has declared a quarterly cash dividend of $0.27 per share, reflecting the company's ongoing commitment to returning value to shareholders while navigating the evolving economic landscape.