• Net Income: $62.2 million for 2024, or $2.05 per diluted share.
• Return on Average Assets: 0.83%.
• Return on Average Equity: 7.97%.
• Loan Portfolio Growth: C&I portfolio increased by 16%.
• Residential Mortgage Loans Sold: $88.4 million, generating $1.5 million in noninterest income.
• Deposit Growth: 2.5% increase in 2024, with non-interest-bearing deposits up 4.6%.
• US KC Loan Portfolio Growth: 23% increase, now 15% of total loan yield.
• Nonperforming Assets: Improved to 0.19% of total assets.
• Allowance for Credit Losses: 1.12%.
• Branch Consolidation: Three branches consolidated in 2024.
• Noninterest Expenses: Increased by 3.5% for the year.
• Quarterly Dividend Increase: 8% increase to $0.27 per share.
• Net Interest Income (Q4): $53.4 million, up 6.8%.
• Net Interest Margin (Q4): Increased to 2.91%.
• Noninterest Income (Q4): $7.4 million.
• Noninterest Expenses (Q4): $34.5 million, down 1% from the previous quarter.
• Tangible Book Value per Share: $23.88 at the end of 2024.
• Tangible Equity to Tangible Asset Ratio: 9.41%.
• Common Tier 1 Ratio: 12.1%.
• Total Capital Ratio: 14.3%.

• Warning! GuruFocus has detected 5 Warning Signs with LC.

Release Date: January 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hanmi Financial Corp (NASDAQ:HAFC) reported a net income of $62.2 million for 2024, with a return on average assets of 0.83% and return on average equity of 7.97%.
• The company successfully increased its C&I portfolio by 16%, contributing to a 4.6% rise in non-interest-bearing deposits.
• Hanmi Financial Corp (NASDAQ:HAFC) opened a representative office in Seoul, South Korea, enhancing communication and support for customers and expanding its reach.
• The company maintained excellent asset quality, with nonperforming assets at 0.19% of total assets and a healthy allowance for credit losses at 1.12%.
• Hanmi Financial Corp (NASDAQ:HAFC) increased its quarterly dividend by 8% to $0.27 per share, reflecting confidence in its growth strategy and commitment to shareholder value.

Negative Points

• SBA loan production decreased slightly in the fourth quarter, although it still exceeded the quarterly target range.
• C&I production during the fourth quarter decreased by 43% from the prior quarter.
• Noninterest income declined by $1.1 million from the third quarter, primarily due to a previous gain from a sale and leaseback transaction.
• Noninterest expenses rose modestly by 3.5% for the year, driven by inflationary pressures on salaries and employee benefits.
• Loan production was essentially flat in the fourth quarter, with higher payouts impacting the overall loan portfolio growth.

Q & A Highlights

Q: How is the competitive landscape for deposits, and what are the expectations for deposit repricing trends into 2025? A: Bonita Lee, President and CEO, stated that deposit competition is fierce, but Hanmi Financial does not aim to be the pricing leader. The company focuses on a relationship banking model rather than offering the highest rates in the market.

Q: What is the rate for CDs rolling off versus coming on in the first quarter of 2025? A: Anthony Kim, Chief Banking Officer, mentioned that approximately $770 million in CDs are rolling off at 4.70%. Last quarter, less than $1 billion rolled off at 5.04%, and they were able to reprice it at 0.02%.

Q: What is Hanmi Financial's exposure to SBA loans, and how is the credit quality in that segment? A: Bonita Lee confirmed that the SBA portfolio is performing well, with approximately $250 million in exposure, of which about $17 million is tied to real estate.

Q: Can you explain why Hanmi's SBA portfolio is holding up better than others? A: Bonita Lee explained that Hanmi emphasizes past performance and trends rather than projected cash flow. They focus on driving deals from their footprint and loan production offices rather than relying on SBA brokers.

Q: What are the expectations for loan growth in the first quarter of 2025? A: Bonita Lee indicated that despite the challenging environment, they expect low to mid-single-digit loan growth for the year, considering the increase in annual payoffs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.