LOS ANGELES, April 23, 2024 (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 2024. Net income for the first quarter of 2024 was $15.2 million, or $0.50 per diluted share, compared with $18.6 million, or $0.61 per diluted share, for the fourth quarter of 2023. The return on average assets for the first quarter was 0.81% and the return on average equity was 7.90%, compared with a return on average assets of 0.99% and the return on average equity of 9.70% for the fourth quarter of 2023. CEO Commentary"Our first quarter performance highlights the continued execution of our strategy of diversifying our loan portfolio and deposit franchise," said Bonnie Lee, President and Chief Executive Officer of Hanmi. "Our relationship banking model enabled us to attract new customers, expanding our market share and driving a 6% annualized increase in deposits and a nearly 4% net increase in our C&I portfolio in the first quarter. We remained disciplined and selective in our underwriting practices, which have resulted in excellent asset quality." "The Hanmi franchise is robust and well positioned to successfully navigate a dynamic economic environment. Our balance sheet is solid with ample liquidity, and we have strong credit quality and excellent capital ratios. Furthermore, we have a healthy loan pipeline, stable core deposits, and well-managed expenses. Looking ahead, we will continue to optimize our branch network through a consolidation of existing offices and by entering new markets this year. I am grateful to our team of highly skilled bankers who continually build enduring banking relationships with our customers and create value for our shareholders." First Quarter 2024 Highlights:         First quarter net income was $15.2 million, or $0.50 per diluted share, compared with $18.6 million, or $0.61 per diluted share for the fourth quarter of 2023. The decline in net income reflects the change to a credit loss expense for the first quarter from a recovery during the fourth quarter of 2023, lower net interest income, and higher noninterest expense, partially offset by higher noninterest income. Loans receivable were $6.18 billion at March 31, 2024, essentially unchanged from the end of the fourth quarter of 2023; loan production for the first quarter was $234.0 million with a weighted average interest rate of 8.02%. Deposits were $6.38 billion at March 31, 2024, up 1.5% from the end of the fourth quarter of 2023; noninterest-bearing demand deposits were 30.3% of total deposits at the end of the first quarter. Net interest income for the first quarter was $50.7 million, down $2.4 million, or 4.7%, from the fourth quarter of 2023, and net interest margin (taxable equivalent) was 2.78% for the first quarter, down 14 basis points; the average yield on loans increased 12 basis points while the cost of interest-bearing deposits increased 33 basis points. Noninterest income for the first quarter was $7.7 million, up $1.1 million, or 15.8%, from the fourth quarter of 2023, primarily reflecting a $0.4 million gain on the sale of residential mortgage loans, a $0.3 million valuation adjustment to bank-owned life insurance in the fourth quarter of 2023, and higher trade finance and remittance fees of $0.2 million. Noninterest expenses were $36.4 million for the first quarter, up $1.2 million, or 3.5%, from the fourth quarter of 2023, primarily reflecting an increase in salaries and benefits, partially offset by declines in nearly all other expense categories. Asset quality remained favorable with criticized loans declining 11.1% from the year-end 2023 to $86.0 million, or 1.4% of loans. Nonperforming assets declined 9.3% to $14.1 million, or 0.19% of total assets, and net charge offs were low at $1.6 million, or 0.10% of average loans (annualized). For more information about Hanmi, please see the Q1 2024 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   March 31,   December 31,   September 30,   June 30,   March 31,   Q1-24   Q1-24   2024   2023   2023   2023   2023   vs. Q4-23   vs. Q1-23                             Net income $ 15,164     $ 18,633     $ 18,796     $ 20,620     $ 21,991     $ (3,469 )   $ (6,827 ) Net income per diluted common share $ 0.50     $ 0.61     $ 0.62     $ 0.67     $ 0.72     $ (0.11 )   $ (0.22 )                             Assets $ 7,512,046     $ 7,570,341     $ 7,350,140     $ 7,344,924     $ 7,434,130     $ (58,295 )   $ 77,916   Loans receivable $ 6,177,840     $ 6,182,434     $ 6,020,785     $ 5,965,171     $ 5,980,458     $ (4,594 )   $ 197,382   Deposits $ 6,376,060     $ 6,280,574     $ 6,260,072     $ 6,315,768     $ 6,201,038     $ 95,486     $ 175,022                               Return on average assets   0.81 %     0.99 %     1.00 %     1.12 %     1.21 %     -0.18       -0.40   Return on average stockholders' equity   7.90 %     9.70 %     9.88 %     11.14 %     12.19 %     -1.80       -4.29                               Net interest margin   2.78 %     2.92 %     3.03 %     3.11 %     3.28 %     -0.14       -0.50   Efficiency ratio (1)   62.42 %     58.86 %     51.82 %     54.11 %     49.54 %     3.56       12.88                               Tangible common equity to tangible assets (2)   9.23 %     9.14 %     8.89 %     8.96 %     8.77 %     0.09       0.46   Tangible common equity per common share (2) $ 22.86     $ 22.75     $ 21.45     $ 21.56     $ 21.30       0.11       1.56                               (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 first quarter decreased $2.4 million to $50.7 million from $53.1 million for the fourth quarter of 2023, down 4.7%. The decrease was primarily due to an increase in the cost of interest-bearing deposits, partially offset by an increase in interest-earning asset yields. The cost of interest-bearing deposits increased 33 basis points to 4.16% for the first quarter of 2024, from 3.83% for the fourth quarter of 2023. The increase in the cost of interest-bearing deposits was due to higher market interest rates and higher average balances. Average interest-bearing deposits were $4.41 billion for the first quarter, up 5.6% from $4.17 billion for the fourth quarter of 2023. The yield on average loans for the first quarter increased 12 basis points to 6.00%, from 5.88% for the fourth quarter of 2023. Average loans were $6.14 billion for the first quarter, up 1.1% from $6.07 billion for the fourth quarter of 2023. First quarter loan prepayment fees were $0.2 million, compared to $0.1 million for the fourth quarter of 2023. Net interest margin (taxable-equivalent) for the first quarter was 2.78%, compared with 2.92% for the fourth quarter of 2023.   As of or For the Three Months Ended (in thousands)   Percentage Change   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,   Q1-24   Q1-24 Net Interest Income 2024   2023   2023   2023   2023   vs. Q4-23   vs. Q1-23                             Interest and fees on loans receivable(1) $ 91,674     $ 89,922     $ 85,398     $ 83,567     $ 80,923       1.9 %     13.3 % Interest on securities   4,955       4,583       4,204       4,126       4,025       8.1 %     23.1 % Dividends on FHLB stock   361       341       317       283       289       5.9 %     24.9 % Interest on deposits in other banks   2,604       2,337       4,153       2,794       2,066       11.4 %     26.0 % Total interest and dividend income $ 99,594     $ 97,183     $ 94,072     $ 90,770     $ 87,303       2.5 %     14.1 %                             Interest on deposits   45,638       40,277       36,818       32,115       25,498       13.3 %     79.0 % Interest on borrowings   1,655       2,112       753       1,633       2,369       -21.6 %     -30.1 % Interest on subordinated debentures   1,646       1,654       1,646       1,600       1,583       -0.5 %     4.0 % Total interest expense   48,939       44,043       39,217       35,348       29,450       11.1 %     66.2 % Net interest income $ 50,655     $ 53,140     $ 54,855     $ 55,422     $ 57,853       -4.7 %     -12.4 %                             (1)       Includes loans held for sale.                               For the Three Months Ended (in thousands)   Percentage Change   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,   Q1-24   Q1-24 Average Earning Assets and Interest-bearing Liabilities 2024   2023   2023   2023   2023   vs. Q4-23   vs. Q1-23 Loans receivable (1) $ 6,137,888     $ 6,071,644     $ 5,915,423     $ 5,941,071     $ 5,944,399       1.1 %     3.3 % Securities   969,520       961,551       955,473       971,531       980,712       0.8 %     -1.1 % FHLB stock   16,385       16,385       16,385       16,385       16,385       0.0 %     0.0 % Interest-bearing deposits in other banks   201,724       181,140       317,498       230,974       192,902       11.4 %     4.6 % Average interest-earning assets $ 7,325,517     $ 7,230,720     $ 7,204,779     $ 7,159,961     $ 7,134,398       1.3 %     2.7 %                             Demand: interest-bearing $ 86,401     $ 86,679     $ 94,703     $ 99,057     $ 109,391       -0.3 %     -21.0 % Money market and savings   1,815,085       1,669,973       1,601,826       1,463,304       1,453,569       8.7 %     24.9 % Time deposits   2,507,830       2,417,803       2,438,112       2,403,685       2,223,615       3.7 %     12.8 % Average interest-bearing deposits   4,409,316       4,174,455       4,134,641       3,966,046       3,786,575       5.6 %     16.4 % Borrowings   162,418       205,951       120,381       196,776       268,056       -21.1 %     -39.4 % Subordinated debentures   130,088       129,933       129,780       129,631       129,483       0.1 %     0.5 % Average interest-bearing liabilities $ 4,701,822     $ 4,510,339     $ 4,384,802     $ 4,292,453     $ 4,184,114       4.2 %     12.4 %                             Average Noninterest Bearing Deposits                           Demand deposits - noninterest bearing $ 1,921,189     $ 2,025,212     $ 2,136,156     $ 2,213,171     $ 2,324,413       -5.1 %     -17.3 %                             (1)       Includes loans held for sale.                               For the Three Months Ended   Yield/Rate Change   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,   Q1-24   Q1-24 Average Yields and Rates 2024   2023   2023   2023   2023   vs. Q4-23   vs. Q1-23 Loans receivable(1)   6.00 %     5.88 %     5.73 %     5.64 %     5.51 %     0.12       0.49   Securities (2)   2.07 %     1.93 %     1.79 %     1.73 %     1.67 %     0.14       0.40   FHLB stock   8.87 %     8.25 %     7.67 %     6.92 %     7.16 %     0.62       1.71   Interest-bearing deposits in other banks   5.19 %     5.12 %     5.19 %     4.85 %     4.34 %     0.07       0.85   Interest-earning assets   5.47 %     5.34 %     5.19 %     5.09 %     4.96 %     0.13       0.51                               Interest-bearing deposits   4.16 %     3.83 %     3.53 %     3.25 %     2.73 %     0.33       1.43   Borrowings   4.10 %     4.07 %     2.48 %     3.33 %     3.58 %     0.03       0.51   Subordinated debentures   5.06 %     5.09 %     5.07 %     4.94 %     4.89 %     -0.03       0.17   Interest-bearing liabilities   4.19 %     3.88 %     3.55 %     3.30 %     2.85 %     0.31       1.34                               Net interest margin (taxable equivalent basis)   2.78 %     2.92 %     3.03 %     3.11 %     3.28 %     -0.14       -0.50                               Cost of deposits   2.90 %     2.58 %     2.33 %     2.08 %     1.69 %     0.32       1.21                               (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 first quarter was $0.2 million, compared to a credit loss recovery of $2.9 million for the fourth quarter of 2023. First quarter credit loss expense included a $0.4 million credit loss expense for loan losses, offset by a $0.2 million recovery for off-balance sheet items. First quarter net loan charge-offs were $1.6 million, compared to fourth quarter of 2023 net loan recoveries of $5.0 million that included a $6.0 million recovery from a 2019 troubled loan relationship. Noninterest income for the first quarter increased $1.1 million to $7.7 million, or 15.8%, from $6.7 million for the fourth quarter of 2023. The increase primarily reflected a $0.4 million gain on sale of residential mortgage loans, a $0.3 million valuation adjustment to bank-owned life insurance in the fourth quarter of 2023, and a $0.2 million increase in trade finance and other service charges and fees. Additionally, gains on sales of SBA loans remained stable at $1.5 million. The volume of SBA loans sold in the first quarter decreased to $25.6 million, from $29.9 million for the fourth quarter of 2023, while trade premiums increased to 7.23% for the first quarter, from 6.17% for the fourth quarter of 2023.   For the Three Months Ended (in thousands)   Percentage Change   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,   Q1-24   Q1-24 Noninterest Income 2024   2023   2023   2023   2023   vs. Q4-23   vs. Q1-23 Service charges on deposit accounts $ 2,450     $ 2,391     $ 2,605     $ 2,571     $ 2,579       2.5 %     -5.0 % Trade finance and other service charges and fees   1,414       1,245       1,155       1,173       1,258       13.6 %     12.4 % Servicing income   712       772       838       825       742       -7.8 %     -4.0 % Bank-owned life insurance income (expense)   304       (29 )     280       271       270       1148.3 %     12.6 % All other operating income   928       853       1,178       1,811       1,618       8.8 %     -42.6 % Service charges, fees & other   5,808       5,232       6,056       6,651       6,467       11.0 %     -10.2 %                             Gain on sale of SBA loans   1,482       1,448       1,172       1,212       1,869       2.3 %     -20.7 % Gain on sale of mortgage loans   443       -       -       -       -       0.0 %     0.0 % Net gain (loss) on sales of securities   -       -       -       (1,871 )     -       0.0 %     0.0 % Gain (loss) on sale of bank premises   -       -       4,000       -       -       0.0 %     0.0 % Legal settlement   -       -       -       1,943       -       0.0 %     0.0 % Total noninterest income $ 7,733     $ 6,680     $ 11,228     $ 7,935     $ 8,336       15.8 %     -7.2 %                             Noninterest expense for the first quarter increased by $1.2 million to $36.4 million from $35.2 million for the fourth quarter of 2023. The increase was ...