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Hanmi Reports 2025 First Quarter Results

1. HAFC's Q1 2025 net income remained steady at $17.7 million. 2. The net interest margin increased to 3.02%, expanding for three successive quarters. 3. Deposits rose by 3%, indicating strong growth in new accounts. 4. Loan production increased to $345.9 million, with a rise in residential mortgages. 5. Nonperforming loans increased significantly to $35.6 million, raising concern.

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FAQ

Why Bullish?

While earnings remained stable, expansion in key metrics suggests growth potential. A consistent net interest margin increase demonstrates effective cost management.

How important is it?

The reported results reflect strategic operational growth, directly enhancing investor confidence in HAFC.

Why Short Term?

Recent performance indicators suggest immediate opportunities for price growth, especially with ongoing loan production and deposit acquisition.

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LOS ANGELES, April 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 first quarter of 2025. Net income for the first quarter of 2025 was $17.7 million, or $0.58 per diluted share, unchanged from the fourth quarter of 2024. The return on average assets for the first quarter of 2025 was 0.94% and the return on average equity was 8.92%, compared with a return on average assets of 0.93% and a return on average equity of 8.89% for the fourth quarter of 2024. CEO Commentary “Our team delivered strong results in the first quarter with solid operating performance across all of our business lines,” said Bonnie Lee, President and Chief Executive Officer. “We achieved our third consecutive quarter of net interest margin expansion, up 11 basis points to 3.02%, primarily driven by lower funding costs.” “Deposits increased 3% driven by new commercial accounts and contributions from our newly opened branches, a testament to our core relationship-based banking model. Loan production was solid, fueled by healthy originations in residential mortgages and our SBA business. Importantly, we maintained our strong credit quality, and continued to effectively manage our operating expenses, resulting in our best quarterly efficiency ratio since the fourth quarter of 2023.” “Overall, our first quarter results were well-balanced and reflected continued growth and positive momentum, including the successful opening of a new branch in the Atlanta region. Despite elevated macroeconomic uncertainty, our team’s focus, discipline, and commitment to providing exceptional service and market leading products positions us well to deliver long-term value to our shareholders.” First Quarter 2025 Highlights:         First quarter net income was $17.7 million, or $0.58 per diluted share, unchanged from fourth quarter of 2024. Preprovision net revenues increased 5.9% from the prior quarter reflecting growth in net interest income, an expanding net interest margin, a solid contribution from fee-based activities, and disciplined expense management.Loans receivable were $6.28 billion at March 31, 2025, up 0.5% from the end of the fourth quarter of 2024; loan production for the first quarter was $345.9 million, with a weighted average interest rate of 7.35%, compared with loan production for the fourth quarter of $339.0 million, with a weighted average interest rate of 7.37%.Deposits were $6.62 billion at March 31, 2025, up 2.9% from the end of the fourth quarter of 2024; noninterest-bearing demand deposits at March 31, 2025 were 31.2% of total deposits.Net interest income for the first quarter was $55.1 million, up 3.1% from the fourth quarter of 2024. Net interest margin (taxable equivalent) increased 11 basis points to 3.02%; the average yield on loans declined two basis points to 5.95%, while the cost of interest-bearing deposits fell 27 basis points to 3.69%.Credit loss expense for the first quarter was $2.7 million, an increase from $0.9 million for the prior quarter. The allowance for credit losses increased $0.5 million to $70.6 million at March 31, 2025, or 1.12% of loans. For the first quarter, net loan charge-offs were $1.9 million, or 0.13% of average loans (annualized).Nonperforming loans were $35.6 million at March 31, 2025, or 0.57% of loans. Criticized loans decreased to $164.9 million, as special mention loans decreased to $118.4 million, while classified loans increased to $46.5 million. For more information about Hanmi, please see the Q1 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  March 31,  December 31,  September 30,  June 30,  March 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24                      Net income$17,672  $17,695  $14,892  $14,451  $15,164  $(23) $2,508 Net income per diluted common share$0.58  $0.58  $0.49  $0.48  $0.50  $-  $0.08                      Assets$7,729,035  $7,677,925  $7,712,299  $7,586,347  $7,512,046  $51,110  $216,989 Loans receivable$6,282,189  $6,251,377  $6,257,744  $6,176,359  $6,177,840  $30,812  $104,349 Deposits$6,619,475  $6,435,776  $6,403,221  $6,329,340  $6,376,060  $183,699  $243,415                      Return on average assets 0.94%  0.93%  0.79%  0.77%  0.81%  0.01   0.13 Return on average stockholders' equity 8.92%  8.89%  7.55%  7.50%  7.90%  0.03   1.02                      Net interest margin 3.02%  2.91%  2.74%  2.69%  2.78%  0.11   0.24 Efficiency ratio (1) 55.69%  56.79%  59.98%  62.24%  62.42%  -1.10   -6.73                      Tangible common equity to tangible assets (2) 9.59%  9.41%  9.42%  9.19%  9.23%  0.18   0.36 Tangible common equity per common share (2)$24.49  $23.88  $24.03  $22.99  $22.86   0.61   1.63                                           (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 was $55.1 million, up 3.1% from $53.4 million for the fourth quarter of 2024. The increase was primarily due to a decrease in deposit interest expense from a decrease in deposit rates. The average rate paid on interest-bearing deposits for the fourth quarter decreased 27 basis points to 3.69% from 3.96% for the fourth quarter of 2024, primarily due to the decrease in the average cost of time deposits to 4.17% for the first quarter from 4.55% for the fourth quarter of 2024. The average balance of interest-bearing deposits increased to $4.46 billion for the first quarter of 2025 from $4.36 billion for the fourth quarter. The average balance of time deposits was $2.35 billion for the first quarter of 2025, essentially unchanged from the fourth quarter. The average balance of noninterest-bearing deposits for the first quarter decreased to $1.90 billion from $1.97 billion for the fourth quarter of 2024. Net interest margin (taxable equivalent) for the first quarter was 3.02%, up 11 basis points from 2.91% for the fourth quarter of 2024.  For the Three Months Ended (in thousands)  Percentage Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25 Net Interest Income2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24                      Interest and fees on loans receivable (1)$90,887  $91,545  $92,182  $90,752  $91,674  -0.7% -0.9%Interest on securities 6,169   5,866   5,523   5,238   4,955  5.2% 24.5%Dividends on FHLB stock 360   360   356   357   361  0.0% -0.3%Interest on deposits in other banks 1,841   2,342   2,356   2,313   2,604  -21.4% -29.3%Total interest and dividend income$99,257  $100,113  $100,417  $98,660  $99,594  -0.9% -0.3%                     Interest on deposits 40,559   43,406   47,153   46,495   45,638  -6.6% -11.1%Interest on borrowings 2,024   1,634   1,561   1,896   1,655  23.9% 22.3%Interest on subordinated debentures 1,582   1,624   1,652   1,649   1,646  -2.6% -3.9%Total interest expense 44,165   46,664   50,366   50,040   48,939  -5.4% -9.8%Net interest income$55,092  $53,449  $50,051  $48,620  $50,655  3.1% 8.8%                     (1) Includes loans held for sale.                                           For the Three Months Ended (in thousands)  Percentage Change Average Earning Assets and Interest-bearing LiabilitiesMar 31, 2025  Dec 31, 2024  Sep 30, 2024  Jun 30, 2024   Mar 31, 2024  Q1-25 vs. Q4-24  Q1-25 vs. Q1-24 Loans receivable (1)$6,189,531  $6,103,264  $6,112,324  $6,089,440  $6,137,888  1.4% 0.8%Securities 1,001,499   998,313   986,041   979,671   969,520  0.3% 3.3%FHLB stock 16,385   16,385   16,385   16,385   16,385  0.0% 0.0%Interest-bearing deposits in other banks 176,028   204,408   183,027   180,177   201,724  -13.9% -12.7%Average interest-earning assets$7,383,443  $7,322,370  $7,297,777  $7,265,673  $7,325,517  0.8% 0.8%                     Demand: interest-bearing$79,369  $79,784  $83,647  $85,443  $86,401  -0.5% -8.1%Money market and savings 2,037,224   1,934,540   1,885,799   1,845,870   1,815,085  5.3% 12.2%Time deposits 2,345,346   2,346,363   2,427,737   2,453,154   2,507,830  0.0% -6.5%Average interest-bearing deposits 4,461,939   4,360,687   4,397,183   4,384,467   4,409,316  2.3% 1.2%Borrowings 179,444   141,604   143,479   169,525   162,418  26.7% 10.5%Subordinated debentures 130,718   130,567   130,403   130,239   130,088  0.1% 0.5%Average interest-bearing liabilities$4,772,101  $4,632,858  $4,671,065  $4,684,231  $4,701,822  3.0% 1.5%                     Average Noninterest Bearing Deposits                    Demand deposits - noninterest bearing$1,895,953  $1,967,789  $1,908,833  $1,883,765  $1,921,189  -3.7% -1.3%                     (1) Includes loans held for sale.                                           For the Three Months Ended  Yield/Rate Change Average YieldsMar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25 and Rates2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Loans receivable (1)5.95% 5.97% 6.00% 5.99% 6.00% -0.02  -0.05 Securities (2)2.49% 2.38% 2.27% 2.17% 2.07% 0.11  0.42 FHLB stock8.92% 8.75% 8.65% 8.77% 8.87% 0.17  0.05 Interest-bearing deposits in other banks4.24% 4.56% 5.12% 5.16% 5.19% -0.32  -0.95 Interest-earning assets5.45% 5.45% 5.48% 5.46% 5.47% 0.00  -0.02                      Interest-bearing deposits3.69% 3.96% 4.27% 4.27% 4.16% -0.27  -0.47 Borrowings4.57% 4.59% 4.33% 4.50% 4.10% -0.02  0.47 Subordinated debentures4.84% 4.97% 5.07% 5.07% 5.06% -0.13  -0.22 Interest-bearing liabilities3.75% 4.01% 4.29% 4.30% 4.19% -0.26  -0.44                      Net interest margin (taxable equivalent basis)3.02% 2.91% 2.74% 2.69% 2.78% 0.11  0.24                      Cost of deposits2.59% 2.73% 2.97% 2.98% 2.90% -0.14  -0.31                      (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 $2.7 million, compared with $0.9 million for the fourth quarter of 2024. 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 first quarter increased $0.3 million, or 5.0%, to $7.7 million from $7.4 million for the fourth quarter of 2024. The increase was primarily due to a $0.6 million increase on gains from the sale of SBA loans. Gains on sales of SBA loans were $2.0 million for the first quarter of 2025, compared with $1.4 million for the fourth quarter of 2024. The volume of SBA loans sold for the first quarter increased to $32.2 million from $21.6 million for the fourth quarter of 2024, while trade premiums were 7.82% for the first quarter of 2025 compared with 8.53% for the fourth quarter. Mortgage loans sold for the first quarter were $10.0 million, with a premium of 2.50%, compared with $18.3 million and 1.96% for the fourth quarter. Gains on mortgage loans sold were $0.2 million for the first quarter, compared with $0.3 million for the fourth quarter.  For the Three Months Ended (in thousands)  Percentage Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25 Noninterest Income2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Service charges on deposit accounts$2,217  $2,192  $2,311  $2,429  $2,450  1.1% -9.5%Trade finance and other service charges and fees 1,396   1,364   1,254   1,277   1,414  2.3% -1.3%Servicing income 732   668   817   796   712  9.6% 2.8%Bank-owned life insurance income 309   316   320   638   304  -2.2% 1.6%All other operating income 897   1,037   1,008   908   928  -13.5% -3.3%Service charges, fees & other 5,551   5,577   5,710   6,048   5,808  -0.5% -4.4%                     Gain on sale of SBA loans 2,000   1,443   1,544   1,644   1,482  38.6% 35.0%Gain on sale of mortgage loans 175   337   324   365   443  -48.1% -60.5%Gain on sale of bank premises -   -   860   -   -  0.0% 0.0%Total noninterest income$7,726  $7,357  $8,438  $8,057  $7,733  5.0% -0.1%                      Noninterest expense for the first quarter increased $0.5 million to $35.0 million from $34.5 million for the fourth quarter of 2024. The increase was primarily due to a $1.6 million gain on the sale of an other-real-estate-owned property in the fourth quarter. Absent this gain, first quarter noninterest expense was down 3.2% sequentially due to decreases in professional fees, advertising and promotion, and other operating expenses, partially offset by a $0.5 million increase in salaries and benefits, which reflected seasonal first quarter increases. All other operating expenses decreased $0.7 million for the first quarter primarily due to the absence of a fourth quarter $0.5 million charge related to an SBA loan acquired in a previous acquisition. The efficiency ratio improved during the first quarter to 55.7%, compared with 56.8% for the fourth quarter of 2024.  For the Three Months Ended (in thousands)  Percentage Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Noninterest Expense                    Salaries and employee benefits$20,972  $20,498  $20,851  $20,434  $21,585  2.3% -2.8%Occupancy and equipment 4,450   4,503   4,499   4,348   4,537  -1.2% -1.9%Data processing 3,787   3,800   3,839   3,686   3,551  -0.3% 6.6%Professional fees 1,468   1,821   1,492   1,749   1,893  -19.4% -22.5%Supplies and communication 517   551   538   570   601  -6.2% -14.0%Advertising and promotion 585   821   631   669   907  -28.7% -35.5%All other operating expenses 3,175   3,847   2,875   3,251   3,160  -17.5% 0.5%Subtotal 34,954   35,841   34,725   34,707   36,234  -2.5% -3.5%                     Branch consolidation expense -   -   -   301   -  0.0% 0.0%Other real estate owned expense (income) 41   (1,588)  77   6   22  102.6% 86.4%Repossessed personal property expense (income) (11)  281   278   262   189  -103.9% -105.8%Total noninterest expense$34,984  $34,534  $35,080  $35,276  $36,445  1.3% -4.0%                      Hanmi recorded a provision for income taxes of $7.4 million for the first quarter of 2025, compared with $7.6 million for the fourth quarter of 2024, representing an effective tax rate of 29.6% and 30.1%, respectively. Financial PositionTotal assets at March 31, 2025 increased 0.7%, or $51.1 million, to $7.73 billion from $7.68 billion at December 31, 2024. The increase reflected a $30.4 million increase in loans and a $24.2 million increase in cash, offset partially by a $7.6 million decrease in prepaid expenses and other assets. Loans receivable, before allowance for credit losses, were $6.28 billion at March 31, 2025, up from $6.25 billion at December 31, 2024. Loans held-for-sale were $11.8 million at March 31, 2025, up from $8.6 million at December 31, 2024. At the end of the first quarter, loans held-for-sale consisted of the guaranteed portion of SBA 7(a) loans.  As of (in thousands)  Percentage Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Loan Portfolio                    Commercial real estate loans$3,975,651  $3,949,622  $3,932,088  $3,888,505  $3,878,677  0.7% 2.5%Residential/consumer loans 979,536   951,302   939,285   954,209   970,362  3.0% 0.9%Commercial and industrial loans 854,406   863,431   879,092   802,372   774,851  -1.0% 10.3%Equipment finance 472,596   487,022   507,279   531,273   553,950  -3.0% -14.7%Loans receivable 6,282,189   6,251,377   6,257,744   6,176,359   6,177,840  0.5% 1.7%Loans held for sale 11,831   8,579   54,336   10,467   3,999  37.9% 195.8%Total$6,294,020  $6,259,956  $6,312,080  $6,186,826  $6,181,839  0.5% 1.8%                            As of  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  2025  2024  2024  2024  2024 Composition of Loan Portfolio              Commercial real estate loans63.1% 63.1% 62.3% 62.9% 62.7%Residential/consumer loans15.6% 15.2% 14.9% 15.4% 15.7%Commercial and industrial loans13.6% 13.8% 13.9% 13.0% 12.5%Equipment finance7.5% 7.8% 8.0% 8.5% 9.0%Loans receivable99.8% 99.9% 99.1% 99.8% 99.9%Loans held for sale0.2% 0.1% 0.9% 0.2% 0.1%Total100.0% 100.0% 100.0% 100.0% 100.0%                New loan production was $345.9 million for the first quarter of 2025 with an average rate of 7.35%, while payoffs were $125.1 million during the quarter at an average rate of 6.40%. Commercial real estate loan production for the first quarter of 2025 was $146.6 million. Commercial and industrial loan production was $42.3 million, SBA loan production was $55.2 million, equipment finance production was $46.7 million, and residential mortgage loan production was $55.0 million.  For the Three Months Ended (in thousands)  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  2025  2024  2024  2024  2024 New Loan Production              Commercial real estate loans$146,606  $146,716  $110,246  $87,632  $60,085 Residential/consumer loans 55,000   40,225   40,758   30,194   53,115 Commercial and industrial loans 42,344   60,159   105,086   59,007   50,789 Equipment finance 46,749   42,168   40,066   42,594   39,155 SBA loans 55,242   49,740   51,616   54,486   30,817 subtotal 345,941   339,008   347,772   273,913   233,961                               Payoffs (125,102)  (137,933)  (77,603)  (148,400)  (86,250)Amortization (90,743)  (60,583)  (151,674)  (83,640)  (90,711)Loan sales (42,193)  (67,852)  (43,868)  (42,945)  (55,321)Net line utilization (53,901)  (75,651)  9,426   1,929   (4,150)Charge-offs & OREO (3,190)  (3,356)  (2,668)  (2,338)  (2,123)               Loans receivable-beginning balance 6,251,377   6,257,744   6,176,359   6,177,840   6,182,434 Loans receivable-ending balance$6,282,189  $6,251,377  $6,257,744  $6,176,359  $6,177,840                      Deposits were $6.62 billion at the end of the first quarter of 2025, up $183.7 million, or 2.9%, from $6.44 billion at the end of the prior quarter. Driving the change was a $140.4 million increase in money market and savings deposits and a $72.8 million increase in time deposits, partially offset by a $30.0 million decrease in noninterest-bearing demand deposits. Noninterest-bearing demand deposits represented 31.2% of total deposits at March 31, 2025 and the loan-to-deposit ratio was 94.9%.  As of (in thousands)  Percentage Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Deposit Portfolio                    Demand: noninterest-bearing$2,066,659  $2,096,634  $2,051,790  $1,959,963  $1,933,060  -1.4% 6.9%Demand: interest-bearing 80,790   80,323   79,287   82,981   87,374  0.6% -7.5%Money market and savings 2,073,943   1,933,535   1,898,834   1,834,797   1,859,865  7.3% 11.5%Time deposits 2,398,083   2,325,284   2,373,310   2,451,599   2,495,761  3.1% -3.9%Total deposits$6,619,475  $6,435,776  $6,403,221  $6,329,340  $6,376,060  2.9% 3.8%                            As of  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  2025  2024  2024  2024  2024 Composition of Deposit Portfolio              Demand: noninterest-bearing31.2% 32.6% 32.0% 31.0% 30.3%Demand: interest-bearing1.2% 1.2% 1.2% 1.3% 1.4%Money market and savings31.3% 30.0% 29.7% 29.0% 29.2%Time deposits36.3% 36.2% 37.1% 38.7% 39.1%Total deposits100.0% 100.0% 100.0% 100.0% 100.0% Stockholders’ equity at March 31, 2025 was $751.5 million, up $19.3 million from $732.2 million at December 31, 2024. The increase included $9.5 million in net income, net of dividends paid, for the first quarter. In addition, the increase in stockholders' equity included a $10.4 million decrease in unrealized after-tax losses on securities available for sale, and a $0.3 million decrease in unrealized after-tax losses on cash flow hedges, due to changes in interest rates during the first quarter of 2025. Hanmi also repurchased 50,000 shares of common stock at a cost of $1.1 million, for an average share price of $22.49, during the quarter. At March 31, 2025, 1,180,500 shares remain under Hanmi’s share repurchase program. Tangible common stockholders’ equity was $740.5 million, or 9.59% of tangible assets at March 31, 2025 compared with $721.1 million, or 9.41% of tangible assets at the end of the prior quarter. Please refer to the Non-GAAP Financial Measures section below for more information. Hanmi and the Bank exceeded minimum regulatory capital requirements, and the Bank continues to exceed the minimum for the “well capitalized” category. At March 31, 2025, Hanmi’s preliminary common equity tier 1 capital ratio was 12.13% and its total risk-based capital ratio was 15.29%, compared with 12.11% and 15.24%, respectively, at the end of the prior quarter.  As of  Ratio Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Regulatory Capital ratios (1)                    Hanmi Financial                    Total risk-based capital15.29% 15.24% 15.03% 15.24% 15.20% 0.05  0.09 Tier 1 risk-based capital12.47% 12.46% 12.29% 12.46% 12.40% 0.01  0.07 Common equity tier 1 capital12.13% 12.11% 11.95% 12.11% 12.05% 0.02  0.08 Tier 1 leverage capital ratio10.67% 10.63% 10.56% 10.51% 10.36% 0.04  0.31 Hanmi Bank                    Total risk-based capital14.48% 14.43% 14.27% 14.51% 14.50% 0.05  -0.02 Tier 1 risk-based capital13.35% 13.36% 13.23% 13.47% 13.44% -0.01  -0.09 Common equity tier 1 capital13.35% 13.36% 13.23% 13.47% 13.44% -0.01  -0.09 Tier 1 leverage capital ratio11.49% 11.47% 11.43% 11.41% 11.29% 0.02  0.20                      (1) Preliminary ratios for March 31, 2025                                          Asset Quality Loans 30 to 89 days past due and still accruing were 0.28% of loans at the end of the first quarter of 2025, compared with 0.30% at the end of the prior quarter. Criticized loans totaled $164.9 million at March 31, 2025, down from $165.3 million at the end of the fourth quarter of 2024. The $0.4 million decrease resulted from a $21.2 million decrease in special mention loans, partially offset by a $20.8 million increase in classified loans. The $21.2 million decrease in special mention loans included loan upgrades of $20.5 million and amortization/paydowns of $0.9 million, offset by additions of $0.2 million. The $20.8 million increase in classified loans resulted from $22.8 million of loan downgrades and $3.4 million of equipment financing downgrades. Loan downgrades were primarily the result of a $20.0 million syndicated commercial real estate office loan designated as nonaccrual during the first quarter of 2025. Additions were offset by $2.7 million of equipment financing  charge-offs, $1.1 million of payoffs, $1.0 million of amortization/paydowns, $0.3 million of loan charge-offs and $0.3 million of loan upgrades. Nonperforming loans were $35.6 million at March 31, 2025, up from $14.3 million at the end of the prior quarter. The $21.3 million increase primarily reflects additions of $26.1 million, offset by charge-offs of $3.0 million, pay-offs of $0.8 million, $0.9 million in paydowns, and loan upgrades of $0.1 million. Additions included $23.0 million of loans and $3.1 million of equipment financing agreements. Loan additions were driven primarily by the previously mentioned $20.0 million commercial real estate loan designated as nonaccrual during the first quarter of 2025. Nonperforming assets were $35.7 million at March 31, 2025, up from $14.4 million at the end of the prior quarter. As a percentage of total assets, nonperforming assets were 0.46% at March 31, 2025, and 0.19% at the end of the prior quarter. Gross charge-offs for the first quarter of 2025 were $3.2 million, compared with $3.4 million for the preceding quarter. Charge-offs included $2.8 million on equipment financing agreements. Recoveries of previously charged-off loans were $1.3 million in the first quarter of 2025, which included $0.8 million of recoveries on equipment financing agreements. As a result, there were $1.9 million of net charge-offs for the first quarter of 2025, compared to net recoveries of $0.1 million for the prior quarter. The allowance for credit losses was $70.6 million at March 31, 2025, compared with $70.1 million at December 31, 2024. Specific allowances for loans increased $5.6 million because of a $6.2 million specific allowance on the previously mentioned $20.0 million commercial real estate loan designated as nonaccrual during the first quarter of 2025, and collectively evaluated allowances decreased $5.2 million. The ratio of the allowance for credit losses to loans was 1.12% at March 31, 2025 and at the end of the prior quarter.  As of or for the Three Months Ended (in thousands)  Amount Change  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  Q1-25  Q1-25  2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Asset Quality Data and Ratios                                         Delinquent loans:                    Loans, 30 to 89 days past due and still accruing$17,312  $18,454  $15,027  $13,844  $15,839  $(1,142) $1,473 Delinquent loans to total loans 0.28%  0.30%  0.24%  0.22%  0.26%  (0.02)  0.02                      Criticized loans:                    Special mention$118,380  $139,612  $131,575  $36,921  $62,317  $(21,232) $56,063 Classified 46,519   25,683   28,377   33,945   23,670   20,836   22,849 Total criticized loans (1)$164,899  $165,295  $159,952  $70,866  $85,987  $(396) $78,912                      Criticized loans to total loans 2.62%  2.64%  2.56%  1.15%  1.39%  (0.02)  1.23                      Nonperforming assets:                    Nonaccrual loans$35,459  $14,272  $15,248  $19,245  $14,025  $21,187  $21,434 Loans 90 days or more past due and still accruing 112   -   242   -   -   112   112 Nonperforming loans (2) 35,571   14,272   15,490   19,245   14,025   21,299   21,546 Other real estate owned, net 117   117   772   772   117   -   - Nonperforming assets (3)$35,688  $14,389  $16,262  $20,017  $14,142  $21,299  $21,546                      Nonperforming assets to assets (2) 0.46%  0.19%  0.21%  0.26%  0.19%  0.27   0.27 Nonperforming loans to total loans 0.57%  0.23%  0.25%  0.31%  0.23%  0.34   0.34                      (1) Includes nonaccrual loans of $34.4 million, $13.4 million, $13.6 million, $18.4 million, and $14.0 million as of Q1-25, Q4-24, Q3-24, Q2-24, and Q1-24, respectively. (2) Excludes a $27.2 million nonperforming loan held-for-sale as of September 30, 2024.    (3) Excludes repossessed personal property of $0.7 million, $0.6 million, $1.2 million, $1.2 million, and $1.3 million as of Q1-25, Q4-24, Q3-24, Q2-24, and Q1-24, respectively.     As of or for the Three Months Ended (in thousands)  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Mar 31,  2025  2024  2024  2024  2024 Allowance for credit losses related to loans:              Balance at beginning of period$70,147  $69,163  $67,729  $68,270  $69,462 Credit loss expense (recovery) on loans 2,396   855   2,312   1,248   404 Net loan (charge-offs) recoveries (1,946)  129   (878)  (1,789)  (1,596)Balance at end of period$70,597  $70,147  $69,163  $67,729  $68,270                Net loan charge-offs (recoveries) to average loans (1) 0.13%  -0.01%  0.06%  0.12%  0.10%Allowance for credit losses to loans 1.12%  1.12%  1.11%  1.10%  1.11%               Allowance for credit losses related to off-balance sheet items:              Balance at beginning of period$2,074  $1,984  $2,010  $2,297  $2,474 Credit loss expense (recovery) on off-balance sheet items 325   90   (26)  (287)  (177)Balance at end of period$2,399  $2,074  $1,984  $2,010  $2,297                Unused commitments to extend credit$896,282  $782,587  $739,975  $795,391  $792,769                (1) Annualized               Corporate DevelopmentsOn January 28, 2025, Hanmi’s Board of Directors declared a cash dividend on its common stock for the 2025 first quarter of $0.27 per share. Hanmi paid the dividend on February 26, 2025, to stockholders of record as of the close of business on February 10, 2025. Earnings Conference Call        Hanmi Bank will host its first quarter 2025 earnings conference call today, April 22, 2025, at 2:00 p.m. PST (5:00 p.m. EST) to discuss these results. This call will also be webcast. To access the call, please dial 1-877-407-9039 before 2:00 p.m. PST, using access code Hanmi Bank. To listen to the call online, either live or archived, please visit Hanmi’s Investor Relations website at https://investors.hanmi.com/ where it will also be available for replay approximately one hour following the call. About Hanmi Financial Corporation Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 32 full-service branches and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com. Forward-Looking Statements This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about our anticipated future operating and financial performance, financial position and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that our forward-looking statements to be reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. These factors include the following: a failure to maintain adequate levels of capital and liquidity to support our operations;general economic and business conditions internationally, nationally and in those areas in which we operate, including any potential recessionary conditions;volatility and deterioration in the credit and equity markets;changes in consumer spending, borrowing and savings habits;availability of capital from private and government sources;demographic changes;competition for loans and deposits and failure to attract or retain loans and deposits;inflation and fluctuations in interest rates that reduce our margins and yields, the fair value of financial instruments, the level of loan originations or prepayments on loans we have made and make, the level of loan sales and the cost we pay to retain and attract deposits and secure other types of funding;our ability to enter new markets successfully and capitalize on growth opportunities;the current or anticipated impact of military conflict, terrorism or other geopolitical events;the effect of potential future supervisory action against us or Hanmi Bank and our ability to address any issues raised in our regulatory exams;risks of natural disasters;legal proceedings and litigation brought against us;a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;the failure to maintain current technologies;risks associated with Small Business Administration loans;failure to attract or retain key employees;our ability to access cost-effective funding;the imposition of tariffs or other domestic or international governmental policies;changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;fluctuations in real estate values;changes in accounting policies and practices;changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests;strategic transactions we may enter into;the adequacy of and changes in the methodology for computing our allowance for credit losses;our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses;changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;our ability to control expenses; andcyber security and fraud risks against our information technology and those of our third-party providers and vendors. In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law. Investor Contacts:Romolo (Ron) SantarosaSenior Executive Vice President & Chief Financial Officer213-427-5636 Lisa FortunaInvestor RelationsFinancial Profiles, Inc.lfortuna@finprofiles.com 310-622-8251 Hanmi Financial Corporation and SubsidiariesConsolidated Balance Sheets (Unaudited)(Dollars in thousands)  March 31,  December 31,  Percentage  March 31,  Percentage  2025  2024  Change  2024  Change Assets              Cash and due from banks$329,003  $304,800   7.9% $256,038   28.5%Securities available for sale, at fair value 907,011   905,798   0.1%  872,190   4.0%Loans held for sale, at the lower of cost or fair value 11,831   8,579   37.9%  3,999   195.8%Loans receivable, net of allowance for credit losses 6,211,592   6,181,230   0.5%  6,109,570   1.7%Accrued interest receivable 23,536   22,937   2.6%  23,032   2.2%Premises and equipment, net 20,866   21,404   -2.5%  21,952   -4.9%Customers' liability on acceptances 552   1,226   -55.0%  161   242.9%Servicing assets 6,422   6,457   -0.5%  6,890   -6.8%Goodwill and other intangible assets, net 11,031   11,031   0.0%  11,074   -0.4%Federal Home Loan Bank ("FHLB") stock, at cost 16,385   16,385   0.0%  16,385   0.0%Bank-owned life insurance 57,476   57,168   0.5%  56,639   1.5%Prepaid expenses and other assets 133,330   140,910   -5.4%  134,116   -0.6%Total assets$7,729,035  $7,677,925   0.7% $7,512,046   2.9%               Liabilities and Stockholders' Equity              Liabilities:              Deposits:              Noninterest-bearing$2,066,659  $2,096,634   -1.4% $1,933,060   6.9%Interest-bearing 4,552,816   4,339,142   4.9%  4,443,000   2.5%Total deposits 6,619,475   6,435,776   2.9%  6,376,060   3.8%Accrued interest payable 29,646   34,824   -14.9%  38,007   -22.0%Bank's liability on acceptances 552   1,226   -55.0%  161   242.9%Borrowings 117,500   262,500   -55.2%  172,500   -31.9%Subordinated debentures 130,799   130,638   0.1%  130,165   0.5%Accrued expenses and other liabilities 79,578   80,787   -1.5%  92,053   -13.6%Total liabilities 6,977,550   6,945,751   0.5%  6,808,946   2.5%               Stockholders' equity:              Common stock 34   34   0.0%  34   0.0%Additional paid-in capital 591,942   591,069   0.1%  587,687   0.7%Accumulated other comprehensive income (60,002)  (70,723)  15.2%  (76,890)  22.0%Retained earnings 360,289   350,869   2.7%  326,526   10.3%Less treasury stock (140,778)  (139,075)  -1.2%  (134,257)  -4.9%Total stockholders' equity 751,485   732,174   2.6%  703,100   6.9%Total liabilities and stockholders' equity$7,729,035  $7,677,925   0.7% $7,512,046   2.9%                Hanmi Financial Corporation and Subsidiaries Consolidated Statements of Income (Unaudited)(Dollars in thousands, except share and per share data)  Three Months Ended  March 31,  December 31,  Percentage  March 31,  Percentage  2025  2024  Change  2024  Change Interest and dividend income:              Interest and fees on loans receivable$90,887  $91,545   -0.7% $91,674   -0.9%Interest on securities 6,169   5,866   5.2%  4,955   24.5%Dividends on FHLB stock 360   360   0.0%  361   -0.3%Interest on deposits in other banks 1,841   2,342   -21.4%  2,604   -29.3%Total interest and dividend income 99,257   100,113   -0.9%  99,594   -0.3%Interest expense:              Interest on deposits 40,559   43,406   -6.6%  45,638   -11.1%Interest on borrowings 2,024   1,634   23.9%  1,655   22.3%Interest on subordinated debentures 1,582   1,624   -2.6%  1,646   -3.9%Total interest expense 44,165   46,664   -5.4%  48,939   -9.8%Net interest income before credit loss expense 55,092   53,449   3.1%  50,655   8.8%Credit loss expense 2,721   945   187.9%  227   1098.7%Net interest income after credit loss expense 52,371   52,504   -0.3%  50,428   3.9%Noninterest income:              Service charges on deposit accounts 2,217   2,192   1.1%  2,450   -9.5%Trade finance and other service charges and fees 1,396   1,364   2.3%  1,414   -1.3%Gain on sale of Small Business Administration ("SBA") loans 2,000   1,443   38.6%  1,482   35.0%Other operating income 2,113   2,358   -10.4%  2,387   -11.5%Total noninterest income 7,726   7,357   5.0%  7,733   -0.1%Noninterest expense:              Salaries and employee benefits 20,972   20,498   2.3%  21,585   -2.8%Occupancy and equipment 4,450   4,503   -1.2%  4,537   -1.9%Data processing 3,787   3,800   -0.3%  3,551   6.6%Professional fees 1,468   1,821   -19.4%  1,893   -22.5%Supplies and communications 517   551   -6.2%  601   -14.0%Advertising and promotion 585   821   -28.7%  907   -35.5%Other operating expenses 3,205   2,540   26.2%  3,371   -4.9%Total noninterest expense 34,984   34,534   1.3%  36,445   -4.0%Income before tax 25,113   25,327   -0.8%  21,716   15.6%Income tax expense 7,441   7,632   -2.5%  6,552   13.6%Net income$17,672  $17,695   -0.1% $15,164   16.5%               Basic earnings per share:$0.59  $0.59     $0.50    Diluted earnings per share:$0.58  $0.58     $0.50                   Weighted-average shares outstanding:              Basic 29,937,660   29,933,644      30,119,646    Diluted 30,058,248   30,011,773      30,119,646    Common shares outstanding 30,233,514   30,195,999      30,276,358                       Hanmi Financial Corporation and Subsidiaries Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)(Dollars in thousands)  Three Months Ended  March 31, 2025  December 31, 2024  March 31, 2024     Interest Average     Interest Average     Interest Average  Average  Income / Yield /  Average  Income / Yield /  Average  Income / Yield /  Balance  Expense Rate  Balance  Expense Rate  Balance  Expense Rate Assets                       Interest-earning assets:                       Loans receivable (1)$6,189,531  $90,887 5.95% $6,103,264  $91,545 5.97% $6,137,888  $91,674 6.00%Securities (2) 1,001,499   6,169 2.49%  998,313   5,866 2.38%  969,520   4,955 2.07%FHLB stock 16,385   360 8.92%  16,385   360 8.75%  16,385   361 8.87%Interest-bearing deposits in other banks 176,028   1,841 4.24%  204,408   2,342 4.56%  201,724   2,604 5.19%Total interest-earning assets 7,383,443   99,257 5.45%  7,322,370   100,113 5.45%  7,325,517   99,594 5.47%                        Noninterest-earning assets:                       Cash and due from banks 53,670        54,678        58,382      Allowance for credit losses (69,648)       (69,291)       (69,106)     Other assets 249,148        246,744        244,700                              Total assets$7,616,613       $7,554,501       $7,559,493                              Liabilities and Stockholders' Equity                       Interest-bearing liabilities:                       Deposits:                       Demand: interest-bearing$79,369  $27 0.14% $79,784  $26 0.13% $86,401  $30 0.14%Money market and savings 2,037,224   16,437 3.27%  1,934,540   16,564 3.41%  1,815,085   16,553 3.67%Time deposits 2,345,346   24,095 4.17%  2,346,363   26,816 4.55%  2,507,830   29,055 4.66%Total interest-bearing deposits 4,461,939   40,559 3.69%  4,360,687   43,406 3.96%  4,409,316   45,638 4.16%Borrowings 179,444   2,024 4.57%  141,604   1,634 4.59%  162,418   1,655 4.10%Subordinated debentures 130,718   1,582 4.84%  130,567   1,624 4.97%  130,088   1,646 5.06%Total interest-bearing liabilities 4,772,101   44,165 3.75%  4,632,858   46,664 4.01%  4,701,822   48,939 4.19%                        Noninterest-bearing liabilities and equity:                       Demand deposits: noninterest-bearing 1,895,953        1,967,789        1,921,189      Other liabilities 144,654        162,064        164,524      Stockholders' equity 803,905        791,790        771,958                              Total liabilities and stockholders' equity$7,616,613       $7,554,501       $7,559,493                              Net interest income   $55,092       $53,449       $50,655                           Cost of deposits     2.59%      2.73%      2.90%Net interest spread (taxable equivalent basis)     1.70%      1.44%      1.28%Net interest margin (taxable equivalent basis)     3.02%      2.91%      2.78%                                                                        (1) Includes average loans held for sale.(2) Income calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented. Non-GAAP Financial Measures These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tangible Common Equity to Tangible Assets Ratio Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s capital strength. Tangible common equity is calculated by subtracting goodwill and other intangible assets from stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Hanmi. The following table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated: Tangible Common Equity to Tangible Assets Ratio (Unaudited)(In thousands, except share, per share data and ratios)  March 31,  December 31,  September 30,  June 30,  March 31, Hanmi Financial Corporation2025  2024  2024  2024  2024 Assets$7,729,035  $7,677,925  $7,712,299  $7,586,347  $7,512,046 Less goodwill and other intangible assets (11,031)  (11,031)  (11,031)  (11,048)  (11,074)Tangible assets$7,718,004  $7,666,894  $7,701,268  $7,575,299  $7,500,972                Stockholders' equity (1)$751,485  $732,174  $736,709  $707,059  $703,100 Less goodwill and other intangible assets (11,031)  (11,031)  (11,031)  (11,048)  (11,074)Tangible stockholders' equity (1)$740,454  $721,143  $725,678  $696,011  $692,026                Stockholders' equity to assets 9.72%  9.54%  9.55%  9.32%  9.36%Tangible common equity to tangible assets (1) 9.59%  9.41%  9.42%  9.19%  9.23%               Common shares outstanding 30,233,514   30,195,999   30,196,755   30,272,110   30,276,358 Tangible common equity per common share$24.49  $23.88  $24.03  $22.99  $22.86                               (1) There were no preferred shares outstanding at the periods indicated.      Preprovision Net Revenues Preprovision net revenues is supplemental financial information determined by a method other than in accordance with U.S. GAAP. This non-GAAP measure is used by management to measure Hanmi’s core operational performance, excluding the impact of provisions for loan losses. By isolating preprovision net revenues, management can better understand the Company’s true profitability and make more informed strategic decisions. Preprovision net revenues is calculated adding income tax expense and credit loss expense to net income. Management believes this financial measure highlights the Company's revenue activities and operational efficiency, excluding unpredictable loan loss provisions. The following table details the Company's preprovision net revenues, which are non-GAAP measures, for the periods indicated: Preprovision Net Revenues (Unaudited)(In thousands, except percentages)                 Amount Change Hanmi Financial  March 31,  December 31,  September 30,  June 30,  March 31,  Q1-25  Q1-25 Corporation2025  2024  2024  2024  2024  vs. Q4-24  vs. Q1-24 Net income$17,672  $17,695  $14,892  $14,451  $15,164       Add back:                    Credit loss expense 2,721   945   2,286   961   227       Income tax expense 7,441   7,632   6,231   5,989   6,552       Preprovision net revenues$27,834  $26,272  $23,409  $21,401  $21,943  5.9% 26.8%

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