Hanmi Reports 2025 First Quarter Results

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%

Hanmi Reports 2025 First Quarter Results

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