Hanmi Financial Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 21 July 2026: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Net income grew 4.2 percent sequentially: Second quarter net income of $23.5 million or $0.79 per diluted share, up from $22.6 million or $0.75 in Q1 2026, driven by net interest income growth and lower credit loss expense. Source
• Return on equity improved to 11.09 percent: Return on average equity increased 0.23 percentage points to 11.09% from 10.86%, while return on average assets rose to 1.20% from 1.18%, reflecting improved profitability and asset productivity. Source
• Returned 58 percent of earnings to shareholders: Distributed $13.5 million representing 58% of second-quarter net earnings through $8.3 million in dividends and $5.2 million in share repurchases, demonstrating commitment to shareholder returns. Source
• Deposits increased 2.3 percent to $7.0 billion: Total deposits grew $154.7 million to $7.0 billion from prior quarter, driven by $104.7 million increase in noninterest-bearing deposits and $54.4 million in time deposits over $250,000. Source
• New loan production at $371.9 million steady: New loan originations of $371.9 million at 6.59% average rate with payoffs of $156.4 million at 6.39%, maintaining consistent production pace while managing portfolio composition. Source
• C&I loans reached 17.9 percent of total: Commercial and industrial loans increased to 17.9% of portfolio from 17.6%, reflecting management strategy to continue diversification away from concentration in real estate lending. Source
• Net interest income increased 1.0 percent: Net interest income grew $700,000 or 1.0% to $63.9 million, with $900,000 increase in loan interest income and $800,000 from securities, offset by $1.0 million higher deposit interest. Source
• Net interest margin compressed 2 basis points: NIM declined to 3.36% from 3.38% due to 5 basis point headwind from lower loan contributions and 3 basis points from FHLB dividend normalization, partially offset by deposit improvements. Source
• Nonperforming loans improved to 0.15 percent: Nonperforming loans declined to $9.9 million or 0.15% of total loans from $12.4 million or 0.19%, reflecting excellent credit quality and disciplined risk management approach. Source
• Credit loss expense dropped to $1.2 million: Provision for credit losses decreased significantly to $1.2 million from $2.9 million, with $1.3 million provision on loans offset by $0.1 million negative provision. Source
• CET1 capital ratio increased to 12.28 percent: Common equity tier 1 capital ratio increased to 12.28% from 12.20% prior quarter, exceeding well-capitalized thresholds and demonstrating strong capital position. Source
• Tangible common equity at 10.03 percent: Tangible common equity to tangible assets ratio of 10.03% compared to 10.11% prior quarter, reflecting asset growth outpacing equity, above prior-year 9.58%. Source

“Consistent with our strategy, we maintained a steady pace of loan production while continuing to diversify our loan portfolio. Importantly, credit quality remained excellent, reflecting our prudent underwriting standards and disciplined approach to risk management.”

Bonnie Lee, President and Chief Executive Officer

Earnings and Returns

• Net income grew 4.2 percent sequentially: Second quarter net income of $23.5 million or $0.79 per diluted share, up from $22.6 million or $0.75 in Q1 2026, driven by net interest income growth and lower credit loss expense. Source
• Return on equity improved to 11.09 percent: Return on average equity increased 0.23 percentage points to 11.09% from 10.86%, while return on average assets rose to 1.20% from 1.18%, reflecting improved profitability and asset productivity. Source
• Returned 58 percent of earnings to shareholders: Distributed $13.5 million representing 58% of second-quarter net earnings through $8.3 million in dividends and $5.2 million in share repurchases, demonstrating commitment to shareholder returns. Source

Deposits and Funding Mix

• Deposits increased 2.3 percent to $7.0 billion: Total deposits grew $154.7 million to $7.0 billion from prior quarter, driven by $104.7 million increase in noninterest-bearing deposits and $54.4 million in time deposits over $250,000. Source
• Cost of deposits declined to 3.17 percent: Interest-bearing deposit cost decreased 3 basis points to 3.17% from prior quarter, with average balances increasing 2.7%, reflecting improved funding mix with lower-cost deposits. Source
• Loan-to-deposit ratio improved to 94.0 percent: Ratio declined to 94.0% from 96.2% in prior quarter, improving liquidity position and funding flexibility while maintaining prudent earning asset levels. Source

Loan Portfolio and Diversification

• New loan production at $371.9 million steady: New loan originations of $371.9 million at 6.59% average rate with payoffs of $156.4 million at 6.39%, maintaining consistent production pace while managing portfolio composition. Source
• C&I loans reached 17.9 percent of total: Commercial and industrial loans increased to 17.9% of portfolio from 17.6%, reflecting management strategy to continue diversification away from concentration in real estate lending. Source
• Total loans declined slightly to $6.535 billion: Total loans held for investment decreased $10.2 million or 0.2% from prior quarter to $6.535 billion, as loan sales and amortization offset new production. Source

Net Interest Income and Margin

• Net interest income increased 1.0 percent: Net interest income grew $700,000 or 1.0% to $63.9 million, with $900,000 increase in loan interest income and $800,000 from securities, offset by $1.0 million higher deposit interest. Source
• Net interest margin compressed 2 basis points: NIM declined to 3.36% from 3.38% due to 5 basis point headwind from lower loan contributions and 3 basis points from FHLB dividend normalization, partially offset by deposit improvements. Source
• Average loan yield stable at 5.90 percent: Loan yield unchanged at 5.90% while balances increased slightly to $6.44 billion or 0.1%, demonstrating stable pricing despite competitive environment. Source
• Funding costs improved due to rate environment: Interest expense benefit from 3 basis point decline in deposit costs to 3.17% and reduced borrowing balance of $15.3 million versus $69.4 million prior quarter. Source

Credit Quality and Provision

• Nonperforming loans improved to 0.15 percent: Nonperforming loans declined to $9.9 million or 0.15% of total loans from $12.4 million or 0.19%, reflecting excellent credit quality and disciplined risk management approach. Source
• Credit loss expense dropped to $1.2 million: Provision for credit losses decreased significantly to $1.2 million from $2.9 million, with $1.3 million provision on loans offset by $0.1 million negative provision. Source
• One large CRE loan became delinquent: Loans 30-89 days past due increased to $32.8 million or 0.50% of loans from $13.3 million or 0.20%, primarily from one $21.2 million commercial real estate loan. Source

Capital Position and Ratios

• CET1 capital ratio increased to 12.28 percent: Common equity tier 1 capital ratio increased to 12.28% from 12.20% prior quarter, exceeding well-capitalized thresholds and demonstrating strong capital position. Source
• Tangible common equity at 10.03 percent: Tangible common equity to tangible assets ratio of 10.03% compared to 10.11% prior quarter, reflecting asset growth outpacing equity, above prior-year 9.58%. Source
• Stockholders equity increased 1.2 percent: Total stockholders equity increased $9.9 million or 1.2% to $812.7 million, offset by $8.3 million dividends, $5.2 million repurchases, and unrealized losses. Source

Operating Expense and Efficiency

• Efficiency ratio increased to 54.07 percent: Efficiency ratio increased 59 basis points from 53.48% to 54.07%, reflecting higher operating expenses due to seasonal salary increases and OREO expenses. Source
• Noninterest expense increased 1.7 percent: Total noninterest expense increased $671,000 or 1.7% to $39.0 million, with salaries up $828,000 from additional business day and merit increases. Source
• Professional fees declined 28.2 percent: Professional fees decreased $783,000 or 28.2% to $2.0 million, reflecting absence of first-quarter administrative resolution expenses. Source
• Data processing costs rose 3.9 percent: Data processing expense increased $169,000 or 3.9% to $4.6 million from $4.4 million, reflecting technology investments and operational infrastructure. Source

Non-Interest Income and Loan Sales

• Total noninterest income declined 2.2 percent: Noninterest income decreased $191,000 or 2.2% to $8.3 million from $8.5 million, primarily from $784,000 decline in SBA loan sales gains. Source
• SBA loan gains fell 37.3 percent: Gain on SBA loan sales decreased to $1.3 million from $2.1 million as volume sold declined to $20.9 million from $32.5 million. Source
• Trade finance income increased 26.7 percent: Trade finance and other service charges and fees increased $401,000 or 26.7% to $1.9 million, demonstrating strength in specialized lending. Source
• Residential mortgage sales volume declined: Residential mortgage loan sales of $30.6 million declined from $31.7 million with gain of $357,000 and 2.00% premium versus $485,000 and 2.50%. Source

Risks management discussed

• Operational: One $21.2 million commercial real estate loan identified as special mention in Q1 became delinquent in Q2, increasing loans 30-89 days past due to $32.8 million or 0.50% of loans from 0.20%. Source
• Financial: Net interest margin compressed 2 basis points to 3.36% from 3.38%, with headwinds from lower loan contributions and FHLB dividend normalization despite favorable deposit cost improvements. Source
• Operational: Efficiency ratio increased 59 basis points to 54.07% from 53.48%, reflecting rising salaries, benefits, and data processing costs offsetting professional fee decreases. Source
• Demand: SBA loan sales volume declined to $20.9 million in Q2 from $32.5 million in Q1, reducing fee income from this product line despite trade premiums improving to 7.92%. Source

Earlier plans management reported on

• On track: In Q1 [P], CEO stated expectations for positive trends to continue. In Q2, earnings grew 4.2%, deposits increased 2.3%, loan diversification continued with C&I at 17.9%, and credit quality improved to NPL of 0.15%, demonstrating progress toward stated goals.
• Met: Hanmi returned 58% of Q2 earnings through $8.3 million dividends and $5.2 million repurchases while maintaining CET1 at 12.28% and tangible equity at 10.03%, exceeding regulatory minimums. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.