Hanmi Financial Q2 Earnings Call Highlights

Hanmi Financial posted stronger Q2 2026 results, with net income rising to $23.5 million, or $0.79 per share, and improved profitability metrics including a 1.2% return on average assets and 11.1% return on average equity. Loan and deposit growth remained healthy, led by commercial real estate and continued strength in the Corporate Korea initiative. Total deposits rose 2.3% sequentially, while Corporate Korea deposits hit a record $1.2 billion and C&I loans continued to be a strategic growth focus. Credit quality stayed strong and management expects stability ahead, despite one delinquent CRE loan that was described as isolated and well-secured. Hanmi said expenses should stay near the current run rate, and net interest margin is expected to remain generally stable for the rest of the year. Hanmi Financial NASDAQ: HAFC reported higher second-quarter 2026 earnings as management pointed to loan production, deposit growth, expense discipline and improved credit metrics as key drivers of performance. President and Chief Executive Officer Bonnie Lee said the company generated net income of $23.5 million, or $0.79 per diluted share, compared with $22.6 million, or $0.75 per diluted share, in the prior quarter. Lee said return on average assets rose to 1.2%, while return on average equity improved to 11.1%. “Hanmi delivered another quarter of a strong financial performance driven by solid earnings growth, expanding customer relationships, disciplined execution, and excellent credit quality,” Lee said on the call. The company returned $13.6 million to shareholders through dividends and share repurchases during the quarter, according to Lee. Chief Financial Officer Romolo Santarosa later said Hanmi repurchased 160,000 shares at an average price of $30.24, with 1.99 million shares remaining under its current authorization. Santarosa said net interest income increased 1% from the first quarter to $63.9 million. Net interest margin declined two basis points to 3.36%, a move he attributed largely to a change in dividend practices at the Federal Home Loan Bank of San Francisco. He said that change reduced second-quarter interest income by approximately $612,000, or about three basis points. Excluding that impact, Santarosa said underlying margin performance was “essentially stable.” Average interest-earning assets rose 1.1%, average deposits increased 2.7%, loan yields held steady at 5.9%, and the cost of interest-bearing deposits fell to 3.17%. Assuming no changes in Federal Reserve policy, Santarosa said management expects net interest margin to remain stable through the rest of the year. In response to a question from KBW analyst Kelly Motta, he said competitive pressures could move savings and money market costs slightly higher, while certificate of deposit repricing may provide only modest relief. He described the margin outlook as having potential to move “one to three basis points” in either direction but generally remaining within a narrow range. Chief Banking Officer Anthony Kim said second-quarter loan production totaled $372 million, down $6 million, or 1.6%, from the prior quarter. The weighted average interest rate on production was 6.59%, compared with 6.54% in the first quarter. Kim said the decline was primarily due to lower production in commercial and industrial, Small Business Administration and equipment finance loans, partially offset by increases in commercial real estate and residential mortgage lending. C&I production was $89 million, with Corporate Korea representing $22 million, or 25% of total C&I production. CRE production was $171 million, up $39...