HANMI FINANCIAL CORP
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Net Interest Income
Our primary source of revenue is net interest income, which is the difference between interest derived from earning assets, and interest paid on liabilities obtained to fund those assets. Our net interest income is affected by changes in the level and mix of interest-earning assets and interest-bearing liabilities, referred to as volume changes. Net interest income is also affected by changes in the yields earned on assets and rates paid on liabilities, referred to as rate changes. Interest rates charged on loans are affected principally by changes to market interest rates, the demand for loans receivable, the supply of money available for lending purposes, and other competitive factors. Those factors are, in turn, affected by general economic conditions and other factors beyond our control, such as federal economic policies, the general supply of money in the economy, legislative tax policies, governmental budgetary matters, and the actions of the Federal Reserve.
The following table shows the average balance of assets, liabilities and stockholders’ equity, the amount of interest income, and interest expense, the average yield or rate for each category of interest-earning assets and interest-bearing liabilities, and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.
| Three Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2025 · June 30, 2024 | ||||||||||
| Interest · Average · Interest · Average | ||||||||||
| Average · Income / · Yield / · Average · Income / · Yield / | ||||||||||
| Balance · Expense · Rate · Balance · Expense · Rate | ||||||||||
| Assets · (dollars in thousands) | ||||||||||
| Interest-earning assets: | ||||||||||
| Loans receivable (1) | $6,257,741 | $92,589 | 5.93% | $6,089,440 | $90,752 | 5.99% | ||||
| Securities (2) | 993,975 | 6,261 | 2.55% | 979,671 | 5,238 | 2.17% | ||||
| FHLB stock | 16,385 | 354 | 8.65% | 16,385 | 357 | 8.77% | ||||
| Interest-bearing deposits in other banks | 200,266 | 2,129 | 4.26% | 180,177 | 2,313 | 5.16% | ||||
| Total interest-earning assets | 7,468,367 | 101,333 | 5.44% | 7,265,673 | 98,660 | 5.46% | ||||
| Noninterest-earning assets: | ||||||||||
| Cash and due from banks | 53,977 | 55,442 | ||||||||
| Allowance for credit losses | (70,222) | (67,908) | ||||||||
| Other assets | 250,241 | 252,410 | ||||||||
| Total assets | $7,702,363 | $7,505,617 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Interest-bearing liabilities: | ||||||||||
| Deposits: | ||||||||||
| Demand: interest-bearing | $81,308 | $29 | 0.15% | $85,443 | $32 | 0.15% | ||||
| Money market and savings | 2,109,221 | 17,342 | 3.30% | 1,845,870 | 17,324 | 3.77% | ||||
| Time deposits | 2,434,659 | 24,553 | 4.05% | 2,453,154 | 29,139 | 4.78% | ||||
| Total interest-bearing deposits | 4,625,188 | 41,924 | 3.64% | 4,384,467 | 46,495 | 4.27% | ||||
| Borrowings | 60,134 | 684 | 4.58% | 169,525 | 1,896 | 4.50% | ||||
| Subordinated debentures | 130,880 | 1,586 | 4.84% | 130,239 | 1,649 | 5.07% | ||||
| Total interest-bearing liabilities | 4,816,202 | 44,194 | 3.68% | 4,684,231 | 50,040 | 4.30% | ||||
| Noninterest-bearing liabilities and equity: | ||||||||||
| Demand deposits: noninterest-bearing | 1,934,985 | 1,883,765 | ||||||||
| Other liabilities | 140,053 | 162,543 | ||||||||
| Stockholders’ equity | 811,123 | 775,078 | ||||||||
| Total liabilities and stockholders’ equity | $7,702,363 | $7,505,617 | ||||||||
| Net interest income | $57,139 | $48,620 | ||||||||
| Cost of deposits (3) | 2.56% | 2.98% | ||||||||
| Net interest spread (taxable equivalent basis) (4) | 1.76% | 1.16% | ||||||||
| Net interest margin (taxable equivalent basis) (5) | 3.07% | 2.69% | ||||||||
(1)
(2)
(3)
Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.
(4)
Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
(5)
Represents net interest income as a percentage of average interest-earning assets.
The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. The variances attributable to simultaneous volume and rate changes have been allocated to the change due to volume and the change due to rate categories in proportion to the relationship of the absolute dollar amount attributable solely to the change in volume and to the change in rate.
| Three Months Ended | |||
|---|---|---|---|
| Increases (Decreases) Due to Change In | |||
| Volume | Rate | Total | |
| (in thousands) | |||
| Interest and dividend income: | |||
| Loans receivable (1) | $2,762 | $(925) | $1,837 |
| Securities (2) | 76 | 947 | 1,023 |
| FHLB stock | 2 | (5) | (3) |
| Interest-bearing deposits in other banks | 264 | (448) | (184) |
| Total interest and dividend income | 3,104 | (431) | 2,673 |
| Interest expense: | |||
| Demand: interest-bearing | $(1) | $(2) | $(3) |
| Money market and savings | 2,526 | (2,508) | 18 |
| Time deposits | (140) | (4,446) | (4,586) |
| Borrowings | (1,219) | 7 | (1,212) |
| Subordinated debentures | 8 | (71) | (63) |
| Total interest expense | 1,174 | (7,020) | (5,846) |
| Change in net interest income | $1,930 | $6,589 | $8,519 |
(1)
(2)
For the three months ended June 30, 2025 and 2024, net interest income was $57.1 million and $48.6 million, respectively. The increase of $8.5 million was due to a decrease in interest expense and an increase in interest and dividend income. The net interest spread and net interest margin, on a taxable equivalent basis, for the quarter ended June 30, 2025, were 1.76% and 3.07%, respectively, compared with 1.16% and 2.69%, respectively, for the same period in 2024. Interest and dividend income increased $2.7 million, or 2.7%, to $101.3 million for the three months ended June 30, 2025 from $98.7 million for the same period in 2024 primarily due to an increase in the average balance of loans. Interest expense decreased $5.8 million, or 11.7%, to $44.2 million for the three months ended June 30, 2025 from $50.0 million for the same period in 2024 primarily due to decreases in deposit rates.
The average balance of interest earning assets increased $202.7 million, or 2.8%, to $7.47 billion for the three months ended June 30, 2025, from $7.27 billion for the three months ended June 30, 2024. The average balance of loans increased $168.3 million, or 2.8%, to $6.26 billion for the three months ended June 30, 2025, from $6.09 billion for the three months ended June 30, 2024. The average balance of securities was $1.0 billion for the three months ended June 30, 2025 and 2024. The average balance of interest-bearing deposits at other banks increased $20.1 million, or 11.1%, to $200.3 million for the three months ended June 30, 2025, from $180.2 million for the three months ended June 30, 2024.
The average yield on interest-earning assets, on a taxable equivalent basis, decreased two basis points to 5.44% for the three months ended June 30, 2025, from 5.46% for the three months ended June 30, 2024. The average yield on loans decreased to 5.93% for the three months ended June 30, 2025, from 5.99% for the three months ended June 30, 2024. The average yield on securities, on a taxable equivalent basis, increased to 2.55% for the three months ended June 30, 2025, from 2.17% for the three months ended June 30, 2024. The increase in the average yield on securities was primarily due to the Company using the proceeds from lower-coupon maturing securities to reinvest into higher-coupon securities.
The average balance of interest-bearing liabilities increased $132.0 million, or 2.8%, to $4.82 billion for the three months ended June 30, 2025 compared with $4.68 billion for the three months ended June 30, 2024. The average balances of money market and savings accounts and increased $263.4 million, offset partially by decreases in borrowings of $109.4 million and in interest-bearing demand deposits and time deposits of $4.1 million and $18.5 million, respectively. The increase in average balances of money market and savings accounts was due to an increase in new commercial accounts. The decrease in the average balance of time deposits was due to the shift to money market and savings accounts as market rates decreased. The decrease in the average balance of borrowings during the three months ended June 30, 2025 was due to the increase in the average balance on interest-bearing deposits.
The average cost of interest-bearing liabilities was 3.68% and 4.30% for the three months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits decreased 63 basis points to 3.64% for the three months ended June 30, 2025, compared with 4.27% for the three months ended June 30, 2024. The average cost of time deposits decreased 73 basis points to 4.05% for the three months ended June 30, 2025 compared with 4.78% for the three months ended June 30, 2024. The average cost of money market and savings accounts decreased 47 basis points to 3.30% for the three months ended June 30, 2024 compared with 3.77% for the three months ended June 30, 2024. The decrease in the cost of deposits was due to a decrease in deposit market rates. The average cost of borrowings increased to 4.58% for the three months ended June 30, 2025 compared with 4.50% for the three months ended June 30, 2024, as the lower-rate borrowings matured or were paid off.
The following table shows the average balance of assets, liabilities and stockholders’ equity; the amount of interest income, and interest expense; the average yield or rate for each category of interest-earning assets and interest-bearing liabilities; and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.
| Six Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2025 · June 30, 2024 | ||||||||||
| Interest · Average · Interest · Average | ||||||||||
| Average · Income / · Yield / · Average · Income / · Yield / | ||||||||||
| Balance · Expense · Rate · Balance · Expense · Rate | ||||||||||
| Assets · (dollars in thousands) | ||||||||||
| Interest-earning assets: | ||||||||||
| Loans receivable (1) | $6,223,825 | $183,476 | 5.94% | $6,113,664 | $182,427 | 6.00% | ||||
| Securities (2) | 997,716 | 12,430 | 2.52% | 974,596 | 10,193 | 2.12% | ||||
| FHLB stock | 16,385 | 715 | 8.79% | 16,385 | 719 | 8.82% | ||||
| Interest-bearing deposits in other banks | 188,214 | 3,968 | 4.25% | 190,950 | 4,914 | 5.18% | ||||
| Total interest-earning assets | 7,426,140 | 200,589 | 5.44% | 7,295,595 | 198,253 | 5.46% | ||||
| Noninterest-earning assets: | ||||||||||
| Cash and due from banks | 53,824 | 56,912 | ||||||||
| Allowance for credit losses | (69,936) | (68,507) | ||||||||
| Other assets | 249,697 | 248,555 | ||||||||
| Total assets | $7,659,725 | $7,532,555 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Interest-bearing liabilities: | ||||||||||
| Deposits: | ||||||||||
| Demand: interest-bearing | $80,344 | $56 | 0.14% | $85,922 | $61 | 0.14% | ||||
| Money market and savings | 2,073,421 | 33,779 | 3.29% | 1,830,478 | 33,877 | 3.72% | ||||
| Time deposits | 2,390,249 | 48,648 | 4.10% | 2,480,492 | 58,195 | 4.72% | ||||
| Total interest-bearing deposits | 4,544,014 | 82,483 | 3.66% | 4,396,892 | 92,133 | 4.21% | ||||
| Borrowings | 119,460 | 2,708 | 4.57% | 165,972 | 3,551 | 4.30% | ||||
| Subordinated debentures | 130,799 | 3,167 | 4.84% | 130,163 | 3,295 | 5.06% | ||||
| Total interest-bearing liabilities | 4,794,273 | 88,358 | 3.72% | 4,693,027 | 98,979 | 4.24% | ||||
| Noninterest-bearing liabilities and equity: | ||||||||||
| Demand deposits: noninterest-bearing | 1,915,577 | 1,902,477 | ||||||||
| Other liabilities | 142,341 | 163,533 | ||||||||
| Stockholders’ equity | 807,534 | 773,518 | ||||||||
| Total liabilities and stockholders’ equity | $7,659,725 | $7,532,555 | ||||||||
| Net interest income | $112,231 | $99,274 | ||||||||
| Cost of deposits (3) | 2.58% | 2.94% | ||||||||
| Net interest spread (taxable equivalent basis) (4) | 1.73% | 1.22% | ||||||||
| Net interest margin (taxable equivalent basis) (5) | 3.05% | 2.74% | ||||||||
(1)
(2)
(3)
Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.
(4)
Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
(5)
Represents net interest income as a percentage of average interest-earning assets.
The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. The variances attributable to simultaneous volume and rate changes have been allocated to the change due to volume and the change due to rate categories in proportion to the relationship of the absolute dollar amount attributable solely to the change in volume and to the change in rate.
| Six Months Ended | |||
|---|---|---|---|
| Increases (Decreases) Due to Change In | |||
| Volume | Rate | Total | |
| (in thousands) | |||
| Interest and dividend income: | |||
| Loans receivable (1) | $2,770 | $(1,721) | $1,049 |
| Securities (2) | 242 | 1,995 | 2,237 |
| FHLB stock | (2) | (2) | (4) |
| Interest-bearing deposits in other banks | (84) | (862) | (946) |
| Total interest and dividend income | 2,926 | (590) | 2,336 |
| Interest expense: | |||
| Demand: interest-bearing | $(4) | $(1) | $(5) |
| Money market and savings | 4,390 | (4,488) | (98) |
| Time deposits | (2,273) | (7,274) | (9,547) |
| Borrowings | (1,000) | 157 | (843) |
| Subordinated debentures | 16 | (144) | (128) |
| Total interest expense | 1,129 | (11,750) | (10,621) |
| Change in net interest income | $1,797 | $11,160 | $12,957 |
(1)
(2)
For the six months ended June 30, 2025 and 2024, net interest income was $112.2 million and $99.3 million, respectively. The increase of $12.9 million was primarily due to a decrease in interest expense due to decreases in deposit rates. The net interest spread and net interest margin, on a taxable equivalent basis, for the six months ended June 30, 2025, were 1.73% and 3.05%, respectively, compared with 1.22% and 2.74%, respectively, for the same period in 2024. Interest and dividend income increased $2.3 million, or 1.2%, to $200.6 million for the six months ended June 30, 2025 from $198.3 million for the same period in 2024. Interest expense decreased $10.6 million, or 10.7%, to $88.4 million for the six months ended June 30, 2025 from $99.0 million for the same period in 2024 primarily due to decreases in deposit rates.
The average balance of interest earning assets increased $130.5 million, or 1.8%, to $7.43 billion for the six months ended June 30, 2025, from $7.30 billion for the six months ended June 30, 2024. The average balance of loans increased $110.2 million, or 1.8%, to $6.22 billion for the six months ended June 30, 2025, from $6.11 billion for the six months ended June 30, 2024. The average balance of securities was $1.00 billion for the six months ended June 30, 2025 and 2024. The average balance of interest-bearing deposits at other banks decreased $2.7 million, or 1.4%, to $188.2 million for the six months ended June 30, 2025, from $191.0 million for the six months ended June 30, 2024.
The average yield on interest-earning assets, on a taxable equivalent basis, decreased two basis points to 5.44% for the six months ended June 30, 2025, from 5.46% for the six months ended June 30, 2024. The average yield on loans decreased to 5.94% for the six months ended June 30, 2025, from 6.00% for the six months ended June 30, 2024. The average yield on securities, on a taxable equivalent basis, increased to 2.52% for the six months ended June 30, 2025, from 2.12% for the six months ended June 30, 2024. The increase in the average yield on securities was primarily due to the Company using the proceeds from lower-coupon maturing securities to reinvest into higher-coupon securities.
The average balance of interest-bearing liabilities increased $101.2 million, or 2.2%, to $4.8 billion for the six months ended June 30, 2025 compared with $4.6 billion for the six months ended June 30, 2024 due to a $147.1 million increase in the average balance of interest-bearing deposits offset by a $46.5 million decrease in the average balance of borrowings. The average balances of money market and savings accounts increased by $242.9 million while the average balance of time deposits decreased $90.2 million. The increase in average balances of money market and savings accounts was due to an increase in new commercial accounts. The decrease in the average balance of time deposits was due to the shift to money market and savings accounts as market rates decreased. The decrease in the average balance of borrowings was due to an increase in the average balance of interest-bearing deposits.
The average cost of interest-bearing liabilities was 3.72% and 4.24% for the six months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits decreased 55 basis points to 3.66% for the six months ended June 30, 2025, compared with 4.21% for the six months ended June 30, 2024. The average cost of time deposits decreased 62 basis points to 4.10% for the six months ended June 30, 2025 compared with 4.72% for the six months ended June 30, 2024. The average cost of money market and savings accounts decreased 43 basis points to 3.29% for the six months ended June 30, 2024 compared with 3.72% for the six months ended June 30, 2024. The decrease in the cost of deposits was due to a decrease in deposit market rates. The average cost of borrowings increased to 4.57% for the six months ended June 30, 2025 compared with 4.30% for the six months ended June 30, 2024, as the lower-rate borrowings matured or were paid off.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.