Hanmi Lifts Interest Income as Deposit Mix Cushions Margin
Net interest income rose 1.3% to $63.9 million as lower-cost deposits reduced funding pressure.
Hanmi Financial (HAFC), the Los Angeles-based community bank, increased net interest income 1.3% QoQ and 11.8% YoY to $63.9 million as higher yields on commercial real estate and commercial-and-industrial loans combined with a lower-cost funding mix. Net interest margin compressed about 3 bps QoQ to 3.36%, while remaining 29 bps above the year-earlier level.
The funding shift provided the clearest support. Deposits rose 2.3% QoQ and 3.4% YoY to $6.96 billion, while noninterest-bearing balances increased 5.2% QoQ to $2.14 billion and accounted for 31% of deposits. Hanmi also reduced its reliance on borrowings.
Deposit repricing moderated as the Federal Reserve eased rates. Hanmi’s deposit beta fell to 55% during the 75-bp easing cycle from August 2024 through June 2025, compared with 71% during the preceding 100-bp easing period. June rates averaged 3.64% for certificates of deposit and 3.17% for interest-bearing deposits.
Loans ended the quarter at $6.54 billion, down 0.2% QoQ and up 3.6% YoY. Production reached $371.9 million at an average rate of 6.59%, led by $170.1 million of commercial real estate loans and $89.2 million of C&I credits. Payoffs totaled $156.4 million at an average rate of 6.39%.
Fee revenue softened as gains from SBA-loan sales declined by $0.8 million, pushing noninterest income down 2.2% QoQ to $8.3 million. Noninterest expense rose 1.7% to $39.0 million, principally because of an additional business day and annual merit increases, and the efficiency ratio worsened 59 bps QoQ to 54.07%.
Credit costs receded. Credit-loss expense fell 58.9% QoQ to $1.2 million and declined 84.4% YoY, while nonperforming assets improved 4 bps to 0.12% of assets. Nonperforming loans also improved 4 bps, reaching 0.15% of loans.
Hanmi returned 58% of quarterly earnings through $8.3 million of dividends and $5.2 million of share repurchases. Tangible common equity declined 8 bps QoQ to 10.03% of tangible assets, while tangible book value rose to $27.04 a share. The bank also proposed a $55 million subordinated-note offering intended to qualify as Tier 2 capital, refinance outstanding indebtedness and support general corporate purposes.