Hanmi Financial (NASDAQ:HAFC) Corporation (NASDAQ: HAFC ) reported stable total deposits, strong loan growth, and successful client acquisition in its Q3 2023 earnings call. The company also highlighted a healthy mix of non-interest-bearing deposits, which constituted 35% of total deposits. The firm is on track with its plans to relocate branches in San Francisco and Edison, New Jersey.
Key takeaways from the call include:
- Hanmi achieved increased average origination yields on new loans, with loan production improving across various business lines.
- Deposits from Corporate Korea clients, a result of Hanmi's Corporate Korea initiative, now represent nearly 13% of total deposits.
- Non-performing assets declined by 29%, indicating solid asset quality.
- Hanmi's net interest income declined slightly, but non-interest income increased, primarily due to a gain on the sale and leaseback of a branch property.
- Credit loss expense increased due to charge-offs on classified credits, but non-interest expenses remained controlled.
- The company reported a decline in net interest income by $567,000 compared to the second quarter, due to a 28 basis point increase in the cost of interest-bearing deposits. However, loan yields improved by 9 basis points.
- The bank's net interest margin declined by 8 basis points, albeit at a slower rate compared to previous quarters.
During the earnings call, the company mentioned a remaining authorization of just under 500,000 shares and a $128 million credit related to a memory care assisted living facility. Despite not reaching optimal occupancy due to COVID-19 and other factors, the company does not anticipate any loss from this facility. Hanmi expects a $300,000 annual increase in the sale-leaseback line item and plans to continue exploring cost efficiencies in 2024.
The company's CFO, Ron Santarosa, stated that despite inflationary pressures, expenses have been well-controlled and will continue to be a focus for cost-cutting measures in 2024. The occupancy line item was around $4.8 million for the year, with some potential volatility due to maintenance and repairs.
The call concluded with Bonnie Lee, Hanmi's CEO, expressing gratitude for the participants' interest and mentioning a year-end call in January. The company ended the quarter with a strong deposit portfolio and sound capital levels, demonstrating its commitment to maintaining strong credit quality and diversifying its portfolio.
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