Hanmi Bank's Q1 2025 Earnings Call: Unpacking Contradictions in Loan Yields, Deposits, and Growth Expectations

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Strong Financial Performance:
- Hanmi Financial Corporation reported net income of $17.7 million or $0.58 per diluted share for Q1 2025, marking a 17% increase compared to Q1 2024.
- The growth was driven by a combination of margin expansion, loan growth, and disciplined expense management.

Margin Expansion:
- The company achieved a third consecutive quarter of net interest margin expansion, with an increase of 11 basis points to 3.02%.
- This was primarily due to a decrease in deposit interest expense, reflecting lower funding costs.

Loan and Deposit Growth:
- Total loans grew to $6.28 billion in Q1 2025, marking a 0.5% increase on a linked quarter basis.
- Deposits grew by 3% in the first quarter, driven by new commercial accounts and contributions from new branches.

USKC Initiative Progress:
- The USKC (U.S.-Korea) loan portfolio remained stable at approximately 15% of total loans, while deposits increased to represent 15% of total deposits.
- This growth is attributed to the opening of a representative office in South Korea, which has enhanced Hanmi's visibility and brand among Korean companies.

Disciplined Expense Management:
- Hanmi's operating expenses remained well-managed, leading to an efficiency ratio of 55.69%, the best quarterly performance since Q4 2023.
- This was achieved through ongoing expense management and credit quality discipline.