Net income for the third quarter of 2025 was $22.1 million, or $0.73 per diluted share, compared with $15.1 million, or $0.50 per diluted share, for the second quarter of 2025. The return on average assets for the third quarter of 2025 was 1.12% and the return on average equity was 10.69%, compared with a return on average assets of 0.79% and a return on average equity of 7.48% for the second quarter of 2025.
CEO Commentary
"Hanmi delivered outstanding third quarter results, which highlights the strength of our enduring franchise," said Bonnie Lee, President and Chief Executive Officer. "Our net interest margin expanded by 15 basis points to 3.22% and preprovision net revenue increased 16.4% quarter-over-quarter driven by robust growth in net interest income and well-managed expenses. As a result, we generated a return on average equity of 10.69%."
"Loan growth was healthy, supported by loan production of $571 million, up 73% from the prior quarter with a strong contribution coming from commercial loans. Our ongoing investments in our commercial lending teams, the USKC initiative and expansion into new markets, helped drive production for this key asset class. These investments also contributed to a 2.4% annualized increase in deposits, with noninterest-bearing demand deposits holding steady at approximately 31% of total deposits."
"Importantly, our excellent credit quality improved further with reductions in criticized loans and nonperforming assets. This progress reflects our comprehensive and proactive asset management practices, as well as our conservative credit underwriting culture."
"As we look ahead, we're energized by the momentum and strength across all aspects of our business. We remain focused on executing our strategies, deepening client relationships, and optimizing our balance sheet to deliver durable, long-term value for our shareholders," concluded Lee.
Third Quarter 2025 Highlights:
Third quarter net income increased 45.9% to $22.1 million, or $0.73 per diluted share from the second quarter; a $3.9 million increase in net interest income and a $5.5 million decrease in credit loss expense led to the increase in net income.
Loans receivable were $6.53 billion at September 30, 2025, up 3.5% from the end of the second quarter; loan production for the third quarter accelerated to $570.8 million, with a weighted average interest rate of 6.91%.
Deposits were $6.77 billion at September 30, 2025, up 0.6% from the end of the second quarter; noninterest-bearing demand deposits were 30.8% of total deposits at the end of the third quarter and the ratio of average loans to average deposits for the third quarter was 94.6%.
Preprovision net revenue1 increased $4.7 million or 16.4% from the previous quarter, reflecting a 6.9% increase in net interest income, a 15 basis point increase in the net interest margin, a 22.4% increase in noninterest income and well-managed noninterest expenses with the efficiency ratio declining to 52.65%.
Credit loss expense for the third quarter was $2.1 million, a decrease of $5.5 million from the second quarter; the allowance for credit losses increased $3.0 million to $69.8 million, or 1.07% of loans; there were net loan recoveries for the third quarter of $0.5 million which included a $2.0 million recovery on a previously charged-off loan.
Nonperforming assets were $21.4 million at September 30, 2025, or 0.27% of loans, down 17.7% from the previous quarter; criticized loans also declined 2.6% to $45.4 million, or 0.69% of total loans.
Hanmi's capital position stayed strong with the ratio of tangible common equity to tangible assets2 at 9.80%; during the third quarter, the company repurchased 199,698 common shares at a weighted average price of $23.45.
For more information about Hanmi, please see the Q3 2025 Investor Update (and Supplemental Financial Information), which is available on the Bank's website at www.hanmi.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov. Also, please refer to "Non-GAAP Financial Measures" herein for further details of the presentation of certain non-GAAP financial measures.
Quarterly Highlights (Dollars in thousands, except per share data)
As of or for the Three Months Ended
Amount Change
Sep 30
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Net income
$
22,061
$
15,117
$
17,672
$
17,695
$
14,892
$
6,944
$
7,169
Net income per diluted common share
$
0.73
$
0.50
$
0.58
$
0.58
$
0.49
$
0.23
$
0.24
Assets
$
7,856,731
$
7,862,363
$
7,729,035
$
7,677,925
$
7,712,299
$
(5,632
)
$
144,432
Loans receivable
$
6,528,259
$
6,305,957
$
6,282,189
$
6,251,377
$
6,257,744
$
222,302
$
270,515
Deposits
$
6,766,639
$
6,729,122
$
6,619,475
$
6,435,776
$
6,403,221
$
37,517
$
363,418
Return on average assets
1.12
%
0.79
%
0.94
%
0.93
%
0.79
%
0.33
0.33
Return on average stockholders' equity
10.69
%
7.48
%
8.92
%
8.89
%
7.55
%
3.21
3.14
Net interest margin
3.22
%
3.07
%
3.02
%
2.91
%
2.74
%
0.15
0.48
Efficiency ratio (1)
52.65
%
55.74
%
55.69
%
56.79
%
59.98
%
-3.09
-7.33
Tangible common equity to tangible assets (2)
9.80
%
9.58
%
9.59
%
9.41
%
9.42
%
0.22
0.38
Tangible common equity per common share (2)
$
25.64
$
24.91
$
24.49
$
23.88
$
24.03
0.73
1.61
(1) Noninterest expense divided by net interest income plus noninterest income.
(2) Refer to "Non-GAAP Financial Measures" for further details.
Results of Operations Net interest income for the third quarter was $61.1 million, up 6.9% from $57.1 million for the second quarter of 2025. The net interest margin (taxable-equivalent) increased 15 basis points to 3.22%; the average yield on loans increased 10 basis points to 6.03% while the average cost of interest-bearing deposits declined eight basis points to 3.56%; net interest margin and the average loan yield benefited by three and four basis points, respectively, from a $0.6 million recovery of a previously charged-off loan.
Average interest-earning assets increased $78.3 million, or 1.0% and the average yield increased by ten basis points, primarily due to the increased production of commercial loans. Average loans receivable increased $46.7 million, or 0.7%. Third quarter loan prepayment fees were $0.3 million, compared with $0.2 million for the second quarter. Average interest-bearing liabilities increased $46.4 million, or 1.0%, while the average rate paid declined eight basis points due to the lower interest rate environment. Average interest-bearing deposits increased 1.7% while the average rate paid declined by eight basis points to 3.56%. Average borrowings decreased $32.4 million, or 53.8%, while the average rate paid increased five basis points.
For the Three Months Ended (in thousands)
Percentage Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
Net Interest Income
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Interest and fees on loans receivable(1)
$
95,691
$
92,589
$
90,887
$
91,545
$
92,182
3.4
%
3.8
%
Interest on securities
6,592
6,261
6,169
5,866
5,523
5.3
%
19.4
%
Dividends on FHLB stock
357
354
360
360
356
0.8
%
0.3
%
Interest on deposits in other banks
2,586
2,129
1,841
2,342
2,356
21.5
%
9.8
%
Total interest and dividend income
$
105,226
$
101,333
$
99,257
$
100,113
$
100,417
3.8
%
4.8
%
Interest on deposits
42,244
41,924
40,559
43,406
47,153
0.8
%
-10.4
%
Interest on borrowings
324
684
2,024
1,634
1,561
-52.6
%
-79.2
%
Interest on subordinated debentures
1,579
1,586
1,582
1,624
1,652
-0.4
%
-4.4
%
Total interest expense
44,147
44,194
44,165
46,664
50,366
-0.1
%
-12.3
%
Net interest income
$
61,079
$
57,139
$
55,092
$
53,449
$
50,051
6.9
%
22.0
%
(1) Includes loans held for sale.
For the Three Months Ended (in thousands)
Percentage Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
Average Earning Assets and Interest-bearing Liabilities
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Loans receivable (1)
$
6,304,435
$
6,257,741
$
6,189,531
$
6,103,264
$
6,112,324
0.7
%
3.1
%
Securities
985,888
993,975
1,001,499
998,313
986,041
-0.8
%
0.0
%
FHLB stock
16,385
16,385
16,385
16,385
16,385
0.0
%
0.0
%
Interest-bearing deposits in other banks
239,993
200,266
176,028
204,408
183,027
19.8
%
31.1
%
Average interest-earning assets
$
7,546,701
$
7,468,367
$
7,383,443
$
7,322,370
$
7,297,777
1.0
%
3.4
%
Demand: interest-bearing
$
86,839
$
81,308
$
79,369
$
79,784
$
83,647
6.8
%
3.8
%
Money market and savings
2,122,967
2,109,221
2,037,224
1,934,540
1,885,799
0.7
%
12.6
%
Time deposits
2,494,285
2,434,659
2,345,346
2,346,363
2,427,737
2.4
%
2.7
%
Average interest-bearing deposits
4,704,091
4,625,188
4,461,939
4,360,687
4,397,183
1.7
%
7.0
%
Borrowings
27,772
60,134
179,444
141,604
143,479
-53.8
%
-80.6
%
Subordinated debentures
130,766
130,880
130,718
130,567
130,403
-0.1
%
0.3
%
Average interest-bearing liabilities
$
4,862,629
$
4,816,202
$
4,772,101
$
4,632,858
$
4,671,065
1.0
%
4.1
%
Average Noninterest Bearing Deposits
Demand deposits - noninterest bearing
$
1,960,331
$
1,934,985
$
1,895,953
$
1,967,789
$
1,908,833
1.3
%
2.7
%
(1) Includes loans held for sale.
For the Three Months Ended
Yield/Rate Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
Average Yields and Rates
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Loans receivable(1)
6.03
%
5.93
%
5.95
%
5.97
%
6.00
%
0.10
0.03
Securities (2)
2.70
%
2.55
%
2.49
%
2.38
%
2.27
%
0.15
0.43
FHLB stock
8.65
%
8.65
%
8.92
%
8.75
%
8.65
%
0.00
0.00
Interest-bearing deposits in other banks
4.27
%
4.26
%
4.24
%
4.56
%
5.12
%
0.01
-0.85
Interest-earning assets
5.54
%
5.44
%
5.45
%
5.45
%
5.48
%
0.10
0.06
Interest-bearing deposits
3.56
%
3.64
%
3.69
%
3.96
%
4.27
%
-0.08
-0.71
Borrowings
4.63
%
4.58
%
4.57
%
4.59
%
4.33
%
0.05
0.30
Subordinated debentures
4.83
%
4.84
%
4.84
%
4.97
%
5.07
%
-0.01
-0.24
Interest-bearing liabilities
3.60
%
3.68
%
3.75
%
4.01
%
4.29
%
-0.08
-0.69
Net interest margin (taxable equivalent basis)
3.22
%
3.07
%
3.02
%
2.91
%
2.74
%
0.15
0.48
Cost of deposits
2.51
%
2.56
%
2.59
%
2.73
%
2.97
%
-0.05
-0.46
(1) Includes loans held for sale.
(2) Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.
Credit loss expense for the third quarter was $2.1 million, compared with $7.6 million for the second quarter of 2025. The decrease in credit loss expense reflected the decrease in net charge-offs, partially offset by an increase in qualitative estimated loss rates. Third quarter credit loss expense included a $2.5 million credit loss expense for loan losses and a $0.4 million credit loss recovery for off-balance sheet items. Second quarter credit loss expense included a $7.5 million credit loss expense for loan losses and a $0.1 million credit loss expense for off-balance sheet items.
Noninterest income was $9.9 million for the third quarter, up $1.8 million, or 22.4% from the second quarter. The increase was primarily due to a $1.2 million gain on sale of residential mortgage loans, a $0.5 million increase in bank-owned life insurance income from death benefit claims and a $0.2 million increase in servicing income, partially offset by a $0.3 million decrease from the gain on sale of SBA loans. The volume of residential mortgage loan sales during the third quarter was $67.8 million with a premium of 2.43%. There were no residential mortgage loan sales during the second quarter. Gain on sale of SBA loans was $1.9 million for the third quarter of 2025, compared with $2.2 million for the second quarter of 2025. The volume of SBA loans sold for the third quarter decreased to $32.6 million from $35.4 million for the second quarter of 2025, while trade premiums were 6.95% for the third quarter of 2025 compared with 7.61% for the second quarter.
For the Three Months Ended (in thousands)
Percentage Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
Noninterest Income
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Service charges on deposit accounts
$
2,160
$
2,169
$
2,217
$
2,192
$
2,311
-0.4
%
-6.5
%
Trade finance and other service charges and fees
1,551
1,461
1,396
1,364
1,254
6.2
%
23.7
%
Servicing income
924
754
732
668
817
22.5
%
13.1
%
Bank-owned life insurance income
1,259
708
309
316
320
77.8
%
293.4
%
All other operating income
973
819
897
1,037
1,008
18.8
%
-3.5
%
Service charges, fees & other
6,867
5,911
5,551
5,577
5,710
16.2
%
20.3
%
Gain on sale of SBA loans
1,857
2,160
2,000
1,443
1,544
-14.0
%
20.3
%
Gain on sale of mortgage loans
1,156
-
175
337
324
100.0
%
256.8
%
Gain on sale of bank premises
-
-
-
-
860
0.0
%
-100.0
%
Total noninterest income
$
9,880
$
8,071
$
7,726
$
7,357
$
8,438
22.4
%
17.1
%
Noninterest expense for the third quarter increased $1.1 million to $37.4 million from $36.3 million for the second quarter of 2025. Third quarter noninterest expense was up 2.8% from the second quarter primarily due to a $0.6 million gain on sale of an other-real-estate-owned property during the second quarter. Additionally, professional fees increased $0.3 million, and occupancy and equipment increased $0.2 million. The efficiency ratio for the third quarter was 52.65%, compared with 55.74% for the second quarter of 2025.
For the Three Months Ended (in thousands)
Percentage Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Noninterest Expense
Salaries and employee benefits
$
22,163
$
22,069
$
20,972
$
20,498
$
20,851
0.4
%
6.3
%
Occupancy and equipment
4,507
4,344
4,450
4,503
4,499
3.8
%
0.2
%
Data processing
3,860
3,727
3,787
3,800
3,839
3.6
%
0.5
%
Professional fees
1,978
1,725
1,468
1,821
1,492
14.7
%
32.6
%
Supplies and communication
423
515
517
551
538
-17.9
%
-21.4
%
Advertising and promotion
712
798
585
821
631
-10.8
%
12.8
%
All other operating expenses
3,665
3,567
3,175
3,847
2,875
2.7
%
27.5
%
Subtotal
37,308
36,745
34,954
35,841
34,725
1.5
%
7.4
%
Other real estate owned expense (income)
17
(461
)
41
(1,588
)
77
-103.7
%
77.9
%
Repossessed personal property expense (income)
32
63
(11
)
281
278
-49.2
%
-88.5
%
Total noninterest expense
$
37,357
$
36,347
$
34,984
$
34,534
$
35,080
2.8
%
6.5
%
Hanmi recorded a provision for income taxes of $9.4 million for the third quarter of 2025, compared with $6.1 million for the second quarter of 2025, representing an effective tax rate of 29.9% and 28.8%, respectively. For the nine months ended September 30, 2025 and 2024, the provision for income taxes was $23.0 million and $18.8 million, representing an effective tax rate of 29.5% and 29.7%, respectively.
Financial PositionTotal assets at September 30, 2025 were $7.86 billion, unchanged from $7.86 billion at June 30, 2025. Nonetheless, changes in assets included a $164.4 million decrease in cash, a $43.1 million decrease in loans held for sale, a $219.3 million increase in loans, net of allowance for credit losses, and a $13.4 million decrease in securities available for sale.
Loans held-for-sale were $6.5 million at September 30, 2025, down from $49.6 million at June 30, 2025. At the end of the third quarter, loans held-for-sale consisted solely of the guaranteed portion of SBA 7(a) loans. At the end of the second quarter, loans held-for-sale included $41.9 million of residential mortgage loans as well as $7.7 million of the guaranteed portion of SBA 7(a) loans.
As of (in thousands)
Percentage Change
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Q3-25
Q3-25
2025
2025
2025
2024
2024
vs. Q2-25
vs. Q3-24
Loan Portfolio
Commercial real estate loans
$
4,015,291
$
3,948,922
$
3,975,651
$
3,949,622
$
3,932,088
1.7
%
2.1
%
Residential/consumer loans
1,043,577
993,869
979,536
951,302
939,285
5.0
%
11.1
%
Commercial and industrial loans
1,052,522
917,995
854,406
863,431
879,092
14.7
%
19.7
%
Equipment finance
416,869
445,171
472,596
487,022
507,279
-6.4
%
-17.8
%
Loans receivable
6,528,259
6,305,957
6,282,189
