Hanmi Financial: Corporate Korea Fuel Deposits and a Portfolio Shift Gains Traction
Korea-client deposits hit an all-time high of 17% of total while C&I loans reach 18% of the book, supporting a stable margin and strong credit.
HAFC · Earnings Call · 2026-07-21
Hanmi Financial (HAFC) delivered a steady, well-executed quarter in Q2 2026, with net income rising to $23.5 million and returns improving to 1.2% ROAA. The bank's strategic bets on Corporate Korea and C&I loans are now visibly shaping the balance sheet, while the deposit base gets stronger and credit stays exceptionally clean. The stock has rallied 11% over the past three months, a vote of confidence in the trajectory.
Corporate Korea and the C&I Pivot
The quarter's standout was the Corporate Korea engine. Deposits from these relationships rose 6.2% to a record $1.2 billion, now 17% of total deposits. “Deposits from corporate Korea clients increased 6.2% during the quarter to $1.2 billion, reaching an all-time high of approximately 17% of total deposits.” — Bonita Lee, CEO · 2026-07-21 This isn't a fresh bet—management has been touting the initiative for years—but the scale is becoming material. Meanwhile, portfolio diversification is progressing: C&I loans are up 27.6% year-over-year and now represent 18% of the book, up from 14% a year ago.
Our portfolio diversification strategy continues to gain traction. Commercial and industrial loans increased 1.6% sequentially and 28% year-over-year, now representing 18% of our total loans.
The message is consistent with prior calls: C&I remains the growth engine. “we do expect the C&I to be the focus, continuing with our portfolio diversification.” — Bonita Lee, Chief Executive Officer · 2026-04-21 And the pipeline supports this—back in July 2025, the bank noted, “Looking at the pipeline coming into third quarter, C&I pipeline -- level of the C&I pipeline is much higher than that of second quarter.” — Anthony I. Kim, Executive (likely Chief Lending Officer or similar) · 2025-07-22
Funding Strength and a Stable Margin
The bank also strengthened its funding franchise. Noninterest-bearing deposits jumped 5.2% sequentially, lifting their share to 31% of total deposits. “Noninterest-bearing deposits increased to 31% of total deposits, reflecting the strength and quality of our funding base.” — Bonita Lee, CEO · 2026-07-21 This low-cost base helped net interest income rise 1% even as net interest margin dipped 2 basis points to 3.36%. CFO Romolo Santarosa attributed the decline to a one-time FHLB San Francisco dividend policy change and expects margin to stay broadly stable through year-end. Deposit costs have flattened in July, and loan yields are holding.
Credit: One Isolated Blemish, No Trend
Credit quality remains a cornerstone. Nonperforming loans fell to 0.15% of total loans, and net charge-offs were minimal. The only blemish is a $21.2 million CRE loan that moved to classified from special mention after slipping to 30-89 days past due. Management stressed that the property is well collateralized. “The bank commissioned an appraisal and a property condition report and found the collateral to be in good condition.” — Anthony Kim, Unknown · 2026-07-21 This is a classic idiosyncratic credit event, not a systemic signal, and Hanmi's nonperforming loans metrics continue to improve.
Outlook and Capital
Guidance remains for low to mid-single-digit loan growth for the year, with SBA production expected to revert to a ~$45 million quarterly pace. Expenses should hold near the $39 million quarterly level. The tangible common equity ratio stands at 10.03%, and the bank returned 58% of earnings through dividends and buybacks. With shares trading at roughly 1.0x price-to-book, the market is pricing a quiet, well-managed institution—but the corporate Korea flywheel and steady C&I growth suggest a bank with more optionality than the multiple implies. Net income has climbed back to $23 million in the most recent reported quarter (Q1 2026), up 28% year-over-year and approaching the 2022 peak.