Yahoo Finance Hanmi Financial Corp (HAFC) (Q1 2024) Earnings Call Transcript Highlights: Key Financial ...
Net Income: $15 million for the quarter.
Earnings Per Share (EPS): $0.50 per diluted share.
Return on Average Assets: 0.81%.
Return on Average Stockholders' Equity: 7.9%.
Deposit Growth: 1.5% increase sequentially.
Loan Growth: Excluding residential mortgage sales, grew by 0.4%.
Noninterest Income: Increased by 16%.
Net Interest Income: $50.7 million, down 4.7% from the previous quarter.
Net Interest Margin: Declined 14 basis points to 2.78%.
Noninterest Expenses: Increased by 3.5% to $36.4 million.
Credit Loss Expense: $227,000 for the quarter.
Common Equity Tier 1 Ratio: 12.05%.
Total Capital Ratio: Bank's total capital ratio was 14.5%.
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the expected impact of the $1.25 million annual cost savings from branch consolidations on overall expenses? A: Romolo Santarosa, CFO, indicated that expenses measured from Q1 2024 should decline, reaching a midpoint where the efficiency ratio could end up in the mid-50s. He anticipates a decline in expenses for the 2024 calendar year before leveling off due to inflationary pressures.
Q: What trends are you observing in early-stage delinquencies, particularly with the uptick noted on slide 22? A: Bonita Lee, CEO, explained that the increase in early-stage delinquencies was mainly due to administrative issues with residential mortgage loans, which have mostly been resolved, and a CRE loan already in the process of foreclosure.
Q: With the decline in noninterest bearing deposits, what are your expectations for the net interest margin (NIM) and deposit stabilization? A: Anthony Kim, Chief Banking Officer, noted a slowdown in the shift from noninterest-bearing to interest-bearing accounts, expecting stabilization towards the end of Q2. This shift is anticipated to support the stabilization and eventual inflection of the NIM.
Q: What drove the significant decline in loan production this quarter compared to the last? A: Bonita Lee attributed the decline primarily to a decrease in commercial real estate (CRE) loan production, influenced by the current high-interest rate environment which has slowed market transactions.
Q: Can you provide insights into the residential mortgage sales strategy, including the profile of buyers and expected pace of sales? A: Anthony Kim explained that the sales are part of a strategy to manage the balance sheet and generate noninterest income. The bank targets a sales pace of about $30 million per quarter, aiming for a premium range of 2% to 2.5%.
Q: What is the outlook for deposit costs and NIM given the current and projected interest rate environment? A: Romolo Santarosa noted that the cost of interest-bearing deposits has risen slightly, but the rate of increase is slowing. He expects the NIM to reach its inflection point by the second or early third quarter of 2024, indicating a near-term stabilization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
