Hanmi Financial Q2 2026 net income rises 4.2% to $23.5 million
Hanmi Financial Corporation reported Q2 2026 net income of $23.5 million, up 4.2% QoQ, with deposits growing 2.3% to $6.96 billion and net interest margin at 3.36%.
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Hanmi Financial Corporation reported net income of $23.5 million, or $0.79 per diluted share, for the second quarter of 2026, an increase of 4.2% compared to $22.6 million, or $0.75 per diluted share, in the first quarter of 2026. The parent company of Hanmi Bank achieved a return on average assets of 1.20% and a return on average equity of 11.09% for the quarter. Deposits grew 2.3% sequentially to $6.96 billion, driven by a 5.2% increase in noninterest-bearing deposits, while total assets rose 2.1% to $8.00 billion.
CEO Commentary
"Hanmi delivered another quarter of strong earnings growth, reflecting consistent execution across our business," said Bonnie Lee, President and Chief Executive Officer. "Our capital position remained healthy while returning 58% of earnings to shareholders in the form of dividends and share repurchases. Return on average equity increased to 11.1%, supported by robust deposit growth, solid loan production, lower funding costs, and prudent expense management."
Q2 2026 Financial Performance Summary
The following table summarizes key financial metrics for the second quarter of 2026 compared to prior periods:
| Metric: | Q2 2026 | Q1 2026 | Q2 2025 |
|---|---|---|---|
| Net Income: | $23,505 thousand | $22,557 thousand | $15,117 thousand |
| EPS (Diluted): | $0.79 | $0.75 | $0.50 |
| Return on Avg. Assets: | 1.20% | 1.18% | 0.79% |
| Return on Avg. Equity: | 11.09% | 10.86% | 7.48% |
| Net Interest Margin: | 3.36% | 3.38% | 3.07% |
| Efficiency Ratio: | 54.07% | 53.48% | 55.74% |
| Tangible Common Equity/Tangible Assets: | 10.03% | 10.11% | 9.58% |
| Tangible Common Equity per Share: | $27.04 | $26.56 | $24.91 |
Net Interest Income and Margin
Net interest income increased $0.7 million, or 1.0%, to $63.9 million for the second quarter of 2026, from $63.2 million for the first quarter. This increase was principally due to higher interest income on loans and securities. Net interest margin declined by two basis points to 3.36%, driven by lower contributions from loans and FHLB stock. The average yield on loans remained unchanged at 5.90%, while the cost of interest-bearing deposits decreased to 3.17%.
| Net Interest Income Item: | Q2 2026 | Q1 2026 | Q2 2025 |
|---|---|---|---|
| Total Interest & Dividend Income: | $103,322 thousand | $102,152 thousand | $101,333 thousand |
| Total Interest Expense: | $39,465 thousand | $38,949 thousand | $44,194 thousand |
| Net Interest Income: | $63,857 thousand | $63,203 thousand | $57,139 thousand |
| Avg. Loan Yield: | 5.90% | 5.90% | 5.93% |
| Cost of Interest-Bearing Deposits: | 3.17% | 3.20% | 3.64% |
| Cost of Deposits: | 2.25% | 2.26% | 2.56% |
Financial Position: Loans and Deposits
Total loans held for investment were $6.54 billion at June 30, 2026, down 0.2% from the prior quarter. New loan production was $371.9 million for the second quarter at an average rate of 6.59%. Deposits were $6.96 billion at the end of the second quarter, up $154.7 million, or 2.3%, from the prior quarter. Noninterest-bearing demand deposits represented 30.7% of total deposits.
| Balance Sheet Item: | Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 |
|---|---|---|---|
| Total Assets: | $8,001,473 thousand | $7,839,227 thousand | $7,862,363 thousand |
| Total Loans (held for investment): | $6,535,312 thousand | $6,545,466 thousand | $6,305,957 thousand |
| Total Deposits: | $6,955,342 thousand | $6,800,622 thousand | $6,729,122 thousand |
| Noninterest-Bearing Deposits: | $2,135,418 thousand | $2,030,743 thousand | $2,105,369 thousand |
| Stockholders' Equity: | $812,680 thousand | $802,819 thousand | $762,834 thousand |
Asset Quality
Asset quality remained strong during the second quarter. Nonperforming assets were $9.9 million, or 0.12% of total assets, at June 30, 2026, compared with $12.4 million, or 0.16% of total assets, at March 31, 2026. The allowance for credit losses was $70.5 million, or 1.08% of loans, at both June 30 and March 31, 2026.
| Asset Quality Metric: | Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 |
|---|---|---|---|
| Nonperforming Assets to Total Assets: | 0.12% | 0.16% | 0.33% |
| Nonperforming Loans to Total Loans: | 0.15% | 0.19% | 0.41% |
| Allowance for Credit Losses to Loans: | 1.08% | 1.08% | 1.06% |
| Net Charge-offs to Avg. Loans (annualized): | 0.08% | 0.16% | 0.73% |
| Criticized Loans to Total Loans: | 1.74% | 1.78% | 0.74% |
Capital Position and Shareholder Returns
Hanmi returned 58% of second-quarter net earnings to shareholders in the form of $8.3 million in dividends and $5.2 million in share repurchases. During the second quarter, Hanmi repurchased 160,000 shares of common stock at an average price of $30.24. Hanmi Financial's total risk-based capital ratio stood at 15.29% and Hanmi Bank's total risk-based capital ratio was 14.48% at June 30, 2026.
| Regulatory Capital Ratio: | Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 |
|---|---|---|---|
| Hanmi Financial – Total Risk-Based Capital: | 15.29% | 15.22% | 15.20% |
| Hanmi Financial – Tier 1 Risk-Based Capital: | 12.61% | 12.52% | 12.46% |
| Hanmi Financial – CET1 Capital: | 12.28% | 12.20% | 12.12% |
| Hanmi Bank – Total Risk-Based Capital: | 14.48% | 14.45% | 14.39% |
| Hanmi Bank – Tier 1 Leverage Capital: | 11.71% | 11.74% | 11.43% |
How will Hanmi Financial balance its aggressive shareholder return strategy with the need to maintain capital ratios given the slight compression in net interest margin?
What are the company's projections for loan demand growth in the second half of 2026 given the sequential decline in total loans held for investment?
Can the increase in noninterest-bearing deposits be sustained, and how might this impact future funding costs if interest rate environments shift?
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