Hanmi Financial (HAFC) AI Stock Analysis

• Market Cap: $704.85M
• Dividend Yield: 4.46%
• Average Volume (3M): 119.73K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.99
• Revenue Growth: 5.19%
• EPS Growth: -10.86%
• Country: US
• Employees: 597
• Sector: Financial
• Sector Strength: 79
• Industry: Banks - Regional
• EPS (TTM): 0.58
• Shares Outstanding: 30,212,095
• 10 Day Avg. Volume: 91,327
• 30 Day Avg. Volume: 119,735
• PEG Ratio: 2.48
• Price to Book (P/B): 0.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.59
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 2.97
• Enterprise Value/Ebitda: 14.00
• 1Y Price Target: $26.50
• Price Target Upside: 11.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: ―

Hanmi Financial exhibits strong financial performance with consistent revenue growth and profitability, bolstered by a reasonable valuation and attractive dividend yield. Technical analysis indicates moderate strength, while the earnings call highlights strategic initiatives and growth, albeit with some operational challenges. The overall score reflects a balanced view of solid fundamentals and strategic prospects.

Positive Factors

Earnings Growth

The stock rating is upgraded to BUY due to expectations of significant earnings per share growth driven by deposit repricing and stable loan yields.

Valuation

A fair value estimate increase to $30.00 reflects optimism about future financial performance not yet reflected in the stock's current valuation.

Negative Factors

Loan Quality

Criticized loans increased $89 million sequentially to $160 million, primarily driven by two CRE loans in the hospitality industry and one C&I loan in the healthcare industry.

Hanmi Financial Business Overview & Revenue Model

Company Description

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. The company offers various deposit products, including noninterest-bearing checking accounts, interest-bearing checking and savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. It also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit, as well as international finance, and trade services and products comprising letters of credit, and import and export financing. In addition, the company offers consumer loans, secured and unsecured loans, home equity loans, residential mortgages, and credit cards; SBA and trade finance lending to small and middle market businesses; and small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. As of February 28, 2022, it operated a network of 35 full-service branches and 8 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was founded in 1982 and is headquartered in Los Angeles, California.

How the Company Makes Money

Hanmi Financial makes money primarily through its subsidiary, Hanmi Bank, by offering a variety of financial products and services. The bank's key revenue streams include interest income from loans and mortgages, which are extended to both commercial and individual clients. Additionally, the company generates income from fees and service charges associated with deposit accounts, transaction processing, and cash management services. Hanmi Bank also earns revenue from investment securities and other financial instruments. The bank's focus on the Korean-American community and its extensive branch network in key regions contribute significantly to its earnings. Strategic partnerships and community engagement further enhance its business operations and revenue generation.

Hanmi Financial Financial Statement Overview

Summary

Hanmi Financial demonstrates solid financial health with consistent revenue growth and profitability. The balance sheet indicates stable leverage and good returns on equity. However, recent challenges in cash flow management slightly detract from its overall financial performance.

Income Statement

Hanmi Financial demonstrates strong profitability with a net profit margin of 15.60% and consistent revenue growth over the years. Though the EBIT margin is relatively low at 2.70% for 2024, the company has maintained a positive trajectory in total revenue from previous years, showcasing stability in its income generation capabilities.

Balance Sheet

The balance sheet of Hanmi Financial reflects a moderate debt-to-equity ratio of 0.54, indicating manageable leverage. The equity ratio stands at 9.54%, suggesting a moderate reliance on equity financing. Return on equity is robust at 8.49%, highlighting efficient use of shareholders' equity, though slightly reduced from prior years.

Cash Flow

Cash flow analysis reveals challenges, with the operating cash flow to net income ratio being unavailable for 2024 due to missing data. Historically, free cash flow has been positive, but the lack of free cash flow in 2024 indicates potential cash management issues. Prior years showed positive free cash flow to net income ratios, reflecting effective cash generation relative to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
233.50M	249.16M	271.85M	235.55M	224.00M
	Gross Profit
233.50M	237.91M	271.85M	225.97M	213.98M
	EBIT
87.75M	15.37M	161.84M	135.49M	59.49M
	EBITDA
0.00	0.00	155.78M	8.06M	9.63M
	Net Income Common Stockholders
62.20M	80.04M	101.39M	98.68M	42.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
304.80M	1.17B	1.21B	1.52B	1.15B
	Total Assets
7.68B	7.57B	7.38B	6.86B	6.20B
	Total Debt
393.14M	455.01M	779.41M	352.51M	268.97M
	Net Debt
88.34M	152.69M	426.99M	-256.46M	-122.88M
	Total Liabilities
6.95B	6.87B	6.74B	6.22B	5.62B
	Stockholders Equity
732.17M	701.89M	637.51M	643.42M	577.04M
Cash Flow		Free Cash Flow
51.33M	105.38M	145.38M	91.00M	55.81M
	Operating Cash Flow
53.95M	107.80M	147.31M	93.73M	60.20M
	Investing Cash Flow
-107.47M	-209.99M	-881.51M	-447.04M	-407.59M
	Financing Cash Flow
56.00M	52.10M	477.65M	570.43M	617.55M

Hanmi Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HAFC, the sentiment is Positive. The current price of 23.73 is above the 20-day moving average (MA) of 23.30, above the 50-day MA of 22.51, and above the 200-day MA of 22.13, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 55.55 is Neutral, neither overbought nor oversold. The STOCH value of 77.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HAFC.

Hanmi Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESQ	79 Outperform	$760.52M	17.03	19.66%	0.72%	16.18%	13.78%
MBWM	73 Outperform	$722.14M	9.26	13.55%	3.23%	12.26%	-6.93%
HAFC	73 Outperform	$704.85M	10.93	8.82%	4.46%	5.19%	-10.86%
EQBK	72 Outperform	$692.74M	10.03	11.84%	1.44%	40.43%	545.45%
CAC	72 Outperform	$680.48M	12.80	8.24%	4.22%	18.13%	4.86%
Sector *	64 Neutral	$12.83B	9.78	7.78%	16985.64%	12.26%	-7.81%
NBBK	55 Neutral	$599.81M	13.77	6.26%	―	22.18%	277.02%

Hanmi Financial Corporate Events

Hanmi Financial Shares Growth Strategies in Presentation

On March 11, 2025, Hanmi Financial Corporation distributed a slide presentation to analysts and prospective investors, detailing its operating and growth strategies along with financial performance. The presentation, part of a Current Report on Form 8-K, is intended to furnish information without being deemed as filed for regulatory purposes, and does not imply the information is material or complete for investment decisions.

Hanmi Financial Extends CEO and CFO Contracts

On March 4, 2025, Hanmi Financial Corporation and its subsidiary Hanmi Bank extended the employment agreements of key executives. The employment agreement for Bonita I. Lee, President and CEO, was extended to April 28, 2028, with automatic annual renewals unless notice is given. Similarly, the agreement for Romolo C. Santarosa, Senior Executive Vice President and CFO, was extended to December 31, 2027, also with automatic renewals. These extensions aim to ensure leadership stability within the company.

Hanmi Financial Appoints Christine P. Ball to Board

On March 3, 2025, Hanmi Financial Corporation announced the appointment of Christine P. Ball to its Board of Directors, effective March 1, 2025. With over 20 years of experience in corporate, commercial, and private banking, Ms. Ball’s expertise in credit and risk management is expected to enhance Hanmi’s financial stewardship and growth strategies. Her appointment to various committees within the company signals a strategic move to strengthen Hanmi’s commitment to sound financial practices.

Hanmi Financial Highlights Growth and Community Focus

On February 20, 2025, Hanmi Financial Corporation shared a presentation with analysts and prospective investors that highlighted its operating and growth strategies, as well as its financial performance. The company continues to demonstrate strong financial health with significant growth in deposits and loans, disciplined credit administration, and a focus on community support, evidenced by an increased cash dividend and a commitment to community reinvestment efforts.