HAFC | HAFC | earnings call 2026-09-07
Verbatim transcript (source: faster-whisper-small.en)

Ladies and gentlemen, welcome to the Hanmee Financial Corporation Second Quarter 2026 conference call. As a reminder, today's call is being recorded for replay purposes. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Ben Brodkowitz, Investor Relations for the company. Please go ahead. Thank you operator and thank you all for joining us today to discuss Hanmee's Second Quarter 2026 results. This afternoon, Hanmee issued its earnings release and quarterly supplemental slide presentation to accompany today's call. Both documents are available in the IR section of the company's website at hanmee.com. I'm here today with Bonnie Lee, President and Chief Executive Officer of Hanmee Financial Corporation, Anthony Kim, Chief Banking Officer, and Ron Santarosa, Chief Financial Officer. Bonnie will begin today's call with an overview. Anthony will discuss loan and deposit activities. Ron will provide details on our financial performance. And then Bonnie will provide closing comments before we open the call up for your questions. Before we begin, I would like to remind you that today's comments may include forward-looking statements under the federal securities laws. Forward-looking statements are based on current plans, expectations, events, and financial industry trends that may affect the company's future operating results and financial position. Our actual results may differ materially from those contemplated by our forward-looking statements, which involve risks and uncertainties. Discussion of the factors that could cause our actual results to differ materially from these forward-looking statements can be found in our SEC filings, including our reports on forms 10-K and 10-Q. In particular, we direct you to the discussion of certain risk factors affecting our business contained in our earnings release, our investor presentation, and in our form 10-Q. With that, I would now like to turn the call over to Bonnie Lee. Bonnie, please go ahead. Thank you, Ben, and good afternoon, everyone. Thank you for joining us today to discuss Hammi's second quarter, 2026 results. Hammi delivered another quarter of a strong financial performance driven by solid earnings growth, expanding customer relationships, discipline execution, and excellent credit quality. Our results reflect the continued momentum across the franchise. We generated healthy loan production, strengthened our deposit base, further diversified the loan portfolio, and maintained strong asset quality. Combined with the discipline expense management, these efforts translate into higher earnings and improved profitability. Importantly, we continue to create value for shareholders while preserving capital strength. During the quarter, we returned 58% of earnings through dividends and share repurchases, while further improving profitability metrics. Return on average assets increased to 1.2%, and return on average equity improved 11.1%. Taken together, these results demonstrate the resilience of our business model, the strength of our customer relationships, and our ability to execute consistently in a dynamic operating environment. Now, turning to some highlights for the quarter, net income increased to $23.5 million or $0.79 per dilute share compared to $22.6 million or $0.75 per dilute share last quarter. Net interest income increased 1% sequentially. While net interest margin declined modestly by two basis points to 3.36%, excluding the impact of the San Francisco Federal Home Loan Bank dividend policy change, margin would have been slightly higher. Deposits grew 2.3% linked quarter, driven by 5.2% increase in non-interspering accounts, led by growth in commercial accounts. Non-interspering deposits increased to 31% of total deposits, reflecting the strength and quality of our funding base. New loan originations totaled $372 million. While production was slightly lower than the prior quarter, year-to-date originations