Hanmi Bank: Overview of the bank

Established more than 25 years ago, Hanmi Bank is a relatively large bank that was founded in the year 1982. The bank’s main office is located in the state of California however, the banks presence extends to multiple states. Since 1982, the Federal Deposit Insurance Corporation has provided insurance to the bank. Along with the National Credit Union Administration (NCUA), the FDIC is the only other governmental agency that provides deposit insurance to American depository institutions.  In addition, the FDIC is the primary federal regulator for the bank and is focused on supervising and examining the bank for operational safety and soundness. As a result of its size and presence, the bank is considered a national bank. Based on our estimates, we believe its asset base of $6,856 million ranks it in the 90th percentile of banks in the United States. Hanmi Bank is essentially a purely domestic bank from an operational standpoint. This is because the bank does not have offices outside of the United States. Within the U.S. the bank currently has 37 offices, all of which are located across multiple states in the country. In terms of headcount, the bank currently has 590 employees.

Overview of the Bank’s Assets and Liabilities

Some of the key components of the bank’s balance sheet are total assets of $6,856 million, total loans extended to customers of $5,092 million and customer deposits of $5,881 million. Domestic deposits currently represent (in terms of total size), 86% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 55% are insured based on the latest available information. Moving on to the components of the bank’s assets we can see that loans provided to customers represent 75% of the banks total assets. Of this amount, loans related to real estate activities comprised 80% of gross loans outstanding. Hanmi Bank has $426 million of outstanding 1-4 family residential loans (mortgages), which in total represents 8% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 0% and 20% of loans outstanding, respectively.

Contact Information For Hanmi Bank

  • Main Office Address: 3660 Wilshire Blvd, # Ph-A, Los Angeles, CA 90010
  • Website: http://www.hanmi.com
  • Total Number of Branches: 37
  • Total Number of International Branches: None
  • Number of Employees: 590
  • FDIC Certificate Number: 24170
  • FDIC Community Bank: No
  • FDIC Field Office: Los Angeles (West)
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 657365
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

hanmi bank-financial-metrics-dec-21

Hanmi Bank has total assets of $6,856 million and over the past year its asset base has increased substantially, reporting an increase of 10.6%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $5,092 million based on the latest available information. Its net loans outstanding have increased over the past year, with an increase of 6.1%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 8% of the bank’s loan book. The bank has $426 million of residential mortgages outstanding, which compares with $362 million in the prior year. This implies an increase of 17.6% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 19.5% of its total lending and stood at $1,007 million based on the latest available information.

Bank Liquidity and Funding

How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. Customer deposits is usually one of the cheapest ways to finance a bank. This is especially the case for accounts that don’t pay interest, such as checking accounts. Hanmi Bank has total customer deposits of $5,881 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 11.1%. Furthermore, the bank has a loan to deposit ratio of 87% which is above the national average. Banks in the United States have a loan to deposit ratio of approximately 82%. A lower ratio is better since it means that a bank’s lending activities are more comfortably covered by its deposit base. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.

Bank Performance and Capital Metrics

hanmi bank-performance-metrics-dec-21

Above we have shown a summary of some of the performance metrics for Hanmi Bank compared with the average U.S. bank. As a starting point, looking at the bank’s return on assets, over the past year it has improved. Importantly, on this metric we can also see that the bank is above the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has improved. In addition, we can also see that the bank is above the average bank on this metric. The bank’s total leverage ratio has been relatively stable over the past year and is currently approximately inline the national average. Finally, Hanmi Bank’s Tier 1 capital ratio has been relatively stable over the past year. On this metric the bank is below the national average.

Concluding Comments on Hanmi Bank

Our final rating for Hanmi Bank, after assessing the bank on several important metrics, is 3.3 out of 5.0, which is above average. There are many factors that go into the calculation of our rating and almost all banks will have both positive and negative contributors. As an example, Hanmi Bank scores well on its cost of funds, which is above the national average. However when we consider the bank’s net interest margin, the bank does not have a good score mainly because it is below the national average which impacts its rating. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.