Shares of Hanmi Financial Corp. fell more than 7 percent Tuesday morning after the Koreatown bank priced a $70 million stock offering below the previous day’s close.
The holding company for Hanmi Bank, which had 151 million shares outstanding at the end of the third quarter, said it was selling 87.5 million shares at 80 cents each, compared with Monday’s closing price of 98 cents.
The holding company has been working to shore up its capital since taking significant loan losses during the recession. It said a “substantial portion” of net proceeds would be used by the bank as additional capital and to support organic growth initiatives and acquisitions. Underwriter FBR Capital Markets & Co. will have a 30-day option to purchase up to 13.1 million additional shares to cover any over-allotments. The bank expects to complete the sale by Friday.
Analyst Julianna Balicka at Keefe, Bruyette & Woods told investors in a note that she had expected Hanmi to price the offering “attractively” to appeal to investors but had "long-term concerns centered on muted growth prospects and a lukewarm profitability.”
Hamni did move from a loss to a profit in the third quarter on improved credit quality, with delinquent loans down 31 percent from a year earlier and non-performing assets falling 55 percent. It also took a significantly smaller provision for loan losses.
Shares closed down 11 cents, or 11 percent, to 87 cents on the Nasdaq.