Hanmi Financial Corp. saw its shares drop by 14 percent Friday after it warned that loan losses would lead to lower first quarter earnings.
The Los Angeles-based bank holding company said it expects first-quarter net income to be as much as 30 percent lower than the $17.3 million (35 cents per share) reported in the fourth quarter. It would also be lower than the net income the company posted in the same period of 2006.
The nation's largest Korean-American bank also said its non performing loans are rising, requiring it to raise it first-quarter allowance for loan losses to roughly 1.07 percent of total gross loans, compared to 0.96 percent at the end of December.
Hanmi anticipates that losses will be approximately $6.4 million for the first three months of 2007 compared to $1.6 million in the prior quarter.
Hanmi President Sung Won Sohn said about two-thirds of the increase in provision for credit losses is based on the poor performance of four outstanding loans. Total non-performing assets are expected to total approximately $20 million for the quarter, he said.
Shares of Hanmi were down $2.68, or 14 percent, to $16.45 in afternoon trading on the Nasdaq.
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