Shares of Hanmi Financial Corp. jumped 22 percent Thursday after the Koreatown bank said it had returned to profitability for the first time in two years by significantly reducing its provision for bad loans.
The holding company for Hanmi Bank reported fourth quarter net income of $5.3 million (4 cents a share), compared with a net loss of $35.9 million (-70 cents) a year earlier. Analysts surveyed by Thomson Reuters on average expected a per-share loss of 7 cents.
Net interest income, before the provision for credit losses, fell 9 percent to $26 million. Non-interest income fell 23 percent to $6.1 million. But the bank lowered its provision for credit losses, which was $77 million a year earlier, to only $5 million.
Chief Executive Jay Yoo said the bank’s capital raise in July also helped its return its balance sheet to “well capitalized” regulatory status
"We believe that our continuing efforts to shed problem assets through credit workouts and asset sales has improved credit quality metrics and allowed us to return to profitability," Yoo said in a statement.
Shares closed up 22 cents, or 22 percent, to $1.43 on the Nasdaq.
For reprint and licensing requests for this article, CLICK HERE.