Hanmi Financial Corp. is making strides in a plan to regain its reputation as one of Koreatown’s strongest financial institutions.
The holding company for Hanmi Bank recently completed a 1-for-8 reverse stock split to boost its share price and attract institutional investors. The move came just weeks after it raised more than $80 million in a stock offering.
The recent moves, combined with efforts to shed bad assets, are drawing praise from analysts.
“They’ve made a good bit of progress in reducing their problem assets and they’ve raised some capital,” said Joseph Gladue, an analyst with West L.A.’s B. Riley & Co. “They have been making more rapid progress than you’ve seen throughout the industry.”
Hanmi, once the nation’s largest Korean-American bank, took heavy loan losses during the downturn and was forced into an acquisition by a South Korean financial firm. Regulators did not approve the merger, however. Meanwhile, Hanmi managed to improve its financial health. While the bank has returned to a profit and raised capital, it’s not done righting its ship.
“They still have work to do on the asset quality front, (but) they are moving in the right direction,” Gladue said.
In a statement, Hanmi Chief Executive Jay S. Yoo said the reverse stock split was intended to make “our common stock more attractive to institutional investors and (reduce) administrative costs related to the large number of shares issued and outstanding.” Many institutional investors will not buy stock trading at less than $1 per share, as Hanmi’s was for more than a month.
The reverse split reduced the number of outstanding shares from 252 million to 31.5 million and raised the price from 94 cents a share to $7.52.
Nearly three years after failing, WesCorp finally found a buyer.
Western Corporate Federal Credit Union, the giant San Dimas corporate credit union better known as WesCorp, will be acquired by Catalyst Corporate Federal Credit Union of Plano, Texas, regulators announced last month.
WesCorp was seized by regulators in early 2009 after losing billions of dollars on bad investments. Corporate credit unions provide a variety of services for retail credit unions, including check clearing and investment.
Under conservatorship of the National Credit Union Administration, WesCorp’s members recently tried to establish an independent institution but failed to raise sufficient capital. Regulators then said they would look for another corporate credit union to acquire WesCorp, a move that resulted in the Catalyst deal.
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