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Hanmi Financial Corporation(HAFC) and its subsidiaries recently re leased their consolidated statements of income for the first nine months of 2023, revealing a significant change in both net income and revenue. The financial data shows a mixed picture of performance, with noteworthy increases in revenue but a notable decrease in net income compared to the same period in 2022.
The financial report indicates that Hanmi Financial Corporation and its subsidiaries experienced a 15.8% decline in net income during the first nine months of 2023. The net income for this period was $61,408,000, down from $72,915,000 in the same period in 2022. This decline in net income is a significant concern for the company, and it can be attributed to various factors, including changes in interest income and noninterest expenses.
In contrast to the decline in net income, Hanmi Financial Corporation and its subsidiaries witnessed a substantial increase in revenue during the first nine months of 2023. The company reported total interest and dividend income of $272,144,000, marking a remarkable 42.1% increase compared to $191,574,000 in the same period last year. This surge in revenue is primarily due to higher interest and fees on loans receivable and increased interest on securities and deposits in other banks.
Factors Influencing Financial Performance
Several factors contributed to the financial performance of Hanmi Financial Corporation and its subsidiaries in the first nine months of 2023:
Net Interest Income: The net interest income before credit loss expense decreased by 2.9%, totaling $168,130,000. The interest expenses on deposits and borrowings experienced significant increases, which impacted the overall net interest income. Additionally, the credit loss expense increased by 820.8%, further affecting the company's financial position.
Noninterest Income: Noninterest income, comprising service charges on deposit accounts, trade finance, and other service charges, and gain on the sale of Small Business Administration (SBA) loans, remained relatively stable. However, other operating income showed substantial growth, increasing by 76.0%, which contributed to the overall noninterest income.
Noninterest Expense: The company's noninterest expenses rose by 5.1%, reaching $101,316,000. While some categories such as salaries and employee benefits, data processing, and professional fees experienced increases, others like advertising and promotion saw reductions.
Income Tax Expense: Hanmi Financial Corporation reported an income tax expense of $25,695,000, a 13.5% decrease from the previous year.
Hanmi Financial Corporation's financial results for the first nine months of 2023 indicate a notable decline in net income, which was offset by strong revenue growth. The company will likely continue to assess its operations to manage noninterest expenses, interest expenses, and credit loss expenses to improve profitability in the coming quarters.