KBRA Affirms Ratings for Hanmi Financial Corporation

KBRA affirms the senior unsecured debt rating of BBB, the subordinated debt rating of BBB-, and the short-term debt rating of K3 for Los Angeles, CA-based Hanmi Financial Corporation (NASDAQ: HAFC) (“Hanmi” or "the company"). Additionally, KBRA affirms the deposit and senior unsecured debt ratings of BBB+, the subordinated debt rating of BBB, and the short-term deposit and debt ratings of K2 for HAFC’s subsidiary, Hanmi Bank ("the bank"). The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings remain solidified by management’s disciplined operating strategy and the bank’s inherent franchise strengths, demonstrated by extensive business relationships within its target markets, including Korean companies and consumers that constitute about 15% of the total loan and deposit books, the robust and relatively stable base of NIB deposits (~30% of total deposits), and the sturdy (and consistently managed) capital profile.

Disciplined noninterest expense management has enabled the bank to generate better-than-peer profitability metrics through time; KBRA estimates that the low overhead expense ratio in 2025 produced a positive swing of 0.45% relative to average assets, versus rated peers.

Compared to rated peer averages, the somewhat high interest sensitive IB deposit base, modestly lower revenue diversification, and high proportion of loans to deposits (core and total), as evidenced by the high RWA density ratio, serve as offsets to the above-mentioned strengths. The cost of IB deposits, since the end of ZIRP, has been the primary factor for the modestly more variable NIM performance relative to peers.

In recent years, loan quality has tracked favorably, versus peer averages, with relatively low levels of NPLs, together with peer-like rates of loan NCOs. KBRA believes that modest loan growth in the past three years, reflective of management’s goal to generally fund growth with core deposits, has benefited loan quality metrics, as well as capital ratios.

Asset liquidity has been managed in a tight range, with ST investments and the securities portfolio amalgamating 13% of total assets, as of 4Q25, somewhat low for the relatively high proportion of estimated uninsured deposits (38% of total assets as of 4Q25). The mix of uninsured deposits is balanced between time and non-maturity deposits, and reflective of the financial profile of the bank’s customers. The higher proportion of time deposits contributes to the bank’s higher cost of IB deposits. Liquid assets and available FHLB borrowing capacity cover total uninsured deposits.

HAFC, on a standalone basis, operates with moderate financial leverage, commensurate with rated peers, albeit with substantial liquidity historically (40% of total debt, including TruPS at 4Q25).

Rating Sensitivities

Positive rating momentum would most likely be driven by consistently stable earnings performance through a traditional economic and interest rate cycle and improved revenue diversification, in conjunction with the ongoing disciplined capital management practices at the bank and the company. Conversely, rating pressure at the bank would most likely develop from unexpected loan quality erosion, such that profitability becomes highly variable, including episodes of annual net losses, or bank regulatory capital ratios were to decrease and likely to be maintained at levels well below peers.

To access ratings and relevant documents, click here.

Methodologies