Hanmi Financial CorporationHAFC

Morningstar Rating

Stock Research and Analysis

by Michael Kon, CFA

Hanmi Financial is one of the three main banks that provide banking services to the Korean community in the United States. Over the years, the bank has achieved tremendous growth while producing decent returns for shareholders. We think replicating this good performance will be challenging going forward. Read more

Bulls Say

Hanmi caters to an ethnic community that keeps growing, which allows the bank to increase its deposits.

Hanmi has become a specialist in real estate and is often on the short lists of many real estate developers and investors.

Ties with Korea make Hanmi the bank of choice whenever clients need trade-finance products to facilitate trade with this country. Read more

Bears Say

Hanmi is at the epicenter of the real estate bust, and the potential loan losses are yet to be recognized.

Hanmi's strong growth in recent years is a result of the California real estate boom. With the downturn in real estate, achieving high growth will be a challenge for many years.

Hanmi's assets are more rate-sensitive than its liabilities. Because interest rates are on the decline, the bank is expected to see its margins squeezed in the short run. Read more

Strategy

The bank's strategy is to collect deposits from Korean-Americans and extend loans to fund small to medium-size businesses and the purchase of real estate. The bank also seeks growth by acquiring small banks in cities where there is a large Korean community. Read more

Management

Jay S. Yoo was appointed president and CEO in June 2008. Yoo has 37 years of banking experience, almost half of it in the U.S. Before joining Hanmi, Yoo was the president and COO of Woori America Bank, a subsidiary of Korea-based Woori Bank. Despite Yoo's experience, we are concerned that he has only weak ties to the Korean business community in Southern California, Hanmi's main market. Read more

Profile

Hanmi Financial is a Los Angeles-based bank that caters to Korean-Americans. The bank mainly focuses on small businesses and commercial and real estate loans. Hanmi also offers trade-finance products. Read more

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