In reporting a $5.2 million first-quarter loss it attributed to continuing credit trouble, Hanmi Financial Corp. of Los Angeles said Tuesday that it has been going after deposits more aggressively than loans.
Jay S. Yoo, Hanmi's president and chief executive officer, called the results "disappointing," but cited the deposit growth as a highlight.
"I am encouraged that during the quarter we have reduced wholesale funding," he said in a press release.
Deposits increased 4.1% from the fourth quarter and 5.6% from a year earlier, to $3.2 billion, because of a promotion over the past three months touting attractive rates.
As a result, borrowings such as Federal Home Loan Bank advances decreased by roughly one-fourth from the previous quarter and a year earlier, to $312.8 million.
Hanmi's asset size was roughly flat with a year earlier and slipped 1.2% from the fourth quarter, to $3.9 billion. The company attributed the shrinkage to its active management of its balance sheet to deal with the prolonged economic weakness.
The provision for credit losses was down 2% from the fourth quarter but increased 40% from a year earlier, to $25 million.
Credit quality deteriorated compared with both periods. Chargeoffs rose 37% from the fourth quarter and 62% from a year earlier, to $11.8 million, mostly because of trouble with commercial and industrial loans and property loans to small businesses. The ratio of nonperforming loans to total loans rose 36 basis points from the fourth quarter and 130 basis points from a year earlier, to 3.98%.
