Hanmi Financial in Los Angeles reported higher quarterly earnings as returns from mortgages offset a drop in the sale of Small Business Administration loans.
The $3 billion-asset company said in a press release Tuesday that its second-quarter profit rose 16% from a year earlier, to $11 million. Earnings of 35 cents a share topped the average estimate of analysts polled by Bloomberg by 2 cents.
Earnings were boosted by growth in lending. Net interest income rose 3%, to $28 million. Total loans increased by 8%, to $2.3 billion, offsetting a net interest margin that compressed by 16 basis points, to 3.94%.
Asset quality also improved. Net chargeoffs fell 50%, to $806,000.
Noninterest income decreased 25%, to $5.1 million. The company attributed the change to lower returns on the sale of SBA loans, which fell 79% from the same time last year.
"Our SBA team is starting to rebuild momentum" after opening up an office in northern Virginia during the second quarter, C.G. Kum, Hanmi's president and chief executive, said in the release. The company recently appointed a Anna Chung, an executive from rival Wilshire Bank, to "revitalize" its SBA program.
Noninterest expenses remained steady, at $18.6 million.
Hanmi said in the release that it expects to complete its anticipated purchase of the $1.6 billion-asset Central Bancorp by the end of this year.