Hanmi Financial Corporation

Ladies and gentlemen, welcome to Hami Financial Corporation's first quarter 2026 conference call. As a reminder, today's call is being recorded for replay purposes. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Ben Brokowitz, investor relations for the company. Please go ahead.

Thank you, operator, and thank you all for joining us today to discuss HOMNY's first quarter 2026 results. This afternoon, HOMNY issued its earnings release and quarterly supplemental slide presentation to accompany today's call. Both documents are available in the IR section of the company's website at HOMNY.com. I'm here today with Bonnie Lee, President and Chief Executive Officer of HOMNY Financial Corporation, Anthony Kim, Chief Banking Officer, and Ron Santarosa, Chief Financial Officer. Bonnie will begin today's call with an overview. Anthony will discuss loan and deposit activities. Ron will provide details on our financial performance. And then Bonnie will provide closing comments before we open the call up for your questions. Before we begin, I would like to remind you that today's comments may include forward-looking statements under the federal securities laws. Forward-looking statements are based on current plans, expectations, events, and financial industry trends that may affect the company's future operating results and financial position. Our actual results may differ materially from those contemplated by our forward-looking statements, which involve risks and uncertainties. A discussion of the factors that could cause our actual results to differ materially from these forward-looking statements can be found in our SEC filings, including our reports on Forms 10-K and 10-Q. In particular, we direct you to the discussion of certain risk factors affecting our business contained in our earnings release, our investor presentation, and on our form 10Q. With that, I would now like to turn the call over to Bonnie Lee. Bonnie, please go ahead.

Thank you, Ben. Good afternoon, everyone. Thank you for joining us today to discuss our first quarter 2026 results. HMME delivered strong financial results across key metrics in the first quarter. as we consistently advanced our core initiatives and executed against our growth strategy. In the first quarter, a seasonally slower period for loan production, we delivered solid results, supported by strong CNI originations and ongoing expansion of a new full-service commercial banking relationships. At the same time, we maintained a disciplined underwriting and pricing standard. We also executed effectively on our deposit gathering initiatives, generating strong growth in total deposits while continuing to reduce our overall cost of funds. Combined with the favorable spreads on new loan production relative to payoffs, we generated net interest margin expansion for the seventh consecutive quarter. This strong execution, combined with our disciplined expense management, led to robust growth in net income compared to the year-ago period. Our performance highlights the success of our relationship-based banking model and the execution of our growth strategy. Now, turning to some highlights for the first quarter. Net income for the first quarter was $22.6 million, or 75 cents per diluted share, with a continued growth on both a sequential and year-over-year basis. Net interest income increased from the prior quarter, and net interest margin expanded by 10 basis points to 3.38%, reflecting a lower cost of funds. Return on average assets and return on average equity during the quarter were 1.18% and 10.86% respectively. Deposits grew 7% on an annualized basis, and non-interest-bearing deposits remained healthy at approximately 30% of the total deposits. New loan originations were solid, with the CNI loan production increasing by 64%. However, this was offset by higher than normal payoffs, which led to a slight decline in total loans. We continue to maintain excellent asset quality, driven by focus on high-quality loans, disciplined underwriting standards, and sound credit administration. Non-performing assets decreased by 38%, representing just 0.16% of total assets. Our discipline focus on risk management continues to produce positive outcomes. During the quarter, we successfully collected a sizable payment for non-accrual loans and sold two ORO properties for a net gain. Turning to our corporate career initiatives. The relationships our dedicated bankers have established have driven deposit growth from these customers, resulting in an increase of 10% this quarter. Due to ongoing uncertainty about the impact of tariffs, loan activity remains muted. Our focus on disciplined expense management continues. Loan interest expense decreased by 2% for the quarter, primarily driven by the gain on the sale of other real estate loans, lower salaries and benefits, and advertising and promotions expenses. Importantly, our efficiency ratio further improved by 150 basis points to 53.5% from 55%. Our strong financial performance drove improvement in all capital ratios. While we returned significant capital to shareholders in the form of dividends, and share repurchases totaling $13.4 million this quarter. We remain well positioned to advance our growth strategy and deliver attractive shareholder returns. Clearly, geopolitical conflicts may have economic implications for the global economy. However, at this point, we have not seen any impact on our business nor our clients' businesses. We have had a strong start to 2026, and believe we are well positioned to build on this momentum in the month ahead. The strength and consistency of our operational performance underscored the effectiveness of our relationship-based banking model and reinforced our confidence in the strategy we are executing. I'll now turn the call over to Anthony Kim, our Chief Banking Officer, to discuss our first quarter loan production and deposit details.