DA Davidson raises Hanmi Financial stock price target to $29.50 on loan growth

Investing.com - DA Davidson has raised its price target on Hanmi Financial (NASDAQ:HAFC) to $29.50 from $27.00 while maintaining a Neutral rating on the stock. The $772 million market cap bank, currently trading at a P/E ratio of 12.1x and offering a 4.6% dividend yield, has maintained consistent dividend payments for 13 consecutive years, according to InvestingPro data.

The firm cited strong end-of-period loan increases driven by increased production, with loans growing 14.1% on an annualized basis, or $222 million, compared to 1.5% growth ($50 million) in the previous quarter. The growth was primarily in commercial and industrial, residential real estate, and commercial real estate segments.

Loan production reached $570.8 million, up significantly from $320.6 million in the previous quarter, with newly hired teams driving the increase. End-of-period deposits increased 2.2% on an annualized basis, or $38 million, compared to 6.6% growth ($110 million) in the previous quarter.

Asset quality metrics remained stable, with non-performing assets at $21.4 million (0.33% of loans plus real estate owned), down from $26.0 million (0.41%) in the previous quarter. The bank reported net credit recoveries of $482,000 compared to net charge-offs of $11.4 million in the prior quarter.

DA Davidson raised its 2025 and 2026 earnings estimates from $2.33 and $2.76 to $2.52 and $2.95, respectively, citing a stronger net interest income outlook and lower share count than previously modeled, which supported the new price target of $29.50, representing 10 times 2026 estimated earnings. The stock has demonstrated strong momentum with a 21.2% return over the past year, and InvestingPro analysis indicates the company is currently trading near its Fair Value.

In other recent news, Hanmi Financial Corporation reported impressive third-quarter earnings, surpassing Wall Street expectations. The company posted earnings per share of $0.73, exceeding the projected $0.65, marking a 12.3% surprise. Revenue also outperformed forecasts, reaching $70.96 million compared to the anticipated $67.8 million. Additionally, Keefe, Bruyette & Woods raised its price target for Hanmi Financial from $29.00 to $30.50, maintaining a Market Perform rating. This adjustment follows what the firm described as a "great quarter" for Hanmi Financial, highlighting better-than-expected margin improvement and sustained momentum in loan growth. These developments reflect positively on Hanmi Financial’s current performance.

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