Hanmi Financial Corporation (HAFC) Cash Flow Statement

The bank's net income has grown steadily from $14.5 million in 2024Q2 to $23.5 million in 2026Q2, suggesting strong organic capital generation. However, operating cash flow has been volatile, with negative OCF in 2026Q2 and 2025Q2, likely due to timing of loan originations and securities purchases. This variability implies that while earnings are solid, cash generation is not always aligned, which may affect the pace of capital accumulation.

The bank has consistently purchased more investment securities than it sold, with net purchases ranging from $7.4 million to $63.0 million per quarter. This suggests a strategy to deploy excess liquidity into higher-yielding securities, but the large swing in 2026Q2 may indicate opportunistic buying or duration extension. Investors should monitor whether these purchases are funded by deposit inflows or by liquidating other assets, as this could affect liquidity.

The negative OCF in 2026Q2 and 2025Q2 suggests that loan growth is consuming cash, as originations outpace principal repayments. This is typical for a growing bank, but the magnitude of the swings—from -$19.0 million to $146.9 million—indicates that loan portfolio activity is a major driver of cash flow variability. The bank's ability to fund this growth through core deposits will be critical to maintaining stable funding costs.

The bank has consistently returned capital to shareholders, with dividends growing from $7.5 million in 2024Q4 to $8.5 million in 2026Q2, and buybacks averaging around $3 million per quarter. This payout ratio of approximately 57% of net income suggests a balanced approach between returning capital and retaining earnings for growth. The sustainability of this payout appears solid given the bank's strong earnings and conservative leverage.

The shift in deposit mix is a critical risk, as it raises the cost of funds and reduces the bank's interest rate advantage. While the cash flow statement does not directly show deposit flows, the negative OCF in 2026Q2 may partly reflect higher interest expense on time deposits. This trend warrants close monitoring, as it could erode the bank's profitability if not offset by loan repricing.