Major Korean-American banks have posted widespread net profit growth in the third quarter of this year, defying economic uncertainties and the burden of high interest rates. With assets also seeing general increases, the total assets of the six major institutions have now surpassed $37.2 billion.
According to 3rd quarter earnings reports recently submitted to the Securities and Exchange Commission (SEC) by Bank of Hope, Hanmi, PCB, Open, CBB, and US Metro, the combined total assets of these banks reached $37.23341 billion. This represents an increase of $1.359 billion, or 3.8%, compared to $35.87441 billion during the same period last year. This growth is particularly notable given the stagnant real estate market and overall consumer spending slowdown.
While third-party results highlighted differences in individual bank growth strategies, all six lenders recorded increases in net profit. Analysts attribute this improved profitability largely to successful deposit acquisition, increased lending, and enhanced net interest margins across most institutions.
Bank of Hope, the largest Korean-American bank, reported assets of $19.18949 billion, a 3.7% increase year-over-year. Deposits rose 1.8% to $16.11616 billion, while loans grew 3.4% to $15.11784 billion. Net profit reached $35.57 million, marking a 15.3% increase from $30.84 million the previous year.
Hanmi Bank saw its assets grow by 2.4% to $8.04378 billion, and deposits increased by 4.3% to $7.05577 billion. Although loan growth was limited to 0.6% at $6.5687 billion, net profit rose 7.3% to $23.68 million.
PCB Bank continued its upward trajectory, recording a record-high quarterly net profit of $12.2 million in the third quarter. This represents a 16.3% increase from the previous quarter ($10.4 million) and a 6.9% increase compared to the same period last year ($11.3 million). Diluted earnings per share (EPS) also reached 85 cents, outperforming both the previous quarter (73 cents) and the previous year (78 cents).
Profitability indicators for PCB also improved. Net interest income climbed to $28.8 million, up from $27.5 million in the prior quarter and $27 million a year earlier. The net interest margin (NIM) rose to 3.35%, up 2 basis points from 3.33% in the previous quarter and 7 basis points higher than 3.28% in the same period last year.
Deposit growth was especially prominent in terms of external expansion. Total deposits at the end of September reached $3.07659 billion, increasing 5.3% from the previous quarter and 5.6% year-over-year. Total assets also grew by 5.2% compared to the same period last year, reaching $3.53767 billion.
On the other hand, loans held-for-investment stood at $2.84 billion, down 3.0% from $2.93 billion in the previous quarter. PCB explained that this reduction was the result of selectively trimming certain large commercial loans that did not align with its risk-adjusted return targets. However, compared to the same period last year, total loans still showed a 3.4% increase.
Open Bank posted increases of 7.5% in assets, 6.9% in deposits, and 6.4% in loans. Its net profit surged 15.8% to $7.76 million, the highest net income growth rate among the six banks. Meanwhile, CBB Bank experienced slight decreases in assets and deposits of 2.1% and 2.9% respectively, but saw a sharp 18.1% surge in loansโthe highest loan growth rate among Korean-American banks. CBB’s net profit also grew by 11.9% to $5.09 million.
US Metro Bank recorded double-digit growth across the board, with assets up 10.3%, deposits up 10.2%, and loans up 12.4%. Its net profit increased by 6.8% to $3.14 million.
A Korean-American banking sector official stated, “The primary background enabling continued growth following the second quarter appears to be exceptional sales execution and efficient management efforts. We are cautiously looking forward to a bright outlook for the fourth quarter as well.”
