Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Q: So what are you doing?
A: I'm an equities junkie. In some stocks you can find reasonable value. But people have lost confidence in some parts of the market, where they have lost a tremendous amount of money. There's an old saying -- well, it's my old saying: If markets were rational you couldn't make a living.

Q: Well said. Tell us about some reasonable values.
A: There is a community of Korean-American banks in Southern California. The largest and most liquid is Hanmi Financial, which has 11 branches all around Southern California. The stock trades on the Nasdaq for about 17 a share, and there are 8.5 million shares outstanding. It sells for less than 10 times earnings and has a book value of $10.25 per share. Earnings per share were $1.15 in 1998, $1.43 in '99 and $1.84 in 2000. The growth in assets has been quite impressive. Last year, for instance, assets grew by 39.8%, and deposits grew by 42%.


Archie MacAllaster's Picks

Company Symbol June 21 Price
Hanmi Financial HAFC $17.60
Alfa ALFA 22.80


Q: Has there been a surge in the Korean population in the region?
A: I don't know, but there are a lot of Koreans in Southern California, and a couple of those banks also have operations in New York and New Jersey. Interestingly, Hanmi is buying another Korean bank, which will increase total assets to $1.5 billion from $1 billion. So Hanmi will be almost twice as large as the next-largest Korean-American bank.

Q: What are the chances that Hanmi will attract a non-Korean-American suitor?
A: It would make an interesting takeover target, but I don't know that a deal would happen as the bank's directors and employees own about 37% of the stock. Anyway, earnings have been growing by about 30% a year, although this year growth might be a little slower. First-quarter profits came to 47 cents, up from 44 cents.

Q: What happened?
A: The bank wrote down some California utility bonds, which cost earnings three or four cents a share. But earnings for the full year will be more than $2. Hanmi doesn't pay a cash dividend, but it has paid a stock dividend for the past four years. Last year it paid a 12% stock dividend, and the year before, 11%.

Q: Nice. Have you another recommendation?

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.