Hanmi bank CEO to hand over reins
Hanmi Financial Corp. of Los Angeles, the largest Korean American bank, said Thursday that its president and chief executive, Sung Won Sohn, would retire Monday.
Sohn, 63, joined Hanmi at the start of 2005, leaving a high-profile job as Wells Fargo & Co.’s chief economist for the opportunity to run his own bank and earn millions from stock options if its share price rose.
The stock bumped its way up from a split-adjusted $18 when he took over to $22.88 near the end of 2006, but has fallen more than 60% this year. It fell 37 cents to $8.75 on Thursday, before the announcement.
Like other Koreatown banks, Hanmi has been buffeted by competition from mainstream financial institutions and rival ethnic banks. Twice this year Hanmi announced that it would miss earnings expectations, and its chief financial officer and chief credit officer departed amid rising losses on loans.
A specialist in commercial lending, Small Business Administration loans and trade finance, Hanmi earned $58 million in 2005, $65 million in 2007 and $39 million during the first nine months of 2007. Its third-quarter provision for loan losses was $8.5 million, compared with $1.7 million for the third quarter of 2006, largely as the result of six related business acquisition loans that wound up in litigation, it said.
The bank named no immediate successor to Sohn but said it had hired Chung Hoon Youk, a banking executive who served a four-year stint as Hanmi’s chief executive, as chief credit officer. Youk will serve as interim president and CEO while Hanmi’s directors search for a permanent replacement, the bank said.
Hanmi rival Wilshire Bancorp Inc. last week said its chief executive, Soo Bong Min, would resign Dec. 31 and be replaced temporarily by Chief Lending Officer Joanne Kim.
The Korean American media had speculated that Sohn also would depart, and bank consultant Jeffrey Rigsby said Sohn had been rumored to be headed for a post in the government of South Korean President-elect Lee Myung-bak.
Sohn will leave Hanmi’s board but will act as a consultant to the bank for two years.
He said he began thinking about leaving six months ago “for personal and professional reasons,” and had discussed his departure with the board over the last two months.
Sohn said he was in discussions about taking a teaching position in Southern California and planned to join the boards of some nonprofit organizations -- something he had been barred from doing while at Hanmi. Sohn also said he might take a job with a large Korean company or in the new president’s government.
“I have not been asked but I would like to help him if I can,” he said.
During Sohn’s tenure, Hanmi grew from $3.1 billion in assets to $4 billion. It has 24 full-service offices from San Diego to San Francisco, two of them added while he was in charge, and is “well on the way to expanding from a community bank to a regional bank,” Sohn said. “I feel the bank has positive momentum despite some of the credit issues.”
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