Hanmi Financial Just Added To FBR's 'Top Picks List': Here's Why

In a report published Wednesday, FBR Capital Markets analyst Scott Valentin maintained an Outperform rating on

, with a price target of $29, while adding the stock to the Top Picks List, in view of the company's improving profitability and attractive valuation. Hanmi's robust EPS growth in 1Q15 was driven by the successful execution of several new initiatives by the management. Profitability was driven by the transition of low-yielding securities into higher-yielding loans and cost savings from the integration of

. "As management continues to leverage its differentiated business model, while continuing to execute on its operational initiatives, we believe loan growth will accelerate, NIM will increase, and efficiency will improve," analyst Scott Valentin mentioned. The company is expected to post 13 percent year-over-year loan growth in FY15 and there could be upside from its expansion initiatives. In the research note FBR Capital Markets noted, "Hanmi is asset sensitive and should benefit from rising interest rates. As of March 31, the company estimated that a 100-bp increase in interest rates would provide a 4.2% benefit to net interest income (NII)." Hanmi has also shown interest in executing additional acquisitions. "We view the shares as attractively valued given our expectation for double-digit loan growth, structurally improving NIM (transition from securities to loans), asset sensitivity, and tight cost controls," Valentin added.