Hope Bancorp Reports 2024 Second Quarter Financial Results

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its second quarter and six months ended June 30, 2024. For the three months ended June 30, 2024, net income totaled $25.3 million, or $0.21 per diluted common share. This compares with net income of $25.9 million, or $0.21 per diluted common share, in the first quarter of 2024. Excluding notable items(1), net income for the 2024 second quarter was $26.6 million, or $0.22 per diluted common share.

“During the 2024 second quarter, our net interest margin expanded, our operating expenses decreased, and our return on assets improved, compared with the 2024 first quarter,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “These highlights reflect continued progress towards improving our financial performance following our strategic reorganization in the fourth quarter of last year.

“Quarter-over-quarter, total deposits were essentially stable with growth in noninterest bearing demand deposits and other customer deposits largely offsetting a planned reduction in brokered time deposits. Our cost of total deposits increased by only three basis points this quarter, a sharp deceleration from the quarterly increases over the past two years. Gross loans decreased modestly quarter-over-quarter as elevated payoffs and paydowns offset growing production volumes. Given the improved conditions in the secondary markets, we resumed SBA loan sales during the second quarter. Nonperforming assets of $67.3 million at June 30, 2024, decreased 37% from March 31, 2024, and our overall credit quality remains stable.

“Following the signing of the definitive merger agreement with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank, on April 26, 2024, we have been diligently planning for a smooth integration,” continued Kim. “The addition of Territorial’s stable and low-cost deposit base will enhance our deposit franchise. Territorial’s residential mortgage loans, with their excellent asset quality, will accelerate the diversification of our loan portfolio. Combined, we will be the largest regional bank catering to multi-ethnic customers with full-service branches across the continental United States and Hawai‘i.”

____________________

(1)

Net income, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Operating Results for the 2024 Second Quarter

Net interest income. Net interest income before provision for credit losses for the 2024 second quarter totaled $105.9 million, compared with $115.0 million in the immediately preceding first quarter, a decrease of $9.1 million, or 8%, quarter-over-quarter. Approximately $4.0 million of the quarter-over-quarter decrease was attributable to the net impact of the Company’s payoff of its Bank Term Funding Program (“BTFP”) borrowings that matured in late March 2024 and early April 2024, which the Company paid off with interest earning cash.

Net interest margin expansion. Net interest margin for the 2024 second quarter expanded to 2.62%, up seven basis points from 2.55% in the 2024 first quarter, largely reflecting a favorable earning asset mix shift. The 2024 second quarter yield on average earning assets was 5.76%, unchanged from the first quarter of 2024. The cost of average interest bearing liabilities was 4.55% in the second quarter of 2024, up only two basis points from 4.53% in the preceding first quarter.

Cost of deposits. The quarter-over-quarter rate of change in deposit costs substantially slowed. The average cost of total deposits for the 2024 second quarter was 3.39%, an increase of three basis points from 3.36% in the preceding first quarter. This rate of change compares favorably with the 21 basis point quarter-over-quarter increase in the average cost of total deposits in the 2024 first quarter, and with the quarterly rates of change experienced in 2023 and 2022.

Noninterest income. Noninterest income for the 2024 second quarter increased to $11.1 million, up 34% from $8.3 million in the immediately preceding first quarter, primarily reflecting $2.0 million of net gains on the sale of SBA loans. During the 2024 second quarter, the Company resumed sales of the guaranteed portion of its SBA 7(a) loans. There were no such SBA gains on sale in the immediately preceding first quarter.

Noninterest expense. Noninterest expense for the 2024 second quarter decreased 5% to $81.0 million from $84.8 million in the immediately preceding first quarter, and was down 7% year-over-year from $87.2 million in the 2023 second quarter. The Company continues to manage expenses closely following its restructuring in the fourth quarter of 2024. Excluding notable items(2), noninterest expense for the 2024 second quarter was $79.1 million, down 4% compared with $82.4 million for the 2024 first quarter, and down 9% year-over-year. Noninterest expense for the 2024 second quarter included notable items comprising $1.6 million of merger-related expenses, $576,000 of restructuring-related costs, and a $309,000 reversal of accrual related to the FDIC special assessment, all on a pre-tax basis. For the 2024 first quarter, noninterest expense included notable items comprising $1.0 million of merger-related expenses, an incremental accrual of $1.0 million for the FDIC special assessment, and $402,000 of restructuring-related costs, all on a pre-tax basis.

Salaries and employee benefits expense for the 2024 second quarter was $44.1 million, a 7% quarter-over-quarter decrease from $47.6 million in the 2024 first quarter, which included seasonally higher items such as payroll tax accruals. Year-over-year, salaries and employee benefits expense decreased 16% from $52.3 million in the 2023 second quarter, reflecting the results of the restructuring.

Tax rate. The year-to-date effective tax rate for the first half of 2024 was 27.4%, compared with the year-to-date effective tax rate of 26.0% for the first half of 2023. For the full year 2024, the Company expects the effective tax rate to be approximately 26%.

____________________

(2)

Noninterest expense, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Balance Sheet Summary

Cash and investment securities. At June 30, 2024, cash and cash equivalents totaled $654.0 million, compared with $1.19 billion at March 31, 2024, and $2.30 billion at June 30, 2023. The linked-quarter and year-over-year changes in cash and cash equivalents primarily reflected the payoff of the Company’s BTFP borrowings in March and April of 2024. Investment securities totaled $2.17 billion at June 30, 2024, $2.28 billion at March 31, 2024, and $2.19 billion at June 30, 2023.

Loans. Gross loans of $13.64 billion at June 30, 2024, decreased $86.6 million, or less than 1%, from $13.72 billion at March 31, 2024. During the 2024 second quarter, the Company sold $29.8 million of the guaranteed portion of its SBA 7(a) loans held for sale. Quarter-over-quarter, commercial and industrial loans decreased, reflecting elevated payoffs and paydowns. This was partially offset by continued strong growth in residential mortgage loans and essentially stable commercial real estate loan balances.

The following table sets forth the loan portfolio composition at June 30, 2024, March 31, 2024, and June 30, 2023:

(dollars in thousands) (unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial real estate (“CRE”) loans

$

8,679,515

 

63.6

%

 

$

8,707,673

 

63.5

%

 

$

9,192,160

 

61.7

%

Commercial and industrial (“C&I”) loans

 

3,854,284

 

 

28.3

%

 

 

4,041,063

 

 

29.4

%

 

 

4,805,126

 

 

32.2

%

Residential mortgage and other loans

 

1,033,203

 

 

7.6

%

 

 

970,442

 

 

7.1

%

 

 

867,524

 

 

5.8

%

Loans receivable

 

13,567,002

 

 

99.5

%

 

 

13,719,178

 

 

100.0

%

 

 

14,864,810

 

 

99.7

%

Loans held for sale

 

68,316

 

 

0.5

%

 

 

2,763

 

 

%

 

 

49,246

 

 

0.3

%

Gross loans

$

13,635,318

 

 

100.0

%

 

$

13,721,941

 

 

100.0

%

 

$

14,914,056

 

 

100.0

%

Deposits. Total deposits were essentially stable quarter-over-quarter, totaling $14.71 billion at June 30, 2024, compared with $14.75 billion at March 31, 2024, reflecting growth in customer deposits that largely offset planned reductions of brokered time deposits. Noninterest bearing demand deposits grew 1% quarter-over-quarter to $3.67 billion at June 30, 2024. During the second quarter of 2024, the Company reduced brokered time deposits by $92.1 million, or 8% from March 31, 2024.

The following table sets forth the deposit composition at June 30, 2024, March 31, 2024, and June 30, 2023:

(dollars in thousands) (unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

3,671,192

 

24.9

%

 

$

3,652,592

 

24.7

%

 

$

4,229,247

 

27.1

%

Money market, interest bearing demand, and savings deposits

 

4,907,860

 

 

33.4

%

 

 

5,313,064

 

 

36.0

%

 

 

4,413,079

 

 

28.2

%

Time deposits

 

6,132,419

 

 

41.7

%

 

 

5,787,761

 

 

39.3

%

 

 

6,977,026

 

 

44.7

%

Total deposits

$

14,711,471

 

 

100.0

%

 

$

14,753,417

 

 

100.0

%

 

$

15,619,352

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross loan-to-deposit ratio

 

 

92.7

%

 

 

 

93.0

%

 

 

 

95.5

%

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $170.0 million at June 30, 2024, $795.6 million at March 31, 2024, and $2.26 billion at June 30, 2023. The linked-quarter and year-over-year changes primarily reflected the payoff of the Company’s BTFP borrowings in March and April 2024. During the second quarter, the Company paid off the remaining $695.6 million of its BTFP borrowings when it matured on April 5, 2024.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets decreased 37% to $67.3 million, or 0.39% of total assets, at June 30, 2024, from $106.8 million, or 0.59% of total assets, at March 31, 2024, and were down 13% from $77.4 million, or 0.38% of total assets, at June 30, 2023. The linked-quarter and year-over-year reductions in nonperforming assets reflected improvement in accruing delinquent loans past due 90 days or more.

The following table sets forth the components of nonperforming assets at June 30, 2024, March 31, 2024, and June 30, 2023:

(dollars in thousands) (unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

Loans on nonaccrual status (1)

$

67,003

 

 

$

59,526

 

 

$

61,252

 

Accruing delinquent loans past due 90 days or more

 

273

 

 

 

47,290

 

 

 

15,182

 

Total nonperforming loans

 

67,276

 

 

 

106,816

 

 

 

76,434

 

Other real estate owned

 

 

 

 

 

 

 

938

 

Total nonperforming assets

$

67,276

 

 

$

106,816

 

 

$

77,372

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.39

%

 

 

0.59

%

 

 

0.38

%

 

(1)

 

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.2 million, $10.9 million and $11.9 million at June 30, 2024, March 31, 2024, and June 30, 2023, respectively.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $4.4 million in the 2024 second quarter, equivalent to 0.13%, annualized, of average loans. This compares with net charge offs of $3.5 million, or 0.10%, annualized, of average loans in the immediately preceding first quarter.

The following table sets forth net charge offs and annualized net charge off ratios for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

Net charge offs (recoveries)

$

4,439

 

 

$

3,536

 

 

$

(552

)

Annualized net charge offs (recoveries)/average loans

 

0.13

%

 

 

0.10

%

 

 

(0.01

)%

For the 2024 second quarter, the Company recorded a provision for credit losses of $1.4 million. This compares with a provision for credit losses of $2.6 million in the immediately preceding first quarter.

Allowance for credit losses. The allowance for credit losses totaled $156.0 million at June 30, 2024, compared with $158.8 million at March 31, 2024. The allowance coverage ratio was 1.15% of loans receivable at June 30, 2024, compared with 1.16% at March 31, 2024.

The following table sets forth the allowance for credit losses and the coverage ratios at June 30, 2024, March 31, 2024, and June 30, 2023:

(dollars in thousands) (unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

Allowance for credit losses

$

156,019

 

 

$

158,758

 

 

$

172,996

 

Allowance for credit losses/loans receivable

 

1.15

%

 

 

1.16

%

 

 

1.16

%

Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At June 30, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at June 30, 2024, March 31, 2024, and June 30, 2023:

(unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

 

Minimum Guideline

for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

12.70%

 

12.47%

 

11.05%

 

6.50%

Tier 1 Capital Ratio

13.40%

 

13.17%

 

11.68%

 

8.00%

Total Capital Ratio

14.42%

 

14.19%

 

12.64%

 

10.00%

Leverage Ratio

11.61%

 

10.42%

 

9.57%

 

5.00%

At June 30, 2024, total stockholders’ equity was $2.11 billion, or $17.49 per common share, essentially stable quarter-over-quarter. Tangible common equity (“TCE”) per share(3) was $13.61 at June 30, 2024, compared with $13.63 at March 31, 2024, and the TCE ratio(3) was 9.72% at June 30, 2024, up 39 basis points quarter-over-quarter.

The following table sets forth the TCE per share and the TCE ratio at June 30, 2024, March 31, 2024, and June 30, 2023:

(unaudited)

6/30/2024

 

3/31/2024

 

6/30/2023

TCE per share

$13.61

 

$13.63

 

$13.32

TCE ratio

9.72%

 

9.33%

 

8.04%

____________________

(3]

TCE ratio per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, July 29, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its second quarter ended June 30, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through August 5, 2024, replay access code 2112004.

Non-GAAP Financial Metrics

This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items and noninterest expense / average assets excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.38 billion in total assets as of June 30, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 48 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Additional Information About the Merger and Where to Find It

In connection with the proposed merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 on June 21, 2024, which included a preliminary Proxy Statement of Territorial Bancorp Inc., that also constitutes a preliminary prospectus of Hope Bancorp, Inc. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.

Participants in Solicitation

Hope Bancorp, Inc., Territorial Bancorp and certain of their directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Hope Bancorp’s directors and executive officers is set forth in the Proxy Statement, dated April 12, 2024 (as amended and supplemented), for its 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Territorial Bancorp’s participants is set forth in the Proxy Statement, dated April 16, 2024, for Territorial Bancorp’s 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of those participants in the solicitation of proxies in respect of the merger may be obtained by reading the Registration Statement and Proxy Statement/Prospectus filed with the SEC.

Forward-Looking Statements

Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding Territorial Bancorp’s low-cost core deposit base, strengthening of profitability, ease of integration and diversification of franchise. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the proposed transaction is subject to regulatory approvals, the approval of Territorial Bancorp shareholders, and other customary closing conditions. There is no assurance that such conditions will be met or that the proposed merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in Hope Bancorp’s areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of Hope Bancorp; and diversion of management’s attention from ongoing business operations and opportunities. For additional information concerning these and other risk factors, see Hope Bancorp’s most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share data)

 

Assets:

6/30/2024

 

3/31/2024

 

% change

 

6/30/2023

 

% change

Cash and due from banks

$

654,044

 

 

$

1,185,296

 

 

(44.8

)%

 

$

2,302,339

 

 

(71.6

)%

Investment securities

 

2,172,859

 

 

 

2,277,990

 

 

(4.6

)%

 

 

2,186,346

 

 

(0.6

)%

Federal Home Loan Bank (“FHLB”) stock and other investments

 

61,528

 

 

 

61,175

 

 

0.6

%

 

 

60,213

 

 

2.2

%

Gross loans, including loans held for sale

 

13,635,318

 

 

 

13,721,941

 

 

(0.6

)%

 

 

14,914,056

 

 

(8.6

)%

Allowance for credit losses

 

(156,019

)

 

 

(158,758

)

 

(1.7

)%

 

 

(172,996

)

 

(9.8

)%

Accrued interest receivable

 

57,645

 

 

 

60,316

 

 

(4.4

)%

 

 

60,118

 

 

(4.1

)%

Premises and equipment, net

 

50,919

 

 

 

50,541

 

 

0.7

%

 

 

50,513

 

 

0.8

%

Goodwill and intangible assets

 

467,583

 

 

 

467,984

 

 

(0.1

)%

 

 

469,280

 

 

(0.4

)%

Other assets

 

431,214

 

 

 

421,729

 

 

2.2

%

 

 

496,269

 

 

(13.1

)%

Total assets

$

17,375,091

 

 

$

18,088,214

 

 

(3.9

)%

 

$

20,366,138

 

 

(14.7

)%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

14,711,471

 

 

$

14,753,417

 

 

(0.3

)%

 

$

15,619,352

 

 

(5.8

)%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

170,000

 

 

 

795,634

 

 

(78.6

)%

 

 

2,260,000

 

 

(92.5

)%

Subordinated debentures and convertible notes, net

 

108,918

 

 

 

108,592

 

 

0.3

%

 

 

107,632

 

 

1.2

%

Accrued interest payable

 

86,779

 

 

 

122,467

 

 

(29.1

)%

 

 

109,236

 

 

(20.6

)%

Other liabilities

 

186,641

 

 

 

195,834

 

 

(4.7

)%

 

 

201,920

 

 

(7.6

)%

Total liabilities

$

15,263,809

 

 

$

15,975,944

 

 

(4.5

)%

 

$

18,298,140

 

 

(16.6

)%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

138

 

 

$

138

 

 

%

 

$

137

 

 

0.7

%

Additional paid-in capital

 

1,440,963

 

 

 

1,439,484

 

 

0.1

%

 

 

1,433,788

 

 

0.5

%

Retained earnings

 

1,167,978

 

 

 

1,159,593

 

 

0.7

%

 

 

1,127,624

 

 

3.6

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(233,130

)

 

 

(222,278

)

 

(4.9

)%

 

 

(228,884

)

 

(1.9

)%

Total stockholders’ equity

 

2,111,282

 

 

 

2,112,270

 

 

%

 

 

2,067,998

 

 

2.1

%

Total liabilities and stockholders’ equity

$

17,375,091

 

 

$

18,088,214

 

 

(3.9

)%

 

$

20,366,138

 

 

(14.7

)%

 

 

 

 

 

 

 

 

 

 

Common stock shares – authorized

 

300,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares – outstanding

 

120,731,342

 

 

 

120,610,029

 

 

 

 

 

120,014,888

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

17,382,835

 

 

 

 

 

17,382,835

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

Three Months Ended

 

Six Months Ended

 

6/30/2024

 

3/31/2024

 

% change

 

6/30/2023

 

% change

 

6/30/2024

 

6/30/2023

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

209,683

 

$

213,626

 

(2

)%

 

$

225,671

 

(7

)%

 

$

423,309

 

$

441,606

 

(4

)%

Interest on investment securities

 

16,829

 

 

 

18,049

 

 

(7

)%

 

 

15,534

 

 

8

%

 

 

34,878

 

 

 

30,659

 

 

14

%

Interest on cash and deposits at other banks

 

5,284

 

 

 

27,183

 

 

(81

)%

 

 

25,295

 

 

(79

)%

 

 

32,467

 

 

 

30,217

 

 

7

%

Interest on other investments and FHLB dividends

 

805

 

 

 

816

 

 

(1

)%

 

 

684

 

 

18

%

 

 

1,621

 

 

 

1,379

 

 

18

%

Total interest income

 

232,601

 

 

 

259,674

 

 

(10

)%

 

 

267,184

 

 

(13

)%

 

 

492,275

 

 

 

503,861

 

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

122,577

 

 

 

124,033

 

 

(1

)%

 

 

109,724

 

 

12

%

 

 

246,610

 

 

 

202,072

 

 

22

%

Interest on borrowings

 

4,164

 

 

 

20,594

 

 

(80

)%

 

 

26,771

 

 

(84

)%

 

 

24,758

 

 

 

37,222

 

 

(33

)%

Total interest expense

 

126,741

 

 

 

144,627

 

 

(12

)%

 

 

136,495

 

 

(7

)%

 

 

271,368

 

 

 

239,294

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision

 

105,860

 

 

 

115,047

 

 

(8

)%

 

 

130,689

 

 

(19

)%

 

 

220,907

 

 

 

264,567

 

 

(17

)%

Provision for credit losses

 

1,400

 

 

 

2,600

 

 

(46

)%

 

 

9,010

 

 

(84

)%

 

 

4,000

 

 

 

12,330

 

 

(68

)%

Net interest income after provision

 

104,460

 

 

 

112,447

 

 

(7

)%

 

 

121,679

 

 

(14

)%

 

 

216,907

 

 

 

252,237

 

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,681

 

 

 

2,587

 

 

4

%

 

 

2,325

 

 

15

%

 

 

5,268

 

 

 

4,546

 

 

16

%

Net gains on sales of SBA loans

 

1,980

 

 

 

 

 

100

%

 

 

1,872

 

 

6

%

 

 

1,980

 

 

 

4,097

 

 

(52

)%

Net gains on sales of securities available for sale

 

425

 

 

 

 

 

100

%

 

 

 

 

100

%

 

 

425

 

 

 

 

 

100

%

Other income and fees

 

5,985

 

 

 

5,699

 

 

5

%

 

 

12,817

 

 

(53

)%

 

 

11,684

 

 

 

19,349

 

 

(40

)%

Total noninterest income

 

11,071

 

 

 

8,286

 

 

34

%

 

 

17,014

 

 

(35

)%

 

 

19,357

 

 

 

27,992

 

 

(31

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

44,107

 

 

 

47,577

 

 

(7

)%

 

 

52,305

 

 

(16

)%

 

 

91,684

 

 

 

109,474

 

 

(16

)%

Occupancy

 

6,906

 

 

 

6,786

 

 

2

%

 

 

6,967

 

 

(1

)%

 

 

13,692

 

 

 

14,488

 

 

(5

)%

Furniture and equipment

 

5,475

 

 

 

5,340

 

 

3

%

 

 

5,393

 

 

2

%

 

 

10,815

 

 

 

10,451

 

 

3

%

Data processing and communications

 

2,997

 

 

 

2,990

 

 

%

 

 

2,917

 

 

3

%

 

 

5,987

 

 

 

5,739

 

 

4

%

FDIC assessment

 

3,003

 

 

 

2,926

 

 

3

%

 

 

4,691

 

 

(36

)%

 

 

5,929

 

 

 

6,472

 

 

(8

)%

FDIC special assessment

 

(309

)

 

 

1,000

 

 

N/A

 

 

 

 

 

100

%

 

 

691

 

 

 

 

 

100

%

Earned interest credit

 

6,139

 

 

 

5,834

 

 

5

%

 

 

5,090

 

 

21

%

 

 

11,973

 

 

 

9,517

 

 

26

%

Restructuring-related costs

 

576

 

 

 

402

 

 

43

%

 

 

 

 

100

%

 

 

978

 

 

 

 

 

100

%

Merger-related costs

 

1,589

 

 

 

1,044

 

 

52

%

 

 

 

 

100

%

 

 

2,633

 

 

 

 

 

100

%

Other noninterest expense

 

10,504

 

 

 

10,940

 

 

(4

)%

 

 

9,860

 

 

7

%

 

 

21,444

 

 

 

19,816

 

 

8

%

Total noninterest expense

 

80,987

 

 

 

84,839

 

 

(5

)%

 

 

87,223

 

 

(7

)%

 

 

165,826

 

 

 

175,957

 

 

(6

)%

Income before income taxes

 

34,544

 

 

 

35,894

 

 

(4

)%

 

 

51,470

 

 

(33

)%

 

 

70,438

 

 

 

104,272

 

 

(32

)%

Income tax provision

 

9,274

 

 

 

10,030

 

 

(8

)%

 

 

13,448

 

 

(31

)%

 

 

19,304

 

 

 

27,129

 

 

(29

)%

Net income

$

25,270

 

 

$

25,864

 

 

(2

)%

 

$

38,022

 

 

(34

)%

 

$

51,134

 

 

$

77,143

 

 

(34

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share – diluted

$

0.21

 

 

$

0.21

 

 

 

 

$

0.32

 

 

 

 

$

0.42

 

 

$

0.64

 

 

 

Weighted average shares outstanding – diluted

 

120,939,429

 

 

 

121,020,292

 

 

 

 

 

120,129,359

 

 

 

 

 

120,964,149

 

 

 

120,179,443

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

 

For the Three Months Ended

 

For the Six Months Ended

Profitability measures (annualized):

6/30/2024

 

3/31/2024

 

6/30/2023

 

6/30/2024

 

6/30/2023

Return on average assets (“ROA”)

0.59

%

 

0.54

%

 

0.74

%

 

0.56

%

 

0.78

%

ROA excluding notable items (1)

0.62

%

 

0.58

%

 

0.74

%

 

0.60

%

 

0.78

%

Return on average equity (“ROE”)

4.82

%

 

4.87

%

 

7.34

%

 

4.84

%

 

7.49

%

ROE excluding notable items (1)

5.07

%

 

5.19

%

 

7.34

%

 

5.13

%

 

7.49

%

Return on average tangible common equity (“ROTCE”) (1)

6.20

%

 

6.24

%

 

9.49

%

 

6.22

%

 

9.70

%

ROTCE excluding notable items (1)

6.53

%

 

6.66

%

 

9.49

%

 

6.59

%

 

9.70

%

Net interest margin

2.62

%

 

2.55

%

 

2.70

%

 

2.58

%

 

2.85

%

Efficiency ratio (not annualized)

69.26

%

 

68.79

%

 

59.05

%

 

69.02

%

 

60.14

%

Efficiency ratio excluding notable items (not annualized) (1)

67.67

%

 

66.81

%

 

59.05

%

 

67.23

%

 

60.14

%

 

 

 

 

 

 

 

 

 

 

(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

6/30/2024

 

3/31/2024

 

6/30/2023

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

13,591,936

 

$

209,683

 

6.20

%

 

$

13,746,219

 

$

213,626

 

6.25

%

 

$

15,105,212

 

$

225,671

 

5.99

%

Investment securities

 

2,175,379

 

 

 

16,829

 

 

3.11

%

 

 

2,317,154

 

 

 

18,049

 

 

3.13

%

 

 

2,243,614

 

 

 

15,534

 

 

2.78

%

Interest earning cash and deposits at

other banks

 

428,062

 

 

 

5,284

 

 

4.96

%

 

 

2,019,769

 

 

 

27,183

 

 

5.41

%

 

 

1,996,924

 

 

 

25,295

 

 

5.08

%

FHLB stock and other investments

 

48,463

 

 

 

805

 

 

6.68

%

 

 

48,136

 

 

 

816

 

 

6.82

%

 

 

47,044

 

 

 

684

 

 

5.83

%

Total interest earning assets

$

16,243,840

 

 

$

232,601

 

 

5.76

%

 

$

18,131,278

 

 

$

259,674

 

 

5.76

%

 

$

19,392,794

 

 

$

267,184

 

 

5.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and savings

$

4,948,708

 

 

$

48,708

 

 

3.96

%

 

$

5,072,782

 

 

$

50,145

 

 

3.98

%

 

$

4,495,879

 

 

$

35,051

 

 

3.13

%

Time deposits

 

5,921,201

 

 

 

73,869

 

 

5.02

%

 

 

5,985,501

 

 

 

73,888

 

 

4.96

%

 

 

6,890,035

 

 

 

74,673

 

 

4.35

%

Total interest bearing deposits

 

10,869,909

 

 

 

122,577

 

 

4.54

%

 

 

11,058,283

 

 

 

124,033

 

 

4.51

%

 

 

11,385,914

 

 

 

109,724

 

 

3.87

%

FHLB and FRB borrowings

 

219,402

 

 

 

1,430

 

 

2.62

%

 

 

1,683,334

 

 

 

17,853

 

 

4.27

%

 

 

2,177,264

 

 

 

23,622

 

 

4.35

%

Subordinated debentures and convertible

notes

 

104,822

 

 

 

2,734

 

 

10.32

%

 

 

104,493

 

 

 

2,741

 

 

10.38

%

 

 

199,744

 

 

 

3,149

 

 

6.24

%

Total interest bearing liabilities

$

11,194,133

 

 

$

126,741

 

 

4.55

%

 

$

12,846,110

 

 

$

144,627

 

 

4.53

%

 

$

13,762,922

 

 

$

136,495

 

 

3.98

%

Noninterest bearing demand deposits

 

3,666,416

 

 

 

 

 

 

 

3,803,870

 

 

 

 

 

 

 

4,366,868

 

 

 

 

 

Total funding liabilities/cost of funds

$

14,860,549

 

 

 

 

3.43

%

 

$

16,649,980

 

 

 

 

3.49

%

 

$

18,129,790

 

 

 

 

3.02

%

Net interest income/net interest spread

 

 

$

105,860

 

 

1.21

%

 

 

 

$

115,047

 

 

1.23

%

 

 

 

$

130,689

 

 

1.55

%

Net interest margin

 

 

 

 

2.62

%

 

 

 

 

 

2.55

%

 

 

 

 

 

2.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,666,416

 

 

$

 

 

%

 

$

3,803,870

 

 

$

 

 

%

 

$

4,366,868

 

 

$

 

 

%

Interest bearing deposits

 

10,869,909

 

 

 

122,577

 

 

4.54

%

 

 

11,058,283

 

 

 

124,033

 

 

4.51

%

 

 

11,385,914

 

 

 

109,724

 

 

3.87

%

Total deposits

$

14,536,325

 

 

$

122,577

 

 

3.39

%

 

$

14,862,153

 

 

$

124,033

 

 

3.36

%

 

$

15,752,782

 

 

$

109,724

 

 

2.79

%

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

6/30/2024

 

6/30/2023

 

 

       

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

 

 

 

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

 

 

 

 

 

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

 

 

 

 

 

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

13,669,078

 

$

423,309

 

6.23

%

 

$

15,169,939

 

$

441,606

 

5.87

%

 

 

 

 

 

 

Investment securities

 

2,246,266

 

 

 

34,878

 

 

3.12

%

 

 

2,246,033

 

 

 

30,659

 

 

2.75

%

 

 

 

 

 

 

Interest earning cash and deposits at

other banks

 

1,223,916

 

 

 

32,467

 

 

5.33

%

 

 

1,239,343

 

 

 

30,217

 

 

4.92

%

 

 

 

 

 

 

FHLB stock and other investments

 

48,299

 

 

 

1,621

 

 

6.75

%

 

 

47,044

 

 

 

1,379

 

 

5.91

%

 

 

 

 

 

 

Total interest earning assets

$

17,187,559

 

 

$

492,275

 

 

5.76

%

 

$

18,702,359

 

 

$

503,861

 

 

5.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and savings

$

5,010,745

 

 

$

98,852

 

 

3.97

%

 

$

5,043,522

 

 

$

77,276

 

 

3.09

%

 

 

 

 

 

 

Time deposits

 

5,953,351

 

 

 

147,758

 

 

4.99

%

 

 

6,220,422

 

 

 

124,796

 

 

4.05

%

 

 

 

 

 

 

Total interest bearing deposits

 

10,964,096

 

 

 

246,610

 

 

4.52

%

 

 

11,263,944

 

 

 

202,072

 

 

3.62

%

 

 

 

 

 

 

FHLB and FRB borrowings

 

951,368

 

 

 

19,283

 

 

4.08

%

 

 

1,431,000

 

 

 

30,320

 

 

4.27

%

 

 

 

 

 

 

Subordinated debentures and convertible

notes

 

104,657

 

 

 

5,475

 

 

10.35

%

 

 

259,493

 

 

 

6,902

 

 

5.29

%

 

 

 

 

 

 

Total interest bearing liabilities

$

12,020,121

 

 

$

271,368

 

 

4.54

%

 

$

12,954,437

 

 

$

239,294

 

 

3.73

%

 

 

 

 

 

 

Noninterest bearing demand deposits

 

3,735,143

 

 

 

 

 

 

 

4,513,659

 

 

 

 

 

 

 

 

 

 

 

Total funding liabilities/cost of funds

$

15,755,264

 

 

 

 

3.46

%

 

$

17,468,096

 

 

 

 

2.76

%

 

 

 

 

 

 

Net interest income/net interest spread

 

 

$

220,907

 

 

1.22

%

 

 

 

$

264,567

 

 

1.70

%

 

 

 

 

 

 

Net interest margin

 

 

 

 

2.58

%

 

 

 

 

 

2.85

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,735,143

 

 

$

 

 

%

 

$

4,513,659

 

 

$

 

 

%

 

 

 

 

 

 

Interest bearing deposits

 

10,964,096

 

 

 

246,610

 

 

4.52

%

 

 

11,263,944

 

 

 

202,072

 

 

3.62

%

 

 

 

 

 

 

Total deposits

$

14,699,239

 

 

$

246,610

 

 

3.37

%

 

$

15,777,603

 

 

$

202,072

 

 

2.58

%

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

Six Months Ended

AVERAGE BALANCES:

6/30/2024

 

3/31/2024

 

% change

 

6/30/2023

 

% change

 

6/30/2024

 

6/30/2023

 

% change

Gross loans, including loans held for sale

$

13,591,936

 

$

13,746,219

 

(1

)%

 

$

15,105,212

 

(10

)%

 

$

13,669,078

 

$

15,169,939

 

(10

)%

Investment securities

 

2,175,379

 

 

 

2,317,154

 

 

(6

)%

 

 

2,243,614

 

 

(3

)%

 

 

2,246,266

 

 

 

2,246,033

 

 

%

Interest earning cash and deposits at other banks

 

428,062

 

 

 

2,019,769

 

 

(79

)%

 

 

1,996,924

 

 

(79

)%

 

 

1,223,916

 

 

 

1,239,343

 

 

(1

)%

Interest earning assets

 

16,243,840

 

 

 

18,131,278

 

 

(10

)%

 

 

19,392,794

 

 

(16

)%

 

 

17,187,559

 

 

 

18,702,359

 

 

(8

)%

Goodwill and intangible assets

 

467,822

 

 

 

468,229

 

 

%

 

 

469,515

 

 

%

 

 

468,026

 

 

 

469,752

 

 

%

Total assets

 

17,256,638

 

 

 

19,140,775

 

 

(10

)%

 

 

20,468,810

 

 

(16

)%

 

 

18,198,707

 

 

 

19,781,806

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

3,666,416

 

 

 

3,803,870

 

 

(4

)%

 

 

4,366,868

 

 

(16

)%

 

 

3,735,143

 

 

 

4,513,659

 

 

(17

)%

Interest bearing deposits

 

10,869,909

 

 

 

11,058,283

 

 

(2

)%

 

 

11,385,914

 

 

(5

)%

 

 

10,964,096

 

 

 

11,263,944

 

 

(3

)%

Total deposits

 

14,536,325

 

 

 

14,862,153

 

 

(2

)%

 

 

15,752,782

 

 

(8

)%

 

 

14,699,239

 

 

 

15,777,603

 

 

%

Interest bearing liabilities

 

11,194,133

 

 

 

12,846,110

 

 

(13

)%

 

 

13,762,922

 

 

(19

)%

 

 

12,020,121

 

 

 

12,954,437

 

 

(7

)%

Stockholders’ equity

 

2,097,108

 

 

 

2,126,333

 

 

(1

)%

 

 

2,072,859

 

 

1

%

 

 

2,111,720

 

 

 

2,059,583

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

6/30/2024

 

3/31/2024

 

% change

 

6/30/2023

 

% change

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate (“CRE”) loans

$

8,679,515

 

 

$

8,707,673

 

 

%

 

$

9,192,160

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (“C&I”) loans

 

3,854,284

 

 

 

4,041,063

 

 

(5

)%

 

 

4,805,126

 

 

(20

)%

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage and other loans

 

1,033,203

 

 

 

970,442

 

 

6

%

 

 

867,524

 

 

19

%

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

13,567,002

 

 

 

13,719,178

 

 

(1

)%

 

 

14,864,810

 

 

(9

)%

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

61,528

 

 

 

2,763

 

 

NM

 

 

 

49,246

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

Gross loans

 

13,628,530

 

 

 

13,721,941

 

 

(1

)%

 

 

14,914,056

 

 

(9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

6/30/2024

 

3/31/2024

 

% change

 

6/30/2023

 

% change

 

 

 

 

 

 

 

 

 

 

 

Multi-tenant retail

$

1,659,083

 

 

$

1,666,153

 

 

%

 

$

1,778,068

 

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

Industrial warehouses

 

1,249,255

 

 

 

1,221,852

 

 

2

%

 

 

1,301,075

 

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

1,199,215

 

 

 

1,212,941

 

 

(1

)%

 

 

1,257,971

 

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

Gas stations and car washes

 

1,007,680

 

 

 

1,013,708

 

 

(1

)%

 

 

1,042,290

 

 

(3

)%

 

 

 

 

 

 

 

 

 

 

 

Mixed-use facilities

 

844,993

 

 

 

861,613

 

 

(2

)%

 

 

834,948

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

Hotels/motels

 

795,253

 

 

 

786,198

 

 

1

%

 

 

868,286

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

Single-tenant retail

 

655,540

 

 

 

667,898

 

 

(2

)%

 

 

690,418

 

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

Office

 

403,861

 

 

 

401,392

 

 

1

%

 

 

463,998

 

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

All other

 

864,635

 

 

 

875,918

 

 

(1

)%

 

 

955,106

 

 

(9

)%

 

 

 

 

 

 

 

 

 

 

 

Total CRE loans

$

8,679,515

 

 

$

8,707,673

 

 

%

 

$

9,192,160

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

6/30/2024

 

3/31/2024

 

% change

 

 

6/30/2023

 

% change

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,671,192

 

 

$

3,652,592

 

 

1

%

 

$

4,229,247

 

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand, and savings

 

4,907,860

 

 

 

5,313,064

 

 

(8

)%

 

 

4,413,079

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

6,132,419

 

 

 

5,787,761

 

 

6

%

 

 

6,977,026

 

 

(12

)%

 

 

 

 

 

 

 

 

 

 

 

Total deposits

$

14,711,471

 

 

$

14,753,417

 

 

%

 

$

15,619,352

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

     
CAPITAL & CAPITAL RATIOS:

6/30/2024

 

3/31/2024

 

6/30/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,111,282

 

 

$

2,112,270

 

 

$

2,067,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital

$

2,137,513

 

 

$

2,130,033

 

 

$

2,102,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

12.70

%

 

 

12.47

%

 

 

11.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

13.40

%

 

 

13.17

%

 

 

11.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital ratio

 

14.42

%

 

 

14.19

%

 

 

12.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

11.61

%

 

 

10.42

%

 

 

9.57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk weighted assets

$

14,828,070

 

 

$

15,011,661

 

 

$

16,640,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

$

17.49

 

 

$

17.51

 

 

$

17.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity (“TCE”) per share (1)

$

13.61

 

 

$

13.63

 

 

$

13.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio (1)

 

9.72

%

 

 

9.33

%

 

 

8.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

Three Months Ended

 

Six Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

6/30/2024

 

6/30/2023

Balance at beginning of period

$

158,758

 

 

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

$

158,694

 

 

$

162,359

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(407

)

Provision for credit losses on loans

 

1,700

 

 

 

3,600

 

 

 

1,700

 

 

 

16,800

 

 

 

8,900

 

 

 

5,300

 

 

 

10,600

 

Recoveries

 

2,099

 

 

 

1,184

 

 

 

306

 

 

 

2,938

 

 

 

1,531

 

 

 

3,283

 

 

 

1,918

 

Charge offs

 

(6,538

)

 

 

(4,720

)

 

 

(2,121

)

 

 

(33,925

)

 

 

(979

)

 

 

(11,258

)

 

 

(1,474

)

Balance at end of period

$

156,019

 

 

$

158,758

 

 

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

156,019

 

 

$

172,996

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

 

 

 

 

 

 

 

Allowance for unfunded loan commitments

$

2,543

 

 

$

2,843

 

 

$

3,843

 

 

$

3,143

 

 

$

3,081

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

Three Months Ended

 

Six Months Ended

   

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

6/30/2024

 

6/30/2023

Provision for credit losses on loans

$

1,700

 

 

$

3,600

 

 

$

1,700

 

 

$

16,800

 

 

$

8,900

 

 

$

5,300

 

 

$

10,600

 

(Credit) provision for unfunded loan commitments

 

(300

)

 

 

(1,000

)

 

 

700

 

 

 

62

 

 

 

110

 

 

 

(1,300

)

 

 

1,730

 

Provision for credit losses

$

1,400

 

 

$

2,600

 

 

$

2,400

 

 

$

16,862

 

 

$

9,010

 

 

$

4,000

 

 

$

12,330

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

Three Months Ended

 

Six Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

6/30/2024

 

6/30/2023

CRE loans

$

514

 

 

$

(497

)

 

$

1,560

 

 

$

(2,227

)

 

$

438

 

 

$

17

 

 

$

329

 

C&I loans

 

3,900

 

 

 

4,072

 

 

 

138

 

 

 

33,145

 

 

 

(1,091

)

 

 

7,972

 

 

 

(895

)

Residential mortgage and other loans

 

25

 

 

 

(39

)

 

 

117

 

 

 

69

 

 

 

101

 

 

 

(14

)

 

 

122

 

Net loan charge offs (recoveries)

$

4,439

 

 

$

3,536

 

 

$

1,815

 

 

$

30,987

 

 

$

(552

)

 

$

7,975

 

 

$

(444

)

Net charge offs (recoveries)/average loans (annualized)

 

0.13

%

 

 

0.10

%

 

 

0.05

%

 

 

0.85

%

 

 

(0.01

)%

 

 

0.12

%

 

 

(0.01

)%

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

             
NONPERFORMING ASSETS:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

Loans on nonaccrual status (1)

$

67,003

 

$

59,526

 

$

45,204

 

$

39,081

 

$

61,252

Accruing delinquent loans past due 90 days or more

 

273

 

 

 

47,290

 

 

 

261

 

 

 

21,579

 

 

 

15,182

 

Total nonperforming loans

 

67,276

 

 

 

106,816

 

 

 

45,465

 

 

 

60,660

 

 

 

76,434

 

Other real estate owned (“OREO”)

 

 

 

 

 

 

 

63

 

 

 

1,043

 

 

 

938

 

Total nonperforming assets

$

67,276

 

 

$

106,816

 

 

$

45,528

 

 

$

61,703

 

 

$

77,372

 

               
Nonperforming assets/total assets

 

0.39

%

 

 

0.59

%

 

 

0.24

%

 

 

0.31

%

 

 

0.38

%

Nonperforming loans/loans receivable

 

0.50

%

 

 

0.78

%

 

 

0.33

%

 

 

0.42

%

 

 

0.51

%

Nonaccrual loans/loans receivable

 

0.49

%

 

 

0.43

%

 

 

0.33

%

 

 

0.27

%

 

 

0.41

%

Allowance for credit losses/loans receivable

 

1.15

%

 

 

1.16

%

 

 

1.15

%

 

 

1.11

%

 

 

1.16

%

Allowance for credit losses/nonperforming loans

 

231.91

%

 

 

148.63

%

 

 

349.05

%

 

 

261.80

%

 

 

226.33

%

(1)

  Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.2 million, $10.9 million, $11.4 million, $12.1 million, and $11.9 million, at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.
   

 

 
               
NONACCRUAL LOANS BY TYPE:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

CRE loans

$

27,292

 

 

$

37,836

 

 

$

33,932

 

 

$

26,687

 

 

$

29,270

 

C&I loans

 

33,456

 

 

 

15,070

 

 

 

5,013

 

 

 

4,234

 

 

 

23,042

 

Residential mortgage and other loans

 

6,255

 

 

 

6,620

 

 

 

6,259

 

 

 

8,160

 

 

 

8,940

 

Total nonaccrual loans

$

67,003

 

 

$

59,526

 

 

$

45,204

 

 

$

39,081

 

 

$

61,252

 

               

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

30 - 59 days past due

$

9,073

 

$

2,273

 

$

2,833

 

$

2,906

 

$

9,295

60 - 89 days past due

 

552

 

 

 

313

 

 

 

1,289

 

 

 

506

 

 

 

178

 

Total accruing delinquent loans 30-89 days past due

$

9,625

 

 

$

2,586

 

 

$

4,122

 

 

$

3,412

 

 

$

9,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

CRE loans

$

5,586

 

 

$

1,639

 

 

$

2,160

 

 

$

611

 

 

$

7,339

 

C&I loans

 

2,530

 

 

 

551

 

 

 

1,643

 

 

 

1,168

 

 

 

990

 

Residential mortgage and other loans

 

1,509

 

 

 

396

 

 

 

319

 

 

 

1,633

 

 

 

1,144

 

Total accruing delinquent loans 30-89 days past due

$

9,625

 

 

$

2,586

 

 

$

4,122

 

 

$

3,412

 

 

$

9,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

Special mention loans

$

204,167

 

 

$

215,183

 

 

$

178,992

 

 

$

186,600

 

 

$

210,806

 

Substandard loans

 

243,635

 

 

 

206,350

 

 

 

143,449

 

 

 

174,161

 

 

 

134,203

 

Total criticized loans

$

447,802

 

 

$

421,533

 

 

$

322,441

 

 

$

360,761

 

 

$

345,009

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

Reconciliation of GAAP financial measures to non-GAAP financial measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY (“TCE”)

6/30/2024

 

3/31/2024

 

6/30/2023

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,111,282

 

 

$

2,112,270

 

 

$

2,067,998

 

 

 

 

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(467,583

)

 

 

(467,984

)

 

 

(469,280

)

 

 

 

 

 

 

 

 

TCE

$

1,643,699

 

 

$

1,644,286

 

 

$

1,598,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

17,375,091

 

 

$

18,088,214

 

 

$

20,366,138

 

 

 

 

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(467,583

)

 

 

(467,984

)

 

 

(469,280

)

 

 

 

 

 

 

 

 

Tangible assets

$

16,907,508

 

 

$

17,620,230

 

 

$

19,896,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio

 

9.72

%

 

 

9.33

%

 

 

8.04

%

 

 

 

 

 

 

 

 

Common shares outstanding

 

120,731,342

 

 

 

120,610,029

 

 

 

120,014,888

 

 

 

 

 

 

 

 

 

TCE per share

$

13.61

 

 

$

13.63

 

 

$

13.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

6/30/2024

 

3/31/2024

 

6/30/2023

 

6/30/2024

 

6/30/2023

Average stockholders’ equity

$

2,097,108

 

 

$

2,126,333

 

 

$

2,072,859

 

 

$

2,111,720

 

 

$

2,059,583

 

Less: Average goodwill and core deposit intangible assets, net

 

(467,822

)

 

 

(468,229

)

 

 

(469,515

)

 

 

(468,026

)

 

 

(469,752

)

Average TCE

$

1,629,286

 

 

$

1,658,104

 

 

$

1,603,344

 

 

$

1,643,694

 

 

$

1,589,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

25,270

 

 

$

25,864

 

 

$

38,022

 

 

$

51,134

 

 

$

77,143

 

ROTCE (annualized)

 

6.20

%

 

 

6.24

%

 

 

9.49

%

 

 

6.22

%

 

 

9.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS

6/30/2024

 

3/31/2024

 

6/30/2023

 

6/30/2024

 

6/30/2023

Net income

$

25,270

 

 

$

25,864

 

 

$

38,022

 

 

$

51,134

 

 

$

77,143

 

Notable items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

(309

)

 

 

1,000

 

 

 

 

 

 

691

 

 

 

 

Restructuring-related costs

 

576

 

 

 

402

 

 

 

 

 

 

978

 

 

 

 

Merger-related costs

 

1,589

 

 

 

1,044

 

 

 

 

 

 

2,633

 

 

 

 

Total notable items

 

1,856

 

 

 

2,446

 

 

 

 

 

 

4,302

 

 

 

 

Less: tax provision

 

547

 

 

 

719

 

 

 

 

 

 

1,266

 

 

 

 

Total notable items, net of tax provision

$

1,309

 

 

$

1,727

 

 

$

 

 

$

3,036

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income excluding notable items

$

26,579

 

 

$

27,591

 

 

$

38,022

 

 

$

54,170

 

 

$

77,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted common shares

 

120,939,429

 

 

 

121,020,292

 

 

 

120,129,359

 

 

 

120,964,149

 

 

 

120,179,443

 

EPS excluding notable items

$

0.22

 

 

$

0.23

 

 

$

0.32

 

 

$

0.45

 

 

$

0.64

 

Average Assets

$

17,256,638

 

 

$

19,140,775

 

 

$

20,468,810

 

 

$

18,198,707

 

 

$

19,781,806

 

ROA excluding notable items

 

0.62

%

 

 

0.58

%

 

 

0.74

%

 

 

0.60

%

 

 

0.78

%

Average Equity

$

2,097,108

 

 

$

2,126,333

 

 

$

2,072,859

 

 

$

2,111,720

 

 

$

2,059,583

 

ROE excluding notable items

 

5.07

%

 

 

5.19

%

 

 

7.34

%

 

 

5.13

%

 

 

7.49

%

Average TCE

$

1,629,286

 

 

$

1,658,104

 

 

$

1,603,344

 

 

$

1,643,694

 

 

$

1,589,831

 

ROTCE excluding notable items

 

6.53

%

 

 

6.66

%

 

 

9.49

%

 

 

6.59

%

 

 

9.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS

6/30/2024

 

3/31/2024

 

6/30/2023

 

6/30/2024

 

6/30/2023

Noninterest expense

$

80,987

 

 

$

84,839

 

 

$

87,223

 

 

$

165,826

 

 

$

175,957

 

Less: notable items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

309

 

 

 

(1,000

)

 

 

 

 

 

(691

)

 

 

 

Restructuring-related costs

 

(576

)

 

 

(402

)

 

 

 

 

 

(978

)

 

 

 

Merger-related costs

 

(1,589

)

 

 

(1,044

)

 

 

 

 

 

(2,633

)

 

 

 

Noninterest expense excluding notable items

$

79,131

 

 

$

82,393

 

 

$

87,223

 

 

$

161,524

 

 

$

175,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

116,931

 

 

$

123,333

 

 

$

147,703

 

 

$

240,264

 

 

$

292,559

 

Efficiency ratio excluding notable items

 

67.67

%

 

 

66.81

%

 

 

59.05

%

 

 

67.23

%

 

 

60.14

%

 

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