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Hope Bancorp Reports 2023 Third Quarter Financial Results; Announces Strategic Reorganization

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its third quarter and nine months ended September 30, 2023. For the three months ended September 30, 2023, net income totaled $30.0 million, or $0.25 per diluted common share. This compares with net income of $38.0 million, or $0.32 per diluted common share, in the preceding second quarter.

“Our third quarter 2023 net interest margin expanded 13 basis points, and our net interest income grew 4% quarter-over-quarter,” stated Kevin S. Kim, Chairman, President and Chief Executive Officer. “We maintained disciplined expense control and our noninterest expenses decreased 1% over the same period. However, we recorded a provision for credit losses of $17 million for the third quarter, and certain one-time gains in the second quarter 2023 noninterest income did not reoccur. As a result, our net income declined compared with the prior quarter.”

“Our balance sheet continued to strengthen. Total deposits grew to $15.7 billion at September 30, 2023, up 1% from June 30, 2023, reflecting growth in customer deposits, partially offset by a planned reduction of brokered time deposits. Our total capital ratio increased to 13.23% as of September 30, 2023, and all our regulatory capital ratios expanded quarter-over-quarter,” continued Kim. “Our deposit growth, taken together with our expanding capital and ample liquidity, positions us well to take advantage of profitable growth opportunities going forward.”

Strategic Reorganization

The Company also announced today a strategic reorganization designed to enhance shareholder value over the long term. Accordingly, the Company realigned its structure around lines of business and product delivery channels, optimized its production capacity and reduced headcount. The restructuring is expected to generate over $40 million in estimated annualized cost savings, largely related to the reduction in staffing, savings from a planned branch rationalization, subject to customary notices and approvals, and operational process improvements. The Company expects to recognize one-time charges of approximately $12 million in the fourth quarter of 2023 related to the reorganization.

“As the largest Korean American bank in the United States, Bank of Hope has made great strides in transitioning from a traditional community bank into a regional bank serving a wide range of consumer, small business, commercial and corporate customers,” commented Kim. “Today’s strategic reorganization further evolves our business model. As a result, we expect to operate our Bank more efficiently, strengthen our franchise, enhance the customer experience and expand our customer relationships, benefiting all our stakeholders through sustainably improved profitability.”

Financial Summary

 

At or for the Three Months Ended

(dollars in thousands, except per share data) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

Net income

$

30,049

 

 

$

38,022

 

 

$

53,748

 

Diluted earnings per share

$

0.25

 

 

$

0.32

 

 

$

0.45

 

Net interest income before provision for credit losses

$

135,378

 

 

$

130,689

 

 

$

153,186

 

Pre-provision net revenue (“PPNR”) (1)

$

56,810

 

 

$

60,370

 

 

$

82,627

 

Loans receivable

$

14,306,193

 

 

$

14,864,810

 

 

$

15,491,187

 

Deposits

$

15,739,859

 

 

$

15,619,352

 

 

$

15,502,209

 

Total assets

$

20,076,364

 

 

$

20,366,138

 

 

$

19,083,388

 

Total equity

$

2,030,424

 

 

$

2,067,998

 

 

$

1,975,725

 

Total capital ratio

 

13.23

%

 

 

12.64

%

 

 

11.72

%

Tangible common equity (“TCE”) ratio (1)

 

7.96

%

 

 

8.04

%

 

 

8.09

%

Allowance for credit losses to loans receivable

 

1.11

%

 

 

1.16

%

 

 

1.04

%

Nonperforming assets to total assets (2)

 

0.31

%

 

 

0.38

%

 

 

0.51

%

Return on average assets (“ROA”) (3)

 

0.60

%

 

 

0.74

%

 

 

1.17

%

Return on average equity (“ROE”) (3)

 

5.78

%

 

 

7.34

%

 

 

10.58

%

Return on average TCE (“ROTCE”) (1) (3)

 

7.47

%

 

 

9.49

%

 

 

13.77

%

ROA (PPNR) (1) (3)

 

1.13

%

 

 

1.18

%

 

 

1.79

%

Net interest margin (3)

 

2.83

%

 

 

2.70

%

 

 

3.49

%

Efficiency ratio

 

60.5

%

 

 

59.1

%

 

 

50.4

%

 

(1)

 

PPNR, TCE ratio, ROTCE, and ROA (PPNR) 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.

(2)

 

Excludes delinquent Small Business Administration (“SBA”) loans that are guaranteed and currently in liquidation.

(3)

 

Annualized.

Operating Results for the 2023 Third Quarter

Net interest income growth and net interest margin expansion. Net interest income before provision for credit losses for the 2023 third quarter totaled $135.4 million, growing 4% from $130.7 million in the preceding second quarter. Third quarter 2023 net interest margin expanded 13 basis points to 2.83%, up from 2.70% in the 2023 second quarter. The linked quarter net interest income growth and net interest margin expansion reflected higher yields on earning assets, a decrease in the average volume of borrowings and debt, and an increase in the average volume of interest-earning cash and deposits at other banks, partially offset by a higher cost of funds and a lower average volume of loans.

Third quarter 2023 weighted average yield on earning assets of 5.77% expanded 24 basis points quarter-over-quarter; the rate of change accelerated from the previous quarter. In comparison, the third quarter 2023 weighted average cost of funds of 3.16% increased 14 basis points quarter-over-quarter; the rate of change decelerated from the previous quarter.

Noninterest income. Noninterest income for the 2023 third quarter totaled $8.3 million, compared with $17.0 million in the preceding second quarter. Second quarter 2023 noninterest income included a one-time $5.8 million cash distribution from a gain on an investment in an affordable housing partnership and $1.9 million of gains on SBA loan sales. The Company did not sell any SBA 7(a) loans during the 2023 third quarter, retaining loan production on its balance sheet instead. In comparison, during the preceding 2023 second quarter, the Company sold $38.4 million of the guaranteed portion of SBA 7(a) loans for net gains on sale of $1.9 million.

Noninterest expense. Noninterest expense for the 2023 third quarter decreased 1% to $86.9 million, down from $87.3 million in the preceding second quarter. The linked quarter decrease was largely driven by lower salaries and employee benefits expense and lower FDIC assessment expense, partially offset by higher earned interest credit costs. Third quarter 2023 salaries and employee benefits expense decreased 2% to $51.0 million, down from $52.3 million in the 2023 second quarter. The Company’s efficiency ratio for the 2023 third quarter was 60.5%, compared with 59.1% in the preceding second quarter.

Tax rate. The effective tax rate for the 2023 third quarter was 24.9%, compared with 26.1% for the preceding second quarter. The year-to-date effective tax rate for the first nine months of 2023 was 25.7%.

Balance Sheet Summary

Strong Liquidity. At September 30, 2023, cash and cash equivalents increased to $2.50 billion, up from $2.30 billion at June 30, 2023, and up from $331.3 million at September 30, 2022. Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $8.29 billion at September 30, 2023, equivalent to 53% of total deposits and well exceeding the Bank’s uninsured deposit balances.

Loans. Loans receivable of $14.31 billion at September 30, 2023, decreased 4% from $14.86 billion at June 30, 2023, reflecting our prudent approach to loan growth, an intentional decrease in mortgage warehouse lines, and the impact of paydowns and payoffs in a high interest rate environment. Year-over-year, loans receivable decreased 8%. The following table sets forth the loan portfolio composition and percentage of total loans at September 30, 2023, June 30, 2023, and September 30, 2022:

(dollars in thousands) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial real estate (“CRE”) loans

$

8,972,886

 

62.7

%

 

$

9,192,160

 

61.9

%

 

$

9,504,893

 

61.3

%

Commercial and industrial (“C&I”) loans

 

4,450,341

 

 

31.1

%

 

 

4,805,126

 

 

32.3

%

 

 

5,124,421

 

 

33.1

%

Residential mortgage and other loans

 

882,966

 

 

6.2

%

 

 

867,524

 

 

5.8

%

 

 

861,873

 

 

5.6

%

Loans receivable

$

14,306,193

 

 

100.0

%

 

$

14,864,810

 

 

100.0

%

 

$

15,491,187

 

 

100.0

%

Deposits. Total deposits of $15.74 billion at September 30, 2023, grew 1% from $15.62 billion at June 30, 2023, reflecting growth in customer deposits, partially offset by a planned reduction of brokered time deposits. Year-over-year, total deposits increased 2%. The gross loan-to-deposit ratio was 91.0% at September 30, 2023, compared with 95.5% at June 30, 2023, and 100.2% a year ago at September 30, 2022. The following table sets forth the deposit composition and percentage of total deposits at September 30, 2023, June 30, 2023, and September 30, 2022:

(dollars in thousands) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

4,249,788

 

27.0

%

 

$

4,229,247

 

27.1

%

 

$

5,590,952

 

36.1

%

Money market and interest bearing demand deposits

 

4,424,918

 

 

28.1

%

 

 

4,188,584

 

 

26.8

%

 

 

5,885,093

 

 

38.0

%

Savings deposits

 

430,765

 

 

2.8

%

 

 

224,495

 

 

1.4

%

 

 

317,841

 

 

2.0

%

Time deposits

 

6,634,388

 

 

42.1

%

 

 

6,977,026

 

 

44.7

%

 

 

3,708,323

 

 

23.9

%

Total deposits

$

15,739,859

 

 

100.0

%

 

$

15,619,352

 

 

100.0

%

 

$

15,502,209

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross loan-to-deposit ratio

 

 

91.0

%

 

 

 

95.5

%

 

 

 

100.2

%

Uninsured deposits at September 30, 2023, represented 37% of the Bank’s deposits.

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $1.80 billion at September 30, 2023, compared with $2.26 billion at June 30, 2023, and $1.07 billion at September 30, 2022. Linked quarter growth in deposits and decrease in loans reduced the need for borrowings in the 2023 third quarter.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets totaled $61.7 million at September 30, 2023, a decrease of 20% from June 30, 2023. The quarter-over-quarter decrease in nonperforming assets reflects charge offs of nonaccrual loans, payoffs and workouts, partially offset by new inflows. The nonperforming assets ratio was 0.31% of total assets at September 30, 2023, an improvement from 0.38% at June 30, 2023.

The following table sets forth the components of nonperforming assets at September 30, 2023, June 30, 2023, and September 30, 2022:

(dollars in thousands) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

Loans on nonaccrual status (1)

$

39,081

 

 

$

61,252

 

 

$

64,571

 

Accruing delinquent loans past due 90 days or more

 

21,579

 

 

 

15,182

 

 

 

5,306

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

25,631

 

Total nonperforming loans

 

60,660

 

 

 

76,434

 

 

 

95,508

 

Other real estate owned

 

1,043

 

 

 

938

 

 

 

1,480

 

Total nonperforming assets

$

61,703

 

 

$

77,372

 

 

$

96,988

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.31

%

 

 

0.38

%

 

 

0.51

%

 

(1)

 

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.1 million, $11.9 million and $9.9 million at September 30, 2023, June 30, 2023, and September 30, 2022, respectively.

(2)

 

The Company adopted ASU 2022-02 in 2023, which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.

Net charge offs. The Company recorded net charge offs of $31.0 million in the 2023 third quarter. This included an idiosyncratic full charge off of $23.4 million related to a borrower that entered into Chapter 7 liquidation in August 2023. Related to this credit, the Company had recorded impairment reserves of $9.6 million at June 30, 2023. For the 2023 third quarter, the Company recorded a provision for credit losses of $16.8 million, compared with $8.9 million in the preceding second quarter.

The following table sets forth net charge offs (recoveries) and net charge offs (recoveries) to average loans receivable, annualized, for the three months ended September 30, 2023, June 30, 2023, and September 30, 2022:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

Net charge offs (recoveries)

$

30,987

 

 

$

(552

)

 

$

219

 

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

 

0.85

%

 

 

(0.01

)%

 

 

0.01

%

Allowance for credit losses. The allowance for credit losses totaled $158.8 million at September 30, 2023, compared with $173.0 million at June 30, 2023. The allowance coverage ratio was 1.11% of loans receivable at September 30, 2023, compared with 1.16% at June 30, 2023. Excluding the $9.6 million of impairment reserves related to the aforementioned charged off credit, the allowance coverage ratio as of June 30, 2023, was 1.10%. Year-over-year, allowance coverage of loans receivable increased from 1.04% at September 30, 2022.

The following table sets forth the allowance for credit losses and allowance coverage ratios at September 30, 2023, June 30, 2023, and September 30, 2022:

(dollars in thousands) (unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

Allowance for credit losses

$

158,809

 

 

$

172,996

 

 

$

160,561

 

Allowance for credit losses/loans receivable

 

1.11

%

 

 

1.16

%

 

 

1.04

%

Capital

The Company’s capital ratios are strong and all regulatory capital ratios expanded quarter-over-quarter. At September 30, 2023, 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 September 30, 2023, June 30, 2023, and September 30, 2022:

(unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

 

Minimum Guideline

for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

11.67

%

 

11.05

%

 

10.32

%

 

6.50

%

Tier 1 Capital Ratio

12.32

%

 

11.68

%

 

10.92

%

 

8.00

%

Total Capital Ratio

13.23

%

 

12.64

%

 

11.72

%

 

10.00

%

Leverage Ratio

9.83

%

 

9.57

%

 

10.25

%

 

5.00

%

At September 30, 2023, total stockholders’ equity was $2.03 billion, or $16.92 per share, tangible common equity per share was $13.01, and the tangible common equity ratio was 7.96%. Quarter-over-quarter, stockholders’ equity declined by 2%, or $37.6 million, primarily reflecting a negative change in accumulated other comprehensive income (“AOCI”) of $53.8 million and $16.8 million in common dividends declared, partially offset by $30.0 million in net income. The following table sets forth the TCE per share and the TCE ratio at September 30, 2023, June 30, 2023, and September 30, 2022:

(unaudited)

9/30/2023

 

6/30/2023

 

9/30/2022

TCE per share (1)

$

13.01

 

 

$

13.32

 

 

$

12.60

 

TCE ratio (1)

 

7.96

%

 

 

8.04

%

 

 

8.09

%

 

(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.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, October 23, 2023, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its third quarter ended September 30, 2023. 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 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 October 30, 2023, replay access code 5386919.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including PPNR, TCE per share, TCE ratio, ROTCE, ROA (PPNR), and ROE (PPNR). 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 Page 10.

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 $20.08 billion in total assets as of September 30, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California, Seattle and Tampa, Fla.; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate lending, commercial and industrial lending, SBA lending, and international trade financing. 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 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.

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 the business environment in which we operate, projections of future performance, perceived opportunities in the market, statements regarding our business strategies, objectives and vision, and statements about our strategic reorganization. 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, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; 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 the Company’s allowances for credit losses; regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company 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:

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

Cash and due from banks

$

2,500,323

 

 

$

2,302,339

 

 

9

%

 

$

331,336

 

 

655

%

Investment securities

 

2,260,837

 

 

 

2,186,346

 

 

3

%

 

 

2,264,533

 

 

%

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

 

60,433

 

 

 

60,213

 

 

%

 

 

65,192

 

 

(7

)%

Loans held for sale, at the lower of cost or fair value

 

19,502

 

 

 

49,246

 

 

(60

)%

 

 

41,989

 

 

(54

)%

Loans receivable

 

14,306,193

 

 

 

14,864,810

 

 

(4

)%

 

 

15,491,187

 

 

(8

)%

Allowance for credit losses

 

(158,809

)

 

 

(172,996

)

 

(8

)%

 

 

(160,561

)

 

(1

)%

Net loans receivable

 

14,147,384

 

 

 

14,691,814

 

 

(4

)%

 

 

15,330,626

 

 

(8

)%

Accrued interest receivable

 

60,665

 

 

 

60,118

 

 

1

%

 

 

42,363

 

 

43

%

Premises and equipment, net

 

51,764

 

 

 

50,513

 

 

2

%

 

 

46,169

 

 

12

%

Bank owned life insurance

 

88,643

 

 

 

88,238

 

 

%

 

 

76,788

 

 

15

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

10,457

 

 

 

11,532

 

 

(9

)%

 

 

11,601

 

 

(10

)%

Other intangible assets, net

 

4,382

 

 

 

4,830

 

 

(9

)%

 

 

6,212

 

 

(29

)%

Other assets

 

407,524

 

 

 

396,499

 

 

3

%

 

 

402,129

 

 

1

%

Total assets

$

20,076,364

 

 

$

20,366,138

 

 

(1

)%

 

$

19,083,388

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,739,859

 

 

$

15,619,352

 

 

1

%

 

$

15,502,209

 

 

2

%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

1,795,726

 

 

 

2,260,000

 

 

(21

)%

 

 

1,072,000

 

 

68

%

Convertible notes, net

 

444

 

 

 

444

 

 

%

 

 

216,913

 

 

(100

)%

Subordinated debentures

 

107,505

 

 

 

107,188

 

 

%

 

 

106,258

 

 

1

%

Accrued interest payable

 

166,831

 

 

 

109,236

 

 

53

%

 

 

11,713

 

 

1,324

%

Other liabilities

 

235,575

 

 

 

201,920

 

 

17

%

 

 

198,570

 

 

19

%

Total liabilities

$

18,045,940

 

 

$

18,298,140

 

 

(1

)%

 

$

17,107,663

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

137

 

 

%

Additional paid-in capital

 

1,436,769

 

 

 

1,433,788

 

 

%

 

 

1,428,052

 

 

1

%

Retained earnings

 

1,140,870

 

 

 

1,127,624

 

 

1

%

 

 

1,048,738

 

 

9

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(282,685

)

 

 

(228,884

)

 

(24

)%

 

 

(236,535

)

 

(20

)%

Total stockholders’ equity

 

2,030,424

 

 

 

2,067,998

 

 

(2

)%

 

 

1,975,725

 

 

3

%

Total liabilities and stockholders’ equity

$

20,076,364

 

 

$

20,366,138

 

 

(1

)%

 

$

19,083,388

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

120,026,220

 

 

 

120,014,888

 

 

 

 

 

119,479,253

 

 

 

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

 

Nine Months Ended

 

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

 

9/30/2023

 

9/30/2022

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

229,937

 

$

225,671

 

2

%

 

$

175,078

 

31

%

 

$

671,543

 

$

452,774

 

48

%

Interest on investment securities

 

17,006

 

 

 

15,534

 

 

9

%

 

 

13,498

 

 

26

%

 

 

47,665

 

 

 

37,462

 

 

27

%

Interest on cash and deposits at other banks

 

28,115

 

 

 

25,295

 

 

11

%

 

 

142

 

 

NM

 

 

 

58,332

 

 

 

352

 

 

NM

 

Interest on other investments

 

735

 

 

 

684

 

 

7

%

 

 

464

 

 

58

%

 

 

2,114

 

 

 

1,290

 

 

64

%

Total interest income

 

275,793

 

 

 

267,184

 

 

3

%

 

 

189,182

 

 

46

%

 

 

779,654

 

 

 

491,878

 

 

59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

117,854

 

 

 

109,724

 

 

7

%

 

 

30,667

 

 

284

%

 

 

319,926

 

 

 

51,563

 

 

520

%

Interest on borrowings

 

22,561

 

 

 

26,771

 

 

(16

)%

 

 

5,329

 

 

323

%

 

 

59,783

 

 

 

12,415

 

 

382

%

Total interest expense

 

140,415

 

 

 

136,495

 

 

3

%

 

 

35,996

 

 

290

%

 

 

379,709

 

 

 

63,978

 

 

493

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision for credit losses

 

135,378

 

 

 

130,689

 

 

4

%

 

 

153,186

 

 

(12

)%

 

 

399,945

 

 

 

427,900

 

 

(7

)%

Provision for credit losses

 

16,800

 

 

 

8,900

 

 

89

%

 

 

9,200

 

 

83

%

 

 

27,400

 

 

 

1,400

 

 

1,857

%

Net interest income after provision for credit losses

 

118,578

 

 

 

121,789

 

 

(3

)%

 

 

143,986

 

 

(18

)%

 

 

372,545

 

 

 

426,500

 

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,415

 

 

 

2,325

 

 

4

%

 

 

2,535

 

 

(5

)%

 

 

6,961

 

 

 

6,779

 

 

3

%

Net gains on sales of SBA loans

 

 

 

 

1,872

 

 

(100

)%

 

 

2,782

 

 

(100

)%

 

 

4,097

 

 

 

14,189

 

 

(71

)%

Net gains on sales of residential mortgage loans

 

118

 

 

 

82

 

 

44

%

 

 

29

 

 

307

%

 

 

264

 

 

 

862

 

 

(69

)%

Other income and fees

 

5,772

 

 

 

12,735

 

 

(55

)%

 

 

8,009

 

 

(28

)%

 

 

24,975

 

 

 

17,457

 

 

43

%

Total noninterest income

 

8,305

 

 

 

17,014

 

 

(51

)%

 

 

13,355

 

 

(38

)%

 

 

36,297

 

 

 

39,287

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

51,033

 

 

 

52,305

 

 

(2

)%

 

 

53,222

 

 

(4

)%

 

 

160,507

 

 

 

152,025

 

 

6

%

Occupancy

 

7,149

 

 

 

6,967

 

 

3

%

 

 

6,682

 

 

7

%

 

 

21,637

 

 

 

21,195

 

 

2

%

Furniture and equipment

 

5,625

 

 

 

5,393

 

 

4

%

 

 

4,967

 

 

13

%

 

 

16,076

 

 

 

14,389

 

 

12

%

Data processing and communications

 

2,891

 

 

 

2,917

 

 

(1

)%

 

 

2,469

 

 

17

%

 

 

8,630

 

 

 

7,823

 

 

10

%

FDIC assessment

 

3,683

 

 

 

4,691

 

 

(21

)%

 

 

1,633

 

 

126

%

 

 

10,155

 

 

 

4,652

 

 

118

%

Earned interest credit

 

6,377

 

 

 

5,090

 

 

25

%

 

 

4,685

 

 

36

%

 

 

15,894

 

 

 

5,996

 

 

165

%

Other

 

10,115

 

 

 

9,970

 

 

1

%

 

 

10,256

 

 

(1

)%

 

 

31,661

 

 

 

33,572

 

 

(6

)%

Total noninterest expense

 

86,873

 

 

 

87,333

 

 

(1

)%

 

 

83,914

 

 

4

%

 

 

264,560

 

 

 

239,652

 

 

10

%

Income before income taxes

 

40,010

 

 

 

51,470

 

 

(22

)%

 

 

73,427

 

 

(46

)%

 

 

144,282

 

 

 

226,135

 

 

(36

)%

Income tax provision

 

9,961

 

 

 

13,448

 

 

(26

)%

 

 

19,679

 

 

(49

)%

 

 

37,090

 

 

 

59,561

 

 

(38

)%

Net income

$

30,049

 

 

$

38,022

 

 

(21

)%

 

$

53,748

 

 

(44

)%

 

$

107,192

 

 

$

166,574

 

 

(36

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Basic

$

0.25

 

 

$

0.32

 

 

 

 

$

0.45

 

 

 

 

$

0.89

 

 

$

1.39

 

 

 

Earnings Per Common Share - Diluted

$

0.25

 

 

$

0.32

 

 

 

 

$

0.45

 

 

 

 

$

0.89

 

 

$

1.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

120,020,567

 

 

 

119,953,174

 

 

 

 

 

119,476,035

 

 

 

 

 

119,843,382

 

 

 

119,940,044

 

 

 

Weighted Average Shares Outstanding - Diluted

 

120,374,618

 

 

 

120,129,359

 

 

 

 

 

119,996,523

 

 

 

 

 

120,249,952

 

 

 

120,595,988

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

 

For the Three Months Ended

 

For the Nine Months Ended

Profitability measures (annualized):

9/30/2023

 

6/30/2023

 

9/30/2022

 

9/30/2023

 

9/30/2022

ROA

0.60

%

 

0.74

%

 

1.17

%

 

0.72

%

 

1.23

%

ROE

5.78

%

 

7.34

%

 

10.58

%

 

6.92

%

 

10.85

%

ROA (PPNR) (1)

1.13

%

 

1.18

%

 

1.79

%

 

1.15

%

 

1.68

%

ROE (PPNR) (1)

10.93

%

 

11.65

%

 

16.26

%

 

11.08

%

 

14.83

%

ROTCE (1)

7.47

%

 

9.49

%

 

13.77

%

 

8.95

%

 

14.10

%

Net interest margin

2.83

%

 

2.70

%

 

3.49

%

 

2.84

%

 

3.36

%

Efficiency ratio (not annualized)

60.46

%

 

59.13

%

 

50.39

%

 

60.65

%

 

51.30

%

Noninterest expense / average assets

1.73

%

 

1.71

%

 

1.82

%

 

1.77

%

 

1.77

%

 

 

 

 

 

 

 

 

 

 

(1) ROA (PPNR), ROE (PPNR), and ROTCE 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.

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

9/30/2023

 

6/30/2023

 

9/30/2022

 

 

 

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

$

14,550,106

 

$

229,937

 

6.27

%

 

$

15,105,212

 

$

225,671

 

5.99

%

 

$

14,925,298

 

$

175,078

 

4.65

%

Investment securities

 

2,275,133

 

 

 

17,006

 

 

2.97

%

 

 

2,243,614

 

 

 

15,534

 

 

2.78

%

 

 

2,366,696

 

 

 

13,498

 

 

2.26

%

Interest earning cash and deposits at other banks

 

2,106,469

 

 

 

28,115

 

 

5.30

%

 

 

1,996,924

 

 

 

25,295

 

 

5.08

%

 

 

54,870

 

 

 

142

 

 

1.03

%

FHLB stock and other investments

 

47,316

 

 

 

735

 

 

6.16

%

 

 

47,044

 

 

 

684

 

 

5.83

%

 

 

52,854

 

 

 

464

 

 

3.48

%

Total interest earning assets

$

18,979,024

 

 

$

275,793

 

 

5.77

%

 

$

19,392,794

 

 

$

267,184

 

 

5.53

%

 

$

17,399,718

 

 

$

189,182

 

 

4.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and interest bearing demand

$

4,202,076

 

 

$

36,574

 

 

3.45

%

 

$

4,279,819

 

 

$

34,377

 

 

3.22

%

 

$

6,255,271

 

 

$

19,614

 

 

1.24

%

Savings deposits

 

331,354

 

 

 

2,240

 

 

2.68

%

 

 

216,060

 

 

 

674

 

 

1.25

%

 

 

324,487

 

 

 

969

 

 

1.18

%

Time deposits

 

6,862,038

 

 

 

79,040

 

 

4.57

%

 

 

6,890,035

 

 

 

74,673

 

 

4.35

%

 

 

3,146,432

 

 

 

10,084

 

 

1.27

%

Total interest bearing deposits

 

11,395,468

 

 

 

117,854

 

 

4.10

%

 

 

11,385,914

 

 

 

109,724

 

 

3.87

%

 

 

9,726,190

 

 

 

30,667

 

 

1.25

%

FHLB and FRB borrowings

 

1,809,322

 

 

 

19,821

 

 

4.35

%

 

 

2,177,264

 

 

 

23,622

 

 

4.35

%

 

 

448,837

 

 

 

2,393

 

 

2.12

%

Convertible notes, net

 

444

 

 

 

2

 

 

1.76

%

 

 

96,621

 

 

 

598

 

 

2.45

%

 

 

216,762

 

 

 

1,322

 

 

2.39

%

Subordinated debentures

 

103,429

 

 

 

2,738

 

 

10.36

%

 

 

103,123

 

 

 

2,551

 

 

9.79

%

 

 

102,182

 

 

 

1,614

 

 

6.18

%

Total interest bearing liabilities

$

13,308,663

 

 

$

140,415

 

 

4.19

%

 

$

13,762,922

 

 

$

136,495

 

 

3.98

%

 

$

10,493,971

 

 

$

35,996

 

 

1.36

%

Noninterest bearing demand deposits

 

4,312,117

 

 

 

 

 

 

 

4,366,868

 

 

 

 

 

 

 

5,719,213

 

 

 

 

 

Total funding liabilities/cost of funds

$

17,620,780

 

 

 

 

3.16

%

 

$

18,129,790

 

 

 

 

3.02

%

 

$

16,213,184

 

 

 

 

0.88

%

Net interest income/net interest spread

 

 

$

135,378

 

 

1.58

%

 

 

 

$

130,689

 

 

1.55

%

 

 

 

$

153,186

 

 

2.95

%

Net interest margin

 

 

 

 

2.83

%

 

 

 

 

 

2.70

%

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,312,117

 

 

$

 

 

%

 

$

4,366,868

 

 

$

 

 

%

 

$

5,719,213

 

 

$

 

 

%

Interest bearing deposits

 

11,395,468

 

 

 

117,854

 

 

4.10

%

 

 

11,385,914

 

 

 

109,724

 

 

3.87

%

 

 

9,726,190

 

 

 

30,667

 

 

1.25

%

Total deposits

$

15,707,585

 

 

$

117,854

 

 

2.98

%

 

$

15,752,782

 

 

$

109,724

 

 

2.79

%

 

$

15,445,403

 

 

$

30,667

 

 

0.79

%

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Nine Months Ended

 

9/30/2023

 

9/30/2022

 

 

 

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

$

14,961,058

 

$

671,543

 

6.00

%

 

$

14,378,774

 

$

452,774

 

4.21

%

Investment securities

 

2,255,839

 

 

 

47,665

 

 

2.83

%

 

 

2,469,858

 

 

 

37,462

 

 

2.03

%

Interest earning cash and deposits at other banks

 

1,531,561

 

 

 

58,332

 

 

5.09

%

 

 

133,745

 

 

 

352

 

 

0.35

%

FHLB stock and other investments

 

47,135

 

 

 

2,114

 

 

6.00

%

 

 

63,542

 

 

 

1,290

 

 

2.71

%

Total interest earning assets

$

18,795,593

 

 

$

779,654

 

 

5.55

%

 

$

17,045,919

 

 

$

491,878

 

 

3.86

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Money market and interest bearing demand

$

4,603,479

 

 

$

112,349

 

 

3.26

%

 

$

6,360,040

 

 

$

33,970

 

 

0.71

%

Savings deposits

 

268,145

 

 

 

3,741

 

 

1.87

%

 

 

322,058

 

 

 

2,834

 

 

1.18

%

Time deposits

 

6,436,645

 

 

 

203,836

 

 

4.23

%

 

 

2,683,217

 

 

 

14,759

 

 

0.74

%

Total interest bearing deposits

 

11,308,269

 

 

 

319,926

 

 

3.78

%

 

 

9,365,315

 

 

 

51,563

 

 

0.74

%

FHLB and FRB borrowings

 

1,558,493

 

 

 

50,141

 

 

4.30

%

 

 

423,875

 

 

 

4,537

 

 

1.43

%

Convertible notes, net

 

103,933

 

 

 

1,922

 

 

2.44

%

 

 

216,538

 

 

 

3,967

 

 

2.42

%

Subordinated debentures

 

103,117

 

 

 

7,720

 

 

9.87

%

 

 

101,882

 

 

 

3,911

 

 

5.06

%

Total interest bearing liabilities

$

13,073,812

 

 

$

379,709

 

 

3.88

%

 

$

10,107,610

 

 

$

63,978

 

 

0.85

%

Noninterest bearing demand deposits

 

4,445,740

 

 

 

 

 

 

 

5,702,734

 

 

 

 

 

Total funding liabilities/cost of funds

$

17,519,552

 

 

 

 

2.90

%

 

$

15,810,344

 

 

 

 

0.54

%

Net interest income/net interest spread

 

 

$

399,945

 

 

1.67

%

 

 

 

$

427,900

 

 

3.01

%

Net interest margin

 

 

 

 

2.84

%

 

 

 

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,445,740

 

 

$

 

 

%

 

$

5,702,734

 

 

$

 

 

%

Interest bearing deposits

 

11,308,269

 

 

 

319,926

 

 

3.78

%

 

 

9,365,315

 

 

 

51,563

 

 

0.74

%

Total deposits

$

15,754,009

 

 

$

319,926

 

 

2.72

%

 

$

15,068,049

 

 

$

51,563

 

 

0.46

%

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

AVERAGE BALANCES:

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

 

9/30/2023

 

9/30/2022

 

% change

Loans, including loans held for sale

$

14,550,106

 

$

15,105,212

 

(4

)%

 

$

14,925,298

 

(3

)%

 

$

14,961,058

 

$

14,378,774

 

4

%

Investment securities

 

2,275,133

 

 

 

2,243,614

 

 

1

%

 

 

2,366,696

 

 

(4

)%

 

 

2,255,839

 

 

 

2,469,858

 

 

(9

)%

Interest earning cash and deposits at other banks

 

2,106,469

 

 

 

1,996,924

 

 

5

%

 

 

54,870

 

 

3739

%

 

 

1,531,561

 

 

 

133,745

 

 

1045

%

Interest earning assets

 

18,979,024

 

 

 

19,392,794

 

 

(2

)%

 

 

17,399,718

 

 

9

%

 

 

18,795,593

 

 

 

17,045,919

 

 

10

%

Total assets

 

20,059,304

 

 

 

20,468,810

 

 

(2

)%

 

 

18,428,874

 

 

9

%

 

 

19,875,322

 

 

 

18,018,588

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

11,395,468

 

 

 

11,385,914

 

 

%

 

 

9,726,190

 

 

17

%

 

 

11,308,269

 

 

 

9,365,315

 

 

21

%

Interest bearing liabilities

 

13,308,663

 

 

 

13,762,922

 

 

(3

)%

 

 

10,493,971

 

 

27

%

 

 

13,073,812

 

 

 

10,107,610

 

 

29

%

Noninterest bearing demand deposits

 

4,312,117

 

 

 

4,366,868

 

 

(1

)%

 

 

5,719,213

 

 

(25

)%

 

 

4,445,740

 

 

 

5,702,734

 

 

(22

)%

Stockholders’ equity

 

2,079,092

 

 

 

2,072,859

 

 

%

 

 

2,032,362

 

 

2

%

 

 

2,066,157

 

 

 

2,046,351

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

 

 

 

 

 

 

Commercial real estate (“CRE”) loans

$

8,972,886

 

 

$

9,192,160

 

 

(2

)%

 

$

9,504,893

 

 

(6

)%

 

 

 

 

 

 

Commercial and industrial (“C&I”) loans

 

4,450,341

 

 

 

4,805,126

 

 

(7

)%

 

 

5,124,421

 

 

(13

)%

 

 

 

 

 

 

Residential mortgage and other loans

 

882,966

 

 

 

867,524

 

 

2

%

 

 

861,873

 

 

2

%

 

 

 

 

 

 

Loans receivable

 

14,306,193

 

 

 

14,864,810

 

 

(4

)%

 

 

15,491,187

 

 

(8

)%

 

 

 

 

 

 

Allowance for credit losses

 

(158,809

)

 

 

(172,996

)

 

(8

)%

 

 

(160,561

)

 

(1

)%

 

 

 

 

 

 

Loans receivable, net

$

14,147,384

 

 

$

14,691,814

 

 

(4

)%

 

$

15,330,626

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

 

 

 

 

 

 

Multi-tenant retail

$

1,745,430

 

 

$

1,778,068

 

 

(2

)%

 

$

1,904,132

 

 

(8

)%

 

 

 

 

 

 

Hotels/motels

 

826,732

 

 

 

868,286

 

 

(5

)%

 

 

1,091,047

 

 

(24

)%

 

 

 

 

 

 

Gas stations and car washes

 

1,037,621

 

 

 

1,042,290

 

 

%

 

 

1,056,217

 

 

(2

)%

 

 

 

 

 

 

Mixed-use facilities

 

813,571

 

 

 

834,948

 

 

(3

)%

 

 

825,289

 

 

(1

)%

 

 

 

 

 

 

Industrial warehouses

 

1,254,643

 

 

 

1,301,075

 

 

(4

)%

 

 

1,271,104

 

 

(1

)%

 

 

 

 

 

 

Multifamily

 

1,234,934

 

 

 

1,257,971

 

 

(2

)%

 

 

1,199,320

 

 

3

%

 

 

 

 

 

 

Single-tenant retail

 

671,921

 

 

 

690,418

 

 

(3

)%

 

 

728,432

 

 

(8

)%

 

 

 

 

 

 

Office

 

454,695

 

 

 

463,998

 

 

(2

)%

 

 

432,586

 

 

5

%

 

 

 

 

 

 

All other

 

933,339

 

 

 

955,106

 

 

(2

)%

 

 

996,766

 

 

(6

)%

 

 

 

 

 

 

Total CRE loans

$

8,972,886

 

 

$

9,192,160

 

 

(2

)%

 

$

9,504,893

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

9/30/2023

 

6/30/2023

 

% change

 

9/30/2022

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,249,788

 

 

$

4,229,247

 

 

%

 

$

5,590,952

 

 

(24

)%

 

 

 

 

 

 

Money market and interest bearing demand

 

4,424,918

 

 

 

4,188,584

 

 

6

%

 

 

5,885,093

 

 

(25

)%

 

 

 

 

 

 

Savings deposits

 

430,765

 

 

 

224,495

 

 

92

%

 

 

317,841

 

 

36

%

 

 

 

 

 

 

Time deposits

 

6,634,388

 

 

 

6,977,026

 

 

(5

)%

 

 

3,708,323

 

 

79

%

 

 

 

 

 

 

Total deposits

$

15,739,859

 

 

$

15,619,352

 

 

1

%

 

$

15,502,209

 

 

2

%

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

Three Months Ended

 

 

 

 

 

 

 

 

NEW LOAN ORIGINATIONS:

9/30/2023

 

6/30/2023

 

9/30/2022

 

 

 

 

 

 

 

 

CRE

$

46,011

 

 

$

115,444

 

 

$

500,826

 

 

 

 

 

 

 

 

 

C&I

 

201,420

 

 

 

318,063

 

 

 

732,341

 

 

 

 

 

 

 

 

 

SBA loans

 

48,987

 

 

 

38,051

 

 

 

47,428

 

 

 

 

 

 

 

 

 

Residential mortgage and other loans

 

32,920

 

 

 

19,016

 

 

 

68,099

 

 

 

 

 

 

 

 

 

Total new loan originations

$

329,338

 

 

$

490,574

 

 

$

1,348,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL & CAPITAL RATIOS:

9/30/2023

 

6/30/2023

 

9/30/2022

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,030,424

 

 

$

2,067,998

 

 

$

1,975,725

 

 

 

 

 

 

 

 

 

Total capital

$

2,105,754

 

 

$

2,102,625

 

 

$

2,000,653

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

11.67

%

 

 

11.05

%

 

 

10.32

%

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

12.32

%

 

 

11.68

%

 

 

10.92

%

 

 

 

 

 

 

 

 

Total capital ratio

 

13.23

%

 

 

12.64

%

 

 

11.72

%

 

 

 

 

 

 

 

 

Leverage ratio

 

9.83

%

 

 

9.57

%

 

 

10.25

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

15,912,742

 

 

$

16,640,323

 

 

$

17,065,355

 

 

 

 

 

 

 

 

 

Book value per common share

$

16.92

 

 

$

17.23

 

 

$

16.54

 

 

 

 

 

 

 

 

 

TCE per share (1)

$

13.01

 

 

$

13.32

 

 

$

12.60

 

 

 

 

 

 

 

 

 

TCE ratio (1)

 

7.96

%

 

 

8.04

%

 

 

8.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Nine Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

9/30/2023

 

9/30/2022

Balance at beginning of period

$

172,996

 

 

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

162,359

 

 

$

140,550

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

 

 

 

(407

)

 

 

 

 

 

 

 

 

(407

)

 

 

 

Provision for credit losses

 

16,800

 

 

 

8,900

 

 

 

1,700

 

 

 

8,200

 

 

 

9,200

 

 

 

27,400

 

 

 

1,400

 

Recoveries

 

2,938

 

 

 

1,531

 

 

 

387

 

 

 

3,222

 

 

 

331

 

 

 

4,856

 

 

 

21,376

 

Charge offs

 

(33,925

)

 

 

(979

)

 

 

(495

)

 

 

(9,624

)

 

 

(550

)

 

 

(35,399

)

 

 

(2,765

)

Balance at end of period

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

158,809

 

 

$

160,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

 

 

 

Allowance for unfunded loan commitments

$

3,143

 

 

$

3,081

 

 

$

2,971

 

 

$

1,351

 

 

$

1,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

9/30/2023

 

9/30/2022

CRE loans

$

(2,227

)

 

$

438

 

 

$

(109

)

 

$

2,022

 

 

$

9

 

 

$

(1,898

)

 

$

(16,917

)

C&I loans

 

33,145

 

 

 

(1,091

)

 

 

196

 

 

 

4,174

 

 

 

115

 

 

 

32,250

 

 

 

(1,875

)

Residential mortgage and other loans

 

69

 

 

 

101

 

 

 

21

 

 

 

206

 

 

 

95

 

 

 

191

 

 

 

181

 

Net loan charge offs (recoveries)

$

30,987

 

 

$

(552

)

 

$

108

 

 

$

6,402

 

 

$

219

 

 

$

30,543

 

 

$

(18,611

)

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

 

0.85

%

 

 

(0.01

)%

 

 

%

 

 

0.17

%

 

 

0.01

%

 

 

0.27

%

 

 

(0.17

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONPERFORMING ASSETS:

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

Loans on nonaccrual status (1)

$

39,081

 

 

$

61,252

 

 

$

78,861

 

 

$

49,687

 

 

$

64,571

 

Accruing delinquent loans past due 90 days or more

 

21,579

 

 

 

15,182

 

 

 

364

 

 

 

401

 

 

 

5,306

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

 

 

 

16,931

 

 

 

25,631

 

Total nonperforming loans

 

60,660

 

 

 

76,434

 

 

 

79,225

 

 

 

67,019

 

 

 

95,508

 

Other real estate owned (“OREO”)

 

1,043

 

 

 

938

 

 

 

938

 

 

 

2,418

 

 

 

1,480

 

Total nonperforming assets

$

61,703

 

 

$

77,372

 

 

$

80,163

 

 

$

69,437

 

 

$

96,988

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.31

%

 

 

0.38

%

 

 

0.39

%

 

 

0.36

%

 

 

0.51

%

Nonperforming assets/loans receivable & OREO

 

0.43

%

 

 

0.52

%

 

 

0.53

%

 

 

0.45

%

 

 

0.63

%

Nonperforming assets/total capital

 

3.04

%

 

 

3.74

%

 

 

3.89

%

 

 

3.44

%

 

 

4.91

%

Nonperforming loans/loans receivable

 

0.42

%

 

 

0.51

%

 

 

0.53

%

 

 

0.44

%

 

 

0.62

%

Nonaccrual loans/loans receivable

 

0.27

%

 

 

0.41

%

 

 

0.52

%

 

 

0.32

%

 

 

0.42

%

Allowance for credit losses/loans receivable

 

1.11

%

 

 

1.16

%

 

 

1.09

%

 

 

1.05

%

 

 

1.04

%

Allowance for credit losses/nonperforming loans

 

261.80

%

 

 

226.33

%

 

 

206.43

%

 

 

242.26

%

 

 

168.11

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.1 million, $11.9 million, $7.6 million, $9.8 million, and $9.9 million, at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively.

(2) The Company adopted ASU 2022-02 in 2023, which eliminated the concept of TDR from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

CRE loans

$

26,687

 

 

$

29,270

 

 

$

44,376

 

 

$

33,915

 

 

$

47,807

 

C&I loans

 

4,234

 

 

 

23,042

 

 

 

26,191

 

 

 

5,620

 

 

 

7,675

 

Residential mortgage and other loans

 

8,160

 

 

 

8,940

 

 

 

8,294

 

 

 

10,152

 

 

 

9,089

 

Total nonaccrual loans

$

39,081

 

 

$

61,252

 

 

$

78,861

 

 

$

49,687

 

 

$

64,571

 

 

 

 

 

 

 

 

 

 

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

30 - 59 days past due

$

2,906

 

$

9,295

 

$

7,662

 

$

7,049

 

$

13,092

60 - 89 days past due

 

506

 

 

 

178

 

 

 

249

 

 

 

2,243

 

 

 

4,933

 

Total accruing delinquent loans 30-89 days past due

$

3,412

 

 

$

9,473

 

 

$

7,911

 

 

$

9,292

 

 

$

18,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

CRE loans

$

611

 

 

$

7,339

 

 

$

3,652

 

 

$

4,115

 

 

$

9,694

 

C&I loans

 

1,168

 

 

 

990

 

 

 

419

 

 

 

3,300

 

 

 

6,165

 

Residential mortgage and other loans

 

1,633

 

 

 

1,144

 

 

 

3,840

 

 

 

1,877

 

 

 

2,166

 

Total accruing delinquent loans 30-89 days past due

$

3,412

 

 

$

9,473

 

 

$

7,911

 

 

$

9,292

 

 

$

18,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

Special mention loans

$

186,600

 

 

$

210,806

 

 

$

166,472

 

 

$

157,263

 

 

$

79,399

 

Substandard loans

 

174,161

 

 

 

134,203

 

 

 

138,224

 

 

 

104,073

 

 

 

204,713

 

Total criticized loans

$

360,761

 

 

$

345,009

 

 

$

304,696

 

 

$

261,336

 

 

$

284,112

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

9/30/2023

 

6/30/2023

 

9/30/2022

 

9/30/2023

 

9/30/2022

Average stockholders’ equity

$

2,079,092

 

 

$

2,072,859

 

 

$

2,032,362

 

 

$

2,066,157

 

 

$

2,046,351

 

Less: Average goodwill and core deposit intangible assets, net

 

(469,079

)

 

 

(469,515

)

 

 

(470,941

)

 

 

(469,525

)

 

 

(471,424

)

Average TCE

$

1,610,013

 

 

$

1,603,344

 

 

$

1,561,421

 

 

$

1,596,632

 

 

$

1,574,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

30,049

 

 

$

38,022

 

 

$

53,748

 

 

$

107,192

 

 

$

166,574

 

ROTCE (annualized)

 

7.47

%

 

 

9.49

%

 

 

13.77

%

 

 

8.95

%

 

 

14.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

9/30/2023

 

6/30/2023

 

9/30/2022

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,030,424

 

 

$

2,067,998

 

 

$

1,975,725

 

 

 

 

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(468,832

)

 

 

(469,280

)

 

 

(470,662

)

 

 

 

 

 

 

 

 

TCE

$

1,561,592

 

 

$

1,598,718

 

 

$

1,505,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

20,076,364

 

 

$

20,366,138

 

 

$

19,083,388

 

 

 

 

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(468,832

)

 

 

(469,280

)

 

 

(470,662

)

 

 

 

 

 

 

 

 

Tangible assets

$

19,607,532

 

 

$

19,896,858

 

 

$

18,612,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio

 

7.96

%

 

 

8.04

%

 

 

8.09

%

 

 

 

 

 

 

 

 

Common shares outstanding

 

120,026,220

 

 

 

120,014,888

 

 

 

119,479,253

 

 

 

 

 

 

 

 

 

TCE per share

$

13.01

 

 

$

13.32

 

 

$

12.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

PRE-PROVISION NET REVENUE

9/30/2023

 

6/30/2023

 

9/30/2022

 

9/30/2023

 

9/30/2022

Net interest income before provision for credit losses

$

135,378

 

 

$

130,689

 

 

$

153,186

 

 

$

399,945

 

 

$

427,900

 

Noninterest income

 

8,305

 

 

 

17,014

 

 

 

13,355

 

 

 

36,297

 

 

 

39,287

 

Revenue

 

143,683

 

 

 

147,703

 

 

 

166,541

 

 

 

436,242

 

 

 

467,187

 

Less: Noninterest expense

 

86,873

 

 

 

87,333

 

 

 

83,914

 

 

 

264,560

 

 

 

239,652

 

PPNR

$

56,810

 

 

$

60,370

 

 

$

82,627

 

 

$

171,682

 

 

$

227,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

20,059,304

 

 

$

20,468,810

 

 

$

18,428,874

 

 

$

19,875,322

 

 

$

18,018,588

 

ROA (PPNR) (annualized)

 

1.13

%

 

 

1.18

%

 

 

1.79

%

 

 

1.15

%

 

 

1.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

 

2,079,092

 

 

 

2,072,859

 

 

 

2,032,362

 

 

 

2,066,157

 

 

 

2,046,351

 

ROE (PPNR) (annualized)

 

10.93

%

 

 

11.65

%

 

 

16.26

%

 

 

11.08

%

 

 

14.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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