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Hope Bancorp Reports 2023 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, 2023.

For the three months ended June 30, 2023, net income totaled $38.0 million, or $0.32 per diluted common share. This compares with net income of $39.1 million, or $0.33 per diluted common share, in the preceding first quarter. Pre-provision net revenue (“PPNR”) (1) for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.

“Throughout the second quarter, we continued to maintain high levels of capital and liquidity to prudently navigate an operating environment that is challenging for regional banks,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Year-over-year, our total capital ratio increased 51 basis points to 12.64% at June 30, 2023. At the end of the 2023 second quarter, our tangible common equity ratio (1) was a robust 8.04%.

“Our asset quality remains healthy. We recorded net recoveries of $552 thousand for the 2023 second quarter, and nonperforming assets decreased 30% year-over-year. We have steadily built our allowance for credit losses, with coverage at 1.16% of loans receivable at June 30, 2023.

“Year-over-year, our loans receivable grew 2% to $14.9 billion, and our total deposits grew 4% to $15.6 billion at June 30, 2023. With Bank of Hope’s strong balance sheet and continued investment in enhancing our products and services, we are focused on expanding our relationships with our customers and strengthening our market leadership in the Korean American community and beyond,” said Kim.

Q2 2023 Highlights

  • Capital growth. Total capital was $2.10 billion at June 30, 2023, growing 2% from March 31, 2023. The total capital ratio increased 39 basis points quarter-over-quarter to 12.64% at June 30, 2023. Book value per common share at June 30, 2023, was $17.23, and tangible common equity (“TCE”) per share (1) was $13.32, up 0.3% and 0.5%, respectively, quarter-over-quarter. The TCE ratio of 8.04% as of June 30, 2023, expanded 13 basis points from March 31, 2023.
  • Strong liquidity. Cash and cash equivalents increased to $2.30 billion at June 30, 2023, up from $2.21 billion at March 31, 2023. Available borrowing capacity, together with cash and cash equivalents and unpledged investment securities, totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023.
  • Healthy asset quality. Nonperforming assets declined 3% quarter-over-quarter. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023. The Company recorded net recoveries of $552 thousand during the 2023 second quarter, equivalent to 0.01% annualized of average loans.
  • Total deposits of $15.62 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 4% year-over-year. Uninsured deposits at June 30, 2023, represented 36% of the Bank’s deposits, compared with 38% at March 31, 2023.
  • Loans receivable of $14.86 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 2% year-over-year.
  • Efficiency improvement. The efficiency ratio for the 2023 second quarter improved 325 basis points to 59.1% from 62.4% for the preceding first quarter.
  • PPNR increase. PPNR for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.

(1)

PPNR, TCE ratio, and TCE per share 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.

Financial Summary

 

At or for the Three Months Ended

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

6/30/2023

 

3/31/2023

 

6/30/2022

Net income

$

38,022

 

 

$

39,121

 

 

$

52,088

 

Diluted earnings per share

$

0.32

 

 

$

0.33

 

 

$

0.43

 

Net interest income before provision for credit losses

$

130,689

 

 

$

133,878

 

 

$

141,538

 

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

$

60,370

 

 

$

54,502

 

 

$

73,919

 

Loans receivable

$

14,864,810

 

 

$

15,064,849

 

 

$

14,546,049

 

Deposits

$

15,619,352

 

 

$

15,828,209

 

 

$

15,029,630

 

Total assets

$

20,366,138

 

 

$

20,568,884

 

 

$

18,089,062

 

Total equity

$

2,067,998

 

 

$

2,058,580

 

 

$

2,000,369

 

Total capital ratio

 

12.64

%

 

 

12.25

%

 

 

12.13

%

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

 

8.04

%

 

 

7.91

%

 

 

8.68

%

Net recoveries (charge offs)

$

552

 

 

$

(108

)

 

$

930

 

Net recoveries/average loans receivable (2)

 

0.01

%

 

 

%

 

 

0.03

%

Allowance for credit losses

$

172,996

 

 

$

163,544

 

 

$

151,580

 

Allowance for credit losses to loans receivable

 

1.16

%

 

 

1.09

%

 

 

1.04

%

Nonperforming assets to total assets (3)

 

0.38

%

 

 

0.39

%

 

 

0.61

%

Return on average assets (“ROA”) (2)

 

0.74

%

 

 

0.82

%

 

 

1.17

%

Return on average equity (“ROE”) (2)

 

7.34

%

 

 

7.65

%

 

 

10.33

%

Return on average TCE (“ROTCE”) (1) (2)

 

9.49

%

 

 

9.93

%

 

 

13.48

%

ROA (PPNR) (1) (2)

 

1.18

%

 

 

1.14

%

 

 

1.65

%

ROE (PPNR) (1) (2)

 

11.65

%

 

 

10.65

%

 

 

14.66

%

Net interest margin (2)

 

2.70

%

 

 

3.02

%

 

 

3.36

%

Noninterest expense / average assets (2)

 

1.71

%

 

 

1.89

%

 

 

1.80

%

Efficiency ratio

 

59.13

%

 

 

62.38

%

 

 

52.09

%

__________________

(1)

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

Annualized.

(3)

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

Operating Results for the 2023 Second Quarter

Net interest income. Net interest income before provision for credit losses for the 2023 second quarter totaled $130.7 million, a decrease of 2% compared with $133.9 million in the preceding first quarter. 2023 second quarter interest income of $267.2 million increased $30.5 million quarter-over-quarter, driven by growth in average interest earning cash and deposits at other banks, as well as expanding loan yields. This was offset by higher interest expense, which increased $33.7 million quarter-over-quarter, reflecting a higher cost of interest bearing deposits and a higher volume of average borrowings.

The net interest margin for the 2023 second quarter decreased 32 basis points to 2.70%, from 3.02% in the preceding first quarter, primarily reflecting a higher cost of funds and an increase in average borrowings, partially offset by loan yield expansion and growth in average interest earning cash and deposits at other banks.

The weighted average yield on loans for the 2023 second quarter was 5.99%, up 24 basis points from 5.75% in the preceding first quarter. This reflected increases in market interest rates and a significant increase in the average rate on new loans. The average rate on new loans originated in the 2023 second quarter was 8.37%, up 84 basis points quarter-over-quarter.

The weighted average cost of total deposits for the 2023 second quarter was 2.79%, up 42 basis points from 2.37% in the preceding first quarter, reflecting higher rates paid on interest bearing deposit accounts.

Noninterest income. Noninterest income for the 2023 second quarter totaled $17.0 million, up 55% from $11.0 million in the preceding first quarter. Other income and fees for the 2023 second quarter included a $5.8 million cash distribution from a gain on an investment in an affordable housing partnership. During the 2023 second quarter, the Company sold $38.4 million of the guaranteed portion of SBA 7(a) loans and $6.6 million of residential mortgage loans, for a gain on loan sales of $2.0 million, compared with $40.7 million and $7.3 million, respectively, sold in the preceding first quarter for a gain on loan sales of $2.3 million.

Noninterest expense. Noninterest expense for the 2023 second quarter decreased 3% to $87.3 million, down from $90.4 million in the preceding first quarter. The quarter-over-quarter change was primarily driven by lower salaries and employee benefits expense, partially offset by the impact of an industry-wide increase in the FDIC assessment rate of two basis points.

The Company’s efficiency ratio for the 2023 second quarter improved to 59.1% from 62.4% in the preceding first quarter. Annualized noninterest expense as a percentage of average assets was 1.71% for the 2023 second quarter, down from 1.89% for the 2023 first quarter.

Tax rate. The effective tax rate for the 2023 second quarter was 26.1%, compared with 25.9% for the preceding first quarter. The year-to-date effective tax rate for the first six months of 2023 was 26.0%.

Balance Sheet Summary

Loans. New loan originations for the 2023 second quarter totaled $490.6 million, compared with $568.7 million for the preceding first quarter. The following table sets forth the components of new loan production for the quarters ended June 30, 2023, March 31, 2023, and June 30, 2022.

 

For the Three Months Ended

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

Commercial real estate (“CRE”) loans

$

115,444

 

$

176,798

 

$

522,093

Commercial and industrial (“C&I”) loans

 

318,063

 

 

344,194

 

 

544,639

SBA loans

 

38,051

 

 

29,977

 

 

35,085

Residential mortgage loans

 

18,736

 

 

14,317

 

 

181,408

Other loans

 

280

 

 

3,375

 

 

2,770

Total new loan originations

$

490,574

 

$

568,661

 

$

1,285,995

At June 30, 2023, loans receivable decreased 1% quarter-over-quarter to $14.86 billion from $15.06 billion at March 31, 2023. Year-over-year, loans receivable grew 2%, up from $14.55 billion at June 30, 2022. The following table sets forth the loan portfolio composition and percentage of total loans at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

C&I loans

$

4,805,126

 

32.3

%

 

$

4,821,270

 

32.0

%

 

$

4,395,738

 

30.2

%

CRE loans

 

9,192,160

 

61.9

%

 

 

9,373,529

 

62.2

%

 

 

9,335,020

 

64.2

%

Residential mortgage and other loans

 

867,524

 

5.8

%

 

 

870,050

 

5.8

%

 

 

815,291

 

5.6

%

Loans receivable

$

14,864,810

 

100.0

%

 

$

15,064,849

 

100.0

%

 

$

14,546,049

 

100.0

%

Deposits. At June 30, 2023, total deposits decreased 1% to $15.62 billion from $15.83 billion at March 31, 2023. Year-over-year, total deposits grew 4%, up from $15.03 billion at June 30, 2022. The following table sets forth the deposit composition and percentage of total deposits at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

4,229,247

 

27.1

%

 

$

4,504,621

 

28.4

%

 

$

5,689,992

 

37.9

%

Money market and interest bearing

demand deposits

 

4,188,584

 

26.8

%

 

 

4,331,998

 

27.4

%

 

 

6,339,467

 

42.2

%

Savings deposits

 

224,495

 

1.4

%

 

 

231,704

 

1.5

%

 

 

326,927

 

2.1

%

Time deposits

 

6,977,026

 

44.7

%

 

 

6,759,886

 

42.7

%

 

 

2,673,244

 

17.8

%

Total deposits

$

15,619,352

 

100.0

%

 

$

15,828,209

 

100.0

%

 

$

15,029,630

 

100.0

%

Liquidity. At June 30, 2023, cash and cash equivalents increased to $2.30 billion from $2.21 billion at March 31, 2023, and up from $0.20 billion at June 30, 2022. Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023, and well exceeding the Bank’s uninsured deposit balances.

Borrowings and Convertible Notes. Federal Home Loan Bank and Federal Reserve Bank borrowings were $2.26 billion at June 30, 2023, compared with $2.13 billion at March 31, 2023, and $0.57 billion at June 30, 2022. At the expiration of the Optional Put for the holders of the Company’s 2% Convertible Senior Notes due 2038, $197 million of the principal amount was paid off on May 15, 2023, with existing cash.

Allowance for Credit Losses

For the 2023 second quarter, the Company recorded a provision for credit losses of $8.9 million, compared with $1.7 million in the preceding first quarter, building its allowance for credit losses. The allowance for credit losses increased to $173.0 million at June 30, 2023, up from $163.5 million at March 31, 2023. The allowance coverage ratio increased to 1.16% of loans receivable at June 30, 2023, up from 1.09% a quarter ago.

The following table sets forth the allowance for credit losses and allowance coverage ratios at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

Allowance for credit losses

$

172,996

 

 

$

163,544

 

 

$

151,580

 

Allowance for credit losses/loans receivable

 

1.16

%

 

 

1.09

%

 

 

1.04

%

Credit Quality

Asset quality continued to be healthy. The Company recorded net recoveries of $552 thousand in the 2023 second quarter, representing an annualized net recovery ratio of 0.01% of average loans. The following table sets forth net recoveries (charge offs) and net recoveries to average loans receivable, annualized, for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

Net recoveries (charge offs)

$

552

 

 

$

(108

)

 

$

930

 

Net recoveries/average loans receivable (annualized)

 

0.01

%

 

 

%

 

 

0.03

%

Nonperforming assets. Nonperforming assets totaled $77.4 million at June 30, 2023, a decrease of 3% quarter-over-quarter, and a decrease of 30% year-over-year. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023, and down from 0.61% at June 30, 2022. Nonperforming loans decreased 4% quarter-over-quarter to $76.4 million at June 30, 2023, down from $79.2 million at March 31, 2023, and decreased 30% year-over-year from $108.6 million at June 30, 2022.

The following table sets forth the components of nonperforming assets at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

Loans on nonaccrual status (1)

$

61,252

 

 

$

78,861

 

 

$

69,522

 

Accruing delinquent loans past due 90 days or more

 

15,182

 

 

 

364

 

 

 

12,468

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

26,572

 

Total nonperforming loans

 

76,434

 

 

 

79,225

 

 

 

108,562

 

Other real estate owned

 

938

 

 

 

938

 

 

 

2,010

 

Total nonperforming assets

$

77,372

 

 

$

80,163

 

 

$

110,572

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.38

%

 

 

0.39

%

 

 

0.61

%

__________________

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million and $13.2 million at June 30, 2023, March 31, 2023, and June 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.

Criticized loans. Total criticized loans were $345.0 million at June 30, 2023, compared with $304.7 million at March 31, 2023, and $340.5 million at June 30, 2022.

Capital

The Company’s capital ratios remained strong. At June 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 June 30, 2023, March 31, 2023, and June 30, 2022:

(unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

 

Minimum Guideline for

“Well-Capitalized”

Common Equity Tier 1 Capital Ratio

11.06%

 

10.75%

 

10.69%

 

6.50%

Tier 1 Capital Ratio

11.68%

 

11.36%

 

11.33%

 

8.00%

Total Capital Ratio

12.64%

 

12.25%

 

12.13%

 

10.00%

Leverage Ratio

9.57%

 

10.13%

 

10.32%

 

5.00%

The following table sets forth the TCE per share and the TCE ratio at June 30, 2023, March 31, 2023, and June 30, 2022:

(unaudited)

6/30/2023

 

3/31/2023

 

6/30/2022

TCE per share (1)

$13.32

 

$13.26

 

$12.80

TCE ratio (1)

8.04%

 

7.91%

 

8.68%

__________________

(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, July 24, 2023 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, 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 July 31, 2023, replay access code 8610354.

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 $20.37 billion in total assets as of June 30, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 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 and statements regarding our business strategies, objectives and vision. 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:

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

Cash and due from banks

$

2,302,339

 

 

$

2,212,637

 

 

4

%

 

$

197,062

 

 

1,068

%

Investment securities

 

2,186,346

 

 

 

2,231,989

 

 

(2

)%

 

 

2,352,997

 

 

(7

)%

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

 

60,213

 

 

 

59,962

 

 

%

 

 

87,109

 

 

(31

)%

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

 

49,246

 

 

 

125,268

 

 

(61

)%

 

 

76,376

 

 

(36

)%

Loans receivable

 

14,864,810

 

 

 

15,064,849

 

 

(1

)%

 

 

14,546,049

 

 

2

%

Allowance for credit losses

 

(172,996

)

 

 

(163,544

)

 

6

%

 

 

(151,580

)

 

14

%

Net loans receivable

 

14,691,814

 

 

 

14,901,305

 

 

(1

)%

 

 

14,394,469

 

 

2

%

Accrued interest receivable

 

60,118

 

 

 

57,021

 

 

5

%

 

 

37,845

 

 

59

%

Premises and equipment, net

 

50,513

 

 

 

47,887

 

 

5

%

 

 

46,093

 

 

10

%

Bank owned life insurance

 

88,238

 

 

 

87,842

 

 

%

 

 

77,692

 

 

14

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

11,532

 

 

 

11,628

 

 

(1

)%

 

 

11,215

 

 

3

%

Other intangible assets, net

 

4,830

 

 

 

5,278

 

 

(8

)%

 

 

6,698

 

 

(28

)%

Other assets

 

396,499

 

 

 

363,617

 

 

9

%

 

 

337,056

 

 

18

%

Total assets

$

20,366,138

 

 

$

20,568,884

 

 

(1

)%

 

$

18,089,062

 

 

13

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,619,352

 

 

$

15,828,209

 

 

(1

)%

 

$

15,029,630

 

 

4

%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

2,260,000

 

 

 

2,130,000

 

 

6

%

 

 

573,000

 

 

294

%

Convertible notes, net

 

444

 

 

 

206,658

 

 

(100

)%

 

 

216,678

 

 

(100

)%

Subordinated debentures

 

107,188

 

 

 

106,875

 

 

%

 

 

105,953

 

 

1

%

Accrued interest payable

 

109,236

 

 

 

53,818

 

 

103

%

 

 

4,112

 

 

2,557

%

Other liabilities

 

201,920

 

 

 

184,744

 

 

9

%

 

 

159,320

 

 

27

%

Total liabilities

$

18,298,140

 

 

$

18,510,304

 

 

(1

)%

 

$

16,088,693

 

 

14

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

137

 

 

%

Additional paid-in capital

 

1,433,788

 

 

 

1,430,977

 

 

%

 

 

1,424,891

 

 

1

%

Retained earnings

 

1,127,624

 

 

 

1,106,390

 

 

2

%

 

 

1,011,715

 

 

11

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(228,884

)

 

 

(214,257

)

 

(7

)%

 

 

(171,707

)

 

(33

)%

Total stockholders’ equity

 

2,067,998

 

 

 

2,058,580

 

 

%

 

 

2,000,369

 

 

3

%

Total liabilities and stockholders’ equity

$

20,366,138

 

 

$

20,568,884

 

 

(1

)%

 

$

18,089,062

 

 

13

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

120,014,888

 

 

 

119,865,732

 

 

 

 

 

119,473,939

 

 

 

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

 

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

 

6/30/2023

 

6/30/2022

 

% change

Interest and fees on loans

$

225,671

 

$

215,935

 

5

%

 

$

145,024

 

56

%

 

$

441,606

 

$

277,696

 

 

59

%

Interest on investment securities

 

15,534

 

 

15,125

 

3

%

 

 

12,308

 

26

%

 

 

30,659

 

 

23,964

 

 

28

%

Interest on cash and deposits at other banks

 

25,295

 

 

4,922

 

414

%

 

 

74

 

34,082

%

 

 

30,217

 

 

211

 

 

14,221

%

Interest on other investments

 

684

 

 

695

 

(2

)%

 

 

418

 

64

%

 

 

1,379

 

 

825

 

 

67

%

Total interest income

 

267,184

 

 

236,677

 

13

%

 

 

157,824

 

69

%

 

 

503,861

 

 

302,696

 

 

66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

109,724

 

 

92,348

 

19

%

 

 

12,220

 

798

%

 

 

202,072

 

 

20,896

 

 

867

%

Interest on borrowings

 

26,771

 

 

10,451

 

156

%

 

 

4,066

 

558

%

 

 

37,222

 

 

7,086

 

 

425

%

Total interest expense

 

136,495

 

 

102,799

 

33

%

 

 

16,286

 

738

%

 

 

239,294

 

 

27,982

 

 

755

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

130,689

 

 

133,878

 

(2

)%

 

 

141,538

 

(8

)%

 

 

264,567

 

 

274,714

 

 

(4

)%

Provision (credit) for credit losses

 

8,900

 

 

1,700

 

424

%

 

 

3,200

 

178

%

 

 

10,600

 

 

(7,800

)

 

N/A

 

Net interest income after provision (credit) for credit losses

 

121,789

 

 

132,178

 

(8

)%

 

 

138,338

 

(12

)%

 

 

253,967

 

 

282,514

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,325

 

 

2,221

 

5

%

 

 

2,270

 

2

%

 

 

4,546

 

 

4,244

 

 

7

%

Net gains on sales of SBA loans

 

1,872

 

 

2,225

 

(16

)%

 

 

5,804

 

(68

)%

 

 

4,097

 

 

11,407

 

 

(64

)%

Net gains on sales of residential mortgage loans

 

82

 

 

64

 

28

%

 

 

76

 

8

%

 

 

146

 

 

833

 

 

(82

)%

Other income and fees

 

12,735

 

 

6,468

 

97

%

 

 

4,596

 

177

%

 

 

19,203

 

 

9,448

 

 

103

%

Total noninterest income

 

17,014

 

 

10,978

 

55

%

 

 

12,746

 

33

%

 

 

27,992

 

 

25,932

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

52,305

 

 

57,169

 

(9

)%

 

 

51,058

 

2

%

 

 

109,474

 

 

98,803

 

 

11

%

Occupancy

 

6,967

 

 

7,521

 

(7

)%

 

 

7,178

 

(3

)%

 

 

14,488

 

 

14,513

 

 

%

Furniture and equipment

 

5,393

 

 

5,058

 

7

%

 

 

4,778

 

13

%

 

 

10,451

 

 

9,422

 

 

11

%

Data processing and communications

 

2,917

 

 

2,822

 

3

%

 

 

2,893

 

1

%

 

 

5,739

 

 

5,354

 

 

7

%

FDIC assessment

 

4,691

 

 

1,781

 

163

%

 

 

1,450

 

224

%

 

 

6,472

 

 

3,019

 

 

114

%

Earned interest credit

 

5,090

 

 

4,427

 

15

%

 

 

835

 

510

%

 

 

9,517

 

 

1,311

 

 

626

%

Other

 

9,970

 

 

11,576

 

(14

)%

 

 

12,173

 

(18

)%

 

 

21,546

 

 

23,316

 

 

(8

)%

Total noninterest expense

 

87,333

 

 

90,354

 

(3

)%

 

 

80,365

 

9

%

 

 

177,687

 

 

155,738

 

 

14

%

Income before income taxes

 

51,470

 

 

52,802

 

(3

)%

 

 

70,719

 

(27

)%

 

 

104,272

 

 

152,708

 

 

(32

)%

Income tax provision

 

13,448

 

 

13,681

 

(2

)%

 

 

18,631

 

(28

)%

 

 

27,129

 

 

39,882

 

 

(32

)%

Net income

$

38,022

 

$

39,121

 

(3

)%

 

$

52,088

 

(27

)%

 

$

77,143

 

$

112,826

 

 

(32

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Basic

$

0.32

 

$

0.33

 

 

 

$

0.43

 

 

 

$

0.64

 

$

0.94

 

 

 

Earnings Per Common Share - Diluted

$

0.32

 

$

0.33

 

 

 

$

0.43

 

 

 

$

0.64

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

119,953,174

 

 

119,551,247

 

 

 

 

120,219,919

 

 

 

 

119,753,321

 

 

120,175,894

 

 

 

Weighted Average Shares Outstanding - Diluted

 

120,129,359

 

 

120,242,295

 

 

 

 

120,699,638

 

 

 

 

120,179,443

 

 

120,898,605

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

For the Three Months Ended

 

For the Six Months Ended

Profitability measures (annualized):

6/30/2023

 

3/31/2023

 

6/30/2022

 

6/30/2023

 

6/30/2022

ROA

0.74

%

 

0.82

%

 

1.17

%

 

0.78

%

 

1.27

%

ROE

7.34

%

 

7.65

%

 

10.33

%

 

7.49

%

 

10.99

%

ROA (PPNR) (1)

1.18

%

 

1.14

%

 

1.65

%

 

1.16

%

 

1.63

%

ROE (PPNR) (1)

11.65

%

 

10.65

%

 

14.66

%

 

11.15

%

 

14.11

%

ROTCE (1)

9.49

%

 

9.93

%

 

13.48

%

 

9.70

%

 

14.27

%

Net interest margin

2.70

%

 

3.02

%

 

3.36

%

 

2.85

%

 

3.28

%

Efficiency ratio (not annualized)

59.13

%

 

62.38

%

 

52.09

%

 

60.74

%

 

51.80

%

Noninterest expense / average assets

1.71

%

 

1.89

%

 

1.80

%

 

1.80

%

 

1.75

%

(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

 

6/30/2023

 

3/31/2023

 

6/30/2022

 

Average

Balance

 

Interest

Income/


Expense

 

Annualized

Average


Yield/Cost

 

Average

Balance

 

Interest

Income/


Expense

 

Annualized

Average


Yield/Cost

 

Average

Balance

 

Interest

Income/


Expense

 

Annualized

Average


Yield/Cost

 

 

 

 

 

 

 

 

 

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

15,105,212

 

$

225,671

 

5.99

%

 

$

15,235,386

 

$

215,935

 

5.75

%

 

$

14,327,476

 

$

145,024

 

4.06

%

Investment securities

 

2,243,614

 

 

15,534

 

2.78

%

 

 

2,248,479

 

 

15,125

 

2.73

%

 

 

2,424,454

 

 

12,308

 

2.04

%

Interest earning cash and deposits at

other banks

 

1,996,924

 

 

25,295

 

5.08

%

 

 

473,344

 

 

4,922

 

4.22

%

 

 

64,545

 

 

74

 

0.46

%

FHLB stock and other investments

 

47,044

 

 

684

 

5.83

%

 

 

47,043

 

 

695

 

5.99

%

 

 

69,510

 

 

418

 

2.41

%

Total interest earning assets

$

19,392,794

 

$

267,184

 

5.53

%

 

$

18,004,252

 

$

236,677

 

5.33

%

 

$

16,885,985

 

$

157,824

 

3.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and interest bearing demand

$

4,279,819

 

$

34,377

 

3.22

%

 

$

5,341,057

 

$

41,399

 

3.14

%

 

$

6,487,890

 

$

8,655

 

0.54

%

Savings deposits

 

216,060

 

 

674

 

1.25

%

 

 

256,194

 

 

827

 

1.31

%

 

 

323,114

 

 

937

 

1.16

%

Time deposits

 

6,890,035

 

 

74,673

 

4.35

%

 

 

5,543,369

 

 

50,122

 

3.67

%

 

 

2,277,938

 

 

2,628

 

0.46

%

Total interest bearing deposits

 

11,385,914

 

 

109,724

 

3.87

%

 

 

11,140,620

 

 

92,348

 

3.36

%

 

 

9,088,942

 

 

12,220

 

0.54

%

FHLB and FRB borrowings

 

2,177,264

 

 

23,622

 

4.35

%

 

 

676,444

 

 

6,698

 

4.02

%

 

 

577,966

 

 

1,457

 

1.01

%

Convertible notes, net

 

96,621

 

 

598

 

2.45

%

 

 

217,114

 

 

1,322

 

2.44

%

 

 

216,540

 

 

1,322

 

2.42

%

Subordinated debentures

 

103,123

 

 

2,551

 

9.79

%

 

 

102,791

 

 

2,431

 

9.46

%

 

 

101,880

 

 

1,287

 

5.00

%

Total interest bearing liabilities

$

13,762,922

 

$

136,495

 

3.98

%

 

$

12,136,969

 

$

102,799

 

3.44

%

 

$

9,985,328

 

$

16,286

 

0.65

%

Noninterest bearing demand deposits

 

4,366,820

 

 

 

 

 

 

4,662,139

 

 

 

 

 

 

5,715,830

 

 

 

 

Total funding liabilities/cost of funds

$

18,129,742

 

 

 

3.02

%

 

$

16,799,108

 

 

 

2.48

%

 

$

15,701,158

 

 

 

0.42

%

Net interest income/net interest spread

 

 

$

130,689

 

1.55

%

 

 

 

$

133,878

 

1.89

%

 

 

 

$

141,538

 

3.10

%

Net interest margin

 

 

 

 

2.70

%

 

 

 

 

 

3.02

%

 

 

 

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,366,820

 

$

 

%

 

$

4,662,139

 

$

 

%

 

$

5,715,830

 

$

 

%

Interest bearing deposits

 

11,385,914

 

 

109,724

 

3.87

%

 

 

11,140,620

 

 

92,348

 

3.36

%

 

 

9,088,942

 

 

12,220

 

0.54

%

Total deposits

$

15,752,734

 

$

109,724

 

2.79

%

 

$

15,802,759

 

$

92,348

 

2.37

%

 

$

14,804,772

 

$

12,220

 

0.33

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Six Months Ended

 

6/30/2023

6/30/2022

 

Average

Balance

Interest

Income/


Expense

Annualized

Average


Yield/Cost

Average

Balance

Interest

Income/


Expense

Annualized

Average


Yield/Cost

 

INTEREST EARNING ASSETS:

 

 

 

 

 

 

Loans, including loans held for sale

$

15,169,939

$

441,606

5.87

%

$

14,100,983

$

277,696

3.97

%

Investment securities

 

2,246,033

 

30,659

2.75

%

 

2,522,293

 

23,964

1.92

%

Interest earning cash and deposits at

other banks

 

1,239,343

 

30,217

4.92

%

 

173,836

 

211

0.24

%

FHLB stock and other investments

 

47,044

 

1,379

5.91

%

 

68,974

 

825

2.41

%

Total interest earning assets

$

18,702,359

$

503,861

5.43

%

$

16,866,086

$

302,696

3.62

%

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Money market and interest bearing demand

$

4,807,506

$

75,775

3.18

%

$

6,413,292

$

14,355

0.45

%

Savings deposits

 

236,016

 

1,501

1.28

%

 

320,824

 

1,865

1.17

%

Time deposits

 

6,220,422

 

124,796

4.05

%

 

2,447,771

 

4,676

0.39

%

Total interest bearing deposits

 

11,263,944

 

202,072

3.62

%

 

9,181,887

 

20,896

0.46

%

FHLB and FRB borrowings

 

1,431,000

 

30,320

4.27

%

 

411,187

 

2,144

1.05

%

Convertible notes, net

 

156,535

 

1,920

2.44

%

 

216,423

 

2,645

2.43

%

Subordinated debentures

 

102,958

 

4,982

9.62

%

 

101,729

 

2,297

4.49

%

Total interest bearing liabilities

$

12,954,437

$

239,294

3.73

%

$

9,911,226

$

27,982

0.57

%

Noninterest bearing demand deposits

 

4,513,664

 

 

 

5,694,418

 

 

Total funding liabilities/cost of funds

$

17,468,101

 

2.76

%

$

15,605,644

 

0.36

%

Net interest income/net interest spread

 

$

264,567

1.70

%

 

$

274,714

3.05

%

Net interest margin

 

 

2.85

%

 

 

3.28

%

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,513,664

$

%

$

5,694,418

$

%

Interest bearing deposits

 

11,263,944

 

202,072

3.62

%

 

9,181,887

 

20,896

0.46

%

Total deposits

$

15,777,608

$

202,072

2.58

%

$

14,876,305

$

20,896

0.28

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

Six Months Ended

AVERAGE BALANCES:

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

 

6/30/2023

 

6/30/2022

 

% change

Loans, including loans held for sale

$

15,105,212

 

 

$

15,235,386

 

 

(1

)%

 

$

14,327,476

 

 

5

%

 

$

15,169,939

 

$

14,100,983

 

8

%

Investment securities

 

2,243,614

 

 

 

2,248,479

 

 

%

 

 

2,424,454

 

 

(7

)%

 

 

2,246,033

 

 

2,522,293

 

(11

)%

Interest earning cash and deposits at other banks

 

1,996,924

 

 

 

473,344

 

 

322

%

 

 

64,545

 

 

2994

%

 

 

1,239,343

 

 

173,836

 

613

%

Interest earning assets

 

19,392,794

 

 

 

18,004,252

 

 

8

%

 

 

16,885,985

 

 

15

%

 

 

18,702,359

 

 

16,866,086

 

11

%

Total assets

 

20,468,810

 

 

 

19,087,170

 

 

7

%

 

 

17,876,945

 

 

14

%

 

 

19,781,806

 

 

17,810,045

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

11,385,914

 

 

 

11,140,620

 

 

2

%

 

 

9,088,942

 

 

25

%

 

 

11,263,944

 

 

9,181,887

 

23

%

Interest bearing liabilities

 

13,762,922

 

 

 

12,136,969

 

 

13

%

 

 

9,985,328

 

 

38

%

 

 

12,954,437

 

 

9,911,226

 

31

%

Noninterest bearing demand deposits

 

4,366,820

 

 

 

4,662,139

 

 

(6

)%

 

 

5,715,830

 

 

(24

)%

 

 

4,513,664

 

 

5,694,418

 

(21

)%

Stockholders’ equity

 

2,072,859

 

 

 

2,046,159

 

 

1

%

 

 

2,016,577

 

 

3

%

 

 

2,059,583

 

 

2,053,461

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

 

 

 

 

 

 

Commercial and industrial (“C&I”) loans

$

4,805,126

 

 

$

4,821,270

 

 

%

 

$

4,395,738

 

 

9

%

 

 

 

 

 

 

Commercial real estate (“CRE”) loans

 

9,192,160

 

 

 

9,373,529

 

 

(2

)%

 

 

9,335,020

 

 

(2

)%

 

 

 

 

 

 

Residential mortgage and other loans

 

867,524

 

 

 

870,050

 

 

%

 

 

815,291

 

 

6

%

 

 

 

 

 

 

Loans receivable

 

14,864,810

 

 

 

15,064,849

 

 

(1

)%

 

 

14,546,049

 

 

2

%

 

 

 

 

 

 

Allowance for credit losses

 

(172,996

)

 

 

(163,544

)

 

6

%

 

 

(151,580

)

 

14

%

 

 

 

 

 

 

Loans receivable, net

$

14,691,814

 

 

$

14,901,305

 

 

(1

)%

 

$

14,394,469

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

 

 

 

 

 

 

Multi-tenant retail

$

1,778,068

 

 

$

1,817,874

 

 

(2

)%

 

$

2,603,516

 

 

(32

)%

 

 

 

 

 

 

Hotels/motels

 

868,286

 

 

 

900,990

 

 

(4

)%

 

 

1,143,982

 

 

(24

)%

 

 

 

 

 

 

Gas stations and car washes

 

1,042,290

 

 

 

1,046,528

 

 

%

 

 

1,080,777

 

 

(4

)%

 

 

 

 

 

 

Mixed-use facilities

 

834,948

 

 

 

818,227

 

 

2

%

 

 

833,342

 

 

%

 

 

 

 

 

 

Industrial warehouses

 

1,301,075

 

 

 

1,309,763

 

 

(1

)%

 

 

1,279,647

 

 

2

%

 

 

 

 

 

 

Multifamily

 

1,257,971

 

 

 

1,302,597

 

 

(3

)%

 

 

989,840

 

 

27

%

 

 

 

 

 

 

Single-tenant retail

 

690,418

 

 

 

706,593

 

 

(2

)%

 

 

720,413

 

 

(4

)%

 

 

 

 

 

 

Office

 

463,998

 

 

 

464,703

 

 

%

 

 

440,593

 

 

5

%

 

 

 

 

 

 

All other

 

955,106

 

 

 

1,006,254

 

 

(5

)%

 

 

242,910

 

 

293

%

 

 

 

 

 

 

Total CRE loans

$

9,192,160

 

 

$

9,373,529

 

 

(2

)%

 

$

9,335,020

 

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION

6/30/2023

 

3/31/2023

 

% change

 

6/30/2022

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,229,247

 

 

$

4,504,621

 

 

(6

)%

 

$

5,689,992

 

 

(26

)%

 

 

 

 

 

 

Money market and interest bearing demand

 

4,188,584

 

 

 

4,331,998

 

 

(3

)%

 

 

6,339,467

 

 

(34

)%

 

 

 

 

 

 

Savings deposits

 

224,495

 

 

 

231,704

 

 

(3

)%

 

 

326,927

 

 

(31

)%

 

 

 

 

 

 

Time deposits

 

6,977,026

 

 

 

6,759,886

 

 

3

%

 

 

2,673,244

 

 

161

%

 

 

 

 

 

 

Total deposits

$

15,619,352

 

 

$

15,828,209

 

 

(1

)%

 

$

15,029,630

 

 

4

%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 
CAPITAL & CAPITAL RATIOS:

6/30/2023

 

3/31/2023

 

6/30/2022

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,067,998

 

 

$

2,058,580

 

 

$

2,000,369

 

 

 

 

 

 

 

 

 

Total capital

$

2,102,625

 

 

$

2,068,433

 

 

$

1,948,953

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

11.06

%

 

 

10.75

%

 

 

10.69

%

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

11.68

%

 

 

11.36

%

 

 

11.33

%

 

 

 

 

 

 

 

 

Total capital ratio

 

12.64

%

 

 

12.25

%

 

 

12.13

%

 

 

 

 

 

 

 

 

Leverage ratio

 

9.57

%

 

 

10.13

%

 

 

10.32

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

16,639,593

 

 

$

16,886,419

 

 

$

16,066,709

 

 

 

 

 

 

 

 

 

Book value per common share

$

17.23

 

 

$

17.17

 

 

$

16.74

 

 

 

 

 

 

 

 

 

TCE per share (1)

$

13.32

 

 

$

13.26

 

 

$

12.80

 

 

 

 

 

 

 

 

 

TCE ratio (1)

 

8.04

%

 

 

7.91

%

 

 

8.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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:

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

6/30/2023

 

6/30/2022

Balance at beginning of period

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

147,450

 

 

$

162,359

 

 

$

140,550

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

(407

)

 

 

 

 

 

 

 

 

 

 

 

(407

)

 

 

 

Provision (credit) for credit losses

 

8,900

 

 

 

1,700

 

 

 

8,200

 

 

 

9,200

 

 

 

3,200

 

 

 

10,600

 

 

 

(7,800

)

Recoveries

 

1,531

 

 

 

387

 

 

 

3,222

 

 

 

331

 

 

 

1,642

 

 

 

1,918

 

 

 

21,045

 

Charge offs

 

(979

)

 

 

(495

)

 

 

(9,624

)

 

 

(550

)

 

 

(712

)

 

 

(1,474

)

 

 

(2,215

)

Balance at end of period

$

172,996

 

 

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

172,996

 

 

$

151,580

 

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

 

0.01

%

 

 

%

 

 

(0.17

)%

 

 

(0.01

)%

 

 

0.03

%

 

 

0.01

%

 

 

0.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

 

 

 

Allowance for unfunded loan commitments

$

3,081

 

 

$

2,971

 

 

$

1,351

 

 

$

1,231

 

 

$

1,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

NET LOAN RECOVERIES (CHARGE OFFS):

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

6/30/2023

 

6/30/2022

CRE loans

$

(438

)

 

$

109

 

 

$

(2,022

)

 

$

(9

)

 

$

508

 

 

$

(329

)

 

$

16,926

 

C&I loans

 

1,091

 

 

 

(196

)

 

 

(4,174

)

 

 

(115

)

 

 

461

 

 

 

895

 

 

 

1,990

 

Residential mortgage and other loans

 

(101

)

 

 

(21

)

 

 

(206

)

 

 

(95

)

 

 

(39

)

 

 

(122

)

 

 

(86

)

Net loan recoveries (charge offs)

$

552

 

 

$

(108

)

 

$

(6,402

)

 

$

(219

)

 

$

930

 

 

$

444

 

 

$

18,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NONPERFORMING ASSETS:

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

Loans on nonaccrual status (1)

$

61,252

 

 

$

78,861

 

 

$

49,687

 

 

$

64,571

 

 

$

69,522

 

Accruing delinquent loans past due 90 days or more

 

15,182

 

 

 

364

 

 

 

401

 

 

 

5,306

 

 

 

12,468

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

16,931

 

 

 

25,631

 

 

 

26,572

 

Total nonperforming loans

 

76,434

 

 

 

79,225

 

 

 

67,019

 

 

 

95,508

 

 

 

108,562

 

Other real estate owned (“OREO”)

 

938

 

 

 

938

 

 

 

2,418

 

 

 

1,480

 

 

 

2,010

 

Total nonperforming assets

$

77,372

 

 

$

80,163

 

 

$

69,437

 

 

$

96,988

 

 

$

110,572

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.38

%

 

 

0.39

%

 

 

0.36

%

 

 

0.51

%

 

 

0.61

%

Nonperforming assets/loans receivable & OREO

 

0.52

%

 

 

0.53

%

 

 

0.45

%

 

 

0.63

%

 

 

0.76

%

Nonperforming assets/total capital

 

3.74

%

 

 

3.89

%

 

 

3.44

%

 

 

4.91

%

 

 

5.53

%

Nonperforming loans/loans receivable

 

0.51

%

 

 

0.53

%

 

 

0.44

%

 

 

0.62

%

 

 

0.75

%

Nonaccrual loans/loans receivable

 

0.41

%

 

 

0.52

%

 

 

0.32

%

 

 

0.42

%

 

 

0.48

%

Allowance for credit losses/loans receivable

 

1.16

%

 

 

1.09

%

 

 

1.05

%

 

 

1.04

%

 

 

1.04

%

Allowance for credit losses/nonperforming loans

 

226.33

%

 

 

206.43

%

 

 

242.26

%

 

 

168.11

%

 

 

139.63

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million, $9.8 million, $9.9 million, and $13.2 million, at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 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:

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

CRE loans

$

29,270

 

 

$

44,376

 

 

$

33,915

 

 

$

47,807

 

 

$

53,966

 

C&I loans

 

23,042

 

 

 

26,191

 

 

 

5,620

 

 

 

7,675

 

 

 

8,206

 

Residential mortgage and other loans

 

8,940

 

 

 

8,294

 

 

 

10,152

 

 

 

9,089

 

 

 

7,350

 

Total nonaccrual loans

$

61,252

 

 

$

78,861

 

 

$

49,687

 

 

$

64,571

 

 

$

69,522

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

30 - 59 days past due

$ 9,295

 

$ 7,662

 

$ 7,049

 

$ 13,092

 

$ 10,090

60 - 89 days past due

178

 

249

 

2,243

 

4,933

 

6,354

Total accruing delinquent loans 30-89 days past due

$ 9,473

 

$ 7,911

 

$ 9,292

 

$ 18,025

 

$ 16,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

CRE loans

$ 7,339

 

$ 3,652

 

$ 4,115

 

$ 9,694

 

$ 7,919

C&I loans

990

 

419

 

3,300

 

6,165

 

3,397

Residential mortgage and other loans

1,144

 

3,840

 

1,877

 

2,166

 

5,128

Total accruing delinquent loans 30-89 days past due

$ 9,473

 

$ 7,911

 

$ 9,292

 

$ 18,025

 

$ 16,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

6/30/2023

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

Special mention loans

$ 210,806

 

$ 166,472

 

$ 157,263

 

$ 79,399

 

$ 95,797

Substandard loans

134,203

 

138,224

 

104,073

 

204,713

 

244,748

Total criticized loans

$ 345,009

 

$ 304,696

 

$ 261,336

 

$ 284,112

 

$ 340,545

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

 

Six Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

6/30/2023

 

3/31/2023

 

6/30/2022

 

6/30/2023

 

6/30/2022

Average stockholders’ equity

$

2,072,859

 

 

$

2,046,159

 

 

$

2,016,577

 

 

$

2,059,583

 

 

$

2,053,461

 

Less: Average goodwill and core deposit intangible assets, net

 

(469,515

)

 

 

(469,992

)

 

 

(471,421

)

 

 

(469,752

)

 

 

(471,669

)

Average TCE

$

1,603,344

 

 

$

1,576,167

 

 

$

1,545,156

 

 

$

1,589,831

 

 

$

1,581,792

 

 

 

 

 

 

 

 

 

 

 

Net income

$

38,022

 

 

$

39,121

 

 

$

52,088

 

 

$

77,143

 

 

$

112,826

 

ROTCE (annualized)

 

9.49

%

 

 

9.93

%

 

 

13.48

%

 

 

9.70

%

 

 

14.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

6/30/2023

 

3/31/2023

 

6/30/2022

 

 

 

 

Total stockholders’ equity

$

2,067,998

 

 

$

2,058,580

 

 

$

2,000,369

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(469,280

)

 

 

(469,728

)

 

 

(471,148

)

 

 

 

 

TCE

$

1,598,718

 

 

$

1,588,852

 

 

$

1,529,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

20,366,138

 

 

$

20,568,884

 

 

$

18,089,062

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(469,280

)

 

 

(469,728

)

 

 

(471,148

)

 

 

 

 

Tangible assets

$

19,896,858

 

 

$

20,099,156

 

 

$

17,617,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio

 

8.04

%

 

 

7.91

%

 

 

8.68

%

 

 

 

 

Common shares outstanding

 

120,014,888

 

 

 

119,865,732

 

 

 

119,473,939

 

 

 

 

 

TCE per share

$

13.32

 

 

$

13.26

 

 

$

12.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

PRE-PROVISION NET REVENUE

6/30/2023

 

3/31/2023

 

6/30/2022

 

6/30/2023

 

6/30/2022

Net interest income before provision (credit) for credit losses

$

130,689

 

 

$

133,878

 

 

$

141,538

 

 

$

264,567

 

 

$

274,714

 

Noninterest income

 

17,014

 

 

 

10,978

 

 

 

12,746

 

 

 

27,992

 

 

 

25,932

 

Revenue

 

147,703

 

 

 

144,856

 

 

 

154,284

 

 

 

292,559

 

 

 

300,646

 

Less noninterest expense

 

87,333

 

 

 

90,354

 

 

 

80,365

 

 

 

177,687

 

 

 

155,738

 

PPNR

$

60,370

 

 

$

54,502

 

 

$

73,919

 

 

$

114,872

 

 

$

144,908

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

20,468,810

 

 

$

19,087,170

 

 

$

17,876,945

 

 

$

19,781,806

 

 

$

17,810,045

 

ROA (PPNR) (annualized)

 

1.18

%

 

 

1.14

%

 

 

1.65

%

 

 

1.16

%

 

 

1.63

%

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

 

2,072,859

 

 

 

2,046,159

 

 

 

2,016,577

 

 

 

2,059,583

 

 

 

2,053,461

 

ROE (PPNR) (annualized)

 

11.65

%

 

 

10.65

%

 

 

14.66

%

 

 

11.15

%

 

 

14.11

%

 

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