Hope Bancorp Reports 2023 Fourth Quarter and Full-Year 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 fourth quarter and full year ended December 31, 2023. For the three months ended December 31, 2023, net income totaled $26.5 million, or $0.22 per diluted common share. For the full year ended December 31, 2023, net income totaled $133.7 million, or $1.11 per diluted common share.

“Net income for the 2023 fourth quarter was $26.5 million, or $38.3 million excluding the FDIC special assessment and restructuring charges related to our strategic reorganization,” stated Kevin S. Kim, Chairman, President and Chief Executive Officer. “Excluding these notable items, our net income was up 26% quarter-over-quarter. Continued focus on expense discipline and improvements in our credit quality metrics were important contributors to our net income growth. Nonperforming assets decreased 26%, and criticized loans declined 11% from September 30, 2023. Net charge offs for the 2023 fourth quarter were a very low five basis points, annualized, of average loans.

“We grew tangible book value 6% year-over-year, and all our regulatory risk-based capital ratios expanded,” continued Kim. “At December 31, 2023, the Company’s total capital ratio was 13.9% and common equity tier 1 capital ratio was 12.3%. Our strong capital positions the Bank well to support all our customers in their growth plans for the new year.

“The 2023 fourth quarter was an important building quarter for the Company with the announcement of our strategic reorganization in October. We believe our realignment around lines of business and products will enable Bank of Hope to operate more efficiently, support high-quality loan and deposit growth, and deliver improved returns in the years to come, enhancing stockholder value over the long term,” concluded Kim. “I wish to thank all our team members at Bank of Hope for their continued dedication to our organization and their excellence in serving our customers.”

Operating Results for the 2023 Fourth Quarter

Net income and earnings per share. Net income for the 2023 fourth quarter was $26.5 million, or $0.22 per diluted common share, compared with $30.0 million, or $0.25 per diluted common share, for the immediately preceding third quarter. Notable items impacting net income in the fourth quarter of 2023 were $8.7 million of restructuring costs, after tax, related to the Company’s previously announced strategic reorganization, and $3.1 million, after tax, accrued for the Federal Deposit Insurance Corporation (“FDIC”) special assessment, which was approved by the FDIC Board of Directors in November 2023. Excluding these notable items, net income for the 2023 fourth quarter was $38.3 million(1), up 26% from $30.4 million (excluding $376,000, after tax, of restructuring costs) for the third quarter of 2023. Earnings per diluted common share excluding notable items(1) amounted to $0.32 for the three months ended December 31, 2023, up 28% compared with $0.25 per diluted common share for the immediately preceding third quarter.

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2023 fourth quarter totaled $125.9 million, compared with $135.4 million in the immediately preceding third quarter, a decrease of 7% quarter-over-quarter. Fourth quarter 2023 net interest margin contracted 13 basis points to 2.70%, from 2.83% in the 2023 third quarter. The linked quarter change in net interest income and net interest margin reflected a higher cost of interest bearing deposits and a decrease in the average balance of loans, partially offset by higher yields on investment securities and other earning assets, as well as a decrease in the average balance of interest bearing deposits. In addition, the third quarter of 2023 included $3.1 million of recovered interest income related to one borrower relationship, which contributed eight basis points to the average loan yield and six basis points to the net interest margin in the third quarter.

_____________________________________

(1)

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

Noninterest income. Noninterest income for the 2023 fourth quarter totaled $9.3 million, increasing 12% from $8.3 million in the immediately preceding third quarter. Growth was well distributed across various fee income lines. The Company did not sell any SBA 7(a) loans during the second half of 2023, retaining loan production on the balance sheet instead.

Noninterest expense. Noninterest expense for the 2023 fourth quarter was $99.9 million, including $11.1 million of pre-tax restructuring costs, primarily comprising severance costs, planned branch consolidation charges and professional fees, and $4.0 million (pre-tax) accrued for the FDIC special assessment. Excluding these notable items, fourth quarter 2023 noninterest expense(2) was $84.8 million, down 2% from $86.4 million (excluding $500,000, pre-tax, of restructuring charges) in the 2023 third quarter. Fourth quarter 2023 salaries and employee benefits expense decreased 7% to $47.4 million, down from $51.0 million in the 2023 third quarter, reflecting the reduction to total headcount related to the restructuring. Other noninterest expense increased quarter-over-quarter, primarily reflecting increased CRA investment expense and provision for unfunded loan commitments.

Tax rate. The effective tax rate for the 2023 fourth quarter was 21.2%, compared with 24.9% for the immediately preceding third quarter. For the full year 2023, the effective tax rate was 24.9%, compared with 26.3% for the full year 2022.

Balance Sheet Summary

Cash and investment securities. At December 31, 2023, cash and cash equivalents totaled $1.93 billion, compared with $2.50 billion at September 30, 2023, primarily driven by a decrease in deposit balances. At December 31, 2022, cash and equivalents were $506.8 million. Investment securities totaled $2.41 billion at December 31, 2023, up from $2.26 billion at September 30, 2023, and $2.24 billion at December 31, 2022.

Loans. Loans receivable of $13.85 billion at December 31, 2023, decreased 3% from $14.31 billion at September 30, 2023, reflecting declines in commercial and commercial real estate loans, partially offset by growth in residential mortgage loans. During the 2023 fourth quarter, the Company exited its residential mortgage warehouse line business, which accounted for $64.7 million of the linked quarter decrease in loans. Fourth quarter average loans of $14.05 billion decreased 3% quarter-over-quarter.

The following table sets forth the loan portfolio composition at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial real estate (“CRE”) loans

$

8,797,884

 

63.6

%

 

$

8,972,886

 

62.7

%

 

$

9,414,580

 

61.1

%

Commercial and industrial (“C&I”) loans

 

4,135,044

 

29.8

%

 

 

4,450,341

 

31.1

%

 

 

5,109,532

 

33.2

%

Residential mortgage and other loans

 

920,691

 

6.6

%

 

 

882,966

 

6.2

%

 

 

879,428

 

5.7

%

Loans receivable

$

13,853,619

 

100.0

%

 

$

14,306,193

 

100.0

%

 

$

15,403,540

 

100.0

%

Deposits. Total deposits of $14.75 billion at December 31, 2023, decreased 6% from $15.74 billion at September 30, 2023. Fourth quarter 2023 average deposits of $15.26 billion decreased 3% quarter-over-quarter. During the fourth quarter of 2023, the Company reduced brokered time deposits by $449.9 million, or 25% from September 30, 2023. Noninterest bearing demand deposits decreased in the fourth quarter of 2023 primarily due to seasonality of funds from commercial customers in the residential mortgage business; these customers were unrelated to the exit of residential mortgage warehouse lending.

_____________________________________

(2)

Noninterest expense, excluding notable items, is a non-GAAP financial measure. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11.

The gross loan-to-deposit ratio was 93.9% at December 31, 2023, compared with 91.0% at September 30, 2023, and 98.2% at December 31, 2022.

The following table sets forth the deposit composition at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

3,914,967

 

26.5

%

 

$

4,249,788

 

27.0

%

 

$

4,849,493

 

30.8

%

Money market, interest bearing

demand, and savings deposits

 

4,872,029

 

33.0

%

 

 

4,855,683

 

30.9

%

 

 

5,899,248

 

37.5

%

Time deposits

 

5,966,757

 

40.5

%

 

 

6,634,388

 

42.1

%

 

 

4,990,060

 

31.7

%

Total deposits

$

14,753,753

 

100.0

%

 

$

15,739,859

 

100.0

%

 

$

15,738,801

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross loan-to-deposit ratio

 

 

93.9

%

 

 

 

91.0

%

 

 

 

98.2

%

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $1.80 billion at December 31, 2023, unchanged from September 30, 2023, and up from $865.0 million at December 31, 2022.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets totaled $45.5 million at December 31, 2023, a decrease of 26% from $61.7 million at September 30, 2023. The nonperforming assets ratio was 0.24% of total assets at December 31, 2023, an improvement from 0.31% of total assets at September 30, 2023.

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

(dollars in thousands) (unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

Loans on nonaccrual status (1)

$

45,204

 

 

$

39,081

 

 

$

49,687

 

Accruing delinquent loans past due 90 days or more

 

261

 

 

 

21,579

 

 

 

401

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

16,931

 

Total nonperforming loans

 

45,465

 

 

 

60,660

 

 

 

67,019

 

Other real estate owned

 

63

 

 

 

1,043

 

 

 

2,418

 

Total nonperforming assets

$

45,528

 

 

$

61,703

 

 

$

69,437

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.24

%

 

 

0.31

%

 

 

0.36

%

_____________________________________

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million and $9.8 million at December 31, 2023, September 30, 2023, and December 31, 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. Criticized loans decreased 11% quarter-over-quarter to $322.4 million at December 31, 2023, down from $360.8 million at September 30, 2023. Both special mention and substandard loans decreased quarter-over-quarter. The decrease was largely driven by upgrades, along with payoffs and note sales. As of December 31, 2022, criticized loans totaled $261.3 million.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $1.8 million in the 2023 fourth quarter, equivalent to 0.05%, annualized, of average loans. This was an improvement from net charge offs of $31.0 million, or 0.85%, annualized, of average loans in the immediately preceding third quarter. Accordingly, the Company recorded a provision for credit losses of $1.7 million for the 2023 fourth quarter, compared with $16.8 million in the immediately preceding third quarter. For the full year 2023, net charge offs were 0.22% of average loans, compared with net recoveries of (0.08)% of average loans for the full year 2022.

The following table sets forth net charge offs (recoveries) and the provision for credit losses for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, and for the twelve months ended December 31, 2023 and 2022:

 

For the Three Months Ended

 

 

For the Twelve Months Ended

(dollars in thousands) (unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

 

 

12/31/2023

 

12/31/2022

Net charge offs (recoveries)

$

1,815

 

 

$

30,987

 

 

$

6,402

 

 

$

32,358

 

 

$

(12,209

)

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

 

0.05

%

 

 

0.85

%

 

 

0.17

%

 

 

0.22

%

 

 

(0.08

)%

Provision for credit losses

$

1,700

 

 

$

16,800

 

 

$

8,200

 

 

$

29,100

 

 

$

9,600

 

Allowance for credit losses. The allowance for credit losses totaled $158.7 million at December 31, 2023, compared with $158.8 million at September 30, 2023. The allowance coverage ratio increased to 1.15% of loans receivable at December 31, 2023, up from 1.11% at September 30, 2023. Year-over-year, allowance coverage of loans receivable increased from 1.05% at December 31, 2022.

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

(dollars in thousands) (unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

Allowance for credit losses

$

158,694

 

 

$

158,809

 

 

$

162,359

 

Allowance for credit losses/loans receivable

 

1.15

%

 

 

1.11

%

 

 

1.05

%

Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At December 31, 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 December 31, 2023, September 30, 2023, and December 31, 2022:

(unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

 

Minimum Guideline for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

12.28%

 

11.67%

 

10.55%

 

6.50%

Tier 1 Capital Ratio

12.96%

 

12.32%

 

11.15%

 

8.00%

Total Capital Ratio

13.92%

 

13.23%

 

11.97%

 

10.00%

Leverage Ratio

10.11%

 

9.83%

 

10.15%

 

5.00%

At December 31, 2023, total stockholders’ equity was $2.12 billion, or $17.66 per common share. Quarter-over-quarter, stockholders’ equity increased 4%, or $90.8 million, primarily reflecting a positive change in accumulated other comprehensive income (“AOCI”) and growth in retained earnings. Tangible common equity (“TCE”) per share was $13.76 at December 31, 2023, up 6% from September 30, 2023, and the TCE ratio was 8.86%, up 90 basis points quarter-over-quarter.

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

(unaudited)

12/31/2023

 

9/30/2023

 

12/31/2022

TCE per share (1)

$13.76

 

$13.01

 

$12.96

TCE ratio (1)

8.86%

 

7.96%

 

8.29%

_____________________________________

(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 Pages 10 and 11.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, January 30, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter and full year ended December 31, 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 February 6, 2024, replay access code 4752295.

Non-GAAP Financial Metrics

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

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.13 billion in total assets as of December 31, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. 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, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to 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 and economic 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; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations. 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:

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

Cash and due from banks

$

1,928,967

 

 

$

2,500,323

 

 

(23

)%

 

$

506,776

 

 

281

%

Investment securities

 

2,408,971

 

 

 

2,260,837

 

 

7

%

 

 

2,243,195

 

 

7

%

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

 

61,000

 

 

 

60,433

 

 

1

%

 

 

61,761

 

 

(1

)%

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

 

3,408

 

 

 

19,502

 

 

(83

)%

 

 

49,245

 

 

(93

)%

Loans receivable

 

13,853,619

 

 

 

14,306,193

 

 

(3

)%

 

 

15,403,540

 

 

(10

)%

Allowance for credit losses

 

(158,694

)

 

 

(158,809

)

 

%

 

 

(162,359

)

 

(2

)%

Net loans receivable

 

13,694,925

 

 

 

14,147,384

 

 

(3

)%

 

 

15,241,181

 

 

(10

)%

Accrued interest receivable

 

61,720

 

 

 

60,665

 

 

2

%

 

 

55,460

 

 

11

%

Premises and equipment, net

 

50,611

 

 

 

51,764

 

 

(2

)%

 

 

46,859

 

 

8

%

Goodwill and intangible assets

 

468,385

 

 

 

468,832

 

 

%

 

 

470,176

 

 

%

Other assets

 

453,535

 

 

 

506,624

 

 

(10

)%

 

 

489,838

 

 

(7

)%

Total assets

$

19,131,522

 

 

$

20,076,364

 

 

(5

)%

 

$

19,164,491

 

 

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

14,753,753

 

 

$

15,739,859

 

 

(6

)%

 

$

15,738,801

 

 

(6

)%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

1,795,726

 

 

 

1,795,726

 

 

%

 

 

865,000

 

 

108

%

Subordinated debentures and convertible notes, net

 

108,269

 

 

 

107,949

 

 

%

 

 

323,713

 

 

(67

)%

Accrued interest payable

 

168,174

 

 

 

166,831

 

 

1

%

 

 

26,668

 

 

531

%

Other liabilities

 

184,357

 

 

 

235,575

 

 

(22

)%

 

 

190,981

 

 

(3

)%

Total liabilities

$

17,010,279

 

 

$

18,045,940

 

 

(6

)%

 

$

17,145,163

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

138

 

 

$

137

 

 

1

%

 

$

137

 

 

1

%

Additional paid-in capital

 

1,439,963

 

 

 

1,436,769

 

 

%

 

 

1,431,003

 

 

1

%

Retained earnings

 

1,150,547

 

 

 

1,140,870

 

 

1

%

 

 

1,083,712

 

 

6

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(204,738

)

 

 

(282,685

)

 

28

%

 

 

(230,857

)

 

11

%

Total stockholders’ equity

 

2,121,243

 

 

 

2,030,424

 

 

4

%

 

 

2,019,328

 

 

5

%

Total liabilities and stockholders’ equity

$

19,131,522

 

 

$

20,076,364

 

 

(5

)%

 

$

19,164,491

 

 

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

120,126,786

 

 

 

120,026,220

 

 

 

 

 

119,495,209

 

 

 

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

 

Twelve Months Ended

 

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

 

12/31/2023

 

12/31/2022

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

221,020

 

$

229,937

 

(4

)%

 

$

207,958

 

6

%

 

$

892,563

 

$

660,732

 

35

%

Interest on investment securities

 

18,398

 

 

17,006

 

8

%

 

 

14,758

 

25

%

 

 

66,063

 

 

52,220

 

27

%

Interest on cash and deposits at other banks

 

29,029

 

 

28,115

 

3

%

 

 

942

 

NM

 

 

 

87,361

 

 

1,295

 

NM

 

Interest on other investments and FHLB dividends

 

777

 

 

735

 

6

%

 

 

579

 

34

%

 

 

2,891

 

 

1,868

 

55

%

Total interest income

 

269,224

 

 

275,793

 

(2

)%

 

 

224,237

 

20

%

 

 

1,048,878

 

 

716,115

 

46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

121,305

 

 

117,854

 

3

%

 

 

63,276

 

92

%

 

 

441,231

 

 

114,839

 

284

%

Interest on borrowings

 

22,003

 

 

22,561

 

(2

)%

 

 

10,440

 

111

%

 

 

81,786

 

 

22,855

 

258

%

Total interest expense

 

143,308

 

 

140,415

 

2

%

 

 

73,716

 

94

%

 

 

523,017

 

 

137,694

 

280

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision for credit losses

 

125,916

 

 

135,378

 

(7

)%

 

 

150,521

 

(16

)%

 

 

525,861

 

 

578,421

 

(9

)%

Provision for credit losses

 

1,700

 

 

16,800

 

(90

)%

 

 

8,200

 

(79

)%

 

 

29,100

 

 

9,600

 

203

%

Net interest income after provision for credit losses

 

124,216

 

 

118,578

 

5

%

 

 

142,321

 

(13

)%

 

 

496,761

 

 

568,821

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,505

 

 

2,415

 

4

%

 

 

2,159

 

16

%

 

 

9,466

 

 

8,938

 

6

%

Net gains on sales of SBA loans

 

 

 

 

%

 

 

2,154

 

(100

)%

 

 

4,097

 

 

16,343

 

(75

)%

Other income and fees

 

6,775

 

 

5,890

 

15

%

 

 

7,797

 

(13

)%

 

 

32,014

 

 

26,116

 

23

%

Total noninterest income

 

9,280

 

 

8,305

 

12

%

 

 

12,110

 

(23

)%

 

 

45,577

 

 

51,397

 

(11

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

47,364

 

 

51,033

 

(7

)%

 

 

52,694

 

(10

)%

 

 

207,871

 

 

204,719

 

2

%

Occupancy

 

7,231

 

 

7,149

 

1

%

 

 

7,072

 

2

%

 

 

28,868

 

 

28,267

 

2

%

Furniture and equipment

 

5,302

 

 

5,625

 

(6

)%

 

 

5,045

 

5

%

 

 

21,378

 

 

19,434

 

10

%

Data processing and communications

 

2,976

 

 

2,891

 

3

%

 

 

2,860

 

4

%

 

 

11,606

 

 

10,683

 

9

%

FDIC assessment

 

3,141

 

 

3,683

 

(15

)%

 

 

1,596

 

97

%

 

 

13,296

 

 

6,248

 

113

%

FDIC special assessment

 

3,971

 

 

 

100

%

 

 

 

100

%

 

 

3,971

 

 

 

100

%

Earned interest credit

 

6,505

 

 

6,377

 

2

%

 

 

5,002

 

30

%

 

 

22,399

 

 

10,998

 

104

%

Restructuring costs

 

11,076

 

 

500

 

NM

 

 

 

 

100

%

 

 

11,576

 

 

 

100

%

Other noninterest expense

 

12,325

 

 

9,615

 

28

%

 

 

10,249

 

20

%

 

 

43,486

 

 

43,821

 

(1

)%

Total noninterest expense

 

99,891

 

 

86,873

 

15

%

 

 

84,518

 

18

%

 

 

364,451

 

 

324,170

 

12

%

Income before income taxes

 

33,605

 

 

40,010

 

(16

)%

 

 

69,913

 

(52

)%

 

 

177,887

 

 

296,048

 

(40

)%

Income tax provision

 

7,124

 

 

9,961

 

(28

)%

 

 

18,210

 

(61

)%

 

 

44,214

 

 

77,771

 

(43

)%

Net income

$

26,481

 

$

30,049

 

(12

)%

 

$

51,703

 

(49

)%

 

$

133,673

 

$

218,277

 

(39

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Diluted

$

0.22

 

$

0.25

 

 

 

$

0.43

 

 

 

$

1.11

 

$

1.81

 

 

Weighted Average Shares Outstanding - Diluted

 

120,761,112

 

 

120,374,618

 

 

 

 

120,102,665

 

 

 

 

120,393,257

 

 

120,472,345

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

For the Three Months Ended

 

For the Twelve Months Ended

Profitability measures (annualized):

12/31/2023

 

9/30/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

ROA

0.54

%

 

0.60

%

 

1.10

%

 

0.67

%

 

1.20

%

ROA excluding notable items (1)

0.78

%

 

0.61

%

 

1.10

%

 

0.73

%

 

1.20

%

ROE

5.17

%

 

5.78

%

 

10.35

%

 

6.48

%

 

10.73

%

ROE excluding notable items (1)

7.49

%

 

5.85

%

 

10.35

%

 

7.05

%

 

10.73

%

ROTCE (1)

6.71

%

 

7.47

%

 

13.54

%

 

8.39

%

 

13.97

%

ROTCE excluding notable items (1)

9.71

%

 

7.56

%

 

13.54

%

 

9.13

%

 

13.97

%

Net interest margin

2.70

%

 

2.83

%

 

3.36

%

 

2.81

%

 

3.36

%

Efficiency ratio (not annualized)

73.89

%

 

60.46

%

 

51.97

%

 

63.78

%

 

51.47

%

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

62.76

%

 

60.11

%

 

51.97

%

 

61.06

%

 

51.47

%

Noninterest expense / average assets

2.04

%

 

1.73

%

 

1.79

%

 

1.84

%

 

1.78

%

Noninterest expense / average assets, excluding notable items (1)

1.73

%

 

1.72

%

 

1.79

%

 

1.76

%

 

1.78

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

12/31/2023

 

9/30/2023

 

12/31/2022

 

 

 

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

$

14,052,953

 

$

221,020

 

6.24

%

 

$

14,550,106

 

$

229,937

 

6.27

%

 

$

15,393,843

 

$

207,958

 

5.36

%

Investment securities

 

2,283,613

 

 

18,398

 

3.20

%

 

 

2,275,133

 

 

17,006

 

2.97

%

 

 

2,254,678

 

 

14,758

 

2.60

%

Interest earning cash and deposits at

other banks

 

2,142,147

 

 

29,029

 

5.38

%

 

 

2,106,469

 

 

28,115

 

5.30

%

 

 

66,075

 

 

942

 

5.66

%

FHLB stock and other investments

 

47,587

 

 

777

��

6.48

%

 

 

47,316

 

 

735

 

6.16

%

 

 

48,002

 

 

579

 

4.79

%

Total interest earning assets

$

18,526,300

 

$

269,224

 

5.77

%

 

$

18,979,024

 

$

275,793

 

5.77

%

 

$

17,762,598

 

$

224,237

 

5.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and

savings

$

4,821,222

 

$

45,662

 

3.76

%

 

$

4,533,430

 

$

38,814

 

3.40

%

 

$

6,030,576

 

$

35,959

 

2.37

%

Time deposits

 

6,327,191

 

 

75,643

 

4.74

%

 

 

6,862,038

 

 

79,040

 

4.57

%

 

 

4,276,655

 

 

27,317

 

2.53

%

Total interest bearing deposits

 

11,148,413

 

 

121,305

 

4.32

%

 

 

11,395,468

 

 

117,854

 

4.10

%

 

 

10,307,231

 

 

63,276

 

2.44

%

FHLB and FRB borrowings

 

1,795,740

 

 

19,224

 

4.25

%

 

 

1,809,322

 

 

19,821

 

4.35

%

 

 

838,335

 

 

6,988

 

3.31

%

Subordinated debentures and convertible

notes

 

104,198

 

 

2,779

 

10.44

%

 

 

103,873

 

 

2,740

 

10.32

%

 

 

319,498

 

 

3,452

 

4.23

%

Total interest bearing liabilities

$

13,048,351

 

$

143,308

 

4.36

%

 

$

13,308,663

 

$

140,415

 

4.19

%

 

$

11,465,064

 

$

73,716

 

2.55

%

Noninterest bearing demand deposits

 

4,113,680

 

 

 

 

 

 

4,312,117

 

 

 

 

 

 

5,174,306

 

 

 

 

Total funding liabilities/cost of funds

$

17,162,031

 

 

 

3.31

%

 

$

17,620,780

 

 

 

3.16

%

 

$

16,639,370

 

 

 

1.76

%

Net interest income/net interest spread

 

 

$

125,916

 

1.41

%

 

 

 

$

135,378

 

1.58

%

 

 

 

$

150,521

 

2.46

%

Net interest margin

 

 

 

 

2.70

%

 

 

 

 

 

2.83

%

 

 

 

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,113,680

 

$

 

%

 

$

4,312,117

 

$

 

%

 

$

5,174,306

 

$

 

%

Interest bearing deposits

 

11,148,413

 

 

121,305

 

4.32

%

 

 

11,395,468

 

 

117,854

 

4.10

%

 

 

10,307,231

 

 

63,276

 

2.44

%

Total deposits

$

15,262,093

 

$

121,305

 

3.15

%

 

$

15,707,585

 

$

117,854

 

2.98

%

 

$

15,481,537

 

$

63,276

 

1.62

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Twelve Months Ended

 

12/31/2023

 

12/31/2022

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,732,166

 

$

892,563

 

6.06

%

 

$

14,634,627

 

$

660,732

 

4.51

%

Investment securities

 

2,262,840

 

 

66,063

 

2.92

%

 

 

2,415,621

 

 

52,220

 

2.16

%

Interest earning cash and deposits at

other banks

 

1,685,462

 

 

87,361

 

5.18

%

 

 

116,689

 

 

1,295

 

1.11

%

FHLB stock and other investments

 

47,249

 

 

2,891

 

6.12

%

 

 

59,624

 

 

1,868

 

3.13

%

Total interest earning assets

$

18,727,717

 

$

1,048,878

 

5.60

%

 

$

17,226,561

 

$

716,115

 

4.16

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and

savings

$

4,858,919

 

$

161,751

 

3.33

%

 

$

6,517,879

 

$

72,763

 

1.12

%

Time deposits

 

6,409,056

 

 

279,480

 

4.36

%

 

 

3,084,851

 

 

42,076

 

1.36

%

Total interest bearing deposits

 

11,267,975

 

 

441,231

 

3.92

%

 

 

9,602,730

 

 

114,839

 

1.20

%

FHLB and FRB borrowings

 

1,618,292

 

 

69,365

 

4.29

%

 

 

528,342

 

 

11,525

 

2.18

%

Subordinated debentures and convertible

notes

 

181,125

 

 

12,421

 

6.76

%

 

 

318,691

 

 

11,330

 

3.51

%

Total interest bearing liabilities

$

13,067,392

 

$

523,017

 

4.00

%

 

$

10,449,763

 

$

137,694

 

1.32

%

Noninterest bearing demand deposits

 

4,362,043

 

 

 

 

 

 

5,569,542

 

 

 

 

Total funding liabilities/cost of funds

$

17,429,435

 

 

 

3.00

%

 

$

16,019,305

 

 

 

0.86

%

Net interest income/net interest spread

 

 

$

525,861

 

1.60

%

 

 

 

$

578,421

 

2.84

%

Net interest margin

 

 

 

 

2.81

%

 

 

 

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,362,043

 

$

 

%

 

$

5,569,542

 

$

 

%

Interest bearing deposits

 

11,267,975

 

 

441,231

 

3.92

%

 

 

9,602,730

 

 

114,839

 

1.20

%

Total deposits

$

15,630,018

 

$

441,231

 

2.82

%

 

$

15,172,272

 

$

114,839

 

0.76

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

Twelve Months Ended

AVERAGE BALANCES:

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

 

12/31/2023

 

12/31/2022

 

% change

Loans, including loans held for sale

$

14,052,953

 

 

$

14,550,106

 

 

(3

)%

 

$

15,393,843

 

 

(9

)%

 

$

14,732,166

 

$

14,634,627

 

1

%

Investment securities

 

2,283,613

 

 

 

2,275,133

 

 

%

 

 

2,254,678

 

 

1

%

 

 

2,262,840

 

 

2,415,621

 

(6

)%

Interest earning cash and deposits at other banks

 

2,142,147

 

 

 

2,106,469

 

 

2

%

 

 

66,075

 

 

NM

 

 

 

1,685,462

 

 

116,689

 

NM

 

Interest earning assets

 

18,526,300

 

 

 

18,979,024

 

 

(2

)%

 

 

17,762,598

 

 

4

%

 

 

18,727,717

 

 

17,226,561

 

9

%

Goodwill and intangible assets

 

468,622

 

 

 

469,079

 

 

%

 

 

470,442

 

 

%

 

 

469,298

 

 

471,176

 

%

Total assets

 

19,600,942

 

 

 

20,059,304

 

 

(2

)%

 

 

18,863,726

 

 

4

%

 

 

19,806,163

 

 

18,231,609

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

4,113,680

 

 

 

4,312,117

 

 

(5

)%

 

 

5,174,217

 

 

(20

)%

 

 

4,362,043

 

 

5,569,534

 

(22

)%

Interest bearing deposits

 

11,148,413

 

 

 

11,395,468

 

 

(2

)%

 

 

10,307,231

 

 

8

%

 

 

11,267,975

 

 

9,602,730

 

17

%

Total deposits

 

15,262,093

 

 

 

15,707,585

 

 

(3

)%

 

 

15,481,537

 

 

(1

)%

 

 

15,630,180

 

 

15,172,272

 

3

%

Interest bearing liabilities

 

13,048,351

 

 

 

13,308,663

 

 

(2

)%

 

 

11,465,064

 

 

14

%

 

 

13,067,392

 

 

10,449,763

 

25

%

Stockholders’ equity

 

2,048,335

 

 

 

2,079,092

 

 

(1

)%

 

 

1,997,460

 

 

3

%

 

 

2,061,665

 

 

2,034,027

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

 

 

 

 

 

 

Commercial real estate (“CRE”) loans

$

8,797,884

 

 

$

8,972,886

 

 

(2

)%

 

$

9,414,580

 

 

(7

)%

 

 

 

 

 

 

Commercial and industrial (“C&I”) loans

 

4,135,044

 

 

 

4,450,341

 

 

(7

)%

 

 

5,109,532

 

 

(19

)%

 

 

 

 

 

 

Residential mortgage and other loans

 

920,691

 

 

 

882,966

 

 

4

%

 

 

879,428

 

 

5

%

 

 

 

 

 

 

Loans receivable

 

13,853,619

 

 

 

14,306,193

 

 

(3

)%

 

 

15,403,540

 

 

(10

)%

 

 

 

 

 

 

Allowance for credit losses

 

(158,694

)

 

 

(158,809

)

 

%

 

 

(162,359

)

 

(2

)%

 

 

 

 

 

 

Loans receivable, net

$

13,694,925

 

 

$

14,147,384

 

 

(3

)%

 

$

15,241,181

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

 

 

 

 

 

 

Multi-tenant retail

$

1,704,337

 

 

$

1,745,430

 

 

(2

)%

 

$

1,866,434

 

 

(9

)%

 

 

 

 

 

 

Hotels/motels

 

796,267

 

 

 

826,732

 

 

(4

)%

 

 

952,579

 

 

(16

)%

 

 

 

 

 

 

Gas stations and car washes

 

1,030,888

 

 

 

1,037,621

 

 

(1

)%

 

 

1,054,720

 

 

(2

)%

 

 

 

 

 

 

Mixed-use facilities

 

870,664

 

 

 

813,571

 

 

7

%

 

 

848,417

 

 

3

%

 

 

 

 

 

 

Industrial warehouses

 

1,226,780

 

 

 

1,254,643

 

 

(2

)%

 

 

1,294,893

 

 

(5

)%

 

 

 

 

 

 

Multifamily

 

1,226,384

 

 

 

1,234,934

 

 

(1

)%

 

 

1,295,644

 

 

(5

)%

 

 

 

 

 

 

Single-tenant retail

 

662,705

 

 

 

671,921

 

 

(1

)%

 

 

718,977

 

 

(8

)%

 

 

 

 

 

 

Office

 

401,821

 

 

 

454,695

 

 

(12

)%

 

 

473,459

 

 

(15

)%

 

 

 

 

 

 

All other

 

878,038

 

 

 

933,339

 

 

(6

)%

 

 

909,457

 

 

(3

)%

 

 

 

 

 

 

Total CRE loans

$

8,797,884

 

 

$

8,972,886

 

 

(2

)%

 

$

9,414,580

 

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

12/31/2023

 

9/30/2023

 

% change

 

12/31/2022

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,914,967

 

 

$

4,249,788

 

 

(8

)%

 

$

4,849,493

 

 

(19

)%

 

 

 

 

 

 

Money market, interest bearing demand, and savings

 

4,872,029

 

 

 

4,855,683

 

 

%

 

 

5,899,248

 

 

(17

)%

 

 

 

 

 

 

Time deposits

 

5,966,757

 

 

 

6,634,388

 

 

(10

)%

 

 

4,990,060

 

 

20

%

 

 

 

 

 

 

Total deposits

$

14,753,753

 

 

$

15,739,859

 

 

(6

)%

 

$

15,738,801

 

 

(6

)%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

CAPITAL & CAPITAL RATIOS:

12/31/2023

 

9/30/2023

 

12/31/2022

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,121,243

 

 

$

2,030,424

 

 

$

2,019,328

 

 

 

 

 

 

 

 

 

Total capital

$

2,120,157

 

 

$

2,105,754

 

 

$

2,041,319

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

12.28

%

 

 

11.67

%

 

 

10.55

%

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

12.96

%

 

 

12.32

%

 

 

11.15

%

 

 

 

 

 

 

 

 

Total capital ratio

 

13.92

%

 

 

13.23

%

 

 

11.97

%

 

 

 

 

 

 

 

 

Leverage ratio

 

10.11

%

 

 

9.83

%

 

 

10.15

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

15,230,302

 

 

$

15,912,792

 

 

$

17,049,410

 

 

 

 

 

 

 

 

 

Book value per common share

$

17.66

 

 

$

16.92

 

 

$

16.90

 

 

 

 

 

 

 

 

 

TCE per share (1)

$

13.76

 

 

$

13.01

 

 

$

12.96

 

 

 

 

 

 

 

 

 

TCE ratio (1)

 

8.86

%

 

 

7.96

%

 

 

8.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Twelve Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Balance at beginning of period

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

162,359

 

 

$

140,550

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

 

 

 

 

 

 

(407

)

 

 

 

 

 

(407

)

 

 

 

Provision for credit losses

 

1,700

 

 

 

16,800

 

 

 

8,900

 

 

 

1,700

 

 

 

8,200

 

 

 

29,100

 

 

 

9,600

 

Recoveries

 

306

 

 

 

2,938

 

 

 

1,531

 

 

 

387

 

 

 

3,222

 

 

 

5,162

 

 

 

24,598

 

Charge offs

 

(2,121

)

 

 

(33,925

)

 

 

(979

)

 

 

(495

)

 

 

(9,624

)

 

 

(37,520

)

 

 

(12,389

)

Balance at end of period

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

$

162,359

 

 

$

158,694

 

 

$

162,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

 

 

 

Allowance for unfunded loan commitments

$

3,843

 

 

$

3,143

 

 

$

3,081

 

 

$

2,971

 

 

$

1,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Provision for credit losses

$

1,700

 

 

$

16,800

 

 

$

8,900

 

 

$

1,700

 

 

$

8,200

 

 

$

29,100

 

 

$

9,600

 

Provision for unfunded loan commitments

(in noninterest expense)

 

700

 

 

 

62

 

 

 

110

 

 

 

1,620

 

 

 

120

 

 

 

2,492

 

 

 

250

 

Total provision expense

$

2,400

 

 

$

16,862

 

 

$

9,010

 

 

$

3,320

 

 

$

8,320

 

 

$

31,592

 

 

$

9,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

CRE loans

$

1,560

 

 

$

(2,227

)

 

$

438

 

 

$

(109

)

 

$

2,022

 

 

$

(338

)

 

$

(14,895

)

C&I loans

 

138

 

 

 

33,145

 

 

 

(1,091

)

 

 

196

 

 

 

4,174

 

 

 

32,388

 

 

 

2,299

 

Residential mortgage and other loans

 

117

 

 

 

69

 

 

 

101

 

 

 

21

 

 

 

206

 

 

 

308

 

 

 

387

 

Net loan charge offs (recoveries)

$

1,815

 

 

$

30,987

 

 

$

(552

)

 

$

108

 

 

$

6,402

 

 

$

32,358

 

 

$

(12,209

)

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

 

0.05

%

 

 

0.85

%

 

 

(0.01

)%

 

 

%

 

 

0.17

%

 

 

0.22

%

 

 

(0.08

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

NONPERFORMING ASSETS:

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

Loans on nonaccrual status (1)

$

45,204

 

 

$

39,081

 

 

$

61,252

 

 

$

78,861

 

 

$

49,687

 

Accruing delinquent loans past due 90 days or more

 

261

 

 

 

21,579

 

 

 

15,182

 

 

 

364

 

 

 

401

 

Accruing troubled debt restructured loans (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

16,931

 

Total nonperforming loans

 

45,465

 

 

 

60,660

 

 

 

76,434

 

 

 

79,225

 

 

 

67,019

 

Other real estate owned (“OREO”)

 

63

 

 

 

1,043

 

 

 

938

 

 

 

938

 

 

 

2,418

 

Total nonperforming assets

$

45,528

 

 

$

61,703

 

 

$

77,372

 

 

$

80,163

 

 

$

69,437

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.24

%

 

 

0.31

%

 

 

0.38

%

 

 

0.39

%

 

 

0.36

%

Nonperforming assets/loans receivable & OREO

 

0.33

%

 

 

0.43

%

 

 

0.52

%

 

 

0.53

%

 

 

0.45

%

Nonperforming assets/total capital

 

2.15

%

 

 

3.04

%

 

 

3.74

%

 

 

3.89

%

 

 

3.44

%

Nonperforming loans/loans receivable

 

0.33

%

 

 

0.42

%

 

 

0.51

%

 

 

0.53

%

 

 

0.44

%

Nonaccrual loans/loans receivable

 

0.33

%

 

 

0.27

%

 

 

0.41

%

 

 

0.52

%

 

 

0.32

%

Allowance for credit losses/loans receivable

 

1.15

%

 

 

1.11

%

 

 

1.16

%

 

 

1.09

%

 

 

1.05

%

Allowance for credit losses/nonperforming loans

 

349.05

%

 

 

261.80

%

 

 

226.33

%

 

 

206.43

%

 

 

242.26

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million, $11.9 million, $7.6 million, and $9.8 million, at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 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:

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

CRE loans

$

33,932

 

 

$

26,687

 

 

$

29,270

 

 

$

44,376

 

 

$

33,915

 

C&I loans

 

5,013

 

 

 

4,234

 

 

 

23,042

 

 

 

26,191

 

 

 

5,620

 

Residential mortgage and other loans

 

6,259

 

 

 

8,160

 

 

 

8,940

 

 

 

8,294

 

 

 

10,152

 

Total nonaccrual loans

$

45,204

 

 

$

39,081

 

 

$

61,252

 

 

$

78,861

 

 

$

49,687

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

30 - 59 days past due

$

2,833

 

$

2,906

 

$

9,295

 

$

7,662

 

$

7,049

60 - 89 days past due

 

1,289

 

 

506

 

 

178

 

 

249

 

 

2,243

Total accruing delinquent loans 30-89 days past due

$

4,122

 

$

3,412

 

$

9,473

 

$

7,911

 

$

9,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

CRE loans

$

2,160

 

$

611

 

$

7,339

 

$

3,652

 

$

4,115

C&I loans

 

1,643

 

 

1,168

 

 

990

 

 

419

 

 

3,300

Residential mortgage and other loans

 

319

 

 

1,633

 

 

1,144

 

 

3,840

 

 

1,877

Total accruing delinquent loans 30-89 days past due

$

4,122

 

$

3,412

 

$

9,473

 

$

7,911

 

$

9,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

Special mention loans

$

178,992

 

$

186,600

 

$

210,806

 

$

166,472

 

$

157,263

Substandard loans

 

143,449

 

 

174,161

 

 

134,203

 

 

138,224

 

 

104,073

Total criticized loans

$

322,441

 

$

360,761

 

$

345,009

 

$

304,696

 

$

261,336

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

 

Twelve Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

12/31/2023

 

9/30/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Average stockholders’ equity

$

2,048,335

 

 

$

2,079,092

 

 

$

1,997,460

 

 

$

2,061,665

 

 

$

2,034,027

 

Less: Average goodwill and core deposit intangible assets, net

 

(468,622

)

 

 

(469,079

)

 

 

(470,442

)

 

 

(469,298

)

 

 

(471,176

)

Average TCE

$

1,579,713

 

 

$

1,610,013

 

 

$

1,527,018

 

 

$

1,592,367

 

 

$

1,562,851

 

 

 

 

 

 

 

 

 

 

 

Net income

$

26,481

 

 

$

30,049

 

 

$

51,703

 

 

$

133,673

 

 

$

218,277

 

ROTCE (annualized)

 

6.71

%

 

 

7.47

%

 

 

13.54

%

 

 

8.39

%

 

 

13.97

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

12/31/2023

 

9/30/2023

 

12/31/2022

 

 

 

 

Total stockholders’ equity

$

2,121,243

 

 

$

2,030,424

 

 

$

2,019,328

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(468,385

)

 

 

(468,832

)

 

 

(470,176

)

 

 

 

 

TCE

$

1,652,858

 

 

$

1,561,592

 

 

$

1,549,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

19,131,522

 

 

$

20,076,364

 

 

$

19,164,491

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(468,385

)

 

 

(468,832

)

 

 

(470,176

)

 

 

 

 

Tangible assets

$

18,663,137

 

 

$

19,607,532

 

 

$

18,694,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio

 

8.86

%

 

 

7.96

%

 

 

8.29

%

 

 

 

 

Common shares outstanding

 

120,126,786

 

 

 

120,026,220

 

 

 

119,495,209

 

 

 

 

 

TCE per share

$

13.76

 

 

$

13.01

 

 

$

12.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS

12/31/2023

 

9/30/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Net income

$

26,481

 

 

$

30,049

 

 

$

51,703

 

 

$

133,673

 

 

$

218,277

 

 

 

 

 

 

 

 

 

 

 

Notable items:

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

3,971

 

 

 

 

 

 

 

 

 

3,971

 

 

 

 

Restructuring costs

 

11,076

 

 

 

500

 

 

 

 

 

 

11,576

 

 

 

 

Total notable items

 

15,047

 

 

 

500

 

 

 

 

 

 

15,547

 

 

 

 

Tax provision

 

3,190

 

 

 

124

 

 

 

 

 

 

3,864

 

 

 

 

Less: total notable items, net of tax provision

$

11,857

 

 

$

376

 

 

$

 

 

$

11,683

 

 

$

 

 

 

 

 

 

 

 

 

 

 

Net income excluding notable items

$

38,338

 

 

$

30,425

 

 

$

51,703

 

 

$

145,356

 

 

$

218,277

 

 

 

 

 

 

 

 

 

 

 

Diluted common shares

 

120,761,112

 

 

 

120,374,618

 

 

 

120,102,665

 

 

 

120,393,257

 

 

 

120,472,345

 

EPS excluding notable items

$

0.32

 

 

$

0.25

 

 

$

0.43

 

 

$

1.21

 

 

$

1.81

 

Average Assets

 

19,600,942

 

 

 

20,059,304

 

 

 

18,863,726

 

 

 

19,806,163

 

 

 

18,231,609

 

ROA excluding notable items

 

0.78

%

 

 

0.61

%

 

 

1.10

%

 

 

0.73

%

 

 

1.20

%

Average Equity

 

2,048,335

 

 

 

2,079,092

 

 

 

1,997,460

 

 

 

2,061,665

 

 

 

2,034,027

 

ROE excluding notable items

 

7.49

%

 

 

5.85

%

 

 

10.35

%

 

 

7.05

%

 

 

10.73

%

Average TCE

$

1,579,713

 

 

$

1,610,013

 

 

$

1,527,018

 

 

$

1,592,367

 

 

$

1,562,851

 

ROTCE excluding notable items

 

9.71

%

 

 

7.56

%

 

 

13.54

%

 

 

9.13

%

 

 

13.97

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

EFFICIENCY RATIOS EXCLUDING NOTABLE ITEMS

12/31/2023

 

9/30/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Noninterest expense

$

99,891

 

 

$

86,873

 

 

$

84,518

 

 

$

364,451

 

 

$

324,170

 

 

 

 

 

 

 

 

 

 

 

Less: notable items:

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

(3,971

)

 

 

 

 

 

 

 

 

(3,971

)

 

 

 

Restructuring costs

 

(11,076

)

 

 

(500

)

 

 

 

 

 

(11,576

)

 

 

 

Noninterest expense excluding notable items

$

84,844

 

 

$

86,373

 

 

$

84,518

 

 

$

348,904

 

 

$

324,170

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

135,196

 

 

$

143,683

 

 

$

162,631

 

 

$

571,438

 

 

$

629,818

 

Efficiency ratio excluding notable items

 

62.76

%

 

 

60.11

%

 

 

51.97

%

 

 

61.06

%

 

 

51.47

%

 

 

 

 

 

 

 

 

 

 

Average assets

 

19,600,942

 

 

 

20,059,304

 

 

 

18,863,726

 

 

 

19,806,163

 

 

 

18,231,609

 

Noninterest expense / average assets, excluding notable items

 

1.73

%

 

 

1.72

%

 

 

1.79

%

 

 

1.76

%

 

 

1.78

%

 

 

 

 

 

 

 

 

 

 

 

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