Regional banking company Hope Bancorp (NASDAQ: HOPE) announced better-than-expected revenue in Q3 2026, with sales up 11.5% year on year to $157.5 million. Its non-GAAP profit of $0.29 per share was in line with analysts’ consensus estimates.

Is now the time to buy HOPE? Find out in our full research report (it’s free for active Edge members).

StockStory’s take

Hope Bancorp’s third quarter results reflected continued momentum, with revenue growth supported by loan expansion, net interest margin improvement, and a more favorable deposit mix. Management attributed the quarter’s performance to increased commercial and residential mortgage lending, as well as higher noninterest income from customer fees and Small Business Administration (SBA) loan sales. CFO Julianna Balicka highlighted that “revenue growth outpaced expense growth,” allowing for sequential and year-over-year increases in pre-provision net revenue. The company also reported stable asset quality metrics, with nonperforming assets declining compared to prior periods.

Looking ahead, Hope Bancorp’s forward guidance is underpinned by the recent completion of its acquisition of SMBC MANUBANK’s Commercial Banking Unit, which management believes will enhance its commercial banking capabilities and funding base. CEO Kevin Kim emphasized that integrating MANUBANK’s operations and customer relationships will be a top priority, stating, “Our focus is on serving our expanded customer base, integrating our teams and operations, and building on the organic progress we have made.” The company plans to leverage new liquidity and a broader deposit base to support selective loan growth in a potentially higher interest rate environment.

Key insights from management’s remarks

Management pointed to several factors driving the quarter’s progress, including improvements in funding mix, operational efficiency, and the recent acquisition’s impact on growth and flexibility.

• Deposit mix shift: The company reduced its reliance on higher-cost time deposits in favor of non-maturity deposits, which lowered overall funding costs and contributed to improved net interest margin.
• Loan portfolio growth: Commercial and industrial lending, along with residential mortgage loans, were primary contributors to the increase in gross loans. Management noted a shift toward more variable-rate loans, which positions the company to benefit if interest rates rise further.
• Noninterest income gains: Higher customer-related fees and increased gains from SBA loan sales boosted noninterest income, offsetting a slight decrease in gains on investment securities sales.
• Cost discipline and efficiency: Operating leverage improved as revenue growth outpaced expenses, and the non-GAAP efficiency ratio declined, reflecting ongoing efforts to streamline operations and realize merger-related synergies.
• MANUBANK acquisition impact: The completed acquisition of MANUBANK’s Commercial Banking Unit added significant liquidity and deposit growth, with management highlighting an improved loan-to-deposit ratio and an opportunity to reduce higher-cost funding sources. The integration is expected to deliver phased cost savings and support future profitability.

Drivers of future performance

For the coming quarters, Hope Bancorp’s outlook is shaped by the integration of MANUBANK, shifts in interest rates, and disciplined management of funding and costs.

• MANUBANK integration: Successfully combining the acquired operations and realizing cost synergies are expected to be major drivers of profitability. Management anticipates phased cost savings, with the full benefits depending on the timing of core system conversions and process alignment.
• Interest rate sensitivity: A greater share of variable and hybrid-rate loans positions the company to capture higher yields if market rates increase. Management also expects its improved deposit mix to moderate funding cost increases in a rising rate environment.
• Funding strategy and flexibility: The additional liquidity from MANUBANK gives Hope Bancorp flexibility to reduce expensive wholesale borrowings and selectively grow its loan book. Management is focused on optimizing the balance sheet to maintain profitability even if interest rates remain elevated or rise further.

Catalysts in upcoming quarters

In the next few quarters, our analysts will focus on (1) the pace and effectiveness of MANUBANK integration, including cost savings and operational alignment; (2) shifts in the company’s loan and deposit mix as it adapts to interest rate changes; and (3) progress on reducing higher-cost funding sources. Additional attention will be paid to asset quality trends and the sustainability of noninterest income growth.

Hope Bancorp currently trades at $13.93, down from $14.12 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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