LOS ANGELES--(BUSINESS WIRE)--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 twelve months ended December 31, 2024. For the three months ended December 31, 2024, net income totaled $24.3 million, or $0.20 per diluted common share. This compares with net income of $24.2 million, or $0.20 per diluted common share, in the third quarter of 2024. For the full year ended December 31, 2024, net income totaled $99.6 million, or $0.82 per diluted common share. Excluding notable items(1), net income for the 2024 full year was $103.4 million, or $0.85 per diluted common share.
"For the 2024 fourth quarter, our pre-provision net revenue(2) increased 14% to $40.4 million, up from $35.4 million in the preceding third quarter. Quarter-over-quarter, our total revenue grew, led by strong growth in noninterest income, and our noninterest expense decreased, enhancing our efficiency," said Kevin S. Kim, Chairman, President and Chief Executive Officer. "Our asset quality improved with an 11% decrease in criticized loans and nonperforming assets down 13% since September 30, 2024.
"In 2024, we focused on strengthening our deposit base, reducing brokered deposits to 7% of total deposits as of December 31, 2024, down from 10% as of December 31, 2023. In the second half of 2024, loan growth inflected and loans receivable grew 1% on an annualized basis since June 30, 2024. With ample liquidity and a tangible common equity ratio(3) over 10% as of December 31, 2024, we are well positioned to support growth in the new year.
"We are in the final stages of preparing for the integration of Territorial Savings Bank as a division of Bank of Hope, and are looking forward to building upon Territorial's legacy. The addition of Territorial's low-cost core deposits and residential mortgage loans with pristine asset quality will be meaningful contributors to the combined company in 2025. We anticipate the pending merger with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank, will be completed during the first quarter of 2025, subject to regulatory approvals.
"We are heartbroken to see the unprecedented destruction that the wildfires have caused in the Greater Los Angeles area. As one of the largest independent banks headquartered in this great city, we are committed to taking a leadership role in addressing the immediate and rebuilding needs of those impacted by the fires. Our recent cash donation to the United Way of Greater Los Angeles Wildfire Response Fund underscores our unwavering commitment to the community. I am confident that the impacted areas will be rebuilt stronger and better," concluded Kim.
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(1) | Net income, excluding merger-related expenses, restructuring-related costs and gains, which included net gains on the sale of branches in Virginia, and the FDIC special assessment expense (also referred to collectively as the "notable items"), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12. | |
(2) | Pre-provision net revenue ("PPNR") is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12. | |
(3) | Tangible common equity ratio is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12. |
Operating Results for the 2024 Fourth Quarter
Revenue. 2024 fourth quarter revenue of $118.0 million grew $1.4 million, or 1%, from $116.6 million for the immediately preceding third quarter. Quarter-over-quarter growth in noninterest income more than offset the decrease in net interest income before provision for credit losses. Pre-provision net revenue ("PPNR"), which is revenue less noninterest expense, was $40.4 million in the 2024 fourth quarter, up $5.0 million, or 14%, from $35.4 million for the third quarter of 2024. Excluding notable items(4), fourth quarter 2024 PPNR of $40.0 million grew 9% quarter-over-quarter.
Net interest income and net interest margin. Net interest income before provision for credit losses for the 2024 fourth quarter totaled $102.1 million, a decrease of $2.7 million, or 3%, from $104.8 million in the immediately preceding third quarter. 2024 fourth quarter interest income of $226.6 million decreased 4% from $235.1 million in the immediately preceding third quarter. The quarter-over-quarter decrease in interest income reflected lower loan yields because of Federal Funds target rate cuts, $1.7 million of reversed interest income due to loans moving to nonaccrual status, as well as lower yields on and a lower volume of average interest earning cash and deposits at other banks. As of December 31, 2024, the upper Federal Funds target rate was 4.50%, down from a peak of 5.50% as of September 17, 2024.
The decrease in interest income was partially offset by lower interest expense, which totaled $124.5 million in the 2024 fourth quarter, a decrease of 4% from $130.3 million in the immediately preceding third quarter. The decrease in interest expense was primarily driven by a 21 basis point quarter-over-quarter reduction in the average cost of interest bearing deposits to 4.38%, down from 4.59% in the third quarter of 2024, reflecting the impact of the Federal Funds rate cuts. The average cost of total deposits for the 2024 fourth quarter decreased 12 basis points to 3.32%, down from 3.44% for the third quarter of 2024.
Net interest margin for the 2024 fourth quarter was 2.50%, down five basis points from 2.55% in the 2024 third quarter. Excluding the impact of the aforementioned reversed interest income, the net interest margin for the 2024 fourth quarter would have been 2.54%.
Noninterest income. Noninterest income for the 2024 fourth quarter increased to $15.9 million, up $4.0 million, or 34%, from $11.8 million in the immediately preceding third quarter. The Company recorded net gains on the sale of SBA loans of $3.1 million in the 2024 fourth quarter, compared with $2.7 million in the immediately preceding third quarter. In the fourth quarter of 2024, the Company sold $48.4 million of SBA loans, compared with $41.4 million in the third quarter of 2024. Other noninterest income in the 2024 fourth quarter included swap fee income of $1.4 million, up from only $21,000 in the 2024 third quarter, reflecting a higher level of customer activity. During the 2024 fourth quarter, the Company recognized a net gain of $1.0 million related to the sale of its two branches in Virginia, which closed on October 1, 2024.
Noninterest expense. The Company continues to closely manage expenses. Noninterest expense for the 2024 fourth quarter was $77.6 million, down $3.7 million, or 5%, from $81.3 million in the immediately preceding third quarter. Excluding notable items(5), noninterest expense for the 2024 fourth quarter was $77.0 million, down 4% from $79.8 million for the 2024 third quarter. The quarter-over-quarter decrease in noninterest expense was primarily driven by lower earned interest credit expense, which decreased $2.3 million, or 33%, from the immediately preceding third quarter due to the Federal Funds target rate cuts and a lower average balance of related deposits, as well as lower salaries and employee benefits expense, which decreased $2.1 million, or 5%, quarter-over-quarter to $42.0 million.
Tax rate. The effective tax rate for the 2024 fourth quarter was 20.0%, compared with 24.7% in the immediately preceding third quarter. The quarter-over-quarter change in the effective tax rate reflected the impact of a solar tax credit investment that the Company made during the fourth quarter of 2024. For the twelve months ended December 31, 2024, the effective tax rate was 25.1%, compared with 24.9% for the 2023 full year.
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(4) | PPNR, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 to 12. Collectively, notable items comprise merger-related expenses, restructuring-related costs and gains, which also includes a net gain on the sale of branches in Virginia, and the FDIC special assessment expense. | |
(5) | Noninterest expense, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 to 12. |
Balance Sheet Summary
Cash and investment securities. At December 31, 2024, cash and due from banks totaled $458.2 million, compared with $680.9 million at September 30, 2024, and $1.93 billion at December 31, 2023. The year-over-year change primarily reflected the payoff of the Company's Bank Term Funding Program ("BTFP") borrowings in March and April of 2024. Investment securities totaled $2.08 billion at December 31, 2024, $2.18 billion at September 30, 2024, and $2.41 billion at December 31, 2023.
Loans. At December 31, 2024, loans receivable, which excludes loans held for sale, were stable quarter-over-quarter at $13.62 billion. Compared with September 30, 2024, commercial and industrial loans increased 2% quarter-over-quarter and residential mortgage loans increased 3%, partially offset by a 1% decrease in commercial real estate loans. 2024 fourth quarter average gross loans increased 0.4% quarter-over-quarter, or 2% on an annualized basis, from the 2024 third quarter.
The following table sets forth the loan portfolio composition at December 31, 2024, September 30, 2024, and December 31, 2023:
(dollars in thousands) (unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||||||||
Balance | Percentage | Balance | Percentage | Balance | Percentage | ||||||||||||
Commercial real estate ("CRE") loans | $ | 8,527,008 | 62.6 | % | $ | 8,630,757 | 63.3 | % | $ | 8,797,884 | 63.6 | % | |||||
Commercial and industrial ("C&I") loans | 3,967,596 | 29.1 | % | 3,901,368 | 28.6 | % | 4,135,044 | 29.8 | % | ||||||||
Residential mortgage and other loans | 1,123,668 | 8.2 | % | 1,085,863 | 7.9 | % | 920,691 | 6.6 | % | ||||||||
Loans receivable | 13,618,272 | 99.9 | % | 13,617,988 | 99.8 | % | 13,853,619 | 100.0 | % | ||||||||
Loans held for sale | 14,491 | 0.1 | % | 25,714 | 0.2 | % | 3,408 | - | % | ||||||||
Gross loans | $ | 13,632,763 | 100.0 | % | $ | 13,643,702 | 100.0 | % | $ | 13,857,027 | 100.0 | % | |||||
Deposits. Total deposits of $14.33 billion at December 31, 2024, decreased $402.0 million, or 3%, from $14.73 billion at September 30, 2024. This decrease included $128.1 million of deposits sold in connection with the Company's sale of its Virginia branches. In addition, the quarter-over-quarter decrease in deposits reflected typical fourth quarter outflows of noninterest bearing commercial deposits in the residential mortgage industry, and intentional run-off of higher-cost deposits.
The following table sets forth the deposit composition at December 31, 2024, September 30, 2024, and December 31, 2023:
(dollars in thousands) (unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||||||||
Balance | Percentage | Balance | Percentage | Balance | Percentage | ||||||||||||
Noninterest bearing demand deposits | $ | 3,377,950 | 23.6 | % | $ | 3,722,985 | 25.3 | % | $ | 3,914,967 | 26.5 | % | |||||
Money market, interest bearing demand, and savings deposits | 5,175,735 | 36.1 | % | 5,013,305 | 34.0 | % | 4,872,029 | 33.0 | % | ||||||||
Time deposits | 5,773,804 | 40.3 | % | 5,993,208 | 40.7 | % | 5,966,757 | 40.5 | % | ||||||||
Total deposits | $ | 14,327,489 | 100.0 | % | $ | 14,729,498 | 100.0 | % | $ | 14,753,753 | 100.0 | % | |||||
Gross loan-to-deposit ratio | 95.2 | % | 92.6 | % | 93.9 | % | |||||||||||
Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $239.0 million at December 31, 2024, compared with $100.0 million at September 30, 2024, and $1.80 billion at December 31, 2023. The year-over-year change primarily reflected the payoff of the Company's BTFP borrowings in March and April 2024.
Credit Quality and Allowance for Credit Losses
Nonperforming assets. Nonperforming assets were $90.8 million, or 0.53% of total assets, at December 31, 2024, down 13% from $103.8 million, or 0.60% of total assets, at September 30, 2024.
The following table sets forth the components of nonperforming assets at December 31, 2024, September 30, 2024, and December 31, 2023:
(dollars in thousands) (unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||
Loans on nonaccrual status (1) | $ | 90,564 | $ | 103,602 | $ | 45,204 | |||||
Accruing delinquent loans past due 90 days or more | 229 | 226 | 261 | ||||||||
Total nonperforming loans | 90,793 | 103,828 | 45,465 | ||||||||
Other real estate owned | - | - | 63 | ||||||||
Total nonperforming assets | $ | 90,793 | $ | 103,828 | $ | 45,528 | |||||
Nonperforming assets/total assets | 0.53 | % | 0.60 | % | 0.24 | % | |||||
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(1) | Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.8 million, $13.1 million and $11.4 million at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. | |
Criticized loans. Criticized loans decreased $55.8 million, or 11%, to $450.0 million at December 31, 2024, down from $505.7 million at September 30, 2024. The criticized loans to total loans ratio improved to 3.30% at December 31, 2024, down from 3.71% at September 30, 2024. The decrease reflected payoffs, workouts and note sales of problem loans during the quarter.
Net charge offs and provision for credit losses. The Company recorded net charge offs of $12.8 million in the 2024 fourth quarter, equivalent to 0.38%, annualized, of average loans. This compares with net charge offs of $5.7 million, or 0.17%, annualized, of average loans in the immediately preceding third quarter. The quarter-over-quarter change in net charge offs reflected the problem loan resolution activity in the fourth quarter. The full-year 2024 net charge off ratio was 0.19%, compared with 0.22% for the 2023 full year.
The following table sets forth net charge offs and annualized net charge off ratios for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, and the full years ended December 31, 2024, and December 31, 2023:
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||
(dollars in thousands) (unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||
Net charge offs | $ | 12,843 | $ | 5,749 | $ | 1,815 | $ | 26,567 | $ | 32,358 | |||||||||
Annualized net charge offs/average loans | 0.38 | % | 0.17 | % | 0.05 | % | 0.19 | % | 0.22 | % | |||||||||
For the 2024 fourth quarter, the Company recorded a provision for credit losses of $10.0 million. This compares with a provision for credit losses of $3.3 million in the immediately preceding third quarter. The quarter-over-quarter change in the provision for credit losses primarily reflected net charge offs in the fourth quarter of 2024. For the full year 2024, the Company recorded a provision for credit losses of $17.3 million, compared with a provision for credit losses of $31.6 million for the full year 2023.
Allowance for credit losses. The allowance for credit losses totaled $150.5 million at December 31, 2024, compared with $153.3 million at September 30, 2024. The allowance coverage ratio was 1.11% of loans receivable at December 31, 2024, compared with 1.13% at September 30, 2024. The change in the allowance coverage ratio was due to a decrease in quantitative and individually evaluated loan reserves, which reflected, in part, the quarter-over-quarter reduction in criticized loans, partially offset by an increase in qualitative reserves.
The following table sets forth the allowance for credit losses and the coverage ratios at December 31, 2024, September 30, 2024, and December 31, 2023:
(dollars in thousands) (unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||
Allowance for credit losses | $ | 150,527 | $ | 153,270 | $ | 158,694 | |||||
Allowance for credit losses/loans receivable | 1.11 | % | 1.13 | % | 1.15 | % | |||||
Capital
At December 31, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a "well-capitalized" financial institution. The following table sets forth the capital ratios for the Company at December 31, 2024, September 30, 2024, and December 31, 2023:
(unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | Minimum Guideline for "Well-Capitalized" | |||||||
Common Equity Tier 1 Capital Ratio | 13.06 | % | 13.07 | % | 12.28 | % | 6.50 | % | |||
Tier 1 Capital Ratio | 13.79 | % | 13.79 | % | 12.96 | % | 8.00 | % | |||
Total Capital Ratio | 14.78 | % | 14.82 | % | 13.92 | % | 10.00 | % | |||
Leverage Ratio | 11.78 | % | 11.61 | % | 10.11 | % | 5.00 | % | |||
At December 31, 2024, total stockholders' equity was $2.13 billion, or $17.68 per common share, compared with $2.17 billion, or $17.97 per common share, at September 30, 2024. Tangible common equity ("TCE") per share(6) was $13.81 at December 31, 2024, compared with $14.10 at September 30, 2024. The quarter-over-quarter change in stockholders' equity included a $45.1 million increase in accumulated other comprehensive losses, which was impacted by market interest rates. The change in accumulated other comprehensive losses impacted book value and tangible book value by $(0.37) per share during the fourth quarter of 2024. The TCE ratio(6) was 10.05% at December 31, 2024, down 3 basis points from 10.08% at September 30, 2024, and up 119 basis points from December 31, 2023.
The following table sets forth the TCE per share and the TCE ratio at December 31, 2024, September 30, 2024, and December 31, 2023:
(unaudited) | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||
TCE per share | $ | 13.81 | $ | 14.10 | $ | 13.76 | |||||
TCE ratio | 10.05 | % | 10.08 | % | 8.86 | % | |||||
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(6) | 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 through 12. |
Investor Conference Call
The Company previously announced that it will host an investor conference call on Monday, January 27, 2025, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter ended December 31, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the "Hope Bancorp Call." A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp's website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp's website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp's website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 3, 2025, replay access code 6066063.
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, PPNR, PPNR 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, and efficiency ratio 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 through 12.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.05 billion in total assets as of December 31, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 46 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Additional Information About the Merger and Where to Find It
In connection with the pending merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the U.S. Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4, which included a Proxy Statement/Prospectus and which was declared effective by the SEC on August 20, 2024, as further supplemented by Hope Bancorp on September 12, 2024. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information about the pending merger. Territorial Bancorp shareholders are able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC's Internet site (www.sec.gov). Territorial Bancorp shareholders are also able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.
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. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "intends," "plans," "estimates" or similar expressions. With respect to any such forward-looking statements, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp's actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the pending transaction with Territorial Bancorp is subject to regulatory approvals and other customary closing conditions. There is no assurance that such conditions will be met or that the pending merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible renewed deterioration in economic conditions in Hope Bancorp's areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp's allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the pending transaction could have adverse effects on the market price of the common stock of Hope Bancorp; diversion of management's attention from ongoing business operations and opportunities; and risks from natural disasters. For additional information concerning these and other risk factors, see Hope Bancorp's most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Hope Bancorp, Inc. | |||||||||||||||||
Selected Financial Data | |||||||||||||||||
Unaudited (dollars in thousands, except share data) | |||||||||||||||||
Assets: | 12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | ||||||||||||
Cash and due from banks | $ | 458,199 | $ | 680,857 | (33 | )% | $ | 1,928,967 | (76 | )% | |||||||
Investment securities | 2,075,628 | 2,177,301 | (5 | )% | 2,408,971 | (14 | )% | ||||||||||
Federal Home Loan Bank ("FHLB") stock and other investments | 57,196 | 57,158 | - | % | 61,000 | (6 | )% | ||||||||||
Gross loans, including loans held for sale | 13,632,763 | 13,643,702 | - | % | 13,857,027 | (2 | )% | ||||||||||
Allowance for credit losses | (150,527 | ) | (153,270 | ) | (2 | )% | (158,694 | ) | (5 | )% | |||||||
Accrued interest receivable | 51,169 | 51,898 | (1 | )% | 61,720 | (17 | )% | ||||||||||
Premises and equipment, net | 51,759 | 51,543 | - | % | 50,611 | 2 | % | ||||||||||
Goodwill and intangible assets | 466,781 | 467,182 | - | % | 468,385 | - | % | ||||||||||
Other assets | 411,040 | 377,818 | 9 | % | 453,535 | (9 | )% | ||||||||||
Total assets | $ | 17,054,008 | $ | 17,354,189 | (2 | )% | $ | 19,131,522 | (11 | )% | |||||||
Liabilities: | |||||||||||||||||
Deposits | $ | 14,327,489 | $ | 14,729,498 | (3 | )% | $ | 14,753,753 | (3 | )% | |||||||
FHLB and Federal Reserve Bank ("FRB") borrowings | 239,000 | 100,000 | 139 | % | 1,795,726 | (87 | )% | ||||||||||
Subordinated debentures and convertible notes, net | 109,584 | 109,249 | - | % | 108,269 | 1 | % | ||||||||||
Accrued interest payable | 93,784 | 107,017 | (12 | )% | 168,174 | (44 | )% | ||||||||||
Other liabilities | 149,646 | 138,640 | 8 | % | 184,357 | (19 | )% | ||||||||||
Total liabilities | $ | 14,919,503 | $ | 15,184,404 | (2 | )% | $ | 17,010,279 | (12 | )% | |||||||
Stockholders' Equity: | |||||||||||||||||
Common stock, $0.001 par value | $ | 138 | $ | 138 | - | % | $ | 138 | - | % | |||||||
Additional paid-in capital | 1,445,373 | 1,442,993 | - | % | 1,439,963 | - | % | ||||||||||
Retained earnings | 1,181,533 | 1,174,100 | 1 | % | 1,150,547 | 3 | % | ||||||||||
Treasury stock, at cost | (264,667 | ) | (264,667 | ) | - | % | (264,667 | ) | - | % | |||||||
Accumulated other comprehensive loss, net | (227,872 | ) | (182,779 | ) | (25 | )% | (204,738 | ) | (11 | )% | |||||||
Total stockholders' equity | 2,134,505 | 2,169,785 | (2 | )% | 2,121,243 | 1 | % | ||||||||||
Total liabilities and stockholders' equity | $ | 17,054,008 | $ | 17,354,189 | (2 | )% | $ | 19,131,522 | (11 | )% | |||||||
Common stock shares - authorized | 300,000,000 | 300,000,000 | 150,000,000 | ||||||||||||||
Common stock shares - outstanding | 120,755,658 | 120,737,908 | 120,126,786 | ||||||||||||||
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 | ||||||||||||||||||||||||
12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | 12/31/2024 | 12/31/2023 | % change | ||||||||||||||||||
Interest and fees on loans | $ | 203,828 | $ | 210,022 | (3 | )% | $ | 221,020 | (8 | )% | $ | 837,159 | $ | 892,563 | (6 | )% | |||||||||
Interest on investment securities | 16,930 | 16,741 | 1 | % | 18,398 | (8 | )% | 68,549 | 66,063 | 4 | % | ||||||||||||||
Interest on cash and deposits at other banks | 4,694 | 7,507 | (37 | )% | 29,029 | (84 | )% | 44,668 | 87,361 | (49 | )% | ||||||||||||||
Interest on other investments and FHLB dividends | 1,169 | 814 | 44 | % | 777 | 50 | % | 3,604 | 2,891 | 25 | % | ||||||||||||||
Total interest income | 226,621 | 235,084 | (4 | )% | 269,224 | (16 | )% | 953,980 | 1,048,878 | (9 | )% | ||||||||||||||
Interest on deposits | 121,645 | 127,193 | (4 | )% | 121,305 | - | % | 495,448 | 441,231 | 12 | % | ||||||||||||||
Interest on borrowings | 2,841 | 3,082 | (8 | )% | 22,003 | (87 | )% | 30,681 | 81,786 | (62 | )% | ||||||||||||||
Total interest expense | 124,486 | 130,275 | (4 | )% | 143,308 | (13 | )% | 526,129 | 523,017 | 1 | % | ||||||||||||||
Net interest income before provision | 102,135 | 104,809 | (3 | )% | 125,916 | (19 | )% | 427,851 | 525,861 | (19 | )% | ||||||||||||||
Provision for credit losses | 10,000 | 3,280 | 205 | % | 2,400 | 317 | % | 17,280 | 31,592 | (45 | )% | ||||||||||||||
Net interest income after provision | 92,135 | 101,529 | (9 | )% | 123,516 | (25 | )% | 410,571 | 494,269 | (17 | )% | ||||||||||||||
Service fees on deposit accounts | 2,809 | 2,651 | 6 | % | 2,505 | 12 | % | 10,728 | 9,466 | 13 | % | ||||||||||||||
Net gains on sales of SBA loans | 3,063 | 2,722 | 13 | % | - | 100 | % | 7,765 | 4,097 | 90 | % | ||||||||||||||
Net gains (losses) on sales of securities available for sale | 837 | (326 | ) | N/A | - | 100 | % | 936 | - | 100 | % | ||||||||||||||
Net gain on branch sales | 1,006 | - | 100 | % | - | 100 | % | 1,006 | - | 100 | % | ||||||||||||||
Other income and fees | 8,166 | 6,792 | 20 | % | 6,775 | 21 | % | 26,642 | 32,014 | (17 | )% | ||||||||||||||
Total noninterest income | 15,881 | 11,839 | 34 | % | 9,280 | 71 | % | 47,077 | 45,577 | 3 | % | ||||||||||||||
Salaries and employee benefits | 42,016 | 44,160 | (5 | )% | 47,364 | (11 | )% | 177,860 | 207,871 | (14 | )% | ||||||||||||||
Occupancy | 6,837 | 6,940 | (1 | )% | 7,231 | (5 | )% | 27,469 | 28,868 | (5 | )% | ||||||||||||||
Furniture and equipment | 5,436 | 5,341 | 2 | % | 5,302 | 3 | % | 21,592 | 21,378 | 1 | % | ||||||||||||||
Data processing and communications | 2,961 | 3,112 | (5 | )% | 2,976 | (1 | )% | 12,060 | 11,606 | 4 | % | ||||||||||||||
FDIC assessment | 2,684 | 2,200 | 22 | % | 3,141 | (15 | )% | 10,813 | 13,296 | (19 | )% | ||||||||||||||
FDIC special assessment | - | - | - | % | 3,971 | (100 | )% | 691 | 3,971 | (83 | )% | ||||||||||||||
Earned interest credit | 4,605 | 6,869 | (33 | )% | 6,505 | (29 | )% | 23,447 | 22,399 | 5 | % | ||||||||||||||
Restructuring-related (reversals) costs | (152 | ) | 197 | N/A | 11,076 | N/A | 1,023 | 11,576 | (91 | )% | |||||||||||||||
Merger-related costs | 735 | 1,236 | (41 | )% | - | 100 | % | 4,604 | - | 100 | % | ||||||||||||||
Other noninterest expense | 12,468 | 11,213 | 11 | % | 11,625 | 7 | % | 45,125 | 40,994 | 10 | % | ||||||||||||||
Total noninterest expense | 77,590 | 81,268 | (5 | )% | 99,191 | (22 | )% | 324,684 | 361,959 | (10 | )% | ||||||||||||||
Income before income taxes | 30,426 | 32,100 | (5 | )% | 33,605 | (9 | )% | 132,964 | 177,887 | (25 | )% | ||||||||||||||
Income tax provision | 6,089 | 7,941 | (23 | )% | 7,124 | (15 | )% | 33,334 | 44,214 | (25 | )% | ||||||||||||||
Net income | $ | 24,337 | $ | 24,159 | 1 | % | $ | 26,481 | (8 | )% | $ | 99,630 | $ | 133,673 | (25 | )% | |||||||||
Earnings per common share - diluted | $ | 0.20 | $ | 0.20 | $ | 0.22 | $ | 0.82 | $ | 1.11 | |||||||||||||||
Weighted average shares outstanding - diluted | 121,401,285 | 121,159,977 | 120,761,112 | 121,108,594 | 120,393,257 | ||||||||||||||||||||
Hope Bancorp, Inc. | ||||||||||||||
Selected Financial Data | ||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | ||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||
Profitability measures (annualized): | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | |||||||||
Return on average assets ("ROA") | 0.57 | % | 0.56 | % | 0.54 | % | 0.56 | % | 0.67 | % | ||||
ROA excluding notable items (1) | 0.56 | % | 0.58 | % | 0.76 | % | 0.58 | % | 0.73 | % | ||||
Return on average equity ("ROE") | 4.51 | % | 4.52 | % | 5.17 | % | 4.68 | % | 6.48 | % | ||||
ROE excluding notable items (1) | 4.46 | % | 4.71 | % | 7.25 | % | 4.85 | % | 7.02 | % | ||||
Return on average tangible common equity ("ROTCE") (1) | 5.76 | % | 5.78 | % | 6.71 | % | 5.99 | % | 8.39 | % | ||||
ROTCE excluding notable items (1) | 5.69 | % | 6.02 | % | 9.39 | % | 6.22 | % | 9.08 | % | ||||
Net interest margin | 2.50 | % | 2.55 | % | 2.70 | % | 2.55 | % | 2.81 | % | ||||
Efficiency ratio (not annualized) | 65.75 | % | 69.67 | % | 73.37 | % | 68.36 | % | 63.34 | % | ||||
Efficiency ratio excluding notable items (not annualized) (1) | 65.81 | % | 68.44 | % | 62.24 | % | 67.18 | % | 60.62 | % | ||||
| (1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12. | ||||||||||||||
Hope Bancorp, Inc. | ||||||||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||||||||
Unaudited (dollars in thousands) | ||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||
12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||||||||||||||||||
Interest | Annualized | Interest | Annualized | Interest | Annualized | |||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 13,626,965 | $ | 203,828 | 5.95 | % | $ | 13,574,539 | $ | 210,022 | 6.16 | % | $ | 14,052,953 | $ | 221,020 | 6.24 | % | ||||||||
Investment securities | 2,177,613 | 16,930 | 3.09 | % | 2,182,847 | 16,741 | 3.05 | % | 2,283,613 | 18,398 | 3.20 | % | ||||||||||||||
Interest earning cash and deposits at other banks | 416,467 | 4,694 | 4.48 | % | 570,754 | 7,507 | 5.23 | % | 2,142,147 | 29,029 | 5.38 | % | ||||||||||||||
FHLB stock and other investments | 49,388 | 1,169 | 9.42 | % | 48,956 | 814 | 6.61 | % | 47,587 | 777 | 6.48 | % | ||||||||||||||
Total interest earning assets | $ | 16,270,433 | $ | 226,621 | 5.54 | % | $ | 16,377,096 | $ | 235,084 | 5.71 | % | $ | 18,526,300 | $ | 269,224 | 5.77 | % | ||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Money market, interest bearing demand and savings | $ | 5,187,715 | $ | 50,510 | 3.87 | % | $ | 4,963,727 | $ | 50,707 | 4.06 | % | $ | 4,821,222 | $ | 45,662 | 3.76 | % | ||||||||
Time deposits | 5,856,439 | 71,135 | 4.83 | % | 6,053,924 | 76,486 | 5.03 | % | 6,327,191 | 75,643 | 4.74 | % | ||||||||||||||
Total interest bearing deposits | 11,044,154 | 121,645 | 4.38 | % | 11,017,651 | 127,193 | 4.59 | % | 11,148,413 | 121,305 | 4.32 | % | ||||||||||||||
FHLB and FRB borrowings | 113,533 | 248 | 0.87 | % | 120,326 | 329 | 1.09 | % | 1,795,740 | 19,224 | 4.25 | % | ||||||||||||||
Subordinated debentures and convertible notes | 105,482 | 2,593 | 9.62 | % | 105,152 | 2,753 | 10.24 | % | 104,198 | 2,779 | 10.44 | % | ||||||||||||||
Total interest bearing liabilities | $ | 11,263,169 | $ | 124,486 | 4.40 | % | $ | 11,243,129 | $ | 130,275 | 4.61 | % | $ | 13,048,351 | $ | 143,308 | 4.36 | % | ||||||||
Noninterest bearing demand deposits | 3,546,613 |
| 3,704,088 | 4,113,680 | ||||||||||||||||||||||
Total funding liabilities/cost of funds | $ | 14,809,782 | 3.34 | % | $ | 14,947,217 | 3.47 | % | $ | 17,162,031 | 3.31 | % | ||||||||||||||
Net interest income/net interest spread | $ | 102,135 | 1.14 | % | $ | 104,809 | 1.10 | % | $ | 125,916 | 1.41 | % | ||||||||||||||
Net interest margin | 2.50 | % | 2.55 | % | 2.70 | % | ||||||||||||||||||||
Cost of deposits: | ||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,546,613 | $ | - | - | % | $ | 3,704,088 | $ | - | - | % | $ | 4,113,680 | $ | - | - | % | ||||||||
Interest bearing deposits | 11,044,154 | 121,645 | 4.38 | % | 11,017,651 | 127,193 | 4.59 | % | 11,148,413 | 121,305 | 4.32 | % | ||||||||||||||
Total deposits | $ | 14,590,767 | $ | 121,645 | 3.32 | % | $ | 14,721,739 | $ | 127,193 | 3.44 | % | $ | 15,262,093 | $ | 121,305 | 3.15 | % | ||||||||
Hope Bancorp, Inc. | |||||||||||||||||
Selected Financial Data | |||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||
Twelve Months Ended | |||||||||||||||||
12/31/2024 | 12/31/2023 | ||||||||||||||||
Interest | Annualized | Interest | Annualized | ||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||
INTEREST EARNING ASSETS: | |||||||||||||||||
Loans, including loans held for sale | $ | 13,634,728 | $ | 837,159 | 6.14 | % | $ | 14,732,166 | $ | 892,563 | 6.06 | % | |||||
Investment securities | 2,213,068 | 68,549 | 3.10 | % | 2,262,840 | 66,063 | 2.92 | % | |||||||||
Interest earning cash and deposits at other banks | 856,768 | 44,668 | 5.21 | % | 1,685,462 | 87,361 | 5.18 | % | |||||||||
FHLB stock and other investments | 48,738 | 3,604 | 7.39 | % | 47,249 | 2,891 | 6.12 | % | |||||||||
Total interest earning assets | $ | 16,753,302 | $ | 953,980 | 5.69 | % | $ | 18,727,717 | $ | 1,048,878 | 5.60 | % | |||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||
Deposits: | |||||||||||||||||
Money market, interest bearing demand and savings | $ | 5,043,411 | $ | 200,070 | 3.97 | % | $ | 4,858,919 | $ | 161,751 | 3.33 | % | |||||
Time deposits | 5,954,272 | 295,378 | 4.96 | % | 6,409,056 | 279,480 | 4.36 | % | |||||||||
Total interest bearing deposits | 10,997,683 | 495,448 | 4.51 | % | 11,267,975 | 441,231 | 3.92 | % | |||||||||
FHLB and FRB borrowings | 531,869 | 19,860 | 3.73 | % | 1,618,292 | 69,365 | 4.29 | % | |||||||||
Subordinated debentures and convertible notes | 104,989 | 10,821 | 10.14 | % | 181,125 | 12,421 | 6.76 | % | |||||||||
Total interest bearing liabilities | $ | 11,634,541 | $ | 526,129 | 4.52 | % | $ | 13,067,392 | $ | 523,017 | 4.00 | % | |||||
Noninterest bearing demand deposits | 3,679,947 | 4,362,043 | |||||||||||||||
Total funding liabilities/cost of funds | $ | 15,314,488 | 3.44 | % | $ | 17,429,435 | 3.00 | % | |||||||||
Net interest income/net interest spread | $ | 427,851 | 1.17 | % | $ | 525,861 | 1.60 | % | |||||||||
Net interest margin | 2.55 | % | 2.81 | % | |||||||||||||
Cost of deposits: | |||||||||||||||||
Noninterest bearing demand deposits | $ | 3,679,947 | $ | - | - | % | $ | 4,362,043 | $ | - | - | % | |||||
Interest bearing deposits | 10,997,683 | 495,448 | 4.51 | % | 11,267,975 | 441,231 | 3.92 | % | |||||||||
Total deposits | $ | 14,677,630 | $ | 495,448 | 3.38 | % | $ | 15,630,018 | $ | 441,231 | 2.82 | % | |||||
Hope Bancorp, Inc. | |||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
AVERAGE BALANCES: | 12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | 12/31/2024 | 12/31/2023 | % change | |||||||||||||||
Gross loans, including loans held for sale | $ | 13,626,965 | $ | 13,574,539 | - | % | $ | 14,052,953 | (3 | )% | $ | 13,634,728 | $ | 14,732,166 | (7 | )% | |||||||
Investment securities | 2,177,613 | 2,182,847 | - | % | 2,283,613 | (5 | )% | 2,213,068 | 2,262,840 | (2 | )% | ||||||||||||
Interest earning cash and deposits at other banks | 416,467 | 570,754 | (27 | )% | 2,142,147 | (81 | )% | 856,768 | 1,685,462 | (49 | )% | ||||||||||||
Interest earning assets | 16,270,433 | 16,377,096 | (1 | )% | 18,526,300 | (12 | )% | 16,753,302 | 18,727,717 | (11 | )% | ||||||||||||
Goodwill and intangible assets | 467,021 | 467,419 | - | % | 468,622 | - | % | 467,620 | 469,298 | - | % | ||||||||||||
Total assets | 17,228,881 | 17,369,169 | (1 | )% | 19,600,942 | (12 | )% | 17,746,408 | 19,806,163 | (10 | )% | ||||||||||||
Noninterest bearing demand deposits | 3,546,613 | 3,704,088 | (4 | )% | 4,113,680 | (14 | )% | 3,679,947 | 4,362,043 | (16 | )% | ||||||||||||
Interest bearing deposits | 11,044,154 | 11,017,651 | - | % | 11,148,413 | (1 | )% | 10,997,683 | 11,267,975 | (2 | )% | ||||||||||||
Total deposits | 14,590,767 | 14,721,739 | (1 | )% | 15,262,093 | (4 | )% | 14,677,630 | 15,630,018 | (6 | )% | ||||||||||||
Interest bearing liabilities | 11,263,169 | 11,243,129 | - | % | 13,048,351 | (14 | )% | 11,634,541 | 13,067,392 | (11 | )% | ||||||||||||
Stockholders' equity | 2,156,858 | 2,139,861 | 1 | % | 2,048,335 | 5 | % | 2,130,140 | 2,061,665 | 3 | % | ||||||||||||
LOAN PORTFOLIO COMPOSITION: | 12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | ||||||||||||||||||
Commercial real estate ("CRE") loans | $ | 8,527,008 | $ | 8,630,757 | (1 | )% | $ | 8,797,884 | (3 | )% | |||||||||||||
Commercial and industrial ("C&I") loans | 3,967,596 | 3,901,368 | 2 |
% | 4,135,044 | (4 | )% | ||||||||||||||||
Residential mortgage and other loans | 1,123,668 | 1,085,863 | 3 | % | 920,691 | 22 | % | ||||||||||||||||
Loans receivable | 13,618,272 | 13,617,988 | - | % | 13,853,619 | (2 | )% | ||||||||||||||||
Loans held for sale | 14,491 | 25,714 | (44 | )% | 3,408 | 325 | % | ||||||||||||||||
Gross loans | 13,632,763 | 13,643,702 | - | % | 13,857,027 | (2 | )% | ||||||||||||||||
CRE LOANS BY PROPERTY TYPE: | 12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | ||||||||||||||||||
Multi-tenant retail | $ | 1,619,505 | $ | 1,640,769 | (1 | )% | $ | 1,704,337 | (5 | )% | |||||||||||||
Industrial warehouses | 1,264,703 | 1,244,891 | 2 | % | 1,226,780 | 3 | % | ||||||||||||||||
Multifamily | 1,208,494 | 1,204,734 | - | % | 1,226,384 | (1 | )% | ||||||||||||||||
Gas stations and car washes | 1,027,502 | 1,021,537 | 1 | % | 1,030,888 | - | % | ||||||||||||||||
Mixed-use facilities | 771,695 | 826,045 | (7 | )% | 870,664 | (11 | )% | ||||||||||||||||
Hotels/motels | 769,635 | 800,707 | (4 | )% | 796,267 | (3 | )% | ||||||||||||||||
Single-tenant retail | 659,993 | 663,178 | - | % | 662,705 | - | % | ||||||||||||||||
Office | 394,431 | 396,131 | - | % | 401,821 | (2 | )% | ||||||||||||||||
All other | 811,050 | 832,765 | (3 | )% | 878,038 | (8 | )% | ||||||||||||||||
Total CRE loans | $ | 8,527,008 | $ | 8,630,757 | (1 | )% | $ | 8,797,884 | (3 | )% | |||||||||||||
DEPOSIT COMPOSITION: | 12/31/2024 | 9/30/2024 | % change | 12/31/2023 | % change | ||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,377,950 | $ | 3,722,985 | (9 | )% | $ | 3,914,967 | (14 | )% | |||||||||||||
Money market, interest bearing demand, and savings | 5,175,735 | 5,013,305 | 3 | % | 4,872,029 | 6 | % | ||||||||||||||||
Time deposits | 5,773,804 | 5,993,208 | (4 | )% | 5,966,757 | (3 | )% | ||||||||||||||||
Total deposits | $ | 14,327,489 | $ | 14,729,498 | (3 | )% | $ | 14,753,753 | (3 | )% | |||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||||||||||
CAPITAL & CAPITAL RATIOS: | 12/31/2024 | 9/30/2024 | 12/31/2023 |
| |||||||||||||||||||||||
Total stockholders' equity | $ | 2,134,505 | $ | 2,169,785 | $ | 2,121,243 | |||||||||||||||||||||
Total capital | $ | 2,150,810 | $ | 2,143,477 | $ | 2,120,157 | |||||||||||||||||||||
Common equity tier 1 ratio | 13.06 | % | 13.07 | % | 12.28 | % | |||||||||||||||||||||
Tier 1 capital ratio | 13.79 | % | 13.79 | % | 12.96 | % | |||||||||||||||||||||
Total capital ratio | 14.78 | % | 14.82 | % | 13.92 | % | |||||||||||||||||||||
Leverage ratio | 11.78 | % | 11.61 | % | 10.11 | % | |||||||||||||||||||||
Total risk weighted assets | $ | 14,549,708 | $ | 14,466,152 | $ | 15,230,302 | |||||||||||||||||||||
Book value per common share | $ | 17.68 | $ | 17.97 | $ | 17.66 | |||||||||||||||||||||
Tangible common equity ("TCE") per share (1) | $ | 13.81 | $ | 14.10 | $ | 13.76 | |||||||||||||||||||||
TCE ratio (1) | 10.05 | % | 10.08 | % | 8.86 | % | |||||||||||||||||||||
(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. | |||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES CHANGES: | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | |||||||||||||||||||||
Balance at beginning of period | $ | 153,270 | $ | 156,019 | $ | 158,758 | $ | 158,694 | $ | 158,809 | $ | 158,694 | $ | 162,359 | |||||||||||||
ASU 2022-02 day 1 adoption impact | - | - | - | - | - | - | (407 | ) | |||||||||||||||||||
Provision for credit losses on loans | 10,100 | 3,000 | 1,700 | 3,600 | 1,700 | 18,400 | 29,100 | ||||||||||||||||||||
Recoveries | 704 | 534 | 2,099 | 1,184 | 306 | 4,521 | 5,162 | ||||||||||||||||||||
Charge offs | (13,547 | ) | (6,283 | ) | (6,538 | ) | (4,720 | ) | (2,121 | ) | (31,088 | ) | (37,520 | ) | |||||||||||||
Balance at end of period | $ | 150,527 | $ | 153,270 | $ | 156,019 | $ | 158,758 | $ | 158,694 | $ | 150,527 | $ | 158,694 | |||||||||||||
12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | |||||||||||||||||||||||
Allowance for unfunded loan commitments | $ | 2,723 | $ | 2,823 | $ | 2,543 | $ | 2,843 | $ | 3,843 | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | |||||||||||||||||||||
Provision for credit losses on loans | $ | 10,100 | $ | 3,000 | $ | 1,700 | $ | 3,600 | $ | 1,700 | $ | 18,400 | $ | 29,100 | |||||||||||||
Provision (credit) for unfunded loan commitments | (100 | ) | 280 | (300 | ) | (1,000 | ) | 700 | (1,120 | ) | 2,492 | ||||||||||||||||
Provision for credit losses | $ | 10,000 | $ | 3,280 | $ | 1,400 | $ | 2,600 | $ | 2,400 | $ | 17,280 | $ | 31,592 | |||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
NET LOAN CHARGE OFFS (RECOVERIES): | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||||||||
CRE loans | $ | 156 | $ | 372 | $ | 514 | $ | (497 | ) | $ | 1,560 | $ | 545 | $ | (338 | ) | |||||||||||
C&I loans | 12,607 | 5,287 | 3,900 | 4,072 | 138 | 25,866 | 32,388 | ||||||||||||||||||||
Residential mortgage and other loans | 80 | 90 | 25 | (39 | ) | 117 | 156 | 308 | |||||||||||||||||||
Net loan charge offs | $ | 12,843 | $ | 5,749 | $ | 4,439 | $ | 3,536 | $ | 1,815 | $ | 26,567 | $ | 32,358 | |||||||||||||
Net charge offs/average loans (annualized) | 0.38 | % | 0.17 | % | 0.13 | % | 0.10 | % | 0.05 | % | 0.19 | % | 0.22 | % | |||||||||||||
NONPERFORMING ASSETS: | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | ||||||||||||||
Loans on nonaccrual status (1) | $ | 90,564 | $ | 103,602 | $ | 67,003 | $ | 59,526 | $ | 45,204 | |||||||||
Accruing delinquent loans past due 90 days or more | 229 | 226 | 273 | 47,290 | 261 | ||||||||||||||
Total nonperforming loans | 90,793 | 103,828 | 67,276 | 106,816 | 45,465 | ||||||||||||||
Other real estate owned ("OREO") | - | - | - | - | 63 | ||||||||||||||
Total nonperforming assets | $ | 90,793 | $ | 103,828 | $ | 67,276 | $ | 106,816 | $ | 45,528 | |||||||||
Nonperforming assets/total assets | 0.53 | % | 0.60 | % | 0.39 | % | 0.59 | % | 0.24 | % | |||||||||
Nonperforming loans/loans receivable | 0.67 | % | 0.76 | % | 0.50 | % | 0.78 | % | 0.33 | % | |||||||||
Nonaccrual loans/loans receivable | 0.67 | % | 0.76 | % | 0.49 | % | 0.43 | % | 0.33 | % | |||||||||
Allowance for credit losses/loans receivable | 1.11 | % | 1.13 | % | 1.15 | % | 1.16 | % | 1.15 | % | |||||||||
Allowance for credit losses/nonperforming loans | 165.79 | % | 147.62 | % | 231.91 | % | 148.63 | % | 349.05 | % | |||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.8 million, $13.1 million, $11.2 million, $10.9 million, and $11.4 million, at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively. | |||||||||||||||||||
NONACCRUAL LOANS BY TYPE: | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | ||||||||||||||
CRE loans | $ | 23,396 | $ | 72,228 | $ | 27,292 | $ | 37,836 | $ | 33,932 | |||||||||
C&I loans | 60,807 | 24,963 | 33,456 | 15,070 | 5,013 | ||||||||||||||
Residential mortgage and other loans | 6,361 | 6,411 | 6,255 | 6,620 | 6,259 | ||||||||||||||
Total nonaccrual loans | $ | 90,564 | $ | 103,602 | $ | 67,003 | $ | 59,526 | $ | 45,204 | |||||||||
Hope Bancorp, Inc. | ||||||||||||||
Selected Financial Data | ||||||||||||||
Unaudited (dollars in thousands) | ||||||||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | |||||||||
30 - 59 days past due | $ | 8,681 | $ | 10,746 | $ | 9,073 | $ | 2,273 | $ | 2,833 | ||||
60 - 89 days past due | 5,164 | 1,539 | 552 | 313 | 1,289 | |||||||||
Total accruing delinquent loans 30-89 days past due | $ | 13,845 | $ | 12,285 | $ | 9,625 | $ | 2,586 | $ | 4,122 | ||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | |||||||||
CRE loans | $ | 3,205 | $ | 816 | $ | 5,586 | $ | 1,639 | $ | 2,160 | ||||
C&I loans | 1,288 | 9,037 | 2,530 | 551 | 1,643 | |||||||||
Residential mortgage and other loans | 9,352 | 2,432 | 1,509 | 396 | 319 | |||||||||
Total accruing delinquent loans 30-89 days past due | $ | 13,845 | $ | 12,285 | $ | 9,625 | $ | 2,586 | $ | 4,122 | ||||
CRITICIZED LOANS: | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | |||||||||
Special mention loans | $ | 179,073 | $ | 184,443 | $ | 204,167 | $ | 215,183 | $ | 178,992 | ||||
Classified loans | 270,896 | 321,283 | 243,635 | 206,350 | 143,449 | |||||||||
Total criticized loans | $ | 449,969 | $ | 505,726 | $ | 447,802 | $ | 421,533 | $ | 322,441 | ||||
Hope Bancorp, Inc. | |||||||||||||||||||
Selected Financial Data | |||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures | |||||||||||||||||||
Management reviews select non-GAAP financial measures in evaluating the Company's and the Bank's financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below. | |||||||||||||||||||
TANGIBLE COMMON EQUITY ("TCE") | 12/31/2024 | 9/30/2024 | 12/31/2023 | ||||||||||||||||
Total stockholders' equity | $ | 2,134,505 | $ | 2,169,785 | $ | 2,121,243 | |||||||||||||
Less: Goodwill and core deposit intangible assets, net | (466,781 | ) | (467,182 | ) | (468,385 | ) | |||||||||||||
TCE | $ | 1,667,724 | $ | 1,702,603 | $ | 1,652,858 | |||||||||||||
Total assets | $ | 17,054,008 | $ | 17,354,189 | $ | 19,131,522 | |||||||||||||
Less: Goodwill and core deposit intangible assets, net | (466,781 | ) | (467,182 | ) | (468,385 | ) | |||||||||||||
Tangible assets | $ | 16,587,227 | $ | 16,887,007 | $ | 18,663,137 | |||||||||||||
TCE ratio | 10.05 | % | 10.08 | % | 8.86 | % | |||||||||||||
Common shares outstanding | 120,755,658 | 120,737,908 | 120,126,786 | ||||||||||||||||
TCE per share | $ | 13.81 | $ | 14.10 | $ | 13.76 | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY ("ROTCE") | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||
Average stockholders' equity | $ | 2,156,858 | $ | 2,139,861 | $ | 2,048,335 | $ | 2,130,140 | $ | 2,061,665 | |||||||||
Less: Average goodwill and core deposit intangible assets, net | (467,021 | ) | (467,419 | ) | (468,622 | ) | (467,620 | ) | (469,298 | ) | |||||||||
Average TCE | $ | 1,689,837 | $ | 1,672,442 | $ | 1,579,713 | $ | 1,662,520 | $ | 1,592,367 | |||||||||
Net income | $ | 24,337 | $ | 24,159 | $ | 26,481 | $ | 99,630 | $ | 133,673 | |||||||||
ROTCE (annualized) | 5.76 | % | 5.78 | % | 6.71 | % | 5.99 | % | 8.39 | % | |||||||||
Hope Bancorp, Inc. | |||||||||||||||||||
Selected Financial Data | |||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
PRE-PROVISION NET REVENUE ("PPNR") | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||
Net interest income before provision for credit losses | $ | 102,135 | $ | 104,809 | $ | 125,916 | $ | 427,851 | $ | 525,861 | |||||||||
Noninterest income | 15,881 | 11,839 | 9,280 | 47,077 | 45,577 | ||||||||||||||
Revenue | 118,016 | 116,648 | 135,196 | 474,928 | 571,438 | ||||||||||||||
Less: Noninterest expense | 77,590 | 81,268 | 99,191 | 324,684 | 361,959 | ||||||||||||||
PPNR | $ | 40,426 | $ | 35,380 | $ | 36,005 | $ | 150,244 | $ | 209,479 | |||||||||
Notable items: | |||||||||||||||||||
FDIC special assessment expense | - | - | 3,971 | 691 | 3,971 | ||||||||||||||
Restructuring-related (gains) costs, net (including gain on branch sale) | (1,158 | ) | 197 | 11,076 | 17 | 11,576 | |||||||||||||
Merger-related costs | 735 | 1,236 | - | 4,604 | - | ||||||||||||||
Total notable items | (423 | ) | 1,433 | 15,047 | 5,312 | 15,547 | |||||||||||||
PPNR, excluding notable items | $ | 40,003 | $ | 36,813 | $ | 51,052 | $ | 155,556 | $ | 225,026 | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||
Net income | $ | 24,337 | $ | 24,159 | $ | 26,481 | $ | 99,630 | $ | 133,673 | |||||||||
Notable items: | |||||||||||||||||||
FDIC special assessment expense | - | - | 3,971 | 691 | 3,971 | ||||||||||||||
Restructuring-related (gains) costs, net (including gain on branch sale) | (1,158 | ) | 197 | 11,076 | 17 | 11,576 | |||||||||||||
Merger-related costs | 735 | 1,236 | - | 4,604 | - | ||||||||||||||
Total notable items | (423 | ) | 1,433 | 15,047 | 5,312 | 15,547 | |||||||||||||
Less: tax provision | (125 | ) | 421 | 4,427 | 1,562 | 4,574 | |||||||||||||
Total notable items, net of tax provision | (298 | ) | 1,012 | 10,620 | 3,750 | 10,973 | |||||||||||||
Net income excluding notable items | $ | 24,039 | $ | 25,171 | $ | 37,101 | $ | 103,380 | $ | 144,646 | |||||||||
Diluted common shares | 121,401,285 | 121,159,977 | 120,761,112 | 121,108,594 | 120,393,257 | ||||||||||||||
EPS excluding notable items | $ | 0.20 | $ | 0.21 | $ | 0.31 | $ | 0.85 | $ | 1.20 | |||||||||
Average Assets | $ | 17,228,881 | $ | 17,369,169 | $ | 19,600,942 | $ | 17,746,408 | $ | 19,806,163 | |||||||||
ROA excluding notable items (annualized) | 0.56 | % | 0.58 | % | 0.76 | % | 0.58 | % | 0.73 | % | |||||||||
Average Equity | $ | 2,156,858 | $ | 2,139,861 | $ | 2,048,335 | $ | 2,130,140 | $ | 2,061,665 | |||||||||
ROE excluding notable items (annualized) | 4.46 | % | 4.71 | % | 7.25 | % | 4.85 | % | 7.02 | % | |||||||||
Average TCE | $ | 1,689,837 | $ | 1,672,442 | $ | 1,579,713 | $ | 1,662,520 | $ | 1,592,367 | |||||||||
ROTCE excluding notable items (annualized) | 5.69 | % | 6.02 | % | 9.39 | % | 6.22 | % | 9.08 | % | |||||||||
Hope Bancorp, Inc. | |||||||||||||||||||
Selected Financial Data | |||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS | 12/31/2024 | 9/30/2024 | 12/31/2023 | 12/31/2024 | 12/31/2023 | ||||||||||||||
Noninterest expense | $ | 77,590 | $ | 81,268 | $ | 99,191 | $ | 324,684 | $ | 361,959 | |||||||||
Less: notable items: | |||||||||||||||||||
FDIC special assessment expense | - | - | (3,971 | ) | (691 | ) | (3,971 | ) | |||||||||||
Restructuring-related reversals (costs) | 152 | (197 | ) | (11,076 | ) | (1,023 | ) | (11,576 | ) | ||||||||||
Merger-related costs | (735 | ) | (1,236 | ) | - | (4,604 | ) | - | |||||||||||
Noninterest expense excluding notable items | $ | 77,007 | $ | 79,835 | $ | 84,144 | $ | 318,366 | $ | 346,412 | |||||||||
Revenue | $ | 118,016 | $ | 116,648 | $ | 135,196 | $ | 474,928 | $ | 571,438 | |||||||||
Less: notable items: | |||||||||||||||||||
Net gain on branch sale | (1,006 | ) | - | - | (1,006 | ) | - | ||||||||||||
Revenue excluding notable items | $ | 117,010 | $ | 116,648 | $ | 135,196 | $ | 473,922 | $ | 571,438 | |||||||||
Efficiency ratio excluding notable items | 65.81 | % | 68.44 | % | 62.24 | % | 67.18 | % | 60.62 | % | |||||||||
Contacts
Julianna Balicka
EVP & Chief Financial Officer
213-235-3235
julianna.balicka@bankofhope.com
Angie Yang
SVP, Director of Investor Relations & Corporate Communications
213-251-2219
angie.yang@bankofhope.com
