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 third quarter and nine months ended September 30, 2022.
For the three months ended September 30, 2022, net income totaled $53.7 million, or $0.45 per diluted common share, compared with $52.1 million, or $0.43 per diluted common share, in the preceding second quarter and $55.5 million, or $0.45 per diluted common share, in the year-ago third quarter.
“We delivered a strong performance for the third quarter of 2022 that demonstrates the significant strides we have made in transforming the profile of our franchise to a lower-risk, high-performing regional bank,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “We broke new ground yet again with another record high in originations totaling $1.35 billion and representing a well diversified mix with commercial loans accounting for 55% of new loans. Loans receivable grew 6.5% quarter-over-quarter or 11% year-to-date, and together with the increased yields on our interest-earning assets outpacing deposit cost growth, our net interest margin expanded by 13 basis points for the quarter. This, together with the strong loan growth and higher loan yields, resulted in an 8% quarter-over-quarter and 18% year-over-year increase in our net interest income for the third quarter of 2022. We are also pleased that our enhanced credit administration framework is driving ongoing improvements in our asset quality with total nonperforming assets and total criticized loans decreasing 12% and 17%, respectively, quarter-over-quarter. The improved earnings power of Bank of Hope is underscored by the improvements in our pre-provision net revenue, which increased 12% quarter-over-quarter to a record high for the Company.
“As we move forward into the final quarter of the year, our board and management team remain confident in our ability to navigate through the challenges of the current environment and deliver strong financial results for our stockholders for the long term,” said Kim.
Q3 2022 Highlights
- Loan originations totaled a record $1.35 billion, representing a well-diversified mix of new loan production with new commercial loans accounting for 55% of total originations for the quarter.
- Loans receivable increased 6.5% quarter-over-quarter, or 11% year-to-date.
- Criticized loan balances continued its downward trend, decreasing 17% quarter-over-quarter, or 43% year-to-date.
- Total nonperforming assets declined 12% quarter-over-quarter and represented 0.51% of total assets.
- Company recorded a provision for credit losses of $9.2 million, primarily reflecting strong loan growth and increased recessionary risk factors.
- Net interest income increased 8% quarter-over-quarter and 18% year-over-year.
- Net interest margin expanded 13 basis points from the preceding second quarter, benefiting from 4% linked-quarter increase in average loans outstanding and a 59 basis-point expansion in average loan yields.
- Total deposits increased 3.1% quarter-over-quarter, reflecting increases in time deposits.
- Total cost of deposits increased 46 basis points quarter-over-quarter, reflecting the impact of increases in the Federal Funds target rates since June 2022.
- Pre-provision net revenue increased 11.8% quarter-over-quarter to a record high $82.6 million.
Financial Highlights
At or for the Three Months Ended |
|||||||||||
(dollars in thousands, except per share data) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||
Net income |
$ |
53,748 |
$ |
52,088 |
$ |
55,499 |
|||||
Diluted earnings per share |
$ |
0.45 |
$ |
0.43 |
$ |
0.45 |
|||||
Pre-provision net revenue (“PPNR”) (1) |
$ |
82,627 |
$ |
73,919 |
$ |
65,411 |
|||||
Net interest income before provision (credit) for credit losses |
$ |
153,186 |
$ |
141,538 |
$ |
130,296 |
|||||
Net interest margin |
3.49 |
% |
3.36 |
% |
3.07 |
% |
|||||
Noninterest income |
$ |
13,355 |
$ |
12,746 |
$ |
10,617 |
|||||
Noninterest expense |
$ |
83,914 |
$ |
80,365 |
$ |
75,502 |
|||||
Net loans receivable |
$ |
15,330,626 |
$ |
14,394,469 |
$ |
13,281,917 |
|||||
Deposits |
$ |
15,502,209 |
$ |
15,029,630 |
$ |
15,062,527 |
|||||
Total cost of deposits |
0.79 |
% |
0.33 |
% |
0.26 |
% |
|||||
Nonaccrual loans(2) |
$ |
64,571 |
$ |
69,522 |
$ |
54,380 |
|||||
Nonperforming loans to loans receivable(2) |
0.62 |
% |
0.75 |
% |
0.73 |
% |
|||||
ACL to loans receivable |
1.04 |
% |
1.04 |
% |
1.02 |
% |
|||||
ACL to nonaccrual loans(2) |
248.66 |
% |
218.03 |
% |
251.52 |
% |
|||||
ACL to nonperforming assets(2) |
165.55 |
% |
137.09 |
% |
120.33 |
% |
|||||
Provision (credit) for credit losses |
$ |
9,200 |
$ |
3,200 |
$ |
(10,000 |
) |
||||
Net charge offs (recoveries) |
$ |
219 |
$ |
(930 |
) |
$ |
42,678 |
||||
Return on average assets (“ROA”) |
1.17 |
% |
1.17 |
% |
1.25 |
% |
|||||
Return on average equity (“ROE”) |
10.58 |
% |
10.33 |
% |
10.61 |
% |
|||||
ROA (PPNR) (1) |
1.79 |
% |
1.65 |
% |
1.47 |
% |
|||||
ROE (PPNR) (1) |
16.26 |
% |
14.66 |
% |
12.51 |
% |
|||||
Return on average tangible common equity (“ROTCE”)(1) |
13.77 |
% |
13.48 |
% |
13.71 |
% |
|||||
Noninterest expense / average assets |
1.82 |
% |
1.80 |
% |
1.70 |
% |
|||||
Efficiency ratio |
50.39 |
% |
52.09 |
% |
53.58 |
% |
|||||
(1) |
Pre-provision net revenue, ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Pages 10 and 11 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|
(2) |
Excludes delinquent SBA loans that are guaranteed and currently in liquidation. |
Operating Results for the 2022 Third Quarter
Net interest income before provision for credit losses for the 2022 third quarter increased 8% to $153.2 million from $141.5 million in the 2022 second quarter and increased 18% from $130.3 million in the 2021 third quarter. The Company attributed the increase to higher interest income largely due to a favorable shift in our mix of earning assets, as well as higher average balances of loans receivable and an increase in loan yields, partially offset by higher interest expense on deposits.
The net interest margin for the 2022 third quarter increased 13 basis points to 3.49% from 3.36% in the preceding second quarter and increased 42 basis points from 3.07% in the year-ago third quarter, as the expansion of the yields on interest-earning assets outpaced the increase in the cost of deposits.
The weighted average yield on loans for the 2022 third quarter was 4.65%, up 59 basis points from 4.06% in the 2022 second quarter and up 68 basis points from the year-ago third quarter. The Company attributed the quarter-over-quarter increase in weighted average yield on loans to the repricing of its variable rate loans following the increases in the market interest rates, as well as a significant increase in the average rate of new loans originated during the quarter.
The weighted average cost of deposits for the 2022 third quarter increased by 46 basis points to 0.79% from 0.33% in the 2022 second quarter, primarily reflecting a 71 basis point increase in the cost of interest bearing deposits due to the previously mentioned Federal Funds target rate hikes. Compared with the year-ago third quarter, the weighted average cost of deposits for the 2022 third quarter increased 53 basis points from 0.26%, reflecting an 83 basis point increase in the cost of interest bearing deposits.
Noninterest income for the 2022 third quarter increased 5% to $13.4 million from $12.7 million in the 2022 second quarter. Quarter-over-quarter reductions in the net gains on sales of SBA loans and residential mortgage loans were more than offset by increases across most all other noninterest income categories. Most notably, other income and fees increased 94% quarter-over-quarter, which largely reflects higher swap fee income and a reduction in fair value losses on equity investments. During the 2022 third quarter, the Company sold $57.8 million in the guaranteed portion of SBA 7(a) loans and $3.7 million in retail mortgage loans, compared with $70.2 million and $4.1 million, respectively, sold in the preceding second quarter. Noninterest income for the 2022 third quarter increased 26% compared with $10.6 million in the third quarter of 2021, primarily reflecting higher service fees on deposit accounts, as well as other income and fees.
Noninterest expense for the 2022 third quarter increased 4% to $83.9 million from $80.4 million for the preceding second quarter, largely reflecting higher salaries and employee benefits and other noninterest expenses, partially offset by lower credit related expenses. For the 2021 third quarter, noninterest expense totaled $75.5 million.
Salaries and employee benefits expense for the 2022 third quarter increased to $53.2 million from $51.1 million in the preceding second quarter, largely reflecting higher incentive compensation accruals related to the strong financial performance. Salaries and employee benefits expense for the 2021 third quarter totaled $47.0 million.
Other noninterest expense for the 2022 third quarter increased to $10.8 million from $6.3 million in the 2022 second quarter and $6.4 million in the 2021 third quarter, largely reflecting higher earnings credit expenses as a result of recent Fed Fund rate hikes and higher amortization expense related to low-income housing tax credits.
The Company’s efficiency ratio for the 2022 third quarter was 50.39%, compared with 52.09% in the preceding second quarter and 53.58% in the year-ago third quarter. Noninterest expense as a percentage of average assets was 1.82% for the 2022 third quarter, compared with 1.80% for the 2022 second quarter and 1.70% for the 2021 third quarter.
The effective tax rate for the 2022 third quarter was 26.8%, compared with 26.4% for the preceding second quarter and 26.4% in the year-ago third quarter.
Balance Sheet Summary
New loan originations during the 2022 third quarter totaled $1.35 billion, reflecting a 5% increase over the preceding second quarter and a 34% increase over the year-ago third quarter.
Following are the components of new loan production for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021.
For the Three Months Ended |
||||||||
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
|||||
Commercial real estate |
$ |
500,826 |
$ |
522,093 |
$ |
488,969 |
||
Commercial |
732,341 |
544,639 |
329,702 |
|||||
SBA |
47,428 |
35,085 |
115,023 |
|||||
Residential mortgage |
67,079 |
181,408 |
75,007 |
|||||
Consumer |
1,020 |
2,770 |
500 |
|||||
Total new loan originations |
$ |
1,348,694 |
$ |
1,285,995 |
$ |
1,009,201 |
||
At September 30, 2022, loans receivable increased 6.5% to $15.49 billion from $14.55 billion at June 30, 2022 and increased 15.4% from $13.42 billion at September 30, 2021.
Total deposits at September 30, 2022 increased 3.1% to $15.50 billion from $15.03 billion at June 30, 2022, largely reflecting an increase in time deposits, and increased 2.9% year-over-year from $15.06 billion at September 30, 2021. Quarter-over-quarter, noninterest bearing demand and money market and NOW deposits decreased 1.7% and 7.2%, respectively, but these decreases were more than offset by a 38.7% increase in time deposits. On a year-over-year basis, noninterest bearing demand deposits at September 30, 2022 decreased 6.9%, money market and NOW deposits increased 0.2%, and time deposits increased 29.3%.
Following is the deposit composition as of September 30, 2022, June 30, 2022 and September 30, 2021:
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
|||||
Noninterest bearing demand deposits |
$ |
5,590,952 |
$ |
5,689,992 |
$ |
6,007,586 |
||
Money market and other |
5,885,093 |
6,339,467 |
5,871,567 |
|||||
Saving deposits |
317,841 |
326,927 |
314,603 |
|||||
Time deposits |
3,708,323 |
2,673,244 |
2,868,771 |
|||||
Total deposit balances |
$ |
15,502,209 |
$ |
15,029,630 |
$ |
15,062,527 |
||
Following is the deposit composition as a percentage of total deposits and a breakdown of cost of deposits as of and for the quarters ended September 30, 2022, June 30, 2022 and September 30, 2021:
Deposit Breakdown |
Cost of Deposits |
||||||||||||||||
(unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
Q3 2022 |
Q2 2022 |
Q3 2021 |
|||||||||||
Noninterest bearing demand deposits |
36.1 |
% |
37.9 |
% |
39.9 |
% |
— |
% |
— |
% |
— |
% |
|||||
Money market and other |
38.0 |
% |
42.2 |
% |
39.0 |
% |
1.24 |
% |
0.54 |
% |
0.40 |
% |
|||||
Saving deposits |
2.0 |
% |
2.1 |
% |
2.1 |
% |
1.18 |
% |
1.16 |
% |
1.18 |
% |
|||||
Time deposits |
23.9 |
% |
17.8 |
% |
19.0 |
% |
1.27 |
% |
0.46 |
% |
0.38 |
% |
|||||
Total deposit balances |
100.0 |
% |
100.0 |
% |
100.0 |
% |
0.79 |
% |
0.33 |
% |
0.26 |
% |
|||||
Allowance for Credit Losses
For the 2022 third quarter, the Company recorded a provision for credit losses of $9.2 million, compared with a provision for credit losses of $3.2 million in the preceding second quarter and a negative provision for credit losses of $10.0 million in the 2021 third quarter.
Following is the allowance for credit losses and allowance coverage ratios as of September 30, 2022, June 30, 2022 and September 30, 2021:
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||
Allowance for credit losses |
$ |
160,561 |
$ |
151,580 |
$ |
136,774 |
|||||
Allowance for credit loss/loans receivable |
1.04 |
% |
1.04 |
% |
1.02 |
% |
|||||
Allowance for credit losses/nonperforming loans |
168.11 |
% |
139.63 |
% |
138.92 |
% |
|||||
Credit Quality
Following are the components of nonperforming assets as of September 30, 2022, June 30, 2022 and September 30, 2021:
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
|||||
Loans on nonaccrual status (1) |
$ |
64,571 |
$ |
69,522 |
$ |
54,380 |
||
Delinquent loans 90 days or more on accrual status |
5,306 |
12,468 |
4,567 |
|||||
Accruing troubled debt restructured loans |
25,631 |
26,572 |
39,509 |
|||||
Total nonperforming loans |
95,508 |
108,562 |
98,456 |
|||||
Other real estate owned |
1,480 |
2,010 |
15,213 |
|||||
Total nonperforming assets |
$ |
96,988 |
$ |
110,572 |
$ |
113,669 |
||
(1) |
Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.9 million, $13.2 million and $20.6 million, at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. |
Total nonperforming assets at September 30, 2022 decreased to $97.0 million from $110.6 million at June 30, 2022 and from $113.7 million at September 30, 2021. Quarter-over-quarter, the decrease in total nonperforming assets reflects reductions across the board in all categories.
Following are net charge offs (recoveries) and net charge offs (recoveries) to average loans receivable on an annualized basis for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021:
For the Three Months Ended |
|||||||||||
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||
Net charge offs (recoveries) |
$ |
219 |
$ |
(930 |
) |
$ |
42,678 |
||||
Net charge offs (recoveries)/average loans receivable (annualized) |
0.01 |
% |
(0.03 |
)% |
1.28 |
% |
|||||
Following are the components of criticized loan balances as of September 30, 2022, June 30, 2022 and September 30, 2021:
(dollars in thousands) (unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
|||||
Special mention |
$ |
79,399 |
$ |
95,797 |
$ |
306,766 |
||
Substandard |
204,713 |
244,748 |
243,684 |
|||||
Total criticized loans |
$ |
284,112 |
$ |
340,545 |
$ |
550,450 |
||
At September 30, 2022, special mention loans decreased 17.1% quarter-over-quarter and total criticized loans decreased 16.6% quarter-over-quarter. Compared with a year ago at September 30, 2021, special mention and total criticized loans decreased 74.1% and 48.4%, respectively.
Capital
At September 30, 2022, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. Following are capital ratios for the Company as of September 30, 2022, June 30, 2022 and September 30, 2021:
(unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
Minimum Guideline for “Well-Capitalized” Bank |
|||||||
Common Equity Tier 1 Capital |
10.32 |
% |
10.69 |
% |
11.01 |
% |
6.50 |
% |
|||
Tier 1 Leverage Ratio |
10.25 |
% |
10.32 |
% |
9.98 |
% |
5.00 |
% |
|||
Tier 1 Risk-Based Ratio |
10.91 |
% |
11.33 |
% |
11.70 |
% |
8.00 |
% |
|||
Total Risk-Based Ratio |
11.72 |
% |
12.13 |
% |
12.42 |
% |
10.00 |
% |
|||
Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of September 30, 2022, June 30, 2022 and September 30, 2021:
(unaudited) |
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||
Tangible common equity per share (1) |
$ |
12.60 |
$ |
12.80 |
$ |
13.33 |
|||||
Tangible common equity to tangible assets (1) |
8.09 |
% |
8.68 |
% |
9.24 |
% |
|||||
(1) |
Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth in the following section. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11. |
Non-GAAP Financial Metrics
This news release contains certain non-GAAP financial measure disclosures, including pre-provision net revenue, ROA (PPNR), ROE (PPNR), tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding its operational performance and the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in these financial metrics. A reconciliation of the GAAP to non-GAAP financial measures is 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, October 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its third quarter ended September 30, 2022. 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 November 1, 2022, replay access code 7421375.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.08 billion in total assets as of September 30, 2022. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Hope Bancorp, Inc. |
|||||||||||||||||
Selected Financial Data |
|||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
|||||||||||||||||
Assets: |
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
||||||||||||
Cash and due from banks |
$ |
331,336 |
$ |
197,062 |
68 |
% |
$ |
627,352 |
(47 |
)% |
|||||||
Investment securities |
2,264,533 |
2,352,997 |
(4 |
)% |
2,669,489 |
(15 |
)% |
||||||||||
Federal Home Loan Bank (“FHLB”) stock and other investments |
65,192 |
87,109 |
(25 |
)% |
88,102 |
(26 |
)% |
||||||||||
Loans held for sale, at the lower of cost or fair value |
41,989 |
76,376 |
(45 |
)% |
179,117 |
(77 |
)% |
||||||||||
Loans receivable |
15,491,187 |
14,546,049 |
6 |
% |
13,418,691 |
15 |
% |
||||||||||
Allowance for credit losses |
(160,561 |
) |
(151,580 |
) |
6 |
% |
(136,774 |
) |
17 |
% |
|||||||
Net loans receivable |
15,330,626 |
14,394,469 |
7 |
% |
13,281,917 |
15 |
% |
||||||||||
Accrued interest receivable |
42,363 |
37,845 |
12 |
% |
47,102 |
(10 |
)% |
||||||||||
Premises and equipment, net |
46,169 |
46,093 |
— |
% |
45,307 |
2 |
% |
||||||||||
Bank owned life insurance |
76,788 |
77,692 |
(1 |
)% |
76,756 |
— |
% |
||||||||||
Goodwill |
464,450 |
464,450 |
— |
% |
464,450 |
— |
% |
||||||||||
Servicing assets |
11,601 |
11,215 |
3 |
% |
10,787 |
8 |
% |
||||||||||
Other intangible assets, net |
6,212 |
6,698 |
(7 |
)% |
8,180 |
(24 |
)% |
||||||||||
Other assets |
402,129 |
337,056 |
19 |
% |
300,467 |
34 |
% |
||||||||||
Total assets |
$ |
19,083,388 |
$ |
18,089,062 |
5 |
% |
$ |
17,799,026 |
7 |
% |
|||||||
Liabilities: |
|||||||||||||||||
Deposits |
$ |
15,502,209 |
$ |
15,029,630 |
3 |
% |
$ |
15,062,527 |
3 |
% |
|||||||
FHLB and FRB borrowings |
1,072,000 |
573,000 |
87 |
% |
200,000 |
436 |
% |
||||||||||
Convertible notes, net |
216,913 |
216,678 |
— |
% |
215,974 |
— |
% |
||||||||||
Subordinated debentures |
106,258 |
105,953 |
— |
% |
105,057 |
1 |
% |
||||||||||
Accrued interest payable |
11,713 |
4,112 |
185 |
% |
5,367 |
118 |
% |
||||||||||
Other liabilities |
198,570 |
159,320 |
25 |
% |
135,703 |
46 |
% |
||||||||||
Total liabilities |
$ |
17,107,663 |
$ |
16,088,693 |
6 |
% |
$ |
15,724,628 |
9 |
% |
|||||||
Stockholders’ Equity: |
|||||||||||||||||
Common stock, $0.001 par value |
$ |
137 |
$ |
137 |
— |
% |
$ |
136 |
1 |
% |
|||||||
Capital surplus |
1,428,052 |
1,424,891 |
— |
% |
1,420,151 |
1 |
% |
||||||||||
Retained earnings |
1,048,738 |
1,011,715 |
4 |
% |
897,766 |
17 |
% |
||||||||||
Treasury stock, at cost |
(264,667 |
) |
(264,667 |
) |
— |
% |
(247,198 |
) |
(7 |
)% |
|||||||
Accumulated other comprehensive (loss) gain, net |
(236,535 |
) |
(171,707 |
) |
(38 |
)% |
3,543 |
N/A |
|||||||||
Total stockholders’ equity |
1,975,725 |
2,000,369 |
(1 |
)% |
2,074,398 |
(5 |
)% |
||||||||||
Total liabilities and stockholders’ equity |
$ |
19,083,388 |
$ |
18,089,062 |
5 |
% |
$ |
17,799,026 |
7 |
% |
|||||||
Common stock shares - authorized |
150,000,000 |
150,000,000 |
150,000,000 |
||||||||||||||
Common stock shares - outstanding |
119,479,253 |
119,473,939 |
120,198,061 |
||||||||||||||
Treasury stock shares |
17,382,835 |
17,382,835 |
16,149,007 |
||||||||||||||
Hope Bancorp, Inc. |
|||||||||||||||||||||||||||
Selected Financial Data |
|||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
|||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
9/30/2022 |
9/30/2021 |
% change |
||||||||||||||||||||
Interest and fees on loans |
$ |
175,078 |
$ |
145,024 |
21 |
% |
$ |
132,794 |
32 |
% |
$ |
452,774 |
$ |
394,353 |
15 |
% |
|||||||||||
Interest on investment securities |
13,498 |
12,308 |
10 |
% |
9,207 |
47 |
% |
37,462 |
24,835 |
51 |
% |
||||||||||||||||
Interest on federal funds sold and other investments |
606 |
492 |
23 |
% |
865 |
(30 |
)% |
1,642 |
2,175 |
(25 |
)% |
||||||||||||||||
Total interest income |
189,182 |
157,824 |
20 |
% |
142,866 |
32 |
% |
491,878 |
421,363 |
17 |
% |
||||||||||||||||
Interest on deposits |
30,667 |
12,220 |
151 |
% |
9,640 |
218 |
% |
51,563 |
33,106 |
56 |
% |
||||||||||||||||
Interest on other borrowings and convertible notes |
5,329 |
4,066 |
31 |
% |
2,930 |
82 |
% |
12,415 |
8,805 |
41 |
% |
||||||||||||||||
Total interest expense |
35,996 |
16,286 |
121 |
% |
12,570 |
186 |
% |
63,978 |
41,911 |
53 |
% |
||||||||||||||||
Net interest income before provision (credit) for credit losses |
153,186 |
141,538 |
8 |
% |
130,296 |
18 |
% |
427,900 |
379,452 |
13 |
% |
||||||||||||||||
Provision (credit) for credit losses |
9,200 |
3,200 |
188 |
% |
(10,000 |
) |
N/A |
1,400 |
(13,700 |
) |
N/A |
||||||||||||||||
Net interest income after provision (credit) for credit losses |
143,986 |
138,338 |
4 |
% |
140,296 |
3 |
% |
426,500 |
393,152 |
8 |
% |
||||||||||||||||
Service fees on deposit accounts |
2,535 |
2,270 |
12 |
% |
1,814 |
40 |
% |
6,779 |
5,381 |
26 |
% |
||||||||||||||||
International service fees |
834 |
744 |
12 |
% |
889 |
(6 |
)% |
2,372 |
2,525 |
(6 |
)% |
||||||||||||||||
Loan servicing fees, net |
981 |
843 |
16 |
% |
642 |
53 |
% |
2,660 |
2,620 |
2 |
% |
||||||||||||||||
Wire transfer fees |
856 |
858 |
— |
% |
836 |
2 |
% |
2,614 |
2,603 |
— |
% |
||||||||||||||||
Net gains on sales of SBA loans |
2,782 |
5,804 |
(52 |
)% |
2,459 |
13 |
% |
14,189 |
4,834 |
194 |
% |
||||||||||||||||
Net gains on sales of residential mortgage loans |
29 |
76 |
(62 |
)% |
781 |
(96 |
)% |
862 |
3,905 |
(78 |
)% |
||||||||||||||||
Net gains (losses) on sales of other loans |
117 |
(547 |
) |
N/A |
— |
100 |
% |
(430 |
) |
— |
100 |
% |
|||||||||||||||
Other income and fees |
5,221 |
2,698 |
94 |
% |
3,196 |
63 |
% |
10,241 |
8,629 |
19 |
% |
||||||||||||||||
Total noninterest income |
13,355 |
12,746 |
5 |
% |
10,617 |
26 |
% |
39,287 |
30,497 |
29 |
% |
||||||||||||||||
Salaries and employee benefits |
53,222 |
51,058 |
4 |
% |
47,018 |
13 |
% |
152,025 |
130,543 |
16 |
% |
||||||||||||||||
Occupancy |
6,682 |
7,178 |
(7 |
)% |
7,473 |
(11 |
)% |
21,195 |
21,507 |
(1 |
)% |
||||||||||||||||
Furniture and equipment |
4,967 |
4,778 |
4 |
% |
4,429 |
12 |
% |
14,389 |
13,437 |
7 |
% |
||||||||||||||||
Advertising and marketing |
1,739 |
2,226 |
(22 |
)% |
2,656 |
(35 |
)% |
5,601 |
6,378 |
(12 |
)% |
||||||||||||||||
Data processing and communications |
2,469 |
2,893 |
(15 |
)% |
2,394 |
3 |
% |
7,823 |
7,542 |
4 |
% |
||||||||||||||||
Professional fees |
1,196 |
1,582 |
(24 |
)% |
2,431 |
(51 |
)% |
4,989 |
9,729 |
(49 |
)% |
||||||||||||||||
FDIC assessment |
1,633 |
1,450 |
13 |
% |
1,204 |
36 |
% |
4,652 |
3,743 |
24 |
% |
||||||||||||||||
Credit related expenses |
873 |
2,872 |
(70 |
)% |
1,266 |
(31 |
)% |
4,857 |
3,527 |
38 |
% |
||||||||||||||||
OREO expense |
378 |
5 |
7,460 |
% |
248 |
52 |
% |
740 |
827 |
(11 |
)% |
||||||||||||||||
Software impairment |
— |
— |
— |
% |
— |
— |
% |
— |
2,146 |
(100 |
)% |
||||||||||||||||
Other |
10,755 |
6,323 |
70 |
% |
6,383 |
68 |
% |
23,381 |
19,677 |
19 |
% |
||||||||||||||||
Total noninterest expense |
83,914 |
80,365 |
4 |
% |
75,502 |
11 |
% |
239,652 |
219,056 |
9 |
% |
||||||||||||||||
Income before income taxes |
73,427 |
70,719 |
4 |
% |
75,411 |
(3 |
)% |
226,135 |
204,593 |
11 |
% |
||||||||||||||||
Income tax provision |
19,679 |
18,631 |
6 |
% |
19,912 |
(1 |
)% |
59,561 |
51,644 |
15 |
% |
||||||||||||||||
Net income |
$ |
53,748 |
$ |
52,088 |
3 |
% |
$ |
55,499 |
(3 |
)% |
$ |
166,574 |
$ |
152,949 |
9 |
% |
|||||||||||
Earnings Per Common Share - Basic |
$ |
0.45 |
$ |
0.43 |
$ |
0.45 |
$ |
1.39 |
$ |
1.24 |
|||||||||||||||||
Earnings Per Common Share - Diluted |
$ |
0.45 |
$ |
0.43 |
$ |
0.45 |
$ |
1.38 |
$ |
1.23 |
|||||||||||||||||
Weighted Average Shares Outstanding - Basic |
119,476,035 |
120,219,919 |
122,244,948 |
119,940,044 |
123,050,174 |
||||||||||||||||||||||
Weighted Average Shares Outstanding - Diluted |
119,996,523 |
120,699,638 |
122,908,536 |
120,595,988 |
123,848,512 |
||||||||||||||||||||||
Hope Bancorp, Inc. |
||||||||||||||
Selected Financial Data |
||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||
For the Three Months Ended (Annualized) |
For the Nine Months Ended (Annualized) |
|||||||||||||
Profitability measures: |
9/30/2022 |
6/30/2022 |
9/30/2021 |
9/30/2022 |
9/30/2021 |
|||||||||
ROA |
1.17 |
% |
1.17 |
% |
1.25 |
% |
1.23 |
% |
1.18 |
% |
||||
ROE |
10.58 |
% |
10.33 |
% |
10.61 |
% |
10.85 |
% |
9.86 |
% |
||||
ROA (PPNR) (1) |
1.79 |
% |
1.65 |
% |
1.47 |
% |
1.68 |
% |
1.47 |
% |
||||
ROE (PPNR) (1) |
16.26 |
% |
14.66 |
% |
12.51 |
% |
14.83 |
% |
12.30 |
% |
||||
ROTCE (2) |
13.77 |
% |
13.48 |
% |
13.71 |
% |
14.10 |
% |
12.78 |
% |
||||
Net interest margin |
3.49 |
% |
3.36 |
% |
3.07 |
% |
3.36 |
% |
3.08 |
% |
||||
Efficiency ratio |
50.39 |
% |
52.09 |
% |
53.58 |
% |
51.30 |
% |
53.43 |
% |
||||
Noninterest expense / average assets |
1.82 |
% |
1.80 |
% |
1.70 |
% |
1.77 |
% |
1.68 |
% |
||||
(1) |
ROA (PPNR) and ROE (PPNR) are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Pages 10 and 11 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|
(2) |
Average tangible common equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. |
Hope Bancorp, Inc. |
||||||||||||||||||||||||||
Selected Financial Data |
||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||||||||||||||||||
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 |
$ |
14,925,298 |
$ |
175,078 |
4.65 |
% |
$ |
14,327,476 |
$ |
145,024 |
4.06 |
% |
$ |
13,286,382 |
$ |
132,794 |
3.97 |
% |
||||||||
Investment securities |
2,366,696 |
13,498 |
2.26 |
% |
2,424,454 |
12,308 |
2.04 |
% |
2,370,672 |
9,207 |
1.54 |
% |
||||||||||||||
FHLB stock and other investments |
107,724 |
606 |
2.23 |
% |
134,055 |
492 |
1.47 |
% |
1,197,537 |
865 |
0.29 |
% |
||||||||||||||
Total interest earning assets |
$ |
17,399,718 |
$ |
189,182 |
4.31 |
% |
$ |
16,885,985 |
$ |
157,824 |
3.75 |
% |
$ |
16,854,591 |
$ |
142,866 |
3.36 |
% |
||||||||
INTEREST BEARING LIABILITIES: |
||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||
Demand, interest bearing |
$ |
6,255,271 |
$ |
19,614 |
1.24 |
% |
$ |
6,487,890 |
$ |
8,655 |
0.54 |
% |
$ |
5,919,225 |
$ |
5,946 |
0.40 |
% |
||||||||
Savings |
324,487 |
969 |
1.18 |
% |
323,114 |
937 |
1.16 |
% |
310,525 |
920 |
1.18 |
% |
||||||||||||||
Time deposits |
3,146,432 |
10,084 |
1.27 |
% |
2,277,938 |
2,628 |
0.46 |
% |
2,914,977 |
2,774 |
0.38 |
% |
||||||||||||||
Total interest bearing deposits |
9,726,190 |
30,667 |
1.25 |
% |
9,088,942 |
12,220 |
0.54 |
% |
9,144,727 |
9,640 |
0.42 |
% |
||||||||||||||
FHLB and FRB borrowings |
448,837 |
2,393 |
2.12 |
% |
577,966 |
1,457 |
1.01 |
% |
200,000 |
640 |
1.27 |
% |
||||||||||||||
Convertible notes, net |
216,762 |
1,322 |
2.39 |
% |
216,540 |
1,322 |
2.42 |
% |
215,840 |
1,321 |
2.39 |
% |
||||||||||||||
Subordinated debentures |
102,182 |
1,614 |
6.18 |
% |
101,880 |
1,287 |
5.00 |
% |
100,993 |
969 |
3.75 |
% |
||||||||||||||
Total interest bearing liabilities |
$ |
10,493,971 |
$ |
35,996 |
1.36 |
% |
$ |
9,985,328 |
$ |
16,286 |
0.65 |
% |
$ |
9,661,560 |
$ |
12,570 |
0.52 |
% |
||||||||
Noninterest bearing demand deposits |
5,719,155 |
5,715,830 |
5,848,983 |
|||||||||||||||||||||||
Total funding liabilities/cost of funds |
$ |
16,213,126 |
0.88 |
% |
$ |
15,701,158 |
0.42 |
% |
$ |
15,510,543 |
0.32 |
% |
||||||||||||||
Net interest income/net interest spread |
$ |
153,186 |
2.95 |
% |
$ |
141,538 |
3.10 |
% |
$ |
130,296 |
2.84 |
% |
||||||||||||||
Net interest margin |
3.49 |
% |
3.36 |
% |
3.07 |
% |
||||||||||||||||||||
Cost of deposits: |
||||||||||||||||||||||||||
Noninterest bearing demand deposits |
$ |
5,719,155 |
$ |
— |
— |
% |
$ |
5,715,830 |
$ |
— |
— |
% |
$ |
5,848,983 |
$ |
— |
— |
% |
||||||||
Interest bearing deposits |
9,726,190 |
30,667 |
1.25 |
% |
9,088,942 |
12,220 |
0.54 |
% |
9,144,727 |
9,640 |
0.42 |
% |
||||||||||||||
Total deposits |
$ |
15,445,345 |
$ |
30,667 |
0.79 |
% |
$ |
14,804,772 |
$ |
12,220 |
0.33 |
% |
$ |
14,993,710 |
$ |
9,640 |
0.26 |
% |
||||||||
Hope Bancorp, Inc. |
|||||||||||||||||
Selected Financial Data |
|||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
|||||||||||||||||
Nine Months Ended |
|||||||||||||||||
9/30/2022 |
9/30/2021 |
||||||||||||||||
Interest |
Annualized |
Interest |
Annualized |
||||||||||||||
Average |
Income/ |
Average |
Average |
Income/ |
Average |
||||||||||||
Balance |
Expense |
Yield/Cost |
Balance |
Expense |
Yield/Cost |
||||||||||||
INTEREST EARNING ASSETS: |
|||||||||||||||||
Loans, including loans held for sale |
$ |
14,378,774 |
$ |
452,774 |
4.21 |
% |
$ |
13,308,526 |
$ |
394,353 |
3.96 |
% |
|||||
Investment securities |
2,469,858 |
37,462 |
2.03 |
% |
2,297,450 |
24,835 |
1.45 |
% |
|||||||||
FHLB stock and other investments |
197,287 |
1,642 |
1.11 |
% |
867,745 |
2,175 |
0.34 |
% |
|||||||||
Total interest earning assets |
$ |
17,045,919 |
$ |
491,878 |
3.86 |
% |
$ |
16,473,721 |
$ |
421,363 |
3.42 |
% |
|||||
INTEREST BEARING LIABILITIES: |
|||||||||||||||||
Deposits: |
|||||||||||||||||
Demand, interest bearing |
$ |
6,360,040 |
$ |
33,970 |
0.71 |
% |
$ |
5,555,711 |
$ |
17,345 |
0.42 |
% |
|||||
Savings |
322,058 |
2,834 |
1.18 |
% |
306,780 |
2,678 |
1.17 |
% |
|||||||||
Time deposits |
2,683,217 |
14,759 |
0.74 |
% |
3,298,393 |
13,083 |
0.53 |
% |
|||||||||
Total interest bearing deposits |
9,365,315 |
51,563 |
0.74 |
% |
9,160,884 |
33,106 |
0.48 |
% |
|||||||||
FHLB and FRB borrowings |
423,875 |
4,537 |
1.43 |
% |
205,971 |
1,913 |
1.24 |
% |
|||||||||
Convertible notes, net |
216,538 |
3,967 |
2.42 |
% |
215,483 |
3,967 |
2.43 |
% |
|||||||||
Subordinated debentures |
101,882 |
3,911 |
5.06 |
% |
100,697 |
2,925 |
3.83 |
% |
|||||||||
Total interest bearing liabilities |
$ |
10,107,610 |
$ |
63,978 |
0.85 |
% |
$ |
9,683,035 |
$ |
41,911 |
0.58 |
% |
|||||
Noninterest bearing demand deposits |
5,702,754 |
5,451,908 |
|||||||||||||||
Total funding liabilities/cost of funds |
$ |
15,810,364 |
0.54 |
% |
$ |
15,134,943 |
0.37 |
% |
|||||||||
Net interest income/net interest spread |
$ |
427,900 |
3.01 |
% |
$ |
379,452 |
2.84 |
% |
|||||||||
Net interest margin |
3.36 |
% |
3.08 |
% |
|||||||||||||
Cost of deposits: |
|||||||||||||||||
Noninterest bearing demand deposits |
$ |
5,702,754 |
$ |
— |
— |
% |
$ |
5,451,908 |
$ |
— |
— |
% |
|||||
Interest bearing deposits |
9,365,315 |
51,563 |
0.74 |
% |
9,160,884 |
33,106 |
0.48 |
% |
|||||||||
Total deposits |
$ |
15,068,069 |
$ |
51,563 |
0.46 |
% |
$ |
14,612,792 |
$ |
33,106 |
0.30 |
% |
|||||
Hope Bancorp, Inc. |
||||||||||||||||||||||||||
Selected Financial Data |
||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||
AVERAGE BALANCES: |
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
9/30/2022 |
9/30/2021 |
% change |
||||||||||||||||||
Loans, including loans held for sale |
$ |
14,925,298 |
$ |
14,327,476 |
4 |
% |
$ |
13,286,382 |
12 |
% |
$ |
14,378,774 |
$ |
13,308,526 |
8 |
% |
||||||||||
Investments |
2,474,420 |
2,558,509 |
(3 |
)% |
3,568,209 |
(31 |
)% |
2,667,145 |
3,165,195 |
(16 |
)% |
|||||||||||||||
Interest earning assets |
17,399,718 |
16,885,985 |
3 |
% |
16,854,591 |
3 |
% |
17,045,919 |
16,473,721 |
3 |
% |
|||||||||||||||
Total assets |
18,428,874 |
17,876,945 |
3 |
% |
17,745,066 |
4 |
% |
18,018,588 |
17,344,095 |
4 |
% |
|||||||||||||||
Interest bearing deposits |
9,726,190 |
9,088,942 |
7 |
% |
9,144,727 |
6 |
% |
9,365,315 |
9,160,884 |
2 |
% |
|||||||||||||||
Interest bearing liabilities |
10,493,971 |
9,985,328 |
5 |
% |
9,661,560 |
9 |
% |
10,107,610 |
9,683,035 |
4 |
% |
|||||||||||||||
Noninterest bearing demand deposits |
5,719,155 |
5,715,830 |
— |
% |
5,848,983 |
(2 |
)% |
5,702,754 |
5,451,908 |
5 |
% |
|||||||||||||||
Stockholders’ equity |
2,032,362 |
2,016,577 |
1 |
% |
2,092,018 |
(3 |
)% |
2,046,351 |
2,068,676 |
(1 |
) % |
|||||||||||||||
Net interest earning assets |
6,905,747 |
6,900,657 |
— |
% |
7,193,031 |
(4 |
)% |
6,938,309 |
6,790,686 |
2 |
% |
|||||||||||||||
LOAN PORTFOLIO COMPOSITION: |
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
|||||||||||||||||||||
Commercial loans |
$ |
5,124,421 |
$ |
4,395,738 |
17 |
% |
$ |
3,857,879 |
33 |
% |
||||||||||||||||
Real estate loans |
9,504,893 |
9,335,020 |
2 |
% |
8,908,657 |
7 |
% |
|||||||||||||||||||
Consumer and other loans |
861,873 |
815,291 |
6 |
% |
652,155 |
32 |
% |
|||||||||||||||||||
Loans, net of deferred loan fees and costs |
15,491,187 |
14,546,049 |
6 |
% |
13,418,691 |
15 |
% |
|||||||||||||||||||
Allowance for credit losses |
(160,561 |
) |
(151,580 |
) |
6 |
% |
(136,774 |
) |
17 |
% |
||||||||||||||||
Loans receivable, net |
$ |
15,330,626 |
$ |
14,394,469 |
7 |
% |
$ |
13,281,917 |
15 |
% |
||||||||||||||||
REAL ESTATE LOANS BY PROPERTY TYPE: |
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
|||||||||||||||||||||
Retail buildings |
$ |
2,632,564 |
$ |
2,603,516 |
1 |
% |
$ |
2,466,881 |
7 |
% |
||||||||||||||||
Hotels/motels |
1,091,047 |
1,143,982 |
(5 |
)% |
1,385,003 |
(21 |
)% |
|||||||||||||||||||
Gas stations/car washes |
1,056,217 |
1,080,777 |
(2 |
)% |
999,069 |
6 |
% |
|||||||||||||||||||
Mixed-use facilities |
825,289 |
833,342 |
(1 |
)% |
819,516 |
1 |
% |
|||||||||||||||||||
Warehouses |
1,271,104 |
1,279,647 |
(1 |
)% |
1,160,863 |
9 |
% |
|||||||||||||||||||
Multifamily |
1,199,320 |
989,840 |
21 |
% |
691,262 |
73 |
% |
|||||||||||||||||||
Other |
1,429,352 |
1,403,916 |
2 |
% |
1,386,063 |
3 |
% |
|||||||||||||||||||
Total |
$ |
9,504,893 |
$ |
9,335,020 |
2 |
% |
$ |
8,908,657 |
7 |
% |
||||||||||||||||
DEPOSIT COMPOSITION |
9/30/2022 |
6/30/2022 |
% change |
9/30/2021 |
% change |
|||||||||||||||||||||
Noninterest bearing demand deposits |
$ |
5,590,952 |
$ |
5,689,992 |
(2 |
)% |
$ |
6,007,586 |
(7 |
)% |
||||||||||||||||
Money market and other |
5,885,093 |
6,339,467 |
(7 |
)% |
5,871,567 |
— |
% |
|||||||||||||||||||
Saving deposits |
317,841 |
326,927 |
(3 |
)% |
314,603 |
1 |
% |
|||||||||||||||||||
Time deposits |
3,708,323 |
2,673,244 |
39 |
% |
2,868,771 |
29 |
% |
|||||||||||||||||||
Total deposits |
$ |
15,502,209 |
$ |
15,029,630 |
3 |
% |
$ |
15,062,527 |
3 |
% |
||||||||||||||||
Hope Bancorp, Inc. |
|||||||||||||||||||||||||||
Selected Financial Data |
|||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
|||||||||||||||||||||||||||
CAPITAL RATIOS: |
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||||||||||||||||||
Total stockholders’ equity |
$ |
1,975,725 |
$ |
2,000,369 |
$ |
2,074,398 |
|||||||||||||||||||||
Common equity tier 1 ratio |
10.32 |
% |
10.69 |
% |
11.01 |
% |
|||||||||||||||||||||
Tier 1 risk-based capital ratio |
10.91 |
% |
11.33 |
% |
11.70 |
% |
|||||||||||||||||||||
Total risk-based capital ratio |
11.72 |
% |
12.13 |
% |
12.42 |
% |
|||||||||||||||||||||
Tier 1 leverage ratio |
10.25 |
% |
10.32 |
% |
9.98 |
% |
|||||||||||||||||||||
Total risk weighted assets |
$ |
17,070,444 |
$ |
16,059,739 |
$ |
14,737,809 |
|||||||||||||||||||||
Book value per common share |
$ |
16.54 |
$ |
16.74 |
$ |
17.26 |
|||||||||||||||||||||
Tangible common equity to tangible assets (1) |
8.09 |
% |
8.68 |
% |
9.24 |
% |
|||||||||||||||||||||
Tangible common equity per share (1) |
$ |
12.60 |
$ |
12.80 |
$ |
13.33 |
|||||||||||||||||||||
(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. |
|||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES CHANGES: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
9/30/2022 |
9/30/2021 |
||||||||||||||||||||
Balance at beginning of period |
$ |
151,580 |
$ |
147,450 |
$ |
140,550 |
$ |
136,774 |
$ |
189,452 |
$ |
140,550 |
$ |
206,741 |
|||||||||||||
Provision (credit) for credit losses |
9,200 |
3,200 |
(11,000 |
) |
1,500 |
(10,000 |
) |
1,400 |
(13,700 |
) |
|||||||||||||||||
Recoveries |
331 |
1,642 |
19,403 |
3,615 |
1,906 |
21,376 |
4,630 |
||||||||||||||||||||
Charge offs |
(550 |
) |
(712 |
) |
(1,503 |
) |
(1,339 |
) |
(44,584 |
) |
(2,765 |
) |
(60,897 |
) |
|||||||||||||
Balance at end of period |
$ |
160,561 |
$ |
151,580 |
$ |
147,450 |
$ |
140,550 |
$ |
136,774 |
$ |
160,561 |
$ |
136,774 |
|||||||||||||
Net charge offs (recoveries)/average loans receivable (annualized) |
0.01 |
% |
(0.03 |
)% |
(0.52 |
)% |
(0.07 |
)% |
1.28 |
% |
(0.17 |
)% |
0.56 |
% |
|||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||
NET LOAN CHARGE OFFS (RECOVERIES): |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
9/30/2022 |
9/30/2021 |
||||||||||||||||||||
Real estate loans |
$ |
9 |
$ |
(508 |
) |
$ |
(16,418 |
) |
$ |
(2,352 |
) |
$ |
40,542 |
$ |
(16,917 |
) |
$ |
54,057 |
|||||||||
Commercial loans |
115 |
(461 |
) |
(1,529 |
) |
144 |
1,117 |
(1,875 |
) |
1,218 |
|||||||||||||||||
Consumer loans |
95 |
39 |
47 |
(68 |
) |
1,019 |
181 |
992 |
|||||||||||||||||||
Total net charge offs (recoveries) |
$ |
219 |
$ |
(930 |
) |
$ |
(17,900 |
) |
$ |
(2,276 |
) |
$ |
42,678 |
$ |
(18,611 |
) |
$ |
56,267 |
|||||||||
Hope Bancorp, Inc. |
|||||||||||||||||||
Selected Financial Data |
|||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
|||||||||||||||||||
NONPERFORMING ASSETS: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
||||||||||||||
Loans on nonaccrual status (1) |
$ |
64,571 |
$ |
69,522 |
$ |
52,717 |
$ |
54,616 |
$ |
54,380 |
|||||||||
Delinquent loans 90 days or more on accrual status |
5,306 |
12,468 |
3,090 |
2,131 |
4,567 |
||||||||||||||
Accruing troubled debt restructured loans |
25,631 |
26,572 |
44,555 |
52,418 |
39,509 |
||||||||||||||
Total nonperforming loans |
95,508 |
108,562 |
100,362 |
109,165 |
98,456 |
||||||||||||||
Other real estate owned |
1,480 |
2,010 |
2,010 |
2,597 |
15,213 |
||||||||||||||
Total nonperforming assets |
$ |
96,988 |
$ |
110,572 |
$ |
102,372 |
$ |
111,762 |
$ |
113,669 |
|||||||||
Nonperforming assets/total assets |
0.51 |
% |
0.61 |
% |
0.58 |
% |
0.62 |
% |
0.64 |
% |
|||||||||
Nonperforming assets/loans receivable & OREO |
0.63 |
% |
0.76 |
% |
0.73 |
% |
0.80 |
% |
0.85 |
% |
|||||||||
Nonperforming assets/total capital |
4.91 |
% |
5.53 |
% |
5.02 |
% |
5.34 |
% |
5.48 |
% |
|||||||||
Nonperforming loans/loans receivable |
0.62 |
% |
0.75 |
% |
0.71 |
% |
0.78 |
% |
0.73 |
% |
|||||||||
Nonaccrual loans/loans receivable |
0.42 |
% |
0.48 |
% |
0.37 |
% |
0.39 |
% |
0.41 |
% |
|||||||||
Allowance for credit losses/loans receivable |
1.04 |
% |
1.04 |
% |
1.05 |
% |
1.01 |
% |
1.02 |
% |
|||||||||
Allowance for credit losses/nonaccrual loans |
248.66 |
% |
218.03 |
% |
279.70 |
% |
257.34 |
% |
251.52 |
% |
|||||||||
Allowance for credit losses/nonperforming loans |
168.11 |
% |
139.63 |
% |
146.92 |
% |
128.75 |
% |
138.92 |
% |
|||||||||
Allowance for credit losses/nonperforming assets |
165.55 |
% |
137.09 |
% |
144.03 |
% |
125.76 |
% |
120.33 |
% |
|||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.9 million, $13.2 million, $17.0 million, $19.5 million, and $20.6 million, at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively. |
|||||||||||||||||||
NONACCRUAL LOANS BY TYPE: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
||||||||||||||
Real estate loans |
$ |
47,807 |
$ |
53,966 |
$ |
36,655 |
$ |
39,756 |
$ |
41,673 |
|||||||||
Commercial loans |
7,675 |
8,206 |
8,686 |
11,025 |
10,991 |
||||||||||||||
Consumer loans |
9,089 |
7,350 |
7,376 |
3,835 |
1,716 |
||||||||||||||
Total |
$ |
64,571 |
$ |
69,522 |
$ |
52,717 |
$ |
54,616 |
$ |
54,380 |
|||||||||
ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
||||||||||||||
Retail buildings |
$ |
5,474 |
$ |
6,337 |
$ |
24,356 |
$ |
28,483 |
$ |
11,280 |
|||||||||
Hotels/motels |
— |
— |
— |
472 |
— |
||||||||||||||
Gas stations/car washes |
185 |
189 |
193 |
197 |
202 |
||||||||||||||
Mixed-use facilities |
2,832 |
2,837 |
2,836 |
2,846 |
7,937 |
||||||||||||||
Warehouses |
4,988 |
4,770 |
5,321 |
5,366 |
4,908 |
||||||||||||||
Other (2) |
12,152 |
12,439 |
11,849 |
15,054 |
15,182 |
||||||||||||||
Total |
$ |
25,631 |
$ |
26,572 |
$ |
44,555 |
$ |
52,418 |
$ |
39,509 |
|||||||||
(2) Includes commercial business, consumer, and other loans |
|||||||||||||||||||
Hope Bancorp, Inc. |
||||||||||||||
Selected Financial Data |
||||||||||||||
Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|||||||||
30 - 59 days |
$ |
13,092 |
$ |
10,090 |
$ |
12,439 |
$ |
29,723 |
$ |
15,016 |
||||
60 - 89 days |
4,933 |
6,354 |
3,090 |
10,345 |
4,746 |
|||||||||
Total |
$ |
18,025 |
$ |
16,444 |
$ |
15,529 |
$ |
40,068 |
$ |
19,762 |
||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|||||||||
Real estate loans |
$ |
9,694 |
$ |
7,919 |
$ |
6,097 |
$ |
20,232 |
$ |
10,359 |
||||
Commercial loans |
6,165 |
3,397 |
5,003 |
3,057 |
9,377 |
|||||||||
Consumer loans |
2,166 |
5,128 |
4,429 |
16,779 |
26 |
|||||||||
Total |
$ |
18,025 |
$ |
16,444 |
$ |
15,529 |
$ |
40,068 |
$ |
19,762 |
||||
CRITICIZED LOANS: |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|||||||||
Special mention |
$ |
79,399 |
$ |
95,797 |
$ |
166,958 |
$ |
257,194 |
$ |
306,766 |
||||
Substandard |
204,713 |
244,748 |
226,661 |
242,397 |
243,684 |
|||||||||
Total criticized loans |
$ |
284,112 |
$ |
340,545 |
$ |
393,619 |
$ |
499,591 |
$ |
550,450 |
||||
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. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below. |
||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
9/30/2022 |
6/30/2022 |
9/30/2021 |
9/30/2022 |
9/30/2021 |
||||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY |
||||||||||||||||||||
Average stockholders’ equity |
$ |
2,032,362 |
$ |
2,016,577 |
$ |
2,092,018 |
$ |
2,046,351 |
$ |
2,068,676 |
||||||||||
Less: Goodwill and core deposit intangible assets, net |
(470,941 |
) |
(471,421 |
) |
(472,918 |
) |
(471,424 |
) |
(473,438 |
) |
||||||||||
Average tangible common equity |
$ |
1,561,421 |
$ |
1,545,156 |
$ |
1,619,100 |
$ |
1,574,927 |
$ |
1,595,238 |
||||||||||
Net income |
$ |
53,748 |
$ |
52,088 |
$ |
55,499 |
$ |
166,574 |
$ |
152,949 |
||||||||||
Return on average tangible common equity (annualized) |
13.77 |
% |
13.48 |
% |
13.71 |
% |
14.10 |
% |
12.78 |
% |
||||||||||
9/30/2022 |
6/30/2022 |
9/30/2021 |
||||||||||||||||||
TANGIBLE COMMON EQUITY |
||||||||||||||||||||
Total stockholders’ equity |
$ |
1,975,725 |
$ |
2,000,369 |
$ |
2,074,398 |
||||||||||||||
Less: Goodwill and core deposit intangible assets, net |
(470,662 |
) |
(471,148 |
) |
(472,630 |
) |
||||||||||||||
Tangible common equity |
$ |
1,505,063 |
$ |
1,529,221 |
$ |
1,601,768 |
||||||||||||||
Total assets |
$ |
19,083,388 |
$ |
18,089,062 |
$ |
17,799,026 |
||||||||||||||
Less: Goodwill and core deposit intangible assets, net |
(470,662 |
) |
(471,148 |
) |
(472,630 |
) |
||||||||||||||
Tangible assets |
$ |
18,612,726 |
$ |
17,617,914 |
$ |
17,326,396 |
||||||||||||||
Common shares outstanding |
119,479,253 |
119,473,939 |
120,198,061 |
|||||||||||||||||
Tangible common equity to tangible assets |
8.09 |
% |
8.68 |
% |
9.24 |
% |
||||||||||||||
Tangible common equity per share |
$ |
12.60 |
$ |
12.80 |
$ |
13.33 |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
9/30/2022 |
6/30/2022 |
9/30/2021 |
9/30/2022 |
9/30/2021 |
||||||||||||||||
PRE-PROVISION NET REVENUE |
||||||||||||||||||||
Net interest income before provision (credit) for credit losses |
$ |
153,186 |
$ |
141,538 |
$ |
130,296 |
$ |
427,900 |
$ |
379,452 |
||||||||||
Noninterest income |
13,355 |
12,746 |
10,617 |
39,287 |
30,497 |
|||||||||||||||
Revenue |
166,541 |
154,284 |
140,913 |
467,187 |
409,949 |
|||||||||||||||
Less noninterest expense |
83,914 |
80,365 |
75,502 |
239,652 |
219,056 |
|||||||||||||||
Pre-provision net revenue |
$ |
82,627 |
$ |
73,919 |
$ |
65,411 |
$ |
227,535 |
$ |
190,893 |
||||||||||
Average assets |
$ |
18,428,874 |
$ |
17,876,945 |
$ |
17,745,066 |
$ |
18,018,588 |
$ |
17,344,095 |
||||||||||
ROA (PPNR) |
1.79 |
% |
1.65 |
% |
1.47 |
% |
1.68 |
% |
1.47 |
% |
||||||||||
Average stockholders’ equity |
2,032,362 |
2,016,577 |
2,092,018 |
2,046,351 |
2,068,676 |
|||||||||||||||
ROE (PPNR) |
16.26 |
% |
14.66 |
% |
12.51 |
% |
14.83 |
% |
12.30 |
% |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221024005881/en/
Alex Ko Senior EVP & Chief Financial Officer 213-427-6560 alex.ko@bankofhope.com
Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 angie.yang@bankofhope.com
Source: Hope Bancorp, Inc.