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 full year ended December 31, 2023. For the three months ended December 31, 2023, net income totaled $26.5 million, or $0.22 per diluted common share. For the full year ended December 31, 2023, net income totaled $133.7 million, or $1.11 per diluted common share.
“Net income for the 2023 fourth quarter was $26.5 million, or $38.3 million excluding the FDIC special assessment and restructuring charges related to our strategic reorganization,” stated Kevin S. Kim, Chairman, President and Chief Executive Officer. “Excluding these notable items, our net income was up 26% quarter-over-quarter. Continued focus on expense discipline and improvements in our credit quality metrics were important contributors to our net income growth. Nonperforming assets decreased 26%, and criticized loans declined 11% from September 30, 2023. Net charge offs for the 2023 fourth quarter were a very low five basis points, annualized, of average loans.
“We grew tangible book value 6% year-over-year, and all our regulatory risk-based capital ratios expanded,” continued Kim. “At December 31, 2023, the Company’s total capital ratio was 13.9% and common equity tier 1 capital ratio was 12.3%. Our strong capital positions the Bank well to support all our customers in their growth plans for the new year.
“The 2023 fourth quarter was an important building quarter for the Company with the announcement of our strategic reorganization in October. We believe our realignment around lines of business and products will enable Bank of Hope to operate more efficiently, support high-quality loan and deposit growth, and deliver improved returns in the years to come, enhancing stockholder value over the long term,” concluded Kim. “I wish to thank all our team members at Bank of Hope for their continued dedication to our organization and their excellence in serving our customers.”
Operating Results for the 2023 Fourth Quarter
Net income and earnings per share. Net income for the 2023 fourth quarter was $26.5 million, or $0.22 per diluted common share, compared with $30.0 million, or $0.25 per diluted common share, for the immediately preceding third quarter. Notable items impacting net income in the fourth quarter of 2023 were $8.7 million of restructuring costs, after tax, related to the Company’s previously announced strategic reorganization, and $3.1 million, after tax, accrued for the Federal Deposit Insurance Corporation (“FDIC”) special assessment, which was approved by the FDIC Board of Directors in November 2023. Excluding these notable items, net income for the 2023 fourth quarter was $38.3 million(1), up 26% from $30.4 million (excluding $376,000, after tax, of restructuring costs) for the third quarter of 2023. Earnings per diluted common share excluding notable items(1) amounted to $0.32 for the three months ended December 31, 2023, up 28% compared with $0.25 per diluted common share for the immediately preceding third quarter.
Net interest income and net interest margin. Net interest income before provision for credit losses for the 2023 fourth quarter totaled $125.9 million, compared with $135.4 million in the immediately preceding third quarter, a decrease of 7% quarter-over-quarter. Fourth quarter 2023 net interest margin contracted 13 basis points to 2.70%, from 2.83% in the 2023 third quarter. The linked quarter change in net interest income and net interest margin reflected a higher cost of interest bearing deposits and a decrease in the average balance of loans, partially offset by higher yields on investment securities and other earning assets, as well as a decrease in the average balance of interest bearing deposits. In addition, the third quarter of 2023 included $3.1 million of recovered interest income related to one borrower relationship, which contributed eight basis points to the average loan yield and six basis points to the net interest margin in the third quarter.
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(1) |
Net income, excluding the FDIC special assessment and restructuring charges (also referred to collectively as the “notable items”), and earnings per diluted common share excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|
Noninterest income. Noninterest income for the 2023 fourth quarter totaled $9.3 million, increasing 12% from $8.3 million in the immediately preceding third quarter. Growth was well distributed across various fee income lines. The Company did not sell any SBA 7(a) loans during the second half of 2023, retaining loan production on the balance sheet instead.
Noninterest expense. Noninterest expense for the 2023 fourth quarter was $99.9 million, including $11.1 million of pre-tax restructuring costs, primarily comprising severance costs, planned branch consolidation charges and professional fees, and $4.0 million (pre-tax) accrued for the FDIC special assessment. Excluding these notable items, fourth quarter 2023 noninterest expense(2) was $84.8 million, down 2% from $86.4 million (excluding $500,000, pre-tax, of restructuring charges) in the 2023 third quarter. Fourth quarter 2023 salaries and employee benefits expense decreased 7% to $47.4 million, down from $51.0 million in the 2023 third quarter, reflecting the reduction to total headcount related to the restructuring. Other noninterest expense increased quarter-over-quarter, primarily reflecting increased CRA investment expense and provision for unfunded loan commitments.
Tax rate. The effective tax rate for the 2023 fourth quarter was 21.2%, compared with 24.9% for the immediately preceding third quarter. For the full year 2023, the effective tax rate was 24.9%, compared with 26.3% for the full year 2022.
Balance Sheet Summary
Cash and investment securities. At December 31, 2023, cash and cash equivalents totaled $1.93 billion, compared with $2.50 billion at September 30, 2023, primarily driven by a decrease in deposit balances. At December 31, 2022, cash and equivalents were $506.8 million. Investment securities totaled $2.41 billion at December 31, 2023, up from $2.26 billion at September 30, 2023, and $2.24 billion at December 31, 2022.
Loans. Loans receivable of $13.85 billion at December 31, 2023, decreased 3% from $14.31 billion at September 30, 2023, reflecting declines in commercial and commercial real estate loans, partially offset by growth in residential mortgage loans. During the 2023 fourth quarter, the Company exited its residential mortgage warehouse line business, which accounted for $64.7 million of the linked quarter decrease in loans. Fourth quarter average loans of $14.05 billion decreased 3% quarter-over-quarter.
The following table sets forth the loan portfolio composition at December 31, 2023, September 30, 2023, and December 31, 2022:
(dollars in thousands) (unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||||||||
Balance |
Percentage |
Balance |
Percentage |
Balance |
Percentage |
|||||||||||||
Commercial real estate (“CRE”) loans |
$ |
8,797,884 |
63.6 |
% |
$ |
8,972,886 |
62.7 |
% |
$ |
9,414,580 |
61.1 |
% |
||||||
Commercial and industrial (“C&I”) loans |
4,135,044 |
29.8 |
% |
4,450,341 |
31.1 |
% |
5,109,532 |
33.2 |
% |
|||||||||
Residential mortgage and other loans |
920,691 |
6.6 |
% |
882,966 |
6.2 |
% |
879,428 |
5.7 |
% |
|||||||||
Loans receivable |
$ |
13,853,619 |
100.0 |
% |
$ |
14,306,193 |
100.0 |
% |
$ |
15,403,540 |
100.0 |
% |
||||||
Deposits. Total deposits of $14.75 billion at December 31, 2023, decreased 6% from $15.74 billion at September 30, 2023. Fourth quarter 2023 average deposits of $15.26 billion decreased 3% quarter-over-quarter. During the fourth quarter of 2023, the Company reduced brokered time deposits by $449.9 million, or 25% from September 30, 2023. Noninterest bearing demand deposits decreased in the fourth quarter of 2023 primarily due to seasonality of funds from commercial customers in the residential mortgage business; these customers were unrelated to the exit of residential mortgage warehouse lending.
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(2) |
Noninterest expense, excluding notable items, is a non-GAAP financial measure. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11. |
|
The gross loan-to-deposit ratio was 93.9% at December 31, 2023, compared with 91.0% at September 30, 2023, and 98.2% at December 31, 2022.
The following table sets forth the deposit composition at December 31, 2023, September 30, 2023, and December 31, 2022:
(dollars in thousands) (unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||||||||
Balance |
Percentage |
Balance |
Percentage |
Balance |
Percentage |
|||||||||||||
Noninterest bearing demand deposits |
$ |
3,914,967 |
26.5 |
% |
$ |
4,249,788 |
27.0 |
% |
$ |
4,849,493 |
30.8 |
% |
||||||
Money market, interest bearing demand, and savings deposits |
4,872,029 |
33.0 |
% |
4,855,683 |
30.9 |
% |
5,899,248 |
37.5 |
% |
|||||||||
Time deposits |
5,966,757 |
40.5 |
% |
6,634,388 |
42.1 |
% |
4,990,060 |
31.7 |
% |
|||||||||
Total deposits |
$ |
14,753,753 |
100.0 |
% |
$ |
15,739,859 |
100.0 |
% |
$ |
15,738,801 |
100.0 |
% |
||||||
Gross loan-to-deposit ratio |
93.9 |
% |
91.0 |
% |
98.2 |
% |
||||||||||||
Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $1.80 billion at December 31, 2023, unchanged from September 30, 2023, and up from $865.0 million at December 31, 2022.
Credit Quality and Allowance for Credit Losses
Nonperforming assets. Nonperforming assets totaled $45.5 million at December 31, 2023, a decrease of 26% from $61.7 million at September 30, 2023. The nonperforming assets ratio was 0.24% of total assets at December 31, 2023, an improvement from 0.31% of total assets at September 30, 2023.
The following table sets forth the components of nonperforming assets at December 31, 2023, September 30, 2023, and December 31, 2022:
(dollars in thousands) (unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||
Loans on nonaccrual status (1) |
$ |
45,204 |
$ |
39,081 |
$ |
49,687 |
||||||
Accruing delinquent loans past due 90 days or more |
261 |
21,579 |
401 |
|||||||||
Accruing troubled debt restructured loans (2) |
— |
— |
16,931 |
|||||||||
Total nonperforming loans |
45,465 |
60,660 |
67,019 |
|||||||||
Other real estate owned |
63 |
1,043 |
2,418 |
|||||||||
Total nonperforming assets |
$ |
45,528 |
$ |
61,703 |
$ |
69,437 |
||||||
Nonperforming assets/total assets |
0.24 |
% |
0.31 |
% |
0.36 |
% |
||||||
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(1) |
Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million and $9.8 million at December 31, 2023, September 30, 2023, and December 31, 2022, respectively. |
|
(2) |
The Company adopted ASU 2022-02 in 2023, which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans. |
|
Criticized loans. Criticized loans decreased 11% quarter-over-quarter to $322.4 million at December 31, 2023, down from $360.8 million at September 30, 2023. Both special mention and substandard loans decreased quarter-over-quarter. The decrease was largely driven by upgrades, along with payoffs and note sales. As of December 31, 2022, criticized loans totaled $261.3 million.
Net charge offs and provision for credit losses. The Company recorded net charge offs of $1.8 million in the 2023 fourth quarter, equivalent to 0.05%, annualized, of average loans. This was an improvement from net charge offs of $31.0 million, or 0.85%, annualized, of average loans in the immediately preceding third quarter. Accordingly, the Company recorded a provision for credit losses of $1.7 million for the 2023 fourth quarter, compared with $16.8 million in the immediately preceding third quarter. For the full year 2023, net charge offs were 0.22% of average loans, compared with net recoveries of (0.08)% of average loans for the full year 2022.
The following table sets forth net charge offs (recoveries) and the provision for credit losses for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, and for the twelve months ended December 31, 2023 and 2022:
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||||||||
(dollars in thousands) (unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||
Net charge offs (recoveries) |
$ |
1,815 |
$ |
30,987 |
$ |
6,402 |
$ |
32,358 |
$ |
(12,209 |
) |
|||||||||
Net charge offs (recoveries)/average loans receivable (annualized) |
0.05 |
% |
0.85 |
% |
0.17 |
% |
0.22 |
% |
(0.08 |
)% |
||||||||||
Provision for credit losses |
$ |
1,700 |
$ |
16,800 |
$ |
8,200 |
$ |
29,100 |
$ |
9,600 |
||||||||||
Allowance for credit losses. The allowance for credit losses totaled $158.7 million at December 31, 2023, compared with $158.8 million at September 30, 2023. The allowance coverage ratio increased to 1.15% of loans receivable at December 31, 2023, up from 1.11% at September 30, 2023. Year-over-year, allowance coverage of loans receivable increased from 1.05% at December 31, 2022.
The following table sets forth the allowance for credit losses and the coverage ratios at December 31, 2023, September 30, 2023, and December 31, 2022:
(dollars in thousands) (unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||
Allowance for credit losses |
$ |
158,694 |
$ |
158,809 |
$ |
162,359 |
||||||
Allowance for credit losses/loans receivable |
1.15 |
% |
1.11 |
% |
1.05 |
% |
||||||
Capital
The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At December 31, 2023, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at December 31, 2023, September 30, 2023, and December 31, 2022:
(unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
Minimum Guideline for “Well-Capitalized” |
||||
Common Equity Tier 1 Capital Ratio |
12.28% |
11.67% |
10.55% |
6.50% |
||||
Tier 1 Capital Ratio |
12.96% |
12.32% |
11.15% |
8.00% |
||||
Total Capital Ratio |
13.92% |
13.23% |
11.97% |
10.00% |
||||
Leverage Ratio |
10.11% |
9.83% |
10.15% |
5.00% |
At December 31, 2023, total stockholders’ equity was $2.12 billion, or $17.66 per common share. Quarter-over-quarter, stockholders’ equity increased 4%, or $90.8 million, primarily reflecting a positive change in accumulated other comprehensive income (“AOCI”) and growth in retained earnings. Tangible common equity (“TCE”) per share was $13.76 at December 31, 2023, up 6% from September 30, 2023, and the TCE ratio was 8.86%, up 90 basis points quarter-over-quarter.
The following table sets forth the TCE per share and the TCE ratio at December 31, 2023, September 30, 2023, and December 31, 2022:
(unaudited) |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||
TCE per share (1) |
$13.76 |
$13.01 |
$12.96 |
|||
TCE ratio (1) |
8.86% |
7.96% |
8.29% |
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(1) |
TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|
Investor Conference Call
The Company previously announced that it will host an investor conference call on Tuesday, January 30, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter and full year ended December 31, 2023. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 6, 2024, replay access code 4752295.
Non-GAAP Financial Metrics
This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items and noninterest expense / average assets excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.13 billion in total assets as of December 31, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business and economic environment in which we operate, projections of future performance, perceived opportunities in the market, statements regarding our business strategies, objectives and vision, and statements about our strategic reorganization. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share data) |
||||||||||||||||||
Assets: |
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
|||||||||||||
Cash and due from banks |
$ |
1,928,967 |
$ |
2,500,323 |
(23 |
)% |
$ |
506,776 |
281 |
% |
||||||||
Investment securities |
2,408,971 |
2,260,837 |
7 |
% |
2,243,195 |
7 |
% |
|||||||||||
Federal Home Loan Bank (“FHLB”) stock and other investments |
61,000 |
60,433 |
1 |
% |
61,761 |
(1 |
)% |
|||||||||||
Loans held for sale, at the lower of cost or fair value |
3,408 |
19,502 |
(83 |
)% |
49,245 |
(93 |
)% |
|||||||||||
Loans receivable |
13,853,619 |
14,306,193 |
(3 |
)% |
15,403,540 |
(10 |
)% |
|||||||||||
Allowance for credit losses |
(158,694 |
) |
(158,809 |
) |
— |
% |
(162,359 |
) |
(2 |
)% |
||||||||
Net loans receivable |
13,694,925 |
14,147,384 |
(3 |
)% |
15,241,181 |
(10 |
)% |
|||||||||||
Accrued interest receivable |
61,720 |
60,665 |
2 |
% |
55,460 |
11 |
% |
|||||||||||
Premises and equipment, net |
50,611 |
51,764 |
(2 |
)% |
46,859 |
8 |
% |
|||||||||||
Goodwill and intangible assets |
468,385 |
468,832 |
— |
% |
470,176 |
— |
% |
|||||||||||
Other assets |
453,535 |
506,624 |
(10 |
)% |
489,838 |
(7 |
)% |
|||||||||||
Total assets |
$ |
19,131,522 |
$ |
20,076,364 |
(5 |
)% |
$ |
19,164,491 |
— |
% |
||||||||
Liabilities: |
||||||||||||||||||
Deposits |
$ |
14,753,753 |
$ |
15,739,859 |
(6 |
)% |
$ |
15,738,801 |
(6 |
)% |
||||||||
FHLB and Federal Reserve Bank (“FRB”) borrowings |
1,795,726 |
1,795,726 |
— |
% |
865,000 |
108 |
% |
|||||||||||
Subordinated debentures and convertible notes, net |
108,269 |
107,949 |
— |
% |
323,713 |
(67 |
)% |
|||||||||||
Accrued interest payable |
168,174 |
166,831 |
1 |
% |
26,668 |
531 |
% |
|||||||||||
Other liabilities |
184,357 |
235,575 |
(22 |
)% |
190,981 |
(3 |
)% |
|||||||||||
Total liabilities |
$ |
17,010,279 |
$ |
18,045,940 |
(6 |
)% |
$ |
17,145,163 |
(1 |
)% |
||||||||
Stockholders’ Equity: |
||||||||||||||||||
Common stock, $0.001 par value |
$ |
138 |
$ |
137 |
1 |
% |
$ |
137 |
1 |
% |
||||||||
Additional paid-in capital |
1,439,963 |
1,436,769 |
— |
% |
1,431,003 |
1 |
% |
|||||||||||
Retained earnings |
1,150,547 |
1,140,870 |
1 |
% |
1,083,712 |
6 |
% |
|||||||||||
Treasury stock, at cost |
(264,667 |
) |
(264,667 |
) |
— |
% |
(264,667 |
) |
— |
% |
||||||||
Accumulated other comprehensive loss, net |
(204,738 |
) |
(282,685 |
) |
28 |
% |
(230,857 |
) |
11 |
% |
||||||||
Total stockholders’ equity |
2,121,243 |
2,030,424 |
4 |
% |
2,019,328 |
5 |
% |
|||||||||||
Total liabilities and stockholders’ equity |
$ |
19,131,522 |
$ |
20,076,364 |
(5 |
)% |
$ |
19,164,491 |
— |
% |
||||||||
Common stock shares - authorized |
150,000,000 |
150,000,000 |
150,000,000 |
|||||||||||||||
Common stock shares - outstanding |
120,126,786 |
120,026,220 |
119,495,209 |
|||||||||||||||
Treasury stock shares |
17,382,835 |
17,382,835 |
17,382,835 |
|||||||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
12/31/2023 |
12/31/2022 |
% change |
|||||||||||||||||
Interest and fees on loans |
$ |
221,020 |
$ |
229,937 |
(4 |
)% |
$ |
207,958 |
6 |
% |
$ |
892,563 |
$ |
660,732 |
35 |
% |
||||||||
Interest on investment securities |
18,398 |
17,006 |
8 |
% |
14,758 |
25 |
% |
66,063 |
52,220 |
27 |
% |
|||||||||||||
Interest on cash and deposits at other banks |
29,029 |
28,115 |
3 |
% |
942 |
NM |
87,361 |
1,295 |
NM |
|||||||||||||||
Interest on other investments and FHLB dividends |
777 |
735 |
6 |
% |
579 |
34 |
% |
2,891 |
1,868 |
55 |
% |
|||||||||||||
Total interest income |
269,224 |
275,793 |
(2 |
)% |
224,237 |
20 |
% |
1,048,878 |
716,115 |
46 |
% |
|||||||||||||
Interest on deposits |
121,305 |
117,854 |
3 |
% |
63,276 |
92 |
% |
441,231 |
114,839 |
284 |
% |
|||||||||||||
Interest on borrowings |
22,003 |
22,561 |
(2 |
)% |
10,440 |
111 |
% |
81,786 |
22,855 |
258 |
% |
|||||||||||||
Total interest expense |
143,308 |
140,415 |
2 |
% |
73,716 |
94 |
% |
523,017 |
137,694 |
280 |
% |
|||||||||||||
Net interest income before provision for credit losses |
125,916 |
135,378 |
(7 |
)% |
150,521 |
(16 |
)% |
525,861 |
578,421 |
(9 |
)% |
|||||||||||||
Provision for credit losses |
1,700 |
16,800 |
(90 |
)% |
8,200 |
(79 |
)% |
29,100 |
9,600 |
203 |
% |
|||||||||||||
Net interest income after provision for credit losses |
124,216 |
118,578 |
5 |
% |
142,321 |
(13 |
)% |
496,761 |
568,821 |
(13 |
)% |
|||||||||||||
Service fees on deposit accounts |
2,505 |
2,415 |
4 |
% |
2,159 |
16 |
% |
9,466 |
8,938 |
6 |
% |
|||||||||||||
Net gains on sales of SBA loans |
— |
— |
— |
% |
2,154 |
(100 |
)% |
4,097 |
16,343 |
(75 |
)% |
|||||||||||||
Other income and fees |
6,775 |
5,890 |
15 |
% |
7,797 |
(13 |
)% |
32,014 |
26,116 |
23 |
% |
|||||||||||||
Total noninterest income |
9,280 |
8,305 |
12 |
% |
12,110 |
(23 |
)% |
45,577 |
51,397 |
(11 |
)% |
|||||||||||||
Salaries and employee benefits |
47,364 |
51,033 |
(7 |
)% |
52,694 |
(10 |
)% |
207,871 |
204,719 |
2 |
% |
|||||||||||||
Occupancy |
7,231 |
7,149 |
1 |
% |
7,072 |
2 |
% |
28,868 |
28,267 |
2 |
% |
|||||||||||||
Furniture and equipment |
5,302 |
5,625 |
(6 |
)% |
5,045 |
5 |
% |
21,378 |
19,434 |
10 |
% |
|||||||||||||
Data processing and communications |
2,976 |
2,891 |
3 |
% |
2,860 |
4 |
% |
11,606 |
10,683 |
9 |
% |
|||||||||||||
FDIC assessment |
3,141 |
3,683 |
(15 |
)% |
1,596 |
97 |
% |
13,296 |
6,248 |
113 |
% |
|||||||||||||
FDIC special assessment |
3,971 |
— |
100 |
% |
— |
100 |
% |
3,971 |
— |
100 |
% |
|||||||||||||
Earned interest credit |
6,505 |
6,377 |
2 |
% |
5,002 |
30 |
% |
22,399 |
10,998 |
104 |
% |
|||||||||||||
Restructuring costs |
11,076 |
500 |
NM |
— |
100 |
% |
11,576 |
— |
100 |
% |
||||||||||||||
Other noninterest expense |
12,325 |
9,615 |
28 |
% |
10,249 |
20 |
% |
43,486 |
43,821 |
(1 |
)% |
|||||||||||||
Total noninterest expense |
99,891 |
86,873 |
15 |
% |
84,518 |
18 |
% |
364,451 |
324,170 |
12 |
% |
|||||||||||||
Income before income taxes |
33,605 |
40,010 |
(16 |
)% |
69,913 |
(52 |
)% |
177,887 |
296,048 |
(40 |
)% |
|||||||||||||
Income tax provision |
7,124 |
9,961 |
(28 |
)% |
18,210 |
(61 |
)% |
44,214 |
77,771 |
(43 |
)% |
|||||||||||||
Net income |
$ |
26,481 |
$ |
30,049 |
(12 |
)% |
$ |
51,703 |
(49 |
)% |
$ |
133,673 |
$ |
218,277 |
(39 |
)% |
||||||||
Earnings Per Common Share - Diluted |
$ |
0.22 |
$ |
0.25 |
$ |
0.43 |
$ |
1.11 |
$ |
1.81 |
||||||||||||||
Weighted Average Shares Outstanding - Diluted |
120,761,112 |
120,374,618 |
120,102,665 |
120,393,257 |
120,472,345 |
|||||||||||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited |
|||||||||||||||
For the Three Months Ended |
For the Twelve Months Ended |
||||||||||||||
Profitability measures (annualized): |
12/31/2023 |
9/30/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
||||||||||
ROA |
0.54 |
% |
0.60 |
% |
1.10 |
% |
0.67 |
% |
1.20 |
% |
|||||
ROA excluding notable items (1) |
0.78 |
% |
0.61 |
% |
1.10 |
% |
0.73 |
% |
1.20 |
% |
|||||
ROE |
5.17 |
% |
5.78 |
% |
10.35 |
% |
6.48 |
% |
10.73 |
% |
|||||
ROE excluding notable items (1) |
7.49 |
% |
5.85 |
% |
10.35 |
% |
7.05 |
% |
10.73 |
% |
|||||
ROTCE (1) |
6.71 |
% |
7.47 |
% |
13.54 |
% |
8.39 |
% |
13.97 |
% |
|||||
ROTCE excluding notable items (1) |
9.71 |
% |
7.56 |
% |
13.54 |
% |
9.13 |
% |
13.97 |
% |
|||||
Net interest margin |
2.70 |
% |
2.83 |
% |
3.36 |
% |
2.81 |
% |
3.36 |
% |
|||||
Efficiency ratio (not annualized) |
73.89 |
% |
60.46 |
% |
51.97 |
% |
63.78 |
% |
51.47 |
% |
|||||
Efficiency ratio excluding notable items (not annualized) (1) |
62.76 |
% |
60.11 |
% |
51.97 |
% |
61.06 |
% |
51.47 |
% |
|||||
Noninterest expense / average assets |
2.04 |
% |
1.73 |
% |
1.79 |
% |
1.84 |
% |
1.78 |
% |
|||||
Noninterest expense / average assets, excluding notable items (1) |
1.73 |
% |
1.72 |
% |
1.79 |
% |
1.76 |
% |
1.78 |
% |
|||||
(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items, and noninterest expense / average assets excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|||||||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
|||||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||||
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||||||||||||||||||
Interest |
Annualized |
Interest |
Annualized |
Interest |
Annualized |
||||||||||||||||||||||
Average |
Income/ |
Average |
Average |
Income/ |
Average |
Average |
Income/ |
Average |
|||||||||||||||||||
Balance |
Expense |
Yield/Cost |
Balance |
Expense |
Yield/Cost |
Balance |
Expense |
Yield/Cost |
|||||||||||||||||||
INTEREST EARNING ASSETS: |
|||||||||||||||||||||||||||
Loans, including loans held for sale |
$ |
14,052,953 |
$ |
221,020 |
6.24 |
% |
$ |
14,550,106 |
$ |
229,937 |
6.27 |
% |
$ |
15,393,843 |
$ |
207,958 |
5.36 |
% |
|||||||||
Investment securities |
2,283,613 |
18,398 |
3.20 |
% |
2,275,133 |
17,006 |
2.97 |
% |
2,254,678 |
14,758 |
2.60 |
% |
|||||||||||||||
Interest earning cash and deposits at other banks |
2,142,147 |
29,029 |
5.38 |
% |
2,106,469 |
28,115 |
5.30 |
% |
66,075 |
942 |
5.66 |
% |
|||||||||||||||
FHLB stock and other investments |
47,587 |
777 |
6.48 |
% |
47,316 |
735 |
6.16 |
% |
48,002 |
579 |
4.79 |
% |
|||||||||||||||
Total interest earning assets |
$ |
18,526,300 |
$ |
269,224 |
5.77 |
% |
$ |
18,979,024 |
$ |
275,793 |
5.77 |
% |
$ |
17,762,598 |
$ |
224,237 |
5.01 |
% |
|||||||||
INTEREST BEARING LIABILITIES: |
|||||||||||||||||||||||||||
Deposits: |
|||||||||||||||||||||||||||
Money market, interest bearing demand and savings |
$ |
4,821,222 |
$ |
45,662 |
3.76 |
% |
$ |
4,533,430 |
$ |
38,814 |
3.40 |
% |
$ |
6,030,576 |
$ |
35,959 |
2.37 |
% |
|||||||||
Time deposits |
6,327,191 |
75,643 |
4.74 |
% |
6,862,038 |
79,040 |
4.57 |
% |
4,276,655 |
27,317 |
2.53 |
% |
|||||||||||||||
Total interest bearing deposits |
11,148,413 |
121,305 |
4.32 |
% |
11,395,468 |
117,854 |
4.10 |
% |
10,307,231 |
63,276 |
2.44 |
% |
|||||||||||||||
FHLB and FRB borrowings |
1,795,740 |
19,224 |
4.25 |
% |
1,809,322 |
19,821 |
4.35 |
% |
838,335 |
6,988 |
3.31 |
% |
|||||||||||||||
Subordinated debentures and convertible notes |
104,198 |
2,779 |
10.44 |
% |
103,873 |
2,740 |
10.32 |
% |
319,498 |
3,452 |
4.23 |
% |
|||||||||||||||
Total interest bearing liabilities |
$ |
13,048,351 |
$ |
143,308 |
4.36 |
% |
$ |
13,308,663 |
$ |
140,415 |
4.19 |
% |
$ |
11,465,064 |
$ |
73,716 |
2.55 |
% |
|||||||||
Noninterest bearing demand deposits |
4,113,680 |
4,312,117 |
5,174,306 |
||||||||||||||||||||||||
Total funding liabilities/cost of funds |
$ |
17,162,031 |
3.31 |
% |
$ |
17,620,780 |
3.16 |
% |
$ |
16,639,370 |
1.76 |
% |
|||||||||||||||
Net interest income/net interest spread |
$ |
125,916 |
1.41 |
% |
$ |
135,378 |
1.58 |
% |
$ |
150,521 |
2.46 |
% |
|||||||||||||||
Net interest margin |
2.70 |
% |
2.83 |
% |
3.36 |
% |
|||||||||||||||||||||
Cost of deposits: |
|||||||||||||||||||||||||||
Noninterest bearing demand deposits |
$ |
4,113,680 |
$ |
— |
— |
% |
$ |
4,312,117 |
$ |
— |
— |
% |
$ |
5,174,306 |
$ |
— |
— |
% |
|||||||||
Interest bearing deposits |
11,148,413 |
121,305 |
4.32 |
% |
11,395,468 |
117,854 |
4.10 |
% |
10,307,231 |
63,276 |
2.44 |
% |
|||||||||||||||
Total deposits |
$ |
15,262,093 |
$ |
121,305 |
3.15 |
% |
$ |
15,707,585 |
$ |
117,854 |
2.98 |
% |
$ |
15,481,537 |
$ |
63,276 |
1.62 |
% |
|||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
||||||||||||||||||
Twelve Months Ended |
||||||||||||||||||
12/31/2023 |
12/31/2022 |
|||||||||||||||||
Interest |
Interest |
|||||||||||||||||
Average |
Income/ |
Average |
Average |
Income/ |
Average |
|||||||||||||
Balance |
Expense |
Yield/Cost |
Balance |
Expense |
Yield/Cost |
|||||||||||||
INTEREST EARNING ASSETS: |
||||||||||||||||||
Loans, including loans held for sale |
$ |
14,732,166 |
$ |
892,563 |
6.06 |
% |
$ |
14,634,627 |
$ |
660,732 |
4.51 |
% |
||||||
Investment securities |
2,262,840 |
66,063 |
2.92 |
% |
2,415,621 |
52,220 |
2.16 |
% |
||||||||||
Interest earning cash and deposits at other banks |
1,685,462 |
87,361 |
5.18 |
% |
116,689 |
1,295 |
1.11 |
% |
||||||||||
FHLB stock and other investments |
47,249 |
2,891 |
6.12 |
% |
59,624 |
1,868 |
3.13 |
% |
||||||||||
Total interest earning assets |
$ |
18,727,717 |
$ |
1,048,878 |
5.60 |
% |
$ |
17,226,561 |
$ |
716,115 |
4.16 |
% |
||||||
INTEREST BEARING LIABILITIES: |
||||||||||||||||||
Deposits: |
||||||||||||||||||
Money market, interest bearing demand and savings |
$ |
4,858,919 |
$ |
161,751 |
3.33 |
% |
$ |
6,517,879 |
$ |
72,763 |
1.12 |
% |
||||||
Time deposits |
6,409,056 |
279,480 |
4.36 |
% |
3,084,851 |
42,076 |
1.36 |
% |
||||||||||
Total interest bearing deposits |
11,267,975 |
441,231 |
3.92 |
% |
9,602,730 |
114,839 |
1.20 |
% |
||||||||||
FHLB and FRB borrowings |
1,618,292 |
69,365 |
4.29 |
% |
528,342 |
11,525 |
2.18 |
% |
||||||||||
Subordinated debentures and convertible notes |
181,125 |
12,421 |
6.76 |
% |
318,691 |
11,330 |
3.51 |
% |
||||||||||
Total interest bearing liabilities |
$ |
13,067,392 |
$ |
523,017 |
4.00 |
% |
$ |
10,449,763 |
$ |
137,694 |
1.32 |
% |
||||||
Noninterest bearing demand deposits |
4,362,043 |
5,569,542 |
||||||||||||||||
Total funding liabilities/cost of funds |
$ |
17,429,435 |
3.00 |
% |
$ |
16,019,305 |
0.86 |
% |
||||||||||
Net interest income/net interest spread |
$ |
525,861 |
1.60 |
% |
$ |
578,421 |
2.84 |
% |
||||||||||
Net interest margin |
2.81 |
% |
3.36 |
% |
||||||||||||||
Cost of deposits: |
||||||||||||||||||
Noninterest bearing demand deposits |
$ |
4,362,043 |
$ |
— |
— |
% |
$ |
5,569,542 |
$ |
— |
— |
% |
||||||
Interest bearing deposits |
11,267,975 |
441,231 |
3.92 |
% |
9,602,730 |
114,839 |
1.20 |
% |
||||||||||
Total deposits |
$ |
15,630,018 |
$ |
441,231 |
2.82 |
% |
$ |
15,172,272 |
$ |
114,839 |
0.76 |
% |
||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
|||||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||||||||||
AVERAGE BALANCES: |
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
12/31/2023 |
12/31/2022 |
% change |
|||||||||||||||||||
Loans, including loans held for sale |
$ |
14,052,953 |
$ |
14,550,106 |
(3 |
)% |
$ |
15,393,843 |
(9 |
)% |
$ |
14,732,166 |
$ |
14,634,627 |
1 |
% |
|||||||||||
Investment securities |
2,283,613 |
2,275,133 |
— |
% |
2,254,678 |
1 |
% |
2,262,840 |
2,415,621 |
(6 |
)% |
||||||||||||||||
Interest earning cash and deposits at other banks |
2,142,147 |
2,106,469 |
2 |
% |
66,075 |
NM |
1,685,462 |
116,689 |
NM |
||||||||||||||||||
Interest earning assets |
18,526,300 |
18,979,024 |
(2 |
)% |
17,762,598 |
4 |
% |
18,727,717 |
17,226,561 |
9 |
% |
||||||||||||||||
Goodwill and intangible assets |
468,622 |
469,079 |
— |
% |
470,442 |
— |
% |
469,298 |
471,176 |
— |
% |
||||||||||||||||
Total assets |
19,600,942 |
20,059,304 |
(2 |
)% |
18,863,726 |
4 |
% |
19,806,163 |
18,231,609 |
9 |
% |
||||||||||||||||
Noninterest bearing demand deposits |
4,113,680 |
4,312,117 |
(5 |
)% |
5,174,217 |
(20 |
)% |
4,362,043 |
5,569,534 |
(22 |
)% |
||||||||||||||||
Interest bearing deposits |
11,148,413 |
11,395,468 |
(2 |
)% |
10,307,231 |
8 |
% |
11,267,975 |
9,602,730 |
17 |
% |
||||||||||||||||
Total deposits |
15,262,093 |
15,707,585 |
(3 |
)% |
15,481,537 |
(1 |
)% |
15,630,180 |
15,172,272 |
3 |
% |
||||||||||||||||
Interest bearing liabilities |
13,048,351 |
13,308,663 |
(2 |
)% |
11,465,064 |
14 |
% |
13,067,392 |
10,449,763 |
25 |
% |
||||||||||||||||
Stockholders’ equity |
2,048,335 |
2,079,092 |
(1 |
)% |
1,997,460 |
3 |
% |
2,061,665 |
2,034,027 |
1 |
% |
||||||||||||||||
LOAN PORTFOLIO COMPOSITION: |
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
||||||||||||||||||||||
Commercial real estate (“CRE”) loans |
$ |
8,797,884 |
$ |
8,972,886 |
(2 |
)% |
$ |
9,414,580 |
(7 |
)% |
|||||||||||||||||
Commercial and industrial (“C&I”) loans |
4,135,044 |
4,450,341 |
(7 |
)% |
5,109,532 |
(19 |
)% |
||||||||||||||||||||
Residential mortgage and other loans |
920,691 |
882,966 |
4 |
% |
879,428 |
5 |
% |
||||||||||||||||||||
Loans receivable |
13,853,619 |
14,306,193 |
(3 |
)% |
15,403,540 |
(10 |
)% |
||||||||||||||||||||
Allowance for credit losses |
(158,694 |
) |
(158,809 |
) |
— |
% |
(162,359 |
) |
(2 |
)% |
|||||||||||||||||
Loans receivable, net |
$ |
13,694,925 |
$ |
14,147,384 |
(3 |
)% |
$ |
15,241,181 |
(10 |
)% |
|||||||||||||||||
CRE LOANS BY PROPERTY TYPE: |
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
||||||||||||||||||||||
Multi-tenant retail |
$ |
1,704,337 |
$ |
1,745,430 |
(2 |
)% |
$ |
1,866,434 |
(9 |
)% |
|||||||||||||||||
Hotels/motels |
796,267 |
826,732 |
(4 |
)% |
952,579 |
(16 |
)% |
||||||||||||||||||||
Gas stations and car washes |
1,030,888 |
1,037,621 |
(1 |
)% |
1,054,720 |
(2 |
)% |
||||||||||||||||||||
Mixed-use facilities |
870,664 |
813,571 |
7 |
% |
848,417 |
3 |
% |
||||||||||||||||||||
Industrial warehouses |
1,226,780 |
1,254,643 |
(2 |
)% |
1,294,893 |
(5 |
)% |
||||||||||||||||||||
Multifamily |
1,226,384 |
1,234,934 |
(1 |
)% |
1,295,644 |
(5 |
)% |
||||||||||||||||||||
Single-tenant retail |
662,705 |
671,921 |
(1 |
)% |
718,977 |
(8 |
)% |
||||||||||||||||||||
Office |
401,821 |
454,695 |
(12 |
)% |
473,459 |
(15 |
)% |
||||||||||||||||||||
All other |
878,038 |
933,339 |
(6 |
)% |
909,457 |
(3 |
)% |
||||||||||||||||||||
Total CRE loans |
$ |
8,797,884 |
$ |
8,972,886 |
(2 |
)% |
$ |
9,414,580 |
(7 |
)% |
|||||||||||||||||
DEPOSIT COMPOSITION: |
12/31/2023 |
9/30/2023 |
% change |
12/31/2022 |
% change |
||||||||||||||||||||||
Noninterest bearing demand deposits |
$ |
3,914,967 |
$ |
4,249,788 |
(8 |
)% |
$ |
4,849,493 |
(19 |
)% |
|||||||||||||||||
Money market, interest bearing demand, and savings |
4,872,029 |
4,855,683 |
— |
% |
5,899,248 |
(17 |
)% |
||||||||||||||||||||
Time deposits |
5,966,757 |
6,634,388 |
(10 |
)% |
4,990,060 |
20 |
% |
||||||||||||||||||||
Total deposits |
$ |
14,753,753 |
$ |
15,739,859 |
(6 |
)% |
$ |
15,738,801 |
(6 |
)% |
|||||||||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
||||||||||||||||||||||||||||
CAPITAL & CAPITAL RATIOS: |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||||||||||||||||||
Total stockholders’ equity |
$ |
2,121,243 |
$ |
2,030,424 |
$ |
2,019,328 |
||||||||||||||||||||||
Total capital |
$ |
2,120,157 |
$ |
2,105,754 |
$ |
2,041,319 |
||||||||||||||||||||||
Common equity tier 1 ratio |
12.28 |
% |
11.67 |
% |
10.55 |
% |
||||||||||||||||||||||
Tier 1 capital ratio |
12.96 |
% |
12.32 |
% |
11.15 |
% |
||||||||||||||||||||||
Total capital ratio |
13.92 |
% |
13.23 |
% |
11.97 |
% |
||||||||||||||||||||||
Leverage ratio |
10.11 |
% |
9.83 |
% |
10.15 |
% |
||||||||||||||||||||||
Total risk weighted assets |
$ |
15,230,302 |
$ |
15,912,792 |
$ |
17,049,410 |
||||||||||||||||||||||
Book value per common share |
$ |
17.66 |
$ |
16.92 |
$ |
16.90 |
||||||||||||||||||||||
TCE per share (1) |
$ |
13.76 |
$ |
13.01 |
$ |
12.96 |
||||||||||||||||||||||
TCE ratio (1) |
8.86 |
% |
7.96 |
% |
8.29 |
% |
||||||||||||||||||||||
(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. |
||||||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES CHANGES: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||||||||
Balance at beginning of period |
$ |
158,809 |
$ |
172,996 |
$ |
163,544 |
$ |
162,359 |
$ |
160,561 |
$ |
162,359 |
$ |
140,550 |
||||||||||||||
ASU 2022-02 day 1 adoption impact |
— |
— |
— |
(407 |
) |
— |
(407 |
) |
— |
|||||||||||||||||||
Provision for credit losses |
1,700 |
16,800 |
8,900 |
1,700 |
8,200 |
29,100 |
9,600 |
|||||||||||||||||||||
Recoveries |
306 |
2,938 |
1,531 |
387 |
3,222 |
5,162 |
24,598 |
|||||||||||||||||||||
Charge offs |
(2,121 |
) |
(33,925 |
) |
(979 |
) |
(495 |
) |
(9,624 |
) |
(37,520 |
) |
(12,389 |
) |
||||||||||||||
Balance at end of period |
$ |
158,694 |
$ |
158,809 |
$ |
172,996 |
$ |
163,544 |
$ |
162,359 |
$ |
158,694 |
$ |
162,359 |
||||||||||||||
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
||||||||||||||||||||||||
Allowance for unfunded loan commitments |
$ |
3,843 |
$ |
3,143 |
$ |
3,081 |
$ |
2,971 |
$ |
1,351 |
||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||||||
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
||||||||||||||||||||||
Provision for credit losses |
$ |
1,700 |
$ |
16,800 |
$ |
8,900 |
$ |
1,700 |
$ |
8,200 |
$ |
29,100 |
$ |
9,600 |
||||||||||||||
Provision for unfunded loan commitments (in noninterest expense) |
700 |
62 |
110 |
1,620 |
120 |
2,492 |
250 |
|||||||||||||||||||||
Total provision expense |
$ |
2,400 |
$ |
16,862 |
$ |
9,010 |
$ |
3,320 |
$ |
8,320 |
$ |
31,592 |
$ |
9,850 |
||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||||||
NET LOAN CHARGE OFFS (RECOVERIES): |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||||||||
CRE loans |
$ |
1,560 |
$ |
(2,227 |
) |
$ |
438 |
$ |
(109 |
) |
$ |
2,022 |
$ |
(338 |
) |
$ |
(14,895 |
) |
||||||||||
C&I loans |
138 |
33,145 |
(1,091 |
) |
196 |
4,174 |
32,388 |
2,299 |
||||||||||||||||||||
Residential mortgage and other loans |
117 |
69 |
101 |
21 |
206 |
308 |
387 |
|||||||||||||||||||||
Net loan charge offs (recoveries) |
$ |
1,815 |
$ |
30,987 |
$ |
(552 |
) |
$ |
108 |
$ |
6,402 |
$ |
32,358 |
$ |
(12,209 |
) |
||||||||||||
Net charge offs (recoveries)/average loans receivable (annualized) |
0.05 |
% |
0.85 |
% |
(0.01 |
)% |
— |
% |
0.17 |
% |
0.22 |
% |
(0.08 |
)% |
||||||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
||||||||||||||||||||
NONPERFORMING ASSETS: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
|||||||||||||||
Loans on nonaccrual status (1) |
$ |
45,204 |
$ |
39,081 |
$ |
61,252 |
$ |
78,861 |
$ |
49,687 |
||||||||||
Accruing delinquent loans past due 90 days or more |
261 |
21,579 |
15,182 |
364 |
401 |
|||||||||||||||
Accruing troubled debt restructured loans (2) |
— |
— |
— |
— |
16,931 |
|||||||||||||||
Total nonperforming loans |
45,465 |
60,660 |
76,434 |
79,225 |
67,019 |
|||||||||||||||
Other real estate owned (“OREO”) |
63 |
1,043 |
938 |
938 |
2,418 |
|||||||||||||||
Total nonperforming assets |
$ |
45,528 |
$ |
61,703 |
$ |
77,372 |
$ |
80,163 |
$ |
69,437 |
||||||||||
Nonperforming assets/total assets |
0.24 |
% |
0.31 |
% |
0.38 |
% |
0.39 |
% |
0.36 |
% |
||||||||||
Nonperforming assets/loans receivable & OREO |
0.33 |
% |
0.43 |
% |
0.52 |
% |
0.53 |
% |
0.45 |
% |
||||||||||
Nonperforming assets/total capital |
2.15 |
% |
3.04 |
% |
3.74 |
% |
3.89 |
% |
3.44 |
% |
||||||||||
Nonperforming loans/loans receivable |
0.33 |
% |
0.42 |
% |
0.51 |
% |
0.53 |
% |
0.44 |
% |
||||||||||
Nonaccrual loans/loans receivable |
0.33 |
% |
0.27 |
% |
0.41 |
% |
0.52 |
% |
0.32 |
% |
||||||||||
Allowance for credit losses/loans receivable |
1.15 |
% |
1.11 |
% |
1.16 |
% |
1.09 |
% |
1.05 |
% |
||||||||||
Allowance for credit losses/nonperforming loans |
349.05 |
% |
261.80 |
% |
226.33 |
% |
206.43 |
% |
242.26 |
% |
||||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million, $11.9 million, $7.6 million, and $9.8 million, at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively. |
||||||||||||||||||||
(2) The Company adopted ASU 2022-02 in 2023, which eliminated the concept of TDR from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans. |
||||||||||||||||||||
NONACCRUAL LOANS BY TYPE: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
|||||||||||||||
CRE loans |
$ |
33,932 |
$ |
26,687 |
$ |
29,270 |
$ |
44,376 |
$ |
33,915 |
||||||||||
C&I loans |
5,013 |
4,234 |
23,042 |
26,191 |
5,620 |
|||||||||||||||
Residential mortgage and other loans |
6,259 |
8,160 |
8,940 |
8,294 |
10,152 |
|||||||||||||||
Total nonaccrual loans |
$ |
45,204 |
$ |
39,081 |
$ |
61,252 |
$ |
78,861 |
$ |
49,687 |
||||||||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands) |
|||||||||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
||||||||||
30 - 59 days past due |
$ |
2,833 |
$ |
2,906 |
$ |
9,295 |
$ |
7,662 |
$ |
7,049 |
|||||
60 - 89 days past due |
1,289 |
506 |
178 |
249 |
2,243 |
||||||||||
Total accruing delinquent loans 30-89 days past due |
$ |
4,122 |
$ |
3,412 |
$ |
9,473 |
$ |
7,911 |
$ |
9,292 |
|||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
||||||||||
CRE loans |
$ |
2,160 |
$ |
611 |
$ |
7,339 |
$ |
3,652 |
$ |
4,115 |
|||||
C&I loans |
1,643 |
1,168 |
990 |
419 |
3,300 |
||||||||||
Residential mortgage and other loans |
319 |
1,633 |
1,144 |
3,840 |
1,877 |
||||||||||
Total accruing delinquent loans 30-89 days past due |
$ |
4,122 |
$ |
3,412 |
$ |
9,473 |
$ |
7,911 |
$ |
9,292 |
|||||
CRITICIZED LOANS: |
12/31/2023 |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
||||||||||
Special mention loans |
$ |
178,992 |
$ |
186,600 |
$ |
210,806 |
$ |
166,472 |
$ |
157,263 |
|||||
Substandard loans |
143,449 |
174,161 |
134,203 |
138,224 |
104,073 |
||||||||||
Total criticized loans |
$ |
322,441 |
$ |
360,761 |
$ |
345,009 |
$ |
304,696 |
$ |
261,336 |
|||||
Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data) |
||||||||||||||||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures |
||||||||||||||||||||
| Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below. | ||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY |
12/31/2023 |
9/30/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||
Average stockholders’ equity |
$ |
2,048,335 |
$ |
2,079,092 |
$ |
1,997,460 |
$ |
2,061,665 |
$ |
2,034,027 |
||||||||||
Less: Average goodwill and core deposit intangible assets, net |
(468,622 |
) |
(469,079 |
) |
(470,442 |
) |
(469,298 |
) |
(471,176 |
) |
||||||||||
Average TCE |
$ |
1,579,713 |
$ |
1,610,013 |
$ |
1,527,018 |
$ |
1,592,367 |
$ |
1,562,851 |
||||||||||
Net income |
$ |
26,481 |
$ |
30,049 |
$ |
51,703 |
$ |
133,673 |
$ |
218,277 |
||||||||||
ROTCE (annualized) |
6.71 |
% |
7.47 |
% |
13.54 |
% |
8.39 |
% |
13.97 |
% |
||||||||||
TANGIBLE COMMON EQUITY |
12/31/2023 |
9/30/2023 |
12/31/2022 |
|||||||||||||||||
Total stockholders’ equity |
$ |
2,121,243 |
$ |
2,030,424 |
$ |
2,019,328 |
||||||||||||||
Less: Goodwill and core deposit intangible assets, net |
(468,385 |
) |
(468,832 |
) |
(470,176 |
) |
||||||||||||||
TCE |
$ |
1,652,858 |
$ |
1,561,592 |
$ |
1,549,152 |
||||||||||||||
Total assets |
$ |
19,131,522 |
$ |
20,076,364 |
$ |
19,164,491 |
||||||||||||||
Less: Goodwill and core deposit intangible assets, net |
(468,385 |
) |
(468,832 |
) |
(470,176 |
) |
||||||||||||||
Tangible assets |
$ |
18,663,137 |
$ |
19,607,532 |
$ |
18,694,315 |
||||||||||||||
TCE ratio |
8.86 |
% |
7.96 |
% |
8.29 |
% |
||||||||||||||
Common shares outstanding |
120,126,786 |
120,026,220 |
119,495,209 |
|||||||||||||||||
TCE per share |
$ |
13.76 |
$ |
13.01 |
$ |
12.96 |
||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS |
12/31/2023 |
9/30/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||
Net income |
$ |
26,481 |
$ |
30,049 |
$ |
51,703 |
$ |
133,673 |
$ |
218,277 |
||||||||||
Notable items: |
||||||||||||||||||||
FDIC special assessment expense |
3,971 |
— |
— |
3,971 |
— |
|||||||||||||||
Restructuring costs |
11,076 |
500 |
— |
11,576 |
— |
|||||||||||||||
Total notable items |
15,047 |
500 |
— |
15,547 |
— |
|||||||||||||||
Tax provision |
3,190 |
124 |
— |
3,864 |
— |
|||||||||||||||
Less: total notable items, net of tax provision |
$ |
11,857 |
$ |
376 |
$ |
— |
$ |
11,683 |
$ |
— |
||||||||||
Net income excluding notable items |
$ |
38,338 |
$ |
30,425 |
$ |
51,703 |
$ |
145,356 |
$ |
218,277 |
||||||||||
Diluted common shares |
120,761,112 |
120,374,618 |
120,102,665 |
120,393,257 |
120,472,345 |
|||||||||||||||
EPS excluding notable items |
$ |
0.32 |
$ |
0.25 |
$ |
0.43 |
$ |
1.21 |
$ |
1.81 |
||||||||||
Average Assets |
19,600,942 |
20,059,304 |
18,863,726 |
19,806,163 |
18,231,609 |
|||||||||||||||
ROA excluding notable items |
0.78 |
% |
0.61 |
% |
1.10 |
% |
0.73 |
% |
1.20 |
% |
||||||||||
Average Equity |
2,048,335 |
2,079,092 |
1,997,460 |
2,061,665 |
2,034,027 |
|||||||||||||||
ROE excluding notable items |
7.49 |
% |
5.85 |
% |
10.35 |
% |
7.05 |
% |
10.73 |
% |
||||||||||
Average TCE |
$ |
1,579,713 |
$ |
1,610,013 |
$ |
1,527,018 |
$ |
1,592,367 |
$ |
1,562,851 |
||||||||||
ROTCE excluding notable items |
9.71 |
% |
7.56 |
% |
13.54 |
% |
9.13 |
% |
13.97 |
% |
||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
EFFICIENCY RATIOS EXCLUDING NOTABLE ITEMS |
12/31/2023 |
9/30/2023 |
12/31/2022 |
12/31/2023 |
12/31/2022 |
|||||||||||||||
Noninterest expense |
$ |
99,891 |
$ |
86,873 |
$ |
84,518 |
$ |
364,451 |
$ |
324,170 |
||||||||||
Less: notable items: |
||||||||||||||||||||
FDIC special assessment expense |
(3,971 |
) |
— |
— |
(3,971 |
) |
— |
|||||||||||||
Restructuring costs |
(11,076 |
) |
(500 |
) |
— |
(11,576 |
) |
— |
||||||||||||
Noninterest expense excluding notable items |
$ |
84,844 |
$ |
86,373 |
$ |
84,518 |
$ |
348,904 |
$ |
324,170 |
||||||||||
Revenue |
$ |
135,196 |
$ |
143,683 |
$ |
162,631 |
$ |
571,438 |
$ |
629,818 |
||||||||||
Efficiency ratio excluding notable items |
62.76 |
% |
60.11 |
% |
51.97 |
% |
61.06 |
% |
51.47 |
% |
||||||||||
Average assets |
19,600,942 |
20,059,304 |
18,863,726 |
19,806,163 |
18,231,609 |
|||||||||||||||
Noninterest expense / average assets, excluding notable items |
1.73 |
% |
1.72 |
% |
1.79 |
% |
1.76 |
% |
1.78 |
% |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130078574/en/
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
Source: Hope Bancorp, Inc.