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Hope Bancorp Reports 2021 Fourth Quarter and Full-Year Financial Results

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and full year ended December 31, 2021.

For the three months ended December 31, 2021, net income totaled $51.6 million, or $0.43 per diluted common share. This compares with net income of $55.5 million, or $0.45 per diluted common share, in the third quarter of 2021 and $28.3 million, or $0.23 per diluted common share, in the fourth quarter of 2020. Pre-provision net revenue(1) for the 2021 fourth quarter increased 10% over the 2021 third quarter and increased 18% over the prior-year fourth quarter.

For the full year ended December 31, 2021, net income totaled $204.6 million, or $1.66 per diluted common share, compared with net income of $111.5 million, or $0.90 per diluted common share for the year ended December 31, 2020. Pre-provision net revenue(1) for 2021 increased 11% over 2020.

“We delivered an outstanding financial performance in the fourth quarter of 2021 to close out a year with record levels of loan production, a more diversified, lower-risk loan portfolio, continued improvement in our deposit composition, and enhanced efficiencies and profitability,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Following the successful de-risking and rebalancing of our loan portfolio, record loan production of $1.24 billion in the fourth quarter led to a 4% quarter-over-quarter increase in loans receivable. We also continued to enhance the quality of our deposit franchise with core deposit growth leading to a ninth consecutive quarter of decreasing deposit costs. The redeployment of excess cash into higher-yielding earning assets resulted in increased levels of net interest income and drove a 6 basis point expansion of our net interest margin quarter-over-quarter. Altogether with our continued expense management, we delivered double-digit growth in our pre-provision net revenue(1) for the 2021 fourth quarter versus the preceding third quarter, as well as for the full 2021 year compared with the prior year.

“The strong headwinds of 2021 are behind us, and we began 2022 with tremendous momentum following a solid fourth quarter performance reflective of our more traditional growth levels. Armed with greater confidence in our ability to navigate through a new normal that includes a lingering pandemic and with an expanded and improved business development team and focus, I believe the long-term prospects of our franchise is stronger today than it has ever been,” said Kim.

Q4 2021 Highlights

  • Loan originations increased 23% quarter-over-quarter to a record $1.24 billion and contributed to a 4.0% increase in loans receivable quarter-over-quarter, or 15.9% annualized.
  • Excluding PPP, loans receivable increased 4.9% quarter-over-quarter, or 19.6% annualized.
  • Net interest income before provision for credit losses increased 2% quarter-over-quarter to $133.3 million, reflecting the redeployment of excess cash into loans and investment securities and lower cost of deposits.
  • Total cost of deposits decreased 3 basis points quarter-over-quarter, reflecting the ongoing downward repricing of interest bearing deposits, and represented the ninth consecutive quarter of declining deposit costs.
  • Noninterest expenses continued to be well managed with efficiency ratio improving 288 basis points quarter-over-quarter to 50.70% and noninterest expense to average assets improving to 1.67%.
  • Pre-provision net revenue(1) increased 10% quarter-over-quarter and totaled $72.2 million.
  • Company recorded net recoveries of $2.3 million related to a large loan previously charged off during the 2021 third quarter.
  • Total nonperforming assets declined quarter-over-quarter by $1.9 million, and criticized loans decreased by $50.9 million.
  • Re-entered the state of Georgia with a new branch opening in the epicenter of Atlanta’s growing Korean American community.

(1)

Pre-provision net revenue, a non-GAAP financial measure, represents the sum of net interest income before provision (credit) for credit losses and non-interest income less noninterest expense. Management’s reasons and purposes for using this non-GAAP financial measure is set forth on page 7 of this earnings release. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.

Financial Highlights

(dollars in thousands, except per share data) (unaudited)

At or for the Three Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

Net income

$

51,623

 

 

$

55,499

 

 

$

28,319

 

Diluted earnings per share

$

0.43

 

 

$

0.45

 

 

$

0.23

 

Pre-provision net revenue (1)

$

72,179

 

 

$

65,411

 

 

$

61,108

 

Net interest income before provision (credit) for credit losses

$

133,318

 

 

$

130,296

 

 

$

120,756

 

Net interest margin

 

3.13

%

 

 

3.07

%

 

 

3.02

%

Noninterest income

$

13,097

 

 

$

10,617

 

 

$

11,415

 

Noninterest expense

$

74,236

 

 

$

75,502

 

 

$

71,063

 

Net loans receivable

$

13,812,193

 

 

$

13,281,917

 

 

$

13,356,472

 

Deposits

$

15,040,450

 

 

$

15,062,527

 

 

$

14,333,912

 

Total cost of deposits

 

0.23

%

 

 

0.26

%

 

 

0.48

%

Nonaccrual loans (2)

$

54,616

 

 

$

54,380

 

 

$

85,238

 

Nonperforming loans to loans receivable (2)

 

0.78

%

 

 

0.73

%

 

 

0.91

%

ACL to loans receivable

 

1.01

%

 

 

1.02

%

 

 

1.52

%

ACL to nonaccrual loans (2)

 

257.34

%

 

 

251.52

%

 

 

242.55

%

ACL to nonperforming assets (2)

 

125.76

%

 

 

120.33

%

 

 

144.24

%

Provision (credit) for credit losses

$

1,500

 

 

$

(10,000

)

 

$

27,500

 

Net (recoveries) charge offs

$

(2,276

)

 

$

42,678

 

 

$

608

 

Return on average assets (“ROA”)

 

1.16

%

 

 

1.25

%

 

 

0.67

%

Return on average equity (“ROE”)

 

9.93

%

 

 

10.61

%

 

 

5.54

%

Return on average tangible common equity (“ROTCE”) (1)

 

12.85

%

 

 

13.71

%

 

 

7.21

%

Noninterest expense / average assets

 

1.67

%

 

 

1.70

%

 

 

1.69

%

Efficiency ratio

 

50.70

%

 

 

53.58

%

 

 

53.77

%

(1)

Pre-provision net revenue and return on average tangible common equity are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Page 7 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 Page 10.

(2)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation

 

Operating Results for the 2021 Fourth Quarter

Net interest income before provision for credit losses for the 2021 fourth quarter increased 2% to $133.3 million from $130.3 million in the 2021 third quarter and increased 10% from $120.8 million in the year-ago fourth quarter. The Company attributed the increase to higher interest income due to higher average balances of loans receivable and investment securities, as well as lower interest expense on deposits.

The net interest margin for the 2021 fourth quarter increased 6 basis points to 3.13% from 3.07% in the preceding third quarter, primarily attributed to the redeployment of cash into loans and investment securities, and a 3 basis point reduction in the cost of deposits. The net interest margin in the prior-year fourth quarter was 3.02%.

The weighted average yield on loans for the 2021 fourth quarter was 3.95%, compared with 3.97% in the preceding third quarter, and 4.03% in the year-ago fourth quarter.

The weighted average cost of deposits for the 2021 fourth quarter decreased for the ninth consecutive quarter to 0.23%, representing a 3 basis point decrease from 0.26% for the 2021 third quarter and a 25 basis point decrease from 0.48% for the 2020 fourth quarter. The Company attributed the improvements in the weighted average cost of deposits to the ongoing downward repricing of interest bearing deposits. The cost of interest bearing deposits was 0.39%, 0.42%, and 0.71% for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

Noninterest income for the 2021 fourth quarter increased 23% quarter-over-quarter to $13.1 million from $10.6 million in the preceding third quarter, reflecting higher levels of deposit and transaction fees, net gain on sale of SBA loans, swap fee income, and equity investment dividend income. During the 2021 fourth quarter, the Company sold $41.0 million in the guaranteed portion of SBA 7(a) loans, compared with $31.3 million in the preceding third quarter. Noninterest income in the 2020 fourth quarter totaled $11.4 million.

Noninterest expense for the 2021 fourth quarter decreased to $74.2 million from $75.5 million for the preceding third quarter, largely reflecting lower salaries and employee benefits expense, partially offset by higher OREO expenses. For the 2020 fourth quarter, noninterest expense totaled $71.1 million.

Salaries and employee benefits expense for the 2021 fourth quarter decreased to $44.6 million from $47.0 million in the preceding third quarter, and is attributable to more normalized bonus reserves, a decrease in stock compensation expense, and an increase in deferred loan origination costs. Salaries and employee benefits expense for the 2020 fourth quarter totaled $40.9 million.

The Company’s efficiency ratio for the 2021 fourth quarter improved to 50.7% from 53.6% in the preceding third quarter and 53.8% in the year-ago fourth quarter. Noninterest expense as a percentage of average assets improved to 1.67% for the 2021 fourth quarter from 1.70% for the 2021 third quarter and from 1.69% for the 2020 fourth quarter.

The effective tax rate for the 2021 fourth quarter was 27.0%, compared with 26.4% for the preceding third quarter, reflecting an increase in the Company’s actual annual pretax income compared with previous estimates, combined with the benefit of affordable housing partnership investment tax credits having a smaller effect on the larger annual pretax income. In the year-ago fourth quarter, the effective tax rate was materially lower than the preceding quarters of 2020 at 15.7%, which reflected a lower tax provision based on adjustments to the applicable state apportionment factors. The effective tax rate for the full-year 2021 was 25.7%, compared with 21.6% for 2020. The increase in the full-year tax rate was mainly due to an increase in pretax income during 2021 and the change in the Company’s state apportionment in 2020 which materially lowered the tax rate for that year.

Balance Sheet Summary

New loan originations funded during the 2021 fourth quarter increased 23% quarter-over-quarter to a record $1.24 billion from the previous record of $1.01 billion in the preceding third quarter. In the year-ago fourth quarter, the Company originated $844.2 million of new loans.

Following are the components of new loan production for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020.

(dollars in thousands) (unaudited)

For the Three Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

Commercial real estate

$

573,978

 

$

488,969

 

$

326,512

Commercial

 

532,634

 

 

329,702

 

 

435,151

SBA (excluding SBA PPP)

 

54,848

 

 

115,023

 

 

17,141

Residential mortgage

 

81,325

 

 

75,007

 

 

62,492

Consumer

 

70

 

 

500

 

 

2,932

Total new loan originations

$

1,242,855

 

$

1,009,201

 

$

844,228

At December 31, 2021, loans receivable increased 4.0% to $13.95 billion from $13.42 billion at September 30, 2021 and increased 2.9% from $13.56 billion at December 31, 2020.

Total deposits at December 31, 2021 declined slightly to $15.04 billion from $15.06 billion at September 30, 2021, but increased 4.9% year-over-year from $14.33 billion at December 31, 2020. Quarter-over-quarter, money market and NOW deposits increased 5.2%, but was offset by a seasonal decline in noninterest bearing demand deposits and a reduction in time deposits. On a year-over-year basis, noninterest bearing demand deposits at year-end increased 19.5%, money market and NOW deposits increased 18.1%, and time deposits decreased 30.1%.

Following is the deposit composition as of December 31, 2021, September 30, 2021 and December 31, 2020:

(dollars in thousands) (unaudited)

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

Noninterest bearing demand deposits

$

5,751,870

 

$

6,007,586

 

(4.3

)%

 

$

4,814,254

 

19.5

%

Money market and other

 

6,178,850

 

 

5,871,567

 

5.2

%

 

 

5,232,413

 

18.1

%

Saving deposits

 

321,377

 

 

314,603

 

2.2

%

 

 

300,770

 

6.9

%

Time deposits

 

2,788,353

 

 

2,868,771

 

(2.8

)%

 

 

3,986,475

 

(30.1

)%

Total deposit balances

$

15,040,450

 

$

15,062,527

 

(0.1

)%

 

$

14,333,912

 

4.9

%

While noninterest bearing demand deposits decreased to $5.75 billion at December 31, 2021 from $6.01 billion as of September 30, 2021 due to seasonality related to larger corporate banking deposit relationships, the average noninterest bearing deposit balance for the 2021 fourth quarter increased 2.0% over the third quarter of 2021.

Following is the deposit composition as a percentage of total deposits as of December 31, 2021, September 30, 2021 and December 31, 2020 and a breakdown of cost of deposits for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020:

 

Deposit Breakdown

 

Cost of Deposits

(dollars in thousands) (unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

 

Q4 2021

 

Q3 2021

 

Q4 2020

Noninterest bearing demand deposits

38.3

%

 

39.9

%

 

33.6

%

 

%

 

%

 

%

Money market and other

41.1

%

 

39.0

%

 

36.5

%

 

0.37

%

 

0.40

%

 

0.45

%

Saving deposits

2.1

%

 

2.1

%

 

2.1

%

 

1.18

%

 

1.18

%

 

1.17

%

Time deposits

18.5

%

 

19.0

%

 

27.8

%

 

0.34

%

 

0.38

%

 

0.98

%

Total deposit balances

100.0

%

 

100.0

%

 

100.0

%

 

0.23

%

 

0.26

%

 

0.48

%

Allowance for Credit Losses

In the 2021 fourth quarter, the Company recorded a provision for credit losses of $1.5 million, compared with a negative provision for credit losses of $10.0 million in the preceding third quarter, and a provision for credit losses of $27.5 million in the 2020 fourth quarter.

Following is the allowance for credit losses as of December 31, 2021, September 30, 2021 and December 31, 2020:

(dollars in thousands) (unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

Allowance for credit losses

$

140,550

 

$

136,774

 

$

206,741

Allowance for credit loss/loans receivable

 

1.01 %

 

 

1.02 %

 

 

1.52 %

Allowance for credit losses/nonperforming loans

 

128.75 %

 

 

138.92 %

 

 

167.80 %

Credit Quality

Following are the components of nonperforming assets as of December 31, 2021, September 30, 2021 and December 31, 2020:

(dollars in thousands) (unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

Loans on nonaccrual status (1)

$

54,616

 

$

54,380

 

$

85,238

Delinquent loans 90 days or more on accrual status

 

2,131

 

 

4,567

 

 

614

Accruing troubled debt restructured loans

 

52,418

 

 

39,509

 

 

37,354

Total nonperforming loans

 

109,165

 

 

98,456

 

 

123,206

Other real estate owned

 

2,597

 

 

15,213

 

 

20,121

Total nonperforming assets

$

111,762

 

$

113,669

 

$

143,327

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $19.5 million, $20.6 million, and $26.5 million, at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

Total nonperforming assets at December 31, 2021 declined to $111.8 million from $113.7 million at September 30, 2021 and from $143.3 million at December 31, 2020. The quarter-over-quarter decrease in total nonperforming assets largely reflects a $12.6 million reduction in other real estate owned, partially offset by a $10.7 million increase in nonperforming loans due to one large commercial real estate loan.

Following are net (recoveries) charge offs and net (recoveries) charge offs to average loans receivable on an annualized basis for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020:

(dollars in thousands) (unaudited)

For the Three Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

Net (recoveries) charge offs

$

(2,276

)

 

$

42,678

 

 

$

608

 

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

 

(0.07

)%

 

 

1.28

%

 

 

0.02

%

Net recoveries in the 2021 fourth quarter reflects a partial recovery from a large loan charged off during the preceding third quarter.

Following are the components of criticized loan balances as of December 31, 2021, September 30, 2021 and December 31, 2020:

(dollars in thousands) (unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

Special Mention

$

257,194

 

$

306,766

 

$

184,941

Classified

 

242,397

 

 

243,684

 

 

366,557

Criticized

$

499,591

 

$

550,450

 

$

551,498

The Company noted that the quarter-over-quarter decrease in criticized loans at December 31, 2021 reflects the benefits of its de-risking strategy focused on reducing higher-risk commercial real estate properties.

Capital

At December 31, 2021, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” financial institution. Following are capital ratios for the Company as of December 31, 2021, September 30, 2021 and December 31, 2020:

(unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

 

Minimum Guideline

for “Well-Capitalized”

Bank

Common Equity Tier 1 Capital

11.03%

 

11.01%

 

10.94%

 

6.50%

Tier 1 Leverage Ratio

10.11%

 

9.98%

 

10.22%

 

5.00%

Tier 1 Risk-Based Ratio

11.70%

 

11.70%

 

11.64%

 

8.00%

Total Risk-Based Ratio

12.42%

 

12.42%

 

12.87%

 

10.00%

Following are tangible common equity(1) (“TCE”) per share and TCE as a percentage of tangible assets(1) as of December 31, 2021, September 30, 2021 and December 31, 2020:

(unaudited)

12/31/2021

 

9/30/2021

 

12/31/2020

Tangible common equity per share (1)

$13.51

 

$13.33

 

$12.81

Tangible common equity to tangible assets (1)

9.31%

 

9.24%

 

9.50%

(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 on Page 7 of this earnings release. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial disclosures, including pre-provision net revenue, tangible common equity, tangible common equity per share 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 Page 10.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, January 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2021. 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 in 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 1, 2022, replay access code 7703555.

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 $17.89 billion in total assets as of December 31, 2021. 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, Oregon, 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 press 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 and Quarterly Report on Form 10-Q. 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)

 

Assets

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

Cash and due from banks

$

316,266

 

 

$

627,352

 

 

(50

)%

 

$

350,579

 

 

(10

)%

Securities available for sale, at fair value

 

2,666,275

 

 

 

2,669,489

 

 

%

 

 

2,285,611

 

 

17

%

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

 

87,961

 

 

 

88,102

 

 

%

 

 

105,591

 

 

(17

)%

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

 

99,049

 

 

 

179,117

 

 

(45

)%

 

 

17,743

 

 

458

%

Loans receivable

 

13,952,743

 

 

 

13,418,691

 

 

4

%

 

 

13,563,213

 

 

3

%

Allowance for credit losses

 

(140,550

)

 

 

(136,774

)

 

3

%

 

 

(206,741

)

 

(32

)%

Net loans receivable

 

13,812,193

 

 

 

13,281,917

 

 

4

%

 

 

13,356,472

 

 

3

%

Accrued interest receivable

 

41,842

 

 

 

47,102

 

 

(11

)%

 

 

59,430

 

 

(30

)%

Premises and equipment, net

 

45,667

 

 

 

45,307

 

 

1

%

 

 

48,409

 

 

(6

)%

Bank owned life insurance

 

77,081

 

 

 

76,756

 

 

%

 

 

76,765

 

 

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

10,418

 

 

 

10,787

 

 

(3

)%

 

 

12,692

 

 

(18

)%

Other intangible assets, net

 

7,671

 

 

 

8,180

 

 

(6

)%

 

 

9,708

 

 

(21

)%

Other assets

 

260,188

 

 

 

300,467

 

 

(13

)%

 

 

319,214

 

 

(18

)%

Total assets

$

17,889,061

 

 

$

17,799,026

 

 

1

%

 

$

17,106,664

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

$

15,040,450

 

 

$

15,062,527

 

 

%

 

$

14,333,912

 

 

5

%

FHLB advances

 

300,000

 

 

 

200,000

 

 

50

%

 

 

250,000

 

 

20

%

Convertible notes, net

 

216,209

 

 

 

215,974

 

 

%

 

 

204,565

 

 

6

%

Subordinated debentures

 

105,354

 

 

 

105,057

 

 

%

 

 

104,178

 

 

1

%

Accrued interest payable

 

4,272

 

 

 

5,367

 

 

(20

)%

 

 

14,706

 

 

(71

)%

Other liabilities

 

129,793

 

 

 

135,703

 

 

(4

)%

 

 

145,558

 

 

(11

)%

Total liabilities

 

15,796,078

 

 

 

15,724,628

 

 

%

 

 

15,052,919

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

136

 

 

 

136

 

 

%

 

 

136

 

 

%

Capital surplus

 

1,421,698

 

 

 

1,420,151

 

 

%

 

 

1,434,916

 

 

(1

)%

Retained earnings

 

932,561

 

 

 

897,766

 

 

4

%

 

 

785,940

 

 

19

%

Treasury stock, at cost

 

(250,000

)

 

 

(247,198

)

 

1

%

 

 

(200,000

)

 

25

%

Accumulated other comprehensive (loss) gain, net

 

(11,412

)

 

 

3,543

 

 

N/A

 

 

 

32,753

 

 

N/A

 

Total stockholders’ equity

 

2,092,983

 

 

 

2,074,398

 

 

1

%

 

 

2,053,745

 

 

2

%

Total liabilities and stockholders’ equity

$

17,889,061

 

 

$

17,799,026

 

 

1

%

 

$

17,106,664

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

120,006,452

 

 

 

120,198,061

 

 

 

 

 

123,264,864

 

 

 

Treasury stock shares

 

16,343,849

 

 

 

16,149,007

 

 

 

 

 

12,661,581

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

 

12/31/2021

 

12/31/2020

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

133,821

 

$

132,794

 

 

1

%

 

$

132,117

 

 

1

%

 

$

528,174

 

 

$

554,967

 

(5

)%

Interest on securities

 

10,657

 

 

9,207

 

 

16

%

 

 

9,014

 

 

18

%

 

 

35,492

 

 

 

39,362

 

(10

)%

Interest on federal funds sold and other investments

 

691

 

 

865

 

 

(20

)%

 

 

598

 

 

16

%

 

 

2,866

 

 

 

4,549

 

(37

)%

Total interest income

 

145,169

 

 

142,866

 

 

2

%

 

 

141,729

 

 

2

%

 

 

566,532

 

 

 

598,878

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

8,905

 

 

9,640

 

 

(8

)%

 

 

16,934

 

 

(47

)%

 

 

42,011

 

 

 

110,369

 

(62

)%

Interest on other borrowings and convertible notes

 

2,946

 

 

2,930

 

 

1

%

 

 

4,039

 

 

(27

)%

 

 

11,751

 

 

 

21,011

 

(44

)%

Total interest expense

 

11,851

 

 

12,570

 

 

(6

)%

 

 

20,973

 

 

(43

)%

 

 

53,762

 

 

 

131,380

 

(59

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

133,318

 

 

130,296

 

 

2

%

 

 

120,756

 

 

10

%

 

 

512,770

 

 

 

467,498

 

10

%

Provision (credit) for credit losses

 

1,500

 

 

(10,000

)

 

N/A

 

 

27,500

 

 

(95

)%

 

 

(12,200

)

 

 

95,000

 

N/A

Net interest income after provision (credit) for credit losses

 

131,818

 

 

140,296

 

 

(6

)%

 

 

93,256

 

 

41

%

 

 

524,970

 

 

 

372,498

 

41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

1,894

 

 

1,814

 

 

4

%

 

 

2,991

 

 

(37

)%

 

 

7,275

 

 

 

12,443

 

(42

)%

International service fees

 

1,061

 

 

889

 

 

19

%

 

 

696

 

 

52

%

 

 

3,586

 

 

 

3,139

 

14

%

Loan servicing fees, net

 

747

 

 

642

 

 

16

%

 

 

566

 

 

32

%

 

 

3,367

 

 

 

2,809

 

20

%

Wire transfer fees

 

916

 

 

836

 

 

10

%

 

 

867

 

 

6

%

 

 

3,519

 

 

 

3,577

 

(2

)%

Net gains on sales of SBA loans

 

3,614

 

 

2,459

 

 

47

%

 

 

 

 

100

%

 

 

8,448

 

 

 

 

100

%

Net gains on sales of residential mortgage loans

 

530

 

 

781

 

 

(32

)%

 

 

1,618

 

 

(67

)%

 

 

4,435

 

 

 

8,004

 

(45

)%

Net gains on sales of securities available for sale

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

 

7,531

 

(100

)%

Other income and fees

 

4,335

 

 

3,196

 

 

36

%

 

 

4,677

 

 

(7

)%

 

 

12,964

 

 

 

15,929

 

(19

)%

Total noninterest income

 

13,097

 

 

10,617

 

 

23

%

 

 

11,415

 

 

15

%

 

 

43,594

 

 

 

53,432

 

(18

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

44,608

 

 

47,018

 

 

(5

)%

 

 

40,911

 

 

9

%

 

 

175,151

 

 

 

162,922

 

8

%

Occupancy

 

7,391

 

 

7,473

 

 

(1

)%

 

 

7,200

 

 

3

%

 

 

28,898

 

 

 

28,917

 

%

Furniture and equipment

 

4,642

 

 

4,429

 

 

5

%

 

 

4,122

 

 

13

%

 

 

18,079

 

 

 

17,548

 

3

%

Advertising and marketing

 

2,329

 

 

2,656

 

 

(12

)%

 

 

1,695

 

 

37

%

 

 

8,707

 

 

 

6,284

 

39

%

Data processing and communications

 

2,789

 

 

2,394

 

 

16

%

 

 

2,235

 

 

25

%

 

 

10,331

 

 

 

9,344

 

11

%

Professional fees

 

2,439

 

 

2,431

 

 

%

 

 

1,847

 

 

32

%

 

 

12,168

 

 

 

8,170

 

49

%

FDIC assessment

 

1,366

 

 

1,204

 

 

13

%

 

 

1,166

 

 

17

%

 

 

5,109

 

 

 

5,544

 

(8

)%

Credit related expenses

 

873

 

 

1,266

 

 

(31

)%

 

 

2,001

 

 

(56

)%

 

 

4,400

 

 

 

6,817

 

(35

)%

OREO expense (income), net

 

811

 

 

248

 

 

227

%

 

 

(86

)

 

N/A

 

 

 

1,638

 

 

 

3,865

 

(58

)%

Software impairment

 

 

 

 

 

%

 

 

 

 

%

 

 

2,146

 

 

 

 

100

%

FHLB advance prepayment fee

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

 

3,584

 

(100

)%

Branch restructuring costs

 

 

 

 

 

%

 

 

2,367

 

 

(100

)%

 

 

 

 

 

2,367

 

(100

)%

Other

 

6,988

 

 

6,383

 

 

9

%

 

 

7,605

 

 

(8

)%

 

 

26,665

 

 

 

28,277

 

(6

)%

Total noninterest expense

 

74,236

 

 

75,502

 

 

(2

)%

 

 

71,063

 

 

4

%

 

 

293,292

 

 

 

283,639

 

3

%

Income before income taxes

 

70,679

 

 

75,411

 

 

(6

)%

 

 

33,608

 

 

110

%

 

 

275,272

 

 

 

142,291

 

93

%

Income tax provision

 

19,056

 

 

19,912

 

 

(4

)%

 

 

5,289

 

 

260

%

 

 

70,700

 

 

 

30,776

 

130

%

Net income

$

51,623

 

$

55,499

 

 

(7

)%

 

$

28,319

 

 

82

%

 

$

204,572

 

 

$

111,515

 

83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share - Basic

$

0.43

 

$

0.45

 

 

 

 

$

0.23

 

 

 

 

$

1.67

 

 

$

0.90

 

 

Earnings per Common Share - Diluted

$

0.43

 

$

0.45

 

 

 

 

$

0.23

 

 

 

 

$

1.66

 

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

120,160,300

 

 

122,244,948

 

 

 

 

 

123,264,172

 

 

 

 

 

122,321,768

 

 

 

123,501,401

 

 

Weighted Average Shares Outstanding - Diluted

 

121,025,925

 

 

122,908,536

 

 

 

 

 

123,874,229

 

 

 

 

 

123,133,025

 

 

 

123,889,343

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

At or for the Three Months Ended

(Annualized)

 

At or for the Twelve Months

Ended

Profitability measures:

12/31/2021

 

9/30/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

ROA

 

1.16

%

 

 

1.25

%

 

 

0.67

%

 

 

1.17

%

 

 

0.68

%

ROE

 

9.93

%

 

 

10.61

%

 

 

5.54

%

 

 

9.88

%

 

 

5.49

%

ROTCE (1)

 

12.85

%

 

 

13.71

%

 

 

7.21

%

 

 

12.80

%

 

 

7.16

%

Net interest margin

 

3.13

%

 

 

3.07

%

 

 

3.02

%

 

 

3.09

%

 

 

3.00

%

Efficiency ratio

 

50.70

%

 

 

53.58

%

 

 

53.77

%

 

 

52.72

%

 

 

54.45

%

Noninterest expense / average assets

 

1.67

%

 

 

1.70

%

 

 

1.69

%

 

 

1.68

%

 

 

1.72

%

 

 

 

 

 

 

 

 

 

 

(1) Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles 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.

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

Pre-tax acquisition accounting adjustments

12/31/2021

 

9/30/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

Accretion on acquired loans

$

283

 

 

$

368

 

 

$

452

 

 

$

1,722

 

 

$

2,916

 

Accretion on acquired credit deteriorated loans

 

1,667

 

 

 

2,093

 

 

 

3,064

 

 

 

8,203

 

 

 

20,143

 

Amortization of premium on low income housing tax credits

 

(73

)

 

 

(73

)

 

 

(71

)

 

 

(293

)

 

 

(283

)

Accretion of discount on acquired subordinated debt

 

(296

)

 

 

(295

)

 

 

(289

)

 

 

(1,175

)

 

 

(1,143

)

Amortization of core deposit intangibles

 

(509

)

 

 

(509

)

 

 

(531

)

 

 

(2,037

)

 

 

(2,125

)

Total acquisition accounting adjustments

$

1,072

 

 

$

1,584

 

 

$

2,625

 

 

$

6,420

 

 

$

19,508

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

13,447,009

 

$

133,821

 

3.95

%

 

$

13,286,382

 

$

132,794

 

3.97

%

 

$

13,046,443

 

$

132,117

 

4.03

%

Securities available for sale

 

2,674,903

 

 

10,657

 

1.58

%

 

 

2,370,672

 

 

9,207

 

1.54

%

 

 

2,123,025

 

 

9,014

 

1.69

%

FHLB stock and other investments

 

773,579

 

 

691

 

0.35

%

 

 

1,197,537

 

 

865

 

0.29

%

 

 

749,281

 

 

598

 

0.32

%

Total interest earning assets

$

16,895,491

 

$

145,169

 

3.41

%

 

$

16,854,591

 

$

142,866

 

3.36

%

 

$

15,918,749

 

$

141,729

 

3.54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

5,961,363

 

$

5,522

 

0.37

%

 

$

5,919,225

 

$

5,946

 

0.40

%

 

$

4,910,649

 

$

5,541

 

0.45

%

Savings

 

316,758

 

 

946

 

1.18

%

 

 

310,525

 

 

920

 

1.18

%

 

 

305,341

 

 

898

 

1.17

%

Time deposits

 

2,823,613

 

 

2,437

 

0.34

%

 

 

2,914,977

 

 

2,774

 

0.38

%

 

 

4,240,500

 

 

10,495

 

0.98

%

Total interest bearing deposits

 

9,101,734

 

 

8,905

 

0.39

%

 

 

9,144,727

 

 

9,640

 

0.42

%

 

 

9,456,490

 

 

16,934

 

0.71

%

FHLB advances

 

216,882

 

 

648

 

1.19

%

 

 

200,000

 

 

640

 

1.27

%

 

 

204,900

 

 

657

 

1.28

%

Convertible notes, net

 

216,078

 

 

1,322

 

2.39

%

 

 

215,840

 

 

1,321

 

2.39

%

 

 

203,807

 

 

2,383

 

4.58

%

Subordinated debentures

 

101,295

 

 

976

 

3.77

%

 

 

100,993

 

 

969

 

3.75

%

 

 

100,118

 

 

999

 

3.90

%

Total interest bearing liabilities

 

9,635,989

 

$

11,851

 

0.49

%

 

 

9,661,560

 

$

12,570

 

0.52

%

 

 

9,965,315

 

$

20,973

 

0.84

%

Noninterest bearing demand deposits

 

5,967,251

 

 

 

 

 

 

5,848,983

 

 

 

 

 

 

4,637,584

 

 

 

 

Total funding liabilities/cost of funds

$

15,603,240

 

 

 

0.30

%

 

$

15,510,543

 

 

 

0.32

%

 

$

14,602,899

 

 

 

0.57

%

Net interest income/net interest spread

 

 

$

133,318

 

2.92

%

 

 

 

$

130,296

 

2.84

%

 

 

 

$

120,756

 

2.70

%

Net interest margin

 

 

 

 

3.13

%

 

 

 

 

 

3.07

%

 

 

 

 

 

3.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,967,251

 

$

 

%

 

$

5,848,983

 

$

 

%

 

$

4,637,584

 

$

 

%

Interest bearing deposits

 

9,101,734

 

 

8,905

 

0.39

%

 

 

9,144,727

 

 

9,640

 

0.42

%

 

 

9,456,490

 

 

16,934

 

0.71

%

Total deposits

$

15,068,985

 

$

8,905

 

0.23

%

 

$

14,993,710

 

$

9,640

 

0.26

%

 

$

14,094,074

 

$

16,934

 

0.48

%

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Twelve Months Ended

 

12/31/2021

 

12/31/2020

 

 

 

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

$

13,343,431

 

$

528,174

 

3.96

%

 

$

12,698,523

 

$

554,967

 

4.37

%

Securities available for sale

 

2,392,589

 

 

35,492

 

1.48

%

 

 

1,899,948

 

 

39,362

 

2.07

%

FHLB stock and other investments

 

844,010

 

 

2,866

 

0.34

%

 

 

982,419

 

 

4,549

 

0.46

%

Total interest earning assets

$

16,580,030

 

$

566,532

 

3.42

%

 

$

15,580,890

 

$

598,878

 

3.84

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

5,657,958

 

$

22,867

 

0.40

%

 

$

4,729,438

 

$

34,529

 

0.73

%

Savings

 

309,295

 

 

3,623

 

1.17

%

 

 

291,655

 

 

3,475

 

1.19

%

Time deposits

 

3,178,722

 

 

15,521

 

0.49

%

 

 

4,698,503

 

 

72,365

 

1.54

%

Total interest bearing deposits

 

9,145,975

 

 

42,011

 

0.46

%

 

 

9,719,596

 

 

110,369

 

1.14

%

FHLB advances

 

208,721

 

 

2,561

 

1.23

%

 

 

435,836

 

 

6,865

 

1.58

%

Convertible notes, net

 

215,633

 

 

5,289

 

2.42

%

 

 

201,859

 

 

9,457

 

4.61

%

Subordinated debentures

 

100,848

 

 

3,901

 

3.82

%

 

 

99,682

 

 

4,689

 

4.63

%

Total interest bearing liabilities

 

9,671,177

 

$

53,762

 

0.56

%

 

 

10,456,973

 

$

131,380

 

1.26

%

Noninterest bearing demand deposits

 

5,581,803

 

 

 

 

 

 

3,840,935

 

 

 

 

Total funding liabilities/cost of funds

$

15,252,980

 

 

 

0.35

%

 

$

14,297,908

 

 

 

0.92

%

Net interest income/net interest spread

 

 

$

512,770

 

2.86

%

 

 

 

$

467,498

 

2.58

%

Net interest margin

 

 

 

 

3.09

%

 

 

 

 

 

3.00

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,581,803

 

$

 

%

 

$

3,840,935

 

$

 

%

Interest bearing deposits

 

9,145,975

 

 

42,011

 

0.46

%

 

 

9,719,596

 

 

110,369

 

1.14

%

Total deposits

$

14,727,778

 

$

42,011

 

0.29

%

 

$

13,560,531

 

$

110,369

 

0.81

%

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

Twelve Months Ended

AVERAGE BALANCES:

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

 

12/31/2021

 

12/31/2020

 

% change

Loans receivable, including loans held for sale

$

13,447,009

 

 

$

13,286,382

 

 

1

%

 

$

13,046,443

 

 

3

%

 

$

13,343,431

 

$

12,698,523

 

5

%

Securities, FHLB stock, and other

 

3,448,482

 

 

 

3,568,209

 

 

(3

)%

 

 

2,872,306

 

 

20

%

 

 

3,236,599

 

 

2,882,367

 

12

%

Interest earning assets

 

16,895,491

 

 

 

16,854,591

 

 

%

 

 

15,918,749

 

 

6

%

 

 

16,580,030

 

 

15,580,890

 

6

%

Total assets

 

17,834,345

 

 

 

17,745,066

 

 

1

%

 

 

16,824,700

 

 

6

%

 

 

17,467,665

 

 

16,515,102

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

9,101,734

 

 

 

9,144,727

 

 

%

 

 

9,456,490

 

 

(4

)%

 

 

9,145,975

 

 

9,719,596

 

(6

)%

Interest bearing liabilities

 

9,635,989

 

 

 

9,661,560

 

 

%

 

 

9,965,315

 

 

(3

)%

 

 

9,671,177

 

 

10,456,973

 

(8

)%

Noninterest bearing demand deposits

 

5,967,251

 

 

 

5,848,983

 

 

2

%

 

 

4,637,584

 

 

29

%

 

 

5,581,803

 

 

3,840,935

 

45

%

Stockholders’ equity

 

2,079,694

 

 

 

2,092,018

 

 

(1

)%

 

 

2,045,959

 

 

2

%

 

 

2,071,453

 

 

2,032,570

 

2

%

Net interest earning assets

 

7,259,502

 

 

 

7,193,031

 

 

1

%

 

 

5,953,434

 

 

22

%

 

 

6,908,853

 

 

5,123,917

 

35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

 

 

 

 

 

 

Commercial loans

$

4,208,674

 

 

$

3,857,879

 

 

9

%

 

$

4,157,787

 

 

1

%

 

 

 

 

 

 

Real estate loans

 

9,105,931

 

 

 

8,908,657

 

 

2

%

 

 

8,772,134

 

 

4

%

 

 

 

 

 

 

Consumer and other loans

 

638,138

 

 

 

652,155

 

 

(2

)%

 

 

633,292

 

 

1

%

 

 

 

 

 

 

Loans, net of deferred loan fees and costs

 

13,952,743

 

 

 

13,418,691

 

 

4

%

 

 

13,563,213

 

 

3

%

 

 

 

 

 

 

Allowance for credit losses

 

(140,550

)

 

 

(136,774

)

 

(3

)%

 

 

(206,741

)

 

32

%

 

 

 

 

 

 

Loans receivable, net

$

13,812,193

 

 

$

13,281,917

 

 

4

%

 

$

13,356,472

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

 

 

 

 

 

 

Retail buildings

$

2,522,976

 

 

$

2,466,881

 

 

2

%

 

$

2,293,396

 

 

10

%

 

 

 

 

 

 

Hotels/motels

 

1,308,405

 

 

 

1,385,003

 

 

(6

)%

 

 

1,634,287

 

 

(20

)%

 

 

 

 

 

 

Gas stations/car washes

 

1,050,730

 

 

 

999,069

 

 

5

%

 

 

892,110

 

 

18

%

 

 

 

 

 

 

Mixed-use facilities

 

854,793

 

 

 

819,516

 

 

4

%

 

 

750,867

 

 

14

%

 

 

 

 

 

 

Warehouses

 

1,244,339

 

 

 

1,160,863

 

 

7

%

 

 

1,091,389

 

 

14

%

 

 

 

 

 

 

Multifamily

 

744,068

 

 

 

691,262

 

 

8

%

 

 

518,498

 

 

44

%

 

 

 

 

 

 

Other

 

1,380,620

 

 

 

1,386,063

 

 

%

 

 

1,591,587

 

 

(13

)%

 

 

 

 

 

 

Total

$

9,105,931

 

 

$

8,908,657

 

 

2

%

 

$

8,772,134

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

12/31/2021

 

9/30/2021

 

% change

 

12/31/2020

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,751,870

 

 

$

6,007,586

 

 

(4

)%

 

$

4,814,254

 

 

19

%

 

 

 

 

 

 

Money market and other

 

6,178,850

 

 

 

5,871,567

 

 

5

%

 

 

5,232,413

 

 

18

%

 

 

 

 

 

 

Saving deposits

 

321,377

 

 

 

314,603

 

 

2

%

 

 

300,770

 

 

7

%

 

 

 

 

 

 

Time deposits

 

2,788,353

 

 

 

2,868,771

 

 

(3

)%

 

 

3,986,475

 

 

(30

)%

 

 

 

 

 

 

Total deposit balances

$

15,040,450

 

 

$

15,062,527

 

 

%

 

$

14,333,912

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION (%):

12/31/2021

 

9/30/2021

 

 

 

12/31/2020

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

38.3

%

 

 

39.9

%

 

 

 

 

33.6

%

 

 

 

 

 

 

 

 

Money market and other

 

41.1

%

 

 

39.0

%

 

 

 

 

36.5

%

 

 

 

 

 

 

 

 

Saving deposits

 

2.1

%

 

 

2.1

%

 

 

 

 

2.1

%

 

 

 

 

 

 

 

 

Time deposits

 

18.5

%

 

 

19.0

%

 

 

 

 

27.8

%

 

 

 

 

 

 

 

 

Total deposit balances

 

100.0

%

 

 

100.0

%

 

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS:

12/31/2021

 

9/30/2021

 

12/31/2020

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,092,983

 

 

$

2,074,398

 

 

$

2,053,745

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

11.03

%

 

 

11.01

%

 

 

10.94

%

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio

 

11.70

%

 

 

11.70

%

 

 

11.64

%

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

12.42

%

 

 

12.42

%

 

 

12.87

%

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

10.11

%

 

 

9.98

%

 

 

10.22

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

15,036,292

 

 

$

14,737,809

 

 

$

14,341,456

 

 

 

 

 

 

 

 

 

Book value per common share

$

17.44

 

 

$

17.26

 

 

$

16.66

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

9.31

%

 

 

9.24

%

 

 

9.50

%

 

 

 

 

 

 

 

 

Tangible common equity per share (1)

$

13.51

 

 

$

13.33

 

 

$

12.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

Twelve Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

Balance at beginning of period

$

136,774

 

 

$

189,452

 

 

$

207,943

 

 

$

206,741

 

 

$

179,849

 

 

$

206,741

 

 

$

94,144

 

CECL day 1 adoption impact

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,200

 

Provision (credit) for credit losses

 

1,500

 

 

 

(10,000

)

 

 

(7,000

)

 

 

3,300

 

 

 

27,500

 

 

 

(12,200

)

 

 

95,000

 

Recoveries

 

3,615

 

 

 

1,906

 

 

 

1,301

 

 

 

1,423

 

 

 

2,207

 

 

 

8,245

 

 

 

7,423

 

Charge offs

 

(1,339

)

 

 

(44,584

)

 

 

(12,792

)

 

 

(3,521

)

 

 

(2,815

)

 

 

(62,236

)

 

 

(16,026

)

Balance at end of period

$

140,550

 

 

$

136,774

 

 

$

189,452

 

 

$

207,943

 

 

$

206,741

 

 

$

140,550

 

 

$

206,741

 

Net (recoveries) charge offs /

average loans receivable (annualized)

 

(0.07

)%

 

 

1.28

%

 

 

0.35

%

 

 

0.06

%

 

 

0.02

%

 

 

0.40

%

 

 

0.07

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

NET (RECOVERIES) CHARGE OFFS:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

Real estate loans

$

(2,352

)

 

$

40,542

 

 

$

11,281

 

 

$

2,234

 

 

$

(726

)

 

$

51,705

 

 

$

6,806

 

Commercial loans

 

144

 

 

 

1,117

 

 

 

181

 

 

 

(80

)

 

 

1,167

 

 

 

1,362

 

 

 

632

 

Consumer loans

 

(68

)

 

 

1,019

 

 

 

29

 

 

 

(56

)

 

 

167

 

 

 

924

 

 

 

1,165

 

Total net (recoveries) charge offs

$

(2,276

)

 

$

42,678

 

 

$

11,491

 

 

$

2,098

 

 

$

608

 

 

$

53,991

 

 

$

8,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 
NONPERFORMING ASSETS:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

Loans on nonaccrual status (1)

$

54,616

 

 

$

54,380

 

 

$

111,008

 

 

$

109,858

 

 

$

85,238

 

Delinquent loans 90 days or more on accrual status

 

2,131

 

 

 

4,567

 

 

 

4,759

 

 

 

384

 

 

 

614

 

Accruing troubled debt restructured loans

 

52,418

 

 

 

39,509

 

 

 

51,360

 

 

 

41,773

 

 

 

37,354

 

Total nonperforming loans

 

109,165

 

 

 

98,456

 

 

 

167,127

 

 

 

152,015

 

 

 

123,206

 

Other real estate owned

 

2,597

 

 

 

15,213

 

 

 

16,619

 

 

 

18,515

 

 

 

20,121

 

Total nonperforming assets

$

111,762

 

 

$

113,669

 

 

$

183,746

 

 

$

170,530

 

 

$

143,327

 

Nonperforming assets/total assets

 

0.62

%

 

 

0.64

%

 

 

1.05

%

 

 

0.99

%

 

 

0.84

%

Nonperforming assets/loans receivable & OREO

 

0.80

%

 

 

0.85

%

 

 

1.37

%

 

 

1.24

%

 

 

1.06

%

Nonperforming assets/total capital

 

5.34

%

 

 

5.48

%

 

 

8.78

%

 

 

8.34

%

 

 

6.98

%

Nonperforming loans/loans receivable

 

0.78

%

 

 

0.73

%

 

 

1.24

%

 

 

1.11

%

 

 

0.91

%

Nonaccrual loans/loans receivable

 

0.39

%

 

 

0.41

%

 

 

0.83

%

 

 

0.80

%

 

 

0.63

%

Allowance for credit losses/loans receivable

 

1.01

%

 

 

1.02

%

 

 

1.41

%

 

 

1.52

%

 

 

1.52

%

Allowance for credit losses/nonaccrual loans

 

257.34

%

 

 

251.52

%

 

 

170.67

%

 

 

189.28

%

 

 

242.55

%

Allowance for credit losses/nonperforming loans

 

128.75

%

 

 

138.92

%

 

 

113.36

%

 

 

136.79

%

 

 

167.80

%

Allowance for credit losses/nonperforming assets

 

125.76

%

 

 

120.33

%

 

 

103.11

%

 

 

121.94

%

 

 

144.24

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $19.5 million, $20.6 million, $23.6 million, $25.0 million, and $26.5 million, at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

Real estate loans

$

39,756

 

 

$

41,673

 

 

$

95,622

 

 

$

91,940

 

 

$

67,450

 

Commercial loans

 

11,025

 

 

 

10,991

 

 

 

12,217

 

 

 

14,080

 

 

 

13,911

 

Consumer loans

 

3,835

 

 

 

1,716

 

 

 

3,169

 

 

 

3,838

 

 

 

3,877

 

Total nonaccrual loans

$

54,616

 

 

$

54,380

 

 

$

111,008

 

 

$

109,858

 

 

$

85,238

 

 

 

 

 

 

 

 

 

 

 

BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

Retail buildings

$

28,483

 

 

$

11,280

 

 

$

12,110

 

 

$

6,319

 

 

$

5,408

 

Hotels/motels

 

472

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas stations/car washes

 

197

 

 

 

202

 

 

 

206

 

 

 

210

 

 

 

219

 

Mixed-use facilities

 

2,846

 

 

 

7,937

 

 

 

7,967

 

 

 

3,377

 

 

 

3,521

 

Warehouses

 

5,366

 

 

 

4,908

 

 

 

14,099

 

 

 

14,124

 

 

 

7,296

 

Other (2)

 

15,054

 

 

 

15,182

 

 

 

16,978

 

 

 

17,743

 

 

 

20,910

 

Total

$

52,418

 

 

$

39,509

 

 

$

51,360

 

 

$

41,773

 

 

$

37,354

 

 

 

 

 

 

 

 

 

 

 

(2) Includes commercial business, consumer and other loans

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

30 - 59 days

$

29,723

 

$

15,016

 

$

22,466

 

$

18,175

 

$

11,347

60 - 89 days

 

10,345

 

 

4,746

 

 

6,987

 

 

8,314

 

 

16,826

Total

$

40,068

 

$

19,762

 

$

29,453

 

$

26,489

 

$

28,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

Real estate loans

$

20,232

 

$

10,359

 

$

21,432

 

$

18,331

 

$

15,689

Commercial loans

 

3,057

 

 

9,377

 

 

560

 

 

1,002

 

 

3,393

Consumer loans

 

16,779

 

 

26

 

 

7,461

 

 

7,156

 

 

9,091

Total

$

40,068

 

$

19,762

 

$

29,453

 

$

26,489

 

$

28,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

12/31/2021

 

9/30/2021

 

6/30/2021

 

3/31/2021

 

12/31/2020

Special mention

$

257,194

 

$

306,766

 

$

294,559

 

$

280,974

 

$

184,941

Substandard

 

242,397

 

 

243,684

 

 

380,955

 

 

379,048

 

 

366,557

Total criticized loans

$

499,591

 

$

550,450

 

$

675,514

 

$

660,022

 

$

551,498

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 
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

 

Twelve Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

$

2,079,694

 

 

$

2,092,018

 

 

$

2,045,959

 

 

$

2,071,453

 

 

$

2,032,570

 

Less: Goodwill and core deposit intangible assets, net

 

(472,405

)

 

 

(472,918

)

 

 

(474,467

)

 

 

(473,177

)

 

 

(475,263

)

Average tangible common equity

$

1,607,289

 

 

$

1,619,100

 

 

$

1,571,492

 

 

$

1,598,276

 

 

$

1,557,307

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

51,623

 

 

$

55,499

 

 

$

28,319

 

 

$

204,572

 

 

$

111,515

 

Return on average tangible common equity (annualized)

 

12.85

%

 

 

13.71

%

 

 

7.21

%

 

 

12.80

%

 

 

7.16

%

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

12/31/2021

 

9/30/2021

 

12/31/2020

 

 

 

 

Total stockholders’ equity

$

2,092,983

 

 

$

2,074,398

 

 

$

2,053,745

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(472,121

)

 

 

(472,630

)

 

 

(474,158

)

 

 

 

 

Tangible common equity

$

1,620,862

 

 

$

1,601,768

 

 

$

1,579,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

17,889,061

 

 

$

17,799,026

 

 

$

17,106,664

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(472,121

)

 

 

(472,630

)

 

 

(474,158

)

 

 

 

 

Tangible assets

$

17,416,940

 

 

$

17,326,396

 

 

$

16,632,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

120,006,452

 

 

 

120,198,061

 

 

 

123,264,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

9.31

%

 

 

9.24

%

 

 

9.50

%

 

 

 

 

Tangible common equity per share

$

13.51

 

 

$

13.33

 

 

$

12.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2021

 

9/30/2021

 

12/31/2020

 

12/31/2021

 

12/31/2020

PRE-PROVISION NET REVENUE

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

$

133,318

 

 

$

130,296

 

 

$

120,756

 

 

$

512,770

 

 

$

467,498

 

Noninterest income

 

13,097

 

 

 

10,617

 

 

 

11,415

 

 

 

43,594

 

 

 

53,432

 

Revenue

 

146,415

 

 

 

140,913

 

 

 

132,171

 

 

 

556,364

 

 

 

520,930

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

74,236

 

 

 

75,502

 

 

 

71,063

 

 

 

293,292

 

 

 

283,639

 

Pre-provision net revenue

$

72,179

 

 

$

65,411

 

 

$

61,108

 

 

$

263,072

 

 

$

237,291

 

 

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