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Hope Bancorp Reports 2022 Third Quarter 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 third quarter and nine months ended September 30, 2022.

For the three months ended September 30, 2022, net income totaled $53.7 million, or $0.45 per diluted common share, compared with $52.1 million, or $0.43 per diluted common share, in the preceding second quarter and $55.5 million, or $0.45 per diluted common share, in the year-ago third quarter.

“We delivered a strong performance for the third quarter of 2022 that demonstrates the significant strides we have made in transforming the profile of our franchise to a lower-risk, high-performing regional bank,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “We broke new ground yet again with another record high in originations totaling $1.35 billion and representing a well diversified mix with commercial loans accounting for 55% of new loans. Loans receivable grew 6.5% quarter-over-quarter or 11% year-to-date, and together with the increased yields on our interest-earning assets outpacing deposit cost growth, our net interest margin expanded by 13 basis points for the quarter. This, together with the strong loan growth and higher loan yields, resulted in an 8% quarter-over-quarter and 18% year-over-year increase in our net interest income for the third quarter of 2022. We are also pleased that our enhanced credit administration framework is driving ongoing improvements in our asset quality with total nonperforming assets and total criticized loans decreasing 12% and 17%, respectively, quarter-over-quarter. The improved earnings power of Bank of Hope is underscored by the improvements in our pre-provision net revenue, which increased 12% quarter-over-quarter to a record high for the Company.

“As we move forward into the final quarter of the year, our board and management team remain confident in our ability to navigate through the challenges of the current environment and deliver strong financial results for our stockholders for the long term,” said Kim.

Q3 2022 Highlights

  • Loan originations totaled a record $1.35 billion, representing a well-diversified mix of new loan production with new commercial loans accounting for 55% of total originations for the quarter.
  • Loans receivable increased 6.5% quarter-over-quarter, or 11% year-to-date.
  • Criticized loan balances continued its downward trend, decreasing 17% quarter-over-quarter, or 43% year-to-date.
  • Total nonperforming assets declined 12% quarter-over-quarter and represented 0.51% of total assets.
  • Company recorded a provision for credit losses of $9.2 million, primarily reflecting strong loan growth and increased recessionary risk factors.
  • Net interest income increased 8% quarter-over-quarter and 18% year-over-year.
  • Net interest margin expanded 13 basis points from the preceding second quarter, benefiting from 4% linked-quarter increase in average loans outstanding and a 59 basis-point expansion in average loan yields.
  • Total deposits increased 3.1% quarter-over-quarter, reflecting increases in time deposits.
  • Total cost of deposits increased 46 basis points quarter-over-quarter, reflecting the impact of increases in the Federal Funds target rates since June 2022.
  • Pre-provision net revenue increased 11.8% quarter-over-quarter to a record high $82.6 million.

Financial Highlights

 

At or for the Three Months Ended

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

9/30/2022

 

6/30/2022

 

9/30/2021

Net income

$

53,748

 

 

$

52,088

 

 

$

55,499

 

Diluted earnings per share

$

0.45

 

 

$

0.43

 

 

$

0.45

 

Pre-provision net revenue (“PPNR”) (1)

$

82,627

 

 

$

73,919

 

 

$

65,411

 

Net interest income before provision (credit) for credit losses

$

153,186

 

 

$

141,538

 

 

$

130,296

 

Net interest margin

 

3.49

%

 

 

3.36

%

 

 

3.07

%

Noninterest income

$

13,355

 

 

$

12,746

 

 

$

10,617

 

Noninterest expense

$

83,914

 

 

$

80,365

 

 

$

75,502

 

Net loans receivable

$

15,330,626

 

 

$

14,394,469

 

 

$

13,281,917

 

Deposits

$

15,502,209

 

 

$

15,029,630

 

 

$

15,062,527

 

Total cost of deposits

 

0.79

%

 

 

0.33

%

 

 

0.26

%

Nonaccrual loans(2)

$

64,571

 

 

$

69,522

 

 

$

54,380

 

Nonperforming loans to loans receivable(2)

 

0.62

%

 

 

0.75

%

 

 

0.73

%

ACL to loans receivable

 

1.04

%

 

 

1.04

%

 

 

1.02

%

ACL to nonaccrual loans(2)

 

248.66

%

 

 

218.03

%

 

 

251.52

%

ACL to nonperforming assets(2)

 

165.55

%

 

 

137.09

%

 

 

120.33

%

Provision (credit) for credit losses

$

9,200

 

 

$

3,200

 

 

$

(10,000

)

Net charge offs (recoveries)

$

219

 

 

$

(930

)

 

$

42,678

 

Return on average assets (“ROA”)

 

1.17

%

 

 

1.17

%

 

 

1.25

%

Return on average equity (“ROE”)

 

10.58

%

 

 

10.33

%

 

 

10.61

%

ROA (PPNR) (1)

 

1.79

%

 

 

1.65

%

 

 

1.47

%

ROE (PPNR) (1)

 

16.26

%

 

 

14.66

%

 

 

12.51

%

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

 

13.77

%

 

 

13.48

%

 

 

13.71

%

Noninterest expense / average assets

 

1.82

%

 

 

1.80

%

 

 

1.70

%

Efficiency ratio

 

50.39

%

 

 

52.09

%

 

 

53.58

%

(1)

Pre-provision net revenue, ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Pages 10 and 11 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

(2)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation.

Operating Results for the 2022 Third Quarter

Net interest income before provision for credit losses for the 2022 third quarter increased 8% to $153.2 million from $141.5 million in the 2022 second quarter and increased 18% from $130.3 million in the 2021 third quarter. The Company attributed the increase to higher interest income largely due to a favorable shift in our mix of earning assets, as well as higher average balances of loans receivable and an increase in loan yields, partially offset by higher interest expense on deposits.

The net interest margin for the 2022 third quarter increased 13 basis points to 3.49% from 3.36% in the preceding second quarter and increased 42 basis points from 3.07% in the year-ago third quarter, as the expansion of the yields on interest-earning assets outpaced the increase in the cost of deposits.

The weighted average yield on loans for the 2022 third quarter was 4.65%, up 59 basis points from 4.06% in the 2022 second quarter and up 68 basis points from the year-ago third quarter. The Company attributed the quarter-over-quarter increase in weighted average yield on loans to the repricing of its variable rate loans following the increases in the market interest rates, as well as a significant increase in the average rate of new loans originated during the quarter.

The weighted average cost of deposits for the 2022 third quarter increased by 46 basis points to 0.79% from 0.33% in the 2022 second quarter, primarily reflecting a 71 basis point increase in the cost of interest bearing deposits due to the previously mentioned Federal Funds target rate hikes. Compared with the year-ago third quarter, the weighted average cost of deposits for the 2022 third quarter increased 53 basis points from 0.26%, reflecting an 83 basis point increase in the cost of interest bearing deposits.

Noninterest income for the 2022 third quarter increased 5% to $13.4 million from $12.7 million in the 2022 second quarter. Quarter-over-quarter reductions in the net gains on sales of SBA loans and residential mortgage loans were more than offset by increases across most all other noninterest income categories. Most notably, other income and fees increased 94% quarter-over-quarter, which largely reflects higher swap fee income and a reduction in fair value losses on equity investments. During the 2022 third quarter, the Company sold $57.8 million in the guaranteed portion of SBA 7(a) loans and $3.7 million in retail mortgage loans, compared with $70.2 million and $4.1 million, respectively, sold in the preceding second quarter. Noninterest income for the 2022 third quarter increased 26% compared with $10.6 million in the third quarter of 2021, primarily reflecting higher service fees on deposit accounts, as well as other income and fees.

Noninterest expense for the 2022 third quarter increased 4% to $83.9 million from $80.4 million for the preceding second quarter, largely reflecting higher salaries and employee benefits and other noninterest expenses, partially offset by lower credit related expenses. For the 2021 third quarter, noninterest expense totaled $75.5 million.

Salaries and employee benefits expense for the 2022 third quarter increased to $53.2 million from $51.1 million in the preceding second quarter, largely reflecting higher incentive compensation accruals related to the strong financial performance. Salaries and employee benefits expense for the 2021 third quarter totaled $47.0 million.

Other noninterest expense for the 2022 third quarter increased to $10.8 million from $6.3 million in the 2022 second quarter and $6.4 million in the 2021 third quarter, largely reflecting higher earnings credit expenses as a result of recent Fed Fund rate hikes and higher amortization expense related to low-income housing tax credits.

The Company’s efficiency ratio for the 2022 third quarter was 50.39%, compared with 52.09% in the preceding second quarter and 53.58% in the year-ago third quarter. Noninterest expense as a percentage of average assets was 1.82% for the 2022 third quarter, compared with 1.80% for the 2022 second quarter and 1.70% for the 2021 third quarter.

The effective tax rate for the 2022 third quarter was 26.8%, compared with 26.4% for the preceding second quarter and 26.4% in the year-ago third quarter.

Balance Sheet Summary

New loan originations during the 2022 third quarter totaled $1.35 billion, reflecting a 5% increase over the preceding second quarter and a 34% increase over the year-ago third quarter.

Following are the components of new loan production for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021.

 

For the Three Months Ended

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Commercial real estate

$

500,826

 

$

522,093

 

$

488,969

Commercial

 

732,341

 

 

544,639

 

 

329,702

SBA

 

47,428

 

 

35,085

 

 

115,023

Residential mortgage

 

67,079

 

 

181,408

 

 

75,007

Consumer

 

1,020

 

 

2,770

 

 

500

Total new loan originations

$

1,348,694

 

$

1,285,995

 

$

1,009,201

At September 30, 2022, loans receivable increased 6.5% to $15.49 billion from $14.55 billion at June 30, 2022 and increased 15.4% from $13.42 billion at September 30, 2021.

Total deposits at September 30, 2022 increased 3.1% to $15.50 billion from $15.03 billion at June 30, 2022, largely reflecting an increase in time deposits, and increased 2.9% year-over-year from $15.06 billion at September 30, 2021. Quarter-over-quarter, noninterest bearing demand and money market and NOW deposits decreased 1.7% and 7.2%, respectively, but these decreases were more than offset by a 38.7% increase in time deposits. On a year-over-year basis, noninterest bearing demand deposits at September 30, 2022 decreased 6.9%, money market and NOW deposits increased 0.2%, and time deposits increased 29.3%.

Following is the deposit composition as of September 30, 2022, June 30, 2022 and September 30, 2021:

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Noninterest bearing demand deposits

$

5,590,952

 

$

5,689,992

 

$

6,007,586

Money market and other

 

5,885,093

 

 

6,339,467

 

 

5,871,567

Saving deposits

 

317,841

 

 

326,927

 

 

314,603

Time deposits

 

3,708,323

 

 

2,673,244

 

 

2,868,771

Total deposit balances

$

15,502,209

 

$

15,029,630

 

$

15,062,527

Following is the deposit composition as a percentage of total deposits and a breakdown of cost of deposits as of and for the quarters ended September 30, 2022, June 30, 2022 and September 30, 2021:

 

Deposit Breakdown

 

Cost of Deposits

(unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

 

Q3 2022

 

Q2 2022

 

Q3 2021

Noninterest bearing demand deposits

36.1

%

 

37.9

%

 

39.9

%

 

%

 

%

 

%

Money market and other

38.0

%

 

42.2

%

 

39.0

%

 

1.24

%

 

0.54

%

 

0.40

%

Saving deposits

2.0

%

 

2.1

%

 

2.1

%

 

1.18

%

 

1.16

%

 

1.18

%

Time deposits

23.9

%

 

17.8

%

 

19.0

%

 

1.27

%

 

0.46

%

 

0.38

%

Total deposit balances

100.0

%

 

100.0

%

 

100.0

%

 

0.79

%

 

0.33

%

 

0.26

%

Allowance for Credit Losses

For the 2022 third quarter, the Company recorded a provision for credit losses of $9.2 million, compared with a provision for credit losses of $3.2 million in the preceding second quarter and a negative provision for credit losses of $10.0 million in the 2021 third quarter.

Following is the allowance for credit losses and allowance coverage ratios as of September 30, 2022, June 30, 2022 and September 30, 2021:

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Allowance for credit losses

$

160,561

 

 

$

151,580

 

 

$

136,774

 

Allowance for credit loss/loans receivable

 

1.04

%

 

 

1.04

%

 

 

1.02

%

Allowance for credit losses/nonperforming loans

 

168.11

%

 

 

139.63

%

 

 

138.92

%

Credit Quality

Following are the components of nonperforming assets as of September 30, 2022, June 30, 2022 and September 30, 2021:

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Loans on nonaccrual status (1)

$

64,571

 

$

69,522

 

$

54,380

Delinquent loans 90 days or more on accrual status

 

5,306

 

 

12,468

 

 

4,567

Accruing troubled debt restructured loans

 

25,631

 

 

26,572

 

 

39,509

Total nonperforming loans

 

95,508

 

 

108,562

 

 

98,456

Other real estate owned

 

1,480

 

 

2,010

 

 

15,213

Total nonperforming assets

$

96,988

 

$

110,572

 

$

113,669

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.9 million, $13.2 million and $20.6 million, at September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Total nonperforming assets at September 30, 2022 decreased to $97.0 million from $110.6 million at June 30, 2022 and from $113.7 million at September 30, 2021. Quarter-over-quarter, the decrease in total nonperforming assets reflects reductions across the board in all categories.

Following are net charge offs (recoveries) and net charge offs (recoveries) to average loans receivable on an annualized basis for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Net charge offs (recoveries)

$

219

 

 

$

(930

)

 

$

42,678

 

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

 

0.01

%

 

 

(0.03

)%

 

 

1.28

%

Following are the components of criticized loan balances as of September 30, 2022, June 30, 2022 and September 30, 2021:

(dollars in thousands) (unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Special mention

$

79,399

 

$

95,797

 

$

306,766

Substandard

 

204,713

 

 

244,748

 

 

243,684

Total criticized loans

$

284,112

 

$

340,545

 

$

550,450

At September 30, 2022, special mention loans decreased 17.1% quarter-over-quarter and total criticized loans decreased 16.6% quarter-over-quarter. Compared with a year ago at September 30, 2021, special mention and total criticized loans decreased 74.1% and 48.4%, respectively.

Capital

At September 30, 2022, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. Following are capital ratios for the Company as of September 30, 2022, June 30, 2022 and September 30, 2021:

(unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

 

Minimum Guideline for “Well-Capitalized” Bank

Common Equity Tier 1 Capital

10.32

%

 

10.69

%

 

11.01

%

 

6.50

%

Tier 1 Leverage Ratio

10.25

%

 

10.32

%

 

9.98

%

 

5.00

%

Tier 1 Risk-Based Ratio

10.91

%

 

11.33

%

 

11.70

%

 

8.00

%

Total Risk-Based Ratio

11.72

%

 

12.13

%

 

12.42

%

 

10.00

%

Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of September 30, 2022, June 30, 2022 and September 30, 2021:

(unaudited)

9/30/2022

 

6/30/2022

 

9/30/2021

Tangible common equity per share (1)

$

12.60

 

 

$

12.80

 

 

$

13.33

 

Tangible common equity to tangible assets (1)

 

8.09

%

 

 

8.68

%

 

 

9.24

%

(1)

Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth in the following section. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including pre-provision net revenue, ROA (PPNR), ROE (PPNR), tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding its operational performance and the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in these financial metrics. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, October 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its third quarter ended September 30, 2022. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through November 1, 2022, replay access code 7421375.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.08 billion in total assets as of September 30, 2022. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Forward-Looking Statements

Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

Assets:

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

Cash and due from banks

$

331,336

 

 

$

197,062

 

 

68

%

 

$

627,352

 

 

(47

)%

Investment securities

 

2,264,533

 

 

 

2,352,997

 

 

(4

)%

 

 

2,669,489

 

 

(15

)%

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

 

65,192

 

 

 

87,109

 

 

(25

)%

 

 

88,102

 

 

(26

)%

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

 

41,989

 

 

 

76,376

 

 

(45

)%

 

 

179,117

 

 

(77

)%

Loans receivable

 

15,491,187

 

 

 

14,546,049

 

 

6

%

 

 

13,418,691

 

 

15

%

Allowance for credit losses

 

(160,561

)

 

 

(151,580

)

 

6

%

 

 

(136,774

)

 

17

%

Net loans receivable

 

15,330,626

 

 

 

14,394,469

 

 

7

%

 

 

13,281,917

 

 

15

%

Accrued interest receivable

 

42,363

 

 

 

37,845

 

 

12

%

 

 

47,102

 

 

(10

)%

Premises and equipment, net

 

46,169

 

 

 

46,093

 

 

%

 

 

45,307

 

 

2

%

Bank owned life insurance

 

76,788

 

 

 

77,692

 

 

(1

)%

 

 

76,756

 

 

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

11,601

 

 

 

11,215

 

 

3

%

 

 

10,787

 

 

8

%

Other intangible assets, net

 

6,212

 

 

 

6,698

 

 

(7

)%

 

 

8,180

 

 

(24

)%

Other assets

 

402,129

 

 

 

337,056

 

 

19

%

 

 

300,467

 

 

34

%

Total assets

$

19,083,388

 

 

$

18,089,062

 

 

5

%

 

$

17,799,026

 

 

7

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,502,209

 

 

$

15,029,630

 

 

3

%

 

$

15,062,527

 

 

3

%

FHLB and FRB borrowings

 

1,072,000

 

 

 

573,000

 

 

87

%

 

 

200,000

 

 

436

%

Convertible notes, net

 

216,913

 

 

 

216,678

 

 

%

 

 

215,974

 

 

%

Subordinated debentures

 

106,258

 

 

 

105,953

 

 

%

 

 

105,057

 

 

1

%

Accrued interest payable

 

11,713

 

 

 

4,112

 

 

185

%

 

 

5,367

 

 

118

%

Other liabilities

 

198,570

 

 

 

159,320

 

 

25

%

 

 

135,703

 

 

46

%

Total liabilities

$

17,107,663

 

 

$

16,088,693

 

 

6

%

 

$

15,724,628

 

 

9

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

136

 

 

1

%

Capital surplus

 

1,428,052

 

 

 

1,424,891

 

 

%

 

 

1,420,151

 

 

1

%

Retained earnings

 

1,048,738

 

 

 

1,011,715

 

 

4

%

 

 

897,766

 

 

17

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(247,198

)

 

(7

)%

Accumulated other comprehensive (loss) gain, net

 

(236,535

)

 

 

(171,707

)

 

(38

)%

 

 

3,543

 

 

N/A

 

Total stockholders’ equity

 

1,975,725

 

 

 

2,000,369

 

 

(1

)%

 

 

2,074,398

 

 

(5

)%

Total liabilities and stockholders’ equity

$

19,083,388

 

 

$

18,089,062

 

 

5

%

 

$

17,799,026

 

 

7

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

119,479,253

 

 

 

119,473,939

 

 

 

 

 

120,198,061

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

17,382,835

 

 

 

 

 

16,149,007

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

 

9/30/2022

 

9/30/2021

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

175,078

 

$

145,024

 

 

21

%

 

$

132,794

 

 

32

%

 

$

452,774

 

 

$

394,353

 

 

15

%

Interest on investment securities

 

13,498

 

 

12,308

 

 

10

%

 

 

9,207

 

 

47

%

 

 

37,462

 

 

 

24,835

 

 

51

%

Interest on federal funds sold and other investments

 

606

 

 

492

 

 

23

%

 

 

865

 

 

(30

)%

 

 

1,642

 

 

 

2,175

 

 

(25

)%

Total interest income

 

189,182

 

 

157,824

 

 

20

%

 

 

142,866

 

 

32

%

 

 

491,878

 

 

 

421,363

 

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

30,667

 

 

12,220

 

 

151

%

 

 

9,640

 

 

218

%

 

 

51,563

 

 

 

33,106

 

 

56

%

Interest on other borrowings and convertible notes

 

5,329

 

 

4,066

 

 

31

%

 

 

2,930

 

 

82

%

 

 

12,415

 

 

 

8,805

 

 

41

%

Total interest expense

 

35,996

 

 

16,286

 

 

121

%

 

 

12,570

 

 

186

%

 

 

63,978

 

 

 

41,911

 

 

53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

153,186

 

 

141,538

 

 

8

%

 

 

130,296

 

 

18

%

 

 

427,900

 

 

 

379,452

 

 

13

%

Provision (credit) for credit losses

 

9,200

 

 

3,200

 

 

188

%

 

 

(10,000

)

 

N/A

 

 

 

1,400

 

 

 

(13,700

)

 

N/A

 

Net interest income after provision (credit) for credit losses

 

143,986

 

 

138,338

 

 

4

%

 

 

140,296

 

 

3

%

 

 

426,500

 

 

 

393,152

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,535

 

 

2,270

 

 

12

%

 

 

1,814

 

 

40

%

 

 

6,779

 

 

 

5,381

 

 

26

%

International service fees

 

834

 

 

744

 

 

12

%

 

 

889

 

 

(6

)%

 

 

2,372

 

 

 

2,525

 

 

(6

)%

Loan servicing fees, net

 

981

 

 

843

 

 

16

%

 

 

642

 

 

53

%

 

 

2,660

 

 

 

2,620

 

 

2

%

Wire transfer fees

 

856

 

 

858

 

 

%

 

 

836

 

 

2

%

 

 

2,614

 

 

 

2,603

 

 

%

Net gains on sales of SBA loans

 

2,782

 

 

5,804

 

 

(52

)%

 

 

2,459

 

 

13

%

 

 

14,189

 

 

 

4,834

 

 

194

%

Net gains on sales of residential mortgage loans

 

29

 

 

76

 

 

(62

)%

 

 

781

 

 

(96

)%

 

 

862

 

 

 

3,905

 

 

(78

)%

Net gains (losses) on sales of other loans

 

117

 

 

(547

)

 

N/A

 

 

 

 

 

100

%

 

 

(430

)

 

 

 

 

100

%

Other income and fees

 

5,221

 

 

2,698

 

 

94

%

 

 

3,196

 

 

63

%

 

 

10,241

 

 

 

8,629

 

 

19

%

Total noninterest income

 

13,355

 

 

12,746

 

 

5

%

 

 

10,617

 

 

26

%

 

 

39,287

 

 

 

30,497

 

 

29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

53,222

 

 

51,058

 

 

4

%

 

 

47,018

 

 

13

%

 

 

152,025

 

 

 

130,543

 

 

16

%

Occupancy

 

6,682

 

 

7,178

 

 

(7

)%

 

 

7,473

 

 

(11

)%

 

 

21,195

 

 

 

21,507

 

 

(1

)%

Furniture and equipment

 

4,967

 

 

4,778

 

 

4

%

 

 

4,429

 

 

12

%

 

 

14,389

 

 

 

13,437

 

 

7

%

Advertising and marketing

 

1,739

 

 

2,226

 

 

(22

)%

 

 

2,656

 

 

(35

)%

 

 

5,601

 

 

 

6,378

 

 

(12

)%

Data processing and communications

 

2,469

 

 

2,893

 

 

(15

)%

 

 

2,394

 

 

3

%

 

 

7,823

 

 

 

7,542

 

 

4

%

Professional fees

 

1,196

 

 

1,582

 

 

(24

)%

 

 

2,431

 

 

(51

)%

 

 

4,989

 

 

 

9,729

 

 

(49

)%

FDIC assessment

 

1,633

 

 

1,450

 

 

13

%

 

 

1,204

 

 

36

%

 

 

4,652

 

 

 

3,743

 

 

24

%

Credit related expenses

 

873

 

 

2,872

 

 

(70

)%

 

 

1,266

 

 

(31

)%

 

 

4,857

 

 

 

3,527

 

 

38

%

OREO expense

 

378

 

 

5

 

 

7,460

%

 

 

248

 

 

52

%

 

 

740

 

 

 

827

 

 

(11

)%

Software impairment

 

 

 

 

 

%

 

 

 

 

%

 

 

 

 

 

2,146

 

 

(100

)%

Other

 

10,755

 

 

6,323

 

 

70

%

 

 

6,383

 

 

68

%

 

 

23,381

 

 

 

19,677

 

 

19

%

Total noninterest expense

 

83,914

 

 

80,365

 

 

4

%

 

 

75,502

 

 

11

%

 

 

239,652

 

 

 

219,056

 

 

9

%

Income before income taxes

 

73,427

 

 

70,719

 

 

4

%

 

 

75,411

 

 

(3

)%

 

 

226,135

 

 

 

204,593

 

 

11

%

Income tax provision

 

19,679

 

 

18,631

 

 

6

%

 

 

19,912

 

 

(1

)%

 

 

59,561

 

 

 

51,644

 

 

15

%

Net income

$

53,748

 

$

52,088

 

 

3

%

 

$

55,499

 

 

(3

)%

 

$

166,574

 

 

$

152,949

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

��

 

 

 

Earnings Per Common Share - Basic

$

0.45

 

$

0.43

 

 

 

 

$

0.45

 

 

 

 

$

1.39

 

 

$

1.24

 

 

 

Earnings Per Common Share - Diluted

$

0.45

 

$

0.43

 

 

 

 

$

0.45

 

 

 

 

$

1.38

 

 

$

1.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

119,476,035

 

 

120,219,919

 

 

 

 

 

122,244,948

 

 

 

 

 

119,940,044

 

 

 

123,050,174

 

 

 

Weighted Average Shares Outstanding - Diluted

 

119,996,523

 

 

120,699,638

 

 

 

 

 

122,908,536

 

 

 

 

 

120,595,988

 

 

 

123,848,512

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

(Annualized)

 

For the Nine Months Ended

(Annualized)

Profitability measures:

9/30/2022

 

6/30/2022

 

9/30/2021

 

9/30/2022

 

9/30/2021

ROA

1.17

%

 

1.17

%

 

1.25

%

 

1.23

%

 

1.18

%

ROE

10.58

%

 

10.33

%

 

10.61

%

 

10.85

%

 

9.86

%

ROA (PPNR) (1)

1.79

%

 

1.65

%

 

1.47

%

 

1.68

%

 

1.47

%

ROE (PPNR) (1)

16.26

%

 

14.66

%

 

12.51

%

 

14.83

%

 

12.30

%

ROTCE (2)

13.77

%

 

13.48

%

 

13.71

%

 

14.10

%

 

12.78

%

Net interest margin

3.49

%

 

3.36

%

 

3.07

%

 

3.36

%

 

3.08

%

Efficiency ratio

50.39

%

 

52.09

%

 

53.58

%

 

51.30

%

 

53.43

%

Noninterest expense / average assets

1.82

%

 

1.80

%

 

1.70

%

 

1.77

%

 

1.68

%

(1)

ROA (PPNR) and ROE (PPNR) are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Pages 10 and 11 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

(2)

Average tangible common equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

Three Months Ended

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,925,298

 

$

175,078

 

4.65

%

 

$

14,327,476

 

$

145,024

 

4.06

%

 

$

13,286,382

 

$

132,794

 

3.97

%

Investment securities

 

2,366,696

 

 

13,498

 

2.26

%

 

 

2,424,454

 

 

12,308

 

2.04

%

 

 

2,370,672

 

 

9,207

 

1.54

%

FHLB stock and other investments

 

107,724

 

 

606

 

2.23

%

 

 

134,055

 

 

492

 

1.47

%

 

 

1,197,537

 

 

865

 

0.29

%

Total interest earning assets

$

17,399,718

 

$

189,182

 

4.31

%

 

$

16,885,985

 

$

157,824

 

3.75

%

 

$

16,854,591

 

$

142,866

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

6,255,271

 

$

19,614

 

1.24

%

 

$

6,487,890

 

$

8,655

 

0.54

%

 

$

5,919,225

 

$

5,946

 

0.40

%

Savings

 

324,487

 

 

969

 

1.18

%

 

 

323,114

 

 

937

 

1.16

%

 

 

310,525

 

 

920

 

1.18

%

Time deposits

 

3,146,432

 

 

10,084

 

1.27

%

 

 

2,277,938

 

 

2,628

 

0.46

%

 

 

2,914,977

 

 

2,774

 

0.38

%

Total interest bearing deposits

 

9,726,190

 

 

30,667

 

1.25

%

 

 

9,088,942

 

 

12,220

 

0.54

%

 

 

9,144,727

 

 

9,640

 

0.42

%

FHLB and FRB borrowings

 

448,837

 

 

2,393

 

2.12

%

 

 

577,966

 

 

1,457

 

1.01

%

 

 

200,000

 

 

640

 

1.27

%

Convertible notes, net

 

216,762

 

 

1,322

 

2.39

%

 

 

216,540

 

 

1,322

 

2.42

%

 

 

215,840

 

 

1,321

 

2.39

%

Subordinated debentures

 

102,182

 

 

1,614

 

6.18

%

 

 

101,880

 

 

1,287

 

5.00

%

 

 

100,993

 

 

969

 

3.75

%

Total interest bearing liabilities

$

10,493,971

 

$

35,996

 

1.36

%

 

$

9,985,328

 

$

16,286

 

0.65

%

 

$

9,661,560

 

$

12,570

 

0.52

%

Noninterest bearing demand deposits

 

5,719,155

 

 

 

 

 

 

5,715,830

 

 

 

 

 

 

5,848,983

 

 

 

 

Total funding liabilities/cost of funds

$

16,213,126

 

 

 

0.88

%

 

$

15,701,158

 

 

 

0.42

%

 

$

15,510,543

 

 

 

0.32

%

Net interest income/net interest spread

 

 

$

153,186

 

2.95

%

 

 

 

$

141,538

 

3.10

%

 

 

 

$

130,296

 

2.84

%

Net interest margin

 

 

 

 

3.49

%

 

 

 

 

 

3.36

%

 

 

 

 

 

3.07

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,719,155

 

$

 

%

 

$

5,715,830

 

$

 

%

 

$

5,848,983

 

$

 

%

Interest bearing deposits

 

9,726,190

 

 

30,667

 

1.25

%

 

 

9,088,942

 

 

12,220

 

0.54

%

 

 

9,144,727

 

 

9,640

 

0.42

%

Total deposits

$

15,445,345

 

$

30,667

 

0.79

%

 

$

14,804,772

 

$

12,220

 

0.33

%

 

$

14,993,710

 

$

9,640

 

0.26

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

Nine Months Ended

 

9/30/2022

 

9/30/2021

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,378,774

 

$

452,774

 

4.21

%

 

$

13,308,526

 

$

394,353

 

3.96

%

Investment securities

 

2,469,858

 

 

37,462

 

2.03

%

 

 

2,297,450

 

 

24,835

 

1.45

%

FHLB stock and other investments

 

197,287

 

 

1,642

 

1.11

%

 

 

867,745

 

 

2,175

 

0.34

%

Total interest earning assets

$

17,045,919

 

$

491,878

 

3.86

%

 

$

16,473,721

 

$

421,363

 

3.42

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

6,360,040

 

$

33,970

 

0.71

%

 

$

5,555,711

 

$

17,345

 

0.42

%

Savings

 

322,058

 

 

2,834

 

1.18

%

 

 

306,780

 

 

2,678

 

1.17

%

Time deposits

 

2,683,217

 

 

14,759

 

0.74

%

 

 

3,298,393

 

 

13,083

 

0.53

%

Total interest bearing deposits

 

9,365,315

 

 

51,563

 

0.74

%

 

 

9,160,884

 

 

33,106

 

0.48

%

FHLB and FRB borrowings

 

423,875

 

 

4,537

 

1.43

%

 

 

205,971

 

 

1,913

 

1.24

%

Convertible notes, net

 

216,538

 

 

3,967

 

2.42

%

 

 

215,483

 

 

3,967

 

2.43

%

Subordinated debentures

 

101,882

 

 

3,911

 

5.06

%

 

 

100,697

 

 

2,925

 

3.83

%

Total interest bearing liabilities

$

10,107,610

 

$

63,978

 

0.85

%

 

$

9,683,035

 

$

41,911

 

0.58

%

Noninterest bearing demand deposits

 

5,702,754

 

 

 

 

 

 

5,451,908

 

 

 

 

Total funding liabilities/cost of funds

$

15,810,364

 

 

 

0.54

%

 

$

15,134,943

 

 

 

0.37

%

Net interest income/net interest spread

 

 

$

427,900

 

3.01

%

 

 

 

$

379,452

 

2.84

%

Net interest margin

 

 

 

 

3.36

%

 

 

 

 

 

3.08

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,702,754

 

$

 

%

 

$

5,451,908

 

$

 

%

Interest bearing deposits

 

9,365,315

 

 

51,563

 

0.74

%

 

 

9,160,884

 

 

33,106

 

0.48

%

Total deposits

$

15,068,069

 

$

51,563

 

0.46

%

 

$

14,612,792

 

$

33,106

 

0.30

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

AVERAGE BALANCES:

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

 

9/30/2022

 

9/30/2021

 

% change

Loans, including loans held for sale

$

14,925,298

 

 

$

14,327,476

 

 

4

%

 

$

13,286,382

 

 

12

%

 

$

14,378,774

 

$

13,308,526

 

8

%

Investments

 

2,474,420

 

 

 

2,558,509

 

 

(3

)%

 

 

3,568,209

 

 

(31

)%

 

 

2,667,145

 

 

3,165,195

 

(16

)%

Interest earning assets

 

17,399,718

 

 

 

16,885,985

 

 

3

%

 

 

16,854,591

 

 

3

%

 

 

17,045,919

 

 

16,473,721

 

3

%

Total assets

 

18,428,874

 

 

 

17,876,945

 

 

3

%

 

 

17,745,066

 

 

4

%

 

 

18,018,588

 

 

17,344,095

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

9,726,190

 

 

 

9,088,942

 

 

7

%

 

 

9,144,727

 

 

6

%

 

 

9,365,315

 

 

9,160,884

 

2

%

Interest bearing liabilities

 

10,493,971

 

 

 

9,985,328

 

 

5

%

 

 

9,661,560

 

 

9

%

 

 

10,107,610

 

 

9,683,035

 

4

%

Noninterest bearing demand deposits

 

5,719,155

 

 

 

5,715,830

 

 

%

 

 

5,848,983

 

 

(2

)%

 

 

5,702,754

 

 

5,451,908

 

5

%

Stockholders’ equity

 

2,032,362

 

 

 

2,016,577

 

 

1

%

 

 

2,092,018

 

 

(3

)%

 

 

2,046,351

 

 

2,068,676

 

(1

) %

Net interest earning assets

 

6,905,747

 

 

 

6,900,657

 

 

%

 

 

7,193,031

 

 

(4

)%

 

 

6,938,309

 

 

6,790,686

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

 

 

 

 

 

 

Commercial loans

$

5,124,421

 

 

$

4,395,738

 

 

17

%

 

$

3,857,879

 

 

33

%

 

 

 

 

 

 

Real estate loans

 

9,504,893

 

 

 

9,335,020

 

 

2

%

 

 

8,908,657

 

 

7

%

 

 

 

 

 

 

Consumer and other loans

 

861,873

 

 

 

815,291

 

 

6

%

 

 

652,155

 

 

32

%

 

 

 

 

 

 

Loans, net of deferred loan fees and costs

 

15,491,187

 

 

 

14,546,049

 

 

6

%

 

 

13,418,691

 

 

15

%

 

 

 

 

 

 

Allowance for credit losses

 

(160,561

)

 

 

(151,580

)

 

6

%

 

 

(136,774

)

 

17

%

 

 

 

 

 

 

Loans receivable, net

$

15,330,626

 

 

$

14,394,469

 

 

7

%

 

$

13,281,917

 

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

 

 

 

 

 

 

Retail buildings

$

2,632,564

 

 

$

2,603,516

 

 

1

%

 

$

2,466,881

 

 

7

%

 

 

 

 

 

 

Hotels/motels

 

1,091,047

 

 

 

1,143,982

 

 

(5

)%

 

 

1,385,003

 

 

(21

)%

 

 

 

 

 

 

Gas stations/car washes

 

1,056,217

 

 

 

1,080,777

 

 

(2

)%

 

 

999,069

 

 

6

%

 

 

 

 

 

 

Mixed-use facilities

 

825,289

 

 

 

833,342

 

 

(1

)%

 

 

819,516

 

 

1

%

 

 

 

 

 

 

Warehouses

 

1,271,104

 

 

 

1,279,647

 

 

(1

)%

 

 

1,160,863

 

 

9

%

 

 

 

 

 

 

Multifamily

 

1,199,320

 

 

 

989,840

 

 

21

%

 

 

691,262

 

 

73

%

 

 

 

 

 

 

Other

 

1,429,352

 

 

 

1,403,916

 

 

2

%

 

 

1,386,063

 

 

3

%

 

 

 

 

 

 

Total

$

9,504,893

 

 

$

9,335,020

 

 

2

%

 

$

8,908,657

 

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION

9/30/2022

 

6/30/2022

 

% change

 

9/30/2021

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,590,952

 

 

$

5,689,992

 

 

(2

)%

 

$

6,007,586

 

 

(7

)%

 

 

 

 

 

 

Money market and other

 

5,885,093

 

 

 

6,339,467

 

 

(7

)%

 

 

5,871,567

 

 

%

 

 

 

 

 

 

Saving deposits

 

317,841

 

 

 

326,927

 

 

(3

)%

 

 

314,603

 

 

1

%

 

 

 

 

 

 

Time deposits

 

3,708,323

 

 

 

2,673,244

 

 

39

%

 

 

2,868,771

 

 

29

%

 

 

 

 

 

 

Total deposits

$

15,502,209

 

 

$

15,029,630

 

 

3

%

 

$

15,062,527

 

 

3

%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS:

9/30/2022

 

6/30/2022

 

9/30/2021

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

1,975,725

 

 

$

2,000,369

 

 

$

2,074,398

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

10.32

%

 

 

10.69

%

 

 

11.01

%

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio

 

10.91

%

 

 

11.33

%

 

 

11.70

%

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

11.72

%

 

 

12.13

%

 

 

12.42

%

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

10.25

%

 

 

10.32

%

 

 

9.98

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

17,070,444

 

 

$

16,059,739

 

 

$

14,737,809

 

 

 

 

 

 

 

 

 

Book value per common share

$

16.54

 

 

$

16.74

 

 

$

17.26

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

8.09

%

 

 

8.68

%

 

 

9.24

%

 

 

 

 

 

 

 

 

Tangible common equity per share (1)

$

12.60

 

 

$

12.80

 

 

$

13.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

9/30/2022

 

9/30/2021

Balance at beginning of period

$

151,580

 

 

$

147,450

 

 

$

140,550

 

 

$

136,774

 

 

$

189,452

 

 

$

140,550

 

 

$

206,741

 

Provision (credit) for credit losses

 

9,200

 

 

 

3,200

 

 

 

(11,000

)

 

 

1,500

 

 

 

(10,000

)

 

 

1,400

 

 

 

(13,700

)

Recoveries

 

331

 

 

 

1,642

 

 

 

19,403

 

 

 

3,615

 

 

 

1,906

 

 

 

21,376

 

 

 

4,630

 

Charge offs

 

(550

)

 

 

(712

)

 

 

(1,503

)

 

 

(1,339

)

 

 

(44,584

)

 

 

(2,765

)

 

 

(60,897

)

Balance at end of period

$

160,561

 

 

$

151,580

 

 

$

147,450

 

 

$

140,550

 

 

$

136,774

 

 

$

160,561

 

 

$

136,774

 

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

 

0.01

%

 

 

(0.03

)%

 

 

(0.52

)%

 

 

(0.07

)%

 

 

1.28

%

 

 

(0.17

)%

 

 

0.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

9/30/2022

 

9/30/2021

Real estate loans

$

9

 

 

$

(508

)

 

$

(16,418

)

 

$

(2,352

)

 

$

40,542

 

 

$

(16,917

)

 

$

54,057

 

Commercial loans

 

115

 

 

 

(461

)

 

 

(1,529

)

 

 

144

 

 

 

1,117

 

 

 

(1,875

)

 

 

1,218

 

Consumer loans

 

95

 

 

 

39

 

 

 

47

 

 

 

(68

)

 

 

1,019

 

 

 

181

 

 

 

992

 

Total net charge offs (recoveries)

$

219

 

 

$

(930

)

 

$

(17,900

)

 

$

(2,276

)

 

$

42,678

 

 

$

(18,611

)

 

$

56,267

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

NONPERFORMING ASSETS:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

Loans on nonaccrual status (1)

$

64,571

 

 

$

69,522

 

 

$

52,717

 

 

$

54,616

 

 

$

54,380

 

Delinquent loans 90 days or more on accrual status

 

5,306

 

 

 

12,468

 

 

 

3,090

 

 

 

2,131

 

 

 

4,567

 

Accruing troubled debt restructured loans

 

25,631

 

 

 

26,572

 

 

 

44,555

 

 

 

52,418

 

 

 

39,509

 

Total nonperforming loans

 

95,508

 

 

 

108,562

 

 

 

100,362

 

 

 

109,165

 

 

 

98,456

 

Other real estate owned

 

1,480

 

 

 

2,010

 

 

 

2,010

 

 

 

2,597

 

 

 

15,213

 

Total nonperforming assets

$

96,988

 

 

$

110,572

 

 

$

102,372

 

 

$

111,762

 

 

$

113,669

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.51

%

 

 

0.61

%

 

 

0.58

%

 

 

0.62

%

 

 

0.64

%

Nonperforming assets/loans receivable & OREO

 

0.63

%

 

 

0.76

%

 

 

0.73

%

 

 

0.80

%

 

 

0.85

%

Nonperforming assets/total capital

 

4.91

%

 

 

5.53

%

 

 

5.02

%

 

 

5.34

%

 

 

5.48

%

Nonperforming loans/loans receivable

 

0.62

%

 

 

0.75

%

 

 

0.71

%

 

 

0.78

%

 

 

0.73

%

Nonaccrual loans/loans receivable

 

0.42

%

 

 

0.48

%

 

 

0.37

%

 

 

0.39

%

 

 

0.41

%

Allowance for credit losses/loans receivable

 

1.04

%

 

 

1.04

%

 

 

1.05

%

 

 

1.01

%

 

 

1.02

%

Allowance for credit losses/nonaccrual loans

 

248.66

%

 

 

218.03

%

 

 

279.70

%

 

 

257.34

%

 

 

251.52

%

Allowance for credit losses/nonperforming loans

 

168.11

%

 

 

139.63

%

 

 

146.92

%

 

 

128.75

%

 

 

138.92

%

Allowance for credit losses/nonperforming assets

 

165.55

%

 

 

137.09

%

 

 

144.03

%

 

 

125.76

%

 

 

120.33

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.9 million, $13.2 million, $17.0 million, $19.5 million, and $20.6 million, at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

Real estate loans

$

47,807

 

 

$

53,966

 

 

$

36,655

 

 

$

39,756

 

 

$

41,673

 

Commercial loans

 

7,675

 

 

 

8,206

 

 

 

8,686

 

 

 

11,025

 

 

 

10,991

 

Consumer loans

 

9,089

 

 

 

7,350

 

 

 

7,376

 

 

 

3,835

 

 

 

1,716

 

Total

$

64,571

 

 

$

69,522

 

 

$

52,717

 

 

$

54,616

 

 

$

54,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

Retail buildings

$

5,474

 

 

$

6,337

 

 

$

24,356

 

 

$

28,483

 

 

$

11,280

 

Hotels/motels

 

 

 

 

 

 

 

 

 

 

472

 

 

 

 

Gas stations/car washes

 

185

 

 

 

189

 

 

 

193

 

 

 

197

 

 

 

202

 

Mixed-use facilities

 

2,832

 

 

 

2,837

 

 

 

2,836

 

 

 

2,846

 

 

 

7,937

 

Warehouses

 

4,988

 

 

 

4,770

 

 

 

5,321

 

 

 

5,366

 

 

 

4,908

 

Other (2)

 

12,152

 

 

 

12,439

 

 

 

11,849

 

 

 

15,054

 

 

 

15,182

 

Total

$

25,631

 

 

$

26,572

 

 

$

44,555

 

 

$

52,418

 

 

$

39,509

 

 

 

 

 

 

 

 

 

 

 

(2) Includes commercial business, consumer, and other loans

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

30 - 59 days

$

13,092

 

$

10,090

 

$

12,439

 

$

29,723

 

$

15,016

60 - 89 days

 

4,933

 

 

6,354

 

 

3,090

 

 

10,345

 

 

4,746

Total

$

18,025

 

$

16,444

 

$

15,529

 

$

40,068

 

$

19,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

Real estate loans

$

9,694

 

$

7,919

 

$

6,097

 

$

20,232

 

$

10,359

Commercial loans

 

6,165

 

 

3,397

 

 

5,003

 

 

3,057

 

 

9,377

Consumer loans

 

2,166

 

 

5,128

 

 

4,429

 

 

16,779

 

 

26

Total

$

18,025

 

$

16,444

 

$

15,529

 

$

40,068

 

$

19,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

Special mention

$

79,399

 

$

95,797

 

$

166,958

 

$

257,194

 

$

306,766

Substandard

 

204,713

 

 

244,748

 

 

226,661

 

 

242,397

 

 

243,684

Total criticized loans

$

284,112

 

$

340,545

 

$

393,619

 

$

499,591

 

$

550,450

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

 

Reconciliation of GAAP financial measures to non-GAAP financial measures

 

 

 

 

 

 

 

 

 

 

Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below.

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

9/30/2022

 

9/30/2021

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

$

2,032,362

 

 

$

2,016,577

 

 

$

2,092,018

 

 

$

2,046,351

 

 

$

2,068,676

 

Less: Goodwill and core deposit intangible assets, net

 

(470,941

)

 

 

(471,421

)

 

 

(472,918

)

 

 

(471,424

)

 

 

(473,438

)

Average tangible common equity

$

1,561,421

 

 

$

1,545,156

 

 

$

1,619,100

 

 

$

1,574,927

 

 

$

1,595,238

 

 

 

 

 

 

 

 

 

 

 

Net income

$

53,748

 

 

$

52,088

 

 

$

55,499

 

 

$

166,574

 

 

$

152,949

 

Return on average tangible common equity (annualized)

 

13.77

%

 

 

13.48

%

 

 

13.71

%

 

 

14.10

%

 

 

12.78

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

 

 

 

TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

1,975,725

 

 

$

2,000,369

 

 

$

2,074,398

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(470,662

)

 

 

(471,148

)

 

 

(472,630

)

 

 

 

 

Tangible common equity

$

1,505,063

 

 

$

1,529,221

 

 

$

1,601,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

19,083,388

 

 

$

18,089,062

 

 

$

17,799,026

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(470,662

)

 

 

(471,148

)

 

 

(472,630

)

 

 

 

 

Tangible assets

$

18,612,726

 

 

$

17,617,914

 

 

$

17,326,396

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

119,479,253

 

 

 

119,473,939

 

 

 

120,198,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

8.09

%

 

 

8.68

%

 

 

9.24

%

 

 

 

 

Tangible common equity per share

$

12.60

 

 

$

12.80

 

 

$

13.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

9/30/2022

 

6/30/2022

 

9/30/2021

 

9/30/2022

 

9/30/2021

PRE-PROVISION NET REVENUE

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

$

153,186

 

 

$

141,538

 

 

$

130,296

 

 

$

427,900

 

 

$

379,452

 

Noninterest income

 

13,355

 

 

 

12,746

 

 

 

10,617

 

 

 

39,287

 

 

 

30,497

 

Revenue

 

166,541

 

 

 

154,284

 

 

 

140,913

 

 

 

467,187

 

 

 

409,949

 

Less noninterest expense

 

83,914

 

 

 

80,365

 

 

 

75,502

 

 

 

239,652

 

 

 

219,056

 

Pre-provision net revenue

$

82,627

 

 

$

73,919

 

 

$

65,411

 

 

$

227,535

 

 

$

190,893

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

18,428,874

 

 

$

17,876,945

 

 

$

17,745,066

 

 

$

18,018,588

 

 

$

17,344,095

 

ROA (PPNR)

 

1.79

%

 

 

1.65

%

 

 

1.47

%

 

 

1.68

%

 

 

1.47

%

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

 

2,032,362

 

 

 

2,016,577

 

 

 

2,092,018

 

 

 

2,046,351

 

 

 

2,068,676

 

ROE (PPNR)

 

16.26

%

 

 

14.66

%

 

 

12.51

%

 

 

14.83

%

 

 

12.30

%

 

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