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Hope Bancorp Reports 2024 Third Quarter Financial Results

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Hope Bancorp (NASDAQ: HOPE) reported Q3 2024 net income of $24.2 million, or $0.20 per diluted share, compared to $25.3 million in Q2 2024. Net interest income was $104.8 million, with interest income rising to $235.1 million. Customer deposits grew 11% annualized, while loans receivable increased 2% annualized. The company's total capital ratio strengthened to 14.8%, with tangible equity ratio at 10.1%. Nonperforming assets increased to $103.8 million, representing 0.60% of total assets. The allowance for credit losses was $153.3 million, with a coverage ratio of 1.13% of loans receivable.

Hope Bancorp (NASDAQ: HOPE) ha riportato un reddito netto per il terzo trimestre del 2024 di $24,2 milioni, ovvero $0,20 per azione diluita, rispetto ai $25,3 milioni del secondo trimestre del 2024. Il reddito netto da interessi è stato di $104,8 milioni, con il reddito da interessi che è aumentato a $235,1 milioni. I depositi dei clienti sono cresciuti dell'11% su base annualizzata, mentre i prestiti ricevibili sono aumentati del 2% su base annualizzata. Il rapporto di capitale totale dell'azienda è migliorato al 14,8%, con un rapporto di equità tangibile al 10,1%. Gli attivi non performanti sono aumentati a $103,8 milioni, rappresentando lo 0,60% del totale degli attivi. Il fondo per le perdite su crediti era di $153,3 milioni, con un rapporto di copertura dell'1,13% sui prestiti ricevibili.

Hope Bancorp (NASDAQ: HOPE) reportó un ingreso neto de $24,2 millones para el tercer trimestre de 2024, es decir, $0,20 por acción diluida, en comparación con $25,3 millones en el segundo trimestre de 2024. Los ingresos netos por intereses fueron de $104,8 millones, con los ingresos por intereses aumentando a $235,1 millones. Los depósitos de los clientes crecieron un 11% anualizado, mientras que los préstamos por cobrar aumentaron un 2% anualizado. El ratio de capital total de la empresa se fortaleció hasta 14,8%, con un ratio de patrimonio tangible del 10,1%. Los activos no productivos aumentaron a $103,8 millones, representando el 0,60% de los activos totales. La provisión para pérdidas crediticias fue de $153,3 millones, con un ratio de cobertura del 1,13% de los préstamos por cobrar.

Hope Bancorp (NASDAQ: HOPE)는 2024년 3분기 순이익으로 $24.2백만을 보고했으며, 희석 주당 $0.20에 해당하고, 2024년 2분기의 $25.3백만과 비교된다. 순이자 수익은 $104.8백만으로, 이자 수익은 $235.1백만으로 증가했다. 고객 예금은 연환산 기준으로 11% 증가하였고, 채권 수취는 2% 증가했다. 회사의 총 자본 비율은 14.8%로 강화되었으며, 유형 자본 비율은 10.1%에 달했다. 부실 자산은 $103.8백만으로 증가하여 총 자산의 0.60%를 차지했다. 대손충당금은 $153.3백만으로, 채권 수취의 1.13%에 해당하는 커버리지 비율을 보였다.

Hope Bancorp (NASDAQ: HOPE) a annoncé un bénéfice net de 24,2 millions de dollars pour le troisième trimestre 2024, soit 0,20 $ par action diluée, contre 25,3 millions de dollars au deuxième trimestre 2024. Le revenu net d'intérêts s'est chiffré à 104,8 millions de dollars, avec des revenus d'intérêts atteignant 235,1 millions de dollars. Les dépôts des clients ont augmenté de 11 % en base annualisée, tandis que les prêts à recevoir ont crû de 2 % en base annualisée. Le ratio de capital total de l'entreprise s'est renforcé à 14,8 %, avec un ratio de capitaux propres tangibles de 10,1 %. Les actifs non performants ont augmenté à 103,8 millions de dollars, représentant 0,60 % du total des actifs. La provision pour pertes sur crédits était de 153,3 millions de dollars, avec un ratio de couverture de 1,13 % des prêts à recevoir.

Hope Bancorp (NASDAQ: HOPE) meldete für das 3. Quartal 2024 einen Nettoertrag von $24,2 Millionen, was $0,20 pro verwässerter Aktie entspricht, im Vergleich zu $25,3 Millionen im 2. Quartal 2024. Das Nettozinseinkommen betrug $104,8 Millionen, wobei die Zinserträge auf $235,1 Millionen stiegen. Die Kundeneinlagen wuchsen annualisiert um 11%, während die Forderungen aus Darlehen um 2% annualisiert zunahmen. Das Gesamtkapitalverhältnis des Unternehmens stärkte sich auf 14,8%, mit einem Verhältnis des materiellen Eigenkapitals von 10,1%. Die notleidenden Vermögenswerte stiegen auf $103,8 Millionen, was 0,60% der Gesamtsumme der Vermögenswerte entspricht. Die Rückstellung für Kreditverluste betrug $153,3 Millionen, mit einem Deckungsgrad von 1,13% der Forderungen aus Darlehen.

Positive
  • Customer deposits grew 11% annualized
  • Loans receivable increased 2% annualized
  • Strong capital position with total capital ratio at 14.8%
  • Interest income increased to $235.1 million from $232.6 million in Q2
Negative
  • Net income declined to $24.2 million from $25.3 million in Q2 2024
  • Net interest margin decreased 7 basis points to 2.55%
  • Nonperforming assets increased to $103.8 million from $67.3 million in Q2
  • Net charge-offs increased to $5.7 million from $4.4 million in Q2

Insights

HOPE Bancorp's Q3 2024 results reveal mixed performance with some concerning trends. Net income decreased to $24.2 million ($0.20 per share) from $25.3 million in Q2. The net interest margin contracted by 7 basis points to 2.55%, primarily due to higher deposit costs.

Notable positives include strong customer deposit growth of 11% annualized and improved capital ratios, with total capital ratio at 14.8%. However, loan growth was modest at 2% annualized and nonperforming assets increased significantly to $103.8 million (0.60% of total assets) from $67.3 million in Q2.

The pending merger with Territorial Bancorp could provide strategic benefits, but current performance metrics suggest near-term challenges in profitability and asset quality.

The deterioration in asset quality metrics warrants attention. The sharp increase in nonperforming assets to 0.60% of total assets from 0.39% in Q2 is concerning, even though management indicates minimal loss expectations on the new nonaccrual relationship.

The net charge-off rate increased to 0.17% annualized, while the allowance for credit losses coverage slightly decreased to 1.13%. The bank maintains strong capital levels, but the rising credit costs and pressure on margins could impact future earnings capacity.

The reduction in brokered deposits and high liquidity position provide some cushion, but continued vigilance on credit quality trends is essential.

LOS ANGELES--(BUSINESS WIRE)-- Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its third quarter and nine months ended September 30, 2024. For the three months ended September 30, 2024, net income totaled $24.2 million, or $0.20 per diluted common share. This compares with net income of $25.3 million, or $0.21 per diluted common share, in the second quarter of 2024. Excluding notable items(1), net income for the 2024 third quarter was $25.2 million, or $0.21 per diluted common share.

“We are pleased to see a higher level of productivity from our banking teams, along with the continued success of our core deposit gathering initiatives. Quarter-over-quarter, customer deposit growth was a robust 11% annualized, supporting loan growth and offsetting a planned reduction in brokered deposits,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “In the 2024 third quarter, loans receivable grew 2% on an annualized basis, marking a turn-around in our loan growth trend. Additionally, more than two-thirds of the net growth in noninterest bearing demand deposits this quarter came from small business accounts.

“Regulatory risk-based capital ratios for Hope Bancorp are the highest since our merger with Wilshire Bancorp in 2016. As of September 30, 2024, our total capital ratio was a strong 14.8%, and our tangible equity ratio was a robust 10.1%,” continued Kim.

“The success of our balance sheet management has resulted in high levels of capital, ample liquidity, and a lower loan-to-deposit ratio, positioning us well to increase our market share, add new client relationships, and generate profitable growth as economic conditions and loan demand improve in the coming year,” said Kim.

“We are excited about our pending merger with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank. We believe this compelling combination will strengthen the Territorial franchise for the long term, providing many advantages for customers and employees as part of a larger organization with greater resources, enhanced technology platforms, and an expanded array of banking products and services.”

_____________________________________

(1)

 

Net income, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Operating Results for the 2024 Third Quarter

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2024 third quarter totaled $104.8 million. This compares with net interest income before provision for credit losses of $105.9 million in the immediately preceding second quarter. Interest income was $235.1 million in the third quarter of 2024, up from $232.6 million in the second quarter of 2024. Growth in interest income was offset by increased interest expense, which was $130.3 million in the third quarter, compared with $126.7 million in the second quarter. The quarter-over-quarter increase in interest expense reflects the change in average total deposit costs, which increased five basis points to 3.44% for the 2024 third quarter, up from 3.39% in the immediately preceding second quarter. End-of-period total deposit costs decreased nine basis points to 3.34% as of September 30, 2024, from 3.43% as of June 30, 2024, indicating an inflection point in deposit costs by deposit type.

Net interest margin for the 2024 third quarter was 2.55%, down seven basis points from 2.62% in the 2024 second quarter. The quarter-over-quarter change in net interest margin reflects a higher balance and cost of average interest bearing deposits, as well as the change in average loan yields, partially offset by a higher balance and yield earned on average interest earning cash and deposits at other banks, and a lower balance and lower rate paid on average borrowings.

Noninterest income. Noninterest income for the 2024 third quarter increased to $11.8 million, up 7% from $11.1 million in the immediately preceding second quarter. The Company recorded net gains on the sale of SBA loans of $2.7 million in the 2024 third quarter, compared with $2.0 million in the immediately preceding second quarter. In the third quarter of 2024, the Company sold $41.4 million of SBA loans, compared with $29.8 million in the second quarter of 2024. Other noninterest income in the 2024 third quarter included a $403,000 gain from bank owned life insurance, as well as a $326,000 net loss on sales of securities available for sale, as the Company repositioned a portion of its lower-yielding investment securities.

Noninterest expense. Noninterest expense for the 2024 third quarter was $81.3 million, compared with $81.0 million in the immediately preceding second quarter, and down 6% year-over-year from $86.8 million in the 2023 third quarter. Excluding notable items(2), which were primarily merger-related costs, noninterest expense for the 2024 third quarter was $79.8 million, compared with $79.1 million for the 2024 second quarter, and down 8% year-over-year from $86.3 million for the 2023 third quarter. Salaries and employee benefits expense for the 2024 third quarter was $44.2 million, up by $53,000 and essentially stable compared with $44.1 million in the 2024 second quarter. Year-over-year, salaries and employee benefits expense decreased 13% from $51.0 million in the 2023 third quarter, reflecting the benefits of a restructuring executed in the fourth quarter of 2023.

Tax rate. The year-to-date effective tax rate for the nine months ended September 30, 2024, was 26.6%, compared with the year-to-date effective tax rate of 25.7% for the same period of 2023. For the full year 2024, the Company expects the effective tax rate to be approximately 26%.

_____________________________________

(2)

 

Notable items included $1.2 million of merger-related expenses and $197,000 of restructuring-related costs for the 2024 third quarter, $1.6 million of merger-related expenses, $576,000 of restructuring-related costs, and a $309,000 reversal of an accrual related to the FDIC special assessment for the 2024 second quarter, and $500,000 of restructuring related costs for the 2023 third quarter, all on a pre-tax basis. Noninterest expense, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Balance Sheet Summary

Cash and investment securities. At September 30, 2024, cash and cash equivalents totaled $680.9 million, compared with $654.0 million at June 30, 2024, and $2.50 billion at September 30, 2023. The year-over-year change in cash and cash equivalents primarily reflected the payoff of the Company’s Bank Term Funding Program (“BTFP”) borrowings in March and April of 2024. Investment securities totaled $2.18 billion at September 30, 2024, $2.17 billion at June 30, 2024, and $2.26 billion at September 30, 2023.

Loans. Gross loans of $13.64 billion at September 30, 2024, were up $8.4 million from $13.64 billion at June 30, 2024. Loans receivable, which excludes loans held for sale, grew $51.0 million quarter-over-quarter, or up 2% annualized. Quarter-over-quarter, commercial and industrial loans and residential mortgage loans increased, partially offset by a decrease in commercial real estate loans. The Company sold $41.4 million of SBA loans in the third quarter of 2024.

The following table sets forth the loan portfolio composition at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial real estate (“CRE”) loans

$

8,630,757

 

63.3

%

 

$

8,679,515

 

63.6

%

 

$

8,972,886

 

62.6

%

Commercial and industrial (“C&I”) loans

 

3,901,368

 

28.6

%

 

 

3,854,284

 

28.3

%

 

 

4,450,341

 

31.1

%

Residential mortgage and other loans

 

1,085,863

 

7.9

%

 

 

1,033,203

 

7.6

%

 

 

882,966

 

6.2

%

Loans receivable

 

13,617,988

 

99.8

%

 

 

13,567,002

 

99.5

%

 

 

14,306,193

 

99.9

%

Loans held for sale

 

25,714

 

0.2

%

 

 

68,316

 

0.5

%

 

 

19,502

 

0.1

%

Gross loans

$

13,643,702

 

100.0

%

 

$

13,635,318

 

100.0

%

 

$

14,325,695

 

100.0

%

Deposits. Total deposits amounted to $14.73 billion at September 30, 2024, up $18.0 million from $14.71 billion at June 30, 2024. During the 2024 third quarter, robust growth in customer deposits of 11% annualized more than offset a planned reduction of brokered deposits. Noninterest bearing demand deposits grew $51.8 million quarter-over-quarter to $3.72 billion at September 30, 2024, and money market and interest bearing demand deposits increased $105.4 million quarter-over-quarter to $5.01 billion. During the third quarter of 2024, the Company reduced brokered deposits by $351.5 million from June 30, 2024.

The following table sets forth the deposit composition at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

3,722,985

 

25.3

%

 

$

3,671,192

 

24.9

%

 

$

4,249,788

 

27.0

%

Money market, interest bearing demand, and savings deposits

 

5,013,305

 

34.0

%

 

 

4,907,860

 

33.4

%

 

 

4,855,683

 

30.9

%

Time deposits

 

5,993,208

 

40.7

%

 

 

6,132,419

 

41.7

%

 

 

6,634,388

 

42.1

%

Total deposits

$

14,729,498

 

100.0

%

 

$

14,711,471

 

100.0

%

 

$

15,739,859

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross loan-to-deposit ratio

 

 

92.6

%

 

 

 

92.7

%

 

 

 

91.0

%

On October 1, 2024, the Bank completed a branch purchase and assumption agreement whereby PromiseOne Bank acquired the deposits and other assets associated with Bank of Hope’s Annandale and Centreville branches in Virginia. As of transaction close, deposits at these two branches totaled approximately $129.4 million.

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings decreased to $100.0 million at September 30, 2024, down from $170.0 million at June 30, 2024, and $1.80 billion at September 30, 2023. The year-over-year change primarily reflected the payoff of the Company’s BTFP borrowings in March and April 2024.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets were $103.8 million, or 0.60% of total assets, at September 30, 2024, compared with $67.3 million, or 0.39% of total assets, at June 30, 2024, and $61.7 million, or 0.31% of total assets, at September 30, 2023. The increase was due to the migration of one relationship that was placed on nonaccrual status as of September 30, 2024, following loan maturities. This relationship consists of three commercial real estate loans that are well-secured by properties in primary locations with minimal to no loss expected.

The following table sets forth the components of nonperforming assets at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

Loans on nonaccrual status (1)

$

103,602

 

$

67,003

 

$

39,081

Accruing delinquent loans past due 90 days or more

 

226

 

 

273

 

 

21,579

Total nonperforming loans

 

103,828

 

 

67,276

 

 

60,660

Other real estate owned

 

 

 

 

 

1,043

Total nonperforming assets

$

103,828

 

$

67,276

 

$

61,703

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.60 %

 

 

0.39 %

 

 

0.31 %

_____________________________________

(1)

 

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.1 million, $11.2 million and $12.1 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $5.7 million in the 2024 third quarter, equivalent to 0.17%, annualized, of average loans. This compares with net charge offs of $4.4 million, or 0.13%, annualized, of average loans in the immediately preceding second quarter. Net charge off levels continue to be moderate.

The following table sets forth net charge offs and annualized net charge off ratios for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

Net charge offs

$

5,749

 

 

$

4,439

 

 

$

30,987

 

Annualized net charge offs/average loans

 

0.17

%

 

 

0.13

%

 

 

0.85

%

For the 2024 third quarter, the Company recorded a provision for credit losses of $3.3 million. This compares with a provision for credit losses of $1.4 million in the immediately preceding second quarter.

Allowance for credit losses. The allowance for credit losses totaled $153.3 million at September 30, 2024, compared with $156.0 million at June 30, 2024. The allowance coverage ratio was 1.13% of loans receivable at September 30, 2024, compared with 1.15% at June 30, 2024. The change in allowance coverage reflects the positive impact from improved macroeconomic variables, notably the CRE price index, in the Current Expected Credit Loss (“CECL”) model, partially offset by increased qualitative and individually evaluated loan reserves.

The following table sets forth the allowance for credit losses and the coverage ratios at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

Allowance for credit losses

$

153,270

 

 

$

156,019

 

 

$

158,809

 

Allowance for credit losses/loans receivable

 

1.13

%

 

 

1.15

%

 

 

1.11

%

Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At September 30, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at September 30, 2024, June 30, 2024, and September 30, 2023:

(unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

 

Minimum Guideline
for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

13.06%

 

12.70%

 

11.67%

 

6.50%

Tier 1 Capital Ratio

13.78%

 

13.40%

 

12.32%

 

8.00%

Total Capital Ratio

14.80%

 

14.41%

 

13.23%

 

10.00%

Leverage Ratio

11.61%

 

11.61%

 

9.83%

 

5.00%

At September 30, 2024, total stockholders’ equity was $2.17 billion, or $17.97 per common share, compared with $2.11 billion, or $17.49 per common share, at June 30, 2024. Tangible common equity (“TCE”) per share(4) was $14.10 at September 30, 2024, compared with $13.61 at June 30, 2024, and the TCE ratio(3) was 10.08% at September 30, 2024, up 36 basis points from 9.72% at June 30, 2024.

The following table sets forth the TCE per share and the TCE ratio at September 30, 2024, June 30, 2024, and September 30, 2023:

(unaudited)

9/30/2024

 

6/30/2024

 

9/30/2023

TCE per share

$14.10

 

$13.61

 

$13.01

TCE ratio

10.08%

 

9.72%

 

7.96%

_____________________________________

(3)

 

TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, October 28, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its third quarter ended September 30, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through November 4, 2024, replay access code 10193704.

Non-GAAP Financial Metrics

This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.35 billion in total assets as of September 30, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 46 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Additional Information About the Merger and Where to Find It

In connection with the pending merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4, which included a Proxy Statement/Prospectus and which was declared effective by the SEC on August 20, 2024, and further supplemented by Hope Bancorp on September 12, 2024. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the pending merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.

Participants in Solicitation

Hope Bancorp, Inc., Territorial Bancorp and certain of their directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Hope Bancorp’s directors and executive officers is set forth in the Proxy Statement, dated April 12, 2024 (as amended and supplemented), for its 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Territorial Bancorp’s participants is set forth in the Proxy Statement, dated April 16, 2024, for Territorial Bancorp’s 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of those participants in the solicitation of proxies in respect of the merger may be obtained by reading the Registration Statement and Proxy Statement/Prospectus filed with the SEC.

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, ease of integration and diversification of franchise in connection with the pending merger with Territorial Bancorp. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the pending transaction is subject to regulatory approvals, the approval of Territorial Bancorp shareholders, and other customary closing conditions. There is no assurance that such conditions will be met or that the pending merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in Hope Bancorp’s areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the pending transaction could have adverse effects on the market price of the common stock of Hope Bancorp; and diversion of management’s attention from ongoing business operations and opportunities. For additional information concerning these and other risk factors, see Hope Bancorp’s most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share data)

 

Assets:

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

Cash and due from banks

$

680,857

 

 

$

654,044

 

 

4.1

%

 

$

2,500,323

 

 

(72.8

)%

Investment securities

 

2,177,301

 

 

 

2,172,859

 

 

0.2

%

 

 

2,260,837

 

 

(3.7

)%

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

 

57,158

 

 

 

61,528

 

 

(7.1

)%

 

 

60,433

 

 

(5.4

)%

Gross loans, including loans held for sale

 

13,643,702

 

 

 

13,635,318

 

 

0.1

%

 

 

14,325,695

 

 

(4.8

)%

Allowance for credit losses

 

(153,270

)

 

 

(156,019

)

 

(1.8

)%

 

 

(158,809

)

 

(3.5

)%

Accrued interest receivable

 

51,898

 

 

 

57,645

 

 

(10.0

)%

 

 

60,665

 

 

(14.5

)%

Premises and equipment, net

 

51,543

 

 

 

50,919

 

 

1.2

%

 

 

51,764

 

 

(0.4

)%

Goodwill and intangible assets

 

467,182

 

 

 

467,583

 

 

(0.1

)%

 

 

468,832

 

 

(0.4

)%

Other assets

 

377,818

 

 

 

431,214

 

 

(12.4

)%

 

 

506,624

 

 

(25.4

)%

Total assets

$

17,354,189

 

 

$

17,375,091

 

 

(0.1

)%

 

$

20,076,364

 

 

(13.6

)%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

14,729,498

 

 

$

14,711,471

 

 

0.1

%

 

$

15,739,859

 

 

(6.4

)%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

100,000

 

 

 

170,000

 

 

(41.2

)%

 

 

1,795,726

 

 

(94.4

)%

Subordinated debentures and convertible notes, net

 

109,249

 

 

 

108,918

 

 

0.3

%

 

 

107,949

 

 

1.2

%

Accrued interest payable

 

107,017

 

 

 

86,779

 

 

23.3

%

 

 

166,831

 

 

(35.9

)%

Other liabilities

 

138,640

 

 

 

186,641

 

 

(25.7

)%

 

 

235,575

 

 

(41.1

)%

Total liabilities

$

15,184,404

 

 

$

15,263,809

 

 

(0.5

)%

 

$

18,045,940

 

 

(15.9

)%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

138

 

 

$

138

 

 

%

 

$

137

 

 

0.7

%

Additional paid-in capital

 

1,442,993

 

 

 

1,440,963

 

 

0.1

%

 

 

1,436,769

 

 

0.4

%

Retained earnings

 

1,174,100

 

 

 

1,167,978

 

 

0.5

%

 

 

1,140,870

 

 

2.9

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(182,779

)

 

 

(233,130

)

 

21.6

%

 

 

(282,685

)

 

35.3

%

Total stockholders’ equity

 

2,169,785

 

 

 

2,111,282

 

 

2.8

%

 

 

2,030,424

 

 

6.9

%

Total liabilities and stockholders’ equity

$

17,354,189

 

 

$

17,375,091

 

 

(0.1

)%

 

$

20,076,364

 

 

(13.6

)%

 

 

 

 

 

 

 

 

 

 

Common stock shares – authorized

 

300,000,000

 

 

 

300,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares – outstanding

 

120,737,908

 

 

 

120,731,342

 

 

 

 

 

120,026,220

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

17,382,835

 

 

 

 

 

17,382,835

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

Three Months Ended

 

Nine Months Ended

 

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

 

9/30/2024

 

9/30/2023

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

210,022

 

 

$

209,683

 

 

%

 

$

229,937

 

(9

)%

 

$

633,331

 

$

671,543

 

(6

)%

Interest on investment securities

 

16,741

 

 

 

16,829

 

 

(1

)%

 

 

17,006

 

(2

)%

 

 

51,619

 

 

47,665

 

8

%

Interest on cash and deposits at other banks

 

7,507

 

 

 

5,284

 

 

42

%

 

 

28,115

 

(73

)%

 

 

39,974

 

 

58,332

 

(31

)%

Interest on other investments and FHLB dividends

 

814

 

 

 

805

 

 

1

%

 

 

735

 

11

%

 

 

2,435

 

 

2,114

 

15

%

Total interest income

 

235,084

 

 

 

232,601

 

 

1

%

 

 

275,793

 

(15

)%

 

 

727,359

 

 

779,654

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

127,193

 

 

 

122,577

 

 

4

%

 

 

117,854

 

8

%

 

 

373,803

 

 

319,926

 

17

%

Interest on borrowings

 

3,082

 

 

 

4,164

 

 

(26

)%

 

 

22,561

 

(86

)%

 

 

27,840

 

 

59,783

 

(53

)%

Total interest expense

 

130,275

 

 

 

126,741

 

 

3

%

 

 

140,415

 

(7

)%

 

 

401,643

 

 

379,709

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision

 

104,809

 

 

 

105,860

 

 

(1

)%

 

 

135,378

 

(23

)%

 

 

325,716

 

 

399,945

 

(19

)%

Provision for credit losses

 

3,280

 

 

 

1,400

 

 

134

%

 

 

16,862

 

(81

)%

 

 

7,280

 

 

29,192

 

(75

)%

Net interest income after provision

 

101,529

 

 

 

104,460

 

 

(3

)%

 

 

118,516

 

(14

)%

 

 

318,436

 

 

370,753

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,651

 

 

 

2,681

 

 

(1

)%

 

 

2,415

 

10

%

 

 

7,919

 

 

6,961

 

14

%

Net gains on sales of SBA loans

 

2,722

 

 

 

1,980

 

 

37

%

 

 

 

100

%

 

 

4,702

 

 

4,097

 

15

%

Net (losses) gains on sales of securities available for sale

 

(326

)

 

 

425

 

 

N/A

 

 

 

 

100

%

 

 

99

 

 

 

100

%

Other income and fees

 

6,792

 

 

 

5,985

 

 

13

%

 

 

5,890

 

15

%

 

 

18,476

 

 

25,239

 

(27

)%

Total noninterest income

 

11,839

 

 

 

11,071

 

 

7

%

 

 

8,305

 

43

%

 

 

31,196

 

 

36,297

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

44,160

 

 

 

44,107

 

 

%

 

 

51,033

 

(13

)%

 

 

135,844

 

 

160,507

 

(15

)%

Occupancy

 

6,940

 

 

 

6,906

 

 

%

 

 

7,149

 

(3

)%

 

 

20,632

 

 

21,637

 

(5

)%

Furniture and equipment

 

5,341

 

 

 

5,475

 

 

(2

)%

 

 

5,625

 

(5

)%

 

 

16,156

 

 

16,076

 

%

Data processing and communications

 

3,112

 

 

 

2,997

 

 

4

%

 

 

2,891

 

8

%

 

 

9,099

 

 

8,630

 

5

%

FDIC assessment

 

2,200

 

 

 

3,003

 

 

(27

)%

 

 

3,683

 

(40

)%

 

 

8,129

 

 

10,155

 

(20

)%

FDIC special assessment

 

 

 

 

(309

)

 

(100

)%

 

 

 

%

 

 

691

 

 

 

100

%

Earned interest credit

 

6,869

 

 

 

6,139

 

 

12

%

 

 

6,377

 

8

%

 

 

18,842

 

 

15,894

 

19

%

Restructuring-related costs

 

197

 

 

 

576

 

 

(66

)%

 

 

500

 

(61

)%

 

 

1,175

 

 

500

 

135

%

Merger-related costs

 

1,236

 

 

 

1,589

 

 

(22

)%

 

 

 

100

%

 

 

3,869

 

 

 

100

%

Other noninterest expense

 

11,213

 

 

 

10,504

 

 

7

%

 

 

9,553

 

17

%

 

 

32,657

 

 

29,369

 

11

%

Total noninterest expense

 

81,268

 

 

 

80,987

 

 

%

 

 

86,811

 

(6

)%

 

 

247,094

 

 

262,768

 

(6

)%

Income before income taxes

 

32,100

 

 

 

34,544

 

 

(7

)%

 

 

40,010

 

(20

)%

 

 

102,538

 

 

144,282

 

(29

)%

Income tax provision

 

7,941

 

 

 

9,274

 

 

(14

)%

 

 

9,961

 

(20

)%

 

 

27,245

 

 

37,090

 

(27

)%

Net income

$

24,159

 

 

$

25,270

 

 

(4

)%

 

$

30,049

 

(20

)%

 

$

75,293

 

$

107,192

 

(30

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share – diluted

$

0.20

 

 

$

0.21

 

 

 

 

$

0.25

 

 

 

$

0.62

 

$

0.89

 

 

Weighted average shares outstanding – diluted

 

121,159,977

 

 

 

120,939,429

 

 

 

 

 

120,374,618

 

 

 

 

121,027,793

 

 

120,249,952

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

 

For the Three Months Ended

 

For the Nine Months Ended

Profitability measures (annualized):

9/30/2024

 

6/30/2024

 

9/30/2023

 

9/30/2024

 

9/30/2023

Return on average assets (“ROA”)

0.56

%

 

0.59

%

 

0.60

%

 

0.56

%

 

0.72

%

ROA excluding notable items (1)

0.58

%

 

0.62

%

 

0.61

%

 

0.59

%

 

0.72

%

Return on average equity (“ROE”)

4.52

%

 

4.82

%

 

5.78

%

 

4.73

%

 

6.92

%

ROE excluding notable items (1)

4.71

%

 

5.07

%

 

5.85

%

 

4.99

%

 

6.94

%

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

5.78

%

 

6.20

%

 

7.47

%

 

6.07

%

 

8.95

%

ROTCE excluding notable items (1)

6.02

%

 

6.53

%

 

7.55

%

 

6.40

%

 

8.98

%

Net interest margin

2.55

%

 

2.62

%

 

2.83

%

 

2.57

%

 

2.84

%

Efficiency ratio (not annualized)

69.67

%

 

69.26

%

 

60.42

%

 

69.23

%

 

60.23

%

Efficiency ratio excluding notable items (not annualized) (1)

68.44

%

 

67.67

%

 

60.07

%

 

67.62

%

 

60.12

%

(1)

 

ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

9/30/2024

 

6/30/2024

 

9/30/2023

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

13,574,539

 

$

210,022

 

6.16

%

 

$

13,591,936

 

$

209,683

 

6.20

%

 

$

14,550,106

 

$

229,937

 

6.27

%

Investment securities

 

2,182,847

 

 

16,741

 

3.05

%

 

 

2,175,379

 

 

16,829

 

3.11

%

 

 

2,275,133

 

 

17,006

 

2.97

%

Interest earning cash and deposits at other banks

 

570,754

 

 

7,507

 

5.23

%

 

 

428,062

 

 

5,284

 

4.96

%

 

 

2,106,469

 

 

28,115

 

5.30

%

FHLB stock and other investments

 

48,956

 

 

814

 

6.61

%

 

 

48,463

 

 

805

 

6.68

%

 

 

47,316

 

 

735

 

6.16

%

Total interest earning assets

$

16,377,096

 

$

235,084

 

5.71

%

 

$

16,243,840

 

$

232,601

 

5.76

%

 

$

18,979,024

 

$

275,793

 

5.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and savings

$

4,963,727

 

$

50,707

 

4.06

%

 

$

4,948,708

 

$

48,708

 

3.96

%

 

$

4,533,430

 

$

38,814

 

3.40

%

Time deposits

 

6,053,924

 

 

76,486

 

5.03

%

 

 

5,921,201

 

 

73,869

 

5.02

%

 

 

6,862,038

 

 

79,040

 

4.57

%

Total interest bearing deposits

 

11,017,651

 

 

127,193

 

4.59

%

 

 

10,869,909

 

 

122,577

 

4.54

%

 

 

11,395,468

 

 

117,854

 

4.10

%

FHLB and FRB borrowings

 

120,326

 

 

329

 

1.09

%

 

 

219,402

 

 

1,430

 

2.62

%

 

 

1,809,322

 

 

19,821

 

4.35

%

Subordinated debentures and convertible notes

 

105,152

 

 

2,753

 

10.24

%

 

 

104,822

 

 

2,734

 

10.32

%

 

 

103,873

 

 

2,740

 

10.32

%

Total interest bearing liabilities

$

11,243,129

 

$

130,275

 

4.61

%

 

$

11,194,133

 

$

126,741

 

4.55

%

 

$

13,308,663

 

$

140,415

 

4.19

%

Noninterest bearing demand deposits

 

3,704,088

 

 

 

 

 

 

3,666,416

 

 

 

 

 

 

4,312,117

 

 

 

 

Total funding liabilities/cost of funds

$

14,947,217

 

 

 

3.47

%

 

$

14,860,549

 

 

 

3.43

%

 

$

17,620,780

 

 

 

3.16

%

Net interest income/net interest spread

 

 

$

104,809

 

1.10

%

 

 

 

$

105,860

 

1.21

%

 

 

 

$

135,378

 

1.58

%

Net interest margin

 

 

 

 

2.55

%

 

 

 

 

 

2.62

%

 

 

 

 

 

2.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,704,088

 

$

 

%

 

$

3,666,416

 

$

 

%

 

$

4,312,117

 

$

 

%

Interest bearing deposits

 

11,017,651

 

 

127,193

 

4.59

%

 

 

10,869,909

 

 

122,577

 

4.54

%

 

 

11,395,468

 

 

117,854

 

4.10

%

Total deposits

$

14,721,739

 

$

127,193

 

3.44

%

$

14,536,325

$

122,577

3.39

%

 

$

15,707,585

 

$

117,854

 

2.98

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Nine Months Ended

 

9/30/2024

 

9/30/2023

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

13,637,335

 

$

633,331

 

6.20

%

 

$

14,961,058

 

$

671,543

 

6.00

%

Investment securities

 

2,224,972

 

 

51,619

 

3.10

%

 

 

2,255,839

 

 

47,665

 

2.83

%

Interest earning cash and deposits at other banks

 

1,004,606

 

 

39,974

 

5.32

%

 

 

1,531,561

 

 

58,332

 

5.09

%

FHLB stock and other investments

 

48,520

 

 

2,435

 

6.70

%

 

 

47,135

 

 

2,114

 

6.00

%

Total interest earning assets

$

16,915,433

 

$

727,359

 

5.74

%

 

$

18,795,593

 

$

779,654

 

5.55

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and savings

$

4,994,958

 

$

149,560

 

4.00

%

 

$

4,871,624

 

$

116,090

 

3.19

%

Time deposits

 

5,987,121

 

 

224,243

 

5.00

%

 

 

6,436,645

 

 

203,836

 

4.23

%

Total interest bearing deposits

 

10,982,079

 

 

373,803

 

4.55

%

 

 

11,308,269

 

 

319,926

 

3.78

%

FHLB and FRB borrowings

 

672,332

 

 

19,612

 

3.90

%

 

 

1,558,493

 

 

50,141

 

4.30

%

Subordinated debentures and convertible notes

 

104,824

 

 

8,228

 

10.31

%

 

 

207,050

 

 

9,642

 

6.14

%

Total interest bearing liabilities

$

11,759,235

 

$

401,643

 

4.56

%

 

$

13,073,812

 

$

379,709

 

3.88

%

Noninterest bearing demand deposits

 

3,724,716

 

 

 

 

 

 

4,445,740

 

 

 

 

Total funding liabilities/cost of funds

$

15,483,951

 

 

 

3.46

%

 

$

17,519,552

 

 

 

2.90

%

Net interest income/net interest spread

 

 

$

325,716

 

1.18

%

 

 

 

$

399,945

 

1.67

%

Net interest margin

 

 

 

 

2.57

%

 

 

 

 

 

2.84

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,724,716

 

$

 

%

 

$

4,445,740

 

$

 

%

Interest bearing deposits

 

10,982,079

 

 

373,803

 

4.55

%

 

 

11,308,269

 

 

319,926

 

3.78

%

Total deposits

$

14,706,795

 

$

373,803

 

3.40

%

 

$

15,754,009

 

$

319,926

 

2.72

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

AVERAGE BALANCES:

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

 

9/30/2024

 

9/30/2023

 

% change

Gross loans, including loans held for sale

$

13,574,539

 

$

13,591,936

 

%

 

$

14,550,106

 

(7

)%

 

$

13,637,335

 

$

14,961,058

 

(9

)%

Investment securities

 

2,182,847

 

 

2,175,379

 

%

 

 

2,275,133

 

(4

)%

 

 

2,224,972

 

 

2,255,839

 

(1

)%

Interest earning cash and deposits at other banks

 

570,754

 

 

428,062

 

33

%

 

 

2,106,469

 

(73

)%

 

 

1,004,606

 

 

1,531,561

 

(34

)%

Interest earning assets

 

16,377,096

 

 

16,243,840

 

1

%

 

 

18,979,024

 

(14

)%

 

 

16,915,433

 

 

18,795,593

 

(10

)%

Goodwill and intangible assets

 

467,419

 

 

467,822

 

%

 

 

469,079

 

%

 

 

467,822

 

 

469,525

 

%

Total assets

 

17,369,169

 

 

17,256,638

 

1

%

 

 

20,059,304

 

(13

)%

 

 

17,920,176

 

 

19,875,322

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

3,704,088

 

 

3,666,416

 

1

%

 

 

4,312,117

 

(14

)%

 

 

3,724,716

 

 

4,445,740

 

(16

)%

Interest bearing deposits

 

11,017,651

 

 

10,869,909

 

1

%

 

 

11,395,468

 

(3

)%

 

 

10,982,079

 

 

11,308,269

 

(3

)%

Total deposits

 

14,721,739

 

 

14,536,325

 

1

%

 

 

15,707,585

 

(6

)%

 

 

14,706,795

 

 

15,754,009

 

(7

)%

Interest bearing liabilities

 

11,243,129

 

 

11,194,133

 

%

 

 

13,308,663

 

(16

)%

 

 

11,759,235

 

 

13,073,812

 

(10

)%

Stockholders’ equity

 

2,139,861

 

 

2,097,108

 

2

%

 

 

2,079,092

 

3

%

 

 

2,121,169

 

 

2,066,157

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

 

 

 

 

 

 

Commercial real estate (“CRE”) loans

$

8,630,757

 

$

8,679,515

 

(1

)%

 

$

8,972,886

 

(4

)%

 

 

 

 

 

 

Commercial and industrial (“C&I”) loans

 

3,901,368

 

 

3,854,284

 

1

%

 

 

4,450,341

 

(12

)%

 

 

 

 

 

 

Residential mortgage and other loans

 

1,085,863

 

 

1,033,203

 

5

%

 

 

882,966

 

23

%

 

 

 

 

 

 

Loans receivable

 

13,617,988

 

 

13,567,002

 

%

 

 

14,306,193

 

(5

)%

 

 

 

 

 

 

Loans held for sale

 

25,714

 

 

68,316

 

(62

)%

 

 

19,502

 

32

%

 

 

 

 

 

 

Gross loans

 

13,643,702

 

 

13,635,318

 

%

 

 

14,325,695

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

 

 

 

 

 

 

Multi-tenant retail

$

1,640,769

 

$

1,659,083

 

(1

)%

 

$

1,745,430

 

(6

)%

 

 

 

 

 

 

Industrial warehouses

 

1,244,891

 

 

1,249,255

 

%

 

 

1,254,643

 

(1

)%

 

 

 

 

 

 

Multifamily

 

1,204,734

 

 

1,199,215

 

%

 

 

1,234,934

 

(2

)%

 

 

 

 

 

 

Gas stations and car washes

 

1,021,537

 

 

1,007,680

 

1

%

 

 

1,037,621

 

(2

)%

 

 

 

 

 

 

Mixed-use facilities

 

826,045

 

 

844,993

 

(2

)%

 

 

813,571

 

2

%

 

 

 

 

 

 

Hotels/motels

 

800,707

 

 

795,253

 

1

%

 

 

826,732

 

(3

)%

 

 

 

 

 

 

Single-tenant retail

 

663,178

 

 

655,540

 

1

%

 

 

671,921

 

(1

)%

 

 

 

 

 

 

Office

 

396,131

 

 

403,861

 

(2

)%

 

 

454,695

 

(13

)%

 

 

 

 

 

 

All other

 

832,765

 

 

864,635

 

(4

)%

 

 

933,339

 

(11

)%

 

 

 

 

 

 

Total CRE loans

$

8,630,757

 

$

8,679,515

 

(1

)%

 

$

8,972,886

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

9/30/2024

 

6/30/2024

 

% change

 

9/30/2023

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,722,985

 

$

3,671,192

 

1

%

 

$

4,249,788

 

(12

)%

 

 

 

 

 

 

Money market, interest bearing demand, and savings

 

5,013,305

 

 

4,907,860

 

2

%

 

 

4,855,683

 

3

%

 

 

 

 

 

 

Time deposits

 

5,993,208

 

 

6,132,419

 

(2

)%

 

 

6,634,388

 

(10

)%

 

 

 

 

 

 

Total deposits

$

14,729,498

 

$

14,711,471

 

%

 

$

15,739,859

 

(6

)%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

CAPITAL & CAPITAL RATIOS:

9/30/2024

 

6/30/2024

 

9/30/2023

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,169,785

 

 

$

2,111,282

 

 

$

2,030,424

 

 

 

 

 

 

 

 

 

Total capital

$

2,143,477

 

 

$

2,137,513

 

 

$

2,105,754

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

13.06

%

 

 

12.70

%

 

 

11.67

%

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

13.78

%

 

 

13.40

%

 

 

12.32

%

 

 

 

 

 

 

 

 

Total capital ratio

 

14.80

%

 

 

14.41

%

 

 

13.23

%

 

 

 

 

 

 

 

 

Leverage ratio

 

11.61

%

 

 

11.61

%

 

 

9.83

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

14,478,900

 

 

$

14,828,905

 

 

$

15,912,792

 

 

 

 

 

 

 

 

 

Book value per common share

$

17.97

 

 

$

17.49

 

 

$

16.92

 

 

 

 

 

 

 

 

 

Tangible common equity (“TCE”) per share (1)

$

14.10

 

 

$

13.61

 

 

$

13.01

 

 

 

 

 

 

 

 

 

TCE ratio (1)

 

10.08

%

 

 

9.72

%

 

 

7.96

%

 

 

 

 

 

 

 

 

(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR CREDIT LOSSES CHANGES:

Three Months Ended

 

Nine Months Ended

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

Balance at beginning of period

$

156,019

 

 

$

158,758

 

 

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

158,694

 

 

$

162,359

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(407

)

Provision for credit losses on loans

 

3,000

 

 

 

1,700

 

 

 

3,600

 

 

 

1,700

 

 

 

16,800

 

 

 

8,300

 

 

 

27,400

 

Recoveries

 

534

 

 

 

2,099

 

 

 

1,184

 

 

 

306

 

 

 

2,938

 

 

 

3,817

 

 

 

4,856

 

Charge offs

 

(6,283

)

 

 

(6,538

)

 

 

(4,720

)

 

 

(2,121

)

 

 

(33,925

)

 

 

(17,541

)

 

 

(35,399

)

Balance at end of period

$

153,270

 

 

$

156,019

 

 

$

158,758

 

 

$

158,694

 

 

$

158,809

 

 

$

153,270

 

 

$

158,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

 

 

 

Allowance for unfunded loan commitments

$

2,823

 

 

$

2,543

 

 

$

2,843

 

 

$

3,843

 

 

$

3,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

Provision for credit losses on loans

$

3,000

 

 

$

1,700

 

 

$

3,600

 

 

$

1,700

 

 

$

16,800

 

 

$

8,300

 

 

$

27,400

 

Provision (credit) for unfunded loan commitments

 

280

 

 

 

(300

)

 

 

(1,000

)

 

 

700

 

 

 

62

 

 

 

(1,020

)

 

 

1,792

 

Provision for credit losses

$

3,280

 

 

$

1,400

 

 

$

2,600

 

 

$

2,400

 

 

$

16,862

 

 

$

7,280

 

 

$

29,192

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

Nine Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

9/30/2024

 

9/30/2023

CRE loans

$

372

 

 

$

514

 

 

$

(497

)

 

$

1,560

 

 

$

(2,227

)

 

$

389

 

 

$

(1,898

)

C&I loans

 

5,287

 

 

 

3,900

 

 

 

4,072

 

 

 

138

 

 

 

33,145

 

 

 

13,259

 

 

 

32,250

 

Residential mortgage and other loans

 

90

 

 

 

25

 

 

 

(39

)

 

 

117

 

 

 

69

 

 

 

76

 

 

 

191

 

Net loan charge offs

$

5,749

 

 

$

4,439

 

 

$

3,536

 

 

$

1,815

 

 

$

30,987

 

 

$

13,724

 

 

$

30,543

 

Net charge offs/average loans (annualized)

 

0.17

%

 

 

0.13

%

 

 

0.10

%

 

 

0.05

%

 

 

0.85

%

 

 

0.13

%

 

 

0.27

%

NONPERFORMING ASSETS:

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

Loans on nonaccrual status (1)

$

103,602

 

 

$

67,003

 

 

$

59,526

 

 

$

45,204

 

 

$

39,081

 

Accruing delinquent loans past due 90 days or more

 

226

 

 

 

273

 

 

 

47,290

 

 

 

261

 

 

 

21,579

 

Total nonperforming loans

 

103,828

 

 

 

67,276

 

 

 

106,816

 

 

 

45,465

 

 

 

60,660

 

Other real estate owned (“OREO”)

 

 

 

 

 

 

 

 

 

 

63

 

 

 

1,043

 

Total nonperforming assets

$

103,828

 

 

$

67,276

 

 

$

106,816

 

 

$

45,528

 

 

$

61,703

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.60

%

 

 

0.39

%

 

 

0.59

%

 

 

0.24

%

 

 

0.31

%

Nonperforming loans/loans receivable

 

0.76

%

 

 

0.50

%

 

 

0.78

%

 

 

0.33

%

 

 

0.42

%

Nonaccrual loans/loans receivable

 

0.76

%

 

 

0.49

%

 

 

0.43

%

 

 

0.33

%

 

 

0.27

%

Allowance for credit losses/loans receivable

 

1.13

%

 

 

1.15

%

 

 

1.16

%

 

 

1.15

%

 

 

1.11

%

Allowance for credit losses/nonperforming loans

 

147.62

%

 

 

231.91

%

 

 

148.63

%

 

 

349.05

%

 

 

261.80

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.1 million, $11.2 million, $10.9 million, $11.4 million, and $12.1 million, at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

CRE loans

$

72,228

 

 

$

27,292

 

 

$

37,836

 

 

$

33,932

 

 

$

26,687

 

C&I loans

 

24,963

 

 

 

33,456

 

 

 

15,070

 

 

 

5,013

 

 

 

4,234

 

Residential mortgage and other loans

 

6,411

 

 

 

6,255

 

 

 

6,620

 

 

 

6,259

 

 

 

8,160

 

Total nonaccrual loans

$

103,602

 

 

$

67,003

 

 

$

59,526

 

 

$

45,204

 

 

$

39,081

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

30 - 59 days past due

$

10,746

 

$

9,073

 

$

2,273

 

$

2,833

 

$

2,906

60 - 89 days past due

 

1,539

 

 

552

 

 

313

 

 

1,289

 

 

506

Total accruing delinquent loans 30-89 days past due

$

12,285

 

$

9,625

 

$

2,586

 

$

4,122

 

$

3,412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

CRE loans

$

816

 

$

5,586

 

$

1,639

 

$

2,160

 

$

611

C&I loans

 

9,037

 

 

2,530

 

 

551

 

 

1,643

 

 

1,168

Residential mortgage and other loans

 

2,432

 

 

1,509

 

 

396

 

 

319

 

 

1,633

Total accruing delinquent loans 30-89 days past due

$

12,285

 

$

9,625

 

$

2,586

 

$

4,122

 

$

3,412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

9/30/2024

 

6/30/2024

 

3/31/2024

 

12/31/2023

 

9/30/2023

Special mention loans

$

184,443

 

$

204,167

 

$

215,183

 

$

178,992

 

$

186,600

Substandard loans

 

314,880

 

 

243,635

 

 

206,350

 

 

143,449

 

 

174,161

Doubtful/loss

 

6,403

 

 

 

 

 

 

 

 

Total criticized loans

$

505,726

 

$

447,802

 

$

421,533

 

$

322,441

 

$

360,761

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Reconciliation of GAAP financial measures to non-GAAP financial measures

Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.

TANGIBLE COMMON EQUITY (“TCE”)

9/30/2024

 

6/30/2024

 

9/30/2023

 

 

 

 

Total stockholders’ equity

$

2,169,785

 

 

$

2,111,282

 

 

$

2,030,424

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(467,182

)

 

 

(467,583

)

 

 

(468,832

)

 

 

 

 

TCE

$

1,702,603

 

 

$

1,643,699

 

 

$

1,561,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

17,354,189

 

 

$

17,375,091

 

 

$

20,076,364

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(467,182

)

 

 

(467,583

)

 

 

(468,832

)

 

 

 

 

Tangible assets

$

16,887,007

 

 

$

16,907,508

 

 

$

19,607,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCE ratio

 

10.08

%

 

 

9.72

%

 

 

7.96

%

 

 

 

 

Common shares outstanding

 

120,737,908

 

 

 

120,731,342

 

 

 

120,026,220

 

 

 

 

 

TCE per share

$

14.10

 

 

$

13.61

 

 

$

13.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

9/30/2024

 

6/30/2024

 

9/30/2023

 

9/30/2024

 

9/30/2023

Average stockholders’ equity

$

2,139,861

 

 

$

2,097,108

 

 

$

2,079,092

 

 

$

2,121,169

 

 

$

2,066,157

 

Less: Average goodwill and core deposit intangible assets, net

 

(467,419

)

 

 

(467,822

)

 

 

(469,079

)

 

 

(467,822

)

 

 

(469,525

)

Average TCE

$

1,672,442

 

 

$

1,629,286

 

 

$

1,610,013

 

 

$

1,653,347

 

 

$

1,596,632

 

 

 

 

 

 

 

 

 

 

 

Net income

$

24,159

 

 

$

25,270

 

 

$

30,049

 

 

$

75,293

 

 

$

107,192

 

ROTCE (annualized)

 

5.78

%

 

 

6.20

%

 

 

7.47

%

 

 

6.07

%

 

 

8.95

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS

9/30/2024

 

6/30/2024

 

9/30/2023

 

9/30/2024

 

9/30/2023

Net income

$

24,159

 

 

$

25,270

 

 

$

30,049

 

 

$

75,293

 

 

$

107,192

 

Notable items:

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

 

 

 

(309

)

 

 

 

 

 

691

 

 

 

 

Restructuring-related costs

 

197

 

 

 

576

 

 

 

500

 

 

 

1,175

 

 

 

500

 

Merger-related costs

 

1,236

 

 

 

1,589

 

 

 

 

 

 

3,869

 

 

 

 

Total notable items

 

1,433

 

 

 

1,856

 

 

 

500

 

 

 

5,735

 

 

 

500

 

Less: tax provision

 

421

 

 

 

547

 

 

 

147

 

 

 

1,687

 

 

 

147

 

Total notable items, net of tax provision

$

1,012

 

 

$

1,309

 

 

$

353

 

 

$

4,048

 

 

$

353

 

 

 

 

 

 

 

 

 

 

 

Net income excluding notable items

$

25,171

 

 

$

26,579

 

 

$

30,402

 

 

$

79,341

 

 

$

107,545

 

 

 

 

 

 

 

 

 

 

 

Diluted common shares

 

121,159,977

 

 

 

120,939,429

 

 

 

120,374,618

 

 

 

121,027,793

 

 

 

120,249,952

 

EPS excluding notable items

$

0.21

 

 

$

0.22

 

 

$

0.25

 

 

$

0.66

 

 

$

0.89

 

Average Assets

$

17,369,169

 

 

$

17,256,638

 

 

$

20,059,304

 

 

$

17,920,176

 

 

$

19,875,322

 

ROA excluding notable items

 

0.58

%

 

 

0.62

%

 

 

0.61

%

 

 

0.59

%

 

 

0.72

%

Average Equity

$

2,139,861

 

 

$

2,097,108

 

 

$

2,079,092

 

 

$

2,121,169

 

 

$

2,066,157

 

ROE excluding notable items

 

4.71

%

 

 

5.07

%

 

 

5.85

%

 

 

4.99

%

 

 

6.94

%

Average TCE

$

1,672,442

 

 

$

1,629,286

 

 

$

1,610,013

 

 

$

1,653,347

 

 

$

1,596,632

 

ROTCE excluding notable items

 

6.02

%

 

 

6.53

%

 

 

7.55

%

 

 

6.40

%

 

 

8.98

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS

9/30/2024

 

6/30/2024

 

9/30/2023

 

9/30/2024

 

9/30/2023

Noninterest expense

$

81,268

 

 

$

80,987

 

 

$

86,811

 

 

$

247,094

 

 

$

262,768

 

Less: notable items:

 

 

 

 

 

 

 

 

 

FDIC special assessment expense

 

 

 

 

309

 

 

 

 

 

 

(691

)

 

 

 

Restructuring-related costs

 

(197

)

 

 

(576

)

 

 

(500

)

 

 

(1,175

)

 

 

(500

)

Merger-related costs

 

(1,236

)

 

 

(1,589

)

 

 

 

 

 

(3,869

)

 

 

 

Noninterest expense excluding notable items

$

79,835

 

 

$

79,131

 

 

$

86,311

 

 

$

241,359

 

 

$

262,268

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

116,648

 

 

$

116,931

 

 

$

143,683

 

 

$

356,912

 

 

$

436,242

 

Efficiency ratio excluding notable items

 

68.44

%

 

 

67.67

%

 

 

60.07

%

 

 

67.62

%

 

 

60.12

%

 

Julianna Balicka

EVP & Chief Financial Officer

213-235-3235

julianna.balicka@bankofhope.com

Angie Yang

SVP, Director of Investor Relations & Corporate Communications

213-251-2219

angie.yang@bankofhope.com

Source: Hope Bancorp, Inc.

FAQ

What was Hope Bancorp's (HOPE) net income for Q3 2024?

Hope Bancorp reported net income of $24.2 million, or $0.20 per diluted share, for Q3 2024.

How much did Hope Bancorp's (HOPE) customer deposits grow in Q3 2024?

Customer deposits grew 11% on an annualized basis during Q3 2024.

What was Hope Bancorp's (HOPE) capital ratio in Q3 2024?

Hope Bancorp's total capital ratio was 14.8% as of September 30, 2024.

What was Hope Bancorp's (HOPE) nonperforming assets ratio in Q3 2024?

Nonperforming assets were 0.60% of total assets, totaling $103.8 million as of September 30, 2024.

Hope Bancorp, Inc.

NASDAQ:HOPE

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HOPE Stock Data

1.52B
120.73M
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