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Hope Bancorp Reports 2024 First Quarter Financial Results; Signs Definitive Merger With Territorial Bancorp

Hope Bancorp, Inc. (“Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (“Bank”), today reported unaudited financial results for its first quarter ended March 31, 2024. For the three months ended March 31, 2024, net income totaled $25.9 million, or $0.21 per diluted common share. This compares with net income of $26.5 million, or $0.22 per diluted common share, in the fourth quarter of 2023.

“We are pleased with the progress we are making in our strategic transformation, realigning our structure around lines of business and products,” stated Kevin S. Kim, Chairman, President and Chief Executive Officer. “All our business lines exceeded their deposit goals for the first quarter of 2024; growth in customer deposits offset a planned reduction of brokered time deposits, resulting in stable balances quarter-over-quarter. Our first quarter financial results demonstrated the benefits of our more efficient structure with noninterest expenses, excluding notable items(1), decreasing 2% from the preceding fourth quarter of 2023. All our capital ratios increased quarter-over-quarter, with our tangible common equity ratio(2) rising to 9.33% and our total capital ratio rising to 14.19%, both as of March 31, 2024.

“The strength of our balance sheet positioned us well to capitalize on strategic opportunities in the market. This morning, we announced the signing of a definitive merger agreement with Territorial Bancorp, the stock holding company of Territorial Savings Bank, a $2.2 billion savings bank headquartered in Hawai‘i,” continued Kim. “Territorial has a stable, low-cost core deposit base, excellent asset quality, and provides us an entry point to the attractive Hawai‘i market, which has a large Asian American and Pacific Islander population. Moreover, the combination with Territorial would more than double the size of Hope’s residential mortgage portfolio. We expect this transaction, upon completion, to be immediately accretive to earnings, sustainably strengthening our profitability while further diversifying our franchise.”

_____________________________________

(1)

Noninterest expense, excluding the FDIC special assessment, restructuring charges and merger-related expenses (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 9 and 10.

(2)

Tangible common equity (“TCE”) ratio 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 9 and 10.

Territorial Bancorp Merger Agreement

As concurrently announced in a joint news release issued today, the Company and Territorial Bancorp Inc. (Nasdaq: TBNK) (“Territorial”) signed a definitive merger agreement, which is expected to create the largest regional bank catering to multi-ethnic customers with full-service branches across the continental United States and Hawai‘i.

Under the terms of the merger agreement, following the completion of the transaction, Territorial shareholders will receive a fixed exchange ratio of 0.8048 shares of the Company’s common stock in exchange for each share of Territorial common stock they own, in a 100% stock-for-stock transaction valued at approximately $78.6 million. Based on the closing price of the Company’s common stock on April 26, 2024, this represents a value of $8.82 per share of Territorial common stock, although the actual value will be determined upon transaction closing. Upon completion of the transaction, it is expected that the Company’s shareholders will own approximately 94.4% of the combined entity, and Territorial’s shareholders will own approximately 5.6%, with the actual percentages being determined as of the transaction closing date. The transaction is intended to qualify as a tax-free reorganization for Territorial shareholders.

Upon completion of the merger, the Company intends to preserve and build upon the 100-plus year legacy of the Territorial Savings Bank brand name, culture and commitment to its local communities. Accordingly, the legacy Territorial franchise in Hawai‘i will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope.

The Boards of Directors of both companies have approved the transaction. The transaction is expected to close by year-end 2024, subject to regulatory approvals, the approval of Territorial shareholders, and the satisfaction of other customary closing conditions.

Operating Results for the 2024 First Quarter

Net income and earnings per share. Net income for the 2024 first quarter was $25.9 million, or $0.21 per diluted common share, compared with $26.5 million, or $0.22 per diluted common share, for the immediately preceding fourth quarter. Notable items impacting net income for the 2024 first quarter included $752,000 of merger-related expenses, after tax, related to the Company’s proposed acquisition of Territorial announced today; an accrual of $721,000, after tax, for an incremental Federal Deposit Insurance Corporation (“FDIC”) special assessment; and restructuring costs of $103,000, after tax, related to the Company’s strategic reorganization announced in the 2023 fourth quarter. In the immediately preceding fourth quarter, notable items impacting net income were $8.7 million of restructuring costs, after tax, and $3.1 million, after tax, accrued for an FDIC special assessment. Excluding these notable items, net income(3) for the 2024 first quarter was $27.4 million, compared with $38.3 million for the fourth quarter of 2023. Earnings per diluted common share excluding notable items(3) amounted to $0.23 for the three months ended March 31, 2024, compared with $0.32 for the three months ended December 31, 2023.

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2024 first quarter totaled $115.0 million, compared with $125.9 million in the immediately preceding fourth quarter, a decrease of 9% quarter-over-quarter. First quarter 2024 net interest margin contracted 15 basis points to 2.55% from 2.70% in the 2023 fourth quarter. The linked-quarter change in net interest income and net interest margin largely reflected a decline in the average balance of loans and a higher cost of interest bearing deposits, partially offset by a decrease in the average balance of time deposits and wholesale borrowings.

Noninterest income. Noninterest income for the 2024 first quarter totaled $8.3 million, compared with $9.3 million in the immediately preceding fourth quarter. Growth in deposit account service fees was offset by reductions in other income and fees. The Company continued to retain SBA 7(a)loan production on its balance sheet and did not sell any loans in the 2024 first quarter.

Noninterest expense. Noninterest expense for the 2024 first quarter was $84.8 million, including $1.0 million of merger-related expenses, an incremental accrual of $1.0 million for the FDIC special assessment, and $143,000 of restructuring-related costs, all on a pre-tax basis. For the immediately preceding fourth quarter, noninterest expense was $99.2 million, including $11.1 million of pre-tax restructuring costs and $4.0 million (pre-tax) accrued for the FDIC special assessment.

Excluding notable items, noninterest expense for the 2024 first quarter was $82.7 million, down 2% compared with $84.1 million for the 2023 fourth quarter, and down 7% compared with $88.7 million for the 2023 first quarter. First quarter 2024 salaries and employee benefits expense increased 1% quarter-over-quarter to $47.8 million, up from $47.4 million in the 2023 fourth quarter, reflecting seasonal increases in payroll taxes and vacation accruals, partially offset by reduced salary and benefits costs following the restructuring in the fourth quarter of 2023. Year-over-year, salaries and employee benefits expense decreased 16% from $57.2 million in the 2023 first quarter. Occupancy expenses decreased 6% quarter-over-quarter and 10% year-over-year, reflecting branch rationalization.

Tax rate. The effective tax rate for the 2024 first quarter was 27.9%, compared with 24.9% for the full year 2023. The provision for income taxes in the 2024 first quarter was $10.0 million and included $1.1 million of true-up adjustments, which are not expected to recur. For the full year 2024, the Company expects the effective tax rate to be approximately 26%.

_____________________________________

(3)

Net income excluding notable items and earnings per diluted common share excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 9 and 10.

Balance Sheet Summary

Cash and investment securities. At March 31, 2024, cash and cash equivalents totaled $1.19 billion, compared with $1.93 billion at December 31, 2023. The decrease primarily reflected the payoff of $1.00 billion of the Company’s Bank Term Funding Program (“BTFP”) borrowings with existing cash on March 19, 2024. At March 31, 2023, cash and equivalents were $2.21 billion. Investment securities totaled $2.28 billion at March 31, 2024, $2.41 billion at December 31, 2023, and $2.23 billion at March 31, 2023.

Loans. Loans receivable of $13.72 billion at March 31, 2024, decreased 1% from $13.85 billion at December 31, 2023, reflecting declines in commercial and commercial real estate loans, partially offset by strong growth in residential mortgage loans.

The following table sets forth the loan portfolio composition at March 31, 2024, December 31, 2023, and March 31, 2023:

(dollars in thousands) (unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial real estate (“CRE”) loans

$

8,707,673

63.5

%

 

$

8,797,884

 

63.6

%

 

$

9,373,529

 

62.2

%

Commercial and industrial (“C&I”) loans

 

4,041,063

 

29.5

%

 

 

4,135,044

 

29.8

%

 

 

4,821,270

 

32.0

%

Residential mortgage and other loans

 

970,442

 

7.0

%

 

 

920,691

 

6.6

%

 

 

870,050

 

5.8

%

Loans receivable

$

13,719,178

 

100.0

%

 

$

13,853,619

 

100.0

%

 

$

15,064,849

 

100.0

%

Deposits. Total deposits were stable quarter-over-quarter with total deposits of $14.75 billion at March 31, 2024 and December 31, 2023, reflecting growth in customer deposits that offset a planned reduction of brokered deposits. During the first quarter of 2024, the Company reduced brokered time deposits by $182.7 million, or 13% from December 31, 2023.

The following table sets forth the deposit composition at March 31, 2024, December 31, 2023, and March 31, 2023:

(dollars in thousands) (unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

3,652,592

 

24.7

%

 

$

3,914,967

 

26.5

%

 

$

4,504,621

 

28.4

%

Money market, interest bearing demand, and savings deposits

 

5,313,064

 

36.0

%

 

 

4,872,029

 

33.0

%

 

 

4,563,702

 

28.9

%

Time deposits

 

5,787,761

 

39.3

%

 

 

5,966,757

 

40.5

%

 

 

6,759,886

 

42.7

%

Total deposits

$

14,753,417

 

100.0

%

 

$

14,753,753

 

100.0

%

 

$

15,828,209

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross loan-to-deposit ratio

 

 

93.0

%

 

 

 

93.9

%

 

 

 

96.0

%

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $795.6 million at March 31, 2024, $1.80 billion at December 31, 2023, and $2.13 billion at March 31, 2023. The quarter-over-quarter reduction reflects the payoff of $1.00 billion of the Company’s BTFP borrowings during the 2024 first quarter.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets totaled $106.8 million, or 0.59% of total assets, at March 31, 2024. This compares with nonperforming assets of $45.5 million, or 0.24% of total assets, at December 31, 2023, and $80.2 million, or 0.39% of total assets, at March 31, 2023. The quarter-over-quarter increase in nonperforming assets largely reflects one relationship consisting of three commercial real estate loans that were accruing delinquent loans past due 90 days or more at March 31, 2024. These loans are fully secured and sales agreements are in place for the collateral properties.

The following table sets forth the components of nonperforming assets at March 31, 2024, December 31, 2023, and March 31, 2023:

(dollars in thousands) (unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

Loans on nonaccrual status (1)

$

59,526

 

 

$

45,204

 

 

$

78,861

 

Accruing delinquent loans past due 90 days or more

 

47,290

 

 

 

261

 

 

 

364

 

Total nonperforming loans

 

106,816

 

 

 

45,465

 

 

 

79,225

 

Other real estate owned

 

 

 

 

63

 

 

 

938

 

Total nonperforming assets

$

106,816

 

 

$

45,528

 

 

$

80,163

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.59

%

 

 

0.24

%

 

 

0.39

%

_____________________________________

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $10.9 million, $11.4 million and $7.6 million at March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $3.5 million in the 2024 first quarter, equivalent to 0.10%, annualized, of average loans. This compares with net charge offs of $1.8 million, or 0.05%, annualized, of average loans in the immediately preceding fourth quarter.

The following table sets forth net charge offs and annualized net charge off ratios for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

Net charge offs

$

3,536

 

 

$

1,815

 

 

$

108

 

Net charge offs/average loans receivable (annualized)

 

0.10

%

 

 

0.05

%

 

 

%

For the 2024 first quarter, the Company recorded a provision for credit losses of $2.6 million. This compares with a provision for credit losses of $2.4 million in the immediately preceding fourth quarter.

Allowance for credit losses. The allowance for credit losses totaled $158.8 million at March 31, 2024, compared with $158.7 million at December 31, 2023. The allowance coverage ratio was 1.16% of loans receivable at March 31, 2024, up one basis point from 1.15% at December 31, 2023. Year-over-year, allowance coverage of loans receivable increased from 1.09% at March 31, 2023.

The following table sets forth the allowance for credit losses and the coverage ratios at March 31, 2024, December 31, 2023, and March 31, 2023:

(dollars in thousands) (unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

Allowance for credit losses

$

158,758

 

 

$

158,694

 

 

$

163,544

 

Allowance for credit losses/loans receivable

 

1.16

%

 

 

1.15

%

 

 

1.09

%

Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At March 31, 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 March 31, 2024, December 31, 2023, and March 31, 2023:

(unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

 

Minimum Guideline

for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

12.47

%

 

12.28

%

 

10.75

%

 

6.50

%

Tier 1 Capital Ratio

13.17

%

 

12.96

%

 

11.36

%

 

8.00

%

Total Capital Ratio

14.19

%

 

13.92

%

 

12.25

%

 

10.00

%

Leverage Ratio

10.42

%

 

10.11

%

 

10.13

%

 

5.00

%

At March 31, 2024, total stockholders’ equity was $2.11 billion, or $17.51 per common share. Quarter-over-quarter, stockholders’ equity decreased slightly by $9.0 million, primarily reflecting an adverse change in accumulated other comprehensive income (“AOCI”), partially offset by growth in retained earnings. Tangible common equity (“TCE”) per share(1) was $13.63 at March 31, 2024, compared with $13.76 at December 31, 2023, and the TCE ratio(1) was 9.33%, up 47 basis points quarter-over-quarter.

The following table sets forth the TCE per share and the TCE ratio at March 31, 2024, December 31, 2023, and March 31, 2023:

(unaudited)

3/31/2024

 

12/31/2023

 

3/31/2023

TCE per share (1)

$

13.63

 

 

$

13.76

 

 

$

13.26

 

TCE ratio (1)

 

9.33

%

 

 

8.86

%

 

 

7.91

%

_____________________________________

(1)

TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 9 and 10.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, April 29, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its first quarter ended March 31, 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, along with a presentation regarding the proposed Territorial merger, 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 May 6, 2024, replay access code 4889007.

Non-GAAP Financial Metrics

This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items and noninterest expense / average assets excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 9 and 10.

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 $18.09 billion in total assets as of March 31, 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; cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 48 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to 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.

About Territorial Bancorp Inc.

Territorial Bancorp Inc. (NASDAQ: TBNK), headquartered in Honolulu, Hawai‘i, is the stock holding company for Territorial Savings Bank. Territorial Savings Bank is a state-chartered savings bank which was originally chartered in 1921 by the Territory of Hawai‘i. Territorial Savings Bank conducts business from its headquarters in Honolulu, Hawai‘i and has 28 branch offices in the state of Hawai‘i. For additional information, please visit Territorial’s website at: https://www.tsbhawaii.bank. By including the foregoing website address link, Territorial does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Additional Information and Where to Find It

In connection with the proposed merger, Hope Bancorp, Inc. will file with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4, which will include a Proxy Statement of Territorial Bancorp Inc., that also constitutes a prospectus of Hope Bancorp, Inc. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger when it becomes available 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 proposed 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

Territorial Bancorp and its directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. 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 participants of Territorial Bancorp in the solicitation of proxies in respect of the merger will be included in the Registration Statement and Proxy Statement/Prospectus to be 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, expectations regarding Territorial Bancorp’s low-cost core deposit base, strengthening of profitability, diversification of franchise, and statements about the proposed transaction being immediately accretive. 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 and Territorial Bancorp each 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 proposed 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 proposed 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 proposed 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:

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

Cash and due from banks

$

1,185,296

 

 

$

1,928,967

 

 

(39

)%

 

$

2,212,637

 

 

(46

)%

Investment securities

 

2,277,990

 

 

 

2,408,971

 

 

(5

)%

 

 

2,231,989

 

 

2

%

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

 

61,175

 

 

 

61,000

 

 

%

 

 

59,962

 

 

2

%

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

 

2,763

 

 

 

3,408

 

 

(19

)%

 

 

125,268

 

 

(98

)%

Loans receivable

 

13,719,178

 

 

 

13,853,619

 

 

(1

)%

 

 

15,064,849

 

 

(9

)%

Allowance for credit losses

 

(158,758

)

 

 

(158,694

)

 

%

 

 

(163,544

)

 

(3

)%

Net loans receivable

 

13,560,420

 

 

 

13,694,925

 

 

(1

)%

 

 

14,901,305

 

 

(9

)%

Accrued interest receivable

 

60,316

 

 

 

61,720

 

 

(2

)%

 

 

57,021

 

 

6

%

Premises and equipment, net

 

50,541

 

 

 

50,611

 

 

%

 

 

47,887

 

 

6

%

Goodwill and intangible assets

 

467,984

 

 

 

468,385

 

 

%

 

 

469,728

 

 

%

Other assets

 

421,729

 

 

 

453,535

 

 

(7

)%

 

 

463,087

 

 

(9

)%

Total assets

$

18,088,214

 

 

$

19,131,522

 

 

(5

)%

 

$

20,568,884

 

 

(12

)%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

14,753,417

 

 

$

14,753,753

 

 

%

 

$

15,828,209

 

 

(7

)%

FHLB and Federal Reserve Bank (“FRB”) borrowings

 

795,634

 

 

 

1,795,726

 

 

(56

)%

 

 

2,130,000

 

 

(63

)%

Subordinated debentures and convertible notes, net

 

108,592

 

 

 

108,269

 

 

%

 

 

313,533

 

 

(65

)%

Accrued interest payable

 

122,467

 

 

 

168,174

 

 

(27

)%

 

 

53,818

 

 

128

%

Other liabilities

 

195,834

 

 

 

184,357

 

 

6

%

 

 

184,744

 

 

6

%

Total liabilities

$

15,975,944

 

 

$

17,010,279

 

 

(6

)%

 

$

18,510,304

 

 

(14

)%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

138

 

 

$

138

 

 

%

 

$

137

 

 

1

%

Additional paid-in capital

 

1,439,484

 

 

 

1,439,963

 

 

%

 

 

1,430,977

 

 

1

%

Retained earnings

 

1,159,593

 

 

 

1,150,547

 

 

1

%

 

 

1,106,390

 

 

5

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(264,667

)

 

%

Accumulated other comprehensive loss, net

 

(222,278

)

 

 

(204,738

)

 

(9

)%

 

 

(214,257

)

 

(4

)%

Total stockholders’ equity

 

2,112,270

 

 

 

2,121,243

 

 

%

 

 

2,058,580

 

 

3

%

Total liabilities and stockholders’ equity

$

18,088,214

 

 

$

19,131,522

 

 

(5

)%

 

$

20,568,884

 

 

(12

)%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

120,610,029

 

 

 

120,126,786

 

 

 

 

 

119,865,732

 

 

 

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

 

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

213,626

 

$

221,020

 

(3

)%

 

$

215,935

 

(1

)%

Interest on investment securities

 

18,049

 

 

18,398

 

(2

)%

 

 

15,125

 

19

%

Interest on cash and deposits at other banks

 

27,183

 

 

29,029

 

(6

)%

 

 

4,922

 

452

%

Interest on other investments and FHLB dividends

 

816

 

 

777

 

5

%

 

 

695

 

17

%

Total interest income

 

259,674

 

 

269,224

 

(4

)%

 

 

236,677

 

10

%

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

124,033

 

 

121,305

 

2

%

 

 

92,348

 

34

%

Interest on borrowings

 

20,594

 

 

22,003

 

(6

)%

 

 

10,451

 

97

%

Total interest expense

 

144,627

 

 

143,308

 

1

%

 

 

102,799

 

41

%

 

 

 

 

 

 

 

 

 

 

Net interest income before provision

 

115,047

 

 

125,916

 

(9

)%

 

 

133,878

 

(14

)%

Provision for credit losses

 

2,600

 

 

2,400

 

8

%

 

 

3,320

 

(22

)%

Net interest income after provision

 

112,447

 

 

123,516

 

(9

)%

 

 

130,558

 

(14

)%

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,587

 

 

2,505

 

3

%

 

 

2,221

 

16

%

Net gains on sales of SBA loans

 

 

 

 

%

 

 

2,225

 

(100

)%

Other income and fees

 

5,699

 

 

6,775

 

(16

)%

 

 

6,532

 

(13

)%

Total noninterest income

 

8,286

 

 

9,280

 

(11

)%

 

 

10,978

 

(25

)%

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

47,836

 

 

47,364

 

1

%

 

 

57,169

 

(16

)%

Occupancy

 

6,786

 

 

7,231

 

(6

)%

 

 

7,521

 

(10

)%

Furniture and equipment

 

5,340

 

 

5,302

 

1

%

 

 

5,058

 

6

%

Data processing and communications

 

2,990

 

 

2,976

 

%

 

 

2,822

 

6

%

FDIC assessment

 

2,926

 

 

3,141

 

(7

)%

 

 

1,781

 

64

%

FDIC special assessment

 

1,000

 

 

3,971

 

(75

)%

 

 

 

100

%

Earned interest credit

 

5,834

 

 

6,505

 

(10

)%

 

 

4,427

 

32

%

Restructuring costs

 

143

 

 

11,076

 

(99

)%

 

 

 

100

%

Merger related costs

 

1,044

 

 

 

100

%

 

 

 

100

%

Other noninterest expense

 

10,940

 

 

11,625

 

(6

)%

 

 

9,956

 

10

%

Total noninterest expense

 

84,839

 

 

99,191

 

(14

)%

 

 

88,734

 

(4

)%

Income before income taxes

 

35,894

 

 

33,605

 

7

%

 

 

52,802

 

(32

)%

Income tax provision

 

10,030

 

 

7,124

 

41

%

 

 

13,681

 

(27

)%

Net income

$

25,864

 

$

26,481

 

(2

)%

 

$

39,121

 

(34

)%

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Diluted

$

0.21

 

$

0.22

 

 

 

$

0.33

 

 

Weighted Average Shares Outstanding - Diluted

 

121,020,292

 

 

120,761,112

 

 

 

 

120,242,295

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

 

For the Three Months Ended

Profitability measures (annualized):

3/31/2024

 

12/31/2023

 

3/31/2023

ROA

0.54

%

 

0.54

%

 

0.82

%

ROA excluding notable items (1)

0.57

%

 

0.78

%

 

0.82

%

ROE

4.87

%

 

5.17

%

 

7.65

%

ROE excluding notable items (1)

5.16

%

 

7.49

%

 

7.65

%

ROTCE (1)

6.24

%

 

6.71

%

 

9.93

%

ROTCE excluding notable items (1)

6.62

%

 

9.71

%

 

9.93

%

Net interest margin

2.55

%

 

2.70

%

 

3.02

%

Efficiency ratio (not annualized)

68.79

%

 

73.37

%

 

61.26

%

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

67.02

%

 

62.24

%

 

61.26

%

Noninterest expense / average assets

1.77

%

 

2.02

%

 

1.86

%

Noninterest expense / average assets, excluding notable items (1)

1.73

%

 

1.72

%

 

1.86

%

(1)

ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items, and noninterest expense / average assets excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 9 and 10.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

3/31/2024

 

12/31/2023

 

3/31/2023

 

 

 

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

$

13,746,219

 

$

213,626

 

6.25

%

 

$

14,052,953

 

$

221,020

 

6.24

%

 

$

15,235,386

 

$

215,935

 

5.75

%

Investment securities

 

2,317,154

 

 

18,049

 

3.13

%

 

 

2,283,613

 

 

18,398

 

3.20

%

 

 

2,248,479

 

 

15,125

 

2.73

%

Interest earning cash and deposits at

other banks

 

2,019,769

 

 

27,183

 

5.41

%

 

 

2,142,147

 

 

29,029

 

5.38

%

 

 

473,344

 

 

4,922

 

4.22

%

FHLB stock and other investments

 

48,136

 

 

816

 

6.82

%

 

 

47,587

 

 

777

 

6.48

%

 

 

47,043

 

 

695

 

5.99

%

Total interest earning assets

$

18,131,278

 

$

259,674

 

5.76

%

 

$

18,526,300

 

$

269,224

 

5.77

%

 

$

18,004,252

 

$

236,677

 

5.33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market, interest bearing demand and

savings

$

5,072,782

 

$

50,145

 

3.98

%

 

$

4,821,222

 

$

45,662

 

3.76

%

 

$

5,597,251

 

$

42,226

 

3.06

%

Time deposits

 

5,985,501

 

 

73,888

 

4.96

%

 

 

6,327,191

 

 

75,643

 

4.74

%

 

 

5,543,369

 

 

50,122

 

3.67

%

Total interest bearing deposits

 

11,058,283

 

 

124,033

 

4.51

%

 

 

11,148,413

 

 

121,305

 

4.32

%

 

 

11,140,620

 

 

92,348

 

3.36

%

FHLB and FRB borrowings

 

1,683,334

 

 

17,853

 

4.27

%

 

 

1,795,740

 

 

19,224

 

4.25

%

 

 

676,444

 

 

6,698

 

4.02

%

Subordinated debentures and convertible

notes

 

104,493

 

 

2,741

 

10.38

%

 

 

104,198

 

 

2,779

 

10.44

%

 

 

319,905

 

 

3,753

 

4.69

%

Total interest bearing liabilities

$

12,846,110

 

$

144,627

 

4.53

%

 

$

13,048,351

 

$

143,308

 

4.36

%

 

$

12,136,969

 

$

102,799

 

3.44

%

Noninterest bearing demand deposits

 

3,803,870

 

 

 

 

 

 

4,113,680

 

 

 

 

 

 

4,662,081

 

 

 

 

Total funding liabilities/cost of funds

$

16,649,980

 

 

 

3.49

%

 

$

17,162,031

 

 

 

3.31

%

 

$

16,799,050

 

 

 

2.48

%

Net interest income/net interest spread

 

 

$

115,047

 

1.23

%

 

 

 

$

125,916

 

1.41

%

 

 

 

$

133,878

 

1.89

%

Net interest margin

 

 

 

 

2.55

%

 

 

 

 

 

2.70

%

 

 

 

 

 

3.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,803,870

 

$

 

%

 

$

4,113,680

 

$

 

%

 

$

4,662,081

 

$

 

%

Interest bearing deposits

 

11,058,283

 

 

124,033

 

4.51

%

 

 

11,148,413

 

 

121,305

 

4.32

%

 

 

11,140,620

 

 

92,348

 

3.36

%

Total deposits

$

14,862,153

 

$

124,033

 

3.36

%

 

$

15,262,093

 

$

121,305

 

3.15

%

 

$

15,802,701

 

$

92,348

 

2.37

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

AVERAGE BALANCES:

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

Loans, including loans held for sale

$

13,746,219

 

 

$

14,052,953

 

 

(2

)%

 

$

15,235,386

 

 

(10

)%

Investment securities

 

2,317,154

 

 

 

2,283,613

 

 

1

%

 

 

2,248,479

 

 

3

%

Interest earning cash and deposits at other banks

 

2,019,769

 

 

 

2,142,147

 

 

(6

)%

 

 

473,344

 

 

327

%

Interest earning assets

 

18,131,278

 

 

 

18,526,300

 

 

(2

)%

 

 

18,004,252

 

 

1

%

Goodwill and intangible assets

 

468,229

 

 

 

468,622

 

 

%

 

 

469,992

 

 

%

Total assets

 

19,140,775

 

 

 

19,600,942

 

 

(2

)%

 

 

19,087,170

 

 

%

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

 

3,803,870

 

 

 

4,113,680

 

 

(8

)%

 

 

4,662,081

 

 

(18

)%

Interest bearing deposits

 

11,058,283

 

 

 

11,148,413

 

 

(1

)%

 

 

11,140,620

 

 

(1

)%

Total deposits

 

14,862,153

 

 

 

15,262,093

 

 

(3

)%

 

 

15,802,701

 

 

(6

)%

Interest bearing liabilities

 

12,846,110

 

 

 

13,048,351

 

 

(2

)%

 

 

12,136,969

 

 

6

%

Stockholders’ equity

 

2,126,333

 

 

 

2,048,335

 

 

4

%

 

 

2,046,159

 

 

4

%

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

Commercial real estate (“CRE”) loans

$

8,707,673

 

 

$

8,797,884

 

 

(1

)%

 

$

9,373,529

 

 

(7

)%

Commercial and industrial (“C&I”) loans

 

4,041,063

 

 

 

4,135,044

 

 

(2

)%

 

 

4,821,270

 

 

(16

)%

Residential mortgage and other loans

 

970,442

 

 

 

920,691

 

 

5

%

 

 

870,050

 

 

12

%

Loans receivable

 

13,719,178

 

 

 

13,853,619

 

 

(1

)%

 

 

15,064,849

 

 

(9

)%

Allowance for credit losses

 

(158,758

)

 

 

(158,694

)

 

%

 

 

(163,544

)

 

(3

)%

Loans receivable, net

$

13,560,420

 

 

$

13,694,925

 

 

(1

)%

 

$

14,901,305

 

 

(9

)%

 

 

 

 

 

 

 

 

 

 

CRE LOANS BY PROPERTY TYPE:

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

Multi-tenant retail

$

1,666,153

 

 

$

1,704,337

 

 

(2

)%

 

$

1,817,874

 

 

(8

)%

Industrial warehouses

 

1,221,852

 

 

 

1,226,780

 

 

%

 

 

1,309,763

 

 

(7

)%

Multifamily

 

1,212,941

 

 

 

1,226,384

 

 

(1

)%

 

 

1,302,597

 

 

(7

)%

Gas stations and car washes

 

1,013,708

 

 

 

1,030,888

 

 

(2

)%

 

 

1,046,528

 

 

(3

)%

Mixed-use facilities

 

861,613

 

 

 

870,664

 

 

(1

)%

 

 

818,227

 

 

5

%

Hotels/motels

 

786,198

 

 

 

796,267

 

 

(1

)%

 

 

900,990

 

 

(13

)%

Single-tenant retail

 

667,898

 

 

 

662,705

 

 

1

%

 

 

706,593

 

 

(5

)%

Office

 

401,392

 

 

 

401,821

 

 

%

 

 

464,703

 

 

(14

)%

All other

 

875,918

 

 

 

878,038

 

 

%

 

 

1,006,254

 

 

(13

)%

Total CRE loans

$

8,707,673

 

 

$

8,797,884

 

 

(1

)%

 

$

9,373,529

 

 

(7

)%

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

3/31/2024

 

12/31/2023

 

% change

 

3/31/2023

 

% change

Noninterest bearing demand deposits

$

3,652,592

 

 

$

3,914,967

 

 

(7

)%

 

$

4,504,621

 

 

(19

)%

Money market, interest bearing demand, and savings

 

5,313,064

 

 

 

4,872,029

 

 

9

%

 

 

4,563,702

 

 

16

%

Time deposits

 

5,787,761

 

 

 

5,966,757

 

 

(3

)%

 

 

6,759,886

 

 

(14

)%

Total deposits

$

14,753,417

 

 

$

14,753,753

 

 

%

 

$

15,828,209

 

 

(7

)%

Hope Bancorp, Inc.

Selected Financial Data

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

 

CAPITAL & CAPITAL RATIOS:

3/31/2024

 

12/31/2023

 

3/31/2023

 

 

 

 

Total stockholders’ equity

$

2,112,270

 

 

$

2,121,243

 

 

$

2,058,580

 

 

 

 

 

Total capital

$

2,130,033

 

 

$

2,120,157

 

 

$

2,068,433

 

 

 

 

 

Common equity tier 1 ratio

 

12.47

%

 

 

12.28

%

 

 

10.75

%

 

 

 

 

Tier 1 capital ratio

 

13.17

%

 

 

12.96

%

 

 

11.36

%

 

 

 

 

Total capital ratio

 

14.19

%

 

 

13.92

%

 

 

12.25

%

 

 

 

 

Leverage ratio

 

10.42

%

 

 

10.11

%

 

 

10.13

%

 

 

 

 

Total risk weighted assets

$

15,011,661

 

 

$

15,230,302

 

 

$

16,886,419

 

 

 

 

 

Book value per common share

$

17.51

 

 

$

17.66

 

 

$

17.17

 

 

 

 

 

TCE per share (1)

$

13.63

 

 

$

13.76

 

 

$

13.26

 

 

 

 

 

TCE ratio (1)

 

9.33

%

 

 

8.86

%

 

 

7.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 9.

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Balance at beginning of period

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

$

162,359

 

ASU 2022-02 day 1 adoption impact

 

 

 

 

 

 

 

 

 

 

 

 

 

(407

)

Provision for credit loss on loans

 

3,600

 

 

 

1,700

 

 

 

16,800

 

 

 

8,900

 

 

 

1,700

 

Recoveries

 

1,184

 

 

 

306

 

 

 

2,938

 

 

 

1,531

 

 

 

387

 

Charge offs

 

(4,720

)

 

 

(2,121

)

 

 

(33,925

)

 

 

(979

)

 

 

(495

)

Balance at end of period

$

158,758

 

 

$

158,694

 

 

$

158,809

 

 

$

172,996

 

 

$

163,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Allowance for unfunded loan commitments

$

2,843

 

 

$

3,843

 

 

$

3,143

 

 

$

3,081

 

 

$

2,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Provision for credit loss on loans

$

3,600

 

 

$

1,700

 

 

$

16,800

 

 

$

8,900

 

 

$

1,700

 

Provision for unfunded loan commitments

 

(1,000

)

 

 

700

 

 

 

62

 

 

 

110

 

 

 

1,620

 

Provision for credit losses

$

2,600

 

 

$

2,400

 

 

$

16,862

 

 

$

9,010

 

 

$

3,320

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NET LOAN CHARGE OFFS (RECOVERIES):

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

CRE loans

$

(497

)   

 

$

1,560

 

 

$

(2,227

)   

 

$

438

 

 

$

(109

)   

C&I loans

 

4,072

 

 

 

138

 

 

 

33,145

 

 

 

(1,091

)   

 

 

196

 

Residential mortgage and other loans

 

(39

)   

 

 

117

 

 

 

69

 

 

 

101

 

 

 

21

 

Net loan charge offs (recoveries)

$

3,536

 

 

$

1,815

 

 

$

30,987

 

 

$

(552

)   

 

$

108

 

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

 

0.10

%

 

 

0.05

%

 

 

0.85

%

 

 

(0.01

)%

 

 

%

NONPERFORMING ASSETS:

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Loans on nonaccrual status (1)

$

59,526

 

 

$

45,204

 

 

$

39,081

 

 

$

61,252

 

 

$

78,861

 

Accruing delinquent loans past due 90 days or more

 

47,290

 

 

 

261

 

 

 

21,579

 

 

 

15,182

 

 

 

364

 

Total nonperforming loans

 

106,816

 

 

 

45,465

 

 

 

60,660

 

 

 

76,434

 

 

 

79,225

 

Other real estate owned (“OREO”)

 

 

 

 

63

 

 

 

1,043

 

 

 

938

 

 

 

938

 

Total nonperforming assets

$

106,816

 

 

$

45,528

 

 

$

61,703

 

 

$

77,372

 

 

$

80,163

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.59

%

 

 

0.24

%

 

 

0.31

%

 

 

0.38

%

 

 

0.39

%

Nonperforming assets/loans receivable & OREO

 

0.78

%

 

 

0.33

%

 

 

0.43

%

 

 

0.52

%

 

 

0.53

%

Nonperforming assets/total capital

 

5.06

%

 

 

2.15

%

 

 

3.04

%

 

 

3.74

%

 

 

3.89

%

Nonperforming loans/loans receivable

 

0.78

%

 

 

0.33

%

 

 

0.42

%

 

 

0.51

%

 

 

0.53

%

Nonaccrual loans/loans receivable

 

0.43

%

 

 

0.33

%

 

 

0.27

%

 

 

0.41

%

 

 

0.52

%

Allowance for credit losses/loans receivable

 

1.16

%

 

 

1.15

%

 

 

1.11

%

 

 

1.16

%

 

 

1.09

%

Allowance for credit losses/nonperforming loans

 

148.63

%

 

 

349.05

%

 

 

261.80

%

 

 

226.33

%

 

 

206.43

%

 

 

 

 

 

 

 

 

 

 

(1)  Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $10.9 million, $11.4 million, $12.1 million, $11.9 million, and $7.6 million, at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

CRE loans

$

37,835

 

 

$

33,932

 

 

$

26,687

 

 

$

29,270

 

 

$

44,376

 

C&I loans

 

15,071

 

 

 

5,013

 

 

 

4,234

 

 

 

23,042

 

 

 

26,191

 

Residential mortgage and other loans

 

6,620

 

 

 

6,259

 

 

 

8,160

 

 

 

8,940

 

 

 

8,294

Total nonaccrual loans

$

59,526

 

 

$

45,204

 

 

$

39,081

 

 

$

61,252

 

 

$

78,861

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

30 - 59 days past due

$

2,273 

 

$

2,833 

 

$

2,906 

 

$

9,295 

 

$

7,662 

60 - 89 days past due

 

313

 

 

1,289 

 

 

506

 

 

178

 

 

249

   Total accruing delinquent loans 30-89 days past due

$

2,586 

 

$

4,122 

 

$

3,412 

 

$

9,473 

 

$

7,911 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

CRE loans

$

1,639 

 

$

2,160 

 

$

611 

 

$

7,339 

 

$

3,652 

C&I loans

 

551

 

 

1,643 

 

 

1,168 

 

 

990

 

 

419

Residential mortgage and other loans

 

396

 

 

319

 

 

1,633 

 

 

1,144 

 

 

3,840 

   Total accruing delinquent loans 30-89 days past due

$

2,586 

 

$

4,122 

 

$

3,412 

 

$

9,473 

 

$

7,911 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Special mention loans

$

215,183 

 

$

178,992 

 

$

186,600 

 

$

210,806 

 

$

166,472 

Substandard loans

 

206,350 

 

 

143,449 

 

 

174,161 

 

 

134,203 

 

 

138,224 

   Total criticized loans

$

421,533 

 

$

322,441 

 

$

360,761 

 

$

345,009 

 

$

304,696 

Hope Bancorp, Inc.

Selected Financial Data

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

Reconciliation of GAAP financial measures to non-GAAP financial measures

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

 

Three Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

3/31/2024

 

12/31/2023

 

3/31/2023

Average stockholders’ equity

$

2,126,333

 

 

$

2,048,335

 

 

$

2,046,159

 

Less: Average goodwill and core deposit intangible assets, net

 

(468,229

)  

 

 

(468,622

)  

 

 

(469,992

)  

Average TCE

$

1,658,104

 

 

$

1,579,713

 

 

$

1,576,167

 

 

 

 

 

 

 

Net income

$

25,864

 

 

$

26,481

 

 

$

39,121

 

ROTCE (annualized)

6.24

%

 

 

6.71

%

 

 

9.93

%

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

3/31/2024

 

12/31/2023

 

3/31/2023

Total stockholders’ equity

$

2,112,270

 

 

$

2,121,243

 

 

$

2,058,580

 

Less: Goodwill and core deposit intangible assets, net

 

(467,984

)  

 

 

(468,385

)  

 

 

(469,728

)  

TCE

$

1,644,286

 

 

$

1,652,858

 

 

$

1,588,852

 

 

 

 

 

 

 

Total assets

$

18,088,214

 

 

$

19,131,522

 

 

$

20,568,884

 

Less: Goodwill and core deposit intangible assets, net

 

(467,984

)  

 

 

(468,385

)  

 

 

(469,728

)  

Tangible assets

$

17,620,230

 

 

$

18,663,137

 

 

$

20,099,156

 

 

 

 

 

 

 

TCE ratio

 

9.33

%

 

 

8.86

%

 

 

7.91

%

Common shares outstanding

 

120,610,029

 

 

 

120,126,786

 

 

 

119,865,732

 

TCE per share

$

13.63

 

 

$

13.76

 

 

$

13.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS

3/31/2024

 

12/31/2023

 

3/31/2023

Net income

$

25,864

 

 

$

26,481

 

 

$

39,121

 

 

 

 

 

 

 

Notable items:

 

 

 

 

 

FDIC special assessment expense

 

1,000

 

 

 

3,971

 

 

 

 

Restructuring costs

 

143

 

 

 

11,076

 

 

 

 

Merger related costs

 

1,044

 

 

 

 

 

 

Total notable items

 

2,187

 

 

 

15,047

 

 

 

 

Tax provision

 

611

 

 

 

3,190

 

 

 

 

Less: total notable items, net of tax provision

$

1,576

 

 

$

11,857

 

 

$

 

 

 

 

 

 

 

Net income excluding notable items

$

27,440

 

 

$

38,338

 

 

$

39,121

 

 

 

 

 

 

 

Diluted common shares

 

121,020,292

 

 

 

120,761,112

 

 

 

120,242,295

 

EPS excluding notable items

$

0.23

 

 

$

0.32

 

 

$

0.33

 

Average Assets

 

19,140,775

 

 

 

19,600,942

 

 

 

19,087,170

 

ROA excluding notable items

 

0.57

%

 

 

0.78

%

 

 

0.82

%

Average Equity

 

2,126,333

 

 

 

2,048,335

 

 

 

2,046,159

 

ROE excluding notable items

 

5.16

%

 

 

7.49

%

 

 

7.65

%

Average TCE

$

1,658,104

 

 

$

1,579,713

 

 

$

1,576,167

 

ROTCE excluding notable items

 

6.62

%

 

 

9.71

%

 

 

9.93

%

 

 

 

 

 

 

 

Three Months Ended

EFFICIENCY RATIOS EXCLUDING NOTABLE ITEMS

3/31/2024

 

12/31/2023

 

3/31/2023

Noninterest expense

$

84,839

 

 

$

99,191

 

 

$

88,734

 

 

 

 

 

 

 

Less: notable items:

 

 

 

 

 

FDIC special assessment expense

 

(1,000

)  

 

 

(3,971

)  

 

 

 

Restructuring costs

 

(143

 

 

(11,076

)  

 

 

 

Merger related costs

 

(1,044

)  

 

 

 

 

 

 

Noninterest expense excluding notable items

$

82,652

 

 

$

84,144

 

 

$

88,734

 

 

 

 

 

 

 

Revenue

$

123,333

 

 

$

135,196

 

 

$

144,856

 

Efficiency ratio excluding notable items

 

67.02

%

 

 

62.24

%

 

61.26

%

 

 

 

 

 

 

Average assets

19,140,775

 

 

 

19,600,942

 

 

 

19,087,170

 

Noninterest expense / average assets, excluding notable items

 

1.73

%

 

 

1.72

%

 

 

1.86

%

 

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