Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding
company of Bank of Hope (the “Bank”), today reported unaudited
financial results for its second quarter and six months ended June
30, 2023.
For the three months ended June 30, 2023, net income totaled
$38.0 million, or $0.32 per diluted common share. This compares
with net income of $39.1 million, or $0.33 per diluted common
share, in the preceding first quarter. Pre-provision net revenue
(“PPNR”) (1) for the 2023 second quarter totaled $60.4 million, up
11% from $54.5 million in the preceding first quarter.
“Throughout the second quarter, we continued to maintain high
levels of capital and liquidity to prudently navigate an operating
environment that is challenging for regional banks,” said Kevin S.
Kim, Chairman, President and Chief Executive Officer.
“Year-over-year, our total capital ratio increased 51 basis points
to 12.64% at June 30, 2023. At the end of the 2023 second quarter,
our tangible common equity ratio (1) was a robust 8.04%.
“Our asset quality remains healthy. We recorded net recoveries
of $552 thousand for the 2023 second quarter, and nonperforming
assets decreased 30% year-over-year. We have steadily built our
allowance for credit losses, with coverage at 1.16% of loans
receivable at June 30, 2023.
“Year-over-year, our loans receivable grew 2% to $14.9 billion,
and our total deposits grew 4% to $15.6 billion at June 30, 2023.
With Bank of Hope’s strong balance sheet and continued investment
in enhancing our products and services, we are focused on expanding
our relationships with our customers and strengthening our market
leadership in the Korean American community and beyond,” said
Kim.
Q2 2023 Highlights
- Capital growth. Total capital was $2.10 billion at June
30, 2023, growing 2% from March 31, 2023. The total capital ratio
increased 39 basis points quarter-over-quarter to 12.64% at June
30, 2023. Book value per common share at June 30, 2023, was $17.23,
and tangible common equity (“TCE”) per share (1) was $13.32, up
0.3% and 0.5%, respectively, quarter-over-quarter. The TCE ratio of
8.04% as of June 30, 2023, expanded 13 basis points from March 31,
2023.
- Strong liquidity. Cash and cash equivalents increased to
$2.30 billion at June 30, 2023, up from $2.21 billion at March 31,
2023. Available borrowing capacity, together with cash and cash
equivalents and unpledged investment securities, totaled $7.75
billion, equivalent to 50% of total deposits at June 30, 2023.
- Healthy asset quality. Nonperforming assets declined 3%
quarter-over-quarter. The nonperforming assets ratio improved to
0.38% of total assets at June 30, 2023, down from 0.39% at March
31, 2023. The Company recorded net recoveries of $552 thousand
during the 2023 second quarter, equivalent to 0.01% annualized of
average loans.
- Total deposits of $15.62 billion at June 30, 2023,
decreased 1% quarter-over-quarter and grew 4% year-over-year.
Uninsured deposits at June 30, 2023, represented 36% of the Bank’s
deposits, compared with 38% at March 31, 2023.
- Loans receivable of $14.86 billion at June 30, 2023,
decreased 1% quarter-over-quarter and grew 2% year-over-year.
- Efficiency improvement. The efficiency ratio for the
2023 second quarter improved 325 basis points to 59.1% from 62.4%
for the preceding first quarter.
- PPNR increase. PPNR for the 2023 second quarter totaled
$60.4 million, up 11% from $54.5 million in the preceding first
quarter.
(1)
PPNR, TCE ratio, and TCE per share 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.
Financial Summary
At or for the Three Months
Ended
(dollars in thousands, except per share
data) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Net income
$
38,022
$
39,121
$
52,088
Diluted earnings per share
$
0.32
$
0.33
$
0.43
Net interest income before provision for
credit losses
$
130,689
$
133,878
$
141,538
Pre-provision net revenue (“PPNR”) (1)
$
60,370
$
54,502
$
73,919
Loans receivable
$
14,864,810
$
15,064,849
$
14,546,049
Deposits
$
15,619,352
$
15,828,209
$
15,029,630
Total assets
$
20,366,138
$
20,568,884
$
18,089,062
Total equity
$
2,067,998
$
2,058,580
$
2,000,369
Total capital ratio
12.64
%
12.25
%
12.13
%
Tangible common equity (“TCE”) ratio
(1)
8.04
%
7.91
%
8.68
%
Net recoveries (charge offs)
$
552
$
(108
)
$
930
Net recoveries/average loans receivable
(2)
0.01
%
—
%
0.03
%
Allowance for credit losses
$
172,996
$
163,544
$
151,580
Allowance for credit losses to loans
receivable
1.16
%
1.09
%
1.04
%
Nonperforming assets to total assets
(3)
0.38
%
0.39
%
0.61
%
Return on average assets (“ROA”) (2)
0.74
%
0.82
%
1.17
%
Return on average equity (“ROE”) (2)
7.34
%
7.65
%
10.33
%
Return on average TCE (“ROTCE”) (1)
(2)
9.49
%
9.93
%
13.48
%
ROA (PPNR) (1) (2)
1.18
%
1.14
%
1.65
%
ROE (PPNR) (1) (2)
11.65
%
10.65
%
14.66
%
Net interest margin (2)
2.70
%
3.02
%
3.36
%
Noninterest expense / average assets
(2)
1.71
%
1.89
%
1.80
%
Efficiency ratio
59.13
%
62.38
%
52.09
%
__________________
(1)
PPNR, TCE ratio, ROTCE, ROA (PPNR), and
ROE (PPNR) 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.
(2)
Annualized.
(3)
Excludes delinquent Small Business
Administration (“SBA”) loans that are guaranteed and currently in
liquidation.
Operating Results for the 2023
Second Quarter
Net interest income. Net interest income before provision
for credit losses for the 2023 second quarter totaled $130.7
million, a decrease of 2% compared with $133.9 million in the
preceding first quarter. 2023 second quarter interest income of
$267.2 million increased $30.5 million quarter-over-quarter, driven
by growth in average interest earning cash and deposits at other
banks, as well as expanding loan yields. This was offset by higher
interest expense, which increased $33.7 million
quarter-over-quarter, reflecting a higher cost of interest bearing
deposits and a higher volume of average borrowings.
The net interest margin for the 2023 second quarter decreased 32
basis points to 2.70%, from 3.02% in the preceding first quarter,
primarily reflecting a higher cost of funds and an increase in
average borrowings, partially offset by loan yield expansion and
growth in average interest earning cash and deposits at other
banks.
The weighted average yield on loans for the 2023 second quarter
was 5.99%, up 24 basis points from 5.75% in the preceding first
quarter. This reflected increases in market interest rates and a
significant increase in the average rate on new loans. The average
rate on new loans originated in the 2023 second quarter was 8.37%,
up 84 basis points quarter-over-quarter.
The weighted average cost of total deposits for the 2023 second
quarter was 2.79%, up 42 basis points from 2.37% in the preceding
first quarter, reflecting higher rates paid on interest bearing
deposit accounts.
Noninterest income. Noninterest income for the 2023
second quarter totaled $17.0 million, up 55% from $11.0 million in
the preceding first quarter. Other income and fees for the 2023
second quarter included a $5.8 million cash distribution from a
gain on an investment in an affordable housing partnership. During
the 2023 second quarter, the Company sold $38.4 million of the
guaranteed portion of SBA 7(a) loans and $6.6 million of
residential mortgage loans, for a gain on loan sales of $2.0
million, compared with $40.7 million and $7.3 million,
respectively, sold in the preceding first quarter for a gain on
loan sales of $2.3 million.
Noninterest expense. Noninterest expense for the 2023
second quarter decreased 3% to $87.3 million, down from $90.4
million in the preceding first quarter. The quarter-over-quarter
change was primarily driven by lower salaries and employee benefits
expense, partially offset by the impact of an industry-wide
increase in the FDIC assessment rate of two basis points.
The Company’s efficiency ratio for the 2023 second quarter
improved to 59.1% from 62.4% in the preceding first quarter.
Annualized noninterest expense as a percentage of average assets
was 1.71% for the 2023 second quarter, down from 1.89% for the 2023
first quarter.
Tax rate. The effective tax rate for the 2023 second
quarter was 26.1%, compared with 25.9% for the preceding first
quarter. The year-to-date effective tax rate for the first six
months of 2023 was 26.0%.
Balance Sheet Summary
Loans. New loan originations for the 2023 second quarter
totaled $490.6 million, compared with $568.7 million for the
preceding first quarter. The following table sets forth the
components of new loan production for the quarters ended June 30,
2023, March 31, 2023, and June 30, 2022.
For the Three Months
Ended
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Commercial real estate (“CRE”) loans
$
115,444
$
176,798
$
522,093
Commercial and industrial (“C&I”)
loans
318,063
344,194
544,639
SBA loans
38,051
29,977
35,085
Residential mortgage loans
18,736
14,317
181,408
Other loans
280
3,375
2,770
Total new loan originations
$
490,574
$
568,661
$
1,285,995
At June 30, 2023, loans receivable decreased 1%
quarter-over-quarter to $14.86 billion from $15.06 billion at March
31, 2023. Year-over-year, loans receivable grew 2%, up from $14.55
billion at June 30, 2022. The following table sets forth the loan
portfolio composition and percentage of total loans at June 30,
2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Balance
Percentage
Balance
Percentage
Balance
Percentage
C&I loans
$
4,805,126
32.3
%
$
4,821,270
32.0
%
$
4,395,738
30.2
%
CRE loans
9,192,160
61.9
%
9,373,529
62.2
%
9,335,020
64.2
%
Residential mortgage and other loans
867,524
5.8
%
870,050
5.8
%
815,291
5.6
%
Loans receivable
$
14,864,810
100.0
%
$
15,064,849
100.0
%
$
14,546,049
100.0
%
Deposits. At June 30, 2023, total deposits decreased 1%
to $15.62 billion from $15.83 billion at March 31, 2023.
Year-over-year, total deposits grew 4%, up from $15.03 billion at
June 30, 2022. The following table sets forth the deposit
composition and percentage of total deposits at June 30, 2023,
March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Balance
Percentage
Balance
Percentage
Balance
Percentage
Noninterest bearing demand deposits
$
4,229,247
27.1
%
$
4,504,621
28.4
%
$
5,689,992
37.9
%
Money market and interest bearing
demand deposits
4,188,584
26.8
%
4,331,998
27.4
%
6,339,467
42.2
%
Savings deposits
224,495
1.4
%
231,704
1.5
%
326,927
2.1
%
Time deposits
6,977,026
44.7
%
6,759,886
42.7
%
2,673,244
17.8
%
Total deposits
$
15,619,352
100.0
%
$
15,828,209
100.0
%
$
15,029,630
100.0
%
Liquidity. At June 30, 2023, cash and cash equivalents
increased to $2.30 billion from $2.21 billion at March 31, 2023,
and up from $0.20 billion at June 30, 2022. Available borrowing
capacity, cash and cash equivalents, and unpledged investment
securities totaled $7.75 billion, equivalent to 50% of total
deposits at June 30, 2023, and well exceeding the Bank’s uninsured
deposit balances.
Borrowings and Convertible Notes. Federal Home Loan Bank
and Federal Reserve Bank borrowings were $2.26 billion at June 30,
2023, compared with $2.13 billion at March 31, 2023, and $0.57
billion at June 30, 2022. At the expiration of the Optional Put for
the holders of the Company’s 2% Convertible Senior Notes due 2038,
$197 million of the principal amount was paid off on May 15, 2023,
with existing cash.
Allowance for Credit
Losses
For the 2023 second quarter, the Company recorded a provision
for credit losses of $8.9 million, compared with $1.7 million in
the preceding first quarter, building its allowance for credit
losses. The allowance for credit losses increased to $173.0 million
at June 30, 2023, up from $163.5 million at March 31, 2023. The
allowance coverage ratio increased to 1.16% of loans receivable at
June 30, 2023, up from 1.09% a quarter ago.
The following table sets forth the allowance for credit losses
and allowance coverage ratios at June 30, 2023, March 31, 2023, and
June 30, 2022:
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Allowance for credit losses
$
172,996
$
163,544
$
151,580
Allowance for credit losses/loans
receivable
1.16
%
1.09
%
1.04
%
Credit Quality
Asset quality continued to be healthy. The Company recorded net
recoveries of $552 thousand in the 2023 second quarter,
representing an annualized net recovery ratio of 0.01% of average
loans. The following table sets forth net recoveries (charge offs)
and net recoveries to average loans receivable, annualized, for the
three months ended June 30, 2023, March 31, 2023, and June 30,
2022:
For the Three Months
Ended
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Net recoveries (charge offs)
$
552
$
(108
)
$
930
Net recoveries/average loans receivable
(annualized)
0.01
%
—
%
0.03
%
Nonperforming assets. Nonperforming assets totaled $77.4
million at June 30, 2023, a decrease of 3% quarter-over-quarter,
and a decrease of 30% year-over-year. The nonperforming assets
ratio improved to 0.38% of total assets at June 30, 2023, down from
0.39% at March 31, 2023, and down from 0.61% at June 30, 2022.
Nonperforming loans decreased 4% quarter-over-quarter to $76.4
million at June 30, 2023, down from $79.2 million at March 31,
2023, and decreased 30% year-over-year from $108.6 million at June
30, 2022.
The following table sets forth the components of nonperforming
assets at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited)
6/30/2023
3/31/2023
6/30/2022
Loans on nonaccrual status (1)
$
61,252
$
78,861
$
69,522
Accruing delinquent loans past due 90 days
or more
15,182
364
12,468
Accruing troubled debt restructured loans
(2)
—
—
26,572
Total nonperforming loans
76,434
79,225
108,562
Other real estate owned
938
938
2,010
Total nonperforming assets
$
77,372
$
80,163
$
110,572
Nonperforming assets/total assets
0.38
%
0.39
%
0.61
%
__________________
(1)
Excludes delinquent SBA loans that are
guaranteed and currently in liquidation totaling $11.9 million,
$7.6 million and $13.2 million at June 30, 2023, March 31, 2023,
and June 30, 2022, respectively.
(2)
The Company adopted ASU 2022-02 in 2023,
which eliminated the concept of troubled debt restructured (“TDR”)
loans from GAAP; therefore, accruing TDR loans are no longer
included in nonperforming loans.
Criticized loans. Total criticized loans were $345.0
million at June 30, 2023, compared with $304.7 million at March 31,
2023, and $340.5 million at June 30, 2022.
Capital
The Company’s capital ratios remained strong. At June 30, 2023,
the Company and the Bank continued to exceed all regulatory capital
requirements generally required to meet the definition of a
“well-capitalized” financial institution. The following table sets
forth the capital ratios for the Company at June 30, 2023, March
31, 2023, and June 30, 2022:
(unaudited)
6/30/2023
3/31/2023
6/30/2022
Minimum Guideline for
“Well-Capitalized”
Common Equity Tier 1 Capital Ratio
11.06%
10.75%
10.69%
6.50%
Tier 1 Capital Ratio
11.68%
11.36%
11.33%
8.00%
Total Capital Ratio
12.64%
12.25%
12.13%
10.00%
Leverage Ratio
9.57%
10.13%
10.32%
5.00%
The following table sets forth the TCE per share and the TCE
ratio at June 30, 2023, March 31, 2023, and June 30, 2022:
(unaudited)
6/30/2023
3/31/2023
6/30/2022
TCE per share (1)
$13.32
$13.26
$12.80
TCE ratio (1)
8.04%
7.91%
8.68%
__________________
(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.
Investor Conference Call
The Company previously announced that it will host an investor
conference call on Monday, July 24, 2023 at 9:30 a.m. Pacific Time
/ 12:30 p.m. Eastern Time to review unaudited financial results for
its second quarter ended June 30, 2023. Investors and analysts are
invited to access the conference call by dialing 866-235-9917
(domestic) or 412-902-4103 (international) and asking for the “Hope
Bancorp Call.” A presentation to accompany the earnings call will
be available at the Investor Relations section of Hope Bancorp’s
website at www.ir-hopebancorp.com. Other interested parties are
invited to listen to a live webcast of the call available at the
Investor Relations section of Hope Bancorp’s website. After the
live webcast, a replay will remain available at the Investor
Relations section of Hope Bancorp’s website for one year. A
telephonic replay of the call will be available at 877-344-7529
(domestic) or 412-317-0088 (international) for one week through
July 31, 2023, replay access code 8610354.
Non-GAAP Financial Metrics
This news release contains certain non-GAAP financial measure
disclosures, including PPNR, TCE per share, TCE ratio, ROTCE, ROA
(PPNR), and ROE (PPNR). 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 Page 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 $20.37 billion in total assets as of June
30, 2023. Headquartered in Los Angeles and serving a multi-ethnic
population of customers across the nation, Bank of Hope operates 53
full-service branches in California, Washington, Texas, Illinois,
New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also
operates SBA loan production offices in Seattle, Denver, Dallas,
Atlanta, Portland, New York City, Northern California and Houston;
commercial loan production offices in Northern California, Seattle
and Tampa, Fla.; residential mortgage loan production offices in
Southern California; and a representative office in Seoul, Korea.
Bank of Hope specializes in core business banking products for
small and medium-sized businesses, with an emphasis in commercial
real estate lending, commercial and industrial lending, SBA
lending, and international trade financing. Bank of Hope is a
California-chartered bank, and its deposits are insured by the FDIC
to the extent provided by law. Bank of Hope is an Equal Opportunity
Lender. For additional information, please go to bankofhope.com. By
including the foregoing website address link, the Company does not
intend to and shall not be deemed to incorporate by reference any
material contained or accessible therein.
Forward-Looking Statements
Some statements in this news release may constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements relate to, among other things, expectations regarding
the business environment in which we operate, projections of future
performance, perceived opportunities in the market and statements
regarding our business strategies, objectives and vision.
Forward-looking statements include, but are not limited to,
statements preceded by, followed by or that include the words
“will,” “believes,” “expects,” “anticipates,” “intends,” “plans,”
“estimates” or similar expressions. With respect to any such
forward-looking statements, the Company claims the protection
provided for in the Private Securities Litigation Reform Act of
1995. These statements involve risks and uncertainties. The
Company’s actual results, performance or achievements may differ
significantly from the results, performance or achievements
expressed or implied in any forward-looking statements. The risks
and uncertainties include, but are not limited to: possible further
deterioration in economic conditions in our areas of operation;
interest rate risk associated with volatile interest rates and
related asset-liability matching risk; liquidity risks; risk of
significant non-earning assets, and net credit losses that could
occur, particularly in times of weak economic conditions or times
of rising interest rates; the failure of or changes to assumptions
and estimates underlying the Company’s allowances for credit
losses; regulatory risks associated with current and future
regulations; and the COVID-19 pandemic and its impact on our
financial position, results of operations, liquidity, and
capitalization. For additional information concerning these and
other risk factors, see the Company’s most recent Annual Report on
Form 10-K. The Company does not undertake, and specifically
disclaims any obligation, to update any forward-looking statements
to reflect the occurrence of events or circumstances after the date
of such statements except as required by law.
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in thousands,
except share data)
Assets:
6/30/2023
3/31/2023
% change
6/30/2022
% change
Cash and due from banks
$
2,302,339
$
2,212,637
4
%
$
197,062
1,068
%
Investment securities
2,186,346
2,231,989
(2
)%
2,352,997
(7
)%
Federal Home Loan Bank (“FHLB”) stock and
other investments
60,213
59,962
—
%
87,109
(31
)%
Loans held for sale, at the lower of cost
or fair value
49,246
125,268
(61
)%
76,376
(36
)%
Loans receivable
14,864,810
15,064,849
(1
)%
14,546,049
2
%
Allowance for credit losses
(172,996
)
(163,544
)
6
%
(151,580
)
14
%
Net loans receivable
14,691,814
14,901,305
(1
)%
14,394,469
2
%
Accrued interest receivable
60,118
57,021
5
%
37,845
59
%
Premises and equipment, net
50,513
47,887
5
%
46,093
10
%
Bank owned life insurance
88,238
87,842
—
%
77,692
14
%
Goodwill
464,450
464,450
—
%
464,450
—
%
Servicing assets
11,532
11,628
(1
)%
11,215
3
%
Other intangible assets, net
4,830
5,278
(8
)%
6,698
(28
)%
Other assets
396,499
363,617
9
%
337,056
18
%
Total assets
$
20,366,138
$
20,568,884
(1
)%
$
18,089,062
13
%
Liabilities:
Deposits
$
15,619,352
$
15,828,209
(1
)%
$
15,029,630
4
%
FHLB and Federal Reserve Bank (“FRB”)
borrowings
2,260,000
2,130,000
6
%
573,000
294
%
Convertible notes, net
444
206,658
(100
)%
216,678
(100
)%
Subordinated debentures
107,188
106,875
—
%
105,953
1
%
Accrued interest payable
109,236
53,818
103
%
4,112
2,557
%
Other liabilities
201,920
184,744
9
%
159,320
27
%
Total liabilities
$
18,298,140
$
18,510,304
(1
)%
$
16,088,693
14
%
Stockholders’ Equity:
Common stock, $0.001 par value
$
137
$
137
—
%
$
137
—
%
Additional paid-in capital
1,433,788
1,430,977
—
%
1,424,891
1
%
Retained earnings
1,127,624
1,106,390
2
%
1,011,715
11
%
Treasury stock, at cost
(264,667
)
(264,667
)
—
%
(264,667
)
—
%
Accumulated other comprehensive loss,
net
(228,884
)
(214,257
)
(7
)%
(171,707
)
(33
)%
Total stockholders’ equity
2,067,998
2,058,580
—
%
2,000,369
3
%
Total liabilities and stockholders’
equity
$
20,366,138
$
20,568,884
(1
)%
$
18,089,062
13
%
Common stock shares - authorized
150,000,000
150,000,000
150,000,000
Common stock shares - outstanding
120,014,888
119,865,732
119,473,939
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
Six Months Ended
6/30/2023
3/31/2023
% change
6/30/2022
% change
6/30/2023
6/30/2022
% change
Interest and fees on loans
$
225,671
$
215,935
5
%
$
145,024
56
%
$
441,606
$
277,696
59
%
Interest on investment securities
15,534
15,125
3
%
12,308
26
%
30,659
23,964
28
%
Interest on cash and deposits at other
banks
25,295
4,922
414
%
74
34,082
%
30,217
211
14,221
%
Interest on other investments
684
695
(2
)%
418
64
%
1,379
825
67
%
Total interest income
267,184
236,677
13
%
157,824
69
%
503,861
302,696
66
%
Interest on deposits
109,724
92,348
19
%
12,220
798
%
202,072
20,896
867
%
Interest on borrowings
26,771
10,451
156
%
4,066
558
%
37,222
7,086
425
%
Total interest expense
136,495
102,799
33
%
16,286
738
%
239,294
27,982
755
%
Net interest income before provision
(credit) for credit losses
130,689
133,878
(2
)%
141,538
(8
)%
264,567
274,714
(4
)%
Provision (credit) for credit losses
8,900
1,700
424
%
3,200
178
%
10,600
(7,800
)
N/A
Net interest income after provision
(credit) for credit losses
121,789
132,178
(8
)%
138,338
(12
)%
253,967
282,514
(10
)%
Service fees on deposit accounts
2,325
2,221
5
%
2,270
2
%
4,546
4,244
7
%
Net gains on sales of SBA loans
1,872
2,225
(16
)%
5,804
(68
)%
4,097
11,407
(64
)%
Net gains on sales of residential mortgage
loans
82
64
28
%
76
8
%
146
833
(82
)%
Other income and fees
12,735
6,468
97
%
4,596
177
%
19,203
9,448
103
%
Total noninterest income
17,014
10,978
55
%
12,746
33
%
27,992
25,932
8
%
Salaries and employee benefits
52,305
57,169
(9
)%
51,058
2
%
109,474
98,803
11
%
Occupancy
6,967
7,521
(7
)%
7,178
(3
)%
14,488
14,513
—
%
Furniture and equipment
5,393
5,058
7
%
4,778
13
%
10,451
9,422
11
%
Data processing and communications
2,917
2,822
3
%
2,893
1
%
5,739
5,354
7
%
FDIC assessment
4,691
1,781
163
%
1,450
224
%
6,472
3,019
114
%
Earned interest credit
5,090
4,427
15
%
835
510
%
9,517
1,311
626
%
Other
9,970
11,576
(14
)%
12,173
(18
)%
21,546
23,316
(8
)%
Total noninterest expense
87,333
90,354
(3
)%
80,365
9
%
177,687
155,738
14
%
Income before income taxes
51,470
52,802
(3
)%
70,719
(27
)%
104,272
152,708
(32
)%
Income tax provision
13,448
13,681
(2
)%
18,631
(28
)%
27,129
39,882
(32
)%
Net income
$
38,022
$
39,121
(3
)%
$
52,088
(27
)%
$
77,143
$
112,826
(32
)%
Earnings Per Common Share - Basic
$
0.32
$
0.33
$
0.43
$
0.64
$
0.94
Earnings Per Common Share - Diluted
$
0.32
$
0.33
$
0.43
$
0.64
$
0.93
Weighted Average Shares Outstanding -
Basic
119,953,174
119,551,247
120,219,919
119,753,321
120,175,894
Weighted Average Shares Outstanding -
Diluted
120,129,359
120,242,295
120,699,638
120,179,443
120,898,605
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
For the Three Months
Ended
For the Six Months
Ended
Profitability measures
(annualized):
6/30/2023
3/31/2023
6/30/2022
6/30/2023
6/30/2022
ROA
0.74
%
0.82
%
1.17
%
0.78
%
1.27
%
ROE
7.34
%
7.65
%
10.33
%
7.49
%
10.99
%
ROA (PPNR) (1)
1.18
%
1.14
%
1.65
%
1.16
%
1.63
%
ROE (PPNR) (1)
11.65
%
10.65
%
14.66
%
11.15
%
14.11
%
ROTCE (1)
9.49
%
9.93
%
13.48
%
9.70
%
14.27
%
Net interest margin
2.70
%
3.02
%
3.36
%
2.85
%
3.28
%
Efficiency ratio (not annualized)
59.13
%
62.38
%
52.09
%
60.74
%
51.80
%
Noninterest expense / average assets
1.71
%
1.89
%
1.80
%
1.80
%
1.75
%
(1)
ROA (PPNR), ROE (PPNR), and ROTCE 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.
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
Three Months Ended
6/30/2023
3/31/2023
6/30/2022
Average Balance
Interest Income/
Expense
Annualized Average
Yield/Cost
Average Balance
Interest Income/
Expense
Annualized Average
Yield/Cost
Average Balance
Interest Income/
Expense
Annualized Average
Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale
$
15,105,212
$
225,671
5.99
%
$
15,235,386
$
215,935
5.75
%
$
14,327,476
$
145,024
4.06
%
Investment securities
2,243,614
15,534
2.78
%
2,248,479
15,125
2.73
%
2,424,454
12,308
2.04
%
Interest earning cash and deposits at
other banks
1,996,924
25,295
5.08
%
473,344
4,922
4.22
%
64,545
74
0.46
%
FHLB stock and other investments
47,044
684
5.83
%
47,043
695
5.99
%
69,510
418
2.41
%
Total interest earning assets
$
19,392,794
$
267,184
5.53
%
$
18,004,252
$
236,677
5.33
%
$
16,885,985
$
157,824
3.75
%
INTEREST BEARING LIABILITIES:
Deposits:
Money market and interest bearing
demand
$
4,279,819
$
34,377
3.22
%
$
5,341,057
$
41,399
3.14
%
$
6,487,890
$
8,655
0.54
%
Savings deposits
216,060
674
1.25
%
256,194
827
1.31
%
323,114
937
1.16
%
Time deposits
6,890,035
74,673
4.35
%
5,543,369
50,122
3.67
%
2,277,938
2,628
0.46
%
Total interest bearing deposits
11,385,914
109,724
3.87
%
11,140,620
92,348
3.36
%
9,088,942
12,220
0.54
%
FHLB and FRB borrowings
2,177,264
23,622
4.35
%
676,444
6,698
4.02
%
577,966
1,457
1.01
%
Convertible notes, net
96,621
598
2.45
%
217,114
1,322
2.44
%
216,540
1,322
2.42
%
Subordinated debentures
103,123
2,551
9.79
%
102,791
2,431
9.46
%
101,880
1,287
5.00
%
Total interest bearing liabilities
$
13,762,922
$
136,495
3.98
%
$
12,136,969
$
102,799
3.44
%
$
9,985,328
$
16,286
0.65
%
Noninterest bearing demand deposits
4,366,820
4,662,139
5,715,830
Total funding liabilities/cost of
funds
$
18,129,742
3.02
%
$
16,799,108
2.48
%
$
15,701,158
0.42
%
Net interest income/net interest
spread
$
130,689
1.55
%
$
133,878
1.89
%
$
141,538
3.10
%
Net interest margin
2.70
%
3.02
%
3.36
%
Cost of deposits:
Noninterest bearing demand deposits
$
4,366,820
$
—
—
%
$
4,662,139
$
—
—
%
$
5,715,830
$
—
—
%
Interest bearing deposits
11,385,914
109,724
3.87
%
11,140,620
92,348
3.36
%
9,088,942
12,220
0.54
%
Total deposits
$
15,752,734
$
109,724
2.79
%
$
15,802,759
$
92,348
2.37
%
$
14,804,772
$
12,220
0.33
%
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
Six Months Ended
6/30/2023
6/30/2022
Average Balance
Interest Income/
Expense
Annualized Average
Yield/Cost
Average Balance
Interest Income/
Expense
Annualized Average
Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale
$
15,169,939
$
441,606
5.87
%
$
14,100,983
$
277,696
3.97
%
Investment securities
2,246,033
30,659
2.75
%
2,522,293
23,964
1.92
%
Interest earning cash and deposits at
other banks
1,239,343
30,217
4.92
%
173,836
211
0.24
%
FHLB stock and other investments
47,044
1,379
5.91
%
68,974
825
2.41
%
Total interest earning assets
$
18,702,359
$
503,861
5.43
%
$
16,866,086
$
302,696
3.62
%
INTEREST BEARING LIABILITIES:
Deposits:
Money market and interest bearing
demand
$
4,807,506
$
75,775
3.18
%
$
6,413,292
$
14,355
0.45
%
Savings deposits
236,016
1,501
1.28
%
320,824
1,865
1.17
%
Time deposits
6,220,422
124,796
4.05
%
2,447,771
4,676
0.39
%
Total interest bearing deposits
11,263,944
202,072
3.62
%
9,181,887
20,896
0.46
%
FHLB and FRB borrowings
1,431,000
30,320
4.27
%
411,187
2,144
1.05
%
Convertible notes, net
156,535
1,920
2.44
%
216,423
2,645
2.43
%
Subordinated debentures
102,958
4,982
9.62
%
101,729
2,297
4.49
%
Total interest bearing liabilities
$
12,954,437
$
239,294
3.73
%
$
9,911,226
$
27,982
0.57
%
Noninterest bearing demand deposits
4,513,664
5,694,418
Total funding liabilities/cost of
funds
$
17,468,101
2.76
%
$
15,605,644
0.36
%
Net interest income/net interest
spread
$
264,567
1.70
%
$
274,714
3.05
%
Net interest margin
2.85
%
3.28
%
Cost of deposits:
Noninterest bearing demand deposits
$
4,513,664
$
—
—
%
$
5,694,418
$
—
—
%
Interest bearing deposits
11,263,944
202,072
3.62
%
9,181,887
20,896
0.46
%
Total deposits
$
15,777,608
$
202,072
2.58
%
$
14,876,305
$
20,896
0.28
%
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
Three Months Ended
Six Months Ended
AVERAGE BALANCES:
6/30/2023
3/31/2023
% change
6/30/2022
% change
6/30/2023
6/30/2022
% change
Loans, including loans held for sale
$
15,105,212
$
15,235,386
(1
)%
$
14,327,476
5
%
$
15,169,939
$
14,100,983
8
%
Investment securities
2,243,614
2,248,479
—
%
2,424,454
(7
)%
2,246,033
2,522,293
(11
)%
Interest earning cash and deposits at
other banks
1,996,924
473,344
322
%
64,545
2994
%
1,239,343
173,836
613
%
Interest earning assets
19,392,794
18,004,252
8
%
16,885,985
15
%
18,702,359
16,866,086
11
%
Total assets
20,468,810
19,087,170
7
%
17,876,945
14
%
19,781,806
17,810,045
11
%
Interest bearing deposits
11,385,914
11,140,620
2
%
9,088,942
25
%
11,263,944
9,181,887
23
%
Interest bearing liabilities
13,762,922
12,136,969
13
%
9,985,328
38
%
12,954,437
9,911,226
31
%
Noninterest bearing demand deposits
4,366,820
4,662,139
(6
)%
5,715,830
(24
)%
4,513,664
5,694,418
(21
)%
Stockholders’ equity
2,072,859
2,046,159
1
%
2,016,577
3
%
2,059,583
2,053,461
—
%
LOAN PORTFOLIO COMPOSITION:
6/30/2023
3/31/2023
% change
6/30/2022
% change
Commercial and industrial (“C&I”)
loans
$
4,805,126
$
4,821,270
—
%
$
4,395,738
9
%
Commercial real estate (“CRE”) loans
9,192,160
9,373,529
(2
)%
9,335,020
(2
)%
Residential mortgage and other loans
867,524
870,050
—
%
815,291
6
%
Loans receivable
14,864,810
15,064,849
(1
)%
14,546,049
2
%
Allowance for credit losses
(172,996
)
(163,544
)
6
%
(151,580
)
14
%
Loans receivable, net
$
14,691,814
$
14,901,305
(1
)%
$
14,394,469
2
%
CRE LOANS BY PROPERTY TYPE:
6/30/2023
3/31/2023
% change
6/30/2022
% change
Multi-tenant retail
$
1,778,068
$
1,817,874
(2
)%
$
2,603,516
(32
)%
Hotels/motels
868,286
900,990
(4
)%
1,143,982
(24
)%
Gas stations and car washes
1,042,290
1,046,528
—
%
1,080,777
(4
)%
Mixed-use facilities
834,948
818,227
2
%
833,342
—
%
Industrial warehouses
1,301,075
1,309,763
(1
)%
1,279,647
2
%
Multifamily
1,257,971
1,302,597
(3
)%
989,840
27
%
Single-tenant retail
690,418
706,593
(2
)%
720,413
(4
)%
Office
463,998
464,703
—
%
440,593
5
%
All other
955,106
1,006,254
(5
)%
242,910
293
%
Total CRE loans
$
9,192,160
$
9,373,529
(2
)%
$
9,335,020
(2
)%
DEPOSIT COMPOSITION
6/30/2023
3/31/2023
% change
6/30/2022
% change
Noninterest bearing demand deposits
$
4,229,247
$
4,504,621
(6
)%
$
5,689,992
(26
)%
Money market and interest bearing
demand
4,188,584
4,331,998
(3
)%
6,339,467
(34
)%
Savings deposits
224,495
231,704
(3
)%
326,927
(31
)%
Time deposits
6,977,026
6,759,886
3
%
2,673,244
161
%
Total deposits
$
15,619,352
$
15,828,209
(1
)%
$
15,029,630
4
%
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in thousands,
except share and per share data)
CAPITAL & CAPITAL RATIOS:
6/30/2023
3/31/2023
6/30/2022
Total stockholders’ equity
$
2,067,998
$
2,058,580
$
2,000,369
Total capital
$
2,102,625
$
2,068,433
$
1,948,953
Common equity tier 1 ratio
11.06
%
10.75
%
10.69
%
Tier 1 capital ratio
11.68
%
11.36
%
11.33
%
Total capital ratio
12.64
%
12.25
%
12.13
%
Leverage ratio
9.57
%
10.13
%
10.32
%
Total risk weighted assets
$
16,639,593
$
16,886,419
$
16,066,709
Book value per common share
$
17.23
$
17.17
$
16.74
TCE per share (1)
$
13.32
$
13.26
$
12.80
TCE ratio (1)
8.04
%
7.91
%
8.68
%
(1) TCE per share and TCE ratio are
non-GAAP financial measures. Quantitative reconciliations of the
most directly comparable GAAP to non-GAAP financial measures are
provided in the accompanying financial information on Table Page
10.
Three Months Ended
Six Months Ended
ALLOWANCE FOR CREDIT LOSSES
CHANGES:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
Balance at beginning of period
$
163,544
$
162,359
$
160,561
$
151,580
$
147,450
$
162,359
$
140,550
ASU 2022-02 day 1 adoption impact
—
(407
)
—
—
—
(407
)
—
Provision (credit) for credit losses
8,900
1,700
8,200
9,200
3,200
10,600
(7,800
)
Recoveries
1,531
387
3,222
331
1,642
1,918
21,045
Charge offs
(979
)
(495
)
(9,624
)
(550
)
(712
)
(1,474
)
(2,215
)
Balance at end of period
$
172,996
$
163,544
$
162,359
$
160,561
$
151,580
$
172,996
$
151,580
Net recoveries (charge offs)/average loans
receivable (annualized)
0.01
%
—
%
(0.17
)%
(0.01
)%
0.03
%
0.01
%
0.27
%
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Allowance for unfunded loan
commitments
$
3,081
$
2,971
$
1,351
$
1,231
$
1,481
Three Months Ended
Six Months Ended
NET LOAN RECOVERIES (CHARGE
OFFS):
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
6/30/2023
6/30/2022
CRE loans
$
(438
)
$
109
$
(2,022
)
$
(9
)
$
508
$
(329
)
$
16,926
C&I loans
1,091
(196
)
(4,174
)
(115
)
461
895
1,990
Residential mortgage and other loans
(101
)
(21
)
(206
)
(95
)
(39
)
(122
)
(86
)
Net loan recoveries (charge offs)
$
552
$
(108
)
$
(6,402
)
$
(219
)
$
930
$
444
$
18,830
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
NONPERFORMING ASSETS:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Loans on nonaccrual status (1)
$
61,252
$
78,861
$
49,687
$
64,571
$
69,522
Accruing delinquent loans past due 90 days
or more
15,182
364
401
5,306
12,468
Accruing troubled debt restructured loans
(2)
—
—
16,931
25,631
26,572
Total nonperforming loans
76,434
79,225
67,019
95,508
108,562
Other real estate owned (“OREO”)
938
938
2,418
1,480
2,010
Total nonperforming assets
$
77,372
$
80,163
$
69,437
$
96,988
$
110,572
Nonperforming assets/total assets
0.38
%
0.39
%
0.36
%
0.51
%
0.61
%
Nonperforming assets/loans receivable
& OREO
0.52
%
0.53
%
0.45
%
0.63
%
0.76
%
Nonperforming assets/total capital
3.74
%
3.89
%
3.44
%
4.91
%
5.53
%
Nonperforming loans/loans receivable
0.51
%
0.53
%
0.44
%
0.62
%
0.75
%
Nonaccrual loans/loans receivable
0.41
%
0.52
%
0.32
%
0.42
%
0.48
%
Allowance for credit losses/loans
receivable
1.16
%
1.09
%
1.05
%
1.04
%
1.04
%
Allowance for credit losses/nonperforming
loans
226.33
%
206.43
%
242.26
%
168.11
%
139.63
%
(1) Excludes delinquent SBA loans that are
guaranteed and currently in liquidation totaling $11.9 million,
$7.6 million, $9.8 million, $9.9 million, and $13.2 million, at
June 30, 2023, March 31, 2023, December 31, 2022, September 30,
2022, and June 30, 2022, respectively.
(2) The Company adopted ASU 2022-02 in
2023, which eliminated the concept of TDR from GAAP; therefore,
accruing TDR loans are no longer included in nonperforming
loans.
NONACCRUAL LOANS BY TYPE:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
CRE loans
$
29,270
$
44,376
$
33,915
$
47,807
$
53,966
C&I loans
23,042
26,191
5,620
7,675
8,206
Residential mortgage and other loans
8,940
8,294
10,152
9,089
7,350
Total nonaccrual loans
$
61,252
$
78,861
$
49,687
$
64,571
$
69,522
Hope Bancorp, Inc.
Selected Financial
Data
Unaudited (dollars in
thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS
PAST DUE:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
30 - 59 days past due
$ 9,295
$ 7,662
$ 7,049
$ 13,092
$ 10,090
60 - 89 days past due
178
249
2,243
4,933
6,354
Total accruing delinquent loans 30-89 days
past due
$ 9,473
$ 7,911
$ 9,292
$ 18,025
$ 16,444
ACCRUING DELINQUENT LOANS 30-89 DAYS
PAST DUE BY TYPE:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
CRE loans
$ 7,339
$ 3,652
$ 4,115
$ 9,694
$ 7,919
C&I loans
990
419
3,300
6,165
3,397
Residential mortgage and other loans
1,144
3,840
1,877
2,166
5,128
Total accruing delinquent loans 30-89 days
past due
$ 9,473
$ 7,911
$ 9,292
$ 18,025
$ 16,444
CRITICIZED LOANS:
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Special mention loans
$ 210,806
$ 166,472
$ 157,263
$ 79,399
$ 95,797
Substandard loans
134,203
138,224
104,073
204,713
244,748
Total criticized loans
$ 345,009
$ 304,696
$ 261,336
$ 284,112
$ 340,545
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
Six Months Ended
RETURN ON AVERAGE TANGIBLE COMMON
EQUITY
6/30/2023
3/31/2023
6/30/2022
6/30/2023
6/30/2022
Average stockholders’ equity
$
2,072,859
$
2,046,159
$
2,016,577
$
2,059,583
$
2,053,461
Less: Average goodwill and core deposit
intangible assets, net
(469,515
)
(469,992
)
(471,421
)
(469,752
)
(471,669
)
Average TCE
$
1,603,344
$
1,576,167
$
1,545,156
$
1,589,831
$
1,581,792
Net income
$
38,022
$
39,121
$
52,088
$
77,143
$
112,826
ROTCE (annualized)
9.49
%
9.93
%
13.48
%
9.70
%
14.27
%
TANGIBLE COMMON EQUITY
6/30/2023
3/31/2023
6/30/2022
Total stockholders’ equity
$
2,067,998
$
2,058,580
$
2,000,369
Less: Goodwill and core deposit intangible
assets, net
(469,280
)
(469,728
)
(471,148
)
TCE
$
1,598,718
$
1,588,852
$
1,529,221
Total assets
$
20,366,138
$
20,568,884
$
18,089,062
Less: Goodwill and core deposit intangible
assets, net
(469,280
)
(469,728
)
(471,148
)
Tangible assets
$
19,896,858
$
20,099,156
$
17,617,914
TCE ratio
8.04
%
7.91
%
8.68
%
Common shares outstanding
120,014,888
119,865,732
119,473,939
TCE per share
$
13.32
$
13.26
$
12.80
Three Months Ended
Six Months Ended
PRE-PROVISION NET REVENUE
6/30/2023
3/31/2023
6/30/2022
6/30/2023
6/30/2022
Net interest income before provision
(credit) for credit losses
$
130,689
$
133,878
$
141,538
$
264,567
$
274,714
Noninterest income
17,014
10,978
12,746
27,992
25,932
Revenue
147,703
144,856
154,284
292,559
300,646
Less noninterest expense
87,333
90,354
80,365
177,687
155,738
PPNR
$
60,370
$
54,502
$
73,919
$
114,872
$
144,908
Average assets
$
20,468,810
$
19,087,170
$
17,876,945
$
19,781,806
$
17,810,045
ROA (PPNR) (annualized)
1.18
%
1.14
%
1.65
%
1.16
%
1.63
%
Average stockholders’ equity
2,072,859
2,046,159
2,016,577
2,059,583
2,053,461
ROE (PPNR) (annualized)
11.65
%
10.65
%
14.66
%
11.15
%
14.11
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724181676/en/
Julianna Balicka EVP & Chief Financial Officer 213-235-3235
julianna.balicka@bankofhope.com
Angie Yang SVP, Director of Investor Relations & Corporate
Communications 213-251-2219 angie.yang@bankofhope.com
Hope Bancorp (NASDAQ:HOPE)
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Hope Bancorp (NASDAQ:HOPE)
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부터 5월(5) 2023 으로 5월(5) 2024