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Hope Bancorp Reports 2022 Second Quarter Financial Results

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its second quarter and six months ended June 30, 2022.

For the three months ended June 30, 2022, net income totaled $52.1 million, or $0.43 per diluted common share, compared with $60.7 million, or $0.50 per diluted common share, in the preceding first quarter and $53.8 million, or $0.43 per diluted common share, in the year-ago second quarter.

“We continued the positive momentum from the beginning of the year and delivered another strong financial performance for the second quarter of 2022 with record loan production and enhanced pre-provision net revenue,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “We originated $1.29 billion in new loans, the highest level of production in the history of the Bank. This represented the fourth consecutive quarter of originations in excess of $1.0 billion, and exemplifies the benefits of the investments we have made in our business development platform. We are particularly pleased that our loan production was well diversified. Given our asset sensitive position, our weighted average loan yields increased 18 basis points quarter-over-quarter and contributed to a 15 basis point increase in our net interest margin. With the meaningful increases in loans outstanding contributing to a 6% quarter-over-quarter increase in net interest income, we delivered a 4% increase in our pre-provision net revenue, and our PPNR return on average equity improved 108 basis points to 14.66%.

“As we look ahead to the second half of the year, we remain confident that the investments made to strengthen and diversify our business model over the past few years will continue to generate solid loan and deposit growth, despite the challenges of the current economy. With a lower-risk, more diversified loan portfolio and enhanced credit administration framework, we believe we are well positioned to navigate the potential challenges of a recessionary environment while continuing to enhance our franchise value,” said Kim.

Q2 2022 Highlights

  • Loan originations totaled a record $1.29 billion, up 25% over the preceding first quarter and representing a well-diversified mix of new loan production.
  • Excluding PPP, loans receivable increased 16% quarter-over-quarter on an annualized basis.
  • Company recorded net recoveries of $930 thousand, reflecting the third consecutive quarter of total net recoveries.
  • Criticized loan balances decreased 13% quarter-over-quarter, contributing to stable asset quality metrics.
  • Company recorded a provision for credit losses of $3.2 million, primarily reflecting loan growth and continued reductions in criticized loans.
  • Net interest margin expanded 15 basis points from the preceding first quarter, largely benefiting from higher loan yields.
  • Total deposits increased 3.5% quarter-over-quarter, reflecting higher balances of noninterest bearing demand deposits and strategic increases in time deposits.
  • Total cost of deposits increased 9 basis points quarter-over-quarter, reflecting an aggregate 150 basis point increase in the Federal Funds target rate since March 2022.
  • Noninterest expenses were relatively well managed despite the higher compensation expense environment, with efficiency ratio of 52.09% versus 51.50% in the 2022 first quarter.
  • Repurchased 1,038,986 shares of common stock of the Company during the second quarter, utilizing $14.7 million of the $50 million share repurchase program announced in January 2022.

Financial Highlights

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

At or for the Three Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

Net income

$

52,088

 

 

$

60,738

 

 

$

53,763

 

Diluted earnings per share

$

0.43

 

 

$

0.50

 

 

$

0.43

 

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

$

73,919

 

 

$

70,989

 

 

$

64,530

 

Net interest income before provision (credit) for credit losses

$

141,538

 

 

$

133,176

 

 

$

126,577

 

Net interest margin

 

3.36

%

 

 

3.21

%

 

 

3.11

%

Noninterest income

$

12,746

 

 

$

13,186

 

 

$

11,076

 

Noninterest expense

$

80,365

 

 

$

75,373

 

 

$

73,123

 

Net loans receivable

$

14,394,469

 

 

$

13,919,224

 

 

$

13,234,849

 

Deposits

$

15,029,630

 

 

$

14,515,128

 

 

$

14,726,230

 

Total cost of deposits

 

0.33

%

 

 

0.24

%

 

 

0.30

%

Nonaccrual loans(2)

$

69,522

 

 

$

52,717

 

 

$

111,008

 

Nonperforming loans to loans receivable(2)

 

0.75

%

 

 

0.71

%

 

 

1.24

%

ACL to loans receivable

 

1.04

%

 

 

1.05

%

 

 

1.41

%

ACL to nonaccrual loans(2)

 

218.03

%

 

 

279.70

%

 

 

170.67

%

ACL to nonperforming assets(2)

 

137.09

%

 

 

144.03

%

 

 

103.11

%

Provision (credit) for credit losses

$

3,200

 

 

$

(11,000

)

 

$

(7,000

)

Net (recoveries) charge offs

$

(930

)

 

$

(17,900

)

 

$

11,491

 

Return on average assets (“ROA”)

 

1.17

%

 

 

1.37

%

 

 

1.25

%

Return on average equity (“ROE”)

 

10.33

%

 

 

11.62

%

 

 

10.41

%

ROA (PPNR) (1)

 

1.65

%

 

 

1.60

%

 

 

1.50

%

ROE (PPNR) (1)

 

14.66

%

 

 

13.58

%

 

 

12.49

%

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

 

13.48

%

 

 

15.01

%

 

 

13.50

%

Noninterest expense / average assets

 

1.80

%

 

 

1.70

%

 

 

1.70

%

Efficiency ratio

 

52.09

%

 

 

51.50

%

 

 

53.12

%

(1)

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

(2)

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

Operating Results for the 2022 Second Quarter

Net interest income before provision for credit losses for the 2022 second quarter increased 6% to $141.5 million from $133.2 million in the 2022 first quarter and increased 12% from $126.6 million in the 2021 second quarter. The Company attributed the increase to higher interest income largely due to an increase in loan yields and higher average balances of loans receivable, partially offset by higher interest expense on deposits.

The net interest margin for the 2022 second quarter increased 15 basis points to 3.36% from 3.21% in the preceding first quarter and increased 25 basis points from 3.11% in the year-ago second quarter, primarily reflecting higher loan yields and improved mix of interest earning assets.

The weighted average yield on loans for the 2022 second quarter was 4.06%, up 18 basis points from 3.88% in the 2022 first quarter and up 8 basis points from the year-ago second quarter. The Company attributed the quarter-over-quarter increase in weighted average yield on loans to the repricing of its variable rate loans as a result of an aggregate 150 basis point increase in the Federal Funds target rate since March 2022 and a significant increase in the average rate of new loans originated during the quarter.

The weighted average cost of deposits for the 2022 second quarter increased by 9 basis points to 0.33% from 0.24% in the 2022 first quarter, primarily reflecting a 16 basis point increase in the cost of interest bearing deposits due to the Federal Funds target rate hikes since March 2022. Compared with the year-ago second quarter, the weighted average cost of deposits for the 2022 second quarter increased 3 basis points from 0.30%, reflecting a 6 basis point increase in the cost of interest bearing deposits.

Noninterest income for the 2022 second quarter decreased 3% to $12.7 million from $13.2 million in the 2022 first quarter. Increases in service fees on deposit accounts, net gains on sales of SBA loans and other income and fees were offset by lower levels of net gains on sales of residential mortgage loans. In addition, the Company recorded a loss of $547,000 related to the sale of $35.0 million in problem loans that had been transferred to held-for-sale as of March 31, 2022. During the 2022 second quarter, the Company sold $70.2 million in the guaranteed portion of SBA 7(a) loans and $4.1 million in retail mortgage loans, compared with $58.1 million and $37.8 million, respectively, in the preceding first quarter. Noninterest income for the 2022 second quarter increased 15% compared with $11.1 million in the second quarter of 2021, primarily reflecting higher net gains on sales of SBA loans and service fees on deposit accounts.

Noninterest expense for the 2022 second quarter increased 7% to $80.4 million from $75.4 million for the preceding first quarter, largely reflecting higher salaries and employee benefits, credit-related expenses, and advertising and marketing expenses. For the 2021 second quarter, noninterest expense totaled $73.1 million.

Salaries and employee benefits expense for the 2022 second quarter increased to $51.1 million from $47.7 million in the preceding first quarter, largely reflecting the impact of annual merit increases, higher costs associated with retaining staff in the extremely competitive staffing market, and increased FTE count to support continued growth. Salaries and employee benefits expense for the 2021 second quarter totaled $42.3 million.

The Company’s efficiency ratio for the 2022 second quarter was 52.09%, compared with 51.50% in the preceding first quarter and 53.12% in the year-ago second quarter. Noninterest expense as a percentage of average assets was 1.80% for the 2022 second quarter, compared with 1.70% for the 2022 first quarter and 1.70% for the 2021 second quarter.

The effective tax rate for the 2022 second quarter was 26.4%, compared with 25.9% for the preceding first quarter and 24.8% in the year-ago second quarter. The effective tax rate for the 2022 second quarter was higher than the year-ago second quarter mainly due to a decrease in affordable housing tax credits compared with the prior year.

Balance Sheet Summary

New loan originations funded during the 2022 second quarter totaled $1.29 billion, reflecting a 25% increase over the preceding first quarter and a 44% increase over the year-ago second quarter.

Following are the components of new loan production for the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021.

(dollars in thousands) (unaudited)

For the Three Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

Commercial real estate

$

522,093

 

$

529,730

 

$

454,857

Commercial

 

544,639

 

 

335,756

 

 

288,726

SBA

 

35,085

 

 

56,602

 

 

77,652

SBA PPP

 

 

 

 

 

19,816

Residential mortgage

 

181,408

 

 

103,473

 

 

275

Consumer

 

2,770

 

 

401

 

 

52,766

Total new loan originations

$

1,285,995

 

$

1,025,962

 

$

894,092

At June 30, 2022, loans receivable increased 3.4% to $14.55 billion from $14.07 billion at March 31, 2022 and increased 8.4% from $13.42 billion at June 30, 2021.

Total deposits at June 30, 2022 increased 3.5% to $15.03 billion from $14.52 billion at March 31, 2022, largely reflecting an increase in demand deposits and time deposits, and increased 2.1% year-over-year from $14.73 billion at June 30, 2021. Quarter-over-quarter, money market and NOW deposits decreased 2.2%, but this decrease was more than offset by a 3.5% increase in noninterest bearing demand deposits and a 20.9% increase in time deposits. On a year-over-year basis, noninterest bearing demand deposits at June 30, 2022 increased 0.9%, money market and NOW deposits increased 9.6%, and time deposits decreased 10.7%.

Following is the deposit composition as of June 30, 2022, March 31, 2022 and June 30, 2021:

(dollars in thousands) (unaudited)

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

Noninterest bearing demand deposits

$

5,689,992

 

$

5,498,263

 

3.5

%

 

$

5,638,115

 

0.9

%

Money market and other

 

6,339,467

 

 

6,484,677

 

(2.2

)%

 

 

5,786,697

 

9.6

%

Saving deposits

 

326,927

 

 

321,373

 

1.7

%

 

 

308,651

 

5.9

%

Time deposits

 

2,673,244

 

 

2,210,815

 

20.9

%

 

 

2,992,767

 

(10.7

)%

Total deposit balances

$

15,029,630

 

$

14,515,128

 

3.5

%

 

$

14,726,230

 

2.1

%

Following is the deposit composition as a percentage of total deposits and a breakdown of cost of deposits as of and for the quarters ended June 30, 2022, March 31, 2022 and June 30, 2021:

 

Deposit Breakdown

 

Cost of Deposits

(unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

 

Q2 2022

 

Q1 2022

 

Q2 2021

Noninterest bearing demand deposits

37.9

%

 

37.9

%

 

38.3

%

 

%

 

%

 

%

Money market and other

42.2

%

 

44.7

%

 

39.2

%

 

0.54

%

 

0.36

%

 

0.43

%

Saving deposits

2.1

%

 

2.2

%

 

2.1

%

 

1.16

%

 

1.18

%

 

1.15

%

Time deposits

17.8

%

 

15.2

%

 

20.4

%

 

0.46

%

 

0.32

%

 

0.49

%

Total deposit balances

100.0

%

 

100.0

%

 

100.0

%

 

0.33

%

 

0.24

%

 

0.30

%

Allowance for Credit Losses

For the 2022 second quarter, the Company recorded a provision for credit losses of $3.2 million, compared with a negative provision for credit losses of $11.0 million in the preceding first quarter and a negative provision for credit losses of $7.0 million in the 2021 second quarter.

Following is the allowance for credit losses and allowance coverage ratios as of June 30, 2022, March 31, 2022 and June 30, 2021:

(dollars in thousands) (unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

Allowance for credit losses

$

151,580

 

 

$

147,450

 

 

$

189,452

 

Allowance for credit loss/loans receivable

 

1.04

%

 

 

1.05

%

 

 

1.41

%

Allowance for credit losses/nonperforming loans

 

139.63

%

 

 

146.92

%

 

 

113.36

%

Credit Quality

Following are the components of nonperforming assets as of June 30, 2022, March 31, 2022 and June 30, 2021:

(dollars in thousands) (unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

Loans on nonaccrual status (1)

$

69,522

 

$

52,717

 

$

111,008

Delinquent loans 90 days or more on accrual status

 

12,468

 

 

3,090

 

 

4,759

Accruing troubled debt restructured loans

 

26,572

 

 

44,555

 

 

51,360

Total nonperforming loans

 

108,562

 

 

100,362

 

 

167,127

Other real estate owned

 

2,010

 

 

2,010

 

 

16,619

Total nonperforming assets

$

110,572

 

$

102,372

 

$

183,746

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.2 million, $17.0 million and $23.6 million, at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

Total nonperforming assets at June 30, 2022 increased to $110.6 million from $102.4 million at March 31, 2022 but decreased from $183.7 million at June 30, 2021. Quarter-over-quarter, the increase in total nonperforming assets reflects higher balances of nonaccrual loans and delinquent loans 90 days or more on accrual status, partially offset by a reduction in accruing troubled debt restructured loans. During the quarter, an $18.6 million relationship migrated to nonaccrual status. Of the delinquent loans 90 days or more on accrual status as of June 30, 2022, $10.7 million represented loans that were addressed in the first week of July 2022 through renewals of maturing loans and pay offs. On a year-over-year basis, the decrease in total nonperforming assets reflects reductions in nonaccrual loans, accruing troubled debt restructured loans and other real estate owned, partially offset by an increase in delinquent loans 90 days or more on accrual status.

Following are net (recoveries) charge offs and net (recoveries) charge offs to average loans receivable on an annualized basis for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021:

(dollars in thousands) (unaudited)

For the Three Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

Net (recoveries) charge offs

$

(930

)

 

$

(17,900

)

 

$

11,491

 

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

 

(0.03

)%

 

 

(0.52

)%

 

 

0.35

%

Following are the components of criticized loan balances as of June 30, 2022, March 31, 2022 and June 30, 2021:

(dollars in thousands) (unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

Special mention

$

95,797

 

$

166,958

 

$

294,559

Substandard

 

244,748

 

 

226,661

 

 

380,955

Total criticized loans

$

340,545

 

$

393,619

 

$

675,514

The Company noted that the decreases in criticized loan balances at June 30, 2022 largely reflects previously COVID-19 modified loans that were upgraded following the receipt of updated financial statements.

Capital

At June 30, 2022, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. Following are capital ratios for the Company as of June 30, 2022, March 31, 2022 and June 30, 2021:

Hope Bancorp, Inc. (unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

 

Minimum Guideline for “Well-Capitalized” Bank

Common Equity Tier 1 Capital

10.70

%

 

11.02

%

 

11.44

%

 

6.50

%

Tier 1 Leverage Ratio

10.32

%

 

10.37

%

 

10.43

%

 

5.00

%

Tier 1 Risk-Based Ratio

11.33

%

 

11.68

%

 

12.14

%

 

8.00

%

Total Risk-Based Ratio

12.14

%

 

12.49

%

 

13.16

%

 

10.00

%

Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of June 30, 2022, March 31, 2022 and June 30, 2021:

(unaudited)

6/30/2022

 

3/31/2022

 

6/30/2021

Tangible common equity per share (1)

$12.80

 

$13.04

 

$13.10

Tangible common equity to tangible assets (1)

8.68%

 

9.05%

 

9.53%

(1)

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

Non-GAAP Financial Metrics

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

Investor Conference Call

The Company previously announced that it will host an investor conference call on Wednesday, July 20, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its second quarter ended June 30, 2022. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through July 27, 2022, replay access code 7509556.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $18.09 billion in total assets as of June 30, 2022. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Forward-Looking Statements

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

Hope Bancorp, Inc.

Selected Financial Data

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

 

Assets:

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

Cash and due from banks

$

197,062

 

 

$

280,373

 

 

(30

) %

 

$

836,957

 

 

(76

)%

Investment securities

 

2,352,997

 

 

 

2,492,486

 

 

(6

)%

 

 

2,274,170

 

 

3

%

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

 

87,109

 

 

 

87,201

 

 

%

 

 

94,550

 

 

(8

)%

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

 

76,376

 

 

 

115,756

 

 

(34

)%

 

 

54,245

 

 

41

%

Loans receivable

 

14,546,049

 

 

 

14,066,674

 

 

3

%

 

 

13,424,301

 

 

8

%

Allowance for credit losses

 

(151,580

)

 

 

(147,450

)

 

3

%

 

 

(189,452

)

 

(20

)%

Net loans receivable

 

14,394,469

 

 

 

13,919,224

 

 

3

%

 

 

13,234,849

 

 

9

%

Accrued interest receivable

 

37,845

 

 

 

37,949

 

 

%

 

 

51,886

 

 

(27

)%

Premises and equipment, net

 

46,093

 

 

 

45,642

 

 

1

%

 

 

45,302

 

 

2

%

Bank owned life insurance

 

77,692

 

 

 

77,390

 

 

%

 

 

76,428

 

 

2

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

11,215

 

 

 

10,874

 

 

3

%

 

 

11,566

 

 

(3

)%

Other intangible assets, net

 

6,698

 

 

 

7,184

 

 

(7

)%

 

 

8,689

 

 

(23

) %

Other assets

 

337,056

 

 

 

265,285

 

 

27

%

 

 

316,535

 

 

6

%

Total assets

$

18,089,062

 

 

$

17,803,814

 

 

2

%

 

$

17,469,627

 

 

4

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,029,630

 

 

$

14,515,128

 

 

4

%

 

$

14,726,230

 

 

2

%

FHLB and FRB borrowings

 

573,000

 

 

 

772,000

 

 

(26

)%

 

 

200,000

 

 

187

%

Convertible notes, net

 

216,678

 

 

 

216,444

 

 

%

 

 

215,739

 

 

%

Subordinated debentures

 

105,953

 

 

 

105,652

 

 

%

 

 

104,762

 

 

1

%

Accrued interest payable

 

4,112

 

 

 

4,826

 

 

(15

)%

 

 

4,946

 

 

(17

)%

Other liabilities

 

159,320

 

 

 

148,707

 

 

7

%

 

 

125,080

 

 

27

%

Total liabilities

$

16,088,693

 

 

$

15,762,757

 

 

2

%

 

$

15,376,757

 

 

5

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

136

 

 

1

%

Capital surplus

 

1,424,891

 

 

 

1,422,602

 

 

%

 

 

1,418,135

 

 

%

Retained earnings

 

1,011,715

 

 

 

976,483

 

 

4

%

 

 

859,548

 

 

18

%

Treasury stock, at cost

 

(264,667

)

 

 

(250,000

)

 

(6

)%

 

 

(200,000

)

 

(32

)%

Accumulated other comprehensive (loss) gain, net

 

(171,707

)

 

 

(108,165

)

 

(59

)%

 

 

15,051

 

 

N/A

 

Total stockholders’ equity

 

2,000,369

 

 

 

2,041,057

 

 

(2

)%

 

 

2,092,870

 

 

(4

)%

Total liabilities and stockholders’ equity

$

18,089,062

 

 

$

17,803,814

 

 

2

%

 

$

17,469,627

 

 

4

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

119,473,939

 

 

 

120,327,689

 

 

 

 

 

123,673,832

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

16,343,849

 

 

 

 

 

12,661,581

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

Three Months Ended

 

Six Months Ended

 

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

 

6/30/2022

 

6/30/2021

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

145,024

 

 

$

132,672

 

 

9

%

 

$

131,823

 

 

10

%

 

$

277,696

 

 

$

261,559

 

 

6

%

Interest on investment securities

 

12,308

 

 

 

11,656

 

 

6

%

 

 

7,713

 

 

60

%

 

 

23,964

 

 

 

15,628

 

 

53

%

Interest on federal funds sold and other investments

 

492

 

 

 

544

 

 

(10

)%

 

 

668

 

 

(26

)%

 

 

1,036

 

 

 

1,310

 

 

(21

)%

Total interest income

 

157,824

 

 

 

144,872

 

 

9

%

 

 

140,204

 

 

13

%

 

 

302,696

 

 

 

278,497

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

12,220

 

 

 

8,676

 

 

41

%

 

 

10,696

 

 

14

%

 

 

20,896

 

 

 

23,466

 

 

(11

)%

Interest on other borrowings and convertible notes

 

4,066

 

 

 

3,020

 

 

35

%

 

 

2,931

 

 

39

%

 

 

7,086

 

 

 

5,875

 

 

21

%

Total interest expense

 

16,286

 

 

 

11,696

 

 

39

%

 

 

13,627

 

 

20

%

 

 

27,982

 

 

 

29,341

 

 

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

141,538

 

 

 

133,176

 

 

6

%

 

 

126,577

 

 

12

%

 

 

274,714

 

 

 

249,156

 

 

10

%

Provision (credit) for credit losses

 

3,200

 

 

 

(11,000

)

 

N/A

 

 

 

(7,000

)

 

N/A

 

 

 

(7,800

)

 

 

(3,700

)

 

111

%

Net interest income after provision (credit) for credit losses

 

138,338

 

 

 

144,176

 

 

(4

)%

 

 

133,577

 

 

4

%

 

 

282,514

 

 

 

252,856

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,270

 

 

 

1,974

 

 

15

%

 

 

1,777

 

 

28

%

 

 

4,244

 

 

 

3,567

 

 

19

%

International service fees

 

744

 

 

 

794

 

 

(6

)%

 

 

795

 

 

(6

)%

 

 

1,538

 

 

 

1,636

 

 

(6

)%

Loan servicing fees, net

 

843

 

 

 

836

 

 

1

%

 

 

934

 

 

(10

)%

 

 

1,679

 

 

 

1,978

 

 

(15

)%

Wire transfer fees

 

858

 

 

 

900

 

 

(5

)%

 

 

923

 

 

(7

)%

 

 

1,758

 

 

 

1,767

 

 

(1

)%

Net gains on sales of SBA loans

 

5,804

 

 

 

5,603

 

 

4

%

 

 

2,375

 

 

144

%

 

 

11,407

 

 

 

2,375

 

 

380

%

Net gains on sales of residential mortgage loans

 

76

 

 

 

757

 

 

(90

)%

 

 

1,028

 

 

(93

)%

 

 

833

 

 

 

3,124

 

 

(73

)%

Net losses on sales of other loans

 

(547

)

 

 

 

 

100

%

 

 

 

 

100

%

 

 

(547

)

 

 

 

 

100

%

Other income and fees

 

2,698

 

 

 

2,322

 

 

16

%

 

 

3,244

 

 

(17

)%

 

 

5,020

 

 

 

5,433

 

 

(8

)%

Total noninterest income

 

12,746

 

 

 

13,186

 

 

(3

)%

 

 

11,076

 

 

15

%

 

 

25,932

 

 

 

19,880

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

51,058

 

 

 

47,745

 

 

7

%

 

 

42,309

 

 

21

%

 

 

98,803

 

 

 

83,525

 

 

18

%

Occupancy

 

7,178

 

 

 

7,335

 

 

(2

)%

 

 

7,067

 

 

2

%

 

 

14,513

 

 

 

14,034

 

 

3

%

Furniture and equipment

 

4,778

 

 

 

4,644

 

 

3

%

 

 

4,822

 

 

(1

)%

 

 

9,422

 

 

 

9,008

 

 

5

%

Advertising and marketing

 

2,226

 

 

 

1,636

 

 

36

%

 

 

2,097

 

 

6

%

 

 

3,862

 

 

 

3,722

 

 

4

%

Data processing and communications

 

2,893

 

 

 

2,461

 

 

18

%

 

 

2,411

 

 

20

%

 

 

5,354

 

 

 

5,148

 

 

4

%

Professional fees

 

1,582

 

 

 

2,211

 

 

(28

)%

 

 

4,395

 

 

(64

)%

 

 

3,793

 

 

 

7,298

 

 

(48

)%

FDIC assessment

 

1,450

 

 

 

1,569

 

 

(8

)%

 

 

1,284

 

 

13

%

 

 

3,019

 

 

 

2,539

 

 

19

%

Credit related expenses

 

2,872

 

 

 

1,112

 

 

158

%

 

 

43

 

 

6,579

%

 

 

3,984

 

 

 

2,261

 

 

76

%

OREO expense

 

5

 

 

 

357

 

 

(99

)%

 

 

298

 

 

(98

)%

 

 

362

 

 

 

579

 

 

(37

)%

Software impairment

 

 

 

 

 

 

%

 

 

2,146

 

 

(100

)%

 

 

 

 

 

2,146

 

 

(100

)%

Other

 

6,323

 

 

 

6,303

 

 

%

 

 

6,251

 

 

1

%

 

 

12,626

 

 

 

13,294

 

 

(5

)%

Total noninterest expense

 

80,365

 

 

 

75,373

 

 

7

%

 

 

73,123

 

 

10

%

 

 

155,738

 

 

 

143,554

 

 

8

%

Income before income taxes

 

70,719

 

 

 

81,989

 

 

(14

)%

 

 

71,530

 

 

(1

)%

 

 

152,708

 

 

 

129,182

 

 

18

%

Income tax provision

 

18,631

 

 

 

21,251

 

 

(12

)%

 

 

17,767

 

 

5

%

 

 

39,882

 

 

 

31,732

 

 

26

%

Net income

$

52,088

 

 

$

60,738

 

 

(14

)%

 

$

53,763

 

 

(3

)%

 

$

112,826

 

 

$

97,450

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Basic

$

0.43

 

 

$

0.51

 

 

 

 

$

0.44

 

 

 

 

$

0.94

 

 

$

0.79

 

 

 

Earnings Per Common Share - Diluted

$

0.43

 

 

$

0.50

 

 

 

 

$

0.43

 

 

 

 

$

0.93

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

120,219,919

 

 

 

120,131,380

 

 

 

 

 

123,592,695

 

 

 

 

 

120,175,894

 

 

 

123,459,461

 

 

 

Weighted Average Shares Outstanding - Diluted

 

120,699,638

 

 

 

121,089,474

 

 

 

 

 

124,323,888

 

 

 

 

 

120,898,605

 

 

 

124,334,227

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

(Annualized)

 

For the Six Months Ended

(Annualized)

Profitability measures:

6/30/2022

 

3/31/2022

 

6/30/2021

 

6/30/2022

 

6/30/2021

ROA

1.17

%

 

1.37

%

 

1.25

%

 

1.27

%

 

1.14

%

ROE

10.33

%

 

11.62

%

 

10.41

%

 

10.99

%

 

9.48

%

ROA (PPNR) (1)

1.65

%

 

1.60

%

 

1.50

%

 

1.63

%

 

1.46

%

ROE (PPNR) (1)

14.66

%

 

13.58

%

 

12.49

%

 

14.11

%

 

12.20

%

ROTCE (2)

13.48

%

 

15.01

%

 

13.50

%

 

14.27

%

 

12.31

%

Net interest margin

3.36

%

 

3.21

%

 

3.11

%

 

3.28

%

 

3.09

%

Efficiency ratio

52.09

%

 

51.50

%

 

53.12

%

 

51.80

%

 

53.36

%

Noninterest expense / average assets

1.80

%

 

1.70

%

 

1.70

%

 

1.75

%

 

1.68

%

 

 

 

 

 

 

 

 

 

 

(1)

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

(2)

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

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,327,476

 

$

145,024

 

4.06

%

 

$

13,871,974

 

$

132,672

 

3.88

%

 

$

13,293,591

 

$

131,823

 

3.98

%

Investment securities

 

2,424,454

 

 

12,308

 

2.04

%

 

 

2,621,220

 

 

11,656

 

1.80

%

 

 

2,253,135

 

 

7,713

 

1.37

%

FHLB stock and other investments

 

134,055

 

 

492

 

1.47

%

 

 

352,774

 

 

544

 

0.63

%

 

 

759,182

 

 

668

 

0.35

%

Total interest earning assets

$

16,885,985

 

$

157,824

 

3.75

%

 

$

16,845,968

 

$

144,872

 

3.49

%

 

$

16,305,908

 

$

140,204

 

3.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

6,487,890

 

$

8,655

 

0.54

%

 

$

6,337,866

 

$

5,701

 

0.36

%

 

$

5,484,047

 

$

5,909

 

0.43

%

Savings

 

323,114

 

 

937

 

1.16

%

 

 

318,508

 

 

927

 

1.18

%

 

 

308,530

 

 

887

 

1.15

%

Time deposits

 

2,277,938

 

 

2,628

 

0.46

%

 

 

2,619,491

 

 

2,048

 

0.32

%

 

 

3,222,457

 

 

3,900

 

0.49

%

Total interest bearing deposits

 

9,088,942

 

 

12,220

 

0.54

%

 

 

9,275,865

 

 

8,676

 

0.38

%

 

 

9,015,034

 

 

10,696

 

0.48

%

FHLB and FRB borrowings

 

577,966

 

 

1,457

 

1.01

%

 

 

242,556

 

 

687

 

1.15

%

 

 

202,198

 

 

631

 

1.25

%

Convertible notes, net

 

216,540

 

 

1,322

 

2.42

%

 

 

216,305

 

 

1,323

 

2.45

%

 

 

215,599

 

 

1,323

 

2.43

%

Subordinated debentures

 

101,880

 

 

1,287

 

5.00

%

 

 

101,577

 

 

1,010

 

3.98

%

 

 

100,701

 

 

977

 

3.84

%

Total interest bearing liabilities

$

9,985,328

 

$

16,286

 

0.65

%

 

$

9,836,303

 

$

11,696

 

0.48

%

 

$

9,533,532

 

$

13,627

 

0.57

%

Noninterest bearing demand deposits

 

5,715,830

 

 

 

 

 

 

5,672,768

 

 

 

 

 

 

5,445,457

 

 

 

 

Total funding liabilities/cost of funds

$

15,701,158

 

 

 

0.42

%

 

$

15,509,071

 

 

 

0.31

%

 

$

14,978,989

 

 

 

0.36

%

Net interest income/net interest spread

 

 

$

141,538

 

3.10

%

 

 

 

$

133,176

 

3.01

%

 

 

 

$

126,577

 

2.88

%

Net interest margin

 

 

 

 

3.36

%

 

 

 

 

 

3.21

%

 

 

 

 

 

3.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,715,830

 

$

 

%

 

$

5,672,768

 

$

 

%

 

$

5,445,457

 

$

 

%

Interest bearing deposits

 

9,088,942

 

 

12,220

 

0.54

%

 

 

9,275,865

 

 

8,676

 

0.38

%

 

 

9,015,034

 

 

10,696

 

0.48

%

Total deposits

$

14,804,772

 

$

12,220

 

0.33

%

 

$

14,948,633

 

$

8,676

 

0.24

%

 

$

14,460,491

 

$

10,696

 

0.30

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

6/30/2022

 

6/30/2021

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,100,983

 

$

277,696

 

3.97

%

 

$

13,319,782

 

$

261,559

 

3.96

%

Investment securities

 

2,522,293

 

 

23,964

 

1.92

%

 

 

2,260,233

 

 

15,628

 

1.39

%

FHLB stock and other investments

 

242,810

 

 

1,036

 

0.86

%

 

 

700,115

 

 

1,310

 

0.38

%

Total interest earning assets

$

16,866,086

 

$

302,696

 

3.62

%

 

$

16,280,130

 

$

278,497

 

3.45

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

6,413,292

 

$

14,355

 

0.45

%

 

$

5,370,941

 

$

11,399

 

0.43

%

Savings

 

320,824

 

 

1,865

 

1.17

%

 

 

304,877

 

 

1,757

 

1.16

%

Time deposits

 

2,447,771

 

 

4,676

 

0.39

%

 

 

3,493,278

 

 

10,310

 

0.60

%

Total interest bearing deposits

 

9,181,887

 

 

20,896

 

0.46

%

 

 

9,169,096

 

 

23,466

 

0.52

%

FHLB and FRB borrowings

 

411,187

 

 

2,144

 

1.05

%

 

 

209,006

 

 

1,273

 

1.23

%

Convertible notes, net

 

216,423

 

 

2,644

 

2.43

%

 

 

215,302

 

 

2,645

 

2.44

%

Subordinated debentures

 

101,729

 

 

2,298

 

4.49

%

 

 

100,547

 

 

1,957

 

3.87

%

Total interest bearing liabilities

$

9,911,226

 

$

27,982

 

0.57

%

 

$

9,693,951

 

$

29,341

 

0.61

%

Noninterest bearing demand deposits

 

5,694,418

 

 

 

 

 

 

5,250,080

 

 

 

 

Total funding liabilities/cost of funds

$

15,605,644

 

 

 

0.36

%

 

$

14,944,031

 

 

 

0.40

%

Net interest income/net interest spread

 

 

$

274,714

 

3.05

%

 

 

 

$

249,156

 

2.84

%

Net interest margin

 

 

 

 

3.28

%

 

 

 

 

 

3.09

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,694,418

 

$

 

%

 

$

5,250,080

 

$

 

%

Interest bearing deposits

 

9,181,887

 

 

20,896

 

0.46

%

 

 

9,169,096

 

 

23,466

 

0.52

%

Total deposits

$

14,876,305

 

$

20,896

 

0.28

%

 

$

14,419,176

 

$

23,466

 

0.33

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

Six Months Ended

AVERAGE BALANCES:

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

 

6/30/2022

 

6/30/2021

 

% change

Loans, including loans held for sale

$

14,327,476

 

 

$

13,871,974

 

 

3

%

 

$

13,293,591

 

 

8

%

 

$

14,100,983

 

$

13,319,782

 

6

%

Investments

 

2,558,509

 

 

 

2,973,994

 

 

(14

)%

 

 

3,012,317

 

 

(15

)%

 

 

2,765,103

 

 

2,960,348

 

(7

)%

Interest earning assets

 

16,885,985

 

 

 

16,845,968

 

 

%

 

 

16,305,908

 

 

4

%

 

 

16,866,086

 

 

16,280,130

 

4

%

Total assets

 

17,876,945

 

 

 

17,742,402

 

 

1

%

 

 

17,164,893

 

 

4

%

 

 

17,810,045

 

 

17,140,286

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

9,088,942

 

 

 

9,275,865

 

 

(2

)%

 

 

9,015,034

 

 

1

%

 

 

9,181,887

 

 

9,169,096

 

%

Interest bearing liabilities

 

9,985,328

 

 

 

9,836,303

 

 

2

%

 

 

9,533,532

 

 

5

%

 

 

9,911,226

 

 

9,693,951

 

2

%

Noninterest bearing demand deposits

 

5,715,830

 

 

 

5,672,768

 

 

1

%

 

 

5,445,457

 

 

5

%

 

 

5,694,418

 

 

5,250,080

 

8

%

Stockholders’ equity

 

2,016,577

 

 

 

2,090,755

 

 

(4

)%

 

 

2,066,016

 

 

(2

)%

 

 

2,053,461

 

 

2,056,812

 

%

Net interest earning assets

 

6,900,657

 

 

 

7,009,665

 

 

(2

)%

 

 

6,772,376

 

 

2

%

 

 

6,954,860

 

 

6,586,179

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

 

 

 

 

 

 

Commercial loans

$

4,395,738

 

 

$

4,124,715

 

 

7

%

 

$

4,001,423

 

 

10

%

 

 

 

 

 

 

Real estate loans

 

9,335,020

 

 

 

9,262,305

 

 

1

%

 

 

8,832,276

 

 

6

%

 

 

 

 

 

 

Consumer and other loans

 

815,291

 

 

 

679,654

 

 

20

%

 

 

590,602

 

 

38

%

 

 

 

 

 

 

Loans, net of deferred loan fees and costs

 

14,546,049

 

 

 

14,066,674

 

 

3

%

 

 

13,424,301

 

 

8

%

 

 

 

 

 

 

Allowance for credit losses

 

(151,580

)

 

 

(147,450

)

 

3

%

 

 

(189,452

)

 

(20

)%

 

 

 

 

 

 

Loans receivable, net

$

14,394,469

 

 

$

13,919,224

 

 

3

%

 

$

13,234,849

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

 

 

 

 

 

 

Retail buildings

$

2,603,516

 

 

$

2,598,373

 

 

%

 

$

2,361,891

 

 

10

%

 

 

 

 

 

 

Hotels/motels

 

1,143,982

 

 

 

1,208,217

 

 

(5

)%

 

 

1,439,770

 

 

(21

)%

 

 

 

 

 

 

Gas stations/car washes

 

1,080,777

 

 

 

1,055,383

 

 

2

%

 

 

954,394

 

 

13

%

 

 

 

 

 

 

Mixed-use facilities

 

833,342

 

 

 

872,362

 

 

(4

)%

 

 

798,373

 

 

4

%

 

 

 

 

 

 

Warehouses

 

1,279,647

 

 

 

1,263,791

 

 

1

%

 

 

1,149,393

 

 

11

%

 

 

 

 

 

 

Multifamily

 

989,840

 

 

 

841,316

 

 

18

%

 

 

575,943

 

 

72

%

 

 

 

 

 

 

Other

 

1,403,916

 

 

 

1,422,863

 

 

(1

)%

 

 

1,552,512

 

 

(10

)%

 

 

 

 

 

 

Total

$

9,335,020

 

 

$

9,262,305

 

 

1

%

 

$

8,832,276

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION

6/30/2022

 

3/31/2022

 

% change

 

6/30/2021

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,689,992

 

 

$

5,498,263

 

 

3

%

 

$

5,638,115

 

 

1

%

 

 

 

 

 

 

Money market and other

 

6,339,467

 

 

 

6,484,677

 

 

(2

)%

 

 

5,786,697

 

 

10

%

 

 

 

 

 

 

Saving deposits

 

326,927

 

 

 

321,373

 

 

2

%

 

 

308,651

 

 

6

%

 

 

 

 

 

 

Time deposits

 

2,673,244

 

 

 

2,210,815

 

 

21

%

 

 

2,992,767

 

 

(11

)%

 

 

 

 

 

 

Total deposit balances

$

15,029,630

 

 

$

14,515,128

 

 

4

%

 

$

14,726,230

 

 

2

%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS:

6/30/2022

 

3/31/2022

 

6/30/2021

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,000,369

 

 

$

2,041,057

 

 

$

2,092,870

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

10.70

%

 

 

11.02

%

 

 

11.44

%

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio

 

11.33

%

 

 

11.68

%

 

 

12.14

%

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

12.14

%

 

 

12.49

%

 

 

13.16

%

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

10.32

%

 

 

10.37

%

 

 

10.43

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

16,059,739

 

 

$

15,393,639

 

 

$

14,354,682

 

 

 

 

 

 

 

 

 

Book value per common share

$

16.74

 

 

$

16.96

 

 

$

16.92

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

8.68

%

 

 

9.05

%

 

 

9.53

%

 

 

 

 

 

 

 

 

Tangible common equity per share (1)

$

12.80

 

 

$

13.04

 

 

$

13.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

6/30/2022

 

6/30/2021

Balance at beginning of period

$

147,450

 

 

$

140,550

 

 

$

136,774

 

 

$

189,452

 

 

$

207,943

 

 

$

140,550

 

 

$

206,741

 

Provision (credit) for credit losses

 

3,200

 

 

 

(11,000

)

 

 

1,500

 

 

 

(10,000

)

 

 

(7,000

)

 

 

(7,800

)

 

 

(3,700

)

Recoveries

 

1,642

 

 

 

19,403

 

 

 

3,615

 

 

 

1,906

 

 

 

1,301

 

 

 

21,045

 

 

 

2,724

 

Charge offs

 

(712

)

 

 

(1,503

)

 

 

(1,339

)

 

 

(44,584

)

 

 

(12,792

)

 

 

(2,215

)

 

 

(16,313

)

Balance at end of period

$

151,580

 

 

$

147,450

 

 

$

140,550

 

 

$

136,774

 

 

$

189,452

 

 

$

151,580

 

 

$

189,452

 

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

 

(0.03

)%

 

 

(0.52

)%

 

 

(0.07

)%

 

 

1.28

%

 

 

0.35

%

 

 

(0.27

)%

 

 

0.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

NET LOAN (RECOVERIES) CHARGE OFFS:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

 

6/30/2022

 

6/30/2021

Real estate loans

$

(508

)

 

$

(16,418

)

 

$

(2,352

)

 

$

40,542

 

 

$

11,281

 

 

$

(16,926

)

 

$

13,515

 

Commercial loans

 

(461

)

 

 

(1,529

)

 

 

144

 

 

 

1,117

 

 

 

181

 

 

 

(1,990

)

 

 

101

 

Consumer loans

 

39

 

 

 

47

 

 

 

(68

)

 

 

1,019

 

 

 

29

 

 

 

86

 

 

 

(27

)

Total net (recoveries) charge offs

$

(930

)

 

$

(17,900

)

 

$

(2,276

)

 

$

42,678

 

 

$

11,491

 

 

$

(18,830

)

 

$

13,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NONPERFORMING ASSETS:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

Loans on nonaccrual status (1)

$

69,522

 

 

$

52,717

 

 

$

54,616

 

 

$

54,380

 

 

$

111,008

 

Delinquent loans 90 days or more on accrual status

 

12,468

 

 

 

3,090

 

 

 

2,131

 

 

 

4,567

 

 

 

4,759

 

Accruing troubled debt restructured loans

 

26,572

 

 

 

44,555

 

 

 

52,418

 

 

 

39,509

 

 

 

51,360

 

Total nonperforming loans

 

108,562

 

 

 

100,362

 

 

 

109,165

 

 

 

98,456

 

 

 

167,127

 

Other real estate owned

 

2,010

 

 

 

2,010

 

 

 

2,597

 

 

 

15,213

 

 

 

16,619

 

Total nonperforming assets

$

110,572

 

 

$

102,372

 

 

$

111,762

 

 

$

113,669

 

 

$

183,746

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.61

%

 

 

0.58

%

 

 

0.62

%

 

 

0.64

%

 

 

1.05

%

Nonperforming assets/loans receivable & OREO

 

0.76

%

 

 

0.73

%

 

 

0.80

%

 

 

0.85

%

 

 

1.37

%

Nonperforming assets/total capital

 

5.53

%

 

 

5.02

%

 

 

5.34

%

 

 

5.48

%

 

 

8.78

%

Nonperforming loans/loans receivable

 

0.75

%

 

 

0.71

%

 

 

0.78

%

 

 

0.73

%

 

 

1.24

%

Nonaccrual loans/loans receivable

 

0.48

%

 

 

0.37

%

 

 

0.39

%

 

 

0.41

%

 

 

0.83

%

Allowance for credit losses/loans receivable

 

1.04

%

 

 

1.05

%

 

 

1.01

%

 

 

1.02

%

 

 

1.41

%

Allowance for credit losses/nonaccrual loans

 

218.03

%

 

 

279.70

%

 

 

257.34

%

 

 

251.52

%

 

 

170.67

%

Allowance for credit losses/nonperforming loans

 

139.63

%

 

 

146.92

%

 

 

128.75

%

 

 

138.92

%

 

 

113.36

%

Allowance for credit losses/nonperforming assets

 

137.09

%

 

 

144.03

%

 

 

125.76

%

 

 

120.33

%

 

 

103.11

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.2 million, $17.0 million, $19.5 million, $20.6 million, and $23.6 million, at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, and June 30, 2021, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

Real estate loans

$

53,966

 

 

$

36,655

 

 

$

39,756

 

 

$

41,673

 

 

$

95,622

 

Commercial loans

 

8,206

 

 

 

8,686

 

 

 

11,025

 

 

 

10,991

 

 

 

12,217

 

Consumer loans

 

7,350

 

 

 

7,376

 

 

 

3,835

 

 

 

1,716

 

 

 

3,169

 

Total nonaccrual loans

$

69,522

 

 

$

52,717

 

 

$

54,616

 

 

$

54,380

 

 

$

111,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

Retail buildings

$

6,337

 

 

$

24,356

 

 

$

28,483

 

 

$

11,280

 

 

$

12,110

 

Hotels/motels

 

 

 

 

 

 

 

472

 

 

 

 

 

 

 

Gas stations/car washes

 

189

 

 

 

193

 

 

 

197

 

 

 

202

 

 

 

206

 

Mixed-use facilities

 

2,837

 

 

 

2,836

 

 

 

2,846

 

 

 

7,937

 

 

 

7,967

 

Warehouses

 

4,770

 

 

 

5,321

 

 

 

5,366

 

 

 

4,908

 

 

 

14,099

 

Other (2)

 

12,439

 

 

 

11,849

 

 

 

15,054

 

 

 

15,182

 

 

 

16,978

 

Total

$

26,572

 

 

$

44,555

 

 

$

52,418

 

 

$

39,509

 

 

$

51,360

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

30 - 59 days

$

10,090

 

$

12,439

 

$

29,723

 

$

15,016

 

$

22,466

60 - 89 days

 

6,354

 

 

3,090

 

 

10,345

 

 

4,746

 

 

6,987

Total

$

16,444

 

$

15,529

 

$

40,068

 

$

19,762

 

$

29,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

Real estate loans

$

7,919

 

$

6,097

 

$

20,232

 

$

10,359

 

$

21,432

Commercial loans

 

3,397

 

 

5,003

 

 

3,057

 

 

9,377

 

 

560

Consumer loans

 

5,128

 

 

4,429

 

 

16,779

 

 

26

 

 

7,461

Total

$

16,444

 

$

15,529

 

$

40,068

 

$

19,762

 

$

29,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

6/30/2022

 

3/31/2022

 

12/31/2021

 

9/30/2021

 

6/30/2021

Special mention

$

95,797

 

$

166,958

 

$

257,194

 

$

306,766

 

$

294,559

Substandard

 

244,748

 

 

226,661

 

 

242,397

 

 

243,684

 

 

380,955

Total criticized loans

$

340,545

 

$

393,619

 

$

499,591

 

$

550,450

 

$

675,514

Hope Bancorp, Inc.

Selected Financial Data

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

 

Reconciliation of GAAP financial measures to non-GAAP financial measures

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

6/30/2022

 

6/30/2021

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

$

2,016,577

 

 

$

2,090,755

 

 

$

2,066,016

 

 

$

2,053,461

 

 

$

2,056,812

 

Less: Goodwill and core deposit intangible assets, net

 

(471,421

)

 

 

(471,921

)

 

 

(473,445

)

 

 

(471,669

)

 

 

(473,702

)

Average tangible common equity

$

1,545,156

 

 

$

1,618,834

 

 

$

1,592,571

 

 

$

1,581,792

 

 

$

1,583,110

 

 

 

 

 

 

 

 

 

 

 

Net income

$

52,088

 

 

$

60,738

 

 

$

53,763

 

 

$

112,826

 

 

$

97,450

 

Return on average tangible common equity (annualized)

 

13.48

%

 

 

15.01

%

 

 

13.50

%

 

 

14.27

%

 

 

12.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

 

 

 

TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,000,369

 

 

$

2,041,057

 

 

$

2,092,870

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(471,148

)

 

 

(471,634

)

 

 

(473,139

)

 

 

 

 

Tangible common equity

$

1,529,221

 

 

$

1,569,423

 

 

$

1,619,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

18,089,062

 

 

$

17,803,814

 

 

$

17,469,627

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(471,148

)

 

 

(471,634

)

 

 

(473,139

)

 

 

 

 

Tangible assets

$

17,617,914

 

 

$

17,332,180

 

 

$

16,996,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

119,473,939

 

 

 

120,327,689

 

 

 

123,673,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

8.68

%

 

 

9.05

%

 

 

9.53

%

 

 

 

 

Tangible common equity per share

$

12.80

 

 

$

13.04

 

 

$

13.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

6/30/2022

 

3/31/2022

 

6/30/2021

 

6/30/2022

 

6/30/2021

PRE-PROVISION NET REVENUE

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

$

141,538

 

 

$

133,176

 

 

$

126,577

 

 

$

274,714

 

 

$

249,156

 

Noninterest income

 

12,746

 

 

 

13,186

 

 

 

11,076

 

 

 

25,932

 

 

 

19,880

 

Revenue

 

154,284

 

 

 

146,362

 

 

 

137,653

 

 

 

300,646

 

 

 

269,036

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

80,365

 

 

 

75,373

 

 

 

73,123

 

 

 

155,738

 

 

 

143,554

 

Pre-provision net revenue

$

73,919

 

 

$

70,989

 

 

$

64,530

 

 

$

144,908

 

 

$

125,482

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

17,876,945

 

 

$

17,742,402

 

 

$

17,164,893

 

 

$

17,810,045

 

 

$

17,140,286

 

ROA (PPNR)

 

1.65

%

 

 

1.60

%

 

 

1.50

%

 

 

1.63

%

 

 

1.46

%

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

 

2,016,577

 

 

 

2,090,755

 

 

 

2,066,016

 

 

 

2,053,461

 

 

 

2,056,812

 

ROE (PPNR)

 

14.66

%

 

 

13.58

%

 

 

12.49

%

 

 

14.11

%

 

 

12.20

%

 

 

 

 

 

 

 

 

 

 

 

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