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Hope Bancorp Reports 2023 First 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 first quarter ended March 31, 2023.

For the three months ended March 31, 2023, net income totaled $39.1 million, or $0.33 per diluted common share. This compares with net income of $51.7 million, or $0.43 per diluted common share, in the preceding fourth quarter and $60.7 million, or $0.50 per diluted common share, in the year-ago first quarter.

“The focus this quarter was to maintain a strong balance sheet with high levels of capital and liquidity, and in this, we succeeded,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “At the close of the 2023 first quarter, total deposits grew 1% quarter-over-quarter and 9% year-over-year, underscoring the confidence that our customers have in our franchise as the largest Korean American bank in the country. Our capital levels continued to be strong and our total risk-based capital ratio increased to 12.25% at March 31, 2023. Asset quality continued to be healthy.

“From a risk management perspective, we fortified our liquidity to prudently manage through the current environment of heightened volatility due to the banking industry disruption in mid-March. We substantially increased the level of cash and cash equivalents on our balance sheet to $2.2 billion at March 31, 2023. At quarter-end, our available borrowing capacity, together with cash and cash equivalents, and unpledged investment securities, totaled $8.0 billion, equivalent to 50% of total deposits. At the same time, we continued to execute on initiatives designed to further strengthen our franchise, support long-term profitability, and create additional value for stockholders.”

Q1 2023 Highlights

  • The Company’s total risk-based capital ratio was 12.25% at March 31, 2023, up 28 basis points quarter-over-quarter.
  • Book value per common share increased to $17.17 and tangible common equity per share increased to $13.26 at March 31, 2023, both up 2% quarter-over-quarter.
  • Total deposits of $15.83 billion at March 31, 2023, increased 1% quarter-over-quarter and 9% year-over-year.
  • Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $7.99 billion, equivalent to 50% of total deposits, at March 31, 2023. This is up 11% from $7.23 billion, or 46% of total deposits, at December 31, 2022.
  • During the first quarter, the Company fortified its on-balance sheet liquidity in response to industry disruption. Cash and cash equivalents increased to $2.21 billion at March 31, 2023, up from $506.8 million as of December 31, 2022. This increase in on-balance sheet liquidity reflects the Company’s conservative approach to risk management. It was largely funded through the Federal Reserve Bank’s Bank Term Funding Program (“BTFP”). BTFP borrowings were $1.40 billion at March 31, 2023, carrying a weighted average interest rate of 4.49%.
  • The Bank’s insured or otherwise collateralized deposits totaled $9.91 billion at March 31, 2023. The Bank’s uninsured deposit ratio was 38% at March 31, 2023, a decrease from 41% at December 31, 2022. The available borrowing capacity, cash and cash equivalents, and unpledged investment securities well exceeded the Bank’s uninsured deposits at quarter-end.
  • First quarter 2023 loan originations totaled $568.7 million, led by commercial loans and followed by commercial real estate. New commercial loans accounted for 61% of total originations for the first quarter of 2023. Loans receivable of $15.06 billion at March 31, 2023, decreased 2% quarter-over-quarter and increased 7% year-over-year.

Financial Summary

 

At or for the Three Months Ended

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

3/31/2023

 

12/31/2022

 

3/31/2022

Net income

$

39,121

 

 

$

51,703

 

 

$

60,738

 

Diluted earnings per share

$

0.33

 

 

$

0.43

 

 

$

0.50

 

Net interest income before provision (credit) for credit losses

$

133,878

 

 

$

150,521

 

 

$

133,176

 

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

$

54,502

 

 

$

78,113

 

 

$

70,989

 

Loans receivable

$

15,064,849

 

 

$

15,403,540

 

 

$

14,066,674

 

Deposits

$

15,828,209

 

 

$

15,738,801

 

 

$

14,515,128

 

Total assets

$

20,568,884

 

 

$

19,164,491

 

 

$

17,803,814

 

Total equity

$

2,058,580

 

 

$

2,019,328

 

 

$

2,041,057

 

Total risk-based capital ratio

 

12.25

%

 

 

11.97

%

 

 

12.49

%

Net charge offs (recoveries)

$

108

 

 

$

6,402

 

 

$

(17,900

)

Net charge offs (recoveries)/average loans receivable

 

%

 

 

0.17

%

 

 

(0.52

) %

Allowance for credit losses

$

163,544

 

 

$

162,359

 

 

$

147,450

 

Allowance for credit losses to loans receivable

 

1.09

%

 

 

1.05

%

 

 

1.05

%

Nonperforming assets to total assets (2)

 

0.39

%

 

 

0.36

%

 

 

0.58

%

Return on average assets (“ROA”)

 

0.82

%

 

 

1.10

%

 

 

1.37

%

Return on average equity (“ROE”)

 

7.65

%

 

 

10.35

%

 

 

11.62

%

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

 

9.93

%

 

 

13.54

%

 

 

15.01

%

ROA (PPNR) (1)

 

1.14

%

 

 

1.66

%

 

 

1.60

%

ROE (PPNR) (1)

 

10.65

%

 

 

15.64

%

 

 

13.58

%

Net interest margin

 

3.02

%

 

 

3.36

%

 

 

3.21

%

Noninterest expense / average assets

 

1.89

%

 

 

1.79

%

 

 

1.70

%

Efficiency ratio

 

62.38

%

 

 

51.97

%

 

 

51.50

%

__________________

(1)

Pre-provision net revenue, ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Page 9 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 9.

(2)

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

Operating Results for the 2023 First Quarter

Net interest income before provision (credit) for credit losses for the 2023 first quarter totaled $133.9 million, compared with $150.5 million in the 2022 fourth quarter and $133.2 million in the year-ago first quarter. The Company attributed the quarter-over-quarter decrease primarily to higher interest expense on deposits, partially offset by interest income growth due to expanding earning asset yields and a 1% increase in average interest earning assets.

The net interest margin for the 2023 first quarter decreased 34 basis points to 3.02% from 3.36% in the preceding fourth quarter as the increase in the cost of deposits outpaced the expansion of the yields on interest-earning assets. Compared with the year-ago first quarter, the net interest margin decreased 19 basis points.

The weighted average yield on loans for the 2023 first quarter was 5.75%, up 39 basis points from 5.36% in the 2022 fourth quarter and up 187 basis points from the year-ago first quarter. The Company attributed the yield expansion to the repricing of its variable-rate loans following increases in market interest rates, as well as a significant increase in the average rate on new loans originated during the last four quarters. The rate on new loans originated in the 2023 first quarter was 7.53%, up 82 basis points from 6.71% in the preceding fourth quarter, and up 399 basis points from 3.54% in the year-ago first quarter.

The weighted average cost of deposits for the 2023 first quarter increased 79 basis points to 2.41% from 1.62% in the 2022 fourth quarter, reflecting customer preferences for higher yields in a rising interest rate environment, as well as the banking industry disruption in mid-March of 2023. Compared with the year-ago first quarter, the weighted average cost of deposits for the 2023 first quarter increased 217 basis points from 0.24%.

Noninterest income for the 2023 first quarter totaled $11.0 million, compared with $12.1 million in the 2022 fourth quarter and $13.2 million in the year-ago first quarter. Quarter-over-quarter, deposit service fees and net gains on SBA loan sales increased, offset by decreases in other income and fees. During the 2023 first quarter, the Company sold $40.7 million of the guaranteed portion of SBA 7(a) loans and $7.3 million of residential mortgage loans, compared with $41.2 million and $3.5 million, respectively, sold in the preceding fourth quarter.

Noninterest expense for the 2023 first quarter totaled $90.4 million, compared with $84.5 million in the preceding fourth quarter and $75.4 million in the year-ago first quarter. The quarter-over-quarter increase in noninterest expense was primarily driven by higher salaries and employee benefits expense, which reflected payroll taxes and related expenses that are typically higher in the first quarter, as well as $1.7 million of severance charges. Included in other expenses is $1.6 million of provision for unfunded loan commitments.

The Company’s efficiency ratio for the 2023 first quarter was 62.4%, compared with 52.0% in the preceding fourth quarter and 51.5% in the year-ago first quarter. Noninterest expense as a percentage of average assets was 1.89% for the 2023 first quarter, compared with 1.79% for the 2022 fourth quarter and 1.70% for the 2022 first quarter.

The effective tax rate for the 2023 first quarter was 25.9%, compared with 26.1% for the preceding fourth quarter and 25.9% for the year-ago first quarter.

Balance Sheet Summary

New loan originations during the 2023 first quarter totaled $568.7 million, compared with $793.4 million in the preceding fourth quarter and $1.03 billion in the 2022 first quarter.

The following table sets forth the components of new loan production for the quarters ended March 31, 2023, December 31, 2022 and March 31, 2022.

 

For the Three Months Ended

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

Commercial real estate

$

176,798

 

$

302,983

 

$

529,730

Commercial

 

344,194

 

 

424,340

 

 

335,756

SBA

 

29,977

 

 

28,825

 

 

56,602

Residential mortgage

 

14,317

 

 

36,720

 

 

103,473

Consumer

 

3,375

 

 

555

 

 

401

Total new loan originations

$

568,661

 

$

793,423

 

$

1,025,962

At March 31, 2023, loans receivable decreased 2% quarter-over-quarter to $15.06 billion from $15.40 billion at December 31, 2022, and increased 7% from $14.07 billion a year ago at March 31, 2022.

The following table sets forth the loan portfolio composition and percentage of total loans at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial loans

$

4,821,270

 

32.0

%

 

$

5,109,532

 

33.2

%

 

$

4,124,715

 

29.3

%

Real estate loans

 

9,373,529

 

62.2

%

 

 

9,414,580

 

61.1

%

 

 

9,262,305

 

65.9

%

Consumer and other loans

 

870,050

 

5.8

%

 

 

879,428

 

5.7

%

 

 

679,654

 

4.8

%

Loans receivable

$

15,064,849

 

100.0

%

 

$

15,403,540

 

100.0

%

 

$

14,066,674

 

100.0

%

At March 31, 2023, total deposits increased 1% to $15.83 billion, up from $15.74 billion at December 31, 2022, and increased 9% year-over-year from $14.52 billion at March 31, 2022, reflecting growth in time deposits, partially offset by lower levels of noninterest-bearing demand, money market and savings deposits in a rising interest rate environment.

The following table sets forth the deposit composition and percentage of total deposits at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

 

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Noninterest bearing demand deposits

$

4,504,621

 

28.4

%

 

$

4,849,493

 

30.8

%

 

$

5,498,263

 

37.9

%

Money market and interest bearing demand deposits

 

4,331,998

 

27.4

%

 

 

5,615,784

 

35.7

%

 

 

6,484,677

 

44.7

%

Saving deposits

 

231,704

 

1.5

%

 

 

283,464

 

1.8

%

 

 

321,373

 

2.2

%

Time deposits

 

6,759,886

 

42.7

%

 

 

4,990,060

 

31.7

%

 

 

2,210,815

 

15.2

%

Total deposits

$

15,828,209

 

100.0

%

 

$

15,738,801

 

100.0

%

 

$

14,515,128

 

100.0

%

Allowance for Credit Losses

During the 2023 first quarter, the Company built its allowance for credit losses to $163.5 million at March 31, 2023, and increased the allowance coverage to 1.09% of loans receivable. For the 2023 first quarter, the Company recorded a provision for credit losses of $1.7 million, compared with $8.2 million in the preceding fourth quarter and a negative provision for credit losses of $11.0 million in the 2022 first quarter.

The following table sets forth the allowance for credit losses and allowance coverage ratios at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

Allowance for credit losses

$

163,544

 

 

$

162,359

 

 

$

147,450

 

Allowance for credit loss/loans receivable

 

1.09

%

 

 

1.05

%

 

 

1.05

%

Credit Quality

Asset quality continued to be healthy in the 2023 first quarter. Net charge offs were only $108 thousand in the 2023 first quarter, representing an annualized net charge off ratio of 0.00% of average loans. The following table sets forth net charge offs (recoveries) and net charge offs (recoveries) to average loans receivable, annualized, for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022:

 

For the Three Months Ended

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

Net charge offs (recoveries)

$

108

 

 

$

6,402

 

 

$

(17,900

)

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

 

%

 

 

0.17

%

 

 

(0.52

) %

Nonperforming assets represented 0.39% of total assets at March 31, 2023, compared with 0.36% as of December 31, 2022, and 0.58% as of March 31, 2022. Total nonperforming assets were $80.2 million at March 31, 2023, an increase of 15% quarter-over-quarter and a decrease of 22% year-over-year. Included in nonperforming assets were loans on nonaccrual status of $78.9 million at March 31, 2023, which increased from $49.7 million at December 31, 2022. This quarter-over-quarter change was primarily driven by one large nonaccrual loan, which is expected to be resolved by mid-year with a minimal risk of loss.

The following table sets forth the components of nonperforming assets at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

Loans on nonaccrual status (1)

$

78,861

 

 

$

49,687

 

 

$

52,717

 

Delinquent loans 90 days or more on accrual status

 

364

 

 

 

401

 

 

 

3,090

 

Accruing troubled debt restructured loans (2)

 

 

 

 

16,931

 

 

 

44,555

 

Total nonperforming loans

 

79,225

 

 

 

67,019

 

 

 

100,362

 

Other real estate owned

 

938

 

 

 

2,418

 

 

 

2,010

 

Total nonperforming assets

$

80,163

 

 

$

69,437

 

 

$

102,372

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.39

%

 

 

0.36

%

 

 

0.58

%

__________________

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $7.6 million, $9.8 million and $17.0 million at March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

(2)

The Company adopted ASU 2022-02 in 2023 which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP and therefore accruing TDR loans are no longer included in nonperforming loans

Total criticized loans were $304.7 million at March 31, 2023, up from $261.3 million at December 31, 2022. Year-over-year, total criticized loans decreased 23% from $393.6 million at March 31, 2022.

Capital

The Company’s capital ratios are strong. At March 31, 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 March 31, 2023, December 31, 2022 and March 31, 2022:

(unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

 

Minimum Guideline for “Well-Capitalized” Bank

Common Equity Tier 1 Capital

10.75

%

 

10.55

%

 

11.02

%

 

6.50

%

Tier 1 Leverage Ratio

10.13

%

 

10.15

%

 

10.37

%

 

5.00

%

Tier 1 Risk-Based Ratio

11.36

%

 

11.15

%

 

11.68

%

 

8.00

%

Total Risk-Based Ratio

12.25

%

 

11.97

%

 

12.49

%

 

10.00

%

Following are the tangible common equity (“TCE”) per share and the TCE as a percentage of tangible assets at March 31, 2023, December 31, 2022 and March 31, 2022:

(unaudited)

3/31/2023

 

12/31/2022

 

3/31/2022

Tangible common equity per share (1)

$13.26

 

$12.96

 

$13.04

Tangible common equity to tangible assets (1)

7.91%

 

8.29%

 

9.05%

__________________

(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 accompanying financial information on Table Page 9. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.

Convertible Senior Notes

At March 31, 2023, the net balance of the Company’s 2.00% Convertible Senior Notes due 2038 (the “Notes”) was $206.7 million, compared with $217.1 million at December 31, 2022. The Notes have an upcoming optional put date on May 15, 2023. During the 2023 first quarter, the Company made repurchases of its Notes in the aggregate principal amount of $10.7 million. The repurchased Notes were immediately cancelled subsequent to the repurchase. These repurchases are separate from the optional put and were made through a third-party broker.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including pre-provision net revenue (“PPNR”), 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 most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, April 25, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its first quarter ended March 31, 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 May 2, 2023, replay access code 9620853.

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 $20.57 billion in total assets as of March 31, 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 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 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 and per share data)

 

Assets:

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

Cash and due from banks

$

2,212,637

 

 

$

506,776

 

 

337

%

 

$

280,373

 

 

689

%

Investment securities

 

2,231,989

 

 

 

2,243,195

 

 

%

 

 

2,492,486

 

 

(10

)%

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

 

59,962

 

 

 

61,761

 

 

(3

)%

 

 

87,201

 

 

(31

)%

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

 

125,268

 

 

 

49,245

 

 

154

%

 

 

115,756

 

 

8

%

Loans receivable

 

15,064,849

 

 

 

15,403,540

 

 

(2

)%

 

 

14,066,674

 

 

7

%

Allowance for credit losses

 

(163,544

)

 

 

(162,359

)

 

1

%

 

 

(147,450

)

 

11

%

Net loans receivable

 

14,901,305

 

 

 

15,241,181

 

 

(2

)%

 

 

13,919,224

 

 

7

%

Accrued interest receivable

 

57,021

 

 

 

55,460

 

 

3

%

 

 

37,949

 

 

50

%

Premises and equipment, net

 

47,887

 

 

 

46,859

 

 

2

%

 

 

45,642

 

 

5

%

Bank owned life insurance

 

87,842

 

 

 

77,078

 

 

14

%

 

 

77,390

 

 

14

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

11,628

 

 

 

11,628

 

 

%

 

 

10,874

 

 

7

%

Other intangible assets, net

 

5,278

 

 

 

5,726

 

 

(8

)%

 

 

7,184

 

 

(27

)%

Other assets

 

363,617

 

 

 

401,132

 

 

(9

)%

 

 

265,285

 

 

37

%

Total assets

$

20,568,884

 

 

$

19,164,491

 

 

7

%

 

$

17,803,814

 

 

16

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,828,209

 

 

$

15,738,801

 

 

1

%

 

$

14,515,128

 

 

9

%

FHLB and FRB borrowings

 

2,130,000

 

 

 

865,000

 

 

146

%

 

 

772,000

 

 

176

%

Convertible notes, net

 

206,658

 

 

 

217,148

 

 

(5

)%

 

 

216,444

 

 

(5

)%

Subordinated debentures

 

106,875

 

 

 

106,565

 

 

%

 

 

105,652

 

 

1

%

Accrued interest payable

 

53,818

 

 

 

26,668

 

 

102

%

 

 

4,826

 

 

1,015

%

Other liabilities

 

184,744

 

 

 

190,981

 

 

(3

)%

 

 

148,707

 

 

24

%

Total liabilities

$

18,510,304

 

 

$

17,145,163

 

 

8

%

 

$

15,762,757

 

 

17

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

137

 

 

%

Capital surplus

 

1,430,977

 

 

 

1,431,003

 

 

%

 

 

1,422,602

 

 

1

%

Retained earnings

 

1,106,390

 

 

 

1,083,712

 

 

2

%

 

 

976,483

 

 

13

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(250,000

)

 

(6

)%

Accumulated other comprehensive loss, net

 

(214,257

)

 

 

(230,857

)

 

7

%

 

 

(108,165

)

 

(98

)%

Total stockholders’ equity

 

2,058,580

 

 

 

2,019,328

 

 

2

%

 

 

2,041,057

 

 

1

%

Total liabilities and stockholders’ equity

$

20,568,884

 

 

$

19,164,491

 

 

7

%

 

$

17,803,814

 

 

16

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

119,865,732

 

 

 

119,495,209

 

 

 

 

 

120,327,689

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

17,382,835

 

 

 

 

 

16,343,849

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

Three Months Ended

 

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

215,935

 

$

207,958

 

4

%

 

$

132,672

 

 

63

%

Interest on investment securities

 

15,125

 

 

14,758

 

2

%

 

 

11,656

 

 

30

%

Interest on cash and deposits at other banks

 

6,641

 

 

942

 

605

%

 

 

137

 

 

4,747

%

Interest on other investments

695

579

20

%

407

71

%

Total interest income

 

238,396

 

 

224,237

 

6

%

 

 

144,872

 

 

65

%

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

94,067

 

 

63,276

 

49

%

 

 

8,676

 

 

984

%

Interest on other borrowings and convertible notes

 

10,451

 

 

10,440

 

%

 

 

3,020

 

 

246

%

Total interest expense

 

104,518

 

 

73,716

 

42

%

 

 

11,696

 

 

794

%

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

133,878

 

 

150,521

 

(11

)%

 

 

133,176

 

 

1

%

Provision (credit) for credit losses

 

1,700

 

 

8,200

 

(79

)%

 

 

(11,000

)

 

N/A

 

Net interest income after provision (credit) for credit losses

 

132,178

 

 

142,321

 

(7

)%

 

 

144,176

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,221

 

 

2,159

 

3

%

 

 

1,974

 

 

13

%

Net gains on sales of SBA loans

 

2,225

 

 

2,154

 

3

%

 

 

5,603

 

 

(60

)%

Net gains on sales of residential mortgage loans

 

64

 

 

20

 

220

%

 

 

757

 

 

(92

)%

Other income and fees

 

6,468

 

 

7,777

 

(17

)%

 

 

4,852

 

 

33

%

Total noninterest income

 

10,978

 

 

12,110

 

(9

)%

 

 

13,186

 

 

(17

)%

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

57,169

 

 

52,694

 

8

%

 

 

47,745

 

 

20

%

Occupancy

 

7,521

 

 

7,072

 

6

%

 

 

7,335

 

 

3

%

Furniture and equipment

 

5,058

 

 

5,045

 

%

 

 

4,644

 

 

9

%

Data processing and communications

 

2,822

 

 

2,860

 

(1

)%

 

 

2,461

 

 

15

%

FDIC assessment

 

1,781

 

 

1,596

 

12

%

 

 

1,569

 

 

14

%

Earnings credit rebates

 

4,427

 

 

5,002

 

(11

)%

 

 

476

 

 

830

%

Other

 

11,576

 

 

10,249

 

13

%

 

 

11,143

 

 

4

%

Total noninterest expense

 

90,354

 

 

84,518

 

7

%

 

 

75,373

 

 

20

%

Income before income taxes

 

52,802

 

 

69,913

 

(24

)%

 

 

81,989

 

 

(36

)%

Income tax provision

 

13,681

 

 

18,210

 

(25

)%

 

 

21,251

 

 

(36

)%

Net income

$

39,121

 

$

51,703

 

(24

)%

 

$

60,738

 

 

(36

)%

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Basic

$

0.33

 

$

0.43

 

 

 

$

0.51

 

 

 

Earnings Per Common Share - Diluted

$

0.33

 

$

0.43

 

 

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

119,551,247

 

 

119,483,499

 

 

 

 

120,131,380

 

 

 

Weighted Average Shares Outstanding - Diluted

 

120,242,295

 

 

120,102,665

 

 

 

 

121,089,474

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

(Annualized)

Profitability measures:

3/31/2023

 

12/31/2022

 

3/31/2022

ROA

0.82

%

 

1.10

%

 

1.37

%

ROE

7.65

%

 

10.35

%

 

11.62

%

ROA (PPNR) (1)

1.14

%

 

1.66

%

 

1.60

%

ROE (PPNR) (1)

10.65

%

 

15.64

%

 

13.58

%

ROTCE (2)

9.93

%

 

13.54

%

 

15.01

%

Net interest margin

3.02

%

 

3.36

%

 

3.21

%

Efficiency ratio

62.38

%

 

51.97

%

 

51.50

%

Noninterest expense / average assets

1.89

%

 

1.79

%

 

1.70

%

 

 

 

 

 

 

(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 Page 9 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 9.

(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. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided in the accompanying financial information on Table Page 9.

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

3/31/2023

 

12/31/2022

 

3/31/2022

 

 

 

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

$

15,235,386

 

$

215,935

 

5.75

%

 

$

15,393,843

 

$

207,958

 

5.36

%

 

$

13,871,974

 

$

132,672

 

3.88

%

Investment securities

 

2,248,479

 

 

15,125

 

2.73

%

 

 

2,254,678

 

 

14,758

 

2.60

%

 

 

2,621,220

 

 

11,656

 

1.80

%

Interest bearing cash and deposits at

other banks

 

473,344

 

 

6,641

 

5.69

%

 

 

66,075

 

 

942

 

5.66

%

 

 

284,342

 

 

137

 

0.20

%

FHLB stock and other investments

 

47,043

 

 

695

 

5.99

%

 

 

48,002

 

 

579

 

4.79

%

 

 

68,432

 

 

407

 

2.41

%

Total interest earning assets

$

18,004,252

 

$

238,396

 

5.37

%

 

$

17,762,598

 

$

224,237

 

5.01

%

 

$

16,845,968

 

$

144,872

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and interest bearing demand

$

5,341,057

 

$

43,118

 

3.27

%

 

$

5,733,448

 

$

34,991

 

2.42

%

 

$

6,337,866

 

$

5,701

 

0.36

%

Savings

 

256,194

 

 

827

 

1.31

%

 

 

297,128

 

 

968

 

1.29

%

 

 

318,508

 

 

927

 

1.18

%

Time deposits

 

5,543,369

 

 

50,122

 

3.67

%

 

 

4,276,655

 

 

27,317

 

2.53

%

 

 

2,619,491

 

 

2,048

 

0.32

%

Total interest bearing deposits

 

11,140,620

 

 

94,067

 

3.42

%

 

 

10,307,231

 

 

63,276

 

2.44

%

 

 

9,275,865

 

 

8,676

 

0.38

%

FHLB and FRB borrowings

 

676,444

 

 

6,698

 

4.02

%

 

 

838,335

 

 

6,988

 

3.31

%

 

 

242,556

 

 

687

 

1.15

%

Convertible notes, net

 

217,114

 

 

1,322

 

2.44

%

 

 

217,002

 

 

1,322

 

2.38

%

 

 

216,305

 

 

1,323

 

2.45

%

Subordinated debentures

 

102,791

 

 

2,431

 

9.46

%

 

 

102,496

 

 

2,130

 

8.13

%

 

 

101,577

 

 

1,010

 

3.98

%

Total interest bearing liabilities

$

12,136,969

 

$

104,518

 

3.49

%

 

$

11,465,064

 

$

73,716

 

2.55

%

 

$

9,836,303

 

$

11,696

 

0.48

%

Noninterest bearing demand deposits

 

4,662,139

 

 

 

 

 

 

5,174,217

 

 

 

 

 

 

5,672,768

 

 

 

 

Total funding liabilities/cost of funds

$

16,799,108

 

 

 

2.52

%

 

$

16,639,281

 

 

 

1.76

%

 

$

15,509,071

 

 

 

0.31

%

Net interest income/net interest spread

 

 

$

133,878

 

1.88

%

 

 

 

$

150,521

 

2.46

%

 

 

 

$

133,176

 

3.01

%

Net interest margin

 

 

 

 

3.02

%

 

 

 

 

 

3.36

%

 

 

 

 

 

3.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,662,139

 

$

 

%

 

$

5,174,217

 

$

 

%

 

$

5,672,768

 

$

 

%

Interest bearing deposits

 

11,140,620

 

 

94,067

 

3.42

%

 

 

10,307,231

 

 

63,276

 

2.44

%

 

 

9,275,865

 

 

8,676

 

0.38

%

Total deposits

$

15,802,759

 

$

94,067

 

2.41

%

 

$

15,481,448

 

$

63,276

 

1.62

%

 

$

14,948,633

 

$

8,676

 

0.24

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

AVERAGE BALANCES:

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

Loans, including loans held for sale

$

15,235,386

 

 

$

15,393,843

 

 

(1

) %

 

$

13,871,974

 

 

10

%

Investments

 

2,768,866

 

 

 

2,368,755

 

 

17

%

 

 

2,973,994

 

 

(7

) %

Interest earning assets

 

18,004,252

 

 

 

17,762,598

 

 

1

%

 

 

16,845,968

 

 

7

%

Total assets

 

19,087,170

 

 

 

18,863,726

 

 

1

%

 

 

17,742,402

 

 

8

%

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

11,140,620

 

 

 

10,307,231

 

 

8

%

 

 

9,275,865

 

 

20

%

Interest bearing liabilities

 

12,136,969

 

 

 

11,465,064

 

 

6

%

 

 

9,836,303

 

 

23

%

Noninterest bearing demand deposits

 

4,662,139

 

 

 

5,174,217

 

 

(10

) %

 

 

5,672,768

 

 

(18

) %

Stockholders’ equity

 

2,046,159

 

 

 

1,997,460

 

 

2

%

 

 

2,090,755

 

 

(2

) %

Net interest earning assets

 

5,867,283

 

 

 

6,297,534

 

 

(7

) %

 

 

7,009,665

 

 

(16

) %

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

Commercial loans

$

4,821,270

 

 

$

5,109,532

 

 

(6

) %

 

$

4,124,715

 

 

17

%

Real estate loans

 

9,373,529

 

 

 

9,414,580

 

 

%

 

 

9,262,305

 

 

1

%

Consumer and other loans

 

870,050

 

 

 

879,428

 

 

(1

) %

 

 

679,654

 

 

28

%

Loans, net of deferred loan fees and costs

 

15,064,849

 

 

 

15,403,540

 

 

(2

) %

 

 

14,066,674

 

 

7

%

Allowance for credit losses

 

(163,544

)

 

 

(162,359

)

 

1

%

 

 

(147,450

)

 

11

%

Loans receivable, net

$

14,901,305

 

 

$

15,241,181

 

 

(2

) %

 

$

13,919,224

 

 

7

%

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

Multi-tenant retail

$

1,817,874

 

 

$

1,866,434

 

 

(3

) %

 

$

1,851,150

 

 

(2

) %

Hotels/motels

 

900,990

 

 

 

952,579

 

 

(5

) %

 

 

1,208,217

 

 

(25

) %

Gas stations and car washes

 

1,046,528

 

 

 

1,054,720

 

 

(1

) %

 

 

1,055,383

 

 

(1

) %

Mixed-use facilities

 

818,227

 

 

 

848,417

 

 

(4

) %

 

 

872,362

 

 

(6

) %

Industrial warehouses

 

1,309,763

 

 

 

1,294,893

 

 

1

%

 

 

1,263,791

 

 

4

%

Multifamily

 

1,302,597

 

 

 

1,295,644

 

 

1

%

 

 

841,316

 

 

55

%

Single-tenant retail

706,593

718,977

(2

)%

747,223

(5

)%
Office

464,703

473,459

(2

)%

442,944

5

%

All other

 

1,006,254

 

 

 

909,457

 

 

11

%

 

 

979,919

 

 

3

%

Total real estate loans

$

9,373,529

 

 

$

9,414,580

 

 

%

 

$

9,262,305

 

 

1

%

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION

3/31/2023

 

12/31/2022

 

% change

 

3/31/2022

 

% change

Noninterest bearing demand deposits

$

4,504,621

 

 

$

4,849,493

 

 

(7

) %

 

$

5,498,263

 

 

(18

) %

Money market and interest bearing demand

 

4,331,998

 

 

 

5,615,784

 

 

(23

) %

 

 

6,484,677

 

 

(33

) %

Saving deposits

 

231,704

 

 

 

283,464

 

 

(18

) %

 

 

321,373

 

 

(28

) %

Time deposits

 

6,759,886

 

 

 

4,990,060

 

 

35

%

 

 

2,210,815

 

 

206

%

Total deposits

$

15,828,209

 

 

$

15,738,801

 

 

1

%

 

$

14,515,128

 

 

9

%

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS:

3/31/2023

 

12/31/2022

 

3/31/2022

 

 

 

 

Total stockholders’ equity

$

2,058,580

 

 

$

2,019,328

 

 

$

2,041,057

 

 

 

 

 

Common equity tier 1 ratio

 

10.75

%

 

 

10.55

%

 

 

11.02

%

 

 

 

 

Tier 1 risk-based capital ratio

 

11.36

%

 

 

11.15

%

 

 

11.68

%

 

 

 

 

Total risk-based capital ratio

 

12.25

%

 

 

11.97

%

 

 

12.49

%

 

 

 

 

Tier 1 leverage ratio

 

10.13

%

 

 

10.15

%

 

 

10.37

%

 

 

 

 

Total risk weighted assets

$

16,886,343

 

 

$

17,049,410

 

 

$

15,393,639

 

 

 

 

 

Book value per common share

$

17.17

 

 

$

16.90

 

 

$

16.96

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

7.91

%

 

 

8.29

%

 

 

9.05

%

 

 

 

 

Tangible common equity per share (1)

$

13.26

 

 

$

12.96

 

 

$

13.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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. A quantitative reconciliation 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

ALLOWANCE FOR CREDIT LOSSES CHANGES:

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Balance at beginning of period

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

147,450

 

 

$

140,550

 

ASU 2022-02 day 1 adoption impact

 

(407

)

 

 

 

 

 

 

 

 

 

 

 

 

Provision (credit) for credit losses

 

1,700

 

 

 

8,200

 

 

 

9,200

 

 

 

3,200

 

 

 

(11,000

)

Recoveries

 

387

 

 

 

3,222

 

 

 

331

 

 

 

1,642

 

 

 

19,403

 

Charge offs

 

(495

)

 

 

(9,624

)

 

 

(550

)

 

 

(712

)

 

 

(1,503

)

Balance at end of period

$

163,544

 

 

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

147,450

 

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

 

%

 

 

0.17

%

 

 

0.01

%

 

 

(0.03

)%

 

 

(0.52

)%

 

 

 

 

 

 

 

 

 

 

 

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Allowance for unfunded loan commitments

$

2,971

 

 

$

1,351

 

 

$

1,231

 

 

$

1,481

 

 

$

1,301

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Real estate loans

$

(109

)

 

$

2,022

 

 

$

9

 

 

$

(508

)

 

$

(16,418

)

Commercial loans

 

196

 

 

 

4,174

 

 

 

115

 

 

 

(461

)

 

 

(1,529

)

Consumer loans

 

21

 

 

 

206

 

 

 

95

 

 

 

39

 

 

 

47

 

Total net charge offs (recoveries)

$

108

 

 

$

6,402

 

 

$

219

 

 

$

(930

)

 

$

(17,900

)

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NONPERFORMING ASSETS:

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Loans on nonaccrual status (1)

$

78,861

 

 

$

49,687

 

 

$

64,571

 

 

$

69,522

 

 

$

52,717

 

Delinquent loans 90 days or more on accrual status

 

364

 

 

 

401

 

 

 

5,306

 

 

 

12,468

 

 

 

3,090

 

Accruing troubled debt restructured loans (2)

 

 

 

 

16,931

 

 

 

25,631

 

 

 

26,572

 

 

 

44,555

 

Total nonperforming loans

 

79,225

 

 

 

67,019

 

 

 

95,508

 

 

 

108,562

 

 

 

100,362

 

Other real estate owned

 

938

 

 

 

2,418

 

 

 

1,480

 

 

 

2,010

 

 

 

2,010

 

Total nonperforming assets

$

80,163

 

 

$

69,437

 

 

$

96,988

 

 

$

110,572

 

 

$

102,372

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.39

%

 

 

0.36

%

 

 

0.51

%

 

 

0.61

%

 

 

0.58

%

Nonperforming assets/loans receivable & OREO

 

0.53

%

 

 

0.45

%

 

 

0.63

%

 

 

0.76

%

 

 

0.73

%

Nonperforming assets/total capital

 

3.89

%

 

 

3.44

%

 

 

4.91

%

 

 

5.53

%

 

 

5.02

%

Nonperforming loans/loans receivable

 

0.53

%

 

 

0.44

%

 

 

0.62

%

 

 

0.75

%

 

 

0.71

%

Nonaccrual loans/loans receivable

 

0.52

%

 

 

0.32

%

 

 

0.42

%

 

 

0.48

%

 

 

0.37

%

Allowance for credit losses/loans receivable

 

1.09

%

 

 

1.05

%

 

 

1.04

%

 

 

1.04

%

 

 

1.05

%

Allowance for credit losses/nonaccrual loans

 

207.38

%

 

 

326.76

%

 

 

248.66

%

 

 

218.03

%

 

 

279.70

%

Allowance for credit losses/nonperforming loans

 

206.43

%

 

 

242.26

%

 

 

168.11

%

 

 

139.63

%

 

 

146.92

%

Allowance for credit losses/nonperforming assets

 

204.01

%

 

 

233.82

%

 

 

165.55

%

 

 

137.09

%

 

 

144.03

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $7.6 million, $9.8 million, $9.9 million, $13.2 million, and $17.0 million, at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

(2) The Company adopted ASU 2022-02 in 2023 which eliminated the concept of TDR from GAAP and therefore accruing TDR loans are no longer included in nonperforming loans.

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Real estate loans

$

44,376

 

 

$

33,915

 

 

$

47,807

 

 

$

53,966

 

 

$

36,655

 

Commercial loans

 

26,191

 

 

 

5,620

 

 

 

7,675

 

 

 

8,206

 

 

 

8,686

 

Consumer loans

 

8,294

 

 

 

10,152

 

 

 

9,089

 

 

 

7,350

 

 

 

7,376

 

Total

$

78,861

 

 

$

49,687

 

 

$

64,571

 

 

$

69,522

 

 

$

52,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

30 - 59 days

$

7,662

 

$

7,049

 

$

13,092

 

$

10,090

 

$

12,439

60 - 89 days

 

249

 

 

2,243

 

 

4,933

 

 

6,354

 

 

3,090

Total

$

7,911

 

$

9,292

 

$

18,025

 

$

16,444

 

$

15,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Real estate loans

$

3,652

 

$

4,115

 

$

9,694

 

$

7,919

 

$

6,097

Commercial loans

 

419

 

 

3,300

 

 

6,165

 

 

3,397

 

 

5,003

Consumer loans

 

3,840

 

 

1,877

 

 

2,166

 

 

5,128

 

 

4,429

Total

$

7,911

 

$

9,292

 

$

18,025

 

$

16,444

 

$

15,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

3/31/2023

 

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

Special mention

$

166,472

 

$

157,263

 

$

79,399

 

$

95,797

 

$

166,958

Substandard

 

138,224

 

 

104,073

 

 

204,713

 

 

244,748

 

 

226,661

Total criticized loans

$

304,696

 

$

261,336

 

$

284,112

 

$

340,545

 

$

393,619

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 most directly comparable GAAP to non-GAAP financial measures utilized by management is provided below.

 

 

 

 

 

 

 

Three Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

3/31/2023

 

12/31/2022

 

3/31/2022

Average stockholders’ equity

$

2,046,159

 

 

$

1,997,460

 

 

$

2,090,755

 

Less: Average goodwill and core deposit intangible assets, net

 

(469,992

)

 

 

(470,442

)

 

 

(471,921

)

Average tangible common equity

$

1,576,167

 

 

$

1,527,018

 

 

$

1,618,834

 

 

 

 

 

 

 

Net income

$

39,121

 

 

$

51,703

 

 

$

60,738

 

Return on average tangible common equity (annualized)

 

9.93

%

 

 

13.54

%

 

 

15.01

%

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

3/31/2023

 

12/31/2022

 

3/31/2022

Total stockholders’ equity

$

2,058,580

 

 

$

2,019,328

 

 

$

2,041,057

 

Less: Goodwill and core deposit intangible assets, net

 

(469,728

)

 

 

(470,176

)

 

 

(471,634

)

Tangible common equity

$

1,588,852

 

 

$

1,549,152

 

 

$

1,569,423

 

 

 

 

 

 

 

Total assets

$

20,568,884

 

 

$

19,164,491

 

 

$

17,803,814

 

Less: Goodwill and core deposit intangible assets, net

 

(469,728

)

 

 

(470,176

)

 

 

(471,634

)

Tangible assets

$

20,099,156

 

 

$

18,694,315

 

 

$

17,332,180

 

 

 

 

 

 

 

Common shares outstanding

 

119,865,732

 

 

 

119,495,209

 

 

 

120,327,689

 

Tangible common equity to tangible assets

 

7.91

%

 

 

8.29

%

 

 

9.05

%

Tangible common equity per share

$

13.26

 

 

$

12.96

 

 

$

13.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

PRE-PROVISION NET REVENUE

3/31/2023

 

12/31/2022

 

3/31/2022

Net interest income before provision (credit) for credit losses

$

133,878

 

 

$

150,521

 

 

$

133,176

 

Noninterest income

 

10,978

 

 

 

12,110

 

 

 

13,186

 

Revenue

 

144,856

 

 

 

162,631

 

 

 

146,362

 

Less noninterest expense

 

90,354

 

 

 

84,518

 

 

 

75,373

 

Pre-provision net revenue

$

54,502

 

 

$

78,113

 

 

$

70,989

 

 

 

 

 

 

 

Average assets

$

19,087,170

 

 

$

18,863,726

 

 

$

17,742,402

 

ROA (PPNR)

 

1.14

%

 

 

1.66

%

 

 

1.60

%

 

 

 

 

 

 

Average stockholders’ equity

 

2,046,159

 

 

 

1,997,460

 

 

 

2,090,755

 

ROE (PPNR)

 

10.65

%

 

 

15.64

%

 

 

13.58

%

 

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