LOS ANGELES--(BUSINESS WIRE)--Hope Bancorp, Inc. (the "Company") (NASDAQ: HOPE), the holding company of Bank of Hope (the "Bank"), today reported unaudited financial results for its second quarter and six months ended June 30, 2023.
For the three months ended June 30, 2023, net income totaled $38.0 million, or $0.32 per diluted common share. This compares with net income of $39.1 million, or $0.33 per diluted common share, in the preceding first quarter. Pre-provision net revenue ("PPNR") (1) for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.
"Throughout the second quarter, we continued to maintain high levels of capital and liquidity to prudently navigate an operating environment that is challenging for regional banks," said Kevin S. Kim, Chairman, President and Chief Executive Officer. "Year-over-year, our total capital ratio increased 51 basis points to 12.64% at June 30, 2023. At the end of the 2023 second quarter, our tangible common equity ratio (1) was a robust 8.04%.
"Our asset quality remains healthy. We recorded net recoveries of $552 thousand for the 2023 second quarter, and nonperforming assets decreased 30% year-over-year. We have steadily built our allowance for credit losses, with coverage at 1.16% of loans receivable at June 30, 2023.
"Year-over-year, our loans receivable grew 2% to $14.9 billion, and our total deposits grew 4% to $15.6 billion at June 30, 2023. With Bank of Hope's strong balance sheet and continued investment in enhancing our products and services, we are focused on expanding our relationships with our customers and strengthening our market leadership in the Korean American community and beyond," said Kim.
Q2 2023 Highlights
- Capital growth. Total capital was $2.10 billion at June 30, 2023, growing 2% from March 31, 2023. The total capital ratio increased 39 basis points quarter-over-quarter to 12.64% at June 30, 2023. Book value per common share at June 30, 2023, was $17.23, and tangible common equity ("TCE") per share (1) was $13.32, up 0.3% and 0.5%, respectively, quarter-over-quarter. The TCE ratio of 8.04% as of June 30, 2023, expanded 13 basis points from March 31, 2023.
- Strong liquidity. Cash and cash equivalents increased to $2.30 billion at June 30, 2023, up from $2.21 billion at March 31, 2023. Available borrowing capacity, together with cash and cash equivalents and unpledged investment securities, totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023.
- Healthy asset quality. Nonperforming assets declined 3% quarter-over-quarter. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023. The Company recorded net recoveries of $552 thousand during the 2023 second quarter, equivalent to 0.01% annualized of average loans.
- Total deposits of $15.62 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 4% year-over-year. Uninsured deposits at June 30, 2023, represented 36% of the Bank's deposits, compared with 38% at March 31, 2023.
- Loans receivable of $14.86 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 2% year-over-year.
- Efficiency improvement. The efficiency ratio for the 2023 second quarter improved 325 basis points to 59.1% from 62.4% for the preceding first quarter.
- PPNR increase. PPNR for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.
(1) | PPNR, TCE ratio, and TCE per share are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. |
Financial Summary
At or for the Three Months Ended | ||||||||||||
(dollars in thousands, except per share data) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||
Net income | $ | 38,022 | $ | 39,121 | $ | 52,088 | ||||||
Diluted earnings per share | $ | 0.32 | $ | 0.33 | $ | 0.43 | ||||||
Net interest income before provision for credit losses | $ | 130,689 | $ | 133,878 | $ | 141,538 | ||||||
Pre-provision net revenue ("PPNR") (1) | $ | 60,370 | $ | 54,502 | $ | 73,919 | ||||||
Loans receivable | $ | 14,864,810 | $ | 15,064,849 | $ | 14,546,049 | ||||||
Deposits | $ | 15,619,352 | $ | 15,828,209 | $ | 15,029,630 | ||||||
Total assets | $ | 20,366,138 | $ | 20,568,884 | $ | 18,089,062 | ||||||
Total equity | $ | 2,067,998 | $ | 2,058,580 | $ | 2,000,369 | ||||||
Total capital ratio | 12.64 | % | 12.25 | % | 12.13 | % | ||||||
Tangible common equity ("TCE") ratio (1) | 8.04 | % | 7.91 | % | 8.68 | % | ||||||
Net recoveries (charge offs) | $ | 552 | $ | (108 | ) | $ | 930 | |||||
Net recoveries/average loans receivable (2) | 0.01 | % | - | % | 0.03 | % | ||||||
Allowance for credit losses | $ | 172,996 | $ | 163,544 | $ | 151,580 | ||||||
Allowance for credit losses to loans receivable | 1.16 | % | 1.09 | % | 1.04 | % | ||||||
Nonperforming assets to total assets (3) | 0.38 | % | 0.39 | % | 0.61 | % | ||||||
Return on average assets ("ROA") (2) | 0.74 | % | 0.82 | % | 1.17 | % | ||||||
Return on average equity ("ROE") (2) | 7.34 | % | 7.65 | % | 10.33 | % | ||||||
Return on average TCE ("ROTCE") (1) (2) | 9.49 | % | 9.93 | % | 13.48 | % | ||||||
ROA (PPNR) (1) (2) | 1.18 | % | 1.14 | % | 1.65 | % | ||||||
ROE (PPNR) (1) (2) | 11.65 | % | 10.65 | % | 14.66 | % | ||||||
Net interest margin (2) | 2.70 | % | 3.02 | % | 3.36 | % | ||||||
Noninterest expense / average assets (2) | 1.71 | % | 1.89 | % | 1.80 | % | ||||||
Efficiency ratio | 59.13 | % | 62.38 | % | 52.09 | % | ||||||
__________________
| (1) | PPNR, TCE ratio, ROTCE, ROA (PPNR), and ROE (PPNR) are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. | |
(2) | Annualized. | |
(3) | Excludes delinquent Small Business Administration ("SBA") loans that are guaranteed and currently in liquidation. |
Operating Results for the 2023 Second Quarter
Net interest income. Net interest income before provision for credit losses for the 2023 second quarter totaled $130.7 million, a decrease of 2% compared with $133.9 million in the preceding first quarter. 2023 second quarter interest income of $267.2 million increased $30.5 million quarter-over-quarter, driven by growth in average interest earning cash and deposits at other banks, as well as expanding loan yields. This was offset by higher interest expense, which increased $33.7 million quarter-over-quarter, reflecting a higher cost of interest bearing deposits and a higher volume of average borrowings.
The net interest margin for the 2023 second quarter decreased 32 basis points to 2.70%, from 3.02% in the preceding first quarter, primarily reflecting a higher cost of funds and an increase in average borrowings, partially offset by loan yield expansion and growth in average interest earning cash and deposits at other banks.
The weighted average yield on loans for the 2023 second quarter was 5.99%, up 24 basis points from 5.75% in the preceding first quarter. This reflected increases in market interest rates and a significant increase in the average rate on new loans. The average rate on new loans originated in the 2023 second quarter was 8.37%, up 84 basis points quarter-over-quarter.
The weighted average cost of total deposits for the 2023 second quarter was 2.79%, up 42 basis points from 2.37% in the preceding first quarter, reflecting higher rates paid on interest bearing deposit accounts.
Noninterest income. Noninterest income for the 2023 second quarter totaled $17.0 million, up 55% from $11.0 million in the preceding first quarter. Other income and fees for the 2023 second quarter included a $5.8 million cash distribution from a gain on an investment in an affordable housing partnership. During the 2023 second quarter, the Company sold $38.4 million of the guaranteed portion of SBA 7(a) loans and $6.6 million of residential mortgage loans, for a gain on loan sales of $2.0 million, compared with $40.7 million and $7.3 million, respectively, sold in the preceding first quarter for a gain on loan sales of $2.3 million.
Noninterest expense. Noninterest expense for the 2023 second quarter decreased 3% to $87.3 million, down from $90.4 million in the preceding first quarter. The quarter-over-quarter change was primarily driven by lower salaries and employee benefits expense, partially offset by the impact of an industry-wide increase in the FDIC assessment rate of two basis points.
The Company's efficiency ratio for the 2023 second quarter improved to 59.1% from 62.4% in the preceding first quarter. Annualized noninterest expense as a percentage of average assets was 1.71% for the 2023 second quarter, down from 1.89% for the 2023 first quarter.
Tax rate. The effective tax rate for the 2023 second quarter was 26.1%, compared with 25.9% for the preceding first quarter. The year-to-date effective tax rate for the first six months of 2023 was 26.0%.
Balance Sheet Summary
Loans. New loan originations for the 2023 second quarter totaled $490.6 million, compared with $568.7 million for the preceding first quarter. The following table sets forth the components of new loan production for the quarters ended June 30, 2023, March 31, 2023, and June 30, 2022.
For the Three Months Ended | |||||||||
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | ||||||
Commercial real estate ("CRE") loans | $ | 115,444 | $ | 176,798 | $ | 522,093 | |||
Commercial and industrial ("C&I") loans | 318,063 | 344,194 | 544,639 | ||||||
SBA loans | 38,051 | 29,977 | 35,085 | ||||||
Residential mortgage loans | 18,736 | 14,317 | 181,408 | ||||||
Other loans | 280 | 3,375 | 2,770 | ||||||
Total new loan originations | $ | 490,574 | $ | 568,661 | $ | 1,285,995 | |||
At June 30, 2023, loans receivable decreased 1% quarter-over-quarter to $14.86 billion from $15.06 billion at March 31, 2023. Year-over-year, loans receivable grew 2%, up from $14.55 billion at June 30, 2022. The following table sets forth the loan portfolio composition and percentage of total loans at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||||||||
Balance | Percentage | Balance | Percentage | Balance | Percentage | |||||||||||||
C&I loans | $ | 4,805,126 | 32.3 | % | $ | 4,821,270 | 32.0 | % | $ | 4,395,738 | 30.2 | % | ||||||
CRE loans | 9,192,160 | 61.9 | % | 9,373,529 | 62.2 | % | 9,335,020 | 64.2 | % | |||||||||
Residential mortgage and other loans | 867,524 | 5.8 | % | 870,050 | 5.8 | % | 815,291 | 5.6 | % | |||||||||
Loans receivable | $ | 14,864,810 | 100.0 | % | $ | 15,064,849 | 100.0 | % | $ | 14,546,049 | 100.0 | % | ||||||
Deposits. At June 30, 2023, total deposits decreased 1% to $15.62 billion from $15.83 billion at March 31, 2023. Year-over-year, total deposits grew 4%, up from $15.03 billion at June 30, 2022. The following table sets forth the deposit composition and percentage of total deposits at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||||||||
Balance | Percentage | Balance | Percentage | Balance | Percentage | |||||||||||||
Noninterest bearing demand deposits | $ | 4,229,247 | 27.1 | % | $ | 4,504,621 | 28.4 | % | $ | 5,689,992 | 37.9 | % | ||||||
Money market and interest bearing demand deposits | 4,188,584 | 26.8 | % | 4,331,998 | 27.4 | % | 6,339,467 | 42.2 | % | |||||||||
Savings deposits | 224,495 | 1.4 | % | 231,704 | 1.5 | % | 326,927 | 2.1 | % | |||||||||
Time deposits | 6,977,026 | 44.7 | % | 6,759,886 | 42.7 | % | 2,673,244 | 17.8 | % | |||||||||
Total deposits | $ | 15,619,352 | 100.0 | % | $ | 15,828,209 | 100.0 | % | $ | 15,029,630 | 100.0 | % | ||||||
Liquidity. At June 30, 2023, cash and cash equivalents increased to $2.30 billion from $2.21 billion at March 31, 2023, and up from $0.20 billion at June 30, 2022. Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023, and well exceeding the Bank's uninsured deposit balances.
Borrowings and Convertible Notes. Federal Home Loan Bank and Federal Reserve Bank borrowings were $2.26 billion at June 30, 2023, compared with $2.13 billion at March 31, 2023, and $0.57 billion at June 30, 2022. At the expiration of the Optional Put for the holders of the Company's 2% Convertible Senior Notes due 2038, $197 million of the principal amount was paid off on May 15, 2023, with existing cash.
Allowance for Credit Losses
For the 2023 second quarter, the Company recorded a provision for credit losses of $8.9 million, compared with $1.7 million in the preceding first quarter, building its allowance for credit losses. The allowance for credit losses increased to $173.0 million at June 30, 2023, up from $163.5 million at March 31, 2023. The allowance coverage ratio increased to 1.16% of loans receivable at June 30, 2023, up from 1.09% a quarter ago.
The following table sets forth the allowance for credit losses and allowance coverage ratios at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||
Allowance for credit losses | $ | 172,996 | $ | 163,544 | $ | 151,580 | ||||||
Allowance for credit losses/loans receivable | 1.16 | % | 1.09 | % | 1.04 | % | ||||||
Credit Quality
Asset quality continued to be healthy. The Company recorded net recoveries of $552 thousand in the 2023 second quarter, representing an annualized net recovery ratio of 0.01% of average loans. The following table sets forth net recoveries (charge offs) and net recoveries to average loans receivable, annualized, for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022:
For the Three Months Ended | ||||||||||||
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||
Net recoveries (charge offs) | $ | 552 | $ | (108 | ) | $ | 930 | |||||
Net recoveries/average loans receivable (annualized) | 0.01 | % | - | % | 0.03 | % | ||||||
Nonperforming assets. Nonperforming assets totaled $77.4 million at June 30, 2023, a decrease of 3% quarter-over-quarter, and a decrease of 30% year-over-year. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023, and down from 0.61% at June 30, 2022. Nonperforming loans decreased 4% quarter-over-quarter to $76.4 million at June 30, 2023, down from $79.2 million at March 31, 2023, and decreased 30% year-over-year from $108.6 million at June 30, 2022.
The following table sets forth the components of nonperforming assets at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||
Loans on nonaccrual status (1) | $ | 61,252 | $ | 78,861 | $ | 69,522 | ||||||
Accruing delinquent loans past due 90 days or more | 15,182 | 364 | 12,468 | |||||||||
Accruing troubled debt restructured loans (2) | - | - | 26,572 | |||||||||
Total nonperforming loans | 76,434 | 79,225 | 108,562 | |||||||||
Other real estate owned | 938 | 938 | 2,010 | |||||||||
Total nonperforming assets | $ | 77,372 | $ | 80,163 | $ | 110,572 | ||||||
Nonperforming assets/total assets | 0.38 | % | 0.39 | % | 0.61 | % | ||||||
__________________
(1) | Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million and $13.2 million at June 30, 2023, March 31, 2023, and June 30, 2022, respectively. | |
(2) | The Company adopted ASU 2022-02 in 2023, which eliminated the concept of troubled debt restructured ("TDR") loans from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans. |
Criticized loans. Total criticized loans were $345.0 million at June 30, 2023, compared with $304.7 million at March 31, 2023, and $340.5 million at June 30, 2022.
Capital
The Company's capital ratios remained strong. At June 30, 2023, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a "well-capitalized" financial institution. The following table sets forth the capital ratios for the Company at June 30, 2023, March 31, 2023, and June 30, 2022:
(unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | Minimum Guideline for
| ||||
Common Equity Tier 1 Capital Ratio | 11.06% | 10.75% | 10.69% | 6.50% | ||||
Tier 1 Capital Ratio | 11.68% | 11.36% | 11.33% | 8.00% | ||||
Total Capital Ratio | 12.64% | 12.25% | 12.13% | 10.00% | ||||
Leverage Ratio | 9.57% | 10.13% | 10.32% | 5.00% |
The following table sets forth the TCE per share and the TCE ratio at June 30, 2023, March 31, 2023, and June 30, 2022:
(unaudited) | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||
TCE per share (1) | $13.32 | $13.26 | $12.80 | |||
TCE ratio (1) | 8.04% | 7.91% | 8.68% |
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(1) | TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. |
Investor Conference Call
The Company previously announced that it will host an investor conference call on Monday, July 24, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its second quarter ended June 30, 2023. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the "Hope Bancorp Call." A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp's website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp's website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp's website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through July 31, 2023, replay access code 8610354.
Non-GAAP Financial Metrics
This news release contains certain non-GAAP financial measure disclosures, including PPNR, TCE per share, TCE ratio, ROTCE, ROA (PPNR), and ROE (PPNR). Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company's operational performance and the Company's capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $20.37 billion in total assets as of June 30, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California, Seattle and Tampa, Fla.; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate lending, commercial and industrial lending, SBA lending, and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "intends," "plans," "estimates" or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company's actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company's allowances for credit losses; regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company's most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Hope Bancorp, Inc. | ||||||||||||||||||
Selected Financial Data | ||||||||||||||||||
Unaudited (dollars in thousands, except share data) | ||||||||||||||||||
Assets: | 6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | |||||||||||||
Cash and due from banks | $ | 2,302,339 | $ | 2,212,637 | 4 | % | $ | 197,062 | 1,068 | % | ||||||||
Investment securities | 2,186,346 | 2,231,989 | (2 | )% | 2,352,997 | (7 | )% | |||||||||||
Federal Home Loan Bank ("FHLB") stock and other investments | 60,213 | 59,962 | - | % | 87,109 | (31 | )% | |||||||||||
Loans held for sale, at the lower of cost or fair value | 49,246 | 125,268 | (61 | )% | 76,376 | (36 | )% | |||||||||||
Loans receivable | 14,864,810 | 15,064,849 | (1 | )% | 14,546,049 | 2 | % | |||||||||||
Allowance for credit losses | (172,996 | ) | (163,544 | ) | 6 | % | (151,580 | ) | 14 | % | ||||||||
Net loans receivable | 14,691,814 | 14,901,305 | (1 | )% | 14,394,469 | 2 | % | |||||||||||
Accrued interest receivable | 60,118 | 57,021 | 5 | % | 37,845 | 59 | % | |||||||||||
Premises and equipment, net | 50,513 | 47,887 | 5 | % | 46,093 | 10 | % | |||||||||||
Bank owned life insurance | 88,238 | 87,842 | - | % | 77,692 | 14 | % | |||||||||||
Goodwill | 464,450 | 464,450 | - | % | 464,450 | - | % | |||||||||||
Servicing assets | 11,532 | 11,628 | (1 | )% | 11,215 | 3 | % | |||||||||||
Other intangible assets, net | 4,830 | 5,278 | (8 | )% | 6,698 | (28 | )% | |||||||||||
Other assets | 396,499 | 363,617 | 9 | % | 337,056 | 18 | % | |||||||||||
Total assets | $ | 20,366,138 | $ | 20,568,884 | (1 | )% | $ | 18,089,062 | 13 | % | ||||||||
Liabilities: | ||||||||||||||||||
Deposits | $ | 15,619,352 | $ | 15,828,209 | (1 | )% | $ | 15,029,630 | 4 | % | ||||||||
FHLB and Federal Reserve Bank ("FRB") borrowings | 2,260,000 | 2,130,000 | 6 | % | 573,000 | 294 | % | |||||||||||
Convertible notes, net | 444 | 206,658 | (100 | )% | 216,678 | (100 | )% | |||||||||||
Subordinated debentures | 107,188 | 106,875 | - | % | 105,953 | 1 | % | |||||||||||
Accrued interest payable | 109,236 | 53,818 | 103 | % | 4,112 | 2,557 | % | |||||||||||
Other liabilities | 201,920 | 184,744 | 9 | % | 159,320 | 27 | % | |||||||||||
Total liabilities | $ | 18,298,140 | $ | 18,510,304 | (1 | )% | $ | 16,088,693 | 14 | % | ||||||||
Stockholders' Equity: | ||||||||||||||||||
Common stock, $0.001 par value | $ | 137 | $ | 137 | - | % | $ | 137 | - | % | ||||||||
Additional paid-in capital | 1,433,788 | 1,430,977 | - | % | 1,424,891 | 1 | % | |||||||||||
Retained earnings | 1,127,624 | 1,106,390 | 2 | % | 1,011,715 | 11 | % | |||||||||||
Treasury stock, at cost | (264,667 | ) | (264,667 | ) | - | % | (264,667 | ) | - | % | ||||||||
Accumulated other comprehensive loss, net | (228,884 | ) | (214,257 | ) | (7 | )% | (171,707 | ) | (33 | )% | ||||||||
Total stockholders' equity | 2,067,998 | 2,058,580 | - | % | 2,000,369 | 3 | % | |||||||||||
Total liabilities and stockholders' equity | $ | 20,366,138 | $ | 20,568,884 | (1 | )% | $ | 18,089,062 | 13 | % | ||||||||
Common stock shares - authorized | 150,000,000 | 150,000,000 | 150,000,000 | |||||||||||||||
Common stock shares - outstanding | 120,014,888 | 119,865,732 | 119,473,939 | |||||||||||||||
Treasury stock shares | 17,382,835 | 17,382,835 | 17,382,835 | |||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | 6/30/2023 | 6/30/2022 | % change | ||||||||||||||||||
Interest and fees on loans | $ | 225,671 | $ | 215,935 | 5 | % | $ | 145,024 | 56 | % | $ | 441,606 | $ | 277,696 | 59 | % | |||||||||
Interest on investment securities | 15,534 | 15,125 | 3 | % | 12,308 | 26 | % | 30,659 | 23,964 | 28 | % | ||||||||||||||
Interest on cash and deposits at other banks | 25,295 | 4,922 | 414 | % | 74 | 34,082 | % | 30,217 | 211 | 14,221 | % | ||||||||||||||
Interest on other investments | 684 | 695 | (2 | )% | 418 | 64 | % | 1,379 | 825 | 67 | % | ||||||||||||||
Total interest income | 267,184 | 236,677 | 13 | % | 157,824 | 69 | % | 503,861 | 302,696 | 66 | % | ||||||||||||||
Interest on deposits | 109,724 | 92,348 | 19 | % | 12,220 | 798 | % | 202,072 | 20,896 | 867 | % | ||||||||||||||
Interest on borrowings | 26,771 | 10,451 | 156 | % | 4,066 | 558 | % | 37,222 | 7,086 | 425 | % | ||||||||||||||
Total interest expense | 136,495 | 102,799 | 33 | % | 16,286 | 738 | % | 239,294 | 27,982 | 755 | % | ||||||||||||||
Net interest income before provision (credit) for credit losses | 130,689 | 133,878 | (2 | )% | 141,538 | (8 | )% | 264,567 | 274,714 | (4 | )% | ||||||||||||||
Provision (credit) for credit losses | 8,900 | 1,700 | 424 | % | 3,200 | 178 | % | 10,600 | (7,800 | ) | N/A | ||||||||||||||
Net interest income after provision (credit) for credit losses | 121,789 | 132,178 | (8 | )% | 138,338 | (12 | )% | 253,967 | 282,514 | (10 | )% | ||||||||||||||
Service fees on deposit accounts | 2,325 | 2,221 | 5 | % | 2,270 | 2 | % | 4,546 | 4,244 | 7 | % | ||||||||||||||
Net gains on sales of SBA loans | 1,872 | 2,225 | (16 | )% | 5,804 | (68 | )% | 4,097 | 11,407 | (64 | )% | ||||||||||||||
Net gains on sales of residential mortgage loans | 82 | 64 | 28 | % | 76 | 8 | % | 146 | 833 | (82 | )% | ||||||||||||||
Other income and fees | 12,735 | 6,468 | 97 | % | 4,596 | 177 | % | 19,203 | 9,448 | 103 | % | ||||||||||||||
Total noninterest income | 17,014 | 10,978 | 55 | % | 12,746 | 33 | % | 27,992 | 25,932 | 8 | % | ||||||||||||||
Salaries and employee benefits | 52,305 | 57,169 | (9 | )% | 51,058 | 2 | % | 109,474 | 98,803 | 11 | % | ||||||||||||||
Occupancy | 6,967 | 7,521 | (7 | )% | 7,178 | (3 | )% | 14,488 | 14,513 | - | % | ||||||||||||||
Furniture and equipment | 5,393 | 5,058 | 7 | % | 4,778 | 13 | % | 10,451 | 9,422 | 11 | % | ||||||||||||||
Data processing and communications | 2,917 | 2,822 | 3 | % | 2,893 | 1 | % | 5,739 | 5,354 | 7 | % | ||||||||||||||
FDIC assessment | 4,691 | 1,781 | 163 | % | 1,450 | 224 | % | 6,472 | 3,019 | 114 | % | ||||||||||||||
Earned interest credit | 5,090 | 4,427 | 15 | % | 835 | 510 | % | 9,517 | 1,311 | 626 | % | ||||||||||||||
Other | 9,970 | 11,576 | (14 | )% | 12,173 | (18 | )% | 21,546 | 23,316 | (8 | )% | ||||||||||||||
Total noninterest expense | 87,333 | 90,354 | (3 | )% | 80,365 | 9 | % | 177,687 | 155,738 | 14 | % | ||||||||||||||
Income before income taxes | 51,470 | 52,802 | (3 | )% | 70,719 | (27 | )% | 104,272 | 152,708 | (32 | )% | ||||||||||||||
Income tax provision | 13,448 | 13,681 | (2 | )% | 18,631 | (28 | )% | 27,129 | 39,882 | (32 | )% | ||||||||||||||
Net income | $ | 38,022 | $ | 39,121 | (3 | )% | $ | 52,088 | (27 | )% | $ | 77,143 | $ | 112,826 | (32 | )% | |||||||||
Earnings Per Common Share - Basic | $ | 0.32 | $ | 0.33 | $ | 0.43 | $ | 0.64 | $ | 0.94 | |||||||||||||||
Earnings Per Common Share - Diluted | $ | 0.32 | $ | 0.33 | $ | 0.43 | $ | 0.64 | $ | 0.93 | |||||||||||||||
Weighted Average Shares Outstanding - Basic | 119,953,174 | 119,551,247 | 120,219,919 | 119,753,321 | 120,175,894 | ||||||||||||||||||||
Weighted Average Shares Outstanding - Diluted | 120,129,359 | 120,242,295 | 120,699,638 | 120,179,443 | 120,898,605 | ||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||
Selected Financial Data | |||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
Profitability measures (annualized): | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||||||||
ROA | 0.74 | % | 0.82 | % | 1.17 | % | 0.78 | % | 1.27 | % | |||||
ROE | 7.34 | % | 7.65 | % | 10.33 | % | 7.49 | % | 10.99 | % | |||||
ROA (PPNR) (1) | 1.18 | % | 1.14 | % | 1.65 | % | 1.16 | % | 1.63 | % | |||||
ROE (PPNR) (1) | 11.65 | % | 10.65 | % | 14.66 | % | 11.15 | % | 14.11 | % | |||||
ROTCE (1) | 9.49 | % | 9.93 | % | 13.48 | % | 9.70 | % | 14.27 | % | |||||
Net interest margin | 2.70 | % | 3.02 | % | 3.36 | % | 2.85 | % | 3.28 | % | |||||
Efficiency ratio (not annualized) | 59.13 | % | 62.38 | % | 52.09 | % | 60.74 | % | 51.80 | % | |||||
Noninterest expense / average assets | 1.71 | % | 1.89 | % | 1.80 | % | 1.80 | % | 1.75 | % | |||||
(1) | ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. |
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||||||||||||||||||
Average
| Interest
| Annualized
| Average
| Interest
| Annualized
| Average
| Interest
| Annualized
| |||||||||||||||||||
INTEREST EARNING ASSETS: | |||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 15,105,212 | $ | 225,671 | 5.99 | % | $ | 15,235,386 | $ | 215,935 | 5.75 | % | $ | 14,327,476 | $ | 145,024 | 4.06 | % | |||||||||
Investment securities | 2,243,614 | 15,534 | 2.78 | % | 2,248,479 | 15,125 | 2.73 | % | 2,424,454 | 12,308 | 2.04 | % | |||||||||||||||
Interest earning cash and deposits at other banks | 1,996,924 | 25,295 | 5.08 | % | 473,344 | 4,922 | 4.22 | % | 64,545 | 74 | 0.46 | % | |||||||||||||||
FHLB stock and other investments | 47,044 | 684 | 5.83 | % | 47,043 | 695 | 5.99 | % | 69,510 | 418 | 2.41 | % | |||||||||||||||
Total interest earning assets | $ | 19,392,794 | $ | 267,184 | 5.53 | % | $ | 18,004,252 | $ | 236,677 | 5.33 | % | $ | 16,885,985 | $ | 157,824 | 3.75 | % | |||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||
Money market and interest bearing demand | $ | 4,279,819 | $ | 34,377 | 3.22 | % | $ | 5,341,057 | $ | 41,399 | 3.14 | % | $ | 6,487,890 | $ | 8,655 | 0.54 | % | |||||||||
Savings deposits | 216,060 | 674 | 1.25 | % | 256,194 | 827 | 1.31 | % | 323,114 | 937 | 1.16 | % | |||||||||||||||
Time deposits | 6,890,035 | 74,673 | 4.35 | % | 5,543,369 | 50,122 | 3.67 | % | 2,277,938 | 2,628 | 0.46 | % | |||||||||||||||
Total interest bearing deposits | 11,385,914 | 109,724 | 3.87 | % | 11,140,620 | 92,348 | 3.36 | % | 9,088,942 | 12,220 | 0.54 | % | |||||||||||||||
FHLB and FRB borrowings | 2,177,264 | 23,622 | 4.35 | % | 676,444 | 6,698 | 4.02 | % | 577,966 | 1,457 | 1.01 | % | |||||||||||||||
Convertible notes, net | 96,621 | 598 | 2.45 | % | 217,114 | 1,322 | 2.44 | % | 216,540 | 1,322 | 2.42 | % | |||||||||||||||
Subordinated debentures | 103,123 | 2,551 | 9.79 | % | 102,791 | 2,431 | 9.46 | % | 101,880 | 1,287 | 5.00 | % | |||||||||||||||
Total interest bearing liabilities | $ | 13,762,922 | $ | 136,495 | 3.98 | % | $ | 12,136,969 | $ | 102,799 | 3.44 | % | $ | 9,985,328 | $ | 16,286 | 0.65 | % | |||||||||
Noninterest bearing demand deposits | 4,366,820 | 4,662,139 | 5,715,830 | ||||||||||||||||||||||||
Total funding liabilities/cost of funds | $ | 18,129,742 | 3.02 | % | $ | 16,799,108 | 2.48 | % | $ | 15,701,158 | 0.42 | % | |||||||||||||||
Net interest income/net interest spread | $ | 130,689 | 1.55 | % | $ | 133,878 | 1.89 | % | $ | 141,538 | 3.10 | % | |||||||||||||||
Net interest margin | 2.70 | % | 3.02 | % | 3.36 | % | |||||||||||||||||||||
Cost of deposits: | |||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 4,366,820 | $ | - | - | % | $ | 4,662,139 | $ | - | - | % | $ | 5,715,830 | $ | - | - | % | |||||||||
Interest bearing deposits | 11,385,914 | 109,724 | 3.87 | % | 11,140,620 | 92,348 | 3.36 | % | 9,088,942 | 12,220 | 0.54 | % | |||||||||||||||
Total deposits | $ | 15,752,734 | $ | 109,724 | 2.79 | % | $ | 15,802,759 | $ | 92,348 | 2.37 | % | $ | 14,804,772 | $ | 12,220 | 0.33 | % | |||||||||
Hope Bancorp, Inc. | ||||||||||||||||||
Selected Financial Data | ||||||||||||||||||
Unaudited (dollars in thousands) | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
6/30/2023 | 6/30/2022 | |||||||||||||||||
Average
| Interest
| Annualized
| Average
| Interest
| Annualized
| |||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||
Loans, including loans held for sale | $ | 15,169,939 | $ | 441,606 | 5.87 | % | $ | 14,100,983 | $ | 277,696 | 3.97 | % | ||||||
Investment securities | 2,246,033 | 30,659 | 2.75 | % | 2,522,293 | 23,964 | 1.92 | % | ||||||||||
Interest earning cash and deposits at other banks | 1,239,343 | 30,217 | 4.92 | % | 173,836 | 211 | 0.24 | % | ||||||||||
FHLB stock and other investments | 47,044 | 1,379 | 5.91 | % | 68,974 | 825 | 2.41 | % | ||||||||||
Total interest earning assets | $ | 18,702,359 | $ | 503,861 | 5.43 | % | $ | 16,866,086 | $ | 302,696 | 3.62 | % | ||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Money market and interest bearing demand | $ | 4,807,506 | $ | 75,775 | 3.18 | % | $ | 6,413,292 | $ | 14,355 | 0.45 | % | ||||||
Savings deposits | 236,016 | 1,501 | 1.28 | % | 320,824 | 1,865 | 1.17 | % | ||||||||||
Time deposits | 6,220,422 | 124,796 | 4.05 | % | 2,447,771 | 4,676 | 0.39 | % | ||||||||||
Total interest bearing deposits | 11,263,944 | 202,072 | 3.62 | % | 9,181,887 | 20,896 | 0.46 | % | ||||||||||
FHLB and FRB borrowings | 1,431,000 | 30,320 | 4.27 | % | 411,187 | 2,144 | 1.05 | % | ||||||||||
Convertible notes, net | 156,535 | 1,920 | 2.44 | % | 216,423 | 2,645 | 2.43 | % | ||||||||||
Subordinated debentures | 102,958 | 4,982 | 9.62 | % | 101,729 | 2,297 | 4.49 | % | ||||||||||
Total interest bearing liabilities | $ | 12,954,437 | $ | 239,294 | 3.73 | % | $ | 9,911,226 | $ | 27,982 | 0.57 | % | ||||||
Noninterest bearing demand deposits | 4,513,664 | 5,694,418 | ||||||||||||||||
Total funding liabilities/cost of funds | $ | 17,468,101 | 2.76 | % | $ | 15,605,644 | 0.36 | % | ||||||||||
Net interest income/net interest spread | $ | 264,567 | 1.70 | % | $ | 274,714 | 3.05 | % | ||||||||||
Net interest margin | 2.85 | % | 3.28 | % | ||||||||||||||
Cost of deposits: | ||||||||||||||||||
Noninterest bearing demand deposits | $ | 4,513,664 | $ | - | - | % | $ | 5,694,418 | $ | - | - | % | ||||||
Interest bearing deposits | 11,263,944 | 202,072 | 3.62 | % | 9,181,887 | 20,896 | 0.46 | % | ||||||||||
Total deposits | $ | 15,777,608 | $ | 202,072 | 2.58 | % | $ | 14,876,305 | $ | 20,896 | 0.28 | % | ||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
AVERAGE BALANCES: | 6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | 6/30/2023 | 6/30/2022 | % change | |||||||||||||||||||
Loans, including loans held for sale | $ | 15,105,212 | $ | 15,235,386 | (1 | )% | $ | 14,327,476 | 5 | % | $ | 15,169,939 | $ | 14,100,983 | 8 | % | |||||||||||
Investment securities | 2,243,614 | 2,248,479 | - | % | 2,424,454 | (7 | )% | 2,246,033 | 2,522,293 | (11 | )% | ||||||||||||||||
Interest earning cash and deposits at other banks | 1,996,924 | 473,344 | 322 | % | 64,545 | 2994 | % | 1,239,343 | 173,836 | 613 | % | ||||||||||||||||
Interest earning assets | 19,392,794 | 18,004,252 | 8 | % | 16,885,985 | 15 | % | 18,702,359 | 16,866,086 | 11 | % | ||||||||||||||||
Total assets | 20,468,810 | 19,087,170 | 7 | % | 17,876,945 | 14 | % | 19,781,806 | 17,810,045 | 11 | % | ||||||||||||||||
Interest bearing deposits | 11,385,914 | 11,140,620 | 2 | % | 9,088,942 | 25 | % | 11,263,944 | 9,181,887 | 23 | % | ||||||||||||||||
Interest bearing liabilities | 13,762,922 | 12,136,969 | 13 | % | 9,985,328 | 38 | % | 12,954,437 | 9,911,226 | 31 | % | ||||||||||||||||
Noninterest bearing demand deposits | 4,366,820 | 4,662,139 | (6 | )% | 5,715,830 | (24 | )% | 4,513,664 | 5,694,418 | (21 | )% | ||||||||||||||||
Stockholders' equity | 2,072,859 | 2,046,159 | 1 | % | 2,016,577 | 3 | % | 2,059,583 | 2,053,461 | - | % | ||||||||||||||||
LOAN PORTFOLIO COMPOSITION: | 6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | ||||||||||||||||||||||
Commercial and industrial ("C&I") loans | $ | 4,805,126 | $ | 4,821,270 | - | % | $ | 4,395,738 | 9 | % | |||||||||||||||||
Commercial real estate ("CRE") loans | 9,192,160 | 9,373,529 | (2 | )% | 9,335,020 | (2 | )% | ||||||||||||||||||||
Residential mortgage and other loans | 867,524 | 870,050 | - | % | 815,291 | 6 | % | ||||||||||||||||||||
Loans receivable | 14,864,810 | 15,064,849 | (1 | )% | 14,546,049 | 2 | % | ||||||||||||||||||||
Allowance for credit losses | (172,996 | ) | (163,544 | ) | 6 | % | (151,580 | ) | 14 | % | |||||||||||||||||
Loans receivable, net | $ | 14,691,814 | $ | 14,901,305 | (1 | )% | $ | 14,394,469 | 2 | % | |||||||||||||||||
CRE LOANS BY PROPERTY TYPE: | 6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | ||||||||||||||||||||||
Multi-tenant retail | $ | 1,778,068 | $ | 1,817,874 | (2 | )% | $ | 2,603,516 | (32 | )% | |||||||||||||||||
Hotels/motels | 868,286 | 900,990 | (4 | )% | 1,143,982 | (24 | )% | ||||||||||||||||||||
Gas stations and car washes | 1,042,290 | 1,046,528 | - | % | 1,080,777 | (4 | )% | ||||||||||||||||||||
Mixed-use facilities | 834,948 | 818,227 | 2 | % | 833,342 | - | % | ||||||||||||||||||||
Industrial warehouses | 1,301,075 | 1,309,763 | (1 | )% | 1,279,647 | 2 | % | ||||||||||||||||||||
Multifamily | 1,257,971 | 1,302,597 | (3 | )% | 989,840 | 27 | % | ||||||||||||||||||||
Single-tenant retail | 690,418 | 706,593 | (2 | )% | 720,413 | (4 | )% | ||||||||||||||||||||
Office | 463,998 | 464,703 | - | % | 440,593 | 5 | % | ||||||||||||||||||||
All other | 955,106 | 1,006,254 | (5 | )% | 242,910 | 293 | % | ||||||||||||||||||||
Total CRE loans | $ | 9,192,160 | $ | 9,373,529 | (2 | )% | $ | 9,335,020 | (2 | )% | |||||||||||||||||
DEPOSIT COMPOSITION | 6/30/2023 | 3/31/2023 | % change | 6/30/2022 | % change | ||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 4,229,247 | $ | 4,504,621 | (6 | )% | $ | 5,689,992 | (26 | )% | |||||||||||||||||
Money market and interest bearing demand | 4,188,584 | 4,331,998 | (3 | )% | 6,339,467 | (34 | )% | ||||||||||||||||||||
Savings deposits | 224,495 | 231,704 | (3 | )% | 326,927 | (31 | )% | ||||||||||||||||||||
Time deposits | 6,977,026 | 6,759,886 | 3 | % | 2,673,244 | 161 | % | ||||||||||||||||||||
Total deposits | $ | 15,619,352 | $ | 15,828,209 | (1 | )% | $ | 15,029,630 | 4 | % | |||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||||||||||
| CAPITAL & CAPITAL RATIOS: | 6/30/2023 | 3/31/2023 | 6/30/2022 | ||||||||||||||||||||||||
Total stockholders' equity | $ | 2,067,998 | $ | 2,058,580 | $ | 2,000,369 | |||||||||||||||||||||
Total capital | $ | 2,102,625 | $ | 2,068,433 | $ | 1,948,953 | |||||||||||||||||||||
Common equity tier 1 ratio | 11.06 | % | 10.75 | % | 10.69 | % | |||||||||||||||||||||
Tier 1 capital ratio | 11.68 | % | 11.36 | % | 11.33 | % | |||||||||||||||||||||
Total capital ratio | 12.64 | % | 12.25 | % | 12.13 | % | |||||||||||||||||||||
Leverage ratio | 9.57 | % | 10.13 | % | 10.32 | % | |||||||||||||||||||||
Total risk weighted assets | $ | 16,639,593 | $ | 16,886,419 | $ | 16,066,709 |
| ||||||||||||||||||||
Book value per common share | $ | 17.23 | $ | 17.17 | $ | 16.74 | |||||||||||||||||||||
TCE per share (1) | $ | 13.32 | $ | 13.26 | $ | 12.80 | |||||||||||||||||||||
TCE ratio (1) | 8.04 | % | 7.91 | % | 8.68 | % | |||||||||||||||||||||
(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10. | |||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES CHANGES: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||||||||||||||||||
Balance at beginning of period | $ | 163,544 | $ | 162,359 | $ | 160,561 | $ | 151,580 | $ | 147,450 | $ | 162,359 | $ | 140,550 | |||||||||||||
ASU 2022-02 day 1 adoption impact | - | (407 | ) | - | - | - | (407 | ) | - | ||||||||||||||||||
Provision (credit) for credit losses | 8,900 | 1,700 | 8,200 | 9,200 | 3,200 | 10,600 | (7,800 | ) | |||||||||||||||||||
Recoveries | 1,531 | 387 | 3,222 | 331 | 1,642 | 1,918 | 21,045 | ||||||||||||||||||||
Charge offs | (979 | ) | (495 | ) | (9,624 | ) | (550 | ) | (712 | ) | (1,474 | ) | (2,215 | ) | |||||||||||||
Balance at end of period | $ | 172,996 | $ | 163,544 | $ | 162,359 | $ | 160,561 | $ | 151,580 | $ | 172,996 |
| $ | 151,580 | ||||||||||||
Net recoveries (charge offs)/average loans receivable (annualized) | 0.01 | % | - | % | (0.17 | )% | (0.01 | )% | 0.03 | % | 0.01 | % | 0.27 | % | |||||||||||||
6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | |||||||||||||||||||||||
Allowance for unfunded loan commitments | $ | 3,081 | $ | 2,971 | $ | 1,351 | $ | 1,231 | $ | 1,481 | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
NET LOAN RECOVERIES (CHARGE OFFS): | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||||||||||||||||||
CRE loans | $ | (438 | ) | $ | 109 | $ | (2,022 | ) | $ | (9 | ) | $ | 508 | $ | (329 | ) | $ | 16,926 | |||||||||
C&I loans | 1,091 | (196 | ) | (4,174 | ) | (115 | ) | 461 | 895 | 1,990 | |||||||||||||||||
Residential mortgage and other loans | (101 | ) | (21 | ) | (206 | ) | (95 | ) | (39 | ) | (122 | ) | (86 | ) | |||||||||||||
Net loan recoveries (charge offs) | $ | 552 | $ | (108 | ) | $ | (6,402 | ) | $ | (219 | ) | $ | 930 | $ | 444 | $ | 18,830 | ||||||||||
Hope Bancorp, Inc. | |||||||||||||||||||
Selected Financial Data | |||||||||||||||||||
Unaudited (dollars in thousands) | |||||||||||||||||||
NONPERFORMING ASSETS: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||||||||||||
Loans on nonaccrual status (1) | $ | 61,252 | $ | 78,861 | $ | 49,687 | $ | 64,571 | $ | 69,522 | |||||||||
Accruing delinquent loans past due 90 days or more | 15,182 | 364 | 401 | 5,306 | 12,468 | ||||||||||||||
Accruing troubled debt restructured loans (2) | - | - | 16,931 | 25,631 | 26,572 | ||||||||||||||
Total nonperforming loans | 76,434 | 79,225 | 67,019 | 95,508 | 108,562 | ||||||||||||||
Other real estate owned ("OREO") | 938 | 938 | 2,418 | 1,480 | 2,010 | ||||||||||||||
Total nonperforming assets | $ | 77,372 | $ | 80,163 | $ | 69,437 | $ | 96,988 | $ | 110,572 | |||||||||
Nonperforming assets/total assets | 0.38 | % | 0.39 | % | 0.36 | % | 0.51 | % | 0.61 | % | |||||||||
Nonperforming assets/loans receivable & OREO | 0.52 | % | 0.53 | % | 0.45 | % | 0.63 | % | 0.76 | % | |||||||||
Nonperforming assets/total capital | 3.74 | % | 3.89 | % | 3.44 | % | 4.91 | % | 5.53 | % | |||||||||
Nonperforming loans/loans receivable | 0.51 | % | 0.53 | % | 0.44 | % | 0.62 | % | 0.75 | % | |||||||||
Nonaccrual loans/loans receivable | 0.41 | % | 0.52 | % | 0.32 | % | 0.42 | % | 0.48 | % | |||||||||
Allowance for credit losses/loans receivable | 1.16 | % | 1.09 | % | 1.05 | % | 1.04 | % | 1.04 | % | |||||||||
Allowance for credit losses/nonperforming loans | 226.33 | % | 206.43 | % | 242.26 | % | 168.11 | % | 139.63 | % | |||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million, $9.8 million, $9.9 million, and $13.2 million, at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. | |||||||||||||||||||
(2) The Company adopted ASU 2022-02 in 2023, which eliminated the concept of TDR from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans. | |||||||||||||||||||
NONACCRUAL LOANS BY TYPE: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||||||||||||
CRE loans | $ | 29,270 | $ | 44,376 | $ | 33,915 | $ | 47,807 | $ | 53,966 | |||||||||
C&I loans | 23,042 | 26,191 | 5,620 | 7,675 | 8,206 | ||||||||||||||
Residential mortgage and other loans | 8,940 | 8,294 | 10,152 | 9,089 | 7,350 | ||||||||||||||
Total nonaccrual loans | $ | 61,252 | $ | 78,861 | $ | 49,687 | $ | 64,571 | $ | 69,522 | |||||||||
Hope Bancorp, Inc. | |||||||||
Selected Financial Data | |||||||||
Unaudited (dollars in thousands) | |||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||
30 - 59 days past due | $ 9,295 | $ 7,662 | $ 7,049 | $ 13,092 | $ 10,090 | ||||
60 - 89 days past due | 178 | 249 | 2,243 | 4,933 | 6,354 | ||||
Total accruing delinquent loans 30-89 days past due | $ 9,473 | $ 7,911 | $ 9,292 | $ 18,025 | $ 16,444 | ||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||
CRE loans | $ 7,339 | $ 3,652 | $ 4,115 | $ 9,694 | $ 7,919 | ||||
C&I loans | 990 | 419 | 3,300 | 6,165 | 3,397 | ||||
Residential mortgage and other loans | 1,144 | 3,840 | 1,877 | 2,166 | 5,128 | ||||
Total accruing delinquent loans 30-89 days past due | $ 9,473 | $ 7,911 | $ 9,292 | $ 18,025 | $ 16,444 | ||||
CRITICIZED LOANS: | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||
Special mention loans | $ 210,806 | $ 166,472 | $ 157,263 | $ 79,399 | $ 95,797 | ||||
Substandard loans | 134,203 | 138,224 | 104,073 | 204,713 | 244,748 | ||||
Total criticized loans | $ 345,009 | $ 304,696 | $ 261,336 | $ 284,112 | $ 340,545 | ||||
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)
Reconciliation of GAAP financial measures to non-GAAP financial measures
Management reviews select non-GAAP financial measures in evaluating the Company's and the Bank's financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.
Three Months Ended | Six Months Ended | |||||||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | |||||||||||||||
Average stockholders' equity | $ | 2,072,859 | $ | 2,046,159 | $ | 2,016,577 | $ | 2,059,583 | $ | 2,053,461 | ||||||||||
Less: Average goodwill and core deposit intangible assets, net | (469,515 | ) | (469,992 | ) | (471,421 | ) | (469,752 | ) | (471,669 | ) | ||||||||||
Average TCE | $ | 1,603,344 | $ | 1,576,167 | $ | 1,545,156 | $ | 1,589,831 | $ | 1,581,792 | ||||||||||
Net income | $ | 38,022 | $ | 39,121 | $ | 52,088 | $ | 77,143 | $ | 112,826 | ||||||||||
ROTCE (annualized) | 9.49 | % | 9.93 | % | 13.48 | % | 9.70 | % | 14.27 | % | ||||||||||
TANGIBLE COMMON EQUITY | 6/30/2023 | 3/31/2023 | 6/30/2022 | |||||||||||||||||
Total stockholders' equity | $ | 2,067,998 | $ | 2,058,580 | $ | 2,000,369 | ||||||||||||||
Less: Goodwill and core deposit intangible assets, net | (469,280 | ) | (469,728 | ) | (471,148 | ) | ||||||||||||||
TCE | $ | 1,598,718 | $ | 1,588,852 | $ | 1,529,221 | ||||||||||||||
Total assets | $ | 20,366,138 | $ | 20,568,884 | $ | 18,089,062 | ||||||||||||||
Less: Goodwill and core deposit intangible assets, net | (469,280 | ) | (469,728 | ) | (471,148 | ) | ||||||||||||||
Tangible assets | $ | 19,896,858 | $ | 20,099,156 | $ | 17,617,914 | ||||||||||||||
TCE ratio | 8.04 | % | 7.91 | % | 8.68 | % | ||||||||||||||
Common shares outstanding | 120,014,888 | 119,865,732 | 119,473,939 | |||||||||||||||||
TCE per share | $ | 13.32 | $ | 13.26 | $ | 12.80 | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
PRE-PROVISION NET REVENUE | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | |||||||||||||||
Net interest income before provision (credit) for credit losses | $ | 130,689 | $ | 133,878 | $ | 141,538 | $ | 264,567 | $ | 274,714 | ||||||||||
Noninterest income | 17,014 | 10,978 | 12,746 | 27,992 | 25,932 | |||||||||||||||
Revenue | 147,703 | 144,856 | 154,284 | 292,559 | 300,646 | |||||||||||||||
Less noninterest expense | 87,333 | 90,354 | 80,365 | 177,687 | 155,738 | |||||||||||||||
PPNR | $ | 60,370 | $ | 54,502 | $ | 73,919 | $ | 114,872 | $ | 144,908 | ||||||||||
Average assets | $ | 20,468,810 | $ | 19,087,170 | $ | 17,876,945 | $ | 19,781,806 | $ | 17,810,045 | ||||||||||
ROA (PPNR) (annualized) | 1.18 | % | 1.14 | % | 1.65 | % | 1.16 | % | 1.63 | % | ||||||||||
Average stockholders' equity | 2,072,859 | 2,046,159 | 2,016,577 | 2,059,583 | 2,053,461 | |||||||||||||||
ROE (PPNR) (annualized) | 11.65 | % | 10.65 | % | 14.66 | % | 11.15 | % | 14.11 | % | ||||||||||
Contacts
Julianna Balicka
EVP & Chief Financial Officer
213-235-3235
julianna.balicka@bankofhope.com
Angie Yang
SVP, Director of Investor Relations & Corporate Communications
213-251-2219
angie.yang@bankofhope.com
