0001128361false00011283612024-07-292024-07-29
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
July 29, 2024
Date of Report (Date of earliest event reported)
| | |
| HOPE BANCORP INC |
| (Exact name of registrant as specified in its charter) |
| | | | | | | | | | | | | | |
| Delaware | 000-50245 | 95-4849715 |
| (State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3200 Wilshire Boulevard, Suite 1400
Los Angeles, California 90010
(Address of principal executives offices, including zip code)
(213) 639-1700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Common Stock | , | par value $0.001 per share | HOPE | NASDAQ Global Select Market |
| (Title of class) | (Trading Symbol) | (Name of exchange on which registered) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On July 29, 2024, Hope Bancorp, Inc. (“HOPE” or the “Company”) issued a news release concerning its results of operations and financial condition for the second quarter and six months ended and as of June 30, 2024. A copy of the July 29, 2024, news release is furnished as Exhibit 99.1 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
The Company previously announced that it will host an investor conference call on Monday, July 29, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its second quarter ended and as of June 30, 2024. A presentation to accompany the conference call (“Earnings Presentation”), which contains certain historical and forward-looking information relating to the Company, has been made available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. A copy of the Earnings Presentation is furnished as Exhibit 99.2 and incorporated herein by reference.
The information furnished under Item 2.02, Item 7.01 and exhibits 99.1, and 99.2 under Item 9.01 of this Current Report on Form 8-K to this Current Report on Form 8-K) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to liabilities under that Section, nor shall they be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be set forth as a specific reference in such filing.
Item 8.01 Other Events.
On July 29, 2024, the Company issued a news release announcing that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The cash dividend is payable on or about August 22, 2024, to all stockholders of record as of the close of business on August 8, 2024. A copy of the July 29, 2024, news release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| | | | | | | | |
| Exhibit No. | | Description of Exhibit |
| | |
| 99.1 | | |
| 99.2 | | |
| 99.3 | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | |
| | HOPE BANCORP, INC. |
| | | |
| Date: July 29, 2024 | By: | /s/ Kevin S. Kim | |
| | Kevin S. Kim | |
| | Chairman, President and Chief Executive Officer |
News Release
HOPE BANCORP REPORTS 2024 SECOND QUARTER FINANCIAL RESULTS
LOS ANGELES - July 29, 2024 - 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, 2024. For the three months ended June 30, 2024, net income totaled $25.3 million, or $0.21 per diluted common share. This compares with net income of $25.9 million, or $0.21 per diluted common share, in the first quarter of 2024. Excluding notable items(1), net income for the 2024 second quarter was $26.6 million, or $0.22 per diluted common share.
“During the 2024 second quarter, our net interest margin expanded, our operating expenses decreased, and our return on assets improved, compared with the 2024 first quarter,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “These highlights reflect continued progress towards improving our financial performance following our strategic reorganization in the fourth quarter of last year.
“Quarter-over-quarter, total deposits were essentially stable with growth in noninterest bearing demand deposits and other customer deposits largely offsetting a planned reduction in brokered time deposits. Our cost of total deposits increased by only three basis points this quarter, a sharp deceleration from the quarterly increases over the past two years. Gross loans decreased modestly quarter-over-quarter as elevated payoffs and paydowns offset growing production volumes. Given the improved conditions in the secondary markets, we resumed SBA loan sales during the second quarter. Nonperforming assets of $67.3 million at June 30, 2024, decreased 37% from March 31, 2024, and our overall credit quality remains stable.
“Following the signing of the definitive merger agreement with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank, on April 26, 2024, we have been diligently planning for a smooth integration,” continued Kim. “The addition of Territorial’s stable and low-cost deposit base will enhance our deposit franchise. Territorial’s residential mortgage loans, with their excellent asset quality, will accelerate the diversification of our loan portfolio. Combined, we will be the largest regional bank catering to multi-ethnic customers with full-service branches across the continental United States and Hawai‘i.”
Operating Results for the 2024 Second Quarter
Net interest income. Net interest income before provision for credit losses for the 2024 second quarter totaled $105.9 million, compared with $115.0 million in the immediately preceding first quarter, a decrease of $9.1 million, or 8%, quarter-over-quarter. Approximately $4.0 million of the quarter-over-quarter decrease was attributable to the net impact of the Company’s payoff of its Bank Term Funding Program (“BTFP”) borrowings that matured in late March 2024 and early April 2024, which the Company paid off with interest earning cash.
Net interest margin expansion. Net interest margin for the 2024 second quarter expanded to 2.62%, up seven basis points from 2.55% in the 2024 first quarter, largely reflecting a favorable earning asset mix shift. The 2024 second quarter yield on average earning assets was 5.76%, unchanged from the first quarter of 2024. The cost of average interest bearing liabilities was 4.55% in the second quarter of 2024, up only two basis points from 4.53% in the preceding first quarter.
Cost of deposits. The quarter-over-quarter rate of change in deposit costs substantially slowed. The average cost of total deposits for the 2024 second quarter was 3.39%, an increase of three basis points from 3.36% in the preceding first quarter. This rate of change compares favorably with the 21 basis point quarter-over-quarter increase in the average cost of total deposits in the 2024 first quarter, and with the quarterly rates of change experienced in 2023 and 2022.
(1) Net income, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
Noninterest income. Noninterest income for the 2024 second quarter increased to $11.1 million, up 34% from $8.3 million in the immediately preceding first quarter, primarily reflecting $2.0 million of net gains on the sale of SBA loans. During the 2024 second quarter, the Company resumed sales of the guaranteed portion of its SBA 7(a) loans. There were no such SBA gains on sale in the immediately preceding first quarter.
Noninterest expense. Noninterest expense for the 2024 second quarter decreased 5% to $81.0 million from $84.8 million in the immediately preceding first quarter, and was down 7% year-over-year from $87.2 million in the 2023 second quarter. The Company continues to manage expenses closely following its restructuring in the fourth quarter of 2024. Excluding notable items(2), noninterest expense for the 2024 second quarter was $79.1 million, down 4% compared with $82.4 million for the 2024 first quarter, and down 9% year-over-year. Noninterest expense for the 2024 second quarter included notable items comprising $1.6 million of merger-related expenses, $576,000 of restructuring-related costs, and a $309,000 reversal of accrual related to the FDIC special assessment, all on a pre-tax basis. For the 2024 first quarter, noninterest expense included notable items comprising $1.0 million of merger-related expenses, an incremental accrual of $1.0 million for the FDIC special assessment, and $402,000 of restructuring-related costs, all on a pre-tax basis.
Salaries and employee benefits expense for the 2024 second quarter was $44.1 million, a 7% quarter-over-quarter decrease from $47.6 million in the 2024 first quarter, which included seasonally higher items such as payroll tax accruals. Year-over-year, salaries and employee benefits expense decreased 16% from $52.3 million in the 2023 second quarter, reflecting the results of the restructuring.
Tax rate. The year-to-date effective tax rate for the first half of 2024 was 27.4%, compared with the year-to-date effective tax rate of 26.0% for the first half of 2023. For the full year 2024, the Company expects the effective tax rate to be approximately 26%.
Balance Sheet Summary
Cash and investment securities. At June 30, 2024, cash and cash equivalents totaled $654.0 million, compared with $1.19 billion at March 31, 2024, and $2.30 billion at June 30, 2023. The linked-quarter and year-over-year changes in cash and cash equivalents primarily reflected the payoff of the Company’s BTFP borrowings in March and April of 2024. Investment securities totaled $2.17 billion at June 30, 2024, $2.28 billion at March 31, 2024, and $2.19 billion at June 30, 2023.
Loans. Gross loans of $13.64 billion at June 30, 2024, decreased $86.6 million, or less than 1%, from $13.72 billion at March 31, 2024. During the 2024 second quarter, the Company sold $29.8 million of the guaranteed portion of its SBA 7(a) loans held for sale. Quarter-over-quarter, commercial and industrial loans decreased, reflecting elevated payoffs and paydowns. This was partially offset by continued strong growth in residential mortgage loans and essentially stable commercial real estate loan balances.
(2) Noninterest expense, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
The following table sets forth the loan portfolio composition at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
| Balance | | Percentage | | Balance | | Percentage | | Balance | | Percentage |
| Commercial real estate (“CRE”) loans | $ | 8,679,515 | | | 63.6 | % | | $ | 8,707,673 | | | 63.5 | % | | $ | 9,192,160 | | | 61.7 | % |
| Commercial and industrial (“C&I”) loans | 3,854,284 | | | 28.3 | % | | 4,041,063 | | | 29.4 | % | | 4,805,126 | | | 32.2 | % |
| Residential mortgage and other loans | 1,033,203 | | | 7.6 | % | | 970,442 | | | 7.1 | % | | 867,524 | | | 5.8 | % |
| Loans receivable | 13,567,002 | | | 99.5 | % | | 13,719,178 | | | 100.0 | % | | 14,864,810 | | | 99.7 | % |
| Loans held for sale | 68,316 | | | 0.5 | % | | 2,763 | | | — | % | | 49,246 | | | 0.3 | % |
| Gross loans | $ | 13,635,318 | | | 100.0 | % | | $ | 13,721,941 | | | 100.0 | % | | $ | 14,914,056 | | | 100.0 | % |
Deposits. Total deposits were essentially stable quarter-over-quarter, totaling $14.71 billion at June 30, 2024, compared with $14.75 billion at March 31, 2024, reflecting growth in customer deposits that largely offset planned reductions of brokered time deposits. Noninterest bearing demand deposits grew 1% quarter-over-quarter to $3.67 billion at June 30, 2024. During the second quarter of 2024, the Company reduced brokered time deposits by $92.1 million, or 8% from March 31, 2024.
The following table sets forth the deposit composition at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
| Balance | | Percentage | | Balance | | Percentage | | Balance | | Percentage |
| Noninterest bearing demand deposits | $ | 3,671,192 | | | 24.9 | % | | $ | 3,652,592 | | | 24.7 | % | | $ | 4,229,247 | | | 27.1 | % |
| Money market, interest bearing demand, and savings deposits | 4,907,860 | | | 33.4 | % | | 5,313,064 | | | 36.0 | % | | 4,413,079 | | | 28.2 | % |
| Time deposits | 6,132,419 | | | 41.7 | % | | 5,787,761 | | | 39.3 | % | | 6,977,026 | | | 44.7 | % |
| Total deposits | $ | 14,711,471 | | | 100.0 | % | | $ | 14,753,417 | | | 100.0 | % | | $ | 15,619,352 | | | 100.0 | % |
| | | | | | | | | | | |
| Gross loan-to-deposit ratio | | | 92.7 | % | | | | 93.0 | % | | | | 95.5 | % |
Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $170.0 million at June 30, 2024, $795.6 million at March 31, 2024, and $2.26 billion at June 30, 2023. The linked-quarter and year-over-year changes primarily reflected the payoff of the Company’s BTFP borrowings in March and April 2024. During the second quarter, the Company paid off the remaining $695.6 million of its BTFP borrowings when it matured on April 5, 2024.
Credit Quality and Allowance for Credit Losses
Nonperforming assets. Nonperforming assets decreased 37% to $67.3 million, or 0.39% of total assets, at June 30, 2024, from $106.8 million, or 0.59% of total assets, at March 31, 2024, and were down 13% from $77.4 million, or 0.38% of total assets, at June 30, 2023. The linked-quarter and year-over-year reductions in nonperforming assets reflected improvement in accruing delinquent loans past due 90 days or more.
The following table sets forth the components of nonperforming assets at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
Loans on nonaccrual status (1) | $ | 67,003 | | | $ | 59,526 | | | $ | 61,252 | |
Accruing delinquent loans past due 90 days or more | | 273 | | | | 47,290 | | | | 15,182 | |
| | | | | | | | |
| Total nonperforming loans | | 67,276 | | | | 106,816 | | | | 76,434 | |
| Other real estate owned | | — | | | | — | | | | 938 | |
| Total nonperforming assets | $ | 67,276 | | | $ | 106,816 | | | $ | 77,372 | |
| | | | | | | | |
| Nonperforming assets/total assets | | 0.39 | % | | | 0.59 | % | | | 0.38 | % |
_____________________________________
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.2 million, $10.9 million and $11.9 million at June 30, 2024, March 31, 2024, and June 30, 2023, respectively.
Net charge offs and provision for credit losses. The Company recorded net charge offs of $4.4 million in the 2024 second quarter, equivalent to 0.13%, annualized, of average loans. This compares with net charge offs of $3.5 million, or 0.10%, annualized, of average loans in the immediately preceding first quarter.
The following table sets forth net charge offs and annualized net charge off ratios for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended | | | |
| (dollars in thousands) (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | | | | | |
| Net charge offs (recoveries) | $ | 4,439 | | | $ | 3,536 | | | $ | (552) | | | | | | | |
| Annualized net charge offs (recoveries)/average loans | | 0.13 | % | | | 0.10 | % | | | (0.01) | % | | | | | | |
For the 2024 second quarter, the Company recorded a provision for credit losses of $1.4 million. This compares with a provision for credit losses of $2.6 million in the immediately preceding first quarter.
Allowance for credit losses. The allowance for credit losses totaled $156.0 million at June 30, 2024, compared with $158.8 million at March 31, 2024. The allowance coverage ratio was 1.15% of loans receivable at June 30, 2024, compared with 1.16% at March 31, 2024.
The following table sets forth the allowance for credit losses and the coverage ratios at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
| Allowance for credit losses | $ | 156,019 | | | $ | 158,758 | | | $ | 172,996 | |
| Allowance for credit losses/loans receivable | | 1.15 | % | | | 1.16 | % | | | 1.16 | % |
Capital
The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At June 30, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
(unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | Minimum Guideline for “Well-Capitalized” |
| Common Equity Tier 1 Capital Ratio | 12.70% | | 12.47% | | 11.05% | | 6.50% |
| Tier 1 Capital Ratio | 13.40% | | 13.17% | | 11.68% | | 8.00% |
| Total Capital Ratio | 14.42% | | 14.19% | | 12.64% | | 10.00% |
| Leverage Ratio | 11.61% | | 10.42% | | 9.57% | | 5.00% |
At June 30, 2024, total stockholders’ equity was $2.11 billion, or $17.49 per common share, essentially stable quarter-over-quarter. Tangible common equity (“TCE”) per share(3) was $13.61 at June 30, 2024, compared with $13.63 at March 31, 2024, and the TCE ratio(3) was 9.72% at June 30, 2024, up 39 basis points quarter-over-quarter.
The following table sets forth the TCE per share and the TCE ratio at June 30, 2024, March 31, 2024, and June 30, 2023:
| | | | | | | | | | | | | | | | | |
| (unaudited) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
| TCE per share | $13.61 | | $13.63 | | $13.32 |
| TCE ratio | 9.72% | | 9.33% | | 8.04% |
Investor Conference Call
The Company previously announced that it will host an investor conference call on Monday, July 29, 2024, 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, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through August 5, 2024, replay access code 2112004.
Non-GAAP Financial Metrics
This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items and noninterest expense / average assets excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
(3) TCE ratio per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
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 $17.38 billion in total assets as of June 30, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 48 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Additional Information About the Merger and Where to Find It
In connection with the proposed merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 on June 21, 2024, which included a preliminary Proxy Statement of Territorial Bancorp Inc., that also constitutes a preliminary prospectus of Hope Bancorp, Inc. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.
Participants in Solicitation
Hope Bancorp, Inc., Territorial Bancorp and certain of their directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Hope Bancorp’s directors and executive officers is set forth in the Proxy Statement, dated April 12, 2024 (as amended and supplemented), for its 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Territorial Bancorp’s participants is set forth in the Proxy Statement, dated April 16, 2024, for Territorial Bancorp’s 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of those participants in the solicitation of proxies in respect of the merger may be obtained by reading the Registration Statement and Proxy Statement/Prospectus filed with the SEC.
Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding Territorial Bancorp’s low-cost core deposit base, strengthening of profitability, ease of integration and diversification of franchise. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the proposed transaction is subject to regulatory approvals, the approval of Territorial Bancorp shareholders, and other customary closing conditions. There is no assurance that such conditions will be met or that the proposed merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in Hope Bancorp’s areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of Hope Bancorp; and diversion of management’s attention from ongoing business operations and opportunities. For additional information concerning these and other risk factors, see Hope Bancorp’s most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Contacts:
| | | | | | | | |
Julianna Balicka | | Angie Yang |
| EVP & Chief Financial Officer | | SVP, Director of Investor Relations & Corporate Communications |
213-235-3235 | | 213-251-2219 |
julianna.balicka@bankofhope.com | | angie.yang@bankofhope.com |
# # #
(tables follow)
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets: | 6/30/2024 | | 3/31/2024 | | % change | | | | | | 6/30/2023 | | % change |
| Cash and due from banks | $ | 654,044 | | | $ | 1,185,296 | | | (44.8) | % | | | | | | $ | 2,302,339 | | | (71.6) | % |
| Investment securities | 2,172,859 | | | 2,277,990 | | | (4.6) | % | | | | | | 2,186,346 | | | (0.6) | % |
| Federal Home Loan Bank (“FHLB”) stock and other investments | 61,528 | | | 61,175 | | | 0.6 | % | | | | | | 60,213 | | | 2.2 | % |
| | | | | | | | | | | | | |
| Gross loans, including loans held for sale | 13,635,318 | | | 13,721,941 | | | (0.6) | % | | | | | | 14,914,056 | | | (8.6) | % |
| Allowance for credit losses | (156,019) | | | (158,758) | | | (1.7) | % | | | | | | (172,996) | | | (9.8) | % |
| | | | | | | | | | | | | |
| Accrued interest receivable | 57,645 | | | 60,316 | | | (4.4) | % | | | | | | 60,118 | | | (4.1) | % |
| Premises and equipment, net | 50,919 | | | 50,541 | | | 0.7 | % | | | | | | 50,513 | | | 0.8 | % |
| Goodwill and intangible assets | 467,583 | | | 467,984 | | | (0.1) | % | | | | | | 469,280 | | | (0.4) | % |
| Other assets | 431,214 | | | 421,729 | | | 2.2 | % | | | | | | 496,269 | | | (13.1) | % |
| Total assets | $ | 17,375,091 | | | $ | 18,088,214 | | | (3.9) | % | | | | | | $ | 20,366,138 | | | (14.7) | % |
| | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | |
| Deposits | $ | 14,711,471 | | | $ | 14,753,417 | | | (0.3) | % | | | | | | $ | 15,619,352 | | | (5.8) | % |
| FHLB and Federal Reserve Bank (“FRB”) borrowings | 170,000 | | | 795,634 | | | (78.6) | % | | | | | | 2,260,000 | | | (92.5) | % |
| Subordinated debentures and convertible notes, net | 108,918 | | | 108,592 | | | 0.3 | % | | | | | | 107,632 | | | 1.2 | % |
| Accrued interest payable | 86,779 | | | 122,467 | | | (29.1) | % | | | | | | 109,236 | | | (20.6) | % |
| Other liabilities | 186,641 | | | 195,834 | | | (4.7) | % | | | | | | 201,920 | | | (7.6) | % |
| Total liabilities | $ | 15,263,809 | | | $ | 15,975,944 | | | (4.5) | % | | | | | | $ | 18,298,140 | | | (16.6) | % |
| | | | | | | | | | | | | |
| Stockholders’ Equity: | | | | | | | | | | | | | |
| Common stock, $0.001 par value | $ | 138 | | | $ | 138 | | | — | % | | | | | | $ | 137 | | | 0.7 | % |
| Additional paid-in capital | 1,440,963 | | | 1,439,484 | | | 0.1 | % | | | | | | 1,433,788 | | | 0.5 | % |
| Retained earnings | 1,167,978 | | | 1,159,593 | | | 0.7 | % | | | | | | 1,127,624 | | | 3.6 | % |
| Treasury stock, at cost | (264,667) | | | (264,667) | | | — | % | | | | | | (264,667) | | | — | % |
| Accumulated other comprehensive loss, net | (233,130) | | | (222,278) | | | (4.9) | % | | | | | | (228,884) | | | (1.9) | % |
| Total stockholders’ equity | 2,111,282 | | | 2,112,270 | | | — | % | | | | | | 2,067,998 | | | 2.1 | % |
| Total liabilities and stockholders’ equity | $ | 17,375,091 | | | $ | 18,088,214 | | | (3.9) | % | | | | | | $ | 20,366,138 | | | (14.7) | % |
| | | | | | | | | | | | | |
| Common stock shares – authorized | 300,000,000 | | | 150,000,000 | | | | | | | | | 150,000,000 | | | |
| Common stock shares – outstanding | 120,731,342 | | | 120,610,029 | | | | | | | | | 120,014,888 | | | |
| 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 |
| 6/30/2024 | | 3/31/2024 | | % change | | 6/30/2023 | | % change | | 6/30/2024 | | 6/30/2023 | | % change |
| | | | | | | | | | | | | | | |
| Interest and fees on loans | $ | 209,683 | | | $ | 213,626 | | | (2) | % | | $ | 225,671 | | | (7) | % | | $ | 423,309 | | | $ | 441,606 | | | (4) | % |
| Interest on investment securities | 16,829 | | | 18,049 | | | (7) | % | | 15,534 | | | 8 | % | | 34,878 | | | 30,659 | | | 14 | % |
| Interest on cash and deposits at other banks | 5,284 | | | 27,183 | | | (81) | % | | 25,295 | | | (79) | % | | 32,467 | | | 30,217 | | | 7 | % |
| Interest on other investments and FHLB dividends | 805 | | | 816 | | | (1) | % | | 684 | | | 18 | % | | 1,621 | | | 1,379 | | | 18 | % |
| Total interest income | 232,601 | | | 259,674 | | | (10) | % | | 267,184 | | | (13) | % | | 492,275 | | | 503,861 | | | (2) | % |
| | | | | | | | | | | | | | | |
| Interest on deposits | 122,577 | | | 124,033 | | | (1) | % | | 109,724 | | | 12 | % | | 246,610 | | | 202,072 | | | 22 | % |
| Interest on borrowings | 4,164 | | | 20,594 | | | (80) | % | | 26,771 | | | (84) | % | | 24,758 | | | 37,222 | | | (33) | % |
| Total interest expense | 126,741 | | | 144,627 | | | (12) | % | | 136,495 | | | (7) | % | | 271,368 | | | 239,294 | | | 13 | % |
| | | | | | | | | | | | | | | |
| Net interest income before provision | 105,860 | | | 115,047 | | | (8) | % | | 130,689 | | | (19) | % | | 220,907 | | | 264,567 | | | (17) | % |
| Provision for credit losses | 1,400 | | | 2,600 | | | (46) | % | | 9,010 | | | (84) | % | | 4,000 | | | 12,330 | | | (68) | % |
| Net interest income after provision | 104,460 | | | 112,447 | | | (7) | % | | 121,679 | | | (14) | % | | 216,907 | | | 252,237 | | | (14) | % |
| | | | | | | | | | | | | | | |
| Service fees on deposit accounts | 2,681 | | | 2,587 | | | 4 | % | | 2,325 | | | 15 | % | | 5,268 | | | 4,546 | | | 16 | % |
| Net gains on sales of SBA loans | 1,980 | | | — | | | 100 | % | | 1,872 | | | 6 | % | | 1,980 | | | 4,097 | | | (52) | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Net gains on sales of securities available for sale | 425 | | | — | | | 100 | % | | — | | | 100 | % | | 425 | | | — | | | 100 | % |
| Other income and fees | 5,985 | | | 5,699 | | | 5 | % | | 12,817 | | | (53) | % | | 11,684 | | | 19,349 | | | (40) | % |
| Total noninterest income | 11,071 | | | 8,286 | | | 34 | % | | 17,014 | | | (35) | % | | 19,357 | | | 27,992 | | | (31) | % |
| | | | | | | | | | | | | | | |
| Salaries and employee benefits | 44,107 | | | 47,577 | | | (7) | % | | 52,305 | | | (16) | % | | 91,684 | | | 109,474 | | | (16) | % |
| Occupancy | 6,906 | | | 6,786 | | | 2 | % | | 6,967 | | | (1) | % | | 13,692 | | | 14,488 | | | (5) | % |
| Furniture and equipment | 5,475 | | | 5,340 | | | 3 | % | | 5,393 | | | 2 | % | | 10,815 | | | 10,451 | | | 3 | % |
| Data processing and communications | 2,997 | | | 2,990 | | | — | % | | 2,917 | | | 3 | % | | 5,987 | | | 5,739 | | | 4 | % |
| FDIC assessment | 3,003 | | | 2,926 | | | 3 | % | | 4,691 | | | (36) | % | | 5,929 | | | 6,472 | | | (8) | % |
| FDIC special assessment | (309) | | | 1,000 | | | N/A | | — | | | 100 | % | | 691 | | | — | | | 100 | % |
| Earned interest credit | 6,139 | | | 5,834 | | | 5 | % | | 5,090 | | | 21 | % | | 11,973 | | | 9,517 | | | 26 | % |
| Restructuring-related costs | 576 | | | 402 | | | 43 | % | | — | | | 100 | % | | 978 | | | — | | | 100 | % |
| Merger-related costs | 1,589 | | | 1,044 | | | 52 | % | | — | | | 100 | % | | 2,633 | | | — | | | 100 | % |
| Other noninterest expense | 10,504 | | | 10,940 | | | (4) | % | | 9,860 | | | 7 | % | | 21,444 | | | 19,816 | | | 8 | % |
| Total noninterest expense | 80,987 | | | 84,839 | | | (5) | % | | 87,223 | | | (7) | % | | 165,826 | | | 175,957 | | | (6) | % |
| Income before income taxes | 34,544 | | | 35,894 | | | (4) | % | | 51,470 | | | (33) | % | | 70,438 | | | 104,272 | | | (32) | % |
| Income tax provision | 9,274 | | | 10,030 | | | (8) | % | | 13,448 | | | (31) | % | | 19,304 | | | 27,129 | | | (29) | % |
| Net income | $ | 25,270 | | | $ | 25,864 | | | (2) | % | | $ | 38,022 | | | (34) | % | | $ | 51,134 | | | $ | 77,143 | | | (34) | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Earnings per common share – diluted | $ | 0.21 | | | $ | 0.21 | | | | | $ | 0.32 | | | | | $ | 0.42 | | | $ | 0.64 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Weighted average shares outstanding – diluted | 120,939,429 | | | 121,020,292 | | | | | 120,129,359 | | | | | 120,964,149 | | | 120,179,443 | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended | | For the Six Months Ended |
| Profitability measures (annualized): | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Return on average assets (“ROA”) | 0.59 | % | | 0.54 | % | | 0.74 | % | | 0.56 | % | | 0.78 | % |
ROA excluding notable items (1) | 0.62 | % | | 0.58 | % | | 0.74 | % | | 0.60 | % | | 0.78 | % |
| Return on average equity (“ROE”) | 4.82 | % | | 4.87 | % | | 7.34 | % | | 4.84 | % | | 7.49 | % |
ROE excluding notable items (1) | 5.07 | % | | 5.19 | % | | 7.34 | % | | 5.13 | % | | 7.49 | % |
Return on average tangible common equity (“ROTCE”) (1) | 6.20 | % | | 6.24 | % | | 9.49 | % | | 6.22 | % | | 9.70 | % |
ROTCE excluding notable items (1) | 6.53 | % | | 6.66 | % | | 9.49 | % | | 6.59 | % | | 9.70 | % |
| Net interest margin | 2.62 | % | | 2.55 | % | | 2.70 | % | | 2.58 | % | | 2.85 | % |
| Efficiency ratio (not annualized) | 69.26 | % | | 68.79 | % | | 59.05 | % | | 69.02 | % | | 60.14 | % |
Efficiency ratio excluding notable items (not annualized) (1) | 67.67 | % | | 66.81 | % | | 59.05 | % | | 67.23 | % | | 60.14 | % |
| | | | | | | | | |
(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11. |
|
| | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| 6/30/2024 | | 3/31/2024 | | 6/30/2023 |
| | | Interest | | Annualized | | | | Interest | | Annualized | | | | Interest | | Annualized |
| Average | | Income/ | | Average | | Average | | Income/ | | Average | | Average | | Income/ | | Average |
| Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost |
| INTEREST EARNING ASSETS: | | | | | | | | | | | | | | | | | |
| Loans, including loans held for sale | $ | 13,591,936 | | | $ | 209,683 | | | 6.20 | % | | $ | 13,746,219 | | | $ | 213,626 | | | 6.25 | % | | $ | 15,105,212 | | | $ | 225,671 | | | 5.99 | % |
| Investment securities | 2,175,379 | | | 16,829 | | | 3.11 | % | | 2,317,154 | | | 18,049 | | | 3.13 | % | | 2,243,614 | | | 15,534 | | | 2.78 | % |
Interest earning cash and deposits at
other banks | 428,062 | | | 5,284 | | | 4.96 | % | | 2,019,769 | | | 27,183 | | | 5.41 | % | | 1,996,924 | | | 25,295 | | | 5.08 | % |
| FHLB stock and other investments | 48,463 | | | 805 | | | 6.68 | % | | 48,136 | | | 816 | | | 6.82 | % | | 47,044 | | | 684 | | | 5.83 | % |
| Total interest earning assets | $ | 16,243,840 | | | $ | 232,601 | | | 5.76 | % | | $ | 18,131,278 | | | $ | 259,674 | | | 5.76 | % | | $ | 19,392,794 | | | $ | 267,184 | | | 5.53 | % |
| | | | | | | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | |
Money market, interest bearing demand and
savings | $ | 4,948,708 | | | $ | 48,708 | | | 3.96 | % | | $ | 5,072,782 | | | $ | 50,145 | | | 3.98 | % | | $ | 4,495,879 | | | $ | 35,051 | | | 3.13 | % |
| Time deposits | 5,921,201 | | | 73,869 | | | 5.02 | % | | 5,985,501 | | | 73,888 | | | 4.96 | % | | 6,890,035 | | | 74,673 | | | 4.35 | % |
| Total interest bearing deposits | 10,869,909 | | | 122,577 | | | 4.54 | % | | 11,058,283 | | | 124,033 | | | 4.51 | % | | 11,385,914 | | | 109,724 | | | 3.87 | % |
| FHLB and FRB borrowings | 219,402 | | | 1,430 | | | 2.62 | % | | 1,683,334 | | | 17,853 | | | 4.27 | % | | 2,177,264 | | | 23,622 | | | 4.35 | % |
Subordinated debentures and convertible
notes | 104,822 | | | 2,734 | | | 10.32 | % | | 104,493 | | | 2,741 | | | 10.38 | % | | 199,744 | | | 3,149 | | | 6.24 | % |
| Total interest bearing liabilities | $ | 11,194,133 | | | $ | 126,741 | | | 4.55 | % | | $ | 12,846,110 | | | $ | 144,627 | | | 4.53 | % | | $ | 13,762,922 | | | $ | 136,495 | | | 3.98 | % |
| Noninterest bearing demand deposits | 3,666,416 | | | | | | | 3,803,870 | | | | | | | 4,366,868 | | | | | |
| Total funding liabilities/cost of funds | $ | 14,860,549 | | | | | 3.43 | % | | $ | 16,649,980 | | | | | 3.49 | % | | $ | 18,129,790 | | | | | 3.02 | % |
| Net interest income/net interest spread | | | $ | 105,860 | | | 1.21 | % | | | | $ | 115,047 | | | 1.23 | % | | | | $ | 130,689 | | | 1.55 | % |
| Net interest margin | | | | | 2.62 | % | | | | | | 2.55 | % | | | | | | 2.70 | % |
| | | | | | | | | | | | | | | | | |
| Cost of deposits: | | | | | | | | | | | | | | | | | |
| Noninterest bearing demand deposits | $ | 3,666,416 | | | $ | — | | | — | % | | $ | 3,803,870 | | | $ | — | | | — | % | | $ | 4,366,868 | | | $ | — | | | — | % |
| Interest bearing deposits | 10,869,909 | | | 122,577 | | | 4.54 | % | | 11,058,283 | | | 124,033 | | | 4.51 | % | | 11,385,914 | | | 109,724 | | | 3.87 | % |
| Total deposits | $ | 14,536,325 | | | $ | 122,577 | | | 3.39 | % | | $ | 14,862,153 | | | $ | 124,033 | | | 3.36 | % | | $ | 15,752,782 | | | $ | 109,724 | | | 2.79 | % |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Six Months Ended | | | | | | |
| 6/30/2024 | | 6/30/2023 | | |
| | | Interest | | Annualized | | | | Interest | | Annualized | | | | | | |
| Average | | Income/ | | Average | | Average | | Income/ | | Average | | | | | | |
| Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost | | | | | | |
| INTEREST EARNING ASSETS: | | | | | | | | | | | | | | | | | |
| Loans, including loans held for sale | $ | 13,669,078 | | | $ | 423,309 | | | 6.23 | % | | $ | 15,169,939 | | | $ | 441,606 | | | 5.87 | % | | | | | | |
| Investment securities | 2,246,266 | | | 34,878 | | | 3.12 | % | | 2,246,033 | | | 30,659 | | | 2.75 | % | | | | | | |
Interest earning cash and deposits at
other banks | 1,223,916 | | | 32,467 | | | 5.33 | % | | 1,239,343 | | | 30,217 | | | 4.92 | % | | | | | | |
| FHLB stock and other investments | 48,299 | | | 1,621 | | | 6.75 | % | | 47,044 | | | 1,379 | | | 5.91 | % | | | | | | |
| Total interest earning assets | $ | 17,187,559 | | | $ | 492,275 | | | 5.76 | % | | $ | 18,702,359 | | | $ | 503,861 | | | 5.43 | % | | | | | | |
| | | | | | | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | |
Money market, interest bearing demand and
savings | $ | 5,010,745 | | | $ | 98,852 | | | 3.97 | % | | $ | 5,043,522 | | | $ | 77,276 | | | 3.09 | % | | | | | | |
| Time deposits | 5,953,351 | | | 147,758 | | | 4.99 | % | | 6,220,422 | | | 124,796 | | | 4.05 | % | | | | | | |
| Total interest bearing deposits | 10,964,096 | | | 246,610 | | | 4.52 | % | | 11,263,944 | | | 202,072 | | | 3.62 | % | | | | | | |
| FHLB and FRB borrowings | 951,368 | | | 19,283 | | | 4.08 | % | | 1,431,000 | | | 30,320 | | | 4.27 | % | | | | | | |
Subordinated debentures and convertible
notes | 104,657 | | | 5,475 | | | 10.35 | % | | 259,493 | | | 6,902 | | | 5.29 | % | | | | | | |
| Total interest bearing liabilities | $ | 12,020,121 | | | $ | 271,368 | | | 4.54 | % | | $ | 12,954,437 | | | $ | 239,294 | | | 3.73 | % | | | | | | |
| Noninterest bearing demand deposits | 3,735,143 | | | | | | | 4,513,659 | | | | | | | | | | | |
| Total funding liabilities/cost of funds | $ | 15,755,264 | | | | | 3.46 | % | | $ | 17,468,096 | | | | | 2.76 | % | | | | | | |
| Net interest income/net interest spread | | | $ | 220,907 | | | 1.22 | % | | | | $ | 264,567 | | | 1.70 | % | | | | | | |
| Net interest margin | | | | | 2.58 | % | | | | | | 2.85 | % | | | | | | |
| | | | | | | | | | | | | | | | | |
| Cost of deposits: | | | | | | | | | | | | | | | | | |
| Noninterest bearing demand deposits | $ | 3,735,143 | | | $ | — | | | — | % | | $ | 4,513,659 | | | $ | — | | | — | % | | | | | | |
| Interest bearing deposits | 10,964,096 | | | 246,610 | | | 4.52 | % | | 11,263,944 | | | 202,072 | | | 3.62 | % | | | | | | |
| Total deposits | $ | 14,699,239 | | | $ | 246,610 | | | 3.37 | % | | $ | 15,777,603 | | | $ | 202,072 | | | 2.58 | % | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| AVERAGE BALANCES: | 6/30/2024 | | 3/31/2024 | | % change | | 6/30/2023 | | % change | | 6/30/2024 | | 6/30/2023 | | % change |
| Gross loans, including loans held for sale | $ | 13,591,936 | | | $ | 13,746,219 | | | (1) | % | | $ | 15,105,212 | | | (10) | % | | $ | 13,669,078 | | | $ | 15,169,939 | | | (10) | % |
| Investment securities | 2,175,379 | | | 2,317,154 | | | (6) | % | | 2,243,614 | | | (3) | % | | 2,246,266 | | | 2,246,033 | | | — | % |
| Interest earning cash and deposits at other banks | 428,062 | | | 2,019,769 | | | (79) | % | | 1,996,924 | | | (79) | % | | 1,223,916 | | | 1,239,343 | | | (1) | % |
| Interest earning assets | 16,243,840 | | | 18,131,278 | | | (10) | % | | 19,392,794 | | | (16) | % | | 17,187,559 | | | 18,702,359 | | | (8) | % |
| Goodwill and intangible assets | 467,822 | | | 468,229 | | | — | % | | 469,515 | | | — | % | | 468,026 | | | 469,752 | | | — | % |
| Total assets | 17,256,638 | | | 19,140,775 | | | (10) | % | | 20,468,810 | | | (16) | % | | 18,198,707 | | | 19,781,806 | | | (8) | % |
| | | | | | | | | | | | | | | |
| Noninterest bearing demand deposits | 3,666,416 | | | 3,803,870 | | | (4) | % | | 4,366,868 | | | (16) | % | | 3,735,143 | | | 4,513,659 | | | (17) | % |
| Interest bearing deposits | 10,869,909 | | | 11,058,283 | | | (2) | % | | 11,385,914 | | | (5) | % | | 10,964,096 | | | 11,263,944 | | | (3) | % |
| Total deposits | 14,536,325 | | | 14,862,153 | | | (2) | % | | 15,752,782 | | | (8) | % | | 14,699,239 | | | 15,777,603 | | | — | % |
| Interest bearing liabilities | 11,194,133 | | | 12,846,110 | | | (13) | % | | 13,762,922 | | | (19) | % | | 12,020,121 | | | 12,954,437 | | | (7) | % |
| Stockholders’ equity | 2,097,108 | | | 2,126,333 | | | (1) | % | | 2,072,859 | | | 1 | % | | 2,111,720 | | | 2,059,583 | | | 3 | % |
| | | | | | | | | | | | | | | |
| LOAN PORTFOLIO COMPOSITION: | 6/30/2024 | | 3/31/2024 | | % change | | 6/30/2023 | | % change | | | | | | |
| Commercial real estate (“CRE”) loans | $ | 8,679,515 | | | $ | 8,707,673 | | | — | % | | $ | 9,192,160 | | | (6) | % | | | | | | |
| Commercial and industrial (“C&I”) loans | 3,854,284 | | | 4,041,063 | | | (5) | % | | 4,805,126 | | | (20) | % | | | | | | |
| Residential mortgage and other loans | 1,033,203 | | | 970,442 | | | 6 | % | | 867,524 | | | 19 | % | | | | | | |
| Loans receivable | 13,567,002 | | | 13,719,178 | | | (1) | % | | 14,864,810 | | | (9) | % | | | | | | |
| Loans held for sale | 61,528 | | | 2,763 | | | NM | | 49,246 | | | 25 | % | | | | | | |
| Gross loans | 13,628,530 | | | 13,721,941 | | | (1) | % | | 14,914,056 | | | (9) | % | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| CRE LOANS BY PROPERTY TYPE: | 6/30/2024 | | 3/31/2024 | | % change | | 6/30/2023 | | % change | | | | | | |
| Multi-tenant retail | $ | 1,659,083 | | | $ | 1,666,153 | | | — | % | | $ | 1,778,068 | | | (7) | % | | | | | | |
| Industrial warehouses | 1,249,255 | | | 1,221,852 | | | 2 | % | | 1,301,075 | | | (4) | % | | | | | | |
| Multifamily | 1,199,215 | | | 1,212,941 | | | (1) | % | | 1,257,971 | | | (5) | % | | | | | | |
| Gas stations and car washes | 1,007,680 | | | 1,013,708 | | | (1) | % | | 1,042,290 | | | (3) | % | | | | | | |
| Mixed-use facilities | 844,993 | | | 861,613 | | | (2) | % | | 834,948 | | | 1 | % | | | | | | |
| Hotels/motels | 795,253 | | | 786,198 | | | 1 | % | | 868,286 | | | (8) | % | | | | | | |
| Single-tenant retail | 655,540 | | | 667,898 | | | (2) | % | | 690,418 | | | (5) | % | | | | | | |
| Office | 403,861 | | | 401,392 | | | 1 | % | | 463,998 | | | (13) | % | | | | | | |
| All other | 864,635 | | | 875,918 | | | (1) | % | | 955,106 | | | (9) | % | | | | | | |
| Total CRE loans | $ | 8,679,515 | | | $ | 8,707,673 | | | — | % | | $ | 9,192,160 | | | (6) | % | | | | | | |
| | | | | | | | | | | | | | | |
| DEPOSIT COMPOSITION: | 6/30/2024 | | 3/31/2024 | | % change | | 6/30/2023 | | % change | | | | | | |
| Noninterest bearing demand deposits | $ | 3,671,192 | | | $ | 3,652,592 | | | 1 | % | | $ | 4,229,247 | | | (13) | % | | | | | | |
| Money market, interest bearing demand, and savings | 4,907,860 | | | 5,313,064 | | | (8) | % | | 4,413,079 | | | 11 | % | | | | | | |
| Time deposits | 6,132,419 | | | 5,787,761 | | | 6 | % | | 6,977,026 | | | (12) | % | | | | | | |
| Total deposits | $ | 14,711,471 | | | $ | 14,753,417 | | | — | % | | $ | 15,619,352 | | | (6) | % | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL & CAPITAL RATIOS: | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | | | | | | | |
| Total stockholders’ equity | $ | 2,111,282 | | | $ | 2,112,270 | | | $ | 2,067,998 | | | | | | | | | |
| Total capital | $ | 2,137,513 | | | $ | 2,130,033 | | | $ | 2,102,625 | | | | | | | | | |
| Common equity tier 1 ratio | 12.70 | % | | 12.47 | % | | 11.05 | % | | | | | | | | |
| Tier 1 capital ratio | 13.40 | % | | 13.17 | % | | 11.68 | % | | | | | | | | |
| Total capital ratio | 14.42 | % | | 14.19 | % | | 12.64 | % | | | | | | | | |
| Leverage ratio | 11.61 | % | | 10.42 | % | | 9.57 | % | | | | | | | | |
| Total risk weighted assets | $ | 14,828,070 | | | $ | 15,011,661 | | | $ | 16,640,323 | | | | | | | | | |
| Book value per common share | $ | 17.49 | | | $ | 17.51 | | | $ | 17.23 | | | | | | | | | |
Tangible common equity (“TCE”) per share (1) | $ | 13.61 | | | $ | 13.63 | | | $ | 13.32 | | | | | | | | | |
TCE ratio (1) | 9.72 | % | | 9.33 | % | | 8.04 | % | | | | | | | | |
| | | | | | | | | | | | | |
(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. |
| | | | | | | | | | | | | |
| ALLOWANCE FOR CREDIT LOSSES CHANGES: | Three Months Ended | | Six Months Ended |
| 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Balance at beginning of period | $ | 158,758 | | | $ | 158,694 | | | $ | 158,809 | | | $ | 172,996 | | | $ | 163,544 | | | $ | 158,694 | | | $ | 162,359 | |
| ASU 2022-02 day 1 adoption impact | — | | | — | | | — | | | — | | | — | | | — | | | (407) | |
| Provision for credit losses on loans | 1,700 | | | 3,600 | | | 1,700 | | | 16,800 | | | 8,900 | | | 5,300 | | | 10,600 | |
| Recoveries | 2,099 | | | 1,184 | | | 306 | | | 2,938 | | | 1,531 | | | 3,283 | | | 1,918 | |
| Charge offs | (6,538) | | | (4,720) | | | (2,121) | | | (33,925) | | | (979) | | | (11,258) | | | (1,474) | |
| Balance at end of period | $ | 156,019 | | | $ | 158,758 | | | $ | 158,694 | | | $ | 158,809 | | | $ | 172,996 | | | $ | 156,019 | | | $ | 172,996 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | | | |
| Allowance for unfunded loan commitments | $ | 2,543 | | | $ | 2,843 | | | $ | 3,843 | | | $ | 3,143 | | | $ | 3,081 | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Provision for credit losses on loans | $ | 1,700 | | | $ | 3,600 | | | $ | 1,700 | | | $ | 16,800 | | | $ | 8,900 | | | $ | 5,300 | | | $ | 10,600 | |
| (Credit) provision for unfunded loan commitments | (300) | | | (1,000) | | | 700 | | | 62 | | | 110 | | | (1,300) | | | 1,730 | |
| Provision for credit losses | $ | 1,400 | | | $ | 2,600 | | | $ | 2,400 | | | $ | 16,862 | | | $ | 9,010 | | | $ | 4,000 | | | $ | 12,330 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| NET LOAN CHARGE OFFS (RECOVERIES): | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| CRE loans | $ | 514 | | | $ | (497) | | | $ | 1,560 | | | $ | (2,227) | | | $ | 438 | | | $ | 17 | | | $ | 329 | |
| C&I loans | 3,900 | | | 4,072 | | | 138 | | | 33,145 | | | (1,091) | | | 7,972 | | | (895) | |
| Residential mortgage and other loans | 25 | | | (39) | | | 117 | | | 69 | | | 101 | | | (14) | | | 122 | |
| Net loan charge offs (recoveries) | $ | 4,439 | | | $ | 3,536 | | | $ | 1,815 | | | $ | 30,987 | | | $ | (552) | | | $ | 7,975 | | | $ | (444) | |
| Net charge offs (recoveries)/average loans (annualized) | 0.13 | % | | 0.10 | % | | 0.05 | % | | 0.85 | % | | (0.01) | % | | 0.12 | % | | (0.01) | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONPERFORMING ASSETS: | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | | | |
Loans on nonaccrual status (1) | $ | 67,003 | | | $ | 59,526 | | | $ | 45,204 | | | $ | 39,081 | | | $ | 61,252 | | | | | |
| Accruing delinquent loans past due 90 days or more | 273 | | | 47,290 | | | 261 | | | 21,579 | | | 15,182 | | | | | |
| Total nonperforming loans | 67,276 | | | 106,816 | | | 45,465 | | | 60,660 | | | 76,434 | | | | | |
| Other real estate owned (“OREO”) | — | | | — | | | 63 | | | 1,043 | | | 938 | | | | | |
| Total nonperforming assets | $ | 67,276 | | | $ | 106,816 | | | $ | 45,528 | | | $ | 61,703 | | | $ | 77,372 | | | | | |
| | | | | | | | | | | | | |
| Nonperforming assets/total assets | 0.39 | % | | 0.59 | % | | 0.24 | % | | 0.31 | % | | 0.38 | % | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Nonperforming loans/loans receivable | 0.50 | % | | 0.78 | % | | 0.33 | % | | 0.42 | % | | 0.51 | % | | | | |
| Nonaccrual loans/loans receivable | 0.49 | % | | 0.43 | % | | 0.33 | % | | 0.27 | % | | 0.41 | % | | | | |
| Allowance for credit losses/loans receivable | 1.15 | % | | 1.16 | % | | 1.15 | % | | 1.11 | % | | 1.16 | % | | | | |
| Allowance for credit losses/nonperforming loans | 231.91 | % | | 148.63 | % | | 349.05 | % | | 261.80 | % | | 226.33 | % | | | | |
| | | | | | | | | | | | | |
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.2 million, $10.9 million, $11.4 million, $12.1 million, and $11.9 million, at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively. | | | | |
| | | | | | | | | | | | | |
| NONACCRUAL LOANS BY TYPE: | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 | | | | |
| CRE loans | $ | 27,292 | | | $ | 37,836 | | | $ | 33,932 | | | $ | 26,687 | | | $ | 29,270 | | | | | |
| C&I loans | 33,456 | | | 15,070 | | | 5,013 | | | 4,234 | | | 23,042 | | | | | |
| Residential mortgage and other loans | 6,255 | | | 6,620 | | | 6,259 | | | 8,160 | | | 8,940 | | | | | |
| Total nonaccrual loans | $ | 67,003 | | | $ | 59,526 | | | $ | 45,204 | | | $ | 39,081 | | | $ | 61,252 | | | | | |
| | | | | | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 |
| 30 - 59 days past due | $ | 9,073 | | | $ | 2,273 | | | $ | 2,833 | | | $ | 2,906 | | | $ | 9,295 | |
| 60 - 89 days past due | 552 | | | 313 | | | 1,289 | | | 506 | | | 178 | |
| Total accruing delinquent loans 30-89 days past due | $ | 9,625 | | | $ | 2,586 | | | $ | 4,122 | | | $ | 3,412 | | | $ | 9,473 | |
| | | | | | | | | |
| | | | | | | | | |
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 |
| CRE loans | $ | 5,586 | | | $ | 1,639 | | | $ | 2,160 | | | $ | 611 | | | $ | 7,339 | |
| C&I loans | 2,530 | | | 551 | | | 1,643 | | | 1,168 | | | 990 | |
| Residential mortgage and other loans | 1,509 | | | 396 | | | 319 | | | 1,633 | | | 1,144 | |
| Total accruing delinquent loans 30-89 days past due | $ | 9,625 | | | $ | 2,586 | | | $ | 4,122 | | | $ | 3,412 | | | $ | 9,473 | |
| | | | | | | | | |
| | | | | | | | | |
| CRITICIZED LOANS: | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | 6/30/2023 |
| Special mention loans | $ | 204,167 | | | $ | 215,183 | | | $ | 178,992 | | | $ | 186,600 | | | $ | 210,806 | |
| Substandard loans | 243,635 | | | 206,350 | | | 143,449 | | | 174,161 | | | 134,203 | |
| | | | | | | | | |
| Total criticized loans | $ | 447,802 | | | $ | 421,533 | | | $ | 322,441 | | | $ | 360,761 | | | $ | 345,009 | |
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. |
|
| | | | | | | | | |
| | | | | | | | | |
| TANGIBLE COMMON EQUITY (“TCE”) | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | | | |
| Total stockholders’ equity | $ | 2,111,282 | | | $ | 2,112,270 | | | $ | 2,067,998 | | | | | |
| Less: Goodwill and core deposit intangible assets, net | (467,583) | | | (467,984) | | | (469,280) | | | | | |
| TCE | $ | 1,643,699 | | | $ | 1,644,286 | | | $ | 1,598,718 | | | | | |
| | | | | | | | | |
| Total assets | $ | 17,375,091 | | | $ | 18,088,214 | | | $ | 20,366,138 | | | | | |
| Less: Goodwill and core deposit intangible assets, net | (467,583) | | | (467,984) | | | (469,280) | | | | | |
| Tangible assets | $ | 16,907,508 | | | $ | 17,620,230 | | | $ | 19,896,858 | | | | | |
| | | | | | | | | |
| TCE ratio | 9.72 | % | | 9.33 | % | | 8.04 | % | | | | |
| Common shares outstanding | 120,731,342 | | | 120,610,029 | | | 120,014,888 | | | | | |
| TCE per share | $ | 13.61 | | | $ | 13.63 | | | $ | 13.32 | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Average stockholders’ equity | $ | 2,097,108 | | | $ | 2,126,333 | | | $ | 2,072,859 | | | $ | 2,111,720 | | | $ | 2,059,583 | |
| Less: Average goodwill and core deposit intangible assets, net | (467,822) | | | (468,229) | | | (469,515) | | | (468,026) | | | (469,752) | |
| Average TCE | $ | 1,629,286 | | | $ | 1,658,104 | | | $ | 1,603,344 | | | $ | 1,643,694 | | | $ | 1,589,831 | |
| | | | | | | | | |
| Net income | $ | 25,270 | | | $ | 25,864 | | | $ | 38,022 | | | $ | 51,134 | | | $ | 77,143 | |
| ROTCE (annualized) | 6.20 | % | | 6.24 | % | | 9.49 | % | | 6.22 | % | | 9.70 | % |
| | | | | | | | | |
| | | | | | | | | |
| | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Net income | $ | 25,270 | | | $ | 25,864 | | | $ | 38,022 | | | $ | 51,134 | | | $ | 77,143 | |
| | | | | | | | | |
| Notable items: | | | | | | | | | |
| FDIC special assessment expense | (309) | | | 1,000 | | | — | | | 691 | | | — | |
| Restructuring-related costs | 576 | | | 402 | | | — | | | 978 | | | — | |
| Merger-related costs | 1,589 | | | 1,044 | | | — | | | 2,633 | | | — | |
| Total notable items | 1,856 | | | 2,446 | | | — | | | 4,302 | | | — | |
| Less: tax provision | 547 | | | 719 | | | — | | | 1,266 | | | — | |
| Total notable items, net of tax provision | $ | 1,309 | | | $ | 1,727 | | | $ | — | | | $ | 3,036 | | | $ | — | |
| | | | | | | | | |
| Net income excluding notable items | $ | 26,579 | | | $ | 27,591 | | | $ | 38,022 | | | $ | 54,170 | | | $ | 77,143 | |
| | | | | | | | | |
| Diluted common shares | 120,939,429 | | | 121,020,292 | | | 120,129,359 | | | 120,964,149 | | | 120,179,443 | |
| EPS excluding notable items | $ | 0.22 | | | $ | 0.23 | | | $ | 0.32 | | | $ | 0.45 | | | $ | 0.64 | |
| Average Assets | $ | 17,256,638 | | | $ | 19,140,775 | | | $ | 20,468,810 | | | $ | 18,198,707 | | | $ | 19,781,806 | |
| ROA excluding notable items | 0.62 | % | | 0.58 | % | | 0.74 | % | | 0.60 | % | | 0.78 | % |
| Average Equity | $ | 2,097,108 | | | $ | 2,126,333 | | | $ | 2,072,859 | | | $ | 2,111,720 | | | $ | 2,059,583 | |
| ROE excluding notable items | 5.07 | % | | 5.19 | % | | 7.34 | % | | 5.13 | % | | 7.49 | % |
| Average TCE | $ | 1,629,286 | | | $ | 1,658,104 | | | $ | 1,603,344 | | | $ | 1,643,694 | | | $ | 1,589,831 | |
| ROTCE excluding notable items | 6.53 | % | | 6.66 | % | | 9.49 | % | | 6.59 | % | | 9.70 | % |
| | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS | 6/30/2024 | | 3/31/2024 | | 6/30/2023 | | 6/30/2024 | | 6/30/2023 |
| Noninterest expense | $ | 80,987 | | | $ | 84,839 | | | $ | 87,223 | | | $ | 165,826 | | | $ | 175,957 | |
| | | | | | | | | |
| Less: notable items: | | | | | | | | | |
| FDIC special assessment expense | 309 | | | (1,000) | | | — | | | (691) | | | — | |
| Restructuring-related costs | (576) | | | (402) | | | — | | | (978) | | | — | |
| Merger-related costs | (1,589) | | | (1,044) | | | — | | | (2,633) | | | — | |
| Noninterest expense excluding notable items | $ | 79,131 | | | $ | 82,393 | | | $ | 87,223 | | | $ | 161,524 | | | $ | 175,957 | |
| | | | | | | | | |
| Revenue | $ | 116,931 | | | $ | 123,333 | | | $ | 147,703 | | | $ | 240,264 | | | $ | 292,559 | |
| Efficiency ratio excluding notable items | 67.67 | % | | 66.81 | % | | 59.05 | % | | 67.23 | % | | 60.14 | % |
| | | | | | | | | |
2024 Second Quarter Earnings Conference Call July 29, 2024
Forward Looking Statements & Additional Disclosures This presentation contains statements regarding future events or the future financial performance of Hope Bancorp, Inc. (“Company”), including regarding its proposed merger with Territorial Bancorp Inc. (“Territorial”) that 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, with respect to the proposed merger with Territorial: a low-cost core deposit base, diversification of the loan portfolio, expansion of market share, percentage earnings per share growth, capital to support growth, and statements about the proposed transaction being immediately accretive. Additionally, the forward-looking statements also relate to, among other things, expectations regarding the business and economic environment in which the Company operates, projections of future performance and financial outlook, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision, as well as statements regarding the Company’s strategic reorganization. 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,” “targets,” 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. Upon completion of the merger, the combined 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 closing of the proposed transaction is subject to regulatory approvals, the approval of the shareholders of Territorial, and other customary closing conditions. There is no assurance that such conditions will be met or that the proposed merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating the Company and Territorial and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in the Company’s 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, and regulatory risks associated with current and future regulations. 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. Additional Information About the Merger and Where to Find It In connection with the proposed merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 on June 21, 2024, which includes a preliminary Proxy Statement of Territorial Bancorp Inc., that also constitutes a preliminary prospectus of Hope Bancorp, Inc. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/. Participants in Solicitation Hope Bancorp, Inc., Territorial Bancorp and certain of their directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Hope Bancorp, Inc.’s directors and executive officers is set forth in the Proxy Statement, dated April 12, 2024 (as amended and supplemented), for its 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Territorial Bancorp’s participants is set forth in the Proxy Statement, dated April 16, 2024, for Territorial Bancorp’s 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests those participants in the solicitation of proxies in respect of the merger may be obtained by reading the Registration Statement and Proxy Statement/Prospectus filed with the SEC. 2
Strong Capital & Liquidity • Total capital ratio was 14.42% at 6/30/24, +23bps QoQ. All regulatory capital ratios expanded QoQ • Tangible common equity (“TCE”) ratio(1) was 9.72% at 6/30/24, +39bps QoQ • Pending acquisition of Hawai`i-based Territorial Bancorp (TBNK), targeting merger close by year-end 2024 Deposits • Deposits of $14.7B at 6/30/24, essentially stable QoQ • Growth in customer deposits offset planned reduction of brokered time deposits • Avg. cost of total deposits +3bps Q-o-Q, lowest rate of quarterly change since 1Q22 Loans • Gross loans of $13.6B at 6/30/24 (-$87MM QoQ). Sold $30MM of SBA loans in 2Q24 • Growth in residential mortgage loans, stable CRE loans, decrease in commercial loans • Gross loan-to-deposit ratio of 92.7% at 6/30/24 Stable Asset Quality • Nonperforming assets (“NPA”) down 37% QoQ to $67MM, or 0.39% of total assets (-20bps QoQ) • 2Q24 net charge offs of $4MM, equivalent to 0.13% of average loans annualized Earnings • 2Q24 net income: $25.3MM (-2% QoQ), or $0.21 per diluted share • 2Q24 net income excl. notable items(1): $26.6MM, or $0.22(1) per diluted share • 2Q24 notable items after tax: merger-related expenses (+$1MM), restructuring-related charges (+$406K), and a partial reversal of the prior accrual for the FDIC special assessment (-$218K) Q2 2024 Financial Overview Total Capital & TCE Ratio at 6/30/24 14.42% / 9.72% NPA/Total Assets at 6/30/24 0.39% Gross Loans at 6/30/24 $13.6B Total Deposits at 6/30/24 $14.7B 3 2Q24 Net Income & EPS $25.3MM / $0.21 Excl. notable items $26.6MM /$0.22 (1) TCE ratio, net income excluding notable items and earnings per share excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.
Strong Capital Ratios 4 Common Equity Tier 1 Capital Ratio • All capital ratios increased QoQ: All regulatory capital ratios meaningfully above requirements for “well-capitalized” financial institutions • Proforma capital very strong: Adjustments for the allowance for credit losses (“ACL”) and hypothetical adjustments for investment security marks not otherwise already reflected in equity, still result in very strong capital ratios • Dividend: Quarterly common stock dividend of $0.14 per share, or $0.56 per share annualized. Equivalent to a dividend yield of 5.21% at 6/30/24 • Strategically compelling merger pending: Fixed exchange ratio: 0.8048x HOPE shares per Territorial Bancorp Inc. (TBNK) share in an all- stock transaction. Deal value $79MM at announcement. Targeting close by year-end 2024 • Equity: Book value per common share of $17.49 & TCE per share(1) of $13.61 at 6/30/24, essentially unchanged QoQ Tangible Common Equity Ratio(1) Total Capital Ratio Leverage Ratio Well Capitalized Reg. Minimum 6.50% (1) 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 Appendix of this presentation. * Proforma ratios at 6/30/24 are non-GAAP financial measures and reflect (a) inclusion of on- and off-balance sheet ACL not already in capital; (b) treatment of held-to-maturity (“HTM”) securities as if they were available- for-sale (“AFS”), with unrealized losses in AOCI; and (c) removal of the AOCI opt-out in calculating regulatory capital. Well Capitalized Reg. Minimum 10.00% Well Capitalized Reg. Minimum 5.00%
Diverse & Granular Deposit Base 5 Noninterest Bearing Demand Deposits 25% Money Market, Interest Bearing Demand & Savings 33% Time Deposits 42% $14.7B Total Deposits (at 6/30/24) Consumer 39% Commercial & Wholesale 61% • Average commercial & wholesale deposit account size: approx. $257,000 • Average consumer deposit account size: approx. $50,000 • Consumer deposits increased 3% QoQ, to 39% of total deposits • Total deposits of $14.7B at 6/30/24, essentially stable QoQ • Customer deposit growth offset planned reduction of brokered deposits in 2Q24. Brokered deposits declined 8% QoQ Deposit Composition by Product Type Deposit Composition by Customer Type $14.7B Total Deposits (at 6/30/24)
Well-Balanced Loan Portfolio 6 Nonowner- Occupied CRE 34% Owner-Occupied CRE 21% C&I 28% Residential Mortgage & Other 8% Multifamily Residential 9% $13.6B Gross Loans (at 6/30/24) $1.0B Avg Size: $0.6MM $4.6B Avg Size: $1.8MM $2.9B Avg Size: $2.3MM $3.9B Avg Size: $1.5MM $1.2B Avg Size: $2.3MM $0.6B; <1% Loans Held for Sale • Loan portfolio well-diversified across major loan types of nonowner-occupied CRE, C&I, owner-occupied CRE, multifamily residential (“MFR”), and residential mortgage • Gross loans, including loans held for sale, were $13.6B at 6/30/24, decreased $87MM QoQ (-0.6%). Sold $30MM of SBA 7(a) loans in 2Q24 • 2Q24 QoQ trends: Growth in residential mortgage. Strong SBA loan production. CRE loan balances stable. C&I loans decreased, reflecting elevated payoffs and paydowns during the quarter. Loan pipelines and production strengthening
As a % of Total Loans: Avg Loan Size: Weighted Avg LTV(1): 12% Multi-tenant Retail $1,659MM $2.3MM 41.5% 9% Industrial & Warehouse $1,249MM $2.4MM 39.5% 9% Multifamily $1,199MM $2.2MM 63.2% 7% Gas Station & Car Wash $1,008MM $1.7MM 47.7% 6% Mixed Use $845MM $2.0MM 48.5% 6% Hotel/Motel $795MM $2.1MM 45.3% 5% Single-tenant Retail $656MM $1.4MM 46.6% 3% Office $404MM $2.2MM 53.0% 6% All Other $865MM $1.6MM 46.7% Diversified CRE Portfolio with Low LTVs Total CRE: Distribution by LTV (excl. SBA) < 50%: 55% > 50% - 55%: 12% > 55% - 60%: 11% > 60% - 65%: 7% > 65% - 70%: 5% > 70%: 10%$8.7B CRE Portfolio (at 6/30/24) 47% Weighted Avg LTV(1) (1) Weighted average loan-to-value (“LTV”): Current loan balance divided by updated collateral value. Collateral value updates most recent available appraisal by using CoStar market and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent/sq foot. • Total CRE loans of $8.7B at 6/30/24, stable QoQ. Portfolio consists of $4.6B of nonowner-occupied CRE, $2.9B of owner-occupied CRE, and $1.2B of MFR • CRE Office: Represented less than 3% of total loans at 6/30/24, with no central business district exposure 7 $8.7B CRE Portfolio (at 6/30/24)
LA Fashion District Gateway Cities San Gabriel Valley South Bay LA Koreatown Other LA County (No exposure to downtown commercial business district) Orange County San Bernardino County Riverside County Other SoCal San Francisco, $40 Greater SF Bay Area Other NorCal Manhattan Queens County Kings County Other New York New Jersey Texas Washington Illinois Other States Granular CRE Portfolio, Diversified by Submarket 8 CRE Portfolio by Geographic Submarket ($ Millions) Loan Size (at 6/30//24) Balance ($ Millions) # of Loans Average Loan Size ($ Millions) Weighted Average LTV(1) > $30MM $ 289 7 $ 41.3 62.6% $20MM - $30MM $ 675 28 $ 24.1 52.7% $10MM - $20MM $ 1,306 96 $ 13.6 52.3% $5MM - $10MM $ 1,626 241 $ 6.7 49.9% $2MM - $5MM $ 2,430 785 $ 3.1 46.2% < $2MM $ 2,354 3,211 $ 0.7 40.5% Total CRE Portfolio $ 8,680 4,368 $ 2.0 47.4% • Loan-to-value ratios are consistently low across segments by size and by property type • Vast majority of CRE loans have full recourse and personal guarantees • 98.1% of total CRE portfolio was pass-graded at 6/30/24 CRE Portfolio by Size Segment (1) Weighted average LTV: Current loan balance divided by updated collateral value. Collateral value updates most recent available appraisal by using CoStar market and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent/sq foot. $8.7B CRE Portfolio (at 6/30/24) SoCal NorCal NY/NJ Texas Washington Illinois Other States $316
Net Interest Income & Net Interest Margin 9 Net Interest Income & Net Interest Margin $131 $135 $126 $115 $106 2.70% 2.83% 2.70% 2.55% 2.62% 2Q23 3Q23 4Q23 1Q24 2Q24 2.62% 2.55% IB deposit balances decrease +5bps 2Q24 NIM change: +7bps QoQ Net Interest Income Net Interest Margin (annualized) QoQ Change in Net Interest Margin 1Q24 2Q24 -3bps Change in IB funding costs BTFP payoff: net change in cash & borrowings balances +5bps Loan balances decrease +7bps Changes in yields on loans and interest earning cash -7bps • Paid off remaining $696MM of Bank Term Funding Program (“BTFP”) borrowings, which matured on 4/5/24, using interest earning cash • 2Q24 net interest income of $106MM decreased $9MM QoQ, of which approx. ~$4MM was due to net impact from BTFP payoff • 2Q24 net interest margin (“NIM”) of 2.62% expanded +7bps QoQ. 2Q24 yield on avg. earning assets of 5.76% • 2Q24 avg. cost of total deposits of 3.39% up 3bps QoQ. Lowest quarterly rate of change in avg. cost of total deposits since 1Q22 Quarterly Rate of Change in Avg. Cost of Total Deposits 1bps 9bps 46bps 83bps 75bps 42bps 19bps 17bps 21bps 3bps 0 10 20 30 40 50 60 70 80 90 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 ($ Millions)
2.79% 2.98% 3.15% 3.36% 3.39% 3.87% 4.10% 4.32% 4.51% 4.54% 5.16% 5.43% 5.50% 5.50% 5.50% 2Q23 3Q23 4Q23 1Q24 2Q24 Cost of Total Deposits (ann.) Cost of IB Deposits (ann.) Avg Fed Funds Rate Average Loans & Deposits, Yields & Rates 10 Average Deposits Average Loans ($ Billions) ($ Billions) $15.1 $14.6 $14.1 $13.7 $13.6 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 2Q23 3Q23 4Q23 1Q24 2Q24 11.4 11.4 11.1 11.1 10.9 4.4 4.3 4.1 3.8 3.7 2Q23 3Q23 4Q23 1Q24 2Q24 Avg Interest Bearing ("IB") Deposits Avg Non IB Deposits 5.99% 6.27% 6.24% 6.25% 6.20% 5.16% 5.43% 5.50% 5.50% 5.50% 2Q23 3Q23 4Q23 1Q24 2Q24 Avg Loan Yield (annualized) Avg Fed Funds Rate Average Loan-to-Deposit Ratio 96% 93% 92% 92% 94% Average Cost of Deposits Relative to Fed Funds Rate Average Loan Yield Relative to Fed Funds Rate $14.5$14.9$15.3$15.7$15.8
2.3 2.3 2.5 2.6 2.7 1.9 2.0 7.0 5.9 6.8 5.7 6.4 5.8 2Q23 3Q23 4Q23 1Q24 2Q24 Gain from Investment in Affordable Housing Partnership Other Income & Fees Net Gains on SBA Loan Sales Service Fees on Deposit Accounts Noninterest Income 11 Noninterest Income ($ Millions) $17.0 $8.3 $9.3 $8.3 $11.1 • 2Q24 noninterest income of $11MM, up from $8MM in 1Q24 • Resumed SBA loan gain on sales (“GOS”) in 2Q24, as secondary market conditions improved – Sold $30MM of the guaranteed portion of SBA 7(a) loans during 2Q24 and recorded a net GOS of $2MM – Expecting to continue selling SBA 7(a) loans in 2H 2024 • Other income & fees included increase in unused commitment fees, and gain on sale of securities of $425,000
59.1% 60.4% 73.4% 68.8% 69.3% 62.2% 66.8% 67.7% 2Q23 3Q23 4Q23 1Q24 2Q24 Efficiency Ratio (GAAP) Efficiency Ratio (ex. notable items) 52.3 51.0 47.4 47.6 43.7 12.4 12.8 12.5 12.1 12.4 22.5 22.5 24.2 22.7 23.0 2Q23 3Q23 4Q23 1Q24 2Q24 Salary & Employee Benefits Occupancy & FF&E Other Expenses Efficiency Ratio Noninterest Expense & Efficiency 12 $87.2 $86.3(2) $84.1(2) $82.4(2) $79.1(2) Noninterest Expense(1) (excl. notable items) ($ Millions) • 2Q24 GAAP noninterest expense of $81MM (-5% QoQ) – Notable items (pre-tax): $1.6MM merger-related expenses, $576K restructuring- related costs, and $309K partial reversal of prior accrual for FDIC special assessment • Excluding notable items, 2Q24 noninterest expense of $79MM(2) down 4% QoQ and down 9% YoY • Salaries & employee benefits expense down 7% QoQ and down 16% YoY • Comparisons reflect benefits from 4Q23 restructuring (1) The Noninterest expense chart columns present noninterest expense excluding notable items. Historical noninterest expense excludes provision for unfunded loan commitments, which was reclassified to the provision for credit losses beginning 1Q24. (2) Noninterest expense excluding notable items totaled $79.1MM in 2Q24, $82.4MM in 1Q24, $84.1MM in 4Q23, and $86.3MM in 3Q23. (3) Efficiency ratio excluding notable items is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation. GAAP Noninterest Expense $86.8 $99.2 $84.8 $81.0 (3) (3)(3) (3)
$173 $159 $159 $159 $156 1.16% 1.11% 1.15% 1.16% 1.15% 2Q23 3Q23 4Q23 1Q24 2Q24 ACL ACL Coverage Ratio • Allowance for credit losses (“ACL”) totaled $156MM at 6/30/24 • ACL coverage ratio: essentially stable at 1.15% of loans receivable as of 6/30/24, vs. 1.16% as of 3/31/24 and 1.15% at 12/31/23 • Net charge off (“NCO”) ratio: remained low at 13bps of average loans, annualized, in 2Q24 • Nonperforming assets (“NPA”) of $67MM at 6/30/24, down 37% QoQ from $107MM at 3/31/24, and down 13% YoY from $77MM at 6/30/23 • NPA ratio improved QoQ to 39bps of total assets at 6/30/24, down from 59bps at 3/31/24 Asset Quality Metrics 13 Provision for Credit Losses & Net Charge Offs (Recoveries) Nonperforming Assets RatioAllowance for Credit Losses & Coverage Ratio Criticized Loans Ratio $9 $17 $2 $3 $1 ($1) $31 $2 $4 $4 (0.01)% 0.85% 0.05% 0.10% 0.13% 2Q23 3Q23 4Q23 1Q24 2Q24 Provision for Credit Losses NCO (Recovery) NCO (Recovery) Ratio (ann.) 2.32% 2.52% 2.33% 3.07% 3.30% 2Q23 3Q23 4Q23 1Q24 2Q24 Total Criticized Loans as a % of Total Loans ($ Millions) ($ Millions) 0.38% 0.31% 0.24% 0.59% 0.39% 2Q23 3Q23 4Q23 1Q24 2Q24 NPAs/Total Assets
Management’s Financial Outlook for 4Q24* vs. 4Q23 14 4Q23 actual ($ Millions) Prior Outlook as of 4/29/24 Updated Outlook for 4Q24* vs. 4Q23 actual Comments Average Loans $ 14,053 Low single-digit % growth Unchanged ▪ Continued growth from residential mortgage ▪ Strengthening loan pipelines in CRE and C&I ▪ Continued growth in SBA loan production Net Interest Income $ 126 5-7% decline ▪ One 25bps Fed Funds rate cut & Fed Funds upper target rate of 5.25% at 12/31/24 ~10% decline One 25-bps Fed Funds rate cut in Sep. 2024 & Fed Funds upper target rate of 5.25% at 12/31/24 ▪ NII from spread earned on BTFP borrowings: $4MM in 4Q23. BTFP fully paid off in 1H 2024 with interest earning cash ▪ Impact of year-to-date loan pricing & origination trends ▪ Impact of year-to-date deposit mix shift ▪ 2Q 2024 quarterly net interest income at/near trough SBA Loan Gain on Sale $ ̶ (no sales) Return to SBA sales when market conditions warrant SBA loan sale activity resumed; to continue in 2H 2024 ▪ Resumed SBA 7(a) loan sales in 2Q 2024 ▪ Expecting to continue SBA loan sale activity in 2H 2024 Noninterest Expense (1) (excluding notable items) $ 85 >5% decrease >7% decrease ▪ Benefits from reorganization and process improvements ▪ Continuing to closely manage expense spending ACL Coverage 1.15% Stable ACL coverage Unchanged ▪ Based on current economic outlook, expecting essentially stable ACL coverage: 1.15% @ 6/30/24, 1.16% @ 3/31/24 & 1.15% @ 12/31/23 Operating Leverage Stable to modest positive operating leverage in 4Q24 compared with 4Q23: Decrease in expenses + increase in gains on sale of SBA loans offset pressure from net interest income * Outlook excludes impact of pending merger with Territorial Bancorp (TBNK), announced on 4/29/24, which is expected to close by year-end 2024. * The updated Financial Outlook for 4Q24 is presented as of July 29, 2024, reflects the Company’s financial outlook for 4Q24 vs. actual results in 4Q23, and will not be updated or affirmed unless and until the Company publicly announces such update or affirmation. The Company’s financial outlook for 4Q24 is dependent on macroeconomic factors, including, but limited to, changes to market interest rates, and reflects expectations as of the date of this presentation. The Financial Outlook for 4Q24 contains forward-looking statements and actual results or conditions may differ materially and adversely from those included in the Financial Outlook for 4Q24. Please refer to the “forward-looking statements” on Slide 2 of this presentation. (1) Noninterest expense excluding notable items is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.
High single-digit % growth Targeting balanced growth across all business lines in normalized operating environment Planning to maintain loan-to- deposit ratio ~95% Loan Growth >10% Targeting annual revenue growth greater than loan growth: • Accelerated fee income growth • Expanding net interest margin due to improved funding mix & interest rate changes implied by the forward interest rate curve Revenue Growth <50% Targeting efficiency ratio improvement driven by revenue growth, expense management discipline, and operational process improvement Efficiency Ratio >1.2% Targeting attractive levels of returns driven by improved profitability Return on Avg Assets Medium-Term Financial Targets* 15 Anticipated positive impact from strategic reorganization expected to drive operational efficiencies and greater returns in the medium term. * The Medium-Term Targets reflect the Company’s current projections for 2026 and beyond. The Company’s Medium-Term Targets are presented as of July 29, 2024, reflect the Company’s current outlook for 2026 and beyond, and will not be updated or affirmed unless and until the Company publicly announces such update or affirmation. Macroeconomic assumptions underpinning the Company’s Medium-Term Targets reflect the current forward interest rate curve and assumes ongoing positive economic growth over the medium term, but at a slower pace when compared with 2023 and 2024. The Company’s Medium-Term Targets and current projections for 2026 and beyond are each dependent on macroeconomic factors, including, but not limited to, changes to market interest rates, and reflects expectations as of the date of this presentation. The Medium-Term Targets and macroeconomic assumptions contain forward-looking statements and actual results or conditions may differ materially and adversely from those included in the Medium-Term Targets. Please refer to the “forward-looking statements” on Slide 2 of this presentation.
Appendix 16
Summary Balance Sheet 17 ($ in millions, except per share data) 6/30/24 3/31/24 QoQ % change 6/30/23 YoY % change Cash and due from banks $ 654.0 $ 1,185.3 (44.8)% $ 2,302.3 (71.6)% Investment securities 2,172.9 2,278.0 (4.6)% 2,186.3 (0.6)% Federal Home Loan Bank (“FHLB”) stock and other investments 61.5 61.2 0.6 % 60.2 2.2 % Gross loans 13,635.3 13,721.9 (0.6)% 14,914.1 (8.6)% Allowance for credit losses (156.0) (158.8) (1.7)% (173.0) (9.8)% Goodwill and intangible assets 467.6 468.0 (0.1) % 469.3 (0.4) % Other assets 539.8 532.6 1.4 % 606.9 (11.1)% Total assets $ 17,375.1 $ 18,088.2 (3.9)% $ 20,366.1 (14.7)% Deposits $ 14,711.5 $ 14,753.4 (0.3)% $ 15,619.4 (5.8)% Borrowings & other debt 278.9 904.2 (69.2)% 2,367.6 (88.2)% Other liabilities 273.4 318.3 (14.1)% 311.2 (12.1)% Total liabilities $ 15,263.8 $ 15,975.9 (4.5)% $ 18,298.1 (16.6)% Total stockholders’ equity 2,111.3 2,112.3 — % 2,098.0 2.1 % Book value per share $17.49 $17.51 — % $17.23 1.5 % Tangible common equity (“TCE”) per share(1) $13.61 $13.63 — % $13.32 2.2 % Tangible common equity ratio(1) 9.72% 9.33% 8.04% Loan-to-deposit ratio 92.7% 93.0% 95.5% (1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.
Summary Income Statement 18 ($ in thousands, except per share and share data) 2Q24 1Q24 QoQ % change 2Q23 YoY % change Net interest income before provision for credit losses $ 105,860 $ 115,047 (8)% $ 130,689 (19)% Provision for credit losses 1,400 2,600 (46)% 9,010 (84)% Net interest income after provision for credit losses 104,460 112,447 (7)% 121,679 (14)% Noninterest income 11,071 8,286 34 % 17,014 (35)% Noninterest expense 80,987 84,839 (5)% 87,223 (7)% Noninterest expense excluding notable items(1) 79,131 82,393 (4)% 87,223 (9)% Income before income taxes 34,544 35,894 (4)% 51,470 (33)% Income tax provision 9,274 10,030 (8)% 13,448 (31)% Net income $ 25,270 $ 25,864 (2)% $ 38,022 (34)% Net income excluding notable items(1) $ 26,579 $ 27,591 (4)% $ 38,022 (30)% Earnings Per Common Share - Diluted $0.21 $0.21 $0.32 Earnings Per Common Share excluding notable items(1) - Diluted $0.22 $0.23 $0.32 Weighted Average Shares Outstanding - Diluted 120,939,429 121,020,292 120,129,359 (1) Noninterest expense excluding notable items, net income excluding notable items, and diluted earnings per common share excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.
Appendix: Non-GAAP Financial Measures Reconciliation Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below. Tangible Common Equity (TCE) 19 Return on Average Tangible Common Equity (ROTCE) ($ in thousands, except per share info) 2Q24 1Q24 2Q23 Total stockholders’ equity $ 2,111,282 $ 2,112,270 $ 2,067,998 Less: Goodwill and core deposit intangible assets, net (467,583) (467,984) (469,280) TCE $ 1,643,699 $ 1,644,286 $ 1,598,718 Total assets $ 17,375,091 $ 18,088,214 $ 20,366,138 Less: Goodwill and core deposit intangible assets, net (467,583) (467,984) (469,280) Tangible assets $ 16,907,508 $ 17,620,230 $ 19,896,858 TCE ratio 9.72% 9.33% 8.04% Common shares outstanding 120,731,342 120,610,029 120,014,888 TCE per share $ 13.61 $ 13.63 $ 13.32 ($ in thousands) 2Q24 1Q24 2Q23 Average stockholders’ equity $ 2,097,108 $ 2,126,333 $ 2,072,859 Less: Average goodwill and core deposit intangible assets, net (467,822) (468,229) (469,515) Average TCE $ 1,629,286 $ 1,658,104 $ 1,603,344 Net income $ 25,270 $ 25,864 $ 38,022 ROTCE (annualized) 6.20% 6.24% 9.49%
Appendix: Non-GAAP Financial Measures Reconciliation (cont’d) 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. 20 ($ in thousands) 2Q24 1Q24 2Q23 Noninterest expense $ 80,987 $ 84,839 $ 87,223 Less: notable items: FDIC special assessment expense 309 (1,000) ̶ Restructuring-related costs (576) (402) ̶ Merger-related costs (1,589) (1,044) ̶ Noninterest expense excluding notable items $ 79,131 $ 82,393 $ 87,223 Revenue $ 116,931 $ 123,333 $ 147,703 Efficiency ratio excluding notable items 67.67% 66.81% 59.05% Efficiency Ratio Excluding Notable Items ($ in thousands) 2Q24 1Q24 2Q23 Net income $ 25,270 $ 25,864 $ 38,022 Notable items: FDIC special assessment expense (309) 1,000 ̶ Restructuring-related costs 576 402 ̶ Merger-related costs 1,589 1,044 ̶ Total notable items 1,856 2,446 ̶ Less: tax provision 441 719 ̶ Total notable items, net of tax provision $ 1,309 $ 1,727 $ ̶ Net income excluding notable items $ 26,579 $ 27,591 $ 38,022 Diluted common shares 120,939,429 121,020,292 120,129,359 EPS excluding notable items $ $0.22 $ $0.23 $ 0.32 Average assets 17,256,638 19,140,775 20,468,810 ROA excluding notable items 0.62% 0.58% 0.74% Average equity 2,097,108 2,126,333 2,072,859 ROE excluding notable items 5.07% 5.19% 7.34% Average TCE $ 1,629,286 $ 1,658,104 $ 1,603,344 ROTCE excluding notable items 6.53% 6.66% 9.49% Profitability Ratios Excluding Notable Items
News Release
HOPE BANCORP DECLARES QUARTERLY CASH DIVIDEND OF $0.14 PER SHARE
LOS ANGELES - July 29, 2024 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE) today announced that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The dividend is payable on or about August 22, 2024, to all stockholders of record as of the close of business on August 8, 2024.
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 $17.38 billion in total assets as of June 30, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 48 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Contacts:
| | | | | | | | |
Julianna Balicka | | Angie Yang |
| EVP & Chief Financial Officer | | SVP, Director of Investor Relations & Corporate Communications |
213-235-3235 | | 213-251-2219 |
julianna.balicka@bankofhope.com | | angie.yang@bankofhope.com |
# # #
v3.24.2
| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
Hope Bancorp (NASDAQ:HOPE)
過去 株価チャート
から 3 2025 まで 4 2025
Hope Bancorp (NASDAQ:HOPE)
過去 株価チャート
から 4 2024 まで 4 2025
