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Hope Bancorp Reports 2022 Fourth Quarter and Full-Year Financial Results

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and full year ended December 31, 2022.

For the three months ended December 31, 2022, net income totaled $51.7 million, or $0.43 per diluted common share. This compares with net income of $53.7 million, or $0.45 per diluted common share, in the preceding third quarter and $51.6 million, or $0.43 per diluted common share, in the year-ago fourth quarter. Pre-provision net revenue(1) totaled $78.1 million for the 2022 fourth quarter, versus $82.6 million for the 2022 third quarter and $72.2 million for the 2021 fourth quarter.

For the full year ended December 31, 2022, net income totaled $218.3 million, or $1.81 per diluted common share, compared with $204.6 million, or $1.66 per diluted common share for the year ended December 31, 2021. Pre-provision net revenue for the full year 2022 increased 16.2% to $305.6 million from $263.1 million for 2021.

“Notwithstanding the operating environment becoming more challenging during the fourth quarter of 2022, we delivered solid financial results which reflect the benefits of the lower-risk, more diversified loan portfolio that we have built,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Given the market’s expectations for the economic conditions to weaken further in 2023, we became even more selective with the loans that we added to the portfolio in terms of loan types and rates. New loan originations for the fourth quarter of 2022 totaled $793 million with commercial loans accounting for 54% of new production. While we had a slight decline in our loans receivable quarter-over-quarter, we closed the year with loans increasing more than 10% year-over-year, or greater than 12% when excluding SBA PPP loans. Total deposits increased 2% quarter-over-quarter, but the growth reflects increased balances of time deposits, representing in part the migration to higher-yielding deposit accounts in the current interest rate environment. The highlight of our fourth quarter was clearly the continued improvements we are experiencing in our asset quality with total nonperforming assets and total criticized loans decreasing 28% and 8%, respectively, quarter-over-quarter.

“While we are cognizant that 2023 will bring further challenges, we believe the progress we have made to strengthen and diversify our franchise over the past few years will serve us well with more sustainable earnings power. We are confident in our ability to continue strengthening franchise value during an economic downturn, while generating profitable growth that will further enhance long-term shareholder value,” said Kim.

Q4 2022 Highlights

  • Loan originations totaled $793.4 million, representing a well-diversified mix of new loan production with new commercial loans accounting for 54% of total originations for the quarter.
  • Loans receivable decreased 0.6% quarter-over-quarter, but increased 10.4% year-over-year. Excluding PPP, loans receivable decreased 0.5% quarter-over-quarter, but increased 12.2% year-over-year.
  • Criticized loan balances decreased 8.0% quarter-over-quarter, or 47.7% year-over-year.
  • Total nonperforming assets declined 28.4% quarter-over-quarter and represented 0.36% of total assets at year-end.
  • Company recorded a provision for credit losses of $8.2 million, primarily to account for declines in certain projected macroeconomic factors.
  • Net interest income decreased 1.7% quarter-over-quarter, but increased 12.9% year-over-year.
  • Net interest margin decreased 13 basis points quarter-over-quarter, but increased 23 basis points year-over-year.
  • Total deposits increased 1.5% quarter-over-quarter and 4.6% year-over-year.
  • Total cost of deposits increased 83 basis points quarter-over-quarter and 139 basis points year-over-year, reflecting the impact of an aggregate increase of 425 basis points in the Federal Funds target rates during 2022.
  • Pre-provision net revenue decreased 5.5% quarter-over-quarter, but increased 8.2% year-over-year.

______________

(1) Pre-provision net revenue, a non-GAAP financial measure, represents the sum of net interest income before provision (credit) for credit losses and noninterest income less noninterest expense. Management’s reasons and purposes for using this non-GAAP financial measure are set forth on Page 7 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to this non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.

Financial Highlights

 

At or for the Three Months Ended

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

12/31/2022

 

9/30/2022

 

12/31/2021

Net income

$

51,703

 

 

$

53,748

 

 

$

51,623

 

Diluted earnings per share

$

0.43

 

 

$

0.45

 

 

$

0.43

 

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

$

78,113

 

 

$

82,627

 

 

$

72,179

 

Net interest income before provision for credit losses

$

150,521

 

 

$

153,186

 

 

$

133,318

 

Net interest margin

 

3.36

%

 

 

3.49

%

 

 

3.13

%

Noninterest income

$

12,110

 

 

$

13,355

 

 

$

13,097

 

Noninterest expense

$

84,518

 

 

$

83,914

 

 

$

74,236

 

Net loans receivable

$

15,241,181

 

 

$

15,330,626

 

 

$

13,812,193

 

Deposits

$

15,738,801

 

 

$

15,502,209

 

 

$

15,040,450

 

Total cost of deposits

 

1.62

%

 

 

0.79

%

 

 

0.23

%

Nonaccrual loans(2)

$

49,687

 

 

$

64,571

 

 

$

54,616

 

Nonperforming loans to loans receivable(2)

 

0.44

%

 

 

0.62

%

 

 

0.78

%

ACL to loans receivable

 

1.05

%

 

 

1.04

%

 

 

1.01

%

ACL to nonaccrual loans(2)

 

326.76

%

 

 

248.66

%

 

 

257.34

%

ACL to nonperforming assets(2)

 

233.82

%

 

 

165.55

%

 

 

125.76

%

Provision for credit losses

$

8,200

 

 

$

9,200

 

 

$

1,500

 

Net charge offs (recoveries)

$

6,402

 

 

$

219

 

 

$

(2,276

)

Return on average assets (“ROA”)

 

1.10

%

 

 

1.17

%

 

 

1.16

%

Return on average equity (“ROE”)

 

10.35

%

 

 

10.58

%

 

 

9.93

%

ROA (PPNR) (1)

 

1.66

%

 

 

1.79

%

 

 

1.62

%

ROE (PPNR) (1)

 

15.64

%

 

 

16.26

%

 

 

13.88

%

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

 

13.54

%

 

 

13.77

%

 

 

12.85

%

Noninterest expense / average assets

 

1.79

%

 

 

1.82

%

 

 

1.67

%

Efficiency ratio

 

51.97

%

 

 

50.39

%

 

 

50.70

%

(1)

Pre-provision net revenue, ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Page 10 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

(2)

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

Operating Results for the 2022 Fourth Quarter

Net interest income before provision for credit losses for the 2022 fourth quarter decreased 2% to $150.5 million from $153.2 million in the 2022 third quarter and increased 13% from $133.3 million in the 2021 fourth quarter. The Company attributed the quarter-over-quarter decrease predominantly to higher interest expense on deposits and borrowings, which more than offset higher levels of interest income due to increases in loan yields and the average balance of loans receivable.

The net interest margin for the 2022 fourth quarter decreased 13 basis points to 3.36% from 3.49% in the preceding third quarter as the increase in the cost of deposits outpaced the expansion of the yields on interest-earning assets. Compared with the year-ago fourth quarter, the net interest margin increased 23 basis points.

The weighted average yield on loans for the 2022 fourth quarter was 5.36%, up 71 basis points from 4.65% in the 2022 third quarter and up 141 basis points from the year-ago fourth quarter. The Company attributed the increases in weighted average yield on loans to the repricing of its variable rate loans following the increases in the market interest rates, as well as a significant increase in the average rate of new loans originated during the quarter and throughout the year.

The weighted average cost of deposits for the 2022 fourth quarter increased by 83 basis points to 1.62% from 0.79% in the 2022 third quarter, reflecting a 119 basis point increase in the cost of interest bearing deposits due to the accelerated pace of Federal Funds target rate hikes in the second half of the year. Compared with the year-ago fourth quarter, the weighted average cost of deposits for the 2022 fourth quarter increased 139 basis points from 0.23%, reflecting a 205 basis point increase in the cost of interest bearing deposits.

Noninterest income for the 2022 fourth quarter decreased 9% to $12.1 million from $13.4 million in the 2022 third quarter. Quarter-over-quarter reductions in the net gains on sales of SBA loans, service fees on deposit accounts and other income and fees were partially offset by an increase in net gains on sales of other loans. The decrease in other income and fees largely reflects lower swap fee income versus the preceding third quarter. During the 2022 fourth quarter, the Company sold $41.2 million in the guaranteed portion of SBA 7(a) loans and $3.5 million in retail mortgage loans, compared with $57.8 million and $3.7 million, respectively, sold in the preceding third quarter. Noninterest income for the 2021 fourth quarter totaled $13.1 million.

Noninterest expense for the 2022 fourth quarter increased 1% to $84.5 million from $83.9 million for the preceding third quarter and increased 14% from $74.2 million for the year-ago fourth quarter. The quarter-over-quarter increase largely reflects higher costs associated with earnings credit rebates. The year-over-year increase is attributed to higher salaries and employee benefits and higher costs of earnings credit rebates.

Salaries and employee benefits expense for the 2022 fourth quarter decreased to $52.7 million from $53.2 million in the preceding third quarter, largely reflecting a decrease in incentive compensation expense. Salaries and employee benefits expense for the 2021 fourth quarter totaled $44.6 million. The Company’s FTE count was 1,549 at December 31, 2022, 1,539 at September 30, 2022 and 1,476 at December 31, 2021.

Earnings credit rebates for the 2022 fourth quarter increased to $5.0 million from $4.7 million in the 2022 third quarter and $555,000 in the 2021 fourth quarter, as a result of the increases in the Federal Funds rates.

The Company’s efficiency ratio for the 2022 fourth quarter was 51.97%, compared with 50.39% in the preceding third quarter and 50.70% in the year-ago fourth quarter. Noninterest expense as a percentage of average assets was 1.79% for the 2022 fourth quarter, compared with 1.82% for the 2022 third quarter and 1.67% for the 2021 fourth quarter.

The effective tax rate for the 2022 fourth quarter was 26.1%, compared with 26.8% for the preceding third quarter and 27.0% for the year-ago fourth quarter.

Balance Sheet Summary

New loan originations during the 2022 fourth quarter totaled $793.4 million, compared with $1.35 billion in the preceding third quarter and $1.24 billion in the 2021 fourth quarter.

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

 

For the Three Months Ended

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Commercial real estate

$

302,983

 

$

500,826

 

$

573,978

Commercial

 

424,340

 

 

732,341

 

 

532,634

SBA

 

28,825

 

 

47,428

 

 

54,848

Residential mortgage

 

36,720

 

 

67,079

 

 

81,325

Consumer

 

555

 

 

1,020

 

 

70

Total new loan originations

$

793,423

 

$

1,348,694

 

$

1,242,855

At December 31, 2022, loans receivable decreased 0.6% to $15.40 billion from $15.49 billion at September 30, 2022, but increased 10.4% from $13.95 billion at December 31, 2021.

Following is the loan portfolio composition and percentage of total loans as of December 31, 2022, September 30, 2022 and December 31, 2021:

(dollars in thousands)

12/31/2022

 

9/30/2022

 

12/31/2021

(unaudited)

Balance

 

Percentage

 

Balance

 

Percentage

 

Balance

 

Percentage

Commercial loans

$

5,109,532

 

33.2

%

 

$

5,124,421

 

33.1

%

 

$

4,208,674

 

30.2

%

Real estate loans

 

9,414,580

 

61.1

%

 

 

9,504,893

 

61.3

%

 

 

9,105,931

 

65.3

%

Consumer and other loans

 

879,428

 

5.7

%

 

 

861,873

 

5.6

%

 

 

638,138

 

4.5

%

Loans receivable

$

15,403,540

 

100.0

%

 

$

15,491,187

 

100.0

%

 

$

13,952,743

 

100.0

%

Total deposits at December 31, 2022 increased 1.5% to $15.74 billion from $15.50 billion at September 30, 2022, largely reflecting an increase in time deposits, and increased 4.6% year-over-year from $15.04 billion at December 31, 2021. Quarter-over-quarter, noninterest bearing demand and money market and NOW deposits decreased 13.3% and 4.6%, respectively, but these decreases were more than offset by a 34.6% increase in time deposits. On a year-over-year basis, noninterest bearing demand deposits at December 31, 2022 decreased 15.7%, money market and NOW deposits decreased 9.1%, and time deposits increased 79.0%.

Following is the deposit composition as of December 31, 2022, September 30, 2022 and December 31, 2021:

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Noninterest bearing demand deposits

$

4,849,493

 

$

5,590,952

 

$

5,751,870

Money market and other

 

5,615,784

 

 

5,885,093

 

 

6,178,850

Saving deposits

 

283,464

 

 

317,841

 

 

321,377

Time deposits

 

4,990,060

 

 

3,708,323

 

 

2,788,353

Total deposit balances

$

15,738,801

 

$

15,502,209

 

$

15,040,450

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

 

Deposit Breakdown

 

Cost of Deposits

(unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

 

Q4 2022

 

Q3 2022

 

Q4 2021

Noninterest bearing demand deposits

30.8

%

 

36.1

%

 

38.3

%

 

%

 

%

 

%

Money market and other

35.7

%

 

38.0

%

 

41.1

%

 

2.42

%

 

1.24

%

 

0.37

%

Saving deposits

1.8

%

 

2.0

%

 

2.1

%

 

1.29

%

 

1.18

%

 

1.18

%

Time deposits

31.7

%

 

23.9

%

 

18.5

%

 

2.53

%

 

1.27

%

 

0.34

%

Total deposit balances

100.0

%

 

100.0

%

 

100.0

%

 

1.62

%

 

0.79

%

 

0.23

%

Allowance for Credit Losses

For the 2022 fourth quarter, the Company recorded a provision for credit losses of $8.2 million, compared with $9.2 million in the preceding third quarter and $1.5 million in the 2021 fourth quarter.

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

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Allowance for credit losses

$

162,359

 

 

$

160,561

 

 

$

140,550

 

Allowance for credit loss/loans receivable

 

1.05

%

 

 

1.04

%

 

 

1.01

%

Allowance for credit losses/nonperforming loans (1)

 

242.26

%

 

 

168.11

%

 

 

128.75

%

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.8 million, $9.9 million and $19.5 million at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

Credit Quality

Following are the components of nonperforming assets as of December 31, 2022, September 30, 2022 and December 31, 2021:

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Loans on nonaccrual status (1)

$

49,687

 

$

64,571

 

$

54,616

Delinquent loans 90 days or more on accrual status

 

401

 

 

5,306

 

 

2,131

Accruing troubled debt restructured loans

 

16,931

 

 

25,631

 

 

52,418

Total nonperforming loans

 

67,019

 

 

95,508

 

 

109,165

Other real estate owned

 

2,418

 

 

1,480

 

 

2,597

Total nonperforming assets

$

69,437

 

$

96,988

 

$

111,762

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.8 million, $9.9 million and $19.5 million at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

Total nonperforming assets at December 31, 2022 decreased 28.4% to $69.4 million from $97.0 million at September 30, 2022 and decreased 37.9% from $111.8 million at December 31, 2021.

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

 

For the Three Months Ended

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Net charge offs (recoveries)

$

6,402

 

 

$

219

 

 

$

(2,276

)

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

 

0.17

%

 

 

0.01

%

 

 

(0.07

)%

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

(dollars in thousands) (unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Special mention

$

157,263

 

$

79,399

 

$

257,194

Substandard

 

104,073

 

 

204,713

 

 

242,397

Total criticized loans

$

261,336

 

$

284,112

 

$

499,591

At December 31, 2022, total criticized loans decreased 8.0% quarter-over-quarter and decreased 47.7% year-over-year, representing the lowest level experienced by the Company since 2011.

Capital

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

(unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

 

Minimum Guideline for “Well-Capitalized” Bank

Common Equity Tier 1 Capital

10.55%

 

10.32%

 

11.03%

 

6.50%

Tier 1 Leverage Ratio

10.15%

 

10.25%

 

10.11%

 

5.00%

Tier 1 Risk-Based Ratio

11.15%

 

10.92%

 

11.70%

 

8.00%

Total Risk-Based Ratio

11.97%

 

11.72%

 

12.42%

 

10.00%

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

(unaudited)

12/31/2022

 

9/30/2022

 

12/31/2021

Tangible common equity per share (1)

$12.96

 

$12.60

 

$13.51

Tangible common equity to tangible assets (1)

8.29%

 

8.09%

 

9.31%

(1)

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

Non-GAAP Financial Metrics

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

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, January 24, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter and full year ended December 31, 2022. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through January 31, 2023, replay access code 9204177.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.16 billion in total assets as of December 31, 2022. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Forward-Looking Statements

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

Hope Bancorp, Inc.

Selected Financial Data

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

 

Assets:

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

Cash and due from banks

$

506,776

 

 

$

331,336

 

 

53

%

 

$

316,266

 

 

60

%

Investment securities

 

2,243,195

 

 

 

2,264,533

 

 

(1

)%

 

 

2,666,275

 

 

(16

)%

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

 

61,761

 

 

 

65,192

 

 

(5

)%

 

 

87,961

 

 

(30

)%

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

 

49,245

 

 

 

41,989

 

 

17

%

 

 

99,049

 

 

(50

)%

Loans receivable

 

15,403,540

 

 

 

15,491,187

 

 

(1

)%

 

 

13,952,743

 

 

10

%

Allowance for credit losses

 

(162,359

)

 

 

(160,561

)

 

1

%

 

 

(140,550

)

 

16

%

Net loans receivable

 

15,241,181

 

 

 

15,330,626

 

 

(1

)%

 

 

13,812,193

 

 

10

%

Accrued interest receivable

 

55,460

 

 

 

42,363

 

 

31

%

 

 

41,842

 

 

33

%

Premises and equipment, net

 

46,859

 

 

 

46,169

 

 

1

%

 

 

45,667

 

 

3

%

Bank owned life insurance

 

77,078

 

 

 

76,788

 

 

%

 

 

77,081

 

 

%

Goodwill

 

464,450

 

 

 

464,450

 

 

%

 

 

464,450

 

 

%

Servicing assets

 

11,628

 

 

 

11,601

 

 

%

 

 

10,418

 

 

12

%

Other intangible assets, net

 

5,726

 

 

 

6,212

 

 

(8

)%

 

 

7,671

 

 

(25

)%

Other assets

 

401,132

 

 

 

402,129

 

 

%

 

 

260,188

 

 

54

%

Total assets

$

19,164,491

 

 

$

19,083,388

 

 

%

 

$

17,889,061

 

 

7

%

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

15,738,801

 

 

$

15,502,209

 

 

2

%

 

$

15,040,450

 

 

5

%

FHLB and FRB borrowings

 

865,000

 

 

 

1,072,000

 

 

(19

)%

 

 

300,000

 

 

188

%

Convertible notes, net

 

217,148

 

 

 

216,913

 

 

%

 

 

216,209

 

 

%

Subordinated debentures

 

106,565

 

 

 

106,258

 

 

%

 

 

105,354

 

 

1

%

Accrued interest payable

 

26,668

 

 

 

11,713

 

 

128

%

 

 

4,272

 

 

524

%

Other liabilities

 

190,981

 

 

 

198,570

 

 

(4

)%

 

 

129,793

 

 

47

%

Total liabilities

$

17,145,163

 

 

$

17,107,663

 

 

%

 

$

15,796,078

 

 

9

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

$

137

 

 

$

137

 

 

%

 

$

136

 

 

1

%

Capital surplus

 

1,431,003

 

 

 

1,428,052

 

 

%

 

 

1,421,698

 

 

1

%

Retained earnings

 

1,083,712

 

 

 

1,048,738

 

 

3

%

 

 

932,561

 

 

16

%

Treasury stock, at cost

 

(264,667

)

 

 

(264,667

)

 

%

 

 

(250,000

)

 

(6

)%

Accumulated other comprehensive (loss) gain, net

 

(230,857

)

 

 

(236,535

)

 

2

%

 

 

(11,412

)

 

(1,923

)%

Total stockholders’ equity

 

2,019,328

 

 

 

1,975,725

 

 

2

%

 

 

2,092,983

 

 

(4

)%

Total liabilities and stockholders’ equity

$

19,164,491

 

 

$

19,083,388

 

 

%

 

$

17,889,061

 

 

7

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

 

150,000,000

 

 

 

150,000,000

 

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

 

119,495,209

 

 

 

119,479,253

 

 

 

 

 

120,006,452

 

 

 

Treasury stock shares

 

17,382,835

 

 

 

17,382,835

 

 

 

 

 

16,343,849

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

 

12/31/2022

 

12/31/2021

 

% change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

207,958

 

 

$

175,078

 

19

%

 

$

133,821

 

55

%

 

$

660,732

 

$

528,174

 

 

25

%

Interest on investment securities

 

14,758

 

 

 

13,498

 

9

%

 

 

10,657

 

38

%

 

 

52,220

 

 

35,492

 

 

47

%

Interest on federal funds sold and other investments

 

1,521

 

 

 

606

 

151

%

 

 

691

 

120

%

 

 

3,163

 

 

2,866

 

 

10

%

Total interest income

 

224,237

 

 

 

189,182

 

19

%

 

 

145,169

 

54

%

 

 

716,115

 

 

566,532

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

63,276

 

 

 

30,667

 

106

%

 

 

8,905

 

611

%

 

 

114,839

 

 

42,011

 

 

173

%

Interest on other borrowings and convertible notes

 

10,440

 

 

 

5,329

 

96

%

 

 

2,946

 

254

%

 

 

22,855

 

 

11,751

 

 

94

%

Total interest expense

 

73,716

 

 

 

35,996

 

105

%

 

 

11,851

 

522

%

 

 

137,694

 

 

53,762

 

 

156

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision (credit) for credit losses

 

150,521

 

 

 

153,186

 

(2

)%

 

 

133,318

 

13

%

 

 

578,421

 

 

512,770

 

 

13

%

Provision (credit) for credit losses

 

8,200

 

 

 

9,200

 

(11

)%

 

 

1,500

 

447

%

 

 

9,600

 

 

(12,200

)

 

N/A

 

Net interest income after provision (credit) for credit losses

 

142,321

 

 

 

143,986

 

(1

)%

 

 

131,818

 

8

%

 

 

568,821

 

 

524,970

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

2,159

 

 

 

2,535

 

(15

)%

 

 

1,894

 

14

%

 

 

8,938

 

 

7,275

 

 

23

%

International service fees

 

762

 

 

 

834

 

(9

)%

 

 

1,061

 

(28

)%

 

 

3,134

 

 

3,586

 

 

(13

)%

Loan servicing fees, net

 

928

 

 

 

981

 

(5

)%

 

 

747

 

24

%

 

 

3,588

 

 

3,367

 

 

7

%

Wire transfer fees

 

863

 

 

 

856

 

1

%

 

 

916

 

(6

)%

 

 

3,477

 

 

3,519

 

 

(1

)%

Net gains on sales of SBA loans

 

2,154

 

 

 

2,782

 

(23

)%

 

 

3,614

 

(40

)%

 

 

16,343

 

 

8,448

 

 

93

%

Net gains on sales of residential mortgage loans

 

20

 

 

 

29

 

(31

)%

 

 

530

 

(96

)%

 

 

882

 

 

4,435

 

 

(80

)%

Net gains on sales of other loans

 

623

 

 

 

117

 

432

%

 

 

 

100

%

 

 

193

 

 

 

 

100

%

Other income and fees

 

4,601

 

 

 

5,221

 

(12

)%

 

 

4,335

 

6

%

 

 

14,842

 

 

12,964

 

 

14

%

Total noninterest income

 

12,110

 

 

 

13,355

 

(9

)%

 

 

13,097

 

(8

)%

 

 

51,397

 

 

43,594

 

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

52,694

 

 

 

53,222

 

(1

)%

 

 

44,608

 

18

%

 

 

204,719

 

 

175,151

 

 

17

%

Occupancy

 

7,072

 

 

 

6,682

 

6

%

 

 

7,391

 

(4

)%

 

 

28,267

 

 

28,898

 

 

(2

)%

Furniture and equipment

 

5,045

 

 

 

4,967

 

2

%

 

 

4,642

 

9

%

 

 

19,434

 

 

18,079

 

 

7

%

Advertising and marketing

 

1,869

 

 

 

1,739

 

7

%

 

 

2,329

 

(20

)%

 

 

7,470

 

 

8,707

 

 

(14

)%

Data processing and communications

 

2,860

 

 

 

2,469

 

16

%

 

 

2,789

 

3

%

 

 

10,683

 

 

10,331

 

 

3

%

Professional fees

 

1,325

 

 

 

1,196

 

11

%

 

 

2,439

 

(46

)%

 

 

6,314

 

 

12,168

 

 

(48

)%

FDIC assessment

 

1,596

 

 

 

1,633

 

(2

)%

 

 

1,366

 

17

%

 

 

6,248

 

 

5,109

 

 

22

%

Credit related expenses

 

1,040

 

 

 

873

 

19

%

 

 

873

 

19

%

 

 

5,897

 

 

4,400

 

 

34

%

OREO (income) expense

 

(425

)

 

 

378

 

N/A

 

 

 

811

 

N/A

 

 

 

315

 

 

1,638

 

 

(81

)%

Software impairment

 

 

 

 

 

%

 

 

 

%

 

 

 

 

2,146

 

 

(100

)%

Earnings credit rebates

 

5,002

 

 

 

4,685

 

7

%

 

 

555

 

801

%

 

 

10,998

 

 

1,842

 

 

497

%

Other

 

6,440

 

 

 

6,070

 

6

%

 

 

6,433

 

%

 

 

23,825

 

 

24,823

 

 

(4

)%

Total noninterest expense

 

84,518

 

 

 

83,914

 

1

%

 

 

74,236

 

14

%

 

 

324,170

 

 

293,292

 

 

11

%

Income before income taxes

 

69,913

 

 

 

73,427

 

(5

)%

 

 

70,679

 

(1

)%

 

 

296,048

 

 

275,272

 

 

8

%

Income tax provision

 

18,210

 

 

 

19,679

 

(7

)%

 

 

19,056

 

(4

)%

 

 

77,771

 

 

70,700

 

 

10

%

Net income

$

51,703

 

 

$

53,748

 

(4

)%

 

$

51,623

 

%

 

$

218,277

 

$

204,572

 

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share - Basic

$

0.43

 

 

$

0.45

 

 

 

$

0.43

 

 

 

$

1.82

 

$

1.67

 

 

 

Earnings Per Common Share - Diluted

$

0.43

 

 

$

0.45

 

 

 

$

0.43

 

 

 

$

1.81

 

$

1.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

119,483,499

 

 

 

119,476,035

 

 

 

 

120,160,300

 

 

 

 

119,824,970

 

 

122,321,768

 

 

 

Weighted Average Shares Outstanding - Diluted

 

120,102,665

 

 

 

119,996,523

 

 

 

 

121,025,925

 

 

 

 

120,472,345

 

 

123,133,025

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

(Annualized)

 

For the

Twelve Months Ended

Profitability measures:

12/31/2022

 

9/30/2022

 

12/31/2021

 

12/31/2022

 

12/31/2021

ROA

1.10

%

 

1.17

%

 

1.16

%

 

1.20

%

 

1.17

%

ROE

10.35

%

 

10.58

%

 

9.93

%

 

10.73

%

 

9.88

%

ROA (PPNR) (1)

1.66

%

 

1.79

%

 

1.62

%

 

1.68

%

 

1.51

%

ROE (PPNR) (1)

15.64

%

 

16.26

%

 

13.88

%

 

15.03

%

 

12.70

%

ROTCE (2)

13.54

%

 

13.77

%

 

12.85

%

 

13.97

%

 

12.80

%

Net interest margin

3.36

%

 

3.49

%

 

3.13

%

 

3.36

%

 

3.09

%

Efficiency ratio

51.97

%

 

50.39

%

 

50.70

%

 

51.47

%

 

52.72

%

Noninterest expense / average assets

1.79

%

 

1.82

%

 

1.67

%

 

1.78

%

 

1.68

%

(1)

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

(2)

Average tangible common equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided in the accompanying financial information on Table Page 10.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

Three Months Ended

 

12/31/2022

 

9/30/2022

 

12/31/2021

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

 

 

Interest

 

Annualized

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

15,393,843

 

$

207,958

 

5.36

%

 

$

14,925,298

 

$

175,078

 

4.65

%

 

$

13,447,009

 

$

133,821

 

3.95

%

Investment securities

 

2,254,678

 

 

14,758

 

2.60

%

 

 

2,366,696

 

 

13,498

 

2.26

%

 

 

2,674,903

 

 

10,657

 

1.58

%

FHLB stock and other investments

 

114,077

 

 

1,521

 

5.29

%

 

 

107,724

 

 

606

 

2.23

%

 

 

773,579

 

 

691

 

0.35

%

Total interest earning assets

$

17,762,598

 

$

224,237

 

5.01

%

 

$

17,399,718

 

$

189,182

 

4.31

%

 

$

16,895,491

 

$

145,169

 

3.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

5,733,448

 

$

34,991

 

2.42

%

 

$

6,255,271

 

$

19,614

 

1.24

%

 

$

5,961,363

 

$

5,522

 

0.37

%

Savings

 

297,128

 

 

968

 

1.29

%

 

 

324,487

 

 

969

 

1.18

%

 

 

316,758

 

 

946

 

1.18

%

Time deposits

 

4,276,655

 

 

27,317

 

2.53

%

 

 

3,146,432

 

 

10,084

 

1.27

%

 

 

2,823,613

 

 

2,437

 

0.34

%

Total interest bearing deposits

 

10,307,231

 

 

63,276

 

2.44

%

 

 

9,726,190

 

 

30,667

 

1.25

%

 

 

9,101,734

 

 

8,905

 

0.39

%

FHLB and FRB borrowings

 

838,335

 

 

6,988

 

3.31

%

 

 

448,837

 

 

2,393

 

2.12

%

 

 

216,882

 

 

648

 

1.19

%

Convertible notes, net

 

217,002

 

 

1,322

 

2.38

%

 

 

216,762

 

 

1,322

 

2.39

%

 

 

216,078

 

 

1,322

 

2.39

%

Subordinated debentures

 

102,496

 

 

2,130

 

8.13

%

 

 

102,182

 

 

1,614

 

6.18

%

 

 

101,295

 

 

976

 

3.77

%

Total interest bearing liabilities

$

11,465,064

 

$

73,716

 

2.55

%

 

$

10,493,971

 

$

35,996

 

1.36

%

 

$

9,635,989

 

$

11,851

 

0.49

%

Noninterest bearing demand deposits

 

5,174,217

 

 

 

 

 

 

5,719,155

 

 

 

 

 

 

5,967,251

 

 

 

 

Total funding liabilities/cost of funds

$

16,639,281

 

 

 

1.76

%

 

$

16,213,126

 

 

 

0.88

%

 

$

15,603,240

 

 

 

0.30

%

Net interest income/net interest spread

 

 

$

150,521

 

2.46

%

 

 

 

$

153,186

 

2.95

%

 

 

 

$

133,318

 

2.92

%

Net interest margin

 

 

 

 

3.36

%

 

 

 

 

 

3.49

%

 

 

 

 

 

3.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,174,217

 

$

 

%

 

$

5,719,155

 

$

 

%

 

$

5,967,251

 

$

 

%

Interest bearing deposits

 

10,307,231

 

 

63,276

 

2.44

%

 

 

9,726,190

 

 

30,667

 

1.25

%

 

 

9,101,734

 

 

8,905

 

0.39

%

Total deposits

$

15,481,448

 

$

63,276

 

1.62

%

 

$

15,445,345

 

$

30,667

 

0.79

%

 

$

15,068,985

 

$

8,905

 

0.23

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Twelve Months Ended

 

12/31/2022

 

12/31/2021

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

Average

 

Income/

 

Average

 

Average

 

Income/

 

Average

 

Balance

 

Expense

 

Yield/Cost

 

Balance

 

Expense

 

Yield/Cost

INTEREST EARNING ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

14,634,627

 

$

660,732

 

4.51

%

 

$

13,343,431

 

$

528,174

 

3.96

%

Investment securities

 

2,415,621

 

 

52,220

 

2.16

%

 

 

2,392,589

 

 

35,492

 

1.48

%

FHLB stock and other investments

 

176,313

 

 

3,163

 

1.79

%

 

 

844,010

 

 

2,866

 

0.34

%

Total interest earning assets

$

17,226,561

 

$

716,115

 

4.16

%

 

$

16,580,030

 

$

566,532

 

3.42

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

6,202,104

 

$

68,961

 

1.11

%

 

$

5,657,958

 

$

22,867

 

0.40

%

Savings

 

315,775

 

 

3,802

 

1.20

%

 

 

309,295

 

 

3,623

 

1.17

%

Time deposits

 

3,084,851

 

 

42,076

 

1.36

%

 

 

3,178,722

 

 

15,521

 

0.49

%

Total interest bearing deposits

 

9,602,730

 

 

114,839

 

1.20

%

 

 

9,145,975

 

 

42,011

 

0.46

%

FHLB and FRB borrowings

 

528,342

 

 

11,525

 

2.18

%

 

 

208,721

 

 

2,561

 

1.23

%

Convertible notes, net

 

216,654

 

 

5,289

 

2.41

%

 

 

215,633

 

 

5,289

 

2.42

%

Subordinated debentures

 

102,037

 

 

6,041

 

5.84

%

 

 

100,848

 

 

3,901

 

3.82

%

Total interest bearing liabilities

$

10,449,763

 

$

137,694

 

1.32

%

 

$

9,671,177

 

$

53,762

 

0.56

%

Noninterest bearing demand deposits

 

5,569,534

 

 

 

 

 

 

5,581,803

 

 

 

 

Total funding liabilities/cost of funds

$

16,019,297

 

 

 

0.86

%

 

$

15,252,980

 

 

 

0.35

%

Net interest income/net interest spread

 

 

$

578,421

 

2.84

%

 

 

 

$

512,770

 

2.86

%

Net interest margin

 

 

 

 

3.36

%

 

 

 

 

 

3.09

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

5,569,534

 

$

 

%

 

$

5,581,803

 

$

 

%

Interest bearing deposits

 

9,602,730

 

 

114,839

 

1.20

%

 

 

9,145,975

 

 

42,011

 

0.46

%

Total deposits

$

15,172,264

 

$

114,839

 

0.76

%

 

$

14,727,778

 

$

42,011

 

0.29

%

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

Twelve Months Ended

AVERAGE BALANCES:

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

 

12/31/2022

 

12/31/2021

 

% change

Loans, including loans held for sale

$

15,393,843

 

 

$

14,925,298

 

 

3

%

 

$

13,447,009

 

 

14

%

 

$

14,634,627

 

$

13,343,431

 

10

%

Investments

 

2,368,755

 

 

 

2,474,420

 

 

(4

)%

 

 

3,448,482

 

 

(31

)%

 

 

2,591,934

 

 

3,236,599

 

(20

)%

Interest earning assets

 

17,762,598

 

 

 

17,399,718

 

 

2

%

 

 

16,895,491

 

 

5

%

 

 

17,226,561

 

 

16,580,030

 

4

%

Total assets

 

18,863,726

 

 

 

18,428,874

 

 

2

%

 

 

17,834,345

 

 

6

%

 

 

18,231,609

 

 

17,467,665

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

10,307,231

 

 

 

9,726,190

 

 

6

%

 

 

9,101,734

 

 

13

%

 

 

9,602,730

 

 

9,145,975

 

5

%

Interest bearing liabilities

 

11,465,064

 

 

 

10,493,971

 

 

9

%

 

 

9,635,989

 

 

19

%

 

 

10,449,763

 

 

9,671,177

 

8

%

Noninterest bearing demand deposits

 

5,174,217

 

 

 

5,719,155

 

 

(10

)%

 

 

5,967,251

 

 

(13

)%

 

 

5,569,534

 

 

5,581,803

 

%

Stockholders’ equity

 

1,997,460

 

 

 

2,032,362

 

 

(2

)%

 

 

2,079,694

 

 

(4

)%

 

 

2,034,027

 

 

2,071,453

 

(2

)%

Net interest earning assets

 

6,297,534

 

 

 

6,905,747

 

 

(9

)%

 

 

7,259,502

 

 

(13

)%

 

 

6,776,798

 

 

6,908,853

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

 

 

 

 

 

 

Commercial loans

$

5,109,532

 

 

$

5,124,421

 

 

%

 

$

4,208,674

 

 

21

%

 

 

 

 

 

 

Real estate loans

 

9,414,580

 

 

 

9,504,893

 

 

(1

)%

 

 

9,105,931

 

 

3

%

 

 

 

 

 

 

Consumer and other loans

 

879,428

 

 

 

861,873

 

 

2

%

 

 

638,138

 

 

38

%

 

 

 

 

 

 

Loans, net of deferred loan fees and costs

 

15,403,540

 

 

 

15,491,187

 

 

(1

)%

 

 

13,952,743

 

 

10

%

 

 

 

 

 

 

Allowance for credit losses

 

(162,359

)

 

 

(160,561

)

 

1

%

 

 

(140,550

)

 

16

%

 

 

 

 

 

 

Loans receivable, net

$

15,241,181

 

 

$

15,330,626

 

 

(1

)%

 

$

13,812,193

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

 

 

 

 

 

 

Retail buildings

$

2,585,383

 

 

$

2,632,564

 

 

(2

)%

 

$

2,522,976

 

 

2

%

 

 

 

 

 

 

Hotels/motels

 

952,579

 

 

 

1,091,047

 

 

(13

)%

 

 

1,308,405

 

 

(27

)%

 

 

 

 

 

 

Gas stations/car washes

 

1,054,720

 

 

 

1,056,217

 

 

%

 

 

1,050,730

 

 

%

 

 

 

 

 

 

Mixed-use facilities

 

848,417

 

 

 

825,289

 

 

3

%

 

 

854,793

 

 

(1

)%

 

 

 

 

 

 

Warehouses

 

1,294,893

 

 

 

1,271,104

 

 

2

%

 

 

1,244,339

 

 

4

%

 

 

 

 

 

 

Multifamily

 

1,295,644

 

 

 

1,199,320

 

 

8

%

 

 

744,068

 

 

74

%

 

 

 

 

 

 

Other

 

1,382,944

 

 

 

1,429,352

 

 

(3

)%

 

 

1,380,620

 

 

%

 

 

 

 

 

 

Total

$

9,414,580

 

 

$

9,504,893

 

 

(1

)%

 

$

9,105,931

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION

12/31/2022

 

9/30/2022

 

% change

 

12/31/2021

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

4,849,493

 

 

$

5,590,952

 

 

(13

)%

 

$

5,751,870

 

 

(16

)%

 

 

 

 

 

 

Money market and other

 

5,615,784

 

 

 

5,885,093

 

 

(5

)%

 

 

6,178,850

 

 

(9

)%

 

 

 

 

 

 

Saving deposits

 

283,464

 

 

 

317,841

 

 

(11

)%

 

 

321,377

 

 

(12

)%

 

 

 

 

 

 

Time deposits

 

4,990,060

 

 

 

3,708,323

 

 

35

%

 

 

2,788,353

 

 

79

%

 

 

 

 

 

 

Total deposits

$

15,738,801

 

 

$

15,502,209

 

 

2

%

 

$

15,040,450

 

 

5

%

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS:

12/31/2022

 

9/30/2022

 

12/31/2021

 

 

 

 

 

 

 

 

Total stockholders’ equity

$

2,019,328

 

 

$

1,975,725

 

 

$

2,092,983

 

 

 

 

 

 

 

 

 

Common equity tier 1 ratio

 

10.55

%

 

 

10.32

%

 

 

11.03

%

 

 

 

 

 

 

 

 

Tier 1 risk-based capital ratio

 

11.15

%

 

 

10.92

%

 

 

11.70

%

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

11.97

%

 

 

11.72

%

 

 

12.42

%

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

10.15

%

 

 

10.25

%

 

 

10.11

%

 

 

 

 

 

 

 

 

Total risk weighted assets

$

17,049,410

 

 

$

17,065,355

 

 

$

15,036,292

 

 

 

 

 

 

 

 

 

Book value per common share

$

16.90

 

 

$

16.54

 

 

$

17.44

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

8.29

%

 

 

8.09

%

 

 

9.31

%

 

 

 

 

 

 

 

 

Tangible common equity per share (1)

$

12.96

 

 

$

12.60

 

 

$

13.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

ALLOWANCE FOR CREDIT LOSSES CHANGES:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

12/31/2022

 

12/31/2021

Balance at beginning of period

$

160,561

 

 

$

151,580

 

 

$

147,450

 

 

$

140,550

 

 

$

136,774

 

 

$

140,550

 

 

$

206,741

 

Provision (credit) for credit losses

 

8,200

 

 

 

9,200

 

 

 

3,200

 

 

 

(11,000

)

 

 

1,500

 

 

 

9,600

 

 

 

(12,200

)

Recoveries

 

3,222

 

 

 

331

 

 

 

1,642

 

 

 

19,403

 

 

 

3,615

 

 

 

24,598

 

 

 

8,245

 

Charge offs

 

(9,624

)

 

 

(550

)

 

 

(712

)

 

 

(1,503

)

 

 

(1,339

)

 

 

(12,389

)

 

 

(62,236

)

Balance at end of period

$

162,359

 

 

$

160,561

 

 

$

151,580

 

 

$

147,450

 

 

$

140,550

 

 

$

162,359

 

 

$

140,550

 

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

 

0.17

%

 

 

0.01

%

 

 

(0.03

)%

 

 

(0.52

)%

 

 

(0.07

)%

 

 

(0.08

)%

 

 

0.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

 

12/31/2022

 

12/31/2021

Real estate loans

$

2,022

 

 

$

9

 

 

$

(508

)

 

$

(16,418

)

 

$

(2,352

)

 

$

(14,895

)

 

$

51,705

 

Commercial loans

 

4,174

 

 

 

115

 

 

 

(461

)

 

 

(1,529

)

 

 

144

 

 

 

2,299

 

 

 

1,362

 

Consumer loans

 

206

 

 

 

95

 

 

 

39

 

 

 

47

 

 

 

(68

)

 

 

387

 

 

 

924

 

Total net charge offs (recoveries)

$

6,402

 

 

$

219

 

 

$

(930

)

 

$

(17,900

)

 

$

(2,276

)

 

$

(12,209

)

 

$

53,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NONPERFORMING ASSETS:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

Loans on nonaccrual status (1)

$

49,687

 

 

$

64,571

 

 

$

69,522

 

 

$

52,717

 

 

$

54,616

 

Delinquent loans 90 days or more on accrual status

 

401

 

 

 

5,306

 

 

 

12,468

 

 

 

3,090

 

 

 

2,131

 

Accruing troubled debt restructured loans

 

16,931

 

 

 

25,631

 

 

 

26,572

 

 

 

44,555

 

 

 

52,418

 

Total nonperforming loans

 

67,019

 

 

 

95,508

 

 

 

108,562

 

 

 

100,362

 

 

 

109,165

 

Other real estate owned

 

2,418

 

 

 

1,480

 

 

 

2,010

 

 

 

2,010

 

 

 

2,597

 

Total nonperforming assets

$

69,437

 

 

$

96,988

 

 

$

110,572

 

 

$

102,372

 

 

$

111,762

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

0.36

%

 

 

0.51

%

 

 

0.61

%

 

 

0.58

%

 

 

0.62

%

Nonperforming assets/loans receivable & OREO

 

0.45

%

 

 

0.63

%

 

 

0.76

%

 

 

0.73

%

 

 

0.80

%

Nonperforming assets/total capital

 

3.44

%

 

 

4.91

%

 

 

5.53

%

 

 

5.02

%

 

 

5.34

%

Nonperforming loans/loans receivable

 

0.44

%

 

 

0.62

%

 

 

0.75

%

 

 

0.71

%

 

 

0.78

%

Nonaccrual loans/loans receivable

 

0.32

%

 

 

0.42

%

 

 

0.48

%

 

 

0.37

%

 

 

0.39

%

Allowance for credit losses/loans receivable

 

1.05

%

 

 

1.04

%

 

 

1.04

%

 

 

1.05

%

 

 

1.01

%

Allowance for credit losses/nonaccrual loans

 

326.76

%

 

 

248.66

%

 

 

218.03

%

 

 

279.70

%

 

 

257.34

%

Allowance for credit losses/nonperforming loans

 

242.26

%

 

 

168.11

%

 

 

139.63

%

 

 

146.92

%

 

 

128.75

%

Allowance for credit losses/nonperforming assets

 

233.82

%

 

 

165.55

%

 

 

137.09

%

 

 

144.03

%

 

 

125.76

%

 

 

 

 

 

 

 

 

 

 

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $9.8 million, $9.9 million, $13.2 million, $17.0 million, and $19.5 million, at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONACCRUAL LOANS BY TYPE:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

Real estate loans

$

33,915

 

 

$

47,807

 

 

$

53,966

 

 

$

36,655

 

 

$

39,756

 

Commercial loans

 

5,620

 

 

 

7,675

 

 

 

8,206

 

 

 

8,686

 

 

 

11,025

 

Consumer loans

 

10,152

 

 

 

9,089

 

 

 

7,350

 

 

 

7,376

 

 

 

3,835

 

Total

$

49,687

 

 

$

64,571

 

 

$

69,522

 

 

$

52,717

 

 

$

54,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

Retail buildings

$

3,331

 

 

$

5,474

 

 

$

6,337

 

 

$

24,356

 

 

$

28,483

 

Hotels/motels

 

 

 

 

 

 

 

 

 

 

 

 

 

472

 

Gas stations/car washes

 

181

 

 

 

185

 

 

 

189

 

 

 

193

 

 

 

197

 

Mixed-use facilities

 

6

 

 

 

2,832

 

 

 

2,837

 

 

 

2,836

 

 

 

2,846

 

Warehouses

 

4,940

 

 

 

4,988

 

 

 

4,770

 

 

 

5,321

 

 

 

5,366

 

Other (2)

 

8,473

 

 

 

12,152

 

 

 

12,439

 

 

 

11,849

 

 

 

15,054

 

Total

$

16,931

 

 

$

25,631

 

 

$

26,572

 

 

$

44,555

 

 

$

52,418

 

 

 

 

 

 

 

 

 

 

 

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

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

30 - 59 days

$

7,049

 

$

13,092

 

$

10,090

 

$

12,439

 

$

29,723

60 - 89 days

 

2,243

 

 

4,933

 

 

6,354

 

 

3,090

 

 

10,345

Total

$

9,292

 

$

18,025

 

$

16,444

 

$

15,529

 

$

40,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

Real estate loans

$

4,115

 

$

9,694

 

$

7,919

 

$

6,097

 

$

20,232

Commercial loans

 

3,300

 

 

6,165

 

 

3,397

 

 

5,003

 

 

3,057

Consumer loans

 

1,877

 

 

2,166

 

 

5,128

 

 

4,429

 

 

16,779

Total

$

9,292

 

$

18,025

 

$

16,444

 

$

15,529

 

$

40,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

12/31/2022

 

9/30/2022

 

6/30/2022

 

3/31/2022

 

12/31/2021

Special mention

$

157,263

 

$

79,399

 

$

95,797

 

$

166,958

 

$

257,194

Substandard

 

104,073

 

 

204,713

 

 

244,748

 

 

226,661

 

 

242,397

Total criticized loans

$

261,336

 

$

284,112

 

$

340,545

 

$

393,619

 

$

499,591

Hope Bancorp, Inc.

Selected Financial Data

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

 

Reconciliation of GAAP financial measures to non-GAAP financial measures

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

12/31/2022

 

9/30/2022

 

12/31/2021

 

12/31/2022

 

12/31/2021

Average stockholders’ equity

$

1,997,460

 

 

$

2,032,362

 

 

$

2,079,694

 

 

$

2,034,027

 

 

$

2,071,453

 

Less: Goodwill and core deposit intangible assets, net

 

(470,442

)

 

 

(470,941

)

 

 

(472,405

)

 

 

(471,176

)

 

 

(473,177

)

Average tangible common equity

$

1,527,018

 

 

$

1,561,421

 

 

$

1,607,289

 

 

$

1,562,851

 

 

$

1,598,276

 

 

 

 

 

 

 

 

 

 

 

Net income

$

51,703

 

 

$

53,748

 

 

$

51,623

 

 

$

218,277

 

 

$

204,572

 

Return on average tangible common equity (annualized)

 

13.54

%

 

 

13.77

%

 

 

12.85

%

 

 

13.97

%

 

 

12.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

12/31/2022

 

9/30/2022

 

12/31/2021

 

 

 

 

Total stockholders’ equity

$

2,019,328

 

 

$

1,975,725

 

 

$

2,092,983

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(470,176

)

 

 

(470,662

)

 

 

(472,121

)

 

 

 

 

Tangible common equity

$

1,549,152

 

 

$

1,505,063

 

 

$

1,620,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

19,164,491

 

 

$

19,083,388

 

 

$

17,889,061

 

 

 

 

 

Less: Goodwill and core deposit intangible assets, net

 

(470,176

)

 

 

(470,662

)

 

 

(472,121

)

 

 

 

 

Tangible assets

$

18,694,315

 

 

$

18,612,726

 

 

$

17,416,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

119,495,209

 

 

 

119,479,253

 

 

 

120,006,452

 

 

 

 

 

Tangible common equity to tangible assets

 

8.29

%

 

 

8.09

%

 

 

9.31

%

 

 

 

 

Tangible common equity per share

$

12.96

 

 

$

12.60

 

 

$

13.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

PRE-PROVISION NET REVENUE

12/31/2022

 

9/30/2022

 

12/31/2021

 

12/31/2022

 

12/31/2021

Net interest income before provision (credit) for credit losses

$

150,521

 

 

$

153,186

 

 

$

133,318

 

 

$

578,421

 

 

$

512,770

 

Noninterest income

 

12,110

 

 

 

13,355

 

 

 

13,097

 

 

 

51,397

 

 

 

43,594

 

Revenue

 

162,631

 

 

 

166,541

 

 

 

146,415

 

 

 

629,818

 

 

 

556,364

 

Less noninterest expense

 

84,518

 

 

 

83,914

 

 

 

74,236

 

 

 

324,170

 

 

 

293,292

 

Pre-provision net revenue

$

78,113

 

 

$

82,627

 

 

$

72,179

 

 

$

305,648

 

 

$

263,072

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

18,863,726

 

 

$

18,428,874

 

 

$

17,834,345

 

 

$

18,231,609

 

 

$

17,467,665

 

ROA (PPNR)

 

1.66

%

 

 

1.79

%

 

 

1.62

%

 

 

1.68

%

 

 

1.51

%

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

 

1,997,460

 

 

 

2,032,362

 

 

 

2,079,694

 

 

 

2,034,027

 

 

 

2,071,453

 

ROE (PPNR)

 

15.64

%

 

 

16.26

%

 

 

13.88

%

 

 

15.03

%

 

 

12.70

%

 

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