LOS ANGELES--(BUSINESS WIRE)--Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and full year ended December 31, 2018.
For the three months ended December 31, 2018, net income totaled $44.4 million, or $0.35 per diluted common share. This compares with net income of $46.4 million, or $0.36 per diluted common share, in the 2018 third quarter and $18.0 million, or $0.13 per diluted common share, in the 2017 fourth quarter(1). Net income for 2018 totaled a record $189.6 million, or $1.44 per diluted common share, compared with 2017 net income(1) of $139.4 million, or $1.03 per diluted common share.
“We completed the year with another strong quarter of new loan originations, reflecting a 25 basis point increase in average rates on new loans and a well diversified mix of commercial real estate, commercial and consumer loans,” said President and Chief Executive Officer Kevin S. Kim. “Our asset quality improved with decreases achieved in nonaccrual loans and total criticized loans, and net charge offs were minimal. While a $1.7 million restructuring charge related to our branch rationalization plan impacted our efficiency ratio for the quarter, our expense management efforts are being well implemented, and we are confident that they will lead to improved efficiencies in the coming years. Notwithstanding the significant investments we made in 2018 to strengthen the long-term prospects of our organization, we are pleased to have concluded the year with record net income of $190 million.
“As we move forward into 2019, we continue to operate our business for the long term. We expect the retention of the guaranteed portion of our SBA loans in our portfolio will have a positive effect on our overall strategies to support our net interest margin and enhance profitability. With our proactive efforts managing our asset quality in this late stage of the economic growth cycle, we believe Bank of Hope is well positioned for long-term success,” said Kim.
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(1) |
The Company’s fourth quarter 2017 financial results included a non-cash, incremental income tax expense in the Company’s consolidated statements of income of $25.4 million resulting from the revaluation of its deferred tax assets and liabilities (the “DTA”) and low income housing tax credit (the “LIHTC”) investments due to the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017. |
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Financial Highlights |
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(dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | |||||||||||
12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||||||
Net income | $ | 44,449 | $ | 46,378 | $ | 17,984 | ||||||
Diluted earnings per share | $ | 0.35 | $ | 0.36 | $ | 0.13 | ||||||
Tax reform adjustments: | ||||||||||||
Deferred tax asset | $ | 442 | $ | — | $ | 23,835 | ||||||
Investments in affordable housing partnerships | $ | — | $ | — | $ | 1,588 | ||||||
Net income, excluding tax reform adjustments (1) | $ | 44,891 | $ | 46,378 | $ | 43,407 | ||||||
Diluted earnings per share, excluding tax reform adjustments (1) | $ | 0.35 | $ | 0.36 | $ | 0.32 | ||||||
Net interest income before provision for loan losses | $ | 121,893 | $ | 123,147 | $ | 126,392 | ||||||
Net interest margin | 3.41 | % | 3.47 | % | 3.84 | % | ||||||
Noninterest income | $ | 11,614 | $ | 13,447 | $ | 16,451 | ||||||
Noninterest expense | $ | 70,189 | $ | 67,455 | $ | 73,028 | ||||||
Net loans receivable | $ | 12,005,558 | $ | 11,836,553 | $ | 11,018,034 | ||||||
Deposits | $ | 12,155,656 | $ | 12,045,619 | $ | 10,846,609 | ||||||
Nonaccrual loans (2) | $ | 53,286 | $ | 56,299 | $ | 46,775 | ||||||
ALLL to loans receivable | 0.77 | % | 0.76 | % | 0.76 | % | ||||||
ALLL to nonaccrual loans (2) | 173.70 | % | 160.98 | % | 180.74 | % | ||||||
ALLL to nonperforming assets (2) (3) | 81.92 | % | 76.67 | % | 67.51 | % | ||||||
Provision for loan losses | $ | 2,800 | $ | 7,300 | $ | 3,600 | ||||||
Net charge offs | $ | 872 | $ | 6,552 | $ | 2,692 | ||||||
Return on assets (“ROA”) | 1.17 | % | 1.24 | % | 0.51 | % | ||||||
Return on equity (“ROE”) | 9.42 | % | 9.76 | % | 3.70 | % | ||||||
Noninterest expense / average assets | 1.85 | % | 1.80 | % | 2.08 | % | ||||||
Efficiency ratio | 52.57 | % | 49.38 | % | 51.12 | % | ||||||
(1) | Net income and diluted earnings per share excluding tax reform adjustments are non-GAAP financial measures. See the Company’s reconciliation of the GAAP to non-GAAP financial measures in the accompanying financial information. | |
(2) | Excludes delinquent SBA loans that are guaranteed and currently in liquidation. | |
(3) | Excludes purchased credit-impaired loans. | |
Operating Results for the 2018 Fourth Quarter
The comparability of the Company’s operating results with past performance is impacted by acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions. The Company provides the following supplemental information to facilitate a better understanding of financial performance. Net interest income and operating income for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017 included the following pre-tax acquisition accounting adjustments and merger-related expenses associated with past acquisitions:
(dollars in thousands) (unaudited) | Three Months Ended | |||||||||||
12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||||||
Accretion on purchased non-impaired loans | $ | 2,360 | $ | 2,969 | $ | 7,629 | ||||||
Accretion on purchased credit-impaired loans | 4,867 | 5,239 | 5,167 | |||||||||
Amortization of premium on low income housing tax credits | (85 | ) | (84 | ) | (85 | ) | ||||||
Amortization of premium on acquired FHLB borrowings | 357 | 357 | 353 | |||||||||
Accretion of discount on acquired subordinated debt | (272 | ) | (271 | ) | (263 | ) | ||||||
Amortization of premium on acquired time deposits and savings | — | — | 3 | |||||||||
Amortization of core deposit intangibles | (615 | ) | (615 | ) | (675 | ) | ||||||
Total acquisition accounting adjustments | $ | 6,612 | $ | 7,595 | $ | 12,129 | ||||||
Merger-related expenses | — | — | (12 | ) | ||||||||
Total | $ | 6,612 | $ | 7,595 | $ | 12,117 | ||||||
Net Interest Income. Net interest income before provision for loan losses for the 2018 fourth quarter totaled $121.9 million, compared with $123.1 million in the 2018 third quarter and $126.4 million in the year-ago fourth quarter.
The net interest margin (net interest income divided by average interest earning assets) for the 2018 fourth quarter declined 6 basis points to 3.41% from 3.47% in the preceding 2018 third quarter, as deposit rates increased at a higher pace than loan yields. In the year-ago fourth quarter, the net interest margin was 3.84%.
The weighted average yield on loans for the 2018 fourth quarter increased 5 basis points to 5.21% from 5.16% in the preceding third quarter and rose 9 basis points from 5.12% in the 2017 fourth quarter. The increases in the weighted average yield on loans largely reflects the benefits to the variable rate portion of the Company’s loan portfolio resulting from the increases in the fed funds rate in March, June, September and December 2018 of 25 basis points each.
The weighted average cost of deposits for the 2018 fourth quarter increased to 1.40%, up 16 basis points from 1.24% in the 2018 third quarter and up 60 basis points from 0.80% in the fourth quarter a year ago. The increase in the weighted average cost of deposits reflects the highly competitive deposit market, as well as a shift to the higher-rate time deposit balances in the rising interest rate environment.
Noninterest Income. Noninterest income for the 2018 fourth quarter decreased to $11.6 million from $13.4 million in the 2018 third quarter and $16.5 million in the year-ago fourth quarter. The decreases in noninterest income largely reflects variances in net gains on sales of SBA and mortgage loans, as well as other income and fees.
As previously announced, the Company is discontinuing its practice of regularly selling SBA loans due to the significantly reduced premiums available in the secondary market. Early in the 2018 fourth quarter and prior to this strategic change, the Company recognized net gains on sales of SBA loans of $447,000. This compares with net gains on sales of SBA loans of $2.3 million and $2.6 million in the preceding third quarter and 2017 fourth quarter, respectively. Net gains on the sales of residential mortgage loans amounted to $381,000, $477,000 and $1.3 million for the 2018 fourth quarter, 2018 third quarter and 2017 fourth quarter, respectively.
In addition, the Company incurred a $453,000 reduction to other noninterest income to record the net fair value reduction on its equity investments for the 2018 fourth quarter. This compares with a $1.6 million fair value reduction on equity investments for the 2018 third quarter. In the 2017 fourth quarter, there were no fair adjustments recorded on equity investments and the Company recorded a $592,000 gain on the sale of fixed assets.
Noninterest Expense. Noninterest expense for the 2018 fourth quarter increased to $70.2 million from $67.5 million in the preceding third quarter. In addition to higher professional fees, 2018 fourth quarter noninterest expense includes a one-time pre-tax restructuring charge of $1.7 million, related to a branch rationalization plan, which is subject to regulatory non-objection and is expected to be implemented by the second quarter of 2019. In the year-ago fourth quarter, noninterest expense totaled $73.0 million, and included a $3.3 million impairment on its LIHTC investments as a result of the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017.
Salaries and employee benefits expense decreased to $36.6 million for the 2018 fourth quarter from $37.0 million in the preceding third quarter and from $39.6 million in the 2017 fourth quarter.
Income Tax Provision. The effective tax rate for the 2018 fourth quarter was 26.6%, compared with 25.0% in the preceding 2018 third quarter and 72.8% in the 2017 fourth quarter. Excluding the $25.4 million charge related to the revaluation of the Company’s DTA and LIHTC investments, the effective tax rate for the 2017 fourth quarter would have been 34.4%.
Balance Sheet Summary
Loans receivable increased 1% to $12.10 billion at December 31, 2018 from $11.93 billion at September 30, 2018, reflecting a 6% annualized growth rate. Year-over-year, loans receivable increased 9% from $11.10 billion at December 31, 2017.
New loan originations funded during the 2018 fourth quarter totaled $667.3 million and included SBA loan production of $81.5 million and residential mortgage loan originations of $162.3 million. This compares with 2018 third quarter originations of $784.1 million, which included SBA loan production of $71.4 million and residential mortgage loan originations of $165.6 million. In the year-ago fourth quarter, new loan originations funded totaled $663.5 million, including SBA loan production of $66.7 million and residential mortgage loan originations of $193.0 million.
Sales of SBA loans to the secondary market and gains derived from those sales are based substantially on the production of SBA 7(a) loans. SBA 7(a) loan originations totaled $44.7 million for the 2018 fourth quarter, compared with $52.2 million for the third quarter of 2018 and $66.7 million for the year-ago fourth quarter. During the 2018 fourth quarter, the Company sold $10.2 million of its SBA loans held for sale, compared with $48.5 million in the immediately preceding third quarter and $36.6 million in the 2017 fourth quarter.
Aggregate loan pay offs and pay downs in the 2018 fourth quarter totaled $431.6 million, compared with $495.3 million for the immediately preceding third quarter and $380.9 million in the year-ago fourth quarter.
Total deposits at December 31, 2018 amounted to $12.16 billion, up 1% from $12.05 billion at September 30, 2018 and up 12% from $10.85 billion at December 31, 2017.
Credit Quality
The provision for loan and lease losses for the 2018 fourth quarter was $2.8 million, compared with $7.3 million for the immediately preceding 2018 third quarter and $3.6 million for the year-ago fourth quarter.
For a more detailed understanding of the changes in the allowance for loan and lease losses (“ALLL”), the composition of the ALLL has been segmented for disclosure purposes between loans accounted for under the amortized cost method (referred to as “legacy loans”) and loans acquired through the Wilshire Bancorp, Center Financial, Pacific International and Foster Bankshares transactions (referred to as “purchased loans”). The purchased loans are further segregated between non-impaired and credit-impaired loans.
The composition of the ALLL as of December 31, 2018, September 30, 2018 and December 31, 2017 is as follows:
(dollars in thousands) (unaudited) | 12/31/2018 | 9/30/2018 | 12/31/2017 | |||||||||
Legacy loans (1) | $ | 78,259 | $ | 75,364 | $ | 67,648 | ||||||
Purchased non-impaired loans (2) | 2,135 | 2,411 | 4,853 | |||||||||
Purchased credit-impaired loans (2) | 12,163 | 12,854 | 12,040 | |||||||||
Total ALLL | $ | 92,557 | $ | 90,629 | $ | 84,541 | ||||||
Loans receivable | $ | 12,098,115 | $ | 11,927,182 | $ | 11,102,575 | ||||||
ALLL coverage ratio (excluding loans held for sale) | 0.77 | % | 0.76 | % | 0.76 | % | ||||||
(1) | Legacy loans include loans originated by the Bank’s predecessor banks, loans originated by Bank of Hope and loans that were acquired that have been refinanced as new loans. | |
(2) | Purchased loans were marked to fair value at acquisition date, and the ALLL reflects provisions for credit deterioration since the acquisition date. | |
The Company defines nonperforming loans to include delinquent loans on nonaccrual status, delinquent loans past due 90 days or more on accrual status (excluding purchased credit-impaired loans) and accruing restructured loans. Nonaccrual loans declined 5% to $53.3 million at December 31, 2018 from $56.3 million at September 30, 2018 and decreased as a percentage of loans receivable to 0.44% from 0.47%. At December 31, 2017, nonaccrual loans amounted to $46.8 million, or 0.42% of loans receivable. Accruing restructured loans at December 31, 2018 decreased to $50.4 million from $52.5 million at September 30, 2018 and $67.3 million at December 31, 2017. Total nonperforming loans at December 31, 2018 amounted to $105.2 million, or 0.87% of loans receivable, down 4% from $109.2 million, or 0.92% of loans receivable, at September 30, 2018 and down 8% from $114.4 million, or 1.03% of loans receivable, at December 31, 2017.
Nonperforming assets, including nonperforming loans and OREO, totaled $113.0 million at December 31, 2018, reflecting a 4% decrease when compared with $118.2 million at September 30, 2018 and a 10% decrease when compared with $125.2 million December 31, 2017. As a percentage of total assets, nonperforming assets declined to 0.74% at December 31, 2018 from 0.78% at September 30, 2018 and 0.88% at December 31, 2017.
Following are the components of criticized loan balances as of December 31, 2018, September 30, 2018 and December 31, 2017:
(dollars in thousands) (unaudited) | 12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||
Special Mention (1) | $ | 163,089 | $ | 217,746 | $ | 214,891 | |||
Classified (1) | 318,327 | 302,719 | 353,584 | ||||||
Criticized | $ | 481,416 | $ | 520,465 | $ | 568,475 | |||
(1) | Balances include purchased loans which were marked to fair value on the date of acquisition. | |
For the 2018 fourth quarter, the Company recorded net charge offs of $872,000 or 0.03% of average loans receivable on an annualized basis. This compares with net charge offs of $6.6 million, or 0.22% of average loans receivable on an annualized basis, for the 2018 third quarter and $2.7 million, or 0.10% of average loans receivable on an annualized basis, for the 2017 fourth quarter.
The ALLL at December 31, 2018 was $92.6 million, or 0.77% of loans receivable (excluding loans held for sale), compared with $90.6 million, or 0.76% of loans receivable (excluding loans held for sale), at September 30, 2018 and $84.5 million, or 0.76% of loans receivable (excluding loans held for sale), at December 31, 2017. The coverage ratio of the ALLL to nonperforming loans (excluding purchased credit-impaired loans) was 87.96% at December 31, 2018, 82.98% at September 30, 2018 and 73.88% at December 31, 2017.
Impaired loans (defined as loans for which it is probable that not all principal and interest payments due will be collected in accordance with the contractual terms) totaled $104.0 million at December 31, 2018, compared with $109.2 million at September 30, 2018 and $114.3 million at December 31, 2017.
Capital
At December 31, 2018, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as an “adequately capitalized” or “well-capitalized” financial institution, as summarized in the following table:
Minimum Guideline for | ||||||||||||
“Well-Capitalized” | ||||||||||||
12/31/2018 | 9/30/2018 | 12/31/2017 | Institution | |||||||||
Common Equity Tier 1 Capital | 11.44 | % | 11.61 | % | 12.30 | % | 6.50 | % | ||||
Tier 1 Leverage Ratio | 10.55 | % | 10.80 | % | 11.54 | % | 5.00 | % | ||||
Tier 1 Risk-based Ratio | 12.21 | % | 12.38 | % | 13.11 | % | 8.00 | % | ||||
Total Risk-based Ratio | 12.94 | % | 13.10 | % | 13.82 | % | 10.00 | % | ||||
Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:
12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||||||
Tangible common equity per share (1) | $ | 11.25 | $ | 10.96 | $ | 10.68 | ||||||
Tangible common equity to tangible assets (2) | 9.61 | % | 9.66 | % | 10.54 | % | ||||||
(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. Both tangible common equity and tangible common equity per share are non-GAAP financial measures. A reconciliation of the Company’s total stockholders’ equity to tangible common equity, including and excluding tax reform adjustments, is provided in the accompanying financial information on Table Page 7. | |
(2) | 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 to tangible assets is a non-GAAP financial measure. A reconciliation of the Company’s total assets to tangible assets, including and excluding tax reform adjustments, is provided in the accompanying financial information on Table Page 7. | |
Management reviews tangible common equity per share and the tangible common equity to tangible assets ratio in evaluating the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in tangible common equity as a measure of capital. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Wednesday, January 23, 2019 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2018. 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 in 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 30, 2019, replay access code 10127445.
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 $15.3 billion in total assets as of December 31, 2018. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 63 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; 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 and Quarterly Report on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Hope Bancorp, Inc. | ||||||||||||||||||
Selected Financial Data | ||||||||||||||||||
Unaudited (dollars in thousands, except share data) |
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Assets | 12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | |||||||||||||
Cash and due from banks | $ | 459,606 | $ | 522,710 | (12 | )% | $ | 492,000 | (7 | )% | ||||||||
Securities available for sale, at fair value | 1,846,265 | 1,854,250 | — | % | 1,720,257 | 7 | % | |||||||||||
Federal Home Loan Bank (“FHLB”) stock and other investments | 104,705 | 106,243 | (1 | )% | 83,142 | 26 | % | |||||||||||
Loans held for sale, at the lower of cost or fair value | 25,128 | 15,023 | 67 | % | 29,661 | (15 | )% | |||||||||||
Loans receivable | 12,098,115 | 11,927,182 | 1 | % | 11,102,575 | 9 | % | |||||||||||
Allowance for loan losses | (92,557 | ) | (90,629 | ) | (2 | )% | (84,541 | ) | (9 | )% | ||||||||
Net loans receivable | 12,005,558 | 11,836,553 | 1 | % | 11,018,034 | 9 | % | |||||||||||
Accrued interest receivable | 32,225 | 33,338 | (3 | )% | 29,979 | 7 | % | |||||||||||
Premises and equipment, net | 53,794 | 55,178 | (3 | )% | 56,714 | (5 | )% | |||||||||||
Bank owned life insurance | 75,219 | 76,081 | (1 | )% | 74,915 | — | % | |||||||||||
Goodwill | 464,450 | 464,450 | — | % | 464,450 | — | % | |||||||||||
Servicing assets | 23,132 | 24,354 | (5 | )% | 24,710 | (6 | )% | |||||||||||
Other intangible assets, net | 14,061 | 14,677 | (4 | )% | 16,523 | (15 | )% | |||||||||||
Other assets | 201,809 | 226,638 | (11 | )% | 196,332 | 3 | % | |||||||||||
Total assets | $ | 15,305,952 | $ | 15,229,495 | 1 | % | $ | 14,206,717 | 8 | % | ||||||||
Liabilities | ||||||||||||||||||
Deposits | $ | 12,155,656 | $ | 12,045,619 | 1 | % | $ | 10,846,609 | 12 | % | ||||||||
Borrowings from FHLB & fed funds purchased | 821,280 | 836,637 | (2 | )% | 1,227,593 | (33 | )% | |||||||||||
Convertible debt | 194,543 | 193,332 | 1 | % | — | 100 | % | |||||||||||
Subordinated debentures | 101,929 | 101,657 | — | % | 100,853 | 1 | % | |||||||||||
Accrued interest payable | 31,374 | 31,717 | (1 | )% | 15,961 | 97 | % | |||||||||||
Other liabilities | 97,959 | 115,953 | (16 | )% | 87,446 | 12 | % | |||||||||||
Total liabilities | 13,402,741 | 13,324,915 | 1 | % | 12,278,462 | 9 | % | |||||||||||
Stockholders’ Equity | ||||||||||||||||||
Common stock, $0.001 par value | 136 | 136 | — | % | 136 | — | % | |||||||||||
Capital surplus | 1,423,405 | 1,422,685 | — | % | 1,405,014 | 1 | % | |||||||||||
Retained earnings | 662,375 | 636,080 | 4 | % | 544,886 | 22 | % | |||||||||||
Treasury stock, at cost | (150,000 | ) | (100,000 | ) | (50 | )% | — | 100 | % | |||||||||
Accumulated other comprehensive loss | (32,705 | ) | (54,321 | ) | 40 | % | (21,781 | ) | (50 | )% | ||||||||
Total stockholders’ equity | 1,903,211 | 1,904,580 | — | % | 1,928,255 | (1 | )% | |||||||||||
Total liabilities and stockholders’ equity | $ | 15,305,952 | $ | 15,229,495 | 1 | % | $ | 14,206,717 | 8 | % | ||||||||
Common stock shares - authorized | 150,000,000 | 150,000,000 | 150,000,000 | |||||||||||||||
Common stock shares - outstanding | 126,639,912 | 130,074,103 | 135,511,891 | |||||||||||||||
Treasury stock shares | 9,002,453 | 5,565,696 | — | |||||||||||||||
Hope Bancorp, Inc. | ||||||||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||||||||
Unaudited (dollars in thousands, except per share data) |
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Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | 12/31/2018 | 12/31/2017 | % change | |||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||
Interest and fees on loans | $ | 156,606 | $ | 153,366 | 2 | % | $ | 141,129 | 11 | % | $ | 594,103 | $ | 529,760 | 12 | % | ||||||||||
Interest on securities | 12,385 | 11,957 | 4 | % | 10,523 | 18 | % | 45,342 | 36,917 | 23 | % | |||||||||||||||
Interest on federal funds sold and other investments | 3,035 | 2,503 | 21 | % | 1,533 | 98 | % | 10,727 | 5,427 | 98 | % | |||||||||||||||
Total interest income | 172,026 | 167,826 | 3 | % | 153,185 | 12 | % | 650,172 | 572,104 | 14 | % | |||||||||||||||
Interest expense: | ||||||||||||||||||||||||||
Interest on deposits | 42,477 | 37,022 | 15 | % | 21,901 | 94 | % | 134,958 | 74,902 | 80 | % | |||||||||||||||
Interest on other borrowings and convertible debt | 7,656 | 7,657 | — | % | 4,892 | 57 | % | 27,287 | 15,822 | 72 | % | |||||||||||||||
Total interest expense | 50,133 | 44,679 | 12 | % | 26,793 | 87 | % | 162,245 | 90,724 | 79 | % | |||||||||||||||
Net interest income before provision for loan losses | 121,893 | 123,147 | (1 | )% | 126,392 | (4 | )% | 487,927 | 481,380 | 1 | % | |||||||||||||||
Provision for loan losses | 2,800 | 7,300 | (62 | )% | 3,600 | (22 | )% | 14,900 | 17,360 | (14 | )% | |||||||||||||||
Net interest income after provision for loan losses | 119,093 | 115,847 | 3 | % | 122,792 | (3 | )% | 473,027 | 464,020 | 2 | % | |||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Service fees on deposit accounts | 4,568 | 4,569 | — | % | 4,951 | (8 | )% | 18,551 | 20,619 | (10 | )% | |||||||||||||||
Net gains on sales of SBA loans | 447 | 2,331 | (81 | )% | 2,626 | (83 | )% | 9,708 | 12,774 | (24 | )% | |||||||||||||||
Net gains on sales of other loans | 381 | 477 | (20 | )% | 1,308 | (71 | )% | 2,485 | 2,927 | (15 | )% | |||||||||||||||
Net gains on sales of securities available for sale | — | — | 100 | % | 301 | (100 | )% | — | 301 | (100 | )% | |||||||||||||||
Other income and fees | 6,218 | 6,070 | 2 | % | 7,265 | (14 | )% | 29,436 | 29,794 | (1 | )% | |||||||||||||||
Total noninterest income | 11,614 | 13,447 | (14 | )% | 16,451 | (29 | )% | 60,180 | 66,415 | (9 | )% | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||
Salaries and employee benefits | 36,594 | 36,969 | (1 | )% | 39,570 | (8 | )% | 153,523 | 144,669 | 6 | % | |||||||||||||||
Occupancy | 7,877 | 7,837 | 1 | % | 7,108 | 11 | % | 30,371 | 28,587 | 6 | % | |||||||||||||||
Furniture and equipment | 3,448 | 3,710 | (7 | )% | 4,032 | (14 | )% | 14,902 | 14,643 | 2 | % | |||||||||||||||
Advertising and marketing | 2,392 | 1,986 | 20 | % | 2,246 | 7 | % | 9,414 | 10,281 | (8 | )% | |||||||||||||||
Data processing and communications | 3,650 | 3,513 | 4 | % | 2,676 | 36 | % | 14,232 | 12,179 | 17 | % | |||||||||||||||
Professional fees | 4,756 | 3,950 | 20 | % | 4,553 | 4 | % | 16,286 | 14,954 | 9 | % | |||||||||||||||
FDIC assessment | 1,406 | 1,788 | (21 | )% | 1,897 | (26 | )% | 6,572 | 5,173 | 27 | % | |||||||||||||||
Credit related expenses | 507 | 658 | (23 | )% | 1,073 | (53 | )% | 2,863 | 582 | 392 | % | |||||||||||||||
Other real estate owned (“OREO”) expense, net | 302 | (56 | ) | N/A | 237 | 27 | % | 187 | 3,100 | (94 | )% | |||||||||||||||
Branch restructuring costs | 1,674 | — | 100 | % | — | 100 | % | 1,674 | — | 100 | % | |||||||||||||||
Merger-related expenses | — | — | 100 | % | 12 | (100 | )% | (7 | ) | 1,781 | N/A | |||||||||||||||
Other | 7,583 | 7,100 | 7 | % | 9,624 | (21 | )% | 27,709 | 30,652 | (10 | )% | |||||||||||||||
Total noninterest expense | 70,189 | 67,455 | 4 | % | 73,028 | (4 | )% | 277,726 | 266,601 | 4 | % | |||||||||||||||
Income before income taxes | 60,518 | 61,839 | (2 | )% | 66,215 | (9 | )% | 255,481 | 263,834 | (3 | )% | |||||||||||||||
Income tax provision | 16,069 | 15,461 | 4 | % | 48,231 | (67 | )% | 65,892 | 124,389 | (47 | )% | |||||||||||||||
Net income | $ | 44,449 | $ | 46,378 | (4 | )% | $ | 17,984 | 147 | % | $ | 189,589 | $ | 139,445 | 36 | % | ||||||||||
Earnings Per Common Share: | ||||||||||||||||||||||||||
Basic | $ | 0.35 | $ | 0.36 | $ | 0.13 | $ | 1.44 | $ | 1.03 | ||||||||||||||||
Diluted | $ | 0.35 | $ | 0.36 | $ | 0.13 | $ | 1.44 | $ | 1.03 | ||||||||||||||||
Average Shares Outstanding: | ||||||||||||||||||||||||||
Basic | 128,115,170 | 130,268,992 | 135,505,041 | 131,716,726 | 135,348,938 | |||||||||||||||||||||
Diluted | 128,261,998 | 130,525,474 | 135,752,978 | 131,954,192 | 135,684,969 | |||||||||||||||||||||
Hope Bancorp, Inc. | |||||||||||||||
Selected Financial Data | |||||||||||||||
Unaudited |
|||||||||||||||
At or for the Three Months Ended | At or for the Twelve | ||||||||||||||
(Annualized) | Months Ended | ||||||||||||||
Profitability measures: | 12/31/2018 | 9/30/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | ||||||||||
ROA | 1.17 | % | 1.24 | % | 0.51 | % | 1.29 | % | 1.02 | % | |||||
ROE | 9.42 | % | 9.76 | % | 3.70 | % | 9.92 | % | 7.31 | % | |||||
Return on average tangible equity 1 | 12.62 | % | 13.06 | % | 4.92 | % | 13.25 | % | 9.78 | % | |||||
Net interest margin | 3.41 | % | 3.47 | % | 3.84 | % | 3.53 | % | 3.80 | % | |||||
Efficiency ratio | 52.57 | % | 49.38 | % | 51.12 | % | 50.67 | % | 48.67 | % | |||||
Noninterest expense / average assets | 1.85 | % | 1.80 | % | 2.08 | % | 1.88 | % | 1.95 | % | |||||
1 | Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. | |
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands, except share data) |
|||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
12/31/2018 | 9/30/2018 | 12/31/2017 | |||||||||||||||||||||||||
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 receivable, including loans held for sale | $ | 11,935,109 | $ | 156,606 | 5.21 | % | $ | 11,781,091 | $ | 153,366 | 5.16 | % | $ | 10,931,523 | $ | 141,129 | 5.12 | % | |||||||||
Securities available for sale | 1,835,218 | 12,385 | 2.68 | % | 1,844,493 | 11,957 | 2.57 | % | 1,794,260 | 10,523 | 2.33 | % | |||||||||||||||
FRB and FHLB stock and other investments | 431,901 | 3,035 | 2.79 | % | 446,390 | 2,503 | 2.22 | % | 345,363 | 1,533 | 1.76 | % | |||||||||||||||
Total interest earning assets | $ | 14,202,228 | $ | 172,026 | 4.81 | % | $ | 14,071,974 | $ | 167,826 | 4.73 | % | $ | 13,071,146 | $ | 153,185 | 4.65 | % | |||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||
Demand, interest bearing | $ | 3,127,598 | $ | 12,425 | 1.58 | % | $ | 3,237,673 | $ | 11,526 | 1.41 | % | $ | 3,538,995 | $ | 8,564 | 0.96 | % | |||||||||
Savings | 225,746 | 537 | 0.94 | % | 228,218 | 486 | 0.84 | % | 241,667 | 439 | 0.72 | % | |||||||||||||||
Time deposits | 5,626,355 | 29,515 | 2.08 | % | 5,344,464 | 25,010 | 1.86 | % | 4,072,565 | 12,898 | 1.26 | % | |||||||||||||||
Total interest bearing deposits | 8,979,699 | 42,477 | 1.88 | % | 8,810,355 | 37,022 | 1.67 | % | 7,853,227 | 21,901 | 1.11 | % | |||||||||||||||
FHLB advances & fed funds purchased | 824,995 | 3,674 | 1.77 | % | 837,412 | 3,703 | 1.75 | % | 1,003,951 | 3,531 | 1.40 | % | |||||||||||||||
Convertible debt | 193,749 | 2,299 | 4.64 | % | 192,541 | 2,299 | 4.67 | % | — | — | — | % | |||||||||||||||
Subordinated debentures | 97,856 | 1,683 | 6.73 | % | 97,589 | 1,655 | 6.64 | % | 96,786 | 1,361 | 5.50 | % | |||||||||||||||
Total interest bearing liabilities | 10,096,299 | $ | 50,133 | 1.97 | % | 9,937,897 | $ | 44,679 | 1.78 | % | 8,953,964 | $ | 26,793 | 1.19 | % | ||||||||||||
Noninterest bearing demand deposits | 3,018,672 | 3,041,489 | 3,029,958 | ||||||||||||||||||||||||
Total funding liabilities/cost of funds | $ | 13,114,971 | 1.52 | % | $ | 12,979,386 | 1.37 | % | $ | 11,983,922 | 0.89 | % | |||||||||||||||
Net interest income/net interest spread | $ | 121,893 | 2.84 | % | $ | 123,147 | 2.95 | % | $ | 126,392 | 3.46 | % | |||||||||||||||
Net interest margin | 3.41 | % | 3.47 | % | 3.84 | % | |||||||||||||||||||||
Cost of deposits: | |||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,018,672 | $ | — | — | % | $ | 3,041,489 | $ | — | — | % | $ | 3,029,958 | $ | — | — | % | |||||||||
Interest bearing deposits | 8,979,699 | 42,477 | 1.88 | % | 8,810,355 | 37,022 | 1.67 | % | 7,853,227 | 21,901 | 1.11 | % | |||||||||||||||
Total deposits | $ | 11,998,371 | $ | 42,477 | 1.40 | % | $ | 11,851,844 | $ | 37,022 | 1.24 | % | $ | 10,883,185 | $ | 21,901 | 0.80 | % | |||||||||
Hope Bancorp, Inc. | ||||||||||||||||||
Selected Financial Data | ||||||||||||||||||
Unaudited (dollars in thousands, except share data) |
||||||||||||||||||
Twelve Months Ended | ||||||||||||||||||
12/31/2018 | 12/31/2017 | |||||||||||||||||
Interest | Interest | |||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | |||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | |||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||
Loans receivable, including loans held for sale | $ | 11,547,022 | $ | 594,103 | 5.15 | % | $ | 10,642,349 | $ | 529,760 | 4.98 | % | ||||||
Securities available for sale | 1,772,080 | 45,342 | 2.56 | % | 1,679,468 | 36,917 | 2.20 | % | ||||||||||
FRB and FHLB stock and other investments | 487,922 | 10,727 | 2.20 | % | 360,086 | 5,427 | 1.51 | % | ||||||||||
Total interest earning assets | $ | 13,807,024 | $ | 650,172 | 4.71 | % | $ | 12,681,903 | $ | 572,104 | 4.51 | % | ||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Demand, interest bearing | $ | 3,276,815 | $ | 43,252 | 1.32 | % | $ | 3,490,440 | $ | 31,856 | 0.91 | % | ||||||
Savings | 229,608 | 1,889 | 0.82 | % | 268,292 | 1,354 | 0.50 | % | ||||||||||
Time deposits | 5,107,698 | 89,817 | 1.76 | % | 4,037,259 | 41,692 | 1.03 | % | ||||||||||
Total interest bearing deposits | 8,614,121 | 134,958 | 1.57 | % | 7,795,991 | 74,902 | 0.96 | % | ||||||||||
FHLB advances & fed funds purchased | 870,124 | 15,127 | 1.74 | % | 787,119 | 10,706 | 1.36 | % | ||||||||||
Convertible debt | 123,040 | 5,797 | 4.65 | % | — | — | — | % | ||||||||||
Subordinated debentures | 97,455 | 6,363 | 6.44 | % | 96,363 | 5,116 | 5.24 | % | ||||||||||
Total interest bearing liabilities | 9,704,740 | $ | 162,245 | 1.67 | % | 8,679,473 | $ | 90,724 | 1.05 | % | ||||||||
Noninterest bearing demand deposits | 3,014,056 | 2,955,895 | ||||||||||||||||
Total funding liabilities/cost of funds | $ | 12,718,796 | 1.28 | % | $ | 11,635,368 | 0.78 | % | ||||||||||
Net interest income/net interest spread | $ | 487,927 | 3.04 | % | $ | 481,380 | 3.46 | % | ||||||||||
Net interest margin | 3.53 | % | 3.80 | % | ||||||||||||||
Cost of deposits: | ||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,014,056 | $ | — | — | % | $ | 2,955,895 | $ | — | — | % | ||||||
Interest bearing deposits | 8,614,121 | 134,958 | 1.57 | % | 7,795,991 | 74,902 | 0.96 | % | ||||||||||
Total deposits | $ | 11,628,177 | $ | 134,958 | 1.16 | % | $ | 10,751,886 | $ | 74,902 | 0.70 | % | ||||||
Hope Bancorp, Inc. | |||||||||||||||||||||||||||
Selected Financial Data | |||||||||||||||||||||||||||
Unaudited (dollars in thousands) |
|||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
AVERAGE BALANCES: | 12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | 12/31/2018 | 12/31/2017 | % change | |||||||||||||||||||
Loans receivable, including loans held for sale | $ | 11,935,109 | $ | 11,781,091 | 1 | % | $ | 10,931,523 | 9 | % | $ | 11,547,022 | $ | 10,642,349 | 9 | % | |||||||||||
Investments | 2,267,119 | 2,290,883 | (1 | )% | 2,139,623 | 6 | % | 2,260,002 | 2,039,554 | 11 | % | ||||||||||||||||
Interest earning assets | 14,202,228 | 14,071,974 | 1 | % | 13,071,146 | 9 | % | 13,807,024 | 12,681,903 | 9 | % | ||||||||||||||||
Total assets | 15,152,946 | 15,019,224 | 1 | % | 14,043,102 | 8 | % | 14,749,166 | 13,648,963 | 8 | % | ||||||||||||||||
Interest bearing deposits | 8,979,699 | 8,810,355 | 2 | % | 7,853,227 | 14 | % | 8,614,121 | 7,795,991 | 10 | % | ||||||||||||||||
Interest bearing liabilities | 10,096,299 | 9,937,897 | 2 | % | 8,953,964 | 13 | % | 9,704,740 | 8,679,473 | 12 | % | ||||||||||||||||
Noninterest bearing demand deposits | 3,018,672 | 3,041,489 | (1 | )% | 3,029,958 | — | % | 3,014,056 | 2,955,895 | 2 | % | ||||||||||||||||
Stockholders’ equity | 1,888,053 | 1,899,853 | (1 | )% | 1,944,404 | (3 | )% | 1,910,224 | 1,907,746 | — | % | ||||||||||||||||
Net interest earning assets | 4,105,929 | 4,134,077 | (1 | )% | 4,117,182 | — | % | 4,102,284 | 4,002,430 | 2 | % | ||||||||||||||||
LOAN PORTFOLIO COMPOSITION: | 12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | ||||||||||||||||||||||
Commercial loans | $ | 2,324,820 | $ | 2,318,213 | — | % | $ | 1,947,533 | 19 | % | |||||||||||||||||
Real estate loans | 8,721,600 | 8,639,857 | 1 | % | 8,508,222 | 3 | % | ||||||||||||||||||||
Consumer and other loans | 1,051,486 | 969,835 | 8 | % | 647,102 | 62 | % | ||||||||||||||||||||
Loans outstanding | 12,097,906 | 11,927,905 | 1 | % | 11,102,857 | 9 | % | ||||||||||||||||||||
Unamortized deferred loan fees - net of costs | 209 | (723 | ) | 129 | % | (282 | ) | 174 | % | ||||||||||||||||||
Loans, net of deferred loan fees and costs | 12,098,115 | 11,927,182 | 1 | % | 11,102,575 | 9 | % | ||||||||||||||||||||
Allowance for loan losses | (92,557 | ) | (90,629 | ) | (2 | )% | (84,541 | ) | (9 | )% | |||||||||||||||||
Loan receivable, net | $ | 12,005,558 | $ | 11,836,553 | 1 | % | $ | 11,018,034 | 9 | % | |||||||||||||||||
REAL ESTATE LOANS BY PROPERTY TYPE: | 12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | ||||||||||||||||||||||
Retail buildings | $ | 2,379,589 | $ | 2,388,343 | — | % | $ | 2,375,588 | — | % | |||||||||||||||||
Hotels/motels | 1,694,696 | 1,663,543 | 2 | % | 1,631,314 | 4 | % | ||||||||||||||||||||
Gas stations/car washes | 980,619 | 964,019 | 2 | % | 964,246 | 2 | % | ||||||||||||||||||||
Mixed-use facilities | 698,779 | 694,961 | 1 | % | 624,401 | 12 | % | ||||||||||||||||||||
Warehouses | 966,413 | 927,767 | 4 | % | 915,465 | 6 | % | ||||||||||||||||||||
Multifamily | 453,555 | 457,282 | (1 | )% | 455,463 | — | % | ||||||||||||||||||||
Other | 1,547,949 | 1,543,942 | — | % | 1,541,745 | — | % | ||||||||||||||||||||
Total | $ | 8,721,600 | $ | 8,639,857 | 1 | % | $ | 8,508,222 | 3 | % | |||||||||||||||||
DEPOSIT COMPOSITION | 12/31/2018 | 9/30/2018 | % change | 12/31/2017 | % change | ||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,022,633 | $ | 3,020,819 | — | % | $ | 2,998,734 | 1 | % | |||||||||||||||||
Money market and other | 3,036,653 | 3,247,420 | (6 | )% | 3,332,703 | (9 | )% | ||||||||||||||||||||
Saving deposits | 225,746 | 229,081 | (1 | )% | 240,509 | (6 | )% | ||||||||||||||||||||
Time deposits | 5,870,624 | 5,548,299 | 6 | % | 4,274,663 | 37 | % | ||||||||||||||||||||
Total deposit balances | $ | 12,155,656 | $ | 12,045,619 | 1 | % | $ | 10,846,609 | 12 | % | |||||||||||||||||
DEPOSIT COMPOSITION (%) | 12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||||||||||||||||||||
Noninterest bearing demand deposits | 24.9 | % | 25.1 | % | 27.6 | % | |||||||||||||||||||||
Money market and other | 25.0 | % | 27.0 | % | 30.7 | % | |||||||||||||||||||||
Saving deposits | 1.8 | % | 1.9 | % | 2.2 | % | |||||||||||||||||||||
Time deposits | 48.3 | % | 46.0 | % | 39.5 | % | |||||||||||||||||||||
Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||
Hope Bancorp, Inc. | ||||||||||||
Selected Financial Data | ||||||||||||
Unaudited (dollars in thousands, except per share data) |
||||||||||||
CAPITAL RATIOS: | 12/31/2018 | 9/30/2018 | 12/31/2017 | |||||||||
Total stockholders’ equity | $ | 1,903,211 | $ | 1,904,580 | $ | 1,928,255 | ||||||
Common equity tier 1 ratio | 11.44 | % | 11.61 | % | 12.30 | % | ||||||
Tier 1 risk-based capital ratio | 12.21 | % | 11.61 | % | 13.11 | % | ||||||
Total risk-based capital ratio | 12.94 | % | 13.10 | % | 13.82 | % | ||||||
Tier 1 leverage ratio | 10.55 | % | 10.13 | % | 11.54 | % | ||||||
Total risk weighted assets | $ | 12,748,658 | $ | 12,747,343 | $ | 11,965,215 | ||||||
Book value per common share | $ | 15.03 | $ | 14.64 | $ | 14.23 | ||||||
Tangible common equity to tangible assets 2 | 9.61 | % | 9.66 | % | 10.54 | % | ||||||
Tangible common equity per share 2 | $ | 11.25 | $ | 10.96 | $ | 10.68 | ||||||
2 |
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. |
|
Reconciliation of GAAP financial measures to non-GAAP financial measures: | ||||||||||||
TANGIBLE COMMON EQUITY (“TCE”) | 12/31/2018 | 9/30/2018 | 12/31/2017 | |||||||||
Total stockholders’ equity | $ | 1,903,211 | $ | 1,904,580 | $ | 1,928,255 | ||||||
Less goodwill and core deposit intangible assets, net | (478,511 | ) | (479,127 | ) | (480,973 | ) | ||||||
Tangible common equity | $ | 1,424,700 | $ | 1,425,453 | $ | 1,447,282 | ||||||
Total assets | $ | 15,305,952 | $ | 15,229,495 | $ | 14,206,717 | ||||||
Less: Goodwill and core deposit intangible assets, net | (478,511 | ) | (479,127 | ) | (480,973 | ) | ||||||
Tangible assets | $ | 14,827,441 | $ | 14,750,368 | $ | 13,725,744 | ||||||
Common shares outstanding | 126,639,912 | 130,074,103 | 135,511,891 | |||||||||
Tangible common equity to tangible assets | 9.61 | % | 9.66 | % | 10.54 | % | ||||||
Tangible common equity per share | $ | 11.25 | $ | 10.96 | $ | 10.68 | ||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
NET INCOME EXCLUDING TAX REFORM ADJUSTMENTS | 12/31/2018 | 9/30/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | ||||||||||
Income before income taxes | $ | 60,518 | $ | 61,839 | $ | 66,215 | $ | 255,481 | $ | 263,834 | |||||
Income tax provision | 16,069 | 15,461 | 48,231 | 65,892 | 124,389 | ||||||||||
Less tax reform adjustments: | |||||||||||||||
Deferred tax asset | 442 | — | 23,835 | 442 | 23,835 | ||||||||||
Investments in affordable housing partnerships | — | — | 1,588 | — | 1,588 | ||||||||||
Income tax provision, excluding tax reform adjustments | 15,627 | 15,461 | 22,808 | 65,450 | 98,966 | ||||||||||
Net income, excluding tax reform adjustments | $ | 44,891 | $ | 46,378 | $ | 43,407 | $ | 190,031 | $ | 164,868 | |||||
Hope Bancorp, Inc. | ||||||||||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||||||||||
Unaudited (dollars in thousands, except per share data) |
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Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES: | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | |||||||||||||||||||||
Balance at beginning of period | $ | 90,629 | $ | 89,881 | $ | 86,461 | $ | 84,541 | $ | 83,633 | $ | 84,541 | $ | 79,343 | ||||||||||||||
Provision for loan losses | 2,800 | 7,300 | 2,300 | 2,500 | 3,600 | 14,900 | 17,360 | |||||||||||||||||||||
Recoveries | 805 | 315 | 2,383 | 488 | 1,078 | 3,991 | 5,248 | |||||||||||||||||||||
Charge offs | (1,677 | ) | (6,867 | ) | (1,263 | ) | (1,068 | ) | (3,770 | ) | (10,875 | ) | (17,410 | ) | ||||||||||||||
Balance at end of period | $ | 92,557 | $ | 90,629 | $ | 89,881 | $ | 86,461 | $ | 84,541 | $ | 92,557 | $ | 84,541 | ||||||||||||||
Net charge offs/average loans receivable (annualized) | 0.03 | % | 0.22 | % | (0.04 | )% | 0.02 | % | 0.10 | % | 0.06 | % | 0.11 | % | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
NET CHARGED OFF/(RECOVERED) LOANS BY TYPE | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | |||||||||||||||||||||
Real estate loans | $ | 123 | $ | 6,004 | $ | (390 | ) | $ | (37 | ) | $ | 342 | $ | 5,700 | $ | 2,930 | ||||||||||||
Commercial loans | 436 | 230 | (949 | ) | 291 | 2,170 | 8 | 8,303 | ||||||||||||||||||||
Consumer loans | 313 | 318 | 219 | 326 | 180 | 1,176 | 929 | |||||||||||||||||||||
Total net charge offs / (recoveries) | $ | 872 | $ | 6,552 | $ | (1,120 | ) | $ | 580 | $ | 2,692 | $ | 6,884 | $ | 12,162 | |||||||||||||
Hope Bancorp, Inc. | ||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||
Unaudited (dollars in thousands) |
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NONPERFORMING ASSETS | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||
Delinquent loans on nonaccrual status 3 | $ | 53,286 | $ | 56,299 | $ | 68,226 | $ | 68,152 | $ | 46,775 | ||||||||||
Delinquent loans 90 days or more on accrual status | 1,529 | 401 | 3,030 | 1,894 | 407 | |||||||||||||||
Accruing restructured loans 4 | 50,410 | 52,521 | 49,219 | 59,596 | 67,250 | |||||||||||||||
Total nonperforming loans | 105,225 | 109,221 | 120,475 | 129,642 | 114,432 | |||||||||||||||
Other real estate owned | 7,754 | 8,981 | 8,656 | 8,261 | 10,787 | |||||||||||||||
Total nonperforming assets | $ | 112,979 | $ | 118,202 | $ | 129,131 | $ | 137,903 | $ | 125,219 | ||||||||||
Nonperforming assets/total assets | 0.74 | % | 0.78 | % | 0.87 | % | 0.95 | % | 0.88 | % | ||||||||||
Nonperforming assets/loans receivable & OREO | 0.93 | % | 0.99 | % | 1.11 | % | 1.22 | % | 1.13 | % | ||||||||||
Nonperforming assets/total capital | 5.94 | % | 6.21 | % | 6.78 | % | 7.09 | % | 6.49 | % | ||||||||||
Nonperforming loans/loans receivable | 0.87 | % | 0.92 | % | 1.03 | % | 1.15 | % | 1.03 | % | ||||||||||
Nonaccrual loans/loans receivable | 0.44 | % | 0.47 | % | 0.58 | % | 0.60 | % | 0.42 | % | ||||||||||
Allowance for loan losses/loans receivable | 0.77 | % | 0.76 | % | 0.77 | % | 0.77 | % | 0.76 | % | ||||||||||
Allowance for loan losses/nonaccrual loans | 173.70 | % | 160.98 | % | 131.74 | % | 126.86 | % | 180.74 | % | ||||||||||
Allowance for loan losses/nonperforming loans | 87.96 | % | 82.98 | % | 74.61 | % | 66.69 | % | 73.88 | % | ||||||||||
Allowance for loan losses/nonperforming assets | 81.92 | % | 76.67 | % | 69.60 | % | 62.70 | % | 67.51 | % | ||||||||||
3 |
Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $29.2 million, $23.1 million, $26.0 million, $21.9 million, and $22.1 million, at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively. |
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4 |
Excludes Acquired Credit Impaired Loans totaling $14.1 million, $16.6 million, $17.8 million, $17.0 million, and $18.1 million at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively. |
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BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||
Retail buildings | $ | 3,085 | $ | 3,112 | $ | 3,138 | $ | 8,034 | $ | 8,183 | |||||
Hotels/motels | — | — | — | 1,265 | 1,273 | ||||||||||
Gas stations/car washes | 267 | — | — | — | — | ||||||||||
Mixed-use facilities | 5,956 | 5,994 | 6,026 | 2,852 | 129 | ||||||||||
Warehouses | 7,188 | 7,219 | 7,462 | 7,615 | 5,577 | ||||||||||
Other 5 | 33,914 | 36,196 | 32,593 | 39,830 | 52,088 | ||||||||||
Total | $ | 50,410 | $ | 52,521 | $ | 49,219 | $ | 59,596 | $ | 67,250 | |||||
5 | Includes commercial business and other loans | |
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||
Legacy | |||||||||||||||
30 - 59 days | $ | 23,846 | $ | 26,872 | $ | 11,872 | $ | 22,126 | $ | 16,092 | |||||
60 - 89 days | 218 | 2,773 | 8,542 | 2,102 | 1,724 | ||||||||||
Total delinquent loans less than 90 days past due - legacy | $ | 24,064 | $ | 29,645 | $ | 20,414 | $ | 24,228 | $ | 17,816 | |||||
Acquired | |||||||||||||||
30 - 59 days | $ | 1,094 | $ | 5,240 | $ | 5,911 | $ | 9,158 | $ | 4,242 | |||||
60 - 89 days | 406 | 18 | 124 | 1,011 | 1,895 | ||||||||||
Total delinquent loans less than 90 days past due - acquired | $ | 1,500 | $ | 5,258 | $ | 6,035 | $ | 10,169 | $ | 6,137 | |||||
Total delinquent loans less than 90 days past due | $ | 25,564 | $ | 34,903 | $ | 26,449 | $ | 34,397 | $ | 23,953 | |||||
Hope Bancorp, Inc. | |||||||||||||||
Selected Financial Data | |||||||||||||||
Unaudited (dollars in thousands) |
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ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||
Legacy | |||||||||||||||
Real estate loans | $ | 2,352 | $ | 13,275 | $ | 10,153 | $ | 12,272 | $ | 9,008 | |||||
Commercial loans | 5,159 | 986 | 7,380 | 1,994 | 1,302 | ||||||||||
Consumer loans | 16,553 | 15,384 | 2,881 | 9,962 | 7,506 | ||||||||||
Total delinquent loans less than 90 days past due - legacy | $ | 24,064 | $ | 29,645 | $ | 20,414 | $ | 24,228 | $ | 17,816 | |||||
Acquired | |||||||||||||||
Real estate loans | $ | 905 | $ | 4,703 | $ | 4,849 | $ | 7,537 | $ | 3,937 | |||||
Commercial loans | 595 | 555 | 338 | 2,280 | 1,244 | ||||||||||
Consumer loans | — | — | 848 | 352 | 956 | ||||||||||
Total delinquent loans less than 90 days past due - acquired | $ | 1,500 | $ | 5,258 | $ | 6,035 | $ | 10,169 | $ | 6,137 | |||||
Total delinquent loans less than 90 days past due | $ | 25,564 | $ | 34,903 | $ | 26,449 | $ | 34,397 | $ | 23,953 | |||||
NONACCRUAL LOANS BY TYPE | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||
Real estate loans | $ | 33,719 | $ | 35,614 | $ | 34,537 | $ | 37,093 | $ | 22,194 | |||||
Commercial loans | 18,128 | 19,119 | 31,250 | 29,446 | 23,099 | ||||||||||
Consumer loans | 1,439 | 1,566 | 2,439 | 1,613 | 1,482 | ||||||||||
Total nonaccrual loans | $ | 53,286 | $ | 56,299 | $ | 68,226 | $ | 68,152 | $ | 46,775 | |||||
CRITICIZED LOANS | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||
Legacy | |||||||||||||||
Special mention | $ | 121,622 | $ | 179,723 | $ | 101,435 | $ | 140,588 | $ | 151,413 | |||||
Substandard | 193,494 | 171,767 | 191,787 | 180,631 | 179,795 | ||||||||||
Doubtful | — | 429 | 5,852 | 108 | — | ||||||||||
Loss | — | 1 | — | — | — | ||||||||||
Total criticized loans - legacy | $ | 315,116 | $ | 351,920 | $ | 299,074 | $ | 321,327 | $ | 331,208 | |||||
Acquired | |||||||||||||||
Special mention | $ | 41,467 | $ | 38,023 | $ | 38,059 | $ | 55,494 | $ | 63,478 | |||||
Substandard | 124,421 | 130,078 | 159,613 | 163,429 | 173,427 | ||||||||||
Doubtful | 377 | 444 | 419 | 477 | 362 | ||||||||||
Loss | 35 | — | — | 3 | — | ||||||||||
Total criticized loans - acquired | $ | 166,300 | $ | 168,545 | $ | 198,091 | $ | 219,403 | $ | 237,267 | |||||
Total criticized loans | $ | 481,416 | $ | 520,465 | $ | 497,165 | $ | 540,730 | $ | 568,475 | |||||