Hope Bancorp Reports 2019 Fourth Quarter Financial Results

LOS ANGELES--()--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 year ended December 31, 2019.

For the three months ended December 31, 2019, net income totaled $43.0 million, or $0.34 per diluted common share. This compares with net income of $42.6 million, or $0.34 per diluted common share, in the 2019 third quarter and $44.4 million, or $0.35 per diluted common share, in the 2018 fourth quarter. For 2019, net income totaled $171.0 million, or $1.35 per diluted common share, compared with 2018 net income of $189.6 million, or $1.44 per diluted common share.

“We are pleased to have completed the year with another solid quarter that underscores the consistent progress we are making with our strategic initiatives,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “Most notably, we continued to see a favorable shift in our deposit base to lower costing core deposits, which contributed to a considerable reduction in our total cost of deposits, the first decrease we have seen in three years. We also originated a record level of $848 million in new loans, which continues to represent a well-balanced mix of commercial real estate, commercial and consumer loans and led to a second consecutive quarter of organic loan growth. Noninterest expenses remain well contained at 1.85% of total assets, notwithstanding the ongoing investments we continue to make in our organization. And our active buyback of 943,094 shares under our current share repurchase plan underscores our ongoing commitment to enhance shareholder returns.

“We move forward into 2020 with strong conviction that we have the right strategies in place given the current stage of the economic growth cycle and the lower interest rate environment that we are operating in. With the progress we have made in controlling our deposit costs, the growing contribution of the higher-rate SBA loans in our portfolio, and assuming no further changes in the Fed Funds rate this year, we believe we are positioned to begin seeing some margin expansion by the second half of the year, which will ultimately improve our ability to further enhance returns and profitability.”

Q4 2019 Highlights

  • Record new loan originations of $847.6 million led to more than a 1% increase in loans receivable quarter-over-quarter, or 6% annualized.
  • Deposit initiatives contributed to a 13 basis point reduction quarter-over-quarter in total deposit costs, the first quarter-over-quarter decrease since Q4 2016.
  • Total deposits increased 2% quarter-over-quarter, reflecting a continuation of a favorable mix-shift to core deposits.
  • Total noninterest expenses well contained and remain at 1.85% of average assets.
  • Repurchased 943,094 shares at an average price of $14.62 during the 2019 fourth quarter.

Financial Highlights

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

At or for the Three Months Ended

 

12/31/2019

 

9/30/2019

 

12/31/2018

Net income

$

43,009

 

 

$

42,592

 

 

$

44,449

 

Diluted earnings per share

$

0.34

 

 

$

0.34

 

 

$

0.35

 

Net interest income before provision for loan losses

$

113,508

 

 

$

116,258

 

 

$

121,893

 

Net interest margin

 

3.16

%

 

 

3.25

%

 

 

3.41

%

Noninterest income

$

12,979

 

 

$

12,995

 

 

$

11,614

 

Noninterest expense

$

70,429

 

 

$

69,995

 

 

$

70,189

 

Net loans receivable

$

12,181,863

 

 

$

12,010,800

 

 

$

12,005,558

 

Deposits

$

12,527,364

 

 

$

12,234,750

 

 

$

12,155,656

 

Nonaccrual loans (1) (2)

$

54,785

 

 

$

42,235

 

 

$

53,286

 

Nonperforming loans to loans receivable (1) (2)

 

0.80

%

 

 

0.64

%

 

 

0.87

%

ALLL to loans receivable

 

0.77

%

 

 

0.78

%

 

 

0.77

%

ALLL to nonaccrual loans (1) (2)

 

171.84

%

 

 

222.28

%

 

 

173.70

%

ALLL to nonperforming assets (1) (2)

 

77.08

%

 

 

97.06

%

 

 

81.92

%

Provision for loan losses

$

1,000

 

 

$

2,100

 

 

$

2,800

 

Net charge offs

$

738

 

 

$

1,822

 

 

$

872

 

Return on average assets (“ROA”)

 

1.13

%

 

 

1.12

%

 

 

1.17

%

Return on average equity (“ROE”)

 

8.46

%

 

 

8.47

%

 

 

9.42

%

Return on average common tangible equity (“ROTCE”) (3)

 

11.04

%

 

 

11.11

%

 

 

12.62

%

Noninterest expense / average assets

 

1.85

%

 

 

1.85

%

 

 

1.85

%

Efficiency ratio

 

55.68

%

 

 

54.15

%

 

 

52.57

%

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation

(2)

Excludes purchased credit-impaired loans

(3)

Return on average tangible common equity is a non-GAAP financial measure. A reconciliation of the Company’s return on average tangible common equity is provided in the accompanying financial information on Table Page 7.

Operating Results for the 2019 Fourth Quarter

Net interest income before provision for loan losses for the 2019 fourth quarter totaled $113.5 million, compared with $116.3 million in the 2019 third quarter and $121.9 million in the year-ago fourth quarter.

The net interest margin for the 2019 fourth quarter declined 9 basis points to 3.16% from 3.25% in the 2019 third quarter, reflecting lower weighted average yield on loans, due to three decreases in the fed funds rate of 25 basis points each on July 31, September 18 and October 30, 2019, partially offset by lower deposit costs. The net interest margin in the prior-year fourth quarter was 3.41%.

The weighted average yield on loans for the 2019 fourth quarter was 5.04%, compared with 5.27% in the preceding third quarter and 5.21% in the year-ago fourth quarter.

The Company continued to see benefits from its deposit initiatives with a favorable shift in the mix of deposits. This contributed to a quarter-over-quarter decrease in the weighted average cost of deposits, which was 1.49% for the 2019 fourth quarter, compared with 1.62% for the third quarter of 2019. In the 2018 fourth quarter, the weighted average cost of deposits was 1.40%.

Noninterest income totaled $13.0 million for the 2019 fourth quarter and preceding third quarter. Net gains on sales of other loans, predominantly from the sale of residential mortgage loans, increased to $1.9 million for the 2019 fourth quarter from $804,000 in the preceding third quarter. This increase was largely offset by lower levels of swap fee income versus the preceding quarter. In the 2018 fourth quarter, noninterest income totaled $11.6 million and included a $447,000 net gain on sales of SBA loans to the secondary market and $381,000 net gain on the sale of other loans. Since the middle of the 2018 fourth quarter, the Company has discontinued its practice of regularly selling SBA loans to the secondary market.

Noninterest expense was stable at $70.4 million for the 2019 fourth quarter, compared with $70.0 million for the preceding third quarter and $70.2 million for the year-ago fourth quarter. Noninterest expense as a percentage of average assets amounted to 1.85% for the 2019 fourth quarter, 2019 third quarter and 2018 fourth quarter.

The slight increase in noninterest expense quarter-over-quarter reflects an increase in professional fees, FDIC assessment, and credit and OREO related expenses. The preceding third quarter included FDIC assessment credits which reduced the FDIC assessment expense for the quarter to zero, compared with minimal credit applied for the fourth quarter of 2019. These increases were offset by lower compensation costs in the 2019 fourth quarter.

Salaries and employee benefits expense decreased to $39.8 million for the 2019 fourth quarter from $41.6 million for the 2019 third quarter, largely reflecting reduced expenses related to the Company’s 401(k) and insurance programs. In the 2018 fourth quarter, salaries and employee benefits expense totaled $36.6 million.

The effective tax rate for the 2019 fourth quarter was 21.9%, compared with 25.5% in the preceding 2019 third quarter and 26.6% in the 2018 fourth quarter. The Company attributed the reduction of the effective tax rate for the 2019 fourth quarter mainly due to adjustments related to FASB Interpretation No. 48 (“FIN 48”), which lowered the tax provision for the quarter by approximately $1.8 million, net of Federal and State tax.

Balance Sheet Summary

New loan originations funded during the 2019 fourth quarter totaled a record $847.6 million and included SBA loan production of $61.8 million and residential mortgage loan originations of $64.2 million. This compares with 2019 third quarter originations of $693.9 million, including SBA loan production of $53.8 million and residential mortgage loan originations of $58.5 million. In the year-ago fourth quarter, new loan originations funded totaled $667.3 million, including SBA loan production of $81.5 million and residential mortgage loan originations of $162.3 million.

SBA 7(a) loan originations totaled $46.1 million for the 2019 fourth quarter, compared with $34.4 million for the third quarter of 2019 and $44.7 million for the year-ago fourth quarter. There were no sales of SBA 7(a) loans to the secondary market during 2019. In contrast, the Company sold $10.2 million of its SBA 7(a) loans during the 2018 fourth quarter prior to its decision to retain the loans in its portfolio.

At December 31, 2019, loans receivable increased 1% to $12.28 billion from $12.10 billion at September 30, 2019 and increased 1% from $12.10 billion at December 31, 2018.

Total deposits at December 31, 2019 increased 2% to $12.53 billion from $12.23 billion at September 30, 2019 and increased 3% from $12.16 billion at December 31, 2018. During the 2019 fourth quarter, the Company continued to see a favorable shift in the mix of deposits marked by higher core deposits, particularly in money market account balances, and decreases in higher-cost time deposits. Noninterest bearing demand deposits at year-end 2019 increased 2% from September 30, 2019 and increased 3% from December 31, 2018. Money market and other deposits at year-end 2019 increased 6% and 31% from September 30, 2019 and December 31, 2018, respectively, and rose as a percentage of total deposits to 32% at December 31, 2019 from 31% at September 30, 2019 and 25% at December 31, 2018.

Reflecting the continued favorable mix-shift in deposits, total cost of deposits decreased 13 basis points to 1.49% from 1.62% for the 2019 third quarter. In the fourth quarter of 2018, total cost of deposits was 1.40%.

Credit Quality

The provision for loan and lease losses for the 2019 fourth quarter was $1.0 million, compared with $2.1 million for the preceding 2019 third quarter and $2.8 million for the year-ago fourth quarter.

Following are the components of nonperforming assets as of December 31, 2019, September 30, 2019, and December 31, 2018:

(dollars in thousands) (unaudited)

12/31/2019

 

9/30/2019

 

12/31/2018

Loans on nonaccrual status (1)

$

54,785

 

$

42,235

 

$

53,286

Delinquent loans 90 days or more on accrual status (2)

 

7,547

 

 

398

 

 

1,529

Accruing troubled debt restructured loans

 

35,709

 

 

34,717

 

 

50,410

Total nonperforming loans

 

98,041

 

 

77,350

 

 

105,225

Other real estate owned

 

24,091

 

 

19,374

 

 

7,754

Total nonperforming assets

$

122,132

 

$

96,724

 

$

112,979

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $28.1 million, $37.3 million, and $29.2 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively.

(2)

Excludes Acquired Credit Impaired Loans totaling $13.2 million, $15.5 million, and $14.1 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively.

Following are the components of criticized loan balances as of December 31, 2019, September 30, 2019, and December 31, 2018:

(dollars in thousands) (unaudited)

12/31/2019

 

9/30/2019

 

12/31/2018

Special Mention (3)

$

141,452

 

$

139,848

 

$

163,089

Classified (3)

 

259,291

 

 

268,622

 

 

318,327

Criticized

$

400,743

 

$

408,470

 

$

481,416

(3)

Balances include purchased loans which were marked to fair value on the date of acquisition.

The Company recorded net charge offs of $738,000 during the 2019 fourth quarter, or 0.02% of average loans receivable on an annualized basis. This compares with net charge offs of $1.8 million, or 0.06% of average loans receivable on an annualized basis, during the 2019 third quarter. In the 2018 fourth quarter, the Company recorded net charge offs of $872,000, or 0.03% of average loans receivable on an annualized basis.

The allowance for loan and lease losses (“ALLL”) was $94.1 million, $93.9 million, and $92.6 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. As a percentage of loans receivable (excluding loans held for sale), the ALLL was 0.77%, 0.78% and 0.77% at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. The coverage ratio of the ALLL to nonperforming loans (excluding purchased credit-impaired loans) was 96.03% at December 31, 2019, 121.37% at September 30, 2019 and 87.96% at December 31, 2018.

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 $90.5 million at December 31, 2019, $77.3 million at September 30, 2019 and $104.0 million at December 31, 2018.

Capital

At December 31, 2019, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” financial institution, as summarized in the following table:

(unaudited)

12/31/2019

 

9/30/2019

 

12/31/2018

 

Minimum Guideline for “Well-Capitalized” Bank

Common Equity Tier 1 Capital

11.76%

 

11.89%

 

11.44%

 

6.50%

Tier 1 Leverage Ratio

11.22%

 

11.18%

 

10.55%

 

5.00%

Tier 1 Risk-Based Ratio

12.51%

 

12.65%

 

12.21%

 

8.00%

Total Risk-Based Ratio

13.23%

 

13.38%

 

12.94%

 

10.00%

Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:

(unaudited)

12/31/2019

 

9/30/2019

 

12/31/2018

Tangible common equity per share (1)

$12.40

 

$12.27

 

$11.25

Tangible common equity to tangible assets (2)

10.27%

 

10.43%

 

9.61%

(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 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 is provided in the accompanying financial information on Table Page 7.

Management reviews tangible common equity to tangible assets ratio in evaluating the Company’s and the Bank’s capital levels and has included these figures and tangible common equity per share 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.

Stock Repurchase Plan

Under the Company’s $50 million stock repurchase program announced on July 16, 2019, the Company repurchased 943,094 shares at an average price of $14.62 during the 2019 fourth quarter. As of December 31, 2019, $36.2 million of the plan remained available.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Thursday, January 23, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter ended December 31, 2019. 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, 2020, replay access code 10137771.

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 $15.7 billion in total assets as of December 31, 2019. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 58 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia 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. 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 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; the failure of or changes to assumptions and estimates underlying the Company’s allowances for loan losses, including the timing and effects of the implementation of the current expected credit losses model; 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)

Assets

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

Cash and due from banks

$

698,567

 

 

$

549,356

 

 

27

%

 

$

459,606

 

 

52

%

Securities available for sale, at fair value

1,715,987

 

 

1,772,322

 

 

(3

)%

 

1,846,265

 

 

(7

)%

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

97,659

 

 

98,848

 

 

(1

)%

 

104,705

 

 

(7

)%

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

54,271

 

 

29,627

 

 

83

%

 

25,128

 

 

116

%

Loans receivable

12,276,007

 

 

12,104,682

 

 

1

%

 

12,098,115

 

 

1

%

Allowance for loan losses

(94,144

)

 

(93,882

)

 

%

 

(92,557

)

 

(2

)%

Net loans receivable

12,181,863

 

 

12,010,800

 

 

1

%

 

12,005,558

 

 

1

%

Accrued interest receivable

30,772

 

 

29,743

 

 

3

%

 

32,225

 

 

(5

)%

Premises and equipment, net

52,012

 

 

52,604

 

 

(1

)%

 

53,794

 

 

(3

)%

Bank owned life insurance

76,339

 

 

75,968

 

 

%

 

75,219

 

 

1

%

Goodwill

464,450

 

 

464,450

 

 

%

 

464,450

 

 

%

Servicing assets

16,417

 

 

17,865

 

 

(8

)%

 

23,132

 

 

(29

)%

Other intangible assets, net

11,833

 

 

12,390

 

 

(4

)%

 

14,061

 

 

(16

)%

Other assets

267,270

 

 

265,905

 

 

1

%

 

201,809

 

 

32

%

Total assets

$

15,667,440

 

 

$

15,379,878

 

 

2

%

 

$

15,305,952

 

 

2

%

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

$

12,527,364

 

 

$

12,234,750

 

 

2

%

 

$

12,155,656

 

 

3

%

FHLB advances

625,000

 

 

625,000

 

 

%

 

821,280

 

 

(24

)%

Convertible notes, net

199,458

 

 

198,211

 

 

1

%

 

194,543

 

 

3

%

Subordinated debentures

103,035

 

 

102,755

 

 

%

 

101,929

 

 

1

%

Accrued interest payable

33,810

 

 

38,197

 

 

(11

)%

 

31,374

 

 

8

%

Other liabilities

142,762

 

 

149,681

 

 

(5

)%

 

97,959

 

 

46

%

Total liabilities

13,631,429

 

 

13,348,594

 

 

2

%

 

13,402,741

 

 

2

%

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

136

 

 

136

 

 

%

 

136

 

 

%

Capital surplus

1,428,066

 

 

1,426,666

 

 

%

 

1,423,405

 

 

%

Retained earnings

762,480

 

 

737,209

 

 

3

%

 

662,375

 

 

15

%

Treasury stock, at cost

(163,820

)

 

(150,000

)

 

(9

)%

 

(150,000

)

 

(9

)%

Accumulated other comprehensive gain (loss)

9,149

 

 

17,273

 

 

(47

)%

 

(32,705

)

 

128

%

Total stockholders’ equity

2,036,011

 

 

2,031,284

 

 

%

 

1,903,211

 

 

7

%

Total liabilities and stockholders’ equity

$

15,667,440

 

 

$

15,379,878

 

 

2

%

 

$

15,305,952

 

 

2

%

 

 

 

 

 

 

 

 

 

 

Common stock shares - authorized

150,000,000

 

 

150,000,000

 

 

 

 

150,000,000

 

 

 

Common stock shares - outstanding

125,756,543

 

 

126,697,925

 

 

 

 

126,639,912

 

 

 

Treasury stock shares

9,945,547

 

 

9,002,453

 

 

 

 

9,002,453

 

 

 

 

Table Page 1

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except per share data)

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

 

12/31/2019

 

12/31/2018

 

% change

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

152,795

 

 

$

158,115

 

 

(3

)%

 

$

156,606

 

 

(2

)%

 

$

627,673

 

 

$

594,103

 

 

6

%

Interest on securities

10,737

 

 

11,373

 

 

(6

)%

 

12,385

 

 

(13

)%

 

46,295

 

 

45,342

 

 

2

%

Interest on federal funds sold and other investments

2,241

 

 

2,929

 

 

(23

)%

 

3,035

 

 

(26

)%

 

10,818

 

 

10,727

 

 

1

%

Total interest income

165,773

 

 

172,417

 

 

(4

)%

 

172,026

 

 

(4

)%

 

684,786

 

 

650,172

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

45,428

 

 

49,057

 

 

(7

)%

 

42,477

 

 

7

%

 

190,158

 

 

134,958

 

 

41

%

Interest on other borrowings and convertible notes

6,837

 

 

7,102

 

 

(4

)%

 

7,656

 

 

(11

)%

 

28,033

 

 

27,287

 

 

3

%

Total interest expense

52,265

 

 

56,159

 

 

(7

)%

 

50,133

 

 

4

%

 

218,191

 

 

162,245

 

 

34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision for loan losses

113,508

 

 

116,258

 

 

(2

)%

 

121,893

 

 

(7

)%

 

466,595

 

 

487,927

 

 

(4

)%

Provision for loan losses

1,000

 

 

2,100

 

 

(52

)%

 

2,800

 

 

(64

)%

 

7,300

 

 

14,900

 

 

(51

)%

Net interest income after provision for loan losses

112,508

 

 

114,158

 

 

(1

)%

 

119,093

 

 

(6

)%

 

459,295

 

 

473,027

 

 

(3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service fees on deposit accounts

4,510

 

 

4,690

 

 

(4

)%

 

4,568

 

 

(1

)%

 

17,933

 

 

18,551

 

 

(3

)%

Net gains on sales of SBA loans

 

 

 

 

%

 

447

 

 

(100

)%

 

 

 

9,708

 

 

(100

)%

Net gains on sales of other loans

1,876

 

 

804

 

 

133

%

 

381

 

 

392

%

 

4,487

 

 

2,485

 

 

81

%

Net gains on sales of securities available for sale

 

 

153

 

 

(100

)%

 

 

 

%

 

282

 

 

 

 

100

%

Other income and fees

6,593

 

 

7,348

 

 

(10

)%

 

6,218

 

 

6

%

 

26,981

 

 

29,436

 

 

(8

)%

Total noninterest income

12,979

 

 

12,995

 

 

%

 

11,614

 

 

12

%

 

49,683

 

 

60,180

 

 

(17

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

39,841

 

 

41,607

 

 

(4

)%

 

36,594

 

 

9

%

 

161,174

 

 

153,523

 

 

5

%

Occupancy

7,516

 

 

7,703

 

 

(2

)%

 

7,877

 

 

(5

)%

 

30,735

 

 

30,371

 

 

1

%

Furniture and equipment

4,260

 

 

3,851

 

 

11

%

 

3,448

 

 

24

%

 

15,583

 

 

14,902

 

 

5

%

Advertising and marketing

2,462

 

 

2,377

 

 

4

%

 

2,392

 

 

3

%

 

9,146

 

 

9,414

 

 

(3

)%

Data processing and communications

2,416

 

 

2,821

 

 

(14

)%

 

3,650

 

 

(34

)%

 

10,780

 

 

14,232

 

 

(24

)%

Professional fees

5,948

 

 

5,241

 

 

13

%

 

4,756

 

 

25

%

 

22,528

 

 

16,286

 

 

38

%

FDIC assessment

772

 

 

 

 

100

%

 

1,406

 

 

(45

)%

 

3,882

 

 

6,572

 

 

(41

)%

Credit related expenses

1,717

 

 

1,031

 

 

67

%

 

507

 

 

239

%

 

4,975

 

 

2,863

 

 

74

%

OREO (income) expense, net

(122

)

 

(743

)

 

(84

)%

 

302

 

 

N/A

 

(934

)

 

187

 

 

N/A

Branch restructuring costs

 

 

 

 

%

 

1,674

 

 

(100

)%

 

 

 

1,674

 

 

(100

)%

Other

5,619

 

 

6,107

 

 

(8

)%

 

7,583

 

 

(26

)%

 

24,759

 

 

27,702

 

 

(11

)%

Total noninterest expense

70,429

 

 

69,995

 

 

1

%

 

70,189

 

 

%

 

282,628

 

 

277,726

 

 

2

%

Income before income taxes

55,058

 

 

57,158

 

 

(4

)%

 

60,518

 

 

(9

)%

 

226,350

 

 

255,481

 

 

(11

)%

Income tax provision

12,049

 

 

14,566

 

 

(17

)%

 

16,069

 

 

(25

)%

 

55,310

 

 

65,892

 

 

(16

)%

Net income

$

43,009

 

 

$

42,592

 

 

1

%

 

$

44,449

 

 

(3

)%

 

$

171,040

 

 

$

189,589

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.34

 

 

$

0.34

 

 

 

 

$

0.35

 

 

 

 

$

1.35

 

 

$

1.44

 

 

 

Diluted

$

0.34

 

 

$

0.34

 

 

 

 

$

0.35

 

 

 

 

$

1.35

 

 

$

1.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

126,410,924

 

 

126,685,921

 

 

 

 

128,115,170

 

 

 

 

126,598,564

 

 

131,716,726

 

 

 

Diluted

126,835,273

 

 

127,007,469

 

 

 

 

128,261,998

 

 

 

 

126,875,320

 

 

131,954,192

 

 

 

 

Table Page 2

Hope Bancorp, Inc.

Selected Financial Data

Unaudited

 

 

At or for the Three Months Ended
(Annualized)

 

At or for the Twelve Months Ended

Profitability measures:

12/31/2019

 

9/30/2019

 

12/31/2018

 

12/31/2019

 

12/31/2018

ROA

1.13

%

 

1.12

%

 

1.17

%

 

1.12

%

 

1.29

%

ROE

8.46

%

 

8.47

%

 

9.42

%

 

8.63

%

 

9.92

%

Return on average tangible equity 1

11.04

%

 

11.11

%

 

12.62

%

 

11.37

%

 

13.25

%

Net interest margin

3.16

%

 

3.25

%

 

3.41

%

 

3.27

%

 

3.53

%

Efficiency ratio

55.68

%

 

54.15

%

 

52.57

%

 

54.74

%

 

50.67

%

Noninterest expense / average assets

1.85

%

 

1.85

%

 

1.85

%

 

1.86

%

 

1.88

%

 

 

 

 

 

 

 

 

 

 

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.

Table Page 3

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

12/31/2019

 

9/30/2019

 

12/31/2018

 

 

 

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

$

12,036,477

 

 

$

152,795

 

 

5.04

%

 

$

11,911,658

 

 

$

158,115

 

 

5.27

%

 

$

11,935,109

 

 

$

156,606

 

 

5.21

%

Securities available for sale

1,755,887

 

 

10,737

 

 

2.43

%

 

1,798,239

 

 

11,373

 

 

2.51

%

 

1,835,218

 

 

12,385

 

 

2.68

%

FHLB stock and other investments

463,615

 

 

2,241

 

 

1.92

%

 

482,952

 

 

2,929

 

 

2.41

%

 

431,901

 

 

3,035

 

 

2.79

%

Total interest earning assets

$

14,255,979

 

 

$

165,773

 

 

4.61

%

 

$

14,192,849

 

 

$

172,417

 

 

4.82

%

 

$

14,202,228

 

 

$

172,026

 

 

4.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

3,682,300

 

 

$

14,924

 

 

1.61

%

 

$

3,450,749

 

 

$

15,802

 

 

1.82

%

 

$

3,127,598

 

 

$

12,425

 

 

1.58

%

Savings

265,008

 

 

748

 

 

1.12

%

 

252,780

 

 

675

 

 

1.06

%

 

225,746

 

 

537

 

 

0.94

%

Time deposits

5,148,092

 

 

29,756

 

 

2.29

%

 

5,368,753

 

 

32,580

 

 

2.41

%

 

5,626,355

 

 

29,515

 

 

2.08

%

Total interest bearing deposits

9,095,400

 

 

45,428

 

 

1.98

%

 

9,072,282

 

 

49,057

 

 

2.15

%

 

8,979,699

 

 

42,477

 

 

1.88

%

FHLB advances & fed funds purchased

608,052

 

 

2,921

 

 

1.91

%

 

632,500

 

 

3,112

 

 

1.95

%

 

824,995

 

 

3,674

 

 

1.77

%

Convertible notes, net

198,669

 

 

2,334

 

 

4.60

%

 

197,410

 

 

2,322

 

 

4.60

%

 

193,749

 

 

2,299

 

 

4.64

%

Subordinated debentures

98,972

 

 

1,582

 

 

6.25

%

 

98,690

 

 

1,668

 

 

6.61

%

 

97,856

 

 

1,683

 

 

6.73

%

Total interest bearing liabilities

10,001,093

 

 

$

52,265

 

 

2.07

%

 

10,000,882

 

 

$

56,159

 

 

2.23

%

 

10,096,299

 

 

$

50,133

 

 

1.97

%

Noninterest bearing demand deposits

2,999,048

 

 

 

 

 

 

2,958,233

 

 

 

 

 

 

3,018,672

 

 

 

 

 

Total funding liabilities/cost of funds

$

13,000,141

 

 

 

 

1.60

%

 

$

12,959,115

 

 

 

 

1.72

%

 

$

13,114,971

 

 

 

 

1.52

%

Net interest income/net interest spread

 

 

$

113,508

 

 

2.54

%

 

 

 

$

116,258

 

 

2.59

%

 

 

 

$

121,893

 

 

2.84

%

Net interest margin

 

 

 

 

3.16

%

 

 

 

 

 

3.25

%

 

 

 

 

 

3.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

2,999,048

 

 

$

 

 

%

 

$

2,958,233

 

 

$

 

 

%

 

$

3,018,672

 

 

$

 

 

%

Interest bearing deposits

9,095,400

 

 

45,428

 

 

1.98

%

 

9,072,282

 

 

49,057

 

 

2.15

%

 

8,979,699

 

 

42,477

 

 

1.88

%

Total deposits

$

12,094,448

 

 

$

45,428

 

 

1.49

%

 

$

12,030,515

 

 

$

49,057

 

 

1.62

%

 

$

11,998,371

 

 

$

42,477

 

 

1.40

%

 

Table Page 4

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 
 

 

Twelve Months Ended

 

12/31/2019

 

12/31/2018

 

 

 

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

$

11,998,675

 

 

$

627,673

 

 

5.23

%

 

$

11,547,022

 

 

$

594,103

 

 

5.15

%

Securities available for sale

1,796,412

 

 

46,295

 

 

2.58

%

 

1,772,080

 

 

45,342

 

 

2.56

%

FHLB stock and other investments

453,452

 

 

10,818

 

 

2.39

%

 

487,922

 

 

10,727

 

 

2.20

%

Total interest earning assets

$

14,248,539

 

 

$

684,786

 

 

4.81

%

 

$

13,807,024

 

 

$

650,172

 

 

4.71

%

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand, interest bearing

$

3,319,556

 

 

$

57,731

 

 

1.74

%

 

$

3,276,815

 

 

$

43,252

 

 

1.32

%

Savings

241,968

 

 

2,596

 

 

1.07

%

 

229,608

 

 

1,889

 

 

0.82

%

Time deposits

5,556,983

 

 

129,831

 

 

2.34

%

 

5,107,698

 

 

89,817

 

 

1.76

%

Total interest bearing deposits

9,118,507

 

 

190,158

 

 

2.09

%

 

8,614,121

 

 

134,958

 

 

1.57

%

FHLB advances & fed funds purchased

688,652

 

 

12,031

 

 

1.75

%

 

870,124

 

 

15,127

 

 

1.74

%

Convertible notes, net

196,835

 

 

9,264

 

 

4.64

%

 

123,040

 

 

5,797

 

 

4.65

%

Subordinated debentures

98,551

 

 

6,738

 

 

6.74

%

 

97,455

 

 

6,363

 

 

6.44

%

Total interest bearing liabilities

10,102,545

 

 

$

218,191

 

 

2.16

%

 

9,704,740

 

 

$

162,245

 

 

1.67

%

Noninterest bearing demand deposits

2,948,212

 

 

 

 

 

 

3,014,056

 

 

 

 

 

Total funding liabilities/cost of funds

$

13,050,757

 

 

 

 

1.67

%

 

$

12,718,796

 

 

 

 

1.28

%

Net interest income/net interest spread

 

 

$

466,595

 

 

2.65

%

 

 

 

$

487,927

 

 

3.04

%

Net interest margin

 

 

 

 

3.27

%

 

 

 

 

 

3.53

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

$

2,948,212

 

 

$

 

 

%

 

$

3,014,056

 

 

$

 

 

%

Interest bearing deposits

9,118,507

 

 

190,158

 

 

2.09

%

 

8,614,121

 

 

134,958

 

 

1.57

%

Total deposits

$

12,066,719

 

 

$

190,158

 

 

1.58

%

 

$

11,628,177

 

 

$

134,958

 

 

1.16

%

 

Table Page 5

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

Three Months Ended

 

Twelve Months Ended

AVERAGE BALANCES:

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

 

12/31/2019

 

12/31/2018

 

% change

Loans receivable, including loans held for sale

$

12,036,477

 

 

$

11,911,658

 

 

1

%

 

$

11,935,109

 

 

1

%

 

$

11,998,675

 

 

$

11,547,022

 

 

4

%

Investments

2,219,502

 

 

2,281,191

 

 

(3

)%

 

2,267,119

 

 

(2

)%

 

2,249,864

 

 

2,260,002

 

 

%

Interest earning assets

14,255,979

 

 

14,192,849

 

 

%

 

14,202,228

 

 

%

 

14,248,539

 

 

13,807,024

 

 

3

%

Total assets

15,228,488

 

 

15,154,661

 

 

%

 

15,152,946

 

 

%

 

15,214,412

 

 

14,749,166

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

9,095,400

 

 

9,072,282

 

 

%

 

8,979,699

 

 

1

%

 

9,118,507

 

 

8,614,121

 

 

6

%

Interest bearing liabilities

10,001,093

 

 

10,000,882

 

 

%

 

10,096,299

 

 

(1

)%

 

10,102,545

 

 

9,704,740

 

 

4

%

Noninterest bearing demand deposits

2,999,048

 

 

2,958,233

 

 

1

%

 

3,018,672

 

 

(1

)%

 

2,948,212

 

 

3,014,056

 

 

(2

)%

Stockholders’ equity

2,034,231

 

 

2,010,458

 

 

1

%

 

1,888,053

 

 

8

%

 

1,981,811

 

 

1,910,224

 

 

4

%

Net interest earning assets

4,254,886

 

 

4,191,967

 

 

2

%

 

4,105,929

 

 

4

%

 

4,145,994

 

 

4,102,284

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN PORTFOLIO COMPOSITION:

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

 

 

 

 

 

 

Commercial loans

$

2,719,210

 

 

$

2,643,836

 

 

3

%

 

$

2,324,820

 

 

17

%

 

 

 

 

 

 

Real estate loans

8,664,965

 

 

8,587,943

 

 

1

%

 

8,721,600

 

 

(1

)%

 

 

 

 

 

 

Consumer and other loans

889,090

 

 

870,734

 

 

2

%

 

1,051,486

 

 

(15

)%

 

 

 

 

 

 

Loans outstanding

12,273,265

 

 

12,102,513

 

 

1

%

 

12,097,906

 

 

1

%

 

 

 

 

 

 

Unamortized deferred loan fees - net of costs

2,742

 

 

2,169

 

 

26

%

 

209

 

 

1,212

%

 

 

 

 

 

 

Loans, net of deferred loan fees and costs

12,276,007

 

 

12,104,682

 

 

1

%

 

12,098,115

 

 

1

%

 

 

 

 

 

 

Allowance for loan losses

(94,144

)

 

(93,882

)

 

%

 

(92,557

)

 

(2

)%

 

 

 

 

 

 

Loans receivable, net

$

12,181,863

 

 

$

12,010,800

 

 

1

%

 

$

12,005,558

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE LOANS BY PROPERTY TYPE:

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

 

 

 

 

 

 

Retail buildings

$

2,298,872

 

 

$

2,304,346

 

 

%

 

$

2,379,589

 

 

(3

)%

 

 

 

 

 

 

Hotels/motels

1,709,189

 

 

1,664,311

 

 

3

%

 

1,694,696

 

 

1

%

 

 

 

 

 

 

Gas stations/car washes

844,081

 

 

911,494

 

 

(7

)%

 

980,619

 

 

(14

)%

 

 

 

 

 

 

Mixed-use facilities

785,882

 

 

743,428

 

 

6

%

 

698,779

 

 

12

%

 

 

 

 

 

 

Warehouses

1,030,876

 

 

949,336

 

 

9

%

 

966,413

 

 

7

%

 

 

 

 

 

 

Multifamily

465,397

 

 

473,640

 

 

(2

)%

 

453,555

 

 

3

%

 

 

 

 

 

 

Other

1,530,668

 

 

1,541,388

 

 

(1

)%

 

1,547,949

 

 

(1

)%

 

 

 

 

 

 

Total

$

8,664,965

 

 

$

8,587,943

 

 

1

%

 

$

8,721,600

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION:

12/31/2019

 

9/30/2019

 

% change

 

12/31/2018

 

% change

 

 

 

 

 

 

Noninterest bearing demand deposits

$

3,108,687

 

 

$

3,033,371

 

 

2

%

 

$

3,022,633

 

 

3

%

 

 

 

 

 

 

Money market and other

3,985,556

 

 

3,752,274

 

 

6

%

 

3,036,653

 

 

31

%

 

 

 

 

 

 

Saving deposits

274,151

 

 

259,454

 

 

6

%

 

225,746

 

 

21

%

 

 

 

 

 

 

Time deposits

5,158,970

 

 

5,189,651

 

 

(1

)%

 

5,870,624

 

 

(12

)%

 

 

 

 

 

 

Total deposit balances

$

12,527,364

 

 

$

12,234,750

 

 

2

%

 

$

12,155,656

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT COMPOSITION (%):

12/31/2019

 

9/30/2019

 

 

 

12/31/2018

 

 

 

 

 

 

 

 

Noninterest bearing demand deposits

24.8

%

 

24.8

%

 

 

 

24.9

%

 

 

 

 

 

 

 

 

Money market and other

31.8

%

 

30.7

%

 

 

 

25.0

%

 

 

 

 

 

 

 

 

Saving deposits

2.2

%

 

2.1

%

 

 

 

1.8

%

 

 

 

 

 

 

 

 

Time deposits

41.2

%

 

42.4

%

 

 

 

48.3

%

 

 

 

 

 

 

 

 

Total deposit balances

100.0

%

 

100.0

%

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

Table Page 6

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except per share data)

 

CAPITAL RATIOS:

12/31/2019

 

9/30/2019

 

12/31/2018

 

Total stockholders’ equity

$

2,036,011

 

 

$

2,031,284

 

 

$

1,903,211

 

 

Common equity tier 1 ratio

11.76

%

 

11.89

%

 

11.44

%

 

Tier 1 risk-based capital ratio

12.51

%

 

12.65

%

 

12.21

%

 

Total risk-based capital ratio

13.23

%

 

13.38

%

 

12.94

%

 

Tier 1 leverage ratio

11.22

%

 

11.18

%

 

10.55

%

 

Total risk weighted assets

$

13,208,299

 

 

$

12,951,936

 

 

$

12,749,403

 

 

Book value per common share

$

16.19

 

 

$

16.03

 

 

$

15.03

 

 

Tangible common equity to tangible assets 1

10.27

%

 

10.43

%

 

9.61

%

 

Tangible common equity per share 1

$

12.40

 

 

$

12.27

 

 

$

11.25

 

 

 

 

 

 

 

 

 

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.

Reconciliation of GAAP financial measures to non-GAAP financial measures:

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2019

 

9/30/2019

 

12/31/2018

 

12/31/2019

 

12/31/2018

RETURN ON AVERAGE TANGIBLE COMMON EQUITY

 

 

 

 

 

 

 

 

 

Average stockholders’ equity

$

2,034,231

 

 

$

2,010,458

 

 

$

1,888,053

 

 

$

1,981,811

 

 

$

1,910,224

 

Less goodwill and core deposit intangible assets, net

(476,596

)

 

(477,159

)

 

(478,897

)

 

(477,444

)

 

(479,811

)

Average tangible common equity

$

1,557,635

 

 

$

1,533,299

 

 

$

1,409,156

 

 

$

1,504,367

 

 

$

1,430,413

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

43,009

 

 

$

42,592

 

 

$

44,449

 

 

$

171,040

 

 

$

189,589

 

Return on average tangible common equity

11.04

%

 

11.11

%

 

12.62

%

 

11.37

%

 

13.25

%

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY

12/31/2019

 

9/30/2019

 

12/31/2018

 

 

 

 

Total stockholders’ equity

$

2,036,011

 

 

$

2,031,284

 

 

$

1,903,211

 

 

 

 

 

Less goodwill and core deposit intangible assets, net

(476,283

)

 

(476,840

)

 

(478,511

)

 

 

 

 

Tangible common equity

$

1,559,728

 

 

$

1,554,444

 

 

$

1,424,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

15,667,440

 

 

$

15,379,878

 

 

$

15,305,952

 

 

 

 

 

Less goodwill and core deposit intangible assets, net

(476,283

)

 

(476,840

)

 

(478,511

)

 

 

 

 

Tangible assets

$

15,191,157

 

 

$

14,903,038

 

 

$

14,827,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

125,756,543

 

 

126,697,925

 

 

126,639,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

10.27

%

 

10.43

%

 

9.61

%

 

 

 

 

Tangible common equity per share

$

12.40

 

 

$

12.27

 

 

$

11.25

 

 

 

 

 

 

Table Page 7

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except per share data)

 

 

Three Months Ended

 

Twelve Months Ended

ALLOWANCE FOR LOAN LOSSES CHANGE:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

12/31/2019

 

12/31/2018

Balance at beginning of period

$

93,882

 

 

$

94,066

 

 

$

94,217

 

 

$

92,557

 

 

$

90,629

 

 

$

92,557

 

 

$

84,541

 

Provision for loan losses

1,000

 

 

2,100

 

 

1,200

 

 

3,000

 

 

2,800

 

 

7,300

 

 

14,900

 

Recoveries

939

 

 

780

 

 

725

 

 

1,292

 

 

805

 

 

3,736

 

 

3,991

 

Charge offs

(1,677

)

 

(2,602

)

 

(2,076

)

 

(1,754

)

 

(1,677

)

 

(8,109

)

 

(10,875

)

PCI allowance adjustment

 

 

(462

)

 

 

 

(878

)

 

 

 

(1,340

)

 

 

Balance at end of period

$

94,144

 

 

$

93,882

 

 

$

94,066

 

 

$

94,217

 

 

$

92,557

 

 

$

94,144

 

 

$

92,557

 

Net charge offs/average loans receivable (annualized)

0.02

%

 

0.06

%

 

0.05

%

 

0.02

%

 

0.03

%

 

0.04

%

 

0.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR LOAN LOSSES COMPOSITION:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

 

 

 

Legacy loans 1

$

82,898

 

 

$

82,267

 

 

$

81,606

 

 

$

80,953

 

 

$

78,259

 

 

 

 

 

Purchased non-impaired loans 2

3,168

 

 

3,239

 

 

3,376

 

 

2,948

 

 

2,135

 

 

 

 

 

Purchased credit-impaired loans 2

8,078

 

 

8,376

 

 

9,084

 

 

10,316

 

 

12,163

 

 

 

 

 

Total allowance for loan losses

$

94,144

 

 

$

93,882

 

 

$

94,066

 

 

$

94,217

 

 

$

92,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 allowance for loan losses reflects provisions for credit deterioration since the acquisition date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

NET CHARGED OFF (RECOVERED) LOANS BY TYPE:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

12/31/2019

 

12/31/2018

Real estate loans

$

203

 

 

$

951

 

 

$

(388

)

 

$

(1,067

)

 

$

123

 

 

$

(301

)

 

$

5,700

 

Commercial loans

245

 

 

596

 

 

1,399

 

 

1,250

 

 

436

 

 

3,490

 

 

8

 

Consumer loans

290

 

 

275

 

 

340

 

 

279

 

 

313

 

 

1,184

 

 

1,176

 

Total net charge offs

$

738

 

 

$

1,822

 

 

$

1,351

 

 

$

462

 

 

$

872

 

 

$

4,373

 

 

$

6,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table Page 8

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

NONPERFORMING ASSETS:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Loans on nonaccrual status 3

$

54,785

 

 

$

42,235

 

 

$

64,934

 

 

$

86,637

 

 

$

53,286

 

Delinquent loans 90 days or more on accrual status 4

7,547

 

 

398

 

 

353

 

 

387

 

 

1,529

 

Accruing troubled debt restructured loans

35,709

 

 

34,717

 

 

40,731

 

 

45,204

 

 

50,410

 

Total nonperforming loans

98,041

 

 

77,350

 

 

106,018

 

 

132,228

 

 

105,225

 

Other real estate owned

24,091

 

 

19,374

 

 

5,644

 

 

6,258

 

 

7,754

 

Total nonperforming assets

$

122,132

 

 

$

96,724

 

 

$

111,662

 

 

$

138,486

 

 

$

112,979

 

Nonperforming assets/total assets

0.78

%

 

0.63

%

 

0.73

%

 

0.90

%

 

0.74

%

Nonperforming assets/loans receivable & OREO

0.99

%

 

0.80

%

 

0.93

%

 

1.15

%

 

0.93

%

Nonperforming assets/total capital

6.00

%

 

4.76

%

 

5.60

%

 

7.12

%

 

5.94

%

Nonperforming loans/loans receivable

0.80

%

 

0.64

%

 

0.89

%

 

1.10

%

 

0.87

%

Nonaccrual loans/loans receivable

0.45

%

 

0.35

%

 

0.54

%

 

0.72

%

 

0.44

%

Allowance for loan losses/loans receivable

0.77

%

 

0.78

%

 

0.79

%

 

0.78

%

 

0.77

%

Allowance for loan losses/nonaccrual loans

171.84

%

 

222.28

%

 

144.86

%

 

108.75

%

 

173.70

%

Allowance for loan losses/nonperforming loans

96.03

%

 

121.37

%

 

88.73

%

 

71.25

%

 

87.96

%

Allowance for loan losses/nonperforming assets

77.08

%

 

97.06

%

 

84.24

%

 

68.03

%

 

81.92

%

3

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $28.1 million, $37.3 million, $32.1 million, $30.5 million, and $29.2 million, at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.

4

Excludes Acquired Credit Impaired Loans totaling $13.2 million, $15.5 million, $17.6 million, $18.4 million, and $14.1 million, at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.

NONACCRUAL LOANS BY TYPE:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Real estate loans

$

40,935

 

 

$

27,920

 

 

$

42,921

 

 

$

58,030

 

 

$

33,719

 

Commercial loans

10,893

 

 

11,242

 

 

18,997

 

 

27,042

 

 

18,128

 

Consumer loans

2,957

 

 

3,073

 

 

3,016

 

 

1,565

 

 

1,439

 

Total nonaccrual loans

$

54,785

 

 

$

42,235

 

 

$

64,934

 

 

$

86,637

 

 

$

53,286

 

 

 

 

 

 

 

 

 

 

 

BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Retail buildings

$

4,215

 

 

$

3,221

 

 

$

2,919

 

 

$

2,965

 

 

$

3,085

 

Gas stations/car washes

 

 

233

 

 

241

 

 

255

 

 

267

 

Mixed-use facilities

3,175

 

 

3,200

 

 

3,223

 

 

3,254

 

 

5,956

 

Warehouses

10,381

 

 

10,449

 

 

11,246

 

 

11,315

 

 

7,188

 

Other 5

17,938

 

 

17,614

 

 

23,102

 

 

27,415

 

 

33,914

 

Total

$

35,709

 

 

$

34,717

 

 

$

40,731

 

 

$

45,204

 

 

$

50,410

 

 

 

 

 

 

 

 

 

 

 

5 Includes commercial business and other loans

 

 

 

 

 

 

 

 

 

 

Table Page 9

 

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Legacy

 

 

 

 

 

 

 

 

 

30 - 59 days

$

11,975

 

 

$

14,229

 

 

$

16,405

 

 

$

30,971

 

 

$

23,846

 

60 - 89 days

4,447

 

 

4,164

 

 

718

 

 

1,227

 

 

218

 

Total delinquent loans less than 90 days past due - legacy

$

16,422

 

 

$

18,393

 

 

$

17,123

 

 

$

32,198

 

 

$

24,064

 

 

 

 

 

 

 

 

 

 

 

Acquired

 

 

 

 

 

 

 

 

 

30 - 59 days

$

2,458

 

 

$

11,052

 

 

$

1,508

 

 

$

2,717

 

 

$

1,094

 

60 - 89 days

265

 

 

371

 

 

577

 

 

 

 

406

 

Total delinquent loans less than 90 days past due - acquired

$

2,723

 

 

$

11,423

 

 

$

2,085

 

 

$

2,717

 

 

$

1,500

 

 

 

 

 

 

 

 

 

 

 

Total delinquent loans less than 90 days past due

$

19,145

 

 

$

29,816

 

 

$

19,208

 

 

$

34,915

 

 

$

25,564

 

 

 

 

 

 

 

 

 

 

 

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

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Legacy

 

 

 

 

 

 

 

 

 

Real estate loans

$

6,224

 

 

$

9,707

 

 

$

9,580

 

 

$

12,324

 

 

$

2,352

 

Commercial loans

415

 

 

2,004

 

 

1,755

 

 

2,711

 

 

5,159

 

Consumer loans

9,783

 

 

6,682

 

 

5,788

 

 

17,163

 

 

16,553

 

Total delinquent loans less than 90 days past due - legacy

$

16,422

 

 

$

18,393

 

 

$

17,123

 

 

$

32,198

 

 

$

24,064

 

 

 

 

 

 

 

 

 

 

 

Acquired

 

 

 

 

 

 

 

 

 

Real estate loans

$

1,465

 

 

$

10,865

 

 

$

214

 

 

$

1,371

 

 

$

905

 

Commercial loans

277

 

 

278

 

 

77

 

 

374

 

 

595

 

Consumer loans

981

 

 

280

 

 

1,794

 

 

972

 

 

 

Total delinquent loans less than 90 days past due - acquired

$

2,723

 

 

$

11,423

 

 

$

2,085

 

 

$

2,717

 

 

$

1,500

 

 

 

 

 

 

 

 

 

 

 

Total delinquent loans less than 90 days past due

$

19,145

 

 

$

29,816

 

 

$

19,208

 

 

$

34,915

 

 

$

25,564

 

 

 

 

 

 

 

 

 

 

 

CRITICIZED LOANS:

12/31/2019

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

Legacy

 

 

 

 

 

 

 

 

 

Special mention

$

120,620

 

 

$

101,892

 

 

$

147,050

 

 

$

154,671

 

 

$

121,622

 

Substandard

164,131

 

 

184,518

 

 

202,676

 

 

223,511

 

 

193,494

 

Doubtful / Loss

13

 

 

17

 

 

 

 

351

 

 

 

Total criticized loans - legacy

$

284,764

 

 

$

286,427

 

 

$

349,726

 

 

$

378,533

 

 

$

315,116

 

 

 

 

 

 

 

 

 

 

 

Acquired

 

 

 

 

 

 

 

 

 

Special mention

$

20,832

 

 

$

37,956

 

 

$

39,435

 

 

$

50,702

 

 

$

41,467

 

Substandard

95,147

 

 

84,087

 

 

121,165

 

 

129,122

 

 

124,421

 

Doubtful / Loss

 

 

 

 

1

 

 

218

 

 

412

 

Total criticized loans - acquired

$

115,979

 

 

$

122,043

 

 

$

160,601

 

 

$

180,042

 

 

$

166,300

 

 

 

 

 

 

 

 

 

 

 

Total criticized loans

$

400,743

 

 

$

408,470

 

 

$

510,327

 

 

$

558,575

 

 

$

481,416

 

 

Table Page 10

 

Contacts

Alex Ko
EVP & Chief Financial Officer
213-427-6560
alex.ko@bankofhope.com

Angie Yang
SVP, Director of Investor Relations & Corporate Communications
213-251-2219
angie.yang@bankofhope.com

Contacts

Alex Ko
EVP & Chief Financial Officer
213-427-6560
alex.ko@bankofhope.com

Angie Yang
SVP, Director of Investor Relations & Corporate Communications
213-251-2219
angie.yang@bankofhope.com