News Release
HOPE BANCORP REPORTS 2020 FOURTH QUARTER FINANCIAL RESULTS
LOS ANGELES - January 26, 2021 - 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, 2020.
For the three months ended December 31, 2020, net income totaled $28.3 million, or $0.23 per diluted common share. This compares with net income of $30.5 million, or $0.25 per diluted common share, in the third quarter of 2020 and $43.0 million, or $0.34 per diluted common share, in the fourth quarter of 2019. For the year ended December 31, 2020, net income totaled $111.5 million, or $0.90 per diluted common share, compared with net income of $171.0 million, or $1.35 per diluted common share for the year ended December 31, 2019.
“Fourth quarter results represent a continuation of the many positive trends we have delivered in 2020 and underscore how well we have been able to manage through a year that has been plagued by a global pandemic,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “Notwithstanding the challenging business environment, we recorded very strong loan originations of $844 million during the quarter. We are also extremely pleased with the success of our expanded commercial lending capabilities, with commercial loans accounting for 52% of new loan production during the fourth quarter of 2020. New commercial customer relationships that we have won during the year have been valuable contributors to our deposit achievements as well, with total deposits increasing 2% quarter-over-quarter and noninterest bearing deposits expanding to a record 34% of total deposits at the end of 2020. The improved mix in our deposit composition and reductions in deposit costs led to a second consecutive quarter of margin expansion with our net interest margin increasing 11 basis points quarter-over-quarter to 3.02% for the fourth quarter. We also continued to maintain a tight grip on expenses with our efficiency ratio improving to 53.77% for the 2020 fourth quarter.
“With the highly effective vaccines in distribution and the support of additional government stimulus programs, it appears the groundwork for a faster economic recovery is being paved, and we believe we are well positioned with a stronger allowance coverage ratio that we have prudently built to date,” said Kim. “2020 required more commitment and dedication from our employees than any period in the history of our Bank, and I am extremely proud of how we, as a team, adapted and succeeded this last year. As a result of all of the challenges we have successfully endured this year, I have great conviction that we are a stronger franchise today than ever before, and we move forward in 2021 with cautious optimism that we will indeed get through this unprecedented period of time together and deliver increased value to all the stakeholders of Bank of Hope.”
Q4 2020 Highlights
•Net interest income before provision for credit losses increased 3% quarter-over-quarter to $120.8 million, largely reflecting reduced interest expense due to lower cost of deposits.
•Net interest margin expanded 11 basis points quarter-over-quarter.
•Noninterest bearing demand deposits increased 7% quarter-over-quarter and accounted for 34% of total deposits at year-end.
•Total cost of deposits decreased 16 basis points quarter-over-quarter benefiting from an on going positive mix-shift to lower-cost core deposits.
•Loan originations totaled $844.2 million and contributed to a 3.4% increase in loans receivable quarter-over-quarter, or 13.5% annualized.
•Noninterest expenses continued to be well managed with efficiency ratio improving to 53.77% from 54.31% quarter-over-quarter and noninterest expense to average assets improving to 1.69% from 1.73%
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended |
| 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
| Net income | $ | 28,319 | | | $ | 30,490 | | | $ | 43,009 | |
| Diluted earnings per share | $ | 0.23 | | | $ | 0.25 | | | $ | 0.34 | |
| Net interest income before provision for loan losses | $ | 120,756 | | | $ | 117,637 | | | $ | 113,508 | |
| Net interest margin | | 3.02 | % | | | 2.91 | % | | | 3.16 | % |
| Noninterest income | $ | 11,415 | | | $ | 17,513 | | | $ | 12,979 | |
| Noninterest expense | $ | 71,063 | | | $ | 73,406 | | | $ | 70,429 | |
| Net loans receivable | $ | 13,356,472 | | | $ | 12,940,376 | | | $ | 12,181,863 | |
| Deposits | $ | 14,333,912 | | | $ | 14,008,356 | | | $ | 12,527,364 | |
| Total cost of deposits | | 0.48 | % | | | 0.64 | % | | | 1.49 | % |
Nonaccrual loans (1) (2) | $ | 85,238 | | | $ | 69,205 | | | $ | 54,785 | |
Nonperforming loans to loans receivable (1) (2) | | 0.91 | % | | | 0.81 | % | | | 0.80 | % |
ACL to loans receivable (3) | | 1.52 | % | | | 1.37 | % | | | 0.77 | % |
ACL to nonaccrual loans (1) (2)(3) | | 242.55 | % | | | 259.88 | % | | | 171.84 | % |
ACL to nonperforming assets (1) (2)(3) | | 144.24 | % | | | 144.36 | % | | | 77.08 | % |
| Provision for credit losses | $ | 27,500 | | | $ | 22,000 | | | $ | 1,000 | |
| Net charge offs | $ | 608 | | | $ | 3,922 | | | $ | 738 | |
| Return on average assets (“ROA”) | | 0.67 | % | | | 0.72 | % | | | 1.13 | % |
| Return on average equity (“ROE”) | | 5.54 | % | | | 5.98 | % | | | 8.46 | % |
Return on average tangible common equity (“ROTCE”) (4) | | 7.21 | % | | | 7.80 | % | | | 11.04 | % |
| Noninterest expense / average assets | | 1.69 | % | | | 1.73 | % | | | 1.85 | % |
| Efficiency ratio | | 53.77 | % | | | 54.31 | % | | | 55.68 | % |
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation
(2) Excludes purchased credit-impaired loans for December 31, 2019
(3) Allowance for credit losses for current-year periods were calculated under the CECL methodology while allowance for loan losses for the
prior-year period was calculated under the incurred loss methodology.
(4) 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 10.
Operating Results for the 2020 Fourth Quarter
Net interest income before provision for credit losses for the 2020 fourth quarter increased 3% to $120.8 million from $117.6 million in the 2020 third quarter and increased 6% from $113.5 million in the year-ago fourth quarter. As with the preceding third quarter, the Company attributed the increases primarily to meaningful reductions in interest expense due to lower cost of deposits and lower average FHLB borrowing balances.
The net interest margin for the 2020 fourth quarter increased 11 basis points to 3.02% from 2.91% in the preceding third quarter, reflecting the benefits of lower deposit costs and reductions in cash on the Company’s balance sheet, partially offset by lower weighted average yield on loans. The net interest margin in the prior-year fourth quarter was 3.16%.
The weighted average yield on loans for the 2020 fourth quarter was 4.03%, compared with 4.20% in the preceding third quarter, largely reflecting a significant increase in the lower-yielding warehouse line balances during the quarter and lower accretion income. The weighted average yield on loans for the 2019 fourth quarter was 5.04%.
The weighted average cost of deposits for the 2020 fourth quarter decreased for the fifth consecutive quarter to 0.48%, representing a 16 basis point decrease from 0.64% for the 2020 third quarter and a 101 basis point decrease from 1.49% for the 2019 fourth quarter. The Company attributed the significant improvements in the weighted average cost of deposits to a continuing shift in its deposit mix to lower-cost core deposits and the ongoing downward repricing of time deposits. Noninterest bearing demand deposits increased 7% quarter-over-quarter and increased 55% year-over-year and accounted for 34%, 32% and 25% of total deposits at December 31, 2020, September 30, 2020 and December 31, 2019, respectively.
Noninterest income totaled $11.4 million for the 2020 fourth quarter, compared with $17.5 million in the preceding third quarter. The largest factor contributing to the decrease was a $7.5 million net gain on the sale of $161 million of available-for-sale investment securities in the preceding third quarter, compared with zero in the 2020 fourth quarter. In addition, net gains on sales of other loans decreased to $1.6 million for the 2020 fourth quarter from $2.9 million for the preceding third quarter. These decreases were partially offset by an increase in other income and fees in the 2020 fourth quarter, reflecting higher levels of swap fee income and a gain in the fair value change in derivatives. Noninterest income in the 2019 fourth quarter totaled $13.0 million.
Noninterest expense for the 2020 fourth quarter decreased to $71.1 million from $73.4 million for the preceding third quarter. Noninterest expense for the 2020 fourth quarter included $2.4 million in branch restructuring costs while the 2020 third quarter included a $3.6 million FHLB prepayment penalty. For the 2019 fourth quarter, noninterest expense totaled $70.4 million.
Salaries and employee benefits expense totaled $40.9 million, $40.7 million and $39.8 million for the 2020 fourth quarter,
2020 third quarter and 2019 fourth quarter.
Noninterest expense as a percentage of average assets improved to 1.69% for the 2020 fourth quarter from 1.73% for the 2020 third quarter and from 1.85% for the 2019 fourth quarter.
The effective tax rate for the 2020 fourth quarter was 15.74%, compared with 23.3% for the preceding third quarter and
21.9% in the year-ago fourth quarter. The decrease in the effective tax rate for 2020 fourth quarter reflects lower tax provision based on adjustments to the applicable state apportionment factors.
Balance Sheet Summary
New loan originations funded during the 2020 fourth quarter totaled $844.2 million and included SBA loan production of $25.5 million and residential mortgage loan originations of $62.5 million. In addition, two new warehouse mortgage lines of credit were booked during the 2020 fourth quarter, of which $106.8 million was funded as of December 31, 2020. For the preceding 2020 third quarter, new loan originations funded totaled $782.4 million, including SBA loan originations of $33.3 million, residential mortgage loan originations of $102.3 million and four new warehouse mortgages lines of credit, of which $301 million was funded as of September 30, 2020. In the year-ago fourth quarter, new loan originations funded totaled $847.6 million, including SBA loan production of $61.8 million and residential mortgage loan originations of $64.2 million. There were no new warehouse mortgage lines of credit established in the 2019 fourth quarter.
At December 31, 2020, loans receivable increased 3.4% to $13.56 billion from $13.12 billion at September 30, 2020 and increased 10.5% from $12.28 billion at December 31, 2019.
Total deposits at December 31, 2020 increased 2.3% to $14.33 billion from $14.01 billion at September 30, 2020 and increased 14.4% from $12.53 billion at December 31, 2019.
Following is the deposit composition as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change |
| Noninterest bearing demand deposits | $ | 4,814,254 | | | $ | 4,488,529 | | | 7 | % | | $ | 3,108,687 | | | 55 | % |
| Money market and other | 5,232,413 | | | 4,763,893 | | | 10 | % | | 3,985,556 | | | 31 | % |
| Saving deposits | 300,770 | | | 308,943 | | | (3) | % | | 274,151 | | | 10 | % |
| Time deposits | 3,986,475 | | | 4,446,991 | | | (10) | % | | 5,158,970 | | | (23) | % |
| Total deposit balances | $ | 14,333,912 | | | $ | 14,008,356 | | | 2 | % | | $ | 12,527,364 | | | 14 | % |
Following is the deposit composition as a percentage of total deposits as of December 31, 2020, September 30, 2020 and December 31, 2019 and a breakdown of cost of deposits for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposit Breakdown | | Cost of Deposits |
| (dollars in thousands) (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | Q4 2020 | | Q3 2020 | | Q4 2019 |
| Noninterest bearing demand deposits | 33.6 | % | | 32.1 | % | | 24.8 | % | | — | % | | — | % | | — | % |
| Money market and other | 36.5 | % | | 34.0 | % | | 31.8 | % | | 0.45 | % | | 0.53 | % | | 1.61 | % |
| Saving deposits | 2.1 | % | | 2.2 | % | | 2.2 | % | | 1.17 | % | | 1.19 | % | | 1.12 | % |
| Time deposits | 27.8 | % | | 31.7 | % | | 41.2 | % | | 0.98 | % | | 1.30 | % | | 2.29 | % |
| Total deposit balances | 100.0 | % | | 100.0 | % | | 100.0 | % | | 0.48 | % | | 0.64 | % | | 1.49 | % |
Allowance for Credit Losses
The 2020 fourth quarter provision for credit losses under the CECL methodology was $27.5 million, compared with $22.0 million for the preceding third quarter. This compares with a provision for loan losses under the prior incurred loss methodology of $1.0 million for the 2019 fourth quarter.
The provision for credit losses for the 2020 fourth quarter generally utilizes the most recent available Moody’s Analytics Baseline scenario, as well as more specific information, including updated CRE market data which reflects deterioration primarily in the hospitality industry, updated qualitative factors in the Company’s ACL methodology, and downgrades following the receipt of updated financial statements of the borrowers. As such, the buildup of the reserves in the 2020 fourth quarter was largely driven by additional allocations made to the hotel and motel portfolio as the Company continued to assess the full impact of the pandemic on this sector of its portfolio.
Following is the Allowance for Credit Losses as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
| Allowance for credit losses | $ | 206,741 | | $ | 179,849 | | $ | 94,144 |
| Allowance for credit loss/loans receivable | | 1.52 | % | | | 1.37 | % | | | 0.77 | % |
| Allowance for credit losses/nonperforming loans | | 167.80 | % | | | 169.40 | % | | | 96.03 | % |
Credit Quality
Following are the components of nonperforming assets as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
Loans on nonaccrual status (1) | $ | 85,238 | | $ | 69,205 | | $ | 54,785 |
Delinquent loans 90 days or more on accrual status (2) | | 614 | | | 1,537 | | | 7,547 |
| Accruing troubled debt restructured loans | | 37,354 | | | 35,429 | | | 35,709 |
| Total nonperforming loans | | 123,206 | | | 106,171 | | | 98,041 |
| Other real estate owned | | 20,121 | | | 18,410 | | | 24,091 |
| Total nonperforming assets | $ | 143,327 | | $ | 124,581 | | $ | 122,132 |
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.5 million, $26.2 million, and $28.1 million, at December 31, 2020, September 30, 2020, and December 31, 2019, respectively.
(2) Excludes PCI loans totaling $13.2 million at December 31, 2019.
Following are the components of criticized loan balances as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in thousands) (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
Special Mention (3) | $ | 184,941 | | $ | 153,388 | | $ | 141,452 |
Classified (3) | | 366,557 | | | 318,542 | | | 259,291 |
| Criticized | $ | 551,498 | | $ | 471,930 | | $ | 400,743 |
(3) Balances include purchased loans which were marked to fair value on the date of acquisition.
During the 2020 fourth quarter, net charge offs totaled $608,000, or 0.02% of average loans receivable on an annualized basis. This compares with net charge offs of $3.9 million, or 0.12% of average loans receivable on an annualized
basis for the 2020 third quarter and net charge offs for the 2019 fourth quarter of $738,000, or 0.02% of average loans
receivable on an annualized basis.
Capital
At December 31, 2020, the Company and the Bank continued to exceed all regulatory capital requirements to be
classified as a “well-capitalized” financial institution. Following are capital ratios for the Company as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | |
| (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | Minimum Guideline for “Well-Capitalized” Bank |
| Common Equity Tier 1 Capital | 10.94% | | 11.36% | | 11.76% | | 6.50% |
| Tier 1 Leverage Ratio | 10.22% | | 10.02% | | 11.22% | | 5.00% |
| Tier 1 Risk-Based Ratio | 11.64% | | 12.09% | | 12.51% | | 8.00% |
| Total Risk-Based Ratio | 12.87% | | 13.19% | | 13.23% | | 10.00% |
Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of December 31, 2020, September 30, 2020 and December 31, 2019:
| | | | | | | | | | | | | | | | | |
| (unaudited) | 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
Tangible common equity per share (1) | $12.81 | | $12.70 | | $12.40 |
Tangible common equity to tangible assets (2) | 9.50% | | 9.63% | | 10.27% |
(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 10.
(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 10.
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.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Wednesday, January 27, 2021 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter ended December 31, 2020 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 February 3, 2021, replay access code 10150976.
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 $17.1 billion in total assets as of December 31, 2020. 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 credit losses, regulatory risks associated with current and future regulations, and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K 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.
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 |
# # #
(tables follow)
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | | | |
| Cash and due from banks | $ | 350,579 | | | $ | 629,133 | | | (44) | % | | $ | 698,567 | | | (50) | % | | | | |
| Securities available for sale, at fair value | 2,285,611 | | | 2,060,991 | | | 11 | % | | 1,715,987 | | | 33 | % | | | | |
| Federal Home Loan Bank (“FHLB”) stock and other investments | 105,591 | | | 97,305 | | | 9 | % | | 97,659 | | | 8 | % | | | | |
| Loans held for sale, at the lower of cost or fair value | 17,743 | | | 9,170 | | | 93 | % | | 54,271 | | | (67) | % | | | | |
| Loans receivable | 13,563,213 | | | 13,120,225 | | | 3 | % | | 12,276,007 | | | 10 | % | | | | |
| Allowance for credit losses | (206,741) | | | (179,849) | | | (15) | % | | (94,144) | | | (120) | % | | | | |
| Net loans receivable | 13,356,472 | | | 12,940,376 | | | 3 | % | | 12,181,863 | | | 10 | % | | | | |
| Accrued interest receivable | 59,430 | | | 57,989 | | | 2 | % | | 30,772 | | | 93 | % | | | | |
| Premises and equipment, net | 48,409 | | | 49,552 | | | (2) | % | | 52,012 | | | (7) | % | | | | |
| Bank owned life insurance | 76,765 | | | 77,388 | | | (1) | % | | 76,339 | | | 1 | % | | | | |
| Goodwill | 464,450 | | | 464,450 | | | — | % | | 464,450 | | | — | % | | | | |
| Servicing assets | 12,692 | | | 13,718 | | | (7) | % | | 16,417 | | | (23) | % | | | | |
| Other intangible assets, net | 9,708 | | | 10,239 | | | (5) | % | | 11,833 | | | (18) | % | | | | |
| Other assets | 319,214 | | | 323,456 | | | (1) | % | | 267,270 | | | 19 | % | | | | |
| Total assets | $ | 17,106,664 | | | $ | 16,733,767 | | | 2 | % | | $ | 15,667,440 | | | 9 | % | | | | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | |
| Deposits | $ | 14,333,912 | | | $ | 14,008,356 | | | 2 | % | | $ | 12,527,364 | | | 14 | % | | | | |
| FHLB advances | 250,000 | | | 200,000 | | | 25 | % | | 625,000 | | | (60) | % | | | | |
| Convertible notes, net | 204,565 | | | 203,270 | | | 1 | % | | 199,458 | | | 3 | % | | | | |
| Subordinated debentures | 104,178 | | | 103,889 | | | — | % | | 103,035 | | | 1 | % | | | | |
| Accrued interest payable | 14,706 | | | 21,991 | | | (33) | % | | 33,810 | | | (57) | % | | | | |
| Other liabilities | 145,558 | | | 155,700 | | | (7) | % | | 142,762 | | | 2 | % | | | | |
| Total liabilities | 15,052,919 | | | 14,693,206 | | | 2 | % | | 13,631,429 | | | 10 | % | | | | |
| | | | | | | | | | | | | |
| Stockholders’ Equity | | | | | | | | | | | | | |
| Common stock, $0.001 par value | 136 | | | 136 | | | — | % | | 136 | | | — | % | | | | |
| Capital surplus | 1,434,916 | | | 1,432,773 | | | — | % | | 1,428,066 | | | — | % | | | | |
| Retained earnings | 785,940 | | | 774,970 | | | 1 | % | | 762,480 | | | 3 | % | | | | |
| Treasury stock, at cost | (200,000) | | | (200,000) | | | — | % | | (163,820) | | | (22) | % | | | | |
| Accumulated other comprehensive gain, net | 32,753 | | | 32,682 | | | — | % | | 9,149 | | | 258 | % | | | | |
| Total stockholders’ equity | 2,053,745 | | | 2,040,561 | | | 1 | % | | 2,036,011 | | | 1 | % | | | | |
| Total liabilities and stockholders’ equity | $ | 17,106,664 | | | $ | 16,733,767 | | | 2 | % | | $ | 15,667,440 | | | 9 | % | | | | |
| | | | | | | | | | | | | |
| Common stock shares - authorized | 150,000,000 | | | 150,000,000 | | | | | 150,000,000 | | | | | | | |
| Common stock shares - outstanding | 123,264,864 | | | 123,260,760 | | | | | 125,756,543 | | | | | | | |
| Treasury stock shares | 12,661,581 | | | 12,661,581 | | | | | 9,945,547 | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Twelve Months Ended |
| 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | 12/31/2020 | | 12/31/2019 | | % change |
| | | | | | | | | | | | | | | |
| Interest and fees on loans | $ | 132,117 | | | $ | 134,430 | | | (2) | % | | $ | 152,795 | | | (14) | % | | $ | 554,967 | | | $ | 627,673 | | | (12) | % |
| Interest on securities | 9,014 | | | 9,848 | | | (8) | % | | 10,737 | | | (16) | % | | 39,362 | | | 46,295 | | | (15) | % |
| Interest on federal funds sold and other investments | 598 | | | 942 | | | (37) | % | | 2,241 | | | (73) | % | | 4,549 | | | 10,818 | | | (58) | % |
| Total interest income | 141,729 | | | 145,220 | | | (2) | % | | 165,773 | | | (15) | % | | 598,878 | | | 684,786 | | | (13) | % |
| | | | | | | | | | | | | | | |
| Interest on deposits | 16,934 | | | 22,871 | | | (26) | % | | 45,428 | | | (63) | % | | 110,369 | | | 190,158 | | | (42) | % |
| Interest on other borrowings and convertible notes | 4,039 | | | 4,712 | | | (14) | % | | 6,837 | | | (41) | % | | 21,011 | | | 28,033 | | | (25) | % |
| Total interest expense | 20,973 | | | 27,583 | | | (24) | % | | 52,265 | | | (60) | % | | 131,380 | | | 218,191 | | | (40) | % |
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| Net interest income before provision for credit losses | 120,756 | | | 117,637 | | | 3 | % | | 113,508 | | | 6 | % | | 467,498 | | | 466,595 | | | — | % |
| Provision for credit losses | 27,500 | | | 22,000 | | | 25 | % | | 1,000 | | | 2,650 | % | | 95,000 | | | 7,300 | | | 1,201 | % |
| Net interest income after provision for credit losses | 93,256 | | | 95,637 | | | (2) | % | | 112,508 | | | (17) | % | | 372,498 | | | 459,295 | | | (19) | % |
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| Service fees on deposit accounts | 2,991 | | | 2,736 | | | 9 | % | | 4,510 | | | (34) | % | | 12,443 | | | 17,933 | | | (31) | % |
| International service fees | 696 | | | 987 | | | (29) | % | | 780 | | | (11) | % | | 3,139 | | | 3,926 | | | (20) | % |
| Loan servicing fees, net | 566 | | | 772 | | | (27) | % | | 660 | | | (14) | % | | 2,809 | | | 2,316 | | | 21 | % |
| Wire transfer fees | 867 | | | 892 | | | (3) | % | | 1,100 | | | (21) | % | | 3,577 | | | 4,558 | | | (22) | % |
| | | | | | | | | | | | | | | |
| Net gains on sales of other loans | 1,618 | | | 2,853 | | | (43) | % | | 1,876 | | | (14) | % | | 8,004 | | | 4,487 | | | 78 | % |
| Net gains on sales of securities available for sale | — | | | 7,531 | | | (100) | % | | — | | | — | % | | 7,531 | | | 282 | | | 2,571 | % |
| Other income and fees | 4,677 | | | 1,742 | | | 168 | % | | 4,053 | | | 15 | % | | 15,929 | | | 16,181 | | | (2) | % |
| Total noninterest income | 11,415 | | | 17,513 | | | (35) | % | | 12,979 | | | (12) | % | | 53,432 | | | 49,683 | | | 8 | % |
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| Salaries and employee benefits | 40,911 | | | 40,659 | | | 1 | % | | 39,841 | | | 3 | % | | 162,922 | | | 161,174 | | | 1 | % |
| Occupancy | 7,200 | | | 7,264 | | | (1) | % | | 7,516 | | | (4) | % | | 28,917 | | | 30,735 | | | (6) | % |
| Furniture and equipment | 4,122 | | | 4,513 | | | (9) | % | | 4,260 | | | (3) | % | | 17,548 | | | 15,583 | | | 13 | % |
| Advertising and marketing | 1,695 | | | 1,601 | | | 6 | % | | 2,462 | | | (31) | % | | 6,284 | | | 9,146 | | | (31) | % |
| Data processing and communications | 2,235 | | | 2,204 | | | 1 | % | | 2,416 | | | (7) | % | | 9,344 | | | 10,780 | | | (13) | % |
| Professional fees | 1,847 | | | 1,513 | | | 22 | % | | 5,948 | | | (69) | % | | 8,170 | | | 22,528 | | | (64) | % |
| FDIC assessment | 1,166 | | | 1,167 | | | — | % | | 772 | | | 51 | % | | 5,544 | | | 3,882 | | | 43 | % |
| Credit related expenses | 2,001 | | | 1,793 | | | 12 | % | | 1,717 | | | 17 | % | | 6,817 | | | 4,975 | | | 37 | % |
| OREO (income) expense, net | (86) | | | 1,770 | | | N/A | | (122) | | | (30) | % | | 3,865 | | | (934) | | | N/A |
| FHLB prepayment fee | — | | | 3,584 | | | (100) | % | | — | | | — | % | | 3,584 | | | — | | | 100 | % |
| Branch restructuring costs | 2,367 | | | — | | | 100 | % | | — | | | 100 | % | | 2,367 | | | — | | | 100 | % |
| Other | 7,605 | | | 7,338 | | | 4 | % | | 5,619 | | | 35 | % | | 28,277 | | | 24,759 | | | 14 | % |
| Total noninterest expense | 71,063 | | | 73,406 | | | (3) | % | | 70,429 | | | 1 | % | | 283,639 | | | 282,628 | | | — | % |
| Income before income taxes | 33,608 | | | 39,744 | | | (15) | % | | 55,058 | | | (39) | % | | 142,291 | | | 226,350 | | | (37) | % |
| Income tax provision | 5,289 | | | 9,254 | | | (43) | % | | 12,049 | | | (56) | % | | 30,776 | | | 55,310 | | | (44) | % |
| Net income | $ | 28,319 | | | $ | 30,490 | | | (7) | % | | $ | 43,009 | | | (34) | % | | $ | 111,515 | | | $ | 171,040 | | | (35) | % |
| | | | | | | | | | | | | | | |
| Earnings per Common Share: | | | | | | | | | | | | | | | |
| Basic | $ | 0.23 | | | $ | 0.25 | | | | | $ | 0.34 | | | | | $ | 0.90 | | | $ | 1.35 | | | |
| Diluted | $ | 0.23 | | | $ | 0.25 | | | | | $ | 0.34 | | | | | $ | 0.90 | | | $ | 1.35 | | | |
| | | | | | | | | | | | | | | |
| Average Shares Outstanding: | | | | | | | | | | | | | | | |
| Basic | 123,264,172 | | | 123,251,336 | | | | | 126,410,924 | | | | | 123,501,401 | | | 126,598,564 | | | |
| Diluted | 123,874,229 | | | 123,536,765 | | | | | 126,835,273 | | | | | 123,889,343 | | | 126,875,320 | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
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| At or for the Three Months Ended
(Annualized) | | At or for the Twelve Months Ended |
| Profitability measures: | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| ROA | 0.67 | % | | 0.72 | % | | 1.13 | % | | 0.68 | % | | 1.12 | % |
| ROE | 5.54 | % | | 5.98 | % | | 8.46 | % | | 5.49 | % | | 8.63 | % |
ROTCE (1) | 7.21 | % | | 7.80 | % | | 11.04 | % | | 7.16 | % | | 11.37 | % |
| Net interest margin | 3.02 | % | | 2.91 | % | | 3.16 | % | | 3.00 | % | | 3.27 | % |
| Efficiency ratio | 53.77 | % | | 54.31 | % | | 55.68 | % | | 54.45 | % | | 54.74 | % |
| Noninterest expense / average assets | 1.69 | % | | 1.73 | % | | 1.85 | % | | 1.72 | % | | 1.86 | % |
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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. |
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| Three Months Ended | | Twelve Months Ended |
| Pre-tax acquisition accounting adjustments | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| Accretion on acquired non-impaired loans | $ | 452 | | | $ | 747 | | | $ | 1,945 | | | $ | 2,916 | | | $ | 7,956 | |
| Accretion on acquired credit deteriorated/purchased credit impaired loans | 3,064 | | | 4,584 | | | 5,958 | | | 20,143 | | | 23,874 | |
| Amortization of premium on low income housing tax credits | (71) | | | (71) | | | (76) | | | (283) | | | (303) | |
| Amortization of premium on acquired FHLB borrowings | — | | | — | | | — | | | — | | | 1,280 | |
| Accretion of discount on acquired subordinated debt | (289) | | | (287) | | | (281) | | | (1,143) | | | (1,107) | |
| Amortization of core deposit intangibles | (531) | | | (531) | | | (557) | | | (2,125) | | | (2,228) | |
| Total acquisition accounting adjustments | $ | 2,625 | | | $ | 4,442 | | | $ | 6,989 | | | $ | 19,508 | | | $ | 29,472 | |
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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| 12/31/2020 | | 9/30/2020 | | 12/31/2019 |
| | | Interest | | Annualized | | | | Interest | | Annualized | | | | Interest | | Annualized |
| Average | | Income/ | | Average | | Average | | Income/ | | Average | | Average | | Income/ | | Average |
| Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost |
| INTEREST EARNING ASSETS: | | | | | | | | | | | | | | | | | |
| Loans, including loans held for sale | $ | 13,046,443 | | | $ | 132,117 | | | 4.03 | % | | $ | 12,728,558 | | | $ | 134,430 | | | 4.20 | % | | $ | 12,036,477 | | | $ | 152,795 | | | 5.04 | % |
| Securities available for sale | 2,123,025 | | | 9,014 | | | 1.69 | % | | 2,010,907 | | | 9,848 | | | 1.95 | % | | 1,755,887 | | | 10,737 | | | 2.43 | % |
| FHLB stock and other investments | 749,281 | | | 598 | | | 0.32 | % | | 1,342,641 | | | 942 | | | 0.28 | % | | 463,615 | | | 2,241 | | | 1.92 | % |
| Total interest earning assets | $ | 15,918,749 | | | $ | 141,729 | | | 3.54 | % | | $ | 16,082,106 | | | $ | 145,220 | | | 3.59 | % | | $ | 14,255,979 | | | $ | 165,773 | | | 4.61 | % |
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| INTEREST BEARING LIABILITIES: | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | |
| Demand, interest bearing | $ | 4,910,649 | | | $ | 5,541 | | | 0.45 | % | | $ | 4,895,101 | | | $ | 6,546 | | | 0.53 | % | | $ | 3,682,300 | | | $ | 14,924 | | | 1.61 | % |
| Savings | 305,341 | | | 898 | | | 1.17 | % | | 302,882 | | | 907 | | | 1.19 | % | | 265,008 | | | 748 | | | 1.12 | % |
| Time deposits | 4,240,500 | | | 10,495 | | | 0.98 | % | | 4,703,640 | | | 15,418 | | | 1.30 | % | | 5,148,092 | | | 29,756 | | | 2.29 | % |
| Total interest bearing deposits | 9,456,490 | | | 16,934 | | | 0.71 | % | | 9,901,623 | | | 22,871 | | | 0.92 | % | | 9,095,400 | | | 45,428 | | | 1.98 | % |
| FHLB advances | 204,900 | | | 657 | | | 1.28 | % | | 353,587 | | | 1,323 | | | 1.49 | % | | 608,052 | | | 2,921 | | | 1.91 | % |
| Convertible notes, net | 203,807 | | | 2,383 | | | 4.58 | % | | 202,470 | | | 2,370 | | | 4.58 | % | | 198,669 | | | 2,334 | | | 4.60 | % |
| Subordinated debentures | 100,118 | | | 999 | | | 3.90 | % | | 99,819 | | | 1,019 | | | 3.99 | % | | 98,972 | | | 1,582 | | | 6.25 | % |
| Total interest bearing liabilities | 9,965,315 | | | $ | 20,973 | | | 0.84 | % | | 10,557,499 | | | $ | 27,583 | | | 1.04 | % | | 10,001,093 | | | $ | 52,265 | | | 2.07 | % |
| Noninterest bearing demand deposits | 4,637,584 | | | | | | | 4,239,108 | | | | | | | 2,999,048 | | | | | |
| Total funding liabilities/cost of funds | $ | 14,602,899 | | | | | 0.57 | % | | $ | 14,796,607 | | | | | 0.74 | % | | $ | 13,000,141 | | | | | 1.60 | % |
| Net interest income/net interest spread | | | $ | 120,756 | | | 2.70 | % | | | | $ | 117,637 | | | 2.55 | % | | | | $ | 113,508 | | | 2.54 | % |
| Net interest margin | | | | | 3.02 | % | | | | | | 2.91 | % | | | | | | 3.16 | % |
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| Cost of deposits: | | | | | | | | | | | | | | | | | |
| Noninterest bearing demand deposits | $ | 4,637,584 | | | $ | — | | | — | % | | $ | 4,239,108 | | | $ | — | | | — | % | | $ | 2,999,048 | | | $ | — | | | — | % |
| Interest bearing deposits | 9,456,490 | | | 16,934 | | | 0.71 | % | | 9,901,623 | | | 22,871 | | | 0.92 | % | | 9,095,400 | | | 45,428 | | | 1.98 | % |
| Total deposits | $ | 14,094,074 | | | $ | 16,934 | | | 0.48 | % | | $ | 14,140,731 | | | $ | 22,871 | | | 0.64 | % | | $ | 12,094,448 | | | $ | 45,428 | | | 1.49 | % |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
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| Twelve Months Ended |
| 12/31/2020 | | 12/31/2019 |
| | | Interest | | | | | | Interest | | |
| Average | | Income/ | | Average | | Average | | Income/ | | Average |
| Balance | | Expense | | Yield/Cost | | Balance | | Expense | | Yield/Cost |
| INTEREST EARNING ASSETS: | | | | | | | | | | | |
| Loans, including loans held for sale | $ | 12,698,523 | | | $ | 554,967 | | | 4.37 | % | | $ | 11,998,675 | | | $ | 627,673 | | | 5.23 | % |
| Securities available for sale | 1,899,948 | | | 39,362 | | | 2.07 | % | | 1,796,412 | | | 46,295 | | | 2.58 | % |
| FHLB stock and other investments | 982,419 | | | 4,549 | | | 0.46 | % | | 453,452 | | | 10,818 | | | 2.39 | % |
| Total interest earning assets | $ | 15,580,890 | | | $ | 598,878 | | | 3.84 | % | | $ | 14,248,539 | | | $ | 684,786 | | | 4.81 | % |
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| INTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | |
| Demand, interest bearing | $ | 4,729,438 | | | $ | 34,529 | | | 0.73 | % | | $ | 3,319,556 | | | $ | 57,731 | | | 1.74 | % |
| Savings | 291,655 | | | 3,475 | | | 1.19 | % | | 241,968 | | | 2,596 | | | 1.07 | % |
| Time deposits | 4,698,503 | | | 72,365 | | | 1.54 | % | | 5,556,983 | | | 129,831 | | | 2.34 | % |
| Total interest bearing deposits | 9,719,596 | | | 110,369 | | | 1.14 | % | | 9,118,507 | | | 190,158 | | | 2.09 | % |
| FHLB advances | 435,836 | | | 6,865 | | | 1.58 | % | | 688,652 | | | 12,031 | | | 1.75 | % |
| Convertible notes, net | 201,859 | | | 9,457 | | | 4.61 | % | | 196,835 | | | 9,264 | | | 4.64 | % |
| Subordinated debentures | 99,682 | | | 4,689 | | | 4.63 | % | | 98,551 | | | 6,738 | | | 6.74 | % |
| Total interest bearing liabilities | 10,456,973 | | | $ | 131,380 | | | 1.26 | % | | 10,102,545 | | | $ | 218,191 | | | 2.16 | % |
| Noninterest bearing demand deposits | 3,840,935 | | | | | | | 2,948,212 | | | | | |
| Total funding liabilities/cost of funds | $ | 14,297,908 | | | | | 0.92 | % | | $ | 13,050,757 | | | | | 1.67 | % |
| Net interest income/net interest spread | | | $ | 467,498 | | | 2.58 | % | | | | $ | 466,595 | | | 2.65 | % |
| Net interest margin | | | | | 3.00 | % | | | | | | 3.27 | % |
| | | | | | | | | | | |
| Cost of deposits: | | | | | | | | | | | |
| Noninterest bearing demand deposits | $ | 3,840,935 | | | $ | — | | | — | % | | $ | 2,948,212 | | | $ | — | | | — | % |
| Interest bearing deposits | 9,719,596 | | | 110,369 | | | 1.14 | % | | 9,118,507 | | | 190,158 | | | 2.09 | % |
| Total deposits | $ | 13,560,531 | | | $ | 110,369 | | | 0.81 | % | | $ | 12,066,719 | | | $ | 190,158 | | | 1.58 | % |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Twelve Months Ended |
| AVERAGE BALANCES: | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | 12/31/2020 | | 12/31/2019 | | % change |
| Loans receivable, including loans held for sale | $ | 13,046,443 | | | $ | 12,728,558 | | | 2 | % | | $ | 12,036,477 | | | 8 | % | | $ | 12,698,523 | | | $ | 11,998,675 | | | 6 | % |
| Investments | 2,872,306 | | | 3,353,548 | | | (14) | % | | 2,219,502 | | | 29 | % | | 2,882,367 | | | 2,249,864 | | | 28 | % |
| Interest earning assets | 15,918,749 | | | 16,082,106 | | | (1) | % | | 14,255,979 | | | 12 | % | | 15,580,890 | | | 14,248,539 | | | 9 | % |
| Total assets | 16,824,700 | | | 17,020,795 | | | (1) | % | | 15,228,488 | | | 10 | % | | 16,515,102 | | | 15,214,412 | | | 9 | % |
| | | | | | | | | | | | | | | |
| Interest bearing deposits | 9,456,490 | | | 9,901,623 | | | (4) | % | | 9,095,400 | | | 4 | % | | 9,719,596 | | | 9,118,507 | | | 7 | % |
| Interest bearing liabilities | 9,965,315 | | | 10,557,499 | | | (6) | % | | 10,001,093 | | | — | % | | 10,456,973 | | | 10,102,545 | | | 4 | % |
| Noninterest bearing demand deposits | 4,637,584 | | | 4,239,108 | | | 9 | % | | 2,999,048 | | | 55 | % | | 3,840,935 | | | 2,948,212 | | | 30 | % |
| Stockholders’ equity | 2,045,959 | | | 2,039,555 | | | — | % | | 2,034,231 | | | 1 | % | | 2,032,570 | | | 1,981,811 | | | 3 | % |
| Net interest earning assets | 5,953,434 | | | 5,524,607 | | | 8 | % | | 4,254,886 | | | 40 | % | | 5,123,917 | | | 4,145,994 | | | 24 | % |
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| LOAN PORTFOLIO COMPOSITION: | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | | | | | |
| Commercial loans | $ | 4,157,787 | | | $ | 3,700,020 | | | 12 | % | | $ | 2,719,818 | | | 53 | % | | | | | | |
| Real estate loans | 8,772,134 | | | 8,713,536 | | | 1 | % | | 8,666,901 | | | 1 | % | | | | | | |
| Consumer and other loans | 633,292 | | | 706,669 | | | (10) | % | | 889,288 | | | (29) | % | | | | | | |
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| Loans, net of deferred loan fees and costs | 13,563,213 | | | 13,120,225 | | | 3 | % | | 12,276,007 | | | 10 | % | | | | | | |
| Allowance for credit losses | (206,741) | | | (179,849) | | | (15) | % | | (94,144) | | | (120) | % | | | | | | |
| Loans receivable, net | $ | 13,356,472 | | | $ | 12,940,376 | | | 3 | % | | $ | 12,181,863 | | | 10 | % | | | | | | |
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| REAL ESTATE LOANS BY PROPERTY TYPE: | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | | | | | |
| Retail buildings | $ | 2,293,396 | | | $ | 2,311,516 | | | (1) | % | | $ | 2,298,872 | | | — | % | | | | | | |
| Hotels/motels | 1,634,287 | | | 1,675,960 | | | (2) | % | | 1,709,189 | | | (4) | % | | | | | | |
| Gas stations/car washes | 892,110 | | | 824,378 | | | 8 | % | | 844,081 | | | 6 | % | | | | | | |
| Mixed-use facilities | 750,867 | | | 754,096 | | | — | % | | 785,882 | | | (4) | % | | | | | | |
| Warehouses | 1,091,389 | | | 1,022,657 | | | 7 | % | | 1,030,876 | | | 6 | % | | | | | | |
| Multifamily | 518,498 | | | 518,295 | | | — | % | | 465,397 | | | 11 | % | | | | | | |
| Other | 1,591,587 | | | 1,606,634 | | | (1) | % | | 1,532,604 | | | 4 | % | | | | | | |
| Total | $ | 8,772,134 | | | $ | 8,713,536 | | | 1 | % | | $ | 8,666,901 | | | 1 | % | | | | | | |
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| DEPOSIT COMPOSITION: | 12/31/2020 | | 9/30/2020 | | % change | | 12/31/2019 | | % change | | | | | | |
| Noninterest bearing demand deposits | $ | 4,814,254 | | | $ | 4,488,529 | | | 7 | % | | $ | 3,108,687 | | | 55 | % | | | | | | |
| Money market and other | 5,232,413 | | | 4,763,893 | | | 10 | % | | 3,985,556 | | | 31 | % | | | | | | |
| Saving deposits | 300,770 | | | 308,943 | | | (3) | % | | 274,151 | | | 10 | % | | | | | | |
| Time deposits | 3,986,475 | | | 4,446,991 | | | (10) | % | | 5,158,970 | | | (23) | % | | | | | | |
| Total deposit balances | $ | 14,333,912 | | | $ | 14,008,356 | | | 2 | % | | $ | 12,527,364 | | | 14 | % | | | | | | |
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| DEPOSIT COMPOSITION (%): | 12/31/2020 | | 9/30/2020 | | | | 12/31/2019 | | | | | | | | |
| Noninterest bearing demand deposits | 33.6 | % | | 32.1 | % | | | | 24.8 | % | | | | | | | | |
| Money market and other | 36.5 | % | | 34.0 | % | | | | 31.8 | % | | | | | | | | |
| Saving deposits | 2.1 | % | | 2.2 | % | | | | 2.2 | % | | | | | | | | |
| Time deposits | 27.8 | % | | 31.7 | % | | | | 41.2 | % | | | | | | | | |
| Total deposit balances | 100.0 | % | | 100.0 | % | | | | 100.0 | % | | | | | | | | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
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| CAPITAL RATIOS: | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | | | | | | | |
| Total stockholders’ equity | $ | 2,053,745 | | | $ | 2,040,561 | | | $ | 2,036,011 | | | | | | | | | |
| Common equity tier 1 ratio | 10.94 | % | | 11.36 | % | | 11.76 | % | | | | | | | | |
| Tier 1 risk-based capital ratio | 11.64 | % | | 12.09 | % | | 12.51 | % | | | | | | | | |
| Total risk-based capital ratio | 12.87 | % | | 13.19 | % | | 13.23 | % | | | | | | | | |
| Tier 1 leverage ratio | 10.22 | % | | 10.02 | % | | 11.22 | % | | | | | | | | |
| Total risk weighted assets | $ | 14,341,456 | | | $ | 13,691,823 | | | $ | 13,208,299 | | | | | | | | | |
| Book value per common share | $ | 16.66 | | | $ | 16.55 | | | $ | 16.19 | | | | | | | | | |
Tangible common equity to tangible assets 1 | 9.50 | % | | 9.63 | % | | 10.27 | % | | | | | | | | |
Tangible common equity per share 1 | $ | 12.81 | | | $ | 12.70 | | | $ | 12.40 | | | | | | | | | |
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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. | | | | | | | | |
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| Three Months Ended | | Twelve Months Ended |
| ALLOWANCE FOR CREDIT LOSSES CHANGES: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| Balance at beginning of period | $ | 179,849 | | | $ | 161,771 | | | $ | 144,923 | | | $ | 94,144 | | | $ | 93,882 | | | $ | 94,144 | | | $ | 92,557 | |
| CECL day 1 adoption impact | — | | | — | | | — | | | 26,200 | | | — | | | 26,200 | | | — | |
| Provision for credit losses | 27,500 | | | 22,000 | | | 17,500 | | | 28,000 | | | 1,000 | | | 95,000 | | | 7,300 | |
| Recoveries | 2,207 | | | 2,428 | | | 252 | | | 2,536 | | | 939 | | | 7,423 | | | 3,736 | |
| Charge offs | (2,815) | | | (6,350) | | | (904) | | | (5,957) | | | (1,677) | | | (16,026) | | | (8,109) | |
| PCI allowance adjustment | — | | | — | | | — | | | — | | | — | | | — | | | (1,340) | |
| Balance at end of period | $ | 206,741 | | | $ | 179,849 | | | $ | 161,771 | | | $ | 144,923 | | | $ | 94,144 | | | $ | 206,741 | | | $ | 94,144 | |
| Net charge offs/average loans receivable (annualized) | 0.02 | % | | 0.12 | % | | 0.02 | % | | 0.11 | % | | 0.02 | % | | 0.07 | % | | 0.04 | % |
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| Three Months Ended | | Twelve Months Ended |
| NET CHARGE OFFS (RECOVERIES) BY TYPE: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| Real estate loans | $ | (726) | | | $ | 5,154 | | | $ | 148 | | | $ | 2,230 | | | $ | 203 | | | $ | 6,806 | | | $ | (301) | |
| Commercial loans | 1,167 | | | (1,451) | | | 240 | | | 676 | | | 245 | | | 632 | | | 3,490 | |
| Consumer loans | 167 | | | 219 | | | 264 | | | 515 | | | 290 | | | 1,165 | | | 1,184 | |
| Total net charge offs | $ | 608 | | | $ | 3,922 | | | $ | 652 | | | $ | 3,421 | | | $ | 738 | | | $ | 8,603 | | | $ | 4,373 | |
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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
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| NONPERFORMING ASSETS: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
Loans on nonaccrual status 1 | $ | 85,238 | | | $ | 69,205 | | | $ | 82,137 | | | $ | 72,639 | | | $ | 54,785 | |
| Delinquent loans 90 days or more on accrual status | 614 | | | 1,537 | | | 430 | | | 387 | | | 7,547 | |
| Accruing troubled debt restructured loans | 37,354 | | | 35,429 | | | 44,026 | | | 43,789 | | | 35,709 | |
| Total nonperforming loans | 123,206 | | | 106,171 | | | 126,593 | | | 116,815 | | | 98,041 | |
| Other real estate owned | 20,121 | | | 18,410 | | | 20,983 | | | 23,039 | | | 24,091 | |
| Total nonperforming assets | $ | 143,327 | | | $ | 124,581 | | | $ | 147,576 | | | $ | 139,854 | | | $ | 122,132 | |
| Nonperforming assets/total assets | 0.84 | % | | 0.74 | % | | 0.86 | % | | 0.87 | % | | 0.78 | % |
| Nonperforming assets/loans receivable & OREO | 1.06 | % | | 0.95 | % | | 1.14 | % | | 1.11 | % | | 0.99 | % |
| Nonperforming assets/total capital | 6.98 | % | | 6.11 | % | | 7.27 | % | | 6.93 | % | | 6.00 | % |
| Nonperforming loans/loans receivable | 0.91 | % | | 0.81 | % | | 0.98 | % | | 0.93 | % | | 0.80 | % |
| Nonaccrual loans/loans receivable | 0.63 | % | | 0.53 | % | | 0.64 | % | | 0.58 | % | | 0.45 | % |
| Allowance for credit losses/loans receivable | 1.52 | % | | 1.37 | % | | 1.26 | % | | 1.15 | % | | 0.77 | % |
| Allowance for credit losses/nonaccrual loans | 242.55 | % | | 259.88 | % | | 196.95 | % | | 199.51 | % | | 171.84 | % |
| Allowance for credit losses/nonperforming loans | 167.80 | % | | 169.40 | % | | 127.79 | % | | 124.06 | % | | 96.03 | % |
| Allowance for credit losses/nonperforming assets | 144.24 | % | | 144.36 | % | | 109.62 | % | | 103.62 | % | | 77.08 | % |
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1 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.5 million, $26.2 million, $30.3 million, $28.8 million, and $28.1 million, at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively. |
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| NONACCRUAL LOANS BY TYPE: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
| Real estate loans | $ | 67,450 | | | $ | 51,739 | | | $ | 64,060 | | | $ | 56,787 | | | $ | 40,935 | |
| Commercial loans | 13,911 | | | 13,022 | | | 12,079 | | | 12,747 | | | 10,893 | |
| Consumer loans | 3,877 | | | 4,444 | | | 5,998 | | | 3,105 | | | 2,957 | |
| Total nonaccrual loans | $ | 85,238 | | | $ | 69,205 | | | $ | 82,137 | | | $ | 72,639 | | | $ | 54,785 | |
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| BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
| Retail buildings | $ | 5,408 | | | $ | 5,451 | | | $ | 5,526 | | | $ | 5,014 | | | $ | 4,215 | |
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| Gas stations/car washes | 219 | | | 224 | | | 1,789 | | | 1,675 | | | — | |
| Mixed-use facilities | 3,521 | | | 4,323 | | | 3,583 | | | 3,157 | | | 3,175 | |
| Warehouses | 7,296 | | | 7,320 | | | 13,433 | | | 13,381 | | | 10,381 | |
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Other 2 | 20,910 | | | 18,111 | | | 19,695 | | | 20,562 | | | 17,938 | |
| Total | $ | 37,354 | | | $ | 35,429 | | | $ | 44,026 | | | $ | 43,789 | | | $ | 35,709 | |
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2 Includes commercial business, consumer and other loans | | | | | | | | | |
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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
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| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
| 30 - 59 days | $ | 11,347 | | | $ | 5,962 | | | $ | 18,857 | | | $ | 37,866 | | | $ | 14,433 | |
| 60 - 89 days | 16,826 | | | 58,065 | | | 29,975 | | | 2,605 | | | 4,712 | |
| Total | $ | 28,173 | | | $ | 64,027 | | | $ | 48,832 | | | $ | 40,471 | | | $ | 19,145 | |
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| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
| Real estate loans | $ | 15,689 | | | $ | 60,510 | | | $ | 27,245 | | | $ | 23,753 | | | $ | 7,689 | |
| Commercial loans | 3,393 | | | 624 | | | 5,987 | | | 4,583 | | | 692 | |
| Consumer loans | 9,091 | | | 2,893 | | | 15,600 | | | 12,135 | | | 10,764 | |
| Total | $ | 28,173 | | | $ | 64,027 | | | $ | 48,832 | | | $ | 40,471 | | | $ | 19,145 | |
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| CRITICIZED LOANS: | 12/31/2020 | | 9/30/2020 | | 6/30/2020 | | 3/31/2020 | | 12/31/2019 |
| Special mention | $ | 184,941 | | | $ | 153,388 | | | $ | 127,149 | | | $ | 122,279 | | | $ | 141,452 | |
| Substandard | 366,556 | | | 311,902 | | | 299,357 | | | 278,771 | | | 259,278 | |
| Doubtful/Loss | 1 | | | 6,640 | | | 11 | | | 12 | | | 13 | |
| Total criticized loans | $ | 551,498 | | | $ | 471,930 | | | $ | 426,517 | | | $ | 401,062 | | | $ | 400,743 | |
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
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| Reconciliation of GAAP financial measures to non-GAAP financial measures: | | | | |
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| Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below. |
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| Three Months Ended | | Twelve Months Ended |
| 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | | | | | | | | | |
| Average stockholders’ equity | $ | 2,045,959 | | | $ | 2,039,555 | | | $ | 2,034,231 | | | $ | 2,032,570 | | | $ | 1,981,811 | |
| Less: Goodwill and core deposit intangible assets, net | (474,467) | | | (475,010) | | | (476,596) | | | (475,263) | | | (477,444) | |
| Average tangible common equity | $ | 1,571,492 | | | $ | 1,564,545 | | | $ | 1,557,635 | | | $ | 1,557,307 | | | $ | 1,504,367 | |
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| Net Income | $ | 28,319 | | | $ | 30,490 | | | $ | 43,009 | | | $ | 111,515 | | | $ | 171,040 | |
| Return on average tangible common equity (annualized) | 7.21 | % | | 7.80 | % | | 11.04 | % | | 7.16 | % | | 11.37 | % |
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| TANGIBLE COMMON EQUITY | 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | | | |
| Total stockholders’ equity | $ | 2,053,745 | | | $ | 2,040,561 | | | $ | 2,036,011 | | | | | |
| Less: Goodwill and core deposit intangible assets, net | (474,158) | | | (474,689) | | | (476,283) | | | | | |
| Tangible common equity | $ | 1,579,587 | | | $ | 1,565,872 | | | $ | 1,559,728 | | | | | |
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| Total assets | $ | 17,106,664 | | | $ | 16,733,767 | | | $ | 15,667,440 | | | | | |
| Less: Goodwill and core deposit intangible assets, net | (474,158) | | | (474,689) | | | (476,283) | | | | | |
| Tangible assets | $ | 16,632,506 | | | $ | 16,259,078 | | | $ | 15,191,157 | | | | | |
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| Common shares outstanding | 123,264,864 | | | 123,260,760 | | | 125,756,543 | | | | | |
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| Tangible common equity to tangible assets | 9.50 | % | | 9.63 | % | | 10.27 | % | | | | |
| Tangible common equity per share | $ | 12.81 | | | $ | 12.70 | | | $ | 12.40 | | | | | |
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| Three Months Ended | | Twelve Months Ended |
| 12/31/2020 | | 9/30/2020 | | 12/31/2019 | | 12/31/2020 | | 12/31/2019 |
| PRE-TAX PRE-PROVISION INCOME | | | | | | | | | |
| Net income | $ | 28,319 | | | $ | 30,490 | | | $ | 43,009 | | | $ | 111,515 | | | $ | 171,040 | |
| Add back - tax provision | 5,289 | | | 9,254 | | | 12,049 | | | 30,776 | | | 55,310 | |
| Add back - provision for credit losses | 27,500 | | | 22,000 | | | 1,000 | | | 95,000 | | | 7,300 | |
| Pre-tax pre-provision income | $ | 61,108 | | | $ | 61,744 | | | $ | 56,058 | | | $ | 237,291 | | | $ | 233,650 | |
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