EX-99.1 2 hope-09302024ex991financia.htm EX-99.1 Document

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News Release



HOPE BANCORP REPORTS 2024 THIRD QUARTER FINANCIAL RESULTS


LOS ANGELES – October 28, 2024 – Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its third quarter and nine months ended September 30, 2024. For the three months ended September 30, 2024, net income totaled $24.2 million, or $0.20 per diluted common share. This compares with net income of $25.3 million, or $0.21 per diluted common share, in the second quarter of 2024. Excluding notable items(1), net income for the 2024 third quarter was $25.2 million, or $0.21 per diluted common share.
“We are pleased to see a higher level of productivity from our banking teams, along with the continued success of our core deposit gathering initiatives. Quarter-over-quarter, customer deposit growth was a robust 11% annualized, supporting loan growth and offsetting a planned reduction in brokered deposits,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “In the 2024 third quarter, loans receivable grew 2% on an annualized basis, marking a turn-around in our loan growth trend. Additionally, more than two-thirds of the net growth in noninterest bearing demand deposits this quarter came from small business accounts.

“Regulatory risk-based capital ratios for Hope Bancorp are the highest since our merger with Wilshire Bancorp in 2016. As of September 30, 2024, our total capital ratio was a strong 14.8%, and our tangible equity ratio was a robust 10.1%,” continued Kim.

“The success of our balance sheet management has resulted in high levels of capital, ample liquidity, and a lower loan-to-deposit ratio, positioning us well to increase our market share, add new client relationships, and generate profitable growth as economic conditions and loan demand improve in the coming year,” said Kim.

“We are excited about our pending merger with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank. We believe this compelling combination will strengthen the Territorial franchise for the long term, providing many advantages for customers and employees as part of a larger organization with greater resources, enhanced technology platforms, and an expanded array of banking products and services.”

Operating Results for the 2024 Third Quarter

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2024 third quarter totaled $104.8 million. This compares with net interest income before provision for credit losses of $105.9 million in the immediately preceding second quarter. Interest income was $235.1 million in the third quarter of 2024, up from $232.6 million in the second quarter of 2024. Growth in interest income was offset by increased interest expense, which was $130.3 million in the third quarter, compared with $126.7 million in the second quarter. The quarter-over-quarter increase in interest expense reflects the change in average total deposit costs, which increased five basis points to 3.44% for the 2024 third quarter, up from 3.39% in the immediately preceding second quarter. End-of-period total deposit costs decreased nine basis points to 3.34% as of September 30, 2024, from 3.43% as of June 30, 2024, indicating an inflection point in deposit costs by deposit type.

Net interest margin for the 2024 third quarter was 2.55%, down seven basis points from 2.62% in the 2024 second quarter. The quarter-over-quarter change in net interest margin reflects a higher balance and cost of average interest bearing deposits, as well as the change in average loan yields, partially offset by a higher balance and yield earned on average interest earning cash and deposits at other banks, and a lower balance and lower rate paid on average borrowings.

(1)     Net income, excluding merger-related expenses, restructuring-related charges and the FDIC special assessment (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
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Noninterest income. Noninterest income for the 2024 third quarter increased to $11.8 million, up 7% from $11.1 million in the immediately preceding second quarter. The Company recorded net gains on the sale of SBA loans of $2.7 million in the 2024 third quarter, compared with $2.0 million in the immediately preceding second quarter. In the third quarter of 2024, the Company sold $41.4 million of SBA loans, compared with $29.8 million in the second quarter of 2024. Other noninterest income in the 2024 third quarter included a $403,000 gain from bank owned life insurance, as well as a $326,000 net loss on sales of securities available for sale, as the Company repositioned a portion of its lower-yielding investment securities.

Noninterest expense. Noninterest expense for the 2024 third quarter was $81.3 million, compared with $81.0 million in the immediately preceding second quarter, and down 6% year-over-year from $86.8 million in the 2023 third quarter. Excluding notable items(2), which were primarily merger-related costs, noninterest expense for the 2024 third quarter was $79.8 million, compared with $79.1 million for the 2024 second quarter, and down 8% year-over-year from $86.3 million for the 2023 third quarter. Salaries and employee benefits expense for the 2024 third quarter was $44.2 million, up by $53,000 and essentially stable compared with $44.1 million in the 2024 second quarter. Year-over-year, salaries and employee benefits expense decreased 13% from $51.0 million in the 2023 third quarter, reflecting the benefits of a restructuring executed in the fourth quarter of 2023.

Tax rate. The year-to-date effective tax rate for the nine months ended September 30, 2024, was 26.6%, compared with the year-to-date effective tax rate of 25.7% for the same period of 2023. For the full year 2024, the Company expects the effective tax rate to be approximately 26%.

Balance Sheet Summary
Cash and investment securities. At September 30, 2024, cash and cash equivalents totaled $680.9 million, compared with $654.0 million at June 30, 2024, and $2.50 billion at September 30, 2023. The year-over-year change in cash and cash equivalents primarily reflected the payoff of the Company’s Bank Term Funding Program (“BTFP”) borrowings in March and April of 2024. Investment securities totaled $2.18 billion at September 30, 2024, $2.17 billion at June 30, 2024, and $2.26 billion at September 30, 2023.

Loans. Gross loans of $13.64 billion at September 30, 2024, were up $8.4 million from $13.64 billion at June 30, 2024. Loans receivable, which excludes loans held for sale, grew $51.0 million quarter-over-quarter, or up 2% annualized. Quarter-over-quarter, commercial and industrial loans and residential mortgage loans increased, partially offset by a decrease in commercial real estate loans. The Company sold $41.4 million of SBA loans in the third quarter of 2024.

The following table sets forth the loan portfolio composition at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)9/30/20246/30/20249/30/2023
BalancePercentageBalancePercentageBalancePercentage
Commercial real estate (“CRE”) loans$8,630,757 63.3 %$8,679,515 63.6 %$8,972,886 62.6 %
Commercial and industrial (“C&I”) loans3,901,368 28.6 %3,854,284 28.3 %4,450,341 31.1 %
Residential mortgage and other loans1,085,863 7.9 %1,033,203 7.6 %882,966 6.2 %
    Loans receivable13,617,988 99.8 %13,567,002 99.5 %14,306,193 99.9 %
Loans held for sale25,714 0.2 %68,316 0.5 %19,502 0.1 %
Gross loans$13,643,702 100.0 %$13,635,318 100.0 %$14,325,695 100.0 %

(2)     Notable items included $1.2 million of merger-related expenses and $197,000 of restructuring-related costs for the 2024 third quarter, $1.6 million of merger-related expenses, $576,000 of restructuring-related costs, and a $309,000 reversal of an accrual related to the FDIC special assessment for the 2024 second quarter, and $500,000 of restructuring related costs for the 2023 third quarter, all on a pre-tax basis. Noninterest expense, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
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Deposits. Total deposits amounted to $14.73 billion at September 30, 2024, up $18.0 million from $14.71 billion at June 30, 2024. During the 2024 third quarter, robust growth in customer deposits of 11% annualized more than offset a planned reduction of brokered deposits. Noninterest bearing demand deposits grew $51.8 million quarter-over-quarter to $3.72 billion at September 30, 2024, and money market and interest bearing demand deposits increased $105.4 million quarter-over-quarter to $5.01 billion. During the third quarter of 2024, the Company reduced brokered deposits by $351.5 million from June 30, 2024.

The following table sets forth the deposit composition at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)9/30/20246/30/20249/30/2023
BalancePercentageBalancePercentageBalancePercentage
Noninterest bearing demand deposits$3,722,985 25.3 %$3,671,192 24.9 %$4,249,788 27.0 %
Money market, interest bearing demand, and savings deposits5,013,305 34.0 %4,907,860 33.4 %4,855,683 30.9 %
Time deposits5,993,208 40.7 %6,132,419 41.7 %6,634,388 42.1 %
Total deposits$14,729,498 100.0 %$14,711,471 100.0 %$15,739,859 100.0 %
  Gross loan-to-deposit ratio92.6 %92.7 %91.0 %

On October 1, 2024, the Bank completed a branch purchase and assumption agreement whereby PromiseOne Bank acquired the deposits and other assets associated with Bank of Hope’s Annandale and Centreville branches in Virginia. As of transaction close, deposits at these two branches totaled approximately $129.4 million.

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings decreased to $100.0 million at September 30, 2024, down from $170.0 million at June 30, 2024, and $1.80 billion at September 30, 2023. The year-over-year change primarily reflected the payoff of the Company’s BTFP borrowings in March and April 2024.


Credit Quality and Allowance for Credit Losses
Nonperforming assets. Nonperforming assets were $103.8 million, or 0.60% of total assets, at September 30, 2024, compared with $67.3 million, or 0.39% of total assets, at June 30, 2024, and $61.7 million, or 0.31% of total assets, at September 30, 2023. The increase was due to the migration of one relationship that was placed on nonaccrual status as of September 30, 2024, following loan maturities. This relationship consists of three commercial real estate loans that are well-secured by properties in primary locations with minimal to no loss expected.

The following table sets forth the components of nonperforming assets at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)9/30/20246/30/20249/30/2023
Loans on nonaccrual status (1)
$103,602 $67,003 $39,081 
Accruing delinquent loans past due 90 days or more
226 273 21,579 
Total nonperforming loans103,828 67,276 60,660 
Other real estate owned— — 1,043 
Total nonperforming assets$103,828 $67,276 $61,703 
Nonperforming assets/total assets0.60 %0.39 %0.31 %
_____________________________________
(1)     Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.1 million, $11.2 million and $12.1 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

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Net charge offs and provision for credit losses. The Company recorded net charge offs of $5.7 million in the 2024 third quarter, equivalent to 0.17%, annualized, of average loans. This compares with net charge offs of $4.4 million, or 0.13%, annualized, of average loans in the immediately preceding second quarter. Net charge off levels continue to be moderate.

The following table sets forth net charge offs and annualized net charge off ratios for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023:

For the Three Months Ended
(dollars in thousands) (unaudited)9/30/20246/30/20249/30/2023
Net charge offs$5,749 $4,439 $30,987 
Annualized net charge offs/average loans0.17 %0.13 %0.85 %

For the 2024 third quarter, the Company recorded a provision for credit losses of $3.3 million. This compares with a provision for credit losses of $1.4 million in the immediately preceding second quarter.

Allowance for credit losses. The allowance for credit losses totaled $153.3 million at September 30, 2024, compared with $156.0 million at June 30, 2024. The allowance coverage ratio was 1.13% of loans receivable at September 30, 2024, compared with 1.15% at June 30, 2024. The change in allowance coverage reflects the positive impact from improved macroeconomic variables, notably the CRE price index, in the Current Expected Credit Loss (“CECL”) model, partially offset by increased qualitative and individually evaluated loan reserves.

The following table sets forth the allowance for credit losses and the coverage ratios at September 30, 2024, June 30, 2024, and September 30, 2023:

(dollars in thousands) (unaudited)9/30/20246/30/20249/30/2023
Allowance for credit losses$153,270 $156,019 $158,809 
Allowance for credit losses/loans receivable1.13 %1.15 %1.11 %


Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At September 30, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at September 30, 2024, June 30, 2024, and September 30, 2023:
(unaudited)
9/30/20246/30/20249/30/2023Minimum Guideline for “Well-Capitalized”
Common Equity Tier 1 Capital Ratio13.06%12.70%11.67%6.50%
Tier 1 Capital Ratio13.78%13.40%12.32%8.00%
Total Capital Ratio14.80%14.41%13.23%10.00%
Leverage Ratio11.61%11.61%9.83%5.00%

At September 30, 2024, total stockholders’ equity was $2.17 billion, or $17.97 per common share, compared with $2.11 billion, or $17.49 per common share, at June 30, 2024. Tangible common equity (“TCE”) per share(4) was $14.10 at September 30, 2024, compared with $13.61 at June 30, 2024, and the TCE ratio(3) was 10.08% at September 30, 2024, up 36 basis points from 9.72% at June 30, 2024.

(3)    TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.
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The following table sets forth the TCE per share and the TCE ratio at September 30, 2024, June 30, 2024, and September 30, 2023:

(unaudited)9/30/20246/30/20249/30/2023
TCE per share$14.10$13.61$13.01
TCE ratio10.08%9.72%7.96%

Investor Conference Call
The Company previously announced that it will host an investor conference call on Monday, October 28, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its third quarter ended September 30, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through November 4, 2024, replay access code 10193704.

Non-GAAP Financial Metrics
This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

About Hope Bancorp, Inc.
Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.35 billion in total assets as of September 30, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 46 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

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Additional Information About the Merger and Where to Find It
In connection with the pending merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4, which included a Proxy Statement/Prospectus and which was declared effective by the SEC on August 20, 2024, and further supplemented by Hope Bancorp on September 12, 2024. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the pending merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.

Participants in Solicitation
Hope Bancorp, Inc., Territorial Bancorp and certain of their directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Hope Bancorp’s directors and executive officers is set forth in the Proxy Statement, dated April 12, 2024 (as amended and supplemented), for its 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Territorial Bancorp’s participants is set forth in the Proxy Statement, dated April 16, 2024, for Territorial Bancorp’s 2024 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of those participants in the solicitation of proxies in respect of the merger may be obtained by reading the Registration Statement and Proxy Statement/Prospectus filed with the SEC.

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Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, ease of integration and diversification of franchise in connection with the pending merger with Territorial Bancorp. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the pending transaction is subject to regulatory approvals, the approval of Territorial Bancorp shareholders, and other customary closing conditions. There is no assurance that such conditions will be met or that the pending merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in Hope Bancorp’s areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the pending transaction could have adverse effects on the market price of the common stock of Hope Bancorp; and diversion of management’s attention from ongoing business operations and opportunities. For additional information concerning these and other risk factors, see Hope Bancorp’s most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.


Contacts:
Julianna Balicka
Angie Yang
EVP & Chief Financial Officer
SVP, Director of Investor Relations & Corporate Communications
213-235-3235
213-251-2219
julianna.balicka@bankofhope.com
angie.yang@bankofhope.com


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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)

Assets:9/30/20246/30/2024% change9/30/2023% change
Cash and due from banks$680,857 $654,044 4.1 %$2,500,323 (72.8)%
Investment securities2,177,301 2,172,859 0.2 %2,260,837 (3.7)%
Federal Home Loan Bank (“FHLB”) stock and other investments57,158 61,528 (7.1)%60,433 (5.4)%
Gross loans, including loans held for sale13,643,702 13,635,318 0.1 %14,325,695 (4.8)%
Allowance for credit losses(153,270)(156,019)(1.8)%(158,809)(3.5)%
Accrued interest receivable51,898 57,645 (10.0)%60,665 (14.5)%
Premises and equipment, net51,543 50,919 1.2 %51,764 (0.4)%
Goodwill and intangible assets467,182 467,583 (0.1)%468,832 (0.4)%
Other assets377,818 431,214 (12.4)%506,624 (25.4)%
Total assets$17,354,189 $17,375,091 (0.1)%$20,076,364 (13.6)%
Liabilities:
Deposits$14,729,498 $14,711,471 0.1 %$15,739,859 (6.4)%
FHLB and Federal Reserve Bank (“FRB”) borrowings100,000 170,000 (41.2)%1,795,726 (94.4)%
Subordinated debentures and convertible notes, net109,249 108,918 0.3 %107,949 1.2 %
Accrued interest payable107,017 86,779 23.3 %166,831 (35.9)%
Other liabilities138,640 186,641 (25.7)%235,575 (41.1)%
Total liabilities$15,184,404 $15,263,809 (0.5)%$18,045,940 (15.9)%
Stockholders’ Equity:
Common stock, $0.001 par value$138 $138 — %$137 0.7 %
Additional paid-in capital1,442,993 1,440,963 0.1 %1,436,769 0.4 %
Retained earnings1,174,100 1,167,978 0.5 %1,140,870 2.9 %
Treasury stock, at cost(264,667)(264,667)— %(264,667)— %
Accumulated other comprehensive loss, net(182,779)(233,130)21.6 %(282,685)35.3 %
Total stockholders’ equity2,169,785 2,111,282 2.8 %2,030,424 6.9 %
Total liabilities and stockholders’ equity$17,354,189 $17,375,091 (0.1)%$20,076,364 (13.6)%
Common stock shares – authorized300,000,000 300,000,000 150,000,000 
Common stock shares – outstanding120,737,908 120,731,342 120,026,220 
Treasury stock shares17,382,835 17,382,835 17,382,835 
Table Page 1
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)
Three Months EndedNine Months Ended
9/30/20246/30/2024% change9/30/2023% change9/30/20249/30/2023% change
Interest and fees on loans$210,022 $209,683 — %$229,937 (9)%$633,331 $671,543 (6)%
Interest on investment securities16,741 16,829 (1)%17,006 (2)%51,619 47,665 8 %
Interest on cash and deposits at other banks7,507 5,284 42 %28,115 (73)%39,974 58,332 (31)%
Interest on other investments and FHLB dividends814 805 1 %735 11 %2,435 2,114 15 %
Total interest income235,084 232,601 1 %275,793 (15)%727,359 779,654 (7)%
Interest on deposits 127,193 122,577 4 %117,854 8 %373,803 319,926 17 %
Interest on borrowings3,082 4,164 (26)%22,561 (86)%27,840 59,783 (53)%
Total interest expense130,275 126,741 3 %140,415 (7)%401,643 379,709 6 %
Net interest income before provision104,809 105,860 (1)%135,378 (23)%325,716 399,945 (19)%
Provision for credit losses3,280 1,400 134 %16,862 (81)%7,280 29,192 (75)%
Net interest income after provision101,529 104,460 (3)%118,516 (14)%318,436 370,753 (14)%
Service fees on deposit accounts2,651 2,681 (1)%2,415 10 %7,919 6,961 14 %
Net gains on sales of SBA loans2,722 1,980 37 %— 100 %4,702 4,097 15 %
Net (losses) gains on sales of securities available for sale(326)425 N/A— 100 %99 — 100 %
Other income and fees6,792 5,985 13 %5,890 15 %18,476 25,239 (27)%
Total noninterest income11,839 11,071 7 %8,305 43 %31,196 36,297 (14)%
Salaries and employee benefits44,160 44,107 — %51,033 (13)%135,844 160,507 (15)%
Occupancy6,940 6,906 — %7,149 (3)%20,632 21,637 (5)%
Furniture and equipment5,341 5,475 (2)%5,625 (5)%16,156 16,076 — %
Data processing and communications3,112 2,997 4 %2,891 8 %9,099 8,630 5 %
FDIC assessment2,200 3,003 (27)%3,683 (40)%8,129 10,155 (20)%
FDIC special assessment— (309)(100)%— — %691 — 100 %
Earned interest credit6,869 6,139 12 %6,377 8 %18,842 15,894 19 %
Restructuring-related costs197 576 (66)%500 (61)%1,175 500 135 %
Merger-related costs1,236 1,589 (22)%— 100 %3,869 — 100 %
Other noninterest expense11,213 10,504 7 %9,553 17 %32,657 29,369 11 %
Total noninterest expense81,268 80,987 — %86,811 (6)%247,094 262,768 (6)%
Income before income taxes32,100 34,544 (7)%40,010 (20)%102,538 144,282 (29)%
Income tax provision7,941 9,274 (14)%9,961 (20)%27,245 37,090 (27)%
Net income $24,159 $25,270 (4)%$30,049 (20)%$75,293 $107,192 (30)%
Earnings per common share – diluted$0.20 $0.21 $0.25 $0.62 $0.89 
Weighted average shares outstanding – diluted121,159,977 120,939,429 120,374,618 121,027,793 120,249,952 
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
For the Three Months Ended
For the Nine Months Ended
Profitability measures (annualized):9/30/20246/30/20249/30/20239/30/20249/30/2023
Return on average assets (“ROA”) 0.56 %0.59 %0.60 %0.56 %0.72 %
ROA excluding notable items (1)
0.58 %0.62 %0.61 %0.59 %0.72 %
Return on average equity (“ROE”)4.52 %4.82 %5.78 %4.73 %6.92 %
ROE excluding notable items (1)
4.71 %5.07 %5.85 %4.99 %6.94 %
Return on average tangible common equity (“ROTCE”) (1)
5.78 %6.20 %7.47 %6.07 %8.95 %
ROTCE excluding notable items (1)
6.02 %6.53 %7.55 %6.40 %8.98 %
Net interest margin2.55 %2.62 %2.83 %2.57 %2.84 %
Efficiency ratio (not annualized)69.67 %69.26 %60.42 %69.23 %60.23 %
Efficiency ratio excluding notable items (not annualized) (1)
68.44 %67.67 %60.07 %67.62 %60.12 %
(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.


Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended
9/30/20246/30/20249/30/2023
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale$13,574,539 $210,022 6.16 %$13,591,936 $209,683 6.20 %$14,550,106 $229,937 6.27 %
Investment securities2,182,847 16,741 3.05 %2,175,379 16,829 3.11 %2,275,133 17,006 2.97 %
Interest earning cash and deposits at other banks570,754 7,507 5.23 %428,062 5,284 4.96 %2,106,469 28,115 5.30 %
FHLB stock and other investments48,956 814 6.61 %48,463 805 6.68 %47,316 735 6.16 %
Total interest earning assets$16,377,096 $235,084 5.71 %$16,243,840 $232,601 5.76 %$18,979,024 $275,793 5.77 %
 
INTEREST BEARING LIABILITIES:
Deposits:
Money market, interest bearing demand and savings$4,963,727 $50,707 4.06 %$4,948,708 $48,708 3.96 %$4,533,430 $38,814 3.40 %
Time deposits6,053,924 76,486 5.03 %5,921,201 73,869 5.02 %6,862,038 79,040 4.57 %
Total interest bearing deposits11,017,651 127,193 4.59 %10,869,909 122,577 4.54 %11,395,468 117,854 4.10 %
FHLB and FRB borrowings120,326 329 1.09 %219,402 1,430 2.62 %1,809,322 19,821 4.35 %
Subordinated debentures and convertible notes105,152 2,753 10.24 %104,822 2,734 10.32 %103,873 2,740 10.32 %
Total interest bearing liabilities$11,243,129 $130,275 4.61 %$11,194,133 $126,741 4.55 %$13,308,663 $140,415 4.19 %
Noninterest bearing demand deposits3,704,088 3,666,416 4,312,117 
Total funding liabilities/cost of funds$14,947,217 3.47 %$14,860,549 3.43 %$17,620,780 3.16 %
Net interest income/net interest spread$104,809 1.10 %$105,860 1.21 %$135,378 1.58 %
Net interest margin2.55 %2.62 %2.83 %
Cost of deposits:
Noninterest bearing demand deposits$3,704,088 $— — %$3,666,416 $— — %$4,312,117 $— — %
Interest bearing deposits11,017,651 127,193 4.59 %10,869,909 122,577 4.54 %11,395,468 117,854 4.10 %
Total deposits$14,721,739 $127,193 3.44 %$14,536,325 $122,577 3.39 %$15,707,585 $117,854 2.98 %

Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Nine Months Ended
9/30/20249/30/2023
InterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/Average
BalanceExpenseYield/CostBalanceExpenseYield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale$13,637,335 $633,331 6.20 %$14,961,058 $671,543 6.00 %
Investment securities2,224,972 51,619 3.10 %2,255,839 47,665 2.83 %
Interest earning cash and deposits at other banks1,004,606 39,974 5.32 %1,531,561 58,332 5.09 %
FHLB stock and other investments48,520 2,435 6.70 %47,135 2,114 6.00 %
Total interest earning assets$16,915,433 $727,359 5.74 %$18,795,593 $779,654 5.55 %
INTEREST BEARING LIABILITIES:
Deposits:
Money market, interest bearing demand and savings$4,994,958 $149,560 4.00 %$4,871,624 $116,090 3.19 %
Time deposits5,987,121 224,243 5.00 %6,436,645 203,836 4.23 %
Total interest bearing deposits10,982,079 373,803 4.55 %11,308,269 319,926 3.78 %
FHLB and FRB borrowings672,332 19,612 3.90 %1,558,493 50,141 4.30 %
Subordinated debentures and convertible notes104,824 8,228 10.31 %207,050 9,642 6.14 %
Total interest bearing liabilities$11,759,235 $401,643 4.56 %$13,073,812 $379,709 3.88 %
Noninterest bearing demand deposits3,724,716 4,445,740 
Total funding liabilities/cost of funds$15,483,951 3.46 %$17,519,552 2.90 %
Net interest income/net interest spread$325,716 1.18 %$399,945 1.67 %
Net interest margin2.57 %2.84 %
Cost of deposits:
Noninterest bearing demand deposits$3,724,716 $— — %$4,445,740 $— — %
Interest bearing deposits10,982,079 373,803 4.55 %11,308,269 319,926 3.78 %
Total deposits$14,706,795 $373,803 3.40 %$15,754,009 $319,926 2.72 %


Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 Three Months Ended Nine Months Ended
AVERAGE BALANCES:9/30/20246/30/2024% change9/30/2023% change9/30/20249/30/2023% change
Gross loans, including loans held for sale $13,574,539 $13,591,936 — %$14,550,106 (7)%$13,637,335 $14,961,058 (9)%
Investment securities2,182,847 2,175,379 — %2,275,133 (4)%2,224,972 2,255,839 (1)%
Interest earning cash and deposits at other banks570,754 428,062 33 %2,106,469 (73)%1,004,606 1,531,561 (34)%
Interest earning assets16,377,096 16,243,840 1 %18,979,024 (14)%16,915,433 18,795,593 (10)%
Goodwill and intangible assets467,419 467,822 — %469,079 — %467,822 469,525 — %
Total assets17,369,169 17,256,638 1 %20,059,304 (13)%17,920,176 19,875,322 (10)%
Noninterest bearing demand deposits3,704,088 3,666,416 1 %4,312,117 (14)%3,724,716 4,445,740 (16)%
Interest bearing deposits11,017,651 10,869,909 1 %11,395,468 (3)%10,982,079 11,308,269 (3)%
Total deposits14,721,739 14,536,325 1 %15,707,585 (6)%14,706,795 15,754,009 (7)%
Interest bearing liabilities11,243,129 11,194,133 — %13,308,663 (16)%11,759,235 13,073,812 (10)%
Stockholders’ equity2,139,861 2,097,108 2 %2,079,092 3 %2,121,169 2,066,157 3 %
LOAN PORTFOLIO COMPOSITION: 9/30/20246/30/2024% change9/30/2023% change
Commercial real estate (“CRE”) loans$8,630,757 $8,679,515 (1)%$8,972,886 (4)%
Commercial and industrial (“C&I”) loans3,901,368 3,854,284 1 %4,450,341 (12)%
Residential mortgage and other loans1,085,863 1,033,203 5 %882,966 23 %
 Loans receivable13,617,988 13,567,002 — %14,306,193 (5)%
Loans held for sale25,714 68,316 (62)%19,502 32 %
 Gross loans13,643,702 13,635,318 — %14,325,695 (5)%
CRE LOANS BY PROPERTY TYPE:9/30/20246/30/2024% change9/30/2023% change
Multi-tenant retail$1,640,769 $1,659,083 (1)%$1,745,430 (6)%
Industrial warehouses1,244,891 1,249,255 — %1,254,643 (1)%
Multifamily1,204,734 1,199,215 — %1,234,934 (2)%
Gas stations and car washes1,021,537 1,007,680 1 %1,037,621 (2)%
Mixed-use facilities826,045 844,993 (2)%813,571 2 %
Hotels/motels800,707 795,253 1 %826,732 (3)%
Single-tenant retail663,178 655,540 1 %671,921 (1)%
Office396,131 403,861 (2)%454,695 (13)%
All other832,765 864,635 (4)%933,339 (11)%
  Total CRE loans$8,630,757 $8,679,515 (1)%$8,972,886 (4)%
DEPOSIT COMPOSITION:9/30/20246/30/2024% change9/30/2023% change
Noninterest bearing demand deposits$3,722,985 $3,671,192 1 %$4,249,788 (12)%
Money market, interest bearing demand, and savings5,013,305 4,907,860 2 %4,855,683 3 %
Time deposits 5,993,208 6,132,419 (2)%6,634,388 (10)%
  Total deposits$14,729,498 $14,711,471 — %$15,739,859 (6)%

Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)

CAPITAL & CAPITAL RATIOS:9/30/20246/30/20249/30/2023
Total stockholders’ equity$2,169,785 $2,111,282 $2,030,424 
Total capital$2,143,477 $2,137,513 $2,105,754 
Common equity tier 1 ratio13.06 %12.70 %11.67 %
Tier 1 capital ratio 13.78 %13.40 %12.32 %
Total capital ratio 14.80 %14.41 %13.23 %
Leverage ratio 11.61 %11.61 %9.83 %
Total risk weighted assets$14,478,900 $14,828,905 $15,912,792 
Book value per common share$17.97 $17.49 $16.92 
Tangible common equity (“TCE”) per share (1)
$14.10 $13.61 $13.01 
TCE ratio (1)
10.08 %9.72 %7.96 %
(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
ALLOWANCE FOR CREDIT LOSSES CHANGES:Three Months EndedNine Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/20239/30/20249/30/2023
Balance at beginning of period$156,019 $158,758 $158,694 $158,809 $172,996 $158,694 $162,359 
ASU 2022-02 day 1 adoption impact— — — — — — (407)
Provision for credit losses on loans3,000 1,700 3,600 1,700 16,800 8,300 27,400 
Recoveries534 2,099 1,184 306 2,938 3,817 4,856 
Charge offs (6,283)(6,538)(4,720)(2,121)(33,925)(17,541)(35,399)
Balance at end of period$153,270 $156,019 $158,758 $158,694 $158,809 $153,270 $158,809 
9/30/20246/30/20243/31/202412/31/20239/30/2023
Allowance for unfunded loan commitments$2,823 $2,543 $2,843 $3,843 $3,143 
Three Months EndedNine Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/20239/30/20249/30/2023
Provision for credit losses on loans$3,000 $1,700 $3,600 $1,700 $16,800 $8,300 $27,400 
Provision (credit) for unfunded loan commitments280 (300)(1,000)700 62 (1,020)1,792 
Provision for credit losses$3,280 $1,400 $2,600 $2,400 $16,862 $7,280 $29,192 
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)

Three Months EndedNine Months Ended
NET LOAN CHARGE OFFS (RECOVERIES):9/30/20246/30/20243/31/202412/31/20239/30/20239/30/20249/30/2023
CRE loans$372 $514 $(497)$1,560 $(2,227)$389 $(1,898)
C&I loans5,287 3,900 4,072 138 33,145 13,259 32,250 
Residential mortgage and other loans90 25 (39)117 69 76 191 
Net loan charge offs$5,749 $4,439 $3,536 $1,815 $30,987 $13,724 $30,543 
Net charge offs/average loans (annualized)0.17 %0.13 %0.10 %0.05 %0.85 %0.13 %0.27 %

NONPERFORMING ASSETS:9/30/20246/30/20243/31/202412/31/20239/30/2023
Loans on nonaccrual status (1)
$103,602 $67,003 $59,526 $45,204 $39,081 
Accruing delinquent loans past due 90 days or more226 273 47,290 261 21,579 
Total nonperforming loans103,828 67,276 106,816 45,465 60,660 
Other real estate owned (“OREO”)— — — 63 1,043 
Total nonperforming assets$103,828 $67,276 $106,816 $45,528 $61,703 
Nonperforming assets/total assets0.60 %0.39 %0.59 %0.24 %0.31 %
Nonperforming loans/loans receivable0.76 %0.50 %0.78 %0.33 %0.42 %
Nonaccrual loans/loans receivable0.76 %0.49 %0.43 %0.33 %0.27 %
Allowance for credit losses/loans receivable1.13 %1.15 %1.16 %1.15 %1.11 %
Allowance for credit losses/nonperforming loans147.62 %231.91 %148.63 %349.05 %261.80 %
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $13.1 million, $11.2 million, $10.9 million, $11.4 million, and $12.1 million, at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.
NONACCRUAL LOANS BY TYPE:9/30/20246/30/20243/31/202412/31/20239/30/2023
CRE loans$72,228 $27,292 $37,836 $33,932 $26,687 
C&I loans24,963 33,456 15,070 5,013 4,234 
Residential mortgage and other loans6,411 6,255 6,620 6,259 8,160 
   Total nonaccrual loans$103,602 $67,003 $59,526 $45,204 $39,081 
Table Page 8
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:9/30/20246/30/20243/31/202412/31/20239/30/2023
30 - 59 days past due$10,746 $9,073 $2,273 $2,833 $2,906 
60 - 89 days past due1,539 552 313 1,289 506 
   Total accruing delinquent loans 30-89 days past due$12,285 $9,625 $2,586 $4,122 $3,412 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:9/30/20246/30/20243/31/202412/31/20239/30/2023
CRE loans$816 $5,586 $1,639 $2,160 $611 
C&I loans9,037 2,530 551 1,643 1,168 
Residential mortgage and other loans2,432 1,509 396 319 1,633 
   Total accruing delinquent loans 30-89 days past due$12,285 $9,625 $2,586 $4,122 $3,412 
CRITICIZED LOANS:9/30/20246/30/20243/31/202412/31/20239/30/2023
Special mention loans$184,443 $204,167 $215,183 $178,992 $186,600 
Substandard loans314,880 243,635 206,350 143,449 174,161 
Doubtful/loss6,403 — — — — 
   Total criticized loans$505,726 $447,802 $421,533 $322,441 $360,761 
Table Page 9
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)


Reconciliation of GAAP financial measures to non-GAAP financial measures
Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.
TANGIBLE COMMON EQUITY (“TCE”)9/30/20246/30/20249/30/2023
Total stockholders’ equity$2,169,785 $2,111,282 $2,030,424 
Less: Goodwill and core deposit intangible assets, net(467,182)(467,583)(468,832)
TCE$1,702,603 $1,643,699 $1,561,592 
Total assets$17,354,189 $17,375,091 $20,076,364 
Less: Goodwill and core deposit intangible assets, net(467,182)(467,583)(468,832)
Tangible assets$16,887,007 $16,907,508 $19,607,532 
TCE ratio10.08 %9.72 %7.96 %
Common shares outstanding120,737,908 120,731,342 120,026,220 
TCE per share$14.10 $13.61 $13.01 
Three Months EndedNine Months Ended
RETURN ON AVERAGE TANGIBLE COMMON EQUITY9/30/20246/30/20249/30/20239/30/20249/30/2023
Average stockholders’ equity$2,139,861 $2,097,108 $2,079,092 $2,121,169 $2,066,157 
Less: Average goodwill and core deposit intangible assets, net(467,419)(467,822)(469,079)(467,822)(469,525)
Average TCE$1,672,442 $1,629,286 $1,610,013 $1,653,347 $1,596,632 
Net income$24,159 $25,270 $30,049 $75,293 $107,192 
ROTCE (annualized)5.78 %6.20 %7.47 %6.07 %8.95 %
Table Page 10
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Three Months EndedNine Months Ended
PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS9/30/20246/30/20249/30/20239/30/20249/30/2023
Net income$24,159 $25,270 $30,049 $75,293 $107,192 
Notable items:
FDIC special assessment expense— (309)— 691 — 
Restructuring-related costs197 576 500 1,175 500 
Merger-related costs1,236 1,589 — 3,869 — 
Total notable items1,433 1,856 500 5,735 500 
Less: tax provision421 547 147 1,687 147 
Total notable items, net of tax provision$1,012 $1,309 $353 $4,048 $353 
Net income excluding notable items$25,171 $26,579 $30,402 $79,341 $107,545 
Diluted common shares121,159,977 120,939,429 120,374,618 121,027,793 120,249,952 
EPS excluding notable items$0.21 $0.22 $0.25 $0.66 $0.89 
Average Assets$17,369,169 $17,256,638 $20,059,304 $17,920,176 $19,875,322 
ROA excluding notable items0.58 %0.62 %0.61 %0.59 %0.72 %
Average Equity$2,139,861 $2,097,108 $2,079,092 $2,121,169 $2,066,157 
ROE excluding notable items4.71 %5.07 %5.85 %4.99 %6.94 %
Average TCE$1,672,442 $1,629,286 $1,610,013 $1,653,347 $1,596,632 
ROTCE excluding notable items6.02 %6.53 %7.55 %6.40 %8.98 %
Three Months EndedNine Months Ended
EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS9/30/20246/30/20249/30/20239/30/20249/30/2023
Noninterest expense$81,268 $80,987 $86,811 $247,094 $262,768 
Less: notable items:
FDIC special assessment expense— 309 — (691)— 
Restructuring-related costs(197)(576)(500)(1,175)(500)
Merger-related costs(1,236)(1,589)— (3,869)— 
Noninterest expense excluding notable items$79,835 $79,131 $86,311 $241,359 $262,268 
Revenue$116,648 $116,931 $143,683 $356,912 $436,242 
Efficiency ratio excluding notable items68.44 %67.67 %60.07 %67.62 %60.12 %
Table Page 11