News Release
Contact:
Angie Yang
SVP, Director of Investor Relations &
Corporate Communications
213-251-2219
angie.yang@bankofhope.com
HOPE BANCORP REPORTS 2017 SECOND QUARTER FINANCIAL RESULTS
Q2 2017 Highlights:
▪ | $725.1 million in new loan originations funded during the quarter, up 23% over 1Q 2017 |
▪ | Loans receivable increase 3% to $10.82 billion, or 10% on an annualized basis |
▪ | Total deposits increase 2% to $10.96 billion, despite consolidation of 9 additional branches during 2017 |
▪ | Total assets increase 3% to $13.86 billion, or 11% on an annualized basis |
▪ | Net income totals $40.7 million, or $0.30 per diluted common share |
LOS ANGELES - July 25, 2017 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for three- and six-month periods ended June 30, 2017.
The mergers of Wilshire Bancorp, Inc. (“Wilshire”) with and into BBCN Bancorp, Inc. (“BBCN”) and Wilshire Bank with and into BBCN Bank were completed on July 29, 2016, and the combined companies began operations under the new banners of Hope Bancorp, Inc. and Bank of Hope, respectively, effective July 30, 2016. The 2017 second quarter and first quarter financial results reflect full quarters of combined operations. The 2016 second quarter reflects stand-alone operations of the former BBCN. As a result, the Company’s 2017 second quarter may not be comparable to financial results for the year-ago second quarter.
For the three months ended June 30, 2017, net income increased 12% to $40.7 million, or $0.30 per diluted common share, based on 135,613,181 weighted average diluted shares outstanding, and included pre-tax merger-related expenses of $562,000. This compares with 2017 first quarter net income of $36.2 million, or $0.27 per diluted common share, based on 135,768,645 weighted average diluted shares outstanding, and included $947,000 in pre-tax merger-related expenses. For the 2016 second quarter, net income for BBCN on a stand-alone basis totaled $23.4 million, or $0.29 per diluted common share, based on 79,634,762 weight average diluted shares outstanding, and included pre-tax merger-related expenses of $1.5 million.
“The momentum that we achieved in the beginning of 2017 continued to build into the second quarter, with new loan fundings of $725 million and growth in our loans receivable during the quarter of $267 million, or 10% on an annualized basis,” said Kevin S. Kim, President and Chief Executive Officer. “Despite the consolidation of nine additional branches in 2017, we grew our deposit base by $251 million during the second quarter, or 9% on an annualized basis. We are also pleased with the improved pricing of new loan originations, with the average rate on new loans during the second quarter increasing 31 basis points from the immediately preceding first quarter to 4.56%.
“As we approach our one-year anniversary of the creation of the only super regional Korean-American bank in the United States, we express our deepest appreciation and commitment to all of our stakeholders. With the physical integration completed and strong momentum building in our business expansion efforts, we believe we are well poised to deliver even greater returns in the years ahead,” said Kim.
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Financial Highlights
(dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | ||||||||||
6/30/2017 | 3/31/2017 | 6/30/2016 | |||||||||
Net income | $ | 40,687 | $ | 36,210 | $ | 23,390 | |||||
Diluted earnings per share | $ | 0.30 | $ | 0.27 | $ | 0.29 | |||||
Net interest income before provision for loan losses | $ | 116,820 | $ | 114,905 | $ | 71,064 | |||||
Net interest margin | 3.75 | % | 3.77 | % | 3.67 | % | |||||
Noninterest income | $ | 16,115 | $ | 17,603 | $ | 10,707 | |||||
Noninterest expense | $ | 64,037 | $ | 67,699 | $ | 40,348 | |||||
Net loans receivable | $ | 10,736,345 | $ | 10,471,008 | $ | 6,507,812 | |||||
Deposits | $ | 10,955,101 | $ | 10,703,777 | $ | 6,637,522 | |||||
Nonaccrual loans (1) | $ | 47,361 | $ | 37,009 | $ | 42,398 | |||||
ALLL to loans receivable | 0.74 | % | 0.75 | % | 1.16 | % | |||||
ALLL to nonaccrual loans (1) | 169.07 | % | 212.54 | % | 180.26 | % | |||||
ALLL to nonperforming assets (1) (2) | 64.40 | % | 74.65 | % | 69.62 | % | |||||
Provision for loan losses | $ | 2,760 | $ | 5,600 | $ | 1,200 | |||||
Net charge offs | $ | 1,345 | $ | 6,284 | $ | 1,631 | |||||
Return on assets (“ROA”) | 1.21 | % | 1.09 | % | 1.15 | % | |||||
Return on equity (“ROE”) | 8.60 | % | 7.75 | % | 9.67 | % | |||||
Efficiency ratio | 48.17 | % | 51.09 | % | 49.34 | % | |||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.5 million, $15.2 million and $15.5 million at June 30, 2017, March 31, 2017 and June 30, 2016, respectively.
(2) Nonperforming assets exclude purchased credit-impaired loans totaling $16.3 million, $17.3 million and $13.8 million at June 30, 2017, March 31, 2017 and June 30, 2016, respectively.
Operating Results for the 2017 Second Quarter
The comparability of Hope Bancorp’s operating results with past performance is impacted by acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions. The Company provides the following supplemental information to facilitate a better understanding of financial performance. Net interest income and operating income for the three months ended June 30, 2017, March 31, 2017 and June 30, 2016 include the following pre-tax acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions:
(dollars in thousands) (unaudited) | Three Months Ended | ||||||||||
6/30/2017 | 3/31/2017 | 6/30/2016 | |||||||||
Accretion on purchased non-impaired loans | $ | 3,501 | $ | 2,676 | $ | 898 | |||||
Accretion on purchased credit-impaired loans | 5,212 | 5,348 | 1,436 | ||||||||
Amortization of premium on low income housing tax credits | (85 | ) | (84 | ) | — | ||||||
Amortization of premium on acquired FHLB borrowings | 446 | 441 | 97 | ||||||||
Accretion of discount on acquired subordinated debt | (260 | ) | (259 | ) | (44 | ) | |||||
Amortization of premium on acquired time deposits and savings | 1,218 | 3,476 | 19 | ||||||||
Amortization of core deposit intangibles | (676 | ) | (676 | ) | (212 | ) | |||||
Total acquisition accounting adjustments | $ | 9,356 | $ | 10,922 | $ | 2,194 | |||||
Merger-related expenses | (562 | ) | (947 | ) | (1,533 | ) | |||||
Total | $ | 8,794 | $ | 9,975 | $ | 661 | |||||
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Net Interest Income. Net interest income before provision for loan losses for the 2017 second quarter increased 2% to $116.8 million from $114.9 million in the immediately preceding first quarter, largely reflecting higher levels of interest and fee income on a larger loan portfolio, partially offset by higher deposit costs. In the year-ago second quarter, net interest income before provision for loan losses amounted to $71.1 million for BBCN on a stand-alone basis.
The net interest margin (net interest income divided by average interest earning assets) for the 2017 second quarter declined 2 basis points to 3.75% from 3.77% in the 2017 first quarter, largely due to higher funding costs. Compared with the year-ago second quarter for BBCN on a stand-alone basis, net interest margin increased 8 basis points.
The weighted average yield on loans for the 2017 second quarter increased 7 basis points to 4.89% from 4.82% in the 2017 first quarter. Compared with the 2016 second quarter for BBCN on a stand-alone basis, the weighted average yield on loans increased 9 basis points.
The weighted average yield on new loans originated during the 2017 second quarter improved 31 basis points to 4.56% from 4.25% in the 2017 first quarter. The weighted average yield on new loans in the year-ago first quarter for BBCN on a stand-alone basis was 4.28%.
The weighted average cost of deposits for the 2017 second quarter increased 13 basis points to 0.68% from 0.55% in the 2017 first quarter. In addition to the recent interest rate hikes, the Company noted that deposit premiums for Wilshire were fully amortized in April, which resulted in a significant reduction in the benefit from acquisition accounting. Compared with the year-ago second quarter for BBCN on a stand-alone basis, the weighted average cost of deposits increased 4 basis points.
Noninterest Income. Noninterest income for the 2017 second quarter declined to $16.1 million from $17.6 million in the 2017 first quarter, largely reflecting higher-than-usual swap fee income and recoveries on pre-merger, fully charged off acquired loans in the immediately preceding first quarter. Swap fee income amounted to $481,000 in the 2017 second quarter, versus $963,000 in the 2017 first quarter. The Company recognized recoveries on pre-merger, fully charged off acquired loans of $210,000 in the 2017 second quarter, compared with $1.1 million in the 2017 first quarter. Noninterest income for BBCN on a stand-alone basis was $10.7 million in the year-ago second quarter.
Noninterest Expense. Noninterest expense declined to $64.0 million in the 2017 second quarter from $67.7 million in the 2017 first quarter, largely reflecting linked-quarter reductions in expenses related to the consolidation of nine additional branches since late March 2017. In addition, the Company’s 2017 first quarter noninterest expenses included higher-than-usual advertising and marketing costs associated with Bank of Hope’s title sponsorship of an LPGA event and elevated levels of credit-related expenses due to the amount of charge offs in the first quarter. In the 2016 second quarter, total noninterest expense amounted to $40.3 million for BBCN on a stand-alone basis.
Salaries and employee benefits expense for the 2017 second quarter increased 2% to $34.9 million from $34.2 million for the immediately preceding first quarter. For BBCN on a stand-alone basis in the 2016 second quarter, salaries and employee benefits expense amounted to $21.8 million. The total number of FTEs, excluding employees on leave, as of June 30, 2017 was 1,378, up from 1,352 as of March 31, 2017. At June 30, 2016, the total number of FTEs for the former BBCN was 918.
Income Tax Provision. The effective tax rate for the 2017 second quarter was 38.5%, compared with 38.8% for the preceding 2017 first quarter and 41.8% for the second quarter a year ago for BBCN on a stand-alone basis.
Balance Sheet Summary
Loans receivable increased 3% to $10.82 billion at June 30, 2017 from $10.55 billion at March 31, 2017, reflecting a 10% annualized growth rate. At June 30, 2016, loans receivable for BBCN on a stand-alone basis amounted to $6.58 billion.
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Total new loan originations during the 2017 second quarter amounted to $725.1 million and included SBA loan production of $109.4 million and residential mortgage loan originations of $70.8 million. The Company also purchased a $10.4 million pool of seasoned, adjustable rate residential loans.
Sales of SBA loans to the secondary market and gains derived from those sales are based substantially on the production of SBA 7(a) loans. SBA 7(a) loan originations totaled $65.5 million for the second quarter of 2017, compared with $51.9 million for the first quarter of 2017 and $56.7 million for the year-ago second quarter for BBCN on a stand-alone basis. During the 2017 second quarter, the Company sold $46.1 million of its SBA loans held for sale, compared with $44.9 million in the immediately preceding first quarter and $39.6 million in the second quarter a year ago for BBCN on a stand-alone basis.
Aggregate pay offs and pay downs in the 2017 second quarter amounted to $432.1 million, compared with $414.6 million for the immediately preceding first quarter. In the year-ago second quarter, aggregate pay offs and paydowns for BBCN on a stand-alone basis totaled $235.6 million.
Total deposits at June 30, 2017 increased 2% to $10.96 billion from $10.70 billion at March 31, 2017, notwithstanding the consolidation of nine additional branches during the first half of the year. The increase in deposits reflects higher balances in noninterest bearing deposits, money market accounts and time deposits under $100,000. Total deposits at June 30, 2016 for the stand-alone BBCN amounted to $6.64 billion.
Credit Quality
The provision for loan and lease losses for the 2017 second quarter was $2.8 million, compared with $5.6 million for the immediately preceding first quarter and $1.2 million for the year-ago second quarter for BBCN on a stand-alone basis.
For a more detailed understanding of the changes in the allowance for loan and lease losses (“ALLL”), the composition of the ALLL has been segmented for disclosure purposes between loans accounted for under the amortized cost method (referred to as “legacy loans”) and loans acquired through the Wilshire Bancorp, Center Financial, Pacific International and Foster Bankshares transactions (referred to as “purchased loans”). The purchased loans are further segregated between non-impaired and credit-impaired loans.
The composition of the ALLL as of June 30, 2017, March 31, 2017 and June 30, 2016 is as follows:
(dollars in thousands) (unaudited) | 6/30/2017 | 3/31/2017 | 6/30/2016 | ||||||||
Legacy loans (1) | $ | 65,255 | $ | 64,055 | $ | 63,616 | |||||
Purchased non-impaired loans (2) | 2,753 | 2,468 | 860 | ||||||||
Purchased credit-impaired loans (2) | 12,066 | 12,136 | 11,949 | ||||||||
Total ALLL | $ | 80,074 | $ | 78,659 | $ | 76,425 | |||||
Loans receivable | $ | 10,816,419 | $ | 10,549,667 | $ | 6,584,237 | |||||
ALLL coverage ratio | 0.74 | % | 0.75 | % | 1.16 | % | |||||
(1) | Legacy loans include loans originated by the Bank’s predecessor bank, loans originated by Bank of Hope and loans that were acquired and that have been refinanced as new loans. |
(2) | Purchased loans were marked to fair value at acquisition date, and the ALLL reflects provisions for credit deterioration since the acquisition date. |
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Following are the components of criticized loan balances as of June 30, 2017, March 31, 2017 and June 30, 2016:
(dollars in thousands) (unaudited) | 6/30/2017 | 3/31/2017 | 6/30/2016 | |||||
Special Mention (1) | $ | 251,056 | $ | 225,968 | $ | 100,370 | ||
Classified (1) | 315,439 | 309,996 | 198,857 | |||||
Criticized | $ | 566,495 | $ | 535,964 | $ | 299,227 | ||
(1) | Balances include purchased loans which were marked to fair value on the date of acquisition. |
The Company defines nonperforming loans to include delinquent loans past due 90 days or more on nonaccrual status, delinquent loans past due 90 days or more on accrual status (excluding purchased credit-impaired loans) and accruing restructured loans. Nonaccrual loans at June 30, 2017 increased to $47.4 million, or 0.44% of loans receivable, from $37.0 million, or 0.35% of loans receivable, at March 31, 2017 and $42.4 million, or 0.64% of loans receivable, at June 30, 2016 for BBCN on a stand-alone basis. Accruing restructured loans totaled $53.3 million at June 30, 2017, compared with $49.0 million at March 31, 2017 and $50.8 million at June 30, 2016 for BBCN on a stand-alone basis. Total nonperforming loans at June 30, 2017 increased to $102.5 million, or 0.95% of loans receivable, from $86.3 million, or 0.82% of loans receivable, at March 31, 2017 and $93.4 million, or 1.42% of loans receivable, at June 30, 2016.
Nonperforming assets, including nonperforming loans and OREO, increased to $124.3 million at June 30, 2017 from $105.4 million at March 31, 2017 and $109.8 million at June 30, 2016 for BBCN on a stand-alone basis. As a percentage of total assets, nonperforming assets was 0.90% at June 30, 2017, 0.78% at March 31, 2017 and 1.32% at June 30, 2016 for BBCN on a stand-alone basis.
For the 2017 second quarter, net charge offs totaled $1.3 million, or 0.05% of average loans receivable on an annualized basis. This compares with 2017 first quarter net charge offs of $6.3 million, or 0.24% of average loans receivable on an annualized basis, and $1.6 million, or 0.10% of average loans receivable on an annualized basis, for the year-ago second quarter.
The ALLL at June 30, 2017 was $80.1 million, or 0.74% of loans receivable (excluding loans held for sale), compared with $78.7 million, or 0.75% of loans receivable (excluding loans held for sale), at March 31, 2017 and $76.4 million of loans receivable (excluding loans held for sale), or 1.16%, at June 30, 2016 for BBCN on a stand-alone basis. The coverage ratio of the ALLL to nonperforming loans (excluding purchased credit-impaired loans) was 78.12% at June 30, 2017, versus 91.18% at March 31, 2017 and 81.84% at June 30, 2016 for BBCN on a stand-alone basis.
Impaired loans (defined as loans for which it is probable that not all principal and interest payments due will be collected in accordance with the contractual terms) declined to $100.7 million at June 30, 2017 from $129.6 million at March 31, 2017 and $136.6 million at June 30, 2016 for BBCN on a stand-alone basis.
Capital
At June 30, 2017, the Company continued to exceed all regulatory capital requirements to be generally classified as a “well-capitalized” financial institution, as summarized in the following table:
6/30/2017 | 3/31/2017 | 6/30/2016 | Minimum Guideline for “Well-Capitalized” Institution | ||||
Common Equity Tier 1 Capital | 12.18% | 12.22% | 11.66% | 6.50% | |||
Tier 1 Leverage Ratio | 11.80% | 11.72% | 11.14% | 5.00% | |||
Tier 1 Risk-based Ratio | 13.00% | 13.05% | 12.22% | 8.00% | |||
Total Risk-based Ratio | 13.70% | 13.76% | 13.28% | 10.00% | |||
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Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:
6/30/2017 | 3/31/2017 | 6/30/2016 | |||
Tangible common equity per share (1) | $10.52 | $10.32 | $10.85 | ||
Tangible common equity to tangible assets (1) | 10.64% | 10.74% | 10.50% | ||
(1) | Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and net other intangible assets divided by total assets less goodwill and net other intangible assets. 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. The accompanying financial information includes a reconciliation of the ratio of tangible common equity to tangible assets with stockholders’ equity to total assets. |
Investor Conference Call
The Company will host an investor conference call on Wednesday, July 26, 2017 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the second quarter ended June 30, 2017. 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.” 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 at www.ir-hopebancorp.com. 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 August 2, 2017, replay access code 10109988.
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 $13.9 billion in total assets as of June 30, 2017. Formed through the merger of BBCN Bank and Wilshire Bank on July 29, 2016, the top two commercial lenders in the market, Bank of Hope is headquartered in Los Angeles and serves a multi-ethnic population of customers across the nation. Bank of Hope operates 64 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, and Portland, Oregon; a commercial loan production office in Fremont, California; residential mortgage loan production offices in 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, the registrant does not intent to and shall not be deemed to incorporate by reference any material contained 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. Our 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: the inability to consummate our proposed merger with U & I Financial Corp. on the terms we have proposed or at all; failure to realize the benefits from the merger with
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U & I Financial Corp. that we currently expect if the merger is consummated; the Company’s inability to remediate its presently identified material weaknesses or to do so in a timely manner, the possibility that additional material weaknesses may arise in the future, and that a material weakness may have an impact on our reported financial results; possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; and regulatory risks associated with current and future regulations. For additional information concerning these and other risk factors, see Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2016 and Part II, Item 1A., Risk Factors, contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. 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
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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)
Assets | 6/30/2017 | 3/31/2017 | % change | 12/31/2016 | % change | 6/30/2016 | % change | |||||||||||||||||
Cash and due from banks | $ | 446,415 | $ | 461,068 | (3 | )% | $ | 437,334 | 2 | % | $ | 286,173 | 56 | % | ||||||||||
Securities available for sale, at fair value | 1,680,382 | 1,583,946 | 6 | % | 1,556,740 | 8 | % | 1,099,944 | 53 | % | ||||||||||||||
Federal Home Loan Bank (“FHLB”), Federal Reserve Bank (“FRB”) stock and other investments | 66,313 | 65,161 | 2 | % | 66,166 | — | % | 63,429 | 5 | % | ||||||||||||||
Loans held for sale, at the lower of cost or fair value | 16,927 | 19,141 | (12 | )% | 22,785 | (26 | )% | 14,323 | 18 | % | ||||||||||||||
Loans receivable | 10,816,419 | 10,549,667 | 3 | % | 10,543,332 | 3 | % | 6,584,237 | 64 | % | ||||||||||||||
Allowance for loan losses | (80,074 | ) | (78,659 | ) | (2 | )% | (79,343 | ) | (1 | )% | (76,425 | ) | (5 | )% | ||||||||||
Net loans receivable | 10,736,345 | 10,471,008 | 3 | % | 10,463,989 | 3 | % | 6,507,812 | 65 | % | ||||||||||||||
Accrued interest receivable | 25,640 | 25,683 | — | % | 26,880 | (5 | )% | 15,787 | 62 | % | ||||||||||||||
Premises held for sale, at fair value | — | 3,300 | (100 | )% | — | — | % | — | — | % | ||||||||||||||
Premises and equipment, net | 52,565 | 51,125 | (3 | )% | 55,316 | (5 | )% | 37,663 | 40 | % | ||||||||||||||
Bank owned life insurance | 74,113 | 74,090 | — | % | 73,696 | 1 | % | 47,562 | 56 | % | ||||||||||||||
Goodwill | 464,450 | 463,975 | — | % | 462,997 | — | % | 105,401 | 341 | % | ||||||||||||||
Servicing assets | 25,338 | 25,941 | (2 | )% | 26,457 | (4 | )% | 12,193 | 108 | % | ||||||||||||||
Other intangible assets, net | 17,874 | 18,550 | (4 | )% | 19,226 | (7 | )% | 2,395 | 646 | % | ||||||||||||||
Other assets | 252,855 | 218,441 | 16 | % | 229,836 | 10 | % | 144,144 | 75 | % | ||||||||||||||
Total assets | $ | 13,859,217 | $ | 13,481,429 | 3 | % | $ | 13,441,422 | 3 | % | $ | 8,336,826 | 66 | % | ||||||||||
Liabilities | ||||||||||||||||||||||||
Deposits | $ | 10,955,101 | $ | 10,703,777 | 2 | % | $ | 10,642,035 | 3 | % | $ | 6,637,522 | 65 | % | ||||||||||
Borrowings from FHLB | 793,403 | 703,850 | 13 | % | 754,290 | 5 | % | 610,398 | 30 | % | ||||||||||||||
Subordinated debentures | 100,328 | 100,067 | — | % | 99,808 | 1 | % | 42,415 | 137 | % | ||||||||||||||
Accrued interest payable | 11,855 | 10,592 | 12 | % | 10,863 | 9 | % | 7,164 | 65 | % | ||||||||||||||
Other liabilities | 92,236 | 85,096 | 8 | % | 78,953 | 17 | % | 67,587 | 36 | % | ||||||||||||||
Total liabilities | 11,952,923 | 11,603,382 | 3 | % | 11,585,949 | 3 | % | 7,365,086 | 62 | % | ||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||||||
Common stock, $0.001 par value; authorized, 150,000,000 shares at June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016 | $ | 135 | $ | 135 | — | % | $ | 135 | — | % | $ | 80 | 69 | % | ||||||||||
Capital surplus | 1,402,303 | 1,401,275 | — | % | 1,400,490 | — | % | 541,688 | 159 | % | ||||||||||||||
Retained earnings | 513,945 | 489,486 | 5 | % | 469,505 | 9 | % | 418,998 | 23 | % | ||||||||||||||
Accumulated other comprehensive income (loss), net | (10,089 | ) | (12,849 | ) | 21 | % | (14,657 | ) | 31 | % | 10,974 | (192 | )% | |||||||||||
Total stockholders’ equity | 1,906,294 | 1,878,047 | 2 | % | 1,855,473 | 3 | % | 971,740 | 96 | % | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 13,859,217 | $ | 13,481,429 | 3 | % | $ | 13,441,422 | 3 | % | $ | 8,336,826 | 66 | % | ||||||||||
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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
6/30/2017 | 3/31/2017 | % change | 6/30/2016 | % change | 6/30/2017 | 6/30/2016 | % change | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Interest and fees on loans | $ | 128,515 | $ | 123,294 | 4 | % | $ | 77,086 | 67 | % | $ | 251,809 | $ | 154,204 | 63 | % | ||||||||||||
Interest on securities | 8,741 | 8,113 | 8 | % | 5,729 | 53 | % | 16,854 | 11,406 | 48 | % | |||||||||||||||||
Interest on federal funds sold and other investments | 1,277 | 1,336 | (4 | )% | 719 | 78 | % | 2,613 | 1,385 | 89 | % | |||||||||||||||||
Total interest income | 138,533 | 132,743 | 4 | % | 83,534 | 66 | % | 271,276 | 166,995 | 62 | % | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Interest on deposits | 18,114 | 14,511 | 25 | % | 10,352 | 75 | % | 32,625 | 20,259 | 61 | % | |||||||||||||||||
Interest on other borrowings | 3,599 | 3,327 | 8 | % | 2,118 | 70 | % | 6,926 | 4,065 | 70 | % | |||||||||||||||||
Total interest expense | 21,713 | 17,838 | 22 | % | 12,470 | 74 | % | 39,551 | 24,324 | 63 | % | |||||||||||||||||
Net interest income before provision for loan losses | 116,820 | 114,905 | 2 | % | 71,064 | 64 | % | 231,725 | 142,671 | 62 | % | |||||||||||||||||
Provision for loan losses | 2,760 | 5,600 | (51 | )% | 1,200 | 130 | % | 8,360 | 1,700 | 392 | % | |||||||||||||||||
Net interest income after provision for loan losses | 114,060 | 109,305 | 4 | % | 69,864 | 63 | % | 223,365 | 140,971 | 58 | % | |||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Service fees on deposit accounts | 5,179 | 5,338 | (3 | )% | 2,902 | 78 | % | 10,517 | 5,585 | 88 | % | |||||||||||||||||
Net gains on sales of SBA loans | 3,267 | 3,250 | 1 | % | 3,035 | 8 | % | 6,517 | 4,860 | 34 | % | |||||||||||||||||
Net gains on sales of other loans | 352 | 420 | (16 | )% | 43 | 719 | % | 772 | 43 | 1,695 | % | |||||||||||||||||
Net gains on sales of securities available for sale | — | — | — | % | — | — | % | — | — | — | % | |||||||||||||||||
Other income and fees | 7,317 | 8,595 | (15 | )% | 4,727 | 55 | % | 15,912 | 8,994 | 77 | % | |||||||||||||||||
Total noninterest income | 16,115 | 17,603 | (8 | )% | 10,707 | 51 | % | 33,718 | 19,482 | 73 | % | |||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 34,946 | 34,166 | 2 | % | 21,757 | 61 | % | 69,112 | 43,326 | 60 | % | |||||||||||||||||
Occupancy | 7,154 | 7,194 | (1 | )% | 4,920 | 45 | % | 14,348 | 9,737 | 47 | % | |||||||||||||||||
Furniture and equipment | 3,556 | 3,413 | 4 | % | 2,337 | 52 | % | 6,969 | 4,624 | 51 | % | |||||||||||||||||
Advertising and marketing | 2,394 | 3,424 | (30 | )% | 1,402 | 71 | % | 5,818 | 2,538 | 129 | % | |||||||||||||||||
Data processing and communications | 2,676 | 3,606 | (26 | )% | 2,129 | 26 | % | 6,282 | 4,300 | 46 | % | |||||||||||||||||
Professional fees | 3,260 | 3,902 | (16 | )% | 1,273 | 156 | % | 7,162 | 2,356 | 204 | % | |||||||||||||||||
FDIC assessment | 1,004 | 1,010 | (1 | )% | 1,095 | (8 | )% | 2,014 | 2,133 | (6 | )% | |||||||||||||||||
Credit related expenses | 113 | 1,883 | (94 | )% | 911 | (88 | )% | 1,996 | 1,332 | 50 | % | |||||||||||||||||
Other real estate owned (“OREO”) expense, net | 1,188 | 997 | 19 | % | 133 | 793 | % | 2,185 | 1,561 | 40 | % | |||||||||||||||||
Merger-related expenses | 562 | 947 | (41 | )% | 1,533 | (63 | )% | 1,509 | 2,740 | (45 | )% | |||||||||||||||||
Other | 7,184 | 7,157 | — | % | 2,858 | 151 | % | 14,341 | 5,750 | 149 | % | |||||||||||||||||
Total noninterest expense | 64,037 | 67,699 | (5 | )% | 40,348 | 59 | % | 131,736 | 80,397 | 64 | % | |||||||||||||||||
Income before income taxes | 66,138 | 59,209 | 12 | % | 40,223 | 64 | % | 125,347 | 80,056 | 57 | % | |||||||||||||||||
Income tax provision | 25,451 | 22,999 | 11 | % | 16,833 | 51 | % | 48,450 | 33,043 | 47 | % | |||||||||||||||||
Net income | $ | 40,687 | $ | 36,210 | 12 | % | $ | 23,390 | 74 | % | $ | 76,897 | $ | 47,013 | 64 | % | ||||||||||||
Earnings Per Common Share: | ||||||||||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.27 | $ | 0.29 | $ | 0.57 | $ | 0.59 | ||||||||||||||||||
Diluted | $ | 0.30 | $ | 0.27 | $ | 0.29 | $ | 0.57 | $ | 0.59 | ||||||||||||||||||
Average Shares Outstanding: | ||||||||||||||||||||||||||||
Basic | 135,257,044 | 135,248,018 | 79,604,673 | 135,252,556 | 79,595,599 | |||||||||||||||||||||||
Diluted | 135,613,181 | 135,768,645 | 79,634,762 | 135,685,064 | 79,625,673 | |||||||||||||||||||||||
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
For the Three Months Ended (Annualized) | For the Six Months Ended (Annualized) | |||||||||||||
Profitability measures: | 6/30/2017 | 3/31/2017 | 6/30/2016 | 6/30/2017 | 6/30/2016 | |||||||||
ROA | 1.21 | % | 1.09 | % | 1.15 | % | 1.15 | % | 1.17 | % | ||||
ROE | 8.60 | % | 7.75 | % | 9.67 | % | 8.18 | % | 9.83 | % | ||||
Return on average tangible equity 1 | 11.54 | % | 10.44 | % | 10.88 | % | 11.00 | % | 11.08 | % | ||||
Net interest margin | 3.75 | % | 3.77 | % | 3.67 | % | 3.76 | % | 3.75 | % | ||||
Efficiency ratio | 48.17 | % | 51.09 | % | 49.34 | % | 49.63 | % | 49.58 | % | ||||
1 Average tangible equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. | ||||||||||||||
Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
6/30/2017 | 3/31/2017 | 6/30/2016 | ||||||||||||||||||||||||||||||
Interest | Annualized | Interest | Annualized | Interest | Annualized | |||||||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 10,536,428 | $ | 128,515 | 4.89 | % | $ | 10,381,771 | $ | 123,294 | 4.82 | % | $ | 6,457,883 | $ | 77,086 | 4.80 | % | ||||||||||||||
Securities available for sale | 1,609,310 | 8,741 | 2.18 | % | 1,567,497 | 8,113 | 2.10 | % | 1,089,080 | 5,729 | 2.10 | % | ||||||||||||||||||||
FRB and FHLB stock and other investments | 364,906 | 1,277 | 1.40 | % | 423,955 | 1,336 | 1.28 | % | 237,872 | 719 | 1.20 | % | ||||||||||||||||||||
Total interest earning assets | $ | 12,510,644 | $ | 138,533 | 4.44 | % | $ | 12,373,223 | $ | 132,743 | 4.35 | % | $ | 7,784,835 | $ | 83,534 | 4.32 | % | ||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 3,457,412 | $ | 7,974 | 0.93 | % | $ | 3,436,984 | $ | 7,191 | 0.85 | % | $ | 2,030,272 | $ | 4,147 | 0.82 | % | ||||||||||||||
Savings | 280,188 | 279 | 0.40 | % | 293,609 | 287 | 0.40 | % | 178,249 | 285 | 0.64 | % | ||||||||||||||||||||
Time deposits | 4,012,838 | 9,861 | 0.99 | % | 4,009,179 | 7,033 | 0.71 | % | 2,636,652 | 5,920 | 0.90 | % | ||||||||||||||||||||
Total interest bearing deposits | 7,750,438 | 18,114 | 0.94 | % | 7,739,772 | 14,511 | 0.76 | % | 4,845,173 | 10,352 | 0.86 | % | ||||||||||||||||||||
FHLB advances | 713,858 | 2,339 | 1.31 | % | 662,472 | 2,139 | 1.31 | % | 564,637 | 1,686 | 1.20 | % | ||||||||||||||||||||
Other borrowings | 96,218 | 1,260 | 5.18 | % | 95,911 | 1,188 | 4.95 | % | 40,861 | 432 | 4.18 | % | ||||||||||||||||||||
Total interest bearing liabilities | 8,560,514 | $ | 21,713 | 1.02 | % | 8,498,155 | $ | 17,838 | 0.85 | % | 5,450,671 | $ | 12,470 | 0.92 | % | |||||||||||||||||
Noninterest bearing demand deposits | 2,929,656 | 2,868,339 | 1,671,986 | |||||||||||||||||||||||||||||
Total funding liabilities/cost of funds | $ | 11,490,170 | 0.76 | % | $ | 11,366,494 | 0.64 | % | $ | 7,122,657 | 0.70 | % | ||||||||||||||||||||
Net interest income/net interest spread | $ | 116,820 | 3.42 | % | $ | 114,905 | 3.50 | % | $ | 71,064 | 3.39 | % | ||||||||||||||||||||
Net interest margin | 3.75 | % | 3.77 | % | 3.67 | % | ||||||||||||||||||||||||||
Cost of deposits: | ||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 2,929,656 | $ | — | $ | 2,868,339 | $ | — | $ | 1,671,986 | $ | — | ||||||||||||||||||||
Interest bearing deposits | 7,750,438 | 18,114 | 0.94 | % | 7,739,772 | 14,511 | 0.76 | % | 4,845,173 | 10,352 | 0.86 | % | ||||||||||||||||||||
Total deposits | $ | 10,680,094 | $ | 18,114 | 0.68 | % | $ | 10,608,111 | $ | 14,511 | 0.55 | % | $ | 6,517,159 | $ | 10,352 | 0.64 | % | ||||||||||||||
Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Six Months Ended | Six Months Ended | ||||||||||||||||||||
6/30/2017 | 6/30/2016 | ||||||||||||||||||||
Interest | Annualized | Interest | Annualized | ||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||
INTEREST EARNING ASSETS: | |||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 10,459,527 | $ | 251,809 | 4.85 | % | $ | 6,363,656 | $ | 154,204 | 4.87 | % | |||||||||
Securities available for sale | 1,588,519 | 16,854 | 2.14 | % | 1,052,972 | 11,406 | 2.17 | % | |||||||||||||
FRB and FHLB stock and other investments | 394,267 | 2,613 | 1.34 | % | 227,460 | 1,385 | 1.20 | % | |||||||||||||
Total interest earning assets | $ | 12,442,313 | $ | 271,276 | 4.40 | % | $ | 7,644,088 | $ | 166,995 | 4.39 | % | |||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Demand, interest bearing | $ | 3,447,254 | $ | 15,164 | 0.89 | % | $ | 1,999,454 | $ | 8,151 | 0.82 | % | |||||||||
Savings | 286,862 | 567 | 0.40 | % | 182,356 | 651 | 0.72 | % | |||||||||||||
Time deposits | 4,011,019 | 16,894 | 0.85 | % | 2,571,346 | 11,457 | 0.90 | % | |||||||||||||
Total interest bearing deposits | 7,745,135 | 32,625 | 0.85 | % | 4,753,156 | 20,259 | 0.86 | % | |||||||||||||
FHLB advances | 688,307 | $ | 4,477 | 1.31 | % | 548,421 | 3,209 | 1.18 | % | ||||||||||||
Other borrowings | 96,065 | 2,449 | 5.07 | % | 40,837 | 856 | 4.14 | % | |||||||||||||
Total interest bearing liabilities | 8,529,507 | $ | 39,551 | 0.94 | % | 5,342,414 | $ | 24,324 | 0.92 | % | |||||||||||
Noninterest bearing demand deposits | 2,899,167 | 1,650,775 | |||||||||||||||||||
Total funding liabilities/cost of funds | $ | 11,428,674 | 0.70 | % | $ | 6,993,189 | 0.70 | % | |||||||||||||
Net interest income/net interest spread | $ | 231,725 | 3.46 | % | $ | 142,671 | 3.47 | % | |||||||||||||
Net interest margin | 3.76 | % | 3.75 | % | |||||||||||||||||
Cost of deposits: | |||||||||||||||||||||
Noninterest bearing demand deposits | $ | 2,899,167 | $ | — | $ | 1,650,775 | $ | — | |||||||||||||
Interest bearing deposits | 7,745,135 | 32,625 | 0.85 | % | 4,753,156 | 20,259 | 0.86 | % | |||||||||||||
Total deposits | $ | 10,644,302 | $ | 32,625 | 0.62 | % | $ | 6,403,931 | $ | 20,259 | 0.64 | % | |||||||||
Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
AVERAGE BALANCES: | 6/30/2017 | 3/31/2017 | % change | 6/30/2016 | % change | 6/30/2017 | 6/30/2016 | % change | ||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 10,536,428 | $ | 10,381,771 | 1 | % | $ | 6,457,883 | 63 | % | $ | 10,459,527 | $ | 6,363,656 | 64 | % | ||||||||||||
Investments | 1,974,216 | 1,991,452 | (1 | )% | 1,326,952 | 49 | % | 1,982,786 | 1,280,432 | 55 | % | |||||||||||||||||
Interest earning assets | 12,510,644 | 12,373,223 | 1 | % | 7,784,835 | 61 | % | 12,442,313 | 7,644,088 | 63 | % | |||||||||||||||||
Total assets | 13,470,745 | 13,335,727 | 1 | % | 8,157,358 | 65 | % | 13,403,609 | 8,016,649 | 67 | % | |||||||||||||||||
Interest bearing deposits | 7,750,438 | 7,739,772 | — | % | 4,845,173 | 60 | % | 7,745,135 | 4,753,156 | 63 | % | |||||||||||||||||
Interest bearing liabilities | 8,560,514 | 8,498,155 | 1 | % | 5,450,671 | 57 | % | 8,529,507 | 5,342,414 | 60 | % | |||||||||||||||||
Noninterest bearing demand deposits | 2,929,656 | 2,868,339 | 2 | % | 1,671,986 | 75 | % | 2,899,167 | 1,650,775 | 76 | % | |||||||||||||||||
Stockholders’ equity | 1,892,126 | 1,868,998 | 1 | % | 967,919 | 95 | % | 1,880,626 | 956,777 | 97 | % | |||||||||||||||||
Net interest earning assets | 3,950,130 | 3,875,068 | 2 | % | 2,334,164 | 69 | % | 3,912,806 | 2,301,674 | 70 | % | |||||||||||||||||
LOAN PORTFOLIO COMPOSITION: | 6/30/2017 | 3/31/2017 | % change | 12/31/2016 | % change | 6/30/2016 | % change | |||||||||||||||||||||
Commercial loans | $ | 1,925,503 | $ | 1,840,193 | 5 | % | $ | 1,986,949 | (3 | )% | $ | 1,111,219 | 73 | % | ||||||||||||||
Real estate loans | 8,432,395 | 8,291,188 | 2 | % | 8,154,570 | 3 | % | 5,331,015 | 58 | % | ||||||||||||||||||
Consumer and other loans | 460,446 | 420,169 | 10 | % | 403,470 | 14 | % | 145,182 | 217 | % | ||||||||||||||||||
Loans outstanding | 10,818,344 | 10,551,550 | 3 | % | 10,544,989 | 3 | % | 6,587,416 | 64 | % | ||||||||||||||||||
Unamortized deferred loan fees - net of costs | (1,925 | ) | (1,883 | ) | (2 | )% | (1,657 | ) | (16 | )% | (3,179 | ) | 39 | % | ||||||||||||||
Loans, net of deferred loan fees and costs | 10,816,419 | 10,549,667 | 3 | % | 10,543,332 | 3 | % | 6,584,237 | 64 | % | ||||||||||||||||||
Allowance for loan losses | (80,074 | ) | (78,659 | ) | (2 | )% | (79,343 | ) | (1 | )% | (76,425 | ) | (5 | )% | ||||||||||||||
Loan receivable, net | $ | 10,736,345 | $ | 10,471,008 | 3 | % | $ | 10,463,989 | 3 | % | $ | 6,507,812 | 65 | % | ||||||||||||||
REAL ESTATE LOANS BY PROPERTY TYPE: | 6/30/2017 | 3/31/2017 | % change | 12/31/2016 | % change | 6/30/2016 | % change | |||||||||||||||||||||
Retail buildings | $ | 2,260,091 | $ | 2,213,627 | 2 | % | $ | 2,163,075 | 4 | % | $ | 1,365,808 | 65 | % | ||||||||||||||
Hotels/motels | 1,606,334 | 1,593,758 | 1 | % | 1,605,787 | — | % | 1,155,928 | 39 | % | ||||||||||||||||||
Gas stations/car washes | 973,266 | 938,158 | 4 | % | 946,364 | 3 | % | 704,334 | 38 | % | ||||||||||||||||||
Mixed-use facilities | 605,379 | 596,074 | 2 | % | 563,484 | 7 | % | 400,559 | 51 | % | ||||||||||||||||||
Warehouses | 929,034 | 899,009 | 3 | % | 892,100 | 4 | % | 543,270 | 71 | % | ||||||||||||||||||
Multifamily | 433,414 | 443,632 | (2 | )% | 423,084 | 2 | % | 260,708 | 66 | % | ||||||||||||||||||
Other | 1,624,877 | 1,606,930 | 1 | % | 1,560,676 | 4 | % | 900,408 | 80 | % | ||||||||||||||||||
Total | $ | 8,432,395 | $ | 8,291,188 | 2 | % | $ | 8,154,570 | 3 | % | $ | 5,331,015 | 58 | % | ||||||||||||||
DEPOSIT COMPOSITION | 6/30/2017 | 3/31/2017 | % change | 12/31/2016 | % change | 6/30/2016 | % change | |||||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,016,538 | $ | 2,963,947 | 2 | % | $ | 2,900,241 | 4 | % | $ | 1,717,045 | 76 | % | ||||||||||||||
Money market and other | 3,563,404 | 3,481,231 | 2 | % | 3,401,446 | 5 | % | 2,176,978 | 64 | % | ||||||||||||||||||
Saving deposits | 275,272 | 289,924 | (5 | )% | 301,906 | (9 | )% | 173,549 | 59 | % | ||||||||||||||||||
Time deposits of $100,000 or more | 3,019,660 | 2,984,078 | 1 | % | 2,982,256 | 1 | % | 1,828,649 | 65 | % | ||||||||||||||||||
Other time deposits | 1,080,227 | 984,597 | 10 | % | 1,056,186 | 2 | % | 741,301 | 46 | % | ||||||||||||||||||
Total deposit balances | $ | 10,955,101 | $ | 10,703,777 | 2 | % | $ | 10,642,035 | 3 | % | $ | 6,637,522 | 65 | % | ||||||||||||||
DEPOSIT COMPOSITION (%) | 6/30/2017 | 3/31/2017 | 12/31/2016 | 6/30/2016 | ||||||||||||||||||||||||
Noninterest bearing demand deposits | 27.5 | % | 27.7 | % | 27.3 | % | 25.9 | % | ||||||||||||||||||||
Money market and other | 32.5 | % | 32.5 | % | 32.0 | % | 32.8 | % | ||||||||||||||||||||
Saving deposits | 2.5 | % | 2.7 | % | 2.8 | % | 2.6 | % | ||||||||||||||||||||
Time deposits of $100,000 or more | 27.6 | % | 27.9 | % | 28.0 | % | 27.6 | % | ||||||||||||||||||||
Other time deposits | 9.9 | % | 9.2 | % | 9.9 | % | 11.1 | % | ||||||||||||||||||||
Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | 100 | % | ||||||||||||||||||||
Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)
CAPITAL RATIOS: | 6/30/2017 | 3/31/2017 | 12/31/2016 | 6/30/2016 | |||||||||||||||||||||||
Total stockholders’ equity | $ | 1,906,294 | $ | 1,878,047 | $ | 1,855,473 | $ | 971,740 | |||||||||||||||||||
Common Equity Tier 1 ratio | 12.18 | % | 12.22 | % | 12.10 | % | 11.66 | % | |||||||||||||||||||
Tier 1 risk-based capital ratio | 13.00 | % | 13.05 | % | 12.92 | % | 12.22 | % | |||||||||||||||||||
Total risk-based capital ratio | 13.70 | % | 13.76 | % | 13.64 | % | 13.28 | % | |||||||||||||||||||
Tier 1 leverage ratio | 11.80 | % | 11.72 | % | 11.49 | % | 11.14 | % | |||||||||||||||||||
Total risk weighted assets | $ | 11,814,607 | $ | 11,571,354 | 11,575,944 | 7,329,696 | |||||||||||||||||||||
Book value per common share | $ | 14.09 | $ | 13.89 | $ | 13.72 | $ | 12.21 | |||||||||||||||||||
Tangible common equity to tangible assets 2 | 10.64 | % | 10.74 | % | 10.60 | % | 10.50 | % | |||||||||||||||||||
Tangible common equity per share 2 | $ | 10.52 | $ | 10.32 | $ | 10.15 | $ | 10.85 | |||||||||||||||||||
2 Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. | |||||||||||||||||||||||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures: | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
6/30/2017 | 3/31/2017 | 6/30/2016 | |||||||||||||||||||||||||
TANGIBLE COMMON EQUITY | |||||||||||||||||||||||||||
Total stockholders’ equity | $ | 1,906,294 | $ | 1,878,047 | $ | 971,740 | |||||||||||||||||||||
Less: Goodwill and core deposit intangible assets, net | (482,324 | ) | (482,525 | ) | (107,796 | ) | |||||||||||||||||||||
Tangible common equity | $ | 1,423,970 | $ | 1,395,522 | $ | 863,944 | |||||||||||||||||||||
Total assets | $ | 13,859,217 | $ | 13,481,429 | $ | 8,336,826 | |||||||||||||||||||||
Less: Goodwill and core deposit intangible assets, net | (482,324 | ) | (482,525 | ) | (107,796 | ) | |||||||||||||||||||||
Tangible assets | $ | 13,376,893 | $ | 12,998,904 | $ | 8,229,030 | |||||||||||||||||||||
Common shares outstanding | 135,297,678 | 135,248,185 | 79,606,821 | ||||||||||||||||||||||||
Tangible common equity to tangible assets | 10.64 | % | 10.74 | % | 10.50 | % | |||||||||||||||||||||
Tangible common equity per share | $ | 10.52 | $ | 10.32 | $ | 10.85 | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES: | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 6/30/2017 | 6/30/2016 | ||||||||||||||||||||
Balance at beginning of period | $ | 78,659 | $ | 79,343 | $ | 79,976 | $ | 76,425 | $ | 76,856 | $ | 79,343 | $ | 76,408 | |||||||||||||
Provision for loan losses | 2,760 | 5,600 | 800 | 6,500 | 1,200 | 8,360 | 1,700 | ||||||||||||||||||||
Recoveries | 777 | 321 | 452 | 1,010 | 664 | 1,098 | 1,433 | ||||||||||||||||||||
Charge offs | (2,122 | ) | (6,605 | ) | (1,885 | ) | (3,959 | ) | (2,295 | ) | (8,727 | ) | (3,116 | ) | |||||||||||||
Balance at end of period | $ | 80,074 | $ | 78,659 | $ | 79,343 | $ | 79,976 | $ | 76,425 | $ | 80,074 | $ | 76,425 | |||||||||||||
Net charge offs/average loans receivable (annualized) | 0.05 | % | 0.24 | % | 0.05 | % | 0.13 | % | 0.10 | % | 0.15 | % | 0.05 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
NET CHARGED OFF (RECOVERED) LOANS BY TYPE: | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 6/30/2017 | 6/30/2016 | ||||||||||||||||||||
Real estate loans | $ | 830 | $ | 1,444 | $ | (45 | ) | $ | 127 | $ | 18 | $ | 2,274 | $ | (372 | ) | |||||||||||
Commercial loans | 276 | 4,564 | 1,000 | 2,663 | 1,649 | 4,840 | 2,028 | ||||||||||||||||||||
Consumer loans | 239 | 276 | 478 | 159 | (36 | ) | 515 | 27 | |||||||||||||||||||
Total net charge offs | $ | 1,345 | $ | 6,284 | $ | 1,433 | $ | 2,949 | $ | 1,631 | $ | 7,629 | $ | 1,683 | |||||||||||||
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
NONPERFORMING ASSETS | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Delinquent loans on nonaccrual status 3 | $ | 47,361 | $ | 37,009 | $ | 40,074 | $ | 40,602 | $ | 42,398 | |||||||||
Delinquent loans 90 days or more on accrual status 4 | 1,850 | 275 | 305 | 192 | 147 | ||||||||||||||
Accruing troubled debt restructured loans | 53,290 | 48,984 | 48,874 | 48,701 | 50,837 | ||||||||||||||
Total nonperforming loans | 102,501 | 86,268 | 89,253 | 89,495 | 93,382 | ||||||||||||||
Other real estate owned | 21,839 | 19,096 | 21,990 | 27,457 | 16,392 | ||||||||||||||
Total nonperforming assets | $ | 124,340 | $ | 105,364 | $ | 111,243 | $ | 116,952 | $ | 109,774 | |||||||||
Nonperforming assets/total assets | 0.90 | % | 0.78 | % | 0.83 | % | 0.87 | % | 1.32 | % | |||||||||
Nonperforming assets/loans receivable & OREO | 1.15 | % | 1.00 | % | 1.05 | % | 1.10 | % | 1.66 | % | |||||||||
Nonperforming assets/total capital | 6.52 | % | 5.61 | % | 6.00 | % | 6.31 | % | 11.30 | % | |||||||||
Nonperforming loans/loans receivable | 0.95 | % | 0.82 | % | 0.85 | % | 0.85 | % | 1.42 | % | |||||||||
Nonaccrual loans/loans receivable | 0.44 | % | 0.35 | % | 0.38 | % | 0.38 | % | 0.64 | % | |||||||||
Allowance for loan losses/loans receivable | 0.74 | % | 0.75 | % | 0.75 | % | 0.76 | % | 1.16 | % | |||||||||
Allowance for loan losses/nonaccrual loans | 169.07 | % | 212.54 | % | 197.99 | % | 196.98 | % | 180.26 | % | |||||||||
Allowance for loan losses/nonperforming loans | 78.12 | % | 91.18 | % | 88.90 | % | 89.36 | % | 81.84 | % | |||||||||
Allowance for loan losses/nonperforming assets | 64.40 | % | 74.65 | % | 71.32 | % | 68.38 | % | 69.62 | % | |||||||||
3 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.5 million, $15.2 million, $15.9 million, $14.1 million, and $15.5 million, at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively. | |||||||||||||||||||
4 Excludes Acquired Credit Impaired Loans that are delinquent 90 or more days totaling $16.3 million, $17.3 million, $19.6 million, $16.4 million, and $13.8 million at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively. | |||||||||||||||||||
BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS BY TYPE: | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Retail buildings | $ | 6,396 | $ | 5,794 | $ | 5,832 | $ | 5,876 | $ | 4,565 | |||||||||
Hotels/motels | 1,287 | 1,300 | 1,305 | 1,315 | 1,324 | ||||||||||||||
Gas stations/car washes | — | — | — | 829 | 835 | ||||||||||||||
Mixed-use facilities | 133 | 134 | 889 | 895 | 1,111 | ||||||||||||||
Warehouses | 5,253 | 5,321 | 5,379 | 5,449 | 5,512 | ||||||||||||||
Other 5 | 40,221 | 36,435 | 35,469 | 34,337 | 37,490 | ||||||||||||||
Total | $ | 53,290 | $ | 48,984 | $ | 48,874 | $ | 48,701 | $ | 50,837 | |||||||||
5 Includes commercial business and other loans | |||||||||||||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Legacy | |||||||||||||||||||
30 - 59 days | $ | 5,910 | $ | 10,199 | $ | 6,254 | $ | 3,580 | $ | 2,920 | |||||||||
60 - 89 days | 11,740 | 3,978 | 6,719 | 1,100 | 1,427 | ||||||||||||||
Total | $ | 17,650 | $ | 14,177 | $ | 12,973 | $ | 4,680 | $ | 4,347 | |||||||||
Acquired | |||||||||||||||||||
30 - 59 days | $ | 6,373 | $ | 5,248 | $ | 4,015 | $ | 3,451 | $ | 2,735 | |||||||||
60 - 89 days | 996 | 1,007 | 1,049 | 1,168 | 345 | ||||||||||||||
Total | $ | 7,369 | $ | 6,255 | $ | 5,064 | $ | 4,619 | $ | 3,080 | |||||||||
Total delinquent loans 30-89 days past due | $ | 25,019 | $ | 20,432 | $ | 18,037 | $ | 9,299 | $ | 7,427 | |||||||||
Table Page 8
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Legacy | |||||||||||||||||||
Real estate loans | $ | 14,126 | $ | 12,575 | $ | 10,896 | $ | 2,678 | $ | 2,047 | |||||||||
Commercial loans | 3,333 | 1,404 | 2,010 | 1,866 | 2,215 | ||||||||||||||
Consumer loans | 191 | 198 | 67 | 136 | 85 | ||||||||||||||
Total delinquent loans 30-89 days past due - legacy | $ | 17,650 | $ | 14,177 | $ | 12,973 | $ | 4,680 | $ | 4,347 | |||||||||
Acquired | |||||||||||||||||||
Real estate loans | $ | 5,786 | $ | 5,211 | $ | 2,721 | $ | 3,761 | $ | 2,557 | |||||||||
Commercial loans | 1,519 | 360 | 1,987 | 858 | 211 | ||||||||||||||
Consumer loans | 64 | 684 | 356 | — | 312 | ||||||||||||||
Total delinquent loans 30-89 days past due - acquired | $ | 7,369 | $ | 6,255 | $ | 5,064 | $ | 4,619 | $ | 3,080 | |||||||||
Total delinquent loans 30-89 days past due | $ | 25,019 | $ | 20,432 | $ | 18,037 | $ | 9,299 | $ | 7,427 | |||||||||
NONACCRUAL LOANS BY TYPE | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Real estate loans | $ | 33,503 | $ | 26,550 | $ | 27,522 | $ | 24,055 | $ | 25,306 | |||||||||
Commercial loans | 12,874 | 10,117 | 11,773 | 15,742 | 16,270 | ||||||||||||||
Consumer loans | 984 | 342 | 779 | 805 | 822 | ||||||||||||||
Total nonaccrual loans | $ | 47,361 | $ | 37,009 | $ | 40,074 | $ | 40,602 | $ | 42,398 | |||||||||
CRITICIZED LOANS | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||
Legacy | |||||||||||||||||||
Special mention | $ | 152,373 | $ | 127,432 | $ | 127,562 | $ | 168,289 | $ | 80,923 | |||||||||
Substandard | 177,097 | 167,747 | 162,942 | 124,938 | 128,885 | ||||||||||||||
Doubtful | 2,208 | 233 | 95 | 441 | 108 | ||||||||||||||
Loss | — | — | — | — | — | ||||||||||||||
Total criticized loans - legacy | $ | 331,678 | $ | 295,412 | $ | 290,599 | $ | 293,668 | $ | 209,916 | |||||||||
Acquired | |||||||||||||||||||
Special mention | $ | 98,683 | $ | 98,536 | $ | 116,094 | $ | 140,604 | $ | 19,447 | |||||||||
Substandard | 134,474 | 139,964 | 148,164 | 131,398 | 67,261 | ||||||||||||||
Doubtful | 1,660 | 2,052 | 1,854 | 2,624 | 2,603 | ||||||||||||||
Loss | — | — | — | (133 | ) | — | |||||||||||||
Total criticized loans - acquired | $ | 234,817 | $ | 240,552 | $ | 266,112 | $ | 274,493 | $ | 89,311 | |||||||||
Total criticized loans | $ | 566,495 | $ | 535,964 | $ | 556,711 | $ | 568,161 | $ | 299,227 | |||||||||
Table Page 9