EX-99.1 2 hope-03312022ex991financia.htm EX-99.1 Document

hopebancorp5a03a.jpg
News Release


HOPE BANCORP REPORTS 2022 FIRST QUARTER FINANCIAL RESULTS


LOS ANGELES - April 18, 2022 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its first quarter ended March 31, 2022.

For the three months ended March 31, 2022, net income increased 18% to $60.7 million, or $0.50 per diluted common share, from $51.6 million, or $0.43 per diluted common share, in the 2021 fourth quarter and increased 39% from $43.7 million, or $0.35 per diluted common share, in the year-ago first quarter.

“For the three months ended March 31, 2022, we delivered a strong quarter of profitability that is reflective of the strategic actions taken in 2021,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “As expected, our asset quality improved materially with criticized loan balances declining 21% from year-end 2021. Together with a large recovery from a previously charged off loan, we recorded an $11.0 million negative provision for credit losses while at the same time further strengthening our reserves.

“The momentum in our business development efforts continued to build with record first quarter production volume of $1.03 billion, which resulted in 6.7% growth in loans receivable on an annualized basis, excluding PPP loans. Given the increased productivity of our larger banking teams and our more diversified areas of lending expertise, we believe we are well positioned to deliver a very strong year of new loan production that will ultimately lead to enhanced growth in earnings and shareholder returns,” said Kim.
Q1 2022 Highlights
•Loan originations totaled $1.03 billion, a record first quarter high and representing a 21% increase over the previous first quarter record set in 2021.
•Excluding PPP, loans receivable increased 6.7% quarter-over-quarter on an annualized basis.
•Company recorded net recoveries of $17.9 million, reflecting additional recoveries related to a large relationship previously charged off during the 2021 third quarter.
•Asset quality improved meaningfully quarter-over-quarter with total nonperforming assets decreasing 8.4% and criticized loans decreasing 21.2%.
•Company recorded a negative provision for credit losses of $11.0 million, reflecting significant reductions in criticized loans and a large net recovery.
•Net interest margin expanded 8 basis points from the fourth quarter of 2021.
•Net income increased 18% quarter-over-quarter to $60.7 million, or $0.50 per diluted common share.
•Total cost of deposits relatively stable, up 1 basis point quarter-over-quarter.
•Noninterest expenses continued to be well managed with efficiency ratio of 51.50% and noninterest expense to average assets of 1.70%.
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Financial Highlights
(dollars in thousands, except per share data) (unaudited)At or for the Three Months Ended
3/31/202212/31/20213/31/2021
Net income$60,738 $51,623 $43,687 
Diluted earnings per share$0.50 $0.43 $0.35 
Pre-provision net revenue (1)
$70,989 $72,179 $60,952 
Net interest income before (credit) provision for credit losses$133,176 $133,318 $122,579 
Net interest margin3.21 %3.13 %3.06 %
Noninterest income$13,186 $13,097 $8,804 
Noninterest expense$75,373 $74,236 $70,431 
Net loans receivable$13,919,224 $13,812,193 $13,494,686 
Deposits$14,515,128 $15,040,450 $14,301,269 
Total cost of deposits0.24 %0.23 %0.36 %
Nonaccrual loans(2)
$52,717 $54,616 $109,858 
Nonperforming loans to loans receivable(2)
0.71 %0.78 %1.11 %
ACL to loans receivable
1.05 %1.01 %1.52 %
ACL to nonaccrual loans(2)
279.70 %257.34 %189.28 %
ACL to nonperforming assets(2)
144.03 %125.76 %121.94 %
(Credit) provision for credit losses$(11,000)$1,500 $3,300 
Net (recoveries) charge offs$(17,900)$(2,276)$2,098 
Return on average assets (“ROA”)1.37 %1.16 %1.02 %
Return on average equity (“ROE”)11.62 %9.93 %8.53 %
Return on average tangible common equity (“ROTCE”)(1)
15.01 %12.85 %11.11 %
Noninterest expense / average assets1.70 %1.67 %1.65 %
Efficiency ratio51.50 %50.70 %53.61 %

(1) Pre-provision net revenue and return on average tangible common equity are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Page 6 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 9.
(2) Excludes delinquent SBA loans that are guaranteed and currently in liquidation.



Operating Results for the 2022 First Quarter

Net interest income before provision for credit losses for the 2022 first quarter was stable at $133.2 million, compared with $133.3 million in the 2021 fourth quarter, but increased 9% from $122.6 million in the 2021 first quarter. The Company attributed the year-over-year increase to higher interest income due to higher average balances of loans receivable and investment securities and lower interest expense on deposits.

The net interest margin for the 2022 first quarter increased 8 basis points to 3.21% from 3.13% in the preceding fourth quarter and increased 15 basis points from 3.06% in the year-ago first quarter, primarily due to a decrease in interest earning cash which was used to fund a portion of the increase in average loan balances.

The weighted average yield on loans for the 2022 first quarter was 3.88%, compared with 3.95% in the 2021 fourth quarter. The Company attributed the quarter-over-quarter decrease in weighted average yield on loans to the impact of lower interest income related to SBA PPP loans and lower purchase accounting accretion. The weighted average yield on loans for the 2021 first quarter was 3.94%.

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The weighted average cost of deposits for the 2022 first quarter increased slightly by 1 basis point to 0.24% from 0.23% in the 2021 fourth quarter, primarily reflecting a lower mix of noninterest bearing demand deposits. Compared with the year-ago first quarter, the weighted average cost of deposits for the 2022 first quarter decreased 12 basis points from 0.36%, largely reflecting a 37 basis point reduction in the cost of time deposits and a significantly improved mix of deposits with time deposits accounting for 15.2% of total deposits at March 31, 2022, versus 24.9% at March 31, 2021.

Noninterest income for the 2022 first quarter increased 1% to $13.2 million from $13.1 million in the 2021 fourth quarter, reflecting higher net gain on sale of SBA loans, largely offset by lower other income and fees, which included quarter-over-quarter decreases in equity investment fair values, dividend income from equity investments and swap fee income. During the 2022 first quarter, the Company sold $58.1 million in the guaranteed portion of SBA 7(a) loans, compared with $41.0 million in the preceding fourth quarter. Noninterest income for the 2022 first quarter increased 50% over $8.8 million in the first quarter of 2021 due to the absence of SBA loan sales to the secondary market in the first quarter of 2021.

Noninterest expense for the 2022 first quarter increased 2% to $75.4 million from $74.2 million for the preceding fourth quarter, reflecting higher salaries and employee benefits largely offset by decreases in most other noninterest expense line items. For the 2021 first quarter, noninterest expense totaled $70.4 million.

Salaries and employee benefits expense for the 2022 first quarter increased to $47.7 million from $44.6 million in the preceding fourth quarter, largely reflecting seasonal increases related to payroll taxes and vacation accruals, along with a decrease in deferred loan origination costs. Salaries and employee benefits expense for the 2021 first quarter totaled $41.2 million. The Company attributed the year-over-year increase in salaries and employee benefits expense to higher base salaries reflecting an increase in full-time equivalent employees, higher group insurance expense and lower deferred loan origination costs.

The Company’s efficiency ratio for the 2022 first quarter was 51.50%, compared with 50.70% in the preceding fourth quarter and 53.61% in the year-ago first quarter. Noninterest expense as a percentage of average assets was 1.70% for the 2022 first quarter, compared with 1.67% for the 2021 fourth quarter and 1.65% for the 2021 first quarter.

The effective tax rate for the 2022 first quarter was 25.9%, compared with 27.0% for the preceding fourth quarter and 24.2% in the year-ago first quarter. The effective tax rate for the 2022 first quarter was higher than the year-ago first quarter due mainly to a decrease in affordable housing tax credits compared with the prior year.

Balance Sheet Summary
New loan originations funded during the 2022 first quarter totaled $1.03 billion, a record first quarter high and reflecting a 21% increase over $847.1 million in the year-ago first quarter. During the seasonally stronger fourth quarter of 2021, the Company originated $1.24 billion of new loans, a record high for any given quarter.

Following are the components of new loan production for the quarters ended March 31, 2022, December 31, 2021, and March 31, 2021.

(dollars in thousands) (unaudited)For the Three Months Ended
3/31/202212/31/20213/31/2021
Commercial real estate$529,730 $573,978 $277,704 
Commercial335,756 532,634 156,622 
SBA56,602 54,848 36,802 
SBA PPP— — 304,727 
Residential mortgage103,473 81,325 69,784 
Consumer401 70 1,473 
Total new loan originations$1,025,962 $1,242,855 $847,112 


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At March 31, 2022, loans receivable increased 0.8% to $14.07 billion from $13.95 billion at December 31, 2021 and increased 2.7% from $13.70 billion at March 31, 2021.

Total deposits at March 31, 2022 declined 3.5% to $14.52 billion from $15.04 billion at December 31, 2021, largely reflecting a decrease in time deposits, but increased 1.5% year-over-year from $14.30 billion at March 31, 2021. Quarter-over-quarter, money market and NOW deposits increased 4.9%, but was offset by a 4.4% decline in noninterest bearing demand deposits and a 20.7% reduction in time deposits. On a year-over-year basis, noninterest bearing demand deposits at March 31, 2022 increased 1.3%, money market and NOW deposits increased 29.4%, and time deposits decreased 37.9%.

Following is the deposit composition as of March 31, 2022, December 31, 2021 and March 31, 2021:
(dollars in thousands) (unaudited)3/31/202212/31/2021% change3/31/2021% change
  Noninterest bearing demand deposits$5,498,263 $5,751,870 (4)%$5,427,174 1 %
  Money market and other6,484,677 6,178,850 5 %5,009,419 29 %
  Saving deposits321,373 321,377 — %305,326 5 %
  Time deposits 2,210,815 2,788,353 (21)%3,559,350 (38)%
    Total deposit balances$14,515,128 $15,040,450 (3)%$14,301,269 1 %


Following is the deposit composition as a percentage of total deposits and a breakdown of cost of deposits as of and for the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021:
Deposit BreakdownCost of Deposits
(unaudited)3/31/202212/31/20213/31/2021
Q1 2022
Q4 2021
Q1 2021
  Noninterest bearing demand deposits37.9 %38.3 %38.0 %— %— %— %
  Money market and other44.7 %41.1 %35.0 %0.36 %0.37 %0.42 %
  Saving deposits2.2 %2.1 %2.1 %1.18 %1.18 %1.17 %
  Time deposits 15.2 %18.5 %24.9 %0.32 %0.34 %0.69 %
    Total deposit balances100.0 %100.0 %100.0 %0.24 %0.23 %0.36 %

Allowance for Credit Losses
In the 2022 first quarter, the Company recorded a negative provision for credit losses of $11.0 million, compared with a provision for credit losses of $1.5 million in the preceding fourth quarter and a provision for credit losses of $3.3 million in the 2021 first quarter.

Following is the allowance for credit losses and allowance coverage ratios as of March 31, 2022, December 31, 2021 and March 31, 2021:

(dollars in thousands) (unaudited)3/31/202212/31/20213/31/2021
Allowance for credit losses$147,450 $140,550 $207,943 
Allowance for credit loss/loans receivable1.05 %1.01 %1.52 %
Allowance for credit losses/nonperforming loans146.92 %128.75 %136.79 %


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Credit Quality
Following are the components of nonperforming assets as of March 31, 2022, December 31, 2021 and March 31, 2021:
(dollars in thousands) (unaudited)3/31/202212/31/20213/31/2021
Loans on nonaccrual status (1)
$52,717 $54,616 $109,858 
Delinquent loans 90 days or more on accrual status
3,090 2,131 384 
Accruing troubled debt restructured loans44,555 52,418 41,773 
Total nonperforming loans100,362 109,165 152,015 
Other real estate owned2,010 2,597 18,515 
Total nonperforming assets$102,372 $111,762 $170,530 

(1)     Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $17.0 million, $19.5 million and $25.0 million, at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Total nonperforming assets at March 31, 2022 declined to $102.4 million from $111.8 million at December 31, 2021 and from $170.5 million at March 31, 2021. The quarter-over-quarter decrease in total nonperforming assets largely reflects a $1.9 million reduction in nonaccrual loans and a $7.9 million reduction in accruing troubled debt restructured loans.

Following are net (recoveries) charge offs and net (recoveries) charge offs to average loans receivable on an annualized basis for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021:
(dollars in thousands) (unaudited)For the Three Months Ended
3/31/202212/31/20213/31/2021
Net (recoveries) charge offs $(17,900)$(2,276)$2,098 
Net (recoveries) charge offs/average loans receivable (annualized)(0.52)%(0.07)%0.06 %

Net recoveries in the 2022 first quarter reflects additional partial recoveries from a large loan charged off during the 2021 third quarter.

Following are the components of criticized loan balances as of March 31, 2022, December 31, 2021 and March 31, 2021:
(dollars in thousands) (unaudited)3/31/202212/31/20213/31/2021
Special mention$166,958$257,194$280,974
Substandard226,661242,397379,048
     Total criticized loans$393,619$499,591$660,022

The Company noted that the quarter-over-quarter decrease in criticized loan balances at March 31, 2022 largely reflects upgrades of its borrowers’ post-COVID modifications following the receipt of updated financial statements and payoffs of criticized loans.


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Capital
At March 31, 2022, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. Following are capital ratios for the Company as of March 31, 2022, December 31, 2021 and March 31, 2021:
Hope Bancorp, Inc. (unaudited)
3/31/202212/31/20213/31/2021Minimum Guideline for “Well-Capitalized” Bank
Common Equity Tier 1 Capital11.03%11.03%11.08%6.50%
Tier 1 Leverage Ratio10.37%10.11%10.15%5.00%
Tier 1 Risk-Based Ratio11.69%11.70%11.78%8.00%
Total Risk-Based Ratio12.49%12.42%13.03%10.00%

Following are tangible common equity(1) (“TCE”) per share and TCE as a percentage of tangible assets(1) as of March 31, 2022, December 31, 2021 and March 31, 2021:
(unaudited)3/31/202212/31/20213/31/2021
Tangible common equity per share (1)
$13.04$13.51$12.73
Tangible common equity to tangible assets (2)
9.05%9.31%9.40%

(1)    Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth in the following section. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.


Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including pre-provision net revenue, tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding its operational performance and the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in these financial metrics. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, April 19, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its first quarter ended March 31, 2022. 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 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 April 26, 2022, replay access code 1867037.

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About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.80 billion in total assets as of March 31, 2022. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.


Forward-Looking Statements

Some statements in this 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, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization of the Company. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.



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


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





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

Assets:3/31/202212/31/2021% change3/31/2021% change
Cash and due from banks$280,373 $316,266 (11)%$376,666 (26)%
Securities available for sale, at fair value2,492,486 2,666,275 (7)%2,233,744 12 %
Federal Home Loan Bank (“FHLB”) stock and other investments87,201 87,961 (1)%102,242 (15)%
Loans held for sale, at the lower of cost or fair value115,756 99,049 17 %19,672 488 %
Loans receivable14,066,674 13,952,743 1 %13,702,629 3 %
Allowance for credit losses(147,450)(140,550)(5)%(207,943)29 %
  Net loans receivable13,919,224 13,812,193 1 %13,494,686 3 %
Accrued interest receivable37,949 41,842 (9)%60,498 (37)%
Premises and equipment, net45,642 45,667 — %47,918 (5)%
Bank owned life insurance77,390 77,081 — %77,089 — %
Goodwill464,450 464,450 — %464,450 — %
Servicing assets10,874 10,418 4 %12,084 (10)%
Other intangible assets, net7,184 7,671 (6)%9,198 (22)%
Other assets265,285 260,188 2 %300,613 (12)%
  Total assets$17,803,814 $17,889,061 — %$17,198,860 4 %
Liabilities:
Deposits$14,515,128 $15,040,450 (3)%$14,301,269 1 %
FHLB and FRB borrowings772,000 300,000 157 %400,000 93 %
Convertible notes, net216,444 216,209 — %215,504 — %
Subordinated debentures105,652 105,354 — %104,469 1 %
Accrued interest payable4,826 4,272 13 %8,611 (44)%
Other liabilities148,707 129,793 15 %123,426 20 %
  Total liabilities$15,762,757 $15,796,078 — %$15,153,279 4 %
Stockholders’ Equity:
Common stock, $0.001 par value$137 $136 1 %$136 1 %
Capital surplus 1,422,602 1,421,698 — %1,417,137 — %
Retained earnings976,483 932,561 5 %823,085 19 %
Treasury stock, at cost(250,000)(250,000)— %(200,000)(25)%
Accumulated other comprehensive (loss) gain, net(108,165)(11,412)(848)%5,223 N/A
  Total stockholders’ equity2,041,057 2,092,983 (2)%2,045,581 — %
  Total liabilities and stockholders’ equity$17,803,814 $17,889,061 — %$17,198,860 4 %
Common stock shares - authorized150,000,000 150,000,000 150,000,000 
Common stock shares - outstanding120,327,689 120,006,452 123,480,494 
Treasury stock shares16,343,849 16,343,849 12,661,581 
Table Page 1
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Three Months Ended
3/31/202212/31/2021% change3/31/2021% change
  Interest and fees on loans$132,672 $133,821 (1)%$129,736 2 %
  Interest on securities11,656 10,657 9 %7,915 47 %
  Interest on federal funds sold and other investments544 691 (21)%642 (15)%
    Total interest income144,872 145,169 — %138,293 5 %
  Interest on deposits 8,676 8,905 (3)%12,770 (32)%
  Interest on other borrowings and convertible notes3,020 2,946 3 %2,944 3 %
    Total interest expense11,696 11,851 (1)%15,714 (26)%
Net interest income before provision (credit) for credit losses133,176 133,318 — %122,579 9 %
Provision (credit) for credit losses(11,000)1,500 N/A3,300 N/A
Net interest income after provision (credit) for credit losses144,176 131,818 9 %119,279 21 %
  Service fees on deposit accounts1,974 1,894 4 %1,790 10 %
  International service fees794 1,061 (25)%841 (6)%
  Loan servicing fees, net 836 747 12 %1,044 (20)%
  Wire transfer fees 900 916 (2)%844 7 %
  Net gains on sales of SBA loans5,603 3,614 55 %— 100 %
  Net gains on sales of residential mortgage loans757 530 43 %2,096 (64)%
  Other income and fees2,322 4,335 (46)%2,189 6 %
    Total noninterest income13,186 13,097 1 %8,804 50 %
  Salaries and employee benefits47,745 44,608 7 %41,216 16 %
  Occupancy7,335 7,391 (1)%6,967 5 %
  Furniture and equipment4,644 4,642 — %4,186 11 %
  Advertising and marketing1,636 2,329 (30)%1,625 1 %
  Data processing and communications2,461 2,789 (12)%2,737 (10)%
  Professional fees2,211 2,439 (9)%2,903 (24)%
  FDIC assessment1,569 1,366 15 %1,255 25 %
  Credit related expenses1,112 873 27 %2,218 (50)%
  OREO expense, net357 811 (56)%281 27 %
  Other6,303 6,988 (10)%7,043 (11)%
    Total noninterest expense75,373 74,236 2 %70,431 7 %
Income before income taxes81,989 70,679 16 %57,652 42 %
Income tax provision21,251 19,056 12 %13,965 52 %
Net income $60,738 $51,623 18 %$43,687 39 %
Earnings Per Common Share - Basic$0.51 $0.43 $0.35 
Earnings Per Common Share - Diluted$0.50 $0.43 $0.35 
Weighted Average Shares Outstanding - Basic120,131,380 120,160,300 123,324,745 
Weighted Average Shares Outstanding - Diluted121,089,474 121,025,925 124,336,130 
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)


For the Three Months Ended
(Annualized)
Profitability measures:3/31/202212/31/20213/31/2021
  ROA 1.37 %1.16 %1.02 %
  ROE 11.62 %9.93 %8.53 %
  ROTCE (1)
15.01 %12.85 %11.11 %
  Net interest margin3.21 %3.13 %3.06 %
  Efficiency ratio51.50 %50.70 %53.61 %
  Noninterest expense / average assets1.70 %1.67 %1.65 %
(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.
Three Months Ended
Pre-tax acquisition accounting adjustments:3/31/202212/31/20213/31/2021
Accretion on acquired loans (including acquired credit deteriorated loans)$883 $1,950 $2,960 
Amortization of premium on low income housing tax credits(76)(73)(73)
Accretion of discount on acquired subordinated debt(298)(296)(290)
Amortization of core deposit intangibles(487)(509)(509)
     Total acquisition accounting adjustments$22 $1,072 $2,088 

Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended
3/31/202212/31/20213/31/2021
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale $13,871,974 $132,672 3.88 %$13,447,009 $133,821 3.95 %$13,346,264 $129,736 3.94 %
    Securities available for sale 2,621,220 11,656 1.80 %2,674,903 10,657 1.58 %2,267,409 7,915 1.42 %
    FHLB stock and other investments 352,774 544 0.63 %773,579 691 0.35 %640,392 642 0.41 %
Total interest earning assets$16,845,968 $144,872 3.49 %$16,895,491 $145,169 3.41 %$16,254,065 $138,293 3.45 %
 
INTEREST BEARING LIABILITIES:
  Deposits:
    Demand, interest bearing $6,337,866 $5,701 0.36 %$5,961,363 $5,522 0.37 %$5,256,579 $5,490 0.42 %
    Savings 318,508 927 1.18 %316,758 946 1.18 %301,184 870 1.17 %
    Time deposits2,619,491 2,048 0.32 %2,823,613 2,437 0.34 %3,767,109 6,410 0.69 %
    Total interest bearing deposits9,275,865 8,676 0.38 %9,101,734 8,905 0.39 %9,324,872 12,770 0.56 %
    FHLB and FRB borrowings242,556 687 1.15 %216,882 648 1.19 %215,889 642 1.21 %
    Convertible notes, net216,305 1,323 2.45 %216,078 1,322 2.39 %215,002 1,322 2.46 %
    Subordinated debentures101,577 1,010 3.98 %101,295 976 3.77 %100,392 980 3.90 %
Total interest bearing liabilities$9,836,303 $11,696 0.48 %$9,635,989 $11,851 0.49 %$9,856,155 $15,714 0.65 %
Noninterest bearing demand deposits5,672,768 5,967,251 5,052,532 
Total funding liabilities/cost of funds$15,509,071 0.31 %$15,603,240 0.30 %$14,908,687 0.43 %
Net interest income/net interest spread$133,176 3.01 %$133,318 2.92 %$122,579 2.80 %
Net interest margin3.21 %3.13 %3.06 %
Cost of deposits:
    Noninterest bearing demand deposits$5,672,768 $— — %$5,967,251 $— — %$5,052,532 $— — %
    Interest bearing deposits9,275,865 8,676 0.38 %9,101,734 8,905 0.39 %9,324,872 12,770 0.56 %
Total deposits$14,948,633 $8,676 0.24 %$15,068,985 $8,905 0.23 %$14,377,404 $12,770 0.36 %
Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
 Three Months Ended
AVERAGE BALANCES:3/31/202212/31/2021% change3/31/2021% change
Loans receivable, including loans held for sale $13,871,974 $13,447,009 3 %$13,346,264 4 %
Investments2,973,994 3,448,482 (14)%2,907,801 2 %
Interest earning assets16,845,968 16,895,491 — %16,254,065 4 %
Total assets17,742,402 17,834,345 (1)%17,115,407 4 %
Interest bearing deposits9,275,865 9,101,734 2 %9,324,872 (1)%
Interest bearing liabilities9,836,303 9,635,989 2 %9,856,155 — %
Noninterest bearing demand deposits5,672,768 5,967,251 (5)%5,052,532 12 %
Stockholders’ equity2,090,755 2,079,694 1 %2,047,506 2 %
Net interest earning assets7,009,665 7,259,502 (3)%6,397,910 10 %
LOAN PORTFOLIO COMPOSITION: 3/31/202212/31/2021% change3/31/2021% change
Commercial loans$4,124,715 $4,208,674 (2)%$4,346,244 (5)%
Real estate loans9,262,305 9,105,931 2 %8,811,423 5 %
Consumer and other loans679,654 638,138 7 %544,962 25 %
    Loans, net of deferred loan fees and costs14,066,674 13,952,743 1 %13,702,629 3 %
Allowance for credit losses(147,450)(140,550)(5)%(207,943)29 %
    Loans receivable, net$13,919,224 $13,812,193 1 %$13,494,686 3 %
REAL ESTATE LOANS BY PROPERTY TYPE:3/31/202212/31/2021% change3/31/2021% change
Retail buildings$2,598,373 $2,522,976 3 %$2,317,017 12 %
Hotels/motels1,208,217 1,308,405 (8)%1,619,661 (25)%
Gas stations/car washes1,055,383 1,050,730 — %913,176 16 %
Mixed-use facilities872,362 854,793 2 %752,729 16 %
Warehouses1,263,791 1,244,339 2 %1,092,549 16 %
Multifamily841,316 744,068 13 %531,306 58 %
Other1,422,863 1,380,620 3 %1,584,985 (10)%
Total$9,262,305 $9,105,931 2 %$8,811,423 5 %
DEPOSIT COMPOSITION3/31/202212/31/2021% change3/31/2021% change
  Noninterest bearing demand deposits$5,498,263 $5,751,870 (4)%$5,427,174 1 %
  Money market and other6,484,677 6,178,850 5 %5,009,419 29 %
  Saving deposits321,373 321,377 — %305,326 5 %
  Time deposits 2,210,815 2,788,353 (21)%3,559,350 (38)%
    Total deposit balances$14,515,128 $15,040,450 (3)%$14,301,269 1 %
DEPOSIT COMPOSITION (%)3/31/202212/31/20213/31/2021
  Noninterest bearing demand deposits37.9 %38.3 %38.0 %
  Money market and other44.7 %41.1 %35.0 %
  Saving deposits2.2 %2.1 %2.1 %
  Time deposits 15.2 %18.5 %24.9 %
    Total deposit balances100.0 %100.0 %100.0 %
Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)


CAPITAL RATIOS:3/31/202212/31/20213/31/2021
  Total stockholders’ equity$2,041,057 $2,092,983 $2,045,581 
  Common equity tier 1 ratio11.03 %11.03 %11.08 %
  Tier 1 risk-based capital ratio 11.69 %11.70 %11.78 %
  Total risk-based capital ratio 12.49 %12.42 %13.03 %
  Tier 1 leverage ratio 10.37 %10.11 %10.15 %
  Total risk weighted assets$15,393,639 $15,036,292 $14,338,828 
  Book value per common share$16.96 $17.44 $16.57 
  Tangible common equity to tangible assets (1)
9.05 %9.31 %9.40 %
  Tangible common equity per share (1)
$13.04 $13.51 $12.73 
(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital.
Three Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:3/31/202212/31/20219/30/20216/30/20213/31/2021
Balance at beginning of period$140,550 $136,774 $189,452 $207,943 $206,741 
(Credit) provision for credit losses(11,000)1,500 (10,000)(7,000)3,300 
Recoveries19,403 3,615 1,906 1,301 1,423 
Charge offs (1,503)(1,339)(44,584)(12,792)(3,521)
Balance at end of period$147,450 $140,550 $136,774 $189,452 $207,943 
Net (recoveries) charge offs/average loans receivable (annualized)(0.52)%(0.07)%1.28 %0.35 %0.06 %
Three Months Ended
NET LOAN (RECOVERIES) CHARGE OFFS:3/31/202212/31/20219/30/20216/30/20213/31/2021
Real estate loans$(16,418)$(2,352)$40,542 $11,281 $2,234 
Commercial loans(1,529)144 1,117 181 (80)
Consumer loans47 (68)1,019 29 (56)
   Total net (recoveries) charge offs$(17,900)$(2,276)$42,678 $11,491 $2,098 
Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
NONPERFORMING ASSETS:3/31/202212/31/20219/30/20216/30/20213/31/2021
Loans on nonaccrual status (1)
$52,717 $54,616 $54,380 $111,008 $109,858 
Delinquent loans 90 days or more on accrual status3,090 2,131 4,567 4,759 384 
Accruing troubled debt restructured loans44,555 52,418 39,509 51,360 41,773 
Total nonperforming loans100,362 109,165 98,456 167,127 152,015 
Other real estate owned2,010 2,597 15,213 16,619 18,515 
Total nonperforming assets$102,372 $111,762 $113,669 $183,746 $170,530 
Nonperforming assets/total assets0.58 %0.62 %0.64 %1.05 %0.99 %
Nonperforming assets/loans receivable & OREO0.73 %0.80 %0.85 %1.37 %1.24 %
Nonperforming assets/total capital5.02 %5.34 %5.48 %8.78 %8.34 %
Nonperforming loans/loans receivable0.71 %0.78 %0.73 %1.24 %1.11 %
Nonaccrual loans/loans receivable0.37 %0.39 %0.41 %0.83 %0.80 %
Allowance for credit losses/loans receivable1.05 %1.01 %1.02 %1.41 %1.52 %
Allowance for credit losses/nonaccrual loans279.70 %257.34 %251.52 %170.67 %189.28 %
Allowance for credit losses/nonperforming loans146.92 %128.75 %138.92 %113.36 %136.79 %
Allowance for credit losses/nonperforming assets144.03 %125.76 %120.33 %103.11 %121.94 %
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $17.0 million, $19.5 million, $20.6 million, $23.6 million, and $25.0 million, at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.
NONACCRUAL LOANS BY TYPE:3/31/202212/31/20219/30/20216/30/20213/31/2021
Real estate loans$36,655 $39,756 $41,673 $95,622 $91,940 
Commercial loans8,686 11,025 10,991 12,217 14,080 
Consumer loans7,376 3,835 1,716 3,169 3,838 
   Total nonaccrual loans$52,717 $54,616 $54,380 $111,008 $109,858 
ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:3/31/202212/31/20219/30/20216/30/20213/31/2021
Retail buildings$24,356 $28,483 $11,280 $12,110 $6,319 
Hotels/motels— 472 — — — 
Gas stations/car washes193 197 202 206 210 
Mixed-use facilities2,836 2,846 7,937 7,967 3,377 
Warehouses5,321 5,366 4,908 14,099 14,124 
Other (2)
11,849 15,054 15,182 16,978 17,743 
Total$44,555 $52,418 $39,509 $51,360 $41,773 
(2) Includes commercial business, consumer, and other loans
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:3/31/202212/31/20219/30/20216/30/20213/31/2021
30 - 59 days$12,439 $29,723 $15,016 $22,466 $18,175 
60 - 89 days3,090 10,345 4,746 6,987 8,314 
   Total$15,529 $40,068 $19,762 $29,453 $26,489 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:3/31/202212/31/20219/30/20216/30/20213/31/2021
Real estate loans$6,097 $20,232 $10,359 $21,432 $18,331 
Commercial loans5,003 3,057 9,377 560 1,002 
Consumer loans4,429 16,779 26 7,461 7,156 
   Total$15,529 $40,068 $19,762 $29,453 $26,489 
CRITICIZED LOANS:3/31/202212/31/20219/30/20216/30/20213/31/2021
Special mention$166,958 $257,194 $306,766 $294,559 $280,974 
Substandard226,661 242,397 243,684 380,955 379,048 
   Total criticized loans$393,619 $499,591 $550,450 $675,514 $660,022 
Table Page 8
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. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below.
Three Months Ended
3/31/202212/31/20213/31/2021
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Average stockholders’ equity$2,090,755 $2,079,694 $2,047,506 
Less: Goodwill and core deposit intangible assets, net(471,921)(472,405)(473,961)
Average tangible common equity$1,618,834 $1,607,289 $1,573,545 
Net income$60,738 $51,623 $43,687 
Return on average tangible common equity (annualized)15.01 %12.85 %11.11 %
3/31/202212/31/20213/31/2021
TANGIBLE COMMON EQUITY
Total stockholders’ equity$2,041,057 $2,092,983 $2,045,581 
Less: Goodwill and core deposit intangible assets, net(471,634)(472,121)(473,648)
Tangible common equity$1,569,423 $1,620,862 $1,571,933 
Total assets$17,803,814 $17,889,061 $17,198,860 
Less: Goodwill and core deposit intangible assets, net(471,634)(472,121)(473,648)
Tangible assets$17,332,180 $17,416,940 $16,725,212 
Common shares outstanding120,327,689 120,006,452 123,480,494 
  Tangible common equity to tangible assets9.05 %9.31 %9.40 %
  Tangible common equity per share$13.04 $13.51 $12.73 
Three Months Ended
3/31/202212/31/20213/31/2021
PRE-PROVISION NET REVENUE
Net interest income before provision (credit) for credit losses$133,176 $133,318 $122,579 
Noninterest income13,186 13,097 8,804 
Revenue146,362 146,415 131,383 
Noninterest expense75,373 74,236 70,431 
Pre-provision net revenue$70,989 $72,179 $60,952 

Table Page 9