Attached files
| file | filename |
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| EX-99.3 - EX-99.3 - HOPE BANCORP INC | workvia2.htm |
| EX-99.2 - EX-99.2 - HOPE BANCORP INC | hope-03312021ex992.htm |
| 8-K - 8-K - HOPE BANCORP INC | hope-20210427.htm |
News Release
HOPE BANCORP REPORTS 2021 FIRST QUARTER FINANCIAL RESULTS
LOS ANGELES - April 27, 2021 - 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, 2021.
For the three months ended March 31, 2021, net income totaled $43.7 million, or $0.35 per diluted common share, representing an increase of 54% from $28.3 million, or $0.23 per diluted common share in the fourth quarter of 2020 and an increase of 68% from $26.0 million, or $0.21 per diluted common share, in the year-ago first quarter.
“First quarter results were solid, reflecting the continued benefits of the operational improvements that we implemented in 2020,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “We continued to support our customers in this pandemic-challenged business environment by providing $305 million in the second round of PPP funding, which contributed to new loan originations totaling $847 million in the first quarter. Noninterest bearing deposits increased 13% from year-end and accounted for a record high 38% of total deposits at March 31, 2021. This contributed to a sixth consecutive quarter of declining cost of deposits, which supported another quarter of net interest margin expansion for the Company. Additionally, we continued to proactively manage our expenses which resulted in noninterest expense to average assets improving to 1.65% from 1.69% in the preceding quarter.
“During the first quarter, we saw an expected increase in our criticized assets due to the impact COVID-19 has had on the travel industry, but remain well reserved given the considerable build up of our allowance for credit losses last year in anticipation of the eventual migration of these credits in the normal course of the credit administration process. We are, however, pleased to see the continued improvements in the economy, which supported a significantly lower provision expense this quarter and contributed to a 54% increase in net income quarter-over-quarter. With the vaccination campaign in the U.S. well underway and the COVID-related restrictions gradually being lifted, we have greater confidence in our ability to deliver enhanced performance as the year proceeds.”
Q1 2021 Highlights
•Net interest income before provision for credit losses increased 2% quarter-over-quarter to $122.6 million, benefiting from reduced interest expense due to lower cost of deposits.
•Net interest margin expanded 4 basis points quarter-over-quarter.
•Noninterest bearing demand deposits increased 13% quarter-over-quarter and increased as a percentage of total deposits to 38% from 34% at year-end 2020.
•Cost of interest bearing deposits decreased 15 basis points and total cost of deposits decreased 12 basis points quarter-over-quarter continuing a six-quarter trend of declining deposit costs.
•Loan originations totaled $847.1 million, including a second round of PPP fundings of $304.7 million, and contributed to a 1.0% increase in loans receivable quarter-over-quarter, or 4.1% annualized.
•Efficiency ratio improved to 53.61% from 53.77% quarter-over-quarter and noninterest expense to average assets improved to 1.65% from 1.69%.
•Net income increased 54% quarter-over-quarter and totaled $43.7 million, or $0.35 per diluted common share.
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Financial Highlights
| (dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | |||||||||||||||||||||||||
| 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Net income | $ | 43,687 | $ | 28,319 | $ | 25,953 | ||||||||||||||||||||
| Diluted earnings per share | $ | 0.35 | $ | 0.23 | $ | 0.21 | ||||||||||||||||||||
| Net interest income before provision for credit losses | $ | 122,579 | $ | 120,756 | $ | 119,291 | ||||||||||||||||||||
| Net interest margin | 3.06 | % | 3.02 | % | 3.31 | % | ||||||||||||||||||||
| Noninterest income | $ | 8,804 | $ | 11,415 | $ | 13,264 | ||||||||||||||||||||
| Noninterest expense | $ | 70,431 | $ | 71,063 | $ | 72,140 | ||||||||||||||||||||
| Net loans receivable | $ | 13,494,686 | $ | 13,356,472 | $ | 12,438,493 | ||||||||||||||||||||
| Deposits | $ | 14,301,269 | $ | 14,333,912 | $ | 12,836,567 | ||||||||||||||||||||
| Total cost of deposits | 0.36 | % | 0.48 | % | 1.34 | % | ||||||||||||||||||||
Nonaccrual loans(1) | $ | 109,858 | $ | 85,238 | $ | 72,639 | ||||||||||||||||||||
Nonperforming loans to loans receivable(1) | 1.11 | % | 0.91 | % | 0.93 | % | ||||||||||||||||||||
ACL to loans receivable | 1.52 | % | 1.52 | % | 1.15 | % | ||||||||||||||||||||
ACL to nonaccrual loans(1) | 189.28 | % | 242.55 | % | 199.51 | % | ||||||||||||||||||||
ACL to nonperforming assets(1) | 121.94 | % | 144.24 | % | 103.62 | % | ||||||||||||||||||||
| Provision for credit losses | $ | 3,300 | $ | 27,500 | $ | 28,000 | ||||||||||||||||||||
| Net charge offs | $ | 2,098 | $ | 608 | $ | 3,421 | ||||||||||||||||||||
| Return on average assets (“ROA”) | 1.02 | % | 0.67 | % | 0.67 | % | ||||||||||||||||||||
| Return on average equity (“ROE”) | 8.53 | % | 5.54 | % | 5.12 | % | ||||||||||||||||||||
Return on average tangible common equity (“ROTCE”)(2) | 11.11 | % | 7.21 | % | 6.69 | % | ||||||||||||||||||||
| Noninterest expense / average assets | 1.65 | % | 1.69 | % | 1.87 | % | ||||||||||||||||||||
| Efficiency ratio | 53.61 | % | 53.77 | % | 54.42 | % | ||||||||||||||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation.
(2) Return on average tangible common equity is a non-GAAP financial measure. A reconciliation of the Company’s return on average tangible common equity is provided in the accompanying financial information on Table Page 9.
Operating Results for the 2021 First Quarter
Net interest income before provision for credit losses for the 2021 first quarter increased 2% to $122.6 million from $120.8 million in the 2020 fourth quarter and increased 3% from $119.3 million in the 2020 first quarter. The Company attributed the increase in net interest income primarily to meaningful reductions in interest expense due to lower trending cost of deposits.
The net interest margin for the 2021 first quarter increased 4 basis points to 3.06% from 3.02% in the preceding 2020 fourth quarter, reflecting the benefits of lower deposit costs, partially offset by lower weighted average yield on loans. The net interest margin in the prior-year first quarter was 3.31%.
The weighted average yield on loans for the 2021 first quarter was 3.94%, compared with 4.03% in the preceding fourth quarter and 5.06% in the year-ago first quarter.
The weighted average cost of deposits for the 2021 first quarter decreased for the sixth consecutive quarter to 0.36%, representing a 12 basis point decrease from 0.48% for the 2020 fourth quarter and a 98 basis point decrease from 1.34% for the 2020 first quarter. The Company attributed the significant improvements in the weighted average cost of deposits to a continuing shift in its deposit mix to lower-cost core deposits and the ongoing downward repricing of interest bearing deposits. The cost of interest bearing deposits was 0.56%, 0.71% and 1.76% at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
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Noninterest income totaled $8.8 million for the 2021 first quarter, compared with $11.4 million in the preceding fourth quarter. The largest factors contributing to the decrease included a $1.5 million decline in quarter-over-quarter swap fee income and a $1.2 million reduction in deposit service fees which was largely attributable to the Company’s exiting certain money service business accounts. These decreases were partially offset by increases in loan servicing fees and gain on sales of residential mortgage loans. Noninterest income in the year-ago first quarter totaled $13.3 million.
Noninterest expense for the 2021 first quarter decreased to $70.4 million from $71.1 million in the preceding fourth quarter and $72.1 million in the year-ago first quarter.
Salaries and employee benefits expense for the 2021 first quarter increased 1% to $41.2 million from $40.9 million in the preceding fourth quarter and included higher payroll taxes and 401k contributions partially offset by an increase in loan origination costs of $1.4 million related to the second round of PPP funding. On a year-over-year basis, salaries and employee benefits expense decreased 3% from $42.5 million in the 2020 first quarter.
The Company’s efficiency ratio for the 2021 first quarter improved to 53.61% from 53.77% for the preceding fourth quarter and from 54.42% for the year-ago first quarter. Noninterest expense as a percentage of average assets improved to 1.65% for the 2021 first quarter from 1.69% for the 2020 fourth quarter and from 1.87% for the 2020 first quarter.
The effective tax rate for the 2021 first quarter was 24.2%, compared with 15.7% for the preceding fourth quarter and 19.9% in the year-ago first quarter. The Company noted that its effective tax rate for 2020 fourth quarter reflected a lower tax provision based on adjustments to applicable state apportionment factors.
Balance Sheet Summary
New loan originations funded during the 2021 first quarter totaled $847.1 million and included second round PPP funding of $304.7 million, traditional SBA loan production of $36.8 million and residential mortgage loan originations of $69.8 million. For the preceding 2020 fourth quarter, new loan originations funded totaled $844.2 million, including SBA loan production of $25.5 million, residential mortgage loan originations of $62.5 million and fundings related to two new warehouse mortgage lines of credit of $106.8 million. In the year-ago first quarter, new loan originations funded totaled $624.5 million, including SBA loan production of $49.8 million and residential mortgage loan originations of $37.4 million. There were no new warehouse mortgage lines of credit established in the 2021 and 2020 first quarters.
At March 31, 2021, loans receivable increased 1% to $13.70 billion from $13.56 billion at December 31, 2020 and increased 9% from $12.58 billion at March 31, 2020.
Total deposits at March 31, 2021 amounted to $14.30 billion, down slightly from $14.33 billion at December 31, 2020 but up 11% from $12.84 billion a year ago at March 31, 2020. Reflecting a continuing positive shift in the mix of deposits, noninterest bearing demand deposits increased 13% quarter-over-quarter and increased 80% year-over-year and accounted for 38%, 34% and 24% of total deposits at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
Following is the deposit composition as of March 31, 2021, December 31, 2020 and March 31, 2020:
| (dollars in thousands) (unaudited) | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,427,174 | $ | 4,814,254 | 13 | % | $ | 3,010,143 | 80 | % | |||||||||||||||||||
| Money market and other | 5,009,419 | 5,232,413 | (4) | % | 4,851,000 | 3 | % | ||||||||||||||||||||||
| Saving deposits | 305,326 | 300,770 | 2 | % | 272,577 | 12 | % | ||||||||||||||||||||||
| Time deposits | 3,559,350 | 3,986,475 | (11) | % | 4,702,847 | (24) | % | ||||||||||||||||||||||
| Total deposit balances | $ | 14,301,269 | $ | 14,333,912 | — | % | $ | 12,836,567 | 11 | % | |||||||||||||||||||
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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, 2021, December 31, 2020 and March 31, 2020:
| Deposit Breakdown | Cost of Deposits | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | Q1 2021 | Q4 2020 | Q1 2020 | |||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 38.0 | % | 33.6 | % | 23.5 | % | — | % | — | % | — | % | |||||||||||||||||||||||
| Money market and other | 35.0 | % | 36.5 | % | 37.8 | % | 0.42 | % | 0.45 | % | 1.42 | % | |||||||||||||||||||||||
| Saving deposits | 2.1 | % | 2.1 | % | 2.1 | % | 1.17 | % | 1.17 | % | 1.19 | % | |||||||||||||||||||||||
| Time deposits | 24.9 | % | 27.8 | % | 36.6 | % | 0.69 | % | 0.98 | % | 2.09 | % | |||||||||||||||||||||||
| Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | 0.36 | % | 0.48 | % | 1.34 | % | |||||||||||||||||||||||
Allowance for Credit Losses
The 2021 first quarter provision for credit losses under the CECL methodology was $3.3 million, compared with $27.5 million for the preceding fourth quarter and $28.0 million for the 2020 first quarter. The provision for credit losses for the 2021 first quarter reflects updated macroeconomic variables incorporating the Moody’s Analytics Consensus scenario that continue to show improving trends that support a strong economic recovery and taking into account the Company’s significant buildup in reserves in prior periods in consideration of the pandemic’s expected impact on its loan portfolio, as well as its low level of credit losses.
Following is the Allowance for Credit Losses as of March 31, 2021, December 31, 2020 and March 31, 2020:
| (dollars in thousands) (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||||||||||
| Allowance for credit losses | $ | 207,943 | $ | 206,741 | $ | 144,923 | ||||||||||||||||||||
| Allowance for credit loss/loans receivable | 1.52 | % | 1.52 | % | 1.15 | % | ||||||||||||||||||||
| Allowance for credit losses/nonperforming loans | 136.79 | % | 167.80 | % | 124.06 | % | ||||||||||||||||||||
Credit Quality
Following are the components of nonperforming assets as of March 31, 2021, December 31, 2020 and March 31, 2020:
| (dollars in thousands) (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||||||||||
Loans on nonaccrual status (1) | $ | 109,858 | $ | 85,238 | $ | 72,639 | ||||||||||||||||||||
Delinquent loans 90 days or more on accrual status | 384 | 614 | 387 | |||||||||||||||||||||||
| Accruing troubled debt restructured loans | 41,773 | 37,354 | 43,789 | |||||||||||||||||||||||
| Total nonperforming loans | 152,015 | 123,206 | 116,815 | |||||||||||||||||||||||
| Other real estate owned | 18,515 | 20,121 | 23,039 | |||||||||||||||||||||||
| Total nonperforming assets | $ | 170,530 | $ | 143,327 | $ | 139,854 | ||||||||||||||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $25.0 million, $26.5 million and $28.8 million, at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
The $24.6 million increase in loans on nonaccrual status largely reflects the addition of a $23.5 million retail commercial real estate loan. The Company noted that this was a unique situation due to the borrower’s involvement in a legal dispute and not reflective of any systemic deterioration for these property types.
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Following are the components of criticized loan balances as of March 31, 2021, December 31, 2020 and March 31, 2020:
| (dollars in thousands) (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||||||||||
| Special Mention | $ | 280,974 | $ | 184,941 | $ | 122,279 | ||||||||||||||||||||
| Classified | 379,048 | 366,557 | 278,783 | |||||||||||||||||||||||
| Criticized | $ | 660,022 | $ | 551,498 | $ | 401,062 | ||||||||||||||||||||
The increase in criticized loans quarter-over-quarter primarily reflects downgrades in the Company’s hotel/motel portfolio to the Special Mention category. The Company noted that the performance of these loans was consistent with expectations when reserves were increased in 2020 and that no new issues for these borrowers have emerged.
Net charge offs in the 2021 first quarter totaled $2.1 million, or 0.06% of average loans receivable on an annualized basis. This compares with net charge offs of $608,000, or 0.02% of average loans receivable on an annualized basis for the 2020 fourth quarter and $3.4 million, or 0.11% of average loans receivable on an annualized basis for the 2020 first quarter.
Capital
At March 31, 2021, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” financial institution. Following are capital ratios for the Company as of March 31, 2021, December 31, 2020 and March 31, 2020:
Hope Bancorp, Inc. (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | Minimum Guideline for “Well-Capitalized” Bank | |||||||||||||||||||
| Common Equity Tier 1 Capital | 11.08% | 10.94% | 11.44% | 6.50% | |||||||||||||||||||
| Tier 1 Leverage Ratio | 10.15% | 10.22% | 10.88% | 5.00% | |||||||||||||||||||
| Tier 1 Risk-Based Ratio | 11.78% | 11.64% | 12.19% | 8.00% | |||||||||||||||||||
| Total Risk-Based Ratio | 13.03% | 12.87% | 13.08% | 10.00% | |||||||||||||||||||
Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of March 31, 2021, December 31, 2020 and March 31, 2020:
| (unaudited) | 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||
Tangible common equity per share (1) | $12.73 | $12.81 | $12.52 | ||||||||||||||
Tangible common equity to tangible assets (2) | 9.40% | 9.50% | 9.92% | ||||||||||||||
(1) Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Both tangible common equity and tangible common equity per share are non-GAAP financial measures. A reconciliation of the Company’s total stockholders’ equity to tangible common equity is provided in the accompanying financial information on Table Page 9.
(2) Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity to tangible assets is a non-GAAP financial measure. A reconciliation of the Company’s total assets to tangible assets is provided in the accompanying financial information on Table Page 9.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Wednesday, April 28, 2021 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its first quarter ended March 31, 2021. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103
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(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 May 5, 2021, replay access code 10154357.
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 $17.2 billion in total assets as of March 31, 2021. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. 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: | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Cash and due from banks | $ | 376,666 | $ | 350,579 | 7 | % | $ | 802,033 | (53) | % | |||||||||||||||||||
| Securities available for sale, at fair value | 2,233,744 | 2,285,611 | (2) | % | 1,718,702 | 30 | % | ||||||||||||||||||||||
| Federal Home Loan Bank (“FHLB”) stock and other investments | 102,242 | 105,591 | (3) | % | 96,956 | 5 | % | ||||||||||||||||||||||
| Loans held for sale, at the lower of cost or fair value | 19,672 | 17,743 | 11 | % | 8,281 | 138 | % | ||||||||||||||||||||||
| Loans receivable | 13,702,629 | 13,563,213 | 1 | % | 12,583,416 | 9 | % | ||||||||||||||||||||||
| Allowance for credit losses | (207,943) | (206,741) | 1 | % | (144,923) | 43 | % | ||||||||||||||||||||||
| Net loans receivable | 13,494,686 | 13,356,472 | 1 | % | 12,438,493 | 8 | % | ||||||||||||||||||||||
| Accrued interest receivable | 60,498 | 59,430 | 2 | % | 30,450 | 99 | % | ||||||||||||||||||||||
| Premises and equipment, net | 47,918 | 48,409 | (1) | % | 51,392 | (7) | % | ||||||||||||||||||||||
| Bank owned life insurance | 77,089 | 76,765 | — | % | 76,429 | 1 | % | ||||||||||||||||||||||
| Goodwill | 464,450 | 464,450 | — | % | 464,450 | — | % | ||||||||||||||||||||||
| Servicing assets | 12,084 | 12,692 | (5) | % | 14,847 | (19) | % | ||||||||||||||||||||||
| Other intangible assets, net | 9,198 | 9,708 | (5) | % | 11,302 | (19) | % | ||||||||||||||||||||||
| Other assets | 300,613 | 319,214 | (6) | % | 308,099 | (2) | % | ||||||||||||||||||||||
| Total assets | $ | 17,198,860 | $ | 17,106,664 | 1 | % | $ | 16,021,434 | 7 | % | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Deposits | $ | 14,301,269 | $ | 14,333,912 | — | % | $ | 12,836,567 | 11 | % | |||||||||||||||||||
| FHLB advances | 400,000 | 250,000 | 60 | % | 675,000 | (41) | % | ||||||||||||||||||||||
| Convertible notes, net | 215,504 | 204,565 | 5 | % | 200,716 | 7 | % | ||||||||||||||||||||||
| Subordinated debentures | 104,469 | 104,178 | — | % | 103,318 | 1 | % | ||||||||||||||||||||||
| Accrued interest payable | 8,611 | 14,706 | (41) | % | 30,436 | (72) | % | ||||||||||||||||||||||
| Other liabilities | 123,426 | 145,558 | (15) | % | 157,309 | (22) | % | ||||||||||||||||||||||
| Total liabilities | $ | 15,153,279 | $ | 15,052,919 | 1 | % | $ | 14,003,346 | 8 | % | |||||||||||||||||||
| Stockholders’ Equity: | |||||||||||||||||||||||||||||
| Common stock, $0.001 par value | $ | 136 | $ | 136 | — | % | $ | 136 | — | % | |||||||||||||||||||
| Capital surplus | 1,417,137 | 1,434,916 | (1) | % | 1,429,275 | (1) | % | ||||||||||||||||||||||
| Retained earnings | 823,085 | 785,940 | 5 | % | 752,228 | 9 | % | ||||||||||||||||||||||
| Treasury stock, at cost | (200,000) | (200,000) | — | % | (200,000) | — | % | ||||||||||||||||||||||
| Accumulated other comprehensive gain, net | 5,223 | 32,753 | (84) | % | 36,449 | (86) | % | ||||||||||||||||||||||
| Total stockholders’ equity | 2,045,581 | 2,053,745 | — | % | 2,018,088 | 1 | % | ||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 17,198,860 | $ | 17,106,664 | 1 | % | $ | 16,021,434 | 7 | % | |||||||||||||||||||
| Common stock shares - authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||||||||||||||||||
| Common stock shares - outstanding | 123,480,494 | 123,264,864 | 123,169,404 | ||||||||||||||||||||||||||
| Treasury stock shares | 12,661,581 | 12,661,581 | 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 | |||||||||||||||||||||||||||||
| 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | |||||||||||||||||||||||||
| Interest and fees on loans | $ | 129,736 | $ | 132,117 | (2) | % | $ | 154,230 | (16) | % | |||||||||||||||||||
| Interest on securities | 7,915 | 9,014 | (12) | % | 10,609 | (25) | % | ||||||||||||||||||||||
| Interest on federal funds sold and other investments | 642 | 598 | 7 | % | 2,029 | (68) | % | ||||||||||||||||||||||
| Total interest income | 138,293 | 141,729 | (2) | % | 166,868 | (17) | % | ||||||||||||||||||||||
| Interest on deposits | 12,770 | 16,934 | (25) | % | 41,113 | (69) | % | ||||||||||||||||||||||
| Interest on other borrowings and convertible notes | 2,944 | 4,039 | (27) | % | 6,464 | (54) | % | ||||||||||||||||||||||
| Total interest expense | 15,714 | 20,973 | (25) | % | 47,577 | (67) | % | ||||||||||||||||||||||
| Net interest income before provision for credit losses | 122,579 | 120,756 | 2 | % | 119,291 | 3 | % | ||||||||||||||||||||||
| Provision for credit losses | 3,300 | 27,500 | (88) | % | 28,000 | (88) | % | ||||||||||||||||||||||
| Net interest income after provision for credit losses | 119,279 | 93,256 | 28 | % | 91,291 | 31 | % | ||||||||||||||||||||||
| Service fees on deposit accounts | 1,790 | 2,991 | (40) | % | 4,133 | (57) | % | ||||||||||||||||||||||
| International service fees | 841 | 696 | 21 | % | 790 | 6 | % | ||||||||||||||||||||||
| Loan servicing fees, net | 1,044 | 566 | 84 | % | 365 | 186 | % | ||||||||||||||||||||||
| Wire transfer fees | 844 | 867 | (3) | % | 998 | (15) | % | ||||||||||||||||||||||
| Net gains on sales of other loans | 2,096 | 1,618 | 30 | % | 1,855 | 13 | % | ||||||||||||||||||||||
| Other income and fees | 2,189 | 4,677 | (53) | % | 5,123 | (57) | % | ||||||||||||||||||||||
| Total noninterest income | 8,804 | 11,415 | (23) | % | 13,264 | (34) | % | ||||||||||||||||||||||
| Salaries and employee benefits | 41,216 | 40,911 | 1 | % | 42,502 | (3) | % | ||||||||||||||||||||||
| Occupancy | 6,967 | 7,200 | (3) | % | 7,410 | (6) | % | ||||||||||||||||||||||
| Furniture and equipment | 4,186 | 4,122 | 2 | % | 4,259 | (2) | % | ||||||||||||||||||||||
| Advertising and marketing | 1,625 | 1,695 | (4) | % | 1,673 | (3) | % | ||||||||||||||||||||||
| Data processing and communications | 2,737 | 2,235 | 22 | % | 2,631 | 4 | % | ||||||||||||||||||||||
| Professional fees | 2,903 | 1,847 | 57 | % | 3,300 | (12) | % | ||||||||||||||||||||||
| FDIC assessment | 1,255 | 1,166 | 8 | % | 1,559 | (19) | % | ||||||||||||||||||||||
| Credit related expenses | 2,218 | 2,001 | 11 | % | 1,662 | 33 | % | ||||||||||||||||||||||
| OREO expense (income), net | 281 | (86) | N/A | 843 | (67) | % | |||||||||||||||||||||||
| Branch restructuring costs | — | 2,367 | (100) | % | — | — | % | ||||||||||||||||||||||
| Other | 7,043 | 7,605 | (7) | % | 6,301 | 12 | % | ||||||||||||||||||||||
| Total noninterest expense | 70,431 | 71,063 | (1) | % | 72,140 | (2) | % | ||||||||||||||||||||||
| Income before income taxes | 57,652 | 33,608 | 72 | % | 32,415 | 78 | % | ||||||||||||||||||||||
| Income tax provision | 13,965 | 5,289 | 164 | % | 6,462 | 116 | % | ||||||||||||||||||||||
| Net income | $ | 43,687 | $ | 28,319 | 54 | % | $ | 25,953 | 68 | % | |||||||||||||||||||
| Earnings Per Common Share: | |||||||||||||||||||||||||||||
| Basic | $ | 0.35 | $ | 0.23 | $ | 0.21 | |||||||||||||||||||||||
| Diluted | $ | 0.35 | $ | 0.23 | $ | 0.21 | |||||||||||||||||||||||
| Weighted Average Shares Outstanding: | |||||||||||||||||||||||||||||
| Basic | 123,324,745 | 123,264,172 | 124,295,327 | ||||||||||||||||||||||||||
| Diluted | 124,336,130 | 123,874,229 | 124,676,296 | ||||||||||||||||||||||||||
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: | 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||
| ROA | 1.02 | % | 0.67 | % | 0.67 | % | |||||||||||
| ROE | 8.53 | % | 5.54 | % | 5.12 | % | |||||||||||
ROTCE (1) | 11.11 | % | 7.21 | % | 6.69 | % | |||||||||||
| Net interest margin | 3.06 | % | 3.02 | % | 3.31 | % | |||||||||||
| Efficiency ratio | 53.61 | % | 53.77 | % | 54.42 | % | |||||||||||
| Noninterest expense / average assets | 1.65 | % | 1.69 | % | 1.87 | % | |||||||||||
(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: | 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||
| Accretion on purchased non-impaired loans | $ | 705 | $ | 452 | $ | 1,059 | |||||||||||
| Accretion on purchased credit deteriorated/purchased credit impaired loans | 2,255 | 3,064 | 9,449 | ||||||||||||||
| Amortization of premium on low income housing tax credits | (73) | (71) | (71) | ||||||||||||||
| Accretion of discount on acquired subordinated debt | (290) | (289) | (283) | ||||||||||||||
| Amortization of core deposit intangibles | (509) | (531) | (531) | ||||||||||||||
| Total acquisition accounting adjustments | $ | 2,088 | $ | 2,625 | $ | 9,623 | |||||||||||
Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest | Annualized | Interest | Annualized | Interest | Annualized | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | |||||||||||||||||||||||||||||||||||||||||||||
| Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | |||||||||||||||||||||||||||||||||||||||||||||
| INTEREST EARNING ASSETS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, including loans held for sale | $ | 13,346,264 | $ | 129,736 | 3.94 | % | $ | 13,046,443 | $ | 132,117 | 4.03 | % | $ | 12,259,848 | $ | 154,230 | 5.06 | % | |||||||||||||||||||||||||||||||||||
| Securities available for sale | 2,267,409 | 7,915 | 1.42 | % | 2,123,025 | 9,014 | 1.69 | % | 1,712,033 | 10,609 | 2.49 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB stock and other investments | 640,392 | 642 | 0.41 | % | 749,281 | 598 | 0.32 | % | 519,309 | 2,029 | 1.57 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | $ | 16,254,065 | $ | 138,293 | 3.45 | % | $ | 15,918,749 | $ | 141,729 | 3.54 | % | $ | 14,491,190 | $ | 166,868 | 4.63 | % | |||||||||||||||||||||||||||||||||||
| INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand, interest bearing | $ | 5,256,579 | $ | 5,490 | 0.42 | % | $ | 4,910,649 | $ | 5,541 | 0.45 | % | $ | 4,204,406 | $ | 14,880 | 1.42 | % | |||||||||||||||||||||||||||||||||||
| Savings | 301,184 | 870 | 1.17 | % | 305,341 | 898 | 1.17 | % | 274,075 | 808 | 1.19 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 3,767,109 | 6,410 | 0.69 | % | 4,240,500 | 10,495 | 0.98 | % | 4,900,405 | 25,425 | 2.09 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 9,324,872 | 12,770 | 0.56 | % | 9,456,490 | 16,934 | 0.71 | % | 9,378,886 | 41,113 | 1.76 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB advances | 215,889 | 642 | 1.21 | % | 204,900 | 657 | 1.28 | % | 594,890 | 2,647 | 1.79 | % | |||||||||||||||||||||||||||||||||||||||||
| Convertible notes, net | 215,002 | 1,322 | 2.46 | % | 203,807 | 2,383 | 4.58 | % | 199,960 | 2,346 | 4.64 | % | |||||||||||||||||||||||||||||||||||||||||
| Subordinated debentures | 100,392 | 980 | 3.90 | % | 100,118 | 999 | 3.90 | % | 99,252 | 1,471 | 5.86 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | $ | 9,856,155 | $ | 15,714 | 0.65 | % | $ | 9,965,315 | $ | 20,973 | 0.84 | % | $ | 10,272,988 | $ | 47,577 | 1.86 | % | |||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 5,052,532 | 4,637,584 | 2,963,136 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total funding liabilities/cost of funds | $ | 14,908,687 | 0.43 | % | $ | 14,602,899 | 0.57 | % | $ | 13,236,124 | 1.45 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest income/net interest spread | $ | 122,579 | 2.80 | % | $ | 120,756 | 2.70 | % | $ | 119,291 | 2.77 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.06 | % | 3.02 | % | 3.31 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,052,532 | $ | — | — | % | $ | 4,637,584 | $ | — | — | % | $ | 2,963,136 | $ | — | — | % | |||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 9,324,872 | 12,770 | 0.56 | % | 9,456,490 | 16,934 | 0.71 | % | 9,378,886 | 41,113 | 1.76 | % | |||||||||||||||||||||||||||||||||||||||||
| Total deposits | $ | 14,377,404 | $ | 12,770 | 0.36 | % | $ | 14,094,074 | $ | 16,934 | 0.48 | % | $ | 12,342,022 | $ | 41,113 | 1.34 | % | |||||||||||||||||||||||||||||||||||
Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||
| AVERAGE BALANCES: | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Loans receivable, including loans held for sale | $ | 13,346,264 | $ | 13,046,443 | 2 | % | $ | 12,259,848 | 9 | % | |||||||||||||||||||
| Investments | 2,907,801 | 2,872,306 | 1 | % | 2,231,342 | 30 | % | ||||||||||||||||||||||
| Interest earning assets | 16,254,065 | 15,918,749 | 2 | % | 14,491,190 | 12 | % | ||||||||||||||||||||||
| Total assets | 17,115,407 | 16,824,700 | 2 | % | 15,446,807 | 11 | % | ||||||||||||||||||||||
| Interest bearing deposits | 9,324,872 | 9,456,490 | (1) | % | 9,378,886 | (1) | % | ||||||||||||||||||||||
| Interest bearing liabilities | 9,856,155 | 9,965,315 | (1) | % | 10,272,988 | (4) | % | ||||||||||||||||||||||
| Noninterest bearing demand deposits | 5,052,532 | 4,637,584 | 9 | % | 2,963,136 | 71 | % | ||||||||||||||||||||||
| Stockholders’ equity | 2,047,506 | 2,045,959 | — | % | 2,027,595 | 1 | % | ||||||||||||||||||||||
| Net interest earning assets | 6,397,910 | 5,953,434 | 7 | % | 4,218,202 | 52 | % | ||||||||||||||||||||||
| LOAN PORTFOLIO COMPOSITION: | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Commercial loans | $ | 4,346,244 | $ | 4,157,787 | 5 | % | $ | 3,067,132 | 42 | % | |||||||||||||||||||
| Real estate loans | 8,811,423 | 8,772,134 | — | % | 8,681,222 | 1 | % | ||||||||||||||||||||||
| Consumer and other loans | 544,962 | 633,292 | (14) | % | 835,062 | (35) | % | ||||||||||||||||||||||
| Loans, net of deferred loan fees and costs | 13,702,629 | 13,563,213 | 1 | % | 12,583,416 | 9 | % | ||||||||||||||||||||||
| Allowance for credit losses | (207,943) | (206,741) | 1 | % | (144,923) | 43 | % | ||||||||||||||||||||||
| Loan receivable, net | $ | 13,494,686 | $ | 13,356,472 | 1 | % | $ | 12,438,493 | 8 | % | |||||||||||||||||||
| REAL ESTATE LOANS BY PROPERTY TYPE: | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Retail buildings | $ | 2,317,017 | $ | 2,293,396 | 1 | % | $ | 2,314,885 | — | % | |||||||||||||||||||
| Hotels/motels | 1,619,661 | 1,634,287 | (1) | % | 1,706,082 | (5) | % | ||||||||||||||||||||||
| Gas stations/car washes | 913,176 | 892,110 | 2 | % | 852,077 | 7 | % | ||||||||||||||||||||||
| Mixed-use facilities | 752,729 | 750,867 | — | % | 770,825 | (2) | % | ||||||||||||||||||||||
| Warehouses | 1,092,549 | 1,091,389 | — | % | 1,024,832 | 7 | % | ||||||||||||||||||||||
| Multifamily | 531,306 | 518,498 | 2 | % | 481,425 | 10 | % | ||||||||||||||||||||||
| Other | 1,584,985 | 1,591,587 | — | % | 1,531,096 | 4 | % | ||||||||||||||||||||||
| Total | $ | 8,811,423 | $ | 8,772,134 | — | % | $ | 8,681,222 | 1 | % | |||||||||||||||||||
| DEPOSIT COMPOSITION | 3/31/2021 | 12/31/2020 | % change | 3/31/2020 | % change | ||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,427,174 | $ | 4,814,254 | 13 | % | $ | 3,010,143 | 80 | % | |||||||||||||||||||
| Money market and other | 5,009,419 | 5,232,413 | (4) | % | 4,851,000 | 3 | % | ||||||||||||||||||||||
| Saving deposits | 305,326 | 300,770 | 2 | % | 272,577 | 12 | % | ||||||||||||||||||||||
| Time deposits | 3,559,350 | 3,986,475 | (11) | % | 4,702,847 | (24) | % | ||||||||||||||||||||||
| Total deposit balances | $ | 14,301,269 | $ | 14,333,912 | — | % | $ | 12,836,567 | 11 | % | |||||||||||||||||||
| DEPOSIT COMPOSITION (%) | 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 38.0 | % | 33.6 | % | 23.5 | % | |||||||||||||||||||||||
| Money market and other | 35.0 | % | 36.5 | % | 37.8 | % | |||||||||||||||||||||||
| Saving deposits | 2.1 | % | 2.1 | % | 2.1 | % | |||||||||||||||||||||||
| Time deposits | 24.9 | % | 27.8 | % | 36.6 | % | |||||||||||||||||||||||
| Total deposit balances | 100.0 | % | 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: | 3/31/2021 | 12/31/2020 | 3/31/2020 | ||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 2,045,581 | $ | 2,053,745 | $ | 2,018,088 | |||||||||||||||||||||||
| Common equity tier 1 ratio | 11.08 | % | 10.94 | % | 11.44 | % | |||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 11.78 | % | 11.64 | % | 12.19 | % | |||||||||||||||||||||||
| Total risk-based capital ratio | 13.03 | % | 12.87 | % | 13.08 | % | |||||||||||||||||||||||
| Tier 1 leverage ratio | 10.15 | % | 10.22 | % | 10.88 | % | |||||||||||||||||||||||
| Total risk weighted assets | $ | 14,338,828 | $ | 14,341,456 | $ | 13,348,162 | |||||||||||||||||||||||
| Book value per common share | $ | 16.57 | $ | 16.66 | $ | 16.38 | |||||||||||||||||||||||
Tangible common equity to tangible assets 1 | 9.40 | % | 9.50 | % | 9.92 | % | |||||||||||||||||||||||
Tangible common equity per share 1 | $ | 12.73 | $ | 12.81 | $ | 12.52 | |||||||||||||||||||||||
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: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Balance at beginning of period | $ | 206,741 | $ | 179,849 | $ | 161,771 | $ | 144,923 | $ | 94,144 | |||||||||||||||||||
| CECL day 1 adoption impact | — | — | — | — | 26,200 | ||||||||||||||||||||||||
| Provision for credit losses | 3,300 | 27,500 | 22,000 | 17,500 | 28,000 | ||||||||||||||||||||||||
| Recoveries | 1,423 | 2,207 | 2,428 | 252 | 2,536 | ||||||||||||||||||||||||
| Charge offs | (3,521) | (2,815) | (6,350) | (904) | (5,957) | ||||||||||||||||||||||||
| Balance at end of period | $ | 207,943 | $ | 206,741 | $ | 179,849 | $ | 161,771 | $ | 144,923 | |||||||||||||||||||
| Net charge offs/average loans receivable (annualized) | 0.06 | % | 0.02 | % | 0.12 | % | 0.02 | % | 0.11 | % | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| NET LOAN CHARGE OFFS (RECOVERIES): | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Real estate loans | $ | 2,234 | $ | (726) | $ | 5,154 | $ | 148 | $ | 2,230 | |||||||||||||||||||
| Commercial loans | (80) | 1,167 | (1,451) | 240 | 676 | ||||||||||||||||||||||||
| Consumer loans | (56) | 167 | 219 | 264 | 515 | ||||||||||||||||||||||||
| Total net charge offs | $ | 2,098 | $ | 608 | $ | 3,922 | $ | 652 | $ | 3,421 | |||||||||||||||||||
Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| NONPERFORMING ASSETS: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
Loans on nonaccrual status 3 | $ | 109,858 | $ | 85,238 | $ | 69,205 | $ | 82,137 | $ | 72,639 | |||||||||||||||||||
| Delinquent loans 90 days or more on accrual status | 384 | 614 | 1,537 | 430 | 387 | ||||||||||||||||||||||||
| Accruing troubled debt restructured loans | 41,773 | 37,354 | 35,429 | 44,026 | 43,789 | ||||||||||||||||||||||||
| Total nonperforming loans | 152,015 | 123,206 | 106,171 | 126,593 | 116,815 | ||||||||||||||||||||||||
| Other real estate owned | 18,515 | 20,121 | 18,410 | 20,983 | 23,039 | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 170,530 | $ | 143,327 | $ | 124,581 | $ | 147,576 | $ | 139,854 | |||||||||||||||||||
| Nonperforming assets/total assets | 0.99 | % | 0.84 | % | 0.74 | % | 0.86 | % | 0.87 | % | |||||||||||||||||||
| Nonperforming assets/loans receivable & OREO | 1.24 | % | 1.06 | % | 0.95 | % | 1.14 | % | 1.11 | % | |||||||||||||||||||
| Nonperforming assets/total capital | 8.34 | % | 6.98 | % | 6.11 | % | 7.27 | % | 6.93 | % | |||||||||||||||||||
| Nonperforming loans/loans receivable | 1.11 | % | 0.91 | % | 0.81 | % | 0.98 | % | 0.93 | % | |||||||||||||||||||
| Nonaccrual loans/loans receivable | 0.80 | % | 0.63 | % | 0.53 | % | 0.64 | % | 0.58 | % | |||||||||||||||||||
| Allowance for credit losses/loans receivable | 1.52 | % | 1.52 | % | 1.37 | % | 1.26 | % | 1.15 | % | |||||||||||||||||||
| Allowance for credit losses/nonaccrual loans | 189.28 | % | 242.55 | % | 259.88 | % | 196.95 | % | 199.51 | % | |||||||||||||||||||
| Allowance for credit losses/nonperforming loans | 136.79 | % | 167.80 | % | 169.40 | % | 127.79 | % | 124.06 | % | |||||||||||||||||||
| Allowance for credit losses/nonperforming assets | 121.94 | % | 144.24 | % | 144.36 | % | 109.62 | % | 103.62 | % | |||||||||||||||||||
3 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $25.0 million, $26.5 million, $26.2 million, $30.3 million, and $28.8 million at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, respectively. | |||||||||||||||||||||||||||||
| NONACCRUAL LOANS BY TYPE: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Real estate loans | $ | 91,940 | $ | 67,450 | $ | 51,739 | $ | 64,060 | $ | 56,787 | |||||||||||||||||||
| Commercial loans | 14,080 | 13,911 | 13,022 | 12,079 | 12,747 | ||||||||||||||||||||||||
| Consumer loans | 3,838 | 3,877 | 4,444 | 5,998 | 3,105 | ||||||||||||||||||||||||
| Total nonaccrual loans | $ | 109,858 | $ | 85,238 | $ | 69,205 | $ | 82,137 | $ | 72,639 | |||||||||||||||||||
| BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Retail buildings | $ | 6,319 | $ | 5,408 | $ | 5,451 | $ | 5,526 | $ | 5,014 | |||||||||||||||||||
| Gas stations/car washes | 210 | 219 | 224 | 1,789 | 1,675 | ||||||||||||||||||||||||
| Mixed-use facilities | 3,377 | 3,521 | 4,323 | 3,583 | 3,157 | ||||||||||||||||||||||||
| Warehouses | 14,124 | 7,296 | 7,320 | 13,433 | 13,381 | ||||||||||||||||||||||||
Other 5 | 17,743 | 20,910 | 18,111 | 19,695 | 20,562 | ||||||||||||||||||||||||
| Total | $ | 41,773 | $ | 37,354 | $ | 35,429 | $ | 44,026 | $ | 43,789 | |||||||||||||||||||
5 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: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| 30 - 59 days | $ | 18,175 | $ | 11,347 | $ | 5,962 | $ | 18,857 | $ | 37,866 | |||||||||||||||||||
| 60 - 89 days | 8,314 | 16,826 | 58,065 | 29,975 | 2,605 | ||||||||||||||||||||||||
| Total | $ | 26,489 | $ | 28,173 | $ | 64,027 | $ | 48,832 | $ | 40,471 | |||||||||||||||||||
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Real estate loans | $ | 18,331 | $ | 15,689 | $ | 60,510 | $ | 27,245 | $ | 23,753 | |||||||||||||||||||
| Commercial loans | 1,002 | 3,393 | 624 | 5,987 | 4,583 | ||||||||||||||||||||||||
| Consumer loans | 7,156 | 9,091 | 2,893 | 15,600 | 12,135 | ||||||||||||||||||||||||
| Total | $ | 26,489 | $ | 28,173 | $ | 64,027 | $ | 48,832 | $ | 40,471 | |||||||||||||||||||
| CRITICIZED LOANS: | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||||||||||||||
| Special mention | $ | 280,974 | $ | 184,941 | $ | 153,388 | $ | 127,149 | $ | 122,279 | |||||||||||||||||||
| Substandard | 379,048 | 366,556 | 311,902 | 299,357 | 278,771 | ||||||||||||||||||||||||
| Doubtful/Loss | — | 1 | 6,640 | 11 | 12 | ||||||||||||||||||||||||
| Total criticized loans | $ | 660,022 | $ | 551,498 | $ | 471,930 | $ | 426,517 | $ | 401,062 | |||||||||||||||||||
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 | |||||||||||||||||
| 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | |||||||||||||||||
| Average stockholders’ equity | $ | 2,047,506 | $ | 2,045,959 | $ | 2,027,595 | |||||||||||
| Less: Goodwill and core deposit intangible assets, net | (473,961) | (474,467) | (476,053) | ||||||||||||||
| Average tangible common equity | $ | 1,573,545 | $ | 1,571,492 | $ | 1,551,542 | |||||||||||
| Net income | $ | 43,687 | $ | 28,319 | $ | 25,953 | |||||||||||
| Return on average tangible common equity (annualized) | 11.11 | % | 7.21 | % | 6.69 | % | |||||||||||
| Three Months Ended | |||||||||||||||||
| 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||
| TANGIBLE COMMON EQUITY | |||||||||||||||||
| Total stockholders’ equity | $ | 2,045,581 | $ | 2,053,745 | $ | 2,018,088 | |||||||||||
| Less: Goodwill and core deposit intangible assets, net | (473,648) | (474,158) | (475,752) | ||||||||||||||
| Tangible common equity | $ | 1,571,933 | $ | 1,579,587 | $ | 1,542,336 | |||||||||||
| Total assets | $ | 17,198,860 | $ | 17,106,664 | $ | 16,021,434 | |||||||||||
| Less: Goodwill and core deposit intangible assets, net | (473,648) | (474,158) | (475,752) | ||||||||||||||
| Tangible assets | $ | 16,725,212 | $ | 16,632,506 | $ | 15,545,682 | |||||||||||
| Common shares outstanding | 123,480,494 | 123,264,864 | 123,169,404 | ||||||||||||||
| Tangible common equity to tangible assets | 9.40 | % | 9.50 | % | 9.92 | % | |||||||||||
| Tangible common equity per share | $ | 12.73 | $ | 12.81 | $ | 12.52 | |||||||||||
| Three Months Ended | |||||||||||||||||
| 3/31/2021 | 12/31/2020 | 3/31/2020 | |||||||||||||||
| PRE-TAX PRE-PROVISION INCOME | |||||||||||||||||
| Net income | $ | 43,687 | $ | 28,319 | $ | 25,953 | |||||||||||
| Add back - tax provision | 13,965 | 5,289 | 6,462 | ||||||||||||||
| Add back - provision for credit losses | 3,300 | 27,500 | 28,000 | ||||||||||||||
| Pre-tax pre-provision income | $ | 60,952 | $ | 61,108 | $ | 60,415 | |||||||||||
Table Page 9