Hope Bancorp Reports 2023 Fourth Quarter and Full-Year Financial Results

Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and full year ended December 31, 2023. For the three months ended December 31, 2023, net income totaled $26.5 million, or $0.22 per diluted common share. For the full year ended December 31, 2023, net income totaled $133.7 million, or $1.11 per diluted common share.

“Net income for the 2023 fourth quarter was $26.5 million, or $38.3 million excluding the FDIC special assessment and restructuring charges related to our strategic reorganization,” stated Kevin S. Kim, Chairman, President and Chief Executive Officer. “Excluding these notable items, our net income was up 26% quarter-over-quarter. Continued focus on expense discipline and improvements in our credit quality metrics were important contributors to our net income growth. Nonperforming assets decreased 26%, and criticized loans declined 11% from September 30, 2023. Net charge offs for the 2023 fourth quarter were a very low five basis points, annualized, of average loans.

“We grew tangible book value 6% year-over-year, and all our regulatory risk-based capital ratios expanded,” continued Kim. “At December 31, 2023, the Company’s total capital ratio was 13.9% and common equity tier 1 capital ratio was 12.3%. Our strong capital positions the Bank well to support all our customers in their growth plans for the new year.

“The 2023 fourth quarter was an important building quarter for the Company with the announcement of our strategic reorganization in October. We believe our realignment around lines of business and products will enable Bank of Hope to operate more efficiently, support high-quality loan and deposit growth, and deliver improved returns in the years to come, enhancing stockholder value over the long term,” concluded Kim. “I wish to thank all our team members at Bank of Hope for their continued dedication to our organization and their excellence in serving our customers.”

Operating Results for the 2023 Fourth Quarter

Net income and earnings per share. Net income for the 2023 fourth quarter was $26.5 million, or $0.22 per diluted common share, compared with $30.0 million, or $0.25 per diluted common share, for the immediately preceding third quarter. Notable items impacting net income in the fourth quarter of 2023 were $8.7 million of restructuring costs, after tax, related to the Company’s previously announced strategic reorganization, and $3.1 million, after tax, accrued for the Federal Deposit Insurance Corporation (“FDIC”) special assessment, which was approved by the FDIC Board of Directors in November 2023. Excluding these notable items, net income for the 2023 fourth quarter was $38.3 million⁽¹⁾, up 26% from $30.4 million (excluding $376,000, after tax, of restructuring costs) for the third quarter of 2023. Earnings per diluted common share excluding notable items⁽¹⁾ amounted to $0.32 for the three months ended December 31, 2023, up 28% compared with $0.25 per diluted common share for the immediately preceding third quarter.

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2023 fourth quarter totaled $125.9 million, compared with $135.4 million in the immediately preceding third quarter, a decrease of 7% quarter-over-quarter. Fourth quarter 2023 net interest margin contracted 13 basis points to 2.70%, from 2.83% in the 2023 third quarter. The linked quarter change in net interest income and net interest margin reflected a higher cost of interest bearing deposits and a decrease in the average balance of loans, partially offset by higher yields on investment securities and other earning assets, as well as a decrease in the average balance of interest bearing deposits. In addition, the third quarter of 2023 included $3.1 million of recovered interest income related to one borrower relationship, which contributed eight basis points to the average loan yield and six basis points to the net interest margin in the third quarter.

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(1)		Net income, excluding the FDIC special assessment and restructuring charges (also referred to collectively as the “notable items”), and earnings per diluted common share excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Noninterest income. Noninterest income for the 2023 fourth quarter totaled $9.3 million, increasing 12% from $8.3 million in the immediately preceding third quarter. Growth was well distributed across various fee income lines. The Company did not sell any SBA 7(a) loans during the second half of 2023, retaining loan production on the balance sheet instead.

Noninterest expense. Noninterest expense for the 2023 fourth quarter was $99.9 million, including $11.1 million of pre-tax restructuring costs, primarily comprising severance costs, planned branch consolidation charges and professional fees, and $4.0 million (pre-tax) accrued for the FDIC special assessment. Excluding these notable items, fourth quarter 2023 noninterest expense⁽²⁾ was $84.8 million, down 2% from $86.4 million (excluding $500,000, pre-tax, of restructuring charges) in the 2023 third quarter. Fourth quarter 2023 salaries and employee benefits expense decreased 7% to $47.4 million, down from $51.0 million in the 2023 third quarter, reflecting the reduction to total headcount related to the restructuring. Other noninterest expense increased quarter-over-quarter, primarily reflecting increased CRA investment expense and provision for unfunded loan commitments.

Tax rate. The effective tax rate for the 2023 fourth quarter was 21.2%, compared with 24.9% for the immediately preceding third quarter. For the full year 2023, the effective tax rate was 24.9%, compared with 26.3% for the full year 2022.

Balance Sheet Summary

Cash and investment securities. At December 31, 2023, cash and cash equivalents totaled $1.93 billion, compared with $2.50 billion at September 30, 2023, primarily driven by a decrease in deposit balances. At December 31, 2022, cash and equivalents were $506.8 million. Investment securities totaled $2.41 billion at December 31, 2023, up from $2.26 billion at September 30, 2023, and $2.24 billion at December 31, 2022.

Loans. Loans receivable of $13.85 billion at December 31, 2023, decreased 3% from $14.31 billion at September 30, 2023, reflecting declines in commercial and commercial real estate loans, partially offset by growth in residential mortgage loans. During the 2023 fourth quarter, the Company exited its residential mortgage warehouse line business, which accounted for $64.7 million of the linked quarter decrease in loans. Fourth quarter average loans of $14.05 billion decreased 3% quarter-over-quarter.

The following table sets forth the loan portfolio composition at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)		12/31/2023						9/30/2023						12/31/2022
		Balance			Percentage			Balance			Percentage			Balance			Percentage
Commercial real estate (“CRE”) loans		$	8,797,884		63.6	%		$	8,972,886		62.7	%		$	9,414,580		61.1	%
Commercial and industrial (“C&I”) loans			4,135,044		29.8	%			4,450,341		31.1	%			5,109,532		33.2	%
Residential mortgage and other loans			920,691		6.6	%			882,966		6.2	%			879,428		5.7	%
Loans receivable		$	13,853,619		100.0	%		$	14,306,193		100.0	%		$	15,403,540		100.0	%

Deposits. Total deposits of $14.75 billion at December 31, 2023, decreased 6% from $15.74 billion at September 30, 2023. Fourth quarter 2023 average deposits of $15.26 billion decreased 3% quarter-over-quarter. During the fourth quarter of 2023, the Company reduced brokered time deposits by $449.9 million, or 25% from September 30, 2023. Noninterest bearing demand deposits decreased in the fourth quarter of 2023 primarily due to seasonality of funds from commercial customers in the residential mortgage business; these customers were unrelated to the exit of residential mortgage warehouse lending.

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(2)		Noninterest expense, excluding notable items, is a non-GAAP financial measure. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Pages 10 and 11.

The gross loan-to-deposit ratio was 93.9% at December 31, 2023, compared with 91.0% at September 30, 2023, and 98.2% at December 31, 2022.

The following table sets forth the deposit composition at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)		12/31/2023						9/30/2023						12/31/2022
		Balance			Percentage			Balance			Percentage			Balance			Percentage
Noninterest bearing demand deposits		$	3,914,967		26.5	%		$	4,249,788		27.0	%		$	4,849,493		30.8	%
Money market, interest bearing demand, and savings deposits			4,872,029		33.0	%			4,855,683		30.9	%			5,899,248		37.5	%
Time deposits			5,966,757		40.5	%			6,634,388		42.1	%			4,990,060		31.7	%
Total deposits		$	14,753,753		100.0	%		$	15,739,859		100.0	%		$	15,738,801		100.0	%
Gross loan-to-deposit ratio					93.9	%					91.0	%					98.2	%

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $1.80 billion at December 31, 2023, unchanged from September 30, 2023, and up from $865.0 million at December 31, 2022.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets totaled $45.5 million at December 31, 2023, a decrease of 26% from $61.7 million at September 30, 2023. The nonperforming assets ratio was 0.24% of total assets at December 31, 2023, an improvement from 0.31% of total assets at September 30, 2023.

The following table sets forth the components of nonperforming assets at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)		12/31/2023				9/30/2023				12/31/2022
Loans on nonaccrual status (1)		$	45,204			$	39,081			$	49,687
Accruing delinquent loans past due 90 days or more			261				21,579				401
Accruing troubled debt restructured loans (2)			—				—				16,931
Total nonperforming loans			45,465				60,660				67,019
Other real estate owned			63				1,043				2,418
Total nonperforming assets		$	45,528			$	61,703			$	69,437
Nonperforming assets/total assets			0.24	%			0.31	%			0.36	%

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(1)		Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million and $9.8 million at December 31, 2023, September 30, 2023, and December 31, 2022, respectively.
(2)		The Company adopted ASU 2022-02 in 2023, which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.

Criticized loans. Criticized loans decreased 11% quarter-over-quarter to $322.4 million at December 31, 2023, down from $360.8 million at September 30, 2023. Both special mention and substandard loans decreased quarter-over-quarter. The decrease was largely driven by upgrades, along with payoffs and note sales. As of December 31, 2022, criticized loans totaled $261.3 million.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $1.8 million in the 2023 fourth quarter, equivalent to 0.05%, annualized, of average loans. This was an improvement from net charge offs of $31.0 million, or 0.85%, annualized, of average loans in the immediately preceding third quarter. Accordingly, the Company recorded a provision for credit losses of $1.7 million for the 2023 fourth quarter, compared with $16.8 million in the immediately preceding third quarter. For the full year 2023, net charge offs were 0.22% of average loans, compared with net recoveries of (0.08)% of average loans for the full year 2022.

The following table sets forth net charge offs (recoveries) and the provision for credit losses for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, and for the twelve months ended December 31, 2023 and 2022:

		For the Three Months Ended													For the Twelve Months Ended
(dollars in thousands) (unaudited)		12/31/2023				9/30/2023				12/31/2022					12/31/2023			12/31/2022
Net charge offs (recoveries)		$	1,815			$	30,987			$	6,402			$	32,358			$	(12,209	)
Net charge offs (recoveries)/average loans receivable (annualized)			0.05	%			0.85	%			0.17	%			0.22	%			(0.08	)%
Provision for credit losses		$	1,700			$	16,800			$	8,200			$	29,100			$	9,600

Allowance for credit losses. The allowance for credit losses totaled $158.7 million at December 31, 2023, compared with $158.8 million at September 30, 2023. The allowance coverage ratio increased to 1.15% of loans receivable at December 31, 2023, up from 1.11% at September 30, 2023. Year-over-year, allowance coverage of loans receivable increased from 1.05% at December 31, 2022.

The following table sets forth the allowance for credit losses and the coverage ratios at December 31, 2023, September 30, 2023, and December 31, 2022:

(dollars in thousands) (unaudited)		12/31/2023				9/30/2023				12/31/2022
Allowance for credit losses		$	158,694			$	158,809			$	162,359
Allowance for credit losses/loans receivable			1.15	%			1.11	%			1.05	%

Capital

The Company’s capital ratios are strong and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At December 31, 2023, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at December 31, 2023, September 30, 2023, and December 31, 2022:

(unaudited)		12/31/2023		9/30/2023		12/31/2022		Minimum Guideline for “Well-Capitalized”
Common Equity Tier 1 Capital Ratio		12.28%		11.67%		10.55%		6.50%
Tier 1 Capital Ratio		12.96%		12.32%		11.15%		8.00%
Total Capital Ratio		13.92%		13.23%		11.97%		10.00%
Leverage Ratio		10.11%		9.83%		10.15%		5.00%

At December 31, 2023, total stockholders’ equity was $2.12 billion, or $17.66 per common share. Quarter-over-quarter, stockholders’ equity increased 4%, or $90.8 million, primarily reflecting a positive change in accumulated other comprehensive income (“AOCI”) and growth in retained earnings. Tangible common equity (“TCE”) per share was $13.76 at December 31, 2023, up 6% from September 30, 2023, and the TCE ratio was 8.86%, up 90 basis points quarter-over-quarter.

The following table sets forth the TCE per share and the TCE ratio at December 31, 2023, September 30, 2023, and December 31, 2022:

(unaudited)		12/31/2023		9/30/2023		12/31/2022
TCE per share (1)		$13.76		$13.01		$12.96
TCE ratio (1)		8.86%		7.96%		8.29%

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(1)		TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, January 30, 2024, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter and full year ended December 31, 2023. 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 February 6, 2024, replay access code 4752295.

Non-GAAP Financial Metrics

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

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $19.13 billion in total assets as of December 31, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. 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, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to 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 and economic environment in which we operate, projections of future performance, perceived opportunities in the market, statements regarding our business strategies, objectives and vision, and statements about our strategic reorganization. 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 further 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; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations. 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.

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share data)
Assets:		12/31/2023				9/30/2023				% change			12/31/2022				% change
Cash and due from banks		$	1,928,967			$	2,500,323			(23	)%		$	506,776			281	%
Investment securities			2,408,971				2,260,837			7	%			2,243,195			7	%
Federal Home Loan Bank (“FHLB”) stock and other investments			61,000				60,433			1	%			61,761			(1	)%
Loans held for sale, at the lower of cost or fair value			3,408				19,502			(83	)%			49,245			(93	)%
Loans receivable			13,853,619				14,306,193			(3	)%			15,403,540			(10	)%
Allowance for credit losses			(158,694	)			(158,809	)		—	%			(162,359	)		(2	)%
Net loans receivable			13,694,925				14,147,384			(3	)%			15,241,181			(10	)%
Accrued interest receivable			61,720				60,665			2	%			55,460			11	%
Premises and equipment, net			50,611				51,764			(2	)%			46,859			8	%
Goodwill and intangible assets			468,385				468,832			—	%			470,176			—	%
Other assets			453,535				506,624			(10	)%			489,838			(7	)%
Total assets		$	19,131,522			$	20,076,364			(5	)%		$	19,164,491			—	%
Liabilities:
Deposits		$	14,753,753			$	15,739,859			(6	)%		$	15,738,801			(6	)%
FHLB and Federal Reserve Bank (“FRB”) borrowings			1,795,726				1,795,726			—	%			865,000			108	%
Subordinated debentures and convertible notes, net			108,269				107,949			—	%			323,713			(67	)%
Accrued interest payable			168,174				166,831			1	%			26,668			531	%
Other liabilities			184,357				235,575			(22	)%			190,981			(3	)%
Total liabilities		$	17,010,279			$	18,045,940			(6	)%		$	17,145,163			(1	)%
Stockholders’ Equity:
Common stock, $0.001 par value		$	138			$	137			1	%		$	137			1	%
Additional paid-in capital			1,439,963				1,436,769			—	%			1,431,003			1	%
Retained earnings			1,150,547				1,140,870			1	%			1,083,712			6	%
Treasury stock, at cost			(264,667	)			(264,667	)		—	%			(264,667	)		—	%
Accumulated other comprehensive loss, net			(204,738	)			(282,685	)		28	%			(230,857	)		11	%
Total stockholders’ equity			2,121,243				2,030,424			4	%			2,019,328			5	%
Total liabilities and stockholders’ equity		$	19,131,522			$	20,076,364			(5	)%		$	19,164,491			—	%
Common stock shares - authorized			150,000,000				150,000,000							150,000,000
Common stock shares - outstanding			120,126,786				120,026,220							119,495,209
Treasury stock shares			17,382,835				17,382,835							17,382,835

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)
		Three Months Ended															Twelve Months Ended
		12/31/2023			9/30/2023			% change			12/31/2022			% change			12/31/2023			12/31/2022			% change
Interest and fees on loans		$	221,020		$	229,937		(4	)%		$	207,958		6	%		$	892,563		$	660,732		35	%
Interest on investment securities			18,398			17,006		8	%			14,758		25	%			66,063			52,220		27	%
Interest on cash and deposits at other banks			29,029			28,115		3	%			942		NM				87,361			1,295		NM
Interest on other investments and FHLB dividends			777			735		6	%			579		34	%			2,891			1,868		55	%
Total interest income			269,224			275,793		(2	)%			224,237		20	%			1,048,878			716,115		46	%
Interest on deposits			121,305			117,854		3	%			63,276		92	%			441,231			114,839		284	%
Interest on borrowings			22,003			22,561		(2	)%			10,440		111	%			81,786			22,855		258	%
Total interest expense			143,308			140,415		2	%			73,716		94	%			523,017			137,694		280	%
Net interest income before provision for credit losses			125,916			135,378		(7	)%			150,521		(16	)%			525,861			578,421		(9	)%
Provision for credit losses			1,700			16,800		(90	)%			8,200		(79	)%			29,100			9,600		203	%
Net interest income after provision for credit losses			124,216			118,578		5	%			142,321		(13	)%			496,761			568,821		(13	)%
Service fees on deposit accounts			2,505			2,415		4	%			2,159		16	%			9,466			8,938		6	%
Net gains on sales of SBA loans			—			—		—	%			2,154		(100	)%			4,097			16,343		(75	)%
Other income and fees			6,775			5,890		15	%			7,797		(13	)%			32,014			26,116		23	%
Total noninterest income			9,280			8,305		12	%			12,110		(23	)%			45,577			51,397		(11	)%
Salaries and employee benefits			47,364			51,033		(7	)%			52,694		(10	)%			207,871			204,719		2	%
Occupancy			7,231			7,149		1	%			7,072		2	%			28,868			28,267		2	%
Furniture and equipment			5,302			5,625		(6	)%			5,045		5	%			21,378			19,434		10	%
Data processing and communications			2,976			2,891		3	%			2,860		4	%			11,606			10,683		9	%
FDIC assessment			3,141			3,683		(15	)%			1,596		97	%			13,296			6,248		113	%
FDIC special assessment			3,971			—		100	%			—		100	%			3,971			—		100	%
Earned interest credit			6,505			6,377		2	%			5,002		30	%			22,399			10,998		104	%
Restructuring costs			11,076			500		NM				—		100	%			11,576			—		100	%
Other noninterest expense			12,325			9,615		28	%			10,249		20	%			43,486			43,821		(1	)%
Total noninterest expense			99,891			86,873		15	%			84,518		18	%			364,451			324,170		12	%
Income before income taxes			33,605			40,010		(16	)%			69,913		(52	)%			177,887			296,048		(40	)%
Income tax provision			7,124			9,961		(28	)%			18,210		(61	)%			44,214			77,771		(43	)%
Net income		$	26,481		$	30,049		(12	)%		$	51,703		(49	)%		$	133,673		$	218,277		(39	)%
Earnings Per Common Share - Diluted		$	0.22		$	0.25					$	0.43					$	1.11		$	1.81
Weighted Average Shares Outstanding - Diluted			120,761,112			120,374,618						120,102,665						120,393,257			120,472,345

Hope Bancorp, Inc. Selected Financial Data Unaudited
		For the Three Months Ended									For the Twelve Months Ended
Profitability measures (annualized):		12/31/2023			9/30/2023			12/31/2022			12/31/2023			12/31/2022
ROA		0.54	%		0.60	%		1.10	%		0.67	%		1.20	%
ROA excluding notable items (1)		0.78	%		0.61	%		1.10	%		0.73	%		1.20	%
ROE		5.17	%		5.78	%		10.35	%		6.48	%		10.73	%
ROE excluding notable items (1)		7.49	%		5.85	%		10.35	%		7.05	%		10.73	%
ROTCE (1)		6.71	%		7.47	%		13.54	%		8.39	%		13.97	%
ROTCE excluding notable items (1)		9.71	%		7.56	%		13.54	%		9.13	%		13.97	%
Net interest margin		2.70	%		2.83	%		3.36	%		2.81	%		3.36	%
Efficiency ratio (not annualized)		73.89	%		60.46	%		51.97	%		63.78	%		51.47	%
Efficiency ratio excluding notable items (not annualized) (1)		62.76	%		60.11	%		51.97	%		61.06	%		51.47	%
Noninterest expense / average assets		2.04	%		1.73	%		1.79	%		1.84	%		1.78	%
Noninterest expense / average assets, excluding notable items (1)		1.73	%		1.72	%		1.79	%		1.76	%		1.78	%
(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, efficiency ratio excluding notable items, and noninterest expense / average assets excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 and 11.

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
		Three Months Ended
		12/31/2023									9/30/2023									12/31/2022
					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		$	14,052,953		$	221,020		6.24	%		$	14,550,106		$	229,937		6.27	%		$	15,393,843		$	207,958		5.36	%
Investment securities			2,283,613			18,398		3.20	%			2,275,133			17,006		2.97	%			2,254,678			14,758		2.60	%
Interest earning cash and deposits at other banks			2,142,147			29,029		5.38	%			2,106,469			28,115		5.30	%			66,075			942		5.66	%
FHLB stock and other investments			47,587			777		6.48	%			47,316			735		6.16	%			48,002			579		4.79	%
Total interest earning assets		$	18,526,300		$	269,224		5.77	%		$	18,979,024		$	275,793		5.77	%		$	17,762,598		$	224,237		5.01	%
INTEREST BEARING LIABILITIES:
Deposits:
Money market, interest bearing demand and savings		$	4,821,222		$	45,662		3.76	%		$	4,533,430		$	38,814		3.40	%		$	6,030,576		$	35,959		2.37	%
Time deposits			6,327,191			75,643		4.74	%			6,862,038			79,040		4.57	%			4,276,655			27,317		2.53	%
Total interest bearing deposits			11,148,413			121,305		4.32	%			11,395,468			117,854		4.10	%			10,307,231			63,276		2.44	%
FHLB and FRB borrowings			1,795,740			19,224		4.25	%			1,809,322			19,821		4.35	%			838,335			6,988		3.31	%
Subordinated debentures and convertible notes			104,198			2,779		10.44	%			103,873			2,740		10.32	%			319,498			3,452		4.23	%
Total interest bearing liabilities		$	13,048,351		$	143,308		4.36	%		$	13,308,663		$	140,415		4.19	%		$	11,465,064		$	73,716		2.55	%
Noninterest bearing demand deposits			4,113,680									4,312,117									5,174,306
Total funding liabilities/cost of funds		$	17,162,031					3.31	%		$	17,620,780					3.16	%		$	16,639,370					1.76	%
Net interest income/net interest spread					$	125,916		1.41	%					$	135,378		1.58	%					$	150,521		2.46	%
Net interest margin								2.70	%								2.83	%								3.36	%
Cost of deposits:
Noninterest bearing demand deposits		$	4,113,680		$	—		—	%		$	4,312,117		$	—		—	%		$	5,174,306		$	—		—	%
Interest bearing deposits			11,148,413			121,305		4.32	%			11,395,468			117,854		4.10	%			10,307,231			63,276		2.44	%
Total deposits		$	15,262,093		$	121,305		3.15	%		$	15,707,585		$	117,854		2.98	%		$	15,481,537		$	63,276		1.62	%

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
		Twelve Months Ended
		12/31/2023									12/31/2022
					Interest									Interest
		Average			Income/			Average			Average			Income/			Average
		Balance			Expense			Yield/Cost			Balance			Expense			Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale		$	14,732,166		$	892,563		6.06	%		$	14,634,627		$	660,732		4.51	%
Investment securities			2,262,840			66,063		2.92	%			2,415,621			52,220		2.16	%
Interest earning cash and deposits at other banks			1,685,462			87,361		5.18	%			116,689			1,295		1.11	%
FHLB stock and other investments			47,249			2,891		6.12	%			59,624			1,868		3.13	%
Total interest earning assets		$	18,727,717		$	1,048,878		5.60	%		$	17,226,561		$	716,115		4.16	%
INTEREST BEARING LIABILITIES:
Deposits:
Money market, interest bearing demand and savings		$	4,858,919		$	161,751		3.33	%		$	6,517,879		$	72,763		1.12	%
Time deposits			6,409,056			279,480		4.36	%			3,084,851			42,076		1.36	%
Total interest bearing deposits			11,267,975			441,231		3.92	%			9,602,730			114,839		1.20	%
FHLB and FRB borrowings			1,618,292			69,365		4.29	%			528,342			11,525		2.18	%
Subordinated debentures and convertible notes			181,125			12,421		6.76	%			318,691			11,330		3.51	%
Total interest bearing liabilities		$	13,067,392		$	523,017		4.00	%		$	10,449,763		$	137,694		1.32	%
Noninterest bearing demand deposits			4,362,043									5,569,542
Total funding liabilities/cost of funds		$	17,429,435					3.00	%		$	16,019,305					0.86	%
Net interest income/net interest spread					$	525,861		1.60	%					$	578,421		2.84	%
Net interest margin								2.81	%								3.36	%
Cost of deposits:
Noninterest bearing demand deposits		$	4,362,043		$	—		—	%		$	5,569,542		$	—		—	%
Interest bearing deposits			11,267,975			441,231		3.92	%			9,602,730			114,839		1.20	%
Total deposits		$	15,630,018		$	441,231		2.82	%		$	15,172,272		$	114,839		0.76	%

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
		Three Months Ended																		Twelve Months Ended
AVERAGE BALANCES:		12/31/2023				9/30/2023				% change			12/31/2022				% change			12/31/2023			12/31/2022			% change
Loans, including loans held for sale		$	14,052,953			$	14,550,106			(3	)%		$	15,393,843			(9	)%		$	14,732,166		$	14,634,627		1	%
Investment securities			2,283,613				2,275,133			—	%			2,254,678			1	%			2,262,840			2,415,621		(6	)%
Interest earning cash and deposits at other banks			2,142,147				2,106,469			2	%			66,075			NM				1,685,462			116,689		NM
Interest earning assets			18,526,300				18,979,024			(2	)%			17,762,598			4	%			18,727,717			17,226,561		9	%
Goodwill and intangible assets			468,622				469,079			—	%			470,442			—	%			469,298			471,176		—	%
Total assets			19,600,942				20,059,304			(2	)%			18,863,726			4	%			19,806,163			18,231,609		9	%
Noninterest bearing demand deposits			4,113,680				4,312,117			(5	)%			5,174,217			(20	)%			4,362,043			5,569,534		(22	)%
Interest bearing deposits			11,148,413				11,395,468			(2	)%			10,307,231			8	%			11,267,975			9,602,730		17	%
Total deposits			15,262,093				15,707,585			(3	)%			15,481,537			(1	)%			15,630,180			15,172,272		3	%
Interest bearing liabilities			13,048,351				13,308,663			(2	)%			11,465,064			14	%			13,067,392			10,449,763		25	%
Stockholders’ equity			2,048,335				2,079,092			(1	)%			1,997,460			3	%			2,061,665			2,034,027		1	%
LOAN PORTFOLIO COMPOSITION:		12/31/2023				9/30/2023				% change			12/31/2022				% change
Commercial real estate (“CRE”) loans		$	8,797,884			$	8,972,886			(2	)%		$	9,414,580			(7	)%
Commercial and industrial (“C&I”) loans			4,135,044				4,450,341			(7	)%			5,109,532			(19	)%
Residential mortgage and other loans			920,691				882,966			4	%			879,428			5	%
Loans receivable			13,853,619				14,306,193			(3	)%			15,403,540			(10	)%
Allowance for credit losses			(158,694	)			(158,809	)		—	%			(162,359	)		(2	)%
Loans receivable, net		$	13,694,925			$	14,147,384			(3	)%		$	15,241,181			(10	)%
CRE LOANS BY PROPERTY TYPE:		12/31/2023				9/30/2023				% change			12/31/2022				% change
Multi-tenant retail		$	1,704,337			$	1,745,430			(2	)%		$	1,866,434			(9	)%
Hotels/motels			796,267				826,732			(4	)%			952,579			(16	)%
Gas stations and car washes			1,030,888				1,037,621			(1	)%			1,054,720			(2	)%
Mixed-use facilities			870,664				813,571			7	%			848,417			3	%
Industrial warehouses			1,226,780				1,254,643			(2	)%			1,294,893			(5	)%
Multifamily			1,226,384				1,234,934			(1	)%			1,295,644			(5	)%
Single-tenant retail			662,705				671,921			(1	)%			718,977			(8	)%
Office			401,821				454,695			(12	)%			473,459			(15	)%
All other			878,038				933,339			(6	)%			909,457			(3	)%
Total CRE loans		$	8,797,884			$	8,972,886			(2	)%		$	9,414,580			(7	)%
DEPOSIT COMPOSITION:		12/31/2023				9/30/2023				% change			12/31/2022				% change
Noninterest bearing demand deposits		$	3,914,967			$	4,249,788			(8	)%		$	4,849,493			(19	)%
Money market, interest bearing demand, and savings			4,872,029				4,855,683			—	%			5,899,248			(17	)%
Time deposits			5,966,757				6,634,388			(10	)%			4,990,060			20	%
Total deposits		$	14,753,753			$	15,739,859			(6	)%		$	15,738,801			(6	)%

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
CAPITAL & CAPITAL RATIOS:		12/31/2023				9/30/2023				12/31/2022
Total stockholders’ equity		$	2,121,243			$	2,030,424			$	2,019,328
Total capital		$	2,120,157			$	2,105,754			$	2,041,319
Common equity tier 1 ratio			12.28	%			11.67	%			10.55	%
Tier 1 capital ratio			12.96	%			12.32	%			11.15	%
Total capital ratio			13.92	%			13.23	%			11.97	%
Leverage ratio			10.11	%			9.83	%			10.15	%
Total risk weighted assets		$	15,230,302			$	15,912,792			$	17,049,410
Book value per common share		$	17.66			$	16.92			$	16.90
TCE per share (1)		$	13.76			$	13.01			$	12.96
TCE ratio (1)			8.86	%			7.96	%			8.29	%
(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
		Three Months Ended																				Twelve Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022				12/31/2023				12/31/2022
Balance at beginning of period		$	158,809			$	172,996			$	163,544			$	162,359			$	160,561			$	162,359			$	140,550
ASU 2022-02 day 1 adoption impact			—				—				—				(407	)			—				(407	)			—
Provision for credit losses			1,700				16,800				8,900				1,700				8,200				29,100				9,600
Recoveries			306				2,938				1,531				387				3,222				5,162				24,598
Charge offs			(2,121	)			(33,925	)			(979	)			(495	)			(9,624	)			(37,520	)			(12,389	)
Balance at end of period		$	158,694			$	158,809			$	172,996			$	163,544			$	162,359			$	158,694			$	162,359
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Allowance for unfunded loan commitments		$	3,843			$	3,143			$	3,081			$	2,971			$	1,351
		Three Months Ended																				Twelve Months Ended
		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022				12/31/2023				12/31/2022
Provision for credit losses		$	1,700			$	16,800			$	8,900			$	1,700			$	8,200			$	29,100			$	9,600
Provision for unfunded loan commitments (in noninterest expense)			700				62				110				1,620				120				2,492				250
Total provision expense		$	2,400			$	16,862			$	9,010			$	3,320			$	8,320			$	31,592			$	9,850
		Three Months Ended																				Twelve Months Ended
NET LOAN CHARGE OFFS (RECOVERIES):		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022				12/31/2023				12/31/2022
CRE loans		$	1,560			$	(2,227	)		$	438			$	(109	)		$	2,022			$	(338	)		$	(14,895	)
C&I loans			138				33,145				(1,091	)			196				4,174				32,388				2,299
Residential mortgage and other loans			117				69				101				21				206				308				387
Net loan charge offs (recoveries)		$	1,815			$	30,987			$	(552	)		$	108			$	6,402			$	32,358			$	(12,209	)
Net charge offs (recoveries)/average loans receivable (annualized)			0.05	%			0.85	%			(0.01	)%			—	%			0.17	%			0.22	%			(0.08	)%

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
NONPERFORMING ASSETS:		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Loans on nonaccrual status (1)		$	45,204			$	39,081			$	61,252			$	78,861			$	49,687
Accruing delinquent loans past due 90 days or more			261				21,579				15,182				364				401
Accruing troubled debt restructured loans (2)			—				—				—				—				16,931
Total nonperforming loans			45,465				60,660				76,434				79,225				67,019
Other real estate owned (“OREO”)			63				1,043				938				938				2,418
Total nonperforming assets		$	45,528			$	61,703			$	77,372			$	80,163			$	69,437
Nonperforming assets/total assets			0.24	%			0.31	%			0.38	%			0.39	%			0.36	%
Nonperforming assets/loans receivable & OREO			0.33	%			0.43	%			0.52	%			0.53	%			0.45	%
Nonperforming assets/total capital			2.15	%			3.04	%			3.74	%			3.89	%			3.44	%
Nonperforming loans/loans receivable			0.33	%			0.42	%			0.51	%			0.53	%			0.44	%
Nonaccrual loans/loans receivable			0.33	%			0.27	%			0.41	%			0.52	%			0.32	%
Allowance for credit losses/loans receivable			1.15	%			1.11	%			1.16	%			1.09	%			1.05	%
Allowance for credit losses/nonperforming loans			349.05	%			261.80	%			226.33	%			206.43	%			242.26	%
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.4 million, $12.1 million, $11.9 million, $7.6 million, and $9.8 million, at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
(2) The Company adopted ASU 2022-02 in 2023, which eliminated the concept of TDR from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.
NONACCRUAL LOANS BY TYPE:		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
CRE loans		$	33,932			$	26,687			$	29,270			$	44,376			$	33,915
C&I loans			5,013				4,234				23,042				26,191				5,620
Residential mortgage and other loans			6,259				8,160				8,940				8,294				10,152
Total nonaccrual loans		$	45,204			$	39,081			$	61,252			$	78,861			$	49,687

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:		12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
30 - 59 days past due		$	2,833		$	2,906		$	9,295		$	7,662		$	7,049
60 - 89 days past due			1,289			506			178			249			2,243
Total accruing delinquent loans 30-89 days past due		$	4,122		$	3,412		$	9,473		$	7,911		$	9,292
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:		12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
CRE loans		$	2,160		$	611		$	7,339		$	3,652		$	4,115
C&I loans			1,643			1,168			990			419			3,300
Residential mortgage and other loans			319			1,633			1,144			3,840			1,877
Total accruing delinquent loans 30-89 days past due		$	4,122		$	3,412		$	9,473		$	7,911		$	9,292
CRITICIZED LOANS:		12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Special mention loans		$	178,992		$	186,600		$	210,806		$	166,472		$	157,263
Substandard loans			143,449			174,161			134,203			138,224			104,073
Total criticized loans		$	322,441		$	360,761		$	345,009		$	304,696		$	261,336

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)
Reconciliation of GAAP financial measures to non-GAAP financial measures
Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.
		Three Months Ended												Twelve Months Ended
RETURN ON AVERAGE TANGIBLE COMMON EQUITY		12/31/2023				9/30/2023				12/31/2022				12/31/2023				12/31/2022
Average stockholders’ equity		$	2,048,335			$	2,079,092			$	1,997,460			$	2,061,665			$	2,034,027
Less: Average goodwill and core deposit intangible assets, net			(468,622	)			(469,079	)			(470,442	)			(469,298	)			(471,176	)
Average TCE		$	1,579,713			$	1,610,013			$	1,527,018			$	1,592,367			$	1,562,851
Net income		$	26,481			$	30,049			$	51,703			$	133,673			$	218,277
ROTCE (annualized)			6.71	%			7.47	%			13.54	%			8.39	%			13.97	%
TANGIBLE COMMON EQUITY		12/31/2023				9/30/2023				12/31/2022
Total stockholders’ equity		$	2,121,243			$	2,030,424			$	2,019,328
Less: Goodwill and core deposit intangible assets, net			(468,385	)			(468,832	)			(470,176	)
TCE		$	1,652,858			$	1,561,592			$	1,549,152
Total assets		$	19,131,522			$	20,076,364			$	19,164,491
Less: Goodwill and core deposit intangible assets, net			(468,385	)			(468,832	)			(470,176	)
Tangible assets		$	18,663,137			$	19,607,532			$	18,694,315
TCE ratio			8.86	%			7.96	%			8.29	%
Common shares outstanding			120,126,786				120,026,220				119,495,209
TCE per share		$	13.76			$	13.01			$	12.96
		Three Months Ended												Twelve Months Ended
PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS		12/31/2023				9/30/2023				12/31/2022				12/31/2023				12/31/2022
Net income		$	26,481			$	30,049			$	51,703			$	133,673			$	218,277
Notable items:
FDIC special assessment expense			3,971				—				—				3,971				—
Restructuring costs			11,076				500				—				11,576				—
Total notable items			15,047				500				—				15,547				—
Tax provision			3,190				124				—				3,864				—
Less: total notable items, net of tax provision		$	11,857			$	376			$	—			$	11,683			$	—
Net income excluding notable items		$	38,338			$	30,425			$	51,703			$	145,356			$	218,277
Diluted common shares			120,761,112				120,374,618				120,102,665				120,393,257				120,472,345
EPS excluding notable items		$	0.32			$	0.25			$	0.43			$	1.21			$	1.81
Average Assets			19,600,942				20,059,304				18,863,726				19,806,163				18,231,609
ROA excluding notable items			0.78	%			0.61	%			1.10	%			0.73	%			1.20	%
Average Equity			2,048,335				2,079,092				1,997,460				2,061,665				2,034,027
ROE excluding notable items			7.49	%			5.85	%			10.35	%			7.05	%			10.73	%
Average TCE		$	1,579,713			$	1,610,013			$	1,527,018			$	1,592,367			$	1,562,851
ROTCE excluding notable items			9.71	%			7.56	%			13.54	%			9.13	%			13.97	%
		Three Months Ended												Twelve Months Ended
EFFICIENCY RATIOS EXCLUDING NOTABLE ITEMS		12/31/2023				9/30/2023				12/31/2022				12/31/2023				12/31/2022
Noninterest expense		$	99,891			$	86,873			$	84,518			$	364,451			$	324,170
Less: notable items:
FDIC special assessment expense			(3,971	)			—				—				(3,971	)			—
Restructuring costs			(11,076	)			(500	)			—				(11,576	)			—
Noninterest expense excluding notable items		$	84,844			$	86,373			$	84,518			$	348,904			$	324,170
Revenue		$	135,196			$	143,683			$	162,631			$	571,438			$	629,818
Efficiency ratio excluding notable items			62.76	%			60.11	%			51.97	%			61.06	%			51.47	%
Average assets			19,600,942				20,059,304				18,863,726				19,806,163				18,231,609
Noninterest expense / average assets, excluding notable items			1.73	%			1.72	%			1.79	%			1.76	%			1.78	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130078574/en/

The Hope Bancorp Stock at the time of publication of the news with a raise of +0,45 % to 11,10EUR on Lang & Schwarz stock exchange (30. Januar 2024, 12:04 Uhr).