Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document
false0001128361 0001128361 2020-01-22 2020-01-22



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

January 22, 2020
Date of Report (Date of earliest event reported)

HOPE BANCORP INC
(Exact name of registrant as specified in its charter)

Delaware
000-50245
95-4849715
(State of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

3200 Wilshire Boulevard, Suite 1400
Los Angeles, California 90010
(Address of principal executives offices, including zip code)

(213) 639-1700
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Common Stock
,
par value $0.001 per share
HOPE
NASDAQ Global Select Market
(Title of class)
(Trading Symbol)
(Name of exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02 Results of Operations and Financial Condition.

On January 22, 2020, Hope Bancorp, Inc. (“HOPE” or the “Company”) issued a news release concerning its results of operations and financial condition for the fourth quarter and full year ended and as of December 31, 2019. A copy of the January 22, 2020 press release is attached hereto as Exhibit 99.1.

Item 8.01 Other Events.
 
On January 22, 2020, the Company issued a news release announcing that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The cash dividend is payable on or about February 21, 2020 to all stockholders of record as of the close of business on February 7, 2020. A copy of the January 22, 2020 press release is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure

The Company previously announced that it will host an investor conference call on Thursday, January 23, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended and as of December 31, 2019. A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. A copy of the Presentation Materials is attached hereto as Exhibit 99.3.


The information included in this report pursuant to Item 2.02, Item 8.01 and Item 7.01 of Form 8-K (including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits
Exhibit No.
 
Description of Exhibit
 
 
 
99.1
 
99.2
 
99.3
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
HOPE BANCORP, INC.
 
 
 
 
Date: January 23, 2020
By:
/s/ Kevin S. Kim
 
 
 
Kevin S. Kim
 
 
 
Chairman, President and Chief Executive Officer







EXHIBIT INDEX


Exhibit No.
 
Description of Exhibit
 
 
 
99.1
 
99.2
 
99.3
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Page 1-1-1                                             NASDAQ: HOPE


402401828_hopebancorplogoa07.jpg
News Release


HOPE BANCORP REPORTS 2019 FOURTH QUARTER FINANCIAL RESULTS


LOS ANGELES - January 22, 2020 - 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 year ended December 31, 2019.

For the three months ended December 31, 2019, net income totaled $43.0 million, or $0.34 per diluted common share. This compares with net income of $42.6 million, or $0.34 per diluted common share, in the 2019 third quarter and $44.4 million, or $0.35 per diluted common share, in the 2018 fourth quarter. For 2019, net income totaled $171.0 million, or $1.35 per diluted common share, compared with 2018 net income of $189.6 million, or $1.44 per diluted common share.

“We are pleased to have completed the year with another solid quarter that underscores the consistent progress we are making with our strategic initiatives,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “Most notably, we continued to see a favorable shift in our deposit base to lower costing core deposits, which contributed to a considerable reduction in our total cost of deposits, the first decrease we have seen in three years. We also originated a record level of $848 million in new loans, which continues to represent a well-balanced mix of commercial real estate, commercial and consumer loans and led to a second consecutive quarter of organic loan growth. Noninterest expenses remain well contained at 1.85% of total assets, notwithstanding the ongoing investments we continue to make in our organization. And our active buyback of 943,094 shares under our current share repurchase plan underscores our ongoing commitment to enhance shareholder returns.

“We move forward into 2020 with strong conviction that we have the right strategies in place given the current stage of the economic growth cycle and the lower interest rate environment that we are operating in. With the progress we have made in controlling our deposit costs, the growing contribution of the higher-rate SBA loans in our portfolio, and assuming no further changes in the Fed Funds rate this year, we believe we are positioned to begin seeing some margin expansion by the second half of the year, which will ultimately improve our ability to further enhance returns and profitability.”
Q4 2019 Highlights
Record new loan originations of $847.6 million led to more than a 1% increase in loans receivable quarter-over-quarter, or 6% annualized.
Deposit initiatives contributed to a 13 basis point reduction quarter-over-quarter in total deposit costs, the first quarter-over-quarter decrease since Q4 2016.
Total deposits increased 2% quarter-over-quarter, reflecting a continuation of a favorable mix-shift to core deposits.
Total noninterest expenses well contained and remain at 1.85% of average assets.
Repurchased 943,094 shares at an average price of $14.62 during the 2019 fourth quarter.


(more)

Page 2-2-2                                             NASDAQ: HOPE

Financial Highlights
(dollars in thousands, except per share data) (unaudited)
At or for the Three Months Ended
 
12/31/2019
 
9/30/2019
 
12/31/2018
Net income
$
43,009

 
$
42,592

 
$
44,449

Diluted earnings per share
$
0.34

 
$
0.34

 
$
0.35

Net interest income before provision for loan losses
$
113,508

 
$
116,258

 
$
121,893

Net interest margin
 
3.16
%
 
 
3.25
%
 
 
3.41
%
Noninterest income
$
12,979

 
$
12,995

 
$
11,614

Noninterest expense
$
70,429

 
$
69,995

 
$
70,189

Net loans receivable
$
12,181,863

 
$
12,010,800

 
$
12,005,558

Deposits
$
12,527,364

 
$
12,234,750

 
$
12,155,656

Nonaccrual loans (1) (2)
$
54,785

 
$
42,235

 
$
53,286

Nonperforming loans to loans receivable (1) (2)
 
0.80
%
 
 
0.64
%
 
 
0.87
%
ALLL to loans receivable
 
0.77
%
 
 
0.78
%
 
 
0.77
%
ALLL to nonaccrual loans (1) (2)
 
171.84
%
 
 
222.28
%
 
 
173.70
%
ALLL to nonperforming assets (1) (2)
 
77.08
%
 
 
97.06
%
 
 
81.92
%
Provision for loan losses
$
1,000

 
$
2,100

 
$
2,800

Net charge offs
$
738

 
$
1,822

 
$
872

Return on average assets (“ROA”)
 
1.13
%
 
 
1.12
%
 
 
1.17
%
Return on average equity (“ROE”)
 
8.46
%
 
 
8.47
%
 
 
9.42
%
Return on average common tangible equity (“ROTCE”) (3)
 
11.04
%
 
 
11.11
%
 
 
12.62
%
Noninterest expense / average assets
 
1.85
%
 
 
1.85
%
 
 
1.85
%
Efficiency ratio
 
55.68
%
 
 
54.15
%
 
 
52.57
%

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation
(2) Excludes purchased credit-impaired loans
(3) 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 7.

Operating Results for the 2019 Fourth Quarter
 
Net interest income before provision for loan losses for the 2019 fourth quarter totaled $113.5 million, compared with $116.3 million in the 2019 third quarter and $121.9 million in the year-ago fourth quarter.

The net interest margin for the 2019 fourth quarter declined 9 basis points to 3.16% from 3.25% in the 2019 third quarter, reflecting lower weighted average yield on loans, due to three decreases in the fed funds rate of 25 basis points each on July 31, September 18 and October 30, 2019, partially offset by lower deposit costs. The net interest margin in the prior-year fourth quarter was 3.41%.

The weighted average yield on loans for the 2019 fourth quarter was 5.04%, compared with 5.27% in the preceding third quarter and 5.21% in the year-ago fourth quarter.

The Company continued to see benefits from its deposit initiatives with a favorable shift in the mix of deposits. This contributed to a quarter-over-quarter decrease in the weighted average cost of deposits, which was 1.49% for the 2019 fourth quarter, compared with 1.62% for the third quarter of 2019. In the 2018 fourth quarter, the weighted average cost of deposits was 1.40%.

Noninterest income totaled $13.0 million for the 2019 fourth quarter and preceding third quarter. Net gains on sales of other loans, predominantly from the sale of residential mortgage loans, increased to $1.9 million for the 2019 fourth quarter from $804,000 in the preceding third quarter. This increase was largely offset by lower levels of swap fee income versus the preceding quarter. In the 2018 fourth quarter, noninterest income totaled $11.6 million and included a $447,000 net gain on sales of SBA loans to the secondary market and $381,000 net gain on the sale of other loans. Since

(more)

Page 3-3-3                                             NASDAQ: HOPE

the middle of the 2018 fourth quarter, the Company has discontinued its practice of regularly selling SBA loans to the secondary market.

Noninterest expense was stable at $70.4 million for the 2019 fourth quarter, compared with $70.0 million for the preceding third quarter and $70.2 million for the year-ago fourth quarter. Noninterest expense as a percentage of average assets amounted to 1.85% for the 2019 fourth quarter, 2019 third quarter and 2018 fourth quarter.

The slight increase in noninterest expense quarter-over-quarter reflects an increase in professional fees, FDIC assessment, and credit and OREO related expenses. The preceding third quarter included FDIC assessment credits which reduced the FDIC assessment expense for the quarter to zero, compared with minimal credit applied for the fourth quarter of 2019. These increases were offset by lower compensation costs in the 2019 fourth quarter.

Salaries and employee benefits expense decreased to $39.8 million for the 2019 fourth quarter from $41.6 million for the 2019 third quarter, largely reflecting reduced expenses related to the Company’s 401(k) and insurance programs. In the 2018 fourth quarter, salaries and employee benefits expense totaled $36.6 million.

The effective tax rate for the 2019 fourth quarter was 21.9%, compared with 25.5% in the preceding 2019 third quarter and 26.6% in the 2018 fourth quarter. The Company attributed the reduction of the effective tax rate for the 2019 fourth quarter mainly due to adjustments related to FASB Interpretation No. 48 (“FIN 48”), which lowered the tax provision for the quarter by approximately $1.8 million, net of Federal and State tax.

Balance Sheet Summary
 
New loan originations funded during the 2019 fourth quarter totaled a record $847.6 million and included SBA loan production of $61.8 million and residential mortgage loan originations of $64.2 million. This compares with 2019 third quarter originations of $693.9 million, including SBA loan production of $53.8 million and residential mortgage loan originations of $58.5 million. In the year-ago fourth quarter, new loan originations funded totaled $667.3 million, including SBA loan production of $81.5 million and residential mortgage loan originations of $162.3 million.

SBA 7(a) loan originations totaled $46.1 million for the 2019 fourth quarter, compared with $34.4 million for the third quarter of 2019 and $44.7 million for the year-ago fourth quarter. There were no sales of SBA 7(a) loans to the secondary market during 2019. In contrast, the Company sold $10.2 million of its SBA 7(a) loans during the 2018 fourth quarter prior to its decision to retain the loans in its portfolio.

At December 31, 2019, loans receivable increased 1% to $12.28 billion from $12.10 billion at September 30, 2019 and increased 1% from $12.10 billion at December 31, 2018.

Total deposits at December 31, 2019 increased 2% to $12.53 billion from $12.23 billion at September 30, 2019 and increased 3% from $12.16 billion at December 31, 2018. During the 2019 fourth quarter, the Company continued to see a favorable shift in the mix of deposits marked by higher core deposits, particularly in money market account balances, and decreases in higher-cost time deposits. Noninterest bearing demand deposits at year-end 2019 increased 2% from September 30, 2019 and increased 3% from December 31, 2018. Money market and other deposits at year-end 2019 increased 6% and 31% from September 30, 2019 and December 31, 2018, respectively, and rose as a percentage of total deposits to 32% at December 31, 2019 from 31% at September 30, 2019 and 25% at December 31, 2018.

Reflecting the continued favorable mix-shift in deposits, total cost of deposits decreased 13 basis points to 1.49% from 1.62% for the 2019 third quarter. In the fourth quarter of 2018, total cost of deposits was 1.40%.

Credit Quality
 
The provision for loan and lease losses for the 2019 fourth quarter was $1.0 million, compared with $2.1 million for the preceding 2019 third quarter and $2.8 million for the year-ago fourth quarter.


(more)

Page 4-4-4                                             NASDAQ: HOPE

Following are the components of nonperforming assets as of December 31, 2019, September 30, 2019, and December 31, 2018:
(dollars in thousands) (unaudited)
12/31/2019
 
9/30/2019
 
12/31/2018
Loans on nonaccrual status (1)
$
54,785
 
$
42,235
 
$
53,286
Delinquent loans 90 days or more on accrual status (2)
 
7,547
 
 
398
 
 
1,529
Accruing troubled debt restructured loans
 
35,709
 
 
34,717
 
 
50,410
Total nonperforming loans
 
98,041
 
 
77,350
 
 
105,225
Other real estate owned
 
24,091
 
 
19,374
 
 
7,754
Total nonperforming assets
$
122,132
 
$
96,724
 
$
112,979

(1)
Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $28.1 million, $37.3 million, and $29.2 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively.
(2) 
Excludes Acquired Credit Impaired Loans totaling $13.2 million, $15.5 million, and $14.1 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively.

Following are the components of criticized loan balances as of December 31, 2019, September 30, 2019, and December 31, 2018:
(dollars in thousands) (unaudited)
12/31/2019
 
9/30/2019
 
12/31/2018
Special Mention (3)
$
141,452
 
$
139,848
 
$
163,089
Classified (3)
 
259,291
 
 
268,622
 
 
318,327
     Criticized
$
400,743
 
$
408,470
 
$
481,416

(3)
Balances include purchased loans which were marked to fair value on the date of acquisition.
 
The Company recorded net charge offs of $738,000 during the 2019 fourth quarter, or 0.02% of average loans receivable on an annualized basis. This compares with net charge offs of $1.8 million, or 0.06% of average loans receivable on an annualized basis, during the 2019 third quarter. In the 2018 fourth quarter, the Company recorded net charge offs of $872,000, or 0.03% of average loans receivable on an annualized basis.

The allowance for loan and lease losses (“ALLL”) was $94.1 million, $93.9 million, and $92.6 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. As a percentage of loans receivable (excluding loans held for sale), the ALLL was 0.77%, 0.78% and 0.77% at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. The coverage ratio of the ALLL to nonperforming loans (excluding purchased credit-impaired loans) was 96.03% at December 31, 2019, 121.37% at September 30, 2019 and 87.96% at December 31, 2018.
 
Impaired loans (defined as loans for which it is probable that not all principal and interest payments due will be collected in accordance with the contractual terms) totaled $90.5 million at December 31, 2019, $77.3 million at September 30, 2019 and $104.0 million at December 31, 2018.


(more)

Page 5-5-5                                             NASDAQ: HOPE

Capital
 
At December 31, 2019, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” financial institution, as summarized in the following table:
(unaudited)
12/31/2019
 
9/30/2019
 
12/31/2018
 
Minimum Guideline for “Well-Capitalized” Bank
Common Equity Tier 1 Capital
11.76%
 
11.89%
 
11.44%
 
6.50%
Tier 1 Leverage Ratio
11.22%
 
11.18%
 
10.55%
 
5.00%
Tier 1 Risk-Based Ratio
12.51%
 
12.65%
 
12.21%
 
8.00%
Total Risk-Based Ratio
13.23%
 
13.38%
 
12.94%
 
10.00%

Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:
(unaudited)
12/31/2019
 
9/30/2019
 
12/31/2018
Tangible common equity per share (1)
$12.40
 
$12.27
 
$11.25
Tangible common equity to tangible assets (2)
10.27%
 
10.43%
 
9.61%

(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 7.
(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 7.

Management reviews tangible common equity to tangible assets ratio in evaluating the Company’s and the Bank’s capital levels and has included these figures and tangible common equity per share figures in response to market participant interest in tangible common equity as a measure of capital. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information.

Stock Repurchase Plan
 
Under the Company’s $50 million stock repurchase program announced on July 16, 2019, the Company repurchased 943,094 shares at an average price of $14.62 during the 2019 fourth quarter. As of December 31, 2019, $36.2 million of the plan remained available.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Thursday, January 23, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter ended December 31, 2019. 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 in the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through January 30, 2020, replay access code 10137771.


(more)

Page 6-6-6                                             NASDAQ: HOPE

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 $15.7 billion in total assets as of December 31, 2019. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 58 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 loan losses, including the timing and effects of the implementation of the current expected credit losses model; 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 and Quarterly Report on Form 10-Q. 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
EVP & Chief Financial Officer
213-427-6560


Angie Yang
SVP, Director of Investor Relations &
Corporate Communications
213-251-2219

# # #

(tables follow)





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


Assets
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change
Cash and due from banks
$
698,567

 
$
549,356

 
27
 %
 
$
459,606

 
52
 %
Securities available for sale, at fair value
1,715,987

 
1,772,322

 
(3
)%
 
1,846,265

 
(7
)%
Federal Home Loan Bank (“FHLB”) stock and other investments
97,659

 
98,848

 
(1
)%
 
104,705

 
(7
)%
Loans held for sale, at the lower of cost or fair value
54,271

 
29,627

 
83
 %
 
25,128

 
116
 %
Loans receivable
12,276,007

 
12,104,682

 
1
 %
 
12,098,115

 
1
 %
Allowance for loan losses
(94,144
)
 
(93,882
)
 
 %
 
(92,557
)
 
(2
)%
  Net loans receivable
12,181,863

 
12,010,800

 
1
 %
 
12,005,558

 
1
 %
Accrued interest receivable
30,772

 
29,743

 
3
 %
 
32,225

 
(5
)%
Premises and equipment, net
52,012

 
52,604

 
(1
)%
 
53,794

 
(3
)%
Bank owned life insurance
76,339

 
75,968

 
 %
 
75,219

 
1
 %
Goodwill
464,450

 
464,450

 
 %
 
464,450

 
 %
Servicing assets
16,417

 
17,865

 
(8
)%
 
23,132

 
(29
)%
Other intangible assets, net
11,833

 
12,390

 
(4
)%
 
14,061

 
(16
)%
Other assets
267,270

 
265,905

 
1
 %
 
201,809

 
32
 %
  Total assets
$
15,667,440

 
$
15,379,878

 
2
 %
 
$
15,305,952

 
2
 %
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Deposits
$
12,527,364

 
$
12,234,750

 
2
 %
 
$
12,155,656

 
3
 %
FHLB advances
625,000

 
625,000

 
 %
 
821,280

 
(24
)%
Convertible notes, net
199,458

 
198,211

 
1
 %
 
194,543

 
3
 %
Subordinated debentures
103,035

 
102,755

 
 %
 
101,929

 
1
 %
Accrued interest payable
33,810

 
38,197

 
(11
)%
 
31,374

 
8
 %
Other liabilities
142,762

 
149,681

 
(5
)%
 
97,959

 
46
 %
  Total liabilities
13,631,429

 
13,348,594

 
2
 %
 
13,402,741

 
2
 %
 
 
 
 
 
 
 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Common stock, $0.001 par value
136

 
136

 
 %
 
136

 
 %
Capital surplus
1,428,066

 
1,426,666

 
 %
 
1,423,405

 
 %
Retained earnings
762,480

 
737,209

 
3
 %
 
662,375

 
15
 %
Treasury stock, at cost
(163,820
)
 
(150,000
)
 
(9
)%
 
(150,000
)
 
(9
)%
Accumulated other comprehensive gain (loss)
9,149

 
17,273

 
(47
)%
 
(32,705
)
 
128
 %
  Total stockholders’ equity
2,036,011

 
2,031,284

 
 %
 
1,903,211

 
7
 %
  Total liabilities and stockholders’ equity
$
15,667,440

 
$
15,379,878

 
2
 %
 
$
15,305,952

 
2
 %
 
 
 
 
 
 
 
 
 
 
Common stock shares - authorized
150,000,000

 
150,000,000

 
 
 
150,000,000

 
 
Common stock shares - outstanding
125,756,543

 
126,697,925

 
 
 
126,639,912

 
 
Treasury stock shares
9,945,547

 
9,002,453

 
 
 
9,002,453

 
 


Table Page 1


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


 
Three Months Ended
 
Twelve Months Ended
 
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change
 
12/31/2019
 
12/31/2018
 
% change
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Interest and fees on loans
$
152,795

 
$
158,115

 
(3
)%
 
$
156,606

 
(2
)%
 
$
627,673

 
$
594,103

 
6
 %
  Interest on securities
10,737

 
11,373

 
(6
)%
 
12,385

 
(13
)%
 
46,295

 
45,342

 
2
 %
  Interest on federal funds sold and other investments
2,241

 
2,929

 
(23
)%
 
3,035

 
(26
)%
 
10,818

 
10,727

 
1
 %
    Total interest income
165,773

 
172,417

 
(4
)%
 
172,026

 
(4
)%
 
684,786

 
650,172

 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Interest on deposits
45,428

 
49,057

 
(7
)%
 
42,477

 
7
 %
 
190,158

 
134,958

 
41
 %
  Interest on other borrowings and convertible notes
6,837

 
7,102

 
(4
)%
 
7,656

 
(11
)%
 
28,033

 
27,287

 
3
 %
    Total interest expense
52,265

 
56,159

 
(7
)%
 
50,133

 
4
 %
 
218,191

 
162,245

 
34
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income before provision for loan losses
113,508

 
116,258

 
(2
)%
 
121,893

 
(7
)%
 
466,595

 
487,927

 
(4
)%
Provision for loan losses
1,000

 
2,100

 
(52
)%
 
2,800

 
(64
)%
 
7,300

 
14,900

 
(51
)%
Net interest income after provision for loan losses
112,508

 
114,158

 
(1
)%
 
119,093

 
(6
)%
 
459,295

 
473,027

 
(3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Service fees on deposit accounts
4,510

 
4,690

 
(4
)%
 
4,568

 
(1
)%
 
17,933

 
18,551

 
(3
)%
  Net gains on sales of SBA loans

 

 
 %
 
447

 
(100
)%
 

 
9,708

 
(100
)%
  Net gains on sales of other loans
1,876

 
804

 
133
 %
 
381

 
392
 %
 
4,487

 
2,485

 
81
 %
  Net gains on sales of securities available for sale

 
153

 
(100
)%
 

 
 %
 
282

 

 
100
 %
  Other income and fees
6,593

 
7,348

 
(10
)%
 
6,218

 
6
 %
 
26,981

 
29,436

 
(8
)%
    Total noninterest income
12,979

 
12,995

 
 %
 
11,614

 
12
 %
 
49,683

 
60,180

 
(17
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Salaries and employee benefits
39,841

 
41,607

 
(4
)%
 
36,594

 
9
 %
 
161,174

 
153,523

 
5
 %
  Occupancy
7,516

 
7,703

 
(2
)%
 
7,877

 
(5
)%
 
30,735

 
30,371

 
1
 %
  Furniture and equipment
4,260

 
3,851

 
11
 %
 
3,448

 
24
 %
 
15,583

 
14,902

 
5
 %
  Advertising and marketing
2,462

 
2,377

 
4
 %
 
2,392

 
3
 %
 
9,146

 
9,414

 
(3
)%
  Data processing and communications
2,416

 
2,821

 
(14
)%
 
3,650

 
(34
)%
 
10,780

 
14,232

 
(24
)%
  Professional fees
5,948

 
5,241

 
13
 %
 
4,756

 
25
 %
 
22,528

 
16,286

 
38
 %
  FDIC assessment
772

 

 
100
 %
 
1,406

 
(45
)%
 
3,882

 
6,572

 
(41
)%
  Credit related expenses
1,717

 
1,031

 
67
 %
 
507

 
239
 %
 
4,975

 
2,863

 
74
 %
  OREO (income) expense, net
(122
)
 
(743
)
 
(84
)%
 
302

 
N/A

 
(934
)
 
187

 
N/A

  Branch restructuring costs

 

 
 %
 
1,674

 
(100
)%
 

 
1,674

 
(100
)%
  Other
5,619

 
6,107

 
(8
)%
 
7,583

 
(26
)%
 
24,759

 
27,702

 
(11
)%
    Total noninterest expense
70,429

 
69,995

 
1
 %
 
70,189

 
 %
 
282,628

 
277,726

 
2
 %
Income before income taxes
55,058

 
57,158

 
(4
)%
 
60,518

 
(9
)%
 
226,350

 
255,481

 
(11
)%
Income tax provision
12,049

 
14,566

 
(17
)%
 
16,069

 
(25
)%
 
55,310

 
65,892

 
(16
)%
Net income
$
43,009

 
$
42,592

 
1
 %
 
$
44,449

 
(3
)%
 
$
171,040

 
$
189,589

 
(10
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic
$
0.34

 
$
0.34

 
 
 
$
0.35

 
 
 
$
1.35

 
$
1.44

 
 
  Diluted
$
0.34

 
$
0.34

 
 
 
$
0.35

 
 
 
$
1.35

 
$
1.44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Shares Outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic
126,410,924

 
126,685,921

 
 
 
128,115,170

 
 
 
126,598,564

 
131,716,726

 
 
  Diluted
126,835,273

 
127,007,469

 
 
 
128,261,998

 
 
 
126,875,320

 
131,954,192

 
 

Table Page 2


Hope Bancorp, Inc.
Selected Financial Data
Unaudited


 
At or for the Three Months Ended
(Annualized)
 
At or for the Twelve Months Ended
Profitability measures:
12/31/2019
 
9/30/2019
 
12/31/2018
 
12/31/2019
 
12/31/2018
  ROA
1.13
%
 
1.12
%
 
1.17
%
 
1.12
%
 
1.29
%
  ROE
8.46
%
 
8.47
%
 
9.42
%
 
8.63
%
 
9.92
%
  Return on average tangible equity 1
11.04
%
 
11.11
%
 
12.62
%
 
11.37
%
 
13.25
%
  Net interest margin
3.16
%
 
3.25
%
 
3.41
%
 
3.27
%
 
3.53
%
  Efficiency ratio
55.68
%
 
54.15
%
 
52.57
%
 
54.74
%
 
50.67
%
  Noninterest expense / average assets
1.85
%
 
1.85
%
 
1.85
%
 
1.86
%
 
1.88
%
 
 
 
 
 
 
 
 
 
 
1 Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position.
 


Table Page 3


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


 
Three Months Ended
 
12/31/2019
 
9/30/2019
 
12/31/2018
 
 
 
Interest
 
Annualized
 
 
 
Interest
 
Annualized
 
 
 
Interest
 
Annualized
 
Average
 
Income/
 
Average
 
Average
 
Income/
 
Average
 
Average
 
Income/
 
 Average
 
Balance
 
Expense
 
Yield/Cost
 
Balance
 
Expense
 
Yield/Cost
 
Balance
 
Expense
 
 Yield/Cost
INTEREST EARNING ASSETS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Loans receivable, including loans held for sale
$
12,036,477

 
$
152,795

 
5.04
%
 
$
11,911,658

 
$
158,115

 
5.27
%
 
$
11,935,109

 
$
156,606

 
5.21
%
  Securities available for sale
1,755,887

 
10,737

 
2.43
%
 
1,798,239

 
11,373

 
2.51
%
 
1,835,218

 
12,385

 
2.68
%
  FHLB stock and other investments
463,615

 
2,241

 
1.92
%
 
482,952

 
2,929

 
2.41
%
 
431,901

 
3,035

 
2.79
%
Total interest earning assets
$
14,255,979

 
$
165,773

 
4.61
%
 
$
14,192,849

 
$
172,417

 
4.82
%
 
$
14,202,228

 
$
172,026

 
4.81
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST BEARING LIABILITIES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Demand, interest bearing
$
3,682,300

 
$
14,924

 
1.61
%
 
$
3,450,749

 
$
15,802

 
1.82
%
 
$
3,127,598

 
$
12,425

 
1.58
%
    Savings
265,008

 
748

 
1.12
%
 
252,780

 
675

 
1.06
%
 
225,746

 
537

 
0.94
%
    Time deposits
5,148,092

 
29,756

 
2.29
%
 
5,368,753

 
32,580

 
2.41
%
 
5,626,355

 
29,515

 
2.08
%
  Total interest bearing deposits
9,095,400

 
45,428

 
1.98
%
 
9,072,282

 
49,057

 
2.15
%
 
8,979,699

 
42,477

 
1.88
%
  FHLB advances & fed funds purchased
608,052

 
2,921

 
1.91
%
 
632,500

 
3,112

 
1.95
%
 
824,995

 
3,674

 
1.77
%
  Convertible notes, net
198,669

 
2,334

 
4.60
%
 
197,410

 
2,322

 
4.60
%
 
193,749

 
2,299

 
4.64
%
  Subordinated debentures
98,972

 
1,582

 
6.25
%
 
98,690

 
1,668

 
6.61
%
 
97,856

 
1,683

 
6.73
%
Total interest bearing liabilities
10,001,093

 
$
52,265

 
2.07
%
 
10,000,882

 
$
56,159

 
2.23
%
 
10,096,299

 
$
50,133

 
1.97
%
Noninterest bearing demand deposits
2,999,048

 
 
 
 
 
2,958,233

 
 
 
 
 
3,018,672

 
 
 
 
Total funding liabilities/cost of funds
$
13,000,141

 
 
 
1.60
%
 
$
12,959,115

 
 
 
1.72
%
 
$
13,114,971

 
 
 
1.52
%
Net interest income/net interest spread
 
 
$
113,508

 
2.54
%
 
 
 
$
116,258

 
2.59
%
 
 
 
$
121,893

 
2.84
%
Net interest margin
 
 
 
 
3.16
%
 
 
 
 
 
3.25
%
 
 
 
 
 
3.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Noninterest bearing demand deposits
$
2,999,048

 
$

 
%
 
$
2,958,233

 
$

 
%
 
$
3,018,672

 
$

 
%
    Interest bearing deposits
9,095,400

 
45,428

 
1.98
%
 
9,072,282

 
49,057

 
2.15
%
 
8,979,699

 
42,477

 
1.88
%
Total deposits
$
12,094,448

 
$
45,428

 
1.49
%
 
$
12,030,515

 
$
49,057

 
1.62
%
 
$
11,998,371

 
$
42,477

 
1.40
%

Table Page 4


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



 
Twelve Months Ended
 
12/31/2019
 
12/31/2018
 
 
 
Interest
 
 
 
 
 
 Interest
 
 
 
Average
 
Income/
 
Average
 
Average
 
 Income/
 
Average
 
Balance
 
Expense
 
Yield/Cost
 
Balance
 
 Expense
 
Yield/Cost
INTEREST EARNING ASSETS:
 
 
 
 
 
 
 
 
 
 
 
  Loans receivable, including loans held for sale
$
11,998,675

 
$
627,673

 
5.23
%
 
$
11,547,022

 
$
594,103

 
5.15
%
  Securities available for sale
1,796,412

 
46,295

 
2.58
%
 
1,772,080

 
45,342

 
2.56
%
  FHLB stock and other investments
453,452

 
10,818

 
2.39
%
 
487,922

 
10,727

 
2.20
%
Total interest earning assets
$
14,248,539

 
$
684,786

 
4.81
%
 
$
13,807,024

 
$
650,172

 
4.71
%
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST BEARING LIABILITIES:
 
 
 
 
 
 
 
 
 
 
 
  Deposits:
 
 
 
 
 
 
 
 
 
 
 
    Demand, interest bearing
$
3,319,556

 
$
57,731

 
1.74
%
 
$
3,276,815

 
$
43,252

 
1.32
%
    Savings
241,968

 
2,596

 
1.07
%
 
229,608

 
1,889

 
0.82
%
    Time deposits
5,556,983

 
129,831

 
2.34
%
 
5,107,698

 
89,817

 
1.76
%
  Total interest bearing deposits
9,118,507

 
190,158

 
2.09
%
 
8,614,121

 
134,958

 
1.57
%
  FHLB advances & fed funds purchased
688,652

 
12,031

 
1.75
%
 
870,124

 
15,127

 
1.74
%
  Convertible notes, net
196,835

 
9,264

 
4.64
%
 
123,040

 
5,797

 
4.65
%
  Subordinated debentures
98,551

 
6,738

 
6.74
%
 
97,455

 
6,363

 
6.44
%
Total interest bearing liabilities
10,102,545

 
$
218,191

 
2.16
%
 
9,704,740

 
$
162,245

 
1.67
%
Noninterest bearing demand deposits
2,948,212

 
 
 
 
 
3,014,056

 
 
 
 
Total funding liabilities/cost of funds
$
13,050,757

 
 
 
1.67
%
 
$
12,718,796

 
 
 
1.28
%
Net interest income/net interest spread
 
 
$
466,595

 
2.65
%
 
 
 
$
487,927

 
3.04
%
Net interest margin
 
 
 
 
3.27
%
 
 
 
 
 
3.53
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of deposits:
 
 
 
 
 
 
 
 
 
 
 
    Noninterest bearing demand deposits
$
2,948,212

 
$

 
%
 
$
3,014,056

 
$

 
%
    Interest bearing deposits
9,118,507

 
190,158

 
2.09
%
 
8,614,121

 
134,958

 
1.57
%
Total deposits
$
12,066,719

 
$
190,158

 
1.58
%
 
$
11,628,177

 
$
134,958

 
1.16
%


Table Page 5


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


 
 Three Months Ended
 
 Twelve Months Ended
AVERAGE BALANCES:
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change
 
12/31/2019
 
12/31/2018
 
% change
Loans receivable, including loans held for sale
$
12,036,477

 
$
11,911,658

 
1
 %
 
$
11,935,109

 
1
 %
 
$
11,998,675

 
$
11,547,022

 
4
 %
Investments
2,219,502

 
2,281,191

 
(3
)%
 
2,267,119

 
(2
)%
 
2,249,864

 
2,260,002

 
 %
Interest earning assets
14,255,979

 
14,192,849

 
 %
 
14,202,228

 
 %
 
14,248,539

 
13,807,024

 
3
 %
Total assets
15,228,488

 
15,154,661

 
 %
 
15,152,946

 
 %
 
15,214,412

 
14,749,166

 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits
9,095,400

 
9,072,282

 
 %
 
8,979,699

 
1
 %
 
9,118,507

 
8,614,121

 
6
 %
Interest bearing liabilities
10,001,093

 
10,000,882

 
 %
 
10,096,299

 
(1
)%
 
10,102,545

 
9,704,740

 
4
 %
Noninterest bearing demand deposits
2,999,048

 
2,958,233

 
1
 %
 
3,018,672

 
(1
)%
 
2,948,212

 
3,014,056

 
(2
)%
Stockholders’ equity
2,034,231

 
2,010,458

 
1
 %
 
1,888,053

 
8
 %
 
1,981,811

 
1,910,224

 
4
 %
Net interest earning assets
4,254,886

 
4,191,967

 
2
 %
 
4,105,929

 
4
 %
 
4,145,994

 
4,102,284

 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LOAN PORTFOLIO COMPOSITION:
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change
 
 
 
 
 
 
Commercial loans
$
2,719,210

 
$
2,643,836

 
3
 %
 
$
2,324,820

 
17
 %
 
 
 
 
 
 
Real estate loans
8,664,965

 
8,587,943

 
1
 %
 
8,721,600

 
(1
)%
 
 
 
 
 
 
Consumer and other loans
889,090

 
870,734

 
2
 %
 
1,051,486

 
(15
)%
 
 
 
 
 
 
    Loans outstanding
12,273,265

 
12,102,513

 
1
 %
 
12,097,906

 
1
 %
 
 
 
 
 
 
Unamortized deferred loan fees - net of costs
2,742

 
2,169

 
26
 %
 
209

 
1,212
 %
 
 
 
 
 
 
    Loans, net of deferred loan fees and costs
12,276,007

 
12,104,682

 
1
 %
 
12,098,115

 
1
 %
 
 
 
 
 
 
Allowance for loan losses
(94,144
)
 
(93,882
)
 
 %
 
(92,557
)
 
(2
)%
 
 
 
 
 
 
    Loans receivable, net
$
12,181,863

 
$
12,010,800

 
1
 %
 
$
12,005,558

 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REAL ESTATE LOANS BY PROPERTY TYPE:
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change
 
 
 
 
 
 
Retail buildings
$
2,298,872

 
$
2,304,346

 
 %
 
$
2,379,589

 
(3
)%
 
 
 
 
 
 
Hotels/motels
1,709,189

 
1,664,311

 
3
 %
 
1,694,696

 
1
 %
 
 
 
 
 
 
Gas stations/car washes
844,081

 
911,494

 
(7
)%
 
980,619

 
(14
)%
 
 
 
 
 
 
Mixed-use facilities
785,882

 
743,428

 
6
 %
 
698,779

 
12
 %
 
 
 
 
 
 
Warehouses
1,030,876

 
949,336

 
9
 %
 
966,413

 
7
 %
 
 
 
 
 
 
Multifamily
465,397

 
473,640

 
(2
)%
 
453,555

 
3
 %
 
 
 
 
 
 
Other
1,530,668

 
1,541,388

 
(1
)%
 
1,547,949

 
(1
)%
 
 
 
 
 
 
Total
$
8,664,965

 
$
8,587,943

 
1
 %
 
$
8,721,600

 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPOSIT COMPOSITION:
12/31/2019
 
9/30/2019
 
% change
 
12/31/2018
 
% change