Hope Bancorp Reports Record Net Income of $44.6 Million, or $0.33 EPS, for 2017 Third Quarter
Q3 2017 Highlights:
- Net income increases 10% to a record $44.6 million, or $0.33 per diluted common share
- Net interest margin expands 8 basis points to 3.83%
- Expands presence in Texas with opening of second full-service branch in Houston
- Loans receivable increase organically by $147 million to $10.96 billion, or 5% on an annualized basis
- Total assets increase 2% to $14.15 billion, or 8% on an annualized basis
LOS ANGELES, Oct. 24, 2017 (GLOBE NEWSWIRE) -- Hope Bancorp, Inc. (the “Company”) (NASDAQ:HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its three- and nine-month periods ended September 30, 2017.
The mergers of Wilshire Bancorp, Inc. (“Wilshire”) with and into BBCN Bancorp, Inc. (“BBCN”) and Wilshire Bank with and into BBCN Bank were completed on July 29, 2016, and the combined companies commenced operations under the new banners of Hope Bancorp, Inc. and Bank of Hope, respectively, effective July 30, 2016. The 2017 financial results reflect full quarters of combined operations. The 2016 third quarter reflects one month of stand-alone operations of the former BBCN and two months of combined operations. As a result, the Company’s financial results for the 2017 periods may not be comparable to financial results for the corresponding 2016 periods.
For the three months ended September 30, 2017, net income increased 10% to a record $44.6 million, or $0.33 per diluted common share, from $40.7 million, or $0.30 per diluted common share, for the preceding 2017 second quarter. In the year-ago 2016 third quarter during which the mergers were completed, net income amounted to $26.1 million, or $0.22 per diluted common share, and included $11.2 million in pre-tax merger-related expenses.
“We are very pleased with the many positive trends in our financial performance that resulted in record earnings of $44.6 million for the 2017 third quarter,” said Kevin S. Kim, President and Chief Executive Officer. “Net interest income before provision for loan losses increased 6%, and our net interest margin increased by 8 basis points, reflecting a full quarter’s benefit of the June 2017 interest rate increase and the strong loan growth that occurred at the tail end of the preceding quarter. Notably, our residential mortgage operations delivered its strongest quarter since the merger with consumer residential mortgage originations of $119 million. The progress that our new institutional banking group is making with attracting a new customer base and deposit relationships also appears to be quite promising. Together with a concentrated focus on expense management and a non-core, credit-related benefit, we achieved an efficiency ratio of 44.32% for the 2017 third quarter.
“A full year following our transformational merger, Bank of Hope surpassed $14 billion in assets, and I am confident that the investments we are making in our organization today will support sustainable growth and profitability for many years to come,” said Kim.
Financial Highlights
| (dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | ||||||||||
| 9/30/2017 | 6/30/2017 | 9/30/2016 | |||||||||
| Net income | $ | 44,564 | $ | 40,687 | $ | 26,105 | |||||
| Diluted earnings per share | $ | 0.33 | $ | 0.30 | $ | 0.22 | |||||
| Net interest income before provision for loan losses | $ | 123,263 | $ | 116,820 | $ | 103,474 | |||||
| Net interest margin | 3.83 | % | 3.75 | % | 3.77 | % | |||||
| Noninterest income | $ | 16,246 | $ | 16,115 | $ | 14,146 | |||||
| Noninterest expense | $ | 61,837 | $ | 64,037 | $ | 67,846 | |||||
| Net loans receivable | $ | 10,879,341 | $ | 10,736,345 | $ | 10,481,221 | |||||
| Deposits | $ | 10,993,320 | $ | 10,955,101 | $ | 10,702,505 | |||||
| Nonaccrual loans (1) | $ | 43,323 | $ | 47,361 | $ | 40,602 | |||||
| ALLL to loans receivable | 0.76 | % | 0.74 | % | 0.76 | % | |||||
| ALLL to nonaccrual loans (1) | 193.05 | % | 169.07 | % | 196.98 | % | |||||
| ALLL to nonperforming assets (1) (2) | 66.51 | % | 64.40 | % | 68.38 | % | |||||
| Provision for loan losses | $ | 5,400 | $ | 2,760 | $ | 6,500 | |||||
| Net charge offs | $ | 1,841 | $ | 1,345 | $ | 2,949 | |||||
| Return on assets (“ROA”) | 1.30 | % | 1.21 | % | 0.89 | % | |||||
| Return on equity (“ROE”) | 9.26 | % | 8.60 | % | 6.59 | % | |||||
| Efficiency ratio | 44.32 | % | 48.17 | % | 57.68 | % | |||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $21.5 million, $15.5 million and $14.1 million at September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
(2) Nonperforming assets exclude purchased credit-impaired loans totaling $20.4 million, $16.3 million and $16.4 million at September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
Operating Results for the 2017 Third Quarter
The comparability of the Company’s operating results with past performance is impacted by acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions. The Company provides the following supplemental information to facilitate a better understanding of financial performance. Net interest income and operating income for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 include the following pre-tax acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions:
| (dollars in thousands) (unaudited) | Three Months Ended | ||||||||||
| 9/30/2017 | 6/30/2017 | 9/30/2016 | |||||||||
| Accretion on purchased non-impaired loans | $ | 4,566 | $ | 3,501 | $ | 3,111 | |||||
| Accretion on purchased credit-impaired loans | 5,389 | 5,212 | 1,673 | ||||||||
| Amortization of premium on low income housing tax credits | (84 | ) | (85 | ) | (54 | ) | |||||
| Amortization of premium on acquired FHLB borrowings | 357 | 446 | 1,940 | ||||||||
| Accretion of discount on acquired subordinated debt | (262 | ) | (261 | ) | (190 | ) | |||||
| Amortization of premium on acquired time deposits and savings | 206 | 1,218 | 2,336 | ||||||||
| Amortization of core deposit intangibles | (676 | ) | (676 | ) | (565 | ) | |||||
| Total acquisition accounting adjustments | $ | 9,496 | $ | 9,355 | $ | 8,251 | |||||
| Merger-related expenses | (260 | ) | (562 | ) | (11,222 | ) | |||||
| Total | $ | 9,236 | $ | 8,793 | $ | (2,971 | ) | ||||
Net Interest Income. Net interest income before provision for loan losses for the 2017 third quarter increased 6% to $123.3 million from $116.8 million in the immediately preceding second quarter, predominantly reflecting higher levels of interest and fee income on larger loan and securities portfolios, as well as an 18 basis point increase in the average loan yield. In the year-ago third quarter, net interest income before provision for loan losses amounted to$103.5 million.
The net interest margin (net interest income divided by average interest earning assets) for the 2017 third quarter increased 8 basis points to 3.83% from 3.75% in the 2017 second quarter and increased 6 basis points from 3.77% in the year-ago third quarter.
The weighted average yield on loans for the 2017 third quarter increased to 5.07% from 4.89% in the 2017 second quarter, reflecting a full quarter’s benefit from the June 2017 rate increase. Compared with the 2016 third quarter, the weighted average yield on loans increased 27 basis points.
The weighted average yield on new loans originated was 4.40% for the 2017 third quarter, compared with 4.56% in the preceding 2017 second quarter and 4.03% in the year-ago third quarter.
The weighted average cost of deposits for the 2017 third quarter increased 7 basis points to 0.75% from 0.68% in the 2017 second quarter and increased 19 basis points from the year-ago third quarter.
Noninterest Income. Noninterest income for the 2017 third quarter increased 1% to $16.2 million from $16.1 million in the 2017 second quarter. Compared with the immediately preceding 2017 second quarter, net gains on sales of SBA loans increased to $3.6 million from $3.3 million, and net gains on sales of residential mortgage loans increased to $847,000 from $352,000. These increases were largely offset by lower levels of swap fee income and recoveries on acquired charged off loans versus the 2017 second quarter. Compared with the 2016 third quarter, noninterest income increased 15% from $14.1 million, largely reflecting a nominal gain on sales of SBA loans of only $230,000.
Noninterest Expense. Noninterest expense declined 3% to $61.8 million in the 2017 third quarter from $64.0 million in the 2017 second quarter, largely reflecting a $2.8 million reversal of an off-balance sheet provision for unfunded loan commitments, partially offset by increased compensation expense. In the 2016 third quarter, total noninterest expense amounted to $67.8 million and included merger-related expenses of $11.2 million in the quarter that the merger of equals was completed.
Salaries and employee benefits expense for the 2017 third quarter increased 3% to $36.0 million from $34.9 million for the immediately preceding second quarter and increased 18% from $30.5 million in the year-ago third quarter. The total number of FTEs, excluding employees on leave, as of September 30, 2017 was 1,463, up from 1,378 as of June 30, 2017 and 1,400 as of September 30, 2016.
Income Tax Provision. The effective tax rate for the 2017 third quarter was 38.3%, compared with 38.5% for the preceding 2017 second quarter and 39.7% for the third quarter a year ago.
Balance Sheet Summary
Loans receivable increased by $146.6 million to $10.96 billion at September 30, 2017 from $10.82 billion at June 30, 2017, reflecting a 5% annualized growth rate. At September 30, 2016, loans receivable were $10.56 billion.
Total new loan originations during the 2017 third quarter amounted to $610.9 million and included SBA loan production of $67.9 million and residential mortgage loan originations of $119.9 million.
Sales of SBA loans to the secondary market and gains derived from those sales are based substantially on the production of SBA 7(a) loans. SBA 7(a) loan originations totaled $49.7 million for the third quarter of 2017, compared with $65.5 million for the second quarter of 2017 and $50.2 million for the year-ago third quarter. During the 2017 third quarter, the Company sold $49.9 million of its SBA loans held for sale, compared with $46.1 million in the immediately preceding second quarter and $2.4 million in the third quarter a year ago.
Aggregate pay offs and pay downs in the 2017 third quarter amounted to $447.6 million, compared with $432.1 million for the immediately preceding second quarter. In the year-ago third quarter, aggregate pay offs and paydowns totaled $357.0 million.
Total deposits at September 30, 2017 increased to $10.99 billion from $10.95 billion at June 30, 2017 and from $10.70 billion at September 30, 2016. Noninterest bearing demand deposits trended positively and accounted for 27.7%, 27.5% and 27.1% of total deposits as of September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
Credit Quality
The provision for loan and lease losses for the 2017 third quarter was $5.4 million, compared with $2.8 million for the immediately preceding second quarter and $6.5 million for the year-ago third quarter.
For a more detailed understanding of the changes in the allowance for loan and lease losses (“ALLL”), the composition of the ALLL has been segmented for disclosure purposes between loans accounted for under the amortized cost method (referred to as “legacy loans”) and loans acquired through the Wilshire Bancorp, Center Financial, Pacific International and Foster Bankshares transactions (referred to as “purchased loans”). The purchased loans are further segregated between non-impaired and credit-impaired loans.
The composition of the ALLL as of September 30, 2017, June 30, 2017 and September 30, 2016 is as follows:
| (dollars in thousands) (unaudited) | 9/30/2017 | 6/30/2017 | 9/30/2016 | ||||||||
| Legacy loans (1) | $ | 70,282 | $ | 65,255 | $ | 66,986 | |||||
| Purchased non-impaired loans (2) | 2,740 | 2,753 | 938 | ||||||||
| Purchased credit-impaired loans (2) | 10,611 | 12,066 | 12,052 | ||||||||
| Total ALLL | $ | 83,633 | $ | 80,074 | $ | 79,976 | |||||
| Loans receivable | $ | 10,962,974 | $ | 10,816,419 | $ | 10,561,197 | |||||
| ALLL coverage ratio | 0.76% | 0.74% | 0.76% | ||||||||
(1) Legacy loans include loans originated by the Bank’s predecessor banks, loans originated by Bank of Hope and loans that were acquired that have been refinanced as new loans.
(2) Purchased loans were marked to fair value at acquisition date, and the ALLL reflects provisions for credit deterioration since the acquisition date.
The Company defines nonperforming loans to include delinquent loans past due 90 days or more on nonaccrual status, delinquent loans past due 90 days or more on accrual status (excluding purchased credit-impaired loans) and accruing restructured loans. Nonaccrual loans at September 30, 2017 declined to $43.3 million, or 0.40% of loans receivable, from $47.4 million, or 0.44% of loans receivable, at June 30, 2017. At September 30, 2016, nonaccrual loans amounted to $40.6 million, or 0.38% of loans receivable. Accruing restructured loans totaled $64.8 million at September 30, 2017, compared with $53.3 million at June 30, 2017 and $48.7 million at September 30, 2016. Total nonperforming loans at September 30, 2017 increased to $108.5 million, or 0.99% of loans receivable, from $102.5 million, or 0.95% of loans receivable, at June 30, 2017 and $89.5 million, or 0.85% of loans receivable, at September 30, 2016.
Nonperforming assets, including nonperforming loans and OREO, increased to $125.7 million at September 30, 2017 from $124.3 million at June 30, 2017 and $117.0 million at September 30, 2016. As a percentage of total assets, nonperforming assets was 0.89% at September 30, 2017, 0.90% at June 30, 2017 and 0.87% at September 30, 2016.
Following are the components of criticized loan balances as of September 30, 2017, June 30, 2017 and September 30, 2016:
| (dollars in thousands) (unaudited) | 9/30/2017 | 6/30/2017 | 9/30/2016 | |||||
| Special Mention (1) | $ | 225,228 | $ | 251,056 | $ | 308,893 | ||
| Classified (1) | 348,109 | 315,441 | 259,268 | |||||
| Criticized | $ | 573,337 | $ | 566,498 | $ | 568,161 | ||
(1) Balances include purchased loans which were marked to fair value on the date of acquisition.
Criticized loan balances as of September 30, 2017 were relatively stable when compared with the preceding second quarter and year-ago third quarter. The variance in the criticized loan balance from the 2017 second quarter reflects the migration of loans from special mention to classified, which has been accounted for in the provision for loan losses for the 2017 third quarter.
For the 2017 third quarter, net charge offs totaled $1.8 million, or 0.07% of average loans receivable on an annualized basis. This compares with 2017 second quarter net charge offs of $1.3 million, or 0.05% of average loans receivable on an annualized basis, and $2.9 million, or 0.13% of average loans receivable on an annualized basis, for the year-ago third quarter.
The ALLL at September 30, 2017 was $83.6 million, or 0.76% of loans receivable (excluding loans held for sale), compared with $80.1 million, or 0.74% of loans receivable (excluding loans held for sale), at June 30, 2017 and $80.0 million, or 0.76% of loans receivable (excluding loans held for sale), at September 30, 2016. The coverage ratio of the ALLL to nonperforming loans (excluding purchased credit-impaired loans) was 77.05% at September 30, 2017, compared with 78.12% at June 30, 2017 and 89.36% at September 30, 2016.
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 $108.5 million at September 30, 2017, compared with $100.7 million at June 30, 2017 and $128.1 million at September 30, 2016.
Capital
At September 30, 2017, the Company continued to exceed all regulatory capital requirements to be generally classified as a “well-capitalized” financial institution, as summarized in the following table:
| 9/30/2017 | 6/30/2017 | 9/30/2016 | Minimum Guideline for “Well-Capitalized” Institution |
||||||||
| Common Equity Tier 1 Capital | 12.29% | 12.18% | 11.96% | 6.50% | |||||||
| Tier 1 Leverage Ratio | 11.78% | 11.80% | 13.02% | 5.00% | |||||||
| Tier 1 Risk-based Ratio | 13.10% | 13.00% | 12.79% | 8.00% | |||||||
| Total Risk-based Ratio | 13.81% | 13.70% | 13.51% | 10.00% | |||||||
Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:
| 9/30/2017 | 6/30/2017 | 9/30/2016 | |||||||||
| Tangible common equity per share (1) | $10.72 | $10.52 | $10.14 | ||||||||
| Tangible common equity to tangible assets (1) | 10.63% | 10.64% | 10.52% | ||||||||
(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and net other intangible assets divided by total assets less goodwill and net other intangible assets. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. The accompanying financial information includes a reconciliation of the ratio of tangible common equity to tangible assets with stockholders’ equity to total assets.
Investor Conference Call
The Company will host an investor conference call on Wednesday, October 25, 2017 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the third quarter ended September 30, 2017. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international), and asking for the “Hope Bancorp Call.” Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. By including the foregoing website address, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. 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 November 1, 2017, replay access code 10112701.
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 $14.2 billion in total assets as of September 30, 2017. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 64 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, and Portland, Oregon; a commercial loan production office in Fremont, California; residential mortgage loan production offices in California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address, the registrant does not intent to and shall not be deemed to incorporate by reference any material contained therein.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Our actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: the Company’s inability to remediate its presently identified material weaknesses or to do so in a timely manner, the possibility that additional material weaknesses may arise in the future, and that a material weakness may have an impact on our reported financial results; possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; and regulatory risks associated with current and future regulations. For additional information concerning these and other risk factors, see Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2016 and Part II, Item 1A., Risk Factors, contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. The Company does not undertake, and specifically disclaims any obligation, to update any forward looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law
(tables follow)
| Hope Bancorp, Inc. | ||||||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||||
| Unaudited (dollars in thousands, except share data) | ||||||||||||||||||||||||
| Assets | 9/30/2017 | 6/30/2017 | % change | 12/31/2016 | % change | 9/30/2016 | % change | |||||||||||||||||
| Cash and due from banks | $ | 405,296 | $ | 446,415 | (9 | )% | $ | 437,334 | (7 | )% | $ | 443,903 | (9 | )% | ||||||||||
| Securities available for sale, at fair value | 1,868,309 | 1,680,382 | 11 | % | 1,556,740 | 20 | % | 1,558,719 | 20 | % | ||||||||||||||
| Federal Home Loan Bank (“FHLB”), Federal Reserve Bank (“FRB”) stock and other investments | 82,141 | 66,313 | 24 | % | 66,166 | 24 | % | 69,119 | 19 | % | ||||||||||||||
| Loans held for sale, at the lower of cost or fair value | 11,425 | 16,927 | (33 | )% | 22,785 | (50 | )% | 58,186 | (80 | )% | ||||||||||||||
| Loans receivable | 10,962,974 | 10,816,419 | 1 | % | 10,543,332 | 4 | % | 10,561,197 | 4 | % | ||||||||||||||
| Allowance for loan losses | (83,633 | ) | (80,074 | ) | (4 | )% | (79,343 | ) | (5 | )% | (79,976 | ) | (5 | )% | ||||||||||
| Net loans receivable | 10,879,341 | 10,736,345 | 1 | % | 10,463,989 | 4 | % | 10,481,221 | 4 | % | ||||||||||||||
| Accrued interest receivable | 29,145 | 25,640 | 14 | % | 26,880 | 8 | % | 24,165 | 21 | % | ||||||||||||||
| Premises and equipment, net | 55,838 | 52,565 | 6 | % | 55,316 | 1 | % | 53,966 | 3 | % | ||||||||||||||
| Bank owned life insurance | 74,514 | 74,113 | 1 | % | 73,696 | 1 | % | 73,290 | 2 | % | ||||||||||||||
| Goodwill | 464,450 | 464,450 | — | % | 462,997 | — | % | 464,419 | — | % | ||||||||||||||
| Servicing assets | 25,079 | 25,338 | (1 | )% | 26,457 | (5 | )% | 26,529 | (5 | )% | ||||||||||||||
| Other intangible assets, net | 17,198 | 17,874 | (4 | )% | 19,226 | (11 | )% | 19,968 | (14 | )% | ||||||||||||||
| Other assets | 237,285 | 252,855 | (6 | )% | 229,836 | 3 | % | 237,144 | — | % | ||||||||||||||
| Total assets | 14,150,021 | 13,859,217 | 2 | % | 13,441,422 | 5 | % | 13,510,629 | 5 | % | ||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Deposits | $ | 10,993,320 | $ | 10,955,101 | — | % | $ | 10,642,035 | 3 | % | $ | 10,702,505 | 3 | % | ||||||||||
| Borrowings from FHLB | 1,018,046 | 793,403 | 28 | % | 754,290 | 35 | % | 754,739 | 35 | % | ||||||||||||||
| Subordinated debentures | 100,590 | 100,328 | — | % | 99,808 | 1 | % | 99,548 | 1 | % | ||||||||||||||
| Accrued interest payable | 13,740 | 11,855 | 16 | % | 10,863 | 26 | % | 9,708 | 42 | % | ||||||||||||||
| Other liabilities | 89,894 | 92,236 | (3 | )% | 78,953 | 14 | % | 89,558 | — | % | ||||||||||||||
| Total liabilities | 12,215,590 | 11,952,923 | 2 | % | 11,585,949 | 5 | % | 11,656,058 | 5 | % | ||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||||||||
| Common stock, $0.001 par value; authorized, 150,000,000 shares at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016 | $ | 135 | $ | 135 | — | % | $ | 135 | — | % | $ | 135 | — | % | ||||||||||
| Capital surplus | 1,403,586 | 1,402,303 | — | % | 1,400,490 | — | % | 1,400,915 | — | % | ||||||||||||||
| Retained earnings | 540,921 | 513,945 | 5 | % | 469,505 | 15 | % | 445,104 | 22 | % | ||||||||||||||
| Accumulated other comprehensive income (loss), net | (10,211 | ) | (10,089 | ) | (1 | )% | (14,657 | ) | 30 | % | 8,417 | (221 | )% | |||||||||||
| Total stockholders’ equity | 1,934,431 | 1,906,294 | 1 | % | 1,855,473 | 4 | % | 1,854,571 | 4 | % | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 14,150,021 | $ | 13,859,217 | 2 | % | $ | 13,441,422 | 5 | % | $ | 13,510,629 | 5 | % | ||||||||||
| Hope Bancorp, Inc. | |||||||||||||||||||||||||||||
| Selected Financial Data | |||||||||||||||||||||||||||||
| Unaudited (dollars in thousands, except share and per share data) | |||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| 9/30/2017 | 6/30/2017 | % change | 9/30/2016 | % change | 9/30/2017 | 9/30/2016 | % change | ||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 136,822 | $ | 128,515 | 6 | % | $ | 112,132 | 22 | % | $ | 388,631 | $ | 266,336 | 46 | % | |||||||||||||
| Interest on securities | 9,540 | 8,741 | 9 | % | 6,645 | 44 | % | 26,394 | 18,051 | 46 | % | ||||||||||||||||||
| Interest on federal funds sold and other investments | 1,281 | 1,277 | — | % | 775 | 65 | % | 3,894 | 2,160 | 80 | % | ||||||||||||||||||
| Total interest income | 147,643 | 138,533 | 7 | % | 119,552 | 23 | % | 418,919 | 286,547 | 46 | % | ||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Interest on deposits | 20,376 | 18,114 | 12 | % | 13,017 | 57 | % | 53,001 | 33,276 | 59 | % | ||||||||||||||||||
| Interest on other borrowings | 4,004 | 3,599 | 11 | % | 3,061 | 31 | % | 10,930 | 7,125 | 53 | % | ||||||||||||||||||
| Total interest expense | 24,380 | 21,713 | 12 | % | 16,078 | 52 | % | 63,931 | 40,401 | 58 | % | ||||||||||||||||||
| Net interest income before provision for loan losses | 123,263 | 116,820 | 6 | % | 103,474 | 19 | % | 354,988 | 246,146 | 44 | % | ||||||||||||||||||
| Provision for loan losses | 5,400 | 2,760 | 96 | % | 6,500 | (17 | )% | 13,760 | 8,200 | 68 | % | ||||||||||||||||||
| Net interest income after provision for loan losses | 117,863 | 114,060 | 3 | % | 96,974 | 22 | % | 341,228 | 237,946 | 43 | % | ||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||
| Service fees on deposit accounts | 5,151 | 5,179 | (1 | )% | 4,778 | 8 | % | 15,668 | 10,363 | 51 | % | ||||||||||||||||||
| Net gains on sales of SBA loans | 3,631 | 3,267 | 11 | % | 230 | 1,479 | % | 10,148 | 5,090 | 99 | % | ||||||||||||||||||
| Net gains on sales of other loans | 847 | 352 | 141 | % | 1,476 | (43 | )% | 1,619 | 1,519 | 7 | % | ||||||||||||||||||
| Net gains on sales of securities available for sale | — | — | — | % | 948 | (100 | )% | — | 948 | (100 | )% | ||||||||||||||||||
| Other income and fees | 6,617 | 7,317 | (10 | )% | 6,714 | (1 | )% | 22,529 | 15,707 | 43 | % | ||||||||||||||||||
| Total noninterest income | 16,246 | 16,115 | 1 | % | 14,146 | 15 | % | 49,964 | 33,627 | 49 | % | ||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 35,987 | 34,946 | 3 | % | 30,456 | 18 | % | 105,099 | 73,782 | 42 | % | ||||||||||||||||||
| Occupancy | 7,131 | 7,154 | — | % | 6,889 | 4 | % | 21,479 | 16,626 | 29 | % | ||||||||||||||||||
| Furniture and equipment | 3,642 | 3,556 | 2 | % | 3,297 | 10 | % | 10,611 | 7,921 | 34 | % | ||||||||||||||||||
| Advertising and marketing | 2,217 | 2,394 | (7 | )% | 2,306 | (4 | )% | 8,035 | 4,845 | 66 | % | ||||||||||||||||||
| Data processing and communications | 3,221 | 2,676 | 20 | % | 3,199 | 1 | % | 9,503 | 7,499 | 27 | % | ||||||||||||||||||
| Professional fees | 3,239 | 3,260 | (1 | )% | 1,898 | 71 | % | 10,401 | 4,255 | 144 | % | ||||||||||||||||||
| FDIC assessment | 1,262 | 1,004 | 26 | % | 1,564 | (19 | )% | 3,276 | 3,697 | (11 | )% | ||||||||||||||||||
| Credit related expenses | (2,487 | ) | 113 | N/A | 810 | N/A | (491 | ) | 2,142 | N/A | |||||||||||||||||||
| Other real estate owned (“OREO”) expense, net | 678 | 1,188 | (43 | )% | (423 | ) | N/A | 2,863 | 1,138 | 152 | % | ||||||||||||||||||
| Merger-related expenses | 260 | 562 | (54 | )% | 11,222 | (98 | )% | 1,769 | 13,962 | (87 | )% | ||||||||||||||||||
| Other | 6,687 | 7,184 | (7 | )% | 6,628 | 1 | % | 21,028 | 12,377 | 70 | % | ||||||||||||||||||
| Total noninterest expense | 61,837 | 64,037 | (3 | )% | 67,846 | (9 | )% | 193,573 | 148,244 | 31 | % | ||||||||||||||||||
| Income before income taxes | 72,272 | 66,138 | 9 | % | 43,274 | 67 | % | 197,619 | 123,329 | 60 | % | ||||||||||||||||||
| Income tax provision | 27,708 | 25,451 | 9 | % | 17,169 | 61 | % | 76,158 | 50,212 | 52 | % | ||||||||||||||||||
| Net income | $ | 44,564 | $ | 40,687 | 10 | % | $ | 26,105 | 71 | % | $ | 121,461 | $ | 73,117 | 66 | % | |||||||||||||
| Earnings Per Common Share: | |||||||||||||||||||||||||||||
| Basic | $ | 0.33 | $ | 0.30 | $ | 0.22 | $ | 0.90 | $ | 0.80 | |||||||||||||||||||
| Diluted | $ | 0.33 | $ | 0.30 | $ | 0.22 | $ | 0.90 | $ | 0.79 | |||||||||||||||||||
| Average Shares Outstanding: | |||||||||||||||||||||||||||||
| Basic | 135,382,457 | 135,257,044 | 116,622,920 | 135,296,332 | 91,940,070 | ||||||||||||||||||||||||
| Diluted | 135,630,912 | 135,613,181 | 116,951,074 | 135,661,965 | 92,266,245 | ||||||||||||||||||||||||
| Hope Bancorp, Inc. | ||||||||||||||
| Selected Financial Data | ||||||||||||||
| Unaudited | ||||||||||||||
|
For the Three Months Ended (Annualized) |
For the Nine Months Ended (Annualized) |
|||||||||||||
| Profitability measures: | 9/30/2017 | 6/30/2017 | 9/30/2016 | 9/30/2017 | 9/30/2016 | |||||||||
| ROA | 1.30 | % | 1.21 | % | 0.89 | % | 1.20 | % | 1.05 | % | ||||
| ROE | 9.26 | % | 8.60 | % | 6.59 | % | 8.54 | % | 8.35 | % | ||||
| Return on average tangible equity 1 | 12.36 | % | 11.54 | % | 8.59 | % | 11.46 | % | 10.03 | % | ||||
| Net interest margin | 3.83 | % | 3.75 | % | 3.77 | % | 3.78 | % | 3.76 | % | ||||
| Efficiency ratio | 44.32 | % | 48.17 | % | 57.68 | % | 47.80 | % | 52.99 | % | ||||
| 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. | ||||||||||||||
| Hope Bancorp, Inc. | ||||||||||||||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||||||||||||
| Unaudited (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| 9/30/2017 | 6/30/2017 | 9/30/2016 | ||||||||||||||||||||||||||||||
| Interest | Annualized | Interest | Annualized | Interest | Annualized | |||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||
| Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||||||||||
| INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||||||||
| Loans receivable, including loans held for sale | $ | 10,712,856 | $ | 136,822 | 5.07 | % | $ | 10,536,428 | $ | 128,515 | 4.89 | % | $ | 9,292,814 | $ | 112,132 | 4.80 | % | ||||||||||||||
| Securities available for sale | 1,743,610 | 9,540 | 2.17 | % | 1,609,310 | 8,741 | 2.18 | % | 1,406,919 | 6,645 | 1.89 | % | ||||||||||||||||||||
| FRB and FHLB stock and other investments | 299,305 | 1,281 | 1.70 | % | 364,906 | 1,277 | 1.40 | % | 237,981 | 775 | 1.30 | % | ||||||||||||||||||||
| Total interest earning assets | $ | 12,755,771 | $ | 147,643 | 4.59 | % | $ | 12,510,644 | $ | 138,533 | 4.44 | % | $ | 10,937,714 | $ | 119,552 | 4.35 | % | ||||||||||||||
| INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||
| Demand, interest bearing | $ | 3,526,846 | $ | 8,127 | 0.91 | % | $ | 3,457,412 | $ | 7,974 | 0.93 | % | $ | 2,924,340 | $ | 5,932 | 0.81 | % | ||||||||||||||
| Savings | 258,383 | 348 | 0.53 | % | 280,188 | 279 | 0.40 | % | 268,424 | 311 | 0.46 | % | ||||||||||||||||||||
| Time deposits | 4,053,577 | 11,901 | 1.16 | % | 4,012,838 | 9,861 | 0.99 | % | 3,600,400 | 6,774 | 0.75 | % | ||||||||||||||||||||
| Total interest bearing deposits | 7,838,806 | 20,376 | 1.03 | % | 7,750,438 | 18,114 | 0.94 | % | 6,793,164 | 13,017 | 0.76 | % | ||||||||||||||||||||
| FHLB advances | 764,691 | 2,698 | 1.40 | % | 713,858 | 2,338 | 1.31 | % | 698,081 | 2,161 | 1.23 | % | ||||||||||||||||||||
| Other borrowings | 96,524 | 1,306 | 5.29 | % | 96,218 | 1,261 | 5.18 | % | 78,828 | 900 | 4.47 | % | ||||||||||||||||||||
| Total interest bearing liabilities | 8,700,021 | $ | 24,380 | 1.11 | % | 8,560,514 | $ | 21,713 | 1.02 | % | 7,570,073 | $ | 16,078 | 0.84 | % | |||||||||||||||||
| Noninterest bearing demand deposits | 2,993,441 | 2,929,656 | 2,535,015 | |||||||||||||||||||||||||||||
| Total funding liabilities/cost of funds | $ | 11,693,462 | 0.83 | % | $ | 11,490,170 | 0.76 | % | $ | 10,105,088 | 0.63 | % | ||||||||||||||||||||
| Net interest income/net interest spread | $ | 123,263 | 3.48 | % | $ | 116,820 | 3.42 | % | $ | 103,474 | 3.51 | % | ||||||||||||||||||||
| Net interest margin | 3.83 | % | 3.75 | % | 3.77 | % | ||||||||||||||||||||||||||
| Cost of deposits: | ||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 2,993,441 | $ | 2,929,656 | $ | 2,535,015 | ||||||||||||||||||||||||||
| Interest bearing deposits | 7,838,806 | 20,376 | 1.03 | % | 7,750,438 | 18,114 | 0.94 | % | 6,793,164 | 13,017 | 0.76 | % | ||||||||||||||||||||
| Total deposits | $ | 10,832,247 | $ | 20,376 | 0.75 | % | $ | 10,680,094 | $ | 18,114 | 0.68 | % | $ | 9,328,179 | $ | 13,017 | 0.56 | % | ||||||||||||||
| Hope Bancorp, Inc. | |||||||||||||||||||||
| Selected Financial Data | |||||||||||||||||||||
| Unaudited (dollars in thousands) | |||||||||||||||||||||
| Nine Months Ended | Nine Months Ended | ||||||||||||||||||||
| 9/30/2017 | 9/30/2016 | ||||||||||||||||||||
| Interest | Annualized | Interest | Annualized | ||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||
| Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||
| INTEREST EARNING ASSETS: | |||||||||||||||||||||
| Loans receivable, including loans held for sale | $ | 10,544,898 | $ | 388,631 | 4.93 | % | $ | 7,347,740 | $ | 266,336 | 4.84 | % | |||||||||
| Securities available for sale | 1,640,784 | 26,394 | 2.15 | % | 1,171,816 | 18,051 | 2.06 | % | |||||||||||||
| FRB and FHLB stock and other investments | 362,265 | 3,894 | 1.44 | % | 230,993 | 2,160 | 1.25 | % | |||||||||||||
| Total interest earning assets | $ | 12,547,947 | $ | 418,919 | 4.46 | % | $ | 8,750,549 | $ | 286,547 | 4.37 | % | |||||||||
| INTEREST BEARING LIABILITIES: | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Demand, interest bearing | $ | 3,474,077 | $ | 23,291 | 0.90 | % | $ | 2,310,000 | $ | 14,083 | 0.81 | % | |||||||||
| Savings | 277,264 | 914 | 0.44 | % | 211,255 | 962 | 0.61 | % | |||||||||||||
| Time deposits | 4,025,360 | 28,796 | 0.96 | % | 2,916,868 | 18,231 | 0.83 | % | |||||||||||||
| Total interest bearing deposits | 7,776,701 | 53,001 | 0.91 | % | 5,438,123 | 33,276 | 0.82 | % | |||||||||||||
| FHLB advances | 714,048 | $ | 7,176 | 1.34 | % | 598,672 | 5,370 | 1.20 | % | ||||||||||||
| Other borrowings | 96,220 | 3,754 | 5.14 | % | 53,593 | 1,755 | 4.30 | % | |||||||||||||
| Total interest bearing liabilities | 8,586,969 | $ | 63,931 | 1.00 | % | 6,090,388 | $ | 40,401 | 0.89 | % | |||||||||||
| Noninterest bearing demand deposits | 2,930,937 | 1,947,673 | |||||||||||||||||||
| Total funding liabilities/cost of funds | $ | 11,517,906 | 0.74 | % | $ | 8,038,061 | 0.67 | % | |||||||||||||
| Net interest income/net interest spread | $ | 354,988 | 3.46 | % | $ | 246,146 | 3.48 | % | |||||||||||||
| Net interest margin | 3.78 | % | 3.76 | % | |||||||||||||||||
| Cost of deposits: | |||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 2,930,937 | $ | 1,947,673 | |||||||||||||||||
| Interest bearing deposits | 7,776,701 | 53,001 | 0.91 | % | 5,438,123 | 33,276 | 0.82 | % | |||||||||||||
| Total deposits | $ | 10,707,638 | $ | 53,001 | 0.66 | % | $ | 7,385,796 | $ | 33,276 | 0.60 | % | |||||||||
| Hope Bancorp, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCES: | 9/30/2017 | 6/30/2017 | % change | 9/30/2016 | % change | 9/30/2017 | 9/30/2016 | % change | ||||||||||||||||||||||||||||||||||||||||||||
| Loans receivable, including loans held for sale | $ | 10,712,856 | $ | 10,536,428 | 2 | % | $ | 9,292,814 | 15 | % | $ | 10,544,898 | $ | 7,347,740 | 44 | % | ||||||||||||||||||||||||||||||||||||
| Investments | 2,042,915 | 1,974,216 | 3 | % | 1,644,900 | 24 | % | 2,003,049 | 1,402,809 | 43 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest earning assets | 12,755,771 | 12,510,644 | 2 | % | 10,937,714 | 17 | % | 12,547,947 | 8,750,549 | 43 | % | |||||||||||||||||||||||||||||||||||||||||
| Total assets | 13,737,532 | 13,470,745 | 2 | % | 11,777,564 | 17 | % | 13,516,139 | 9,279,438 | 46 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 7,838,806 | 7,750,438 | 1 | % | 6,793,164 | 15 | % | 7,776,701 | 5,438,123 | 43 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | 8,700,021 | 8,560,514 | 2 | % | 7,570,073 | 15 | % | 8,586,969 | 6,090,388 | 41 | % | |||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 2,993,441 | 2,929,656 | 2 | % | 2,535,015 | 18 | % | 2,930,937 | 1,947,673 | 50 | % | |||||||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 1,924,444 | 1,892,126 | 2 | % | 1,585,100 | 21 | % | 1,895,393 | 1,167,747 | 62 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest earning assets | 4,055,750 | 3,950,130 | 3 | % | 3,367,641 | 20 | % | 3,960,978 | 2,660,161 | 49 | % | |||||||||||||||||||||||||||||||||||||||||
| LOAN PORTFOLIO COMPOSITION: | 9/30/2017 | 6/30/2017 | % change | 12/31/2016 | % change | 9/30/2016 | % change | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | $ | 2,005,290 | $ | 1,925,503 | 4 | % | $ | 1,986,949 | (3 | )% | $ | 2,011,913 | — | % | ||||||||||||||||||||||||||||||||||||||
| Real estate loans | 8,438,064 | 8,432,395 | — | % | 8,154,570 | 3 | % | 8,158,871 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||
| Consumer and other loans | 521,459 | 460,446 | 13 | % | 403,470 | 14 | % | 392,608 | 33 | % | ||||||||||||||||||||||||||||||||||||||||||
| Loans outstanding | 10,964,813 | 10,818,344 | 1 | % | 10,544,989 | 3 | % | 10,563,392 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Unamortized deferred loan fees - net of costs | (1,839 | ) | (1,925 | ) | 4 | % | (1,657 | ) | (11 | )% | (2,195 | ) | 16 | % | ||||||||||||||||||||||||||||||||||||||
| Loans, net of deferred loan fees and costs | 10,962,974 | 10,816,419 | 1 | % | 10,543,332 | 3 | % | 10,561,197 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Allowance for loan losses | (83,633 | ) | (80,074 | ) | (4 | )% | (79,343 | ) | (5 | )% | (79,976 | ) | (5 | )% | ||||||||||||||||||||||||||||||||||||||
| Loan receivable, net | $ | 10,879,341 | $ | 10,736,345 | 1 | % | $ | 10,463,989 | 3 | % | $ | 10,481,221 | 4 | % | ||||||||||||||||||||||||||||||||||||||
| REAL ESTATE LOANS BY PROPERTY TYPE: | 9/30/2017 | 6/30/2017 | % change | 12/31/2016 | % change | 9/30/2016 | % change | |||||||||||||||||||||||||||||||||||||||||||||
| Retail buildings | $ | 2,314,867 | $ | 2,260,091 | 2 | % | $ | 2,163,075 | 4 | % | $ | 2,136,128 | 8 | % | ||||||||||||||||||||||||||||||||||||||
| Hotels/motels | 1,595,787 | 1,606,334 | (1 | )% | 1,605,787 | — | % | 1,599,985 | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Gas stations/car washes | 979,378 | 973,266 | 1 | % | 946,364 | 3 | % | 962,643 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Mixed-use facilities | 614,255 | 605,379 | 1 | % | 563,484 | 7 | % | 546,177 | 12 | % | ||||||||||||||||||||||||||||||||||||||||||
| Warehouses | 913,217 | 929,034 | (2 | )% | 892,100 | 4 | % | 912,818 | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Multifamily | 435,088 | 433,414 | — | % | 423,084 | 2 | % | 426,257 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other | 1,585,472 | 1,624,877 | (2 | )% | 1,560,676 | 4 | % | 1,574,863 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 8,438,064 | $ | 8,432,395 | — | % | $ | 8,154,570 | 3 | % | $ | 8,158,871 | 3 | % | ||||||||||||||||||||||||||||||||||||||
| DEPOSIT COMPOSITION | 9/30/2017 | 6/30/2017 | % change | 12/31/2016 | % change | 9/30/2016 | % change | |||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 3,049,998 | $ | 3,016,538 | 1 | % | $ | 2,900,241 | 5 | % | $ | 2,903,658 | 5 | % | ||||||||||||||||||||||||||||||||||||||
| Money market and other | 3,685,973 | 3,563,404 | 3 | % | 3,401,446 | 8 | % | 3,318,728 | 11 | % | ||||||||||||||||||||||||||||||||||||||||||
| Saving deposits | 243,042 | 275,272 | (12 | )% | 301,906 | (19 | )% | 304,719 | (20 | )% | ||||||||||||||||||||||||||||||||||||||||||
| Time deposits of $250,000 or more | 1,252,747 | 1,127,941 | 11 | % | 1,077,024 | 16 | % | 1,075,020 | 17 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other time deposits | 2,761,560 | 2,971,946 | (7 | )% | 2,961,418 | (7 | )% | 3,100,380 | (11 | )% | ||||||||||||||||||||||||||||||||||||||||||
| Total deposit balances | $ | 10,993,320 | $ | 10,955,101 | — | % | $ | 10,642,035 | 3 | % | $ | 10,702,505 | 3 | % | ||||||||||||||||||||||||||||||||||||||
| DEPOSIT COMPOSITION (%) | 9/30/2017 | 6/30/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 27.7 | % | 27.5 | % | 27.3 | % | 27.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Money market and other | 33.5 | % | 32.5 | % | 32.0 | % | 31.0 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Saving deposits | 2.2 | % | 2.5 | % | 2.8 | % | 2.9 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Time deposits of $250,000 or more | 11.4 | % | 10.3 | % | 10.1 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Other time deposits | 25.2 | % | 27.2 | % | 27.8 | % | 29.0 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Hope Bancorp, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited (dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAPITAL RATIOS: | 9/30/2017 | 6/30/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 1,934,431 | $ | 1,906,294 | $ | 1,855,473 | $ | 1,854,571 | ||||||||||||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 ratio | 12.29 | % | 12.18 | % | 12.10 | % | 11.96 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 13.10 | % | 13.00 | % | 12.92 | % | 12.79 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total risk-based capital ratio | 13.81 | % | 13.70 | % | 13.64 | % | 13.51 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 11.78 | % | 11.80 | % | 11.49 | % | 13.02 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total risk weighted assets | $ | 11,935,561 | $ | 11,814,607 | 11,575,944 | 11,491,204 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Book value per common share | $ | 14.28 | $ | 14.09 | $ | 13.72 | $ | 13.73 | ||||||||||||||||||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets 2 | 10.63 | % | 10.64 | % | 10.60 | % | 10.52 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Tangible common equity per share 2 | $ | 10.72 | $ | 10.52 | $ | 10.15 | $ | 10.14 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2 Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of GAAP financial measures to non-GAAP financial measures: | ||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||
| 9/30/2017 | 6/30/2017 | 9/30/2016 | ||||||||||||||||||||||||||||||||
| TANGIBLE COMMON EQUITY | ||||||||||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 1,934,431 | $ | 1,906,294 | $ | 1,854,571 | ||||||||||||||||||||||||||||
| Less: Goodwill and core deposit intangible assets, net | (481,648 | ) | (482,324 | ) | (484,387 | ) | ||||||||||||||||||||||||||||
| Tangible common equity | $ | 1,452,783 | $ | 1,423,970 | $ | 1,370,184 | ||||||||||||||||||||||||||||
| Total assets | $ | 14,150,021 | $ | 13,859,217 | $ | 13,510,629 | ||||||||||||||||||||||||||||
| Less: Goodwill and core deposit intangible assets, net | (481,648 | ) | (482,324 | ) | (484,387 | ) | ||||||||||||||||||||||||||||
| Tangible assets | $ | 13,668,373 | $ | 13,376,893 | $ | 13,026,242 | ||||||||||||||||||||||||||||
| Common shares outstanding | 135,467,176 | 135,297,678 | 135,109,641 | |||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets | 10.63 | % | 10.64 | % | 10.52 | % | ||||||||||||||||||||||||||||
| Tangible common equity per share | 10.72 | $ | 10.52 | $ | 10.14 | |||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES: | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 9/30/2017 | 9/30/2016 | ||||||||||||||||||||
| Balance at beginning of period | $ | 80,074 | $ | 78,659 | $ | 79,343 | $ | 79,976 | $ | 76,425 | $ | 79,343 | $ | 76,408 | |||||||||||||
| Provision for loan losses | 5,400 | 2,760 | 5,600 | 800 | 6,500 | 13,760 | 8,200 | ||||||||||||||||||||
| Recoveries | 3,072 | 777 | 321 | 452 | 1,009 | 4,170 | 2,443 | ||||||||||||||||||||
| Charge offs | (4,913 | ) | (2,122 | ) | (6,605 | ) | (1,885 | ) | (3,958 | ) | (13,640 | ) | (7,075 | ) | |||||||||||||
| Balance at end of period | $ | 83,633 | $ | 80,074 | $ | 78,659 | $ | 79,343 | $ | 79,976 | $ | 83,633 | $ | 79,976 | |||||||||||||
| Net charge offs/average loans receivable (annualized) | 0.07 | % | 0.05 | % | 0.24 | % | 0.05 | % | 0.13 | % | 0.07 | % | 0.13 | % | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| NET CHARGED OFF (RECOVERED) LOANS BY TYPE: | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 9/30/2017 | 9/30/2016 | ||||||||||||||||||||
| Real estate loans | $ | 314 | $ | 830 | $ | 1,444 | $ | (45 | ) | $ | 127 | $ | 2,588 | $ | (245 | ) | |||||||||||
| Commercial loans | 1,293 | 276 | 4,564 | 1,000 | 2,663 | 6,133 | 4,691 | ||||||||||||||||||||
| Consumer loans | 234 | 239 | 276 | 478 | 159 | 749 | 186 | ||||||||||||||||||||
| Total net charge offs | $ | 1,841 | $ | 1,345 | $ | 6,284 | $ | 1,433 | $ | 2,949 | $ | 9,470 | $ | 4,632 | |||||||||||||
| Hope Bancorp, Inc. | |||||||||||||||||||
| Selected Financial Data | |||||||||||||||||||
| Unaudited (dollars in thousands) | |||||||||||||||||||
| NONPERFORMING ASSETS | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Delinquent loans on nonaccrual status 3 | $ | 43,323 | $ | 47,361 | $ | 37,009 | $ | 40,074 | $ | 40,602 | |||||||||
| Delinquent loans 90 days or more on accrual status 4 | 407 | 1,850 | 275 | 305 | 192 | ||||||||||||||
| Accruing troubled debt restructured loans | 64,807 | 53,290 | 48,984 | 48,874 | 48,701 | ||||||||||||||
| Total nonperforming loans | 108,537 | 102,501 | 86,268 | 89,253 | 89,495 | ||||||||||||||
| Other real estate owned | 17,208 | 21,839 | 19,096 | 21,990 | 27,457 | ||||||||||||||
| Total nonperforming assets | $ | 125,745 | $ | 124,340 | $ | 105,364 | $ | 111,243 | $ | 116,952 | |||||||||
| Nonperforming assets/total assets | 0.89 | % | 0.90 | % | 0.78 | % | 0.83 | % | 0.87 | % | |||||||||
| Nonperforming assets/loans receivable & OREO | 1.15 | % | 1.15 | % | 1.00 | % | 1.05 | % | 1.10 | % | |||||||||
| Nonperforming assets/total capital | 6.50 | % | 6.52 | % | 5.61 | % | 6.00 | % | 6.31 | % | |||||||||
| Nonperforming loans/loans receivable | 0.99 | % | 0.95 | % | 0.82 | % | 0.85 | % | 0.85 | % | |||||||||
| Nonaccrual loans/loans receivable | 0.40 | % | 0.44 | % | 0.35 | % | 0.38 | % | 0.38 | % | |||||||||
| Allowance for loan losses/loans receivable | 0.76 | % | 0.74 | % | 0.75 | % | 0.75 | % | 0.76 | % | |||||||||
| Allowance for loan losses/nonaccrual loans | 193.05 | % | 169.07 | % | 212.54 | % | 197.99 | % | 196.98 | % | |||||||||
| Allowance for loan losses/nonperforming loans | 77.05 | % | 78.12 | % | 91.18 | % | 88.90 | % | 89.36 | % | |||||||||
| Allowance for loan losses/nonperforming assets | 66.51 | % | 64.40 | % | 74.65 | % | 71.32 | % | 68.38 | % | |||||||||
| 3 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $21.5 million, $15.5 million, $15.2 million, $15.9 million, and $14.1 million, at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively. | |||||||||||||||||||
| 4 Excludes Acquired Credit Impaired Loans that are delinquent 90 or more days totaling $20.4 million, $16.3 million, $17.3 million, $19.6 million, and $16.4 million, at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively. | |||||||||||||||||||
| BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS BY TYPE: | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Retail buildings | $ | 6,807 | $ | 6,396 | $ | 5,794 | $ | 5,832 | $ | 5,876 | |||||||||
| Hotels/motels | 1,279 | 1,287 | 1,300 | 1,305 | 1,315 | ||||||||||||||
| Gas stations/car washes | — | — | — | — | 829 | ||||||||||||||
| Mixed-use facilities | 131 | 133 | 134 | 889 | 895 | ||||||||||||||
| Warehouses | 5,185 | 5,253 | 5,321 | 5,379 | 5,449 | ||||||||||||||
| Other 5 | 51,405 | 40,221 | 36,435 | 35,469 | 34,337 | ||||||||||||||
| Total | $ | 64,807 | $ | 53,290 | $ | 48,984 | $ | 48,874 | $ | 48,701 | |||||||||
| 5 Includes commercial business and other loans | |||||||||||||||||||
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Legacy | |||||||||||||||||||
| 30 - 59 days | $ | 8,857 | $ | 5,910 | $ | 10,198 | $ | 6,253 | $ | 3,580 | |||||||||
| 60 - 89 days | 3,572 | 11,740 | 3,978 | 6,720 | 1,100 | ||||||||||||||
| Total | $ | 12,429 | $ | 17,650 | $ | 14,176 | $ | 12,973 | $ | 4,680 | |||||||||
| Acquired | |||||||||||||||||||
| 30 - 59 days | $ | 1,429 | $ | 6,373 | $ | 5,249 | $ | 4,015 | $ | 3,450 | |||||||||
| 60 - 89 days | 1,687 | 996 | 1,007 | 1,049 | 1,169 | ||||||||||||||
| Total | $ | 3,116 | $ | 7,369 | $ | 6,256 | $ | 5,064 | $ | 4,619 | |||||||||
| Total delinquent loans 30-89 days past due | $ | 15,545 | $ | 25,019 | $ | 20,432 | $ | 18,037 | $ | 9,299 | |||||||||
| Hope Bancorp, Inc. | |||||||||||||||||||
| Selected Financial Data | |||||||||||||||||||
| Unaudited (dollars in thousands) | |||||||||||||||||||
| DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Legacy | |||||||||||||||||||
| Real estate loans | $ | 7,850 | $ | 14,126 | $ | 12,575 | $ | 10,896 | $ | 2,678 | |||||||||
| Commercial loans | 3,771 | 3,333 | 1,404 | 2,010 | 1,866 | ||||||||||||||
| Consumer loans | 808 | 191 | 198 | 67 | 136 | ||||||||||||||
| Total delinquent loans 30-89 days past due - legacy | $ | 12,429 | $ | 17,650 | $ | 14,177 | $ | 12,973 | $ | 4,680 | |||||||||
| Acquired | |||||||||||||||||||
| Real estate loans | $ | 2,323 | $ | 5,786 | $ | 5,211 | $ | 2,721 | $ | 3,761 | |||||||||
| Commercial loans | 793 | 1,519 | 360 | 1,987 | 858 | ||||||||||||||
| Consumer loans | — | 64 | 684 | 356 | — | ||||||||||||||
| Total delinquent loans 30-89 days past due - acquired | $ | 3,116 | $ | 7,369 | $ | 6,255 | $ | 5,064 | $ | 4,619 | |||||||||
| Total delinquent loans 30-89 days past due | $ | 15,545 | $ | 25,019 | $ | 20,432 | $ | 18,037 | $ | 9,299 | |||||||||
| NONACCRUAL LOANS BY TYPE | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Real estate loans | $ | 31,453 | $ | 33,503 | $ | 26,550 | $ | 27,522 | $ | 24,055 | |||||||||
| Commercial loans | 10,682 | 12,874 | 10,117 | 11,773 | 15,742 | ||||||||||||||
| Consumer loans | 1,188 | 984 | 342 | 779 | 805 | ||||||||||||||
| Total nonaccrual loans | $ | 43,323 | $ | 47,361 | $ | 37,009 | $ | 40,074 | $ | 40,602 | |||||||||
| CRITICIZED LOANS | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||||||||
| Legacy | |||||||||||||||||||
| Special mention | $ | 131,785 | $ | 152,373 | $ | 127,431 | $ | 127,562 | $ | 168,289 | |||||||||
| Substandard | 197,993 | 177,097 | 167,748 | 162,942 | 124,938 | ||||||||||||||
| Doubtful | 216 | 2,208 | 233 | 95 | 441 | ||||||||||||||
| Loss | — | — | — | — | — | ||||||||||||||
| Total criticized loans - legacy | $ | 329,994 | $ | 331,678 | $ | 295,412 | $ | 290,599 | $ | 293,668 | |||||||||
| Acquired | |||||||||||||||||||
| Special mention | $ | 93,443 | $ | 98,684 | $ | 98,536 | $ | 116,094 | $ | 140,604 | |||||||||
| Substandard | 148,615 | 134,474 | 139,964 | 148,164 | 131,398 | ||||||||||||||
| Doubtful | 1,285 | 1,660 | 2,051 | 1,854 | 2,624 | ||||||||||||||
| Loss | — | — | — | — | (133 | ) | |||||||||||||
| Total criticized loans - acquired | $ | 243,343 | $ | 234,818 | $ | 240,551 | $ | 266,112 | $ | 274,493 | |||||||||
| Total criticized loans | $ | 573,337 | $ | 566,496 | $ | 535,963 | $ | 556,711 | $ | 568,161 | |||||||||
Contact: Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 angie.yang@bankofhope.com
