Hope Bancorp Reports 2024 Fourth Quarter and Full-Year Financial Results

Share Name	Share Symbol	Market	Type
Hope Bancorp Inc	NASDAQ:HOPE	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	11.82	11.25	11.95				6	12:00:13

Hope Bancorp (NASDAQ:HOPE)
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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 twelve months ended December 31, 2024. For the three months ended December 31, 2024, net income totaled $24.3 million, or $0.20 per diluted common share. This compares with net income of $24.2 million, or $0.20 per diluted common share, in the third quarter of 2024. For the full year ended December 31, 2024, net income totaled $99.6 million, or $0.82 per diluted common share. Excluding notable items(1), net income for the 2024 full year was $103.4 million, or $0.85 per diluted common share.

“For the 2024 fourth quarter, our pre-provision net revenue(2) increased 14% to $40.4 million, up from $35.4 million in the preceding third quarter. Quarter-over-quarter, our total revenue grew, led by strong growth in noninterest income, and our noninterest expense decreased, enhancing our efficiency,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Our asset quality improved with an 11% decrease in criticized loans and nonperforming assets down 13% since September 30, 2024.

“In 2024, we focused on strengthening our deposit base, reducing brokered deposits to 7% of total deposits as of December 31, 2024, down from 10% as of December 31, 2023. In the second half of 2024, loan growth inflected and loans receivable grew 1% on an annualized basis since June 30, 2024. With ample liquidity and a tangible common equity ratio(3) over 10% as of December 31, 2024, we are well positioned to support growth in the new year.

“We are in the final stages of preparing for the integration of Territorial Savings Bank as a division of Bank of Hope, and are looking forward to building upon Territorial’s legacy. The addition of Territorial’s low-cost core deposits and residential mortgage loans with pristine asset quality will be meaningful contributors to the combined company in 2025. We anticipate the pending merger with Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company of Territorial Savings Bank, will be completed during the first quarter of 2025, subject to regulatory approvals.

“We are heartbroken to see the unprecedented destruction that the wildfires have caused in the Greater Los Angeles area. As one of the largest independent banks headquartered in this great city, we are committed to taking a leadership role in addressing the immediate and rebuilding needs of those impacted by the fires. Our recent cash donation to the United Way of Greater Los Angeles Wildfire Response Fund underscores our unwavering commitment to the community. I am confident that the impacted areas will be rebuilt stronger and better,” concluded Kim.

_____________________________________

(1)

Net income, excluding merger-related expenses, restructuring-related costs and gains, which included net gains on the sale of branches in Virginia, and the FDIC special assessment expense (also referred to collectively as the “notable items”), is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

(2)

Pre-provision net revenue (“PPNR”) is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

(3)

Tangible common equity ratio is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

Operating Results for the 2024 Fourth Quarter

Revenue. 2024 fourth quarter revenue of $118.0 million grew $1.4 million, or 1%, from $116.6 million for the immediately preceding third quarter. Quarter-over-quarter growth in noninterest income more than offset the decrease in net interest income before provision for credit losses. Pre-provision net revenue (“PPNR”), which is revenue less noninterest expense, was $40.4 million in the 2024 fourth quarter, up $5.0 million, or 14%, from $35.4 million for the third quarter of 2024. Excluding notable items(4), fourth quarter 2024 PPNR of $40.0 million grew 9% quarter-over-quarter.

Net interest income and net interest margin. Net interest income before provision for credit losses for the 2024 fourth quarter totaled $102.1 million, a decrease of $2.7 million, or 3%, from $104.8 million in the immediately preceding third quarter. 2024 fourth quarter interest income of $226.6 million decreased 4% from $235.1 million in the immediately preceding third quarter. The quarter-over-quarter decrease in interest income reflected lower loan yields because of Federal Funds target rate cuts, $1.7 million of reversed interest income due to loans moving to nonaccrual status, as well as lower yields on and a lower volume of average interest earning cash and deposits at other banks. As of December 31, 2024, the upper Federal Funds target rate was 4.50%, down from a peak of 5.50% as of September 17, 2024.

The decrease in interest income was partially offset by lower interest expense, which totaled $124.5 million in the 2024 fourth quarter, a decrease of 4% from $130.3 million in the immediately preceding third quarter. The decrease in interest expense was primarily driven by a 21 basis point quarter-over-quarter reduction in the average cost of interest bearing deposits to 4.38%, down from 4.59% in the third quarter of 2024, reflecting the impact of the Federal Funds rate cuts. The average cost of total deposits for the 2024 fourth quarter decreased 12 basis points to 3.32%, down from 3.44% for the third quarter of 2024.

Net interest margin for the 2024 fourth quarter was 2.50%, down five basis points from 2.55% in the 2024 third quarter. Excluding the impact of the aforementioned reversed interest income, the net interest margin for the 2024 fourth quarter would have been 2.54%.

Noninterest income. Noninterest income for the 2024 fourth quarter increased to $15.9 million, up $4.0 million, or 34%, from $11.8 million in the immediately preceding third quarter. The Company recorded net gains on the sale of SBA loans of $3.1 million in the 2024 fourth quarter, compared with $2.7 million in the immediately preceding third quarter. In the fourth quarter of 2024, the Company sold $48.4 million of SBA loans, compared with $41.4 million in the third quarter of 2024. Other noninterest income in the 2024 fourth quarter included swap fee income of $1.4 million, up from only $21,000 in the 2024 third quarter, reflecting a higher level of customer activity. During the 2024 fourth quarter, the Company recognized a net gain of $1.0 million related to the sale of its two branches in Virginia, which closed on October 1, 2024.

Noninterest expense. The Company continues to closely manage expenses. Noninterest expense for the 2024 fourth quarter was $77.6 million, down $3.7 million, or 5%, from $81.3 million in the immediately preceding third quarter. Excluding notable items(5), noninterest expense for the 2024 fourth quarter was $77.0 million, down 4% from $79.8 million for the 2024 third quarter. The quarter-over-quarter decrease in noninterest expense was primarily driven by lower earned interest credit expense, which decreased $2.3 million, or 33%, from the immediately preceding third quarter due to the Federal Funds target rate cuts and a lower average balance of related deposits, as well as lower salaries and employee benefits expense, which decreased $2.1 million, or 5%, quarter-over-quarter to $42.0 million.

Tax rate. The effective tax rate for the 2024 fourth quarter was 20.0%, compared with 24.7% in the immediately preceding third quarter. The quarter-over-quarter change in the effective tax rate reflected the impact of a solar tax credit investment that the Company made during the fourth quarter of 2024. For the twelve months ended December 31, 2024, the effective tax rate was 25.1%, compared with 24.9% for the 2023 full year.

_____________________________________

(4)

PPNR, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 to 12. Collectively, notable items comprise merger-related expenses, restructuring-related costs and gains, which also includes a net gain on the sale of branches in Virginia, and the FDIC special assessment expense.

(5)

Noninterest expense, excluding notable items, is a non-GAAP financial measure. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 to 12.

Balance Sheet Summary

Cash and investment securities. At December 31, 2024, cash and due from banks totaled $458.2 million, compared with $680.9 million at September 30, 2024, and $1.93 billion at December 31, 2023. The year-over-year change primarily reflected the payoff of the Company’s Bank Term Funding Program (“BTFP”) borrowings in March and April of 2024. Investment securities totaled $2.08 billion at December 31, 2024, $2.18 billion at September 30, 2024, and $2.41 billion at December 31, 2023.

Loans. At December 31, 2024, loans receivable, which excludes loans held for sale, were stable quarter-over-quarter at $13.62 billion. Compared with September 30, 2024, commercial and industrial loans increased 2% quarter-over-quarter and residential mortgage loans increased 3%, partially offset by a 1% decrease in commercial real estate loans. 2024 fourth quarter average gross loans increased 0.4% quarter-over-quarter, or 2% on an annualized basis, from the 2024 third quarter.

The following table sets forth the loan portfolio composition at December 31, 2024, September 30, 2024, and December 31, 2023:

(dollars in thousands) (unaudited)

12/31/2024

9/30/2024

12/31/2023

Balance

Percentage

Balance

Percentage

Balance

Percentage

Commercial real estate (“CRE”) loans

8,527,008

62.6

8,630,757

63.3

8,797,884

63.6

Commercial and industrial (“C&I”) loans

3,967,596

29.1

3,901,368

28.6

4,135,044

29.8

Residential mortgage and other loans

1,123,668

8.2

1,085,863

7.9

920,691

6.6

Loans receivable

13,618,272

99.9

13,617,988

99.8

13,853,619

100.0

Loans held for sale

14,491

0.1

25,714

0.2

3,408

—

Gross loans

13,632,763

100.0

13,643,702

100.0

13,857,027

100.0

Deposits. Total deposits of $14.33 billion at December 31, 2024, decreased $402.0 million, or 3%, from $14.73 billion at September 30, 2024. This decrease included $128.1 million of deposits sold in connection with the Company’s sale of its Virginia branches. In addition, the quarter-over-quarter decrease in deposits reflected typical fourth quarter outflows of noninterest bearing commercial deposits in the residential mortgage industry, and intentional run-off of higher-cost deposits.

The following table sets forth the deposit composition at December 31, 2024, September 30, 2024, and December 31, 2023:

(dollars in thousands) (unaudited)

12/31/2024

9/30/2024

12/31/2023

Balance

Percentage

Balance

Percentage

Balance

Percentage

Noninterest bearing demand deposits

3,377,950

23.6

3,722,985

25.3

3,914,967

26.5

Money market, interest bearing demand, and savings deposits

5,175,735

36.1

5,013,305

34.0

4,872,029

33.0

Time deposits

5,773,804

40.3

5,993,208

40.7

5,966,757

40.5

Total deposits

14,327,489

100.0

14,729,498

100.0

14,753,753

100.0

Gross loan-to-deposit ratio

95.2

92.6

93.9

Borrowings. Federal Home Loan Bank and Federal Reserve Bank borrowings totaled $239.0 million at December 31, 2024, compared with $100.0 million at September 30, 2024, and $1.80 billion at December 31, 2023. The year-over-year change primarily reflected the payoff of the Company’s BTFP borrowings in March and April 2024.

Credit Quality and Allowance for Credit Losses

Nonperforming assets. Nonperforming assets were $90.8 million, or 0.53% of total assets, at December 31, 2024, down 13% from $103.8 million, or 0.60% of total assets, at September 30, 2024.

The following table sets forth the components of nonperforming assets at December 31, 2024, September 30, 2024, and December 31, 2023:

(dollars in thousands) (unaudited)

12/31/2024

9/30/2024

12/31/2023

Loans on nonaccrual status (1)

90,564

103,602

45,204

Accruing delinquent loans past due 90 days or more

229

226

261

Total nonperforming loans

90,793

103,828

45,465

Other real estate owned

—

Total nonperforming assets

90,793

103,828

45,528

Nonperforming assets/total assets

0.53

0.60

0.24

_____________________________________

(1)

Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.8 million, $13.1 million and $11.4 million at December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

Criticized loans. Criticized loans decreased $55.8 million, or 11%, to $450.0 million at December 31, 2024, down from $505.7 million at September 30, 2024. The criticized loans to total loans ratio improved to 3.30% at December 31, 2024, down from 3.71% at September 30, 2024. The decrease reflected payoffs, workouts and note sales of problem loans during the quarter.

Net charge offs and provision for credit losses. The Company recorded net charge offs of $12.8 million in the 2024 fourth quarter, equivalent to 0.38%, annualized, of average loans. This compares with net charge offs of $5.7 million, or 0.17%, annualized, of average loans in the immediately preceding third quarter. The quarter-over-quarter change in net charge offs reflected the problem loan resolution activity in the fourth quarter. The full-year 2024 net charge off ratio was 0.19%, compared with 0.22% for the 2023 full year.

The following table sets forth net charge offs and annualized net charge off ratios for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, and the full years ended December 31, 2024, and December 31, 2023:

For the Three Months Ended

For the Twelve Months Ended

(dollars in thousands) (unaudited)

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Net charge offs

12,843

5,749

1,815

26,567

32,358

Annualized net charge offs/average loans

0.38

0.17

0.05

0.19

0.22

For the 2024 fourth quarter, the Company recorded a provision for credit losses of $10.0 million. This compares with a provision for credit losses of $3.3 million in the immediately preceding third quarter. The quarter-over-quarter change in the provision for credit losses primarily reflected net charge offs in the fourth quarter of 2024. For the full year 2024, the Company recorded a provision for credit losses of $17.3 million, compared with a provision for credit losses of $31.6 million for the full year 2023.

Allowance for credit losses. The allowance for credit losses totaled $150.5 million at December 31, 2024, compared with $153.3 million at September 30, 2024. The allowance coverage ratio was 1.11% of loans receivable at December 31, 2024, compared with 1.13% at September 30, 2024. The change in the allowance coverage ratio was due to a decrease in quantitative and individually evaluated loan reserves, which reflected, in part, the quarter-over-quarter reduction in criticized loans, partially offset by an increase in qualitative reserves.

The following table sets forth the allowance for credit losses and the coverage ratios at December 31, 2024, September 30, 2024, and December 31, 2023:

(dollars in thousands) (unaudited)

12/31/2024

9/30/2024

12/31/2023

Allowance for credit losses

150,527

153,270

158,694

Allowance for credit losses/loans receivable

1.11

1.13

1.15

Capital

At December 31, 2024, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at December 31, 2024, September 30, 2024, and December 31, 2023:

(unaudited)

12/31/2024

9/30/2024

12/31/2023

Minimum Guideline for “Well-Capitalized”

Common Equity Tier 1 Capital Ratio

13.06

13.07

12.28

6.50

Tier 1 Capital Ratio

13.79

12.96

8.00

Total Capital Ratio

14.78

14.82

13.92

10.00

Leverage Ratio

11.78

11.61

10.11

5.00

At December 31, 2024, total stockholders’ equity was $2.13 billion, or $17.68 per common share, compared with $2.17 billion, or $17.97 per common share, at September 30, 2024. Tangible common equity (“TCE”) per share(6) was $13.81 at December 31, 2024, compared with $14.10 at September 30, 2024. The quarter-over-quarter change in stockholders’ equity included a $45.1 million increase in accumulated other comprehensive losses, which was impacted by market interest rates. The change in accumulated other comprehensive losses impacted book value and tangible book value by $(0.37) per share during the fourth quarter of 2024. The TCE ratio(6) was 10.05% at December 31, 2024, down 3 basis points from 10.08% at September 30, 2024, and up 119 basis points from December 31, 2023.

The following table sets forth the TCE per share and the TCE ratio at December 31, 2024, September 30, 2024, and December 31, 2023:

(unaudited)

12/31/2024

9/30/2024

12/31/2023

TCE per share

13.81

14.10

13.76

TCE ratio

10.05

10.08

8.86

_____________________________________

(6)

TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, January 27, 2025, at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its fourth quarter ended December 31, 2024. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for at least one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 3, 2025, replay access code 6066063.

Non-GAAP Financial Metrics

This news release and accompanying financial tables contain certain non-GAAP financial measure disclosures, including net income excluding notable items, earnings per share excluding notable items, PPNR, PPNR excluding notable items, noninterest expense excluding notable items, TCE per share, TCE ratio, ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.05 billion in total assets as of December 31, 2024. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, the Bank provides a full suite of commercial, corporate and consumer loans, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; deposit and fee-based products and services; international trade financing; and cash management services, foreign currency exchange solutions, and interest rate derivative products, among others. Bank of Hope operates 46 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Alabama, and Georgia. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices in the United States; and a representative office in Seoul, Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to www.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.

Additional Information About the Merger and Where to Find It

In connection with the pending merger with Territorial Bancorp Inc., Hope Bancorp, Inc. filed with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4, which included a Proxy Statement/Prospectus and which was declared effective by the SEC on August 20, 2024, as further supplemented by Hope Bancorp on September 12, 2024. This earnings release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information about the pending merger. Territorial Bancorp shareholders are able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov). Territorial Bancorp shareholders are also able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.

Forward-Looking Statements

Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, Hope Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the pending transaction with Territorial Bancorp is subject to regulatory approvals and other customary closing conditions. There is no assurance that such conditions will be met or that the pending merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible renewed deterioration in economic conditions in Hope Bancorp’s areas of operation or elsewhere; 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 Hope Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp; the risk that any announcements relating to the pending transaction could have adverse effects on the market price of the common stock of Hope Bancorp; diversion of management’s attention from ongoing business operations and opportunities; and risks from natural disasters. For additional information concerning these and other risk factors, see Hope Bancorp’s most recent Annual Report on Form 10-K. Hope Bancorp does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share data)

Assets:

12/31/2024

9/30/2024

% change

12/31/2023

% change

Cash and due from banks

458,199

680,857

(33

1,928,967

(76

Investment securities

2,075,628

2,177,301

2,408,971

(14

Federal Home Loan Bank (“FHLB”) stock and other investments

57,196

57,158

—

61,000

Gross loans, including loans held for sale

13,632,763

13,643,702

—

13,857,027

Allowance for credit losses

(150,527

)

(153,270

)

(158,694

)

Accrued interest receivable

51,169

51,898

61,720

(17

Premises and equipment, net

51,759

51,543

—

50,611

Goodwill and intangible assets

466,781

467,182

—

468,385

—

Other assets

411,040

377,818

453,535

Total assets

17,054,008

17,354,189

19,131,522

(11

Liabilities:

Deposits

14,327,489

14,729,498

14,753,753

FHLB and Federal Reserve Bank (“FRB”) borrowings

239,000

100,000

139

1,795,726

(87

Subordinated debentures and convertible notes, net

109,584

109,249

—

108,269

Accrued interest payable

93,784

107,017

(12

168,174

(44

Other liabilities

149,646

138,640

184,357

(19

Total liabilities

14,919,503

15,184,404

17,010,279

(12

Stockholders’ Equity:

Common stock, $0.001 par value

138

—

138

—

Additional paid-in capital

1,445,373

1,442,993

—

1,439,963

—

Retained earnings

1,181,533

1,174,100

1,150,547

Treasury stock, at cost

(264,667

)

(264,667

)

—

(264,667

)

—

Accumulated other comprehensive loss, net

(227,872

)

(182,779

)

(25

(204,738

)

(11

Total stockholders’ equity

2,134,505

2,169,785

2,121,243

Total liabilities and stockholders’ equity

17,054,008

17,354,189

19,131,522

(11

Common stock shares – authorized

300,000,000

150,000,000

Common stock shares – outstanding

120,755,658

120,737,908

120,126,786

Treasury stock shares

17,382,835

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

Three Months Ended

Twelve Months Ended

12/31/2024

9/30/2024

% change

12/31/2023

% change

12/31/2024

12/31/2023

% change

Interest and fees on loans

203,828

210,022

221,020

837,159

892,563

Interest on investment securities

16,930

16,741

18,398

68,549

66,063

Interest on cash and deposits at other banks

4,694

7,507

(37

29,029

(84

44,668

87,361

(49

Interest on other investments and FHLB dividends

1,169

814

777

3,604

2,891

Total interest income

226,621

235,084

269,224

(16

953,980

1,048,878

Interest on deposits

121,645

127,193

121,305

—

495,448

441,231

Interest on borrowings

2,841

3,082

22,003

(87

30,681

81,786

(62

Total interest expense

124,486

130,275

143,308

(13

526,129

523,017

Net interest income before provision

102,135

104,809

125,916

(19

427,851

525,861

(19

Provision for credit losses

10,000

3,280

205

2,400

317

17,280

31,592

(45

Net interest income after provision

92,135

101,529

123,516

(25

410,571

494,269

(17

Service fees on deposit accounts

2,809

2,651

2,505

10,728

9,466

Net gains on sales of SBA loans

3,063

2,722

—

100

7,765

4,097

Net gains (losses) on sales of securities available for sale

837

(326

)

N/A

—

100

936

—

100

Net gain on branch sales

1,006

—

100

—

100

1,006

—

100

Other income and fees

8,166

6,792

6,775

26,642

32,014

(17

Total noninterest income

15,881

11,839

9,280

47,077

45,577

Salaries and employee benefits

42,016

44,160

47,364

(11

177,860

207,871

(14

Occupancy

6,837

6,940

7,231

27,469

28,868

Furniture and equipment

5,436

5,341

5,302

21,592

21,378

Data processing and communications

2,961

3,112

2,976

12,060

11,606

FDIC assessment

2,684

2,200

3,141

(15

10,813

13,296

(19

FDIC special assessment

—

3,971

(100

691

3,971

(83

Earned interest credit

4,605

6,869

(33

6,505

(29

23,447

22,399

Restructuring-related (reversals) costs

(152

)

197

N/A

11,076

N/A

1,023

11,576

(91

Merger-related costs

735

1,236

(41

—

100

4,604

—

100

Other noninterest expense

12,468

11,213

11,625

45,125

40,994

Total noninterest expense

77,590

81,268

99,191

(22

324,684

361,959

(10

Income before income taxes

30,426

32,100

33,605

132,964

177,887

(25

Income tax provision

6,089

7,941

(23

7,124

(15

33,334

44,214

(25

Net income

24,337

24,159

26,481

99,630

133,673

(25

Earnings per common share – diluted

0.20

0.22

0.82

1.11

Weighted average shares outstanding – diluted

121,401,285

121,159,977

120,761,112

121,108,594

120,393,257

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

For the Three Months Ended

For the Twelve Months Ended

Profitability measures (annualized):

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Return on average assets (“ROA”)

0.57

0.56

0.54

0.56

0.67

ROA excluding notable items (1)

0.56

0.58

0.76

0.58

0.73

Return on average equity (“ROE”)

4.51

4.52

5.17

4.68

6.48

ROE excluding notable items (1)

4.46

4.71

7.25

4.85

7.02

Return on average tangible common equity (“ROTCE”) (1)

5.76

5.78

6.71

5.99

8.39

ROTCE excluding notable items (1)

5.69

6.02

9.39

6.22

9.08

Net interest margin

2.50

2.55

2.70

2.55

2.81

Efficiency ratio (not annualized)

65.75

69.67

73.37

68.36

63.34

Efficiency ratio excluding notable items (not annualized) (1)

65.81

68.44

62.24

67.18

60.62

(1) ROA excluding notable items, ROE excluding notable items, ROTCE, ROTCE excluding notable items, and efficiency ratio excluding notable items are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Pages 10 through 12.

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

Three Months Ended

12/31/2024

9/30/2024

12/31/2023

Interest

Annualized

Interest

Annualized

Interest

Annualized

Average

Income/

Average

Income/

Average

Income/

Average

Balance

Expense

Yield/Cost

Balance

Expense

Yield/Cost

Balance

Expense

Yield/Cost

INTEREST EARNING ASSETS:

Loans, including loans held for sale

13,626,965

203,828

5.95

13,574,539

210,022

6.16

14,052,953

221,020

6.24

Investment securities

2,177,613

16,930

3.09

2,182,847

16,741

3.05

2,283,613

18,398

3.20

Interest earning cash and deposits at other banks

416,467

4,694

4.48

570,754

7,507

5.23

2,142,147

29,029

5.38

FHLB stock and other investments

49,388

1,169

9.42

48,956

814

6.61

47,587

777

6.48

Total interest earning assets

16,270,433

226,621

5.54

16,377,096

235,084

5.71

18,526,300

269,224

5.77

INTEREST BEARING LIABILITIES:

Deposits:

Money market, interest bearing demand and savings

5,187,715

50,510

3.87

4,963,727

50,707

4.06

4,821,222

45,662

3.76

Time deposits

5,856,439

71,135

4.83

6,053,924

76,486

5.03

6,327,191

75,643

4.74

Total interest bearing deposits

11,044,154

121,645

4.38

11,017,651

127,193

4.59

11,148,413

121,305

4.32

FHLB and FRB borrowings

113,533

248

0.87

120,326

329

1.09

1,795,740

19,224

4.25

Subordinated debentures and convertible notes

105,482

2,593

9.62

105,152

2,753

10.24

104,198

2,779

10.44

Total interest bearing liabilities

11,263,169

124,486

4.40

11,243,129

130,275

4.61

13,048,351

143,308

4.36

Noninterest bearing demand deposits

3,546,613

3,704,088

4,113,680

Total funding liabilities/cost of funds

14,809,782

3.34

14,947,217

3.47

17,162,031

3.31

Net interest income/net interest spread

102,135

1.14

104,809

1.10

125,916

1.41

Net interest margin

2.50

2.55

2.70

Cost of deposits:

Noninterest bearing demand deposits

3,546,613

—

3,704,088

—

4,113,680

—

Interest bearing deposits

11,044,154

121,645

4.38

11,017,651

127,193

4.59

11,148,413

121,305

4.32

Total deposits

14,590,767

121,645

3.32

14,721,739

127,193

3.44

15,262,093

121,305

3.15

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

Twelve Months Ended

12/31/2024

12/31/2023

Interest

Annualized

Interest

Annualized

Average

Income/

Average

Income/

Average

Balance

Expense

Yield/Cost

Balance

Expense

Yield/Cost

INTEREST EARNING ASSETS:

Loans, including loans held for sale

13,634,728

837,159

6.14

14,732,166

892,563

6.06

Investment securities

2,213,068

68,549

3.10

2,262,840

66,063

2.92

Interest earning cash and deposits at other banks

856,768

44,668

5.21

1,685,462

87,361

5.18

FHLB stock and other investments

48,738

3,604

7.39

47,249

2,891

6.12

Total interest earning assets

16,753,302

953,980

5.69

18,727,717

1,048,878

5.60

INTEREST BEARING LIABILITIES:

Deposits:

Money market, interest bearing demand and savings

5,043,411

200,070

3.97

4,858,919

161,751

3.33

Time deposits

5,954,272

295,378

4.96

6,409,056

279,480

4.36

Total interest bearing deposits

10,997,683

495,448

4.51

11,267,975

441,231

3.92

FHLB and FRB borrowings

531,869

19,860

3.73

1,618,292

69,365

4.29

Subordinated debentures and convertible notes

104,989

10,821

10.14

181,125

12,421

6.76

Total interest bearing liabilities

11,634,541

526,129

4.52

13,067,392

523,017

4.00

Noninterest bearing demand deposits

3,679,947

4,362,043

Total funding liabilities/cost of funds

15,314,488

3.44

17,429,435

3.00

Net interest income/net interest spread

427,851

1.17

525,861

1.60

Net interest margin

2.55

2.81

Cost of deposits:

Noninterest bearing demand deposits

3,679,947

—

4,362,043

—

Interest bearing deposits

10,997,683

495,448

4.51

11,267,975

441,231

3.92

Total deposits

14,677,630

495,448

3.38

15,630,018

441,231

2.82

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

Three Months Ended

Twelve Months Ended

AVERAGE BALANCES:

12/31/2024

9/30/2024

% change

12/31/2023

% change

12/31/2024

12/31/2023

% change

Gross loans, including loans held for sale

13,626,965

13,574,539

—

14,052,953

13,634,728

14,732,166

Investment securities

2,177,613

2,182,847

—

2,283,613

2,213,068

2,262,840

Interest earning cash and deposits at other banks

416,467

570,754

(27

2,142,147

(81

856,768

1,685,462

(49

Interest earning assets

16,270,433

16,377,096

18,526,300

(12

16,753,302

18,727,717

(11

Goodwill and intangible assets

467,021

467,419

—

468,622

—

467,620

469,298

—

Total assets

17,228,881

17,369,169

19,600,942

(12

17,746,408

19,806,163

(10

Noninterest bearing demand deposits

3,546,613

3,704,088

4,113,680

(14

3,679,947

4,362,043

(16

Interest bearing deposits

11,044,154

11,017,651

—

11,148,413

10,997,683

11,267,975

Total deposits

14,590,767

14,721,739

15,262,093

14,677,630

15,630,018

Interest bearing liabilities

11,263,169

11,243,129

—

13,048,351

(14

11,634,541

13,067,392

(11

Stockholders’ equity

2,156,858

2,139,861

2,048,335

2,130,140

2,061,665

LOAN PORTFOLIO COMPOSITION:

12/31/2024

9/30/2024

% change

12/31/2023

% change

Commercial real estate (“CRE”) loans

8,527,008

8,630,757

8,797,884

Commercial and industrial (“C&I”) loans

3,967,596

3,901,368

4,135,044

Residential mortgage and other loans

1,123,668

1,085,863

920,691

Loans receivable

13,618,272

13,617,988

—

13,853,619

Loans held for sale

14,491

25,714

(44

3,408

325

Gross loans

13,632,763

13,643,702

—

13,857,027

CRE LOANS BY PROPERTY TYPE:

12/31/2024

9/30/2024

% change

12/31/2023

% change

Multi-tenant retail

1,619,505

1,640,769

1,704,337

Industrial warehouses

1,264,703

1,244,891

1,226,780

Multifamily

1,208,494

1,204,734

—

1,226,384

Gas stations and car washes

1,027,502

1,021,537

1,030,888

—

Mixed-use facilities

771,695

826,045

870,664

(11

Hotels/motels

769,635

800,707

796,267

Single-tenant retail

659,993

663,178

—

662,705

—

Office

394,431

396,131

—

401,821

All other

811,050

832,765

878,038

Total CRE loans

8,527,008

8,630,757

8,797,884

DEPOSIT COMPOSITION:

12/31/2024

9/30/2024

% change

12/31/2023

% change

Noninterest bearing demand deposits

3,377,950

3,722,985

3,914,967

(14

Money market, interest bearing demand, and savings

5,175,735

5,013,305

4,872,029

Time deposits

5,773,804

5,993,208

5,966,757

Total deposits

14,327,489

14,729,498

14,753,753

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

CAPITAL & CAPITAL RATIOS:

12/31/2024

9/30/2024

12/31/2023

Total stockholders’ equity

2,134,505

2,169,785

2,121,243

Total capital

2,150,810

2,143,477

2,120,157

Common equity tier 1 ratio

13.06

13.07

12.28

Tier 1 capital ratio

13.79

12.96

Total capital ratio

14.78

14.82

13.92

Leverage ratio

11.78

11.61

10.11

Total risk weighted assets

14,549,708

14,466,152

15,230,302

Book value per common share

17.68

17.97

17.66

Tangible common equity (“TCE”) per share (1)

13.81

14.10

13.76

TCE ratio (1)

10.05

10.08

8.86

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

ALLOWANCE FOR CREDIT LOSSES CHANGES:

Three Months Ended

Twelve Months Ended

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

12/31/2024

12/31/2023

Balance at beginning of period

153,270

156,019

158,758

158,694

158,809

158,694

162,359

ASU 2022-02 day 1 adoption impact

—

(407

)

Provision for credit losses on loans

10,100

3,000

1,700

3,600

1,700

18,400

29,100

Recoveries

704

534

2,099

1,184

306

4,521

5,162

Charge offs

(13,547

)

(6,283

)

(6,538

)

(4,720

)

(2,121

)

(31,088

)

(37,520

)

Balance at end of period

150,527

153,270

156,019

158,758

158,694

150,527

158,694

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

Allowance for unfunded loan commitments

2,723

2,823

2,543

2,843

3,843

Three Months Ended

Twelve Months Ended

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

12/31/2024

12/31/2023

Provision for credit losses on loans

10,100

3,000

1,700

3,600

1,700

18,400

29,100

Provision (credit) for unfunded loan commitments

(100

)

280

(300

)

(1,000

)

700

(1,120

)

2,492

Provision for credit losses

10,000

3,280

1,400

2,600

2,400

17,280

31,592

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

Three Months Ended

Twelve Months Ended

NET LOAN CHARGE OFFS (RECOVERIES):

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

12/31/2024

12/31/2023

CRE loans

156

372

514

(497

)

1,560

545

(338

)

C&I loans

12,607

5,287

3,900

4,072

138

25,866

32,388

Residential mortgage and other loans

(39

)

117

156

308

Net loan charge offs

12,843

5,749

4,439

3,536

1,815

26,567

32,358

Net charge offs/average loans (annualized)

0.38

0.17

0.13

0.10

0.05

0.19

0.22

NONPERFORMING ASSETS:

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

Loans on nonaccrual status (1)

90,564

103,602

67,003

59,526

45,204

Accruing delinquent loans past due 90 days or more

229

226

273

47,290

261

Total nonperforming loans

90,793

103,828

67,276

106,816

45,465

Other real estate owned (“OREO”)

—

Total nonperforming assets

90,793

103,828

67,276

106,816

45,528

Nonperforming assets/total assets

0.53

0.60

0.39

0.59

0.24

Nonperforming loans/loans receivable

0.67

0.76

0.50

0.78

0.33

Nonaccrual loans/loans receivable

0.67

0.76

0.49

0.43

0.33

Allowance for credit losses/loans receivable

1.11

1.13

1.15

1.16

1.15

Allowance for credit losses/nonperforming loans

165.79

147.62

231.91

148.63

349.05

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $12.8 million, $13.1 million, $11.2 million, $10.9 million, and $11.4 million, at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively.

NONACCRUAL LOANS BY TYPE:

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

CRE loans

23,396

72,228

27,292

37,836

33,932

C&I loans

60,807

24,963

33,456

15,070

5,013

Residential mortgage and other loans

6,361

6,411

6,255

6,620

6,259

Total nonaccrual loans

90,564

103,602

67,003

59,526

45,204

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands)

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

30 - 59 days past due

8,681

10,746

9,073

2,273

2,833

60 - 89 days past due

5,164

1,539

552

313

1,289

Total accruing delinquent loans 30-89 days past due

13,845

12,285

9,625

2,586

4,122

ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

CRE loans

3,205

816

5,586

1,639

2,160

C&I loans

1,288

9,037

2,530

551

1,643

Residential mortgage and other loans

9,352

2,432

1,509

396

319

Total accruing delinquent loans 30-89 days past due

13,845

12,285

9,625

2,586

4,122

CRITICIZED LOANS:

12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

Special mention loans

179,073

184,443

204,167

215,183

178,992

Classified loans

270,896

321,283

243,635

206,350

143,449

Total criticized loans

449,969

505,726

447,802

421,533

322,441

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

Reconciliation of GAAP financial measures to non-GAAP financial measures

Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by management are provided below.

TANGIBLE COMMON EQUITY (“TCE”)

12/31/2024

9/30/2024

12/31/2023

Total stockholders’ equity

2,134,505

2,169,785

2,121,243

Less: Goodwill and core deposit intangible assets, net

(466,781

)

(467,182

)

(468,385

)

TCE

1,667,724

1,702,603

1,652,858

Total assets

17,054,008

17,354,189

19,131,522

Less: Goodwill and core deposit intangible assets, net

(466,781

)

(467,182

)

(468,385

)

Tangible assets

16,587,227

16,887,007

18,663,137

TCE ratio

10.05

10.08

8.86

Common shares outstanding

120,755,658

120,737,908

120,126,786

TCE per share

13.81

14.10

13.76

Three Months Ended

Twelve Months Ended

RETURN ON AVERAGE TANGIBLE COMMON EQUITY (“ROTCE”)

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Average stockholders’ equity

2,156,858

2,139,861

2,048,335

2,130,140

2,061,665

Less: Average goodwill and core deposit intangible assets, net

(467,021

)

(467,419

)

(468,622

)

(467,620

)

(469,298

)

Average TCE

1,689,837

1,672,442

1,579,713

1,662,520

1,592,367

Net income

24,337

24,159

26,481

99,630

133,673

ROTCE (annualized)

5.76

5.78

6.71

5.99

8.39

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

Three Months Ended

Twelve Months Ended

PRE-PROVISION NET REVENUE (“PPNR”)

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Net interest income before provision for credit losses

102,135

104,809

125,916

427,851

525,861

Noninterest income

15,881

11,839

9,280

47,077

45,577

Revenue

118,016

116,648

135,196

474,928

571,438

Less: Noninterest expense

77,590

81,268

99,191

324,684

361,959

PPNR

40,426

35,380

36,005

150,244

209,479

Notable items:

FDIC special assessment expense

—

3,971

691

3,971

Restructuring-related (gains) costs, net (including gain on branch sale)

(1,158

)

197

11,076

11,576

Merger-related costs

735

1,236

—

4,604

—

Total notable items

(423

)

1,433

15,047

5,312

15,547

PPNR, excluding notable items

40,003

36,813

51,052

155,556

225,026

Three Months Ended

Twelve Months Ended

PROFITABILITY RATIOS EXCLUDING NOTABLE ITEMS

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Net income

24,337

24,159

26,481

99,630

133,673

Notable items:

FDIC special assessment expense

—

3,971

691

3,971

Restructuring-related (gains) costs, net (including gain on branch sale)

(1,158

)

197

11,076

11,576

Merger-related costs

735

1,236

—

4,604

—

Total notable items

(423

)

1,433

15,047

5,312

15,547

Less: tax provision

(125

)

421

4,427

1,562

4,574

Total notable items, net of tax provision

(298

)

1,012

10,620

3,750

10,973

Net income excluding notable items

24,039

25,171

37,101

103,380

144,646

Diluted common shares

121,401,285

121,159,977

120,761,112

121,108,594

120,393,257

EPS excluding notable items

0.20

0.21

0.31

0.85

1.20

Average Assets

17,228,881

17,369,169

19,600,942

17,746,408

19,806,163

ROA excluding notable items (annualized)

0.56

0.58

0.76

0.58

0.73

Average Equity

2,156,858

2,139,861

2,048,335

2,130,140

2,061,665

ROE excluding notable items (annualized)

4.46

4.71

7.25

4.85

7.02

Average TCE

1,689,837

1,672,442

1,579,713

1,662,520

1,592,367

ROTCE excluding notable items (annualized)

5.69

6.02

9.39

6.22

9.08

Hope Bancorp, Inc.

Selected Financial Data

Unaudited (dollars in thousands, except share and per share data)

Three Months Ended

Twelve Months Ended

EFFICIENCY RATIO EXCLUDING NOTABLE ITEMS

12/31/2024

9/30/2024

12/31/2023

12/31/2024

12/31/2023

Noninterest expense

77,590

81,268

99,191

324,684

361,959

Less: notable items:

FDIC special assessment expense

—

(3,971

)

(691

)

(3,971

)

Restructuring-related reversals (costs)

152

(197

)

(11,076

)

(1,023

)

(11,576

)

Merger-related costs

(735

)

(1,236

)

—

(4,604

)

—

Noninterest expense excluding notable items

77,007

79,835

84,144

318,366

346,412

Revenue

118,016

116,648

135,196

474,928

571,438

Less: notable items:

Net gain on branch sale

(1,006

)

—

(1,006

)

—

Revenue excluding notable items

117,010

116,648

135,196

473,922

571,438

Efficiency ratio excluding notable items

65.81

68.44

62.24

67.18

60.62

View source version on businesswire.com: https://www.businesswire.com/news/home/20250127686534/en/

Julianna Balicka EVP & Chief Financial Officer 213-235-3235 julianna.balicka@bankofhope.com

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

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HOPE Hope Bancorp Inc