HOPE BANCORP INC

For the period ended Sep 30, 2024. Filed Nov 8, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Sep 30, 2024 · Filed Nov 8, 2024

HOPE$13.24-0.9%Stored close · as of Nov 10, 2026

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Contents

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)
	September 30,2024	December 31,2023
ASSETS · (Dollars in thousands, except share data)
Cash and cash equivalents:
Cash and due from banks	$170,674	$172,813
Interest earning cash in other banks	510,183	1,756,154
Total cash and cash equivalents	680,857	1,928,967
Investment securities available for sale (“AFS”), at fair value	1,920,981	2,145,059
Investment securities held to maturity (“HTM”), at amortized cost; fair value of $246,231 and $250,518 at September 30, 2024 and December 31, 2023, respectively	256,320	263,912
Equity investments	39,908	43,750
Loans held for sale, at lower of cost or fair value	25,714	3,408
Loans receivable, net of allowance for credit losses of $153,270 and $158,694 at September 30, 2024 and December 31, 2023, respectively	13,464,718	13,694,925
Other real estate owned (“OREO”), net	—	63
Federal Home Loan Bank (“FHLB”) stock, at cost	17,250	17,250
Premises and equipment, net	51,543	50,611
Accrued interest receivable	51,898	61,720
Deferred tax assets, net	122,538	135,215
Bank owned life insurance (“BOLI”)	89,726	89,061
Investments in affordable housing partnerships	33,010	54,474
Operating lease right-of-use assets (“ROU”), net	42,071	46,611
Goodwill	464,450	464,450
Core deposit intangible assets, net	2,732	3,935
Servicing assets, net	9,339	9,631
Other assets	81,134	118,480
Total assets	$17,354,189	$19,131,522

(Continued)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)
	September 30,2024	December 31,2023
LIABILITIES AND STOCKHOLDERS’ EQUITY · (Dollars in thousands, except share data)
LIABILITIES:
Deposits:
Noninterest bearing	$3,722,985	$3,914,967
Interest bearing:
Money market and NOW accounts	4,289,042	4,169,543
Savings deposits	724,263	702,486
Time deposits	5,993,208	5,966,757
Total deposits	14,729,498	14,753,753
FHLB and Federal Reserve Bank (“FRB”) borrowings	100,000	1,795,726
Convertible notes and subordinated debentures, net	109,249	108,269
Accrued interest payable	107,017	168,174
Operating lease liabilities	47,015	52,670
Commitments to fund investments in affordable housing partnerships	—	21,017
Other liabilities	91,625	110,670
Total liabilities	$15,184,404	$17,010,279
Commitments and contingent liabilities (Note 12)
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 300,000,000 and 150,000,000 authorized shares at September 30, 2024 and December 31, 2023, respectively: issued and outstanding 138,120,743 and 120,737,908 shares, respectively, at September 30, 2024, and issued and outstanding 137,509,621 and 120,126,786 shares, respectively, at December 31, 2023	$138	$138
Additional paid-in capital	1,442,993	1,439,963
Retained earnings	1,174,100	1,150,547
Treasury stock, at cost; 17,382,835 and 17,382,835 shares at September 30, 2024 and December 31, 2023, respectively	(264,667)	(264,667)
Accumulated other comprehensive loss, net	(182,779)	(204,738)
Total stockholders’ equity	2,169,785	2,121,243
Total liabilities and stockholders’ equity	$17,354,189	$19,131,522

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands, except per share data)
INTEREST INCOME:
Interest and fees on loans	$210,022	$229,937	$633,331	$671,543
Interest on investment securities	16,741	17,006	51,619	47,665
Interest on cash and deposits at other banks	7,507	28,115	39,974	58,332
Interest on other investments	814	735	2,435	2,114
Total interest income	235,084	275,793	727,359	779,654
INTEREST EXPENSE:
Interest on deposits	127,193	117,854	373,803	319,926
Interest on FHLB and FRB borrowings	329	19,821	19,612	50,141
Interest on other borrowings and debt	2,753	2,740	8,228	9,642
Total interest expense	130,275	140,415	401,643	379,709
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES	104,809	135,378	325,716	399,945
PROVISION FOR CREDIT LOSSES	3,280	16,862	7,280	29,192
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	101,529	118,516	318,436	370,753
NONINTEREST INCOME:
Service fees on deposit accounts	2,651	2,415	7,919	6,961
International service fees	711	740	2,441	2,682
Wire transfer and foreign currency fees	926	806	2,712	2,429
Swap fees	21	(61)	189	655
Net gains on sales of SBA loans	2,722	—	4,702	4,097
Net (losses) gains on sales of investment securities AFS	(326)	—	99	—
Other income and fees	5,134	4,405	13,134	19,473
Total noninterest income	11,839	8,305	31,196	36,297
NONINTEREST EXPENSE:
Salaries and employee benefits	44,160	51,033	135,844	160,507
Occupancy	6,940	7,149	20,632	21,637
Furniture and equipment	5,341	5,625	16,156	16,076
Data processing and communications	3,112	2,891	9,099	8,630
Professional fees	1,969	2,111	6,679	5,070
Amortization of investments in affordable housing partnerships	2,206	1,933	6,623	5,561
FDIC assessments	2,200	3,683	8,129	10,155
FDIC special assessment	—	—	691	—
Earned interest credit expense	6,869	6,377	18,842	15,894
Restructuring-related costs	197	500	1,175	500
Merger-related costs	1,236	—	3,869	—
Other noninterest expense	7,038	5,509	19,355	18,738
Total noninterest expense	81,268	86,811	247,094	262,768
INCOME BEFORE INCOME TAXES	32,100	40,010	102,538	144,282
INCOME TAX PROVISION	7,941	9,961	27,245	37,090
NET INCOME	$24,159	$30,049	$75,293	$107,192
EARNINGS PER COMMON SHARE
Basic	$0.20	$0.25	$0.62	$0.89
Diluted	$0.20	$0.25	$0.62	$0.89

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands)
Net income	$24,159	$30,049	$75,293	$107,192
Other comprehensive income (loss):
Change in unrealized net holding gains (losses) on securities AFS	69,000	(68,261)	45,885	(68,117)
Change in unrealized net holding gains (losses) on interest rate contracts used in cash flow hedges	3,178	(4,310)	(7,758)	3,405
Reclassification adjustments for net gains realized in net income	(847)	(3,720)	(7,019)	(8,780)
Tax effect	(20,980)	22,490	(9,149)	21,664
Other comprehensive income (loss), net of tax	50,351	(53,801)	21,959	(51,828)
Total comprehensive income (loss)	$74,510	$(23,752)	$97,252	$55,364

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Common stock · Additional paid-in capital · Retained earnings · Treasury stock · Accumulated other comprehensive loss, net · Totalstockholders’ equity
Shares · Amount
(Dollars in thousands, except share and per share data)
BALANCE, JUNE 30, 2023	120,014,888	$137		$1,433,788		$1,127,624		$(264,667)	$(228,884)	$2,067,998
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations	11,332						—
Stock-based compensation, net of tax settlements		2,981					2,981
Cash dividends declared on common stock ($0.14 per share)			(16,803)				(16,803)
Comprehensive loss:
Net income			30,049				30,049
Other comprehensive loss					(53,801)		(53,801)
BALANCE, SEPTEMBER 30, 2023	120,026,220	$137		$1,436,769		$1,140,870		$(264,667)	$(282,685)	$2,030,424
BALANCE, JUNE 30, 2024	120,731,342	$138		$1,440,963		$1,167,978		$(264,667)	$(233,130)	$2,111,282
ASU 2023-02 adjustment			(1,605)				(1,605)
ASU 2023-02 adjustment tax impact			472				472
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations	6,566						—
Stock-based compensation, net of tax settlements		2,030					2,030
Cash dividends declared on common stock ($0.14 per share)			(16,904)				(16,904)
Comprehensive income:
Net income			24,159				24,159
Other comprehensive income					50,351		50,351
BALANCE, SEPTEMBER 30, 2024	120,737,908	$138		$1,442,993		$1,174,100		$(264,667)	$(182,779)	$2,169,785

Common stock · Additional paid-in capital · Retained earnings · Treasury stock · Accumulated other comprehensive loss, net · Totalstockholders’ equity
Shares · Amount
(Dollars in thousands, except share and per share data)
BALANCE, DECEMBER 31, 2022	119,495,209	$137		$1,431,003		$1,083,712		$(264,667)	$(230,857)	$2,019,328
Adoption of ASU 2022-02			407				407
Adoption of ASU 2022-02 tax adjustment			(120)				(120)
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations	531,011						—
Stock-based compensation, net of tax settlements		5,766					5,766
Cash dividends declared on common stock ($0.42 per share)			(50,321)				(50,321)
Comprehensive income:
Net income			107,192				107,192
Other comprehensive loss					(51,828)		(51,828)
BALANCE, SEPTEMBER 30, 2023	120,026,220	$137		$1,436,769		$1,140,870		$(264,667)	$(282,685)	$2,030,424
BALANCE, DECEMBER 31, 2023	120,126,786	$138		$1,439,963		$1,150,547		$(264,667)	$(204,738)	$2,121,243
ASU 2023-02 adjustment			(1,605)				(1,605)
ASU 2023-02 adjustment tax impact			472				472
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations	611,122						—
Stock-based compensation, net of tax settlements		3,030					3,030
Cash dividends declared on common stock ($0.42 per share)			(50,607)				(50,607)
Comprehensive income:
Net income			75,293				75,293
Other comprehensive income					21,959		21,959
BALANCE, SEPTEMBER 30, 2024	120,737,908	$138		$1,442,993		$1,174,100		$(264,667)	$(182,779)	$2,169,785

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
	2024	2023
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$75,293	$107,192
Adjustments to reconcile net income to net cash from operating activities:
Discount accretion, net of depreciation and amortization	28,054	15,040
Stock-based compensation expense	6,496	8,767
Provision for credit losses	7,280	29,192
Distribution gain from investment in affordable housing partnerships	(1)	(5,819)
Net gains on sales of loans	(5,059)	(4,174)
Gains on BOLI	(1,298)	(1,152)
Net change in fair value of derivatives	(9,923)	(11,606)
Valuation on HFS loans	1,552	341
Net gain on sale of investment securities AFS	(99)	—
Net change in deferred income taxes	4,001	5,692
Proceeds from sales of loans held for sale	40,050	67,763
Originations of loans held for sale	(28,197)	(53,828)
Originations of servicing assets	(1,839)	(1,885)
Net change in accrued interest receivable	9,822	(7,178)
Net change in other assets	31,111	51,454
Net change in accrued interest payable	(61,157)	140,163
Net change in other liabilities	(29,003)	55,256
Net cash provided by operating activities	67,083	395,218
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of interest earning deposits in other financial institutions	—	735
Investment securities available for sale:
Purchase of securities	(136,499)	(372,895)
Proceeds from matured, called, or paid-down securities	246,829	280,123
Proceeds from sales and calls of securities available for sale	157,692	—
Investment securities held to maturity:
Purchase of securities	—	(5,545)
Proceeds from matured, called, or paid-down securities	10,205	12,789
Purchase of equity investments	(1,175)	(924)
Proceeds from redemptions of equity investments	305	3
Proceeds from sales of loans held for sale previously classified as held for investment	82,800	335,390
Purchase of loans receivable	—	(1,636)
Net change in loans receivable	109,345	710,267
Proceeds from sales of OREO	63	1,209
Purchase of FHLB stock	—	(4,650)
Redemption of FHLB stock	—	6,030
Purchase of premises and equipment	(7,547)	(11,123)
Purchase of BOLI policy	—	(11,000)
Proceeds from BOLI death benefits	—	587
Investments in affordable housing partnerships	(3,157)	(2,852)
Net cash provided by investing activities	458,861	936,508
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	(24,255)	1,058
Proceeds from FHLB advances	400,000	5,350,000
Repayment of FHLB advances	(400,000)	(5,850,000)
Proceeds from FRB borrowings	786,100	36,104,000
Repayment of FRB borrowings	(2,481,826)	(34,673,274)
Repurchase of convertible notes	—	(19,534)
Repayment of convertible notes	—	(197,107)
Cash dividends paid on common stock	(50,607)	(50,321)
Taxes paid in net settlement of restricted stock	(3,466)	(3,001)
Net cash (used in) provided by financing activities	(1,774,054)	661,821
NET CHANGE IN CASH AND CASH EQUIVALENTS	(1,248,110)	1,993,547
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,928,967	506,776
CASH AND CASH EQUIVALENTS, END OF PERIOD	$680,857	$2,500,323
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$461,820	$238,264
Income taxes paid	27,630	7,170
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Transfer from loans receivable to OREO	$—	$105
Transfer from loans receivable to loans held for sale	140,994	382,286
Transfer from loans held for sale to loans receivable	26,491	22,400
ROU assets obtained in exchange for lease liabilities, net	5,490	7,606

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