Core Insights - Hope Bancorp reported a revenue of $118.02 million for the quarter ended December 2024, reflecting a 12.7% decrease year-over-year [1] - The company's EPS was $0.20, down from $0.32 in the same quarter last year, with a surprise of +5.26% compared to the consensus estimate of $0.19 [1] - The stock has returned -1.5% over the past month, underperforming the Zacks S&P 500 composite's +1.1% change, and currently holds a Zacks Rank 4 (Sell) [3] Financial Metrics - Efficiency Ratio was reported at 65.8%, slightly above the estimated 65.6% [4] - Net Interest Margin was 2.5%, below the estimated 2.6% [4] - Net charge-offs to average loans were 0.4%, higher than the estimated 0.2% [4] - Average Balance of Total interest-earning assets was $16.27 billion, below the estimated $16.50 billion [4] - Net Interest Income was $102.14 million, compared to the estimated $109.26 million [4] - Net gains on sales of SBA loans were $3.06 million, exceeding the estimated $2.91 million [4] - Total noninterest income was $15.88 million, surpassing the average estimate of $12.74 million [4] - Service fees on deposit accounts were $2.81 million, slightly below the estimated $2.85 million [4]

Core Viewpoint - Hope Bancorp reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, but down from $0.32 per share a year ago, indicating a 37.5% year-over-year decline in earnings [1][2] Financial Performance - The company posted revenues of $118.02 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.47% and down from $135.2 million year-over-year, reflecting a 12.9% decrease [2] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Stock Performance - Hope Bancorp shares have declined approximately 1.4% since the beginning of the year, while the S&P 500 has gained 3.7% [3] - The current Zacks Rank for Hope Bancorp is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $136.1 million, and for the current fiscal year, it is $1.19 on revenues of $568.37 million [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Banks - West industry, to which Hope Bancorp belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a relatively strong industry performance [8]

Financial Performance - For Q4 2024, net income was $24.3 million, or $0.20 per diluted common share, compared to $24.2 million in Q3 2024[2] - Full-year 2024 net income totaled $99.6 million, or $0.82 per diluted common share, with notable items adjusted net income at $103.4 million, or $0.85 per diluted common share[2] - Net income for the three months ended December 31, 2024, was $24,337, an increase of 1% from $24,159 in the previous quarter, but a decrease of 8% from $26,481 in the same quarter last year[30] - The total revenue for the three months ended December 31, 2024, was $118,016 thousand, a decline of 12.7% from $135,196 thousand for the same period in 2023[51] - The net income excluding notable items for the twelve months ended December 31, 2024, was $103,380 thousand, down 28.6% from $144,646 thousand for the same period in 2023[51] Revenue and Income Sources - Pre-provision net revenue (PPNR) for Q4 2024 increased 14% to $40.4 million from $35.4 million in Q3 2024[5] - Noninterest income rose 34% to $15.9 million in Q4 2024, driven by net gains on the sale of SBA loans and increased customer activity[8] - Total noninterest income increased by 34% from $11,839 in the previous quarter to $15,881 in the current quarter, and increased by 71% from $9,280 in the same quarter last year[30] - The pre-provision net revenue (PPNR) for the three months ended December 31, 2024, was $40,426 thousand, compared to $36,005 thousand for the same period in 2023, reflecting an increase of 11.8%[51] Asset and Liability Management - Total deposits decreased by $402 million, or 3%, to $14.33 billion from $14.73 billion in Q3 2024, influenced by the sale of Virginia branches[12] - Total assets decreased by 2% from $17,354,189 on September 30, 2024, to $17,054,008 on December 31, 2024, and decreased by 11% compared to $19,131,522 on December 31, 2023[28] - Total liabilities decreased by 2% from $15,184,404 on September 30, 2024, to $14,919,503 on December 31, 2024, and decreased by 12% compared to $17,010,279 on December 31, 2023[28] - Total deposits amounted to $14,590,767 with an interest expense of $121,645, resulting in a cost of 3.32%[34] Credit Quality and Loss Provisions - Nonperforming assets decreased to $90.8 million, or 0.53% of total assets, down from $103.8 million, or 0.60% at the end of Q3 2024[15] - The provision for credit losses increased to $10.0 million in Q4 2024 from $3.3 million in Q3 2024, with a full-year provision of $17.3 million compared to $31.6 million in 2023[17] - The allowance for credit losses totaled $150.5 million at December 31, 2024, with an allowance coverage ratio of 1.11% of loans receivable[18] - Net charge offs for Q4 2024 were $12.8 million, or 0.38% of average loans, compared to $5.7 million, or 0.17% in Q3 2024[16] Capital Position - The tangible common equity ratio was over 10% as of December 31, 2024, indicating strong capital position for future growth[2] - The Common Equity Tier 1 Capital Ratio was 13.06%, exceeding the minimum guideline of 6.50% for "well-capitalized" institutions[20] - Total stockholders' equity was $2.13 billion, or $17.68 per common share, down from $2.17 billion, or $17.97 per common share at the end of Q3 2024[20] - Stockholders' equity rose by 5% year-over-year to $2,156,858,000 from $2,048,335,000[38] Mergers and Acquisitions - The company is preparing for the integration of Territorial Savings Bank, expected to complete in Q1 2025, enhancing its deposit base and asset quality[2] - Hope Bancorp is in the process of merging with Territorial Bancorp Inc., with regulatory approvals pending[24] Efficiency and Ratios - The efficiency ratio improved to 65.75% for the three months ended December 31, 2024, compared to 69.67% in the previous quarter and 73.37% in the same quarter last year[32] - The diluted EPS excluding notable items for the three months ended December 31, 2024, was $0.20, down from $0.31 for the same period in 2023[51] - The return on average assets (ROA) for the three months ended December 31, 2024, was 0.57%, slightly up from 0.56% in the previous quarter and up from 0.54% in the same quarter last year[32] - The return on equity (ROE) excluding notable items for the three months ended December 31, 2024, was 4.46%, down from 7.25% in the same period last year[51]

Group 1 - Analysts project that Hope Bancorp (HOPE) will announce quarterly earnings of $0.19 per share, a decline of 40.6% year over year [1] - Revenues are expected to reach $121 million, declining 10.5% from the same quarter last year [1] - The consensus EPS estimate has not been revised over the past 30 days, indicating a stable outlook from analysts [2] Group 2 - The average prediction for 'Average Balance - Total interest earning assets' is $16.50 billion, down from $18.53 billion a year ago [5] - The consensus estimate for 'Net Interest Income' is $109.26 million, compared to $125.92 million reported in the same quarter last year [5] - Analysts estimate 'Total noninterest income' at $12.74 million, an increase from $9.28 million reported in the same quarter last year [6] Group 3 - Hope Bancorp shares have returned -1.5% over the past month, while the Zacks S&P 500 composite has changed by +2.1% [7] - With a Zacks Rank 4 (Sell), HOPE is expected to underperform the overall market in the near future [7]

Financial Performance - Net income for the third quarter of 2024 was $24.16 million, compared to $30.05 million in the same quarter of 2023, reflecting a decrease of about 19.6%[230]. - Net income for Q3 2024 was $24.2 million, a decrease of 19.6% from $30.0 million in Q3 2023[241]. - Net income for the nine months ended September 30, 2024, was $75.3 million, down 29.8% from $107.2 million for the same period in 2023[242]. - Noninterest income for Q3 2024 increased by $3.5 million, or 42.6%, totaling $11.8 million compared to $8.3 million in Q3 2023[268]. - Total noninterest income for the nine months ended September 30, 2024, was $31.2 million, a decrease of $5.1 million, or 14.1%, from $36.3 million in the same period of the prior year[270]. Asset Quality - The provision for credit losses decreased significantly to $3.28 million from $16.86 million year-over-year, indicating improved asset quality[230]. - Provision for credit losses for Q3 2024 was $3.3 million, a decrease of $13.6 million from $16.9 million in Q3 2023[263]. - The allowance for credit losses (ACL) was $153.3 million at September 30, 2024, down from $158.7 million at December 31, 2023, representing 1.13% of loans receivable[300][302]. - Nonperforming assets totaled $103.8 million at September 30, 2024, up from $45.5 million at December 31, 2023, with a nonperforming assets to total assets ratio of 0.60% compared to 0.24%[298][299]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, was $104.81 million, down from $135.38 million in the same period last year, representing a decline of approximately 22.6%[230]. - Net interest income for Q3 2024 was $104.8 million, a decrease of 22.6% from $135.4 million in Q3 2023[244]. - The net interest margin for Q3 2024 was 2.55%, a decrease of 28 basis points from 2.83% in Q3 2023[246]. - Total interest income decreased by $52.3 million, with loans contributing a decrease of $38.2 million and interest-earning cash and deposits decreasing by $18.4 million[260]. - The total interest expense decreased by $10,140 thousand, leading to a net interest income decrease of $30,569 thousand for the same period[259]. Capital Position - The tangible common equity (TCE) ratio improved to 10.08% from 7.96% year-over-year, indicating stronger capital position[230][232]. - Common equity tier 1 capital ratio was 13.07% at September 30, 2024, indicating a strong capital position[328]. - Stockholders' equity increased to $2.17 billion at September 30, 2024, up from $2.12 billion at December 31, 2023, driven by net income of $75.3 million[325]. - The company is categorized as "well capitalized" with a common equity tier 1 capital ratio of 13.07% and total capital ratio of 14.82% as of September 30, 2024[328]. Liquidity and Borrowing - Cash and cash equivalents decreased to $680.9 million at September 30, 2024, from $1.93 billion at December 31, 2023, primarily due to the payoff of $1.70 billion of FRB BTFP borrowings[286]. - Total borrowing capacity, cash and cash equivalents, and unpledged securities amounted to $7.57 billion at September 30, 2024, down from $7.66 billion at December 31, 2023[333]. - The company has $4.15 billion available to borrow from the FHLB, with $4.05 billion unused as of September 30, 2024[333]. - The liquidity management strategy focuses on maintaining sufficient funds to meet cash flow requirements arising from fluctuations in deposit levels and daily operations[331]. Operational Efficiency - The efficiency ratio for the quarter was 69.67%, up from 60.42% in the previous year, suggesting increased operational costs relative to income[231]. - Noninterest expense for Q3 2024 was $81.3 million, a decrease of $5.5 million, or 6.4%, from $86.8 million in Q3 2023[274]. - Salaries and employee benefits decreased by $6.9 million, or 13.5%, to $44.2 million in Q3 2024 from $51.0 million in Q3 2023[275]. - Salaries and employee benefits expense decreased by $24.7 million, or 15.4%, for the nine months ended September 30, 2024, compared to the same period in 2023, due to headcount reductions[277]. Shareholder Returns - The bank declared cash dividends of $0.14 per common share, consistent with the previous year[230]. - The number of common shares outstanding increased to 120,737,908 from 120,026,220 year-over-year, reflecting a slight increase in equity[230]. - The company has $35.3 million remaining under its $50 million stock repurchase plan as of September 30, 2024[326].

Financial Data and Key Metrics Changes - For Q3 2024, the company reported net income of $24.2 million or $0.20 per diluted share, with adjusted net income of $25.2 million and earnings per share of $0.21, primarily impacted by merger-related notable items [9] - Customer deposits grew 11% annualized from June 30, 2024, while loans receivable increased by 2% annualized during the same period [8] - The total capital ratio was 14.8% and the tangible common equity ratio was 10.1% as of September 30, 2024, marking the highest levels since the merger with Wilshire in 2016 [10] Business Line Data and Key Metrics Changes - Loans receivable, excluding loans held for sale, increased by $51 million from June 30, 2024, reflecting higher balances in residential mortgage and commercial loans [14] - Noninterest income rose to $11.8 million for Q3 2024, a 7% increase from the previous quarter, driven by higher gains on the sale of SBA loans [18] Market Data and Key Metrics Changes - Total deposits were stable at $14.7 billion, with a significant reduction in brokered deposits to 7% of the total mix, down from 14% a year prior [12] - The company sold $41 million of SBA loans during the quarter, contributing to the increase in noninterest income [19] Company Strategy and Development Direction - The company aims to grow market share and client relationships while generating profitable growth, supported by strong capital ratios and prudent balance sheet management [11][26] - The management is optimistic about the pending merger with Territorial Bancorp, which is expected to create significant value [31] Management's Comments on Operating Environment and Future Outlook - Management anticipates low single-digit growth in average loans and net interest income for Q4 2024, benefiting from positive loan growth and effective deposit rate management [28] - The company expects stable operating expenses and a consistent reserve coverage ratio of 113 basis points of loans as of September 30, 2024 [30] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on November 21, 2024 [11] - Nonperforming assets totaled $104 million, with a moderate net charge-off of $5.7 million for Q3 2024 [21][23] Q&A Session Summary Question: Update on loan portfolio regarding floating and fixed rates - The company reported that 45% of the loan portfolio consists of variable rate loans, with $766 million of fixed rate loans set to reprice in 2025 [33] Question: Deposit pricing strategy post-September rate cut - The company has reduced deposit costs across various accounts, with a beta of approximately 60% on adjusted rates, and average CD costs down to about 4.25% [34][40] Question: Credit quality and nonaccrual loans - Management indicated that the nonaccrual status of a relationship was due to a loan maturity, but the properties are well-secured, and they do not anticipate significant losses [38] Question: Spot yields on investment portfolio - The average spot yield on the investment portfolio was reported at 2.96%, with plans to reposition low-yielding securities [43] Question: Contribution of floating rate loans - The company clarified that the reported 40.5% of variable loans are truly floating, while 31% are hybrid loans [44]

Hope Bancorp (HOPE) reported $116.65 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 18.8%. EPS of $0.21 for the same period compares to $0.25 a year ago. The reported revenue represents a surprise of -4.12% over the Zacks Consensus Estimate of $121.67 million. With the consensus EPS estimate being $0.22, the EPS surprise was -4.55%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wa ...

Company Performance - Hope Bancorp reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.22 per share, and down from $0.25 per share a year ago, representing an earnings surprise of -4.55% [1] - The company posted revenues of $116.65 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 4.12%, and down from $143.68 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and has not been able to beat consensus revenue estimates [2] Stock Outlook - Hope Bancorp shares have added about 3.2% since the beginning of the year, underperforming the S&P 500's gain of 21.8% [3] - The current consensus EPS estimate for the coming quarter is $0.23 on revenues of $126.63 million, and for the current fiscal year, it is $0.87 on revenues of $488.53 million [7] - The estimate revisions trend for Hope Bancorp is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Zacks Industry Rank for Banks - West is currently in the bottom 44% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact the stock's performance [8]

News Release HOPE BANCORP REPORTS 2024 THIRD QUARTER FINANCIAL RESULTS LOS ANGELES – October 28, 2024 – Hope Bancorp, Inc. (the "Company") (NASDAQ: HOPE), the holding company of Bank of Hope (the "Bank"), today reported unaudited financial results for its third quarter and nine months ended September 30, 2024. For the three months ended September 30, 2024, net income totaled $24.2 million, or $0.20 per diluted common share. This compares with net income of $25.3 million, or $0.21 per diluted common share, i ...

Hope Bancorp (HOPE) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on October 28, 2024, might help the stock move higher if these key numbers are better tha ...