Hope Bancorp(HOPE)2025-02-26 22:09Financial Instruments and Capital Management - The company has issued 197.1 million of convertible note principal in cash on May 15, 2023, following the exercise of put rights by most holders[36]. - The Bank is subject to capital adequacy requirements under the Basel III Capital Rules, which became effective on January 1, 2015[53]. - The minimum capital ratios under the Basel III Capital Rules include a common equity Tier 1 capital ratio of 7.0%, a Tier 1 capital ratio of 8.5%, and a total capital ratio of 10.5%[56]. - As of December 31, 2024, Hope Bancorp and the Bank met all requirements under the Basel III Capital Rules, exceeding the minimum percentage requirements to be deemed "well-capitalized"[56]. - The Bank's ability to pay dividends is subject to restrictions under Delaware law and the FRB's policy, which requires maintaining adequate capital ratios[79]. Loan Products and SBA Lending - The maximum gross loan amount for SBA loans to any one small business borrower is 3.75 million[23]. - The company has been designated as an SBA Preferred Lender, facilitating a more efficient marketing and approval process for SBA loans[27]. - The company resumed sales of the guaranteed portion of its SBA 7(a) loans during the 2024 second quarter as secondary market premium rates increased[24]. - The company offers SBA 504 loans for purchasing owner-occupied commercial real estate or long-term capital equipment, typically extended for up to 20 years[25]. - The company funded approximately 196.2 million[88]. Branch Network and Community Engagement - The company has 46 branches across the United States, with 25 located in California and nine in New York and New Jersey[37]. - Approximately 37% of the Bank's branches are located in low-to-moderate income areas, reflecting its commitment to community investment[88]. - The company awarded 60 scholarships of 3.0 million to the Hope Scholarship Foundation since its establishment[88]. - The company is committed to funding affordable housing partnerships and has made investments in CRA and tax credit projects[347]. Regulatory Compliance and Risk Management - Hope Bancorp has not elected financial holding company status and does not engage in activities determined by the FRB to be financial in nature[47]. - The Bank received a "Satisfactory" rating in the most recent public disclosure of CRA performance evaluation released by the FDIC in 2024[67]. - The Dodd-Frank Act requires banking organizations with consolidated assets exceeding 10 billion[81]. Financial Performance and Economic Conditions - The company primarily attracts deposits through a wide range of products and services, including personal and business checking accounts, savings accounts, and time deposit accounts[30]. - The company’s investment portfolio aims to manage interest rate risk while generating adequate interest income[29]. - The company’s profitability is significantly influenced by interest rate differentials and economic conditions, which are beyond its control[39]. - The FDIC approved a special assessment rate of approximately 13.4 basis points per year, starting in Q1 2024, based on estimated uninsured deposits as of December 31, 2022[76]. - The company recorded expenses of 4.0 million in 2023 related to the special assessment[76]. - As of December 31, 2024, total contractual obligations and commitments amounted to 7.58 billion due within one year[348]. - The Bank had 1,244 full-time equivalent employees as of December 31, 2024, with no union representation[86].