Hope Bancorp(HOPE) - 2024 Q4 - Annual Results

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]