Hope Bancorp(US:HOPE)2026-02-25 22:12Loan Origination and Sales - The company has originated loans partially guaranteed by the SBA, including SBA 7(a) loans with a maximum gross loan amount of $5.0 million and a maximum SBA guaranteed amount of $3.75 million[21]. - The company has sold the guaranteed portion of SBA 7(a) loans in the secondary market at a premium, earning servicing fee income on the sold portion[22]. - The company funded approximately $3.10 billion in loans in 2025, with 562 CRA-reportable small business loans totaling $234.3 million[90]. Branch Operations and Community Presence - The company operates 74 branches across the United States, with a significant presence in multi-ethnic communities, including 29 branches in Hawaii and 24 in California[36]. - The Bank operates 29 branches in Hawaii following the acquisition of Territorial Savings Bank in 2025[52]. - Approximately 31% of the Bank's branches are located in low-to-moderate income areas, reflecting its commitment to community investment[90]. Financial Performance and Capital Management - The company paid off $197.1 million of convertible note principal in cash on May 15, 2023, following the exercise of put rights by most holders of its convertible notes[35]. - As of December 31, 2025, Hope Bancorp and the Bank met all Basel III Capital Rules requirements, including a common equity Tier 1 capital ratio exceeding 7.0%[56]. - The minimum capital ratios for the Bank to be considered well-capitalized include a common equity Tier 1 ratio of 6.5%, a Tier 1 ratio of 8%, and a total capital ratio of 10%[64]. Regulatory Environment - The company is subject to extensive regulation and supervision under state and federal banking laws, emphasizing capital planning and liquidity management[41]. - The Company is subject to heightened supervision and regulation due to consolidated assets exceeding $10 billion, including maintaining a Tier 1 leverage ratio of at least 5.0%[59]. - The Dodd-Frank Act requires banking organizations with consolidated assets exceeding $10 billion to perform annual stress tests[61]. Consumer Protection and Compliance - The Company is subject to numerous federal and state consumer protection statutes, which mandate specific underwriting criteria for home loans[66]. - The Bank must comply with the USA PATRIOT Act, which includes establishing anti-money laundering programs and enhanced due diligence standards[69]. - The FDIC insures customer deposits up to $250,000 per customer, and termination of the Bank's deposit insurance could lead to revocation of its charter[74]. Employee and Community Engagement - The Bank had 1,434 full-time equivalent employees as of December 31, 2025, an increase from 1,244 in 2024[87]. - The company is committed to maintaining a diverse workforce and offers professional development opportunities to enhance employee retention and satisfaction[83][85]. - The company made over $750 thousand in charitable donations in 2025, including $200 thousand to United Way for Los Angeles fire relief[90]. Financial Obligations and Assessments - Total contractual obligations and commitments as of December 31, 2025, amounted to $9.46 billion, with $7.96 billion due in less than one year[364]. - The company has commitments to fund CRA and tax credit investments totaling $36.27 million[364]. - In November 2023, the FDIC approved a special assessment rate of approximately 13.4 basis points per year, to be paid in eight quarterly installments starting Q1 2024, based on an adjusted assessment base of estimated uninsured deposits[76]. - The company recorded an expense of $691 thousand in 2024 for the special assessment, which was reversed in 2025 when the FDIC notified that the additional assessment was no longer necessary[76]. Competitive Landscape - The competitive environment includes strong competition from community, regional, and national banks, as well as non-bank financial service providers[37]. - The company's profitability is influenced by interest rate differentials, which are affected by various economic factors beyond its control[38]. - The company is subject to regulatory scrutiny, which may impact its ability to pay dividends or repurchase shares if capital requirements are not met[79].