Hope Bancorp(US:HOPE)2023-02-28 20:34Financial Instruments and Capital Management - As of December 31, 2022, the company had issued $126.0 million in pooled trust preferred securities through nine wholly-owned subsidiary grantor trusts[35] - The company issued $217.5 million in aggregate principal amount of 2.00% convertible senior notes maturing on May 15, 2038, as part of its share repurchase plan[36] - The company is subject to capital adequacy requirements based on the Basel III Capital Rules, effective January 1, 2015[52] - Hope Bancorp and the Bank met all Basel III Capital Rules requirements as of December 31, 2022, including a common equity Tier 1 capital ratio of 7.0%[55] - The minimum capital ratios under Basel III include 4.5% common equity Tier 1 to risk-weighted assets and 6.0% Tier 1 capital to risk-weighted assets[54] - The capital conservation buffer of 2.5% is required above the regulatory minimum capital ratios, impacting the ability to pay dividends and repurchase shares[54] - The Bank's ability to pay dividends is subject to restrictions under the Delaware General Corporation Law and the FRB's policies[74] - The federal banking agencies have the authority to impose higher capital ratios and restrictions on the Bank if its financial condition is deemed unsatisfactory[73] Regulatory Compliance and Supervision - The company is subject to extensive regulation and supervision under state and federal banking laws, emphasizing capital planning and liquidity management[41] - The company has not elected financial holding company status, limiting its engagement in broader financial activities[46] - The company must seek approval from the Federal Reserve Board prior to acquiring significant assets or controlling shares of other banks[47] - The Dodd-Frank Act requires banks with consolidated assets over $10 billion to establish board-level risk committees and perform annual stress tests[57] - The Bank must comply with numerous federal and state consumer protection statutes, which regulate customer interactions and impose penalties for non-compliance[62][63] Deposits and Funding Sources - FDIC-insured deposits serve as the primary source of funds for the company, which actively manages its cost of funds in response to market conditions[32] - The company attracts both short-term and long-term deposits through a wide range of products, including personal and business checking accounts, savings accounts, and retirement accounts[31] - The company may borrow from the Federal Home Loan Bank of San Francisco and the Federal Reserve Bank to manage liquidity needs[33] - The FDIC insures customer deposits up to $250,000 per customer, and the termination of deposit insurance could lead to the revocation of the Bank's charter[69] Community Engagement and Social Responsibility - The Bank received a "Satisfactory" rating in its most recent Community Reinvestment Act performance evaluation released by the FDIC in 2021[64] - The company funded approximately $4.45 billion in loans in 2022[86] - The company had approximately $315.8 million in CRA-reportable small business lending in 2022[86] - The company awarded 60 students grants of $1,500 each in 2022, contributing over $2.3 million to the Hope Scholarship Foundation since its establishment in 2001[86] - The company conducted nearly 731 hours of CRA-reportable volunteer hours in 2022[86] - The company has invested in affordable housing partnership investments, CRA investments, and CDFI investments[86] - The company has commitments to fund investments in affordable housing partnerships totaling $11.79 million[349] - The company launched its initial Environmental, Social and Governance (ESG) report in 2022, outlining its ESG progress and compliance[85] Workforce and Employment - As of December 31, 2022, the company had 1,549 full-time equivalent employees, an increase from 1,476 employees at the end of 2021[83] - The company has a competitive benefits package that includes medical, dental, and vision healthcare, 401(k) benefits, and tuition assistance[82]