Hope Bancorp(US:HOPE)2025-10-28 17:30Financial Data and Key Metrics Changes - Net income for Q3 2025 totaled $31 million, up 28% year over year from $24 million in Q3 2024, and improved from a net loss of $28 million in Q2 2025 [6][7] - Net interest income reached $127 million, an increase of 8% from the prior quarter and up 21% from Q3 2024 [10] - Net interest margin expanded by 20 basis points to 2.89% for Q3 2025, marking the best linked quarter expansion since 2012 [7][10] Business Line Data and Key Metrics Changes - Loan growth was observed across all major segments: commercial and industrial loans, commercial real estate loans, and residential mortgage loans [7][9] - Gross loans totaled $14.6 billion, up 1.2% quarter over quarter, equivalent to 5% annualized growth [8][9] - Non-interest income showed quarter-over-quarter growth in service fees, international banking fees, and wire transfer fees [11] Market Data and Key Metrics Changes - Deposits totaled $15.8 billion, reflecting a 1% decrease from $15.9 billion as of June 30, primarily due to a reduction in brokered deposits [8] - Non-interest-bearing deposits increased to $3.5 billion, up 1% quarter over quarter [8] Company Strategy and Development Direction - The company is focused on strengthening its deposit franchise and deepening primary banking relationships while optimizing deposit costs [8][9] - Continued investments in talent are aimed at driving sustainable growth and enhancing corporate and commercial banking capabilities [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving high single-digit loan growth in 2025 and expects net interest income growth of approximately 10% [16] - The company anticipates non-interest income growth of approximately 30% for 2025, excluding notable items from the second quarter [16] Other Important Information - The board declared a quarterly common stock dividend of $0.14 per share, payable on November 21, 2025 [8] - The allowance for credit losses totaled $152.5 million at September 30, 2025, with a coverage ratio of 1.05% of loans receivable [14] Q&A Session Summary Question: Spot rate on deposits and average margin for September - The spot rate for total deposits was 2.82% and for interest-bearing deposits was 3.62%, with the average margin for September at 2.96% [20] Question: Update on Territorial Bancorp acquisition - Operations are being stabilized and expanded, with incremental cost savings being realized, but no significant updates reported this quarter [21] Question: Purchase accounting impact this quarter - Loan accretion for the quarter was $5 million, up from $4 million in the previous quarter [24][25] Question: Maturing CDs in the fourth quarter - There are $2.3 billion of maturing CDs at an average rate of 4.08% [31] Question: Expense side and hiring process - New team members are being added in strategic segments, with a focus on strengthening existing capabilities and optimistic growth prospects [39][41] Question: Impact of government shutdown on SBA loan sales - The SBA has suspended acceptance of new loan applications, but existing loans with approval numbers will proceed as usual [44][45] Question: Challenges with non-accrual loans in commercial real estate - Non-performing loans have been relatively flat, with ongoing efforts to resolve problem credits [46] Question: Loan growth outlook and impact of potential rate decreases - A strong loan pipeline is expected to support growth, with improvements in commercial and industrial loans [51]