Hope Bancorp(US:HOPE)2026-01-27 18:32Financial Data and Key Metrics Changes - The company reported a net income of $34 million for Q4 2025, representing a 42% increase quarter-over-quarter, driven by growth in net interest income, customer fee income, lower provision for credit losses, and a lower tax expense [4] - Net interest income totaled $127 million for Q4 2025, an increase of 1% from the prior quarter and up 25% from Q4 2024 [6][8] - Deposits totaled $15.6 billion, up 9% year-over-year, primarily due to the Territorial acquisition, but down 1% from the previous quarter [7] Business Line Data and Key Metrics Changes - Loan production volumes improved by 39% in Q4 2025 compared to the previous year, with gross loans up 8% year-over-year [6] - Non-interest income saw growth across several fee income lines, with customer-level swap fees increasing by 270% from $1.6 million in 2024 to $6 million in 2025 [8][9] - Non-interest expense totaled $99 million in Q4 2025, up from $97 million in Q3, primarily due to compensation-related costs [9][10] Market Data and Key Metrics Changes - The criticized loan ratio improved to 2.39% of loans at December 31, 2025, down from 2.56% at September 30, 2025, and down from 3.30% at December 31, 2024 [11] - The allowance for credit losses totaled $157 million at December 31, 2025, with an allowance coverage ratio of 1.07% of loans receivable [12] Company Strategy and Development Direction - The company aims to build a durable deposit base by expanding primary customer relationships and improving funding efficiency [7] - The strategic focus includes enhancing fee income execution to diversify revenue streams and investing in people and capabilities to support disciplined growth [5][8] - The company plans to achieve a return on average assets of approximately 1.2% and targets loan growth in the high single-digit percentage range [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing growth momentum into 2026, supported by hiring in frontline teams and expected revenue growth driven by strong fee income [13][14] - The outlook for year-over-year pre-provision net revenue growth is anticipated to be in the range of 25%-30% for 2026 [14] - Management noted that the integration of Territorial Bancorp in Hawaii has been successful, with no significant deposit fluctuations reported [35] Other Important Information - The board declared a quarterly common stock dividend of $0.14 per share, payable on or around February 20, 2026 [5] - The company reinstated a share purchase authorization with $35 million available for buybacks [6] Q&A Session Summary Question: Can I quickly just get the PAA accretion number? - The company does not disclose that number separately [18] Question: Can I get your thoughts on deposit costs from here in terms of pricing? - The spot rate on total deposits was 2.68% as of December 31, 2025, and the company expects continued downward repricing of the CD portfolio [20] Question: What does the CD repricing look like going forward in 2026? - The company is looking at a repricing of $6.3 billion in 2026, with new CDs coming in at a weighted average rate of 3.75-3.80% [27][30] Question: Can you provide an update on operations in Hawaii? - The focus in Hawaii was on successful integration and resource addition, with positive reception from the customer base [35]