(Exact name of registrant as specified in its charter) |
(State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
, | par value $0.001 per share | |||
(Title of class) | (Trading Symbol) | (Name of exchange on which registered) |
Exhibit No. | Description of Exhibit | |
99.1 | ||
99.2 | ||
99.3 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
HOPE BANCORP, INC. | |||
Date: January 23, 2020 | By: | /s/ Kevin S. Kim | |
Kevin S. Kim | |||
Chairman, President and Chief Executive Officer |
Exhibit No. | Description of Exhibit | |
99.1 | ||
99.2 | ||
99.3 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
• | Record new loan originations of $847.6 million led to more than a 1% increase in loans receivable quarter-over-quarter, or 6% annualized. |
• | Deposit initiatives contributed to a 13 basis point reduction quarter-over-quarter in total deposit costs, the first quarter-over-quarter decrease since Q4 2016. |
• | Total deposits increased 2% quarter-over-quarter, reflecting a continuation of a favorable mix-shift to core deposits. |
• | Total noninterest expenses well contained and remain at 1.85% of average assets. |
• | Repurchased 943,094 shares at an average price of $14.62 during the 2019 fourth quarter. |
(dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | ||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | |||||||||
Net income | $ | 43,009 | $ | 42,592 | $ | 44,449 | |||||
Diluted earnings per share | $ | 0.34 | $ | 0.34 | $ | 0.35 | |||||
Net interest income before provision for loan losses | $ | 113,508 | $ | 116,258 | $ | 121,893 | |||||
Net interest margin | 3.16 | % | 3.25 | % | 3.41 | % | |||||
Noninterest income | $ | 12,979 | $ | 12,995 | $ | 11,614 | |||||
Noninterest expense | $ | 70,429 | $ | 69,995 | $ | 70,189 | |||||
Net loans receivable | $ | 12,181,863 | $ | 12,010,800 | $ | 12,005,558 | |||||
Deposits | $ | 12,527,364 | $ | 12,234,750 | $ | 12,155,656 | |||||
Nonaccrual loans (1) (2) | $ | 54,785 | $ | 42,235 | $ | 53,286 | |||||
Nonperforming loans to loans receivable (1) (2) | 0.80 | % | 0.64 | % | 0.87 | % | |||||
ALLL to loans receivable | 0.77 | % | 0.78 | % | 0.77 | % | |||||
ALLL to nonaccrual loans (1) (2) | 171.84 | % | 222.28 | % | 173.70 | % | |||||
ALLL to nonperforming assets (1) (2) | 77.08 | % | 97.06 | % | 81.92 | % | |||||
Provision for loan losses | $ | 1,000 | $ | 2,100 | $ | 2,800 | |||||
Net charge offs | $ | 738 | $ | 1,822 | $ | 872 | |||||
Return on average assets (“ROA”) | 1.13 | % | 1.12 | % | 1.17 | % | |||||
Return on average equity (“ROE”) | 8.46 | % | 8.47 | % | 9.42 | % | |||||
Return on average common tangible equity (“ROTCE”) (3) | 11.04 | % | 11.11 | % | 12.62 | % | |||||
Noninterest expense / average assets | 1.85 | % | 1.85 | % | 1.85 | % | |||||
Efficiency ratio | 55.68 | % | 54.15 | % | 52.57 | % |
(dollars in thousands) (unaudited) | 12/31/2019 | 9/30/2019 | 12/31/2018 | |||||
Loans on nonaccrual status (1) | $ | 54,785 | $ | 42,235 | $ | 53,286 | ||
Delinquent loans 90 days or more on accrual status (2) | 7,547 | 398 | 1,529 | |||||
Accruing troubled debt restructured loans | 35,709 | 34,717 | 50,410 | |||||
Total nonperforming loans | 98,041 | 77,350 | 105,225 | |||||
Other real estate owned | 24,091 | 19,374 | 7,754 | |||||
Total nonperforming assets | $ | 122,132 | $ | 96,724 | $ | 112,979 |
(1) | Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $28.1 million, $37.3 million, and $29.2 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
(2) | Excludes Acquired Credit Impaired Loans totaling $13.2 million, $15.5 million, and $14.1 million, at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
(dollars in thousands) (unaudited) | 12/31/2019 | 9/30/2019 | 12/31/2018 | |||||
Special Mention (3) | $ | 141,452 | $ | 139,848 | $ | 163,089 | ||
Classified (3) | 259,291 | 268,622 | 318,327 | |||||
Criticized | $ | 400,743 | $ | 408,470 | $ | 481,416 |
(3) | Balances include purchased loans which were marked to fair value on the date of acquisition. |
(unaudited) | 12/31/2019 | 9/30/2019 | 12/31/2018 | Minimum Guideline for “Well-Capitalized” Bank | |||
Common Equity Tier 1 Capital | 11.76% | 11.89% | 11.44% | 6.50% | |||
Tier 1 Leverage Ratio | 11.22% | 11.18% | 10.55% | 5.00% | |||
Tier 1 Risk-Based Ratio | 12.51% | 12.65% | 12.21% | 8.00% | |||
Total Risk-Based Ratio | 13.23% | 13.38% | 12.94% | 10.00% |
(unaudited) | 12/31/2019 | 9/30/2019 | 12/31/2018 | ||
Tangible common equity per share (1) | $12.40 | $12.27 | $11.25 | ||
Tangible common equity to tangible assets (2) | 10.27% | 10.43% | 9.61% |
(1) | Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Both tangible common equity and tangible common equity per share are non-GAAP financial measures. A reconciliation of the Company’s total stockholders’ equity to tangible common equity is provided in the accompanying financial information on Table Page 7. |
(2) | Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity to tangible assets is a non-GAAP financial measure. A reconciliation of the Company’s total assets to tangible assets is provided in the accompanying financial information on Table Page 7. |
Alex Ko EVP & Chief Financial Officer 213-427-6560 alex.ko@bankofhope.com | Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 angie.yang@bankofhope.com |
Assets | 12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | ||||||||||||
Cash and due from banks | $ | 698,567 | $ | 549,356 | 27 | % | $ | 459,606 | 52 | % | |||||||
Securities available for sale, at fair value | 1,715,987 | 1,772,322 | (3 | )% | 1,846,265 | (7 | )% | ||||||||||
Federal Home Loan Bank (“FHLB”) stock and other investments | 97,659 | 98,848 | (1 | )% | 104,705 | (7 | )% | ||||||||||
Loans held for sale, at the lower of cost or fair value | 54,271 | 29,627 | 83 | % | 25,128 | 116 | % | ||||||||||
Loans receivable | 12,276,007 | 12,104,682 | 1 | % | 12,098,115 | 1 | % | ||||||||||
Allowance for loan losses | (94,144 | ) | (93,882 | ) | — | % | (92,557 | ) | (2 | )% | |||||||
Net loans receivable | 12,181,863 | 12,010,800 | 1 | % | 12,005,558 | 1 | % | ||||||||||
Accrued interest receivable | 30,772 | 29,743 | 3 | % | 32,225 | (5 | )% | ||||||||||
Premises and equipment, net | 52,012 | 52,604 | (1 | )% | 53,794 | (3 | )% | ||||||||||
Bank owned life insurance | 76,339 | 75,968 | — | % | 75,219 | 1 | % | ||||||||||
Goodwill | 464,450 | 464,450 | — | % | 464,450 | — | % | ||||||||||
Servicing assets | 16,417 | 17,865 | (8 | )% | 23,132 | (29 | )% | ||||||||||
Other intangible assets, net | 11,833 | 12,390 | (4 | )% | 14,061 | (16 | )% | ||||||||||
Other assets | 267,270 | 265,905 | 1 | % | 201,809 | 32 | % | ||||||||||
Total assets | $ | 15,667,440 | $ | 15,379,878 | 2 | % | $ | 15,305,952 | 2 | % | |||||||
Liabilities | |||||||||||||||||
Deposits | $ | 12,527,364 | $ | 12,234,750 | 2 | % | $ | 12,155,656 | 3 | % | |||||||
FHLB advances | 625,000 | 625,000 | — | % | 821,280 | (24 | )% | ||||||||||
Convertible notes, net | 199,458 | 198,211 | 1 | % | 194,543 | 3 | % | ||||||||||
Subordinated debentures | 103,035 | 102,755 | — | % | 101,929 | 1 | % | ||||||||||
Accrued interest payable | 33,810 | 38,197 | (11 | )% | 31,374 | 8 | % | ||||||||||
Other liabilities | 142,762 | 149,681 | (5 | )% | 97,959 | 46 | % | ||||||||||
Total liabilities | 13,631,429 | 13,348,594 | 2 | % | 13,402,741 | 2 | % | ||||||||||
Stockholders’ Equity | |||||||||||||||||
Common stock, $0.001 par value | 136 | 136 | — | % | 136 | — | % | ||||||||||
Capital surplus | 1,428,066 | 1,426,666 | — | % | 1,423,405 | — | % | ||||||||||
Retained earnings | 762,480 | 737,209 | 3 | % | 662,375 | 15 | % | ||||||||||
Treasury stock, at cost | (163,820 | ) | (150,000 | ) | (9 | )% | (150,000 | ) | (9 | )% | |||||||
Accumulated other comprehensive gain (loss) | 9,149 | 17,273 | (47 | )% | (32,705 | ) | 128 | % | |||||||||
Total stockholders’ equity | 2,036,011 | 2,031,284 | — | % | 1,903,211 | 7 | % | ||||||||||
Total liabilities and stockholders’ equity | $ | 15,667,440 | $ | 15,379,878 | 2 | % | $ | 15,305,952 | 2 | % | |||||||
Common stock shares - authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||||||
Common stock shares - outstanding | 125,756,543 | 126,697,925 | 126,639,912 | ||||||||||||||
Treasury stock shares | 9,945,547 | 9,002,453 | 9,002,453 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | 12/31/2019 | 12/31/2018 | % change | |||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Interest and fees on loans | $ | 152,795 | $ | 158,115 | (3 | )% | $ | 156,606 | (2 | )% | $ | 627,673 | $ | 594,103 | 6 | % | ||||||||||||
Interest on securities | 10,737 | 11,373 | (6 | )% | 12,385 | (13 | )% | 46,295 | 45,342 | 2 | % | |||||||||||||||||
Interest on federal funds sold and other investments | 2,241 | 2,929 | (23 | )% | 3,035 | (26 | )% | 10,818 | 10,727 | 1 | % | |||||||||||||||||
Total interest income | 165,773 | 172,417 | (4 | )% | 172,026 | (4 | )% | 684,786 | 650,172 | 5 | % | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Interest on deposits | 45,428 | 49,057 | (7 | )% | 42,477 | 7 | % | 190,158 | 134,958 | 41 | % | |||||||||||||||||
Interest on other borrowings and convertible notes | 6,837 | 7,102 | (4 | )% | 7,656 | (11 | )% | 28,033 | 27,287 | 3 | % | |||||||||||||||||
Total interest expense | 52,265 | 56,159 | (7 | )% | 50,133 | 4 | % | 218,191 | 162,245 | 34 | % | |||||||||||||||||
Net interest income before provision for loan losses | 113,508 | 116,258 | (2 | )% | 121,893 | (7 | )% | 466,595 | 487,927 | (4 | )% | |||||||||||||||||
Provision for loan losses | 1,000 | 2,100 | (52 | )% | 2,800 | (64 | )% | 7,300 | 14,900 | (51 | )% | |||||||||||||||||
Net interest income after provision for loan losses | 112,508 | 114,158 | (1 | )% | 119,093 | (6 | )% | 459,295 | 473,027 | (3 | )% | |||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Service fees on deposit accounts | 4,510 | 4,690 | (4 | )% | 4,568 | (1 | )% | 17,933 | 18,551 | (3 | )% | |||||||||||||||||
Net gains on sales of SBA loans | — | — | — | % | 447 | (100 | )% | — | 9,708 | (100 | )% | |||||||||||||||||
Net gains on sales of other loans | 1,876 | 804 | 133 | % | 381 | 392 | % | 4,487 | 2,485 | 81 | % | |||||||||||||||||
Net gains on sales of securities available for sale | — | 153 | (100 | )% | — | — | % | 282 | — | 100 | % | |||||||||||||||||
Other income and fees | 6,593 | 7,348 | (10 | )% | 6,218 | 6 | % | 26,981 | 29,436 | (8 | )% | |||||||||||||||||
Total noninterest income | 12,979 | 12,995 | — | % | 11,614 | 12 | % | 49,683 | 60,180 | (17 | )% | |||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 39,841 | 41,607 | (4 | )% | 36,594 | 9 | % | 161,174 | 153,523 | 5 | % | |||||||||||||||||
Occupancy | 7,516 | 7,703 | (2 | )% | 7,877 | (5 | )% | 30,735 | 30,371 | 1 | % | |||||||||||||||||
Furniture and equipment | 4,260 | 3,851 | 11 | % | 3,448 | 24 | % | 15,583 | 14,902 | 5 | % | |||||||||||||||||
Advertising and marketing | 2,462 | 2,377 | 4 | % | 2,392 | 3 | % | 9,146 | 9,414 | (3 | )% | |||||||||||||||||
Data processing and communications | 2,416 | 2,821 | (14 | )% | 3,650 | (34 | )% | 10,780 | 14,232 | (24 | )% | |||||||||||||||||
Professional fees | 5,948 | 5,241 | 13 | % | 4,756 | 25 | % | 22,528 | 16,286 | 38 | % | |||||||||||||||||
FDIC assessment | 772 | — | 100 | % | 1,406 | (45 | )% | 3,882 | 6,572 | (41 | )% | |||||||||||||||||
Credit related expenses | 1,717 | 1,031 | 67 | % | 507 | 239 | % | 4,975 | 2,863 | 74 | % | |||||||||||||||||
OREO (income) expense, net | (122 | ) | (743 | ) | (84 | )% | 302 | N/A | (934 | ) | 187 | N/A | ||||||||||||||||
Branch restructuring costs | — | — | — | % | 1,674 | (100 | )% | — | 1,674 | (100 | )% | |||||||||||||||||
Other | 5,619 | 6,107 | (8 | )% | 7,583 | (26 | )% | 24,759 | 27,702 | (11 | )% | |||||||||||||||||
Total noninterest expense | 70,429 | 69,995 | 1 | % | 70,189 | — | % | 282,628 | 277,726 | 2 | % | |||||||||||||||||
Income before income taxes | 55,058 | 57,158 | (4 | )% | 60,518 | (9 | )% | 226,350 | 255,481 | (11 | )% | |||||||||||||||||
Income tax provision | 12,049 | 14,566 | (17 | )% | 16,069 | (25 | )% | 55,310 | 65,892 | (16 | )% | |||||||||||||||||
Net income | $ | 43,009 | $ | 42,592 | 1 | % | $ | 44,449 | (3 | )% | $ | 171,040 | $ | 189,589 | (10 | )% | ||||||||||||
Earnings per Common Share: | ||||||||||||||||||||||||||||
Basic | $ | 0.34 | $ | 0.34 | $ | 0.35 | $ | 1.35 | $ | 1.44 | ||||||||||||||||||
Diluted | $ | 0.34 | $ | 0.34 | $ | 0.35 | $ | 1.35 | $ | 1.44 | ||||||||||||||||||
Average Shares Outstanding: | ||||||||||||||||||||||||||||
Basic | 126,410,924 | 126,685,921 | 128,115,170 | 126,598,564 | 131,716,726 | |||||||||||||||||||||||
Diluted | 126,835,273 | 127,007,469 | 128,261,998 | 126,875,320 | 131,954,192 |
At or for the Three Months Ended (Annualized) | At or for the Twelve Months Ended | |||||||||||||
Profitability measures: | 12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | |||||||||
ROA | 1.13 | % | 1.12 | % | 1.17 | % | 1.12 | % | 1.29 | % | ||||
ROE | 8.46 | % | 8.47 | % | 9.42 | % | 8.63 | % | 9.92 | % | ||||
Return on average tangible equity 1 | 11.04 | % | 11.11 | % | 12.62 | % | 11.37 | % | 13.25 | % | ||||
Net interest margin | 3.16 | % | 3.25 | % | 3.41 | % | 3.27 | % | 3.53 | % | ||||
Efficiency ratio | 55.68 | % | 54.15 | % | 52.57 | % | 54.74 | % | 50.67 | % | ||||
Noninterest expense / average assets | 1.85 | % | 1.85 | % | 1.85 | % | 1.86 | % | 1.88 | % | ||||
1 Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. | ||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | ||||||||||||||||||||||||||||||
Interest | Annualized | Interest | Annualized | Interest | Annualized | |||||||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 12,036,477 | $ | 152,795 | 5.04 | % | $ | 11,911,658 | $ | 158,115 | 5.27 | % | $ | 11,935,109 | $ | 156,606 | 5.21 | % | ||||||||||||||
Securities available for sale | 1,755,887 | 10,737 | 2.43 | % | 1,798,239 | 11,373 | 2.51 | % | 1,835,218 | 12,385 | 2.68 | % | ||||||||||||||||||||
FHLB stock and other investments | 463,615 | 2,241 | 1.92 | % | 482,952 | 2,929 | 2.41 | % | 431,901 | 3,035 | 2.79 | % | ||||||||||||||||||||
Total interest earning assets | $ | 14,255,979 | $ | 165,773 | 4.61 | % | $ | 14,192,849 | $ | 172,417 | 4.82 | % | $ | 14,202,228 | $ | 172,026 | 4.81 | % | ||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Demand, interest bearing | $ | 3,682,300 | $ | 14,924 | 1.61 | % | $ | 3,450,749 | $ | 15,802 | 1.82 | % | $ | 3,127,598 | $ | 12,425 | 1.58 | % | ||||||||||||||
Savings | 265,008 | 748 | 1.12 | % | 252,780 | 675 | 1.06 | % | 225,746 | 537 | 0.94 | % | ||||||||||||||||||||
Time deposits | 5,148,092 | 29,756 | 2.29 | % | 5,368,753 | 32,580 | 2.41 | % | 5,626,355 | 29,515 | 2.08 | % | ||||||||||||||||||||
Total interest bearing deposits | 9,095,400 | 45,428 | 1.98 | % | 9,072,282 | 49,057 | 2.15 | % | 8,979,699 | 42,477 | 1.88 | % | ||||||||||||||||||||
FHLB advances & fed funds purchased | 608,052 | 2,921 | 1.91 | % | 632,500 | 3,112 | 1.95 | % | 824,995 | 3,674 | 1.77 | % | ||||||||||||||||||||
Convertible notes, net | 198,669 | 2,334 | 4.60 | % | 197,410 | 2,322 | 4.60 | % | 193,749 | 2,299 | 4.64 | % | ||||||||||||||||||||
Subordinated debentures | 98,972 | 1,582 | 6.25 | % | 98,690 | 1,668 | 6.61 | % | 97,856 | 1,683 | 6.73 | % | ||||||||||||||||||||
Total interest bearing liabilities | 10,001,093 | $ | 52,265 | 2.07 | % | 10,000,882 | $ | 56,159 | 2.23 | % | 10,096,299 | $ | 50,133 | 1.97 | % | |||||||||||||||||
Noninterest bearing demand deposits | 2,999,048 | 2,958,233 | 3,018,672 | |||||||||||||||||||||||||||||
Total funding liabilities/cost of funds | $ | 13,000,141 | 1.60 | % | $ | 12,959,115 | 1.72 | % | $ | 13,114,971 | 1.52 | % | ||||||||||||||||||||
Net interest income/net interest spread | $ | 113,508 | 2.54 | % | $ | 116,258 | 2.59 | % | $ | 121,893 | 2.84 | % | ||||||||||||||||||||
Net interest margin | 3.16 | % | 3.25 | % | 3.41 | % | ||||||||||||||||||||||||||
Cost of deposits: | ||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 2,999,048 | $ | — | — | % | $ | 2,958,233 | $ | — | — | % | $ | 3,018,672 | $ | — | — | % | ||||||||||||||
Interest bearing deposits | 9,095,400 | 45,428 | 1.98 | % | 9,072,282 | 49,057 | 2.15 | % | 8,979,699 | 42,477 | 1.88 | % | ||||||||||||||||||||
Total deposits | $ | 12,094,448 | $ | 45,428 | 1.49 | % | $ | 12,030,515 | $ | 49,057 | 1.62 | % | $ | 11,998,371 | $ | 42,477 | 1.40 | % |
Twelve Months Ended | |||||||||||||||||||||
12/31/2019 | 12/31/2018 | ||||||||||||||||||||
Interest | Interest | ||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||
Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||
INTEREST EARNING ASSETS: | |||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 11,998,675 | $ | 627,673 | 5.23 | % | $ | 11,547,022 | $ | 594,103 | 5.15 | % | |||||||||
Securities available for sale | 1,796,412 | 46,295 | 2.58 | % | 1,772,080 | 45,342 | 2.56 | % | |||||||||||||
FHLB stock and other investments | 453,452 | 10,818 | 2.39 | % | 487,922 | 10,727 | 2.20 | % | |||||||||||||
Total interest earning assets | $ | 14,248,539 | $ | 684,786 | 4.81 | % | $ | 13,807,024 | $ | 650,172 | 4.71 | % | |||||||||
INTEREST BEARING LIABILITIES: | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Demand, interest bearing | $ | 3,319,556 | $ | 57,731 | 1.74 | % | $ | 3,276,815 | $ | 43,252 | 1.32 | % | |||||||||
Savings | 241,968 | 2,596 | 1.07 | % | 229,608 | 1,889 | 0.82 | % | |||||||||||||
Time deposits | 5,556,983 | 129,831 | 2.34 | % | 5,107,698 | 89,817 | 1.76 | % | |||||||||||||
Total interest bearing deposits | 9,118,507 | 190,158 | 2.09 | % | 8,614,121 | 134,958 | 1.57 | % | |||||||||||||
FHLB advances & fed funds purchased | 688,652 | 12,031 | 1.75 | % | 870,124 | 15,127 | 1.74 | % | |||||||||||||
Convertible notes, net | 196,835 | 9,264 | 4.64 | % | 123,040 | 5,797 | 4.65 | % | |||||||||||||
Subordinated debentures | 98,551 | 6,738 | 6.74 | % | 97,455 | 6,363 | 6.44 | % | |||||||||||||
Total interest bearing liabilities | 10,102,545 | $ | 218,191 | 2.16 | % | 9,704,740 | $ | 162,245 | 1.67 | % | |||||||||||
Noninterest bearing demand deposits | 2,948,212 | 3,014,056 | |||||||||||||||||||
Total funding liabilities/cost of funds | $ | 13,050,757 | 1.67 | % | $ | 12,718,796 | 1.28 | % | |||||||||||||
Net interest income/net interest spread | $ | 466,595 | 2.65 | % | $ | 487,927 | 3.04 | % | |||||||||||||
Net interest margin | 3.27 | % | 3.53 | % | |||||||||||||||||
Cost of deposits: | |||||||||||||||||||||
Noninterest bearing demand deposits | $ | 2,948,212 | $ | — | — | % | $ | 3,014,056 | $ | — | — | % | |||||||||
Interest bearing deposits | 9,118,507 | 190,158 | 2.09 | % | 8,614,121 | 134,958 | 1.57 | % | |||||||||||||
Total deposits | $ | 12,066,719 | $ | 190,158 | 1.58 | % | $ | 11,628,177 | $ | 134,958 | 1.16 | % |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
AVERAGE BALANCES: | 12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | 12/31/2019 | 12/31/2018 | % change | ||||||||||||||||||||
Loans receivable, including loans held for sale | $ | 12,036,477 | $ | 11,911,658 | 1 | % | $ | 11,935,109 | 1 | % | $ | 11,998,675 | $ | 11,547,022 | 4 | % | ||||||||||||
Investments | 2,219,502 | 2,281,191 | (3 | )% | 2,267,119 | (2 | )% | 2,249,864 | 2,260,002 | — | % | |||||||||||||||||
Interest earning assets | 14,255,979 | 14,192,849 | — | % | 14,202,228 | — | % | 14,248,539 | 13,807,024 | 3 | % | |||||||||||||||||
Total assets | 15,228,488 | 15,154,661 | — | % | 15,152,946 | — | % | 15,214,412 | 14,749,166 | 3 | % | |||||||||||||||||
Interest bearing deposits | 9,095,400 | 9,072,282 | — | % | 8,979,699 | 1 | % | 9,118,507 | 8,614,121 | 6 | % | |||||||||||||||||
Interest bearing liabilities | 10,001,093 | 10,000,882 | — | % | 10,096,299 | (1 | )% | 10,102,545 | 9,704,740 | 4 | % | |||||||||||||||||
Noninterest bearing demand deposits | 2,999,048 | 2,958,233 | 1 | % | 3,018,672 | (1 | )% | 2,948,212 | 3,014,056 | (2 | )% | |||||||||||||||||
Stockholders’ equity | 2,034,231 | 2,010,458 | 1 | % | 1,888,053 | 8 | % | 1,981,811 | 1,910,224 | 4 | % | |||||||||||||||||
Net interest earning assets | 4,254,886 | 4,191,967 | 2 | % | 4,105,929 | 4 | % | 4,145,994 | 4,102,284 | 1 | % | |||||||||||||||||
LOAN PORTFOLIO COMPOSITION: | 12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | |||||||||||||||||||||||
Commercial loans | $ | 2,719,210 | $ | 2,643,836 | 3 | % | $ | 2,324,820 | 17 | % | ||||||||||||||||||
Real estate loans | 8,664,965 | 8,587,943 | 1 | % | 8,721,600 | (1 | )% | |||||||||||||||||||||
Consumer and other loans | 889,090 | 870,734 | 2 | % | 1,051,486 | (15 | )% | |||||||||||||||||||||
Loans outstanding | 12,273,265 | 12,102,513 | 1 | % | 12,097,906 | 1 | % | |||||||||||||||||||||
Unamortized deferred loan fees - net of costs | 2,742 | 2,169 | 26 | % | 209 | 1,212 | % | |||||||||||||||||||||
Loans, net of deferred loan fees and costs | 12,276,007 | 12,104,682 | 1 | % | 12,098,115 | 1 | % | |||||||||||||||||||||
Allowance for loan losses | (94,144 | ) | (93,882 | ) | — | % | (92,557 | ) | (2 | )% | ||||||||||||||||||
Loans receivable, net | $ | 12,181,863 | $ | 12,010,800 | 1 | % | $ | 12,005,558 | 1 | % | ||||||||||||||||||
REAL ESTATE LOANS BY PROPERTY TYPE: | 12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | |||||||||||||||||||||||
Retail buildings | $ | 2,298,872 | $ | 2,304,346 | — | % | $ | 2,379,589 | (3 | )% | ||||||||||||||||||
Hotels/motels | 1,709,189 | 1,664,311 | 3 | % | 1,694,696 | 1 | % | |||||||||||||||||||||
Gas stations/car washes | 844,081 | 911,494 | (7 | )% | 980,619 | (14 | )% | |||||||||||||||||||||
Mixed-use facilities | 785,882 | 743,428 | 6 | % | 698,779 | 12 | % | |||||||||||||||||||||
Warehouses | 1,030,876 | 949,336 | 9 | % | 966,413 | 7 | % | |||||||||||||||||||||
Multifamily | 465,397 | 473,640 | (2 | )% | 453,555 | 3 | % | |||||||||||||||||||||
Other | 1,530,668 | 1,541,388 | (1 | )% | 1,547,949 | (1 | )% | |||||||||||||||||||||
Total | $ | 8,664,965 | $ | 8,587,943 | 1 | % | $ | 8,721,600 | (1 | )% | ||||||||||||||||||
DEPOSIT COMPOSITION: | 12/31/2019 | 9/30/2019 | % change | 12/31/2018 | % change | |||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 3,108,687 | $ | 3,033,371 | 2 | % | $ | 3,022,633 | 3 | % | ||||||||||||||||||
Money market and other | 3,985,556 | 3,752,274 | 6 | % | 3,036,653 | 31 | % | |||||||||||||||||||||
Saving deposits | 274,151 | 259,454 | 6 | % | 225,746 | 21 | % | |||||||||||||||||||||
Time deposits | 5,158,970 | 5,189,651 | (1 | )% | 5,870,624 | (12 | )% | |||||||||||||||||||||
Total deposit balances | $ | 12,527,364 | $ | 12,234,750 | 2 | % | $ | 12,155,656 | 3 | % | ||||||||||||||||||
DEPOSIT COMPOSITION (%): | 12/31/2019 | 9/30/2019 | 12/31/2018 | |||||||||||||||||||||||||
Noninterest bearing demand deposits | 24.8 | % | 24.8 | % | 24.9 | % | ||||||||||||||||||||||
Money market and other | 31.8 | % | 30.7 | % | 25.0 | % | ||||||||||||||||||||||
Saving deposits | 2.2 | % | 2.1 | % | 1.8 | % | ||||||||||||||||||||||
Time deposits | 41.2 | % | 42.4 | % | 48.3 | % | ||||||||||||||||||||||
Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % |
CAPITAL RATIOS: | 12/31/2019 | 9/30/2019 | 12/31/2018 | ||||||||||||||||||||
Total stockholders’ equity | $ | 2,036,011 | $ | 2,031,284 | $ | 1,903,211 | |||||||||||||||||
Common equity tier 1 ratio | 11.76 | % | 11.89 | % | 11.44 | % | |||||||||||||||||
Tier 1 risk-based capital ratio | 12.51 | % | 12.65 | % | 12.21 | % | |||||||||||||||||
Total risk-based capital ratio | 13.23 | % | 13.38 | % | 12.94 | % | |||||||||||||||||
Tier 1 leverage ratio | 11.22 | % | 11.18 | % | 10.55 | % | |||||||||||||||||
Total risk weighted assets | $ | 13,208,299 | $ | 12,951,936 | $ | 12,749,403 | |||||||||||||||||
Book value per common share | $ | 16.19 | $ | 16.03 | $ | 15.03 | |||||||||||||||||
Tangible common equity to tangible assets 1 | 10.27 | % | 10.43 | % | 9.61 | % | |||||||||||||||||
Tangible common equity per share 1 | $ | 12.40 | $ | 12.27 | $ | 11.25 | |||||||||||||||||
1 Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. | |||||||||||||||||||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures: | |||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | |||||||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY | |||||||||||||||||||||||
Average stockholders’ equity | $ | 2,034,231 | $ | 2,010,458 | $ | 1,888,053 | $ | 1,981,811 | $ | 1,910,224 | |||||||||||||
Less goodwill and core deposit intangible assets, net | (476,596 | ) | (477,159 | ) | (478,897 | ) | (477,444 | ) | (479,811 | ) | |||||||||||||
Average tangible common equity | $ | 1,557,635 | $ | 1,533,299 | $ | 1,409,156 | $ | 1,504,367 | $ | 1,430,413 | |||||||||||||
Net Income | $ | 43,009 | $ | 42,592 | $ | 44,449 | $ | 171,040 | $ | 189,589 | |||||||||||||
Return on average tangible common equity | 11.04 | % | 11.11 | % | 12.62 | % | 11.37 | % | 13.25 | % | |||||||||||||
TANGIBLE COMMON EQUITY | 12/31/2019 | 9/30/2019 | 12/31/2018 | ||||||||||||||||||||
Total stockholders’ equity | $ | 2,036,011 | $ | 2,031,284 | $ | 1,903,211 | |||||||||||||||||
Less goodwill and core deposit intangible assets, net | (476,283 | ) | (476,840 | ) | (478,511 | ) | |||||||||||||||||
Tangible common equity | $ | 1,559,728 | $ | 1,554,444 | $ | 1,424,700 | |||||||||||||||||
Total assets | $ | 15,667,440 | $ | 15,379,878 | $ | 15,305,952 | |||||||||||||||||
Less goodwill and core deposit intangible assets, net | (476,283 | ) | (476,840 | ) | (478,511 | ) | |||||||||||||||||
Tangible assets | $ | 15,191,157 | $ | 14,903,038 | $ | 14,827,441 | |||||||||||||||||
Common shares outstanding | 125,756,543 | 126,697,925 | 126,639,912 | ||||||||||||||||||||
Tangible common equity to tangible assets | 10.27 | % | 10.43 | % | 9.61 | % | |||||||||||||||||
Tangible common equity per share | $ | 12.40 | $ | 12.27 | $ | 11.25 | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES CHANGE: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||||||||||
Balance at beginning of period | $ | 93,882 | $ | 94,066 | $ | 94,217 | $ | 92,557 | $ | 90,629 | $ | 92,557 | $ | 84,541 | |||||||||||||
Provision for loan losses | 1,000 | 2,100 | 1,200 | 3,000 | 2,800 | 7,300 | 14,900 | ||||||||||||||||||||
Recoveries | 939 | 780 | 725 | 1,292 | 805 | 3,736 | 3,991 | ||||||||||||||||||||
Charge offs | (1,677 | ) | (2,602 | ) | (2,076 | ) | (1,754 | ) | (1,677 | ) | (8,109 | ) | (10,875 | ) | |||||||||||||
PCI allowance adjustment | — | (462 | ) | — | (878 | ) | — | (1,340 | ) | — | |||||||||||||||||
Balance at end of period | $ | 94,144 | $ | 93,882 | $ | 94,066 | $ | 94,217 | $ | 92,557 | $ | 94,144 | $ | 92,557 | |||||||||||||
Net charge offs/average loans receivable (annualized) | 0.02 | % | 0.06 | % | 0.05 | % | 0.02 | % | 0.03 | % | 0.04 | % | 0.06 | % | |||||||||||||
ALLOWANCE FOR LOAN LOSSES COMPOSITION: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||||||||||
Legacy loans 1 | $ | 82,898 | $ | 82,267 | $ | 81,606 | $ | 80,953 | $ | 78,259 | |||||||||||||||||
Purchased non-impaired loans 2 | 3,168 | 3,239 | 3,376 | 2,948 | 2,135 | ||||||||||||||||||||||
Purchased credit-impaired loans 2 | 8,078 | 8,376 | 9,084 | 10,316 | 12,163 | ||||||||||||||||||||||
Total allowance for loan losses | $ | 94,144 | $ | 93,882 | $ | 94,066 | $ | 94,217 | $ | 92,557 | |||||||||||||||||
1 Legacy loans include loans originated by the Bank’s predecessor banks, loans originated by Bank of Hope and loans that were acquired that have been refinanced as new loans. | |||||||||||||||||||||||||||
2 Purchased loans were marked to fair value at acquisition date, and the allowance for loan losses reflects provisions for credit deterioration since the acquisition date. | |||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
NET CHARGED OFF (RECOVERED) LOANS BY TYPE: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||||||||||
Real estate loans | $ | 203 | $ | 951 | $ | (388 | ) | $ | (1,067 | ) | $ | 123 | $ | (301 | ) | $ | 5,700 | ||||||||||
Commercial loans | 245 | 596 | 1,399 | 1,250 | 436 | 3,490 | 8 | ||||||||||||||||||||
Consumer loans | 290 | 275 | 340 | 279 | 313 | 1,184 | 1,176 | ||||||||||||||||||||
Total net charge offs | $ | 738 | $ | 1,822 | $ | 1,351 | $ | 462 | $ | 872 | $ | 4,373 | $ | 6,884 | |||||||||||||
NONPERFORMING ASSETS: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Loans on nonaccrual status 3 | $ | 54,785 | $ | 42,235 | $ | 64,934 | $ | 86,637 | $ | 53,286 | |||||||||
Delinquent loans 90 days or more on accrual status 4 | 7,547 | 398 | 353 | 387 | 1,529 | ||||||||||||||
Accruing troubled debt restructured loans | 35,709 | 34,717 | 40,731 | 45,204 | 50,410 | ||||||||||||||
Total nonperforming loans | 98,041 | 77,350 | 106,018 | 132,228 | 105,225 | ||||||||||||||
Other real estate owned | 24,091 | 19,374 | 5,644 | 6,258 | 7,754 | ||||||||||||||
Total nonperforming assets | $ | 122,132 | $ | 96,724 | $ | 111,662 | $ | 138,486 | $ | 112,979 | |||||||||
Nonperforming assets/total assets | 0.78 | % | 0.63 | % | 0.73 | % | 0.90 | % | 0.74 | % | |||||||||
Nonperforming assets/loans receivable & OREO | 0.99 | % | 0.80 | % | 0.93 | % | 1.15 | % | 0.93 | % | |||||||||
Nonperforming assets/total capital | 6.00 | % | 4.76 | % | 5.60 | % | 7.12 | % | 5.94 | % | |||||||||
Nonperforming loans/loans receivable | 0.80 | % | 0.64 | % | 0.89 | % | 1.10 | % | 0.87 | % | |||||||||
Nonaccrual loans/loans receivable | 0.45 | % | 0.35 | % | 0.54 | % | 0.72 | % | 0.44 | % | |||||||||
Allowance for loan losses/loans receivable | 0.77 | % | 0.78 | % | 0.79 | % | 0.78 | % | 0.77 | % | |||||||||
Allowance for loan losses/nonaccrual loans | 171.84 | % | 222.28 | % | 144.86 | % | 108.75 | % | 173.70 | % | |||||||||
Allowance for loan losses/nonperforming loans | 96.03 | % | 121.37 | % | 88.73 | % | 71.25 | % | 87.96 | % | |||||||||
Allowance for loan losses/nonperforming assets | 77.08 | % | 97.06 | % | 84.24 | % | 68.03 | % | 81.92 | % | |||||||||
3 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $28.1 million, $37.3 million, $32.1 million, $30.5 million, and $29.2 million, at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. | |||||||||||||||||||
4 Excludes Acquired Credit Impaired Loans totaling $13.2 million, $15.5 million, $17.6 million, $18.4 million, and $14.1 million, at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. | |||||||||||||||||||
NONACCRUAL LOANS BY TYPE: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Real estate loans | $ | 40,935 | $ | 27,920 | $ | 42,921 | $ | 58,030 | $ | 33,719 | |||||||||
Commercial loans | 10,893 | 11,242 | 18,997 | 27,042 | 18,128 | ||||||||||||||
Consumer loans | 2,957 | 3,073 | 3,016 | 1,565 | 1,439 | ||||||||||||||
Total nonaccrual loans | $ | 54,785 | $ | 42,235 | $ | 64,934 | $ | 86,637 | $ | 53,286 | |||||||||
BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Retail buildings | $ | 4,215 | $ | 3,221 | $ | 2,919 | $ | 2,965 | $ | 3,085 | |||||||||
Gas stations/car washes | — | 233 | 241 | 255 | 267 | ||||||||||||||
Mixed-use facilities | 3,175 | 3,200 | 3,223 | 3,254 | 5,956 | ||||||||||||||
Warehouses | 10,381 | 10,449 | 11,246 | 11,315 | 7,188 | ||||||||||||||
Other 5 | 17,938 | 17,614 | 23,102 | 27,415 | 33,914 | ||||||||||||||
Total | $ | 35,709 | $ | 34,717 | $ | 40,731 | $ | 45,204 | $ | 50,410 | |||||||||
5 Includes commercial business and other loans | |||||||||||||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Legacy | |||||||||||||||||||
30 - 59 days | $ | 11,975 | $ | 14,229 | $ | 16,405 | $ | 30,971 | $ | 23,846 | |||||||||
60 - 89 days | 4,447 | 4,164 | 718 | 1,227 | 218 | ||||||||||||||
Total delinquent loans less than 90 days past due - legacy | $ | 16,422 | $ | 18,393 | $ | 17,123 | $ | 32,198 | $ | 24,064 | |||||||||
Acquired | |||||||||||||||||||
30 - 59 days | $ | 2,458 | $ | 11,052 | $ | 1,508 | $ | 2,717 | $ | 1,094 | |||||||||
60 - 89 days | 265 | 371 | 577 | — | 406 | ||||||||||||||
Total delinquent loans less than 90 days past due - acquired | $ | 2,723 | $ | 11,423 | $ | 2,085 | $ | 2,717 | $ | 1,500 | |||||||||
Total delinquent loans less than 90 days past due | $ | 19,145 | $ | 29,816 | $ | 19,208 | $ | 34,915 | $ | 25,564 | |||||||||
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Legacy | |||||||||||||||||||
Real estate loans | $ | 6,224 | $ | 9,707 | $ | 9,580 | $ | 12,324 | $ | 2,352 | |||||||||
Commercial loans | 415 | 2,004 | 1,755 | 2,711 | 5,159 | ||||||||||||||
Consumer loans | 9,783 | 6,682 | 5,788 | 17,163 | 16,553 | ||||||||||||||
Total delinquent loans less than 90 days past due - legacy | $ | 16,422 | $ | 18,393 | $ | 17,123 | $ | 32,198 | $ | 24,064 | |||||||||
Acquired | |||||||||||||||||||
Real estate loans | $ | 1,465 | $ | 10,865 | $ | 214 | $ | 1,371 | $ | 905 | |||||||||
Commercial loans | 277 | 278 | 77 | 374 | 595 | ||||||||||||||
Consumer loans | 981 | 280 | 1,794 | 972 | — | ||||||||||||||
Total delinquent loans less than 90 days past due - acquired | $ | 2,723 | $ | 11,423 | $ | 2,085 | $ | 2,717 | $ | 1,500 | |||||||||
Total delinquent loans less than 90 days past due | $ | 19,145 | $ | 29,816 | $ | 19,208 | $ | 34,915 | $ | 25,564 | |||||||||
CRITICIZED LOANS: | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||||||
Legacy | |||||||||||||||||||
Special mention | $ | 120,620 | $ | 101,892 | $ | 147,050 | $ | 154,671 | $ | 121,622 | |||||||||
Substandard | 164,131 | 184,518 | 202,676 | 223,511 | 193,494 | ||||||||||||||
Doubtful / Loss | 13 | 17 | — | 351 | — | ||||||||||||||
Total criticized loans - legacy | $ | 284,764 | $ | 286,427 | $ | 349,726 | $ | 378,533 | $ | 315,116 | |||||||||
Acquired | |||||||||||||||||||
Special mention | $ | 20,832 | $ | 37,956 | $ | 39,435 | $ | 50,702 | $ | 41,467 | |||||||||
Substandard | 95,147 | 84,087 | 121,165 | 129,122 | 124,421 | ||||||||||||||
Doubtful / Loss | — | — | 1 | 218 | 412 | ||||||||||||||
Total criticized loans - acquired | $ | 115,979 | $ | 122,043 | $ | 160,601 | $ | 180,042 | $ | 166,300 | |||||||||
Total criticized loans | $ | 400,743 | $ | 408,470 | $ | 510,327 | $ | 558,575 | $ | 481,416 |
Alex Ko EVP & Chief Financial Officer 213-427-6560 alex.ko@bankofhope.com | Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 angie.yang@bankofhope.com |
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