HOPE 8-K
Hope Bancorp Inc (HOPE)
8-K
2022-01-24
For: 2022-01-24
View Original
Added on
April 08, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
| (Exact name of registrant as specified in its charter) | ||
| (State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executives offices, including zip code)
(213 ) 639-1700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| , | par value $0.001 per share | |||||||||||||
| (Title of class) | (Trading Symbol) | (Name of exchange on which registered) | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On January 24, 2022, Hope Bancorp, Inc. (“HOPE” or the “Company”) issued a news release concerning its results of operations and financial condition for the fourth quarter and full year ended as of December 31, 2021. A copy of the January 24, 2022 press release is furnished as Exhibit 99.1 and incorporated herein by reference.
The information furnished under Item 2.02, Item 7.01 and certain exhibits under Item 9.01 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.4 to this Current Report on Form 8-K) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be set forth as a specific reference in such filing.
Item 8.01 Other Events.
On January 24, 2022, the Company issued a news release announcing that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The cash dividend is payable on or about February 17, 2022 to all stockholders of record as of the close of business on February 3, 2022. A copy of the January 24, 2022 press release is attached hereto as Exhibit 99.2.
Effective January 24, 2022, the Board of Directors for Hope Bancorp, Inc. (the “Company”) approved a stock repurchase program that authorizes the Company to repurchase up to $50 million of its common stock. Stock repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or by other means as determined by the Company’s management and in accordance with the regulations of the Securities and Exchange Commission. A copy of the January 24, 2022 press release announcing the stock repurchase program is attached hereto as Exhibit 99.3.
Item 7.01. Regulation FD Disclosure
The Company previously announced that it will host an investor conference call on Tuesday, January 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2021. A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. A copy of the Presentation Materials is furnished as Exhibit 99.4 and incorporated herein by reference.
The information included in this report pursuant to Item 2.02, Item 7.01 and certain exhibits of Item 9.01 of Current Report on Form 8-K (including Exhibits 99.1 and 99.4 to this Current Report on Form 8-K) shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be set forth as a specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description of Exhibit | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 99.3 | ||||||||
| 99.4 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HOPE BANCORP, INC. | |||||||||||
| Date: January 24, 2022 | By: | /s/ Kevin S. Kim | |||||||||
| Kevin S. Kim | |||||||||||
| Chairman, President and Chief Executive Officer | |||||||||||
News Release
HOPE BANCORP REPORTS 2021 FOURTH QUARTER AND
FULL-YEAR FINANCIAL RESULTS
LOS ANGELES - January 24, 2022 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and full year ended December 31, 2021.
For the three months ended December 31, 2021, net income totaled $51.6 million, or $0.43 per diluted common share. This compares with net income of $55.5 million, or $0.45 per diluted common share, in the third quarter of 2021 and $28.3 million, or $0.23 per diluted common share, in the fourth quarter of 2020. Pre-provision net revenue(1) for the 2021 fourth quarter increased 10% over the 2021 third quarter and increased 18% over the prior-year fourth quarter.
For the full year ended December 31, 2021, net income totaled $204.6 million, or $1.66 per diluted common share, compared with net income of $111.5 million, or $0.90 per diluted common share for the year ended December 31, 2020. Pre-provision net revenue(1) for 2021 increased 11% over 2020.
“We delivered an outstanding financial performance in the fourth quarter of 2021 to close out a year with record levels of loan production, a more diversified, lower-risk loan portfolio, continued improvement in our deposit composition, and enhanced efficiencies and profitability,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Following the successful de-risking and rebalancing of our loan portfolio, record loan production of $1.24 billion in the fourth quarter led to a 4% quarter-over-quarter increase in loans receivable. We also continued to enhance the quality of our deposit franchise with core deposit growth leading to a ninth consecutive quarter of decreasing deposit costs. The redeployment of excess cash into higher-yielding earning assets resulted in increased levels of net interest income and drove a 6 basis point expansion of our net interest margin quarter-over-quarter. Altogether with our continued expense management, we delivered double-digit growth in our pre-provision net revenue(1) for the 2021 fourth quarter versus the preceding third quarter, as well as for the full 2021 year compared with the prior year.
“The strong headwinds of 2021 are behind us, and we began 2022 with tremendous momentum following a solid fourth quarter performance reflective of our more traditional growth levels. Armed with greater confidence in our ability to navigate through a new normal that includes a lingering pandemic and with an expanded and improved business development team and focus, I believe the long-term prospects of our franchise is stronger today than it has ever been,” said Kim.
Q4 2021 Highlights
•Loan originations increased 23% quarter-over-quarter to a record $1.24 billion and contributed to a 4.0% increase in loans receivable quarter-over-quarter, or 15.9% annualized.
•Excluding PPP, loans receivable increased 4.9% quarter-over-quarter, or 19.6% annualized.
•Net interest income before provision for credit losses increased 2% quarter-over-quarter to $133.3 million, reflecting the redeployment of excess cash into loans and investment securities and lower cost of deposits.
______________
(1) Pre-provision net revenue, a non-GAAP financial measure, represents the sum of net interest income before provision (credit) for credit losses and non-interest income less noninterest expense. Management’s reasons and purposes for using this non-GAAP financial measure is set forth on page 7 of this earnings release. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.
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•Total cost of deposits decreased 3 basis points quarter-over-quarter, reflecting the ongoing downward repricing of interest bearing deposits, and represented the ninth consecutive quarter of declining deposit costs.
•Noninterest expenses continued to be well managed with efficiency ratio improving 288 basis points quarter-over-quarter to 50.70% and noninterest expense to average assets improving to 1.67%.
•Pre-provision net revenue(1) increased 10% quarter-over-quarter and totaled $72.2 million.
•Company recorded net recoveries of $2.3 million related to a large loan previously charged off during the 2021 third quarter.
•Total nonperforming assets declined quarter-over-quarter by $1.9 million, and criticized loans decreased by $50.9 million.
•Re-entered the state of Georgia with a new branch opening in the epicenter of Atlanta’s growing Korean American community.
Financial Highlights
| (dollars in thousands, except per share data) (unaudited) | At or for the Three Months Ended | |||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Net income | $ | 51,623 | $ | 55,499 | $ | 28,319 | ||||||||||||||||||||
| Diluted earnings per share | $ | 0.43 | $ | 0.45 | $ | 0.23 | ||||||||||||||||||||
Pre-provision net revenue (1) | $ | 72,179 | $ | 65,411 | $ | 61,108 | ||||||||||||||||||||
| Net interest income before provision (credit) for credit losses | $ | 133,318 | $ | 130,296 | $ | 120,756 | ||||||||||||||||||||
| Net interest margin | 3.13 | % | 3.07 | % | 3.02 | % | ||||||||||||||||||||
| Noninterest income | $ | 13,097 | $ | 10,617 | $ | 11,415 | ||||||||||||||||||||
| Noninterest expense | $ | 74,236 | $ | 75,502 | $ | 71,063 | ||||||||||||||||||||
| Net loans receivable | $ | 13,812,193 | $ | 13,281,917 | $ | 13,356,472 | ||||||||||||||||||||
| Deposits | $ | 15,040,450 | $ | 15,062,527 | $ | 14,333,912 | ||||||||||||||||||||
| Total cost of deposits | 0.23 | % | 0.26 | % | 0.48 | % | ||||||||||||||||||||
Nonaccrual loans (2) | $ | 54,616 | $ | 54,380 | $ | 85,238 | ||||||||||||||||||||
Nonperforming loans to loans receivable (2) | 0.78 | % | 0.73 | % | 0.91 | % | ||||||||||||||||||||
| ACL to loans receivable | 1.01 | % | 1.02 | % | 1.52 | % | ||||||||||||||||||||
ACL to nonaccrual loans (2) | 257.34 | % | 251.52 | % | 242.55 | % | ||||||||||||||||||||
ACL to nonperforming assets (2) | 125.76 | % | 120.33 | % | 144.24 | % | ||||||||||||||||||||
| Provision (credit) for credit losses | $ | 1,500 | $ | (10,000) | $ | 27,500 | ||||||||||||||||||||
| Net (recoveries) charge offs | $ | (2,276) | $ | 42,678 | $ | 608 | ||||||||||||||||||||
| Return on average assets (“ROA”) | 1.16 | % | 1.25 | % | 0.67 | % | ||||||||||||||||||||
| Return on average equity (“ROE”) | 9.93 | % | 10.61 | % | 5.54 | % | ||||||||||||||||||||
Return on average tangible common equity (“ROTCE”) (1) | 12.85 | % | 13.71 | % | 7.21 | % | ||||||||||||||||||||
| Noninterest expense / average assets | 1.67 | % | 1.70 | % | 1.69 | % | ||||||||||||||||||||
| Efficiency ratio | 50.70 | % | 53.58 | % | 53.77 | % | ||||||||||||||||||||
(1) Pre-provision net revenue and return on average tangible common equity are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Page 7 of this earnings release. A quantitative reconciliation of the Company’s GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
(2) Excludes delinquent SBA loans that are guaranteed and currently in liquidation
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Operating Results for the 2021 Fourth Quarter
Net interest income before provision for credit losses for the 2021 fourth quarter increased 2% to $133.3 million from $130.3 million in the 2021 third quarter and increased 10% from $120.8 million in the year-ago fourth quarter. The Company attributed the increase to higher interest income due to higher average balances of loans receivable and investment securities, as well as lower interest expense on deposits.
The net interest margin for the 2021 fourth quarter increased 6 basis points to 3.13% from 3.07% in the preceding third quarter, primarily attributed to the redeployment of cash into loans and investment securities, and a 3 basis point reduction in the cost of deposits. The net interest margin in the prior-year fourth quarter was 3.02%.
The weighted average yield on loans for the 2021 fourth quarter was 3.95%, compared with 3.97% in the preceding third quarter, and 4.03% in the year-ago fourth quarter.
The weighted average cost of deposits for the 2021 fourth quarter decreased for the ninth consecutive quarter to 0.23%, representing a 3 basis point decrease from 0.26% for the 2021 third quarter and a 25 basis point decrease from 0.48% for the 2020 fourth quarter. The Company attributed the improvements in the weighted average cost of deposits to the ongoing downward repricing of interest bearing deposits. The cost of interest bearing deposits was 0.39%, 0.42%, and 0.71% for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
Noninterest income for the 2021 fourth quarter increased 23% quarter-over-quarter to $13.1 million from $10.6 million in the preceding third quarter, reflecting higher levels of deposit and transaction fees, net gain on sale of SBA loans, swap fee income, and equity investment dividend income. During the 2021 fourth quarter, the Company sold $41.0 million in the guaranteed portion of SBA 7(a) loans, compared with $31.3 million in the preceding third quarter. Noninterest income in the 2020 fourth quarter totaled $11.4 million.
Noninterest expense for the 2021 fourth quarter decreased to $74.2 million from $75.5 million for the preceding third quarter, largely reflecting lower salaries and employee benefits expense, partially offset by higher OREO expenses. For the 2020 fourth quarter, noninterest expense totaled $71.1 million.
Salaries and employee benefits expense for the 2021 fourth quarter decreased to $44.6 million from $47.0 million in the preceding third quarter, and is attributable to more normalized bonus reserves, a decrease in stock compensation expense, and an increase in deferred loan origination costs. Salaries and employee benefits expense for the 2020 fourth quarter totaled $40.9 million.
The Company’s efficiency ratio for the 2021 fourth quarter improved to 50.7% from 53.6% in the preceding third quarter and 53.8% in the year-ago fourth quarter. Noninterest expense as a percentage of average assets improved to 1.67% for the 2021 fourth quarter from 1.70% for the 2021 third quarter and from 1.69% for the 2020 fourth quarter.
The effective tax rate for the 2021 fourth quarter was 27.0%, compared with 26.4% for the preceding third quarter, reflecting an increase in the Company’s actual annual pretax income compared with previous estimates, combined with the benefit of affordable housing partnership investment tax credits having a smaller effect on the larger annual pretax income. In the year-ago fourth quarter, the effective tax rate was materially lower than the preceding quarters of 2020 at 15.7%, which reflected a lower tax provision based on adjustments to the applicable state apportionment factors. The effective tax rate for the full-year 2021 was 25.7%, compared with 21.6% for 2020. The increase in the full-year tax rate was mainly due to an increase in pretax income during 2021 and the change in the Company’s state apportionment in 2020 which materially lowered the tax rate for that year.
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Balance Sheet Summary
New loan originations funded during the 2021 fourth quarter increased 23% quarter-over-quarter to a record $1.24 billion from the previous record of $1.01 billion in the preceding third quarter. In the year-ago fourth quarter, the Company originated $844.2 million of new loans.
Following are the components of new loan production for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020.
| (dollars in thousands) (unaudited) | For the Three Months Ended | |||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Commercial real estate | $ | 573,978 | $ | 488,969 | $ | 326,512 | ||||||||||||||||||||
| Commercial | 532,634 | 329,702 | 435,151 | |||||||||||||||||||||||
| SBA (excluding SBA PPP) | 54,848 | 115,023 | 17,141 | |||||||||||||||||||||||
| Residential mortgage | 81,325 | 75,007 | 62,492 | |||||||||||||||||||||||
| Consumer | 70 | 500 | 2,932 | |||||||||||||||||||||||
| Total new loan originations | $ | 1,242,855 | $ | 1,009,201 | $ | 844,228 | ||||||||||||||||||||
At December 31, 2021, loans receivable increased 4.0% to $13.95 billion from $13.42 billion at September 30, 2021 and increased 2.9% from $13.56 billion at December 31, 2020.
Total deposits at December 31, 2021 declined slightly to $15.04 billion from $15.06 billion at September 30, 2021, but increased 4.9% year-over-year from $14.33 billion at December 31, 2020. Quarter-over-quarter, money market and NOW deposits increased 5.2%, but was offset by a seasonal decline in noninterest bearing demand deposits and a reduction in time deposits. On a year-over-year basis, noninterest bearing demand deposits at year-end increased 19.5%, money market and NOW deposits increased 18.1%, and time deposits decreased 30.1%.
Following is the deposit composition as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (dollars in thousands) (unaudited) | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | ||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,751,870 | $ | 6,007,586 | (4.3) | % | $ | 4,814,254 | 19.5 | % | |||||||||||||||||||
| Money market and other | 6,178,850 | 5,871,567 | 5.2 | % | 5,232,413 | 18.1 | % | ||||||||||||||||||||||
| Saving deposits | 321,377 | 314,603 | 2.2 | % | 300,770 | 6.9 | % | ||||||||||||||||||||||
| Time deposits | 2,788,353 | 2,868,771 | (2.8) | % | 3,986,475 | (30.1) | % | ||||||||||||||||||||||
| Total deposit balances | $ | 15,040,450 | $ | 15,062,527 | (0.1) | % | $ | 14,333,912 | 4.9 | % | |||||||||||||||||||
While noninterest bearing demand deposits decreased to $5.75 billion at December 31, 2021 from $6.01 billion as of September 30, 2021 due to seasonality related to larger corporate banking deposit relationships, the average noninterest bearing deposit balance for the 2021 fourth quarter increased 2.0% over the third quarter of 2021.
Following is the deposit composition as a percentage of total deposits as of December 31, 2021, September 30, 2021 and December 31, 2020 and a breakdown of cost of deposits for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020:
| Deposit Breakdown | Cost of Deposits | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 38.3 | % | 39.9 | % | 33.6 | % | — | % | — | % | — | % | |||||||||||||||||||||||
| Money market and other | 41.1 | % | 39.0 | % | 36.5 | % | 0.37 | % | 0.40 | % | 0.45 | % | |||||||||||||||||||||||
| Saving deposits | 2.1 | % | 2.1 | % | 2.1 | % | 1.18 | % | 1.18 | % | 1.17 | % | |||||||||||||||||||||||
| Time deposits | 18.5 | % | 19.0 | % | 27.8 | % | 0.34 | % | 0.38 | % | 0.98 | % | |||||||||||||||||||||||
| Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | 0.23 | % | 0.26 | % | 0.48 | % | |||||||||||||||||||||||
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Allowance for Credit Losses
In the 2021 fourth quarter, the Company recorded a provision for credit losses of $1.5 million, compared with a negative provision for credit losses of $10.0 million in the preceding third quarter, and a provision for credit losses of $27.5 million in the 2020 fourth quarter.
Following is the allowance for credit losses as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (dollars in thousands) (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | |||||||||||||||||||||||
| Allowance for credit losses | $ | 140,550 | $ | 136,774 | $ | 206,741 | ||||||||||||||||||||
| Allowance for credit loss/loans receivable | 1.01 | % | 1.02 | % | 1.52 | % | ||||||||||||||||||||
| Allowance for credit losses/nonperforming loans | 128.75 | % | 138.92 | % | 167.80 | % | ||||||||||||||||||||
Credit Quality
Following are the components of nonperforming assets as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (dollars in thousands) (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | |||||||||||||||||||||||
Loans on nonaccrual status (1) | $ | 54,616 | $ | 54,380 | $ | 85,238 | ||||||||||||||||||||
| Delinquent loans 90 days or more on accrual status | 2,131 | 4,567 | 614 | |||||||||||||||||||||||
| Accruing troubled debt restructured loans | 52,418 | 39,509 | 37,354 | |||||||||||||||||||||||
| Total nonperforming loans | 109,165 | 98,456 | 123,206 | |||||||||||||||||||||||
| Other real estate owned | 2,597 | 15,213 | 20,121 | |||||||||||||||||||||||
| Total nonperforming assets | $ | 111,762 | $ | 113,669 | $ | 143,327 | ||||||||||||||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $19.5 million, $20.6 million, and $26.5 million, at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
Total nonperforming assets at December 31, 2021 declined to $111.8 million from $113.7 million at September 30, 2021 and from $143.3 million at December 31, 2020. The quarter-over-quarter decrease in total nonperforming assets largely reflects a $12.6 million reduction in other real estate owned, partially offset by a $10.7 million increase in nonperforming loans due to one large commercial real estate loan.
Following are net (recoveries) charge offs and net (recoveries) charge offs to average loans receivable on an annualized basis for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020:
| (dollars in thousands) (unaudited) | For the Three Months Ended | |||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Net (recoveries) charge offs | $ | (2,276) | $ | 42,678 | $ | 608 | ||||||||||||||||||||
| Net (recoveries) charge offs/average loans receivable (annualized) | (0.07) | % | 1.28 | % | 0.02 | % | ||||||||||||||||||||
Net recoveries in the 2021 fourth quarter reflects a partial recovery from a large loan charged off during the preceding third quarter.
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Following are the components of criticized loan balances as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (dollars in thousands) (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | |||||||||||||||||||||||
| Special Mention | $ | 257,194 | $ | 306,766 | $ | 184,941 | ||||||||||||||||||||
| Classified | 242,397 | 243,684 | 366,557 | |||||||||||||||||||||||
| Criticized | $ | 499,591 | $ | 550,450 | $ | 551,498 | ||||||||||||||||||||
The Company noted that the quarter-over-quarter decrease in criticized loans at December 31, 2021 reflects the benefits of its de-risking strategy focused on reducing higher-risk commercial real estate properties.
Capital
At December 31, 2021, the Company and the Bank continued to exceed all regulatory capital requirements to be
classified as a “well-capitalized” financial institution. Following are capital ratios for the Company as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | Minimum Guideline for “Well-Capitalized” Bank | |||||||||||||||||||
| Common Equity Tier 1 Capital | 11.03% | 11.01% | 10.94% | 6.50% | |||||||||||||||||||
| Tier 1 Leverage Ratio | 10.11% | 9.98% | 10.22% | 5.00% | |||||||||||||||||||
| Tier 1 Risk-Based Ratio | 11.70% | 11.70% | 11.64% | 8.00% | |||||||||||||||||||
| Total Risk-Based Ratio | 12.42% | 12.42% | 12.87% | 10.00% | |||||||||||||||||||
Following are tangible common equity(1) (“TCE”) per share and TCE as a percentage of tangible assets(1) as of December 31, 2021, September 30, 2021 and December 31, 2020:
| (unaudited) | 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||
Tangible common equity per share (1) | $13.51 | $13.33 | $12.81 | ||||||||||||||
Tangible common equity to tangible assets (1) | 9.31% | 9.24% | 9.50% | ||||||||||||||
(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. 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, tangible common equity per share, tangible assets and tangible common equity to tangible assets are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Page 7 of this earnings release. A quantitative reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.
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Non-GAAP Financial Metrics
This news release contains certain non-GAAP financial disclosures, including pre-provision net revenue, tangible common equity, tangible common equity per share and tangible common equity to tangible assets. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding its operational performance and the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in these financial metrics. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 10.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Tuesday, January 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2021. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available in the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 1, 2022, replay access code 7703555.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.89 billion in total assets as of December 31, 2021. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations, and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Page 8-8-8 NASDAQ: HOPE
Contacts:
Alex Ko Senior EVP & Chief Financial Officer 213-427-6560 | Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 | ||||
# # #
(tables follow)
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)
| Assets | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | ||||||||||||||||||||||||
| Cash and due from banks | $ | 316,266 | $ | 627,352 | (50) | % | $ | 350,579 | (10) | % | |||||||||||||||||||
| Securities available for sale, at fair value | 2,666,275 | 2,669,489 | — | % | 2,285,611 | 17 | % | ||||||||||||||||||||||
| Federal Home Loan Bank (“FHLB”) stock and other investments | 87,961 | 88,102 | — | % | 105,591 | (17) | % | ||||||||||||||||||||||
| Loans held for sale, at the lower of cost or fair value | 99,049 | 179,117 | (45) | % | 17,743 | 458 | % | ||||||||||||||||||||||
| Loans receivable | 13,952,743 | 13,418,691 | 4 | % | 13,563,213 | 3 | % | ||||||||||||||||||||||
| Allowance for credit losses | (140,550) | (136,774) | 3 | % | (206,741) | (32) | % | ||||||||||||||||||||||
| Net loans receivable | 13,812,193 | 13,281,917 | 4 | % | 13,356,472 | 3 | % | ||||||||||||||||||||||
| Accrued interest receivable | 41,842 | 47,102 | (11) | % | 59,430 | (30) | % | ||||||||||||||||||||||
| Premises and equipment, net | 45,667 | 45,307 | 1 | % | 48,409 | (6) | % | ||||||||||||||||||||||
| Bank owned life insurance | 77,081 | 76,756 | — | % | 76,765 | — | % | ||||||||||||||||||||||
| Goodwill | 464,450 | 464,450 | — | % | 464,450 | — | % | ||||||||||||||||||||||
| Servicing assets | 10,418 | 10,787 | (3) | % | 12,692 | (18) | % | ||||||||||||||||||||||
| Other intangible assets, net | 7,671 | 8,180 | (6) | % | 9,708 | (21) | % | ||||||||||||||||||||||
| Other assets | 260,188 | 300,467 | (13) | % | 319,214 | (18) | % | ||||||||||||||||||||||
| Total assets | $ | 17,889,061 | $ | 17,799,026 | 1 | % | $ | 17,106,664 | 5 | % | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Deposits | $ | 15,040,450 | $ | 15,062,527 | — | % | $ | 14,333,912 | 5 | % | |||||||||||||||||||
| FHLB advances | 300,000 | 200,000 | 50 | % | 250,000 | 20 | % | ||||||||||||||||||||||
| Convertible notes, net | 216,209 | 215,974 | — | % | 204,565 | 6 | % | ||||||||||||||||||||||
| Subordinated debentures | 105,354 | 105,057 | — | % | 104,178 | 1 | % | ||||||||||||||||||||||
| Accrued interest payable | 4,272 | 5,367 | (20) | % | 14,706 | (71) | % | ||||||||||||||||||||||
| Other liabilities | 129,793 | 135,703 | (4) | % | 145,558 | (11) | % | ||||||||||||||||||||||
| Total liabilities | 15,796,078 | 15,724,628 | — | % | 15,052,919 | 5 | % | ||||||||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||||||||||||||
Common stock, $0.001 par value | 136 | 136 | — | % | 136 | — | % | ||||||||||||||||||||||
| Capital surplus | 1,421,698 | 1,420,151 | — | % | 1,434,916 | (1) | % | ||||||||||||||||||||||
| Retained earnings | 932,561 | 897,766 | 4 | % | 785,940 | 19 | % | ||||||||||||||||||||||
| Treasury stock, at cost | (250,000) | (247,198) | 1 | % | (200,000) | 25 | % | ||||||||||||||||||||||
| Accumulated other comprehensive (loss) gain, net | (11,412) | 3,543 | N/A | 32,753 | N/A | ||||||||||||||||||||||||
| Total stockholders’ equity | 2,092,983 | 2,074,398 | 1 | % | 2,053,745 | 2 | % | ||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 17,889,061 | $ | 17,799,026 | 1 | % | $ | 17,106,664 | 5 | % | |||||||||||||||||||
| Common stock shares - authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||||||||||||||||||
| Common stock shares - outstanding | 120,006,452 | 120,198,061 | 123,264,864 | ||||||||||||||||||||||||||
| Treasury stock shares | 16,343,849 | 16,149,007 | 12,661,581 | ||||||||||||||||||||||||||
Table Page 1
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | 12/31/2021 | 12/31/2020 | % change | ||||||||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 133,821 | $ | 132,794 | 1 | % | $ | 132,117 | 1 | % | $ | 528,174 | $ | 554,967 | (5) | % | |||||||||||||||||||||||||||||||
| Interest on securities | 10,657 | 9,207 | 16 | % | 9,014 | 18 | % | 35,492 | 39,362 | (10) | % | ||||||||||||||||||||||||||||||||||||
| Interest on federal funds sold and other investments | 691 | 865 | (20) | % | 598 | 16 | % | 2,866 | 4,549 | (37) | % | ||||||||||||||||||||||||||||||||||||
| Total interest income | 145,169 | 142,866 | 2 | % | 141,729 | 2 | % | 566,532 | 598,878 | (5) | % | ||||||||||||||||||||||||||||||||||||
| Interest on deposits | 8,905 | 9,640 | (8) | % | 16,934 | (47) | % | 42,011 | 110,369 | (62) | % | ||||||||||||||||||||||||||||||||||||
| Interest on other borrowings and convertible notes | 2,946 | 2,930 | 1 | % | 4,039 | (27) | % | 11,751 | 21,011 | (44) | % | ||||||||||||||||||||||||||||||||||||
| Total interest expense | 11,851 | 12,570 | (6) | % | 20,973 | (43) | % | 53,762 | 131,380 | (59) | % | ||||||||||||||||||||||||||||||||||||
| Net interest income before provision (credit) for credit losses | 133,318 | 130,296 | 2 | % | 120,756 | 10 | % | 512,770 | 467,498 | 10 | % | ||||||||||||||||||||||||||||||||||||
| Provision (credit) for credit losses | 1,500 | (10,000) | N/A | 27,500 | (95) | % | (12,200) | 95,000 | N/A | ||||||||||||||||||||||||||||||||||||||
| Net interest income after provision (credit) for credit losses | 131,818 | 140,296 | (6) | % | 93,256 | 41 | % | 524,970 | 372,498 | 41 | % | ||||||||||||||||||||||||||||||||||||
| Service fees on deposit accounts | 1,894 | 1,814 | 4 | % | 2,991 | (37) | % | 7,275 | 12,443 | (42) | % | ||||||||||||||||||||||||||||||||||||
| International service fees | 1,061 | 889 | 19 | % | 696 | 52 | % | 3,586 | 3,139 | 14 | % | ||||||||||||||||||||||||||||||||||||
| Loan servicing fees, net | 747 | 642 | 16 | % | 566 | 32 | % | 3,367 | 2,809 | 20 | % | ||||||||||||||||||||||||||||||||||||
| Wire transfer fees | 916 | 836 | 10 | % | 867 | 6 | % | 3,519 | 3,577 | (2) | % | ||||||||||||||||||||||||||||||||||||
| Net gains on sales of SBA loans | 3,614 | 2,459 | 47 | % | — | 100 | % | 8,448 | — | 100 | % | ||||||||||||||||||||||||||||||||||||
| Net gains on sales of residential mortgage loans | 530 | 781 | (32) | % | 1,618 | (67) | % | 4,435 | 8,004 | (45) | % | ||||||||||||||||||||||||||||||||||||
| Net gains on sales of securities available for sale | — | — | — | % | — | — | % | — | 7,531 | (100) | % | ||||||||||||||||||||||||||||||||||||
| Other income and fees | 4,335 | 3,196 | 36 | % | 4,677 | (7) | % | 12,964 | 15,929 | (19) | % | ||||||||||||||||||||||||||||||||||||
| Total noninterest income | 13,097 | 10,617 | 23 | % | 11,415 | 15 | % | 43,594 | 53,432 | (18) | % | ||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 44,608 | 47,018 | (5) | % | 40,911 | 9 | % | 175,151 | 162,922 | 8 | % | ||||||||||||||||||||||||||||||||||||
| Occupancy | 7,391 | 7,473 | (1) | % | 7,200 | 3 | % | 28,898 | 28,917 | — | % | ||||||||||||||||||||||||||||||||||||
| Furniture and equipment | 4,642 | 4,429 | 5 | % | 4,122 | 13 | % | 18,079 | 17,548 | 3 | % | ||||||||||||||||||||||||||||||||||||
| Advertising and marketing | 2,329 | 2,656 | (12) | % | 1,695 | 37 | % | 8,707 | 6,284 | 39 | % | ||||||||||||||||||||||||||||||||||||
| Data processing and communications | 2,789 | 2,394 | 16 | % | 2,235 | 25 | % | 10,331 | 9,344 | 11 | % | ||||||||||||||||||||||||||||||||||||
| Professional fees | 2,439 | 2,431 | — | % | 1,847 | 32 | % | 12,168 | 8,170 | 49 | % | ||||||||||||||||||||||||||||||||||||
| FDIC assessment | 1,366 | 1,204 | 13 | % | 1,166 | 17 | % | 5,109 | 5,544 | (8) | % | ||||||||||||||||||||||||||||||||||||
| Credit related expenses | 873 | 1,266 | (31) | % | 2,001 | (56) | % | 4,400 | 6,817 | (35) | % | ||||||||||||||||||||||||||||||||||||
| OREO expense (income), net | 811 | 248 | 227 | % | (86) | N/A | 1,638 | 3,865 | (58) | % | |||||||||||||||||||||||||||||||||||||
| Software impairment | — | — | — | % | — | — | % | 2,146 | — | 100 | % | ||||||||||||||||||||||||||||||||||||
| FHLB advance prepayment fee | — | — | — | % | — | — | % | — | 3,584 | (100) | % | ||||||||||||||||||||||||||||||||||||
| Branch restructuring costs | — | — | — | % | 2,367 | (100) | % | — | 2,367 | (100) | % | ||||||||||||||||||||||||||||||||||||
| Other | 6,988 | 6,383 | 9 | % | 7,605 | (8) | % | 26,665 | 28,277 | (6) | % | ||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 74,236 | 75,502 | (2) | % | 71,063 | 4 | % | 293,292 | 283,639 | 3 | % | ||||||||||||||||||||||||||||||||||||
| Income before income taxes | 70,679 | 75,411 | (6) | % | 33,608 | 110 | % | 275,272 | 142,291 | 93 | % | ||||||||||||||||||||||||||||||||||||
| Income tax provision | 19,056 | 19,912 | (4) | % | 5,289 | 260 | % | 70,700 | 30,776 | 130 | % | ||||||||||||||||||||||||||||||||||||
| Net income | $ | 51,623 | $ | 55,499 | (7) | % | $ | 28,319 | 82 | % | $ | 204,572 | $ | 111,515 | 83 | % | |||||||||||||||||||||||||||||||
| Earnings per Common Share - Basic | $ | 0.43 | $ | 0.45 | $ | 0.23 | $ | 1.67 | $ | 0.90 | |||||||||||||||||||||||||||||||||||||
| Earnings per Common Share - Diluted | $ | 0.43 | $ | 0.45 | $ | 0.23 | $ | 1.66 | $ | 0.90 | |||||||||||||||||||||||||||||||||||||
| Weighted Average Shares Outstanding - Basic | 120,160,300 | 122,244,948 | 123,264,172 | 122,321,768 | 123,501,401 | ||||||||||||||||||||||||||||||||||||||||||
| Weighted Average Shares Outstanding - Diluted | 121,025,925 | 122,908,536 | 123,874,229 | 123,133,025 | 123,889,343 | ||||||||||||||||||||||||||||||||||||||||||
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
| At or for the Three Months Ended (Annualized) | At or for the Twelve Months Ended | ||||||||||||||||||||||||||||
| Profitability measures: | 12/31/2021 | 9/30/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| ROA | 1.16 | % | 1.25 | % | 0.67 | % | 1.17 | % | 0.68 | % | |||||||||||||||||||
| ROE | 9.93 | % | 10.61 | % | 5.54 | % | 9.88 | % | 5.49 | % | |||||||||||||||||||
ROTCE (1) | 12.85 | % | 13.71 | % | 7.21 | % | 12.80 | % | 7.16 | % | |||||||||||||||||||
| Net interest margin | 3.13 | % | 3.07 | % | 3.02 | % | 3.09 | % | 3.00 | % | |||||||||||||||||||
| Efficiency ratio | 50.70 | % | 53.58 | % | 53.77 | % | 52.72 | % | 54.45 | % | |||||||||||||||||||
| Noninterest expense / average assets | 1.67 | % | 1.70 | % | 1.69 | % | 1.68 | % | 1.72 | % | |||||||||||||||||||
(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 | Twelve Months Ended | ||||||||||||||||||||||||||||
| Pre-tax acquisition accounting adjustments | 12/31/2021 | 9/30/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Accretion on acquired loans | $ | 283 | $ | 368 | $ | 452 | $ | 1,722 | $ | 2,916 | |||||||||||||||||||
| Accretion on acquired credit deteriorated loans | 1,667 | 2,093 | 3,064 | 8,203 | 20,143 | ||||||||||||||||||||||||
| Amortization of premium on low income housing tax credits | (73) | (73) | (71) | (293) | (283) | ||||||||||||||||||||||||
| Accretion of discount on acquired subordinated debt | (296) | (295) | (289) | (1,175) | (1,143) | ||||||||||||||||||||||||
| Amortization of core deposit intangibles | (509) | (509) | (531) | (2,037) | (2,125) | ||||||||||||||||||||||||
| Total acquisition accounting adjustments | $ | 1,072 | $ | 1,584 | $ | 2,625 | $ | 6,420 | $ | 19,508 | |||||||||||||||||||
Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 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, including loans held for sale | $ | 13,447,009 | $ | 133,821 | 3.95 | % | $ | 13,286,382 | $ | 132,794 | 3.97 | % | $ | 13,046,443 | $ | 132,117 | 4.03 | % | |||||||||||||||||||||||||||||||||||
| Securities available for sale | 2,674,903 | 10,657 | 1.58 | % | 2,370,672 | 9,207 | 1.54 | % | 2,123,025 | 9,014 | 1.69 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB stock and other investments | 773,579 | 691 | 0.35 | % | 1,197,537 | 865 | 0.29 | % | 749,281 | 598 | 0.32 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | $ | 16,895,491 | $ | 145,169 | 3.41 | % | $ | 16,854,591 | $ | 142,866 | 3.36 | % | $ | 15,918,749 | $ | 141,729 | 3.54 | % | |||||||||||||||||||||||||||||||||||
| INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand, interest bearing | $ | 5,961,363 | $ | 5,522 | 0.37 | % | $ | 5,919,225 | $ | 5,946 | 0.40 | % | $ | 4,910,649 | $ | 5,541 | 0.45 | % | |||||||||||||||||||||||||||||||||||
| Savings | 316,758 | 946 | 1.18 | % | 310,525 | 920 | 1.18 | % | 305,341 | 898 | 1.17 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 2,823,613 | 2,437 | 0.34 | % | 2,914,977 | 2,774 | 0.38 | % | 4,240,500 | 10,495 | 0.98 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 9,101,734 | 8,905 | 0.39 | % | 9,144,727 | 9,640 | 0.42 | % | 9,456,490 | 16,934 | 0.71 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB advances | 216,882 | 648 | 1.19 | % | 200,000 | 640 | 1.27 | % | 204,900 | 657 | 1.28 | % | |||||||||||||||||||||||||||||||||||||||||
| Convertible notes, net | 216,078 | 1,322 | 2.39 | % | 215,840 | 1,321 | 2.39 | % | 203,807 | 2,383 | 4.58 | % | |||||||||||||||||||||||||||||||||||||||||
| Subordinated debentures | 101,295 | 976 | 3.77 | % | 100,993 | 969 | 3.75 | % | 100,118 | 999 | 3.90 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 9,635,989 | $ | 11,851 | 0.49 | % | 9,661,560 | $ | 12,570 | 0.52 | % | 9,965,315 | $ | 20,973 | 0.84 | % | ||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 5,967,251 | 5,848,983 | 4,637,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total funding liabilities/cost of funds | $ | 15,603,240 | 0.30 | % | $ | 15,510,543 | 0.32 | % | $ | 14,602,899 | 0.57 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest income/net interest spread | $ | 133,318 | 2.92 | % | $ | 130,296 | 2.84 | % | $ | 120,756 | 2.70 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.13 | % | 3.07 | % | 3.02 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,967,251 | $ | — | — | % | $ | 5,848,983 | $ | — | — | % | $ | 4,637,584 | $ | — | — | % | |||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 9,101,734 | 8,905 | 0.39 | % | 9,144,727 | 9,640 | 0.42 | % | 9,456,490 | 16,934 | 0.71 | % | |||||||||||||||||||||||||||||||||||||||||
| Total deposits | $ | 15,068,985 | $ | 8,905 | 0.23 | % | $ | 14,993,710 | $ | 9,640 | 0.26 | % | $ | 14,094,074 | $ | 16,934 | 0.48 | % | |||||||||||||||||||||||||||||||||||
Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Twelve Months Ended | |||||||||||||||||||||||||||||||||||
| 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||||||||||||||
| Interest | Interest | ||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||
| Balance | Expense | Yield/Cost | Balance | Expense | Yield/Cost | ||||||||||||||||||||||||||||||
| INTEREST EARNING ASSETS: | |||||||||||||||||||||||||||||||||||
| Loans, including loans held for sale | $ | 13,343,431 | $ | 528,174 | 3.96 | % | $ | 12,698,523 | $ | 554,967 | 4.37 | % | |||||||||||||||||||||||
| Securities available for sale | 2,392,589 | 35,492 | 1.48 | % | 1,899,948 | 39,362 | 2.07 | % | |||||||||||||||||||||||||||
| FHLB stock and other investments | 844,010 | 2,866 | 0.34 | % | 982,419 | 4,549 | 0.46 | % | |||||||||||||||||||||||||||
| Total interest earning assets | $ | 16,580,030 | $ | 566,532 | 3.42 | % | $ | 15,580,890 | $ | 598,878 | 3.84 | % | |||||||||||||||||||||||
| INTEREST BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
| Demand, interest bearing | $ | 5,657,958 | $ | 22,867 | 0.40 | % | $ | 4,729,438 | $ | 34,529 | 0.73 | % | |||||||||||||||||||||||
| Savings | 309,295 | 3,623 | 1.17 | % | 291,655 | 3,475 | 1.19 | % | |||||||||||||||||||||||||||
| Time deposits | 3,178,722 | 15,521 | 0.49 | % | 4,698,503 | 72,365 | 1.54 | % | |||||||||||||||||||||||||||
| Total interest bearing deposits | 9,145,975 | 42,011 | 0.46 | % | 9,719,596 | 110,369 | 1.14 | % | |||||||||||||||||||||||||||
| FHLB advances | 208,721 | 2,561 | 1.23 | % | 435,836 | 6,865 | 1.58 | % | |||||||||||||||||||||||||||
| Convertible notes, net | 215,633 | 5,289 | 2.42 | % | 201,859 | 9,457 | 4.61 | % | |||||||||||||||||||||||||||
| Subordinated debentures | 100,848 | 3,901 | 3.82 | % | 99,682 | 4,689 | 4.63 | % | |||||||||||||||||||||||||||
| Total interest bearing liabilities | 9,671,177 | $ | 53,762 | 0.56 | % | 10,456,973 | $ | 131,380 | 1.26 | % | |||||||||||||||||||||||||
| Noninterest bearing demand deposits | 5,581,803 | 3,840,935 | |||||||||||||||||||||||||||||||||
| Total funding liabilities/cost of funds | $ | 15,252,980 | 0.35 | % | $ | 14,297,908 | 0.92 | % | |||||||||||||||||||||||||||
| Net interest income/net interest spread | $ | 512,770 | 2.86 | % | $ | 467,498 | 2.58 | % | |||||||||||||||||||||||||||
| Net interest margin | 3.09 | % | 3.00 | % | |||||||||||||||||||||||||||||||
| Cost of deposits: | |||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,581,803 | $ | — | — | % | $ | 3,840,935 | $ | — | — | % | |||||||||||||||||||||||
| Interest bearing deposits | 9,145,975 | 42,011 | 0.46 | % | 9,719,596 | 110,369 | 1.14 | % | |||||||||||||||||||||||||||
| Total deposits | $ | 14,727,778 | $ | 42,011 | 0.29 | % | $ | 13,560,531 | $ | 110,369 | 0.81 | % | |||||||||||||||||||||||
Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCES: | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | 12/31/2021 | 12/31/2020 | % change | |||||||||||||||||||||||||||||||||||||||
| Loans receivable, including loans held for sale | $ | 13,447,009 | $ | 13,286,382 | 1 | % | $ | 13,046,443 | 3 | % | $ | 13,343,431 | $ | 12,698,523 | 5 | % | |||||||||||||||||||||||||||||||
| Securities, FHLB stock, and other investments | 3,448,482 | 3,568,209 | (3) | % | 2,872,306 | 20 | % | 3,236,599 | 2,882,367 | 12 | % | ||||||||||||||||||||||||||||||||||||
| Interest earning assets | 16,895,491 | 16,854,591 | — | % | 15,918,749 | 6 | % | 16,580,030 | 15,580,890 | 6 | % | ||||||||||||||||||||||||||||||||||||
| Total assets | 17,834,345 | 17,745,066 | 1 | % | 16,824,700 | 6 | % | 17,467,665 | 16,515,102 | 6 | % | ||||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 9,101,734 | 9,144,727 | — | % | 9,456,490 | (4) | % | 9,145,975 | 9,719,596 | (6) | % | ||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | 9,635,989 | 9,661,560 | — | % | 9,965,315 | (3) | % | 9,671,177 | 10,456,973 | (8) | % | ||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 5,967,251 | 5,848,983 | 2 | % | 4,637,584 | 29 | % | 5,581,803 | 3,840,935 | 45 | % | ||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 2,079,694 | 2,092,018 | (1) | % | 2,045,959 | 2 | % | 2,071,453 | 2,032,570 | 2 | % | ||||||||||||||||||||||||||||||||||||
| Net interest earning assets | 7,259,502 | 7,193,031 | 1 | % | 5,953,434 | 22 | % | 6,908,853 | 5,123,917 | 35 | % | ||||||||||||||||||||||||||||||||||||
| LOAN PORTFOLIO COMPOSITION: | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | ||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | $ | 4,208,674 | $ | 3,857,879 | 9 | % | $ | 4,157,787 | 1 | % | |||||||||||||||||||||||||||||||||||||
| Real estate loans | 9,105,931 | 8,908,657 | 2 | % | 8,772,134 | 4 | % | ||||||||||||||||||||||||||||||||||||||||
| Consumer and other loans | 638,138 | 652,155 | (2) | % | 633,292 | 1 | % | ||||||||||||||||||||||||||||||||||||||||
| Loans, net of deferred loan fees and costs | 13,952,743 | 13,418,691 | 4 | % | 13,563,213 | 3 | % | ||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (140,550) | (136,774) | (3) | % | (206,741) | 32 | % | ||||||||||||||||||||||||||||||||||||||||
| Loans receivable, net | $ | 13,812,193 | $ | 13,281,917 | 4 | % | $ | 13,356,472 | 3 | % | |||||||||||||||||||||||||||||||||||||
| REAL ESTATE LOANS BY PROPERTY TYPE: | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | ||||||||||||||||||||||||||||||||||||||||||
| Retail buildings | $ | 2,522,976 | $ | 2,466,881 | 2 | % | $ | 2,293,396 | 10 | % | |||||||||||||||||||||||||||||||||||||
| Hotels/motels | 1,308,405 | 1,385,003 | (6) | % | 1,634,287 | (20) | % | ||||||||||||||||||||||||||||||||||||||||
| Gas stations/car washes | 1,050,730 | 999,069 | 5 | % | 892,110 | 18 | % | ||||||||||||||||||||||||||||||||||||||||
| Mixed-use facilities | 854,793 | 819,516 | 4 | % | 750,867 | 14 | % | ||||||||||||||||||||||||||||||||||||||||
| Warehouses | 1,244,339 | 1,160,863 | 7 | % | 1,091,389 | 14 | % | ||||||||||||||||||||||||||||||||||||||||
| Multifamily | 744,068 | 691,262 | 8 | % | 518,498 | 44 | % | ||||||||||||||||||||||||||||||||||||||||
| Other | 1,380,620 | 1,386,063 | — | % | 1,591,587 | (13) | % | ||||||||||||||||||||||||||||||||||||||||
| Total | $ | 9,105,931 | $ | 8,908,657 | 2 | % | $ | 8,772,134 | 4 | % | |||||||||||||||||||||||||||||||||||||
| DEPOSIT COMPOSITION: | 12/31/2021 | 9/30/2021 | % change | 12/31/2020 | % change | ||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | $ | 5,751,870 | $ | 6,007,586 | (4) | % | $ | 4,814,254 | 19 | % | |||||||||||||||||||||||||||||||||||||
| Money market and other | 6,178,850 | 5,871,567 | 5 | % | 5,232,413 | 18 | % | ||||||||||||||||||||||||||||||||||||||||
| Saving deposits | 321,377 | 314,603 | 2 | % | 300,770 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
| Time deposits | 2,788,353 | 2,868,771 | (3) | % | 3,986,475 | (30) | % | ||||||||||||||||||||||||||||||||||||||||
| Total deposit balances | $ | 15,040,450 | $ | 15,062,527 | — | % | $ | 14,333,912 | 5 | % | |||||||||||||||||||||||||||||||||||||
| DEPOSIT COMPOSITION (%): | 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing demand deposits | 38.3 | % | 39.9 | % | 33.6 | % | |||||||||||||||||||||||||||||||||||||||||
| Money market and other | 41.1 | % | 39.0 | % | 36.5 | % | |||||||||||||||||||||||||||||||||||||||||
| Saving deposits | 2.1 | % | 2.1 | % | 2.1 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 18.5 | % | 19.0 | % | 27.8 | % | |||||||||||||||||||||||||||||||||||||||||
| Total deposit balances | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||||||||||||||||||||
Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
| CAPITAL RATIOS: | 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 2,092,983 | $ | 2,074,398 | $ | 2,053,745 | |||||||||||||||||||||||||||||||||||
| Common equity tier 1 ratio | 11.03 | % | 11.01 | % | 10.94 | % | |||||||||||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 11.70 | % | 11.70 | % | 11.64 | % | |||||||||||||||||||||||||||||||||||
| Total risk-based capital ratio | 12.42 | % | 12.42 | % | 12.87 | % | |||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 10.11 | % | 9.98 | % | 10.22 | % | |||||||||||||||||||||||||||||||||||
| Total risk weighted assets | $ | 15,036,292 | $ | 14,737,809 | $ | 14,341,456 | |||||||||||||||||||||||||||||||||||
| Book value per common share | $ | 17.44 | $ | 17.26 | $ | 16.66 | |||||||||||||||||||||||||||||||||||
Tangible common equity to tangible assets (1) | 9.31 | % | 9.24 | % | 9.50 | % | |||||||||||||||||||||||||||||||||||
Tangible common equity per share (1) | $ | 13.51 | $ | 13.33 | $ | 12.81 | |||||||||||||||||||||||||||||||||||
(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. | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES CHANGES: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 136,774 | $ | 189,452 | $ | 207,943 | $ | 206,741 | $ | 179,849 | $ | 206,741 | $ | 94,144 | |||||||||||||||||||||||||||
| CECL day 1 adoption impact | — | — | — | — | — | — | 26,200 | ||||||||||||||||||||||||||||||||||
| Provision (credit) for credit losses | 1,500 | (10,000) | (7,000) | 3,300 | 27,500 | (12,200) | 95,000 | ||||||||||||||||||||||||||||||||||
| Recoveries | 3,615 | 1,906 | 1,301 | 1,423 | 2,207 | 8,245 | 7,423 | ||||||||||||||||||||||||||||||||||
| Charge offs | (1,339) | (44,584) | (12,792) | (3,521) | (2,815) | (62,236) | (16,026) | ||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 140,550 | $ | 136,774 | $ | 189,452 | $ | 207,943 | $ | 206,741 | $ | 140,550 | $ | 206,741 | |||||||||||||||||||||||||||
| Net (recoveries) charge offs / average loans receivable (annualized) | (0.07) | % | 1.28 | % | 0.35 | % | 0.06 | % | 0.02 | % | 0.40 | % | 0.07 | % | |||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||
| NET (RECOVERIES) CHARGE OFFS: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||||||||||||||
| Real estate loans | $ | (2,352) | $ | 40,542 | $ | 11,281 | $ | 2,234 | $ | (726) | $ | 51,705 | $ | 6,806 | |||||||||||||||||||||||||||
| Commercial loans | 144 | 1,117 | 181 | (80) | 1,167 | 1,362 | 632 | ||||||||||||||||||||||||||||||||||
| Consumer loans | (68) | 1,019 | 29 | (56) | 167 | 924 | 1,165 | ||||||||||||||||||||||||||||||||||
| Total net (recoveries) charge offs | $ | (2,276) | $ | 42,678 | $ | 11,491 | $ | 2,098 | $ | 608 | $ | 53,991 | $ | 8,603 | |||||||||||||||||||||||||||
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| NONPERFORMING ASSETS: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
Loans on nonaccrual status (1) | $ | 54,616 | $ | 54,380 | $ | 111,008 | $ | 109,858 | $ | 85,238 | |||||||||||||||||||
| Delinquent loans 90 days or more on accrual status | 2,131 | 4,567 | 4,759 | 384 | 614 | ||||||||||||||||||||||||
| Accruing troubled debt restructured loans | 52,418 | 39,509 | 51,360 | 41,773 | 37,354 | ||||||||||||||||||||||||
| Total nonperforming loans | 109,165 | 98,456 | 167,127 | 152,015 | 123,206 | ||||||||||||||||||||||||
| Other real estate owned | 2,597 | 15,213 | 16,619 | 18,515 | 20,121 | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 111,762 | $ | 113,669 | $ | 183,746 | $ | 170,530 | $ | 143,327 | |||||||||||||||||||
| Nonperforming assets/total assets | 0.62 | % | 0.64 | % | 1.05 | % | 0.99 | % | 0.84 | % | |||||||||||||||||||
| Nonperforming assets/loans receivable & OREO | 0.80 | % | 0.85 | % | 1.37 | % | 1.24 | % | 1.06 | % | |||||||||||||||||||
| Nonperforming assets/total capital | 5.34 | % | 5.48 | % | 8.78 | % | 8.34 | % | 6.98 | % | |||||||||||||||||||
| Nonperforming loans/loans receivable | 0.78 | % | 0.73 | % | 1.24 | % | 1.11 | % | 0.91 | % | |||||||||||||||||||
| Nonaccrual loans/loans receivable | 0.39 | % | 0.41 | % | 0.83 | % | 0.80 | % | 0.63 | % | |||||||||||||||||||
| Allowance for credit losses/loans receivable | 1.01 | % | 1.02 | % | 1.41 | % | 1.52 | % | 1.52 | % | |||||||||||||||||||
| Allowance for credit losses/nonaccrual loans | 257.34 | % | 251.52 | % | 170.67 | % | 189.28 | % | 242.55 | % | |||||||||||||||||||
| Allowance for credit losses/nonperforming loans | 128.75 | % | 138.92 | % | 113.36 | % | 136.79 | % | 167.80 | % | |||||||||||||||||||
| Allowance for credit losses/nonperforming assets | 125.76 | % | 120.33 | % | 103.11 | % | 121.94 | % | 144.24 | % | |||||||||||||||||||
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $19.5 million, $20.6 million, $23.6 million, $25.0 million, and $26.5 million, at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively. | |||||||||||||||||||||||||||||
| NONACCRUAL LOANS BY TYPE: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Real estate loans | $ | 39,756 | $ | 41,673 | $ | 95,622 | $ | 91,940 | $ | 67,450 | |||||||||||||||||||
| Commercial loans | 11,025 | 10,991 | 12,217 | 14,080 | 13,911 | ||||||||||||||||||||||||
| Consumer loans | 3,835 | 1,716 | 3,169 | 3,838 | 3,877 | ||||||||||||||||||||||||
| Total nonaccrual loans | $ | 54,616 | $ | 54,380 | $ | 111,008 | $ | 109,858 | $ | 85,238 | |||||||||||||||||||
| BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Retail buildings | $ | 28,483 | $ | 11,280 | $ | 12,110 | $ | 6,319 | $ | 5,408 | |||||||||||||||||||
| Hotels/motels | 472 | — | — | — | — | ||||||||||||||||||||||||
| Gas stations/car washes | 197 | 202 | 206 | 210 | 219 | ||||||||||||||||||||||||
| Mixed-use facilities | 2,846 | 7,937 | 7,967 | 3,377 | 3,521 | ||||||||||||||||||||||||
| Warehouses | 5,366 | 4,908 | 14,099 | 14,124 | 7,296 | ||||||||||||||||||||||||
Other (2) | 15,054 | 15,182 | 16,978 | 17,743 | 20,910 | ||||||||||||||||||||||||
| Total | $ | 52,418 | $ | 39,509 | $ | 51,360 | $ | 41,773 | $ | 37,354 | |||||||||||||||||||
(2) Includes commercial business, consumer and other loans | |||||||||||||||||||||||||||||
Table Page 8
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| 30 - 59 days | $ | 29,723 | $ | 15,016 | $ | 22,466 | $ | 18,175 | $ | 11,347 | |||||||||||||||||||
| 60 - 89 days | 10,345 | 4,746 | 6,987 | 8,314 | 16,826 | ||||||||||||||||||||||||
| Total | $ | 40,068 | $ | 19,762 | $ | 29,453 | $ | 26,489 | $ | 28,173 | |||||||||||||||||||
| ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Real estate loans | $ | 20,232 | $ | 10,359 | $ | 21,432 | $ | 18,331 | $ | 15,689 | |||||||||||||||||||
| Commercial loans | 3,057 | 9,377 | 560 | 1,002 | 3,393 | ||||||||||||||||||||||||
| Consumer loans | 16,779 | 26 | 7,461 | 7,156 | 9,091 | ||||||||||||||||||||||||
| Total | $ | 40,068 | $ | 19,762 | $ | 29,453 | $ | 26,489 | $ | 28,173 | |||||||||||||||||||
| CRITICIZED LOANS: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Special mention | $ | 257,194 | $ | 306,766 | $ | 294,559 | $ | 280,974 | $ | 184,941 | |||||||||||||||||||
| Substandard | 242,397 | 243,684 | 380,955 | 379,048 | 366,557 | ||||||||||||||||||||||||
| Total criticized loans | $ | 499,591 | $ | 550,450 | $ | 675,514 | $ | 660,022 | $ | 551,498 | |||||||||||||||||||
Table Page 9
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
| Reconciliation of GAAP financial measures to non-GAAP financial measures: | |||||||||||||||||||||||||||||
Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below. | |||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | |||||||||||||||||||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | |||||||||||||||||||||||||||||
| Average stockholders’ equity | $ | 2,079,694 | $ | 2,092,018 | $ | 2,045,959 | $ | 2,071,453 | $ | 2,032,570 | |||||||||||||||||||
| Less: Goodwill and core deposit intangible assets, net | (472,405) | (472,918) | (474,467) | (473,177) | (475,263) | ||||||||||||||||||||||||
| Average tangible common equity | $ | 1,607,289 | $ | 1,619,100 | $ | 1,571,492 | $ | 1,598,276 | $ | 1,557,307 | |||||||||||||||||||
| Net Income | $ | 51,623 | $ | 55,499 | $ | 28,319 | $ | 204,572 | $ | 111,515 | |||||||||||||||||||
| Return on average tangible common equity (annualized) | 12.85 | % | 13.71 | % | 7.21 | % | 12.80 | % | 7.16 | % | |||||||||||||||||||
| TANGIBLE COMMON EQUITY | 12/31/2021 | 9/30/2021 | 12/31/2020 | ||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 2,092,983 | $ | 2,074,398 | $ | 2,053,745 | |||||||||||||||||||||||
| Less: Goodwill and core deposit intangible assets, net | (472,121) | (472,630) | (474,158) | ||||||||||||||||||||||||||
| Tangible common equity | $ | 1,620,862 | $ | 1,601,768 | $ | 1,579,587 | |||||||||||||||||||||||
| Total assets | $ | 17,889,061 | $ | 17,799,026 | $ | 17,106,664 | |||||||||||||||||||||||
| Less: Goodwill and core deposit intangible assets, net | (472,121) | (472,630) | (474,158) | ||||||||||||||||||||||||||
| Tangible assets | $ | 17,416,940 | $ | 17,326,396 | $ | 16,632,506 | |||||||||||||||||||||||
| Common shares outstanding | 120,006,452 | 120,198,061 | 123,264,864 | ||||||||||||||||||||||||||
| Tangible common equity to tangible assets | 9.31 | % | 9.24 | % | 9.50 | % | |||||||||||||||||||||||
| Tangible common equity per share | $ | 13.51 | $ | 13.33 | $ | 12.81 | |||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | |||||||||||||||||||||||||
| PRE-PROVISION NET REVENUE | |||||||||||||||||||||||||||||
| Net interest income before provision (credit) for credit losses | $ | 133,318 | $ | 130,296 | $ | 120,756 | $ | 512,770 | $ | 467,498 | |||||||||||||||||||
| Noninterest income | 13,097 | 10,617 | 11,415 | 43,594 | 53,432 | ||||||||||||||||||||||||
| Revenue | 146,415 | 140,913 | 132,171 | 556,364 | 520,930 | ||||||||||||||||||||||||
| Noninterest expense | 74,236 | 75,502 | 71,063 | 293,292 | 283,639 | ||||||||||||||||||||||||
| Pre-provision net revenue | $ | 72,179 | $ | 65,411 | $ | 61,108 | $ | 263,072 | $ | 237,291 | |||||||||||||||||||
Table Page 10
News Release
HOPE BANCORP DECLARES QUARTERLY CASH DIVIDEND OF $0.14 PER SHARE
LOS ANGELES - January 24, 2022 - Hope Bancorp, Inc. (NASDAQ: HOPE) today announced that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The dividend is payable on or about February 17, 2022 to all stockholders of record as of the close of business on February 3, 2022.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Tuesday, January 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2021. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available in the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 1, 2022, replay access code 7703555.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $17.89 billion in total assets as of December 31, 2021. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Contacts:
Alex Ko Senior EVP & Chief Financial Officer 213-427-6560 | Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 | ||||
# # #
News Release
HOPE BANCORP ANNOUNCES NEW $50 MILLION STOCK REPURCHASE PROGRAM
LOS ANGELES - January 24, 2022 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today announced that its board of directors has approved a new stock repurchase program authorizing the Company to repurchase up to $50 million of its common stock.
“The strong financial performance for the 2021 fourth quarter further supports our board and management’s confidence in the long-term prospects of our franchise,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “This new $50 million stock repurchase program underscores our ongoing commitment to returning capital to our shareholders.”
The stock repurchase authorization does not have any expiration date and may be modified, amended, suspended or discontinued at the Company’s discretion at any time without notice. Stock repurchases may be made in open-market transactions, in block transactions on or off an exchange, in privately negotiated transactions or by other means as determined by the Company’s management and in accordance with the regulations of the Securities and Exchange Commission. The timing of repurchases and the number of shares repurchased under the program will depend on a variety of factors including price, trading volume, corporate and regulatory requirements and market conditions. Repurchases may also be made under a trading plan under Rule 10b5-1, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions.
Investor Conference Call
The Company previously announced that it will host an investor conference call on Tuesday, January 25, 2022 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter and full year ended December 31, 2021. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available in the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through February 1, 2022, replay access code 7703555.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean-American bank in the United States with $17.89 billion in total assets as of December 31, 2021. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 54 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: the timing of repurchases and the number of shares repurchased under the stock repurchase program; possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Contacts:
Alex Ko Senior EVP & Chief Financial Officer 213-427-6560 | Angie Yang SVP, Director of Investor Relations & Corporate Communications 213-251-2219 | ||||
# # #
2021 Fourth Quarter and Full-Year Earnings Conference Call Tuesday, January 25, 2022
Forward Looking Statements & Additional Disclosures This presentation contains statements regarding future events or the future financial performance of the Company that constitute forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward- looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, including the timing and effects of the implementation of the current expected credit losses model; regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Earnings & Profitability • Net interest income before provision for credit losses increased 2% to $133.3 million • Efficiency ratio improved 288bps Q-o-Q to 50.70%; noninterest expense to average assets improved 3bps to 1.67% • PPNR1 increased 10% Q-o-Q to $72.2 million • Net interest margin expanded 6bps Q-o-Q largely reflecting redeployment of excess liquidity Loans • New loan production increased 23% Q-o-Q to a record $1.24 billion from $1.01 billion in 3Q21 • Excluding PPP, loans receivable increased 4.9% Q-o-Q, or 19.6% annualized Deposits • Average noninterest bearing deposits increased 2.0% Q-o-Q • Cost of interest-bearing deposits and total cost of deposits each decreased 3 basis points Q-o-Q Asset Quality • Total nonperforming assets decreased to $111.8 million • Total criticized loans decreased 9.2% Q-o-Q • Net recoveries of $2.3 million related to a large loan charged off in 3Q21 Q4 2021 Financial Highlights 3 Net Income $51.6M Diluted EPS $0.43 Gross Loans $13.95B Total Deposits $15.04B 1 PPNR (pre-provision net revenue) is a non-GAAP financial measure. A quantitative reconciliation of the GAAP to non-GAAP financial measure is provided on Slide 16.
Loan Production & Portfolio Trends 4 (Excluding PPP loans) New Loan Originations Funded ($ Millions) 1 Represents average rate on new loans excluding PPP loans. Including PPP loans, the average rate on new loan originations was 2.56% for 1Q21 and 3.32% for 2Q21 $340 $311 $520 $590 $623 $305 $20 $439 $160 $301 $344 $539 $65 $71 $53 $75 $81 3.27% 3.44% 3.37%1 3.36%1 3.38% 4Q20 1Q21 2Q21 3Q21 4Q21 $1,242.9 $844.2 $847.1 $1,009.2 $894.1 CRE PPP C&I Consumer Average Rate Q-o-Q increase • Loans receivable increased 4.0% Q-o-Q, or 15.9% annualized • Excluding PPP, loans receivable increased 4.9% Q-o-Q, or 19.6% annualized • Aggregate payoffs and paydowns decreased to $881.3 million from $904.7 million in 3Q21 +6% +23% +0% +13% $13.11 $12.99 $12.86 $13.08 $13.72 12 .25 12 .45 12 .65 12 .85 13 .05 13 .25 13 .45 13 .65 13 .85 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 Loans Receivable (Excluding PPP) • New loan originations funded increased 23.2% Q-o-Q to a record high $1.24 billion • New loan production reflects a diverse mix of 50% CRE, 43% C&I and 7% Consumer loans • Average rate on new loans increased 2bps Q-o-Q Loans Receivable (Excluding PPP) ($ Billions) Q-o-Q increase -1% +5% -1% +2%
Net Interest Income and Margin 5 • Net interest income increased 2% Q-o-Q and 10% Y-o-Y reflecting higher interest income on loans and investment securities and lower interest expense on deposits Net Interest Income & NIM ($ Millions) $120.8 $122.6 $126.6 $130.3 $133.3 3.02% 3.06% 3.11% 3.07% 3.13% 4Q20 1Q21 2Q21 3Q21 4Q21 3.07% 3.13% Deposit cost decline Net cash deployment Loan yield decline (including accretion) +6bps +2bps 4Q21 net interest margin increased 6bps Q-o-Q Net Interest Income NIM Increase Decrease Total Q-o-Q increase +3% +3% +2% +2% Net Interest Margin 3Q21 4Q21 -2bps • 6bps improvement in net interest margin largely benefitting from redeployment of excess liquidity into loans
Interest Rate Risk 50% 68% 33% 36% 48% 50% 32% 67% 64% 52% 3.27% 3.44% 1 3.37% 1 3.36% 3.38% 4Q20 1Q21 2Q21 3Q21 4Q21 Fixed Variable Avg Rate 1 Average rate on new loans including SBA PPP was 2.56% for 1Q21 and 3.32% for 2Q21 (Excluding PPP loans) Variable 41% @3.23%2 Fixed 32% @3.60%2,3 Hybrid 1 27% @4.15%2 New Loan Fixed/Variable & Average Rate Fixed / Variable Breakdown (As of 12/31/2021) 1 Hybrid loans have fixed interest rates for a specified period and then convert to variable interest rates (fixed as of 12/31/2021) 2 The weighted average rate represents coupon rate and excludes loan discount accretion and interest on nonaccrual loans 3 Excluding SBA PPP loans, average yield for fixed rate loans is 3.74% • Positioned as asset sensitive at 12/31/2021 and expect net interest income to increase as interest rates rise • Significant increases in noninterest bearing demand deposits during 2021 increased asset sensitive position at 12/31/21 vs. year-end 2020 • Variable rate loans as percentage of total loans trended higher in 2021 and was 41% at 12/31/21 6
Noninterest Income 7 • Noninterest income increased 23% Q-o-Q to $13.1 million vs. $10.6 million in 3Q21 • All components of primary customer-related service fees* increased Q-o-Q • Sold $41.0 million of the guaranteed portion of SBA 7(a) loans to the secondary market in 4Q21 vs. $31.3 million in 3Q21 • Sold $34.9 million of residential mortgage loans vs. $40.2 million in 3Q21 • Increase in other income and fees Q-o-Q largely reflects higher swap fee income and equity investment dividend income * Primary Customer-Related Service Fees include service fees on deposit accounts, international service fees, loan servicing fees, and wire transfer fees $5.1 $4.5 $4.4 $4.2 $4.6 $2.4 $2.5 $3.6 $1.6 $2.1 $1.0 $0.8 $0.5 $4.7 $2.2 $3.2 $3.2 $4.3 4Q20 1Q21 2Q21 3Q21 4Q21 Other Income and Fees Gain on Sale of Mortgage Loans Gain on Sale of SBA Loans Primary Customer-Related Service Fees* $13.1 $11.4 $8.8 $11.1 $10.6 Noninterest Income ($ Millions)
• Noninterest expense decreased to $74.2 million from $75.5 million in 3Q21 • 4Q21 salaries and benefits reflects more normalized bonus reserves, stock compensation expense and increased deferred loan origination costs Efficiency Ratio & Noninterest Expense to Average Assets 4 53.77% 53.61% 53.12% 53.58% 50.70% 1.69% 1.65% 1.70% 1.70% 1.67% 4Q20 1Q21 2Q21 3Q21 4Q21 Efficiency Ratio Noninterest Expense/Avg Assets 8 $40.9 $41.2 $42.3 $47.0 $44.6 $18.3 $19.7 $22.1 $20.6 $21.0 $1.9 $2.5 $0.3 $1.5 $1.7$10.01 $7.0 $8.42 $6.4 $7.0 1,408 1,444 1,438 1,449 1,476 4Q20 1Q21 2Q21 3Q21 4Q21 Compensation Other core operating expenses Credit related & OREO Other Full-time employee (FTE) $74.2 $71.1 $70.4 $73.1 $75.5 Noninterest Expense and Efficiency Noninterest Expense & FTE ($ Millions) 1. 4Q20 included branch restructuring costs of $2.4MM 2. 2Q21 included software charge off expense of $2.1MM 3. Other core operating expenses include: Occupancy & equipment, Advertising & marketing, Data & communications, Professional fees and FDIC assessment • Efficiency ratio improved 288bps Q-o-Q to 50.70% vs. 53.58% in 3Q21 • Noninterest expense to average assets improved 3bps to 1.67% from 1.70% in 3Q21 3
Deposit Trends 9 Deposit Composition ($ Billions) Deposit Cost Trend Average Deposits and Cost of Interest-Bearing Deposits ($ Billions) • Total cost of deposits decreased 3bps Q-o-Q • Represents 9th consecutive quarter of declining deposit cost 0.51% 0.48%0.44% 0.40% 0.36% 0.32%0.31%0.30% 0.28%0.27% 0.25%0.24%0.24%0.23%0.23% $9.5 $9.3 $9.0 $9.1 $9.1 $4.6 $5.1 $5.4 $5.8 $6.0 0.71% 0.56% 0.48% 0.42% 0.39% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 4Q20 1Q21 2Q21 3Q21 4Q21 Average Noninterest Bearing Deposits Average Interest Bearing Deposits Cost of Interest Bearing Deposits $4.8 $5.4 $5.6 $6.0 $5.8 $5.2 $5.0 $5.8 $5.9 $6.2 $0.3 $0.3 $0.3 $0.3 $0.3$4.0 $3.6 $3.0 $2.9 $2.8 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 $15.06$14.73$14.30$14.33 $15.04 +12%-1% -0%+9% Q-o-Q growth annualized Quarterly Cost of Deposits Monthly Cost of Deposits DDA MMA/NOW Savings Time 0.26% 3Q21 0.30% 2Q21 0.36% 1Q21 0.48% 4Q20 0.23% 4Q21 • Average noninterest bearing demand deposits increased 2% Q-o-Q contributing to deposit cost decline • Total cost of interest-bearing deposits decreased 3bps Q-o-Q • Deposit mix continued to improve with non-time deposits accounting for 81.5% of total deposits vs. 81.0% at 9/30/21 • MMA & NOW deposits increased 5% Q-o-Q and accounted for 41% of total deposits at 12/31/21 $14.99$14.46$14.38$14.09 $15.07
Asset Quality Nonperforming Assets ($ Millions) Total Criticized Loans ($ Millions) Provision (Credit) for Credit Losses & Net Charge Off (Recoveries) ($ Millions) 10 $123.2 $152.0 $167.1 $98.5 $109.2 $20.1 $18.5 $16.6 $15.2 $2.6 0.84% 0.99% 1.05% 0.64% 0.62% 4Q20 1Q21 2Q21 3Q21 4Q21 NPLs OREO NPAs/Total Assets $184.9 $281.0 $294.6 $306.8 $257.2 $366.6 $379.0 $381.0 $243.7 $242.4 4.07% 4.82% 5.03% 4.10% 3.58% 4Q20 1Q21 2Q21 3Q21 4Q21 Substandard & Doubtful Special Mention Total Criticized Loans as a % of Gross Loans $27.5 $3.3 -$7.0 -$10.0 $1.5 0.02% 0.06% 0.35% 1.28% -0.07% 4Q20 1Q21 2Q21 3Q21 4Q21 Provision for Credit Losses Net Charge Offs (Recoveries) (annualized) (Credit) for Credit Losses • Special mention loans decreased by $49.6 million Q-o-Q reflecting continued progress with borrowers post COVID modifications • Total criticized loans declined to 3.58% of loans receivable vs. 4.10% at 9/30/21 • Provision for credit losses of $1.5 million reflects improved credit quality and net recoveries during the quarter • Net recoveries of $2.3 million, or -0.07% of average loans receivable, annualized • Total nonperforming assets decreased to $111.8 million vs. $113.7 million as of 9/30/21, primarily reflecting the disposition of one large OREO property • Nonperforming assets decreased to 0.62% of total assets vs. 0.64% at 9/30/21 $111.8 $143.3 $170.5 $183.7 $113.7 $499.6 $551.5 $660.0 $675.5 $550.5
12.42% 9.98% 11.01% 11.70% $13.33 12.42% 10.11% 11.03% 11.70% $13.51 Total Risk-Based Capital Ratio Tier 1 Leverage Ratio Tier 1 Common Equity Ratio Tier 1 Capital Ratio Tangible Common Equity per Share 9/30/2021 12/31/2021 $17.3 $17.3 $17.3 $17.3 $16.8 $47.2 $2.8 4Q20 1Q21 2Q21 3Q21 4Q21 Dividends Buybacks Strong Capital Position & Returns Capital Positions Dividends & Buybacks ($ Millions) Maintaining strong levels of capital • All capital ratios stable or improved Q-o-Q • Tangible common equity per share increased 18 cents to $13.51 Enhancing shareholder returns • Quarterly common stock dividend maintained at $0.14 per share • Completed $50 million stock repurchase program announced in 3Q21 • Repurchased 3,682,268 shares at average price of $13.58 reducing shares outstanding by 3.0% • Dividend yield: 3.81% | Dividend payout ratio: 33.71% (TTM) 11
New loan production accelerated throughout 2021 and positions Company to return to historically strong growth rates Continued to enhance the mix of deposits which contributed to decreasing deposit costs throughout 2021 Strong core performance with pre-provision net revenue1 increasing 11% over 2020 Completed significant de-risking and rebalancing of loan portfolio and expect steady improvement in asset quality for 2022 Managed through an Uncertain 2021 and Delivered Significant Achievements Loan Production Deposit Mix Profitability Asset Quality 1 Pre-provision net revenue is a non-GAAP financial measure. A quantitative reconciliation of the GAAP to non-GAAP financial measure is provided on Slide 16.
Near-Term Outlook 13 Loan Growth: Re-energized focus on business development expected to lead to high single-digit to low double-digit loan growth for 2022, excluding PPP Noninterest Expenses: Noninterest expense to average assets expected to be in the range of 1.65% to 1.70% Net Interest Margin: Stable NIM expected for 1Q22 due to stability in loan yields and deposit costs Asset Quality: Anticipate improving asset quality metrics with criticized balances trending down approximately 20-30% by year-end Profitability: Enhanced profitability metrics expected to be driven by increasing earning assets and improving asset quality metrics
Q&A 2021 Fourth Quarter and Full-Year Earnings Conference Call
Appendix
Appendix: Non-GAAP Financials Pre-provision Net Revenue (PPNR) ($ in thousands) 4Q21 3Q21 4Q20 Net interest income before provision (credit) for credit losses $ 133,318 $ 130,296 $ 120,756 Noninterest income 13,097 10,617 11,415 Revenue 146,415 140,913 132,171 Less: noninterest expense 74,236 75,502 71,063 Pre-provision net revenue $ 72,179 $ 65,411 $ 61,108 ($ in thousands) 4Q21 3Q21 4Q20 Average stockholders’ equity $ 2,079,694 $ 2,092,018 $ 2,045,959 Less: goodwill and core deposit intangible assets, net (472,405) (472,918) (474,467) Average tangible common equity $ 1,607,289 $ 1,619,100 $ 1,571,492 Net Income $ 51,623 $ 55,499 $ 28,319 Return on average tangible common equity (annualized) 12.85% 13.71% 7.21% Return on Average Tangible Common Equity (ROTCE) Management reviews select non-GAAP financial measures in evaluating the Company’s financial performance and in response to market participant interest. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below.