Hope Bancorp Files Q2 2024 10-Q

TL;DR

**HOPE BANCORP 10-Q FILED: Q2 2024 FINANCIALS OUT NOW**

AI Summary

Hope Bancorp, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial data and disclosures relevant to investors and stakeholders are presented.

Why It Matters

This filing provides investors with a detailed look at Hope Bancorp's financial health and performance during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — As a financial institution, Hope Bancorp is subject to various market, credit, and regulatory risks inherent in the banking industry.

Key Numbers

• 2024 Q2 — Reporting Period (Financials for the second quarter of 2024 are detailed.)
• 2023-12-31 — Fiscal Year End (Indicates the company's fiscal year concludes on December 31st.)

Key Players & Entities

• HOPE BANCORP INC (company) — Filer of the 10-Q
• 20240630 (date) — Period of report for the 10-Q
• 3200 WILSHIRE BLVD (location) — Business and mailing address
• LOS ANGELES (location) — City of business and mailing address
• BBCN BANCORP INC (company) — Former company name
• NARA BANCORP INC (company) — Former company name

FAQ

Key Financial Figures

• $0.001 — ) of the Act: Common Stock, par value $0.001 per share HOPE NASDAQ Global Select Mar
• $1,000 — t an initial rate of 45.0760 shares per $1,000 principal amount of the notes (See Note

Filing Documents

• hope-20240630.htm (10-Q) — 3562KB
• ex311-06302024.htm (EX-31.1) — 10KB
• ex312-06302024.htm (EX-31.2) — 9KB
• ex321-06302024.htm (EX-32.1) — 5KB
• ex322-06302024.htm (EX-32.2) — 5KB
• 0001128361-24-000030.txt ( ) — 18350KB
• hope-20240630.xsd (EX-101.SCH) — 89KB
• hope-20240630_cal.xml (EX-101.CAL) — 118KB
• hope-20240630_def.xml (EX-101.DEF) — 556KB
• hope-20240630_lab.xml (EX-101.LAB) — 1126KB
• hope-20240630_pre.xml (EX-101.PRE) — 854KB
• hope-20240630_htm.xml (XML) — 4187KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS Consolidated Statements of Financial Condition (Unaudited) 4 Consolidated Statements of Income (Unaudited) 6 Consolidated Statements of Comprehensive Income (Unaudited) 7 Consolidated Statements of Changes in Stockholders' Equity (Unaudited) 8 Consolidated Statements of Cash Flows (Unaudited) 10

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 1. Hope Bancorp, Inc. 11 2. Basis of Presentation 12 3. Earnings Per Share ("EPS") 13 4. Equity Investments 14 5. Investment Securities 15 6. Loans Receivable and Allowance for Credit Losses 19 7. Leases 30 8. Deposits 32 9. Borrowings 33 10. Convertible Notes and Subordinated Debentures 34 11. Derivative Financial Instruments 36 12. Commitments and Contingencies 39 13. Goodwill, Intangible Assets, and Servicing Assets 40 14. Income Taxes 42 15. Fair Value Measurements 43 16. Stockholders' Equity 50 17. Stock-Based Compensation 51 18. Regulatory Matters 53 19. Revenue Recognition 55

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 56

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 78

CONTROLS AND PROCEDURES

Item 4. CONTROLS AND PROCEDURES 80

- OTHER INFORMATION

PART II - OTHER INFORMATION

LEGAL PROCEEDINGS 81

Item 1. LEGAL PROCEEDINGS 81

RISK FACTORS 81

Item 1A. RISK FACTORS 81

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 82

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 82

DEFAULTS UPON SENIOR SECURITIES 82

Item 3. DEFAULTS UPON SENIOR SECURITIES 82

MINE SAFETY DISCLOSURES 82

Item 4. MINE SAFETY DISCLOSURES 82

OTHER INFORMATION 82

Item 5. OTHER INFORMATION 82

EXHIBITS 82

Item 6. EXHIBITS 82 INDEX TO EXHIBITS 83 SIGNATURES 84 2

Forward-Looking Statements

Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q 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," "projects," "forecasts," "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 known and unknown risks, trends, uncertainties, and factors that are beyond the Company's control or ability to predict. 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: possible further deterioration in economic conditions in our areas of operation; 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; geopolitical instability or unrest; regulatory risks associated with current and future regulations; and risks associated with the execution of our organizational restructuring and failing to achieve its anticipated results. In addition, there are risks and uncertainties related to our proposed merg

Financial Statements

Item 1. Financial Statements HOPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, 2024 December 31, 2023 ASSETS (Dollars in thousands, except share data) Cash and cash equivalents: Cash and due from banks $ 187,817 $ 172,813 Interest earning cash in other banks 466,227 1,756,154 Total cash and cash equivalents 654,044 1,928,967 Investment securities available for sale ("AFS"), at fair value 1,914,791 2,145,059 Investment securities held to maturity ("HTM"), at amortized cost; fair value of $ 237,621 and $ 250,518 at June 30, 2024 and December 31, 2023, respectively 258,068 263,912 Equity investments 44,278 43,750 Loans held for sale, at lower of cost or fair value 68,316 3,408 Loans receivable, net of allowance for credit losses of $ 156,019 and $ 158,694 at June 30, 2024 and December 31, 2023, respectively 13,410,983 13,694,925 Other real estate owned ("OREO"), net — 63 Federal Home Loan Bank ("FHLB") stock, at cost 17,250 17,250 Premises and equipment, net 50,919 50,611 Accrued interest receivable 57,645 61,720 Deferred tax assets, net 143,343 135,215 Bank owned life insurance ("BOLI") 89,917 89,061 Investments in affordable housing partnerships 50,057 54,474 Operating lease right-of-use assets ("ROU"), net 41,922 46,611 Goodwill 464,450 464,450 Core deposit intangible assets, net 3,133 3,935 Servicing assets, net 8,984 9,631 Other assets 96,991 118,480 Total assets $ 17,375,091 $ 19,131,522 (Continued) 4 HOPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, 2024 December 31, 2023 LIABILITIES AND STOCKHOLDERS' EQUITY (Dollars in thousands, except share data) LIABILITIES: Deposits: Noninterest bearing $ 3,671,192 $ 3,914,967 Interest bearing: Money market and NOW accounts 4,118,651 4,169,543 Savings deposits 789,209 702,486 Time deposits 6,132,419 5,966,757 Total deposits 14,711,471 14,753,753 FHLB and Federal Res

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Hope Bancorp, Inc. Hope Bancorp, Inc. ("Hope Bancorp" on a parent-only basis and the "Company" on a consolidated basis), headquartered in Los Angeles, California, is the holding company for Bank of Hope (the "Bank"). At June 30, 2024, the Bank had 48 branches and nine loan production offices in California, New York, Texas, Washington, Illinois, New Jersey, Virginia, Georgia, Alabama, Colorado and Oregon, as well a representative office in Seoul, South Korea. The Company is a corporation organized under the laws of the state of Delaware and a bank holding company registered under the Bank Holding Company Act of 1956, as amended. On March 28, 2024, the Bank entered into a Purchase and Assumption Agreement with PromiseOne Bank, a Georgia state bank, to sell the deposits, other liabilities and certain physical assets of the Bank's two branches located in Virginia (Annandale and Centreville). The transaction is expected to be completed in the second half of 2024, subject to regulatory approvals and other customary closing conditions. On April 26, 2024, the Company entered into a merger agreement with Territorial Bancorp Inc. ("Territorial"), headquartered in Honolulu, Hawaii. Under the terms of the merger agreement, Territorial will merge with and into the Company, immediately followed by the merger of Territorial's subsidiary bank, Territorial Savings Bank, with and into the Company's subsidiary bank, Bank of Hope. Upon completion of the transaction, Territorial shareholders will receive a fixed exchange ratio of 0.8048 shares of the Company's common stock in exchange for each share of Territorial common stock they own. Based on the closing price of the Company's common stock on April 26, 2024, this represented a value of $ 8.82 per share of Territorial common stock, although the actual value will be determined upon the completion of the merger. The transaction is expected to close by year-end 2024, subjec

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