Hope Bancorp Q3 2024 10-Q Filed

TL;DR

**HOPE BANCORP Q3 2024 10-Q FILED - BANKING PERFORMANCE DETAILS AVAILABLE NOW**

AI Summary

Hope Bancorp, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter of 2024. Key financial data and business segments are presented, reflecting the company's status as a national commercial bank.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for Hope Bancorp, crucial for understanding the bank's health and strategic direction.

Risk Assessment

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

Key Numbers

• 2024 Q3 — Reporting Period (Financial performance for the third quarter of 2024 is detailed.)
• 2023-12-31 — Fiscal Year End (Indicates the company's annual reporting cycle.)

Key Players & Entities

• HOPE BANCORP INC (company) — Filer
• BBCN BANCORP INC (company) — Former Company Name
• NARA BANCORP INC (company) — Former Company Name
• 20240930 (date) — Period of Report
• 20241108 (date) — Filing Date

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-20240930.htm (10-Q) — 3642KB
• ex311-09302024.htm (EX-31.1) — 10KB
• ex312-09302024.htm (EX-31.2) — 9KB
• ex321-09302024.htm (EX-32.1) — 5KB
• ex322-09302024.htm (EX-32.2) — 5KB
• 0001128361-24-000039.txt ( ) — 18836KB
• hope-20240930.xsd (EX-101.SCH) — 93KB
• hope-20240930_cal.xml (EX-101.CAL) — 119KB
• hope-20240930_def.xml (EX-101.DEF) — 589KB
• hope-20240930_lab.xml (EX-101.LAB) — 1164KB
• hope-20240930_pre.xml (EX-101.PRE) — 890KB
• hope-20240930_htm.xml (XML) — 4284KB

- 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 51 17. Stock-Based Compensation 52 18. Regulatory Matters 54 19. Revenue Recognition 56 20. Subsequent Events 57

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 58

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 80

CONTROLS AND PROCEDURES

Item 4. CONTROLS AND PROCEDURES 82

- OTHER INFORMATION

PART II - OTHER INFORMATION

LEGAL PROCEEDINGS 83

Item 1. LEGAL PROCEEDINGS 83

RISK FACTORS 83

Item 1A. RISK FACTORS 83

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 84

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 84

DEFAULTS UPON SENIOR SECURITIES 84

Item 3. DEFAULTS UPON SENIOR SECURITIES 84

MINE SAFETY DISCLOSURES 84

Item 4. MINE SAFETY DISCLOSURES 84

OTHER INFORMATION 84

Item 5. OTHER INFORMATION 84

EXHIBITS 84

Item 6. EXHIBITS 84 INDEX TO EXHIBITS 85 SIGNATURES 86 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; 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 merger with Territorial Bancorp Inc.,

Financial Statements

Item 1. Financial Statements HOPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) September 30, 2024 December 31, 2023 ASSETS (Dollars in thousands, except share data) Cash and cash equivalents: Cash and due from banks $ 170,674 $ 172,813 Interest earning cash in other banks 510,183 1,756,154 Total cash and cash equivalents 680,857 1,928,967 Investment securities available for sale ("AFS"), at fair value 1,920,981 2,145,059 Investment securities held to maturity ("HTM"), at amortized cost; fair value of $ 246,231 and $ 250,518 at September 30, 2024 and December 31, 2023, respectively 256,320 263,912 Equity investments 39,908 43,750 Loans held for sale, at lower of cost or fair value 25,714 3,408 Loans receivable, net of allowance for credit losses of $ 153,270 and $ 158,694 at September 30, 2024 and December 31, 2023, respectively 13,464,718 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 51,543 50,611 Accrued interest receivable 51,898 61,720 Deferred tax assets, net 122,538 135,215 Bank owned life insurance ("BOLI") 89,726 89,061 Investments in affordable housing partnerships 33,010 54,474 Operating lease right-of-use assets ("ROU"), net 42,071 46,611 Goodwill 464,450 464,450 Core deposit intangible assets, net 2,732 3,935 Servicing assets, net 9,339 9,631 Other assets 81,134 118,480 Total assets $ 17,354,189 $ 19,131,522 (Continued) 4 HOPE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) September 30, 2024 December 31, 2023 LIABILITIES AND STOCKHOLDERS' EQUITY (Dollars in thousands, except share data) LIABILITIES: Deposits: Noninterest bearing $ 3,722,985 $ 3,914,967 Interest bearing: Money market and NOW accounts 4,289,042 4,169,543 Savings deposits 724,263 702,486 Time deposits 5,993,208 5,966,757 Total deposits 14,729,498 14,753,753

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 September 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 was completed on October 1, 2024. 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, assuming the transaction is consummated, 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. If the transaction is completed, 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. Following the completion of the pending transaction, the legacy Territorial franchise in Hawaii will continue to

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