Hope Bancorp, Inc. Q1 FY2026 earnings call

• Kevin Kim mentioned first quarter 2026 results reflected strong year-over-year growth in net income, revenue, loans, and deposits driven by organic growth and Territorial Bancorp acquisition. • Announced accretive acquisition of Commercial Banking unit of SMBC Manubank, expected to close in 2026, adding $2.5 billion in loans and $2.7 billion in deposits, and be accretive to earnings in 2027. • Returned capital through repurchase of approximately 604 thousand common shares totaling $7 million and declared a quarterly common stock dividend of $0.14 per share. • Julianna Balicka discussed net interest income, net interest margin, noninterest income, noninterest expense, and asset quality, noting improved efficiency ratio and asset quality. • Peter Koh commented on asset quality, stating net charge-offs were within reasonable range and asset quality trends were improving.

Net income for 2026 totaled $30 million, up 40% year over year from $21 million in the prior year period. Pre-provision net revenue for the first quarter totaled $47 million, up 43% year over year from $33 million and up 1% quarter over quarter from $46 million. Net interest income totaled $124 million for 2026, up 23% from 2025 and a decrease of 3% from the prior quarter. Net interest margin was 2.90% in Q1 2026, unchanged quarter over quarter. Noninterest income totaled $17 million in 2026, down $1 million compared with $18 million in the prior quarter and up $1 million compared with $16 million for 2025. Noninterest expense totaled $94 million in 2026, down from $99 million in 2025. Efficiency ratio improved to 67% in 2026. Loan balances were essentially stable linked quarter, with gross loans at $14.74 billion at 03/31/2026. Deposits were $15.73 billion at 03/31/2026, growing 1% quarter over quarter. Criticized loans decreased $26 million, or 7%, from the prior quarter. Net charge-offs were $11 million for the 2026 first quarter.

• Expect loan growth of over 20% between 12/31/2025 and 12/31/2026 reflecting Manubank transaction and organic growth, moderating CRE loan growth ahead of transaction close. • Anticipate year-over-year total revenue growth at higher end of 15% to 20% range for full year 2026 assuming one quarter of contribution from Manubank transaction. • Assume no Fed funds target rate cuts in 2026, unchanged pre-provision net revenue growth at 25% to 30% range for full year 2026 including Manubank's operating expenses. • Project Manubank transaction to be meaningfully accretive to 2027 earnings. • Assume steady asset quality backdrop and full-year effective tax rate between 25% and 26% in 2026.

Q: Characterize the forward appetite for share repurchase and target payout ratio or capital levels?

A: That will depend on cash flow generation and growth opportunities. Will continue to evaluate opportunistic repurchases within that framework. Still have capacity under share repurchase authorization and already purchased $7 million of shares since it was refreshed last quarter.

Q: Provide the purchase accounting benefit for the quarter?

A: Not materially different quarter over quarter. About similar. It is $4 million.

Q: Sense for whether expense run rate improvement is sustainable and normalized run rate?

A: This quarter saw good expense management. Anticipate expenses will tick up as production and revenue growth strengthen throughout the year but will stay within original comments.

Q: Opting out of CECL double count with the acquisition?

A: We are still going to evaluate.

Q: Spot rate on deposits and deposit cost outlook with Fed on hold?

A: CDs continuing to reprice. Each quarter see about 5 to 7 basis points of interest-bearing deposit cost reduction from mathematics.

Q: Color into Q1 loan growth pullback in CRE and organic outlook?

A: Organic loan growth expected to be mid-single digits from C&I and residential mortgage, with flat CRE balances.

Q: Pro forma CRE concentrations for SMBC Manubank?

A: It will be something in that 320% range depending on final balances.

Q: Timing of SMBC Manubank deal in guidance?

A: Plugging in close at midpoint of second half of the year for simple arithmetic.

Q: Color on net charge-offs and asset quality?

A: Net charge-offs a little elevated this quarter but within reasonable range, representing previously identified credit concerns being cleaned up. Asset quality trends continuing to improve with NPLs down and criticized assets coming down sequentially.