Hope Bancorp, Inc. (HOPE) Tops Q2 EPS by 5c

Hope Bancorp, Inc. (NASDAQ: HOPE) reported Q2 EPS of $0.43, $0.05 better than the analyst estimate of $0.38.

“Second quarter results underscore the sound management of our operations as the economy gradually recovers from the impact of the COVID-19 pandemic,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “The composition of our deposits continued to improve with meaningful increases in our lower-cost deposit categories, and our cost of interest bearing deposits declined another 8 basis points quarter-over-quarter. Together with higher average yield on loans, this supported another quarter of net interest margin expansion. After five quarters of significant reserve build under the CECL methodology, we recorded a negative provision for credit losses of $7.0 million driven largely by the improved macroeconomic factors. We also sold $30 million of SBA 7(a) loans given the near record-high premiums available in the secondary markets, and recorded a gain on sale of $2.4 million. All of these factors contributed to a 23% quarter-over-quarter increase in net income of $53.8 million for the 2021 second quarter.

“Loan originations for the quarter were also strong at a record high $894 million and reflected a 61% increase from the preceding first quarter when excluding the second round of PPP originations. However, a considerable decrease in warehouse line utilizations reflecting industry trends, a strategic sale of $119 million of higher-risk hotel/motel loans, PPP loan forgiveness of $164 million, and residential mortgage and SBA 7(a) loan sales contributed to a 2% quarter-over-quarter decrease in loans receivable. While some of these headwinds to net loan growth are expected to persist near-term, we have a robust loan pipeline supported by strong macroeconomic forecasts, and we believe we are well positioned to deliver enhanced profitability for 2021,” said Kim.

For earnings history and earnings-related data on Hope Bancorp, Inc. (HOPE) click here.

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