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What were the key takeaways from Hope Bancorp’s earnings call?

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What factors drove the changes in Hope Bancorp's revenue and profit?

- **Record Profitability**: Net income up 28% YoY to $31 million, with NIM expanding 20 bps QoQ to 2.89%.
- **Strong Loan Growth**: 5% annualized loan growth across all segments, driven by disciplined underwriting and new banker hires.
- **Asset Quality Excellence**: 57% reduction in net charge-offs, 10% decline in criticized loans, and stable allowance ratio at 1.05%.
- **Cost Management**: 8 bps decline in deposit costs, +10% operating leverage despite 5% QoQ expense growth.
- **Strategic Momentum**: 30% noninterest income growth (excluding one-time items), strong Q4 pipeline, and $0.14 dividend reaffirming capital strength.

**【CEO Summary Section】**
- **Revenue Growth**: Net income of $31 million, up 28% YoY, driven by loan growth across C&amp;I, CRE, and residential mortgage segments. Net interest margin expanded 20 bps QoQ to 2.89%, the best quarterly expansion since 2012.
- **Asset Quality Improvement**: 57% reduction in net charge-offs ($5M vs. $12M QoQ), 10% decline in criticized loans to $373 million, and 17% drop in C&amp;I criticized loans.
- **Strategic Investments**: Hired experienced bankers to accelerate growth in lower middle market, project finance, and treasury management. Loan pipeline remains strong heading into Q4.
- **Dividend Policy**: Declared quarterly dividend of $0.14 per share, reflecting capital strength (all capital ratios above well-capitalized thresholds).

**【CFO Financial Commentary】**
- **Net Interest Income**: $127 million (+21% YoY), driven by loan growth and 8 bps decline in deposit costs. NIM expansion included 9 bps from higher earning assets, 6 bps from lower funding costs.
- **Noninterest Income**: $48 million in SBA loan sales, down from $67 million QoQ due to government shutdown impacting secondary market. Noninterest expense up 5% QoQ to $97 million due to talent investments, but +10% operating leverage vs. Q2.
- **Credit Metrics**: Allowance for credit losses at 1.05% of loans, stable from Q2. Provision for credit losses down $6M QoQ to $9 million, reflecting improved asset quality.

**【Q&A Highlights】**
- **Deposit Management**: $2.3 billion in CDs maturing in Q4 at 4.08%, with plans to roll down rates in line with Fed cuts. Money market beta ~85% on recent rate cut.
- **M&A Integration**: Territorial Bancorp integration progressing, with incremental cost savings from operational alignment. No major notable items reported this quarter.
- **SBA Loan Sales**: Government shutdown halted new SBA applications but no impact on pre-approved loans. Expect minimal disruption to 2025 noninterest income guidance.
- **Expense Growth**: 15% YoY noninterest expense growth reflects Territorial addition and talent investments, but revenue growth outpaced expenses (+10% operating leverage QoQ).

Hope Bancorp, Inc. (HOPE) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HOPE

HOPE fundamentals

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