Hope Bancorp, Inc. (HOPE) | Investment Case

1. Company Snapshot

1.a. Company Description

Hope Bancorp, Inc.operates as the bank holding company for Bank of Hope that provides banking services for small and medium-sized businesses, and individuals in the United States.The company accepts personal and business checking, money market, savings, time deposit, and individual retirement accounts.

Its loan products include commercial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, and other business related financing needs; real estate loans; small business administration loans; and consumer loans, such as single-family mortgage, home equity, auto, credit card, and personal loans.The company also offers trade finance services, including the issuance and negotiation of letters of credit, as well as handles documentary collections; warehouse lines of credit to mortgage loan originators; and commercial equipment lease financing.In addition, it provides cash management services, such as remote deposit capture, lock box, and ACH origination services; investment and wealth management services; mobile banking services; debit card services; foreign exchanges services, safe deposit boxes, and other customary bank services; internet banking services; and automated teller machine services.

As of December 31, 2021, the company operated 47 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, and Alabama; SBA loan production offices in Atlanta, Houston, Dallas, Denver, Portland, Seattle, Fremont, and Southern California; and a representative office in Seoul, Korea.Hope Bancorp, Inc.was incorporated in 2000 and is headquartered in Los Angeles, California.

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1.b. Last Insights on HOPE

Hope Bancorp's recent performance was driven by its impressive earnings surprise history and strong growth signals. The company's ability to consistently beat earnings estimates is a testament to its solid financials and effective management. Additionally, Hope Bancorp's high earnings yield and strong income signals make it an attractive value investment opportunity. The company's participation in the 26th Annual KBW Community Bank Investor Conference and its investor presentation being made available on its website demonstrate its commitment to transparency and engagement with institutional investors.

1.c. Company Highlights

Last Price	10.93
Change Percentage	-0.09%
Open	10.85
Previous Close	10.94
Market Cap ( Millions)	1401
Volume	665152
Year High	13.67
Year Low	8.82
M A 50	10.58
M A 200	10.5

FCF Yield	9.65%
Dividend Yield	5.12%
ROE	2.35%
Debt / Equity	6.01%
Net Debt / EBIDTA	-279.34%
Price To Book	0.62
Price Earnings Ratio	27.23
Price To FCF	10.37
Price To sales	1.48
EV / EBITDA	9.46

2. Hope Bancorp's Q3 Earnings: A Strong Performance

Hope Bancorp reported a net income of $31 million for the third quarter, representing a 28% year-over-year increase. The company's net interest income totaled $127 million, up 8% from the prior quarter and 21% from the third quarter of 2024. The net interest margin expanded 20 basis points to 2.89%. Earnings per share (EPS) came in at $0.25, slightly below estimates of $0.2575. Revenue growth was driven by loan growth across all major loan segments and an improvement in asset quality due to disciplined credit management.

Publication Date: Nov -19

                                    📋 Highlights
                                    Net Income Surge::
                                                Q3 net income reached $31 million, reflecting a 28% year-over-year increase.
Net Interest Margin Expansion::
                                                Margins rose 20 basis points to 2.89%, driven by disciplined credit management and loan growth.
Net Interest Income Growth::
                                                Totalled $127 million, up 8% from the prior quarter and 21% compared to Q3 2024.
Noninterest Income Growth::
                                                Increased quarter-over-quarter, fueled by service fees, international banking, and wire transfer income.
2025 Outlook::
                                                Anticipates 10% net interest income growth, 30% noninterest income growth, and 15% noninterest expense increase.

                                

Financial Performance Highlights

The company's noninterest income grew quarter-over-quarter, driven by service fees on deposit accounts, international banking fees, foreign exchange, and wire transfer fees. Julianna Balicka, Chief Financial Officer, noted that the increase in noninterest income was a positive development for the company. The company's outlook for the full year 2025 is optimistic, with expected high single-digit loan growth, net interest income growth of approximately 10%, and noninterest income growth of approximately 30%.

Outlook and Guidance

Kevin Kim discussed the company's outlook for the full year 2025, expecting high single-digit loan growth and net interest income growth of approximately 10%. The company also expects noninterest income growth of approximately 30% and noninterest expenses, excluding notable items, to be up approximately 15% in 2025, reflecting the addition of Territorial's operations and investment in talent. Analysts estimate next year's revenue growth at 13.0%, indicating a continued upward trajectory for the company.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio not directly available but a Price-to-Book Ratio (P/B) of 0.56, Hope Bancorp appears to be reasonably valued. The Net Interest Margin (NIM) of 2.89% is a positive indicator of the company's financial health. The Dividend Yield of 5.65% is attractive, suggesting that the company is returning a significant portion of its earnings to shareholders. These metrics suggest that the company's stock is priced reasonably, with a balance between growth prospects and return on investment.

3. NewsRoom

National Cryptocurrency Association, Coinbase, and Operation HOPE Announce New initiative to Empower Communities Through Crypto Literacy

Dec -03

Source: businesswire.com

Hope Bancorp, Inc. $HOPE Shares Sold by Ensign Peak Advisors Inc

Dec -01

Source: defenseworld.net

Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

HOPE Therapeutics, Inc., an NRx Pharmaceuticals Subsidiary, Announces First-in-Florida Initiation of One Day (ONE-D) Depression Treatment in Partnership with Ampa Health

Nov -10

Source: globenewswire.com

Hope Bancorp, Inc. $HOPE Shares Sold by Mutual of America Capital Management LLC

Oct -31

Source: defenseworld.net

Decent Valuation And Stable Credit Quality Make Hope Bancorp A Buy

Oct -31

Source: seekingalpha.com

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

Oct -28

Source: seekingalpha.com

Hope Bancorp (HOPE) Reports Q3 Earnings: What Key Metrics Have to Say

Oct -28

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Banking and Related Activities

Expected Growth: 10.0%

Hope Bancorp, Inc.'s 10.0% growth in Banking and Related Activities is driven by strategic expansion into underserved Asian-American markets, increased commercial lending, and a focus on digital banking platforms. Additionally, the company's cost-saving initiatives and efficient operations have contributed to improved profitability, enabling investments in growth initiatives.

7. Detailed Products

Personal Banking

Hope Bancorp, Inc. offers a range of personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Business Banking

The company provides business banking services, including business checking and savings accounts, commercial loans, and cash management solutions.

Commercial Lending

Hope Bancorp, Inc. offers commercial lending services, including commercial real estate loans, construction loans, and lines of credit.

Treasury Management

The company provides treasury management services, including cash management, wire transfers, and account reconciliation.

Wealth Management

Hope Bancorp, Inc. offers wealth management services, including investment management, retirement planning, and estate planning.

Mortgage Lending

The company provides mortgage lending services, including residential and commercial mortgage loans.

8. Hope Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hope Bancorp, Inc. operates in a highly competitive industry, but its strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Hope Bancorp, Inc.'s customers have limited bargaining power due to the company's diversified customer base and lack of concentration.

Bargaining Power Of Suppliers

Hope Bancorp, Inc. relies on a few large suppliers, giving them some bargaining power, but the company's scale and diversification mitigate this threat.

Threat Of New Entrants

The banking industry has low barriers to entry, and new entrants could potentially disrupt Hope Bancorp, Inc.'s market share.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players, leading to intense rivalry and competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	63.58%
Debt Cost	5.72%
Equity Weight	36.42%
Equity Cost	9.68%
WACC	7.16%
Leverage	174.55%

11. Quality Control: Hope Bancorp, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peoples Bancorp of North Carolina

A-Score: 7.0/10

Value: 8.0

Growth: 6.6

Quality: 7.2

Yield: 6.0

Momentum: 8.0

Volatility: 6.3

1-Year Total Return ->

First United

A-Score: 6.8/10

Value: 6.8

Growth: 6.3

Quality: 6.8

Yield: 7.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

Northrim Bank

A-Score: 6.8/10

Value: 6.7

Growth: 5.1

Quality: 7.5

Yield: 7.0

Momentum: 8.0

Volatility: 6.3

1-Year Total Return ->

Central Pacific Financial

A-Score: 6.7/10

Value: 6.6

Growth: 5.0

Quality: 7.0

Yield: 8.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

S&T Bancorp

A-Score: 6.2/10

Value: 5.7

Growth: 5.6

Quality: 6.4

Yield: 8.0

Momentum: 3.5

Volatility: 8.0

1-Year Total Return ->

Hope Bancorp

A-Score: 5.3/10

Value: 5.8

Growth: 3.6

Quality: 5.5

Yield: 8.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-4.45%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.16%

Hope Bancorp, Inc. - US43940T1097

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HOPE

1.c. Company Highlights

Average Yield

Average Growth

Average Quality

Earnings Miss

Revenues Beats

Fairly Valued

Stable Momentum

Revenues Miss

Earnings Beats

Medium Volatility

Weak Momentum

Higher Yield

2. Hope Bancorp's Q3 Earnings: A Strong Performance

Financial Performance Highlights

Outlook and Guidance

Valuation and Dividend Yield

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Banking and Related Activities

Expected Growth: 10.0%

7. Detailed Products

Personal Banking

Business Banking

Commercial Lending

Treasury Management

Wealth Management

Mortgage Lending

8. Hope Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Hope Bancorp, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.93$

Current Price

10.93$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA