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Mar 31, 2021
Hope Bancorp Q1 2021 Earnings Report
Reported solid first quarter results driven by operational improvements and lower deposit costs.
Key Takeaways
Hope Bancorp reported a strong first quarter with a 54% increase in net income quarter-over-quarter, driven by operational improvements, declining deposit costs, and a lower provision expense. New loan originations totaled $847 million, including $305 million in PPP funding, and noninterest bearing deposits increased 13% from year-end.
Net interest income before provision for credit losses increased 2% quarter-over-quarter.
Noninterest bearing demand deposits increased 13% quarter-over-quarter.
Cost of interest bearing deposits decreased 15 basis points quarter-over-quarter.
Net income increased 54% quarter-over-quarter to $43.7 million, or $0.35 per diluted common share.
Forward Guidance
The Company has greater confidence in its ability to deliver enhanced performance as the year proceeds with the vaccination campaign in the U.S. well underway and the COVID-related restrictions gradually being lifted.
Positive Outlook
- Continued benefits of operational improvements implemented in 2020.
- Supported customers by providing $305 million in the second round of PPP funding.
- New loan originations totaled $847 million.
- Noninterest bearing deposits increased 13% from year-end.
- Noninterest expense to average assets improved to 1.65% from 1.69% in the preceding quarter.
Challenges Ahead
- Expected increase in criticized assets due to the impact COVID-19 has had on the travel industry.
- Noninterest income decreased due to a $1.5 million decline in swap fee income and a $1.2 million reduction in deposit service fees.
- Effective tax rate increased to 24.2% from 15.7% in the preceding fourth quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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