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Jun 30, 2020
Hope Bancorp Q2 2020 Earnings Report
Reported a decrease in net income due to the challenging operating environment.
Key Takeaways
Hope Bancorp reported a net income of $26.8 million for the second quarter of 2020, a decrease compared to the previous quarter and the year-ago quarter. The results were impacted by the COVID-19 crisis and reductions in the Fed Funds rate.
New loan originations totaled $832 million, including $480 million of PPP loans.
Total deposits increased 10.0% quarter-over-quarter.
Total cost of deposits reduced by 47 basis points quarter-over-quarter.
Noninterest expense improved to 1.60% as a percentage of average assets.
Forward Guidance
The company expects stable loan yields, continued reductions in deposit costs, and deployment of excess cash balances to lead to an expansion of net interest margin in the coming quarters. Initiatives are being developed to restructure the balance sheet and contain expenses to optimize operational performance, which are expected to improve profitability.
Positive Outlook
- Stable loan yields are expected.
- Continued reductions in deposit costs are anticipated.
- Deployment of excess cash balances is planned.
- New initiatives are expected to restructure the balance sheet.
- Expense containment measures are being implemented.
Challenges Ahead
- Challenging operating environment due to COVID-19 crisis.
- Impact of Fed Funds rate reductions on net interest margin.
- Build-up of liquidity and resulting excess cash balances.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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