Hope Bancorp, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, the company recorded a net income of $24.2 million, or $0.20 per diluted share, down from $30.0 million, or $0.25 per diluted share, in the same period of 2023, marking a 19.6% decrease. For the nine months, net income was $75.3 million, a decline of 29.8% from $107.2 million in the prior year. The decrease in profitability was attributed to a reduction in net interest income, which fell to $104.8 million in Q3 2024 from $135.4 million in Q3 2023, and to $325.7 million for the nine months, down from $399.9 million. The net interest margin also decreased to 2.55% from 2.83% year-over-year.

Total interest income for Q3 2024 was $235.1 million, down from $275.8 million in Q3 2023, primarily due to a decrease in loan yields and a high interest rate environment affecting loan origination volumes. The weighted average yield on loans decreased to 6.16% from 6.27% in the same quarter last year. Conversely, noninterest income increased to $11.8 million in Q3 2024, up from $8.3 million, driven by higher service fees and net gains on sales of SBA loans.

As of September 30, 2024, total assets decreased to $17.35 billion from $19.13 billion at the end of 2023, largely due to a significant reduction in cash and cash equivalents, which fell to $680.9 million from $1.93 billion. This decline was primarily due to the repayment of $1.70 billion in Federal Reserve Bank borrowings. Total loans receivable also decreased by 1.7% to $13.62 billion, with declines in commercial and industrial (C&I) and commercial real estate (CRE) loans, partially offset by growth in residential mortgage loans.

Strategically, Hope Bancorp entered into a merger agreement with Territorial Bancorp Inc. in April 2024, with plans for the Territorial brand to operate under the Bank of Hope post-merger. Additionally, the company sold two branches in Virginia, completing the transaction on October 1, 2024, which involved transferring $128.1 million in deposits.

The company’s total stockholders’ equity increased to $2.17 billion as of September 30, 2024, compared to $2.12 billion at the end of 2023, reflecting a strong capital position with common equity tier 1 capital ratios exceeding regulatory requirements. The allowance for credit losses was $153.3 million, down from $158.7 million, indicating improved credit quality despite an increase in nonperforming assets.

Overall, Hope Bancorp's financial performance in Q3 2024 reflects challenges in net interest income and profitability, alongside strategic moves aimed at enhancing its market position and operational efficiency.