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HOPE

Hope Bancorp NasdaqGS:HOPE Stock Report

Last Price

US$13.59

Market Cap

US$1.6b

7D

-6.7%

1Y

-5.0%

Updated

27 Sep, 2022

Data

Company Financials +
HOPE fundamental analysis
Snowflake Score
Valuation6/6
Future Growth0/6
Past Performance5/6
Financial Health6/6
Dividends4/6

HOPE Stock Overview

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.

Hope Bancorp Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hope Bancorp
Historical stock prices
Current Share PriceUS$13.59
52 Week HighUS$17.68
52 Week LowUS$13.29
Beta1.24
1 Month Change-9.34%
3 Month Change-1.66%
1 Year Change-5.03%
3 Year Change-3.69%
5 Year Change-24.96%
Change since IPO1,485.12%

Recent News & Updates

Sep 15

Hope Bancorp: Attractively Valued With A Positive Earnings Outlook

Summary Strong job markets will sustain loan growth while high borrowing costs and home prices will limit loan growth. The large balance of variable-rate loans, maturity of certain hybrid-rate loans, and loan additions will likely lift the net interest margin in the second half of the year. The December 2022 target price suggests a high upside from the current market price. Further, HOPE is offering an attractive dividend yield. Earnings of Hope Bancorp, Inc. (HOPE) will most probably continue to surge in the years ahead thanks to anticipated loan growth. Further, the large balance of variable rate loans will allow quick re-pricing of the loan book, thereby leading to higher interest income. Meanwhile, the provisioning will likely remain at a normal level. Overall, I'm expecting Hope Bancorp to report earnings of $1.87 per share for 2022, up 12% year-over-year. Compared to my last report on the company, I've increased my earnings estimate mostly because I've revised upwards my loan growth estimate. For 2023, I'm expecting Hope Bancorp to report earnings of $1.97 per share, up 6% year-over-year. The year-end target price suggests a high upside from the current market price. Therefore, I'm maintaining a buy rating on Hope Bancorp. Strength in Job Markets Nationwide to Sustain Loan Growth Hope Bancorp's loan portfolio grew at an annualized rate of 8% in the first half of the year, which was close to the growth witnessed in previous years. I'm expecting loan growth to continue at this rate because of certain conflicting economic factors. Firstly, strong job markets will likely lift loan growth. Despite its Korean-American origin, Bank of Hope presently caters to all ethnicities and regions across the country. By loan segment as well, the loan portfolio is quite diverse, from residential mortgages to commercial business loans. As a result, it is appropriate to consider broad macroeconomic indicators to determine credit demand. As shown below, both the unemployment rate and the coincident index indicate that the country's economic activity is currently in good shape. US Unemployment Rate data by YCharts On the other hand, high interest rates will contain loan demand. Loan growth in the residential mortgage section will especially slow down as it is highly dependent on borrowing costs. Further, home prices have recently increased rapidly and out of step with income growth, which hurts home affordability. US House Price Index data by YCharts Management is hoping to achieve high-single-digit to low-double-digit loan growth for 2022, as mentioned in the latest earnings presentation. Considering the factors given above, I'm expecting loan growth to remain at the lower end of management's guidance. I'm expecting the loan portfolio to grow by 8% annualized every quarter till the end of 2023. This will lead to full-year 2022 loan growth of 8.4%. In my last report on Hope Bancorp, I estimated loan growth of 5.9% for this year. I've revised upwards my loan growth estimate partly because of the solid performance in the second quarter as well as an improvement in my outlook. Meanwhile, deposits will likely grow in line with loans. However, other balance sheet items will likely trail loan growth. As interest rates have increased, the market value of available-for-sale securities has dropped. The resultant unrealized losses have eroded the equity book value (income statement not affected as per relevant accounting standards). The tangible book value per share dropped to $12.80 at the end of June 2022 from $13.10 at the end of June 2021. Further pressure on the book value is likely from the 75-basis point hike in the fed funds rate in July. Moreover, I'm expecting a further 75 basis point hike in the remainder of the year. On the other hand, retained earnings will lift the equity book value. The following table shows my balance sheet estimates. FY18 FY19 FY20 FY21 FY22E FY23E Financial Position Net Loans 12,006 12,182 13,356 13,812 14,976 16,211 Growth of Net Loans 9.0% 1.5% 9.6% 3.4% 8.4% 8.2% Other Earning Assets 2,316 1,868 2,486 2,853 2,615 2,831 Deposits 12,156 12,527 14,334 15,040 15,637 16,926 Borrowings and Sub-Debt 1,118 927 559 622 932 1,009 Common Equity 1,903 2,036 2,054 2,093 2,079 2,250 Book Value Per Share ($) 14.5 16.0 16.6 17.0 17.2 18.6 Tangible BVPS ($) 10.8 12.3 12.7 13.2 13.3 14.7 Source: SEC Filings, Author's Estimates (In USD million unless otherwise specified) Loan Mix, Loan Additions to Lift the Margin The average loan yield is moderately rate-sensitive because of the variable-rate loans, which made up 44% of total loans at the end of June 2022, as mentioned in the presentation. Moreover, $498 million in hybrid-rate loans, representing 3% of total loans, will change from fixed to variable within the next twelve months. Moreover, the average earning asset yield will continue to grow as a result of loan additions in the coming quarters. This is because the average rate of new loans was 4.26% in the second quarter of 2022, which is higher than the existing portfolio's average yield of 4.06% (source: the 2Q 2022 presentation and 10-Q filing). The deposit book is also quite rate-sensitive as it is heavy on money-market and savings deposits, which re-price frequently. These deposits made up 44% of total deposits at the end of June 2020. Considering these factors, I'm expecting the margin to grow by 10 basis points in the second half of 2022 before stabilizing in 2023. Expecting Earnings to Grow by 12% The anticipated loan growth and margin expansion discussed above will likely drive earnings this year. On the other hand, higher noninterest expenses will likely constrain earnings growth. Management has increased its guidance for noninterest expenses to 1.75% - 1.78% of average assets from the previous guidance of 1.70%, as mentioned in the presentation. Meanwhile, the provisioning will likely remain at a normal level from now until the end of 2023. Due to the large net provision reversal reported in the first quarter of the year, the provisioning for the full-year 2022 will be below normal. Overall, I'm expecting Hope Bancorp to report earnings of $1.87 per share for 2022, up 12% year-over-year. For 2023, I'm expecting earnings to grow by 6% to $1.97 per share. The following table shows my income statement estimates. FY18 FY19 FY20 FY21 FY22E FY23E Income Statement Net interest income 488 467 467 513 575 637 Provision for loan losses 15 7 95 (12) 2 20 Non-interest income 60 50 53 44 52 52 Non-interest expense 278 283 284 293 321 352 Net income - Common Sh. 190 171 112 205 225 238 EPS - Diluted ($) 1.44 1.35 0.90 1.66 1.87 1.97 Source: SEC Filings, Author's Estimates (In USD million unless otherwise specified) In my last report on Hope Bancorp, I estimated earnings of $1.73 per share for 2022. I've revised upwards my earnings estimate mostly because of the upward revision in my loan growth estimate. I've also tweaked all income statement line items following the second-quarter results.

Jul 20
Do Hope Bancorp's (NASDAQ:HOPE) Earnings Warrant Your Attention?

Do Hope Bancorp's (NASDAQ:HOPE) Earnings Warrant Your Attention?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...

Jul 19

Hope Bancorp GAAP EPS of $0.43 beats by $0.02, revenue of $154.29M beats by $4.22M

Hope Bancorp press release (NASDAQ:HOPE): Q2 GAAP EPS of $0.43 beats by $0.02. Revenue of $154.29M (+12.1% Y/Y) beats by $4.22M. Company recorded net recoveries of $930 thousand, reflecting the third consecutive quarter of total net recoveries. Total deposits increased 3.5% quarter-over-quarter, reflecting higher balances of noninterest bearing demand deposits and strategic increases in time deposits. Repurchased 1,038,986 shares of common stock of the Company during the second quarter, utilizing $14.7 million of the $50 million share repurchase program announced in January 2022.

Shareholder Returns

HOPEUS BanksUS Market
7D-6.7%-8.2%-5.8%
1Y-5.0%-24.8%-22.1%

Return vs Industry: HOPE exceeded the US Banks industry which returned -24.9% over the past year.

Return vs Market: HOPE exceeded the US Market which returned -23.7% over the past year.

Price Volatility

Is HOPE's price volatile compared to industry and market?
HOPE volatility
HOPE Average Weekly Movement3.1%
Banks Industry Average Movement3.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: HOPE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: HOPE's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20001,537Kevin Kimhttps://www.bankofhope.com

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.

Hope Bancorp Fundamentals Summary

How do Hope Bancorp's earnings and revenue compare to its market cap?
HOPE fundamental statistics
Market CapUS$1.62b
Earnings (TTM)US$219.95m
Revenue (TTM)US$604.27m

7.4x

P/E Ratio

0.8x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HOPE income statement (TTM)
RevenueUS$604.27m
Cost of RevenueUS$0
Gross ProfitUS$604.27m
Other ExpensesUS$384.33m
EarningsUS$219.95m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.84
Gross Margin100.00%
Net Profit Margin36.40%
Debt/Equity Ratio46.6%

How did HOPE perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

31%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is HOPE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HOPE?

Other financial metrics that can be useful for relative valuation.

HOPE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio-2.5x

Price to Earnings Ratio vs Peers

How does HOPE's PE Ratio compare to its peers?

HOPE PE Ratio vs Peers
The above table shows the PE ratio for HOPE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average10.6x
NBTB NBT Bancorp
10.9x1.1%US$1.6b
HTH Hilltop Holdings
7.5x-21.8%US$1.6b
TCBK TriCo Bancshares
14.2x13.5%US$1.5b
EGBN Eagle Bancorp
9.7x3.7%US$1.4b
HOPE Hope Bancorp
7.4x-2.9%US$1.6b

Price-To-Earnings vs Peers: HOPE is good value based on its Price-To-Earnings Ratio (7.4x) compared to the peer average (10.6x).


Price to Earnings Ratio vs Industry

How does HOPE's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: HOPE is good value based on its Price-To-Earnings Ratio (7.4x) compared to the US Banks industry average (9.6x)


Price to Earnings Ratio vs Fair Ratio

What is HOPE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HOPE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.4x
Fair PE Ratio10.9x

Price-To-Earnings vs Fair Ratio: HOPE is good value based on its Price-To-Earnings Ratio (7.4x) compared to the estimated Fair Price-To-Earnings Ratio (10.9x).


Share Price vs Fair Value

What is the Fair Price of HOPE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HOPE ($13.59) is trading below our estimate of fair value ($41.56)

Significantly Below Fair Value: HOPE is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies

Future Growth

How is Hope Bancorp forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-2.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HOPE's earnings are forecast to decline over the next 3 years (-2.9% per year).

Earnings vs Market: HOPE's earnings are forecast to decline over the next 3 years (-2.9% per year).

High Growth Earnings: HOPE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: HOPE's revenue (6.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: HOPE's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HOPE's Return on Equity is forecast to be low in 3 years time (9.5%).


Discover growth companies

Past Performance

How has Hope Bancorp performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


3.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HOPE has high quality earnings.

Growing Profit Margin: HOPE's current net profit margins (36.4%) are higher than last year (31.9%).


Past Earnings Growth Analysis

Earnings Trend: HOPE's earnings have grown by 3.9% per year over the past 5 years.

Accelerating Growth: HOPE's earnings growth over the past year (40.8%) exceeds its 5-year average (3.9% per year).

Earnings vs Industry: HOPE earnings growth over the past year (40.8%) exceeded the Banks industry 8.5%.


Return on Equity

High ROE: HOPE's Return on Equity (11%) is considered low.


Discover strong past performing companies

Financial Health

How is Hope Bancorp's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: HOPE's Assets to Equity ratio (9x) is low.

Allowance for Bad Loans: HOPE has a sufficient allowance for bad loans (140%).

Low Risk Liabilities: 93% of HOPE's liabilities are made up of primarily low risk sources of funding.

Loan Level: HOPE has an appropriate level of Loans to Assets ratio (80%).

Low Risk Deposits: HOPE's Loans to Deposits ratio (96%) is appropriate.

Level of Bad Loans: HOPE has an appropriate level of bad loans (0.7%).


Discover healthy companies

Dividend

What is Hope Bancorp current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


4.12%

Current Dividend Yield

Dividend Yield vs Market

Hope Bancorp Dividend Yield vs Market
How does Hope Bancorp dividend yield compare to the market?
SegmentDividend Yield
Company (Hope Bancorp)4.1%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Banks)3.4%
Analyst forecast in 3 Years (Hope Bancorp)4.2%

Notable Dividend: HOPE's dividend (4.12%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: HOPE's dividend (4.12%) is low compared to the top 25% of dividend payers in the US market (4.68%).


Stability and Growth of Payments

Stable Dividend: HOPE's dividends per share have been stable in the past 10 years.

Growing Dividend: HOPE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30.7%), HOPE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Kevin Kim (64 yo)

10.25yrs

Tenure

US$3,356,442

Compensation

Mr. Kevin Sung Kim has been the Chief Executive Officer and President of Hope Bancorp, Inc. since March 7, 2013 and serves as its Executive Director since December 2011. Mr. Kim has been Chairman of the Bo...


CEO Compensation Analysis

Kevin Kim's Compensation vs Hope Bancorp Earnings
How has Kevin Kim's remuneration changed compared to Hope Bancorp's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$220m

Mar 31 2022n/an/a

US$222m

Dec 31 2021US$3mUS$1m

US$205m

Sep 30 2021n/an/a

US$181m

Jun 30 2021n/an/a

US$156m

Mar 31 2021n/an/a

US$129m

Dec 31 2020US$3mUS$1m

US$112m

Sep 30 2020n/an/a

US$126m

Jun 30 2020n/an/a

US$138m

Mar 31 2020n/an/a

US$154m

Dec 31 2019US$3mUS$950k

US$171m

Sep 30 2019n/an/a

US$172m

Jun 30 2019n/an/a

US$176m

Mar 31 2019n/an/a

US$181m

Dec 31 2018US$3mUS$916k

US$190m

Sep 30 2018n/an/a

US$163m

Jun 30 2018n/an/a

US$161m

Mar 31 2018n/an/a

US$154m

Dec 31 2017US$2mUS$804k

US$139m

Sep 30 2017n/an/a

US$162m

Jun 30 2017n/an/a

US$144m

Mar 31 2017n/an/a

US$126m

Dec 31 2016US$2mUS$696k

US$114m

Sep 30 2016n/an/a

US$96m

Jun 30 2016n/an/a

US$95m

Mar 31 2016n/an/a

US$95m

Dec 31 2015US$1mUS$668k

US$92m

Compensation vs Market: Kevin's total compensation ($USD3.36M) is below average for companies of similar size in the US market ($USD5.63M).

Compensation vs Earnings: Kevin's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: HOPE's management team is seasoned and experienced (5.3 years average tenure).


Board Members

Experienced Board: HOPE's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HOPE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NasdaqGS:HOPE Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
13 Sep 22SellUS$106,725William LewisIndividual7,500US$14.23

Ownership Breakdown

What is the ownership structure of HOPE?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders5,609,9724.7%
General Public9,767,8498.2%
Institutions104,098,49487.1%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 74.86% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
14.73%
BlackRock, Inc.
17,603,031$239.2m-0.67%0.01%
11.72%
The Vanguard Group, Inc.
14,005,677$190.3m1.27%no data
7.71%
Dimensional Fund Advisors LP
9,217,358$125.3m6.05%0.03%
6.53%
Fuller & Thaler Asset Management, Inc.
7,804,607$106.1m-6.53%0.78%
5.78%
State Street Global Advisors, Inc.
6,900,844$93.8m-1.61%0.01%
3.03%
Macquarie Investment Management Business Trust
3,620,495$49.2m84.63%0.06%
2.81%
Steven Koh
3,352,809$45.6m0%no data
2.8%
Pzena Investment Management, Inc.
3,341,176$45.4m-1.56%0.15%
2.66%
LSV Asset Management
3,178,300$43.2m-0.78%0.09%
1.85%
Geode Capital Management, LLC
2,211,039$30.0m-0.89%no data
1.77%
Thrivent Investment Management, Inc.
2,111,058$28.7m9.53%0.08%
1.51%
Goldman Sachs Asset Management, L.P.
1,809,772$24.6m146.97%0.01%
1.4%
BNY Mellon Asset Management
1,675,892$22.8m-4.06%0.01%
1.26%
Charles Schwab Investment Management, Inc.
1,502,452$20.4m-9.81%0.01%
1.24%
J.P. Morgan Asset Management, Inc.
1,484,206$20.2m1.39%no data
1.12%
Victory Capital Management Inc.
1,343,486$18.3m16.37%0.02%
1.11%
Northern Trust Global Investments
1,332,010$18.1m-0.5%no data
1.04%
Norges Bank Investment Management
1,244,681$16.9m0%no data
0.97%
Eaton Vance Management
1,159,927$15.8m-6.99%0.01%
0.71%
GAMCO Investors, Inc.
848,000$11.5m0%0.05%
0.71%
Principal Global Investors, LLC
847,606$11.5m-9.5%0.01%
0.62%
Strategic Advisers LLC
743,821$10.1m-0.4%0.01%
0.61%
Invesco Capital Management LLC
723,827$9.8m-6.44%0.01%
0.58%
Columbia Management Investment Advisers, LLC
697,950$9.5m1.85%no data
0.57%
Kevin Kim
676,292$9.2m4.17%no data

Company Information

Hope Bancorp, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Hope Bancorp, Inc.
  • Ticker: HOPE
  • Exchange: NasdaqGS
  • Founded: 2000
  • Industry: Regional Banks
  • Sector: Banks
  • Implied Market Cap: US$1.624b
  • Shares outstanding: 119.48m
  • Website: https://www.bankofhope.com

Number of Employees


Location

  • Hope Bancorp, Inc.
  • 3200 Wilshire Boulevard
  • Suite 1400
  • Los Angeles
  • California
  • 90010
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HOPENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1996
NRBDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1996

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/27 00:00
End of Day Share Price2022/09/27 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.