LOS ANGELES--(BUSINESS WIRE)--
Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company
of Bank of Hope (the “Bank”), today announced two strategic initiatives
related to its branch network and SBA program.
First, the Company announced a branch rationalization plan designed to
enhance its operational efficiencies in 2019 and beyond. The plan, which
is subject to regulatory non-objection and expected to be implemented by
the second quarter of 2019, will impact up to six branches across the
country. The Company anticipates incurring a one-time pre-tax charge of
approximately $1.7 million in the fourth quarter of 2018 related to the
branch rationalization plan. Projected savings are expected to be
approximately $1.9 million pre-tax on an annual basis, the initial
benefits of which will be recognized beginning in the 2019 second
quarter.
Second, the Company announced plans to temporarily discontinue its
practice of regularly selling the guaranteed portion of its SBA 7(a)
loans to the secondary market. Earlier in the 2018 fourth quarter, the
Company sold $10.2 million of its SBA loans held for sale and recognized
net gains on sale of SBA loans of $447,000. Given the continuing
reduction in the premiums available in the secondary market, the Company
plans to retain its production of SBA 7(a) loans in its portfolio going
forward until such time when premiums become more attractive. The
Company expects that retaining the SBA loans in its portfolio, which
tend to have higher interest rates and are all variable rate, will have
a positive effect on its overall loan yields, net interest margin, and
growth in interest income.
“Our branch rationalization plan follows a comprehensive review of our
market presence, branch profitability and opportunities for more
efficient customer engagement channels,” said Kevin S. Kim, President
and Chief Executive Officer. “We continually analyze the economics of
retaining or selling our SBA 7(a) loan production, and while the change
in our strategy will impact our near-term gain-on-sale revenue
generation, at this point we believe retaining the loans will ultimately
lead to better profitability longer term. Notwithstanding this change in
strategy, we always retain the opportunity to sell the remaining SBA
guaranteed portions at a later date when premiums recover to more
attractive levels.
“These initiatives are elements of a more comprehensive earnings quality
improvement plan and exemplify our Board and management’s ongoing focus
on better positioning the Company for profitable growth and creating
greater shareholder value. We look forward to keeping our stakeholders
apprised of additional initiatives in the near term as plans are more
fully developed,” said Kim.
About Hope Bancorp, Inc.
Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and
only super regional Korean-American bank in the United States with $15.2
billion in total assets as of September 30, 2018. Headquartered in Los
Angeles and serving a multi-ethnic population of customers across the
nation, Bank of Hope operates 63 full-service branches in California,
Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and
Alabama. The Bank also operates SBA loan production offices in Seattle,
Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern
California and Houston; commercial loan production offices in Northern
California and Seattle; residential mortgage loan production offices in
Southern California; and a representative office in Seoul, Korea. Bank
of Hope specializes in core business banking products for small and
medium-sized businesses, with an emphasis in commercial real estate and
commercial lending, SBA lending and international trade financing. Bank
of Hope is a California-chartered bank, and its deposits are insured by
the FDIC to the extent provided by law. Bank of Hope is an Equal
Opportunity Lender. For additional information, please go
to bankofhope.com. By including the foregoing website address link, the
Company does not intend to and shall not be deemed to incorporate by
reference any material contained or accessible therein.
Forward-Looking Statements
Some statements in this press release may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements relate to, among
other things, expectations regarding the business environment in which
we operate, projections of future performance, perceived opportunities
in the market and statements regarding our business strategies,
objectives and vision. Forward-looking statements include, but are not
limited to, statements preceded by, followed by or that include the
words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,”
“estimates” or similar expressions. With respect to any such
forward-looking statements, the Company claims the protection provided
for in the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties. The Company’s actual
results, performance or achievements may differ significantly from the
results, performance or achievements expressed or implied in any
forward-looking statements. The risks and uncertainties include, but are
not limited to: possible deterioration in economic conditions in our
areas of operation; interest rate risk associated with volatile interest
rates and related asset-liability matching risk; liquidity risks; risk
of significant non-earning assets, and net credit losses that could
occur, particularly in times of weak economic conditions or times of
rising interest rates; and regulatory risks associated with current and
future regulations. For additional information concerning these and
other risk factors, see the Company’s most recent Annual Report on Form
10-K and Quarterly Report on Form 10-Q. The Company does not undertake,
and specifically disclaims any obligation, to update any forward-looking
statements to reflect the occurrence of events or circumstances after
the date of such statements except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181227005350/en/
Alex Ko
EVP & Chief Financial Officer
213-427-6560
alex.ko@bankofhope.com
Angie Yang
SVP, Director of Investor Relations
& Corporate
Communications
213-251-2219
angie.yang@bankofhope.com
Source: Hope Bancorp, Inc.