Hope Bancorp

(NYSE: HOPE)

Steven Schepman
Background

- Headquarters in Los Angeles

- Largest bank focused on but not limited to Korean Americans
- 63 branches across the U.S and one representative branch in
Seoul, South Korea
Financials

2018 Net Income: $189,589,000

2018 Non Interest Income: $60,180,000

2017 Net Income: $139,445,000

Common T1 Capital Ratio: 13.63% (industry mean is 12%)

ROA: 1.13% (above 65% of industry)

 Loans and Deposits
- Commercial and industrial real estate focused
- NCO/Average Loans: 0.04
- Loans/Deposits: 98.94
- 12.1 billion dollars in loans in 2018
- 12 billion dollars in deposits in 2018
- 12% YoY deposit growth and 9% YoY loan growth
- Efficiency Ratio (how much a corporation spends to make a dollar): 47.44% (50% is low)
Source: BoH
Commercial Real Estate Market Condition
and Outlook

“Next year will bring deceleration on a few fronts, but this still is an expanding economy
and a flourishing property market benefiting from a robust job market, solid consumer
confidence and low interest rates. We’ll see resilience across asset classes such as office,
retail and multifamily as demand continues to buoy those sectors. And we see
transaction volumes and capitalization rates staying relatively stable.”
- CBRE’s Richard Barkham

Source: Costar Group

Merger and Acquisition History

- On July 29, 2016, the merger of Wilshire

Bancorp Inc. (“Wilshire”) and BBCN Bancorp, Inc.
(now Hope Bancorp) was completed.
- The two top Korean American banks at the time,
both based on the West Coast
Valuation Ratios

P/E: Ratio: 10.46

P/TB: 1.17

P/B: 0.88
Valuation: Dividend Discount Model

Current stock price: $14.31

Implied Stock Price: $15.70

Citations

https://www.connect.media/cbre-2020-outlook-cre-market-expected-to-experience-tempered-growth/

https://www.sec.gov/cgi-bin/viewer?action=view&cik=1128361&accession_number=0001128361-19-
000006&xbrl_type=v#