Hope Bancorp Q2 Earnings Call Highlights

Second-quarter performance improved: Revenue rose 12% sequentially to $148 million, while adjusted EPS increased 17% to $0.27. Results benefited from a six-basis-point expansion in net interest margin to 2.96%, higher loan yields, lower funding costs and positive operating leverage. Loan and deposit trends strengthened: Gross loans grew 2% sequentially to $15 billion, led by commercial and industrial lending, while deposits increased 1% to $15.9 billion. Non-interest-bearing deposits rose 5% as the bank continued shifting away from higher-cost time deposits. MANUBANK acquisition and outlook remain on track: Hope expects to close its all-cash acquisition of SMBC MANUBANK’s commercial banking unit in the second half of 2026, adding approximately $2.3 billion in loans and $2.6 billion in deposits. Full-year guidance was unchanged, including 15%–20% revenue growth and approximately 20% end-of-period loan growth.

Hope Bancorp NASDAQ: HOPE reported higher second-quarter earnings and revenue as net interest margin expanded, loan growth accelerated and the company continued to improve its deposit mix ahead of its planned acquisition of SMBC MANUBANK’s commercial banking unit. The company reported second-quarter revenue of $148 million and diluted earnings per share of $0.26, up 12% from the first quarter. Earnings per share excluding notable items, primarily merger-related costs, were $0.27, up 17% sequentially from $0.23 and 40% from $0.19 a year earlier.

Chairman, President and CEO Kevin Kim said second-quarter earnings growth was supported by 5% revenue growth, a 6-basis-point expansion in net interest margin and positive operating leverage. “Overall, we delivered a strong second quarter and made solid progress during the first half of the year in executing against our key operating priorities,” Kim said.

Margin Expansion and Operating Leverage Net interest income totaled $129 million, increasing $5 million, or 4%, from the first quarter and $12 million, or 10%, from the second quarter of 2025. Chief Financial Officer Julianna Balicka said the company’s net interest margin rose to 2.96% from 2.90% in the prior quarter and 2.69% a year earlier. The margin improvement was primarily driven by higher loan yields and lower funding costs. Balicka said the June net interest margin was 2.98%, while the end-of-June deposit spot rate was 2.58% and the spot rate on interest-bearing deposits was 3.32%. Management expects continued margin expansion through the remainder of 2026, though Balicka said quarterly improvement is expected to be more modest than the increase recorded from the first to second quarter. The company continues to benefit from repricing within its certificate of deposit portfolio, she said. Non-interest income was $19 million, up 11% from the prior quarter and 19% year over year excluding notable items. The increase reflected higher gains on sales of Small Business Administration loans, customer-related income and fees, and gains on available-for-sale securities. Hope sold $68 million of SBA loans during the quarter, generating a $4 million gain on sale, compared with $53 million of sales and a $3 million gain in the first quarter. Kim said secondary-market premiums remained healthy, in the mid- to low-8% range, and the company’s current outlook calls for $16 million to $17 million in SBA gains on sale for the full year. Non-interest expense totaled $98 million, up from $94 million in the first quarter. Excluding merger-related costs, expenses were $96 million, a 2% sequential increase and a 5% increase from a year earlier. Revenue growth outpaced expense growth, bringing the efficiency ratio excluding notable items to 65.2%, compared with 66.9% in the first quarter and 69.1% a year earlier.