Hope Bancorp's Q2 Profitability Soars, Fueling Strategic SMBC Acquisition

LOS ANGELES, CA – July 27, 2026 – Hope Bancorp, Inc. (NASDAQ: HOPE) delivered a powerful statement to the market with its second-quarter 2026 financial results, showcasing a significant turnaround and a clear roadmap for strategic expansion. The Los Angeles-based holding company for Bank of Hope reported a net income of $33.0 million, or $0.26 per diluted common share, marking a 12% increase from the prior quarter and a dramatic reversal from the $24.8 million net loss reported in the same period last year.

This robust performance, which met analyst expectations, is built on a foundation of disciplined operational execution, including expanding margins, controlled expenses, and steady loan growth. The results not only highlight a successful recovery but also provide the financial momentum for the bank's pending acquisition of the Commercial Banking Unit of SMBC MANUBANK, a move poised to significantly enhance its market position and long-term earnings capacity.

A Resounding Return to Profitability

Hope Bancorp's second-quarter earnings reflect a business firing on multiple cylinders. The impressive year-over-year turnaround was driven by a combination of strong revenue growth and positive operating leverage. Net interest income, a core metric for bank profitability, climbed 4% sequentially to $129.0 million. This was bolstered by a notable six-basis-point expansion in the net interest margin (NIM) to 2.96%.

This margin expansion is particularly significant in a competitive environment for regional banks. It was achieved through a dual strategy of increasing asset yields and lowering funding costs. The bank's average loan yield ticked up to 5.73%, while its cost of interest-bearing deposits fell by six basis points from the prior quarter to 3.31%. This reduction in funding costs was aided by a deliberate shift in deposit mix and the lingering benefits of its 2025 acquisition of Territorial Bancorp, which brought a portfolio of lower-cost deposits onto its books.

"Overall, we delivered strong quarterly results and are pleased with the continued progress made to improve the profitability and core operating performance of the Bank," said Kevin S. Kim, Chairman, President, and Chief Executive Officer of Hope Bancorp. "Second quarter 2026 earnings growth reflected a combination of revenue growth and positive operating leverage, driven by loan growth, net interest margin expansion, lower funding costs, increased fee income and expense discipline."

Noninterest income also provided a healthy boost, rising 11% from the first quarter to $18.9 million. This was supported by a $4.4 million net gain from the sale of $67.9 million in Small Business Administration (SBA) loans and solid growth in customer-driven fees. On the other side of the ledger, the bank demonstrated prudent expense management. Its efficiency ratio, a measure of noninterest expenses as a percentage of revenue, improved to 66.6%, or 65.2% when excluding merger-related costs and other notable items. This improvement underscores that revenue is growing faster than expenses, a key indicator of sustainable profitability.

Strategic Blueprint: The SMBC MANUBANK Acquisition

Beyond the strong quarterly numbers, the market is closely watching Hope Bancorp’s strategic M&A activity. The pending acquisition of SMBC MANUBANK's Commercial Banking Unit is a centerpiece of its growth strategy. The all-cash transaction, expected to close in the second half of 2026, is set to significantly scale the bank's operations.

Based on recent figures, the deal is projected to add approximately $2.3 billion in loans and $2.6 billion in deposits to Hope Bancorp's balance sheet before fair value adjustments. This strategic purchase is designed to do more than just add assets; it aims to deepen the bank's capabilities and market reach.

As Mr. Kim noted, "Our pending acquisition of the Commercial Banking Unit of SMBC MANUBANK is closely aligned with our priorities and represents an important opportunity to expand our middle market and multinational banking capabilities, develop specialty deposit verticals, and broaden our footprint in Southern California." The transaction is anticipated to be accretive to the bank's 2027 earnings and returns on tangible common equity, signaling clear long-term value for shareholders.

Adding another layer of strategic depth, the deal includes a future collaboration and partnership agreement with SMBC. This will allow Hope Bancorp to better serve Japanese commercial and retail customers in the United States, leveraging its position as the nation's largest regional bank focused on multicultural communities.

Fortifying the Balance Sheet

Hope Bancorp's growth ambitions are supported by a solid and improving balance sheet. Gross loans grew by an annualized rate of 8% during the quarter to reach $15.03 billion, with broad-based growth across its commercial and industrial, commercial real estate, and residential mortgage portfolios.

Credit quality, a perpetual focus for investors, remained stable and showed meaningful year-over-year improvement. Nonperforming assets declined by $7.7 million from the prior quarter to $112.9 million, or just 0.59% of total assets. Criticized loans, while up slightly quarter-over-quarter, were down a substantial 19% from the previous year. Furthermore, net charge-offs fell to 0.24% of average loans, down from 0.33% a year ago, reflecting effective risk management.

On the funding side, the bank is executing a shrewd deposit strategy. Total deposits grew to $15.88 billion, but the composition of that growth is key. Noninterest-bearing demand deposits—a cheap and stable source of funding—surged 5% quarter-over-quarter. This growth, partly attributed to inflows of tariff refund money to commercial clients, helped offset a planned 1% decrease in higher-cost time deposits. This deliberate remixing of the deposit base is a critical component of the bank's ability to manage funding costs and support its net interest margin.

This financial strength is anchored by a robust capital position. At quarter-end, the company’s Common Equity Tier 1 (CET1) capital ratio stood at 12.27%, and its total capital ratio was 13.95%, both comfortably exceeding the regulatory requirements for being considered “well-capitalized.”

Investor Confidence and Market Outlook

The strong quarterly performance and clear strategic direction have been well-received by the market, with the company's stock price climbing in response to the earnings release. Hope Bancorp has also continued to return capital to its investors, distributing $44.6 million year-to-date through a combination of its $0.14 per share quarterly dividend and $8.7 million in common stock repurchases.

Looking ahead, CEO Kevin Kim expressed confidence in the bank's trajectory. “As we enter the second half of 2026, we are well-positioned to continue our momentum in executing on our key priorities. We are focused on building a more profitable and resilient franchise through disciplined balance sheet management, prudent expense control and the strengthening of client relationships to deliver long-term value for our stockholders,” he stated.

The bank's full-year guidance, which now incorporates the expected impact of the MANUBANK acquisition in the fourth quarter, projects end-of-period loan growth of approximately 20%. With a fortified balance sheet and a clear strategic path forward, Hope Bancorp is positioning itself not just for recovery, but for significant expansion in the competitive regional banking landscape.