HOPE Q3 Deep Dive: Loan Growth and Asset Quality Improvements Offset Higher Expenses

Regional banking company Hope Bancorp (NASDAQ:HOPE) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 21.8% year on year to $142 million. Its non-GAAP profit of $0.25 per share was in line with analysts’ consensus estimates.

Is now the time to buy HOPE? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Hope Bancorp’s third quarter performance in 2025 reflected continued momentum in loan growth and improvement in asset quality, with management emphasizing the positive impact of new hires and disciplined credit management. CEO Kevin Kim highlighted the quarter as being marked by "solid execution across the organization," including broad-based loan growth and a 20 basis point expansion in net interest margin. The bank also noted a significant reduction in net charge-offs and improvements in criticized loans as key factors supporting profitability.

Looking ahead, Hope Bancorp’s guidance is anchored on expectations for sustained loan growth and further expansion of its commercial banking capabilities. Management pointed to ongoing investments in talent and the integration of teams from recently acquired institutions as drivers of future revenue. CFO Julianna Balicka cautioned that expense growth will remain elevated due to these investments but expects positive operating leverage as revenue growth outpaces costs, stating, "we expect to see sequential positive operating leverage in the fourth quarter with an improvement to our efficiency ratio."

Key Insights from Management’s Remarks

Management credited the quarter’s results to broad-based loan growth, asset quality gains, and deposit cost management, while ongoing integration of recent hires and the Territorial acquisition shaped the expense outlook.

• Loan portfolio expansion: Hope Bancorp reported growth across all major loan segments, including commercial & industrial, commercial real estate, and residential mortgages. Management attributed this to both lower levels of payoffs and increased production, supported by the hiring of experienced banking teams.
• Net interest margin recovery: The net interest margin improved by 20 basis points quarter-over-quarter, with management citing higher earning asset yields, lower funding costs, and a favorable shift in balance sheet mix as primary contributors.
• Asset quality improvement: The company saw a 57% reduction in net charge-offs and a 17% decrease in criticized commercial & industrial loans. CFO Julianna Balicka stressed that disciplined credit management and ongoing loan review processes drove these results.
• Deposit cost optimization: Management emphasized ongoing efforts to reduce deposit costs by shifting the deposit mix and repricing CDs at lower rates, aided by the addition of Territorial’s deposit base. Noninterest-bearing deposits rose modestly, supporting the funding profile.
• Expense growth due to talent investments: Noninterest expenses increased, primarily reflecting new frontline hires and expanded operations from the Territorial acquisition. However, management noted that revenue growth continued to outpace expense increases, resulting in improved operating leverage.

Drivers of Future Performance

Hope Bancorp’s outlook centers on continued loan growth, expense discipline, and the scaling of new commercial teams, while remaining mindful of risks from the broader economic environment.

• Sustained loan growth focus: Management expects high single-digit loan growth for the year, supported by a strong pipeline and further expansion into corporate and commercial banking segments. The addition of experienced bankers is expected to help drive new client relationships and business development.
• Expense management challenges: While the bank plans to continue investing in talent and operational capabilities, management acknowledged that noninterest expense growth will remain elevated. The integration of the Territorial acquisition and new hiring are expected to pressure expenses, but positive operating leverage is anticipated as revenue outpaces cost increases.
• Deposit pricing and competition: The company expects ongoing optimization of its deposit mix and pricing. Management is optimistic about containing deposit costs given the lower proportion of brokered deposits and the ability to reprice CDs at lower rates as market rates shift, but remains attentive to competitive pressures and macroeconomic uncertainty.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be monitoring (1) the pace and sustainability of loan growth, especially in newly targeted commercial segments, (2) the bank’s ability to manage expense growth and translate investments in talent into revenue gains, and (3) progress in optimizing deposit costs amid shifting market rates and competitive dynamics. Continued integration of the Territorial acquisition and credit quality trends will also be important markers.

Hope Bancorp currently trades at $11.45, up from $10.73 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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