Hope Bancorp, Inc. has reported its financial results for the first quarter of 2024, including a net income of $25.9 million, or $0.21 per diluted common share. This marks a slight decrease from the fourth quarter of 2023, where the net income was $26.5 million, or $0.22 per diluted common share.
The company's noninterest expenses, excluding notable items, decreased by 2% from the preceding fourth quarter of 2023. Additionally, all capital ratios increased quarter-over-quarter, with the tangible common equity ratio rising to 9.33% and the total capital ratio rising to 14.19% as of March 31, 2024.
Hope Bancorp has also announced the signing of a definitive merger agreement with Territorial Bancorp, which is expected to create the largest regional bank catering to multi-ethnic customers with full-service branches across the continental United States and Hawai'i.
In terms of financial metrics, the net interest income before provision for credit losses for the first quarter of 2024 totaled $115.0 million, a decrease of 9% from the immediately preceding fourth quarter. The net interest margin contracted by 15 basis points to 2.55% from 2.70% in the fourth quarter of 2023.
Noninterest income for the first quarter of 2024 totaled $8.3 million, compared with $9.3 million in the immediately preceding fourth quarter. Notably, the company did not sell any loans in the first quarter of 2024.
The company's noninterest expense for the first quarter was $84.8 million, including $1.0 million of merger-related expenses, an incremental accrual of $1.0 million for the FDIC special assessment, and $143,000 of restructuring-related costs, all on a pre-tax basis. Excluding notable items, noninterest expense for the first quarter of 2024 was $82.7 million, down 2% compared with $84.1 million for the fourth quarter of 2023.
The effective tax rate for the first quarter of 2024 was 27.9%, compared with 24.9% for the full year 2023.
In terms of the balance sheet, cash and cash equivalents totaled $1.19 billion at March 31, 2024, compared with $1.93 billion at December 31, 2023. Loans receivable of $13.72 billion at March 31, 2024, decreased 1% from $13.85 billion at December 31, 2023.
Total deposits were stable quarter-over-quarter, with total deposits of $14.75 billion at March 31, 2024, and December 31, 2023. The company reduced brokered time deposits by $182.7 million, or 13% from December 31, 2023.
Nonperforming assets totaled $106.8 million, or 0.59% of total assets, at March 31, 2024, compared with nonperforming assets of $45.5 million, or 0.24% of total assets, at December 31, 2023. The company recorded net charge offs of $3.5 million in the first quarter of 2024, equivalent to 0.10% annualized of average loans.
The allowance for credit losses totaled $158.8 million at March 31, 2024, compared with $158.7 million at December 31, 2023. The allowance coverage ratio was 1.16% of loans receivable at March 31, 2024, up one basis point from December 31, 2023.
Hope Bancorp's capital ratios are strong, and all regulatory risk-based capital ratios expanded quarter-over-quarter and year-over-year. At March 31, 2024, the company and the bank continued to exceed all regulatory capital requirements generally required to meet the definition of a "well-capitalized" financial institution. Total stockholders' equity was $2.11 billion, or $17.51 per common share, at March 31, 2024.
The market has reacted to these announcements by moving the company's shares -5.9% to a price of $10.31. If you want to know more, read the company's complete 8-K report here.
