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What changed in HOPE BANCORP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HOPE BANCORP INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+337 added−304 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in HOPE BANCORP INC's 2025 10-K

337 paragraphs added · 304 removed · 253 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

42 edited+9 added−16 removed126 unchanged
Biggest changeThe Basel III Capital Rules differ from earlier capital rules by excluding from Tier 1 capital trust preferred securities (subject to certain grandfathering exceptions for organizations like Hope Bancorp, which had less than $15 billion in assets as of December 31, 2009), mortgage servicing rights and certain deferred tax assets and to include unrealized gains and losses on available for sale debt and equity securities (unless the organization opts out of including such unrealized gains and losses). 10 Under the Basel III Capital Rules, the minimum capital ratios applicable to Hope Bancorp and the Bank are as follows: • 4.5% common equity Tier 1 to risk‑weighted assets; • 6.0% Tier 1 capital (that is, common equity Tier 1 plus additional Tier 1 capital) to risk‑weighted assets; • 8.0% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk‑weighted assets; and • 4.0% Tier 1 capital to average consolidated assets as reported on regulatory financial statements (known as the “leverage ratio”).
Biggest changeThe Basel III Capital Rules differ from earlier capital rules by excluding from Tier 1 capital trust preferred securities (subject to certain grandfathering exceptions for organizations like Hope Bancorp, which had less than $15 billion in assets as of December 31, 2009), mortgage servicing rights and certain deferred tax assets and to include unrealized gains and losses on available for sale debt and equity securities (unless the organization opts out of including such unrealized gains and losses).
We offer a full suite of commercial, corporate and consumer loans, deposit and fee-based products and services, including commercial and commercial real estate lending, Small Business Administration (“SBA”) lending, residential mortgage and other consumer lending, treasury management services, foreign currency exchange solutions, interest rate risk hedging products, and other and international trade financing, among others.
We offer a full suite of commercial, corporate and consumer loans, deposit and fee-based products and services, including commercial and commercial real estate lending, Small Business Administration (“SBA”) lending, residential mortgage and other consumer lending, treasury management services, foreign currency exchange solutions, interest rate risk hedging products, and international trade financing, among others.
A bank meeting the minimum capital ratios required to be considered well-capitalized, adequately capitalized, or undercapitalized may, however, may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or practice warrants such treatment.
A bank meeting the minimum capital ratios required to be considered well-capitalized, adequately capitalized, or undercapitalized may, however, be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or practice warrants such treatment.
Our network of branches and loan production offices includes locations in California, New York, Texas, Washington, Illinois, New Jersey, Georgia, Florida, Alabama, Colorado, and Oregon, and includes a representative office in Seoul, South Korea. Our headquarters are located at 3200 Wilshire Boulevard, Suite 1400, Los Angeles, California 90010, and our telephone number at that address is (213) 639-1700.
Our network of branches and loan production offices includes locations in California, New York, Texas, Hawaii, Washington, Illinois, New Jersey, Georgia, Florida, Alabama, Colorado, and Oregon, and includes a representative office in Seoul, South Korea. Our headquarters are located at 3200 Wilshire Boulevard, Suite 1400, Los Angeles, California 90010, and our telephone number at that address is (213) 639-1700.
In aggregate, we contributed approximately more than $3.0 million to the Hope Scholarship Foundation since its establishment in 2001. 15 Our Environmental, Social and Governance (“ESG”) report and webpage are available in our investor relation website (www.ir-hopebancorp.com). The ESG report contains our ESG progress including the establishment of an ESG framework, ESG policy, and our achievements on ESG compliance. 16
In aggregate, we contributed approximately more than $3.15 million to the Hope Scholarship Foundation since its establishment in 2001. Our Environmental, Social and Governance (“ESG”) report and webpage are available in our investor relation website (www.ir-hopebancorp.com). The ESG report contains our ESG progress including the establishment of an ESG framework, ESG policy, and our achievements on ESG compliance. 16
In addition, if Hope Bancorp does not maintain an adequate capital conservation buffer under the Basel III Capital Rules, its ability to pay dividends to or repurchase shares from stockholders may be restricted. The Bank is a legal entity that is separate and distinct from Hope Bancorp.
In addition, if Hope Bancorp does not maintain an adequate capital conservation buffer under the Basel III Capital Rules, its ability to pay dividends to or repurchase shares from stockholders may be restricted. 14 The Bank is a legal entity that is separate and distinct from Hope Bancorp.
The Bank is also subject to regulation, supervision, and examination by the Consumer Finance Protection Bureau (“CFPB”) with respect to federal consumer financial laws. While the Bank is not a member of the FRB, the Bank is also subject to certain regulations of the FRB.
The Bank is also subject to regulation, supervision, and examination by the Consumer Financial Protection Bureau (“CFPB”) with respect to federal consumer financial laws. While the Bank is not a member of the FRB, the Bank is also subject to certain regulations of the FRB.
While Hope Bancorp and the Bank had no investment positions or relationships at December 31, 2024, that were subject to the Volcker Rule, we may be subject to the compliance and recording keeping provisions of this rule. The Dodd-Frank Act requires banking organizations with consolidated assets exceeding $10 billion to establish board-level risk committees and to perform annual stress tests.
While Hope Bancorp and the Bank had no investment positions or relationships at December 31, 2025, that were subject to the Volcker Rule, we may be subject to the compliance and recording keeping provisions of this rule. The Dodd-Frank Act requires banking organizations with consolidated assets exceeding $10 billion to establish board-level risk committees and to perform annual stress tests.
See “Consumer Finance Protection Bureau.” • We are subject to the maximum permissible interchange fee for swipe transactions, equal to no more than 21 cents plus 5 basis points of the transaction value for many types of debit interchange transactions. • We calculate our FDIC deposit assessment base using a performance score and a loss-severity score system described below in “Deposit Insurance.” • We are subject to the “Volcker Rule,” which generally restricts us from engaging in activities that are considered proprietary trading and from sponsoring or investing in certain entities, including hedge or private equity funds that are considered covered funds.
See “Consumer Financial Protection Bureau.” • We are subject to the maximum permissible interchange fee for swipe transactions, equal to no more than 21 cents plus 5 basis points of the transaction value for many types of debit interchange transactions. • We calculate our FDIC deposit assessment base using a performance score and a loss-severity score system described below in “Deposit Insurance.” 11 • We are subject to the “Volcker Rule,” which generally restricts us from engaging in activities that are considered proprietary trading and from sponsoring or investing in certain entities, including hedge or private equity funds that are considered covered funds.
The maximum loan amount is $350 thousand, and loans are processed based on the Company’s credit scoring program. Our SBA loans are originated through our SBA loan department, our SBA loan production offices, or can be referred through our branch network. The Bank has been designated as an SBA Preferred Lender, which is the highest designation awarded by the SBA.
The maximum loan amount is $500 thousand, and loans are processed based on the Company’s credit scoring program. Our SBA loans are originated through our SBA loan department, our SBA loan production offices, or can be referred through our branch network. The Bank has been designated as an SBA Preferred Lender, which is the highest designation awarded by the SBA.
At December 31, 2024, the ratios of each of Hope Bancorp and the Bank exceeded the minimum percentage requirements to generally be deemed “well-capitalized” for bank regulatory purposes and satisfied the capital conservation buffer requirement. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
At December 31, 2025, the ratios of each of Hope Bancorp and the Bank exceeded the minimum percentage requirements to generally be deemed “well-capitalized” for bank regulatory purposes and satisfied the capital conservation buffer requirement. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
We also had nine loan production offices located in California, Colorado, Florida, Georgia, Oregon, Texas, and Washington, as well as a representative office in Seoul, South Korea. The banking and financial services industry generally, and in our market areas specifically, is highly competitive.
We also had nine loan production offices located in California, New York, Colorado, Florida, Georgia, Oregon, Texas, and Washington, as well as a representative office in Seoul, South Korea. The banking and financial services industry generally, and in our market areas specifically, is highly competitive.
The Dodd-Frank Wall Street Reform and Consumer Protection Action (the “Dodd-Frank Act”) expanded definitions and restrictions on transactions with affiliates and insiders under Sections 23A and 23B and also lending limits for derivative transactions, repurchase agreements, and securities lending and borrowing transactions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) expanded definitions and restrictions on transactions with affiliates and insiders under Sections 23A and 23B and also lending limits for derivative transactions, repurchase agreements, and securities lending and borrowing transactions.
Management believes that as of December 31, 2024, Hope Bancorp and the Bank met all requirements under the Basel III Capital Rules applicable to them on a fully phased-in basis, including the capital conservation buffer.
Management believes that as of December 31, 2025, Hope Bancorp and the Bank met all requirements under the Basel III Capital Rules applicable to them on a fully phased-in basis, including the capital conservation buffer.
In addition to our consumer and commercial deposits, we obtain both secured and unsecured wholesale deposits, including public deposits such as State of California Treasurer’s time deposits; brokered demand deposits, money market, and time deposits, as well as deposits gathered from outside of the Bank’s normal market area through deposit listing services and our online banking platform.
In addition to our consumer and commercial deposits, we obtain both secured and unsecured wholesale deposits, including public deposits such as State of California Treasurer’s time deposits and Hawaii state and local government deposits; brokered demand deposits, money market, and time deposits, as well as deposits gathered from outside of the Bank’s normal market area through deposit listing services and our online banking platform.
For additional information on deposits, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Deposits”. Borrowing Activities When we have more funds than required for our reserve requirements or short-term liquidity needs, we may sell federal funds to other financial institutions.
For additional information on deposits, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Deposits”. Borrowing Activities When we have more funds than required for our short-term liquidity needs, we may sell federal funds to other financial institutions.
Through our branch network, we provide our banking customers with personal and business checking accounts, money market accounts, savings accounts, time deposit accounts, individual retirement accounts, 24-hour automated teller machines (“ATM”), internet banking and bill-pay, remote deposit capture, lock boxes, and automated clearing house (“ACH”) origination services.
Through our branch network, we provide our banking customers with personal and business checking accounts, money market accounts, savings accounts, time deposit accounts, individual retirement accounts, 24-hour automated teller machines (“ATM”), internet banking and bill-pay, remote deposit capture, lockboxes, automated clearing house (“ACH”) origination services, and mobile banking services.
The remaining net carrying balance of convertible notes at December 31, 2024, was $444 thousand. Market Area and Competition As of December 31, 2024, we had 46 branches in the United States, predominantly in multi-ethnic communities.
The remaining net carrying balance of convertible notes at December 31, 2025, was $444 thousand. Market Area and Competition As of December 31, 2025, we had 74 branches in the United States, predominantly in multi-ethnic communities.
As of December 31, 2024 and 2023, the Bank and Hope Bancorp both had 1,244 full-time equivalent employees. None of our employees are represented by a union or covered by a collective bargaining agreement. Management believes that its relations with its employees are good.
As of December 31, 2025 and 2024, the Bank and Hope Bancorp had 1,434 and 1,244, respectively, full-time equivalent employees. None of our employees are represented by a union or covered by a collective bargaining agreement. Management believes that its relations with its employees are good.
This additional amount was paid in two additional quarterly installments, at a rate of approximately 9.4 basis points per year on the same adjusted assessment base. We recorded an expense of $691 thousand and $4.0 million in 2024 and 2023, respectively for the total amount due under this special assessment.
This additional amount was paid in two additional quarterly installments, at a rate of approximately 9.4 basis points per year on the same adjusted assessment base. We recorded an expense of $691 thousand in 2024 for the amount due under this special assessment.
Following the completion of the pending transaction, the legacy Territorial franchise in Hawaii would continue to do business under the trade name Territorial Savings, a division of Bank of Hope.
Following the completion of the transaction, the legacy Territorial franchise in Hawaii continues to do business under the trade name Territorial Savings, a division of Bank of Hope.
A prepayment penalty is usually imposed for early repayment of these advances. Information concerning FHLB advances and other borrowings is included in Note 9 of our Notes to Consolidated Financial Statements. We may also borrow from the Federal Reserve Bank’s discount window.
Early termination of these advances may be subject to a prepayment penalty. Information concerning FHLB advances and other borrowings is included in Note 9 of our Notes to Consolidated Financial Statements. We may also borrow from the Federal Reserve Bank’s discount window.
Of these, 25 were located in California, nine were located in New York and New Jersey; four were in Washington; three were in Illinois; three were in Texas; one was in Alabama, and one was in Georgia.
Of these, 29 were located in Hawaii, 24 were located in California, nine were located in New York and New Jersey; four were in Washington; three were in Illinois; three were in Texas; one was in Alabama, and one was in Georgia.
This designation generally facilitates a more efficient marketing and approval process for SBA loans. We have attained SBA Preferred Lender status nationwide. Consumer and Other Loans Our consumer loans primarily consist of single-family mortgages; we also offer credit card loans and personal loans, and have historically offered home equity loans through Hope’s predecessor banks.
This designation generally facilitates a more efficient marketing and approval process for SBA loans. We have attained SBA Preferred Lender status nationwide. Consumer and Other Loans Our consumer loans primarily consist of single-family mortgages; we also offer personal loans and home equity loans.
The FRB implements national monetary policies (with objectives such as curbing inflation or preventing recession) through its open-market operations in U.S. government securities, by adjusting the required level of reserves for depository institutions subject to its reserve requirements, and by varying the targeted federal funds and discount rates applicable to borrowings by depository institutions.
The FRB implements national monetary policies (with objectives such as curbing inflation or preventing recession) through its open-market operations in U.S. government securities, and by varying the targeted federal funds and discount rates applicable to borrowings by depository institutions.
The Basel III Capital Rules (i) establish a capital measure called “common equity Tier 1” and a related regulatory capital ratio of common equity Tier 1 to risk‑weighted assets, (ii) specify that Tier 1 capital consists of common equity Tier 1 and “additional Tier 1 capital” instruments meeting certain requirements, (iii) mandate that most deductions and adjustments to regulatory capital measures be made to common equity Tier 1 and not to the other components of capital, and (iv) specify deductions from and adjustments to capital that are somewhat more expansive than those under prior capital rules.
The risk classifications and, therefore, the required capital amounts may be subject to qualitative judgments by regulators about components, risk-weighting, and other factors. 10 The Basel III Capital Rules (i) establish a capital measure called “common equity Tier 1” and a related regulatory capital ratio of common equity Tier 1 to risk‑weighted assets, (ii) specify that Tier 1 capital consists of common equity Tier 1 and “additional Tier 1 capital” instruments meeting certain requirements, (iii) mandate that most deductions and adjustments to regulatory capital measures be made to common equity Tier 1 and not to the other components of capital, and (iv) specify deductions from and adjustments to capital that are somewhat more expansive than those under prior capital rules.
We also have the right to defer interest on the Debentures for up to five years. In 2018, we issued $217.5 million aggregate principal amount of 2.00% convertible senior notes maturing on May 15, 2038, in a private offering to investors. The convertible notes were issued as part of our plan to repurchase shares of our common stock.
In 2018, we issued $217.5 million aggregate principal amount of 2.00% convertible senior notes maturing on May 15, 2038, in a private offering to investors. The convertible notes were issued as part of our plan to repurchase shares of our common stock.
In addition, we may borrow from the FHLB on a longer term basis to provide funding for certain loan or investment securities strategies, as well as for asset-liability management. The FHLB functions in a reserve credit capacity for qualifying financial institutions.
In addition, we may borrow from the FHLB on a longer term basis to provide funding for certain loan or investment securities strategies, as well as for asset-liability management. At December 31, 2025, there was no remaining balance on the borrowing capacity from FHLB Des Moines. The FHLB functions in a reserve credit capacity for qualifying financial institutions.
SBA 504 loans are typically extended for the purpose of purchasing owner occupied commercial real estate or long-term capital equipment. SBA 504 loans are typically extended for up to 20 years or the life of the asset being financed. SBA 504 loans are financed as a participation loan between the Bank and the SBA through a Certified Development Company (“CDC”).
SBA 504 loans are typically extended for up to 20 years or the life of the asset being financed. SBA 504 loans are financed as a participation loan between the Bank and the SBA through a Certified Development Company (“CDC”).
Through our social rewards and recognition platform, called Bucketlist, employees recognize one another for milestones and achievements, or simply express gratitude to anyone within the Bank for demonstrating Bank of Hope Core Values of trust, excellence, agility, meritocracy, and service.
Through our social rewards and recognition platform, called Bucketlist, employees recognize one another for milestones and achievements, or simply express gratitude to anyone within the Bank for demonstrating Bank of Hope Core Values of integrity, transparency, fairness, initiative, teamwork, and satisfaction.
Most provisions of the final rule will become effective on January 1, 2026, and the data reporting requirements will become effective on January 1, 2027. 12 USA PATRIOT Act and Anti-Money Laundering Laws Under the USA PATRIOT Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships, as well as enhanced due diligence standards that are intended to prevent and detect the use of the United States financial system for money laundering and terrorist financing activities.
USA PATRIOT Act and Anti-Money Laundering Laws Under the USA PATRIOT Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships, as well as enhanced due diligence standards that are intended to prevent and detect the use of the United States financial system for money laundering and terrorist financing activities.
Any future changes in FDIC insurance assessments may have a material and adverse effect on our earnings and could have a material adverse effect on the value of, or market for, our common stock. 13 Safety and Soundness Standards; Regulatory Enforcement Authority The federal and California bank regulatory agencies have extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of appropriate loan loss reserves for regulatory purposes.
Safety and Soundness Standards; Regulatory Enforcement Authority The federal and California bank regulatory agencies have extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of appropriate loan loss reserves for regulatory purposes.
In addition to the interest income earned on the unguaranteed portion of the SBA 7(a) loans that are not sold, we recognize income from gains on sales and loan servicing income on the SBA 7(a) loans that are sold.
In addition to the interest income earned on the unguaranteed portion of the SBA 7(a) loans that are not sold, we recognize income from gains on sales and loan servicing income on the SBA 7(a) loans that are sold. SBA 504 loans are typically extended for the purpose of purchasing owner occupied commercial real estate or long-term capital equipment.
In addition, if the Bank does not maintain an adequate capital conservation buffer under the Basel III Capital Rules, the Bank may face restrictions on its ability to pay dividends to Hope Bancorp. 14 Consumer Financial Protection Bureau The Dodd-Frank Act created the CFPB as an independent entity within the FRB with broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards.
Consumer Financial Protection Bureau The Dodd-Frank Act created the CFPB as an independent entity within the FRB with broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards.
Provisions in the legislation that affect deposit insurance assessments, payment of interest on demand deposits and interchange fees could increase the costs associated with deposits as well as place limitations on certain revenues those deposits may generate. 11 Prompt Corrective Action The FDI Act requires the federal bank regulatory agencies to take “prompt corrective action” with respect to a depository institution that does not meet certain capital adequacy standards, including requiring the prompt submission of an acceptable capital restoration plan.
Prompt Corrective Action The FDI Act requires the federal bank regulatory agencies to take “prompt corrective action” with respect to a depository institution that does not meet certain capital adequacy standards, including requiring the prompt submission of an acceptable capital restoration plan.
Community Reinvestment Act The Bank is subject to the CRA, which requires federal banking regulators to evaluate the record of a financial institution in meeting the credit needs of its local communities, including in low- and moderate-income neighborhoods.
Failure to comply with these laws and regulations can subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines or criminal penalties, punitive damages to consumers, and the loss of certain contractual rights. 12 Community Reinvestment Act The Bank is subject to the CRA, which requires federal banking regulators to evaluate the record of a financial institution in meeting the credit needs of its local communities, including in low- and moderate-income neighborhoods.
The Bank’s ability to pay cash dividends to Hope Bancorp will also depend upon management’s assessment of future capital requirements, contractual restrictions, and other factors.
The Bank’s ability to pay cash dividends to Hope Bancorp will also depend upon management’s assessment of future capital requirements, contractual restrictions, and other factors. In addition, if the Bank does not maintain an adequate capital conservation buffer under the Basel III Capital Rules, the Bank may face restrictions on its ability to pay dividends to Hope Bancorp.
Some of the highlights we have taken to be a socially responsible company are: • Approximately 37% of the Bank’s branches are located in low-to-moderate income areas; • Our employees had nearly 312 hours of CRA-reportable volunteer hours in 2024; • We funded approximately $2.24 billion of loans in 2024; • We invest in affordable housing partnerships, CRA investments, CDFI investments and in renewal energy credits; • We had approximately 528 CRA-reportable small business loans totaling to $196.2 million in 2024, with 439 loans totaling $153.8 million within the Bank’s assessment areas; • We had approximately over $600 thousand in charitable donations to 158 organizations to support the social, educational, and cultural wellness of the communities in which we operate; and • We awarded 60 students scholarships of $2,500 each in 2024.
As a community-based bank, we are committed to being model corporate citizens in our communities through various forms of investments, contributions, and volunteer work. 15 Some of the highlights we have taken to be a socially responsible company are: • Approximately 31% of the Bank’s branches are located in low-to-moderate income areas; • Our employees had nearly 2,150 hours of CRA-reportable volunteer hours in 2025; • We funded approximately $3.10 billion of loans in 2025; • We invest in affordable housing partnerships, CRA investments, CDFI investments and in renewal energy credits; • We had approximately 562 CRA-reportable small business loans totaling $234.3 million in 2025, with 460 loans totaling $189.1 million within the Bank’s assessment areas; • We made approximately over $550 thousand in charitable donations to 152 organizations to support the social, educational, and cultural wellness of the communities in which we operate; Additionally, we donated $200 thousand to United Way for Los Angeles fire, bringing the total charitable donations to $750 thousand in 2025; and • We awarded 52 students scholarships of $2,500 each and 20 students scholarships of $1,000 each in Hawaii in 2025, totaling $150 thousand.
The amount of FDIC assessments paid by each DIF member institution is based on its asset size and its relative risk of default as measured by regulatory capital ratios and other supervisory factors.
The amount of FDIC assessments paid by each DIF member institution is based on its asset size and its relative risk of default as measured by regulatory capital ratios and other supervisory factors. 13 In November 2023, the FDIC approved a special assessment at the rate of approximately 13.4 basis points per year, to be paid in eight quarterly installments beginning in the first quarter of 2024.
The Trusts used the net proceeds from the offering of the Trust Preferred Securities to purchase a like amount of subordinated debentures of Hope Bancorp (the “Debentures”). The Debentures are the sole assets of the trusts. Our obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee by us of the obligations of the Trusts.
The Trust Preferred Securities accrue and pay distributions periodically at specified annual rates as provided in the related indentures for the securities. The Trusts used the net proceeds from the offering of the Trust Preferred Securities to purchase a like amount of subordinated debentures of Hope Bancorp (the “Debentures”). The Debentures are the sole assets of the trusts.
The maximum amount that we may borrow from the Federal Reserve Bank’s discount window is up to 99% of the estimated fair value of qualifying loans and securities that we pledge.
The maximum amount that we may borrow from the Federal Reserve Bank’s discount window is up to 99% of the estimated fair value of qualifying loans and securities that we pledge. 7 Long-Term Debt At December 31, 2025, we had nine wholly-owned subsidiary grantor trusts (“Trusts”) that have issued $126.0 million of pooled trust preferred securities (“Trust Preferred Securities”).
The Trust Preferred Securities are mandatorily redeemable upon the maturity of the Debentures (which have maturity dates ranging from 2033 to 2037), or upon earlier redemption as provided in the indentures. We have the right to redeem the Debentures in whole (but not in part) on a quarterly basis at a specified redemption price.
Our obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee by us of the obligations of the Trusts. The Trust Preferred Securities are mandatorily redeemable upon the maturity of the Debentures (which have maturity dates ranging from 2033 to 2037), or upon earlier redemption as provided in the indentures.
Removed
Hope Bancorp exists primarily for the purpose of holding the stock of the Bank and other subsidiaries it may acquire or establish. Bank of Hope’s deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”), up to applicable limits.
Added
The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”), up to applicable limits. In addition to the Bank, the Hope Bancorp has unconsolidated subsidiaries used as business trusts in connection with issuance of trust-preferred securities as described in Note 1 0 “Convertible Notes and Subordinated Debentures" in Item 8 of this Form 10-K.
Removed
Our website at www.bankofhope.com offers internet banking services and applications in both English and Korean. On March 28, 2024, the Bank entered into a Purchase and Assumption Agreement with PromiseOne Bank, a Georgia state bank, to sell the deposits, other liabilities, and certain physical assets of the Bank’s two branches located in Virginia (Annandale and Centreville).
Added
Our website at www.bankofhope.com offers internet banking services and applications in both English and Korean. On April 2, 2025, we acquired Territorial Bancorp Inc.
Removed
The transaction was completed on October 1, 2024. On April 26, 2024, the Company entered into a merger agreement with Territorial Bancorp Inc. (“Territorial”), headquartered in Honolulu, Hawaii.
Added
(“Territorial”), headquartered in Honolulu, Hawaii, in a merger pursuant to which Territorial merged with and into the Company, with the Company being the surviving corporation, and immediately following such merger, Territorial Savings Bank, the wholly-owned bank subsidiary of Territorial, merged with and into the Bank, with the Bank being the surviving bank (such transaction, the “Merger”).
Removed
Under the terms of the merger agreement, assuming the transaction is consummated, Territorial will merge with and into the Company, immediately followed by the merger of Territorial’s subsidiary bank, Territorial Savings Bank, with and into the Company’s subsidiary bank, Bank of Hope.
Added
We have the right to redeem the Debentures in whole (but not in part) on a quarterly basis at a specified redemption price. We also have the right to defer interest on the Debentures for up to five years.
Removed
Upon completion, Territorial shareholders would receive a fixed exchange ratio of 0.8048 shares of the Company’s common stock in exchange for each share of Territorial common stock they own.
Added
As a result of our acquisition of Territorial Savings Bank in 2025, the Bank operates 29 branches in Hawaii under the trade name Territorial Savings, a division of Bank of Hope.
Removed
Based on the closing price of the Company’s common stock on April 26, 2024, this represented a value of $8.82 per share of Territorial common stock, although the actual value will be determined upon the completion of the merger.
Added
Some aspects of the Bank's Hawaii operations are subject to the laws of the State of Hawaii and to the supervisory authority of the Hawaii Division of Financial Institutions, such as certain consumer protection laws and Hawaii laws and regulations governing the acceptance and collateralization of public deposits.
Removed
From June 30, 2023, through March 31, 2024, we elected to retain our SBA 7(a) loan production on our Consolidated Statements of Financial Condition and did not record any gain on sale of SBA loans.
Added
Under the Basel III Capital Rules, the minimum capital ratios applicable to Hope Bancorp and the Bank are as follows: • 4.5% common equity Tier 1 to risk‑weighted assets; • 6.0% Tier 1 capital (that is, common equity Tier 1 plus additional Tier 1 capital) to risk‑weighted assets; • 8.0% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk‑weighted assets; and • 4.0% Tier 1 capital to average consolidated assets as reported on regulatory financial statements (known as the “leverage ratio”).
Removed
Due to lower premium rates paid in the secondary market, it was more economic to retain the production on our Consolidated Statements of Financial Condition and earn interest income on the full production amount. During the 2024 second quarter, the Company resumed sales of the guaranteed portion of its SBA 7(a) loans as secondary market premium rates increased.
Added
Provisions in the legislation that affect deposit insurance assessments, payment of interest on demand deposits and interchange fees could increase the costs associated with deposits as well as place limitations on certain revenues those deposits may generate.
Removed
In 2023, the Federal Reserve Bank, under the Bank Term Funding Program (“BTFP”), previously allowed institutions to pledge certain securities at par value and borrow at a rate no lower than the interest rate on reserve balances in effect on the day the loan was made.
Added
In 2025, upon notification from the FDIC that the additional assessment was no longer necessary, we recorded an expense reversal of $691 thousand. Any future changes in FDIC insurance assessments may have a material and adverse effect on our earnings and could have a material adverse effect on the value of, or market for, our common stock.
Removed
The BTFP ceased making new advances in March 2024. 7 Long-Term Debt At December 31, 2024, we had nine wholly-owned subsidiary grantor trusts (“Trusts”) that have issued $126.0 million of pooled trust preferred securities (“Trust Preferred Securities”). The Trust Preferred Securities accrue and pay distributions periodically at specified annual rates as provided in the related indentures for the securities.
Removed
The risk classifications and, therefore, the required capital amounts may be subject to qualitative judgments by regulators about components, risk-weighting, and other factors.
Removed
Failure to comply with these laws and regulations can subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines or criminal penalties, punitive damages to consumers, and the loss of certain contractual rights.
Removed
In 2024, the federal banking regulators issued final CRA rules to adapt to changes in the banking industry, including the expanded role of mobile and online banking, and to tailor performance standards to account for differences in bank size and business models.
Removed
The new rule also includes data collection and reporting requirements, some of which are applicable only to banks with over $10 billion in assets, like the Bank.
Removed
In November 2023, the FDIC approved a special assessment at the rate of approximately 13.4 basis points per year, to be paid in eight quarterly installments beginning in the first quarter of 2024.
Removed
As a community-based bank, we are committed to being model corporate citizens in our communities through various forms of investments, contributions, and volunteer work.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

15 edited+3 added−2 removed182 unchanged
Biggest changeAs we expand outside our traditional geographic markets, we may encounter additional risks that may adversely affect us . Currently, the majority of our offices are located in California, but we also have branches or loan production offices in the greater New York City area, Chicago, Houston, Dallas, Tampa, and Seattle metropolitan areas, New Jersey, Colorado, Georgia, and Alabama.
Biggest changeCurrently, the majority of our offices are located in California and Hawaii, but we also have branches or loan production offices in the greater New York City area, Chicago, Houston, Dallas, Tampa, and Seattle metropolitan areas, New Jersey, Colorado, Georgia, and Alabama. Over time, we may seek to establish offices in other parts of the United States as well.
While we do not believe cybersecurity threats are reasonably likely to affect us, our business strategy, our results of operations or our financial conditions, like all financial institutions, we face a risks of such threats, the consequences of which could be material.
While we do not believe cybersecurity threats are reasonably likely to affect us, our business strategy, our results of operations or our financial conditions, like all financial institutions, we face risks of such threats, the consequences of which could be material.
If any of these known or unknown risks or uncertainties actually occurs, our business, financial condition and results of operations may be materially and adversely effected. In that event, the market price for our common stock would likely decline.
If any of these known or unknown risks or uncertainties actually occurs, our business, financial condition and results of operations may be materially and adversely affected. In that event, the market price for our common stock would likely decline.
A reduction or discontinuance of dividends on our common stock could have a material adverse effect on our business, including the market price of our common stock. The value of our securities in our investment portfolio may decline in the future.
A reduction or discontinuation of dividends on our common stock could have a material adverse effect on our business, including the market price of our common stock. The value of our securities in our investment portfolio may decline in the future.
We conduct this assessment by reviewing industry-recognized breach reports, identifying the top threats, calculating the likelihood and impact of these threats, and thereby determining our overall inherent risk. We then use the Cybersecurity Assessment Tool to establish a risk profile.
We conduct this assessment by reviewing industry-recognized breach reports, identifying the top threats, calculating the likelihood and impact of these threats, and thereby determining our overall inherent risk. We then use the CRI Profile to establish a risk profile.
Based on the risk profile, the FFIEC Cybersecurity Assessment Tool recommends a program maturity level, which we use to determine whether we have the requisite minimum security controls in place that are effective. This control evaluation then helps us to determine our cybersecurity residual risk and whether we need to implement any additional controls.
Based on the risk profile, the CRI Profile recommends a program maturity level, which we use to determine whether we have the requisite minimum security controls in place that are effective. This control evaluation then helps us to determine our cybersecurity residual risk and whether we need to implement any additional controls.
We have processes to inform the Board Risk Committee and the Board about risks from cybersecurity threats. Our management team reports its findings using the FFIEC Cybersecurity Assessment Tool and our information security team’s determination as to whether our security controls, at a minimum, are in place and effective.
We have processes to inform the Board Risk Committee and the Board about risks from cybersecurity threats. Our management team reports its findings using the CRI Profile assessment and our information security team’s determination as to whether our security controls, at a minimum, are in place and effective.
We have a high level of loans secured by real estate collateral. A downturn in the real estate market may seriously impair our loan portfolio . As of December 31, 2024, approximately 63% of our loan portfolio consisted of loans secured by various types of commercial real estate (excluding 1-4 family residential mortgage loans).
We have a high level of loans secured by real estate collateral. A downturn in the real estate market may seriously impair our loan portfolio . As of December 31, 2025, approximately 58% of our loan portfolio consisted of loans secured by various types of commercial real estate (excluding 1-4 family residential mortgage loans).
In addition to using FFIEC Cybersecurity Assessment Tool, we evaluate the robustness and effectiveness of our cybersecurity program both internally and externally with periodic internal risk assessments, and internal and third-party audits. We also use third party assessments to simulate threat actors to test and evaluate our cybersecurity controls and the effectiveness of our overall program.
In addition to using CRI Profile assessment, we evaluate the robustness and effectiveness of our cybersecurity program both internally and externally with periodic internal risk assessments, and internal and third-party audits. We also use third party assessments to simulate threat actors to test and evaluate our cybersecurity controls and the effectiveness of our overall program.
Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations. The current Presidential Administration has signaled that tariffs and retaliatory tariffs, as well as other trade restrictions, may be imposed against U.S. trading partners.
Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations. The current Presidential Administration has imposed tariffs and retaliatory tariffs, and has signaled imposing other trade restrictions, against U.S. trading partners.
In addition, to the extent changes in the political environment have a negative impact on us, or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
In addition, to the extent changes in the political environment have a negative impact on us, or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future. On February 20, 2026, the U.S.
Our processes for identifying, assessing, and managing material risks from cybersecurity threats includes reliance on the FFIEC Cybersecurity Assessment Tool as well as recurring audits and assessments of our cybersecurity program and controls.
Our processes for identifying, assessing, and managing material risks from cybersecurity threats includes reliance on the CRI Profile assessment as well as recurring audits and assessments of our cybersecurity program and controls.
We believe our information security team is well positioned to identify risks from cybersecurity threats based on numerous job qualifications and ongoing training. 26 As a regulated financial institution, we have designed our cybersecurity program based on the requirements of the GLBA and the Federal Financial Institutions Examination Council (“FFIEC”) Cybersecurity Assessment Tool.
We believe our information security team is well positioned to identify risks from cybersecurity threats based on numerous job qualifications and ongoing training. 26 As a regulated financial institution, we have designed our cybersecurity program based on the requirements of the GLBA, the Federal Financial Institutions Examination Council (“FFIEC”) IT Handbook, and the Cyber Risk Institute Profile (“CRI Profile”) Profile assessment.
We have acquired other banking companies and bank offices in the past, and will consider additional acquisitions as opportunities arise. For example, on April 26, 2024, we entered into a merger agreement with Territorial Bancorp Inc.
We have acquired other banking companies and bank offices in the past, and will consider additional acquisitions as opportunities arise. For example, on April 2, 2025, we completed a merger with Territorial Bancorp Inc. See Item 1 “Business-Business Overview” and Note 19 of our Notes to Consolidated Financial Statements for more information about our merger with Territorial Bancorp Inc.
See Item 1 “Business-Business Overview” and Note 24 of our Notes to Consolidated Financial Statements for more information about our pending merger with Territorial Bancorp Inc. If we do not adequately address the financial and operational risks associated with acquisitions of other companies, we may incur material unexpected costs and disruption of our business.
If we do not adequately address the financial and operational risks associated with acquisitions of other companies, we may incur material unexpected costs and disruption of our business. Future acquisitions may increase the degree of such risks.
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Future acquisitions may increase the degree of such risks.
Added
Supreme Court struck down the Presidential Administration’s imposition of the 2025 tariffs imposed in reliance of the International Emergency Economic Powers Act; however, the administration has signaled that it may pursue alternative channels to maintain or increase such tariffs.
Removed
Over time, we may seek to establish offices in other parts of the United States as well.
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As we expand outside our traditional geographic markets, we may encounter additional risks that may adversely affect us .
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The CRI Profile is an Information Security control set based on the National Institute of Standards and Technology Cyber Security Framework (“NIST CSF”) that has been customized for financial institutions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeQuantitative and Qualitative Disclosures about Market Risk 65 Item 8. Financial Statements and Supplementary Data 68 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A. Controls and Procedures 69 Item 9B. Other Information 70
Biggest changeQuantitative and Qualitative Disclosures about Market Risk 69 Item 8. Financial Statements and Supplementary Data 72

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES Our principal executive offices are located at 3200 Wilshire Blvd., Suite 1400, Los Angeles, California 90010. As of December 31, 2024, we operated full-service branches at 41 leased and five owned facilities, and we operated loan production offices at 9 leased facilities. Expiration dates of our leases range from 2025 to 2032.
Biggest changeItem 2. PROPERTIES Our principal executive offices are located at 3200 Wilshire Blvd., Suite 1400, Los Angeles, California 90010. As of December 31, 2025, we operated full-service branches at 83 leased and seven owned facilities, and we operated loan production offices at 9 leased facilities. Expiration dates of our leases range from 2026 to 2037.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS In the normal course of business, we are involved in various legal claims. We have reviewed all legal claims against us with counsel and have taken into consideration the views of such counsel as to the potential outcome of the claims. Loss contingencies for all legal claims totaled approximately $664 thousand at December 31, 2024.
Biggest changeItem 3. LEGAL PROCEEDINGS In the normal course of business, we are involved in various legal claims. We have reviewed all legal claims against us with counsel and have taken into consideration the views of such counsel as to the potential outcome of the claims. Loss contingencies for all legal claims totaled approximately $484 thousand at December 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeASSUMES $100 INVESTED ON DECEMBER 31, 2019 ASSUMES DIVIDENDS REINVESTED FISCAL YEAR ENDING DECEMBER 31, 2024 Period Ending Stock/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Hope Bancorp, Inc. $100.00 $77.98 $109.55 $99.06 $98.96 $105.65 NASDAQ Composite Index $100.00 $144.92 $177.06 $119.45 $172.77 $223.87 KBW Nasdaq Regional Banking Index $100.00 $91.29 $124.74 $116.10 $115.64 $130.90
Biggest changeASSUMES $100 INVESTED ON DECEMBER 31, 2020 ASSUMES DIVIDENDS REINVESTED FISCAL YEAR ENDING DECEMBER 31, 2025 Period Ending Stock/Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Hope Bancorp, Inc. $ 100.00 $ 140.48 $ 127.04 $ 126.91 $ 135.48 $ 127.46 NASDAQ Composite Index $ 100.00 $ 122.18 $ 82.43 $ 119.22 $ 154.48 $ 187.14 KBW Nasdaq Regional Banking Index $ 100.00 $ 136.64 $ 127.17 $ 126.67 $ 143.39 $ 152.71
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NASDAQ Global Select Market under the symbol “HOPE.” The following table sets forth quarterly dividends paid on our common stock for the past two fiscal years: For the Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Dividends Paid $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 The Board expects to continue to pay quarterly cash dividends, however, no assurance can be given as to whether future dividends will be paid as cash dividend payments are dependent on the Company’s future earnings, capital requirements, and financial condition.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NASDAQ Global Select Market under the symbol “HOPE.” The following table sets forth quarterly cash dividends paid on our common stock for the past two fiscal years: For the Three Months Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Dividends Paid $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 The Board expects to continue to pay quarterly cash dividends, however, no assurance can be given as to whether future dividends will be paid as cash dividend payments are dependent on the Company’s future earnings, capital requirements, and financial condition.
The following table summarizes share repurchase activities during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Dollars in thousands) October 1, 2024 to October 31, 2024 — $ — — $ 35,333 November 1, 2024 to November 30, 2024 — — — 35,333 December 1, 2024 to December 31, 2024 — — — 35,333 Total — $ — — Stock Performance Graph The following graph compares the yearly percentage change in the cumulative total shareholder return (stock price appreciation plus reinvested dividends) on our common stock with (i) the cumulative total return of the NASDAQ Composite Index, and (ii) the cumulative total return of the KBW Nasdaq Regional Banking Index.
The following table summarizes share repurchase activities during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Dollars in thousands) October 1, 2025 to October 31, 2025 — $ — — $ 35,333 November 1, 2025 to November 30, 2025 — — — 35,333 December 1, 2025 to December 31, 2025 — — — 35,333 Total — $ — — Stock Performance Graph The following graph compares the yearly percentage change in the cumulative total shareholder return (stock price appreciation plus reinvested dividends) on our common stock with (i) the cumulative total return of the NASDAQ Composite Index, and (ii) the cumulative total return of the KBW Nasdaq Regional Banking Index.
The closing price for our common stock on the NASDAQ Global Select Market on February 19, 2025, was $11.21 per share. As of February 19, 2025, there were 1,098 stockholders of record of our common stock.
The closing price for our common stock on the NASDAQ Global Select Market on February 18, 2026, was $12.10 per share. As of February 18, 2026, there were 1,514 stockholders of record of our common stock.
The Company did not repurchase any shares as part of this program during the three months ended December 31, 2024.
The Company did not repurchase any shares as part of this program during the three months ended December 31, 2025. The Board of Directors reaffirmed this repurchase program in December 2025. As of December 31, 2025, $35.3 million remained available for repurchases under this program.
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Our ability to pay dividends to our stockholders is also subject to the restrictions set forth in the Delaware General Corporation Law and the regulatory authority of the Federal Reserve. Please see “Supervision and Regulation—Dividends and Stock Repurchases” in Item 1 of this Form 10-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs of or For The Year Ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands, except share and per share data) Income Statement Data: Interest income $ 953,980 $ 1,048,878 $ 716,115 $ 566,532 $ 598,878 Interest expense 526,129 523,017 137,694 53,762 131,380 Net interest income 427,851 525,861 578,421 512,770 467,498 Provision (credit) for credit losses 17,280 31,592 9,850 (12,395) 95,660 Net interest income after provision (credit) for credit losses 410,571 494,269 568,571 525,165 371,838 Noninterest income 47,077 45,577 51,397 43,594 53,432 Noninterest expense 324,684 361,959 323,920 293,487 282,979 Income before income tax provision 132,964 177,887 296,048 275,272 142,291 Income tax provision 33,334 44,214 77,771 70,700 30,776 Net income $ 99,630 $ 133,673 $ 218,277 $ 204,572 $ 111,515 Per Common Share Data: Earnings — basic $ 0.83 $ 1.11 $ 1.82 $ 1.67 $ 0.90 Earnings — diluted $ 0.82 $ 1.11 $ 1.81 $ 1.66 $ 0.90 Cash dividends declared $ 0.56 $ 0.56 $ 0.56 $ 0.56 $ 0.56 Book value (period end) $ 17.68 $ 17.66 $ 16.90 $ 17.44 $ 16.66 Number of common shares outstanding (period end) 120,755,658 120,126,786 119,495,209 120,006,452 123,264,864 Balance Sheet Data—At Period End: Total assets $ 17,054,008 $ 19,131,522 $ 19,164,491 $ 17,889,061 $ 17,106,664 Interest earning cash and deposits at other banks 235,541 1,756,154 293,002 44,947 94,014 Investment securities AFS and HTM 2,075,628 2,408,971 2,243,195 2,666,275 2,285,611 Loans receivable, net of unearned loan fees and discounts (excludes loans held for sale) 13,618,272 13,853,619 15,403,540 13,952,743 13,563,213 Deposits 14,327,489 14,753,753 15,738,801 15,040,450 14,333,912 FHLB and FRB borrowings 239,000 1,795,726 865,000 300,000 250,000 Convertible notes, net 444 444 217,148 216,209 204,565 Subordinated debentures 109,140 107,825 106,565 105,354 104,178 Stockholders’ equity 2,134,505 2,121,243 2,019,328 2,092,983 2,053,745 Average Balance Sheet Data: Total assets $ 17,746,408 $ 19,806,163 $ 18,231,609 $ 17,467,665 $ 16,515,102 Interest earning cash and deposits at other banks 856,768 1,685,462 116,689 774,756 921,163 Investment securities AFS and HTM 2,213,068 2,262,840 2,415,621 2,392,589 1,899,948 Loans receivable and loans held for sale 13,634,728 14,732,166 14,634,627 13,343,431 12,698,523 Deposits 14,677,630 15,630,018 15,172,272 14,727,807 13,560,629 FHLB and FRB borrowings 531,869 1,618,292 528,342 208,721 435,836 Stockholders’ equity 2,130,140 2,061,665 2,034,027 2,071,453 2,032,570 31 As of or For The Year Ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Selected Performance Ratios: Return on average assets (1) 0.56 % 0.67 % 1.20 % 1.17 % 0.68 % Return on average stockholders’ equity (2) 4.68 % 6.48 % 10.73 % 9.88 % 5.49 % Dividend payout ratio 68.07 % 50.44 % 30.91 % 33.71 % 62.22 % Net interest margin (3) 2.55 % 2.81 % 3.36 % 3.09 % 3.00 % Yield on interest earning assets (4) 5.69 % 5.60 % 4.16 % 3.42 % 3.84 % Cost of interest bearing liabilities (5) 4.52 % 4.00 % 1.32 % 0.56 % 1.26 % Efficiency ratio (6) 68.36 % 63.34 % 51.43 % 52.75 % 54.32 % Regulatory Capital Ratios: Tangible common equity (“TCE”) ratio 10.05 % 8.86 % 8.29 % 9.31 % 9.50 % Hope Bancorp: Common equity tier 1 13.06 % 12.28 % 10.55 % 11.03 % 10.94 % Tier 1 capital 13.79 % 12.96 % 11.15 % 11.70 % 11.64 % Total capital 14.78 % 13.92 % 11.97 % 12.42 % 12.87 % Tier 1 leverage 11.83 % 10.11 % 10.15 % 10.11 % 10.22 % Bank of Hope: Common equity tier 1 13.61 % 12.75 % 12.03 % 12.96 % 12.90 % Tier 1 capital 13.61 % 12.75 % 12.03 % 12.96 % 12.90 % Total capital 14.61 % 13.71 % 12.85 % 13.68 % 14.14 % Tier 1 leverage 11.68 % 9.94 % 10.94 % 11.20 % 11.33 % Asset Quality Data: Nonaccrual loans (7) $ 90,564 $ 45,204 $ 49,687 $ 54,616 $ 85,238 Accruing delinquent loans past due 90 days or more 229 261 401 2,131 614 Accruing troubled debt restructured loans (8) — — 16,931 52,418 37,354 Total nonperforming loans 90,793 45,465 67,019 109,165 123,206 Other real estate owned — 63 2,418 2,597 20,121 Total nonperforming assets (9) $ 90,793 $ 45,528 $ 69,437 $ 111,762 $ 143,327 Asset Quality Ratios: Nonaccrual loans to loans receivable 0.67 % 0.33 % 0.32 % 0.39 % 0.63 % Nonperforming assets to total assets (9) 0.53 % 0.24 % 0.36 % 0.62 % 0.84 % Allowance for credit losses to loans receivable 1.11 % 1.15 % 1.05 % 1.01 % 1.52 % Allowance for credit losses to nonaccrual loans 166.21 % 351.06 % 326.76 % 257.34 % 242.55 % Net charge-offs (recoveries) to average loans receivable 0.19 % 0.22 % (0.08) % 0.40 % 0.07 % ____________________________________________________ (1) Net income divided by average assets.
Biggest changeAs of or For The Year Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands, except share and per share data) Income Statement Data: Interest income $ 941,164 $ 953,980 $ 1,048,878 $ 716,115 $ 566,532 Interest expense 468,930 526,129 523,017 137,694 53,762 Net interest income 472,234 427,851 525,861 578,421 512,770 Provision (credit) for credit losses 31,802 17,280 31,592 9,850 (12,395) Net interest income after provision (credit) for credit losses 440,432 410,571 494,269 568,571 525,165 Noninterest income 26,468 47,077 45,577 51,397 43,594 Noninterest expense 389,623 324,684 361,959 323,920 293,487 Income before income tax provision 77,277 132,964 177,887 296,048 275,272 Income tax provision 15,689 33,334 44,214 77,771 70,700 Net income $ 61,588 $ 99,630 $ 133,673 $ 218,277 $ 204,572 Net income, excluding notable items (1) $ 113,344 $ 103,380 $ 144,646 $ 218,277 $ 204,572 Per Common Share Data: Earnings — basic $ 0.49 $ 0.83 $ 1.11 $ 1.82 $ 1.67 Earnings — diluted $ 0.49 $ 0.82 $ 1.11 $ 1.81 $ 1.66 Earnings — diluted, excluding notable items (1) $ 0.89 $ 0.85 $ 1.20 $ 1.81 $ 1.66 Cash dividends declared $ 0.56 $ 0.56 $ 0.56 $ 0.56 $ 0.56 Book value (period end) $ 17.81 $ 17.68 $ 17.68 $ 16.90 $ 17.44 Tangible common equity (“TCE”) per share (period end) (1) $ 13.71 $ 13.81 $ 13.76 $ 12.96 $ 13.51 Number of common shares outstanding (period end) 128,201,655 120,755,658 120,126,786 119,495,209 120,006,452 Balance Sheet Data—At Period End: Total assets $ 18,531,626 $ 17,054,008 $ 19,131,522 $ 19,164,491 $ 17,889,061 Interest earning cash and deposits at other banks 350,581 235,541 1,756,154 293,002 44,947 Investment securities AFS and HTM 2,072,864 2,075,628 2,408,971 2,243,195 2,666,275 Loans receivable, net of unearned loan fees and discounts (excludes loans held for sale) 14,701,012 13,618,272 13,853,619 15,403,540 13,952,743 Deposits 15,603,143 14,327,489 14,753,753 15,738,801 15,040,450 FHLB and FRB borrowings 284,922 239,000 1,795,726 865,000 300,000 Convertible notes, net 444 444 444 217,148 216,209 Subordinated debentures 110,518 109,140 109,140 106,565 105,354 Stockholders’ equity 2,283,268 2,134,505 2,121,243 2,019,328 2,092,983 Average Balance Sheet Data: Total assets $ 18,244,370 $ 17,746,408 $ 19,806,163 $ 18,231,609 $ 17,467,665 Interest earning cash and deposits at other banks 563,560 856,768 1,685,462 116,689 774,756 Investment securities AFS and HTM 2,199,219 2,213,068 2,262,840 2,415,621 2,392,589 Loans receivable and loans held for sale 14,267,020 13,634,728 14,732,166 14,634,627 13,343,431 Deposits 15,576,301 14,677,630 15,630,018 15,172,272 14,727,807 FHLB and FRB borrowings 79,945 531,869 1,618,292 528,342 208,721 Stockholders’ equity 2,221,699 2,130,140 2,061,665 2,034,027 2,071,453 31 As of or For The Year Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Selected Performance Ratios: Return on average assets (“ROA”) (2) 0.34 % 0.56 % 0.67 % 1.20 % 1.17 % Return on average stockholders’ equity (“ROE”) (3) 2.77 % 4.68 % 6.48 % 10.73 % 9.88 % Return on average tangible common equity (“ROTCE”) (1) 3.60 % 5.99 % 8.39 % 13.97 % 12.80 % Dividend payout ratio 115.27 % 68.07 % 50.44 % 30.91 % 33.71 % Net interest margin (4) 2.76 % 2.55 % 2.81 % 3.36 % 3.09 % Yield on interest earning assets (5) 5.50 % 5.69 % 5.60 % 4.16 % 3.42 % Cost of interest bearing liabilities (6) 3.81 % 4.52 % 4.00 % 1.32 % 0.56 % Efficiency ratio (7) 78.13 % 68.36 % 63.34 % 51.43 % 52.75 % ROA excluding notable items (1) 0.62 % 0.58 % 0.73 % 1.20 % 1.17 % ROE excluding notable items (1) 5.10 % 4.85 % 7.02 % 10.73 % 9.88 % ROTCE excluding notable items (1) 6.62 % 6.22 % 9.08 % 13.97 % 12.80 % Efficiency ratio excluding notable items (1) (7) 68.60 % 67.18 % 60.62 % 51.43 % 52.75 % Regulatory Capital Ratios: Tangible common equity (“TCE”) ratio (1) 9.76 % 10.05 % 8.86 % 8.29 % 9.31 % Hope Bancorp: (8) Common equity tier 1 12.27 % 13.06 % 12.28 % 10.55 % 11.03 % Tier 1 capital 12.96 % 13.79 % 12.96 % 11.15 % 11.70 % Total capital 13.99 % 14.78 % 13.92 % 11.97 % 12.42 % Tier 1 leverage 11.05 % 11.83 % 10.11 % 10.15 % 10.11 % Bank of Hope: Common equity tier 1 12.82 % 13.61 % 12.75 % 12.03 % 12.96 % Tier 1 capital 12.82 % 13.61 % 12.75 % 12.03 % 12.96 % Total capital 13.85 % 14.61 % 13.71 % 12.85 % 13.68 % Tier 1 leverage 10.93 % 11.68 % 9.94 % 10.94 % 11.20 % 32 As of or For The Year Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Asset Quality Data: Nonaccrual loans (9) $ 131,747 $ 90,564 $ 45,204 $ 49,687 $ 54,616 Accruing delinquent loans past due 90 days or more 3,943 229 261 401 2,131 Accruing troubled debt restructured loans (10) — — — 16,931 52,418 Total nonperforming loans 135,690 90,793 45,465 67,019 109,165 Other real estate owned 365 — 63 2,418 2,597 Total nonperforming assets (11) $ 136,055 $ 90,793 $ 45,528 $ 69,437 $ 111,762 Asset Quality Ratios: Nonaccrual loans to loans receivable 0.90 % 0.67 % 0.33 % 0.32 % 0.39 % Nonperforming assets to total assets (11) 0.73 % 0.53 % 0.24 % 0.36 % 0.62 % Allowance for credit losses to loans receivable 1.07 % 1.11 % 1.15 % 1.05 % 1.01 % Allowance for credit losses to nonaccrual loans 118.91 % 166.21 % 351.06 % 326.76 % 257.34 % Net charge-offs (recoveries) to average loans receivable 0.20 % 0.13 % 0.22 % (0.08) % 0.40 % ______________________________ (1) Net income excluding notable items, earnings per common share - diluted excluding notable items, TCE per share, ROTCE, ROA excluding notable items, ROE excluding notable items, ROTCE excluding notable items, efficiency ratio excluding notable items, and TCE ratio are non-GAAP financial measures that we believe provide investors with information useful in understanding our operating results and financial condition.
Once the quantitative filters have been triggered, the securities are placed on a watch list and an additional assessment is performed to identify whether a credit impairment exists.
Once the quantitative filters have been triggered, the securities are placed on a watch list and an additional assessment is performed to identify whether credit impairment exists.
Subordinated Debentures The subordinated debentures bear interest at the 3-month Chicago Mercantile Exchange term Secured Financing Overnight Rate (“SOFR”) rate, plus a designated spread. Prior to LIBOR cessation at June 2023, the interest rate was tied to the 3-month LIBOR rate, plus a designated spread.
The subordinated debentures bear interest at the 3-month Chicago Mercantile Exchange term Secured Financing Overnight Rate (“SOFR”) rate, plus a designated spread. Prior to LIBOR cessation at June 2023, the interest rate was tied to the 3-month LIBOR rate, plus a designated spread.
Salaries and employee benefits expense decreased by $30.0 million, or 14.4%, for 2024 compared with 2023. The year-over-year decrease in salaries and employee was due to lower average number of employees for the years ended 2024 compared to 2023.
Salaries and employee benefits expense decreased by $30.0 million, or 14.4%, for 2024 compared with 2023. The year-over-year decrease in salaries and employee benefits was due to lower average number of employees for the years ended 2024 compared to 2023.
This additional amount was paid in two additional quarterly installments, at a rate of approximately 9.4 basis points per year on the same adjusted assessment base. The decrease in FDIC assessments expense for the year ended December 31, 2024, compared with the same period in 2023, was due primarily to lower average consolidated total assets and a lower assessment base.
This additional amount was paid in two additional quarterly installments, at a rate of approximately 9.4 basis points per year on the same adjusted assessment base. The decrease in FDIC assessments expense for the year ended December 31, 2024, compared with the same period in 2023, was primarily due to lower average consolidated total assets and a lower assessment base.
The expanding interest earning asset yields and higher deposit costs reflected changes in market interest rates during the period. The upper range of the target federal funds rate decreased to 4.50% at December 31, 2024, down from 5.50% at December 31, 2023, but the cuts to the federal funds rate did not begin until September 18, 2024.
The expanding interest earning asset yields and higher deposit costs reflected changes in market interest rates during the period. The upper range of the target federal funds rate decreased to 4.50% at December 31, 2024, down from 5.50% at December 31, 2023, but the cuts to the federal funds rate did not begin until September 2024.
In the first quarter of 2023, a staffing rationalization reduced our headcount by 5%. Professional fees increased by $2.5 million, or 39%, for 2024 compared with 2023. The year-over-year increase in professional fees was due overall increase in legal fees and other professional services. 43 FDIC assessments expense decreased by $2.5 million, or 18.7%, for 2024 compared with 2023.
In the first quarter of 2023, a staffing rationalization reduced our headcount by 5%. Professional fees increased by $2.5 million, or 39%, for 2024 compared with 2023. The year-over-year increase in professional fees was due overall increase in legal fees and other professional services. FDIC assessments expense decreased by $2.5 million, or 18.7%, for 2024 compared with 2023.
If actual losses and conditions differ materially from the assumptions used to determine the allowance for credit losses, our actual credit losses could differ materially from management’s estimates. Moody’s consensus forecast assumes that the probability that the economy will perform better than the consensus estimates is equal to the probability that it will perform worse.
If actual losses and conditions differ materially from the assumptions used to determine the allowance for credit losses, our actual credit losses could differ materially from management’s estimates. 37 Moody’s consensus forecast assumes that the probability that the economy will perform better than the consensus estimates is equal to the probability that it will perform worse.
During the year ended December 31, 2023, we repurchased notes in the aggregate principal amount of $19.9 million and recorded a gain on debt extinguishment of $405 thousand. The repurchased notes were immediately cancelled subsequent to repurchase.
During the year ended December 31, 2023, we repurchased our notes in the aggregate principal amount of $19.9 million and recorded a gain on debt extinguishment of $405 thousand. The repurchased notes were immediately cancelled subsequent to repurchase.
On May 15, 2023, most holders of our convertible notes exercised their right to put their notes and therefore we paid off $197.1 million of convertible note principal in cash. There were no repurchases or put options exercised for the years ended December 31, 2024 and 2022.
On May 15, 2023, most holders of our convertible notes exercised their right to put their notes and therefore we paid off $197.1 million of convertible note principal in cash. There were no repurchases or put options exercised for the years ended December 31, 2025 and 2024.
C&I loans also include loans, mostly leveraged and non-leveraged loans, which represent revolving or term loans that are mostly member deals for middle market companies. Business term loans are generally provided to finance business acquisitions, working capital, and/or equipment purchases and are times done through participating in syndicated facilities.
C&I loans also include loans, mostly leveraged and non-leveraged loans, which represent revolving or term loans that are mostly deals for middle market companies. Business term loans are generally provided to finance business acquisitions, working capital, and/or equipment purchases and are at times done through participating in syndicated facilities.
These key inputs are utilized in our models to develop probability of default (“PD”) and loss given default (“LGD”) assumptions used in the calculation of estimated quantitative losses. The key macroeconomic variables were derived from Moody’s consensus scenario as of December 31, 2024 and 2023.
These key inputs are utilized in our models to develop probability of default (“PD”) and loss given default (“LGD”) assumptions used in the calculation of estimated quantitative losses. The key macroeconomic variables were derived from Moody’s consensus scenario as of December 31, 2025 and 2024.
Equity investments without readily determinable fair values are carried at cost, less impairment, and adjustments are made to the carrying balance based on observable price changes. There were no impairments or observable price changes for these investments during the year ended December 31, 2024.
Equity investments without readily determinable fair values are carried at cost, less impairment, and adjustments are made to the carrying balance based on observable price changes. There were no impairments or observable price changes for these investments during the year ended December 31, 2025.
Investment Securities Description - We evaluate investment securities AFS and HTM for impairment related to credit losses on at least a quarterly basis. Based on our evaluation, we do not believe that we had any investment securities AFS or HTM with a credit loss impairment as of December 31, 2024.
Investment Securities Description - We evaluate investment securities AFS and HTM for impairment related to credit losses on at least a quarterly basis. Based on our evaluation, we do not believe that we had any investment securities AFS or HTM with a credit loss impairment as of December 31, 2025.
(2) The Company adopted ASU 2022-02 on January 1, 2023, which eliminated the concept of TDR loans from GAAP. Prior to January 1, 2023, nonperforming loans included accruing TDR loans. Maturity of Loans The following table illustrates the maturity distribution intervals of loans outstanding at December 31, 2024.
(2) The Company adopted ASU 2022-02 on January 1, 2023, which eliminated the concept of TDR loans from GAAP. Prior to January 1, 2023, nonperforming loans included accruing TDR loans. Maturity of Loans The following table illustrates the maturity distribution intervals of loans outstanding at December 31, 2025.
At December 31, 2024 and 2023, all of our CMOs and MBS were issued by the Government National Mortgage Association (“GNMA”), Fannie Mae (“FNMA”), or Freddie Mac (“FHLMC”), which guarantee the contractual cash flows of these investments.
At December 31, 2025 and 2024, all of our CMOs and MBS were issued by the Government National Mortgage Association (“GNMA”), Fannie Mae (“FNMA”), or Freddie Mac (“FHLMC”), which guarantee the contractual cash flows of these investments.
Funded commitments are presented as investments in affordable housing partnerships in the Consolidated Financial Statements while unfunded commitments are presented as commitments to fund investment in affordable housing partnerships. The following table summarizes our contractual obligations and commitments to make future payments at December 31, 2024.
Funded commitments are presented as investments in affordable housing partnerships in the Consolidated Financial Statements while unfunded commitments are presented as commitments to fund investment in affordable housing partnerships. The following table summarizes our contractual obligations and commitments to make future payments at December 31, 2025.
Our capital ratios at December 31, 2024 and 2023, exceeded all of the regulatory minimums including the fully-phased in capital conservation buffer. Liquidity Management Liquidity risk is the risk of reduction in our earnings or capital that could result if we were not able to meet our obligations when they come due without incurring unacceptable losses.
Our capital ratios at December 31, 2025 and 2024, exceeded all of the regulatory minimums including the fully-phased in capital conservation buffer. 66 Liquidity Management Liquidity risk is the risk of reduction in our earnings or capital that could result if we were not able to meet our obligations when they come due without incurring unacceptable losses.
Further information regarding risks from our off-balance-sheet financial instruments can be found in Note 14 of the Notes to Consolidated Financial Statements and in Item 7A. - “Quantitative and Qualitative Disclosures about Market Risk.” 63 We also commit to fund certain affordable housing partnership investments in the future.
Further information regarding risks from our off-balance-sheet financial instruments can be found in Note 1 1 of the Notes to Consolidated Financial Statements and in Item 7A. - “Quantitative and Qualitative Disclosures about Market Risk.” We also commit to fund certain affordable housing partnership investments in the future.
The investment securities HTM as of December 31, 2024, were all issued by the U.S. government or government-sponsored enterprises and therefore the Company applied a zero credit loss assumption.
The investment securities HTM as of December 31, 2025, were all issued by the U.S. government or government-sponsored enterprises and therefore the Company applied a zero credit loss assumption.
December 31, 2024 Less than 12 months 12 months or longer Total Description of Securities AFS Number of Securities Fair Value Gross Unrealized Losses Number of Securities Fair Value Gross Unrealized Losses Number of Securities Fair Value Gross Unrealized Losses (Dollars in thousands) U.S. Government agency and U.S.
December 31, 2025 Less than 12 months 12 months or longer Total Description of Securities AFS Number of Securities Fair Value Gross Unrealized Losses Number of Securities Fair Value Gross Unrealized Losses Number of Securities Fair Value Gross Unrealized Losses (Dollars in thousands) U.S. Government agency and U.S.
If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. • Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any.
If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. • Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any.
Federal Funds Purchased Federal funds purchased generally mature within one to three business days from the transaction date. We did not have any federal funds purchased at December 31, 2024 and 2023.
Federal Funds Purchased Federal funds purchased generally mature within one to three business days from the transaction date. We did not have any federal funds purchased at December 31, 2025 and 2024.
Holders of the notes can put the notes for cash on the fifth, tenth, and fifteenth year of the notes. The net carrying balance of convertible notes at December 31, 2024 and 2023 was $444 thousand.
Holders of the notes can put the notes for cash on the fifth, tenth, and fifteenth year of the notes. The net carrying balance of convertible notes at December 31, 2025 and 2024 was $444 thousand.
At December 31, 2024, our lending limit was approximately $354.5 million per borrower for unsecured loans. For lending limit purposes, a secured loan is defined as a loan secured by collateral having a current fair value of at least 100% of the amount of the loan or extension of credit at all times and satisfying certain other requirements.
At December 31, 2025, our lending limit was approximately $378.5 million per borrower for unsecured loans. For lending limit purposes, a secured loan is defined as a loan secured by collateral having a current fair value of at least 100% of the amount of the loan or extension of credit at all times and satisfying certain other requirements.
As part of our asset-liability management, we utilize FHLB and FRB borrowings to supplement our deposit source of funds. Therefore, there may be fluctuations in these balances depending on the short-term liquidity and longer-term financing needs of the Bank. Average FHLB and FRB borrowings were $531.9 million for 2024, compared with $1.62 billion in 2023, and $528.3 million in 2022.
As part of our asset-liability management, we utilize FHLB and FRB borrowings to supplement our deposit source of funds. Therefore, there may be fluctuations in these balances depending on the short-term liquidity and longer-term financing needs of the Bank. Average FHLB and FRB borrowings were $79.9 million for 2025, compared with $531.9 million in 2024, and $1.62 billion in 2023.
There were no changes in our balance of subordinated debentures during 2024 or 2023 aside from the increases related to the discount accretion on subordinated debentures acquired from previous acquisitions. Interest expense on subordinated debentures was $10.8 million for 2024 compared with $10.5 million for 2023, and $6.0 million for 2022.
There were no changes in our balance of subordinated debentures during 2025 or 2024, aside from the increases related to the discount accretion on subordinated debentures acquired from previous acquisitions. Interest expense on subordinated debentures was $9.6 million for 2025 compared with $10.8 million for 2024, and $10.5 million for 2023.
In addition to unsecured loans, we are permitted to make such collateral-secured loans in an additional amount up to 10% (for a total of 25%) of our total capital and the allowance for credit losses for a total limit of approximately $590.8 million to one borrower at December 31, 2024.
In addition to unsecured loans, we are permitted to make such collateral-secured loans in an additional amount up to 10% (for a total of 25%) of our total capital and the allowance for credit losses for a total limit of approximately $630.8 million to one borrower at December 31, 2025.
Any loan or portion of a loan judged by management to be uncollectible is charged against the allowance for credit losses, while any recoveries are credited to the allowance. The allowance for credit losses (“ACL”) was $150.5 million at December 31, 2024, compared with allowance for credit losses of $158.7 million at December 31, 2023.
Any loan or portion of a loan judged by management to be uncollectible is charged against the allowance for credit losses, while any recoveries are credited to the allowance. The allowance for credit losses (“ACL”) was $156.7 million at December 31, 2025, compared with $150.5 million at December 31, 2024.
The net increase in individually evaluated loans was due to the increase in nonaccrual loans and loans downgraded to substandard risk rating in 2024. 57 We maintain a separate ACL for our off-balance sheet unfunded loan commitments. We utilize a funding rate to allocate the allowance to undrawn exposures.
The net increase in individually evaluated loans was due to the increase in nonaccrual loans and loans downgraded to substandard risk rating in 2025. 61 We maintain a separate ACL for our off-balance sheet unfunded loan commitments. We utilize a funding rate to allocate the allowance to undrawn exposures.
OREO OREO consists of real estate properties acquired through foreclosure or similar means. OREO is recorded at fair value, less estimated selling costs. At December 31, 2024 and 2023, OREO, net, totaled $0 and $63 thousand, respectively. The number of OREO properties held at December 31, 2024 and 2023, was zero and one, respectively.
OREO OREO consists of real estate properties acquired through foreclosure or similar means. OREO is recorded at fair value, less estimated selling costs. At December 31, 2025 and 2024, OREO, net, totaled $365 thousand and $0, respectively. The number of OREO properties held at December 31, 2025 and 2024, was one and zero, respectively.
Tangible common equity per share was $13.81 at December 31, 2024, compared with $13.76 at December 31, 2023. Tangible common equity to tangible assets and tangible common equity per share are non-GAAP financial measures that we believe provide investors with information that is useful in understanding our financial performance and position.
Tangible common equity per share was $13.71 at December 31, 2025, compared with $13.81 at December 31, 2024. Tangible common equity to tangible assets and tangible common equity per share are non-GAAP financial measures that we believe provide investors with information that is useful in understanding our financial performance and position.
The decrease in net income for 2024 compared with 2023 was primarily due to decreases in net interest income, offset partially by decreases in provision for credit losses and noninterest expense. The decrease in net income for 2023 compared with 2022 was primarily due to increases in interest expense, provision for credit losses and noninterest expense.
The decrease in net income for 2024 compared with 2023 was primarily due to a decrease in net interest income, offset partially by decreases in provision for credit losses and noninterest expense.
These funding sources are augmented by payments of principal and interest on loans, proceeds from sale of loans, pay down of investment securities, and the liquidation or sale of securities from our AFS portfolio.
These funding sources are augmented by payments of principal and interest on loans, proceeds from sale of loans, paydown of investment securities, and the liquidation or sale of securities from our AFS portfolio.
At December 31, 2024, we had $43.0 million in loan accrued interest receivable compared with $49.3 million at December 31, 2023. Allowance for Credit Losses The Bank has implemented a multi-faceted process to identify, manage, and mitigate the credit risks that are inherent in the loan portfolio.
At December 31, 2025, we had $43.5 million in loan accrued interest receivable compared with $43.0 million at December 31, 2024. Allowance for Credit Losses The Bank has implemented a multi-faceted process to identify, manage, and mitigate the credit risks that are inherent in the loan portfolio.
Primary uses of funds include withdrawal of and interest payments on deposits, originations of loans, purchases of investment securities, payment of operating expenses, share repurchases, and payment of dividends. 62 Net cash inflows from operating activities totaled $116.7 million, $473.8 million, and $485.5 million during 2024, 2023, and 2022, respectively.
Primary uses of funds include withdrawal of and interest payments on deposits, originations of loans, purchases of investment securities, payment of operating expenses, share repurchases, and payment of dividends. Net cash inflows from operating activities totaled $164.5 million, $116.7 million, and $473.8 million during 2025, 2024, and 2023, respectively.
Included in the quantitative portion of our analysis of the allowance for credit losses are key inputs including borrowers’ net operating income, debt coverage ratios, and real estate collateral values, as well as key inputs that are more subjective or require management’s judgment including key macroeconomic variables from Moody’s forecast scenarios including GDP, unemployment rates, interest rates, and commercial real estate prices.
The allowance for credit losses is determined utilizing quantitative and qualitative loss factors. 36 Included in the quantitative portion of our analysis of the allowance for credit losses are key inputs including borrowers’ net operating income, debt coverage ratios, and real estate collateral values, as well as key inputs that are more subjective or require management’s judgment including key macroeconomic variables from Moody’s forecast scenarios including GDP, unemployment rates, interest rates, and commercial real estate prices.
During the year ended December 31, 2024, we sold $275.3 million of investment securities AFS and recorded $936 thousand in net gains on sales of investment securities AFS. There were no investment securities AFS sold during 2023.
During the year ended December 31, 2024, we sold $276.3 million in fair value of investment securities AFS and recorded $936 thousand in net gains on sales of investment securities AFS. There were no investment securities AFS sold during 2023.
At December 31, 2024, total uninsured deposits of the Bank reported by the Bank was approximately $5.56 billion, or 39% of the Bank’s deposits, which represents the estimated portion of deposit accounts that exceed the FDIC insurance limit. This estimate was determined based on the same methodologies and assumptions used for regulatory reporting requirements.
At December 31, 2025, total uninsured deposits of the Bank reported by the Bank was approximately $5.98 billion, or 38% of the Bank’s deposits, which represents the estimated portion of deposit accounts that exceed the FDIC insurance limit. This estimate was determined based on the same methodologies and assumptions used for regulatory reporting requirements.
The majority of our investment portfolio consisted of securities issued by U.S. Government agencies or U.S. Government sponsored enterprises, which were determined to have a zero loss expectation. At December 31, 2024, we also had one asset-backed security, six corporate securities, and 57 municipal bonds not issued by U.S. Government agencies or U.S.
The majority of our investment portfolio consisted of securities issued by U.S. Government agencies or U.S. Government sponsored enterprises, which were determined to have a zero loss expectation. At December 31, 2025, we also had one asset-backed security, five corporate securities, and 28 municipal bonds not issued by U.S. Government agencies or U.S.
OREO consists of real estate acquired by the Bank through foreclosure or similar means, including by deed from the owner in lieu of foreclosure, and is held for future sale. Nonperforming assets were $90.8 million at December 31, 2024, compared with $45.5 million at December 31, 2023.
OREO consists of real estate acquired by the Bank through foreclosure or similar means, including by deed from the owner in lieu of foreclosure, and is held for future sale. Nonperforming assets were $136.1 million at December 31, 2025, compared with $90.8 million at December 31, 2024.
Changes to the fair value of equity investments with readily determinable fair values are recorded in other noninterest income. Equity investments without readily determinable fair values at December 31, 2024, included $34.2 million in CRA investments, $1.0 million in Community Development Financial Institutions investments, and $370 thousand in correspondent bank stock.
Changes to the fair value of equity investments with readily determinable fair values are recorded in other noninterest income. Equity investments without readily determinable fair values at December 31, 2025, included $36.6 million in CRA investments, $1.0 million in Community Development Financial Institutions investments, and $370 thousand in correspondent bank stock.
CRE loans secured by non-consumer residential real estate comprise less than 1% of the total loan portfolio (consumer residential mortgage loans are classified separately and included in residential mortgage loans). Construction loans are also a small portion of the total real estate portfolio, totaling $191.2 million and comprising 1% of total loans outstanding as of December 31, 2024.
CRE loans secured by non-consumer residential real estate comprise less than 1% of the total loan portfolio (consumer residential mortgage loans are classified separately and included in residential mortgage loans). Construction loans are also a small portion of the total real estate portfolio, totaling $123.9 million and comprising 1% of total loans outstanding as of December 31, 2025.
Moody's consensus projected key macroeconomic variable inputs as of December 31, 2023: Year Ending December 31, 2024 2025 2026 GDP Growth* 0.7% 2.2% 1.9% Unemployment Rate 4.4% 4.1% 4.0% CRE Price Index Growth* (6.4)% 6.9% 8.5% 10 Year Treasury Rate 4.2% 4.0% 4.0% __________________________________ * Represents year over year growth rates.
Moody's consensus projected key macroeconomic variable inputs as of December 31, 2025: Year Ending December 31, 2026 2027 2028 GDP Growth* 1.9% 2.0% 2.0% Unemployment Rate 4.4% 4.3% 4.1% CRE Price Index Growth* (0.3)% 2.8% 5.6% 10 Year Treasury Rate 4.2% 4.2% 4.1% __________________________________ * Represents year over year growth rates.
Incorporating key macroeconomic inputs from Moody’s S2 projected scenario in our calculation of the allowance for credit losses resulted in additional allowance for credit losses of approximately $28.5 million compared with the results using the Moody’s consensus forecast as of December 31, 2024.
Incorporating key macroeconomic inputs from Moody’s S2 projected scenario in our calculation of the allowance for credit losses resulted in additional allowance for credit losses of approximately $30.4 million compared with the results using the Moody’s consensus forecast as of December 31, 2025.
The net charge offs for 2024 consisted of smaller loan charge offs from downgraded loans combined with charge offs related to the sale of problem loans. 54 The following table presents total nonaccrual and delinquent loans (loans past due 30+ days) at the dates indicated: December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) CRE loans $ 26,601 $ 36,092 $ 38,030 $ 60,203 $ 83,617 C&I loans 62,224 6,640 9,146 15,576 17,304 Residential mortgage loans 15,186 6,173 11,101 20,188 11,690 Consumer and other loans 627 682 1,103 848 1,414 Total nonaccrual and delinquent loans $ 104,638 $ 49,587 $ 59,380 $ 96,815 $ 114,025 Nonaccrual loans included above $ 90,564 $ 45,204 $ 49,687 $ 54,616 $ 85,238 We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt including but not limited to current financial information, historical payment experience, credit documentation, public information, and current economic trends.
The net charge offs for 2024 consisted of smaller loan charge offs from downgraded loans combined with charge offs related to the sale of problem loans. 58 The following table presents total nonaccrual and delinquent loans (loans past due 30+ days) at the dates indicated: December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) CRE loans $ 78,964 $ 26,601 $ 36,092 $ 38,030 $ 60,203 C&I loans 55,345 62,224 6,640 9,146 15,576 Residential mortgage loans 22,869 15,186 6,173 11,101 20,188 Consumer and other loans 1,812 627 682 1,103 848 Total nonaccrual and delinquent loans $ 158,990 $ 104,638 $ 49,587 $ 59,380 $ 96,815 Nonaccrual loans included above $ 131,747 $ 90,564 $ 45,204 $ 49,687 $ 54,616 We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt including but not limited to current financial information, historical payment experience, credit documentation, public information, and current economic trends.
If the fair value of the collateral is less than the amortized balance of the loan, we recognize an ACL with a corresponding charge to the provision for credit losses. Individually evaluated loans at December 31, 2024, were $90.4 million, a net increase of $45.2 million from $45.2 million at December 31, 2023.
If the fair value of the collateral is less than the amortized balance of the loan, we recognize an ACL with a corresponding charge to the provision for credit losses. Individually evaluated loans at December 31, 2025, were $131.7 million, a net increase of $41.3 million from $90.4 million at December 31, 2024.
The allowance for credit losses is discussed in more detail under “Financial Condition - Allowance for Credit Losses.” Subjective Estimates and Judgments - We determine the adequacy of the allowance for credit losses by analyzing and estimating lifetime expected credit losses in the loan portfolio. The allowance for credit losses is determined utilizing quantitative and qualitative loss factors.
The allowance for credit losses is discussed in more detail under “Financial Condition - Allowance for Credit Losses.” Subjective Estimates and Judgments - We determine the adequacy of the allowance for credit losses by analyzing and estimating lifetime expected credit losses in the loan portfolio.
Other income and fees decreased for 2024 compared with 2023, primarily due to a $5.8 million gain from a cash distribution from an investment in an affordable housing partnership, which was recorded in 2023. There were no gains from cash distributions for investments in affordable housing partnerships in 2024.
Other income and fees decreased for 2024 compared with 2023, primarily due to a $5.8 million gain from a cash distribution from an investment in an affordable housing partnership, which was recorded in 2023.
The following table shows our loan commitments and letters of credit outstanding at the dates indicated: December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Unfunded commitments to extend credit $ 2,255,785 $ 2,274,239 $ 2,856,263 $ 2,329,421 $ 2,137,178 Standby letters of credit 134,548 132,132 132,538 126,137 108,834 Other letters of credit 22,874 51,983 22,376 56,333 40,508 Total $ 2,413,207 $ 2,458,354 $ 3,011,177 $ 2,511,891 $ 2,286,520 52 Nonperforming Assets Nonperforming assets consist of nonaccrual loans, accruing loans that are 90 days or more past due, accruing restructured loans, and OREO.
The following table shows our loan commitments and letters of credit outstanding at the dates indicated: December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Unfunded commitments to extend credit $ 2,200,436 $ 2,255,785 $ 2,274,239 $ 2,856,263 $ 2,329,421 Standby letters of credit 154,067 134,548 132,132 132,538 126,137 Other letters of credit 18,848 22,874 51,983 22,376 56,333 Total $ 2,373,351 $ 2,413,207 $ 2,458,354 $ 3,011,177 $ 2,511,891 56 Nonperforming Assets Nonperforming assets consist of nonaccrual loans, accruing loans that are 90 days or more past due, accruing restructured loans, and OREO.
If we are not able to realize all or part of our net deferred tax asset in the future or if a tax position is overturned by a taxing authority, an adjustment to the deferred tax asset valuation allowance would be charged to income tax expense in the period such determination was made which could have a material impact on our earnings. 36 Results of Operations Operations Summary Our most significant source of income is net interest income, which is the difference between our interest income and our interest expense.
If we are not able to realize all or part of our net deferred tax asset in the future or if a tax position is overturned by a taxing authority, an adjustment to the deferred tax asset valuation allowance would be charged to income tax expense in the period such determination was made which could have a material impact on our earnings.
The following table summarizes our outstanding Debentures related to the Trust Preferred Securities at December 31, 2024: Trust Name Issuance Date Amount Carry Value of Subordinated Debentures Maturity Date Coupon Rate Current Rate Interest Distribution and Callable Date (Dollars in thousands) Nara Capital Trust III 06/05/2003 $ 5,000 $ 5,155 06/15/2033 3M SOFR + 3.41% 7.77% Every 15 th of Mar, Jun, Sep, and Dec Nara Statutory Trust IV 12/22/2003 5,000 5,155 01/07/2034 3M SOFR + 3.11% 7.77% Every 7 th of Jan, Apr, Jul, and Oct Nara Statutory Trust V 12/17/2003 10,000 10,310 12/17/2033 3M SOFR + 3.21% 7.56% Every 17 th of Mar, Jun, Sep, and Dec Nara Statutory Trust VI 03/22/2007 8,000 8,248 06/15/2037 3M SOFR +1.91% 6.27% Every 15 th of Mar, Jun, Sep, and Dec Center Capital Trust I 12/30/2003 18,000 15,473 01/07/2034 3M SOFR + 3.11% 7.77% Every 7 th of Jan, Apr, Jul, and Oct Wilshire Statutory Trust II 03/17/2005 20,000 16,937 03/17/2035 3M SOFR + 2.05% 6.40% Every 17 th of Mar, Jun, Sep, and Dec Wilshire Statutory Trust III 09/15/2005 15,000 12,148 09/15/2035 3M SOFR + 1.66% 6.02% Every 15 th of Mar, Jun, Sep, and Dec Wilshire Statutory Trust IV 07/10/2007 25,000 19,570 09/15/2037 3M SOFR + 1.64% 6.00% Every 15 th of Mar, Jun, Sep, and Dec Saehan Capital Trust I 03/30/2007 20,000 16,144 06/30/2037 3M SOFR + 1.88% 6.21% Every 30 th of Mar, Jun, Sep, and Dec Total Trusts $ 126,000 $ 109,140 60 Capital Resources Historically, our primary source of capital has been the retention of earnings, net of interest payments on debentures and convertible notes and dividend payments to stockholders and share repurchases.
The following table summarizes our outstanding Debentures related to the Trust Preferred Securities at December 31, 2025: Trust Name Issuance Date Amount Carry Value of Subordinated Debentures Maturity Date Coupon Rate Current Rate Interest Distribution and Callable Date (Dollars in thousands) Nara Capital Trust III 06/05/2003 $ 5,000 $ 5,155 06/15/2033 3M SOFR + 3.41% 7.13% Every 15 th of Mar, Jun, Sep, and Dec Nara Statutory Trust IV 12/22/2003 5,000 5,155 01/07/2034 3M SOFR + 3.11% 7.02% Every 7 th of Jan, Apr, Jul, and Oct Nara Statutory Trust V 12/17/2003 10,000 10,310 12/17/2033 3M SOFR + 3.21% 6.92% Every 17 th of Mar, Jun, Sep, and Dec Nara Statutory Trust VI 03/22/2007 8,000 8,248 06/15/2037 3M SOFR +1.91% 5.63% Every 15 th of Mar, Jun, Sep, and Dec Center Capital Trust I 12/30/2003 18,000 15,762 01/07/2034 3M SOFR + 3.11% 7.02% Every 7 th of Jan, Apr, Jul, and Oct Wilshire Statutory Trust II 03/17/2005 20,000 17,207 03/17/2035 3M SOFR + 2.05% 5.76% Every 17 th of Mar, Jun, Sep, and Dec Wilshire Statutory Trust III 09/15/2005 15,000 12,376 09/15/2035 3M SOFR + 1.66% 5.38% Every 15 th of Mar, Jun, Sep, and Dec Wilshire Statutory Trust IV 07/10/2007 25,000 19,909 09/15/2037 3M SOFR + 1.64% 5.36% Every 15 th of Mar, Jun, Sep, and Dec Saehan Capital Trust I 03/30/2007 20,000 16,396 06/30/2037 3M SOFR + 1.88% 5.57% Every 30 th of Mar, Jun, Sep, and Dec Total Trusts $ 126,000 $ 110,518 65 Capital Resources Historically, our primary source of capital has been the retention of earnings, net of interest payments on debentures and convertible notes and dividend payments to stockholders and share repurchases.
The largest aggregate amount of loans that the Bank had outstanding to any one borrower and related entities was $107.0 million, of which the entire amount was performing and in good standing at December 31, 2024. 50 The following table shows the composition of our loan portfolio by type of loan on the dates indicated: December 31, 2024 2023 2022 2021 2020 Amount % Amount % Amount % Amount % Amount % (Dollars in thousands) Loan portfolio composition: CRE loans $ 8,527,008 63 % $ 8,797,884 64 % $ 9,414,580 61 % $ 9,105,931 65 % $ 8,772,134 65 % C&I loans 3,967,596 29 % 4,135,044 30 % 5,109,532 33 % 4,208,674 30 % 4,157,787 31 % Residential mortgage loans 1,082,459 8 % 883,687 6 % 846,080 6 % 579,626 5 % 582,232 4 % Consumer and other loans 41,209 — % 37,004 — % 33,348 — % 58,512 — % 51,060 — % Total loans outstanding 13,618,272 100 % 13,853,619 100 % 15,403,540 100 % 13,952,743 100 % 13,563,213 100 % Less: allowance for credit losses (150,527) (158,694) (162,359) (140,550) (206,741) Loans receivable, net $ 13,467,745 $ 13,694,925 $ 15,241,181 $ 13,812,193 $ 13,356,472 Commercial Real Estate Loans Our CRE loans consist primarily of loans secured by deeds of trust on commercial real estate, including SBA loans secured by commercial real estate.
The largest aggregate amount of loans that the Bank had outstanding to any one borrower and related entities was $107.9 million, of which the entire amount was performing and in good standing at December 31, 2025. 54 The following table shows the composition of our loan portfolio by type of loan on the dates indicated: December 31, 2025 2024 2023 2022 2021 Amount % Amount % Amount % Amount % Amount % (Dollars in thousands) Loan portfolio composition: CRE loans $ 8,494,508 58 % $ 8,527,008 63 % $ 8,797,884 64 % $ 9,414,580 61 % $ 9,105,931 65 % C&I loans 3,711,875 25 % 3,967,596 29 % 4,135,044 30 % 5,109,532 33 % 4,208,674 30 % Residential mortgage loans 2,440,456 17 % 1,082,459 8 % 883,687 6 % 846,080 6 % 579,626 5 % Consumer and other loans 54,173 — % 41,209 — % 37,004 — % 33,348 — % 58,512 — % Total loans outstanding 14,701,012 100 % 13,618,272 100 % 13,853,619 100 % 15,403,540 100 % 13,952,743 100 % Less: allowance for credit losses (156,661) (150,527) (158,694) (162,359) (140,550) Loans receivable, net $ 14,544,351 $ 13,467,745 $ 13,694,925 $ 15,241,181 $ 13,812,193 Commercial Real Estate Loans Our CRE loans consist primarily of loans secured by deeds of trust on commercial real estate, including SBA loans secured by commercial real estate.
We amortize the initial cost of the investments in affordable housing partnerships. This amortization expense is more than offset by both tax credits received, which reduce our tax provision expense dollar for dollar, and the tax benefits related to any tax losses generated through the affordable housing project’s expenditures.
This amortization expense is more than offset by both tax credits received, which reduce our tax provision expense dollar for dollar, and the tax benefits related to any tax losses generated through the affordable housing project’s expenditures.
In 2022, we sold $77.0 million in loans with elevated credit risk comprising $76.6 million in classified loans and $400 thousand in special mention loans. 55 The following table shows the provision for credit losses, the amount of loans charged off, and recoveries on loans previously charged off together with the balance in the allowance for credit losses at the beginning and end of each year, the amount of average and total loans outstanding, as well as other pertinent ratios at the dates and for the years indicated: At or For The Year Ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) LOANS: Average loans: CRE loans $ 8,672,549 $ 9,172,818 $ 9,371,641 $ 8,877,324 $ 8,693,105 C&I loans 3,919,592 4,636,083 4,468,498 3,871,726 3,226,423 Residential mortgage loans 1,005,803 889,488 752,020 552,999 729,432 Consumer and other loans 36,784 33,777 42,468 41,382 49,563 Average loans, including loans held for sale $ 13,634,728 $ 14,732,166 $ 14,634,627 $ 13,343,431 $ 12,698,523 Total loans, excluding loans held for sale $ 13,618,272 $ 13,853,619 $ 15,403,540 $ 13,952,743 $ 13,563,213 ALLOWANCE: Balance - beginning of year 158,694 162,359 140,550 206,741 94,144 Loans charged off: CRE loans (1,108) (2,947) (6,803) (57,427) (8,658) C&I loans (29,662) (34,203) (5,160) (3,558) (6,157) Residential mortgage loans — — (22) (923) — Consumer and other loans (318) (370) (404) (328) (1,211) Total loans charged off (31,088) (37,520) (12,389) (62,236) (16,026) Less recoveries: CRE loans 563 3,285 21,698 5,722 1,851 C&I loans 3,796 1,815 2,861 2,196 5,526 Residential mortgage loans — — — — — Consumer and other loans 162 62 39 327 46 Total loan recoveries 4,521 5,162 24,598 8,245 7,423 Net loan (charge offs) recoveries (26,567) (32,358) 12,209 (53,991) (8,603) Adoption of CECL — — — — 26,200 Adoption of ASU 2022-02 — (407) — — — Provision (credit) for credit losses 18,400 29,100 9,600 (12,200) 95,000 Balance - end of year $ 150,527 $ 158,694 $ 162,359 $ 140,550 $ 206,741 RATIOS: Net loan charge offs (recoveries) to average loans 0.19 % 0.22 % (0.08) % 0.40 % 0.07 % Allowance for credit losses to total loans receivable 1.11 % 1.15 % 1.05 % 1.01 % 1.52 % Net loan charge offs (recoveries) to average loans 0.19 % 0.22 % (0.08) % 0.40 % 0.07 % Allowance for credit losses to nonperforming loans 165.79 % 349.05 % 242.26 % 128.75 % 167.80 % ALLOWANCE FOR UNFUNDED COMMITMENTS: Allowance for unfunded commitments $ 2,723 $ 3,843 $ 1,351 $ 1,101 $ 1,296 Provision (credit) for unfunded commitments (1,120) 2,492 250 (195) 660 56 The following table presents net loan charge offs (recoveries) to average loans by loan category for the years indicated: Year Ended December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Loan Type CRE loans 0.01 % — % (0.16) % 0.58 % 0.08 % C&I loans 0.66 % 0.70 % 0.05 % 0.04 % 0.02 % Residential mortgage loans — % — % — % 0.17 % — % Consumer and other loans 0.42 % 0.91 % 0.86 % — % 2.35 % Net loan charge offs (recoveries) to average loans 0.19 % 0.22 % (0.08) % 0.40 % 0.07 % The following table reflects our allocation of the allowance for credit losses by loan category and the ratio of each loan category to total loans at the dates indicated: December 31, 2024 2023 2022 2021 2020 Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for loan losses ACL Coverage Ratio Amount of allowance for loan losses ALLL Coverage Ratio (Dollars in thousands) Loan Type CRE loans $ 88,374 1.04 % $ 93,940 1.07 % $ 95,884 1.02 % $ 108,440 1.19 % $ 162,196 1.85 % C&I loans 57,243 1.44 % 51,291 1.24 % 56,872 1.11 % 27,811 0.66 % 39,155 0.94 % Residential mortgage loans 4,438 0.41 % 12,838 1.45 % 8,920 1.05 % 3,316 0.57 % 4,227 0.73 % Consumer and other loans 472 1.15 % 625 1.69 % 683 2.05 % 983 1.68 % 1,163 2.28 % Total $ 150,527 1.11 % $ 158,694 1.15 % $ 162,359 1.05 % $ 140,550 1.01 % $ 206,741 1.52 % The adequacy of the allowance for credit losses is determined upon an evaluation and review of the credit quality of the loan portfolio, taking into consideration economic forecasts, historical loan loss experience, relevant internal and external factors that affect the collection of a loan, and other pertinent factors.
In 2023, we sold $172.1 million in loans with elevated credit risk comprising $147.5 million in classified loans and $24.6 million in special mention loans. 59 The following table shows the provision for credit losses, the amount of loans charged off, and recoveries on loans previously charged off together with the balance in the allowance for credit losses at the beginning and end of each year, the amount of average and total loans outstanding, as well as other pertinent ratios at the dates and for the years indicated: At or For The Year Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) LOANS: Average loans: CRE loans $ 8,416,185 $ 8,672,549 $ 9,172,818 $ 9,371,641 $ 8,877,324 C&I loans 3,765,827 3,919,592 4,636,083 4,468,498 3,871,726 Residential mortgage loans 2,052,193 1,005,803 889,488 752,020 552,999 Consumer and other loans 32,815 36,784 33,777 42,468 41,382 Average loans, including loans held for sale $ 14,267,020 $ 13,634,728 $ 14,732,166 $ 14,634,627 $ 13,343,431 Total loans, excluding loans held for sale $ 14,701,012 $ 13,618,272 $ 13,853,619 $ 15,403,540 $ 13,952,743 ALLOWANCE: Balance - beginning of year 150,527 158,694 162,359 140,550 206,741 Loans charged off: CRE loans (1,561) (1,108) (2,947) (6,803) (57,427) C&I loans (32,669) (29,662) (34,203) (5,160) (3,558) Residential mortgage loans — — — (22) (923) Consumer and other loans (1,087) (318) (370) (404) (328) Total loans charged off (35,317) (31,088) (37,520) (12,389) (62,236) Less recoveries: CRE loans 3,905 563 3,285 21,698 5,722 C&I loans 2,308 3,796 1,815 2,861 2,196 Residential mortgage loans — — — — — Consumer and other loans 75 162 62 39 327 Total loan recoveries 6,288 4,521 5,162 24,598 8,245 Net loan (charge offs) recoveries (29,029) (26,567) (32,358) 12,209 (53,991) Adoption of ASU 2022-02 — — (407) — — Initial allowance for PSL and PCD loans acquired 3,971 — — — — Provision (credit) for credit losses 31,192 18,400 29,100 9,600 (12,200) Balance - end of year $ 156,661 $ 150,527 $ 158,694 $ 162,359 $ 140,550 RATIOS: Net loan charge offs (recoveries) to average loans 0.20 % 0.19 % 0.22 % (0.08) % 0.40 % Allowance for credit losses to total loans receivable 1.07 % 1.11 % 1.15 % 1.05 % 1.01 % Allowance for credit losses to nonperforming loans 115.46 % 165.79 % 349.05 % 242.26 % 128.75 % ALLOWANCE FOR UNFUNDED COMMITMENTS: Allowance for unfunded commitments $ 3,333 $ 2,723 $ 3,843 $ 1,351 $ 1,101 Provision (credit) for unfunded commitments 610 (1,120) 2,492 250 (195) 60 The following table presents net loan charge offs (recoveries) to average loans by loan category for the years indicated: Year Ended December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Loan Type CRE loans (0.03) % 0.01 % — % (0.16) % 0.58 % C&I loans 0.81 % 0.66 % 0.70 % 0.05 % 0.04 % Residential mortgage loans — % — % — % — % 0.17 % Consumer and other loans 3.08 % 0.42 % 0.91 % 0.86 % — % Net loan charge offs (recoveries) to average loans 0.20 % 0.19 % 0.22 % (0.08) % 0.40 % The following table reflects our allocation of the allowance for credit losses by loan category and the ratio of each loan category to total loans at the dates indicated: December 31, 2025 2024 2023 2022 2021 Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for credit losses ACL Coverage Ratio Amount of allowance for loan losses ACL Coverage Ratio Amount of allowance for loan losses ACL Coverage Ratio (Dollars in thousands) Loan Type CRE loans $ 85,144 1.00 % $ 88,374 1.04 % $ 93,940 1.07 % $ 95,884 1.02 % $ 108,440 1.19 % C&I loans 60,172 1.62 % 57,243 1.44 % 51,291 1.24 % 56,872 1.11 % 27,811 0.66 % Residential mortgage loans 10,557 0.43 % 4,438 0.41 % 12,838 1.45 % 8,920 1.05 % 3,316 0.57 % Consumer and other loans 788 1.45 % 472 1.15 % 625 1.69 % 683 2.05 % 983 1.68 % Total $ 156,661 1.07 % $ 150,527 1.11 % $ 158,694 1.15 % $ 162,359 1.05 % $ 140,550 1.01 % The adequacy of the allowance for credit losses is determined upon an evaluation and review of the credit quality of the loan portfolio, taking into consideration economic forecasts, historical loan loss experience, relevant internal and external factors that affect the collection of a loan, and other pertinent factors.
Interest expense on FHLB and FRB borrowings was $19.9 million for 2024 compared with $69.4 million for 2023, and $11.5 million for 2022. The average cost of FHLB and FRB borrowings was 3.73% for 2024, compared with 4.29% for 2023, and 2.18% for 2022.
Interest expense on FHLB and FRB borrowings was $2.1 million for 2025 compared with $19.9 million for 2024, and $69.4 million for 2023. The average cost of FHLB and FRB borrowings was 2.57% for 2025, compared with 3.73% for 2024, and 4.29% for 2023.
In determining the level of reserve needed for uncertain tax positions, we consider relevant current legislation and court rulings, among other authoritative items, to determine the level of exposure inherent in our tax positions.
In determining the valuation allowance, we use historical and forecasted future operating results. In determining the level of reserve needed for uncertain tax positions, we consider relevant current legislation and court rulings, among other authoritative items, to determine the level of exposure inherent in our tax positions.
The following table illustrates the composition of nonperforming assets and nonperforming loans at the dates indicated: December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Nonaccrual loans (1) $ 90,564 $ 45,204 $ 49,687 $ 54,616 $ 85,238 Accruing delinquent loans past due 90 days or more 229 261 401 2,131 614 Accruing troubled debt restructured loans (2) — — 16,931 52,418 37,354 Total nonperforming loans 90,793 45,465 67,019 109,165 123,206 OREO — 63 2,418 2,597 20,121 Total nonperforming assets $ 90,793 $ 45,528 $ 69,437 $ 111,762 $ 143,327 _________________________ (1) Nonaccrual loans exclude the guaranteed portion of delinquent SBA loans that are in liquidation.
The following table illustrates the composition of nonperforming assets and nonperforming loans at the dates indicated: December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Nonaccrual loans (1) $ 131,747 $ 90,564 $ 45,204 $ 49,687 $ 54,616 Accruing delinquent loans past due 90 days or more 3,943 229 261 401 2,131 Accruing troubled debt restructured loans (2) — — — 16,931 52,418 Total nonperforming loans 135,690 90,793 45,465 67,019 109,165 OREO 365 — 63 2,418 2,597 Total nonperforming assets $ 136,055 $ 90,793 $ 45,528 $ 69,437 $ 111,762 _________________________ (1) Nonaccrual loans exclude the guaranteed portion of delinquent SBA loans that are in liquidation.
The FHLB system functions as a line of credit facility for qualifying financial institutions. As a member, we are required to own capital stock in the FHLB and may apply for advances from the FHLB by pledging qualifying loans and certain securities as collateral for these advances.
As a member, we are required to own capital stock in the FHLB and may apply for advances from the FHLB by pledging qualifying loans and certain securities as collateral for these advances.
Total criticized loans, or loans rated special mention, substandard, doubtful, or loss, at December 31, 2024, totaled $450.0 million, compared with $322.4 million at December 31, 2023.
Total criticized loans, or loans rated special mention, substandard, doubtful, or loss, at December 31, 2025, totaled $351.1 million, compared with $450.0 million at December 31, 2024.
At December 31, 2024 and 2023, the Trusts are not reported on a consolidated basis pursuant to ASC 810, Consolidation. Therefore, the capital securities of $126.0 million are not presented on the Consolidated Statements of Financial Condition.
Debentures totaled $110.5 million at December 31, 2025, and $109.1 million at December 31, 2024. 64 At December 31, 2025 and 2024, the Trusts are not reported on a consolidated basis pursuant to ASC 810, Consolidation. Therefore, the capital securities of $126.0 million are not presented on the Consolidated Statements of Financial Condition.
Instead, at December 31, 2024, the long-term subordinated debentures of $109.1 million, net of $20.8 million in discounts, issued by us to the Trusts and the investment in Trusts’ common stock of $3.9 million (included in other assets) are separately reported.
Instead, at December 31, 2025, the long-term subordinated debentures of $110.5 million, net of $19.4 million in discounts, issued by us to the Trusts and the investment in Trusts’ common stock of $3.9 million (included in other assets) are separately reported.
The changes in OREO for the years ended December 31, 2024 and 2023, were as follows: Year Ended December 31, 2024 2023 (Dollars in thousands) Balance at beginning of period $ 63 $ 2,418 Additions to OREO — 105 OREO sales (63) (2,418) Valuation adjustments, net — (42) Balance at end of period $ — $ 63 Deposits Deposits are our primary source of funds for loans and investments.
The changes in OREO for the years ended December 31, 2025 and 2024, were as follows: Year Ended December 31, 2025 2024 (Dollars in thousands) Balance at beginning of period $ — $ 63 Additions to OREO 365 — OREO sales — (63) Balance at end of period $ 365 $ — 62 Deposits Deposits are our primary source of funds for loans and investments.
At December 31, 2024, the qualitative portion of our allowance for credit losses totaled $50.1 million compared with $35.7 million at December 31, 2023.
At December 31, 2025, the qualitative portion of our allowance for credit losses totaled $32.0 million compared with $50.1 million at December 31, 2024.
In addition to affordable housing projects, during the fourth quarter of 2024, we also invested in projects that qualify for renewable energy tax credits.
In addition to affordable housing projects, beginning in the fourth quarter of 2024, we began to invest in projects that qualify for renewable energy tax credits.
The increase in the cost of deposits was driven by rising interest rates during the period, a remix of deposits into higher-cost categories due to customer preferences for higher rates, and deposit pricing competition.
The increase in the cost of deposits was driven by rising interest rates during the period, a migration of deposits into higher-cost categories due to customer preferences for higher rates, and deposit pricing competition. 44 FHLB and FRB Borrowings FHLB and FRB borrowings consist of advances from the FHLB and FRB.
These outflows were partially offset by proceeds from FRB borrowings and FHLB advances. When we have more funds than required for our reserve requirements or short-term liquidity needs, we sell federal funds to other financial institutions. Conversely, when we have less funds than required, we may purchase federal funds or borrow funds from the FHLB or the FRB’s Discount Window.
When we have more funds than required for our reserve requirements or short-term liquidity needs, we sell federal funds to other financial institutions. Conversely, when we have less funds than required, we may purchase federal funds or borrow funds from the FHLB or the FRB’s Discount Window.
Interest Expense Deposits Interest expense on deposits was $495.4 million for 2024, compared with $441.2 million for 2023, and $114.8 million for 2022. The average cost of deposits was 3.38% for 2024, compared with 2.82% for 2023, and 0.76% for 2022.
Interest Expense Deposits Interest expense on deposits was $457.3 million for 2025, compared with $495.4 million for 2024, and $441.2 million for 2023. The average cost of deposits was 2.94% for 2025, compared with 3.38% for 2024, and 2.82% for 2023.
If the allowances for credit losses are inadequate, we may be required to record additional provisions, which may have a material and adverse effect on business, financial condition, and results of operations . Comparison of 2024 with 2023 The provision for credit losses on loans was $18.4 million for 2024, a decrease of $10.7 million from $29.1 million for 2023.
If the allowances for credit losses are inadequate, we may be required to record additional provisions, which may have a material and adverse effect on business, financial condition, and results of operations . 45 Comparison of 2025 with 2024 The provision for credit losses on loans was $31.2 million for 2025, an increase of $12.8 million from $18.4 million for 2024.
As part of the restructuring, the Company reduced its workforce by 13% in October 2023, and consolidated certain branches in the first half of 2024. There were no restructuring costs incurred in 2022. 44 Income Tax Provision The provision for income taxes for 2024 was $33.3 million, compared with $44.2 million in 2023 and $77.8 million in 2022.
As part of the restructuring, the Company reduced its workforce by 13% in October 2023, and consolidated certain branches in the first half of 2024. 49 Income Tax Provision The provision for income taxes for 2025 was $15.7 million, compared with $33.3 million in 2024 and $44.2 million in 2023.
Loans held for sale at December 31, 2024, comprised $13.8 million in C&I loans and $646 thousand in residential mortgage loans. At December 31, 2023, loans held for sale consisted of $2.3 million in CRE loans, and $1.1 million in residential mortgage loans. Loan Portfolio We offer a variety of products designed to meet the credit needs of our borrowers.
Loans held for sale at December 31, 2025, consisted of $82.9 million in C&I loans and $4.0 million in residential mortgage loans, compared with $13.8 million in C&I loans and $646 thousand in residential mortgage loans at December 31, 2024. Loan Portfolio We offer a variety of products designed to meet the credit needs of our borrowers.
CRE loans totaled $8.53 billion at December 31, 2024, a decrease of $270.9 million, or 3%, from $8.80 billion at December 31, 2023. We also have a granular and geographically diverse set of lending relationships. In the tables below, we show the segmentation and geographic dispersion of our largest loan segment, CRE loans, as of December 31, 2024 and 2023.
CRE loans totaled $8.49 billion at December 31, 2025, compared with $8.53 billion at December 31, 2024. We also have a granular and geographically diverse set of lending relationships. In the tables below, we show the segmentation and geographic dispersion of our largest loan segment, CRE loans, as of December 31, 2025 and 2024.
Deferred Tax Assets, Net At December 31, 2024, we had $140.0 million in net deferred tax assets compared with $135.2 million at December 31, 2023.
Deferred Tax Assets, Net At December 31, 2025, we had $184.4 million in net deferred tax assets compared with $140.0 million at December 31, 2024.
Equity investments at December 31, 2024 included $4.3 million in equity investments with readily determinable fair values and $35.6 million in equity investments without readily determinable fair values. Equity investments with readily determinable fair values at December 31, 2024, consisted of mutual funds totaling $4.3 million.
Equity investments at December 31, 2025 included $4.5 million in equity investments with readily determinable fair values and $38.0 million in equity investments without readily determinable fair values. Equity investments with readily determinable fair values at December 31, 2025, consisted of mutual funds totaling $4.5 million.
The average rate on other borrowings increased to 10.17% for 2024, compared with 10.02% for 2023, and 5.84% for 2022. The change in cost of other borrowings for 2023 and 2022 compared with 2024 was due to changes in the 3-month SOFR and 3-month LIBOR rates.
The average rate on other borrowings decreased to 8.96% for 2025, compared with 10.17% for 2024, and 10.02% for 2023. The change in cost of other borrowings, or subordinated debentures, for 2023, compared with 2025 and 2024, was due to changes in the 3-month SOFR and 3-month LIBOR rates.
Our lending activities primarily consist of CRE loans, C&I loans, residential mortgage, and consumer and other loans. CRE loans as a percentage to total loans were 63% at December 31, 2024, compared with 64% at December 31, 2023. Gross loans receivable decreased by $235.3 million to $13.62 billion at December 31, 2024, from $13.85 billion at December 31, 2023.
Our lending activities primarily consist of CRE loans, C&I loans, residential mortgage loans, and consumer and other loans. CRE loans as a percentage to total loans were 58% at December 31, 2025, compared with 63% at December 31, 2024. Gross loans receivable increased by $1.08 billion to $14.70 billion at December 31, 2025, from $13.62 billion at December 31, 2024.
We invest in affordable housing partnerships and receive CRA credits and tax credits that reduce the overall effective tax rate. Amortization of investments in affordable housing partnerships is recorded in noninterest expense based on benefit schedules of individual investment projects under the equity method of accounting. The benefit schedules show tax deductions investors can take each year.
Amortization of investments in affordable housing partnerships is recorded in noninterest expense based on benefit schedules of individual investment projects under the equity method of accounting. The benefit schedules show tax deductions investors can take each year. We amortize the initial cost of the investments in affordable housing partnerships.
At December 31, 2024, our ratio of common equity to total assets was 12.52% compared with 11.09% at December 31, 2023, and our tangible common equity represented 10.05% of tangible assets at December 31, 2024, compared with 8.86% of tangible assets at December 31, 2023.
At December 31, 2025, our ratio of common equity to total assets was 12.32% compared with 12.52% at December 31, 2024, and our tangible common equity represented 9.76% of tangible assets at December 31, 2025, compared with 10.05% of tangible assets at December 31, 2024.
The following table provides the detail of Criticized Loans by risk rating at the dates indicated: December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Special Mention $ 179,073 $ 178,992 $ 157,263 $ 257,194 $ 184,941 Classified 270,896 143,449 104,073 242,397 366,557 Total Criticized Loans $ 449,969 $ 322,441 $ 261,336 $ 499,591 $ 551,498 In 2024, we sold $102.3 million in loans with elevated credit risk comprising mostly $99.3 million in classified loans.
The following table provides the detail of Criticized Loans by risk rating at the dates indicated: December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Special Mention $ 94,003 $ 179,073 $ 178,992 $ 157,263 $ 257,194 Classified 257,113 270,896 143,449 104,073 242,397 Total Criticized Loans $ 351,116 $ 449,969 $ 322,441 $ 261,336 $ 499,591 In 2025, we sold $50.8 million in loans with elevated credit risk comprising $29.0 million in classified loans and $21.8 million in special mention loans.
Total tax credits related to our investment in affordable housing partnership investment was approximately $8.5 million and $8.6 million for the year ended December 31, 2024 and 2023, respectively. The balance of investments in affordable housing partnerships decreased from $54.5 million at December 31, 2023, to $32.4 million at December 31, 2024.
Total tax credits related to our investment in affordable housing partnership investment was approximately $12.1 million and $11.1 million for the years ended December 31, 2025 and 2024, respectively. The balance of investments in affordable housing partnerships decreased from $32.4 million at December 31, 2024, to $27.9 million at December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+2 added−2 removed24 unchanged
Biggest changeHowever, actual earnings may not increase or decrease as expected based on the cumulative gap as there are other factors that impact earnings. 66 The following table illustrates our combined asset and liability contractual repricing as of December 31, 2024: 0 - 3 Months Over 3 Months to 1 Year Over 1 Year to 5 Years Over 5 Years Total (Dollars in thousands) Rate Sensitive Assets: Interest earning cash $ 235,541 $ — $ — $ — $ 235,541 Investment securities AFS 360 20,779 586,344 1,215,760 1,823,243 Investment securities HTM — 2,191 69,341 180,853 252,385 Equity investments 39,946 — — — 39,946 Loans outstanding (1) 5,891,667 1,482,023 5,734,471 524,602 13,632,763 Total rate sensitive assets $ 6,167,514 $ 1,504,993 $ 6,390,156 $ 1,921,215 $ 15,983,878 Rate Sensitive Liabilities: Money market and NOW $ 4,515,251 $ — $ — $ — 4,515,251 Savings deposits 590,801 41,315 28,368 — 660,484 Time deposits 2,149,977 3,487,267 136,560 — 5,773,804 FHLB and FRB borrowings 239,000 — — — 239,000 Convertible notes 444 — — — 444 Subordinated debentures 109,140 — — — 109,140 Total rate sensitive liabilities $ 7,604,613 $ 3,528,582 $ 164,928 $ — $ 11,298,123 Net Gap Position $ (1,437,099) $ (2,023,589) $ 6,225,228 $ 1,921,215 Cumulative Gap Position $ (1,437,099) $ (3,460,688) $ 2,764,540 $ 4,685,755 ___________________ (1) Includes nonaccrual loans of $90.6 million and loans held for sale of $14.5 million.
Biggest changeHowever, actual earnings may not increase or decrease as expected based on the cumulative gap as there are other factors that impact earnings. 70 The following table illustrates our combined asset and liability contractual repricing as of December 31, 2025: 0 - 3 Months Over 3 Months to 1 Year Over 1 Year to 5 Years Over 5 Years Total (Dollars in thousands) Rate Sensitive Assets: Interest earning cash $ 350,581 $ — $ — $ — $ 350,581 Investment securities AFS 355 36,835 639,309 1,156,583 1,833,082 Investment securities HTM — 1,996 116,362 121,424 239,782 Equity investments 42,476 — — — 42,476 Loans outstanding (1) 6,816,725 1,309,818 5,147,548 1,513,826 14,787,917 Total rate sensitive assets $ 7,210,137 $ 1,348,649 $ 5,903,219 $ 2,791,833 $ 17,253,838 Rate Sensitive Liabilities: Money market and NOW $ 4,700,146 $ — $ — $ — 4,700,146 Savings deposits 1,105,651 29,265 21,311 — 1,156,227 Time deposits 2,553,932 3,767,113 53,966 — 6,375,011 FHLB and FRB borrowings — 284,922 — — 284,922 Convertible notes 444 — — — 444 Subordinated debentures 110,518 — — — 110,518 Total rate sensitive liabilities $ 8,470,691 $ 4,081,300 $ 75,277 $ — $ 12,627,268 Net Gap Position $ (1,260,554) $ (2,732,651) $ 5,827,942 $ 2,791,833 Cumulative Gap Position $ (1,260,554) $ (3,993,205) $ 1,834,737 $ 4,626,570 ___________________ (1) Includes nonaccrual loans of $131.7 million and loans held for sale of $86.9 million.
However, assumptions and models are inherently uncertain and actual results may differ from those derived in simulation analysis for multiple reasons, which may include actual balance sheet composition differences, timing, magnitude and frequency of interest rate changes, deviations from projected customer behavioral assumptions, and changes in market conditions or management strategies. 65 Net Interest Income Sensitivity Simulation Net interest income sensitivity simulations are used by management to measure the risk and impact to earnings over various time horizons, using a variety of interest rate scenarios.
However, assumptions and models are inherently uncertain and actual results may differ from those derived in simulation analysis for multiple reasons, which may include actual balance sheet composition differences, timing, magnitude and frequency of interest rate changes, deviations from projected customer behavioral assumptions, and changes in market conditions or management strategies. 69 Net Interest Income Sensitivity Simulation Net interest income sensitivity simulations are used by management to measure the risk and impact to earnings over various time horizons, using a variety of interest rate scenarios.
The following table presents the Company’s net interest income sensitivity related to a 12-month parallel ramp of 100, 200 and 300 bps applied in year 1 on implied forward market interest rates as of December 31, 2024, and December 31, 2023, on a balance sheet assuming static balances on assets and liabilities with deposit balances modeled to migrate from noninterest bearing deposits to interest bearing deposits as rates move.
The following table presents the Company’s net interest income sensitivity related to a 12-month parallel ramp of 100, 200 and 300 bps applied in year 1 on implied forward market interest rates as of December 31, 2025, and December 31, 2024, on a balance sheet assuming static balances on assets and liabilities with deposit balances modeled to migrate from noninterest bearing deposits to interest bearing deposits as rates move.
Removed
December 31, 2024 (4.82)% (3.41)% (1.69)% 1.65% 3.22% 3.76% December 31, 2023 (8.04)% (5.49)% (2.82)% 2.20% 3.30% 3.65% The year-over-year changes in earnings sensitivity is primarily due to the decrease in cash balances, offset by reduction in FHLB balances and termination of $400.0 million of receive-fixed swaps in 2024 compared to no terminations in 2023.
Added
December 31, 2025 (6.6)% (4.5)% (2.3)% 2.3% 4.7% 6.4% December 31, 2024 (4.8)% (3.4)% (1.7)% 1.7% 3.2% 3.8% The year-over-year changes in the modeled net interest income sensitivity profile are primarily due to the termination of the receive-fixed swap portfolio during the first quarter of 2025, the decline in interest bearing non-maturity deposit balances of corporate and institutional accounts with high beta deposits, and increase in time deposit balances, partially offset by a reduction in floating-rate C&I loan balances.
Removed
December 31, 2024 7.72% 6.87% 4.12% (4.88)% (10.59)% (16.87)% December 31, 2023 1.29% 3.29% 2.47% (5.45)% (11.94)% (18.96)% The year-over-year changes in EVE sensitivity was primarily driven by an update to the Company’s deposit pricing model. The improved model incorporates the non-linear observations the Company experienced during the recent rapid increase in federal policy rate and subsequent rate decrease. 67
Added
December 31, 2025 4.9% 5.5% 3.6% (4.5)% (9.6)% (15.0)% December 31, 2024 7.7% 6.9% 4.1% (4.9)% (10.6)% (16.9)% The year-over-year changes in EVE sensitivity was primarily driven by the shorter investment portfolio duration and the termination of the receive-fixed swap portfolio during the first quarter of 2025, partially offset by the shorter deposit duration from acquisition of Territorial. 71

Other HOPE 10-K year-over-year comparisons