Hope Bancorp surges on earnings beat, margin expansion
Net interest margin reaches 2.90% as regional bank continues credit quality improvement
Hope Bancorp shares advanced in Tuesday trading after the Los Angeles-based regional lender reported fourth-quarter earnings that exceeded analyst expectations, driven by significant margin expansion and improved credit quality.
The company posted diluted earnings per share of 27 cents for the quarter ended December 31, 2025, surpassing the consensus estimate of 26 cents, according to analyst forecasts compiled prior to the announcement. Revenue reached $145.8 million, topping projections that ranged between $142.9 million and $145 million.
Net income jumped 42% year-over-year to $34.5 million, reflecting what executives described as operational momentum across the bank's core businesses. The performance helped close a year in which adjusted earnings per share, excluding notable items, increased 5% to 89 cents.
The standout metric in the quarter was the expansion of the net interest margin to 2.90%, up 40 basis points from the prior year—a notable achievement in an environment where many regional banks have struggled with pressure on lending spreads. The margin improvement contributed to what analysts characterized as a "resilient" performance within the sector.
Credit quality metrics continued to strengthen, with criticized loans declining 22% year-over-year, indicating improved underwriting standards and a healthier loan portfolio. The bank maintained its quarterly dividend at 14 cents per share, signaling confidence in its capital position and earnings outlook.
Total stockholders' equity grew to $2.28 billion as of December 31, 2025, a 1% increase from the third quarter. Tangible common equity per share rose to $13.71 from $13.53 in the prior quarter, while the tangible common equity ratio improved 12 basis points to 9.76%. The dividend maintained at $0.14 per share represents a yield of approximately 4.8% at current trading levels.
The stock closed at $11.82 on January 27, 2026, modestly higher than the previous session's close of $11.78, with trading volume reaching 1.19 million shares. Hope Bancorp has gained 5% over the past month, outperforming the regional banking sector which averaged a 2.6% increase during the same period.
Despite the recent rally, shares remain attractively valued relative to peers. The stock trades at just 0.67 times book value and 9.7 times forward earnings, metrics that have caught the attention of value-oriented investors. Analysts have established an average price target of $12.63, with individual projections ranging from $12.00 to $14.50, according to multiple research sources.
Hope Bancorp, the parent company of Bank of Hope, focuses on serving small to medium-sized enterprises and individual clients through its network of branches. The bank's emphasis on personalized service and community engagement has helped it build relationships in competitive markets across California and other Western states.
The earnings beat comes at a time when regional banks have faced scrutiny over asset quality and funding stability following industry-wide stress in 2023 and 2024. Hope Bancorp's consistent credit improvement and expanding margins suggest it has navigated the challenging environment more successfully than some peers.
Investors will be watching the bank's conference call details for guidance on 2026 loan growth expectations and further commentary on the interest rate environment. With the Federal Reserve potentially cutting rates in the coming months, management's outlook for net interest margin sustainability will be a key focus point.