Hope Bancorp (HOPE) Stock Forecast & Price Target

Hope Bancorp's stock outlook remains positive due to a notable improvement in non-performing loan (NPL) coverage, which increased to 166% from 148%, indicating stronger risk management and financial health. The company is projected to experience moderate organic loan growth alongside the merger with TBNK, which is expected to bolster overall loan growth into the high single-digit range for 2025. Additionally, the financial results reflect a favorable shift with lower provisions and expenses contributing to earnings per share (EPS) upside, while positive credit migration further enhances the stability of the bank's asset quality.

Hope Bancorp has experienced a decline in net interest income (NII), falling by 2.6% quarter-over-quarter, attributed to reduced average earning assets and a 5 basis point contraction in the net interest margin (NIM) to 2.50%. The average loan yields decreased significantly by 21 basis points, coupled with a 10.9% year-over-year decline in period-end deposits, indicating weak demand and competitive pressures that negatively affect pricing strategies. Additionally, guidance for 2025 suggests a lower NII and earnings per share outlook, further exacerbated by potential risks related to asset quality and sluggish loan demand, which could lead to a less profitable earning asset mix.