Oct 28, 2026 earnings call — MANUBANK acquisition and Q3 results
Closed MANUBANK acquisition; Q3 revenue totaled $157 million, up 7% quarter-over-quarter and 11% year-over-year.
Revenue $0.2B (est $0.2B) · EPS $0.29 (est $0.29)
Key quotes
"The transaction strengthens our Commercial Banking franchise, expands our presence in Southern California and enhances our ability to serve Korean and Japanese businesses."
"Alongside that growth, our funding mix improved with growth in non-maturity deposits offsetting continued planned decreases in higher-cost time deposits."
"In terms of cost savings, we expect fully phased-in cost savings of over 40% up off of MANUBANK's starting operating expense run rate of $136 million."
Analyst Q&A 4
Floating loans and $90M timing
Q (Matthew Clark · Piper Sandler): He asked what percentage of the loan book truly floats and asked for details on the $90 million purchase accounting accretion, including the reserve amount and the accretion life.
A: Management said the $90 million accretion has a short life, about 5 years overall, with a large portion around 2 years and front-weighted because it’s on variable rate loans. They said the ACL-equivalent portion is still being finalized and will be around $30 million. They also gave loan mix: straight variable rate loans were 48% and a further 27% were hybrid as of September 30.
"The life of that $90 million is pretty short, about 5 years overall, but there is a big portion of it that's pretty short, like 2 years or so maybe." — Julianna Balicka (CFO)
Deposit betas and expense timing
Q (Gary Tenner · D.A. Davidson): He asked about expected deposit betas over the next months after adding Territorial and MANUBANK, and he asked whether there are incremental expense saves now before the full savings are recognized in 2027.
A: Management reported their recent beta on interest-bearing non-maturity deposits (including Territorial and excluding CDs) was a little under 24%, and Territorial's was less than 5%, with MANUBANK similarly very low. They expect betas to accelerate with each hike but said their mix and acquisitions should position them to perform relatively better; they also noted $0.5 billion plus of excess liquidity helps avoid 4.4% funding. On expenses, they described a "barbell" curve: some cost saves realized upfront this quarter, then fewer incremental saves until the core conversion drives the next phase of savings.
"And for Bank of Hope, including Territorial and excluding CDs, because as you know, those lag, our beta on our interest-bearing non-maturity deposits from this most recent hike was a little under 24%." — Julianna Balicka (CFO)
Why MANUBANK costs are higher
Q (Andrew Liesch · StoneX Financial): He asked why MANUBANK's expense run rate is higher versus Hope's model and when full cost saves would be realized.
A: Management said MANUBANK’s higher starting expense base reflected being a subsidiary of a global institution (SMBC), where costs were held to the parent’s standards and embedded in their run rate. They said Hope can absorb MANUBANK operations without duplicating functions, spreading costs over a larger balance sheet. They expect full cost saves in 2028 tied to the timing of the core conversion, though they hope it could be earlier subject to core providers, and said delaying some actions avoided contract breakage fees, which helps book value.
"I would say that the reason that their expense base starting out the gate relative to their assets is higher is -- I think a lot of it had to do with the fact that they were a subsidiary of a global institution, SMBC." — Julianna Balicka (CFO)
Using liquidity to cut costly borrowings
Q (Kelly Motta · KBW): She asked if the company will reduce higher-cost borrowings near close and how they will manage the new liquidity, and she also asked for more color on the sold loans and the SBA business outlook.
A: Management said the treasurer already identified highest-cost funding to reduce as it matures in the fourth quarter, and that a lot of the $0.5 billion plus excess liquidity can be used to avoid 4.4% funding. On SBA, they clarified the question: the purchased MANUBANK SBA loans were tied to purchase accounting marks and discounts, while their own SBA originations are holding up well and their SBA team continues to generate great volume.
"My treasurer has already given me his wish list of highest cost funding that we can now reduce as it matures in the fourth quarter." — Julianna Balicka (CFO)