HOPE BANCORP, INC. (HOPE): what the price requires
At today's price, HOPE BANCORP, INC. (HOPE) is priced for 8.6% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/HOPE
Headline
| Field | Value |
|---|---|
| Ticker | HOPE |
| Company | HOPE BANCORP, INC. |
| Current price | $13.43/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Return on equity needed | 8.6% |
| Return on equity now | 2.7% |
| ROE gap | +5.9pp |
| Price-to-book | 0.75x |
Solve inputs: computed at a 10.2% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~0.8pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.46σ |
| cohort percentile (of 119 peers) | 0 |
| sustained it ~10 years at this level | 80% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.39x | 3 | expensive |
| Earnings | 2.39x | 1 | expensive |
| Relative | 1.47x | 1 | expensive |
| Growth | 1.48x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.
Per-Model Detail (n=8)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $6.25 | 2.15x | yes | TBVPS $13.64 × 0.46x (ROE (TTM) 2.9% / CoE 9.3%, g=1.9% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.07% allowance/loans → ×0.93, NPL 0.76% → ×0.99) |
| Relative Valuation | Relative | $9.14 | 1.47x | yes | P/E 14.74x (blended: static sector reference 10x + trailing (TTM) 26x), scenarios: 12.0x / 14.7x / 17.4x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | $9.09 | 1.48x | yes | DPS $0.56, g=2.9% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $2.12 | 6.33x | yes | Stage 1: -29% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $5.62 | 2.39x | yes | BV/sh $17.74, ROE (TTM) 2.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $3.34 | 4.02x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $14.37 | 0.93x | yes | Rev $0.5B, growth 20% (input: historical growth; tapered), Terminal P/S: 2.8x / 3.5x / 4.1x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $14.41 | 0.93x | yes | √(22.5 × EPS $0.52 × BVPS $17.74) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $0.44 | 30.52x | yes | EPS $0.52 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $5.62 | 2.39x | yes | EPS $0.52 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (dilution) | 1.5% |
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
- Hope Bancorp is a commercial bank serving the Korean-American and broader multi-ethnic community, and the defining recent move is its earnings recovery: first-quarter 2026 net income rose 40% year over year to $29.5 million, aided by the Territorial Bancorp acquisition.
- The biggest specific risk is commercial real estate concentration; the bank's 10-K warns that regulators may require it to maintain higher levels of capital than we would otherwise be expected to maintain, which constrains how hard it can lever its capital.
- Watch the pending purchase of SMBC MANUBANK's commercial banking unit, expected to close in the second half of 2026, adding roughly $2.5 billion of loans and $2.7 billion of deposits without issuing new shares.
Bull Case
The earnings trajectory is the bull case, and it has turned sharply upward. First-quarter 2026 net income of $29.5 million, or $0.23 per diluted share, was up 40% from $21.1 million a year earlier, and the quality of that growth is what matters: net interest income rose 23% to $124 million and pre-provision net revenue, the cleanest measure of core earning power before credit costs, jumped 43% to $46.6 million. A bank whose pre-provision revenue is growing in the low forties is widening the engine that generates profit, not just enjoying a one-time tailwind.
The net interest margin tells a story of disciplined liability management. The margin held at 2.90%, unchanged from the prior quarter, because deposit costs fell faster than asset yields, with the cost of interest-bearing deposits dropping to 3.37%. In a difficult rate environment, holding the margin steady while growing the balance sheet is the harder achievement, and it shows the bank is funding its loan growth with deposits it is repricing lower rather than chasing expensive money.
The growth has a clear external engine: acquisitions that scale the franchise. The Territorial Bancorp deal already contributed to the year-over-year jump in loans and deposits, and the bank announced an accretive purchase of SMBC MANUBANK's commercial banking unit, expected to close in the second half of 2026 and add roughly $2.5 billion of loans and $2.7 billion of deposits, funded without issuing new shares and projected to be meaningfully accretive to 2027 earnings with a roughly two-year tangible book earn-back. The bank's capital is solid, with total capital well above regulatory minimums. The bull case is a recovering regional bank compounding through well-priced, non-dilutive acquisitions while trading below its book value.
Bear Case
The price leans on a recovery and an acquisition narrative, and both have to keep delivering for the stock to work. At today's price the market assumes the bank sustains a return on equity around 8.5%, while its trailing return has recently run far below that, near the low single digits. The Q1 surge is real, but it is one strong quarter measured against a depressed base, and the implied return requires the recovery to continue and the MANUBANK deal to deliver its promised accretion on schedule. Narrative-dependent re-ratings are fragile precisely because they price the plan rather than the demonstrated run rate.
The most fragile assumption sits in the loan book. Hope Bancorp is concentrated in commercial real estate, and its own 10-K flags that because of that concentration, regulators may require it to maintain higher levels of capital than we would otherwise be expected to maintain, which could limit our ability to leverage our capital. Commercial real estate has been under sustained pressure from higher rates and shifting demand for office and retail space, and a regional bank with this exposure carries the risk that credit normalizes upward just as the earnings recovery is being extrapolated. A rising allowance for credit losses would flow straight through the pre-provision growth the bull case celebrates.
The net interest margin, at 2.90%, is also notably below stronger peers, a reminder that this is a thinner-margin franchise than the best-in-class regionals. The margin held steady this quarter because deposit costs fell, but in a different rate path that dynamic can reverse, compressing the spread the bank earns. And the acquisition strategy itself is a double-edged sword: integrating Territorial and then MANUBANK carries execution and credit-mark risk, and a two-year tangible book earn-back means the deal dilutes tangible book value before it adds to it. The bear case is that a sub-book valuation is the market's honest read on a CRE-heavy, thin-margin bank whose earnings recovery and deal accretion are projections, not yet a track record.
Valuation
A bank is valued on the return it earns on its capital, read through price-to-book rather than an earnings multiple, and Hope Bancorp trades at roughly 0.7 times book, a discount to its accounting net worth. That price embeds a sustained return on equity near 8.5%. The reference point is instructive: the bank's trailing return has recently been well below that, in the low single digits, so the price is paying for a recovery toward a more normal return rather than extrapolating the depressed past. A sub-book multiple is the market saying it is not yet convinced the recovery is durable.
The families of method are unusual here, and worth reading carefully. None of them reaches the current price, which for a bank trading below book means the recent earnings power has been too weak to justify even a discounted multiple on a trailing basis. The valuation case therefore rests entirely on forward improvement: the 40% year-over-year jump in net income and the 43% rise in pre-provision revenue are the evidence that the trailing numbers understate the run rate the bank is now achieving. If that recovery holds, a 0.7-times-book multiple is cheap; if it stalls, the discount is deserved.
For a bank, solvency is read through regulatory capital rather than corporate leverage, and Hope Bancorp's capital sits comfortably above the required minimums, giving it room to absorb credit costs and fund acquisitions without raising equity. The MANUBANK purchase is explicitly being funded without new shares, which protects existing holders from dilution. The valuation comes down to a single question the methods cannot answer on trailing data alone: whether the Q1 earnings inflection and the deal-driven scale push the return on equity up toward the 8.5% the price assumes.
Catalysts
The Q1 2026 report, released in late April, was an earnings-recovery story. Net income of $29.5 million, or $0.23 per diluted share, rose 40% from a year earlier, net interest income grew 23% to $124 million, and pre-provision net revenue increased 43% to $46.6 million, with results reflecting both organic growth and the strategic benefits of the Territorial Bancorp acquisition. The net interest margin held at 2.90% as the cost of interest-bearing deposits declined to 3.37%, evidence of effective liability management in a tough rate environment.
The defining forward catalyst is the announced purchase of SMBC MANUBANK's commercial banking unit, expected to close in the second half of 2026, adding roughly $2.5 billion of loans and $2.7 billion of deposits, funded without issuing new shares and projected to be meaningfully accretive to 2027 earnings with a roughly two-year tangible book earn-back. The key things to watch are whether that deal closes on its expected timeline and delivers its accretion, whether the net interest margin holds or improves as deposit costs reprice, and the credit performance of the commercial real estate book, which is the largest single risk to the earnings recovery the price is counting on.
Peer Cohorts (Per Segment, With Filing Citations)
Banking Operations (reported)
- NWBI (Northwest Bancshares, Inc.)
- (no filing in the citation store)
- GABC (German American Bancorp, Inc.)
- (no filing in the citation store)
- GBCI (GLACIER BANCORP, INC.)
- (no filing in the citation store)
- DCOM (DIME COMMUNITY BANCSHARES, INC.)
- (no filing in the citation store)
- CLBK (Columbia Financial, Inc.)
- (no filing in the citation store)
- FBNC (FIRST BANCORP)
- (no filing in the citation store)
- FBK (FB FINANCIAL CORPORATION)
- (no filing in the citation store)
- INDB (Independent Bank Corp.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release