hope-20230424
0001128361false00011283612023-04-242023-04-24


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

April 24, 2023
Date of Report (Date of earliest event reported)
HOPE BANCORP INC
(Exact name of registrant as specified in its charter)
Delaware000-5024595-4849715
(State of incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

3200 Wilshire Boulevard, Suite 1400
Los Angeles, California 90010
(Address of principal executives offices, including zip code)

(213) 639-1700
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Common Stock,par value $0.001 per shareHOPENASDAQ Global Select Market
(Title of class)(Trading Symbol)(Name of exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition.

On April 24, 2023, Hope Bancorp, Inc. (“HOPE” or the “Company”) issued a news release concerning its results of operations and financial condition for the first quarter ended and as of March 31, 2023. A copy of the April 24, 2023 news release is furnished as Exhibit 99.1 and incorporated herein by reference.
The information furnished under Item 2.02, Item 7.01, and certain exhibits under Item 9.01 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 to this Current Report on Form 8-K) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be set forth as a specific reference in such filing.
Item 7.01. Regulation FD Disclosure

The Company previously announced that it will host an investor conference call on Tuesday, April 25, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its first quarter ended and as of March 31, 2023. A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. A copy of the Presentation Materials is furnished as Exhibit 99.3 and incorporated herein by reference.

Item 8.01 Other Events.

On April 24, 2023, the Company issued a news release announcing that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The cash dividend is payable on or about May 18, 2023 to all stockholders of record as of the close of business on May 4, 2023. A copy of the April 24, 2023 news release is attached hereto as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits

(d) Exhibits
Exhibit No.Description of Exhibit
99.1
99.2
99.3
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HOPE BANCORP, INC.
Date: April 25, 2023By:/s/ Kevin S. Kim
Kevin S. Kim
Chairman, President and Chief Executive Officer




News Release


HOPE BANCORP REPORTS 2023 FIRST QUARTER FINANCIAL RESULTS


LOS ANGELES - April 24, 2023 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its first quarter ended March 31, 2023.

For the three months ended March 31, 2023, net income totaled $39.1 million, or $0.33 per diluted common share. This compares with net income of $51.7 million, or $0.43 per diluted common share, in the preceding fourth quarter and $60.7 million, or $0.50 per diluted common share, in the year-ago first quarter.

“The focus this quarter was to maintain a strong balance sheet with high levels of capital and liquidity, and in this, we succeeded,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “At the close of the 2023 first quarter, total deposits grew 1% quarter-over-quarter and 9% year-over-year, underscoring the confidence that our customers have in our franchise as the largest Korean American bank in the country. Our capital levels continued to be strong and our total risk-based capital ratio increased to 12.25% at March 31, 2023. Asset quality continued to be healthy.

“From a risk management perspective, we fortified our liquidity to prudently manage through the current environment of heightened volatility due to the banking industry disruption in mid-March. We substantially increased the level of cash and cash equivalents on our balance sheet to $2.2 billion at March 31, 2023. At quarter-end, our available borrowing capacity, together with cash and cash equivalents, and unpledged investment securities, totaled $8.0 billion, equivalent to 50% of total deposits. At the same time, we continued to execute on initiatives designed to further strengthen our franchise, support long-term profitability, and create additional value for stockholders.”

Q1 2023 Highlights
•The Company’s total risk-based capital ratio was 12.25% at March 31, 2023, up 28 basis points quarter-over-quarter.
•Book value per common share increased to $17.17 and tangible common equity per share increased to $13.26 at March 31, 2023, both up 2% quarter-over-quarter.
•Total deposits of $15.83 billion at March 31, 2023, increased 1% quarter-over-quarter and 9% year-over-year.
•Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $7.99 billion, equivalent to 50% of total deposits, at March 31, 2023. This is up 11% from $7.23 billion, or 46% of total deposits, at December 31, 2022.
•During the first quarter, the Company fortified its on-balance sheet liquidity in response to industry disruption. Cash and cash equivalents increased to $2.21 billion at March 31, 2023, up from $506.8 million as of December 31, 2022. This increase in on-balance sheet liquidity reflects the Company’s conservative approach to risk management. It was largely funded through the Federal Reserve Bank’s Bank Term Funding Program (“BTFP”). BTFP borrowings were $1.40 billion at March 31, 2023, carrying a weighted average interest rate of 4.49%.
•The Bank’s insured or otherwise collateralized deposits totaled $9.91 billion at March 31, 2023. The Bank’s uninsured deposit ratio was 38% at March 31, 2023, a decrease from 41% at December 31, 2022. The available borrowing capacity, cash and cash equivalents, and unpledged investment securities well exceeded the Bank’s uninsured deposits at quarter-end.
•First quarter 2023 loan originations totaled $568.7 million, led by commercial loans and followed by commercial real estate. New commercial loans accounted for 61% of total originations for the first quarter of 2023. Loans receivable of $15.06 billion at March 31, 2023, decreased 2% quarter-over-quarter and increased 7% year-over-year.

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Financial Summary
At or for the Three Months Ended
(dollars in thousands, except per share data) (unaudited)3/31/202312/31/20223/31/2022
Net income$39,121 $51,703 $60,738 
Diluted earnings per share$0.33 $0.43 $0.50 
Net interest income before provision (credit) for credit losses$133,878 $150,521 $133,176 
Pre-provision net revenue (“PPNR”) (1)
$54,502 $78,113 $70,989 
Loans receivable$15,064,849 $15,403,540 $14,066,674 
Deposits$15,828,209 $15,738,801 $14,515,128 
Total assets$20,568,884 $19,164,491 $17,803,814 
Total equity$2,058,580 $2,019,328 $2,041,057 
Total risk-based capital ratio12.25 %11.97 %12.49 %
Net charge offs (recoveries)$108 $6,402 $(17,900)
Net charge offs (recoveries)/average loans receivable— %0.17 %(0.52)%
Allowance for credit losses$163,544 $162,359 $147,450 
Allowance for credit losses to loans receivable
1.09 %1.05 %1.05 %
Nonperforming assets to total assets (2)
0.39 %0.36 %0.58 %
Return on average assets (“ROA”)0.82 %1.10 %1.37 %
Return on average equity (“ROE”)7.65 %10.35 %11.62 %
Return on average tangible common equity (“ROTCE”) (1)
9.93 %13.54 %15.01 %
ROA (PPNR) (1)
1.14 %1.66 %1.60 %
ROE (PPNR) (1)
10.65 %15.64 %13.58 %
Net interest margin3.02 %3.36 %3.21 %
Noninterest expense / average assets1.89 %1.79 %1.70 %
Efficiency ratio62.38 %51.97 %51.50 %
__________________

(1) Pre-provision net revenue, ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Page 9 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 9.
(2) Excludes delinquent SBA loans that are guaranteed and currently in liquidation.


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Operating Results for the 2023 First Quarter

Net interest income before provision (credit) for credit losses for the 2023 first quarter totaled $133.9 million, compared with $150.5 million in the 2022 fourth quarter and $133.2 million in the year-ago first quarter. The Company attributed the quarter-over-quarter decrease primarily to higher interest expense on deposits, partially offset by interest income growth due to expanding earning asset yields and a 1% increase in average interest earning assets.

The net interest margin for the 2023 first quarter decreased 34 basis points to 3.02% from 3.36% in the preceding fourth quarter as the increase in the cost of deposits outpaced the expansion of the yields on interest-earning assets. Compared with the year-ago first quarter, the net interest margin decreased 19 basis points.
The weighted average yield on loans for the 2023 first quarter was 5.75%, up 39 basis points from 5.36% in the 2022 fourth quarter and up 187 basis points from the year-ago first quarter. The Company attributed the yield expansion to the repricing of its variable-rate loans following increases in market interest rates, as well as a significant increase in the average rate on new loans originated during the last four quarters. The rate on new loans originated in the 2023 first quarter was 7.53%, up 82 basis points from 6.71% in the preceding fourth quarter, and up 399 basis points from 3.54% in the year-ago first quarter.

The weighted average cost of deposits for the 2023 first quarter increased 79 basis points to 2.41% from 1.62% in the 2022 fourth quarter, reflecting customer preferences for higher yields in a rising interest rate environment, as well as the banking industry disruption in mid-March of 2023. Compared with the year-ago first quarter, the weighted average cost of deposits for the 2023 first quarter increased 217 basis points from 0.24%.

Noninterest income for the 2023 first quarter totaled $11.0 million, compared with $12.1 million in the 2022 fourth quarter and $13.2 million in the year-ago first quarter. Quarter-over-quarter, deposit service fees and net gains on SBA loan sales increased, offset by decreases in other income and fees. During the 2023 first quarter, the Company sold $40.7 million of the guaranteed portion of SBA 7(a) loans and $7.3 million of residential mortgage loans, compared with $41.2 million and $3.5 million, respectively, sold in the preceding fourth quarter.

Noninterest expense for the 2023 first quarter totaled $90.4 million, compared with $84.5 million in the preceding fourth quarter and $75.4 million in the year-ago first quarter. The quarter-over-quarter increase in noninterest expense was primarily driven by higher salaries and employee benefits expense, which reflected payroll taxes and related expenses that are typically higher in the first quarter, as well as $1.7 million of severance charges. Included in other expenses is $1.6 million of provision for unfunded loan commitments.

The Company’s efficiency ratio for the 2023 first quarter was 62.4%, compared with 52.0% in the preceding fourth quarter and 51.5% in the year-ago first quarter. Noninterest expense as a percentage of average assets was 1.89% for the 2023 first quarter, compared with 1.79% for the 2022 fourth quarter and 1.70% for the 2022 first quarter.

The effective tax rate for the 2023 first quarter was 25.9%, compared with 26.1% for the preceding fourth quarter and 25.9% for the year-ago first quarter.

Balance Sheet Summary
New loan originations during the 2023 first quarter totaled $568.7 million, compared with $793.4 million in the preceding fourth quarter and $1.03 billion in the 2022 first quarter.

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The following table sets forth the components of new loan production for the quarters ended March 31, 2023, December 31, 2022 and March 31, 2022.
For the Three Months Ended
(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
Commercial real estate$176,798 $302,983 $529,730 
Commercial344,194 424,340 335,756 
SBA29,977 28,825 56,602 
Residential mortgage14,317 36,720 103,473 
Consumer3,375 555 401 
Total new loan originations$568,661 $793,423 $1,025,962 

At March 31, 2023, loans receivable decreased 2% quarter-over-quarter to $15.06 billion from $15.40 billion at December 31, 2022, and increased 7% from $14.07 billion a year ago at March 31, 2022.

The following table sets forth the loan portfolio composition and percentage of total loans at March 31, 2023, December 31, 2022 and March 31, 2022:
(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
BalancePercentageBalancePercentageBalancePercentage
Commercial loans$4,821,270 32.0 %$5,109,532 33.2 %$4,124,715 29.3 %
Real estate loans9,373,529 62.2 %9,414,580 61.1 %9,262,305 65.9 %
Consumer and other loans870,050 5.8 %879,428 5.7 %679,654 4.8 %
    Loans receivable$15,064,849 100.0 %$15,403,540 100.0 %$14,066,674 100.0 %

At March 31, 2023, total deposits increased 1% to $15.83 billion, up from $15.74 billion at December 31, 2022, and increased 9% year-over-year from $14.52 billion at March 31, 2022, reflecting growth in time deposits, partially offset by lower levels of noninterest-bearing demand, money market and savings deposits in a rising interest rate environment.

The following table sets forth the deposit composition and percentage of total deposits at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
BalancePercentageBalancePercentageBalancePercentage
  Noninterest bearing demand deposits$4,504,621 28.4 %$4,849,493 30.8 %$5,498,263 37.9 %
  Money market and interest bearing
  demand deposits		4,331,998 27.4 %5,615,784 35.7 %6,484,677 44.7 %
  Saving deposits231,704 1.5 %283,464 1.8 %321,373 2.2 %
  Time deposits 6,759,886 42.7 %4,990,060 31.7 %2,210,815 15.2 %
    Total deposits$15,828,209 100.0 %$15,738,801 100.0 %$14,515,128 100.0 %


Allowance for Credit Losses
During the 2023 first quarter, the Company built its allowance for credit losses to $163.5 million at March 31, 2023, and increased the allowance coverage to 1.09% of loans receivable. For the 2023 first quarter, the Company recorded a provision for credit losses of $1.7 million, compared with $8.2 million in the preceding fourth quarter and a negative provision for credit losses of $11.0 million in the 2022 first quarter.

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The following table sets forth the allowance for credit losses and allowance coverage ratios at March 31, 2023, December 31, 2022 and March 31, 2022:

(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
Allowance for credit losses$163,544 $162,359 $147,450 
Allowance for credit loss/loans receivable1.09 %1.05 %1.05 %


Credit Quality
Asset quality continued to be healthy in the 2023 first quarter. Net charge offs were only $108 thousand in the 2023 first quarter, representing an annualized net charge off ratio of 0.00% of average loans. The following table sets forth net charge offs (recoveries) and net charge offs (recoveries) to average loans receivable, annualized, for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022:
For the Three Months Ended
(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
Net charge offs (recoveries) $108 $6,402 $(17,900)
Net charge offs (recoveries)/average loans receivable (annualized)— %0.17 %(0.52)%


Nonperforming assets represented 0.39% of total assets at March 31, 2023, compared with 0.36% as of December 31, 2022, and 0.58% as of March 31, 2022. Total nonperforming assets were $80.2 million at March 31, 2023, an increase of 15% quarter-over-quarter and a decrease of 22% year-over-year. Included in nonperforming assets were loans on nonaccrual status of $78.9 million at March 31, 2023, which increased from $49.7 million at December 31, 2022. This quarter-over-quarter change was primarily driven by one large nonaccrual loan, which is expected to be resolved by mid-year with a minimal risk of loss.

The following table sets forth the components of nonperforming assets at March 31, 2023, December 31, 2022 and March 31, 2022:
(dollars in thousands) (unaudited)3/31/202312/31/20223/31/2022
Loans on nonaccrual status (1)
$78,861 $49,687 $52,717 
Delinquent loans 90 days or more on accrual status
364 401 3,090 
Accruing troubled debt restructured loans (2)
— 16,931 44,555 
Total nonperforming loans79,225 67,019 100,362 
Other real estate owned938 2,418 2,010 
Total nonperforming assets$80,163 $69,437 $102,372 
Nonperforming assets/total assets0.39 %0.36 %0.58 %
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(1)     Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $7.6 million, $9.8 million and $17.0 million at March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
(2)     The Company adopted ASU 2022-02 in 2023 which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP and therefore accruing TDR loans are no longer included in nonperforming loans.

Total criticized loans were $304.7 million at March 31, 2023, up from $261.3 million at December 31, 2022. Year-over-year, total criticized loans decreased 23% from $393.6 million at March 31, 2022.


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Capital
The Company’s capital ratios are strong. At March 31, 2023, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at March 31, 2023, December 31, 2022 and March 31, 2022:
(unaudited)
3/31/202312/31/20223/31/2022Minimum Guideline for “Well-Capitalized” Bank
Common Equity Tier 1 Capital10.75%10.55%11.02%6.50%
Tier 1 Leverage Ratio10.13%10.15%10.37%5.00%
Tier 1 Risk-Based Ratio11.36%11.15%11.68%8.00%
Total Risk-Based Ratio12.25%11.97%12.49%10.00%

Following are the tangible common equity (“TCE”) per share and the TCE as a percentage of tangible assets at March 31, 2023, December 31, 2022, and March 31, 2022:
(unaudited)3/31/202312/31/20223/31/2022
Tangible common equity per share (1)
$13.26$12.96$13.04
Tangible common equity to tangible assets (1)
7.91%8.29%9.05%
__________________
(1)    Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth in the accompanying financial information on Table Page 9. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.

Convertible Senior Notes
At March 31, 2023, the net balance of the Company’s 2.00% Convertible Senior Notes due 2038 (the “Notes”) was $206.7 million, compared with $217.1 million at December 31, 2022. The Notes have an upcoming optional put date on May 15, 2023. During the 2023 first quarter, the Company made repurchases of its Notes in the aggregate principal amount of $10.7 million. The repurchased Notes were immediately cancelled subsequent to the repurchase. These repurchases are separate from the optional put and were made through a third-party broker.


Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including pre-provision net revenue (“PPNR”), ROA (PPNR), ROE (PPNR), tangible common equity, tangible common equity per share, tangible assets and tangible common equity to tangible assets. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding its operational performance and the Company’s and the Bank’s capital levels and has included these figures in response to market participant interest in these financial metrics. A reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided in the accompanying financial information on Table Page 9.

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Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, April 25, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its first quarter ended March 31, 2023. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through May 2, 2023, replay access code 9620853.


About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $20.57 billion in total assets as of March 31, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California, Seattle and Tampa, Fla.; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Forward-Looking Statements

Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses; regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.


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Contacts:

Julianna Balicka    Angie Yang
EVP & Chief Financial Officer    SVP, Director of Investor Relations & Corporate Communications
213-235-3235    213-251-2219
[email protected]     [email protected]


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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)

Assets:3/31/202312/31/2022% change3/31/2022% change
Cash and due from banks$2,212,637 $506,776 337 %$280,373 689 %
Investment securities2,231,989 2,243,195 — %2,492,486 (10)%
Federal Home Loan Bank (“FHLB”) stock and other investments59,962 61,761 (3)%87,201 (31)%
Loans held for sale, at the lower of cost or fair value125,268 49,245 154 %115,756 8 %
Loans receivable15,064,849 15,403,540 (2)%14,066,674 7 %
Allowance for credit losses(163,544)(162,359)1 %(147,450)11 %
  Net loans receivable14,901,305 15,241,181 (2)%13,919,224 7 %
Accrued interest receivable57,021 55,460 3 %37,949 50 %
Premises and equipment, net47,887 46,859 2 %45,642 5 %
Bank owned life insurance87,842 77,078 14 %77,390 14 %
Goodwill464,450 464,450 — %464,450 — %
Servicing assets11,628 11,628 — %10,874 7 %
Other intangible assets, net5,278 5,726 (8)%7,184 (27)%
Other assets363,617 401,132 (9)%265,285 37 %
  Total assets$20,568,884 $19,164,491 7 %$17,803,814 16 %
Liabilities:
Deposits$15,828,209 $15,738,801 1 %$14,515,128 9 %
FHLB and FRB borrowings2,130,000 865,000 146 %772,000 176 %
Convertible notes, net206,658 217,148 (5)%216,444 (5)%
Subordinated debentures106,875 106,565 — %105,652 1 %
Accrued interest payable53,818 26,668 102 %4,826 1,015 %
Other liabilities184,744 190,981 (3)%148,707 24 %
  Total liabilities$18,510,304 $17,145,163 8 %$15,762,757 17 %
Stockholders’ Equity:
Common stock, $0.001 par value$137 $137 — %$137 — %
Capital surplus 1,430,977 1,431,003 — %1,422,602 1 %
Retained earnings1,106,390 1,083,712 2 %976,483 13 %
Treasury stock, at cost(264,667)(264,667)— %(250,000)(6)%
Accumulated other comprehensive loss, net(214,257)(230,857)7 %(108,165)(98)%
  Total stockholders’ equity2,058,580 2,019,328 2 %2,041,057 1 %
  Total liabilities and stockholders’ equity$20,568,884 $19,164,491 7 %$17,803,814 16 %
Common stock shares - authorized150,000,000 150,000,000 150,000,000 
Common stock shares - outstanding119,865,732 119,495,209 120,327,689 
Treasury stock shares17,382,835 17,382,835 16,343,849 
Table Page 1
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Three Months Ended
3/31/202312/31/2022% change3/31/2022% change
  Interest and fees on loans$215,935 $207,958 4 %$132,672 63 %
  Interest on investment securities15,125 14,758 2 %11,656 30 %
  Interest on cash and deposits at other banks6,641 942 605 %137 4,747 %
  Interest on other investments695 579 20 %407 71 %
    Total interest income238,396 224,237 6 %144,872 65 %
  Interest on deposits 94,067 63,276 49 %8,676 984 %
  Interest on other borrowings and convertible notes10,451 10,440 — %3,020 246 %
    Total interest expense104,518 73,716 42 %11,696 794 %
Net interest income before provision (credit) for credit losses133,878 150,521 (11)%133,176 1 %
Provision (credit) for credit losses1,700 8,200 (79)%(11,000)N/A
Net interest income after provision (credit) for credit losses132,178 142,321 (7)%144,176 (8)%
  Service fees on deposit accounts2,221 2,159 3 %1,974 13 %
  Net gains on sales of SBA loans2,225 2,154 3 %5,603 (60)%
  Net gains on sales of residential mortgage loans64 20 220 %757 (92)%
  Other income and fees6,468 7,777 (17)%4,852 33 %
    Total noninterest income10,978 12,110 (9)%13,186 (17)%
  Salaries and employee benefits57,169 52,694 8 %47,745 20 %
  Occupancy7,521 7,072 6 %7,335 3 %
  Furniture and equipment5,058 5,045 — %4,644 9 %
  Data processing and communications2,822 2,860 (1)%2,461 15 %
  FDIC assessment1,781 1,596 12 %1,569 14 %
  Earnings credit rebates4,427 5,002 (11)%476 830 %
  Other11,576 10,249 13 %11,143 4 %
    Total noninterest expense90,354 84,518 7 %75,373 20 %
Income before income taxes52,802 69,913 (24)%81,989 (36)%
Income tax provision13,681 18,210 (25)%21,251 (36)%
Net income $39,121 $51,703 (24)%$60,738 (36)%
Earnings Per Common Share - Basic$0.33 $0.43 $0.51 
Earnings Per Common Share - Diluted$0.33 $0.43 $0.50 
Weighted Average Shares Outstanding - Basic119,551,247 119,483,499 120,131,380 
Weighted Average Shares Outstanding - Diluted120,242,295 120,102,665 121,089,474 
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited

For the Three Months Ended
(Annualized)
Profitability measures:3/31/202312/31/20223/31/2022
  ROA 0.82 %1.10 %1.37 %
  ROE 7.65 %10.35 %11.62 %
  ROA (PPNR) (1)
1.14 %1.66 %1.60 %
  ROE (PPNR) (1)
10.65 %15.64 %13.58 %
  ROTCE (2)
9.93 %13.54 %15.01 %
  Net interest margin3.02 %3.36 %3.21 %
  Efficiency ratio62.38 %51.97 %51.50 %
  Noninterest expense / average assets1.89 %1.79 %1.70 %
(1) ROA (PPNR) and ROE (PPNR) are non-GAAP financial measures. Management’s reasons and purposes for using these non-GAAP financial measures are set forth on Table Page 9 of this earnings release. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 9.
(2) Average tangible common equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided in the accompanying financial information on Table Page 9.

Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended
3/31/202312/31/20223/31/2022
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale $15,235,386 $215,935 5.75 %$15,393,843 $207,958 5.36 %$13,871,974 $132,672 3.88 %
    Investment securities2,248,479 15,125 2.73 %2,254,678 14,758 2.60 %2,621,220 11,656 1.80 %
    Interest bearing cash and deposits at
    other banks		473,344 6,641 5.69 %66,075 942 5.66 %284,342 137 0.20 %
    FHLB stock and other investments47,043 695 5.99 %48,002 579 4.79 %68,432 407 2.41 %
Total interest earning assets$18,004,252 $238,396 5.37 %$17,762,598 $224,237 5.01 %$16,845,968 $144,872 3.49 %
 
INTEREST BEARING LIABILITIES:
  Deposits:
    Money market and interest bearing demand$5,341,057 $43,118 3.27 %$5,733,448 $34,991 2.42 %$6,337,866 $5,701 0.36 %
    Savings 256,194 827 1.31 %297,128 968 1.29 %318,508 927 1.18 %
    Time deposits5,543,369 50,122 3.67 %4,276,655 27,317 2.53 %2,619,491 2,048 0.32 %
    Total interest bearing deposits11,140,620 94,067 3.42 %10,307,231 63,276 2.44 %9,275,865 8,676 0.38 %
    FHLB and FRB borrowings676,444 6,698 4.02 %838,335 6,988 3.31 %242,556 687 1.15 %
    Convertible notes, net217,114 1,322 2.44 %217,002 1,322 2.38 %216,305 1,323 2.45 %
    Subordinated debentures102,791 2,431 9.46 %102,496 2,130 8.13 %101,577 1,010 3.98 %
Total interest bearing liabilities$12,136,969 $104,518 3.49 %$11,465,064 $73,716 2.55 %$9,836,303 $11,696 0.48 %
Noninterest bearing demand deposits4,662,139 5,174,217 5,672,768 
Total funding liabilities/cost of funds$16,799,108 2.52 %$16,639,281 1.76 %$15,509,071 0.31 %
Net interest income/net interest spread$133,878 1.88 %$150,521 2.46 %$133,176 3.01 %
Net interest margin3.02 %3.36 %3.21 %
Cost of deposits:
    Noninterest bearing demand deposits$4,662,139 $— — %$5,174,217 $— — %$5,672,768 $— — %
    Interest bearing deposits11,140,620 94,067 3.42 %10,307,231 63,276 2.44 %9,275,865 8,676 0.38 %
Total deposits$15,802,759 $94,067 2.41 %$15,481,448 $63,276 1.62 %$14,948,633 $8,676 0.24 %


Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
 Three Months Ended
AVERAGE BALANCES:3/31/202312/31/2022% change3/31/2022% change
Loans, including loans held for sale $15,235,386 $15,393,843 (1)%$13,871,974 10 %
Investments2,768,866 2,368,755 17 %2,973,994 (7)%
Interest earning assets18,004,252 17,762,598 1 %16,845,968 7 %
Total assets19,087,170 18,863,726 1 %17,742,402 8 %
Interest bearing deposits11,140,620 10,307,231 8 %9,275,865 20 %
Interest bearing liabilities12,136,969 11,465,064 6 %9,836,303 23 %
Noninterest bearing demand deposits4,662,139 5,174,217 (10)%5,672,768 (18)%
Stockholders’ equity2,046,159 1,997,460 2 %2,090,755 (2)%
Net interest earning assets5,867,283 6,297,534 (7)%7,009,665 (16)%
LOAN PORTFOLIO COMPOSITION: 3/31/202312/31/2022% change3/31/2022% change
Commercial loans$4,821,270 $5,109,532 (6)%$4,124,715 17 %
Real estate loans9,373,529 9,414,580 — %9,262,305 1 %
Consumer and other loans870,050 879,428 (1)%679,654 28 %
    Loans, net of deferred loan fees and costs15,064,849 15,403,540 (2)%14,066,674 7 %
Allowance for credit losses(163,544)(162,359)1 %(147,450)11 %
    Loans receivable, net$14,901,305 $15,241,181 (2)%$13,919,224 7 %
REAL ESTATE LOANS BY PROPERTY TYPE:3/31/202312/31/2022% change3/31/2022% change
Multi-tenant retail$1,817,874 $1,866,434 (3)%$1,851,150 (2)%
Hotels/motels900,990 952,579 (5)%1,208,217 (25)%
Gas stations and car washes1,046,528 1,054,720 (1)%1,055,383 (1)%
Mixed-use facilities818,227 848,417 (4)%872,362 (6)%
Industrial warehouses1,309,763 1,294,893 1 %1,263,791 4 %
Multifamily1,302,597 1,295,644 1 %841,316 55 %
Single-tenant retail706,593 718,977 (2)%747,223 (5)%
Office464,703 473,459 (2)%442,944 5 %
All other1,006,254 909,457 11 %979,919 3 %
  Total real estate loans$9,373,529 $9,414,580 — %$9,262,305 1 %
DEPOSIT COMPOSITION3/31/202312/31/2022% change3/31/2022% change
Noninterest bearing demand deposits$4,504,621 $4,849,493 (7)%$5,498,263 (18)%
Money market and interest bearing demand4,331,998 5,615,784 (23)%6,484,677 (33)%
Saving deposits231,704 283,464 (18)%321,373 (28)%
Time deposits 6,759,886 4,990,060 35 %2,210,815 206 %
  Total deposits$15,828,209 $15,738,801 1 %$14,515,128 9 %

Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)

CAPITAL RATIOS:3/31/202312/31/20223/31/2022
Total stockholders’ equity$2,058,580 $2,019,328 $2,041,057 
Common equity tier 1 ratio10.75 %10.55 %11.02 %
Tier 1 risk-based capital ratio 11.36 %11.15 %11.68 %
Total risk-based capital ratio 12.25 %11.97 %12.49 %
Tier 1 leverage ratio 10.13 %10.15 %10.37 %
Total risk weighted assets$16,886,343 $17,049,410 $15,393,639 
Book value per common share$17.17 $16.90 $16.96 
Tangible common equity to tangible assets (1)
7.91 %8.29 %9.05 %
Tangible common equity per share (1)
$13.26 $12.96 $13.04 
(1) Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
Three Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:3/31/202312/31/20229/30/20226/30/20223/31/2022
Balance at beginning of period$162,359 $160,561 $151,580 $147,450 $140,550 
ASU 2022-02 day 1 adoption impact(407)— — — — 
Provision (credit) for credit losses1,700 8,200 9,200 3,200 (11,000)
Recoveries387 3,222 331 1,642 19,403 
Charge offs (495)(9,624)(550)(712)(1,503)
Balance at end of period$163,544 $162,359 $160,561 $151,580 $147,450 
Net charge offs (recoveries)/average loans receivable (annualized)— %0.17 %0.01 %(0.03)%(0.52)%
3/31/202312/31/20229/30/20226/30/20223/31/2022
Allowance for unfunded loan commitments$2,971 $1,351 $1,231 $1,481 $1,301 
Three Months Ended
NET LOAN CHARGE OFFS (RECOVERIES):3/31/202312/31/20229/30/20226/30/20223/31/2022
Real estate loans$(109)$2,022 $9 $(508)$(16,418)
Commercial loans196 4,174 115 (461)(1,529)
Consumer loans21 206 95 39 47 
Total net charge offs (recoveries)$108 $6,402 $219 $(930)$(17,900)
Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
NONPERFORMING ASSETS:3/31/202312/31/20229/30/20226/30/20223/31/2022
Loans on nonaccrual status (1)
$78,861 $49,687 $64,571 $69,522 $52,717 
Delinquent loans 90 days or more on accrual status364 401 5,306 12,468 3,090 
Accruing troubled debt restructured loans (2)
— 16,931 25,631 26,572 44,555 
Total nonperforming loans79,225 67,019 95,508 108,562 100,362 
Other real estate owned938 2,418 1,480 2,010 2,010 
Total nonperforming assets$80,163 $69,437 $96,988 $110,572 $102,372 
Nonperforming assets/total assets0.39 %0.36 %0.51 %0.61 %0.58 %
Nonperforming assets/loans receivable & OREO0.53 %0.45 %0.63 %0.76 %0.73 %
Nonperforming assets/total capital3.89 %3.44 %4.91 %5.53 %5.02 %
Nonperforming loans/loans receivable0.53 %0.44 %0.62 %0.75 %0.71 %
Nonaccrual loans/loans receivable0.52 %0.32 %0.42 %0.48 %0.37 %
Allowance for credit losses/loans receivable1.09 %1.05 %1.04 %1.04 %1.05 %
Allowance for credit losses/nonaccrual loans207.38 %326.76 %248.66 %218.03 %279.70 %
Allowance for credit losses/nonperforming loans206.43 %242.26 %168.11 %139.63 %146.92 %
Allowance for credit losses/nonperforming assets204.01 %233.82 %165.55 %137.09 %144.03 %
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $7.6 million, $9.8 million, $9.9 million, $13.2 million, and $17.0 million, at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.
(2) The Company adopted ASU 2022-02 in 2023 which eliminated the concept of TDR from GAAP and therefore accruing TDR loans are no longer included in nonperforming loans.
NONACCRUAL LOANS BY TYPE:3/31/202312/31/20229/30/20226/30/20223/31/2022
Real estate loans$44,376 $33,915 $47,807 $53,966 $36,655 
Commercial loans26,191 5,620 7,675 8,206 8,686 
Consumer loans8,294 10,152 9,089 7,350 7,376 
   Total$78,861 $49,687 $64,571 $69,522 $52,717 
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:3/31/202312/31/20229/30/20226/30/20223/31/2022
30 - 59 days$7,662 $7,049 $13,092 $10,090 $12,439 
60 - 89 days249 2,243 4,933 6,354 3,090 
   Total$7,911 $9,292 $18,025 $16,444 $15,529 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:3/31/202312/31/20229/30/20226/30/20223/31/2022
Real estate loans$3,652 $4,115 $9,694 $7,919 $6,097 
Commercial loans419 3,300 6,165 3,397 5,003 
Consumer loans3,840 1,877 2,166 5,128 4,429 
   Total$7,911 $9,292 $18,025 $16,444 $15,529 
CRITICIZED LOANS:3/31/202312/31/20229/30/20226/30/20223/31/2022
Special mention$166,472 $157,263 $79,399 $95,797 $166,958 
Substandard138,224 104,073 204,713 244,748 226,661 
   Total criticized loans$304,696 $261,336 $284,112 $340,545 $393,619 
Table Page 8
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Reconciliation of GAAP financial measures to non-GAAP financial measures
Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. A reconciliation of the most directly comparable GAAP to non-GAAP financial measures utilized by management is provided below.
Three Months Ended
RETURN ON AVERAGE TANGIBLE COMMON EQUITY3/31/202312/31/20223/31/2022
Average stockholders’ equity$2,046,159 $1,997,460 $2,090,755 
Less: Average goodwill and core deposit intangible assets, net(469,992)(470,442)(471,921)
Average tangible common equity$1,576,167 $1,527,018 $1,618,834 
Net income$39,121 $51,703 $60,738 
Return on average tangible common equity (annualized)9.93 %13.54 %15.01 %
TANGIBLE COMMON EQUITY3/31/202312/31/20223/31/2022
Total stockholders’ equity$2,058,580 $2,019,328 $2,041,057 
Less: Goodwill and core deposit intangible assets, net(469,728)(470,176)(471,634)
Tangible common equity$1,588,852 $1,549,152 $1,569,423 
Total assets$20,568,884 $19,164,491 $17,803,814 
Less: Goodwill and core deposit intangible assets, net(469,728)(470,176)(471,634)
Tangible assets$20,099,156 $18,694,315 $17,332,180 
Common shares outstanding119,865,732 119,495,209 120,327,689 
Tangible common equity to tangible assets7.91 %8.29 %9.05 %
Tangible common equity per share$13.26 $12.96 $13.04 
Three Months Ended
PRE-PROVISION NET REVENUE3/31/202312/31/20223/31/2022
Net interest income before provision (credit) for credit losses$133,878 $150,521 $133,176 
Noninterest income10,978 12,110 13,186 
Revenue144,856 162,631 146,362 
Less noninterest expense90,354 84,518 75,373 
Pre-provision net revenue$54,502 $78,113 $70,989 
Average assets$19,087,170 $18,863,726 $17,742,402 
ROA (PPNR)1.14 %1.66 %1.60 %
Average stockholders’ equity2,046,159 1,997,460 2,090,755 
ROE (PPNR)10.65 %15.64 %13.58 %
Table Page 9
2023 First Quarter Earnings Conference Call Tuesday, April 25, 2023

 
Forward Looking Statements & Additional Disclosures This presentation may contain statements regarding future events or the future financial performance of Hope Bancorp, Inc. (the “Company”) that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law. 2

 
Strong Capital & Available Liquidity • Company’s total risk-based capital ratio was 12.25% at 3/31/23, +28 bps Q-o-Q • Book value per share of $17.17 and tangible common equity per share of $13.26 at 3/31/23, both +2% Q-o-Q • Avail. borrowing capacity, cash & cash equivalents, & unpledged investment securities: $8.0B, or 50% of deposits, at 3/31/23 Loans • New loan production for 1Q23 totaled $569MM • Loans receivable of $15.1B at 3/31/23, -2% Q-o-Q and +7% Y-o-Y Asset Quality • Asset quality continues to be healthy • Minimal net charge offs in 1Q23: only $108 thousand • Nonperforming assets ratio: 0.39% of total assets at 3/31/23, compared with 0.36% at 12/31/22 Deposits • Deposits of $15.8B at 3/31/23, +1% Q-o-Q and +9% Y-o-Y • Granular deposit base with 34% of deposits in consumer accounts • Bank’s uninsured deposits ratio improved to 38% at 3/31/23, compared with 41% at 12/31/22 Earnings & Profitability • 1Q23 net income: $39.1MM, or $0.33 per diluted share • 1Q23 ROA of 0.82%, ROE of 7.65%, ROTCE1 of 9.93% • 1Q23 Pre-provision net revenue1 (PPNR) of $54.5MM, ROA (PPNR)1 of 1.14%, ROE (PPNR)1 of 10.65% Q1 2023 Financial Highlights Total Risk-Based Capital 12.25% NCO Ratio 0.00% Gross Loans $15.1B Total Deposits $15.8B (as of 3/31/23) (as of 3/31/23) 3 Net Income/EPS $39.1MM/$0.33 (as of 3/31/23) (1Q23 annualized) (1Q23) 1 ROTCE, PPNR, ROA (PPNR) and ROE (PPNR) are non-GAAP financial measures. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided on Slide 20.

 
Strong Capital Ratios Common Equity Tier 1 Capital Ratio • Holding Company Common Equity Tier 1 and Total Risk-based Capital ratios increased Q-o-Q. All regulatory capital ratios meaningfully above requirements for “well- capitalized” financial institutions. Holding Company total risk-based capital ratio of 12.25% and Bank-level total risk-based capital ratio of 12.06% at 3/31/23 • Proforma capital very strong: Adjustments for the allowance for credit losses and hypothetical adjustments for investment security marks not otherwise already reflected in equity, still results in very strong capital ratios • Dividend: Quarterly common stock dividend of $0.14 per share, equivalent to $0.56 per share annualized. Equivalent to a dividend yield of 5.70% (3/31/23) • No buybacks during 1Q23 Tangible Common Equity Ratio1 Total Risk-based Capital Ratio Leverage Ratio 4 Well Capitalized 6.50% Well Capitalized 10.00% Well Capitalized 5.00% 1 Tangible common equity per share and Tangible common equity ratio are non-GAAP financial measures. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided on Slide 20. * Proforma ratios as of 3/31/23 are non-GAAP financial measures and reflect (a) inclusion of on- and off-balance sheet allowance not already in capital; (b) treatment of HTM securities as if they were AFS, with unrealized losses in AOCI; and (c) removal of the AOCI opt-out in calculating regulatory capital.

 
Strong Balance Sheet & Liquidity Position 5 • Significant increase in cash and cash equivalents to $2.2B at 3/31/23, up from $507MM at 12/31/22, reflected conservative approach to liquidity risk management, in response to the banking industry disruption in mid-March 2023 • Increase in on-balance sheet liquidity largely funded through the Bank Term Funding Program: $1.4B outstanding at 3/31/23, carrying weighted average rate of 4.49%. Positive carry and contribution to net interest income • Available borrowing capacity, cash and cash equivalents, and unpledged investment securities increased to $8.0B at 03/31/23 (50% of total deposits), up from $7.2B at 12/31/22 (46% of deposits) • Securities portfolio represented 11% of total assets at 3/31/23, 88% of which was available-for-sale. Primarily fixed-rate portfolio, yielding 2.6% with an effective duration of 5.5 at 3/31/23 • Company repurchased $11MM of its Convertible Senior Notes during 1Q23. Net balance was $207MM at 3/31/23. Even after the expected cash payoff of remaining convertible notes with the upcoming put option date in May 2023, the Bank and Holding Company's liquidity and capital positions will remain strong At March 31, 2023 ($ in millions) Amortized Cost Fair Value Net Unrealized Gain/(Loss) Available-for-sale (“AFS”) $ 2,246 $ 1,960 $ (286) Held-to-maturity (“HTM”) $ 272 $ 263 $ (9) Total Investment Securities Portfolio $ 2,518 $ 2,223 $ (295) Unpledged Securities $0.4 FHLB Capacity $4.5 FRB Capacity $0.5 Fed Fund Lines at Other Banks $0.4 Cash and Cash Equivalents $2.2 $8.0B Available Borrowing Capacity, Cash & Cash Equivalents, and Unpledged Investment Securities (as of 3/31/23) ($ Billions) Investment Securities Portfolio

 
Granular Deposit Base 6 Noninterest Bearing Demand Deposits 28% Money Market and Interest Bearing Demand 27% Savings 2% Time Deposits 43% $15.8B Total Deposits (as of 3/31/23) Consumer 34% Commercial 66% • Average commercial deposit account size: approx. $300,000 • Average consumer deposit account size: approx. $50,000 • Total deposits of $15.8B at 3/31/23, +1% Q-o-Q and +9% Y-o-Y • Bank’s insured or otherwise collateralized deposits totaled $9.9B at 3/31/23. Bank’s uninsured deposit ratio improved to 38% at 3/31/23, from 41% at 12/31/22 Deposit Composition by Deposit Type Granular Deposit Portfolio $15.8B Total Deposits (as of 3/31/23)

 
New Loan Production New Loan Originations Funded ($ Millions) 578 545 534 324 201 344 557 747 432 350 104 184 68 37 18 1Q22 2Q22 3Q22 4Q22 1Q23 CRE C&I Mortgage and Consumer $569 $1,026 $1,286 $793 $1,349 • New loan production balanced between commercial and industrial (“C&I”) and commercial real estate (“CRE”) • C&I production volume accounted for 61% in 1Q23 7 3.54% 4.26% 5.37% 6.71% 7.53% 0.29% 0.94% 2.35% 3.82% 4.69% 1Q22 2Q22 3Q22 4Q22 1Q23 Avg Rate of New Loans Avg Fed Funds Rate Average Yield on New Loan Production • Average yield of new loans +82 bps Q-o-Q to 7.53%, and +399 bps Y-o-Y

 
Loan Portfolio Composition 8 Owner- Occupied CRE 19% Nonowner-Occupied CRE 43% C&I 32% Consumer 6% $15.1B Loans Receivable (as of 3/31/23) $0.9B Avg Size: $0.6MM $3.0B Avg Size: $2.0MM$6.4B Avg Size: $1.8MM $4.8B Avg Size: $1.6MM • Loan portfolio well-diversified across major loan types of CRE, C&I, owner-occupied CRE, and consumer. Consumer portfolio predominantly residential mortgage • Total loans receivable of $15.1B at 3/31/23: -2% Q-o-Q and +7% Y-o-Y • Aggregate payoffs and paydowns relatively stable: $717MM in 1Q23 vs. $734MM in 4Q22 • C&I portfolio well-diversified by industry – C&I loans outstanding of $4.8B at 3/31/23: -6% Q-o-Q and +17% Y-o-Y – Utilization rate of C&I loan commitments: 58% at 3/31/23 vs. 64% at 12/31/22, driven by decrease in warehouse line utilization

 
Diversified Commercial Real Estate Portfolio Multi-tenant Retail 19% Industrial & Warehouse 14% Multifamily 14% Gas Station & Car Wash 11% Hotel & Motel 10% Mixed Use 9% Single-tenant Retail 8% Office 5% All Others 10% $9.4B CRE Portfolio (as of 3/31/23) CRE Portfolio by Property Type Portfolio Size ($ Millions) As of 3/31/23 Average Loan Size ($ Millions) Weighted Average LTV 1 As a % of CRE Portfolio As a % of Total Portfolio Multi-tenant Retail $ 1,818 19% 12% $ 2.2 51.7% Industrial & Warehouse $ 1,310 14% 9% $ 2.2 53.9% Multifamily $ 1,303 14% 9% $ 2.3 55.4% Gas Station & Car Wash $ 1,047 11% 7% $ 1.7 59.5% Hotel/Motel $ 901 10% 6% $ 2.0 53.9% Mixed Use $ 818 9% 5% $ 1.6 48.6% Single-tenant Retail $ 706 8% 5% $ 1.3 56.4% Office $ 465 5% 3% $ 2.3 54.6% All Other $ 1,006 10% 6% $ 1.5 45.2% Total CRE Portfolio $ 9,374 $ 1.9 53.3% • CRE loans outstanding of $9.4B at 3/31/23, flat Q-o-Q and up 1% Y-o-Y • CRE portfolio well-diversified by property type • Vast majority of CRE loans have full recourse and personal guarantees • CRE Office: only 3% of total loans at 3/31/23, with no central business district exposure 1 Weighted average LTV is based on most recent LTV, using most recent available appraisal and current loan balance. 9 53.3% Weighted Avg. LTV

 
Loan Size (as of 3/31/23) Balance ($ Millions) # Loans Average Loan Size ($ Millions) Weighted Average LTV 1 > $30MM $ 328 8 $ 40.7 60.7% $20MM - $30MM $ 640 26 $ 24.4 57.1% $10MM - $20MM $ 1,249 91 $ 13.6 59.4% $5MM - $10MM $ 1,791 260 $ 6.8 54.5% $2MM - $5MM $ 2,715 870 $ 3.1 52.5% < $2MM $ 2,651 3,684 $ 0.7 48.9% Total CRE Portfolio $ 9,374 4,939 $ 1.9 53.3% Granular Commercial Real Estate Portfolio with Low LTV 10 CRE Portfolio by Size Segment 1 Weighted average LTV is based on most recent LTV, using most recent available appraisal and current loan balance. • Low loan-to-value (“LTV”) is consistent across segments by size and segments by property type • Only 7% of CRE portfolio had an LTV of over 70%, of which only 1% had an LTV of over 75% < 50%: 36% > 50% - 55%: 13% > 55% - 60%: 13% > 60% - 65%: 16% > 65% - 70%: 15% > 70% - 75%: 6% > 75%: 1% 53.3% Weighted Avg. LTV (as of 3/31/23) Total CRE: Distribution by LTV (ex. SBA)

 
Net Interest Income & Margin 11 • 1Q23 NII of $134MM, -11% Q-o-Q, driven by higher cost of deposits, partially offset by earning asset yield expansion and average earning asset growth of +1% Q-o-Q • Q-o-Q average earning asset growth reflected growth in interest earning cash & equivalents Net Interest Income (“NII”) & Net Interest Margin (“NIM”) ($ Millions) $133 $142 $153 $151 $134 3.21% 3.36% 3.49% 3.36% 3.02% 1Q22 2Q22 3Q22 4Q22 1Q23 3.02% 3.36% Loan yield increase +33bps 1Q23 net interest margin change: -34bps Q-o-Q Net Interest Income NIM Increase Decrease Total Q-o-Q change +8% -2% -11%+6% Q-o-Q Change in Net Interest Margin 4Q22 1Q23 -72bps • 1Q23 NIM of 3.02%, -34 bps Q-o-Q, driven by higher cost of interest bearing (“IB”) funds and funding mix shift, partially offset by expanding loan and other earning asset yields, and growth in interest earning cash & equivalents Inv securities yield increase + cash balance increase +7bps IB funding cost increase + balance increase -2bps Loan balance decrease

 
Average Loan Growth Trends & Yields 12 • 1Q23 average loans receivable of $15.2B, -1% Q-o-Q and +10% Y-o-Y $13.9 $14.3 $14.9 $15.4 $15.2 12.25 12.75 13.25 13.75 14.25 14.75 15.25 15.75 1Q22 2Q22 3Q22 4Q22 1Q23 Average Loans Receivable ($ Billions) Q-o-Q change +3% +3% +4% -1% 3.88% 4.06% 4.65% 5.36% 5.75% 0.29% 0.94% 2.35% 3.82% 4.69% 1Q22 2Q22 3Q22 4Q22 1Q23 Avg Loan Yield Avg Fed Funds Rate Average Loan Yield Relative to Fed Funds • 1Q23 average loan yield of 5.75%, +399 bps Q-o-Q and +187 bps Y-o-Y

 
Average Deposit Growth Trends & Costs 13 Average Cost of DepositsAverage Deposits ($ Billions) 9.3 9.1 9.7 10.3 11.1 5.7 5.7 5.7 5.2 4.7 1Q22 2Q22 3Q22 4Q22 1Q23 Average Interest Bearing Deposits Average Noninterest Bearing Deposits $15.5$15.4$14.8$14.9 $15.8 • 1Q23 total cost of deposits of 2.41%, +79 bps Q-o-Q and +217 bps Y-o-Y, due to rapid pace of Fed Funds rate hikes, customer preferences for higher yields in a rising interest rate environment, and the banking industry disruption in mid-March • 1Q23 average deposits of $15.8B, +2% Q-o-Q and +6% Y-o-Y • Growth in IB deposits reflected customer behavior changes in a higher interest rate environment 0.24% 0.33% 0.79% 1.62% 2.41% 0.38% 0.54% 1.25% 2.44% 3.42% 0.29% 0.94% 2.35% 3.82% 4.69% 1Q22 2Q22 3Q22 4Q22 1Q23 Total Cost of Deposits Cost of Interest Bearing Deposits Avg Fed Funds Rate Q-o-Q change +0% -1% +4% +2%

 
Noninterest Income 14 • 1Q23 noninterest income of $11MM, -9% Q-o-Q – Q-o-Q growth in deposit service fees and net gains on SBA loan sales – Other income and fees decreased Q-o-Q • Sold $41MM of the guaranteed portion of SBA 7(a) loans to the secondary market in 1Q23 vs. $41MM in 4Q22 • Sold $7MM of residential mortgage loans in 1Q23 vs. $3.5MM in 4Q22 2.0 2.3 2.6 2.1 2.2 6.4 5.9 2.8 2.2 2.3 4.8 4.5 8.0 7.8 6.5 1Q22 2Q22 3Q22 4Q22 1Q23 Service Fees on Deposit Accounts Net Gains on Loan Sales Other Income and Fees $11.0 $13.2 $12.7 $13.4 $12.1 Noninterest Income ($ Millions) 1 Net gains on loan sales comprise net gains on sales of SBA and residential mortgage loans. 1

 
47.7 51.1 53.2 52.7 57.2 12.0 12.0 11.6 12.1 12.61.6 1.5 1.6 1.6 1.814.1 15.8 17.5 18.1 18.8 1Q22 2Q22 3Q22 4Q22 1Q23 Salary and employee benefits Occupancy and furniture FDIC Assessment All Other Expenses Efficiency Ratio & Noninterest Expense to Average Assets 51.5% 52.1% 50.4% 52.0% 62.4% 1.70% 1.80% 1.82% 1.79% 1.89% 1Q22 2Q22 3Q22 4Q22 1Q23 Efficiency Ratio Noninterest Expense/Avg Assets (annualized) Noninterest Expense & Efficiency 15 $75.4 $80.4 $83.9 $84.5 $90.4 Noninterest Expense ($ Millions) • 1Q23 noninterest expense of $90MM, +7% from $85MM in 4Q22 – Q-o-Q increase largely driven by salary and employee benefits expense, typically higher in Q1 due to payroll taxes and related expenses – 1Q23 included $1.7MM of severance charges due to staffing rationalization. Full-time employees of 1,467 at 3/31/23, vs. 1,549 at 12/31/22. Staffing adjustments expected to result in $12MM of annualized cost savings – Excluding severance charges, adjusted salaries and employee benefits expense would have grown +5% Q-o-Q (vs. +8% unadjusted). Total noninterest expense would have been up +5% (vs. +7% unadjusted) • 1Q23 other expense included $1.6MM in provision for unfunded commitments

 
$147 $152 $161 $162 $164 1.05% 1.04% 1.04% 1.05% 1.09% 1Q22 2Q22 3Q22 4Q22 1Q23 ACL ACL Coverage Ratio • Asset quality continues to be healthy • Q-o-Q build in allowance for credit losses to $164MM. Coverage ratio increased to 1.09% at 3/31/23, up from 1.05% at 12/31/22 • Minimal net charge offs of $108 thousand in 1Q23, or 0.0% of average loans receivable, annualized • NPA ratio of 0.39% at 3/31/23, vs. 0.36% at 12/31/22. NPAs were $80MM at 3/31/23, vs. $69MM at 12/31/22 – NPAs included nonaccrual loans of $79MM at 3/31/23, compared with $50MM at 12/31/22 – Q-o-Q change primarily attributable to one $18.5MM commercial loan, which is fully secured. Expected resolve by mid-year with minimal risk of loss • Criticized loans ratio of 2.02% at 3/31/23, vs. 1.70% at 12/31/22. Total criticized loans were $305MM at 3/31/23, vs. $261MM at 12/31/22 Asset Quality Metrics 16 Provision (Credit) for Credit Losses & Net Charge Offs (Recoveries) Nonperforming Assets (“NPA”) RatioAllowance for Credit Losses (“ACL”) & Coverage Ratio Criticized Loans Ratio -$11.0 $3.2 $9.2 $8.2 $1.7 -$17.9 -$0.9 $0.2 $6.4 $0.1 -0.52% -0.03% 0.01% 0.17% 0.00% 1Q22 2Q22 3Q22 4Q22 1Q23 Provision for Credit Losses Net Charge Offs (Recoveries) NCO Ratio (annualized) 2.80% 2.34% 1.83% 1.70% 2.02% 1Q22 2Q22 3Q22 4Q22 1Q23 Total Criticized Loans as a % of Total Loans ($ Millions, except ratios) ($ Millions, except ratios) 0.58% 0.61% 0.51% 0.36% 0.39% 1Q22 2Q22 3Q22 4Q22 1Q23 NPAs/Total Assets

 
Management Outlook  Loan Growth: Full-year loan growth projected in the low-single digit range  Net Interest Income: Expecting to decline in 2Q23 due to higher cost of funds at the end of 1Q23. Anticipating stable-to-modestly increasing NII in 2H23  Noninterest Income: Expecting modest quarterly growth for rest of year  Noninterest Expenses: Focused on improving profitability and efficiency. Expecting quarterly improvement in efficiency, driven in part by cost savings from the 1Q23 staffing rationalization  Pre-tax, Pre-provision Revenue (PPNR)*: Expecting growth in 2H23, driven by stable to growing net interest income, modest fee income growth, and improving efficiency  Asset Quality: Generally stable, consistent with current trends. Expecting modest allowance build for remainder of 2023 17 * PPNR is a non-GAAP financial measure. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measure is provided on Slide 20.

 
Q&A 2023 First Quarter Earnings Conference Call 18

 
Appendix 19

 
($ in thousands) 1Q22 4Q22 1Q23 Total stockholders’ equity $ 2,041,057 $ 2,019,328 $ 2,058,580 Less: Goodwill and core deposit intangible assets, net (471,634) (470,176) (469,728) Tangible common equity $ 1,569,423 $ 1,549,152 $ 1,588,852 Total assets $ 17,803,814 $ 19,164,491 $ 20,568,884 Less: Goodwill and core deposit intangible assets, net (471,634) (470,176) (469,728) Tangible assets $ 17,332,180 $ 18,694,315 $ 20,099,156 Common shares outstanding 120,327,689 119,495,209 119,865,732 Tangible common equity to tangible assets 9.05% 8.29% 7.91% Tangible common equity per share $ 13.04 $ 12.96 $ 13.26 Appendix: Non-GAAP Financials Management reviews select non-GAAP financial measures in evaluating the Company’s financial performance and in response to market participant interest. A reconciliation of the most directly comparable GAAP to non-GAAP financial measures utilized by management is provided below. Pre-provision Net Revenue (PPNR) ($ in thousands) 1Q22 4Q22 1Q23 Net interest income before provision (credit) for credit losses $ 133,176 $ 150,521 $ 133,878 Noninterest income 13,186 12,110 10,978 Revenue 146,362 162,631 144,856 Less: noninterest expense 75,373 84,518 90,354 Pre-provision net revenue $ 70,989 $ 78,113 $ 54,502 Average assets $ 17,742,402 $ 18,863,726 $ 19,087,170 ROA (PPNR) 1.60% 1.66% 1.14% Average Stockholders’ equity $ 2,090,755 1,997,460 $ 2,046,159 ROE (PPNR) 13.58% 15.64% 10.65% Tangible Common Equity ($ in thousands) 1Q22 4Q22 1Q23 Average stockholders’ equity $ 2,090,755 $ 1,997,460 $ 2,046,159 Less: Average goodwill and core deposit intangible assets, net (471,921) (470,442) (469,992) Average Tangible common equity $ 1,618,834 $ 1,527,018 $ 1,576,167 Net income $ 60,738 $ 51,703 $ 39,121 Return on average tangible common equity 15.01% 13.54% 9.93% Return on Average Tangible Common Equity (ROTCE) 20

 

News Release

HOPE BANCORP DECLARES QUARTERLY CASH DIVIDEND OF $0.14 PER SHARE


LOS ANGELES - April 24, 2023 - Hope Bancorp, Inc. (NASDAQ: HOPE) today announced that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The dividend is payable on or about May 18, 2023 to all stockholders of record as of the close of business on May 4, 2023.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, April 25, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its first quarter ended March 31, 2023. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through May 2, 2023, replay access code 9620853.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $20.57 billion in total assets as of March 31, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California, Seattle and Tampa, Fla.; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Contacts:

Angie Yang
SVP, Director of Investor Relations & Corporate Communications
213-251-2219
[email protected]


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