Hope Bancorp, Inc. · NASDAQ:HOPE
Hope Bancorp — Q4 2020 Earnings Presentation
17 slides from Hope Bancorp's earnings presentation, Jan 27, 2021
Slide 1: 2020 Fourth Quarter Earnings Conference Call
2020 Fourth Quarter Earnings Conference Call Wednesday, January 27, 2021 1
Slide 2: Forward Looking Statements & Additional Disclosures
Forward Looking Statements & Additional Disclosures This presentation may contain statements regarding future events or the future financial performance of the Company that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
Slide 3: Q4 2020 Financial Highlights
Q4 2020 Financial Highlights Net interest income before provision for credit loss increased 3% to $120.8 million from $117.6 million for 3Q20, largely reflecting benefit of lower cost of deposits Net Net interest margin expanded 11bps Q-o-Q benefiting from continued reduction in deposit costs an
Slide 4: Loan Production & Portfolio Trends
Loan Production & Portfolio Trends New Loan Originations Funded ($ millions) New loan originations funded of $844 million resulted in 3.4% growth in loans receivable Q-o-Q, or 13.5% annualized 4.37% 3.98% New loan originations included $107 million funded for 3.39%1 3.27% new warehouse mortgage
Slide 5: Phase II COVID-19 Loan Modifications
Phase II COVID-19 Loan Modifications • Phase II modifications granted as of 12/31/2020 totaled $1.79 billion, or 13.2% of the total loan portfolio • Additional documentation, covenants, and in some cases collateral required to qualify for Phase II modifications ($ millions) % of Modified Loans All L
Slide 6: COVID-19 Impacted Portfolios - Hotel/Motel CRE
COVID-19 Impacted Portfolios - Hotel/Motel CRE - Hotel/Motel CRE Property Characteristics Hotel/Motel CRE Modification Type • Majority of Hotel/Motel properties are limited service facilities 12M Pmt Def, Other, 2.70% • Less impacted by lockdowns than full-service hotel properties 4.06% 12M Int Only
Slide 7: COVID-19 Impacted Portfolios - Retail CRE
COVID-19 Impacted Portfolios - Retail CRE - Retail CRE Property Characteristics Retail CRE Modification Type • Retail portfolio largely represents “strip mall” type of properties (not shopping malls) Other, 1.49% 12M Hybrid, 9M Hybrid, 3.02% • Majority of tenants comprised of service oriented busine
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin Average Loan Yield & Average 1M LIBOR Rate Net Interest Income & NIM ($ millions) 5.04% 5.06% $119.3 $120.8 4.23% 4.20% $113.5 $117.6 4.03% $109.8 1.79% 3.16% 3.31% 2.91% 2.79% 3.02% 1.41% 0.35% 0.15% 0.16% 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Net Interest
Slide 9: Noninterest Income
Noninterest Income Noninterest Income Noninterest income decreased to $11.4 million ($ millions) Q-o-Q largely reflecting a $7.5 million net gain on sale of available-for-sale investment $17.5 securities in 3Q20 vs. zero in 4Q20 $1.7 Excluding securities gains in 3Q20, $13.0 $13.3 noninterest in
Slide 10: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency ($ millions) Breakdown of Noninterest Expense & FTE Efficiency Ratio & Noninterest Expense to Average Assets $72.1 $73.4 $71.1 55.68% 55.37% $70.4 54.42% 54.31% 53.77% $67.0 $7.3 $6.3 $5.6 $7.6 $1.6 $2.5 $7.0 $3.6 $0.8 $1.6 $2.4 $5.9 $3.3 $3.6 $1.2 $2.7 $1.2 $1.2 $
Slide 11: Deposit Trends
Deposit Trends Q-o-Q growth annualized Deposit Composition ($ billions) Noninterest bearing demand deposits increased 7% Q-o-Q and increased to 34% of total deposits from 32% as of 9/30/20 $14.12 $14.01 $14.33 $12.84 MMA & NOW accounts increased 10% Q-o-Q and increased to $12.53 +40% -3% +9% +10
Slide 12: Asset Quality
Asset Quality Nonperforming Assets Provision for Credit Losses & ($ millions) ($ millions) Net Charge Offs $139.9 $147.6 $143.3 $28.0 $27.5 $122.1 $21.0 $124.6 $23.0 $20.1 $22.0 $24.1 $126.6 $18.4 0.11% $17.5 $116.8 $123.2 0.02% $106.2 $98.0 0.12% 0.87% 0.86% 0.84% 0.02% 0.78% 0.74% 0.02% $1.0 4Q19
Slide 13: Allocation of Allowance by Loan Type
Allocation of Allowance by Loan Type Allowance of Loan Allocation for Credit Losses ($ thousands) & Lease Losses Quarter-over- for Current Expected Credit Loss (CECL) (ALLL) Quarter Change 4Q20 from 3Q20 Dec 31, 2019 Sep 30, 2020 Dec 31, 2020 Coverage Coverage Coverage Coverage Loan Type Amount Amou
Slide 14: Strong Capital & Liquidity Positions
Strong Capital & Liquidity Positions Sufficient Liquidity Sources Robust Capital Position 13.19% 12.87% 12.09% 11.64% Available 11.36% 10.94% 12/31/2020 ($ Thousands) Borrowing 10.22% 10.02% Capacity 10.00% FHLB Remaining Capacity $ 3,918,238 8.00% 6.50% FRB Discount Window $ 616,001 5.00% Unsecured
Slide 15: 2020 Achievements
2020 Achievements Enhanced Deposit Franchise CECL Implementation Stronger, Expense & Reserve Build More Management Diversified, Relationship Bank Profitable Strong Capital Organic Loan Management Growth 15
Slide 16: Near-Term Outlook
Near-Term Outlook Mid- to high-single digit loan growth projected for 2021 driven by growth in non-CRE loans Higher trending gain on sale income from growth in residential mortgage origination volumes Continuation of cost management in line with current business environment Net interest marg
Slide 17: 2020 Fourth Quarter Earnings Conference Call Q&A
2020 Fourth Quarter Earnings Conference Call Q&A 17