Slide 1: 2020 Second Quarter Earnings Conference Call
2020 Second Quarter Earnings Conference Call Friday, July 31 2020 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: Q2 2020 Financial Highlights
Q2 2020 Financial Highlights Net income of $26.8 million, or $0.22 per diluted common share, compared with $26.0 million, or Net $0.21 per diluted common share for Q1 2020 Provision for credit losses of $17.5 million, vs. $28.0 million for Q1 2020 Income Net interest income before provision de
Slide 4: Loan Production & Portfolio Trends
Loan Production & Portfolio Trends New Loan Originations Funded 5.46% New loan originations funded of $832 million 4.72% resulted in 2.3% growth in loans receivable Q‐o‐Q, 4.37% 3.98% or 9% annualized 3.39%1 ($ millions) $847.6 $832.0 New loans included $480 million of SBA PPP $69 $74 originatio
Slide 5: PPP Loan Originations
PPP Loan Originations ($ thousands) $ Amount # Loans Lender’s Fees 63,036 13% 2,850 60% 63,818 13% 892 19% 96% 5% $13,612 74,657 16% 529 11% 70,555 15% 275 6% 96,082 20% 171 4% $3% <5% $4,583 56,692 12% 43 1% 1% 49,111 10% 17 0% $491 Total Balance $473,9501 (Avg $99,215) 4,777 $18,686 1 Reflects tot
Slide 6: COVID-19 Loan Modifications
COVID-19 Loan Modifications ($ thousands) Modification Type & Duration COVID‐19 Modifications % 2M‐3M Interest Only Amount # of Total Loans As of June 30, 2020 Modified $ 264.8 MM Modified Loans 8.5% Other1 4M‐6M Pmt Def $ 23.9 MM CRE $ 2,817,516 976 $ 8,686,939 32.4% $ 109.0 MM 0.8% 3.5% Retail $ 8
Slide 7: COVID-19 Impacted Portfolios
COVID-19 Impacted Portfolios Hotel/Motel CRE Properties Retail CRE Properties • Majority of Hotel/Motel properties are limited service facilities • Retail portfolio largely represents “strip mall” type of properties (not shopping malls) • Less impacted by lockdowns than full‐service hotel properties
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin Average Loan Yield & Average 1M LIBOR Rate Net Interest Income & NIM 5.32% ($ millions) 5.27% 5.04% 5.06% 4.23% $117.2 $116.3 $113.5 $119.3 2.44% $109.8 2.18% 1.79% 3.31% 3.31% 3.25% 3.16% 1.41% 2.79% 0.35% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Net Interest
Slide 9: Noninterest Income
Noninterest Income Noninterest Income Noninterest income decreased to $11.2 million ($ millions) Q‐o‐Q largely reflecting lower fee income due to $13.0 $13.0 $13.3 reduced business activity as a result of COVID‐ $12.3 19 lockdowns $11.2 $4.1 Decrease in service fees reflect reduction in $3.6 $4.
Slide 10: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense, Efficiency Ratio & Breakdown of Noninterest Expense & FTE ($ millions) NIE/AA $71.4 $70.0 $70.4 $72.1 $72.1 $67.0 $71.4 $70.0 $70.4 $67.0 $7.9 $6.4 $7.2 $8.8 55.68% 55.37% $1.6 $0.8 $1.6 $9.7 55.11% 54.15% 54.42% $5.2 $3.3 $6.0 $5.9 $2.8 $2.6 $
Slide 11: Deposit Trends
Deposit Trends Q‐o‐Q deposit growth annualized Total end‐of‐period (“EOP) deposits increased $1.3 billion, Deposit Composition equal to 10% Q‐o‐Q, or 40% annualized ($ billions) $14.12 $12.84 – Growth driven by 34% increase in noninterest bearing DDA Q‐ $12.53 $12.23 $12.53 +40% o‐Q or $1.0 billio
Slide 12: Asset Quality
Asset Quality Nonperforming Assets Provision Expense & Net Charge Offs ($ millions) ($ millions) $157.1 $139.9 $28.0 $21.0 $122.1 $111.7 $23.0 $96.7 $136.1 0.11% $5.6 $24.1 0.05% 0.06% $17.5 $116.8 0.02% $106.0 $19.4 $98.0 $77.4 0.87% 0.92% 0.02% 0.73% 0.78% 0.63% $1.2 $2.1 $1.0 2Q19 3Q19 4Q19 1Q20
Slide 13: Allowance for Credit Losses
Allowance for Credit Losses Moody’s Baseline Scenario Assumptions • U.S. Growth –GDP forecast to decline 33% annualized for 2Q20 and decline 5.6% for FY2020 $161,771 • Inflation – Y‐o‐Y growth in CPI inflation to decelerate ($ thousands) through remainder of 2020 and into 2021 • Employment – Unemplo
Slide 14: Allocation of Allowance by Loan Type
Allocation of Allowance by Loan Type Allowance of Loan & Allocation for Credit Losses ($ thousands) Lease Losses (ALLL) for Current Expected Credit Loss (CECL) January 1, 2020 December 31, 2019 CECL Adoption ‐ Day 1 March 31, 2020 June 30, 2020 Coverage Coverage Coverage Coverage Loan Type Amount Am
Slide 15: Strong Capital & Liquidity Positions
Strong Capital & Liquidity Positions Sufficient Liquidity Sources Robust Capital Position 13.23% 13.06% Available 12.19% 12.24% 11.44% 11.50% 6/30/2020 ($ Thousands) Borrowing 10.88% Capacity 10.08% FHLB Remaining Capacity $ 3,455,575 10.00% FRB Discount Window $ 726,639 8.00% Unsecured lines with o
Slide 16: Near-Term Outlook
Near-Term Outlook Meaningful loan growth for 2020 driven in 2H by corporate banking, warehouse line and residential mortgage refinancings Anticipating net interest margin expansion going forward as a result of stable loan yields, decreasing deposit costs and deployment of excess liquidity Resi
Slide 17: With HOPE, we'll get through this Together.
With HOPE, we'll get through this Together. ws a Hope Bancorp
Slide 18: 2020 Second Quarter Earnings Conference Call Q&A
2020 Second Quarter Earnings Conference Call Q&A 18