Hope Bancorp, Inc. · NASDAQ:HOPE
Hope Bancorp — Investor Presentation (November 2022)
28 slides from Hope Bancorp's investor presentation, Nov 8, 2022
Slide 1: Corporate Presentation Fourth Quarter 2022
Corporate Presentation Fourth Quarter 2022
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 cons titute forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Sectio
Slide 3: Presentation Index
Presentation Index Company Overview Slide 4 Financial Highlights & Earnings Performance Slide 8 Loan Trends Slide 14 Asset Quality Trends Slide 19 Deposit Trends Slide 21 Strong Franchise Value Slide 23 Appendix Slide 27 3
Slide 4: Company Overview
Company Overview 4
Slide 5: Company Profile Today
3rd largest Asian American bank in the U.S.1 6th largest bank head quartered in Los Angeles1 95th largest financial institution in the U.S.2 24th largest SBA lender in the country by volume3 Only Korean American bank with presence in Korea Only Korean American bank (formerly known as BBCN Bank) ever
Slide 6: National Geographic Presence
National Geographic Presence Nationwide footprint with meaningful presence, providing full banking services to the largest Asian American communities in the U.S. Southern California 27 Branches, 1 Residential Mortgage LPO Northern California 2 Branches, 1 SBA LPO, 1 Commercial Lending LPO Seattle 3
Slide 7: Corporate Social Responsibility Highlights
Corporate Social Responsibility Highlights 1 OUT OF 2 Bank of Hope branches located in low-to-moderate income areas 459 HOURS 459 hours of CRA-reportable volunteer hours in 2021 (previously averaged 1,000 hours/year) $3.99 BILLION loans funded in 2021 $663 MILLION CRA-reportable small business lendi
Slide 8: Financial Highlights & Earnings Performance
Financial Highlights & Earnings Performance 8
Slide 9: Record Loan Production, Improved Asset Quality & Enhanced Profitability
Record Loan Production, Improved Asset Quality & Enhanced Profitability Earnings & Profitability • Net interest income increased 8% Q-o-Q and 18% Y-o-Y, reflecting increased average loans receivable and loan yields compounded with higher net interest margin • Net interest margin expanded 13bps Q-o-Q
Slide 10: Net Interest Income and Margin
Net Interest Income and Margin 10 • Net interest income before provision for credit losses increased 8% Q-o-Q and 18% Y-o-Y • Increase attributed to higher average loans receivable and loan yields, combined with net interest margin expansion Net Interest Income & NIM ($ Millions) $130.3 $133.3 $133.
Slide 11: Fixed/Variable Rate Breakdown of Loans
95% 4% 99% 43% 5% 96% 100% 1% 57% 0% 20 % 40 % 60 % 80 % 10 0% 12 0% CRE Commercial SBA Mortgage Consumer Total Origination Fixed/Hybrid Variable Loan Portfolio Interest Rate Breakdown Variable 46% @6.00% 2 Fixed 25% @3.91% 2 Hybrid 1 29% @3.98% 2 Fixed/Variable & Average Rate of New Loan Originatio
Slide 12: Noninterest Income
Noninterest Income 12 • Noninterest income increased 5% Q-o-Q to $13.4 million vs. $12.7 million in 2Q22 – Primary customer-related service fees increased 10% Q-o-Q – Other income and fees increased 94% Q-o-Q, largely reflecting an increase in swap fee income and a reduction in fair value losses on
Slide 13: Noninterest Expense and Efficiency Ratio
• Noninterest expense increased to $83.9 million from $80.4 million in 2Q22 • Q-o-Q increase in salaries and benefits for 3Q22 largely reflects full impact of FTE count increase in prior quarter, and higher incentive compensation accruals resulting from strong financial performance • Q-o-Q increase
Slide 14: Loan Trends
Loan Trends 14
Slide 15: Loan Production & Portfolio Trends
Loan Production & Portfolio Trends New Loan Originations Funded ($ Millions) $590 $623 $578 $545 $534 $344 $539 $344 $557 $747 $75 $81 $104 $184 $68 3Q21 4Q21 1Q22 2Q22 3Q22 $1,243 $1,026 $1,286 $1,009 $1,349 CRE C&I Mortgage and Consumer • Total loans receivable increased 6.5% Q-o-Q, or 11% year-to
Slide 16: Loan Portfolio by Region
Loan Portfolio by Region 16 1986, Southern California Founded by Los Angeles-based Korean American investors 1997, Northern California Expanded de novo into Northern California; Acquired Asiana Bank in 2003 1998, Eastern Region Expanded into New York/New Jersey through multiple acquisitions 2004, Mi
Slide 17: Loan Portfolio Composition
Loan Portfolio Composition $15.49 Billion (as of 9/30/2022) 20% CRE: Owner-occupied 42% CRE: Nonowner-occupied 33% C&I 5% Consumer CRE Portfolio Outstanding $9,504.9MM Average Size $1,834M Average Yield 4.52% C&I Portfolio Outstanding $5,124.4MM Average Size $1,454M Average Yield 5.74% Consumer Port
Slide 18: Transformation to Lower-Risk Loan Portfolio
Transformation to Lower-Risk Loan Portfolio 71% 22% 7% 61% 33% 6% $15.49 B (as of 9/30/2022) $12.10 B (as of 9/30/2019) $9.50 Billion CRE Portfolio Retail – Multi 20% Industrial & Warehouse 13% Multi-family 13% Hotel & Motel 11% Gas Station & Car Wash 11% Mixed Use 9% Retail – Single 8% All Other CR
Slide 19: Asset Quality Trends
Asset Quality Trends 19
Slide 20: Asset Quality
Asset Quality Nonperforming Assets ($ Millions) Total Criticized Loans ($ Millions) 20 $98.5 $109.2 $100.4 $108.6 $95.5 $15.2 $2.6 $2.0 $2.0 $1.5 0.64% 0.62% 0.58% 0.61% 0.51% 3Q21 4Q21 1Q22 2Q22 3Q22 NPLs OREO NPAs/Total Assets $306.8 $257.2 $167.0 $95.8 $79.4 $243.7 $242.4 $226.7 $244.7 $204.7 4.1
Slide 21: Deposit Trends
Deposit Trends 21
Slide 22: Deposit Trends
Deposit Trends 22 Deposit Composition ($ Billions) Deposit Cost Trend Average Deposits and Cost of Interest-Bearing Deposits ($ Billions) 0.27% 0.25% 0.24% 0.24% 0.23% 0.23% 0.23% 0.23% 0.25% 0.26% 0.32% 0.41% 0.56% 0.79% 1.02% $9.1 $9.1 $9.3 $9.1 $9.7 $5.8 $6.0 $5.7 $5.7 $5.7 0.42% 0.39% 0.38% 0.54
Slide 23: Strong Franchise Value
Strong Franchise Value 23
Slide 24: The Representative Bank of the Korean American Community
Bank of Hope 47% Bank of Hope Hanmi Bank Metro City Bank Pacific City Bank Commonwealth Bus. Bank Open Bank First IC Bank US Metro Bank PromiseOneBank NewBank New Millennium Bank UniBank Noah Bank Bank of Hope 48% Bank of Hope 47% The Representative Bank of the Korean American Community Total Assets
Slide 25: Strong Capital Position & Returns
12.13% 10.32% 10.69% 11.33% $12.80 11.72% 10.25% 10.32% 10.92% $12.60 Total Risk-Based Capital Ratio Tier 1 Leverage Ratio Tier 1 Common Equity Ratio Tier 1 Capital Ratio Tangible Common Equity per Share 6/30/2022 9/30/20222 $17.3 $16.8 $16.8 $16.9 $16.7 $47.2 $2.8 $14.7 3Q21 4Q21 1Q22 2Q22 3Q22 Div
Slide 26: 2022 Full-Year Outlook
2022 Full-Year Outlook Loan Growth: A greater level of confidence for achieving the higher end of 2022 full-year guidance of high single-digit to low double-digit loan growth, excluding SBA PPP Noninterest Expenses: Noninterest expense to average assets expected to be approximately 1.75%- 1.78%
Slide 27: Appendix
Appendix 27
Slide 28: Appendix: Non-GAAP Financials
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 GAAP to non-GAAP financial measures utilized by management is provided below. 28 Pre-provision