Hope Bancorp, Inc. · NASDAQ:HOPE
Hope Bancorp — Q1 2023 Earnings Presentation
20 slides from Hope Bancorp's earnings presentation, Apr 25, 2023
Slide 1: First Quarter 2023 Earnings Conference Call
2023 First Quarter Earnings Conference Call Tuesday, April 25, 2023
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 Hope Bancorp, Inc. (the “Company”) that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, a
Slide 3: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights Total Risk-Based Capital Strong Capital & Available Liquidity 12.25% • 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 $13.26 at 3/31/23, both +2% Q-o-Q (as of 3/31/23)
Slide 4: Strong Capital Ratios
Strong Capital Ratios • Holding Company Common Equity Tier 1 Common Equity Tier 1 Capital Ratio Tangible Common Equity Ratio1 and Total Risk-based Capital ratios increased Q-o-Q. All regulatory capital ratios meaningfully above requirements for “well- capitalized” financial institutions. Holding Com
Slide 5: Strong Balance Sheet & Liquidity Position
Strong Balance Sheet & Liquidity Position ($ Billions) • Significant increase in cash and cash equivalents to $2.2B at 3/31/23, Cash and Cash up from $507MM at 12/31/22, reflected conservative approach to Equivalents Unpledged Fed Fund Lines $2.2 liquidity risk management, in response to the banking
Slide 6: Granular Deposit Base
Granular Deposit Base Deposit Composition by Deposit Type Granular Deposit Portfolio Consumer Noninterest Bearing 34% Time Deposits Demand Deposits 43% 28% $15.8B $15.8B Total Deposits Total Deposits (as of 3/31/23) (as of 3/31/23) Commercial Savings Money Market and 66% 2% Interest Bearing Demand 2
Slide 7: New Loan Production
New Loan Production New Loan Originations Funded Average Yield on New Loan Production ($ Millions) $1,349 $1,286 7.53% 68 6.71% $1,026 184 5.37% 4.69% 104 747 $793 3.82% 557 4.26% 344 37 $569 3.54% 432 18 2.35% 350 578 545 534 0.94% 324 0.29% 201 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 CRE
Slide 8: Loan Portfolio Composition
Loan Portfolio Composition • Loan portfolio well-diversified across major loan types of CRE, C&I, owner-occupied CRE, and $4.8B $0.9B consumer. Consumer portfolio predominantly Avg Size: $1.6MM Avg Size: $0.6MM residential mortgage C&I Consumer 32% 6% • Total loans receivable of $15.1B at 3/31/23: -
Slide 9: Diversified Commercial Real Estate Portfolio
Diversified Commercial Real Estate Portfolio As of 3/31/23 Average Portfolio Weighted CRE Portfolio Loan Size As a % of As a % of Average All Others by Property Type CRE Total Size LTV 1 ($ Millions) ($ Millions) Office 10% Portfolio Portfolio 5% Multi-tenant Retail $ 1,818 19% 12% $ 2.2 51.7% Singl
Slide 10: Granular Commercial Real Estate Portfolio with Low LTV
Granular Commercial Real Estate Portfolio with Low LTV Total CRE: Distribution by LTV (ex. SBA) CRE Portfolio by Size Segment > 75%: Average Loan Size Balance Weighted > 65% - 70%: > 70% - 75%: 1% # Loans Loan Size (as of 3/31/23) ($ Millions) Average LTV 1 15% 6% ($ Millions) > $30MM $ 328 8 $ 40.7
Slide 11: Net Interest Income & Margin
Net Interest Income & Margin Net Interest Income (“NII”) & Net Interest Margin (“NIM”) Q-o-Q Change in Net Interest Margin ($ Millions) Q-o-Q change $153 +33bps +7bps -2bps -72bps $151 Loan balance 3.36% Inv securities $142 -2% Loan yield yield increase + decrease 3.02% +8% cash balance increase $13
Slide 12: Average Loan Growth Trends & Yields
Average Loan Growth Trends & Yields Average Loans Receivable Average Loan Yield Relative to Fed Funds ($ Billions) 15.75 $15.4 Q-o-Q change $15.2 5.75% 5.36% 15.25 $14.9 -1% 4.69% 14.75 +3% 4.65% $14.3 3.88% 4.06% 3.82% 14.25 +4% $13.9 13.75 2.35% +3% 13.25 0.94% 0.29% 12.75 12.25 1Q22 2Q22 3Q22 4Q2
Slide 13: Average Deposit Growth Trends & Costs
Average Deposit Growth Trends & Costs Average Deposits Average Cost of Deposits ($ Billions) Q-o-Q change 4.69% $15.4 $15.5 $15.8 $14.9 $14.8 3.82% +0% +2% 4.7 -1% +4% 5.2 5.7 5.7 5.7 2.35% 3.42% 10.3 11.1 0.94% 2.44% 2.41% 9.3 9.1 9.7 1.62% 0.29% 1.25% 0.33% 0.54% 0.79% 0.24% 0.38% 1Q22 2Q22 3Q22 4
Slide 14: Noninterest Income
Noninterest Income Noninterest Income ($ Millions) • 1Q23 noninterest income of $11MM, -9% Q-o-Q – Q-o-Q growth in deposit service fees and net gains on $13.2 $12.7 $13.4 SBA loan sales $12.1 $11.0 – Other income and fees decreased Q-o-Q 4.8 4.5 8.0 • Sold $41MM of the guaranteed portion of SBA 7(a)
Slide 15: Noninterest Expense & Efficiency
Noninterest Expense & Efficiency Noninterest Expense Efficiency Ratio & ($ Millions) Noninterest Expense to Average Assets $90.4 $83.9 $84.5 62.4% $80.4 $75.4 18.8 15.8 17.5 18.1 14.1 1.8 1.5 1.6 1.6 12.6 1.6 11.6 12.1 51.5% 52.1% 52.0% 12.0 50.4% 12.0 1.89% 53.2 52.7 57.2 47.7 51.1 1.80% 1.82% 1.79
Slide 16: Asset Quality Metrics
Asset Quality Metrics Allowance for Credit Losses (“ACL”) Nonperforming Assets (“NPA”) Ratio • Asset quality continues to be healthy & Coverage Ratio ($ Millions, except ratios) • Q-o-Q build in allowance for credit losses to $164 $164MM. Coverage ratio increased to 1.09% at $161 $162 3/31/23, up fr
Slide 17: Management Outlook
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
Slide 18: First Quarter Q&A
2023 First Quarter Earnings Conference Call Q&A 18
Slide 19: Appendix
Appendix 19
Slide 20: 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 most directly comparable GAAP to non-GAAP financial measures utilized by management is provide