Hope Bancorp, Inc. · NASDAQ:HOPE
Hope Bancorp — Q3 2019 Earnings Presentation
12 slides from Hope Bancorp's earnings presentation, Oct 22, 2019
Slide 1: 2019 Third Quarter Earnings Conference Call
2019 Third Quarter Earnings Conference Call Tuesday, October 22, 2019 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: Q3 2019 Financial Highlights
Q3 2019 Financial Highlights Net income of $42.6 million, or $0.34 per diluted common share Earnings & Moderating margin compression with net interest margin down 6bps Q‐o‐Q to 3.25% from 8bps Net compression in Q2; $1.4 million reduction in accretion income on purchased loans reduced NIM by Pro
Slide 4: Loan Production & Portfolio Trends
Loan Production & Portfolio Trends New Loan Originations Funded New loan originations funded increased to $694 million 5.52% 5.46% resulting in 1% net loan growth of $128 million ($ millions) 5.22% 4.97% 4.64% 4.79% 4.72% Aggregate payoffs and paydowns remained at higher‐ 4.40% 4.42% than‐usual
Slide 5: Net Interest Income and Margin
Net Interest Income and Margin Key Net Interest Income Drivers Net Interest Income & NIM Average Loans & Yield ($ millions) ($ billions) $126.4 $12.1 $11.9 $12.0 $11.9 $123.1 $11.8 $123.3 $122.8 $121.9 $120.1 $11.4 5.32% $119.6 $11.1 5.31% 5.27% $10.9 5.21% $117.2 $116.3 $10.7 5.16% 5.16% 3.83% 3.84
Slide 6: Noninterest Income
Noninterest Income Noninterest Income Noninterest income increased to $13.0 million from ($ millions) $19.9 $12.3 million in 2Q19 reflecting: Expanded interest rate swap program drove higher swap fee income linked quarter $16.3 $16.5 Service fees on deposit accounts up 6% due to higher $15.3 c
Slide 7: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense and Efficiency Ratio Breakdown of Noninterest Expense and FTE ($ millions) ($ millions) $73.0 $71.6 $70.8 $71.4 $68.5 $67.5 $70.2 $70.0 $61.8 $33.3 $31.1 $32.1 $29.1 $30.5 $33.6 $30.4 $28.4 $25.9 54.06% 55.11% 54.15% 51.12% 51.87% 52.57% 48.92%
Slide 8: Deposit Trends
Deposit Trends Deposit Composition Total end‐of‐period deposits increased 1% Q‐o‐Q ($ billions) Favorable shift in deposit mix continued with increases in lower‐ $12.23 $11.51 $11.73 $12.05 $12.16 $12.25 $12.17 cost deposits and decreases in time deposits $10.99 $10.85 – 1% increase in nonintere
Slide 9: Asset Quality
Asset Quality Nonperforming Assets Provision Expense & Net Charge Offs ($ millions) ($ millions) $7.3 $137.9 $138.5 $5.4 $125.7 $125.2 $129.1 $8.3 $118.2 $6.3 $17.2 $10.8 $8.7 $113.0 $111.66 $129.6 $9.0 $7.8 $132.2 $5.6 $96.7 $3.6 0.22% $114.4 $120.4 $2.8 $3.0 $108.5 $109.2 $105.2 $106.0 $19.4 $2.5
Slide 10: CECL Preliminary Impact Summary
CECL Preliminary Impact Summary • The Bank is on‐track to adopt CECL on Jan 1, 2020 • Preliminary CECL allowance expected to increase by approximately 30% ‐ 40% compared to incurred loss method • Key drivers for CECL: − Large increase for longer duration CRE and Consumer loans − No material differen
Slide 11: Near-Term Outlook & Strategies
Near-Term Outlook & Strategies Continuation of positive trends from first nine month of 2019 Favorable shift in mix of deposits to lower‐cost core deposits and better deposit cost management Proactive identification and management program leading to improving asset quality trends Well‐balanc
Slide 12: 2019 Third Quarter Earnings Conference Call Q&A
2019 Third Quarter Earnings Conference Call Q&A 12