Hope Bancorp, Inc. · NASDAQ:HOPE
Hope Bancorp — Q3 2024 Earnings Presentation
19 slides from Hope Bancorp's earnings presentation, Oct 28, 2024
Slide 1: Third Quarter 2024 Earnings Conference Call
2024 Third Quarter Earnings Conference Call October 28, 2024
Slide 2: Forward Looking Statements & Additional Disclosures
Forward Looking Statements & Additional Disclosures This presentation contains statements regarding future events or the future financial performance of Hope Bancorp, Inc. (“Company”), including regarding its pending merger with Territorial Bancorp Inc. (“Territorial”), that constitute forward-looki
Slide 3: Q3 2024 Financial Overview
Q3 2024 Financial Overview Total Capital & TCE Ratio Strong Capital & Liquidity at 9/30/24 • Total capital ratio was 14.80% at 9/30/24, +39bps QoQ. Record risk-based capital ratios since merger with Wilshire 14.80% / 10.08% • Tangible common equity (“TCE”) ratio(1) was 10.08% at 9/30/24, +36bps QoQ
Slide 4: Strong Capital Ratios
Strong Capital Ratios • Capital ratios increased QoQ: All regulatory capital ratios meaningfully above requirements Common Equity Tier 1 Capital Ratio Tangible Common Equity (“TCE”) Ratio(1) for “well-capitalized” financial institutions • Highest risk-based capital ratios for Hope Bancorp since merg
Slide 5: Diverse & Granular Deposit Base
Diverse & Granular Deposit Base Deposit Composition by Product Type Deposit Composition by Customer Type 3% 2% 3% 2% 3% 3% Noninterest Bearing 10% 10% 9% 7% 14% 12% Demand Deposits 25% Time Deposits 35% 37% 38% 39% 39% 34% $14.7B 41% Total Deposits 51% 49% 51% 50% 50% 49% (at 9/30/24) Money Market,
Slide 6: Well-Balanced Loan Portfolio
Well-Balanced Loan Portfolio $0.03B; <1% $1.1B Loans Held for Sale • Loan portfolio well-diversified across Avg Size: $0.6MM $1.2B major loan types of nonowner-occupied Residential CRE, C&I, owner-occupied CRE, multifamily Mortgage & Multifamily Avg Size: $2.3MM Residential residential (“MFR”), and
Slide 7: Diversified CRE Portfolio with Low LTVs
Diversified CRE Portfolio with Low LTVs Total CRE: Distribution by LTV (excl. SBA) $8.6B CRE Portfolio > 55% - > 60% - As a % of Avg Loan Size: > 65% - 70%: (at 9/30/24) 60%: 65%: Total Loans: Weighted Avg LTV(1): 5% 10% 7% Multi-tenant Retail $2.4MM 12% > 50% - 55%: $1,641MM 42.5% > 70%: Industrial
Slide 8: Granular CRE Portfolio, Diversified by Submarket
Granular CRE Portfolio, Diversified by Submarket CRE Portfolio by Size Segment CRE Portfolio by Geographic Submarket ($ Millions) # of Average Weighted Other States Loan Size Balance LA Fashion District (at 9/30/24) ($ Millions) Loans Loan Size Average LTV(1) ($ Millions) Illinois Gateway Cities > $
Slide 9: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin Net Interest Income & Net Interest Margin QoQ Change in Net Interest Margin $135 $126 +4bps -8bps $115 2.62% +1bps $106 $105 Change in Change in -4bps -4bps cost and 2.55% yield & Change in balances of balances of cost and Change in other earning borrowings
Slide 10: Average Loans & Deposits, Yields & Rates
Average Loans & Deposits, Yields & Rates Average Loans Average Loan Yield Relative to Fed Funds Rate ($ Billions) 6.27% 6.24% 6.25% 6.20% 6.16% $14.6 $14.1 $13.7 $13.6 $13.6 16.00 14.00 12.00 10.00 5.43% 5.50% 5.50% 5.50% 5.43% 8.00 6.00 4.00 2.00 0.00 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q
Slide 11: Noninterest Income
Noninterest Income Noninterest Income ($ Millions) • 3Q24 noninterest income of $12MM, up +7% from $11MM in 2Q24 $11.8 • Sold $41MM of the guaranteed portion of $11.1 SBA 7(a) loans during 3Q24 and recorded a net gain on sale of $3MM vs. $30MM $9.3 sold during 2Q24 for a net gain on sale of $8.3 $8.
Slide 12: Noninterest Expense & Efficiency
Noninterest Expense & Efficiency Noninterest Expense(1) Efficiency Ratio (excluding notable items) ($ Millions) GAAP Noninterest Expense $86.8 $99.2 $84.8 $81.0 $81.3 73.4% 68.8% 69.3% 69.7% $86.3 $84.1 $82.4 $79.1 $79.8 22.5 60.4% 68.4% 24.2 22.7 22.6 23.3 66.8% 67.7% 12.8 62.2% 12.5 12.1 12.4 12.3
Slide 13: Asset Quality Metrics
Asset Quality Metrics Allowance for Credit Losses & Coverage Ratio Nonperforming Assets Ratio ($ Millions) • Allowance for credit losses (“ACL”) totaled $153MM at 9/30/24 $159 $159 $159 $156 • ACL coverage ratio: 1.13% of loans $153 receivable as of 9/30/24, vs. 1.15% as 1.15% 1.16% 1.15% 1.13% 0.60
Slide 14: Management's Financial Outlook for 4Q24 vs. 3Q24
Management’s Financial Outlook for 4Q24 * vs. 3Q24 3Q24 Outlook for 4Q24 * Comments actual vs. 3Q24 actual ($ Millions) ▪ Continued strength in residential mortgage and SBA loan Average Loans $ 13,575 Low single-digit % growth QoQ production ▪ Improving loan pipelines in C&I and CRE ▪ Continued depo
Slide 15: Appendix
Appendix 15
Slide 16: Summary Balance Sheet
Summary Balance Sheet QoQ YoY ($ in millions, except per share data) 9/30/24 6/30/24 9/30/23 % change % change Cash and due from banks $ 680.9 $ 654.0 4.1 % $ 2,500.3 (72.8)% Investment securities 2,177.3 2,172.9 0.2 % 2,260.8 (3.7)% Federal Home Loan Bank (“FHLB”) stock and other investments 57.2 6
Slide 17: Summary Income Statement
Summary Income Statement QoQ YoY ($ in thousands, except per share and share data) 3Q24 1Q24 3Q23 % change % change Net interest income before provision for credit losses $ 104,809 $ 105,860 (1)% $ 135,378 (23)% Provision for credit losses 3,280 1,400 134 % 16,862 (81)% Net interest income after pro
Slide 18: Appendix: Non-GAAP Financial Measures Reconciliation
Appendix: Non-GAAP Financial Measures Reconciliation Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measu
Slide 19: Appendix: Non-GAAP Financial Measures Reconciliation (cont'd)
Appendix: Non-GAAP Financial Measures Reconciliation (cont’d) Management reviews select non-GAAP financial measures in evaluating the Company’s and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financ