Slide 1: Second Quarter 2023 Earnings Conference Call
2023 Second Quarter Earnings Conference Call Monday, July 24, 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: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights Total Capital & TCE Ratio Strong Capital & Liquidity at 6/30/23 • Tangible common equity (“TCE”) ratio1 was 8.04% at 6/30/23, +13 bps Q-o-Q 12.64%/8.04% • Company’s total capital ratio was 12.64% at 6/30/23, +39 bps Q-o-Q • Avail. borrowing capacity, cash & equivalents,
Slide 4: Strong Capital Ratios
Strong Capital Ratios • Risk-based Capital ratios increased Q-o-Q. All regulatory capital ratios meaningfully above Common Equity Tier 1 Capital Ratio Tangible Common Equity Ratio1 requirements for “well-capitalized” financial institutions. Holding Company total capital ratio of 12.64% and Bank-leve
Slide 5: Strong Balance Sheet & Liquidity Position
Strong Balance Sheet & Liquidity Position Cash and Cash Unpledged • Cash and cash equivalents increased to $2.3B at 6/30/23, up Equivalents Securities from $2.2B at 3/31/23. Reflects continued conservative $2.3 Bn $0.1 Bn approach to liquidity risk management, in response to the Fed Fund Lines banki
Slide 6: Diverse & Granular Deposit Base
Diverse & Granular Deposit Base Deposit Composition by Product Type Deposit Composition by Segment Consumer Noninterest Bearing 34% Demand Deposits Time Deposits 27% 45% $15.6B $15.6B Total Deposits Total Deposits (at 6/30/23) (at 6/30/23) Commercial Money Market and 66% Savings Deposits Interest Be
Slide 7: New Loan Production
New Loan Production New Loan Originations Funded Average Yield on New Loan Production ($ Millions) 8.37% $1,349 $1,286 7.53% 68 6.71% 184 5.16% 5.37% 4.69% $793 747 4.26% 3.82% 557 37 $569 $491 2.35% 432 18 19 350 545 332 0.94% 534 324 201 140 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Commer
Slide 8: Well-Balanced Loan Portfolio
Well-Balanced Loan Portfolio $0.9B • Loan portfolio well-diversified across major loan Avg Size: $0.6MM $1.3B types of nonowner-occupied CRE, C&I, owner- Residential Avg Size: $2.2MM occupied CRE, multifamily residential (“MFR”), Mortgage Multifamily and residential mortgage & Other Residential 6% 8
Slide 9: Diversified CRE Portfolio with Low LTVs
Diversified CRE Portfolio with Low LTVs Total CRE: Distribution by LTV (ex. SBA) $9.2B > 55% - As a % of CRE Portfolio Avg Loan Size: (at 6/30/23) 60%: Total Loans: Weighted Avg LTV1: > 60% - 65%: > 65% - 70%: 12% 8% 5% Multi-tenant Retail $2.3MM > 50% - 55%: 12% 13% > 70%: 44.3% $9.2B $1,778MM 3% I
Slide 10: Granular CRE Portfolio, Diversified by Submarket
Granular CRE Portfolio, Diversified by Submarket CRE Portfolio by Size Segment CRE Portfolio by Geographic Submarket ($ Millions) Average Other States Loan Size Balance Weighted # Loans Loan Size LA Fashion District (at 6/30/23) ($ Millions) Average LTV 1 Illinois ($ Millions) Gateway Cities > $30MM
Slide 11: Net Interest Income & Margin
Net Interest Income & Margin Net Interest Income & Net Interest Margin (“NIM”) Q-o-Q Change in Net Interest Margin ($ Millions) Q-o-Q change $153 $151 +15bps +6bps -7bps -33bps $142 +20bps -2% 3.02% Other Other -33bps +8% Growth in earning balance 2.70% $134 Loan yield avg int-earn Higher $131 asset
Slide 12: Average Loan Growth Trends & Yields
Average Loan Growth Trends & Yields Average Loans Receivable Average Loan Yield Relative to Fed Funds ($ Billions) 15.75 $15.4 5.99% Q-o-Q change $15.2 5.75% 15.25 $15.1 5.36% $14.9 -1% 14.75 +3% -1% 4.65% 5.16% 4.06% 4.69% $14.3 14.25 +4% 3.82% 13.75 2.35% 13.25 0.94% 12.75 12.25 2Q22 3Q22 4Q22 1Q2
Slide 13: Average Deposit Growth Trends & Costs
Average Deposit Growth Trends & Costs Average Deposits Average Cost of Deposits (“COD”) Relative to Fed Funds ($ Billions) Q-o-Q change $15.4 $15.5 $15.8 $15.8 5.16% $14.8 4.69% +0% +2% 4.7 -0% 4.4 +4% 5.7 5.2 3.82% 5.7 2.35% 3.87% 11.1 11.4 3.36% 9.7 10.3 2.79% 9.1 0.94% 2.41% 2.37% 1.62% 1.25% 0.3
Slide 14: Noninterest Income
Noninterest Income Noninterest Income ($ Millions) • 2Q23 noninterest income of $17MM, vs. $11MM in 1Q23 $17.0 – Other income and fees included a $6MM cash distribution from an investment in an affordable $12.7 $13.4 housing partnership, which sold some of its properties $12.1 $11.0 – Other income i
Slide 15: Noninterest Expense & Efficiency
Noninterest Expense & Efficiency Noninterest Expense Efficiency Ratio & ($ Millions) Noninterest Expense to Average Assets $90.4 $87.3 $83.9 $84.5 62.4% $80.4 18.8 17.9 59.1% 17.5 18.1 15.8 1.8 1.5 1.6 1.6 4.7 12.6 12.0 11.6 12.1 12.4 52.1% 52.0% 50.4% 1.89% 53.2 52.7 57.2 52.3 51.1 1.80% 1.82% 1.79
Slide 16: Healthy Asset Quality
Healthy Asset Quality Allowance for Credit Losses & Coverage Ratio Nonperforming Assets Ratio • ACL built to $173MM at 6/30/23, up from ($ Millions) $164MM. Coverage ratio increased to 1.16% at 6/30/23, up from 1.09% at $173 3/31/23 $161 $162 $164 1.16% • Net recoveries of $552,000 in 2Q23, $152 equ
Slide 17: Management Outlook for 2H 2023
Management Outlook for 2H 2023 Loan Growth: expecting generally stable loan balances in second half of 2023, relative to 6/30/23 Net Interest Income: expecting continued moderate NII pressure in 2H 2023 in a higher-for-longer interest rate environment Noninterest Income: expecting essentially
Slide 18: Second Quarter Earnings Conference Call Q&A
2023 Second 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 and the Bank’s financial performance and in response to market participant interest. Reconciliations of the most directly comparable GAAP to non-GAAP financial measures utilized by managem