Slide 1: 2020 First Quarter Earnings Conference Call
2020 First Quarter Earnings Conference Call Wednesday, April 29, 2020 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: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights Net income of $26.0 million, or $0.21 per diluted common share, including $28.0 million provision Net for credit losses with the implementation of CECL Pre‐provision net interest income increased 5% Q‐o‐Q Income Earnings & PTPP income increased 8% Q‐o‐Q $26.0MM N
Slide 4: Loan Production & Portfolio Trends
Loan Production & Portfolio Trends New Loan Originations Funded New loan originations funded of $625 million ($ millions) 5.22% 5.52% 5.46% resulting in 2.5% growth in loans receivable Q‐o‐Q, 4.64% 4.79% 4.97% 4.72% or 10% annualized 4.37% 3.98% $847.6 Aggregate payoffs and paydowns remained at
Slide 5: COVID-19 Response
COVID-19 Response Pandemic Response Bank of Hope’s Pandemic Adjusted Branch Operations Response Plan activated mid‐ Jan well in advance of Reduction of operating hours Corporate/Non‐Retail Offices national declaration of COVID‐19 Pandemic Temporary closure of Pandemic Response Team branches
Slide 6: COVID-19 Customer Support
COVID-19 Customer Support SBA’s Paycheck Protection Commercial Borrowers Consumers Program (“PPP”) • Upon request, providing • Residential Mortgage – Upon • Began accepting applications short‐term modifications for request, providing temporary 4/6/20 COVID‐19 impacted forbearance plans for COVID‐ bo
Slide 7: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio (as of March 31, 2020) Comm'l Real Estate Loan by Property Type Top 7 Comm'l Real Estate Loan by State Special Use & Other $304M 3.5% IL Church 2% Other Other CRE $337M $426M AZ 5% 3.9% 4.9% 2% NJ 3% Retail‐Multi TX Office $460M $1.75B 4% 5.3% 20.2% WA Multifamily 5%
Slide 8: CRE Portfolio Details
CRE Portfolio Details LTV Distribution of Total CRE Loans Avg Size, LTV & DCR of Total CRE Loans Originated Since 2019 Originated Since 2019 75%+ Weighted 4% Avg Loan Weighted ($ in millions) Outstanding Avg LTV Size $ Avg DCR 70% ‐ 75% $ % 6% Under 50% Hotel & Motel 284.72 2.91 54.07 2.16 24% Multi
Slide 9: C&I Portfolio
C&I Portfolio (as of March 31, 2020) C&I by Loan Type C&I by Business Type Comm'l Term Wholesale Trade Comm'l Line Loan $577M of Credit $706M Finance and Insurance 18.8% $1.01B 23.0% $849M 27.7% 33.1% Retail Trade Others Syndicated & $410M Comm'l $156M Leverage 13.4% Leasing 5.1% Lending $12M Arts,
Slide 10: Allowance for Credit Losses
Allowance for Credit Losses Reserve Build for CECL Moody’s Baseline V2 Scenario Assumptions • U.S. Growth – Economy enters sudden sharp recession due to ($ thousands) COVID‐19 crisis, turmoil in equity markets and plunge in global oil prices with spike in unemployment; GDP forecasted to decline on a
Slide 11: Allocation of Allowance by Loan Type
Allocation of Allowance by Loan Type Allowance of Loan & Allocation for Credit Losses ($ thousands) Lease Losses (ALLL) for Current Expected Credit Loss (CECL) December 31, 2019 January 1, 2020 March 31, 2020 CECL Adoption ‐ Day 1 Coverage Coverage Coverage Loan Type $ Amount $ Amount $ Amount Ratio
Slide 12: Asset Quality
Asset Quality Nonperforming Assets Provision Expense & Net Charge Offs ($ millions) ($ millions) $28.0 $137.9 $138.5 $141.9 $8.3 $129.1 $118.2 $6.3 $122.1 $23.0 0.22% $8.7 $113.0 $111.7 $129.6 $9.0 $7.8 $132.2 $5.6 $96.7 $24.1 0.11% $120.4 $118.9 0.05% 0.06% $109.2 $105.2 $106.0 $19.4 0.02% 0.03% 0.
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin Key Net Interest Income Drivers Net Interest Income & NIM Average Loan Yield & Average 1M LIBOR Rate ($ millions) 5.31% 5.32% 5.27% 5.16% 5.16% 5.21% $122.8 $123.1 5.04% 5.04% 5.06% $121.9 $120.1 $119.6 $119.3 2.50% $117.2 $116.3 2.35% 2.44% 2.18% 1.79% 1.41% $113.5 1.
Slide 14: Noninterest Income
Noninterest Income Noninterest Income ($ millions) Noninterest income stable at $13.3 $19.9 million, up modestly from 4Q19 Decrease in service fees reflect reduction $15.3 in NSF and analysis fees $10.4 $13.4 $13.0 $13.0 $13.3 Sold $73.9 million in residential loans and $12.3 $6.7 $11.6 $11.4
Slide 15: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense and Efficiency Ratio Breakdown of Noninterest Expense and FTE ($ millions) ($ millions) $72.1 $68.5 $71.6 $67.5 $70.2 $70.8 $71.4 $70.0 $70.4 $29.6 $29.1 $31.1 $30.5 $33.6 $30.4 $32.1 $28.4 $30.6 55.11% 54.15% 55.68% 54.42% 51.87% 52.57% 54.06%
Slide 16: Deposit Trends
Deposit Trends Deposit Composition Total end‐of‐period (“EOP) deposits increased 2.5% Q‐o‐Q, or 10% annualized $12.25 Billion $12.53 Billion $12.84 Billion EOP Loan‐to‐Deposit ratio of 97.14% as of 1Q20 Positive shift in deposit mix continued with increases in 24.1% 24.8% 23.4% lower‐cost depo
Slide 17: Strong Capital & Liquidity Positions
Strong Capital & Liquidity Positions Robust Capital Position Sufficient Liquidity Sources (as of 3/31/2020) 03/31/2020 ($ Thousands) Available Borrowing Capacity 13.08% FHLB Remaining Capacity 3,201,618 11.44% FRB Discount Window 762,103 10.88% 9.92% Unsecured lines with other banks 320,000 10.00% T
Slide 18: Near-Term Outlook
Near-Term Outlook Actively supporting customers’ access and receipt of government’s COVID‐19 relief programs and funds Closely monitoring economy to mitigate COVID‐19 risks to operations Continuation of positive operating trends Favorable shift in mix of deposits to lower‐cost core deposits
Slide 19: 2020 First Quarter Earnings Conference Call Q&A
2020 First Quarter Earnings Conference Call Q&A 19