UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 (Registrant's telephone number, including area code) Commission File Number: 000-50245 HOPE BANCORP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorp ...

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $21.1 million, or 17 cents per diluted common share, compared to 20 cents per diluted common share in Q4 2024 [8][9] - Net interest income after provision expense was $96 million, up 4% from $92 million in Q4 2024 [10] - Non-interest expense, excluding notable items, was $81.3 million, reflecting typical first-quarter increases in salary and employee benefits [10][25] Business Line Data and Key Metrics Changes - Total deposits as of March 31, 2025, were $14.5 billion, an increase of 1% from the previous quarter [13] - Loans receivable decreased to $13.3 billion, down 2% from year-end 2024, with residential mortgage loans increasing by 7% and commercial loans decreasing by 5% [14] - Loan production increased by 11% year-over-year, despite elevated paydowns and refinancing activities [15][16] Market Data and Key Metrics Changes - The company noted strong capital ratios, which expanded quarter-over-quarter and year-over-year, providing a cushion against macroeconomic volatility [11] - The weighted average cost of deposits from the Territorial merger was 1.96%, contributing to stable low-cost deposits [11] Company Strategy and Development Direction - The company aims to strengthen its deposit base and position its balance sheet for prudent growth, focusing on organic loan growth and the integration of Territorial Bank [12][32] - The management highlighted the positive outlook from Korean subsidiary sector customers, anticipating improved loan demand and opportunities for deposit relationships [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic volatility and the potential for a recession but noted positive trends in direct investments from Korean companies [17] - The company expects annual loan growth in 2025 to be at a high single-digit percentage rate, with net interest income growth also anticipated in the high single-digit range [32][33] Other Important Information - The company declared a quarterly common stock dividend of 14 cents per share, payable on May 16, 2025 [12] - The merger with Territorial Bank is expected to incur one-time pre-tax acquisition-related expenses of approximately $18 million in Q2 2025 [31] Q&A Session Summary Question: Impact of fewer rate cuts on NII growth outlook - Management indicated that fewer rate cuts would have a modest downward impact on NII, as the benefits of cutting deposit costs would offset the compression on variable rate loans [38][39] Question: Details on loan verticals for organic growth - Management highlighted positive momentum in pipelines for specialized commercial lending verticals, including healthcare and project finance, supported by recent team expansions [44] Question: Specific segments for loan growth in the second half - Management reiterated confidence in loan growth from Korean subsidiary sectors and specialized teams, with ongoing monitoring of asset quality amid economic uncertainties [52][48]

2025 First Quarter Earnings Conference Call April 22, 2025 Forward Looking Statements & Additional Disclosures Some statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "intends, ...

Hope Bancorp (HOPE) Q1 2025 Earnings Call April 22, 2025 12:30 PM ET Company Participants Angie Yang - Senior VP and Director of IR & Corporate CommunicationsKevin Kim - Chairman, President & CEOJulianna Balicka - Executive VP & CFOAhmad Hasan - Equity Research AssociatePeter Koh - Senior EVP & COO Conference Call Participants Angel Eycher - Analyst Operator Good day, and welcome to the Hope Bancorp twenty twenty five First Quarter Earnings Conference Call. All participants will be in a listen only mode. Af ...

Hope Bancorp, Inc. (HOPE) Q1 2025 Earnings Conference Call April 22, 2025 12:30 PM ET Company Participants Chuck - Conference Call OperatorAngie Yang - Investor Relations RepresentativeKevin Kim - Chairman, President and CEOJuliana Beliska - Chief Financial OfficerPeter Koh - Chief Operating Officer Conference Call Participants Gary Tenner - Analyst, DA DavidsonAndrew Leichtner - Analyst (on behalf of Chris McGrady) Chuck Good day and welcome to the HOPE Bancorp 2025 first quarter earnings conference call. ...

Financial Performance - For Q1 2025, net income was $21.1 million, or $0.17 per diluted share, down from $24.3 million in Q4 2024[1] - Noninterest income for Q1 2025 totaled $15.7 million, a 5% increase from $14.9 million in Q4 2024 when excluding a one-time gain[5] - The provision for credit losses significantly decreased by 52% to $4,800,000 from $10,000,000 in the previous quarter[31] - Return on average assets (ROA) was 0.49% for the quarter, down from 0.57% in the previous quarter[33] - Return on average equity (ROE) decreased to 3.93% from 4.51% in the prior quarter[33] - Earnings per common share (diluted) was $0.17, down from $0.20 in the previous quarter[31] - Pre-provision net revenue (PPNR) for the three months ended 3/31/2025 was $32,644 million, down from $40,426 million for the previous quarter[50] - Efficiency ratio excluding notable items was 69.82% for the three months ended 3/31/2025, compared to 65.81% for the previous quarter[52] Asset and Deposit Management - Total deposits increased by 1% to $14.49 billion in Q1 2025, driven by a 5% rise in money market deposits[12] - Total assets remained stable at $17.07 billion as of March 31, 2025, compared to $17.05 billion at December 31, 2024, reflecting no significant change[29] - Deposits increased by 1% to $14.49 billion at March 31, 2025, from $14.33 billion at December 31, 2024[29] - Noninterest bearing demand deposits fell by 6% to $3,344,732 million, while interest bearing deposits increased by 1% to $11,126,727 million[37] - Total deposits increased by 1% to $14,488,319 million compared to $14,327,489 million in the previous quarter[37] Loan and Credit Quality - Net charge-offs for Q1 2025 were $8.3 million, or 0.25% of average loans, down from $12.8 million in Q4 2024[17] - Nonperforming assets decreased by 8% quarter-over-quarter to $83.9 million, representing 0.49% of total assets[16] - The allowance for credit losses was $147.4 million, unchanged at 1.11% of loans receivable[20] - Total accruing delinquent loans 30-89 days past due increased to $39,646 million as of 3/31/2025, up from $13,845 million on 12/31/2024[45] - Total criticized loans remained relatively stable at $448,723 million as of 3/31/2025, compared to $449,969 million on 12/31/2024[45] Capital and Equity - As of March 31, 2025, the Common Equity Tier 1 Capital Ratio was 13.28%, up from 13.06% at December 31, 2024, and 12.47% at March 31, 2024[21] - Total stockholders' equity increased to $2.16 billion, or $17.84 per common share, reflecting a 1% increase from $2.13 billion, or $17.68 per common share, at December 31, 2024[21] - Tangible common equity (TCE) per share rose to $13.99 at March 31, 2025, compared to $13.81 at December 31, 2024, marking an increase of 1.3%[22] - The TCE ratio improved to 10.20% at March 31, 2025, up 15 basis points from 10.05% at December 31, 2024, and up 87 basis points from 9.33% at March 31, 2024[22] - The leverage ratio improved to 11.92% from 11.83% in the previous quarter[39] Mergers and Acquisitions - The acquisition of Territorial Bancorp added approximately $1.7 billion in core deposits and $1.0 billion in residential mortgage loans[2] - The merger with Territorial Bancorp was completed on April 2, 2025, resulting in the issuance of 6,976,754 shares, valued at $73.3 million[22] Operational Metrics - Total interest income for the same period was $217,166,000, down 4% from $226,621,000 in the prior quarter[31] - Total noninterest expense increased by 8% to $83,861,000 compared to $77,590,000 in the previous quarter[31] - The efficiency ratio (not annualized) was 71.98%, compared to 65.75% in the previous quarter, indicating a decline in operational efficiency[33] - Gross loans decreased by 2% to $13,335,477 million compared to $13,632,763 million in the previous quarter[37] - Average assets decreased to $17,084,378 million for the three months ended 3/31/2025, down from $17,228,881 million in the previous quarter[50] Upcoming Events - The investor conference call to discuss the first quarter results is scheduled for April 22, 2025, at 9:30 a.m. Pacific Time[23]

Financial Instruments and Capital Management - The company has issued $126.0 million of pooled trust preferred securities through nine wholly-owned subsidiary grantor trusts[35]. - The company paid off $197.1 million of convertible note principal in cash on May 15, 2023, following the exercise of put rights by most holders[36]. - The Bank is subject to capital adequacy requirements under the Basel III Capital Rules, which became effective on January 1, 2015[53]. - The minimum capital ratios under the Basel III Capital Rules include a common equity Tier 1 capital ratio of 7.0%, a Tier 1 capital ratio of 8.5%, and a total capital ratio of 10.5%[56]. - As of December 31, 2024, Hope Bancorp and the Bank met all requirements under the Basel III Capital Rules, exceeding the minimum percentage requirements to be deemed "well-capitalized"[56]. - The Bank's ability to pay dividends is subject to restrictions under Delaware law and the FRB's policy, which requires maintaining adequate capital ratios[79]. Loan Products and SBA Lending - The maximum gross loan amount for SBA loans to any one small business borrower is $5.0 million, with a maximum SBA guaranteed amount of $3.75 million[23]. - The company has been designated as an SBA Preferred Lender, facilitating a more efficient marketing and approval process for SBA loans[27]. - The company resumed sales of the guaranteed portion of its SBA 7(a) loans during the 2024 second quarter as secondary market premium rates increased[24]. - The company offers SBA 504 loans for purchasing owner-occupied commercial real estate or long-term capital equipment, typically extended for up to 20 years[25]. - The company funded approximately $2.24 billion in loans in 2024, with 528 CRA-reportable small business loans totaling $196.2 million[88]. Branch Network and Community Engagement - The company has 46 branches across the United States, with 25 located in California and nine in New York and New Jersey[37]. - Approximately 37% of the Bank's branches are located in low-to-moderate income areas, reflecting its commitment to community investment[88]. - The company awarded 60 scholarships of $2,500 each in 2024, contributing over $3.0 million to the Hope Scholarship Foundation since its establishment[88]. - The company is committed to funding affordable housing partnerships and has made investments in CRA and tax credit projects[347]. Regulatory Compliance and Risk Management - Hope Bancorp has not elected financial holding company status and does not engage in activities determined by the FRB to be financial in nature[47]. - The Bank received a "Satisfactory" rating in the most recent public disclosure of CRA performance evaluation released by the FDIC in 2024[67]. - The Dodd-Frank Act requires banking organizations with consolidated assets exceeding $10 billion to establish board-level risk committees and perform annual stress tests[59]. - The Bank is subject to periodic examination by the CFPB with respect to compliance with federal consumer financial laws[61]. - The new CRA rules issued in 2024 will become effective on January 1, 2026, with data reporting requirements effective on January 1, 2027[68]. - The Bank must comply with numerous federal and state consumer protection statutes, including the Fair Debt Collection Practices Act and the Truth in Lending Act[65]. - The Bank is required to establish anti-money laundering programs under the USA PATRIOT Act and the Bank Secrecy Act[69]. - The CFPB has the authority to examine the Bank, which is subject to regulations affecting financial institutions with assets over $10 billion[81]. Financial Performance and Economic Conditions - The company primarily attracts deposits through a wide range of products and services, including personal and business checking accounts, savings accounts, and time deposit accounts[30]. - The company’s investment portfolio aims to manage interest rate risk while generating adequate interest income[29]. - The company’s profitability is significantly influenced by interest rate differentials and economic conditions, which are beyond its control[39]. - The FDIC approved a special assessment rate of approximately 13.4 basis points per year, starting in Q1 2024, based on estimated uninsured deposits as of December 31, 2022[76]. - The company recorded expenses of $691 thousand in 2024 and $4.0 million in 2023 related to the special assessment[76]. - As of December 31, 2024, total contractual obligations and commitments amounted to $8.82 billion, with $7.58 billion due within one year[348]. - The Bank had 1,244 full-time equivalent employees as of December 31, 2024, with no union representation[86].

Core Points - Territorial Bancorp Inc. reported a net loss of $1.72 million, or $0.20 per diluted share, for the three months ended December 31, 2024, primarily due to $1.53 million in pre-tax merger-related expenses [1] - The Board of Directors approved a dividend of $0.01 per share, expected to be paid on February 28, 2025 [2] - The merger agreement with Hope Bancorp, Inc. involves a stock-for-stock transaction valued at approximately $78.60 million, with a fixed exchange ratio of 0.8048 shares of Hope Bancorp common stock for each share of Territorial Bancorp common stock [3][4] Financial Performance - Net interest income decreased by $2.21 million to $7.21 million for the three months ended December 31, 2024, compared to the same period in 2023 [5][22] - Total interest income was $17.91 million, a slight increase from $17.69 million in the previous year, driven by higher interest earned on loans and other investments [5] - Total interest expense increased by $2.42 million to $10.70 million, primarily due to higher costs associated with certificates of deposit and savings accounts [6][22] Asset Quality - The ratio of non-performing assets to total assets was 0.09% at December 31, 2024, compared to 0.10% at December 31, 2023 [7][15] - The allowance for credit losses was $5.11 million, representing 0.40% of total loans, slightly up from 0.39% in the previous year [15][27] Balance Sheet Highlights - Total assets decreased to $2.17 billion at December 31, 2024, from $2.24 billion a year earlier [13][25] - Deposits increased by $81.06 million to $1.72 billion, primarily due to deposits from state and local governments [14][25] - Loans receivable decreased by $21.89 million to $1.29 billion, attributed to loan repayments exceeding new originations [13][25] Noninterest Income and Expenses - Noninterest income increased by $139,000 to $742,000, mainly due to a decrease in pension expenses [10][22] - Noninterest expense rose by $1.42 million to $10.90 million, largely due to increased general and administrative expenses, including $1.53 million in merger-related costs [11][22] Capital Ratios - The tier one leverage and risk-based capital ratios were 11.68% and 28.96%, respectively, indicating the company is well-capitalized [7] - The efficiency ratio was 137.09%, reflecting higher noninterest expenses relative to income [27]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $24.3 million, or $0.20 per diluted share, with pre-provision net revenue of $40 million, up 14% from Q3 2024 [9][10] - Total deposits decreased by 3% to $14.3 billion, influenced by the sale of Virginia branches and typical year-end fluctuations [14] - Net interest income totaled $102 million, a decrease of 3% from Q3 2024, with a net interest margin of 2.50%, down 5 basis points quarter-over-quarter [19][20] Business Line Data and Key Metrics Changes - Loans receivable stood at $13.6 billion, up 1% on an annualized basis from June 30, 2024, with a 2% increase in average gross loans quarter-over-quarter [11][16] - Non-interest income increased by 34% to $16 million, driven by gains on SBA loans and improved customer activity [21] - Non-interest expense was $78 million, down 5% from the prior quarter, reflecting disciplined expense management [22] Market Data and Key Metrics Changes - The company focused on reducing broker deposits to 7% of total deposits, down from 10% a year ago [11] - The competitive environment for deposits remains high, impacting overall funding costs [62] Company Strategy and Development Direction - The company aims for loan growth in the high single-digit percentage range in 2025, driven by organic growth and the addition of Territorial Bancorp's loans [30] - The strategic focus includes improving the deposit mix, organic loan growth, and strong fee income growth [12] - The company anticipates closing the merger with Territorial Bancorp in Q1 2025, which is expected to enhance profitability and growth [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting accelerated earnings growth and profitability [12] - The company is committed to disciplined expense management while investing in talent and technology [32] - The effective tax rate is projected to be around 20% for 2025, benefiting from low-income housing and investment tax credits [32] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on February 20, 2025 [14] - Asset quality remains stable, with non-performing assets down 13% quarter-over-quarter [26] Q&A Session Summary Question: Outlook on deposit beta - Management aims to achieve a higher beta than the past cycles, targeting around 80% with proactive measures [38][39] Question: Expense run rate and contributions from Territorial - The 2025 expense growth guidance includes transitional costs from Territorial, with a focus on disciplined expense management [42][44] Question: Securities accretion and transition acceleration - The company is evaluating the securities portfolio and has not specified the accretion from securities yet [50][56] Question: Deposit trends and competitive environment - The competitive pricing environment remains challenging, but the company achieved a 42% beta on interest-bearing deposits [62][64] Question: Loan growth outlook and charge-offs - The company expects moderate loan growth from the C&I side, with manageable charge-off levels anticipated for 2025 [75][77]

2024 Fourth Quarter Earnings Conference Call January 27, 2025 Forward Looking Statements & Additional Disclosures Some statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "inten ...