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]

Financial Performance - Net income for 1Q25 was $21.1 million, or $0.17 per diluted share[4] - Excluding notable items, net income for 1Q25 was $22.9 million, or $0.19 per diluted common share[6] - Net interest income for 1Q25 was $101 million, down 1% QoQ[39] - Noninterest income for 1Q25 was $16 million[51] Capital and Deposits - Total capital ratio was 15.06% at 3/31/25, up 28bps QoQ[7] - Tangible common equity (TCE) ratio was 10.20% at 3/31/25, up 15bps QoQ[7] - Deposits totaled $14.5 billion at 3/31/25, up 1% QoQ[7] Loans and Asset Quality - Loans receivable totaled $13.3 billion at 3/31/25, down 2% QoQ[7] - Nonperforming assets (NPA) were $84 million at 3/31/25, representing 0.49% of total assets, down 8% QoQ and down 21% YoY[7] - Net charge-off (NCO) ratio was 0.25% in 1Q25, down from 0.38% in 4Q24[7] Territorial Bancorp Merger - Acquisition of Hawaii-based Territorial Bancorp (TBNK) completed on 4/2/25, adding $1.7 billion of stable, low-cost deposits and ~$1 billion of residential mortgage loans[7] - Total merger consideration of $73.3 million, or $8.46 per TBNK share[62]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $21.1 million or $0.17 per diluted common share, compared to $0.20 per diluted common share in Q4 2024 [6][7] - Net interest income after provision expense was $96 million, up 4% from $92 million in the previous quarter [7] - Non-interest expense excluding notable items was $81.3 million, reflecting typical first quarter increases in salary and employee benefits [7][16] 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 [9] - Loans receivable decreased by 2% to $13.3 billion, with residential mortgage loans increasing by 7% while commercial and industrial loans decreased by 5% [9][10] - Loan production increased by 11% year over year, despite elevated pay downs and payoffs [10] Market Data and Key Metrics Changes - The company noted aggressive market pricing competition and spread compression, impacting net loan growth [10] - The weighted average cost of deposits from the Territorial merger was 1.96% [8] Company Strategy and Development Direction - The company aims to strengthen its deposit mix and support prudent balance sheet growth [9] - The merger with Territorial Bancorp is expected to enhance growth opportunities and improve loan demand, particularly from Korean companies investing in the U.S. [11][23] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic volatility and the potential for a recession, but noted positive outlooks from Korean subsidiary sector customers [11] - The company expects annual loan growth in 2025 to be at a high single-digit percentage rate, with net interest income growth also expected in the high single-digit range [21][22] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on May 16, 2025 [8] - The merger with Territorial is expected to incur one-time pretax acquisition-related expenses of approximately $18 million in Q2 2025 [20] 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 due to offsetting factors [26][28] Question: Details on loan verticals for organic growth - Management highlighted positive momentum in pipelines for specialized commercial lending verticals, including healthcare and project finance [29][32] Question: Specific segments for loan growth in the second half - Management reiterated confidence in loan growth from Korean subsidiary sectors and specialized commercial lending teams [35][36] Question: Asset quality and points of stress - Management confirmed stable asset quality and proactive monitoring of the portfolio amidst economic uncertainties [39][40]

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 for Q1 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 increased to $14.5 billion, a 1% increase from the previous quarter, with a decrease in broker deposits to less than 7% of total deposits [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 demand from Korean subsidiary sector customers, with an acceleration of direct investments in the U.S. by Korean companies [17][18] - The loan-to-value ratio for commercial real estate loans remained low at approximately 46% [19] Company Strategy and Development Direction - The company aims to strengthen its deposit base and position for prudent growth, focusing on organic loan growth and the integration of Territorial Bank [12][32] - The outlook for 2025 includes high single-digit percentage loan growth and mid-20s percentage growth in non-interest income, reflecting stronger momentum across fee income lines [34] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic volatility and the potential for a recession, but remains optimistic about loan demand from Korean customers [17][32] - The company expects net interest income growth to be in the high single-digit percentage range for 2025, revised from low double-digit growth expectations [33] Other Important Information - The merger with Territorial Bank was completed on April 2, 2025, contributing approximately $1.7 billion in stable low-cost deposits [11][12] - The company declared a quarterly common stock dividend of 14 cents per share, payable on May 16, 2025 [12] 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 good momentum in their pipelines [48] Question: Asset quality and points of stress - Management reported stable asset quality and proactive monitoring of the portfolio, with borrowers diversifying supply chains to mitigate potential impacts from tariffs [52]

Over the last four quarters, the company has surpassed consensus EPS estimates two times. Hope Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $116.51 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.30%. This compares to year-ago revenues of $123.33 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numb ...

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 ...