Forward Looking Statements & Additional Disclosures 2 12.25% 0.00% | --- | --- | --- | --- | --- | |----------------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | 2023 First Quarter Earnings Conference Call | | | | | | Tuesday, April 25, 2023 | | | | | 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 ...

February 15-17, 2023 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 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportun ...

Financial Instruments and Capital Management - As of December 31, 2022, the company had issued $126.0 million in pooled trust preferred securities through nine wholly-owned subsidiary grantor trusts[35] - The company issued $217.5 million in aggregate principal amount of 2.00% convertible senior notes maturing on May 15, 2038, as part of its share repurchase plan[36] - The company is subject to capital adequacy requirements based on the Basel III Capital Rules, effective January 1, 2015[52] - Hope Bancorp and the Bank met all Basel III Capital Rules requirements as of December 31, 2022, including a common equity Tier 1 capital ratio of 7.0%[55] - The minimum capital ratios under Basel III include 4.5% common equity Tier 1 to risk-weighted assets and 6.0% Tier 1 capital to risk-weighted assets[54] - The capital conservation buffer of 2.5% is required above the regulatory minimum capital ratios, impacting the ability to pay dividends and repurchase shares[54] - The Bank's ability to pay dividends is subject to restrictions under the Delaware General Corporation Law and the FRB's policies[74] - The federal banking agencies have the authority to impose higher capital ratios and restrictions on the Bank if its financial condition is deemed unsatisfactory[73] Regulatory Compliance and Supervision - The company is subject to extensive regulation and supervision under state and federal banking laws, emphasizing capital planning and liquidity management[41] - The company has not elected financial holding company status, limiting its engagement in broader financial activities[46] - The company must seek approval from the Federal Reserve Board prior to acquiring significant assets or controlling shares of other banks[47] - The Dodd-Frank Act requires banks with consolidated assets over $10 billion to establish board-level risk committees and perform annual stress tests[57] - The Bank must comply with numerous federal and state consumer protection statutes, which regulate customer interactions and impose penalties for non-compliance[62][63] Deposits and Funding Sources - FDIC-insured deposits serve as the primary source of funds for the company, which actively manages its cost of funds in response to market conditions[32] - The company attracts both short-term and long-term deposits through a wide range of products, including personal and business checking accounts, savings accounts, and retirement accounts[31] - The company may borrow from the Federal Home Loan Bank of San Francisco and the Federal Reserve Bank to manage liquidity needs[33] - The FDIC insures customer deposits up to $250,000 per customer, and the termination of deposit insurance could lead to the revocation of the Bank's charter[69] Community Engagement and Social Responsibility - The Bank received a "Satisfactory" rating in its most recent Community Reinvestment Act performance evaluation released by the FDIC in 2021[64] - The company funded approximately $4.45 billion in loans in 2022[86] - The company had approximately $315.8 million in CRA-reportable small business lending in 2022[86] - The company awarded 60 students grants of $1,500 each in 2022, contributing over $2.3 million to the Hope Scholarship Foundation since its establishment in 2001[86] - The company conducted nearly 731 hours of CRA-reportable volunteer hours in 2022[86] - The company has invested in affordable housing partnership investments, CRA investments, and CDFI investments[86] - The company has commitments to fund investments in affordable housing partnerships totaling $11.79 million[349] - The company launched its initial Environmental, Social and Governance (ESG) report in 2022, outlining its ESG progress and compliance[85] Workforce and Employment - As of December 31, 2022, the company had 1,549 full-time equivalent employees, an increase from 1,476 employees at the end of 2021[83] - The company has a competitive benefits package that includes medical, dental, and vision healthcare, 401(k) benefits, and tuition assistance[82]

DDA MMA/NOW Savings Time Cost of Interest-Bearing Deposits $9.1 $9.3 $9.1 $9.7 $10.3 $6.0 $5.7 $5.7 $5.7 $5.2 4Q21 1Q22 2Q22 3Q22 4Q22 $15.45 $15.48 $15.07 $14.95 $14.80 10 • Total nonperforming assets decreased 28% Q-o-Q, reflecting reductions in all NPL categories $257.2 $167.0 $95.8 $79.4 $157.3 $242.4 $226.7$244.7$204.7 $104.1 3.58% 2.80%2.34%1.83% 1.70% 4Q21 1Q22 2Q22 3Q22 4Q22 $499.6 $393.6$340.5$284.1 $261.3 • Special mention loans increased 98% Q-o-Q $1.5-$11.0 -0.07% -0.52% (Credit) for Credit Loss ...

Financial Data and Key Metrics Changes - The company reported net income of $51.7 million, or $0.43 per share, with a decrease in pre-provision net revenue (PPNR) to $78.1 million, attributed to increased deposit costs in a competitive market [42][95] - Net interest income totaled $150.5 million for Q4 2022, representing a decrease of 1.7% from the previous quarter, despite a 2.1% increase in average earning assets [95] - The net interest margin (NIM) decreased by 13 basis points quarter-over-quarter to 3.36%, with an overall increase of 23 basis points for 2022 [21][28] Business Line Data and Key Metrics Changes - C&I loans represented 54% of total loan fundings in Q4, with an average rate increase of 162 basis points over the preceding quarter [18][43] - Total criticized and classified loans decreased by 8% in Q4 and by 48% for the full year, reflecting improved asset quality and proactive derisking efforts [25][56] - Commercial real estate loans funded in Q4 were $324 million, reflecting a decrease due to lower loan demand attributed to higher interest rates [19][43] Market Data and Key Metrics Changes - The company’s total deposits increased by 1.5% from the previous quarter, while the net loan to deposit ratio decreased to 97.2% [50] - Non-interest income for Q4 was $12.1 million, a decrease of 9% from the previous quarter, primarily due to lower gains on SBA loan sales [49] - The average rate on total new loan production increased by 134 basis points to 6.71% in Q4 [45] Company Strategy and Development Direction - The company plans to maintain a selective approach to new loan production, focusing on higher yielding C&I loans that are more resistant to recessionary pressures [30][57] - There is an emphasis on building a lower risk, diversified loan portfolio, with C&I loans increasing by 21.4% in 2022 [20] - The company expects to generate mid-single digit loan growth in 2023, funded primarily by deposit growth [70][97] Management Comments on Operating Environment and Future Outlook - Management acknowledged that 2023 will be challenging due to economic uncertainty but expressed confidence in the company’s ability to manage through downturns [32][30] - The expectation is that pressures on margins and profitability from rising deposit costs will diminish as the year progresses [32] - The company is focused on disciplined expense controls while leveraging investments made in talent and capabilities over the past few years [58] Other Important Information - The Board of Directors declared a quarterly cash dividend of $0.14 per share, unchanged from the previous quarter [26] - The company recorded a provision for credit losses of $8.2 million in Q4, with an allowance for credit loss coverage ratio of 1.05% of total loans [52] Q&A Session Summary Question: What drove the decline in non-interest bearing deposits? - Management indicated that the decline was largely due to the macroeconomic and market interest rate environment, with a migration from non-interest bearing to interest-bearing deposits [33][35][61] Question: What are the expectations for balance sheet growth in 2023? - The company plans to fund new loan production mainly with deposits, expecting deposit growth to be comparable to loan growth [70] Question: Can you provide color on the current lending pipeline? - Management noted that the pipeline is smaller due to a selective lending practice and the impact of higher interest rates on loan demand [72][89]

Commission File Number: 000-50245 HOPE BANCORP, INC (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Delaware 95-4849715 3200 Wilshire Boulevard, Suite 1400 Los Angeles, California 90010 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 September 30, 20 ...

Financial Data and Key Metrics Changes - The company reported net income of $53.7 million or $0.45 per share in Q3 2022, up from $0.43 in Q2 2022, with pre-provision net revenue increasing 12% to $82.6 million, a record level for the company [7][6][5] - Pre-provision net revenue return on average assets increased to 1.79% from 1.65% in the prior quarter, while return on average equity increased to 16.26% from 14.66% [7][6][5] Business Line Data and Key Metrics Changes - The company funded $1.35 billion in new loans in Q3 2022, a 5% increase from Q2 2022 and a 34% increase from Q3 2021, with commercial lending accounting for 55% of total loan funding [8][9] - Commercial real estate loan production was $534 million in Q3 2022, slightly down from Q2 2022, but the average rate of new CRE loans increased by 99 basis points [10][9] Market Data and Key Metrics Changes - The company experienced strong contributions from its Texas region and health care group, with a well-diversified loan production across industries and geographies [9][10] - The average rate on total loan production increased by 111 basis points compared to the preceding quarter, reflecting increasing trends in loan pricing across all asset classes [10][9] Company Strategy and Development Direction - The company is focused on a relationship-driven commercial banking model, with commercial loans now representing one-third of the total loan portfolio, reflecting the success of its corporate banking group [28][29] - The company aims to continue diversifying its portfolio and improving asset quality, with a focus on recession-resistant loans [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment but expects to benefit from the shift to a more relationship-focused commercial banking model [28][30] - The company anticipates loan growth to moderate in the near term due to economic uncertainties and rising interest rates, while maintaining a focus on managing deposit costs [31][32] Other Important Information - The company declared a quarterly cash dividend of $0.14 per share, maintaining the same level as the previous quarter [25][26] - The tangible common equity to tangible asset ratio remained strong at 8.09% as of September 30, 2022, despite unrealized losses in the investment security portfolio [24][26] Q&A Session Summary Question: What were the September 30 deposit spot rates for interest-bearing or total? - The total interest-bearing deposit spot rate was 1.84%, and the total deposit spot rate was 1.21% [36] Question: How does management see NIM compression potentially accelerating in the first half of 2023? - Management is not providing guidance for NIM for 2023 due to uncertainties but expects flat or small compression in Q4 [38] Question: Any thoughts on augmenting the total risk-based capital number? - Management believes the current capital ratio is strong and will assess the need for augmentation as they move forward [39] Question: What are the assumptions for deposit beta through the cycle? - Management finds it difficult to provide a 2023 deposit beta due to volatility and recent interest rate hikes [42] Question: What are the plans for managing the loan-to-deposit ratio going forward? - The loan-to-deposit ratio increased due to a large isolated outflow, but management expects it to return to around 96% [45] Question: How does management view inflationary pressures and expense growth for next year? - Management expects non-interest expenses to increase in Q4 and anticipates a higher loan growth for the year at the higher end of the single to low-double digit range [46]

| --- | --- | --- | --- | --- | --- | |----------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 Third Quarter Earnings Conference Call | | | | | | | Tuesday, October 25, 2022 | | | | | | 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 ...

Loan Modifications and Credit Losses - The balance of loans with modified terms due to COVID-19 as of June 30, 2022, totaled $808 thousand, a significant decrease from $22.8 million at December 31, 2021[92]. - As of June 30, 2022, TDR loans on accrual status included 25 commercial real estate loans totaling $16.1 million, compared to 31 loans totaling $43.8 million at December 31, 2021, indicating a reduction of 63.2% in total value[93]. - The company recorded an allowance for credit losses (ACL) totaling $3.1 million for TDR loans as of June 30, 2022, up from $2.7 million as of December 31, 2021[93]. - During the three months ended June 30, 2022, the company modified two new TDR loans with a maturity concession totaling $3.5 million[95]. - For the three months ended June 30, 2021, the company modified one TDR loan with a payment concession totaling $12 thousand and seven TDR loans with maturity concessions totaling $11.5 million[96]. - The company recorded $0 in ACL for TDR loans that had payment defaults during the three and six months ended June 30, 2022, while in the same period of 2021, it recorded $23.6 million in ACL[98]. - There was one TDR loan that subsequently defaulted during the three months ended June 30, 2022, with a total modification of $1.0 million[99]. - The company expects TDR loans on accrual status as of June 30, 2022, to continue complying with restructured terms due to reduced principal or interest payments[93]. - The total charge-offs of TDR loans modified during the three and six months ended June 30, 2022, totaled $0, consistent with the previous year[94]. Operating Leases and Related Costs - The company's operating leases include bank branch locations and office spaces with remaining lease terms ranging from 1 to 10 years as of June 30, 2022[103]. - As of June 30, 2022, the Company reported ROU assets of $58.6 million and related liabilities of $63.0 million, an increase from $52.7 million and $57.3 million, respectively, at December 31, 2021[104]. - The net lease cost for the three months ended June 30, 2022, was $4.5 million, slightly down from $4.5 million in the same period of 2021, while the six-month net lease cost increased to $9.2 million from $9.0 million[106]. - Cash paid for operating leases was $7.95 million for the six months ended June 30, 2022, compared to $7.43 million for the same period in 2021[107]. - The total lease payments due as of June 30, 2022, amounted to $67.1 million, with total lease obligations after imputed interest at $62.99 million[108]. - The weighted-average remaining lease term for operating leases was 4.9 years as of June 30, 2022, down from 5.2 years in the previous year[107]. Deposits and Borrowings - The Company had total deposits of $15.03 billion as of June 30, 2022, a slight decrease from $15.04 billion at December 31, 2021[112]. - FHLB advances increased to $573.0 million at June 30, 2022, compared to $300.0 million at December 31, 2021[113]. - Brokered deposits totaled $867.5 million at June 30, 2022, an increase from $810.9 million at December 31, 2021[111]. - At June 30, 2022, total borrowing capacity from the FHLB was $4.14 billion, of which $3.55 billion was unused and available to borrow[325]. Capital and Equity - Total stockholders' equity decreased to $2.00 billion as of June 30, 2022, down from $2.09 billion at December 31, 2021[175]. - The Company reported a Common Equity Tier 1 capital ratio of 10.69%, exceeding the required minimum of 4.50%[192]. - The Bank's Tier 1 capital ratio as of June 30, 2022, was 12.43%, significantly above the required minimum of 6.00%[192]. - Common equity Tier 1 capital increased to $1.72 billion at June 30, 2022, from $1.66 billion at December 31, 2021, with a common equity Tier 1 capital ratio of 10.69%[319]. - The total capital to risk-weighted assets ratio was 12.13% and the Tier 1 capital to risk-weighted assets ratio was 11.33% at June 30, 2022[319]. - Total stockholders' equity decreased by $92.6 million to $2.00 billion at June 30, 2022, from $2.09 billion at December 31, 2021[316]. Interest Rate Swaps and Derivatives - The notional amount of interest rate swaps related to the loan hedging program increased to $623.434 million as of June 30, 2022, from $148.199 million at December 31, 2021[129]. - The estimated fair value of interest rate swaps on loans with correspondent banks was $36.379 million as of June 30, 2022, compared to $3.001 million at December 31, 2021[129]. - The company had interest rate swaps liabilities of $36,431,000 as of June 30, 2022, consistent with the previous reporting period[167]. - The weighted average remaining term for interest rate swaps designated as cash flow hedges was 2.8 years as of June 30, 2022[133]. Tax Provisions and Benefits - For the three months ended June 30, 2022, the Company had an income tax provision totaling $18.6 million on pretax income of $70.7 million, representing an effective tax rate of 26.35%[148]. - The effective tax rate for the six months ended June 30, 2022, was 26.12%, compared to 24.56% for the same period in 2021[148]. - The Company had total unrecognized tax benefits of $3.3 million at both June 30, 2022, and December 31, 2021[149]. - The Company recorded approximately $446 thousand for accrued interest related to income tax matters at June 30, 2022[149]. - The income tax benefit recognized for the three months ended June 30, 2022, was approximately $912 thousand, up 77.6% from $514 thousand for the same period in 2021[184]. Securities and Fair Value - As of June 30, 2022, the total fair value of U.S. Treasury securities was $3,968,000, while collateralized mortgage obligations amounted to $909,827,000[167]. - The total fair value of residential mortgage-backed securities was $502,759,000, and commercial mortgage-backed securities were valued at $414,046,000[167]. - The ending balance for municipal securities measured at fair value on a recurring basis was $1,019,000 as of June 30, 2022, down from $1,058,000 in the same period of 2021[169]. - The company reported a net loss of $763,000 for real estate loans at fair value for the three months ended June 30, 2022, compared to a loss of $25,411,000 in the same period of 2021[170]. - For the six months ended June 30, 2022, the total net loss for collateral dependent loans at fair value was $1,374,000, compared to a loss of $27,738,000 in the same period of 2021[170]. - The fair value of loans held for sale, net, was $35,484,000 as of June 30, 2022, showing an increase from $26,154,000 at the end of 2021[170]. - The total fair value of equity investments with readily determinable fair value was $24,711,000 as of June 30, 2022[167]. - The company experienced a change in fair value for risk participation agreements, resulting in an ending balance of $31,000 as of June 30, 2022, down from $64,000 in 2021[169]. - There were no transfers between Levels 1, 2, and 3 during the three and six months ended June 30, 2022 and 2021[168]. Stock Repurchase and Dividends - The company repurchased 1,038,986 shares of common stock for a total of $14.7 million during the three months ended June 30, 2022[175]. - Cash dividends paid were $0.14 per common share for the three months ended June 30, 2022, consistent with the same period in 2021[176]. - The company recorded an unrealized net loss on securities available for sale of $55.7 million for the three months ended June 30, 2022[176]. - The company had 1,484,830 shares available for future grants under the 2019 stock-based incentive plan as of June 30, 2022[182]. - The total fair value of restricted stock and performance units vested was $9.4 million as of June 30, 2022[182]. - The company recorded reclassification adjustments of $114 thousand from other comprehensive income to losses from cash flow hedge relationships for the three months ended June 30, 2022[177]. Employee Compensation and Expenses - The compensation expense for the Employee Stock Purchase Plan (ESPP) during the three months ended June 30, 2022, was $34 thousand, compared to $37 thousand for the same period in 2021, reflecting a decrease of 8.1%[183]. - Total amounts charged against income related to stock-based payment arrangements were $3.5 million for the three months ended June 30, 2022, an increase of 66.7% from $2.1 million in the same period of 2021[184]. - The Company had unrecognized compensation expense related to non-vested restricted stock and performance units amounting to $17.8 million, expected to be recognized over a weighted average vesting period of 1.97 years[185]. Liquidity and Financial Condition - Liquid assets were $2.09 billion at June 30, 2022, down from $2.57 billion at December 31, 2021, with cash and cash equivalents at $197.1 million[325]. - The company anticipates that current off-balance-sheet activities will not materially impact future results of operations or financial condition[315]. - The company aims to maintain capital levels sufficient to assure stockholders, customers, and regulators of financial soundness[315]. - The liquidity management objective is to ensure funds are available to meet cash flow requirements arising from fluctuations in deposit levels[323].

Financial Data and Key Metrics Changes - The company reported net income of $52.1 million or $0.43 per share for Q2 2022, with pre-provision net revenue increasing by 4% quarter-over-quarter and 15% year-over-year to $73.9 million [12][23] - Loan production reached a record $1.3 billion, marking a 25% increase quarter-over-quarter and a 44% increase year-over-year, contributing to a 16% annualized increase in loans outstanding [11][13] - The net interest margin expanded by 15 basis points from the previous quarter to 3.36%, driven by increased loan yields [11][23] Business Line Data and Key Metrics Changes - The commercial loan portfolio saw a significant increase, with $557 million in new commercial loans funded, accounting for approximately 43% of total loan fundings [13][15] - Residential mortgage production increased by 75%, despite a decline in refinancing demand, reflecting successful expansion into the Eastern region [19] - The corporate banking group generated about 90% of commercial loan fundings, indicating a strategic focus on middle-market enterprises [16] Market Data and Key Metrics Changes - The company noted a consistent demand for commercial real estate loans, with $545 million produced in Q2, diversified across various property types [18] - The average rate on new loan originations increased by 72 basis points compared to the previous quarter, reflecting favorable loan pricing trends [20] Company Strategy and Development Direction - The company aims to strengthen its commercial banking platform and diversify its business model, reducing reliance on commercial real estate lending [21][54] - There is a strategic focus on targeting U.S. subsidiaries of Korean corporations, which now account for approximately 23% of total deposits [22] - The company is enhancing its credit administration processes and tightening underwriting criteria in preparation for potential recessionary impacts [39][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit to low double-digit loan growth for the year, despite challenges from rising interest rates [50] - The company anticipates a softening demand for commercial real estate loans in the second half of the year due to higher interest rates [47][78] - Management highlighted the importance of a diversified loan portfolio to withstand economic downturns, with a focus on recession-resistant industries [55][56] Other Important Information - The company repurchased approximately 1 million shares at an average price of $14.10 per share, with $35.3 million remaining in the stock repurchase program [42] - The allowance for credit losses coverage ratio was 1.04% of loans, reflecting a stable credit quality environment [40] Q&A Session Summary Question: Can you provide a June 30 spot rate for deposit cost? - The total interest-bearing deposit spot rate was 77 basis points, with total deposits at 48 basis points as of June 30 [60] Question: What options are embedded in your model regarding NIM expansion? - The company expects continued net interest margin expansion, primarily due to variable rate loans repricing, despite some offsetting impacts from deposit rate increases [62][63] Question: How should we think about the remainder of the buyback given the growth outlook? - The company will continue to monitor the market for opportunities to repurchase shares, maintaining strong capital levels [68] Question: Can you provide additional color on the TDR that migrated into nonaccrual? - The migration was from the CRE retail bucket, and the property is well secured, with no expected loss [72] Question: How does the loan pipeline compare to the end of Q1? - The CRE pipeline is lower than in Q2, while the C&I pipeline remains strong with no significant impact from recent rate hikes [78][80]