EX-99.1 2 hope-06302023ex991financia.htm EX-99.1 Document

hopebancorp5a03a.jpg
News Release


HOPE BANCORP REPORTS 2023 SECOND QUARTER FINANCIAL RESULTS


LOS ANGELES - July 24, 2023 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its second quarter and six months ended June 30, 2023.

For the three months ended June 30, 2023, net income totaled $38.0 million, or $0.32 per diluted common share. This compares with net income of $39.1 million, or $0.33 per diluted common share, in the preceding first quarter. Pre-provision net revenue (“PPNR”) (1) for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.

“Throughout the second quarter, we continued to maintain high levels of capital and liquidity to prudently navigate an operating environment that is challenging for regional banks,” said Kevin S. Kim, Chairman, President and Chief Executive Officer. “Year-over-year, our total capital ratio increased 51 basis points to 12.64% at June 30, 2023. At the end of the 2023 second quarter, our tangible common equity ratio (1) was a robust 8.04%.

“Our asset quality remains healthy. We recorded net recoveries of $552 thousand for the 2023 second quarter, and nonperforming assets decreased 30% year-over-year. We have steadily built our allowance for credit losses, with coverage at 1.16% of loans receivable at June 30, 2023.

“Year-over-year, our loans receivable grew 2% to $14.9 billion, and our total deposits grew 4% to $15.6 billion at June 30, 2023. With Bank of Hope’s strong balance sheet and continued investment in enhancing our products and services, we are focused on expanding our relationships with our customers and strengthening our market leadership in the Korean American community and beyond,” said Kim.
Q2 2023 Highlights
•Capital growth. Total capital was $2.10 billion at June 30, 2023, growing 2% from March 31, 2023. The total capital ratio increased 39 basis points quarter-over-quarter to 12.64% at June 30, 2023. Book value per common share at June 30, 2023, was $17.23, and tangible common equity (“TCE”) per share (1) was $13.32, up 0.3% and 0.5%, respectively, quarter-over-quarter. The TCE ratio of 8.04% as of June 30, 2023, expanded 13 basis points from March 31, 2023.
•Strong liquidity. Cash and cash equivalents increased to $2.30 billion at June 30, 2023, up from $2.21 billion at March 31, 2023. Available borrowing capacity, together with cash and cash equivalents and unpledged investment securities, totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023.
•Healthy asset quality. Nonperforming assets declined 3% quarter-over-quarter. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023. The Company recorded net recoveries of $552 thousand during the 2023 second quarter, equivalent to 0.01% annualized of average loans.
•Total deposits of $15.62 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 4% year-over-year. Uninsured deposits at June 30, 2023, represented 36% of the Bank’s deposits, compared with 38% at March 31, 2023.
•Loans receivable of $14.86 billion at June 30, 2023, decreased 1% quarter-over-quarter and grew 2% year-over-year.
•Efficiency improvement. The efficiency ratio for the 2023 second quarter improved 325 basis points to 59.1% from 62.4% for the preceding first quarter.
•PPNR increase. PPNR for the 2023 second quarter totaled $60.4 million, up 11% from $54.5 million in the preceding first quarter.
(1)    PPNR, TCE ratio, and TCE per share are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
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2-2-2    NASDAQ: HOPE

Financial Summary
At or for the Three Months Ended
(dollars in thousands, except per share data) (unaudited)6/30/20233/31/20236/30/2022
Net income$38,022 $39,121 $52,088 
Diluted earnings per share$0.32 $0.33 $0.43 
Net interest income before provision for credit losses$130,689 $133,878 $141,538 
Pre-provision net revenue (“PPNR”) (1)
$60,370 $54,502 $73,919 
Loans receivable$14,864,810 $15,064,849 $14,546,049 
Deposits$15,619,352 $15,828,209 $15,029,630 
Total assets$20,366,138 $20,568,884 $18,089,062 
Total equity$2,067,998 $2,058,580 $2,000,369 
Total capital ratio12.64 %12.25 %12.13 %
Tangible common equity (“TCE”) ratio (1)
8.04 %7.91 %8.68 %
Net recoveries (charge offs)$552 $(108)$930 
Net recoveries/average loans receivable (2)
0.01 %— %0.03 %
Allowance for credit losses$172,996 $163,544 $151,580 
Allowance for credit losses to loans receivable
1.16 %1.09 %1.04 %
Nonperforming assets to total assets (3)
0.38 %0.39 %0.61 %
Return on average assets (“ROA”) (2)
0.74 %0.82 %1.17 %
Return on average equity (“ROE”) (2)
7.34 %7.65 %10.33 %
Return on average TCE (“ROTCE”) (1) (2)
9.49 %9.93 %13.48 %
ROA (PPNR) (1) (2)
1.18 %1.14 %1.65 %
ROE (PPNR) (1) (2)
11.65 %10.65 %14.66 %
Net interest margin (2)
2.70 %3.02 %3.36 %
Noninterest expense / average assets (2)
1.71 %1.89 %1.80 %
Efficiency ratio59.13 %62.38 %52.09 %
__________________

(1) PPNR, TCE ratio, ROTCE, ROA (PPNR), and ROE (PPNR) are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
(2) Annualized.
(3) Excludes delinquent Small Business Administration (“SBA”) loans that are guaranteed and currently in liquidation.

Operating Results for the 2023 Second Quarter

Net interest income. Net interest income before provision for credit losses for the 2023 second quarter totaled $130.7 million, a decrease of 2% compared with $133.9 million in the preceding first quarter. 2023 second quarter interest income of $267.2 million increased $30.5 million quarter-over-quarter, driven by growth in average interest earning cash and deposits at other banks, as well as expanding loan yields. This was offset by higher interest expense, which increased $33.7 million quarter-over-quarter, reflecting a higher cost of interest bearing deposits and a higher volume of average borrowings.

The net interest margin for the 2023 second quarter decreased 32 basis points to 2.70%, from 3.02% in the preceding first quarter, primarily reflecting a higher cost of funds and an increase in average borrowings, partially offset by loan yield expansion and growth in average interest earning cash and deposits at other banks.
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The weighted average yield on loans for the 2023 second quarter was 5.99%, up 24 basis points from 5.75% in the preceding first quarter. This reflected increases in market interest rates and a significant increase in the average rate on new loans. The average rate on new loans originated in the 2023 second quarter was 8.37%, up 84 basis points quarter-over-quarter.

The weighted average cost of total deposits for the 2023 second quarter was 2.79%, up 42 basis points from 2.37% in the preceding first quarter, reflecting higher rates paid on interest bearing deposit accounts.

Noninterest income. Noninterest income for the 2023 second quarter totaled $17.0 million, up 55% from $11.0 million in the preceding first quarter. Other income and fees for the 2023 second quarter included a $5.8 million cash distribution from a gain on an investment in an affordable housing partnership. During the 2023 second quarter, the Company sold $38.4 million of the guaranteed portion of SBA 7(a) loans and $6.6 million of residential mortgage loans, for a gain on loan sales of $2.0 million, compared with $40.7 million and $7.3 million, respectively, sold in the preceding first quarter for a gain on loan sales of $2.3 million.

Noninterest expense. Noninterest expense for the 2023 second quarter decreased 3% to $87.3 million, down from $90.4 million in the preceding first quarter. The quarter-over-quarter change was primarily driven by lower salaries and employee benefits expense, partially offset by the impact of an industry-wide increase in the FDIC assessment rate of two basis points.

The Company’s efficiency ratio for the 2023 second quarter improved to 59.1% from 62.4% in the preceding first quarter. Annualized noninterest expense as a percentage of average assets was 1.71% for the 2023 second quarter, down from 1.89% for the 2023 first quarter.

Tax rate. The effective tax rate for the 2023 second quarter was 26.1%, compared with 25.9% for the preceding first quarter. The year-to-date effective tax rate for the first six months of 2023 was 26.0%.

Balance Sheet Summary
Loans. New loan originations for the 2023 second quarter totaled $490.6 million, compared with $568.7 million for the preceding first quarter. The following table sets forth the components of new loan production for the quarters ended June 30, 2023, March 31, 2023, and June 30, 2022.
For the Three Months Ended
(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
Commercial real estate (“CRE”) loans$115,444 $176,798 $522,093 
Commercial and industrial (“C&I”) loans318,063 344,194 544,639 
SBA loans38,051 29,977 35,085 
Residential mortgage loans18,736 14,317 181,408 
Other loans280 3,375 2,770 
    Total new loan originations$490,574 $568,661 $1,285,995 

At June 30, 2023, loans receivable decreased 1% quarter-over-quarter to $14.86 billion from $15.06 billion at March 31, 2023. Year-over-year, loans receivable grew 2%, up from $14.55 billion at June 30, 2022. The following table sets forth the loan portfolio composition and percentage of total loans at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
BalancePercentageBalancePercentageBalancePercentage
C&I loans$4,805,126 32.3 %$4,821,270 32.0 %$4,395,738 30.2 %
CRE loans9,192,160 61.9 %9,373,529 62.2 %9,335,020 64.2 %
Residential mortgage and other loans867,524 5.8 %870,050 5.8 %815,291 5.6 %
    Loans receivable$14,864,810 100.0 %$15,064,849 100.0 %$14,546,049 100.0 %
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Deposits. At June 30, 2023, total deposits decreased 1% to $15.62 billion from $15.83 billion at March 31, 2023. Year-over-year, total deposits grew 4%, up from $15.03 billion at June 30, 2022. The following table sets forth the deposit composition and percentage of total deposits at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
BalancePercentageBalancePercentageBalancePercentage
  Noninterest bearing demand deposits$4,229,247 27.1 %$4,504,621 28.4 %$5,689,992 37.9 %
  Money market and interest bearing
  demand deposits		4,188,584 26.8 %4,331,998 27.4 %6,339,467 42.2 %
  Savings deposits224,495 1.4 %231,704 1.5 %326,927 2.1 %
  Time deposits 6,977,026 44.7 %6,759,886 42.7 %2,673,244 17.8 %
     Total deposits$15,619,352 100.0 %$15,828,209 100.0 %$15,029,630 100.0 %

Liquidity. At June 30, 2023, cash and cash equivalents increased to $2.30 billion from $2.21 billion at March 31, 2023, and up from $0.20 billion at June 30, 2022. Available borrowing capacity, cash and cash equivalents, and unpledged investment securities totaled $7.75 billion, equivalent to 50% of total deposits at June 30, 2023, and well exceeding the Bank’s uninsured deposit balances.

Borrowings and Convertible Notes. Federal Home Loan Bank and Federal Reserve Bank borrowings were $2.26 billion at June 30, 2023, compared with $2.13 billion at March 31, 2023, and $0.57 billion at June 30, 2022. At the expiration of the Optional Put for the holders of the Company’s 2% Convertible Senior Notes due 2038, $197 million of the principal amount was paid off on May 15, 2023, with existing cash.

Allowance for Credit Losses
For the 2023 second quarter, the Company recorded a provision for credit losses of $8.9 million, compared with $1.7 million in the preceding first quarter, building its allowance for credit losses. The allowance for credit losses increased to $173.0 million at June 30, 2023, up from $163.5 million at March 31, 2023. The allowance coverage ratio increased to 1.16% of loans receivable at June 30, 2023, up from 1.09% a quarter ago.

The following table sets forth the allowance for credit losses and allowance coverage ratios at June 30, 2023, March 31, 2023, and June 30, 2022:

(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
Allowance for credit losses$172,996 $163,544 $151,580 
Allowance for credit losses/loans receivable1.16 %1.09 %1.04 %

Credit Quality
Asset quality continued to be healthy. The Company recorded net recoveries of $552 thousand in the 2023 second quarter, representing an annualized net recovery ratio of 0.01% of average loans. The following table sets forth net recoveries (charge offs) and net recoveries to average loans receivable, annualized, for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022:
For the Three Months Ended
(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
Net recoveries (charge offs)$552 $(108)$930 
Net recoveries/average loans receivable (annualized)0.01 %— %0.03 %


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Nonperforming assets. Nonperforming assets totaled $77.4 million at June 30, 2023, a decrease of 3% quarter-over-quarter, and a decrease of 30% year-over-year. The nonperforming assets ratio improved to 0.38% of total assets at June 30, 2023, down from 0.39% at March 31, 2023, and down from 0.61% at June 30, 2022. Nonperforming loans decreased 4% quarter-over-quarter to $76.4 million at June 30, 2023, down from $79.2 million at March 31, 2023, and decreased 30% year-over-year from $108.6 million at June 30, 2022.

The following table sets forth the components of nonperforming assets at June 30, 2023, March 31, 2023, and June 30, 2022:
(dollars in thousands) (unaudited)6/30/20233/31/20236/30/2022
Loans on nonaccrual status (1)
$61,252 $78,861 $69,522 
Accruing delinquent loans past due 90 days or more
15,182 364 12,468 
Accruing troubled debt restructured loans (2)
— — 26,572 
   Total nonperforming loans76,434 79,225 108,562 
Other real estate owned938 938 2,010 
   Total nonperforming assets$77,372 $80,163 $110,572 
Nonperforming assets/total assets0.38 %0.39 %0.61 %
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(1)     Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million and $13.2 million at June 30, 2023, March 31, 2023, and June 30, 2022, respectively.
(2)     The Company adopted ASU 2022-02 in 2023, which eliminated the concept of troubled debt restructured (“TDR”) loans from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.

Criticized loans. Total criticized loans were $345.0 million at June 30, 2023, compared with $304.7 million at March 31, 2023, and $340.5 million at June 30, 2022.


Capital
The Company’s capital ratios remained strong. At June 30, 2023, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a “well-capitalized” financial institution. The following table sets forth the capital ratios for the Company at June 30, 2023, March 31, 2023, and June 30, 2022:
(unaudited)
6/30/20233/31/20236/30/2022Minimum Guideline for “Well-Capitalized”
Common Equity Tier 1 Capital Ratio11.06%10.75%10.69%6.50%
Tier 1 Capital Ratio11.68%11.36%11.33%8.00%
Total Capital Ratio12.64%12.25%12.13%10.00%
Leverage Ratio9.57%10.13%10.32%5.00%

The following table sets forth the TCE per share and the TCE ratio at June 30, 2023, March 31, 2023, and June 30, 2022:
(unaudited)6/30/20233/31/20236/30/2022
TCE per share (1)
$13.32$13.26$12.80
TCE ratio (1)
8.04%7.91%8.68%
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(1)    TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

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Investor Conference Call

The Company previously announced that it will host an investor conference call on Monday, July 24, 2023 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review unaudited financial results for its second quarter ended June 30, 2023. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the “Hope Bancorp Call.” A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp’s website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp’s website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through July 31, 2023, replay access code 8610354.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures, including PPNR, TCE per share, TCE ratio, ROTCE, ROA (PPNR), and ROE (PPNR). Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s operational performance and the Company’s capital levels and has included these figures in response to market participant interest in these financial metrics. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. (NASDAQ: HOPE) is the holding company of Bank of Hope, the first and only super regional Korean American bank in the United States with $20.37 billion in total assets as of June 30, 2023. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, New York City, Northern California and Houston; commercial loan production offices in Northern California, Seattle and Tampa, Fla.; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate lending, commercial and industrial lending, SBA lending, and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

7-7-7    NASDAQ: HOPE


Forward-Looking Statements

Some statements in this news release 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. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses; regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company’s most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

Contacts:

Julianna Balicka    Angie Yang
EVP & Chief Financial Officer    SVP, Director of Investor Relations & Corporate Communications
213-235-3235    213-251-2219
julianna.balicka@bankofhope.com     angie.yang@bankofhope.com


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Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share data)

Assets:6/30/20233/31/2023% change6/30/2022% change
Cash and due from banks$2,302,339 $2,212,637 4 %$197,062 1,068 %
Investment securities2,186,346 2,231,989 (2)%2,352,997 (7)%
Federal Home Loan Bank (“FHLB”) stock and other investments60,213 59,962 — %87,109 (31)%
Loans held for sale, at the lower of cost or fair value49,246 125,268 (61)%76,376 (36)%
Loans receivable14,864,810 15,064,849 (1)%14,546,049 2 %
Allowance for credit losses(172,996)(163,544)6 %(151,580)14 %
  Net loans receivable14,691,814 14,901,305 (1)%14,394,469 2 %
Accrued interest receivable60,118 57,021 5 %37,845 59 %
Premises and equipment, net50,513 47,887 5 %46,093 10 %
Bank owned life insurance88,238 87,842 — %77,692 14 %
Goodwill464,450 464,450 — %464,450 — %
Servicing assets11,532 11,628 (1)%11,215 3 %
Other intangible assets, net4,830 5,278 (8)%6,698 (28)%
Other assets396,499 363,617 9 %337,056 18 %
  Total assets$20,366,138 $20,568,884 (1)%$18,089,062 13 %
Liabilities:
Deposits$15,619,352 $15,828,209 (1)%$15,029,630 4 %
FHLB and Federal Reserve Bank (“FRB”) borrowings2,260,000 2,130,000 6 %573,000 294 %
Convertible notes, net444 206,658 (100)%216,678 (100)%
Subordinated debentures107,188 106,875 — %105,953 1 %
Accrued interest payable109,236 53,818 103 %4,112 2,557 %
Other liabilities201,920 184,744 9 %159,320 27 %
  Total liabilities$18,298,140 $18,510,304 (1)%$16,088,693 14 %
Stockholders’ Equity:
Common stock, $0.001 par value$137 $137 — %$137 — %
Additional paid-in capital1,433,788 1,430,977 — %1,424,891 1 %
Retained earnings1,127,624 1,106,390 2 %1,011,715 11 %
Treasury stock, at cost(264,667)(264,667)— %(264,667)— %
Accumulated other comprehensive loss, net(228,884)(214,257)(7)%(171,707)(33)%
  Total stockholders’ equity2,067,998 2,058,580 — %2,000,369 3 %
  Total liabilities and stockholders’ equity$20,366,138 $20,568,884 (1)%$18,089,062 13 %
Common stock shares - authorized150,000,000 150,000,000 150,000,000 
Common stock shares - outstanding120,014,888 119,865,732 119,473,939 
Treasury stock shares17,382,835 17,382,835 17,382,835 
Table Page 1
Hope Bancorp, Inc.
Selected Financial Data
Unaudited
Three Months EndedSix Months Ended
6/30/20233/31/2023% change6/30/2022% change6/30/20236/30/2022% change
  Interest and fees on loans$225,671 $215,935 5 %$145,024 56 %$441,606 $277,696 59 %
  Interest on investment securities15,534 15,125 3 %12,308 26 %30,659 23,964 28 %
  Interest on cash and deposits at other banks25,295 4,922 414 %74 34,082 %30,217 211 14,221 %
  Interest on other investments684 695 (2)%418 64 %1,379 825 67 %
    Total interest income267,184 236,677 13 %157,824 69 %503,861 302,696 66 %
  Interest on deposits 109,724 92,348 19 %12,220 798 %202,072 20,896 867 %
  Interest on borrowings26,771 10,451 156 %4,066 558 %37,222 7,086 425 %
    Total interest expense136,495 102,799 33 %16,286 738 %239,294 27,982 755 %
Net interest income before provision (credit) for credit losses130,689 133,878 (2)%141,538 (8)%264,567 274,714 (4)%
Provision (credit) for credit losses8,900 1,700 424 %3,200 178 %10,600 (7,800)N/A
Net interest income after provision (credit) for credit losses121,789 132,178 (8)%138,338 (12)%253,967 282,514 (10)%
  Service fees on deposit accounts2,325 2,221 5 %2,270 2 %4,546 4,244 7 %
  Net gains on sales of SBA loans1,872 2,225 (16)%5,804 (68)%4,097 11,407 (64)%
  Net gains on sales of residential mortgage loans82 64 28 %76 8 %146 833 (82)%
  Other income and fees12,735 6,468 97 %4,596 177 %19,203 9,448 103 %
    Total noninterest income17,014 10,978 55 %12,746 33 %27,992 25,932 8 %
  Salaries and employee benefits52,305 57,169 (9)%51,058 2 %109,474 98,803 11 %
  Occupancy6,967 7,521 (7)%7,178 (3)%14,488 14,513 — %
  Furniture and equipment5,393 5,058 7 %4,778 13 %10,451 9,422 11 %
  Data processing and communications2,917 2,822 3 %2,893 1 %5,739 5,354 7 %
  FDIC assessment4,691 1,781 163 %1,450 224 %6,472 3,019 114 %
  Earned interest credit5,090 4,427 15 %835 510 %9,517 1,311 626 %
  Other9,970 11,576 (14)%12,173 (18)%21,546 23,316 (8)%
    Total noninterest expense87,333 90,354 (3)%80,365 9 %177,687 155,738 14 %
Income before income taxes51,470 52,802 (3)%70,719 (27)%104,272 152,708 (32)%
Income tax provision13,448 13,681 (2)%18,631 (28)%27,129 39,882 (32)%
Net income $38,022 $39,121 (3)%$52,088 (27)%$77,143 $112,826 (32)%
Earnings Per Common Share - Basic$0.32 $0.33 $0.43 $0.64 $0.94 
Earnings Per Common Share - Diluted$0.32 $0.33 $0.43 $0.64 $0.93 
Weighted Average Shares Outstanding - Basic119,953,174 119,551,247 120,219,919 119,753,321 120,175,894 
Weighted Average Shares Outstanding - Diluted120,129,359 120,242,295 120,699,638 120,179,443 120,898,605 
Table Page 2
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
For the Three Months Ended For the Six Months Ended
Profitability measures (annualized):6/30/20233/31/20236/30/20226/30/20236/30/2022
  ROA 0.74 %0.82 %1.17 %0.78 %1.27 %
  ROE 7.34 %7.65 %10.33 %7.49 %10.99 %
  ROA (PPNR) (1)
1.18 %1.14 %1.65 %1.16 %1.63 %
  ROE (PPNR) (1)
11.65 %10.65 %14.66 %11.15 %14.11 %
  ROTCE (1)
9.49 %9.93 %13.48 %9.70 %14.27 %
  Net interest margin2.70 %3.02 %3.36 %2.85 %3.28 %
  Efficiency ratio (not annualized)59.13 %62.38 %52.09 %60.74 %51.80 %
  Noninterest expense / average assets1.71 %1.89 %1.80 %1.80 %1.75 %
(1) ROA (PPNR), ROE (PPNR), and ROTCE are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.

Table Page 3
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended
6/30/20233/31/20236/30/2022
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale $15,105,212 $225,671 5.99 %$15,235,386 $215,935 5.75 %$14,327,476 $145,024 4.06 %
    Investment securities2,243,614 15,534 2.78 %2,248,479 15,125 2.73 %2,424,454 12,308 2.04 %
    Interest earning cash and deposits at
    other banks		1,996,924 25,295 5.08 %473,344 4,922 4.22 %64,545 74 0.46 %
    FHLB stock and other investments47,044 684 5.83 %47,043 695 5.99 %69,510 418 2.41 %
Total interest earning assets$19,392,794 $267,184 5.53 %$18,004,252 $236,677 5.33 %$16,885,985 $157,824 3.75 %
 
INTEREST BEARING LIABILITIES:
  Deposits:
    Money market and interest bearing demand$4,279,819 $34,377 3.22 %$5,341,057 $41,399 3.14 %$6,487,890 $8,655 0.54 %
    Savings deposits 216,060 674 1.25 %256,194 827 1.31 %323,114 937 1.16 %
    Time deposits6,890,035 74,673 4.35 %5,543,369 50,122 3.67 %2,277,938 2,628 0.46 %
    Total interest bearing deposits11,385,914 109,724 3.87 %11,140,620 92,348 3.36 %9,088,942 12,220 0.54 %
    FHLB and FRB borrowings2,177,264 23,622 4.35 %676,444 6,698 4.02 %577,966 1,457 1.01 %
    Convertible notes, net96,621 598 2.45 %217,114 1,322 2.44 %216,540 1,322 2.42 %
    Subordinated debentures103,123 2,551 9.79 %102,791 2,431 9.46 %101,880 1,287 5.00 %
Total interest bearing liabilities$13,762,922 $136,495 3.98 %$12,136,969 $102,799 3.44 %$9,985,328 $16,286 0.65 %
Noninterest bearing demand deposits4,366,820 4,662,139 5,715,830 
Total funding liabilities/cost of funds$18,129,742 3.02 %$16,799,108 2.48 %$15,701,158 0.42 %
Net interest income/net interest spread$130,689 1.55 %$133,878 1.89 %$141,538 3.10 %
Net interest margin2.70 %3.02 %3.36 %
Cost of deposits:
    Noninterest bearing demand deposits$4,366,820 $— — %$4,662,139 $— — %$5,715,830 $— — %
    Interest bearing deposits11,385,914 109,724 3.87 %11,140,620 92,348 3.36 %9,088,942 12,220 0.54 %
Total deposits$15,752,734 $109,724 2.79 %$15,802,759 $92,348 2.37 %$14,804,772 $12,220 0.33 %

Table Page 4
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Six Months Ended
6/30/20236/30/2022
InterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/Average
BalanceExpenseYield/CostBalanceExpenseYield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale$15,169,939 $441,606 5.87 %$14,100,983 $277,696 3.97 %
    Investment securities2,246,033 30,659 2.75 %2,522,293 23,964 1.92 %
    Interest earning cash and deposits at
    other banks		1,239,343 30,217 4.92 %173,836 211 0.24 %
    FHLB stock and other investments47,044 1,379 5.91 %68,974 825 2.41 %
Total interest earning assets$18,702,359 $503,861 5.43 %$16,866,086 $302,696 3.62 %
INTEREST BEARING LIABILITIES:
  Deposits:
    Money market and interest bearing demand$4,807,506 $75,775 3.18 %$6,413,292 $14,355 0.45 %
    Savings deposits 236,016 1,501 1.28 %320,824 1,865 1.17 %
    Time deposits6,220,422 124,796 4.05 %2,447,771 4,676 0.39 %
    Total interest bearing deposits11,263,944 202,072 3.62 %9,181,887 20,896 0.46 %
    FHLB and FRB borrowings1,431,000 30,320 4.27 %411,187 2,144 1.05 %
    Convertible notes, net156,535 1,920 2.44 %216,423 2,645 2.43 %
    Subordinated debentures102,958 4,982 9.62 %101,729 2,297 4.49 %
Total interest bearing liabilities$12,954,437 $239,294 3.73 %$9,911,226 $27,982 0.57 %
Noninterest bearing demand deposits4,513,664 5,694,418 
Total funding liabilities/cost of funds$17,468,101 2.76 %$15,605,644 0.36 %
Net interest income/net interest spread$264,567 1.70 %$274,714 3.05 %
Net interest margin2.85 %3.28 %
Cost of deposits:
    Noninterest bearing demand deposits$4,513,664 $— — %$5,694,418 $— — %
    Interest bearing deposits11,263,944 202,072 3.62 %9,181,887 20,896 0.46 %
Total deposits$15,777,608 $202,072 2.58 %$14,876,305 $20,896 0.28 %


Table Page 5
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
 Three Months Ended Six Months Ended
AVERAGE BALANCES:6/30/20233/31/2023% change6/30/2022% change6/30/20236/30/2022% change
Loans, including loans held for sale $15,105,212 $15,235,386 (1)%$14,327,476 5 %$15,169,939 $14,100,983 8 %
Investment securities2,243,614 2,248,479 — %2,424,454 (7)%2,246,033 2,522,293 (11)%
Interest earning cash and deposits at other banks1,996,924 473,344 322 %64,545 2994 %1,239,343 173,836 613 %
Interest earning assets19,392,794 18,004,252 8 %16,885,985 15 %18,702,359 16,866,086 11 %
Total assets20,468,810 19,087,170 7 %17,876,945 14 %19,781,806 17,810,045 11 %
Interest bearing deposits11,385,914 11,140,620 2 %9,088,942 25 %11,263,944 9,181,887 23 %
Interest bearing liabilities13,762,922 12,136,969 13 %9,985,328 38 %12,954,437 9,911,226 31 %
Noninterest bearing demand deposits4,366,820 4,662,139 (6)%5,715,830 (24)%4,513,664 5,694,418 (21)%
Stockholders’ equity2,072,859 2,046,159 1 %2,016,577 3 %2,059,583 2,053,461 — %
LOAN PORTFOLIO COMPOSITION: 6/30/20233/31/2023% change6/30/2022% change
Commercial and industrial (“C&I”) loans$4,805,126 $4,821,270 — %$4,395,738 9 %
Commercial real estate (“CRE”) loans9,192,160 9,373,529 (2)%9,335,020 (2)%
Residential mortgage and other loans867,524 870,050 — %815,291 6 %
 Loans receivable14,864,810 15,064,849 (1)%14,546,049 2 %
Allowance for credit losses(172,996)(163,544)6 %(151,580)14 %
    Loans receivable, net$14,691,814 $14,901,305 (1)%$14,394,469 2 %
CRE LOANS BY PROPERTY TYPE:6/30/20233/31/2023% change6/30/2022% change
Multi-tenant retail$1,778,068 $1,817,874 (2)%$2,603,516 (32)%
Hotels/motels868,286 900,990 (4)%1,143,982 (24)%
Gas stations and car washes1,042,290 1,046,528 — %1,080,777 (4)%
Mixed-use facilities834,948 818,227 2 %833,342 — %
Industrial warehouses1,301,075 1,309,763 (1)%1,279,647 2 %
Multifamily1,257,971 1,302,597 (3)%989,840 27 %
Single-tenant retail690,418 706,593 (2)%720,413 (4)%
Office463,998 464,703 — %440,593 5 %
All other955,106 1,006,254 (5)%242,910 293 %
  Total CRE loans$9,192,160 $9,373,529 (2)%$9,335,020 (2)%
DEPOSIT COMPOSITION6/30/20233/31/2023% change6/30/2022% change
Noninterest bearing demand deposits$4,229,247 $4,504,621 (6)%$5,689,992 (26)%
Money market and interest bearing demand4,188,584 4,331,998 (3)%6,339,467 (34)%
Savings deposits224,495 231,704 (3)%326,927 (31)%
Time deposits 6,977,026 6,759,886 3 %2,673,244 161 %
  Total deposits$15,619,352 $15,828,209 (1)%$15,029,630 4 %

Table Page 6
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

CAPITAL & CAPITAL RATIOS:6/30/20233/31/20236/30/2022
Total stockholders’ equity$2,067,998 $2,058,580 $2,000,369 
Total capital$2,102,625 $2,068,433 $1,948,953 
Common equity tier 1 ratio11.06 %10.75 %10.69 %
Tier 1 capital ratio 11.68 %11.36 %11.33 %
Total capital ratio 12.64 %12.25 %12.13 %
Leverage ratio 9.57 %10.13 %10.32 %
Total risk weighted assets$16,639,593 $16,886,419 $16,066,709 
Book value per common share$17.23 $17.17 $16.74 
TCE per share (1)
$13.32 $13.26 $12.80 
TCE ratio (1)
8.04 %7.91 %8.68 %
(1) TCE per share and TCE ratio are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the accompanying financial information on Table Page 10.
Three Months EndedSix Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Balance at beginning of period$163,544 $162,359 $160,561 $151,580 $147,450 $162,359 $140,550 
ASU 2022-02 day 1 adoption impact— (407)— — — (407)— 
Provision (credit) for credit losses8,900 1,700 8,200 9,200 3,200 10,600 (7,800)
Recoveries1,531 387 3,222 331 1,642 1,918 21,045 
Charge offs (979)(495)(9,624)(550)(712)(1,474)(2,215)
Balance at end of period$172,996 $163,544 $162,359 $160,561 $151,580 $172,996 $151,580 
Net recoveries (charge offs)/average loans receivable (annualized)0.01 %— %(0.17)%(0.01)%0.03 %0.01 %0.27 %
6/30/20233/31/202312/31/20229/30/20226/30/2022
Allowance for unfunded loan commitments$3,081 $2,971 $1,351 $1,231 $1,481 
Three Months EndedSix Months Ended
NET LOAN RECOVERIES (CHARGE OFFS):6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
CRE loans$(438)$109 $(2,022)$(9)$508 $(329)$16,926 
C&I loans1,091 (196)(4,174)(115)461 895 1,990 
Residential mortgage and other loans(101)(21)(206)(95)(39)(122)(86)
Net loan recoveries (charge offs)$552 $(108)$(6,402)$(219)$930 $444 $18,830 
Table Page 7
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
NONPERFORMING ASSETS:6/30/20233/31/202312/31/20229/30/20226/30/2022
Loans on nonaccrual status (1)
$61,252 $78,861 $49,687 $64,571 $69,522 
Accruing delinquent loans past due 90 days or more15,182 364 401 5,306 12,468 
Accruing troubled debt restructured loans (2)
— — 16,931 25,631 26,572 
Total nonperforming loans76,434 79,225 67,019 95,508 108,562 
Other real estate owned (“OREO”)938 938 2,418 1,480 2,010 
Total nonperforming assets$77,372 $80,163 $69,437 $96,988 $110,572 
Nonperforming assets/total assets0.38 %0.39 %0.36 %0.51 %0.61 %
Nonperforming assets/loans receivable & OREO0.52 %0.53 %0.45 %0.63 %0.76 %
Nonperforming assets/total capital3.74 %3.89 %3.44 %4.91 %5.53 %
Nonperforming loans/loans receivable0.51 %0.53 %0.44 %0.62 %0.75 %
Nonaccrual loans/loans receivable0.41 %0.52 %0.32 %0.42 %0.48 %
Allowance for credit losses/loans receivable1.16 %1.09 %1.05 %1.04 %1.04 %
Allowance for credit losses/nonperforming loans226.33 %206.43 %242.26 %168.11 %139.63 %
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $11.9 million, $7.6 million, $9.8 million, $9.9 million, and $13.2 million, at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.
(2) The Company adopted ASU 2022-02 in 2023, which eliminated the concept of TDR from GAAP; therefore, accruing TDR loans are no longer included in nonperforming loans.
NONACCRUAL LOANS BY TYPE:6/30/20233/31/202312/31/20229/30/20226/30/2022
CRE loans$29,270 $44,376 $33,915 $47,807 $53,966 
C&I loans23,042 26,191 5,620 7,675 8,206 
Residential mortgage and other loans8,940 8,294 10,152 9,089 7,350 
   Total nonaccrual loans$61,252 $78,861 $49,687 $64,571 $69,522 
Table Page 8
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:6/30/20233/31/202312/31/20229/30/20226/30/2022
30 - 59 days past due$9,295 $7,662 $7,049 $13,092 $10,090 
60 - 89 days past due178 249 2,243 4,933 6,354 
   Total accruing delinquent loans 30-89 days past due$9,473 $7,911 $9,292 $18,025 $16,444 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:6/30/20233/31/202312/31/20229/30/20226/30/2022
CRE loans$7,339 $3,652 $4,115 $9,694 $7,919 
C&I loans990 419 3,300 6,165 3,397 
Residential mortgage and other loans1,144 3,840 1,877 2,166 5,128 
   Total accruing delinquent loans 30-89 days past due$9,473 $7,911 $9,292 $18,025 $16,444 
CRITICIZED LOANS:6/30/20233/31/202312/31/20229/30/20226/30/2022
Special mention loans$210,806 $166,472 $157,263 $79,399 $95,797 
Substandard loans134,203 138,224 104,073 204,713 244,748 
   Total criticized loans$345,009 $304,696 $261,336 $284,112 $340,545 
Table Page 9
Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except share and per share data)

Reconciliation of GAAP financial measures to non-GAAP financial measures
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 management are provided below.
Three Months EndedSix Months Ended
RETURN ON AVERAGE TANGIBLE COMMON EQUITY6/30/20233/31/20236/30/20226/30/20236/30/2022
Average stockholders’ equity$2,072,859 $2,046,159 $2,016,577 $2,059,583 $2,053,461 
Less: Average goodwill and core deposit intangible assets, net(469,515)(469,992)(471,421)(469,752)(471,669)
Average TCE$1,603,344 $1,576,167 $1,545,156 $1,589,831 $1,581,792 
Net income$38,022 $39,121 $52,088 $77,143 $112,826 
ROTCE (annualized)9.49 %9.93 %13.48 %9.70 %14.27 %
TANGIBLE COMMON EQUITY6/30/20233/31/20236/30/2022
Total stockholders’ equity$2,067,998 $2,058,580 $2,000,369 
Less: Goodwill and core deposit intangible assets, net(469,280)(469,728)(471,148)
TCE$1,598,718 $1,588,852 $1,529,221 
Total assets$20,366,138 $20,568,884 $18,089,062 
Less: Goodwill and core deposit intangible assets, net(469,280)(469,728)(471,148)
Tangible assets$19,896,858 $20,099,156 $17,617,914 
TCE ratio8.04 %7.91 %8.68 %
Common shares outstanding120,014,888 119,865,732 119,473,939 
TCE per share$13.32 $13.26 $12.80 
Three Months EndedSix Months Ended
PRE-PROVISION NET REVENUE6/30/20233/31/20236/30/20226/30/20236/30/2022
Net interest income before provision (credit) for credit losses$130,689 $133,878 $141,538 $264,567 $274,714 
Noninterest income17,014 10,978 12,746 27,992 25,932 
Revenue147,703 144,856 154,284 292,559 300,646 
Less noninterest expense87,333 90,354 80,365 177,687 155,738 
PPNR$60,370 $54,502 $73,919 $114,872 $144,908 
Average assets$20,468,810 $19,087,170 $17,876,945 $19,781,806 $17,810,045 
ROA (PPNR) (annualized)1.18 %1.14 %1.65 %1.16 %1.63 %
Average stockholders’ equity2,072,859 2,046,159 2,016,577 2,059,583 2,053,461 
ROE (PPNR) (annualized)11.65 %10.65 %14.66 %11.15 %14.11 %
Table Page 10