Hope Bancorp : Fourth Quarter 2021 Earnings Conference Presentation

2021

Fourth Quarter and Full-Year

Earnings Conference Call

Tuesday, January 25, 2022

Forward Looking Statements & Additional Disclosures

This presentation contains 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 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 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, including the timing and effects of the implementation of the current expected credit losses model; 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.

Q4 2021 Financial Highlights

Net Income

$51.6M

Diluted EPS

$0.43

Gross Loans

$13.95B

Total Deposits

$15.04B

Earnings & Profitability

• Net interest income before provision for credit losses increased 2% to $133.3 million
• Efficiency ratio improved 288bps Q-o-Q to 50.70%; noninterest expense to average assets improved 3bps to 1.67%
• PPNR1 increased 10% Q-o-Q to $72.2million
• Net interest margin expanded 6bps Q-o-Q largely reflecting redeployment of excess liquidity

Loans

• New loan production increased 23% Q-o-Q to a record $1.24 billion from $1.01 billion in 3Q21
• Excluding PPP, loans receivable increased 4.9% Q-o-Q, or 19.6% annualized

Deposits

• Average noninterest bearing deposits increased 2.0% Q-o-Q
• Cost of interest-bearing deposits and total cost of deposits each decreased 3 basis points Q-o-Q

Asset Quality

• Total nonperforming assets decreased to $111.8 million
• Total criticized loans decreased 9.2% Q-o-Q
• Net recoveries of $2.3 million related to a large loan charged off in 3Q21

1 PPNR (pre-provision net revenue) is a non-GAAP financial measure. A quantitative reconciliation of the GAAP to non-GAAP financial measure is provided

on Slide 16.	3

Loan Production & Portfolio Trends

New Loan Originations Funded

($ Millions)

Q-o-Q increase
3.27%	3.44%	3.37%1	3.36%1	3.38%

$1,242.9

											$1,009.2	$81
$844.2			$847.1					$894.1	$75
						$53	+23% $539
$65			$71
							+13% $344
					$160	+6%	$301
+0%
$439			$305					$20
										$520	$590	$623
$340
		$311
	4Q20	1Q21					2Q21			3Q21						4Q21
		CRE		PPP					C&I		Consumer						Average Rate
																			(Excluding PPP loans)

1 Represents average rate on new loans excluding PPP loans. Including PPP loans, the average rateon new loan originations was 2.56% for 1Q21 and 3.32% for 2Q21

• New loan originations funded increased 23.2% Q-o-Q to a record high $1.24 billion

• New loan production reflects a diverse mix of 50% CRE, 43% C&I and 7% Consumer loans

• Average rate on new loans increased 2bps Q-o-Q

Loans Receivable (Excluding PPP)

($ Billions)

Q-o-Q increase

13 .85		$13.72
13 65.
13 45.
13 25.	$13.11
	$13.08
13 05.	$12.99	+5%
		$12.86

12	.85	-1%
		-1%	+2%
12	65.

12 45.

12 25.

12/31/20 3/31/21 6/30/21 9/30/21 12/31/21

Loans Receivable (Excluding PPP)

• Loans receivable increased 4.0% Q-o-Q, or 15.9% annualized
• Excluding PPP, loans receivable increased 4.9% Q-o-Q, or 19.6% annualized
• Aggregate payoffs and paydowns decreased to $881.3 million from

$904.7 million in 3Q21

4

Net Interest Income and Margin

Net Interest Income & NIM

($ Millions)

Q-o-Q increase

$133.3

$130.3

											$126.6										+2%
				$122.6
									+3%
$120.8
							+3%
				+2%
																									3.13%
											3.11%
											3.07%
				3.06%
3.02%
	4Q20			1Q21			2Q21							3Q21			4Q21
										Net Interest Income							NIM

• Net interest income increased 2% Q-o-Q and 10% Y-o-Y reflecting higher interest income on loans and investment securities and lower interest expense on deposits

	Net Interest Margin
	+2bps
+6bps	3.13%

Deposit cost	-2bps
decline	Loan yield
	decline
	(including accretion)

3.07%

Net cash

deployment

4Q21 net interest margin increased 6bps Q-o-Q

3Q21

4Q21

Increase Decrease Total

• 6bps improvement in net interest margin largely benefitting from redeployment of excess liquidity into loans

5