hope-20200730
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

July 30, 2020
Date of Report (Date of earliest event reported)
HOPE BANCORP INC
(Exact name of registrant as specified in its charter)
Delaware000-5024595-4849715
(State of incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

3200 Wilshire Boulevard, Suite 1400
Los Angeles, California 90010
(Address of principal executives offices, including zip code)

(213) 639-1700
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Common Stock,par value $0.001 per shareHOPENASDAQ Global Select Market
(Title of class)(Trading Symbol)(Name of exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02 Results of Operations and Financial Condition.

On July 30, 2020, Hope Bancorp, Inc. (“HOPE” or the “Company”) issued a news release concerning its results of operations and financial condition for the second quarter and six-month periods ended and as of June 30, 2020. A copy of the July 30, 2020 press release is attached hereto as Exhibit 99.1.

Item 8.01 Other Events.
On July 30, 2020, the Company issued a news release announcing that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The cash dividend is payable on or about August 24, 2020 to all stockholders of record as of the close of business on August 10, 2020. A copy of the July 30, 2020 press release is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure

The Company previously announced that it will host an investor conference call on Wednesday, July 31, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its second quarter and six-month periods ended June 30, 2020. A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available at the Investor Relations section of Hope Bancorp’s website at www.ir-hopebancorp.com. A copy of the Presentation Materials is attached hereto as Exhibit 99.3.

The information included in this report pursuant to Item 2.02, Item 8.01 and Item 7.01 of Form 8-K (including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

The following risk factor supplements the “Risk Factors” section in our 2019 Form 10-K.

The COVID-19 pandemic has had a material and adverse impact on our business, financial condition and results of operations, and the further impact will depend on future developments that cannot be predicted, including the scope and duration of the pandemic, the economic implications of the same, and the actions taken by governmental authorities in response to the pandemic.

The novel COVID-19 pandemic has substantially and negatively impacted the United States economy, disrupted global supply chains, considerably lowered equity market valuations, created significant volatility and disruption in financial markets, and materially increased unemployment levels. In addition, the pandemic has resulted in temporary closures of countless businesses and the institution of social distancing and sheltering in place requirements in most states and communities. As a result, the demand for our products and services has been and likely will continue to be significantly adversely impacted, which could materially and adversely affect our financial condition and results of operations. Furthermore, the pandemic could result in the recognition of amplified credit losses in our loan portfolios and increases in our allowance for loan losses, particularly if businesses remain closed and our customers draw on their lines of credit. Similarly, because of changing economic and market conditions, we may be required to recognize impairments on goodwill or the securities we hold. Our business operations may also be further disrupted if significant portions of our workforce are unable to work effectively, including because of challenges arising as a result of circumstances related to working from home, illness, quarantines, government actions, or other restrictions in connection with the pandemic, and we have already temporarily closed certain of our branches. In response to the pandemic, we have also suspended residential property foreclosure sales, evictions, and involuntary automobile repossessions, and are offering payment deferrals and other expanded assistance for credit card, mortgage and small business lending customers, and future governmental actions may require these and other types of customer-related responses. In addition, we may take capital actions in response to the COVID-19 pandemic. The extent to which the COVID-19 pandemic continues to impact our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments that cannot be predicted, including the scope and duration of the pandemic, the economic implications of the same and actions taken by governmental authorities and other third parties in response to the pandemic.





Item 9.01 Financial Statements and Exhibits

(d) Exhibits
Exhibit No.Description of Exhibit
99.1
99.2
99.3
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HOPE BANCORP, INC.
Date: July 31, 2020By:/s/ Kevin S. Kim
Kevin S. Kim
Chairman, President and Chief Executive Officer





EXHIBIT INDEX
Exhibit No.Description of Exhibit
99.1
99.2
99.3
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)




Document

News Release


HOPE BANCORP REPORTS 2020 SECOND QUARTER FINANCIAL RESULTS


LOS ANGELES - July 30, 2020 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its three and six-month periods ended June 30, 2020.

For the three months ended June 30, 2020, net income totaled $26.8 million, or $0.22 per diluted common share, compared with $26.0 million, or $0.21 per diluted common share for the 2020 first quarter. In the year-ago second quarter, net income totaled $42.7 million, or $0.34 per diluted common share.

“The second quarter of 2020 represented the most challenging operating environment in the history of our Bank, with the COVID-19 crisis exacerbated by the aggregate 150 basis point reduction in the Fed Funds rate in March and the mounting social justice movement across the nation,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “Notwithstanding these strong headwinds, I am proud of how the entire Bank of Hope team came together and has been managing through this difficult period. We delivered solid loan production, significant core deposit growth and positive deposit cost trends as well as meaningful cost reductions. We also supported many of our customers impacted by COVID-19 with modifications under the CARES Acts during the quarter and maintained relatively stable asset quality metrics. While our net interest margin was heavily impacted by the rate cuts as well as a buildup of our liquidity and resulting excess cash balances, we believe this quarter represents the trough. Going forward, we expect stable loan yields, continued reductions in our deposit costs and the deployment of excess cash balances will lead to an expansion of our net interest margin in the coming quarters.

“We are in the late stages of developing additional initiatives in light of the new normal designed to restructure our balance sheet and contain expenses to further optimize our operational performance. We believe the near-term implementation of these initiatives will lead to improved profitability as we progress through the year and beyond. With our robust capital and liquidity positions as well as the successes achieved to date with our deposit initiatives, we have great confidence in our ability to navigate through this new landscape and emerge as an even stronger regional bank to support the financial needs of our customers and communities and deliver greater value to our shareholders.”

Q2 2020 Highlights
New loan originations totaled $832 million, including $480 million of PPP loans, which led to a 2.3% increase in loans receivable quarter-over-quarter, or 9% annualized.
Total deposits increased 10.0% quarter-over-quarter, of which the vast majority of the growth was in noninterest bearing demand deposits.
Continuation of favorable mix-shift to lower-cost core deposits contributed to a 47 basis point reduction quarter-over-quarter in total deposit costs.
NIM compression of 52 basis points represents the trough, with expansion expected going forward from stable loan yields, continued reduction in deposit costs and deployment of excess cash.
Strategic reductions in noninterest expenses contributed to an improved 1.60% ratio as a percentage of average assets, versus 1.87% in the preceding first quarter.
Continued buildup of reserves with allowance for credit losses as a percentage of loans receivable increasing to 1.26% at June 30, 2020 from 1.15% at March 31, 2020.

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Financial Highlights
(dollars in thousands, except per share data) (unaudited)At or for the Three Months Ended
6/30/20203/31/20206/30/2019
Net income$26,753  $25,953  $42,681  
Diluted earnings per share$0.22  $0.21  $0.34  
Net interest income before provision for credit losses$109,814  $119,291  $117,221  
Net interest margin2.79 %3.31 %3.31 %
Noninterest income$11,240  $13,264  $12,287  
Noninterest expense$67,030  $72,140  $71,371  
Net loans receivable$12,710,063  $12,438,493  $11,883,068  
Deposits$14,123,532  $12,836,567  $12,172,384  
Total cost of deposits0.87 %1.34 %1.62 %
Nonaccrual loans (1) (2)
$82,137  $72,639  $64,934  
Nonperforming loans to loans receivable (1) (2)
1.06 %0.93 %0.89 %
ACL to loans receivable (3)
1.26 %1.15 %0.79 %
ACL to nonaccrual loans (1) (2) (3)
196.95 %199.51 %144.86 %
ACL to nonperforming assets (1) (2) (3)
102.95 %103.62 %84.24 %
Provision for credit losses$17,500  $28,000  $1,200  
Net charge offs$652  $3,421  $1,351  
Return on average assets (“ROA”)0.64 %0.67 %1.12 %
Return on average equity (“ROE”)5.31 %5.12 %8.71 %
Return on average tangible common equity (“ROTCE”) (4)
6.94 %6.69 %11.51 %
Noninterest expense / average assets1.60 %1.87 %1.88 %
Efficiency ratio55.37 %54.42 %55.11 %

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation.
(2) Excludes purchased credit impaired (“PCI”) loans for June 30, 2019.
(3) Allowance for credit losses for current-year periods were calculated under the CECL methodology while allowance for loan losses for the prior-year period was calculated under the incurred loss methodology.
(4) Return on average tangible common equity is a non-GAAP financial measure. A reconciliation of the Company’s return on average tangible common equity is provided in the accompanying financial information on Table Page 10.


Operating Results for the 2020 Second Quarter
Net interest income before provision for credit losses for the 2020 second quarter totaled $109.8 million, compared with $119.3 million in the 2020 first quarter. The decrease primarily reflects a full quarter’s impact of the aggregate 150 basis point decrease in the Fed Funds rate in March 2020, along with a large payoff of an acquired loan that contributed $5.6 million in purchase accounting discount accretion in the first quarter of 2020. Net interest income before provision for credit losses amounted to $117.2 million in the year-ago second quarter.

The net interest margin for the 2020 second quarter decreased 52 basis points to 2.79% from 3.31% in the preceding first quarter and was primarily impacted by the Fed Funds rate reductions and a significant increase in lower-yielding cash balances as the Company temporarily increased its excess liquidity as a precautionary measure in light of the COVID-19 pandemic. In addition, the large payoff mentioned above benefited the 2020 first quarter net interest margin by 16 basis points. The net interest margin for the 2019 second quarter was 3.31%.

The weighted average yield on loans for the 2020 second quarter decreased 83 basis points to 4.23% from 5.06% in the 2020 first quarter, reflecting the repricing of variable rate loans in the Company’s portfolio as a result of the 150 basis point reduction in the Fed Funds rate. In the year-ago second quarter, the weighted average yield on loans was 5.32%.

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The weighted average cost of deposits for the 2020 second quarter decreased 47 basis points to 0.87% from 1.34% for the 2020 first quarter and decreased 75 basis points from 1.62% for the year-ago second quarter. The significant improvements in the weighted average cost of deposits reflects the Company’s ongoing success with its initiative to enhance its deposit mix to favor lower-cost core deposits.

Noninterest income totaled $11.2 million for the 2020 second quarter, compared with $13.3 million for the preceding first quarter and $12.3 million for the 2019 second quarter. The Company noted a 38% reduction in service fees on deposit accounts as transaction volumes decreased significantly in the midst of the COVID-19 related lockdowns. In addition, the net gains on sales of other loans in the preceding first quarter included gains from a bulk sale of residential mortgage loans, together with sales of new residential mortgage originations.

Noninterest expense for the 2020 second quarter declined 7% to $67.0 million from $72.1 million in the preceding first quarter, with reductions in compensation expense and professional fees being the largest factors driving the improvement. In the year-ago second quarter, noninterest expense totaled $71.4 million. Noninterest expense as a percentage of average assets for the 2020 second quarter improved to 1.60% from 1.87% for the 2020 first quarter and 1.88% for the 2019 second quarter.

Salaries and employee benefits expense for the 2020 second quarter decreased 9% to $38.9 million from $42.5 million for the 2020 first quarter. The Company noted that PPP loan origination costs of $5.2 million was a material factor in the reduced compensation expense for the current quarter. In the 2019 second quarter, salaries and employee benefits expense totaled $39.3 million.

The effective tax rate for the 2020 second quarter was 26.8%, compared with 19.9% for the preceding first quarter, reflecting the Company’s projections for increased pretax income in the second half of 2020 than previously budgeted. In the year-ago second quarter, the effective tax rate was 25.0%.

Balance Sheet Summary
New loan originations funded during the 2020 second quarter totaled $832.0 million and included SBA PPP loan originations of $480.1 million, traditional SBA loan production of $5.9 million and residential mortgage loan originations of $72.3 million. This compares with 2020 first quarter originations of $624.5 million, including traditional SBA loan production of $49.8 million and residential mortgage loan originations of $37.4 million. In the year-ago second quarter, new loan originations funded totaled $503.9 million, including SBA loan production of $37.2 million and residential mortgage loan originations of $74.0 million.

At June 30, 2020, loans receivable increased 2.3% to $12.87 billion from $12.58 billion at March 31, 2020 and increased 7.5% from $11.98 billion at June 30, 2019.

Total deposits at June 30, 2020 increased by $1.29 billion, or 10.0% quarter-over-quarter, to $14.12 billion from $12.84 billion at March 31, 2020, with $1.03 billion of the increase in noninterest bearing demand deposits, of which approximately $326 million is identified as being related to PPP loans that the Company originated. Total deposits at June 30, 2019 amounted to $12.17 billion. The increases in total deposits versus the comparable periods reflect a continuation of a positive shift in the mix of deposits favoring core deposits over the last year.

Following is the deposit composition as of June 30, 2020, March 31, 2020 and June 30, 2019:
(dollars in thousands) (unaudited)6/30/20203/31/2020% change6/30/2019% change
  Noninterest bearing demand deposits$4,036,383  $3,010,143  34 %$3,009,218  34 %
  Money market and other4,831,679  4,851,000  — %3,238,947  49 %
  Saving deposits296,614  272,577  %243,859  22 %
  Time deposits 4,958,856  4,702,847  %5,680,360  (13)%
    Total deposit balances$14,123,532  $12,836,567  10 %$12,172,384  16 %

Reflecting the continued favorable mix-shift in deposits, total cost of deposits decreased 47 basis points to 0.87% from 1.34% for the 2020 first quarter and decreased 75 basis points from 1.62% for the 2019 second quarter.
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Allowance for Credit Losses
The 2020 second quarter provision for credit losses under the CECL methodology was $17.5 million, compared with $28.0 million for the preceding first quarter. This compares with a provision for loan losses under the prior incurred loss methodology of $1.2 million for the 2019 second quarter.

The provision for credit losses for the 2020 second quarter reflects updated macroeconomic variables incorporating the Moody’s Analytics Baseline scenario published June 2020, enhanced qualitative factors in the Company’s ACL methodology, relatively stable asset quality metrics and minimal credit losses, as well as an additional Management overlay to accounts related to COVID-19 modifications.

The ACL as of June 30, 2020 increased to $161.8 million from $144.9 million at March 31, 2020 and from $94.1 million at June 30, 2019. As a percentage of loans receivable (excluding loans held for sale), the ACL rose to 1.26% at June 30, 2020 from 1.15% at March 31, 2020 and from 0.79% at June 30, 2019. The coverage ratio of the ACL to nonperforming loans was 118.82%, 124.06% and 88.73% at June 30, 2020, March 31, 2020 and June 30, 2019, respectively.
 (unaudited)(dollars in thousands)
Allowance for loan losses - Dec 31, 2019$94,144  
CECL day 1 adoption impact26,200  
Allowance for credit losses - Jan 1, 2020120,344  
Provision for credit losses28,000  
Recoveries2,536  
Charge offs(5,957) 
Allowance for credit losses - Mar 31, 2020$144,923  
Provision for credit losses17,500  
Recoveries252  
Charge offs(904) 
Allowance for credit losses - June 30, 2020$161,771  

Credit Quality
Following are the components of nonperforming assets as of June 30, 2020, March 31, 2020 and June 30, 2019:
(dollars in thousands) (unaudited)6/30/20203/31/20206/30/2019
Loans on nonaccrual status (1)
$82,137  $72,639  $64,934  
Delinquent loans 90 days or more on accrual status (2)
9,986  387  353  
Accruing troubled debt restructured loans44,026  43,789  40,731  
Total nonperforming loans136,149  116,815  106,018  
Other real estate owned20,983  23,039  5,644  
Total nonperforming assets$157,132  $139,854  $111,662  

(1)  Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $30.3 million, $28.8 million and $32.1 million, at June 30, 2020, March 31, 2020 and June 30, 2019, respectively.
(2) Excludes PCI loans totaling $17.6 million at June 30, 2019.

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Following are the components of criticized loan balances as of June 30, 2020, March 31, 2020 and June 30, 2019:
(dollars in thousands) (unaudited)6/30/20203/31/20206/30/2019
Special Mention$127,149$122,279$186,485
Classified299,368278,783323,842
     Criticized$426,517$401,062$510,327

During the 2020 second quarter, net charge offs were minimal at $652,000, or 0.02% of average loans receivable on an annualized basis. This compares with net charge offs of $3.4 million, or 0.11% of average loans receivable on an annualized basis for the 2020 first quarter and net charge offs for the 2019 second quarter of $1.4 million, or 0.05% of average loans receivable on an annualized basis.

Individually evaluated loans (previously referred to as impaired loans prior to the adoption of CECL) totaled $116.1 million at June 30, 2020. This compares with individually evaluated loans of $118.7 million at March 31, 2020 and impaired loans of $106.0 million at June 30, 2019. The Company attributed $22.2 million of the increase in individually evaluated loans in the 2020 first quarter to the reclassification of PCD (formerly purchased credit-impaired loans) due to the implementation of the new CECL accounting standards.

Capital
At June 30, 2020, the Company and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” financial institution. Following are capital ratios for the Company as of June 30, 2020, March 31, 2020 and June 30, 2019:
Hope Bancorp, Inc. (unaudited)
6/30/20203/31/20206/30/2019Minimum Guideline for “Well-Capitalized” Bank
Common Equity Tier 1 Capital11.50%11.44%11.90%6.50%
Tier 1 Leverage Ratio10.08%10.88%10.94%5.00%
Tier 1 Risk-Based Ratio12.24%12.19%12.67%8.00%
Total Risk-Based Ratio13.23%13.06%13.42%10.00%

As previously announced, the Company has elected to defer the impact of the adoption of CECL for two years, at which time the impact will be phased-in over a three year period. Therefore, the Day 1 CECL adjustment has not had an impact to the Company’s regulatory capital ratios as of June 30, 2020.

Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of June 30, 2020, March 31, 2020 and June 30, 2019:
(unaudited)6/30/20203/31/20206/30/2019
Tangible common equity per share (1)
$12.62$12.52$11.98
Tangible common equity to tangible assets (2)
9.32%9.92%10.21%

(1) Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Both tangible common equity and tangible common equity per share are non-GAAP financial measures. A reconciliation of the Company’s total stockholders’ equity to tangible common equity is provided in the accompanying financial information on Table Page 10.
(2) Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity to tangible assets is a non-GAAP financial measure. A reconciliation of the Company’s total assets to tangible assets is provided in the accompanying financial information on Table Page 10.



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Management reviews tangible common equity to tangible assets ratio in evaluating the Company’s and the Bank’s capital levels and has included these figures and tangible common equity per share figures in response to market participant interest in tangible common equity as a measure of capital. A reconciliation of the GAAP to non-GAAP financial measures is provided in the accompanying financial information.


Investor Conference Call

The Company previously announced that it will host an investor conference call on Friday, July 31, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its second quarter ended June 30, 2020. 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 in 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 August 7, 2020, replay access code 10146201.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean-American bank in the United States with $17.2 billion in total assets as of June 30, 2020. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 58 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; 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 and commercial 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.

Forward-Looking Statements

Some statements in this press 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 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 and Quarterly Report on Form 10-Q. 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.



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Contacts:
Alex Ko
EVP & Chief Financial Officer
213-427-6560
alex.ko@bankofhope.com


Angie Yang
SVP, Director of Investor Relations &
Corporate Communications
213-251-2219
angie.yang@bankofhope.com


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

Assets:6/30/20203/31/2020% change12/31/2019% change6/30/2019% change
Cash and due from banks$1,468,949  $802,033  83 %$698,567  110 %$609,795  141 %
Securities available for sale, at fair value1,887,604  1,718,702  10 %1,715,987  10 %1,826,903  %
Federal Home Loan Bank (“FHLB”) stock and other investments98,357  96,956  %97,659  %100,962  (3)%
Loans held for sale, at the lower of cost or fair value11,350  8,281  37 %54,271  (79)%6,426  77 %
Loans receivable12,871,834  12,583,416  %12,276,007  %11,977,134  %
Allowance for credit losses(161,771) (144,923) 12 %(94,144) 72 %(94,066) 72 %
  Net loans receivable12,710,063  12,438,493  %12,181,863  %11,883,068  %
Accrued interest receivable52,859  30,450  74 %30,772  72 %33,980  56 %
Premises and equipment, net51,029  51,392  (1)%52,012  (2)%52,552  (3)%
Bank owned life insurance77,050  76,429  %76,339  %75,963  %
Goodwill464,450  464,450  — %464,450  — %464,450  — %
Servicing assets14,164  14,847  (5)%16,417  (14)%19,997  (29)%
Other intangible assets, net10,770  11,302  (5)%11,833  (9)%12,947  (17)%
Other assets322,417  308,099  %267,270  21 %251,784  28 %
  Total assets$17,169,062  $16,021,434  %$15,667,440  10 %$15,338,827  12 %
Liabilities:
Deposits$14,123,532  $12,836,567  10 %$12,527,364  13 %$12,172,384  16 %
FHLB advances500,000  675,000  (26)%625,000  (20)%695,000  (28)%
Convertible notes, net201,987  200,716  %199,458  %196,977  %
Subordinated debentures103,602  103,318  — %103,035  %102,477  %
Accrued interest payable26,093  30,436  (14)%33,810  (23)%36,987  (29)%
Other liabilities183,072  157,309  16 %142,762  28 %139,830  31 %
  Total liabilities$15,138,286  $14,003,346  %$13,631,429  11 %$13,343,655  13 %
Stockholders’ Equity:
Common stock, $0.001 par value$136  $136  — %$136  — %$136  — %
Capital surplus 1,430,757  1,429,275  — %1,428,066  — %1,425,262  — %
Retained earnings761,734  752,228  %762,480  — %712,351  %
Treasury stock, at cost(200,000) (200,000) — %(163,820) (22)%(150,000) (33)%
Accumulated other comprehensive gain (loss), net38,149  36,449  %9,149  317 %7,423  414 %
  Total stockholders’ equity2,030,776  2,018,088  %2,036,011  — %1,995,172  %
  Total liabilities and stockholders’ equity$17,169,062  $16,021,434  %$15,667,440  10 %$15,338,827  12 %
Common stock shares - authorized150,000,000  150,000,000  150,000,000  150,000,000  
Common stock shares - outstanding123,239,276  123,169,404  125,756,543  126,673,822  
Treasury stock shares12,661,581  12,661,581  9,945,547  9,002,453  
Table Page 1

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

Three Months EndedSix Months Ended
6/30/20203/31/2020% change6/30/2019% change6/30/20206/30/2019% change
  Interest and fees on loans$134,190  $154,230  (13)%$158,627  (15)%$288,420  $316,763  (9)%
  Interest on securities9,891  10,609  (7)%11,866  (17)%20,500  24,185  (15)%
  Interest on federal funds sold and other investments980  2,029  (52)%2,973  (67)%3,009  5,648  (47)%
    Total interest income145,061  166,868  (13)%173,466  (16)%311,929  346,596  (10)%
  Interest on deposits 29,451  41,113  (28)%48,826  (40)%70,564  95,673  (26)%
  Interest on other borrowings and convertible notes5,796  6,464  (10)%7,419  (22)%12,260  14,094  (13)%
    Total interest expense35,247  47,577  (26)%56,245  (37)%82,824  109,767  (25)%
Net interest income before provision for credit losses109,814  119,291  (8)%117,221  (6)%229,105  236,829  (3)%
Provision for credit losses17,500  28,000  (38)%1,200  1,358 %45,500  4,200  983 %
Net interest income after provision for credit losses92,314  91,291  %116,021  (20)%183,605  232,629  (21)%
  Service fees on deposit accounts2,583  4,133  (38)%4,416  (42)%6,716  8,733  (23)%
  International service fees667  790  (16)%1,020  (35)%1,456  1,953  (25)%
  Loan servicing fees, net 1,106  365  203 %738  50 %1,471  1,467  — %
  Wire transfer fees 820  998  (18)%1,311  (37)%1,818  2,400  (24)%
  Net gains on sales of other loans1,678  1,855  (10)%1,066  57 %3,533  1,807  96 %
  Net gains on sales of securities available for sale—  —  100 %129  100 %129  (100)%
  Other income and fees4,386  5,123  (14)%3,607  22 %9,510  7,220  32 %
    Total noninterest income11,240  13,264  (15)%12,287  (9)%24,504  23,709  %
  Salaries and employee benefits38,850  42,502  (9)%39,297  (1)%81,352  79,726  %
  Occupancy7,043  7,410  (5)%7,839  (10)%14,453  15,516  (7)%
  Furniture and equipment4,654  4,259  %4,026  16 %8,913  7,472  19 %
  Advertising and marketing1,315  1,673  (21)%2,245  (41)%2,988  4,307  (31)%
  Data processing and communications2,274  2,631  (14)%2,587  (12)%4,905  5,543  (12)%
  Professional fees1,510  3,300  (54)%5,959  (75)%4,810  11,339  (58)%
  FDIC assessment1,652  1,559  %1,559  %3,211  3,110  %
  Credit related expenses1,361  1,662  (18)%1,549  (12)%3,023  2,227  36 %
  OREO expense (income), net1,338  843  59 %83  1,512 %2,181  (69) N/A
  Other7,033  6,301  12 %6,227  13 %13,334  13,033  %
    Total noninterest expense67,030  72,140  (7)%71,371  (6)%139,170  142,204  (2)%
Income before income taxes36,524  32,415  13 %56,937  (36)%68,939  114,134  (40)%
Income tax provision9,771  6,462  51 %14,256  (31)%16,233  28,695  (43)%
Net income $26,753  $25,953  %$42,681  (37)%$52,706  $85,439  (38)%
Earnings Per Common Share:
Basic$0.22  $0.21  $0.34  $0.43  $0.67  
Diluted$0.22  $0.21  $0.34  $0.42  $0.67  
Weighted Average Shares Outstanding:
Basic123,200,127  124,295,327  126,658,509  123,747,727  126,649,536  
Diluted123,430,891  124,676,296  126,870,455  124,054,291  126,842,870  
Table Page 2

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


For the Three Months Ended
(Annualized)
For the Six Months Ended
(Annualized)
Profitability measures:6/30/20203/31/20206/30/20196/30/20206/30/2019
  ROA 0.64 %0.67 %1.12 %0.65 %1.12 %
  ROE 5.31 %5.12 %8.71 %5.21 %8.81 %
  ROTCE (1)
6.94 %6.69 %11.51 %6.82 %11.68 %
  Net interest margin2.79 %3.31 %3.31 %3.04 %3.35 %
  Efficiency ratio55.37 %54.42 %55.11 %54.88 %54.58 %
  Noninterest expense / average assets1.60 %1.87 %1.88 %1.73 %1.87 %
(1) Average tangible equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we
     believe provides investors with information that is useful in understanding our financial performance and position.
Three Months EndedSix Months Ended
Pre-tax acquisition accounting adjustments and merger-related expenses:6/30/20203/31/20206/30/20196/30/20206/30/2019
Accretion on purchased non-impaired loans$658  $1,059  $1,799  $1,717  $3,965  
Accretion on purchased credit deteriorated/purchased credit impaired loans3,046  9,449  6,848  12,495  12,682  
Amortization of premium on low income housing tax credits(70) (71) (76) (141) (152) 
Amortization of premium on acquired FHLB borrowings—  —  —  —  1,280  
Accretion of discount on acquired subordinated debt(284) (283) (275) (567) (548) 
Amortization of core deposit intangibles(532) (531) (557) (1,063) (1,114) 
     Total acquisition accounting adjustments$2,818  $9,623  $7,739  $12,441  $16,113  

Table Page 3

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Three Months Ended
6/30/20203/31/20206/30/2019
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale $12,755,088  $134,190  4.23 %$12,259,848  $154,230  5.06 %$11,959,920  $158,627  5.32 %
    Securities available for sale 1,750,156  9,891  2.27 %1,712,033  10,609  2.49 %1,804,677  11,866  2.64 %
    FHLB stock and other investments 1,317,049  980  0.30 %519,309  2,029  1.57 %460,623  2,973  2.59 %
Total interest earning assets$15,822,293  $145,061  3.69 %$14,491,190  $166,868  4.63 %$14,225,220  $173,466  4.89 %
       
INTEREST BEARING LIABILITIES:
  Deposits:
    Demand, interest bearing $4,903,786  $7,563  0.62 %$4,204,406  $14,880  1.42 %$3,094,179  $14,019  1.82 %
    Savings 284,050  862  1.22 %274,075  808  1.19 %225,978  608  1.08 %
    Time deposits4,954,446  21,026  1.71 %4,900,405  25,425  2.09 %5,784,980  34,199  2.37 %
    Total interest bearing deposits10,142,282  29,451  1.17 %9,378,886  41,113  1.76 %9,105,137  48,826  2.15 %
    FHLB advances593,407  2,238  1.52 %594,890  2,647  1.79 %706,044  3,384  1.92 %
    Convertible notes, net201,169  2,358  4.64 %199,960  2,346  4.64 %196,244  2,310  4.66 %
    Subordinated debentures99,534  1,200  4.77 %99,252  1,471  5.86 %98,406  1,725  6.93 %
Total interest bearing liabilities$11,036,392  $35,247  1.28 %$10,272,988  $47,577  1.86 %$10,105,831  $56,245  2.23 %
Noninterest bearing demand deposits3,510,783  2,963,136  2,947,476  
Total funding liabilities/cost of funds$14,547,175  0.97 %$13,236,124  1.45 %$13,053,307  1.73 %
Net interest income/net interest spread$109,814  2.41 %$119,291  2.77 %$117,221  2.66 %
Net interest margin2.79 %3.31 %3.31 %
Cost of deposits:
    Noninterest bearing demand deposits$3,510,783  $—  — %$2,963,136  $—  — %$2,947,476  $—  — %
    Interest bearing deposits10,142,282  29,451  1.17 %9,378,886  41,113  1.76 %9,105,137  48,826  2.15 %
Total deposits$13,653,065  $29,451  0.87 %$12,342,022  $41,113  1.34 %$12,052,613  $48,826  1.62 %

Table Page 4

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
Six Months Ended
6/30/20206/30/2019
InterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/Average
BalanceExpenseYield/CostBalanceExpenseYield/Cost
INTEREST EARNING ASSETS:
    Loans, including loans held for sale $12,507,468  $288,420  4.64 %$12,023,690  $316,763  5.31 %
    Securities available for sale 1,731,094  20,500  2.38 %1,816,081  24,185  2.69 %
    FHLB stock and other investments 918,179  3,009  0.66 %433,293  5,648  2.63 %
Total interest earning assets$15,156,741  $311,929  4.14 %$14,273,064  $346,596  4.90 %
      
INTEREST BEARING LIABILITIES:
  Deposits:
    Demand, interest bearing $4,554,096  $22,443  0.99 %$3,068,494  $27,005  1.77 %
    Savings 279,063  1,670  1.20 %224,761  1,173  1.05 %
    Time deposits4,927,425  46,451  1.90 %5,860,492  67,495  2.32 %
    Total interest bearing deposits9,760,584  70,564  1.45 %9,153,747  95,673  2.11 %
    FHLB advances594,148  4,885  1.65 %758,161  5,998  1.60 %
    Convertible notes, net200,565  4,704  4.64 %195,610  4,609  4.69 %
    Subordinated debentures99,393  2,671  5.32 %98,267  3,487  7.06 %
Total interest bearing liabilities$10,654,690  $82,824  1.56 %$10,205,785  $109,767  2.17 %
Noninterest bearing demand deposits3,236,960  2,917,279  
Total funding liabilities/cost of funds$13,891,650  1.20 %$13,123,064  1.69 %
Net interest income/net interest spread$229,105  2.58 %$236,829  2.73 %
Net interest margin3.04 %3.35 %
Cost of deposits:
    Noninterest bearing demand deposits$3,236,960  $—  — %$2,917,279  $—  — %
    Interest bearing deposits9,760,584  70,564  1.45 %9,153,747  95,673  2.11 %
Total deposits$12,997,544  $70,564  1.09 %$12,071,026  $95,673  1.60 %
Table Page 5

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
 Three Months Ended Six Months Ended
AVERAGE BALANCES:6/30/20203/31/2020% change6/30/2019% change6/30/20206/30/2019% change
Loans receivable, including loans held for sale $12,755,088  $12,259,848  %$11,959,920  %$12,507,468  $12,023,690  %
Investments3,067,205  2,231,342  37 %2,265,300  35 %2,649,273  2,249,374  18 %
Interest earning assets15,822,293  14,491,190  %14,225,220  11 %15,156,741  14,273,064  %
Total assets16,759,147  15,446,807  %15,185,495  10 %16,102,977  15,237,627  %
Interest bearing deposits10,142,282  9,378,886  %9,105,137  11 %9,760,584  9,153,747  %
Interest bearing liabilities11,036,392  10,272,988  %10,105,831  %10,654,690  10,205,785  %
Noninterest bearing demand deposits3,510,783  2,963,136  18 %2,947,476  19 %3,236,960  2,917,279  11 %
Stockholders’ equity2,016,947  2,027,595  (1)%1,960,500  %2,022,271  1,940,606  %
Net interest earning assets4,785,901  4,218,202  13 %4,119,389  16 %4,502,051  4,067,279  11 %
LOAN PORTFOLIO COMPOSITION: 6/30/20203/31/2020% change12/31/2019% change6/30/2019% change
Commercial loans$3,415,111  $3,067,132  11 %$2,719,818  26 %$2,432,164  40 %
Real estate loans8,686,939  8,681,222  — %8,666,901  — %8,630,538  %
Consumer and other loans769,784  835,062  (8)%889,288  (13)%914,432  (16)%
    Loans, net of deferred loan fees and costs12,871,834  12,583,416  %12,276,007  %11,977,134  %
Allowance for credit losses(161,771) (144,923) 12 %(94,144) 72 %(94,066) 72 %
    Loan receivable, net$12,710,063  $12,438,493  %$12,181,863  %$11,883,068  %
REAL ESTATE LOANS BY PROPERTY TYPE:6/30/20203/31/2020% change12/31/2019% change6/30/2019% change
Retail buildings$2,278,448  $2,314,885  (2)%$2,298,872  (1)%$2,295,485  (1)%
Hotels/motels1,701,909  1,706,082  — %1,709,189  — %1,670,697  %
Gas stations/car washes836,314  852,077  (2)%844,081  (1)%953,942  (12)%
Mixed-use facilities706,827  770,825  (8)%785,882  (10)%739,440  (4)%
Warehouses1,040,303  1,024,832  %1,030,876  %936,900  11 %
Multifamily497,948  481,425  %465,397  %460,555  %
Other1,625,190  1,531,096  %1,532,604  %1,573,519  %
Total$8,686,939  $8,681,222  — %$8,666,901  — %$8,630,538  %
DEPOSIT COMPOSITION6/30/20203/31/2020% change12/31/2019% change6/30/2019% change
  Noninterest bearing demand deposits$4,036,383  $3,010,143  34 %$3,108,687  30 %$3,009,218  34 %
  Money market and other4,831,679  4,851,000  — %3,985,556  21 %3,238,947  49 %
  Saving deposits296,614  272,577  %274,151  %243,859  22 %
  Time deposits 4,958,856  4,702,847  %5,158,970  (4)%5,680,360  (13)%
    Total deposit balances$14,123,532  $12,836,567  10 %$12,527,364  13 %$12,172,384  16 %
DEPOSIT COMPOSITION (%)6/30/20203/31/202012/31/20196/30/2019
  Noninterest bearing demand deposits28.6 %23.5 %24.8 %24.7 %
  Money market and other34.2 %37.8 %31.8 %26.6 %
  Saving deposits2.1 %2.1 %2.2 %2.0 %
  Time deposits 35.1 %36.6 %41.2 %46.7 %
    Total deposit balances100.0 %100.0 %100.0 %100.0 %
Table Page 6

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

CAPITAL RATIOS:6/30/20203/31/202012/31/20196/30/2019
  Total stockholders’ equity$2,030,776  $2,018,088  $2,036,011  $1,995,172  
  Common equity tier 1 ratio11.50 %11.44 %11.76 %11.90 %
  Tier 1 risk-based capital ratio 12.24 %12.19 %12.51 %12.67 %
  Total risk-based capital ratio 13.23 %13.06 %13.23 %13.42 %
  Tier 1 leverage ratio 10.08 %10.88 %11.22 %10.94 %
  Total risk weighted assets$13,388,522  $13,348,162  $13,208,299  $12,715,685  
  Book value per common share$16.48  $16.38  $16.19  $15.75  
  Tangible common equity to tangible assets 1
9.32 %9.92 %10.27 %10.21 %
  Tangible common equity per share 1
$12.62  $12.52  $12.40  $11.98  
1 Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company’s capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital.
Three Months EndedSix Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:6/30/20203/31/202012/31/20199/30/20196/30/20196/30/20206/30/2019
Balance at beginning of period$144,923  $94,144  $93,882  $94,066  $94,217  $94,144  $92,557  
CECL day 1 adoption impact—  26,200  —  —  —  26,200  —  
Provision for credit losses17,500  28,000  1,000  2,100  1,200  45,500  4,200  
Recoveries252  2,536  939  780  725  2,788  2,017  
Charge offs (904) (5,957) (1,677) (2,602) (2,076) (6,861) (3,830) 
PCI allowance adjustment—  —  —  (462) —  —  (878) 
Balance at end of period$161,771  $144,923  $94,144  $93,882  $94,066  $161,771  $94,066  
Net charge offs/average loans receivable (annualized)0.02 %0.11 %0.02 %0.06 %0.05 %0.07 %0.03 %
Three Months EndedSix Months Ended
NET LOAN CHARGE OFFS (RECOVERIES):6/30/20203/31/202012/31/20199/30/20196/30/20196/30/20206/30/2019
Real estate loans$148  $2,230  $203  $951  $(388) $2,378  $(1,455) 
Commercial loans240  676  245  596  1,399  916  2,649  
Consumer loans264  515  290  275  340  779  619  
   Total net charge offs$652  $3,421  $738  $1,822  $1,351  $4,073  $1,813  

Table Page 7

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
NONPERFORMING ASSETS:6/30/20203/31/202012/31/20199/30/20196/30/2019
Loans on nonaccrual status 3
$82,137  $72,639  $54,785  $42,235  $64,934  
Delinquent loans 90 days or more on accrual status9,986  387  7,547  398  353  
Accruing troubled debt restructured loans44,026  43,789  35,709  34,717  40,731  
Total nonperforming loans136,149  116,815  98,041  77,350  106,018  
Other real estate owned20,983  23,039  24,091  19,374  5,644  
Total nonperforming assets$157,132  $139,854  $122,132  $96,724  $111,662  
Nonperforming assets/total assets0.92 %0.87 %0.78 %0.63 %0.73 %
Nonperforming assets/loans receivable & OREO1.22 %1.11 %0.99 %0.80 %0.93 %
Nonperforming assets/total capital7.74 %6.93 %6.00 %4.76 %5.60 %
Nonperforming loans/loans receivable1.06 %0.93 %0.80 %0.64 %0.89 %
Nonaccrual loans/loans receivable0.64 %0.58 %0.45 %0.35 %0.54 %
Allowance for credit losses/loans receivable1.26 %1.15 %0.77 %0.78 %0.79 %
Allowance for credit losses/nonaccrual loans196.95 %199.51 %171.84 %222.28 %144.86 %
Allowance for credit losses/nonperforming loans118.82 %124.06 %96.03 %121.37 %88.73 %
Allowance for credit losses/nonperforming assets102.95 %103.62 %77.08 %97.06 %84.24 %
3 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $30.3 million, $28.8 million,$28.1 million, $37.3 million, and $32.1 million at June 30, 2020, March 31, 2020,
     December 31, 2019, September 30, 2019, and June 30, 2019, respectively.
NONACCRUAL LOANS BY TYPE:6/30/20203/31/202012/31/20199/30/20196/30/2019
Real estate loans$64,060  $56,787  $40,935  $27,920  $42,921  
Commercial loans12,079  12,747  10,893  11,242  18,997  
Consumer loans5,998  3,105  2,957  3,073  3,016  
   Total nonaccrual loans$82,137  $72,639  $54,785  $42,235  $64,934  
BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:6/30/20203/31/202012/31/20199/30/20196/30/2019
Retail buildings$5,526  $5,014  $4,215  $3,221  $2,919  
Gas stations/car washes1,789  1,675  —  233  241  
Mixed-use facilities3,583  3,157  3,175  3,200  3,223  
Warehouses13,433  13,381  10,381  10,449  11,246  
Other 5
19,695  20,562  17,938  17,614  23,102  
Total$44,026  $43,789  $35,709  $34,717  $40,731  
5 Includes commercial business, consumer, and other loans
Table Page 8

Hope Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands)
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE:6/30/20203/31/202012/31/20199/30/20196/30/2019
30 - 59 days$18,857  $37,866  $14,433  $25,281  $17,913  
60 - 89 days29,975  2,605  4,712  4,535  1,295  
   Total$48,832  $40,471  $19,145  $29,816  $19,208  
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:6/30/20203/31/202012/31/20199/30/20196/30/2019
Real estate loans$27,245  $23,753  $7,689  $20,572  $9,794  
Commercial loans5,987  4,583  692  2,282  1,832  
Consumer loans15,600  12,135  10,764  6,962  7,582  
   Total$48,832  $40,471  $19,145  $29,816  $19,208  
CRITICIZED LOANS:6/30/20203/31/202012/31/20199/30/20196/30/2019
Special mention$127,149  $122,279  $141,452  $139,848  $186,485  
Substandard299,357  278,771  259,278  268,605  323,841  
Doubtful/Loss11  12  13  17   
   Total criticized loans$426,517  $401,062  $400,743  $408,470  $510,327  
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:
Three Months EndedSix Months Ended
6/30/20203/31/20206/30/20196/30/20206/30/2019
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Average stockholders’ equity$2,016,947  $2,027,595  $1,960,500  $2,022,271  $1,940,606  
Less: Goodwill and core deposit intangible assets, net(475,534) (476,053) (477,736) (475,793) (478,021) 
Average tangible common equity$1,541,413  $1,551,542  $1,482,764  $1,546,478  $1,462,585  
Net income$26,753  $25,953  $42,681  $52,706  $85,439  
Return on average tangible common equity (annualized)6.94 %6.69 %11.51 %6.82 %11.68 %
Three Months Ended
6/30/20203/31/202012/31/20196/30/2019
TANGIBLE COMMON EQUITY
Total stockholders’ equity$2,030,776  $2,018,088  $2,036,011  $1,995,172  
Less: Goodwill and core deposit intangible assets, net(475,220) (475,752) (476,283) (477,397) 
Tangible common equity$1,555,556  $1,542,336  $1,559,728  $1,517,775  
Total assets$17,169,062  $16,021,434  $15,667,440  $15,338,827  
Less: Goodwill and core deposit intangible assets, net(475,220) (475,752) (476,283) (477,397) 
Tangible assets$16,693,842  $15,545,682  $15,191,157  $14,861,430  
Common shares outstanding123,239,276  123,169,404  125,756,543  126,673,822  
  Tangible common equity to tangible assets9.32 %9.92 %10.27 %10.21 %
  Tangible common equity per share$12.62  $12.52  $12.40  $11.98  
Three Months EndedSix Months Ended
6/30/20203/31/20206/30/20196/30/20206/30/2019
PRE-TAX PRE-PROVISION INCOME
Net income$26,753  $25,953  $42,681  $52,706  $85,439  
Add back - tax provision9,771  6,462  14,256  16,233  28,695  
Add back - provision for credit losses17,500  28,000  1,200  45,500  4,200  
Pre-tax pre-provision income$54,024  $60,415  $58,137  $114,439  $118,334  

Table Page 10
Document



News Release

HOPE BANCORP DECLARES QUARTERLY CASH DIVIDEND OF $0.14 PER SHARE


LOS ANGELES - July 30, 2020 - Hope Bancorp, Inc. (NASDAQ: HOPE) today announced that its Board of Directors declared a quarterly cash dividend of $0.14 per common share. The dividend is payable on or about August 24, 2020 to all stockholders of record as of the close of business on August 10, 2020.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Friday, July 31, 2020 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its second quarter ended June 30, 2020. 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 in 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 August 7, 2020, replay access code 10146201.


About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean-American bank in the United States with $17.2 billion in total assets as of June 30, 2020. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 58 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; 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 and commercial 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.


Contacts:
Alex Ko
EVP & Chief Financial Officer
213-427-6560
alex.ko@bankofhope.com


Angie Yang
SVP, Director of Investor Relations &
Corporate Communications
213-251-2219
angie.yang@bankofhope.com


# # #

hope-2020q2earningsconfe
2020 Second Quarter Earnings Conference Call Friday, July 31 2020 1


 
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 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 loan losses, including the timing and effects of the implementation of the current expected credit losses model; and 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. 2


 
Q2 2020 Financial Highlights  Net income of $26.8 million, or $0.22 per diluted common share, compared with $26.0 million, or  Net  $0.21 per diluted common share for Q1 2020  Provision for credit losses of $17.5 million, vs. $28.0 million for Q1 2020 Income  Net interest income before provision decreased to $109.8 million from $119.3 million for Q1 2020,  $26.8MM Earnings &  reflecting full quarter’s impact of aggregate 150bps decrease in Fed Funds rate in March 2020  Noninterest expense declined 7% Q‐o‐Q reflecting reductions in compensation and professional  Profitability fees and improved as a percentage of  average assets to 1.60% from 1.87% in Q1 2020  Net interest margin of 2.79% represents trough and reflects reductions in Fed Fund rate, significant  increase in lower‐yielding cash balances, as well as large payoff of acquired loan in Q1 2020  Diluted   ROE and ROTCE improved to 5.31% and 6.94%, respectively from 5.12% and 6.69% in Q1 2020 EPS $0.22 Loan   New loan originations funded of $832 million, including PPP originations of $480 million Production  Loans receivable increased 2.3%, or 9% annualized  Total deposits increased by $1.29 billion, or 10% Q‐o‐Q, and continued the trend of favorable mix  Record  shift to lower‐cost deposits Gross  Noninterest bearing deposits increased $1.0 billion Q‐o‐Q and represented 28.6% of total deposits,  Deposits up from 23.5% in Q1 2020; approximately $326 million identified as PPP‐related Loans  Cost of deposits decreased 47bps Q‐o‐Q  Company continued to benefit from CD repricing gap as time deposits renewed at significantly  $12.9B lower rates  Overall asset quality trends remain stable  Modest increases in delinquent loans, criticized loans and nonperforming loans reflect ability to  Record  Asset Quality work with COVID‐19 impacted borrowers under CARES Act Deposits  Modifications under CARES Act total $3.1 billion at June 30, 2020, equal to 24.2% of loan portfolio  Net charge offs were minimal at $652,000, or 0.02% of average loans receivable annualized $14.1B 3


 
Loan Production & Portfolio Trends New Loan Originations Funded 5.46%  New loan originations funded of $832 million 4.72% 4.37% resulted in 2.3% growth in loans receivable Q‐o‐Q,  3.98% or 9% annualized 3.39%1  ($ millions) $847.6 $832.0 New loans included $480 million of SBA PPP  originations, which are categorized as C&I loans $693.9 $69  $74  $624.5 $61  $62  $266  $42   Aggregate payoffs and paydowns declined to $484  $503.9 million from higher‐than‐usual amount of $624  $75  $283  $234  2 $480  million 1Q20  $176  $513  $349  $348  $253  $216   Diversified mix of loan originations including PPP  loan originations categorized as C&I loans 2Q19 3Q19 4Q19 1Q20 2Q20  26% CRE / 65% C&I / 9% Consumer CRE PPP C&I Consumer Average Rate  Decrease in average rate on new loan production  reflects 150bps decrease in Fed Funds rate in March  Loan Portfolio Composition 2020  Traditional SBA loan production of $6 million,  7% 7% 6% excluding PPP, reflects market’s focus on PPP relief  22% 24% 27% in midst of COVID‐19 pandemic crisis 71% 69% 67% 1 Including fees on PPP loans, average rate on new loan originations funded for 2Q20  of 3.39% 12/31/2019 3/31/2020 6/30/2020 2 PPP loans are categorized as  C&I loans. 4


 
PPP Loan Originations ($ thousands) $ Amount # Loans Lender’s Fees 63,036 13% 2,850 60% 63,818 13% 892 19% 96% 5% $13,612 74,657 16% 529 11% 70,555 15% 275 6% 96,082 20% 171 4% $3% <5% $4,583 56,692 12% 43 1% 1% 49,111 10% 17 0% $491 Total Balance $473,9501 (Avg $99,215) 4,777 $18,686 1 Reflects total PPP originations of $480 million offset by $6 million in early payoffs 5


 
COVID-19 Loan Modifications Modification Type & Duration ($ thousands) COVID‐19 Modifications %  2M‐3M Interest Only   Amount  # of  Total Loans As of June 30, 2020 Modified  $ 264.8 MM  8.5% Modified Loans Other1 4M‐6M Pmt Def $ 23.9 MM CRE $ 2,817,516 976 $ 8,686,939 32.4% $ 109.0 MM 0.8% Retail $ 809,024 308 $ 2,267,050 35.7% 3.5% Hotel/Motel $ 1,012,434 206 $ 1,654,389 61.2% Gas Station & Car Wash $ 134,480 53 $ 833,194 16.1% Mixed Use $ 207,155 110 $ 657,281 31.5% Industrial & Warehouse $ 239,943 100 $ 1,040,221 23.1% Other CRE $ 414,480 199 $ 2,234,804 18.5% 3M Pmt Def C&I $ 150,978 294 $ 3,415,111 4.4% $ 2,718.3 MM 87.2% Consumer (predominantly  $ 147,325 195 $ 769,784 19.1% residential mortgage) Total $ 3,115,819 1,465 $ 12,871,834 24.2% 1 Other Modifications includes Payment Deferment of 1M‐ 2M; Interest Only Payments of 4M‐6M; Full Payment  Modifications by Week Ending Deferment of 1M, 2M and 9M; and other variations of  Full Payment Deferment and Interest Only, Principal Only  and Fixed Monthly Payment for 3M $457,905 $380,630 $373,411 $314,910 $311,950 $261,933 $222,029 $108,090 $102,108 $88,507 $34,669 $73,418 $57,551 $3,300 Apr 3Apr 10 Apr 17 Apr 24 May 1 May 15 May 8 May 15 May 22 May 29 Jun 5Jun 12 Jun 19 Jun 30 Peak of Modification Grants 6


 
COVID-19 Impacted Portfolios Hotel/Motel CRE Properties Retail CRE Properties • Majority of Hotel/Motel properties are limited service facilities • Retail portfolio largely represents “strip mall” type of  properties (not shopping malls) • Less impacted by lockdowns than full‐service hotel properties • Majority of tenants comprised of service oriented businesses  • Expected to rebound earlier than full‐service hotel properties – traditionally less impacted by e‐commerce • 73% of Hotel/Motel portfolio represented by flagged properties • Representative anchor tenants of larger strip mall properties =  • 95%+ of Hotel/Motel exposure located in major MSAs or regions  Local supermarket where the Bank has presence and knowledge of the market • 95%+ of retail CRE exposure located in major MSAs or regions  • Majority of the portfolio with personal guarantees where the Bank has presence and knowledge of the market • Approximately 300 PPP loans aggregating more than $28 million  • 35.7%, or $809.0 million, of retail CRE portfolio modified under  to hotel/motel customers CARES Act • 61.2%, or $1.0 billion, of hotel/motel portfolio modified under  • ACL coverage ratio of 1.46% for Retail CRE portfolio, compared  CARES Act with 1.15% as of 3/31/20 • ACL coverage ratio of 1.23% for Hotel/Motel CRE portfolio,  compared with 1.04% as of 3/31/20 $2.27 million Average Loan Size $1.55 million 52.9% Weighted Average LTV 51.4% 1.76 Weighted Average DCR 1.47 7


 
Net Interest Income and Margin Average Loan Yield & Average 1M LIBOR Rate  Net Interest Income & NIM 5.32% ($ millions) 5.27% 5.04% 5.06% 4.23% $117.2 $116.3 $113.5 $119.3 2.44% $109.8 2.18% 1.79% 3.31% 3.31% 3.25% 3.16% 1.41% 2.79% 0.35% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Net Interest Income NIM Avg Loan Yield Avg 1M LIBOR Rate Average Interest Bearing Deposits &   2Q20 net interest margin decreased 52bps Q‐o‐Q reflecting  Cost of Deposits ($ billions)  ‐ 45 bps Impact of 150bps rate decline on average loan yields $10.1 $9.4  ‐18 bps Q‐o‐Q accretion difference (Q1 impacted by large payoff) $9.1 $9.1 $9.1  +1 bps SBA PPP loan production 2.15% 2.15% 1.98% 1.76%  ‐22 bps Temporarily increased excess liquidity due to COVID‐19 1.17%  ‐3 bps Other changes 1.62% 1.62% 1.49% 1.34% 0.87%  + 35 bps Reduction in cost of funds 2Q19 3Q19 4Q19 1Q20 2Q20  Core net interest margin (excluding acquisition accounting  Average Interest Bearing Deposits adjustments) decreased 33bps Q‐o‐Q Total Cost of Deposits Cost of Interest Bearing Deposits  NIM expansion expected in 2H20 with stable loan yields, continued  reduction in deposit costs and deployment of excess liquidity 8


 
Noninterest Income Noninterest Income  Noninterest income decreased to $11.2 million  ($ millions) Q‐o‐Q largely reflecting lower fee income due to  $13.0 $13.0 $13.3 reduced business activity as a result of COVID‐ $12.3 19 lockdowns  $11.2 $4.1  Decrease in service fees reflect reduction in  $3.6 $4.9 $5.1 NSF and analysis fees  $4.4  Reduction in international service fees $0.1 $1.1 $0.2 $1.9  $0.8 Decline in wire transfer fees $1.9 $1.3 $1.1 $1.1  Declines partially offset by 3‐fold increase in  $0.2 $1.7 $0.7 $0.7 $1.0 loan servicing fees $1.2 $0.4 $1.0 $0.8 $0.8 $0.8  Sold $67.4 million in residential loans and  $1.1 $0.7 recognized gain on sale income of $1.68 million $4.4 $4.7 $4.5 $4.1  Other income and fees decreased modestly to  $2.6 $4.39 million due to normal variances in other  line items 2Q19 3Q19 4Q19 1Q20 2Q20 Service fees on dep accts International service fees Loan servicing fees, net Wire transfer fees Gain on sale of other loans Gain on sale of securities Other income and fees 9


 
Noninterest Expense and Efficiency Noninterest Expense, Efficiency Ratio &  Breakdown of Noninterest Expense & FTE ($ millions) NIE/AA $71.4 $70.0 $70.4 $72.1 $72.1 $67.0 $71.4 $70.0 $70.4 $67.0 $7.9 $6.4 $7.2 $8.8 $1.6 $0.8 $1.6 $9.7 55.11% 54.15% 55.68% 54.42% 55.37% $5.2 $6.0 $5.9 $3.3 $2.8 $2.6 $1.7 $2.6 $2.4 $1.7 $1.5 $2.4 $2.5 $2.3 $2.2 $1.3 $11.6 $11.7 $11.9 $11.8 $11.7 1.88% 1.85% 1.85% 1.87% 1.60% $41.6 $42.5 $39.3 $39.8 $38.9 2Q19 3Q19 4Q19 1Q20 2Q20 Noninterest Expense Efficiency Ratio NIE/AA 1,474 NIE/AA = Noninterest expense as a percentage of average assets 1,446 1,439 1,441 1,458  Noninterest expense decreased to $67.0 million in  2Q20 from $72.1 million in 1Q20 2Q19 3Q19 4Q19 1Q20 2Q20 – Compensation expense decreased 9%Q‐o‐Q  Other FDIC assessment – Professional fees decreased 54% Q‐o‐Q.  Professional fees reflecting second consecutive quarter of  Data processing & communications considerable reductions Adv/Marketing Occupancy & equipment Compensation FTE 10


 
Deposit Trends Q‐o‐Q deposit growth annualized  Total end‐of‐period (“EOP) deposits increased $1.3 billion,  Deposit Composition ($ billions) equal to 10% Q‐o‐Q, or 40% annualized $14.12 – Growth driven by 34% increase in noninterest bearing DDA Q‐ $12.53 $12.53 $12.84 +40% $12.23 +10% o‐Q or $1.0 billion ‐9% +10% $5.0 – Noninterest bearing demand deposits represented 28.6% of  $4.7 $5.2 $5.2 $5.2 total deposits, up from 23.5% at 3/31/2020 $0.3 $0.3 – $0.3 $0.3 Time deposits represented 35.1% of total deposits, down  $0.3 $4.8 from 36.6% at 3/31/2020 $4.0 $3.8 $4.0 $4.9  Total cost of deposits decreased 47bps from 1Q20 and total  cost of interest bearing deposits decreased 59bps from 1Q20 $3.1 $3.0 $3.1 $3.0 $4.0  EOP Net Loan‐to‐Deposit ratio of 89.99% as of 6/30/2020 vs.  6/30/19 9/30/19 12/31/19 3/31/20 6/30/20 96.90% as of 3/31/2020 DDA MMA/NOW Savings Time  Continued mix‐shift favoring lower‐cost core deposits Deposit Cost Trend CD Originations & Maturity Schedule 1.65% 1.62% 1.58% 1.54% Average  1.49% 1.44% 1.43% 1.42% ($ millions) Amount Blended  1.18% Rate 0.95% Apr 2020 $816 0.84% 1.62% 0.87% CD Originations and  0.79% May 2020 $639 0.47% 3Q19 1.49% Renewals 4Q19 1.34% Jun 2020 $355 0.63% 1Q20 0.87% 2Q 2020 $1,810 0.67% 2Q20 Q3 2020 $1,626 1.81% Q4 2020 $1,112 1.53% CD Maturity Schedule Jul‐19 Aug‐19 Sep‐19 Oct‐19 Nov‐19 Dec‐19 Jan‐20 Feb‐20 Mar‐20 Apr‐20 May‐20 Jun‐20 Q1 2021 $1,056 1.56% Quarterly Cost of Deposits Monthly Cost of Deposits Q2 2021 $1,073 0.85% DDA = Noninterest bearing demand deposits MMA/NOW = Money market and NOW deposits NOW = Negotiable Order of Withdrawal 11


 
Asset Quality Nonperforming Assets Provision Expense & Net Charge Offs ($ millions) ($ millions) $157.1 $139.9 $28.0 $122.1 $21.0 $111.7 $23.0 $136.1 $5.6 $96.7 $24.1 0.11% $116.8 0.05% 0.06% 0.02% $17.5 $106.0 $19.4 $98.0 0.92% $77.4 0.87% 0.02% 0.73% 0.78% 0.63% $1.2 $2.1 $1.0 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 NPLs OREO NPAs/Total Assets Provision Expense Net Charge Offs (Recoveries) (annualized) Criticized Loans ($ millions)  Modest Q‐o‐Q increases in nonaccrual loans and  delinquent loans primarily reflects loans  $510.3 currently in modification pipeline $408.5 $400.7 $401.1 $426.5 $323.8  General asset quality trends remain stable as of  $268.6 $259.3 $278.8 $299.4 6/30/2020 4.26% 3.37% 3.26% 3.19% 3.31% $186.5 $139.8 $141.5 $122.3 $127.1  Credit losses continued to be nominal, with net  charge offs of $652,000, or 2bps of average  2Q19 3Q19 4Q19 1Q20 2Q20 loans on an annualized basis Classified Special Mention Total Criticized Loans as a % of Gross Loans 12


 
Allowance for Credit Losses Moody’s Baseline Scenario  Assumptions • U.S.  Growth –GDP forecast to decline 33%  annualized for 2Q20 and decline 5.6% for FY2020  $161,771 • Inflation –Y‐o‐Y growth in CPI inflation to decelerate  ($ thousands) through remainder of 2020 and into 2021 • Employment –Unemployment rate forecast to  $144,923 average 14% in 2Q20 and remain above 8% through  2021 • Monetary Policy –Fed not raising interest rates any  time soon; 10‐year Treasury yield expected to  1.26% gradually increase but remain below 1.5% until late  Coverage  2021 • CRE –2Q20 CREPi forecast to decline 16% Y‐o‐Y and  Ratio 22% for FY2020 • Corporate –2Q20 corporate profits forecast to  1.15% decline 22% Y‐o‐Y and 20% for FY2020 • Residential –2Q20 housing price index forecast to  Coverage  increase modestly at 3.4% Y‐o‐Y and 2.4% for FY2020 Ratio • Consumer –2Q retail sales forecast to decrease 12%  Y‐o‐Y and 5.6% for FY2020 0.77% 2Q20 Provision for Credit Loss Factors Coverage  Ratio • Updated macroeconomic factors • Enhanced qualitative factors, including additional  reserve for hospitality portfolios • Relatively stable asset quality metrics with minimal  credit losses • Additional management overlay to COVID‐19  ACL 3/31/20 ACL 6/30/20 modifications 13


 
Allocation of Allowance by Loan Type Allowance of Loan &  Allocation for Credit Losses  ($ thousands) Lease Losses (ALLL) for Current Expected Credit Loss (CECL) January 1, 2020 December 31, 2019 CECL Adoption ‐ Day 1March 31, 2020 June 30, 2020 Coverage  Coverage  Coverage  Coverage  Loan Type  Amount  Amount  Amount  Amount  Ratio Ratio Ratio Ratio Commercial Real Estate $ 53,593  0.62% $ 81,385  0.94% $ 94,645  1.09% $ 119,030  1.37% Residential  $ 204  0.39% $ 227  0.43% $ 399  0.70% $ 460  0.84% Commercial  $ 51,712  0.62% $ 79,194  0.95% $ 92,560  1.11% $ 114,668  1.37% Construction  $ 1,677  0.57% $ 1,964  0.66% $ 1,686  0.60% $ 3,902 1.35% Commercial & Industry  $ 33,032  1.21% $ 32,010  1.18% $ 42,883  1.40% $ 35,493  1.04% Residential Mortgage  $ 5,925  0.71% $ 5,387  0.65% $ 5,779  0.73% $ 5,868 0.81% Consumer  $ 1,594  2.89% $ 1,563  2.85% $ 1,616  3.35% $ 1,380  3.04% Total Allowance  $ 94,144  $ 120,345  $ 144,923  $ 161,771  Coverage Ratio to  Loans Receivable 0.77% 0.98% 1.15% 1.26% Excluding PPP 1.31% Including Accretion Discount 1.14% 1.52% 1.54% Excluding PPP &  1.60% Including Accretion Discount 14


 
Strong Capital & Liquidity Positions Sufficient Liquidity Sources Robust Capital Position 13.23% 13.06% 12.24% Available  12.19% 11.44% 11.50% 6/30/2020 ($ Thousands) Borrowing  10.88% Capacity 10.08% FHLB Remaining Capacity $ 3,455,575 10.00% FRB Discount Window $ 726,639 8.00% Unsecured lines with other banks $ 306,180 6.50% Total Borrowing Capacity $ 4,488,394 5.00% Brokered Deposit Availability  $ 702,203 (internal policy limit 15% of Total Assets) 5.00% Investment Repo Line $ 1,464,479 (unpledged securities 95%) Total Risk‐Based Tier 1 Leverage Ratio Tier 1 Common Tier 1 Capital Ratio Capital Ratio Equity Ratio Min. Guideline Well Capitalized Institution 3/31/2020 6/30/2020  Significant increase in primary source of liquidity since COVID‐  Building capital ratios with Total Risk‐Based, Tier 1 Common and Tier 1 Capital  19 Pandemic ratios all increasing Q‐o‐Q  Participation in FRB’s PPP lending facility in 2H 2020 will   Growing equity with Book Value per share of $16.48 and Tangible Common  minimize use of other secondary liquidity sources Equity per share of $12.62, each up 1% Q‐o‐Q and 5% Y‐o‐Y  Returning Capital to shareholders with quarterly common stock dividend of  $0.14 per share 15


 
Near-Term Outlook  Meaningful loan growth for 2020 driven in 2H by corporate banking, warehouse line and  residential mortgage refinancings  Anticipating net interest margin expansion going forward as a result of stable loan yields,  decreasing deposit costs and deployment of excess liquidity  Residential mortgage originations to drive higher levels of gain‐on‐sale of other loans fee  income  Right sizing overall cost structure in line with current business environment  Managing capital position to maintain sufficient capital to support clients and communities 16


 
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2020 Second Quarter Earnings Conference Call Q&A 18


 
v3.20.2
Document And entity Information
Jul. 30, 2020
Oct. 21, 2019
Cover [Abstract]    
Document Type 8-K  
Document Period End Date Jul. 30, 2020  
Entity Registrant Name HOPE BANCORP INC  
Entity Incorporation, State or Country Code DE  
Entity File Number 000-50245  
Entity Tax Identification Number 95-4849715  
Entity Address, Address Line One 3200 Wilshire Boulevard, Suite 1400  
Entity Address, City or Town Los Angeles  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 90010  
City Area Code 213  
Local Phone Number 639-1700  
Written Communications false  
Soliciting Material false  
Pre-commencement Tender Offer false  
Pre-commencement Issuer Tender Offer false  
Title of 12(b) Security Common Stock  
Trading Symbol HOPE  
Security Exchange Name NASDAQ  
Entity Emerging Growth Company false  
Entity Central Index Key 0001128361  
Amendment Flag   false