hopebancorplogoa071.jpg                        
News Release


HOPE BANCORP REPORTS 2020 FOURTH QUARTER FINANCIAL RESULTS


LOS ANGELES - January 26, 2021 - Hope Bancorp, Inc. (the “Company”) (NASDAQ: HOPE), the holding company of Bank of Hope (the “Bank”), today reported unaudited financial results for its fourth quarter and year ended December 31, 2020.

For the three months ended December 31, 2020, net income totaled $28.3 million, or $0.23 per diluted common share. This compares with net income of $30.5 million, or $0.25 per diluted common share, in the third quarter of 2020 and $43.0 million, or $0.34 per diluted common share, in the fourth quarter of 2019. For the year ended December 31, 2020, net income totaled $111.5 million, or $0.90 per diluted common share, compared with net income of $171.0 million, or $1.35 per diluted common share for the year ended December 31, 2019.

“Fourth quarter results represent a continuation of the many positive trends we have delivered in 2020 and underscore how well we have been able to manage through a year that has been plagued by a global pandemic,” said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. “Notwithstanding the challenging business environment, we recorded very strong loan originations of $844 million during the quarter. We are also extremely pleased with the success of our expanded commercial lending capabilities, with commercial loans accounting for 52% of new loan production during the fourth quarter of 2020. New commercial customer relationships that we have won during the year have been valuable contributors to our deposit achievements as well, with total deposits increasing 2% quarter-over-quarter and noninterest bearing deposits expanding to a record 34% of total deposits at the end of 2020. The improved mix in our deposit composition and reductions in deposit costs led to a second consecutive quarter of margin expansion with our net interest margin increasing 11 basis points quarter-over-quarter to 3.02% for the fourth quarter. We also continued to maintain a tight grip on expenses with our efficiency ratio improving to 53.77% for the 2020 fourth quarter.

“With the highly effective vaccines in distribution and the support of additional government stimulus programs, it appears the groundwork for a faster economic recovery is being paved, and we believe we are well positioned with a stronger allowance coverage ratio that we have prudently built to date,” said Kim. “2020 required more commitment and dedication from our employees than any period in the history of our Bank, and I am extremely proud of how we, as a team, adapted and succeeded this last year. As a result of all of the challenges we have successfully endured this year, I have great conviction that we are a stronger franchise today than ever before, and we move forward in 2021 with cautious optimism that we will indeed get through this unprecedented period of time together and deliver increased value to all the stakeholders of Bank of Hope.”
Q4 2020 Highlights
•Net interest income before provision for credit losses increased 3% quarter-over-quarter to $120.8 million, largely reflecting reduced interest expense due to lower cost of deposits.
•Net interest margin expanded 11 basis points quarter-over-quarter.
•Noninterest bearing demand deposits increased 7% quarter-over-quarter and accounted for 34% of total deposits at year-end.
•Total cost of deposits decreased 16 basis points quarter-over-quarter benefiting from an on going positive mix-shift to lower-cost core deposits.
•Loan originations totaled $844.2 million and contributed to a 3.4% increase in loans receivable quarter-over-quarter, or 13.5% annualized.
•Noninterest expenses continued to be well managed with efficiency ratio improving to 53.77% from 54.31% quarter-over-quarter and noninterest expense to average assets improving to 1.69% from 1.73%
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Financial Highlights
(dollars in thousands, except per share data) (unaudited)At or for the Three Months Ended
12/31/20209/30/202012/31/2019
Net income$28,319 $30,490 $43,009 
Diluted earnings per share$0.23 $0.25 $0.34 
Net interest income before provision for loan losses$120,756 $117,637 $113,508 
Net interest margin3.02 %2.91 %3.16 %
Noninterest income$11,415 $17,513 $12,979 
Noninterest expense$71,063 $73,406 $70,429 
Net loans receivable$13,356,472 $12,940,376 $12,181,863 
Deposits$14,333,912 $14,008,356 $12,527,364 
Total cost of deposits0.48 %0.64 %1.49 %
Nonaccrual loans (1) (2)
$85,238 $69,205 $54,785 
Nonperforming loans to loans receivable (1) (2)
0.91 %0.81 %0.80 %
ACL to loans receivable (3)
1.52 %1.37 %0.77 %
ACL to nonaccrual loans (1) (2)(3)
242.55 %259.88 %171.84 %
ACL to nonperforming assets (1) (2)(3)
144.24 %144.36 %77.08 %
Provision for credit losses$27,500 $22,000 $1,000 
Net charge offs$608 $3,922 $738 
Return on average assets (“ROA”)0.67 %0.72 %1.13 %
Return on average equity (“ROE”)5.54 %5.98 %8.46 %
Return on average tangible common equity (“ROTCE”) (4)
7.21 %7.80 %11.04 %
Noninterest expense / average assets1.69 %1.73 %1.85 %
Efficiency ratio53.77 %54.31 %55.68 %

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation
(2) Excludes purchased credit-impaired loans for December 31, 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 Fourth Quarter
Net interest income before provision for credit losses for the 2020 fourth quarter increased 3% to $120.8 million from $117.6 million in the 2020 third quarter and increased 6% from $113.5 million in the year-ago fourth quarter. As with the preceding third quarter, the Company attributed the increases primarily to meaningful reductions in interest expense due to lower cost of deposits and lower average FHLB borrowing balances.

The net interest margin for the 2020 fourth quarter increased 11 basis points to 3.02% from 2.91% in the preceding third quarter, reflecting the benefits of lower deposit costs and reductions in cash on the Company’s balance sheet, partially offset by lower weighted average yield on loans. The net interest margin in the prior-year fourth quarter was 3.16%.

The weighted average yield on loans for the 2020 fourth quarter was 4.03%, compared with 4.20% in the preceding third quarter, largely reflecting a significant increase in the lower-yielding warehouse line balances during the quarter and lower accretion income. The weighted average yield on loans for the 2019 fourth quarter was 5.04%.

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The weighted average cost of deposits for the 2020 fourth quarter decreased for the fifth consecutive quarter to 0.48%, representing a 16 basis point decrease from 0.64% for the 2020 third quarter and a 101 basis point decrease from 1.49% for the 2019 fourth quarter. The Company attributed the significant improvements in the weighted average cost of deposits to a continuing shift in its deposit mix to lower-cost core deposits and the ongoing downward repricing of time deposits. Noninterest bearing demand deposits increased 7% quarter-over-quarter and increased 55% year-over-year and accounted for 34%, 32% and 25% of total deposits at December 31, 2020, September 30, 2020 and December 31, 2019, respectively.

Noninterest income totaled $11.4 million for the 2020 fourth quarter, compared with $17.5 million in the preceding third quarter. The largest factor contributing to the decrease was a $7.5 million net gain on the sale of $161 million of available-for-sale investment securities in the preceding third quarter, compared with zero in the 2020 fourth quarter. In addition, net gains on sales of other loans decreased to $1.6 million for the 2020 fourth quarter from $2.9 million for the preceding third quarter. These decreases were partially offset by an increase in other income and fees in the 2020 fourth quarter, reflecting higher levels of swap fee income and a gain in the fair value change in derivatives. Noninterest income in the 2019 fourth quarter totaled $13.0 million.

Noninterest expense for the 2020 fourth quarter decreased to $71.1 million from $73.4 million for the preceding third quarter. Noninterest expense for the 2020 fourth quarter included $2.4 million in branch restructuring costs while the 2020 third quarter included a $3.6 million FHLB prepayment penalty. For the 2019 fourth quarter, noninterest expense totaled $70.4 million.

Salaries and employee benefits expense totaled $40.9 million, $40.7 million and $39.8 million for the 2020 fourth quarter,
2020 third quarter and 2019 fourth quarter.

Noninterest expense as a percentage of average assets improved to 1.69% for the 2020 fourth quarter from 1.73% for the 2020 third quarter and from 1.85% for the 2019 fourth quarter.

The effective tax rate for the 2020 fourth quarter was 15.74%, compared with 23.3% for the preceding third quarter and
21.9% in the year-ago fourth quarter. The decrease in the effective tax rate for 2020 fourth quarter reflects lower tax provision based on adjustments to the applicable state apportionment factors.

Balance Sheet Summary
New loan originations funded during the 2020 fourth quarter totaled $844.2 million and included SBA loan production of $25.5 million and residential mortgage loan originations of $62.5 million. In addition, two new warehouse mortgage lines of credit were booked during the 2020 fourth quarter, of which $106.8 million was funded as of December 31, 2020. For the preceding 2020 third quarter, new loan originations funded totaled $782.4 million, including SBA loan originations of $33.3 million, residential mortgage loan originations of $102.3 million and four new warehouse mortgages lines of credit, of which $301 million was funded as of September 30, 2020. In the year-ago fourth quarter, new loan originations funded totaled $847.6 million, including SBA loan production of $61.8 million and residential mortgage loan originations of $64.2 million. There were no new warehouse mortgage lines of credit established in the 2019 fourth quarter.

At December 31, 2020, loans receivable increased 3.4% to $13.56 billion from $13.12 billion at September 30, 2020 and increased 10.5% from $12.28 billion at December 31, 2019.

Total deposits at December 31, 2020 increased 2.3% to $14.33 billion from $14.01 billion at September 30, 2020 and increased 14.4% from $12.53 billion at December 31, 2019.

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Following is the deposit composition as of December 31, 2020, September 30, 2020 and December 31, 2019:

(dollars in thousands) (unaudited)12/31/20209/30/2020% change12/31/2019% change
  Noninterest bearing demand deposits$4,814,254 $4,488,529 7 %$3,108,687 55 %
  Money market and other5,232,413 4,763,893 10 %3,985,556 31 %
  Saving deposits300,770 308,943 (3)%274,151 10 %
  Time deposits 3,986,475 4,446,991 (10)%5,158,970 (23)%
    Total deposit balances$14,333,912 $14,008,356 2 %$12,527,364 14 %

Following is the deposit composition as a percentage of total deposits as of December 31, 2020, September 30, 2020 and December 31, 2019 and a breakdown of cost of deposits for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019:
Deposit BreakdownCost of Deposits
(dollars in thousands) (unaudited)12/31/20209/30/202012/31/2019Q4 2020Q3 2020Q4 2019
  Noninterest bearing demand deposits33.6 %32.1 %24.8 %— %— %— %
  Money market and other36.5 %34.0 %31.8 %0.45 %0.53 %1.61 %
  Saving deposits2.1 %2.2 %2.2 %1.17 %1.19 %1.12 %
  Time deposits 27.8 %31.7 %41.2 %0.98 %1.30 %2.29 %
    Total deposit balances100.0 %100.0 %100.0 %0.48 %0.64 %1.49 %


Allowance for Credit Losses
The 2020 fourth quarter provision for credit losses under the CECL methodology was $27.5 million, compared with $22.0 million for the preceding third quarter. This compares with a provision for loan losses under the prior incurred loss methodology of $1.0 million for the 2019 fourth quarter.

The provision for credit losses for the 2020 fourth quarter generally utilizes the most recent available Moody’s Analytics Baseline scenario, as well as more specific information, including updated CRE market data which reflects deterioration primarily in the hospitality industry, updated qualitative factors in the Company’s ACL methodology, and downgrades following the receipt of updated financial statements of the borrowers. As such, the buildup of the reserves in the 2020 fourth quarter was largely driven by additional allocations made to the hotel and motel portfolio as the Company continued to assess the full impact of the pandemic on this sector of its portfolio.

Following is the Allowance for Credit Losses as of December 31, 2020, September 30, 2020 and December 31, 2019:

(dollars in thousands) (unaudited)12/31/20209/30/202012/31/2019
Allowance for credit losses$206,741$179,849$94,144
Allowance for credit loss/loans receivable1.52 %1.37 %0.77 %
Allowance for credit losses/nonperforming loans167.80 %169.40 %96.03 %

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Credit Quality
Following are the components of nonperforming assets as of December 31, 2020, September 30, 2020 and December 31, 2019:
(dollars in thousands) (unaudited)12/31/20209/30/202012/31/2019
Loans on nonaccrual status (1)
$85,238$69,205$54,785
Delinquent loans 90 days or more on accrual status (2)
6141,5377,547
Accruing troubled debt restructured loans37,35435,42935,709
Total nonperforming loans123,206106,17198,041
Other real estate owned20,12118,41024,091
Total nonperforming assets$143,327$124,581$122,132

(1)     Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.5 million, $26.2 million, and $28.1 million, at December 31, 2020, September 30, 2020, and December 31, 2019, respectively.
(2)    Excludes PCI loans totaling $13.2 million at December 31, 2019.

Following are the components of criticized loan balances as of December 31, 2020, September 30, 2020 and December 31, 2019:
(dollars in thousands) (unaudited)12/31/20209/30/202012/31/2019
Special Mention (3)
$184,941$153,388$141,452
Classified (3)
366,557318,542259,291
     Criticized$551,498$471,930$400,743

(3)     Balances include purchased loans which were marked to fair value on the date of acquisition.
During the 2020 fourth quarter, net charge offs totaled $608,000, or 0.02% of average loans receivable on an annualized basis. This compares with net charge offs of $3.9 million, or 0.12% of average loans receivable on an annualized
basis for the 2020 third quarter and net charge offs for the 2019 fourth quarter of $738,000, or 0.02% of average loans
receivable on an annualized basis.


Capital
At December 31, 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 December 31, 2020, September 30, 2020 and December 31, 2019:
(unaudited)12/31/20209/30/202012/31/2019Minimum Guideline for “Well-Capitalized” Bank
Common Equity Tier 1 Capital10.94%11.36%11.76%6.50%
Tier 1 Leverage Ratio10.22%10.02%11.22%5.00%
Tier 1 Risk-Based Ratio11.64%12.09%12.51%8.00%
Total Risk-Based Ratio12.87%13.19%13.23%10.00%
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Following are tangible common equity (“TCE”) per share and TCE as a percentage of tangible assets as of December 31, 2020, September 30, 2020 and December 31, 2019:
(unaudited)12/31/20209/30/202012/31/2019
Tangible common equity per share (1)
$12.81$12.70$12.40
Tangible common equity to tangible assets (2)
9.50%9.63%10.27%

(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.

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 Wednesday, January 27, 2021 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its fourth quarter ended December 31, 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 February 3, 2021, replay access code 10150976.

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 $17.1 billion in total assets as of December 31, 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 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.


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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.

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)

Assets12/31/20209/30/2020% change12/31/2019% change
Cash and due from banks$350,579 $629,133 (44)%$698,567 (50)%
Securities available for sale, at fair value2,285,611 2,060,991 11 %1,715,987 33 %
Federal Home Loan Bank (“FHLB”) stock and other investments105,591 97,305 9 %97,659 8 %
Loans held for sale, at the lower of cost or fair value17,743 9,170 93 %54,271 (67)%
Loans receivable13,563,213 13,120,225 3 %12,276,007 10 %
Allowance for credit losses(206,741)(179,849)(15)%(94,144)(120)%
  Net loans receivable13,356,472 12,940,376 3 %12,181,863 10 %
Accrued interest receivable59,430 57,989 2 %30,772 93 %
Premises and equipment, net48,409 49,552 (2)%52,012 (7)%
Bank owned life insurance76,765 77,388 (1)%76,339 1 %
Goodwill464,450 464,450 — %464,450 — %
Servicing assets12,692 13,718 (7)%16,417 (23)%
Other intangible assets, net9,708 10,239 (5)%11,833 (18)%
Other assets319,214 323,456 (1)%267,270 19 %
  Total assets$17,106,664 $16,733,767 2 %$15,667,440 9 %
Liabilities
Deposits$14,333,912 $14,008,356 2 %$12,527,364 14 %
FHLB advances250,000 200,000 25 %625,000 (60)%
Convertible notes, net204,565 203,270 1 %199,458 3 %
Subordinated debentures104,178 103,889 — %103,035 1 %
Accrued interest payable14,706 21,991 (33)%33,810 (57)%
Other liabilities145,558 155,700 (7)%142,762 2 %
  Total liabilities15,052,919 14,693,206 2 %13,631,429 10 %
Stockholders’ Equity
Common stock, $0.001 par value
136 136 — %136 — %
Capital surplus1,434,916 1,432,773 — %1,428,066 — %
Retained earnings785,940 774,970 1 %762,480 3 %
Treasury stock, at cost(200,000)(200,000)— %(163,820)(22)%
Accumulated other comprehensive gain, net32,753 32,682 — %9,149 258 %
  Total stockholders’ equity2,053,745 2,040,561 1 %2,036,011 1 %
  Total liabilities and stockholders’ equity$17,106,664 $16,733,767 2 %$15,667,440 9 %
Common stock shares - authorized150,000,000 150,000,000 150,000,000 
Common stock shares - outstanding123,264,864 123,260,760 125,756,543 
Treasury stock shares12,661,581 12,661,581 9,945,547 

Table Page 1

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

Three Months EndedTwelve Months Ended
12/31/20209/30/2020% change12/31/2019% change12/31/202012/31/2019% change
  Interest and fees on loans$132,117 $134,430 (2)%$152,795 (14)%$554,967 $627,673 (12)%
  Interest on securities9,014 9,848 (8)%10,737 (16)%39,362 46,295 (15)%
  Interest on federal funds sold and other investments598 942 (37)%2,241 (73)%4,549 10,818 (58)%
    Total interest income141,729 145,220 (2)%165,773 (15)%598,878 684,786 (13)%
  Interest on deposits 16,934 22,871 (26)%45,428 (63)%110,369 190,158 (42)%
  Interest on other borrowings and convertible notes4,039 4,712 (14)%6,837 (41)%21,011 28,033 (25)%
    Total interest expense20,973 27,583 (24)%52,265 (60)%131,380 218,191 (40)%
Net interest income before provision for credit losses120,756 117,637 3 %113,508 6 %467,498 466,595 — %
Provision for credit losses27,500 22,000 25 %1,000 2,650 %95,000 7,300 1,201 %
Net interest income after provision for credit losses93,256 95,637 (2)%112,508 (17)%372,498 459,295 (19)%
  Service fees on deposit accounts2,991 2,736 9 %4,510 (34)%12,443 17,933 (31)%
  International service fees696 987 (29)%780 (11)%3,139 3,926 (20)%
  Loan servicing fees, net566 772 (27)%660 (14)%2,809 2,316 21 %
  Wire transfer fees867 892 (3)%1,100 (21)%3,577 4,558 (22)%
  Net gains on sales of other loans1,618 2,853 (43)%1,876 (14)%8,004 4,487 78 %
  Net gains on sales of securities available for sale— 7,531 (100)%— — %7,531 282 2,571 %
  Other income and fees4,677 1,742 168 %4,053 15 %15,929 16,181 (2)%
    Total noninterest income11,415 17,513 (35)%12,979 (12)%53,432 49,683 8 %
  Salaries and employee benefits40,911 40,659 1 %39,841 3 %162,922 161,174 1 %
  Occupancy7,200 7,264 (1)%7,516 (4)%28,917 30,735 (6)%
  Furniture and equipment4,122 4,513 (9)%4,260 (3)%17,548 15,583 13 %
  Advertising and marketing1,695 1,601 6 %2,462 (31)%6,284 9,146 (31)%
  Data processing and communications2,235 2,204 1 %2,416 (7)%9,344 10,780 (13)%
  Professional fees1,847 1,513 22 %5,948 (69)%8,170 22,528 (64)%
  FDIC assessment1,166 1,167 — %772 51 %5,544 3,882 43 %
  Credit related expenses2,001 1,793 12 %1,717 17 %6,817 4,975 37 %
  OREO (income) expense, net(86)1,770 N/A(122)(30)%3,865 (934)N/A
  FHLB prepayment fee— 3,584 (100)%— — %3,584 — 100 %
  Branch restructuring costs2,367 — 100 %— 100 %2,367 — 100 %
  Other7,605 7,338 4 %5,619 35 %28,277 24,759 14 %
    Total noninterest expense71,063 73,406 (3)%70,429 1 %283,639 282,628 — %
Income before income taxes33,608 39,744 (15)%55,058 (39)%142,291 226,350 (37)%
Income tax provision5,289 9,254 (43)%12,049 (56)%30,776 55,310 (44)%
Net income $28,319 $30,490 (7)%$43,009 (34)%$111,515 $171,040 (35)%
Earnings per Common Share:
  Basic$0.23 $0.25 $0.34 $0.90 $1.35 
  Diluted$0.23 $0.25 $0.34 $0.90 $1.35 
Average Shares Outstanding:
  Basic123,264,172 123,251,336 126,410,924 123,501,401 126,598,564 
  Diluted123,874,229 123,536,765 126,835,273 123,889,343 126,875,320 
Table Page 2

Hope Bancorp, Inc.
Selected Financial Data
Unaudited

At or for the Three Months Ended
(Annualized)		At or for the Twelve Months Ended
Profitability measures:12/31/20209/30/202012/31/201912/31/202012/31/2019
  ROA 0.67 %0.72 %1.13 %0.68 %1.12 %
  ROE 5.54 %5.98 %8.46 %5.49 %8.63 %
  ROTCE (1)
7.21 %7.80 %11.04 %7.16 %11.37 %
  Net interest margin3.02 %2.91 %3.16 %3.00 %3.27 %
  Efficiency ratio53.77 %54.31 %55.68 %54.45 %54.74 %
  Noninterest expense / average assets1.69 %1.73 %1.85 %1.72 %1.86 %
1 Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles 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 EndedTwelve Months Ended
Pre-tax acquisition accounting adjustments12/31/20209/30/202012/31/201912/31/202012/31/2019
Accretion on acquired non-impaired loans$452 $747 $1,945 $2,916 $7,956 
Accretion on acquired credit deteriorated/purchased credit impaired loans3,064 4,584 5,958 20,143 23,874 
Amortization of premium on low income housing tax credits(71)(71)(76)(283)(303)
Amortization of premium on acquired FHLB borrowings— — — — 1,280 
Accretion of discount on acquired subordinated debt(289)(287)(281)(1,143)(1,107)
Amortization of core deposit intangibles(531)(531)(557)(2,125)(2,228)
Total acquisition accounting adjustments$2,625 $4,442 $6,989 $19,508 $29,472 

Table Page 3

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


Three Months Ended
12/31/20209/30/202012/31/2019
InterestAnnualizedInterestAnnualizedInterestAnnualized
AverageIncome/AverageAverageIncome/AverageAverageIncome/ Average
BalanceExpenseYield/CostBalanceExpenseYield/CostBalanceExpense Yield/Cost
INTEREST EARNING ASSETS:
  Loans, including loans held for sale $13,046,443 $132,117 4.03 %$12,728,558 $134,430 4.20 %$12,036,477 $152,795 5.04 %
  Securities available for sale 2,123,025 9,014 1.69 %2,010,907 9,848 1.95 %1,755,887 10,737 2.43 %
  FHLB stock and other investments 749,281 598 0.32 %1,342,641 942 0.28 %463,615 2,241 1.92 %
Total interest earning assets$15,918,749 $141,729 3.54 %$16,082,106 $145,220 3.59 %$14,255,979 $165,773 4.61 %
INTEREST BEARING LIABILITIES:
  Deposits:
    Demand, interest bearing $4,910,649 $5,541 0.45 %$4,895,101 $6,546 0.53 %$3,682,300 $14,924 1.61 %
    Savings 305,341 898 1.17 %302,882 907 1.19 %265,008 748 1.12 %
    Time deposits4,240,500 10,495 0.98 %4,703,640 15,418 1.30 %5,148,092 29,756 2.29 %
  Total interest bearing deposits9,456,490 16,934 0.71 %9,901,623 22,871 0.92 %9,095,400 45,428 1.98 %
  FHLB advances204,900 657 1.28 %353,587 1,323 1.49 %608,052 2,921 1.91 %
  Convertible notes, net203,807 2,383 4.58 %202,470 2,370 4.58 %198,669 2,334 4.60 %
  Subordinated debentures100,118 999 3.90 %99,819 1,019 3.99 %98,972 1,582 6.25 %
Total interest bearing liabilities9,965,315 $20,973 0.84 %10,557,499 $27,583 1.04 %10,001,093 $52,265 2.07 %
Noninterest bearing demand deposits4,637,584 4,239,108 2,999,048 
Total funding liabilities/cost of funds$14,602,899 0.57 %$14,796,607 0.74 %$13,000,141 1.60 %
Net interest income/net interest spread$120,756 2.70 %$117,637 2.55 %$113,508 2.54 %
Net interest margin3.02 %2.91 %3.16 %
Cost of deposits:
    Noninterest bearing demand deposits$4,637,584 $— — %$4,239,108 $— — %$2,999,048 $— — %
    Interest bearing deposits9,456,490 16,934 0.71 %9,901,623 22,871 0.92 %9,095,400 45,428 1.98 %
Total deposits$14,094,074 $16,934 0.48 %$14,140,731 $22,871 0.64 %$12,094,448 $45,428 1.49 %
Table Page 4

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


Twelve Months Ended
12/31/202012/31/2019
Interest Interest
AverageIncome/AverageAverage Income/ Average
BalanceExpenseYield/CostBalance Expense Yield/Cost
INTEREST EARNING ASSETS:
  Loans, including loans held for sale $12,698,523 $554,967 4.37 %$11,998,675 $627,673 5.23 %
  Securities available for sale 1,899,948 39,362 2.07 %1,796,412 46,295 2.58 %
  FHLB stock and other investments 982,419 4,549 0.46 %453,452 10,818 2.39 %
Total interest earning assets$15,580,890 $598,878 3.84 %$14,248,539 $684,786 4.81 %
INTEREST BEARING LIABILITIES:
  Deposits:
    Demand, interest bearing $4,729,438 $34,529 0.73 %$3,319,556 $57,731 1.74 %
    Savings 291,655 3,475 1.19 %241,968 2,596 1.07 %
    Time deposits 4,698,503 72,365 1.54 %5,556,983 129,831 2.34 %
  Total interest bearing deposits9,719,596 110,369 1.14 %9,118,507 190,158 2.09 %
  FHLB advances435,836 6,865 1.58 %688,652 12,031 1.75 %
  Convertible notes, net201,859 9,457 4.61 %196,835 9,264 4.64 %
  Subordinated debentures99,682 4,689 4.63 %98,551 6,738 6.74 %
Total interest bearing liabilities10,456,973 $131,380 1.26 %10,102,545 $218,191 2.16 %
Noninterest bearing demand deposits3,840,935 2,948,212 
Total funding liabilities/cost of funds$14,297,908 0.92 %$13,050,757 1.67 %
Net interest income/net interest spread$467,498 2.58 %$466,595 2.65 %
Net interest margin3.00 %3.27 %
Cost of deposits:
    Noninterest bearing demand deposits$3,840,935 $— — %$2,948,212 $— — %
    Interest bearing deposits9,719,596 110,369 1.14 %9,118,507 190,158 2.09 %
Total deposits$13,560,531 $110,369 0.81 %$12,066,719 $190,158 1.58 %

Table Page 5

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

 Three Months Ended  Twelve Months Ended
AVERAGE BALANCES:12/31/20209/30/2020% change12/31/2019% change12/31/202012/31/2019% change
Loans receivable, including loans held for sale $13,046,443 $12,728,558 2 %$12,036,477 8 %$12,698,523 $11,998,675 6 %
Investments2,872,306 3,353,548 (14)%2,219,502 29 %2,882,367 2,249,864 28 %
Interest earning assets15,918,749 16,082,106 (1)%14,255,979 12 %15,580,890 14,248,539 9 %
Total assets16,824,700 17,020,795 (1)%15,228,488 10 %16,515,102 15,214,412 9 %
Interest bearing deposits9,456,490 9,901,623 (4)%9,095,400 4 %9,719,596 9,118,507 7 %
Interest bearing liabilities9,965,315 10,557,499 (6)%10,001,093 — %10,456,973 10,102,545 4 %
Noninterest bearing demand deposits4,637,584 4,239,108 9 %2,999,048 55 %3,840,935 2,948,212 30 %
Stockholders’ equity2,045,959 2,039,555 — %2,034,231 1 %2,032,570 1,981,811 3 %
Net interest earning assets5,953,434 5,524,607 8 %4,254,886 40 %5,123,917 4,145,994 24 %
LOAN PORTFOLIO COMPOSITION: 12/31/20209/30/2020% change12/31/2019% change
Commercial loans$4,157,787 $3,700,020 12 %$2,719,818 53 %
Real estate loans8,772,134 8,713,536 1 %8,666,901 1 %
Consumer and other loans633,292 706,669 (10)%889,288 (29)%
    Loans, net of deferred loan fees and costs13,563,213 13,120,225 3 %12,276,007 10 %
Allowance for credit losses(206,741)(179,849)(15)%(94,144)(120)%
    Loans receivable, net$13,356,472 $12,940,376 3 %$12,181,863 10 %
REAL ESTATE LOANS BY PROPERTY TYPE:12/31/20209/30/2020% change12/31/2019% change
Retail buildings$2,293,396 $2,311,516 (1)%$2,298,872 — %
Hotels/motels1,634,287 1,675,960 (2)%1,709,189 (4)%
Gas stations/car washes892,110 824,378 8 %844,081 6 %
Mixed-use facilities750,867 754,096 — %785,882 (4)%
Warehouses1,091,389 1,022,657 7 %1,030,876 6 %
Multifamily518,498 518,295 — %465,397 11 %
Other1,591,587 1,606,634 (1)%1,532,604 4 %
Total$8,772,134 $8,713,536 1 %$8,666,901 1 %
DEPOSIT COMPOSITION:12/31/20209/30/2020% change12/31/2019% change
Noninterest bearing demand deposits$4,814,254 $4,488,529 7 %$3,108,687 55 %
Money market and other5,232,413 4,763,893 10 %3,985,556 31 %
Saving deposits300,770 308,943 (3)%274,151 10 %
Time deposits3,986,475 4,446,991 (10)%5,158,970 (23)%
Total deposit balances$14,333,912 $14,008,356 2 %$12,527,364 14 %
DEPOSIT COMPOSITION (%):12/31/20209/30/202012/31/2019
Noninterest bearing demand deposits33.6 %32.1 %24.8 %
Money market and other36.5 %34.0 %31.8 %
Saving deposits2.1 %2.2 %2.2 %
Time deposits27.8 %31.7 %41.2 %
Total deposit balances100.0 %100.0 %100.0 %
Table Page 6

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

CAPITAL RATIOS:12/31/20209/30/202012/31/2019
  Total stockholders’ equity$2,053,745 $2,040,561 $2,036,011 
  Common equity tier 1 ratio10.94 %11.36 %11.76 %
  Tier 1 risk-based capital ratio 11.64 %12.09 %12.51 %
  Total risk-based capital ratio 12.87 %13.19 %13.23 %
  Tier 1 leverage ratio 10.22 %10.02 %11.22 %
  Total risk weighted assets$14,341,456 $13,691,823 $13,208,299 
  Book value per common share$16.66 $16.55 $16.19 
  Tangible common equity to tangible assets 1
9.50 %9.63 %10.27 %
  Tangible common equity per share 1
$12.81 $12.70 $12.40 
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 EndedTwelve Months Ended
ALLOWANCE FOR CREDIT LOSSES CHANGES:12/31/20209/30/20206/30/20203/31/202012/31/201912/31/202012/31/2019
Balance at beginning of period$179,849 $161,771 $144,923 $94,144 $93,882 $94,144 $92,557 
CECL day 1 adoption impact— — — 26,200 — 26,200 — 
Provision for credit losses27,500 22,000 17,500 28,000 1,000 95,000 7,300 
Recoveries2,207 2,428 252 2,536 939 7,423 3,736 
Charge offs (2,815)(6,350)(904)(5,957)(1,677)(16,026)(8,109)
PCI allowance adjustment— — — — — — (1,340)
Balance at end of period$206,741 $179,849 $161,771 $144,923 $94,144 $206,741 $94,144 
Net charge offs/average loans receivable (annualized)0.02 %0.12 %0.02 %0.11 %0.02 %0.07 %0.04 %
Three Months EndedTwelve Months Ended
NET CHARGE OFFS (RECOVERIES) BY TYPE:12/31/20209/30/20206/30/20203/31/202012/31/201912/31/202012/31/2019
Real estate loans$(726)$5,154 $148 $2,230 $203 $6,806 $(301)
Commercial loans1,167 (1,451)240 676 245 632 3,490 
Consumer loans167 219 264 515 290 1,165 1,184 
   Total net charge offs$608 $3,922 $652 $3,421 $738 $8,603 $4,373 
Table Page 7

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

NONPERFORMING ASSETS:12/31/20209/30/20206/30/20203/31/202012/31/2019
Loans on nonaccrual status 1
$85,238 $69,205 $82,137 $72,639 $54,785 
Delinquent loans 90 days or more on accrual status614 1,537 430 387 7,547 
Accruing troubled debt restructured loans37,354 35,429 44,026 43,789 35,709 
Total nonperforming loans123,206 106,171 126,593 116,815 98,041 
Other real estate owned20,121 18,410 20,983 23,039 24,091 
Total nonperforming assets$143,327 $124,581 $147,576 $139,854 $122,132 
Nonperforming assets/total assets0.84 %0.74 %0.86 %0.87 %0.78 %
Nonperforming assets/loans receivable & OREO1.06 %0.95 %1.14 %1.11 %0.99 %
Nonperforming assets/total capital6.98 %6.11 %7.27 %6.93 %6.00 %
Nonperforming loans/loans receivable0.91 %0.81 %0.98 %0.93 %0.80 %
Nonaccrual loans/loans receivable0.63 %0.53 %0.64 %0.58 %0.45 %
Allowance for credit losses/loans receivable1.52 %1.37 %1.26 %1.15 %0.77 %
Allowance for credit losses/nonaccrual loans242.55 %259.88 %196.95 %199.51 %171.84 %
Allowance for credit losses/nonperforming loans167.80 %169.40 %127.79 %124.06 %96.03 %
Allowance for credit losses/nonperforming assets144.24 %144.36 %109.62 %103.62 %77.08 %
1 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.5 million, $26.2 million, $30.3 million, $28.8 million, and $28.1 million, at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
NONACCRUAL LOANS BY TYPE:12/31/20209/30/20206/30/20203/31/202012/31/2019
Real estate loans$67,450 $51,739 $64,060 $56,787 $40,935 
Commercial loans13,911 13,022 12,079 12,747 10,893 
Consumer loans3,877 4,444 5,998 3,105 2,957 
   Total nonaccrual loans$85,238 $69,205 $82,137 $72,639 $54,785 
BREAKDOWN OF ACCRUING TROUBLED DEBT RESTRUCTURED LOANS:12/31/20209/30/20206/30/20203/31/202012/31/2019
Retail buildings$5,408 $5,451 $5,526 $5,014 $4,215 
Gas stations/car washes219 224 1,789 1,675 — 
Mixed-use facilities3,521 4,323 3,583 3,157 3,175 
Warehouses7,296 7,320 13,433 13,381 10,381 
Other 2
20,910 18,111 19,695 20,562 17,938 
Total$37,354 $35,429 $44,026 $43,789 $35,709 
2 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:12/31/20209/30/20206/30/20203/31/202012/31/2019
30 - 59 days$11,347 $5,962 $18,857 $37,866 $14,433 
60 - 89 days16,826 58,065 29,975 2,605 4,712 
Total$28,173 $64,027 $48,832 $40,471 $19,145 
ACCRUING DELINQUENT LOANS 30-89 DAYS PAST DUE BY TYPE:12/31/20209/30/20206/30/20203/31/202012/31/2019
Real estate loans$15,689 $60,510 $27,245 $23,753 $7,689 
Commercial loans3,393 624 5,987 4,583 692 
Consumer loans9,091 2,893 15,600 12,135 10,764 
Total$28,173 $64,027 $48,832 $40,471 $19,145 
CRITICIZED LOANS:12/31/20209/30/20206/30/20203/31/202012/31/2019
Special mention$184,941 $153,388 $127,149 $122,279 $141,452 
Substandard366,556 311,902 299,357 278,771 259,278 
Doubtful/Loss1 6,640 11 12 13 
Total criticized loans$551,498 $471,930 $426,517 $401,062 $400,743 
Table Page 9

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


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. A reconciliation of the GAAP to non-GAAP financial measures utilized by management is provided below.
Three Months EndedTwelve Months Ended
12/31/20209/30/202012/31/201912/31/202012/31/2019
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Average stockholders’ equity$2,045,959 $2,039,555 $2,034,231 $2,032,570 $1,981,811 
Less: Goodwill and core deposit intangible assets, net(474,467)(475,010)(476,596)(475,263)(477,444)
Average tangible common equity$1,571,492 $1,564,545 $1,557,635 $1,557,307 $1,504,367 
Net Income$28,319 $30,490 $43,009 $111,515 $171,040 
Return on average tangible common equity (annualized)7.21 %7.80 %11.04 %7.16 %11.37 %
TANGIBLE COMMON EQUITY12/31/20209/30/202012/31/2019
Total stockholders’ equity$2,053,745 $2,040,561 $2,036,011 
Less: Goodwill and core deposit intangible assets, net(474,158)(474,689)(476,283)
Tangible common equity$1,579,587 $1,565,872 $1,559,728 
Total assets$17,106,664 $16,733,767 $15,667,440 
Less: Goodwill and core deposit intangible assets, net(474,158)(474,689)(476,283)
Tangible assets$16,632,506 $16,259,078 $15,191,157 
Common shares outstanding123,264,864 123,260,760 125,756,543 
  Tangible common equity to tangible assets9.50 %9.63 %10.27 %
  Tangible common equity per share$12.81 $12.70 $12.40 
Three Months EndedTwelve Months Ended
12/31/20209/30/202012/31/201912/31/202012/31/2019
PRE-TAX PRE-PROVISION INCOME
Net income$28,319 $30,490 $43,009 $111,515 $171,040 
Add back - tax provision5,289 9,254 12,049 30,776 55,310 
Add back - provision for credit losses27,500 22,000 1,000 95,000 7,300 
Pre-tax pre-provision income$61,108 $61,744 $56,058 $237,291 $233,650 
Table Page 10