Hope Bancorp, Inc.

And welcome to the Hope Bank Corp 2021 Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question from the queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Angie Yang, Director of Investor Relations. Please go ahead.

Thank you, Kate. Good morning, everyone, and thank you for joining us for the Hope Bancorp 2021 Fourth Quarter Investor Conference Call. As usual, we will be using a slide presentation to accompany our discussion this morning. If you have not done so already, please visit the Presentations page of our Investor Relations website to download a copy of the presentation. Or, if you are listening in through the webcast, you should be able to view the slides from your computer screen as we progress through the presentation. Beginning on slide two, let me begin with the brief statement regarding forward-looking remarks. The call today may contain forward-looking projections regarding the future financial performance of the company and future events. These statements are based on current expectations, estimates, forecasts, projections, and management assumptions about the future performance of the company, including any impact as a result of the COVID-19 pandemic, as well as the businesses and markets in which the company does and is expected to operate. These statements constitute forward-looking statements within the meaning of the U.S. private sector Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. We refer you to the documents the company files periodically with the FCC, as well as the safe harbor statements in our press release issued yesterday. Hope Bancorp assumes no obligation to revise any forward-looking projections that may be made on today's call. The company cautions that the complete financial results to be included in the annual report on Form 10-K for the year ended December 31, 2021 could differ materially from the financial results being reported today. In addition, some of the information referenced on this call today are non-GAAP financial measures. Please refer to our 2021 fourth quarter earnings release for the reconciliation of GAAP to non-GAAP financial measures. Now, we have allotted one hour for this call. Presenting from the management side today will be Kevin Kim, Hope Bancorp's Chairman, President and CEO, Alex Koh, Senior Executive Vice President and Chief Financial Officer, Peter Koh, who was promoted to Senior Executive Vice President and Chief Operating Officer, effective the beginning of 2022, is here with us as usual and will be available for the Q&A session. With that, let me turn the call over to Kevin Kim. Kevin?

Thank you, Angie. Good morning, everyone, and thank you for joining us today. Let's begin on slide three with a brief overview of our financial results. We delivered an outstanding financial performance in the fourth quarter of 2021 with a continuation of many of the positive trends that we experienced throughout the year. Another record level of loan originations, further reduction in our deposit costs, additional expansion in our net interest margin, and continued expense management leading to an improvement in operating efficiencies. And As we indicated on our last earnings call, following the significant de-risking of our balance sheet in the second and third quarters, our exceptionally strong loan production resulted in a higher level of loan growth that is more reflective of our traditional performance. This led to a strong increase in revenue and pre-provisioned net revenue for the fourth quarter. Our net interest income for 2021 fourth quarter increased 2% over the preceding third quarter, while our non-interest income increased 23% quarter over quarter. Altogether, with a 2% quarter over quarter decrease in non-interest expense, we delivered a significant improvement in our core performance with pre-provisioned net revenue coming in at $72.2 million in the fourth quarter, up 10% from the preceding third quarter. Moving on to slide four, despite the continued challenges presented by the pandemic and supply chain disruptions, for a second consecutive quarter, we produced record loan originations as the larger, more productive commercial banking teams we have built continued to capitalize on high quality lending opportunities. Total loan production was a record $1.24 billion in the fourth quarter, an increase of 23% compared with the preceding third quarter. This resulted in annualized loan growth of 15.9% in the fourth quarter. Excluding PPP loans, loans outstanding increased 4.9% quarter over quarter or 19.6% annualized. We continue to see higher levels of commercial loan production resulting from the increasing contributions we are getting now from new banking talent added in the past couple of years, our success in developing relationships with larger corporate clients, and the expansion of our lending in attractive vertical markets such as telecom and healthcare. We had $538 million of commercial loan production in the fourth quarter, which was an increase of 57% over the preceding third quarter. As a result, our commercial loan portfolio increased by 9% from the end of the prior quarter, which continued to improve the diversification of our loan portfolio. Our CRA loan production increased 6% quarter-over-quarter resulting in 2% growth in this portfolio during the fourth quarter. The higher levels of CRE loan production are partially attributable to the continued expansion of our multifamily lending. Multifamily loans accounted for 15% of our total CRE loan originations this quarter, and as a result, our multifamily portfolio increased 8% from the end of the prior quarter. furthering our progress in creating a more diversified, lower-risk commercial real estate portfolio. In addition to multifamily, another area where we are seeing strong CRE demand is in warehouse properties, given the growing need for inventory storage and fulfillment facilities. Warehouse CRE loans accounted for 22% of our total CRE originations in the fourth quarter, resulting in a 7% increase from September 30 of 2021. The broader business development capabilities we have built have enabled us to generate record loan production while substantially eliminating originations of hotel, motel loans in order to continue working down this concentration in our portfolio. Our SBA loan production totaled $55 million in the fourth quarter, which is lower than the preceding third quarter as overall demand for SBA loans across the industry declined following the end of the fee waiver and payment relief in September. We generally saw good trends in loan pricing in the fourth quarter with the average rate on commercial loans increasing from the preceding third quarter and commercial real estate loan rates being stable. Overall, the average rate on our total loan production was two basis points higher than the prior quarter. Notably, the fourth quarter was our third consecutive quarter in which variable rate loans accounted for greater than 50% of the mix of new loans despite the high level of demand for fixed rate loans in the low interest rate environment. Now I will ask Alex to provide additional details on our financial performance for the fourth quarter. Alex?