Hope Bancorp, Inc.

Good day and welcome to the HOPE Baincorp 2022 First Quarter Earnings Conference Call. All participants will be in a 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. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Angie Yang. Please go ahead.

Thank you, Chuck. Good morning, everyone, and thank you for joining us for the Hope Bancorp 2022 First 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 IR 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 a 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 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 SEC, 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 quarterly report on Form 10-Q for the quarter ended March 31, 2022 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 2022 first 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, and Alex Koh, Senior Executive Vice President and Chief Financial Officer. Peter Koh, Senior Executive Vice President and Chief Operating Officer, 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. As we expected, many of the positive trends we experienced last year have continued in 2022. Most notably, we continue to see strong loan production volumes, an expanding net interest margin, and improvement in our asset quality. We generated net income of $60.7 million or 50 cents per share in the first quarter, up 18% from $51.6 million, or 43 cents per share in the preceding fourth quarter. Our return on average assets and return on average tangible common equity increased considerably to 1.37% and 15.01%, respectively, from 1.16% and 12.85%. Moving on to slide four, while there were many challenges during the first quarter, ranging from the Omicron surge to inflationary pressures to heightened geopolitical tensions, we continued to generate a high level of loan originations. For the third consecutive quarter, we had more than $1 billion in total loan production, which is a record high for the first quarter. and reflected a 21% increase over the first quarter of last year. Excluding PPP loans, our first quarter originations this year increased 89% over the loan production volume in the 2021 first quarter. The very strong loan production volume in the first quarter led to loan growth of 6.7% on an annualized basis, excluding PPP loans. During the first quarter, we continue to see robust levels of demand for commercial real estate loans. We had $578 million of commercial real estate loan production, which was down from the seasonally strong fourth quarter production, but 86% higher than the first quarter of last year. We continue to benefit from our increased focus on multifamily lending. Multifamily loans accounted for approximately 17% of our total CRA loan originations this quarter, and as a result, our multifamily portfolio increased 13% from the end of the prior quarter. As a result of our increased production of multifamily warehouses and mixed-use facilities, along with the reductions in our hotel-motel properties, we continue to create a more diversified, lower-risk commercial real estate portfolio. We had $344 million of commercial loan production in the first quarter. As with the CRE loan production, this was down from seasonally strong fourth quarter. However, the CNI production in the first quarter was higher than any other quarter in 2021, excluding PPP loans, and more than double the non-PPP production we had in the first quarter of last year, excluding warehouse lines our commercial loan portfolio increased at an annualized rate of 16% during the first quarter. Within our corporate banking group, the higher level of commercial loan production reflects the success of our efforts to add new banking talent that has increased our ability to target attractive vertical industries and expand our geographic presence. In particular, our telecom and media portfolios continue to grow and we are seeing increasing production in our healthcare vertical following the addition of this team last year. Our SBA loan production for the first quarter totaled $57 million, which was slightly higher than the preceding fourth quarter, while we had a 27% increase in residential mortgage production. We generally saw good trends in loan pricing in the first quarter, with the average rate on new loan originations increasing from the preceding quarter in each asset class. This resulted in our average rate on total loan production increasing by 16 basis points compared with the preceding quarter. The productivity of our banking teams has enabled us to generate a higher level of loan originations despite limiting our production of long-term fixed rate loans as part of our interest rate risk management strategy. Now, I will ask Alex to provide additional details on our financial performance for the first quarter. Alex?