Hope Bancorp, Inc.

Good day and welcome to the HOPE Bancorp 2024 Second 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 telephone keypad. 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 Angie Yang, the Director of Investor Relations. Please go ahead. Thank you, Megan.

Good morning, everyone, and thank you for joining us for the Hope Bancorp 2024 Second Quarter Investor Conference Call. As usual, we will be using a slide presentation to accompany our discussion this morning, which is available in the presentations page of our IR website. Beginning on slide two, let me start with a brief statement regarding forward-looking remarks. The call today contains forward-looking projections regarding the future financial performance of the company and future events, as well as statements regarding the proposed transaction between Hope Bancorp and Territorial Bancorp. The closing of the proposed transaction is subject to regulatory approvals. The approval of the stockholders of Territorial Bancorp and other customary closing conditions. Forward-looking statements are not guarantees of future performance. Actual outcomes and results may differ materially. Hope Bancorp assumes no obligation to revise any forward-looking projections that may be made on today's call. In addition, some of the information referenced on this call today are non-GAAP financial measures. For a more detailed description of the risk factors and a reconciliation of the GAAP to non-GAAP financial measures, please refer to the company's filings with the SEC, as well as the Safe Harbor Statements in our press release issued this morning. 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, Juliana Beliska, our Chief Financial Officer, Peter Koh, our Chief Operating Officer, is also 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 us begin on slide three with a brief overview of the quarter. For the second quarter of 2024, we earned net income of $25.3 million, or 21 cents per diluted share. Excluding notable items, our net income was $26.6 million and our earnings per share were 22 cents. Notable items this quarter included merger and restructuring related costs and a partial reversal of a prior accrual for the FDIC special assessment. Our results this quarter reflect continued progress in improving our financial performance following our strategic reorganization late last year. During the second quarter of 2024, our net interest margin expanded, our operating expenses decreased, and our return on assets improved. We are diligently working on our merger integration planning with Territorial Bancorp and look forward to closing the pending transaction by year end. Territorial will contribute stable and low-cost deposits to our franchise, and their loans will more than double HOPE's residential mortgage portfolio. On slide four, you can see that we ended the quarter with strong capital, and all our capital ratios expanded from March 31, 2024. As of June 30 of 2024, our total capital ratio was 14.42%, and our tangible common equity ratio was 9.72%. Our high capital ratios are a strong base with which to support emerging growth opportunities. Our board of directors declared a quarterly common stock dividend of 14 cents per share payable on August 22nd to stockholders of record as of August 8th, 2024. Continuing to slide five, At June 30, 2024, our total deposits were $14.7 billion, essentially stable quarter over quarter. Our front line continued to execute well with an increase in our non-interest-bearing demand deposits and other customer deposits, largely offsetting a planned runoff of broker deposits. Moving on to slide six. At June 30, 2024, our gross loans totaled $13.6 billion, a decrease of $87 million, or less than 1% quarter over quarter. $30 million of this decrease was from SBA loans sold in the second quarter. Overall, loan production improved this quarter. Residential mortgage growth was once again robust, and commercial real estate loans were stable. This was offset by elevated payoffs and paydowns within CNI loans. Based on our strengthening pipeline, we are looking forward to positive loan growth in the third quarter. On slides seven and eight, we provide more details on our commercial real estate loans, which are well diversified by property type and granular in size. The loan-to-values remain low, with a weighted average of approximately 47% at June 30, 2024, and the profile of our CRE portfolio has not changed. Asset quality is stable, and 98% of the commercial real estate portfolio was pass-graded at June 30, 2024. With that, I will ask Juliana to provide additional details on our financial performance for the second quarter. Juliana?