Hope Bancorp, Inc.

Good day, and welcome to the Hope Bancorp 2024 Third 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 a touchtone phone. 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, Director of Investor Relations. Please go ahead.

Thank you, Nick. Good morning, everyone, and thank you for joining us for the HOPE ANCORP 2024 Third 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 Investor Relations website. Beginning on slide two, let me start with the 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 pending transaction between Hope Bancorp and Territorial Bancorp. The closing of the pending 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 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, and 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. Our 2024 third quarter financial results were highlighted by continued success in our core deposit growth and a turnaround in our loan growth trend, reflecting higher levels of productivity from our banking team. Customer deposits grew a strong 11% annualized from June 30, 2024, supporting loan growth and offsetting a planned reduction in broker deposits. Loans receivable, which excludes loans held for sale, grew 2% annualized from June 30, 2024. For the third quarter of 2024, we earned net income of $24.2 million, or 20 cents per diluted share. Excluding notable items, our net income was $25.2 million, and our earnings per share were 21 cents. Notable items this quarter were primarily merger-related. On slide four, Hope Bancorp's September 30, 2024 risk-based capital ratios were highest yet since merging with Wilshire in 2016. All our risk-based capital ratios expanded quarter-by-quarter from June 30, 2024. As of September 30, our total capital ratio was 14.8%, and our tangible common equity ratio was 10.1%. Together with our prudent balance sheet management and ample liquidity, our strong capital ratios position us well to increase our market share, support merger activity, add new client relationships, and generate profitable growth as economic conditions and loan demand improve in the coming year. Our board of directors declared a quarterly common stock dividend of 14 cents per share payable on November 21st to stockholders of record as of November 7th, 2024. Continuing to slide five, at September 30, 2024, our total deposits were $14.7 billion, essentially stable quarter over quarter, with robust growth in customer deposits, offsetting a $351 million planned reduction of broker deposits. You can see on this slide that we reduced broker deposits in our mix to 7% as of September 30, 2024, down from 14% as of June 30, 2023. In addition, I would highlight that more than 2 thirds of the non-interest bearing demand deposit growth this quarter came from our small business accounts. On October 1, 2024, the sale of our two branches in Virginia closed, totaling approximately $129 million of deposits. This outflow will be offset by organic customer deposit growth from elsewhere in our network. Moving on to slide six. At September 30, 2024, our loans receivable, excluding loans held for sale, increased by $51 million from June 30, equivalent to 2% annualized growth and reflecting higher balances of residential mortgage and commercial loans. During the third quarter, we sold $41 million of SBA loans. Quarter over quarter, commercial and SBA loan production increased, while residential mortgage loan production was relatively consistent. On slides seven and nine, I'm sorry, 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% as September 30, 2024, and the profile of our commercial real estate portfolio has not changed. Asset quality remains stable with 98% of the commercial real estate loans past rated as September 30, 2024. With that, I will ask Juliana to provide additional details on our financial performance for the Juliana?