Hope Bancorp, Inc.

Good day and welcome to the HOPE Bancorp 2024 Fourth Quarter Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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, Director of Investor Relations. Please go ahead, ma'am.

Thank you, Chuck. Good morning, everyone, and thank you for joining us for the HOPE Bancorp 2024 Fourth 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 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 pending transaction between Hope Bancorp and Territorial Bancorp. The closing of the pending transaction is subject to regulatory approvals 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 statement in our press release issued this morning. Now we've 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. Kevin?

Thank you, Angie. Good morning, everyone, and thank you for joining us today. Before we get into our results, let me just take a moment to comment about the greater Los Angeles area fires. We are truly heartbroken to see the unprecedented disruption across our region. As one of the largest independent banks headquartered in this great city, we are committed to taking a leadership role in addressing the immediate and rebuilding needs of those impacted by the fires. Our recent cash donation to the United Way of Greater Los Angeles Wildfire Response Fund underscores our unwavering commitment to our community. I am confident that the impacted areas will be rebuilt stronger and better in the foreseeable future. Now, moving on to our results, let's begin on slide three with a brief overview of the quarter. For the fourth quarter of 2024, we earned net income of $24.3 million, or 20 cents per diluted share. And our pre-provisioned net revenue was $40 million, up 14% from September 30, 2024. Quarter over quarter, revenue grew and expenses decreased, improving our efficiency and pre-provision profitability. 2024 was a building year as we worked to position our balance sheet for future growth and improved profitability. We focused on strengthening our deposit base, lowering broker deposits down to 7% of total deposits as of December 31, 2024, compared with 10% as of December 31, 2023, and down from a peak of 15% in April 2023. We turned the corner on loan growth in the second half of 2024 with loans receivable of $13.6 billion as of December 31, 2024, up 1% on an annualized basis from June 30, 2024. Quarter over quarter, fourth-quarter average gross loans increased 2 percent on an annualized basis from the third quarter. We are optimistic in our outlook for 2025 and look forward to accelerating our earnings growth and profitability driven by an improved deposit mix, organic loan growth, and strong fee income growth. Furthermore, the addition of territorial Bancorp's low-cost core deposits and residential mortgage loans with pristine asset quality will be meaningful positive contributors to the combined company in 2025. On slide four, you can see our strong capital ratios with a tangible common equity ratio over 10% and a total capital ratio of nearly 15% as of December 31, 2024. This positions us well to support organic and strategic growth in the coming year. We expect to close the pending transaction with territorial bank work during the first quarter, subject to regulatory approvals. Our board of directors declared a quarterly common stock dividend of 14 cents per share payable on February 20th to stockholders of record as of February 6th, 2025. Continuing to slide five, at December 31, 2024, Our total deposits were $14.3 billion, down 3% from the end of the prior quarter. This included a decrease of $128 million from the sale of our Virginia branches, which closed on October 1st. In addition, during the fourth quarter, we saw typical year-end fluctuations in certain commercial deposits in the residential mortgage industry. Lastly, we exited some deposits due to high cost. Moving on to slide six, at December 31, 2024, our loans receivable of $13.6 billion, excluding loans held for sale, were up slightly from September 30. Fourth quarter average gross loans increased 2 percent on an annualized basis from the third quarter of 2024. We sold $48 million of SBA loans in the fourth quarter, compared with $41 million in the third quarter. In regard to the direct impact from the wildfires, we reviewed our loan portfolio to identify commercial, SBA, and residential mortgage properties located in and surrounding the fire zones. Thus far, our exposure has been minimal, or less than $5 million in aggregate of loans outstanding from a handful of customers. On slide 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 percent at December 31, 2024, and the profile of our commercial real estate portfolio has not changed. Asset quality remains stable with Over 98% of the commercial real estate loans passed graded at year end. With that, I will ask Juliana to provide additional details on our financial performance for the fourth quarter. Juliana?