Hope Bancorp, Inc. (the "Company") (NASDAQ:HOPE), the holding company of Bank of Hope (the "Bank"), today reported unaudited financial results for its third quarter and nine months ended September 30, 2021.

For the three months ended September 30, 2021, net income increased 3% to $55.5 million, or $0.45 per diluted common share, from $53.8 million, or $0.43 per diluted common share, in the preceding second quarter and increased 82% from $30.5 million, or $0.25 per diluted common share, in the year-ago third quarter.

"We continued to deliver improved operational performance and profitability in the third quarter of 2021, but more importantly, we took strategic actions to de-risk the loan portfolio which led to significant improvements in asset quality and positioned the Company for a return to organic loan growth in the quarters ahead," said Kevin S. Kim, Chairman, President and Chief Executive Officer of Hope Bancorp, Inc. "Business development was the strongest it has ever been topping a record $1.0 billion in new loan production and included record high SBA origination volumes of $115.0 million. While SBA PPP loan forgiveness and strategic loan sales of higher-risk credits mitigated loan growth again this quarter, we believe these headwinds are now largely behind us and have renewed our focus on growth and expansion. Deposits at quarter-end totaled a record high $15.1 billion driven primarily by growth in noninterest bearing demand deposits, which led to an eighth consecutive quarter of declining deposit costs. Benefiting from the strategic actions taken during the quarter, we posted meaningful improvements in our credit quality with nonaccrual loans decreasing 51% and criticized assets declining 19% quarter-over-quarter.

"With the significant improvements in asset quality this quarter, together with our track record of robust loan production and positive core deposit growth, we believe we are well positioned to drive even stronger performance in the years ahead," said Kim.

Q3 2021 Highlights

Loan originations increased 13% quarter-over-quarter to a record high $1.01 billion from $894.1 million in the second quarter of 2021.
Loans receivable remained at $13.42 billion, as record originations were offset by loan sales, SBA PPP loan forgiveness, other payoffs and pay downs and decreases in mortgage warehouse line utilizations.
Excluding SBA PPP loan forgiveness and strategic loan sales and transfers to held-for-sale of potentially problematic loans, loans receivable would have increased 3% quarter-over-quarter or 12% on an annualized basis.
Noninterest bearing demand deposits increased 7% quarter-over-quarter and accounted for a record 40% of total deposits, contributing to record high deposits of $15.06 billion.
Cost of interest bearing deposits decreased 6 basis points and total cost of deposits decreased 4 basis points quarter-over-quarter marking the eighth consecutive quarter of declining deposit costs.
Interest income increased 2% quarter-over-quarter while interest expense declined 8%, resulting in a 3% increase in pre-provision net interest income.
Net interest margin declined 4 basis points quarter-over-quarter, as the benefit of lower cost of deposits was more than offset by the impact of excess liquidity on the balance sheet.
The Company recorded a negative provision for credit losses of $10.0 million.
Net income increased 3% quarter-over-quarter and totaled $55.5 million, or $0.45 per diluted common share.
Pre-provision net revenue⁽¹⁾ ("PPNR") increased 1% quarter-over-quarter and totaled $65.4 million.
Net charge offs of $42.7 million reflects strategic actions to eliminate potentially problematic assets and resulted in significantly improved asset quality metrics.
Nonaccrual loans decreased 51% quarter-over-quarter and total criticized loans decreased 19%.
Return on average assets remained unchanged at 1.25%, while return on average equity increased to 10.61% from 10.41% in the second quarter of 2021.
Announced new $50 million share buyback program on July 26, 2021 and repurchased 3,487,426 shares as of September 30, 2021, totaling $47.2 million.

⁽¹⁾	PPNR is a non-GAAP financial measures, a reconciliation of which is provided in the accompanying financial information on Table Page 10.

Financial Highlights

(dollars in thousands, except per share data) (unaudited)	At or for the Three Months Ended
	9/30/2021			6/30/2021			9/30/2020
Net income	$	55,499		$	53,763		$	30,490
Diluted earnings per share	$	0.45		$	0.43		$	0.25
Net interest income before provision (credit) for credit losses	$	130,296		$	126,577		$	117,637
Net interest margin		3.07	%		3.11	%		2.91	%
Noninterest income	$	10,617		$	11,076		$	17,513
Noninterest expense	$	75,502		$	73,123		$	73,406
Net loans receivable	$	13,281,917		$	13,234,849		$	12,940,376
Deposits	$	15,062,527		$	14,726,230		$	14,008,356
Total cost of deposits		0.26	%		0.30	%		0.64	%
Nonaccrual loans⁽¹⁾	$	54,380		$	111,008		$	69,205
Nonperforming loans to loans receivable⁽¹⁾		0.73	%		1.24	%		0.81	%
ACL to loans receivable		1.02	%		1.41	%		1.37	%
ACL to nonaccrual loans⁽¹⁾		251.52	%		170.67	%		259.88	%
ACL to nonperforming assets⁽¹⁾		120.33	%		103.11	%		144.36	%
Provision (credit) for credit losses	$	(10,000	)	$	(7,000	)	$	22,000
Net charge offs	$	42,678		$	11,491		$	3,922
Return on average assets ("ROA")		1.25	%		1.25	%		0.72	%
Return on average equity ("ROE")		10.61	%		10.41	%		5.98	%
Return on average tangible common equity ("ROTCE")⁽²⁾		13.71	%		13.50	%		7.80	%
Noninterest expense / average assets		1.70	%		1.70	%		1.73	%
Efficiency ratio		53.58	%		53.12	%		54.31	%

⁽¹⁾

Excludes delinquent SBA loans that are guaranteed and currently in liquidation.

⁽²⁾

Return on average tangible common equity is a non-GAAP financial measure. A reconciliation of the Company's return on average tangible

common equity is provided in the accompanying financial information on Table Page 10.

Operating Results for the 2021 Third Quarter

Net interest income before the provision (credit) for credit losses for the 2021 third quarter increased 3% to $130.3 million from $126.6 million in the 2021 second quarter and increased 11% from $117.6 million in the 2020 third quarter. The Company attributed the increase to higher interest income on investment securities and loans, as well as lower interest expense on deposits.

The net interest margin for the 2021 third quarter decreased 4 basis points to 3.07% from 3.11% in the preceding 2021 second quarter. The Company noted that excess liquidity on the balance sheet adversely impacted net interest margin by 8 basis points, which more than offset the benefits of lower deposit costs. The net interest margin in the prior-year third quarter was 2.91%.

The weighted average yield on loans for the 2021 third quarter was relatively stable quarter-over-quarter, decreasing 1 basis point to 3.97% from 3.98% in the 2021 second quarter, but declined by 23 basis points from 4.20% in the year-ago third quarter.

The weighted average cost of deposits for the 2021 third quarter decreased for the eighth consecutive quarter to 0.26%, representing a 4 basis point decrease from 0.30% for the 2021 second quarter and a 38 basis point decrease from 0.64% for the 2020 third quarter. The Company attributed the improvements in the weighted average cost of deposits to a continuing shift in its deposit mix to lower-cost core deposits and the ongoing downward repricing of interest bearing deposits. The cost of interest bearing deposits was 0.42%, 0.48% and 0.92% for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

Noninterest income for the 2021 third quarter decreased to $10.6 million from $11.1 million for the 2021 second quarter. During the 2021 third quarter, the Company sold $40.2 million in retail mortgage loans and $31.3 million of the guaranteed portion of SBA 7(a) loans, compared with $42.6 million and $30.0 million, respectively, in the preceding second quarter. Noninterest income in the year-ago third quarter totaled $17.5 million, during which quarter the Company recognized $7.5 million in net gains on sales of securities available for sale.

Noninterest expense for the 2021 third quarter increased to $75.5 million from $73.1 million in the preceding second quarter and $73.4 million in the year-ago third quarter.

Salaries and employee benefits expense for the 2021 third quarter increased to $47.0 million from $42.3 million in the preceding second quarter, reflecting a number of factors. The Company increased its bonus reserve for the year to reflect the higher-than-expected financial performance. In addition, employee base salaries increased meaningfully quarter-over-quarter, predominantly reflecting new frontline hires, including a new multi-family lending team recruited from a large money center bank, as well as wage increases necessary to retain existing employees. The Company's self-funded group insurance expense for the 2021 third quarter was also significantly higher quarter-over-quarter.

In addition, credit related expenses for the 2021 third quarter increased by $1.2 million quarter-over-quarter, but this fluctuation was within normal levels. Altogether, these increases in noninterest expense were partially offset by a $2.0 million quarter-over-quarter decrease in professional fees for the three months ended September 30, 2021, reflecting a favorable outcome and closure of a litigation case.

The Company's efficiency ratio for the 2021 third quarter was fairly stable at 53.58%, compared with 53.12% for the preceding second quarter and 54.31% for the year-ago third quarter. Noninterest expense as a percentage of average assets remained at 1.70% for the 2021 third quarter but improved from 1.73% in the year-ago third quarter.

The effective tax rate for the 2021 third quarter increased to 26.4% from 24.8% in the preceding quarter. The quarter-over-quarter increase reflects an increase in the Company's projected annual pretax income compared with previous estimates, combined with the benefit of affordable housing partnership investment tax credits having a smaller effect on the larger annual pretax income. In the year-ago quarter, the effective tax rate was 23.3%.

Balance Sheet Summary

New loan originations funded during the 2021 third quarter increased to a record high $1.01 billion from $894.1 million in the preceding second quarter and $782.4 million in the 2020 third quarter. Following are the components of new loan production for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	For the Three Months Ended
	9/30/2021		6/30/2021		9/30/2020
Commercial real estate	$	488,969	$	454,857	$	215,099
Commercial		329,702		288,726		429,136
SBA		115,023		77,652		33,262
SBA PPP		—		19,816		26
Residential mortgage		75,007		52,766		102,312
Consumer		500		275		2,607
Total new loan originations	$	1,009,201	$	894,092	$	782,442

During the 2021 third quarter, the Company also acquired $113.9 million of 30-year adjustable-rate residential mortgage loans. New loan production and loan purchases during the 2021 third quarter were offset by a number of factors. In addition to the sale of $40.2 million in residential mortgage loans and $31.3 million of SBA 7(a) loans during the 2021 third quarter, the Company completed loan sales of $29.6 million and transferred $131.2 million to loans held-for-sale, de-risking the loan portfolio of potentially problematic assets. Altogether with aggregate payoffs and pay downs, which included SBA PPP loan forgiveness of $235.6 million and a $61.4 million quarter-over-quarter decrease in warehouse line utilizations, loans receivable at September 30, 2021 was flat at $13.42 billion versus $13.42 billion at June 30, 2021. Excluding SBA PPP loan forgiveness and loan sales and transfers of potentially problematic assets to held-for-sale, loans receivable at September 30, 2021 would have increased by approximately $401.7 million, or 3.0% quarter-over-quarter. Loans receivable a year ago at September 30, 2020 totaled $13.12 billion.

During the 2021 third quarter, the Company deployed a portion of its excess cash balances and purchased $571.3 million of investment securities. Securities available for sale totaled $2.67 billion at September 30, 2021, up 17% from $2.27 billion at June 30, 2021.

Total deposits at September 30, 2021 increased 2% to $15.06 billion from $14.73 billion at June 30, 2021 and increased 8% from $14.01 billion at September 30, 2020. Quarter-over-quarter, noninterest bearing demand deposits as of September 30, 2021 increased 7% and money market and other interest bearing demand deposit balances increased 1%, while time deposits decreased 4%. On a year-over-year basis, noninterest bearing demand deposits as of September 30, 2021 increased 34% and money market and NOW account balances increased 23%, while time deposits decreased 35%.

Following is the deposit composition as of September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	9/30/2021		6/30/2021		% change		9/30/2020		% change
Noninterest bearing demand deposits	$	6,007,586	$	5,638,115	7	%	$	4,488,529	34	%
Money market and other	5,871,567		5,786,697		1	%	4,763,893		23	%
Saving deposits	314,603		308,651		2	%	308,943		2	%
Time deposits	2,868,771		2,992,767		(4	)%	4,446,991		(35	)%
Total deposit balances	$	15,062,527	$	14,726,230	2	%	$	14,008,356	8	%

Following is the deposit composition as a percentage of total deposits and a breakdown of cost of deposits as of and for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020:

	Deposit Breakdown						Cost of Deposits
(unaudited)	9/30/2021		6/30/2021		9/30/2020		Q3 2021		Q2 2021		Q3 2020
Noninterest bearing demand deposits	39.9	%	38.3	%	32.1	%	—	%	—	%	—	%
Money market and other	39.0	%	39.2	%	34.0	%	0.40	%	0.43	%	0.53	%
Saving deposits	2.1	%	2.1	%	2.2	%	1.18	%	1.15	%	1.19	%
Time deposits	19.0	%	20.4	%	31.7	%	0.38	%	0.49	%	1.30	%
Total deposit balances	100.0	%	100.0	%	100.0	%	0.26	%	0.30	%	0.64	%

Allowance for Credit Losses

In the 2021 third quarter, the Company recorded a negative provision for credit losses of $10.0 million, compared with a negative provision for credit losses of $7.0 million in the preceding second quarter. In the year-ago third quarter, the Company recorded a provision for credit losses of $22.0 million. The allowance release in the 2021 third quarter reflects improvements in macroeconomic forecasts and the Company's asset quality.

Following is the allowance for credit losses and allowance coverage ratios as of September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	9/30/2021			6/30/2021			9/30/2020
Allowance for credit losses	$	136,774		$	189,452		$	179,849
Allowance for credit loss/loans receivable		1.02	%		1.41	%		1.37	%
Allowance for credit losses/nonperforming loans		138.92	%		113.36	%		169.40	%

Credit Quality

Following are the components of nonperforming assets as of September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	9/30/2021		6/30/2021		9/30/2020
Loans on nonaccrual status ⁽¹⁾	$	54,380	$	111,008	$	69,205
Delinquent loans 90 days or more on accrual status		4,567		4,759		1,537
Accruing troubled debt restructured loans		39,509		51,360		35,429
Total nonperforming loans		98,456		167,127		106,171
Other real estate owned		15,213		16,619		18,410
Total nonperforming assets	$	113,669	$	183,746	$	124,581

⁽¹⁾	Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $20.6 million, $23.6 million and $26.2 million, at September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

The significant reductions in nonperforming loans quarter-over-quarter were due to a number of factors, including strategic loan sales and transfers to held-for sale of potentially problematic loans. The loans transferred to held-for-sale are expected to be sold during the fourth quarter of 2021. In addition, one large relationship that was moved to nonaccrual status in the first quarter of 2021 was charged off, and another large relationship on nonaccrual status was paid off in full.

Following are net charge offs and net charge offs to average loans receivable on an annualized basis for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	For the Three Months Ended
	9/30/2021			6/30/2021			9/30/2020
Net charge offs	$	42,678		$	11,491		$	3,922
Net charge offs/average loans receivable (annualized)		1.28	%		0.35	%		0.12	%

Net charge offs for the 2021 third quarter increased significantly from prior periods. This reflects decisive actions by the Company to eliminate potentially problematic assets from its loan portfolio and included charge offs related to the one large relationship that was moved to nonaccrual status in the first quarter of 2021, along with loan sales and transfers to held-for-sale.

Following are the components of criticized loan balances as of September 30, 2021, June 30, 2021 and September 30, 2020:

(dollars in thousands) (unaudited)	9/30/2021		6/30/2021		9/30/2020
Special mention	$	306,766	$	294,559	$	153,388
Substandard		243,684		380,955		311,902
Doubtful/loss		—		—		6,640
Total criticized loans	$	550,450	$	675,514	$	471,930

The significant reductions in total criticized loans quarter-over-quarter was due primarily to the strategic loan sales and transfers to held-for-sale, along with charge offs. As previously noted, loan sales totaled $29.6 million and transfers to held-for-sale amounted to $131.2 million, most of which were classified as substandard.

Capital

At September 30, 2021, the Company and the Bank continued to exceed all regulatory capital requirements generally required to meet the definition of a "well-capitalized" financial institution. Following are capital ratios for the Company as of September 30, 2021, June 30, 2021 and September 30, 2020:

Hope Bancorp, Inc. (unaudited)	9/30/2021	6/30/2021	9/30/2020	Minimum Guideline for "Well-Capitalized" Bank
Common Equity Tier 1 Capital	11.01%	11.44%	11.36%	6.50%
Tier 1 Leverage Ratio	9.98%	10.43%	10.02%	5.00%
Tier 1 Risk-Based Ratio	11.70%	12.14%	12.09%	8.00%
Total Risk-Based Ratio	12.42%	13.16%	13.19%	10.00%

Following are tangible common equity ("TCE") per share and TCE as a percentage of tangible assets as of September 30, 2021, June 30, 2021 and September 30, 2020:

(unaudited)	9/30/2021	6/30/2021	9/30/2020
Tangible common equity per share ⁽¹⁾	$13.33	$13.10	$12.70
Tangible common equity to tangible assets ⁽²⁾	9.24%	9.53%	9.63%

⁽¹⁾

Tangible common equity represents common equity less goodwill and net other intangible assets. Tangible common equity per share represents tangible common equity divided by the number of shares issued and outstanding. Both tangible common equity and tangible common equity per share are non-GAAP financial measures. A reconciliation of the Company's total stockholders' equity to tangible common equity is provided in the accompanying financial information on Table Page 10.

⁽²⁾

Tangible assets represent total assets less goodwill and net other intangible assets. Tangible common equity to tangible assets is the ratio of tangible common equity over tangible assets. Tangible common equity to tangible assets is a non-GAAP financial measure. A reconciliation of the Company's total assets to tangible assets is provided in the accompanying financial information on Table Page 10.

Investor Conference Call

The Company previously announced that it will host an investor conference call on Tuesday, October 26, 2021 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for its third quarter ended September 30, 2021. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international) and asking for the "Hope Bancorp Call." A presentation to accompany the earnings call will be available at the Investor Relations section of Hope Bancorp's website at www.ir-hopebancorp.com. Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of Hope Bancorp's website. After the live webcast, a replay will remain available at the Investor Relations section of Hope Bancorp's website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) for one week through November 2, 2021, replay access code 10161142.

About Hope Bancorp, Inc.

Hope Bancorp, Inc. is the holding company of Bank of Hope, the first and only super regional Korean-American bank in the United States with $17.80 billion in total assets as of September 30, 2021. Headquartered in Los Angeles and serving a multi-ethnic population of customers across the nation, Bank of Hope operates 53 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia and Alabama. The Bank also operates SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California and Houston; commercial loan production offices in Northern California and Seattle; residential mortgage loan production offices in Southern California; and a representative office in Seoul, Korea. Bank of Hope specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender. For additional information, please go to bankofhope.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained or accessible therein.

Forward-Looking Statements

Some statements in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "intends," "plans," "estimates" or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. The Company's actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include, but are not limited to: possible deterioration in economic conditions in our areas of operation; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company's allowances for credit losses, regulatory risks associated with current and future regulations; and the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization. For additional information concerning these and other risk factors, see the Company's most recent Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.


Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)

Assets:	9/30/2021			6/30/2021			% change		9/30/2020			% change
Cash and due from banks	$	627,352		$	836,957		(25	)%	$	629,133		—	%
Securities available for sale, at fair value	2,669,489			2,274,170			17	%	2,060,991			30	%
Federal Home Loan Bank ("FHLB") stock and other investments	88,102			94,550			(7	)%	97,305			(9	)%
Loans held for sale, at the lower of cost or fair value	179,117			54,245			230	%	9,170			1,853	%
Loans receivable	13,418,691			13,424,301			—	%	13,120,225			2	%
Allowance for credit losses	(136,774		)	(189,452		)	(28	)%	(179,849		)	(24	)%
Net loans receivable	13,281,917			13,234,849			—	%	12,940,376			3	%
Accrued interest receivable	47,102			51,886			(9	)%	57,989			(19	)%
Premises and equipment, net	45,307			45,302			—	%	49,552			(9	)%
Bank owned life insurance	76,756			76,428			—	%	77,388			(1	)%
Goodwill	464,450			464,450			—	%	464,450			—	%
Servicing assets	10,787			11,566			(7	)%	13,718			(21	)%
Other intangible assets, net	8,180			8,689			(6	)%	10,239			(20	)%
Other assets	300,467			316,535			(5	)%	323,456			(7	)%
Total assets	$	17,799,026		$	17,469,627		2	%	$	16,733,767		6	%

Liabilities:
Deposits	$	15,062,527		$	14,726,230		2	%	$	14,008,356		8	%
FHLB advances	200,000			200,000			—	%	200,000			—	%
Convertible notes, net	215,974			215,739			—	%	203,270			6	%
Subordinated debentures	105,057			104,762			—	%	103,889			1	%
Accrued interest payable	5,367			4,946			9	%	21,991			(76	)%
Other liabilities	135,703			125,080			8	%	155,700			(13	)%
Total liabilities	$	15,724,628		$	15,376,757		2	%	$	14,693,206		7	%

Stockholders' Equity:
Common stock, $0.001 par value	$	136		$	136		—	%	$	136		—	%
Capital surplus	1,420,151			1,418,135			—	%	1,432,773			(1	)%
Retained earnings	897,766			859,548			4	%	774,970			16	%
Treasury stock, at cost	(247,198		)	(200,000		)	(24	)%	(200,000		)	24	%
Accumulated other comprehensive gain, net	3,543			15,051			(76	)%	32,682			(89	)%
Total stockholders' equity	2,074,398			2,092,870			(1	)%	2,040,561			2	%
Total liabilities and stockholders' equity	$	17,799,026		$	17,469,627		2	%	$	16,733,767		6	%

Common stock shares - authorized	150,000,000			150,000,000					150,000,000
Common stock shares - outstanding	120,198,061			123,673,832					123,260,760
Treasury stock shares	16,149,007			12,661,581					12,661,581


Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)

	Three Months Ended										Nine Months Ended
	9/30/2021		6/30/2021		% change		9/30/2020		% change		9/30/2021		9/30/2020		% change

Interest and fees on loans	$	132,794	$	131,823	1	%	$	134,430	(1)	%	$	394,353	$	422,850	(7)	%
Interest on securities	9,207		7,713		19	%	9,848		(7)	%	24,835		30,348		(18)	%
Interest on federal funds sold and other investments	865		668		29	%	942		(8)	%	2,175		3,951		(45)	%
Total interest income	142,866		140,204		2	%	145,220		(2)	%	421,363		457,149		(8)	%

Interest on deposits	9,640		10,696		(10)	%	22,871		(58)	%	33,106		93,435		(65)	%
Interest on other borrowings and convertible notes	2,930		2,931		—	%	4,712		(38)	%	8,805		16,972		(48)	%
Total interest expense	12,570		13,627		(8)	%	27,583		(54)	%	41,911		110,407		(62)	%

Net interest income before provision (credit) for credit losses	130,296		126,577		3	%	117,637		11	%	379,452		346,742		9	%
Provision (credit) for credit losses	(10,000)		(7,000)		43	%	22,000		N/A		(13,700)		67,500		N/A
Net interest income after provision (credit) for credit losses	140,296		133,577		5	%	95,637		47	%	393,152		279,242		41	%

Service fees on deposit accounts	1,814		1,777		2	%	2,736		(34)	%	5,381		9,452		(43)	%
International service fees	889		795		12	%	987		(10)	%	2,525		2,443		3	%
Loan servicing fees, net	642		934		(31)	%	772		(17)	%	2,620		2,243		17	%
Wire transfer fees	836		923		(9)	%	892		(6)	%	2,603		2,710		(4)	%
Net gains on sales of SBA loans	2,459		2,375		4	%	—		100	%	4,834		—		100	%
Net gains on sales of residential mortgage loans	781		1,028		(24)	%	2,853		(73)	%	3,905		6,386		(39)	%
Net gains on sales of securities available for sale	—		—		—	%	7,531		(100)	%	—		7,531		(100)	%
Other income and fees	3,196		3,244		(1)	%	1,742		83	%	8,629		11,252		(23)	%
Total noninterest income	10,617		11,076		(4)	%	17,513		(39)	%	30,497		42,017		(27)	%

Salaries and employee benefits	47,018		42,309		11	%	40,659		16	%	130,543		122,011		7	%
Occupancy	7,473		7,067		6	%	7,264		3	%	21,507		21,717		(1)	%
Furniture and equipment	4,429		4,822		(8)	%	4,513		(2)	%	13,437		13,426		—	%
Advertising and marketing	2,656		2,097		27	%	1,601		66	%	6,378		4,589		39	%
Data processing and communications	2,394		2,411		(1)	%	2,204		9	%	7,542		7,109		6	%
Professional fees	2,431		4,395		(45)	%	1,513		61	%	9,729		6,323		54	%
FDIC assessment	1,204		1,284		(6)	%	1,167		3	%	3,743		4,378		(15)	%
Credit related expenses	1,266		43		2,844	%	1,793		(29)	%	3,527		4,816		(27)	%
OREO expense, net	248		298		(17)	%	1,770		(86)	%	827		3,951		(79)	%
Software impairment	—		2,146		(100)	%	—		—	%	2,146		—		100	%
FHLB advance prepayment fee	—		—		—	%	3,584		(100)	%	—		3,584		(100)	%
Other	6,383		6,251		2	%	7,338		(13)	%	19,677		20,672		(5)	%
Total noninterest expense	75,502		73,123		3	%	73,406		3	%	219,056		212,576		3	%
Income before income taxes	75,411		71,530		5	%	39,744		90	%	204,593		108,683		88	%
Income tax provision	19,912		17,767		12	%	9,254		115	%	51,644		25,487		103	%
Net income	$	55,499	$	53,763	3	%	$	30,490	82	%	$	152,949	$	83,196	84	%

Earnings Per Common Share - Basic	$	0.45	$	0.44			$	0.25			$	1.24	$	0.67
Earnings Per Common Share - Diluted	$	0.45	$	0.43			$	0.25			$	1.23	$	0.67

Weighted Average Shares Outstanding - Basic	122,244,948		123,592,695				123,251,336				123,050,174		123,581,055
Weighted Average Shares Outstanding - Diluted	122,908,536		124,323,888				123,536,765				123,848,512		123,895,084

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)

	For the Three Months Ended (Annualized)						For the Nine Months Ended (Annualized)
Profitability measures:	9/30/2021		6/30/2021		9/30/2020		9/30/2021		9/30/2020
ROA	1.25	%	1.25	%	0.72	%	1.18	%	0.68	%
ROE	10.61	%	10.41	%	5.98	%	9.86	%	5.47	%
ROTCE ⁽¹⁾	13.71	%	13.50	%	7.80	%	12.78	%	7.14	%
Net interest margin	3.07	%	3.11	%	2.91	%	3.08	%	2.99	%
Efficiency ratio	53.58	%	53.12	%	54.31	%	53.43	%	54.68	%
Noninterest expense / average assets	1.70	%	1.70	%	1.73	%	1.68	%	1.73	%

⁽¹⁾

Average tangible equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders' equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position.

	Three Months Ended									Nine Months Ended
Pre-tax acquisition accounting adjustments:	9/30/2021			6/30/2021			9/30/2020			9/30/2021			9/30/2020
Accretion on acquired non-impaired loans	$	368		$	366		$	747		$	1,439		$	2,464
Accretion on acquired credit deteriorated/purchased credit impaired loans	2,093			2,188			4,584			6,536			17,079
Amortization of premium on low income housing tax credits	(73		)	(74		)	(71		)	(220		)	(212		)
Accretion of discount on acquired subordinated debt	(295		)	(293		)	(287		)	(879		)	(854		)
Amortization of core deposit intangibles	(509		)	(510		)	(531		)	(1,528		)	(1,594		)
Total acquisition accounting adjustments	$	1,584		$	1,677		$	4,442		$	5,348		$	16,883

Hope Bancorp, Inc. Selected Financial Data Unaudited (dollars in thousands, except share and per share data)

	Three Months Ended
	9/30/2021						6/30/2021						9/30/2020
			Interest		Annualized				Interest		Annualized				Interest		Annualized
	Average		Income/		Average		Average		Income/		Average		Average		Income/		Average
	Balance		Expense		Yield/Cost		Balance		Expense		Yield/Cost		Balance		Expense		Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale	$	13,286,382	$	132,794	3.97	%	$	13,293,591	$	131,823	3.98	%	$	12,728,558	$	134,430	4.20	%
Securities available for sale	2,370,672		9,207		1.54	%	2,253,135		7,713		1.37	%	2,010,907		9,848		1.95	%
FHLB stock and other investments	1,197,537		865		0.29	%	759,182		668		0.35	%	1,342,641		942		0.28	%
Total interest earning assets	$	16,854,591	$	142,866	3.36	%	$	16,305,908	$	140,204	3.45	%	$	16,082,106	$	145,220	3.59	%

INTEREST BEARING LIABILITIES:
Deposits:
Demand, interest bearing	$	5,919,225	$	5,946	0.40	%	$	5,484,047	$	5,909	0.43	%	$	4,895,101	$	6,546	0.53	%
Savings	310,525		920		1.18	%	308,530		887		1.15	%	302,882		907		1.19	%
Time deposits	2,914,977		2,774		0.38	%	3,222,457		3,900		0.49	%	4,703,640		15,418		1.30	%
Total interest bearing deposits	9,144,727		9,640		0.42	%	9,015,034		10,696		0.48	%	9,901,623		22,871		0.92	%
FHLB advances	200,000		640		1.27	%	202,198		631		1.25	%	353,587		1,323		1.49	%
Convertible notes, net	215,840		1,321		2.39	%	215,599		1,323		2.43	%	202,470		2,370		4.58	%
Subordinated debentures	100,993		969		3.75	%	100,701		977		3.84	%	99,819		1,019		3.99	%
Total interest bearing liabilities	$	9,661,560	$	12,570	0.52	%	$	9,533,532	$	13,627	0.57	%	$	10,557,499	$	27,583	1.04	%
Noninterest bearing demand deposits	5,848,983						5,445,457						4,239,108
Total funding liabilities/cost of funds	$	15,510,543			0.32	%	$	14,978,989			0.36	%	$	14,796,607			0.74	%
Net interest income/net interest spread			$	130,296	2.84	%			$	126,577	2.88	%			$	117,637	2.55	%
Net interest margin					3.07	%					3.11	%					2.91	%

Cost of deposits:
Noninterest bearing demand deposits	$	5,848,983	$	—	—	%	$	5,445,457	$	—	—	%	$	4,239,108	$	—	—	%
Interest bearing deposits	9,144,727		9,640		0.42	%	9,015,034		10,696		0.48	%	9,901,623		22,871		0.92	%
Total deposits	$	14,993,710	$	9,640	0.26	%	$	14,460,491	$	10,696	0.30	%	$	14,140,731	$	22,871	0.64	%


	Nine Months Ended
	9/30/2021						9/30/2020
			Interest		Annualized				Interest		Annualized
	Average		Income/		Average		Average		Income/		Average
	Balance		Expense		Yield/Cost		Balance		Expense		Yield/Cost
INTEREST EARNING ASSETS:
Loans, including loans held for sale	$	13,308,526	$	394,353	3.96	%	$	12,581,703	$	422,850	4.49	%
Securities available for sale	2,297,450		24,835		1.45	%	1,825,046		30,348		2.22	%
FHLB stock and other investments	867,745		2,175		0.34	%	1,060,699		3,951		0.50	%
Total interest earning assets	$	16,473,721	$	421,363	3.42	%	$	15,467,448	$	457,149	3.95	%

INTEREST BEARING LIABILITIES:
Deposits:
Demand, interest bearing	$	5,555,711	$	17,345	0.42	%	$	4,668,594	$	28,988	0.83	%
Savings	306,780		2,678		1.17	%	287,060		2,578		1.20	%
Time deposits	3,298,393		13,083		0.53	%	4,852,286		61,869		1.70	%
Total interest bearing deposits	9,160,884		33,106		0.48	%	9,807,940		93,435		1.27	%
FHLB advances	205,971		1,913		1.24	%	513,376		6,208		1.62	%
Convertible notes, net	215,483		3,967		2.43	%	201,204		7,074		4.62	%
Subordinated debentures	100,697		2,925		3.83	%	99,536		3,690		4.87	%
Total interest bearing liabilities	$	9,683,035	$	41,911	0.58	%	$

Hope Bancorp Reports 2021 Third Quarter Financial Results