Hope Bancorp : First Quarter 2024 Earnings Conference Presentation

2024

First Quarter

Earnings Conference Call

April 29, 2024

Forward Looking Statements & Additional Disclosures

This presentation contains statements regarding future events or the future financial performance of Hope Bancorp, Inc. ("Company") and its proposed merger with Territorial Bancorp Inc. ("Territorial") that 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, low-cost core deposit base, diversification of the loan portfolio, expansion of market share, percentage earnings per share growth, capital to support growth, and statements about the proposed transaction being immediately accretive. Additionally, the forward-looking statements also relate to, among other things, expectations regarding the business and economic environment in which we operate, projections of future performance and financial outlook, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision and statements regarding our strategic reorganization. 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," "targets," or similar expressions. With respect to any such forward-looking statements, the Company and Territorial

each 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. Upon completion of the merger, the combined 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 closing of the proposed transaction is subject to regulatory approvals, the approval of the shareholders of Territorial, and other customary closing conditions. There is no assurance that such conditions will be met or that the proposed merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating the Company and Territorial and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further 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, and regulatory risks associated with current and future regulations. 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.

Additional Information and Where to Find It

In connection with the proposed merger, Hope Bancorp, Inc. will file with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4, which will include a Proxy Statement of Territorial Bancorp Inc., that also constitutes a prospectus of Hope Bancorp, Inc. Territorial Bancorp shareholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed merger. Territorial Bancorp shareholders will be able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC's Internet site (www.sec.gov). Territorial Bancorp shareholders will also be able to obtain these documents, free of charge, from Territorial Bancorp at https://www.tsbhawaii.bank/tsb/investor-relations/.

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Q1 2024 Financial Overview

Total Capital & TCE Ratio

at 3/31/24

14.19%/9.33%

Total Deposits at 3/31/24

$14.8B

Gross Loans at 3/31/24

$13.7B

NPA/Total Assets at 3/31/24

0.59%

1Q24 Net Income & EPS

$25.9MM / $0.21

Excl. notable items

$27.4MM /$0.23

Strong Capital & Liquidity

• Total capital ratio was 14.19% at 3/31/24, +27bps QoQ. All regulatory capital ratios expanded QoQ
• Tangible common equity ("TCE") ratio(1) was 9.33% at 3/31/24, +47bps QoQ
• Announced signing of definitive merger agreement with Territorial Bancorp Inc. (Nasdaq: TBNK) on 4/29/24

Deposits

• Deposits of $14.8B at 3/31/24, stable QoQ
• All business lines exceeded deposit growth targets for 1Q24
• Growth in customer deposits offset a planned reduction of brokered time deposits (-$183MM QoQ)

Loans

• Loans receivable of $13.7B at 3/31/24 (-1% QoQ)
• Growth in SBA and residential mortgage, decrease in commercial and CRE loans
• Gross loan-to-deposit ratio of 93% at 3/31/24

Asset Quality

• 1Q24 net charge offs of $3.5MM, equivalent to 0.10% of average loans annualized

Earnings

• 1Q24 net income: $25.9MM (-2% QoQ), or $0.21 per diluted share
• 1Q24 net income excl. notable items1: $27.4MM, or $0.231 per diluted share
• 1Q24 notable items: merger-related expenses ($752K after tax), FDIC special assessment ($721K after tax) and restructuring-related charges ($103K after tax)

(1) TCE ratio, net income excluding notable items and earnings per share excluding notable items are non-GAAP financial measures. Quantitative	3
reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.

Territorial Bancorp (TBNK) Pending Merger Highlights

Nasdaq: HOPE

Nasdaq: TBNK

Strategically

Compelling

Financially Attractive

Culturally

Aligned

• Creates the largest U.S. regional bank catering to multi-ethnic customers across the continental United States and the Hawaiian Islands
• TBNK bolsters Combined Company's core funding base with $1.6 billion in low-cost deposits as of 12/31/23
• Accelerates diversification of Combined Company's loan portfolio by more than doubling HOPE's residential mortgage balances
• Market share growth opportunities by leveraging larger balance sheet, more resources, enhanced technology and broader array of banking products & services for enhanced customer experience
• Merger consideration of $78.6 million, or $8.82 per TBNK share(1)
• Fixed exchange ratio: 0.8048 HOPE shares per TBNK share in an all-stock transaction
• Expected to be immediately accretive after the close with double-digit percentage EPS growth. Targeting deal close by year-end 2024
• Strong capital to support growth of the Combined Company
• Shared corporate values that preserve and build on TBNK's 100+ year legacy of providing personalized customer service and supporting local communities
• To ensure continuity for customers and employees after the close, legacy TBNK will do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope
• Continued dedication to and investment in the Hawai'i communities

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1. Based on HOPE closing price of $10.96 as of 4/26/24

Strong Capital Ratios

Common Equity Tier 1 Capital Ratio

Well

Capitalized

6.50%

Total Capital Ratio

Well

Capitalized

10.00%

Tangible Common Equity Ratio(1)

Leverage Ratio

Well

Capitalized

5.00%

• All capital ratios increased QoQ: All regulatory capital ratios meaningfully above requirements for "well-capitalized"financial institutions
• Pro Forma capital very strong: Adjustments for the allowance for credit losses ("ACL") and hypothetical adjustments for investment security marks not otherwise already reflected in equity, still result in very strong capital ratios
• Dividend: Quarterly common stock dividend of $0.14 per share, equivalent to $0.56 per share annualized. Equivalent to a dividend yield of 4.87% at 3/31/24

•	ref
No stock buybacks during 1Q24

• Equity: Book value per common share of $17.51 & TCE per share1 of $13.63 at 3/31/24. Equity stable QoQ, reflecting growth in retained earnings offset by a negative change in accumulated other comprehensive income
  ("AOCI").

1. TCE ratio and TCE per share are non-GAAP financial measures. Quantitative reconciliations of the most directly comparable GAAP to non-GAAP financial measures are provided in the Appendix of this presentation.

• Pro Forma ratios at 3/31/24 are non-GAAP financial measures and reflect (a) inclusion of on- and off-balance sheet ACL not already in capital; (b) treatment of held-to-maturity ("HTM") securities as if they were available- for-sale ("AFS"), with unrealized losses in AOCI; and (c) removal of the AOCI opt-out in calculating regulatory capital.

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Diverse & Granular Deposit Base

Deposit Composition by Product Type

Noninterest Bearing

Demand Deposits

25%

Time Deposits

Deposit Composition by Customer Type

Consumer

38%

39%

$14.8B

$14.8B

Total Deposits

(at 3/31/24)

Money Market,

Interest Bearing

Demand & Savings

36%

Total Deposits

(at 3/31/24)

Commercial

• Wholesale 62%

• Total deposits of $14.8B at 3/31/24, stable QoQ
• Customer deposit growth across all business lines offset planned reduction of brokered time deposits

• Average commercial & wholesale deposit account size: approx. $265,000
• Average consumer deposit account size: approx. $50,000

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Well-Balanced Loan Portfolio

$0.9B

Avg Size: $0.6MM

$4.1B

Avg Size: $1.5MM

C&I

29%

$2.9B

Avg Size: $1.5MM

Residential
Mortgage	Multifamily
& Other	Residential

7% 9%

$13.7B

Loans Receivable

(at 3/31/24)

Owner-Occupied CRE

21%

$1.2B

Avg Size: $2.3MM

Nonowner-

Occupied CRE

34%

$4.6B

Avg Size: $2.3MM

• Loan portfolio well-diversified across major loan types of nonowner- occupied CRE, C&I, owner-occupied
  CRE, multifamily residential ("MFR"), and residential mortgage
• Total loans receivable: $13.7B at 3/31/24, -1% QoQ
• 1Q24: growth in SBA and residential mortgage loans, offset by decreases in commercial and CRE loans

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Diversified CRE Portfolio with Low LTVs

Total CRE: Distribution by LTV (excl. SBA)

As a % of

Total Loans:

12%

9%

9%

7%

6%

6%

5%

3%

7%

$8.7B

CRE Portfolio

(at 3/31/24)

Multi-tenant Retail

$1,666MM

Industrial & Warehouse

$1,222MM

Multifamily

$1,213MM

Gas Station & Car Wash

$1,014MM

Mixed Use

$862MM

Hotel/Motel

$786MM

Single-tenant Retail

$668MM

Office

$401MM

All Other

$876MM

Avg Loan Size:

Weighted Avg LTV(1):

$2.3MM

43.1%

$2.3MM

41.0%

$2.3MM

58.6%

$1.7MM 48.2%

$2.0MM

42.1%

$2.1MM

45.5%

$1.4MM

47.1%

$2.1MM

51.9%

$1.5MM

37.5%

> 55% -	> 60% -	> 65% - 70%:
60%:	65%:
5%
11%	7%

> 50% - 55%:	$8.7B	> 70%:
8%
13%

CRE Portfolio

(at 3/31/24)

46%

Weighted Avg

LTV(1)

< 50%:

56%

• 1. Weighted average loan-to-value("LTV"): Current loan balance divided by updated collateral value. Collateral value updates most recent available appraisal by using CoStar market and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent/sq foot.
• Total CRE loans of $8.7B at 3/31/24, -1% QoQ. Portfolio consists of $4.6B of nonowner-occupied CRE, $2.9B of owner-occupied CRE, and $1.2B of MFR
• CRE Office: Represented less than 3% of total loans at 3/31/24, with no central business district exposure

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Granular CRE Portfolio, Diversified by Submarket

CRE Portfolio by Size Segment

CRE Portfolio by Geographic Submarket

Loan Size	Balance	# of	Average	Weighted
Loan Size
(at 3/31/24)	($ Millions)	Loans	Average LTV(1)
($ Millions)
> $30MM	$ 290	7	$ 41.5	62.5%
$20MM - $30MM	$ 637	26	$ 24.5	43.1%
$10MM - $20MM	$ 1,230	89	$ 13.8	48.5%
$5MM - $10MM	$ 1,682	249	$ 6.8	48.6%
$2MM - $5MM	$ 2,508	809	$ 3.1	46.0%
< $2MM	$ 2,361	3,250	$ 0.7	40.8%
Total CRE Portfolio	$ 8,708	4,430	$ 2.0	45.9%

1. Weighted average LTV: Current loan balance divided by updated collateral value. Collateral value updates most recent available appraisal by using CoStar market and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent/sq foot.

• Loan-to-valueratios are consistently low across segments by size and by property type
• Vast majority of CRE loans have full recourse and personal guarantees
• 98.2% of total CRE portfolio was pass-graded at 3/31/24

Other States

Illinois

Washington

Texas

New Jersey

Other New

York $319

Kings County

Queens County

Manhattan

Other NorCal

Greater SF Bay Area

San Francisco, $40

($ Millions)

LA Fashion District

Gateway Cities

San Gabriel Valley

South Bay

LA Koreatown

$8.7B

CRE Portfolio	Other LA County
(at 3/31/24)	(No exposure to

downtown commercial

business district)

Orange County

San Bernardino County

Riverside County

Other SoCal

SoCal

NorCal

NY/NJ

Texas

Washington

Illinois

Other States

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Net Interest Income & Net Interest Margin

Net Interest Income & Net Interest Margin

($ Millions)

QoQ change

$134			$131		$135
											$126
		-2%	+4%						-7%			$115
																			-9%
3.02%
						2.83%
		2.70%		2.70%
						2.55%
1Q23	2Q23	3Q23			4Q23		1Q24
					Net Interest Income							Net Interest Margin (annualized)

QoQ Change in Net Interest Margin

2.70%	+2bps	+2bps	+1bps	-2bps	-6bps	-12bps
	Decrease	Decrease	Loan yield	Decrease		2.55%
	Decrease
	in avg IB	in avg	expansion	in avg	Increase in
	in avg
	deposits	balance of		interest	cost of IB
		loans
		borrowings		earning	deposits

cash

4Q23		1Q24 NIM change: -15bps QoQ	1Q24
		Increase		Decrease		Total

• 1Q24 net interest income ("NII") of $115MM, -9% QoQ from 4Q23
• Paid off $1.0B Bank Term Funding Program ("BTFP") funding at end of
  1Q24, using interest-earning cash. Paid off remaining $695MM in early April, using interest-earning cash. NII from positive spread earned on BTFP: $3.6MM in 1Q24, $4.0MM in 4Q23
• All else equal, the payoff of the BTFP is expected to be a positive to NIM

• 1Q24 net interest margin ("NIM") of 2.55%, -15bps QoQ
• QoQ decrease in NIM driven by a higher cost of IB deposits and a lower volume of loans and interest earning cash, partially offset by positive impact from a lower volume of interest bearing funding and a higher loan yield

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