[Management View]
Hope Bancorp reported a net income of $31 million for Q3 2025, up 28% YoY. Key strategic priorities included loan growth across major segments, improved asset quality, and investments in talent to support growth.

[Outlook]
The company expects high single-digit loan growth, approximately 10% net interest income growth, and 30% noninterest income growth for the full year 2025. Noninterest expenses are projected to increase by 15% due to acquisition costs and talent investments. The effective tax rate for Q4 2025 is expected to be around 14%.

[Financial Performance]
- Net income: $31 million, up 28% YoY
- Net interest income: $127 million, up 21% YoY
- Net interest margin: 2.89%, up 20 basis points QoQ
- Gross loans: $14.6 billion, up 1.2% QoQ
- Deposits: $15.8 billion, down 1% QoQ
- Criticized loans: $373 million, down 10% QoQ
- Net charge-offs: $5 million, down 57% QoQ
- Noninterest income: Sequential growth in service fees, international banking, foreign exchange, and wire transfer fees
- Noninterest expense: $97 million, up from $92 million in Q2 2025

[Q&A Highlights]
Question 1: Do you have the spot rate on deposits at the end of September and the average margin for the month of September?
Answer: The spot rate on deposits at the end of September was 2.82% for total deposits and 3.62% for interest-bearing deposits. The average margin for the month of September was 2.96%.

Question 2: Any update on the Territorial Bancorp integration and cost savings?
Answer: We are continuing to stabilize and expand operations, with incremental cost savings being recognized. However, there is nothing headline-grabbing to report this quarter.

Question 3: Can you give us the purchase accounting impact this quarter?
Answer: The loan discount accretion was $5 million this quarter, compared to $4 million last quarter. All other purchase accounting impacts were minimal.

Question 4: Could you give us the amount of maturing CDs in the fourth quarter and the rate they are rolling off at?
Answer: $2.3 billion in CDs are maturing in the fourth quarter at an average rate of 4.08%.

Question 5: Can you remind us where you are in the process of frontline hires and their impact on expenses?
Answer: We have been adding new team members throughout the year, focusing on strategic segments like lower middle markets, project finance, structured finance, and entertainment. We have filled key leadership positions and made senior RM hires, with more hiring plans in Q4 2025 and 2026.

Question 6: Does the government shutdown impact revenues from the SBA loan sale business line?
Answer: The government shutdown has halted new SBA loan applications and the secondary market for new SBA 7(a) loan sales. However, there is no impact on loans that have already received SBA approval numbers. We are prepared to submit new applications once operations resume.

Question 7: Can you describe the challenges faced by nonaccrual commercial real estate loans?
Answer: Our NPLs have been relatively flat this quarter. Some CRE loans take time to work out, but we are focused on resolving these issues.

Question 8: How are you thinking about loan growth given the potential for rates to decrease?
Answer: We have a strong pipeline going into Q4 2025, comparable to the beginning of Q3. We expect our loan growth outlook for the rest of the year to be supported by this pipeline.

Question 9: Can you discuss the competitive environment for deposits and your strategy for managing deposit costs?
Answer: We reduced CD pricing with the last Fed funds cut. New CDs are coming on closer to 4% for exceptions and below 4% for non-exceptions. We are optimistic about our ability to manage deposit costs effectively.

[Sentiment Analysis]
Analysts were generally positive, focusing on the company's strong loan growth, improved asset quality, and strategic investments. Management's tone was confident, emphasizing their strategic initiatives and growth prospects.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 | Q3 2024 |
|----------------------------|---------------|---------------|---------------|
| Net Income | $31 million | $24 million | $24 million |
| Net Interest Income | $127 million | $117.6 million| $105 million |
| Net Interest Margin | 2.89% | 2.69% | 2.69% |
| Gross Loans | $14.6 billion | $14.4 billion | $13.9 billion |
| Deposits | $15.8 billion | $15.9 billion | $15.6 billion |
| Criticized Loans | $373 million | $415 million | $415 million |
| Net Charge-Offs | $5 million | $12 million | $12 million |
| Noninterest Income | $3 million | $4 million | $4 million |
| Noninterest Expense | $97 million | $92 million | $92 million |

[Risks and Concerns]
- Potential impact of government shutdown on SBA loan sales
- Challenges in resolving nonaccrual commercial real estate loans
- Competitive environment for deposits and managing deposit costs

[Final Takeaway]
Hope Bancorp demonstrated strong financial performance in Q3 2025, with significant improvements in net income, net interest margin, and asset quality. The company is well-positioned for continued growth, supported by strategic investments in talent and a robust loan pipeline. However, potential risks include the impact of the government shutdown on SBA loan sales and challenges in managing nonaccrual commercial real estate loans. Overall, the outlook remains positive, with expectations for continued growth in key operating metrics.