HOPE BANCORP INC

Shareholders and the Board of Directors of Hope Bancorp, Inc.

Los Angeles, California

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial condition of Hope Bancorp, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance and Provision for Credit Losses – Loans Carried at Amortized Cost

Refer to Notes 1 and 4 to the Consolidated Financial Statements

The Company accounts for credit losses under Financial Accounting Standards Board Accounting Standards Codification No. 326, Financial Instruments – Credit Losses, which requires the Company to estimate expected credit losses for its financial assets carried at amortized cost utilizing the current expected credit loss (“CECL”) methodology.

The allowance for credit losses (“ACL”) under the CECL methodology was a significant estimate recorded within the Company’s financial statements with a reported balance of $158.7 million as of December 31, 2023; $156.0 million, or approximately 98% of the ACL was estimated on a collective basis utilizing reasonable and supportable forecasts, current conditions, and historical loss experience. The Company utilized models to estimate probability of default (“PD”) and loss given default (“LGD”) rates to estimate the estimated loss of its largest loan portfolio segment – commercial real estate (“CRE”) loans. The modeled ACL represented a significant component of this portion of the Company’s ACL estimate.

The principal consideration for our determination that auditing the CRE-modeled component of the ACL estimate is a critical audit matter is due to the level of audit effort required for certain aspects of the modeling process. The Company’s CECL modeling process is multifaceted and involves a significant amount of effort and management judgment, which in turn involved our especially complex and subjective judgment.

A number of management judgments and assumptions are required during the modeling process for CRE loans assessed on a collective basis, such as the selection of economic forecast scenarios to adjust PD and LGD rates. Management’s identification and analysis of these judgments and assumptions requires significant judgment, which in turn involved especially complex and subjective auditor judgment when evaluating such judgments and assumptions.

To address these matters, we tested the design and operating effectiveness of the Company’s controls related to management judgments and assumptions within the modeling process including, but not limited to:

•Management’s model validation, conducted by the Company’s Model Risk Management Department, which includes an evaluation of the reasonableness and sensitivity of significant management judgments and assumptions

•Management’s review of the reasonableness and sensitivity of significant judgments and assumptions

•Management’s review of the directional consistency of judgments and assumptions with modeled or estimate results

Our principal substantive audit procedures related to the management judgments and assumptions included, but were not limited to:

•Evaluation of the sensitivity of significant judgments and assumptions

•Evaluation of the reasonableness of management’s judgments and assumptions within the Company’s ACL methodology and framework

Goodwill Impairment Evaluation

Refer to Notes 1 and 5 to the Consolidated Financial Statements

The Company’s consolidated goodwill balance was $464.5 million at December 31, 2023, which is allocated to the Company’s single reporting unit. The Company tests for impairment at least annually or if an event occurs or circumstances change that indicate that the fair value of the reporting unit may be below its carrying amount (triggering event).

The Company determined that a triggering event occurred and performed a quantitative assessment of goodwill for the Company’s single reporting unit as of June 30 and September 30, 2023, utilizing a discounted cash flow analysis (“income approach”), guideline public company method (“market approach”) and/or combination of both. The Company assessed qualitative factors related to goodwill as of December 31, 2023, and determined a Step 1 fair value assessment was not required. Based on the assessments, the Company determined that goodwill was not impaired at the respective assessment dates. The determination of the fair value of the reporting unit requires significant estimates and subjective assumptions which require a high degree of management judgment.

We identified the June 30 and September 30, 2023, interim quantitative goodwill impairment assessments of the Company as a critical audit matter. The principal considerations for this determination were the degree of audit effort, including specialized skills and knowledge, and auditor judgment in performing procedures over the selection of valuation method(s) and significant assumptions applied in the valuation method(s), such as discount rate, long-term growth rate, capital requirements, and prospective financial information.

To address this matter, we tested the design and effectiveness of the Company’s controls including, but not limited to:

•Management’s review of the reasonableness of the Company’s prospective financial information utilized in the assessment, including the reasonableness of the internally developed forecast from which the prospective financial information was derived.

•Management’s evaluation of significant assumptions, including discount rate, long-term growth rate and capital requirements.

•Management’s evaluation of the selection of valuation method(s) and sensitivity of fair value under alternative methods.

Our principal substantive audit procedures related to this matter included, but were not limited to:

•Evaluation of the reasonableness of the Company’s prospective financial information utilized in the assessment, including the reasonableness of the internally developed forecast from which the prospective financial information was derived.

•Evaluation of the reasonableness of significant assumptions, including discount rate, long-term growth rate and capital requirements. Internal specialists assisted in the evaluation.

•Evaluation of the appropriateness of valuation methodologies and the sensitivity of the fair value when considering alternative methods. Internal specialists assisted in the evaluation.

/s/ Crowe LLP

Crowe LLP

We have served as the Company's auditor since 2017.

Los Angeles, California

February 28, 2024