OP Bancorp Reports Net Income for 2024 Fourth Quarter of $5.0 Million and Diluted Earnings Per Share of $0.33

Rhea-AI Summary

OP Bancorp (OPBK) reported Q4 2024 net income of $5.0 million, or $0.33 per diluted share, compared to $5.4 million ($0.36/share) in Q3 2024. Key financial metrics include:

- Net interest income increased to $16.9 million from $16.5 million in Q3
- Net interest margin slightly improved to 2.96% from 2.95%
- Total assets decreased to $2.37 billion from $2.39 billion
- Gross loans grew to $1.96 billion from $1.93 billion
- Total deposits declined to $2.03 billion from $2.06 billion

Credit quality metrics showed some deterioration with nonperforming loans increasing to 0.40% from 0.19% of gross loans. The bank maintained strong capital levels with a CET1 ratio of 11.35% and increased its book value per share to $13.83. The company paid a quarterly cash dividend of $0.12 per share.

Positive

• Net interest income increased 2.6% quarter-over-quarter to $16.9 million
• Gross loans grew 1.3% to $1.96 billion
• Book value per share increased to $13.83 from $13.75
• Maintained strong capital position with 11.35% CET1 ratio

Negative

• Net income decreased 8.6% quarter-over-quarter to $5.0 million
• Nonperforming loans increased to 0.40% from 0.19% of gross loans
• Total deposits declined 1.8% to $2.03 billion
• Provision for credit losses increased significantly to $1.5 million from $448 thousand

Insights

Financial Analyst

The Q4 2024 results highlight several challenges facing OP Bancorp in the current banking environment. The most concerning development is the significant deterioration in credit quality metrics, with nonperforming loans more than doubling to $7.82 million (0.40% of gross loans) and criticized loans increasing to 1.00%. This prompted a substantial 245.3% increase in provision for credit losses to $1.5 million.

While net interest income showed modest improvement, rising 2.6% QoQ to $16.9 million, the net interest margin remains compressed at 2.96%. The bank's ability to maintain profitability is under pressure, evidenced by the decline in ROA to 0.84% from 0.94% QoQ.

The loan portfolio grew modestly by 1.3% QoQ to $1.96 billion, but the deposit base contracted by 1.8% to $2.03 billion. While the bank remains well-capitalized with a CET1 ratio of 11.35%, this metric has declined from 11.57% in the previous quarter.

The increase in credit costs and asset quality concerns, combined with margin pressure and deposit challenges, suggest potential earnings headwinds in coming quarters. The bank's conservative approach to credit risk management, reflected in the increased loan loss reserves, is prudent but will likely continue to impact near-term profitability.

2024 Fourth Quarter Highlights compared with 2024 Third Quarter:

• Financial Results:
  • Net income of $5.0 million, compared to $5.4 million
  • Diluted earnings per share of $0.33, compared to $0.36
  • Net interest income of $16.9 million, compared to $16.5 million
  • Net interest margin of 2.96%, compared to 2.95%
  • Provision for credit losses of $1.5 million, compared to $448 thousand
  • Total assets of $2.37 billion, compared to $2.39 billion
  • Gross loans of $1.96 billion, compared to $1.93 billion
  • Total deposits of $2.03 billion, compared to $2.06 billion
• Credit Quality:
  • Allowance for credit losses to gross loans of 1.27%, compared to 1.19%
  • Net charge-offs⁽¹⁾ to average gross loans⁽²⁾ of 0.00%, compared to 0.01%
  • Loans past due 30-89 days to gross loans of 0.46%, compared to 0.53%
  • Nonperforming loans to gross loans of 0.40%, compared to 0.19%
  • Criticized loans⁽³⁾ to gross loans of 1.00%, compared to 0.85%
• Capital Levels:
  • Remained well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 11.35%
  • Book value per common share increased to $13.83, compared to $13.75
  • Paid quarterly cash dividend of $0.12 per share for the periods

___________________________________________________________

⁽¹⁾ Annualized.

⁽²⁾ Includes loans held for sale.

⁽³⁾ Includes Special Mention, Substandard, Doubtful, and Loss categories.

LOS ANGELES--(BUSINESS WIRE)-- OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported its financial results for the fourth quarter of 2024. Net income for the fourth quarter of 2024 was $5.0 million, or $0.33 per diluted common share, compared with $5.4 million, or $0.36 per diluted common share, for the third quarter of 2024, and $5.2 million, or $0.34 per diluted common share, for the fourth quarter of 2023.

Min Kim, President and Chief Executive Officer:

“We are continuing to experience the effects of uncertainty in the financial markets providing challenges in increasing customer deposits and lowering costs of deposit,” said Min Kim, President and Chief Executive. “We continue to see slightly elevated levels of classified loans, and we have responded prudently to managing these assets. We are also paying careful attention to those of our customers and employees who have been affected by the unprecedented wildfires in the Los Angeles basin, and we express our deepest condolences to all of those who have lost homes, businesses or jobs, or who have been affected by these disasters. We look forward to opportunities to assist in the recovery of the affected communities.”

SELECTED FINANCIAL HIGHLIGHTS

($ in thousands, except per share data)		As of and For the Quarter												% Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023			3Q2024			4Q2023
Selected Income Statement Data:
Net interest income		$	16,929			$	16,506			$	16,230			2.6	%		4.3	%
Provision for credit losses			1,547				448				630			245.3			145.6
Noninterest income			4,417				4,240				3,680			4.2			20.0
Noninterest expense			13,133				12,720				11,983			3.2			9.6
Income tax expense			1,695				2,142				2,125			(20.9	)		(20.2	)
Net income			4,971				5,436				5,172			(8.6	)		(3.9	)
Diluted earnings per share			0.33				0.36				0.34			(8.3	)		(2.9	)
Selected Balance Sheet Data:
Gross loans		$	1,956,852			$	1,931,007			$	1,765,845			1.3	%		10.8	%
Total deposits			2,027,285				2,064,603				1,807,558			(1.8	)		12.2
Total assets			2,366,013				2,387,980				2,147,730			(0.9	)		10.2
Average loans(1)			1,947,653				1,905,952				1,787,540			2.2			9.0
Average deposits			2,029,855				1,998,633				1,813,411			1.6			11.9
Credit Quality:
Nonperforming loans		$	7,820			$	3,620			$	6,082			116.0	%		28.6	%
Nonperforming loans to gross loans			0.40	%			0.19	%			0.34	%		0.21			0.06
Criticized loans(2) to gross loans			1.00				0.85				0.76			0.15			0.24
Net charge-offs(3) to average gross loans(1)			0.00				0.01				0.04			(0.01	)		(0.04	)
Allowance for credit losses to gross loans			1.27				1.19				1.25			0.08			0.02
Allowance for credit losses to nonperforming loans			317				634				362			(317.00	)		(45.00	)
Financial Ratios:
Return on average assets(3)			0.84	%			0.94	%			0.96	%		(0.10	)%		(0.12	)%
Return on average equity(3)			9.75				10.95				11.18			(1.20	)		(1.43	)
Net interest margin(3)			2.96				2.95				3.12			0.01			(0.16	)
Efficiency ratio(4)			61.52				61.31				60.19			0.21			1.33
Common equity tier 1 capital ratio			11.35				11.57				12.52			(0.22	)		(1.17	)
Leverage ratio			9.27				9.30				9.57			(0.03	)		(0.30	)
Book value per common share		$	13.83			$	13.75			$	12.84			0.6			7.7

(1)	Includes loans held for sale.
(2)	Includes Special Mention, Substandard, Doubtful, and Loss categories.
(3)	Annualized.
(4)	Represents noninterest expense divided by the sum of net interest income and noninterest income.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

($ in thousands)		For the Three Months Ended									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
Interest Income
Interest income		$	35,051		$	35,299		$	31,783		(0.7	)%		10.3	%
Interest expense			18,122			18,793			15,553		(3.6	)		16.5
Net interest income		$	16,929		$	16,506		$	16,230		2.6	%		4.3	%

($ in thousands)		For the Three Months Ended																		Yield Change 4Q2024 vs.
		4Q2024						3Q2024						4Q2023
		Interest and Fees			Yield/Rate(1)			Interest and Fees			Yield/Rate(1)			Interest and Fees			Yield/Rate(1)			3Q2024			4Q2023
Interest-earning Assets:
Loans		$	31,729		6.49	%		$	31,885		6.66	%		$	28,914		6.43	%		(0.17	)%		0.06	%
Total interest-earning assets			35,051		6.12				35,299		6.30				31,783		6.10			(0.18	)		0.02
Interest-bearing Liabilities:
Interest-bearing deposits			17,182		4.60				17,921		4.85				14,127		4.51			(0.25	)		0.09
Total interest-bearing liabilities			18,122		4.58				18,793		4.82				15,553		4.53			(0.24	)		0.05
Ratios:
Net interest income / interest rate spreads			16,929		1.54				16,506		1.48				16,230		1.57			0.06			(0.03	)
Net interest margin					2.96						2.95						3.12			0.01			(0.16	)
Total deposits / cost of deposits			17,182		3.37				17,921		3.57				14,127		3.09			(0.20	)		0.28
Total funding liabilities / cost of funds			18,122		3.41				18,793		3.60				15,553		3.19			(0.19	)		0.22

(1)	Annualized.

($ in thousands)		For the Three Months Ended																					Yield Change 4Q2024 vs.
		4Q2024							3Q2024							4Q2023
		Interest & Fees				Yield(1)			Interest & Fees				Yield(1)			Interest & Fees				Yield(1)			3Q2024			4Q2023
Loan Yield Component:
Contractual interest rate		$	31,406			6.42	%		$	31,182			6.52	%		$	28,596			6.36	%		(0.10	)%		0.06	%
Accretion of SBA loan discount(2)			813			0.17				918			0.19				960			0.21			(0.02	)		(0.04	)
Amortization of net deferred fees			(47	)		(0.01	)			23			—				(67	)		-0.01			(0.01	)		—
Amortization of premium			(363	)		(0.07	)			(487	)		(0.10	)			(423	)		(0.09	)		0.03			0.02
Net interest recognized on nonaccrual loans			(232	)		(0.05	)			(61	)		(0.01	)			(345	)		(0.08	)		(0.04	)		0.03
Prepayment penalty income and other fees(3)			152			0.03				310			0.06				193			0.04			(0.03	)		(0.01	)
Yield on loans		$	31,729			6.49	%		$	31,885			6.66	%		$	28,914			6.43	%		(0.17	)%		0.06	%

(1)	Annualized.
(2)	Includes discount accretion from SBA loan payoffs of $329 thousand, $426 thousand and $413 thousand for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(3)	Includes prepayment penalty income of $45 thousand, $114 thousand and $43 thousand for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, from Commercial Real Estate (“CRE”) loans.

Fourth Quarter 2024 vs. Third Quarter 2024

Net interest income increased $423 thousand, or 2.6%, primarily due to lower interest expense on interest-bearing deposits, partially offset by lower interest income on loans as our deposit costs repriced faster than our loan yields following the Federal Reserve’s rate cuts from September 2024. Net interest margin was 2.96%, an increase of 1 basis point from 2.95%.

• A $739 thousand decrease in interest expense on interest-bearing deposits was primarily due to a 25 basis point decrease in average cost.
• A 156 thousand decrease in interest income on loans was primarily due to a 17 basis point decrease in average yield.

Fourth Quarter 2024 vs. Fourth Quarter 2023

Net interest income increased $699 thousand, or 4.3%, as higher interest income from a $206.4 million, or 10.0%, increase in average earning assets (loans and interest-bearing deposits in other banks) surpassed higher interest expense from a $210.6 million, or 15.5%, increase in average interest-bearing liabilities (deposits and borrowings). Net interest margin, however, decreased 16 basis points to 2.96% from 3.12%, primarily due to a faster increase in average interest-bearing liabilities over average earnings assets and a faster repricing in deposits costs over loan yields.

• A $2.8 million increase in interest income on loans was primarily due to a $160.1 million, or 9.0%, increase in average balance and a 6 basis point increase in average yield.
• A $380 thousand increase in interest income on interest-bearing deposits in other banks was primarily due to a $41.7 million, or 53.1%, increase in average balance.
• A $3.1 million increase in interest expense on interest-bearing deposits was primarily due to a $242.9 million, or 19.5%, increase in average balance and a 9 basis point increase in average cost.
• A $486 thousand decrease in interest expense on borrowings was primarily due to a $32 million, or 27.1%, decrease in average balance and a 44 basis point decrease in average cost.

Provision for Credit Losses

($ in thousands)		For the Three Months Ended
			4Q2024			3Q2024			4Q2023
Provision for credit losses on loans		$	1,859			$	234		$	537
Provision for (reversal of) credit losses on off-balance sheet exposure			(312	)			214			93
Total provision for credit losses		$	1,547			$	448		$	630

Fourth Quarter 2024 vs. Third Quarter 2024

The Company recorded $1.5 million in total provision for credit losses, an increase of $1.1 million, compared with $448 thousand, , reflecting an ongoing period of relatively elevated interest rates and the related impacts on our customers and on the values of the collateral securing our loans. Provision for credit losses on loans increased $1.6 million and provision for credit losses on off-balance sheet exposure decreased $526 thousand.

Provision for credit losses on loans of $1.9 million was due to a $1.5 million increase in qualitative reserves, and a $810 thousand increase in specific reserves, partially offset by a $439 thousand decrease in general reserves.

• The increase in qualitative reserves was primarily due to changes in the Bank’s asset quality metrics and a decrease in CRE value indices.
• The increase in specific reserves was primarily due to two SBA relationships.
• The decrease in general reserves was primarily due to a decrease in average life of home mortgage loans, partially offset by an increase from loan growth.

Reversal of credit losses on off-balance sheet exposure of $312 thousand was primarily due to a change in calculation method for revolving accounts using expected funding amount instead of unfunded commitment amount.

Fourth Quarter 2024 vs. Fourth Quarter 2023

The Company recorded $1.5 million in total provision for credit losses, an increase of $917 thousand, compared with $630 thousand. Provision for credit losses on loans increased $1.3 million and provision for credit losses on off-balance sheet exposure decreased $405 thousand.

Noninterest Income

($ in thousands)		For the Three Months Ended									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
Noninterest Income
Service charges on deposits		$	967		$	889		$	557		8.8	%		73.6	%
Loan servicing fees, net of amortization			858			693			540		23.8			58.9
Gain on sale of loans			2,197			2,088			1,996		5.2			10.1
Other income			395			570			587		(30.7	)		(32.7	)
Total noninterest income		$	4,417		$	4,240		$	3,680		4.2	%		20.0	%

Fourth Quarter 2024 vs. Third Quarter 2024

Noninterest income increased $177 thousand, or 4.2%, primarily due to higher loan servicing fees and gain on sale of loans, partially offset by lower other income.

• Loan servicing fees, net of amortization, were $858 thousand, an increase of $165 thousand from $693 thousand, primarily due to a decrease in servicing fee amortization driven by lower loan payoffs in loan servicing portfolio.
• Gain on sale of loans was $2.2 million, an increase of $109 thousand from $2.1 million, primarily due to a higher average premium on sales. The Bank sold $34.7 million in SBA loans at an average premium rate of 7.82%, compared to the sale of $35.6 million at an average premium rate of 7.30%.
• Other income was $395 thousand, a decrease of $175 thousand from $570 thousand, primarily due to an increase in unrealized loss of CRA-qualified mutual funds driven by market interest rate changes.

Fourth Quarter 2024 vs. Fourth Quarter 2023

Noninterest income increased $737 thousand, or 20.0%, primarily due to higher service charges on deposits, loan servicing fees and gain on sale of loans, offset by lower other income.

• Service charges on deposits were $967 thousand, an increase of $410 thousand from $557 thousand, primarily due to an increase in deposit analysis fees from an increase in the number of analysis accounts.
• Loan servicing fees were $858 thousand, an increase of $318 thousand from $540 thousand, primarily due to a decrease in servicing fee amortization driven by lower loan payoffs in loan servicing portfolio.
• Gain on sale of loans was $2.2 million, an increase of $201 thousand from $2.0 million, primarily due to a higher average premium rate, partially offset by lower sold amount. The Bank sold $34.7 million in SBA loans at an average premium rate of 7.82%, compared to the sale of $40.1 million at an average premium rate of 5.99%.
• Other income was $395 thousand, a decrease of $192 thousand from $587 thousand, primarily due to an increase in unrealized loss of CRA-qualified mutual fund driven by market interest rate changes.

Noninterest Expense

($ in thousands)		For the Three Months Ended									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
Noninterest Expense
Salaries and employee benefits		$	8,277		$	8,031		$	7,646		3.1	%		8.3	%
Occupancy and equipment			1,682			1,676			1,616		0.4			4.1
Data processing and communication			594			634			644		(6.3	)		(7.8	)
Professional fees			388			346			391		12.1			(0.8	)
FDIC insurance and regulatory assessments			529			391			237		35.3			123.2
Promotion and advertising			82			151			86		(45.7	)		(4.7	)
Directors’ fees			151			154			145		(1.9	)		4.1
Foundation donation and other contributions			480			549			524		(12.6	)		(8.4	)
Other expenses			950			788			694		20.6			36.9
Total noninterest expense		$	13,133		$	12,720		$	11,983		3.2	%		9.6	%

Fourth Quarter 2024 vs. Third Quarter 2024

Noninterest expense increased $413 thousand, or 3.2%, primarily due to higher salaries and employee benefits, other expenses, and FDIC insurance and regulatory assessments.

• Salaries and employee benefits increased $246 thousand, primarily due to increases in employee incentive accruals.
• Other expenses increased $162 thousand, primarily due to an increase in customer services expenses related to the increase in the number of analysis accounts.
• FDIC insurance and regulatory assessments increased $138 thousand, primarily due to year end accrual adjustments.

Fourth Quarter 2024 vs. Fourth Quarter 2023

Noninterest expense increased $1.2 million, or 9.6%, primarily due to higher salaries and employee benefits, FDIC insurance and regulatory assessments, and other expenses.

• Salaries and employee benefits increased $631 thousand, primarily due to increases in salaries and employee benefits as our number of employees increased to 231 from 222.
• FDIC insurance and regulatory assessments increased $292 thousand, primarily due to increases in assessment base and rate from our balance sheet growth and increased reliance on brokered deposits.
• Other expenses increased $256 thousand, primarily due to an increase in customer services expenses related to the increase in the number of analysis accounts.

Income Tax Expense

Fourth Quarter 2024 vs. Third Quarter 2024

Income tax expense was $1.7 million, or an effective tax rate of 25.4%, compared to income tax expense of $2.1 million, or an effective tax rate of 28.3%. The decrease in effective tax rate was primarily due to year-end provision adjustments for additional tax benefits from low income housing tax credit fund investments, and adjustments for differences between the prior year tax provision and the final tax returns that were applied in the quarter.

Fourth Quarter 2024 vs. Fourth Quarter 2023

Income tax expense was $1.7 million, resulting in an effective tax rate of 25.4%, compared to income tax expense of $2.1 million, resulting in an effective tax rate of 29.1%. The decrease in effective tax rate was primarily due to year-end provision adjustments for additional tax benefits from low income housing tax credit fund investments, and adjustments for differences between the prior year tax provision and the final tax returns that were applied in the quarter.

BALANCE SHEET HIGHLIGHTS

Loans

($ in thousands)		As of									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
CRE loans		$	980,247		$	966,472		$	885,585		1.4	%		10.7	%
SBA loans			253,710			252,379			239,692		0.5			5.8
C&I loans			213,097			212,476			120,970		0.3			76.2
Home mortgage loans			509,524			499,666			518,024		2.0			(1.6	)
Consumer & other loans			274			14			1,574		1,857.1			(82.6	)
Gross loans		$	1,956,852		$	1,931,007		$	1,765,845		1.3	%		10.8	%

The following table presents new loan originations based on loan commitment amounts for the periods indicated:

($ in thousands)		For the Three Months Ended									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
CRE loans		$	64,827		$	68,525		$	15,885		(5.4	)%		308.1	%
SBA loans			36,810			46,302			51,855		(20.5	)		(29.0	)
C&I loans			7,783			27,771			15,270		(72.0	)		(49.0	)
Home mortgage loans			17,937			10,105			12,417		77.5			44.5
Consumer & other loans			—			—			1,500		—			(100.0	)
Gross loans		$	127,357		$	152,703		$	96,927		(16.6	)%		31.4	%

The following table presents changes in gross loans by loan activity for the periods indicated:

($ in thousands)		For the Three Months Ended
			4Q2024				3Q2024				4Q2023
Loan Activities:
Gross loans, beginning		$	1,931,007			$	1,870,106			$	1,759,525
New originations			127,357				152,703				96,927
Purchases			—				862				2,371
Sales			(34,715	)			(35,576	)			(40,122	)
Payoffs			(48,456	)			(29,642	)			(23,590	)
Paydowns			(21,919	)			(25,772	)			(27,471	)
Decrease (increase) in loans held for sale			3,578				(1,674	)			(1,795	)
Total			25,845				60,901				6,320
Gross loans, ending		$	1,956,852			$	1,931,007			$	1,765,845

As of December 31, 2024 vs. September 30, 2024

Gross loans were $1.96 billion as of December 31, 2024, up $25.8 million from September 30, 2024, primarily due to new loan originations, partially offset by loan sales, payoffs and paydowns. New loan originations, loan sales, and loan payoffs and paydowns were $127.4 million, $34.7 million, and $70.4 million, respectively, for the fourth quarter of 2024, compared with $152.7 million, $35.6 million, and $55.4 million, respectively, for the third quarter of 2024.

As of December 31, 2024 vs. December 31, 2023

Gross loans were $1.96 billion as of December 31, 2024, up $191.0 million, from December 31, 2023, primarily due to an increase in new loan originations of $502.8 million, partially offset by loan sales of $127.2 million and loan payoffs and paydowns of $188.2 million.

The following table presents the composition of gross loans by interest rate type accompanied with the weighted average contractual rates as of the periods indicated:

($ in thousands)		As of
		4Q2024						3Q2024						4Q2023
		%			Rate			%			Rate			%			Rate
Fixed rate		33.2	%		5.44	%		35.7	%		5.42	%		35.1	%		5.07	%
Hybrid rate		37.0			5.66			34.7			5.60			33.9			5.15
Variable rate		29.8			8.47			29.6			8.94			31.0			9.15
Gross loans		100.0	%		6.43	%		100.0	%		6.52	%		100.0	%		6.36	%

The following table presents the maturity of gross loans by interest rate type accompanied with the weighted average contractual rates for the periods indicated:

($ in thousands)		As of December 31, 2024
		Within One Year						One Year Through Five Years						After Five Years						Total
		Amount			Rate			Amount			Rate			Amount			Rate			Amount			Rate
Fixed rate		$	164,941		5.86	%		$	276,216		5.45	%		$	207,774		5.08	%		$	648,931		5.44	%
Hybrid rate			—		—				210,510		4.44				513,438		6.17				723,948		5.66
Variable rate			107,591		7.80				137,220		7.98				339,162		8.88				583,973		8.47
Gross loans		$	272,532		6.63	%		$	623,946		5.67	%		$	1,060,374		6.82	%		$	1,956,852		6.43	%

Allowance for Credit Losses

The following table presents allowance for credit losses and provision for credit losses as of and for the periods presented:

($ in thousands)		As of and For the Three Months Ended												Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023				3Q2024				4Q2023
Allowance for credit losses on loans, beginning		$	22,960			$	22,760			$	21,617			$	200			$	1,343
Provision for credit losses			1,859				234				537				1,625				1,322
Gross charge-offs			(29	)			(40	)			(236	)			11				207
Gross recoveries			6				6				75				—				(69	)
Net charge-offs			(23	)			(34	)			(161	)			11				138
Allowance for credit losses on loans, ending		$	24,796			$	22,960			$	21,993			$	1,836			$	2,803
Allowance for credit losses on off-balance sheet exposure, beginning		$	672			$	458			$	423			$	214			$	249
Provision for (reversal of) credit losses			(312	)			214				93				(526	)			(405	)
Allowance for credit losses on off-balance sheet exposure, ending		$	360			$	672			$	516			$	(312	)		$	(156	)

Asset Quality

($ in thousands)		As of and For the Three Months Ended												Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023			3Q2024			4Q2023
Loans 30-89 days past due and still accruing		$	8,964			$	10,306			$	9,607			(13.0	)%		(6.7	)%
As a % of gross loans			0.46	%			0.53	%			0.54	%		(0.07	)		(0.08	)
Nonperforming loans(1)		$	7,820			$	3,620			$	6,082			116.0	%		28.6	%
Nonperforming assets(1)			9,057				4,857				6,082			86.5			48.9
Nonperforming loans to gross loans			0.40	%			0.19	%			0.34	%		0.21			0.06
Nonperforming assets to total assets			0.38				0.20				0.28			0.18			0.10
Criticized loans(1)(2)		$	19,570			$	16,500			$	13,349			18.6	%		46.6	%
Criticized loans to gross loans			1.00	%			0.85	%			0.76	%		0.15			0.24
Allowance for credit losses ratios:
As a % of gross loans			1.27	%			1.19	%			1.25	%		0.08	%		0.02	%
As a % of nonperforming loans			317				634				362			(317	)		(45	)
As a % of nonperforming assets			274				473				362			(199	)		(88	)
As a % of criticized loans			127				139				165			(12	)		(38	)
Net charge-offs(3) to average gross loans(4)			0.00				0.01				0.04			(0.01	)		(0.04	)

(1)	Excludes the guaranteed portion of SBA & USDA loans that are in liquidation totaling $16.3 million, $11.1 million and $2.0 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(2)	Consists of Special Mention, Substandard, Doubtful and Loss categories.
(3)	Annualized.
(4)	Includes loans held for sale.

Overall, the Bank continued to maintain low levels of nonperforming loans and net charge-offs. Our allowance remained strong with an allowance to gross loans ratio of 1.27%.

• Loans 30-89 days past due and still accruing were $9.0 million or 0.46% of gross loans as of December 31, 2024, compared with $10.3 million or 0.53% as of September 30, 2024.
• Nonperforming loans were $7.8 million or 0.40% of gross loans as of December 31, 2024, compared with $3.6 million or 0.19% as of September 30, 2024. The increase was mainly driven by three SBA relationships: one isolated fire damage to a hotel property in Tucson, AZ, which the Bank is working with the borrower through a temporary deferment during the repairs, and two separate relationships in apparel business, which the Bank is in the process of liquidating and in negotiation to sell the note to the tenant.
• Nonperforming assets were $9.1 million or 0.38% of total assets as of December 31, 2024, compared with $4.9 million or 0.20% as of September 30, 2024. OREO remained the same at $1.2 million as of December 31, 2024 and September 30, 2024, which is secured by a mix-use property in Los Angeles Koreatown with 90% guaranteed by SBA.
• Criticized loans were $19.6 million or 1.00% of gross loans as of December 31, 2024, compared with $16.5 million or 0.85% as of September 30, 2024.
• Net charge-offs were $23 thousand or 0.00% of average loans in the fourth quarter of 2024, compared to net charge-offs of $34 thousand, or 0.01% of average loans in the third quarter of 2024 and net charge-offs of $161 thousand, or 0.04% of average loans in the fourth quarter of 2023.

Los Angeles Wildfires Impact

The Company’s overall exposure from the Los Angeles wildfires is limited to $23.5 million (or 1.3% of net loans) based on zip code. Only three borrowers suffered direct impact from the wildfires, totaling $6.3 million in outstanding principal balance. Of the three borrowers, only two borrowers with combined outstanding principal balance of $2.2 million may require temporary loan payment adjustments. The Company will continue to monitor the loans to timely assess both direct and indirect impacts to the Company’s asset quality.

Deposits

($ in thousands)		As of																		% Change 4Q2024 vs.
		4Q2024						3Q2024						4Q2023
		Amount			%			Amount			%			Amount			%			3Q2024			4Q2023
Noninterest-bearing deposits		$	504,928		24.9	%		$	561,801		27.2	%		$	522,751		28.9	%		(10.1	)%		(3.4	)%
Money market deposits and others			329,095		16.2				343,188		16.6				399,018		22.1			(4.1	)		(17.5	)
Time deposits			1,193,262		58.9				1,159,614		56.2				885,789		49.0			2.9			34.7
Total deposits		$	2,027,285		100.0	%		$	2,064,603		100.0	%		$	1,807,558		100.0	%		(1.8	)%		12.2	%
Estimated uninsured deposits		$	961,687		47.4	%		$	946,406		45.8	%		$	1,156,270		64.0	%		1.6	%		(16.8	)%

As of December 31, 2024 vs. September 30, 2024

Total deposits were $2.03 billion as of December 31, 2024, reflecting a decrease of $37.3 million or 1.8% from September 30, 2024, primarily due to decreases of $56.9 million in noninterest-bearing deposits and $14.1 million in money market deposits, partially offset by an increase of $33.6 million in time deposits. Customers’ preference for high-rate deposit products continued to drive the increase in time deposits over money market deposits. The decrease in noninterest-bearing deposits was primarily driven by a significant downward shift in market expectation on the Federal Reserve’s future rate cut trajectory and an uncertainty of economic and business outlook. Average balance of noninterest-bearing deposits, however, increased $15.4 million or 2.9% to $543.5 million from $528.1 million continuing the upward trend started from the beginning of 2024.

As of December 31, 2024 vs. December 31, 2023

Total deposits were $2.03 billion as of December 31, 2024, an increase of $219.7 million from December 31, 2023, primarily driven by a $307.5 million increase in time deposits, offset by decreases of $69.9 million in money market deposits and $17.8 million in noninterest-bearing deposits. Noninterest-bearing deposits, as a percentage of total deposits, decreased to 24.9% from 28.9%. The composition shift to time deposits was primarily due to customers’ preference for high-rate deposit products driven by market rate increases as a result of the Federal Reserve’s rate increases.

The following table sets forth the maturity of time deposits as of December 31, 2024:

		As of December 31, 2024
($ in thousands)		Within Three Months				Three to Six Months				Six to Nine Months				Nine to Twelve Months				After Twelve Months				Total
Time deposits (greater than $250)		$	206,324			$	149,639			$	78,397			$	131,002			$	451			$	565,813
Time deposits ($250 or less)			202,931				123,639				156,542				124,766				19,571				627,449
Total time deposits		$	409,255			$	273,278			$	234,939			$	255,768			$	20,022			$	1,193,262
Weighted average rate			4.89	%			4.86	%			4.77	%			4.25	%			3.98	%			4.71	%

OTHER HIGHLIGHTS

Liquidity

The Company maintains ample access to liquidity, including highly liquid assets on our balance sheet and available unused borrowings from other financial institutions. The following table presents the Company's liquid assets and available borrowings as of dates presented:

($ in thousands)			4Q2024				3Q2024				4Q2023
Liquidity Assets:
Cash and cash equivalents		$	134,943			$	166,756			$	91,216
Available-for-sale debt securities			185,909				199,373				194,250
Liquid assets		$	320,852			$	366,129			$	285,466
Liquid assets to total assets			13.6	%			15.3	%			13.3	%
Available Borrowings:
Federal Home Loan Bank—San Francisco		$	401,900			$	397,617			$	363,615
Federal Reserve Bank			215,115				207,782				182,989
Pacific Coast Bankers Bank			50,000				50,000				50,000
Zions Bank			25,000				25,000				25,000
First Horizon Bank			25,000				25,000				25,000
Total available borrowings		$	717,015			$	705,399			$	646,604
Total available borrowings to total assets			30.3	%			29.5	%			30.1	%
Liquid assets and available borrowings to total deposits			51.2	%			51.9	%			51.6	%

Capital and Capital Ratios

On January 23, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share of its common stock. The cash dividend is payable on or about February 20, 2025 to all shareholders of record as of the close of business on February 6, 2025. The payment of the dividend is based primarily on dividends from the Bank to the Company, and future dividends will depend on the Board’s assessment of the availability of capital levels to support the ongoing operating capital needs of both the Company and the Bank.

The Company did not repurchase share of its common stock during the fourth quarter of 2024. Since the announcement of the stock repurchase program in August 2023, the Company repurchased a total of 428,628 shares of its common stock at an average repurchase price of $9.37 per share through December 31, 2024.

		OP Bancorp(1)			Open Bank			Minimum Well Capitalized Ratio			Minimum Capital Ratio+ Conservation Buffer(2)
Risk-Based Capital Ratios:
Total risk-based capital ratio		12.60	%		12.50	%		10.00	%		10.50	%
Tier 1 risk-based capital ratio		11.35			11.25			8.00			8.50
Common equity tier 1 ratio		11.35			11.25			6.50			7.00
Leverage ratio		9.27			9.20			5.00			4.00

(1)	The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
(2)	An additional 2.5% capital conservation buffer above the minimum capital ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonuses to executive officers.

OP Bancorp														Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023			3Q2024			4Q2023
Risk-Based Capital Ratios:
Total risk-based capital ratio			12.60	%			12.79	%			13.77	%		(0.19	)%		(1.17	)%
Tier 1 risk-based capital ratio			11.35				11.57				12.52			(0.22	)		(1.17	)
Common equity tier 1 ratio			11.35				11.57				12.52			(0.22	)		(1.17	)
Leverage ratio			9.27				9.30				9.57			(0.03	)		(0.30	)
Risk-weighted Assets ($ in thousands)		$	1,941,549			$	1,876,698			$	1,667,067			3.46			16.46

ABOUT OP BANCORP

OP Bancorp, the holding company for Open Bank (the “Bank”), is a California corporation whose common stock is quoted on the Nasdaq Global Market under the ticker symbol, “OPBK.” The Bank is engaged in the general commercial banking business in Los Angeles, Orange, and Santa Clara Counties in California, the Dallas metropolitan area in Texas, and Clark County in Nevada and is focused on serving the banking needs of small- and medium-sized businesses, professionals, and residents with a particular emphasis on Korean and other ethnic minority communities. The Bank currently operates eleven full-service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, Gardena, Buena Park, and Santa Clara, California, Carrollton, Texas and Las Vegas, Nevada. The Bank also has five loan production offices in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, Lynnwood, Washington, and Fairfax, Virginia. The Bank commenced its operations on June 10, 2005 as First Standard Bank and changed its name to Open Bank in October 2010. Its headquarters is located at 1000 Wilshire Blvd., Suite 500, Los Angeles, California 90017. Phone 213.892.9999; www.myopenbank.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters set forth herein constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to: the impacts of recent wildfires affecting the Los Angeles Basin, which have dramatically affected our customers, communities and employees, and which will have as-yet-unquantified effects upon the value of our loans, the adequacy of our loan loss reserves, and the value of the associated collateral; the effects of substantial fluctuations in, and continuing elevated levels of, interest rates on our borrowers’ ability to perform in accordance with the terms of their loans and on our deposit customers’ expectation for higher rates on deposit products; cybersecurity risks, including the potential for the occurrence of successful cyberattacks and our ability to prevent and to mitigate the harms resulting from any such attacks; the geographic concentration of our customer base and our earning assets; infrastructure risks and similar circumstances that affect our and our customers’ ability to communicate and to engage in routine online banking activities; business and economic conditions, particularly those affecting the financial services industry and our primary market areas; risks of international conflict, terrorism, civil unrest and domestic instability; the continuing effects of inflation and monetary policies, particularly those relating to the decisions and indicators of intent expressed by the Federal Reserve Open Markets Committee, as those circumstances impact our operations and our current and prospective borrowers and depositors; our ability to balance deposit liabilities and liquidity sources (including our ability to reprice those instruments and balancing our borrowings and investments to keep pace with changing market conditions) so as to meet current and expected withdrawals while promoting strong earning capacity; our ability to manage our credit risk successfully and to assess, adjust and monitor the sufficiency of our allowance for credit losses; factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers, the success of construction projects that we finance, including any loans acquired in acquisition transactions; the impacts of credit quality on our earnings and the related effects of increases to the reserve on our net income; our ability effectively to execute our strategic plan and manage our growth; interest rate fluctuations, which could have an adverse effect on our profitability; external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition; continued or increasing competition from other banks and from credit unions and non-bank financial services companies, many of which are subject to less restrictive or less costly regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; practical and regulatory constraints on the ability of Open Bank to pay dividends to us; our ability to protect and to use our trademarks and related intellectual property; increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; a failure in the internal controls we have implemented to address the risks inherent to the business of banking; including internal controls that affect the reliability of our publicly reported financial statements; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance, particularly with respect to the effects of predictions of future economic conditions as those circumstances affect our estimates for the adequacy of our allowance for credit losses and the related provision expense; changes in our management personnel or our inability to retain motivate and hire qualified management personnel; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; risks related to potential acquisitions; political developments, uncertainties or instability, catastrophic events, or natural disasters, such as earthquakes, fires, drought, pandemic diseases (such as the coronavirus) or extreme weather events (including but not limited to the above-described wildfires affecting the Los Angeles Metropolitan Area), any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; incremental costs and obligations associated with operating as a public company; the impact of any claims or legal actions to which we may be subject, including any effect on our reputation; compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with commercial mortgage origination, sale and servicing operations; changes in federal tax law or policy; and our ability the manage the foregoing and other factors set forth in the Company’s public reports. We describe these and other risks that could affect our results in Item 1A. “Risk Factors,” of our latest Annual Report on Form 10-K for the year ended December 31, 2023 and in our subsequent filings with the Securities and Exchange Commission.

CONSOLIDATED BALANCE SHEETS (unaudited)

($ in thousands)		As of												% Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023			3Q2024			4Q2023
Assets
Cash and due from banks		$	12,268			$	24,519			$	16,948			(50.0	)%		(27.6	)%
Interest-bearing deposits in other banks			122,675				142,237				74,268			(13.8	)		65.2
Cash and cash equivalents			134,943				166,756				91,216			(19.1	)		47.9
Available-for-sale debt securities, at fair value			185,909				199,373				194,250			(6.8	)		(4.3	)
Other investments			16,437				16,520				16,276			(0.5	)		1.0
Loans held for sale			4,581				8,160				1,795			(43.9	)		155.2
CRE loans			980,247				966,472				885,585			1.4			10.7
SBA loans			253,710				252,379				239,692			0.5			5.8
C&I loans			213,097				212,476				120,970			0.3			76.2
Home mortgage loans			509,524				499,666				518,024			2.0			(1.6	)
Consumer loans			274				14				1,574			n/m			(82.6	)
Gross loans receivable			1,956,852				1,931,007				1,765,845			1.3			10.8
Allowance for credit losses			(24,796	)			(22,960	)			(21,993	)		8.0			12.7
Net loans receivable			1,932,056				1,908,047				1,743,852			1.3			10.8
Premises and equipment, net			5,449				4,961				5,248			9.8			3.8
Accrued interest receivable, net			9,188				9,479				8,259			(3.1	)		11.2
Servicing assets			10,834				10,877				11,741			(0.4	)		(7.7	)
Company owned life insurance			22,912				22,739				22,233			0.8			3.1
Deferred tax assets, net			14,893				12,288				13,309			21.2			11.9
Other real estate owned			1,237				1,237				—			—			n/m
Operating right-of-use assets			7,415				7,870				8,497			(5.8	)		(12.7	)
Other assets			20,159				19,673				31,054			2.5			(35.1	)
Total assets		$	2,366,013			$	2,387,980			$	2,147,730			(0.9	)%		10.2	%
Liabilities and Shareholders' Equity
Liabilities:
Noninterest-bearing		$	504,928			$	561,801			$	522,751			(10.1	)%		(3.4	)%
Money market and others			329,095				343,188				399,018			(4.1	)		(17.5	)
Time deposits greater than $250			565,813				564,547				433,892			0.2			30.4
Other time deposits			627,449				595,067				451,897			5.4			38.8
Total deposits			2,027,285				2,064,603				1,807,558			(1.8	)		12.2
Federal Home Loan Bank advances			95,000				75,000				105,000			26.7			(9.5	)
Accrued interest payable			16,067				19,483				12,628			(17.5	)		27.2
Operating lease liabilities			7,857				8,417				9,341			(6.7	)		(15.9	)
Other liabilities			14,811				16,874				20,577			(12.2	)		(28.0	)
Total liabilities			2,161,020				2,184,377				1,955,104			(1.1	)		10.5
Shareholders' equity:
Common stock			73,697				73,697				76,280			—			(3.4	)
Additional paid-in capital			11,928				11,713				10,942			1.8			9.0
Retained earnings			134,781				131,588				120,855			2.4			11.5
Accumulated other comprehensive loss			(15,413	)			(13,395	)			(15,451	)		15.1			(0.2	)
Total shareholders’ equity			204,993				203,603				192,626			0.7			6.4
Total liabilities and shareholders' equity		$	2,366,013			$	2,387,980			$	2,147,730			(0.9	)%		10.2	%

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

($ in thousands, except share and per share data)		For the Three Months Ended												% Change 4Q2024 vs.
			4Q2024				3Q2024				4Q2023			3Q2024			4Q2023
Interest income
Interest and fees on loans		$	31,729			$	31,885			$	28,914			(0.5	)%		9.7	%
Interest on available-for-sale debt securities			1,551				1,626				1,484			(4.6	)		4.5
Other interest income			1,771				1,788				1,385			(1.0	)		27.9
Total interest income			35,051				35,299				31,783			(0.7	)		10.3
Interest expense
Interest on deposits			17,182				17,921				14,127			(4.1	)		21.6
Interest on borrowings			940				872				1,426			7.8			(34.1	)%
Total interest expense			18,122				18,793				15,553			(3.6	)		16.5
Net interest income			16,929				16,506				16,230			2.6			4.3
Provision for credit losses			1,547				448				630			245.3			145.6
Net interest income after provision for credit losses			15,382				16,058				15,600			(4.2	)		(1.4	)
Noninterest income
Service charges on deposits			967				889				557			8.8			73.6
Loan servicing fees, net of amortization			858				693				540			23.8			58.9
Gain on sale of loans			2,197				2,088				1,996			5.2			10.1
Other income			395				570				587			(30.7	)		(32.7	)
Total noninterest income			4,417				4,240				3,680			4.2			20.0
Noninterest expense
Salaries and employee benefits			8,277				8,031				7,646			3.1			8.3
Occupancy and equipment			1,682				1,676				1,616			0.4			4.1
Data processing and communication			594				634				644			(6.3	)		(7.8	)
Professional fees			388				346				391			12.1			(0.8	)
FDIC insurance and regulatory assessments			529				391				237			35.3			123.2
Promotion and advertising			82				151				86			(45.7	)		(4.7	)
Directors’ fees			151				154				145			(1.9	)		4.1
Foundation donation and other contributions			480				549				524			(12.6	)		(8.4	)
Other expenses			950				788				694			20.6			36.9
Total noninterest expense			13,133				12,720				11,983			3.2			9.6
Income before income tax expense			6,666				7,578				7,297			(12.0	)		(8.6	)
Income tax expense			1,695				2,142				2,125			(20.9	)		(20.2	)
Net income		$	4,971			$	5,436			$	5,172			(8.6	)%		(3.9	)%
Book value per share		$	13.83			$	13.75			$	12.84			0.6	%		7.7	%
Earnings per share - basic			0.33				0.36				0.34			(8.3	)		(2.9	)
Earnings per share - diluted			0.33				0.36				0.34			(8.3	)		(2.9	)
Shares of common stock outstanding, at period end			14,819,866				14,811,671				15,000,436			0.1	%		(1.2	)%
Weighted average shares:
- Basic			14,816,416				14,812,118				15,027,110			—	%		(1.4	)%
- Diluted			14,816,416				14,812,118				15,034,822			—			(1.5	)

KEY RATIOS

		For the Three Months Ended									% Change 4Q2024 vs.
		4Q2024			3Q2024			4Q2023			3Q2024			4Q2023
Return on average assets (ROA)(1)		0.84	%		0.94	%		0.96	%		(0.1	)%		(0.1	)%
Return on average equity (ROE)(1)		9.75			10.95			11.18			(1.2	)		(1.4	)
Net interest margin(1)		2.96			2.95			3.12			—			(0.2	)
Efficiency ratio		61.52			61.31			60.19			0.2			1.3
Total risk-based capital ratio		12.60	%		12.79	%		13.77	%		(0.2	)%		(1.2	)%
Tier 1 risk-based capital ratio		11.35			11.57			12.52			(0.2	)		(1.2	)
Common equity tier 1 ratio		11.35			11.57			12.52			(0.2	)		(1.2	)
Leverage ratio		9.27			9.30			9.57			—			(0.3	)

(1)	Annualized.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

($ in thousands, except share and per share data)		For the Twelve Months Ended
		4Q2024			4Q2023			% Change
Interest income
Interest and fees on loans		$	124,361		$	110,463		12.6	%
Interest on available-for-sale debt securities			6,227			6,131		1.6
Other interest income			7,032			5,071		38.7
Total interest income			137,620			121,665		13.1
Interest expense
Interest on deposits			68,121			49,435		37.8
Interest on borrowings			3,891			3,543		9.8
Total interest expense			72,012			52,978		35.9
Net interest income			65,608			68,687		(4.5	)
Provision for credit losses			2,757			1,651		67.0
Net interest income after provision for credit losses			62,851			67,036		(6.2	)
Noninterest income
Service charges on deposits			3,261			2,123		53.6	%
Loan servicing fees, net of amortization			2,898			2,449		18.3
Gain on sale of loans			8,313			7,843		6.0
Other income			1,955			1,766		10.7
Total noninterest income			16,427			14,181		15.8
Noninterest expense
Salaries and employee benefits			31,717			29,593		7.2
Occupancy and equipment			6,673			6,490		2.8
Data processing and communication			2,245			2,109		6.4
Professional fees			1,535			1,571		(2.3	)
FDIC insurance and regulatory assessments			1,672			1,457		14.8
Promotion and advertising			533			614		(13.2	)
Directors’ fees			640			680		(5.9	)
Foundation donation and other contributions			2,108			2,400		(12.2	)
Other expenses			3,076			2,812		9.4
Total noninterest expense			50,199			47,726		5.2
Income before income tax expense			29,079			33,491		(13.2	)
Income tax expense			8,010			9,573		(16.3	)
Net income		$	21,069		$	23,918		(11.9	)%
Book value per share		$	13.83		$	12.84		7.7	%
Earnings per share - basic			1.39			1.55		(10.3	)
Earnings per share - diluted			1.39			1.55		(10.3	)
Shares of common stock outstanding, at period end			14,819,866			15,000,436		(1.2	)%
Weighted average shares:
- Basic			14,871,876			15,149,597		(1.8	)%
- Diluted			14,871,876			15,158,857		(1.9	)

KEY RATIOS

		For the Twelve Months Ended
		4Q2024			4Q2023			% Change
Return on average assets (ROA)		0.92	%		1.13	%		(0.2	)%
Return on average equity (ROE)		10.68			13.05			(2.4	)
Net interest margin		2.99			3.37			(0.4	)
Efficiency ratio		61.19			57.59			3.6
Total risk-based capital ratio		12.60	%		13.77	%		(1.2	)%
Tier 1 risk-based capital ratio		11.35			12.52			(1.2	)
Common equity tier 1 ratio		11.35			12.52			(1.2	)
Leverage ratio		9.27			9.57			(0.3	)

ASSET QUALITY

($ in thousands)		As of and For the Three Months Ended
			4Q2024				3Q2024				4Q2023
Nonaccrual loans(1)		$	7,820			$	3,620			$	6,082
Loans 90 days or more past due, accruing			—				—				—
Nonperforming loans			7,820				3,620				6,082
OREO			1,237				1,237				—
Nonperforming assets		$	9,057			$	4,857			$	6,082
Criticized loans by risk categories:
Special mention loans		$	6,309			$	4,540			$	1,428
Classified loans(1)(2)			13,261				11,960				11,921
Total criticized loans		$	19,570			$	16,500			$	13,349
Criticized loans by loan type:
CRE loans		$	9,042			$	5,249			$	4,995
SBA loans			10,128				10,144				5,864
C&I loans			400				1,107				—
Home mortgage loans			—				—				2,490
Total criticized loans		$	19,570			$	16,500			$	13,349
Nonperforming loans / gross loans			0.40	%			0.19	%			0.34	%
Nonperforming assets / gross loans plus OREO			0.46				0.25				0.34
Nonperforming assets / total assets			0.38				0.20				0.28
Classified loans / gross loans			0.68				0.62				0.68
Criticized loans / gross loans			1.00				0.85				0.76
Allowance for credit losses ratios:
As a % of gross loans			1.27	%			1.19	%			1.25	%
As a % of nonperforming loans			317				634				362
As a % of nonperforming assets			274				473				362
As a % of classified loans			187				192				184
As a % of criticized loans			127				139				165
Net charge-offs		$	23			$	34			$	161
Net charge-offs(3) to average gross loans(4)			0.00	%			0.01	%			0.04	%

(1)	Excludes the guaranteed portion of SBA & USDA loans that are in liquidation totaling $16.3 million, $11.1 million and $2.0 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(2)	Consists of Substandard, Doubtful and Loss categories.
(3)	Annualized.
(4)	Includes loans held for sale.

($ in thousands)		4Q2024			3Q2024			4Q2023
Accruing delinquent loans 30-89 days past due
30-59 days		$	3,159		$	4,095		$	5,945
60-89 days			5,805			6,211			3,662
Total		$	8,964		$	10,306		$	9,607

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS

		For the Three Months Ended
		4Q2024									3Q2024									4Q2023
($ in thousands)		Average Balance			Interest and Fees			Yield/ Rate(1)			Average Balance			Interest and Fees			Yield/ Rate(1)			Average Balance			Interest and Fees			Yield/ Rate(1)
Interest-earning assets:
Interest-bearing deposits in other banks		$	120,170		$	1,456		4.74	%		$	109,003		$	1,474		5.29	%		$	78,496		$	1,076		5.36	%
Federal funds sold and other investments			16,478			315		7.63				16,432			314		7.65				16,115			309		7.66
Available-for-sale debt securities, at fair value			193,738			1,551		3.20				199,211			1,626		3.26				189,462			1,484		3.13
CRE loans			960,639			14,653		6.07				944,818			14,759		6.21				892,092			13,104		5.83
SBA loans			269,842			6,542		9.65				270,282			7,107		10.46				255,692			7,055		10.95
C&I loans			217,816			4,086		7.46				187,163			3,642		7.74				122,950			2,416		7.80
Home mortgage loans			499,151			6,441		5.16				503,148			6,364		5.06				515,840			6,315		4.90
Consumer loans			205			7		13.55				541			13		9.37				966			24		9.92
Loans(2)			1,947,653			31,729		6.49				1,905,952			31,885		6.66				1,787,540			28,914		6.43
Total interest-earning assets			2,278,039			35,051		6.12				2,230,598			35,299		6.30				2,071,613			31,783		6.10
Noninterest-earning assets			85,218									88,747									86,874
Total assets		$	2,363,257								$	2,319,345								$	2,158,487
Interest-bearing liabilities:
Money market deposits and others		$	335,197		$	3,100		3.68	%		$	343,429		$	3,601		4.17	%		$	377,304		$	3,993		4.20	%
Time deposits			1,151,112			14,082		4.87				1,127,078			14,320		5.05				866,142			10,134		4.64
Total interest-bearing deposits			1,486,309			17,182		4.60				1,470,507			17,921		4.85				1,243,446			14,127		4.51
Borrowings			86,525			940		4.32				80,326			872		4.32				118,764			1,426		4.76
Total interest-bearing liabilities			1,572,834			18,122		4.58				1,550,833			18,793		4.82				1,362,210			15,553		4.53
Noninterest-bearing liabilities:
Noninterest-bearing deposits			543,546									528,126									569,965
Other noninterest-bearing liabilities			42,925									41,892									41,312
Total noninterest-bearing liabilities			586,471									570,018									611,277
Shareholders’ equity			203,952									198,494									185,000
Total liabilities and shareholders’ equity		$	2,363,257									2,319,345									2,158,487
Net interest income / interest rate spreads					$	16,929		1.54	%					$	16,506		1.48	%					$	16,230		1.57	%
Net interest margin								2.96	%								2.95	%								3.12	%
Cost of deposits & cost of funds:
Total deposits / cost of deposits		$	2,029,855		$	17,182		3.37	%		$	1,998,633		$	17,921		3.57	%		$	1,813,411		$	14,127		3.09	%
Total funding liabilities / cost of funds			2,116,380			18,122		3.41				2,078,959			18,793		3.60				1,932,175			15,553		3.19

(1)	Annualized.
(2)	Includes loans held for sale.

		For the Twelve Months Ended
		4Q2024									4Q2023
($ in thousands)		Average Balance			Interest and Fees			Yield/ Rate			Average Balance			Interest and Fees			Yield/ Rate
Interest-earning assets:
Interest-bearing deposits in other banks		$	109,579		$	5,766		5.26	%		$	78,676		$	4,040		5.14	%
Federal funds sold and other investments			16,371			1,266		7.74				14,963			1,031		6.89
Available-for-sale debt securities, at fair value			194,969			6,227		3.19				202,167			6,131		3.03
CRE loans			929,890			56,883		6.12				857,124			48,312		5.64
SBA loans			263,442			27,978		10.62				260,507			28,514		10.95
C&I loans			178,533			13,765		7.71				119,135			9,189		7.71
Home mortgage loans			504,030			25,648		5.09				507,125			24,384		4.81
Consumer & other loans			835			87		10.32				987			64		6.51
Loans(1)			1,876,730			124,361		6.63				1,744,878			110,463		6.33
Total interest-earning assets			2,197,649			137,620		6.26				2,040,684			121,665		5.96
Noninterest-earning assets			87,745									84,757
Total assets		$	2,285,394								$	2,125,441
Interest-bearing liabilities:
Money market deposits and others		$	346,104		$	14,135		4.08	%		$	374,116		$	13,830		3.70	%
Time deposits			1,084,107			53,986		4.98				841,804			35,605		4.23
Total interest-bearing deposits			1,430,211			68,121		4.76				1,215,920			49,435		4.07
Borrowings			88,186			3,891		4.41				77,114			3,543		4.59
Total interest-bearing liabilities			1,518,397			72,012		4.74				1,293,034			52,978		4.10
Noninterest-bearing liabilities:
Noninterest-bearing deposits			528,877									613,797
Other noninterest-bearing liabilities			40,839									35,377
Total noninterest-bearing liabilities			569,716									649,174
Shareholders’ equity			197,281									183,233
Total liabilities and shareholders’ equity		$	2,285,394									2,125,441
Net interest income / interest rate spreads					$	65,608		1.52	%					$	68,687		1.86	%
Net interest margin								2.99	%								3.37	%
Cost of deposits & cost of funds:
Total deposits / cost of deposits		$	1,959,088		$	68,121		3.48	%			1,829,717		$	49,435		2.70	%
Total funding liabilities / cost of funds			2,047,274			72,012		3.52				1,906,831			52,978		2.78

(1)	Includes loans held for sale.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250123018544/en/

Investor Relations

OP Bancorp

Christine Oh

EVP & CFO

213.892.1192

Christine.oh@myopenbank.com

Source: OP Bancorp

FAQ

What was OPBK's earnings per share in Q4 2024?

OPBK reported diluted earnings per share of $0.33 in Q4 2024, compared to $0.36 in Q3 2024.

How much did OPBK's nonperforming loans increase in Q4 2024?

Nonperforming loans increased to 0.40% of gross loans in Q4 2024, up from 0.19% in Q3 2024.

What was OPBK's net interest margin in Q4 2024?

OPBK's net interest margin was 2.96% in Q4 2024, slightly up from 2.95% in Q3 2024.

How much did OPBK's total deposits change in Q4 2024?

Total deposits decreased by 1.8% to $2.03 billion in Q4 2024 from $2.06 billion in Q3 2024.

What dividend did OPBK pay in Q4 2024?

OPBK paid a quarterly cash dividend of $0.12 per share in Q4 2024.