OPBK - OP Bancorp Reports Net Income for First Quarter 2022 of $8.2 Million and Diluted Earnings Per Share Of $0.53

April, 28 2022 04:30 PM OP Bancorp

2022 First Quarter Highlights compared with 2021 First Quarter:

Financial Results:
- Net income of $8.2 million, up $3.1 million, or 61%
- Diluted earnings per share of $0.53, up $0.20, or 61%
- Net interest income of $17.3 million, up $4.5 million, or 36%
- Provision for loan losses of $341 thousand, down $279 thousand, or 45%
- Noninterest income of $4.2 million, up $1.3 million, or 42%
- Noninterest expense of $9.7 million, up $1.7 million, or 21%
- Pre-provision net revenue ⁽¹⁾ of $11.8 million, up $4.1 million, or 53%
- Total assets of $1.86 billion, up $409 million, or 28%
- Total loans ⁽²⁾ of $1.51 billion, up $330 million, or 28%; Average loans ⁽²⁾ of $1.44 billion, up $278.9 million, or 24%
- Total deposits of $1.67 billion, up $387 million, or 30%; Average deposits of $1.57 billion, up $327.3 million, or 26%
- Noninterest-bearing deposits to total deposits of 51%, up from 45%
- Net interest margin of 4.12%, up from 3.80%
- Return on average equity of 19.54%, up from 14.02%
- Return on average assets of 1.85%, up from 1.44%
- Efficiency ratio of 44.93%, an improvement from 50.67%

Credit Quality:
- Allowance for loan losses to gross loans of 1.17%, compared to 1.33%
- Adjusted allowance to gross loans ⁽¹⁾ of 1.24%, compared to 1.59%
- Net loan recoveries to average gross loans of 0.00%
- Nonperforming loans to gross loans of 0.20%, compared to 0.10%
- Criticized loans ⁽³⁾ to gross loans of 0.27%, down from 0.62%

Capital Levels:
- Quarterly cash dividend of $0.10 per share, a 43% increase from $0.07 per share
- Capital position well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 12.11%.
- Book value per common share of $10.97, up 12%

___________________________________________________________

(1) See reconciliation of GAAP to non-GAAP financial measures.
(2) Includes loans held for sale.
(3) Includes special mention, substandard, doubtful, and loss categories.

OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank, today reported its financial results for the first quarter of 2022. Net income for the first quarter of 2022 was $8.2 million, or $0.53 per diluted common share, compared with $9.1 million, or $0.59 per diluted common share, for the fourth quarter of 2021, and $5.1 million, or $0.33 per diluted common share, for the first quarter of 2021.

Min Kim, President and Chief Executive Officer :

“We started this year with another strong quarter. Our net income and diluted earnings per share increased 61% each from a year ago. This growth in earnings was driven by strong growth in our balance sheet, expanded net interest margin, and improved efficiency. Our loans grew 28%, from a year ago, through balanced increases across all categories, further diversifying our loan portfolio. Total deposits grew 30% from a year ago with noninterest-bearing deposits reaching a record level at 50.8% of total deposits. We also expanded our branch network by opening our tenth full service branch in Cerritos, California during the quarter. We remain optimistic about our future growth and sustainability of our strong financial performance.”

SELECTED FINANCIAL HIGHLIGHTS












($ in thousands, except per share data)

As of and For the Three Months Ended

% Change 1Q22 vs.


1Q22



4Q21



1Q21


4Q21


1Q21

Selected Income Statement Data:










Net interest income

$
17,290


$
17,096


$
12,755


1.1
%

35.6
%
Provision for loan losses


341



1,898



620


(82.0
)

(45.0
)
Noninterest income


4,216



7,289



2,966


(42.2
)

42.1

Noninterest expense


9,662



9,591



7,966


0.7


21.3

Income tax expense


3,351



3,762



2,058


(10.9
)

62.8

Net Income

$
8,152


$
9,134


$
5,077


(10.8
) %

60.6
%
Diluted earnings per share

$
0.53


$
0.59


$
0.33


(10.2
) %

60.6
%
Selected Balance Sheet Data:










Total loans (1)

$
1,514,653


$
1,403,447


$
1,184,447


7.9
%

27.9
%
Total deposits

$
1,672,003


$
1,534,066


$
1,285,390


9.0
%

30.1
%
Total assets

$
1,863,945


$
1,726,691


$
1,455,334


7.9
%

28.1
%
Average loans (1)

$
1,444,054


$
1,343,414


$
1,165,150


7.5
%

23.9
%
Average deposits

$
1,570,376


$
1,545,799


$
1,243,091


1.6
%

26.3
%
Credit Quality:










Nonperforming loans

$
2,806


$
3,200


$
1,148


(12.3
) %

144.4
%
Net (recoveries) charge-offs to average gross loans (2)


(0.00
) %


0.05
%


(0.00
) %

(0.05
) %

0.00
%
Allowance for loan losses to gross loans


1.17
%


1.23
%


1.33
%

(0.06
) %

(0.16
) %
Financial Ratios:










Return on average assets (2)


1.85
%


2.11
%


1.44
%

(0.26
) %

0.41
%
Return on average equity (2)


19.54
%


22.72
%


14.02
%

(3.18
) %

5.52
%
Net interest margin (2)


4.12
%


4.07
%


3.80
%

0.05
%

0.32
%
Common equity tier 1 capital ratio


12.11
%


12.42
%


13.79
%

(0.31
) %

(1.68
) %
Leverage ratio


9.80
%


9.58
%


10.38
%

0.22
%

(0.58
) %
Efficiency ratio (3)


44.93
%


39.34
%


50.67
%

5.59
%

(5.74
) %
Book value per common share

$
10.97


$
10.92


$
9.77


0.5
%

12.3
%

Includes loans held for sale.
Annualized.
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 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Interest Income










Interest income

$
17,944

$
17,822

$
13,632

0.7
%

31.6
%
Interest expense


654


726


877

(9.9
)

(25.4
)
Net interest income

$
17,290

$
17,096

$
12,755

1.1
%

35.6
%




















($ in thousands)

For the Three Months Ended

1Q22


4Q21


1Q21

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


















Loans

$
1,444,054

$
17,257

4.84
%

$
1,343,414

$
17,271

5.10
%

$
1,165,150

$
13,284

4.62
%
Total interest-earning assets

$
1,698,799

$
17,944

4.28
%

$
1,668,865

$
17,822

4.24
%

$
1,358,119

$
13,632

4.07
%
Interest-bearing Liabilities


















Interest-bearing deposits

$
786,915

$
654

0.34
%

$
780,787

$
726

0.37
%

$
698,599

$
877

0.51
%
Total interest-bearing liabilities

$
786,915

$
654

0.34
%

$
780,791

$
726

0.37
%

$
703,599

$
877

0.51
%
Ratios


















Net interest Income/interest rate spreads



$
17,290

3.94
%



$
17,096

3.87
%



$
12,755

3.56
%
Net interest margin





4.12
%





4.07
%





3.80
%
Total deposits / cost of deposits

$
1,570,376

$
654

0.17
%

$
1,545,799

$
726

0.19
%

$
1,243,091

$
877

0.29
%
Total funding liabilities / cost of funds

$
1,570,376

$
654

0.17
%

$
1,545,803

$
726

0.19
%

$
1,248,091

$
877

0.28
%

Annualized.


















($ in thousands)

For the Three Months Ended

Yield % Change 1Q22 vs.

1Q22

4Q21

1Q21


Interest & Fees

Yield (1)

Interest & Fees

Yield (1)

Interest & Fees

Yield (1)

4Q21


1Q21

Loan Yield Component
















Contractual interest rate

$
15,120

4.24
%

$
14,509


4.29
%

$
12,168


4.23
%

(0.05
) %

0.01
%
SBA discount accretion


1,433

0.40



1,571


0.46



507


0.18


(0.06
)

0.22

Amortization of net deferred fees


500

0.14



1,087


0.32



538


0.19


(0.18
)

(0.05
)
Amortization of premium


16

—



3


—



—


—


0.00


—

Net interest recognized on nonaccrual loans


34

-0.01



(16
)

-0.00



(2
)

—


0.01


0.01

Prepayment penalties (2) and other fees


154

0.05



117


0.03



73


0.02


0.02


0.03

Yield on loans

$
17,257

4.84
%

$
17,271


5.10
%

$
13,284


4.62
%

(0.26
) %

0.22
%

















Amortization of net deferred fees:
















PPP loan forgiveness (3)

$
483

0.13
%

$
920


0.27
%

$
175


0.06
%

(0.14
) %

0.07
%
Other


17

0.01



167


0.05



363


0.13


(0.04
)

(0.12
)
Total amortization of net deferred fees

$
500

0.14
%

$
1,087


0.32
%

$
538


0.19
%

(0.18
) %

(0.05
) %

Annualized.
Prepayment penalty income of $95 thousand, $84 thousand and $69 thousand for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively, was from commercial real estate and C&I loans.
As of March 31, 2022, there were unamortized net deferred fees of $579 thousand to be recognized over the estimated life of the loans as a yield adjustment on the loans.

Impact of Hana Loan Purchase on Average Loan Yield and Net Interest Margin

During the second quarter of 2021, the Company purchased an SBA portfolio of 638 loans with an ending balance of $100.0 million, excluding loan discount of $8.9 million from Hana Small Business Lending, Inc. (“Hana”). The following table presents impacts of the Hana loan purchase on average loan yield and net interest margin:








($ in thousands)

For the Three Months Ended


1Q22



4Q21



1Q21

Hana Loan Purchase:






Contractual interest rate

$
976


$
1,027


$
—

Purchased loan discount accretion


772



826



—

Other fees


7



10



—

Total interest income

$
1,755


$
1,863


$
—








Effect on average loan yield (1)


0.26
%


0.26
%


—
%
Effect on net interest margin (1)


0.25
%


0.26
%


—
%




















($ in thousands)

For the Three Months Ended

1Q22

4Q21

1Q21

Average Balance

Interest and Fees

Yield/ Rate

Average Balance

Interest and Fees

Yield/ Rate

Average Balance

Interest and Fees

Yield/ Rate
Average loan yield (1)

$
1,444,054

$
17,257

4.84
%

$
1,343,414

$
17,271

5.10
%

$
1,165,150

$
13,284

4.62
%
Adjusted average loan yield excluding purchased loans (1)(2)

$
1,369,423

$
15,502

4.58
%

$
1,263,789

$
15,408

4.84
%

$
1,165,150

$
13,284

4.62
%



















Net interest margin (1)

$
1,698,799

$
17,290

4.12
%

$
1,668,865

$
17,096

4.07
%

$
1,358,119

$
12,755

3.80
%
Adjusted interest margin excluding purchased loans (1)(2)

$
1,624,168

$
15,535

3.87
%

$
1,589,240

$
15,233

3.81
%

$
1,358,119

$
12,755

3.80
%

Annualized.
See reconciliation of GAAP to non-GAAP financial measures.

First Quarter 2022 vs. Fourth Quarter 2021

Net interest income increased $194 thousand, or 1.1%, primarily due to higher interest income on securities available-for-sale. Net interest margin was 4.12%, an increase of 5 basis points from 4.07%.

An increase of $168 thousand in interest income from securities available-for-sale was primarily due to higher average balance.

An increase of $754 thousand in interest income on home mortgage loans from an $81.6 million purchase was offset by a $714 thousand decrease in interest income on PPP loans from lower average balance.

A $72 thousand decrease in interest expense contributed to the increase in net interest income.

Average loan yield was 4.84%, a decrease of 26 basis points from 5.10%, primarily due to lower interest income in PPP loans. Average yield on interest earning assets was 4.28%, an increase of 4 basis points from 4.24%, due to lower average balance in low-yielding interest-bearing deposits in other banks.

Average cost of deposits was 0.17%, a decrease of 2 basis points from 0.19%.

First Quarter 2022 vs. First Quarter 2021

Net interest income increased $4.5 million, or 35.6%, primarily due to higher interest income on loans. Net interest margin was 4.12%, an increase of 32 basis points from 3.80%.

An increase of $4.0 million in interest income on loans was primarily due to higher average loan balance from loan growth in home loans and C&I loans, discount accretions from the Hana loan purchase, and loan fees from PPP loan forgiveness.

The improvement of 32 basis points in net interest margin was primarily driven by a 22 basis point increase in average loan yield and a 17 basis point decrease in average cost of interest-bearing liabilities.

Provision for loan losses

First Quarter 2022 vs. Fourth Quarter 2021

The Company recorded $341 thousand provision for loan losses, compared with a $1.9 million provision for loan losses. The $341 thousand provision for loan losses was primarily due to loan growth from home mortgage purchases, partially offset by improvements in qualitative assessments of our loan portfolio.

First Quarter 2022 vs. First Quarter 2021

The Company recorded $341 thousand provision for loan losses, compared with $620 thousand provision for loan losses.

Noninterest Income












($ in thousands)

For the Three Months Ended

% Change 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Noninterest income










Service charges on deposits

$
388

$
405

$
355

(4.2
) %

9.3
%
Loan servicing fees, net of amortization


447


521


531

(14.2
)

(15.8
)
Gain on sale of loans


3,238


6,033


1,882

(46.3
)

72.1

Other income


143


330


198

(56.7
)

(27.8
)
Total noninterest income

$
4,216

$
7,289

$
2,966

(42.2
) %

42.1
%

First Quarter 2022 vs. Fourth Quarter 2021

Noninterest income decreased $3.1 million, or 42.2%, primarily due to lower gains on sale of loans.

Gains on sale of loans were $3.2 million, down $2.8 million from the fourth quarter of 2021. The decrease was primarily due to a decreased loan sales volume. The Company sold $31.8 million in SBA loans at an average premium of 11.02%, compared to the sale of $56.8 million at an average premium of 10.98%.

First Quarter 2022 vs. First Quarter 2021

Noninterest income increased $1.3 million, or 42.1%, primarily due to higher gains on sale of loans.

Gains on sales of loans were $3.2 million, up $1.4 million from the first quarter of 2021. The increase was mainly driven by higher sales volume and premiums on SBA loans. The Company sold $31.8 million in SBA loans at an average premium of 11.02%, compared to the sale of $22.4 million at an average premium of 10.51%.

Noninterest Expense












($ in thousands)

For the Three Months Ended

% Change 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Noninterest expense










Salaries and employee benefits

$
5,657

$
5,560

$
4,662

1.7
%

21.3
%
Occupancy and equipment


1,378


1,418


1,235

(2.8
)

11.6

Data processing and communication


493


637


448

(22.6
)

10.0

Professional fees


324


267


314

21.3


3.2

FDIC insurance and regulatory assessments


207


182


132

13.7


56.8

Promotion and advertising


189


156


177

21.2


6.8

Directors’ fees


177


166


116

6.6


52.6

Foundation donation and other contributions


815


901


507

(9.5
)

60.7

Other expenses


422


304


375

38.8


12.5

Total noninterest expense

$
9,662

$
9,591

$
7,966

0.7
%

21.3
%

First Quarter 2022 vs. Fourth Quarter 2021

Noninterest expense remained relatively stable in the first quarter of 2022 at $9.7 million compared to $9.6 million for the fourth quarter of 2021.

First Quarter 2022 vs. First Quarter 2021

Noninterest expense increased $1.7 million, or 21.3%, primarily due to higher salaries and employee benefits, and foundation donation and other contributions.

Salaries and employee benefits were $5.7 million, up $995 thousand from the first quarter of 2021. The increase was primarily due to a decrease in deferred loan origination costs compared to higher origination costs related to PPP loans for the first quarter of 2021.

Foundation donation and other contributions were $815 thousand, up $308 thousand from the first quarter of 2021. The increase was primarily due to higher donation accruals for Open Stewardship Foundation as a result of higher net income compared to the first quarter of 2021.

Income Tax Expense

First Quarter 2022 vs. Fourth Quarter 2021

Income tax expense was $3.4 million, and the effective tax rate was 29.1%, compared to income tax expense of $3.8 million and the effective rate of 29.2% for the fourth quarter of 2021.

First Quarter 2022 vs. First Quarter 2021

Income tax expense was $3.4 million and the effective tax rate was 29.1%, compared to income tax expense of $2.1 million and the effective rate of 28.8% for the first quarter of 2021.

Balance Sheet Highlights

Loans












($ in thousands)

As of

% Change 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Real estate loans

$
730,841

$
701,450

$
662,445

4.2
%

10.3
%
SBA loans (1)


253,064


275,858


263,185

(8.3
)

(3.8
)
C&I loans


176,934


162,543


103,883

8.9


70.3

Home mortgage loans


266,465


173,303


125,285

53.8


112.7

Consumer & other loans


1,106


865


1,074

27.9


3.0

Gross loans

$
1,428,410

$
1,314,019

$
1,155,872

8.7
%

23.6
%

Includes PPP loans of $22.1 million, $40.6 million and $113.6 million as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

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












($ in thousands)

For the Three Months Ended

% Change 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Real estate loans

$
49,868

$
35,458

$
42,748

40.6
%

16.7
%
SBA loans (1)


37,400


65,492


105,340

(42.9
)

(64.5
)
C&I loans


11,876


47,981


9,505

(75.2
)

24.9

Home mortgage loans


22,785


19,295


11,563

18.1


97.1

Gross loans

$
121,929

$
168,226

$
169,156

(27.5
) %

(27.9
) %

Includes PPP loans of $74.2 million for the three months ended March 31, 2021.

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








($ in thousands)

For the Three Months Ended


1Q22



4Q21



1Q21

Loan activities:






Gross loans, beginning

$
1,314,019


$
1,231,821


$
1,099,736

New originations


121,929



168,226



169,156

Net line advances


17,455



7,759



(11,846
)
Purchases


81,552



48,915



—

Sales


(31,819
)


(60,954
)


(26,621
)
Paydowns


(15,972
)


(12,373
)


(12,767
)
Payoffs


(45,391
)


(46,778
)


(36,987
)
PPP Payoffs


(19,079
)


(29,918
)


(22,886
)
Other


5,716



7,321



(1,913
)
Total


114,391



82,198



56,136

Gross loans, ending

$
1,428,410


$
1,314,019


$
1,155,872

First Quarter 2022 vs. Fourth Quarter 2021

Gross loans were $1.43 billion at March 31, 2022, up $114.4 million from December 31, 2021, primarily due to home mortgage loan purchases.

$81.6 million of home mortgage loans were purchased from third party mortgage originators, compared to $48.9 million in the fourth quarter of 2021. New loan originations and loan payoffs were $121.9 million and $64.5 million for the first quarter of 2022, compared with $168.2 million and $76.7 million for the fourth quarter of 2021, respectively. Of the PPP loans, $18.2 million in principal amount has been forgiven under the program, compared to a $29.9 million of PPP loans forgiven in the fourth quarter of 2021.

First Quarter 2022 vs. First Quarter 2021

Gross loans were $1.43 billion at March 31, 2022, up $272.5 million from March 31, 2021, primarily due to the Hana loan purchase, home mortgage loan purchases, and warehouse credit lines.

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

1Q22

4Q21

1Q21

%

Rate

%

Rate

%

Rate
Fixed rate

33.3 %

4.11 %

31.5 %

4.12 %

37.3 %

3.83 %
Hybrid rate

25.6

4.30

22.8

4.45

21.9

4.84
Variable rate

41.1

5.09

45.7

4.94

40.8

4.43
Gross loans

100.0 %

4.56 %

100.0 %

4.57 %

100.0 %

4.30 %

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 March 31, 2022

Within One Year

One Year Through Five Years

After Five Years

Total

Amount

Rate

Amount

Rate

Amount

Rate

Amount

Rate
Fixed rate

$
24,040

4.18
%

$
299,952

4.18
%

$
150,671

3.98
%

$
474,663

4.11
%
Hybrid rate


26,469

3.29



43,409

5.29



296,224

4.25



366,102

4.30

Variable rate


124,934

4.18



165,770

4.19



296,941

5.97



587,645

5.09

Gross loans

$
175,443

4.05
%

$
509,131

4.28
%

$
743,836

4.88
%

$
1,428,410

4.56
%

Deposits


















($ in thousands)

As of

% Change 1Q22 vs.

1Q22

4Q21

1Q21


Amount

%

Amount

%

Amount

%

4Q21

1Q21
Noninterest-bearing deposits

$ 848,531

50.8 %

$ 774,754

50.5 %

$ 571,985

44.5 %

9.5 %

48.3 %
Money market deposits and others

456,890

27.3 %

380,226

24.8

354,148

27.6 %

20.2

29.0
Time deposits

366,582

21.9 %

379,086

24.7

359,257

27.9 %

(3.3)

2.0
Total deposits

$ 1,672,003

100.0 %

$ 1,534,066

100.0 %

$ 1,285,390

100.0 %

9.0 %

30.1 %

First Quarter 2022 vs. Fourth Quarter 2021

Total deposits were $1.67 billion at March 31, 2022, up $137.9 million from December 31, 2021, primarily driven by growth in noninterest-bearing and money market deposits, partially offset by time deposits. Noninterest-bearing deposits reached a record $848.5 million or 50.8% of total deposits as of March 31, 2022, an increase from $774.8 million or 50.5% of total deposits as of December 31, 2021. The growth in noninterest-bearing deposits was primarily due to addition of new customers from our Specialty Deposit Center, which was added during the fourth quarter of 2021.

First Quarter 2022 vs. First Quarter 2021

Total deposits were $1.67 billion at March 31, 2022, an increase of $386.6 million from March 31, 2021, primarily driven by growth in noninterest-bearing deposits. Noninterest-bearing deposits were $848.5 million or 50.8% of total deposits, an increase from $572.0 million or 44.5% of total deposits as of March 31, 2021. The growth in noninterest-bearing deposits was driven by continued customer preferences for liquidity given the sustained economic uncertainty and deposit growth from our Specialty Deposit Center.

The following table sets forth the maturity of time deposits as of March 31, 2022:
















As of March 31, 2022
($ in thousands)

Within Three Months

Three to Six Months

Six to Nine Months

Nine to Twelve Months

After Twelve Months

Total
Time deposits (more than $250,000)

$
92,471


$
41,573


$
30,629


$
27,137


$
1,039


$
192,849

Time deposits ($250,000 or less)


64,166



42,975



31,826



28,209



6,557



173,733

Total time deposits

$
156,637


$
84,548


$
62,455


$
55,346


$
7,596


$
366,582

Weighted average rate


0.37
%


0.51
%


0.45
%


0.43
%


1.37
%


0.45
%

Capital and Cash Dividend












Basel III

OP Bancorp

Open Bank

Well Capitalized Ratio

Minimum Capital Ratio+ Conservation Buffer (1)
Risk-Based Capital Ratios:








Total risk-based capital ratio

13.29 %

13.12 %

10.00 %

10.50 %
Tier 1 risk-based capital ratio

12.11 %

11.94 %

8.00 %

8.50 %
Common equity tier 1 ratio

12.11 %

11.94 %

6.50 %

7.00 %
Leverage ratio

9.80 %

9.66 %

5.00 %

4.00 %

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 bonus to executive officers.
The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.












($ in thousands)

Basel III

% Change 1Q22 vs.

1Q22

4Q21

1Q21

4Q21

1Q21
Risk-Based Capital Ratios:










Total risk-based capital ratio

13.29 %

13.66 %

15.04 %

(0.37) %

(1.75) %
Tier 1 risk-based capital ratio

12.11 %

12.42 %

13.79 %

(0.31) %

(1.68) %
Common equity tier 1 ratio

12.11 %

12.42 %

13.79 %

(0.31) %

(1.68) %
Leverage ratio

9.80 %

9.58 %

10.38 %

0.22 %

(0.58) %
Risk-weighted Assets

$ 1,427,569

$ 1,335,889

$ 1,061,131

6.86 %

34.53 %

Capital ratios remained strong during the quarter. Our CET1 and total risk-based capital ratios were 12.11% and 13.29% as of March 31, 2022, respectively, a decrease from a year ago due to year-over-year asset growth.

The Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per share of its common stock. The cash dividend is payable on or about May 26, 2022 to all shareholders of record as of the close of business on May 12, 2022.

The Company did not repurchase any shares during the first quarter of 2022. Since the announcement of the initial stock repurchase program in January 2019, the Company has repurchased a total of 1.57 million shares of its common stock at an average repurchase price of $8.58 per share through March 31, 2022.

Asset Quality












($ in thousands)

As of and For the Three Months Ended

% Change 1Q22 vs.


1Q22



4Q21



1Q21


4Q21


1Q21

Nonperforming loans (1)

$
2,806


$
3,200


$
1,148


(12.3
) %

144.4
%
OREO


—



—



—


—


—

Total nonperforming assets

$
2,806


$
3,200


$
1,148


(12.3
) %

144.4
%











Nonperforming loans to gross loans


0.20
%


0.24
%


0.10
%

(0.04
) %

0.10
%
Nonperforming assets to total assets


0.15
%


0.19
%


0.08
%

(0.04
) %

0.07
%











Criticized (2) Loan:










Special mention loans

$
—


$
—


$
530


—
%

(100.0
) %
Classified loans (3)


3,848



4,039



6,586


(4.7
)

(41.6
)
Total criticized loans

$
3,848


$
4,039


$
7,116


(4.7
) %

(45.9
) %











Criticized (2) loans to gross loans


0.27
%


0.31
%


0.62
%

(0.04
) %

(0.35
) %
Classified loans (3) to gross loans


0.27
%


0.31
%


0.57
%

(0.04
) %

(0.30
) %











Allowance for loan losses, beginning

$
16,123


$
14,134


$
15,352


14.1
%

5.0
%
Provision for (reversal of) loan losses (4)


546



2,157



(16
)

(74.7
)

(3512.5
)
Gross charge-offs


(14
)


(168
)


—


(91.7
)

—

Gross recoveries


17



—



3


—


466.7

Allowance for loan losses, ending (5)

$
16,672


$
16,123


$
15,339


3.4
%

8.7
%











Allowance for loan losses ratios:










As a % of gross loans


1.17
%


1.23
%


1.33
%

(0.06
) %

(0.16
) %
As an adjusted of gross loans (6)


1.24
%


1.36
%


1.59
%

(0.12
) %

(0.35
) %
As a % of nonperforming loans


594
%


503
%


1,337
%

91
%

(743
) %
As a % of nonperforming assets


594
%


503
%


1,337
%

91
%

(743
) %
Net (recoveries) charge-offs to average gross loans


0.00
%


0.05
%


0.00
%

(0.05
) %

0.00
%

Includes the guaranteed portion of SBA loans totaling $0.9 million as of March 31, 2022.
Includes special mention, substandard, doubtful and loss categories.
Includes substandard, doubtful and loss categories.
Excludes (reversal of) provision for uncollectible accrued interest receivable of $(205) thousand, $(259) thousand and $636 thousand for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.
Excludes allowance for uncollectible accrued interest receivable of $205 thousand and $1.3 million as of December 31, 2021 and March 31, 2021, respectively.
See the Reconciliation of GAAP to NON-GAAP Financial Measures.

Overall, the Company continued to maintain solid asset quality with low levels of nonperforming loans and net charge-offs. Nonperforming assets and criticized loans remained below our historical norms, a reflection of our conservative credit culture and expertise in the industries we serve. Our allowance remained strong with an adjusted allowance to gross loans ratio of 1.24%. We expect economic metrics to remain relatively strong over the next year, which bodes well for growth.: however, we remain vigilant given potential impacts on our customers from supply chain and labor constraints as well as COVID variants.

Allowance for loan losses increased $1.3 million to $16.7 million from a year ago. Excluding the impacts of the purchased Hana loans, PPP loans, and the allowance for uncollectible accrued interest receivable, adjusted allowance to gross loans ratio was 1.24% as of March 31, 2022.
Criticized loans decreased by $3.3 million or 45.9% from a year ago, and the criticized loans to gross loans ratio improved by 35 basis points, primarily due to a $3.8 million payoff in one C&I relationship. Criticized loans are generally consistent with the Special Mention, Substandard, Doubtful and Loss categories defined by regulatory authorities.
Nonperforming assets increased $1.7 million to $2.8 million, or 0.15% of total assets from a year ago. The increase in nonperforming assets was primarily due to SBA loans that were placed on nonaccrual in 2021. As of March 31, 2022, $899 thousand of nonaccrual loans was the guaranteed portion of SBA loans that are in liquidation. The Company did not have OREO as of March 31, 2022 or 2021.
Net recoveries were $3 thousand or 0.00% of average loans in the first quarter of 2022. In comparison, there were $3 thousand net recoveries in the first quarter of 2021.

COVID-19 Pandemic Update

Total outstanding balance of loans remaining in deferment status as of March 31, 2022, represented 0.3% of the total loan portfolio.

Since the PPP’s inception through March 31, 2022, we have funded $154.5 million, and $137.0 million of principal forgiveness has been provided on qualifying PPP loans.

Reconciliation of GAAP to Non-GAAP Financial Measures

In addition to GAAP measures, management uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance.

Pre-provision net revenue removes provision for loan losses and income tax expense. Management believes that this non-GAAP measure, when taken together with the corresponding GAAP financial measures (as applicable), provides meaningful supplemental information regarding our performance. This non-GAAP financial measure also facilitates a comparison of our performance to prior periods.








($ in thousands)

For the Three Months Ended


1Q22


4Q21


1Q21
Interest income

$
17,944

$
17,822

$
13,632
Interest expense


654


726


877
Net interest income


17,290


17,096


12,755
Noninterest income


4,216


7,289


2,966
Noninterest expense


9,662


9,591


7,966
Pre-provision net revenue
(a)
$
11,844

$
14,794

$
7,755
Reconciliation to net income:






Provision for loan losses
(b)
$
341

$
1,898

$
620
Income tax expense
(c)

3,351


3,762


2,058
Net income
(a)+(b) +(c)
$
8,152

$
9,134

$
5,077

During the second quarter of 2021, the Company purchased 638 loans from Hana for a total purchase price of $97.6 million. The Company evaluated $100.0 million of the loans purchased in accordance with the provisions of ASC 310-20, Nonrefundable Fees and Other Costs, which were recorded with a $8.9 million discount. As a result, the fair value discount on these loans is being accreted into interest income over the expected life of the loans using the effective yield method. Adjusted loan yield and net interest margin for the three months ended March 31, 2022 and December 31, 2021 excluded the impacts of contractual interest and discount accretion of the purchased loans as management does not consider purchasing loan portfolios to be normal or recurring transactions. Management believes that presenting the adjusted average loan yield and net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company’s performance.








($ in thousands)

For the Three Months Ended


1Q22



4Q21



1Q21

Yield on Average Loans






Interest income on loans

$
17,257


$
17,271


$
13,284

Less: interest income on purchased loans


1,755



1,863



—

Adjusted interest income on loans
(a)
$
15,502


$
15,408


$
13,284








Average loans

$
1,444,054


$
1,343,414


$
1,165,150

Less: Average purchased loans


74,631



79,625



—

Adjusted average loans
(b)
$
1,369,423


$
1,263,789


$
1,165,150








Average loan yield (1)


4.84
%


5.10
%


4.62
%
Effect on average loan yield (1)


0.26
%


0.26
%


—
%
Adjusted average loan yield (1)
(a)/(b)

4.58
%


4.84
%


4.62
%







Net Interest Margin






Net interest income

$
17,290


$
17,096


$
12,755

Less: interest income on purchased loans


1,755



1,863



—

Adjusted net interest income
(c)
$
15,535


$
15,233


$
12,755








Average interest-earning assets

$
1,698,799


$
1,668,865


$
1,357,450

Less: Average purchased loans


74,631



79,625



—

Adjusted average interest-earning assets
(d)
$
1,624,168


$
1,589,240


$
1,357,450








Net interest margin (1)


4.12
%


4.07
%


3.80
%
Effect on net interest margin (1)


0.25
%


0.26
%


—
%
Adjusted net interest margin (1)
(c)/(d)

3.87
%


3.81
%


3.80
%

Annualized.

Adjusted allowance to gross loans ratio removes the impacts of purchased loans, PPP loans and allowance on accrued interest receivable. Management believes that this ratio provides greater consistency and comparability between the Company’s results and those of its peer banks.








($ in thousands)

For the Three Months Ended


1Q22



4Q21



1Q21

Gross loans

$
1,428,410


$
1,314,019


$
1,155,872

Less: Purchased loans


(71,377
)


(77,170
)


—

PPP loans (1)


(21,016
)


(38,918
)


(113,551
)
Adjusted gross loans
(a)

1,336,017


$
1,197,931


$
1,042,321








Accrued interest receivable on loans

$
4,494


$
4,231


$
2,839

Less: Accrued interest receivable on purchased loans


(295
)


(340
)


—

Accrued interest receivable on PPP loans (2)


(229
)


(340
)


(481
)
Add: Allowance on accrued interest receivable


—



205



1,279

Adjusted accrued interest receivable on loans
(b)
$
3,970


$
3,756


$
3,637








Adjusted gross loans and accrued interest receivable
(a)+(b) =(c)
$
1,339,987


$
1,201,687


$
1,045,958








Allowance for loan losses

$
16,672


$
16,123


$
15,339

Add: Allowance on accrued interest receivable


—



205



1,279

Adjusted Allowance
(d)
$
16,672


$
16,328


$
16,618








Adjusted allowance to gross loans ratio
(d)/(c)

1.24
%


1.36
%


1.59
%

Excludes purchased PPP loans of $1.0 million and $1.7 million as of March 31, 2022 and December 31, 2021, respectively.
Excludes purchased accrued interest receivable on PPP loans of $11 thousand and $15 thousand as of March 31, 2022 and December 31, 2021, respectively.

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, California, and Carrollton, Texas 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 with ten full service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, Gardena, Buena Park, and Santa Clara, California and Carrollton, Texas. The Bank also has four loan production offices in Atlanta, Georgia, Aurora, Colorado, and Lynnwood and Seattle, Washington. 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 Member FDIC, Equal Housing Lender.

Cautionary Note Regarding Forward-Looking Statements

Certain matters set forth herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, 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 uncertainties related to the coronavirus pandemic including, but not limited to, the potential adverse effect of the pandemic on the economy, our employees and customers, and our financial performance; the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; business and economic conditions, particularly those affecting the financial services industry and our primary market areas; our ability to successfully manage our credit risk and the sufficiency of our allowance for loan 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; our ability to effectively execute our strategic plan and manage our growth; interest rate fluctuations, which could have an adverse effect on our profitability; liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold for sale and our ability to raise additional capital, if necessary; external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve, 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 financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; restraints on the ability of Open Bank to pay dividends to us, which could limit our liquidity; 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; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance; 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, acts of war or terrorism, or natural disasters, such as earthquakes, fires, drought, pandemic diseases (such as the coronavirus) or extreme weather events, 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, 2021 and in our other subsequent filings with the Securities and Exchange Commission.

Consolidated Balance Sheets (unaudited)












($ in thousands)

As of

% Change 1Q22 vs.


1Q22



4Q21



1Q21


4Q21


1Q21

Assets










Cash and due from banks

$
18,206


$
11,283


$
20,386


61.4
%

(10.7
) %
Interest-bearing deposits in other banks


111,770



104,176



107,044


7.3


4.4

Cash and cash equivalents


129,976



115,459



127,430


12.6


2.0

Securities available for sale, at fair value


161,182



150,444



102,413


7.1


57.4

Other investments


10,836



10,999



10,047


(1.5
)

7.9

Loans held for sale


86,243



89,428



28,575


(3.6
)

201.8

Real estate loans


730,841



701,450



662,445


4.2


10.3

SBA loans (1)


253,064



275,858



263,185


(8.3
)

(3.8
)
C&I loans


176,934



162,543



103,883


8.9


70.3

Home mortgage loans


266,465



173,303



125,285


53.8


112.7

Consumer & other loans


1,106



865



1,074


27.9


3.0

Gross loans, net of unearned income


1,428,410



1,314,019



1,155,872


8.7


23.6

Allowance for loan losses


(16,672
)


(16,123
)


(15,339
)

3.4


(8.7
)
Net loans receivable


1,411,738



1,297,896



1,140,533


8.8


23.8

Premises and equipment, net


4,570



4,355



4,368


4.9


4.6

Accrued interest receivable, net


4,893



4,579



3,096


6.9


58.0

Servicing assets


12,341



12,720



7,492


(3.0
)

64.7

Company owned life insurance


11,197



11,134



10,941


0.6


2.3

Deferred tax assets


10,882



8,409



5,391


29.4


101.9

Operating right-of-use assets


8,471



8,905



6,443


(4.9
)

31.5

Other assets


11,616



12,363



8,605


(6.0
)

35.0

Total assets

$
1,863,945


$
1,726,691


$
1,455,334


7.9
%

28.1
%
Liabilities and Shareholders' Equity










Liabilities










Noninterest bearing

$
848,531


$
774,754


$
571,985


9.5
%

48.3
%
Money market and others


456,890



380,226



354,148


20.2


29.0

Time deposits greater than $250,000


192,849



207,288



190,960


(7.0
)

1.0

Other time deposits


173,733



171,798



168,297


1.1


3.2

Total deposits


1,672,003



1,534,066



1,285,390


9.0


30.1

Federal Home Loan Bank advances


—



—



5,000


—


(100.0
)
Accrued interest payable


548



558



622


(1.8
)

(11.9
)
Operating lease liabilities


9,839



10,307



8,016


(4.5
)

22.7

Other liabilities


15,564



16,538



9,313


(5.9
)

67.1

Total liabilities


1,697,954



1,561,469



1,308,341


8.7


29.8

Shareholders’ equity










Common stock


78,718



78,718



78,654


—


0.1

Additional paid-in capital


8,860



8,645



8,652


2.5


2.4

Retained earnings


85,694



79,056



59,373


8.4


44.3

Accumulated other comprehensive (loss) income


(7,281
)


(1,197
)


314


508.3


(2418.8
)
Total shareholders’ equity


165,991



165,222



146,993


0.5


12.9

Total liabilities and shareholders' equity

$
1,863,945


$
1,726,691


$
1,455,334


7.9
%

28.1
%

Includes SBA Paycheck Protection Program (“PPP”) loans of $22.1 million, $40.6 million and $113.6 million as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Consolidated Statements of Income (unaudited)












($ in thousands, except share and per share data)

For the Three Months Ended

% Change 1Q22 vs.


1Q22


4Q21


1Q21

4Q21


1Q21

Interest income










Interest and fees on loans

$
17,257

$
17,271

$
13,284

(0.1
) %

29.9
%
Interest on securities available for sale


530


362


236

46.4


124.6

Other interest income


157


189


112

(16.9
)

40.2

Total interest income


17,944


17,822


13,632

0.7


31.6

Interest expense










Interest on deposits


654


726


877

(9.9
)

(25.4
)
Total interest expense


654


726


877

(9.9
)

(25.4
)
Net interest income


17,290


17,096


12,755

1.1


35.6

Provision for loan losses


341


1,898


620

(82.0
)

(45.0
)
Net interest income after provision for loan losses


16,949


15,198


12,135

11.5


39.7

Noninterest income










Service charges on deposits


388


405


355

(4.2
)

9.3

Loan servicing fees, net of amortization


447


521


531

(14.2
)

(15.8
)
Gain on sale of loans


3,238


6,033


1,882

(46.3
)

72.1

Other income


143


330


198

(56.7
)

(27.8
)
Total noninterest income


4,216


7,289


2,966

(42.2
)

42.1

Noninterest expense










Salaries and employee benefits


5,657


5,560


4,662

1.7


21.3

Occupancy and equipment


1,378


1,418


1,235

(2.8
)

11.6

Data processing and communication


493


637


448

(22.6
)

10.0

Professional fees


324


267


314

21.3


3.2

FDIC insurance and regulatory assessments


207


182


132

13.7


56.8

Promotion and advertising


189


156


177

21.2


6.8

Directors’ fees


177


166


116

6.6


52.6

Foundation donation and other contributions


815


901


507

(9.5
)

60.7

Other expenses


422


304


375

38.8


12.5

Total noninterest expense


9,662


9,591


7,966

0.7


21.3

Income before income tax expense


11,503


12,896


7,135

(10.8
)

61.2

Income tax expense


3,351


3,762


2,058

(10.9
)

62.8

Net income

$
8,152

$
9,134

$
5,077

(10.8
) %

60.6
%











Book value per share

$
10.97

$
10.92

$
9.77

0.5
%

12.3
%
Earnings per share - Basic

$
0.53

$
0.60

$
0.33

(11.7
) %

60.6
%
Earnings per share - Diluted

$
0.53

$
0.59

$
0.33

(10.2
) %

60.6
%











Shares of common stock outstanding


15,137,808


15,137,808


15,037,635

—
%

0.7
%
Weighted Average Shares:










- Basic


15,137,808


15,136,229


15,022,876

—
%

0.8
%
- Diluted


15,242,214


15,227,291


15,069,444

0.1
%

1.1
%

Key Ratios














For the Three Months Ended

% Change 1Q22 vs.

1Q22

4Q21

1Q21

4Q21

1Q21
Return on average assets (ROA) (1)

1.85 %

2.11 %

1.44 %

(0.3) %

0.4 %
Return on average equity (ROE) (1)

19.54 %

22.68 %

14.02 %

(3.1) %

5.5 %
Net interest margin (1)

4.12 %

4.07 %

3.80 %

0.1 %

0.3 %
Efficiency ratio

44.93 %

39.34 %

50.67 %

5.6 %

(5.7) %











Total risk-based capital ratio (2)

13.29 %

13.66 %

15.04 %

(0.4) %

(1.8) %
Tier 1 risk-based capital ratio (2)

12.11 %

12.42 %

13.79 %

(0.3) %

(1.7) %
Common equity tier 1 ratio (2)

12.11 %

12.42 %

13.79 %

(0.3) %

(1.7) %
Leverage ratio (2)

9.80 %

9.58 %

10.38 %

0.2 %

(0.6) %

Annualized.
The Company’s March 31, 2022 regulatory capital ratios are preliminary.

Asset Quality








($ in thousands)

As of and For the Three Months Ended


1Q22



4Q21



1Q21

Nonaccrual Loans (1)

$
2,806


$
3,000


$
1,148

Loans 90 days or more past due, accruing


—



200



—

Accruing restructured loans


—



—



—

Nonperforming loans


2,806



3,200



1,148

Other real estate owned ("OREO")


—



—



—

Nonperforming assets

$
2,806


$
3,200


$
1,148








Criticized loans (2) by loan type:






SBA loans

$
2,544


$
2,688


$
1,684

C&I loans


305



313



4,832

Home mortgage loans


999



1,038



600

Total criticized loans (2)

$
3,848


$
4,039


$
7,116








Nonperforming assets/total assets


0.15
%


0.19
%


0.08
%
Nonperforming assets / gross loans plus OREO


0.20
%


0.24
%


0.10
%
Nonperforming loans / gross loans


0.20
%


0.24
%


0.10
%
Allowance for loan losses / nonperforming loans


594
%


503
%


1337
%
Allowance for loan losses / nonperforming assets


594
%


503
%


1337
%
Allowance for loan losses / gross loans


1.17
%


1.23
%


1.33
%
Criticized loans (2) / gross loans


0.27
%


0.31
%


0.62
%
Classified loans / gross loans


0.27
%


0.31
%


0.57
%







Net (recoveries) charge-offs

$
(3
)

$
168


$
(3
)
Net (recoveries) charge-offs to average gross loans (3)


(0.00
) %


0.05
%


(0.00
) %

Includes the guaranteed portion of SBA loans that are in liquidation totaling $899 thousand as of March 31, 2022.
Consists of special mention, substandard, doubtful and loss categories.
Annualized.








($ in thousands)


1Q22


4Q21


1Q21
Accruing delinquent loans 30-89 days past due






30-59 days

$
201

$
76

$
—
60-89 days


—


336


—
Total (1)

$
201

$
412

$
—

Includes the guaranteed portion of PPP loans totaling $9 thousand as of March 31, 2022.

Average Balance Sheet, Interest and Yield/Rate Analysis






















For the Three Months Ended


1Q22

4Q21

1Q21
($ 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

$
86,875

$
42

0.19
%

$
192,302

$
73

0.15
%

$
89,931

$
23

0.19
%
Federal funds sold and other investments


10,957


115

4.19



11,012


116

4.23



10,087


89

3.53

Available-for-sale debt securities, at fair value


156,913


530

1.35



122,137


362

1.19



92,951


236

1.02

Real estate loans


710,993


7,802

4.45



685,394


7,774

4.50



653,498


7,466

4.63

SBA loans


358,725


5,834

6.60



400,059


6,829

6.77



268,440


3,280

4.95

C&I loans


156,355


1,536

3.98



133,104


1,334

3.98



116,327


1,072

3.74

Home mortgage loans


217,103


2,074

3.82



123,822


1,320

4.27



125,698


1,451

4.62

Consumer & other loans


878


11

4.88



1,035


14

5.21



1,187


15

5.12

Loans (2)


1,444,054


17,257

4.84



1,343,414


17,271

5.10



1,165,150


13,284

4.62

Total interest-earning assets


1,698,799


17,944

4.28



1,668,865


17,822

4.24



1,358,119


13,632

4.07

Noninterest-earning assets


63,016






62,996






51,707




Total assets

$
1,761,815





$
1,731,861





$
1,409,826























Interest-bearing liabilities:


















Money market deposits and others

$
412,295

$
251

0.25
%

$
378,849

$
283

0.30
%

$
336,796

$
270

0.33
%
Time deposits


374,620


403

0.44



401,938


443

0.44



361,803


607

0.68

Total interest-bearing deposits


786,915


654

0.34



780,787


726

0.37



698,599


877

0.51

Borrowings


—


—

—



4


—

—



5,000


—

—

Total interest-bearing liabilities


786,915


654

0.34



780,791


726

0.37



703,599


877

0.51




















Noninterest-bearing liabilities:


















Noninterest-bearing deposits


783,461






765,012






544,492




Other noninterest-bearing liabilities


24,599






24,994






16,865




Total noninterest-bearing liabilities


808,060






790,006






561,357




Shareholders’ equity


166,840






161,064






144,870




Total liabilities and shareholders’ equity

$
1,761,815





$
1,731,861





$
1,409,826























Net interest income / interest rate spreads



$
17,290

3.94
%



$
17,096

3.87
%



$
12,755

3.56
%
Net interest margin





4.12
%





4.07
%





3.80
%



















Cost of deposits & cost of funds:


















Total deposits / cost of deposits

$
1,570,376

$
654

0.17
%

$
1,545,799

$
726

0.19
%


1,243,091

$
877

0.29
%
Total funding liabilities / cost of funds

$
1,570,376

$
654

0.17
%

$
1,545,803

$
726

0.19
%


1,248,091

$
877

0.28
%

Annualized.
Includes loans held for sale.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006237/en/

Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
Christine.oh@myopenbank.com

Company Name:	OP Bancorp
Stock Symbol:	OPBK
Market:	NASDAQ
Website:	myopenbank.com

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