OP Bancorp Reports Net Income for 2024 Second Quarter of $5.4 Million and Diluted Earnings Per Share of $0.36

July 25, 2024 at 16:45 PM EDT

2024 Second Quarter Highlights compared with 2024 First Quarter:

Financial Results:
- Net income of $5.4 million, a 4.0% increase compared to $5.2 million
- Diluted earnings per share of $0.36, a 5.9% increase compared to $0.34
- Net interest income of $16.2 million, compared to $16.0 million
- Net interest margin of 2.96%, compared to 3.06%
- Provision for credit losses of $617 thousand, compared to $145 thousand
- Total assets of $2.29 billion, a 2.5% increase compared to $2.23 billion
- Gross loans of $1.87 billion, a 3.6% increase compared to $1.80 billion
- Total deposits of $1.94 billion, a 2.4% increase compared to $1.90 billion
Credit Quality:
- Allowance for credit losses to gross loans of 1.22%, compared to 1.23%
- 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 0.36%, compared to 0.22%
- Nonperforming loans to gross loans of 0.23%, compared to 0.24%
- Criticized loans⁽³⁾ to gross loans of 0.88%, compared to 0.64%
Capital Levels:
- Remained well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 12.01%
- Book value per common share increased to $13.22, compared to $13.00
- Repurchased 224,321 shares of common stock at an average price of $9.64 per share
- 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.

OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported its financial results for the second quarter of 2024. Net income for the second quarter of 2024 was $5.4 million, or $0.36 per diluted common share, compared with $5.2 million, or $0.34 per diluted common share, for the first quarter of 2024, and $6.1 million, or $0.39 per diluted common share, for the second quarter of 2023.

Min Kim, President and Chief Executive Officer:

“Even with the extended pressure on the business and banking environment, we continued to grow our loans and deposits while improving net income and earnings per share over the last quarter. Our net interest margin was controlled with a slight decline while our credit quality remained strong. We remain optimistic about our future growth and performance and will continue to focus on executing our strategic goals while maintaining an optimal risk profile,” said Min Kim, President and Chief Executive.

SELECTED FINANCIAL HIGHLIGHTS


($ in thousands, except per share data)	As of and For the Three Months Ended									% Change 2Q2024 vs.
($ in thousands, except per share data)		2Q2024			1Q2024			2Q2023		1Q2024		2Q2023
Selected Income Statement Data:
Net interest income	$	16,194		$	15,979		$	17,252		1.3	%	(6.1	)%
Provision for credit losses		617			145			—		325.5		n/m
Noninterest income		4,184			3,586			3,605		16.7		16.1
Noninterest expense		12,189			12,157			12,300		0.3		(0.9	)
Income tax expense		2,136			2,037			2,466		4.9		(13.4	)
Net income		5,436			5,226			6,091		4.0		(10.8	)
Diluted earnings per share		0.36			0.34			0.39		5.9		(7.7	)
Selected Balance Sheet Data:
Gross loans	$	1,870,106		$	1,804,987		$	1,716,197		3.6	%	9.0	%
Total deposits		1,940,821			1,895,411			1,859,639		2.4		4.4
Total assets		2,290,680			2,234,520			2,151,701		2.5		6.5
Average loans⁽¹⁾		1,843,284			1,808,932			1,725,764		1.9		6.8
Average deposits		1,970,320			1,836,331			1,817,101		7.3		8.4
Credit Quality:
Nonperforming loans	$	4,389		$	4,343		$	3,447		1.1	%	27.3	%
Nonperforming loans to gross loans		0.23	%		0.24	%		0.20	%	(0.01	)	0.03
Criticized loans⁽²⁾ to gross loans		0.88			0.64			0.44		0.24		0.44
Net charge-offs (recoveries)⁽³⁾ to average gross loans⁽¹⁾		(0.00	)		0.01			0.00		(0.01	)	(0.00	)
Allowance for credit losses to gross loans		1.22			1.23			1.21		(0.01	)	0.01
Allowance for credit losses to nonperforming loans		519			510			603		9.00		(84.00	)
Financial Ratios:
Return on average assets⁽³⁾		0.95	%		0.96	%		1.15	%	(0.01	)%	(0.20	)%
Return on average equity⁽³⁾		11.23			10.83			13.27		0.40		(2.04	)
Net interest margin⁽³⁾		2.96			3.06			3.40		(0.10	)	(0.44	)
Efficiency ratio⁽⁴⁾		59.81			62.14			58.97		(2.33	)	0.84
Common equity tier 1 capital ratio		12.01			12.34			11.92		(0.33	)	0.09
Leverage ratio		9.28			9.65			9.50		(0.37	)	(0.22	)
Book value per common share	$	13.22		$	13.00		$	12.16		1.7		8.7

⁽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 2Q2024 vs.
($ in thousands)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
Interest Income
Interest income	$	34,357	$	32,913	$	30,102	4.4	%	14.1	%
Interest expense		18,163		16,934		12,850	7.3		41.3
Net interest income	$	16,194	$	15,979	$	17,252	1.3	%	(6.1	)%


($ in thousands)	For the Three Months Ended												Yield Change 2Q2024 vs.
	2Q2024				1Q2024				2Q2023				Yield Change 2Q2024 vs.
	Interest and Fees		Yield/Rate⁽¹⁾		Interest and Fees		Yield/Rate⁽¹⁾		Interest and Fees		Yield/Rate⁽¹⁾		1Q2024		2Q2023
Interest-earning Assets:
Loans	$	30,605	6.67	%	$	30,142	6.69	%	$	27,288	6.34	%	(0.02	)%	0.33	%
Total interest-earning assets		34,357	6.29			32,913	6.32			30,102	5.94		(0.03	)	0.35
Interest-bearing Liabilities:
Interest-bearing deposits		17,343	4.84			15,675	4.77			11,920	3.98		0.07		0.86
Total interest-bearing liabilities		18,163	4.81			16,934	4.76			12,850	4.01		0.05		0.80
Ratios:
Net interest income / interest rate spreads		16,194	1.48			15,979	1.56			17,252	1.93		(0.08	)	(0.45	)
Net interest margin			2.96				3.06				3.40		(0.10	)	(0.44	)
Total deposits / cost of deposits		17,343	3.54			15,675	3.43			11,920	2.63		0.11		0.91
Total funding liabilities / cost of funds		18,163	3.57			16,934	3.50			12,850	2.71		0.07		0.86

(1)

Annualized.


($ in thousands)	For the Three Months Ended															Yield Change 2Q2024 vs.
	2Q2024					1Q2024					2Q2023					Yield Change 2Q2024 vs.
	Interest & Fees			Yield⁽¹⁾		Interest & Fees			Yield⁽¹⁾		Interest & Fees			Yield⁽¹⁾		1Q2024		2Q2023
Loan Yield Component:
Contractual interest rate	$	29,719		6.48	%	$	28,877		6.41	%	$	26,411		6.13	%	0.07	%	0.35	%
SBA loan discount accretion⁽²⁾		1,087		0.24			881		0.20			1,078		0.25		0.04		(0.01	)
Amortization of net deferred fees		(44	)	(0.01	)		54		0.01			16		0.01		(0.02	)	(0.02	)
Amortization of premium		(396	)	(0.09	)		(428	)	(0.10	)		(452	)	(0.11	)	0.01		0.02
Net interest recognized on nonaccrual loans		(3	)	—			492		0.11			40		0.01		(0.11	)	(0.01	)
Prepayment penalties and other fees⁽³⁾		242		0.05			266		0.06			195		0.05		(0.01	)	—
Yield on loans	$	30,605		6.67	%	$	30,142		6.69	%	$	27,288		6.34	%	(0.02	)%	0.33	%

(1)		Annualized.
(2)		Includes discount accretion from SBA loan payoffs of $564 thousand, $345 thousand and $459 thousand for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
(3)		Includes prepayment penalty income of $26 thousand, $115 thousand and $110 thousand for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively, from Commercial Real Estate (“CRE”) and Commercial and Industrial (“C&I”) loans.

Second Quarter 2024 vs. First Quarter 2024

Net interest income increased $215 thousand, or 1.3%, primarily due to higher interest income on deposits in other banks and loans, coupled with lower interest expense on borrowings, but partially offset by higher interest expense on interest-bearing deposits. Net interest margin was 2.96%, a decrease of 10 basis points from 3.06%.

An $858 thousand increase in interest income on interest-bearing deposits in other banks was primarily due to a $62.9 million, or 86.2%, increase in average balance.

A $463 thousand increase in interest income on loans was primarily due to a $34.4 million, or 1.9%, increase in average balance.

A $439 thousand decrease in interest expense on borrowings was primarily due to a $31.4 million, or 28.9%, decrease in average balance.

A $1.7 million increase in interest expense on interest-bearing deposits was primarily due to a $119.3 million, or 9.0%, increase in average balance.

Second Quarter 2024 vs. Second Quarter 2023

Net interest income decreased $1.1 million, or 6.1%, primarily due to higher interest expense on interest-bearing deposits, partially offset by higher interest income on loans and deposits in other banks as our deposit costs repriced quicker than our interest-earning asset yields following the Federal Reserve’s rate increases. Net interest margin was 2.96%, a decrease of 44 basis points from 3.40%.

A $5.4 million increase in interest expense on interest-bearing deposits was primarily due to a $239.8 million, or 20.0%, increase in average balance and a 86 basis point increase in average cost.

A $3.3 million increase in interest income on loans was primarily due to a $117.5 million, or 6.8%, increase in average balance and a 33 basis point increase in average yield.

An $844 thousand increase in interest income on interest-bearing deposits in other banks was primarily due to a $56.8 million, or 71.7%, increase in average balance and a 36 basis point increase in average yield.

Provision for Credit Losses


($ in thousands)	For the Three Months Ended
($ in thousands)		2Q2024			1Q2024			2Q2023
Provision for credit losses on loans	$	627		$	193		$	—
Reversal of credit losses on off-balance sheet exposure		(10	)		(48	)		—
Total provision for credit losses	$	617		$	145		$	—

Second Quarter 2024 vs. First Quarter 2024

The Company recorded a $617 thousand provision for credit losses, an increase of $472 thousand, compared with a $145 thousand provision for credit losses. Provision for credit losses on loans of $627 thousand was partially offset by a $10 thousand reversal of credit losses on off-balance sheet exposure.

Provision for credit losses on loans of $627 thousand was primarily due to a $634 thousand increase in the qualitative reserve. The quantitative reserve was unchanged from the prior quarter. The increase in the qualitative reserve was primarily due to weakening economic and business conditions, increasing criticized loans, and declining collateral values for collateral dependent CRE loans.

Second Quarter 2024 vs. Second Quarter 2023

The Company recorded a $617 thousand provision for credit losses, an increase of $617 thousand, compared with no provision for credit losses.

Noninterest Income


($ in thousands)	For the Three Months Ended						% Change 2Q2024 vs.
($ in thousands)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
Noninterest Income
Service charges on deposits	$	793	$	612	$	573	29.6	%	38.4	%
Loan servicing fees, net of amortization		575		772		595	(25.5	)	(3.4	)
Gain on sale of loans		2,325		1,703		2,098	36.5		10.8
Other income		491		499		339	(1.6	)	44.8
Total noninterest income	$	4,184	$	3,586	$	3,605	16.7	%	16.1	%

Second Quarter 2024 vs. First Quarter 2024

Noninterest income increased $598 thousand, or 16.7%, primarily due to higher gain on sale of loans and higher service charges on deposits, offset by lower loan servicing fee.

Gain on sale of loans was $2.3 million, an increase of $622 thousand from $1.7 million, primarily due to a higher Small Business Administration (“SBA”) loan sold amount and a higher average premium on sales. The Bank sold $32.1 million in SBA loans at an average premium rate of 8.58%, compared to the sale of $24.8 million at an average premium rate of 8.33%.

Service charges on deposits was $793 thousand, an increase of $181 thousand from $612 thousand, primarily due to an increase in deposit analysis fees from an increase in the number of analysis accounts.

Loan servicing fees, net of amortization, was $575 thousand, a decrease of $197 thousand from $772 thousand, primarily due to an increase in servicing fee amortization driven by higher loan payoffs in loan servicing portfolio.

Second Quarter 2024 vs. Second Quarter 2023

Noninterest income increased $579 thousand, or 16.1%, primarily due to higher gain on sale of loans, higher service charges on deposits and higher other income.

Gain on sale of loans was $2.3 million, an increase of $227 thousand from $2.1 million, primarily due to a higher average premium rate. The Bank sold $32.1 million in SBA loans at an average premium rate of 8.58%, compared to the sale of $36.8 million at an average premium rate of 6.64%.

Service charges on deposits was $793 thousand, an increase of $220 thousand from $573 thousand, primarily due to an increase in deposit analysis fees from an increase in the number of analysis accounts.

Other income was $491 thousand, an increase of $152 thousand from $339 thousand, primarily due to an increase of $98 thousand in credit related fee income.

Noninterest Expense


($ in thousands)	For the Three Months Ended						% Change 2Q2024 vs.
($ in thousands)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
Noninterest Expense
Salaries and employee benefits	$	7,568	$	7,841	$	7,681	(3.5	)%	(1.5	)%
Occupancy and equipment		1,660		1,655		1,598	0.3		3.9
Data processing and communication		530		487		546	8.8		(2.9	)
Professional fees		406		395		381	2.8		6.6
FDIC insurance and regulatory assessments		378		374		420	1.1		(10.0	)
Promotion and advertising		151		149		159	1.3		(5.0	)
Directors’ fees		178		157		210	13.4		(15.2	)
Foundation donation and other contributions		539		540		594	(0.2	)	(9.3	)
Other expenses		779		559		711	39.4		9.6
Total noninterest expense	$	12,189	$	12,157	$	12,300	0.3	%	(0.9	)%

Second Quarter 2024 vs. First Quarter 2024

Noninterest expense increased $32 thousand, or 0.3%, primarily due to higher other expenses and data processing and communication, partially offset by lower salaries and employee benefits.

Other expenses increased $220 thousand, primarily due to an increase of $147 thousand in business development expense related to the addition of deposit analysis accounts and an increase of $84 thousand in Other Real Estate Owned (“OREO”) expense.

Data processing and communication increased $43 thousand, primarily due to an accrual adjustment made in the prior quarter for credits received on data processing fees.

Salaries and employee benefits decreased $273 thousand, primarily due to decreases in employer payroll taxes, employee incentive accruals, and employee vacation accruals.

Second Quarter 2024 vs. Second Quarter 2023

Noninterest expense decreased $111 thousand, or 0.9%, primarily due to lower salaries and employee benefits and foundation donation and other contributions, partially offset by higher other expenses.

Salaries and employee benefits decreased $113 thousand, primarily due to decreases in employee incentive accruals and employee vacation accruals.

Foundation donations and other contributions decreased $55 thousand, primarily due to a lower donation accrual for Open Stewardship as a result of lower net income.

Other expenses increased $68 thousand, primarily due to an increase of $84 thousand in OREO expense.

Income Tax Expense

Second Quarter 2024 vs. First Quarter 2024

Income tax expense was $2.1 million and the effective tax rate was 28.2%, compared to income tax expense of $2.0 million and the effective rate of 28.0%. The increase in income tax expense was in line with the increase in income before income taxes.

Second Quarter 2024 vs. Second Quarter 2023

Income tax expense was $2.1 million and the effective tax rate was 28.2%, compared to income tax expense of $2.5 million and an effective rate of 28.8%. The decrease in the effective tax rate was primarily due to an increased tax benefits from an increase in low income housing tax credit investments.

BALANCE SHEET HIGHLIGHTS

Loans


($ in thousands)	As of						% Change 2Q2024 vs.
($ in thousands)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
CRE loans	$	931,284	$	905,534	$	847,863	2.8	%	9.8	%
SBA loans		242,395		247,550		238,785	(2.1	)	1.5
C&I loans		188,557		147,508		112,160	27.8		68.1
Home mortgage loans		506,873		502,995		516,226	0.8		(1.8	)
Consumer & other loans		997		1,400		1,163	(28.8	)	(14.3	)
Gross loans	$	1,870,106	$	1,804,987	$	1,716,197	3.6	%	9.0	%

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


($ in thousands)	For the Three Months Ended						% Change 2Q2024 vs.
($ in thousands)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
CRE loans	$	41,990	$	44,595	$	29,976	(5.8	)%	40.1	%
SBA loans		24,142		52,379		34,312	(53.9	)	(29.6	)
C&I loans		21,271		22,124		25,650	(3.9	)	(17.1	)
Home mortgage loans		13,720		2,478		22,788	453.7		(39.8	)
Gross loans	$	101,123	$	121,576	$	112,726	(16.8	)%	(10.3	)%

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


($ in thousands)	For the Three Months Ended
($ in thousands)		2Q2024			1Q2024			2Q2023
Loan Activities:
Gross loans, beginning	$	1,804,987		$	1,765,845		$	1,692,485
New originations		101,123			121,576			112,726
Net line advances		43,488			16,965			(25,961	)
Purchases		—			—			6,359
Sales		(32,102	)		(32,106	)		(36,791	)
Paydowns		(19,710	)		(24,557	)		(17,210	)
Payoffs		(36,902	)		(28,539	)		(25,969	)
Decrease (increase) in loans held for sale		9,590			(14,280	)		7,534
Other		(368	)		83			3,024
Total		65,119			39,142			23,712
Gross loans, ending	$	1,870,106		$	1,804,987		$	1,716,197

As of June 30, 2024 vs. March 31, 2024

Gross loans were $1.87 billion as of June 30, 2024, up $65.1 million, from March 31, 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 $101.1 million $32.1 million and $56.6 million, respectively, for the second quarter of 2024, compared with $121.6 million, $32.1 million and $53.1 million, respectively, for the first quarter of 2024.

As of June 30, 2024 vs. June 30, 2023

Gross loans were $1.87 billion as of June 30, 2024, up $153.9 million, from June 30, 2023, primarily due to new loan originations of $415.7 million, primarily offset by loan sales of $127.7 million and loan payoffs and paydowns of $211.6 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
	2Q2024				1Q2024				2Q2023
	%		Rate		%		Rate		%		Rate
Fixed rate	36.2	%	5.39	%	35.1	%	5.17	%	36.2	%	4.82	%
Hybrid rate	33.9		5.42		32.8		5.22		34.7		4.99
Variable rate	29.9		9.19		32.1		9.16		29.1		9.05
Gross loans	100.0	%	6.54	%	100.0	%	6.47	%	100.0	%	6.11	%

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 June 30, 2024
	Within One Year				One Year Through Five Years				After Five Years				Total
	Amount		Rate		Amount		Rate		Amount		Rate		Amount		Rate
Fixed rate	$	155,421	6.17	%	$	292,706	5.11	%	$	229,174	5.21	%	$	677,301	5.39	%
Hybrid rate		5,032	8.38			173,341	4.21			454,749	5.84			633,122	5.42
Variable rate		93,103	9.03			128,778	9.04			337,802	9.29			559,683	9.19
Gross loans	$	253,556	7.26	%	$	594,825	5.70	%	$	1,021,725	6.84	%	$	1,870,106	6.54	%

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 2Q2024 vs.
($ in thousands)		2Q2024			1Q2024			2Q2023			1Q2024			2Q2023
Allowance for credit losses on loans, beginning	$	22,129		$	21,993		$	20,814		$	136		$	1,315
Provision for credit losses		627			193			—			434			627
Gross charge-offs		—			(68	)		(20	)		68			20
Gross recoveries		4			11			8			(7	)		(4	)
Net (charge-offs) recoveries		4			(57	)		(12	)		61			16
Allowance for credit losses on loans, ending	$	22,760		$	22,129		$	20,802		$	631		$	1,958

Allowance for credit losses on off-balance sheet exposure, beginning	$	468		$	516		$	367		$	(48	)	$	101
Reversal of credit losses		(10	)		(48	)		—			38			(10	)
Allowance for credit losses on off-balance sheet exposure, ending	$	458		$	468		$	367		$	(10	)	$	91

Asset Quality


($ in thousands)	As of and For the Three Months Ended									Change 2Q2024 vs.
($ in thousands)		2Q2024			1Q2024			2Q2023		1Q2024		2Q2023
Loans 30-89 days past due and still accruing	$	6,652		$	3,904		$	5,215		70.4	%	27.6	%
As a % of gross loans		0.36	%		0.22	%		0.30	%	0.14		0.06

Nonperforming loans⁽¹⁾	$	4,389		$	4,343		$	3,447		1.1	%	27.3	%
Nonperforming assets⁽¹⁾		5,626			5,580			3,447		0.8		63.2
Nonperforming loans to gross loans		0.23	%		0.24	%		0.20	%	(0.01	)	0.03
Nonperforming assets to total assets		0.25			0.25			0.16		0.00		0.09

Criticized loans⁽¹⁾⁽²⁾	$	16,428		$	11,564		$	7,538		42.1	%	117.9	%
Criticized loans to gross loans		0.88	%		0.64	%		0.44	%	0.24		0.44

Allowance for credit losses ratios:
As a % of gross loans		1.22	%		1.23	%		1.21	%	(0.01	)%	0.01	%
As a % of nonperforming loans		519			510			603		9		(84	)
As a % of nonperforming assets		405			397			603		8		(198	)
As a % of criticized loans		139			191			276		(52	)	(137	)
Net charge-offs (recoveries)⁽³⁾ to average gross loans⁽⁴⁾		(0.00	)		0.01			0.00		(0.01	)	(0.00	)

(1)	Excludes the guaranteed portion of SBA loans that are in liquidation totaling $3.5 million, $3.1 million and $5.4 million as of June 30, 2024, March 31, 2024 and June 30, 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 1.22%.

Loans 30-89 days past due and still accruing were $6.7 million or 0.36% of gross loans as of June 30, 2024, compared with $3.9 million or 0.22% as of March 31, 2024. The increase was due to two home mortgage loans totaling $2.2 million, one of which was paid current after the quarter, and one SBA relationship totaling $0.9 million.

Nonperforming loans were $4.4 million or 0.23% of gross loans as of June 30, 2024, compared with $4.3 million or 0.24% as of March 31, 2024.

Nonperforming assets were $5.6 million or 0.25% of total assets as of June 30, 2024, compared with $5.6 million or 0.25% as of March 31, 2024. OREO was $1.2 million as of June 30, 2024, which is secured by a mix-use property in Los Angeles Koreatown with 90% guaranteed by SBA.

Criticized loans were $16.4 million or 0.88% of gross loans as of June 30, 2024, compared with $11.6 million or 0.64% as of March 31, 2024. The increase was due to three Special Mention downgrades totaling $2.1 million and five Substandard downgrades totaling $3.2 million.

Net recoveries were $4 thousand or 0.00% of average loans in the second quarter of 2024, compared to net charge-offs of $57 thousand, or 0.01% of average loans in the first quarter of 2024 and of $12 thousand, or 0.00% of average loans in the second quarter of 2023.

Deposits


($ in thousands)	As of												% Change 2Q2024 vs.
			2Q2024				1Q2024				2Q2023		% Change 2Q2024 vs.
	Amount		%		Amount		%		Amount		%		1Q2024		2Q2023
Noninterest-bearing deposits	$	518,456	26.7	%	$	539,396	28.5	%	$	634,745	34.1	%	(3.9	)%	(18.3	)%
Money market deposits and others		332,137	17.1			327,718	17.3			344,162	18.5		1.3		(3.5	)
Time deposits		1,090,228	56.2			1,028,297	54.2			880,732	47.4		6.0		23.8
Total deposits	$	1,940,821	100.0	%	$	1,895,411	100.0	%	$	1,859,639	100.0	%	2.4	%	4.4	%

Estimated uninsured deposits	$	860,419	44.3	%	$	805,523	42.5	%	$	805,070	43.3	%	6.8	%	6.9	%

As of June 30, 2024 vs. March 31, 2024

Total deposits were $1.94 billion as of June 30, 2024, up $45.4 million from March 31, 2024, primarily due to increases of $61.9 million in time deposits and $4.4 million in money market deposits, offset by a $20.9 million decrease in noninterest-bearing deposit. Noninterest-bearing deposits, as a percentage of total deposits, decreased to 26.7% from 28.5%. The composition shift to time deposits driven by customers’ preference for high-rate deposit products continued but slowed to a lesser extent.

As of June 30, 2024 vs. June 30, 2023

Total deposits were $1.94 billion as of June 30, 2024, up $81.2 million from June 30, 2023, primarily driven by a $209.5 million increase in time deposits, offset by decreases of $116.3 million in noninterest-bearing deposits and $12.0 million in money market deposits. Noninterest-bearing deposits, as a percentage of total deposits, decreased to 26.7% from 34.1%. 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 June 30, 2024:


	As of June 30, 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)	$	96,968		$	201,334		$	145,549		$	85,958		$	4,048		$	533,857
Time deposits ($250 or less)		155,311			188,367			102,834			77,680			32,179			556,371
Total time deposits	$	252,279		$	389,701		$	248,383		$	163,638		$	36,227		$	1,090,228
Weighted average rate		5.09	%		5.18	%		5.07	%		5.16	%		4.17	%		5.10	%

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)		2Q2024			1Q2024			2Q2023
Liquidity Assets:
Cash and cash equivalents	$	127,676		$	139,246		$	143,761
Available-for-sale debt securities		199,205			187,225			202,250
Liquid assets	$	326,881		$	326,471		$	346,011
Liquid assets to total assets		14.3	%		14.6	%		16.1	%

Available borrowings:
Federal Home Loan Bank—San Francisco	$	343,600		$	331,917		$	400,543
Federal Reserve Bank		191,421			185,913			172,316
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	$	635,021		$	617,830		$	672,859
Total available borrowings to total assets		27.7	%		27.6	%		31.3	%

Liquid assets and available borrowings to total deposits		49.6	%		49.8	%		54.8	%

Capital and Capital Ratios

On July 25, 2024, 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 August 22, 2024 to all shareholders of record as of the close of business on August 8, 2024. 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 also repurchased 224,321 shares of its common stock at an average price of $9.64 per share during the second quarter of 2024 under the stock repurchase program announced in August 2023. Since the announcement of the stock repurchase program in August 2023, the Company repurchased a total of 424,018 shares of its common stock at an average repurchase price of $9.36 per share through June 30, 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	13.26	%	13.24	%	10.00	%	10.50	%
Tier 1 risk-based capital ratio	12.01		11.99		8.00		8.50
Common equity tier 1 ratio	12.01		11.99		6.50		7.00
Leverage ratio	9.28		9.27		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 2Q2024 vs.
OP Bancorp		2Q2024			1Q2024			2Q2023		1Q2024		2Q2023
Risk-Based Capital Ratios:
Total risk-based capital ratio		13.26	%		13.59	%		13.10	%	(0.33	)%	0.16	%
Tier 1 risk-based capital ratio		12.01			12.34			11.92		(0.33	)	0.09
Common equity tier 1 ratio		12.01			12.34			11.92		(0.33	)	0.09
Leverage ratio		9.28			9.65			9.50		(0.37	)	(0.22	)
Risk-weighted Assets ($ in thousands)	$	1,776,771		$	1,715,186		$	1,700,205		3.59		4.50

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 four loan production offices in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, and Lynnwood, 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.

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 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; 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; 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, 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 2Q2024 vs.
($ in thousands)		2Q2024			1Q2024			2Q2023		1Q2024		2Q2023
Assets
Cash and due from banks	$	21,771		$	20,513		$	21,295		6.1	%	2.2	%
Interest-bearing deposits in other banks		105,905			118,733			122,466		(10.8	)	(13.5	)
Cash and cash equivalents		127,676			139,246			143,761		(8.3	)	(11.2	)
Available-for-sale debt securities, at fair value		199,205			187,225			202,250		6.4		(1.5	)
Other investments		16,367			16,264			16,183		0.6		1.1
Loans held for sale		6,485			16,075			—		(59.7	)	n/m
CRE loans		931,284			905,534			847,863		2.8		9.8
SBA loans		242,395			247,550			238,785		(2.1	)	1.5
C&I loans		188,557			147,508			112,160		27.8		68.1
Home mortgage loans		506,873			502,995			516,226		0.8		(1.8	)
Consumer loans		997			1,400			1,163		(28.8	)	(14.3	)
Gross loans receivable		1,870,106			1,804,987			1,716,197		3.6		9.0
Allowance for credit losses		(22,760	)		(22,129	)		(20,802	)	2.9		9.4
Net loans receivable		1,847,346			1,782,858			1,695,395		3.6		9.0
Premises and equipment, net		4,716			4,971			5,093		(5.1	)	(7.4	)
Accrued interest receivable, net		8,555			8,370			7,703		2.2		11.1
Servicing assets		11,043			11,405			12,654		(3.2	)	(12.7	)
Company owned life insurance		22,566			22,399			21,913		0.7		3.0
Deferred tax assets, net		14,117			13,802			13,360		2.3		5.7
Other real estate owned		1,237			1,237			—		—		n/m
Operating right-of-use assets		8,348			8,864			9,487		(5.8	)	(12.0	)
Other assets		23,019			21,804			23,902		5.6		(3.7	)
Total assets	$	2,290,680		$	2,234,520		$	2,151,701		2.5	%	6.5	%
Liabilities and Shareholders' Equity
Liabilities:
Noninterest-bearing	$	518,456		$	539,396		$	634,745		(3.9	)%	(18.3	)%
Money market and others		332,137			327,718			344,162		1.3		(3.5	)
Time deposits greater than $250		533,857			451,497			416,208		18.2		28.3
Other time deposits		556,371			576,800			464,524		(3.5	)	19.8
Total deposits		1,940,821			1,895,411			1,859,639		2.4		4.4
Federal Home Loan Bank advances		115,000			105,000			75,000		9.5		53.3
Accrued interest payable		15,504			12,270			9,354		26.4		65.7
Operating lease liabilities		9,000			9,614			10,486		(6.4	)	(14.2	)
Other liabilities		14,449			17,500			13,452		(17.4	)	7.4
Total liabilities		2,094,774			2,039,795			1,967,931		2.7		6.4
Shareholders' equity:
Common stock		73,749			75,957			77,464		(2.9	)	(4.8	)
Additional paid-in capital		11,441			11,240			10,297		1.8		11.1
Retained earnings		127,929			124,280			114,177		2.9		12.0
Accumulated other comprehensive loss		(17,213	)		(16,752	)		(18,168	)	2.8		(5.3	)
Total shareholders’ equity		195,906			194,725			183,770		0.6		6.6
Total liabilities and shareholders' equity	$	2,290,680		$	2,234,520		$	2,151,701		2.5	%	6.5	%

CONSOLIDATED STATEMENTS OF INCOME (unaudited)


($ in thousands, except share and per share data)	For the Three Months Ended						% Change 2Q2024 vs.
($ in thousands, except share and per share data)		2Q2024		1Q2024		2Q2023	1Q2024		2Q2023
Interest income
Interest and fees on loans	$	30,605	$	30,142	$	27,288	1.5	%	12.2	%
Interest on available-for-sale debt securities		1,590		1,460		1,562	8.9		1.8
Other interest income		2,162		1,311		1,252	64.9		72.7
Total interest income		34,357		32,913		30,102	4.4		14.1
Interest expense
Interest on deposits		17,343		15,675		11,920	10.6		45.5
Interest on borrowings		820		1,259		930	(34.9	)	(11.8	)%
Total interest expense		18,163		16,934		12,850	7.3		41.3
Net interest income		16,194		15,979		17,252	1.3		(6.1	)
Provision for credit losses		617		145		—	325.5		n/m
Net interest income after provision for credit losses		15,577		15,834		17,252	(1.6	)	(9.7	)
Noninterest income
Service charges on deposits		793		612		573	29.6		38.4
Loan servicing fees, net of amortization		575		772		595	(25.5	)	(3.4	)
Gain on sale of loans		2,325		1,703		2,098	36.5		10.8
Other income		491		499		339	(1.6	)	44.8
Total noninterest income		4,184		3,586		3,605	16.7		16.1
Noninterest expense
Salaries and employee benefits		7,568		7,841		7,681	(3.5	)	(1.5	)
Occupancy and equipment		1,660		1,655		1,598	0.3		3.9
Data processing and communication		530		487		546	8.8		(2.9	)
Professional fees		406		395		381	2.8		6.6
FDIC insurance and regulatory assessments		378		374		420	1.1		(10.0	)
Promotion and advertising		151		149		159	1.3		(5.0	)
Directors’ fees		178		157		210	13.4		(15.2	)
Foundation donation and other contributions		539		540		594	(0.2	)	(9.3	)
Other expenses		779		559		711	39.4		9.6
Total noninterest expense		12,189		12,157		12,300	0.3		(0.9	)
Income before income tax expense		7,572		7,263		8,557	4.3		(11.5	)
Income tax expense		2,136		2,037		2,466	4.9		(13.4	)
Net income	$	5,436	$	5,226	$	6,091	4.0	%	(10.8	)%

Book value per share	$	13.22	$	13.00	$	12.16	1.7	%	8.7	%
Earnings per share - basic		0.36		0.34		0.39	5.9		(7.7	)
Earnings per share - diluted		0.36		0.34		0.39	5.9		(7.7	)

Shares of common stock outstanding, at period end		14,816,281		14,982,555		15,118,268	(1.1	)%	(2.0	)%
Weighted average shares:
- Basic		14,868,344		14,991,835		15,158,365	(0.8	)%	(1.9	)%
- Diluted		14,868,344		14,991,835		15,169,794	(0.8	)	(2.0	)

KEY RATIOS


	For the Three Months Ended						% Change 2Q2024 vs.
	2Q2024		1Q2024		2Q2023		1Q2024		2Q2023
Return on average assets (ROA)⁽¹⁾	0.95	%	0.96	%	1.15	%	—	%	(0.2	)%
Return on average equity (ROE)⁽¹⁾	11.23		10.83		13.27		0.4		(2.0	)
Net interest margin⁽¹⁾	2.96		3.06		3.40		(0.1	)	(0.4	)
Efficiency ratio	59.81		62.14		58.97		(2.3	)	0.8

Total risk-based capital ratio	13.26	%	13.59	%	13.10	%	(0.3	)%	0.2	%
Tier 1 risk-based capital ratio	12.01		12.34		11.92		(0.3	)	0.1
Common equity tier 1 ratio	12.01		12.34		11.92		(0.3	)	0.1
Leverage ratio	9.28		9.65		9.50		(0.4	)	(0.2	)

(1)

Annualized.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)


($ in thousands, except share and per share data)	For the Six Months Ended
($ in thousands, except share and per share data)		2Q2024		2Q2023		% Change
Interest income
Interest and fees on loans	$	60,747	$	53,299		14.0	%
Interest on available-for-sale debt securities		3,050		3,128		(2.5	)
Other interest income		3,473		2,269		53.1
Total interest income		67,270		58,696		14.6
Interest expense
Interest on deposits		33,018		22,302		48.0
Interest on borrowings		2,079		1,250		66.3
Total interest expense		35,097		23,552		49.0
Net interest income		32,173		35,144		(8.5	)
Provision for (reversal of) credit losses		762		(338	)	n/m
Net interest income after provision for credit losses		31,411		35,482		(11.5	)
Noninterest income
Service charges on deposits		1,405		991		41.8	%
Loan servicing fees, net of amortization		1,347		1,441		(6.5	)
Gain on sale of loans		4,028		4,668		(13.7	)
Other income		990		800		23.8
Total noninterest income		7,770		7,900		(1.6	)
Noninterest expense
Salaries and employee benefits		15,409		14,933		3.2
Occupancy and equipment		3,315		3,168		4.6
Data processing and communication		1,017		1,096		(7.2	)
Professional fees		801		740		8.2
FDIC insurance and regulatory assessments		752		887		(15.2	)
Promotion and advertising		300		321		(6.5	)
Directors’ fees		335		371		(9.7	)
Foundation donation and other contributions		1,079		1,347		(19.9	)
Other expenses		1,338		1,345		(0.5	)
Total noninterest expense		24,346		24,208		0.6
Income before income tax expense		14,835		19,174		(22.6	)
Income tax expense		4,173		5,549		(24.8	)
Net income	$	10,662	$	13,625		(21.7	)%

Book value per share	$	13.22	$	12.16		8.7	%
Earnings per share - basic		0.70		0.88		(20.5	)
Earnings per share - diluted		0.70		0.88		(20.5	)

Shares of common stock outstanding, at period end		14,816,281		15,118,268		(2.0	)%
Weighted average shares:
- Basic		14,930,090		15,221,010		(1.9	)%
- Diluted		14,930,090		15,241,903		(2.0	)

KEY RATIOS


	For the Six Months Ended
	2Q2024		2Q2023		% Change
Return on average assets (ROA)⁽¹⁾	0.96	%	1.29	%	(0.3	)%
Return on average equity (ROE)⁽¹⁾	11.03		15.02		(4.0	)
Net interest margin⁽¹⁾	3.01		3.48		(0.5	)
Efficiency ratio	60.95		56.24		4.7

Total risk-based capital ratio	13.26	%	13.10	%	0.2	%
Tier 1 risk-based capital ratio	12.01		11.92		0.1
Common equity tier 1 ratio	12.01		11.92		0.1
Leverage ratio	9.28		9.50		(0.2	)

(1)

Annualized.

ASSET QUALITY


($ in thousands)	As of and For the Three Months Ended
($ in thousands)		2Q2024			1Q2024			2Q2023
Nonaccrual loans⁽¹⁾	$	4,389		$	4,343		$	3,447
Loans 90 days or more past due, accruing⁽²⁾		—			—			—
Nonperforming loans		4,389			4,343			3,447
OREO		1,237			1,237			—
Nonperforming assets	$	5,626		$	5,580		$	3,447

Criticized loans by risk categories:
Special mention loans	$	3,339		$	1,415		$	2,909
Classified loans⁽¹⁾⁽³⁾		13,089			10,149			4,629
Total criticized loans	$	16,428		$	11,564		$	7,538

Criticized loans by loan type:
CRE loans	$	5,896		$	5,292		$	—
SBA loans		9,771			6,055			4,784
C&I loans		550			—			200
Home mortgage loans		211			217			2,554
Total criticized loans	$	16,428		$	11,564		$	7,538

Nonperforming loans / gross loans		0.23	%		0.24	%		0.20	%
Nonperforming assets / gross loans plus OREO		0.30			0.31			0.20
Nonperforming assets / total assets		0.25			0.25			0.16
Classified loans / gross loans		0.70			0.56			0.27
Criticized loans / gross loans		0.88			0.64			0.44

Allowance for credit losses ratios:
As a % of gross loans		1.22	%		1.23	%		1.21	%
As a % of nonperforming loans		519			510			603
As a % of nonperforming assets		405			397			603
As a % of classified loans		174			218			449
As a % of criticized loans		139			191			276

Net charge-offs (recoveries)	$	(4	)	$	57		$	12
Net charge-offs (recoveries)⁽⁴⁾ to average gross loans⁽⁵⁾		(0.00	)%		0.01	%		0.00	%

(1)		Excludes the guaranteed portion of SBA loans that are in liquidation totaling $3.5 million, $3.1 million and $5.1 million as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
(2)		Excludes the guaranteed portion of SBA loans that are in liquidation totaling $246 thousand as of June 30, 2023.
(3)		Consists of substandard, doubtful and loss categories.
(4)		Annualized.
(5)		Includes loans held for sale.


($ in thousands)		2Q2024		1Q2024		2Q2023
Accruing delinquent loans 30-89 days past due
30-59 days	$	3,774	$	801	$	3,647
60-89 days		2,878		3,103		1,568
Total	$	6,652	$	3,904	$	5,215

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS


	For the Three Months Ended
	2Q2024						1Q2024						2Q2023
($ 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	$	135,984	$	1,847	5.37	%	$	73,047	$	989	5.35	%	$	79,200	$	1,003	5.01	%
Federal funds sold and other investments		16,307		315	7.72			16,265		322	7.92			15,374		249	6.46
Available-for-sale debt securities, at fair value		195,512		1,590	3.25			191,383		1,460	3.05			209,801		1,562	2.98
CRE loans		908,073		13,742	6.09			901,262		13,729	6.13			838,526		11,823	5.66
SBA loans		259,649		7,116	11.02			259,368		7,213	11.19			262,825		7,174	10.95
C&I loans		172,481		3,367	7.85			134,893		2,670	7.96			114,103		2,232	7.85
Home mortgage loans		501,862		6,348	5.06			512,023		6,495	5.07			508,976		6,043	4.75
Consumer loans		1,219		32	10.44			1,386		35	10.10			1,334		16	4.77
Loans⁽²⁾		1,843,284		30,605	6.67			1,808,932		30,142	6.69			1,725,764		27,288	6.34
Total interest-earning assets		2,191,087		34,357	6.29			2,089,627		32,913	6.32			2,030,139		30,102	5.94
Noninterest-earning assets		89,446						87,586						84,991
Total assets	$	2,280,533					$	2,177,213					$	2,115,130

Interest-bearing liabilities:
Money market deposits and others	$	338,554	$	3,494	4.15	%	$	367,386	$	3,940	4.31	%	$	357,517	$	3,201	3.59	%
Time deposits		1,102,587		13,849	5.05			954,442		11,735	4.94			843,836		8,719	4.14
Total interest-bearing deposits		1,441,141		17,343	4.84			1,321,828		15,675	4.77			1,201,353		11,920	3.98
Borrowings		77,314		820	4.27			108,681		1,259	4.66			82,586		930	4.52
Total interest-bearing liabilities		1,518,455		18,163	4.81			1,430,509		16,934	4.76			1,283,939		12,850	4.01
Noninterest-bearing liabilities:
Noninterest-bearing deposits		529,179						514,503						615,748
Other noninterest-bearing liabilities		39,301						39,207						31,810
Total noninterest-bearing liabilities		568,480						553,710						647,558
Shareholders’ equity		193,598						192,994						183,633
Total liabilities and shareholders’ equity	$	2,280,533						2,177,213						2,115,130

Net interest income / interest rate spreads			$	16,194	1.48	%			$	15,979	1.56	%			$	17,252	1.93	%
Net interest margin					2.96	%					3.06	%					3.40	%

Cost of deposits & cost of funds:
Total deposits / cost of deposits	$	1,970,320	$	17,343	3.54	%	$	1,836,331	$	15,675	3.43	%	$	1,817,101	$	11,920	2.63	%
Total funding liabilities / cost of funds		2,047,634		18,163	3.57			1,945,012		16,934	3.50			1,899,687		12,850	2.71

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


	For the Six Months Ended
	2Q2024						2Q2023
($ in thousands)	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	$	104,515	$	2,836	5.37	%	$	76,695	$	1,849	4.79	%
Federal funds sold and other investments		16,286		637	7.82			13,761		420	6.10
Available-for-sale debt securities, at fair value		193,448		3,050	3.15			210,130		3,128	2.98
CRE loans		904,667		27,471	6.11			839,459		23,002	5.53
SBA loans		259,508		14,329	11.10			268,823		14,156	10.62
C&I loans		153,687		6,037	7.90			117,988		4,432	7.58
Home mortgage loans		506,943		12,843	5.07			497,949		11,676	4.69
Consumer & other loans		1,303		67	10.26			1,360		33	4.92
Loans⁽²⁾		1,826,108		60,747	6.68			1,725,579		53,299	6.22
Total interest-earning assets		2,140,357		67,270	6.31			2,026,165		58,696	5.83
Noninterest-earning assets		88,516						83,771
Total assets	$	2,228,873					$	2,109,936

Interest-bearing liabilities:
Money market deposits and others	$	352,970	$	7,434	4.24	%	$	383,521	$	6,351	3.34	%
Time deposits		1,028,515		25,584	5.00			815,267		15,952	3.95
Total interest-bearing deposits		1,381,485		33,018	4.81			1,198,788		22,303	3.75
Borrowings		92,998		2,079	4.50			54,533		1,249	4.62
Total interest-bearing liabilities		1,474,483		35,097	4.79			1,253,321		23,552	3.79
Noninterest-bearing liabilities:
Noninterest-bearing deposits		521,841						643,465
Other noninterest-bearing liabilities		39,253						31,729
Total noninterest-bearing liabilities		561,094						675,194
Shareholders’ equity		193,296						181,421
Total liabilities and shareholders’ equity	$	2,228,873						2,109,936

Net interest income / interest rate spreads			$	32,173	1.52	%			$	35,144	2.04	%
Net interest margin					3.01	%					3.48	%

Cost of deposits & cost of funds:
Total deposits / cost of deposits	$	1,903,326	$	33,018	3.49	%		1,842,253	$	22,303	2.44	%
Total funding liabilities / cost of funds		1,996,324		35,097	3.54			1,896,786		23,552	2.50

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725607933/en/

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Investor Relations

OP Bancorp

Christine Oh

EVP & CFO

213.892.1192

Christine.oh@myopenbank.com

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OP Bancorp Reports Net Income for 2024 Second Quarter of $5.4 Million and Diluted Earnings Per Share of $0.36

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