OP Bancorp Reports Net Income for 2024 Fourth Quarter of $5.0 Million and Diluted Earnings Per Share of $0.33
2024 Fourth Quarter Highlights compared with 2024 Third Quarter:
- Financial Results:
- Net income of $5.0 million, compared to $5.4 million
- Diluted earnings per share of $0.33, compared to $0.36
- Net interest income of $16.9 million, compared to $16.5 million
- Net interest margin of 2.96%, compared to 2.95%
- Provision for credit losses of $1.5 million, compared to $448 thousand
- Total assets of $2.37 billion, compared to $2.39 billion
- Gross loans of $1.96 billion, compared to $1.93 billion
- Total deposits of $2.03 billion, compared to $2.06 billion
- Credit Quality:
- Allowance for credit losses to gross loans of 1.27%, compared to 1.19%
- Net charge-offs(1) to average gross loans(2) of 0.00%, compared to 0.01%
- Loans past due 30-89 days to gross loans of 0.46%, compared to 0.53%
- Nonperforming loans to gross loans of 0.40%, compared to 0.19%
- Criticized loans(3) to gross loans of 1.00%, compared to 0.85%
- Capital Levels:
- Remained well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 11.35%
- Book value per common share increased to $13.83, compared to $13.75
- Paid quarterly cash dividend of $0.12 per share for the periods
___________________________________________________________
(1) Annualized.
(2) Includes loans held for sale.
(3) Includes Special Mention, Substandard, Doubtful, and Loss categories.
LOS ANGELES–(BUSINESS WIRE)–
OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported its financial results for the fourth quarter of 2024. Net income for the fourth quarter of 2024 was $5.0 million, or $0.33 per diluted common share, compared with $5.4 million, or $0.36 per diluted common share, for the third quarter of 2024, and $5.2 million, or $0.34 per diluted common share, for the fourth quarter of 2023.
Min Kim, President and Chief Executive Officer:
“We are continuing to experience the effects of uncertainty in the financial markets providing challenges in increasing customer deposits and lowering costs of deposit,” said Min Kim, President and Chief Executive. “We continue to see slightly elevated levels of classified loans, and we have responded prudently to managing these assets. We are also paying careful attention to those of our customers and employees who have been affected by the unprecedented wildfires in the Los Angeles basin, and we express our deepest condolences to all of those who have lost homes, businesses or jobs, or who have been affected by these disasters. We look forward to opportunities to assist in the recovery of the affected communities.”
SELECTED FINANCIAL HIGHLIGHTS
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($ in thousands, except per share data) |
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As of and For the Quarter |
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% Change 4Q2024 vs. |
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4Q2024 |
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3Q2024 |
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4Q2023 |
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3Q2024 |
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4Q2023 |
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Selected Income Statement Data: |
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Net interest income |
|
$ |
16,929 |
|
|
$ |
16,506 |
|
|
$ |
16,230 |
|
|
2.6 |
% |
|
4.3 |
% |
|
Provision for credit losses |
|
|
1,547 |
|
|
|
448 |
|
|
|
630 |
|
|
245.3 |
|
|
145.6 |
|
|
Noninterest income |
|
|
4,417 |
|
|
|
4,240 |
|
|
|
3,680 |
|
|
4.2 |
|
|
20.0 |
|
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Noninterest expense |
|
|
13,133 |
|
|
|
12,720 |
|
|
|
11,983 |
|
|
3.2 |
|
|
9.6 |
|
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Income tax expense |
|
|
1,695 |
|
|
|
2,142 |
|
|
|
2,125 |
|
|
(20.9 |
) |
|
(20.2 |
) |
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Net income |
|
|
4,971 |
|
|
|
5,436 |
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|
5,172 |
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(8.6 |
) |
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(3.9 |
) |
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Diluted earnings per share |
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0.33 |
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|
0.36 |
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|
0.34 |
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(8.3 |
) |
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(2.9 |
) |
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Selected Balance Sheet Data: |
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Gross loans |
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$ |
1,956,852 |
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$ |
1,931,007 |
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$ |
1,765,845 |
|
|
1.3 |
% |
|
10.8 |
% |
|
Total deposits |
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2,027,285 |
|
|
|
2,064,603 |
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|
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1,807,558 |
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(1.8 |
) |
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12.2 |
|
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Total assets |
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2,366,013 |
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|
|
2,387,980 |
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|
|
2,147,730 |
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(0.9 |
) |
|
10.2 |
|
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Average loans(1) |
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1,947,653 |
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|
|
1,905,952 |
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|
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1,787,540 |
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2.2 |
|
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9.0 |
|
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Average deposits |
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2,029,855 |
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1,998,633 |
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1,813,411 |
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1.6 |
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11.9 |
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Credit Quality: |
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Nonperforming loans |
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$ |
7,820 |
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$ |
3,620 |
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$ |
6,082 |
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|
116.0 |
% |
|
28.6 |
% |
|
Nonperforming loans to gross loans |
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|
0.40 |
% |
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0.19 |
% |
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|
0.34 |
% |
|
0.21 |
|
|
0.06 |
|
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Criticized loans(2) to gross loans |
|
|
1.00 |
|
|
|
0.85 |
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|
|
0.76 |
|
|
0.15 |
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|
0.24 |
|
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Net charge-offs(3) to average gross loans(1) |
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|
0.00 |
|
|
|
0.01 |
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|
|
0.04 |
|
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(0.01 |
) |
|
(0.04 |
) |
|
Allowance for credit losses to gross loans |
|
|
1.27 |
|
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|
1.19 |
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|
1.25 |
|
|
0.08 |
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|
0.02 |
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Allowance for credit losses to nonperforming loans |
|
|
317 |
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|
|
634 |
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|
362 |
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(317.00 |
) |
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(45.00 |
) |
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Financial Ratios: |
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Return on average assets(3) |
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0.84 |
% |
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0.94 |
% |
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0.96 |
% |
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(0.10 |
)% |
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(0.12 |
)% |
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Return on average equity(3) |
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9.75 |
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|
10.95 |
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11.18 |
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(1.20 |
) |
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(1.43 |
) |
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Net interest margin(3) |
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|
2.96 |
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|
|
2.95 |
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|
|
3.12 |
|
|
0.01 |
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(0.16 |
) |
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Efficiency ratio(4) |
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61.52 |
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|
|
61.31 |
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|
|
60.19 |
|
|
0.21 |
|
|
1.33 |
|
|
Common equity tier 1 capital ratio |
|
|
11.35 |
|
|
|
11.57 |
|
|
|
12.52 |
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(0.22 |
) |
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(1.17 |
) |
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Leverage ratio |
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|
9.27 |
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|
|
9.30 |
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|
|
9.57 |
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(0.03 |
) |
|
(0.30 |
) |
|
Book value per common share |
|
$ |
13.83 |
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$ |
13.75 |
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$ |
12.84 |
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0.6 |
|
|
7.7 |
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| (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
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($ in thousands) |
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For the Three Months Ended |
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% Change 4Q2024 vs. |
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4Q2024 |
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3Q2024 |
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4Q2023 |
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3Q2024 |
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4Q2023 |
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Interest Income |
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Interest income |
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$ |
35,051 |
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$ |
35,299 |
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$ |
31,783 |
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(0.7 |
)% |
|
10.3 |
% |
|
Interest expense |
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|
18,122 |
|
|
18,793 |
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|
15,553 |
|
(3.6 |
) |
|
16.5 |
|
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Net interest income |
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$ |
16,929 |
|
$ |
16,506 |
|
$ |
16,230 |
|
2.6 |
% |
|
4.3 |
% |
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($ in thousands) |
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For the Three Months Ended |
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Yield Change |
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|
4Q2024 |
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3Q2024 |
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4Q2023 |
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||||||||||||||||||
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Interest and Fees |
|
Yield/Rate(1) |
|
Interest and Fees |
|
Yield/Rate(1) |
|
Interest and Fees |
|
Yield/Rate(1) |
|
3Q2024 |
|
4Q2023 |
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|
Interest-earning Assets: |
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Loans |
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$ |
31,729 |
|
6.49 |
% |
|
$ |
31,885 |
|
6.66 |
% |
|
$ |
28,914 |
|
6.43 |
% |
|
(0.17 |
)% |
|
0.06 |
% |
|
Total interest-earning assets |
|
|
35,051 |
|
6.12 |
|
|
|
35,299 |
|
6.30 |
|
|
|
31,783 |
|
6.10 |
|
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(0.18 |
) |
|
0.02 |
|
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Interest-bearing Liabilities: |
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Interest-bearing deposits |
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|
17,182 |
|
4.60 |
|
|
|
17,921 |
|
4.85 |
|
|
|
14,127 |
|
4.51 |
|
|
(0.25 |
) |
|
0.09 |
|
|
Total interest-bearing liabilities |
|
|
18,122 |
|
4.58 |
|
|
|
18,793 |
|
4.82 |
|
|
|
15,553 |
|
4.53 |
|
|
(0.24 |
) |
|
0.05 |
|
|
Ratios: |
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Net interest income / interest rate spreads |
|
|
16,929 |
|
1.54 |
|
|
|
16,506 |
|
1.48 |
|
|
|
16,230 |
|
1.57 |
|
|
0.06 |
|
|
(0.03 |
) |
|
Net interest margin |
|
|
|
2.96 |
|
|
|
|
2.95 |
|
|
|
|
3.12 |
|
|
0.01 |
|
|
(0.16 |
) |
|||
|
Total deposits / cost of deposits |
|
|
17,182 |
|
3.37 |
|
|
|
17,921 |
|
3.57 |
|
|
|
14,127 |
|
3.09 |
|
|
(0.20 |
) |
|
0.28 |
|
|
Total funding liabilities / cost of funds |
|
|
18,122 |
|
3.41 |
|
|
|
18,793 |
|
3.60 |
|
|
|
15,553 |
|
3.19 |
|
|
(0.19 |
) |
|
0.22 |
|
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|
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||||||||
| (1) |
Annualized. |
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|||||||||||
|
($ in thousands) |
|
For the Three Months Ended |
|
Yield Change |
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|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
|||||||||||||||||||||
|
|
Interest & Fees |
|
Yield(1) |
|
Interest & Fees |
|
Yield(1) |
|
Interest & Fees |
|
Yield(1) |
|
3Q2024 |
|
4Q2023 |
||||||||||||
|
Loan Yield Component: |
|
|
|
|
|
|
|
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|
|
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|
|||||||||||
|
Contractual interest rate |
|
$ |
31,406 |
|
|
6.42 |
% |
|
$ |
31,182 |
|
|
6.52 |
% |
|
$ |
28,596 |
|
|
6.36 |
% |
|
(0.10 |
)% |
|
0.06 |
% |
|
Accretion of SBA loan discount(2) |
|
|
813 |
|
|
0.17 |
|
|
|
918 |
|
|
0.19 |
|
|
|
960 |
|
|
0.21 |
|
|
(0.02 |
) |
|
(0.04 |
) |
|
Amortization of net deferred fees |
|
|
(47 |
) |
|
(0.01 |
) |
|
|
23 |
|
|
— |
|
|
|
(67 |
) |
|
-0.01 |
|
|
(0.01 |
) |
|
— |
|
|
Amortization of premium |
|
|
(363 |
) |
|
(0.07 |
) |
|
|
(487 |
) |
|
(0.10 |
) |
|
|
(423 |
) |
|
(0.09 |
) |
|
0.03 |
|
|
0.02 |
|
|
Net interest recognized on nonaccrual loans |
|
|
(232 |
) |
|
(0.05 |
) |
|
|
(61 |
) |
|
(0.01 |
) |
|
|
(345 |
) |
|
(0.08 |
) |
|
(0.04 |
) |
|
0.03 |
|
|
Prepayment penalty income and other fees(3) |
|
|
152 |
|
|
0.03 |
|
|
|
310 |
|
|
0.06 |
|
|
|
193 |
|
|
0.04 |
|
|
(0.03 |
) |
|
(0.01 |
) |
|
Yield on loans |
|
$ |
31,729 |
|
|
6.49 |
% |
|
$ |
31,885 |
|
|
6.66 |
% |
|
$ |
28,914 |
|
|
6.43 |
% |
|
(0.17 |
)% |
|
0.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|||||||||||
| (1) |
Annualized. |
| (2) |
Includes discount accretion from SBA loan payoffs of $329 thousand, $426 thousand and $413 thousand for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. |
| (3) |
Includes prepayment penalty income of $45 thousand, $114 thousand and $43 thousand for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, from Commercial Real Estate (“CRE”) loans. |
Fourth Quarter 2024 vs. Third Quarter 2024
Net interest income increased $423 thousand, or 2.6%, primarily due to lower interest expense on interest-bearing deposits, partially offset by lower interest income on loans as our deposit costs repriced faster than our loan yields following the Federal Reserve’s rate cuts from September 2024. Net interest margin was 2.96%, an increase of 1 basis point from 2.95%.
- A $739 thousand decrease in interest expense on interest-bearing deposits was primarily due to a 25 basis point decrease in average cost.
- A 156 thousand decrease in interest income on loans was primarily due to a 17 basis point decrease in average yield.
Fourth Quarter 2024 vs. Fourth Quarter 2023
Net interest income increased $699 thousand, or 4.3%, as higher interest income from a $206.4 million, or 10.0%, increase in average earning assets (loans and interest-bearing deposits in other banks) surpassed higher interest expense from a $210.6 million, or 15.5%, increase in average interest-bearing liabilities (deposits and borrowings). Net interest margin, however, decreased 16 basis points to 2.96% from 3.12%, primarily due to a faster increase in average interest-bearing liabilities over average earnings assets and a faster repricing in deposits costs over loan yields.
- A $2.8 million increase in interest income on loans was primarily due to a $160.1 million, or 9.0%, increase in average balance and a 6 basis point increase in average yield.
- A $380 thousand increase in interest income on interest-bearing deposits in other banks was primarily due to a $41.7 million, or 53.1%, increase in average balance.
- A $3.1 million increase in interest expense on interest-bearing deposits was primarily due to a $242.9 million, or 19.5%, increase in average balance and a 9 basis point increase in average cost.
- A $486 thousand decrease in interest expense on borrowings was primarily due to a $32 million, or 27.1%, decrease in average balance and a 44 basis point decrease in average cost.
Provision for Credit Losses
|
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|
|
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|
||||
|
($ in thousands) |
|
For the Three Months Ended |
||||||||
|
|
|
4Q2024 |
|
|
3Q2024 |
|
4Q2023 |
|||
|
Provision for credit losses on loans |
|
$ |
1,859 |
|
|
$ |
234 |
|
$ |
537 |
|
Provision for (reversal of) credit losses on off-balance sheet exposure |
|
|
(312 |
) |
|
|
214 |
|
|
93 |
|
Total provision for credit losses |
|
$ |
1,547 |
|
|
$ |
448 |
|
$ |
630 |
|
|
|
|
|
|
|
|
||||
Fourth Quarter 2024 vs. Third Quarter 2024
The Company recorded $1.5 million in total provision for credit losses, an increase of $1.1 million, compared with $448 thousand, , reflecting an ongoing period of relatively elevated interest rates and the related impacts on our customers and on the values of the collateral securing our loans. Provision for credit losses on loans increased $1.6 million and provision for credit losses on off-balance sheet exposure decreased $526 thousand.
Provision for credit losses on loans of $1.9 million was due to a $1.5 million increase in qualitative reserves, and a $810 thousand increase in specific reserves, partially offset by a $439 thousand decrease in general reserves.
- The increase in qualitative reserves was primarily due to changes in the Bank’s asset quality metrics and a decrease in CRE value indices.
- The increase in specific reserves was primarily due to two SBA relationships.
- The decrease in general reserves was primarily due to a decrease in average life of home mortgage loans, partially offset by an increase from loan growth.
Reversal of credit losses on off-balance sheet exposure of $312 thousand was primarily due to a change in calculation method for revolving accounts using expected funding amount instead of unfunded commitment amount.
Fourth Quarter 2024 vs. Fourth Quarter 2023
The Company recorded $1.5 million in total provision for credit losses, an increase of $917 thousand, compared with $630 thousand. Provision for credit losses on loans increased $1.3 million and provision for credit losses on off-balance sheet exposure decreased $405 thousand.
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
($ in thousands) |
|
For the Three Months Ended |
|
% Change 4Q2024 vs. |
|||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|||||
|
Service charges on deposits |
|
$ |
967 |
|
$ |
889 |
|
$ |
557 |
|
8.8 |
% |
|
73.6 |
% |
|
Loan servicing fees, net of amortization |
|
|
858 |
|
|
693 |
|
|
540 |
|
23.8 |
|
|
58.9 |
|
|
Gain on sale of loans |
|
|
2,197 |
|
|
2,088 |
|
|
1,996 |
|
5.2 |
|
|
10.1 |
|
|
Other income |
|
|
395 |
|
|
570 |
|
|
587 |
|
(30.7 |
) |
|
(32.7 |
) |
|
Total noninterest income |
|
$ |
4,417 |
|
$ |
4,240 |
|
$ |
3,680 |
|
4.2 |
% |
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fourth Quarter 2024 vs. Third Quarter 2024
Noninterest income increased $177 thousand, or 4.2%, primarily due to higher loan servicing fees and gain on sale of loans, partially offset by lower other income.
- Loan servicing fees, net of amortization, were $858 thousand, an increase of $165 thousand from $693 thousand, primarily due to a decrease in servicing fee amortization driven by lower loan payoffs in loan servicing portfolio.
- Gain on sale of loans was $2.2 million, an increase of $109 thousand from $2.1 million, primarily due to a higher average premium on sales. The Bank sold $34.7 million in SBA loans at an average premium rate of 7.82%, compared to the sale of $35.6 million at an average premium rate of 7.30%.
- Other income was $395 thousand, a decrease of $175 thousand from $570 thousand, primarily due to an increase in unrealized loss of CRA-qualified mutual funds driven by market interest rate changes.
Fourth Quarter 2024 vs. Fourth Quarter 2023
Noninterest income increased $737 thousand, or 20.0%, primarily due to higher service charges on deposits, loan servicing fees and gain on sale of loans, offset by lower other income.
- Service charges on deposits were $967 thousand, an increase of $410 thousand from $557 thousand, primarily due to an increase in deposit analysis fees from an increase in the number of analysis accounts.
- Loan servicing fees were $858 thousand, an increase of $318 thousand from $540 thousand, primarily due to a decrease in servicing fee amortization driven by lower loan payoffs in loan servicing portfolio.
- Gain on sale of loans was $2.2 million, an increase of $201 thousand from $2.0 million, primarily due to a higher average premium rate, partially offset by lower sold amount. The Bank sold $34.7 million in SBA loans at an average premium rate of 7.82%, compared to the sale of $40.1 million at an average premium rate of 5.99%.
- Other income was $395 thousand, a decrease of $192 thousand from $587 thousand, primarily due to an increase in unrealized loss of CRA-qualified mutual fund driven by market interest rate changes.
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
($ in thousands) |
|
For the Three Months Ended |
|
% Change 4Q2024 vs. |
|||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|||||
|
Salaries and employee benefits |
|
$ |
8,277 |
|
$ |
8,031 |
|
$ |
7,646 |
|
3.1 |
% |
|
8.3 |
% |
|
Occupancy and equipment |
|
|
1,682 |
|
|
1,676 |
|
|
1,616 |
|
0.4 |
|
|
4.1 |
|
|
Data processing and communication |
|
|
594 |
|
|
634 |
|
|
644 |
|
(6.3 |
) |
|
(7.8 |
) |
|
Professional fees |
|
|
388 |
|
|
346 |
|
|
391 |
|
12.1 |
|
|
(0.8 |
) |
|
FDIC insurance and regulatory assessments |
|
|
529 |
|
|
391 |
|
|
237 |
|
35.3 |
|
|
123.2 |
|
|
Promotion and advertising |
|
|
82 |
|
|
151 |
|
|
86 |
|
(45.7 |
) |
|
(4.7 |
) |
|
Directors’ fees |
|
|
151 |
|
|
154 |
|
|
145 |
|
(1.9 |
) |
|
4.1 |
|
|
Foundation donation and other contributions |
|
|
480 |
|
|
549 |
|
|
524 |
|
(12.6 |
) |
|
(8.4 |
) |
|
Other expenses |
|
|
950 |
|
|
788 |
|
|
694 |
|
20.6 |
|
|
36.9 |
|
|
Total noninterest expense |
|
$ |
13,133 |
|
$ |
12,720 |
|
$ |
11,983 |
|
3.2 |
% |
|
9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fourth Quarter 2024 vs. Third Quarter 2024
Noninterest expense increased $413 thousand, or 3.2%, primarily due to higher salaries and employee benefits, other expenses, and FDIC insurance and regulatory assessments.
- Salaries and employee benefits increased $246 thousand, primarily due to increases in employee incentive accruals.
- Other expenses increased $162 thousand, primarily due to an increase in customer services expenses related to the increase in the number of analysis accounts.
- FDIC insurance and regulatory assessments increased $138 thousand, primarily due to year end accrual adjustments.
Fourth Quarter 2024 vs. Fourth Quarter 2023
Noninterest expense increased $1.2 million, or 9.6%, primarily due to higher salaries and employee benefits, FDIC insurance and regulatory assessments, and other expenses.
- Salaries and employee benefits increased $631 thousand, primarily due to increases in salaries and employee benefits as our number of employees increased to 231 from 222.
- FDIC insurance and regulatory assessments increased $292 thousand, primarily due to increases in assessment base and rate from our balance sheet growth and increased reliance on brokered deposits.
- Other expenses increased $256 thousand, primarily due to an increase in customer services expenses related to the increase in the number of analysis accounts.
Income Tax Expense
Fourth Quarter 2024 vs. Third Quarter 2024
Income tax expense was $1.7 million, or an effective tax rate of 25.4%, compared to income tax expense of $2.1 million, or an effective tax rate of 28.3%. The decrease in effective tax rate was primarily due to year-end provision adjustments for additional tax benefits from low income housing tax credit fund investments, and adjustments for differences between the prior year tax provision and the final tax returns that were applied in the quarter.
Fourth Quarter 2024 vs. Fourth Quarter 2023
Income tax expense was $1.7 million, resulting in an effective tax rate of 25.4%, compared to income tax expense of $2.1 million, resulting in an effective tax rate of 29.1%. The decrease in effective tax rate was primarily due to year-end provision adjustments for additional tax benefits from low income housing tax credit fund investments, and adjustments for differences between the prior year tax provision and the final tax returns that were applied in the quarter.
BALANCE SHEET HIGHLIGHTS
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
($ in thousands) |
|
As of |
|
% Change 4Q2024 vs. |
|||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
CRE loans |
|
$ |
980,247 |
|
$ |
966,472 |
|
$ |
885,585 |
|
1.4 |
% |
|
10.7 |
% |
|
SBA loans |
|
|
253,710 |
|
|
252,379 |
|
|
239,692 |
|
0.5 |
|
|
5.8 |
|
|
C&I loans |
|
|
213,097 |
|
|
212,476 |
|
|
120,970 |
|
0.3 |
|
|
76.2 |
|
|
Home mortgage loans |
|
|
509,524 |
|
|
499,666 |
|
|
518,024 |
|
2.0 |
|
|
(1.6 |
) |
|
Consumer & other loans |
|
|
274 |
|
|
14 |
|
|
1,574 |
|
1,857.1 |
|
|
(82.6 |
) |
|
Gross loans |
|
$ |
1,956,852 |
|
$ |
1,931,007 |
|
$ |
1,765,845 |
|
1.3 |
% |
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The following table presents new loan originations based on loan commitment amounts for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
($ in thousands) |
|
For the Three Months Ended |
|
% Change 4Q2024 vs. |
|||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
CRE loans |
|
$ |
64,827 |
|
$ |
68,525 |
|
$ |
15,885 |
|
(5.4 |
)% |
|
308.1 |
% |
|
SBA loans |
|
|
36,810 |
|
|
46,302 |
|
|
51,855 |
|
(20.5 |
) |
|
(29.0 |
) |
|
C&I loans |
|
|
7,783 |
|
|
27,771 |
|
|
15,270 |
|
(72.0 |
) |
|
(49.0 |
) |
|
Home mortgage loans |
|
|
17,937 |
|
|
10,105 |
|
|
12,417 |
|
77.5 |
|
|
44.5 |
|
|
Consumer & other loans |
|
|
— |
|
|
— |
|
|
1,500 |
|
— |
|
|
(100.0 |
) |
|
Gross loans |
|
$ |
127,357 |
|
$ |
152,703 |
|
$ |
96,927 |
|
(16.6 |
)% |
|
31.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The following table presents changes in gross loans by loan activity for the periods indicated:
|
|
|
|
|
|
|
|
||||||
|
($ in thousands) |
|
For the Three Months Ended |
||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
|
Loan Activities: |
|
|
|
|
|
|
||||||
|
Gross loans, beginning |
|
$ |
1,931,007 |
|
|
$ |
1,870,106 |
|
|
$ |
1,759,525 |
|
|
New originations |
|
|
127,357 |
|
|
|
152,703 |
|
|
|
96,927 |
|
|
Purchases |
|
|
— |
|
|
|
862 |
|
|
|
2,371 |
|
|
Sales |
|
|
(34,715 |
) |
|
|
(35,576 |
) |
|
|
(40,122 |
) |
|
Payoffs |
|
|
(48,456 |
) |
|
|
(29,642 |
) |
|
|
(23,590 |
) |
|
Paydowns |
|
|
(21,919 |
) |
|
|
(25,772 |
) |
|
|
(27,471 |
) |
|
Decrease (increase) in loans held for sale |
|
|
3,578 |
|
|
|
(1,674 |
) |
|
|
(1,795 |
) |
|
Total |
|
|
25,845 |
|
|
|
60,901 |
|
|
|
6,320 |
|
|
Gross loans, ending |
|
$ |
1,956,852 |
|
|
$ |
1,931,007 |
|
|
$ |
1,765,845 |
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2024 vs. September 30, 2024
Gross loans were $1.96 billion as of December 31, 2024, up $25.8 million from September 30, 2024, primarily due to new loan originations, partially offset by loan sales, payoffs and paydowns. New loan originations, loan sales, and loan payoffs and paydowns were $127.4 million, $34.7 million, and $70.4 million, respectively, for the fourth quarter of 2024, compared with $152.7 million, $35.6 million, and $55.4 million, respectively, for the third quarter of 2024.
As of December 31, 2024 vs. December 31, 2023
Gross loans were $1.96 billion as of December 31, 2024, up $191.0 million, from December 31, 2023, primarily due to an increase in new loan originations of $502.8 million, partially offset by loan sales of $127.2 million and loan payoffs and paydowns of $188.2 million.
The following table presents the composition of gross loans by interest rate type accompanied with the weighted average contractual rates as of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
($ in thousands) |
|
As of |
||||||||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|||||||||||||
|
|
% |
|
Rate |
|
% |
|
Rate |
|
% |
|
Rate |
|||||||
|
Fixed rate |
|
33.2 |
% |
|
5.44 |
% |
|
35.7 |
% |
|
5.42 |
% |
|
35.1 |
% |
|
5.07 |
% |
|
Hybrid rate |
|
37.0 |
|
|
5.66 |
|
|
34.7 |
|
|
5.60 |
|
|
33.9 |
|
|
5.15 |
|
|
Variable rate |
|
29.8 |
|
|
8.47 |
|
|
29.6 |
|
|
8.94 |
|
|
31.0 |
|
|
9.15 |
|
|
Gross loans |
|
100.0 |
% |
|
6.43 |
% |
|
100.0 |
% |
|
6.52 |
% |
|
100.0 |
% |
|
6.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The following table presents the maturity of gross loans by interest rate type accompanied with the weighted average contractual rates for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands) |
|
As of December 31, 2024 |
||||||||||||||||||||||
|
|
Within One Year |
|
One Year Through |
|
After Five Years |
|
Total |
|||||||||||||||||
|
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|||||||||
|
Fixed rate |
|
$ |
164,941 |
|
5.86 |
% |
|
$ |
276,216 |
|
5.45 |
% |
|
$ |
207,774 |
|
5.08 |
% |
|
$ |
648,931 |
|
5.44 |
% |
|
Hybrid rate |
|
|
— |
|
— |
|
|
|
210,510 |
|
4.44 |
|
|
|
513,438 |
|
6.17 |
|
|
|
723,948 |
|
5.66 |
|
|
Variable rate |
|
|
107,591 |
|
7.80 |
|
|
|
137,220 |
|
7.98 |
|
|
|
339,162 |
|
8.88 |
|
|
|
583,973 |
|
8.47 |
|
|
Gross loans |
|
$ |
272,532 |
|
6.63 |
% |
|
$ |
623,946 |
|
5.67 |
% |
|
$ |
1,060,374 |
|
6.82 |
% |
|
$ |
1,956,852 |
|
6.43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Credit Losses
The following table presents allowance for credit losses and provision for credit losses as of and for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
($ in thousands) |
|
As of and For the Three Months Ended |
|
Change 4Q2024 vs. |
||||||||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
|
Allowance for credit losses on loans, beginning |
|
$ |
22,960 |
|
|
$ |
22,760 |
|
|
$ |
21,617 |
|
|
$ |
200 |
|
|
$ |
1,343 |
|
|
Provision for credit losses |
|
|
1,859 |
|
|
|
234 |
|
|
|
537 |
|
|
|
1,625 |
|
|
|
1,322 |
|
|
Gross charge-offs |
|
|
(29 |
) |
|
|
(40 |
) |
|
|
(236 |
) |
|
|
11 |
|
|
|
207 |
|
|
Gross recoveries |
|
|
6 |
|
|
|
6 |
|
|
|
75 |
|
|
|
— |
|
|
|
(69 |
) |
|
Net charge-offs |
|
|
(23 |
) |
|
|
(34 |
) |
|
|
(161 |
) |
|
|
11 |
|
|
|
138 |
|
|
Allowance for credit losses on loans, ending |
|
$ |
24,796 |
|
|
$ |
22,960 |
|
|
$ |
21,993 |
|
|
$ |
1,836 |
|
|
$ |
2,803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Allowance for credit losses on off-balance sheet exposure, beginning |
|
$ |
672 |
|
|
$ |
458 |
|
|
$ |
423 |
|
|
$ |
214 |
|
|
$ |
249 |
|
|
Provision for (reversal of) credit losses |
|
|
(312 |
) |
|
|
214 |
|
|
|
93 |
|
|
|
(526 |
) |
|
|
(405 |
) |
|
Allowance for credit losses on off-balance sheet exposure, ending |
|
$ |
360 |
|
|
$ |
672 |
|
|
$ |
516 |
|
|
$ |
(312 |
) |
|
$ |
(156 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands) |
|
As of and For the Three Months Ended |
|
Change 4Q2024 vs. |
||||||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
3Q2024 |
|
4Q2023 |
|||
|
Loans 30-89 days past due and still accruing |
|
$ |
8,964 |
|
|
$ |
10,306 |
|
|
$ |
9,607 |
|
|
(13.0 |
)% |
|
(6.7 |
)% |
|
As a % of gross loans |
|
|
0.46 |
% |
|
|
0.53 |
% |
|
|
0.54 |
% |
|
(0.07 |
) |
|
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nonperforming loans(1) |
|
$ |
7,820 |
|
|
$ |
3,620 |
|
|
$ |
6,082 |
|
|
116.0 |
% |
|
28.6 |
% |
|
Nonperforming assets(1) |
|
|
9,057 |
|
|
|
4,857 |
|
|
|
6,082 |
|
|
86.5 |
|
|
48.9 |
|
|
Nonperforming loans to gross loans |
|
|
0.40 |
% |
|
|
0.19 |
% |
|
|
0.34 |
% |
|
0.21 |
|
|
0.06 |
|
|
Nonperforming assets to total assets |
|
|
0.38 |
|
|
|
0.20 |
|
|
|
0.28 |
|
|
0.18 |
|
|
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Criticized loans(1)(2) |
|
$ |
19,570 |
|
|
$ |
16,500 |
|
|
$ |
13,349 |
|
|
18.6 |
% |
|
46.6 |
% |
|
Criticized loans to gross loans |
|
|
1.00 |
% |
|
|
0.85 |
% |
|
|
0.76 |
% |
|
0.15 |
|
|
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Allowance for credit losses ratios: |
|
|
|
|
|
|
|
|
|
|
||||||||
|
As a % of gross loans |
|
|
1.27 |
% |
|
|
1.19 |
% |
|
|
1.25 |
% |
|
0.08 |
% |
|
0.02 |
% |
|
As a % of nonperforming loans |
|
|
317 |
|
|
|
634 |
|
|
|
362 |
|
|
(317 |
) |
|
(45 |
) |
|
As a % of nonperforming assets |
|
|
274 |
|
|
|
473 |
|
|
|
362 |
|
|
(199 |
) |
|
(88 |
) |
|
As a % of criticized loans |
|
|
127 |
|
|
|
139 |
|
|
|
165 |
|
|
(12 |
) |
|
(38 |
) |
|
Net charge-offs(3) to average gross loans(4) |
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
(0.01 |
) |
|
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) |
Excludes the guaranteed portion of SBA & USDA loans that are in liquidation totaling $16.3 million, $11.1 million and $2.0 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively. |
|
(2) |
Consists of Special Mention, Substandard, Doubtful and Loss categories. |
|
(3) |
Annualized. |
|
(4) |
Includes loans held for sale. |
Overall, the Bank continued to maintain low levels of nonperforming loans and net charge-offs. Our allowance remained strong with an allowance to gross loans ratio of 1.27%.
- Loans 30-89 days past due and still accruing were $9.0 million or 0.46% of gross loans as of December 31, 2024, compared with $10.3 million or 0.53% as of September 30, 2024.
- Nonperforming loans were $7.8 million or 0.40% of gross loans as of December 31, 2024, compared with $3.6 million or 0.19% as of September 30, 2024. The increase was mainly driven by three SBA relationships: one isolated fire damage to a hotel property in Tucson, AZ, which the Bank is working with the borrower through a temporary deferment during the repairs, and two separate relationships in apparel business, which the Bank is in the process of liquidating and in negotiation to sell the note to the tenant.
- Nonperforming assets were $9.1 million or 0.38% of total assets as of December 31, 2024, compared with $4.9 million or 0.20% as of September 30, 2024. OREO remained the same at $1.2 million as of December 31, 2024 and September 30, 2024, which is secured by a mix-use property in Los Angeles Koreatown with 90% guaranteed by SBA.
- Criticized loans were $19.6 million or 1.00% of gross loans as of December 31, 2024, compared with $16.5 million or 0.85% as of September 30, 2024.
- Net charge-offs were $23 thousand or 0.00% of average loans in the fourth quarter of 2024, compared to net charge-offs of $34 thousand, or 0.01% of average loans in the third quarter of 2024 and net charge-offs of $161 thousand, or 0.04% of average loans in the fourth quarter of 2023.
Los Angeles Wildfires Impact
The Company’s overall exposure from the Los Angeles wildfires is limited to $23.5 million (or 1.3% of net loans) based on zip code. Only three borrowers suffered direct impact from the wildfires, totaling $6.3 million in outstanding principal balance. Of the three borrowers, only two borrowers with combined outstanding principal balance of $2.2 million may require temporary loan payment adjustments. The Company will continue to monitor the loans to timely assess both direct and indirect impacts to the Company’s asset quality.
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands) |
|
As of |
|
% Change 4Q2024 vs. |
||||||||||||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
||||||||||||||||||
|
|
Amount |
|
% |
|
Amount |
|
% |
|
Amount |
|
% |
|
3Q2024 |
|
|
4Q2023 |
|
|||||||
|
Noninterest-bearing deposits |
|
$ |
504,928 |
|
24.9 |
% |
|
$ |
561,801 |
|
27.2 |
% |
|
$ |
522,751 |
|
28.9 |
% |
|
(10.1 |
)% |
|
(3.4 |
)% |
|
Money market deposits and others |
|
|
329,095 |
|
16.2 |
|
|
|
343,188 |
|
16.6 |
|
|
|
399,018 |
|
22.1 |
|
|
(4.1 |
) |
|
(17.5 |
) |
|
Time deposits |
|
|
1,193,262 |
|
58.9 |
|
|
|
1,159,614 |
|
56.2 |
|
|
|
885,789 |
|
49.0 |
|
|
2.9 |
|
|
34.7 |
|
|
Total deposits |
|
$ |
2,027,285 |
|
100.0 |
% |
|
$ |
2,064,603 |
|
100.0 |
% |
|
$ |
1,807,558 |
|
100.0 |
% |
|
(1.8 |
)% |
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Estimated uninsured deposits |
|
$ |
961,687 |
|
47.4 |
% |
|
$ |
946,406 |
|
45.8 |
% |
|
$ |
1,156,270 |
|
64.0 |
% |
|
1.6 |
% |
|
(16.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2024 vs. September 30, 2024
Total deposits were $2.03 billion as of December 31, 2024, reflecting a decrease of $37.3 million or 1.8% from September 30, 2024, primarily due to decreases of $56.9 million in noninterest-bearing deposits and $14.1 million in money market deposits, partially offset by an increase of $33.6 million in time deposits. Customers’ preference for high-rate deposit products continued to drive the increase in time deposits over money market deposits. The decrease in noninterest-bearing deposits was primarily driven by a significant downward shift in market expectation on the Federal Reserve’s future rate cut trajectory and an uncertainty of economic and business outlook. Average balance of noninterest-bearing deposits, however, increased $15.4 million or 2.9% to $543.5 million from $528.1 million continuing the upward trend started from the beginning of 2024.
As of December 31, 2024 vs. December 31, 2023
Total deposits were $2.03 billion as of December 31, 2024, an increase of $219.7 million from December 31, 2023, primarily driven by a $307.5 million increase in time deposits, offset by decreases of $69.9 million in money market deposits and $17.8 million in noninterest-bearing deposits. Noninterest-bearing deposits, as a percentage of total deposits, decreased to 24.9% from 28.9%. The composition shift to time deposits was primarily due to customers’ preference for high-rate deposit products driven by market rate increases as a result of the Federal Reserve’s rate increases.
The following table sets forth the maturity of time deposits as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
As of December 31, 2024 |
||||||||||||||||||||||
|
($ in thousands) |
|
Within Months |
|
Three to |
|
Six to Nine |
|
Nine to |
|
After |
|
Total |
||||||||||||
|
Time deposits (greater than $250) |
|
$ |
206,324 |
|
|
$ |
149,639 |
|
|
$ |
78,397 |
|
|
$ |
131,002 |
|
|
$ |
451 |
|
|
$ |
565,813 |
|
|
Time deposits ($250 or less) |
|
|
202,931 |
|
|
|
123,639 |
|
|
|
156,542 |
|
|
|
124,766 |
|
|
|
19,571 |
|
|
|
627,449 |
|
|
Total time deposits |
|
$ |
409,255 |
|
|
$ |
273,278 |
|
|
$ |
234,939 |
|
|
$ |
255,768 |
|
|
$ |
20,022 |
|
|
$ |
1,193,262 |
|
|
Weighted average rate |
|
|
4.89 |
% |
|
|
4.86 |
% |
|
|
4.77 |
% |
|
|
4.25 |
% |
|
|
3.98 |
% |
|
|
4.71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTHER HIGHLIGHTS
Liquidity
The Company maintains ample access to liquidity, including highly liquid assets on our balance sheet and available unused borrowings from other financial institutions. The following table presents the Company’s liquid assets and available borrowings as of dates presented:
|
|
|
|
|
|
||||||||
|
($ in thousands) |
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
Liquidity Assets: |
|
|
|
|
|
|
||||||
|
Cash and cash equivalents |
|
$ |
134,943 |
|
|
$ |
166,756 |
|
|
$ |
91,216 |
|
|
Available-for-sale debt securities |
|
|
185,909 |
|
|
|
199,373 |
|
|
|
194,250 |
|
|
Liquid assets |
|
$ |
320,852 |
|
|
$ |
366,129 |
|
|
$ |
285,466 |
|
|
Liquid assets to total assets |
|
|
13.6 |
% |
|
|
15.3 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
||||||
|
Available Borrowings: |
|
|
|
|
|
|
||||||
|
Federal Home Loan Bank—San Francisco |
|
$ |
401,900 |
|
|
$ |
397,617 |
|
|
$ |
363,615 |
|
|
Federal Reserve Bank |
|
|
215,115 |
|
|
|
207,782 |
|
|
|
182,989 |
|
|
Pacific Coast Bankers Bank |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
50,000 |
|
|
Zions Bank |
|
|
25,000 |
|
|
|
25,000 |
|
|
|
25,000 |
|
|
First Horizon Bank |
|
|
25,000 |
|
|
|
25,000 |
|
|
|
25,000 |
|
|
Total available borrowings |
|
$ |
717,015 |
|
|
$ |
705,399 |
|
|
$ |
646,604 |
|
|
Total available borrowings to total assets |
|
|
30.3 |
% |
|
|
29.5 |
% |
|
|
30.1 |
% |
|
|
|
|
|
|
|
|
||||||
|
Liquid assets and available borrowings to total deposits |
|
|
51.2 |
% |
|
|
51.9 |
% |
|
|
51.6 |
% |
|
|
|
|
|
|
||||||||
Capital and Capital Ratios
On January 23, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share of its common stock. The cash dividend is payable on or about February 20, 2025 to all shareholders of record as of the close of business on February 6, 2025. The payment of the dividend is based primarily on dividends from the Bank to the Company, and future dividends will depend on the Board’s assessment of the availability of capital levels to support the ongoing operating capital needs of both the Company and the Bank.
The Company did not repurchase share of its common stock during the fourth quarter of 2024. Since the announcement of the stock repurchase program in August 2023, the Company repurchased a total of 428,628 shares of its common stock at an average repurchase price of $9.37 per share through December 31, 2024.
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
OP Bancorp(1) |
|
Open Bank |
|
Minimum Well Capitalized Ratio |
|
Minimum Capital Ratio+ Conservation Buffer(2) |
||||
|
Risk-Based Capital Ratios: |
|
|
|
|
|
|
|
|
||||
|
Total risk-based capital ratio |
|
12.60 |
% |
|
12.50 |
% |
|
10.00 |
% |
|
10.50 |
% |
|
Tier 1 risk-based capital ratio |
|
11.35 |
|
|
11.25 |
|
|
8.00 |
|
|
8.50 |
|
|
Common equity tier 1 ratio |
|
11.35 |
|
|
11.25 |
|
|
6.50 |
|
|
7.00 |
|
|
Leverage ratio |
|
9.27 |
|
|
9.20 |
|
|
5.00 |
|
|
4.00 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
(1) |
The capital requirements are only applicable to the Bank, and the Company’s ratios are included for comparison purpose. |
|
(2) |
An additional 2.5% capital conservation buffer above the minimum capital ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonuses to executive officers. |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
OP Bancorp |
|
|
|
|
|
|
|
Change 4Q2024 vs. |
||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
3Q2024 |
|
4Q2023 |
|||
|
Risk-Based Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total risk-based capital ratio |
|
|
12.60 |
% |
|
|
12.79 |
% |
|
|
13.77 |
% |
|
(0.19 |
)% |
|
(1.17 |
)% |
|
Tier 1 risk-based capital ratio |
|
|
11.35 |
|
|
|
11.57 |
|
|
|
12.52 |
|
|
(0.22 |
) |
|
(1.17 |
) |
|
Common equity tier 1 ratio |
|
|
11.35 |
|
|
|
11.57 |
|
|
|
12.52 |
|
|
(0.22 |
) |
|
(1.17 |
) |
|
Leverage ratio |
|
|
9.27 |
|
|
|
9.30 |
|
|
|
9.57 |
|
|
(0.03 |
) |
|
(0.30 |
) |
|
Risk-weighted Assets ($ in thousands) |
|
$ |
1,941,549 |
|
|
$ |
1,876,698 |
|
|
$ |
1,667,067 |
|
|
3.46 |
|
|
16.46 |
|
ABOUT OP BANCORP
OP Bancorp, the holding company for Open Bank (the “Bank”), is a California corporation whose common stock is quoted on the Nasdaq Global Market under the ticker symbol, “OPBK.” The Bank is engaged in the general commercial banking business in Los Angeles, Orange, and Santa Clara Counties in California, the Dallas metropolitan area in Texas, and Clark County in Nevada and is focused on serving the banking needs of small- and medium-sized businesses, professionals, and residents with a particular emphasis on Korean and other ethnic minority communities. The Bank currently operates eleven full-service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, Gardena, Buena Park, and Santa Clara, California, Carrollton, Texas and Las Vegas, Nevada. The Bank also has five loan production offices in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, Lynnwood, Washington, and Fairfax, Virginia. The Bank commenced its operations on June 10, 2005 as First Standard Bank and changed its name to Open Bank in October 2010. Its headquarters is located at 1000 Wilshire Blvd., Suite 500, Los Angeles, California 90017. Phone 213.892.9999; www.myopenbank.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters set forth herein constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to: the impacts of recent wildfires affecting the Los Angeles Basin, which have dramatically affected our customers, communities and employees, and which will have as-yet-unquantified effects upon the value of our loans, the adequacy of our loan loss reserves, and the value of the associated collateral; the effects of substantial fluctuations in, and continuing elevated levels of, interest rates on our borrowers’ ability to perform in accordance with the terms of their loans and on our deposit customers’ expectation for higher rates on deposit products; cybersecurity risks, including the potential for the occurrence of successful cyberattacks and our ability to prevent and to mitigate the harms resulting from any such attacks; the geographic concentration of our customer base and our earning assets; infrastructure risks and similar circumstances that affect our and our customers’ ability to communicate and to engage in routine online banking activities; business and economic conditions, particularly those affecting the financial services industry and our primary market areas; risks of international conflict, terrorism, civil unrest and domestic instability; the continuing effects of inflation and monetary policies, particularly those relating to the decisions and indicators of intent expressed by the Federal Reserve Open Markets Committee, as those circumstances impact our operations and our current and prospective borrowers and depositors; our ability to balance deposit liabilities and liquidity sources (including our ability to reprice those instruments and balancing our borrowings and investments to keep pace with changing market conditions) so as to meet current and expected withdrawals while promoting strong earning capacity; our ability to manage our credit risk successfully and to assess, adjust and monitor the sufficiency of our allowance for credit losses; factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers, the success of construction projects that we finance, including any loans acquired in acquisition transactions; the impacts of credit quality on our earnings and the related effects of increases to the reserve on our net income; our ability effectively to execute our strategic plan and manage our growth; interest rate fluctuations, which could have an adverse effect on our profitability; external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition; continued or increasing competition from other banks and from credit unions and non-bank financial services companies, many of which are subject to less restrictive or less costly regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; practical and regulatory constraints on the ability of Open Bank to pay dividends to us; our ability to protect and to use our trademarks and related intellectual property; increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; a failure in the internal controls we have implemented to address the risks inherent to the business of banking; including internal controls that affect the reliability of our publicly reported financial statements; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance, particularly with respect to the effects of predictions of future economic conditions as those circumstances affect our estimates for the adequacy of our allowance for credit losses and the related provision expense; changes in our management personnel or our inability to retain motivate and hire qualified management personnel; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; risks related to potential acquisitions; political developments, uncertainties or instability, catastrophic events, or natural disasters, such as earthquakes, fires, drought, pandemic diseases (such as the coronavirus) or extreme weather events (including but not limited to the above-described wildfires affecting the Los Angeles Metropolitan Area), any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; incremental costs and obligations associated with operating as a public company; the impact of any claims or legal actions to which we may be subject, including any effect on our reputation; compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with commercial mortgage origination, sale and servicing operations; changes in federal tax law or policy; and our ability the manage the foregoing and other factors set forth in the Company’s public reports. We describe these and other risks that could affect our results in Item 1A. “Risk Factors,” of our latest Annual Report on Form 10-K for the year ended December 31, 2023 and in our subsequent filings with the Securities and Exchange Commission.
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands) |
|
As of |
|
% Change 4Q2024 vs. |
||||||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
3Q2024 |
|
4Q2023 |
|||
|
Assets |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cash and due from banks |
|
$ |
12,268 |
|
|
$ |
24,519 |
|
|
$ |
16,948 |
|
|
(50.0 |
)% |
|
(27.6 |
)% |
|
Interest-bearing deposits in other banks |
|
|
122,675 |
|
|
|
142,237 |
|
|
|
74,268 |
|
|
(13.8 |
) |
|
65.2 |
|
|
Cash and cash equivalents |
|
|
134,943 |
|
|
|
166,756 |
|
|
|
91,216 |
|
|
(19.1 |
) |
|
47.9 |
|
|
Available-for-sale debt securities, at fair value |
|
|
185,909 |
|
|
|
199,373 |
|
|
|
194,250 |
|
|
(6.8 |
) |
|
(4.3 |
) |
|
Other investments |
|
|
16,437 |
|
|
|
16,520 |
|
|
|
16,276 |
|
|
(0.5 |
) |
|
1.0 |
|
|
Loans held for sale |
|
|
4,581 |
|
|
|
8,160 |
|
|
|
1,795 |
|
|
(43.9 |
) |
|
155.2 |
|
|
CRE loans |
|
|
980,247 |
|
|
|
966,472 |
|
|
|
885,585 |
|
|
1.4 |
|
|
10.7 |
|
|
SBA loans |
|
|
253,710 |
|
|
|
252,379 |
|
|
|
239,692 |
|
|
0.5 |
|
|
5.8 |
|
|
C&I loans |
|
|
213,097 |
|
|
|
212,476 |
|
|
|
120,970 |
|
|
0.3 |
|
|
76.2 |
|
|
Home mortgage loans |
|
|
509,524 |
|
|
|
499,666 |
|
|
|
518,024 |
|
|
2.0 |
|
|
(1.6 |
) |
|
Consumer loans |
|
|
274 |
|
|
|
14 |
|
|
|
1,574 |
|
|
n/m |
|
|
(82.6 |
) |
|
Gross loans receivable |
|
|
1,956,852 |
|
|
|
1,931,007 |
|
|
|
1,765,845 |
|
|
1.3 |
|
|
10.8 |
|
|
Allowance for credit losses |
|
|
(24,796 |
) |
|
|
(22,960 |
) |
|
|
(21,993 |
) |
|
8.0 |
|
|
12.7 |
|
|
Net loans receivable |
|
|
1,932,056 |
|
|
|
1,908,047 |
|
|
|
1,743,852 |
|
|
1.3 |
|
|
10.8 |
|
|
Premises and equipment, net |
|
|
5,449 |
|
|
|
4,961 |
|
|
|
5,248 |
|
|
9.8 |
|
|
3.8 |
|
|
Accrued interest receivable, net |
|
|
9,188 |
|
|
|
9,479 |
|
|
|
8,259 |
|
|
(3.1 |
) |
|
11.2 |
|
|
Servicing assets |
|
|
10,834 |
|
|
|
10,877 |
|
|
|
11,741 |
|
|
(0.4 |
) |
|
(7.7 |
) |
|
Company owned life insurance |
|
|
22,912 |
|
|
|
22,739 |
|
|
|
22,233 |
|
|
0.8 |
|
|
3.1 |
|
|
Deferred tax assets, net |
|
|
14,893 |
|
|
|
12,288 |
|
|
|
13,309 |
|
|
21.2 |
|
|
11.9 |
|
|
Other real estate owned |
|
|
1,237 |
|
|
|
1,237 |
|
|
|
— |
|
|
— |
|
|
n/m |
|
|
Operating right-of-use assets |
|
|
7,415 |
|
|
|
7,870 |
|
|
|
8,497 |
|
|
(5.8 |
) |
|
(12.7 |
) |
|
Other assets |
|
|
20,159 |
|
|
|
19,673 |
|
|
|
31,054 |
|
|
2.5 |
|
|
(35.1 |
) |
|
Total assets |
|
$ |
2,366,013 |
|
|
$ |
2,387,980 |
|
|
$ |
2,147,730 |
|
|
(0.9 |
)% |
|
10.2 |
% |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Noninterest-bearing |
|
$ |
504,928 |
|
|
$ |
561,801 |
|
|
$ |
522,751 |
|
|
(10.1 |
)% |
|
(3.4 |
)% |
|
Money market and others |
|
|
329,095 |
|
|
|
343,188 |
|
|
|
399,018 |
|
|
(4.1 |
) |
|
(17.5 |
) |
|
Time deposits greater than $250 |
|
|
565,813 |
|
|
|
564,547 |
|
|
|
433,892 |
|
|
0.2 |
|
|
30.4 |
|
|
Other time deposits |
|
|
627,449 |
|
|
|
595,067 |
|
|
|
451,897 |
|
|
5.4 |
|
|
38.8 |
|
|
Total deposits |
|
|
2,027,285 |
|
|
|
2,064,603 |
|
|
|
1,807,558 |
|
|
(1.8 |
) |
|
12.2 |
|
|
Federal Home Loan Bank advances |
|
|
95,000 |
|
|
|
75,000 |
|
|
|
105,000 |
|
|
26.7 |
|
|
(9.5 |
) |
|
Accrued interest payable |
|
|
16,067 |
|
|
|
19,483 |
|
|
|
12,628 |
|
|
(17.5 |
) |
|
27.2 |
|
|
Operating lease liabilities |
|
|
7,857 |
|
|
|
8,417 |
|
|
|
9,341 |
|
|
(6.7 |
) |
|
(15.9 |
) |
|
Other liabilities |
|
|
14,811 |
|
|
|
16,874 |
|
|
|
20,577 |
|
|
(12.2 |
) |
|
(28.0 |
) |
|
Total liabilities |
|
|
2,161,020 |
|
|
|
2,184,377 |
|
|
|
1,955,104 |
|
|
(1.1 |
) |
|
10.5 |
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Common stock |
|
|
73,697 |
|
|
|
73,697 |
|
|
|
76,280 |
|
|
— |
|
|
(3.4 |
) |
|
Additional paid-in capital |
|
|
11,928 |
|
|
|
11,713 |
|
|
|
10,942 |
|
|
1.8 |
|
|
9.0 |
|
|
Retained earnings |
|
|
134,781 |
|
|
|
131,588 |
|
|
|
120,855 |
|
|
2.4 |
|
|
11.5 |
|
|
Accumulated other comprehensive loss |
|
|
(15,413 |
) |
|
|
(13,395 |
) |
|
|
(15,451 |
) |
|
15.1 |
|
|
(0.2 |
) |
|
Total shareholders’ equity |
|
|
204,993 |
|
|
|
203,603 |
|
|
|
192,626 |
|
|
0.7 |
|
|
6.4 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
2,366,013 |
|
|
$ |
2,387,980 |
|
|
$ |
2,147,730 |
|
|
(0.9 |
)% |
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
($ in thousands, except share and per share data) |
|
For the Three Months Ended |
|
% Change 4Q2024 vs. |
||||||||||||||
|
|
|
4Q2024 |
|
|
3Q2024 |
|
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
Interest income |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest and fees on loans |
|
$ |
31,729 |
|
$ |
31,885 |
|
$ |
28,914 |
|
(0.5 |
)% |
|
9.7 |
% |
|||
|
Interest on available-for-sale debt securities |
|
|
1,551 |
|
|
1,626 |
|
|
1,484 |
|
(4.6 |
) |
|
4.5 |
|
|||
|
Other interest income |
|
|
1,771 |
|
|
1,788 |
|
|
1,385 |
|
(1.0 |
) |
|
27.9 |
|
|||
|
Total interest income |
|
|
35,051 |
|
|
35,299 |
|
|
31,783 |
|
(0.7 |
) |
|
10.3 |
|
|||
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest on deposits |
|
|
17,182 |
|
|
17,921 |
|
|
14,127 |
|
(4.1 |
) |
|
21.6 |
|
|||
|
Interest on borrowings |
|
|
940 |
|
|
872 |
|
|
1,426 |
|
7.8 |
|
|
(34.1 |
)% |
|||
|
Total interest expense |
|
|
18,122 |
|
|
18,793 |
|
|
15,553 |
|
(3.6 |
) |
|
16.5 |
|
|||
|
Net interest income |
|
|
16,929 |
|
|
16,506 |
|
|
16,230 |
|
2.6 |
|
|
4.3 |
|
|||
|
Provision for credit losses |
|
|
1,547 |
|
|
448 |
|
|
630 |
|
245.3 |
|
|
145.6 |
|
|||
|
Net interest income after provision for credit losses |
|
|
15,382 |
|
|
16,058 |
|
|
15,600 |
|
(4.2 |
) |
|
(1.4 |
) |
|||
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Service charges on deposits |
|
|
967 |
|
|
889 |
|
|
557 |
|
8.8 |
|
|
73.6 |
|
|||
|
Loan servicing fees, net of amortization |
|
|
858 |
|
|
693 |
|
|
540 |
|
23.8 |
|
|
58.9 |
|
|||
|
Gain on sale of loans |
|
|
2,197 |
|
|
2,088 |
|
|
1,996 |
|
5.2 |
|
|
10.1 |
|
|||
|
Other income |
|
|
395 |
|
|
570 |
|
|
587 |
|
(30.7 |
) |
|
(32.7 |
) |
|||
|
Total noninterest income |
|
|
4,417 |
|
|
4,240 |
|
|
3,680 |
|
4.2 |
|
|
20.0 |
|
|||
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Salaries and employee benefits |
|
|
8,277 |
|
|
8,031 |
|
|
7,646 |
|
3.1 |
|
|
8.3 |
|
|||
|
Occupancy and equipment |
|
|
1,682 |
|
|
1,676 |
|
|
1,616 |
|
0.4 |
|
|
4.1 |
|
|||
|
Data processing and communication |
|
|
594 |
|
|
634 |
|
|
644 |
|
(6.3 |
) |
|
(7.8 |
) |
|||
|
Professional fees |
|
|
388 |
|
|
346 |
|
|
391 |
|
12.1 |
|
|
(0.8 |
) |
|||
|
FDIC insurance and regulatory assessments |
|
|
529 |
|
|
391 |
|
|
237 |
|
35.3 |
|
|
123.2 |
|
|||
|
Promotion and advertising |
|
|
82 |
|
|
151 |
|
|
86 |
|
(45.7 |
) |
|
(4.7 |
) |
|||
|
Directors’ fees |
|
|
151 |
|
|
154 |
|
|
145 |
|
(1.9 |
) |
|
4.1 |
|
|||
|
Foundation donation and other contributions |
|
|
480 |
|
|
549 |
|
|
524 |
|
(12.6 |
) |
|
(8.4 |
) |
|||
|
Other expenses |
|
|
950 |
|
|
788 |
|
|
694 |
|
20.6 |
|
|
36.9 |
|
|||
|
Total noninterest expense |
|
|
13,133 |
|
|
12,720 |
|
|
11,983 |
|
3.2 |
|
|
9.6 |
|
|||
|
Income before income tax expense |
|
|
6,666 |
|
|
7,578 |
|
|
7,297 |
|
(12.0 |
) |
|
(8.6 |
) |
|||
|
Income tax expense |
|
|
1,695 |
|
|
2,142 |
|
|
2,125 |
|
(20.9 |
) |
|
(20.2 |
) |
|||
|
Net income |
|
$ |
4,971 |
|
$ |
5,436 |
|
$ |
5,172 |
|
(8.6 |
)% |
|
(3.9 |
)% |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Book value per share |
|
$ |
13.83 |
|
$ |
13.75 |
|
$ |
12.84 |
|
0.6 |
% |
|
7.7 |
% |
|||
|
Earnings per share – basic |
|
|
0.33 |
|
|
0.36 |
|
|
0.34 |
|
(8.3 |
) |
|
(2.9 |
) |
|||
|
Earnings per share – diluted |
|
|
0.33 |
|
|
0.36 |
|
|
0.34 |
|
(8.3 |
) |
|
(2.9 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Shares of common stock outstanding, at period end |
|
|
14,819,866 |
|
|
14,811,671 |
|
|
15,000,436 |
|
0.1 |
% |
|
(1.2 |
)% |
|||
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
||||||||
|
– Basic |
|
|
14,816,416 |
|
|
14,812,118 |
|
|
15,027,110 |
|
— |
% |
|
(1.4 |
)% |
|||
|
– Diluted |
|
|
14,816,416 |
|
|
14,812,118 |
|
|
15,034,822 |
|
— |
|
|
(1.5 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
KEY RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
For the Three Months Ended |
|
% Change 4Q2024 vs. |
|||||||||||
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|
3Q2024 |
|
4Q2023 |
||||||
|
Return on average assets (ROA)(1) |
|
0.84 |
% |
|
0.94 |
% |
|
0.96 |
% |
|
(0.1 |
)% |
|
(0.1 |
)% |
|
Return on average equity (ROE)(1) |
|
9.75 |
|
|
10.95 |
|
|
11.18 |
|
|
(1.2 |
) |
|
(1.4 |
) |
|
Net interest margin(1) |
|
2.96 |
|
|
2.95 |
|
|
3.12 |
|
|
— |
|
|
(0.2 |
) |
|
Efficiency ratio |
|
61.52 |
|
|
61.31 |
|
|
60.19 |
|
|
0.2 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total risk-based capital ratio |
|
12.60 |
% |
|
12.79 |
% |
|
13.77 |
% |
|
(0.2 |
)% |
|
(1.2 |
)% |
|
Tier 1 risk-based capital ratio |
|
11.35 |
|
|
11.57 |
|
|
12.52 |
|
|
(0.2 |
) |
|
(1.2 |
) |
|
Common equity tier 1 ratio |
|
11.35 |
|
|
11.57 |
|
|
12.52 |
|
|
(0.2 |
) |
|
(1.2 |
) |
|
Leverage ratio |
|
9.27 |
|
|
9.30 |
|
|
9.57 |
|
|
— |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| (1) |
Annualized. |
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
|
|
|
|
|
|
|
|
|||
|
($ in thousands, except share and per share data) |
|
For the Twelve Months Ended |
|
|
|||||
|
|
4Q2024 |
|
4Q2023 |
|
% Change |
||||
|
Interest income |
|
|
|
|
|
|
|||
|
Interest and fees on loans |
|
$ |
124,361 |
|
$ |
110,463 |
|
12.6 |
% |
|
Interest on available-for-sale debt securities |
|
|
6,227 |
|
|
6,131 |
|
1.6 |
|
|
Other interest income |
|
|
7,032 |
|
|
5,071 |
|
38.7 |
|
|
Total interest income |
|
|
137,620 |
|
|
121,665 |
|
13.1 |
|
|
Interest expense |
|
|
|
|
|
|
|||
|
Interest on deposits |
|
|
68,121 |
|
|
49,435 |
|
37.8 |
|
|
Interest on borrowings |
|
|
3,891 |
|
|
3,543 |
|
9.8 |
|
|
Total interest expense |
|
|
72,012 |
|
|
52,978 |
|
35.9 |
|
|
Net interest income |
|
|
65,608 |
|
|
68,687 |
|
(4.5 |
) |
|
Provision for credit losses |
|
|
2,757 |
|
|
1,651 |
|
67.0 |
|
|
Net interest income after provision for credit losses |
|
|
62,851 |
|
|
67,036 |
|
(6.2 |
) |
|
Noninterest income |
|
|
|
|
|
|
|||
|
Service charges on deposits |
|
|
3,261 |
|
|
2,123 |
|
53.6 |
% |
|
Loan servicing fees, net of amortization |
|
|
2,898 |
|
|
2,449 |
|
18.3 |
|
|
Gain on sale of loans |
|
|
8,313 |
|
|
7,843 |
|
6.0 |
|
|
Other income |
|
|
1,955 |
|
|
1,766 |
|
10.7 |
|
|
Total noninterest income |
|
|
16,427 |
|
|
14,181 |
|
15.8 |
|
|
Noninterest expense |
|
|
|
|
|
|
|||
|
Salaries and employee benefits |
|
|
31,717 |
|
|
29,593 |
|
7.2 |
|
|
Occupancy and equipment |
|
|
6,673 |
|
|
6,490 |
|
2.8 |
|
|
Data processing and communication |
|
|
2,245 |
|
|
2,109 |
|
6.4 |
|
|
Professional fees |
|
|
1,535 |
|
|
1,571 |
|
(2.3 |
) |
|
FDIC insurance and regulatory assessments |
|
|
1,672 |
|
|
1,457 |
|
14.8 |
|
|
Promotion and advertising |
|
|
533 |
|
|
614 |
|
(13.2 |
) |
|
Directors’ fees |
|
|
640 |
|
|
680 |
|
(5.9 |
) |
|
Foundation donation and other contributions |
|
|
2,108 |
|
|
2,400 |
|
(12.2 |
) |
|
Other expenses |
|
|
3,076 |
|
|
2,812 |
|
9.4 |
|
|
Total noninterest expense |
|
|
50,199 |
|
|
47,726 |
|
5.2 |
|
|
Income before income tax expense |
|
|
29,079 |
|
|
33,491 |
|
(13.2 |
) |
|
Income tax expense |
|
|
8,010 |
|
|
9,573 |
|
(16.3 |
) |
|
Net income |
|
$ |
21,069 |
|
$ |
23,918 |
|
(11.9 |
)% |
|
|
|
|
|
|
|
|
|||
|
Book value per share |
|
$ |
13.83 |
|
$ |
12.84 |
|
7.7 |
% |
|
Earnings per share – basic |
|
|
1.39 |
|
|
1.55 |
|
(10.3 |
) |
|
Earnings per share – diluted |
|
|
1.39 |
|
|
1.55 |
|
(10.3 |
) |
|
|
|
|
|
|
|
|
|||
|
Shares of common stock outstanding, at period end |
|
|
14,819,866 |
|
|
15,000,436 |
|
(1.2 |
)% |
|
Weighted average shares: |
|
|
|
|
|
|
|||
|
– Basic |
|
|
14,871,876 |
|
|
15,149,597 |
|
(1.8 |
)% |
|
– Diluted |
|
|
14,871,876 |
|
|
15,158,857 |
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|||
KEY RATIOS
|
|
|
|
|
|
|
|
|||
|
|
|
For the Twelve Months Ended |
|
|
|||||
|
|
4Q2024 |
|
4Q2023 |
|
% Change |
||||
|
Return on average assets (ROA) |
|
0.92 |
% |
|
1.13 |
% |
|
(0.2 |
)% |
|
Return on average equity (ROE) |
|
10.68 |
|
|
13.05 |
|
|
(2.4 |
) |
|
Net interest margin |
|
2.99 |
|
|
3.37 |
|
|
(0.4 |
) |
|
Efficiency ratio |
|
61.19 |
|
|
57.59 |
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|||
|
Total risk-based capital ratio |
|
12.60 |
% |
|
13.77 |
% |
|
(1.2 |
)% |
|
Tier 1 risk-based capital ratio |
|
11.35 |
|
|
12.52 |
|
|
(1.2 |
) |
|
Common equity tier 1 ratio |
|
11.35 |
|
|
12.52 |
|
|
(1.2 |
) |
|
Leverage ratio |
|
9.27 |
|
|
9.57 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|||
ASSET QUALITY
|
|
|
|
|
|
|
|
||||||
|
($ in thousands) |
|
As of and For the Three Months Ended |
||||||||||
|
|
|
4Q2024 |
|
|
|
3Q2024 |
|
|
|
4Q2023 |
|
|
|
Nonaccrual loans(1) |
|
$ |
7,820 |
|
|
$ |
3,620 |
|
|
$ |
6,082 |
|
|
Loans 90 days or more past due, accruing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Nonperforming loans |
|
|
7,820 |
|
|
|
3,620 |
|
|
|
6,082 |
|
|
OREO |
|
|
1,237 |
|
|
|
1,237 |
|
|
|
— |
|
|
Nonperforming assets |
|
$ |
9,057 |
|
|
$ |
4,857 |
|
|
$ |
6,082 |
|
|
|
|
|
|
|
|
|
||||||
|
Criticized loans by risk categories: |
|
|
|
|
|
|
||||||
|
Special mention loans |
|
$ |
6,309 |
|
|
$ |
4,540 |
|
|
$ |
1,428 |
|
|
Classified loans(1)(2) |
|
|
13,261 |
|
|
|
11,960 |
|
|
|
11,921 |
|
|
Total criticized loans |
|
$ |
19,570 |
|
|
$ |
16,500 |
|
|
$ |
13,349 |
|
|
|
|
|
|
|
|
|
||||||
|
Criticized loans by loan type: |
|
|
|
|
|
|
||||||
|
CRE loans |
|
$ |
9,042 |
|
|
$ |
5,249 |
|
|
$ |
4,995 |
|
|
SBA loans |
|
|
10,128 |
|
|
|
10,144 |
|
|
|
5,864 |
|
|
C&I loans |
|
|
400 |
|
|
|
1,107 |
|
|
|
— |
|
|
Home mortgage loans |
|
|
— |
|
|
|
— |
|
|
|
2,490 |
|
|
Total criticized loans |
|
$ |
19,570 |
|
|
$ |
16,500 |
|
|
$ |
13,349 |
|
|
|
|
|
|
|
|
|
||||||
|
Nonperforming loans / gross loans |
|
|
0.40 |
% |
|
|
0.19 |
% |
|
|
0.34 |
% |
|
Nonperforming assets / gross loans plus OREO |
|
|
0.46 |
|
|
|
0.25 |
|
|
|
0.34 |
|
|
Nonperforming assets / total assets |
|
|
0.38 |
|
|
|
0.20 |
|
|
|
0.28 |
|
|
Classified loans / gross loans |
|
|
0.68 |
|
|
|
0.62 |
|
|
|
0.68 |
|
|
Criticized loans / gross loans |
|
|
1.00 |
|
|
|
0.85 |
|
|
|
0.76 |
|
|
|
|
|
|
|
|
|
||||||
|
Allowance for credit losses ratios: |
|
|
|
|
|
|
||||||
|
As a % of gross loans |
|
|
1.27 |
% |
|
|
1.19 |
% |
|
|
1.25 |
% |
|
As a % of nonperforming loans |
|
|
317 |
|
|
|
634 |
|
|
|
362 |
|
|
As a % of nonperforming assets |
|
|
274 |
|
|
|
473 |
|
|
|
362 |
|
|
As a % of classified loans |
|
|
187 |
|
|
|
192 |
|
|
|
184 |
|
|
As a % of criticized loans |
|
|
127 |
|
|
|
139 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
||||||
|
Net charge-offs |
|
$ |
23 |
|
|
$ |
34 |
|
|
$ |
161 |
|
|
Net charge-offs(3) to average gross loans(4) |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
0.04 |
% |
|
|
|
|
|
|
|
|
||||||
|
(1) |
Excludes the guaranteed portion of SBA & USDA loans that are in liquidation totaling $16.3 million, $11.1 million and $2.0 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively. |
|
(2) |
Consists of Substandard, Doubtful and Loss categories. |
|
(3) |
Annualized. |
|
(4) |
Includes loans held for sale. |
|
|
|
|
|
|
|
|
|||
|
($ in thousands) |
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|||
|
Accruing delinquent loans 30-89 days past due |
|
|
|
|
|
|
|||
|
30-59 days |
|
$ |
3,159 |
|
$ |
4,095 |
|
$ |
5,945 |
|
60-89 days |
|
|
5,805 |
|
|
6,211 |
|
|
3,662 |
|
Total |
|
$ |
8,964 |
|
$ |
10,306 |
|
$ |
9,607 |
|
|
|
|
|
|
|
|
|||
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
For the Three Months Ended |
|||||||||||||||||||||||||
|
|
|
4Q2024 |
|
3Q2024 |
|
4Q2023 |
|||||||||||||||||||||
|
($ in thousands) |
|
Average Balance |
|
Interest and Fees |
|
Yield/ Rate(1) |
|
Average Balance |
|
Interest and Fees |
|
Yield/ Rate(1) |
|
Average Balance |
|
Interest and Fees |
|
Yield/ Rate(1) |
|||||||||
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest-bearing deposits in other banks |
|
$ |
120,170 |
|
$ |
1,456 |
|
4.74 |
% |
|
$ |
109,003 |
|
$ |
1,474 |
|
5.29 |
% |
|
$ |
78,496 |
|
$ |
1,076 |
|
5.36 |
% |
|
Federal funds sold and other investments |
|
|
16,478 |
|
|
315 |
|
7.63 |
|
|
|
16,432 |
|
|
314 |
|
7.65 |
|
|
|
16,115 |
|
|
309 |
|
7.66 |
|
|
Available-for-sale debt securities, at fair value |
|
|
193,738 |
|
|
1,551 |
|
3.20 |
|
|
|
199,211 |
|
|
1,626 |
|
3.26 |
|
|
|
189,462 |
|
|
1,484 |
|
3.13 |
|
|
CRE loans |
|
|
960,639 |
|
|
14,653 |
|
6.07 |
|
|
|
944,818 |
|
|
14,759 |
|
6.21 |
|
|
|
892,092 |
|
|
13,104 |
|
5.83 |
|
|
SBA loans |
|
|
269,842 |
|
|
6,542 |
|
9.65 |
|
|
|
270,282 |
|
|
7,107 |
|
10.46 |
|
|
|
255,692 |
|
|
7,055 |
|
10.95 |
|
|
C&I loans |
|
|
217,816 |
|
|
4,086 |
|
7.46 |
|
|
|
187,163 |
|
|
3,642 |
|
7.74 |
|
|
|
122,950 |
|
|
2,416 |
|
7.80 |
|
|
Home mortgage loans |
|
|
499,151 |
|
|
6,441 |
|
5.16 |
|
|
|
503,148 |
|
|
6,364 |
|
5.06 |
|
|
|
515,840 |
|
|
6,315 |
|
4.90 |
|
|
Consumer loans |
|
|
205 |
|
|
7 |
|
13.55 |
|
|
|
541 |
|
|
13 |
|
9.37 |
|
|
|
966 |
|
|
24 |
|
9.92 |
|
|
Loans(2) |
|
|
1,947,653 |
|
|
31,729 |
|
6.49 |
|
|
|
1,905,952 |
|
|
31,885 |
|
6.66 |
|
|
|
1,787,540 |
|
|
28,914 |
|
6.43 |
|
|
Total interest-earning assets |
|
|
2,278,039 |
|
|
35,051 |
|
6.12 |
|
|
|
2,230,598 |
|
|
35,299 |
|
6.30 |
|
|
|
2,071,613 |
|
|
31,783 |
|
6.10 |
|
|
Noninterest-earning assets |
|
|
85,218 |
|
|
|
|
|
|
88,747 |
|
|
|
|
|
|
86,874 |
|
|
|
|
||||||
|
Total assets |
|
$ |
2,363,257 |
|
|
|
|
|
$ |
2,319,345 |
|
|
|
|
|
$ |
2,158,487 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Money market deposits and others |
|
$ |
335,197 |
|
$ |
3,100 |
|
3.68 |
% |
|
$ |
343,429 |
|
$ |
3,601 |
|
4.17 |
% |
|
$ |
377,304 |
|
$ |
3,993 |
|
4.20 |
% |
|
Time deposits |
|
|
1,151,112 |
|
|
14,082 |
|
4.87 |
|
|
|
1,127,078 |
|
|
14,320 |
|
5.05 |
|
|
|
866,142 |
|
|
10,134 |
|
4.64 |
|
|
Total interest-bearing deposits |
|
|
1,486,309 |
|
|
17,182 |
|
4.60 |
|
|
|
1,470,507 |
|
|
17,921 |
|
4.85 |
|
|
|
1,243,446 |
|
|
14,127 |
|
4.51 |
|
|
Borrowings |
|
|
86,525 |
|
|
940 |
|
4.32 |
|
|
|
80,326 |
|
|
872 |
|
4.32 |
|
|
|
118,764 |
|
|
1,426 |
|
4.76 |
|
|
Total interest-bearing liabilities |
|
|
1,572,834 |
|
|
18,122 |
|
4.58 |
|
|
|
1,550,833 |
|
|
18,793 |
|
4.82 |
|
|
|
1,362,210 |
|
|
15,553 |
|
4.53 |
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Noninterest-bearing deposits |
|
|
543,546 |
|
|
|
|
|
|
528,126 |
|
|
|
|
|
|
569,965 |
|
|
|
|
||||||
|
Other noninterest-bearing liabilities |
|
|
42,925 |
|
|
|
|
|
|
41,892 |
|
|
|
|
|
|
41,312 |
|
|
|
|
||||||
|
Total noninterest-bearing liabilities |
|
|
586,471 |
|
|
|
|
|
|
570,018 |
|
|
|
|
|
|
611,277 |
|
|
|
|
||||||
|
Shareholders’ equity |
|
|
203,952 |
|
|
|
|
|
|
198,494 |
|
|
|
|
|
|
185,000 |
|
|
|
|
||||||
|
Total liabilities and shareholders’ equity |
|
$ |
2,363,257 |
|
|
|
|
|
|
2,319,345 |
|
|
|
|
|
|
2,158,487 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net interest income / interest rate spreads |
|
|
|
$ |
16,929 |
|
1.54 |
% |
|
|
|
$ |
16,506 |
|
1.48 |
% |
|
|
|
$ |
16,230 |
|
1.57 |
% |
|||
|
Net interest margin |
|
|
|
|
|
2.96 |
% |
|
|
|
|
|
2.95 |
% |
|
|
|
|
|
3.12 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Cost of deposits & cost of funds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Total deposits / cost of deposits |
|
$ |
2,029,855 |
|
$ |
17,182 |
|
3.37 |
% |
|
$ |
1,998,633 |
|
$ |
17,921 |
|
3.57 |
% |
|
$ |
1,813,411 |
|
$ |
14,127 |
|
3.09 |
% |
|
Total funding liabilities / cost of funds |
|
|
2,116,380 |
|
|
18,122 |
|
3.41 |
|
|
|
2,078,959 |
|
|
18,793 |
|
3.60 |
|
|
|
1,932,175 |
|
|
15,553 |
|
3.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| (1) |
Annualized. |
| (2) |
Includes loans held for sale. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
For the Twelve Months Ended |
||||||||||||||||
|
|
|
4Q2024 |
|
4Q2023 |
||||||||||||||
|
($ in thousands) |
|
Average Balance |
|
Interest and Fees |
|
Yield/ Rate |
|
Average Balance |
|
Interest and Fees |
|
Yield/ Rate |
||||||
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest-bearing deposits in other banks |
|
$ |
109,579 |
|
$ |
5,766 |
|
5.26 |
% |
|
$ |
78,676 |
|
$ |
4,040 |
|
5.14 |
% |
|
Federal funds sold and other investments |
|
|
16,371 |
|
|
1,266 |
|
7.74 |
|
|
|
14,963 |
|
|
1,031 |
|
6.89 |
|
|
Available-for-sale debt securities, at fair value |
|
|
194,969 |
|
|
6,227 |
|
3.19 |
|
|
|
202,167 |
|
|
6,131 |
|
3.03 |
|
|
CRE loans |
|
|
929,890 |
|
|
56,883 |
|
6.12 |
|
|
|
857,124 |
|
|
48,312 |
|
5.64 |
|
|
SBA loans |
|
|
263,442 |
|
|
27,978 |
|
10.62 |
|
|
|
260,507 |
|
|
28,514 |
|
10.95 |
|
|
C&I loans |
|
|
178,533 |
|
|
13,765 |
|
7.71 |
|
|
|
119,135 |
|
|
9,189 |
|
7.71 |
|
|
Home mortgage loans |
|
|
504,030 |
|
|
25,648 |
|
5.09 |
|
|
|
507,125 |
|
|
24,384 |
|
4.81 |
|
|
Consumer & other loans |
|
|
835 |
|
|
87 |
|
10.32 |
|
|
|
987 |
|
|
64 |
|
6.51 |
|
|
Loans(1) |
|
|
1,876,730 |
|
|
124,361 |
|
6.63 |
|
|
|
1,744,878 |
|
|
110,463 |
|
6.33 |
|
|
Total interest-earning assets |
|
|
2,197,649 |
|
|
137,620 |
|
6.26 |
|
|
|
2,040,684 |
|
|
121,665 |
|
5.96 |
|
|
Noninterest-earning assets |
|
|
87,745 |
|
|
|
|
|
|
84,757 |
|
|
|
|
||||
|
Total assets |
|
$ |
2,285,394 |
|
|
|
|
|
$ |
2,125,441 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Money market deposits and others |
|
$ |
346,104 |
|
$ |
14,135 |
|
4.08 |
% |
|
$ |
374,116 |
|
$ |
13,830 |
|
3.70 |
% |
|
Time deposits |
|
|
1,084,107 |
|
|
53,986 |
|
4.98 |
|
|
|
841,804 |
|
|
35,605 |
|
4.23 |
|
|
Total interest-bearing deposits |
|
|
1,430,211 |
|
|
68,121 |
|
4.76 |
|
|
|
1,215,920 |
|
|
49,435 |
|
4.07 |
|
|
Borrowings |
|
|
88,186 |
|
|
3,891 |
|
4.41 |
|
|
|
77,114 |
|
|
3,543 |
|
4.59 |
|
|
Total interest-bearing liabilities |
|
|
1,518,397 |
|
|
72,012 |
|
4.74 |
|
|
|
1,293,034 |
|
|
52,978 |
|
4.10 |
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Noninterest-bearing deposits |
|
|
528,877 |
|
|
|
|
|
|
613,797 |
|
|
|
|
||||
|
Other noninterest-bearing liabilities |
|
|
40,839 |
|
|
|
|
|
|
35,377 |
|
|
|
|
||||
|
Total noninterest-bearing liabilities |
|
|
569,716 |
|
|
|
|
|
|
649,174 |
|
|
|
|
||||
|
Shareholders’ equity |
|
|
197,281 |
|
|
|
|
|
|
183,233 |
|
|
|
|
||||
|
Total liabilities and shareholders’ equity |
|
$ |
2,285,394 |
|
|
|
|
|
|
2,125,441 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net interest income / interest rate spreads |
|
|
|
$ |
65,608 |
|
1.52 |
% |
|
|
|
$ |
68,687 |
|
1.86 |
% |
||
|
Net interest margin |
|
|
|
|
|
2.99 |
% |
|
|
|
|
|
3.37 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cost of deposits & cost of funds: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total deposits / cost of deposits |
|
$ |
1,959,088 |
|
$ |
68,121 |
|
3.48 |
% |
|
|
1,829,717 |
|
$ |
49,435 |
|
2.70 |
% |
|
Total funding liabilities / cost of funds |
|
|
2,047,274 |
|
|
72,012 |
|
3.52 |
|
|
|
1,906,831 |
|
|
52,978 |
|
2.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
| (1) |
Includes loans held for sale. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250123018544/en/
Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
[email protected]
KEYWORDS: California United States North America
INDUSTRY KEYWORDS: Finance Banking Professional Services Asset Management Fintech
MEDIA: