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OP Bancorp Reports Net Income for Third Quarter 2021 of $8.3 Million and Diluted Earnings Per Share of $0.54

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2021 Third Quarter Highlights compared with 2020 Third Quarter:

  • Financial Results:

    • Net income of $8.3 million, up $4.7 million, or 129%

    • Diluted earnings per share of $0.54, up $0.31, or 135%

    • Net interest income of $16.6 million, up $5.2 million, or 45%

    • Reversal of provision for loan losses of $884 thousand, a $2.3 million decrease in provision for loan losses

    • Noninterest income of $3.5 million, up $521 thousand, or 17%

    • Noninterest expense of $9.5 million, up $1.5 million, or 19%

    • Pre-provision net revenue (1) of $10.6 million, up $4.2 million, or 64%

    • Total assets of $1.68 billion, up $340.1 million, or 25%

    • Total loans (2) of $1.33 billion, up $212.1 million, or 19%; Average loans (2) of $1.31 billion, up $246.2 million, or 23%

    • Total deposits of $1.50 billion, up $326.2 million, or 28%; Average deposits of $1.45 billion, up $323.9 million, or 29%

    • Noninterest-bearing deposits to total deposits of 48%, up from 42%

    • Net interest margin of 4.21%, up from 3.66%

    • Return on average equity of 21.30%, up from 10.22%

    • Return on average assets of 2.03%, up from 1.11%

    • Efficiency ratio of 47.28%, an improvement from 55.31%

  • Credit Quality:

    • Allowance for loan losses to gross loans of 1.15%, compared to 1.32%

    • Adjusted allowance to gross loans (1) of 1.34%, compared to 1.40%

    • Net loan (recoveries) charge-offs to average gross loans remained minimal at zero percent.

    • Nonperforming loans to gross loans of 0.09%, compared to 0.03%

    • Criticized loans (3) to gross loans of 0.18%, down from 0.63%

  • Capital Levels:

    • Quarterly cash dividend of $0.10 per share, a 43% increase from $0.07 per share

    • Capital position remained well-capitalized with a Common Equity Tier 1 ("CET1") ratio of 12.63%.

    • Book value per common share of $10.48, up 12%

    • Returned $1.5 million of capital to shareholders through cash dividend

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

LOS ANGELES, October 28, 2021--(BUSINESS WIRE)--OP Bancorp (the "Company") (NASDAQ: OPBK), the holding company of Open Bank, today reported its financial results for the third quarter of 2021. Net income for the third quarter of 2021 was $8.3 million, or $0.54 per diluted common share, compared with $6.4 million, or $0.42 per diluted common share, for the second quarter of 2021, and $3.6 million, or $0.23 per diluted common share, for the third quarter of 2020.

Min Kim, President and Chief Executive Officer:

"We demonstrated solid performance in the quarter with net income available to common shareholders of $8.3 million reflecting the benefit of improving overall economic conditions and credit quality. We continued to focus on executing our strategic goals despite the challenging environment across the banking industry. We are pleased with continued strong performance in the growth of our deposits, with a record level of noninterest bearing deposits at 48% of total deposits at quarter end. We are seeing encouraging signs of economic recovery, and customer activities are starting to normalize. We will continue to make investments in technologies to improve our operations. We remain focused on managing risks, especially in cybersecurity, while maintaining safe and sound banking operations."

SELECTED FINANCIAL HIGHLIGHTS

($ in thousands, except per share data)

As of and For the Three Months Ended

% Change 3Q21 vs.

3Q21

2Q21

3Q20

2Q21

3Q20

Selected Income Statement Data:

Net interest income

$

16,589

$

14,586

$

11,419

13.7

%

45.3

%

(Reversal of) provision for loan losses

(884

)

(1,112

)

1,399

(20.5

)

(163.2

)

Noninterest income

3,542

2,220

3,021

59.5

17.2

Noninterest expense

9,519

8,789

7,987

8.3

19.2

Income tax expense

3,246

2,750

1,459

18.0

122.5

Net Income

$

8,250

$

6,379

$

3,595

29.3

%

129.5

%

Diluted earnings per share

$

0.54

$

0.42

$

0.23

28.6

%

134.8

%

Selected Balance Sheet Data:

Total loans (1)

$

1,326,287

$

1,314,262

$

1,114,220

0.9

%

19.0

%

Total deposits

$

1,496,406

$

1,434,103

$

1,170,164

4.3

%

27.9

%

Total assets

$

1,679,911

$

1,601,860

$

1,339,821

4.9

%

25.4

%

Average loans (1)

$

1,308,338

$

1,242,058

$

1,062,175

5.3

%

23.2

%

Average deposits

$

1,448,771

$

1,348,910

$

1,124,835

7.4

%

28.8

%

Credit Quality:

Nonperforming loans

$

1,052

$

757

$

330

39.0

%

218.8

%

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

(0.00

)%

0.01

%

(0.00

)%

(0.01

)%

0.00

%

Allowance for loan losses to gross loans

1.15

%

1.18

%

1.32

%

(0.03

)%

(0.17

)%

Financial Ratios:

Return on average assets (2)

2.03

%

1.68

%

1.11

%

0.35

%

0.92

%

Return on average equity (2)

21.30

%

17.10

%

10.22

%

4.20

%

11.08

%

Net interest margin (2)

4.21

%

3.98

%

3.66

%

0.23

%

0.55

%

Common equity tier 1 capital ratio

12.63

%

12.62

%

13.67

%

0.01

%

(1.04

)%

Leverage ratio

9.75

%

9.96

%

10.85

%

(0.21

)%

(1.10

)%

Efficiency ratio (3)

47.28

%

52.30

%

55.31

%

(5.02

)%

(8.03

)%

Book value per common share

$

10.48

$

10.04

$

9.36

4.4

%

12.0

%

(1) Includes loans held for sale.

(2) Annualized.

(3) 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 3Q21 vs.

3Q21

2Q21

3Q20

2Q21

3Q20

Interest Income

Interest income

$

17,355

$

15,349

$

13,016

13.1

%

33.3

%

Interest expense

766

763

1,597

0.4

(52.0)

Net interest income

$

16,589

$

14,586

$

11,419

13.7

%

45.3

%

($ in thousands)

For the Three Months Ended

3Q21

2Q21

3Q20

Average

Balance

Interest

Yield/Rate (1)

Average

Balance

Interest

and Fees

Yield/Rate (1)

Average

Balance

Interest

and Fees

Yield/Rate (1)

Interest-earning Assets

Loans

$

1,308,338

$

16,922

5.13

%

$

1,242,058

$

14,971

4.83

%

$

1,062,175

$

12,581

4.72

%

Total interest-earning assets

$

1,565,697

$

17,355

4.40

%

$

1,468,623

$

15,349

4.19

%

$

1,240,871

$

13,016

4.18

%

Interest-bearing Liabilities

Interest-bearing deposits

$

752,010

$

766

0.40

%

$

733,525

$

763

0.42

%

$

663,870

$

1,597

0.96

%

Total interest-bearing liabilities

$

752,010

$

766

0.40

%

$

736,550

$

763

0.42

%

$

673,871

$

1,597

0.94

%

Ratios

Net interest Income/interest rate spreads

$

16,589

4.00

%

$

14,586

3.77

%

$

11,419

3.24

%

Net interest margin

4.21

%

3.98

%

3.66

%

Total deposits / cost of deposits

$

1,448,771

$

766

0.21

%

$

1,348,910

$

763

0.23

%

$

1,124,835

$

1,597

0.56

%

Total funding liabilities / cost of funds

$

1,448,771

$

766

0.21

%

$

1,351,935

$

763

0.23

%

$

1,134,836

$

1,597

0.56

%

(1) Annualized.

($ in thousands)

For the Three Months Ended

Yield % Change 3Q21 vs.

3Q21

2Q21

3Q20

Interest

& Fees

Yield (1)

Interest

& Fees

Yield (1)

Interest

& Fees

Yield (1)

2Q21

3Q20

Loan Yield Component

Contractual interest rate

$

14,251

4.32

%

$

13,189

4.26

%

$

11,715

4.39

%

0.06

%

(0.07

)%

SBA discount accretion

1,584

0.48

1,161

0.38

389

0.15

0.10

0.33

...

Amortization of net deferred fees

1,249

0.38

618

0.20

393

0.15

0.18

0.23

Amortization of premium

(188

)

(0.06

)

(170

)

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