2021 Fourth Quarter Highlights compared with 2020 Fourth
Quarter:
- Financial Results:
- Net income of $9.1 million, up $5.3 million, or 140%
- Diluted earnings per share of $0.59, up $0.34, or 136%
- Net interest income of $17.1 million, up $4.9 million, or
40%
- Provision for loan losses of $1.9 million, up $67 thousand, or
4%
- Noninterest income of $7.3 million, up $3.9 million, or
115%
- Noninterest expense of $9.6 million, up $1.2 million, or
14%
- Pre-provision net revenue (1) of $14.8 million, up
$7.6 million, or 107%
- Total assets of $1.73 billion, up $359.9 million, or 26%
- Total loans (2) of $1.40 billion, up $277.1 million, or
25%; Average loans (2) of $1.34 billion, up $230.5 million, or
21%
- Total deposits of $1.53 billion, up $334.0 million, or 28%;
Average deposits of $1.55 billion, up $365.9 million, or
31%
- Noninterest-bearing deposits to total deposits of 51%, up from
44%
- Net interest margin of 4.07%, up from 3.73%
- Return on average equity of 22.72%, up from 10.72%
- Return on average assets of 2.11%, up from 1.13%
- Efficiency ratio of 39.34%, an improvement from 54.02%
- Credit Quality:
- Allowance for loan losses to gross loans of 1.23%, compared to
1.40%
- Adjusted allowance to gross loans (1) of 1.36%,
compared to 1.54%
- Net loan charge-offs to average gross loans of 0.05%, compared
to 0.00%
- Nonperforming loans to gross loans of 0.24%, compared to
0.09%
- Criticized loans (3) to gross loans of 0.31%, down from
0.71%
- Capital Levels:
- Quarterly cash dividend of $0.10 per share, a 43% increase from
$0.07 per share
- Capital position well-capitalized with a Common Equity Tier 1
(“CET1”) ratio of 12.42%.
- Book value per common share of $10.92, up 14%
- 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.
OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company
of Open Bank, today reported its financial results for the fourth
quarter of 2021. Net income for the fourth quarter of 2021 was $9.1
million, or $0.59 per diluted common share, compared with $8.3
million, or $0.54 per diluted common share, for the third quarter
of 2021, and $3.8 million, or $0.25 per diluted common share, for
the fourth quarter of 2020. Net income for the full year of 2021
was $28.9 million, or $1.88 per diluted common share, compared with
$13.1 million, or $0.85 per diluted common share, for the full year
of 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220127005941/en/
Min Kim, President and Chief Executive Officer: “We are
pleased to report record earnings of $9.1 million, or $0.59 per
diluted common share in the fourth quarter. Our loans and deposits
grew 25% and 28%, respectively, from a year ago. The loan growth
has come from all our loan categories. During the fourth quarter,
we have added a new Specialty Deposit Center, which focuses on
servicing escrow and trust clients. The growth in our
noninterest-bearing deposits during the fourth quarter, which
reached a record level at 51% of total deposits, was largely
attributable to the Specialty Deposit Center. Our efficiency was
also significantly improved as we focused on managing expenses
while growing our revenue-generating activities. The economy seems
poised for continued growth over the next several quarters despite
headwinds related to the Omicron variant, inflation, and supply
chain bottlenecks. We remain optimistic about the future and will
continue to focus on executing our strategic goals while
maintaining appropriate risk and control environment.”
SELECTED FINANCIAL HIGHLIGHTS
($ in thousands, except per share
data)
As of and For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Selected Income Statement Data:
Net interest income
$ 17,096
$ 16,589
$ 12,181
3.1
%
40.3
%
(Reversal of) provision for loan
losses
1,898
(884
)
1,831
(314.7
)
3.7
Noninterest income
7,289
3,542
3,392
105.8
114.9
Noninterest expense
9,591
9,519
8,412
0.8
14.0
Income tax expense
3,747
3,246
1,513
15.4
147.7
Net Income
$ 9,149
$ 8,250
$ 3,817
10.9
%
139.7
%
Diluted earnings per share
$ 0.59
$ 0.54
$ 0.25
9.3
%
136.0
%
Selected Balance Sheet Data:
Total loans (1)
$ 1,403,447
$ 1,326,287
$ 1,126,395
5.8
%
24.6
%
Total deposits
$ 1,534,066
$ 1,496,406
$ 1,200,090
2.5
%
27.8
%
Total assets
$ 1,726,706
$ 1,679,911
$ 1,366,826
2.8
%
26.3
%
Average loans (1)
$ 1,343,414
$ 1,308,338
$ 1,112,889
2.7
%
20.7
%
Average deposits
$ 1,545,799
$ 1,448,771
$ 1,179,877
6.7
%
31.0
%
Credit Quality:
Nonperforming loans
$ 3,202
$ 1,052
$ 985
204.4
%
225.1
%
Net charge-offs (recoveries) to average
gross loans (2)
0.05
%
(0.00
)%
0.00
%
0.05
%
0.05
%
Allowance for loan losses to gross
loans
1.23
%
1.15
%
1.40
%
0.08
%
(0.17
) %
Financial Ratios:
Return on average assets (2)
2.11
%
2.03
%
1.13
%
0.08
%
0.98
%
Return on average equity (2)
22.72
%
21.30
%
10.72
%
1.42
%
12.00
%
Net interest margin (2)
4.07
%
4.21
%
3.73
%
(0.14
) %
0.34
%
Common equity tier 1 capital ratio
12.42
%
12.63
%
13.56
%
(0.21
) %
(1.14
) %
Leverage ratio
9.58
%
9.75
%
10.55
%
(0.17
) %
(0.97
) %
Efficiency ratio (3)
39.34
%
47.28
%
54.02
%
(7.94
) %
(14.68
) %
Book value per common share
$ 10.92
$ 10.48
$ 9.55
4.2
%
14.3
%
(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 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Interest Income
Interest income
$ 17,822
$ 17,355
$ 13,375
2.7
%
33.2
%
Interest expense
726
766
1,194
(5.2
)
(39.2
)
Net interest income
$ 17,096
$ 16,589
$ 12,181
3.1
%
40.3
%
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
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
$ 1,343,414
$ 17,271
5.10
%
$ 1,308,338
$ 16,922
5.13
%
$ 1,112,889
$ 13,006
4.65
%
Total interest-earning assets
$ 1,668,865
$ 17,822
4.24
%
$ 1,566,050
$ 17,355
4.40
%
$ 1,299,347
$ 13,375
4.10
%
Interest-bearing Liabilities
Interest-bearing deposits
$ 780,787
$ 726
0.37
%
$ 752,010
$ 766
0.40
%
$ 672,183
$ 1,194
0.71
%
Total interest-bearing liabilities
$ 780,791
$ 726
0.37
%
$ 752,010
$ 766
0.40
%
$ 680,121
$ 1,194
0.70
%
Ratios
Net interest Income/interest rate
spreads
$ 17,096
3.87
%
$ 16,589
4.00
%
$ 12,181
3.40
%
Net interest margin
4.07
%
4.21
%
3.73
%
Total deposits / cost of deposits
$ 1,545,799
$ 726
0.19
%
$ 1,448,771
$ 766
0.21
%
$ 1,179,877
$ 1,194
0.40
%
Total funding liabilities / cost of
funds
$ 1,545,803
$ 726
0.19
%
$ 1,448,771
$ 766
0.21
%
$ 1,187,815
$ 1,194
0.40
%
(1)
Annualized.
($ in thousands)
For the Three Months
Ended
Yield % Change 4Q21
vs.
4Q21
3Q21
4Q20
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
3Q21
4Q20
Loan Yield Component
Contractual interest rate
$ 14,509
4.29
%
$ 14,063
4.27
%
$ 12,156
4.35
%
0.02
%
(0.06
) %
SBA discount accretion
1,571
0.46
1,584
0.48
619
0.22
(0.02
)
0.24
Amortization of net deferred fees
1,087
0.32
1,249
0.37
242
0.09
(0.05
)
0.23
Amortization of premium
3
—
—
—
—
—
0.00
—
Net interest recognized on nonaccrual
loans
(16
)
-0.00
(15
)
-0.00
(20
)
-0.01
0.00
0.00
Prepayment penalties (2) and other
fees
117
0.03
41
0.01
9
—
0.02
0.03
Yield on loans
$ 17,271
5.10
%
$ 16,922
5.13
%
$ 13,006
4.65
%
(0.03
) %
0.44
%
Amortization of net deferred fees:
PPP loan forgiveness (3)
$ 920
0.27
%
$ 1,006
0.31
%
$ —
—
%
(0.04
) %
0.27
%
Other
167
0.05
243
0.07
242
0.09
(0.02
)
(0.04
)
Total amortization of net deferred
fees
$ 1,087
0.32
%
$ 1,249
0.38
%
$ 242
0.09
%
(0.06
) %
0.23
%
(1)
Annualized.
(2)
Prepayment penalty income of $84 thousand
for the three months ended December 31, 2021 was from commercial
real estate and C&I loans. In comparison, there was no
prepayment penalty income for the three months ended September 30,
2021 and December 31, 2020.
(3)
As of December 31, 2021, there were
unamortized net deferred fees of $1.1 million to be recognized over
the estimated life of the loans as a yield adjustment on the
loans.
Impact of Loan Purchase on Average Loan Yield and Net
Interest Margin
During the second quarter of 2021, the Company purchased an SBA
portfolio of 638 loans with an ending balance of $100.0 million,
excluding loan discount of $8.9 million from Hana Small Business
Lending, Inc. (“Hana”). The following table presents impacts of the
Hana loan purchase on average loan yield and net interest
margin:
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
Hana Loan Purchase:
Contractual interest rate
$ 1,027
$ 1,094
Purchased loan discount accretion
826
948
Other fees
10
15
Total interest income
$ 1,863
$ 2,057
Effect on average loan yield
(1)
0.26
%
0.30
%
Effect on net interest margin
(1)
0.26
%
0.30
%
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
and Fees
Yield/
Rate
Average
Balance
Interest
and Fees
Yield/
Rate
Average loan yield (1)
$ 1,343,414
$ 17,271
5.10
%
$ 1,308,338
$ 16,922
5.13
%
$ 1,112,889
$ 13,006
4.65
%
Adjusted average loan yield excluding
purchased loans (1)(2)
$ 1,263,789
$ 15,408
4.84
%
$ 1,222,628
$ 14,865
4.83
%
$ 1,112,889
$ 13,006
4.65
%
Net interest margin (1)
$ 1,668,865
$ 17,096
4.07
%
$ 1,566,050
$ 16,589
4.21
%
$ 1,299,347
$ 12,181
3.73
%
Adjusted interest margin excluding
purchased loans (1)(2)
$ 1,589,240
$ 15,233
3.81
%
$ 1,480,340
$ 14,532
3.91
%
$ 1,299,347
$ 12,181
3.73
%
(1)
Annualized.
(2)
See reconciliation of GAAP to non-GAAP
financial measures.
In addition, the Company purchased home mortgage loans with
unpaid principal balance of $48.9 million from third-party sellers
in December 2021. Because these loans generally earn interest at a
rate that is higher than current market rates, the loans were
purchased at a premium to par, resulting in a total purchase price
of $49.5 million. The Company amortizes the purchase premium over
the expected life of the portfolio using the interest method of
accounting.
Fourth Quarter 2021 vs. Third Quarter
2021
Net interest income increased $507 thousand, or 3%, primarily
due to higher interest income on loans. Net interest margin was
4.07%, a decrease of 14 basis points from 4.21%.
- An increase of $349 thousand in interest income from loans was
primarily due to higher average balances from C & I loan growth
and higher contractual loan yield from loan composition change
driven by a decrease in lower-yielding PPP balances.
- A decrease of 14 basis points in net interest margin was
primarily due to a 16 basis point decrease in the yield on average
interest-earning assets driven by higher average balances on
lower-yielding cash equivalents.
- Average loan yield was 5.10%, a decrease of three basis points
from 5.13%, reflecting lower loan fees from PPP loan
forgiveness.
- Average cost of deposits was 0.19%, a decrease of two basis
points from 0.21%.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Net interest income increased $4.9 million, or 40%, primarily
due to higher average loan balance and SBA discount accretion
largely resulting from the Hana loan purchase, as well as higher
loan fees from PPP loan forgiveness. Net interest margin was 4.07%,
an increase of 34 basis points from 3.73%.
- An increase of $4.3 million in interest income from loans was
primarily due to average loan growth. SBA discount accretions from
the Hana loan purchase and loan fees from PPP loan forgiveness have
also contributed to the increase.
- The improvement of 34 basis points in net interest margin was
primarily driven by a 33 basis point decrease in the cost of
interest-bearing liabilities.
- Average loan yield was 5.10%, an increase of 45 basis points
from 4.65%, reflecting higher SBA discount accretions from the Hana
loan purchase, and higher loan fees from PPP loan forgiveness.
- Average cost of deposits was 0.19%, a decrease of 21 basis
points from 0.40%. The decrease in the cost of deposits primarily
reflects the impact of lower interest rates and an increase of
noninterest bearing deposits in deposit mix.
Provision for loan losses
Fourth Quarter 2021 vs. Third Quarter
2021
The Company recorded $1.9 million provision for loan losses,
compared with a negative $884 thousand provision for loan losses.
The $1.9 million provision for loan losses was primarily due to
loan growth from new warehouse lines of credit and home mortgage
purchases.
Fourth Quarter 2021 vs. Fourth Quarter
2020
The Company recorded $1.9 million provision for loan losses,
compared with $1.8 million provision for loan losses.
Noninterest Income
($ in thousands)
For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Noninterest income
Service charges on deposits
$ 405
$ 409
$ 367
(1.0
) %
10.4
%
Loan servicing fees, net of
amortization
521
599
367
(13.0
)
42.0
Gain on sale of loans
6,033
2,188
2,188
175.7
175.7
Other income
330
346
470
(4.6
)
(29.8
)
Total noninterest income
$ 7,289
$ 3,542
$ 3,392
105.8
%
114.9
%
Fourth Quarter 2021 vs. Third Quarter
2021
Noninterest income increased $3.7 million, or 106%, primarily
due to higher gains on sale of loans.
- Gains on sale of loans were $6.0 million, up $3.8 million from
third quarter 2021. The increase was primarily due to an increased
sales volume. The Company sold $56.8 million in SBA loans at an
average premium of 10.98%, compared with the sale of $20.6 million
at an average premium of 11.59%.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Noninterest income increased $3.9 million, or 115%, primarily
due to higher gains on sale of loans.
- Gains on sales of loans were $6.0 million, up $3.8 million from
fourth quarter 2020. The increase was mainly driven by higher sales
volume and premiums on SBA loans. The Company sold $56.8 million in
SBA loans at an average premium of 10.98%, compared with the sale
of $28.5 million at an average premium of 8.83%.
Noninterest Expense
($ in thousands)
For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Noninterest expense
Salaries and employee benefits
$ 5,560
$ 5,724
$ 5,536
(2.9
) %
0.4
%
Occupancy and equipment
1,418
1,326
1,237
6.9
14.6
Data processing and communication
637
448
435
42.2
46.4
Professional fees
267
308
265
(13.3
)
0.8
FDIC insurance and regulatory
assessments
182
146
115
24.7
58.3
Promotion and advertising
156
175
62
(10.9
)
151.6
Directors’ fees
166
183
97
(9.3
)
71.1
Foundation donation and other
contributions
901
842
400
7.0
125.3
Other expenses
304
367
265
(17.2
)
14.7
Total noninterest expense
$ 9,591
$ 9,519
$ 8,412
0.8
%
14.0
%
Fourth Quarter 2021 vs. Third Quarter
2021
Noninterest expense remained relatively stable in the fourth
quarter of 2021 at $9.6 million compared to $9.5 million for the
third quarter of 2021.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Noninterest expense increased $1.2 million, or 14%, primarily
due to a higher foundation donation and other contributions.
- Foundation donation and other contributions were $901 thousand,
up $501 thousand from fourth quarter 2020. The increase was
primarily due to higher donation accruals for Open Stewardship
Foundation as a result of higher net income compared to fourth
quarter 2020.
- Data processing and communication, and occupancy and equipment
also increased $202 thousand and $181 thousand, respectively,
primarily to support balance sheet growth.
Income Tax Expense
Fourth Quarter 2021 vs. Third Quarter
2021
Income tax expense was $3.7 million, and the effective tax rate
was 29%, compared to income tax expense of $3.2 million and the
effective rate of 28% for third quarter 2021.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Income tax expense was $3.7 million, and the effective tax rate
was 29%, compared to income tax expense of $1.5 million and the
effective rate of 28% for fourth quarter 2020.
BALANCE SHEET HIGHLIGHTS
Loans
($ in thousands)
As of
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Real estate loans
$ 701,450
$ 688,430
$ 651,684
1.9
%
7.6
%
SBA loans (1)
275,858
303,625
211,375
(9.1
)
30.5
C & I loans
162,543
123,422
107,307
31.7
51.5
Home mortgage loans
173,303
115,255
128,212
50.4
35.2
Consumer & other loans
865
1,089
1,158
(20.6
)
(25.3
)
Gross loans
$ 1,314,019
$ 1,231,821
$ 1,099,736
6.7
%
19.5
%
(1)
Includes PPP loans of $40.6 million, $69.3
million and $64.9 million as of December 31, 2021, September 30,
2021 and December 31, 2020, respectively.
The following table presents new loan originations based on loan
commitment amounts for the periods indicated:
($ in thousands)
For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Real estate loans
$ 35,458
$ 27,671
$ 30,828
28.1
%
15.0
%
SBA loans
65,492
57,541
16,634
13.8
293.7
C & I loans
47,981
54,264
47,308
(11.6
)
1.4
Home mortgage loans
19,295
13,437
17,027
43.6
13.3
Gross loans
$ 168,226
$ 152,913
$ 111,797
10.0
%
50.5
%
The following table presents changes in gross loans by loan
activity for the periods indicated:
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
Gross loans, beginning
$ 1,231,821
$ 1,245,866
$ 1,072,790
Loan activities:
New originations
168,226
152,913
111,797
Net line advances
7,759
(24,017
)
(17,276
)
Purchases
48,915
—
—
Sales
(66,956
)
(22,506
)
(33,826
)
Paydowns
(12,373
)
(14,675
)
(8,682
)
Payoffs
(46,818
)
(46,409
)
(41,157
)
PPP Payoffs
(29,918
)
(36,108
)
—
Other
13,363
(23,243
)
16,090
Total
82,198
(14,045
)
26,946
Gross loans, ending
$ 1,314,019
$ 1,231,821
$ 1,099,736
Fourth Quarter 2021 vs. Third Quarter
2021
Gross loan balances were $1.31 billion at December 31, 2021, up
$82.2 million from September 30, 2021, primarily due to home
mortgage loan purchases and an increase in C&I loans, partially
offset by PPP loan forgiveness. During fourth quarter 2021, $29.9
million of PPP loans outstanding were forgiven by the Small
Business Administration. New loan originations and loan payoffs
were $168.2 million and $76.7 million for fourth quarter 2021,
compared with $152.9 million and $82.5 million for third quarter
2021, respectively.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Gross loan balances were $1.31 billion at December 31, 2021, up
$214.3 million from December 31, 2020, primarily due to the Hana
and home mortgage loan purchases during 2021 and broad-based growth
in C & I and real estate loans. For the year ended December 31,
2021, $118.7 million of PPP loans outstanding were forgiven by the
Small Business Administration. New loan originations and loan
payoffs were $168.2 million and $76.7 million for fourth quarter
2021, compared with $111.8 million and $41.2 million for fourth
quarter 2020, respectively.
The following table presents the composition of gross loans by
interest rate type accompanied with the weighted average
contractual rates as of the periods indicated:
($ in thousands)
As of
4Q21
3Q21
4Q20
%
Rate
%
Rate
%
Rate
Fixed rate
31.5
%
4.12
%
32.2
%
4.05
%
34.4
%
4.09
%
Hybrid rate
22.8
4.45
22.4
4.55
21.9
4.92
Variable rate
45.7
4.94
45.4
5.08
43.7
4.40
Gross loans
100.0
%
4.57
%
100.0
%
4.63
%
100.0
%
4.40
%
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,
2021
Within One Year
One Year Through Five
Years
After Five Years
Total
Amount
Rate
Amount
Rate
Amount
Rate
Amount
Rate
Fixed rate
$ 34,658
4.33
%
$ 314,815
4.00
%
$ 64,563
4.56
%
$ 414,036
4.12
%
Hybrid rate
11,972
3.29
43,004
5.33
244,690
4.36
299,666
4.45
Variable rate
131,374
3.86
165,102
4.02
303,841
5.90
600,317
4.94
Gross loans
$ 178,004
3.92
%
$ 522,921
4.12
%
$ 613,094
5.14
%
$ 1,314,019
4.57
%
Deposits
($ in thousands)
As of
% Change 4Q21 vs.
4Q21
3Q21
4Q20
Amount
%
Amount
%
Amount
%
3Q21
4Q20
Noninterest-bearing deposits
$ 774,754
50.5
%
$ 713,141
47.6
%
$ 522,754
43.5
%
8.6
%
48.2
%
Money market deposits and others
380,226
24.8
351,186
23.5
328,323
27.4
8.3
15.8
Time deposits
379,086
24.7
432,079
28.9
349,013
29.1
(12.3
)
8.6
Total deposits
$ 1,534,066
100.0
%
$ 1,496,406
100.0
%
$ 1,200,090
100.0
%
2.5
%
27.8
%
Fourth Quarter 2021 vs. Third Quarter
2021
Deposit balances were $1.53 billion at December 31, 2021, up
$37.7 million from September 30, 2021, primarily driven by growth
in noninterest-bearing and money market deposits, partially offset
by time deposits. Noninterest-bearing deposits reached a record
$774.8 million or 51% of total deposits as of December 31, 2021, up
from $713.1 million or 48% of total deposits as of September 30,
2021. The growth in noninterest-bearing deposits was primarily due
to addition of new customers from a new Specialty Deposit Center,
which was added during fourth quarter 2021.
Fourth Quarter 2021 vs. Fourth Quarter
2020
Deposit balances were $1.53 billion at December 31, 2021, up
$334.0 million from December 31, 2020, primarily driven by growth
in noninterest-bearing deposits. Noninterest-bearing deposits were
$774.8 million or 51% of total deposits, up from $522.8 million or
44% of total deposits as of December 31, 2020. Deposit growth was
primarily driven by continued customer preferences for liquidity
given the sustained economic uncertainty associated with the
COVID-19 pandemic.
The following table sets forth the maturity of time deposits as
of December 31, 2021:
As of December 31,
2021
(Dollars in thousands)
Within Three
Months
Three to
Six Months
Six to Nine Months
Nine to 12
Months
After
12 Months
Total
Time deposits (more than $250,000)
$ 99,381
$ 33,645
$ 42,025
$ 30,929
$ 1,308
$ 207,288
Time deposits ($250,000 or less)
49,086
39,434
42,956
33,454
6,868
171,798
Total time deposits
$ 148,467
$ 73,079
$ 84,981
$ 64,383
$ 8,176
$ 379,086
Weighted average rate
0.31
%
0.54
%
0.52
%
0.45
%
1.41
%
0.45
%
Capital and Cash Dividend
Basel III
OP Bancorp
Open Bank
Well
Capitalized
Ratio
Minimum
Capital Ratio+
Conservation
Buffer (1)
Risk-Based Capital Ratios:
Total risk-based capital ratio
13.66
%
13.47
%
10.00
%
10.50
%
Tier 1 risk-based capital ratio
12.42
%
12.23
%
8.00
%
8.50
%
Common equity tier 1 ratio
12.42
%
12.23
%
6.50
%
7.00
%
Leverage ratio
9.58
%
9.44
%
5.00
%
4.00
%
(1)
An additional 2.5% capital conservation
buffer above the minimum capital ratios are required in order to
avoid limitations on distributions, including dividend payments and
certain discretionary bonus to executive officers.
($ in thousands)
Basel III
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Risk-Based Capital Ratios:
Total risk-based capital ratio
13.66
%
13.81
%
14.81
%
(0.15
) %
(1.15
) %
Tier 1 risk-based capital ratio
12.42
%
12.63
%
13.56
%
(0.21
) %
(1.14
) %
Common equity tier 1 ratio
12.42
%
12.63
%
13.56
%
(0.21
) %
(1.14
) %
Leverage ratio
9.58
%
9.75
%
10.55
%
(0.17
) %
(0.97
) %
Risk-weighted Assets
$ 1,335,889
$ 1,251,867
$ 1,048,275
6.71
%
27.44
%
Capital ratios remained strong during the quarter. Our CET1 and
total risk-based capital ratios were 12.42% and 13.66% as of
December 31, 2021, respectively, down from a year ago due to
year-over-year asset growth.
The Company’s Board of Directors has declared a quarterly cash
dividend of $0.10 per share of its common stock. The cash dividend
is payable on or about February 24, 2022 to all shareholders of
record as of the close of business on February 10, 2022.
The Company did not repurchase any shares during fourth quarter
2021. Since the announcement of the initial stock repurchase
program in January 2019, the Company has repurchased a total of
1.57 million shares of its common stock at an average repurchase
price of $8.58 per share through December 31, 2021.
Asset Quality
($ in thousands)
As of and For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Nonperforming loans (1)
$ 3,202
$ 1,052
$ 985
204.4
%
225.1
%
OREO
—
—
—
—
—
Total nonperforming assets
$ 3,202
$ 1,052
$ 985
204.4
%
225.1
%
Nonperforming loans to gross loans
0.24
%
0.09
%
0.09
%
0.15
%
0.15
%
Nonperforming assets to total assets
0.19
%
0.06
%
0.07
%
0.13
%
0.12
%
Criticized (2) Loan:
Special mention loans
$ —
$ —
$ 535
—
%
(100.0
) %
Classified loans (3)
4,039
2,191
7,325
84.3
(44.9
)
Total criticized loans
$ 4,039
$ 2,191
$ 7,860
84.3
%
(48.6
) %
Criticized (2) loans to gross loans
0.31
%
0.18
%
0.71
%
0.13
%
(0.40
) %
Classified loans (3) to gross loans
0.31
%
0.18
%
0.67
%
0.13
%
(0.36
) %
Allowance for loan losses, beginning
$ 14,134
$ 14,687
$ 14,164
(3.8
) %
(0.2
) %
Provision for (reversal of) loan losses
(4)
2,157
(557
)
1,188
(487.3
)
81.6
Gross charge-offs
(168
)
—
—
100.0
100.0
Gross recoveries
—
4
—
(100.0
)
—
Allowance for loan losses, ending (5)
$ 16,123
$ 14,134
$ 15,352
14.1
%
5.0
%
Allowance for loan losses ratios:
As a % of gross loans
1.23
%
1.15
%
1.40
%
0.08
%
(0.17
) %
As an adjusted of gross loans (6)
1.36
%
1.34
%
1.54
%
0.02
%
(0.18
) %
As a % of nonperforming loans
503
%
1,344
%
1,559
%
(841
) %
(1,056
) %
As a % of nonperforming assets
503
%
1,344
%
1,559
%
(841
) %
(1,056
) %
Net charge-offs (recoveries) to average
gross loans
0.05
%
(0.00
)%
0.00
%
0.05
%
0.05
%
(1)
Includes the guaranteed portion of SBA
loans totaling $1.2 million as of December 31, 2021.
(2)
Includes special mention, substandard,
doubtful and loss categories.
(3)
Includes substandard, doubtful and loss
categories.
(4)
Excludes (reversal of) provision for
uncollectible accrued interest receivable of $(259) thousand,
$(327) thousand and $643 thousand for the three months ended
December 31, 2021, September 30, 2021, and
December 31, 2020, respectively.
(5)
Excludes allowance for uncollectible
accrued interest receivable of $205 thousand, $465 thousand and
$643 thousand as of December 31, 2021, September 30, 2021
and December 31, 2020, respectively.
(6)
See the Reconciliation of GAAP to NON-GAAP
Financial Measures.
Overall, the Company continued to maintain solid asset quality
with low levels of nonperforming loans and net charge-offs.
Nonperforming assets and criticized loans remained below our
historical norms, a reflection of our conservative credit culture
and expertise in the industries we serve. Our allowance remained
strong with an adjusted allowance to gross loans ratio of 1.36%. We
expect economic metrics to remain relatively strong over the next
year, which bodes well for growth.; however, we remain vigilant
given potential impacts on our customers from supply chain and
labor constraints as well as COVID variants.
- Allowance for loan losses increased $771 thousand to $16.1
million from a year ago. Excluding the impacts of the purchased
Hana loans, PPP loans, and the allowance for uncollectible accrued
interest receivable, adjusted allowance to gross loans ratio was
1.36% as of December 31, 2021.
- Criticized loans decreased by $3.8 million or 49% from a year
ago, and the criticized loans to gross loans ratio improved by 40
basis points, primarily due to a $3.8 million payoff in one C&I
relationship. Criticized loans are generally consistent with the
Special Mention, Substandard, Doubtful and Loss categories defined
by regulatory authorities.
- Nonperforming assets increased $2.2 million to $3.2 million, or
0.19% of total assets from a year ago. The increase in
nonperforming assets was primarily due to SBA loans that were
placed on nonaccrual in 2021. As of December 31, 2021, $1.0 million
of nonaccrual loans was the guaranteed portion of SBA loans that
are in liquidation. The Company did not have OREO as of December
31, 2021 or 2020.
- Net charge-offs were $168 thousand or 0.05% of average loans.
In comparison, there were no net charge-offs recorded in the fourth
quarter 2020.
COVID-19 Pandemic Update
($ in thousands)
Total deferments
under the CARES Act
through December 31,
2021
Payment resumed
or paid off
through December 31,
2021
Remaining deferments
as of December 31,
2021
Number
of
accounts
Balance
Number
of
accounts
Balance
Number
of
accounts
Balance
Loan Type
Loans, excluding home mortgage and
consumer loans
157
$ 220,553
154
$ 215,509
3
$ 5,044
Home mortgage loans
69
30,205
69
30,205
—
—
Total
226
$ 250,758
223
$ 245,714
3
$ 5,044
Total outstanding balance of loans remaining in deferment status
as of December 31, 2021, represented 0.4% of the total loan
portfolio.
The Company continues to carefully monitor the trajectory of the
economic recovery, which could be impacted by the emergence of new
variants and continued spread of COVID-19. In addition, we continue
to support our clients, employees, and communities.
Since the PPP’s inception through December 31, 2021, we have
funded $154.5 million, and $118.7 million of principal forgiveness
has been provided on qualifying PPP loans. There were no new PPP
loans during the fourth quarter of 2021.
Reconciliation of GAAP to Non-GAAP Financial Measures
In addition to GAAP measures, management uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company’s performance.
Pre-provision net revenue removes provision for loan losses and
income tax expense. Management believes that this non-GAAP measure,
when taken together with the corresponding GAAP financial measures
(as applicable), provides meaningful supplemental information
regarding our performance. This non-GAAP financial measure also
facilitates a comparison of our performance to prior periods.
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
Interest income
$ 17,822
$ 17,355
$ 13,375
Interest expense
726
766
1,194
Net interest income
17,096
16,589
12,181
Noninterest income
7,289
3,542
3,392
Noninterest expense
9,591
9,519
8,412
Pre-provision net revenue
(a)
$ 14,794
$ 10,612
$ 7,161
Reconciliation to Net Income:
(Reversal of) provision for loan
losses
(b)
$ 1,898
$ (884
)
$ 1,831
Income tax expense
(c)
3,747
3,246
1,513
Net Income
(a) - (b) - (c)
$ 9,149
$ 8,250
$ 3,817
During the second quarter of 2021, the Company purchased 638
loans from Hana for a total purchase price of $97.6 million. The
Company evaluated $100.0 million of the loans purchased in
accordance with the provisions of ASC 310-20, Nonrefundable Fees
and Other Costs, which were recorded with a $8.9 million discount.
As a result, the fair value discount on these loans is being
accreted into interest income over the expected life of the loans
using the effective yield method. Adjusted loan yield and net
interest margin for the three months ended December 31, 2021 and
September 30, 2021 excluded the impacts of contractual interest and
discount accretion of the purchased loans as management does not
consider purchasing loan portfolios to be normal or recurring
transactions. Management believes that presenting the adjusted
average loan yield and net interest margin provide comparability to
prior periods and these non-GAAP financial measures provide
supplemental information regarding the Company’s performance.
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
Yield on Average Loans
Interest income on loans
$ 17,271
$ 16,922
$ 13,006
Less: interest income on purchased
loans
1,863
2,057
—
Adjusted interest income on
loans
(a)
$ 15,408
$ 14,865
$ 13,006
Average loans
$ 1,343,414
$ 1,308,338
$ 1,112,889
Less: Average purchased loans
79,625
85,710
—
Adjusted average loans
(b)
$ 1,263,789
$ 1,222,628
$ 1,112,889
Average loan yield (1)
5.10
%
5.13
%
4.65
%
Effect on average loan yield
(1)
0.26
0.30
—
Adjusted average loan yield (1)
(a)/(b)
4.84
%
4.83
%
4.65
%
Net Interest Margin
Net interest income
$ 17,096
$ 16,589
$ 12,181
Less: interest income on purchased
loans
1,863
2,057
—
Adjusted net interest income
(c)
$ 15,233
$ 14,532
$ 12,181
Average interest-earning assets
$ 1,668,865
$ 1,566,050
$ 1,299,347
Less: Average purchased loans
79,625
85,710
—
Adjusted average interest-earning
assets
(d)
$ 1,589,240
$ 1,480,340
$ 1,299,347
Net interest margin (1)
4.07
%
4.21
%
3.73
%
Effect on net interest margin
(1)
0.26
0.30
—
Adjusted net interest margin
(1)
(c)/(d)
3.81
%
3.91
%
3.73
%
(1)
Annualized.
Adjusted allowance to gross loans ratio removes the impacts of
purchased loans, PPP loans and allowance on accrued interest
receivable. Management believes that this ratio provides greater
consistency and comparability between the Company’s results and
those of its peer banks.
($ in thousands)
As of
4Q21
3Q21
4Q20
Gross loans
$ 1,314,019
$ 1,231,821
$ 1,099,736
Less: Purchased loans
(77,170
)
(83,025
)
—
PPP loans (1)
(38,918
)
(64,574
)
(64,906
)
Adjusted gross loans
(a)
$ 1,197,931
$ 1,084,222
$ 1,034,830
Accrued interest receivable on loans
$ 4,231
$ 3,659
$ 3,729
Less: Accrued interest receivable on
purchased loans
(340
)
(375
)
—
Accrued interest receivable on PPP loans
(2)
(340
)
(416
)
(445
)
Add: Allowance on accrued interest
receivable
205
465
643
Adjusted accrued interest receivable on
loans
(b)
$ 3,756
$ 3,333
$ 3,927
Adjusted gross loans and accrued
interest receivable
(a) + (b) = (c)
$ 1,201,687
$ 1,087,555
$ 1,038,757
Allowance for loan losses
$ 16,123
$ 14,134
$ 15,352
Add: Allowance on accrued interest
receivable
205
465
643
Adjusted Allowance
(d)
$ 16,328
$ 14,599
$ 15,995
Adjusted allowance to gross loans
ratio
(d)/(c)
1.36
%
1.34
%
1.54
%
(1)
Excludes purchased PPP loans of $1.7
million and $4.7 million as of December 31, 2021 and September 30,
2021, respectively.
(2)
Excludes purchased accrued interest
receivable on PPP loans of $15 thousand and $30 thousand as of
December 31, 2021 and September 30, 2021, respectively.
About OP Bancorp
OP Bancorp, the holding company for Open Bank (the “Bank”), is a
California corporation whose common stock is quoted on the Nasdaq
Global Market under the ticker symbol, “OPBK.” The Bank is engaged
in the general commercial banking business in Los Angeles, Orange,
and Santa Clara Counties, California, and Carrollton, Texas and is
focused on serving the banking needs of small- and medium-sized
businesses, professionals, and residents with a particular emphasis
on Korean and other ethnic minority communities. The Bank currently
operates with nine full branch offices in Downtown Los Angeles, Los
Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena
Park, and Santa Clara, California and Carrollton, Texas. The Bank
also has four loan production offices in Atlanta, Georgia, Aurora,
Colorado, and Lynnwood and Seattle, Washington. The Bank commenced
its operations on June 10, 2005 as First Standard Bank and changed
its name to Open Bank in October 2010. Its headquarters is located
at 1000 Wilshire Blvd., Suite 500, Los Angeles, California 90017.
Phone 213.892.9999; www.myopenbank.com
Member FDIC, Equal Housing Lender.
Cautionary Note Regarding Forward-Looking Statements
Certain matters set forth herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, including forward-looking statements relating
to the Company’s current business plans and expectations regarding
future operating results. These forward-looking statements are
subject to risks and uncertainties that could cause actual results,
performance or achievements to differ materially from those
projected. These risks and uncertainties, some of which are beyond
our control, include, but are not limited to: the uncertainties
related to the coronavirus pandemic including, but not limited to,
the potential adverse effect of the pandemic on the economy, our
employees and customers, and our financial performance; the impact
of the federal CARES Act and the significant additional lending
activities undertaken by the Company in connection with the Small
Business Administration’s Paycheck Protection Program enacted
thereunder, including risks to the Company with respect to the
uncertain application by the Small Business Administration of new
borrower and loan eligibility, forgiveness and audit criteria;
business and economic conditions, particularly those affecting the
financial services industry and our primary market areas; our
ability to successfully manage our credit risk and the sufficiency
of our allowance for loan losses; factors that can impact the
performance of our loan portfolio, including real estate values and
liquidity in our primary market areas, the financial health of our
commercial borrowers, the success of construction projects that we
finance, including any loans acquired in acquisition transactions;
our ability to effectively execute our strategic plan and manage
our growth; interest rate fluctuations, which could have an adverse
effect on our profitability; liquidity issues, including
fluctuations in the fair value and liquidity of the securities we
hold for sale and our ability to raise additional capital, if
necessary; external economic and/or market factors, such as changes
in monetary and fiscal policies and laws, including the interest
rate policies of the Federal Reserve, inflation or deflation,
changes in the demand for loans, and fluctuations in consumer
spending, borrowing and savings habits, which may have an adverse
impact on our financial condition; continued or increasing
competition from other financial institutions, credit unions, and
non-bank financial services companies, many of which are subject to
different regulations than we are; challenges arising from
unsuccessful attempts to expand into new geographic markets,
products, or services; restraints on the ability of Open Bank to
pay dividends to us, which could limit our liquidity; increased
capital requirements imposed by banking regulators, which may
require us to raise capital at a time when capital is not available
on favorable terms or at all; a failure in the internal controls we
have implemented to address the risks inherent to the business of
banking; inaccuracies in our assumptions about future events, which
could result in material differences between our financial
projections and actual financial performance; changes in our
management personnel or our inability to retain motivate and hire
qualified management personnel; disruptions, security breaches, or
other adverse events, failures or interruptions in, or attacks on,
our information technology systems; disruptions, security breaches,
or other adverse events affecting the third-party vendors who
perform several of our critical processing functions; an inability
to keep pace with the rate of technological advances due to a lack
of resources to invest in new technologies; risks related to
potential acquisitions; political developments, uncertainties or
instability, catastrophic events, acts of war or terrorism, or
natural disasters, such as earthquakes, fires, drought, pandemic
diseases (such as the coronavirus) or extreme weather events, any
of which may affect services we use or affect our customers,
employees or third parties with which we conduct business;
incremental costs and obligations associated with operating as a
public company; the impact of any claims or legal actions to which
we may be subject, including any effect on our reputation;
compliance with governmental and regulatory requirements, including
the Dodd-Frank Act and others relating to banking, consumer
protection, securities and tax matters, and our ability to maintain
licenses required in connection with commercial mortgage
origination, sale and servicing operations; changes in federal tax
law or policy; and our ability the manage the foregoing and other
factors set forth in the Company’s public reports. We describe
these and other risks that could affect our results in Item 1A.
“Risk Factors,” of our latest Annual Report on Form 10-K for the
year ended December 31, 2020 and in our other subsequent filings
with the Securities and Exchange Commission.
Consolidated Balance Sheet (unaudited) ($ in
thousands)
As of
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Assets
Cash and due from banks
$ 11,283
$ 17,617
$ 12,622
(36.0
) %
(10.6
) %
Interest-bearing deposits in other
banks
104,176
170,528
93,688
(38.9
)
11.2
Cash and cash equivalents
115,459
188,145
106,310
(38.6
)
8.6
Available-for-sale debt securities, at
fair value
150,444
102,535
91,791
46.7
63.9
Other investments
10,999
11,025
10,101
(0.2
)
8.9
Loans held for sale
89,428
94,466
26,659
(5.3
)
235.5
Real estate loans
701,450
688,430
651,684
1.9
7.6
SBA loans (1)
275,858
303,625
211,375
(9.1
)
30.5
C & I loans
162,543
123,422
107,307
31.7
51.5
Home mortgage loans
173,303
115,255
128,212
50.4
35.2
Consumer & other loans
865
1,089
1,158
(20.6
)
(25.3
)
Gross loans, net of unearned income
1,314,019
1,231,821
1,099,736
6.7
19.5
Allowance for loan losses
(16,123
)
(14,134
)
(15,352
)
14.1
5.0
Net loans receivable
1,297,896
1,217,687
1,084,384
6.6
19.7
Premises and equipment, net
4,355
4,199
4,544
3.7
(4.2
)
Accrued interest receivable, net
4,579
3,931
3,985
16.5
14.9
Servicing assets
12,720
12,389
7,360
2.7
72.8
Company owned life insurance
11,134
11,070
10,879
0.6
2.3
Deferred tax assets
8,424
5,247
5,242
60.5
60.7
Operating right-of-use assets
8,905
9,270
6,786
(3.9
)
31.2
Other assets
12,363
19,947
8,785
(38.0
)
40.7
Total assets
$ 1,726,706
$ 1,679,911
$ 1,366,826
2.8
%
26.3
%
Liabilities and Shareholders'
Equity
Noninterest-bearing deposits
$ 774,754
$ 713,141
$ 522,754
8.6
%
48.2
%
Money market deposits and others
380,226
351,186
328,323
8.3
15.8
Time deposits over $250,000
207,288
209,091
200,210
(0.9
)
3.5
Other time deposits
171,798
222,988
148,803
(23.0
)
15.5
Total deposits
1,534,066
1,496,406
1,200,090
2.5
27.8
Federal Home Loan Bank advances
—
—
5,000
—
(100.0
)
Accrued interest payable
558
575
1,021
(3.0
)
(45.3
)
Operating lease liabilities
10,307
10,703
8,429
(3.7
)
22.3
Other liabilities
16,538
13,603
8,920
21.6
85.4
Total liabilities
1,561,469
1,521,287
1,223,460
2.6
27.6
Common stock
78,718
78,718
78,657
—
0.1
Additional paid-in capital
8,645
8,491
8,521
1.8
1.5
Retained earnings
79,071
71,436
55,348
10.7
42.9
Accumulated other comprehensive income
(loss)
(1,197
)
(21
)
840
5600.0
(242.5
)
Total shareholders' equity
165,237
158,624
143,366
4.2
15.3
Total Liabilities and Shareholders'
Equity
$ 1,726,706
$ 1,679,911
$ 1,366,826
2.8
%
26.3
%
(1)
Includes SBA Paycheck Protection Program
(“PPP”) loans of $40.6 million, $69.3 million and $64.9 million as
of December 31, 2021, September 30, 2021 and December 31, 2020,
respectively.
Consolidated Statements of Income (unaudited) ($ in
thousands, except share and per share data)
For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Interest income
Interest and fees on loans
$ 17,271
$ 16,922
$ 13,006
2.1
%
32.8
%
Interest on available-for-sale debt
securities
362
269
257
34.6
40.9
Other interest income
189
164
112
15.2
68.8
Total interest income
17,822
17,355
13,375
2.7
33.2
Interest expense
Interest on deposits
726
766
1,194
(5.2
)
(39.2
)
Total interest expense
726
766
1,194
(5.2
)
(39.2
)
Net interest income
17,096
16,589
12,181
3.1
40.3
Provision for (reversal of) loan
losses
1,898
(884
)
1,831
(314.7
)
3.7
Net interest income after provision for
(reversal of) loan losses
15,198
17,473
10,350
(13.0
)
46.8
Noninterest income
Service charges on deposits
405
409
367
(1.0
)
10.4
Loan servicing fees, net of
amortization
521
599
367
(13.0
)
42.0
Gain on sale of loans
6,033
2,188
2,188
175.7
175.7
Other income
330
346
470
(4.6
)
(29.8
)
Total noninterest income
7,289
3,542
3,392
105.8
114.9
Noninterest expense
Salaries and employee benefits
5,560
5,724
5,536
(2.9
)
0.4
Occupancy and equipment
1,418
1,326
1,237
6.9
14.6
Data processing and communication
637
448
435
42.2
46.4
Professional fees
267
308
265
(13.3
)
0.8
FDIC insurance and regulatory
assessments
182
146
115
24.7
58.3
Promotion and advertising
156
175
62
(10.9
)
151.6
Directors’ fees
166
183
97
(9.3
)
71.1
Foundation donation and other
contributions
901
842
400
7.0
125.3
Other expenses
304
367
265
(17.2
)
14.7
Total noninterest expense
9,591
9,519
8,412
0.8
14.0
Income before income tax expense
12,896
11,496
5,330
12.2
142.0
Income tax expense
3,747
3,246
1,513
15.4
147.7
Net income
$ 9,149
$ 8,250
$ 3,817
10.9
%
139.7
%
Book value per share
$ 10.92
$ 10.48
$ 9.55
4.2
%
14.3
%
Basic EPS
$ 0.60
$ 0.54
$ 0.25
11.1
%
140.0
%
Diluted EPS
$ 0.59
$ 0.54
$ 0.25
9.3
%
136.0
%
Shares of common stock outstanding
15,137,808
15,133,407
15,016,700
0.0
%
0.8
%
Weighted Average Shares:
- Basic
15,136,229
15,133,407
15,079,407
0.0
%
0.4
%
- Diluted
15,227,291
15,200,613
15,103,029
0.2
%
0.8
%
Key Ratios
As of and For the Three Months
Ended
% Change 4Q21 vs.
4Q21
3Q21
4Q20
3Q21
4Q20
Return on average assets (ROA) (1)
2.11
%
2.03
%
1.13
%
0.08
%
0.98
%
Return on average equity (ROE) (1)
22.72
%
21.30
%
10.72
%
1.42
%
12.00
%
Net interest margin (1)
4.07
%
4.21
%
3.73
%
(0.14
) %
0.34
%
Efficiency ratio
39.34
%
47.28
%
54.02
%
(7.94
) %
(14.68
) %
Total risk-based capital ratio (2)
13.66
%
13.81
%
14.81
%
(0.15
) %
(1.15
) %
Tier 1 risk-based capital ratio (2)
12.42
%
12.63
%
13.56
%
(0.21
) %
(1.14
) %
Common equity tier 1 ratio (2)
12.42
%
12.63
%
13.56
%
(0.21
) %
(1.14
) %
Leverage ratio (2)
9.58
%
9.75
%
10.55
%
(0.17
) %
(0.97
) %
(1)
Annualized.
(2)
The Company’s December 31, 2021 regulatory
capital ratios are preliminary.
Consolidated Statements of Income (unaudited) ($ in
thousands, except share and per share data)
For the Twelve Months
Ended
4Q21
4Q20
% change
Interest income
Interest and fees on loans
$ 62,448
$ 51,829
20.5
%
Interest on available-for-sale debt
securities
1,085
1,177
(7.8
)
Other interest income
625
650
(3.8
)
Total interest income
64,158
53,656
19.6
Interest expense
Interest on deposits
3,132
8,292
(62.2
)
Total interest expense
3,132
8,292
(62.2
)
Net interest income
61,026
45,364
34.5
Provision for loan losses
522
5,961
(91.2
)
Net interest income after provision for
loan losses
60,504
39,403
53.6
Noninterest income
Service charges on deposits
1,562
1,431
9.2
Loan servicing fees, net of
amortization
1,953
1,856
5.2
Gain on sale of loans
11,313
6,092
85.7
Other income
1,189
1,392
(14.6
)
Total noninterest income
16,017
10,771
48.7
Noninterest expense
Salaries and employee benefits
21,253
20,041
6.0
Occupancy and equipment
5,213
4,974
4.8
Data processing and communication
2,000
1,682
18.9
Professional fees
1,192
1,101
8.3
FDIC insurance and regulatory
assessments
583
449
29.8
Promotion and advertising
684
467
46.5
Directors’ fees
593
700
(15.3
)
Foundation donation and other
contributions
2,890
1,335
116.5
Other expenses
1,457
1,191
22.3
Total noninterest expense
35,865
31,940
12.3
Income before income tax expense
40,656
18,234
123.0
Income tax expense
11,801
5,107
131.1
Net income
$ 28,855
$ 13,127
119.8
%
Book value per share
$ 10.92
$ 9.55
14.3
%
Basic EPS
$ 1.89
$ 0.85
122.4
%
Diluted EPS
$ 1.88
$ 0.85
121.2
%
Shares of common stock outstanding
15,137,808
15,016,700
0.8
%
Weighted Average Shares:
- Basic
15,087,686
15,196,351
(0.7
) %
- Diluted
15,155,347
15,223,888
(0.5
) %
Key Ratios
As of and For the Twelve
Months Ended
4Q21
4Q20
% Change
Return on average assets (ROA)
1.84
%
1.03
%
0.81
%
Return on average equity (ROE)
18.91
%
9.35
%
9.56
%
Net interest margin
4.02
%
3.72
%
0.30
%
Efficiency ratio
46.55
%
56.90
%
(10.35
) %
Total risk-based capital ratio (1)
13.66
%
14.81
%
(1.15
) %
Tier 1 risk-based capital ratio (1)
12.42
%
13.56
%
(1.14
) %
Common equity tier 1 ratio (1)
12.42
%
13.56
%
(1.14
) %
Leverage ratio (1)
9.58
%
10.55
%
(0.97
) %
(1)
The Company’s December 31, 2021 regulatory
capital ratios are preliminary.
Asset Quality
($ in thousands)
As of and For the Three Months
Ended
4Q21
3Q21
4Q20
Nonaccrual Loans (1)
$ 3,002
$ 1,052
$ 985
Loans 90 days or more past due, accruing
(2)
200
—
—
Accruing restructured loans
—
—
—
Nonperforming loans
3,202
1,052
985
Other real estate owned (“OREO”)
—
—
—
Nonperforming assets
$ 3,202
$ 1,052
$ 985
Criticized loans (3) by loan type:
SBA loans
$ 2,688
$ 1,871
$ 2,256
C & I loans
313
320
5,004
Home mortgage loans
1,038
—
600
Total criticized loans (3)
$ 4,039
$ 2,191
$ 7,860
Nonperforming assets/total assets
0.19
%
0.06
%
0.07
%
Nonperforming assets/gross loans plus
OREO
0.24
%
0.09
%
0.09
%
Nonperforming loans/gross loans
0.24
%
0.09
%
0.09
%
Allowance for loan losses/nonperforming
loans
503
%
1,344
%
1,559
%
Allowance for loan losses/nonperforming
assets
503
%
1,344
%
1,559
%
Allowance for loan losses/gross loans
1.23
%
1.15
%
1.40
%
Criticized loans (3) /gross loans
0.31
%
0.18
%
0.71
%
Net charge-offs (recoveries)
$ 168
$ (4
)
$ —
Net charge-offs (recoveries) to average
gross loans (4)
0.05
%
(0.00
)%
0.00
%
(1)
Includes the guaranteed portion of SBA
loans that are in liquidation totaling $1.0 million as of December
31, 2021.
(2)
Includes the guaranteed portion of PPP
loans totaling $200 thousand as of December 31, 2021.
(3)
Consists of special mention, substandard,
doubtful and loss categories.
(4)
Annualized.
($ in thousands)
4Q21
3Q21
4Q20
Accruing delinquent loans 30-89 days
past due:
30-59 days
$ 72
$ 263
$ —
60-89 days
336
1,064
—
Total (1)
$ 408
$ 1,327
$ —
(1)
Includes the guaranteed portion of PPP
loans totaling $408 thousand as of December 31, 2021.
Average Balance Sheet, Interest and Yield/Rate Analysis
($ in thousands)
For the Three Months
Ended
4Q21
3Q21
4Q20
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
$ 192,302
$ 73
0.15
%
$ 137,662
$ 47
0.13
%
$ 83,129
$ 20
0.10
%
Federal funds sold and other
investments
11,012
116
4.23
11,041
117
4.25
10,091
92
3.62
Available-for-sale debt securities, at
fair value
122,137
362
1.19
109,009
269
0.99
93,238
257
1.10
Real estate loans
685,394
7,774
4.50
678,642
7,680
4.49
644,643
7,457
4.60
SBA loans
400,059
6,829
6.77
403,279
6,835
6.72
251,541
3,231
5.11
C & I loans
133,104
1,334
3.98
107,614
1,074
3.96
90,617
843
3.70
Home mortgage loans
123,822
1,320
4.27
117,825
1,317
4.47
124,763
1,456
4.67
Consumer & other loans
1,035
14
5.21
978
16
6.49
1,325
19
5.70
Loans (2)
1,343,414
17,271
5.10
1,308,338
16,922
5.13
1,112,889
13,006
4.65
Total interest-earning assets
1,668,865
17,822
4.24
1,566,050
17,355
4.40
1,299,347
13,375
4.10
Noninterest-earning assets
62,996
56,807
48,678
Total assets
$ 1,731,861
$ 1,622,857
$ 1,348,025
Interest-bearing liabilities:
Money market deposits and others
$ 378,849
$ 283
0.30
%
$ 368,507
$ 299
0.32
%
$ 328,044
$ 340
0.41
%
Time deposits
401,938
443
0.44
383,503
467
0.48
344,139
854
0.99
Total interest-bearing deposits
780,787
726
0.37
752,010
766
0.40
672,183
1,194
0.71
Borrowings
4
—
—
—
—
—
7,938
—
—
Total interest-bearing liabilities
780,791
726
0.37
752,010
766
0.40
680,121
1,194
0.70
Noninterest-bearing liabilities:
Noninterest-bearing deposits
765,012
696,761
507,694
Other noninterest-bearing liabilities
24,994
19,169
17,769
Total noninterest-bearing liabilities
790,006
715,930
525,463
Shareholders’ equity
161,064
154,917
142,441
Total liabilities and shareholders’
equity
$ 1,731,861
$ 1,622,857
$ 1,348,025
Net interest income / interest rate
spreads
$ 17,096
3.87
%
$ 16,589
4.00
%
$ 12,181
3.40
%
Net interest margin
4.07
%
4.21
%
3.73
%
Cost of deposits & cost of funds:
Total deposits / cost of deposits
$ 1,545,799
$ 726
0.19
%
$ 1,448,771
$ 766
0.21
%
$ 1,179,877
$ 1,194
0.40
%
Total funding liabilities / cost of
funds
$ 1,545,803
$ 726
0.19
%
$ 1,448,771
$ 766
0.21
%
$ 1,187,815
$ 1,194
0.40
%
(1)
Annualized.
(2)
Includes loans held for sale.
Average Balance Sheet, Interest and Yield/Rate Analysis
($ in thousands)
For the Twelve Months
Ended
4Q21
4Q20
Average
Balance
Interest
and Fees
Yield/ Rate
Average
Balance
Interest
and Fees
Yield/ Rate
Interest-earning assets:
Interest-bearing deposits in other
banks
$ 132,090
$ 170
0.13
%
$ 81,997
$ 281
0.34
%
Federal funds sold and other
investments
10,755
455
4.23
9,853
369
3.74
Available-for-sale debt securities, at
fair value
108,346
1,086
1.00
73,410
1,177
1.60
Real estate loans
672,045
30,644
4.56
636,809
30,616
4.81
SBA loans
355,114
21,760
6.13
200,110
11,231
5.61
C & I loans
114,629
4,463
3.89
93,490
3,887
4.16
Home mortgage loans
122,465
5,520
4.51
122,195
5,977
4.89
Consumer & other loans
1,095
60
5.51
2,102
118
5.61
Loans (1)
1,265,348
62,447
4.94
1,054,706
51,829
4.91
Total interest-earning assets
1,516,539
64,158
4.23
1,219,966
53,656
4.40
Noninterest-earning assets
55,200
49,224
Total assets
$ 1,571,739
$ 1,269,190
Interest-bearing liabilities:
Money market deposits and others
$ 362,900
$ 1,134
0.31
%
$ 307,316
$ 2,174
0.71
%
Time deposits
378,585
1,998
0.53
391,667
6,118
1.56
Total interest-bearing deposits
741,485
3,132
0.42
698,983
8,292
1.19
Borrowings
1,988
—
—
5,505
—
—
Total interest-bearing liabilities
743,473
3,132
0.42
704,488
8,292
1.18
Noninterest-bearing liabilities:
Noninterest-bearing deposits
656,130
406,401
Other noninterest-bearing liabilities
19,558
17,889
Total noninterest-bearing liabilities
675,688
424,290
Shareholders’ equity
152,578
140,412
Total liabilities and shareholders’
equity
$ 1,571,739
$ 1,269,190
Net interest income / interest rate
spreads
$ 61,026
3.81
%
$ 45,364
3.22
%
Net interest margin
4.02
%
3.72
%
Cost of deposits & cost of funds:
Total deposits / cost of deposits
$ 1,397,615
$ 3,132
0.22
%
$ 1,105,384
$ 8,292
0.75
%
Total funding liabilities / cost of
funds
$ 1,399,603
$ 3,132
0.22
%
$ 1,110,889
$ 8,292
0.75
%
(1)
Includes loans held for sale.
Loan Portfolio Breakdown by Industry, excluding home mortgage
and consumer loans
($ in thousands)
As of December 31,
2021
Industry
Number
of
accounts
% of
total
Balance
% of
total
Hotel / motel
249
11.5
%
$ 186,534
15.2
%
Wholesale
154
7.2
70,181
5.7
Food services / restaurant
298
13.9
45,707
3.7
Real estate lessor
239
11.1
412,641
33.6
Gas station
243
11.3
207,295
16.8
Other
967
45.0
306,921
25.0
Total (1)
2,150
100.0
%
$ 1,229,279
100.0
%
(1)
Includes loans held for sale.
Loan Deferment Summary by Industry, excluding home mortgage
and consumer loans
($ in thousands)
As of December 31,
2021
Number of accounts
Loan balance
Industry
Number
of
accounts
% of
deferment
% of
total
loans
Balance
% of
deferment
% of
total
loans
Hotel / motel
1
33.4
%
0.4
%
$ 4,546
90.1
%
2.4
%
Wholesale
1
33.3
0.6
467
9.3
0.7
Food services / restaurant
1
33.3
0.3
31
0.6
0.1
Total
3
100.0
%
0.1
%
$ 5,044
100.0
%
0.4
%
Loan Deferment Summary by Loan Type
($ in thousands)
As of December 31,
2021
Number of accounts
Loan balance
Loan Type
Number
of
accounts
% of
deferment
% of
total
loans
Balance
% of
deferment
% of
total
loans
Real estate loans
1
33.3
%
0.1
%
$ 4,546
90.1
%
0.5
%
C & I loans
2
66.7
0.2
498
9.9
0.2
Loans, excluding home mortgage and
consumer loans
3
100.0
0.1
5,044
100.0
0.4
Home mortgage loans
—
—
—
—
—
—
Total
3
100.0
%
0.1
%
$ 5,044
100.0
%
0.4
%
Loan Deferment Status Change by Loan Type
($ in thousands)
Total deferments
under the CARES Act
through December 31,
2021
Payment resumed
or paid off
through December 31,
2021
Remaining deferments as of
December 31, 2021
Loan Type
Number
of
accounts
Balance
Number
of
accounts
Balance
Number
of
accounts
Balance
Loans, excluding home mortgage and
consumer loans
157
$ 220,553
154
$ 215,509
3
$ 5,044
Home mortgage loans
69
30,205
69
30,205
—
—
Total
226
$ 250,758
223
$ 245,714
3
$ 5,044
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220127005941/en/
Investor Relations OP Bancorp Christine Oh EVP & CFO
213.892.1192 Christine.oh@myopenbank.com
Grafico Azioni OP Bancorp (NASDAQ:OPBK)
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Da Mag 2024 a Giu 2024
Grafico Azioni OP Bancorp (NASDAQ:OPBK)
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