2022 Fourth Quarter Highlights compared with
2021 Fourth Quarter:
- Financial Results:
- Net income of $8.0 million, compared to $9.1 million
- Diluted earnings per share of $0.51, compared to $0.59
- Net interest income of $20.2 million, compared to $17.1
million
- Net interest margin of 4.08%, compared to 4.07%
- Provision for loan losses of $977 thousand, compared to $1.9
million
- Total assets of $2.1 billion, a 21% increase compared to $1.7
billion
- Total loans (1) of $1.7 billion, a 23% increase compared to
$1.4 billion
- Total deposits of $1.9 billion, a 23% increase compared to $1.5
billion
- Noninterest-bearing deposits of $701.6 million, or 37.2% of
total deposits
- Credit Quality:
- Allowance for loan losses to gross loans of 1.13%, compared to
1.23%
- Net loan charge-offs to average gross loans of 0.03%, compared
to 0.05%
- Nonperforming loans to gross loans of 0.18%, compared to
0.24%
- Criticized loans (2) to gross loans of 0.23%, compared to
0.31%
- Capital Levels:
- Quarterly cash dividend of $0.12 per share, a 20% increase from
$0.10 per share
- Remained well-capitalized with a Common Equity Tier 1 (“CET1”)
ratio of 11.70%.
- Book value per common share of $11.59, compared to $10.92
___________________________________________________________
(1) Includes loans held for sale. (2) 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 2022. Net income for the fourth quarter of 2022 was $8.0
million, or $0.51 per diluted common share, compared with $8.7
million, or $0.55 per diluted common share, for the third quarter
of 2022, and $9.1 million, or $0.59 per diluted common share, for
the fourth quarter of 2021.
Min Kim, President and Chief Executive Officer:
“Despite the challenging banking environment created by external
headwinds related to prolonged inflation, Federal Reserve's drastic
rate hikes, and economic slowdowns, we continued to report strong
balance sheet growth with pristine asset quality. Based on the
growth and strength of our balance sheet, we remain optimistic
about future performance and will continue to focus on executing
our strategic goals while maintaining appropriate risk and control
environment.”
SELECTED FINANCIAL HIGHLIGHTS
($ in thousands, except per share
data)
As of and For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Selected Income Statement Data:
Net interest income
$
20,198
$
20,344
$
17,096
(0.7
) %
18.1
%
Provision for loan losses
977
662
1,898
47.6
(48.5
)
Noninterest income
3,223
4,821
7,289
(33.1
)
(55.8
)
Noninterest expense
11,327
12,338
9,591
(8.2
)
18.1
Income tax expense
3,089
3,515
3,762
(12.1
)
(17.9
)
Net Income
$
8,028
$
8,650
$
9,134
(7.2
) %
(12.1
) %
Diluted earnings per share
$
0.51
$
0.55
$
0.59
(7.3
) %
(13.6
) %
Selected Balance Sheet Data:
Total loans (1)
$
1,722,627
$
1,654,660
$
1,403,447
4.1
%
22.7
%
Total deposits
$
1,885,771
$
1,816,811
$
1,534,066
3.8
%
22.9
%
Total assets
$
2,094,293
$
2,029,575
$
1,726,691
3.2
%
21.3
%
Average loans (1)
$
1,691,642
$
1,614,000
$
1,343,414
4.8
%
25.9
%
Average deposits
$
1,836,736
$
1,753,726
$
1,545,799
4.7
%
18.8
%
Credit Quality:
Nonperforming loans
$
3,080
$
2,251
$
3,200
36.8
%
(3.8
) %
Net charge-offs (recoveries) to average
gross loans (2)
0.03
%
(0.00
) %
0.05
%
0.03
%
(0.02
) %
Allowance for loan losses to gross
loans
1.13
%
1.14
%
1.23
%
(0.01
) %
(0.10
) %
Financial Ratios:
Return on average assets (2)
1.56
%
1.77
%
2.11
%
(0.21
) %
(0.55
) %
Return on average equity (2)
18.58
%
19.91
%
22.68
%
(1.33
) %
(4.10
) %
Net interest margin (2)
4.08
%
4.31
%
4.07
%
(0.23
) %
0.01
%
Common equity tier 1 capital ratio
11.70
%
11.92
%
12.42
%
(0.22
) %
(0.72
) %
Leverage ratio
9.38
%
9.52
%
9.58
%
(0.14
) %
(0.20
) %
Efficiency ratio (3)
48.36
%
49.03
%
39.34
%
(0.67
) %
9.02
%
Book value per common share
$
11.59
$
11.19
$
10.92
3.6
%
6.1
%
(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 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Interest Income
Interest income
$
26,886
$
23,234
$
17,822
15.7
%
50.9
%
Interest expense
6,688
2,890
726
131.4
821.2
Net interest income
$
20,198
$
20,344
$
17,096
(0.7
) %
18.1
%
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Average Balance
Interest
and Fees
Yield/Rate (1)
Average Balance
Interest
and Fees
Yield/Rate (1)
Average Balance
Interest
and Fees
Yield/Rate (1)
Interest-earning Assets
Loans
$ 1,691,642
$ 24,719
5.81 %
$ 1,614,000
$ 21,780
5.36 %
$ 1,343,414
$ 17,271
5.10 %
Total interest-earning assets
$ 1,966,165
$ 26,886
5.43 %
$ 1,874,516
$ 23,234
4.92 %
$ 1,668,865
$ 17,822
4.24 %
Interest-bearing Liabilities
Interest-bearing deposits
$ 1,085,331
$ 6,598
2.41 %
$ 947,437
$ 2,889
1.21 %
$ 780,787
$ 726
0.37 %
Total interest-bearing liabilities
$ 1,093,489
$ 6,688
2.43 %
$ 947,567
$ 2,890
1.21 %
$ 780,791
$ 726
0.37 %
Ratios
Net interest Income/interest rate
spreads
$ 20,198
3.01 %
$ 20,344
3.71 %
$ 17,096
3.87 %
Net interest margin
4.08 %
4.31 %
4.07 %
Total deposits / cost of deposits
$ 1,836,736
$ 6,598
1.43 %
$ 1,753,726
$ 2,889
0.65 %
$ 1,545,799
$ 726
0.19 %
Total funding liabilities / cost of
funds
$ 1,844,894
$ 6,688
1.44 %
$ 1,753,856
$ 2,890
0.65 %
$ 1,545,803
$ 726
0.19 %
(1)
Annualized.
($ in thousands)
For the Three Months
Ended
Yield Change 4Q22 vs.
4Q22
3Q22
4Q21
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
3Q22
4Q21
Loan Yield Component
Contractual interest rate
$
23,694
5.57
%
$
20,419
5.02
%
$
14,509
4.29
%
0.55
%
1.28
%
SBA discount accretion
1,034
0.24
1,336
0.33
1,571
0.46
(0.09
)
(0.22
)
Amortization of net deferred fees
46
0.01
122
0.03
1,087
0.32
(0.02
)
(0.31
)
Amortization of premium
(344
)
(0.08
)
(250
)
(0.06
)
3
—
(0.02
)
(0.08
)
Net interest recognized on nonaccrual
loans
—
—
—
—
(16
)
—
—
—
Prepayment penalties (2) and other
fees
289
0.07
153
0.04
117
0.03
0.03
0.04
Yield on loans
$
24,719
5.81
%
$
21,780
5.36
%
$
17,271
5.10
%
0.45
%
0.71
%
Amortization of net deferred fees:
PPP loan forgiveness (3)
$
15
—
%
$
146
0.04
%
$
920
0.27
%
(0.04
) %
(0.27
) %
Other
31
0.01
(24
)
-0.01
167
0.05
0.02
(0.04
)
Total amortization of net deferred
fees
$
46
0.01
%
$
122
0.03
%
$
1,087
0.32
%
(0.02
) %
(0.31
) %
(1)
Annualized.
(2)
Prepayment penalty income of $172
thousand, $79 thousand and $84 thousand for the three months ended
December 31, 2022, September 30, 2022 and December 31, 2021,
respectively, was from commercial real estate and C&I
loans.
(3)
As of December 31, 2022, there were
unamortized net deferred fees and unaccredited discounts of $8
thousand to be recognized over the estimated life of the loans as a
yield adjustment on the loans.
Impact of Hana Loan Purchase on Average Loan Yield and Net
Interest Margin
During the second quarter of 2021, the Company purchased an SBA
portfolio of 638 loans with an ending balance of $100.0 million,
excluding loan discount of $8.9 million from Hana Small Business
Lending, Inc. (“Hana”). The following table presents impacts of the
Hana loan purchase on average loan yield and net interest
margin:
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Hana Loan Purchase:
Contractual interest rate
$
1,286
$
1,114
$
1,027
Purchased loan discount accretion
374
594
826
Other fees
25
9
10
Total interest income
$
1,685
$
1,717
$
1,863
Effect on average loan yield (1)
0.20
%
0.21
%
0.26
%
Effect on net interest margin (1)
0.22
%
0.22
%
0.26
%
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Average
Balance
Interest
and Fees
Yield/
Rate
Average
Balance
Interest
and Fees
Yield/
Rate
Average
Balance
Interest
and Fees
Yield/
Rate
Average loan yield (1)
$
1,691,642
$
24,719
5.81
%
$
1,614,000
$
21,780
5.36
%
$
1,343,414
$
17,271
5.10
%
Adjusted average loan yield excluding
purchased Hana loans (1)(2)
$
1,631,128
$
23,034
5.61
%
$
1,549,313
$
20,063
5.15
%
$
1,263,789
$
15,408
4.84
%
Net interest margin (1)
$
1,966,165
$
20,198
4.08
%
$
1,874,516
$
20,344
4.31
%
$
1,668,865
$
17,096
4.07
%
Adjusted interest margin excluding
purchased Hana loans (1)(2)
$
1,905,651
$
18,513
3.86
%
$
1,809,829
$
18,627
4.09
%
$
1,589,240
$
15,233
3.81
%
(1)
Annualized.
(2)
See reconciliation of GAAP to non-GAAP
financial measures.
Fourth Quarter 2022 vs. Third Quarter
2022
Net interest income decreased $146 thousand, or 0.7%, primarily
due to higher interest expense on deposits. Net interest margin was
4.08%, a decrease of 23 basis points from 4.31%.
- A $2.9 million increase in interest income on loans was
primarily due to a 55 basis point increase in contractual loan
yield as a result of market rate increases by the Federal Reserve
and a $77.6 million increase in average loan balance.
- A $3.7 million increase in interest expense on deposits was
primarily due to a 120 basis point increase in average cost of
interest-bearing deposits driven by the Federal Reserve’s rate
increases.
- Average loan yield was 5.81%, a 45 basis point increase from
5.36%, primarily due to a 55 basis point increase in contractual
loan yield driven by repricing of variable rate loans and higher
rates on new loans, partially offset by a 9 basis points decrease
in SBA discount accretion income as a result of lower SBA loan
payoffs.
- Average cost of interest-bearing deposits was 2.41%, a 120
basis point increase from 1.21%. Average cost of deposits was
1.43%, a 78 basis point increase from 0.65%.
Fourth Quarter 2022 vs. Fourth Quarter
2021
Net interest income increased $3.1 million, or 18.1%, primarily
due to higher interest income on loans. Net interest margin was
4.08%, an increase of 1 basis point from 4.07%.
- A $7.4 million increase in interest income on loans was
primarily due to a 128 basis point increase in contractual loan
yield as a result of market rate increases by the Federal Reserve
and a $348.2 million increase in average loan balance.
- A $5.9 million increase in interest expense on deposits was
primarily due to a 204 basis point increase in average cost of
interest-bearing deposits driven by the Federal Reserve’s rate
increases.
- Average loan yield was 5.81%, a 71 basis point increase from
5.10%, primarily due to a 128 basis point increase in contractual
loan yield driven by repricing of variable rate loans and higher
rates on new loans, partially offset by a 22 basis point decrease
in SBA discount accretion income as a result of lower SBA loan
payoffs and a 31 basis point decrease in amortization of net
deferred fees as a result of lower net deferred fees on SBA
Paycheck Protection Program (“PPP”) loans.
- Average yield on interesting-bearing deposits in other banks
was 3.78%, a 363 basis point increase from 0.15%. Average yield on
available-for-sale debt securities was 2.66%, a 147 basis point
increase from 1.19%, primarily due to higher yields on securities
purchased in 2022.
- Average cost of interest-bearing deposits was 2.41%, a 204
basis point increase from 0.37%. Average cost of deposits was
1.43%, a 124 basis point increase from 0.19%.
Provision for loan losses
Fourth Quarter 2022 vs. Third Quarter
2022
The Company recorded $977 thousand provision for loan losses, an
increase of $315 thousand, compared with a $662 thousand provision
for loan losses. The $977 thousand provision for loan losses was
primarily due to an increase of $834 thousand in quantitative
reserves from loan growth in home mortgage and SBA loans.
Fourth Quarter 2022 vs. Fourth Quarter
2021
The Company recorded $977 thousand provision for loan losses, a
decrease of $921 thousand, compared with $1.9 million provision for
loan losses.
Noninterest Income
($ in thousands)
For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Noninterest income
Service charges on deposits
$
406
$
454
$
405
(10.6
) %
0.2
%
Loan servicing fees, net of
amortization
705
610
521
15.6
35.3
Gain on sale of loans
1,684
3,490
6,033
(51.7
)
(72.1
)
Other income
428
267
330
60.3
29.7
Total noninterest income
$
3,223
$
4,821
$
7,289
(33.1
) %
(55.8
) %
Fourth Quarter 2022 vs. Third Quarter
2022
Noninterest income decreased $1.6 million, or 33.1%, primarily
due to lower gain on sale of loans.
- Gain on sale of loans was $1.7 million, down $1.8 million,
primarily due to lower SBA loan sold on lower average sales
premium. The Company sold $32.2 million in SBA loans at an average
premium rate of 6.13%, compared to the sale of $59.3 million at an
average premium rate of 6.67%.
Fourth Quarter 2022 vs. Fourth Quarter
2021
Noninterest income decreased $4.1 million, or 55.8%, primarily
due to lower gain on sale of loans.
- Gain on sale of loans was $1.7 million, down $4.3 million,
primarily due to lower SBA loans sold on lower average sales
premium. The Company sold $32.2 million in SBA loans at an average
premium rate of 6.13%, compared to the sale of $56.8 million at an
average premium rate of 10.98%.
Noninterest Expense
($ in thousands)
For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Noninterest expense
Salaries and employee benefits
$
7,080
$
7,343
$
5,560
(3.6
) %
27.3
%
Occupancy and equipment
1,560
1,537
1,418
1.5
10.0
Data processing and communication
514
586
637
(12.3
)
(19.3
)
Professional fees
330
602
267
(45.2
)
23.6
FDIC insurance and regulatory
assessments
176
238
182
(26.1
)
(3.3
)
Promotion and advertising
12
177
156
(93.2
)
(92.3
)
Directors’ fees
145
170
166
(14.7
)
(12.7
)
Foundation donation and other
contributions
851
875
901
(2.7
)
(5.5
)
Other expenses
659
810
304
(18.6
)
116.8
Total noninterest expense
$
11,327
$
12,338
$
9,591
(8.2
) %
18.1
%
Fourth Quarter 2022 vs. Third Quarter
2022
Noninterest expense decreased $1.0 million, or 8.2%, primarily
due to lower salaries and employee benefits and professional
fees.
- Salaries and employee benefits were $7.1 million, down $263
thousand from $7.3 million. The decrease was primarily due to a
decrease in employee incentive accruals, partially offset by an
increase in salaries.
- Professional fees and promotion and advertising decreased $272
thousand and $165 thousand, respectively, primarily due to year-end
accrual adjustments.
Fourth Quarter 2022 vs. Fourth Quarter
2021
Noninterest expense increased $1.7 million, or 18.1%, primarily
due to higher salaries and employee benefits and other
expenses.
- Salaries and employee benefits were $7.1 million, up $1.5
million from $5.6 million. The increase was primarily due to 30
additional employees to support continued growth of the
Company.
- Other expenses were $659 thousand, up $355 thousand from $304
thousand, primarily due to an increase in business development
expense.
Income Tax Expense
Fourth Quarter 2022 vs. Third Quarter
2022
Income tax expense was $3.1 million, and the effective tax rate
was 27.8%, compared to income tax expense of $3.5 million and the
effective rate of 28.9%.
Fourth Quarter 2022 vs. Fourth Quarter
2021
Income tax expense was $3.1 million and the effective tax rate
was 27.8%, compared to income tax expense of $3.8 million and the
effective rate of 29.2%.
BALANCE SHEET HIGHLIGHTS
Loans
($ in thousands)
As of
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Real estate loans
$
842,208
$
830,125
$
701,450
1.5
%
20.1
%
SBA loans (1)
263,644
232,569
275,858
13.4
(4.4
)
C&I loans
116,951
133,855
162,543
(12.6
)
(28.0
)
Home mortgage loans
482,949
419,469
173,303
15.1
178.7
Consumer & other loans
1,467
2,000
865
(26.7
)
69.6
Gross loans
$
1,707,219
$
1,618,018
$
1,314,019
5.5
%
29.9
%
(1)
Includes PPP loans of $442 thousand, $1.1
million and $40.6 million as of December 31, 2022, September 30,
2022 and December 31, 2021, respectively.
The following table presents new loan originations based on loan
commitment amounts for the periods indicated:
($ in thousands)
For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Real estate loans
$
44,416
$
43,929
$
35,458
1.1
%
25.3
%
SBA loans (1)
55,594
43,984
65,492
26.4
(15.1
)
C&I loans
46,014
39,720
47,981
15.8
(4.1
)
Home mortgage loans
28,188
68,842
19,295
(59.1
)
46.1
Consumer & other loans
—
2,500
—
(100.0
)
—
Gross loans
$
174,212
$
198,975
$
168,226
(12.4
) %
3.6
%
(1)
There were no new PPP originations for the
periods indicated.
The following table presents changes in gross loans by loan
activity for the periods indicated:
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Gross loans, beginning
$
1,618,018
$
1,484,718
$
1,231,821
New originations
174,212
198,975
168,226
Net line advances
(80,144
)
(11,358
)
7,759
Purchases
49,980
37,146
48,915
Sales
(32,204
)
(59,293
)
(68,064
)
Paydowns
(22,939
)
(19,087
)
(12,373
)
Payoffs
(23,238
)
(37,817
)
(46,778
)
PPP Payoffs
(657
)
(7,206
)
(29,918
)
Other
24,191
31,940
14,431
Total
89,201
133,300
82,198
Gross loans, ending
$
1,707,219
$
1,618,018
$
1,314,019
As of December 31, 2022 vs. September
30, 2022
Gross loans were $1.71 billion as of December 31, 2022, up $89.2
million from September 30, 2022, primarily due to new loan
originations and home mortgage loan purchases.
Home mortgage loans of $39.0 million and real estate loans of
$11.0 million were purchased from third party mortgage originators
in the fourth quarter of 2022, compared to total purchases of $37.1
million in the third quarter of 2022. New loan originations and
loan payoffs were $174.2 million and $23.9 million for the fourth
quarter of 2022, respectively, compared with $199.0 million and
$45.0 million for the third quarter of 2022, respectively. Of the
PPP loans, $636 thousand in principal amount has been forgiven
under the program, compared to a $7.2 million of PPP loans forgiven
in the third quarter of 2022.
As of December 31, 2022 vs. December
31, 2021
Gross loans were $1.71 billion as of December 31, 2022, up
$393.2 million from December 31, 2021, primarily due to new loan
originations of $645.2 million and loan purchases of $225.1
million, partially offset by loan sales of $182.3 million and loan
payoffs of $180.8 million.
The following table presents the composition of gross loans by
interest rate type accompanied with the weighted average
contractual rates as of the periods indicated:
($ in thousands)
As of
4Q22
3Q22
4Q21
%
Rate
%
Rate
%
Rate
Fixed rate
35.4
%
4.63
%
35.2
%
4.39
%
31.5
%
4.12
%
Hybrid rate
33.3
4.79
34.1
4.59
22.8
4.45
Variable rate
31.3
8.01
30.7
6.97
45.7
4.94
Gross loans
100.0
%
5.74
%
100.0
%
5.25
%
100.0
%
4.57
%
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,
2022
Within One Year
One Year Through Five
Years
After Five Years
Total
Amount
Rate
Amount
Rate
Amount
Rate
Amount
Rate
Fixed rate
$
30,168
4.44
%
$
337,054
4.59
%
$
237,195
4.72
%
$
604,417
4.63
%
Hybrid rate
6,472
7.09
52,902
5.06
508,550
4.73
567,924
4.79
Variable rate
63,021
8.22
148,498
7.93
323,359
8.00
534,878
8.01
Gross loans
$
99,661
7.00
%
$
538,454
5.56
%
$
1,069,104
5.72
%
$
1,707,219
5.74
%
Deposits
($ in thousands)
As of
% Change 4Q22 vs.
4Q22
3Q22
4Q21
Amount
%
Amount
%
Amount
%
3Q22
4Q21
Noninterest-bearing deposits
$
701,584
37.2
%
$
794,631
43.7
%
$
774,754
50.5
%
(11.7
) %
(9.4
) %
Money market deposits and others
526,321
27.9
%
524,911
28.9
380,226
24.8
%
0.3
38.4
Time deposits
657,866
34.9
%
497,269
27.4
379,086
24.7
%
32.3
73.5
Total deposits
$
1,885,771
100.0
%
$
1,816,811
100.0
%
$
1,534,066
100.0
%
3.8
%
22.9
%
As of December 31, 2022 vs. September
30, 2022
Total deposits were $1.89 billion as of December 31, 2022, up
$69.0 million from September 30, 2022, primarily due to growth in
time deposits, partially offset by a decrease in
noninterest-bearing deposits. Time deposits grew $160.6 million,
due to management’s actions to support loan growth during the third
quarter of 2022 including upward adjustments of interest rates on
customer deposits and increases in wholesale deposits.
Noninterest-bearing deposits decreased $93.0 million, primarily due
to decreases in lower transaction volumes in escrow and 1031
exchanges accounts and other decreases affected by market rate
increases by the Federal Reserve.
As of December 31, 2022 vs. December
31, 2021
Total deposits were $1.89 billion as of December 31, 2022, up
$351.7 million from December 31, 2021, primarily driven by growth
in time deposits and money market deposits, offset by a decrease in
noninterest-bearing deposits. Time deposits grew $278.8 million to
$657.9 million from $379.1 million, and money market deposits
increased $146.1 million to $526.3 million from $380.2 million.
Noninterest-bearing deposits decreased $73.2 million, primarily due
to decreases in lower transaction volumes in escrow and 1031
exchanges accounts and other decreases affected by market rate
increases by the Federal Reserve.
The following table sets forth the maturity of time deposits as
of December 31, 2022:
As of December 31,
2022
($ in thousands)
Within Three
Months
Three to
Six Months
Six to Nine Months
Nine to Twelve
Months
After
Twelve Months
Total
Time deposits (more than $250,000)
$ 82,676
$ 26,156
$ 61,254
$ 183,822
$ 2,289
$ 356,197
Time deposits ($250,000 or less)
36,551
50,759
44,829
144,495
25,035
301,669
Total time deposits
$ 119,227
$ 76,915
$ 106,083
$ 328,317
$ 27,324
$ 657,866
Weighted average rate
3.03 %
3.02 %
2.36 %
4.06 %
3.83 %
3.47 %
Capital and Cash Dividend
Basel III
OP Bancorp (1)
Open Bank
Minimum Well
Capitalized
Ratio
Minimum
Capital Ratio+
Conservation
Buffer (2)
Risk-Based Capital Ratios:
Total risk-based capital ratio
12.87 %
12.76 %
10.00 %
10.50 %
Tier 1 risk-based capital ratio
11.70 %
11.59 %
8.00 %
8.50 %
Common equity tier 1 ratio
11.70 %
11.59 %
6.50 %
7.00 %
Leverage ratio
9.38 %
9.29 %
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 bonus to executive officers.
OP Bancorp
Basel III
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Risk-Based Capital Ratios:
Total risk-based capital ratio
12.87
%
13.51
%
13.81
%
(0.64
) %
(0.94
) %
Tier 1 risk-based capital ratio
11.70
%
12.29
%
12.63
%
(0.59
) %
(0.93
) %
Common equity tier 1 ratio
11.70
%
12.29
%
12.63
%
(0.59
) %
(0.93
) %
Leverage ratio
9.38
%
9.48
%
9.75
%
(0.10
) %
(0.37
) %
Risk-weighted Assets ($ in thousands)
$
1,661,095
$
1,465,707
$
1,251,867
13.33
%
32.69
%
Capital ratios remained strong during the quarter. Our CET1 and
total risk-based capital ratios were 11.70% and 12.87% as of
December 31, 2022, down 93 basis points and 94 basis points from a
year ago, respectively. The decreases in capital ratios were
primarily due to year-over-year asset growth.
The Company’s Board of Directors has declared a quarterly cash
dividend of $0.12 per share of its common stock. The cash dividend
is payable on or about February 23, 2023 to all shareholders of
record as of the close of business on February 9, 2023.
The Company did not repurchase any shares during the fourth
quarter of 2022. Since the announcement of the initial stock
repurchase program in January 2019, the Company has repurchased a
total of 1.57 million shares of its common stock at an average
repurchase price of $8.58 per share through December 31, 2022.
Asset Quality
($ in thousands)
As of and For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Nonperforming loans (1)
$
3,080
$
2,251
$
3,200
36.8
%
(3.8
) %
OREO
—
—
—
—
—
Total nonperforming assets
$
3,080
$
2,251
$
3,200
36.8
%
(3.8
) %
Nonperforming loans to gross loans
0.18
%
0.14
%
0.24
%
0.04
%
(0.06
) %
Nonperforming assets to total assets
0.15
%
0.11
%
0.19
%
0.04
%
(0.04
) %
Criticized (2) Loan:
Special mention loans
$
563
$
—
$
—
—
%
—
%
Classified loans (3)
3,307
3,542
4,039
(6.6
)
(18.1
)
Total criticized loans
$
3,870
$
3,542
$
4,039
9.3
%
(4.2
) %
Criticized (2) loans to gross loans
0.23
%
0.22
%
0.31
%
0.01
%
(0.08
) %
Classified loans (3) to gross loans
0.19
%
0.22
%
0.31
%
(0.03
) %
(0.12
) %
Allowance for loan losses, beginning
$
18,369
$
17,702
$
14,134
3.8
%
30.0
%
Provision for loan losses (4)
977
662
2,157
47.6
(54.7
)
Gross charge-offs
(109
)
—
(168
)
n/m
(35.1
)
Gross recoveries
4
5
—
(20.0
)
n/m
Allowance for loan losses, ending (5)
$
19,241
$
18,369
$
16,123
4.7
%
19.3
%
Allowance for loan losses ratios:
As a % of gross loans
1.13
%
1.14
%
1.23
%
(0.01
) %
(0.10
) %
As an adjusted % of gross loans (6)
1.16
%
1.18
%
1.36
%
(0.02
) %
(0.20
) %
As a % of nonperforming loans
625
%
816
%
503
%
(191
) %
122
%
As a % of nonperforming assets
625
%
816
%
503
%
(191
) %
122
%
Net charge-offs (recoveries) to average
gross loans
0.03
%
(0.00
) %
0.05
%
0.03
%
(0.02
) %
(1)
Includes the guaranteed portion of SBA
loans totaling $1.0 million, $442 thousand and $1.2 million as of
December 31, 2022, September 30, 2022 and December 31, 2021,
respectively.
(2)
Includes special mention, substandard,
doubtful and loss categories.
(3)
Includes substandard, doubtful and loss
categories.
(4)
Excludes reversal of uncollectible accrued
interest receivable of $259 thousand for the three months ended
December 31, 2021.
(5)
Excludes allowance for uncollectible
accrued interest receivable of $205 thousand as of December 31,
2021.
(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
1.16%.
- Allowance for loan losses increased $3.1 million to $19.2
million from a year ago. Excluding the impacts of the purchased
Hana loans, PPP loans, adjusted allowance to gross loans ratio was
1.16% as of December 31, 2022.
- Criticized loans decreased by $169 thousand or 4.2% from a year
ago, and the criticized loans to gross loans ratio decreased by 8
basis points. Criticized loans are generally consistent with the
Special Mention, Substandard, Doubtful and Loss categories defined
by regulatory authorities.
- Nonperforming assets decreased $120 thousand to $3.1 million,
or 0.15% of total assets from a year ago. As of December 31, 2022,
$606 thousand of nonaccrual loans was the guaranteed portion of SBA
loans that are in liquidation. The Company did not have OREO as of
December 31, 2022 or 2021.
- Net charge-offs were $105 thousand or 0.03% of average loans in
the fourth quarter of 2022, compared to $168 thousand, or 0.05%, of
average loans in the fourth quarter of 2021.
COVID-19 Pandemic Update
As of December 31, 2022, no loan was under COVID-19 loan payment
modification.
Since the PPP’s inception through December 31, 2022, we have
funded $154.5 million, and $154.0 million of principal forgiveness
has been provided on qualifying PPP loans.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
In addition to GAAP measures, management uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company’s performance.
Pre-provision net revenue removes provision for loan losses and
income tax expense. Management believes that this non-GAAP measure,
when taken together with the corresponding GAAP financial measures
(as applicable), provides meaningful supplemental information
regarding our performance. This non-GAAP financial measure also
facilitates a comparison of our performance to prior periods.
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Interest income
$
26,886
$
23,234
$
17,822
Interest expense
6,688
2,890
726
Net interest income
20,198
20,344
17,096
Noninterest income
3,223
4,821
7,289
Noninterest expense
11,327
12,338
9,591
Pre-provision net revenue
(a)
$
12,094
$
12,827
$
14,794
Reconciliation to net income:
Provision for loan losses
(b)
$
977
$
662
$
1,898
Income tax expense
(c)
3,089
3,515
3,762
Net income
(a)+(b) +(c)
$
8,028
$
8,650
$
9,134
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 $8.9 million discount.
As a result, the fair value discount on these loans is being
accreted into interest income over the expected life of the loans
using the effective yield method. Adjusted loan yield and net
interest margin for the three months ended December 31, 2022,
September 30, 2022 and December 31, 2021 excluded the impacts of
contractual interest and discount accretion of the purchased Hana
loans as management does not consider purchasing loan portfolios to
be normal or recurring transactions. Management believes that
presenting the adjusted average loan yield and net interest margin
provide comparability to prior periods and these non-GAAP financial
measures provide supplemental information regarding the Company’s
performance.
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Yield on Average Loans
Interest income on loans
$
24,719
$
21,780
$
17,271
Less: interest income on purchased Hana
loans
1,685
1,717
1,863
Adjusted interest income on loans
(a)
$
23,034
$
20,063
$
15,408
Average loans
$
1,691,642
$
1,614,000
$
1,343,414
Less: Average purchased Hana loans
60,514
64,687
79,625
Adjusted average loans
(b)
$
1,631,128
$
1,549,313
$
1,263,789
Average loan yield (1)
5.81
%
5.36
%
5.10
%
Effect on average loan yield (1)
0.20
%
0.21
%
0.26
%
Adjusted average loan yield (1)
(a)/(b)
5.61
%
5.15
%
4.84
%
Net Interest Margin
Net interest income
$
20,198
$
20,344
$
17,096
Less: interest income on purchased Hana
loans
1,685
1,717
1,863
Adjusted net interest income
(c)
$
18,513
$
18,627
$
15,233
Average interest-earning assets
$
1,966,165
$
1,874,516
$
1,668,865
Less: Average purchased Hana loans
60,514
64,687
79,625
Adjusted average interest-earning
assets
(d)
$
1,905,651
$
1,809,829
$
1,589,240
Net interest margin (1)
4.08
%
4.31
%
4.07
%
Effect on net interest margin (1)
0.22
%
0.22
%
0.26
%
Adjusted net interest margin (1)
(c)/(d)
3.86
%
4.09
%
3.81
%
(1)
Annualized.
Adjusted allowance to gross loans ratio removes the impacts of
purchased Hana loans, PPP loans and allowance on accrued interest
receivable. Management believes that this ratio provides greater
consistency and comparability between the Company’s results and
those of its peer banks.
($ in thousands)
For the Three Months
Ended
4Q22
3Q22
4Q21
Gross loans
$
1,707,219
$
1,618,018
$
1,314,019
Less: Purchased Hana loans
(58,966
)
(61,899
)
(77,170
)
PPP loans (1)
(434
)
(1,022
)
(38,918
)
Adjusted gross loans
(a)
$
1,647,819
$
1,555,097
$
1,197,931
Accrued interest receivable on loans
$
6,413
$
5,203
$
4,231
Less: Accrued interest receivable on
purchased Hana loans
(397
)
(323
)
(340
)
Accrued interest receivable on PPP loans
(2)
(8
)
(16
)
(340
)
Add: Allowance on accrued interest
receivable
—
—
205
Adjusted accrued interest receivable on
loans
(b)
$
6,008
$
4,864
$
3,756
Adjusted gross loans and accrued interest
receivable
(a)+(b) =(c)
$
1,653,827
$
1,559,961
$
1,201,687
Allowance for loan losses
$
19,241
$
18,369
$
16,123
Add: Allowance on accrued interest
receivable
—
—
205
Adjusted Allowance
(d)
$
19,241
$
18,369
$
16,328
Adjusted allowance to gross loans
ratio
(d)/(c)
1.16
%
1.18
%
1.36
%
(1)
Excludes purchased PPP loans of $8
thousand, $57 thousand and $1.7 million as of December 31, 2022,
September 30, 2022 and December 31, 2021, respectively.
(2)
Excludes purchased accrued interest
receivable on PPP loans of $1 thousand and $15 thousand as of
September 30, 2022 and December 31, 2021, respectively.
ABOUT OP BANCORP
OP Bancorp, the holding company for Open Bank (the “Bank”), is a
California corporation whose common stock is quoted on the Nasdaq
Global Market under the ticker symbol, “OPBK.” The Bank is engaged
in the general commercial banking business in Los Angeles, Orange,
and Santa Clara Counties, California, and Carrollton, Texas and is
focused on serving the banking needs of small- and medium-sized
businesses, professionals, and residents with a particular emphasis
on Korean and other ethnic minority communities. The Bank currently
operates with ten full-service branch offices in Downtown Los
Angeles, Los Angeles Fashion District, Los Angeles Koreatown,
Cerritos, Gardena, Buena Park, and Santa Clara, California and
Carrollton, Texas. The Bank also has four loan production offices
in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, and
Lynnwood, Washington. The Bank commenced its operations on June 10,
2005 as First Standard Bank and changed its name to Open Bank in
October 2010. Its headquarters is located at 1000 Wilshire Blvd.,
Suite 500, Los Angeles, California 90017. Phone 213.892.9999;
www.myopenbank.com.
Cautionary Note Regarding Forward-Looking Statements
Certain matters set forth herein constitute “forward-looking
statements” within the meaning of 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: business and economic
conditions, particularly those affecting the financial services
industry and our primary market areas; our ability to successfully
manage our credit risk and the sufficiency of our allowance for
loan losses; factors that can impact the performance of our loan
portfolio, including real estate values and liquidity in our
primary market areas, the financial health of our commercial
borrowers, the success of construction projects that we finance,
including any loans acquired in acquisition transactions; our
ability to effectively execute our strategic plan and manage our
growth; interest rate fluctuations, which could have an adverse
effect on our profitability; liquidity issues, including
fluctuations in the fair value and liquidity of the securities we
hold for sale and our ability to raise additional capital, if
necessary; external economic and/or market factors, such as changes
in monetary and fiscal policies and laws, including the interest
rate policies of the Federal Reserve, inflation or deflation,
changes in the demand for loans, and fluctuations in consumer
spending, borrowing and savings habits, which may have an adverse
impact on our financial condition; continued or increasing
competition from other financial institutions, credit unions, and
non-bank financial services companies, many of which are subject to
different regulations than we are; challenges arising from
unsuccessful attempts to expand into new geographic markets,
products, or services; restraints on the ability of Open Bank to
pay dividends to us, which could limit our liquidity; increased
capital requirements imposed by banking regulators, which may
require us to raise capital at a time when capital is not available
on favorable terms or at all; a failure in the internal controls we
have implemented to address the risks inherent to the business of
banking; inaccuracies in our assumptions about future events, which
could result in material differences between our financial
projections and actual financial performance; changes in our
management personnel or our inability to retain motivate and hire
qualified management personnel; disruptions, security breaches, or
other adverse events, failures or interruptions in, or attacks on,
our information technology systems; disruptions, security breaches,
or other adverse events affecting the third-party vendors who
perform several of our critical processing functions; an inability
to keep pace with the rate of technological advances due to a lack
of resources to invest in new technologies; risks related to
potential acquisitions; political developments, uncertainties or
instability, catastrophic events, acts of war or terrorism, or
natural disasters, such as earthquakes, fires, drought, pandemic
diseases (such as the coronavirus) or extreme weather events, any
of which may affect services we use or affect our customers,
employees or third parties with which we conduct business;
incremental costs and obligations associated with operating as a
public company; the impact of any claims or legal actions to which
we may be subject, including any effect on our reputation;
compliance with governmental and regulatory requirements, including
the Dodd-Frank Act and others relating to banking, consumer
protection, securities and tax matters, and our ability to maintain
licenses required in connection with commercial mortgage
origination, sale and servicing operations; changes in federal tax
law or policy; and our ability the manage the foregoing and other
factors set forth in the Company’s public reports. We describe
these and other risks that could affect our results in Item 1A.
“Risk Factors,” of our latest Annual Report on Form 10-K for the
year ended December 31, 2021 and in our other subsequent filings
with the Securities and Exchange Commission.
CONSOLIDATED BALANCE SHEETS (unaudited)
($ in thousands)
As of
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Assets
Cash and due from banks
$
12,952
$
25,516
$
11,283
(49.2
) %
14.8
%
Interest-bearing deposits in other
banks
70,020
81,765
104,176
(14.4
)
(32.8
)
Cash and cash equivalents
82,972
107,281
115,459
(22.7
)
(28.1
)
Securities available for sale, at fair
value
209,809
186,438
150,444
12.5
39.5
Other investments
12,098
12,074
10,999
0.2
10.0
Loans held for sale
15,408
36,642
89,428
(57.9
)
(82.8
)
Real estate loans
842,208
830,125
701,450
1.5
20.1
SBA loans (1)
263,644
232,569
275,858
13.4
(4.4
)
C&I loans
116,951
133,855
162,543
(12.6
)
(28.0
)
Home mortgage loans
482,949
419,469
173,303
15.1
178.7
Consumer & other loans
1,467
2,000
865
(26.7
)
69.6
Gross loans, net of unearned income
1,707,219
1,618,018
1,314,019
5.5
29.9
Allowance for loan losses
(19,241
)
(18,369
)
(16,123
)
4.7
19.3
Net loans receivable
1,687,978
1,599,649
1,297,896
5.5
30.1
Premises and equipment, net
4,400
4,383
4,355
0.4
1.0
Accrued interest receivable, net
7,180
5,856
4,579
22.6
56.8
Servicing assets
12,759
13,000
12,720
(1.9
)
0.3
Company owned life insurance
21,613
21,464
11,134
0.7
94.1
Deferred tax assets
13,717
17,296
8,409
(20.7
)
63.1
Operating right-of-use assets
9,097
8,265
8,905
10.1
2.2
Other assets
17,262
17,228
12,363
0.2
39.6
Total assets
$
2,094,293
$
2,029,575
$
1,726,691
3.2
%
21.3
%
Liabilities and Shareholders'
Equity
Liabilities
Noninterest bearing
$
701,584
$
794,631
$
774,754
(11.7
) %
(9.4
) %
Money market and others
526,321
524,911
380,226
0.3
38.4
Time deposits greater than $250,000
356,197
277,785
207,288
28.2
71.8
Other time deposits
301,669
219,484
171,798
37.4
75.6
Total deposits
1,885,771
1,816,811
1,534,066
3.8
22.9
Borrowings
50
10,000
—
(99.5
)
n/m
Accrued interest payable
2,771
1,099
558
152.1
396.6
Operating lease liabilities
10,213
9,485
10,307
7.7
(0.9
)
Other liabilities
18,572
22,085
16,538
(15.9
)
12.3
Total liabilities
1,917,377
1,859,480
1,561,469
3.1
22.8
Shareholders’ equity
Common stock
79,326
78,782
78,718
0.7
0.8
Additional paid-in capital
9,743
9,424
8,645
3.4
12.7
Retained earnings
105,690
99,487
79,056
6.2
33.7
Accumulated other comprehensive loss
(17,843
)
(17,598
)
(1,197
)
1.4
1390.6
Total shareholders’ equity
176,916
170,095
165,222
4.0
7.1
Total liabilities and shareholders'
equity
$
2,094,293
$
2,029,575
$
1,726,691
3.2
%
21.3
%
(1)
Includes SBA PPP loans of $442 thousand,
$1.1 million and $40.6 million as of December 31, 2022, September
30, 2022 and December 31, 2021, respectively.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
($ in thousands, except share and per
share data)
For the Three Months
Ended
% Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Interest income
Interest and fees on loans
$
24,719
$
21,780
$
17,271
13.5
%
43.1
%
Interest on securities available for
sale
1,237
881
362
40.4
241.7
Other interest income
930
573
189
62.3
392.1
Total interest income
26,886
23,234
17,822
15.7
50.9
Interest expense
Interest on deposits
6,598
2,889
726
128.4
808.8
Interest on borrowings
90
1
—
n/m
n/m
Total interest expense
6,688
2,890
726
131.4
821.2
Net interest income
20,198
20,344
17,096
(0.7
)
18.1
Provision for loan losses
977
662
1,898
47.6
(48.5
)
Net interest income after provision for
loan losses
19,221
19,682
15,198
(2.3
)
26.5
Noninterest income
Service charges on deposits
406
454
405
(10.6
)
0.2
Loan servicing fees, net of
amortization
705
610
521
15.6
35.3
Gain on sale of loans
1,684
3,490
6,033
(51.7
)
(72.1
)
Other income
428
267
330
60.3
29.7
Total noninterest income
3,223
4,821
7,289
(33.1
)
(55.8
)
Noninterest expense
Salaries and employee benefits
7,080
7,343
5,560
(3.6
)
27.3
Occupancy and equipment
1,560
1,537
1,418
1.5
10.0
Data processing and communication
514
586
637
(12.3
)
(19.3
)
Professional fees
330
602
267
(45.2
)
23.6
FDIC insurance and regulatory
assessments
176
238
182
(26.1
)
(3.3
)
Promotion and advertising
12
177
156
(93.2
)
(92.3
)
Directors’ fees
145
170
166
(14.7
)
(12.7
)
Foundation donation and other
contributions
851
875
901
(2.7
)
(5.5
)
Other expenses
659
810
304
(18.6
)
116.8
Total noninterest expense
11,327
12,338
9,591
(8.2
)
18.1
Income before income tax expense
11,117
12,165
12,896
(8.6
)
(13.8
)
Income tax expense
3,089
3,515
3,762
(12.1
)
(17.9
)
Net income
$
8,028
$
8,650
$
9,134
(7.2
) %
(12.1
) %
Book value per share
$
11.59
$
11.19
$
10.92
3.6
%
6.1
%
Earnings per share - Basic
$
0.52
$
0.56
$
0.60
(7.1
) %
(13.3
) %
Earnings per share - Diluted
$
0.51
$
0.55
$
0.59
(7.3
) %
(13.6
) %
Shares of common stock outstanding
15,270,344
15,199,840
15,137,808
0.5
%
0.9
%
Weighted Average Shares:
- Basic
15,208,308
15,195,826
15,136,229
0.1
%
0.5
%
- Diluted
15,264,971
15,275,156
15,227,291
(0.1
) %
0.2
%
Key Ratios
For the Three Months
Ended
Change 4Q22 vs.
4Q22
3Q22
4Q21
3Q22
4Q21
Return on average assets (ROA) (1)
1.56
%
1.77
%
2.11
%
(0.2
) %
(0.6
) %
Return on average equity (ROE) (1)
18.58
%
19.91
%
22.68
%
(1.3
) %
(4.1
) %
Net interest margin (1)
4.08
%
4.31
%
4.07
%
(0.2
) %
—
%
Efficiency ratio
48.36
%
49.03
%
39.34
%
(0.7
) %
9.0
%
Total risk-based capital ratio
12.87
%
13.10
%
13.66
%
(0.2
) %
(0.8
) %
Tier 1 risk-based capital ratio
11.70
%
11.92
%
12.42
%
(0.2
) %
(0.7
) %
Common equity tier 1 ratio
11.70
%
11.92
%
12.42
%
(0.2
) %
(0.7
) %
Leverage ratio
9.38
%
9.52
%
9.58
%
(0.1
) %
(0.2
) %
(1)
Annualized.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
($ in thousands, except share and per
share data)
For the Twelve Months Ended
December 31,
2022
2021
% Change
Interest income
Interest and fees on loans
$
82,864
$
62,448
32.7
%
Interest on securities available for
sale
3,351
1,085
208.8
Other interest income
1,997
625
219.5
Total interest income
88,212
64,158
37.5
Interest expense
Interest on deposits
11,210
3,132
257.9
Interest on borrowings
91
—
n/m
Total interest expense
11,301
3,132
260.8
Net interest income
76,911
61,026
26.0
Provision for loan losses
2,976
522
470.1
Net interest income after provision for
loan losses
73,935
60,504
22.2
Noninterest income
Service charges on deposits
1,675
1,562
7.2
Loan servicing fees, net of
amortization
2,416
1,953
23.7
Gain on sale of loans
12,285
11,313
8.6
Other income
1,243
1,189
4.5
Total noninterest income
17,619
16,017
10.0
Noninterest expense
Salaries and employee benefits
27,189
21,253
27.9
Occupancy and equipment
5,964
5,213
14.4
Data processing and communication
2,085
2,000
4.3
Professional fees
1,620
1,192
35.9
FDIC insurance and regulatory
assessments
813
583
39.5
Promotion and advertising
543
684
(20.6
)
Directors’ fees
682
593
15.0
Foundation donation and other
contributions
3,393
2,890
17.4
Other expenses
2,541
1,457
74.4
Total noninterest expense
44,830
35,865
25.0
Income before income tax expense
46,724
40,656
14.9
Income tax expense
13,414
11,816
13.5
Net income
$
33,310
$
28,840
15.5
%
Book value per share
$
11.59
$
10.92
6.1
%
Earnings per share - Basic
$
2.15
$
1.89
13.8
%
Earnings per share - Diluted
$
2.14
$
1.88
13.8
%
Shares of common stock outstanding
15,270,344
15,137,808
0.9
%
Weighted Average Shares:
- Basic
15,171,240
15,087,686
0.6
%
- Diluted
15,231,418
15,155,347
0.5
%
Key Ratios
For the Twelve Months Ended
December 31,
2022
2021
Change
Return on average assets (ROA) (1)
1.74
%
1.83
%
(0.1
) %
Return on average equity (ROE) (1)
19.57
%
18.90
%
0.7
%
Net interest margin (1)
4.18
%
4.02
%
0.2
%
Efficiency ratio
47.42
%
46.55
%
0.9
%
Total risk-based capital ratio
12.87
%
13.66
%
(0.8
) %
Tier 1 risk-based capital ratio
11.70
%
12.42
%
(0.7
) %
Common equity tier 1 ratio
11.70
%
12.42
%
(0.7
) %
Leverage ratio
9.38
%
9.58
%
(0.2
) %
(1)
Annualized.
ASSET QUALITY
($ in thousands)
As of and For the Three Months
Ended
4Q22
3Q22
4Q21
Nonaccrual Loans (1)
$
2,639
$
2,251
$
3,000
Loans 90 days or more past due, accruing
(2)
441
—
200
Accruing restructured loans
—
—
—
Nonperforming loans
3,080
2,251
3,200
Other real estate owned ("OREO")
—
—
—
Nonperforming assets
$
3,080
$
2,251
$
3,200
Criticized loans (3) by loan type:
Commercial real estate
$
563
$
—
$
—
SBA loans
1,472
1,817
2,688
C&I loans
555
742
313
Home mortgage loans
1,280
983
1,038
Total criticized loans (3)
$
3,870
$
3,542
$
4,039
Nonperforming assets/total assets
0.15
%
0.11
%
0.19
%
Nonperforming assets / gross loans plus
OREO
0.18
%
0.14
%
0.24
%
Nonperforming loans / gross loans
0.18
%
0.14
%
0.24
%
Allowance for loan losses / nonperforming
loans
625
%
816
%
503
%
Allowance for loan losses / nonperforming
assets
625
%
816
%
503
%
Allowance for loan losses / gross
loans
1.13
%
1.14
%
1.23
%
Criticized loans (3) / gross loans
0.23
%
0.22
%
0.31
%
Classified loans / gross loans
0.19
%
0.22
%
0.31
%
Net charge-offs (recoveries)
$
105
$
(5
)
$
168
Net charge-offs (recoveries) to average
gross loans (4)
0.03
%
(0.00
) %
0.05
%
(1)
Includes the guaranteed portion of SBA
loans that are in liquidation totaling $606 thousand, $442 thousand
and $1.0 million as of December 31, 2022, September 30, 2022 and
December 31, 2021, respectively.
(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)
4Q22
3Q22
4Q21
Accruing delinquent loans 30-89 days past
due
30-59 days
$ 1,918
$ 360
$ 76
60-89 days
1,559
845
336
Total (1)
$ 3,477
$ 1,205
$ 412
(1)
Includes the guaranteed portion of PPP
loans totaling $756 thousand and $408 thousand as of September 30,
2022 and December 31, 2021, respectively.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE
ANALYSIS
For the Three Months
Ended
4Q22
3Q22
4Q21
($ 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
$
75,988
$
734
3.78
%
$
75,599
$
427
2.21
%
$
192,302
$
73
0.15
%
Federal funds sold and other
investments
12,074
196
6.47
12,221
146
4.78
11,012
116
4.23
Available-for-sale debt securities, at
fair value
186,461
1,237
2.66
172,696
881
2.04
122,137
362
1.19
Real estate loans
836,609
11,172
5.30
810,158
10,144
4.97
685,394
7,774
4.50
SBA loans
289,408
6,681
9.16
286,903
5,850
8.09
400,059
6,829
6.77
C&I loans
114,265
1,917
6.66
140,098
1,952
5.53
133,104
1,334
3.98
Home mortgage loans
449,684
4,929
4.38
375,804
3,820
4.07
123,822
1,320
4.27
Consumer & other loans
1,676
20
4.80
1,037
14
4.88
1,035
14
5.21
Loans (2)
1,691,642
24,719
5.81
1,614,000
21,780
5.36
1,343,414
17,271
5.10
Total interest-earning assets
1,966,165
26,886
5.43
1,874,516
23,234
4.92
1,668,865
17,822
4.24
Noninterest-earning assets
87,189
83,398
62,996
Total assets
$
2,053,354
$
1,957,914
$
1,731,861
Interest-bearing liabilities:
Money market deposits and others
$
515,747
$
3,045
2.34
%
$
502,166
$
1,506
1.19
%
$
378,849
$
283
0.30
%
Time deposits
569,584
3,553
2.47
445,271
1,383
1.23
401,938
443
0.44
Total interest-bearing deposits
1,085,331
6,598
2.41
947,437
2,889
1.21
780,787
726
0.37
Borrowings
8,158
90
4.35
130
1
3.00
4
—
—
Total interest-bearing liabilities
1,093,489
6,688
2.43
947,567
2,890
1.21
780,791
726
0.37
Noninterest-bearing liabilities:
Noninterest-bearing deposits
751,405
806,289
765,012
Other noninterest-bearing liabilities
35,593
30,258
24,994
Total noninterest-bearing liabilities
786,998
836,547
790,006
Shareholders’ equity
172,867
173,800
161,064
Total liabilities and shareholders’
equity
$
2,053,354
$
1,957,914
$
1,731,861
Net interest income / interest rate
spreads
$
20,198
3.01
%
$
20,344
3.71
%
$
17,096
3.87
%
Net interest margin
4.08
%
4.31
%
4.07
%
Cost of deposits & cost of funds:
Total deposits / cost of deposits
$
1,836,736
$
6,598
1.43
%
$
1,753,726
$
2,889
0.65
%
1,545,799
$
726
0.19
%
Total funding liabilities / cost of
funds
$
1,844,894
$
6,688
1.44
%
$
1,753,856
$
2,890
0.65
%
1,545,803
$
726
0.19
%
(1)
Annualized.
(2)
Includes loans held for sale.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE
ANALYSIS
For the Twelve Months Ended
December 31,
2022
2021
($ in thousands)
Average
Balance
Interest
and Fees
Yield/
Rate (1)
Average
Balance
Interest
and Fees
Yield/
Rate (1)
Interest-earning assets:
Interest-bearing deposits in other
banks
$
79,482
$
1,399
1.76
%
$
132,090
$
170
0.13
%
Federal funds sold and other
investments
11,810
598
5.06
10,755
455
4.23
Available-for-sale debt securities, at
fair value
170,479
3,351
1.97
108,346
1,085
1.00
Real estate loans
777,776
37,861
4.87
672,045
30,645
4.56
SBA loans
321,757
24,073
7.48
355,114
21,760
6.13
C&I loans
142,630
7,217
5.06
114,629
4,463
3.89
Home mortgage loans
334,984
13,660
4.08
122,465
5,520
4.51
Consumer & other loans
1,071
53
4.94
1,095
60
5.51
Loans (2)
1,578,218
82,864
5.25
1,265,348
62,448
4.94
Total interest-earning assets
1,839,989
88,212
4.79
1,516,539
64,158
4.23
Noninterest-earning assets
76,883
55,200
Total assets
$
1,916,872
$
1,571,739
Interest-bearing liabilities:
Money market deposits and others
$
475,414
$
5,305
1.12
%
$
362,900
$
1,134
0.31
%
Time deposits
445,169
5,905
1.33
378,585
1,998
0.53
Total interest-bearing deposits
920,583
11,210
1.22
741,485
3,132
0.42
Borrowings
2,089
91
4.33
1,988
—
—
Total interest-bearing liabilities
922,672
11,301
1.22
743,473
3,132
0.42
Noninterest-bearing liabilities:
Noninterest-bearing deposits
796,175
656,130
Other noninterest-bearing liabilities
27,829
19,558
Total noninterest-bearing liabilities
824,004
675,688
Shareholders’ equity
170,196
152,578
Total liabilities and shareholders’
equity
$
1,916,872
1,571,739
Net interest income / interest rate
spreads
$
76,911
3.57
%
$
61,026
3.81
%
Net interest margin
4.18
%
4.02
%
Cost of deposits & cost of funds:
Total deposits / cost of deposits
$
1,716,758
$
11,210
0.65
%
1,397,615
$
3,132
0.22
%
Total funding liabilities / cost of
funds
$
1,718,847
$
11,301
0.66
%
1,399,603
$
3,132
0.22
%
(1)
Annualized.
(2)
Includes loans held for sale.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230126005906/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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Grafico Azioni OP Bancorp (NASDAQ:OPBK)
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