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News Release OP Bancorp Reports Third Quarter 2025 Net Income of $6.7 Million, Diluted EPS of $0.45 compared with second quarter 2025 net income of $6.3 million, diluted EPS of $0.42, and third quarter 2024 net income of $5.4 million, diluted EPS of $0.36 Higher revenue and net income; improved efficiency ratio; stable credit quality Los Angeles, CA (October 23, 2025) — OP Bancorp (the "Company") (NASDAQ: OPBK), parent company of Open Bank, today reported: | ($ in thousands, except per share data) | | | | A ...

Company Overview - OP Bancorp has a market capitalization of approximately $191 million, indicating it is a relatively small company in the market [1]. Industry Insights - Crude Value Insights focuses on the oil and natural gas sector, emphasizing cash flow generation and identifying companies with value and growth potential [1]. - Subscribers to Crude Value Insights benefit from a stock model account featuring over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [2].

Exhibit 99.1 OP BANCORP REPORTS NET INCOME FOR SECOND QUARTER 2025 OF $6.3 MILLION AND DILUTED EARNINGS PER SHARE OF $0.42 Second Quarter 2025 Highlights compared with First Quarter 2025: • Financial Results: • Credit Quality: • Capital Levels: (1) Annualized. (2) Includes special mention, substandard, doubtful, and loss categories. LOS ANGELES, July 24, 2025 — OP Bancorp (the "Company") (NASDAQ: OPBK), the holding company of Open Bank (the "Bank"), today reported its financial results for the second quarte ...

Core Viewpoint - OP Bancorp (OPBK) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on a company's changing earnings picture, which is crucial for predicting near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. OP Bancorp's Earnings Outlook - The recent upgrade for OP Bancorp indicates a positive outlook for its earnings, which is expected to drive buying pressure and increase its stock price [3][5]. - For the fiscal year ending December 2025, OP Bancorp is projected to earn $1.71 per share, with a 17.1% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - OP Bancorp's upgrade places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: OP Bancorp (OPBK) - OP Bancorp currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Performance Metrics - OPBK shares have increased by 9.8% over the past week, outperforming the Zacks Banks - Southwest industry, which rose by 2.55% [5] - Over the past month, OPBK's price change is 8.79%, compared to the industry's 2.7% [5] - In the last quarter, OPBK shares rose by 17.66%, and over the past year, they increased by 36.16%, while the S&P 500 saw gains of 10.83% and 14.92%, respectively [6] Trading Volume - The average 20-day trading volume for OPBK is 152,317 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, one earnings estimate for OPBK has increased, while none have decreased, raising the consensus estimate from $1.68 to $1.71 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [9] Conclusion - Given the strong performance metrics and positive earnings outlook, OP Bancorp is identified as a promising momentum pick with a Momentum Score of A and a Zacks Rank of 2 (Buy) [11]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for OP Bancorp as of March 31, 2025, including balance sheets, income statements, and cash flows, showing increases in assets, loans, deposits, and net income year-over-year [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to **$2.51 billion** as of March 31, 2025, driven by increased loans and cash, with liabilities rising due to deposit growth and equity at **$210.1 million** Consolidated Balance Sheet Highlights (Unaudited) | ($ in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,512,971** | **$2,366,013** | | Cash and cash equivalents | $198,861 | $134,943 | | Loans receivable, net | $2,018,517 | $1,932,056 | | **Total Liabilities** | **$2,302,882** | **$2,161,020** | | Total deposits | $2,189,871 | $2,027,285 | | **Total Shareholders' Equity** | **$210,089** | **$204,993** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2025 was **$5.6 million**, up 6.4% YoY, driven by increased net interest income and noninterest income, partially offset by higher expenses Q1 2025 vs Q1 2024 Income Statement (Unaudited) | ($ in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $17,418 | $15,979 | | Provision for credit losses | $736 | $145 | | Noninterest income | $4,816 | $3,586 | | Noninterest expense | $13,814 | $12,157 | | **Net Income** | **$5,560** | **$5,226** | | **Earnings Per Share - Diluted** | **$0.37** | **$0.34** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from financing activities was **$140.1 million** in Q1 2025, primarily from deposit increases, leading to a **$63.9 million** overall cash increase Cash Flow Summary for Three Months Ended March 31 (Unaudited) | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from (used in) operating activities | $5,645 | $(3,154) | | Net cash used in investing activities | $(81,818) | $(34,524) | | Net cash from financing activities | $140,091 | $85,708 | | **Net change in cash and cash equivalents** | **$63,918** | **$48,030** | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, loan portfolios, CECL, deposit maturities, borrowings, and regulatory capital, highlighting Open Bank's commercial banking focus - The company operates through its wholly owned subsidiary, Open Bank, with **eleven full-service branches** and **five loan production offices** across multiple states[26](index=26&type=chunk) - The loan portfolio is primarily composed of Commercial Real Estate (**$1.02 billion**) and Home Mortgages (**$559.5 million**), together representing over **77%** of gross loans receivable as of March 31, 2025[37](index=37&type=chunk) - As of March 31, 2025, the Bank exceeded all regulatory capital requirements to be considered 'well-capitalized', with a Total risk-based capital ratio of **12.24%** against a **10.00%** requirement[106](index=106&type=chunk)[193](index=193&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, with net income up 6.4% to **$5.6 million** and total assets growing to **$2.51 billion**, driven by loan and deposit growth - Management attributes recent performance challenges and strategic shifts to interest rate fluctuations, impacting cost of funds, net interest margins, and loan volumes[114](index=114&type=chunk)[115](index=115&type=chunk) Q1 2025 vs Q1 2024 Performance Highlights | ($ in thousands, except per share data) | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $5,560 | $5,226 | | Diluted income per share | $0.37 | $0.34 | | Return on average assets | 0.92% | 0.96% | | Return on average equity | 10.73% | 10.83% | | Net interest margin | 3.01% | 3.06% | Balance Sheet Highlights (Q1 2025 vs YE 2024) | ($ in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross loans | $2,043,885 | $1,956,852 | | Total assets | $2,512,971 | $2,366,013 | | Total deposits | $2,189,871 | $2,027,285 | | Shareholders' equity | $210,089 | $204,993 | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Net income for Q1 2025 rose to **$5.6 million** from **$5.2 million** in Q1 2024, driven by increased net interest and noninterest income, partially offset by higher expenses - Net interest income increased by **$1.4 million** YoY, as a **$1.9 million** increase in interest income outpaced a **$0.5 million** increase in interest expense[128](index=128&type=chunk)[136](index=136&type=chunk) - Noninterest income grew by **$1.2 million (34.3%)** YoY, driven by increases in service charges on deposits (**$388 thousand**), loan servicing fees (**$235 thousand**), and gain on sale of loans (**$316 thousand**)[143](index=143&type=chunk) - Noninterest expense rose by **$1.7 million (13.6%)** YoY, primarily due to a **$935 thousand** increase in salaries and benefits and an **$816 thousand** increase in other expenses[148](index=148&type=chunk)[149](index=149&type=chunk) [Financial Condition](index=46&type=section&id=Financial%20Condition) As of March 31, 2025, total assets reached **$2.51 billion**, with gross loans at **$2.04 billion** and deposits at **$2.19 billion**, while nonperforming loans rose to **$10.4 million** - Gross loans increased by **$87.0 million (4.4%)** to **$2.04 billion** in Q1 2025, driven by **$205.8 million** in new originations, offset by **$31.1 million** in sales and **$87.7 million** in payoffs[161](index=161&type=chunk) - Nonperforming loans rose to **$10.4 million** as of March 31, 2025, from **$7.8 million** at year-end 2024, with the ratio to gross loans increasing to **0.51%** from **0.40%**[179](index=179&type=chunk)[182](index=182&type=chunk) - Total deposits increased by **$162.6 million (8.0%)** to **$2.19 billion** in Q1 2025, with noninterest-bearing deposits growing to **25.2%** of total deposits[120](index=120&type=chunk)[184](index=184&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$381.3 million** in liquid assets and **$699.0 million** in available borrowings, remaining well-capitalized with a **12.24%** total risk-based capital ratio Liquidity Position as of March 31, 2025 | ($ in thousands) | March 31, 2025 | | :--- | :--- | | Liquid assets (Cash + AFS securities) | $381,341 | | Total available borrowings | $699,019 | | **Total liquid assets and available borrowings** | **$1,080,360** | | *Ratio to total deposits* | *49.3%* | Bank Regulatory Capital Ratios as of March 31, 2025 | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | CET1 capital ratio | 10.99% | 6.50% | | Tier 1 capital ratio | 10.99% | 8.00% | | Total capital ratio | 12.24% | 10.00% | | Tier 1 leverage ratio | 9.15% | 5.00% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed by ALM, projecting a **1.91%** NII increase for a +100 bps rate shift and a **1.03%** decrease for a -100 bps shift - The company's primary market risk is interest rate risk, stemming from repricing differences, option risk, yield curve risk, and basis risk[195](index=195&type=chunk)[196](index=196&type=chunk) Interest Rate Sensitivity Analysis as of March 31, 2025 | Rate Shock | Net Interest Income Sensitivity (12-month) | Economic Value of Equity (EVE) Sensitivity | | :--- | :--- | :--- | | +300 bps | +4.24% | -21.95% | | +200 bps | +3.48% | -10.67% | | +100 bps | +1.91% | -3.39% | | -100 bps | -1.03% | +2.19% | [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The President and CEO and the CFO concluded that the Company's disclosure controls and procedures were **effective** as of March 31, 2025[205](index=205&type=chunk) - No material changes to the Company's internal control over financial reporting were identified during the quarter[206](index=206&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to normal course legal proceedings, with no expected material impact on financial statements - Management has reviewed all legal claims and does not expect any to have a **material impact** on the company's financial statements[209](index=209&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section details material risks including cybersecurity, vendor dependence, geographic concentration, commercial real estate loan concentration, management transitions, and growth restrictions - The company identifies significant risk from constantly evolving and sophisticated cybersecurity threats, potentially causing **material harm** to the business[211](index=211&type=chunk)[215](index=215&type=chunk) - A significant portion of the loan portfolio (**89.0%** as of March 31, 2025) is secured by real estate, making the company vulnerable to real estate market downturns, especially in Southern California[240](index=240&type=chunk) - The company is highly dependent on its management team and is undergoing a significant leadership succession in 2025, with a new CEO, COO, and CFO, which carries **transition risk**[243](index=243&type=chunk)[244](index=244&type=chunk) - Growth outside of California and other permitted markets is restricted by a Coexistence Agreement with Open Bank, S.A. of Spain regarding the use of the "Open Bank" name[254](index=254&type=chunk)[255](index=255&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period - None[285](index=285&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate governance documents, officer certifications, and Inline XBRL data - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL documents[289](index=289&type=chunk)

[Overview and Financial Highlights](index=1&type=section&id=OP%20BANCORP%20REPORTS%20NET%20INCOME%20FOR%202025%20FIRST%20QUARTER) This section presents the company's key financial performance and strategic highlights for the period [First Quarter 2025 Highlights](index=1&type=section&id=2025%20First%20Quarter%20Highlights%20compared%20with%202024%20Fourth%20Quarter) OP Bancorp reported strong financial results for Q1 2025, with net income rising to $5.6 million and diluted EPS to $0.37, up from $5.0 million and $0.33 in Q4 2024, respectively. The quarter saw growth in total assets, loans, and deposits, alongside an improved net interest margin of 3.01%. While credit quality showed a slight increase in nonperforming loans, the bank remains well-capitalized with a CET1 ratio of 11.08% and increased its book value per share | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net Income | $5.6 million | $5.0 million | | Diluted EPS | $0.37 | $0.33 | | Net Interest Income | $17.4 million | $16.9 million | | Net Interest Margin | 3.01% | 2.96% | | Total Assets | $2.51 billion | $2.37 billion | | Gross Loans | $2.04 billion | $1.96 billion | | Total Deposits | $2.19 billion | $2.03 billion | | Nonperforming Loans to Gross Loans | 0.51% | 0.40% | | Book Value Per Common Share | $14.09 | $13.83 | - The company paid a quarterly cash dividend of **$0.12 per share**[4](index=4&type=chunk) [CEO Statement](index=2&type=section&id=Min%20Kim%2C%20President%20and%20Chief%20Executive%20Officer%3A) President and CEO Min Kim highlighted the company's strong quarterly performance, attributing it to double-digit annualized growth in both loans (4.4% QoQ) and deposits (8.0% QoQ), coupled with a 5 basis point expansion in net interest margin. This resulted in a 12% increase in diluted EPS over the prior quarter. Despite acknowledging heightened economic and interest rate uncertainties, management remains optimistic about future growth and committed to its strategic goals - Loan portfolio grew by **4.4%** and deposits by **8.0%** during the first quarter[5](index=5&type=chunk) - Net interest margin improved by **5 basis points**, contributing to a **12% increase** in diluted EPS compared to the previous quarter[5](index=5&type=chunk) - Management remains optimistic about future growth despite acknowledging heightened uncertainties regarding economic conditions and interest rates[5](index=5&type=chunk) [Selected Financial Highlights (Table)](index=3&type=section&id=SELECTED%20FINANCIAL%20HIGHLIGHTS) This section provides a comprehensive table comparing key income statement, balance sheet, credit quality, and ratio data for Q1 2025 against Q4 2024 and Q1 2024. Notable year-over-year increases include a 9.0% rise in net interest income and a 13.2% growth in gross loans. However, nonperforming loans increased significantly by 139.7% YoY, though from a low base | ($ in thousands, except per share data) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | **Selected Income Statement Data:** | | | | | Net interest income | $17,418 | $16,929 | $15,979 | | Net income | $5,560 | $4,971 | $5,226 | | Diluted earnings per share | $0.37 | $0.33 | $0.34 | | **Selected Balance Sheet Data:** | | | | | Gross loans | $2,043,885 | $1,956,852 | $1,804,987 | | Total deposits | $2,189,871 | $2,027,285 | $1,895,411 | | Total assets | $2,512,971 | $2,366,013 | $2,234,520 | | **Credit Quality:** | | | | | Nonperforming loans | $10,412 | $7,820 | $4,343 | | Nonperforming loans to gross loans | 0.51% | 0.40% | 0.24% | | **Financial Ratios:** | | | | | Return on average assets (annualized) | 0.92% | 0.84% | 0.96% | | Net interest margin (annualized) | 3.01% | 2.96% | 3.06% | | Book value per common share | $14.09 | $13.83 | $13.00 | [Income Statement Analysis](index=4&type=section&id=INCOME%20STATEMENT%20HIGHLIGHTS) This section provides a detailed analysis of the company's revenues, expenses, and profitability drivers [Net Interest Income and Net Interest Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income (NII) for Q1 2025 was $17.4 million, a 2.9% increase from Q4 2024 and a 9.0% increase from Q1 2024. The net interest margin (NIM) expanded by 5 basis points sequentially to 3.01%, primarily due to a decrease in interest expense on deposits. Compared to the prior year, NIM decreased by 5 basis points as the cost of funds rose faster than asset yields | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Net interest income | $17,418 | $16,929 | $15,979 | | Net interest margin | 3.01% | 2.96% | 3.06% | - The QoQ increase in NII was driven by a **$574 thousand decrease** in interest expense on interest-bearing deposits, as deposit costs repriced faster than loan yields[8](index=8&type=chunk)[10](index=10&type=chunk) - The YoY increase in NII was due to a **$1.5 million increase** in interest income on loans from a larger average balance, which surpassed the **$933 thousand increase** in interest expense on deposits[9](index=9&type=chunk)[11](index=11&type=chunk) [Provision for Credit Losses](index=7&type=section&id=Provision%20for%20Credit%20Losses) The company recorded a total provision for credit losses of $736 thousand in Q1 2025. This represents a significant decrease of $811 thousand from Q4 2024, but an increase of $591 thousand from Q1 2024. The provision was primarily driven by an $87.0 million increase in loan balances, particularly in Home mortgage and CRE loans | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Provision for credit losses on loans | $687 | $1,859 | $193 | | Provision for (reversal of) credit losses on off-balance sheet exposure | $49 | $(312) | $(48) | | **Total provision for credit losses** | **$736** | **$1,547** | **$145** | - The provision for credit losses on loans of **$687 thousand** was mainly due to an **$87.0 million (4.4%) increase** in loan balances, with Home mortgage and CRE loans growing by **$43.0 million** and **$50.0 million**, respectively[14](index=14&type=chunk) [Noninterest Income](index=8&type=section&id=Noninterest%20Income) Noninterest income increased to $4.8 million in Q1 2025, up 9.0% from Q4 2024 and 34.3% from Q1 2024. The sequential growth was driven by higher other income and loan servicing fees. The year-over-year increase was broad-based, with significant gains in service charges on deposits, loan servicing fees, and gain on sale of loans | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Service charges on deposits | $1,000 | $967 | $612 | | Loan servicing fees, net of amortization | $1,007 | $858 | $772 | | Gain on sale of loans | $2,019 | $2,197 | $1,703 | | Other income | $790 | $395 | $499 | | **Total noninterest income** | **$4,816** | **$4,417** | **$3,586** | - The Bank sold **$31.1 million** in SBA loans at an average premium of **8.08%** in Q1 2025, compared to selling **$34.7 million** at **7.82%** in Q4 2024 and **$24.8 million** at **8.33%** in Q1 2024[19](index=19&type=chunk) - Other income increased by **$395 thousand** QoQ, primarily due to higher credit-related fees and a decrease in unrealized losses on CRA-qualified mutual funds[19](index=19&type=chunk) [Noninterest Expense](index=9&type=section&id=Noninterest%20Expense) Noninterest expense rose to $13.8 million in Q1 2025, a 5.2% increase from Q4 2024 and a 13.6% increase from Q1 2024. The growth in both periods was primarily driven by higher salaries and employee benefits due to an increased headcount. This was partially offset by a significant decrease in data processing costs following a core banking system change in late 2024 | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $8,776 | $8,277 | $7,841 | | Data processing and communication | $296 | $594 | $487 | | Other expenses | $1,375 | $950 | $559 | | **Total noninterest expense** | **$13,814** | **$13,133** | **$12,157** | - Salaries and benefits increased due to a rise in employee headcount to **240** from **231** in the previous quarter and **228** in the prior year[23](index=23&type=chunk) - Data processing and communication expenses decreased by **50.2%** QoQ and **39.2%** YoY due to a core banking system change completed in Q4 2024[23](index=23&type=chunk) [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) Income tax expense for Q1 2025 was $2.1 million, with an effective tax rate of 27.6%. This rate is higher than the 25.4% in Q4 2024, which benefited from year-end tax adjustments. It is slightly lower than the 28.0% rate in Q1 2024, due to tax benefits from vested restricted stock awards in the current quarter - The effective tax rate was **27.6%** in Q1 2025, compared to **25.4%** in Q4 2024 and **28.0%** in Q1 2024[24](index=24&type=chunk)[25](index=25&type=chunk) - The increase in the effective tax rate from Q4 2024 was due to the absence of year-end tax provision adjustments[24](index=24&type=chunk) [Balance Sheet Analysis](index=10&type=section&id=BALANCE%20SHEET%20HIGHLIGHTS) This section details the company's financial position, including assets, liabilities, and equity components [Loans](index=10&type=section&id=Loans) Gross loans reached $2.04 billion at the end of Q1 2025, marking a 4.4% increase from Q4 2024 and a 13.2% increase from Q1 2024. The growth was fueled by strong new loan originations of $205.8 million, a 61.6% increase from the previous quarter. Growth was particularly strong in Home mortgage and C&I loans | Gross Loans by Type ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | CRE loans | $1,023,278 | $980,247 | $905,534 | | SBA loans | $258,778 | $253,710 | $247,550 | | C&I loans | $202,250 | $213,097 | $147,508 | | Home mortgage loans | $559,543 | $509,524 | $502,995 | | **Gross loans** | **$2,043,885** | **$1,956,852** | **$1,804,987** | - New loan originations were **$205.8 million** in Q1 2025, a significant increase from **$127.4 million** in Q4 2024 and **$121.6 million** in Q1 2024[26](index=26&type=chunk)[28](index=28&type=chunk) - As of Q1 2025, the loan portfolio consisted of **32.8% fixed-rate**, **37.4% hybrid-rate**, and **29.8% variable-rate** loans[29](index=29&type=chunk) [Allowance for Credit Losses (ACL)](index=12&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses on loans ended Q1 2025 at $25.4 million, up from $24.8 million in Q4 2024. The increase was driven by a $687 thousand provision for credit losses, partially offset by net charge-offs of $115 thousand. The allowance for off-balance sheet exposure also increased slightly | ACL Roll-Forward ($ in thousands) | 1Q2025 | | :--- | :--- | | Beginning ACL on loans | $24,796 | | Provision for credit losses | $687 | | Gross charge-offs | $(130) | | Gross recoveries | $15 | | **Ending ACL on loans** | **$25,368** | [Asset Quality](index=13&type=section&id=Asset%20Quality) Asset quality metrics showed some deterioration but remained at relatively low levels. Nonperforming loans (NPLs) increased to 0.51% of gross loans from 0.40% in the prior quarter, primarily due to two home mortgage loans for which no loss is expected. Criticized loans also rose to 1.13% of gross loans. Net charge-offs were minimal at 0.02% of average loans, and the allowance to gross loans ratio stood at 1.24% | Asset Quality Metric | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Nonperforming loans to gross loans | 0.51% | 0.40% | 0.24% | | Criticized loans to gross loans | 1.13% | 1.00% | 0.64% | | Net charge-offs to average gross loans | 0.02% | 0.00% | 0.01% | | Allowance for credit losses to gross loans | 1.24% | 1.27% | 1.23% | - The **$2.6 million increase** in nonperforming loans was primarily due to two home mortgage loans totaling **$2.1 million**. The bank does not expect a loss due to sufficient collateral equity[33](index=33&type=chunk) - Criticized loans increased to **$23.1 million**, partly due to the aforementioned home mortgage loans and an SBA loan for a restaurant construction project that was downgraded to Special Mention due to a longer construction period[33](index=33&type=chunk)[34](index=34&type=chunk) [Deposits](index=14&type=section&id=Deposits) Total deposits grew strongly to $2.19 billion, an 8.0% increase from Q4 2024 and a 15.5% increase from Q1 2024. The quarterly growth was broad-based, with increases in noninterest-bearing deposits, money market accounts, and time deposits. The year-over-year growth was driven by customers' preference for higher-rate time deposits, which increased by 21.8%. Estimated uninsured deposits rose to 49.0% of total deposits | Deposit Composition ($ in thousands) | 1Q2025 | % of Total | 4Q2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing deposits | $552,797 | 25.2% | $504,928 | 24.9% | | Money market deposits and others | $385,080 | 17.6% | $329,095 | 16.2% | | Time deposits | $1,251,994 | 57.2% | $1,193,262 | 58.9% | | **Total deposits** | **$2,189,871** | **100.0%** | **$2,027,285** | **100.0%** | - QoQ deposit growth of **$162.6 million** was driven by increases of **$47.9 million** in noninterest-bearing, **$56.0 million** in money market, and **$58.7 million** in time deposits[37](index=37&type=chunk) - Estimated uninsured deposits were **$1.07 billion**, or **49.0%** of total deposits, as of March 31, 2025, up from **47.4%** in the prior quarter[35](index=35&type=chunk) [Other Highlights](index=15&type=section&id=OTHER%20HIGHLIGHTS) This section covers additional key financial aspects such as liquidity and capital adequacy [Liquidity](index=15&type=section&id=Liquidity) The company maintained a strong liquidity position with $381.3 million in liquid assets (cash and available-for-sale securities) and $699.0 million in available borrowing capacity from institutions like the FHLB and Federal Reserve. The combined total of liquid assets and available borrowings represented 49.3% of total deposits as of March 31, 2025 | ($ in thousands) | 1Q2025 | 4Q2024 | | :--- | :--- | :--- | | **Liquid Assets:** | | | | Cash and cash equivalents | $198,861 | $134,943 | | Available-for-sale debt securities | $182,480 | $185,909 | | **Total liquid assets** | **$381,341** | **$320,852** | | **Available Borrowings:** | | | | Federal Home Loan Bank—San Francisco | $381,456 | $401,900 | | Federal Reserve Bank | $217,563 | $215,115 | | Other Banks | $100,000 | $100,000 | | **Total available borrowings** | **$699,019** | **$717,015** | [Capital and Capital Ratios](index=15&type=section&id=Capital%20and%20Capital%20Ratios) The company remains well-capitalized, with all capital ratios exceeding regulatory requirements. The Common Equity Tier 1 (CET1) ratio was 11.08% as of March 31, 2025. The Board of Directors declared a quarterly cash dividend of $0.12 per share. No shares were repurchased during the quarter under the existing stock repurchase program - The Board of Directors declared a quarterly cash dividend of **$0.12 per share**, payable on or about May 22, 2025[41](index=41&type=chunk) - The Company did not repurchase any shares of its common stock during the first quarter of 2025[42](index=42&type=chunk) | OP Bancorp Capital Ratios | 1Q2025 | 4Q2024 | Minimum Well Capitalized Ratio | | :--- | :--- | :--- | :--- | | Common equity tier 1 ratio | 11.08% | 11.35% | 6.50% | | Tier 1 risk-based capital ratio | 11.08% | 11.35% | 8.00% | | Total risk-based capital ratio | 12.33% | 12.60% | 10.00% | | Leverage ratio | 9.22% | 9.27% | 5.00% | [Appendix: Consolidated Financial Statements](index=19&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20%28unaudited%29) This section includes the full consolidated financial statements and supplementary financial data [Consolidated Balance Sheets](index=19&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20%28unaudited%29) This section presents the detailed unaudited consolidated balance sheets as of March 31, 2025, compared to December 31, 2024, and March 31, 2024, showing a breakdown of assets, liabilities, and shareholders' equity. Total assets grew to $2.51 billion, a 6.2% increase from the prior quarter | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $198,861 | $134,943 | $139,246 | | Net loans receivable | $2,018,517 | $1,932,056 | $1,782,858 | | **Total assets** | **$2,512,971** | **$2,366,013** | **$2,234,520** | | **Liabilities and Shareholders' Equity** | | | | | Total deposits | $2,189,871 | $2,027,285 | $1,895,411 | | Total liabilities | $2,302,882 | $2,161,020 | $2,039,795 | | Total shareholders' equity | $210,089 | $204,993 | $194,725 | | **Total liabilities and shareholders' equity** | **$2,512,971** | **$2,366,013** | **$2,234,520** | [Consolidated Statements of Income](index=20&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28unaudited%29) This section provides the detailed unaudited consolidated statements of income for the three months ended March 31, 2025, compared to the previous quarter and the same quarter last year. It breaks down revenues and expenses, leading to a net income of $5.6 million for the quarter | ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Net interest income | $17,418 | $16,929 | $15,979 | | Provision for credit losses | $736 | $1,547 | $145 | | Total noninterest income | $4,816 | $4,417 | $3,586 | | Total noninterest expense | $13,814 | $13,133 | $12,157 | | **Net income** | **$5,560** | **$4,971** | **$5,226** | [Key Ratios and Asset Quality](index=22&type=section&id=KEY%20RATIOS) This section provides supplementary tables detailing key performance ratios and a more granular breakdown of asset quality metrics. Key ratios such as ROA (0.92%) and ROE (10.73%) are presented. Asset quality tables show nonperforming, criticized, and delinquent loans by loan type, with home mortgage loans being the primary source of new nonaccrual and delinquent loans in the quarter | Key Ratios | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Return on average assets (ROA) | 0.92% | 0.84% | 0.96% | | Return on average equity (ROE) | 10.73% | 9.75% | 10.83% | | Net interest margin | 3.01% | 2.96% | 3.06% | | Efficiency ratio | 62.13% | 61.52% | 62.14% | | Asset Quality ($ in thousands) | 1Q2025 | 4Q2024 | 1Q2024 | | :--- | :--- | :--- | :--- | | Nonperforming loans | $10,412 | $7,820 | $4,343 | | Criticized loans | $23,055 | $19,570 | $11,564 | | Accruing delinquent loans 30-89 days | $6,452 | $8,964 | $3,904 | [Average Balance Sheet and Yield/Rate Analysis](index=25&type=section&id=AVERAGE%20BALANCE%20SHEET%2C%20INTEREST%20AND%20YIELD%2FRATE%20ANALYSIS) This section presents a detailed analysis of average balances for assets and liabilities, along with the corresponding interest income/expense and yields/rates. Average interest-earning assets grew to $2.33 billion in Q1 2025. The yield on loans was 6.39%, while the cost of total deposits was 3.23%, contributing to a net interest margin of 3.01% | For the Three Months Ended 1Q2025 | Average Balance ($ in thousands) | Yield/Rate | | :--- | :--- | :--- | | Total interest-earning assets | $2,330,231 | 6.04% | | Loans | $2,005,044 | 6.39% | | Total interest-bearing liabilities | $1,640,780 | 4.31% | | Total deposits | $2,083,890 | 3.23% | | **Net interest margin** | | **3.01%** |

Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business.) OP Bancorp, operating through its subsidiary Open Bank, is a commercial bank headquartered in Los Angeles, California, primarily serving the Korean-American community. As of December 31, 2024, the bank had **$2.37 billion** in **total assets**, **$1.93 billion** in **net loans**, and **$2.03 billion** in **total deposits**. Its business strategy focuses on organic growth, leveraging its community relationships, and maintaining strong asset quality through disciplined lending in commercial real estate, SBA, and commercial loans. The bank operates through **eleven** **branches** and **five** **loan production offices** across California, Texas, Nevada, and other states Consolidated Financial Highlights as of December 31, 2024 | Metric | Amount (in billions) | | :--- | :--- | | Total Assets | $2.37 | | Total Deposits | $2.03 | | Total Loans, Net | $1.93 | | Total Shareholders' Equity | $0.205 | - The bank operates through **eleven** full-service **branches** and **five** **loan production offices**, with a focus on serving the Korean-American community in major metropolitan areas[16](index=16&type=chunk) - A key community initiative is the Open Stewardship Foundation, to which the company commits **10%** of its consolidated **net income** after taxes annually. Since its inception in **2011**, over **$17.5 million** has been donated[20](index=20&type=chunk)[25](index=25&type=chunk) [Lending Activities](index=9&type=section&id=Lending%20Activities) Loan Portfolio Composition (December 31, 2024 vs 2023) | Loan Category | 2024 Amount (in thousands) | 2023 Amount (in thousands) | | :--- | :--- | :--- | | Commercial real estate | $980,247 | $885,585 | | SBA | $253,710 | $239,692 | | Commercial and industrial | $213,097 | $120,970 | | Home mortgage | $509,524 | $518,024 | | Consumer | $274 | $1,574 | | **Gross loans receivable** | **$1,956,852** | **$1,765,845** | - The **loan portfolio** is geographically concentrated in Southern California, with **commercial real estate loans** constituting the largest portion at **50.1%** of **total loans** as of December 31, 2024[32](index=32&type=chunk) - The bank has been designated as an **SBA Preferred Lender** nationwide, which facilitates a more efficient marketing and approval process for its **SBA 7(a)** and **504 loan programs**[52](index=52&type=chunk) [Deposit Products](index=9&type=section&id=Deposit%20Products) Deposit Metrics (as of or for the year ended December 31, 2024) | Metric | Value | | :--- | :--- | | Total Deposits | $2.03 billion | | Core Deposits as % of Total Deposits | 72.1% | | Wholesale Deposits as % of Total Deposits | 21.4% | | Cost of Deposits (Annualized) | 3.48% | - **Core deposits**, defined as all deposits excluding time deposits over **$250,000**, are considered the primary low-cost funding source for the bank's lending activities[28](index=28&type=chunk) [Supervision and Regulation](index=18&type=section&id=Supervision%20and%20Regulation) - The company and its subsidiary, Open Bank, are extensively regulated by federal and state agencies, including the Federal Reserve, the FDIC, and the California Department of Financial Protection and Innovation (DFPI)[95](index=95&type=chunk)[97](index=97&type=chunk)[112](index=112&type=chunk) - The Bank is subject to **Basel III capital rules**, requiring minimum ratios for **common equity Tier 1**, **Tier 1**, and **total capital**, plus a **2.5%** **capital conservation buffer** to avoid restrictions on dividends and bonuses[101](index=101&type=chunk)[103](index=103&type=chunk) - Regulators have increased focus on **commercial real estate (CRE)** concentrations. As of December 31, 2024, the Bank's **CRE loans** represented **311%** of its **total risk-based capital**, slightly exceeding the **300%** supervisory threshold, which may warrant greater scrutiny[123](index=123&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors.) The company faces a wide range of risks, including those related to its business operations, loan portfolio, and regulatory environment. Key risks include cybersecurity threats, fluctuations in interest rates, and adverse economic conditions, particularly in the real estate market. The loan portfolio has significant concentration in commercial real estate and loans to small- and medium-sized businesses, which carry higher risk. The company is also dependent on its SBA lending program, subject to changes in government policy. Other material risks involve competition, reliance on key management, potential insufficiency of the allowance for credit losses, and extensive government regulation [Risks Related to Our Business](index=26&type=section&id=Risks%20Related%20to%20Our%20Business) - The business is vulnerable to interruptions from cyber-attacks, fraudulent activity, and other security breaches, which are increasing in sophistication, potentially leading to financial loss and reputational damage[140](index=140&type=chunk)[141](index=141&type=chunk) - Fluctuations in **interest rates**, driven by Federal Reserve monetary policy, can negatively impact **net interest income**, **loan origination volumes**, and the value of the securities portfolio[147](index=147&type=chunk)[148](index=148&type=chunk)[152](index=152&type=chunk) - The business is sensitive to general economic conditions, particularly in California. Recent wildfires in Los Angeles in January **2025** could impair borrowers' ability to repay loans and reduce collateral values[158](index=158&type=chunk) [Risks Related to Our Loans](index=30&type=section&id=Risks%20Related%20to%20Our%20Loans) - A significant portion of the **loan portfolio** (**88.0%** as of Dec **31**, **2024**) is secured by real estate, making the company vulnerable to negative changes in real estate values and liquidity[160](index=160&type=chunk) - **Commercial loans**, which comprised **73.9%** of the **total portfolio**, carry a higher degree of risk as repayment often depends on the successful operation of the underlying business or property[161](index=161&type=chunk) - The bank's single-family residential loan product consists primarily of **non-qualified mortgages**, which are considered less liquid and more risky than traditional qualified mortgages[163](index=163&type=chunk)[165](index=165&type=chunk) [Risks Related to our SBA Loan Program](index=32&type=section&id=Risks%20Related%20to%20our%20SBA%20Loan%20Program) - The **SBA lending program** is dependent on the U.S. federal government. Loss of the bank's **SBA Preferred Lender** status or changes to the **SBA program** could materially harm financial results[171](index=171&type=chunk) - The company incurs **credit risk** on the non-guaranteed portion of **SBA loans** it retains. If the SBA determines a loss is due to technical deficiencies in origination or servicing, it may seek recovery from the bank[172](index=172&type=chunk) - Recognition of gains on the sale of **SBA loans** is based on assumptions regarding values of retained portions and servicing rights. Significant errors in these assumptions could result in material revenue misstatements[174](index=174&type=chunk) [Risks Related to Cybersecurity](index=41&type=section&id=Risks%20Related%20to%20Cybersecurity) - The company's business is highly dependent on electronic infrastructure for collecting, storing, and processing sensitive customer and employee information, making it a target for cybercriminals[217](index=217&type=chunk) - As a smaller bank, the company relies heavily on third-party vendors for cybersecurity expertise. Failures or vulnerabilities in these vendors' systems could be harmful to the business and reputation[225](index=225&type=chunk) - The development of **AI-based technologies** is expected to accelerate both the number and sophistication of cybersecurity threats, requiring continuous and increasingly expensive investment in protective measures[220](index=220&type=chunk) [Item 1C. Cybersecurity](index=50&type=section&id=Item%201C.%20Cybersecurity.) The company has integrated cybersecurity into its overall risk management framework, overseen by the Information Security Officer (ISO) who reports regularly to the Board of Directors' Risk and Compliance Committee (BRCC). The strategy involves using up-to-date security controls, leveraging encryption, and conducting regular employee training. The company engages third-party experts for penetration testing and vulnerability scanning. The Board, through the BRCC, provides oversight, reviews risk assessments, and ensures management maintains appropriate expertise. To date, no cybersecurity threats have materially impaired the company's business or financial condition - The **Board Risk and Compliance Committee (BRCC)** is central to the Board's oversight of cybersecurity risks, receiving quarterly reports from the **Information Security Officer (ISO)** and **Chief Risk Officer**[279](index=279&type=chunk)[280](index=280&type=chunk) - The company engages external cybersecurity consultants to perform annual penetration testing, vulnerability scanning, and monitoring of suspicious activity[273](index=273&type=chunk) - The company utilizes industry-leading systems for **24/7** threat detection and has an incident response team that proactively searches for potential threats. A clear escalation process is in place for incidents deemed potentially material[284](index=284&type=chunk) [Item 2. Properties](index=53&type=section&id=Item%202.%20Properties.) The company's corporate offices are located at **1000 Wilshire Blvd.**, Los Angeles, California, under a lease expiring in January **2030**. The company leases all of its **eleven** **branch offices**, which are located in California (Los Angeles, Gardena, Buena Park, Santa Clara, Cerritos), Texas (Carrollton), and Nevada (Las Vegas). Additionally, it maintains leased **loan production offices** in California, Georgia, Colorado, Washington, and Virginia - The corporate headquarters are leased at **1000 Wilshire Blvd.**, Los Angeles, CA, with the lease expiring in January **2030**[286](index=286&type=chunk) - All **eleven** **branch offices** and **five** **loan production offices** are operated out of leased properties[288](index=288&type=chunk)[299](index=299&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=56&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's common stock trades on The Nasdaq Global Market under the symbol "**OPBK**". As of March **21**, **2025**, there were **159** record holders. The company maintains a quarterly cash dividend, which was increased to **$0.12** per share in July **2022**. The ability to pay dividends is dependent on the financial condition and regulatory limitations of its subsidiary, Open Bank - The company's **common stock** is traded on The Nasdaq Global Market under the symbol "**OPBK**"[303](index=303&type=chunk) - A quarterly cash dividend of **$0.12** per share was established in July **2022**, representing an annualized dividend of **$0.48** per share[305](index=305&type=chunk) - The ability to pay dividends is subject to the company's financial condition, regulatory requirements, and the capacity of its subsidiary, Open Bank, to pay dividends to the holding company[306](index=306&type=chunk)[307](index=307&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=57&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) For the year ended December 31, 2024, **net income** decreased by **11.9%** to **$21.1 million**, primarily due to a **$3.1 million** decrease in **net interest income** as rising deposit costs outpaced increases in asset yields. **Total assets** grew **10.2%** to **$2.37 billion**, driven by a **10.8%** increase in **gross loans** to **$1.96 billion** and a **12.2%** increase in **total deposits** to **$2.03 billion**. The **net interest margin** compressed by **38 basis points** to **2.99%**. The **provision for credit losses** increased to **$2.8 million**, reflecting the elevated interest rate environment. **Noninterest income** grew **15.8%**, while **noninterest expense** rose **5.2%**. The bank maintained a strong capital position, with all regulatory capital ratios exceeding "**well-capitalized**" minimums [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Year-Over-Year Performance Comparison (2024 vs. 2023) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $65.6M | $68.7M | (4.5)% | | Provision for Credit Losses | $2.8M | $1.7M | 66.7% | | Noninterest Income | $16.4M | $14.2M | 15.8% | | Noninterest Expense | $50.2M | $47.7M | 5.2% | | Net Income | $21.1M | $23.9M | (11.9)% | | Diluted EPS | $1.39 | $1.55 | (10.3)% | - **Net interest income** decreased by **$3.1 million** in **2024** due to higher interest expense on deposits, which repriced faster than interest-earning assets in the rising rate environment. The **net interest margin** compressed to **2.99%** from **3.37%** in **2023**[337](index=337&type=chunk)[341](index=341&type=chunk) - **Noninterest income** increased by **$2.2 million**, driven by higher service charges on deposits and a larger gain on the sale of **SBA loans**, which benefited from higher average sales premiums[355](index=355&type=chunk)[357](index=357&type=chunk) - **Noninterest expense** rose by **$2.5 million**, primarily due to a **$2.1 million** increase in **salaries** and **employee benefits** from a higher headcount and salary adjustments[363](index=363&type=chunk)[364](index=364&type=chunk) [Financial Condition](index=71&type=section&id=Financial%20Condition) Balance Sheet Highlights (December 31, 2024 vs. 2023) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | $2.37B | $2.15B | 10.2% | | Gross Loans | $1.96B | $1.77B | 10.8% | | Total Deposits | $2.03B | $1.81B | 12.2% | | Shareholders' Equity | $205.0M | $192.6M | 6.4% | - **Gross loans** increased by **$191.0 million** (**10.8%**), primarily from new loan production of **$502.8 million**, partially offset by payoffs and sales[387](index=387&type=chunk) - **Nonperforming loans** increased to **$7.8 million** (**0.40%** of **gross loans**) from **$6.1 million** (**0.34%** of **gross loans**) at year-end **2023**[403](index=403&type=chunk)[406](index=406&type=chunk) - The **allowance for credit losses** increased to **$24.8 million** (**1.27%** of **gross loans**) from **$22.0 million** (**1.25%** of **gross loans**) at the end of **2023**[399](index=399&type=chunk)[400](index=400&type=chunk) [Liquidity and Capital Resources](index=78&type=section&id=Liquidity%20and%20Capital%20Resources) Bank Regulatory Capital Ratios (as of December 31, 2024) | Ratio | Actual | Minimum to be "Well-Capitalized" | | :--- | :--- | :--- | | Total Risk-Based Capital | 12.50% | 10.00% | | Tier 1 Risk-Based Capital | 11.25% | 8.00% | | Common Equity Tier 1 Capital | 11.25% | 6.50% | | Tier 1 Leverage | 9.20% | 5.00% | - The Bank exceeded all regulatory capital requirements and was considered "**well-capitalized**" as of December 31, 2024[417](index=417&type=chunk) - **Total available liquidity**, including liquid assets and available borrowings, was **$1.04 billion**, representing **51.2%** of **total deposits** as of December 31, 2024[414](index=414&type=chunk)[415](index=415&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=81&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company's primary market risk is interest rate risk, which it manages through its Asset/Liability Management Committee (ALM). The company uses **Net Interest Income (NII)** simulation and **Economic Value of Equity (EVE)** models to measure potential impacts of interest rate changes. As of December 31, 2024, the company's balance sheet was asset-sensitive. A hypothetical immediate **100 basis point** increase in interest rates was projected to increase **net interest income** by **2.80%** over **12 months**, while a **100 basis point** decrease was projected to reduce it by **2.04%** Interest Rate Sensitivity Analysis (as of December 31, 2024) | Rate Shock | Net Interest Income Sensitivity (%) | Economic Value of Equity Sensitivity (%) | | :--- | :--- | :--- | | +300 bps | 7.10 | (21.91) | | +200 bps | 5.28 | (11.24) | | +100 bps | 2.80 | (3.95) | | -100 bps | (2.04) | 3.43 | - The company identifies **interest rate risk** as its primary source of market risk, arising from timing differences in repricing assets and liabilities, option risk, yield curve risk, and basis risk[420](index=420&type=chunk)[421](index=421&type=chunk) - The balance sheet is modeled to be asset sensitive, meaning **net interest income** is expected to increase in a rising rate environment[424](index=424&type=chunk)[429](index=429&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section contains the company's consolidated financial statements for the fiscal years ended December 31, 2024, 2023, and 2022, as audited by the independent registered public accounting firm, Crowe LLP. The statements include the Consolidated Balance Sheets, Statements of Income, Statements of Comprehensive Income, Statements of Changes in Shareholders' Equity, and Statements of Cash Flows, along with accompanying notes. The auditor's report provides an unqualified opinion on both the financial statements and the effectiveness of internal control over financial reporting as of December 31, 2024 - The independent auditor, Crowe LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of December 31, 2024[573](index=573&type=chunk) - The company adopted the new accounting standard for **credit losses (CECL)** on January 1, 2023, which resulted in a **$1.9 million** increase to the **allowance for credit losses** and a **$1.5 million** decrease to retained earnings[398](index=398&type=chunk)[574](index=574&type=chunk) [Item 9A. Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2024. Management also assessed the internal control over financial reporting based on the **COSO framework** and concluded it was effective. The independent registered public accounting firm, Crowe LLP, has also issued an audit report attesting to the effectiveness of the company's internal control over financial reporting. No material changes to internal controls were reported during the period - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[433](index=433&type=chunk)[434](index=434&type=chunk) - Based on the **COSO framework**, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[435](index=435&type=chunk)[437](index=437&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) The Board of Directors consists of **seven** **members**, **six** of whom are independent. The roles of Chairman and CEO are separate. The Board oversees risk management through various committees, including the Audit, Human Resources & Compensation, and Nomination & Governance committees. The report provides biographical information for all directors and executive officers, detailing their experience and qualifications. The company has established corporate governance principles, including a Code of Business Conduct and procedures for shareholder communications - The Board is comprised of **seven** **members**, with **six** determined to be independent. The roles of Chairman of the Board (Brian Choi) and President & CEO (Min J. Kim) are separate[447](index=447&type=chunk)[457](index=457&type=chunk) - The Board has three primary standing committees composed of independent directors: Audit, Human Resources & Compensation, and Nomination & Governance[460](index=460&type=chunk) - A leadership succession plan is underway, with Sang Oh succeeding Min Kim as CEO effective July 1, 2025, and Christine Oh transitioning from CFO to COO[181](index=181&type=chunk) [Item 11. Executive Compensation](index=95&type=section&id=Item%2011.%20Executive%20Compensation.) **Executive compensation** consists of **base salary**, annual cash bonuses under a **Management Incentive Plan**, **equity awards**, and other benefits. For **2024**, President and CEO Min J. Kim's **total compensation** was **$915,300**. The **Management Incentive Plan** for **2024** was based on achieving targets for **ROA**, **ROE**, and **efficiency ratio**, as well as individual performance goals. The company also maintains a **2021 Equity Incentive Plan** for granting stock options and restricted stock units to key employees and directors 2024 Summary Compensation Table | Name and Principal Position | Salary ($) | Non-Equity Incentive ($) | Total Compensation ($) | | :--- | :--- | :--- | :--- | | Min J. Kim, President and CEO | 576,300 | 315,900 | 915,300 | | Christine Y. Oh, EVP and CFO | 337,461 | 65,700 | 425,809 | | Sang K. Oh, EVP and CCO | 287,390 | 55,900 | 362,376 | - The **2024 Management Incentive Plan** was based on achieving financial targets for **ROA** (target **1.01%**), **ROE** (target **11.30%**), and **efficiency ratio** (target **57.35%**), along with individual goals[516](index=516&type=chunk) - The company has an employment agreement with CEO Min J. Kim, which includes provisions for severance upon termination without cause or in connection with a change in control[510](index=510&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=101&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) As of March **21**, **2025**, all directors and executive officers as a group beneficially owned **19.97%** of the company's common stock. The largest individual holder among them was Chairman Brian Choi, with **8.74%**. Two institutional investors, Manulife Financial Corporation and AllianceBernstein L.P., were reported as beneficial owners of more than **5%** of the common stock, holding **5.95%** and **5.42%** respectively. The company's **equity compensation plans** had **1,078,188** securities remaining available for future issuance as of December 31, 2024 Beneficial Ownership as of March 21, 2025 | Name of Beneficial Owner | Percent of Class | | :--- | :--- | | All directors and executive officers as a group (15 individuals) | 19.97% | | Brian Choi (Chairman) | 8.74% | | Manulife Financial Corporation | 5.95% | | AllianceBernstein L.P. | 5.42% | - As of December 31, 2024, there were **1,078,188** securities available for future issuance under the company's **equity compensation plans**[546](index=546&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=102&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) The company has a written policy for reviewing and approving related party transactions, overseen by the Audit Committee. Transactions with related parties, such as loans and deposits, are conducted in the ordinary course of business on terms comparable to those with unrelated parties. As of December 31, 2024, deposits from officers, directors, and their affiliates totaled **$2.3 million**. The company also has a significant relationship with the Open Stewardship Foundation, to which it commits **10%** of its after-tax **net income** annually. **Six** of the **seven** board members are deemed independent - The **Audit Committee** is responsible for reviewing and approving or ratifying any related party transactions to ensure they are on arm's-length terms[547](index=547&type=chunk)[550](index=550&type=chunk) - The company commits to donating **10%** of its consolidated annual after-tax **income** to the Open Stewardship Foundation, a non-profit organization whose board includes several of the company's directors[552](index=552&type=chunk) - As of December 31, 2024, deposits from officers, directors, and their affiliates totaled **$2.3 million**. There were no loans outstanding to this group[551](index=551&type=chunk) [Item 14. Principal Accountant Fees and Services](index=104&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services.) The company's independent auditor billed a total of **$742,271** for fiscal year **2024**, compared to **$654,803** for fiscal year **2023**. The majority of these fees were for audit services, with a smaller portion for tax-related services. The Audit Committee determined that the provision of these services was compatible with maintaining the auditor's independence Accountant Fees (Fiscal Years 2024 vs. 2023) | Category of Services | Fiscal Year 2024 ($) | Fiscal Year 2023 ($) | | :--- | :--- | :--- | | Audit fees | 673,050 | 597,795 | | Tax fees | 69,221 | 57,008 | | **Total accounting fees** | **742,271** | **654,803** | Part IV [Item 15. Exhibits and Financial Statement Schedules](index=105&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists the exhibits filed as part of the Form 10-K report. These include corporate governance documents like the Articles of Incorporation and Bylaws, material contracts such as employment agreements, and certifications required by the Sarbanes-Oxley Act. It also includes the consent of the independent registered public accounting firm and the Inline XBRL data files - This section provides a comprehensive list of all exhibits filed with the annual report, including governance documents, material contracts, and required certifications[560](index=560&type=chunk)[562](index=562&type=chunk)

Core Viewpoint - The article highlights OP Bancorp (OPBK) as a strong value stock, supported by its favorable valuation metrics and strong earnings outlook [4][8]. Valuation Metrics - OPBK has a Forward P/E ratio of 7.33, significantly lower than the industry average of 13.95, indicating potential undervaluation [4]. - The stock's P/B ratio stands at 1.01, compared to the industry's average P/B of 2, suggesting an attractive valuation relative to its book value [5]. - OPBK's P/S ratio is 1.31, while the industry average is 2.16, further supporting the notion of being undervalued [6]. - The P/CF ratio for OPBK is 7.92, in contrast to the industry's average of 15.86, indicating a solid cash flow outlook [7]. Investment Potential - The combination of OPBK's strong value metrics and positive earnings outlook positions it as an impressive value stock at the moment [8].