Core Insights - Three stocks are highlighted with strong income characteristics and a buy rank as of November 19th Group 1: First Hawaiian (FHB) - First Hawaiian offers a range of banking services including deposit products, lending services, and wealth management [1] - The Zacks Consensus Estimate for its current year earnings has increased by 4.9% over the last 60 days [1] - The company has a dividend yield of 4.5%, surpassing the industry average of 3.1% [2] Group 2: OP Bancorp (OPBK) - OP Bancorp provides commercial banking services to both retail and institutional customers [2] - The Zacks Consensus Estimate for its current year earnings has increased by 4.7% over the last 60 days [2] - The company has a dividend yield of 3.8%, compared to the industry average of 1.2% [2] Group 3: Jackson Financial (JXN) - Jackson Financial is a U.S. retirement services provider with a diverse portfolio of differentiated products [3] - The Zacks Consensus Estimate for its current year earnings has increased by 1.7% over the last 60 days [3] - The company has a dividend yield of 3.5%, which is higher than the industry average of 1.6% [3]

Core Viewpoint - OP Bancorp has successfully completed a private placement of $25 million in subordinated notes, indicating a strategic move to enhance its capital structure and financial flexibility [1]. Group 1: Financial Details - The private placement involved fixed-to-floating rate subordinated notes due in 2035, which may attract investors looking for stable returns [1]. - The issuance was conducted without registration under the Securities Act of 1933, suggesting a targeted approach to capital raising [1]. Group 2: Strategic Implications - This capital raise could provide OP Bancorp with additional resources to support growth initiatives and strengthen its balance sheet [1]. - The completion of this private placement reflects the company's ongoing efforts to optimize its funding strategy in a competitive banking environment [1].

Financial Performance - Net income for Q3 2025 was $6.7 million, up $1.3 million, or 23%, compared to $5.4 million in Q3 2024[116] - Net interest income for Q3 2025 increased to $20.3 million, up $3.8 million, or 23%, from the same quarter last year[116] - The efficiency ratio for Q3 2025 improved to 55.68%, a decrease of 563 basis points from the same period in 2024[116] - Return on average assets (ROA) for Q3 2025 was 1.04%, up from 0.94% in Q3 2024[116] - Return on average equity (ROE) for Q3 2025 was 12.36%, compared to 10.95% in Q3 2024[116] Asset and Loan Growth - Total assets reached $2.61 billion as of September 30, 2025, up $248.2 million, or 10%, from December 31, 2024[116] - Gross loans were $2.15 billion, up $194.4 million, or 10%, from December 31, 2024, primarily driven by growth in commercial real estate and home mortgage loans[116] - Total deposits were $2.27 billion, up $246.1 million, or 12%, from December 31, 2024, reflecting growth in time and money market deposits[116] - Average loan balances grew, contributing to the increase in interest income, despite a decline in loan yields due to repricing at lower interest rates[128] - The average gross loans increased to $2,107,081 thousand for the three months ended September 30, 2025, compared to $1,891,157 thousand for the same period in 2024[176] Interest Income and Margin - Net interest income for Q3 2025 increased by 23% year-over-year, driven by a $3.1 million (10%) increase in interest income on loans[128] - Net interest margin increased by 31 basis points, reflecting a 62 basis point increase in net interest spread[130] - The cost of deposits for Q3 2025 was 3.10%, down from 3.57% in the previous year[124] - The average interest rate on loans for Q3 2025 was 6.52%, compared to 6.66% in Q3 2024[124] Credit Losses and Nonperforming Loans - The provision for credit losses for Q3 2025 was $1.175 million, up from $448,000 in Q3 2024[116] - Nonperforming loans to gross loans ratio increased to 0.57% from 0.40% year-over-year[116] - Provision for credit losses for the first nine months of 2025 was $3.1 million, up from $1.2 million in the same period last year, reflecting higher qualitative reserves and loan growth[137] - Nonperforming loans rose by $4.5 million, or 57%, to $12.3 million as of September 30, 2025, primarily due to reclassifications of $3.4 million in SBA—real estate loans[181] Noninterest Income and Expenses - Total noninterest income for the first nine months of 2025 increased by $904 thousand, or 8%, primarily due to higher loan servicing fees and service charges on deposits[141] - Salaries and employee benefits for the first nine months of 2025 increased by $3.3 million, or 14%, driven by staffing growth and merit-based salary adjustments[150] - Total noninterest expense for the first nine months of 2025 rose by $4.4 million, or 12%, primarily due to higher salaries and employee benefits[149] Capital and Deposits - The Bank's total capital ratio was 12.06% as of September 30, 2025, exceeding the minimum requirement to be considered "well-capitalized"[197] - CET1 capital to risk-weighted assets was 10.81% for the Bank as of September 30, 2025, above the required minimum of 4.50%[197] - The company had estimated uninsured deposits of $1.13 billion, or 50% of total deposits, as of September 30, 2025[188] - Total deposits grew by 12% to $2,273,417 thousand as of September 30, 2025, from $2,027,285 thousand as of December 31, 2024[187] Interest Rate Risk Management - Interest rate risk is identified as the primary source of market risk for the Company, arising from changes in market interest rates[200] - The company employs a net interest income simulation model to evaluate potential changes in net interest income under various interest rate scenarios, running these simulations at least quarterly[206] - The company assesses interest rate risk by measuring both Earnings at Risk (EAR) and Economic Value of Equity (EVE), with EVE providing a period-end measurement of market value changes[206] - Interest rate risk management involves monitoring loan and deposit flows alongside investment and funding activities to determine the appropriate risk posture[203]

Core Insights - BAD BEAT Investing, led by Quad 7 Capital, is a team of 7 analysts with nearly 12 years of experience in identifying investment opportunities [1] - The firm is recognized for its February 2020 recommendation to sell all positions and go short, maintaining an average position of 95% long and 5% short since May 2020 [1] - The team possesses expertise across various fields including business, policy, economics, mathematics, game theory, and sciences [1] - BAD BEAT Investing focuses on short- and medium-term investments, income generation, special situations, and momentum trades [1] - The company emphasizes educating investors to become proficient traders through a structured playbook, providing in-depth research with clear entry and exit targets [1] Benefits of BAD BEAT Investing - Investors can learn to understand market dynamics and execute well-researched trade ideas weekly [2] - The service includes access to 4 chat rooms and daily summaries of key analyst upgrades and downgrades [2] - Participants can learn basic options trading and utilize extensive trading tools [2]

Financial Performance - OP Bancorp reported a net income of $6.7 million for Q3 2025, a 6% increase from $6.3 million in Q2 2025 and a 24% increase from $5.4 million in Q3 2024[1]. - Diluted EPS for Q3 2025 was $0.45, up 7% from $0.42 in Q2 2025 and up 25% from $0.36 in Q3 2024[1]. - Revenue for Q3 2025 increased by 3% to $24.476 million compared to $23.689 million in Q2 2025 and $20.746 million in Q3 2024[1]. - Net income for 3Q2025 was $6,703, reflecting a 6% increase from $6,333 in 2Q2025 and a 23% increase from $5,436 in 3Q2024[46]. - Net income for the quarter was $18,596,000, reflecting a 16% increase from $16,098,000 in 3Q2024[48]. Asset Quality - Credit quality remained stable with net charge-offs at 0.04% of average gross loans, indicating low levels of loan losses[1]. - Nonperforming loans rose to $12,312 thousand in 3Q2025, a 38% increase from $8,916 thousand in 2Q2025 and a 240% increase from $3,620 thousand in 3Q2024[27]. - The allowance for credit losses on loans increased to $27,299 thousand in 3Q2025, up from $26,286 thousand in 2Q2025, reflecting a $1,013 thousand increase compared to the previous quarter and a $4,339 thousand increase year-over-year[26]. - The allowance for credit losses ratio remained stable at 1.27% of gross loans in 3Q2025, unchanged from 2Q2025, and up from 1.19% in 3Q2024[27]. - The company reported a provision for credit losses of $3,117,000, a significant increase of 158% from $1,210,000 in 3Q2024[48]. Revenue and Income Sources - Interest income from loans rose by $3.1 million, driven by a $226.3 million increase in average loan balances, despite a 14 basis point decline in loan yields[13]. - Noninterest income increased by $162 thousand, or 4%, in 3Q2025 compared to 2Q2025, mainly due to higher gains on the sale of loans[15]. - Total noninterest income grew by 8% to $12,914,000, compared to $12,010,000 in 3Q2024[48]. - Total interest income increased by 8% to $111,046,000 compared to $102,569,000 in 3Q2024[48]. Efficiency and Cost Management - Noninterest expense decreased by 3% to $13.629 million in Q3 2025, contributing to an improved efficiency ratio of 55.68%[1]. - The efficiency ratio improved to 55.68%, down from 59.25% in 2Q2025, indicating better cost management[46]. - Total noninterest expense decreased by $408 thousand, or 3%, in 3Q2025 compared to 2Q2025, primarily due to reductions in salaries and employee benefits[18]. - Salaries and employee benefits increased by $861 thousand in 3Q2025 compared to 3Q2024, driven by staffing growth and annual merit-based salary adjustments[19]. Capital and Liquidity - Common equity tier 1 capital (CET1) ratio was strong at 10.92% in Q3 2025, slightly down from 11.01% in Q2 2025[1]. - The company's Tier 1 capital ratio was reported at 10.92% in 3Q2025, down from 11.01% in Q2 2025[40]. - The company maintained a strong liquidity position with liquid assets totaling $367,508 thousand in 3Q2025, representing 14% of total assets[36]. - The total available borrowings amounted to $741,471 thousand in 3Q2025, accounting for 28% of total assets[36]. Loan and Deposit Growth - Average loans increased by 2% to $2.132 billion in Q3 2025 from $2.095 billion in Q2 2025 and $1.906 billion in Q3 2024[1]. - Gross loans reached $2,151,217 thousand in 3Q2025, reflecting a 4% increase from 2Q2025 and an 11% increase from 3Q2024[23]. - Total deposits increased by $18.7 million or 1% from 2Q2025, driven by a $68.8 million increase in time deposits, despite decreases in money market and noninterest-bearing deposits[32]. - Total deposits grew by $208.8 million or 10% year-over-year, primarily due to a $166.9 million increase in time deposits and a $59.7 million increase in money market deposits[33].

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].

Financial Performance - Net income for Q2 2025 was $6.3 million, an increase of 14% from $5.6 million in Q1 2025 and 17% from $5.4 million in Q2 2024[3]. - Diluted earnings per share (EPS) rose to $0.42, up 14% from $0.37 in Q1 2025 and 17% from $0.36 in Q2 2024[4]. - Total interest income for Q2 2025 increased to $37,665,000, up 10% from Q2 2024[53]. - Net interest income after provision for credit losses rose to $18,515,000, reflecting an 11% increase compared to Q2 2024[53]. - Noninterest income decreased to $3,968,000, down 5% from Q2 2024[53]. - Return on Assets (ROA) improved to 1.00%, up 8 basis points from Q1 2025[54]. - Return on Equity (ROE) increased to 11.97%, a rise of 124 basis points from Q1 2025[54]. - Book value per share at period-end increased to $14.36, a 9% rise from Q2 2024[56]. Asset and Loan Growth - Total assets grew to $2.56 billion, a 2% increase from $2.51 billion in Q1 2025 and a 12% increase from $2.29 billion in Q2 2024[7]. - Gross loans reached $2.07 billion, a 1% increase from $2.04 billion in Q1 2025 and an 11% increase from $1.87 billion in Q2 2024[7]. - Total loans reached $2,050,354 thousand in Q2 2025, a 12.3% increase from $1,826,108 thousand in Q2 2024[67]. - The average balance of CRE loans rose to $1,014,772 thousand in Q2 2025, up from $906,290 thousand in Q2 2024, indicating a growth of 12.0%[67]. Deposit and Funding - Total deposits rose to $2.25 billion, up 3% from $2.19 billion in Q1 2025 and 16% from $1.94 billion in Q2 2024[7]. - Interest-bearing deposits increased to $1,619,249 thousand in Q2 2025, compared to $1,381,485 thousand in Q2 2024, marking a growth of 17.2%[67]. - Time deposits totaled $1.26 billion, with a weighted average rate of 4.34%[40]. - Total available borrowings increased to $766.6 million, representing 30% of total assets, up from 28% in the previous quarter[42]. Interest Income and Margin - Net interest income increased to $19.7 million, reflecting a 13% rise from $17.4 million in Q1 2025 and a 22% increase from $16.2 million in Q2 2024[7]. - The net interest margin improved to 3.23%, compared to 3.01% in Q1 2025 and 2.96% in Q2 2024[7]. - The net interest margin improved to 3.12% in Q2 2025, up from 3.01% in Q2 2024, indicating enhanced profitability on interest-earning assets[67]. Expenses and Credit Quality - Total noninterest expense increased by $1.8 million, or 15%, compared to Q2 2024, primarily due to higher salaries and employee benefits[25]. - Provision for credit losses on loans increased by $628 thousand in Q2 2025 compared to Q2 2024, mainly due to higher historical loss factors from risk rating downgrades[17]. - Nonperforming loans decreased to $8.9 million, representing 0.43% of gross loans, down from 0.51% in the previous quarter[33][35]. - The company reported a net charge-off rate of 0.06%, indicating strong credit quality[35]. Shareholder Returns - The company paid a quarterly cash dividend of $0.12 per share[4]. - The Company declared a quarterly cash dividend of $0.12 per share, payable on August 21, 2025, to shareholders of record as of August 7, 2025[43]. - During Q2 2025, the Company repurchased 65,387 shares at an average price of $10.77 per share[43]. Branch Expansion and Market Presence - A new full-service branch was opened in Garden Grove, California, expanding the company's market presence[6]. - The Company operates twelve full-service branch offices and five loan production offices across California, Texas, and Nevada[48]. - The Company emphasizes serving small- and medium-sized businesses, particularly within Korean and other ethnic minority communities[48].

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)