OP Bancorp(US:OPBK)2025-10-23 20:30Financial 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].