OP Bancorp(US:OPBK)2022-08-12 16:26Financial Performance - Net income for the three months ended June 30, 2022, was $8.5 million, a 32.9% increase from $6.4 million in the same period of 2021[104]. - Net income for the six months ended June 30, 2022, was $16,632,000, an increase of $5,176,000 or 45.3% from $11,456,000 in 2021[116]. - Noninterest income for the three months ended June 30, 2022, was $5.4 million, an increase of $3.1 million or 141.2% from $2.2 million[115]. - Noninterest income rose to $9,575,000 for the six months ended June 30, 2022, compared to $5,186,000 in 2021, marking an increase of $4,389,000 or 84.5%[116]. - The efficiency ratio improved to 47.07% for the three months ended June 30, 2022, compared to 52.30% for the same period in 2021[105]. Asset and Loan Growth - Total assets increased to $1.93 billion, up by $332.4 million or 20.7% from $1.60 billion[104]. - Gross loans rose to $1.48 billion, an increase of $238.9 million or 19.2% from $1.25 billion[104]. - Total deposits reached $1.74 billion, an increase of $307.5 million or 21.4% from $1.43 billion[104]. - The total gross loans amounted to $1,484.7 million, an increase from $1,314.0 million as of December 31, 2021, representing a growth of approximately 12.9%[164]. - The commercial real estate loan portfolio totaled $776.8 million as of June 30, 2022, up from $701.5 million at December 31, 2021, indicating a growth of about 10.7%[166]. Interest Income and Margin - Net interest income for the three months ended June 30, 2022, increased to $19.1 million, up by $4.5 million or 30.8% from $14.6 million[104]. - Net interest income for the six months ended June 30, 2022, was $36,369,000, an increase of $9,028,000 or 33.0% compared to $27,341,000 in 2021[116]. - The net interest margin improved to 4.21% for the three months ended June 30, 2022, compared to 3.98% in the same period in 2021[120]. - Total interest income increased to $38,092,000 for the six months ended June 30, 2022, up from $28,981,000 in 2021, reflecting a change of $9,111,000 or 31.4%[116]. Loan Losses and Asset Quality - The allowance for loan losses to gross loans receivable was 1.19% as of June 30, 2022[106]. - The net charge-offs to average gross loans receivable was (0.01)% as of June 30, 2022, indicating strong asset quality[106]. - Nonperforming loans decreased to $2.2 million at June 30, 2022, down from $3.2 million at December 31, 2021, indicating a reduction of 31.25%[183]. - The ratio of nonperforming loans to gross loans was 0.15% as of June 30, 2022, compared to 0.24% at December 31, 2021, showing an improvement in asset quality[186]. - The allowance for loan losses was $17.7 million at June 30, 2022, compared to $16.1 million at December 31, 2021, representing an increase of approximately 9.9%[177]. Deposits and Funding - Noninterest-bearing demand deposits increased to $820,311 thousand, accounting for 47.1% of total deposits as of June 30, 2022, compared to 50.5% at December 31, 2021[188]. - The total deposits reached $1,741,623 thousand as of June 30, 2022, up from $1,534,066 thousand at December 31, 2021, reflecting a growth of 13.5%[188]. - The maximum borrowing capacity from the Federal Home Loan Bank (FHLB) increased to $482.0 million as of June 30, 2022, from $417.6 million at December 31, 2021[189]. Noninterest Expenses - Total noninterest expense for the three months ended June 30, 2022, was $11.5 million, an increase of $2.7 million, or 30.9%, compared to $8.0 million for the same period in 2021[145]. - Noninterest expense for the six months ended June 30, 2022, was $21.2 million, an increase of $4.4 million, or 26.3%, compared to $16.8 million in the same period of 2021[149]. - Salaries and employee benefits expense increased by $2.8 million, or 28.1%, to $12.8 million for the six months ended June 30, 2022, primarily due to hiring additional employees[150]. Capital Ratios - The total capital ratio for the consolidated entity was 13.51% as of June 30, 2022, exceeding the minimum requirement to be considered "well-capitalized"[198]. - The Tier 1 capital ratio for the consolidated entity was 12.29% as of June 30, 2022, also above the regulatory minimum[198]. - The company maintained a CET1 capital ratio of 12.29% as of June 30, 2022, surpassing the required minimum of 4.5%[198]. Interest Rate Risk - Interest rate risk is identified as the primary source of market risk for the company, impacting earnings and asset values[199]. - The company utilizes a net interest income simulation model to evaluate potential changes in net interest income under various interest rate scenarios[205]. - The asset liability committee monitors interest rate risk sensitivity on a quarterly basis to ensure compliance with established risk limits[201].