OP Bancorp Reports Third Quarter Result of 2019

2019 Third Quarter Highlights:

  • Net income totaled $4.0 million or $0.24 per diluted common share, up 14.9%, compared to $3.5 million or $0.21 per diluted common share for the third quarter of 2018
  • Net interest margin was 4.13% compared to 4.44% for the third quarter of 2018
  • Return on average assets decreased to 1.41% and return on average equity improved to 11.74% compared to 1.42% and 11.28%, respectively, for the third quarter of 2018
  • Total assets increased 11.3% to $1.15 billion at September 30, 2019, compared to $1.04 billion at September 30, 2018
  • Net loans receivable increased 13.6% to $954.7 million at September 30, 2019, compared to $840.5 million at September 30, 2018
  • Total deposits increased 11.0% to $996.0 million at September 30, 2019, of which 3.7% were non-interest bearing, compared to $896.9 million at September 30, 2018
  • Nonperforming assets to total assets was 0.29% compared to 0.12% at September 30, 2018

 

LOS ANGELES--()--OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported unaudited financial results for the third quarter of 2019. Net income for the third quarter of 2019 was $4.0 million, or $0.24 per diluted common share, compared with net income of $3.8 million, or $0.23 per diluted common share, for the second quarter of 2019, and net income of $3.5 million, or $0.21 per diluted share, for the third quarter of 2018.

“We successfully completed our first stock repurchase program with total purchases of 395,000 shares and launched another stock repurchase program of up to 475,000 shares of common stock in August. We are also pleased to report another strong quarter, with net income of $4.0 million, or $0.24 per diluted common share for the three months ended September 30, 2019. We have continued to grow our loans and deposits by 14% and 11%, respectively, compared to the third quarter of 2018, while maintaining strong asset quality. Our noninterest bearing deposits increased 7.9% during the quarter to reach 29.8% of total deposits as of September 30, 2019, in this challenging and competitive interest-rate environment,” commented Min Kim, President and Chief Executive Officer of OP Bancorp and Open Bank.

Financial Highlights (unaudited)

(Dollars in thousands, except per share data)

 

As of or for the Three Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

2019

 

2019

 

2018

Income Statement Data:

 

 

 

 

 

 

Interest income

 

$

15,112

 

 

$

14,878

 

 

$

13,006

 

Interest expense

 

 

3,893

 

 

 

3,701

 

 

 

2,521

 

Net interest income

 

 

11,219

 

 

 

11,177

 

 

 

10,485

 

Provision for loan losses

 

 

290

 

 

 

401

 

 

 

439

 

Noninterest income

 

 

2,732

 

 

 

2,647

 

 

 

2,284

 

Noninterest expense

 

 

8,424

 

 

 

8,358

 

 

 

7,705

 

Income before taxes

 

 

5,237

 

 

 

5,065

 

 

 

4,625

 

Provision for income taxes

 

 

1,237

 

 

 

1,229

 

 

 

1,144

 

Net Income

 

$

4,000

 

 

$

3,836

 

 

$

3,481

 

Diluted earnings per share

 

$

0.24

 

 

$

0.23

 

 

$

0.21

 

Balance Sheet Data:

 

 

 

 

 

 

Loans held for sale

 

$

368

 

 

$

1,245

 

 

$

3,254

 

Gross loans, net of unearned income

 

 

964,370

 

 

 

947,006

 

 

 

850,018

 

Allowance for loan losses

 

 

9,640

 

 

 

9,525

 

 

 

9,551

 

Total assets

 

 

1,151,934

 

 

 

1,127,556

 

 

 

1,035,028

 

Deposits

 

 

995,993

 

 

 

974,672

 

 

 

896,891

 

Shareholders’ equity

 

 

137,593

 

 

 

135,482

 

 

 

124,975

 

Performance Ratios:

 

 

 

 

 

 

Return on average assets (annualized)

 

 

1.41

%

 

 

1.39

%

 

 

1.42

%

Return on average equity (annualized)

 

 

11.74

%

 

 

11.50

%

 

 

11.28

%

Net interest margin (annualized)

 

 

4.13

%

 

 

4.26

%

 

 

4.44

%

Efficiency ratio (1)

 

 

60.39

%

 

 

60.45

%

 

 

60.34

%

Credit Quality:

 

 

 

 

 

 

Nonperforming loans

 

$

1,570

 

 

$

1,556

 

 

$

1,233

 

Nonperforming assets

 

 

3,387

 

 

 

1,556

 

 

 

1,233

 

Net charge-offs to average gross loans (annualized)

 

 

0.08

%

 

 

0.21

%

 

 

0.29

%

Nonperforming assets to gross loans plus OREO

 

 

0.35

%

 

 

0.16

%

 

 

0.15

%

ALL to nonperforming loans

 

 

614

%

 

 

612

%

 

 

775

%

ALL to gross loans, net of unearned income

 

 

1.00

%

 

 

1.01

%

 

 

1.12

%

Capital Ratios:

 

 

 

 

 

 

Total risk-based capital ratio

 

 

15.36

%

 

 

15.45

%

 

 

16.16

%

Tier 1 risk-based capital ratio

 

 

14.35

%

 

 

14.42

%

 

 

15.01

%

Common equity tier 1 ratio

 

 

14.35

%

 

 

14.42

%

 

 

15.01

%

Leverage ratio

 

 

12.11

%

 

 

12.24

%

 

 

12.77

%

 

 

 

 

 

 

 

(1) Represents noninterest expense divided by the sum of net interest income and noninterest income.

Financial Highlights (unaudited)

(Dollars in thousands, except per share data)

 

For the Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

Income Statement Data:

 

 

 

 

Interest income

 

$

44,077

 

 

$

36,248

 

Interest expense

 

 

10,883

 

 

 

6,217

 

Net interest income

 

 

33,194

 

 

 

30,031

 

Provision for loan losses

 

 

691

 

 

 

1,047

 

Noninterest income

 

 

8,912

 

 

 

7,279

 

Noninterest expense

 

 

24,855

 

 

 

21,993

 

Income before taxes

 

 

16,560

 

 

 

14,270

 

Provision for income taxes

 

 

3,984

 

 

 

3,781

 

Net Income

 

$

12,576

 

 

$

10,489

 

Diluted earnings per share

 

$

0.77

 

 

$

0.66

 

Performance Ratios:

 

 

 

 

Return on average assets

 

 

1.54

%

 

 

1.48

%

Return on average equity

 

 

12.55

%

 

 

12.43

%

Net interest margin

 

 

4.25

%

 

 

4.49

%

Efficiency ratio (1)

 

 

59.03

%

 

 

58.95

%

 

 

 

 

 

(1) Represents noninterest expense divided by the sum of net interest income and noninterest income.

Financial Highlights, excluding Gain on COLI

(Dollars in thousands, except per share data)

 

For the Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

Income before taxes, as reported

 

$

16,560

 

 

$

14,270

 

Gain on COLI

1,228

 

Provision for income taxes

 

 

3,887

 

 

 

3,781

 

Net Income

 

$

11,445

 

 

$

10,489

 

Diluted earnings per share

 

$

0.70

 

 

$

0.66

 

Return on average assets

 

 

1.40

%

 

 

1.48

%

Return on average equity

 

 

11.42

%

 

 

12.43

%

Results of Operations

The reported interest income and yield on our loan portfolio are impacted by a number of components, including changes in the average contractual interest rate earned on loans and the amount of discount accretion on SBA loans. The following table reconciles the contractual interest income and yield on our loan portfolio to the reported interest income and yield for the periods indicated.

 

 

Three Months Ended

 

 

September 30, 2019

 

June 30, 2019

 

September 30, 2018

(Dollars in thousands)

 

Interest & Fees

 

Yield

 

Interest & Fees

 

Yield

 

Interest & Fees

 

Yield

Contractual interest rate

 

$

13,492

 

 

 

5.66

%

 

$

13,298

 

 

 

5.72

%

 

$

11,820

 

 

 

5.46

%

SBA discount accretion

 

 

717

 

 

 

0.30

%

 

 

703

 

 

 

0.30

%

 

 

611

 

 

 

0.28

%

Amortization of net deferred fees/(costs)

 

 

37

 

 

 

0.02

%

 

 

38

 

 

 

0.02

%

 

 

65

 

 

 

0.03

%

Interest recognized on nonaccrual loans

 

 

(12

)

 

 

-0.01

%

 

 

-

 

 

 

0.00

%

 

 

(8

)

 

 

0.00

%

Prepayment penalties and other fees

 

 

44

 

 

 

0.02

%

 

 

54

 

 

 

0.02

%

 

 

36

 

 

 

0.02

%

Yield on loans (as reported)

 

$

14,278

 

 

 

5.99

%

 

$

14,093

 

 

 

6.06

%

 

$

12,524

 

 

 

5.79

%

 

 

Nine Months Ended

 

 

September 30, 2019

 

September 30, 2018

(Dollars in thousands)

 

Interest & Fees

 

Yield

 

Interest & Fees

 

Yield

Contractual interest rate

 

$

39,285

 

 

 

5.69

%

 

$

33,016

 

 

 

5.35

%

SBA discount accretion

 

 

1,928

 

 

 

0.28

%

 

 

1,660

 

 

 

0.27

%

Amortization of net deferred fees/(costs)

 

 

192

 

 

 

0.03

%

 

 

215

 

 

 

0.03

%

Interest recognized on nonaccrual loans

 

 

(12

)

 

 

0.00

%

 

 

21

 

 

 

0.00

%

Prepayment penalties and other fees

 

 

332

 

 

 

0.05

%

 

 

130

 

 

 

0.02

%

Yield on loans (as reported)

 

$

41,725

 

 

 

6.05

%

 

$

35,042

 

 

 

5.67

%

Net interest margin for the third quarter of 2019 decreased 13 basis points to 4.13% from 4.26% for the second quarter of 2019 due to the decrease in the reported yield on interest-earning assets and the increase in cost of deposits.

Net interest income before the provision for loan losses for the third quarter of 2019 was $11.2 million, an increase of $42,000, or 0.4%, compared to the second quarter of 2019, primarily due to a $234,000 increase in interest income, partially offset by a $192,000 increase in interest expense.

Interest income on securities available for sale and other interest income increased $49,000, or 6.2%, during the third quarter of 2019 compared to the second quarter of 2019. The increase was primarily due to a $44,000 increase in other interest income as a result of a $12.0 million, or 18.0%, increase in the average balance of Fed funds sold and other investments, compared to the second quarter of 2019.

Interest income from the contractual interest rates on loans increased $194,000, or 1.5%, during the third quarter of 2019 compared to the second quarter of 2019, reflecting a $14.4 million, or 1.5%, increase in average balance of loans, including loans held for sale. The amount of discount accretion on SBA loans increased $14,000 during the third quarter of 2019 due to an increase in SBA loan payoffs. The reported interest income on loans, net of SBA discount accretions and other components, increased $185,000 during the third quarter of 2019.

Interest expense for the third quarter of 2019 increased $192,000, or 5.2%, compared to the second quarter of 2019, due to an increase of $26.4 million, or 3.9%, in the average balance of interest-bearing liabilities.

Net interest margin for the third quarter of 2019 decreased 31 basis points to 4.13% from 4.44% for the third quarter of 2018, primarily due to a greater increase in the cost of interest-bearing liabilities compared to the increase in the reported yield on interest-earning assets.

Net interest income before provision for loan losses for the third quarter of 2019 increased $734,000, or 7.0%, to $11.2 million, compared to $10.5 million for the third quarter of 2018, primarily due to a $2.1 million increase in interest income, partially offset by a $1.4 million increase in interest expense.

Interest income on securities available for sale and other interest income increased $352,000, or 73.1%, for the third quarter of 2019 compared to the third quarter of 2018. The increase was primarily due to a $269,000 increase in other interest income as a result of a $44.0 million increase in the average balance of Fed funds sold and other investments and a $83,000 increase in interest income on securities available for sale from purchases of higher yielding securities during the fourth quarter of 2018.

The increase of $1.8 million in contractual interest income on loans in the third quarter of 2019 was primarily due to a $87.2 million, or 10.1%, increase in the balance of average loans, including loans held for sale, compared to the third quarter of 2018, and a 20 basis point increase in the yield on average loans to 5.99% for the third quarter of 2019 from 5.79% for the same period of 2018.

The increase in interest expense in the third quarter of 2019, compared to the third quarter of 2018 was due to a $109.4 million, or 18.5%, increase in the average balance of the total interest-bearing liabilities and a 51 basis point increase in the cost of interest-bearing liabilities.

The increases in the average yield on loans and average cost of deposits in the third quarter of 2019, as compared to the third quarter of 2018, were primarily due to market interest rate increases by the Federal Reserve in September and December of 2018. The rate cuts by the Federal Reserve of 25 basis points each in August and September of 2019 did not have a full impact on loan yields or deposit costs in the third quarter of 2019.

The following tables show the asset yields, liability costs, spreads and margins for the periods indicated.

 

 

Three Months Ended

 

Percentage Change

 

 

September 30,

 

June 30,

 

September 30,

 

Q3-19

 

Q3-19

 

 

2019

 

2019

 

2018

 

vs. Q2-19

 

vs. Q3-18

Yield on loans

 

5.99

%

 

6.06

%

 

5.79

%

 

-0.07

%

 

0.20

%

Yield on interest-earning assets

 

5.56

%

 

5.67

%

 

5.51

%

 

-0.11

%

 

0.05

%

Cost of interest-bearing liabilities

 

2.20

%

 

2.20

%

 

1.69

%

 

0.00

%

 

0.51

%

Cost of deposits

 

1.58

%

 

1.56

%

 

1.17

%

 

0.02

%

 

0.41

%

Cost of funds

 

1.58

%

 

1.56

%

 

1.18

%

 

0.02

%

 

0.40

%

Net interest spread

 

3.36

%

 

3.47

%

 

3.82

%

 

-0.11

%

 

-0.46

%

Net interest margin

 

4.13

%

 

4.26

%

 

4.44

%

 

-0.13

%

 

-0.31

%

 

 

Nine Months Ended

 

Percentage Change

 

 

September 30,

 

September 30,

 

2019 YTD

 

 

2019

 

2018

 

vs. 2018 YTD

Yield on loans

 

6.05

%

 

5.67

%

 

0.38

%

Yield on interest-earning assets

 

5.65

%

 

5.41

%

 

0.24

%

Cost of interest-bearing liabilities

 

2.17

%

 

1.48

%

 

0.69

%

Cost of deposits

 

1.54

%

 

1.00

%

 

0.54

%

Cost of funds

 

1.54

%

 

1.01

%

 

0.53

%

Net interest spread

 

3.48

%

 

3.93

%

 

-0.45

%

Net interest margin

 

4.25

%

 

4.49

%

 

-0.24

%

The Company recorded the provision for loan losses of $290,000 for the third quarter of 2019 compared to $401,000 for the second quarter of 2019. The provision for loan losses in the second and third quarter of 2019 were primarily due to loan growth during the quarters. The provision for loan losses of $439,000 for the third quarter of 2018 was due to the loan growth as well as net charge-offs of $611,000.

Noninterest income for the third quarter of 2019 was $2.7 million, an increase of $85,000, or 3.2%, from $2.6 million for the second quarter of 2019, primarily due to an increase of $113,000 in gain on sale of SBA loans, partially offset by a decrease of $30,000 in service charges on deposits and a decrease of $27,000 in other income.

Gain on sale of loans increased $126,000 to $1.7 million for the third quarter of 2019 from $1.6 million for the second quarter of 2019. The Company sold $22.2 million in SBA loans with an average premium of 8.85% in the third quarter of 2019, compared to the sale of $21.2 million in SBA loans with an average premium of 8.99% in the second quarter of 2019.

Noninterest income for the third quarter of 2019 increased $448,000 to $2.7 million compared to $2.3 million for the third quarter of 2018, primarily due to an increase of $451,000 in gain on sale of SBA loans, partially offset by a decrease of $67,000 in loan servicing fees, and a decrease of $49,000 in other income.

Gain on sale of loans for the third quarter of 2018 was $1.1 million from the sale of $22.8 million in SBA loans with an average premium of 6.47%. Loan servicing fees, net of amortization, decreased $67,000 to $243,000 for the third quarter of 2019 from $310,000 for the third quarter of 2018, primarily due to an increase in the amortization of SBA servicing assets from the increase in SBA loan payoffs.

Noninterest expense for the third quarter of 2019 was $8.4 million, an increase of $66,000, or 0.8%, compared to the second quarter of 2019. The increase in noninterest expense from the second quarter of 2019 to the third quarter of 2019 was primarily due to an increase of $100,000 in occupancy and equipment expense, an increase of $23,000 in our donation to our foundation and other contributions, and an increase of $28,000 in other expenses, partially offset by a decrease of $126,000 in FDIC insurance and regulatory assessments.

The increase in occupancy and equipment expense was primarily attributable to a branch opening in Carrollton, Texas in the second quarter of 2019. The decrease in FDIC insurance and regulatory assessments was due to the small bank assessment credits that was applied to offset the FDIC assessments starting from June 30, 2019.

Noninterest expense for the third quarter of 2019 increased $719,000, or 9.3%, to $8.4 million, compared to $7.7 million for the third quarter of 2018. The increase was primarily due to an increase of $546,000 in salary and employee benefits from an increase in employee headcount to 171 at September 30, 2019, from 157 at September 30, 2018. Occupancy and equipment expense increased $256,000 primarily attributable to new loan production offices and a new branch opening in 2019. FDIC insurance and regulatory assessments decreased $127,000, primarily due to the aforementioned credits.

Income tax provision was $1.2 million for the third quarter and second quarter of 2019 and $1.1 million for the third quarter of 2018. The effective tax rate for the third quarter of 2019 was 23.6%, compared to 24.3% for the second quarter of 2019 and 24.7% for the third quarter of 2018.

Balance Sheet

Total assets at September 30, 2019, were $1.15 billion, an increase of $24.4 million, or 2.2%, compared to $1.13 billion at June 30, 2019, and an increase of $116.9 million, or 11.3%, compared to $1.04 billion at September 30, 2018. Gross loans, net of unearned income, were $964.4 million at September 30, 2019, an increase of $17.4 million, or 1.8%, from $947.0 million at June 30, 2019, and an increase of $114.4 million, or 13.5%, from $850.0 million at September 30, 2018.

New loan originations for the third quarter of 2019 totaled $100.9 million, including SBA loan originations of $30.9 million, compared to $96.2 million, including SBA loan originations of $27.9 million, for the second quarter of 2019, and $91.7 million, including SBA loan originations of $30.3 million, for the third quarter of 2018. Loan payoffs for the third quarter of 2019 were $38.7 million, compared to $38.6 million for the second quarter of 2019, and $29.3 million for the third quarter of 2018.

Total deposits were $996.0 million at September 30, 2019, an increase of $21.3 million, or 2.2%, from $974.7 million at June 30, 2019, and an increase of $99.1 million, or 11.0%, from $896.9 million at September 30, 2018. Noninterest bearing deposits were $296.8 million at September 30, 2019, compared to $275.0 million at June 30, 2019, and $286.3 million at September 30, 2018.

Noninterest bearing deposits accounted for 29.8% of total deposits at September 30, 2019, compared to 28.2% at June 30, 2019, and 31.9% at September 30, 2018.

 

 

As of

 

 

September 30,

 

June 30,

 

September 30,

 

 

2019

 

2019

 

2018

Noninterest bearing deposits

 

29.8

%

 

28.2

%

 

31.9

%

Interest bearing demand deposits

 

27.6

%

 

28.7

%

 

28.3

%

Savings

 

0.3

%

 

0.4

%

 

0.4

%

Time deposits over $250,000

 

22.1

%

 

21.7

%

 

17.6

%

Other time deposits

 

20.2

%

 

21.0

%

 

21.8

%

Total deposits

 

100.0

%

 

100.0

%

 

100.0

%

The Company had no borrowings from the Federal Home Loan Bank (“FHLB”) at September 30, 2019, June 30, 2019, and September 30, 2018.

The adoption of the new lease accounting standard ASU 2016-02, Leases (Topic 842) effective January 1, 2019, resulted in the recognition of $7.7 million and $9.6 million in right-of-use assets and lease liabilities, respectively, on the balance sheet. With the new branch opening, the Company had right-of-use assets and lease liabilities of $8.6 million and $10.3 million, respectively, at September 30, 2019. The Company’s lease agreements include options to renew at the Company’s discretion. The extensions are not reasonably certain to be exercised, therefore it is not considered in the calculation of the right-of-use assets and liabilities.

The Company’s consolidated regulatory capital ratios exceeded regulatory guidelines and the Bank’s capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at September 30, 2019, as summarized in the following table.

 

 

 

 

 

 

 

 

Regulatory

 

 

 

 

 

 

Well-capitalized

 

Capital Ratio

 

 

 

 

 

 

Financial

 

Requirements (1),

 

 

 

 

 

 

Institution

 

Including

 

 

 

 

 

 

Basel III

 

Fully Phased-in

 

 

 

 

 

 

Regulatory

 

Capital Conservation

Capital Ratios

 

OP Bancorp

 

Open Bank

 

Guidelines

 

Buffer

Total risk-based

 

15.36

%

 

15.03

%

 

10.00

%

 

10.50

%

Tier 1 risk-based

 

14.35

%

 

14.01

%

 

8.00

%

 

8.50

%

Common equity tier 1 Risk-Based

 

14.35

%

 

14.01

%

 

6.50

%

 

7.00

%

Leverage

 

12.11

%

 

11.83

%

 

5.00

%

 

4.00

%

 

 

 

 

 

 

 

 

 

(1) Fully phased in Basel III requirement for both OP Bancorp and Open Bank. Includes a 2.5% capital conservation buffer, except the leverage ratio.

The Company announced a second stock repurchase program on August 28, 2019, which authorizes the Company to repurchase up to 475,000 shares of its common stock following the completion of the Company’s first stock repurchase program in August 2019. The Company completed its first stock repurchase of 395,000 shares at an average price of $9.10 per share. Since the announcement of the second stock repurchase program, the Company has repurchased 103,724 shares of its common stock at an average repurchase price of $9.28 through October 24, 2019.

Asset Quality

Nonperforming loans were $1.57 million at September 30, 2019, an increase of $14,000 from $1.56 million at June 30, 2019, and an increase of $337,000 from $1.2 million at September 30, 2018.

The Company had other real estate owned (“OREO”) of $1.8 million at September 30, 2019. The Company had no OREO at June 30, 2019 and September 30, 2018.

Nonperforming assets were $3.4 million, or 0.29% of total assets, at September 30, 2019, $1.6 million, or 0.14% of total assets, at June 30, 2019 and $1.2 million, or 0.12% of total assets, at September 30, 2018.

Nonperforming loans to gross loans were 0.16% at September 30, 2019, compared to 0.16% at June 30, 2019 and 0.15% at September 30, 2018. Total classified loans were $3.2 million, or 0.34% of gross loans, at September 30, 2019, compared to $4.2 million, or 0.44% of gross loans, at June 30, 2019, and $3.8 million, or 0.45% of gross loans, at September 30, 2018.

The following tables shows the trend of classified loans by loan type as of the date stated.

 

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

Classified loans by loan type

 

(Dollars in thousands)

Commercial real estate

 

$

 

$

 

$

 

$

 

$

SBA loans—real estate

 

 

2,247

 

 

2,264

 

 

2,281

 

 

2,000

 

 

1,859

SBA loans—non-real estate

 

 

36

 

 

41

 

 

49

 

 

57

 

 

354

Commercial and industrial

 

 

710

 

 

1,892

 

 

1,906

 

 

1,516

 

 

1,587

Home mortgage

 

 

256

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

Total classified loans

 

$

3,249

 

$

4,197

 

$

4,236

 

$

3,573

 

$

3,800

SBA guarantee balance retained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA loans—real estate

 

 

516

 

 

524

 

 

534

 

 

544

 

 

553

SBA loans—non-real estate

 

 

36

 

 

41

 

 

49

 

 

57

 

 

282

Total SBA unsold guarantee portion

 

$

552

 

$

565

 

$

583

 

$

601

 

$

835

Total classified loans, net of SBA guarantee balance retained

 

$

2,697

 

$

3,632

 

$

3,653

 

$

2,972

 

$

2,965

The allowance for loan losses was $9.6 million at September 30, 2019, compared to $9.5 at June 30, 2019, and $9.6 million at September 30, 2018. The allowance for loan losses was 1.00% of gross loans at September 30, 2019, 1.01% at June 30, 2019 and 1.12% at September 30, 2018. The allowance for loan losses was 614% of nonperforming assets at September 30, 2019, 612% at June 30, 2019, and 775% at September 30, 2018.

About OP Bancorp

OP Bancorp, the holding company for Open Bank (the “Bank”), is a California corporation whose common stock is quoted on the Nasdaq Global Market under the ticker symbol, “OPBK.” The Bank is engaged in the general commercial banking business in Los Angeles, Orange, and Santa Clara Counties, California, and Carrollton, Texas and is focused on serving the banking needs of small- and medium-sized businesses, professionals, and residents with a particular emphasis on Korean and other ethnic minority communities. The Bank currently operates with nine full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara, California and Carrollton, Texas. The Bank also has four loan production offices in Atlanta, Georgia, Aurora, Colorado, and Lynnwood and Seattle, Washington. The Bank commenced its operations on June 10, 2005 as First Standard Bank and changed its name to Open Bank in October 2010. Its headquarters is located at 1000 Wilshire Blvd., Suite 500, Los Angeles, California 90017. Phone 213.892.9999; www.myopenbank.com Member FDIC, Equal Housing Lender.

Cautionary Note Regarding Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to: business and economic conditions, particularly those affecting the financial services industry and our primary market areas; our ability to successfully manage our credit risk and the sufficiency of our allowance for loan loss; factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance; our ability to effectively execute our strategic plan and manage our growth; interest rate fluctuations, which could have an adverse effect on our profitability; liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold for sale; external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve, inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition; continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; restraints on the ability of the Bank to pay dividends to the holding company; increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; a failure in the internal controls we have implemented to address the risks inherent to the business of banking; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance; changes in our management personnel or our inability to retain motivate and hire qualified management personnel; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; risks related to potential acquisitions; incremental costs and obligations associated with operating as a public company; the impact of any claims or legal actions to which we may be subject, including any effect on our reputation; compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with commercial mortgage origination, sale and servicing operations; changes in federal tax law or policy; the affect if any of the recent federal government shutdown on our SBA loan program; and our ability the manage the foregoing and other factors set forth in the Company’s public reports. We describe these and other risks that could affect our results in Item 1A. “Risk Factors,” of our latest Annual Report on Form 10-K for the year ended December 31, 2018 and in our other subsequent filings with the Securities and Exchange Commission. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, our results could differ materially from those expressed in, implied or projected by such forward-looking statements. We assume no obligation to update such forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law. 

Consolidated Balance Sheet (unaudited)

(Dollars in thousands)

 

 

9/30/2019

 

6/30/2019

 

% change

 

9/30/2018

 

% change

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

89,107

 

 

$

83,111

 

 

 

7.2

%

 

$

95,787

 

 

 

-7.0

%

Securities available for sale, at fair value

 

 

52,295

 

 

 

51,829

 

 

 

0.9

%

 

 

46,324

 

 

 

12.9

%

Other investments

 

 

9,173

 

 

 

8,134

 

 

 

12.8

%

 

 

7,221

 

 

 

27.0

%

Loans held for sale

 

 

368

 

 

 

1,245

 

 

 

-70.4

%

 

 

3,254

 

 

 

-88.7

%

Real Estate Loans

 

 

594,447

 

 

 

583,634

 

 

 

1.9

%

 

 

489,828

 

 

 

21.4

%

SBA Loans

 

 

136,232

 

 

 

130,957

 

 

 

4.0

%

 

 

132,505

 

 

 

2.8

%

C & I Loans

 

 

107,730

 

 

 

105,133

 

 

 

2.5

%

 

 

104,301

 

 

 

3.3

%

Home Mortgage Loans

 

 

123,092

 

 

 

123,951

 

 

 

-0.7

%

 

 

120,262

 

 

 

2.4

%

Consumer & Other Loans

 

 

2,869

 

 

 

3,331

 

 

 

-13.9

%

 

 

3,122

 

 

 

-8.1

%

Gross loans, net of unearned income

 

 

964,370

 

 

 

947,006

 

 

 

1.8

%

 

 

850,018

 

 

 

13.5

%

Allowance for loan losses

 

 

(9,640

)

 

 

(9,525

)

 

 

1.2

%

 

 

(9,551

)

 

 

0.9

%

Net loans receivable

 

 

954,730

 

 

 

937,481

 

 

 

1.8

%

 

 

840,467

 

 

 

13.6

%

Premises and equipment, net

 

 

5,367

 

 

 

5,341

 

 

 

0.5

%

 

 

4,757

 

 

 

12.8

%

Accrued interest receivable

 

 

3,140

 

 

 

3,301

 

 

 

-4.9

%

 

 

2,783

 

 

 

12.8

%

Servicing assets

 

 

6,959

 

 

 

6,996

 

 

 

-0.5

%

 

 

7,097

 

 

 

-1.9

%

Company owned life insurance

 

 

10,551

 

 

 

10,482

 

 

 

0.7

%

 

 

11,321

 

 

 

-6.8

%

Deferred tax assets

 

 

2,358

 

 

 

2,858

 

 

 

-17.5

%

 

 

4,257

 

 

 

-44.6

%

Other real estate owned (OREO)

 

 

1,817

 

 

 

-

 

 

 

100.0

%

 

 

-

 

 

 

0.0

%

Operating right-of-use assets (1)

 

 

8,606

 

 

 

8,959

 

 

 

-3.9

%

 

 

-

 

 

 

100.0

%

Other assets

 

 

7,463

 

 

 

7,819

 

 

 

-4.6

%

 

 

11,760

 

 

 

-36.5

%

Total assets

 

$

1,151,934

 

 

$

1,127,556

 

 

 

2.2

%

 

$

1,035,028

 

 

 

11.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing deposits

 

$

296,831

 

 

$

274,976

 

 

 

7.9

%

 

$

286,347

 

 

 

3.7

%

Savings

 

 

3,316

 

 

 

3,527

 

 

 

-6.0

%

 

 

3,240

 

 

 

2.3

%

Money market and others

 

 

274,698

 

 

 

279,748

 

 

 

-1.8

%

 

 

253,807

 

 

 

8.2

%

Time deposits over $250,000

 

 

219,547

 

 

 

211,305

 

 

 

3.9

%

 

 

157,687

 

 

 

39.2

%

Other time deposits

 

 

201,601

 

 

 

205,116

 

 

 

-1.7

%

 

 

195,810

 

 

 

3.0

%

Total deposits

 

 

995,993

 

 

 

974,672

 

 

 

2.2

%

 

 

896,891

 

 

 

11.0

%

Other borrowings

 

 

-

 

 

 

-

 

 

 

0.0

%

 

 

-

 

 

 

0.0

%

Accrued interest payable

 

 

2,541

 

 

 

2,287

 

 

 

11.1

%

 

 

1,196

 

 

 

112.5

%

Operating lease liabilities (1)

 

 

10,335

 

 

 

10,737

 

 

 

-3.7

%

 

 

-

 

 

 

100.0

%

Other liabilities

 

 

5,472

 

 

 

4,378

 

 

 

25.0

%

 

 

11,966

 

 

 

-54.3

%

Total liabilities

 

 

1,014,341

 

 

 

992,074

 

 

 

2.2

%

 

 

910,053

 

 

 

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

87,085

 

 

 

88,455

 

 

 

-1.5

%

 

 

91,009

 

 

 

-4.3

%

Additional paid-in capital

 

 

7,154

 

 

 

6,965

 

 

 

2.7

%

 

 

5,886

 

 

 

21.5

%

Retained earnings

 

 

43,086

 

 

 

39,878

 

 

 

8.0

%

 

 

29,113

 

 

 

48.0

%

Accumulated other comprehensive income(loss)

 

 

268

 

 

 

184

 

 

 

45.7

%

 

 

(1,033

)

 

 

-125.9

%

Total shareholders' equity

 

 

137,593

 

 

 

135,482

 

 

 

1.6

%

 

 

124,975

 

 

 

10.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

1,151,934

 

 

$

1,127,556

 

 

 

2.2

%

 

$

1,035,028

 

 

 

11.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The adoption of ASU 2016-02, Leases (Topic 842) in the first quarter of 2019 resulted in the recognition of right-of-use assets and lease liabilities on balance sheet.

Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 

Three Months Ended

 

 

9/30/2019

 

6/30/2019

 

% change

 

9/30/2018

 

% change

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

14,278

 

 

$

14,093

 

 

 

1.3

%

 

$

12,524

 

 

 

14.0

%

Interest on securities available for sale

 

 

332

 

 

 

327

 

 

 

1.5

%

 

 

249

 

 

 

33.3

%

Other interest income

 

 

502

 

 

 

458

 

 

 

9.6

%

 

 

233

 

 

 

115.5

%

Total interest income

 

 

15,112

 

 

 

14,878

 

 

 

1.6

%

 

 

13,006

 

 

 

16.2

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

3,893

 

 

 

3,701

 

 

 

5.2

%

 

 

2,477

 

 

 

57.2

%

Interest on borrowed funds

 

 

-

 

 

 

-

 

 

 

0.0

%

 

 

44

 

 

 

-100.0

%

Total interest expense

 

 

3,893

 

 

 

3,701

 

 

 

5.2

%

 

 

2,521

 

 

 

54.4

%

Net interest income

 

 

11,219

 

 

 

11,177

 

 

 

0.4

%

 

 

10,485

 

 

 

7.0

%

Provision for loan losses

 

 

290

 

 

 

401

 

 

 

-27.7

%

 

 

439

 

 

 

-33.9

%

Net interest income after provision for loan losses

 

 

10,929

 

 

 

10,776

 

 

 

1.4

%

 

 

10,046

 

 

 

8.8

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

469

 

 

 

499

 

 

 

-6.0

%

 

 

484

 

 

 

-3.1

%

Loan servicing fees, net of amortization

 

 

243

 

 

 

227

 

 

 

7.0

%

 

 

310

 

 

 

-21.6

%

Gain on sale of loans

 

 

1,714

 

 

 

1,588

 

 

 

7.9

%

 

 

1,135

 

 

 

51.0

%

Other income

 

 

306

 

 

 

333

 

 

 

-8.1

%

 

 

355

 

 

 

-13.8

%

Total noninterest income

 

 

2,732

 

 

 

2,647

 

 

 

3.2

%

 

 

2,284

 

 

 

19.6

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

5,349

 

 

 

5,344

 

 

 

0.1

%

 

 

4,803

 

 

 

11.4

%

Occupancy and equipment

 

 

1,232

 

 

 

1,132

 

 

 

8.8

%

 

 

976

 

 

 

26.2

%

Data processing and communication

 

 

385

 

 

 

367

 

 

 

4.9

%

 

 

320

 

 

 

20.3

%

Professional fees

 

 

261

 

 

 

247

 

 

 

5.7

%

 

 

294

 

 

 

-11.2

%

FDIC insurance and regulatory assessments

 

 

(21

)

 

 

105

 

 

 

-120.0

%

 

 

106

 

 

 

-119.8

%

Promotion and advertising

 

 

182

 

 

 

183

 

 

 

-0.5

%

 

 

222

 

 

 

-18.0

%

Directors’ fees

 

 

228

 

 

 

223

 

 

 

2.2

%

 

 

216

 

 

 

5.6

%

Foundation donation and other contributions

 

 

402

 

 

 

379

 

 

 

6.1

%

 

 

369

 

 

 

8.9

%

Other expenses

 

 

406

 

 

 

378

 

 

 

7.4

%

 

 

399

 

 

 

1.8

%

Total noninterest expense

 

 

8,424

 

 

 

8,358

 

 

 

0.8

%

 

 

7,705

 

 

 

9.3

%

Income before income taxes

 

 

5,237

 

 

 

5,065

 

 

 

3.4

%

 

 

4,625

 

 

 

13.2

%

Provision for income taxes

 

 

1,237

 

 

 

1,229

 

 

 

0.7

%

 

 

1,144

 

 

 

8.1

%

Net income

 

$

4,000

 

 

$

3,836

 

 

 

4.3

%

 

$

3,481

 

 

 

14.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

8.76

 

 

$

8.62

 

 

 

1.6

%

 

$

7.92

 

 

 

10.6

%

Basic EPS

 

$

0.25

 

 

$

0.24

 

 

 

4.2

%

 

$

0.21

 

 

 

19.0

%

Diluted EPS

 

$

0.24

 

 

$

0.23

 

 

 

4.3

%

 

$

0.21

 

 

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding

 

 

15,711,580

 

 

 

15,723,007

 

 

 

-0.1

%

 

 

15,770,576

 

 

 

-0.4

%

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

15,768,654

 

 

 

15,685,478

 

 

 

0.5

%

 

 

15,714,226

 

 

 

0.3

%

- Diluted

 

 

16,007,486

 

 

 

15,951,598

 

 

 

0.4

%

 

 

16,234,926

 

 

 

-1.4

%

Key Ratios

(Dollars in thousands, except ratios)

 

Three Months Ended

 

 

9/30/2019

 

6/30/2019

 

% change

 

9/30/2018

 

% change

Return on average assets (ROA)*

 

1.41

%

 

1.39

%

 

0.02

%

 

1.42

%

 

-0.01

%

Return on average equity (ROE) *

 

11.74

%

 

11.50

%

 

0.24

%

 

11.28

%

 

0.46

%

Net interest margin *

 

4.13

%

 

4.26

%

 

-0.13

%

 

4.44

%

 

-0.31

%

Efficiency ratio

 

60.39

%

 

60.45

%

 

-0.06

%

 

60.34

%

 

0.05

%

 

 

 

 

 

 

 

 

 

 

 

Total Risk Based Capital Ratio

 

15.36

%

 

15.45

%

 

-0.09

%

 

16.16

%

 

-0.80

%

Tier 1 Capital Ratio

 

14.35

%

 

14.42

%

 

-0.07

%

 

15.01

%

 

-0.66

%

Common Equity Tier 1 Ratio

 

14.35

%

 

14.42

%

 

-0.07

%

 

15.01

%

 

-0.66

%

Tier 1 Leverage Ratio

 

12.11

%

 

12.24

%

 

-0.13

%

 

12.77

%

 

-0.66

%

 

 

 

 

 

 

 

 

 

 

 

* Annualized

Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 

Nine Months Ended

 

 

9/30/2019

 

9/30/2018

 

% change

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

41,725

 

 

$

35,042

 

 

 

19.1

%

Interest on securities available for sale

 

 

1,019

 

 

 

645

 

 

 

58.0

%

Other interest income

 

 

1,333

 

 

 

561

 

 

 

137.6

%

Total interest income

 

 

44,077

 

 

 

36,248

 

 

 

21.6

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

10,883

 

 

 

6,071

 

 

 

79.3

%

Interest on borrowed funds

 

 

-

 

 

 

146

 

 

 

-100.0

%

Total interest expense

 

 

10,883

 

 

 

6,217

 

 

 

75.1

%

Net interest income

 

 

33,194

 

 

 

30,031

 

 

 

10.5

%

Provision for loan losses

 

 

691

 

 

 

1,047

 

 

 

-34.0

%

Net interest income after provision for loan losses

 

 

32,503

 

 

 

28,984

 

 

 

12.1

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

1,495

 

 

 

1,419

 

 

 

5.4

%

Loan servicing fees, net of amortization

 

 

853

 

 

 

1,006

 

 

 

-15.2

%

Gain on sale of loans

 

 

4,379

 

 

 

3,852

 

 

 

13.7

%

Other income

 

 

2,185

 

 

 

1,002

 

 

 

118.1

%

Total noninterest income

 

 

8,912

 

 

 

7,279

 

 

 

22.4

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

15,862

 

 

 

13,629

 

 

 

16.4

%

Occupancy and equipment

 

 

3,441

 

 

 

3,065

 

 

 

12.3

%

Data processing and communication

 

 

1,110

 

 

 

948

 

 

 

17.1

%

Professional fees

 

 

711

 

 

 

612

 

 

 

16.2

%

FDIC insurance and regulatory assessments

 

 

188

 

 

 

306

 

 

 

-38.6

%

Promotion and advertising

 

 

543

 

 

 

598

 

 

 

-9.2

%

Directors’ fees

 

 

680

 

 

 

633

 

 

 

7.4

%

Foundation donation and other contributions

 

 

1,169

 

 

 

1,084

 

 

 

7.8

%

Other expenses

 

 

1,151

 

 

 

1,118

 

 

 

3.0

%

Total noninterest expense

 

 

24,855

 

 

 

21,993

 

 

 

13.0

%

Income before income taxes

 

 

16,560

 

 

 

14,270

 

 

 

16.0

%

Provision for income taxes

 

 

3,984

 

 

 

3,781

 

 

 

5.4

%

Net income (loss)

 

$

12,576

 

 

$

10,489

 

 

 

19.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

8.76

 

 

$

7.92

 

 

 

10.6

%

Basic EPS

 

$

0.78

 

 

$

0.68

 

 

 

14.7

%

Diluted EPS

 

$

0.77

 

 

$

0.66

 

 

 

16.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding

 

 

15,711,580

 

 

 

15,770,576

 

 

 

-0.4

%

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

15,756,886

 

 

 

14,870,232

 

 

 

6.0

%

- Diluted

 

 

15,992,015

 

 

 

15,376,982

 

 

 

4.0

%

Key Ratios

(Dollars in thousands, except ratios)

 

Nine Months Ended

 

 

9/30/2019

 

9/30/2018

 

% change

Return on average assets (ROA)*

 

1.54

%

 

1.48

%

 

0.06

%

Return on average equity (ROE) *

 

12.55

%

 

12.43

%

 

0.12

%

Net interest margin *

 

4.25

%

 

4.49

%

 

-0.24

%

Efficiency ratio

 

59.03

%

 

58.95

%

 

0.08

%

 

 

 

 

 

 

 

Total Risk Based Capital Ratio

 

15.36

%

 

16.16

%

 

-0.80

%

Tier 1 Capital Ratio

 

14.35

%

 

15.01

%

 

-0.66

%

Common Equity Tier 1 Ratio

 

14.35

%

 

15.01

%

 

-0.66

%

Tier 1 Leverage Ratio

 

12.11

%

 

12.77

%

 

-0.66

%

 

 

 

 

 

 

 

* Annualized

Asset Quality

(Dollars in thousands, except ratios)

 

Three Months Ended

 

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

Nonaccrual Loans

 

$

1,234

 

 

$

1,218

 

 

$

1,239

 

 

$

1,571

 

 

$

888

 

Loans 90 days or more past due, accruing

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Accruing restructured loans

 

 

336

 

 

 

338

 

 

 

341

 

 

 

343

 

 

 

345

 

Nonperforming loans

 

 

1,570

 

 

 

1,556

 

 

 

1,580

 

 

 

1,914

 

 

 

1,233

 

Other real estate owned (OREO)

 

 

1,817

 

 

 

-

 

 

 

1,146

 

 

 

-

 

 

 

-

 

Nonperforming assets

 

 

3,387

 

 

 

1,556

 

 

 

2,726

 

 

 

1,914

 

 

 

1,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

 

3,249

 

 

 

4,197

 

 

 

4,236

 

 

 

3,573

 

 

 

3,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

 

0.29

%

 

 

0.14

%

 

 

0.25

%

 

 

0.18

%

 

 

0.12

%

Nonperforming assets/gross loans plus OREO

 

 

0.35

%

 

 

0.16

%

 

 

0.30

%

 

 

0.22

%

 

 

0.15

%

Nonperforming loans/gross loans

 

 

0.16

%

 

 

0.16

%

 

 

0.17

%

 

 

0.22

%

 

 

0.15

%

Allowance for loan losses/nonperforming loans

 

 

614

%

 

 

612

%

 

 

609

%

 

 

503

%

 

 

775

%

Allowance for loan losses/nonperforming assets

 

 

285

%

 

 

612

%

 

 

353

%

 

 

503

%

 

 

775

%

Allowance for loan losses/gross loans

 

 

1.00

%

 

 

1.01

%

 

 

1.05

%

 

 

1.10

%

 

 

1.12

%

Classified loans/gross loans

 

 

0.34

%

 

 

0.44

%

 

 

0.46

%

 

 

0.41

%

 

 

0.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs

 

$

176

 

 

$

495

 

 

$

17

 

 

$

135

 

 

$

611

 

Net charge-offs to average gross loans *

 

 

0.08

%

 

 

0.21

%

 

 

0.01

%

 

 

0.06

%

 

 

0.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing delinquent loans 30-89 days past due

 

9/30/2019

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

30-59 days

 

$

2,580

 

 

$

1,065

 

 

$

2,073

 

 

$

449

 

 

$

1,007

 

60-89 days

 

 

580

 

 

 

2,207

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

 

 

3,160

 

 

 

3,272

 

 

 

2,073

 

 

 

449

 

 

 

1,007

 

Average Balance Sheet, Interest and Yield/Rate Analysis

(Dollars in thousands)

 

Three Months Ended

 

 

September 30, 2019

 

June 30, 2019

 

September 30, 2018

 

 

Average

Balance

 

Interest

and Fees

 

Yield/ Rate

 

Average

Balance

 

Interest

and Fees

 

Yield/ Rate

 

Average

Balance

 

Interest

and Fees

 

Yield/ Rate

Interest-Earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold and other investments

 

$

78,216

 

$

502

 

2.52

%

 

$

66,277

 

$

458

 

2.74

%

 

$

34,216

 

$

233

 

2.68

%

Securities available for sale

 

 

54,472

 

 

332

 

2.44

 

 

 

53,329

 

 

327

 

2.45

 

 

 

44,441

 

 

249

 

2.24

 

Total investments

 

 

132,688

 

 

834

 

2.49

 

 

 

119,606

 

 

785

 

2.61

 

 

 

78,657

 

 

482

 

2.43

 

Real estate loans

 

 

573,102

 

 

7,978

 

5.52

 

 

 

562,256

 

 

7,837

 

5.59

 

 

 

483,625

 

 

6,472

 

5.31

 

SBA loans

 

 

144,439

 

 

3,213

 

8.83

 

 

 

137,133

 

 

3,063

 

8.96

 

 

 

146,259

 

 

2,978

 

8.08

 

C & I loans

 

 

102,311

 

 

1,489

 

5.77

 

 

 

104,273

 

 

1,558

 

5.99

 

 

 

106,654

 

 

1,510

 

5.62

 

Home Mortgage loans

 

 

123,336

 

 

1,546

 

5.01

 

 

 

125,577

 

 

1,588

 

5.06

 

 

 

119,346

 

 

1,515

 

5.08

 

Consumer & other loans

 

 

3,239

 

 

52

 

6.39

 

 

 

2,814

 

 

47

 

6.70

 

 

 

3,373

 

 

49

 

5.75

 

Loans (1)

 

 

946,427

 

 

14,278

 

5.99

 

 

 

932,053

 

 

14,093

 

6.06

 

 

 

859,257

 

 

12,524

 

5.79

 

Total interest-earning assets

 

 

1,079,115

 

 

15,112

 

5.56

 

 

 

1,051,659

 

 

14,878

 

5.67

 

 

 

937,914

 

 

13,006

 

5.51

 

Noninterest-earning assets

 

 

51,680

 

 

 

 

 

 

50,387

 

 

 

 

 

 

45,913

 

 

 

 

Total assets

 

$

1,130,795

 

 

 

 

 

$

1,102,046

 

 

 

 

 

$

983,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and savings deposits

 

$

5,321

 

 

3

 

0.25

%

 

$

4,725

 

 

3

 

0.25

%

 

$

5,929

 

 

4

 

0.25

%

Money market deposits

 

 

275,259

 

 

1,295

 

1.87

 

 

 

281,239

 

 

1,335

 

1.90

 

 

 

254,510

 

 

948

 

1.48

 

Time deposits

 

 

420,922

 

 

2,595

 

2.45

 

 

 

389,294

 

 

2,363

 

2.43

 

 

 

323,512

 

 

1,525

 

1.87

 

Total interest-bearing deposits

 

 

701,502

 

 

3,893

 

2.20

 

 

 

675,258

 

 

3,701

 

2.20

 

 

 

583,951

 

 

2,477

 

1.68

 

Borrowings

 

 

120

 

 

-

 

0.00

 

 

 

2

 

 

-

 

2.76

 

 

 

8,300

 

 

44

 

2.09

 

Total interest-bearing liabilities

 

 

701,622

 

 

3,893

 

2.20

 

 

 

675,260

 

 

3,701

 

2.20

 

 

 

592,251

 

 

2,521

 

1.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

275,316

 

 

 

 

 

 

276,569

 

 

 

 

 

 

258,252

 

 

 

 

Other noninterest-bearing liabilities

 

 

17,628

 

 

 

 

 

 

16,778

 

 

 

 

 

 

9,817

 

 

 

 

Total noninterest-bearing liabilities

 

 

292,944

 

 

 

 

 

 

293,347

 

 

 

 

 

 

268,069

 

 

 

 

Shareholders’ equity

 

 

136,229

 

 

 

 

 

 

133,439

 

 

 

 

 

 

123,507

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,130,795

 

 

 

 

 

$

1,102,046

 

 

 

 

 

$

983,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

$

11,219

 

3.36

%

 

 

 

$

11,177

 

3.47

%

 

 

 

$

10,485

 

3.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

4.13

%

 

 

 

 

 

4.26

%

 

 

 

 

 

4.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits & cost of funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits / cost of deposits

 

$

976,818

 

$

3,893

 

1.58

%

 

$

951,827

 

$

3,701

 

1.56

%

 

$

842,203

 

$

2,477

 

1.17

%

Total funding liabilities / cost of funds

 

$

976,938

 

$

3,893

 

1.58

%

 

$

951,829

 

$

3,701

 

1.56

%

 

$

850,503

 

$

2,521

 

1.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The average loan balance includes loans held for sale.

Average Balance Sheet, Interest and Yield/Rate Analysis

(Dollars in thousands)

 

Nine Months Ended

 

 

September 30, 2019

 

September 30, 2018

 

 

Average

Balance

 

Interest

and Fees

 

Yield/ Rate

 

Average

Balance

 

Interest

and Fees

 

Yield/ Rate

Interest-Earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold and other investments

 

$

65,911

 

$

1,332

 

2.67

%

 

$

27,699

 

$

561

 

2.69

%

Securities available for sale

 

 

54,190

 

 

1,019

 

2.51

 

 

 

41,030

 

 

645

 

2.10

 

Total investments

 

 

120,101

 

 

2,351

 

2.60

 

 

 

68,729

 

 

1,206

 

2.33

 

Real estate loans

 

 

551,663

 

 

22,964

 

5.57

 

 

 

464,394

 

 

18,016

 

5.19

 

SBA loans

 

 

137,663

 

 

9,209

 

8.94

 

 

 

141,641

 

 

8,242

 

7.78

 

C & I loans

 

 

104,405

 

 

4,641

 

5.94

 

 

 

104,819

 

 

4,348

 

5.55

 

Home Mortgage loans

 

 

125,788

 

 

4,770

 

5.06

 

 

 

111,414

 

 

4,286

 

5.13

 

Consumer & other loans

 

 

2,864

 

 

141

 

6.58

 

 

 

3,536

 

 

150

 

5.67

 

Loans (1)

 

 

922,383

 

 

41,725

 

6.05

 

 

 

825,804

 

 

35,042

 

5.67

 

Total interest-earning assets

 

 

1,042,484

 

 

44,076

 

5.65

 

 

 

894,533

 

 

36,248

 

5.41

 

Noninterest-earning assets

 

 

48,215

 

 

 

 

 

 

48,300

 

 

 

 

Total assets

 

$

1,090,699

 

 

 

 

 

$

942,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

NOW and savings deposits

 

$

5,075

 

 

10

 

0.25

%

 

$

6,314

 

 

12

 

0.24

%

Money market deposits

 

 

269,446

 

 

3,751

 

1.86

 

 

 

256,171

 

 

2,460

 

1.28

 

Time deposits

 

 

396,701

 

 

7,122

 

2.40

 

 

 

288,841

 

 

3,599

 

1.67

 

Total interest-bearing deposits

 

 

671,222

 

 

10,883

 

2.17

 

 

 

551,326

 

 

6,071

 

1.47

 

Borrowings

 

 

41

 

 

-

 

0.00

 

 

 

11,680

 

 

146

 

1.67

 

Total interest-bearing liabilities

 

 

671,263

 

 

10,883

 

2.17

 

 

 

563,006

 

 

6,217

 

1.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

271,517

 

 

 

 

 

 

257,717

 

 

 

 

Other noninterest-bearing liabilities

 

 

14,317

 

 

 

 

 

 

9,603

 

 

 

 

Total noninterest-bearing liabilities

 

 

285,834

 

 

 

 

 

 

267,320

 

 

 

 

Shareholders’ equity

 

 

133,602

 

 

 

 

 

 

112,507

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,090,699

 

 

 

 

 

$

942,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

$

33,193

 

3.48

%

 

 

 

$

30,031

 

3.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

4.25

%

 

 

 

 

 

4.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits & cost of funds:

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits / cost of deposits

 

$

942,739

 

$

10,883

 

1.54

%

 

$

809,043

 

$

6,071

 

1.00

%

Total funding liabilities / cost of funds

 

$

942,780

 

$

10,883

 

1.54

%

 

$

820,723

 

$

6,217

 

1.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) The average loan balance includes loans held for sale.

Contacts

Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
Christine.oh@myopenbank.com

Release Summary

OP Bancorp Reports Third Quarter Result of 2019

Contacts

Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
Christine.oh@myopenbank.com