OP Bancorp Reports First Quarter Result of 2021

April 22, 2021 6:00 PM EDT

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2021 First Quarter Highlights:

  • Net income totaled $5.1 million, or $0.33 per diluted common share, compared to $3.8 million, or $0.25 per diluted common share, for the fourth quarter of 2020 and $3.3 million, or $0.21 per diluted common share, for the first quarter of 2020
  • Net interest margin was 3.80%, compared to 3.73% for the fourth quarter of 2020 and 3.95% for the first quarter of 2020
  • Return on average assets was 1.44% and return on average equity was 14.02%, compared to 1.13% and 10.72%, respectively, for the fourth quarter of 2020 and 1.12% and 9.44%, respectively, for the first quarter of 2020
  • Total assets increased 20.3% to $1.46 billion at March 31, 2021, from $1.21 billion at March 31, 2020
  • Net loans receivable increased 15.7% to $1.14 billion at March 31, 2021, from $985.8 million at March 31, 2020
  • Total deposits increased 22.2% to $1.29 billion at March 31, 2021, from $1.05 billion at March 31, 2020
  • Noninterest-bearing deposits accounted for 44.5% of total deposits at March 31, 2021, compared to 29.0% at March 31, 2020
  • Nonperforming assets to total assets was 0.08% at March 31, 2021, compared to 0.13% at March 31, 2020
  • Total risk-based capital ratio and leverage ratio were 15.04% and 10.38%, respectively, at March 31, 2021, compared to 14.78% and 11.59%, respectively at March 31, 2020
  • The provision for loan losses was $620,000, compared to $1.8 million for the fourth quarter of 2020 and $743,000 for the first quarter of 2020
  • The allowance for loan losses, excluding fully guaranteed SBA PPP loans, was 1.47% of gross loans at March 31, 2021, compared to 1.08% of gross loans at March 31, 2020
  • Pre-provision net revenue was $7.8 million, compared to $7.2 million for the fourth quarter of 2020 and $5.2 million for the first quarter of 2020
  • Originated $74.2 million and 1,336 loans under the second draw of the SBA PPP loans; and $22.9 million and 429 loans from the first draw of SBA PPP loans have been forgiven
  • Remaining loan deferments under the CARES Act were 1.6% of our loan portfolio as of March 31, 2021, down from 2.7% of our loan portfolio as of December 31, 2020

LOS ANGELES--(BUSINESS WIRE)-- OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported unaudited financial results for the first quarter of 2021. Net income for the first quarter of 2021 was $5.1 million, or $0.33 per diluted common share, compared to net income of $3.8 million, or $0.25 per diluted common share, for the fourth quarter of 2020, and net income of $3.3 million, or $0.21 per diluted common share, for the first quarter of 2020.

“I am pleased to report a record quarter with the quarterly net income of $5.1 million. During the first quarter, we have put our priority in assisting our existing and new customers with the second draw of SBA PPP loans and have originated 1,336 loans in the amount of $74.2 million. We have also began processing the forgiveness of the first draw of PPP loans which totaled $22.9 million during the quarter. We are expecting to close the purchase of SBA loan portfolio of Hana Small Business Lending, Inc. in the second quarter of 2021. As the vaccine distribution is accelerated and the counties begin to allow reopening and increased capacity of businesses, we are confident that most of our business customers will soon resume their operation to full capacity. The focus in managing risks and maintaining safe and sound banking operations will continue to remain as our highest priority,” 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

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

13,632

 

 

$

13,375

 

 

$

14,345

 

Interest expense

 

 

877

 

 

 

1,194

 

 

 

3,229

 

Net interest income

 

 

12,755

 

 

 

12,181

 

 

 

11,116

 

Provision for loan losses

 

 

620

 

 

 

1,831

 

 

 

743

 

Noninterest income

 

 

2,966

 

 

 

3,392

 

 

 

2,296

 

Noninterest expense

 

 

7,966

 

 

 

8,412

 

 

 

8,207

 

Income before taxes

 

 

7,135

 

 

 

5,330

 

 

 

4,462

 

Provision for income taxes

 

 

2,058

 

 

 

1,513

 

 

 

1,163

 

Net Income

 

$

5,077

 

 

$

3,817

 

 

$

3,299

 

Diluted earnings per share

 

$

0.33

 

 

$

0.25

 

 

$

0.21

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

28,575

 

 

$

26,659

 

 

$

4,382

 

Gross loans, net of unearned income

 

 

1,155,872

 

 

 

1,099,736

 

 

 

996,559

 

Allowance for loan losses (ALL)

 

 

15,339

 

 

 

15,352

 

 

 

10,748

 

Total assets

 

 

1,455,334

 

 

 

1,366,826

 

 

 

1,209,593

 

Deposits

 

 

1,285,390

 

 

 

1,200,090

 

 

 

1,052,198

 

Shareholders’ equity

 

 

146,993

 

 

 

143,366

 

 

 

138,099

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

1.44

%

 

 

1.13

%

 

 

1.12

%

Return on average equity (annualized)

 

 

14.02

%

 

 

10.72

%

 

 

9.44

%

Net interest margin (annualized)

 

 

3.80

%

 

 

3.73

%

 

 

3.95

%

Efficiency ratio (1)

 

 

50.67

%

 

 

54.02

%

 

 

61.19

%

Credit Quality:

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

1,148

 

 

$

985

 

 

$

1,533

 

Nonperforming assets

 

 

1,148

 

 

 

985

 

 

 

1,533

 

Net charge-offs to average gross loans (annualized)

 

 

0.00

%

 

 

0.00

%

 

 

0.02

%

Nonperforming assets to gross loans plus OREO

 

 

0.10

%

 

 

0.09

%

 

 

0.15

%

ALL to nonperforming loans

 

 

1,337

%

 

 

1,558

%

 

 

701

%

ALL to gross loans, net of unearned income

 

 

1.33

%

 

 

1.40

%

 

 

1.08

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

 

15.04

%

 

 

14.81

%

 

 

14.78

%

Tier 1 risk-based capital ratio

 

 

13.79

%

 

 

13.56

%

 

 

13.69

%

Common equity tier 1 ratio

 

 

13.79

%

 

 

13.56

%

 

 

13.69

%

Leverage ratio

 

 

10.38

%

 

 

10.55

%

 

 

11.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

For the Three Months Ended

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

Interest income

 

$

13,632

 

 

$

13,375

 

 

$

14,345

Interest expense

 

 

877

 

 

 

1,194

 

 

 

3,229

Net interest income

 

 

12,755

 

 

 

12,181

 

 

 

11,116

Noninterest income

 

 

2,966

 

 

 

3,392

 

 

 

2,296

Noninterest expense

 

 

7,966

 

 

 

8,402

 

 

 

8,207

Pre-provision net revenue

 

$

7,755

 

 

$

7,171

 

 

$

5,205

Reconciliation to Net Income:

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

620

 

 

 

1,790

 

 

 

743

Provision for income taxes

 

 

2,058

 

 

 

1,513

 

 

 

1,163

Net Income

 

$

5,077

 

 

$

3,868

 

 

$

3,299

Note: Pre-provision net revenue is a non-GAAP measure. Pre-provision net revenue excludes income taxes and provision for loan losses from net income. Management believes that this information provides useful information with a better comparison to the financial results of each periods and a better understanding of the operating results of the Bank.

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 both the contractual interest income and yield on our loan portfolio to the reported interest income and yield for the periods indicated.

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

(Dollars in thousands)

 

Interest

& Fees

 

 

Yield

 

 

Interest

& Fees

 

 

Yield

 

 

Interest

& Fees

 

 

Yield

 

Contractual interest rate

 

$

12,166

 

 

 

4.23

%

 

$

12,156

 

 

 

4.35

%

 

$

13,088

 

 

 

5.27

%

SBA discount accretion

 

 

507

 

 

 

0.18

%

 

 

619

 

 

 

0.22

%

 

 

558

 

 

 

0.22

%

Amortization of net deferred fees

 

 

540

 

 

 

0.19

%

 

 

242

 

 

 

0.09

%

 

 

22

 

 

 

0.01

%

Net interest recognized on nonaccrual loans

 

 

(2

)

 

 

0.00

%

 

 

(20

)

 

 

-0.01

%

 

 

1

 

 

 

0.00

%

Prepayment penalties (1) and other fees

 

 

73

 

 

 

0.02

%

 

 

9

 

 

 

0.00

%

 

 

25

 

 

 

0.01

%

Yield on loans (as reported)

 

$

13,284

 

 

 

4.62

%

 

$

13,006

 

 

 

4.65

%

 

$

13,694

 

 

 

5.51

%

(1) Prepayment penalty income of $69,000 and $18,000 for the three months ended March 31, 2021 and March 31, 2020, respectively, are from commercial real estate loans.

Net interest margin for the first quarter of 2021 increased 7 basis points to 3.80% from 3.73% for the fourth quarter of 2020, primarily due to a 19 basis point decrease in the cost of interest-bearing liabilities, partially offset by a 3 basis point decrease in the reported yield on interest-earning assets.

Net interest income before provision for loan losses for the first quarter of 2021 was $12.8 million, an increase of $574,000, or 4.7%, compared to $12.2 million for the fourth quarter of 2020, primarily due to a $317,000 decrease in interest expense and a $257,000 increase in interest income.

Interest income on securities available for sale and other investments for the first quarter of 2021 decreased $21,000, or 5.8%, to $348,000, compared to $369,000 for the fourth quarter of 2020. The decrease was primarily due to a $21,000 decrease in interest income on securities available for sale. The decrease was the result of an 8 basis point decrease in the yield on the average balance of securities available for sale in the period, which is primarily due to lower yields on securities purchased during the fourth quarter of 2020 and the first quarter of 2021.

Interest income from contractual interest rates on loans for the first quarter of 2021 increased $10,000, or 0.1%, compared to the fourth quarter of 2020, reflecting an increase of $52.3 million, or 4.7% in the average balance of loans, partially offset by a 12 basis point decrease in average contractual interest rate on loans. The amount of discount accretion on SBA loans for the first quarter of 2021 decreased $112,000 compared to the fourth quarter of 2020 due to a decrease in SBA loan payoffs. The reported interest income on loans, net of SBA discount accretions and other components, for the first quarter of 2021 increased $278,000, or 2.1%, compared to the fourth quarter of 2020.

Interest expense for the first quarter of 2021 was $877,000, a decrease of $317,000, or 26.5%, compared to $1.2 million for the fourth quarter of 2020. The decrease was primarily due to downward adjustments of the Bank’s deposit rates during the fourth quarter, partially offset by an increase of $23.5 million, or 3.5%, in the average balance of interest-bearing liabilities.

Net interest margin for the first quarter of 2021 decreased 15 basis points to 3.80% from 3.95% for the first quarter of 2020, primarily due to a 103 basis point decrease in the reported yield on interest-earning assets, partially offset by a 127 basis point decrease in the cost of interest-bearing liabilities.

Net interest income before provision for loan losses for the first quarter of 2021 increased $1.6 million, or 14.7%, to $12.8 million, compared to $11.1 million for the first quarter of 2020, primarily due to a $2.4 million decrease in interest expense, partially offset by a $713,000 decrease in interest income.

Interest income on securities available for sale and other investments for the first quarter of 2021 decreased $303,000, or 46.6%, to $348,000, compared to $651,000, for the first quarter of 2020. The interest income on other investments decreased $220,000 as a result of a 123 basis point decrease in the yield on the average balance of Fed funds sold and other investments in the period. The interest income on securities available for sale decreased $83,000, primarily due to a 131 basis point decrease in the yield on the average balance of securities available for sale and higher premium amortizations from accelerated prepayments during the first quarter of 2021 compared to the first quarter of 2020.

Interest income from contractual interest rates on loans for the first quarter of 2021 decreased $922,000, or 7.0%, compared to the first quarter of 2020, reflecting a 104 basis point decrease in average contractual interest rate on loans. The decrease in the average contractual interest rate was primarily due to cumulative market rate cuts of 150 basis points by the Federal Reserve in the first quarter of 2020. The decrease in interest income from contractual interest was partially offset by an increase of $167.1 million, or 16.7% in average balance of loans. The amount of discount accretion on SBA loans for the first quarter of 2021 decreased $51,000 compared to the first quarter of 2020, primarily due to a decrease in SBA loan payoffs, partially offset by an increase in monthly discount accretions in line with an increase in SBA loan balance at March 31, 2021, compared to March 31, 2020. The reported interest income on loans, net of SBA discount accretions and other components, for the first quarter of 2021 decreased $410,000, or 3.0%, compared to the first quarter of 2020.

Interest expense for the first quarter of 2021 decreased $2.4 million, or 72.8%, to $877,000, compared to $3.2 million for the first quarter of 2020, primarily due to the Bank’s downward adjustments in deposit rates after the rate cuts by the Federal Reserve in March of 2020 and a decrease of $25.4 million, or 3.5%, in the average balance of interest-bearing liabilities.

The following tables show the asset yields, liability costs, net interest spread, and net interest margin for the periods indicated, along with the percentage changes in the periods indicated.

 

 

Three Months Ended

 

 

Percentage Change

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

Q1-21

 

 

Q1-21

 

 

 

2021

 

 

2020

 

 

2020

 

 

vs. Q4-20

 

 

vs. Q1-20

 

Yield on loans

 

 

4.62

%

 

 

4.65

%

 

 

5.51

%

 

 

-0.03

%

 

 

-0.89

%

Yield on interest-earning assets

 

 

4.07

%

 

 

4.10

%

 

 

5.10

%

 

 

-0.03

%

 

 

-1.03

%

Cost of interest-bearing liabilities

 

 

0.51

%

 

 

0.70

%

 

 

1.78

%

 

 

-0.19

%

 

 

-1.27

%

Cost of deposits

 

 

0.29

%

 

 

0.40

%

 

 

1.27

%

 

 

-0.11

%

 

 

-0.98

%

Cost of funds

 

 

0.28

%

 

 

0.40

%

 

 

1.27

%

 

 

-0.12

%

 

 

-0.99

%

Net interest spread

 

 

3.56

%

 

 

3.40

%

 

 

3.32

%

 

 

0.16

%

 

 

0.24

%

Net interest margin

 

 

3.80

%

 

 

3.73

%

 

 

3.95

%

 

 

0.07

%

 

 

-0.15

%

The Bank recorded $620,000 in provision for loan losses for the first quarter of 2021, which includes $636,000 for accrued interest receivables on deferred loans and loans that are no longer on deferral but have not fully caught up on their accrued interest, and $12,000 in net reversal from loss factor change and loan balance change. Management continues to evaluate the qualitative and quantitative factors on all loan types. The Bank recorded a provision for loan losses of $1.8 million for the fourth quarter of 2020 and $743,000 for the first quarter of 2020.

Noninterest income for the first quarter of 2021 was $3.0 million, a decrease of $426,000, or 12.6%, from $3.4 million for the fourth quarter of 2020, primarily due to a decrease of $306,000 in gain on sale of loans and a decrease of $275,000 in other income, partially offset by an increase of $164,000 in loan servicing fees from a decrease in SBA loan payoffs. Gain on sale of loans for the first quarter of 2021 was $1.9 million from the sale of $22.4 million in SBA loans with an average premium of 10.51%, whereas gain on sale of loans for the fourth quarter of 2020 was $2.2 million from the sale of $28.5 million in SBA loans with an average premium of 8.83%. The decrease in other income was primarily due to a gain from a property sale during the fourth quarter of 2020.

Noninterest income for the first quarter of 2021 was $3.0 million, an increase of $670,000, compared to $2.3 million for the first quarter of 2020, primarily due to an increase of $727,000 in gain on sale of loans and an increase of $139,000 in loan servicing fees, partially offset by a decrease of $94,000 in service charges on deposits and a decrease of $102,000 in other income. Gain on sale of loans for the first quarter of 2020 was $1.2 million from the sale of $17.5 million in SBA loans with an average premium of 8.41%. The increase of $139,000 in loan servicing fees was due to a decrease in SBA loan payoffs during the first quarter of 2021 compared to the first quarter of 2020.

Noninterest expense for the first quarter of 2021 was $8.0 million, a decrease of $446,000, or 5.3%, compared to $8.4 million for the fourth quarter of 2020. The decrease was primarily due to a decrease of $874,000 in salary and employee benefits, partially offset by an increase of $115,000 promotion and advertising expense, an increase of $107,000 in foundation donation and other contributions expenses, and an increase of $110,000 in other expenses. The decrease in salary and employee benefits was primarily due to an increase in deferred loan origination costs from originating 1,336 SBA’s second draw Paycheck Protection Program (PPP) loans for an aggregate loan balance of $74.2 million during the quarter. The increase in promotion and advertising expense was primarily due to a reduction in promotion and advertising expense in the fourth quarter of 2020, and the increase in foundation donation expense was a result of the increase in net income in the first quarter of 2021.

Noninterest expense for the first quarter of 2021 was $8.0 million, a decrease of $241,000, or 2.9%, compared to $8.2 million for the first quarter of 2020. The decrease was primarily due to a decrease of $409,000 in salary and employee benefits and a decrease of $117,000 in director’s fees expense, partially offset by an increase of $177,000 in foundation donation and other contributions expenses. The decrease in salary and employee benefits was primarily due to the aforementioned increase in deferred loan origination costs for SBA PPP loans, partially offset by additional accruals made to employee incentives during the first quarter of 2021. The decrease in director’s expense was due to a decrease of $108,000 in restricted stock unit expense resulting from the full vesting of the restricted stock units in July 2020.

Income tax provision was $2.1 million for the first quarter, $1.5 million for the fourth quarter of 2020, and $1.2 million for the first quarter of 2020. The effective tax rate for the first quarter of 2021 was 28.8%, compared to 28.4% for the fourth quarter of 2020 and 26.1% for the first quarter of 2020. The higher effective tax rate for the first quarter of 2021 compared to the first quarter of 2020 was primarily due to realizing a lower amount of tax benefits as a result of a decrease in the number of non-qualified stock option exercises.

Balance Sheet

Total assets were $1.46 billion at March 31, 2021, an increase of $88.5 million, or 6.5%, compared to $1.37 billion at December 31, 2020, and an increase of $245.7 million, or 20.3%, compared to $1.21 billion at March 31, 2020.

Gross loans, net of unearned income, were $1.16 billion at March 31, 2021, an increase of $56.1 million, or 5.1%, from $1.10 billion at December 31, 2020, and an increase of $159.3 million, or 16.0%, from $996.6 million at March 31, 2020.

The following table shows new loan originations for the periods indicated.

 

 

Three Month Ended

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

Real estate loans

 

$

42,748

 

 

$

30,828

 

 

$

58,854

SBA loans (1)

 

 

105,340

 

 

 

16,634

 

 

 

26,347

C & I loans

 

 

9,505

 

 

 

47,308

 

 

 

6,342

Home mortgage loans

 

 

11,563

 

 

 

17,027

 

 

 

6,924

Total

 

$

169,156

 

 

$

111,797

 

 

$

98,467

(1) Includes SBA Paycheck Protection Program (PPP) loans of $74.2 million at March 31, 2021.

Loan payoffs were $59.9 million for the first quarter of 2021, compared to $41.2 million for the fourth quarter of 2020, and $44.3 million for the first quarter of 2020.

Total deposits were $1.29 billion at March 31, 2021, an increase of $85.3 million, or 7.1%, from $1.20 billion at December 31, 2020, and an increase of $233.2 million, or 22.2%, from $1.05 billion at March 31, 2020. Noninterest-bearing deposits were $572.0 million at March 31, 2021, compared to $522.8 million at December 31, 2020, and $304.8 million at March 31, 2020. The increase in noninterest-bearing deposits during the first quarter of 2021 was primarily due to the SBA PPP loans funded to customers’ noninterest-bearing deposits and new accounts opened during the quarter.

Noninterest-bearing deposits accounted for 44.5% of total deposits at March 31, 2021, compared to 43.6% at December 31, 2020, and 29.0% at March 31, 2020. The following table shows the Bank’s deposits, by type, as a percentage of total deposits as of the periods indicated.

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

Noninterest-bearing deposits

 

 

44.5

%

 

 

43.6

%

 

 

29.0

%

Money market deposits and others

 

 

27.5

%

 

 

27.3

%

 

 

28.2

%

Time deposits over $250,000

 

 

14.9

%

 

 

16.7

%

 

 

20.0

%

Other time deposits

 

 

13.1

%

 

 

12.4

%

 

 

22.8

%

Total deposits

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

The Bank had $5.0 million in borrowings from the Federal Home Loan Bank (FHLB) at March 31, 2021 and December 31, 2020, which has a 0% interest rate under the Zero-Rate Recovery Advance Program, FHLB’s pandemic relief initiative. The Bank had no borrowings from the FHLB at March 31, 2020.

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 March 31, 2021, as summarized in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Well-

capitalized

 

 

Regulatory

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 capital ratio

 

 

15.04

%

 

 

14.77

%

 

 

10.00

%

 

 

10.50

%

Tier 1 risk-based capital ratio

 

 

13.79

%

 

 

13.51

%

 

 

8.00

%

 

 

8.50

%

Common equity tier 1 ratio

 

 

13.79

%

 

 

13.51

%

 

 

6.50

%

 

 

7.00

%

Leverage ratio

 

 

10.38

%

 

 

10.28

%

 

 

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 has repurchased 3,830 shares of its common stock at an average price of $7.50 during the first quarter of 2021. Since the announcement of the initial stock repurchase program in January 2019, the Company has repurchased a total of 1.57 million shares of its common stock at an average repurchase price of $8.58 per share through March 31, 2021.

Asset Quality

Nonperforming loans were $1.1 million at March 31, 2021, an increase of $163,000 from $985,000 at December 31, 2020 and a decrease of $385,000 from $1.5 million at March 31, 2020.

The Bank had no other real estate owned (OREO) at March 31, 2021, December 31, 2020 and March 31, 2020.

Nonperforming assets were $1.1 million, or 0.08% of total assets, at March 31, 2021, compared to $985,000, or 0.07% of total assets, at December 31, 2020, and $1.5 million, or 0.13% of total assets, at March 31, 2020. Nonperforming loans to gross loans were 0.10% at March 31, 2021, compared to 0.09% at December 31, 2020, and 0.15% at March 31, 2020.

Total classified loans were $6.6 million, or 0.57% of gross loans, at March 31, 2021, compared to $7.3 million, or 0.67% of gross loans, at December 31, 2020, and $3.6 million, or 0.36% of gross loans, at March 31, 2020. The decrease of $739,000 in classified loans from December 31, 2020 was primarily due to two SBA real estate loans, which were reclassified to watch grade loans. Classified loans of $5.9 million as of March 31, 2021 are fully secured by real estate collaterals.

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

 

 

As of

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

Classified loans by loan type

 

(Dollars in thousands)

SBA loans—real estate

 

$

769

 

 

$

1,523

 

 

$

774

 

 

$

786

 

 

$

2,021

SBA loans—non-real estate

 

 

385

 

 

 

198

 

 

 

121

 

 

 

124

 

 

 

159

Commercial and industrial

 

 

4,832

 

 

 

5,004

 

 

 

1,207

 

 

 

1,211

 

 

 

686

Home mortgage

 

 

600

 

 

 

600

 

 

 

 

 

 

689

 

 

 

694

Total classified loans

 

$

6,586

 

 

$

7,325

 

 

$

2,102

 

 

$

2,810

 

 

$

3,560

SBA guarantee balance retained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA loans—real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

357

SBA loans—non-real estate

 

 

166

 

 

 

 

 

 

 

 

 

 

 

 

33

Total SBA unsold guarantee portion

 

$

166

 

 

$

 

 

$

 

 

$

 

 

$

390

Total classified loans, net of SBA guarantee balance retained

 

$

6,420

 

 

$

7,325

 

 

$

2,102

 

 

$

2,810

 

 

$

3,170

The Bank had 14 loans in deferred status with an aggregate balance of $19.0 million, or 1.6% of total loans at March 31, 2021, compared to 18 loans in deferred status with an aggregate balance of $31.2 million, or 2.7% of total loans at December 31, 2020. Since we started loan deferments under the CARES Act in the second quarter of 2020, 171 loans with an aggregate balance of $217.8 million have resumed regular payments or have been paid off through March 31, 2021.

The allowance for loan losses (ALL) was $15.3 million at March 31, 2021, compared to $15.4 million at December 31, 2020, and $10.7 million at March 31, 2020. The ALL was 1.33% of gross loans at March 31, 2021, 1.40% of gross loans at December 31, 2020, and 1.08% of gross loans at March 31, 2020. Excluding fully guaranteed SBA PPP loans, the ALL was 1.47% of gross loans at March 31, 2021, 1.48% of gross loans at December 31, 2020, and 1.08% of gross loans at March 31, 2020. The ALL was 1,337% of nonperforming assets at March 31, 2021, 1,558% of nonperforming assets at December 31, 2020, and 701% at March 31, 2020.

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 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. 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: the uncertainties related to the coronavirus pandemic including, but not limited to, the potential adverse effect of the pandemic on the economy, our employees and customers, and our financial performance; the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; 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 losses; 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, the success of construction projects that we finance, including any loans acquired in acquisition transactions; 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 and our ability to raise additional capital, if necessary; 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 Open Bank to pay dividends to us, which could limit our liquidity; 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; political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, fires, drought, pandemic diseases (such as the coronavirus) or extreme weather events, any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; 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; 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, 2020 and in our other subsequent filings with the Securities and Exchange Commission.

Consolidated Balance Sheet (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

03/31/2021

 

 

12/31/2020

 

 

% change

 

 

03/31/2020

 

 

% change

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

127,524

 

 

$

106,405

 

 

 

19.8

%

 

$

110,999

 

 

 

14.9

%

Securities available for sale, at fair value

 

 

102,413

 

 

 

91,791

 

 

 

11.6

%

 

 

52,179

 

 

 

96.3

%

Other investments

 

 

9,953

 

 

 

10,006

 

 

 

-0.5

%

 

 

9,253

 

 

 

7.6

%

Loans held for sale

 

 

28,575

 

 

 

26,659

 

 

 

7.2

%

 

 

4,382

 

 

 

552.1

%

Real estate loans

 

 

662,445

 

 

 

651,684

 

 

 

1.7

%

 

 

639,411

 

 

 

3.6

%

SBA loans

 

 

263,185

 

 

 

211,376

 

 

 

24.5

%

 

 

133,909

 

 

 

96.5

%

C & I loans

 

 

103,883

 

 

 

107,308

 

 

 

-3.2

%

 

 

99,860

 

 

 

4.0

%

Home mortgage loans

 

 

125,285

 

 

 

128,211

 

 

 

-2.3

%

 

 

119,984

 

 

 

4.4

%

Consumer & other loans

 

 

1,074

 

 

 

1,157

 

 

 

-7.2

%

 

 

3,395

 

 

 

-68.4

%

Gross loans, net of unearned income

 

 

1,155,872

 

 

 

1,099,736

 

 

 

5.1

%

 

 

996,559

 

 

 

16.0

%

Allowance for loan losses

 

 

(15,339

)

 

 

(15,352

)

 

 

-0.1

%

 

 

(10,748

)

 

 

42.7

%

Net loans receivable

 

 

1,140,533

 

 

 

1,084,384

 

 

 

5.2

%

 

 

985,811

 

 

 

15.7

%

Premises and equipment, net

 

 

4,368

 

 

 

4,544

 

 

 

-3.9

%

 

 

5,141

 

 

 

-15.0

%

Accrued interest receivable, net

 

 

3,096

 

 

 

3,985

 

 

 

-22.3

%

 

 

3,056

 

 

 

1.3

%

Servicing assets

 

 

7,492

 

 

 

7,360

 

 

 

1.8

%

 

 

6,963

 

 

 

7.6

%

Company owned life insurance

 

 

10,941

 

 

 

10,879

 

 

 

0.6

%

 

 

10,683

 

 

 

2.4

%

Deferred tax assets

 

 

5,391

 

 

 

5,242

 

 

 

2.8

%

 

 

2,709

 

 

 

99.0

%

Operating right-of-use assets

 

 

6,443

 

 

 

6,786

 

 

 

-5.1

%

 

 

7,885

 

 

 

-18.3

%

Other assets

 

 

8,605

 

 

 

8,785

 

 

 

-2.0

%

 

 

10,532

 

 

 

-18.3

%

Total assets

 

$

1,455,334

 

 

$

1,366,826

 

 

 

6.5

%

 

$

1,209,593

 

 

 

20.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

571,985

 

 

$

522,754

 

 

 

9.4

%

 

$

304,845

 

 

 

87.6

%

Money market deposits and others

 

 

354,148

 

 

 

328,323

 

 

 

7.9

%

 

 

296,357

 

 

 

19.5

%

Time deposits over $250,000

 

 

190,960

 

 

 

200,210

 

 

 

-4.6

%

 

 

210,507

 

 

 

-9.3

%

Other time deposits

 

 

168,297

 

 

 

148,803

 

 

 

13.1

%

 

 

240,489

 

 

 

-30.0

%

Total deposits

 

 

1,285,390

 

 

 

1,200,090

 

 

 

7.1

%

 

 

1,052,198

 

 

 

22.2

%

Other borrowings

 

 

5,000

 

 

 

5,000

 

 

 

0.0

%

 

 

-

 

 

 

100.0

%

Accrued interest payable

 

 

622

 

 

 

1,021

 

 

 

-39.1

%

 

 

2,592

 

 

 

-76.0

%

Operating lease liabilities

 

 

8,016

 

 

 

8,429

 

 

 

-4.9

%

 

 

9,701

 

 

 

-17.4

%

Other liabilities

 

 

9,313

 

 

 

8,920

 

 

 

4.4

%

 

 

7,003

 

 

 

33.0

%

Total liabilities

 

 

1,308,341

 

 

 

1,223,460

 

 

 

6.9

%

 

 

1,071,494

 

 

 

22.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

78,654

 

 

 

78,657

 

 

 

0.0

%

 

 

80,422

 

 

 

-2.2

%

Additional paid-in capital

 

 

8,652

 

 

 

8,521

 

 

 

1.5

%

 

 

7,882

 

 

 

9.8

%

Retained earnings

 

 

59,373

 

 

 

55,348

 

 

 

7.3

%

 

 

48,695

 

 

 

21.9

%

Accumulated other comprehensive income

 

 

314

 

 

 

840

 

 

 

-62.6

%

 

 

1,100

 

 

 

-71.5

%

Total shareholders' equity

 

 

146,993

 

 

 

143,366

 

 

 

2.5

%

 

 

138,099

 

 

 

6.4

%

Total Liabilities and Shareholders' Equity

 

$

1,455,334

 

 

$

1,366,826

 

 

 

6.5

%

 

$

1,209,593

 

 

 

20.3

%

Consolidated Statements of Income (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

 

Three Months Ended

 

 

 

3/31/2021

 

 

12/31/2020

 

 

% change

 

 

3/31/2020

 

 

% change

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

13,284

 

 

$

13,006

 

 

 

2.1

%

 

$

13,694

 

 

 

-3.0

%

Interest on securities available for sale

 

 

236

 

 

 

257

 

 

 

-8.2

%

 

 

319

 

 

 

-26.0

%

Other interest income

 

 

112

 

 

 

112

 

 

 

0.0

%

 

 

332

 

 

 

-66.3

%

Total interest income

 

 

13,632

 

 

 

13,375

 

 

 

1.9

%

 

 

14,345

 

 

 

-5.0

%

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

877

 

 

 

1,194

 

 

 

-26.5

%

 

 

3,229

 

 

 

-72.8

%

Total interest expense

 

 

877

 

 

 

1,194

 

 

 

-26.5

%

 

 

3,229

 

 

 

-72.8

%

Net interest income

 

 

12,755

 

 

 

12,181

 

 

 

4.7

%

 

 

11,116

 

 

 

14.7

%

Provision for loan losses

 

 

620

 

 

 

1,831

 

 

 

-66.1

%

 

 

743

 

 

 

-16.6

%

Net interest income after provision for loan losses

 

 

12,135

 

 

 

10,350

 

 

 

17.2

%

 

 

10,373

 

 

 

17.0

%

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

274

 

 

 

283

 

 

 

-3.2

%

 

 

368

 

 

 

-25.5

%

Loan servicing fees, net of amortization

 

 

531

 

 

 

367

 

 

 

44.7

%

 

 

392

 

 

 

35.5

%

Gain on sale of loans

 

 

1,882

 

 

 

2,188

 

 

 

-14.0

%

 

 

1,155

 

 

 

62.9

%

Other income

 

 

279

 

 

 

554

 

 

 

-49.6

%

 

 

381

 

 

 

-26.8

%

Total noninterest income

 

 

2,966

 

 

 

3,392

 

 

 

-12.6

%

 

 

2,296

 

 

 

29.2

%

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,662

 

 

 

5,536

 

 

 

-15.8

%

 

 

5,071

 

 

 

-8.1

%

Occupancy and equipment

 

 

1,235

 

 

 

1,237

 

 

 

-0.2

%

 

 

1,230

 

 

 

0.4

%

Data processing and communication

 

 

448

 

 

 

435

 

 

 

3.0

%

 

 

409

 

 

 

9.5

%

Professional fees

 

 

314

 

 

 

265

 

 

 

18.5

%

 

 

273

 

 

 

15.0

%

FDIC insurance and regulatory assessments

 

 

132

 

 

 

115

 

 

 

14.8

%

 

 

106

 

 

 

24.5

%

Promotion and advertising

 

 

177

 

 

 

62

 

 

 

185.5

%

 

 

162

 

 

 

9.3

%

Directors’ fees

 

 

116

 

 

 

97

 

 

 

19.6

%

 

 

233

 

 

 

-50.2

%

Foundation donation and other contributions

 

 

507

 

 

 

400

 

 

 

26.8

%

 

 

330

 

 

 

53.6

%

Other expenses

 

 

375

 

 

 

265

 

 

 

41.5

%

 

 

393

 

 

 

-4.6

%

Total noninterest expense

 

 

7,966

 

 

 

8,412

 

 

 

-5.3

%

 

 

8,207

 

 

 

-2.9

%

Income before income taxes

 

 

7,135

 

 

 

5,330

 

 

 

33.9

%

 

 

4,462

 

 

 

59.9

%

Provision for income taxes

 

 

2,058

 

 

 

1,513

 

 

 

36.0

%

 

 

1,163

 

 

 

77.0

%

Net income

 

$

5,077

 

 

$

3,817

 

 

 

33.0

%

 

$

3,299

 

 

 

53.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

9.77

 

 

$

9.55

 

 

 

2.3

%

 

$

9.14

 

 

 

6.9

%

Basic EPS

 

$

0.33

 

 

$

0.25

 

 

 

32.0

%

 

$

0.21

 

 

 

57.1

%

Diluted EPS

 

$

0.33

 

 

$

0.25

 

 

 

32.0

%

 

$

0.21

 

 

 

57.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding

 

 

15,037,635

 

 

 

15,016,700

 

 

 

0.1

%

 

 

15,115,868

 

 

 

-0.5

%

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

15,022,876

 

 

 

15,079,407

 

 

 

-0.4

%

 

 

15,486,549

 

 

 

-3.0

%

- Diluted

 

 

15,069,444

 

 

 

15,103,029

 

 

 

-0.2

%

 

 

15,586,255

 

 

 

-3.3

%

Key Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except ratios)

 

Three Months Ended

 

 

 

3/31/2021

 

 

12/31/2020

 

 

% change

 

 

3/31/2020

 

 

% change

 

Return on average assets (ROA)*

 

 

1.44

%

 

 

1.13

%

 

 

0.31

%

 

 

1.12

%

 

 

0.32

%

Return on average equity (ROE)*

 

 

14.02

%

 

 

10.72

%

 

 

3.30

%

 

 

9.44

%

 

 

4.58

%

Net interest margin *

 

 

3.80

%

 

 

3.73

%

 

 

0.07

%

 

 

3.95

%

 

 

-0.15

%

Efficiency ratio

 

 

50.67

%

 

 

54.02

%

 

 

-3.35

%

 

 

61.19

%

 

 

-10.52

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

 

15.04

%

 

 

14.81

%

 

 

0.23

%

 

 

14.78

%

 

 

0.26

%

Tier 1 risk-based capital ratio

 

 

13.79

%

 

 

13.56

%

 

 

0.23

%

 

 

13.69

%

 

 

0.10

%

Common equity tier 1 ratio

 

 

13.79

%

 

 

13.56

%

 

 

0.23

%

 

 

13.69

%

 

 

0.10

%

Leverage ratio

 

 

10.38

%

 

 

10.55

%

 

 

-0.17

%

 

 

11.59

%

 

 

-1.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except ratios)

 

Three Months Ended

 

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

 

6/30/2020

 

 

3/31/2020

 

Nonaccrual Loans

 

$

1,148

 

 

$

985

 

 

$

-

 

 

$

689

 

 

$

1,203

 

Loans 90 days or more past due, accruing

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Accruing restructured loans

 

 

-

 

 

 

-

 

 

 

330

 

 

 

330

 

 

 

330

 

Nonperforming loans

 

 

1,148

 

 

 

985

 

 

 

330

 

 

 

1,019

 

 

 

1,533

 

Other real estate owned (OREO)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Nonperforming assets

 

 

1,148

 

 

 

985

 

 

 

330

 

 

 

1,019

 

 

 

1,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified loans

 

 

6,586

 

 

 

7,325

 

 

 

2,102

 

 

 

2,810

 

 

 

3,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets/total assets

 

 

0.08

%

 

 

0.07

%

 

 

0.02

%

 

 

0.08

%

 

 

0.13

%

Nonperforming assets/gross loans plus OREO

 

 

0.10

%

 

 

0.09

%

 

 

0.03

%

 

 

0.10

%

 

 

0.15

%

Nonperforming loans/gross loans

 

 

0.10

%

 

 

0.09

%

 

 

0.03

%

 

 

0.10

%

 

 

0.15

%

Allowance for loan losses/nonperforming loans

 

 

1,337

%

 

 

1,558

%

 

 

4,295

%

 

 

1,252

%

 

 

701

%

Allowance for loan losses/nonperforming assets

 

 

1,337

%

 

 

1,558

%

 

 

4,295

%

 

 

1,252

%

 

 

701

%

Allowance for loan losses/gross loans

 

 

1.33

%

 

 

1.40

%

 

 

1.32

%

 

 

1.22

%

 

 

1.08

%

Classified loans/gross loans

 

 

0.57

%

 

 

0.67

%

 

 

0.20

%

 

 

0.27

%

 

 

0.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs(recoveries)

 

$

(3

)

 

$

-

 

 

$

-

 

 

$

(28

)

 

$

45

 

Net charge-offs(recoveries) to average gross loans *

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

-0.01

%

 

 

0.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing delinquent loans 30-89 days past due

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

 

6/30/2020

 

 

3/31/2020

 

30-59 days

 

$

-

 

 

$

-

 

 

$

600

 

 

$

565

 

 

$

1,788

 

60-89 days

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,277

 

Total

 

 

-

 

 

 

-

 

 

 

600

 

 

 

565

 

 

 

4,065

 

Average Balance Sheet, Interest and Yield/Rate Analysis

 

(Dollars in thousands)

 

Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

 

 

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

 

$

99,349

 

 

$

112

 

 

 

0.45

%

 

$

92,774

 

 

$

112

 

 

 

0.48

%

 

$

78,256

 

 

$

332

 

 

 

1.68

%

Securities available for sale

 

 

92,951

 

 

 

236

 

 

 

1.02

 

 

 

93,238

 

 

 

257

 

 

 

1.10

 

 

 

54,647

 

 

 

319

 

 

 

2.33

 

Total investments

 

 

192,300

 

 

 

348

 

 

 

0.72

 

 

 

186,012

 

 

 

369

 

 

 

0.79

 

 

 

132,903

 

 

 

651

 

 

 

1.95

 

Real estate loans

 

 

653,498

 

 

 

7,466

 

 

 

4.63

 

 

 

644,643

 

 

 

7,457

 

 

 

4.60

 

 

 

633,963

 

 

 

8,198

 

 

 

5.20

 

SBA loans

 

 

268,440

 

 

 

3,280

 

 

 

4.95

 

 

 

251,541

 

 

 

3,231

 

 

 

5.11

 

 

 

138,900

 

 

 

2,667

 

 

 

7.72

 

C & I loans

 

 

116,327

 

 

 

1,072

 

 

 

3.74

 

 

 

90,618

 

 

 

843

 

 

 

3.70

 

 

 

100,686

 

 

 

1,277

 

 

 

5.10

 

Home mortgage loans

 

 

125,698

 

 

 

1,451

 

 

 

4.62

 

 

 

124,763

 

 

 

1,456

 

 

 

4.67

 

 

 

121,768

 

 

 

1,514

 

 

 

4.97

 

Consumer & other loans

 

 

1,187

 

 

 

15

 

 

 

5.12

 

 

 

1,325

 

 

 

19

 

 

 

5.70

 

 

 

2,774

 

 

 

38

 

 

 

5.51

 

Loans (1)

 

 

1,165,150

 

 

 

13,284

 

 

 

4.62

 

 

 

1,112,890

 

 

 

13,006

 

 

 

4.65

 

 

 

998,091

 

 

 

13,694

 

 

 

5.51

 

Total interest-earning assets

 

 

1,357,450

 

 

 

13,632

 

 

 

4.07

 

 

 

1,298,902

 

 

 

13,375

 

 

 

4.10

 

 

 

1,130,994

 

 

 

14,345

 

 

 

5.10

 

Noninterest-earning assets

 

 

52,376

 

 

 

 

 

 

 

 

 

 

 

49,123

 

 

 

 

 

 

 

 

 

 

 

48,188

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,409,826

 

 

 

 

 

 

 

 

 

 

$

1,348,025

 

 

 

 

 

 

 

 

 

 

$

1,179,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market deposits and others

 

$

336,796

 

 

 

270

 

 

 

0.33

%

 

$

328,044

 

 

 

340

 

 

 

0.41

%

 

$

297,202

 

 

 

957

 

 

 

1.29

%

Time deposits

 

 

361,803

 

 

 

607

 

 

 

0.68

 

 

 

344,139

 

 

 

854

 

 

 

0.99

 

 

 

431,772

 

 

 

2,272

 

 

 

2.12

 

Total interest-bearing deposits

 

 

698,599

 

 

 

877

 

 

 

0.51

 

 

 

672,183

 

 

 

1,194

 

 

 

0.71

 

 

 

728,974

 

 

 

3,229

 

 

 

1.78

 

Borrowings

 

 

5,000

 

 

 

-

 

 

 

-

 

 

 

7,938

 

 

 

-

 

 

 

-

 

 

 

45

 

 

 

-

 

 

 

-

 

Total interest-bearing liabilities

 

 

703,599

 

 

 

877

 

 

 

0.51

 

 

 

680,121

 

 

 

1,194

 

 

 

0.70

 

 

 

729,019

 

 

 

3,229

 

 

 

1.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

544,492

 

 

 

 

 

 

 

 

 

 

 

507,694

 

 

 

 

 

 

 

 

 

 

 

292,453

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

16,865

 

 

 

 

 

 

 

 

 

 

 

17,769

 

 

 

 

 

 

 

 

 

 

 

17,921

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

561,357

 

 

 

 

 

 

 

 

 

 

 

525,463

 

 

 

 

 

 

 

 

 

 

 

310,374

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

144,870

 

 

 

 

 

 

 

 

 

 

 

142,441

 

 

 

 

 

 

 

 

 

 

 

139,789

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,409,826

 

 

 

 

 

 

 

 

 

 

$

1,348,025

 

 

 

 

 

 

 

 

 

 

$

1,179,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

12,755

 

 

 

3.56

%

 

 

 

 

 

$

12,181

 

 

 

3.40

%

 

 

 

 

 

$

11,116

 

 

 

3.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.80

%

 

 

 

 

 

 

 

 

 

 

3.73

%

 

 

 

 

 

 

 

 

 

 

3.95

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of deposits & cost of funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits / cost of deposits

 

$

1,243,091

 

 

$

877

 

 

 

0.29

%

 

$

1,179,877

 

 

$

1,194

 

 

 

0.40

%

 

$

1,021,427

 

 

$

3,229

 

 

 

1.27

%

Total funding liabilities / cost of funds

 

$

1,248,091

 

 

$

877

 

 

 

0.28

%

 

$

1,187,815

 

 

$

1,194

 

 

 

0.40

%

 

$

1,021,472

 

 

$

3,229

 

 

 

1.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Breakdown by Industry

 

Excluding home mortgage and consumer loans

 

 

 

(Dollars in thousands)

 

As of March 31, 2021

 

Industry

 

Number of

accounts

 

 

% of total

 

 

Balance

 

 

% of total

 

Hotel / motel

 

 

225

 

 

 

7.5

%

 

$

150,375

 

 

 

14.1

%

Wholesale

 

 

375

 

 

 

12.4

 

 

 

77,331

 

 

 

7.2

 

Food services / restaurant

 

 

432

 

 

 

14.3

 

 

 

62,716

 

 

 

5.9

 

Laundry services

 

 

152

 

 

 

5.0

 

 

 

21,196

 

 

 

2.0

 

Real estate lessor

 

 

240

 

 

 

8.0

 

 

 

396,092

 

 

 

37.1

 

Car washes

 

 

52

 

 

 

1.7

 

 

 

36,459

 

 

 

3.4

 

Educational service

 

 

32

 

 

 

1.1

 

 

 

7,166

 

 

 

0.7

 

Other

 

 

1,505

 

 

 

50.0

 

 

 

315,396

 

 

 

29.6

 

Total

 

 

3,013

 

 

 

100.0

%

 

$

1,066,731

 

 

 

100.0

%

Loan Deferment Summary by Industry

 

As of March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding home mortgage and consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Number of accounts

 

 

Loan balance

 

Industry

 

Number of

accounts

 

 

% of

deferment

 

 

% of

total loans

 

 

Balance

 

 

% of

deferment

 

 

% of

total loans

 

Hotel / motel

 

 

6

 

 

 

66.7

%

 

 

2.7

%

 

$

15,188

 

 

 

93.6

%

 

 

10.1

%

Wholesale

 

 

1

 

 

 

11.1

 

 

 

0.3

 

 

 

486

 

 

 

3.0

 

 

 

0.6

 

Food services / restaurant

 

 

1

 

 

 

11.1

 

 

 

0.2

 

 

 

465

 

 

 

2.9

 

 

 

0.7

 

Laundry services

 

 

1

 

 

 

11.1

 

 

 

0.7

 

 

 

90

 

 

 

0.6

 

 

 

0.4

 

Total

 

 

9

 

 

 

100.0

%

 

 

0.3

%

 

$

16,229

 

 

 

100.0

%

 

 

1.5

%

Loan Deferment Summary by Loan Type

 

As of March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Number of accounts

 

 

Loan balance

 

Loan Type

 

Number of

accounts

 

 

% of

deferment

 

 

% of

total loans

 

 

Balance

 

 

% of

deferment

 

 

% of

total loans

 

Real estate loans

 

 

6

 

 

 

42.9

%

 

 

1.7

%

 

$

15,188

 

 

 

80.0

%

 

 

2.3

%

C & I loans

 

 

3

 

 

 

21.4

 

 

 

1.3

 

 

 

1,041

 

 

 

5.5

 

 

 

1.0

 

Loans, excluding home mortgage and consumer loans

 

 

9

 

 

 

64.3

 

 

 

0.3

 

 

 

16,229

 

 

 

85.5

 

 

 

1.5

 

Home mortgage loans

 

 

5

 

 

 

35.7

 

 

 

1.6

 

 

 

2,761

 

 

 

14.5

 

 

 

2.2

 

Total

 

 

14

 

 

 

100.0

%

 

 

0.4

%

 

$

18,990

 

 

 

100.0

%

 

 

1.6

%

Loan Deferment Status Change by Loan Type

 

 

Total deferments

 

 

Payment resumed

 

 

 

 

 

 

 

 

 

 

under the CARES Act

 

 

or paid off

 

 

Remaining deferments

(Dollars in thousands)

 

through March 31, 2021

 

 

through March 31, 2021

 

 

as of March 31, 2021

Loan Type

 

Number

of accounts

 

 

Balance

 

 

Number

of accounts

 

 

Balance

 

 

Number

of accounts

 

 

Balance

Loans, excluding home mortgage and consumer loans

 

 

116

 

 

 

206,582

 

 

 

107

 

 

 

190,353

 

 

 

9

 

 

 

16,229

Home mortgage loans

 

 

69

 

 

 

30,205

 

 

 

64

 

 

 

27,444

 

 

 

5

 

 

 

2,761

Total

 

 

185

 

 

$

236,787

 

 

 

171

 

 

$

217,797

 

 

 

14

 

 

$

18,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Source: OP Bancorp



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