opbk-20220425
0001722010False00017220102022-04-252022-04-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
FORM 8-K
____________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 25, 2022
____________________________________
OP BANCORP
(Exact name of registrant as specified in its charter)
____________________________________
California001-3843781-3114676
(State or other jurisdiction of incorporation)
(Commission File Number)(IRS Employer Identification No.)
1000 Wilshire Blvd., Suite 500, Los Angeles, CA
90017
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (213) 892-9999

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valueOPBK
NASDAQ Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒


Item 2.02.    Results of Operations and Financial Condition
On April 28, 2022, OP Bancorp, (the “Company”), the holding company of Open Bank, issued a press release announcing preliminary unaudited results for the first quarter ended March 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by reference. Also attached as Exhibit 99.3 is a slide deck presentation for the results for the first quarter.
The information in this report set forth under this Item 2.02 shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Securities Act of 1934, except as expressly stated by specific reference in such filing.
Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 27, 2022, the Company was informed of the death of director Jason Hwang, who passed away on April 25, 2022. Mr. Hwang served as a director since the founding of Open Bank in 2005 and will be greatly missed. His seat on the Board of Directors will remain vacant while the Board considers whether to appoint a new director or reduce the size of the Board.
Item 8.01.    Other Events
On April 28, 2022, the Company also announced that its Board of Directors declared a quarterly cash dividend of $0.10 per common share. The cash dividend is payable on or about May 26, 2022 to all shareholders of record as of the close of business on May 12, 2022. A copy of the press release is attached hereto as Exhibit 99.2.
Item 9.01.    Financial Statements and Exhibits
(d)    Exhibits.
Exhibit NumberExhibit Description
99.1
99.2
99.3
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
OP Bancorp
Dated: April 29, 2022By:/s/ Christine Oh
Christine Oh
Executive Vice President and
Chief Financial Officer
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Exhibit 99.1
OP BANCORP REPORTS NET INCOME FOR FIRST QUARTER 2022
OF $8.2 MILLION AND DILUTED EARNINGS PER SHARE OF $0.53

2022 First Quarter Highlights compared with 2021 First Quarter:
•Financial Results:
◦Net income of $8.2 million, up $3.1 million, or 61%
◦Diluted earnings per share of $0.53, up $0.20, or 61%
◦Net interest income of $17.3 million, up $4.5 million, or 36%
◦Provision for loan losses of $341 thousand, down $279 thousand, or 45%
◦Noninterest income of $4.2 million, up $1.3 million, or 42%
◦Noninterest expense of $9.7 million, up $1.7 million, or 21%
◦Pre-provision net revenue (1) of $11.8 million, up $4.1 million, or 53%
◦Total assets of $1.86 billion, up $409 million, or 28%
◦Total loans (2) of $1.51 billion, up $330 million, or 28%; Average loans (2) of $1.44 billion, up $278.9 million, or 24%
◦Total deposits of $1.67 billion, up $387 million, or 30%; Average deposits of $1.57 billion, up $327.3 million, or 26%
◦Noninterest-bearing deposits to total deposits of 51%, up from 45%
◦Net interest margin of 4.12%, up from 3.80%
◦Return on average equity of 19.54%, up from 14.02%
◦Return on average assets of 1.85%, up from 1.44%
◦Efficiency ratio of 44.93%, an improvement from 50.67%
•Credit Quality:
◦Allowance for loan losses to gross loans of 1.17%, compared to 1.33%
◦Adjusted allowance to gross loans (1) of 1.24%, compared to 1.59%
◦Net loan recoveries to average gross loans of 0.00%
◦Nonperforming loans to gross loans of 0.20%, compared to 0.10%
◦Criticized loans (3) to gross loans of 0.27%, down from 0.62%
•Capital Levels:
◦Quarterly cash dividend of $0.10 per share, a 43% increase from $0.07 per share
◦Capital position well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 12.11%.
◦Book value per common share of $10.97, up 12%
___________________________________________________________
(1)    See reconciliation of GAAP to non-GAAP financial measures.
(2)     Includes loans held for sale.
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(3)     Includes special mention, substandard, doubtful, and loss categories.
LOS ANGELES, April 28, 2022 — OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank, today reported its financial results for the first quarter of 2022. Net income for the first quarter of 2022 was $8.2 million, or $0.53 per diluted common share, compared with $9.1 million, or $0.59 per diluted common share, for the fourth quarter of 2021, and $5.1 million, or $0.33 per diluted common share, for the first quarter of 2021.
Min Kim, President and Chief Executive Officer:
“We started this year with another strong quarter. Our net income and diluted earnings per share increased 61% each from a year ago. This growth in earnings was driven by strong growth in our balance sheet, expanded net interest margin, and improved efficiency. Our loans grew 28%, from a year ago, through balanced increases across all categories, further diversifying our loan portfolio. Total deposits grew 30% from a year ago with noninterest-bearing deposits reaching a record level at 50.8% of total deposits. We also expanded our branch network by opening our tenth full service branch in Cerritos, California during the quarter. We remain optimistic about our future growth and sustainability of our strong financial performance.”

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SELECTED FINANCIAL HIGHLIGHTS

($ in thousands, except per share data)As of and For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Selected Income Statement Data:
Net interest income$17,290 $17,096 $12,755 1.1 %35.6 %
Provision for loan losses341 1,898 620 (82.0)(45.0)
Noninterest income4,216 7,289 2,966 (42.2)42.1 
Noninterest expense9,662 9,591 7,966 0.7 21.3 
Income tax expense3,351 3,762 2,058 (10.9)62.8 
Net Income$8,152 $9,134 $5,077 (10.8)%60.6 %
Diluted earnings per share$0.53 $0.59 $0.33 (10.2)%60.6 %
Selected Balance Sheet Data:
Total loans (1)$1,514,653 $1,403,447 $1,184,447 7.9 %27.9 %
Total deposits$1,672,003 $1,534,066 $1,285,390 9.0 %30.1 %
Total assets$1,863,945 $1,726,691 $1,455,334 7.9 %28.1 %
Average loans (1)$1,444,054 $1,343,414 $1,165,150 7.5 %23.9 %
Average deposits$1,570,376 $1,545,799 $1,243,091 1.6 %26.3 %
Credit Quality:
Nonperforming loans$2,806 $3,200 $1,148 (12.3)%144.4 %
Net (recoveries) charge-offs to average gross loans (2)(0.00)%0.05 %(0.00)%(0.05)%0.00 %
Allowance for loan losses to gross loans1.17 %1.23 %1.33 %(0.06)%(0.16)%
Financial Ratios:
Return on average assets (2)1.85 %2.11 %1.44 %(0.26)%0.41 %
Return on average equity (2)19.54 %22.72 %14.02 %(3.18)%5.52 %
Net interest margin (2)4.12 %4.07 %3.80 %0.05 %0.32 %
Common equity tier 1 capital ratio12.11 %12.42 %13.79 %(0.31)%(1.68)%
Leverage ratio9.80 %9.58 %10.38 %0.22 %(0.58)%
Efficiency ratio (3)44.93 %39.34 %50.67 %5.59 %(5.74)%
Book value per common share$10.97 $10.92 $9.77 0.5 %12.3 %
(1)Includes loans held for sale.
(2)Annualized.
(3)Represents noninterest expense divided by the sum of net interest income and noninterest income.

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INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin

($ in thousands)For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Interest Income
Interest income$17,944 $17,822 $13,632 0.7 %31.6 %
Interest expense654 726 877 (9.9)(25.4)
Net interest income$17,290 $17,096 $12,755 1.1 %35.6 %

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Average BalanceInterest
and Fees		Yield/Rate (1)Average BalanceInterest
and Fees		Yield/Rate (1)Average BalanceInterest
and Fees		Yield/Rate (1)
Interest-earning Assets
Loans$1,444,054 $17,257 4.84 %$1,343,414 $17,271 5.10 %$1,165,150 $13,284 4.62 %
Total interest-earning assets$1,698,799 $17,944 4.28 %$1,668,865 $17,822 4.24 %$1,358,119 $13,632 4.07 %
Interest-bearing Liabilities
Interest-bearing deposits$786,915 $654 0.34 %$780,787 $726 0.37 %$698,599 $877 0.51 %
Total interest-bearing liabilities$786,915 $654 0.34 %$780,791 $726 0.37 %$703,599 $877 0.51 %
Ratios
Net interest Income/interest rate spreads$17,290 3.94 %$17,096 3.87 %$12,755 3.56 %
Net interest margin4.12 %4.07 %3.80 %
Total deposits / cost of deposits$1,570,376 $654 0.17 %$1,545,799 $726 0.19 %$1,243,091 $877 0.29 %
Total funding liabilities / cost of funds$1,570,376 $654 0.17 %$1,545,803 $726 0.19 %$1,248,091 $877 0.28 %
(1)Annualized.

($ in thousands)For the Three Months EndedYield % Change 1Q22 vs.
1Q224Q211Q21
Interest
& Fees		Yield (1)Interest
& Fees		Yield (1)Interest
& Fees		Yield (1)4Q211Q21
Loan Yield Component
Contractual interest rate$15,120 4.24 %$14,509 4.29 %$12,168 4.23 %(0.05)%0.01 %
SBA discount accretion1,433 0.40 1,571 0.46 507 0.18 (0.06)0.22 
Amortization of net deferred fees500 0.14 1,087 0.32 538 0.19 (0.18)(0.05)
Amortization of premium16 — 3 — — — 0.00 — 
Net interest recognized on nonaccrual loans34 -0.01 (16)-0.00 (2)— 0.01 0.01 
Prepayment penalties (2) and other fees154 0.05 117 0.03 73 0.02 0.02 0.03 
Yield on loans$17,257 4.84 %$17,271 5.10 %$13,284 4.62 %(0.26)%0.22 %
Amortization of net deferred fees:
PPP loan forgiveness (3)$483 0.13 %$920 0.27 %$175 0.06 %(0.14)%0.07 %
Other17 0.01 167 0.05 363 0.13 (0.04)(0.12)
Total amortization of net deferred fees$500 0.14 %$1,087 0.32 %$538 0.19 %(0.18)%(0.05)%
(1)Annualized.
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(2)Prepayment penalty income of $95 thousand, $84 thousand and $69 thousand for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively, was from commercial real estate and C&I loans.
(3)As of March 31, 2022, there were unamortized net deferred fees of $579 thousand to be recognized over the estimated life of the loans as a yield adjustment on the loans.

Impact of Hana Loan Purchase on Average Loan Yield and Net Interest Margin

During the second quarter of 2021, the Company purchased an SBA portfolio of 638 loans with an ending balance of $100.0 million, excluding loan discount of $8.9 million from Hana Small Business Lending, Inc. (“Hana”). The following table presents impacts of the Hana loan purchase on average loan yield and net interest margin:

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Hana Loan Purchase:
Contractual interest rate$976 $1,027 $— 
Purchased loan discount accretion772 826 — 
Other fees7 10 — 
Total interest income$1,755 $1,863 $— 
Effect on average loan yield (1)0.26 %0.26 %— %
Effect on net interest margin (1)0.25 %0.26 %— %

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Average
Balance		Interest
and Fees		Yield/
Rate		Average
Balance		Interest
and Fees		Yield/
Rate		Average
Balance		Interest
and Fees		Yield/
Rate
Average loan yield (1)$1,444,054 $17,257 4.84 %$1,343,414 $17,271 5.10 %$1,165,150 $13,284 4.62 %
Adjusted average loan yield excluding purchased loans (1)(2)$1,369,423 $15,502 4.58 %$1,263,789 $15,408 4.84 %$1,165,150 $13,284 4.62 %
Net interest margin (1)$1,698,799 $17,290 4.12 %$1,668,865 $17,096 4.07 %$1,358,119 $12,755 3.80 %
Adjusted interest margin excluding purchased loans (1)(2)$1,624,168 $15,535 3.87 %$1,589,240 $15,233 3.81 %$1,358,119 $12,755 3.80 %
(1)Annualized.
(2)See reconciliation of GAAP to non-GAAP financial measures.

First Quarter 2022 vs. Fourth Quarter 2021
Net interest income increased $194 thousand, or 1.1%, primarily due to higher interest income on securities available-for-sale. Net interest margin was 4.12%, an increase of 5 basis points from 4.07%.
◦An increase of $168 thousand in interest income from securities available-for-sale was primarily due to higher average balance.
◦An increase of $754 thousand in interest income on home mortgage loans from an $81.6 million purchase was offset by a $714 thousand decrease in interest income on PPP loans from lower average balance.
◦A $72 thousand decrease in interest expense contributed to the increase in net interest income.
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◦Average loan yield was 4.84%, a decrease of 26 basis points from 5.10%, primarily due to lower interest income in PPP loans. Average yield on interest earning assets was 4.28%, an increase of 4 basis points from 4.24%, due to lower average balance in low-yielding interest-bearing deposits in other banks.
◦Average cost of deposits was 0.17%, a decrease of 2 basis points from 0.19%.

First Quarter 2022 vs. First Quarter 2021
Net interest income increased $4.5 million, or 35.6%, primarily due to higher interest income on loans. Net interest margin was 4.12%, an increase of 32 basis points from 3.80%.
◦An increase of $4.0 million in interest income on loans was primarily due to higher average loan balance from loan growth in home loans and C&I loans, discount accretions from the Hana loan purchase, and loan fees from PPP loan forgiveness.
◦The improvement of 32 basis points in net interest margin was primarily driven by a 22 basis point increase in average loan yield and a 17 basis point decrease in average cost of interest-bearing liabilities.
Provision for loan losses
First Quarter 2022 vs. Fourth Quarter 2021
The Company recorded $341 thousand provision for loan losses, compared with a $1.9 million provision for loan losses. The $341 thousand provision for loan losses was primarily due to loan growth from home mortgage purchases, partially offset by improvements in qualitative assessments of our loan portfolio.

First Quarter 2022 vs. First Quarter 2021
The Company recorded $341 thousand provision for loan losses, compared with $620 thousand provision for loan losses.

Noninterest Income

($ in thousands)For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Noninterest income
Service charges on deposits$388 $405 $355 (4.2)%9.3 %
Loan servicing fees, net of amortization447 521 531 (14.2)(15.8)
Gain on sale of loans3,238 6,033 1,882 (46.3)72.1 
Other income143 330 198 (56.7)(27.8)
Total noninterest income$4,216 $7,289 $2,966 (42.2)%42.1 %
First Quarter 2022 vs. Fourth Quarter 2021
Noninterest income decreased $3.1 million, or 42.2%, primarily due to lower gains on sale of loans.
◦Gains on sale of loans were $3.2 million, down $2.8 million from the fourth quarter of 2021. The decrease was primarily due to a decreased loan sales volume. The Company sold $31.8 million in
6

SBA loans at an average premium of 11.02%, compared to the sale of $56.8 million at an average premium of 10.98%.

First Quarter 2022 vs. First Quarter 2021
Noninterest income increased $1.3 million, or 42.1%, primarily due to higher gains on sale of loans.
◦Gains on sales of loans were $3.2 million, up $1.4 million from the first quarter of 2021. The increase was mainly driven by higher sales volume and premiums on SBA loans. The Company sold $31.8 million in SBA loans at an average premium of 11.02%, compared to the sale of $22.4 million at an average premium of 10.51%.

Noninterest Expense

($ in thousands)For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Noninterest expense
Salaries and employee benefits$5,657 $5,560 $4,662 1.7 %21.3 %
Occupancy and equipment1,378 1,418 1,235 (2.8)11.6 
Data processing and communication493 637 448 (22.6)10.0 
Professional fees324 267 314 21.3 3.2 
FDIC insurance and regulatory assessments207 182 132 13.7 56.8 
Promotion and advertising189 156 177 21.2 6.8 
Directors’ fees177 166 116 6.6 52.6 
Foundation donation and other contributions815 901 507 (9.5)60.7 
Other expenses422 304 375 38.8 12.5 
Total noninterest expense$9,662 $9,591 $7,966 0.7 %21.3 %

First Quarter 2022 vs. Fourth Quarter 2021
Noninterest expense remained relatively stable in the first quarter of 2022 at $9.7 million compared to $9.6 million for the fourth quarter of 2021.
First Quarter 2022 vs. First Quarter 2021
Noninterest expense increased $1.7 million, or 21.3%, primarily due to higher salaries and employee benefits, and foundation donation and other contributions.
◦Salaries and employee benefits were $5.7 million, up $995 thousand from the first quarter of 2021. The increase was primarily due to a decrease in deferred loan origination costs compared to higher origination costs related to PPP loans for the first quarter of 2021.
◦Foundation donation and other contributions were $815 thousand, up $308 thousand from the first quarter of 2021. The increase was primarily due to higher donation accruals for Open Stewardship Foundation as a result of higher net income compared to the first quarter of 2021.
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Income Tax Expense
First Quarter 2022 vs. Fourth Quarter 2021
Income tax expense was $3.4 million, and the effective tax rate was 29.1%, compared to income tax expense of $3.8 million and the effective rate of 29.2% for the fourth quarter of 2021.
First Quarter 2022 vs. First Quarter 2021

Income tax expense was $3.4 million and the effective tax rate was 29.1%, compared to income tax expense of $2.1 million and the effective rate of 28.8% for the first quarter of 2021.

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Balance Sheet Highlights

Loans

($ in thousands)As of% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Real estate loans$730,841 $701,450 $662,445 4.2 %10.3 %
SBA loans (1)253,064 275,858 263,185 (8.3)(3.8)
C&I loans176,934 162,543 103,883 8.9 70.3 
Home mortgage loans266,465 173,303 125,285 53.8 112.7 
Consumer & other loans1,106 865 1,074 27.9 3.0 
Gross loans$1,428,410 $1,314,019 $1,155,872 8.7 %23.6 %
(1)Includes PPP loans of $22.1 million, $40.6 million and $113.6 million as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

The following table presents new loan originations based on loan commitment amounts for the periods indicated:

($ in thousands)For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Real estate loans$49,868 $35,458 $42,748 40.6 %16.7 %
SBA loans (1)37,400 65,492 105,340 (42.9)(64.5)
C&I loans11,876 47,981 9,505 (75.2)24.9 
Home mortgage loans22,785 19,295 11,563 18.1 97.1 
Gross loans$121,929 $168,226 $169,156 (27.5)%(27.9)%
(1)Includes PPP loans of $74.2 million for the three months ended March 31, 2021.

The following table presents changes in gross loans by loan activity for the periods indicated:

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Loan activities:
Gross loans, beginning$1,314,019 $1,231,821 $1,099,736 
New originations121,929 168,226 169,156 
Net line advances17,455 7,759 (11,846)
Purchases81,552 48,915 — 
Sales(31,819)(60,954)(26,621)
Paydowns(15,972)(12,373)(12,767)
Payoffs(45,391)(46,778)(36,987)
PPP Payoffs(19,079)(29,918)(22,886)
Other5,716 7,321 (1,913)
Total114,391 82,198 56,136 
Gross loans, ending$1,428,410 $1,314,019 $1,155,872 

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First Quarter 2022 vs. Fourth Quarter 2021

Gross loans were $1.43 billion at March 31, 2022, up $114.4 million from December 31, 2021, primarily due to home mortgage loan purchases.

$81.6 million of home mortgage loans were purchased from third party mortgage originators, compared to $48.9 million in the fourth quarter of 2021. New loan originations and loan payoffs were $121.9 million and $64.5 million for the first quarter of 2022, compared with $168.2 million and $76.7 million for the fourth quarter of 2021, respectively. Of the PPP loans, $18.2 million in principal amount has been forgiven under the program, compared to a $29.9 million of PPP loans forgiven in the fourth quarter of 2021.
First Quarter 2022 vs. First Quarter 2021

Gross loans were $1.43 billion at March 31, 2022, up $272.5 million from March 31, 2021, primarily due to the Hana loan purchase, home mortgage loan purchases, and warehouse credit lines.

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The following table presents the composition of gross loans by interest rate type accompanied with the weighted average contractual rates as of the periods indicated:

($ in thousands)As of
1Q224Q211Q21
%Rate%Rate%Rate
Fixed rate33.3 %4.11 %31.5 %4.12 %37.3 %3.83 %
Hybrid rate25.6 4.30 22.8 4.45 21.9 4.84 
Variable rate41.1 5.09 45.7 4.94 40.8 4.43 
Gross loans100.0 %4.56 %100.0 %4.57 %100.0 %4.30 %

The following table presents the maturity of gross loans by interest rate type accompanied with the weighted average contractual rates for the periods indicated:

($ in thousands)As of March 31, 2022
Within One YearOne Year Through Five YearsAfter Five YearsTotal
AmountRateAmountRateAmountRateAmountRate
Fixed rate$24,040 4.18 %$299,952 4.18 %$150,671 3.98 %$474,663 4.11 %
Hybrid rate26,469 3.29 43,409 5.29 296,224 4.25 366,102 4.30 
Variable rate124,934 4.18 165,770 4.19 296,941 5.97 587,645 5.09 
Gross loans$175,443 4.05 %$509,131 4.28 %$743,836 4.88 %$1,428,410 4.56 %
Deposits

($ in thousands)As of% Change 1Q22 vs.
1Q224Q211Q21
Amount%Amount%Amount%4Q211Q21
Noninterest-bearing deposits$848,531 50.8 %$774,754 50.5 %$571,985 44.5 %9.5 %48.3 %
Money market deposits and others456,890 27.3 %380,226 24.8 354,148 27.6 %20.2 29.0 
Time deposits366,582 21.9 %379,086 24.7 359,257 27.9 %(3.3)2.0 
Total deposits$1,672,003 100.0 %$1,534,066 100.0 %$1,285,390 100.0 %9.0 %30.1 %
First Quarter 2022 vs. Fourth Quarter 2021

Total deposits were $1.67 billion at March 31, 2022, up $137.9 million from December 31, 2021, primarily driven by growth in noninterest-bearing and money market deposits, partially offset by time deposits. Noninterest-bearing deposits reached a record $848.5 million or 50.8% of total deposits as of March 31, 2022, an increase from $774.8 million or 50.5% of total deposits as of December 31, 2021. The growth in noninterest-bearing deposits was primarily due to addition of new customers from our Specialty Deposit Center, which was added during the fourth quarter of 2021.
First Quarter 2022 vs. First Quarter 2021

Total deposits were $1.67 billion at March 31, 2022, an increase of $386.6 million from March 31, 2021, primarily driven by growth in noninterest-bearing deposits. Noninterest-bearing deposits
11

were $848.5 million or 50.8% of total deposits, an increase from $572.0 million or 44.5% of total deposits as of March 31, 2021. The growth in noninterest-bearing deposits was driven by continued customer preferences for liquidity given the sustained economic uncertainty and deposit growth from our Specialty Deposit Center.

The following table sets forth the maturity of time deposits as of March 31, 2022:

As of March 31, 2022
($ in thousands)Within Three
Months		Three to
Six Months		Six to Nine MonthsNine to Twelve
Months		After
Twelve Months		Total
Time deposits (more than $250,000)$92,471 $41,573 $30,629 $27,137 $1,039 $192,849 
Time deposits ($250,000 or less)64,166 42,975 31,826 28,209 6,557 173,733 
Total time deposits$156,637 $84,548 $62,455 $55,346 $7,596 $366,582 
Weighted average rate0.37 %0.51 %0.45 %0.43 %1.37 %0.45 %

12

Capital and Cash Dividend

Basel III
OP BancorpOpen BankWell
Capitalized
Ratio		Minimum
Capital Ratio+
Conservation
Buffer (1)
Risk-Based Capital Ratios:
Total risk-based capital ratio13.29 %13.12 %10.00 %10.50 %
Tier 1 risk-based capital ratio12.11 %11.94 %8.00 %8.50 %
Common equity tier 1 ratio12.11 %11.94 %6.50 %7.00 %
Leverage ratio9.80 %9.66 %5.00 %4.00 %
(1)An additional 2.5% capital conservation buffer above the minimum capital ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonus to executive officers.
(2)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.

($ in thousands)Basel III% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Risk-Based Capital Ratios:
Total risk-based capital ratio13.29 %13.66 %15.04 %(0.37)%(1.75)%
Tier 1 risk-based capital ratio12.11 %12.42 %13.79 %(0.31)%(1.68)%
Common equity tier 1 ratio12.11 %12.42 %13.79 %(0.31)%(1.68)%
Leverage ratio9.80 %9.58 %10.38 %0.22 %(0.58)%
Risk-weighted Assets$1,427,569 $1,335,889 $1,061,131 6.86 %34.53 %

Capital ratios remained strong during the quarter. Our CET1 and total risk-based capital ratios were 12.11% and 13.29% as of March 31, 2022, respectively, a decrease from a year ago due to year-over-year asset growth.

The Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per share of its common stock. The cash dividend is payable on or about May 26, 2022 to all shareholders of record as of the close of business on May 12, 2022.

The Company did not repurchase any shares during the first quarter of 2022. 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, 2022.
13

Asset Quality

($ in thousands)As of and For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Nonperforming loans (1)$2,806 $3,200 $1,148 (12.3)%144.4 %
OREO— — — — — 
Total nonperforming assets$2,806 $3,200 $1,148 (12.3)%144.4 %
Nonperforming loans to gross loans0.20 %0.24 %0.10 %(0.04)%0.10 %
Nonperforming assets to total assets0.15 %0.19 %0.08 %(0.04)%0.07 %
Criticized (2) Loan:
Special mention loans$— $— $530 — %(100.0)%
Classified loans (3)3,848 4,039 6,586 (4.7)(41.6)
Total criticized loans$3,848 $4,039 $7,116 (4.7)%(45.9)%
Criticized (2) loans to gross loans0.27 %0.31 %0.62 %(0.04)%(0.35)%
Classified loans (3) to gross loans0.27 %0.31 %0.57 %(0.04)%(0.30)%
Allowance for loan losses, beginning$16,123 $14,134 $15,352 14.1 %5.0 %
Provision for (reversal of) loan losses (4)546 2,157 (16)(74.7)(3512.5)
Gross charge-offs(14)(168)— (91.7)— 
Gross recoveries17 — 3 — 466.7 
Allowance for loan losses, ending (5)$16,672 $16,123 $15,339 3.4 %8.7 %
Allowance for loan losses ratios:
As a % of gross loans1.17 %1.23 %1.33 %(0.06)%(0.16)%
As an adjusted of gross loans (6)1.24 %1.36 %1.59 %(0.12)%(0.35)%
As a % of nonperforming loans594 %503 %1,337 %91 %(743)%
As a % of nonperforming assets594 %503 %1,337 %91 %(743)%
Net (recoveries) charge-offs to average gross loans0.00 %0.05 %0.00 %(0.05)%0.00 %
(1)Includes the guaranteed portion of SBA loans totaling $0.9 million as of March 31, 2022.
(2)Includes special mention, substandard, doubtful and loss categories.
(3)Includes substandard, doubtful and loss categories.
(4)Excludes (reversal of) provision for uncollectible accrued interest receivable of $(205) thousand, $(259) thousand and $636 thousand for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.
(5)Excludes allowance for uncollectible accrued interest receivable of $205 thousand and $1.3 million as of December 31, 2021 and March 31, 2021, respectively.
(6)See the Reconciliation of GAAP to NON-GAAP Financial Measures.

Overall, the Company continued to maintain solid asset quality with low levels of nonperforming loans and net charge-offs. Nonperforming assets and criticized loans remained below our historical norms, a reflection of our conservative credit culture and expertise in the industries we serve. Our allowance remained strong with an adjusted allowance to gross loans ratio of 1.24%. We expect economic metrics to remain relatively strong over the next year, which bodes well for growth.: however, we remain
14

vigilant given potential impacts on our customers from supply chain and labor constraints as well as COVID variants.

◦Allowance for loan losses increased $1.3 million to $16.7 million from a year ago. Excluding the impacts of the purchased Hana loans, PPP loans, and the allowance for uncollectible accrued interest receivable, adjusted allowance to gross loans ratio was 1.24% as of March 31, 2022.

◦Criticized loans decreased by $3.3 million or 45.9% from a year ago, and the criticized loans to gross loans ratio improved by 35 basis points, primarily due to a $3.8 million payoff in one C&I relationship. Criticized loans are generally consistent with the Special Mention, Substandard, Doubtful and Loss categories defined by regulatory authorities.

◦Nonperforming assets increased $1.7 million to $2.8 million, or 0.15% of total assets from a year ago. The increase in nonperforming assets was primarily due to SBA loans that were placed on nonaccrual in 2021. As of March 31, 2022, $899 thousand of nonaccrual loans was the guaranteed portion of SBA loans that are in liquidation. The Company did not have OREO as of March 31, 2022 or 2021.

◦Net recoveries were $3 thousand or 0.00% of average loans in the first quarter of 2022. In comparison, there were $3 thousand net recoveries in the first quarter of 2021.

COVID-19 Pandemic Update

Total outstanding balance of loans remaining in deferment status as of March 31, 2022, represented 0.3% of the total loan portfolio.

Since the PPP’s inception through March 31, 2022, we have funded $154.5 million, and $137.0 million of principal forgiveness has been provided on qualifying PPP loans.
15

Reconciliation of GAAP to Non-GAAP Financial Measures

In addition to GAAP measures, management uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance.

Pre-provision net revenue removes provision for loan losses and income tax expense. Management believes that this non-GAAP measure, when taken together with the corresponding GAAP financial measures (as applicable), provides meaningful supplemental information regarding our performance. This non-GAAP financial measure also facilitates a comparison of our performance to prior periods.

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Interest income$17,944 $17,822 $13,632 
Interest expense654 726 877 
Net interest income17,290 17,096 12,755 
Noninterest income4,216 7,289 2,966 
Noninterest expense9,662 9,591 7,966 
Pre-provision net revenue(a)$11,844 $14,794 $7,755 
Reconciliation to net income:
Provision for loan losses(b)$341 $1,898 $620 
Income tax expense(c)3,351 3,762 2,058 
Net income(a)+(b) +(c)$8,152 $9,134 $5,077 

16

During the second quarter of 2021, the Company purchased 638 loans from Hana for a total purchase price of $97.6 million. The Company evaluated $100.0 million of the loans purchased in accordance with the provisions of ASC 310-20, Nonrefundable Fees and Other Costs, which were recorded with a $8.9 million discount. As a result, the fair value discount on these loans is being accreted into interest income over the expected life of the loans using the effective yield method. Adjusted loan yield and net interest margin for the three months ended March 31, 2022 and December 31, 2021 excluded the impacts of contractual interest and discount accretion of the purchased loans as management does not consider purchasing loan portfolios to be normal or recurring transactions. Management believes that presenting the adjusted average loan yield and net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company’s performance.

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Yield on Average Loans
Interest income on loans$17,257 $17,271 $13,284 
Less: interest income on purchased loans1,755 1,863 — 
Adjusted interest income on loans(a)$15,502 $15,408 $13,284 
Average loans$1,444,054 $1,343,414 $1,165,150 
Less: Average purchased loans74,631 79,625 — 
Adjusted average loans(b)$1,369,423 $1,263,789 $1,165,150 
Average loan yield (1)4.84 %5.10 %4.62 %
Effect on average loan yield (1)0.26 %0.26 %— %
Adjusted average loan yield (1)(a)/(b)4.58 %4.84 %4.62 %
Net Interest Margin
Net interest income$17,290 $17,096 $12,755 
Less: interest income on purchased loans1,755 1,863 — 
Adjusted net interest income(c)$15,535 $15,233 $12,755 
Average interest-earning assets$1,698,799 $1,668,865 $1,357,450 
Less: Average purchased loans74,631 79,625 — 
Adjusted average interest-earning assets(d)$1,624,168 $1,589,240 $1,357,450 
Net interest margin (1)4.12 %4.07 %3.80 %
Effect on net interest margin (1)0.25 %0.26 %— %
Adjusted net interest margin (1)(c)/(d)3.87 %3.81 %3.80 %
(1)Annualized.

17

Adjusted allowance to gross loans ratio removes the impacts of purchased loans, PPP loans and allowance on accrued interest receivable. Management believes that this ratio provides greater consistency and comparability between the Company’s results and those of its peer banks.

($ in thousands)For the Three Months Ended
1Q224Q211Q21
Gross loans$1,428,410 $1,314,019 $1,155,872 
Less: Purchased loans(71,377)(77,170)— 
PPP loans (1)(21,016)(38,918)(113,551)
Adjusted gross loans(a)1,336,017 $1,197,931 $1,042,321 
Accrued interest receivable on loans$4,494 $4,231 $2,839 
Less: Accrued interest receivable on purchased loans(295)(340)— 
Accrued interest receivable on PPP loans (2)(229)(340)(481)
Add: Allowance on accrued interest receivable— 205 1,279 
Adjusted accrued interest receivable on loans(b)$3,970 $3,756 $3,637 
Adjusted gross loans and accrued interest receivable(a)+(b) =(c)$1,339,987 $1,201,687 $1,045,958 
Allowance for loan losses$16,672 $16,123 $15,339 
Add: Allowance on accrued interest receivable— 205 1,279 
Adjusted Allowance(d)$16,672 $16,328 $16,618 
Adjusted allowance to gross loans ratio(d)/(c)1.24 %1.36 %1.59 %
(1)Excludes purchased PPP loans of $1.0 million and $1.7 million as of March 31, 2022 and December 31, 2021, respectively.
(2)Excludes purchased accrued interest receivable on PPP loans of $11 thousand and $15 thousand as of March 31, 2022 and December 31, 2021, respectively.

18

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 ten full service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, 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
19

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, 2021 and in our other subsequent filings with the Securities and Exchange Commission.
Contact
Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
[email protected]

20

Consolidated Balance Sheets (unaudited)

($ in thousands)As of% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Assets  
Cash and due from banks$18,206 $11,283 $20,386 61.4 %(10.7)%
Interest-bearing deposits in other banks111,770 104,176 107,044 7.3 4.4 
Cash and cash equivalents129,976 115,459 127,430 12.6 2.0 
Securities available for sale, at fair value161,182 150,444 102,413 7.1 57.4 
Other investments10,836 10,999 10,047 (1.5)7.9 
Loans held for sale86,243 89,428 28,575 (3.6)201.8 
Real estate loans730,841 701,450 662,445 4.2 10.3 
SBA loans (1)253,064 275,858 263,185 (8.3)(3.8)
C&I loans176,934 162,543 103,883 8.9 70.3 
Home mortgage loans266,465 173,303 125,285 53.8 112.7 
Consumer & other loans1,106 865 1,074 27.9 3.0 
Gross loans, net of unearned income1,428,410 1,314,019 1,155,872 8.7 23.6 
Allowance for loan losses(16,672)(16,123)(15,339)3.4 (8.7)
Net loans receivable1,411,738 1,297,896 1,140,533 8.8 23.8 
Premises and equipment, net4,570 4,355 4,368 4.9 4.6 
Accrued interest receivable, net4,893 4,579 3,096 6.9 58.0 
Servicing assets12,341 12,720 7,492 (3.0)64.7 
Company owned life insurance11,197 11,134 10,941 0.6 2.3 
Deferred tax assets10,882 8,409 5,391 29.4 101.9 
Operating right-of-use assets8,471 8,905 6,443 (4.9)31.5 
Other assets11,616 12,363 8,605 (6.0)35.0 
Total assets$1,863,945 $1,726,691 $1,455,334 7.9 %28.1 %
Liabilities and Shareholders' Equity
Liabilities
Noninterest bearing$848,531 $774,754 $571,985 9.5 %48.3 %
Money market and others456,890 380,226 354,148 20.2 29.0 
Time deposits greater than $250,000192,849 207,288 190,960 (7.0)1.0 
Other time deposits173,733 171,798 168,297 1.1 3.2 
Total deposits1,672,003 1,534,066 1,285,390 9.0 30.1 
Federal Home Loan Bank advances— — 5,000 — (100.0)
Accrued interest payable548 558 622 (1.8)(11.9)
Operating lease liabilities9,839 10,307 8,016 (4.5)22.7 
Other liabilities15,564 16,538 9,313 (5.9)67.1 
Total liabilities1,697,954 1,561,469 1,308,341 8.7 29.8 
Shareholders’ equity
Common stock
78,718 78,718 78,654 — 0.1 
Additional paid-in capital8,860 8,645 8,652 2.5 2.4 
Retained earnings85,694 79,056 59,373 8.4 44.3 
Accumulated other comprehensive (loss) income(7,281)(1,197)314 508.3 (2418.8)
Total shareholders’ equity165,991 165,222 146,993 0.5 12.9 
Total liabilities and shareholders' equity$1,863,945 $1,726,691 $1,455,334 7.9 %28.1 %
(1)Includes SBA Paycheck Protection Program (“PPP”) loans of $22.1 million, $40.6 million and $113.6 million as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
21

Consolidated Statements of Income (unaudited)

($ in thousands, except share and per share data)For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Interest income
Interest and fees on loans$17,257 $17,271 $13,284 (0.1)%29.9 %
Interest on securities available for sale530 362 236 46.4 124.6 
Other interest income157 189 112 (16.9)40.2 
Total interest income17,944 17,822 13,632 0.7 31.6 
Interest expense
Interest on deposits654 726 877 (9.9)(25.4)
Total interest expense654 726 877 (9.9)(25.4)
Net interest income17,290 17,096 12,755 1.1 35.6 
Provision for loan losses341 1,898 620 (82.0)(45.0)
Net interest income after provision for loan losses16,949 15,198 12,135 11.5 39.7 
Noninterest income
Service charges on deposits388 405 355 (4.2)9.3 
Loan servicing fees, net of amortization447 521 531 (14.2)(15.8)
Gain on sale of loans3,238 6,033 1,882 (46.3)72.1 
Other income143 330 198 (56.7)(27.8)
Total noninterest income4,216 7,289 2,966 (42.2)42.1 
Noninterest expense
Salaries and employee benefits5,657 5,560 4,662 1.7 21.3 
Occupancy and equipment1,378 1,418 1,235 (2.8)11.6 
Data processing and communication493 637 448 (22.6)10.0 
Professional fees324 267 314 21.3 3.2 
FDIC insurance and regulatory assessments207 182 132 13.7 56.8 
Promotion and advertising189 156 177 21.2 6.8 
Directors’ fees177 166 116 6.6 52.6 
Foundation donation and other contributions815 901 507 (9.5)60.7 
Other expenses422 304 375 38.8 12.5 
Total noninterest expense9,662 9,591 7,966 0.7 21.3 
Income before income tax expense11,503 12,896 7,135 (10.8)61.2 
Income tax expense3,351 3,762 2,058 (10.9)62.8 
Net income$8,152 $9,134 $5,077 (10.8)%60.6 %
Book value per share$10.97 $10.92 $9.77 0.5 %12.3 %
Earnings per share - Basic$0.53 $0.60 $0.33 (11.7)%60.6 %
Earnings per share - Diluted$0.53 $0.59 $0.33 (10.2)%60.6 %
Shares of common stock outstanding15,137,80815,137,80815,037,635— %0.7 %
Weighted Average Shares:
- Basic15,137,80815,136,22915,022,876— %0.8 %
- Diluted15,242,21415,227,29115,069,4440.1 %1.1 %

22

Key Ratios

For the Three Months Ended% Change 1Q22 vs.
1Q224Q211Q214Q211Q21
Return on average assets (ROA) (1)1.85 %2.11 %1.44 %(0.3)%0.4 %
Return on average equity (ROE) (1)19.54 %22.68 %14.02 %(3.1)%5.5 %
Net interest margin (1)4.12 %4.07 %3.80 %0.1 %0.3 %
Efficiency ratio44.93 %39.34 %50.67 %5.6 %(5.7)%
Total risk-based capital ratio (2)13.29 %13.66 %15.04 %(0.4)%(1.8)%
Tier 1 risk-based capital ratio (2)12.11 %12.42 %13.79 %(0.3)%(1.7)%
Common equity tier 1 ratio (2)12.11 %12.42 %13.79 %(0.3)%(1.7)%
Leverage ratio (2)9.80 %9.58 %10.38 %0.2 %(0.6)%
(1)Annualized.
(2)The Company’s March 31, 2022 regulatory capital ratios are preliminary.
23

Asset Quality

($ in thousands)As of and For the Three Months Ended
1Q224Q211Q21
Nonaccrual Loans (1)$2,806 $3,000 $1,148 
Loans 90 days or more past due, accruing— 200 — 
Accruing restructured loans— — — 
Nonperforming loans2,806 3,200 1,148 
Other real estate owned ("OREO")— — — 
Nonperforming assets$2,806 $3,200 $1,148 
Criticized loans (2) by loan type:
SBA loans$2,544 $2,688 $1,684 
C&I loans305 313 4,832 
Home mortgage loans999 1,038 600 
Total criticized loans (2)$3,848 $4,039 $7,116 
   
Nonperforming assets/total assets0.15 %0.19 %0.08 %
Nonperforming assets / gross loans plus OREO0.20 %0.24 %0.10 %
Nonperforming loans / gross loans0.20 %0.24 %0.10 %
Allowance for loan losses / nonperforming loans594 %503 %1337 %
Allowance for loan losses / nonperforming assets594 %503 %1337 %
Allowance for loan losses / gross loans1.17 %1.23 %1.33 %
Criticized loans (2) / gross loans0.27 %0.31 %0.62 %
Classified loans / gross loans0.27 %0.31 %0.57 %
Net (recoveries) charge-offs$(3)$168 $(3)
Net (recoveries) charge-offs to average gross loans (3)(0.00)%0.05 %(0.00)%
(1)Includes the guaranteed portion of SBA loans that are in liquidation totaling $899 thousand as of March 31, 2022.
(2)Consists of special mention, substandard, doubtful and loss categories.
(3)Annualized.

($ in thousands)1Q224Q211Q21
Accruing delinquent loans 30-89 days past due
30-59 days$201 $76 $— 
60-89 days— 336 — 
Total (1)$201 $412 $— 
(1)Includes the guaranteed portion of PPP loans totaling $9 thousand as of March 31, 2022.

24

Average Balance Sheet, Interest and Yield/Rate Analysis

For the Three Months Ended
1Q224Q211Q21
($ in thousands)Average
Balance		Interest
and Fees		Yield/
Rate (1)		Average
Balance		Interest
and Fees		Yield/
Rate (1)		Average
Balance		Interest
and Fees		Yield/
Rate (1)
Interest-earning assets:
Interest-bearing deposits in other banks$86,875 $42 0.19 %$192,302 $73 0.15 %$89,931 $23 0.19 %
Federal funds sold and other investments10,957 115 4.19 11,012 116 4.23 10,087 89 3.53 
Available-for-sale debt securities, at fair value156,913 530 1.35 122,137 362 1.19 92,951 236 1.02 
Real estate loans710,993 7,802 4.45 685,394 7,774 4.50 653,498 7,466 4.63 
SBA loans358,725 5,834 6.60 400,059 6,829 6.77 268,440 3,280 4.95 
C&I loans156,355 1,536 3.98 133,104 1,334 3.98 116,327 1,072 3.74 
Home mortgage loans217,103 2,074 3.82 123,822 1,320 4.27 125,698 1,451 4.62 
Consumer & other loans878 11 4.88 1,035 14 5.21 1,187 15 5.12 
Loans (2)1,444,054 17,257 4.84 1,343,414 17,271 5.10 1,165,150 13,284 4.62 
Total interest-earning assets1,698,799 17,944 4.28 1,668,865 17,822 4.24 1,358,119 13,632 4.07 
Noninterest-earning assets63,016 62,996 51,707 
Total assets$1,761,815 $1,731,861 $1,409,826 
Interest-bearing liabilities:
Money market deposits and others$412,295 $251 0.25 %$378,849 $283 0.30 %$336,796 $270 0.33 %
Time deposits374,620 403 0.44 401,938 443 0.44 361,803 607 0.68 
Total interest-bearing deposits786,915 654 0.34 780,787 726 0.37 698,599 877 0.51 
Borrowings— — — 4 — — 5,000 — — 
Total interest-bearing liabilities786,915 654 0.34 780,791 726 0.37 703,599 877 0.51 
Noninterest-bearing liabilities:
Noninterest-bearing deposits783,461 765,012 544,492 
Other noninterest-bearing liabilities24,599 24,994 16,865 
Total noninterest-bearing liabilities808,060 790,006 561,357 
Shareholders’ equity166,840 161,064 144,870 
Total liabilities and shareholders’ equity$1,761,815 $1,731,861 $1,409,826 
Net interest income / interest rate spreads$17,290 3.94 %$17,096 3.87 %$12,755 3.56 %
Net interest margin4.12 %4.07 %3.80 %
Cost of deposits & cost of funds:
Total deposits / cost of deposits$1,570,376 $654 0.17 %$1,545,799 $726 0.19 %1,243,091 $877 0.29 %
Total funding liabilities / cost of funds$1,570,376 $654 0.17 %$1,545,803 $726 0.19 %1,248,091 $877 0.28 %
(1)Annualized.
(2)Includes loans held for sale.
25

Exhibit 99.2

OP Bancorp Declares Quarterly Cash Dividend of $0.10 per Share
LOS ANGELES, April 28, 2022 — OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), announced today that its Board of Directors declared a quarterly cash dividend of $0.10 per share of its common stock. The dividend is payable on or about May 26, 2022 to all shareholders of record as of the close of business on May 12, 2022.
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 ten full service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, 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.
Contact
Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
[email protected]

2022 First Quarter Earnings Presentation April 28, 2022

 
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, 2021 and in our other subsequent filings with the Securities and Exchange Commission. Cautionary Note Regarding Forward-Looking Statements 2

 
1Q-2022 Highlights vs 1Q-2021 31. Includes loans held for sale. Net Income $8.2M Earnings & Profitability Balance Sheet Growth Credit Quality Capital Adequacy • Net income of $8.2 million, up $3.1 million or 61% • Diluted earnings per share of $0.53, up $0.20 or 61% • Net interest margin of 4.12%, up from 3.80% • ROAA and ROAE of 1.85% and 19.54%, up from 1.44% and 14.02%, respectively • Efficiency ratio of 44.93%, an improvement from 50.67% • Total assets of $1.86 billion, up $409 million, or 28% • Total loans(1) of $1.51 billion, up $330 million, or 28% • Total deposits of $1.67 billion, up $387 million, or 30% • Noninterest-bearing deposits to total deposits of 51%, up from 45% • Adjusted allowance to gross loans of 1.24%, compared to 1.59% • Net loan recoveries to average gross loans of 0.00% • Nonperforming loans to gross loans of 0.20%, compared to 0.10%. • Criticized loans to gross loans of 0.27%, down from 0.62% • Quarterly cash dividend of $0.10 per share, a 43% increase from $0.07 per share • Capital position remained solid with a Common Equity Tier 1 ratio of 12.11% Diluted EPS $0.53 ROAA 1.85% ROAE 19.54% NIM 4.12% Efficiency 44.93%

 
Balance Sheet Trend 4 Gross Loans ($mm)Total Assets ($mm) Total Equity ($mm) & Book Value Per Share ($)Total Deposits ($mm)

 
Loan Trend 5 Loan Originations ($mm)Loan Composition ($mm) Loan Yields (%) Commercial Real Estate Concentration (%)

 
Loan by Interest Rate Type 6 Hybrid Loan Repricing Schedule ($mm)Composition by Interest Rate Type (%) Contractual Rates by Interest Rate Type (%) Loan Maturity Schedule ($mm)

 
Gross Loan Changes by Activity 7

 
Deposit Trend 8 Noninterest Bearing Deposits ($mm)Deposit Composition ($mm) Cost of Deposits (%) CD Maturity Schedule ($mm)

 
Earnings & Profitability 9 Noninterest Income ($mm)Net Interest Income ($mm) & Net Interest Margin (%) Interest Income & Interest Expense ($mm) Noninterest Income Components ($mm) * Ratios for interest income & interest expense are percentages of average assets and are annualized.

 
Earnings & Profitability 10 Efficiency Ratio (%)Noninterest Expense ($mm) Noninterest Expense Components ($mm) Efficiency Ratio Components (%) * Ratios for Efficiency Ratio Components are percentages of average assets and are annualized.

 
Earnings & Profitability 11 Pre-Provision Net Revenue ($mm)Provision for Loan Losses ($mm) Net Income ($mm) & Diluted EPS ($) Return on Assets & Return on Equity (%)

 
Source: Target Fed Funds Rate per Federal Open Market Committee guidance. Net Interest Margin Trend 12

 
Asset Quality 13 Criticized Loans ($mm)Nonperforming Loans ($mm) Net Charge-Offs ($mm)Allowance for Loan Losses ($mm)

 
Liquidity & Capital 14 Total Liquidity ($mm)On Balance Sheet Liquidity ($mm) Tier 1 Leverage ($mm) Total Risk Based Capital ($mm)

 
Non-GAAP Reconciliation 15

 
Non-GAAP Reconciliation 16