OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported its financial results for the second quarter of 2023. Net income for the second quarter of 2023 was $6.1 million, or $0.39 per diluted common share, compared with $7.5 million, or $0.48 per diluted common share, for the first quarter of 2023, and $8.5 million, or $0.54 per diluted common share, for the second quarter of 2022.
Min Kim, President and Chief Executive Officer:
“We continued to maintain strong liquidity, credit quality, and solid capital positions to withstand the recent turmoil in the banking industry. Our liquid assets and available borrowings were more than 47% of total assets,” said Min Kim, President and Chief Executive.
“The migration from noninterest-bearing to interest-bearing deposits has been stabilized during the quarter, and our noninterest-bearing deposits remained at 34% of total deposits. We are truly grateful for our customers’ loyalty and trust throughout these difficult times.
“Although we anticipate additional challenges in the short term, we remain optimistic about our future performance and will continue to focus on executing our strategic goals while maintaining appropriate risk and control environment.”
SELECTED FINANCIAL HIGHLIGHTS | ||||||||||||||||||
($ in thousands, except per share data) | As of and For the Three Months Ended | % Change 2Q23 vs. | ||||||||||||||||
2Q2023 | 1Q2023 | 2Q2022 | 1Q2023 | 2Q2022 | ||||||||||||||
Selected Income Statement Data: | ||||||||||||||||||
Net interest income | $ | 17,252 | $ | 17,892 | $ | 19,079 | (3.6 | )% | (9.6 | )% | ||||||||
(Reversal of) provision for credit losses | — | (338 | ) | 996 | n/m | n/m | ||||||||||||
Noninterest income | 3,605 | 4,295 | 5,359 | (16.1 | ) | (32.7 | ) | |||||||||||
Noninterest expense | 12,300 | 11,908 | 11,503 | 3.3 | 6.9 | |||||||||||||
Income tax expense | 2,466 | 3,083 | 3,459 | (20.0 | ) | (28.7 | ) | |||||||||||
Net Income | 6,091 | 7,534 | 8,480 | (19.2 | ) | (28.2 | ) | |||||||||||
Diluted earnings per share | 0.39 | 0.48 | 0.54 | (18.8 | ) | (27.8 | ) | |||||||||||
Selected Balance Sheet Data: | ||||||||||||||||||
Gross loans | $ | 1,716,197 | $ | 1,692,485 | $ | 1,484,718 | 1.4 | % | 15.6 | % | ||||||||
Total deposits | 1,859,639 | 1,904,818 | 1,741,623 | (2.4 | ) | 6.8 | ||||||||||||
Total assets | 2,151,701 | 2,170,594 | 1,934,242 | (0.9 | ) | 11.2 | ||||||||||||
Average loans(1) | 1,725,764 | 1,725,392 | 1,560,064 | — | 10.6 | |||||||||||||
Average deposits | 1,817,101 | 1,867,684 | 1,702,860 | (2.7 | ) | 6.7 | ||||||||||||
Credit Quality: | ||||||||||||||||||
Nonperforming loans | $ | 3,447 | $ | 2,504 | $ | 1,826 | 37.7 | % | 88.8 | % | ||||||||
Net charge-offs (recoveries) to average gross loans(2) | 0.00 | % | 0.02 | % | (0.01 | )% | (0.02 | ) | 0.01 | |||||||||
Allowance for credit losses to gross loans | 1.21 | 1.23 | 1.19 | (0.02 | ) | 0.02 | ||||||||||||
Allowance for credit losses to nonperforming loans | 603 | 831 | 969 | (228 | ) | (366 | ) | |||||||||||
Financial Ratios: | ||||||||||||||||||
Return on average assets(2) | 1.15 | % | 1.43 | % | 1.79 | % | (0.28 | )% | (0.64 | )% | ||||||||
Return on average equity(2) | 13.27 | 16.82 | 20.29 | (3.55 | ) | (7.02 | ) | |||||||||||
Net interest margin(2) | 3.40 | 3.57 | 4.21 | (0.17 | ) | (0.81 | ) | |||||||||||
Efficiency ratio(3) | 58.97 | 53.67 | 47.07 | 5.30 | 11.90 | |||||||||||||
Common equity tier 1 capital ratio | 11.92 | 12.06 | 12.29 | (0.14 | ) | (0.37 | ) | |||||||||||
Leverage ratio | 9.50 | 9.43 | 9.48 | 0.07 | 0.02 | |||||||||||||
Book value per common share | $ | 12.16 | $ | 12.02 | $ | 11.16 | 1.2 | 9.0 | ||||||||||
| (1) | Includes loans held for sale. | |
| (2) | Annualized. | |
| (3) | Represents noninterest expense divided by the sum of net interest income and noninterest income. |
INCOME STATEMENT HIGHLIGHTS | |||||||||||||||
Net Interest Income and Net Interest Margin | |||||||||||||||
($ in thousands) | For the Three Months Ended | % Change 2Q23 vs. | |||||||||||||
2Q2023 | 1Q2023 | 2Q2022 | 1Q2023 | 2Q2022 | |||||||||||
Interest Income | |||||||||||||||
Interest income | $ | 30,102 | $ | 28,594 | $ | 20,148 | 5.3 | % | 49.4 | % | |||||
Interest expense | 12,850 | 10,702 | 1,069 | 20.1 | 1102.1 | ||||||||||
Net interest income | $ | 17,252 | $ | 17,892 | $ | 19,079 | (3.6 | )% | (9.6 | )% | |||||
($ in thousands) | For the Three Months Ended | ||||||||||||||||||||||||||
2Q2023 | 1Q2023 | 2Q2022 | |||||||||||||||||||||||||
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: | |||||||||||||||||||||||||||
