compared with first quarter 2026 net income of $7.2 million, diluted EPS of $0.48, and second quarter 2025 net income of $6.3 million, diluted EPS of $0.42
Revenue growth; reversal of provision for credit losses; improved operating efficiency
LOS ANGELES, July 23, 2026--(BUSINESS WIRE)--OP Bancorp (the "Company") (NASDAQ: OPBK), parent company of Open Bank, today reported:
($ in thousands, except per share data) | As of and For the Quarter | First Quarter Highlights | ||||||||||||
2Q2026 | 1Q2026 | 2Q2025 | Comparisons reflect 2Q26 vs. 1Q26 | |||||||||||
Income Statement: | Income Statement | |||||||||||||
Net interest income | $ | 20,068 | $ | 20,523 | $ | 19,721 |
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Noninterest income | 5,651 | 4,032 | 3,968 | |||||||||||
Revenue | 25,719 | 24,555 | 23,689 | |||||||||||
(Reversal of) provision for credit losses | (149 | ) | 412 | 1,206 | ||||||||||
Noninterest expense | 14,826 | 14,233 | 14,037 | |||||||||||
Net income | $ | 7,978 | $ | 7,234 | $ | 6,333 | ||||||||
Diluted Earnings Per Share ("EPS") | $ | 0.53 | $ | 0.48 | $ | 0.42 | ||||||||
Net interest margin (1) | 3.08 | % | 3.19 | % | 3.23 | % | ||||||||
Efficiency ratio (2) | 57.64 | 57.97 | 59.25 | |||||||||||
Balance Sheet: | Balance Sheet | |||||||||||||
Average loans (3) | $ | 2,253,270 | $ | 2,226,749 | $ | 2,095,168 |
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Average deposits | 2,315,821 | 2,300,455 | 2,223,575 |
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Credit Quality: | Credit Quality | |||||||||||||
Net charge-offs (recoveries) (1) to average gross loans | 0.03 | % | (0.01 | )% | 0.06 | % |
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Allowance for credit losses on loans to gross loans | 1.24 | 1.27 | 1.27 |
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Selected Ratios: | Performance and Capital | |||||||||||||
Book value per share | $ | 15.99 | $ | 15.62 | $ | 14.36 |
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Return on average assets ("ROAA") (1) | 1.18 | % | 1.08 | % | 1.00 | % |
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Return on average equity ("ROAE") (1) | 13.61 | 12.56 | 11.97 | |||||||||||
Stockholders' equity to asset ratio | 8.70 | 8.62 | 8.34 |
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Common equity tier 1 capital ("CET1") | 10.98 | 10.83 | 11.01 |
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(1) | Annualized. | |
(2) | Represents noninterest expense divided by the sum of net interest income and noninterest income. | |
(3) | Includes loans held-for-sale. |
Sang K. Oh, President and Chief Executive Officer:
"We delivered another quarter of strong financial performance, highlighted by net income of $8.0 million and diluted EPS of $0.53. Our results were driven by continued revenue growth, a reversal of provision for credit losses reflecting the strength of our credit portfolio, and ongoing improvements in operating efficiency. We also maintained solid balance sheet growth, with increases in both loans and deposits, while preserving strong asset quality and capital levels. As we enter the second half of 2026, we remain committed to driving sustainable growth while maintaining disciplined risk management and operating efficiency," said Sang K. Oh, President and Chief Executive Officer.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
($ in thousands) | For the Three Months Ended | % Change 2Q2026 vs. | |||||||||||||
2Q2026 | 1Q2026 | 2Q2025 | 1Q2026 | 2Q2025 | |||||||||||
Interest Income | |||||||||||||||
Interest income | $ | 38,193 | $ | 38,537 | $ | 37,665 | (1 | )% | 1 | % | |||||
Interest expense | 18,125 | 18,014 | 17,944 | 1 | 1 | ||||||||||
Net interest income | $ | 20,068 | $ | 20,523 | $ | 19,721 | (2 | )% | 2 | % |
($ in thousands) | For the Three Months Ended | Average Yield/Rate Change 2Q2026 vs. | ||||||||||||||||||||
2Q2026 | 1Q2026 | 2Q2025 | ||||||||||||||||||||
Interest Income/Expense | Average Yield/Rate(1) | Interest Income/Expense | Average Yield/Rate(1) | Interest Income/Expense | Average Yield/Rate(1) | 1Q2026 | 2Q2025 | |||||||||||||||
Interest-earning Assets: | ||||||||||||||||||||||
Loans | $ | 35,731 | 6.36 | % | $ | 34,879 | 6.33 | % | $ | 34,263 | 6.56 | % | 3 bps | (20) bps | ||||||||
Total interest-earning assets | 38,193 | 5.87 | 38,537 | 6.00 | 37,665 | 6.18 | (13) bps | (31) bps | ||||||||||||||
Interest-bearing Liabilities: | ||||||||||||||||||||||
Interest-bearing deposits | 16,891 | 3.77 | 16,845 | 3.83 | 17,475 | 4.18 | (6) bps | (41) bps | ||||||||||||||
Total interest-bearing liabilities | 18,125 | 3.82 | 18,014 | 3.88 | 17,944 | 4.18 | (6) bps | (36) bps | ||||||||||||||
Ratios: | ||||||||||||||||||||||
Net interest income / interest rate spreads | 20,068 | 2.05 | 20,523 | 2.12 | 19,721 | 2.00 | (7) bps | 5 bps | ||||||||||||||
Net interest margin | 3.08 | 3.19 | 3.23 | (11) bps | (15) bps | |||||||||||||||||
Total deposits / cost of deposits | 16,891 | 2.93 | 16,845 | 2.97 | 17,475 | 3.15 | (4) bps | (22) bps | ||||||||||||||
Total funding liabilities / cost of funds | 18,125 | 3.00 | 18,014 | 3.04 | 17,944 | 3.17 | (4) bps | (17) bps |
(1) | Annualized. | |
($ in thousands) | For the Three Months Ended | Average Yield Change 2Q2026 vs. | |||||||||||||||||||||||
2Q2026 | 1Q2026 | 2Q2025 | |||||||||||||||||||||||
Interest Income | Average Yield (1) | Interest Income | Average Yield (1) | Interest Income | Average Yield (1) | 1Q2026 | 2Q2025 | ||||||||||||||||||
Loan Yield Component: | |||||||||||||||||||||||||
Contractual interest rate | $ | 35,335 | 6.29 | % | $ | 34,254 | 6.22 | % | $ | 33,304 | 6.37 | % | 7 bps | (8) bps | |||||||||||
Accretion of SBA loan discount (2) | 687 | 0.12 | 815 | 0.15 | 785 | 0.15 | (3) bps | (3) bps | |||||||||||||||||
Amortization of net deferred fees | 64 | 0.01 | 127 | 0.02 | (60 | ) | (0.01 | ) | (1) bps | 2 bps | |||||||||||||||
Amortization of premium | (293 | ) | (0.05 | ) | (312 | ) | (0.06 | ) | (329 | ) | (0.06 | ) | 1 bps | 1 bps | |||||||||||
Amortization of premium - Home mortgage payoffs | (173 | ) | (0.03 | ) | (186 | ) | (0.03 | ) | (63 | ) | (0.01 | ) | — bps | (2) bps | |||||||||||
Net interest recognized on nonaccrual loans | (68 | ) | (0.01 | ) | (94 | ) | (0.02 | ) | 295 | 0.06 | 1 bps | (7) bps | |||||||||||||
Prepayment penalty income and other fees (3) | 179 | 0.03 | 275 | 0.05 | 331 | 0.06 | (2) bps | (3) bps | |||||||||||||||||
Yield on loans | $ | 35,731 | 6.36 | % | $ | 34,879 | 6.33 | % | $ | 34,263 | 6.56 | % | 3 bps | (20) bps |
(1) | Annualized. | |
(2) | Includes discount accretion from Small Business Administration ("SBA") loan payoffs of $232 thousand, $370 thousand and $293 thousand for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. | |
(3) | Includes prepayment penalty income of $91 thousand, $98 thousand and $166 thousand for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively, primarily from Commercial Real Estate ("CRE") and SBA loans. | |
Second Quarter 2026 vs. First Quarter 2026
Net interest income declined by $455 thousand, or 2%, primarily reflecting a one-time interest accrual adjustment related to the Federal Reserve Bank account and the absence of a special FHLB dividend recognized in the prior period. These decreases were partially offset by continued loan growth. As a result, the net interest margin contracted by 11 basis points to 3.08%.
Interest-bearing deposits in other banks: Interest income decreased by $910 thousand, primarily due to a one-time $739 thousand accrual adjustment on the Federal Reserve Bank account.
Other investments: Interest income decreased by $349 thousand, mainly due to the absence of a special dividend received on FHLB stock in the prior period.
Loans: Interest income increased by $852 thousand, driven largely by a $26.5 million increase in average loan balances, reflecting growth in SBA and CRE loans, as well as two additional accrual days during the current period.
Deposits: Interest expense remained relatively stable compared to the prior period.
Second Quarter 2026 vs. Second Quarter 2025
Net interest income increased by $347 thousand, or 2%, primarily driven by balance-sheet growth and lower deposit rates. These favorable factors were partially offset by lower loan yields, reduced interest income on interest-bearing deposits in other banks resulting from the aforementioned Federal Reserve Bank interest accrual adjustment and lower interest rates, and higher interest expense associated with the subordinated note issued in November 2025. As a result, the net interest margin declined by 15 basis points to 3.08%.
Loans: Interest income increased by $1.5 million, largely attributable to a $158.1 million increase in average loan balances, reflecting growth in CRE loans. The increase was partially offset by a 20-basis-point decline in loan yields, reflecting the downward repricing of adjustable-rate loans and lower rates on new originations following last year's federal funds rate cuts, as well as the absence of elevated interest income recognized from nonaccrual loans in the prior period.
Deposits: Interest expense decreased by $584 thousand, mainly due to a 41-basis-point decline in costs of interest-bearing deposits, driven by the repricing of time deposits following the federal funds rate cuts. This decrease was partially offset by a $121.6 million increase in average interest-bearing deposit balances, reflecting growth in time deposits.
Interest-bearing deposits in other banks: Interest income decreased by $1.2 million, primarily due to the aforementioned accrual adjustment on the Federal Reserve Bank account, as well as lower yields on Federal Reserve Bank balances.
Subordinated note: Interest expense increased by $490 thousand, mainly due to the subordinated note issued in November 2025.
Provision for Credit Losses
($ in thousands) | For the Three Months Ended | $ Change 2Q2026 vs. | ||||||||
2Q2026 | 1Q2026 | 2Q2025 | ... |