Executive Summary

OP Bancorp delivered solid Q1 with EPS $0.37 and NIM expansion to 3.01%, supported by strong deposit (+8% q/q) and loan growth (+4.4% q/q). Net income rose 12% q/q to $5.6M, while efficiency remained ~62% .
The bank beat S&P Global consensus on EPS ($0.37 vs $0.315) and revenue ($21.50M vs $21.25M)*, aided by lower deposit costs and stable fee income led by SBA gain-on-sale and servicing fees [functions.GetEstimates].
Credit metrics are still benign, but NPLs ticked up to 0.51% (from 0.40%) mainly due to two residential mortgages with expected full recovery; ACL/loans held ~1.24% .
Capital stayed well above “well-capitalized” (CET1 11.08%); liquidity was ample (liquid assets $381M; total available borrowings ~$699M). Dividend maintained at $0.12 per share .
Stock reaction catalysts: continued NIM recovery and deposit inflows vs. watchlist items of rising NPLs (idiosyncratic) and elevated uninsured deposits (~49%) .

What Went Well and What Went Wrong

What Went Well
- Double-digit annualized growth in loans (+4.4% q/q) and deposits (+8.0% q/q), with NIM up 5 bps to 3.01%; CEO emphasized execution and optimism despite macro uncertainty: “double-digit annualized growth…combined with…NIM expansion, resulted in…strong performance” .
- Noninterest income increased 9% q/q, 34% y/y on higher servicing fees and SBA gain-on-sale; SBA premiums improved (8.08%) even on lower sold volume q/q .
- Deposit cost relief: cost of deposits fell 14 bps q/q to 3.23%; NII rose 2.9% q/q to $17.4M .
What Went Wrong
- Credit quality mixed: NPLs rose to 0.51% from 0.40% q/q, largely due to two home mortgages; criticized loans increased to 1.13% of loans (from 1.00%) .
- Expenses up 5.2% q/q (notably salaries/benefits +$499K) as headcount increased to 240; efficiency ratio ticked up to 62.13% .
- Uninsured deposits increased to ~49% of total (from 47.4% q/q), maintaining sensitivity to depositor confidence and rate environment .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($M)	$16.51	$16.93	$17.42
Noninterest Income ($M)	$4.24	$4.42	$4.82
Provision for Credit Losses ($M)	$0.45	$1.55	$0.74
Net Income ($M)	$5.44	$4.97	$5.56
Diluted EPS ($)	$0.36	$0.33	$0.37
Net Interest Margin (%)	2.95	2.96	3.01
ROAA (%) (annualized)	0.94	0.84	0.92
Efficiency Ratio (%)	61.31	61.52	62.13

Estimates vs Actuals (S&P Global):

EPS: $0.315 est vs $0.37 actual (beat by $0.055)* [functions.GetEstimates]
Revenue: $21.25M est vs $21.498M actual (beat by ~$0.25M)* [functions.GetEstimates]
Note: Company-reported NII + noninterest income totaled $22.234M .

Loan and Deposit KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Loans ($M)	$1,931.0	$1,956.9	$2,043.9
Deposits ($M)	$2,064.6	$2,027.3	$2,189.9
NPLs / Loans (%)	0.19	0.40	0.51
ACL / Loans (%)	1.19	1.27	1.24
CET1 (%)	11.57	11.35	11.08
Book Value / Share ($)	$13.75	$13.83	$14.09

Loan Composition ($M)

Category	Q4 2024	Q1 2025
CRE	980.2	1,023.3
SBA (Real Estate)	253.7	237.2
SBA (Non-RE)	21.7	21.6
C&I	213.1	202.3
Home Mortgage	509.5	559.5
Total	1,956.9	2,043.9

Liquidity and Capital

Metric	Q4 2024	Q1 2025
Liquid Assets ($M)	320.9	381.3
Total Available Borrowings ($M)	717.0	699.0
CET1 (%)	11.35	11.08
Leverage Ratio (%)	9.27	9.22

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Quarterly	$0.12	$0.12	Maintained
Financial guidance	2025	Not provided	No formal quantitative guidance provided	—

No explicit quantitative revenue/NIM/expense guidance was provided in the Q1 materials or 10-Q; management reiterated confidence and focus on strategy execution amid macro uncertainty .

Earnings Call Themes & Trends

Note: An earnings call transcript for Q1 2025 was not available despite searches; themes reflect press releases, 10-Q, and the earnings deck [functions.ListDocuments] .

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
NIM trajectory	NIM ~2.95% (Q3), stabilized as Fed easing began ; Q4 2.96% with deposit cost relief	NIM 3.01% (+5bps q/q), cost of deposits -14 bps	Improving
Deposit mix/costs	Shift to time deposits; noninterest-bearing % fell in 2024	Deposits +8% q/q; NIB recovered to 25.2%; time deposits 57.2%	Mix stabilizing; growth strong
Credit quality	Low charge-offs; NPL uptick Q4 tied to SBA relationships and wildfire impacts	NPLs 0.51%, driven by two home mortgages with adequate equity; criticized loans 1.13%	Slight deterioration but contained
SBA franchise	Strong gain-on-sale premiums; servicing income up as payoffs slowed	Premiums 8.08%; gain-on-sale $2.0M; servicing fees up	Stable/positive
Technology/Operations	Preparing for core system changes; higher data processing in 2024	Data processing expense down post core conversion completed in Q4 2024	Positive efficiency lever
Liquidity	Robust on-balance + contingent liquidity	Liquid assets $381M; borrowings $699M; liquidity/TD coverage ~49.3%	Strong
Macro/regulatory	Rate volatility, deposit competition, wildfire impacts	Similar risks; explicit AI/cyber risk noted in 10-Q cautionary text	Ongoing

Management Commentary

CEO Min Kim: “We continued to grow our loans by 4.4% and deposits by 8.0%…while improving net interest margin by 5 basis points…resulted in…a 12% increase in diluted EPS over the previous quarter…we remain optimistic about our future growth…” .
Credit narrative: NPL increase primarily two home mortgage loans with sufficient collateral equity; one in escrow and one listed for sale—no loss expected .
Liquidity/capital: Liquid assets rose to $381M; total available borrowings ~$699M; CET1 11.08% supports dividend continuity .

Q&A Highlights

No earnings call transcript was available for Q1 2025; we searched company repositories and third-party sources but found none [functions.ListDocuments] .
Clarifications from filings: Deposit cost reductions drove NIM improvement; expense increases tied to headcount growth; data processing down post core conversion .
Credit color: NPL uptick characterized as idiosyncratic with expected full recovery; criticized loans modestly higher .

Estimates Context

S&P Global consensus: EPS $0.315 (2 est) vs actual $0.37 (beat), Revenue $21.25M (2 est) vs actual $21.498M (beat)* [functions.GetEstimates].
Implication: Street likely raises near-term EPS on NIM progression and stronger deposit growth; monitor modeled credit costs given criticized/NPL uptick.
Note: Company-reported NII + noninterest income was $22.234M, which may differ from S&P’s revenue definition used for consensus tracking .
Values retrieved from S&P Global.*

Key Takeaways for Investors

NIM inflected positively (3.01%) with further room if deposit costs continue to reprice down and mix stabilizes; deposit inflows were strong at +8% q/q .
Earnings beat was quality-driven (lower funding costs, resilient fees), not one-time; PPNR improved vs prior quarters (see deck’s non-GAAP reconciliation) .
Credit remains manageable but bears watching: NPLs rose to 0.51% on mortgage-specific items; management expects no losses; ACL/loans steady at 1.24% .
Liquidity and capital are robust, supporting the maintained $0.12 dividend and growth agenda (CET1 11.08%, leverage 9.22%) .
Medium-term upside: sustained SBA franchise economics (gain-on-sale, servicing), housing-linked mortgage growth, and efficiency benefits post core conversion .
Watch risks: uninsured deposits at ~49%, macro rate path uncertainty, and regulatory/cyber risks highlighted in 10-Q (including AI-related cyber vectors) .

Footnote: *Values retrieved from S&P Global.

OP Bancorp (OPBK)·Q1 2025 Earnings Summary