Executive Summary

Q2 EPS of $0.42 rose 14% q/q and 17% y/y on 13% q/q NII growth; EPS beat S&P Global consensus by $0.04 (0.42 vs 0.38), while “revenue” (SPGI-defined) was slightly below ($22.48M actual vs $22.90M consensus). Net interest margin expanded 22 bps q/q to 3.23% and 27 bps y/y . EPS and revenue estimates from S&P Global; see Estimates Context section for details.*
Core balance sheet grew: gross loans +1% q/q and +11% y/y to $2.07B; deposits +3% q/q and +16% y/y to $2.25B; mix improved with higher noninterest-bearing and money market balances and lower cost of deposits (3.15%, down 8 bps q/q and 39 bps y/y) .
Credit: NPL ratio improved q/q to 0.43% (from 0.51%), while 30–89 DPD rose to 0.47% (from 0.32%); ACL to loans increased to 1.27% (from 1.24%) with annualized NCOs of 0.06% .
Shareholder returns/capital: CET1 at 11.01%; dividend maintained at $0.12 per share; 65,387 shares repurchased at $10.77 average during Q2 .
Potential stock catalysts: visible NIM expansion from deposit repricing, sustained loan/deposit growth, and improving NPLs, partly offset by softer SBA gain-on-sale premiums and higher provisioning tied to CRE downgrades .

What Went Well and What Went Wrong

What Went Well
- Net interest margin inflected higher to 3.23% (+22 bps q/q; +27 bps y/y) on loan growth, higher loan yields (loan yield +17 bps q/q), and lower deposit costs (interest-bearing deposits -13 bps q/q) .
- Balance sheet growth with healthier mix: deposits +$64.9M q/q to $2.25B led by money market (+$46.2M) and noninterest-bearing (+$12.9M); cost of deposits fell to 3.15% (-8 bps q/q) .
- Management emphasized execution and footprint expansion: “sustained growth in loan and deposit portfolios, an expanded net interest margin … improved efficiency,” and the opening of a new Garden Grove branch (CEO Sang K. Oh) .
What Went Wrong
- Noninterest income fell 18% q/q on lower SBA loan sale activity and premiums (sold $25.3M at 7.05% vs $31.1M at 8.08% in Q1); gains on sale declined $578K q/q .
- Provision increased to $1.21M (from $736K) due to higher historical loss factors from CRE downgrades and net charge-offs, despite an improved qualitative outlook .
- Early-stage delinquencies rose (30–89 DPD to 0.47% from 0.32%), and criticized loans ticked up to 1.15% of loans, though NPLs fell to 0.43% .

Financial Results

Headline P&L and Profitability (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Diluted EPS ($)	0.36	0.37	0.42
Net Interest Income ($M)	16.19	17.42	19.72
Noninterest Income ($M)	4.18	4.82	3.97
Provision for Credit Losses ($M)	0.62	0.74	1.21
Net Interest Margin (%)	2.96	3.01	3.23
Efficiency Ratio (%)	59.81	62.13	59.25
ROA (%)	0.95	0.92	1.00
ROE (%)	11.23	10.73	11.97

Balance Sheet and Credit KPIs (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Gross Loans ($M)	1,870.11	2,043.89	2,071.58
Total Deposits ($M)	1,940.82	2,189.87	2,254.73
Noninterest-bearing Deposits (%)	26.7%	25.2%	25.1%
Cost of Deposits (%)	3.54	3.23	3.15
NPLs / Loans (%)	0.23	0.51	0.43
30–89 DPD / Loans (%)	0.36	0.32	0.47
ACL / Loans (%)	1.22	1.24	1.27
CET1 (%)	12.01	10.97	11.01
Tier 1 Leverage (%)	9.28	9.22	8.96

Additional Operating Details (SBA and Originations)

Metric	Q2 2024	Q1 2025	Q2 2025
SBA Loans Sold ($M)	32.1 at 8.58% avg premium	31.1 at 8.08% avg premium	25.3 at 7.05% avg premium
Quarterly Originations ($M), Avg Rate	81.35 at 7.89%	162.65 at 6.95%	131.52 at 7.29%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance	FY/Q3 2025	None provided	None provided	Maintained (no formal guidance) –
Dividend per share	Q2 2025 declaration (payable Aug-21-2025)	$0.12 (Q1 2025 declaration)	$0.12	Maintained

Note: No quantitative revenue/margin/expense guidance ranges were issued in the press release or 8‑K. Dividend policy remains unchanged .

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available in the document catalog; themes reflect prepared remarks, presentations, and press releases.

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Net interest margin drivers	Deposit costs easing post-Fed cuts; NIM 2.96% (+1 bp q/q)	NIM 3.01% (+5 bps q/q) as cost of deposits fell; loan yield -10 bps	NIM 3.23% (+22 bps q/q) with higher loan yields and lower deposit costs	Improving
Deposit mix/cost	Time deposits up; NIB% fell in 4Q; cost of deposits 3.37%	Deposits +8% q/q; NIB% recovered; cost of deposits down to 3.23%	Deposits +3% q/q; cost of deposits 3.15%; NIB and money market increased	Improving
SBA gain-on-sale	Premiums rising in 4Q; $34.7M sold at 7.82%	$31.1M sold at 8.08%	$25.3M sold at 7.05%; lower activity/premiums	Softening
Credit quality	NPLs up in 4Q (0.40%) on SBA issues; ACL 1.27%	NPLs rose to 0.51%; delinquencies improved; ACL 1.24%	NPLs fell to 0.43%; 30–89 DPD increased; ACL 1.27%	Mixed
Strategy/footprint	Core execution under macro uncertainty	Growth focus despite macro uncertainty (prior CEO Min Kim)	New CEO (Sang K. Oh); branch opened in Garden Grove; focus on profitability & engagement	Positive transition

Management Commentary

CEO message (Q2 2025): “This was a solid quarter … highlighted by sustained growth in loan and deposit portfolios, an expanded net interest margin, a more favorable deposit mix and an improved efficiency… opening of our new full-service branch in Garden Grove, California” — Sang K. Oh, President & CEO .
Leadership transition: “I am honored to step into the role of Chief Executive Officer… committed to delivering long-term value… and fostering a culture of integrity” — Sang K. Oh .

Q&A Highlights

An earnings call transcript for Q2 2025 was not available in the document catalog. As a result, Q&A themes and any verbal guidance clarifications are unavailable from primary sources at this time.

Estimates Context

Q2 2025 vs S&P Global consensus:
- EPS: Actual $0.42 vs $0.38 consensus → bold beat of $0.04.*
- Revenue (SPGI-defined): Actual $22.48M vs $22.90M consensus → slight miss of $0.42M.*

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Surprise
Primary EPS ($)	0.38*	0.42*	+0.04*
Revenue ($M)	22.90*	22.48*	-0.42*

Values retrieved from S&P Global.*

Implications: Expect upward estimate revisions to NII/NIM and EPS if deposit cost deflation persists; noninterest income (SBA gain-on-sale) may be revised lower if premium compression continues .

Key Takeaways for Investors

Earnings quality improved: NIM expanded 22 bps q/q to 3.23% with loan yields +17 bps q/q and deposit costs -13 bps; this is a core driver of the EPS beat .
Balance sheet momentum with better funding mix: deposits +3% q/q to $2.25B, cost of deposits down to 3.15%, and NIB/MM growth should support further margin resilience if rate cuts proceed gradually .
Credit is manageable but watch early delinquencies: NPL ratio fell to 0.43%, though 30–89 DPD rose to 0.47% and provision increased on CRE downgrades; ACL coverage improved to 1.27% .
Fee headwinds near term: SBA gain-on-sale volumes and premiums moderated (7.05% vs 8.08% in Q1), pressuring noninterest income; core EPS sensitivity is higher to NII/NIM in the near term .
Capital/shareholder returns intact: CET1 at 11.01%, dividend maintained at $0.12, and opportunistic buybacks (65,387 shares at $10.77) add support to per-share metrics .
Strategic execution and leadership: new CEO emphasizing core profitability, customer engagement, compliance, and footprint expansion (Garden Grove branch) — supports medium-term franchise growth .
Trading setup: Positive EPS/NIM surprise vs a small revenue miss suggests investors focus on NIM trajectory and deposit cost path; monitor SBA secondary market conditions and CRE credit migration for volatility .

Appendix: Prior Quarters (for trend)

Q1 2025: EPS $0.37; NIM 3.01% (+5 bps q/q); deposits +8% q/q; cost of deposits 3.23%; noninterest income +9% q/q; NPLs 0.51% .
Q4 2024: EPS $0.33; NIM 2.96%; cost of deposits 3.37%; SBA premiums improved; NPLs increased to 0.40% on specific SBA relationships .

OP Bancorp (OPBK)·Q2 2025 Earnings Summary