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OP Bancorp (OPBK)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered modest growth and margin improvement: revenue $24.48M, diluted EPS $0.45, NIM 3.26%, efficiency ratio 55.68% .
  • Results relative to consensus: EPS beat by $0.01 ($0.45 vs $0.44*) and revenue slightly beat ($24.48M vs $24.25M*). Noninterest expense fell 3% QoQ, supporting the efficiency gain . Values retrieved from S&P Global.
  • Balance sheet expanded: total assets $2.61B (+2% QoQ), gross loans $2.15B (+4%), deposits $2.27B (+1%) .
  • Credit quality broadly stable though mixed: net charge-offs 0.04% (annualized) and allowance-to-loans 1.27% remained steady, but nonperforming loans rose to 0.57% of gross loans .
  • Capital return: Board declared a $0.12 dividend (payable Nov 20, 2025); CET1 10.92% and Tier 1 leverage 9.01% remained well-capitalized .

What Went Well and What Went Wrong

What Went Well

  • Margin and profitability improved: NIM expanded 3 bps to 3.26%, efficiency improved to 55.68%, and ROA/ROE rose to 1.04%/12.36% .
  • Loan growth and SBA sales activity: average loans +2% QoQ to $2.13B; SBA loan sales of $36.8M at a 6.71% premium supported noninterest income (+4% QoQ) .
  • CEO tone emphasized operational discipline and sustainable growth: “Our net interest margin expanded by 3 basis points to 3.26%, and our efficiency ratio improved to 55.68%, reflecting our continued focus on profitability and operational discipline… Credit quality remained stable…” — Sang K. Oh, President & CEO .

What Went Wrong

  • Credit metrics showed pressure: nonperforming loans increased to 0.57% of gross loans (from 0.43% QoQ), and criticized loans rose to 1.31% of gross loans .
  • Deposit mix shifted toward higher-cost time deposits: noninterest-bearing deposits fell 4% QoQ to $544M, while time deposits increased $68.8M QoQ .
  • Effective tax rate rose materially to 30.7% (from 25.0% in Q2), driven by state apportionment changes, lifting tax expense to $3.0M (+41% QoQ) .

Financial Results

Core P&L and Profitability vs prior periods and estimates

MetricQ3 2024Q2 2025Q3 2025Q3 2025 Consensus*Delta vs Consensus
Revenue ($USD Millions)$20.75 $23.69 $24.48 $24.25*+$0.23M
Diluted EPS ($USD)$0.36 $0.42 $0.45 $0.44*+$0.01
Net Interest Margin (%)2.95 3.23 3.26 ——
Efficiency Ratio (%)61.31 59.25 55.68 ——
ROA (%) (annualized)0.94 1.00 1.04 ——
ROE (%) (annualized)10.95 11.97 12.36 ——
Net Income ($USD Millions)$5.44 $6.33 $6.70 ——
Noninterest Expense ($USD Millions)$12.72 $14.04 $13.63 ——

Note: Values retrieved from S&P Global for consensus figures (*).

Segment/Portfolio and balance sheet

Loans ($USD Thousands)Q3 2024Q2 2025Q3 2025
CRE$966,472 $1,021,431 $1,092,808
SBA$252,379 $263,424 $256,211
C&I$212,476 $193,359 $214,419
Home Mortgage$499,666 $593,256 $587,641
Consumer & Other$14 $110 $138,110
Gross Loans$1,931,007 $2,071,580 $2,151,217
Deposits ($USD Thousands)Q3 2024Q2 2025Q3 2025
Noninterest-bearing$561,801 $565,683 $543,972
Money market & others$343,188 $431,252 $402,891
Time deposits$1,159,614 $1,257,793 $1,326,554
Total deposits$2,064,603 $2,254,728 $2,273,417

KPIs and credit

KPIQ3 2024Q2 2025Q3 2025
Effective Tax Rate (%)28.3 25.0 30.7
Net Charge-offs to Avg Loans (%) (annualized)0.01 0.06 0.04
Nonperforming Loans / Gross Loans (%)0.19 0.43 0.57
Allowance / Gross Loans (%)1.19 1.27 1.27
CET1 (%)11.57 11.01 10.92
Tier 1 Leverage (%)9.30 8.96 9.01
Book Value / Share ($)$13.75 $14.36 $14.88

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q4 2025 payout (Nov 20, 2025)$0.12 (Q2 2025 declaration) $0.12 declared Oct 23, 2025 Maintained
Share Repurchase ProgramOngoingProgram authorized up to 700,000 shares (Aug 28, 2025) — activity not specified priorNo shares repurchased in Q3 2025 Maintained (no activity)
Tax Rate (effective)Q3 202525.0% in Q2 2025 30.7% in Q3 2025; increase due to CA apportionment changes Raised

No formal revenue, margin, OpEx, or segment guidance was provided in Q3 2025 press materials .

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in the document catalog; themes below reflect quarterly press releases and furnished presentations.

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
Net Interest MarginNIM improved to 3.01% in Q1; deposit cost repricing faster than loan yields after 2024 rate cuts NIM 3.26% (+3 bps QoQ); spread widened to 2.10% Improving
Deposit Mix and CostsShift toward time deposits; cost of interest-bearing deposits fell 29 bps QoQ in Q1; continued decline in Q2 (-13 bps) Noninterest-bearing down 4% QoQ; time deposits up; cost of deposits down 5 bps QoQ to 3.10% Mixed (costs easing; mix higher-cost)
SBA Loan Sale ActivityQ1: $31.1M sold at 8.08% premium; Q2: $25.3M at 7.05% Q3: $36.8M at 6.71% premium; gains on sale +41% QoQ Activity up; premiums lower
Credit QualityQ1: NPLs rose to 0.51%; Q2: NPLs down to 0.43%; criticized loans up slightly NPLs increased to 0.57%; criticized loans to 1.31%; net charge-offs low (0.04%) Slight deterioration
Tax Rate and RegulationQ2: effective tax rate 25.02% after CA apportionment changes Effective tax rate 30.7% due to further apportionment methodology impacts Higher tax burden
Capital & Dividends$0.12 dividend maintained in Q1 and Q2 $0.12 dividend maintained; CET1 10.92% Stable capital return

Management Commentary

  • Strategic focus: “We delivered another solid quarter… net income supported by a 3% rise in revenue and a 3% decrease in noninterest expense… NIM expanded to 3.26%, efficiency improved to 55.68%. Credit quality remained stable… We remain focused on driving sustainable growth and maintaining sound financial management.” — Sang K. Oh, President & CEO .
  • Operating drivers: QoQ net interest income +3% driven by loan growth (+$37.1M average balances), partially offset by higher FHLB borrowings and modestly lower loan yields; cost of interest-bearing deposits declined 11 bps QoQ .
  • Credit and risk: Allowance-to-loans held at 1.27% while NPLs rose to 0.57% on reclassifications from past-due buckets; criticized loans increased on downgrades in SBA and home mortgage .

Q&A Highlights

The Q3 2025 earnings call transcript was not available in the document catalog; therefore, Q&A themes and management clarifications cannot be provided based on primary sources.

Estimates Context

MetricActual (Q3 2025)Consensus* (Q3 2025)# of Estimates*Surprise
Diluted EPS ($)$0.45 0.44*2*+$0.01
Revenue ($)$24,476,000 24,250,000*2*+$226,000

Forward-looking snapshot:

  • Next quarter (Q4 2025) consensus*: EPS 0.485*, Revenue $24,850,000*.
  • Note: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin trajectory remains positive: NIM 3.26% (+31 bps YoY) and efficiency 55.68% (−563 bps YoY) indicate improving core profitability leverage .
  • Revenue and EPS slightly beat consensus; EPS +$0.01 and revenue +$0.23M versus S&P Global estimates*, aided by lower deposit costs and loan growth . Values retrieved from S&P Global.
  • Loan growth broad-based: gross loans +4% QoQ to $2.15B, with CRE +7% QoQ and C&I +11% QoQ; SBA balances dipped 3% QoQ amid higher sale activity .
  • Watch credit normalization: NPLs rose to 0.57% of loans and criticized loans to 1.31%; allowance coverage steady at 1.27% of loans, net charge-offs remain low (0.04%) .
  • Deposit mix headwind: noninterest-bearing deposits −4% QoQ while time deposits +$68.8M; cost of deposits declined 5 bps QoQ to 3.10%, but mix sensitivity to rates persists .
  • Tax rate reset: effective tax rate jumped to 30.7% from 25.0% due to state apportionment methodology changes—expect higher run-rate tax expense absent offsets .
  • Capital return supported by strong ratios: $0.12 dividend maintained; CET1 10.92% and Tier 1 leverage 9.01% keep the company well-capitalized for growth and shareholder distributions .

Additional sources reviewed:

  • Q3 2025 earnings 8‑K and press releases (results and dividend) .
  • Prior quarters’ 8‑K releases for Q2 and Q1 2025 .
  • Furnished earnings presentations for Q3, Q2, and Q1 2025 .