compared with second quarter 2025 net income of $6.3 million, diluted EPS of $0.42, and third quarter 2024 net income of $5.4 million, diluted EPS of $0.36

Higher revenue and net income; improved efficiency ratio; stable credit quality

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									Third Quarter Highlights
($ in thousands, except per share data)		3Q2025			2Q2025			3Q2024		Comparisons reflect 3Q25 vs. 2Q25
Income Statement:										Income Statement
Net interest income	$	20,346		$	19,721		$	16,506		Net interest income increased 3% and net interest margin expanded 3 bps to 3.26%. Noninterest income increased 4%. Revenue increased 3%. Noninterest expense decreased 3% and efficiency ratio improved to 55.68%. Net income increased 6%. Diluted EPS increased 7% to $0.45.
Noninterest income		4,130			3,968			4,240
Revenue		24,476			23,689			20,746
Provision for credit losses		1,175			1,206			448
Noninterest expense		13,629			14,037			12,720
Net income	$	6,703		$	6,333		$	5,436
Diluted Earnings Per Share ("EPS")	$	0.45		$	0.42		$	0.36
Net interest margin ⁽¹⁾		3.26	%		3.23	%		2.95	%
Efficiency ratio ⁽²⁾		55.68			59.25			61.31
Balance Sheet:										Balance Sheet
Average loans ⁽³⁾	$	2,132,225		$	2,095,168		$	1,905,952		Average loans increased 2%. Average deposits remained relatively unchanged.
Average deposits		2,229,591			2,223,575			1,998,633
Credit Quality:										Credit Quality
Net charge-offs ⁽¹⁾ to average gross loans		0.04	%		0.06	%		0.01	%	Net loan charge-offs stayed at a low level. Allowance for credit losses to gross loans remained stable.
Allowance for credit losses on loans to gross loans		1.27			1.27			1.19
Selected Ratios:										Performance and Capital
Return on average assets ("ROA") ⁽¹⁾		1.04	%		1.00	%		0.94	%	ROA and ROE improved, reflecting enhanced profitability and efficient use of assets and equity.
Return on average equity ("ROE") ⁽¹⁾		12.36			11.97			10.95
Common equity tier 1 capital ("CET1")		10.92			11.01			11.57		CET1 remained strong.

(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 solid quarter of performance, highlighted by a 6% increase in net income supported by a 3% rise in revenue and a 3% decrease in noninterest expense compared to prior quarter. 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, with low net charge-offs and a steady allowance for credit losses, demonstrating the strength of our portfolio and prudent risk management. As we look ahead, we remain focused on driving sustainable growth and maintaining sound financial management," 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 3Q2025 vs.
($ in thousands)	3Q2025		2Q2025		3Q2024		2Q2025		3Q2024
Interest Income
Interest income	$	38,522	$	37,665	$	35,299	2	%	9	%
Interest expense		18,176		17,944		18,793	1		(3	)
Net interest income	$	20,346	$	19,721	$	16,506	3	%	23	%


($ in thousands)	For the Three Months Ended												Average Yield/Rate Change 3Q2025 vs.
	3Q2025				2Q2025				3Q2024				Average Yield/Rate Change 3Q2025 vs.
	Interest Income/ Expense		Average Yield/Rate⁽¹⁾		Interest Income/ Expense		Average Yield/Rate⁽¹⁾		Interest Income/ Expense		Average Yield/Rate⁽¹⁾		2Q2025	3Q2024
Interest-earning Assets:
Loans	$	35,001	6.52	%	$	34,263	6.56	%	$	31,885	6.66	%	(4) bps	(14) bps
Total interest-earning assets		38,522	6.16			37,665	6.18			35,299	6.30		(2) bps	(14) bps
Interest-bearing Liabilities:
Interest-bearing deposits		17,442	4.07			17,475	4.18			17,921	4.85		(11) bps	(78) bps
Total interest-bearing liabilities		18,176	4.06			17,944	4.18			18,793	4.82		(12) bps	(76) bps
Ratios:
Net interest income / interest rate spreads		20,346	2.10			19,721	2.00			16,506	1.48		10 bps	62 bps
Net interest margin			3.26				3.23				2.95		3 bps	31 bps
Total deposits / cost of deposits		17,442	3.10			17,475	3.15			17,921	3.57		(5) bps	(47) bps
Total funding liabilities / cost of funds		18,176	3.13			17,944	3.17			18,793	3.60		(4) bps	(47) bps


(1) Annualized.


($ in thousands)	For the Three Months Ended															Average Yield Change 3Q2025 vs.
	3Q2025					2Q2025					3Q2024					Average Yield Change 3Q2025 vs.
	Interest Income			Average Yield⁽¹⁾		Interest Income			Average Yield⁽¹⁾		Interest Income			Average Yield⁽¹⁾		2Q2025	3Q2024
Loan Yield Component:
Contractual interest rate	$	34,312		6.40	%	$	33,437		6.40	%	$	31,182		6.52	%	— bps	(12) bps
Accretion of SBA loan discount⁽²⁾		972		0.18			785		0.15			918		0.19		3 bps	(1) bps
Amortization of net deferred fees		70		0.01			(60	)	(0.01	)		23		0.00		2 bps	1 bps
Amortization of premium		(321	)	(0.06	)		(329	)	(0.06	)		(487	)	(0.10	)	— bps	4 bps
Amortization of premium - Home mortgage payoffs		(35	)	(0.01	)		(63	)	(0.01	)		—		—		— bps	(1) bps
Net interest recognized on nonaccrual loans		(224	)	(0.04	)		162		0.03			(61	)	(0.01	)	(7) bps	(3) bps
Prepayment penalty income and other fees⁽³⁾		227		0.04			331		0.06			310		0.06		(2) bps	(2) bps
Yield on loans	$	35,001		6.52	%	$	34,263		6.56	%	$	31,885		6.66	%	(4) bps	(14) bps

(1)	Annualized.
(2)	Includes discount accretion from SBA loan payoffs of $499 thousand, $293 thousand and $426 thousand for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively.
(3)	Includes prepayment penalty income of $127 thousand, $166 thousand and $114 thousand for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively, from Commercial Real Estate ("CRE") and SBA loans.

Third Quarter 2025 vs. Second Quarter 2025

Net interest income increased by $625 thousand, or 3%, primarily driven by loan growth, partially offset by higher borrowings and lower loan yields. Net interest margin expanded by 3 basis points to 3.26%.

Loans: Interest income increased by $738 thousand, largely attributable to a $37.1 million increase in average loan balances. This increase was partially offset by a 4 basis point decline in loan yields, reflecting increased interest income reversals due to changes in nonaccrual status compared to the prior quarter.
Borrowings: Interest expense increased by $265 thousand, mainly due to a $29.5 million increase in average balances of Federal Home Loan Bank ("FHLB") advances.
Deposits: Interest expense decreased slightly by $33 thousand, primarily due to an 11 basis point reduction in interest-bearing deposit costs, reflecting the repricing of time deposits in response to the downward shift in federal funds rate that began in the late 2024. The decrease was nearly offset by a $24.6 million increase in average interest-bearing deposit balances.

Third Quarter 2025 vs. Third Quarter 2024

Net interest income increased by $3.8 million, or 23%. The increase was due to loan growth and lower deposit rates. These changes were partially offset by interest-bearing deposit growth. Net interest margin rose 31 basis points to 3.26%.

Loans: Interest income increased by $3.1 million, largely driven by a $226.3 million increase in average loan balances. This increase was partially offset by a 14 basis point decline in loan yields, reflecting the repricing of existing loans at lower interest rates following the 2024 reduction in the federal funds rate.
Deposits: Interest expense decreased by $479 thousand, mainly driven by a 78 basis point reduction in interest-bearing deposit costs, resulting from the repricing of deposit products in response to the federal funds rate cut implemented in 2024. This decrease was partially offset by a $230.2 million increase in average interest-bearing deposit balances.

Provision for Credit Losses

($ in thousands)	For the Three Months Ended								$ Change 3Q2025 vs.
($ in thousands)		3Q2025			2Q2025			3Q2024		2Q2025			3Q2024
Provision for credit losses on loans	$	1,206		$	1,255		$	234	$	(49	)	$	972
Provision for (reversal of) credit losses on off-balance sheet exposure		(31	)		(49	)		214		18			(245	)
Provision for credit losses	$	1,175		$	1,206		$	448	$	(31	)	$	727

Third Quarter 2025 vs. Second Quarter 2025

Provision for credit losses on loans remained relatively stable, decreasing by $49 thousand. The modest decline was primarily driven by reductions in qualitative reserves, following qualitative factor adjustments made after management reassessed the underlying assumptions. These adjustments were mostly offset by the increases resulting from risk rating downgrades and net charge-offs.

Third Quarter 2025 vs. Third Quarter 2024

Provision for credit losses on loans increased by $972 thousand, primarily due to higher historical loss factors stemming from risk rating downgrades, increased specific reserves, net charge-offs, and loan growth compared to the prior period.

Noninterest Income


($ in thousands)	For the Three Months Ended						% Change 3Q2025 vs.
($ in thousands)		3Q2025		2Q2025		3Q2024	2Q2025		3Q2024
Noninterest Income
Service charges on deposits	$	725	$	1,017	$	889	(29	)%	(18	)%
Loan servicing fees, net of amortization		724		900		693	(20	)	4
Gains on sale of loans		2,037		1,441		2,088	41		(2	)
Other income		644		610		570	6		13
Total noninterest income	$	4,130	$	3,968	$	4,240	4	%	(3	)%

Third Quarter 2025 vs. Second Quarter 2025

Noninterest income increased by $162 thousand, or 4%, primarily due to higher gains on sale of loans, partially offset by declines in service charges on deposits and loan servicing fees.

Gains on Sale of Loans: Increased by $596 thousand, primarily driven by higher SBA loan sale activity. During the quarter, the Bank sold $36.8 million in SBA loans at an average premium rate of 6.71%, compared to $25.3 million sold at an average premium rate of 7.05% in the prior period.
Service Charges on Deposits: Decreased by $292 thousand, primarily due to the closure of certain currency exchange-related accounts.
Loan Servicing Fees, Net of Amortization: Decreased by $176 thousand, mainly due to higher amortization of servicing assets, reflecting elevated payoff activity within servicing portfolio.

Third Quarter 2025 vs. Third Quarter 2024

Noninterest income decreased by $110 thousand, or 3%, primarily due to lower service charges on deposits.

Service Charges on Deposits: Decreased by $164 thousand, largely driven by the closure of certain currency exchange-related accounts.

Noninterest Expense


($ in thousands)	For the Three Months Ended						% Change 3Q2025 vs.
($ in thousands)		3Q2025		2Q2025		3Q2024	2Q2025		3Q2024
Noninterest Expense
Salaries and employee benefits	$	8,892	$	9,075	$	8,031	(2	)%	11	%
Occupancy and equipment		1,676		1,584		1,676	6		—
Data processing and communication		263		306		634	(14	)	(59	)
Professional fees		419		418		346	0		21
FDIC insurance and regulatory assessments		428		506		391	(15	)	9
Promotion and advertising		126		232		151	(46	)	(17	)
Directors' fees		151		198		154	(24	)	(2	)
Foundation donation and other contributions		671		636		549	6		22
Other expenses		1,003		1,082		788	(7	)	27
Total noninterest expense	$	13,629	$	14,037	$	12,720	(3	)%	7	%

Third Quarter 2025 vs. Second Quarter 2025

Noninterest expense decreased by $408 thousand, or 3%, primarily due to reductions in salaries and employee benefits, promotion and advertising, and other expenses.

Salaries and Employee Benefits: Decreased by $183 thousand, mainly due to lower incentive compensation accruals, resulting from a non-recurring adjustment recognized in the prior quarter.
Promotion and Advertising: Decreased by $106 thousand, reflecting the absence of a one-time accrual adjustment that was recorded in the second quarter of 2025.
Other Expenses: Decreased by $79 thousand, primarily due to reduced armored car service costs following the closure of certain currency exchange-related accounts.

Third Quarter 2025 vs. Third Quarter 2024

Noninterest expense increased by $909 thousand, or 7%, primarily due to higher salaries and employee benefits, and other expenses, partially offset by lower data processing and communication.

Salaries and Employee Benefits: Increased by $861 thousand, mainly driven by staffing growth and annual merit-based salary adjustments. Higher health insurance costs also contributed to the increase in employee benefits.
Other Expenses: Increased by $215 thousand, primarily due to reclassification of credit-related fees collections from contra-expense to income in 2025. This regrouping reflects a change in presentation rather than a change in underlying activity.
Data Processing and Communication: Decreased by $371 thousand, largely due to contractual credits received following the conversion to a new core banking system in the fourth quarter of 2024.

Income Tax Expense

Third Quarter 2025 vs. Second Quarter 2025

Income tax expense increased by $856 thousand to $3.0 million, with the effective tax rate rising to 30.7% from 25.0%. The increases were primarily driven by higher pre-tax income and a one-time revaluation of deferred tax assets, associated with the adoption of the California's single sales factor apportionment method and the implementation of an enhanced interim state tax apportionment methodology.

Third Quarter 2025 vs. Third Quarter 2024

Income tax expense increased by $827 thousand to $3.0 million, with the effective tax rate rising to 30.7% from 28.3%. The increases were primarily attributable to the factors noted above.

BALANCE SHEET HIGHLIGHTS

Loans


($ in thousands)	As of						% Change 3Q2025 vs.
($ in thousands)		3Q2025		2Q2025		3Q2024	2Q2025		3Q2024
CRE	$	1,092,808	$	1,021,431	$	966,472	7	%	13	%
SBA		256,211		263,424		252,379	(3	)	2
C&I		214,419		193,359		212,476	11		1
Home mortgage		587,641		593,256		499,666	(1	)	18
Consumer & other		138		110		14	25		886
Gross loans	$	2,151,217	$	2,071,580	$	1,931,007	4	%	11	%

The following table presents loan originations and the corresponding weighted average contractual rates for the periods indicated:


($ in thousands)	For the Three Months Ended												% Change in Amounts 3Q2025 vs.
	3Q2025				2Q2025				3Q2024				2Q2025		3Q2024
	Amount		Rate		Amount		Rate		Amount		Rate		2Q2025		3Q2024
CRE	$	98,799	6.36	%	$	39,734	7.00	%	$	64,249	7.50	%	149	%	54	%
SBA		15,051	8.72			33,811	8.64			20,167	9.75		(55	)

OP Bancorp Reports Third Quarter 2025 Net Income of $6.7 Million, Diluted EPS of $0.45