compared with third quarter 2025 net income of $6.7 million, diluted EPS of $0.45, and fourth quarter 2024 net income of $5.0 million, diluted EPS of $0.33

Higher net interest income; lower provision for credit losses

OP Bancorp (the "Company") (NASDAQ:OPBK), parent company of Open Bank, today reported:


	As of and For the Quarter									Fourth Quarter Highlights
($ in thousands, except per share data)	4Q2025			3Q2025			4Q2024			Comparisons reflect 4Q25 vs. 3Q25
Income Statement:										Income Statement
Net interest income	$	20,863		$	20,346		$	16,929		Net interest income increased 3%. Revenue remained relatively stable, and net interest margin was nearly unchanged. Provision for credit losses decreased 61%. Net income increased 5%. Diluted EPS increased $0.02 to $0.47.
Noninterest income		3,418			4,130			4,417
Revenue		24,281			24,476			21,346
Provision for credit losses		463			1,175			1,547
Noninterest expense		14,293			13,629			13,133
Net income	$	7,059		$	6,703		$	4,971
Diluted Earnings Per Share ("EPS")	$	0.47		$	0.45		$	0.33
Net interest margin ⁽¹⁾		3.25	%		3.26	%		2.96	%
Efficiency ratio ⁽²⁾		58.87			55.68			61.52
Balance Sheet:										Balance Sheet
Average loans ⁽³⁾	$	2,204,232		$	2,132,230		$	1,947,653		Average loans increased 3%. Average deposits increased 2%.
Average deposits		2,264,990			2,229,591			2,029,855		Average loans increased 3%. Average deposits increased 2%.
Credit Quality:										Credit Quality
Net recoveries (charge-offs) ⁽¹⁾ to average gross loans		0.03	%		(0.04	)%		(0.00	)%	Net loan recoveries (charge-offs) ratio remained at a low level. Allowance for credit losses to gross loans remained stable.
Allowance for credit losses on loans to gross loans		1.28			1.27			1.27
Selected Ratios:										Performance and Capital
Return on average assets ("ROA") ⁽¹⁾		1.07	%		1.04	%		0.84	%	ROA and ROE improved, reflecting stronger profitability and more efficient utilization of assets and equity.
Return on average equity ("ROE") ⁽¹⁾		12.57			12.36			9.75
Common equity tier 1 capital ("CET1")		10.93			10.92			11.35		CET1 remained robust, reflecting a solid capital position.

(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:

"Our fourth-quarter results highlight the continued strength and resilience of our Company. Net interest income increased 3%, and a more favorable economic outlook resulted in a 61% reduction in provision for credit losses while maintaining an adequate reserve level against credit risk. As a result, net income rose 5%, and diluted EPS also increased $0.02 to $0.47. On the balance sheet, average loans grew 3% and average deposits increased 2%, demonstrating the ongoing trust of our customers and the effectiveness of our relationship-driven approach. Asset quality remained stable, and our capital position stayed robust, underscoring the soundness of our risk management framework. As we close out 2025, we remain focused on executing our strategic priorities, supporting our customers and communities, and delivering long-term value for our shareholders," said Sang K. Oh, President and Chief Executive Officer.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin


	For the Three Months Ended						% Change 4Q2025 vs.
($ in thousands)	4Q2025		3Q2025		4Q2024		3Q2025		4Q2024
Interest Income
Interest income	$	39,282	$	38,522	$	35,051	2	%	12	%
Interest expense		18,419		18,176		18,122	1		2
Net interest income	$	20,863	$	20,346	$	16,929	3	%	23	%


	For the Three Months Ended												Average Yield/Rate Change 4Q2025 vs.
	4Q2025				3Q2025				4Q2024				Average Yield/Rate Change 4Q2025 vs.
($ in thousands)	Interest Income/Expense		Average Yield/Rate⁽¹⁾		Interest Income/Expense		Average Yield/Rate⁽¹⁾		Interest Income/Expense		Average Yield/Rate⁽¹⁾		3Q2025	4Q2024
Interest-earning Assets:
Loans	$	35,921	6.48	%	$	35,001	6.52	%	$	31,729	6.49	%	(4) bps	(1) bps
Total interest-earning assets		39,282	6.11			38,522	6.16			35,051	6.12		(5) bps	(1) bps
Interest-bearing Liabilities:
Interest-bearing deposits		17,324	3.97			17,442	4.07			17,182	4.60		(10) bps	(63) bps
Total interest-bearing liabilities		18,419	3.99			18,176	4.06			18,122	4.58		(7) bps	(59) bps
Ratios:
Net interest income / interest rate spreads		20,863	2.12			20,346	2.10			16,929	1.54		2 bps	58 bps
Net interest margin			3.25				3.26				2.96		(1) bps	29 bps
Total deposits / cost of deposits		17,324	3.03			17,442	3.10			17,182	3.37		(7) bps	(34) bps
Total funding liabilities / cost of funds		18,419	3.09			18,176	3.13			18,122	3.41		(4) bps	(32) bps

(1)

Annualized.


	For the Three Months Ended															Average Yield Change 4Q2025 vs.
	4Q2025					3Q2025					4Q2024					Average Yield Change 4Q2025 vs.
($ in thousands)	Interest Income			Average Yield⁽¹⁾		Interest Income			Average Yield⁽¹⁾		Interest Income			Average Yield⁽¹⁾		3Q2025	4Q2024
Loan Yield Component:
Contractual interest rate	$	35,010		6.31	%	$	34,263		6.39	%	$	31,406		6.42	%	(8) bps	(11) bps
Accretion of SBA loan discount⁽²⁾		966		0.17			972		0.18			813		0.17		(1) bps	0 bps
Amortization of net deferred fees		(17	)	(0.00	)		70		0.01			(47	)	(0.01	)	(1) bps	1 bps
Amortization of premium		(301	)	(0.05	)		(244	)	(0.05	)		(363	)	(0.07	)	— bps	2 bps
Amortization of premium - Home mortgage payoffs		(123	)	(0.02	)		(112	)	(0.02	)		—		—		— bps	(2) bps
Net interest recognized on nonaccrual loans		105		0.02			(175	)	(0.03	)		(232	)	(0.05	)	5 bps	7 bps
Prepayment penalty income and other fees⁽³⁾		281		0.05			227		0.04			152		0.03		1 bps	2 bps
Yield on loans	$	35,921		6.48	%	$	35,001		6.52	%	$	31,729		6.49	%	(4) bps	(1) bps

(1)		Annualized.
(2)		Includes discount accretion from SBA loan payoffs of $505 thousand, $499 thousand and $329 thousand for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.
(3)		Includes prepayment penalty income of $145 thousand, $127 thousand and $45 thousand for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively, from Commercial Real Estate ("CRE") and SBA loans.

Fourth Quarter 2025 vs. Third Quarter 2025

Net interest income increased by $517 thousand, or 3%, primarily driven by loan growth. This increase was partially offset by higher expense associated with the issuance of a new subordinated note and lower yields on the Federal Reserve account. Net interest margin contracted by 1 basis point to 3.25%.

Loans: Interest income increased by $920 thousand, largely attributable to a $72.0 million increase in average loan balances.
Cash and Cash Equivalents: Interest income decreased by $142 thousand, mainly due to a 46 basis point reduction in yields, reflecting the lower rates on the Federal Reserve account following recent rate cuts.
Deposits: Interest expense decreased slightly by $118 thousand, primarily due to a 10 basis point reduction in interest-bearing deposit costs, reflecting the repricing of deposit products following the decline in the federal funds rate. This benefit was mostly offset by a $31.6 million increase in average interest-bearing deposit balances.
Subordinated Note: Interest expense was $278 thousand, attributable to the issuance of $25 million in subordinated debt in November 2025.

Fourth Quarter 2025 vs. Fourth Quarter 2024

Net interest income increased by $3.9 million, or 23%. The increase was largely due to loan growth and lower deposit rates. These changes were partially offset by interest-bearing deposit growth. Net interest margin rose 29 basis points to 3.25%.

Loans: Interest income increased by $4.2 million, largely driven by a $256.6 million increase in average loan balances.
Deposits: Interest expense increased by $142 thousand, mainly driven by a $246.0 million increase in average interest-bearing deposit balances. This increase was mostly offset by a 63 basis point reduction in interest-bearing deposit costs, resulting from the repricing of time deposits in response to the federal funds rate cuts.

Provision for Credit Losses


	For the Three Months Ended									$ Change 4Q2025 vs.
($ in thousands)	4Q2025			3Q2025			4Q2024			3Q2025			4Q2024
Provision for credit losses on loans	$	518		$	1,206		$	1,859		$	(688	)	$	(1,341	)
Reversal of credit losses on off-balance sheet exposure		(55	)		(31	)		(312	)		(24	)		257
Provision for credit losses	$	463		$	1,175		$	1,547		$	(712	)	$	(1,084	)

Fourth Quarter 2025 vs. Third Quarter 2025

Provision for credit losses on loans decreased by $688 thousand, primarily driven by an improved qualitative outlook and lower net charge-offs, partially offset by higher quantitative reserves associated with risk-rating downgrades.

Fourth Quarter 2025 vs. Fourth Quarter 2024

Provision for credit losses on loans decreased by $1.3 million, primarily due to an improved qualitative outlook and lower specific reserves, partially offset by higher quantitative reserves resulting from risk-rating downgrades.

Noninterest Income


	For the Three Months Ended						% Change 4Q2025 vs.
($ in thousands)	4Q2025		3Q2025		4Q2024		3Q2025		4Q2024
Noninterest Income
Service charges on deposits	$	462	$	725	$	967	(36	)%	(52	)%
Loan servicing fees, net of amortization		650		724		858	(10	)	(24	)
Gains on sale of loans		1,573		2,037		2,197	(23	)	(28	)
Other income		733		644		395	14		86
Total noninterest income	$	3,418	$	4,130	$	4,417	(17	)%	(23	)%

Fourth Quarter 2025 vs. Third Quarter 2025

Noninterest income decreased by $712 thousand, or 17%, primarily due to lower gains on sale of loans and service charges on deposits.

Gains on Sale of Loans: Decreased by $464 thousand, primarily driven by lower SBA loan sale activity. During the quarter, the Bank sold $28.5 million in SBA loans at an average premium rate of 6.98%, compared to $36.8 million sold at an average premium rate of 6.71% in the prior period.
Service Charges on Deposits: Decreased by $263 thousand, primarily due to the closure of certain currency exchange-related accounts in the third quarter of 2025 and reduced balances in existing business analysis accounts.

Fourth Quarter 2025 vs. Fourth Quarter 2024

Noninterest income decreased by $999 thousand, or 23%, primarily due to lower gains on sale of loans and service charges on deposits.

Gains on Sale of Loans: Decreased by $624 thousand, primarily driven by lower SBA loan sale activity. During the quarter, the Bank sold $28.5 million in SBA loans at an average premium rate of 6.98%, compared to $34.7 million sold at an average premium rate of 7.82% in the prior period
Service Charges on Deposits: Decreased by $505 thousand, largely driven by lower balances in existing business analysis account and closure of certain currency exchange-related accounts in the third quarter of 2025.

Noninterest Expense


	For the Three Months Ended							% Change 4Q2025 vs.
($ in thousands)	4Q2025			3Q2025		4Q2024		3Q2025		4Q2024
Noninterest Expense
Salaries and employee benefits	$	9,244		$	8,892	$	8,277	4	%	12	%
Occupancy and equipment		1,919			1,676		1,682	14		14
Data processing and communication		591			263		594	125		(1	)
Professional fees		549			419		388	31		41
FDIC insurance and regulatory assessments		362			428		529	(15	)	(32	)
Promotion and advertising		(9	)		126		82	NM		NM
Directors' fees		148			151		151	(2	)	(2	)
Foundation donation and other contributions		707			671		480	5		47
Other expenses		782			1,003		950	(22	)	(18	)
Total noninterest expense	$	14,293		$	13,629	$	13,133	5	%	9	%

NM — Not meaningful

Fourth Quarter 2025 vs. Third Quarter 2025

Noninterest expense increased by $664 thousand, or 5%, primarily driven by higher salaries and employee benefits, data processing and communication, and occupancy and equipment. These increases were partially offset by lower other expenses, and promotion and advertising.

Salaries and Employee Benefits: Increased by $352 thousand, primarily due to higher incentive accruals driven by stronger SBA loan production.
Data Processing and Communication: Increased by $328 thousand, primarily due to adjustments associated with conversion credits from a new core system vendor.
Occupancy and equipment: Increased by $243 thousand, primarily due to the end of a common area maintenance concession on a lease that benefited the prior period.
Other Expenses: Decreased by $221 thousand, primarily due to lower business development expenses.

Fourth Quarter 2025 vs. Fourth Quarter 2024

Noninterest expense increased by $1.2 million, or 9%, primarily due to higher salaries and employee benefits.

Salaries and Employee Benefits: Increased by $967 thousand, mainly driven by staffing growth and annual salary adjustments effective April 2025. Higher incentive accruals further contributed to the increase.

Income Tax Expense

Fourth Quarter 2025 vs. Third Quarter 2025

Income tax expense decreased by $503 thousand to $2.5 million, with the effective tax rate declining to 25.9% from 30.7%. The decreases were primarily driven by a one-time revaluation of deferred tax assets in the prior period, resulting from the adoption of the California's single sales factor apportionment method and the implementation of an enhanced interim state tax apportionment methodology.

Fourth Quarter 2025 vs. Fourth Quarter 2024

Income tax expense increased by $771 thousand to $2.5 million, with the effective tax rate rising to 25.9% from 25.4%. The increase in income tax expense was primarily attributable to higher pre-tax income.

BALANCE SHEET HIGHLIGHTS

Loans


	As of						% Change 4Q2025 vs.
($ in thousands)	4Q2025		3Q2025		4Q2024		3Q2025		4Q2024
CRE	$	1,132,223	$	1,092,808	$	980,247	4	%	16	%
SBA		264,523		256,211		253,710	3		4
C&I		221,270		214,419		213,097	3		4
Home mortgage		574,300		587,641		509,524	(2	)	13
Consumer & other		1,353		138		274	880		394
Gross loans	$	2,193,669	$	2,151,217	$	1,956,852	2	%	12	%

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


	For the Three Months Ended												% Change in Amounts 4Q2025 vs.
	4Q2025				3Q2025				4Q2024
($ in thousands)	Amount		Rate		Amount		Rate		Amount		Rate		3Q2025		4Q2024
CRE	$	75,750	6.60	%	$	98,799	6.36	%	$	63,717	6.91	%	(23	)%	19	%
SBA		26,748	8.52			15,051	8.72			14,780	9.41		78		81
C&I		6,870	6.57			9,984	6.96			4,606	9.38		(31	)	49
Home mortgage		7,020	6.45			6,861	6.69			18,092	6.42		2		(61	)
Consumer and other		—	—			—	—			—	—		—		—
Gross loans ⁽¹⁾	$	116,388	7.03	%	$	130,695	6.69	%	$	101,195	7.30	%	(11	)%	15	%

OP Bancorp Reports Fourth Quarter 2025 Net Income of $7.1 Million, Diluted EPS of $0.47