EX-99.1 2 opbk-20221231xex991.htm EX-99.1 Document

Exhibit 99.1
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OP BANCORP REPORTS NET INCOME FOR 2022 FOURTH QUARTER
OF $8.0 MILLION AND DILUTED EARNINGS PER SHARE OF $0.51

2022 Fourth Quarter Highlights compared with 2021 Fourth Quarter:
•Financial Results:
◦Net income of $8.0 million, compared to $9.1 million
◦Diluted earnings per share of $0.51, compared to $0.59
◦Net interest income of $20.2 million, compared to $17.1 million
◦Net interest margin of 4.08%, compared to 4.07%
◦Provision for loan losses of $977 thousand, compared to $1.9 million
◦Total assets of $2.1 billion, a 21% increase compared to $1.7 billion
◦Total loans (1) of $1.7 billion, a 23% increase compared to $1.4 billion
◦Total deposits of $1.9 billion, a 23% increase compared to $1.5 billion
◦Noninterest-bearing deposits of $701.6 million, or 37.2% of total deposits
•Credit Quality:
◦Allowance for loan losses to gross loans of 1.13%, compared to 1.23%
◦Net loan charge-offs to average gross loans of 0.03%, compared to 0.05%
◦Nonperforming loans to gross loans of 0.18%, compared to 0.24%
◦Criticized loans (2) to gross loans of 0.23%, compared to 0.31%
•Capital Levels:
◦Quarterly cash dividend of $0.12 per share, a 20% increase from $0.10 per share
◦Remained well-capitalized with a Common Equity Tier 1 (“CET1”) ratio of 11.70%.
◦Book value per common share of $11.59, compared to $10.92
___________________________________________________________
(1)     Includes loans held for sale.
(2)     Includes special mention, substandard, doubtful, and loss categories.
LOS ANGELES, January 26, 2023 — OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank, today reported its financial results for the fourth quarter of 2022. Net income for the fourth quarter of 2022 was $8.0 million, or $0.51 per diluted common share, compared with $8.7 million, or $0.55 per diluted common share, for the third quarter of 2022, and $9.1 million, or $0.59 per diluted common share, for the fourth quarter of 2021.

1

Min Kim, President and Chief Executive Officer:
“Despite the challenging banking environment created by external headwinds related to prolonged inflation, Federal Reserve's drastic rate hikes, and economic slowdowns, we continued to report strong balance sheet growth with pristine asset quality. Based on the growth and strength of our balance sheet, we remain optimistic about future performance and will continue to focus on executing our strategic goals while maintaining appropriate risk and control environment.”



SELECTED FINANCIAL HIGHLIGHTS
($ in thousands, except per share data)As of and For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Selected Income Statement Data:
Net interest income$20,198 $20,344 $17,096 (0.7)%18.1 %
Provision for loan losses977 662 1,898 47.6 (48.5)
Noninterest income3,223 4,821 7,289 (33.1)(55.8)
Noninterest expense11,327 12,338 9,591 (8.2)18.1 
Income tax expense3,089 3,515 3,762 (12.1)(17.9)
Net Income$8,028 $8,650 $9,134 (7.2)%(12.1)%
Diluted earnings per share$0.51 $0.55 $0.59 (7.3)%(13.6)%
Selected Balance Sheet Data:
Total loans (1)
$1,722,627 $1,654,660 $1,403,447 4.1 %22.7 %
Total deposits$1,885,771 $1,816,811 $1,534,066 3.8 %22.9 %
Total assets$2,094,293 $2,029,575 $1,726,691 3.2 %21.3 %
Average loans (1)
$1,691,642 $1,614,000 $1,343,414 4.8 %25.9 %
Average deposits$1,836,736 $1,753,726 $1,545,799 4.7 %18.8 %
Credit Quality:
Nonperforming loans$3,080 $2,251 $3,200 36.8 %(3.8)%
Net charge-offs (recoveries) to average gross loans (2)
0.03 %(0.00)%0.05 %0.03 %(0.02)%
Allowance for loan losses to gross loans1.13 %1.14 %1.23 %(0.01)%(0.10)%
Financial Ratios:
Return on average assets (2)
1.56 %1.77 %2.11 %(0.21)%(0.55)%
Return on average equity (2)
18.58 %19.91 %22.68 %(1.33)%(4.10)%
Net interest margin (2)
4.08 %4.31 %4.07 %(0.23)%0.01 %
Common equity tier 1 capital ratio11.70 %11.92 %12.42 %(0.22)%(0.72)%
Leverage ratio9.38 %9.52 %9.58 %(0.14)%(0.20)%
Efficiency ratio (3)
48.36 %49.03 %39.34 %(0.67)%9.02 %
Book value per common share$11.59 $11.19 $10.92 3.6 %6.1 %
(1)Includes loans held for sale.
(2)Annualized.
(3)Represents noninterest expense divided by the sum of net interest income and noninterest income.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
2

($ in thousands)For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Interest Income
Interest income$26,886 $23,234 $17,822 15.7 %50.9 %
Interest expense6,688 2,890 726 131.4 821.2 
Net interest income$20,198 $20,344 $17,096 (0.7)%18.1 %

($ in thousands)For the Three Months Ended
4Q223Q224Q21
Average BalanceInterest
and Fees
Yield/Rate (1)
Average BalanceInterest
and Fees
Yield/Rate (1)
Average BalanceInterest
and Fees
Yield/Rate (1)
Interest-earning Assets
Loans$1,691,642 $24,719 5.81 %$1,614,000 $21,780 5.36 %$1,343,414 $17,271 5.10 %
Total interest-earning assets$1,966,165 $26,886 5.43 %$1,874,516 $23,234 4.92 %$1,668,865 $17,822 4.24 %
Interest-bearing Liabilities
Interest-bearing deposits$1,085,331 $6,598 2.41 %$947,437 $2,889 1.21 %$780,787 $726 0.37 %
Total interest-bearing liabilities$1,093,489 $6,688 2.43 %$947,567 $2,890 1.21 %$780,791 $726 0.37 %
Ratios
Net interest Income/interest rate spreads$20,198 3.01 %$20,344 3.71 %$17,096 3.87 %
Net interest margin4.08 %4.31 %4.07 %
Total deposits / cost of deposits$1,836,736 $6,598 1.43 %$1,753,726 $2,889 0.65 %$1,545,799 $726 0.19 %
Total funding liabilities / cost of funds$1,844,894 $6,688 1.44 %$1,753,856 $2,890 0.65 %$1,545,803 $726 0.19 %
(1)Annualized.

($ in thousands)For the Three Months EndedYield Change 4Q22 vs.
4Q223Q224Q21
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
Interest
& Fees
Yield (1)
3Q224Q21
Loan Yield Component
Contractual interest rate$23,694 5.57 %$20,419 5.02 %$14,509 4.29 %0.55 %1.28 %
SBA discount accretion1,034 0.24 1,336 0.33 1,571 0.46 (0.09)(0.22)
Amortization of net deferred fees46 0.01 122 0.03 1,087 0.32 (0.02)(0.31)
Amortization of premium(344)(0.08)(250)(0.06)3 — (0.02)(0.08)
Net interest recognized on nonaccrual loans— — — — (16)— — — 
 Prepayment penalties (2) and other fees
289 0.07 153 0.04 117 0.03 0.03 0.04 
Yield on loans$24,719 5.81 %$21,780 5.36 %$17,271 5.10 %0.45 %0.71 %
Amortization of net deferred fees:
PPP loan forgiveness (3)
$15 — %$146 0.04 %$920 0.27 %(0.04)%(0.27)%
Other31 0.01 (24)-0.01 167 0.05 0.02 (0.04)
Total amortization of net deferred fees$46 0.01 %$122 0.03 %$1,087 0.32 %(0.02)%(0.31)%
(1)Annualized.
(2)Prepayment penalty income of $172 thousand, $79 thousand and $84 thousand for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively, was from commercial real estate and C&I loans.
(3)As of December 31, 2022, there were unamortized net deferred fees and unaccredited discounts of $8 thousand to be recognized over the estimated life of the loans as a yield adjustment on the loans.
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Impact of Hana Loan Purchase on Average Loan Yield and Net Interest Margin

During the second quarter of 2021, the Company purchased an SBA portfolio of 638 loans with an ending balance of $100.0 million, excluding loan discount of $8.9 million from Hana Small Business Lending, Inc. (“Hana”). The following table presents impacts of the Hana loan purchase on average loan yield and net interest margin:
($ in thousands)For the Three Months Ended
4Q223Q224Q21
Hana Loan Purchase:
Contractual interest rate$1,286 $1,114 $1,027 
Purchased loan discount accretion374 594 826 
Other fees25 9 10 
Total interest income$1,685 $1,717 $1,863 
Effect on average loan yield (1)
0.20 %0.21 %0.26 %
Effect on net interest margin (1)
0.22 %0.22 %0.26 %

($ in thousands)For the Three Months Ended
4Q223Q224Q21
Average
Balance		Interest
and Fees		Yield/
Rate		Average
Balance		Interest
and Fees		Yield/
Rate		Average
Balance		Interest
and Fees		Yield/
Rate
Average loan yield (1)
$1,691,642 $24,719 5.81 %$1,614,000 $21,780 5.36 %$1,343,414 $17,271 5.10 %
Adjusted average loan yield excluding purchased Hana loans (1)(2)
$1,631,128 $23,034 5.61 %$1,549,313 $20,063 5.15 %$1,263,789 $15,408 4.84 %
Net interest margin (1)
$1,966,165 $20,198 4.08 %$1,874,516 $20,344 4.31 %$1,668,865 $17,096 4.07 %
Adjusted interest margin excluding purchased Hana loans (1)(2)
$1,905,651 $18,513 3.86 %$1,809,829 $18,627 4.09 %$1,589,240 $15,233 3.81 %
(1)Annualized.
(2)See reconciliation of GAAP to non-GAAP financial measures.

Fourth Quarter 2022 vs. Third Quarter 2022
Net interest income decreased $146 thousand, or 0.7%, primarily due to higher interest expense on deposits. Net interest margin was 4.08%, a decrease of 23 basis points from 4.31%.
◦A $2.9 million increase in interest income on loans was primarily due to a 55 basis point increase in contractual loan yield as a result of market rate increases by the Federal Reserve and a $77.6 million increase in average loan balance.
◦A $3.7 million increase in interest expense on deposits was primarily due to a 120 basis point increase in average cost of interest-bearing deposits driven by the Federal Reserve’s rate increases.
◦Average loan yield was 5.81%, a 45 basis point increase from 5.36%, primarily due to a 55 basis point increase in contractual loan yield driven by repricing of variable rate loans and higher rates on new loans, partially offset by a 9 basis points decrease in SBA discount accretion income as a result of lower SBA loan payoffs.
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◦Average cost of interest-bearing deposits was 2.41%, a 120 basis point increase from 1.21%. Average cost of deposits was 1.43%, a 78 basis point increase from 0.65%.

Fourth Quarter 2022 vs. Fourth Quarter 2021
Net interest income increased $3.1 million, or 18.1%, primarily due to higher interest income on loans. Net interest margin was 4.08%, an increase of 1 basis point from 4.07%.
◦A $7.4 million increase in interest income on loans was primarily due to a 128 basis point increase in contractual loan yield as a result of market rate increases by the Federal Reserve and a $348.2 million increase in average loan balance.
◦A $5.9 million increase in interest expense on deposits was primarily due to a 204 basis point increase in average cost of interest-bearing deposits driven by the Federal Reserve’s rate increases.
◦Average loan yield was 5.81%, a 71 basis point increase from 5.10%, primarily due to a 128 basis point increase in contractual loan yield driven by repricing of variable rate loans and higher rates on new loans, partially offset by a 22 basis point decrease in SBA discount accretion income as a result of lower SBA loan payoffs and a 31 basis point decrease in amortization of net deferred fees as a result of lower net deferred fees on SBA Paycheck Protection Program (“PPP”) loans.
◦Average yield on interesting-bearing deposits in other banks was 3.78%, a 363 basis point increase from 0.15%. Average yield on available-for-sale debt securities was 2.66%, a 147 basis point increase from 1.19%, primarily due to higher yields on securities purchased in 2022.
◦Average cost of interest-bearing deposits was 2.41%, a 204 basis point increase from 0.37%. Average cost of deposits was 1.43%, a 124 basis point increase from 0.19%.
Provision for loan losses
Fourth Quarter 2022 vs. Third Quarter 2022
The Company recorded $977 thousand provision for loan losses, an increase of $315 thousand, compared with a $662 thousand provision for loan losses. The $977 thousand provision for loan losses was primarily due to an increase of $834 thousand in quantitative reserves from loan growth in home mortgage and SBA loans.

Fourth Quarter 2022 vs. Fourth Quarter 2021
The Company recorded $977 thousand provision for loan losses, a decrease of $921 thousand, compared with $1.9 million provision for loan losses.

5

Noninterest Income
($ in thousands)For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Noninterest income
Service charges on deposits$406 $454 $405 (10.6)%0.2 %
Loan servicing fees, net of amortization705 610 521 15.6 35.3 
Gain on sale of loans1,684 3,490 6,033 (51.7)(72.1)
Other income428 267 330 60.3 29.7 
Total noninterest income$3,223 $4,821 $7,289 (33.1)%(55.8)%
Fourth Quarter 2022 vs. Third Quarter 2022
Noninterest income decreased $1.6 million, or 33.1%, primarily due to lower gain on sale of loans.
◦Gain on sale of loans was $1.7 million, down $1.8 million, primarily due to lower SBA loan sold on lower average sales premium. The Company sold $32.2 million in SBA loans at an average premium rate of 6.13%, compared to the sale of $59.3 million at an average premium rate of 6.67%.

Fourth Quarter 2022 vs. Fourth Quarter 2021
Noninterest income decreased $4.1 million, or 55.8%, primarily due to lower gain on sale of loans.
◦Gain on sale of loans was $1.7 million, down $4.3 million, primarily due to lower SBA loans sold on lower average sales premium. The Company sold $32.2 million in SBA loans at an average premium rate of 6.13%, compared to the sale of $56.8 million at an average premium rate of 10.98%.
6


Noninterest Expense
($ in thousands)For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Noninterest expense
Salaries and employee benefits$7,080 $7,343 $5,560 (3.6)%27.3 %
Occupancy and equipment1,560 1,537 1,418 1.5 10.0 
Data processing and communication514 586 637 (12.3)(19.3)
Professional fees330 602 267 (45.2)23.6 
FDIC insurance and regulatory assessments176 238 182 (26.1)(3.3)
Promotion and advertising12 177 156 (93.2)(92.3)
Directors’ fees145 170 166 (14.7)(12.7)
Foundation donation and other contributions851 875 901 (2.7)(5.5)
Other expenses659 810 304 (18.6)116.8 
Total noninterest expense$11,327 $12,338 $9,591 (8.2)%18.1 %

Fourth Quarter 2022 vs. Third Quarter 2022
Noninterest expense decreased $1.0 million, or 8.2%, primarily due to lower salaries and employee benefits and professional fees.
◦Salaries and employee benefits were $7.1 million, down $263 thousand from $7.3 million. The decrease was primarily due to a decrease in employee incentive accruals, partially offset by an increase in salaries.
◦Professional fees and promotion and advertising decreased $272 thousand and $165 thousand, respectively, primarily due to year-end accrual adjustments.
Fourth Quarter 2022 vs. Fourth Quarter 2021
Noninterest expense increased $1.7 million, or 18.1%, primarily due to higher salaries and employee benefits and other expenses.
◦Salaries and employee benefits were $7.1 million, up $1.5 million from $5.6 million. The increase was primarily due to 30 additional employees to support continued growth of the Company.
◦Other expenses were $659 thousand, up $355 thousand from $304 thousand, primarily due to an increase in business development expense.
Income Tax Expense
Fourth Quarter 2022 vs. Third Quarter 2022
Income tax expense was $3.1 million, and the effective tax rate was 27.8%, compared to income tax expense of $3.5 million and the effective rate of 28.9%.
Fourth Quarter 2022 vs. Fourth Quarter 2021

Income tax expense was $3.1 million and the effective tax rate was 27.8%, compared to income tax expense of $3.8 million and the effective rate of 29.2%.
7


BALANCE SHEET HIGHLIGHTS

Loans
($ in thousands)As of% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Real estate loans$842,208 $830,125 $701,450 1.5 %20.1 %
SBA loans (1)
263,644 232,569 275,858 13.4 (4.4)
C&I loans116,951 133,855 162,543 (12.6)(28.0)
Home mortgage loans482,949 419,469 173,303 15.1 178.7 
Consumer & other loans1,467 2,000 865 (26.7)69.6 
Gross loans$1,707,219 $1,618,018 $1,314,019 5.5 %29.9 %
(1)Includes PPP loans of $442 thousand, $1.1 million and $40.6 million as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

The following table presents new loan originations based on loan commitment amounts for the periods indicated:
($ in thousands)For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Real estate loans$44,416 $43,929 $35,458 1.1 %25.3 %
SBA loans (1)
55,594 43,984 65,492 26.4 (15.1)
C&I loans46,014 39,720 47,981 15.8 (4.1)
Home mortgage loans28,188 68,842 19,295 (59.1)46.1 
Consumer & other loans— 2,500 — (100.0)— 
Gross loans$174,212 $198,975 $168,226 (12.4)%3.6 %
(1)There were no new PPP originations for the periods indicated.

The following table presents changes in gross loans by loan activity for the periods indicated:
($ in thousands)For the Three Months Ended
4Q223Q224Q21
Gross loans, beginning$1,618,018 $1,484,718 $1,231,821 
New originations174,212 198,975 168,226 
Net line advances(80,144)(11,358)7,759 
Purchases49,980 37,146 48,915 
Sales(32,204)(59,293)(68,064)
Paydowns(22,939)(19,087)(12,373)
Payoffs(23,238)(37,817)(46,778)
PPP Payoffs(657)(7,206)(29,918)
Other24,191 31,940 14,431 
Total89,201 133,300 82,198 
Gross loans, ending$1,707,219 $1,618,018 $1,314,019 
As of December 31, 2022 vs. September 30, 2022

Gross loans were $1.71 billion as of December 31, 2022, up $89.2 million from September 30, 2022, primarily due to new loan originations and home mortgage loan purchases.
8


Home mortgage loans of $39.0 million and real estate loans of $11.0 million were purchased from third party mortgage originators in the fourth quarter of 2022, compared to total purchases of $37.1 million in the third quarter of 2022. New loan originations and loan payoffs were $174.2 million and $23.9 million for the fourth quarter of 2022, respectively, compared with $199.0 million and $45.0 million for the third quarter of 2022, respectively. Of the PPP loans, $636 thousand in principal amount has been forgiven under the program, compared to a $7.2 million of PPP loans forgiven in the third quarter of 2022.
As of December 31, 2022 vs. December 31, 2021

Gross loans were $1.71 billion as of December 31, 2022, up $393.2 million from December 31, 2021, primarily due to new loan originations of $645.2 million and loan purchases of $225.1 million, partially offset by loan sales of $182.3 million and loan payoffs of $180.8 million.

The following table presents the composition of gross loans by interest rate type accompanied with the weighted average contractual rates as of the periods indicated:
($ in thousands)As of
4Q223Q224Q21
%Rate%Rate%Rate
Fixed rate35.4 %4.63 %35.2 %4.39 %31.5 %4.12 %
Hybrid rate33.3 4.79 34.1 4.59 22.8 4.45 
Variable rate31.3 8.01 30.7 6.97 45.7 4.94 
Gross loans100.0 %5.74 %100.0 %5.25 %100.0 %4.57 %

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The following table presents the maturity of gross loans by interest rate type accompanied with the weighted average contractual rates for the periods indicated:
($ in thousands)As of December 31, 2022
Within One YearOne Year Through Five YearsAfter Five YearsTotal
AmountRateAmountRateAmountRateAmountRate
Fixed rate$30,168 4.44 %$337,054 4.59 %$237,195 4.72 %$604,417 4.63 %
Hybrid rate6,472 7.09 52,902 5.06 508,550 4.73 567,924 4.79 
Variable rate63,021 8.22 148,498 7.93 323,359 8.00 534,878 8.01 
Gross loans$99,661 7.00 %$538,454 5.56 %$1,069,104 5.72 %$1,707,219 5.74 %
Deposits
($ in thousands)As of% Change 4Q22 vs.
4Q223Q224Q21
Amount%Amount%Amount%3Q224Q21
Noninterest-bearing deposits$701,584 37.2 %$794,631 43.7 %$774,754 50.5 %(11.7)%(9.4)%
Money market deposits and others526,321 27.9 %524,911 28.9 380,226 24.8 %0.3 38.4 
Time deposits657,866 34.9 %497,269 27.4 379,086 24.7 %32.3 73.5 
Total deposits$1,885,771 100.0 %$1,816,811 100.0 %$1,534,066 100.0 %3.8 %22.9 %
As of December 31, 2022 vs. September 30, 2022

Total deposits were $1.89 billion as of December 31, 2022, up $69.0 million from September 30, 2022, primarily due to growth in time deposits, partially offset by a decrease in noninterest-bearing deposits. Time deposits grew $160.6 million, due to management’s actions to support loan growth during the third quarter of 2022 including upward adjustments of interest rates on customer deposits and increases in wholesale deposits. Noninterest-bearing deposits decreased $93.0 million, primarily due to decreases in lower transaction volumes in escrow and 1031 exchanges accounts and other decreases affected by market rate increases by the Federal Reserve.
As of December 31, 2022 vs. December 31, 2021

Total deposits were $1.89 billion as of December 31, 2022, up $351.7 million from December 31, 2021, primarily driven by growth in time deposits and money market deposits, offset by a decrease in noninterest-bearing deposits. Time deposits grew $278.8 million to $657.9 million from $379.1 million, and money market deposits increased $146.1 million to $526.3 million from $380.2 million. Noninterest-bearing deposits decreased $73.2 million, primarily due to decreases in lower transaction volumes in escrow and 1031 exchanges accounts and other decreases affected by market rate increases by the Federal Reserve.

10

The following table sets forth the maturity of time deposits as of December 31, 2022:
As of December 31, 2022
($ in thousands)Within Three
Months		Three to
Six Months		Six to Nine MonthsNine to Twelve
Months		After
Twelve Months		Total
Time deposits (more than $250,000)$82,676 $26,156 $61,254 $183,822 $2,289 $356,197 
Time deposits ($250,000 or less)36,551 50,759 44,829 144,495 25,035 301,669 
Total time deposits$119,227 $76,915 $106,083 $328,317 $27,324 $657,866 
Weighted average rate3.03 %3.02 %2.36 %4.06 %3.83 %3.47 %

Capital and Cash Dividend
Basel III
OP Bancorp (1)
Open BankMinimum Well
Capitalized
Ratio
Minimum
Capital Ratio+
Conservation
Buffer (2)
Risk-Based Capital Ratios:
Total risk-based capital ratio12.87 %12.76 %10.00 %10.50 %
Tier 1 risk-based capital ratio11.70 %11.59 %8.00 %8.50 %
Common equity tier 1 ratio11.70 %11.59 %6.50 %7.00 %
Leverage ratio9.38 %9.29 %5.00 %4.00 %
(1)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
(2)An additional 2.5% capital conservation buffer above the minimum capital ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonus to executive officers.

OP BancorpBasel III% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Risk-Based Capital Ratios:
Total risk-based capital ratio12.87 %13.51 %13.81 %(0.64)%(0.94)%
Tier 1 risk-based capital ratio11.70 %12.29 %12.63 %(0.59)%(0.93)%
Common equity tier 1 ratio11.70 %12.29 %12.63 %(0.59)%(0.93)%
Leverage ratio9.38 %9.48 %9.75 %(0.10)%(0.37)%
Risk-weighted Assets ($ in thousands)$1,661,095 $1,465,707 $1,251,867 13.33 %32.69 %

Capital ratios remained strong during the quarter. Our CET1 and total risk-based capital ratios were 11.70% and 12.87% as of December 31, 2022, down 93 basis points and 94 basis points from a year ago, respectively. The decreases in capital ratios were primarily due to year-over-year asset growth.

The Company’s Board of Directors has declared a quarterly cash dividend of $0.12 per share of its common stock. The cash dividend is payable on or about February 23, 2023 to all shareholders of record as of the close of business on February 9, 2023.

The Company did not repurchase any shares during the fourth quarter of 2022. Since the announcement of the initial stock repurchase program in January 2019, the Company has repurchased a total of 1.57 million shares of its common stock at an average repurchase price of $8.58 per share through December 31, 2022.
11

Asset Quality
($ in thousands)As of and For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Nonperforming loans (1)
$3,080 $2,251 $3,200 36.8 %(3.8)%
OREO— — — — — 
Total nonperforming assets$3,080 $2,251 $3,200 36.8 %(3.8)%
Nonperforming loans to gross loans0.18 %0.14 %0.24 %0.04 %(0.06)%
Nonperforming assets to total assets0.15 %0.11 %0.19 %0.04 %(0.04)%
Criticized (2) Loan:
Special mention loans$563 $— $— — %— %
Classified loans (3)
3,307 3,542 4,039 (6.6)(18.1)
Total criticized loans$3,870 $3,542 $4,039 9.3 %(4.2)%
Criticized (2) loans to gross loans
0.23 %0.22 %0.31 %0.01 %(0.08)%
Classified loans (3) to gross loans
0.19 %0.22 %0.31 %(0.03)%(0.12)%
Allowance for loan losses, beginning$18,369 $17,702 $14,134 3.8 %30.0 %
Provision for loan losses (4)
977 662 2,157 47.6 (54.7)
Gross charge-offs(109)— (168)n/m(35.1)
Gross recoveries4 5 — (20.0)n/m
Allowance for loan losses, ending (5)
$19,241 $18,369 $16,123 4.7 %19.3 %
Allowance for loan losses ratios:
As a % of gross loans1.13 %1.14 %1.23 %(0.01)%(0.10)%
As an adjusted % of gross loans (6)
1.16 %1.18 %1.36 %(0.02)%(0.20)%
As a % of nonperforming loans625 %816 %503 %(191)%122 %
As a % of nonperforming assets625 %816 %503 %(191)%122 %
Net charge-offs (recoveries) to average gross loans0.03 %(0.00)%0.05 %0.03 %(0.02)%
(1)Includes the guaranteed portion of SBA loans totaling $1.0 million, $442 thousand and $1.2 million as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(2)Includes special mention, substandard, doubtful and loss categories.
(3)Includes substandard, doubtful and loss categories.
(4)Excludes reversal of uncollectible accrued interest receivable of $259 thousand for the three months ended December 31, 2021.
(5)Excludes allowance for uncollectible accrued interest receivable of $205 thousand as of December 31, 2021.
(6)See the Reconciliation of GAAP to NON-GAAP Financial Measures.

Overall, the Company continued to maintain solid asset quality with low levels of nonperforming loans and net charge-offs. Nonperforming assets and criticized loans remained below our historical
12

norms, a reflection of our conservative credit culture and expertise in the industries we serve. Our allowance remained strong with an adjusted allowance to gross loans ratio of 1.16%.
◦Allowance for loan losses increased $3.1 million to $19.2 million from a year ago. Excluding the impacts of the purchased Hana loans, PPP loans, adjusted allowance to gross loans ratio was 1.16% as of December 31, 2022.
◦Criticized loans decreased by $169 thousand or 4.2% from a year ago, and the criticized loans to gross loans ratio decreased by 8 basis points. Criticized loans are generally consistent with the Special Mention, Substandard, Doubtful and Loss categories defined by regulatory authorities.
◦Nonperforming assets decreased $120 thousand to $3.1 million, or 0.15% of total assets from a year ago. As of December 31, 2022, $606 thousand of nonaccrual loans was the guaranteed portion of SBA loans that are in liquidation. The Company did not have OREO as of December 31, 2022 or 2021.
◦Net charge-offs were $105 thousand or 0.03% of average loans in the fourth quarter of 2022, compared to $168 thousand, or 0.05%, of average loans in the fourth quarter of 2021.

COVID-19 Pandemic Update

As of December 31, 2022, no loan was under COVID-19 loan payment modification.

Since the PPP’s inception through December 31, 2022, we have funded $154.5 million, and $154.0 million of principal forgiveness has been provided on qualifying PPP loans.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

In addition to GAAP measures, management uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance.

Pre-provision net revenue removes provision for loan losses and income tax expense. Management believes that this non-GAAP measure, when taken together with the corresponding GAAP financial measures (as applicable), provides meaningful supplemental information regarding our performance. This non-GAAP financial measure also facilitates a comparison of our performance to prior periods.

($ in thousands)For the Three Months Ended
4Q223Q224Q21
Interest income$26,886 $23,234 $17,822 
Interest expense6,688 2,890 726 
Net interest income20,198 20,344 17,096 
Noninterest income3,223 4,821 7,289 
Noninterest expense11,327 12,338 9,591 
Pre-provision net revenue(a)$12,094 $12,827 $14,794 
Reconciliation to net income:
Provision for loan losses(b)$977 $662 $1,898 
Income tax expense(c)3,089 3,515 3,762 
Net income(a)+(b) +(c)$8,028 $8,650 $9,134 
13


During the second quarter of 2021, the Company purchased 638 loans from Hana for a total purchase price of $97.6 million. The Company evaluated $100.0 million of the loans purchased in accordance with the provisions of ASC 310-20, Nonrefundable Fees and Other Costs, which were recorded with a $8.9 million discount. As a result, the fair value discount on these loans is being accreted into interest income over the expected life of the loans using the effective yield method. Adjusted loan yield and net interest margin for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021 excluded the impacts of contractual interest and discount accretion of the purchased Hana loans as management does not consider purchasing loan portfolios to be normal or recurring transactions. Management believes that presenting the adjusted average loan yield and net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company’s performance.

($ in thousands)For the Three Months Ended
4Q223Q224Q21
Yield on Average Loans
Interest income on loans$24,719 $21,780 $17,271 
Less: interest income on purchased Hana loans1,685 1,717 1,863 
Adjusted interest income on loans(a)$23,034 $20,063 $15,408 
Average loans$1,691,642 $1,614,000 $1,343,414 
Less: Average purchased Hana loans60,514 64,687 79,625 
Adjusted average loans(b)$1,631,128 $1,549,313 $1,263,789 
Average loan yield (1)
5.81 %5.36 %5.10 %
Effect on average loan yield (1)
0.20 %0.21 %0.26 %
Adjusted average loan yield (1)
(a)/(b)5.61 %5.15 %4.84 %
Net Interest Margin
Net interest income$20,198 $20,344 $17,096 
Less: interest income on purchased Hana loans1,685 1,717 1,863 
Adjusted net interest income(c)$18,513 $18,627 $15,233 
Average interest-earning assets$1,966,165 $1,874,516 $1,668,865 
Less: Average purchased Hana loans60,514 64,687 79,625 
Adjusted average interest-earning assets(d)$1,905,651 $1,809,829 $1,589,240 
Net interest margin (1)
4.08 %4.31 %4.07 %
Effect on net interest margin (1)
0.22 %0.22 %0.26 %
Adjusted net interest margin (1)
(c)/(d)3.86 %4.09 %3.81 %
(1)Annualized.

14

Adjusted allowance to gross loans ratio removes the impacts of purchased Hana loans, PPP loans and allowance on accrued interest receivable. Management believes that this ratio provides greater consistency and comparability between the Company’s results and those of its peer banks.
($ in thousands)For the Three Months Ended
4Q223Q224Q21
Gross loans$1,707,219 $1,618,018 $1,314,019 
Less: Purchased Hana loans(58,966)(61,899)(77,170)
PPP loans (1)
(434)(1,022)(38,918)
Adjusted gross loans(a)$1,647,819 $1,555,097 $1,197,931 
Accrued interest receivable on loans$6,413 $5,203 $4,231 
Less: Accrued interest receivable on purchased Hana loans(397)(323)(340)
         Accrued interest receivable on PPP loans (2)
(8)(16)(340)
Add: Allowance on accrued interest receivable— — 205 
Adjusted accrued interest receivable on loans(b)$6,008 $4,864 $3,756 
Adjusted gross loans and accrued interest receivable(a)+(b) =(c)$1,653,827 $1,559,961 $1,201,687 
Allowance for loan losses$19,241 $18,369 $16,123 
Add: Allowance on accrued interest receivable— — 205 
Adjusted Allowance(d)$19,241 $18,369 $16,328 
Adjusted allowance to gross loans ratio(d)/(c)1.16 %1.18 %1.36 %
(1)Excludes purchased PPP loans of $8 thousand, $57 thousand and $1.7 million as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(2)Excludes purchased accrued interest receivable on PPP loans of $1 thousand and $15 thousand as of September 30, 2022 and December 31, 2021, respectively.
ABOUT OP BANCORP
OP Bancorp, the holding company for Open Bank (the “Bank”), is a California corporation whose common stock is quoted on the Nasdaq Global Market under the ticker symbol, “OPBK.” The Bank is engaged in the general commercial banking business in Los Angeles, Orange, and Santa Clara Counties, California, and Carrollton, Texas and is focused on serving the banking needs of small- and medium-sized businesses, professionals, and residents with a particular emphasis on Korean and other ethnic minority communities. The Bank currently operates with ten full-service branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Cerritos, Gardena, Buena Park, and Santa Clara, California and Carrollton, Texas. The Bank also has four loan production offices in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, and Lynnwood, Washington. The Bank commenced its operations on June 10, 2005 as First Standard Bank and changed its name to Open Bank in October 2010. Its headquarters is located at 1000 Wilshire Blvd., Suite 500, Los Angeles, California 90017. Phone 213.892.9999; www.myopenbank.com.
Cautionary Note Regarding Forward-Looking Statements
Certain matters set forth herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to: business and economic conditions, particularly those
15

affecting the financial services industry and our primary market areas; our ability to successfully manage our credit risk and the sufficiency of our allowance for loan losses; factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers, the success of construction projects that we finance, including any loans acquired in acquisition transactions; our ability to effectively execute our strategic plan and manage our growth; interest rate fluctuations, which could have an adverse effect on our profitability; liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold for sale and our ability to raise additional capital, if necessary; external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve, inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition; continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; restraints on the ability of Open Bank to pay dividends to us, which could limit our liquidity; increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; a failure in the internal controls we have implemented to address the risks inherent to the business of banking; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance; changes in our management personnel or our inability to retain motivate and hire qualified management personnel; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; risks related to potential acquisitions; political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, fires, drought, pandemic diseases (such as the coronavirus) or extreme weather events, any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; incremental costs and obligations associated with operating as a public company; the impact of any claims or legal actions to which we may be subject, including any effect on our reputation; compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with commercial mortgage origination, sale and servicing operations; changes in federal tax law or policy; and our ability the manage the foregoing and other factors set forth in the Company’s public reports. We describe these and other risks that could affect our results in Item 1A. “Risk Factors,” of our latest Annual Report on Form 10-K for the year ended December 31, 2021 and in our other subsequent filings with the Securities and Exchange Commission.
Contact
Investor Relations
OP Bancorp
Christine Oh
EVP & CFO
213.892.1192
Christine.oh@myopenbank.com

16

CONSOLIDATED BALANCE SHEETS (unaudited)
($ in thousands)As of% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Assets  
Cash and due from banks$12,952 $25,516 $11,283 (49.2)%14.8 %
Interest-bearing deposits in other banks70,020 81,765 104,176 (14.4)(32.8)
Cash and cash equivalents82,972 107,281 115,459 (22.7)(28.1)
Securities available for sale, at fair value209,809 186,438 150,444 12.5 39.5 
Other investments12,098 12,074 10,999 0.2 10.0 
Loans held for sale15,408 36,642 89,428 (57.9)(82.8)
Real estate loans842,208 830,125 701,450 1.5 20.1 
SBA loans (1)
263,644 232,569 275,858 13.4 (4.4)
C&I loans116,951 133,855 162,543 (12.6)(28.0)
Home mortgage loans482,949 419,469 173,303 15.1 178.7 
Consumer & other loans1,467 2,000 865 (26.7)69.6 
Gross loans, net of unearned income1,707,219 1,618,018 1,314,019 5.5 29.9 
Allowance for loan losses(19,241)(18,369)(16,123)4.7 19.3 
Net loans receivable1,687,978 1,599,649 1,297,896 5.5 30.1 
Premises and equipment, net4,400 4,383 4,355 0.4 1.0 
Accrued interest receivable, net7,180 5,856 4,579 22.6 56.8 
Servicing assets12,759 13,000 12,720 (1.9)0.3 
Company owned life insurance21,613 21,464 11,134 0.7 94.1 
Deferred tax assets13,717 17,296 8,409 (20.7)63.1 
Operating right-of-use assets9,097 8,265 8,905 10.1 2.2 
Other assets17,262 17,228 12,363 0.2 39.6 
Total assets$2,094,293 $2,029,575 $1,726,691 3.2 %21.3 %
Liabilities and Shareholders' Equity
Liabilities
Noninterest bearing$701,584 $794,631 $774,754 (11.7)%(9.4)%
Money market and others526,321 524,911 380,226 0.3 38.4 
Time deposits greater than $250,000356,197 277,785 207,288 28.2 71.8 
Other time deposits301,669 219,484 171,798 37.4 75.6 
Total deposits1,885,771 1,816,811 1,534,066 3.8 22.9 
Borrowings50 10,000 — (99.5)n/m
Accrued interest payable2,771 1,099 558 152.1 396.6 
Operating lease liabilities10,213 9,485 10,307 7.7 (0.9)
Other liabilities18,572 22,085 16,538 (15.9)12.3 
Total liabilities1,917,377 1,859,480 1,561,469 3.1 22.8 
Shareholders’ equity
Common stock
79,326 78,782 78,718 0.7 0.8 
Additional paid-in capital9,743 9,424 8,645 3.4 12.7 
Retained earnings105,690 99,487 79,056 6.2 33.7 
Accumulated other comprehensive loss(17,843)(17,598)(1,197)1.4 1390.6 
Total shareholders’ equity176,916 170,095 165,222 4.0 7.1 
Total liabilities and shareholders' equity$2,094,293 $2,029,575 $1,726,691 3.2 %21.3 %
(1)Includes SBA PPP loans of $442 thousand, $1.1 million and $40.6 million as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
17

CONSOLIDATED STATEMENTS OF INCOME (unaudited)
($ in thousands, except share and per share data)For the Three Months Ended% Change 4Q22 vs.
4Q223Q224Q213Q224Q21
Interest income
Interest and fees on loans$24,719 $21,780 $17,271 13.5 %43.1 %
Interest on securities available for sale1,237 881 362 40.4 241.7 
Other interest income930 573 189 62.3 392.1 
Total interest income26,886 23,234 17,822 15.7 50.9 
Interest expense
Interest on deposits6,598 2,889 726 128.4 808.8 
Interest on borrowings90 1 — n/mn/m
Total interest expense6,688 2,890 726 131.4 821.2 
Net interest income20,198 20,344 17,096 (0.7)18.1 
Provision for loan losses977 662 1,898 47.6 (48.5)
Net interest income after provision for loan losses19,221 19,682 15,198 (2.3)26.5 
Noninterest income
Service charges on deposits406 454 405 (10.6)0.2 
Loan servicing fees, net of amortization705 610 521 15.6 35.3 
Gain on sale of loans1,684 3,490 6,033 (51.7)(72.1)
Other income428 267 330 60.3 29.7 
Total noninterest income3,223 4,821 7,289 (33.1)(55.8)
Noninterest expense
Salaries and employee benefits7,080 7,343 5,560 (3.6)27.3 
Occupancy and equipment1,560 1,537 1,418 1.5 10.0 
Data processing and communication514 586 637 (12.3)(19.3)
Professional fees330 602 267 (45.2)23.6 
FDIC insurance and regulatory assessments176 238 182 (26.1)(3.3)
Promotion and advertising12 177 156 (93.2)(92.3)
Directors’ fees145 170 166 (14.7)(12.7)
Foundation donation and other contributions851 875 901 (2.7)(5.5)
Other expenses659 810 304 (18.6)116.8 
Total noninterest expense11,327 12,338 9,591 (8.2)18.1 
Income before income tax expense11,117 12,165 12,896 (8.6)(13.8)
Income tax expense3,089 3,515 3,762 (12.1)(17.9)
Net income$8,028 $8,650 $9,134 (7.2)%(12.1)%
Book value per share$11.59 $11.19 $10.92 3.6 %6.1 %
Earnings per share - Basic$0.52 $0.56 $0.60 (7.1)%(13.3)%
Earnings per share - Diluted$0.51 $0.55 $0.59 (7.3)%(13.6)%
Shares of common stock outstanding15,270,34415,199,84015,137,8080.5 %0.9 %
Weighted Average Shares:
- Basic15,208,30815,195,82615,136,2290.1 %0.5 %
- Diluted15,264,97115,275,15615,227,291(0.1)%0.2 %

18

Key Ratios
For the Three Months EndedChange 4Q22 vs.
4Q223Q224Q213Q224Q21
Return on average assets (ROA) (1)
1.56 %1.77 %2.11 %(0.2)%(0.6)%
Return on average equity (ROE) (1)
18.58 %19.91 %22.68 %(1.3)%(4.1)%
Net interest margin (1)
4.08 %4.31 %4.07 %(0.2)%— %
Efficiency ratio48.36 %49.03 %39.34 %(0.7)%9.0 %
Total risk-based capital ratio12.87 %13.10 %13.66 %(0.2)%(0.8)%
Tier 1 risk-based capital ratio11.70 %11.92 %12.42 %(0.2)%(0.7)%
Common equity tier 1 ratio11.70 %11.92 %12.42 %(0.2)%(0.7)%
Leverage ratio9.38 %9.52 %9.58 %(0.1)%(0.2)%
(1)Annualized.

19

CONSOLIDATED STATEMENTS OF INCOME (unaudited)
($ in thousands, except share and per share data)For the Twelve Months Ended December 31,
20222021% Change
Interest income
Interest and fees on loans$82,864 $62,448 32.7 %
Interest on securities available for sale3,351 1,085 208.8 
Other interest income1,997 625 219.5 
Total interest income88,212 64,158 37.5 
Interest expense
Interest on deposits11,210 3,132 257.9 
Interest on borrowings91 — n/m
Total interest expense11,301 3,132 260.8 
Net interest income76,911 61,026 26.0 
Provision for loan losses2,976 522 470.1 
Net interest income after provision for loan losses73,935 60,504 22.2 
Noninterest income
Service charges on deposits1,675 1,562 7.2 
Loan servicing fees, net of amortization2,416 1,953 23.7 
Gain on sale of loans12,285 11,313 8.6 
Other income1,243 1,189 4.5 
Total noninterest income17,619 16,017 10.0 
Noninterest expense
Salaries and employee benefits27,189 21,253 27.9 
Occupancy and equipment5,964 5,213 14.4 
Data processing and communication2,085 2,000 4.3 
Professional fees1,620 1,192 35.9 
FDIC insurance and regulatory assessments813 583 39.5 
Promotion and advertising543 684 (20.6)
Directors’ fees682 593 15.0 
Foundation donation and other contributions3,393 2,890 17.4 
Other expenses2,541 1,457 74.4 
Total noninterest expense44,830 35,865 25.0 
Income before income tax expense46,724 40,656 14.9 
Income tax expense13,414 11,816 13.5 
Net income$33,310 $28,840 15.5 %
Book value per share$11.59 $10.92 6.1 %
Earnings per share - Basic$2.15 $1.89 13.8 %
Earnings per share - Diluted$2.14 $1.88 13.8 %
Shares of common stock outstanding15,270,34415,137,8080.9 %
Weighted Average Shares:
- Basic15,171,24015,087,6860.6 %
- Diluted15,231,41815,155,3470.5 %

20

Key Ratios
For the Twelve Months Ended December 31,
20222021Change
Return on average assets (ROA) (1)
1.74 %1.83 %(0.1)%
Return on average equity (ROE) (1)
19.57 %18.90 %0.7 %
Net interest margin (1)
4.18 %4.02 %0.2 %
Efficiency ratio47.42 %46.55 %0.9 %
Total risk-based capital ratio12.87 %13.66 %(0.8)%
Tier 1 risk-based capital ratio11.70 %12.42 %(0.7)%
Common equity tier 1 ratio11.70 %12.42 %(0.7)%
Leverage ratio9.38 %9.58 %(0.2)%
(1)Annualized.
21

ASSET QUALITY
($ in thousands)As of and For the Three Months Ended
4Q223Q224Q21
Nonaccrual Loans (1)
$2,639 $2,251 $3,000 
Loans 90 days or more past due, accruing (2)
441 — 200 
Accruing restructured loans— — — 
Nonperforming loans3,080 2,251 3,200 
Other real estate owned ("OREO")— — — 
Nonperforming assets$3,080 $2,251 $3,200 
Criticized loans (3) by loan type:
Commercial real estate$563 $— $— 
SBA loans1,472 1,817 2,688 
C&I loans555 742 313 
Home mortgage loans1,280 983 1,038 
Total criticized loans (3)
$3,870 $3,542 $4,039 
   
Nonperforming assets/total assets0.15 %0.11 %0.19 %
Nonperforming assets / gross loans plus OREO0.18 %0.14 %0.24 %
Nonperforming loans / gross loans0.18 %0.14 %0.24 %
Allowance for loan losses / nonperforming loans625 %816 %503 %
Allowance for loan losses / nonperforming assets625 %816 %503 %
Allowance for loan losses / gross loans1.13 %1.14 %1.23 %
Criticized loans (3) / gross loans
0.23 %0.22 %0.31 %
Classified loans / gross loans0.19 %0.22 %0.31 %
Net charge-offs (recoveries)$105 $(5)$168 
Net charge-offs (recoveries) to average gross loans (4)
0.03 %(0.00)%0.05 %
(1)Includes the guaranteed portion of SBA loans that are in liquidation totaling $606 thousand, $442 thousand and $1.0 million as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(2)Includes the guaranteed portion of PPP loans totaling $200 thousand as of December 31, 2021.
(3)Consists of special mention, substandard, doubtful and loss categories.
(4)Annualized.

($ in thousands)4Q223Q224Q21
Accruing delinquent loans 30-89 days past due
30-59 days$1,918 $360 $76 
60-89 days1,559 845 336 
Total (1)
$3,477 $1,205 $412 
(1)Includes the guaranteed portion of PPP loans totaling $756 thousand and $408 thousand as of September 30, 2022 and December 31, 2021, respectively.

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AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
For the Three Months Ended
4Q223Q224Q21
($ in thousands)Average
Balance		Interest
and Fees
Yield/
Rate (1)
Average
Balance		Interest
and Fees
Yield/
Rate (1)
Average
Balance		Interest
and Fees
Yield/
Rate (1)
Interest-earning assets:
Interest-bearing deposits in other banks$75,988 $734 3.78 %$75,599 $427 2.21 %$192,302 $73 0.15 %
Federal funds sold and other investments12,074 196 6.47 12,221 146 4.78 11,012 116 4.23 
Available-for-sale debt securities, at fair value186,461 1,237 2.66 172,696 881 2.04 122,137 362 1.19 
Real estate loans836,609 11,172 5.30 810,158 10,144 4.97 685,394 7,774 4.50 
SBA loans289,408 6,681 9.16 286,903 5,850 8.09 400,059 6,829 6.77 
C&I loans114,265 1,917 6.66 140,098 1,952 5.53 133,104 1,334 3.98 
Home mortgage loans449,684 4,929 4.38 375,804 3,820 4.07 123,822 1,320 4.27 
Consumer & other loans1,676 20 4.80 1,037 14 4.88 1,035 14 5.21 
Loans (2)
1,691,642 24,719 5.81 1,614,000 21,780 5.36 1,343,414 17,271 5.10 
Total interest-earning assets1,966,165 26,886 5.43 1,874,516 23,234 4.92 1,668,865 17,822 4.24 
Noninterest-earning assets87,189 83,398 62,996 
Total assets$2,053,354 $1,957,914 $1,731,861 
Interest-bearing liabilities:
Money market deposits and others$515,747 $3,045 2.34 %$502,166 $1,506 1.19 %$378,849 $283 0.30 %
Time deposits569,584 3,553 2.47 445,271 1,383 1.23 401,938 443 0.44 
Total interest-bearing deposits1,085,331 6,598 2.41 947,437 2,889 1.21 780,787 726 0.37 
Borrowings8,158 90 4.35 130 1 3.00 4 — — 
Total interest-bearing liabilities1,093,489 6,688 2.43 947,567 2,890 1.21 780,791 726 0.37 
Noninterest-bearing liabilities:
Noninterest-bearing deposits751,405 806,289 765,012 
Other noninterest-bearing liabilities35,593 30,258 24,994 
Total noninterest-bearing liabilities786,998 836,547 790,006 
Shareholders’ equity172,867 173,800 161,064 
Total liabilities and shareholders’ equity$2,053,354 $1,957,914 $1,731,861 
Net interest income / interest rate spreads$20,198 3.01 %$20,344 3.71 %$17,096 3.87 %
Net interest margin4.08 %4.31 %4.07 %
Cost of deposits & cost of funds:
Total deposits / cost of deposits$1,836,736 $6,598 1.43 %$1,753,726 $2,889 0.65 %1,545,799 $726 0.19 %
Total funding liabilities / cost of funds$1,844,894 $6,688 1.44 %$1,753,856 $2,890 0.65 %1,545,803 $726 0.19 %
(1)Annualized.
(2)Includes loans held for sale.


23

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
For the Twelve Months Ended December 31,
20222021
($ in thousands)Average
Balance		Interest
and Fees
Yield/
Rate (1)
Average
Balance		Interest
and Fees
Yield/
Rate (1)
Interest-earning assets:
Interest-bearing deposits in other banks$79,482 $1,399 1.76 %$132,090 $170 0.13 %
Federal funds sold and other investments11,810 598 5.06 10,755 455 4.23 
Available-for-sale debt securities, at fair value170,479 3,351 1.97 108,346 1,085 1.00 
Real estate loans777,776 37,861 4.87 672,045 30,645 4.56 
SBA loans321,757 24,073 7.48 355,114 21,760 6.13 
C&I loans142,630 7,217 5.06 114,629 4,463 3.89 
Home mortgage loans334,984 13,660 4.08 122,465 5,520 4.51 
Consumer & other loans1,071 53 4.94 1,095 60 5.51 
Loans (2)
1,578,218 82,864 5.25 1,265,348 62,448 4.94 
Total interest-earning assets1,839,989 88,212 4.79 1,516,539 64,158 4.23 
Noninterest-earning assets76,883 55,200 
Total assets$1,916,872 $1,571,739 
Interest-bearing liabilities:
Money market deposits and others$475,414 $5,305 1.12 %$362,900 $1,134 0.31 %
Time deposits445,169 5,905 1.33 378,585 1,998 0.53 
Total interest-bearing deposits920,583 11,210 1.22 741,485 3,132 0.42 
Borrowings2,089 91 4.33 1,988 — — 
Total interest-bearing liabilities922,672 11,301 1.22 743,473 3,132 0.42 
Noninterest-bearing liabilities:
Noninterest-bearing deposits796,175 656,130 
Other noninterest-bearing liabilities27,829 19,558 
Total noninterest-bearing liabilities824,004 675,688 
Shareholders’ equity170,196 152,578 
Total liabilities and shareholders’ equity$1,916,872 1,571,739 
Net interest income / interest rate spreads$76,911 3.57 %$61,026 3.81 %
Net interest margin4.18 %4.02 %
Cost of deposits & cost of funds:
Total deposits / cost of deposits$1,716,758 $11,210 0.65 %1,397,615 $3,132 0.22 %
Total funding liabilities / cost of funds$1,718,847 $11,301 0.66 %1,399,603 $3,132 0.22 %
(1)Annualized.
(2)Includes loans held for sale.
24