OP Bancorp Reports First Quarter Result of 2021

2021 First Quarter Highlights:

  • Net income totaled $5.1 million, or $0.33 per diluted common share, compared to $3.8 million, or $0.25 per diluted common share, for the fourth quarter of 2020 and $3.3 million, or $0.21 per diluted common share, for the first quarter of 2020
  • Net interest margin was 3.80%, compared to 3.73% for the fourth quarter of 2020 and 3.95% for the first quarter of 2020
  • Return on average assets was 1.44% and return on average equity was 14.02%, compared to 1.13% and 10.72%, respectively, for the fourth quarter of 2020 and 1.12% and 9.44%, respectively, for the first quarter of 2020
  • Total assets increased 20.3% to $1.46 billion at March 31, 2021, from $1.21 billion at March 31, 2020
  • Net loans receivable increased 15.7% to $1.14 billion at March 31, 2021, from $985.8 million at March 31, 2020
  • Total deposits increased 22.2% to $1.29 billion at March 31, 2021, from $1.05 billion at March 31, 2020
  • Noninterest-bearing deposits accounted for 44.5% of total deposits at March 31, 2021, compared to 29.0% at March 31, 2020
  • Nonperforming assets to total assets was 0.08% at March 31, 2021, compared to 0.13% at March 31, 2020
  • Total risk-based capital ratio and leverage ratio were 15.04% and 10.38%, respectively, at March 31, 2021, compared to 14.78% and 11.59%, respectively at March 31, 2020
  • The provision for loan losses was $620,000, compared to $1.8 million for the fourth quarter of 2020 and $743,000 for the first quarter of 2020
  • The allowance for loan losses, excluding fully guaranteed SBA PPP loans, was 1.47% of gross loans at March 31, 2021, compared to 1.08% of gross loans at March 31, 2020
  • Pre-provision net revenue was $7.8 million, compared to $7.2 million for the fourth quarter of 2020 and $5.2 million for the first quarter of 2020
  • Originated $74.2 million and 1,336 loans under the second draw of the SBA PPP loans; and $22.9 million and 429 loans from the first draw of SBA PPP loans have been forgiven
  • Remaining loan deferments under the CARES Act were 1.6% of our loan portfolio as of March 31, 2021, down from 2.7% of our loan portfolio as of December 31, 2020

LOS ANGELES–(BUSINESS WIRE)–OP Bancorp (the “Company”) (NASDAQ: OPBK), the holding company of Open Bank (the “Bank”), today reported unaudited financial results for the first quarter of 2021. Net income for the first quarter of 2021 was $5.1 million, or $0.33 per diluted common share, compared to net income of $3.8 million, or $0.25 per diluted common share, for the fourth quarter of 2020, and net income of $3.3 million, or $0.21 per diluted common share, for the first quarter of 2020.

“I am pleased to report a record quarter with the quarterly net income of $5.1 million. During the first quarter, we have put our priority in assisting our existing and new customers with the second draw of SBA PPP loans and have originated 1,336 loans in the amount of $74.2 million. We have also began processing the forgiveness of the first draw of PPP loans which totaled $22.9 million during the quarter. We are expecting to close the purchase of SBA loan portfolio of Hana Small Business Lending, Inc. in the second quarter of 2021. As the vaccine distribution is accelerated and the counties begin to allow reopening and increased capacity of businesses, we are confident that most of our business customers will soon resume their operation to full capacity. The focus in managing risks and maintaining safe and sound banking operations will continue to remain as our highest priority,” commented Min Kim, President and Chief Executive Officer of OP Bancorp and Open Bank.

Financial Highlights (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

 

As of or for the Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

13,632

 

 

$

13,375

 

 

$

14,345

 

Interest expense

 

 

877

 

 

 

1,194

 

 

 

3,229

 

Net interest income

 

 

12,755

 

 

 

12,181

 

 

 

11,116

 

Provision for loan losses

 

 

620

 

 

 

1,831

 

 

 

743

 

Noninterest income

 

 

2,966

 

 

 

3,392

 

 

 

2,296

 

Noninterest expense

 

 

7,966

 

 

 

8,412

 

 

 

8,207

 

Income before taxes

 

 

7,135

 

 

 

5,330

 

 

 

4,462

 

Provision for income taxes

 

 

2,058

 

 

 

1,513

 

 

 

1,163

 

Net Income

 

$

5,077

 

 

$

3,817

 

 

$

3,299

 

Diluted earnings per share

 

$

0.33

 

 

$

0.25

 

 

$

0.21

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

28,575

 

 

$

26,659

 

 

$

4,382

 

Gross loans, net of unearned income

 

 

1,155,872

 

 

 

1,099,736

 

 

 

996,559

 

Allowance for loan losses (ALL)

 

 

15,339

 

 

 

15,352

 

 

 

10,748

 

Total assets

 

 

1,455,334

 

 

 

1,366,826

 

 

 

1,209,593

 

Deposits

 

 

1,285,390

 

 

 

1,200,090

 

 

 

1,052,198

 

Shareholders’ equity

 

 

146,993

 

 

 

143,366

 

 

 

138,099

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

1.44

%

 

 

1.13

%

 

 

1.12

%

Return on average equity (annualized)

 

 

14.02

%

 

 

10.72

%

 

 

9.44

%

Net interest margin (annualized)

 

 

3.80

%

 

 

3.73

%

 

 

3.95

%

Efficiency ratio (1)

 

 

50.67

%

 

 

54.02

%

 

 

61.19

%

Credit Quality:

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

1,148

 

 

$

985

 

 

$

1,533

 

Nonperforming assets

 

 

1,148

 

 

 

985

 

 

 

1,533

 

Net charge-offs to average gross loans (annualized)

 

 

0.00

%

 

 

0.00

%

 

 

0.02

%

Nonperforming assets to gross loans plus OREO

 

 

0.10

%

 

 

0.09

%

 

 

0.15

%

ALL to nonperforming loans

 

 

1,337

%

 

 

1,558

%

 

 

701

%

ALL to gross loans, net of unearned income

 

 

1.33

%

 

 

1.40

%

 

 

1.08

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

 

15.04

%

 

 

14.81

%

 

 

14.78

%

Tier 1 risk-based capital ratio

 

 

13.79

%

 

 

13.56

%

 

 

13.69

%

Common equity tier 1 ratio

 

 

13.79

%

 

 

13.56

%

 

 

13.69

%

Leverage ratio

 

 

10.38

%

 

 

10.55

%

 

 

11.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents noninterest expense divided by the sum of net interest income and noninterest income.

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

For the Three Months Ended

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

Interest income

 

$

13,632

 

 

$

13,375

 

 

$

14,345

Interest expense

 

 

877

 

 

 

1,194

 

 

 

3,229

Net interest income

 

 

12,755

 

 

 

12,181

 

 

 

11,116

Noninterest income

 

 

2,966

 

 

 

3,392

 

 

 

2,296

Noninterest expense

 

 

7,966

 

 

 

8,402

 

 

 

8,207

Pre-provision net revenue

 

$

7,755

 

 

$

7,171

 

 

$

5,205

Reconciliation to Net Income:

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

620

 

 

 

1,790

 

 

 

743

Provision for income taxes

 

 

2,058

 

 

 

1,513

 

 

 

1,163

Net Income

 

$

5,077

 

 

$

3,868

 

 

$

3,299

Note: Pre-provision net revenue is a non-GAAP measure. Pre-provision net revenue excludes income taxes and provision for loan losses from net income. Management believes that this information provides useful information with a better comparison to the financial results of each periods and a better understanding of the operating results of the Bank.

Results of Operations

The reported interest income and yield on our loan portfolio are impacted by a number of components, including changes in the average contractual interest rate earned on loans and the amount of discount accretion on SBA loans. The following table reconciles both the contractual interest income and yield on our loan portfolio to the reported interest income and yield for the periods indicated.

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

(Dollars in thousands)

 

Interest

& Fees

 

 

Yield

 

 

Interest

& Fees

 

 

Yield

 

 

Interest

& Fees

 

 

Yield

 

Contractual interest rate

 

$

12,166

 

 

 

4.23

%

 

$

12,156

 

 

 

4.35

%

 

$

13,088

 

 

 

5.27

%

SBA discount accretion

 

 

507

 

 

 

0.18

%

 

 

619

 

 

 

0.22

%

 

 

558

 

 

 

0.22

%

Amortization of net deferred fees

 

 

540

 

 

 

0.19

%

 

 

242

 

 

 

0.09

%

 

 

22

 

 

 

0.01

%

Net interest recognized on nonaccrual loans

 

 

(2

)

 

 

0.00

%

 

 

(20

)

 

 

-0.01

%

 

 

1

 

 

 

0.00

%

Prepayment penalties (1) and other fees

 

 

73

 

 

 

0.02

%

 

 

9

 

 

 

0.00

%

 

 

25

 

 

 

0.01

%

Yield on loans (as reported)

 

$

13,284

 

 

 

4.62

%

 

$

13,006

 

 

 

4.65

%

 

$

13,694

 

 

 

5.51

%

(1) Prepayment penalty income of $69,000 and $18,000 for the three months ended March 31, 2021 and March 31, 2020, respectively, are from commercial real estate loans.

Net interest margin for the first quarter of 2021 increased 7 basis points to 3.80% from 3.73% for the fourth quarter of 2020, primarily due to a 19 basis point decrease in the cost of interest-bearing liabilities, partially offset by a 3 basis point decrease in the reported yield on interest-earning assets.

Net interest income before provision for loan losses for the first quarter of 2021 was $12.8 million, an increase of $574,000, or 4.7%, compared to $12.2 million for the fourth quarter of 2020, primarily due to a $317,000 decrease in interest expense and a $257,000 increase in interest income.

Interest income on securities available for sale and other investments for the first quarter of 2021 decreased $21,000, or 5.8%, to $348,000, compared to $369,000 for the fourth quarter of 2020. The decrease was primarily due to a $21,000 decrease in interest income on securities available for sale. The decrease was the result of an 8 basis point decrease in the yield on the average balance of securities available for sale in the period, which is primarily due to lower yields on securities purchased during the fourth quarter of 2020 and the first quarter of 2021.

Interest income from contractual interest rates on loans for the first quarter of 2021 increased $10,000, or 0.1%, compared to the fourth quarter of 2020, reflecting an increase of $52.3 million, or 4.7% in the average balance of loans, partially offset by a 12 basis point decrease in average contractual interest rate on loans. The amount of discount accretion on SBA loans for the first quarter of 2021 decreased $112,000 compared to the fourth quarter of 2020 due to a decrease in SBA loan payoffs. The reported interest income on loans, net of SBA discount accretions and other components, for the first quarter of 2021 increased $278,000, or 2.1%, compared to the fourth quarter of 2020.

Interest expense for the first quarter of 2021 was $877,000, a decrease of $317,000, or 26.5%, compared to $1.2 million for the fourth quarter of 2020. The decrease was primarily due to downward adjustments of the Bank’s deposit rates during the fourth quarter, partially offset by an increase of $23.5 million, or 3.5%, in the average balance of interest-bearing liabilities.

Net interest margin for the first quarter of 2021 decreased 15 basis points to 3.80% from 3.95% for the first quarter of 2020, primarily due to a 103 basis point decrease in the reported yield on interest-earning assets, partially offset by a 127 basis point decrease in the cost of interest-bearing liabilities.

Net interest income before provision for loan losses for the first quarter of 2021 increased $1.6 million, or 14.7%, to $12.8 million, compared to $11.1 million for the first quarter of 2020, primarily due to a $2.4 million decrease in interest expense, partially offset by a $713,000 decrease in interest income.

Interest income on securities available for sale and other investments for the first quarter of 2021 decreased $303,000, or 46.6%, to $348,000, compared to $651,000, for the first quarter of 2020. The interest income on other investments decreased $220,000 as a result of a 123 basis point decrease in the yield on the average balance of Fed funds sold and other investments in the period. The interest income on securities available for sale decreased $83,000, primarily due to a 131 basis point decrease in the yield on the average balance of securities available for sale and higher premium amortizations from accelerated prepayments during the first quarter of 2021 compared to the first quarter of 2020.

Interest income from contractual interest rates on loans for the first quarter of 2021 decreased $922,000, or 7.0%, compared to the first quarter of 2020, reflecting a 104 basis point decrease in average contractual interest rate on loans. The decrease in the average contractual interest rate was primarily due to cumulative market rate cuts of 150 basis points by the Federal Reserve in the first quarter of 2020. The decrease in interest income from contractual interest was partially offset by an increase of $167.1 million, or 16.7% in average balance of loans. The amount of discount accretion on SBA loans for the first quarter of 2021 decreased $51,000 compared to the first quarter of 2020, primarily due to a decrease in SBA loan payoffs, partially offset by an increase in monthly discount accretions in line with an increase in SBA loan balance at March 31, 2021, compared to March 31, 2020. The reported interest income on loans, net of SBA discount accretions and other components, for the first quarter of 2021 decreased $410,000, or 3.0%, compared to the first quarter of 2020.

Interest expense for the first quarter of 2021 decreased $2.4 million, or 72.8%, to $877,000, compared to $3.2 million for the first quarter of 2020, primarily due to the Bank’s downward adjustments in deposit rates after the rate cuts by the Federal Reserve in March of 2020 and a decrease of $25.4 million, or 3.5%, in the average balance of interest-bearing liabilities.

The following tables show the asset yields, liability costs, net interest spread, and net interest margin for the periods indicated, along with the percentage changes in the periods indicated.

 

 

Three Months Ended

 

 

Percentage Change

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

Q1-21

 

 

Q1-21

 

 

 

2021

 

 

2020

 

 

2020

 

 

vs. Q4-20

 

 

vs. Q1-20

 

Yield on loans

 

 

4.62

%

 

 

4.65

%

 

 

5.51

%

 

 

-0.03

%

 

 

-0.89

%

Yield on interest-earning assets

 

 

4.07

%

 

 

4.10

%

 

 

5.10

%

 

 

-0.03

%

 

 

-1.03

%

Cost of interest-bearing liabilities

 

 

0.51

%

 

 

0.70

%

 

 

1.78

%

 

 

-0.19

%

 

 

-1.27

%

Cost of deposits

 

 

0.29

%

 

 

0.40

%

 

 

1.27

%

 

 

-0.11

%

 

 

-0.98

%

Cost of funds

 

 

0.28

%

 

 

0.40

%

 

 

1.27

%

 

 

-0.12

%

 

 

-0.99

%

Net interest spread

 

 

3.56

%

 

 

3.40

%

 

 

3.32

%

 

 

0.16

%

 

 

0.24

%

Net interest margin

 

 

3.80

%

 

 

3.73

%

 

 

3.95

%

 

 

0.07

%

 

 

-0.15

%

The Bank recorded $620,000 in provision for loan losses for the first quarter of 2021, which includes $636,000 for accrued interest receivables on deferred loans and loans that are no longer on deferral but have not fully caught up on their accrued interest, and $12,000 in net reversal from loss factor change and loan balance change. Management continues to evaluate the qualitative and quantitative factors on all loan types. The Bank recorded a provision for loan losses of $1.8 million for the fourth quarter of 2020 and $743,000 for the first quarter of 2020.

Noninterest income for the first quarter of 2021 was $3.0 million, a decrease of $426,000, or 12.6%, from $3.4 million for the fourth quarter of 2020, primarily due to a decrease of $306,000 in gain on sale of loans and a decrease of $275,000 in other income, partially offset by an increase of $164,000 in loan servicing fees from a decrease in SBA loan payoffs. Gain on sale of loans for the first quarter of 2021 was $1.9 million from the sale of $22.4 million in SBA loans with an average premium of 10.51%, whereas gain on sale of loans for the fourth quarter of 2020 was $2.2 million from the sale of $28.5 million in SBA loans with an average premium of 8.83%. The decrease in other income was primarily due to a gain from a property sale during the fourth quarter of 2020.

Noninterest income for the first quarter of 2021 was $3.0 million, an increase of $670,000, compared to $2.3 million for the first quarter of 2020, primarily due to an increase of $727,000 in gain on sale of loans and an increase of $139,000 in loan servicing fees, partially offset by a decrease of $94,000 in service charges on deposits and a decrease of $102,000 in other income. Gain on sale of loans for the first quarter of 2020 was $1.2 million from the sale of $17.5 million in SBA loans with an average premium of 8.41%. The increase of $139,000 in loan servicing fees was due to a decrease in SBA loan payoffs during the first quarter of 2021 compared to the first quarter of 2020.

Noninterest expense for the first quarter of 2021 was $8.0 million, a decrease of $446,000, or 5.3%, compared to $8.4 million for the fourth quarter of 2020. The decrease was primarily due to a decrease of $874,000 in salary and employee benefits, partially offset by an increase of $115,000 promotion and advertising expense, an increase of $107,000 in foundation donation and other contributions expenses, and an increase of $110,000 in other expenses. The decrease in salary and employee benefits was primarily due to an increase in deferred loan origination costs from originating 1,336 SBA’s second draw Paycheck Protection Program (PPP) loans for an aggregate loan balance of $74.2 million during the quarter. The increase in promotion and advertising expense was primarily due to a reduction in promotion and advertising expense in the fourth quarter of 2020, and the increase in foundation donation expense was a result of the increase in net income in the first quarter of 2021.

Noninterest expense for the first quarter of 2021 was $8.0 million, a decrease of $241,000, or 2.9%, compared to $8.2 million for the first quarter of 2020. The decrease was primarily due to a decrease of $409,000 in salary and employee benefits and a decrease of $117,000 in director’s fees expense, partially offset by an increase of $177,000 in foundation donation and other contributions expenses. The decrease in salary and employee benefits was primarily due to the aforementioned increase in deferred loan origination costs for SBA PPP loans, partially offset by additional accruals made to employee incentives during the first quarter of 2021. The decrease in director’s expense was due to a decrease of $108,000 in restricted stock unit expense resulting from the full vesting of the restricted stock units in July 2020.

Income tax provision was $2.1 million for the first quarter, $1.5 million for the fourth quarter of 2020, and $1.2 million for the first quarter of 2020. The effective tax rate for the first quarter of 2021 was 28.8%, compared to 28.4% for the fourth quarter of 2020 and 26.1% for the first quarter of 2020. The higher effective tax rate for the first quarter of 2021 compared to the first quarter of 2020 was primarily due to realizing a lower amount of tax benefits as a result of a decrease in the number of non-qualified stock option exercises.

Balance Sheet

Total assets were $1.46 billion at March 31, 2021, an increase of $88.5 million, or 6.5%, compared to $1.37 billion at December 31, 2020, and an increase of $245.7 million, or 20.3%, compared to $1.21 billion at March 31, 2020.

Gross loans, net of unearned income, were $1.16 billion at March 31, 2021, an increase of $56.1 million, or 5.1%, from $1.10 billion at December 31, 2020, and an increase of $159.3 million, or 16.0%, from $996.6 million at March 31, 2020.

The following table shows new loan originations for the periods indicated.

 

 

Three Month Ended

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

Real estate loans

 

$

42,748

 

 

$

30,828

 

 

$

58,854

SBA loans (1)

 

 

105,340

 

 

 

16,634

 

 

 

26,347

C & I loans

 

 

9,505

 

 

 

47,308

 

 

 

6,342

Home mortgage loans

 

 

11,563

 

 

 

17,027

 

 

 

6,924

Total

 

$

169,156

 

 

$

111,797

 

 

$

98,467

(1) Includes SBA Paycheck Protection Program (PPP) loans of $74.2 million at March 31, 2021.

Loan payoffs were $59.9 million for the first quarter of 2021, compared to $41.2 million for the fourth quarter of 2020, and $44.3 million for the first quarter of 2020.

Total deposits were $1.29 billion at March 31, 2021, an increase of $85.3 million, or 7.1%, from $1.20 billion at December 31, 2020, and an increase of $233.2 million, or 22.2%, from $1.05 billion at March 31, 2020. Noninterest-bearing deposits were $572.0 million at March 31, 2021, compared to $522.8 million at December 31, 2020, and $304.8 million at March 31, 2020. The increase in noninterest-bearing deposits during the first quarter of 2021 was primarily due to the SBA PPP loans funded to customers’ noninterest-bearing deposits and new accounts opened during the quarter.

Noninterest-bearing deposits accounted for 44.5% of total deposits at March 31, 2021, compared to 43.6% at December 31, 2020, and 29.0% at March 31, 2020. The following table shows the Bank’s deposits, by type, as a percentage of total deposits as of the periods indicated.

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

2020

 

Noninterest-bearing deposits

 

 

44.5

%

 

 

43.6

%

 

 

29.0

%

Money market deposits and others

 

 

27.5

%

 

 

27.3

%

 

 

28.2

%

Time deposits over $250,000

 

 

14.9

%

 

 

16.7

%

 

 

20.0

%

Other time deposits

 

 

13.1

%

 

 

12.4

%

 

 

22.8

%

Total deposits

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

The Bank had $5.0 million in borrowings from the Federal Home Loan Bank (FHLB) at March 31, 2021 and December 31, 2020, which has a 0% interest rate under the Zero-Rate Recovery Advance Program, FHLB’s pandemic relief initiative. The Bank had no borrowings from the FHLB at March 31, 2020.

The Company’s consolidated regulatory capital ratios exceeded regulatory guidelines and the Bank’s capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at March 31, 2021, as summarized in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Well-

capitalized

 

 

Regulatory

Capital Ratio

 

 

 

 

 

 

 

 

 

 

 

Financial

 

 

Requirements (1),

 

 

 

 

 

 

 

 

 

 

 

Institution

 

 

Including

 

 

 

 

 

 

 

 

 

 

 

Basel III

 

 

Fully Phased-in

 

 

 

 

 

 

 

 

 

 

 

Regulatory

 

 

Capital Conservation

 

Capital Ratios

 

OP Bancorp

 

 

Open Bank

 

 

Guidelines

 

 

Buffer

 

Total risk-based capital ratio

 

 

15.04

%

 

 

14.77

%

 

 

10.00

%

 

 

10.50

%

Tier 1 risk-based capital ratio

 

 

13.79

%

 

 

13.51

%

 

 

8.00

%

 

 

8.50

%

Common equity tier 1 ratio

 

 

13.79

%

 

 

13.51

%

 

 

6.50

%

 

 

7.00

%

Leverage ratio

 

 

10.38

%

 

 

10.28

%

 

 

5.00

%

 

 

4.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Fully phased in Basel III requirement for both OP Bancorp and Open Bank includes a 2.5% capital conservation buffer, except the leverage ratio.

The Company has repurchased 3,830 shares of its common stock at an average price of $7.50 during the first quarter of 2021. 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 March 31, 2021.

Asset Quality

Nonperforming loans were $1.1 million at March 31, 2021, an increase of $163,000 from $985,000 at December 31, 2020 and a decrease of $385,000 from $1.5 million at March 31, 2020.

The Bank had no other real estate owned (OREO) at March 31, 2021, December 31, 2020 and March 31, 2020.

Nonperforming assets were $1.1 million, or 0.08% of total assets, at March 31, 2021, compared to $985,000, or 0.07% of total assets, at December 31, 2020, and $1.5 million, or 0.13% of total assets, at March 31, 2020. Nonperforming loans to gross loans were 0.10% at March 31, 2021, compared to 0.09% at December 31, 2020, and 0.15% at March 31, 2020.

Total classified loans were $6.6 million, or 0.57% of gross loans, at March 31, 2021, compared to $7.3 million, or 0.67% of gross loans, at December 31, 2020, and $3.6 million, or 0.36% of gross loans, at March 31, 2020. The decrease of $739,000 in classified loans from December 31, 2020 was primarily due to two SBA real estate loans, which were reclassified to watch grade loans. Classified loans of $5.9 million as of March 31, 2021 are fully secured by real estate collaterals.

The following tables shows the trend of classified loans by loan type as of the date stated.

 

 

As of

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

Classified loans by loan type

 

(Dollars in thousands)

SBA loans—real estate

 

$

769

 

 

$

1,523

 

 

$

774

 

 

$

786

 

 

$

2,021

SBA loans—non-real estate

 

 

385

 

 

 

198

 

 

 

121

 

 

 

124

 

 

 

159

Commercial and industrial

 

 

4,832

 

 

 

5,004

 

 

 

1,207

 

 

 

1,211

 

 

 

686

Home mortgage

 

 

600

 

 

 

600

 

 

 

 

 

 

689

 

 

 

694

Total classified loans

 

$

6,586

 

 

$

7,325

 

 

$

2,102

 

 

$

2,810

 

 

$

3,560

SBA guarantee balance retained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA loans—real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

357

SBA loans—non-real estate

 

 

166

 

 

 

 

 

 

 

 

 

 

 

 

33

Total SBA unsold guarantee portion

 

$

166

 

 

$

 

 

$

 

 

$

 

 

$

390

Total classified loans, net of SBA guarantee balance retained

 

$

6,420

 

 

$

7,325

 

 

$

2,102

 

 

$

2,810

 

 

$

3,170

Contacts

Investor Relations

OP Bancorp

Christine Oh

EVP & CFO

213.892.1192

Christine.oh@myopenbank.com

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