OP Bancorp

Income tax expense was $2.1 million for both the second quarters of 2025 and 2024, and $4.2 million for both the first halves of 2025 and 2024. The effective income tax rate was 25.0% and 28.2% for the second quarters of 2025 and 2024, respectively, 26.3% and 28.1% for the first halves of 2025 and 2024, respectively. The decreases in the effective tax rate for both periods were primarily driven by the revaluation of deferred tax assets following recent changes in California state tax legislation. Additional contributing factors included revised estimates stemming from the adoption of an enhanced interim state tax apportionment methodology, as well as higher discrete benefits associated with stock-based compensation.

We recognized net deferred tax assets of $12.6 million and $14.9 million as of June 30, 2025 and December 31, 2024, respectively. After evaluating all available positive and negative evidence, including recent financial performance, projected future taxable income, and tax planning strategies, we have concluded that it was more- likely-than-not that net deferred tax assets as of June 30, 2025, will be fully realized in future periods.