OP Bancorp
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
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Noninterest Income
While interest income remains the largest single component of total revenues, noninterest income is also an important component. A portion of our noninterest income is associated with SBA lending activity, consisting of gains on the sale of loans sold in the secondary market and servicing income from loans sold with servicing retained. Other sources of noninterest income include service charges on deposit.
The following table presents the components of noninterest income for the second quarters of 2025 and 2024:
| Three Months Ended June 30, | ||||
|---|---|---|---|---|
| ($ in thousands) | 2025 | 2024 | $ Change | % Change |
| Noninterest income: | ||||
| Service charges on deposits | $1,017 | $793 | $224 | 28% |
| Loan servicing fees, net of amortization | 900 | 575 | 325 | 57 |
| Gains on sale of loans | 1,441 | 2,325 | (884) | (38) |
| Other income | 610 | 491 | 119 | 24 |
| Total noninterest income | $3,968 | $4,184 | $(216) | (5)% |
Noninterest income for the second quarter of 2025 decreased year-over-year, primarily due to lower gains on sale of loans, partially offset by higher loan servicing fees and service charges on deposits.
Service charges on deposit increased $224 thousand, or 28%, primarily driven by higher deposit analysis fees, reflecting continued growth in the number of business customer accounts.
Loan servicing fees, net of amortization, increased $325 thousand, or 57%, primarily due to reduced amortization expense of servicing assets, resulting from reduced loan payoff activities.
Gains on sale of loans decreased $884 thousand, or 38%, primarily due to a reduced SBA loan sale activity and lower average premium rates. The Bank sold $25.3 million in SBA loans at an average premium of 7.05%, compared to sale of $32.1 million at an average premium rate of 8.58%.
The following table presents the components of noninterest income for the first halves of 2025 and 2024:
| Six Months Ended June 30, | ||||
|---|---|---|---|---|
| ($ in thousands) | 2025 | 2024 | $ Change | % Change |
| Noninterest income: | ||||
| Service charges on deposits | $2,017 | $1,405 | $612 | 44% |
| Loan servicing fees, net of amortization | 1,907 | 1,347 | 560 | 42 |
| Gains on sale of loans | 3,460 | 4,028 | (568) | (14) |
| Other income | 1,400 | 990 | 410 | 41 |
| Total noninterest income | $8,784 | $7,770 | $1,014 | 13% |
Noninterest income for the first half of 2025 increased year-over-year, primarily due to higher service charges on deposits and loan servicing fees, partially offset by lower gains on sale of loans.
Service charges on deposit increased $612 thousand, or 44%, primarily driven by higher deposit analysis fees, reflecting continued growth in the number of business customer accounts.
Loan servicing fees, net of amortization, increased $560 thousand, or 42%, primarily due to reduced amortization expense of servicing assets, resulting from reduced loan payoff activities.
Gains on sale of loans decreased $568 thousand, or 14%, primarily due to lower average premium rates. The Bank sold $56.4 million in SBA loans at an average premium of 7.62%, compared to sale of $56.9 million at an average premium rate of 8.47%.
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