OP Bancorp

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto contained in this Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Part II, Item 1A. Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

OP Bancorp (referred to herein on an unconsolidated basis as "OP Bancorp" and on a consolidated basis as the "Company") is a bank holding company headquartered in Los Angeles, California. Our commercial community banking activities are operated through Open Bank ("Open Bank" or the "Bank"), our wholly owned banking subsidiary, and we do not conduct material business operations other than through the Bank. We offer commercial banking services to small and medium-sized businesses, their owners and retail customers primarily in the Korean-American communities within our primary market areas.

Our results of operations depend primarily on our net interest income, which represents the interest we earn on loans and related products, reduced by the interest we pay on deposits and other borrowings. In addition to our net interest income, we derive earnings from fee income we receive in connection with our deposits, and from gains on the sale and service of SBA loans. Our major operating expenses are the salaries and related benefits we pay our management and staff, and the rent we pay on our leased properties. We rely primarily on locally-generated deposits, mostly from the Korean-American market within California, to fund our loan activities. We currently operate nine branches in Los Angeles and Orange Counties in California, one branch in Santa Clara, California, one branch in Carrollton, Texas and one branch near Las Vegas, Nevada. We have five loan production offices in Pleasanton, California, Atlanta, Georgia, Aurora, Colorado, Lynnwood, Washington, and Fairfax, Virginia.

Banking Economy and Recent Developments

The Board of Governors of the Federal Reserve System ("Federal Reserve") has maintained the Federal Funds Rate range at 4.25% to 4.50%, reflecting a continued pause in its monetary tightening cycle. While inflation has shown signs of moderation, the Federal Reserve has signaled a cautious approach, seeking to balance its dual mandate of achieving maximum employment and price stability. Recent commentary from policymakers indicates the potential for gradual rate cuts later in 2025, contingent upon further evidence of sustained disinflation and softening labor market conditions. The current rate environment continues to influence lending activity, funding costs, and credit risk assessments across the financial sector. Additionally, the volatile and uncertain political climate further complicates the economic outlook, making it increasingly difficult to anticipate the timing and magnitude of future rate adjustments. These factors present ongoing challenges for management in forecasting economic conditions and in effectively pricing both loan products and longer-term deposit offerings.

We believe we have responded effectively to the evolving dynamics of the banking environment. Our ability to navigate recent challenges is largely attributable to the continued loyalty of our customers and the dedication and expertise of our employees and management team.

The following significant items are of note as of or for the periods presented:

As of June 30, 2025 compared to as of December 31, 2024

•Total assets were $2.56 billion, up $197.6 million, or 8%, from $2.37 billion.

•Gross loans were $2.07 billion, up $114.7 million, or 6%, from $1.96 billion.

•Total deposits were $2.25 billion, up $227.4 million, or 11%, from $2.03 billion.

•Shareholders’ equity was $213.7 million, up $8.7 million, or 4%, from $205.0 million.

For the three months ended June 30, 2025 compared to three months ended June 30, 2024

•Net interest income increased to $19.7 million, up $3.5 million, or 22%, from $16.2 million.

•Net income increased to $6.3 million or $0.42 diluted EPS, up $897 thousand, or 17%, from $5.4 million or $0.36 diluted EPS.

For the six months ended June 30, 2025 compared to six months ended June 30, 2024

•Net interest income increased to $37.1 million, up $5.0 million, or 15%, from $32.2 million.

•Net income increased to $11.9 million or $0.79 diluted EPS, up $1.2 million, or 12%, from $10.7 million or $0.70 diluted EPS.