OP Bancorp

Income tax expense was $3.0 million and $2.1 million for the third quarters of 2025 and 2024, respectively, and $7.2 million and $6.3 million for the first nine months of 2025 and 2024, respectively. The effective income tax rate was 30.7% and 28.3% for the third quarters of 2025 and 2024, respectively, 27.9% and 28.2% for the first nine months of 2025 and 2024, respectively. The increase in income tax expense for both periods were primarily driven by higher pre-tax income and a discrete revaluation of deferred tax assets, associated with the adoption of the California's single sales factor apportionment method and updated state tax apportionment methodology. These impacts were partially offset by favorable state apportionment adjustments.

We recorded net deferred tax assets of $12.1 million and $14.9 million as of September 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 September 30, 2025, will be fully realized in future periods.