OP Bancorp
For the period ended Sep 30, 2025. Filed Nov 7, 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.
Sep 30, 2025 · Filed Nov 7, 2025
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Allowance for Credit Losses
The Company maintains its allowance for credit losses at a level it believes is adequate to absorb estimated future credit losses in accordance with GAAP. For further details on the policies, methodologies and significant judgments used in determining the allowance, refer to Item 7. MD&A — Critical Accounting Estimates and Item 8. Financial Statements — Note 1— Business and Basis of Presentation to the consolidated financial statements in the 2024 Annual Report on Form 10-K, as well as Note 3 — Loans and Allowance for Credit Losses on Loans to the consolidated financial statements in this Form 10-Q.
The allowance for credit losses on loans was $27.3 million as of September 30, 2025, an increase of $2.5 million from $24.8 million as of December 31, 2024. This increase was primarily driven by loan growth in CRE and home mortgage portfolios, which led to higher quantitative reserves and additional qualitative adjustments.
Analysis of the Allowance for Credit Losses
The following tables summarize the activity in the allowance for credit losses on loans by loan segments for the three and nine months ended September 30, 2025 and 2024:
| As of and for the Three Months Ended September 30, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 · 2024 | ||||||||||||||
| ($ in thousands) · Beginning · Provision (Reversal) · Net (Charge-offs) Recoveries · Ending · Beginning · Provision (Reversal) · Net (Charge-offs) Recoveries · Ending | ||||||||||||||
| CRE | $8,970 | $736 | $— | $9,706 | $7,926 | $1,481 | $— | $9,407 | ||||||
| SBA—real estate | 5,899 | (13) | — | 5,886 | 2,927 | 173 | — | 3,100 | ||||||
| SBA—non- real estate | 499 | 31 | (25) | 505 | 253 | 58 | (5) | 306 | ||||||
| C&I | 1,459 | 227 | (168) | 1,518 | 2,151 | 8 | (31) | 2,128 | ||||||
| Home mortgage | 9,459 | 225 | — | 9,684 | 9,499 | (1,482) | 2 | 8,019 | ||||||
| Consumer | — | — | — | — | 4 | (4) | $— | — | ||||||
| Total | $26,286 | $1,206 | $(193) | (193) | $27,299 | $22,760 | $234 | $(34) | $22,960 | |||||
| Gross loans | $2,151,217 | $1,931,007 | ||||||||||||
| Average gross loans | $2,107,081 | $1,891,157 | ||||||||||||
| Net charge-offs to average gross loans (1) | 0.04% | 0.01% | ||||||||||||
| Allowance for credit losses to gross loans | 1.27% | 1.19% | ||||||||||||
| As of and for the Nine Months Ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||
| ($ in thousands) | Beginning | Provision (Reversal) | Net (Charge-offs) Recoveries | Ending | Beginning | Provision (Reversal) | Net (Charge-offs) Recoveries | Ending |
| CRE | $9,290 | $465 | $(49) | $9,706 | $7,915 | $1,492 | $— | $9,407 |
| SBA—real estate | 5,557 | 742 | (413) | 5,886 | 1,657 | 1,509 | (66) | 3,100 |
| SBA—non- real estate | 418 | 103 | (16) | 505 | 147 | 149 | 10 | 306 |
| C&I | 1,844 | (250) | (76) | 1,518 | 1,215 | 944 | (31) | 2,128 |
| Home mortgage | 7,684 | 2,091 | (91) | 9,684 | 11,045 | (3,026) | — | 8,019 |
| Consumer | 3 | (3) | — | — | 14 | (14) | $— | — |
| Total | $24,796 | $3,148 | $(645) | $27,299 | $21,993 | $1,054 | $(87) | $22,960 |
| Gross loans | $2,151,217 | $1,931,007 | ||||||
| Average gross loans | $2,060,389 | $1,840,592 | ||||||
| Net charge-offs to average gross loans (1) | 0.04% | 0.01% | ||||||
| Allowance for credit losses to gross loans | 1.27% | 1.19% | ||||||
(1) Annualized.
The following table presents an allocation of the allowance for credit losses on loans by portfolio as of September 30, 2025 and December 31, 2024:
| September 30, 2025 · December 31, 2024 · Change | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) | Amount | % to Total | Amount | % to Total | $ | % |
| CRE | $9,706 | 35% | $9,290 | 38% | $416 | 4% |
| SBA—real estate | 5,886 | 22 | 5,557 | 22 | 329 | 6% |
| SBA—non- real estate | 505 | 2 | 418 | 2 | 87 | 21% |
| C&I | 1,518 | 5 | 1,844 | 7 | (326) | (18)% |
| Home mortgage | 9,684 | 36 | 7,684 | 31 | 2,000 | 26% |
| Consumer | — | — | 3 | 0 | (3) | (100)% |
| Total | $27,299 | 100% | $24,796 | 100% | $2,503 | 10% |
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