OP Bancorp
For the period ended Mar 31, 2026. Filed May 15, 2026.
View on SEC.govAbout this filing
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.
Mar 31, 2026 · Filed May 15, 2026
OPBK$14.76-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001722010-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewFinancial ReviewCritical Accounting Policies and EstimatesCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001722010-26-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewFinancial ReviewCritical Accounting Policies and EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 33 previous paragraphs and 21 current paragraphs.
8 unchanged; 8 reworded; 5 added; 17 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
The Board of Governors of the Federal Reserve System ("Federal Reserve") maintained the Federal Funds Rate target range at 3.50% to 3.75% on April 29, 2026, marking the third consecutive policy pause this year. The FOMC reiterated that future rate decisions will remain data‑dependent as inflation continues to moderate unevenly and labor‑market indicators show signs of softening. Uncertainty has been heightened by ongoing geopolitical tensions in the Middle East, which have contributed to elevated oil prices and added upward pressure on inflation. The current rate environment continues to influence loan demand, deposit pricing, funding costs, and credit risk trends across the banking industry. These economic and geopolitical dynamics also increase the difficulty of forecasting interest‑rate movements and overall economic conditions, affecting the Company’s balance sheet management strategies and our ability to effectively price loans and longer‑term deposit products.
Current report
•Profitability ratios: First quarter 2026 ROAA and ROAE of 1.08% and 12.56%, respectively, increasing 16 and 183 basis points year-over-year, respectively.
Current report
•Deposit Growth: Total deposits were $2.33 billion, up $46.7 million, or 2%, from December 31, 2025, reflecting growth across all major deposit categories.
Removed paragraphs (17)
Previous report
The Board of Governors of the Federal Reserve System ("Federal Reserve") lowered the Federal Funds Rate target range from 3.75% to 4.00% on October 29, 2025, following its earlier cut in September. This marks the second consecutive rate reduction this year and reflects the Federal Reserve's response to a weakening labor market amid persistent inflationary pressures. The decision underscores the Fed Reserve's evolving stance toward supporting employment while maintaining price stability. However, the Federal Reserve have emphasized that further reductions are not guaranteed, and any additional moves will depend on incoming data and evolving economic condition. While markets had anticipated more easing, recent statements highlight the uncertainty surrounding future adjustments, particularly given the ongoing government shutdown that has delayed key economic reports. Political dynamics have further intensified, with increased pressure from the executive branch and recent changes to the composition of the Federal Open Market Committee. The current rate environment continues to influence lending activity, funding costs, and credit risk assessments across the financial sector. Additionally, heightened political uncertainty complicates the economic outlook, making it more challenging to anticipate the timing and magnitude of future rate adjustments. These dynamics present ongoing challenges for management in forecasting economic conditions and effectively pricing both loan products and longer-term deposit offerings.
Previous report
•Profitability ratios: Third quarter 2025 ROA and ROE of 1.04% and 12.36%, respectively, were up year-over-year. ROA and ROE of 0.99% and 11.70%, respectively, for the first nine months of 2025 were also up year-over-year.
Previous report
•Deposits Growth: Total deposits were $2.27 billion, up $246.1 million, or 12%, from December 31, 2024, reflecting growth in time and money market and others deposits.
Previous report
Allowance for Credit Losses
Previous report
Credit risk is inherent in the business of making loans. We establish an allowance for credit losses both on loans and off-balance sheet commitments through charges to earnings, which are shown in the statements of operations as the provision for credit losses. Specifically identifiable and quantifiable known losses are promptly charged off against the allowance. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our allowance for credit losses and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to earnings. The provision for credit losses and level of allowance for each period are dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market area.
Previous report
The Company employs a modeled approach that takes into account current and future economic conditions to estimate lifetime expected losses on a collective basis. With the adoption of CECL, the Company elected not to consider accrued interest receivable in its estimated credit losses because management writes off uncollectible accrued interest receivable in a timely manner. The Company considers writing off accrued interest amounts once the amounts become 90 days past due to be considered within a timely manner. The Company has elected to write off accrued interest receivable by reversing interest income. The Company uses transition matrices to develop the Probability of Default ("PD") and Loss Given Default ("LGD") approach, incorporating quantitative factors and qualitative considerations in the calculation of the allowance for credit losses for collectively assessed loans. The model provides forecasts of PD and LGD based on national unemployment rates using regression analysis. The Company incorporates future economic conditions using a weighted multiple scenario approach: baseline and adverse. The Company applies a reasonable and supportable period of one year for the baseline scenario and two years for the adverse scenario, after which loss assumptions revert to historical loss information through a one-year reversion period for the baseline scenario and a two-year reversion period for the adverse scenario. We make critical accounting estimates, including the judgments made in the application of significant accounting policies, sensitivity to change, and the likelihood of materially different reported results if different assumptions were used.
Previous report
In order to quantify the credit risk impact of other trends and changes within the loan portfolio, we utilize qualitative adjustments to the modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors listed below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the loss rates. This matrix considers the following nine factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council Interagency Policy Statement on the Allowance for Credit Losses, updated to reflect the adoption of CECL:
Previous report
• Changes in lending policies and procedures, including changes in underwriting standards and practices for collection, charge-offs, and recoveries;
Previous report
• Actual and expected changes in national and local economic and business conditions and developments in which the institution operates that affect the collectivity of loans;
Previous report
• Changes in the nature and volume of the loan portfolio;
Previous report
• Changes in the experience, ability, and depth of lending management and staff;
Previous report
• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans;
Previous report
• Changes in the quality of the credit review function;
Previous report
• Changes in the value of the underlying collateral for loans that are not collateral-dependent;
Previous report
• The existence, growth, and effect of any concentrations of credit, and
Previous report
• The effect of other external factors, such as the regulatory, legal and technological environments; competition; and events such as natural disasters.
Reworded paragraphs (8)
Previous wording
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. We currently operate twelve full service branches: nine branches across Los Angeles and Orange Counties in California, as well as one branch each in Santa Clara, California; Carrollton, Texas; and Las Vegas, Nevada. Additionally, we maintain five loan production offices located in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; Lynnwood, Washington; and Fairfax, Virginia.
Current wording
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. We currently operate twelve full service branches: nine branches across Los Angeles and Orange Counties in California, as well as one branch each in Santa Clara, California; Carrollton, Texas; and Las Vegas, Nevada. As of May 2026, we operate two loan production offices, following the opening of a new office in Bellevue, Washington effective May 2026, and the closure of four other loan production offices (Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Fairfax, Virginia) in April 2026, with the remaining office located in Lynnwood, Washington. We closed the four loan production offices due to limited market demand,
Previous wording
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.
Current wording
Our results of operations depend primarily on 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 including our senior subordinated note. In addition to net interest income, we derive earnings from fee income we receive in connection with our deposits, and from gains on sale and service of SBA loans. Our major operating expenses are salaries and related benefits we pay our management and staff, and 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.
Previous wording
The Company's net income for the third quarter of 2025 was $6.7 million, up $1.3 million, or 23%, compared with $5.4 million in the same period a year ago. The year-over-year increase was primarily driven by higher net interest income, partially offset by increases in noninterest expense, income tax expense and provision for credit losses. Net income for the first nine months of 2025 was $18.6 million, up $2.5 million, or 16%, compared with $16.1 million for the same period a year ago. The increase was primarily driven by higher net interest income, partially offset by increases in noninterest expense and provision for credit losses. The following were notable elements of the Company's performance for the periods presented:
Current wording
The Company's net income for the first quarter of 2026 was $7.2 million, up $1.7 million, or 30%, compared with $5.6 million in the same period a year ago. The year-over-year increase was primarily driven by higher net interest income. The following were notable elements of the Company's performance for the periods presented:
Previous wording
•Net interest income and net interest margin: Third quarter 2025 net interest income increased to $20.3 million, up $3.8 million, or 23%, from the year ago quarter. Third quarter 2025 net interest margin expanded 31 basis points to 3.26%, For the first nine months of 2025, net interest income increased to $57.5 million, up $8.8 million, or 18%, and net interest margin expended 18 basis points to 3.17%.
Current wording
•Net interest income and net interest margin: First quarter 2026 net interest income increased to $20.5 million, up $3.1 million, or 18%, from the year ago quarter. First quarter 2026 net interest margin expanded 18 basis points to 3.19%.
Previous wording
•Efficiency Ratios: Third quarter 2025 efficiency ratio of 55.68% improved 563 basis points from the same period in 2024. For the first nine months of 2025, efficiency ratio of 58.92% improved 216 basis points from the same period in 2024. The improvement in the efficiency ratios primarily reflected an increase in net interest income.
Current wording
•Efficiency Ratios: First quarter 2026 efficiency ratio of 57.97% improved 416 basis points from the same period in 2025. The improvement in the efficiency ratios primarily reflected an increase in net interest income.
Previous wording
•Asset Growth: Total assets reached $2.61 billion as of September 30, 2025, up $248.2 million, or 10%, from December 31, 2024, primarily driven by an increase $112.6 million in CRE loans and an increase $78.1 million in home mortgage loans.
Current wording
•Asset Growth: Total assets reached $2.70 billion as of March 31, 2026, up $48.4 million, or 2%, from December 31, 2025, primarily driven by a $40.6 million increase in gross loans.
Previous wording
•Loans Growth: Gross loans were $2.15 billion, up $194.4 million, or 10%, from December 31, 2024, primarily reflecting growth in CRE and home mortgage loans.
Current wording
•Loan Growth: Gross loans were $2.23 billion, up $40.6 million, or 2%, from December 31, 2025, primarily reflecting $41.1 million of CRE loan growth.
Previous wording
There have been no material changes to our critical accounting policies and estimates since those described in our 2024 Annual Report on Form 10-K.
Current wording
The Company's significant accounting policies are described in Note 1. Significant Accounting Policies to Consolidated Financial Statements in the 2025 Annual Report on Form 10-K. Certain policies involve critical accounting estimates requiring management judgment, and actual results may differ materially under different assumptions. Allowance for credit losses is considered critical to the Company's Consolidated Financial Statements, and there have been no material changes to our critical accounting policies and estimates since those described in our 2025 Annual Report on Form 10-K.