OP Bancorp
For the period ended Mar 31, 2026. Filed May 15, 2026.
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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.
Mar 31, 2026 · Filed May 15, 2026
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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 2025 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 $28.4 million as of March 31, 2026, an increase of $431 thousand from $28.0 million as of December 31, 2025. This increase was primarily driven by higher specific reserves associated with additional nonaccrual CRE loans, partially offset by lower qualitative reserves resulting from shifts in portfolio characteristics.
Analysis of the Allowance for Credit Losses
The following tables summarize the activity in the allowance for credit losses on loans by loan segments for the three months ended March 31, 2026 and 2025:
| As of and for the Three Months Ended March 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 · 2025 | ||||||||||||||
| ($ in thousands) · Beginning · Provision (Reversal) · Net (Charge-offs) Recoveries · Ending · Beginning · Provision (Reversal) · Net (Charge-offs) Recoveries · Ending | ||||||||||||||
| CRE | $10,427 | $1,566 | $14 | $12,007 | $9,290 | $(280) | $— | $9,010 | ||||||
| SBA—real estate | 6,385 | 595 | 14 | 6,994 | 5,557 | (176) | — | 5,381 | ||||||
| SBA—non- real estate | 587 | 87 | 3 | 677 | 418 | 89 | 5 | 512 | ||||||
| C&I | 1,611 | 237 | — | 1,848 | 1,844 | (105) | (29) | 1,710 | ||||||
| Home mortgage | 8,956 | (2,079) | — | 6,877 | 7,684 | 1,162 | (91) | 8,755 | ||||||
| Consumer | 9 | (6) | — | 3 | 3 | (3) | $— | — | ||||||
| Total | $27,975 | $400 | $31 | 31 | $28,406 | $24,796 | $687 | $(115) | $25,368 | |||||
| Gross loans | $2,234,259 | $2,043,885 | ||||||||||||
| Average gross loans | $2,206,685 | $1,995,899 | ||||||||||||
| Net (recoveries) charge-offs to average gross loans (1) | (0.01)% | 0.02% | ||||||||||||
| Allowance for credit losses to gross loans | 1.27% | 1.24% | ||||||||||||
(1) Annualized.
The following table presents an allocation of the allowance for credit losses on loans by portfolio as of March 31, 2026 and December 31, 2025:
| March 31, 2026 · December 31, 2025 · Change | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) | Amount | % to Total | Amount | % to Total | $ | % |
| CRE | $12,007 | 42% | $10,427 | 37% | $1,580 | 15% |
| SBA—real estate | 6,994 | 25 | 6,385 | 23 | 609 | 10% |
| SBA—non- real estate | 677 | 2 | 587 | 2 | 90 | 15% |
| C&I | 1,848 | 7 | 1,611 | 6 | 237 | 15% |
| Home mortgage | 6,877 | 24 | 8,956 | 32 | (2,079) | (23)% |
| Consumer | 3 | 0 | 9 | 0 | (6) | (67)% |
| Total | $28,406 | 100% | $27,975 | 100% | $431 | 2% |
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