OP Bancorp

Note 2—Securities

The following tables summarize the amortized cost, gross unrealized gains and losses, and fair value of AFS debt securities as of June 30, 2026 and December 31, 2025:

Expected maturities may differ from contractual maturities on certain securities as the issuers and borrowers of the underlying collateral may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of AFS debt securities as of June 30, 2026, by contractual maturity, are shown below:

The following tables present the fair values and the associated gross unrealized losses of AFS debt securities, aggregated by length of time that the securities have been in a continuous unrealized loss position as of June 30, 2026 and December 31, 2025:

As of June 30, 2026 and December 31, 2025, the number of AFS debt securities in an unrealized loss position was 87 and 78, respectively.

The Company monitors credit quality of individual AFS debt securities by evaluating a range of factors, including issuer credit ratings, changes in those ratings over time, market indicators of credit risk, and any adverse economic or sector-specific conditions that may affect the issuer's ability to meet its obligations. These evaluations inform the Company's assessment of the appropriateness of the allowance for credit losses. The gross unrealized losses presented in the preceding tables were primarily attributable to changes in interest rates rather than credit deterioration.

As of June 30, 2026 and December 31, 2025, the Company's AFS debt securities portfolio was primarily composed of securities issued, guaranteed, or otherwise supported by the U.S. government. These securities were considered to have a zero credit loss assumption, and no material changes in credit ratings or adverse conditions were identified. Approximately 97% of the portfolio consisted of residential mortgage-backed securities and collateralized mortgage obligations issued by U.S. government-sponsored agencies, including Ginnie Mae, Fannie Mae and Freddie Mac. The remaining 3% consisted of the portfolio comprised of tax-exempt municipal securities. These securities were evaluated using similar criteria, including issuer credit ratings and financial condition. No significant deterioration in credit quality or adverse developments was noted for these securities, and there were no downgrades in credit ratings during the period. Based on this evaluation, the Company did not record an allowance for credit losses on its AFS debt securities as of June 30, 2026 and December 31, 2025. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 1. Significant Accounting Policies to Consolidated Financial Statements in the 2025 Annual Report on Form 10-K.

The amortized cost of the AFS debt securities excluded accrued interest receivables of $660 thousand and $604 thousand as of June 30, 2026 and December 31, 2025, respectively, which are included in Accrued interest receivableon the Consolidated Balance Sheets. For additional information on the Company's accounting policy related to securities' accrued interest receivables and impairment, see Note 1.Significant Accounting Policies to Consolidated Financial Statements in the 2025 Annual Report on Form 10-K.

As of June 30, 2026 and December 31, 2025, there wereno pledged securities to secure public deposits, borrowing and letters of credit from the FHLB and the Board of Governors of the Federal Reserve System, and for other purposes required or permitted by law.

The following table presents the other investment securities, which are included in Other investments on the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025:

(1)The Company recorded $15 thousand and $39 thousand unrealized losses for the three and six months ended June 30, 2026, respectively. In comparison, the Company recorded $12 thousand and $64 thousand unrealized gains for the three and six months ended June 30, 2025, respectively. The unrealized (losses) gains of the mutual fund are included inother income in the Consolidated Statements of Income.