OP Bancorp
For the period ended Jun 30, 2026. Filed Aug 7, 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.
Jun 30, 2026 · Filed Aug 7, 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 $28.1 million as of June 30, 2026, an increase of $125 thousand from $28.0 million as of December 31, 2025. The increase was primarily driven by specific reserves established on additional nonaccrual loans identified since December 31, 2025, partially offset by lower qualitative reserves reflecting a reduced impact from loan growth due to a lower growth rate and an improved economic outlook.
Analysis of the Allowance for Credit Losses
The following tables summarize the activity in the allowance for credit losses on loans by loan segments for the three and six months ended June 30, 2026 and 2025:
| As of and for the Three Months Ended June 30, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 · 2025 | ||||||||||||||
| ($ in thousands) · Beginning · (Reversal)Provision · Net Recoveries (Charge-offs) · Ending · Beginning · Provision (Reversal) · Net (Charge-offs) Recoveries · Ending | ||||||||||||||
| CRE | $12,007 | $(817) | $— | $11,190 | $9,010 | $9 | $(49) | $8,970 | ||||||
| SBA—real estate | 6,994 | 593 | 33 | 7,620 | 5,381 | 931 | (413) | 5,899 | ||||||
| SBA—non- real estate | 677 | 179 | (145) | 711 | 512 | (17) | 4 | 499 | ||||||
| C&I | 1,848 | (203) | (63) | 1,582 | 1,710 | (372) | 121 | 1,459 | ||||||
| Home mortgage | 6,877 | 118 | — | 6,995 | 8,755 | 704 | — | 9,459 | ||||||
| Consumer | 3 | (1) | — | 2 | — | — | $— | — | ||||||
| Total | $28,406 | $(131) | $(175) | (175) | $28,100 | $25,368 | $1,255 | $(337) | $26,286 | |||||
| Gross loans | $2,259,061 | $2,071,580 | ||||||||||||
| Average gross loans | $2,221,252 | $2,076,965 | ||||||||||||
| Net charge-offs to average gross loans (1) | 0.03% | 0.06% | ||||||||||||
| Allowance for credit losses to gross loans | 1.24% | 1.27% | ||||||||||||
| As of and for the Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2026 · 2025 | ||||||||
| ($ in thousands) | Beginning | Provision (Reversal) | Net Recoveries (Charge-offs) | Ending | Beginning | (Reversal)Provision | Net (Charge-offs) Recoveries | Ending |
| CRE | $10,427 | $749 | $14 | $11,190 | $9,290 | $(271) | $(49) | $8,970 |
| SBA—real estate | 6,385 | 1,188 | 47 | 7,620 | 5,557 | 755 | (413) | 5,899 |
| SBA—non- real estate | 587 | 266 | (142) | 711 | 418 | 72 | 9 | 499 |
| C&I | 1,611 | 34 | (63) | 1,582 | 1,844 | (477) | 92 | 1,459 |
| Home mortgage | 8,956 | (1,961) | — | 6,995 | 7,684 | 1,866 | (91) | 9,459 |
| Consumer | 9 | (7) | — | 2 | 3 | (3) | $— | — |
| Total | $27,975 | $269 | $(144) | $28,100 | $24,796 | $1,942 | $(452) | $26,286 |
| Gross loans | $2,259,061 | $2,071,580 | ||||||
| Average gross loans | $2,214,009 | $2,036,656 | ||||||
| Net charge-offs to average gross loans (1) | 0.01% | 0.04% | ||||||
| Allowance for credit losses to gross loans | 1.24% | 1.27% | ||||||
(1) Annualized.
The following table presents an allocation of the allowance for credit losses on loans by portfolio as of June 30, 2026 and December 31, 2025:
| June 30, 2026 · December 31, 2025 · Change | ||||||||
|---|---|---|---|---|---|---|---|---|
| Allowance Allocation · % of Gross Loans · Allowance Allocation · % of Gross Loans | ||||||||
| ($ in thousands) · Amount · % to Total Allowance · Amount · % to Total Allowance · $ · % | ||||||||
| CRE | $11,190 | 40% | 0.94% | $10,427 | 37% | 0.92% | $763 | 7% |
| SBA—real estate | 7,620 | 27 | 2.99% | 6,385 | 23 | 2.64% | 1,235 | 19% |
| SBA—non- real estate | 711 | 2 | 2.95% | 587 | 2 | 2.61% | 124 | 21% |
| C&I | 1,582 | 6 | 0.71% | 1,611 | 6 | 0.73% | (29) | (2)% |
| Home mortgage | 6,995 | 25 | 1.23% | 8,956 | 32 | 1.56% | (1,961) | (22)% |
| Consumer | 2 | 0 | 0.78% | 9 | 0 | 0.67% | (7) | (78)% |
| Total | $28,100 | 100% | 1.24% | $27,975 | 100% | 1.28% | $125 | 0% |
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