OP Bancorp
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
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Sep 30, 2026 · Filed Nov 6, 2026
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5 — Servicing Assets
Note 5. Servicing Assets
The Company recognizes the rights to service SBA loans for others as servicing assets when the benefit of servicing is expected to more than adequately compensate the Company for performing the servicing. Servicing assets are initially recorded at fair value and subsequently amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. As of September 30, 2026 and December 31, 2025, the Company serviced SBA loans for others with principal balances of $718.9 million and $682.9 million, respectively.
The Company periodically stratifies its servicing assets into groupings based on risk characteristics and evaluates each group for impairment based on fair value. Based on the impairment test as of September 30, 2026 and December 31, 2025, there wasno impairment.
The following table presents the activity in the servicing assets for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 |
| Beginning balance | $10,280 | $10,572 | $10,057 | $10,834 |
| Additions from loans sold with servicing retained | 1,100 | 843 | 2,921 | 2,094 |
| Amortized to expense | (761) | (986) | (2,359) | (2,499) |
| Ending balance | $10,619 | $10,429 | $10,619 | $10,429 |
The fair value of the servicing assets was $15.3 million as of September 30, 2026, which was determined using discount rates ranging from 4.50% to 12.68% and prepayment speeds ranging from 12.90% to 13.60%, depending on the stratification of the specific assets.
The fair value of the servicing assets was $14.8 million as of December 31, 2025, which was determined using discount rates ranging from 4.97% to 11.77% and prepayment speeds ranging from 12.90% to 13.60% depending on the stratification of the specific assets.
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