OP Bancorp

Liquidity refers to our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, and effectively balancing the related costs. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders. Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios, and increases in customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term basis.

Deposits are the primary funding source for the Bank. Deposits provide a stable source of funding and reduce our reliance on the wholesale funding markets. The following table presents the loan and deposit balances, the loans-to-deposit ratios, and deposits as a percentage of total liabilities as of September 30, 2026 and December 31, 2025:

In addition to deposits, we have access to various sources of wholesale funding, as well as borrowing capacity at the FHLB, Federal Reserve, and correspondent banks to sustain an adequate liquid asset portfolio, meet daily cash demands and allow management flexibility to execute the business strategy. Economic conditions and the stability of capital markets impact on our access to and the cost of wholesale funding. Our access to capital markets is also affected by the ratings received from various credit rating agencies.

We had $100.0 million in unsecured federal funds lines with no amounts advanced as of both September 30, 2026 and December 31, 2025. In addition, on such dates we had lines of credit from the Federal Reserve discount window of $224.6 million and $208.9 million as of September 30, 2026 and December 31, 2025, respectively. The Federal Reserve discount window lines were collateralized by a pool of CRE loans and C&I loans totaling $316.3 million and $290.7 million as of September 30, 2026 and December 31, 2025, respectively. We had no outstanding borrowings with the Federal Reserve as of September 30, 2026 or December 31, 2025. Our borrowing on these lines of credits is based upon our eligible collateral and thus may fluctuate from time to time.

Based on the values of loans pledged as collateral, we had $411.5 million of additional borrowing availability with the FHLB as of September 30, 2026. We also maintain relationships in the capital markets with brokers to issue certificates of deposit and money market accounts.

We believe we maintain ample access to liquidity, including highly liquid assets on our balance sheet and available unused borrowings from other financial institutions. The following table presents our liquid assets and available borrowings as of September 30, 2026 and December 31, 2025:

In addition to contractual obligations, we have unused commitments to extend credit, standby letters of credit, and commercial letters of credit that may impact liquidity. Because many of these commitments expire unused and remain subject to contractual conditions, they do not necessarily represent future cash requirements. Management believes existing liquidity sources are sufficient to meet the funding needs associated with these commitments. Additional information is provided in Note 8. Commitments and Contingencies, to the Consolidated Financial Statements in this Form 10-Q.