Item 1. Financial Statements
Item 1. Financial Statements (unaudited)
OP BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
($ in thousands) June 30, 2025 (Unaudited) December 31, 2024
ASSETS
Cash and due from banks
$ 16,592 $ 12,267
Interest-bearing deposits with banks
188,796 122,676
Cash and cash equivalents 205,388 134,943
Available-for-sale ("AFS") debt securities, at fair value
175,000 185,909
Other investments 17,101 16,437
Loans held-for-sale
20,016 4,581
Net loans (net of allowance for credit losses on loans of $ 26,286 and $ 24,796 )
2,045,294 1,932,056
Premises and equipment, net 6,852 5,449
Accrued interest receivable 9,991 9,188
Servicing assets 10,572 10,834
Company owned life insurance 23,259 22,912
Deferred tax assets, net 12,633 14,893
Other real estate owned ("OREO")
1,237 1,237
Operating right-of-use assets 9,887 7,415
Other assets 26,365 20,159
TOTAL ASSETS
$ 2,563,595 $ 2,366,013
LIABILITIES
Deposits:
Noninterest-bearing $ 565,683 $ 504,928
Interest-bearing:
Money market and others 431,252 329,095
Time deposits greater than $250
643,350 565,813
Other time deposits 614,443 627,449
Total deposits 2,254,728 2,027,285
Federal Home Loan Bank ("FHLB") advances
50,000 95,000
Accrued interest payable 15,720 16,067
Operating lease liabilities 12,243 7,857
Other liabilities 17,186 14,811
Total liabilities 2,349,877 2,161,020
SHAREHOLDERS' EQUITY
Preferred stock – no par value; 10,000,000 shares authorized; no shares issued or outstanding
— —
Common stock – no par value; 50,000,000 shares authorized; 14,885,614 and 14,819,866 shares issued and outstanding
72,984 73,697
Additional paid-in capital 11,484 11,928
Retained earnings 143,114 134,781
Accumulated other comprehensive loss, net of tax
( 13,864 ) ( 15,413 )
Total shareholders’ equity 213,718 204,993
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 2,563,595 $ 2,366,013
See accompanying notes to unaudited consolidated financial statements
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OP BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands, except per share data) 2025 2024 2025 2024
INTEREST INCOME
Interest and fees on loans $ 34,263 $ 30,605 $ 65,952 $ 60,747
Interest on AFS debt securities 1,437 1,590 2,933 3,050
Other interest income 1,965 2,162 3,639 3,473
Total interest income 37,665 34,357 72,524 67,270
Interest expense
Interest on deposits 17,475 17,343 34,083 33,018
Interest on borrowings 469 820 1,302 2,079
Total interest expense 17,944 18,163 35,385 35,097
Net interest income 19,721 16,194 37,139 32,173
Provision for credit losses 1,206 617 1,942 762
Net interest income after provision for credit losses 18,515 15,577 35,197 31,411
NONINTEREST INCOME
Service charges on deposits 1,017 793 2,017 1,405
Loan servicing fees, net of amortization 900 575 1,907 1,347
Gains on sale of loans 1,441 2,325 3,460 4,028
Other income 610 491 1,400 990
Total noninterest income 3,968 4,184 8,784 7,770
NONINTEREST EXPENSE
Salaries and employee benefits 9,075 7,568 17,851 15,409
Occupancy and equipment 1,584 1,660 3,165 3,315
Data processing and communication 306 530 602 1,017
Professional fees 418 406 825 801
FDIC insurance and regulatory assessments 506 378 993 752
Promotion and advertising 232 151 388 300
Directors’ fees 198 178 378 335
Foundation donation and other contributions 636 539 1,192 1,079
Other expenses 1,082 779 2,457 1,338
Total noninterest expense 14,037 12,189 27,851 24,346
INCOME BEFORE INCOME TAX EXPENSE 8,446 7,572 16,130 14,835
Income tax expense 2,113 2,136 4,237 4,173
NET INCOME $ 6,333 $ 5,436 $ 11,893 $ 10,662
BASIC EARNINGS PER SHARE ("EPS") $ 0.42 $ 0.36 $ 0.79 $ 0.70
DILUTED EPS $ 0.42 $ 0.36 $ 0.79 $ 0.70
See accompanying notes to unaudited consolidated financial statements
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OP BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands) 2025 2024 2025 2024
Net income $ 6,333 $ 5,436 $ 11,893 $ 10,662
Other comprehensive income (loss), net of tax:
Net changes in unrealized gains (losses) on AFS debt securities
( 186 ) ( 127 ) 2,047 ( 1,428 )
Net changes in unrealized losses on cash flow hedges ( 136 ) ( 254 ) ( 498 ) ( 254 )
Other comprehensive income (loss) ( 322 ) ( 381 ) 1,549 ( 1,682 )
COMPREHENSIVE INCOME $ 6,011 $ 5,055 $ 13,442 $ 8,980
See accompanying notes to unaudited consolidated financial statements
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OP BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)
Common Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
($ in thousands, except per share data) Shares
Outstanding
Amount
Balance at April 1, 2025 14,914,261 $ 73,697 $ 11,371 $ 138,563 $ ( 13,542 ) $ 210,089
Net income — — — 6,333 — 6,333
Other comprehensive income
— — — — ( 322 ) ( 322 )
Stock issued under stock-based compensation plans, net of forfeiture
36,740 — ( 40 ) — — ( 40 )
Stock-based compensation, net — — 153 — — 153
Repurchase of common stock ( 65,387 ) ( 713 ) — — — ( 713 )
Cash dividends declared ($ 0.12 per share)
— — — ( 1,782 ) — ( 1,782 )
Balance at June 30, 2025 14,885,614 $ 72,984 $ 11,484 $ 143,114 $ ( 13,864 ) $ 213,718
Balance at April 1, 2024 14,982,555 $ 75,957 $ 11,240 $ 124,280 $ ( 16,752 ) $ 194,725
Net income — — — 5,436 — 5,436
Other comprehensive loss
— — — — ( 381 ) ( 381 )
Stock issued under stock-based compensation plans, net of forfeiture
58,047 — ( 116 ) — — ( 116 )
Stock-based compensation, net — — 317 — — 317
Repurchase of common stock ( 224,321 ) ( 2,208 ) — — — ( 2,208 )
Cash dividends declared ($ 0.12 per share)
— — — ( 1,787 ) — ( 1,787 )
Balance at June 30, 2024 14,816,281 $ 73,749 $ 11,441 $ 127,929 $ ( 17,133 ) $ 195,986
Common Stock Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
($ in thousands, except per share data) Shares
Outstanding
Amount
Balance at January 1, 2025 14,819,866 $ 73,697 $ 11,928 $ 134,781 $ ( 15,413 ) $ 204,993
Net income — — — 11,893 — 11,893
Other comprehensive income
— — — — 1,549 1,549
Stock issued under stock-based compensation plans, net of forfeiture
131,135 — ( 757 ) — — ( 757 )
Stock-based compensation, net — — 313 — — 313
Repurchase of common stock ( 65,387 ) ( 713 ) — — — ( 713 )
Cash dividends declared ($ 0.24 per share)
— — — ( 3,560 ) — ( 3,560 )
Balance at June 30, 2025 14,885,614 $ 72,984 $ 11,484 $ 143,114 $ ( 13,864 ) $ 213,718
Balance at January 1, 2024 15,000,436 $ 76,280 $ 10,942 $ 120,855 $ ( 15,451 ) $ 192,626
Net income — — — 10,662 — 10,662
Other comprehensive loss
— — — — ( 1,682 ) ( 1,682 )
Stock issued under stock-based compensation plans, net of forfeiture
89,863 160 ( 137 ) — — 23
Stock-based compensation, net — — 636 — — 636
Repurchase of common stock ( 274,018 ) ( 2,691 ) — — — ( 2,691 )
Cash dividends declared ($ 0.24 per share)
— — — ( 3,588 ) — ( 3,588 )
Balance at June 30, 2024 14,816,281 $ 73,749 $ 11,441 $ 127,929 $ ( 17,133 ) $ 195,986
See accompanying notes to unaudited consolidated financial statements
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OP BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30,
($ in thousands) 2025 2024
Cash flows from operating activities
Net income $ 11,893 $ 10,662
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Provision for credit losses 1,942 762
Deferred income tax expense (benefit) 1,287 ( 209 )
Amortization of servicing assets 1,513 1,996
Amortization of low income housing partnerships 1,062 1,035
Accretion of net discounts on loans ( 724 ) ( 1,275 )
Depreciation and amortization of premises and equipment 741 699
Amortization of net premiums on securities 4 52
Gains on sale of loans ( 3,460 ) ( 4,028 )
Stock-based compensation 313 636
Earnings on company owned life insurance ( 347 ) ( 333 )
Net change in fair value of equity investment with readily determinable fair value
( 64 ) 50
Origination of loans held-for-sale ( 73,911 ) ( 63,660 )
Proceeds from sales of loans held-for-sale 60,685 61,700
Net change in:
Accrued interest receivable and other assets ( 2,402 ) 6,433
Accrued interest payable and other liabilities 129 ( 1,908 )
Net cash (used in) provided by operating activities ( 1,339 ) 12,612
Cash flows from investing activities
Net change in loans receivable ( 114,456 ) ( 103,315 )
Proceeds from matured, called, or paid-down AFS debt securities
14,118 12,048
Purchase of available-for-sale debt securities — ( 19,082 )
Purchase of Federal Home Loan Bank stock ( 540 ) ( 87 )
Purchase of premises and equipment, net ( 2,144 ) ( 167 )
Investments in low-income housing partnerships ( 2,607 ) ( 2,556 )
Net cash used in investing activities ( 105,629 ) ( 113,159 )
Cash flows from financing activities
Net change in deposits 227,443 133,263
Cash received from stock option exercises — 160
Proceeds from FHLB advances 50,000 40,000
Repayment of FHLB advances ( 95,000 ) ( 30,000 )
Repurchase of common stock ( 713 ) ( 2,691 )
Cash dividend paid on common stock ( 3,560 ) ( 3,588 )
Payments related to tax-withholding for vested restricted stock awards ( 757 ) ( 137 )
Net cash provided by financing activities 177,413 137,007
Net change in cash and cash equivalents 70,445 36,460
Cash and cash equivalents at beginning of period 134,943 91,216
Cash and cash equivalents at end of period $ 205,388 $ 127,676
Supplemental cash flow information:
Cash paid during the period for:
Income taxes $ 3,496 $ 5,495
Interest 35,733 32,221
Supplemental noncash disclosure:
Initial recognition of right-of-use assets $ 3,536 $ 871
New commitments to low income housing partnership investment 5,000 —
Transfer of loan to OREO — 1,077
See accompanying notes to unaudited consolidated financial statements
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OP BANCORP AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Basis of Presentation and Significant Accounting Policies
OP Bancorp (referred to herein on an unconsolidated basis as "OP Bancorp" and on a consolidated basis as the "Company") is a California corporation and the registered bank holding company for Open Bank ("Open Bank" or the “Bank”).
The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared by management in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by Generally Accepted Accounting Principles in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of the financial results for the interim periods presented, including eliminating intercompany transactions and balances. Certain items in our consolidated financial statements and notes for prior years have been reclassified to conform to the current presentation. The results of operations for the interim periods are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report on Form 10-K”). Descriptions of our significant accounting policies are included in Note 1. Summary of Significant Accounting Policies in the Notes to consolidated financial statements in the 2024 Annual Report on Form 10-K.
Accounting Pronouncements Adopted in 2025
There were no recently adopted accounting pronouncements during the six months ended June 30, 2025 that had a material impact on the Company's consolidated financial statements or disclosures.
Recently Issued Accounting Pronouncements
Standard
Description
Effective date
Effect on financial statements
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures .
ASU 2023-09 amends the disclosure requirements for income taxes, including the requirement for further disaggregation of the income tax rate reconciliation and income taxes paid disclosures.
December 31, 2025
Early adoption is permitted
We are currently evaluating the impact of this guidance on our consolidated financial statements.
ASU 2024-03, Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
ASU 2024-03 requires disaggregated disclosure of income statement expenses, including disaggregated information about certain costs/expenses in a table format in the note to the financial statements in both annual and interim financial statements.
December 31, 2027
Early adoption is permitted
We are currently evaluating the impact of this guidance on our consolidated financial statements.
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, 2025 and December 31, 2024:
June 30, 2025
($ in thousands) Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 38,425 $ — $ ( 3,619 ) $ 34,806
Residential collateralized mortgage obligations 149,107 573 ( 14,807 ) 134,873
Municipal securities - tax exempt 5,884 — ( 563 ) 5,321
Total AFS debt securities $ 193,416 $ 573 $ ( 18,989 ) $ 175,000
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December 31, 2024
($ in thousands) Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 41,521 $ — $ ( 4,445 ) $ 37,076
Residential collateralized mortgage obligations 160,187 312 ( 17,458 ) 143,041
Municipal securities - tax exempt 5,830 37 ( 75 ) 5,792
Total AFS debt securities $ 207,538 $ 349 $ ( 21,978 ) $ 185,909
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, 2025, by contractual maturity, are shown below:
($ in thousands) Amortized
Cost Fair
Value
Within one year $ 39 $ 38
After one year through five years 834 810
After five years through ten years 13,504 12,368
After ten years 179,039 161,784
Total AFS debt securities $ 193,416 $ 175,000
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, 2025 and December 31, 2024:
June 30, 2025
Less Than 12 Months 12 Months or Longer Total
($ in thousands) Fair
Value
Gross Unrealized
Loss
Fair
Value
Gross Unrealized
Loss
Fair
Value
Gross Unrealized
Loss
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 4,915 $ ( 87 ) $ 29,891 $ ( 3,532 ) $ 34,806 $ ( 3,619 )
Residential collateralized mortgage obligations 5,359 ( 11 ) 83,708 ( 14,796 ) 89,067 ( 14,807 )
Municipal securities - tax exempt 3,688 ( 352 ) 1,633 ( 211 ) 5,321 ( 563 )
Total AFS debt securities $ 13,962 $ ( 450 ) $ 115,232 $ ( 18,539 ) $ 129,194 $ ( 18,989 )
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December 31, 2024
Less Than 12 Months 12 Months or Longer Total
($ in thousands) Fair
Value
Gross Unrealized
Loss
Fair
Value
Gross Unrealized
Loss
Fair
Value
Gross Unrealized
Loss
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 5,442 $ ( 133 ) $ 31,634 $ ( 4,312 ) $ 37,076 $ ( 4,445 )
Residential collateralized mortgage obligations 27,614 ( 214 ) 93,236 ( 17,244 ) 120,850 ( 17,458 )
Municipal securities - tax exempt 895 ( 19 ) 1,788 ( 56 ) 2,683 ( 75 )
Total AFS debt securities $ 33,951 $ ( 366 ) $ 126,658 $ ( 21,612 ) $ 160,609 $ ( 21,978 )
As of June 30, 2025 and December 31, 2024, the number of AFS debt securities in an unrealized loss position was 80 and 84 , respectively.
The Company monitors credit quality of individual AFS debt securities by evaluating a variety of methods and utilizing such information in our evaluation of the appropriateness of the allowance for credit losses for our AFS debt securities. The gross unrealized losses presented in the preceding tables were primarily attributable to interest rate movement. The Company's portfolio was comprised of securities issued, guaranteed, or otherwise supported by the U.S. government. As such, it was expected that the AFS debt securities would not be settled at a price less than the amortized cost. Further, the Company intended to hold the AFS debt securities, and it was not more-likely-than-not that it would be required to sell the AFS debt securities before recovery of amortized cost. Approximately 97 % of the AFS debt securities were residential mortgage-backed securities and collateralized mortgage obligations that were issued by U.S. government-sponsored agencies, such as Ginnie Mae, Fannie Mae and Freddie Mac. The remaining 3 % of the AFS debt securities are tax-exempt municipal securities. Accordingly, for these securities, the Company did not have allowance for credit losses as of June 30, 2025 and December 31, 2024.
The amortized cost of the AFS debt securities excluded accrued interest receivables of $ 531 thousand and $ 569 thousand as of June 30, 2025 and December 31, 2024, respectively, which are included in Accrued interest receivable on the consolidated balance sheets . For additional information on the Company's accounting policy related to securities' accrued interest receivables and impairment, see Note 1 —Business and Basis of Presentation to the consolidated financial statements in the 2024 Annual Report on Form 10-K.
As of June 30, 2025 and December 31, 2024, there were no 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, 2025 and December 31, 2024:
($ in thousands) June 30, 2025 December 31, 2024
FHLB stock $ 13,155 $ 12,615
Pacific Coast Bankers Bank ("PCBB") stock 190 190
Mutual fund - Community Reinvestment Act ("CRA") qualified (1)
3,651 3,532
Time deposits placed in other banks 105 100
Total other investments $ 17,101 $ 16,437
(1) The Company recorded $ 12 thousand and $ 64 thousand unrealized gains for the three and six months ended June 30, 2025, respectively, and $ 14 thousand and $ 50 thousand unrealized losses for the three and six months ended June 30, 2024, respectively. The unrealized gains (losses) of the mutual fund are included in other income in the consolidated statements of income.
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Note 3 — Loans and Allowance for Credit Losses on Loans
Loans
The following table presents the composition of the loan portfolio as of June 30, 2025 and December 31, 2024:
($ in thousands) June 30, 2025 December 31, 2024
Commercial real estate ("CRE") $ 1,021,431 $ 980,247
SBA—real estate 241,451 231,962
SBA—non-real estate 21,973 21,748
C&I 193,359 213,097
Home mortgage 593,256 509,524
Consumer and other 110 274
Gross loans 2,071,580 1,956,852
Allowance for credit losses ( 26,286 ) ( 24,796 )
Net loans (1)
$ 2,045,294 $ 1,932,056
(1) Includes net deferred loan costs (fees) and net unamortized premiums (discounts) of $ 398 thousand as of June 30, 2025 and $( 702 ) thousand as of December 31, 2024 .
Allowance for Credit Losses on Loans
For loans that share risk characteristics, the Company employs a modeled approach that takes into account current and future economic conditions to estimate lifetime expected losses on a collective basis. With the adoption of Current Expected Credit Losses ("CECL"), the Company elected not to consider accrued interest receivable in its estimated credit losses as the Company writes off the uncollectible accrued interest receivable in a timely manner. Generally, loans are placed on nonaccrual status when they become 90 days past due or more and all unpaid accrued interest is reversed against interest income. Accrued interest receivable on loans totaled $ 8.6 million and $ 8.1 million as of June 30, 2025 and December 31, 2024, respectively.
For collectively evaluated loans, the Company uses transition matrices to develop the Probability of Default ("PD") and Loss Given Default ("LGD") approaches, incorporating quantitative factors and qualitative considerations in the calculation of the allowance. The model provides forecasts of PD and LGD based on national unemployment rates using regression analysis. The Company incorporates future economic conditions using a weighted multiple scenario approach: baseline and adverse. The Company applies a reasonable and supportable period of one year for the baseline scenario and two years for the adverse scenario, after which loss assumptions revert to historical loss information through a one-year reversion period for the baseline scenario and a two-year reversion period for the adverse scenario. The Company segments the loan portfolio by major loan type using the Call Report codes and internal loan risk ratings to determine the Bank's allowance for credit losses.
The methodologies described above generally rely on historical loss experience to determine the quantitative portion of the allowance for credit losses. The Company also consider other qualitative and macroeconomic variables related to current conditions and reasonable and supportable forecasts that may indicate current expected credit losses could differ from the historical information reflected in the quantitative models. Key qualitative and macroeconomic variables include GDP, unemployment rates, interest rates, asset quality ratios, loan portfolio concentration, California house price index, and CRE price index. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors listed below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the loss rates. This matrix considers the following nine factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council Interagency Policy Statement on the Allowance for Credit Losses, updated to reflect the adoption of CECL:
• Changes in lending policies and procedures, including changes in underwriting standards and practices for collection, charge-offs, and recoveries;
• Actual and expected changes in national and local economic and business conditions and developments in which the institution operates that affect the collectivity of loans;
• Changes in the nature and volume of the loan portfolio;
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• Changes in the experience, ability, and depth of lending management and staff;
• Changes in the volume and severity of past-due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans;
• Changes in the quality of the credit review function;
• Changes in the value of the underlying collateral for loans that are not collateral-dependent;
• The existence, growth, and effect of any concentrations of credit, and
• The effect of other external factors, such as the regulatory, legal and technological environments; competition; and events such as natural disasters.
For loans that do not share similar risk characteristics such as nonaccrual loans above $ 500 thousand, the Company evaluates these loans on an individual loan basis. Such nonaccrual loans are considered to have different risk profiles than performing loans and are therefore evaluated individually. The Company elected to collectively assess nonaccrual loans with balances below $ 500 thousand along with the performing and accrual loans, in order to reduce the operational burden of individually assessing small nonaccrual loans with immaterial balances. When a loan is individually evaluated for the allowance for credit losses, the Company uses one of two different asset valuation measurement methods: 1) the present value of future cash flows discounted at the loan’s effective interest rate; or 2) the fair value of the collateral for a collateral-dependent loan. For the collateral-dependent loans, the Company obtains a new "as-is" valuation appraisal to determine an updated fair value of collateral. To ensure that appraised values remain current, the Company obtains updated appraisals every twelve months from a qualified independent appraiser. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an allowance for credit losses with a corresponding charge to the provision for credit losses.
The Company maintains a separate allowance for credit losses for its off-balance sheet commitments. The Company uses an estimated funding rate to allocate an allowance to undrawn exposures. This funding rate serves as a credit conversion factor, reflecting the likelihood that undrawn lines of credit may be drawn at any time. The funding rate is determined based on a look-back period of 8 quarters. Credit loss is not estimated for off-balance sheet commitments that are unconditionally cancellable by the Company.
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The following table summarizes the activity in the allowance for credit losses on loans by portfolio segment for the three and six months ended June 30, 2025 and 2024:
($ in thousands) CRE
SBA—
Real Estate
SBA —Non-
Real Estate
C&I
Home
Mortgage
Consumer and Other Total
Three Months Ended June 30, 2025
Beginning balance $ 9,010 $ 5,381 $ 512 $ 1,710 $ 8,755 $ — $ 25,368
Provision for (reversal of) credit losses 9 931 ( 17 ) ( 372 ) 704 — 1,255
Charge-offs ( 129 ) ( 413 ) — — — — ( 542 )
Recoveries 80 — 4 121 — — 205
Ending balance $ 8,970 $ 5,899 $ 499 $ 1,459 $ 9,459 $ — $ 26,286
Three Months Ended June 30, 2024
Beginning balance $ 8,044 $ 2,793 $ 229 $ 1,663 $ 9,391 $ 9 $ 22,129
Provision for (reversal of) credit losses ( 118 ) 134 20 488 108 ( 5 ) 627
Charge-offs — — — — — — —
Recoveries — — 4 — — — 4
Ending balance $ 7,926 $ 2,927 $ 253 $ 2,151 $ 9,499 $ 4 $ 22,760
($ in thousands) CRE
SBA—
Real Estate
SBA —Non-
Real Estate
C&I
Home
Mortgage
Consumer and Other Total
Six Months Ended June 30, 2025
Beginning balance $ 9,290 $ 5,557 $ 418 $ 1,844 $ 7,684 $ 3 $ 24,796
Provision for (reversal of) credit losses ( 271 ) 755 72 ( 477 ) 1,866 ( 3 ) 1,942
Charge-offs ( 129 ) ( 413 ) ( 10 ) ( 29 ) ( 91 ) — ( 672 )
Recoveries 80 — 19 121 — — 220
Ending balance $ 8,970 $ 5,899 $ 499 $ 1,459 $ 9,459 $ — $ 26,286
Six Months Ended June 30, 2024
Beginning balance $ 7,915 $ 1,657 $ 147 $ 1,215 $ 11,045 $ 14 $ 21,993
Provision for (reversal of) credit losses 11 1,336 91 936 ( 1,544 ) ( 10 ) 820
Charge-offs — ( 66 ) — — ( 2 ) — ( 68 )
Recoveries — — 15 — — — 15
Ending balance $ 7,926 $ 2,927 $ 253 $ 2,151 $ 9,499 $ 4 $ 22,760
Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. The estimated credit losses for these loans are based on the collateral’s fair value less selling costs. Generally, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less selling costs at the time of foreclosure.
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The following table represents the amortized cost basis of collateral-dependent loans by property type as of June 30, 2025 and December 31, 2024, for which repayment is expected to be obtained through the sale of the underlying collateral:
($ in thousands) Hotel / Motel Retail Gas Station Single-Family Residential Total (1)(2)
As of June 30, 2025
CRE
$ 1,580 $ 222 $ — $ — $ 1,802
SBA—real estate 3,706 1,567 — — 5,273
Home mortgage — — — 1,418 1,418
Total $ 5,286 $ 1,789 $ — $ 1,418 $ 8,493
As of December 31, 2024
CRE
$ 1,580 $ 363 $ — $ — $ 1,943
SBA—real estate 3,702 2,006 — — 5,708
Total $ 5,282 $ 2,369 $ — $ — $ 7,651
(1) Excludes guaranteed portion of SBA loans totaling $ 12.5 million and $ 15.2 million as of June 30, 2025 and December 31, 2024, respectively.
(2) The allowance for credit losses allocated to these loans as of June 30, 2025 and December 31, 2024 was $ 904 thousand and $ 1.2 million, respectively.
The following table presents the amortized cost in nonaccrual loans and loans past due 90 or more days and still accruing interest as of June 30, 2025 and December 31, 2024:
($ in thousands) Nonaccrual Loans with a Related Allowance for Credit Losses Nonaccrual Loans without a Related Allowance for Credit Losses Total Nonaccrual Loans 90 or More
Days
Past Due &
Still Accruing
Total (1)
As of June 30, 2025
CRE
$ — $ 1,802 $ 1,802 $ — $ 1,802
SBA—real estate 2,444 2,932 5,376 — 5,376
SBA—non-real estate 320 — 320 — 320
C&I — — — — —
Home mortgage — 1,418 1,418 — 1,418
Total $ 2,764 $ 6,152 $ 8,916 $ — $ 8,916
As of December 31, 2024
CRE
$ 363 $ 1,580 $ 1,943 $ — $ 1,943
SBA—real estate 2,006 3,702 5,708 — 5,708
SBA—non-real estate 169 — 169 — 169
Total $ 2,538 $ 5,282 $ 7,820 $ — $ 7,820
(1) Excludes guaranteed portion of loans totaling $ 13.9 million and $ 16.3 million as of June 30, 2025 and December 31, 2024, respectively.
Nonaccrual loans and accruing loans past due 90 or more days include both homogeneous loans that are collectively and individually evaluated for impairment and individually classified impaired loans.
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The following table represents the aging analysis of gross loans as of June 30, 2025 and December 31, 2024:
Still Accruing
($ in thousands) 30-59
Days
Past Due
60-89
Days
Past Due
90 or More Days
Past Due
Nonaccrual Loans (1)
Current Accruing Loans
Total
As of June 30, 2025
CRE $ — $ — $ — $ 1,802 $ 1,019,629 $ 1,021,431
SBA—real estate 4,275 1,882 — 5,376 229,918 241,451
SBA—non-real estate 234 — — 320 21,419 21,973
C&I — — — — 193,359 193,359
Home mortgage 298 3,114 — 1,418 588,426 593,256
Consumer and other — — — — 110 110
Total $ 4,807 $ 4,996 $ — $ 8,916 $ 2,052,861 $ 2,071,580
As of December 31, 2024 (2)
CRE $ — $ — $ — $ 1,943 $ 978,304 $ 980,247
SBA—real estate 237 74 — 5,708 225,943 231,962
SBA—non-real estate 133 137 — 169 21,309 21,748
C&I 15 — — — 213,082 213,097
Home mortgage 2,774 5,594 — — 501,156 509,524
Consumer and other — — — — 274 274
Total $ 3,159 $ 5,805 $ — $ 7,820 $ 1,940,068 $ 1,956,852
(1) Excludes guaranteed portion of loans totaling $ 13.9 million and $ 16.3 million as of June 30, 2025 and December 31, 2024, respectively.
(2) Revised to conform with the current presentation.
Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, other-than-insignificant payment delay, other-than-insignificant term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.
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The following table presents the amortized cost of loans as of June 30, 2025 that were modified for borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 and 2024 by loan class and modification type:
Three Months Ended June 30, 2025 Modification Type Percentage to Each Loan Segment
($ in thousands) Payment Delay Interest Only Total
CRE $ 1,084 $ — $ 1,084 0.11 %
SBA—real estate (1)
2,081 — 2,081 0.86 %
Total $ 3,165 $ — $ 3,165
Three Months Ended June 30, 2024 Modification Type Percentage to Each Loan Segment
($ in thousands) Payment Delay Term Extension Total
SBA—real estate (1)
$ 390 $ — $ 390 0.17 %
SBA—non-real estate $ — $ 9 $ 9 0.05 %
C&I 130 — 130 0.07 %
Total $ 520 $ 9 $ 529
Six Months Ended June 30, 2025 Modification Type Percentage to Each Loan Segment
($ in thousands) Payment Delay Interest Only Total
CRE
$ 1,084 $ 3,155 $ 4,239 0.42 %
SBA—real estate (1)
2,730 — 2,730 1.13 %
Total $ 3,814 $ 3,155 $ 6,969
Six Months Ended June 30, 2024 Modification Type Percentage to Each Loan Segment
($ in thousands) Payment Delay Term Extension Total
SBA—real estate (1)
$ 1,130 $ — $ 1,130 0.50 %
SBA—non-real estate $ — $ 9 $ 9 0.05 %
C&I 130 — 130 0.07 %
Total $ 1,260 $ 9 $ 1,269
(1) Excludes guaranteed portion of SBA loans totaling $ 3.2 million and $ 5.2 million for the three and six months ended June 30, 2025, respectively. In comparison, no guaranteed portion of SBA loans was excluded for the three and six months ended June 30, 2024.
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The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty for the periods presented:
Financial Effect
Modification & Loan Types Description of Financial Effect Three Months Ended June 30, 2025 Six Months Ended June 30, 2025
Payment Delay:
CRE Deferment of payment by a weighted average of: 0.3 years 0.3 years
SBA—real estate Deferment of payment by a weighted average of: 0.3 years 0.3 years
Interest Only:
CRE Interest only Payment by a weighted average of: N/A 0.5 years
Financial Effect
Modification & Loan Types Description of Financial Effect Three Months Ended June 30, 2024 Six Months Ended June 30, 2024
Payment Delay:
SBA—real estate Deferment of payment by a weighted average of: 0.5 years 0.5 years
C&I Deferment of payment by a weighted average of: 0.5 years 0.5 years
Term Extension:
SBA—non-real estate Extended term by a weighted average of: 1.8 years 1.8 years
A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. There were no loans that received modifications within the past 12 months as of June 30, 2025 and 2024, and subsequently defaulted in three and six months ended June 30, 2025, and 2024.
The Company had no additional commitments to lend to borrowers whose loans were modified as of both June 30, 2025 and December 31, 2024.
The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that were modified in the twelve months ended June 30, 2025 and 2024:
Payment Performance as of June 30, 2025
($ in thousands) Current 30 - 89 Days
Past Due 90+ Days
Past Due Total
CRE
$ 1,733 $ 1,580 $ — $ 3,313
SBA—real estate (1)
5,236 — 1,960 7,196
Total $ 6,969 $ 1,580 $ 1,960 $ 10,509
Payment Performance as of June 30, 2024
($ in thousands) Current 30 - 89 Days
Past Due 90+ Days
Past Due Total
CRE $ 622 $ — $ — $ 622
SBA—real estate (1)
1,390 1,054 740 3,184
SBA—non-real estate 130 — — 130
C&I 221 — — 221
Total $ 2,363 $ 1,054 $ 740 $ 4,157
(1) Excludes guaranteed portion of SBA loans totaling $ 7.4 million and $ 3.1 million as June 30, 2025 and 2024, respectively.
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Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For consumer loans, a credit grade is established at inception, and generally only adjusted based on performance. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
Special Mention — Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.
Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans.
The following table presents the loan portfolio's amortized cost and current year-to-date gross write-offs by loan type, risk rating and year of origination as of June 30, 2025 and December 31, 2024:
June 30, 2025
Term Loans by Origination Year Revolving Loans Revolving Loans Converted to Term Loans Total
($ in thousands) 2025 2024 2023
2022 2021 Prior
CRE
Pass $ 143,565 $ 263,979 $ 93,795 $ 229,321 $ 170,858 $ 101,659 $ 9,119 $ — $ 1,012,296
Special mention — — — 574 2,212 — — — 2,786
Substandard — — 1,580 4,546 — 223 — — 6,349
Doubtful — — — — — — — — —
Subtotal $ 143,565 $ 263,979 $ 95,375 $ 234,441 $ 173,070 $ 101,882 $ 9,119 $ — $ 1,021,431
Year-to-date charge-offs $ — $ — $ — $ — $ — $ 129 $ — $ — $ 129
SBA— real estate
Pass $ 27,545 $ 29,182 $ 24,926 $ 35,560 $ 15,268 $ 80,732 $ — $ — $ 213,213
Special mention — — — 6,579 1,337 1,260 — — 9,176
Substandard — — 1,186 9,965 289 7,622 — — 19,062
Doubtful — — — — — — — — —
Subtotal $ 27,545 $ 29,182 $ 26,112 $ 52,104 $ 16,894 $ 89,614 $ — $ — $ 241,451
Year-to-date charge-offs $ — $ — $ — $ — $ — $ 413 $ — $ — $ 413
SBA—non-real estate
Pass $ 3,175 $ 8,638 $ 3,978 $ 1,657 $ 89 $ 2,958 $ — $ — $ 20,495
Special mention — — — — — — — — —
Substandard — — — 440 — 940 — — 1,380
Doubtful — — — — — 98 — — 98
Subtotal $ 3,175 $ 8,638 $ 3,978 $ 2,097 $ 89 $ 3,996 $ — $ — $ 21,973
Year-to-date charge-offs $ — $ — $ 3 $ — $ — $ 7 $ — $ — $ 10
C&I
Pass $ 2,797 $ 20,625 $ 10,712 $ 13,349 $ 13,856 $ 2,295 $ 127,582 $ 1,568 $ 192,784
Special mention — — — — — — 434 — 434
Substandard — — — — — — 141 — 141
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Doubtful — — — — — — — — —
Subtotal $ 2,797 $ 20,625 $ 10,712 $ 13,349 $ 13,856 $ 2,295 $ 128,157 $ 1,568 $ 193,359
Year-to-date charge-offs $ — $ — $ 29 $ — $ — $ — $ — $ — $ 29
Home mortgage
Pass $ 128,214 $ 37,489 $ 56,018 $ 257,609 $ 68,925 $ 43,583 $ — $ — $ 591,838
Special mention — — — — — — — — —
Substandard — — — 1,418 — — — — 1,418
Doubtful — — — — — — — — —
Subtotal $ 128,214 $ 37,489 $ 56,018 $ 259,027 $ 68,925 $ 43,583 $ — $ — $ 593,256
Year-to-date charge-offs $ — $ — $ — $ 77 $ — $ 14 $ — $ — $ 91
Consumer and other
Pass $ 25 $ — $ — $ — $ — $ — $ 85 $ — $ 110
Special mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Subtotal $ 25 $ — $ — $ — $ — $ — $ 85 $ — $ 110
Year-to-date charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Total loans
Pass $ 305,321 $ 359,913 $ 189,429 $ 537,496 $ 268,996 $ 231,227 $ 136,786 $ 1,568 $ 2,030,736
Special mention — — — 7,153 3,549 1,260 434 — 12,396
Substandard — — 2,766 16,369 289 8,785 141 — 28,350
Doubtful — — — — — 98 — — 98
Subtotal $ 305,321 $ 359,913 $ 192,195 $ 561,018 $ 272,834 $ 241,370 $ 137,361 $ 1,568 $ 2,071,580
Year-to-date charge-offs $ — $ — $ 32 $ 77 $ — $ 563 $ — $ — $ 672
December 31, 2024
Term Loans by Origination Year Revolving Loans Revolving Loans Converted to Term Loans Total
($ in thousands) 2024 2023
2022 2021 2020 Prior
CRE
Pass $ 201,141 $ 85,056 $ 190,968 $ 137,425 $ 88,993 $ 250,291 $ 17,012 $ — $ 970,886
Special mention — — 579 2,246 — — — — 2,825
Substandard — 1,580 319 — — 4,637 — — 6,536
Doubtful — — — — — — — — —
Subtotal $ 201,141 $ 86,636 $ 191,866 $ 139,671 $ 88,993 $ 254,928 $ 17,012 $ — $ 980,247
Year-to-date charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
SBA— real estate
Pass $ 31,441 $ 26,508 $ 41,375 $ 18,819 $ 16,166 $ 72,440 $ — $ — $ 206,749
Special mention — — 2,345 — — 739 — — 3,084
Substandard — 1,182 9,965 2,868 — 8,114 — — 22,129
Doubtful — — — — — — — — —
Subtotal $ 31,441 $ 27,690 $ 53,685 $ 21,687 $ 16,166 $ 81,293 $ — $ — $ 231,962
Year-to-date charge-offs $ — $ — $ — $ 66 $ — $ — $ — $ — $ 66
SBA—non-real estate
Pass $ 10,443 $ 4,498 $ 1,837 $ 154 $ 1,303 $ 2,621 $ — $ — $ 20,856
Special mention — — — — — — — — —
Substandard — — 483 — 157 154 — — 794
Doubtful — — — — — 98 — — 98
Subtotal $ 10,443 $ 4,498 $ 2,320 $ 154 $ 1,460 $ 2,873 $ — $ — $ 21,748
Year-to-date charge-offs $ — $ — $ — $ — $ — $ 27 $ — $ — $ 27
C&I
Pass $ 19,712 $ 11,525 $ 14,016 $ 18,122 $ 3,356 $ 2,664 $ 140,278 $ 3,024 $ 212,697
Special mention — — — — — — 400 — 400
Substandard — — — — — — — — —
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Doubtful — — — — — — — — —
Subtotal $ 19,712 $ 11,525 $ 14,016 $ 18,122 $ 3,356 $ 2,664 $ 140,678 $ 3,024 $ 213,097
Year-to-date charge-offs $ — $ 44 $ — $ — $ — $ — $ — $ — $ 44
Home mortgage
Pass $ 42,112 $ 63,000 $ 284,208 $ 70,326 $ 17,749 $ 32,129 $ — $ — $ 509,524
Special mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Subtotal $ 42,112 $ 63,000 $ 284,208 $ 70,326 $ 17,749 $ 32,129 $ — $ — $ 509,524
Year-to-date charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Consumer and other
Pass $ 27 $ — $ — $ — $ — $ — $ 247 $ — $ 274
Special mention — — — — — — — — —
Substandard — — — — — — — — —
Doubtful — — — — — — — — —
Subtotal $ 27 $ — $ — $ — $ — $ — $ 247 $ — $ 274
Year-to-date charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
Total loans
Pass $ 304,876 $ 190,587 $ 532,404 $ 244,846 $ 127,567 $ 360,145 $ 157,537 $ 3,024 $ 1,920,986
Special mention — — 2,924 2,246 — 739 400 — 6,309
Substandard — 2,762 10,767 2,868 157 12,905 — — 29,459
Doubtful — — — — — 98 — — 98
Subtotal $ 304,876 $ 193,349 $ 546,095 $ 249,960 $ 127,724 $ 373,887 $ 157,937 $ 3,024 $ 1,956,852
Year-to-date charge-offs $ — $ 44 $ — $ 66 $ — $ 27 $ — $ — $ 137
Note 4 — Premises and Equipment
The following table presents information regarding the premises and equipment as of June 30, 2025 and December 31, 2024:
($ in thousands) June 30, 2025 December 31, 2024
Leasehold improvements $ 10,666 $ 10,019
Furniture and fixtures 5,280 4,902
Equipment and others 4,950 3,831
Total premises and equipment 20,896 18,752
Accumulated depreciation ( 14,044 ) ( 13,303 )
Total premises and equipment, net $ 6,852 $ 5,449
Total depreciation expense included in occupancy and equipment expenses were $ 394 thousand and $ 332 thousand for the three months ended June 30, 2025 and 2024, respectively, and $ 741 thousand and $ 699 thousand for the six months ended June 30, 2025 and 2024, respectively.
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.
The Company periodically stratifies its servicing assets into groupings based on risk characteristics and evaluates each group for impairment based on the fair value. Based on the impairment test as of June 30, 2025 and December 31, 2024, there was no impairment.
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The following table presents the activity in the servicing assets for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands) 2025 2024 2025 2024
Beginning balance $ 10,848 $ 11,405 $ 10,834 $ 11,741
Additions from loans sold with servicing retained 570 746 1,251 1,298
Amortized to expense ( 846 ) ( 1,108 ) ( 1,513 ) ( 1,996 )
Ending balance $ 10,572 $ 11,043 $ 10,572 $ 11,043
The fair value of the servicing assets was $ 15.7 million as of June 30, 2025, which was determined using discount rates ranging from 4.76 % to 11.53 % 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 $ 16.8 million as of June 30, 2024, which was determined using discount rates ranging from 3.78 % to 11.25 % and prepayment speeds ranging from 12.70 % to 12.90 % depending on the stratification of the specific assets.
Note 6 — Borrowing Arrangements
As of June 30, 2025, the Company had FHLB advances totaling $ 50.0 million with a weighted average interest rate of 3.70 % and a weighted average remaining term of 2.4 years, compared to $ 95.0 million with a weighted average interest rate of 4.34 % and a weighted average remaining term of 0.2 years as of December 31, 2024. The Company had letters of credit from the FHLB in the amount of $ 135.0 million and $ 100.0 million to secure public deposits as of June 30, 2025 and December 31, 2024, respectively.
The Company had available borrowing capacity from the following institutions as of June 30, 2025:
($ in thousands) June 30, 2025
FHLB $ 443,207
Federal Reserve Bank 223,373
Pacific Coast Bankers Bank 50,000
Zions Bank 25,000
First Horizon Bank 25,000
Total $ 766,580
The Company has pledged approximately $ 1.55 billion and $ 1.41 billion of loans as collateral for these lines of credit as of June 30, 2025 and December 31, 2024, respectively.
Note 7 — Income Taxes
The Company’s income tax expense was $ 2.1 million for both the three months ended June 30, 2025 and 2024, and $ 4.2 million for both the six months ended June 30, 2025 and 2024. The effective income tax rate was 25.0 % and 28.2 % for the three months ended June 30, 2025 and 2024, respectively, 26.3 % and 28.1 % for the six months ended June 30, 2025 and 2024, respectively.
Note 8 — Commitments and Contingencies
Off-Balance-Sheet Credit Risk
In the normal course of business, the Company enters into commitments to extend credit such as loan commitments and standby letters of credits. These commitments expose the Company to varying degrees of credit and market risk and are subject to the same credit and market reviews as those instruments recorded on the Consolidated Balance Sheets. Loan commitments represent arrangements to lend funds or provide liquidity subject to specified contractual conditions. Standby letters of credit are conditional commitments issued by the Company to guarantee the
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performance of a customer to a third party. These commitments generally have fixed expiration dates or contain termination clauses in the event the customer’s credit quality deteriorates. Since many of the commitments are expected to expire without being drawn upon, the commitment amounts do not necessarily represent future funding requirements.
The Company applies the same credit underwriting criteria to extend loans and commitments to customers. Each customer’s credit worthiness is evaluated on a case-by-case basis. Collateral may be obtained based on management’s assessment of a customer’s credit. Collateral may include securities, accounts receivable, inventory, property, plant and equipment, and income producing commercial or other properties. The majority of these off-balance sheet commitments have a variable interest rate. Management does not anticipate any material losses as a result of these transactions.
The following table presents the distribution of undisbursed credit-related commitments as of June 30, 2025 and December 31, 2024:
($ in thousands) June 30, 2025 December 31, 2024
Loan commitments $ 324,423 $ 261,446
Standby letter of credit 23,174 21,059
Commercial letter of credit 96 49
Total undisbursed credit related commitments $ 347,693 $ 282,554
Investments in low-income housing partnership
The Company invests in certain affordable housing partnerships. The following table shows the investments and unfunded commitments of the Company's affordable housing partnerships as of June 30, 2025 and December 31, 2024:
($ in thousands) June 30, 2025 December 31, 2024
Investments in low-income housing partnerships (1)
$ 19,129 $ 15,191
Unfunded commitments to fund investments for low-income housing partnerships (1)
10,015 7,622
(1) These balances are reflected in other assets and other liabilities on the consolidated balance sheets. The Company expects to finish fulfilling these commitments during the year ending 2042.
Under the proportional amortization method, the Company amortizes the initial cost of the investment in proportion to the tax credit and other benefits received, and recognizes the amortization in income tax expense on the consolidated statements of income. The Company recognized amortization expense of $ 565 thousand and $ 518 thousand for the three months ended June 30, 2025 and 2024, respectively, and $ 1.1 million and $ 1.0 million for the six months ended June 30, 2025 and 2024, respectively. In addition, the Company recognized tax credits and other benefits of $ 578 thousand and $ 656 thousand for the three months ended June 30, 2025 and 2024, respectively, and $ 1.3 million for both the six months ended June 30, 2025 and 2024.
Legal Proceedings
From time to time the Company or the Bank are parties to legal proceedings in the ordinary course of business. In accordance with ASC 450, Contingencies, the Company accrues reserves for outstanding lawsuits, claims and proceedings when a loss is probable and its amount can be reasonably estimated with specificity or within a given range. Management estimates the likelihood and the amount of a possible loss using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. No accrual has been recorded; however, the Company acknowledges that actual exposure and ultimate losses may differ from current expectations. While it is impossible to ascertain the ultimate resolution or range of financial liability, based on information known to management as of June 30, 2025 , management does not believe there are any pending legal proceedings to which the Company or the Bank is a party that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company’s financial condition or results of operations.
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Note 9 — Stock-Based Compensation Plan
As of June 30, 2025, the Company maintains one stock-based compensation plan, the OP Bancorp 2021 Equity Incentive Plan ("2021 Plan"). The Board of Directors approved the 2021 Plan, an equity incentive plan for granting stock options and restricted stock awards to key employees, officers, and non-employee directors of the Company. An aggregate of 1,500,000 shares of the Company’s common stock were authorized under the 2021 Plan. The exercise prices of stock options granted under the 2021 Plan may not be less than 100.00 % of the fair value of the Company’s stock at the date of grant. There are no stock options granted under the 2021 Plan as of June 30, 2025 and December 31, 2024.
Restricted stock awards issued under the 2021 Plan may or may not be subject to vesting provisions. Holders of the restricted stock awards have full voting rights and receive dividends during the vesting period. Stock compensation cost for the restricted stock awards are recognized based on the grant-date fair value over the vesting period.
The following table presents a summary of the activity in the Company’s non-vested restricted stock awards under the 2021 Plan for the six months ended June 30, 2025:
($ in thousands, except share data) Shares
Issued
Weighted
Average
Grant Date
Fair Value Aggregate
Intrinsic
Value
Non-vested, as of January 1, 2025 250,088 $ 11.78 $ 3,954
Awards granted 64,589 12.78
Awards vested ( 188,539 ) 11.91
Awards forfeited ( 19,960 ) 11.34
Non-vested, as of June 30, 2026 106,178 $ 12.20 $ 1,379
The following table presents compensation cost and the related tax benefit for the restricted stock awards under the 2021 Plan for the periods indicated follows:
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands) 2025 2024 2025 2024
Stock compensation cost $ 153 $ 317 $ 313 $ 636
Tax benefit (provision) realized from awards vested 32 — 62 ( 3 )
There were 1,090,963 shares available for future grants of either stock options or restricted stock awards under the 2021 Plan as of June 30, 2025. The Company had approximately $ 1.3 million of unrecognized compensation cost related to unvested restricted stock awards under the 2021 Plan as of June 30, 2025. The Company expects to recognize these costs over a weighted average period of 3.3 years.
Note 10 — Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability on the measurement date and is determined using an exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Assets and liabilities recorded at fair value on a recurring basis, such as AFS securities, equity investments and derivatives. Additionally, from time to time, the Company records fair value adjustments on a nonrecurring basis. These nonrecurring adjustments typically involve application of lower of cost or fair value accounting and write-downs of individual assets.
The Company classifies its assets and liabilities recorded at fair value as one of the following three categories and a financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement:
Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
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Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3—Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy.
AFS Debt Securities — The fair values of investment securities are determined by matrix pricing, which is a mathematical technique used to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2). Management obtains the fair values of investment securities on a monthly basis from a third-party pricing service.
Equity Investments — The Company has an equity investment with readily determinable fair value. The fair value is obtained from unadjusted quoted prices in active markets on the date of measurement and classified as Level 1.
Derivatives — The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).
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Assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 are summarized below:
Fair Value Measure on a Recurring Basis
($ in thousands) Total
Fair Value Quoted
Prices in
Active Markets
(Level 1) Significant Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
June 30, 2025
AFS debt securities:
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 34,806 $ — $ 34,806 $ —
Residential collateralized mortgage obligations 134,873 — 134,873 —
Municipal securities - tax exempt 5,321 — 5,321 —
Other investments:
Mutual fund - CRA qualified 3,651 3,651 — —
Derivative assets:
Interest rate products 6 — 6 —
Derivative liabilities:
Interest rate products 945 — 945 —
December 31, 2024
AFS debt securities:
U.S. Government agencies or sponsored agency securities:
Residential mortgage-backed securities $ 37,076 $ — $ 37,076 $ —
Residential collateralized mortgage obligations 143,041 — 143,041 —
Municipal securities - tax exempt 5,792 — 5,792 —
Other investments:
Mutual fund - CRA qualified 3,532 3,532 — —
Derivative assets:
Interest rate products 368 — 368 —
Derivative liabilities:
Interest rate products 579 — 579 —
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or fair value and write-downs of individual assets.
Collateral-dependent loans — Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. Fair value for collateral-dependent loans are measured based on the value of the collateral securing these loans and are classified as Level 3. Collateral may include real estate, or business assets including equipment, inventory and accounts receivable. The fair value of real estate collateral is determined based on third-party appraisals. The fair value of business equipment is based on third-party appraisals if significant, or the equipment’s net book value on the business’ financial statements. The fair value of inventory and accounts receivable collateral are determined based on independent field examiner review or aging reports. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying
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such loans. Appraised values are reviewed by management using historical knowledge, market considerations, and knowledge of the client and client’s business.
Other real estate owned — Fair value of OREO is determined primarily based on third-party appraisals, less costs to sell and therefore, is classified as Level 3. Appraisals are required annually and may be updated more frequently when circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.
The following table presents the fair value hierarchy and fair value of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of June 30, 2025 and December 31, 2024:
Fair Value Measure on a Nonrecurring Basis
($ in thousands) Total
Fair Value Quoted
Prices in
Active Markets
(Level 1) Significant Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
June 30, 2025
Collateral-dependent loans:
SBA—real estate 1,437 — — 1,437
Total $ 1,437 $ — $ — $ 1,437
December 31, 2024
Collateral-dependent loans:
CRE $ 173 $ — $ — $ 173
SBA—real estate 952 — — 952
OREO 1,237 — — 1,237
Total $ 2,362 $ — $ — $ 2,362
Total
The following table presents the increase (decrease) in the fair value of certain assets held at the end of the reporting periods presented for which a nonrecurring fair value adjustment was recognized during the respective periods:
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands) 2025 2024 2025 2024
Collateral-dependent loans:
SBA—real estate ( 160 ) — 113 —
Total $ ( 160 ) $ — $ 113 $ —
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The following table presents information about significant unobservable inputs utilized in the Company’s nonrecurring Level 3 fair value measurements as of June 30, 2025 and December 31, 2024:
($ in thousands) Fair Value
Measurements
(Level 3) Valuation
Techniques Unobservable
Inputs Range of
Inputs Weighted-
Average of
Inputs (1)
June 30, 2025
Collateral-dependent loans:
SBA—real estate 1,126 Income approach - income capitalization
Capitalization rate 5.5 % to 11.0 %
8.2 %
SBA—real estate 311 Sales comparison approach Market data comparison 0.0 % to 35.0 %
4.5 %
December 31, 2024
Collateral-dependent loans:
CRE $ 173 Income approach - income capitalization Capitalization rate 5.5 % to 7.3 %
6.0 %
SBA—real estate 539 Income approach - income capitalization Capitalization rate 5.5 % to 7.3 %
10.4 %
SBA—real estate 413 Sales comparison approach Market data / purchase price n/a n/a
OREO $ 1,237 Sales comparison approach Market data comparison ( 3.7 )% to 2.2 %
( 0.5 )%
(1) Weighted-average of inputs is based on the relative fair value of the respective assets as of June 30, 2025 and December 31, 2024.
Financial Instruments
The carrying amounts and estimated fair values of financial instruments that are not carried at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 are as follows. These financial assets and liabilities are measured at amortized cost basis on the Company’s Consolidated Balance Sheets:
June 30, 2025
($ in thousands) Carrying
Amount Level 1 Level 2 Level 3 Fair Value
Financial assets:
Cash and cash equivalents $ 205,388 $ 205,388 $ — $ — $ 205,388
Loans held for sale 20,016 — 21,541 — 21,541
Net loans 2,045,294 — — 2,122,054 2,122,054
Accrued interest receivable, net 9,991 527 854 8,610 9,991
Other investments:
FHLB and PCBB stock 13,345 N/A N/A N/A N/A
Time deposits placed 105 — 105 — 105
Financial liabilities:
Deposits 2,254,728 — 2,255,465 — 2,255,465
FHLB advances 50,000 — 50,281 — 50,281
Accrued interest payable 15,720 — 15,720 — 15,720
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December 31, 2024
($ in thousands) Carrying
Amount Level 1 Level 2 Level 3 Fair Value
Financial assets:
Cash and cash equivalents $ 134,943 $ 134,943 $ — $ — $ 134,943
Loans held for sale 4,581 — 4,946 — 4,946
Net loans 1,932,056 — — 1,986,813 1,986,813
Accrued interest receivable, net 9,188 181 888 8,119 9,188
Other investments:
FHLB and PCBB stock 12,805 N/A N/A N/A N/A
Time deposits placed 100 — 100 — 100
Financial liabilities:
Deposits 2,027,285 — 2,026,092 — 2,026,092
FHLB advances 95,000 — 94,986 — 94,986
Accrued interest payable 16,067 — 16,067 — 16,067
Note 11 — Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Company is exposed to various risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Beginning in 2024, the Company began utilizing derivatives to hedge the variability of cash flows associated with its existing variable-rate debt.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of June 30, 2025, the Company expects to reclassify an estimated $ 284 thousand of pre-tax of deferred net losses related to cash flow hedges from AOCI into earnings during the next 12 months.
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The following table presents the notional amounts, fair values and classification on consolidated balance sheets of the Company's derivatives as of June 30, 2025 and December 31, 2024:
Derivative Assets Derivative Liabilities
($ in thousands) Notional Amount Balance Sheet Location Fair Value Notional Amount Balance Sheet Location Fair Value
June 30, 2025
Derivatives designated as hedging instruments:
Interest rate products $ 25,000 Other assets $ 6 $ 50,000 Other liabilities $ 945
Total derivatives designated as hedging instruments $ 6 $ 945
December 31, 2024
Derivatives designated as hedging instruments:
Interest rate products $ 25,000 Other assets $ 368 $ 50,000 Other liabilities $ 579
Total derivatives designated as hedging instruments $ 368 $ 579
The following table presents the pre-tax changes in AOCI from cash flow hedges for the three and six months ended June 30, 2025 and 2024:
Derivatives in Subtopic 815-20 Hedging Relationships
($ in thousands)
Amount of Gain (Loss) Recognized in AOCI on Derivative Amount of Gain (Loss) Recognized in AOCI Included Component Amount of Gain (Loss) Recognized in AOCI Excluded Component Location of Gain (Loss) Recognized from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Included Component Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
Three Months Ended June 30, 2025
Derivatives in cash flow hedging relationships:
Interest rate products $ ( 150 ) $ ( 150 ) $ — Interest expense $ 29 $ 29 $ —
Total $ ( 150 ) $ ( 150 ) $ — $ 29 $ 29 $ —
Three Months Ended June 30, 2024
Derivatives in cash flow hedging relationships:
Interest rate products $ ( 254 ) $ ( 254 ) $ — Interest expense $ 81 $ 81 $ —
Total $ ( 254 ) $ ( 254 ) $ — $ 81 $ 81 $ —
Six Months Ended June 30, 2025
Derivatives in cash flow hedging relationships:
Interest rate products $ ( 632 ) $ ( 632 ) $ — Interest expense $ 60 $ 60 $ —
Total $ ( 632 ) $ ( 632 ) $ — $ 60 $ 60 $ —
Six Months Ended June 30, 2024
Derivatives in cash flow hedging relationships:
Interest rate products $ ( 254 ) $ ( 254 ) $ — Interest expense $ 81 $ 81 $ —
Total $ ( 254 ) $ ( 254 ) $ — $ 81 $ 81 $ —
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The following table presents the pre-tax changes of the Company’s derivative financial instruments on the consolidated statement of income for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
($ in thousands) Interest Expense Interest Expense Interest Expense Interest Expense
Total amounts presented in the consolidated statement of income $ 29 $ 81 $ 60 $ 81
The effects of cash flow hedging:
Gain (loss) on cash flow hedging relationships
Interest contracts
Amount of loss reclassified from AOCI into income $ 29 $ 81 $ 60 $ 81
Amount of gain (loss) reclassified from AOCI into income as a result that a forecasted transaction was no longer probable of occurring — — — —
Amount of loss reclassified from AOCI into income - included component 29 81 60 81
Amount of gain (loss) reclassified from AOCI into income - excluded component — — — —
The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of June 30, 2025 and December 31, 2024. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet:
Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet
($ in thousands) Financial Instruments Cash Collateral Received Net Amount
June 30, 2025
Derivatives assets $ 6 $ — $ 6 $ — $ 6 $ —
Total $ 6 $ — $ 6 $ — $ 6 $ —
December 31, 2024
Derivatives assets $ 368 $ — $ 368 $ — $ 368 $ —
Total $ 368 $ — $ 368 $ — $ 368 $ —
Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet
($ in thousands) Financial Instruments Cash Collateral Posted Net Amount
June 30, 2025
Derivatives liabilities $ 945 $ — $ 945 $ — $ 945 $ —
Total $ 945 $ — $ 945 $ — $ 945 $ —
December 31, 2024
Derivatives liabilities $ 579 $ — $ 579 $ — $ 579 $ —
Total $ 579 $ — $ 579 $ — $ 579 $ —
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Note 12 — Regulatory Capital Matters
The Bank is subject to certain risk-based capital and leverage ratio requirements under the U.S. Basel III capital rules administered by the federal and state banking agencies. Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on the Company's operations or financial condition. The Basel III capital rules also require the Bank to maintain a capital conservation buffer of 2.50 % above the minimum risk-based capital ratios in order to absorb losses during periods of economic stress. Banking institutions with a ratio of common equity tier 1 capital to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. As of both June 30, 2025 and December 31, 2024, the Bank met all applicable capital adequacy requirements.
The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:
June 30, 2025
Actual (1)
Required for
Capital Adequacy
Purposes Minimum
To be Considered
"Well Capitalized"
($ in thousands) Amount Ratio Amount Ratio Amount Ratio
Total capital (to risk-weighted assets)
Consolidated $ 252,936 12.26 % N/A N/A N/A N/A
Bank 250,705 12.15 $ 165,139 8.00 % $ 206,424 10.00 %
Tier 1 capital (to risk-weighted assets)
Consolidated 227,148 11.01 N/A N/A N/A N/A
Bank 224,902 10.90 123,855 6.00 165,139 8.00
Common equity Tier 1 capital (to risk-weighted
assets)
Consolidated 227,148 11.01 N/A N/A N/A N/A
Bank 224,902 10.90 92,891 4.50 134,176 6.50
Tier 1 capital (to average assets)
Consolidated 227,148 8.96 N/A N/A N/A N/A
Bank 224,902 8.87 101,435 4.00 126,793 5.00
(1) The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
December 31, 2024
Actual (1)
Required for
Capital Adequacy
Purposes Minimum
To be Considered
"Well Capitalized"
($ in thousands) Amount Ratio Amount Ratio Amount Ratio
Total capital (to risk-weighted assets)
Consolidated $ 244,659 12.60 % N/A N/A N/A N/A
Bank 242,966 12.50 $ 155,463 8.00 % $ 194,328 10.00 %
Tier 1 capital (to risk-weighted assets)
Consolidated 220,390 11.35 N/A N/A N/A N/A
Bank 218,675 11.25 116,597 6.00 155,463 8.00
Common equity Tier 1 capital (to risk-weighted
assets)
Consolidated 220,390 11.35 N/A N/A N/A N/A
Bank 218,675 11.25 87,448 4.50 126,313 6.50
Tier 1 capital (to average assets)
Consolidated 220,390 9.27 N/A N/A N/A N/A
Bank 218,675 9.20 95,055 4.00 118,819 5.00
(1) The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
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Note 13 — Earnings Per Share
Basic EPS is calculated using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. The Company grants restricted stock awards, which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends paid to holders of the Company's common stock. These restricted stock awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities in computing basic EPS. Participating securities are not included as incremental shares in computing diluted EPS.
Diluted EPS incorporates the potential impact of contingently issuable shares. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. For each of the periods presented in the table below, diluted EPS calculated under two-class method was more dilutive.
The following table presents the calculation of net income applicable to common stockholders and basic and diluted EPS for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands, except share and per share data) 2025 2024 2025 2024
Basic
Net income $ 6,333 $ 5,436 $ 11,893 $ 10,662
Distributed and undistributed earnings allocated to participating securities ( 53 ) ( 103 ) ( 127 ) ( 201 )
Net income allocated to common shares $ 6,280 $ 5,333 $ 11,766 $ 10,461
Weighted average common shares outstanding 14,859,718 14,868,344 14,858,483 14,930,090
Basic earnings per common share $ 0.42 $ 0.36 $ 0.79 $ 0.70
Diluted
Net income allocated to common shares $ 6,280 $ 5,333 $ 11,766 $ 10,461
Weighted average common shares outstanding for basic earnings per common share
14,859,718 14,868,344 14,858,483 14,930,090
Add: Dilutive effects of assumed exercises of stock options (1)
— — — —
Average shares and dilutive potential common shares 14,859,718 14,868,344 14,858,483 14,930,090
Diluted earnings per common share $ 0.42 $ 0.36 $ 0.79 $ 0.70
(1) No share of common stock was antidilutive for the three and six months ended June 30, 2025 and 2024.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.