Financial Performance - Net income for the three months ended March 31, 2022, was $8.2 million, an increase of $3.1 million or 60.6% from $5.1 million in the same period of 2021[109] - Net interest income increased to $17.3 million, a rise of $4.5 million or 35.6% from $12.8 million, primarily due to higher interest income on loans[109] - Noninterest income for the three months ended March 31, 2022, was $4.2 million, an increase of $1.3 million, or 42.1%, compared to $3.0 million for the same period in 2021[128] - The total gain on sale of loans was $3.2 million for the three months ended March 31, 2022, compared to $1.9 million for the same period in 2021, an increase of 72.1%[129] - Noninterest expense for the three months ended March 31, 2022, was $9.7 million, an increase of $1.7 million, or 21.3%, compared to $8.0 million for the same period in 2021[130] Asset and Loan Growth - Total assets reached $1.86 billion, an increase of $408.6 million or 7.9% from $1.46 billion[109] - Gross loans amounted to $1.43 billion, up $272.5 million or 23.6% from $1.16 billion, driven by Hana loan purchases and home mortgage loan purchases[109] - Total deposits increased to $1.67 billion, a growth of $386.6 million or 30.1% from $1.29 billion, mainly due to an increase in noninterest-bearing deposits[109] - The home mortgage loan portfolio grew by $93.2 million, or 53.8%, totaling $266.5 million as of March 31, 2022, primarily due to an $81.6 million purchase from third-party mortgage originators[152] - The commercial real estate loan portfolio reached $730.8 million as of March 31, 2022, an increase of $29.4 million from $701.5 million as of December 31, 2021[148] Capital and Equity - Shareholders' equity rose to $166 million, an increase of $19 million or 12.9% from $147 million[109] - The company reported total capital to risk-weighted assets at 13.29%, exceeding the minimum requirement to be considered "well-capitalized"[184] - The Tier 1 capital ratio was 12.11% as of March 31, 2022, compared to 13.66% as of December 31, 2021, indicating a slight decrease in capital adequacy[186] Loan Losses and Allowances - The allowance for loan losses to gross loans receivable was 1.17%, a slight decrease from 1.23% as of December 31, 2021[110] - Provision for loan losses decreased to $341 thousand for the three months ended March 31, 2022, down $279 thousand, or 45.0%, from $620 thousand for the same period in 2021[125] - The allowance for loan losses increased from $16.123 million as of December 31, 2021, to $16.672 million as of March 31, 2022[145] - The total allowance for loan losses to nonperforming loans ratio was 594% as of March 31, 2022, compared to 504% at December 31, 2021[170] Liquidity and Deposits - Total liquid assets as of March 31, 2022, were $291,158,000, up from $265,903,000 as of December 31, 2021, indicating improved liquidity[179] - The loans-to-deposit ratio was 84.4% as of March 31, 2022, slightly down from 84.6% at the end of 2021, with net loans totaling $1,411,738,000[176] - Noninterest-bearing demand deposits accounted for 50.7% of total deposits as of March 31, 2022, up from 50.5% at December 31, 2021[172] Interest Rate Risk Management - Interest rate risk is identified as the primary source of market risk for the company, arising from changes in market interest rates affecting earnings and asset values[187] - The company continuously monitors its liquidity position to meet both short-term and long-term cash flow requirements, ensuring a balance between assets and liabilities[175] - The company's asset liability committee (ALM) establishes broad policy limits for interest rate risk, while the management's asset liability committee (ALCO) sets specific operating guidelines[189] - The net interest income simulation model evaluates potential changes in net interest income under various hypothetical interest rate scenarios[193] - An asset sensitive position indicates that an increase in short-term interest rates is expected to generate higher net interest income[191]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________ FORM 10-K ________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-38437 OP BANCORP (Exact Name of Registrant as Specified in its Charter) (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _______________________________ FORM 10-Q _______________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Securities registered pursuant to Section 12(b) of the Act: | | Trading | | | --- | --- | --- | | Title of each class | Sym ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 California 81-3114676 (State or other jurisdiction of incorporation or organization) 1000 Wilshire Blvd., Suite 500, Los Angeles, CA 90017 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) Registrant's telephone number, including area code: (213) ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) For the transition period from __________ to __________ Commission File Number: 001-38437 OP BANCORP (Exact Name of Registrant as Specified in its Charter) California 81-3114676 (State or other jurisdiction of incorporation or organization) 1000 Wilshire Blvd., Suite 500, Los Angeles, CA 90017 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) ☒ QUARTERLY REPORT PURSUANT TO SECTIO ...

Loan Portfolio - As of December 31, 2020, the total loan portfolio amounted to $1,099.7 million, with commercial real estate loans constituting 59.2% at $651.7 million[33] - The small business administration (SBA) loans totaled $211.4 million, representing 19.2% of total loans, while home mortgage loans were $128.2 million, accounting for 11.7%[33] - The aggregate amount of loans to the 10 largest borrowers was approximately $161.3 million, or 14.7% of total loans, and to the 25 largest borrowers was $271.6 million, or 24.7%[35] - The commercial real estate loan portfolio had no non-performing loans as of December 31, 2020, with 65% of these loans being fixed-rate[46] - The SBA loan portfolio, including PPP loans, totaled $211.4 million, with $64.9 million classified as PPP loans[54] - Non-performing SBA loans amounted to $56,000 as of December 31, 2020[54] - The total commercial and industrial loan portfolio was $107.3 million, with non-performing loans at $330,000[59] - The company originated 978 loans with an aggregate balance of $66.3 million under the CARES Act and PPP/HCEA Act[53] - The total single-family residential real estate loan portfolio amounted to $128.2 million as of December 31, 2020[65] - Non-performing single-family residential real estate loans were $599,000 as of December 31, 2020[65] - The total consumer loan portfolio reached $1.2 million as of December 31, 2020, with no non-performing consumer loans reported[67] Risk Management - The company has implemented sound risk management practices to monitor concentrations in commercial real estate within its loan portfolio[34] - The Bank's commercial real estate concentration is a regulatory concern, with specific numerical indicators guiding risk management practices[151] - The company identified interest rate risk as its primary source of market risk, arising from timing differences in repricings and maturities of interest-earning assets and interest-bearing liabilities[503] - The company’s asset liability committee monitors interest rate risk sensitivity on a quarterly basis to ensure compliance with approved risk limits[505] - The company utilizes a net interest income simulation model to evaluate potential changes in net interest income under various hypothetical interest rate scenarios[509] Capital Adequacy - The Bank must maintain a Tier 1 leverage ratio of at least 4.0% and a common equity Tier 1 (CET1) to risk-weighted assets of 4.5%[101] - As of December 31, 2020, the Bank's capital ratios exceeded the minimum capital adequacy guideline percentage requirements for "well capitalized" institutions under the Basel III Capital Rules[107] - The capital conservation buffer requirement is at its fully phased-in level of 2.5% as of January 1, 2019[104] - The Bank was required to maintain a CET1 capital ratio of at least 6.375% to avoid limitations on capital distributions during 2020[105] - The Bank's total capital ratio must be at least 8.0% to meet regulatory requirements[101] - The Company is subject to regulation and supervision by the Federal Reserve under the Bank Holding Company Act of 1956[112] - The Company must maintain capital in accordance with Federal Reserve capital adequacy requirements, as affected by the Dodd-Frank Act and Basel III[121] - The Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December 31, 2020[139] Regulatory Compliance - Federal law prohibits any person or company from acquiring control of an FDIC-insured depository institution without prior notice to the appropriate federal bank regulator[116] - The Federal Reserve requires bank holding companies to be well-capitalized and well-managed to complete interstate mergers or acquisitions[115] - The Company decided to opt out of the new community banking leverage framework intended to simplify regulatory capital requirements[110] - The Dodd-Frank Act increased the minimum designated reserve ratio of the DIF to 1.35% of the estimated amount of total insured deposits as of September 30, 2020[135] - The Company has not elected to be a financial holding company and has not engaged in nonbanking activities determined by the Federal Reserve to be financial in nature[119] - The Federal Reserve has the authority to regulate the debt of bank holding companies, including imposing interest rate ceilings and reserve requirements[124] - The Dodd-Frank Act requires lenders to retain an economic interest in the credit risk relating to loans that do not comply with ability-to-repay standards, generally set at 5%[159] - The CFPB's final rules amending the ability-to-repay/qualified mortgage requirements are scheduled for mandatory compliance by July 1, 2021[160] - The Bank is subject to federal laws aimed at countering money laundering and terrorist financing, including the USA PATRIOT Act and the Bank Secrecy Act[148] - The Bank's policies and procedures are believed to comply with anti-money laundering and Office of Foreign Assets Control regulations[150] - The Dodd-Frank Act has created a more intense environment for consumer finance regulation, potentially increasing compliance costs[156] Operational Performance - The bank is the seventh-largest among eight banks in the Korean-American direct banking market in Southern California based on total assets as of December 31, 2020[77] - The bank aims to grow both organically and through potential acquisitions in overlapping markets with Chinese-American banks[78] - The bank has made significant investments in information technology systems to enhance capabilities and support future growth[84] - As of December 31, 2020, the bank employed approximately 173 full-time equivalent employees, with a gender distribution of 30% male and 70% female[91] - The executive team consists of four females and two males, with key executives having been with the company since 2010[91] - The bank has not experienced interruptions of operations due to labor disagreements, indicating a good relationship with employees[91] - There are currently no claims or legal proceedings filed against the bank[92] Insurance and Assessments - The Bank's deposit accounts are insured by the FDIC's Deposit Insurance Fund to the maximum extent provided under federal law[130] - As of December 31, 2020, the Bank paid $256,000 in aggregate FDIC deposit insurance premiums[135] - The Bank paid supervisory assessments to the DFPI totaling $112,000 during the year ended December 31, 2020[136] - The Company is permitted to pay dividends from retained earnings or net income, subject to certain conditions and regulatory approvals[138] Interest Rate Sensitivity - As of December 31, 2020, a 400 basis points increase in interest rates is projected to increase net interest income sensitivity by 30.27%[512] - The Federal Reserve's monetary policy significantly impacts the operating results of financial institutions, influencing loan growth and interest rates[172] - Future legislative and regulatory changes could affect the company's business and operations, as new laws may be introduced or existing ones amended[173] Cybersecurity and Data Protection - The company employs a layered cybersecurity approach to manage and maintain controls against cyber threats, although risks remain high due to evolving threats[171] - Federal and state regulators are increasingly active in implementing privacy and cybersecurity standards, with California leading in data protection laws[170] - The CFPB has announced intentions to enhance consumer control over financial data, aligning with California's CCPA and CPRA regulations[168] Community Reinvestment - The Bank had a Community Reinvestment Act (CRA) rating of "satisfactory" as of its most recent regulatory examination[146]

Financial Performance - Interest income for Q3 2020 was $13,016,000, a decrease of 13.9% from $15,112,000 in Q3 2019[115]. - Net income for Q3 2020 was $3,595,000, down 10.1% from $4,000,000 in Q3 2019[115]. - For the three months ended September 30, 2020, the company reported net income of $3.6 million, a decrease of 10.1% from $4.0 million in the same period of 2019[130]. - Noninterest income increased $289,000, or 10.6%, to $3.0 million for the three months ended September 30, 2020, compared to $2.7 million for the same period in 2019[148]. - Noninterest income decreased by $1.5 million, or 17.2%, to $7.4 million for the nine months ended September 30, 2020, primarily due to a decrease in other income and gains on loan sales[171]. Loan Loss Provisions - Provision for loan losses increased to $1,399,000 in Q3 2020, compared to $290,000 in Q3 2019, reflecting a significant rise in expected credit losses[115]. - The provision for loan losses increased by $1.1 million, contributing to the decline in net income[130]. - Provision for loan losses increased $1.1 million to $1.4 million for the three months ended September 30, 2020, compared to $290,000 for the same period in 2019[146]. - Provision for loan losses increased by $3.4 million, or 497.7%, to $4.1 million for the nine months ended September 30, 2020, reflecting adjustments for potential adverse impacts from the pandemic[170]. - The increase in qualitative factors accounted for $3.7 million, or 91%, of the provision for loan losses for the nine months ended September 30, 2020[208]. Asset Growth - Total assets as of September 30, 2020, reached $1,339,821,000, up from $1,179,520,000 as of December 31, 2019, indicating a growth of 13.6%[116]. - The company’s total assets increased to $1.29 billion as of September 30, 2020, compared to $1.13 billion in the previous year[134]. - Total assets increased to $1.24 billion as of September 30, 2020, compared to $1.09 billion in 2019[164]. - Total assets increased by $160.3 million, or 13.6%, to $1.34 billion at September 30, 2020, compared to $1.18 billion at December 31, 2019[178]. Loan Performance - Nonperforming loans decreased to $330,000 as of September 30, 2020, down from $1,548,000 as of December 31, 2019, showing improved credit quality[116]. - The allowance for loan losses (ALL) was $14,164,000 as of September 30, 2020, compared to $10,050,000 as of December 31, 2019, representing a 40.8% increase[116]. - The allowance for loan losses increased to $14.2 million at September 30, 2020, compared to $10.1 million at December 31, 2019[188]. - The allowance for loan losses was $14.2 million at September 30, 2020, representing 1.32% of gross loans, up from 1.02% at December 31, 2019[203]. - The commercial real estate loan portfolio totaled $640.3 million as of September 30, 2020, compared to $630.7 million at December 31, 2019[192]. Deposits and Borrowings - Total deposits increased by $149.5 million, or 14.6%, to $1.17 billion at September 30, 2020, compared to $1.02 billion at December 31, 2019[217]. - Noninterest-bearing deposits rose by $194.5 million, or 66.1%, to $488.8 million at September 30, 2020, accounting for 41.8% of total deposits[217]. - The company had $10.0 million in borrowings from the FHLB at September 30, 2020, with a maximum borrowing capacity of $398.4 million[220]. - Total interest-bearing deposits decreased to $663,871 thousand in Q3 2020, down from $701,502 thousand in Q3 2019, a decline of 5.4%[218]. Interest Rate Sensitivity - Interest rate risk is identified as the primary source of market risk, with management actively monitoring and managing this risk[237][238]. - In a hypothetical scenario of a 400 basis points increase in interest rates, net interest income sensitivity is projected to be 21.41% as of September 30, 2020[246]. - Economic Value of Equity sensitivity under a 400 basis points increase in interest rates shows a change of 10.85% as of September 30, 2020[246]. - The company utilizes a net interest income simulation model to evaluate potential changes in net interest income under various interest rate scenarios[243]. Noninterest Expenses - Noninterest expense decreased $437,000, or 5.2%, to $8.0 million for the three months ended September 30, 2020, compared to $8.4 million for the same period in 2019[151]. - Noninterest expense decreased by $1.3 million, or 5.3%, to $23.5 million for the nine months ended September 30, 2020, mainly due to reductions in salaries and employee benefits[173]. - Salaries and employee benefits expense decreased by $1.4 million, or 8.6%, to $14.5 million for the nine months ended September 30, 2020, primarily due to increased deferred loan origination costs[174]. Community Support - The company donated $1.0 million to support small restaurants and $100,000 to local non-profits during the pandemic[119]. - The company offered loan payment deferrals for 172 loan accounts totaling $229.9 million to assist clients affected by the pandemic[121].

Financial Performance - Interest income for Q2 2020 was $12.92 million, a decrease of 13.1% from $14.88 million in Q2 2019[110] - Net income for the first half of 2020 was $5.72 million, down 33.3% from $8.58 million in the same period of 2019[110] - Net income for the three months ended June 30, 2020, was $2.4 million, a decrease of 37.0% from $3.8 million for the same period in 2019[124] - Net interest income decreased by $529,000, or 4.7%, to $10.6 million for the three months ended June 30, 2020[139] - Net interest income decreased by $212,000, or 1.0%, to $21.8 million for the six months ended June 30, 2020, compared to $22.0 million for the same period in 2019[166] - Noninterest income decreased by $585,000, or 22.1%, to $2.1 million for the three months ended June 30, 2020, compared to $2.6 million in 2019[143] - Noninterest income for the six months ended June 30, 2020, was $4.4 million, a decrease of $1.8 million, or 29.5%, compared to $6.2 million for the same period in 2019[168] Loan Loss Provisions - Provision for loan losses increased significantly to $1.99 million in Q2 2020 from $0.40 million in Q2 2019, reflecting a proactive approach to potential credit losses[110] - The provision for loan losses increased by $1.6 million, contributing to the decline in net income[124] - Provision for loan losses increased to $2.0 million for the three months ended June 30, 2020, compared to $401,000 in the same period in 2019, reflecting a 397.5% increase[141] - Provision for loan losses increased by $2.3 million, or 581.0%, to $2.7 million for the six months ended June 30, 2020, compared to $401,000 for the same period in 2019[167] - The total provision for loan losses for the six months ended June 30, 2020 was $2.7 million, compared to $401,000 for the same period in 2019[204] Asset Quality - Nonperforming loans decreased to $1.02 million, down from $1.55 million at the end of 2019, showing improvement in credit quality[111] - Non-performing loans decreased to $1.0 million at June 30, 2020, down from $1.5 million at December 31, 2019[208] - Classified loans were $2.8 million at June 30, 2020, a decrease from $3.5 million at December 31, 2019[209] - Non-performing loans to gross loans ratio was 0.10% at June 30, 2020, compared to 0.16% at December 31, 2019[211] Capital and Assets - Total assets as of June 30, 2020, reached $1.29 billion, an increase of 9.2% from $1.18 billion at the end of 2019[111] - The allowance for loan losses (ALL) increased to $12.76 million as of June 30, 2020, compared to $10.05 million at the end of 2019, indicating a higher reserve for potential loan defaults[111] - The allowance for loan losses increased to $12.8 million at June 30, 2020, compared to $10.1 million at December 31, 2019[185] - Total assets increased to $1,217.3 million as of June 30, 2020, compared to $1,070.3 million as of June 30, 2019[158] Deposits and Borrowings - Total deposits increased to $1.12 billion as of June 30, 2020, up by $100 million or 9.8% from $1.02 billion at December 31, 2019[213] - Noninterest-bearing demand accounts constituted 38.2% of total deposits, while interest-bearing deposits without a stated maturity made up 26.7% and time deposits accounted for 35.1%[213] - The gross loan to deposit ratio was 93.1% as of June 30, 2020, down from 97.0% at December 31, 2019[218] - The company had $10 million in borrowings from the Federal Home Loan Bank (FHLB) at June 30, 2020, with a maximum borrowing capacity of $391.9 million[215] Community Support - The company donated $1.0 million to support small restaurants affected by the pandemic, demonstrating commitment to community support[113] Interest Rate Risk - Interest rate risk is identified as the primary source of market risk, with a focus on managing the impact of changing interest rates on net interest income[232] - The company’s net interest income sensitivity to a +400 basis points shift is projected at 16.35% as of June 30, 2020, compared to 18.23% as of December 31, 2019[240] - The Economic Value of Equity sensitivity at +400 basis points is 12.10% as of June 30, 2020, compared to (2.94)% as of December 31, 2019[240] - The asset liability committee monitors interest rate risk sensitivity quarterly to ensure compliance with established risk limits[234]

Financial Performance - For the three months ended March 31, 2020, net income was $3.3 million, a decrease of 30.5% compared to $4.7 million for the same period in 2019[108] - Net income for the three months ended March 31, 2020, was $3.3 million, a decrease of 30.4% from $4.7 million in the same period of 2019[122] - Noninterest income decreased by $1.2 million, or 35.0%, to $2.3 million for the three months ended March 31, 2020 compared to the same period in 2019[141] - The efficiency ratio for Q1 2020 was 61.19%, compared to 56.48% in Q1 2019, indicating increased operational costs relative to income[108] Loan Loss Provisions - The provision for loan losses increased to $743,000 in Q1 2020, compared to no provision in Q1 2019, reflecting a proactive approach to potential credit losses[108] - The provision for loan losses for the three months ended March 31, 2020 was $743,000, an increase from $0 in the same period in 2019, primarily due to the pandemic's impact on the economy and loan growth[139] - Qualitative factors accounted for $593,000, or 80%, of the provision for loan losses for the three months ended March 31, 2020[139] - The allowance for loan losses (ALL) was $10.75 million, representing 1.08% of gross loans, up from 1.02% as of December 31, 2019[109] - The allowance for loan losses increased to $10.7 million at March 31, 2020, representing 1.08% of gross loans, compared to $10.1 million, or 1.02% at December 31, 2019[175] - The allowance for loan losses increased to 701% of non-performing loans as of March 31, 2020, up from 503% as of March 31, 2019[188] Asset and Liability Management - Total assets as of March 31, 2020, were $1.21 billion, an increase of 2.5% from $1.18 billion as of December 31, 2019[109] - Cash and cash equivalents increased by $25.0 million, or 29.0%, contributing to total assets rising by $30.1 million, or 2.3%, to $1.21 billion at March 31, 2020[149] - Average loans increased by $110.1 million, or 12.4%, to $998.1 million for the three months ended March 31, 2020, compared to $888.0 million for the same period in 2019[131] - Total earning assets increased by $135.2 million, or 13.6%, to $1.13 billion for the three months ended March 31, 2020, from $995.8 million for the same period in 2019[131] - Average interest-bearing liabilities increased by $92.8 million, or 14.6%, to $729.0 million for the three months ended March 31, 2020, compared to $636.2 million for the same period in 2019[135] - The gross loan to deposit ratio was 94.7% at March 31, 2020, compared to 97.0% at December 31, 2019[195] Loan Portfolio - As of March 31, 2020, gross loans totaled $996.6 million, an increase of $6.4 million, or 0.6% from $990.1 million at December 31, 2019, driven by organic growth in commercial real estate and SBA loans[159] - The commercial real estate loan portfolio amounted to $639.4 million, representing 64% of total gross loans, compared to $630.7 million at December 31, 2019[163] - The SBA loan portfolio increased to $133.9 million, up $1.6 million, or 1.2% from $132.3 million at December 31, 2019, with $25.7 million of SBA loans originated in Q1 2020[166] - Commercial and industrial loans decreased to $99.9 million at March 31, 2020, down from $103.9 million at December 31, 2019[167] - Home mortgage loans totaled $120.0 million, a decrease of $0.7 million, or 0.6% from $120.7 million at December 31, 2019[168] Community Support and Donations - The company donated $1.1 million to support local communities affected by the COVID-19 pandemic[111] Capital Adequacy - The total risk-based capital ratio was 14.78% as of March 31, 2020, down from 15.18% at the end of 2019[109] - The bank's Tier 1 capital to risk-weighted assets ratio was 13.50% as of March 31, 2020, above the required minimum of 8.00%[201] - The consolidated CET1 capital to risk-weighted assets ratio was 13.69% as of March 31, 2020, exceeding the minimum requirement of 4.50%[201] - The bank's total capital to risk-weighted assets ratio was 14.96% as of December 31, 2019, indicating strong capital adequacy[202] Interest Rate Risk - Interest rate risk is identified as the primary source of market risk, impacting earnings and asset values[209] - The company utilizes a net interest income simulation model to evaluate potential changes in net interest income under various interest rate scenarios[215] - As of March 31, 2020, net interest income sensitivity to a +400 basis points shift is projected at 22.13%, compared to 18.23% as of December 31, 2019[218] - A downward shift of the yield curve by 100 basis points results in a net interest income decrease of (5.45)% as of March 31, 2020[218] Operational Commitments - Total contractual obligations as of March 31, 2020, amounted to $1,065,707,000, with $601,202,000 due within one year[203] - Commitments to extend credit increased to $68,917,000 as of March 31, 2020, compared to $66,153,000 as of December 31, 2019[208] - Operating lease commitments totaled $10,721,000 as of March 31, 2020, reflecting ongoing operational obligations[203] Internal Controls - The company has maintained effective disclosure controls and procedures as evaluated by the President and CEO and CFO[220] - There have been no changes in the company's internal control over financial reporting that materially affect its effectiveness during the fiscal quarter[221]

Loan Portfolio - As of December 31, 2019, the total loan portfolio amounted to $990.1 million, with commercial real estate loans constituting $630.7 million or 63.7% of total loans[34][35] - The Small Business Administration (SBA) loan portfolio totaled $132.3 million, representing 13.4% of total loans, with $122.4 million secured by real estate[54] - The commercial and industrial loan portfolio reached $103.9 million, accounting for 10.5% of total loans, with non-performing loans at $333,000[59] - The home mortgage loan portfolio was $120.7 million, making up 12.2% of total loans[35] - The aggregate amount of loans to the 10 largest borrowers was approximately $147.8 million, or 14.9% of total loans[37] - Approximately 61% of the commercial real estate loan portfolio consisted of fixed-rate loans[46] - The total commercial real estate loan portfolio was $630.7 million, with no non-performing loans as of December 31, 2019[48] - The total single-family residential real estate loan portfolio was $120.7 million as of December 31, 2019, with non-performing loans amounting to $698,000[65] - The consumer loan portfolio totaled $2.7 million as of December 31, 2019, with no non-performing consumer loans reported[68] Regulatory Compliance - The company is subject to extensive regulation under U.S. federal and state law, which impacts its growth and earnings performance[94] - The Bank must maintain a Tier 1 leverage ratio of at least 4.0% and a common equity Tier 1 (CET1) to risk-weighted assets ratio of 4.5%[100] - As of December 31, 2019, the Bank's capital ratios exceeded the minimum capital adequacy guideline percentage requirements for "well capitalized" institutions under the Basel III Capital Rules[106] - The capital conservation buffer requirement is being phased in, reaching 2.5% as of December 31, 2019, which is added on top of the minimum risk-weighted asset ratios[103] - The Bank is required to maintain a CET1 capital ratio of at least 6.375% and a total capital ratio of at least 9.875% to avoid limitations on capital distributions[104] - The Basel III Capital Rules increased risk weights for various asset classes, including certain commercial real estate mortgages[105] - The federal bank regulatory agencies adopted a final rule allowing community banking organizations with less than $10 billion in total consolidated assets to opt into a new community bank leverage ratio (CBLR) of greater than 9%[107] - The Company is legally obligated to act as a source of financial strength to the Bank and to commit resources to support the Bank[111] - The Federal Reserve requires bank holding companies to be well-capitalized and well-managed to complete interstate mergers or acquisitions[114] - The Company has not elected to be a financial holding company and has not engaged in nonbanking activities determined by the Federal Reserve to be financial in nature[118] - The Company continues to evaluate the final rules regarding the community banking leverage framework and has not made a decision to opt in[109] - The Company is required to act as a source of financial and managerial strength to its subsidiary bank, especially during financial stress[122] - The Federal Reserve's policy discourages bank holding companies from maintaining dividend levels that undermine their ability to support their banking subsidiaries[125] Cybersecurity and Risk Management - The Bank's compliance with anti-money laundering and OFAC programs is critical to avoid serious legal and reputational consequences[151] - The federal bank regulatory agencies have issued guidance on cybersecurity, requiring multiple layers of security controls[166] - The company employs a layered approach to cybersecurity, utilizing various tools to monitor and block suspicious activity, although the threat from cyber-attacks remains high[168] - The company has not detected significant compromises or material financial losses related to cybersecurity attacks to date, but risks remain high due to evolving threats[168] Interest Rate Risk - Interest rate risk is identified as the primary source of market risk, arising from changes in market interest rates affecting earnings and asset values[476] - The company's asset liability committee monitors interest rate risk sensitivity quarterly to ensure compliance with established risk limits[478] - As of December 31, 2019, a 400 basis point increase in interest rates is projected to increase net interest income sensitivity by 18.23%[485] - The economic value of equity sensitivity shows a decrease of 3.61% with a 400 basis point increase in interest rates as of December 31, 2019[485] - The company’s interest rate risk management includes monitoring loan and deposit flows and adjusting strategies based on market expectations[479] - The board's asset liability committee establishes broad policy limits for interest rate risk, while management's committee sets specific operating guidelines[478] - The company’s simulation model for interest rate risk incorporates various assumptions that may significantly impact results, aiding in asset-liability management strategies[483] Employee Relations and Corporate Strategy - The company has approximately 168 full-time equivalent employees as of December 31, 2019, with a good relationship with its employees[90] - The company aims to grow both organically and through potential acquisitions in markets where it operates, particularly in the Korean-American and Chinese-American banking sectors[79] - Significant investments have been made in information technology systems to enhance capabilities and support future growth and acquisitions[86] Investment Policies - The investment policy is reviewed and approved annually by the Asset/Liability Management Board Committee, ensuring compliance and monitoring of investment activities[71] - The investment transactions require varying levels of approval based on the transaction amount, with those exceeding $10 million needing pre-approval by the Asset/Liability Management Board[73]