OP Bancorp (OPBK) Stock Analysis and Metrics

OP Bancorp

NASDAQ: OPBK

$15.66 ▲ +0.87 (+5.88%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap233.94 Mn

P/E8.57

P/S87.72

Div. Yield0.03

Total Debt (Qtr)24.61 Mn

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About

OP Bancorp is a bank holding company headquartered in Los Angeles California. The company conducts its commercial community banking activities through its wholly owned banking subsidiary Open Bank. It does not engage in material business operations outside of the bank. OP Bancorp operates twelve full service branches: nine in Los Angeles and Orange Counties, one each in Santa Clara California, Carrollton Texas, and Las Vegas Nevada. It also maintains five loan production offices located in Pleasanton California, Atlanta Georgia, Aurora Colorado, Lynnwood Washington, and Fairfax Virginia. The bank’s primary focus is serving small and medium sized businesses, their owners and retail customers within the Korean American communities of its market areas.

Revenue is generated primarily from net interest income, which equals interest earned on loans and related products less interest paid on deposits and other borrowings. The company also earns fee income from deposit services and gains from the sale and servicing of SBA loans. Its loan portfolio consists of commercial real estate loans, SBA loans, commercial and industrial loans, and home mortgage loans. Deposits are gathered through its branch network and provide the main source of funding for lending activities. As of September 30 2025, gross loans totaled $2,151,217,000, with commercial real estate representing 51% of the portfolio, home mortgage loans 27%, SBA loans 11%, and commercial and industrial loans 10%. Deposits reached $2,273,417,000, of which noninterest bearing demand deposits accounted for 24% and interest bearing deposits made up 76%.

OP Bancorp competes in the banking industry alongside other community banks and national financial institutions. The bank has consistently exceeded regulatory capital requirements and was classified as well capitalized under the prompt corrective action framework as of September 30 2025. Its Tier 1 leverage ratio stood at 9.01%, the common equity tier 1 capital ratio at 10.92%, and the total risk based capital ratio at 12.17%. A competitive advantage arises from its concentrated focus on the Korean American community, which generates a stable and loyal deposit base. The bank’s status as an SBA Preferred Lender enables it to offer specialized lending products that serve small businesses effectively. Additionally, its branch network spanning California, Texas and Nevada and its loan production offices in several states provide geographic reach that supports relationship banking.

The bank serves small and medium sized businesses, their owners and retail customers. Its primary customers are members of the Korean American community located in Los Angeles, Orange County, Santa Clara, Carrollton and Las Vegas. Additionally, it serves customers through loan production offices in Pleasanton, Atlanta, Aurora, Lynnwood and Fairfax. The bank relies on locally generated deposits, mostly from the Korean American market within California, to fund its loan activities. No specific customer names are disclosed in the filing.

Investment Thesis

▲ Bull case

OP Bancorp demonstrated solid loan growth in the first quarter of fiscal year 2026 with total gross loans rising to 2,234,259 thousand representing a two% increase from the prior quarter and a nine% increase year over year. This expansion was led by commercial real estate loans which grew four% quarter over quarter and fifteen% year over year and SBA loans which increased seven% quarter over quarter and ten% year over year. The growth in these higher yielding segments supports future net interest income expansion especially as the company continues to benefit from its relationship driven model in key geographic markets. The steady loan growth provides a foundation for sustained revenue expansion beyond the current quarterly results.
The board announced a quarterly cash dividend of zero point one four dollars per share marking a seventeen% increase from the prior dividend of zero point one two dollars per share signaling management confidence in future cash generation. Capital ratios remain robust with common equity tier one capital at ten point eight two% total capital at thirteen point one seven% and tier one leverage at nine point zero seven% all comfortably above regulatory minimums. This strong capital base provides flexibility to support additional loan growth absorb potential credit losses and return capital to shareholders through dividends or share repurchases. The combination of rising dividends and solid capital ratios suggests the market may be underestimating the company's ability to deliver shareholder returns while maintaining a safe balance sheet.
The efficiency ratio improved to fifty seven point nine seven% in the first quarter of fiscal year 2026 down from fifty eight point eight seven% in the prior quarter and significantly lower than sixty two point one three% a year earlier reflecting disciplined expense management. Noninterest expense remained essentially flat quarter over quarter showing only a zero% change indicating effective cost control despite ongoing investments in technology and personnel. Lower efficiency ratio translates to higher operating leverage meaning each additional dollar of revenue generates a larger increase in pretax income. This trend suggests the market may not be fully appreciating the operating leverage embedded in the current cost structure.
Although nonperforming loans rose to eighteen thousand two hundred ninety seven thousand representing zero point eight two% of gross loans the increase was attributed to a single isolated relationship and overall credit quality remained sound with net recoveries of zero point zero one% of average gross loans and an allowance for credit losses of one point two seven% of gross loans. Liquidity remains ample with liquid assets of three hundred sixty nine thousand two hundred sixty six thousand and total available borrowings of seven hundred twenty one thousand eight hundred sixty three thousand providing a liquidity coverage ratio of forty seven% of total deposits. The combination of low net charge offs adequate reserves and strong liquidity reduces the likelihood of sudden credit related surprises. These factors indicate the market may be overlooking the resilience of the company's credit profile amid a moderate economic backdrop.

OP Bancorp demonstrated solid loan growth in the first quarter of fiscal year 2026 with total gross loans rising to 2,234,259 thousand representing a two% increase from the prior quarter and a nine% increase year over year. This expansion was led by commercial real estate loans which grew four% quarter over quarter and fifteen% year over year and SBA loans which increased seven% quarter over quarter and ten% year over year. The growth in these higher yielding segments supports future net interest income expansion especially as the company continues to benefit from its relationship driven model in key geographic markets. The steady loan growth provides a foundation for sustained revenue expansion beyond the current quarterly results.
The board announced a quarterly cash dividend of zero point one four dollars per share marking a seventeen% increase from the prior dividend of zero point one two dollars per share signaling management confidence in future cash generation. Capital ratios remain robust with common equity tier one capital at ten point eight two% total capital at thirteen point one seven% and tier one leverage at nine point zero seven% all comfortably above regulatory minimums. This strong capital base provides flexibility to support additional loan growth absorb potential credit losses and return capital to shareholders through dividends or share repurchases. The combination of rising dividends and solid capital ratios suggests the market may be underestimating the company's ability to deliver shareholder returns while maintaining a safe balance sheet.
The efficiency ratio improved to fifty seven point nine seven% in the first quarter of fiscal year 2026 down from fifty eight point eight seven% in the prior quarter and significantly lower than sixty two point one three% a year earlier reflecting disciplined expense management. Noninterest expense remained essentially flat quarter over quarter showing only a zero% change indicating effective cost control despite ongoing investments in technology and personnel. Lower efficiency ratio translates to higher operating leverage meaning each additional dollar of revenue generates a larger increase in pretax income. This trend suggests the market may not be fully appreciating the operating leverage embedded in the current cost structure.
Although nonperforming loans rose to eighteen thousand two hundred ninety seven thousand representing zero point eight two% of gross loans the increase was attributed to a single isolated relationship and overall credit quality remained sound with net recoveries of zero point zero one% of average gross loans and an allowance for credit losses of one point two seven% of gross loans. Liquidity remains ample with liquid assets of three hundred sixty nine thousand two hundred sixty six thousand and total available borrowings of seven hundred twenty one thousand eight hundred sixty three thousand providing a liquidity coverage ratio of forty seven% of total deposits. The combination of low net charge offs adequate reserves and strong liquidity reduces the likelihood of sudden credit related surprises. These factors indicate the market may be overlooking the resilience of the company's credit profile amid a moderate economic backdrop.

▼ Bear case

Nonperforming loans increased to eighteen thousand two hundred ninety seven thousand up from fourteen thousand seventy one thousand in the prior quarter and ten thousand four hundred twelve thousand a year earlier reflecting a thirty% quarterly increase and a seventy six% yearly increase. The rise in nonperforming assets was driven primarily by a single isolated relationship but the overall level of criticized loans grew to thirty three thousand two hundred thirty five thousand representing one point four nine% of gross loans up from one point four six% last quarter and one point thirteen% a year ago. The bank's loan portfolio shows a significant concentration in commercial real estate which comprises over fifty% of total loans making performance sensitive to fluctuations in property values and tenant demand. If the isolated issue spreads or broader CRE stress emerges credit costs could rise faster than current provisions suggest.
Net interest margin contracted six basis points quarter over quarter to three point one nine% due to lower loan yields and two fewer accrual days partially offset by balance sheet growth and a special dividend on FHLB stock. The yield on loans declined fifteen basis points compared to the prior quarter while the cost of deposits fell only six basis points indicating that asset yields are decreasing faster than liability costs. Continued pressure on loan yields could compress net interest margin further especially if the Federal Reserve maintains higher rates for longer increasing deposit costs without a proportional increase in asset yields. This dynamic suggests the market may be underestimating the risk of margin compression in a rising rate environment.
The issuance of a twenty five million dollar subordinated note in November two thousand twenty five added leverage to the balance sheet and while it qualifies as tier two capital at the consolidated level it increases interest expense as shown by the seven hundred sixty% jump in interest on subordinated note year over year. Although the company raised its dividend to zero point one four dollars per share the payout ratio remains modest given earnings of zero point four eight dollars per diluted share but any further dividend increases could strain capital if earnings growth slows. The combination of growing leverage from debt and rising shareholder returns reduces the margin of safety for adverse credit events. Investors may be ignoring the cumulative effect of these financing choices on overall risk profile.
While the efficiency ratio improved to fifty seven point nine seven% it remains above the fifty% threshold that many peers achieve indicating there is still room for expense reduction. Noninterest expense increased three% year over year driven by higher salaries and employee benefits and higher occupancy and equipment costs reflecting ongoing investments that may not yet be translating into proportional revenue growth. The company's efficiency gains have been modest and further improvements will require either accelerated revenue growth or stricter cost discipline. If operating leverage does not materialize as expected the bottom line could be more sensitive to revenue fluctuations than the market anticipates.

Nonperforming loans increased to eighteen thousand two hundred ninety seven thousand up from fourteen thousand seventy one thousand in the prior quarter and ten thousand four hundred twelve thousand a year earlier reflecting a thirty% quarterly increase and a seventy six% yearly increase. The rise in nonperforming assets was driven primarily by a single isolated relationship but the overall level of criticized loans grew to thirty three thousand two hundred thirty five thousand representing one point four nine% of gross loans up from one point four six% last quarter and one point thirteen% a year ago. The bank's loan portfolio shows a significant concentration in commercial real estate which comprises over fifty% of total loans making performance sensitive to fluctuations in property values and tenant demand. If the isolated issue spreads or broader CRE stress emerges credit costs could rise faster than current provisions suggest.
Net interest margin contracted six basis points quarter over quarter to three point one nine% due to lower loan yields and two fewer accrual days partially offset by balance sheet growth and a special dividend on FHLB stock. The yield on loans declined fifteen basis points compared to the prior quarter while the cost of deposits fell only six basis points indicating that asset yields are decreasing faster than liability costs. Continued pressure on loan yields could compress net interest margin further especially if the Federal Reserve maintains higher rates for longer increasing deposit costs without a proportional increase in asset yields. This dynamic suggests the market may be underestimating the risk of margin compression in a rising rate environment.
The issuance of a twenty five million dollar subordinated note in November two thousand twenty five added leverage to the balance sheet and while it qualifies as tier two capital at the consolidated level it increases interest expense as shown by the seven hundred sixty% jump in interest on subordinated note year over year. Although the company raised its dividend to zero point one four dollars per share the payout ratio remains modest given earnings of zero point four eight dollars per diluted share but any further dividend increases could strain capital if earnings growth slows. The combination of growing leverage from debt and rising shareholder returns reduces the margin of safety for adverse credit events. Investors may be ignoring the cumulative effect of these financing choices on overall risk profile.
While the efficiency ratio improved to fifty seven point nine seven% it remains above the fifty% threshold that many peers achieve indicating there is still room for expense reduction. Noninterest expense increased three% year over year driven by higher salaries and employee benefits and higher occupancy and equipment costs reflecting ongoing investments that may not yet be translating into proportional revenue growth. The company's efficiency gains have been modest and further improvements will require either accelerated revenue growth or stricter cost discipline. If operating leverage does not materialize as expected the bottom line could be more sensitive to revenue fluctuations than the market anticipates.

Peer Comparison

Companies in the Banks - Regional

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	KB	KB Financial Group Inc.	42,090.38 Bn	0.00 Bn	0.01 Mn	56.66 Bn
2	SHG	Shinhan Financial Group Co Ltd	33,919.15 Bn	0.00 Bn	0.00 Mn	40.46 Bn
3	BCH	Bank Of Chile	4,123.52 Bn	368.17 Bn	1.57 Mn	0.00 Bn
4	LYG	Lloyds Banking Group plc	360.83 Bn	0.00 Bn	0.00 Mn	42.37 Bn
5	FCAP	First Capital Inc	204.17 Bn	0.00 Bn	0.03 Mn	-
6	LARK	Landmark Bancorp Inc	187.97 Bn	0.00 Bn	0.00 Mn	0.00 Bn
7	NWG	NatWest Group plc	144.82 Bn	0.00 Bn	0.00 Mn	94.66 Bn
8	PNC	Pnc Financial Services Group, Inc.	101.80 Bn	0.00 Bn	0.00 Mn	21.42 Bn

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