OP Bancorp Q4 net income rises

Overview

• California bank's Q4 net income rose 5% sequentially, driven by higher net interest income

• Provision for credit losses decreased 61%, reflecting a more favorable economic outlook

• Company's noninterest income fell 17% due to lower gains on loan sales and service charges

Outlook

• Company did not provide specific guidance for future quarters or full year in press release

Result Drivers

• LOAN GROWTH - Net interest income increased 3% due to a $72 mln rise in average loan balances, partially offset by higher interest expenses from a new subordinated note

• CREDIT LOSS PROVISION - Provision for credit losses decreased 61% due to improved economic outlook and lower net charge-offs

• NONINTEREST INCOME DECLINE - Noninterest income fell 17% due to lower gains on loan sales and service charges

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for OP Bancorp is $16.50, about 10.3% above its January 21 closing price of $14.96

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nBw2vqQCDa

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