On November 10, 2025, OP Bancorp (Nasdaq: OPBK), the parent company of Open Bank, announced the successful completion of a private placement of $25 million in subordinated notes. This financial maneuver is designed to bolster the company’s Tier 2 capital and support its growth strategy, particularly in serving small- and medium-sized businesses, as well as ethnic minority communities across California and beyond.

2. Details of the Subordinated Note

The subordinated notes, which carry a fixed-to-floating interest rate structure, are due to mature on November 15, 2035. Key details include:

Interest Rate: The notes will bear a fixed interest rate of 7.50% per annum from the issue date until November 15, 2030. After this period, the interest rate will reset quarterly to the sum of the three-month term Secured Overnight Financing Rate (SOFR) plus 411 basis points. This reset mechanism is designed to align the notes more closely with market conditions as they evolve.

Payment Schedule: Interest will be payable semi-annually until the reset date, with payments commencing on May 15, 2026. Post-reset, payments will be made quarterly, reflecting the new interest rate structure.

Redemption Options: OP Bancorp retains the right to redeem the notes, in whole or in part, at any time after the reset date, contingent upon any necessary regulatory approvals.

3. Objectives and Strategic Importance

The issuance of these subordinated notes is part of OP Bancorp's strategy to enhance its regulatory capital base. The net proceeds from this offering are earmarked for general corporate purposes, which includes strengthening Open Bank’s capital position. This is particularly crucial as the bank aims to expand its operations and continue to meet the banking needs of its targeted communities, which include Korean and other ethnic minority populations.

4. Role of Financial Partners

The private placement of the subordinated notes was facilitated by Raymond James & Associates, Inc., which served as the sole placement agent for the offering. Legal counsel for OP Bancorp in this transaction was provided by Buchalter.

5. About OP Bancorp

OP Bancorp is a California-based financial institution focused on commercial banking services. It operates in key markets including Los Angeles, Orange, and Santa Clara Counties in California, as well as the Dallas metropolitan area in Texas and Clark County in Nevada. The bank operates twelve full-service branches and five loan production offices, emphasizing its commitment to serving small businesses and diverse communities.

Founded in 2005 as First Standard Bank, OP Bancorp rebranded to Open Bank in 2010, reflecting its mission to provide accessible banking solutions tailored to the needs of its customers.

6. Conclusion

The closing of this $25 million subordinated note offering marks a significant step for OP Bancorp as it continues to strengthen its capital base and expand its reach within underserved markets. As the company leverages these funds to support growth, stakeholders will be keenly observing how this strategic move aligns with its long-term objectives and impacts its financial performance in the coming years.

Original press release