First Mid Bancshares (NASDAQ:FMBH) versus OP Bancorp (NASDAQ:OPBK) Critical Analysis

First Mid Bancshares (NASDAQ:FMBH) and OP Bancorp (NASDAQ:OPBK) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Profitability

This table compares First Mid Bancshares and OP Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Mid Bancshares	17.32%	10.38%	1.11%
OP Bancorp	14.18%	10.81%	0.94%

Analyst Ratings

This is a summary of recent ratings and price targets for First Mid Bancshares and OP Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Mid Bancshares	0	3	3	0	2.50
OP Bancorp	0	1	0	0	2.00

First Mid Bancshares currently has a consensus target price of $42.50, suggesting a potential upside of 12.61%. OP Bancorp has a consensus target price of $13.00, suggesting a potential downside of 17.09%. Given First Mid Bancshares’ stronger consensus rating and higher possible upside, equities analysts clearly believe First Mid Bancshares is more favorable than OP Bancorp.

Volatility & Risk

First Mid Bancshares has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, OP Bancorp has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Dividends

First Mid Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 2.5%. OP Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.1%. First Mid Bancshares pays out 29.5% of its earnings in the form of a dividend. OP Bancorp pays out 34.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional & Insider Ownership

47.6% of First Mid Bancshares shares are owned by institutional investors. Comparatively, 53.6% of OP Bancorp shares are owned by institutional investors. 5.2% of First Mid Bancshares shares are owned by company insiders. Comparatively, 21.3% of OP Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares First Mid Bancshares and OP Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Mid Bancshares	$313.26 million	2.88	$68.93 million	$3.25	11.61
OP Bancorp	$80.60 million	2.88	$23.92 million	$1.40	11.20

First Mid Bancshares has higher revenue and earnings than OP Bancorp. OP Bancorp is trading at a lower price-to-earnings ratio than First Mid Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

First Mid Bancshares beats OP Bancorp on 11 of the 16 factors compared between the two stocks.

About First Mid Bancshares

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company’s loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.

About OP Bancorp

OP Bancorp operates as the bank holding company for Open Bank that provides banking products and services in California. It offers demand, checking, savings, money market, and time deposit accounts, as well as certificates of deposit. The company also provides commercial real estate, small business administration, commercial and industrial business, single-family residential, term, consumer, and home mortgage loans; trade financing products; and letters of credit, and SWIFT and export advice. In addition, it offers debit and credit card, online transfer and bill payment, electronic delivery of customer statements, and mobile banking solutions for iPhone and Android phones, including remote check deposit with mobile bill pay; direct deposits, cashier's checks, person to person payments, wire transfers, and automated clearing house (ACH) services; and cash management services, including balance reporting, transfers between accounts, wire transfer initiation, ACH origination, and stop payment services, as well as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company operates full branch offices in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park, and Santa Clara in California; and Carrollton, Texas; and operates loan production offices in Pleasanton, California; Atlanta, Georgia; Aurora, Colorado; and Lynnwood in Washington. The company was founded in 2005 and is headquartered in Los Angeles, California.