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Open Bank Announces The Fourth Quarter 2012 Results

Fourth Quarter 2012 Highlights:

  • Net income of $784 thousand for the three months ended December 31, 2012.
  • Net income of $6.2 million for the twelve months ended December 31, 2012. Reversal of valuation allowance on DTA of $4 million included.
  • Net interest margin was 4.97% for the fourth quarter of 2012, compared to 4.37% for the fourth quarter of 2011.
  • Demand deposits increased 64.14% to $55.0 million representing 31.59% of total deposits of $174.0 million at December 31, 2012, from $33.5 million, 27.61% of total deposits of $121.3 million, at December 31, 2011.
  • Allowance for Loan Losses to Gross Loans was 2.71% at December 31, 2012, compared to 4.76% at December 31, 2011.
  • Non-performing assets to total assets improved significantly to 1.00% at December 31, 2012, compared to 4.65% at December 31, 2011.
  • The Total risk-based capital ratio, tier 1 capital ratio and tier 1 leverage ratio were 15.72%, 14.45% and 13.84%, respectively at December 31, 2012.

About Open Bank

Open Bank (the "Bank") is engaged in the general commercial banking business in Los Angeles County and is focused on serving the banking needs of small- and medium-sized businesses, professionals, and residents with a particular emphasis on the Korean and other ethnic minority communities. The Bank commenced its operations on June 10, 2005 as First Standard Bank and changed its name to Open Bank on September 20, 2010. Its headquarters are located at 1000 Wilshire Blvd., Suite 100 Los Angeles, California 90017. Phone 213.892.9999; www.myopenbank.com Member FDIC, Equal Housing Lender

Safe Harbor

This press release contains certain forward-looking information about Open Bank that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements may include, but are not limited to, such words as "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "should," "could," "predicts," "potential," "continue," or the negative of such terms and other comparable terminology or similar expressions and may include statements about the bank’s focus on exploring new opportunities, building customer relationship through core deposits, growing core deposits, and improving asset quality. Forward-looking statements are not guarantees. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Open Bank such as the ability of the new branch to attract sufficient number of customers, deposits and new business to become profitable. Open Bank cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, Open Bank’s results could differ materially from those expressed in, or implied or projected by such forward-looking statements. Open Bank assumes no obligation to update such forward-looking statements, except as required by law.
Balance Sheet    
(Dollars in thousand, except per share data) December 31, 2012 December 31, 2011
(Unaudited) (Audited)
Assets
 
Cash and due from banks $ 25,146 $ 19,595
Federal fund sold/overnight investment - -
Investment securities 8,824 10,023
Loans held for sale 7,659 2,892
Loans receivable 150,424 103,688
Allowance for loan losses 4,407 4,939
Net loans 158,084 106,580
Bank premises and equipment, net 1,120 331
Accrued interest receivable 493 451
FHLB and Pacific Coast Bankers Bank Stock, at cost 813 732
Servicing assets 2,716 1,467
Net deferred taxes 4,000 -
Other assets   4,947   3,204
Total Assets $ 206,142 $ 142,383
 
Liabilities and Shareholders' Equity
 
Noninterest bearing demand $ 54,961 $ 33,484
Savings 522 2,518
Money market and others 60,969 40,055
Time deposits of $100,000 or more 29,694 21,616
Other time deposits   27,846   23,608
Total deposits 173,992 121,281
FHLB borrowings 5,000 -
Other liabilities 1,257 1,683
Total liabilities 180,250 122,965
Total shareholders' equity   25,892   19,418
Total Liabilities and Shareholders' Equity $ 206,142 $ 142,383
 
Statement of Operations
(Dollars in thousand, except per share data)        
Three months ended Twelve months ended
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Interest income $ 2,192 $ 1,692 $ 7,464 $ 6,632
Interest expense   197     273     766       1,204  
Net interest income   1,995     1,419     6,699       5,428  
Provision for loan losses 500 700 2,273 2,162
Non interest income 1,797 1,176 6,285 5,450
Non interest expense   2,492     1,715     8,500       7,027  
Income before income taxes 800 180 2,210 1,688
Provision for income taxes   16     49     (3,985 )     157  
Net income (loss) $ 784   $ 131   $ 6,195     $ 1,532  
 
Book Value $ 3.62 $ 2.72 $ 3.62 $ 2.72
Basic EPS $ 0.11 $ 0.02 $ 0.87 $ 0.22
Diluted EPS $ 0.07 $ 0.02 $ 0.57 $ 0.19
 
Key Ratios

Return on average assets (ROA) *
1.76 % 0.38 % 4.03 % 1.18 %
ROA, excluding tax benefit * 1.80 % - 1.44 % -
Return on average equity (ROE) * 12.30 % 2.70 % 26.41 % 8.58 %
ROE, excluding tax benefit * 14.87 % - 10.82 % -
Net interest margin * 4.97 % 4.37 % 4.84 % 4.39 %
Efficiency ratio 75.69 % 65.71 % 79.36 % 64.51 %
 
Tier 1 leverage 13.83 % 14.06 % 13.83 % 14.06 %
Tier 1 risk-based capital 14.44 % 16.38 % 14.44 % 16.38 %
Total risk-based capital 15.71 % 17.67 % 15.71 % 17.67 %
         
Asset Quality   12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011  
Loans 90 days or more past due, accruing - - - - -
Nonaccrual Loans   1,621     1,850     897     5,078     4,826  
Total Non-Performing Loans 1,621 1,850 897 5,078 4,826
Other Real Estate Loans (OREO) 456 456 - - -
Accruing Restructured Loans   876     1,052     1,071     1,086     2,061  
Total Non-Performing Assets 2,953 3,358 1,968 6,164 6,887
 
Non-Performing Loans/Total Loans 1.00 % 1.57 % 0.76 % 4.78 % 4.65 %
Non-Performing Assets/Total Assets 1.43 % 1.98 % 1.32 % 4.30 % 4.84 %
Allowance for Loan Losses/Gross Loans 2.71 % 3.79 % 3.47 % 4.31 % 4.76 %
Allowance for Loan Losses/Non-Performing Loans 272 % 241 % 458 % 90 % 102 %
 
YTD Net Charge-offs $ 2,805 $ 2,263 $ 1,908 $ 724 $ 1,344
YTD Net Charge-offs to Average Loans * 2.21 % 2.53 % 3.25 % 2.56 % 1.22 %
 
* Annualized

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