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Open Bank Announces Third Quarter 2013 Results

Stocks in this article: OPBK

Open Bank (OTCBB:OPBK) today announced a net income of $950 thousand for the third quarter of 2013 and $5.4 million for the nine months ended September 30, 2013, compared to $567 thousand for the third quarter of 2012 and $5.4 million for the nine months ended September 30, 2012. Excluding tax benefits, the net income for the first nine months of 2013 was $2.7 million, compared to $1.4 million for the same period 2012.

Min Kim, President and Chief Executive Officer, said, “I am very pleased to announce yet another successful quarter with significant growth in our loan and deposit portfolios. Net loans increased 72.96% to $234.2 million compared to $135.4 million for the third quarter of 2012 and demand deposits increased 88.74% to $84.7 million compared to $46.5 million for the third quarter of 2012. During Q3 2013 we opened our long awaited branch in the Aroma Center located in the heart of Los Angeles’ Koreatown. We are currently in the process of opening our fifth full service branch, located in Buena Park, California, which has a large Korean-American population. The completion of the Buena Park branch will give us the branch network to cover most of our existing customers as well as being able to penetrate into new target market. We expect that our two new branches will contribute greatly to our organic growth in coming years.

“We have also strengthened our lending department with the addition of our new Chief Lending Officer, Ms. Ki Won Yoon. Ms. Yoon has over 25 years of relevant lending experience, with strong ties in the Korean-American business community. Prior to joining Open Bank, Ms. Yoon was District Manager at BBCN bank (formerly Nara Bank), which she joined in 1997, and where she managed a loan portfolio of over $450 million.

“The Bank’s total assets increased 75% in the quarter ending September 30, 2013 to $296.2 million compared to the same quarter in 2012 and our asset quality continues to improve as our classified loans decreased to $4.5 million at September 30, 2013, compared to $7.5 million at September 30, 2012. This quarter marks the 3 rd anniversary since Open Bank changed its name from First Standard Bank to Open Bank. We believe we are well positioned to continue growing our assets and improving our net income through continued strategic branch expansion.”

Third Quarter 2013 Highlights:

  • Net income of $950 thousand for the three months ended September 30, 2013.
  • Net income of $5.4 million for the nine months ended September 30, 2013.
  • Net interest margin was 4.50% for the third quarter of 2013, compared to 4.93% for the third quarter of 2012.
  • Demand deposits increased 88.74% to $84.7 million compared to $46.5 million for the third quarter of 2012 and representing 32.19% of total deposits of $263.2 million at September 30, 2013.
  • Net loans increased 72.96% to $234.2 million compared to $135.4 million for the third quarter of 2012.
  • Allowance for Loan Losses to Gross Loans was 2.11% at September 30, 2013, compared to 3.18% at September 30, 2012.
  • Non-performing assets to total assets continues to improve to 0.64% at September 30, 2013, compared to 1.98% at September 30, 2012.
  • The Total risk-based capital ratio, tier 1 capital ratio and tier 1 leverage ratio were 12.11%, 10.85% and 10.83%, respectively at September 30, 2013.

About Open Bank

Open Bank (the "Bank") is engaged in the general commercial banking business in Southern California 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 is 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 future branch expansions and opening a third branch in the third quarter of 2013 as well as the ability to continue to offer mortgage loans in the future. 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 as well as the risk inherent in the general real estate mortgage business. 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) September 30, 2013 December 31, 2012 September 30, 2012
(Unaudited) (Audited) (Unaudited)
Assets
 
Cash and due from banks $ 33,255 $ 25,146 $ 12,086
Federal fund sold/overnight investment - - 2,000
Investment securities 12,524 8,011 8,029
Loans held for sale 4,516 7,659 1,590
Loans receivable 229,731 150,424 133,837
Allowance for loan losses 5,046 4,407 4,449
Net loans 234,247 158,084 135,426
Bank premises and equipment, net 2,111 1,120 572
Accrued interest receivable 695 493 509
FHLB and Pacific Coast Bankers Bank Stock, at cost 1,075 813 813
Servicing assets 3,666 2,716 2,390
Net deferred taxes 6,737 4,000 4,000
Other assets   1,876   5,760   3,916
Total Assets $ 296,185 $ 206,142 $ 169,740
 
Liabilities and Shareholders' Equity
 
Noninterest bearing demand $ 84,743 $ 54,961 $ 46,487
Savings 696 522 641
Money market and others 97,211 60,969 46,748
Time deposits of $100,000 or more 44,329 29,694 29,320
Other time deposits   36,243   27,846   20,543
Total deposits 263,222 173,992 143,738
FHLB borrowings - 5,000 -
Other liabilities 1,747 1,257 948
Total liabilities 264,970 180,250 144,686
Total shareholders' equity   31,216   25,892   25,054
Total Liabilities and Shareholders' Equity $ 296,185 $ 206,142 $ 169,740
 
 
Statement of Operations
(Dollars in thousand, except per share data)
    Three months ended     Nine months ended      
September 30, 2013     September 30, 2012   September 30, 2013     September 30, 2012
Interest income $ 2,968 $ 1,873 $ 7,702 $ 5,272
Interest expense   289     167     783     569  
Net interest income   2,679     1,706     6,919     4,704  
Provision for loan losses 226 700 1,376 1,773
Non interest income 1,623 1,786 5,745 4,488
Non interest expense   3,110     2,225     8,554     6,009  
Income before income taxes 965 567 2,734 1,410
Provision for income taxes   15     -     (2,692 )   (4,000 )
Net income (loss) $ 950   $ 567   $ 5,426   $ 5,410  
 
Book Value $ 4.32 $ 3.51 $ 4.32 $ 3.51
Basic EPS $ 0.13 $ 0.08 $ 0.75 $ 0.76
Diluted EPS $ 0.12 $ 0.08 $ 0.72 $ 0.76
 
Key Ratios
Return on average assets (ROA)* 1.47 % 1.48 % 3.14 % 4.96 %
ROA, excluding tax benefit * 1.47 % 1.48 % 1.57 % 1.29 %
Return on average equity (ROE) * 12.40 % 9.18 % 25.00 % 31.68 %
ROE, excluding tax benefit * 12.40 % 10.96 % 13.45 % 9.37 %
Net interest margin * 4.50 % 4.93 % 4.37 % 4.76 %
Efficiency ratio 72.31 % 79.70 % 67.55 % 80.99 %
 
Tier 1 leverage 12.11 % 15.48 % 12.11 % 15.48 %
Tier 1 risk-based capital 10.85 % 15.67 % 10.85 % 15.67 %
Total risk-based capital 10.83 % 16.94 % 10.83 % 16.94 %
 
 
Asset Quality 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Loans 90 days or more past due, accruing - - - - -
Nonaccrual Loans   1,379     1,480     1,583     1,621     1,850  
Total Non-Performing Loans 1,379 1,480 1,583 1,621 1,850
Other Real Estate Loans (OREO) - - - 456 456
Accruing Restructured Loans   504     515     527     876     1,052  
Total Non-Performing Assets 1,883 1,995 2,110 2,953 3,358

 

Non-Performing Loans/Total Loans 0.58 % 0.78 % 0.94 % 1.00 % 1.32 %

 

Non-Performing Assets/Total Assets 0.64 % 0.81 % 0.96 % 1.43 % 1.98 %

 

Allowance for Loan Losses/Gross Loans 2.11 % 2.51 % 2.47 % 2.71 % 3.18 %

 

Allowance for Loan Losses/Non-Performing Loans 365.93 % 320.80 % 261.41 % 271.86 % 240.51 %

 

 
YTD Net Charge-offs $ 737 $ 809 $ 769 $ 2,805 $ 2,263

 

YTD Net Charge-offs to Average Loans * 0.52 % 0.93 % 1.79 % 2.21 % 2.53 %

 

 

*  Annualized





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