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Open Bank Announces the First Quarter 2013 Results

May 7, 2013

LOS ANGELES--(BUSINESS WIRE)-- Open Bank (OTCBB:OPBK) today announced a net income of $3.6 million for the first quarter of 2013 and compared to $4.3 million for the first quarter of 2012. The results included reversals of valuation allowances on the deferred tax assets (“DTA”) of $2.7 million and $4.0 million for the first quarter of 2013 and the first quarter of 2012, respectively. Excluding such tax benefits, the net income for the first quarter of 2013 was $836 thousand, compared to $279 thousand for the first quarter of 2012.

Min Kim, President and Chief Executive Officer said, “We are very pleased to announce another successful quarter. During the first quarter, we opened our second branch in Gardena, California, and we are currently working on opening our third branch in Buena Park, California in third quarter.

“The Bank’s Total Assets increased 54% in the quarter ending March 31, 2013 to $220 million compared to the same quarter in 2012 and our asset quality continues to improve as our classified loans decrease to $5.0 million at March 31, 2013, compared to $11.5 million at March 31, 2012.”

First Quarter 2013 Highlights:

  • Net income of $3.6 million for the three months ended March 31, 2013.
  • Reversal of valuation allowance on DTA of $2.7 million.
  • Net interest margin was 4.48% for the first quarter of 2013, compared to 4.40% for the first quarter of 2012.
  • Demand deposits increased 31% to $52 million compared to $40 million for first quarter of 2012 and representing 27.54% of total deposits of $190 million at March 31, 2013.
  • Allowance for Loan Losses to Gross Loans was 2.47% at March 31, 2013, compared to 4.28% at March 31, 2012.
  • Non-performing assets to total assets continues to improve to 0.96% at March 31, 2013, compared to 4.30% at March 31, 2012.
  • Non-performing loans to total loans also continues to improve to 0.94% at March 31, 2013, compared to 4.75% at March 31, 2012.
  • The Total risk-based capital ratio, tier 1 capital ratio and tier 1 leverage ratio were 15.47%, 14.21% and 12.90%, respectively at March 31, 2013.

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.comMember 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)

March 31, 2013December 31, 2012March 31, 2012
(Unaudited)(Audited)(Unaudited)
Assets
 
Cash and due from banks $ 34,845 $ 25,146 $ 17,974
Investment securities 7,016 8,011 10,728
Loans held for sale 3,507 7,659 750
Loans receivable 160,088 150,424 101,587
Allowance for loan losses 4,138 4,407 4,572
Net loans 163,595 158,084 102,337
Bank premises and equipment, net 1,446 1,120 317
Accrued interest receivable 537 493 403
FHLB and Pacific Coast Bankers Bank Stock, at cost 813 813 732
Servicing assets 3,152 2,716 1,652
Net deferred taxes 6,737 4,000 4,000
Other assets   2,269     5,760     5,157  
Total Assets $ 220,409   $ 206,142   $ 143,300  
 
Liabilities and Shareholders' Equity
 
Noninterest bearing demand $ 52,186 $ 54,961 $ 39,899
Savings 2,422 522 2,615
Money market and others 72,939 60,969 35,529
Time deposits of $100,000 or more 31,565 29,694 18,782
Other time deposits   30,408     27,846     21,276  
Total deposits 189,521 173,992 118,101
FHLB borrowings - 5,000 -
Other liabilities 1,371 1,257 1,466
Total liabilities 190,892 180,250 119,566
Total shareholders' equity   29,517     25,892     23,734  
Total Liabilities and Shareholders' Equity $ 220,409   $ 206,142   $ 143,300  
 
Statement of Operations
(Dollars in thousand, except per share data)
Three months ended
March 31, 2013December 31, 2012March 31, 2012
Interest income $ 2,316 $ 2,192 $ 1,644
Interest expense   235     197     225  
Net interest income   2,081     1,995     1,419  
Provision for loan losses 500 500 356
Non interest income 2,441 1,797 1,076
Non interest expense   3,186     2,492     1,859  
Income before income taxes 836 800 279
Provision for income taxes   (2,737 )   16     (4,000 )
Net income (loss) $ 3,573   $ 784   $ 4,279  
 
Book Value $ 4.10 $ 3.62 $ 3.32
Basic EPS $ 0.50 $ 0.11 $ 0.60
Diluted EPS $ 0.33 $ 0.07 $ 0.45
 
Key Ratios
Return on average assets (ROA)* 7.03 % 1.76 % 12.34 %
ROA, excluding tax benefit * 1.68 % 1.80 % 0.81 %
Return on average equity (ROE) * 54.41 % 12.30 % 87.21 %
ROE, excluding tax benefit * 15.08 % 14.87 % 5.69 %
Net interest margin * 4.48 % 4.97 % 4.40 %
Efficiency ratio 70.46 % 75.69 % 86.94 %
 
Tier 1 leverage 12.90 % 13.83 % 15.72 %
Tier 1 risk-based capital 14.21 % 14.44 % 18.07 %
Total risk-based capital 15.47 % 15.71 % 19.35 %
 
 
Asset Quality   3/31/2013     12/31/2012     9/30/2012     6/30/2012     3/31/2012  
Loans 90 days or more past due, accruing - - - - -
Nonaccrual Loans   1,583     1,621     1,850     897     5,078  
Total Non-Performing Loans 1,583 1,621 1,850 897 5,078
Other Real Estate Loans (OREO) - 456 456 - -
Accruing Restructured Loans   527     876     1,052     1,071     1,086  
Total Non-Performing Assets 2,110 2,953 3,358 1,968 6,164
 
Non-Performing Loans/Total Loans 0.94 % 1.00 % 1.32 % 0.74 % 4.75 %
Non-Performing Assets/Total Assets 0.96 % 1.43 % 1.98 % 1.32 % 4.30 %
Allowance for Loan Losses/Gross Loans 2.47 % 2.71 % 3.18 % 3.39 % 4.28 %
Allowance for Loan Losses/Non-Performing Loans 261.41 % 271.86 % 240.51 % 457.69 % 90.04 %
 
YTD Net Charge-offs $ 769 $ 2,805 $ 2,263 $ 1,908 $ 724
YTD Net Charge-offs to Average Loans * 1.79 % 2.21 % 2.53 % 3.25 % 2.56 %
 
* Annualized

Open Bank
Christine Oh, 213-892-1192
Christine.oh@myopenbank.com

Source: Open Bank

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