Open Bank Announces the Fourth Quarter 2012 Results

Open Bank Announces the Fourth Quarter 2012 Results

LOS ANGELES--(BUSINESS WIRE)-- Open Bank (OTCBB:OPBK) today announced a net income of $784 thousand for the fourth quarter of 2012 and $6.2 million for the twelve months ended December 31, 2012, compared to $131 thousand for the fourth quarter of 2011 and $1.5 million for the twelve months ended December 31, 2011.

Min Kim, President and Chief Executive Officer, said, "Despite the numerous challenges we faced in 2012, including a difficult economic environment, 2012 turned out to be a banner year for the bank. With the lifting of the Consent Orders we are poised for the expansion of our branch offices, where we can provide better services to our customers. Following the opening in November of 2012 of our first branch in the Fashion District of downtown Los Angeles, we opened our second branch in Gardena, California today. We are continuing to seek additional branch locations in Southern California.

"Another important milestone we achieved in 2012 was crossing the $200 million threshold in the Bank's assets as of December 31, 2012, compared to $142 million as of December 31, 2012. We continued to maintain a high level of demand deposits, at 32% of total deposits as of December 31, 2012, which enabled us to achieve the net interest margin of 4.97% for the quarter. Our asset quality has continued to improve and our Allowance for Loan Losses to Gross Loans dropped below 3%. These successes have allowed us to give back more to our community in 2012. I am very proud of our team for their hard work and grateful to our Board of Directors for their support throughout the year."

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.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)December 31, 2012December 31, 2011
Cash and due from banks$25,146$19,595
Federal fund sold/overnight investment--
Investment securities8,82410,023
Loans held for sale7,6592,892
Loans receivable150,424103,688
Allowance for loan losses4,4074,939
Net loans158,084106,580
Bank premises and equipment, net1,120331
Accrued interest receivable493451
FHLB and Pacific Coast Bankers Bank Stock, at cost813732
Servicing assets2,7161,467
Net deferred taxes4,000-
Other assets 4,947 3,204
Total Assets$206,142$142,383
Liabilities and Shareholders' Equity
Noninterest bearing demand$54,961$33,484
Money market and others60,96940,055
Time deposits of $100,000 or more29,69421,616
Other time deposits 27,846 23,608
Total deposits173,992121,281
FHLB borrowings5,000-
Other liabilities1,2571,683
Total liabilities180,250122,965
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 endedTwelve months ended
December 31, 2012December 31, 2011December 31, 2012December 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 losses5007002,2732,162
Non interest income1,7971,1766,2855,450
Non interest expense 2,492  1,715  8,500   7,027 
Income before income taxes8001802,2101,688
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) *

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 ratio75.69%65.71%79.36%64.51%
Tier 1 leverage13.83%14.06%13.83%14.06%
Tier 1 risk-based capital14.44%16.38%14.44%16.38%
Total risk-based capital15.71%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 Loans1,6211,8508975,0784,826
Other Real Estate Loans (OREO)456456---
Accruing Restructured Loans 876  1,052  1,071  1,086  2,061 
Total Non-Performing Assets2,9533,3581,9686,1646,887
Non-Performing Loans/Total Loans1.00%1.57%0.76%4.78%4.65%
Non-Performing Assets/Total Assets1.43%1.98%1.32%4.30%4.84%
Allowance for Loan Losses/Gross Loans2.71%3.79%3.47%4.31%4.76%
Allowance for Loan Losses/Non-Performing Loans272%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

Open Bank
Christine Oh, 213-892-1192

KEYWORDS:   United States  North America  California


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