Open Bank Announces the First Quarter 2013 Results

Open Bank Announces the First Quarter 2013 Results

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, 2013

December 31, 2012

March 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, 2013

December 31, 2012

March 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