Open Bank Announces Opening of New Branch and Third Quarter 2012 Results

LOS ANGELES--()--Open Bank (OTCBB:OPBK) today announced a net income of $567 thousand for the third quarter of 2012 and $5.4 million for the nine months ended September 30, 2012, compared to $271 thousand for the third quarter of 2011 and $1.4 million for the nine months ended September 30, 2011. On November 1, 2012, Open Bank opened its first branch in the downtown Los Angeles fashion district.

Min Kim, President and Chief Executive Officer said, “We are very pleased to announce another solid quarter of profit. Our new branch is designed to offer our customers the increased convenience of a local branch and is part of our overall strategy of focusing on building new customer relationships through core deposits and will allow us to continue to grow our business. We also continue to focus on improving our asset quality and controlling costs. ”

Third Quarter 2012 Highlights:

  • Net income of $567 thousand for the three months ended September 30, 2012.
  • Net income of $5.4 million for the nine months ended September 30, 2012. Reversal of valuation allowance on DTA of $4 million included.
  • Net interest margin was 4.93% for the third quarter of 2012, compared to 4.21% for the third quarter of 2011.
  • Demand deposits increased 38.83% to $46.5 million representing 32.34% of total deposits of $143.7 million at September 30, 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 3.79% at September 30, 2012.
  • The Total risk-based capital ratio, tier 1 capital ratio and tier 1 leverage ratio were 16.94%, 15.67% and 15.48%, respectively at September 30, 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) September 30, 2012 December 31, 2011 September 30, 2011
(Unaudited) (Audited) (Unaudited)
Assets
 
Cash and due from banks $ 12,086 $ 19,595 $ 19,756
Federal fund sold/overnight investment 2,000 - -
Investment securities 8,842 10,023 8,039
Loans held for sale 1,590 2,892 7,137
Loans receivable 133,837 103,688 97,933
Allowance for loan losses 4,104 4,939 4,583
Net loans 135,426 106,580 105,069
Bank premises and equipment, net 572 331 337
Accrued interest receivable 509 451 401
FHLB and Pacific Coast Bankers Bank Stock, at cost 813 732 732
Servicing assets 2,390 1,467 1,240
Net deferred taxes 4,000 - -
Other assets   3,103   3,204   701
Total Assets $ 169,740 $ 142,383 $ 136,276
 
Liabilities and Shareholders' Equity
 
Noninterest bearing demand $ 46,487 $ 33,484 $ 31,923
Savings 641 2,518 2,578
Money market and others 46,748 40,055 31,074
Time deposits of $100,000 or more 29,320 21,616 23,288
Other time deposits   20,543   23,608   26,268
Total deposits 143,738 121,281 115,131
Other liabilities 948 1,683 1,888
Total liabilities 144,686 122,965 117,019
Total shareholders' equity   25,054   19,418   19,257
Total Liabilities and Shareholders' Equity $ 169,740 $ 142,383 $ 136,276
Statement of Operations        
(Dollars in thousand, except per share data)
Three months ended Nine months ended
September 30, 2012 September 30, 2011 September 30, 2012 September 30, 2011
Interest income $ 1,873 $ 1,621 $ 5,272 $ 4,940
Interest expense   167     295     569       931  
Net interest income   1,706     1,326     4,704       4,009  
Provision for loan losses 700 682 1,773 1,462
Non interest income 1,786 1,231 4,488 4,274
Non interest expense   2,225     1,603     6,009       5,312  
Income before income taxes 567 271 1,410 1,508
Provision for income taxes   -     -     (4,000 )     108  
Net income (loss) $ 567   $ 271   $ 5,410     $ 1,401  
 
Book Value $ 3.51 $ 2.70 $ 3.51 $ 2.70
Basic EPS $ 0.08 $ 0.04 $ 0.76 $ 0.21
Diluted EPS $ 0.06 $ 0.03 $ 0.58 $ 0.18
 
Key Ratios
Return on average assets (ROA)* 1.48 % 0.08 % 4.96 % 1.47 %
ROA, excluding tax benefit * 1.48 % 0.08 % 1.29 % 1.47 %
Return on average equity (ROE) * 9.18 % 5.72 % 31.68 % 10.77 %
ROE, excluding tax benefit * 10.96 % 5.72 % 9.37 % 10.77 %
Net interest margin * 4.93 % 4.21 % 4.76 % 4.39 %
Efficiency ratio 79.70 % 62.70 % 80.99 % 64.13 %
 
Tier 1 leverage 15.48 % 14.42 % 15.48 % 14.42 %
Tier 1 risk-based capital 15.67 % 17.43 % 15.67 % 17.43 %
Total risk-based capital 16.94 % 18.71 % 16.94 % 18.71 %
Asset Quality     9/30/2012       6/30/2012       3/31/2012       12/31/2011       9/30/2011  
Loans 90 days or more past due, accruing - - - - -
Nonaccrual Loans   1,850     897     5,078     4,826     2,613  
Total Non-Performing Loans 1,850 897 5,078 4,826 2,613
Other Real Estate Loans (OREO) 456 - - - -
Accruing Restructured Loans   1,052     1,071     1,086     2,061     2,116  
Total Non-Performing Assets 3,358 1,968 6,164 6,887 4,729
 
Non-Performing Loans/Total Loans 1.57 % 0.76 % 4.78 % 4.65 % 2.55 %
Non-Performing Assets/Total Assets 1.98 % 1.32 % 4.30 % 4.84 % 3.47 %
Allowance for Loan Losses/Gross Loans 3.79 % 3.47 % 4.31 % 4.76 % 4.47 %
Allowance for Loan Losses/Non-Performing Loans 241 % 458 % 90 % 102 % 175 %
 
YTD Net Charge-offs $ 2,263 $ 1,908 $ 724 $ 1,344 $ 1,001
YTD Net Charge-offs to Average Loans * 7.60 % 6.51 % 2.56 % 1.22 % 1.23 %
 

* Annualized

Contacts

Open Bank
Christine Oh, 213.892.1192
Christine.oh@myopenbank.com

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