Saehan Bancorp Reports Strong First Quarter Results
Wednesday May 5, 6:32 pm ET

Net Income Up 44.6 Percent
EPS Increases 44.7 Percent

LOS ANGELES--(BUSINESS WIRE)--May 5, 2004--Saehan Bancorp (OTCBB:SAEB - News), parent company of Saehan Bank, today reported a 44.6 percent increase in net income for its first quarter ended March 31, 2004.

Net income for the first quarter climbed to $1.0 million, or $0.23 per diluted share, from $715,000, or $0.16 per diluted, a year earlier. The return on average equity for the first quarter of 2004 was 12.88 percent and the return on average assets was 1.40 percent, compared with 10.43 percent and 1.07 percent, respectively, for the first quarter of 2003.

Other highlights for the first quarter of 2004 included:

• Noninterest bearing demand deposits increased $9.8 million, or 12.9 percent compared with those at March 31, 2003, and represented 32.8 percent of total deposits at quarter end.

• Net loans increased $42.2 million, or 22.4 percent, over the same period a year ago.

• Total deposits increased $19.8 million, or 8.14 percent, over a year ago.

• Net interest margin increased to 4.55 percent from the 3.74 percent reported in the first quarter of 2003.

• Efficiency improved to 61.39 percent from 65.88 percent in the first quarter of 2003.

• The ratio of nonaccrual loans to net loans was 0.2 percent compared with 0.9 percent at March 31, 2003.

• Noninterest income increased $385,000 to $1.6 million compared with $1.2 million for the first quarter of 2003.

• Noninterest expense increased $578,000 to $2.9 million compared with $2.4 million for the first quarter of 2003.

"Results for the first quarter reflect the benefits of a strategic focus to expand Saehan's loan portfolio, while improving the bank's deposit mix and maintaining excellent credit quality. We expect to continue to benefit from this strategy in the quarters ahead, with low-cost deposits and reduced cost time deposits as we conservatively emphasize loan growth," said Joohak Kim, President and Chief Executive Officer.

Net interest income before provision for loan losses was $3.2 million in the first quarter of 2004 compared with $2.4 million in the first quarter of 2003. Net interest margin for the first quarter of 2004 was 4.55 percent, up from 3.74 percent in the first quarter of 2003. Net interest income increased 34.4 percent, primarily due to the $35.0 million increase in average loans and the 39 basis point decrease in cost of funds. Cost of funds in the first quarter of 2004 was 1.23 percent, compared with 1.64 percent in the first quarter of 2003.

Noninterest income in the first quarter of 2004 totaled $1.6 million, compared with $1.2 million in the first quarter of 2003. The increase from the year ago quarter is primarily attributable to the $326,000 increase in sale of loans, partially offset by a slight decrease in service charges on deposit accounts.

Noninterest expense for the first quarter of 2004 was $2.9 million, an increase of $578,000 from the first quarter of 2003. The increase in noninterest expense for the first quarter of 2004 over the same period a year ago is attributable to higher employee salaries and benefits, and higher occupancy and equipment expenses. The efficiency ratio for the first quarter of 2004 was 61.4 percent compared with 65.9 percent in the first quarter of 2003.

Nonperforming loans were $545,000 at March 31, 2004 down $1.2 million from $1.8 million at March 31, 2003. Nonperforming loans and OREO represented 0.18 percent of total assets at March 31, 2004. The provision for loan losses was $87,000 for the first quarter of 2004 compared with $31,000 a year ago.

Total assets were $298.8 million as of March 31, 2004, representing an increase of $26.3 million, or 9.7 percent, over the $272.4 million in total assets reported on March 31, 2003. Total deposits as of March 31, 2004 increased $19.8 million, or 8.1 percent, to $262.5 million from $242.7 million as of March 31, 2003.

Shareholders' equity totaled $32.9 million at March 31, 2004, an increase of $5.2 million compared to $27.7 million at March 31, 2003. Shareholders' equity primarily increased as a result of the company's earnings and exercises of stock options and warrants. Capital ratios continue to be well above the "Well-Capitalized" guidelines established by the regulatory agencies. The Leverage Ratio was 11.08%, the Tier 1 Risk-based Capital Ratio was 12.91% and the Total Risk-based Capital Ratio was 14.16%.

About Saehan Bancorp

Saehan Bancorp is a bank holding company with headquarters in Los Angeles, California. Its wholly owned subsidiary, Saehan Bank, offers a comprehensive range of financial solutions to meet the needs of the Korean-American community in Los Angeles. Saehan Bancorp is committed to satisfying customers and creating shareholder value. Its six retail branch offices, International Department and SBA Department of Saehan Bank focus on fulfilling these commitments to customers and shareholders.

Safe Harbor Statement

This press release may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

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Contact:
Saehan Bancorp
Daniel Kim, 213-637-4802