LOS ANGELES--(BUSINESS WIRE)--Saehan Bancorp (OTCBB: SAEB - News) today reported results for its second quarter ended June 30, 2008 reflecting increases in total assets, net loans and total deposits offset by the impact of reductions in Federal Funds Rate and reduced Small Business Administration loan activity.
The company recorded a net loss of $1.6 million, or 0.13 per diluted share, for the second quarter of 2008, compared with a net income of $2.1 million, or $0.17 per diluted share a year ago. The return on average equity for the second quarter of 2008 was -10.23 percent and the return on average assets was -0.77 percent compared with 15.18 percent and 1.22 percent, respectively, for the second quarter of 2007.
Other highlights for the second quarter of 2008 included:
| -- Total assets increased $157.1 million, or 21.5 percent from the
same period a year ago. |
| -- Net loans increased $135.5 million, or 22.2 percent, over the
same period a year ago. |
| -- Total deposits increased $131.9 million, or 23.5 percent, over a year ago. |
| -- Net interest margin was 3.47 percent, compared with 4.69 percent
for the second quarter of 2007. |
| -- Efficiency ratio was 72.8 percent, compared 64.0 percent for the
second quarter of 2007. |
| -- Noninterest income was $1.5 million, compared with $3.4 million
for the second quarter of 2007. |
| -- Noninterest expense was $6.2 million, compared with $7.2 million
for the second quarter of 2007. |
| -- Asset Quality: |
| -- Recorded provision for loan losses of $4.9 million |
| -- Net charge off loans were $2.2 million |
| -- Total allowance for loan losses to total loan ratio improved to
1.46 percent |
| -- Total nonperforming loans to total assets of 3.00 percent |
“The results of the second quarter were
adversely affected by deteriorated asset quality, decreased net interest
margin and reduced gains on the sale of SBA loans,” said Benjamin Hong, president and chief executive officer.
“It’s been a very
challenging environment for the banking industry in general. Saehan has
initiated numerous preemptive measures to address the situation --
including increasing the allowance for loan losses during the second
quarter of 2008. In July 2008, the bank reduced its workforce by 9.7% --
representing savings on an annualized basis of approximately $1.3
million. The company is expected to return to profitability for the rest
of the year and for the full year 2009,” Hong
said.
Net interest income before provision for loan losses was $7.0 million in
the second quarter of 2008 compared with $7.9 million in the same period
a year ago. Net interest margin for the second quarter of 2008 was 3.47
percent compared with 4.69 percent in the second quarter a year earlier.
Net interest margin was adversely affected by the Federal Reserve’s
decision to aggressively lower the Federal Funds Rate during the first
half of the year and the increase in non-accrual loans in the second
quarter of the year.
Noninterest income in the second quarter of 2008 totaled $1.5 million,
compared with $3.4 million a year ago. The reduction was primarily
attributable to a $1.9 million decrease in gain on sale of loans,
partially offset by a $77,000 increase in service charges on deposit
accounts. Gain on sale of loans declined substantially as a result of
significantly lower SBA market activity and reduced sales premiums paid
on SBA loans sold to the secondary market.
Noninterest expense for the second quarter of 2008 was $6.2 million, a
decrease of $1.1 million from the second quarter last year. The decrease
in noninterest expense for the second quarter of 2008 was primarily
attributable to lower employee compensation expense, partially offset by
higher occupancy and equipment expenses. The efficiency ratio for the
second quarter of 2008 was 72.8 percent compared with 64.0 percent in
the second quarter of 2007. The recent 9.7% reduction in workforce is
expected to generate approximately $340,000 savings in salary and other
expenses during the second half of the year and approximately $1.3
million for 2009.
Nonperforming loans were $26.7 million at June 30, 2008 up $23.7 million
from $3.0 million at June 30, 2007. Nonperforming loans represented 3.00
percent of total assets at June 30, 2008. The provision for loan losses
was $4.9 million for the second quarter of 2008 compared with $306,000 a
year ago. The allowance for loan losses increased to $11.0 million at
June 30, 2008, compared to $6.2 million at June 30, 2007.
Total assets were $888.7 million as of June 30, 2008 -- representing an
increase of $157.8 million, or 21.5 percent, over the $731.6 million in
total assets reported on June 30, 2007. Total deposits as of June 30,
2008 increased $131.9 million, or 23.5 percent, to $692.7 million from
$560.8 million as of June 30, 2007.
Shareholders’ equity increased to $60.7
million at June 30, 2008 from $57.3 million at June 30, 2007.
Shareholders’ equity primarily increased as a
result of the company’s earnings and exercise
of stock options. Capital ratios continue to be well above the “Well-Capitalized” guidelines established by the regulatory agencies. The Leverage Ratio
was 9.61 percent, the Tier 1 Risk-based Capital Ratio was 9.98 percent
and the Total Risk-based Capital Ratio was 11.23 percent.
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 ten retail
branch offices, International Department, SBA Department and Financial
Services 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.”
| Saehan Bancorp |
| Condensed Balance Sheet |
| (Dollars in thousands) |
| |
|
|
|
|
|
|
|
|
|
30-Jun |
|
|
|
2008 |
|
|
|
2007 |
|
| Assets: |
|
|
|
|
|
|
Cash & due from banks - demand |
|
22,309 |
|
|
|
12,122 |
|
|
Due from banks-interest bearing |
|
1,022 |
|
|
|
5,283 |
|
|
Federal fund sold |
|
45,510 |
|
|
|
24,675 |
|
|
Securities available-for-sale |
|
46,415 |
|
|
|
53,721 |
|
|
Loans |
|
756,063 |
|
|
|
621,969 |
|
|
Less: Allowance for loan losses |
|
11,046 |
|
|
|
6,222 |
|
|
Net loans |
|
745,017 |
|
|
|
609,525 |
|
|
Loans held for sale |
|
1,102 |
|
|
|
3,521 |
|
|
Bank premises and equipment, net |
|
6,913 |
|
|
|
6,558 |
|
|
Other assets |
|
20,427 |
|
|
|
16,231 |
|
|
Total assets |
|
888,715 |
|
|
|
731,636 |
|
|
|
|
|
|
|
|
| Liabilities and stockholders' equity: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
|
142,181 |
|
|
|
122,735 |
|
|
Interest bearing demand and savings |
|
164,158 |
|
|
|
157,424 |
|
|
Time deposits |
|
386,373 |
|
|
|
280,651 |
|
|
Total deposits |
|
692,712 |
|
|
|
560,810 |
|
|
Other liabilities |
|
135,154 |
|
|
|
113,518 |
|
|
Total liabilities |
|
827,866 |
|
|
|
674,328 |
|
|
Total stockholders' equity |
|
60,849 |
|
|
|
57,308 |
|
|
Total liabilities and stockholders' equity |
|
888,715 |
|
|
|
731,636 |
|
|
Book value per share |
|
5.04 |
|
|
|
4.75 |
|
|
Period end shares outstanding |
|
12,053,454 |
|
|
|
12,053,139 |
|
|
Nonperforming loans |
|
26,702 |
|
|
|
3,003 |
|
|
|
|
|
|
|
|
|
Tier I leverage ratio |
|
9.61 |
% |
|
|
11.80 |
% |
|
Tier 1 risk-based capital ratio |
|
9.98 |
% |
|
|
11.51 |
% |
|
Total risk-based capital ratio |
|
11.23 |
% |
|
|
12.51 |
% |
| Saehan Bancorp |
| Condensed Income Statement and Comprehensive Income |
| (Dollars in thousands except per share data) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three |
|
|
For the six |
|
|
|
months ended |
|
|
months ended |
|
|
|
30-Jun |
|
|
30-Jun |
|
|
|
|
2008 |
|
|
|
|
2007 |
|
|
|
|
2008 |
|
|
|
|
2007 |
|
| Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
12,771 |
|
|
13,666 |
|
|
26,212 |
|
|
25,981 |
|
Interest on securities |
|
|
476 |
|
|
|
|
560 |
|
|
|
|
1,002 |
|
|
|
|
1,134 |
|
|
Interest on federal funds sold |
|
|
46 |
|
|
|
|
46 |
|
|
|
|
138 |
|
|
|
|
70 |
|
|
Other interest income |
|
|
91 |
|
|
|
|
10 |
|
|
|
|
192 |
|
|
|
|
20 |
|
|
Total interest income |
|
13,384 |
|
|
14,282 |
|
|
27,544 |
|
|
27,205 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposit |
|
5,190 |
|
|
5,008 |
|
|
10,926 |
|
|
9,871 |
|
Other |
|
1,206 |
|
|
1,401 |
|
|
2,498 |
|
|
2,223 |
|
Total interest expenses |
|
6,396 |
|
|
6,409 |
|
|
13,424 |
|
|
12,094 |
|
Net interest income before provision for loan losses |
|
6,988 |
|
|
7,873 |
|
|
14,120 |
|
|
15,111 |
|
Provision for loan lossses |
|
4,907 |
|
|
306 |
|
|
5,988 |
|
|
966 |
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
637 |
|
|
|
|
560 |
|
|
|
|
1,237 |
|
|
|
|
1,036 |
|
|
Gain on sale of loans |
|
|
271 |
|
|
|
|
2,135 |
|
|
|
|
465 |
|
|
|
|
3,119 |
|
|
Other operating income |
|
|
551 |
|
|
|
|
701 |
|
|
|
|
1,171 |
|
|
|
|
1,200 |
|
|
Total non-interest income |
|
1,459 |
|
|
3,396 |
|
|
2,873 |
|
|
5,355 |
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
3,329 |
|
|
4,143 |
|
|
6,681 |
|
|
7,949 |
|
Net occupancy and equipment expense |
|
1,285 |
|
|
984 |
|
|
2,437 |
|
|
1,926 |
|
Other operating expense |
|
1,539 |
|
|
2,085 |
|
|
2,996 |
|
|
3,753 |
|
Total non-interest expenses |
|
6,153 |
|
|
7,212 |
|
|
12,114 |
|
|
13,628 |
|
Income before income taxes |
|
(2,613 ) |
|
|
3,751 |
|
|
(1,109 ) |
|
|
5,872 |
|
Income taxes |
|
(1,004 ) |
|
|
1,622 |
|
|
(425 ) |
|
|
2,391 |
|
Income before extraordinary items |
|
(1,609 ) |
|
|
2,129 |
|
|
(684 ) |
|
|
3,481 |
|
Extraordinary items, net of taxes |
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
Net income |
|
(1,609 ) |
|
|
2,129 |
|
|
(684 ) |
|
|
3,481 |
|
Net income per share - |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ (0.13 ) |
|
|
$ 0.18 |
|
|
$ (0.06 ) |
|
|
$ 0.29 |
|
Diluted |
|
$ (0.13 ) |
|
|
$ 0.17 |
|
|
$ (0.06 ) |
|
|
$ 0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic average common shares |
|
|
|
|
|
|
|
|
|
|
|
|
outstanding |
|
12,053,594 |
|
12,003,107 |
|
12,053,595 |
|
11,990,091 |
|
Diluted average common shares |
|
|
|
|
|
|
|
|
|
|
|
|
outstanding |
|
12,066,580 |
|
12,175,260 |
|
12,066,316 |
|
12,232,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge offs |
|
|
2,197 |
|
|
|
|
- |
|
|
|
|
3,241 |
|
|
|
|
231 |
|
|
Recoveries |
|
|
25 |
|
|
|
|
5 |
|
|
|
|
50 |
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three |
|
|
For the six |
|
|
|
months ended |
|
|
months ended |
|
|
|
30-Jun |
|
|
30-Jun |
|
|
|
|
2008 |
|
|
|
|
2007 |
|
|
|
|
2008 |
|
|
|
|
2007 |
|
|
Key Operating Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
-0.77 |
% |
|
|
|
1.22 |
% |
|
|
|
-0.17 |
% |
|
|
|
1.03 |
% |
|
Return on average equity |
|
|
-10.23 |
% |
|
|
|
15.18 |
% |
|
|
|
-2.18 |
% |
|
|
|
12.95 |
% |
|
Yield on earning assets |
|
|
6.65 |
% |
|
|
|
8.51 |
% |
|
|
|
6.91 |
% |
|
|
|
8.44 |
% |
|
Cost on interest bearing liabilities |
|
|
4.14 |
% |
|
|
|
5.88 |
% |
|
|
|
4.26 |
% |
|
|
|
5.74 |
% |
|
Net interest margin |
|
|
3.47 |
% |
|
|
|
4.69 |
% |
|
|
|
3.54 |
% |
|
|
|
4.69 |
% |
|
Cost of funds |
|
|
3.38 |
% |
|
|
|
4.62 |
% |
|
|
|
3.56 |
% |
|
|
|
4.49 |
% |
|
Efficiency ratio |
|
|
72.84 |
% |
|
|
|
64.00 |
% |
|
|
|
71.29 |
% |
|
|
|
66.59 |
% |
Contact:
Saehan Bancorp
Daniel Kim
Senior Vice President & Chief Financial Officer
213-637-4802
or
Maier & Company, Inc.
Gary S. Maier, 310-442-9852 |
