SAEHAN BANCORP REPORTS FOURTH QUARTER AND YEAR-END RESULTS
LOS ANGELES, CALIFORNIA – March 26, 2009 -- Saehan Bancorp (OTCBB:SAEB) today announced financial results for its fourth quarter and year ended December 31, 2008, reflecting the impact of current economic conditions.
The company reported a net loss of $11.4 million, or $0.85 per share for the fourth quarter of 2008 compared with net income of $1.4 million, or $0.11 per diluted share, in the same period a year ago. For the full year, Saehan Bancorp reported a net loss of $12.9 million, or $1.04 per share, compared with net income of $6.4 million, or $0.53 per diluted share, for 2007.
Additional highlights at December 31, 2008 and for the fourth quarter of 2008 include:
- Total assets at December 31, 2008 increased 2.3 percent to $842.7 million from $823.6 million a year ago.
- Net loans increased 3.2 percent to $709.6 million at December 31, 2008 from $687.6 million last year.
- Total deposits at December 31, 2008 decreased 1.0 percent to $633.5 million from $639.7 million at December 31, 2007.
- Net interest margin for the fourth quarter of 2008 decreased to 2.76 percent from the 4.05 percent reported in the fourth quarter of 2007.
- Efficiency for the fourth quarter of 2008 was 93.5 percent compared with 54.2 percent in the fourth quarter of 2007.
- Nonperforming loans at December 31, 2008 increased to $42.0 million from $9.7 million at December 31, 2007.
- Allowance for loan losses increased to 3.03 percent of total loans at December 31, 2008 compared to 1.11 percent at December 31, 2007.
“While the bank experienced a modest increase in total assets and net loan activity in the fourth quarter, the current economic environment for the U.S. banking industry remains challenging. We continue to focus on strengthening key measurements such as the bank’s capital position, building reserves for loan losses, maintaining ample liquidity, and controlling non-interest expenses.” said Chung Hoon Youk, president and chief executive officer.
Net interest income before provision for loan losses was $5.5 million in the fourth quarter of 2008 compared with $7.8 million in the fourth quarter of 2007. For the fourth quarter of 2008, net interest margin was 2.76 percent compared with 4.05 percent in the fourth quarter of 2007. For the full year, net interest income and the net interest margin before provision for loan losses were $27.1 million and 3.38 percent, respectively, compared with $30.7 million and 4.41 percent, respectively, for 2007. The decrease in the net interest margin from the same quarter a year ago was primarily a result of decreases in Fed funds rate and a lag in the re-pricing of certain deposit products, such as certificates of deposits.
Noninterest income in the fourth quarter of 2008 totaled $865,000 million compared with $1.8 million in the fourth quarter of 2007. For the full year, noninterest income was $5.3 million, down 39.9 percent from $8.8 million reported in 2007. The decrease in noninterest income is primarily attributable to the $3.5 million decrease in gain on sale of loans for 2008.
Noninterest expense for the fourth quarter of 2008 was $6.0 million, an increase of $812,000 from the fourth quarter of 2007. For the full year, noninterest expense was $24.0 million compared with $25.0 million in 2007. The decrease in noninterest expense for the full year of 2008 is primarily attributable to lower employee salaries and a reduction of the workforce.
The efficiency ratio for the fourth quarter of 2008 was 93.5 percent compared with 54.2 percent in the fourth quarter of 2007. For the year 2008, the efficiency ratio was 74.3 percent compared with 63.2 percent for 2007.
Nonperforming loans and OREO were $46.4 million at December 31, 2008, compared with $9.7 million at December 31, 2007. Nonperforming assets represented 5.51 percent of total assets at December 31, 2008. The provision for loan losses was $19.4 million for the fourth quarter of 2008 compared with $2.2 million for the year ago quarter. For the year 2008, the provision for loan losses was $29.8 million, compared with the provision for loan losses of $4.0 million for 2007.
Shareholders’ equity totaled $62.8 million at December 31, 2008 -- an increase of $1.4 million compared with $61.4 million at December 31, 2007. Shareholders’ equity primarily increased as a result of a capital offering of $13.9 million in November 2008, partially offset by net loss of $12.9 million. Capital ratios continue to be above the “Well-Capitalized” guidelines established by the regulatory agencies. The Leverage Ratio was 9.9 percent, the Tier 1 Risk-based Capital Ratio was 10.5 percent and the Total Risk-based Capital Ratio was 11.8 percent at December 31, 2008.
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) |
|
|
|
|
|
|
|
|
|
|
31-Dec |
|
|
|
|
2008 |
|
2007 |
|
| Assets: |
|
|
|
|
|
|
Cash & due from banks - demand |
|
15,218 |
|
14,427 |
|
|
Due from banks-interest bearing |
|
1,022 |
|
4,899 |
|
|
Federal fund sold |
|
32,792 |
|
37,430 |
|
|
Securities available-for-sale |
|
44,399 |
|
52,681 |
|
|
Loans |
|
731,709 |
|
695,263 |
|
|
Less: Allowance for loan losses |
|
22,157 |
|
7,704 |
|
|
Net loans |
|
709,552 |
|
687,559 |
|
|
Loans held for sale |
|
729 |
|
761 |
|
|
Bank premises and equipment, net |
|
6,044 |
|
6,800 |
|
|
Other assets |
|
32,895 |
|
19,081 |
|
|
Total assets |
|
842,651 |
|
823,638 |
|
|
|
|
|
|
|
|
| Liabilities and stockholders' equity: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
|
113,212 |
|
119,815 |
|
|
Interest bearing demand and savings |
|
135,718 |
|
156,669 |
|
|
Time deposits |
|
384,521 |
|
363,174 |
|
|
Total deposits |
|
633,451 |
|
639,658 |
|
|
Other borrowed money |
|
121,000 |
|
96,500 |
|
|
Junior subordinated debenture |
|
20,619 |
|
20,619 |
|
|
Other liabilities |
|
4,735 |
|
5,453 |
|
|
Total liabilities |
|
779,805 |
|
762,230 |
|
|
Total stockholders' equity |
|
62,846 |
|
61,408 |
|
|
Total liabilities and |
|
|
|
|
|
|
stockholders' equity |
|
842,651 |
|
823,638 |
|
|
Book value per share |
|
3.92 |
|
5.50 |
|
|
Period end shares outstanding |
|
16,032,429 |
|
11,160,737 |
|
|
Nonperforming loans |
|
42,012 |
|
9,652 |
|
|
|
|
|
|
|
|
|
Tier I leverage ratio |
|
9.87% |
|
10.21% |
|
|
Tier 1 risk-based capital ratio |
|
10.51% |
|
11.00% |
|
|
Total risk-based captal ratio |
|
11.78% |
|
12.08% |
|
|
|
|
|
|
|
|
Saehan Bancorp |
Condensed Income Statement and Comprehensive Income |
(Dollars in thousands except per share data) |
|
|
|
|
|
|
|
|
|
For the three |
|
For the tweleve |
|
|
months ended |
|
months ended |
|
|
31-Dec |
|
31-Dec |
|
|
2008 |
2007 |
|
2008 |
2007 |
| Interest income: |
|
|
|
|
|
|
Interest and fees on loans |
10,728 |
14,549 |
|
49,824 |
54,430 |
|
Interest on securities |
449 |
540 |
|
1,923 |
2,421 |
|
Interest on federal funds sold |
8 |
39 |
|
226 |
212 |
|
Other interest income |
69 |
28 |
|
348 |
66 |
|
Total interest income |
11,254 |
15,156 |
|
52,321 |
57,129 |
|
Interest expense: |
|
|
|
|
|
|
Deposit |
4,496 |
5,605 |
|
20,289 |
21,068 |
|
Other |
1,244 |
1,789 |
|
4,938 |
5,320 |
|
Total interest expenses |
5,740 |
7,394 |
|
25,227 |
26,388 |
|
Net interest income before |
|
|
|
|
|
|
provision for loan lossses |
5,514 |
7,762 |
|
27,094 |
30,741 |
|
Provision for loan lossses |
19,446 |
2,206 |
|
29,786 |
3,983 |
|
Non-interest income: |
|
|
|
|
|
|
Service charges on deposit accounts |
635 |
623 |
|
2,547 |
2,337 |
|
Gain on sale of loans |
17 |
439 |
|
723 |
4,140 |
|
Gain on sale of investment securities |
- |
- |
|
- |
- |
|
Other operating income |
213 |
689 |
|
1,989 |
2,279 |
|
Total non-interest income |
865 |
1,751 |
|
5,259 |
8,756 |
|
Non-interest expense: |
|
|
|
|
|
|
Salaries and employee benefits |
2,999 |
2,697 |
|
12,273 |
14,368 |
|
Net occupancy and equipment expense |
1,298 |
1,185 |
|
4,974 |
4,225 |
|
Other operating expense |
1,669 |
1,272 |
|
6,802 |
6,357 |
|
Total non-interest expenses |
5,966 |
5,154 |
|
24,049 |
24,950 |
|
Income before income taxes |
(19,033) |
2,153 |
|
(21,482) |
10,564 |
|
Income taxes |
(7,597) |
784 |
|
(8,597) |
4,164 |
|
Income before extraordianry items |
(11,435) |
1,369 |
|
(2,885) |
6,400 |
|
Extraordinary items, net of taxes |
- |
- |
|
- |
- |
|
Net income |
(11,435) |
1,369 |
|
(12,885) |
6,400 |
|
Net income per share - |
|
|
|
|
|
|
Basic |
$ (0.85) |
$ 0.11 |
|
$ (1.04) |
$ 0.53 |
|
Diluted |
$ (0.85) |
$ 0.11 |
|
$ (1.04) |
$ 0.53 |
|
|
|
|
|
|
|
|
Basic average common shares |
|
|
|
|
|
|
outstanding |
13,437,445 |
12,053,421 |
|
12,401,413 |
12,021,977 |
|
Diluted average common shares |
|
|
|
|
|
|
outstanding |
13,437,445 |
12,070,954 |
|
12,401,413 |
12,125,112 |
|
|
|
|
|
|
|
|
Charge offs |
8,512 |
997 |
|
16,264 |
1,228 |
|
Recoveries |
333 |
(3) |
|
386 |
16 |
|
|
|
|
|
|
|
|
|
For the three |
|
For the tweleve |
|
|
months ended |
|
months ended |
|
|
31-Dec |
|
31-Dec |
|
|
2008 |
2007 |
|
2008 |
2007 |
|
Key Operating Ratios: |
|
|
|
|
|
|
Return on average assets |
-5.47% |
0.69% |
|
-1.54% |
0.89% |
|
Return on average equity |
-68.56% |
8.96% |
|
-20.32% |
11.26% |
|
Earning assets yield |
5.63% |
7.90% |
|
6.52% |
8.20% |
|
Interest rate on interest bearing |
|
|
|
|
|
|
liabilities |
3.61% |
4.87% |
|
2.15% |
4.91% |
|
Net interest margin |
2.76% |
4.05% |
|
3.38% |
4.41% |
|
Cost of funds |
3.01% |
4.06% |
|
3.29% |
4.01% |
|
Efficiency ratio |
93.52% |
54.18% |
|
74.33% |
63.17% |
|
Average stockholders' equity to |
|
|
|
|
|
|
average total assets |
7.98% |
7.66% |
|
7.58% |
7.86% |
Contacts: Daniel Kim
Senior Vice President & Chief Financial Officer
Saehan Bancorp
(213) 637-4802
or
Gary S. Maier
Maier & Company, Inc.
(310) 442-9852 |
