Saehan Bancorp Reports Fourth Quarter and Year-End Results

LOS ANGELES--(EON: Enhanced Online News)--Saehan Bancorp (OTCBB:SAEB) today announced preliminary financial results for its fourth quarter and year ended December 31, 2011, reflecting continued improvement in asset quality.

“Results for 2011 reflect continued progress in efforts to improve the bank’s financial position – including reducing nonperforming assets and generating modest earnings on our road to recovery. We are encouraged by developments during the past year and the opportunities we envision for 2012 and beyond”

The company reported a net loss of $6,000, or $0.0005 per share for the fourth quarter of 2011 compared with a net loss of $9.9 million, or $0.05 per share, in the same period a year ago. For the twelve-month period, Saehan Bancorp reported net income of $1.9 million, or $0.01 per diluted share, compared with a net loss of $21.6 million, or $0.15 per diluted share, for 2010.

Additional highlights for the year and fourth quarter of 2011 include:

• Total assets at December 31, 2011 were $577.1 million compared with $590.4 million a year ago.
• Net loans were $362.9 million at December 31, 2011 compared with $438.4 million last year.
• Total deposits at December 31, 2011 were $488.8 million compared with $492.0 million at December 31, 2010.
• Net interest margin for 2011 was 2.98 percent compared with 2.02 percent reported for 2010.
• Nonperforming loans at December 31, 2011 were $18.8 million compared with $41.5 million at December 31, 2010.
• Allowance for loan losses was 4.75 percent of net loans at December 31, 2011 compared with 5.57 percent at December 31, 2010.

“Results for 2011 reflect continued progress in efforts to improve the bank’s financial position – including reducing nonperforming assets and generating modest earnings on our road to recovery. We are encouraged by developments during the past year and the opportunities we envision for 2012 and beyond," said Dong Il Kim, president and chief executive officer.

Net interest income before provision for loan losses was $4.2 million in the fourth quarter of 2011 compared with $2.3 million in the fourth quarter of 2010. For the fourth quarter of 2011, net interest margin was 3.00 percent compared with 1.46 percent in the fourth quarter of 2010. For the full year, net interest income and the net interest margin before provision for loan losses were $16.8 million and 2.98 percent, respectively, compared with $16.9 million and 2.02 percent, respectively, for 2010. Interest expense for 2010 included the $2.0 million interest payment made to early terminate $80 million of brokered deposits.

Noninterest income, excluding loss on sale of OREOs in the fourth quarter of 2011, totaled $1.2 million compared with $1.0 million in the fourth quarter of 2010. For the full year, noninterest income, excluding loss on sale of OREOs, was $6.6 million compared with $4.3 million reported in 2010. The increase in noninterest income was attributable to the $2.8 million increase in gain on sale of SBA loans.

Noninterest expense for the fourth quarter of 2011 was $4.9 million, a decrease of $127,000 from the fourth quarter of 2010. For the full year, noninterest expense was $21.7 million compared with $23.8 million in 2010. The decrease in noninterest expense for the fourth quarter and full year of 2011 is primarily attributable to decreases in occupancy expense, FDIC assessment fees and OREO related expenses.

The efficiency ratio for the fourth quarter of 2011 was 100.1 percent compared with 330.9 percent in the fourth quarter of 2010. The efficiency ratio for the full year was 92.4 percent compared with 156.0 percent for 2010.

Nonperforming loans and OREO were $23.8 million at December 31, 2011 compared with $48.6 million at December 31, 2010. Nonperforming assets represented 4.1 percent of total assets at December 31, 2011 compared with 8.2 percent at December 31, 2010. A loan loss provision was not necessary for the fourth quarter and full year of 2011.

Shareholders’ equity totaled $58.6 million at December 31, 2011 compared with $44.7 million at December 31, 2010. Shareholders’ equity primarily increased as a result of a $12.0 million common stock equity placement in September 2011 and bank earnings. Saehan’s leverage Ratio was 13.7 percent, the Tier 1 Risk-based Capital Ratio was 18.9 percent and the Total Risk-based Capital Ratio was 20.3 percent at December 31, 2011.

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, 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.”

Saehan Bancorp
Condensed Balance Sheet
(Dollars in thousands)
		31-Dec
		2011		2010
Assets:
	Cash & due from banks - demand	21,645		9,664
	Due from banks-interest bearing	78,844		34,430
	Federal fund sold	70,565		26,320
	Securities available-for-sale	23,151		46,367
	Loans	380,107		451,622
	Less: Allowance for loan losses	17,221		26,185
	Net loans	362,886		425,437
	Loans held for sale	2,837		13,000
	Bank premises and equipment, net	2,100		2,914
	Other real estate owned	5,009		7,083
	Direct & indirect investments in real estate	600		1,932
	Other assets	9,430		10,295
	Total assets	577,067		590,441
Liabilities and stockholders' equity:
	Deposits:
	Noninterest bearing demand	137,518		119,995
	Interest bearing demand and savings	148,229		121,655
	Time deposits	203,072		250,358
	Total deposits	488,819		492,008
	Other borrowed money	5,000		29,702
	Junior subordinated debenture	21,765		21,374
	Other liabilities	2,930		2,671
	Total liabilities	518,514		545,755
	Total stockholders' equity	58,553		44,686
	Total liabilities and
	stockholders' equity	577,067		590,441
	Book value per share	0.25		0.24
	Period end shares outstanding	237,197,874		189,097,874
	Nonperforming loans	18,805		41,475
	Tier I leverage ratio	13.66	%	9.33	%
	Tier 1 risk-based capital ratio	18.85	%	12.10	%
	Total risk-based capital ratio	20.28	%	13.40	%

Saehan Bancorp
Condensed Income Statement and Comprehensive Income
(Dollars in thousands except per share data)
		For the three						For the twelve
		months ended						months ended
		31-Dec						31-Dec
			2011			2010			2011			2010
Interest income:
	Interest and fees on loans		5,532			6,966			23,951			29,146
	Interest on securities		146			328			783			1,445
	Interest on federal funds sold		37			24			126			96
	Other interest income		100			68			312			145
	Total interest income		5,815			7,386			25,172			30,832
	Interest expense:
	Deposit		1,479			4,614			6,891			12,039
	Other		166			429			1,436			1,929
	Total interest expenses		1,645			5,043			8,327			13,968
	Net interest income before
	provision for loan losses		4,170			2,343			16,845			16,865
	Provision for loan losses		-			6,414			-			12,909
	Non-interest income:
	Service charges on deposit accounts		442			518			1,916			2,051
	Gain on sale of loans		300			34			2,832			34
	Gain on sale of investment securities		-			-			3			51
	Gain (loss) on sales of OREO		(489	)		(1,842	)		74			(5,907	)
	Other operating income		460			463			1,864			2,162
	Total non-interest income		713			(827	)		6,689			(1,609	)
	Non-interest expense:
	Salaries and employee benefits		2,376			2,204			9,004			8,567
	Net occupancy and equipment expense		1,101			1,222			4,547			4,923
	Other operating expense		1,413			1,591			8,186			10,301
	Total non-interest expenses		4,890			5,017			21,737			23,791
	Income before income taxes		(7	)		(9,915	)		1,797			(21,445	)
	Income taxes		(1	)		(5	)		(110	)		(13	)
	Income before extraordinary items		(6	)		(9,910	)		1,907			(21,432	)
	Extraordinary items, net of taxes		-			-			-			-
	Net income		(6	)		(9,910	)		1,907			(21,432	)
	Net income per share -
	Basic	$	(0.0005	)	$	(0.05	)	$	0.01		$	(0.15	)
	Diluted	$	(0.0005	)	$	(0.05	)	$	0.01		$	(0.15	)
	Basic average common shares
	outstanding		237,197,874			189,097,874			201,353,490			146,898,355
	Diluted average common shares
	outstanding		237,259,177			189,097,874			201,411,164			146,898,355
	Charge offs		5,401			10,772			14,332			30,358
	Recoveries		363			304			5,368			1,597
		For the three						For the twelve
		months ended						months ended
		31-Dec						31-Dec
			2011			2010			2011			2010
	Key Operating Ratios:
	Return on average assets		0.00	%		-6.27	%		0.34	%		-3.28	%
	Return on average equity		-0.04	%		-72.93	%		3.90	%		-44.10	%
	Earning assets yield		4.18	%		4.61	%		4.46	%		4.84	%
	Interest rate on interest bearing
	liabilities		1.96	%		3.69	%		2.19	%		2.93	%
	Net interest margin		3.00	%		1.46	%		2.98	%		2.02	%
	Cost of funds		1.42	%		3.02	%		1.62	%		2.33	%
	Efficiency ratio		100.14	%		330.94	%		92.36	%		155.95	%
	Average stockholders' equity to
	average total assets		10.36	%		8.59	%		8.61	%		7.14	%