Saehan Bancorp Reports Fourth Quarter and Year-End Results

LOS ANGELES--(BUSINESS WIRE)--Saehan Bancorp (OTCBB:SAEB) today announced preliminary financial results for its fourth quarter and year ended December 31, 2012, reflecting continued improvement in asset quality.

“Results for 2012 reflect continued progress in efforts to reduce nonperforming assets and generating modest earnings on our road to recovery. We are in the process of implementing various initiatives to enhance operating results and look forward to further improvements in 2013”

The company reported net income of $18,000, or $0.0001 per share for the fourth quarter of 2012 compared with a net loss of $6,000, or $0.0005 per share, in the same period a year ago. For the twelve-month period, Saehan Bancorp reported net income of $174,000, or $0.001 per diluted share, compared with $1.9 million, or $0.01 per diluted share, for 2011.

Additional highlights for the year and fourth quarter of 2012 include:

• Total assets at December 31, 2012 were $602.6 million compared with $577.1 million a year ago.
• Net loans were $348.1 million at December 31, 2012 compared with $362.9 million last year.
• Total deposits at December 31, 2012 were $519.0 million compared with $488.8 million at December 31, 2011.
• Net interest margin for 2012 was 2.53 percent compared with 2.98 percent reported for 2011.
• Nonperforming loans at December 31, 2012 were $4.7 million compared with $18.8 million at December 31, 2011.
• Allowance for loan losses was 3.88 percent of total loans at December 31, 2012 compared with 4.75 percent at December 31, 2011.

“Results for 2012 reflect continued progress in efforts to reduce nonperforming assets and generating modest earnings on our road to recovery. We are in the process of implementing various initiatives to enhance operating results and look forward to further improvements in 2013," said Dong Il Kim, president and chief executive officer.

Net interest income before provision for loan losses was $3.6 million in the fourth quarter of 2012 compared with $4.2 million in the fourth quarter of 2011. For the fourth quarter of 2012, net interest margin was 2.43 percent compared with 3.00 percent in the same quarter a year earlier. For the full year, net interest income and the net interest margin before provision for loan losses were $15.1 million and 2.53 percent, respectively, compared with $16.8 million and 2.98 percent, respectively, for 2011.

For the fourth quarter of 2012, noninterest income totaled $1.8 million compared with $713,000 in the fourth quarter of 2011. For the full year, noninterest income was $6.5 million compared with $6.7 million reported in 2011. The increase in noninterest income during the fourth quarter of 2012 was attributable to a $576,000 payment received in a legal settlement.

Noninterest expense for the fourth quarter of 2012 was $5.4 million, an increase of $488,000 from the fourth quarter of 2011. For the full year, noninterest expense was $21.4 million compared with $21.7 million in 2011. The decrease in noninterest expense for the full year of 2012 was primarily attributable to decreases in occupancy expense, FDIC assessment fees and loan related expenses.

The efficiency ratio for the fourth quarter of 2012 was 99.6 percent compared with 100.1 percent in the fourth quarter of 2011. The efficiency ratio for the full year was 99.2 percent compared with 92.4 percent for 2011.

Nonperforming loans and OREO were $7.6 million at December 31, 2012 compared with $23.8 million at December 31, 2011. Nonperforming assets represented 1.3 percent of total assets at December 31, 2012 compared with 4.1 percent at December 31, 2011. A loan loss provision was not necessary for the fourth quarter and full year of 2012.

Shareholders’ equity totaled $58.5 million at December 31, 2012 compared with $58.6 million at December 31, 2011. Saehan’s leverage Ratio was 12.8 percent, the Tier 1 Risk-based Capital Ratio was 20.9 percent and the Total Risk-based Capital Ratio was 22.4 percent at December 31, 2012.

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
		2012		2011
Assets:
	Cash & due from banks - demand	16,394		21,645
	Due from banks-interest bearing	180,934		78,844
	Federal fund sold	6,400		70,565
	Securities available-for-sale	35,796		23,151
	Loans	361,609		380,107
	Less: Allowance for loan losses	13,507		17,221
	Net loans	348,102		362,886
	Loans held for sale	1,788		2,837
	Bank premises and equipment, net	1,666		2,100
	Other real estate owned	2,899		5,009
	Direct & indirect investments in real estate	-		600
	Other assets	8,668		9,430
	Total assets	602,647		577,067
Liabilities and stockholders' equity:
	Deposits:
	Noninterest bearing demand	148,466		137,518
	Interest bearing demand and savings	190,204		148,229
	Time deposits	180,352		203,072
	Total deposits	519,022		488,819
	Other borrowed money	-		5,000
	Junior subordinated debenture	22,189		21,765
	Other liabilities	2,964		2,930
	Total liabilities	544,175		518,514
	Total stockholders' equity	58,472		58,553
	Total liabilities and
	stockholders' equity	602,647		577,067
	Book value per share	0.25		0.25
	Period end shares outstanding	237,197,874		237,197,874
	Nonperforming loans	4,651		18,805
	Tier I leverage ratio	12.84	%	13.66	%
	Tier 1 risk-based capital ratio	20.94	%	18.85	%
	Total risk-based capital ratio	22.37	%	20.28	%

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
			2012			2011			2012			2011
Interest income:
	Interest and fees on loans		4,759			5,532			20,129			23,951
	Interest on securities		81			146			488			783
	Interest on federal funds sold		13			37			88			126
	Other interest income		194			100			620			312
	Total interest income		5,047			5,815			21,325			25,172
	Interest expense:
	Deposit		1,335			1,479			5,675			6,891
	Other		101			166			588			1,436
	Total interest expenses		1,436			1,645			6,263			8,327
	Net interest income before
	provision for loan losses		3,611			4,170			15,062			16,845
	Provision for loan losses		-			-			-			-
	Non-interest income:
	Service charges on deposit accounts		487			442			1,723			1,916
	Gain on sale of loans		371			300			2,254			2,832
	Gain on sale of investment securities		-			-			886			3
	Gain (loss) on sales of OREO		(24	)		(489	)		(811	)		74
	Other operating income		953			460			2,467			1,864
	Total non-interest income		1,787			713			6,519			6,689
	Non-interest expense:
	Salaries and employee benefits		2,845			2,376			10,131			9,004
	Net occupancy and equipment expense		982			1,101			3,938			4,547
	Other operating expense		1,551			1,413			7,335			8,186
	Total non-interest expenses		5,378			4,890			21,404			21,737
	Income before income taxes		20			(7	)		177			1,797
	Income taxes		2			(1	)		3			(110	)
	Income before extraordinary items		18			(6	)		174			1,907
	Extraordinary items, net of taxes		-			-			-			-
	Net income		18			(6	)		174			1,907
	Net income per share -
	Basic	$	0.0001		$	(0.0005	)	$	0.001		$	0.01
	Diluted	$	0.0001		$	(0.0005	)	$	0.001		$	0.01
	Basic average common shares
	outstanding		237,197,874			237,197,874			237,197,874			201,353,490
	Diluted average common shares
	outstanding		237,225,506			237,259,177			237,255,333			201,411,164
	Charge offs		962			5,401			5,756			14,332
	Recoveries		490			363			2,042			5,368

	For the three				For the twelve
	months ended				months ended
	31-Dec				31-Dec
	2012		2011		2012		2011
Key Operating Ratios:
Return on average assets	0.00	%	0.00	%	0.03	%	0.34	%
Return on average equity	0.03	%	-0.04	%	0.30	%	3.90	%
Earning assets yield	3.37	%	4.18	%	3.58	%	4.46	%
Interest rate on interest bearing
liabilities	0.96	%	1.96	%	1.59	%	2.19	%
Net interest margin	2.43	%	3.00	%	2.53	%	2.98	%
Cost of funds	1.05	%	1.42	%	1.16	%	1.62	%
Efficiency ratio	99.63	%	100.14	%	99.18	%	92.36	%
Average stockholders' equity to
average total assets	9.54	%	10.36	%	9.62	%	8.61	%