LOS ANGELES, Nov. 12, 2003 (PRIMEZONE) -- Saehan Bancorp (OTCBB:SAEB), parent company of Saehan Bank, today reported net income of $1.2 million for the third quarter of 2003, up from $0.9 million for the third quarter of 2002. Third quarter 2003 diluted earnings per share increased 17% to $0.28 from $0.24 for the third quarter of 2002. Return on average equity for the third quarter of 2003 was 16.48% and return on assets was 1.76%, compared to 14.33% and 1.42%, respectively, in the third quarter of 2002.
"Outstanding credit quality and our ability to capitalize on even slight opportunities continue to be important factors in our earnings improvement," said Joohak Kim, President and CEO. "We are seeing encouraging results on almost every front, including higher SBA loan sales, average core deposit balances and loan production. We experience minimal gross charge-offs with a high loan growth rate, a reflection of our unique ability to manage credit risk rather than avoid it."
Income
Net interest income before provision for loan losses was $2.5 million in the third quarter of 2003 compared to $2.6 million in the third quarter of 2002. The third quarter of 2003 net interest margin was 3.79%, down from 4.34% in the third quarter of 2002. Declining interest rates have primarily resulted in an operating environment with declining net interest margins.
Noninterest income in the third quarter of 2003 totaled $2.0 million, compared to $1.8 million in the third quarter of 2002. In comparison to the third quarter of 2003, the third quarter of 2002 includes noninterest income generated from Prime Business Credit, Inc., a Company's subsidiary sold on September 30, 2002. In addition, the third quarter of 2003 benefited from gain on sale of SBA loans offset in part by lower service charges on deposit accounts.
Expenses
Noninterest expense for the third quarter of 2003 was $2.5 million, a decrease of $0.5 million from the third quarter of 2002. In addition to the subsequent cost reduction from the sale of Prime Business Credit, Inc., the decrease is also due to lower employee salaries and benefits and offset in part by higher occupancy and equipment expenses. The efficiency ratio for the third quarter of 2003 was 55.3%, compared to the third quarter of 2002 at 66.9%.
The provision for loan losses was $40 thousand for the third quarter of 2003, increased from $28 thousand for the third quarter of 2002.
Credit Quality
Continuing the Company's established trend of strong credit quality, NPLs decreased to $1.9 million or 0.90% of total gross loans at September 30, 2003. This is down from $2.2 million or 1.20% of gross loans at September 30, 2002. The Company's aggressive management of charge-offs and NPLs allowed it to slightly reduce the allowance for loan losses to $3.43 million or 1.63% of total gross loans and 181.6% of NPLs at September 30, 2003. This compared to $3.44 million or 1.85% of total gross loans and 153.2% at September 30, 2002.
Assets and Deposits
Total assets were $280.0 million as of September 30, 2003. This represents an increase of $21.8 million, or 8.46%, over the $258.2 million in total assets reported on September 30, 2002. Total deposits increased to $247.7 million as of September 30, 2003. This is up $17.7 million, or 7.70%, from $230.0 million as of September 30, 2002.
Shareholders' Equity
Shareholders' equity totaled $30.7 million at September 30, 2003, an increase of $4.7 million compared to $26.0 million at September 30, 2002. Shareholders' equity primarily increased as a result of the Company's earnings and exercises of stock options and warrants. Both Saehan Bancorp and Saehan Bank's capital ratios were in excess of regulatory guidelines for classification as a well-capitalized depository institution as of September 30, 2003.
About Saehan Bancorp
Saehan Bankcorp is a bank holding company with headquarters in Los Angeles, California. Through our wholly-owned bank subsidiary, Saehan Bank, we offer a comprehensive range of financial solutions to meet the financial needs of the Korean-American community in Los Angeles.
Saehan Bankcorp is committed to satisfying customers and creating shareholder value. Our six retail branch offices, International Department and SBA Department of Saehan Bank focus on fulfilling these commitments to customers and shareholders.
Saehan Bankcorp is traded on the OTC Bulletin Board under the ticker symbol "SAEB.OB."
Safe Harbor
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)
September 30
2003 2002
Assets:
Cash & due from banks-demand 13,765 12,649
Due from banks-interest bearing 1,715 396
Federal fund sold 17,815 21,230
Securities available-for-sale 33,527 33,465
Loans 210,488 185,741
Less: Allowance for loan losses 3,430 3,435
Net loans 207,058 182,306
Loans held for sale -- 2,608
Bank premises and equipment, net 1,814 2,008
Other assets 4,336 3,533
Total assets 280,030 258,195
Liabilities and stockholders' equity:
Deposits:
Noninterest bearing demand 77,593 72,244
Interest bearing demand and
savings 95,769 75,077
Time deposits 74,344 82,665
Total deposits 247,706 229,986
Other liabilities 1,644 2,242
Total liabilities 249,350 232,228
Total stockholders' equity 30,680 25,967
Total liabilities and
stockholders' equity 280,030 258,195
Book value per share $ 7.54 $ 7.47
Period end shares
outstanding 4,057,398 3,477,873
Nonperforming loans 1,889 2,241
Saehan Bancorp
Condensed Income Statement and Comprehensive Income
(Dollars in thousands except per share data)
For the three For the nine
months ended months ended
September 30 September 30
---------------------- ---------------------
2003 2002 2003 2002
---------------------- ---------------------
Interest income:
Interest and fees on
loans 3,045 3,387 9,035 10,073
Interest on securities 280 361 963 1,211
Interest on federal
funds sold 43 101 155 273
Other interest income 14 -- 24 1
Total interest income 3,382 3,849 10,177 11,558
Interest expense:
Deposit 906 1,129 2,837 3,302
Other -- 106 -- 406
Total interest expenses 906 1,235 2,837 3,708
Net interest income
before provision for
loan losses 2,476 2,614 7,340 7,850
Provision for loan
losses 40 28 238 1,025
Non-interest income:
Service charges on
deposit accounts 581 692 1,771 2,184
Gain on sale of loans 1,007 220 1,661 989
Gain on sale of
investment securities -- (8) (32) (2)
Other operating income 390 915 1,122 3,260
Total non-interest income 1,978 1,819 4,522 6,431
Non-interest expense:
Salaries and employee
benefits 1,389 1,506 3,983 4,350
Net occupancy and
equipment expense 359 350 1,043 974
Other operating
expenses 717 1,111 2,298 3,123
Total non-interest
expenses 2,465 2,967 7,324 8,447
Income before
income taxes 1,949 1,438 4,300 4,809
Income taxes 731 564 1,768 2,066
Minority interest -- 150 -- 331
Income before
extraordinary items 1,218 724 2,532 2,412
Extraordinary items,
net of taxes -- 186 -- 186
Net income 1,218 910 2,532 2,598
Net income per share -
Basic $ 0.32 $ 0.29 $ 0.67 $ 0.79
Diluted $ 0.28 $ 0.24 $ 0.59 $ 0.66
Basic average
common shares
outstanding 3,853,568 3,122,382 3,803,203 3,285,531
Diluted average
common shares
outstanding 4,300,482 3,782,230 4,280,724 3,947,187
Charge offs 61 126 344 892
Recoveries 21 264 107 333
For the three For the nine
months ended months ended
September 30 September 30
---------------------- ---------------------
2003 2002 2003 2002
---------------------- ---------------------
Key Operating Ratios:
Return on average assets 1.76% 1.42% 1.20% 1.24%
Return on average equity 16.48% 14.33% 11.94% 13.99%
Earning assets yield 5.17% 6.39% 5.08% 4.05%
Interest rate on
interest bearing
liabilities 2.15% 3.05% 2.26% 2.95%
Net interest margin 3.79% 4.34% 3.67% 4.05%
Cost of funds 2.15% 3.05% 2.26% 2.95%
Efficiency ratio 55.34% 66.93% 61.74% 59.15%
Average stockholders'
equity to average
total assets 10.69% 9.91% 10.07% 8.83%