Saehan Bancorp Reports Second Quarter and Six-Month Results

LOS ANGELES--([ BUSINESS WIRE ])--Saehan Bancorp (OTCBB:SAEB) today reported results for its second quarter ended June 30, 2011, reflecting improved asset quality and profitability for the full six-month period.

Saehan reported net income of $368,000, or $0.002 per share, for the second quarter of 2011 compared with a net loss of $3.1 million, or $0.02 per share, a year ago. The return on average equity for the second quarter of 2011 was 3.22 percent and the return on average assets was 0.26 percent compared with -20.69 percent and -1.91 percent, respectively, for the second quarter of 2010.

For the six-month period, Saehan reported net income of $1.2 million, or $0.006 per share for the six months ended June 30, 2011 compared a net loss of $4.0 million, or $0.09 per share for the same period a year ago.

Other highlights for the second quarter of 2011 included:

Total assets were $546.7 million compared with $677.4 million in the same period a year ago, reflecting a strategic decision to improve the banka�s Tier One Leverage Ratio.
Net loans were $377.7 million compared with$487.1 million in the same period a year ago.
Total deposits were $471.1 million compared with $562.7 million a year earlier.
Net interest margin was 2.91 percent compared with 3.13 percent for the second quarter of 2010.
An improved efficiency ratio of 94.0 percent compared with 173.4 percent for the second quarter a year earlier.
The ratio of nonperforming loans to total loans was 6.2 percent compared with 8.9 percent at June 30, 2010.
Noninterest income excluding gain or loss on sale of OREO was $2.1 million compared with $1.1 million for the second quarter of 2010.
Noninterest expense was $5.8 million compared with $7.0 million for the second quarter of 2010.

aWe made significant progress during the first half of 2011 in our efforts to improve the banka�s financial position -- including reducing nonperforming assets and generating positive earnings for the second consecutive quarter. We are encouraged by our financial performance on almost all fronts and look forward to continued success moving forward," said Dong Il Kim, president and chief executive officer.

Net interest income before provision for loan losses was $4.0 million in the second quarter of 2011 compared with $5.1 million in the same period a year ago. Net interest margin for the second quarter of 2011 was 2.91 percent compared with 3.13 percent in the second quarter a year earlier. The decrease in net interest margin from the same quarter a year ago was attributable to a $607,000 interest payment for the early redemption of $20 million in brokered deposits and a reduction in average earning assets. Yield on earning assets for the second quarter of 2011 was 4.64 percent compared with 4.91 percent for the second quarter of 2010. Cost of funds for the second quarter of 2011 was 1.85 percent compared with 1.71 percent for the second quarter of 2010.

Noninterest income excluding gain or loss on sale of OREOs in the second quarter of 2011 totaled $2.1 million compared with $1.1 million a year ago. The increase was primarily attributable to a $1.2 million gain on the sale of SBA loans in the second quarter of 2011.

Noninterest expense for the second quarter of 2011 was $5.8 million compared with $7.0 million for the second quarter of 2010. In the second quarter of 2010, a $1.7 million reserve was set aside for a potential legal settlement with the SBA Department. Excluding the $1.7 million reserve, noninterest expense for the second quarter of 2011 increased by $500,000 compared with the second quarter of 2010, due mainly to an increase in salary and legal expenses. The efficiency ratio for the second quarter of 2011 was 94.0 percent compared with 173.4 percent in the second quarter of 2010.

Nonperforming loans were $23.4 million at June 30, 2011 -- down $19.9 million from $43.3 million at June 30, 2010. Nonperforming loans and OREO represented 5.5 percent of total assets at June 30, 2011. No loan loss provision was recorded for the second quarter of 2011 and 2010.

Total assets were $546.7 million as of June 30, 2011 -- representing a decrease of $130.7 million, or 19.3 percent, from the $677.4 million in total assets reported on June 30, 2010. Total deposits as of June 30, 2011 were $471.1 million compared with $562.7 million as of June 30, 2010. Management has intentionally reduced the amount of total assets and brokered deposits in order to improve the banka�s Tier One Leverage Ratio while maintaining an adequate amount of liquidity.

Shareholdersa� equity was $45.9 million at June 30, 2011 compared with $57.8 million at June 30, 2010. Shareholdersa� equity primarily decreased as a result of net losses incurred in 2010. Capital ratios remained well above the aWell-Capitalizeda guidelines established by the regulatory agencies. The Leverage Ratio, Tier 1 Risk-based Capital Ratio and Total Risk-based Capital Ratio at June 30, 2011 were 10.8 percent, 14.6 percent and 17.0 percent, respectively, compared with 11.6 percent, 13.8 percent and 15.1 percent, respectively, at June 30, 2010.

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 multi-ethnic communities in the U.S. 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 abelieve,a aexpect,a aanticipate,a aintend,a aplan,a aestimate,a or words of similar meaning, or future or conditional verbs such as awill,a awould,a ashould,a acould,a or amay.a


Saehan Bancorp
Condensed Balance Sheet
(Dollars in thousands)

		30-Jun
		2011		2010
Assets:
	Cash & due from banks - demand	12,250		12,377
	Due from banks-interest bearing	67,394		30,856
	Federal fund sold	36,710		28,550
	Securities available-for-sale	30,430		80,549
	Loans	400,687		518,270
	Less: Allowance for loan losses	22,940		31,150
	Net loans	377,747		487,120
	Loans held for sale	2,984		-
	Bank premises and equipment, net	2,443		3,496
	Other real estate owned	6,635		10,044
	Other assets	10,145		24,408
	Total assets	546,738		677,400

Liabilities and stockholders' equity:
	Deposits:
	Noninterest bearing demand	130,423		121,932
	Interest bearing demand and savings	239,894		108,156
	Time deposits	192,370		332,599
	Total deposits	471,120		562,687
	Other liabilities	29,674		56,958
	Total liabilities	500,794		619,645
	Total stockholders' equity	45,944		57,755
	Total liabilities and stockholders' equity	546,738		677,400
	Book value per share	0.24		0.31
	Period end shares outstanding	189,097,874		189,097,874
	Nonperforming loans	23,363		43,274

	Tier I leverage ratio	10.81	%	11.57	%
	Tier 1 risk-based capital ratio	14.55	%	13.76	%
	Total risk-based capital ratio	17.00	%	15.06	%


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
			2011			2010			2011			2010
Interest income:
	Interest and fees on loans		6,093			7,533			12,552			15,063
	Interest on securities		201			450			473			632
	Interest on federal funds sold		27			18			53			32
	Other interest income		79			19			140			42
	Total interest income		6,400			8,020			13,218			15,769
	Interest expense:
	Deposit		2,218			2,437			3,920			4,957
	Other		161			478			1,110			1,027
	Total interest expenses		2,379			2,915			5,030			5,984
	Net interest income before provision for loan losses		4,021			5,105			8,188			9,785
	Provision for loan losses		-			-			-			5,017
	Non-interest income:
	Service charges on deposit accounts		486			474			993			1,006
	Gain on sale of loans		1,155			-			1,908			-
	Gain on sale of investment securities		-			14			3			46
	Gain (loss) on sales of OREO		79			(2,180	)		400			(3,554	)
	Other operating income		437			601			911			1,097
	Total non-interest income		2,157			(1,091	)		4,215			(1,405	)
	Non-interest expense:
	Salaries and employee benefits		2,286			2,098			4,437			4,189
	Net occupancy and equipment expense		1,212			1,251			2,380			2,486
	Other operating expense		2,312			3,610			4,392			5,544
	Total non-interest expenses		5,810			6,959			11,209			12,219
	Income before income taxes		368			(2,945	)		1,194			(8,856	)
	Income taxes		-			185			1			185
	Income before extraordinary items		368			(3,130	)		1,193			(9,041	)
	Extraordinary items, net of taxes		-			-			-			-
	Net income		368			(3,130	)		1,193			(9,041	)
	Net income per share -
	Basic	$	0.002		$	(0.02	)	$	0.006		$	(0.09	)
	Diluted	$	0.002		$	(0.02	)	$	0.006		$	(0.09	)


	Basic average common shares outstanding		189,097,874			189,097,874			189,097,874			103,999,396
	Diluted average common shares outstanding		189,097,874			189,097,874			189,097,874			103,999,396

	Charge offs		4,741			6,642			7,868			16,965
	Recoveries		3,790			870			4,623			1,061

		For the three						For the six
		months ended						months ended
		30-Jun						30-Jun
			2011			2010			2011			2010
	Key Operating Ratios:
	Return on average assets		0.26	%		-1.91	%		0.42	%		-2.67	%
	Return on average equity		3.22	%		-20.69	%		5.28	%		-43.78	%
	Yield on earning assets		4.64	%		4.91	%		4.64	%		4.97	%
	Cost on interest bearing liabilities		2.03	%		2.06	%		2.55	%		2.83	%
	Net interest margin		2.91	%		3.13	%		2.87	%		3.09	%
	Cost of funds		1.85	%		1.71	%		1.92	%		2.50	%
	Efficiency ratio		94.04	%		173.37	%		90.37	%		145.81	%

Contributing Sources

Market Wire

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Saehan Bancorp Reports Second Quarter and Six-Month Results