Op Bancorp · NASDAQ:OPBK
Op Bancorp — IPO Roadshow (March 2018)
32 slides from Op Bancorp's IPO roadshow presentation, Mar 20, 2018
Slide 1: Initial Public Offering March 2018
Initial Public Offering March 2018 Free Writing Prospectus Filed Pursuant to Rule 433 Registration Statement No. 333-223444 Dated March 20, 2018
Slide 2: Disclaimer
This presentation has been prepared by OP Bancorp solely for informational purposes based on its own information, as well as information from public sources. This presentation has been prepared to assist interested parties in making their own evaluation of OP Bancorp and does not purpose to contain
Slide 3: Offering Overview
Offering Overview Issuer: OP Bancorp (OTCQB: OPBK) Proposed Exchange / Ticker: Nasdaq Global Market / OPBK Base Shares Offered 2,000,000 (100% Primary) Overallotment Option: 15% (100% Primary) Filing Range: $9.50 – $11.50 Base Deal Value: $21.0 million (based on the midpoint of the filing range) Pro
Slide 4: Today's Presenters
Today’s Presenters Min J. Kim President & Chief Executive Officer Christine Y. Oh Executive VP & Chief Financial Officer
Slide 5: Executive Management Team
Executive Management Team Name Title Years in Industry Year Joined Prior Experience Min J. Kim President & Chief Executive Officer 35 2010 Former President and CEO of Nara Bancorp and Nara Bank (now Bank of Hope and Hope Bancorp Inc.) Served in various other executive positions within Nara Bancorp (
Slide 6: Key Investment Highlights
Key Investment Highlights Proven Track Record of Organic and Profitable Growth Experienced Management Team Personal Relationship-Based Service Strong Community Relationships Strong Risk Management Practices and Disciplined Credit Quality Management Efficient and Scalable Banking Platform
Slide 7: Corporate History and Timeline
Corporate History and Timeline Credit crisis significantly impacts financials FDIC Issued an Order to Cease and Desist 2005 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Opened First Standard Bank Min J. Kim appointed as CEO Renamed Open Bank Safety and Soundness and C&D lifted Raised $11.1 mill
Slide 8: Overview of OP Bancorp
Note: As of or for the year ended, December 31, 2017. Refer to Non-GAAP Reconciliation in the Appendix. “Tangible common equity to tangible assets” is calculated as tangible common equity divided by tangible assets. “Tangible common equity” is defined as total shareholders’ equity reduced by preferr
Slide 9: Geographic Footprint
Geographic Footprint Headquarters Wilshire Branch (June 2005) Fashion District Branch (November 2012) Gardena Branch (February 2013) Aroma Branch (October 2013) Buena Park Branch (December 2013) Olympic Branch (August 2014) Western Branch (October 2015) Dallas LPO (April 2015) Seattle LPO (April 201
Slide 10: Korean-American Banking Landscape
Source: S&P Global Market Intelligence. GAAP data when available, otherwise FR Y-9C’s and bank call reports; As of or for the quarter ended, December 31, 2017. * U.S. Offices pro forma for the pending opening of the Santa Clara office in March 2018; Excludes loan production offices. Korean-American
Slide 11: Operating Strategies
Operating Strategies 1. 2. 3. 4. 5. 6. Leverage the Open Bank Franchise in Korean-American Communities Leverage Public Company Status Focus on Organic Growth and Branch Expansion Increase Lower Cost Deposit Balances Preserve Asset Quality Through Disciplined Lending Practices Expand and Diversify Co
Slide 12: Track Record of Sustained Balance Sheet Growth
Track Record of Sustained Balance Sheet Growth Total Loans ($mm) Total Assets ($mm) Pre-Tax, Pre-Provision Earnings(1) ($mm) Total Deposits ($mm) Note: As of or for the year ended, December 31 of each respective year. Calculated as income before taxes and provision for loan losses. Refer to Non-GAAP
Slide 13: Commitment and Involvement in the Community
Commitment and Involvement in the Community The Open Stewardship Foundation was established in October 2011 Committed to contributing 10% of OPBK’s annual consolidated net income after taxes to the Foundation Foundation has donated over $2.9 million to over 120 local non-profits Management has stron
Slide 14: Diverse Loan Portfolio
Note: As of or for the year ended, December 31 of each respective year. Diverse Loan Portfolio Loan Portfolio Diversification Loan Portfolio Highlights Yield on Loans (%) $764 million total loan portfolio (including held for sale) as of December 31, 2017 Leverage the Company’s quality service model
Slide 15: Commercial Real Estate Loan Portfolio Details
Note: As of or for the year ended, December 31, 2017. Refer to “Pro Forma Capital Position”. Refer to “Korean-American Banking Landscape”. Commercial Real Estate Loan Portfolio Details Total CRE Loan Portfolio Breakout CRE Loan Portfolio Highlights CRE loan balances as of December 31, 2017: $420.8 m
Slide 16: Total Loan Portfolio Yield Details
Total Loan Portfolio Yield Details Loan Portfolio Yield Details Note: As of or for the year ended, December 31, 2017.
Slide 17: High Quality Deposit Base
Note: As of or for the year ended, December 31 as of each respective year. Includes $113.2 million in wholesale deposits and $7.9 million in other bank-use deposits. High Quality Deposit Base Deposit Portfolio Composition Deposit Portfolio Highlights Cost of Deposits (%) The quality of OPBK’s deposi
Slide 18: Rising Rate Environment Supplements Future Earnings
Source: Target Fed Funds Rate per Federal Open Market Committee guidance. Note I: Loan beta is calculated as the change in yield on loans divided by the change in the target fed funds rate. Note II: Deposit beta is calculated as the change in cost of deposits divided by the change in the target fed
Slide 19: Historical Earnings Growth and Stability
Note: For the year ended, December 31 of each respective year. Excludes impact of deferred tax asset revaluation as a result of tax law changes. Refer to Non-GAAP Reconciliation in the Appendix. Historical Earnings Growth and Stability Net Income ($mm) and Diluted Income Per Share ($) Net Interest I
Slide 20: Consistent and Growing Profitability
Consistent and Growing Profitability Return on Average Equity Return on Average Assets Noninterest Expense to Average Assets Efficiency Ratio (1) (1) Note: As of or for the year ended, December 31 of each respective year. Excludes impact of deferred tax asset revaluation as a result of tax law chang
Slide 21: High Asset Quality Through Disciplined Risk Management
Note: As of or for the year ended, December 31 of each respective year. High Asset Quality Through Disciplined Risk Management Nonperforming Loans to Total Loans Nonperforming Assets to Total Assets Net Charge-Offs to Average Loans Allowance for Loan Losses to Loans HFI
Slide 22: Strong Capital Position
Note: As of or for the year ended, December 31 of each respective year. Refer to Non-GAAP Reconciliation in the Appendix. “Tangible common equity to tangible assets” is calculated as tangible common equity divided by tangible assets. “Tangible common equity” is defined as total shareholders’ equity
Slide 23: Pro Forma Capital Position
After giving effect to the net proceeds from the sale by us of 2,000,000 shares of common stock at an assumed offering price of $10.50 per share, which is the midpoint of the expected price range for the offering, after deducting discounts and commissions and estimated offering expenses payable by u
Slide 24: Key Investment Highlights
Key Investment Highlights Proven Track Record of Organic and Profitable Growth Experienced Management Team Personal Relationship-Based Service Strong Community Relationships Strong Risk Management Practices and Disciplined Credit Quality Management Efficient and Scalable Banking Platform
Slide 25: Appendix
Appendix open bank
Slide 26: Board of Directors
Includes beneficial ownership of Company common stock by all directors. Includes beneficial ownership of Company common stock by all directors and named executive officers. Board of Directors Name Title O/S (%) Prior Experience Brian Choi Chairman of the Board 5.85% Chairman and CEO of Universal Fin
Slide 27: SBA Lending Continues to Support Revenue Growth
Note: As of or for the year ended, December 31 of each respective year. Year end 2017 SBA Los Angeles District Office Lender Ranking Report. Calculated as gain on sale of loans divided by the sum of net interest income before provision for loan losses and noninterest income. SBA Lending Continues to
Slide 28: Interest Rate Risk Analysis
The Company uses two approaches to model interest rate risk: Earnings at Risk, or EAR, and Economic Value of Equity, or EVE Under EAR, net interest income is modeled utilizing various assumptions for assets and liabilities, and derivatives EVE measures the period end market value of assets minus the
Slide 29: Securities Portfolio Overview
Note: As of December 31, 2017. Securities Portfolio Overview Securities Portfolio Detail
Slide 30: Summary Historical Consolidated Financial Information
Refer to Non-GAAP Reconciliation in the Appendix. “Tangible book value per share” is defined as tangible common equity divided by number of shares outstanding. “Tangible common equity” is defined as total shareholders’ equity reduced by preferred stock and goodwill and other intangible assets. Summa
Slide 31: Non-GAAP Reconciliation
Note: As of or for the year ended, December 31 of each respective year. Non-GAAP Reconciliation Some of the financial measures included in this presentation are not measures of financial performance recognized by GAAP. Management uses the non-GAAP financial measures set forth below in its analysis o
Slide 32: Non-GAAP Reconciliation (continued)
Note: As of or for the year ended, December 31 of each respective year. The Tax Cuts and Jobs Act of 2017 was signed into law on December 22, 2017. Non-GAAP Reconciliation (continued)