Opus Bank (NASDAQ:OPB) Q4 2017 Earnings Conference Call - Final Transcript

Jan 22, 2018 • 11:00 am ET


Opus Bank (NASDAQ:OPB) Q4 2017 Earnings Conference Call - Final Transcript


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Good morning. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Opus Bank Fourth Quarter Earnings Conference Call. (Operator Instructions). Thank you.

Brett Villaume, Director of IR, you may begin your conference.

Brett Villaume

Thank you, Lisa. Good morning, and welcome to Opus Bank's Investor webcast and conference call. Today, I'm joined by Stephen Gordon, Opus Bank's CEO and President; Brian Fitzmaurice, Senior EVP and Senior Chief Credit Officer; Kevin Thompson, EVP and CFO; and Will Han, Deputy CFO and CAO.

Our discussion today will cover the company's performance during the fourth quarter and full-year 2017, and the information contained in the earnings press release issued earlier this morning. A slideshow presentation that accompanies today's call is available on the Opus Bank investor web page at investor.opusbank.com.

(Forward-Looking Cautionary Statements)

Today's call will include a question-and-answer session following the discussion. For listeners who are participating via WebEx, should you have any questions, you may submit those using the Q&A feature located on the right-hand side of your WebEx window. The white triangle just to the left of the question mark and letters Q&A should be pointing down. Clicking on that triangle opens and closes the Q&A dialogue box.

Now I will turn the call over to Stephen Gordon, CEO and President.

Stephen Gordon

Thank you, Brett.

I will now provide an overview of our results for the fourth quarter and full-year 2017, and then call on Kevin Thompson, CFO; Brian Fitzmaurice, Senior Chief Credit Officer to go into more detail on our financial performance and credit metrics. We will address questions at the end of our prepared remarks.

Earlier this morning, Opus reported earnings for the fourth quarter and year ended December 31, 2017. Included in our results was $9 million of additional income tax expense due to the previously announced revaluation of our deferred tax assets and other tax reform impact as mandated by the Tax Cuts and Jobs Act, which, among other items reduce the federal corporate income tax rate and will decrease our tax rate going forward. We anticipate that our go-forward tax rate will decrease to approximately 25%. Excluding this expense and other strategic initiatives, our net income and earnings per diluted share for the fourth quarter of 2017 would have been $10.1 million or $0.26 per share.

2017 was a year of significant transition and accomplishments for Opus Bank as we successfully execute on the important goals of enhancing our existing credit administration and risk management infrastructure and discipline. Working through and derisking our portfolios of challenged credit, redefining and implementing Opus' Commercial Banking strategy, and bolstering the depth of our talent, much of which came with associated third-party professional fees that we anticipate declining as we head into and through 2018.

For the full-year 2017, we originated $1.5 billion in new loan fundings including $502 million during the fourth quarter, achieving our previously stated goal for the year. Our pipeline of new loan originations remains