Opus Bank (NASDAQ:OPB) Q2 2018 Earnings Conference Call - Final Transcript

Jul 23, 2018 • 11:00 am ET


Opus Bank (NASDAQ:OPB) Q2 2018 Earnings Conference Call - Final Transcript


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Good morning, my name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Opus Bank's Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions).

Brett Villaume, Director of Investment Relations, you may begin your conference.

Brett Villaume

Speaker C-Brett Villaume

Thank you. 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 CCO; and Kevin Thompson, EVP and CFO. Our discussion today will cover the company's performance during the second quarter of 2018 and the information contained in the earnings press release issued earlier this morning. A slide show presentation that accompanies today's call is available on the Opus Bank Investor webpage 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 in -- 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 dialog 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 second quarter and then Kevin Thompson, CFO and Brian Fitzmaurice, Senior CCO will go into more detail on our financial performance and credit metrics. We will address questions at the end of our prepared remarks.

For the second quarter of 2018, Opus achieved net income of 15.5 million or $0.40 per diluted share, compared to 12.9 million or $0.34 per diluted share in the prior quarter. Net income for the six-months ended was 28.4 million or $0.74 per diluted share, up from 25.9 million or $0.69 per diluted share for the first six months of 2017.

Additionally, return on average assets and return on average tangible equity increased to 0.86% on assets and 9.49% return on average tangible equity for the second quarter of 2018 respectively from 0.72% on assets and 8.07% return on average tangible equity in the prior quarter. Our positive performance for the second quarter was highlighted by significant improvements in credit quality, which included meaningful reductions in our non-accrual, total criticized and enterprise value loans. Additionally, at the end of the second quarter, we had only 2 million of technology loans out of a portfolio that was approximately 280 million at its peak in June of 2016.

Non-performing assets decreased 37% from the prior quarter and measured 56 basis points of total assets as of June 30, 2018, which is in line with our western regional bank peers. Total criticized loans decreased 20% to just under 200 million and the balance of total