Opus Bank (OPB) Misses Q1 EPS by 1c

Opus Bank (NASDAQ: OPB) reported Q1 EPS of $0.28, $0.01 worse than the analyst estimate of $0.29. Revenue for the quarter came in at $66.91 million versus the consensus estimate of $62.52 million.

First Quarter 2019 Highlights

• Loans held for investment increased 6%, or $296.3 million, compared to the prior quarter, driven by strong growth in multifamily loans.
• Deposits increased 2%, or $124.9 million, compared to the prior quarter.
• Net interest income increased 1% compared to the prior quarter, as higher interest income on loans and investment securities was partially offset by higher interest expense on deposits and borrowings.
• Net interest margin expanded eight basis points to 3.15% compared to the prior quarter due to the benefit of loan repricing during the first quarter of 2019 and the repositioning of our securities portfolio in the fourth quarter of 2018. Our cost of deposits increased 13 basis points to 0.92% for the first quarter of 2019.
• Noninterest expense increased 2% compared to the prior quarter, excluding a $1.4 million expense related to a legal settlement during the quarter and $10.5 million of expenses related to a restructuring charge taken in the fourth quarter of 2018. The increase was driven by seasonally higher employer taxes in the first quarter of 2019.
• Nonperforming assets decreased 17% compared to the prior quarter to $23.3 million, or 0.30% of total assets compared to 0.39% of total assets in the prior quarter.
• Enterprise Value loans decreased 14% compared to the prior quarter to $105.0 million.
• Provision for loan losses was $2.2 million, largely driven by quarterly loan growth, as Opus recorded net recoveries of $1.6 million in the first quarter of 2019, compared to net charge-offs of $12.0 million in the prior quarter.
• Tangible book value per common share increased $0.19 to $17.96, while our tangible common equity to tangible assets decreased 53 basis points to 8.88% due to growth in total assets during the first quarter of 2019.

Paul G. Greig, Chairman of the Board, Interim Chief Executive Officer and President of Opus Bank, stated, "Our solid core earnings performance during the first quarter of 2019 included higher net interest income, expanding net interest margin, and further improvements in credit quality. Strong quarterly loan growth was driven by high origination volume of multifamily loans, as well as unusually low prepayments during the first quarter. While we were successful in increasing our real estate lending during the quarter, our focus on disciplined underwriting has not changed. All of Opus’ team members are to be commended for the contributions to our first quarter performance.”

For earnings history and earnings-related data on Opus Bank (OPB) click here.

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