Ohana Pacific Bank, which opened in Honolulu in June 2006 to cater to the Korean community and small businesses, has been released from federal and state regulatory restrictions.
The state’s smallest bank in terms of assets had been monitored by the Federal Deposit Insurance Corp. and the state Division of Financial Institutions since October 2009 due to insufficient asset quality and capital ratios.
However, Ohana Pacific raised about $4 million through stock offerings it held in 2010 and 2011 to improve its financial condition, and has since resolved some of its asset quality issues. The bank, which has 20 employees, also has strengthened its management team and increased earnings.
Ohana Pacific is thinly traded on the Over the Counter Bulletin Board but doesn’t meet the Securities and Exchange Commission threshold to be required to file quarterly financial reports. The bank’s shares last traded at $1.90 on Jan. 5, 2011.
"Through the hard work and efforts of our management, our staff and our board, and with the continued and unwavering support of our shareholders, customers and the community, we have been able to successfully meet and satisfy all requirements imposed upon us, thus resulting in the release from the consent order late last year and now, the current removal of all regulatory restrictions," Ohana Pacific President and CEO James Hong said Thursday.
Hong took over leadership of the bank in May 2010.
Ohana Pacific, whose main office is at 1357 Kapiolani Blvd., just outside Ala Moana Center, said it is planning to open a second branch on Oahu later this year, but those plans are in the early stages.
The bank, which lost money its first five years of operation, turned the corner in 2011 when it earned $470,000. Its net income jumped 77.2 percent last year to $833,000.
Assets rose 5.5 percent to $95.8 million last year while deposits increased a similar 5.5 percent to $82.3 million and loans jumped 10.3 percent to $68.5 million.
Through the first three months of this year, Ohana Pacific earned $279,000, down 25 percent from $347,000 during the same period in 2012 due to significantly higher tax credits that were taken in the prior quarter. The bank applied an entire year of tax credits, or $200,000, in the first quarter of 2012 but only applied a quarter’s worth of tax credits, or $75,000, in the first quarter of this year. Excluding the tax credits, the bank had a first-quarter profit of $204,000, up 39 percent from $147,000 in the year-earlier period.
The bank ended last quarter with assets of $98.9 million, up 7.4 percent from $92 million in the year-ago period. Deposits rose 7.8 percent to $85.2 million from $79 million, and loans grew 11.3 percent to $70 million from $62.9 million.
