Ohana Pacific Bank, Honolulu, HI (OHPB)

A Case of Asian-American Assets


Immigrants have been getting a particularly bad rap lately, so I feel compelled to highlight cases like Ohana Pacific Bank, where immigrant ingenuity, effort, capital and investment lend value to our communities— in this case, quite literally, in the form of a lending institution.

Ohana's stock is also valuable. Happily, it's undervalued by the market. Investors paid $10 per share when the bank was founded thirteen years ago. Today, you can buy it for $7.65.

Give Ohana Pacific three years and we could see book value approaching $12, earnings over $1 per share, and OHPB trading at $15.


Disclosure: As of this posting, I own shares of OHPB and may subsequently either dispose of them or purchase more.


Prospective Buyers

Although Ohana Pacific is not for sale and earns enough to remain independent, acquiring it would help one of these banks compete better against First Hawaii (FHB) and Bank of Hawaii (BOH), which combined, control 67% of the Honolulu market.

First Foundation, Inc, Irvine, CA (FFWM)
Orient Bancorporation, San Francisco, CA (private)
Territorial Bancorp, Honolulu, HI (TBNK)

Financial Snapshot
as of 03/31/2019

Total assets:
$162M
Tangible book value per share:   
$8.78
NPAs to assets:
0.1%
Price to book:
86.8%
Market cap:
$15.8M
Dividend yield:
0%
Trailing 12-month ROA:
0.95%
Trailing 12-month ROE:
8.22%

The Crew

Donald Kang, Chairman
James Chungwoo Hong, President and CEO
Nicole Byun, Executive VP, Chief Credit Officer

The Skinny

Honolulu's Asian Americans, especially Korean Americans, have been putting serious money and talent to work in this bank.

Ohana Pacific was founded by Korean Americans who invested $15M to capitalize the bank in 2006.

Korean-American immigrant business owner Donald Kim remained the bank's largest shareholder until his death in 2018.

In 2006, Kim invested $500,000 of his own capital to help launch the bank.

When Ohana Pacific needed additional capital in 2010, Kim and his company (Amkor A&E, Inc) invested an additional $1.6M.

The majority of Honolulu's 400,000 some residents are Asian Americans (54%), and given Ohana Pacific's focus on serving the Korean American market, it's safe to say a majority of the bank's assets are from our Asian American compatriots.

Ohana Pacific has $136M in loans outstanding today—money Asian Americans have put to work in the Honolulu economy.

As you can imagine, I've seen a lot of bank boards. Every director on the board of Ohana Pacific Bank has impressive business credentials, and the high standards to which they apparently hold each other are really remarkable.*

*As evidenced by their recent removal of Ronald Moon. He may have been a State Supreme Court Judge, but that didn't prevent the board from holding him to account as a bank director.

Sources

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