October 19, 2016 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating Opus Bank (“Opus”) (NASDAQ: OPB) for potential violations of the federal securities laws. Investors who purchased Opus Bank securities between February 26, 2015 and October 18, 2016 (the “Class Period”) may be affected.
On October 17, 2016, before the market opened, Irvine, California-based Opus Bank announced that “earnings for the third quarter 2016, which will be announced on October 24, 2016 before the market opens, will include a $0.59 per diluted share impact from loan charge-offs and is expected to result in a net loss of approximately $0.05 per diluted share for the third quarter of 2016.”
The Company stated that “[a]s part of the credit review process of impaired loans, new developments supported charge-offs being recognized on eight loan relationships through the allowance for loan losses at September 30, 2016. Charge-offs were recorded on these eight loan relationships, which have been impacting the provision for loan losses and earnings for the past eight quarters and include three of the same loan relationships that were discussed during Opus' second quarter 2016 earnings conference call. Charge-offs for the eight loan relationships totaled $38.8 million and had specific reserves of $16.7 million previously recorded. In addition, these charge-offs increased the reserve levels recorded against the remaining loan portfolio by $13.6 million as a result of higher loss factors incorporated into our allowance for loan losses methodology to reflect the charge-offs in the third quarter of 2016.
Two loan relationships originated by our Technology Banking division, which we previously announced would be deemphasized, contributed $22.2 million, or 57%, of the charge-offs and $8.1 million, or 60%, of the increased reserves as a result of higher loss factors. The remaining six loan relationships that had $16.6 million of charge-offs were from across our Commercial and Specialty Banking divisions. These eight loan relationships had a remaining balance of $19.1 million as of September 30, 2016 and have been charged off to the estimated fair value of each loan's underlying collateral.”
On October 17, 2016, Opus Bank shares declined from a closing price on October 14, 2016 of $34.45 per share, to close at $27.20 per share, a decline of $7.25 per share or approximately 21% on heavier than usual volume.
If you purchased Opus Bank securities and would like to discuss our investigation, please contact us by e-mailing
or by calling 800-290-1952.
Attorneys: Laurence D. King, Jeffrey P. Campisi