LOS ANGELES, July 26, 2007 (PRIME NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported that its disciplined balance sheet growth strategy contributed to second quarter profits and improved loan quality. For the quarter ended June 30, 2007, net income was $7.3 million, or $0.25 per diluted share, compared to $8.4 million, or $0.29 per diluted share, in the second quarter of 2006. For the first six months of 2007, Wilshire earned $14.7 million, or $0.50 per diluted share, compared to $16.2 million, or $0.56 per diluted share, in the first half of 2006. Wilshire's non-performing loans (NPLs) totaled 0.50% of loans at the end of June 2007, compared to 1.25% of loans three months earlier.
Wilshire's performance measures remain strong compared to peer averages, despite being down from last year. In the second quarter of 2007, ROE was 18.15% and ROA was 1.47%, compared to 26.32% and 1.90%, respectively, in the second quarter of 2006. For the six months of 2007, ROE was 18.50% and ROA was 1.47%, compared to 26.36% and 1.87%, respectively, in the first half of 2006.
"We are continuing to operate under our modified balance sheet growth strategy that we implemented at the end of 2006 and are already seeing improved results," stated Soo Bong Min, President and CEO. "As planned, our focus on non-time deposits and more strict lending policies led to controlled loan and deposit growth during the second quarter, combined with an improved net interest margin. Unfortunately, our clean-up process of the credit portfolio and our expansion resulted in similar profit levels in the second quarter compared to the first quarter, despite our overall improvements. Although our profit recovery was slightly delayed, we expect to be back on track later this year as our clean-up processes and our modified growth strategy both continue to materialize."
"In July, we successfully continued our East Coast expansion. We added to our existing New York footprint by completing the acquisition of our New Jersey branch in Fort Lee, bringing our network to 19 branch locations and 7 SBA loan production offices," added Min. "The Fort Lee branch is a key location in our plan to significantly grow our market share in the New York and New Jersey area. We also issued $25 million in trust preferred securities on July 10, 2007 to take advantage of recent favorable pricing. The proceeds will be used to support general business purposes and to help the Bank redeem its previously issued junior subordinated debentures later this year."
"In the first quarter of 2007, four large loans totaling $13.1 million were placed in non-accrual status," stated Brian Cho, EVP and Chief Financial Officer. "However, in the last 90 days, three of these loans were either paid off or brought current as planned, and only a $2.5 million loan remained more than 90 days past due at the end of second quarter of 2007." As a result, total NPLs decreased substantially to $8.4 million, or 0.50% of gross loans at the end of June 2007, representing an $11.8 million decrease from $20.3 million, or 1.25% of loans, three months ago. NPLs were $4.7 million, or 0.32% of loans at the end of June 2006. Non-performing assets (NPAs) were $8.5 million, or 0.42% of total assets at quarter-end, compared to $20.4 million, or 1.02% of assets at the end of the first quarter of 2007, and $4.9 million, or 0.26% of assets at the end of June 2006.
"We enhanced our focus on credit quality during the quarter in an effort to clean up our existing portfolio, which resulted in an increase in net charge-offs to $1.8 million in the second quarter of 2007, compared to $108,000 in the second quarter a year ago. The majority of this increase was attributable to a $1.3 million charge-off, net of cash secured collateral and the guaranteed portion under the SBA program, from two troubled loans under the same borrower," added Cho. The provision for loan losses in the second quarter increased to $4.5 million, compared to $1.6 million in the preceding quarter and $1.2 million in the second quarter a year ago. At June 30, 2007, the allowance for loan losses was $19.4 million, representing 1.16% of gross loans and 230% of NPLs.
New loan originations decreased 11% to $258.8 million in the second quarter of 2007, compared to $290.8 million in the second quarter of 2006. Net loans in the portfolio increased 17% to $1.65 billion at quarter-end, compared to $1.42 billion a year earlier, and assets grew to $2.04 billion at June 30, 2007, up 10% from $1.85 billion a year ago. Reflecting the strategy of moderate balance sheet growth, net loans increased 3%, and total assets and deposits increased 2% over the past three months.
"Deposit pricing remains competitive, especially in our primary Southern California market, where our main funding sources are time deposits and money market accounts," said Min. "However, the New York metropolitan area is a very attractive market with great opportunities for loan growth and relatively low-cost deposits. With our planned fourth East Coast branch opening later this year and the continuing benefits from our campaign for non-time deposits, we believe we can continue to build market share and lower our overall deposit costs."
"Non-time deposits grew by $33 million in the second quarter while time deposits decreased by $2.8 million in the same period as a result of our continued core deposit campaign to generate more non-time deposits," Cho said. "While substantial changes in our deposit mix will take time, we will continue to decrease our dependence on CDs." Total deposits grew 11% to $1.77 billion at June 30, 2007, compared to $1.59 billion a year ago. Non-time deposits grew by 11% to $825 million over the course of the year ended June 30, 2007, while time deposits grew 12% to $941 million for the same period. In the second quarter of 2007, the net interest margin improved to 4.52%, compared to 4.10% in the preceding quarter, but lower than 4.74% in the second quarter of 2006. For the first half of 2007, net interest margin was 4.31% compared to 4.56% in the first half of 2006.
In the second quarter of 2007, interest income was up 14% while interest expense was up 22% over the same quarter of 2006. Net interest income grew 8% to $20.9 million, from $19.4 million in the second quarter of 2006. While service fees on deposits grew by 3%, other operating income was down 4% to $6.3 million, compared to $6.6 million in the second quarter a year ago, due to the decrease of SBA loan sales in the second quarter of 2007.
"Although our expanded office network increased overall SBA loan production levels, the production of available-for-sale loans guaranteed under the SBA 7(a) program decreased, reflecting the industry trend toward SBA 504 program loans. Our somewhat reduced 7(a) guarantee loan production in the second quarter of 2007, coupled with the lowered sales premium on SBA loans, resulted in a 24% decline in gain on sale of loans as compared with the $3.1 million gain in the same quarter a year ago," Cho said. Despite additional overhead expenses associated with the integration of the New York branches, other operating expenses were $10.6 million, the same as the second quarter a year ago.
In the six-month period ended June 30, 2007, net interest income was $39.9 million, up 9% from $36.7 million in the first half of last year. Other operating income was $11.5 million, a 7% decrease from $12.3 million in the first six months of 2006, due to the decrease of SBA loan sales in the first half of 2007. Other operating expenses in the first half of 2007 were up 8% to $21.1 million, compared to $19.5 million in the first half of 2006.
"We have kept our operating expenses in line throughout our New York expansion, and as a result we were able to improve our efficiency ratio substantially over the last quarter," Min said. "We hope to maintain a targeted efficiency ratio of around 40%." The efficiency ratio improved to 38.95% in the second quarter of 2007, compared to 40.81% in the same quarter a year ago. Year-to-date, the efficiency ratio was 41.06%, compared to 39.71% in the same period a year ago.
At June 30, 2007, shareholders' equity was $163 million, up 22% from $133 million a year earlier, and book value was $5.54 per share, compared to $4.56 a year prior. Capital ratios continue to exceed the "Well Capitalized" guidelines established by regulatory agencies.
Management will host its quarterly conference call today, July 26, at 1:00 p.m. PDT (4:00 p.m. EDT). Investment professionals are invited to participate in the call by dialing 1-866-713-8395 using passcode 13015459. Current and prospective shareholders are also invited to listen to the live or archived call at www.wilshirebank.com or www.earnings.com.
Wilshire Bancorp and its subsidiary, Wilshire State Bank, have received significant accolades for growth, performance and profitability from Wall Street and the banking industry:
* April 2007 -- ranked third by US Banker in its list of Top 200 Mid-Tier Banks, based on three-year average ROE. * January 2007 -- US Banker ranked Wilshire eighth among the Top 25 Banks of 2007, Soo Bong Min was third on the list of the Top 10 CEOs, and Brian Cho was first among the Top 10 CFOs. * September 2006 -- ranked third by US Banker in its list of Top 100 Mid-Tier Banks, based on three-year average ROE. * Fortune named Wilshire the 70th fastest-growing public company in the nation. * Ranked second by five-year total return of all banks and thrifts nationally by Ryan Beck & Co. * August 2006 -- Sandler O'Neill's Bank and Thrift Sm-All Stars -- Class of 2006 recognized 34 of the 573 publicly traded institutions with assets of less than $2 billion, focusing on growth, profitability, credit quality and capital strength. Wilshire is one of only nine companies that Sandler has named each year since the list's inception in 2004. * April 2006 -- Wilshire Bancorp was added to the Standard & Poor's SmallCap 600 index. * January 2006 -- US Banker named Wilshire third in its All-Star Lineup -- The Top 20 Banks of 2006, based on ROE.
Headquartered in Los Angeles, Wilshire State Bank operates 19 branch offices in California, Texas, New Jersey and New York, and seven loan production offices in San Jose, Seattle, Las Vegas, Houston, Atlanta, Denver, and Annandale (in Virginia), and is an SBA preferred lender nationwide. Wilshire State Bank is a community bank with a focus on commercial real estate lending and general commercial banking, with its primary market encompassing the multi-ethnic populations of the Los Angeles Metropolitan area. Wilshire Bancorp's strategic goals include increasing shareholder and franchise value by continuing to grow its multi-ethnic banking business and expanding its geographic reach to other similar markets with strong levels of small business activity.
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
(unaudited) (dollars in thousands, except per share data)
Quarter Quarter Quarter
Ended Three Ended One Ended
June 30, Month March 31, Year June 30,
2007 Change 2007 Change 2006
---------- ------ ---------- ------ ----------
INTEREST INCOME
Interest on
Loans & Leases $ 36,584 8% $ 33,901 16% $ 31,626
Interest on
Securities 2,342 5% 2,239 5% 2,238
Interest on
Federal funds
sold 578 -62% 1,509 -25% 773
---------- ---------- ----------
Total Interest
Income 39,504 5% 37,649 14% 34,637
---------- ---------- ----------
INTEREST EXPENSE
Deposits 17,243 -1% 17,362 26% 13,645
FHLB Advances
and Other 1,345 2% 1,314 -13% 1,554
---------- ---------- ----------
Total Interest
Expense 18,588 0% 18,676 22% 15,199
---------- ---------- ----------
Net Interest
Income 20,916 10% 18,973 8% 19,438
Provision for
Loan Losses 4,500 176% 1,630 275% 1,200
---------- ---------- ----------
Net Interest
Income After
Provision for
Loan Losses 16,416 -5% 17,343 -10% 18,238
---------- ---------- ----------
OTHER OPERATING
INCOME
Fees on Deposits 2,505 10% 2,287 3% 2,441
Gain on Sales
of Loans 2,334 29% 1,809 -24% 3,055
Other 1,472 32% 1,114 36% 1,084
---------- ---------- ----------
Total Other
Operating Income 6,311 21% 5,210 -4% 6,580
---------- ---------- ----------
OPERATING EXPENSES
Salaries and
Employee Benefits 5,703 0% 5,698 -4% 5,965
Occupancy &
Equipment 1,300 2% 1,270 21% 1,072
Other 3,603 2% 3,535 1% 3,580
---------- ---------- ----------
Total Other
Operating Expenses 10,606 1% 10,503 0% 10,617
---------- ---------- ----------
Income Before
Taxes 12,121 1% 12,050 -15% 14,201
Income Tax 4,775 1% 4,733 -17% 5,786
---------- ---------- ----------
NET INCOME $ 7,346 0% $ 7,317 -13% $ 8,415
========== ========== ==========
Per Share Data
Basic Earnings
Per Common
Share $ 0.25 0% $ 0.25 -14% $ 0.29
Earnings Per
Share -
Assuming
Dilution $ 0.25 0% $ 0.25 -14% $ 0.29
Weighted Average
Shares
Outstanding 29,370,096 29,346,442 28,911,555
Weighted Average
Shares
Outstanding
Including
Dilutive Effect
Of Stock Options 29,662,046 29,517,299 29,278,179
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
(unaudited) (dollars in thousands, except per share data)
Six Months Six Months
Ended One Ended
June 30, Year June 30,
2007 Change 2006
---------- ------ ----------
INTEREST INCOME
Interest on Loans & Leases $ 70,485 19% $ 59,275
Interest on Securities 4,581 14% 4,014
Interest on Federal funds sold 2,087 -13% 2,389
---------- ----------
Total Interest Income 77,153 17% 65,678
---------- ----------
INTEREST EXPENSE
Deposits 34,605 34% 25,898
FHLB Advances and Other 2,659 -13% 3,064
---------- ----------
Total Interest Expense 37,264 29% 28,962
---------- ----------
Net Interest Income 39,889 9% 36,716
Provision for Loan Losses 6,130 171% 2,260
---------- ----------
Net Interest Income After Provision
for Loan Losses 33,759 -2% 34,456
---------- ----------
OTHER OPERATING INCOME
Fees on Deposits 4,792 4% 4,596
Gain on Sales of Loans 4,144 -23% 5,405
Other 2,586 10% 2,343
---------- ----------
Total Other Operating Income 11,522 -7% 12,344
---------- ----------
OPERATING EXPENSES
Salaries and Employee Benefits 11,401 2% 11,221
Occupancy & Equipment 2,570 31% 1,968
Other 7,138 13% 6,291
---------- ----------
Total Other Operating Expenses 21,109 8% 19,480
---------- ----------
Income Before Taxes 24,172 -12% 27,320
Income Tax 9,509 -14% 11,082
---------- ----------
NET INCOME $ 14,663 -10% $ 16,238
========== ==========
Per Share Data
Basic Earnings Per Common Share $ 0.50 -12% $ 0.56
Earnings Per Share - Assuming
Dilution $ 0.50 -11% $ 0.56
Weighted Average Shares Outstanding 29,358,335 28,813,332
Weighted Average Shares Outstanding
Including Dilutive Effect Of Stock
Options 29,641,359 29,194,021
CONSOLIDATED BALANCE SHEET
--------------------------
(unaudited) (dollars in thousands, except share data)
Three One
June 30, Month March 31, Year June 30,
2007 Change 2007 Change 2006
---------- ------ ---------- ------ ----------
ASSETS:
Noninterest-Earning
Demand Deposits
and Cash on Hand $ 70,949 7% $ 66,218 -2% $ 72,585
Federal Funds Sold
and Other Cash
Equivalents 25,004 -66% 74,003 -67% 76,003
---------- ---------- ----------
Total Cash and Cash
Equivalents 95,953 -32% 140,221 -35% 148,588
---------- ---------- ----------
Interest-Bearing
Deposits in Other
Financial
Institutions -- 0% -- -100% 500
Securities
Available For Sale 195,103 14% 171,791 4% 188,272
Securities Held To
Maturity 11,603 -21% 14,612 -44% 20,835
---------- ---------- ----------
Total Securities 206,706 11% 186,403 -1% 209,607
---------- ---------- ----------
Loans & Leases
Receivable 1,673,044 4% 1,615,355 17% 1,434,135
Allowance For Loan
Losses 19,378 13% 17,214 18% 16,358
---------- ---------- ----------
Loans & Leases
Receivable, Net 1,653,666 3% 1,598,141 17% 1,417,777
---------- ---------- ----------
Accrued Interest
Receivable 10,097 5% 9,591 16% 8,728
Acceptance 4,238 49% 2,846 47% 2,879
Other Real Estate
Owned -- 0% -- -100% 242
Premises and
Equipment 10,205 -2% 10,396 3% 9,940
Federal Home Loan
Bank (FHLB) Stock,
at Cost 8,476 11% 7,652 15% 7,346
Cash surrender
value of Life
Insurance 15,931 1% 15,784 3% 15,397
Goodwill 6,675 0% 6,675 -1% 6,767
Core Deposit
Intangible 1,446 -3% 1,489 -11% 1,619
Other Assets 26,123 19% 21,885 5% 24,924
---------- ---------- ----------
TOTAL ASSETS $2,039,516 2% $2,001,083 10% $1,853,814
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Non-interest
Bearing Demand
Deposits $ 327,400 3% $ 317,533 -5% $ 345,019
Savings & NOW
Deposits 53,820 6% 50,559 17% 45,821
Money Market
Deposits 443,825 5% 423,926 25% 355,787
Time Deposits in
denomination of
$100,000 or more 791,723 0% 788,950 14% 695,657
Other Time Deposits 149,157 -4% 154,715 1% 148,160
---------- ---------- ----------
Total Deposits 1,765,925 2% 1,735,683 11% 1,590,444
---------- ---------- ----------
FHLB Advances 20,000 0% 20,000 -56% 45,000
Acceptance 4,238 49% 2,846 47% 2,879
Subordinated
Debentures 61,547 0% 61,547 0% 61,547
Accrued Interest
and Other
Liabilities 25,219 6% 23,821 19% 21,163
---------- ---------- ----------
Total Liabilities 1,876,929 2% 1,843,897 9% 1,721,033
---------- ---------- ----------
STOCKHOLDERS' EQUITY:
Common Stock - No Par
Value-Authorized,
80,000,000 Shares
Issued and
Outstanding
29,371,696,
29,368,896 and
29,120,370 Shares,
Respectively 50,733 0% 50,635 5% 48,505
Retained Earnings 112,564 6% 106,687 31% 86,135
Accumulated Other
Comprehensive Loss,
Net of Taxes (710) 422% (136) -62% (1,859)
---------- ---------- ----------
Total Stockholders'
Equity 162,587 3% 157,186 22% 132,781
---------- ---------- ----------
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $2,039,516 2% $2,001,083 10% $1,853,814
========== ========== ==========
AVERAGE BALANCES
----------------
(unaudited) (dollars in thousands)
Quarter Quarter Quarter Six Months Six Months
Ended Ended Ended Ended Ended
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
---------- ---------- ---------- ---------- ----------
Average
Assets $1,996,898 $1,991,923 $1,774,172 $1,994,399 $1,738,821
Average
Equity $ 161,855 $ 155,100 $ 127,895 $ 158,496 $ 123,208
Average Net
Loans
(includes
LHFS) $1,621,006 $1,551,416 $1,377,679 $1,586,403 $1,322,633
Average
Deposits $1,724,088 $1,731,159 $1,512,128 $1,727,604 $1,478,548
Average
Time
Deposits in
denomination
of $100,000
or more $ 783,100 $ 803,630 $ 657,744 $ 794,060 $ 653,548
Average
Interest
Earning
Assets $1,851,415 $1,851,423 $1,642,050 $1,851,419 $1,611,779
CONSOLIDATED FINANCIAL RATIOS
-----------------------------
(unaudited) (dollars in thousands, except per share data)
Quarter Quarter Quarter Six Months Six Months
Ended Ended Ended Ended Ended
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
---------- ---------- ---------- ---------- ----------
Annualized
Return on
Average
Assets 1.47% 1.47% 1.90% 1.47% 1.87%
Annualized
Return on
Average
Equity 18.15% 18.87% 26.32% 18.50% 26.36%
Efficiency
Ratio 38.95% 43.43% 40.81% 41.06% 39.71%
Annualized
Operating
Expense/
Average
Assets 2.12% 2.11% 2.39% 2.12% 2.24%
Annualized
Net Interest
Margin 4.52% 4.10% 4.74% 4.31% 4.56%
Tier 1
Leverage
Ratio 10.28% 10.00% 9.63%
Tier 1
Risk-Based
Capital
Ratio 12.36% 12.07% 11.35%
Total
Risk-Based
Capital
Ratio 14.22% 13.80% 13.53%
Book Value
Per Share $ 5.54 $ 5.35 $ 4.56
ALLOWANCE FOR LOAN LOSSES
-------------------------
(unaudited) (dollars in thousands)
Quarter Quarter Quarter Six Months Six Months
Ended Ended Ended Ended Ended
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
---------- ---------- ---------- ---------- ----------
Balance at
Beginning
of Period $ 17,214 $ 18,654 $ 14,870 $ 18,654 $ 13,999
Provision
for Loan
Losses $ 4,500 $ 1,630 $ 1,200 $ 6,130 $ 2,260
Allowance
for loan
losses
acquired in
LBNY acquis-
ition $ -- $ -- $ 601 $ -- $ 601
Less Charge
Offs (Net
Recov-
eries) $ 1,757 $ 2,695 $ 108 $ 4,452 $ 186
Less:
Provision for
(recapture
of) losses
on off
balance
sheet
item $ 579 $ 375 $ 205 $ 954 $ 316
---------- ---------- ---------- ---------- ----------
Balance at
End of
Period $ 19,378 $ 17,214 $ 16,358 $ 19,378 $ 16,358
========== ========== ========== ========== ==========
Loan Loss
Allowance/
Gross Loans 1.16% 1.07% 1.14%
Loan Loss
Allowance/
Non-
performing
Loans 230.33% 85.01% 351.53%
Loan Loss
Allowance/
Total Assets 0.95% 0.86% 0.88%
Loan Loss
Allowance/
Non-
performing
Assets 228.35% 84.54% 334.19%
NON-PERFORMING ASSETS
---------------------
(net of guaranteed portion)
June 30, March 31, June 30,
2007 2007 2006
---------- ---------- ----------
Accruing
Loans -
90 Days
Past Due 1,077 2,603 901
Non-accrual
Loans 7,336 17,647 3,752
Restructured
Loans -- -- --
---------- ---------- ----------
Total
Non-
performing
Loans 8,413 20,250 4,653
========== ========== ==========
Total
Non-
performing
Loans/Gross
Loans 0.50% 1.25% 0.32%
Repossessed
Vehicles 73 112 --
OREO -- -- 242
---------- ---------- ----------
Total
Non-
performing
Assets $ 8,486 $ 20,362 $ 4,895
========== ========== ==========
Total
Non-
performing
Assets/
Total
Assets 0.42% 1.02% 0.26%
Statements concerning future performance, events, or any other guidance on future periods constitute forward-looking statements that are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated expectations. Specific factors include, but are not limited to, loan production and sales, credit quality, the ability to expand net interest margin, the ability to continue to attract low-cost deposits, success of expansion efforts, competition in the marketplace and general economic conditions. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes included in Wilshire Bancorp's most recent reports on Form 10-K and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Results of operations for the most recent quarter are not necessarily indicative of operating results for any future periods. Any projections in this release are based on limited information currently available to management and are subject to change. Since management will only provide guidance at certain points during the year, Wilshire Bancorp will not necessarily update the information. Such information speaks only as of the date of this release. Additional information on these and other factors that could affect financial results are included in filings by Wilshire Bancorp with the Securities and Exchange Commission.