Wilshire Bancorp Reports Net Income of $10.9 Million or $0.15 per Share for Fourth Quarter 2013

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| Source: Wilshire Bancorp, Inc.

LOS ANGELES, Jan. 27, 2014 (GLOBE NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC) (the "Company"), the holding company for Wilshire Bank (the "Bank"), today reported net income available to common shareholders of $10.9 million, or $0.15 per diluted common share, for the quarter ended December 31, 2013. This compares to net income available to common shareholders of $15.2 million, or $0.21 per diluted common share, for the same period of the prior year, and net income available to common shareholders of $11.3 million, or $0.16 per diluted common share, for the third quarter of 2013. Financial results for the fourth quarter of 2013 include $1.8 million in one-time merger-related expenses attributable to the acquisitions of BankAsiana and Saehan Bancorp.

Jae Whan (J.W.) Yoo, President and CEO of Wilshire Bancorp, said, "We are pleased to deliver another solid quarter, which was driven by a continuation of our strong business development activity. We had $222 million in loan production during the fourth quarter, which resulted in 3.2% organic growth in our loan portfolio during the quarter, and generated our highest level of gain on sales of SBA loans for any quarter in 2013.

"We believe we are making good progress with the integration of our two recent acquisitions, BankAsiana and Saehan Bancorp. The two acquisitions have provided us with an expanded market presence and improved business development capabilities that we believe will be instrumental in helping us continue growing our market share. In 2014, we will be focused on fully capturing the projected synergies from these acquisitions, generating quality balance sheet growth, and delivering a higher level of profitability for our shareholders," said Mr. Yoo.

Q4 2013 Summary

  • Net income available to common shareholders totaled $10.9 million or $0.15 per diluted common share, for the fourth quarter of 2013
  • Total revenue of $41.6 million, an increase of 29% from the fourth quarter of 2012
  • Return on average assets of 1.32% and return on average equity of 10.88% for the fourth quarter of 2013
  • Acquisition of BankAsiana and Saehan Bancorp completed during the fourth quarter of 2013; Despite these acquisitions being complete, the purchase accounting adjustments are still being evaluated and as such are preliminary and subject to change
  • Loans receivable totaled $2.82 billion at December 31, 2013, an increase of 28% from $2.20 billion at September 30, 2013
  • Total deposits were $2.87 billion at December 31, 2013, an increase of 27% from $2.25 billion at September 30, 2013
  • Continued low credit losses resulted in no provision for losses on loans and loan commitments for Q4 2013

ACQUISITIONS

During the fourth quarter of 2013, the Company completed its acquisitions of BankAsiana, previously headquartered in Palisades Park, New Jersey, and Saehan Bancorp, previously headquartered in Los Angeles, California. The acquisition of BankAsiana was completed on October 1, 2013 and the acquisition of Saehan Bancorp was completed on November 20, 2013. With the completion of the acquisitions, three branches in the New York/New Jersey area and ten branches in Southern California were added to the Company's existing branch network, which now consists of 38 branches within the United States.

The acquisitions were accounted for in accordance with generally accepted accounting principles and the assets and liabilities of BankAsiana and Saehan Bancorp were recorded at fair value as of the acquisition dates. Goodwill recorded from the acquisitions for the fourth quarter of 2013 totaled $65.2 million, $10.8 million from the acquisition of BankAsiana and $54.4 million from the acquisition of Saehan Bancorp.

The fair value of loans acquired from BankAsiana and Saehan Bancorp totaled $168.1 million and $381.0 million, respectively, at the dates of acquisition. The fair valuation of the loan portfolio of BankAsiana and Saehan Bancorp resulted in discounts of $9.2 million (5.2% of the total portfolio) and $27.7 million (6.8% of the total portfolio), respectively. Total deposits acquired from BankAsiana were $162.5 million and total deposits acquired from Saehan Bancorp were $503.4 million. Time deposits acquired were recorded at fair value and included $668,000 and $644,000 in premiums for BankAsiana and Saehan Bancorp, respectively. Core deposit intangibles recorded from the acquisition of BankAsiana were $725,000 and core deposit intangibles recorded from the acquisition of Saehan Bancorp were $3.8 million. After making all the necessary acquisition accounting adjustments, total assets acquired from BankAsiana were $209.7 million and total assets acquired from Saehan Bancorp were $631.7 million.

The acquisition accounting adjustments are current as of the date of this announcement but may be subject to change as we continue to analyze the fair value of acquired assets and liabilities at the time of the acquisitions. The Company's financial results, to be included in the Annual Report on Form 10-K for the year ended December 31, 2013 could materially differ from the financial results being reported today as a result of the preliminary purchase accounting adjustments being reported for BankAsiana and Saehan Bancorp. The Company will issue another public announcement to provide the final results for the purchase accounting adjustments should they differ materially from what is reported today.

STATEMENT OF OPERATIONS

Pre-Tax, Pre-Provision Income

Pre-tax, pre-provision income (PTPP) was $17.0 million for the fourth quarter of 2013, compared with $11.6 million for the fourth quarter of 2012, and $16.7 million for the third quarter of 2013. Excluding merger-related expenses, PTPP was $18.8 million for the fourth quarter of 2013. PTPP is a Non-GAAP measure of financial performance. Please refer to the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" table at the end of this press release for a reconciliation of PTPP to net income and important information about Non-GAAP measures of financial performance.

Net Interest Income and Margin

Net interest income before credit for losses on loans and loan commitments totaled $32.3 million for the fourth quarter of 2013, an increase of 26% from $25.6 million for the fourth quarter of 2012, and an increase of 21% from $26.7 million for the third quarter of 2013. The increase from the prior quarter is primarily attributable to the acquisitions of BankAsiana and Saehan Bancorp.

Net interest margin was 4.20% for the fourth quarter of 2013, compared to 4.08% for the third quarter of 2013, and 4.20% for the fourth quarter of 2012. In order to conform to the calculation of net interest margin within its peer group, the Company's net interest margin calculation now excludes allowance for loan losses from earnings assets and average loans, which slightly decreases loan yields and net interest margin. Previous period calculations have been adjusted for comparative purposes. Excluding the effects of acquisition accounting adjustments, the net interest margin was approximately 3.91% for the fourth quarter of 2013. During the third quarter of 2013 the Company had a large recovery of interest income from loans that were put back on accrual status. The decrease in the core net interest margin from the prior quarter was primarily due to a lower amount of recovered interest income during the fourth quarter of 2013 related to non-accrual loans placed back on accrual status. 

Loan yields were 5.17% for the fourth quarter of 2013, compared with 5.05% for the third quarter of 2013, and 5.34% for the fourth quarter of 2012. Excluding the effects of acquisition accounting adjustments, loan yields were approximately 4.86% for the fourth quarter of 2013.

The total cost of deposits was 0.53% for the fourth quarter of 2013, unchanged from the third quarter of 2013. The total cost of deposits was 0.59% for the fourth quarter of 2012.

Non-Interest Income

Total non-interest income was $9.3 million for the fourth quarter of 2013, compared to $6.7 million for the fourth quarter of 2012, and $7.8 million for the third quarter of 2013. The increase from the prior quarter was primarily due to a higher net gain on sale of loans.

The $4.0 million in net gain on sale of loans recognized in the fourth quarter of 2013 was substantially all gains from the sale of SBA loans. During the fourth quarter of 2013, the Company sold $43.2 million in SBA loans, compared with $30.2 million sold during the third quarter of 2013.

Non-Interest Expense

Total non-interest expense was $24.7 million for the fourth quarter of 2013, compared with $20.7 million for the fourth quarter of 2012, and $17.8 million for the third quarter of 2013. The increase from prior quarter is primarily attributable to costs associated with the acquisitions of BankAsiana and Saehan Bancorp of which one-time non-recurring costs accounted for $1.8 million of non-interest expense.

Total salaries and employee benefits expense was $12.9 million for the fourth quarter of 2013, compared with $7.9 million for the fourth quarter of 2012, and $8.8 million for the third quarter of 2013. The increase from the prior quarter was primarily due to the addition of personnel from the acquisitions of BankAsiana and Saehan Bancorp and additional bonus accruals for year-end bonus payments paid to employees.

Other non-interest expense for the fourth quarter of 2013 totaled $6.3 million, compared with $6.2 million in the fourth quarter of 2012, and $5.3 million for the third quarter of 2013. The increase from the prior quarter was primarily attributable to recurring expense related to growth from the fourth quarter acquisitions.

Merger-related non-recurring expense was $1.8 million in the fourth quarter of 2013 and was related to severance and retention payments, professional fees, such as consulting and legal expenses and data processing contract termination fees.

The Company's operating efficiency ratio was 59.2% for the fourth quarter of 2013, compared with 64.1% for the fourth quarter of 2012 and 51.7% for the third quarter of 2013.  

Tax Provision

For the fourth quarter of 2013, the Company recorded a provision for income tax totaling $6.1 million, reflecting an effective tax rate of 35.8% for the quarter. The effective tax rate for the fourth quarter of 2013 is higher than the tax rate for the third quarter of 2013 due to an increase in the actual 2013 pre-tax book income versus the projected pre-tax book income and an increase in the state income tax rate based on tax returns filed for 2012. For the year ended December 31, 2013, the Company recorded a provision for income tax totaling $22.3 million, reflecting an effective tax rate of 32.9%. The effective tax rate is lower than historical rates due to an increase in federal affordable housing tax credits.

BALANCE SHEET

Total gross loans receivable were $2.82 billion at December 31, 2013, compared to $2.20 billion at September 30, 2013. At December 31, 2013, the Company had $161.6 million in loans (net of the fair value adjustment) related to the acquisition of BankAsiana, and $379.7 million in loans (net of the fair value adjustment) related to the acquisition of Saehan Bancorp.  Excluding the impact of adding the loan portfolios from BankAsiana and Saehan Bancorp, the Company's total gross loans receivable increased $82.5 million, or 3.7%, during the fourth quarter of 2013.

The following table shows gross loans (excluding loan fees and allowance for loan losses) by loan type: 

  Quarter Ended
(Dollars In Thousands) December 31, 2013   September 30, 2013   June 30, 2013   March 31, 2013   December 31, 2012
                   
Construction $ 40,367   $ 32,119   $ 36,371   $ 34,030   $ 20,928
Real Estate Secured 2,332,121   1,819,052   1,715,567   1,695,980   1,692,273
Commercial & Industrial 437,524   342,057   337,057   313,645   284,318
Consumer 14,694   9,637   11,089   11,684   13,674
 Gross Loans Receivable * 2,824,706   2,202,865   2,100,084   2,055,339   2,011,193
 Held-For-Sale Loans 47,557   56,065   60,910   134,129   145,973
 Total Gross Loans * $ 2,872,263   $ 2,258,930   $ 2,160,994   $ 2,189,468   $ 2,157,166
* Gross loans receivable and total gross loans are not net of deferred fees and costs as shown in the consolidated balance sheet presentation                  

The following table presents the December 31, 2013 balance of gross loans by loan type and broken out by legacy Wilshire loans and loans acquired from former Mirae Bank, BankAsiana, and Saehan Bancorp.  

(Dollars In Thousands) BankAsiana*   Saehan Bancorp*   Mirae Bank*   Legacy Wilshire   Total
                   
Construction $ 5,030   $ --   $ --   $ 35,337   $ 40,367
Real Estate Secured 116,430   341,002   71,493   1,803,196   2,332,121
Commercial & Industrial 38,118   36,356   6,316   356,734   437,524
Consumer 10   2,376   3   12,305   14,694
 Gross Loans Receivable 159,588   379,734   77,812   2,207,572   2,824,706
 Held-For-Sale Loans 2,052   --   --   45,505   47,557
 Total Gross Loans $ 161,640   $ 379,734   $ 77,812   $ 2,253,077   $ 2,872,263
* Represents loans balances net of fair value adjustment                   

The following table shows quarterly loan originations by loan type: 

  Quarter Ended
(Dollars In Thousands) December 31, 2013 September 30, 2013 June 30, 2013 March 31, 2013 December 31, 2012
                     
Real Estate Secured $132,780 60% $145,361 68% $93,606 48% $86,839 45% $157,901 60%
Commercial & Industrial  30,541 14% 23,710 11% 40,927 21% 55,096 29% 34,059 13%
Consumer  546 0% 540 0% 75 0% 537 0% 3,083 1%
SBA  44,599 20% 36,001 17% 40,209 21% 27,379 14% 38,700 15%
Residential Mortgage 13,858 6% 8,714 4% 20,022 10% 22,831 12% 30,624 11%
 Total Loan Originations $222,324 100% $214,326 100% $194,839 100% $192,682 100% $264,367 100%

Originations for the fourth quarter of 2013 were $222.3 million, compared with $214.3 million in the third quarter of 2013. The increase was primarily due to an increase in SBA and commercial loan production.

Total SBA loans held-for-sale at the end of the fourth quarter of 2013 were $45.6 million, compared to $53.5 million at the end of the previous quarter. The decision to retain or sell SBA loan production is made on a quarter-to-quarter basis, depending on prevailing pricing in the secondary market and the Company's liquidity needs. 

Total deposits were $2.87 billion at December 31, 2013, compared with $2.25 billion at September 30, 2013. At December 31, 2013, $156.3 million in deposits were attributable to the acquisition of BankAsiana, and $482.2 million in deposits were attributable to the acquisition of Saehan Bancorp.

CREDIT QUALITY

The Company continued to experience relatively stable asset quality and a low level of credit losses during the fourth quarter of 2013. Accordingly, the Company determined that no provision for losses on loans and loan commitments was required for the fourth quarter of 2013. The allowance for loan losses totaled $53.6 million, or 1.90% of gross loans (excluding loans held-for-sale), at December 31, 2013, compared to $52.4 million, or 2.38% of gross loans (excluding loans held-for-sale), at September 30, 2013. The coverage ratio of the allowance for loan losses to non-performing assets was 119.9% at December 31, 2013, compared with 155.1% at September 30, 2013. 

Non-Performing Loans

At December 31, 2013, total non-performing loans were $37.2 million, or 1.30% of total gross loans, compared to $33.0 million, or 1.46% of total gross loans, at September 30, 2013. Approximately $2.2 million of the increase in non-performing loans during the fourth quarter of 2013 was attributable to credits added through the acquisitions of BankAsiana and Saehan Bancorp, which were recorded at fair value. The remainder of the increase in non-performing loans was primarily attributable to two commercial real estate loans totaling $2.8 million that were placed on non-accrual status during the fourth quarter.

Non-performing covered loans (previously acquired loans covered under FDIC loss share agreements) totaled $6.2 million at December 31, 2013.

The following table shows total non-performing loans by loan type:  

NON-PERFORMING LOANS Quarter Ended
(Dollars In Thousands, Net of SBA Guaranty Portions) Dec 31, 2013   Sep 30, 2013   Jun 30, 2013   Mar 31, 2013   Dec 31, 2012
                   
Construction $ 2,471   $ 2,471   $ 5,467   $ 5,542   $ 5,644
Real Estate Secured 33,569   29,568   20,090   19,366   21,007
Commercial & Industrial 1,196   1,004   1,224   1,169   1,302
 Total Non-Performing Loans $ 37,236   $ 33,043   $ 26,781   $ 26,077   $ 27,953

Gross Loan Charge-offs

Within the legacy Wilshire Bank portfolio, gross loan charge-offs for the fourth quarter of 2013 totaled $1.6 million, compared to $3.2 million in the third quarter of 2013. The Company also recorded $2.7 million in loan recoveries during the fourth quarter of 2013 of which $2.6 million were attributable to legacy Wilshire loans and the remaining recoveries were from previously charged-off covered loans. The increase in recoveries during the fourth quarter of 2013 was primarily due to one large recovery on a commercial real estate loan. Total net recoveries were $1.2 million for the fourth quarter of 2013, compared to net charge-offs of $2.5 million during the previous quarter.

Charge-offs by loan type is reflected in the table below: 

LOAN CHARGE-OFFS Quarter Ended  
(Dollars In Thousands) Dec 31, 2013   Sep 30, 2013   Jun 30, 2013   Mar 31, 2013   Dec 31, 2012
                   
Real Estate Secured $ 552   $ 2,438   $ 3,668   $ 4,405   $ 1,776
Commercial & Industrial 997   764   746   1,183   1,224
Consumer 2   --   --   1   --
Total Loan Charge-Offs $ 1,551   $ 3,202   $ 4,414   $ 5,589   $ 3,000

Other measures of credit quality are shown in the following tables: 

DELINQUENT LOANS -- By Days Past Due Quarter Ended
(Dollars In Thousands, Net of SBA Guaranty Portions) Dec 31, 2013   Sep 30, 2013   Jun 30, 2013   Mar 31, 2013   Dec 31, 2012
                   
30 - 59 Days Past Due $ 2,846   $ 2,336   $ 4,993   $ 7,438   $ 3,059
60 - 89 Days Past Due 2,527   2,827   3,637   1,193   1,174
90 Days, and still accruing 167   --   126   1,000   --
Total Delinquent Loans $ 5,540   $ 5,163   $ 8,756   $ 9,631   $ 4,233
                   
TROUBLED DEBT RESTRUCTURED LOANS Quarter Ended
(Dollars In Thousands, Net of SBA Guaranty Portions) Dec 31, 2013   Sep 30, 2013   Jun 30, 2013   Mar 31, 2013   Dec 31, 2012  
                     
Real Estate Secured $ 30,008   $ 23,133   $ 23,671   $ 23,588   $ 28,268  
Commercial & Industrial 6,212   6,339   6,730   7,279   7,465  
Total TDR Loans $ 36,220   $ 29,472   $ 30,401   $ 30,867   $ 35,733  
                     
LOAN CLASSIFICATIONS Quarter Ended
(Dollars In Thousands, Net of SBA Guaranty Portions) Dec 31, 2013   Sep 30, 2013   Jun 30, 2013   Mar 31, 2013   Dec 31, 2012
                   
Special Mention $ 100,798   $ 43,519   $ 49,571   $ 74,553   $ 82,275
Substandard 149,479   127,855   138,319   144,521   157,192
Doubtful 8,015   7,174   6,722   9,301   6,856
Total Criticized and Classified Loans $ 258,292   $ 178,548   $ 194,612   $ 228,375   $ 246,323
                   
Classified Loans $ 157,494   $ 135,029   $ 145,041   $ 153,822   $ 164,048

Special mentions loans totaled $100.8 million at December 31, 2013, an increase of $57.3 million from the end of the previous quarter. Approximately $35.1 million of the increase was due to the loans acquired from BankAsiana and Saehan Bancorp and the remaining increase of $22.1 million was due to legacy and covered special mention loans. Classified loans increased $22.5 million during the fourth quarter of 2013. Classified loans acquired from BankAsiana and Saehan Bancorp totaled $26.0 million at December 31, 2013. Legacy classified loans declined $4.6 million during the fourth quarter of 2013 and covered loans experienced an increase of $1.0 million during the same period.

CAPITAL RATIOS

All of the Company's capital ratios remain in excess of "well capitalized" regulatory requirements as shown in the following table: 

(Dollars In Thousands, Except Per Share Info)
December 31, 2013
Well Capitalized
Regulatory Requirements
Total Excess Above Well
Capitalized Requirements
       
Tier 1 Leverage Capital Ratio 13.32% 5.00% $268,425
Tier 1 Risk-Based Capital Ratio 14.65% 6.00% 253,725
Total Risk-Based Capital Ratio 15.91% 10.00% 173,269
Tangible Common Equity To Tangible Assets * 10.22% N/A N/A
Tangible Common Equity Per Common Share * $4.64 N/A N/A
___________________      
* "Tangible Common Equity" and "Tangible Assets" are Non-GAAP measure of financial performance. Please refer to the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" table at the end of this press release for a reconciliation of Tangible Common Equity to Shareholders' Equity and Tangible Assets to Total Assets 

Common Stock Issuance

On November 20, 2013, the Company issued 7,210,664 shares of Wilshire common stock to former Saehan Bancorp shareholders as part of the consideration for the acquisition. Consideration for the acquisition was paid in approximately 50% cash and 50% stock.

Share Repurchase Program

In March 2013, the Board of Directors of Wilshire Bancorp authorized the repurchase of up to 5% of the Company's outstanding shares of common stock. During the fourth quarter of 2013, the Company did not repurchase any shares. Since the program's inception, 651,412 shares of common stock have been repurchased for a total price of $3.2 million and an additional 2.9 million shares can be repurchased before the program's expiration. The program will expire on March 28, 2014 or upon completion of the repurchase of the authorized shares of common stock. However, the Company has no obligation to repurchase additional shares under this program and may suspend or discontinue it at any time.

CONFERENCE CALL

Management will host its quarterly conference call on January 28, 2014, at 11:00 a.m. PT (2:00 p.m. ET). Investment professionals are invited to participate in the call by dialing 866-543-6403 (domestic number) or 617-213-8896 (international number) and providing the passcode 40464259.

ABOUT WILSHIRE BANCORP

Headquartered in Los Angeles, Wilshire Bancorp is the parent company of Wilshire Bank, which operates 38 branch offices in California, Texas, New Jersey and New York, and nine loan production offices in Dallas and Houston, TX, Atlanta, GA, Aurora, CO, Annandale, VA, Fort Lee, NJ, Newark, CA, New York, NY, and Bellevue, WA, and is an SBA preferred lender nationwide. Wilshire 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. For more information, please go to www.wilshirebank.com.

FORWARD-LOOKING STATEMENTS

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. Undue reliance should not be placed on forward-looking statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K and our other filings made from time to time with the Securities and Exchange Commission. Specific factors that could cause future results to differ materially from historical performance and these forward-looking statements include, but are not limited to: (1) loan production and sales, (2) credit quality, (3) the ability to expand net interest margin, (4) the ability to continue to attract low-cost deposits, (5) success of expansion efforts, (6) competition in the marketplace, (7) political developments, war or other hostilities, (8) changes in the interest rate environment, (9) the ability of our borrowers to repay their loans, (10) the ability to maintain capital requirements and adequate sources of liquidity, (11) effects of or changes in accounting policies, (12) legislative or regulatory changes or actions, (13) the ability to attract and retain key personnel, (14) the ability to receive dividends from our subsidiaries, (15) the ability to secure confidential information through the use of computer systems and telecommunications networks, (16) weakening in the economy, specifically the real estate market, either nationally or in the states in which we do business, (17) the integration of our acquired businesses, and (18) general economic conditions. The information in this press release speaks only as of the date of this release and Wilshire Bancorp specifically disclaims any duty to update the information in this press 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.

           
CONSOLIDATED BALANCE SHEET          
(Dollars In Thousands) (Unaudited) December 31, September 30, Three Months December 31, Twelve Months
  2013 2013 % Change 2012 % Change
ASSETS:          
Cash and Due from Banks $124,064 $92,896 34% $118,495 5%
Federal Funds Sold and Other Cash Equivalents 46,590 55,005 -15% 55,005 -15%
Total Cash and Cash Equivalents 170,654 147,901 15% 173,500 -2%
           
Investment Securities Available For Sale 373,456 325,724 15% 332,504 12%
Investment Securities Held To Maturity 35 38 -8% 50 -30%
Total Investment Securities 373,491 325,762 15% 332,554 12%
           
Total Loans Held-For-Sale 47,557 56,065 -15% 145,973 -67%
           
 Real Estate Construction 39,268 31,172 26% 20,254 94%
 Residential Real Estate 124,373 144,845 -14% 136,189 -9%
 Commercial Real Estate 2,190,154 1,669,511 31% 1,587,623 38%
 Commercial and Industrial 448,379 340,943 32% 248,643 80%
 Consumer 14,668 9,614 53% 13,658 7%
Total Loans Receivable, Net of Deferred Fees and Costs 2,816,842 2,196,085 28% 2,006,367 40%
Allowance For Loan Losses (53,563) (52,397) 2% (63,285) -15%
Loans Receivable, Net of Allowance for Loan Losses 2,763,279 2,143,688 29% 1,943,082 42%
           
Accrued Interest Receivable 8,350 6,873 21% 7,290 15%
Due from Customers on Acceptances 1,517 328 363% 54 2709%
Other Real Estate Owned 7,600 748 916% 2,080 265%
Premises and Equipment 13,862 11,531 20% 11,630 19%
Federal Home Loan Bank (FHLB) Stock, at Cost 15,983 13,280 20% 12,090 32%
Cash Surrender Value of Life Insurance 22,519 22,372 1% 21,213 6%
Investment in affordable housing partnerships 43,316 44,400 -2% 39,154 11%
Deferred Income Taxes 38,509 19,823 94% 20,862 85%
Servicing Assets 16,108 11,573 39% 9,610 68%
Goodwill 71,929 6,675 978% 6,675 978%
FDIC Indemnification Asset 4,856 4,950 -2% 5,446 -11%
Other Assets 21,443 16,546 30% 19,650 9%
TOTAL ASSETS $3,620,973 $2,832,515 28% $2,750,863 39%
           
LIABILITIES AND SHAREHOLDERS' EQUITY:          
LIABILITIES:          
Non-interest Bearing Demand Deposits $832,152 $655,864 27% $586,003 42%
Savings and Interest Checking 145,549 127,835 14% 125,595 16%
Money Market Deposits 780,280 580,833 34% 640,266 22%
Time Deposits in denomination of $100,000 or more 870,074 683,290 27% 573,773 52%
Other Time Deposits 243,455 205,795 18% 241,172 1%
Total Deposits 2,871,510 2,253,617 27% 2,166,809 33%
           
FHLB Borrowings 190,325 120,000 59% 150,000 27%
Acceptance Outstanding 1,517 328 363% 54 2709%
Junior Subordinated Debentures 71,550 61,857 16% 61,857 16%
Accrued Interest Payable 2,418 1,808 34% 2,037 19%
Other Liabilities  44,235 30,589 45% 27,689 60%
Total Liabilities 3,181,555 2,468,199 29% 2,408,446 32%
           
SHAREHOLDERS' EQUITY:          
Common Stock  229,836 161,368 42% 164,790 39%
Retained Earnings 209,605 201,033 4% 170,816 23%
Accumulated Other Comprehensive Income (23) 1,915 N/A 6,811 N/A
Total Shareholders' Equity 439,418 364,316 21% 342,417 28%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,620,973 $2,832,515 28% $2,750,863 32%
           
CONSOLIDATED STATEMENT OF OPERATIONS          
(Dollars In Thousands, Except Per Share Data) (Unaudited)          
  Quarter Ended Three Mths Quarter Ended Twelve Mths
  December 31, 2013 September 30, 2013 % Change December 31, 2012 % Change
           
INTEREST INCOME          
Interest and Fees on Loans $33,954 $27,913 22% $27,472 24%
Interest on Investment Securities 2,113 1,879 12% 1,596 32%
Interest on Federal Funds Sold 120 148 -19% 155 -23%
Total Interest Income 36,187 29,940 21% 29,223 24%
           
INTEREST EXPENSE          
Deposits 3,446 2,923 18% 3,176 9%
FHLB Advances and Other Borrowings 413 321 29% 420 -2%
Total Interest Expense 3,859 3,244 19% 3,596 7%
           
Net Interest Income Before Credit for Losses on          
Loans and Loan Commitments 32,328 26,696 21% 25,627 26%
Credit for Losses on Loans and Loan Commitments -- -- 0% (12,000) -100%
           
Net Interest Income After Credit for Losses on 32,328 26,696 21% 37,627 -14%
Loans and Loan Commitments          
           
NONINTEREST INCOME          
 Service Charges on Deposits 3,002 2,791 8% 3,051 -2%
 Gain on Sales of Loans, Net 3,980 2,814 41% 1,159 243%
 Gain on Sale/Call of Investment Securities 4 -- 0% -- 0%
 Other 2,328 2,227 5% 2,529 -8%
 Total Noninterest Income 9,314 7,832 19% 6,739 38%
           
NONINTEREST EXPENSES          
 Salaries and Employee Benefits 12,948 8,830 47% 7,920 63%
 FDIC Indemnification Impairment -- -- 0% 3,900 -100%
 Occupancy & Equipment 2,712 2,061 32% 2,054 32%
 Data Processing 920 623 48% 688 34%
 Merger Related One-Time Expenses 1,785 1,011 77% -- 0%
 Other 6,288 5,312 18% 6,179 2%
Total Noninterest Expenses 24,653 17,837 38% 20,741 19%
           
 Income Before Income Taxes 16,989 16,691 2% 23,625 -28%
 Income Taxes Provision 6,075 5,357 13% 8,415 -28%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $10,914 $11,334 -4% $15,210 -28%
           
PER COMMON SHARE INFORMATION:          
 Basic Income Per Common Share $0.15 $0.16 -8% $0.21 -31%
 Diluted Income Per Common Share $0.15 $0.16 -8% $0.21 -31%
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:          
 Basic 74,082,711 70,742,136   71,294,573  
 Diluted 74,462,668 71,045,994   71,421,836  
       
CONSOLIDATED STATEMENT OF OPERATIONS      
(Dollars In Thousands, Except Per Share Data) (Unaudited)      
  Year Ended Twelve Months
  December 31, 2013 December 31, 2012 % Change
       
INTEREST INCOME      
Interest and Fees on Loans $115,722 $109,367 6%
Interest on Investment Securities 7,460 6,166 21%
Interest on Federal Funds Sold 557 1,424 -61%
Total Interest Income 123,739 116,957 6%
       
INTEREST EXPENSE      
Deposits 11,968 15,021 -20%
FHLB Advances and Other Borrowings 1,441 2,034 -29%
Total Interest Expense 13,409 17,055 -21%
       
Net Interest Income Before Credit for Losses on Loans and Loan Commitments 110,330 99,902 10%
Credit for Losses on Loans and Loan Commitments -- (34,000) -100%
       
Net Interest Income After Credit for Losses on 110,330 133,902 -18%
Loans and Loan Commitments      
       
NONINTEREST INCOME      
 Service Charges on Deposits 11,412 12,672 -10%
 Gain on Sales of Loans, Net 13,415 6,393 110%
 Gain on Sale/Call of Investment Securities 19 3 533%
 Other 9,337 9,181 2%
Total Noninterest Income 34,183 28,249 21%
       
NONINTEREST EXPENSES      
 Salaries and Employee Benefits 40,131 34,475 16%
 FDIC Indemnification Impairment -- 7,900 -100%
 Occupancy & Equipment 8,851 7,875 12%
 Data Processing 2,801 2,817 -1%
 Merger Related One-Time Expenses 2,797 -- 0%
 Other 22,276 21,112 6%
Total Noninterest Expenses 76,856 74,179 4%
       
 Income Before Income Taxes 67,657 87,972 -23%
 Income Taxes Provision (Benefit) 22,281 (4,333) N/A
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $45,376 $92,305 -51%
       
 Preferred Stock Cash Dividend -- (830) -100%
 Accretion of Preferred Stock Discount -- (1,158) -100%
 One-time Adjustment From Repurchase of Preferred Stock -- 3,389 -100%
Total Preferred Stock Related Adjustment -- 1,401 -100%
       
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $45,376 $93,706 -52%
       
PER COMMON SHARE INFORMATION:      
 Basic Income Per Common Share $0.63 $1.31 -52%
 Diluted Income Per Common Share $0.63 $1.31 -52%
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: --    
 Basic 71,771,116 71,288,484  
 Diluted 72,037,516 71,375,150  
             
SUMMARY OF FINANCIAL DATA             
(Dollars In Thousands, Except Per Share Data) (Unaudited)            
             
  Quarter Ended  
AVERAGE BALANCES December 31, 2013   September 30, 2013   December 31, 2012  
Average Assets $3,306,168   $2,798,913   $2,609,509  
Average Equity 401,153   359,411   334,380  
Average Total Loans  2,626,557   2,211,841   2,059,099  
Average Deposits 2,610,689   2,219,333   2,153,976  
Average Time Deposits of $100,000 or more 801,836   662,280   585,134  
Average FHLB & Other Borrowings 185,182   123,386   14,130  
 Average Interest Earning Assets 3,093,084   2,632,406   2,460,793  
             
  Twelve Months Ended  
AVERAGE BALANCES December 31, 2013       December 31, 2012  
Average Assets $2,901,224       $2,600,273  
Average Equity 366,357       305,833  
Average Total Loans  2,285,623       2,009,083  
Average Deposits 2,285,148       2,166,303  
Average Time Deposits of $100,000 or more 658,483       611,922  
Average FHLB & Other Borrowings 152,171       8,806  
Average Interest Earning Assets 2,731,077       2,477,697  
             
  Quarter Ended  
PROFITABILITY December 31, 2013   September 30, 2013   December 31, 2012  
Annualized Return on Average Assets 1.32%   1.62%   2.33%  
Annualized Return on Average Equity 10.88%   12.61%   18.19%  
Efficiency Ratio 59.20%   51.66%   64.08%  
Annualized Operating Expense/Average Assets 2.98%   2.55%   3.18%  
Annualized Net Interest Margin 4.20%   4.08%   4.33%  
             
  Twelve Months Ended  
PROFITABILITY December 31, 2013       December 31, 2012  
Annualized Return on Average Assets 1.56%       3.55%  
Annualized Return on Average Equity 12.39%       30.18%  
Efficiency Ratio 53.18%       57.88%  
Annualized Operating Expense/Average Assets 2.65%       2.85%  
Annualized Net Interest Margin 4.07%       4.22%  
             
             
DEPOSIT COMPOSITION 
December 31, 2013
Cost of
Funds

September 30 ,2013
Cost of
Funds

December 31, 2012
Cost of
Funds
Noninterest Bearing Demand Deposits 29.00% 0.00% 29.10% 0.00% 27.00% 0.00%
Savings & Interest Checking 5.10% 1.35% 5.70% 1.40% 5.80% 1.66%
Money Market Deposits 27.20% 0.65% 25.80% 0.63% 29.50% 0.66%
Time Deposits of $100,000 or More 30.30% 0.69% 30.30% 0.67% 26.50% 0.72%
Other Time Deposits 8.50% 0.81% 9.10% 0.82% 11.10% 0.84%
 Total Deposits 100.00% 0.53% 100.00% 0.53% 100.00% 0.59%
             
CAPITAL RATIOS December 31, 2013   September 30 ,2013   December 31, 2012  
Tier 1 Leverage Ratio 13.32%   14.83%   14.87%  
Tier 1 Risk-Based Capital Ratio 14.65%   18.24%   18.47%  
Total Risk-Based Capital Ratio 15.91%   19.50%   19.74%  
Total Shareholders' Equity $439,418   $364,316   $342,417  
Book Value Per Common Share $5.63   $5.15   $4.80  
Tangible Common Equity Per Common Share * $4.64   $5.04   $4.69  
Tangible Common Equity to Tangible Assets ** 10.22%   12.63%   12.20%  
             
* Tangible common equity excludes goodwill, other intangible assets
** Tangible assets excludes goodwill and intangible assets
           
ALLOWANCE FOR LOAN LOSSES          
(Dollars In Thousands) (Unaudited)          
  Quarter Ended
  December 31, 2013 September 30, 2013 June 30, 2013 March 31, 2013 December 31, 2012
           
Balance at Beginning of Period $52,397 $54,937 $58,577 $63,285 $74,353
Credit for Losses on Loans -- -- -- -- (10,600)
Recoveries on Loans Previously Charged-off 2,717 662 774 881 2,532
Gross Loan Charge-offs  (1,551) (3,202) (4,414) (5,589) (3,000)
Balance at End of Period $53,563 $52,397 $54,937 $58,577 $63,285
           
Net Loan Charge-offs/Average Net Loans -0.04% 0.12% 0.17% 0.23% 0.02%
Charge-offs/Average Total Loans 0.06% 0.15% 0.21% 0.27% 0.15%
Allowance for Loan Losses/Gross Loans * 1.90% 2.38% 2.62% 2.85% 3.15%
Allowance for Loan Losses/Legacy Wilshire Loans * 1.95% 2.48% 2.75% 3.01% 3.33%
Allowance for Loan Losses/Non-accrual Loans 144.50% 158.57% 206.10% 233.59% 226.40%
Allowance for Loan Losses/Non-performing Loans 144.85% 158.57% 205.13% 224.63% 226.40%
Allowance for Loan Losses/Non-performing Assets 119.46% 155.06% 197.88% 214.60% 210.73%
Allowance for Loan Losses/Classified Loans 34.01% 38.80% 37.88% 38.08% 38.58%
           
           
NON-PERFORMING ASSETS          
(Dollars In Thousands, Net of SBA Guaranty Portions)  Quarter Ended
(Unaudited) December 31, 2013 September 30, 2013 June 30, 2013 March 31, 2013 December 31, 2012
           
Non-accrual Loans $37,068 $33,043 $26,655 $25,077 $27,953
Loans 90 days or more past due and still accruing 168 -- 126 1,000 --
Total Non-performing Loans 37,236 33,043 26,781 26,077 27,953
           
Total OREO 7,600 748 982 1,219 2,079
           
Total Non-performing Assets $44,836 $33,791 $27,763 $27,296 $30,032
           
Total Non-performing Loans/Gross Loans 1.30% 1.46% 1.24% 1.19% 1.30%
Total Non-performing Assets/Total Assets 1.24% 1.19% 1.00% 0.99% 1.09%
           
           
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS  Quarter Ended
(Dollars In Thousands) (Unaudited) December 31, 2013 September 30, 2013 June 30, 2013 March 31, 2013 December 31, 2012
           
Balance at beginning of period $1,023 $1,023 $1,023 $1,023 $2,423
Credit for losses on off-balance sheet items 38 -- -- -- (1,400)
Balance at end of period $1,061 $1,023 $1,023 $1,023 $1,023
           
           
  Twelve Months Ended      
  December 31, 2013 December 31, 2012      
           
Balance at beginning of period $1,023 $3,423      
Credit for losses on off-balance sheet items 38 (2,400)      
Balance at end of period $1,061 $1,023      
                   
WILSHIRE BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(Dollars In Thousands) (Unaudited)
  For the Quarter Ended
  December 31, 2013 September 30, 2013 December 31, 2012
                   
  Average Interest Average Average Interest Average Average Interest Average
  Balance Income/ Yield/ Balance Income/ Yield/ Balance Income/ Yield/
INTEREST EARNING ASSETS   Expense Rate   Expense Rate   Expense Rate
                   
LOANS:                  
Real Estate Loans $2,211,155 $27,780 5.03% $1,858,506 $23,105 4.97% $1,749,807 $22,753 5.20%
Commercial Loans 411,421 5,143 5.00% 350,379 3,996 4.56% 300,138 3,703 4.94%
Consumer Loans 10,647 100 3.76% 9,032 71 3.14% 13,708 89 2.60%
Total Gross Loans 2,633,223 33,023 5.02% 2,217,917 27,172 4.90% 2,063,653 26,545 5.15%
Deferred Fees and Costs \ Loan Fees (6,666) 931   (6,076) 741   (4,554) 927  
Total Loans * 2,626,557 33,954 5.17% 2,211,841 27,913 5.05% 2,059,099 27,472 5.34%
                   
INVESTMENT SECURITIES AND OTHER INTEREST-EARNING ASSETS:                
Investment Securities** 360,675 2,113 2.55% 312,313 1,879 2.64% 297,205 1,596 2.42%
Federal Funds Sold 105,852 120 0.45% 108,252 148 0.55% 104,489 155 0.59%
 Total Investment Securities and Other Earning Assets 466,527 2,233 2.07% 420,565 2,027 2.10% 401,694 1,751 1.94%
                   
TOTAL INTEREST-EARNING ASSETS $3,093,084 $36,187 4.70% $2,632,406 $29,940 4.58% $2,460,793 $29,223 4.78%
                   
Total Non-Interest Earning Assets 213,084     166,507     148,716    
TOTAL ASSETS $3,306,168     $2,798,913     $2,609,509    
                   
INTEREST BEARING LIABILITIES                  
                   
INTEREST-BEARING DEPOSITS:                  
Money Market $687,948 $1,121 0.65% $590,669 $929 0.63% $653,020 $1,072 0.66%
NOW 29,212 15 0.21% 27,507 13 0.19% 27,317 14 0.21%
Savings 109,304 452 1.65% 101,204 437 1.73% 99,371 511 2.06%
Time Deposits of $100,000 or More 801,836 1,384 0.69% 662,280 1,109 0.67% 585,134 1,059 0.72%
Other Time Deposits 231,821 474 0.82% 212,848 435 0.82% 248,237 520 0.84%
Total Interest Bearing Deposits 1,860,121 3,446 0.74% 1,594,508 2,923 0.73% 1,613,079 3,176 0.79%
                   
BORROWINGS:                  
FHLB Advances and Other Borrowings 185,182 64 0.14% 123,386 37 0.12% 14,130 10 0.28%
Junior Subordinated Debentures 66,275 349 2.11% 61,857 284 1.84% 74,295 410 2.21%
Total Borrowings 251,457 413 0.66% 185,243 321 0.69% 88,425 420 1.90%
                   
TOTAL INTEREST BEARING LIABILITIES $2,111,578 $3,859 0.73% $1,779,751 $3,244 0.73% $1,701,504 $3,596 0.85%
                   
 Non-Interest Bearing Deposits 750,568     624,825     540,897    
 Other Liabilities 42,869     34,926     32,728    
 Shareholders' Equity 401,153     359,411     334,380    
TOTAL LIABILITIES AND EQUITY $3,306,168     $2,798,913     $2,609,509    
                   
NET INTEREST INCOME   $32,328     $26,696     $25,627  
.                  
NET INTEREST SPREAD     3.97%     3.85%     3.94%
                   
NET INTEREST MARGIN     4.20%     4.08%     4.20%
                   
* Allowance for loan losses excluded from average total loans and earning assets
** Tax equivalent ratios for investment securities
             
WILSHIRE BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(Dollars In Thousands) (Unaudited)
             
  For the Twelve Months Ended
  December 31, 2013 December 31, 2012
             
  Average Interest Average Average Interest Average
INTEREST EARNING ASSETS Balance Income/ Yield/ Balance Income/ Yield/
    Expense Rate   Expense Rate
             
LOANS:            
Real Estate Loans $1,915,929 $95,060 4.96% $1,703,516 $91,854 5.39%
Commercial Loans 364,462 17,162 4.71% 295,252 14,329 4.85%
Consumer Loans 10,940 327 2.99% 14,653 381 2.60%
Total Gross Loans 2,291,331 112,549 4.91% 2,013,421 106,564 5.29%
Deferred Fees and Costs \ Loan Fees (5,708) 3,173   (4,338) 2,803  
Total Loans * 2,285,623 115,722 5.06% 2,009,083 109,367 5.44%
             
INVESTMENT SECURITIES AND OTHER INTEREST-EARNING ASSETS:            
Investment Securities* 330,238 7,460 2.49% 297,860 6,166 2.35%
Federal Funds Sold 115,216 557 0.48% 170,754 1,424 0.83%
Total Investment Securities and Other Earning Assets 445,454 8,017 1.97% 468,614 7,590 1.80%
             
TOTAL INTEREST-EARNING ASSETS $2,731,077 $123,739 4.56% $2,477,697 $116,957 4.75%
             
Total Non-Interest Earnings Assets 170,147     122,576    
TOTAL ASSETS $2,901,224     $2,600,273    
             
INTEREST BEARING LIABILITIES            
             
INTEREST-BEARING DEPOSITS:            
Money Market $630,050 $3,996 0.63% $621,638 $4,768 0.77%
NOW 27,656 55 0.20% 26,154 71 0.27%
Savings 103,102 1,801 1.75% 100,740 2,371 2.35%
Time Deposits of $100,000 or More 658,483 4,300 0.65% 611,922 4,968 0.81%
Other Time Deposits 225,900 1,816 0.80% 295,305 2,843 0.96%
Total Interest Bearing Deposits 1,645,191 11,968 0.73% 1,655,759 15,021 0.91%
             
BORROWINGS:            
FHLB Advances and Other Borrowings 152,171 244 0.16% 8,806 16 0.18%
Junior Subordinated Debentures 62,971 1,197 1.90% 83,883 2,018 2.41%
Total Borrowings 215,142 1,441 0.67% 92,689 2,034 2.19%
             
TOTAL INTEREST BEARING LIABILITIES $1,860,333 $13,409 0.72% $1,748,448 $17,055 0.98%
             
 Non-Interest Bearing Deposits 639,957     510,544    
 Other Liabilities 34,577     35,448    
 Shareholders' Equity 366,357     305,833    
TOTAL LIABILITIES AND EQUITY $2,901,224     $2,600,273    
             
NET INTEREST INCOME   $110,330     $99,902  
             
NET INTEREST SPREAD     3.84%     3.78%
             
NET INTEREST MARGIN     4.07%     4.07%
             
* Allowance for loan losses excluded from average total loans and earning assets
** Tax equivalent ratios for investment securities
       
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES:
       
TANGIBLE COMMON EQUITY AND TANGIBLE ASSETS *      
(Dollars In Thousands, Except Share Data) (Unaudited) Quarter Ended
  December 31, 2013 September 30, 2013 December 31, 2012
       
Total shareholders' equity $439,418 $364,316 $342,417
 Goodwill and other intangible assets, net (74,104) (7,502) (7,712)
Tangible common equity  $365,314 $356,814 $334,705
       
Total assets $3,617,084 $2,832,515 $2,750,863
 Goodwill and other intangible assets, net (74,104) (7,502) (7,712)
Tangible assets $3,542,980 $2,825,013 $2,743,151
       
Common shares outstanding 78,061,307 70,770,019 71,295,144
       
       
PRE-TAX, PRE-PROVISION INCOME (PTPP) *      
(Dollars In Thousands) (Unaudited) Quarter Ended
  December 31, 2013 September 30, 2013 December 31, 2012
       
Net Income $10,914 $11,334 $15,210
Add Back - Income Tax Provision (Benefit) 6,075 5,357 8,415
Add Back - Credit for Losses on Loans and Loan Commitments -- -- (12,000)
Pre-tax, Pre-Provision Income (PTPP) $16,989 $16,691 $11,625
Merger Related Expenses 1,785 1,011 --
PTPP, Excluding Merger Related Expenses $18,774 $17,702 $11,625
       
PTPP to Average Assets (Annualized) 2.06% 2.39% 1.78%
       
       
  Twelve Months Ended  
  December 31, 2013 December 31, 2012  
       
Net Income $45,376 $93,706  
Add Back - Income Tax Provision (Benefit) 22,281 (4,333)  
Add Back - Credit for Losses on Loans and Loan Commitments -- (34,000)  
Pre-tax, Pre-Provision Income (PTPP) $67,657 $53,972  
Merger Related Expenses 2,797 --  
PTPP, Excluding Merger Related Expenses $70,454 $59,973  
       
PTPP to Average Assets (Annualized) 2.33% 2.08%  
       
* Tangible Common Equity, Tangible Assets, and Pre-tax, Pre-provision Income are Non-GAAP financial measures. Management believes that presentation of non-GAAP financial information included in this press release are meaningful and useful in understanding the business metrics of the Company's operations. We provide non-GAAP financial information for informational purposes and to enhance an understanding of the Company's GAAP consolidated financial statements. Readers should consider this non-GAAP information in addition to, but not instead or as superior to, the Company's financial statements in accordance with GAAP. Non-GAAP financial information presented by us may be determined or calculated differently by other companies, limiting the usefulness of non-GAAP measures for comparative purposes
WILSHIRE BANCORP, INC.
Alex Ko, EVP & CFO, (213) 427-6560
www.wilshirebank.com