BBCN Bancorp Reports 2015 First Quarter Financial Results


Q1 2015 Summary:

  • Net income totals $21.4 million, or $0.27 per diluted common share
  • New loan originations for the quarter total $351 million
  • Loans receivable increase 3% to $5.71 billion, or 10% annualized
  • Total deposits increase 2% to $5.80 billion, or 8% annualized
  • Total assets increase 2% to $7.26 billion, or 9% annualized

LOS ANGELES, April 20, 2015 (GLOBE NEWSWIRE) -- BBCN Bancorp, Inc. (the "Company") (Nasdaq:BBCN), the holding company of BBCN Bank (the "Bank"), today reported net income of $21.4 million, or $0.27 per diluted common share, for the three months ended March 31, 2015. This compares with net income of $22.7 million, or $0.29 per diluted common share, for the preceding 2014 fourth quarter and $22.2 million, or $0.28 per diluted common share, for the year-ago first quarter.

"Strong organic loan and deposit growth, along with improvements in asset quality, highlight BBCN's 2015 first quarter," said Kevin S. Kim, Chairman and Chief Executive Officer of BBCN Bancorp, Inc. "New loan production for the first quarter exceeded the seasonally higher fourth quarter originations by 15% and totaled $351 million. Deposit trends were also positive with noninterest bearing demand deposits increasing to 28% of total deposits. We experienced improvements in asset quality across the board, with a 16% decline in nonaccrual loans and net recoveries of $366,000 for the first quarter. While we continue to be challenged by the low interest rate environment and diminishing purchase accounting benefit, we are very pleased to have posted another quarter of solid operational and financial performance to start off 2015.

"After considerable investment in 2014, we are taking a major step forward in BBCN's transformation to become a more diversified financial institution with the launch of our new residential mortgage, wealth management and credit card business lines. We expect a strong reception by our existing customer base to BBCN's expanded offering of financial products and services and believe these new businesses will not only deepen our existing relationships, but also open the door for more customer acquisition opportunities, ultimately leading to enhanced earnings and shareholder value for BBCN in the years to come," said Kim.

Financial Highlights

(dollars in thousands, except per share data) At or for the Three Months Ended
  3/31/2015 12/31/2014 3/31/2014
Net income $21,410 $22,687 $22,196
Diluted earnings per share $0.27 $0.29 $0.28
Net interest income before provision for loan losses $65,123 $66,234 $64,966
Net interest margin 3.87% 3.90% 4.29%
Noninterest income $11,205 $12,050 $11,095
Noninterest expense $39,234 $39,010 $36,275
Net loans receivable $5,641,299 $5,497,434 $5,125,095
Deposits $5,803,253 $5,693,452 $5,334,560
Nonaccrual loans (1) $38,755 $46,352 $47,314
ALLL to loans receivable 1.22% 1.22% 1.27%
ALLL to nonaccrual loans (1) 179.57% 146.18% 138.86%
ALLL to nonperforming assets (1) (2) 59.86% 53.87% 62.66%
Provision for loan losses $1,500 $2,360 $3,026
Net (recoveries) charge offs $(336) $2,834 $4,647
ROA 1.19% 1.28% 1.36%
ROE 9.60% 10.42% 10.84%
Efficiency ratio 51.40% 49.83% 47.69%
 
(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.0 million, $28.9 million and $31.2 million at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.
(2) Nonperforming assets exclude acquired credit impaired loans totaling $24.1 million, $30.4 million and $46.0 million at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

Operating Results for the 2015 First Quarter

The comparability of BBCN's operating results with past performance is impacted by acquisition accounting adjustments related to past acquisitions. The Company provides the following supplemental information to facilitate a better understanding of past financial performance. Operating results for the three months ended March 31, 2015, December 31, 2014, and March 31, 2014 include the following pre-tax acquisition accounting adjustments related to past acquisitions:

(dollars in thousands) Three Months Ended
  3/31/2015 12/31/2014 3/31/2014
Accretion of discount on acquired performing loans $2,183 $3,190 $3,202
Accretion of discount on acquired credit impaired loans 1,555 1,670 2,645
Amortization of premium on acquired FHLB borrowings 94 96 92
Accretion of discount on acquired subordinated debt (41) (41) (91)
Amortization of premium on acquired time deposits 75 105 314
Increase to pre-tax income $3,866 $5,020 $6,162

Net Interest Income and Net Interest Margin. Net interest income before provision for loan losses for the 2015 first quarter amounted to $65.1 million, compared with $66.2 million in the preceding fourth quarter of 2014 and $65.0 million in the prior-year first quarter. While the average loans receivable reflect solid gains over prior periods, diminishing acquisition accounting adjustments and lower yields on interest earning assets had the adverse effect of constraining the growth in net interest income. Overall, average loans receivable for the 2015 first quarter rose 2% over the preceding fourth quarter and increased 8% over the first quarter of 2014.

The net interest margin (net interest income divided by average interest earning assets) and the impact of acquisition accounting adjustments are summarized in the following table:

  Three Months Ended
  3/31/2015 12/31/2014 change 3/31/2014 change
Net interest margin, excluding the effect of acquisition accounting adjustments 3.61% 3.57% 0.04% 3.82% (0.21)%
Acquisition accounting adjustments 0.26 0.33 (0.07) 0.47 (0.21)
Net interest margin 3.87% 3.90% (0.03)% 4.29% (0.42)%

The net interest margin for the 2015 quarter declined 3 basis points from the preceding fourth quarter to 3.87%, but increased 4 basis points on a core basis when excluding the effect of acquisition accounting adjustments. Compared with the year-ago first quarter, net interest margin for the 2015 first quarter declined 42 basis points and decreased 21 basis points when excluding the effect of acquisition accounting adjustments. The Company attributed the pressures on net interest margin largely to declines in the weighted average yield on loans.

The weighted average yield on loans and the impact of acquisition accounting adjustments are summarized in the following table:

  Three Months Ended
  3/31/2015 12/31/2014 change 3/31/2014 change
Weighted average yield on loans, excluding the effect of acquisition accounting adjustments 4.71% 4.71% 0.00% 4.83% (0.12)%
Acquisition accounting adjustments 0.32 0.40 (0.08) 0.54 (0.22)
Weighted average yield on loans 5.03% 5.11% (0.08)% 5.37% (0.34)%

The weighted average yield on loans for the 2015 first quarter declined 8 basis points to 5.03% from the preceding fourth quarter. On a core basis excluding the effect of acquisition accounting adjustments, the weighted average yield on loans was flat at 4.71%. The weighted average yield on new loans originated during the 2015 first quarter decreased to 4.07% from 4.39% in the preceding fourth quarter, reflecting higher origination levels of variable rate loans and commercial loans. Variable rate loans, which typically have lower initial rates than fixed rate loans, accounted for 68% of new loan originations for the 2015 first quarter and marked the third consecutive period in which variable rate loan volumes exceeded fixed rate loans.

Compared with the prior-year period, the weighted average yield on loans decreased 34 basis points and 12 basis points on a core basis, excluding the effect of acquisition accounting adjustments.

The composition of fixed and variable rate loans and the associated weighted average contractual rates are summarized in the following table: 

  3/31/2015 12/31/2014 change 3/31/2014 change
Fixed rate loans          
As a percentage of total loans 52% 52% —% 49% 3%
Weighted average contractual rate 4.72% 4.75% (0.03)% 4.90% (0.18)%
Variable rate loans          
As a percentage of total loans 48% 48% —% 51% (3)%
Weighted average contractual rate 4.14% 4.17% (0.03)% 4.33% (0.19)%

The declines in the weighted average contractual rate for the 2015 first quarter versus prior periods reflect what continues to be a highly competitive rate environment for fixed rate and variable rate loans in the current interest rate environment.

The weighted average cost of deposits and the impact of acquisition accounting adjustments are summarized in the following table: 

  Three Months Ended
  3/31/2015 12/31/2014 change 3/31/2014 change
Weighted average cost of deposits, excluding the effect of acquisition accounting adjustments 0.56% 0.56% —% 0.55% 0.01%
Acquisition accounting adjustments (0.01) (0.01) (0.03) (0.02)
Weighted average cost of deposits 0.55% 0.55% —% 0.52% 0.03%

The weighted average cost of deposits for the 2015 first quarter was flat with the preceding fourth quarter both on a reported basis and on a core basis, excluding the effect of amortization of premium on time deposits assumed in acquisitions. Compared with the prior-year period, the weighted average cost of deposits for the 2015 first quarter increased 3 basis points and just 1 basis point on a core basis, excluding the effect of premium amortization on time deposits assumed in acquisitions.

Noninterest Income Noninterest income for the 2015 first quarter totaled $11.2 million, compared with $12.1 million in the preceding 2014 fourth quarter and $11.1 million in the prior-year first quarter. The variances in noninterest income is largely attributable to the amount of gain on sale of SBA loans, which amounted to $3.0 million in the 2015 first quarter, $4.1 million in the 2014 fourth quarter, and $2.7 million for the year-ago first quarter.

Noninterest Expense.  Total noninterest expense for the 2015 first quarter increased to $39.2 million from $39.0 million in the preceding 2014 fourth quarter and $36.3 million in the first quarter a year ago.

Salaries and employee benefits expense for the 2015 first quarter rose 10% over the preceding fourth quarter, and is largely attributed to higher levels of payroll tax and vacation accruals. The total number of FTEs as of March 31, 2015 was 933, compared with 915 as of December 31, 2014 and 860 as of March 31, 2014. Compared with the 2014 first quarter, salaries and employee benefits expense increased 12%.

Income Tax Provision. The effective tax rate for the 2015 first quarter was 40.0%, compared with 38.5% for the preceding 2014 fourth quarter and 39.6% for the 2014 first quarter.

Balance Sheet Summary

Loans receivable totaled $5.71 billion at March 31, 2015, reflecting a 3% increase over $5.57 billion at December 31, 2014, and a 10% increase over $5.19 billion at March 31, 2014.

Total new loan originations during the first quarter of 2015 amounted to $350.8 million, including SBA loan originations of $65.3 million. Sales of SBA loans to the secondary market and gains derived from those sales are based substantially on the production of SBA 7(a) loans. Production of SBA 7(a) loans amounted to $42.9 million for the first quarter of 2015, compared with $48.3 million for the preceding 2014 fourth quarter. During the 2015 first quarter, the Company sold $32.5 million of its SBA loans held for sale.

Aggregate pay offs and pay downs for the 2015 first quarter amounted to $166.3 million for the quarter, compared with $262.2 million for the preceding 2014 fourth quarter and $195.9 million for the year-ago first quarter.

Total deposits amounted to $5.80 billion at March 31, 2015, reflecting a 2% increase over $5.69 billion at December 31, 2014, and a 9% increase over $5.33 billion at March 31, 2014. The increase in total deposits from December 31, 2014 reflects a 5% increase in noninterest bearing demand deposits and a 6% increase in jumbo time deposits, offset in part by a 4% decrease in money market account balances. Noninterest bearing deposits at March 31, 2015 totaled $1.62 billion and accounted for 28% of total deposits.

Credit Quality

The provision for loan losses for the 2015 first quarter was $1.5 million, compared with $2.4 million for the preceding 2014 fourth quarter and $3.0 million for the prior-year first quarter.

For a more detailed understanding of the changes in the Allowance for Loan and Lease Losses ("ALLL"), the composition of the ALLL has been segmented for disclosure purposes between loans accounted for under the amortized cost method (referred to as "Legacy Loans") and loans acquired through the Center Financial, Pacific International and Foster transactions (referred to as "Acquired Loans"). The Acquired Loans are further segregated between performing and credit impaired loans.

The composition of the ALLL as of March 31, 2015, December 31, 2014, and March 31, 2014 is as follows:

(dollars in thousands) 3/31/2015 12/31/2014 3/31/2014
Legacy Loans (1) $55,397 $58,644 $58,203
Acquired Loans - Performing (2) 1,550 1,767 1,937
Acquired Loans - Credit Impaired (2) 12,647 7,347 5,560
Total ALLL $69,594 $67,758 $65,700
       
Loans Receivable $5,710,893 $5,565,192 $5,190,794
ALLL coverage ratio 1.22% 1.22% 1.27%
       
(1)   Legacy Loans include loans originated by the Bank's predecessor bank, loans originated by BBCN and loans that were acquired and that have been refinanced as new loans.
(2) Acquired Loans were marked to fair value at acquisition date, and the allowance for loan losses reflect provisions for credit deterioration since the acquisition date.

Following are the components of criticized loan balances as of March 31, 2015, December 31, 2014, and March 31, 2014:

(dollars in thousands) 3/31/2015 12/31/2014 3/31/2014
Special Mention (1) $112,298 $122,334 $93,554
Classified (1) 209,991 224,062 253,342
Criticized $322,289 $346,396 $346,896
 
(1)  Balances include Acquired Loans which were marked to fair value on the date of acquisition.

The Company defines nonperforming loans to include delinquent loans past due 90 days or more on nonaccrual status, delinquent loans past due 90 days or more on accrual status (excluding acquired credit impaired loans) and accruing restructured loans.

Nonaccrual loans declined to $38.8 million, or 0.68% of loans receivable at March 31, 2015. This compares with nonaccrual loans of $46.4 million, or 0.83% of loans receivable, at December 31, 2014 and $47.3 million, or 0.91% of loans receivable, at March 31, 2014. Accruing restructured loans totaled $57.9 million at March 31, 2015, compared with $57.1 million at December 31, 2014 and $37.5 million at March 31, 2014. Total nonperforming loans at March 31, 2015 decreased to $96.7 million, or 1.69% of loans receivable, compared with $103.8 million, or 1.87% of loans receivable, at December 31, 2014 and $84.8 million, or 1.63% of loans receivable, at March 31, 2014.

Nonperforming assets, including other real estate owned, amounted to $116.3 million at March 31, 2015, or 1.60% of total assets, compared with $125.8 million, or 1.76% of total assets, at December 31, 2014, and $104.8 million, or 1.57% of total assets, at March 31, 2014.

The Company recorded net recoveries of $336,000 for the 2015 first quarter, equal to 0.02% of average loans receivable on an annualized basis. This compares with net loan charge offs of $2.8 million, or 0.21% of average loans receivable on an annualized basis, for the preceding 2014 fourth quarter and $4.6 million, or 0.36% of average loans receivable on an annualized basis, for the year-ago first quarter.

The allowance for loan losses at March 31, 2015 was $69.6 million, or 1.22% of loans receivable (excluding loans held for sale), compared with $67.8 million, or 1.22%, at December 31, 2014 and $65.7 million, or 1.27%, at March 31, 2014.   The coverage ratio of the allowance for loan losses to nonperforming loans (excluding acquired credit impaired loans) was 72.00% at March 31, 2015, versus 65.25% at December 31, 2014 and 77.44% at March 31, 2014.

Impaired loans (defined as loans for which it is probable that not all principal and interest payments due will be collected in accordance with the contractual terms and restructured loans) totaled $122.7 million at March 31, 2015, compared with $127.1 million at December 31, 2014 and $121.8 million at March 31, 2014.

Capital

At March 31, 2015, the Company continued to exceed all regulatory capital requirements to be classified as a "well-capitalized" institution, as summarized in the following table.

  3/31/2015 12/31/2014 3/31/2014
Leverage Ratio 11.72% 11.62% 11.66%
Tier 1 Risk-based Ratio 13.36% 13.64% 13.70%
Total Risk-based Ratio 14.50% 14.80% 14.89%

Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:

  3/31/2015 12/31/2014 3/31/2014
Tangible common equity per share (1) $9.93 $9.72 $9.08
Tangible common equity to tangible assets (1) 11.03% 11.00% 11.00%

(1)  Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and net other intangible assets divided by total assets less goodwill and net other intangible assets. Management reviews tangible common equity to tangible assets in evaluating the Company's capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital. The accompanying financial information includes a reconciliation of the ratio of tangible common equity to tangible assets with stockholders' equity and total assets.

Investor Conference Call

The Company will host an investor conference call on Tuesday, April 21, 2015 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the 2015 first quarter. Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international), and asking for the "BBCN Bancorp Call." Other interested parties are invited to listen to a live webcast of the call available at the Investor Relations section of BBCN Bancorp's website at www.BBCNbank.com. After the live webcast, a replay will remain available in the Investor Relations section of BBCN Bancorp's website for one year. A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) through April 28, 2015, passcode 10063803.

About BBCN Bancorp, Inc.

BBCN Bancorp, Inc. is the holding company of BBCN Bank, the largest Korean-American bank in the nation with $7.3 billion in assets as of March 31, 2015. Headquartered in Los Angeles and serving a diverse mix of customers mirroring its communities, BBCN operates 50 branches in California, New York, New Jersey, Illinois, Washington and Virginia; eight loan production offices in Seattle, Denver, Dallas, Atlanta, Northern California, Annandale, Virginia, Portland, Oregon and Fremont, California; and a representative office in Seoul, Korea. BBCN specializes in core business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and business lending, SBA lending and international trade financing. BBCN Bank is a California-chartered bank and its deposits are insured by the FDIC to the extent provided by law. BBCN is an Equal Opportunity Lender.

Forward-Looking Statements

This press release may contain forward-looking statements, including statements about future operations and projected financial results that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include but are not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services, and pricing. Readers should carefully review the risk factors and the information that could materially affect the Company's financial results and business, described in documents the Company files from time to time with the Securities and Exchange Commission, including its quarterly reports on Form 10-Q and Annual Reports on Form 10-K, and particularly the discussions of business considerations and certain factors that may affect results of operations and stock price set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.

(tables follow)

BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 
Assets
3/31/2015

12/31/2014
% change
3/31/2014
% change
Cash and due from banks $429,871 $462,160 (7)% $403,111 7%
Securities available for sale, at fair value 812,372 796,523 2% 725,229 12%
Federal Home Loan Bank, Federal Reserve Bank stock and other investments 28,673 28,708 —% 27,902 3%
Loans held for sale, at the lower of cost or fair value 26,178 28,311 (8)% 38,157 (31)%
Loans receivable 5,710,893 5,565,192 3% 5,190,794 10%
Allowance for loan losses (69,594) (67,758) (3)% (65,699) (6)%
Net loans receivable 5,641,299 5,497,434 3% 5,125,095 10%
Accrued interest receivable 13,904 13,634 2% 13,410 4%
Premises and equipment, net 30,074 30,722 (2)% 31,290 (4)%
Bank owned life insurance 46,196 45,927 1% 45,062 3%
Goodwill 105,401 105,401 —% 105,401 —%
Servicing assets 10,529 10,341 2% 9,507 11%
Other intangible assets, net 3,620 3,887 (7)% 4,859 (25)%
Other assets 119,788 117,282 2% 138,528 (14)%
Total assets $7,267,905 $7,140,330 2% $6,667,551 9%
           
Liabilities          
Deposits $5,803,253 $5,693,452 2% $5,334,560 9%
Borrowings from Federal Home Loan Bank 480,881 480,975 —% 421,260 14%
Subordinated debentures 42,199 42,158 —% 42,037 —%
Accrued interest payable 6,477 5,855 11% 5,740 13%
Other liabilities 35,897 35,117 2% 31,795 13%
Total liabilities 6,368,707 6,257,557 2% 5,835,392 9%
           
Stockholders' Equity          
Common stock, $0.001 par value; authorized, 150,000,000 shares at March 31, 2015, December 31, 2014, and March 31, 2014; issued and outstanding, 79,542,321, 79,503,552, and 79,488,899 shares and at March 31, 2015, December 31, 2014, and March 31, 2014, respectively 79 79 —% 79 —%
Capital surplus 541,824 541,589 —% 540,979 —%
Retained earnings 352,807 339,400 4% 294,842 20%
Accumulated other comprehensive income, net 4,488 1,705 163% (3,741) 220%
Total stockholders' equity 899,198 882,773 2% 832,159 8%
Total liabilities and stockholders' equity $7,267,905 $7,140,330 2% $6,667,551 9%
   
  Three Months Ended
  3/31/2015 12/31/2014 % change 3/31/2014 % change
Interest income:          
Interest and fees on loans $69,639 $70,999 (2)% $68,694 1%
Interest on securities 4,219 3,973 6% 4,095 3%
Interest on federal funds sold and other investments 696 795 (12)% 565 23%
Total interest income 74,554 75,767 (2)% 73,354 2%
           
Interest expense:          
Interest on deposits 7,754 7,797 (1)% 6,690 16%
Interest on other borrowings 1,677 1,736 (3)% 1,698 (1)%
Total interest expense 9,431 9,533 (1)% 8,388 12%
           
Net interest income before provision for loan losses 65,123 66,234 (2)% 64,966 —%
Provision for loan losses 1,500 2,360 (36)% 3,026 (50)%
Net interest income after provision for loan losses 63,623 63,874 —% 61,940 3%
           
Noninterest income:          
Service fees on deposit accounts 3,061 3,398 (10)% 3,472 (12)%
Net gains on sales of SBA loans 3,044 4,062 (25)% 2,722 12%
Net gains on sales of other loans 182 100% 100%
Net gains on sales of securities available-for-sale 424 100% 100%
Net gains (loss) on sales of OREO 110 47 134% 406 (73)%
Other income and fees 4,384 4,543 (3)% 4,495 (2)%
Total noninterest income 11,205 12,050 (7)% 11,095 1%
           
Noninterest expense:          
Salaries and employee benefits 21,181 19,273 10% 18,938 12%
Occupancy 4,692 5,070 (7)% 4,623 1%
Furniture and equipment 2,263 2,190 3% 2,014 12%
Advertising and marketing 1,391 1,295 7% 1,088 28%
Data processing and communications 2,349 2,270 3% 2,122 11%
Professional fees 1,424 1,687 -0.16 1,313 0.08
FDIC assessment 1,112 1,115 0 1,023 0.09
Merger and integration expenses 52 32 0.63 173 -0.7
Credit related expenses 2,189 2,997 -0.27 1,421 0.54
Other 2,581 3,081 -0.16 3,560 -0.28
Total noninterest expense 39,234 39,010 0.01 36,275 0.08
Income before income taxes 35,594 36,914 -0.04 36,760 -0.03
Income tax provision 14,236 14,227 0 14,564 -0.02
Net income $21,358 $22,687 (6)% $22,196 (4)%
           
Earnings Per Common Share:          
Basic $0.27 $0.29   $0.28  
Diluted $0.27 $0.29   $0.28  
           
Average Shares Outstanding:          
Basic 79,526,218 79,500,638   79,489,579  
Diluted 79,602,122 79,596,391   79,639,839  
             
  Three Months Ended
  3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Net Income $21,358 $22,687 $21,420 $22,312 $22,196
Add back: Income tax 14,236 14,227 14,180 14,935 14,564
Add back: Provision for loan losses 1,500 2,360 4,256 2,996 3,026
Pre-tax, pre-provision income (PTPP) 1 $37,094 $39,274 $39,856 $40,243 $39,786
PTPP to average assets (annualized) 2.07% 2.21% 0.0232 2.36% 0.0244
           
While pre-tax, pre-provision income is a non-GAAP performance measure, we believe it is a useful measure in analyzing underlying performance trends. It is the level of earnings adjusted to exclude the impact of income tax and provision expense.
           
           
  At or for the Three Months Ended
(Annualized)
   
Profitability measures: 3/31/2015 12/31/2014 3/31/2014    
 ROA 1.19% 1.28% 1.36%    
 ROE 9.6% 10.42% 10.84%    
 Return on average tangible equity 2 10.94% 11.91% 12.52%    
 Net interest margin 3.87% 3.9% 4.29%    
 Efficiency ratio 51.4% 49.83% 47.69%    
           
Average tangible equity is calculated by subtracting average goodwill and average core deposit intangibles assets from average stockholders' equity. This is non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position.
       
  Three Months Ended Three Months Ended Three Months Ended
  3/31/2015 12/31/2014 3/31/2014
    Interest Annualized   Interest Annualized   Interest  Annualized
  Average Income/ Average Average Income/ Average Average Income/  Average
  Balance Expense Yield/Cost Balance Expense Yield/Cost Balance Expense  Yield/Cost
INTEREST EARNING ASSETS:                  
Loans receivable, including loans held for sale $5,617,929 $69,639 5.03% $5,508,850 $70,999 5.11% $5,183,801 $68,694 5.37%
Securities available for sale 782,305 4,219 2.16% 716,245 3,973 2.22% 698,931 4,095 2.34%
FRB and FHLB stock and other investments 410,973 696 0.68% 520,225 795 0.60% 259,107 565 0.87%
Total interest earning assets 6,811,206 74,554 4.44% 6,745,320 75,767 4.46% 6,141,839 73,354 4.84%
                   
INTEREST BEARING LIABILITIES:                  
Deposits:                  
Demand, interest-bearing 1,625,641 2,765 0.69% 1,686,608 2,936 0.69% 1,392,300 2,277 0.66%
Savings 195,063 424 0.88% 199,387 459 0.91% 217,426 600 1.12%
Time deposits:                  
$100,000 or more 1,713,331 3,377 0.80% 1,606,508 3,185 0.79% 1,561,170 2,679 0.70%
Other 626,197 1,187 0.77% 649,961 1,217 0.74% 663,978 1,134 0.69%
Total time deposits 2,339,528 4,564 0.79% 2,256,469 4,402 0.77% 2,225,148 3,813 0.69%
Total interest bearing deposits 4,160,232 7,754 0.76% 4,142,464 7,797 0.75% 3,834,874 6,690 0.71%
FHLB advances 480,942 1,297 1.09% 481,340 1,351 1.11% 421,318 1,211 1.17%
Other borrowings 40,624 380 3.74% 40,578 385 3.72% 52,400 487 3.72%
Total interest bearing liabilities 4,681,798 9,430 0.82% 4,664,382 9,533 0.81% 4,308,592 8,388 0.79%
Noninterest bearing demand deposits 1,543,144     1,514,678     1,353,719    
Total funding liabilities/cost of funds $6,224,942   0.61% $6,179,060   0.61% $5,662,311   0.60%
Net interest income/net interest spread   65,124 3.62%   66,234 3.65%   64,966 4.05%
Net interest margin     3.87%     3.90%     4.29%
Net interest margin, excluding effect of nonaccrual loan income (expense)     3.88%     3.91%     4.30%
Net interest margin, excluding effect of nonaccrual loan income (expense) and prepayment fee income     3.85%     3.89%     4.26%
Nonaccrual loan income (reversed) recognized   (24)     (164)     (197)  
Prepayment fee income received   510     206     309  
Net   486     42     112  
                   
Cost of deposits:                  
Noninterest bearing demand deposits 1,543,144   1,514,678   1,353,719  
Interest bearing deposits 4,160,232 7,754 0.76% 4,142,464 7,797 0.75% 3,834,874 6,690 0.71%
Total deposits $5,703,376 $7,754 0.55% $5,657,142 $7,797 0.55% $5,188,593 $6,690 0.52%
                       
  Three Months Ended
  3/31/2015 12/31/2014 % change 3/31/2014 % change
AVERAGE BALANCES          
Loans receivable, including loans held for sale $5,617,929 $5,508,850 2% $5,183,801 8%
Investments 1,193,278 1,236,470 (3)% 958,038 25%
Interest earning assets 6,811,206 6,745,320 1% 6,141,839 11%
Total assets 7,161,811 7,099,418 1% 6,525,548 10%
           
Interest bearing deposits 4,160,232 4,142,464 —% 3,834,874 8%
Interest bearing liabilities 4,681,798 4,664,382 —% 4,308,592 9%
Noninterest bearing demand deposits 1,543,144 1,514,678 2% 1,353,719 14%
Stockholders' equity 890,206 871,291 2% 819,344 9%
Net interest earning assets 2,129,408 2,080,938 2% 1,833,247 16%
           
  3/31/2015 12/31/2014 % change 3/31/2014 % change
LOAN PORTFOLIO COMPOSITION:          
Commercial loans $1,072,261 $1,038,383 3% $1,058,665 1%
Real estate loans 4,554,127 4,441,864 3% 4,034,998 13%
Consumer and other loans 87,812 89,850 (2)% 98,895 (11)%
Loans outstanding 5,714,200 5,570,097 3% 5,192,558 10%
Unamortized deferred loan fees - net of costs (3,308) (2,890) (14)% (1,763) (88)%
Loans, net of deferred loan fees and costs 5,710,892 5,567,207 3% 5,190,795 10%
Allowance for loan losses (69,594) (67,758) (3)% (65,699) (6)%
Loan receivable, net $5,641,298 $5,499,449 3% $5,125,096 10%
           
REAL ESTATE LOANS BY PROPERTY TYPE: 3/31/2015 12/31/2014 % change 3/31/2014 % change
Retail buildings $1,215,119 $1,244,133 (2)% $1,166,573 4%
Hotels/motels 907,106 889,411 2% 734,141 24%
Gas stations/car washes 624,644 603,961 3% 534,078 17%
Mixed-use facilities 346,865 334,068 4% 331,571 5%
Warehouses 486,656 450,356 8% 415,635 17%
Multifamily 205,383 205,280 —% 193,503 6%
Other 768,354 714,655 8% 659,497 17%
Total $4,554,127 $4,441,864 3% $4,034,998 13%
           
DEPOSIT COMPOSITION 3/31/2015 12/31/2014 % change 3/31/2014 % change
Noninterest bearing demand deposits $1,616,935 $1,543,018 5% $1,442,348 12%
Money market and other 1,592,151 1,663,855 (4)% 1,391,541 14%
Saving deposits 193,839 198,205 (2)% 210,973 (8)%
Time deposits of $100,000 or more 1,774,109 1,667,367 6% 1,589,751 12%
Other time deposits 626,220 621,007 1% 699,947 (11)%
Total deposit balances $5,803,254 $5,693,452 2% $5,334,560 9%
           
DEPOSIT COMPOSITION (%) 3/31/2015 12/31/2014 3/31/2014    
Noninterest bearing demand deposits 27.9% 27.1% 27.0%    
Money market and other 27.4% 29.2% 26.1%    
Saving deposits 3.3% 3.5% 4.0%    
Time deposits of $100,000 or more 30.6% 29.3% 29.8%    
Other time deposits 10.8% 10.9% 13.1%    
Total deposit balances 100.0% 100.0% 100.0%    
           
CAPITAL RATIOS 3/31/2015 12/31/2014 3/31/2014    
Total stockholders' equity $899,198 $882,773 $832,159    
Tier 1 risk-based capital ratio 13.36% 13.64% 13.70%    
Total risk-based capital ratio 14.50% 14.80% 14.89%    
Tier 1 leverage ratio 11.72% 11.62% 11.66%    
Total risk weighted assets $6,187,626 $5,956,129 $5,578,204    
Book value per common share 11.30 11.10 10.46    
Tangible common equity to tangible assets 3 11.03% 11.00% 11.00%    
Tangible common equity per share 3 9.93 9.72 9.08    
           
3 Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit intangible assets, net. Management reviews tangible common equity to tangible assets in evaluating the Company's capital levels and has included this ratio in response to market participant interest in tangible common equity as a measure of capital.
           
Reconciliation of GAAP financial measures to non-GAAP financial measures:          
  3/31/2015 12/31/2014 3/31/2014    
Total stockholders' equity $899,198 $882,773 $832,159    
Less: Common stock warrant (378) (378) (378)    
Goodwill and core deposit intangible assets, net (109,021) (109,288) (110,260)    
Tangible common equity $789,799 $773,107 $721,521    
           
Total assets $7,267,905 $7,140,330 $6,667,551    
Less: Goodwill and core deposit intangible assets, net (109,021) (109,288) (110,260)    
Tangible assets $7,158,884 $7,031,042 $6,557,291    
           
Common shares outstanding 79,542,321 79,503,552 79,488,899    
           
Tangible common equity to tangible assets 11.03% 11.00% 11.00%    
Tangible common equity per share 9.93 9.72 9.08    
           
  Three Months Ended
ALLOWANCE FOR LOAN LOSSES: 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Balance at beginning of period $67,758 $68,232 $66,870 $65,699 $67,320
Provision for loan losses 1,500 2,360 4,256 2,996 3,026
Recoveries 1,461 3,225 772 946 616
Charge offs (1,125) (6,059) (3,666) (2,771) (5,263)
Balance at end of period $69,594 $67,758 $68,232 $66,870 $65,699
Net charge offs/average gross loans (annualized) (0.02)% 0.21% 0.21% 0.14% 0.36%
   
  Three Months Ended
NET CHARGED OFF LOANS BY TYPE 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Real estate loans $(460) $(265) $1,100 $765 $154
Commercial loans 111 3,104 1,803 1,255 4,414
Consumer loans 13 (5) (9) (195) 79
Charge offs excluding Acquired Credit Impaired Loans (336) 2,834 2,894 1,825 4,647
Charge offs on Acquired Credit Impaired Loans
Total net charge offs $(336) $2,834 $2,894 $1,825 $4,647
           
NONPERFORMING ASSETS 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Delinquent loans on nonaccrual status 4 $38,755 $46,352 $39,564 $42,651 $47,314
Delinquent loans 90 days or more on accrual status 5 361
Accruing restructured loans 57,905 57,128 56,061 43,906 37,527
Total nonperforming loans 96,660 103,841 95,625 86,557 84,841
Other real estate owned 19,606 21,938 23,162 20,610 20,001
Total nonperforming assets $116,266 $125,779 $118,787 $107,167 $104,842
Nonperforming assets/total assets 1.6% 1.76% 1.71% 1.56% 1.57%
Nonperforming assets/loans receivable & OREO 2.03% 2.25% 2.18% 2% 2.01%
Nonperforming assets/total capital 12.93% 14.25% 13.74% 12.57% 12.6%
Nonperforming loans/loans receivable 1.69% 1.87% 1.76% 1.62% 1.63%
Nonaccrual loans/loans receivable 0.68% 0.83% 0.73% 0.8% 0.91%
Allowance for loan losses/loans receivable 1.22% 1.22% 1.26% 1.25% 1.27%
Allowance for loan losses/nonaccrual loans 179.57% 146.18% 172.46% 156.78% 138.86%
Allowance for loan losses/nonperforming loans 72% 65.25% 71.35% 77.26% 77.44%
Allowance for loan losses/nonperforming assets 59.86% 53.87% 57.44% 62.4% 62.66%
           
4 Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $26.0 million, $28.9 million, $28.1 million, $30.0 million, and $31.2 million at March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively.
5 Excludes Acquired Credit Impaired Loans totaling $24.1, $30.4 million, $32.7 million, $43.7 million, and $46.0 million at March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014 , respectively.
           
BREAKDOWN OF ACCRUING RESTRUCTURED LOANS BY TYPE: 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Retail buildings $5,956 $6,050 $5,979 $6,021 $5,542
Hotels/motels 8,095 8,172 8,246 8,323 8,401
Gas stations/car washes
Mixed-use facilities 784 789 792 797 796
Warehouses 6,180 5,880 5,939 5,922 812
Multifamily
Other 6 36,890 36,237 35,105 22,843 21,976
Total $57,905 $57,128 $56,061 $43,906 $37,527
           
6 Includes commercial business and other loans
           
           
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Legacy          
30 - 59 days $4,901 $2,084 $3,936 $3,170 $1,700
60 - 89 days 1,565 1,812 1,284 210 445
Total delinquent loans less than 90 days past due - legacy $6,466 $3,896 $5,220 $3,380 $2,145
           
Acquired          
30 - 59 days $1,294 $1,806 $6,911 $6,403 $4,916
60 - 89 days 66 436 283 640 3
Total delinquent loans less than 90 days past due - acquired $1,360 $2,242 $7,194 $7,043 $4,919
           
Total delinquent loans less than 90 days past due $7,826 $6,138 $12,414 $10,423 $7,064
           
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE BY TYPE 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
           
Legacy          
Real estate loans $2,127 $2,475 $2,768 $1,675 $760
Commercial loans 4,082 1,385 2,221 1,640 1,338
Consumer loans 257 36 231 65 47
Total delinquent loans less than 90 days past due - legacy $6,466 $3,896 $5,220 $3,380 $2,145
           
Acquired          
Real estate loans $1,145 $1,747 $6,297 $6,051 $4,036
Commercial loans 199 382 884 860 598
Consumer loans 16 113 13 132 285
Total delinquent loans less than 90 days past due - acquired $1,360 $2,242 $7,194 $7,043 $4,919
           
Total delinquent loans less than 90 days past due $7,826 $6,138 $12,414 $10,423 $7,064
           
           
NONACCRUAL LOANS BY TYPE 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
           
Real estate loans $25,126 $30,988 $29,001 $27,815 $34,070
Commercial loans 12,591 14,302 9,486 13,553 12,216
Consumer loans 1,037 1,062 1,077 1,283 1,028
Total non-accrual loans $38,754 $46,352 $39,564 $42,651 $47,314
           
CRITICIZED LOANS 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Legacy          
Special mention $90,041 $96,092 $88,314 $55,659 $52,159
Substandard 111,162 114,369 113,865 112,357 111,529
Doubtful 228 39 470 1,227 3,332
Loss
Total criticized loans - legacy $201,431 $210,500 $202,649 $169,243 $167,020
           
Acquired          
Special mention $22,257 $26,243 $25,081 $36,811 $41,395
Substandard 96,655 107,506 114,347 124,618 134,660
Doubtful 1,947 2,148 3,086 3,980 2,376
Loss 76 1,445
Total criticized loans - acquired $120,859 $135,897 $142,514 $165,485 $179,876
           
Total criticized loans $322,290 $346,397 $345,163 $334,728 $346,896


            

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