LOS ANGELES, Oct. 26, 2010 (GLOBE NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported net income available to common shareholders of $4.1 million, or $0.14 per basic and diluted common share, for the quarter ended September 30, 2010. This compares to a net loss of $1.7 million to common shareholders, or ($0.06) per basic and diluted common share, for the same period of the prior year.
"We are pleased to deliver a quarter of strong profitability to our shareholders while improving capital ratios and reducing problem assets," said Ms. Joanne Kim, President and CEO of Wilshire Bancorp. "Our main focus remains on improving our credit quality. I believe that the strength of our core earnings will continue to allow us to take an aggressive approach in resolving problem assets."
THIRD QUARTER 2010 SUMMARY:
- Expanding net interest margin – At September 30, 2010, net interest margin increased 22 basis points from the prior quarter, and the same period the prior year.
- Increase in demand deposits– Although deposits decreased to $2.7 billion at September 30, 2010, from $2.9 billion at June 30, 2010, non-interest bearing demand deposits increased $25.5 million, or 6.0%, from the end of the prior quarter further improving the deposit mix.
- Decline in non-accrual loans – Non-accrual loans declined to $76.3 million, or 3.12% of gross loans, at September 30, 2010, from $83.1 million, or 3.38% of gross loans, at June 30, 2010.
- Decline in delinquent loans – Delinquent loans declined to $34.8 million, or 1.42% of gross loans, at September 30, 2010, from $37.0 million, or 1.50% of gross loans, at June 30, 2010.
- Increase in allowance for loan losses – The allowance for loan losses as a percentage of gross loans was strengthened to 4.04% at September 30, 2010 from 3.72% at June 30, 2010.
- Improved efficiency ratio – Efficiency ratio was improved to 37.21% at September 30, 2010 compared to 41.24% at June 30, 2010 and 40.26% at September 30, 2009.
- Strengthened capital position – Tangible common equity ratio (TCE) increased 48 basis points to 6.28% at September 30, 2010 from 5.80% at June 30, 2010.
CREDIT QUALITY
For the third quarter of 2010, the Company recorded a provision for losses on loans and loan commitments of $18.0 million compared to $32.2 million in the second quarter of 2010. The lower provision reflects reduced levels of non-accrual loans, delinquent loans, classified loans, and net charge-offs in the third quarter of 2010 relative to the second quarter of 2010.
The allowance for loan losses was increased to $99.0 million, or 4.04% of gross loans, on September 30, 2010, from $91.4 million, or 3.72% of gross loans, on June 30, 2010. Allowance for loan losses as a percentage of legacy Wilshire loans increased 33 basis points to 4.44% from 4.11% for the same period. The coverage ratio of allowance for loan losses to non-performing assets also increased to 106.88% at September 30, 2010 from 101.97% at June 30, 2010.
Non-accrual Loans
At September 30, 2010, total non-accrual loans totaled $76.3 million, or 3.12% of gross loans, compared to $83.1 million, or 3.38% of gross loans, at June 30, 2010. The decrease is primarily attributable to sales of non-performing loans. During the third quarter of 2010, the Company sold seven non-performing commercial real estate loans with an outstanding balance of approximately $18.1 million at an approximate 28.9% average weighted discount to their outstanding principal balance. These loans were primarily secured by gas station, hotel/motel, and shopping center properties. We will continue to look for similar opportunities to sell problem loans in the fourth quarter of 2010.
As previously disclosed, upon acquiring certain assets and liabilities of the former Mirae Bank, the Company entered into a loss sharing agreement with the FDIC whereby the FDIC has agreed to share in losses on assets covered under the agreement. The assets covered by the loss sharing agreement include loans and foreclosed loan collateral existing on June 26, 2009 and acquired from Mirae Bank. As a result, loans acquired through the acquisition of Mirae Bank are identified as "covered" loans, and those that were originated at Wilshire are "non-covered" loans or "legacy Wilshire" loans. The following is a table showing "covered" and "non-covered" non-accrual loans by loan type:
| (Net of SBA Guarantee Portions) | Quarter Ended | ||||||
| (dollars in thousands) | Sep 30, 2010 | Jun 30, 2010 | Sep 30, 2009 | ||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | TOTAL | |
| Construction | $ -- | $2,660 | $2,660 | $ -- | $ -- | $ -- | $494 |
| Real Estate Secured | 10,569 | 56,779 | 67,348 | 17,232 | 61,200 | 78,432 | 65,471 |
| Commercial & Industrial | 3,031 | 3,272 | 6,303 | 1,599 | 3,051 | 4,650 | 11,379 |
| Consumer | 37 | 37 | -- | 34 | 34 | 49 | |
| TOTAL NON-ACCRUALS | $13,600 | $62,748 | $76,348 | $18,831 | $64,285 | $83,116 | $77,393 |
Loan Delinquencies
At September 30, 2010, total loan delinquencies decreased to $34.8 million from $37.0 million at June 30, 2010. As a percentage of gross loans, delinquencies declined to 1.42% at September 30, 2010 from 1.50% at June 30, 2010. The greatest decline occurred in 30-59 day delinquencies, which decreased from $21.3 million at June 30, 2010 to $15.3 million at September 30, 2010. Delinquencies by days past due and loan type are reflected in the tables below:
| By Days Past Due | Quarter Ended | ||||||
| (dollars in thousands) | Sep 30, 2010 | Jun 30, 2010 | Sep 30, 2009 | ||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | TOTAL | |
| 30 - 59 Days Past Due | $1,753 | $13,583 | $15,336 | $4,108 | $17,146 | $21,254 | $13,942 |
| 60 - 89 Days Past Due | 1,053 | 18,126 | 19,179 | 910 | 14,844 | 15,754 | 12,855 |
| 90 Days, and still accruing | -- | 304 | 304 | -- | 1 | 1 | 772 |
| TOTAL DELINQUENCIES | $2,806 | $32,013 | $34,819 | $5,018 | $31,991 | $37,009 | $27,569 |
| By Loan Category | Quarter Ended | ||||||
| (dollars in thousands) | Sep 30, 2010 | Jun 30, 2010 | Sep 30, 2009 | ||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | TOTAL | |
| Construction | $ -- | $ -- | $ -- | $ -- | $2,654 | $2,654 | $ -- |
| Real Estate Secured | 1,331 | 27,215 | 28,546 | 3,449 | 25,015 | 28,464 | 21,595 |
| Commercial & Industrial | 1,475 | 4,741 | 6,216 | 1,569 | 4,241 | 5,810 | 5,784 |
| Consumer | -- | 57 | 57 | -- | 81 | 81 | 190 |
| TOTAL DELINQUENCIES | $2,806 | $32,013 | $34,819 | $5,018 | $31,991 | $37,009 | $27,569 |
Loan Charge-offs
Net loan charge-offs for the third quarter of 2010 were $14.3 million, compared to $17.2 million in the second quarter of 2010. Approximately $2.4 million of the charge-offs in the third quarter of 2010 were related to the sale of non-performing loans discussed above. Charge-offs by loan type are reflected in the table below:
| (dollars in thousands) | Quarter Ended | ||||||
| Sep 30, 2010 | Jun 30, 2010 | Sep 30, 2009 | |||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | TOTAL | |
| Construction | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- |
| Real Estate Secured | 324 | 12,445 | 12,769 | 596 | 12,268 | 12,864 | 1,888 |
| Commercial & Industrial | 91 | 1,448 | 1,539 | 373 | 3,841 | 4,214 | 6,134 |
| Consumer | 33 | 33 | -- | 80 | 80 | 191 | |
| TOTAL CHARGE-OFFS | $415 | $13,926 | $14,341 | $969 | $16,189 | $17,158 | $8,213 |
BALANCE SHEET
The Company implemented a strategy during the third quarter of 2010 in which it utilized cash and cash equivalents and the sale of low-yielding investment securities to reduce higher-costing money market and time deposit accounts to effectively lower the overall cost of funds.
As a result of this strategy, total assets declined to $3.23 billion at September 30, 2010, from $3.44 billion at June 30, 2010.
| Loan Categories | ||||||
| (dollars in thousands) | Quarter Ended | |||||
| September 30, 2010 | June 30, 2010 | |||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | |
| Construction | -- | $ 70,808 | $ 70,808 | -- | $ 59,376 | $ 59,376 |
| Real Estate Secured | 166,490 | 1,832,726 | 1,999,216 | 179,124 | 1,830,387 | 1,983,495 |
| Commercial & Industrial | 53,613 | 308,277 | 361,890 | 56,357 | 316,370 | 375,399 |
| Consumer | 125 | 16,937 | 17,062 | 150 | 18,265 | 16,304 |
| TOTAL GROSS LOANS | $ 220,228 | $ 2,228,748 | $ 2,448,976 | $ 235,631 | $ 2,224,398 | $ 2,460,029 |
Total loans were $2.44 billion on September 30, 2010, compared to $2.46 billion on June, 2010. Total new loan originations were $112.9 million in the third quarter of 2010, compared to $186.1 million in the second quarter of 2010. SBA loans origination declined to $17.6 million at September 30, 2010 from $32.6 million at June 30, 2010. As of September 30, 2010, Wilshire State Bank was ranked 11th for 2010 total volume of originations of SBA loans nationwide out of over 2,500 banks according to the Small Business Administration statistics. The Bank intends to continue to focus on SBA loan originations and sales in future quarters.
Total deposits were $2.71 billion on September 30, 2010, down from $2.90 billion on June 30, 2010. The decline came from money market accounts and time deposits. This decline was partially offset by an increase of $25.5 million, or 6.0%, in non-interest bearing deposits. As a result of the change in deposit mix over the past year, core deposits represented 72.9% of total deposits at September 30, 2010, compared to 65.3% of total deposits at September 30, 2009. As part of the deposit mix strategy, the Bank will continue to focus on attracting more demand deposits while reducing higher cost time deposits and money market deposits in the fourth quarter of 2010.
During the third quarter of 2010, the Company sold $115.0 million in total investments for a realized gain of $2.6 million. A total of $139.0 million in investments matured or were called in the third quarter of 2010, of which $116.0 million were reinvested into similar securities. The portions that were not reinvested in the third quarter were used to fund outflows from higher interest deposit accounts.
Total OREOs increased by $9.5 million in the third quarter to $16.0 million from $6.5 million at the end of the second quarter of 2010. Covered OREOs at September 30, 2010 were $6.5 million and non-covered OREOs were $9.5 million. The increase in total OREOs was comprised of 14 loans that were transferred to OREO in the third quarter of 2010. The bulk of OREO at September 30, 2010 were hotel/motels and commercial or industrial buildings, together accounting for more than 59% of total OREOs.
Strong Capital Ratios
Capital ratios improved in the third quarter of 2010 and were well in excess of "well capitalized" regulatory requirements. Tangible common equity to tangible assets at September 30, 2010 was 6.28%, an increase of 48 basis points from 5.80% at June 30, 2010. This is a non-GAAP financial measure. Please refer to our financial statements below for a reconciliation of our non-GAAP financial measures to the most comparable GAAP measure.
| (Dollars In thousands except per share info) | September 30, 2010 |
Well Capitalized Regulatory Requirements |
Total Excess Above Well Capitalized Requirements |
| Tier 1 Leverage Capital Ratio | 10.01% | 5.00% | $ 166,650 |
| Tier 1 Risk-Based Capital Ratio | 14.10% | 6.00% | 191,411 |
| Total Risk-Based Capital Ratio | 15.56% | 10.00% | 131,360 |
| Tangible Common Equity To Tangible Assets | 6.28% | N/A | N/A |
| Tangible Common Equity Per Common Share | $ 6.87 | N/A | N/A |
STATEMENT OF OPERATIONS
Net interest Income and Margin
Net interest income was $29.7 million in the third quarter of 2010, compared to $29.2 million in the second quarter of 2010 and $29.4 million in the third quarter of 2009.
Net interest margin was 3.93% in the third quarter of 2010, compared to 3.71% in the second quarter of 2010 and 3.87% in the third quarter of 2009. The increase in net interest margin is primarily attributable to a lower cost of funds. The Company's total cost of funds declined to 1.24% in the third quarter of 2010 from 1.43% in the second quarter of 2010 and 2.04% for the third quarter of 2009.
Non-Interest Income
Non-interest income was $10.0 million in the third quarter of 2010, which was increased from both the previous quarter's non-interest income of $9.9 million and $7.4 million for the third quarter of 2009. The increase was primarily due to increases in gain on sale of securities and gain on sales of loans.
During the third quarter of 2010, the Company originated $17.6 million in SBA loans and sold approximately $19.6 million, compared to originations of $32.6 million and sales of $25.0 million in the third quarter of 2009.
Non-Interest Expense
Total non-interest expense was $14.8 million in the third quarter of 2010, unchanged from $14.8 million in the same period of the prior year. A 5% increase in salaries and employee benefits expense was offset by a 35% decrease in data processing costs.
Compared to the previous quarter, non-interest expense decreased 8% from $16.1 million on June 30, 2010. The decrease was primarily due to declines in legal fees and loan expenses in the third quarter.
The Company's efficiency ratio in the third quarter of 2010 was 37.21%, compared to 41.24% in the second quarter of 2010 and 40.26% in the third quarter of 2009.
CONFERENCE CALL
Management will host its quarterly conference call on October 26, 2010, at 11:00 a.m. PDT (2:00 p.m. EDT). Investment professionals are invited to participate in the call by dialing 866-783-2137 (domestic number) or857-350-1596 (international number) and entering passcode 95248568.
COMPANY INFORMATION
Headquartered in Los Angeles, Wilshire State Bank operates 24 branch offices in California, Texas, New Jersey and New York, and six loan production offices in Dallas, Houston, Atlanta, Denver, Annandale, Virginia, and Fort Lee, New Jersey, 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.
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. 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.
| CONSOLIDATED BALANCE SHEET | |||||
| (dollars in thousands) (unaudited) | September 30, | June 30, | Three Month | September 30, | One Year |
| 2010 | 2010 | Change | 2009 | Change | |
| ASSETS: | |||||
| Cash and Due from Banks | $ 108,411 | $ 134,707 | -20% | $ 141,533 | -23% |
| Federal Funds Sold and Other Cash Equivalents | 201,006 | 224,005 | -10% | 130,004 | 55% |
| Total Cash and Cash Equivalents | 309,417 | 358,712 | -14% | 271,537 | 14% |
| Investment Securities Available For Sale | 367,433 | 506,381 | -27% | 559,602 | -34% |
| Investment Securities Held To Maturity | 91 | 96 | -5% | 116 | -22% |
| Total Investment Securities | 367,524 | 506,477 | -27% | 559,718 | -34% |
| Loans | |||||
| Real Estate Construction | 70,123 | 58,680 | 20% | 45,080 | 56% |
| Residential Real Estate | 108,549 | 109,709 | -6% | 79,384 | 30% |
| Commercial Real Estate | 1,887,247 | 1,896,329 | 0% | 1,890,432 | 0% |
| Commercial and Industrial | 360,990 | 371,903 | -3% | 414,194 | -13% |
| Consumer | 17,135 | 18,401 | -7% | 16,262 | 5% |
| Total Loans | 2,444,044 | 2,455,022 | 0% | 2,445,352 | 0% |
| Allowance For Loan Losses | (99,022) | (91,419) | 8% | (54,735) | 0% |
| Loans, Net of Allowance for Loan Losses | 2,345,022 | 2,363,603 | -1% | 2,390,617 | -2% |
| Accrued Interest Receivable | 12,839 | 13,427 | -4% | 13,375 | -4% |
| Due from Customers on Acceptances | 269 | 611 | -56% | 251 | 7% |
| Other Real Estate Owned | 15,996 | 6,540 | 145% | 6,238 | 156% |
| Premises and Equipment | 13,771 | 13,741 | 0% | 12,454 | 11% |
| Federal Home Loan Bank (FHLB) Stock, at Cost | 19,302 | 20,075 | -4% | 21,040 | -8% |
| Cash Surrender Value of Life Insurance | 18,510 | 18,354 | 1% | 17,884 | 4% |
| Investment in affordable housing partnerships | 29,389 | 29,665 | -1% | 12,271 | 139% |
| Deferred Income Taxes | 28,138 | 28,199 | 0% | 8,787 | 220% |
| Servicing Assets | 7,041 | 6,655 | 6% | 6,898 | 2% |
| Goodwill | 6,675 | 6,675 | 0% | 6,675 | 0% |
| FDIC Indemnification | 26,232 | 28,538 | -8% | 40,014 | -34% |
| Other Assets | 32,560 | 35,822 | -9% | 9,804 | 232% |
| TOTAL ASSETS | $ 3,232,685 | $ 3,437,094 | -6% | $ 3,377,563 | -4% |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||
| LIABILITIES: | |||||
| Non-interest Bearing Demand Deposits | $ 453,333 | $ 427,793 | 6% | $ 373,332 | 21% |
| Savings and Interest Checking | 102,414 | 100,210 | 2% | 91,223 | 12% |
| Money Market Deposits | 790,779 | 908,112 | -13% | 752,788 | 5% |
| Time Deposits in denomination of $100,000 or more | 733,724 | 752,656 | -3% | 928,605 | -21% |
| Other Time Deposits | 626,498 | 712,698 | -12% | 526,154 | 19% |
| Total Deposits | 2,706,748 | 2,901,469 | -7% | 2,672,102 | 1% |
| FHLB borrowings and Federal Funds Purchased | 131,547 | 145,306 | -9% | 322,000 | -59% |
| Acceptance Outstanding | 269 | 611 | -56% | 251 | 7% |
| Junior Subordinated Debentures | 87,321 | 87,321 | 0% | 87,321 | 0% |
| Accrued Interest Payable | 4,357 | 5,461 | -20% | 7,715 | -44% |
| Other Liabilities | 31,115 | 29,491 | 6% | 15,687 | 98% |
| Total Liabilities | 2,961,357 | 3,169,659 | -7% | 3,105,076 | -5% |
| STOCKHOLDERS' EQUITY: | |||||
| Preferred Stock | 60,317 | 60,186 | 0% | 59,806 | 1% |
| Common Stock | 55,513 | 55,370 | 0% | 54,646 | 2% |
| Retained Earnings | 151,398 | 147,325 | 3% | 149,258 | 1% |
| Accumulated Other Comprehensive Income | 4,100 | 4,554 | -10% | 8,777 | -53% |
| Total Stockholders' Equity | 271,328 | 267,435 | 1% | 272,487 | 0% |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,232,685 | $ 3,437,094 | -6% | $ 3,377,563 | 4% |
| CONSOLIDATED STATEMENT OF OPERATIONS | |||||
| (dollars in thousands, except per share data) (unaudited) | |||||
| Quarter Ended | Quarter Ended | ||||
| September 30, 2010 | June 30, 2010 |
Three Month % Change |
September 30, 2009 |
One Year % Change |
|
| INTEREST INCOME | |||||
| Interest and Fees on Loans | $ 36,452 | $ 36,079 | 1% | $ 39,389 | -7% |
| Interest on Investment Securities | 2,804 | 4,756 | -41% | 4,876 | -42% |
| Interest on Federal Funds Sold | 515 | 294 | 75% | 844 | -39% |
| Total Interest Income | 39,771 | 41,129 | -3% | 45,109 | -12% |
| INTEREST EXPENSE | |||||
| Deposits | 8,688 | 10,476 | -17% | 12,994 | -33% |
| FHLB Advances and Other Borrowings | 1,431 | 1,414 | 1% | 2,702 | -47% |
| Total Interest Expense | 10,119 | 11,890 | -15% | 15,696 | -36% |
| Net Interest Income Before Provision for Losses on Loans and Loan Commitments | 29,652 | 29,239 | 1% | 29,413 | 1% |
| Provision for Losses on Loans and Loan Commitments | 18,000 | 32,200 | -44% | 24,200 | -26% |
| Net Interest Income After Provision for Losses on Loans and Loan Commitments | 11,652 | (2,961) | -494% | 5,213 | 124% |
| NONINTEREST INCOME | |||||
| Service Charges on Deposits | 3,071 | 3,215 | -4% | 3,314 | -7% |
| Gain on Sales of Loans | 2,723 | 1,444 | 89% | 2,235 | 22% |
| Gain on Sale of Investment Securities | 2,600 | 3,658 | -29% | -- | 0% |
| Other | 1,652 | 1,561 | 6% | 1,851 | -11% |
| Total Noninterest Income | 10,046 | 9,878 | 2% | 7,400 | 36% |
| NONINTEREST EXPENSES | |||||
| Salaries and Employee Benefits | 7,458 | 7,284 | 2% | 7,120 | 5% |
| Occupancy & Equipment | 1,921 | 1,946 | -1% | 1,935 | -1% |
| Data Processing | 702 | 690 | 2% | 1,078 | -35% |
| Other | 4,691 | 6,212 | -24% | 4,688 | 0% |
| Total Noninterest Expenses | 14,772 | 16,132 | -8% | 14,821 | 0% |
| Income (Loss) Before Income Taxes | 6,926 | (9,215) | -175% | (2,208) | -414% |
| Income Taxes (Benefit) Provision | 1,946 | (5,551) | -135% | (1,451) | -234% |
| NET INCOME | 4,980 | (3,664) | -236% | (757) | -758% |
| Preferred Stock Cash Dividend and Accretion of Preferred Stock Discount | 908 | 906 | 0% | 900 | 1% |
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ 4,072 | $ (4,570) | -189% | $ (1,657) | -346% |
| PER COMMON SHARE INFORMATION | |||||
| Basic Earnings Per Common Share | $ 0.14 | $ (0.15) | -189% | $ (0.06) | -345% |
| Diluted Earnings Per Common Share | $ 0.14 | $ (0.15) | -189% | $ (0.06) | -345% |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | |||||
| Basic | 29,486,734 | 29,487,994 | 29,413,757 | ||
| Diluted | 29,509,153 | 29,487,994 | 29,423,630 | ||
| CONSOLIDATED STATEMENT OF OPERATIONS | |||
| (dollars in thousands, except per share data) (unaudited) | |||
| Nine Month Ended | |||
| September 30, 2010 | September 30, 2009 |
One Year % Change |
|
| INTEREST INCOME | |||
| Interest and Fees on Loans | $ 107,835 | $ 100,817 | 7% |
| Interest on Investment Securities | 13,175 | 11,011 | 20% |
| Interest on Federal Funds Sold | 1,191 | 1,910 | -38% |
| Total Interest Income | 122,201 | 113,738 | 7% |
| INTEREST EXPENSE | |||
| Deposits | 30,338 | 35,952 | -16% |
| FHLB Advances and Other Borrowings | 4,414 | 7,728 | -43% |
| Total Interest Expense | 34,752 | 43,680 | -20% |
| Net Interest Income Before Provision for Losses on Loans and Loan Commitments | 87,449 | 70,058 | 25% |
| Provision for Losses on Loans and Loan Commitments | 67,200 | 43,000 | 56% |
| Net Interest Income After Provision for Losses on Loans and Loan Commitments | 20,249 | 27,058 | -25% |
| NONINTEREST INCOME | |||
| Service Charges on Deposits | 9,510 | 9,338 | 2% |
| Gain on Sales of Loans | 4,203 | 1,711 | 146% |
| Gain on Sale of Investment Securities | 8,742 | 1,588 | 451% |
| FAS 141R gain on bargain purchase | -- | 21,679 | -100% |
| Other | 5,255 | 5,411 | -3% |
| Total Noninterest Income | 27,710 | 39,727 | -30% |
| NONINTEREST EXPENSES | |||
| Salaries and Employee Benefits | 21,857 | 19,315 | 13% |
| Occupancy & Equipment | 6,048 | 5,294 | 14% |
| Data Processing | 2,029 | 2,750 | -26% |
| Other | 15,662 | 13,525 | 16% |
| Total Noninterest Expenses | 45,596 | 40,884 | 12% |
| Income Before Income Taxes | 2,363 | 25,901 | -91% |
| Income Taxes (Benefit) Provision | (2,268) | 9,853 | -123% |
| NET INCOME | 4,631 | 16,048 | -71% |
| Preferred Stock Cash Dividend and Accretion of | |||
| Preferred Stock Discount | 2,717 | 2,718 | 0% |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ 1,914 | $ 13,330 | -86% |
| PER COMMON SHARE INFORMATION | |||
| Basic Earnings Per Common Share | $ 0.06 | $ 0.45 | -86% |
| Diluted Earnings Per Common Share | $ 0.06 | $ 0.45 | -86% |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | |||
| Basic | 29,486,255 | 29,413,757 | |
| Diluted | 29,530,600 | 29,422,528 | |
| SUMMARY OF FINANCIAL DATA | ||||||
| (dollars in thousands, except per share data) (unaudited) | ||||||
| Quarter Ended | ||||||
| AVERAGE BALANCES | September 30, 2010 | June 30, 2010 | September 30, 2009 | |||
| Average Assets | $3,348,434 | $3,475,151 | $3,298,238 | |||
| Average Equity | 274,846 | 275,452 | 276,770 | |||
| Average Net Loans | 2,372,429 | 2,367,860 | 2,393,513 | |||
| Average Deposits | 2,810,176 | 2,939,513 | 2,547,303 | |||
| Average Time Deposits in denomination of $100,000 or more | 743,966 | 751,094 | 984,521 | |||
| Average Interest Earning Assets | 3,049,288 | 3,174,226 | 3,062,707 | |||
| Nine Months Ended | ||||||
| AVERAGE BALANCES | September 30, 2010 | September 30, 2009 | ||||
| Average Assets | $3,413,486 | $2,840,993 | ||||
| Average Equity | 274,536 | 266,157 | ||||
| Average Net Loans | 2,366,651 | 2,162,801 | ||||
| Average Deposits | 2,878,455 | 2,129,473 | ||||
| Average Time Deposits in denomination of $100,000 or more | 754,610 | 972,176 | ||||
| Average Interest Earning Assets | 3,126,066 | 2,650,310 | ||||
| Quarter Ended | ||||||
| PROFITABILITY | September 30, 2010 | June 30, 2010 | September 30, 2009 | |||
| Annualized Return on Average Assets | 0.59% | -0.42% | -0.09% | |||
| Annualized Return on Average Equity | 7.25% | -5.32% | -1.09% | |||
| Efficiency Ratio | 37.21% | 41.24% | 40.26% | |||
| Annualized Operating Expense/Average Assets | 1.76% | 1.86% | 1.80% | |||
| Annualized Net Interest Margin | 3.93% | 3.71% | 3.87% | |||
| Nine Months Ended | ||||||
| PROFITABILITY | September 30, 2010 | September 30, 2009 | ||||
| Annualized Return on Average Assets | 0.18% | 0.75% | ||||
| Annualized Return on Average Equity | 2.25% | 8.04% | ||||
| Efficiency Ratio | 39.59% | 37.24% | ||||
| Annualized Operating Expense/Average Assets | 1.78% | 1.92% | ||||
| Annualized Net Interest Margin | 3.77% | 3.55% | ||||
| As Of | ||||||
| DEPOSIT COMPOSITION | September 30, 2010 |
Cost of Funds |
June 30, 2010 |
Cost of Funds |
September 30, 2009 |
Cost of Funds |
| Noninterest Bearing Demand Deposits | 16.7% | 0.00% | 14.7% | 0.00% | 14.0% | 0.00% |
| Savings & Interest Checking | 3.8% | 2.44% | 3.5% | 2.57% | 3.4% | 2.76% |
| Money Market Deposits | 29.2% | 1.17% | 31.3% | 1.56% | 28.2% | 2.41% |
| Time Deposits of $100,000 or More | 27.1% | 1.32% | 25.9% | 1.55% | 34.8% | 2.28% |
| Other Time Deposits | 23.1% | 1.86% | 24.6% | 2.00% | 19.7% | 2.56% |
| Total Deposits | 100.0% | 1.24% | 100.0% | 1.43% | 100.0% | 2.04% |
| As Of | ||||||
| CAPITAL RATIOS | September 30, 2010 | June 30, 2010 | September 30, 2009 | |||
| Tier 1 Leverage Ratio | 10.01% | 9.51% | 10.03% | |||
| Tier 1 Risk-Based Capital Ratio | 14.10% | 13.72% | 14.29% | |||
| Total Risk-Based Capital Ratio | 15.56% | 15.17% | 15.82% | |||
| Total Shareholders' Equity | $271,328 | $267,435 | $272,487 | |||
| Book Value Per Common Share | $7.16 | $7.03 | $7.23 | |||
| Tangible Common Equity Per Common Share * | $6.87 | $6.74 | $6.93 | |||
| Tangible Common Equity to Tangible Assets ** | 6.28% | 5.80% | 6.05% | |||
| * Tangible common equity excludes goodwill, other intangible assets, and TARP preferred stock | ||||||
| ** Tangible assets excludes goodwill and intangible assets | ||||||
| SUMMARY OF FINANCIAL DATA | |||||
| (dollars in thousands, except per share data) (unaudited) | |||||
| ALLOWANCE FOR LOAN LOSSES | Quarter Ended | ||||
| (net of SBA guaranteed portions) | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | September 30, 2009 |
| Balance at Beginning of Period | $91,419 | $79,576 | $62,130 | $54,735 | $38,758 |
| Provision for Losses on Loans | 17,999 | 31,269 | 16,930 | 24,540 | 23,967 |
| FDIC Indemnification | 2,954 | -3,140 | 5,831 | 856 | -- |
| Recoveries on loans previously charged-off | 991 | 872 | 512 | 654 | 223 |
| Less Charge-offs | (14,341) | (17,158) | (5,827) | (18,655) | (8,213) |
| Balance at End of Period | $99,022 | $91,419 | $79,576 | $62,130 | $54,735 |
| Net Loan Charge-offs/Average Total Loans | 0.56% | 0.67% | 0.22% | 0.74% | 0.33% |
| Charge-offs/Average Total Loans | 0.60% | 0.70% | 0.24% | 0.76% | 0.34% |
| Allowance for Loan Losses/Total Loans | 4.04% | 3.72% | 3.29% | 2.56% | 2.24% |
| Allowance for Loan Losses/Legacy Wilshire Loans | 4.44% | 4.11% | 3.66% | 2.86% | 2.52% |
| Allowance for Loan Losses/Non-accrual Loans | 129.70% | 109.99% | 75.77% | 89.47% | 70.72% |
| Allowance for Loan Losses/Non-performing Loans | 129.18% | 109.99% | 75.77% | 87.78% | 70.02% |
| Allowance for Loan Losses/Total Assets | 3.06% | 2.66% | 2.30% | 1.81% | 1.62% |
| Allowance for Loan Losses/Non-performing Assets | 106.88% | 101.97% | 72.42% | 83.31% | 64.85% |
| NON-PERFORMING ASSETS | As Of | ||||
| (net of SBA guaranteed portions) | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | September 30, 2009 |
| Nonaccrual Loans: | |||||
| Non-covered loans | $ 62,749 | $ 64,285 | $ 83,115 | $ 51,119 | $ 52,386 |
| Covered Loans | 13,599 | 18,831 | 21,909 | 18,327 | 25,007 |
| Total | 76,348 | 83,116 | 105,024 | 69,446 | 77,393 |
| Loans 90 days or more past due and still accruing: | |||||
| Non-covered Loans | 304 | 1 | -- | 1,336 | -- |
| Covered Loans | -- | -- | -- | -- | 772 |
| Total | 304 | 1 | -- | 1,336 | 772 |
| Total Nonperforming Loans: | |||||
| Non-covered Loans | 63,053 | 64,286 | 83,115 | 52,455 | 52,386 |
| Covered Loans | 13,599 | 18,831 | 21,909 | 18,327 | 25,779 |
| Total | 76,652 | 83,117 | 105,024 | 70,782 | 78,165 |
| OREO and Repossessed Vehicles: | |||||
| Non-covered Loans | 9,519 | 4,346 | 3,136 | 3,297 | 5,738 |
| Covered Loans | 6,477 | 2,194 | 1,723 | 500 | 500 |
| Total | 15,996 | 6,540 | 4,859 | 3,797 | 6,238 |
| Total Nonperforming Assets: | |||||
| Non-covered Loans | 72,572 | 68,632 | 86,251 | 55,752 | 58,124 |
| Covered Loans | 20,076 | 21,025 | 23,632 | 18,827 | 26,279 |
| Total | $92,648 | $89,657 | $109,883 | $74,579 | $84,403 |
| Total Nonperforming Loans/Gross Loans | 3.13% | 3.38% | 4.34% | 2.92% | 3.20% |
| Total Nonperforming Assets/Total Assets | 2.87% | 2.61% | 3.18% | 2.17% | 2.50% |
| Performing Troubled Debt Restructured (TDR) Loans | ||||||
| (dollars in thousands) | As Of | |||||
| September 30, 2010 | June 30, 2010 | |||||
| COVERED | NON-COVERED | TOTAL | COVERED | NON-COVERED | TOTAL | |
| Construction | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- |
| Real Estate Secured | 8,268 | 100,289 | 108,557 | 2,804 | 49,289 | 52,093 |
| Commercial & Industrial | 2,448 | 4,929 | 7,377 | 202 | 802 | 1,004 |
| Consumer | -- | -- | -- | -- | -- | |
| TOTAL PERFORMING TDR LOANS | $10,716 | $105,218 | $115,934 | $3,006 | $50,091 | $53,097 |
| LOAN ORIGINATION AMOUNT | Quarter Ended | ||||
| September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | September 30, 2009 | |
| Total new loan origination amount, excluding renewal. | $112,911 | $186,121 | $87,288 | $125,281 | $183,859 |
| SBA new loan origination amount, excluding renewal. | $17,613 | $32,630 | $23,471 | $17,158 | $15,592 |
| Nine Months Ended | |||||
| September 30, 2010 | September 30, 2009 | ||||
| Total new loan origination amount, excluding renewal. | $299,032 | $408,031 | |||
| SBA new loan origination amount, excluding renewal. | $50,243 | $34,324 | |||
| ALLOWANCE FOR OFF-BALANCE SHEET ITEMS | Quarter Ended | Nine Months Ended | |||
| (net of SBA guaranteed portions) | September 30, 2010 | June 30, 2010 | September 30, 2010 | September 30, 2009 | |
| Balance at beginning of period | $3,516 | $2,585 | $2,515 | $1,243 | |
| Provision for losses on off-balance sheet items | (590) | 931 | 411 | 212 | |
| Balance at end of period | $2,926 | $3,516 | $2,926 | $1,455 | |
|
Reconciliation of GAAP financial measures to non-GAAP financial measures: |
|||
| September 30, 2010 | June 30, 2010 | September 30, 2009 | |
| Total stockholders' equity | $271,328 | $267,435 | $272,487 |
| Preferred stock, net of discount | (60,317) | (60,186) | (59,806) |
| Goodwill and other intangible assets, net | (8,412) | (8,504) | (8,906) |
| Tangible common equity | $202,599 | $198,745 | $203,775 |
| Total assets | $3,232,685 | $3,437,094 | $3,377,563 |
| Goodwill and other intangible assets, net | (8,412) | (8,504) | (8,906) |
| Tangible assets | $3,224,273 | $3,428,590 | $3,368,657 |
| Common shares outstanding | 29,486,734 | 29,486,734 | 29,413,757 |
| CRE Distribution and Maturity Tables | ||||||||
| (dollars in thousands) | September 30, 2010 | % | June 30, 2010 | % | 3 Mths Change | September 30, 2009 | % | 12 Mths Change |
| Multi-Family | $ 77,073 | 4% | $ 95,640 | 5% | -19% | $ 116,456 | 6% | -34% |
| Office / Mixed Use | 351,301 | 19% | 310,916 | 16% | 13% | 264,536 | 14% | 33% |
| Retail | 684,129 | 36% | 725,147 | 38% | -6% | 719,969 | 38% | -5% |
| Industrial / Warehouse | 331,080 | 17% | 325,024 | 17% | 2% | 317,501 | 17% | 4% |
| Hotel / Motel | 299,026 | 16% | 307,532 | 16% | -3% | 313,138 | 17% | -5% |
| Other | 149,984 | 8% | 140,694 | 8% | 7% | 147,734 | 8% | 2% |
| Total CRE Loans | $ 1,892,593 | 100% | $ 1,904,953 | 100% | -1% | $ 1,879,334 | 100% | 1% |
| (dollars in thousands) | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 & after | TOTAL | |
| Multifamily | $ 13,938 | 5,242 | 15,015 | 17,665 | 10,971 | 14,242 | 77,073 | |
| Office / Mixed Use | 28,004 | 20,490 | 82,002 | 43,057 | 62,917 | 114,832 | 351,302 | |
| Retail | 26,279 | 85,256 | 112,541 | 128,054 | 125,205 | 206,794 | 684,129 | |
| Industrial / Warehouse | 20,968 | 35,853 | 52,649 | 48,013 | 75,471 | 98,125 | 331,079 | |
| Hotel / Motel | 763 | 78,051 | 51,769 | 46,740 | 25,731 | 95,972 | 299,026 | |
| Other | 24,045 | 20,449 | 22,821 | 17,092 | 16,210 | 49,367 | 149,984 | |
| Total CRE Loans | $ 113,997 | $ 245,341 | $ 336,797 | $ 300,621 | $ 316,505 | $ 579,332 | $ 1,892,593 | |
| % of CRE | 6% | 13% | 18% | 16% | 17% | 30% | 100% | |
| WILSHIRE BANCORP, INC. AND SUBSIDIARIES | |||||||||
| AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID | |||||||||
| (dollars in thousands) (unaudited) | |||||||||
| For the Quarter Ended | |||||||||
| September 30, 2010 | June 30, 2010 | September 30, 2009 | |||||||
| Average | Interest | Average | Average | Interest | Average | Average | Interest | Average | |
| Balance | Income/ | Yield/ | Balance | Income/ | Yield/ | Balance | Income/ | Yield/ | |
| Expense | Rate | Expense | Rate | Expense | Rate | ||||
| INTEREST EARNING ASSETS | |||||||||
| Real Estate Loans | $2,083,533 | $30,765 | 5.91% | $2,058,774 | $29,848 | 5.80% | $1,982,131 | $31,400 | 6.34% |
| Commercial Loans | 365,201 | 4,853 | 5.32% | 378,752 | 5,363 | 5.66% | 440,140 | 6,821 | 6.20% |
| Consumer Loans | 18,508 | 156 | 3.37% | 17,584 | 180 | 4.09% | 16,818 | 250 | 5.96% |
| Total Gross Loans | 2,467,243 | 35,774 | 5.80% | 2,455,110 | 35,391 | 5.77% | 2,439,089 | 38,471 | 6.31% |
| Loan Fees toward Yield | 678 | 688 | 918 | ||||||
| Allowance for Loan Losses & Unearned Income | (94,814) | (87,250) | (45,575) | ||||||
| Net Loans | 2,372,429 | 36,452 | 6.15% | 2,367,860 | 36,079 | 6.09% | 2,393,514 | 39,389 | 6.58% |
| INVESTMENT SECURITIES AND | |||||||||
| OTHER INTEREST-EARNING ASSETS: | |||||||||
| Investment Securities* | 449,153 | 2,805 | 2.76% | 647,782 | 4,756 | 3.08% | 488,704 | 4,876 | 4.16% |
| Federal Funds Sold | 227,706 | 514 | 0.90% | 158,584 | 294 | 0.74% | 180,490 | 844 | 1.87% |
| Total Investment Securities and Other Earning Assets | 676,859 | 3,319 | 2.13% | 806,366 | 5,050 | 2.62% | 669,194 | 5,720 | 3.54% |
| TOTAL INTEREST-EARNING ASSETS | $3,049,288 | $39,771 | 5.26% | $3,174,226 | $41,129 | 5.21% | $3,062,708 | $45,109 | 5.92% |
| INTEREST BEARING LIABILITIES | |||||||||
| INTEREST-BEARING DEPOSITS: | |||||||||
| Money Market | $858,437 | $2,507 | 1.17% | $972,096 | $3,542 | 1.46% | $677,234 | $4,075 | 2.41% |
| NOW | 21,706 | 23 | 0.42% | 22,019 | 26 | 0.47% | 21,481 | 50 | 0.93% |
| Savings | 78,848 | 590 | 2.99% | 75,677 | 617 | 3.26% | 62,089 | 527 | 3.39% |
| Time Deposits of $100,000 or More | 743,966 | 2,455 | 1.32% | 751,094 | 2,762 | 1.47% | 984,521 | 5,611 | 2.28% |
| Other Time Deposits | 668,873 | 3,113 | 1.86% | 702,866 | 3,529 | 2.01% | 427,234 | 2,731 | 2.56% |
| Total Interest Bearing Deposits | 2,371,830 | 8,688 | 1.47% | 2,523,752 | 10,476 | 1.66% | 2,172,559 | 12,994 | 2.39% |
| BORROWINGS: | |||||||||
| FHLB Advances and Other Borrowings | 140,156 | 758 | 2.16% | 138,805 | 750 | 2.16% | 362,208 | 1,982 | 2.19% |
| Junior Subordinated Debentures | 87,321 | 673 | 3.08% | 87,321 | 664 | 3.04% | 87,321 | 720 | 3.30% |
| Total Borrowings | 227,477 | 1,431 | 2.52% | 226,126 | 1,414 | 2.50% | 449,529 | 2,702 | 2.40% |
| TOTAL INTEREST BEARING LIABILITIES | $2,599,307 | $10,119 | 1.56% | $2,749,878 | $11,890 | 1.73% | $2,622,088 | $15,696 | 2.40% |
| NET INTEREST INCOME | $29,652 | $29,239 | $29,413 | ||||||
| NET INTEREST SPREAD | 3.70% | 3.48% | 3.52% | ||||||
| NET INTEREST MARGIN | 3.93% | 3.71% | 3.87% | ||||||
| * 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 Nine Months Ended | ||||||
| September 30, 2010 | September 30, 2009 | |||||
| Average | Interest | Average | Average | Interest | Average | |
| Balance | Income/ | Yield/ | Balance | Income/ | Yield/ | |
| Expense | Rate | Expense | Rate | |||
| INTEREST EARNING ASSETS | ||||||
| Real Estate Loans | $2,057,770 | $89,666 | 5.81% | $1,780,320 | $82,192 | 6.16% |
| Commercial Loans | 375,481 | 15,524 | 5.51% | 402,929 | 15,808 | 5.23% |
| Consumer Loans | 17,531 | 516 | 3.92% | 18,867 | 807 | 5.70% |
| Total Gross Loans | 2,450,782 | 105,706 | 8.63% | 2,202,116 | 98,807 | 5.98% |
| Loan Fees toward Yield | 2,129 | 2,010 | ||||
| Allowance for Loan Losses & Unearned Income | (84,131) | (39,315) | ||||
| Net Loans | 2,366,651 | 107,835 | 6.08% | 2,162,801 | 100,817 | 6.22% |
| INVESTMENT SECURITIES AND | ||||||
| OTHER INTEREST-EARNING ASSETS: | ||||||
| Investment Securities* | 586,642 | 13,175 | 3.20% | 367,260 | 11,011 | 4.17% |
| Federal Funds Sold | 172,773 | 1,191 | 0.92% | 120,250 | 1,910 | 2.12% |
| Total Investment Securities and Other Earning Assets | 759,415 | 14,366 | 2.68% | 487,510 | 12,921 | 3.66% |
| TOTAL INTEREST-EARNING ASSETS | $3,126,066 | $122,201 | 5.25% | $2,650,311 | $113,738 | 5.75% |
| INTEREST BEARING LIABILITIES | ||||||
| INTEREST-BEARING DEPOSITS: | ||||||
| Money Market | $928,498 | $10,071 | 1.45% | $493,160 | $9,181 | 2.48% |
| NOW | 22,066 | 78 | 0.47% | 20,066 | 141 | 0.94% |
| Savings | 76,210 | 1,793 | 3.14% | 51,347 | 1,364 | 3.54% |
| Time Deposits of $100,000 or More | 754,610 | 8,264 | 1.46% | 972,176 | 19,031 | 2.61% |
| Other Time Deposits | 682,422 | 10,132 | 1.98% | 277,684 | 6,235 | 2.99% |
| Total Interest Bearing Deposits | 2,463,806 | 30,338 | 1.64% | 1,814,433 | 35,952 | 2.64% |
| BORROWINGS: | ||||||
| FHLB Advances and Other Borrowings | 142,292 | 2,428 | 2.28% | 336,944 | 5,261 | 2.08% |
| Junior Subordinated Debentures | 87,321 | 1,986 | 3.03% | 87,321 | 2,467 | 3.77% |
| Total Borrowings | 229,613 | 4,414 | 2.56% | 424,265 | 7,728 | 2.43% |
| TOTAL INTEREST BEARING LIABILITIES | $2,693,419 | $34,752 | 1.72% | $2,238,698 | $43,680 | 2.60% |
| NET INTEREST INCOME | $87,449 | $70,058 | ||||
| NET INTEREST SPREAD | 3.53% | 3.15% | ||||
| NET INTEREST MARGIN | 3.77% | 3.55% | ||||
| * Tax equivalent ratios for investment securities | ||||||