updated 1/25/2011 5:16:39 AM ET 2011-01-25T10:16:39

LOS ANGELES, Jan. 25, 2011 (GLOBE NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported a net loss to common shareholders of $30.0 million, or ($1.02) per basic and diluted share, for the quarter ended December 31, 2010. This compares to net income available to common shareholders of $3.2 million, or $0.11 per basic and diluted common share, for the same period of the prior year. The net loss reported for the fourth quarter of 2010 is attributable to $65.5 million in provision for loan losses that was largely driven by the disposal of a significant number of problem assets through note sales and charge-offs. The fourth quarter 2010 credit management actions had the effect of significantly lowering the risk profile of the Company's loan portfolio and reducing its level of non-accrual, troubled debt restructured (TDRs), classified and impaired loans.

"Our fourth quarter results reflect our aggressive actions to resolve lingering credit issues related to commercial real estate loans," said Ms. Joanne Kim, President and CEO of Wilshire Bancorp. "Following these actions, we have now disposed of the weakest credits in our loan portfolio and have positioned the Bank to move forward with more manageable credit costs. We will continue to focus on credit quality and the reduction of problem assets in future quarters."

"We expect to demonstrate the significant earnings power of the Bank and deliver improved profitability throughout 2011. With the reduction of problem assets from our balance sheet, we believe that increased gains on sales of small business administration (SBA) and residential mortgage loans, lower credit costs, and the effect of a company-wide initiative to reduce non-interest expense levels will help drive our earnings growth in 2011," said Ms. Kim.

FOURTH QUARTER 2010 SUMMARY:

  • Decline in non-accrual loans – Non-accrual loans declined to $64.6 million, or 2.75% of gross loans, at December 31, 2010, from $76.3 million, or 3.12% of gross loans, at September 30, 2010.
     
  • Decrease in impaired loans – Impaired loans were reduced from $192.6 million at September 30, 2010 to $118.5 million at December 31, 2010, a reduction of $74.1 million, or 38.5%, on a quarter-to-quarter basis.
     
  • Decline in troubled debt restructured loans (TDRs) Performing TDRs and impaired restructured loans declined $62.1 million, or 53.5%, to $53.9 million at December 31, 2010, from $115.9 million at September 30, 2010.
     
  • Cost of funds reduction – Cost of funds saw continued reductions to 1.04% at December 31, 2010, down 20 basis points from 1.24% at September 30, 2010.
     
  • Increase in demand deposits – Non-interest bearing demand deposits increased $13.8 million, or 3%, from the end of the prior quarter, further improving the deposit mix.

CREDIT QUALITY

During the fourth quarter of 2010, the Company sold 45 loans with a carrying balance of approximately $129.3 million at an approximate 31% average weighted discount to their carrying values. These loans consisted of $128.7 million in commercial real estate loans and $619 thousand in commercial loans. Of the commercial real estate loans sold, loans secured by hotels totaled $37.8 million, or 29.2% of total loans sold, loans secured by multifamily residential properties accounted for $28.7 million, or 22.2%, loans secured by shopping centers totaled $27.0 million, or 20.9%, commercial and industrial building secured loans totaled $11.6 million, or 9.0%, loans secured by land totaled $10.2 million, or 7.9%, loans secured by carwash and gas stations totaled $8.6 million, or 6.6%, and other loans secured by real estate totaled $4.8 million or 3.7%.

Non-performing loans totaled $49.4 million, or 38.2% of the total sold, TDR loans totaled $35.8 million, or 27.7%, delinquent loans totaled $40.3 million or 31.1%. Legacy Wilshire loans or loans originated by the Company and not acquired through the FDIC-assisted acquisition of Mirae Bank in 2009, accounted for the majority of the loans at $127.0 million or 98.2% of loans sold.

For the fourth quarter of 2010, the Company recorded a provision for loan losses of $65.5 million compared to $18.0 million in the third quarter of 2010. Provision for loan losses recorded for the full year amounted to $132.7 million for 2010 compared to $68.6 million for 2009. The allowance for loan losses was $107.8 million, or 4.60% of gross loans, on December 31, 2010, compared to $99.0 million, or 4.04% of gross loans, at September 30, 2010. Allowance for loan losses as a percentage of legacy Wilshire loans increased 61 basis points to 5.05% from 4.44%. The coverage ratio of allowance for loan losses to non-performing assets also increased to 135.5% at December 31, 2010 from 106.9% at September 30, 2010.

Non-accrual Loans

At December 31, 2010, total non-accrual loans were $64.6 million, or 2.63% of gross loans, compared to $76.3 million, or 3.12% of gross loans, at September 30, 2010, and $69.4 million, or 3.85% of gross loans, at December 31, 2009. The decrease is primarily attributable to the sales of problem loans described above. Legacy Wilshire non-accrual loans totaled $54.2 million or 2.54% of total legacy Wilshire loans.

As previously disclosed, upon acquiring certain assets and liabilities of the former Mirae Bank, the Company entered into loss sharing agreements 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 agreements 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) Dec 31, 2010 Sep 30, 2010 Dec 31, 2009
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL TOTAL
               
Construction $ -- $ -- $ -- $ -- $ 2,660 $ 2,660 $ --
Real Estate Secured 8,005 52,586 60,591 10,568 56,780 67,348 63,571
Commercial & Industrial 2,345 1,631 3,976 3,031 3,272 6,303 5,805
Consumer -- 27 27   37 37 70
TOTAL NON-ACCRUALS $ 10,350 $ 54,244 $ 64,594 $ 13,599 $ 62,749 $ 76,348 $ 69,446

Impaired Loans

Total impaired loans at December 31, 2010 were $118.5 million, a reduction of $74.1 million, or 38.5%, from $192.6 million at September 30, 2010, and a reduction of $16.9 million, or 12.5%, from $135.4 million at December 31, 2009. The reduction was mostly in legacy Wilshire loans which compared to September 30, 2010 decreased by $69.1 million to $99.1 million at December 31, 2010. A significant portion of the reduction of impaired loans can be attributed to the sale of problem loans during the fourth quarter of 2010. Total impaired loans by loan category are shown in the table below:

 
  Quarter Ended
(dollars in thousands) Dec 31, 2010 Sep 30, 2010 Dec 31, 2009
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL TOTAL
               
Construction $ -- $ -- $ -- $ -- $ 2,660 $ 2,660 $ --
Real Estate Secured 15,120 93,452 108,572 18,837 157,068 175,905 128,477
Commercial & Industrial 4,216 5,649 9,865 5,479 8,505 13,984 6,847
Consumer -- 27 27 -- 37 37 70
TOTAL IMPAIRED LOANS $ 19,336 $ 99,128 $ 118,464 $ 24,316 $ 168,270 $ 192,586 $ 135,394

Loan Delinquencies

At December 31, 2010, total loan delinquencies increased to $39.2 million from $34.8 million at September 30, 2010. Compared to the previous year end, delinquencies declined by $1.4 million from $40.6 million at December 31, 2009. As a percentage of gross loans, delinquencies increased to 1.67% at December 31, 2010 from 1.42% at September 30, 2010. The increase in delinquencies occurred entirely in the "covered" loan portfolio while non-covered legacy Wilshire loans decreased from $32.0 million at September 30, 2010 to $31.4 million at December 31, 2010. The increase in delinquencies by days past due occurred in the 30-59 day delinquencies, while 60-89 day delinquencies declined during the fourth quarter. Delinquencies by days past due and loan type are reflected in the tables below:

 
By Days Past Due Quarter Ended
(dollars in thousands) Dec 31, 2010 Sep 30, 2010 Dec 31, 2009
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL TOTAL
               
30 - 59 Days Past Due $ 4,253 $ 20,321 $ 24,574 $ 1,754 $ 13,582 $ 15,336 $ 28,523
60 - 89 Days Past Due 3,566 11,107 14,673 1,053 18,126 19,179 10,781
90 Days, and still accruing -- -- -- -- 304 304 1,336
TOTAL DELINQUENCIES $ 7,819 $ 31,428 $ 39,247 $ 2,807 $ 32,012 $ 34,819 $ 40,640
               
               
By Loan Category Quarter Ended
(dollars in thousands) Dec 31, 2010 Sep 30, 2010 Dec 31, 2009
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL TOTAL
               
Construction $ -- $ -- $ -- $ -- $ -- $ -- $ --
Real Estate Secured 6,421 28,947 35,368 1,331 27,215 28,546 35,438
Commercial & Industrial 1,398 2,436 3,834 1,476 4,740 6,216 5,006
Consumer -- 45 45 -- 57 57 196
TOTAL DELINQUENCIES $ 7,819 $ 31,428 $ 39,247 $ 2,807 $ 32,012 $ 34,819 $ 40,640

Loan Charge-offs

Loan charge-offs for the fourth quarter of 2010 totaled $58.3 million, compared to $14.3 million in the third quarter of 2010 and $18.7 million for the fourth quarter of 2009. The increase in charge-offs resulted from aggressive charge-offs of non-performing assets in the fourth quarter of 2010, some of which were due to the sale of problem loans previously discussed. Charge-offs by loan type figures are reflected in the table below:

   
(dollars in thousands) Quarter Ended
  Dec 31, 2010 Sep 30, 2010 Dec 31, 2009
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL TOTAL
               
Construction $ -- $ 401 $ 401 $ -- $ -- $ -- $ 99
Real Estate Secured 252 53,256 53,508 324 12,446 12,770 7,002
Commercial & Industrial 431 3,940 4,371 91 1,448 1,539 11,511
Consumer   14 14   33 33 43
TOTAL CHARGE-OFFS $ 683 $ 57,611 $ 58,294 $ 415 $ 13,927 $ 14,342 $ 18,655

BALANCE SHEET

During the fourth quarter of 2010, the Company continued to reposition its balance sheet by utilizing cash and cash equivalents, investments, and loan payoffs to fund the run-off of higher-costing money market and time deposit accounts. This repositioning had the effect of lowering the Company's overall cost of funds.

As a result of this strategy, total assets declined to $2.98 billion at December 31, 2010, from $3.23 billion at September 30, 2010 and $3.4 billion at December 31, 2009.

 
Loan Categories
(dollars in thousands) Quarter Ended
  December 31, 2010 September 30, 2010
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL
             
Construction $ -- $ 72,258 $ 72,258 $ -- $ 70,808 $ 70,808
Real Estate Secured 159,699 1,764,389 1,924,088 166,490 1,832,726 1,999,216
Commercial & Industrial 49,680 283,286 332,966 53,613 308,277 361,890
Consumer 111 15,574 15,685 125 16,937 17,062
TOTAL GROSS LOANS  $ 209,490 $ 2,135,507 $ 2,344,997 $ 220,228 $ 2,228,748 $ 2,448,976

The Company experienced stronger loan demand in the fourth quarter of 2010 with new loan originations increasing to $169.1 million in the fourth quarter of 2010 from $112.9 million in the third quarter of 2010. SBA loan originations increased to $47.7 million in the fourth quarter of 2010 from $17.6 million in the third quarter of 2010, an increase of 171% on a quarterly basis. Total loans were $2.34 billion at December 31, 2010, compared to $2.44 billion at September 30, 2010, a decrease of $103.9 million, mostly due to the sale of problem loans during the fourth quarter.

Total deposits totaled $2.46 billion at December 31, 2010, down from $2.71 billion at September 30, 2010. The decline came from higher-cost money market accounts and time deposits. This decline was partially offset by increases in non-interest bearing deposits and savings and interest checking accounts. Core deposits represented 71.2% of total deposits at December 31, 2010. As a result of Management's strategy to improve the deposit mix over the past year, demand deposits increased 21.0% from December 31, 2009 to December 31, 2010 and as a percentage of total deposits, increased from 13.6% to 19.0% during the same period. During the fourth quarter of 2010, the Company opened 2,026 new demand deposits accounts with a balance of $52.6 million at the December 31, 2010.

Total other real estate owned (OREOs) decreased by $1.0 million from $16.0 million at September 30, 2010 to $15.0 million at December 31, 2010. Covered OREOs at December 31, 2010 were $2.6 million and non-covered OREOs were $12.4 million. Outflow from OREO in the fourth quarter of 2010 consisted of 14 sold properties totaling $10.1 million. Inflows to OREO in the fourth quarter of 2010 consisted of 8 properties totaling $9.1 million.

Total cash and cash equivalents declined from $309.4 million at September 30, 2010 to $198.5 million at December 31, 2010 and investment securities declined from $367.5 million to $316.7 million for the same period. To reduce deposits costs, the Company ran off higher costing time and money market deposits supplemented by lower yielding cash, fed funds sold, and investment securities. Although the Company did not sell any investment securities in the fourth quarter of 2010, there were call transactions and mortgage backed securities pay-downs that resulted in a reduction in investment securities when compared to the previous quarter.

Capital Ratios

The Company's capital ratios continued to be well in excess of "well capitalized" regulatory requirements.

 
(Dollars In thousands

except per share info)
December 31, 2010 Well Capitalized Regulatory Requirements Total Excess Above Well Capitalized Requirements
       
Tier 1 Leverage Capital Ratio 9.73% 5.00% $ 147,433
Tier 1 Risk-Based Capital Ratio 13.30% 6.00% 166,490
Total Risk-Based Capital Ratio 14.68% 10.00% 106,749
Tangible Common Equity To Tangible Assets 5.74% N/A N/A
Tangible Common Equity Per Common Share $ 5.79 N/A N/A

STATEMENT OF OPERATIONS

Net interest Income and Margin

Net interest income before provision for loan losses totaled $26.4 million in the fourth quarter of 2010, compared to $29.7 million in the third quarter of 2010, and $29.4 million in the fourth quarter of 2009. Net interest income before provisions for 2010 totaled $113.8 million, an increase from $99.5 million for the full year 2009. On a quarterly basis, interest income declined from $44.6 million for the fourth quarter of 2009 and $39.8 million for the third quarter of 2010, to $34.3 million for the fourth quarter of 2010. For the full year, interest income declined from $158.4 million in 2009 to $156.5 million in 2010. The decrease in interest income can be largely attributed to the reversal of interest income of non-accrual loans totaling $4.4 million during the fourth quarter of 2010. 

Interest expense declined to $8.0 million for the quarter ending December 31, 2010 and $42.7 million for the full year 2010. This compares to $10.1 million for the third quarter of 2010, $15.2 million for the fourth quarter of 2009, and $58.9 million for the full year 2009. The reduction in interest expense resulted from Management's strategy to lower deposit costs in the third and fourth quarter of 2010. As a result, interest expense declined 21% from the third to fourth quarter of 2010 and on a full year basis, interest expense declined 27% from 2009 to 2010.

Net interest margin was 3.74% in the fourth quarter of 2010, compared to 3.93% in the third quarter of 2010 and 3.73% in the fourth quarter of 2009. The decline in net interest margin from the third quarter of 2010 was primarily attributable to the impact of interest reversals on non-accrual loans, which negatively impacted the net interest margin by 62 basis points in the fourth quarter of 2010 and 31 basis points for the full year 2010. Not including non-accrual interest reversals, net interest margin for the quarter and year ending December 31, 2010 would have been 4.36% and 4.07%, respectively. Without the effect of non-accrual interest income reversals, loan yield would have been 6.30% for the fourth quarter and 6.33% for the third quarter of 2010. Cost of funds declined to 1.04% in the fourth quarter of 2010 from 1.24% in the third quarter of 2010.

Non-Interest Income

Non-interest income was $6.1 million in the fourth quarter of 2010, compared to $10.0 million for the previous quarter and $17.6 million for the fourth quarter of 2009. Non-interest income for the full year 2010 was $33.8 million, a decrease from $57.3 million in 2009. Full year non-interest income in 2009 includes the gain from the acquisition of Mirae Bank of $21.7 million posted in the second quarter of 2009. The decline in non-interest income is primarily due to lower gains on the sale of securities. However, as the Company has continued to focus on SBA loan origination and sales in 2010, total gain on sale of loans increased 69% from $3.7 million in 2009 to $6.3 million in 2010. Management will continue to focus on SBA loan originations and sales in 2011. During the fourth quarter of 2010, the Company originated $47.7 million in SBA loans and sold approximately $20.8 million, compared to originations of $17.6 million and sales of $19.6 million in the third quarter of 2010.

Non-Interest Expense

Total non-interest expense was $19.7 million in the fourth quarter of 2010, compared with $16.5 million in the same period of the prior year and $14.8 million for the third quarter of 2010. Full year non-interest expense in 2010 was $65.3 million, an increase from $57.4 million in 2009. The increase was primarily due to expenses related to OREO which totaled $2.9 million in the fourth quarter of 2010 in addition to a $1.2 million loss on investment in low income housing tax credit funds. On a full year basis, salaries and wages increased from $26.5 million for 2009 to $29.1 million for 2010, partly attributable to the addition of staff from the acquisition of Mirae Bank in the second quarter of 2009. Along with the increase in OREO expenses, the increase in staff contributed to the full year increase in non-interest expense.

CONFERENCE CALL

Management will host its quarterly conference call on January 25, 2011, at 11:00 a.m. PDT (2:00 p.m. EDT). Investment professionals are invited to participate in the call by dialing 800-329-9097 (domestic number) or617-614-4929 (international number) and entering passcode 88937707.

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. Visit us at 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. 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)
  December 31,

2010
September 30,

2010
Three Month

Change
December 31,

2009
One Year

Change
           
           
ASSETS:          
Cash and Due from Banks $ 68,530 $ 108,411 -37% $ 155,753 -56%
Federal Funds Sold and Other Cash Equivalents 130,005 201,006 -35% 80,003 63%
Total Cash and Cash Equivalents 198,535 309,417 -36% 235,756 -16%
           
Investment Securities Available For Sale 316,623 367,433 -14% 651,318 -51%
Investment Securities Held To Maturity 85 91 -7% 109 -22%
Total Investment Securities 316,708 367,524 -14% 651,427 -51%
           
Loans          
Real Estate Construction 71,596 70,123 2% 48,371 48%
Residential Real Estate 97,504 108,549 -10% 93,828 4%
Commercial Real Estate 1,823,280 1,887,247 -3% 1,881,998 -3%
Commercial and Industrial 332,117 360,990 -8% 385,958 -14%
Consumer 15,736 17,135 -8% 17,286 -9%
Total Loans 2,340,233 2,444,044 -4% 2,427,441 -4%
Allowance For Loan Losses (107,786) (99,022) 9% (62,130) 73%
Loans, Net of Allowance for Loan Losses 2,232,447 2,345,022 -5% 2,365,311 -6%
           
Accrued Interest Receivable 10,061 12,839 -22% 15,266 -34%
Due from Customers on Acceptances 368 269 37% 945 -61%
Other Real Estate Owned 14,983 15,996 -6% 3,797 295%
Premises and Equipment 13,330 13,771 -3% 12,660 5%
Federal Home Loan Bank (FHLB) Stock, at Cost 18,531 19,302 -4% 21,040 -12%
Cash Surrender Value of Life Insurance 18,663 18,510 1% 18,037 3%
Investment in affordable housing partnerships 28,186 29,389 -4% 13,732 105%
Deferred Income Taxes 38,876 28,138 38% 18,684 108%
Servicing Assets 7,331 7,041 4% 6,898 6%
Goodwill 6,675 6,675 0% 6,675 0%
FDIC Indemnification 28,525 26,232 9% 33,775 -16%
Other Assets 46,621 32,560 43% 31,994 46%
TOTAL ASSETS $ 2,979,840 $ 3,232,685 -8% $ 3,435,997 -13%
           
LIABILITIES AND STOCKHOLDERS' EQUITY:          
LIABILITIES:          
Non-interest Bearing Demand Deposits $ 467,067 $ 453,333 3% $ 385,188 21%
Savings and Interest Checking 106,115 102,414 4% 94,539 12%
Money Market Deposits 669,486 790,779 -15% 909,125 -26%
Time Deposits in denomination of $100,000 or more 699,503 733,724 -5% 795,679 -12%
Other Time Deposits 518,769 626,498 -17% 643,684 -19%
Total Deposits 2,460,940 2,706,748 -9% 2,828,215 -13%
           
FHLB borrowings and Federal Funds Purchased 158,011 131,547 20% 232,000 -32%
Acceptance Outstanding 368 269 37% 945 -61%
Junior Subordinated Debentures 87,321 87,321 0% 87,321 0%
Accrued Interest Payable 4,092 4,357 -6% 5,865 -30%
Other Liabilities  29,631 31,115 -5% 15,515 91%
Total Liabilities 2,740,363 2,961,357 -7% 3,169,861 -14%
           
STOCKHOLDERS' EQUITY:          
Preferred Stock 60,450 60,317 0% 59,931 1%
Common Stock 55,601 55,513 0% 54,918 1%
Retained Earnings 121,414 151,398 -20% 150,961 -20%
Accumulated Other Comprehensive Income 2,012 4,100 -51% 326 517%
Total Stockholders' Equity 239,477 271,328 -12% 266,136 -10%
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,979,840 $ 3,232,685 -8% $ 3,435,997 -13%
 
 
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data) (unaudited)
  Quarter Ended Three Month

% Change
 Quarter Ended  

One Year % Change
  December 31, 2010 September 30, 2010   December 31, 2009  
           
INTEREST INCOME          
Interest and Fees on Loans $ 32,320 $ 36,452 -11% $  38,478 -16%
Interest on Investment Securities 1,551 2,804 -45% 5,562 -72%
Interest on Federal Funds Sold 476 515 -8% 576 -17%
Total Interest Income 34,347 39,771 -14% 44,616 -23%
           
INTEREST EXPENSE          
Deposits 6,758 8,688 -22% 12,737 -47%
FHLB Advances and Other Borrowings 1,194 1,431 -17% 2,473 -52%
Total Interest Expense 7,952 10,119 -21% 15,210 -48%
           
Net Interest Income Before Provision for Losses on Loans and Loan Commitments 26,395 29,652 -11% 29,406 -10%
Provision for Losses on Loans and Loan Commitments 65,500 18,000 264% 25,600 156%
Net Interest Income (Loss) After Provision for Losses on Loans and Loan Commitments (39,105) 11,652 -436% 3,806 -1127%
           
NONINTEREST INCOME          
Service Charges on Deposits 3,034 3,071 -1% 3,400 -11%
Gain on Sales of Loans 2,059 2,723 -24% 1,983 4%
Gain on Sale of Investment Securities 40 2,600 -98% 9,569 -100%
Other 972 1,652 -41% 2,636 -63%
Total Noninterest Income 6,105 10,046 -39% 17,588 -65%
           
NONINTEREST EXPENSES          
Salaries and Employee Benefits 7,217 7,458 -3% 7,183 0%
Occupancy & Equipment 1,936 1,921 1% 2,162 -10%
Data Processing 692 702 -1% 1,219 -43%
Other 9,838 4,692 110% 5,921 66%
Total Noninterest Expenses 19,683 14,773 33% 16,485 19%
           
(Loss) Income Before Income Taxes (52,683) 6,925 -861% 4,909 -1173%
Income Taxes (Benefit) Provision (23,609) 1,945 -1314% 833 -2934%
NET (LOSS) INCOME (29,074) 4,980 -684% 4,076 -813%
           
Preferred Stock Cash Dividend and Accretion of          
Preferred Stock Discount 910 908 0% 902 1%
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (29,984) $ 4,072 -836% $ 3,174 -1045%
           
PER COMMON SHARE INFORMATION          
Basic (Loss) Earnings  Per Common Share $ (1.02) $ 0.14 -836% $ 0.11 -1042%
Diluted (Loss) Earnings Per  Common Share $ (1.02) $ 0.14 -837% $ 0.11 -1043%
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:          
Basic 29,486,635 29,486,734   29,413,943  
Diluted 29,486,635 29,509,153   29,423,424  
 
 
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data) (unaudited)
  Twelve Month Ended  
  December 31, 2010 December 31, 2009 One Year

 % Change 
       
INTEREST INCOME      
Interest and Fees on Loans $   140,155 $ 139,295 1%
Interest on Investment Securities 14,726 16,573 -11%
Interest on Federal Funds Sold 1,666 2,486 -33%
Total Interest Income 156,547 158,354 -1%
       
INTEREST EXPENSE      
Deposits 37,096 48,690 -24%
FHLB Advances and Other Borrowings 5,608 10,201 -45%
Total Interest Expense 42,704 58,891 -27%
       
Net Interest Income Before Provision for Losses on Loans and Loan Commitments 113,843 99,463 14%
Provision for Losses on Loans and Loan Commitments 132,700 68,600 93%
Net Interest Income (Loss)After Provision for Losses on Loans And Loan Commitments (18,857) 30,863 -161%
       
NONINTEREST INCOME      
Service Charges on Deposits 12,545 12,738 -2%
Gain on Sales of Loans 6,261 3,694 69%
Gain on Sale of Investment Securities 8,782 11,158 -21%
 FAS 141R gain on bargain purchase -- 21,679 -100%
Other 6,227 8,047 -23%
Total Noninterest Income 33,815 57,316 -41%
       
NONINTEREST EXPENSES      
Salaries and Employee Benefits 29,074 26,498 10%
Occupancy & Equipment 7,984 7,456 7%
Data Processing 2,721 3,969 -31%
Other 25,500 19,446 31%
Total Noninterest Expenses 65,279 57,369 14%
       
(Loss) Income Before Income Taxes (50,321) 30,810 -263%
Income Taxes (Benefit) Provision (25,877) 10,686 -342%
NET (LOSS) INCOME (24,444) 20,124 -221%
       
Preferred Stock Cash Dividend and Accretion of      
Preferred Stock Discount 3,626 3,620 0%
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (28,070) $ 16,504 -270%
       
PER COMMON SHARE INFORMATION      
Basic (Loss) Earnings  Per Common Share $ (0.95) $ 0.56 -270%
Diluted (Loss) Earnings Per  Common Share $ (0.95) $ 0.56 -270%
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:      
Basic 29,486,351 29,413,804  
Diluted 29,486,351 29,422,779  
 
 
SUMMARY OF FINANCIAL DATA
(dollars in thousands, except per share data) (unaudited)
 
  Quarter Ended  
AVERAGE BALANCES December 31, 2010   September 30, 2010   December 31, 2009  
             
Average Assets $ 3,135,579   $ 3,348,434   $ 3,414,830  
Average Equity 272,111   274,846   278,382  
Average Net Loans 2,333,104   2,372,429   2,388,443  
Average Deposits 2,594,300   2,810,176   2,787,804  
Average Time Deposits in denomination of $100,000 or more 717,362   743,966   862,805  
Average Interest Earning Assets 2,846,719   3,049,288   3,175,516  
             
  Twelve Months Ended  
AVERAGE BALANCES December 31, 2010       December 31, 2009  
             
Average Assets $ 3,343,438       $ 2,987,365  
Average Equity 273,925       271,197  
Average Net Loans 2,358,195       2,219,675  
Average Deposits 2,806,832       2,295,409  
Average Time Deposits in denomination of $100,000 or more 745,139       944,012  
Average Interest Earning Assets 3,055,655       2,782,691  
             
  Quarter Ended  
PROFITABILITY December 31, 2010   September 30, 2010   December 31, 2009  
             
Annualized Return on Average Assets -3.71%   0.59%   0.48%  
Annualized Return on Average Equity -42.74%   7.25%   5.86%  
Efficiency Ratio 60.56%   37.21%   35.08%  
Annualized Operating Expense/Average Assets 2.51%   1.76%   1.93%  
Annualized Net Interest Margin 3.74%   3.93%   3.73%  
             
  Twelve Months Ended  
PROFITABILITY December 31, 2010       December 31, 2009  
             
Annualized Return on Average Assets -0.73%       0.90%  
Annualized Return on Average Equity -8.92%       9.89%  
Efficiency Ratio 44.21%       36.59%  
Annualized Operating Expense/Average Assets 1.95%       2.56%  
Annualized Net Interest Margin 3.76%       3.60%  
             
  As Of
DEPOSIT COMPOSITION December 31, 2010 Cost of

Funds
September 30, 2010 Cost of

Funds
December 31, 2009 Cost of

Funds
             
Noninterest Bearing Demand Deposits 19.0% 0.00% 16.7% 0.00% 13.6% 0.00%
Savings & Interest Checking 4.3% 2.34% 3.8% 2.44% 3.3% 2.68%
Money Market Deposits 27.2% 0.91% 29.2% 1.17% 32.2% 2.18%
Time Deposits of $100,000 or More 28.4% 1.17% 27.1% 1.32% 28.1% 1.91%
Other Time Deposits 21.1% 1.66% 23.1% 1.86% 22.8% 2.27%
Total Deposits 100.0% 1.04% 100.0% 1.24% 100.0% 1.83%
   
  As Of
CAPITAL RATIOS December 31, 2010   September 30, 2010   December 31, 2009  
             
Tier 1 Leverage Ratio 9.73%   10.01%   9.77%  
Tier 1 Risk-Based Capital Ratio 13.30%   14.10%   14.37%  
Total Risk-Based Capital Ratio 14.68%   15.56%   15.81%  
Total Shareholders' Equity $ 239,477   $ 271,328   $ 266,136  
Book Value Per Common Share $6.07   $7.16   $7.01  
Tangible Common Equity Per Common Share * $5.79   $6.87   $6.71  
Tangible Common Equity to Tangible Assets ** 5.74%   6.28%   5.76%  
 
* 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)    
     
 

Reconciliation of GAAP financial measures to non-GAAP financial measures:
   
         
  December 31, 2010 September 30, 2010 December 31, 2009  
         
Total stockholders' equity $ 239,477 $ 271,328 $ 266,136  
 Preferred stock, net of discount (60,450) (60,317) (59,931)  
 Goodwill and other intangible assets, net (8,320) (8,412) (8,688)  
Tangible common equity $ 170,707 $ 202,599 $ 197,517  
         
Total assets $ 2,979,840 $ 3,232,685 $ 3,435,997  
 Goodwill and other intangible assets, net (8,320) (8,412) (8,688)  
Tangible assets $ 2,971,520 $ 3,224,273 $ 3,427,309  
Common shares outstanding 29,477,638 29,486,734 29,413,757  
         
         
ALLOWANCE FOR LOAN LOSSES Quarter Ended
(net of SBA guaranteed portions) December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 December 31, 2009
           
Balance at Beginning of Period $ 99,020 $ 91,419 $ 79,576 $ 62,130 $ 54,735
Provision for Losses on Loans 65,500 17,999 31,269 16,930 24,540
FDIC Indemnification -- 2,953 (3,140) 5,831 856
Recoveries on loans previously charged-off 1,560 991 872 512 654
Less Charge-offs (58,294) (14,342) (17,158) (5,827) (18,655)
Balance at End of Period $ 107,786 $ 99,020 $ 91,419 $ 79,576 $ 62,130
           
Net Loan Charge-offs/Average Total Loans 2.43% 0.56% 0.67% 0.22% 0.74%
Charge-offs/Average Total Loans 2.50% 0.60% 0.70% 0.24% 0.76%
Allowance for Loan Losses/Total Loans 4.60% 4.04% 3.72% 3.29% 2.56%
Allowance for Loan Losses/Legacy Wilshire Loans 5.05% 4.44% 4.11% 3.66% 2.86%
Allowance for Loan Losses/Non-accrual Loans 166.87% 129.70% 109.99% 75.77% 89.47%
Allowance for Loan Losses/Non-performing Loans 166.87% 129.18% 109.99% 75.77% 87.78%
Allowance for Loan Losses/Non-performing Assets 135.45% 106.88% 101.97% 72.42% 83.31%
           
           
NON-PERFORMING ASSETS As Of
(net of SBA guaranteed portions) December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 December 31, 2009
Nonaccrual Loans:          
Non-covered Loans $ 54,244 $ 62,749 $ 64,285 $ 83,115 $ 51,119
Covered Loans 10,350 13,599 18,831 21,909 18,327
 Total 64,594 76,348 83,116 105,024 69,446
           
Loans 90 days or more past due and still accruing:          
Non-covered Loans -- 304 1 -- 1,336
Covered Loans -- -- -- -- --
 Total -- 304 1 -- 1,336
           
Total Nonperforming Loans:          
 Non-covered Loans 54,244 63,053 64,286 83,115 52,455
 Covered Loans 10,350 13,599 18,831 21,909 18,327
 Total 64,594 76,652 83,117 105,024 70,782
           
OREO and Repossessed Vehicles:          
Non-covered Loans 12,429 9,519 4,346 3,136 3,297
Covered Loans 2,554 6,477 2,194 1,723 500
 Total 14,983 15,996 6,540 4,859 3,797
           
Total Nonperforming Assets:          
 Non-covered Loans 66,673 72,572 68,632 86,251 55,752
 Covered Loans 12,904 20,076 21,025 23,632 18,827
  Total $ 79,577 $ 92,648 $ 89,657 $ 109,883 $ 74,579
           
Total Nonperforming Loans/Gross Loans 2.75% 3.13% 3.38% 4.34% 2.92%
           
Total Nonperforming Assets/Total Assets 2.67% 2.87% 2.61% 3.18% 2.17%
 
 
Performing Troubled Debt Restructured (TDR) Loans & Impaired Restructured Loans
(dollars in thousands) (unaudited) As Of
  December 31, 2010 September 30, 2010
  COVERED NON-COVERED TOTAL COVERED NON-COVERED TOTAL
             
Construction $  -- $ -- $ -- $ -- $ -- $ --
Real Estate Secured 7,115 40,866 47,981 8,268 100,289 108,557
Commercial & Industrial 1,871 4,018 5,889 2,448 4,929 7,377
Consumer --   -- --   --
TOTAL PERFORMING TDR LOANS $ 8,986 $ 44,884 $ 53,870 $ 10,716 $ 105,218 $ 115,934
   
   
LOAN ORIGINATION AMOUNT (unaudited) Quarter Ended
  December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010 December 31, 2009
           
Total new loan origination amount, excluding renewal. $ 169,051 $ 112,911 $ 186,121 $ 87,288 $ 125,281
SBA new loan origination amount, excluding renewal. $ 47,735 $ 17,613 $ 32,630 $ 23,471 $ 17,158
           
  Twelve Months Ended      
  December 31, 2010 September 30, 2009      
           
Total new loan origination amount, excluding renewal. $ 555,371 $ 408,031      
SBA new loan origination amount, excluding renewal. $ 121,449 $ 34,324      
           
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS Quarter Ended Twelve Months Ended  
(net of SBA guaranteed portions)   (unaudited) December 31, 2010 December 31, 2009 December 31, 2010 December 31, 2009  
           
Balance at beginning of period $ 2,929 $ 1,455 $ 2,515 $ 1,243  
Provision for losses on off-balance sheet items -- 1,060 411 1,272  
Balance at end of period $ 2,926 $ 2,515 $ 2,926 $ 2,515  
           
   
WILSHIRE BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(dollars in thousands) (unaudited)
 
  For the Quarter Ended
   December 31, 2010 September 30, 2010 December 31, 2009
  Average

Balance

Interest

Income/

Expense
Average

Yield/

Rate
Average

Balance

Interest

Income/

Expense
Average

Yield/

Rate
Average

Balance

Interest

Income/

Expense
Average

Yield/

Rate
INTEREST EARNING ASSETS                  
                   
Real Estate Loans $2,072,620 $27,035 5.22% $2,083,533 $30,765 5.91% $2,027,288 $31,822 6.28%
Commercial Loans 347,058 4,446 5.12% 365,201 4,853 5.32% 400,784 5,745 5.73%
Consumer Loans 16,084 138 3.43% 18,508 156 3.37% 17,588 229 5.21%
 Total Gross Loans 2,435,762 31,619 5.19% 2,467,243 35,774 5.80% 2,445,660 37,796 6.18%
Loan Fees toward Yield   701     678     682  
Allowance for Loan Losses & Unearned Income (102,659)     (94,814)     (57,217)    
 Net Loans 2,333,103 32,320 5.54% 2,372,429 36,452 6.15% 2,388,443 38,478 6.44%
                   
INVESTMENT SECURITIES AND                  
OTHER INTEREST-EARNING ASSETS:                  
Investment Securities* 353,983 1,551 2.02% 449,153 2,805 2.76% 613,021 5,562 3.79%
Federal Funds Sold 159,633 476 1.19% 227,706 514 0.90% 174,052 576 1.32%
 Total Investment Securities and                  
 Other Earning Assets 513,616 2,027 1.76% 676,859 3,319 2.13% 787,073 6,138 3.24%
                   
TOTAL INTEREST-EARNING ASSETS $2,846,719 $34,347 4.86% $3,049,288 $39,771 5.26% $3,175,516 $44,616 5.65%
                   
INTEREST BEARING LIABILITIES                  
                   
INTEREST-BEARING DEPOSITS:                  
Money Market $738,538 $1,684 0.91% $858,437 $2,507 1.17% $853,770 $4,661 2.18%
NOW 22,217 19 0.34% 21,706 23 0.42% 21,971 36 0.65%
Savings 81,267 587 2.89% 78,848 590 2.99% 68,373 569 3.33%
Time Deposits of $100,000 or More 717,362 2,106 1.17% 743,966 2,455 1.32% 862,805 4,113 1.91%
Other Time Deposits 569,725 2,362 1.66% 668,873 3,113 1.86% 592,336 3,358 2.27%
 Total Interest Bearing Deposits 2,129,109 6,758 1.27% 2,371,830 8,688 1.47% 2,399,255 12,737 2.12%
                   
BORROWINGS:                  
FHLB Advances and Other Borrowings 144,145 697 1.93% 140,156 758 2.16% 238,017 1,811 3.04%
Junior Subordinated Debentures 87,321 497 2.28% 87,321 673 3.08% 87,321 662 3.03%
 Total Borrowings 231,466 1,194 2.06% 227,477 1,431 2.52% 325,338 2,473 3.04%
                   
TOTAL INTEREST BEARING LIABILITIES $2,360,575 $7,952 1.35% $2,599,307 $10,119 1.56% $2,724,593 $15,210 2.23%
                   
NET INTEREST INCOME   $26,395     $29,652     $29,406  
                   
NET INTEREST SPREAD     3.51%     3.70%     3.42%
                   
NET INTEREST MARGIN     3.74%     3.93%     3.73%
 
* 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, 2010 December 31, 2009
  Average

Balance

Interest

Income/

Expense
Average

Yield/

Rate
Average

Balance

Interest

Income/

Expense
Average

Yield/

Rate
INTEREST EARNING ASSETS            
             
Real Estate Loans $2,062,242 $116,701 5.66% $1,842,540 $114,014 6.19%
Commercial Loans 367,591 19,970 5.43% 402,367 21,553 5.36%
Consumer Loans 17,162 654 3.81% 18,595 1,036 5.57%
Total Gross Loans 2,446,995 137,325 5.61% 2,263,502 136,603 6.04%
Loan Fees toward Yield   2,830     2,692  
Allowance for Loan Losses & Unearned Income (88,800)     (43,827)    
Net Loans 2,358,195 140,155 5.94% 2,219,675 139,295 6.28%
             
INVESTMENT SECURITIES AND            
OTHER INTEREST-EARNING ASSETS:            
Investment Securities* 527,999 14,726 3.00% 429,205 16,573 4.03%
Federal Funds Sold 169,461 1,666 0.98% 133,811 2,486 1.86%
Total Investment Securities and            
Other Earning Assets 697,460 16,392 2.51% 563,016 19,059 3.51%
             
TOTAL INTEREST-EARNING ASSETS $3,055,655 $156,547 5.16% $2,782,691 $158,354 5.72%
             
             
INTEREST BEARING LIABILITIES            
             
INTEREST-BEARING DEPOSITS:            
Money Market $880,618 $11,755 1.33% $584,054 $13,842 2.37%
NOW 22,104 97 0.44% 20,546 177 0.86%
Savings 77,484 2,380 3.07% 55,639 1,932 3.47%
Time Deposits of $100,000 or More 745,139 10,370 1.39% 944,012 23,145 2.45%
Other Time Deposits 654,099 12,494 1.91% 357,590 9,594 2.68%
Total Interest Bearing Deposits 2,379,444 37,096 1.56% 1,961,841 48,690 2.48%
             
BORROWINGS:            
FHLB Advances and Other Borrowings 142,759 3,125 2.19% 312,009 7,073 2.27%
Junior Subordinated Debentures 87,321 2,483 2.84% 87,321 3,128 3.58%
Total Borrowings 230,080 5,608 2.44% 399,330 10,201 2.55%
             
TOTAL INTEREST BEARING LIABILITIES $2,609,524 $42,704 1.64% $2,361,171 $58,891 2.50%
             
NET INTEREST INCOME   $113,843     $99,463  
             
NET INTEREST SPREAD     3.52%     3.22%
             
NET INTEREST MARGIN     3.76%     3.60%
 
* Tax equivalent ratios for investment securities
CONTACT: Joanne Kim, President & CEO, (213) 639-1843
         Alex Ko, EVP & CFO, (213) 427-6560
         www.wilshirebank.com

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