updated 4/26/2011 1:18:19 AM ET 2011-04-26T05:18:19

LOS ANGELES, April 26, 2011 (GLOBE NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported a net loss to common shareholders of $52.1 million, or ($1.77) per basic and diluted share, for the quarter ended March 31, 2011. This compares to net income available to common shareholders of $2.4 million, or $0.08 per basic and diluted share, for the same period of the prior year. The net loss reported for the first quarter of 2011 is attributable to tax expenses of $38.1 million that resulted from a deferred tax asset valuation allowance recorded in the first quarter of 2011, in addition to an increase in provision for loan losses as a result of reclassifying $93.4 million in loans to loans held-for-sale and marking the loans to their expected fair value.

Jae Whan (J.W.) Yoo, President and CEO of Wilshire Bancorp, said, "My highest priority since joining Wilshire Bancorp in February of this year has been to ensure sound credit administration practices and conservative underwriting standards. As part of this process, we have separated the loan production and underwriting functions. We have taken and will continue to take aggressive steps to reduce our level of problem assets, which includes future loan sales.

"Although the Bank's recent financial performance has declined due in part to the disposition of problem assets, we believe we still have an attractive franchise with strong earnings power. The Bank has steadily reduced its funding costs, resulting in positive trends in net interest income and net interest margin, while generating increasing non-interest income through the production and sale of SBA loans. We are now working on streamlining our operations, which should enhance efficiencies, reduce our non-interest expense levels, and further increase our earnings power. As we make steady progress on improving our asset quality and reducing credit costs, we believe we can return to being the high-performing bank that our customers and shareholders deserve."

FIRST QUARTER 2011 SUMMARY:

  • Increase in net interest margin – Net interest margin increased 81 basis points to 4.53% for the first quarter of 2011, compared to 3.72% for the quarter ending December 31, 2010.
  • Increase in allowance coverage – Allowance for loan loss coverage of gross loans increased to 5.02% at March 31, 2011, compared to 4.76% at December 31, 2010.
  • Decrease in non-accrual inflows – Inflow of loans into non-accrual status decreased from $40.3 million during the fourth quarter of 2010 to $25.2 million during the first quarter of 2011, representing a decline of $15.1 million or 37.5%. However, total non-accrual loans increased to $80.1 million at March 31, 2011, from $60.9 million at December 31, 2010, largely due to an increase in covered non-accrual loans.
  • Transfer of loans to held-for-saleLoans held-for-sale at the end of the first quarter of 2011 totaled $136.8 million, and increased from $17.1 million at December 31, 2010.
  • Deferred tax asset valuation allowance – A valuation allowance for Federal and State deferred tax assets was recorded during the first quarter of 2011 resulting in a net tax expense of $38.1 million.

CREDIT QUALITY

For the first quarter of 2011, the Company recorded a provision for loan losses of $44.8 million compared to $83.6 million in the fourth quarter of 2010. Approximately $25.0 million in additional provision for loan losses was recorded for the first quarter of 2011 due to the partial charge-off of loans as they were transferred to held-for-sale.

The allowance for loan losses increased to $114.8 million, or 5.02% of gross loans, at March 31, 2011, compared to $111.0 million, or 4.76% of gross loans, at December 31, 2010. The coverage ratio of allowance for loan losses to non-performing assets was 129.55% at March 31, 2011, compared with 128.69% at December 31, 2010. Allowance coverage of Legacy Wilshire loans increased from 5.23% at December 31, 2010 to 5.50% at March 31, 2011.

The Company sold a total of $12.3 million in loans (not including SBA or mortgage loans) during the first quarter of 2011 and received proceeds of $9.7 million, which amounts to a discount of 21.4% based on carrying values. In addition to the note sales, the Company transferred approximately $93.4 million in loans (not including SBA or mortgage loans) to held-for-sale status during the first quarter, most of which are expected to be sold during the second quarter of 2011. These loans include $21.0 million in non-accrual loans, $11.5 million in performing troubled debt restructured loans, and $7.5 million in delinquent loans. The Company marked all the loans categorized as held-for-sale to their fair values, which accounted for $31.5 million in charge-offs recorded in the first quarter of 2011.

In addition to the transfer of loans to held-for-sale, the new CEO implemented the following actions in the first quarter of 2011 to further strengthen the credit administration practices:

  • Separated the loan production and underwriting functions,
  • Established an enterprise risk management department and appointed a Chief Risk Officer responsible for managing credit risk,
  • Created a credit taskforce consisting of members of the finance, credit administration, and risk management groups whose mandate is to improve credit quality and reduce problem assets,
  • Increased the level of credit training throughout the organization; and
  • Instituted a new in-house lending limit to single borrowers.

These actions are the start of a process to create a stronger credit culture, which the Company believes will lead to improved credit quality and financial performance.

Non-accrual 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. 

At March 31, 2011, total non-accrual loans totaled $80.1 million, or 3.50% of gross loans, compared to $71.2 million, or 3.06% of gross loans, at December 31, 2010. The increase in non-accrual loans occurred primarily in the covered loan portfolio, which increased from $10.4 million at December 31, 2010, to $18.1 million at March 31, 2011, an increase of $7.7 million. Meanwhile non-covered non-accrual loans only increased $1.2 million from $60.9 million at December 31, 2010, to $62.1 million at March 31, 2011.

The following is a table showing "covered" and "non-covered" non-accrual loans by loan type: 

NON-ACCRUAL LOANS (Dollars In Thousands)
(Net of SBA Guaranteed Portions) Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Construction  $ --  $ --  $ 2,660  $  --  $ --
Real Estate Secured 60,363 59,571 56,779 61,200 75,470
Commercial & Industrial 1,695 1,284 3,272 3,051 7,603
Consumer 11 27 37 34 42
Total Non-Covered Non-Accrual Loans  $ 62,069  $ 60,882  $  62,748  $ 64,285  $ 83,115
           
Covered Loans          
           
Real Estate Secured $ 16,269 $ 8,005 $ 10,569 $ 17,232 $ 19,696
Commercial & Industrial 1,795 2,345 3,031 1,599 2,213
Total Covered Non-Accrual Loans  $ 18,064  $ 10,350  $ 13,600  $ 18,831  $ 21,909
           
Total Non-Accrual Loans          
           
Construction  $ --  $  --  $ 2,660  $ --  $ --
Real Estate Secured 76,632 67,576 67,348 78,432 95,166
Commercial & Industrial 3,490 3,629 6,303 4,650 9,816
Consumer 11 27 37 34 42
Total Non-Accrual Loans  $  80,133  $ 71,232  $ 76,348  $ 83,116  $ 105,024

Although we experienced an increase in non-accrual loans in the first quarter, inflow of new loans into non-accrual status declined by 37.5% from $40.3 million total inflows during the fourth quarter of 2010 to $25.2 million of inflow during the first quarter of 2011. Non-covered or legacy inflows into non-accrual status declined to $15.3 million at March 31, 2011 from $38.7 million at December 31, 2010, a decline of 60.4% on a quarterly basis. Of the $25.2 million in inflows into non-accrual status during the first quarter of 2011, 39.1%, or $9.9 million, were covered or acquired loans. 

Outflow of non-accrual loans decreased from $45.4 million during the fourth quarter of 2010 to $16.3 million during the first quarter of 2011. The decrease was a result of a decline in loan sales during the first quarter of 2011 compared to the previous quarter which reduced the total number and balance of outflows. Outflow of non-covered loans totaled $14.2 million for the quarter ending March 31, 2011, down from $43.2 million in total outflows for the previous quarter.

Impaired Loans            

Loans are classified as impaired when based on current information, it is probable that the Company will not be able to collect all principal and interest payments due in accordance with the terms of the loan. Impaired loans at March 31, 2011 totaled $176.4 million, compared with $118.5 million at December 31, 2010. Total impaired loans by loan category are shown in the table below: 

IMPAIRED LOANS (Dollars In Thousands)
(Net of SBA Guaranteed Portions) Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Construction  $  --  $ --  $ 2,660  $ --  $ --
Real Estate Secured 149,402 93,452 157,068 128,538 140,305
Commercial & Industrial 5,456 5,649 8,505 3,870 7,537
Consumer -- 27 37 -- --
Total Non-Covered Impaired Loans  $ 154,858  $ 99,128  $ 168,270  $ 132,408  $ 147,842
           
Covered Loans          
           
Real Estate Secured 18,256 15,120 18,837 20,036 36,849
Commercial & Industrial 3,332 4,216 5,479 1,801 3,078
Total Covered Impaired Loans  $ 21,588  $ 19,336  $ 24,316  $  21,837  $  39,927
           
Total Impaired Loans          
           
Construction  $ --  $  --  $ 2,660  $ --  $ --
Real Estate Secured 167,658 108,572 175,905 148,574 177,154
Commercial & Industrial 8,788 9,865 13,984 5,671 10,615
Consumer -- 27 37 -- --
Total Impaired Loans  $ 176,446  $ 118,464  $ 192,586  $   154,245  $ 187,769

The increase in impaired loans during the first quarter of 2011 is largely attributable to the transfer of loans to held-for-sale status given that the loans are expected to be sold at a discount to book value and therefore are deemed to be impaired and are reclassified accordingly. Approximately $69.6 million in loans that are currently in held-for-sale status were not impaired at December 31, 2010.  

Loan Delinquencies

At March 31, 2011, total loan delinquencies increased to $41.2 million from $34.5 million at December 31, 2010. As a percentage of gross loans, delinquencies increased to 1.80% at March 31, 2011, from 1.48% at December 31, 2010. A significant driver of the increase in total delinquent loans for the first quarter of 2011 was the inflow of one construction loan with a balance of $15.0 million. This single loan accounted for 36.4% of all delinquent loans at March 31, 2011.

Delinquent loans by days past due and loan type are reflected in the two tables below:  

DELINQUENT  LOANS -- By Days Past Due (Dollars In Thousands)
(Net of SBA Guaranteed Portions) Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
30 - 59 Days Past Due  $ 8,680  $ 15,641  $ 13,582  $ 17,146  $ 17,266
60 - 89 Days Past Due 26,389 11,007 18,126 14,844 5,290
90 Days, and still accruing -- -- 304 1 --
Total Non-Covered Delinquent Loans  $ 35,069  $ 26,648  $ 32,012  $ 31,991  $ 22,556
           
Covered Loans          
           
30 - 59 Days Past Due  $ 5,166  $ 4,254  $ 1,754  $ 4,108  $ 3,318
60 - 89 Days Past Due 968 3,566 1,053 910 4,640
90 Days, and still accruing -- -- -- -- --
Total Covered Delinquent Loans  $ 6,134  $ 7,820  $ 2,807  $ 5,018  $ 7,958
           
Total Delinquent Loans          
           
30 - 59 Days Past Due  $ 13,846  $ 19,895  $ 15,336  $ 21,254  $ 20,584
60 - 89 Days Past Due 27,357 14,573 19,179 15,754 9,930
90 Days, and still accruing -- -- 304 1 --
Total Delinquent Loans  $ 41,203  $ 34,468  $ 34,819  $ 37,009  $ 30,514

Loan Charge-offs

Loan charge-offs for the first quarter of 2011 totaled $41.7 million, compared to $71.9 million in the fourth quarter of 2010. Approximately 94.1% of the charge-offs in the first quarter of 2011 were commercial real estate loans. Of the total charge-offs in the first quarter of 2011, $31.5 million or 75.6% were charge-offs that resulted from the transfer of loans to held-for-sale status, which are expected to be sold during the second quarter of 2011.

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

LOAN CHARGE-OFFS (Dollars In Thousands)
  Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Construction  $ 805  $ 401  $ --  $ 2,654  $ --
Real Estate Secured 39,062 60,317 27,215 25,015 4,360
Commercial & Industrial 1,151 10,487 4,741 4,241 1,290
Consumer 19 14 57 81 115
Total Non-Covered Charge-Offs Loans  $ 41,037  $ 71,219  $ 32,013  $ 31,991  $ 5,765
           
Covered Loans          
           
Real Estate Secured $ 171 $ 252 $ 1,331 $ 3,449 $ 13
Commercial & Industrial 489 431 1,475 1,569 50
Total Covered Charge-Offs Loans  $ 660  $ 683  $ 2,806  $ 5,018  $ 63
           
Total Charge-Offs Loans          
           
Construction  $ 805  $ 401  $ --  $ 2,654  $  --
Real Estate Secured 39,233 60,569 28,546 28,464 4,373
Commercial & Industrial 1,640 10,918 6,216 5,810 1,340
Consumer 19 14 57 81 115
Total Charge-Offs Loans  $ 41,697  $ 71,902  $ 34,819  $  37,009  $ 5,828

BALANCE SHEET

During the first quarter of 2011, the Company continued to reposition its balance sheet by utilizing cash and cash equivalents and loan sales 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 decreased to $2.79 billion at March 31, 2011, from $2.97 billion at December 31, 2010.

Total loans including loans held-for-sale totaled $2.28 billion at March 31, 2011, compared to $2.33 billion at December 31, 2010. The decrease was primarily due to charge-offs, loan payoffs in the commercial real estate portfolio, and sale of loans during the first quarter. Loan originations for the first quarter of 2011 were approximately $69 million (excluding SBA and residential mortgage loans), 73% of which were commercial real estate loans and 27% were commercial loans. This compares to total loan originations (excluding SBA and residential mortgage loans) of $112.4 million during the fourth quarter of 2010 and $61.8 million during the first quarter of 2010.

Loan Categories

GROSS LOANS BY TYPE (Dollars In Thousands)
  Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Construction  $ 74,538  $ 72,258  $ 70,808  $ 59,376  $ 47,564
Real Estate Secured 1,725,298 1,757,329 1,832,726 1,830,387 1,795,142
Commercial & Industrial 274,392 276,739 308,277 316,370 313,872
Consumer 14,587 15,574 16,937 18,265 16,113
Total Non-Covered Gross Loans  $ 2,088,815  $ 2,121,899  $ 2,228,748  $ 2,224,398  $ 2,172,691
           
Covered Loans          
           
Real Estate Secured  $ 154,655 $ 159,698 $ 166,490 $ 179,124 $ 188,353
Commercial & Industrial 45,024 49,680 53,613 56,357 61,527
Consumer 104 111 125 150 191
Total Covered Gross Loans  $ 199,783  $ 209,490  $ 220,228  $ 235,631  $ 250,071
           
Total Gross Loans          
           
Construction  $ 74,538  $ 72,258  $ 70,808  $ 59,376  $ 47,564
Real Estate Secured 1,879,953 1,917,027 1,999,216 2,009,511 1,983,495
Commercial & Industrial 319,416 326,419 361,890 372,727 375,399
Consumer 14,691 15,685 17,062 18,415 16,304
Total Gross Loans  $ 2,288,598  $ 2,331,389  $ 2,448,976  $  2,460,029  $ 2,422,762

Total deposits were $2.27 billion at March 31, 2011, down from $2.46 billion at December 31, 2010. The decline was experienced in all interest-bearing deposit categories. This decline was partially offset by a 4% increase in non-interest bearing deposits as a result of management's continued focus to attract demand deposits accounts.

Total other real estate owned (OREOs) was $8.5 million at March 31, 2011, down from $15.0 million at December 31, 2010.  Outflow from OREO in the first quarter of 2011 consisted of 21 sold properties totaling $12.8 million. Inflows to OREO in the first quarter of 2011 consisted of 8 properties totaling $6.3 million.

Capital Ratios

The Company's capital ratios continued to be in excess of "well capitalized" regulatory requirements as shown in the following table:  

(Dollars In thousands, except per share info) March 31, 2011 Well Capitalized

Regulatory

Requirements
Total Excess

Above Well

Capitalized

Requirements
       
Tier 1 Leverage Capital Ratio 7.64% 5.00% $76,948
Tier 1 Risk-Based Capital Ratio 10.30% 6.00% 92,891
Total Risk-Based Capital Ratio 12.57% 10.00% 55,473
Tangible Common Equity To Tangible Assets 3.92% N/A N/A
Tangible Common Equity Per Common Share  $ 3.70 N/A N/A

The Company has developed a plan to strengthen all of its capital ratios which it expects to implement in the very near future.

STATEMENT OF OPERATIONS

Net interest Income and Margin

Net interest income before provision for loan losses totaled $29.3 million in the first quarter of 2011, an increase of 11.5% from $26.3 million in the fourth quarter of 2010, and an increase of 2.6% from $28.6 million in the first quarter of 2010. The increase in net interest income on a linked quarter basis was attributable to both an increase in interest income and a decline in interest expense. Compared to the same quarter of previous year, interest income declined 13.7% from $41.3 million to $35.6 million. The decline in interest income from the first quarter of 2010 is attributable to the reduction in average earning assets.

Interest expense declined to $6.3 million for the first quarter of 2011, a 20.4% reduction from $8.0 million in the fourth quarter of 2010 and a 50.3% decline from $12.7 million in the first quarter of 2010. The decline in interest expense reflects the improvement in the deposit mix, reduction in the cost of funds, and a reduction in deposits over the past year. Interest expense on deposits decreased to $5.1 million, a 24.4% and 54.3% reduction compared to the fourth quarter of 2010 and the first quarter of 2010, respectively.

Net interest margin was 4.53% in the first quarter of 2011, compared to 3.72% in the fourth quarter of 2010 and 3.65% in the first quarter of 2010. The increase in net interest margin from the previous quarter is attributable to a decline in funding costs and a lower level of interest reversals on non-accrual loans. On a year-over-year basis, net interest margin increased due to the continued decline in the cost of funds. Cost of funds declined to 0.88% in the first quarter of 2011 from 1.04% in the fourth quarter of 2010 and 1.55% in the first quarter of 2010.

Non-Interest Income

Non-interest income was $8.7 million in the first quarter of 2011, compared to $6.1 million for the previous quarter and $7.3 million for the first quarter of 2010. The increase from both the prior quarter and the prior year was attributable to an increase in gain on sale of loans. A portion of the increase in gain on sale of loans during the first quarter of 2011 was attributable to a change in the treatment of SBA loan sale transactions. During the first quarter of 2011, the Company originated $48.5 million in SBA loans, compared to SBA loan originations of $47.7 million in the fourth quarter of 2010.

Non-Interest Expense

Total non-interest expense was $17.5 million in the first quarter of 2011, compared with $19.7 million in the prior quarter and $14.2 million for the first quarter of 2010. During the first quarter of 2011, the Company incurred approximately $450,000 in severance expense related to the elimination of 20 positions, as part of a restructuring initiative to enhance efficiencies. The staff reduction and other expense reduction measures are expected to result in annual savings of $2.6 million. 

The decrease in non-interest expense compared to the prior quarter was primarily attributable to a reduction in OREO-related expenses and expense related to low income housing tax credit investments. The increase in non-interest expense from the first quarter of 2010 was primarily attributable to an increase in salaries and benefits expense due to severance payments and OREO-related expenses. 

Deferred Tax Asset & Effective Tax Rate

During the first quarter of 2011, the Company reviewed its deferred tax asset. Due to a decline in income for the past two quarters, the Company's cumulative three-year historical income was reduced to where a valuation allowance on the deferred tax assets was required in the first quarter of 2011. As a result, the Company recorded net tax expense of $38.1 million to reflect the creation of a valuation allowance on its deferred tax asset. Based on its current business plan, management believes that its future level of profitability will exceed projections utilized for the purpose of evaluating the deferred tax asset.

The effective tax benefit rate excluding the tax expense of $38.1 million that resulted from the deferred tax valuation allowance, for the first quarter of 2011 was 46.2%, compared to 44.5% for the fourth quarter of 2010. The effective tax rate for the first quarter of 2010 was 28.8%. The tax benefits relating to municipal investments, low income housing tax credits, and other state sponsored tax credit programs reduced the effective tax rates during the first quarter of 2010, while the same permanent differences have increased the tax benefit rates during the first quarter of 2011 and fourth quarter of 2010.

CONFERENCE CALL

Management will host its quarterly conference call on April 26, 2011, at 11:00 a.m. PT (2:00 p.m. ET). Investment professionals are invited to participate in the call by dialing 866-804-6929 (domestic number) or857-350-1675 (international number) and entering passcode 28610857.

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) March 31, December 31, Three Month March 31, One Year
  2011 2010 Change 2010 Change
ASSETS:          
Cash and Due from Banks $68,827 $68,530 0% $214,970 -68%
Federal Funds Sold and Other Cash Equivalents 5 130,005 -100% 30,018 -100%
Total Cash and Cash Equivalents 68,832 198,535 -65% 244,988 -72%
           
Investment Securities Available For Sale 340,812 316,623 8% 687,716 -50%
Investment Securities Held To Maturity 80 85 -6% 105 -24%
Total Investment Securities 340,892 316,708 8% 687,821 -50%
           
Loans:          
           
Loans Held For Sale 136,769 17,098 700% 43,501 214%
           
Real Estate Construction 73,879 71,596 3% 47,364 56%
Residential Real Estate 91,842 92,901 -1% 92,874 -1%
Commercial Real Estate 1,656,495 1,804,731 -8% 1,845,374 -10%
Commercial and Industrial 310,225 324,627 -4% 372,407 -17%
Consumer 14,675 15,671 -6% 16,304 -10%
Total Loans 2,147,116 2,309,526 -7% 2,374,323 -10%
Allowance For Loan Losses (114,842) (110,953) 4% (79,576) 44%
Loans, Net of Allowance for Loan Losses 2,032,274 2,198,573 -8% 2,294,747 -11%
           
Accrued Interest Receivable 9,829 10,581 -7% 15,214 -35%
Due from Customers on Acceptances 169 368 -54% 1,006 -83%
Other Real Estate Owned 8,512 14,983 -43% 4,860 75%
Premises and Equipment 13,555 13,330 2% 13,602 0%
Federal Home Loan Bank (FHLB) Stock, at Cost 17,796 18,531 -4% 21,040 -15%
Cash Surrender Value of Life Insurance 18,812 18,663 1% 18,197 3%
Investment in affordable housing partnerships 34,781 28,186 23% 25,102 39%
Deferred Income Taxes 19,112 46,357 -59% 20,198 -5%
Servicing Assets 7,664 7,331 5% 6,715 14%
Goodwill 6,675 6,675 0% 6,675 0%
FDIC Indemnification 26,673 28,525 -6% 33,329 -20%
Other Assets 46,756 46,081 1% 22,292 110%
TOTAL ASSETS $2,789,101 $2,970,525 -6% $3,459,287 -19%
           
LIABILITIES AND STOCKHOLDERS' EQUITY:          
LIABILITIES:          
Non-interest Bearing Demand Deposits $484,402 $467,067 4% $414,023 17%
Savings and Interest Checking 109,399 106,115 3% 97,170 13%
Money Market Deposits 622,078 669,486 -7% 979,454 -36%
Time Deposits in denomination of $100,000 or more 670,686 699,503 -4% 746,866 -10%
Other Time Deposits 383,462 518,769 -26% 687,532 -44%
Total Deposits 2,270,027 2,460,940 -8% 2,925,045 -22%
           
FHLB borrowings and Federal Funds Purchased 215,000 158,011 36% 142,487 51%
Acceptance Outstanding 169 368 -54% 1,006 -83%
Junior Subordinated Debentures 87,321 87,321 0% 87,321 0%
Accrued Interest Payable 4,049 4,092 -1% 5,954 -32%
Other Liabilities  34,783 30,631 14% 26,779 30%
Total Liabilities 2,611,349 2,741,363 -5% 3,188,592 -18%
           
STOCKHOLDERS' EQUITY:          
Preferred Stock 60,584 60,450 0% 60,058 1%
Common Stock 55,655 55,601 0% 55,118 1%
Retained Earnings 58,994 111,099 -47% 151,895 -61%
Accumulated Other Comprehensive Income 2,519 2,012 25% 3,624 -30%
Total Stockholders' Equity 177,752 229,162 -22% 270,695 -34%
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,789,101 $2,970,525 -6% $3,459,287 -19%
 
 
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data) (unaudited)
  Quarter Ended    Quarter Ended  
  March 31, December 31, Three Month March 31, One Year
  2011 2010 % Change 2010 % Change
           
INTEREST INCOME          
Interest and Fees on Loans $33,462 $32,193 4% $35,304 -5%
Interest on Investment Securities 1,983 1,551 28% 5,615 -65%
Interest on Federal Funds Sold 179 476 -62% 382 -53%
Total Interest Income 35,624 34,220 4% 41,301 -14%
           
INTEREST EXPENSE          
Deposits 5,110 6,758 -24% 11,174 -54%
FHLB Advances and Other Borrowings 1,219 1,194 2% 1,569 -22%
Total Interest Expense 6,329 7,952 -20% 12,743 -50%
           
Net Interest Income Before Provision for Losses on Loans and Loan Commitments 29,295 26,268 12% 28,558 3%
Provision for Losses on Loans and Loan Commitments 44,800 83,600 -46% 17,000 164%
Net Interest (Loss) Income After Provision for Losses on Loans and Loan Commitments (15,505) (57,332) -73% 11,558 -234%
           
NONINTEREST INCOME          
Service Charges on Deposits 3,080 3,034 2% 3,224 -4%
Gain on Sales of Loans 3,592 2,059 74% 36 9878%
Gain on Sale of Investment Securities 36 40 -10% 2,484 -99%
Other 1,968 972 102% 1,556 26%
Total Noninterest Income 8,676 6,105 42% 7,300 19%
           
NONINTEREST EXPENSES          
Salaries and Employee Benefits 7,817 7,217 8% 7,115 10%
Occupancy & Equipment 1,980 1,936 2% 2,181 -9%
Data Processing 712 692 3% 637 12%
Other 6,967 9,838 -29% 4,272 63%
Total Noninterest Expenses 17,476 19,683 -11% 14,205 23%
           
(Loss) Income Before Income Taxes (24,305) (70,910) -66% 4,653 -622%
Income Taxes Provision (Benefit) 26,888 (31,521) -185% 1,338 1910%
NET (LOSS) INCOME $ (51,193) $ (39,389) 30% $ 3,315 -1644%
           
Preferred Stock Cash Dividend and Accretion of Preferred Stock Discount 912 910 0% 903 1%
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $(52,105) $(40,299) 29% $2,412 -2260%
           
PER COMMON SHARE INFORMATION          
Basic (Loss) Earnings Per Common Share $(1.77) $(1.37) 29% $0.08 -2261%
Diluted (Loss) Earnings Per Common Share $(1.77) $(1.37) 29% $0.08 -2261%
           
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:          
Basic 29,476,288 29,486,635   29,484,006  
Diluted 29,476,288 29,486,635   29,484,006  
 
 
SUMMARY OF FINANCIAL DATA
(dollars in thousands, except per share data) (unaudited)
 
  Quarter Ended  
AVERAGE BALANCES March 31, 2011   December 31,  2010   March 31, 2010  
             
Average Assets $ 2,921,915   $ 3,135,483   $ 3,417,633  
Average Equity 231,622   272,003   273,293  
Average Net Loans 2,218,079   2,332,929   2,359,522  
Average Deposits 2,314,733   2,594,300   2,886,514  
Average Time Deposits in denomination of $100,000 or more 670,542   717,362   768,882  
Average Interest Earning Assets 2,610,600   2,846,537   3,155,853  
             
  Quarter Ended  
PROFITABILITY March 31, 2011   December 31, 2010   March 31, 2010  
             
Annualized Return on Average Assets -7.01%   -5.02%   0.39%  
Annualized Return on Average Equity -88.41%   -57.92%   4.85%  
Efficiency Ratio 46.02%   60.80%   39.61%  
Annualized Operating Expense/Average Assets 2.39%   2.51%   1.66%  
Annualized Net Interest Margin 4.53%   3.72%   3.65%  
             
  As Of
DEPOSIT COMPOSITION

March 31, 2011
Cost of

Funds


December 31, 2010
Cost of

Funds


March 31, 2010
Cost of

Funds
             
Noninterest Bearing Demand Deposits 21.3% 0.00% 19.0% 0.00% 14.2% 0.00%
Savings & Interest Checking 4.8% 2.26% 4.3% 2.34% 3.3% 2.55%
Money Market Deposits 27.4% 0.87% 27.2% 0.91% 33.5% 1.68%
Time Deposits of $100,000 or More 29.5% 1.01% 28.4% 1.17% 25.5% 1.58%
Other Time Deposits 16.9% 1.30% 21.1% 1.66% 23.5% 2.07%
Total Deposits 100.0% 0.88% 100.0% 1.04% 100.0% 1.55%
             
  As Of
CAPITAL RATIOS March 31, 2011   December 31, 2010   March 31, 2010  
             
Tier 1 Leverage Ratio 7.64%   9.18%   9.78%  
Tier 1 Risk-Based Capital Ratio 10.30%   12.61%   14.38%  
Total Risk-Based Capital Ratio 12.57%   14.00%   15.83%  
Total Shareholders' Equity $177,752   $229,162   $270,695  
Book Value Per Common Share $3.98   $5.72   $7.16  
Tangible Common Equity Per Common Share * $3.70   $5.44   $6.87  
Tangible Common Equity to Tangible Assets ** 3.92%   5.41%   5.86%  
 
* 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:  
   
  March 31, 2011 December 31, 2010 March 31, 2010
       
Total stockholders' equity $177,752 $229,162 $270,695
Preferred stock, net of discount (60,584) (60,450) (60,058)
Goodwill and other intangible assets, net (8,239) (8,320) (8,596)
Tangible common equity $108,929 $160,392 $202,041
       
Total assets $2,789,101 $2,970,525 $3,459,287
Goodwill and other intangible assets, net (8,239) (8,320) (8,596)
Tangible assets $2,780,862 $2,962,205 $3,450,691
       
Common shares outstanding 29,471,714 29,477,778 29,485,637
       
 
ALLOWANCE FOR LOAN LOSSES  
(dollars in thousands) (unaudited) Quarter Ended
  March 31, 2011 December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010
           
Balance at Beginning of Period $ 110,953 $ 99,020 $ 91,419 $ 79,576 $ 62,130
Provision for Losses on Loans 44,800 82,600 17,999 31,269 16,930
FDIC Indemnification -- -- 2,953 (3,140) 5,831
Recoveries on loans previously charged-off 786 1,235 991 872 512
Less Charge-offs (41,697) (71,902) (14,342) (17,158) (5,827)
Balance at End of Period $ 114,842 $ 110,953 $ 99,020 $ 91,419 $ 79,576
           
Net Loan Charge-offs/Average Total Loans 1.84% 3.03% 0.56% 0.67% 0.22%
Charge-offs/Average Total Loans 1.88% 3.08% 0.60% 0.70% 0.24%
Allowance for Loan Losses/Gross Loans 5.02% 4.76% 4.04% 3.72% 3.29%
Allowance for Loan Losses/Legacy Wilshire Loans 5.50% 5.23% 4.44% 4.11% 3.66%
Allowance for Loan Losses/Non-accrual Loans 143.31% 155.76% 129.70% 109.99% 75.77%
Allowance for Loan Losses/Legacy Non-accrual Loans 185.02% 182.24% 157.80% 142.21% 95.74%
Allowance for Loan Losses/Non-performing Loans 143.31% 155.76% 129.18% 109.99% 75.77%
Allowance for Loan Losses/Legacy Non-performing Loans 185.02% 182.24% 157.04% 142.21% 95.74%
Allowance for Loan Losses/Non-performing Assets 129.55% 128.69% 106.88% 101.97% 72.42%
Allowance for Loan Losses/Legacy Non-performing Assets 164.68% 151.35% 136.44% 133.20% 92.26%
           
           
NON-PERFORMING ASSETS          
(net of SBA guaranteed portions) As Of
  March 31, 2011 December 31, 2010 September 30, 2010 June 30, 2010 March 31, 2010
Nonaccrual Loans:          
Non-covered Loans $62,069 $60,882 $62,749 $64,285 $83,115
Covered Loans 18,064 10,350 13,599 18,831 21,909
Total 80,133 71,232 76,348 83,116 105,024
           
Loans 90 days or more past due and still accruing:          
Non-covered Loans -- -- 304 1 --
Covered Loans -- -- -- -- --
Total -- -- 304 1 --
           
Total Nonperforming Loans:          
Non-covered Loans 62,069 60,882 63,053 64,286 83,115
Covered Loans 18,064 10,350 13,599 18,831 21,909
Total 80,133 71,232 76,652 83,117 105,024
           
OREO and Repossessed Vehicles:          
Non-covered Loans 7,668 12,429 9,519 4,346 3,136
Covered Loans 844 2,554 6,477 2,194 1,723
Total 8,512 14,983 15,996 6,540 4,859
           
Total Nonperforming Assets:          
Non-covered Loans 69,737 73,311 72,572 68,632 86,251
Covered Loans 18,908 12,904 20,076 21,025 23,632
Total $88,645 $86,215 $92,648 $89,657 $109,883
           
Total Nonperforming Loans/Gross Loans 3.50% 3.06% 3.13% 3.38% 4.34%
Total Legacy Nonperforming Loans/Legacy Gross Loans 2.97% 2.87% 2.83% 2.89% 3.83%
           
Total Nonperforming Assets/Total Assets 3.18% 2.90% 2.87% 2.61% 3.18%
Total Legacy Nonperforming Assets/Total Assets 2.50% 2.47% 2.24% 2.00% 2.49%
 
 
PERFORMING TROUBLED DEBT RESTRUCTURED LOANS (Dollars In Thousands)(unaudited)
(net of SBA guaranteed portions)
 
  Quarter Ended
Non-Covered Loans Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Construction  $ --  $ --  $ --  $ 2,654  $ --
Real Estate Secured 31,540 36,187 27,215 25,015 46,024
Commercial & Industrial 4,117 3,574 4,741 4,241 474
Consumer -- -- 57 81 --
Total Non-Covered TDR Loans  $ 35,657  $ 39,761  $ 32,013  $ 31,991  $ 46,498
           
Covered Loans          
           
Real Estate Secured $ 7,676 $ 7,115 $ 1,331 $ 3,449 $ 8,135
Commercial & Industrial 1,844 1,870 1,475 1,569 --
Total Covered TDR Loans  $ 9,520  $ 8,985  $ 2,806  $ 5,018  $ 8,135
           
Total Performing TDRs Loans          
           
Construction  $ --  $ --  $ --  $ 2,654  $ --
Real Estate Secured 39,216 43,302 28,546 28,464 54,159
Commercial & Industrial 5,961 5,444 6,216 5,810 474
Consumer -- -- 57 81 --
Total Performing TDR Loans  $ 45,177  $ 48,746  $ 34,819  $ 37,009  $ 54,633
           
           
LOAN ORIGINATION AMOUNT Quarter Ended
(Dollars In Thousands) Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 Mar 31, 2010
           
Total new loan origination amount, excluding renewal. $ 120,037 $ 169,051 $ 112,911 $ 186,121 $ 87,288
SBA new loan origination amount, excluding renewal. $ 48,459 $ 47,735 $ 17,613 $ 32,630 $ 23,471
           
           
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS Quarter Ended
(Dollars In Thousands) Mar 31, 2011 Mar 31, 2010
     
Balance at beginning of period $ 3,926 $ 2,515
Provision for losses on off-balance sheet items -- 70
Balance at end of period $ 3,926 $ 2,585
 
 
WILSHIRE BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(dollars in thousands) (unaudited)
 
  For the Quarter Ended
   March 31, 2011 December 31, 2010 March 31, 2010
       
  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 $1,995,191 $27,656 5.54% $2,072,543 $26,919 5.20% $2,030,514 $29,053 5.72%
Commercial Loans 327,887 4,592 5.60% 346,987 4,435 5.11% 382,589 5,308 5.55%
Consumer Loans 15,157 121 3.18% 16,084 138 3.43% 16,474 180 4.38%
Total Gross Loans 2,338,235 32,369 5.54% 2,435,614 31,492 5.17% 2,429,577 34,541 5.69%
                   
Loan Fees toward Yield   1,093     701     763  
Allowance for Loan Losses & Unearned Income (120,156)     (102,693)     (70,055)    
Net Loans 2,218,079 33,462 6.03% 2,332,921 32,193 5.52% 2,359,522 35,304 5.98%
                   
INVESTMENT SECURITIES AND                  
OTHER INTEREST-EARNING ASSETS:                  
Investment Securities* 334,694 1,983 2.66% 353,983 1,551 2.02% 665,366 5,615 3.52%
Federal Funds Sold 57,827 179 1.24% 159,633 476 1.19% 130,965 382 1.17%
Total Investment Securities and                  
Other Earning Assets 392,521 2,162 2.45% 513,616 2,027 1.76% 796,331 5,997 3.13%
                   
TOTAL INTEREST-EARNING ASSETS $2,610,600 $35,624 5.49% $2,846,537 $34,220 4.84% $3,155,853 $41,301 5.27%
                   
INTEREST BEARING LIABILITIES                  
                   
INTEREST-BEARING DEPOSITS:                  
Money Market $644,249 $1,408 0.87% $738,538 $1,684 0.91% $956,035 $4,023 1.68%
NOW 24,738 23 0.38% 22,217 19 0.34% 22,481 29 0.52%
Savings 85,287 598 2.81% 81,267 587 2.89% 74,052 586 3.17%
Time Deposits of $100,000 or More 670,542 1,687 1.01% 717,362 2,106 1.17% 768,882 3,047 1.58%
Other Time Deposits 428,815 1,394 1.30% 569,725 2,362 1.66% 675,764 3,489 2.07%
Total Interest Bearing Deposits 1,853,631 5,110 1.10% 2,129,109 6,758 1.27% 2,497,214 11,174 1.79%
                   
BORROWINGS:                  
FHLB Advances and Other Borrowings 250,964 730 1.16% 144,145 697 1.93% 148,000 920 2.49%
Junior Subordinated Debentures 87,321 489 2.24% 87,321 497 2.28% 87,321 649 2.97%
Total Borrowings 338,285 1,219 1.44% 231,466 1,194 2.06% 235,321 1,569 2.67%
                   
TOTAL INTEREST BEARING LIABILITIES $2,191,916 $6,329 1.15% $2,360,575 $7,952 1.35% $2,732,535 $12,743 1.87%
                   
NET INTEREST INCOME   $29,295     $26,268     $28,558  
                   
NET INTEREST SPREAD     4.34%     3.49%     3.40%
                   
NET INTEREST MARGIN     4.53%     3.72%     3.65%
 
* Tax equivalent ratios for investment securities 
CONTACT: WILSHIRE BANCORP, INC.
         Alex Ko, EVP & CFO
         (213) 427-6560
         www.wilshirebank.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

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