Exhibit 99.1
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WILSHIRE BANCORP, INC. | |
CONTACT: | |
Joanne Kim, President & CEO, (213) 639-1843 | NEWS RELEASE |
Alex Ko, SVP & CFO, (213) 427-6560 | |
www.wilshirebank.com | |
Wilshire Bancorp Reports Third Quarter Results:
Net Interest Margin Increased by 51 Basis Points, Delinquent Loans Decreased, Allowance for Loan
Losses Strengthened and Net Loss of $1.7 Million Recorded
LOS ANGELES, CA – October 27, 2009 – Wilshire Bancorp, Inc. (NASDAQ: WIBC), the holding company for Wilshire State Bank, today reported a net loss available to common shareholders of $1.7 million, or $0.06 loss per diluted common share.
The net loss was primarily attributed to $24.2 million provision for loan losses for the third quarter of 2009, an increase of $20.8 million from the same period in 2008. The increase in provision for loan losses was a proactive measure to address economic indicators of potential commercial real estate (CRE) credit risk exposures and uncertainty. A comprehensive review of CRE collateral value was completed during the third quarter. In addition, CRE credit exposure analysis and stress tests were performed on our CRE loan portfolio. Taking into consideration the results of the CRE testing and analysis, we believe we have set aside a sufficient amount of reserves.
“We ended the third quarter on a positive note and managed to strengthen allowance for loan losses,” said Ms. Joanne Kim, President and CEO. “Even in this challenging economic environment we achieved substantial expansion in net interest margin, experienced strong growth in core deposits, made meaningful improvements to our liquidity position, and we successfully completed the integration of all aspects of the Mirae Bank acquisition.
During the third quarter we had a sharp decrease in loan delinquencies. The Bank has proactively taken steps to address deterioration in credit quality, especially in our CRE loan portfolio. We aggressively reserved what we believe to be a sufficient amount in loan provisions for future expected losses. We are in a position where we can resolve our credit issues and continue to increase our profitability while managing prudent growth.
THIRD QUARTER 2009 HIGHLIGHTS:
· Net Interest Margin Expansion - Net interest margin expanded by 51 basis points to 3.87%, compared to 3.36% in 2Q ‘09 and 3.87% in 3Q ‘08. Total interest income increased by 28% and net interest income increased 40% compared to 2Q ‘09.
· Strengthened Allowance For Loan Losses - Provision for loan losses increased to $24.2 million, from $12.1 million in 2Q ‘09 and $3.4 million in 3Q ‘08. Allowance for loan losses as percentage is 2.24% of total gross loans and 2.52% of legacy Wilshire gross loans.
· Completion Of Comprehensive CRE Credit Risk Analysis - Underlying CRE collateral values were updated and reflected in CRE impairment analysis. CRE stress test analysis was completed. CRE delinquent loans decreased from the previous quarter.
· Strong Core Deposits Growth - Core deposits increased to $1.73 billion, a 43% increase from 2Q ‘09 and an 81% increase from 3Q ‘08.
· Strong Capital Position - Total risk-based capital ratio increased to 15.8%, compared to 14.8% at 2Q ‘09 and 14.0% at 3Q ‘08. Tangible common equity per common share increased to $6.93, compared to $6.81 at 2Q ‘09 and $6.12 at 3Q ‘08.
· Completion of Successful Integration Of Former Mirae Bank – The efficiency ratio was lowered to 40% with substantial cost savings, more than 95% of Mirae Bank deposits were retained, and the closure of 4 out of 5 branches acquired was completed.
CREDIT QUALITY
During the third quarter, we accelerated the resolution of problem loans. As a result, allowance for loan losses increased to $54.7 million, or 2.24% of gross loans. This compares to $38.8 million or 1.62% of gross loans at June 30, 2009, and $26.0 million or 1.28% of gross loans at September 30, 2008. Provision for loan losses increased to $24.2 million, compared to $12.1 million in the second quarter of 2009 and $3.4 million in the third quarter of 2008. Upon acquiring former Mirae Bank, we entered into a loss share agreement with the FDIC where the FDIC will share in losses on assets covered under the agreement, which include loans acquired from Mirae and foreclosed loan collateral existing at June 26, 2009. Henceforth, loans acquired through the acquisition of Mirae Bank are identified as “covered” loan, and those that were originated at Wilshire are “non-covered” loan or “Legacy Wilshire” loans. The following is a table of “covered” and “non-covered” loans as of quarter ended June and September 2009:
By Loan Category (dollars in thousands)
| | Quarter Ended | |
| | Sep 30, 2009 | | Jun 30, 2009 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | |
| | | | | | | | | | | | | |
Construction | | $ | 494 | | $ | 44,586 | | $ | 45,080 | | $ | 494 | | $ | 40,023 | | $ | 40,517 | |
Real Estate Secured | | 206,770 | | 1,766,428 | | 1,973,198 | | 205,138 | | 1,692,392 | | 1,897,530 | |
Commercial & Industrial | | 66,829 | | 348,910 | | 415,739 | | 79,194 | | 369,592 | | 448,786 | |
Consumer | | 627 | | 15,984 | | 16,611 | | 948 | | 17,542 | | 18,490 | |
TOTAL GROSS LOANS | | $ | 274,720 | | $ | 2,175,908 | | $ | 2,450,628 | | $ | 285,774 | | $ | 2,119,549 | | $ | 2,405,323 | |
Loan Delinquency
During the third quarter of 2009, total loan delinquencies decreased by 62% or $44.9 million to $27.6 million compared to the second quarter of 2009 as reflected in the tables below:
DELINQUENT LOANS
By Days Past Due (dollars in thousands)
| | Quarter Ended | |
| | Sep 30, 2009 | | Jun 30, 2009 | | Mar 31, 2009 | | Dec 31, 2008 | | Sep 30, 2008 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | | TOTAL LOANS | |
30 - 59 Days Past Due | | $ | 6,340 | | $ | 7,602 | | $ | 13,942 | | $ | 6,782 | | $ | 28,577 | | $ | 35,359 | | $ | 12,756 | | $ | 8,769 | | $ | 8,584 | |
60 - 89 Days Past Due | | 1,513 | | 11,342 | | 12,855 | | 6,961 | | 30,040 | | 37,001 | | 3,387 | | 2,851 | | 2,868 | |
90 Days, and Still Accruing | | 772 | | — | | 772 | | — | | 128 | | 128 | | 475 | | 213 | | 496 | |
TOTAL DELINQUENCIES | | $ | 8,625 | | $ | 18,944 | | $ | 27,569 | | $ | 13,743 | | $ | 58,745 | | $ | 72,488 | | $ | 16,618 | | $ | 11,833 | | $ | 11,948 | |
By Loan Category (dollars in thousands)
| | Quarter Ended | |
| | Sep 30, 2009 | | Jun 30, 2009 | | Mar 31, 2009 | | Dec 31, 2008 | | Sep 30, 2008 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | | TOTAL LOANS | |
| | | | | | | | | | | | | | | | | | | |
Construction | | $ | — | | $ | — | | $ | — | | $ | 494 | | $ | — | | $ | 494 | | $ | — | | $ | — | | $ | — | |
Real Estate Secured | | 6,267 | | 15,328 | | 21,595 | | 10,576 | | 49,675 | | 60,251 | | 14,336 | | 8,989 | | 9,452 | |
Commercial & Industrial | | 2,358 | | 3,426 | | 5,784 | | 2,673 | | 8,862 | | 11,535 | | 2,032 | | 2,514 | | 2,205 | |
Consumer | | — | | 190 | | 190 | | — | | 208 | | 208 | | 250 | | 330 | | 291 | |
TOTAL DELINQUENCIES | | $ | 8,625 | | $ | 18,944 | | $ | 27,569 | | $ | 13,743 | | $ | 58,745 | | $ | 72,488 | | $ | 16,618 | | $ | 11,833 | | $ | 11,948 | |
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Non-covered loan delinquencies for 30-59 days past due decreased by $21.0 million and 60-89 day delinquencies decreased by $18.7 million in September 2009 compared to June of the same year. The majority of the decreased delinquencies resulted from a decrease in non-covered real estate secured loans of $34.3 million. All categories of delinquencies by loan types experienced decreases in the third quarter led by a decrease of $38.7 million or 64%, in real estate secured loans. Although about $17.3 million in non-covered delinquent loans in the second quarter were classified as non-accrual in the third quarter, $22.5 million in decreases in delinquencies were mainly due to the payoff and resolution of these loans. We recorded the highest number of delinquencies in the second quarter of 2009 and are now experiencing a downward delinquency trend in all loan types.
Non-accrual Loans
(dollars in thousands)
| | Quarter Ended | |
| | Sep 30, 2009 | | Jun 30, 2009 | | Mar 31, 2009 | | Dec 31, 2008 | | Sep 30, 2008 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | | TOTAL LOANS | |
| | | | | | | | | | | | | | | | | | | |
Construction | | $ | 494 | | $ | — | | $ | 494 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Real Estate Secured | | 21,002 | | 44,469 | | 65,471 | | 11,394 | | 32,153 | | 43,547 | | 23,185 | | 9,334 | | 9,506 | |
Commercial & Industrial | | 3,511 | | 7,868 | | 11,379 | | 2,896 | | 2,789 | | 5,685 | | 5,774 | | 5,874 | | 3,593 | |
Consumer | | — | | 49 | | 49 | | — | | 90 | | 90 | | 307 | | 131 | | 134 | |
TOTAL NON-ACCRUAL LOANS | | $ | 25,007 | | $ | 52,386 | | $ | 77,393 | | $ | 14,290 | | $ | 35,032 | | $ | 49,322 | | $ | 29,266 | | $ | 15,339 | | $ | 13,233 | |
Compared to the second quarter of 2009, total non-accrual loans increased by $28.1 million to $77.4 million or 3.16% of gross loans during the third quarter. The increase in non-covered non-accrual loans was due to a migration of loans that were delinquent as of the second quarter which were reclassified as non-accrual during the third quarter. However, the number of delinquent loans that potentially can migrate to non-accrual status is much smaller this quarter compared to the second quarter of 2009. Of the total non-accrual loans, covered loans represent $25.0 million or 32% of total non-accrual loans. All of these covered loans were acquired in the Mirae acquisition and are covered under the FDIC loss-share agreement of up to 80% of losses not exceeding $83 million and 95% for losses that exceed that amount.
Of the $52.6 million non-covered loans classified as non-accrual, $8.5 million in non-covered loans are expected to be resolved in the fourth quarter of 2009 through the sale of non-accrual notes and reclassification of loans from non-accrual status to performing.
Loan Charge-offs
(dollars in thousands)
| | Quarter Ended | |
| | Sep 30, 2009 | | Jun 30, 2009 | | Mar 31, 2009 | | Dec 31, 2008 | | Sep 30, 2008 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | | TOTAL LOANS | |
| | | | | | | | | | | | | | | | | | | |
Construction | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Real Estate Secured | | 148 | | 1,740 | | 1,888 | | — | | 176 | | 176 | | 672 | | 823 | | 204 | |
Commercial & Industrial | | 381 | | 5,753 | | 6,134 | | — | | 6,940 | | 6,940 | | 1,629 | | 1,688 | | 1,106 | |
Consumer | | — | | 191 | | 191 | | — | | 356 | | 356 | | 102 | | 96 | | 203 | |
TOTAL LOAN CHARGE-OFFS | | $ | 529 | | $ | 7,684 | | $ | 8,213 | | $ | — | | $ | 7,472 | | $ | 7,472 | | $ | 2,403 | | $ | 2,607 | | $ | 1,513 | |
Loan charge-offs for the quarter ended September 30, 2009 was $8.2 million, an increase of $741,000 compared to the second quarter of 2009. Commercial and industrial and consumer loans charge-offs decreased by $806,000 and $165,000, respectively, from June 30, 2009 to September 30, 2009. Real estate secured loan charge-offs increased from the second quarter by $1.7 million of which $844,000 was charged-off in connection with three loan sales.
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STRONG COMMERCIAL REAL ESTATE PORTFOLIO
CRE Loan Composition
Total CRE loans increased by $117 million or 7% to $1.88 billion from $1.76 billion at June 30, 2009 and $1.52 billion at December 31, 2008 as noted below:
(dollars in thousands)
| | | | | | | | | | 3 MTHS | | | | | | 9 MTHS | |
| | September 30, 2009 | | % | | June 30, 2009 | | % | | CHANGE | | December 31, 2008 | | % | | CHANGE | |
Multi-Family | | $ | 116,456 | | 6 | % | $ | 120,000 | | 7 | % | -3 | % | $ | 52,115 | | 3 | % | 123 | % |
Office / Mixed Use | | 264,536 | | 14 | % | 229,266 | | 13 | % | 15 | % | 271,073 | | 18 | % | -2 | % |
Retail | | 719,969 | | 38 | % | 703,129 | | 40 | % | 2 | % | 553,076 | | 36 | % | 30 | % |
Industrial / Warehouse | | 317,501 | | 17 | % | 277,044 | | 16 | % | 15 | % | 243,867 | | 16 | % | 30 | % |
Hotel / Motel | | 313,138 | | 17 | % | 311,341 | | 18 | % | 1 | % | 247,317 | | 16 | % | 27 | % |
Other | | 147,734 | | 8 | % | 121,689 | | 7 | % | 21 | % | 154,322 | | 10 | % | -4 | % |
Total CRE Loans | | $ | 1,879,334 | | 100 | % | $ | 1,762,469 | | 100 | % | 7 | % | $ | 1,521,770 | | 100 | % | 23 | % |
The increase in CRE loans is mainly due to organic growth and the acquisition of the former Mirae Bank loan portfolio. With the acquisition and organic growth of the CRE portfolio, CRE loan concentration remained high at September 30, 2009. However, CRE credit risk exposure on purchased loans is limited to only 20% of credit losses with the FDIC loss sharing protection.
CRE Loan Delinquency
Total delinquent CRE loans remained at a low level at $19 million or 0.77% of total loans. The non-accrual balance for CRE loans was $60 million or 2.44% of total loans as noted below:
(dollars in thousands)
| | 30-59 days
past due | | 60-89 days
past due | | Total
Delinquent
Loan | | 90 days
past due,
still accrual | | Non-accrual
loan | |
Multi-Family | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Office / Mixed Use | | 11 | | 831 | | 842 | | — | | 1,983 | |
Retail | | 8,137 | | 6,670 | | 14,806 | | — | | 21,815 | |
Industrial / Warehouse | | 1,028 | | 588 | | 1,616 | | — | | 12,444 | |
Hotel / Motel | | 375 | | 45 | | 420 | | 476 | | 7,433 | |
Other | | 507 | | 714 | | 1,221 | | — | | 15,875 | |
Total Delinquent CRE Loans | | $ | 10,058 | | $ | 8,847 | | $ | 18,905 | | $ | 476 | | $ | 59,550 | |
% of Total CRE Loans | | 0.54 | % | 0.47 | % | 1.01 | % | 0.03 | % | 3.17 | % |
% of Total Loans | | 0.41 | % | 0.36 | % | 0.77 | % | 0.02 | % | 2.44 | % |
We completed a comprehensive third party independent appraisal update on our commercial real estate loan portfolio in the third quarter of 2009. The loans included in the appraisal update consisted of all non-performing loans, all non-accrual loans, all troubled debt restructured (TDR) loans, watch list loans over $1 million for legacy Wilshire and watch list loans over $0.5 million for former Mirae, and certain large performing lending relationships. As a result, the average loan to value ratio for the loans that we reviewed increased from 64% to 86% and the loan to value ratio for the entire CRE portfolio increased to 65% from 61%. We completed a comprehensive impaired loan analysis utilizing the updated appraisal value of collateral and allocated sufficient allowance. For the loans that were classified and performing but collateral values had decreased more than their outstanding loan balance, we also allocated reserves for the underwater collateral value. 97% of CRE loan portfolio was performing and 85% of CRE loans had lower than 80% LTV ratio based on updated appraisal values discussed above. The following is a breakdown of LTV ratio changes by property type:
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| | ORIGINATION LTV | | UPDATED LTV | |
Multi-Family | | 66 | % | 78 | % |
Office / Mixed Use | | 57 | % | 59 | % |
Retail | | 62 | % | 67 | % |
Industrial / Warehouse | | 62 | % | 62 | % |
Hotel / Motel | | 61 | % | 65 | % |
Other | | 58 | % | 63 | % |
Total CRE Loans | | 61 | % | 65 | % |
(dollars in thousands) | | AMOUNT | | % | |
Less than 60% | | $ | 601,489 | | 32 | % |
60% to 69% | | 653,880 | | 35 | % |
70% to 79% | | 332,668 | | 18 | % |
80% to 89% | | 134,573 | | 7 | % |
90% and above | | 156,724 | | 8 | % |
Total | | $ | 1,879,334 | | 100 | % |
CRE loan refinance risk during the current economic environment remained high as the value of the collateral decreased. At September 30, 2009, the CRE loan maturity distributions are listed below:
(dollars in thousands) | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 & after | | TOTAL | |
Mulitfamily | | $ | 46,827 | | $ | 4,562 | | $ | 7,583 | | $ | 11,018 | | $ | 18,952 | | $ | 27,514 | | $ | 116,456 | |
Office / Mixed Use | | 26,590 | | 26,569 | | 12,520 | | 53,233 | | 46,039 | | 99,584 | | 264,535 | |
Retail | | 14,525 | | 38,674 | | 85,894 | | 107,127 | | 158,146 | | 315,603 | | 719,969 | |
Industrial / Warehouse | | 15,413 | | 27,319 | | 24,471 | | 65,922 | | 44,031 | | 140,345 | | 317,501 | |
Hotel / Motel | | 1,207 | | 37,219 | | 40,337 | | 52,646 | | 46,317 | | 135,413 | | 313,139 | |
Other | | 12,379 | | 29,331 | | 18,297 | | 22,044 | | 18,665 | | 47,018 | | 147,734 | |
Total CRE Loans | | $ | 116,941 | | $ | 163,674 | | $ | 189,102 | | $ | 311,990 | | $ | 332,150 | | $ | 765,477 | | $ | 1,879,334 | |
% of CRE | | 6 | % | 9 | % | 10 | % | 16 | % | 18 | % | 41 | % | 100 | % |
We believe that our refinance risk is limited based on low LTV and lower amount of loans due for refinance or maturity. 85% of the CRE loan portfolio had maturities in 2011 or later.
In the third quarter we performed a commercial real estate stress test. The loss assumptions that we used in our stress test were similar to the indicative loss rates disclosed in the Supervisory Capital Assessment Program (SCAP). Based on the results of the stress test, we concluded that our current loan loss reserve is adequate as of September 30, 2009 and CRE portfolio is resilient and able to withstand expected value declines and increased refinance risks.
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BALANCE SHEET
Loan portfolio growth
Total assets increased by $203 million or 6.4% to $3.38 billion at September 30, 2009, from $3.17 billion at June 30, 2009 primarily due to increases of $45.6 million in gross loans and $131.9 million in investment securities. Gross loan portfolio increased to $2.45 billion at September 30, 2009, from $2.40 billion at June 30, 2009 and $2.05 billion at December 31, 2008. The increase in loans and investments were funded primarily by increased customer deposits.
Deposit increase and liquidity improvement
Total deposits increased to $2.67 billion at September 30, 2009, which represents an increase of 9.0% or $220.5 million from June 30, 2009 and 47.4% or $859.5 million from December 31, 2008. The increase in deposits resulted from a substantial increase in core deposits of $520.2 million or 42.9% compared to June 30, 2009 and $868.2 million or 100.5% compared to December 31, 2008. Core deposits consist of demand deposits, savings, NOW accounts, money market accounts, and time deposits account under $100,000. Brokered deposits are not considered core deposits. We have successfully grown core deposits by introducing new deposit products, attracting new customers, and expanding existing customer relationships. With the successful increase in core deposits, the cost of deposits has decreased considerably. The cost of deposits for the third quarter decreased to 2.04%, a 31 basis point decrease from the second quarter of 2009. The inflow of core deposits allowed us to pay-down brokered deposits with higher interest rates. Our brokered deposits decreased to $64.1 million as of September 30, 2009, compared to $102.3 million at June 30, 2009 and $147.9 million at December 31, 2008.
Strong Capital Ratios
Capital ratios remained strong and well in excess of “well capitalized” regulatory requirements and we had an ample amount of excess capital to absorb future credit cost as noted below table:
(Dollars in thousands)
| | September 30, 2009 | | Well Capitalized
Regulatory Requirements | | Total Excess Above Well
Capitalized Requirements | |
| | | | | | | |
Tier 1 Leverage Capital Ratio | | 10.03 | % | 5.00 | % | $ | 165,065 | |
Tier 1 Risk-Based Capital Ratio | | 14.29 | % | 6.00 | % | 191,944 | |
Total Risk-Based Capital Ratio | | 15.82 | % | 10.00 | % | 133,954 | |
Tangible Common Equity To Risk-Weighted Assets Ratio | | 8.85 | % | 4.00 | % | 111,662 | |
| | | | | | | | |
The third quarter dividends on common and non-cumulative perpetual convertible preferred stock, series A, were declared. The common stock cash dividend was $0.05 per share, a consistent amount per share with prior quarter dividends. We will continue to review the dividend policy quarterly, in light of the current economic environment.
NET INTEREST MARGIN
Interest income increased by $9.9 million or 28%, to $45.1 million in the third quarter 2009, compared to interest income of $35.2 million and $37.6 million in the second quarter of 2009, and third quarter of 2008, respectively. Net interest income increased by $8.4 million or 40% compared to net interest income of $21.0 million in the second quarter of 2009, and $21.4 million in the third quarter of 2008. The increase in interest income and net interest income is largely due to a combination of increased earning assets obtained through the acquisition of the former Mirae Bank as well as strong organic growth.
Net interest margin increased by 51 basis points to 3.87% in the third quarter of 2009 from 3.36% in the second quarter of 2009, and was unchanged from the year-earlier quarter.
The weighted average loan yield increased by 52 basis points to 6.58% in the third quarter of 2009 from 6.06% in the second quarter of 2009 and the yield on investment securities increased 7 basis points to 3.54% in the third quarter of
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2009 from 3.47% in the second quarter of 2009. The increase in loan yield was primarily due to accretion of interest on the loans acquired from Mirae Bank that were paid off early and where total cash flows received on those assets exceeded the related initial investment at acquisition. Accreted interest income is recognized on a level yield basis over the life of the loan. Interest income of $4.4 million was accreted in the third quarter of 2009 that contributed 57 basis points to net interest margin, compared to none accreted in the second quarter of 2009.
Net interest income reversal on non-accrual loans was $2.5 million in the third quarter of 2009, as compared to $441,000 in the second quarter of 2009. Net interest income reversal in the third quarter of 2009 impacted our net interest margin by 41 basis points.
Average interest bearing deposits increased by $464.3 million to $2.2 billion in the third quarter of 2009 from $1.7 billion in the second quarter of 2009, and the related cost of deposits decreased by 37 basis points to 2.39% in the third quarter of 2009 compared to 2.76% in the second quarter of 2009. The decrease in the cost of deposits was due to repricing of related interest bearing deposits at lower rates. Certificate of deposits of $445.7 million with a weighted average yield of 2.84%, and $212.3 million with a weighted average yield of 2.44%, are expected to mature in the fourth quarter of 2009 and the first quarter of 2010, respectively. We expect to reprice these certificates of deposits at lower rates upon maturity.
SUCCESSFUL COMPLETION OF INTEGRATION OF THE FORMER MIRAE BANK
The integration of former Mirae Bank was successfully completed during the third quarter of 2009. We retained more than 95% of total customer deposits. We have also been able to realize sizable cost savings. Through workforce reductions and the closure of four out of five branches that we acquired, we were able to reduce the efficiency ratio to 40.26% in the third quarter of 2009 from 45.99% in the year-earlier period. We also reduced our credit exposure to commercial real estate loans. While we increased our CRE loans by $205.4 million through the acquisition, we reduced our CRE credit exposure through our loss sharing agreement with the FDIC. Pursuant to this agreement, the FDIC has agreed to bear 80% of loan and foreclosed real estate losses in an amount of up to $83 million and 95% of losses that exceed $83 million. Overall, the former Mirae Bank loan portfolio credit performance has been better than was expected at the time of acquisition. Delinquent and classified covered loans decreased during the third quarter of 2009.
CONFERENCE CALL
Management will host its quarterly conference call on October 27, 2009, at 11:00 a.m. PT (2:00 p.m. ET). Investment professionals are invited to participate in the call by dialing 1-800-901-5241 using passcode 59131956.
COMPANY INFORMATION
Headquartered in Los Angeles, Wilshire State Bank operates 23 branch offices in California, Texas, New Jersey and New York, and five loan production offices in Dallas, Houston, Atlanta, Denver, and Annandale, VA, and is a 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.
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.
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CONSOLIDATED BALANCE SHEET
| | September 30, | | June 30, | | Three Month | | December 31, | | Nine Month | | September 30, | | Twelve Month | |
(dollars in thousands) (unaudited) | | 2009 | | 2009 | | Change | | 2008 | | Change | | 2008 | | Change | |
| | | | | | | | | | | | | | | |
ASSETS: | | | | | | | | | | | | | | | |
Cash and Due from Banks | | $ | 141,533 | | $ | 75,844 | | 87 | % | $ | 67,540 | | 110 | % | $ | 54,017 | | 162 | % |
Federal Funds Sold and Other Cash Equivalents | | 130,004 | | 145,077 | | -10 | % | 30,001 | | 333 | % | 3 | | 3737983 | % |
Total Cash and Cash Equivalents | | 271,537 | | 220,921 | | 23 | % | 97,541 | | 178 | % | 54,020 | | 403 | % |
| | | | | | | | | | | | | | | |
Investment Securities Available For Sale | | 559,602 | | 427,714 | | 31 | % | 229,136 | | 144 | % | 227,957 | | 145 | % |
Investment Securities Held To Maturity | | 116 | | 124 | | -6 | % | 139 | | -16 | % | 143 | | -19 | % |
Total Investment Securities | | 559,718 | | 427,838 | | 31 | % | 229,275 | | 144 | % | 228,100 | | 145 | % |
Loans | | | | | | | | | | | | | | | |
Real Estate Construction | | 45,080 | | 40,517 | | 11 | % | 43,180 | | 4 | % | 43,161 | | 4 | % |
Residential Real Estate | | 79,384 | | 79,295 | | 0 | % | 77,846 | | 2 | % | 73,913 | | 7 | % |
Commercial Real Estate | | 1,890,432 | | 1,814,470 | | 4 | % | 1,519,082 | | 24 | % | 1,489,867 | | 27 | % |
Commercial and Industrial | | 414,194 | | 446,936 | | -7 | % | 387,752 | | 7 | % | 405,726 | | 2 | % |
Consumer | | 16,262 | | 18,489 | | -12 | % | 23,669 | | -31 | % | 21,661 | | -25 | % |
Total Loans | | 2,445,352 | | 2,399,707 | | 2 | % | 2,051,529 | | 19 | % | 2,034,328 | | 20 | % |
Allowance For Loan Losses | | (54,735 | ) | (38,758 | ) | 41 | % | (29,437 | ) | 86 | % | (25,950 | ) | 111 | % |
Loans Receivable, Net of Allowance for Loan Losses | | 2,390,617 | | 2,360,949 | | 1 | % | 2,022,092 | | 18 | % | 2,008,378 | | 19 | % |
| | | | | | | | | | | | | | | |
Accrued Interest Receivable | | 13,375 | | 12,639 | | 6 | % | 9,975 | | 34 | % | 10,168 | | 32 | % |
Due from Customers on Acceptances | | 251 | | 251 | | 0 | % | 2,213 | | -89 | % | 2,896 | | -91 | % |
Other Real Estate Owned | | 6,238 | | 5,956 | | 5 | % | 2,663 | | 134 | % | 1,453 | | 329 | % |
Premises and Equipment | | 12,454 | | 12,360 | | 1 | % | 11,265 | | 11 | % | 11,377 | | 9 | % |
Federal Home Loan Bank (FHLB) Stock, at Cost | | 21,040 | | 21,040 | | 0 | % | 17,537 | | 20 | % | 15,245 | | 38 | % |
Cash Surrender Value of Life Insurance | | 17,884 | | 17,715 | | 1 | % | 17,395 | | 3 | % | 17,200 | | 4 | % |
Investment in Affordable Housing Partnerships | | 12,271 | | 12,228 | | 0 | % | 9,019 | | 36 | % | 8,538 | | 44 | % |
Deferred Income Taxes | | 8,787 | | 14,148 | | -38 | % | 12,051 | | -27 | % | 10,570 | | -17 | % |
Servicing Assets | | 6,898 | | 6,677 | | 3 | % | 4,839 | | 43 | % | 4,986 | | 38 | % |
Goodwill | | 6,675 | | 6,675 | | 0 | % | 6,675 | | 0 | % | 6,675 | | 0 | % |
FDIC Loss Share Indemnification | | 40,014 | | 40,235 | | -1 | % | — | | 0 | % | — | | 0 | % |
Other Assets | | 9,804 | | 14,479 | | -32 | % | 7,471 | | 31 | % | 7,529 | | 30 | % |
TOTAL ASSETS | | $ | 3,377,563 | | $ | 3,174,111 | | 6 | % | $ | 2,450,011 | | 38 | % | $ | 2,387,135 | | 41 | % |
| | | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | |
LIABILITIES: | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | $ | 373,332 | | $ | 367,243 | | 2 | % | $ | 277,542 | | 35 | % | $ | 295,451 | | 26 | % |
Savings and Interest Checking | | 91,223 | | 81,126 | | 12 | % | 65,923 | | 38 | % | 63,927 | | 43 | % |
Money Market Deposits | | 752,788 | | 593,610 | | 27 | % | 362,719 | | 108 | % | 448,038 | | 68 | % |
Time Deposits in denomination of $100,000 or more | | 928,724 | | 1,136,438 | | -18 | % | 902,804 | | 3 | % | 765,311 | | 21 | % |
Other Time Deposits | | 526,035 | | 273,186 | | 93 | % | 203,613 | | 158 | % | 215,036 | | 145 | % |
Total Deposits | | 2,672,102 | | 2,451,603 | | 9 | % | 1,812,601 | | 47 | % | 1,787,763 | | 49 | % |
| | | | | | | | | | | | | | | |
Federal Home Loan Bank borrowings and Federal Funds Purchased | | 322,000 | | 331,000 | | -3 | % | 274,000 | | 18 | % | 300,000 | | 7 | % |
Acceptance Outstanding | | 251 | | 251 | | 0 | % | 2,213 | | -89 | % | 2,896 | | -91 | % |
Junior Subordinated Debentures | | 87,321 | | 87,321 | | 0 | % | 87,321 | | 0 | % | 87,321 | | 0 | % |
Accrued Interest Payable | | 7,715 | | 11,099 | | -30 | % | 6,957 | | 11 | % | 7,914 | | -3 | % |
Other Liabilities | | 15,687 | | 23,679 | | -34 | % | 11,859 | | 32 | % | 13,361 | | 17 | % |
Total Liabilities | | 3,105,076 | | 2,904,953 | | 7 | % | 2,194,951 | | 41 | % | 2,199,255 | | 41 | % |
| | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | |
Preferred Stock | | 59,806 | | 59,683 | | 0 | % | 59,443 | | 1 | % | — | | N/A | |
Common Stock | | 54,646 | | 54,420 | | 0 | % | 54,038 | | 1 | % | 50,994 | | 7 | % |
Retained Earnings | | 149,258 | | 152,386 | | -2 | % | 140,340 | | 6 | % | 136,840 | | 9 | % |
Accumulated Other Comprehensive Income, Net of Taxes | | 8,777 | | 2,669 | | 229 | % | 1,239 | | 609 | % | 46 | | 19225 | % |
Total Stockholders’ Equity | | 272,487 | | 269,158 | | 1 | % | 255,060 | | 7 | % | 187,880 | | 45 | % |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 3,377,563 | | $ | 3,174,111 | | 6 | % | $ | 2,450,011 | | 38 | % | $ | 2,387,135 | | 41 | % |
8
(continued)
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data) (unaudited)
| | Quarter Ended | | Three Month | | Quarter Ended | | One Year | |
| | September 30, 2009 | | June 30, 2009 | | % Change | | September 30, 2008 | | % Change | |
| | | | | | | | | | | |
INTEREST INCOME | | | | | | | | | | | |
Interest and Fees on Loans | | $ | 39,389 | | $ | 31,234 | | 26 | % | $ | 34,719 | | 13 | % |
Interest on Investment Securities | | 4,876 | | 3,194 | | 53 | % | 2,798 | | 74 | % |
Interest on Federal Funds Sold | | 844 | | 777 | | 9 | % | 63 | | 1244 | % |
Total Interest Income | | 45,109 | | 35,205 | | 28 | % | 37,580 | | 20 | % |
| | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | |
Deposits | | 12,994 | | 11,776 | | 10 | % | 12,469 | | 4 | % |
FHLB Advances and Other Borrowings | | 2,702 | | 2,448 | | 10 | % | 3,697 | | -27 | % |
Total Interest Expense | | 15,696 | | 14,224 | | 10 | % | 16,166 | | -3 | % |
| | | | | | | | | | | |
Net Interest Income Before Provision for Losses on Loans and Loan Commitments | | 29,413 | | 20,981 | | 40 | % | 21,414 | | 37 | % |
Provision for Losses on Loans and Loan Commitments | | 24,200 | | 12,100 | | 100 | % | 3,400 | | 612 | % |
Net Interest Income After Provision for Losses on Loans and Loan Commitments | | 5,213 | | 8,881 | | -41 | % | 18,014 | | -71 | % |
| | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | |
Service Charges on Deposits | | 3,314 | | 3,125 | | 6 | % | 3,125 | | 6 | % |
Gain on Sale of Loans | | 2,235 | | 307 | | 629 | % | 410 | | 445 | % |
Gain from Acquisition of Mirae Bank | | — | | 21,679 | | -100 | % | — | | 0 | % |
Other | | 1,851 | | 3,479 | | -47 | % | 1,810 | | 2 | % |
Total Noninterest Income | | 7,400 | | 28,590 | | -74 | % | 5,345 | | 38 | % |
| | | | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | | | | |
Salaries and Employee Benefits | | 7,120 | | 5,988 | | 19 | % | 6,718 | | 6 | % |
Occupancy & Equipment | | 1,935 | | 1,682 | | 15 | % | 1,576 | | 23 | % |
Data Processing | | 1,078 | | 845 | | 27 | % | 785 | | 37 | % |
Other | | 4,688 | | 5,561 | | -16 | % | 3,228 | | 45 | % |
Total Noninterest Expenses | | 14,821 | | 14,076 | | 5 | % | 12,307 | | 20 | % |
| | | | | | | | | | | |
Income (loss) Before Income Taxes | | (2,208 | ) | 23,395 | | -109 | % | 11,052 | | -120 | % |
Income Tax | | (1,451 | ) | 9,649 | | -115 | % | 4,184 | | -135 | % |
NET (LOSS) INCOME | | $ | (757 | ) | $ | 13,746 | | -106 | % | $ | 6,868 | | -111 | % |
| | | | | | | | | | | |
Preferred Stock Cash Dividend and Accretion of Preferred Stock Discount | | 900 | | 898 | | 0 | % | — | | N/A | |
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS | | $ | (1,657 | ) | $ | 12,848 | | -113 | % | $ | 6,868 | | -124 | % |
| | | | | | | | | | | |
PER COMMON SHARE INFORMATION | | | | | | | | | | | |
Basic Earnings (Loss) Per Common Share | | $ | (0.06 | ) | $ | 0.44 | | -113 | % | $ | 0.23 | | -124 | % |
Diluted Earnings (Loss) Per Common Share | | $ | (0.06 | ) | $ | 0.44 | | -113 | % | $ | 0.23 | | -124 | % |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | | | | | |
Basic | | 29,413,757 | | 29,413,757 | | | | 29,397,182 | | | |
Diluted | | 29,413,757 | | 29,421,247 | | | | 29,508,503 | | | |
(continued)
9
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data) (unaudited)
| | Nine Months Ended | | One Year | |
| | September 30, 2009 | | September 30, 2008 | | % Change | |
| | | | | | | |
INTEREST INCOME | | | | | | | |
Interest and Fees on Loans | | $ | 100,817 | | $ | 104,014 | | -3 | % |
Interest on Investment Securities | | 11,011 | | 8,021 | | 37 | % |
Interest on Federal Funds Sold | | 1,910 | | 192 | | 895 | % |
Total Interest Income | | 113,738 | | 112,227 | | 1 | % |
| | | | | | | |
INTEREST EXPENSE | | | | | | | |
Deposits | | 35,952 | | 40,071 | | -10 | % |
FHLB Advances and Other Borrowings | | 7,728 | | 10,665 | | -28 | % |
Total Interest Expense | | 43,680 | | 50,736 | | -14 | % |
| | | | | | | |
Net Interest Income Before Provision for Losses on Loans and Loan Commitments | | 70,058 | | 61,491 | | 14 | % |
Provision for Losses on Loans and Loan Commitments | | 43,000 | | 6,200 | | 594 | % |
Net Interest Income After Provision for Losses on Loans and Loan Commitments | | 27,058 | | 55,291 | | -51 | % |
| | | | | | | |
NONINTEREST INCOME | | | | | | | |
Service Charges on Deposits | | 9,338 | | 8,916 | | 5 | % |
Gain on Sale of Loans | | 1,711 | | 2,192 | | -22 | % |
Gain from Acquisition of Mirae Bank | | 21,679 | | — | | N/A | |
Other | | 6,999 | | 4,997 | | 40 | % |
Total Noninterest Income | | 39,727 | | 16,105 | | 147 | % |
| | | | | | | |
NONINTEREST EXPENSES | | | | | | | |
Salaries and Employee Benefits | | 19,315 | | 21,349 | | -10 | % |
Occupancy & Equipment | | 5,294 | | 4,493 | | 18 | % |
Data Processing | | 2,750 | | 2,320 | | 19 | % |
Other | | 13,525 | | 8,923 | | 52 | % |
Total Noninterest Expenses | | 40,884 | | 37,085 | | 10 | % |
| | | | | | | |
Income (loss) Before Income Taxes | | 25,901 | | 34,311 | | -25 | % |
Income Tax | | 9,853 | | 12,964 | | -24 | % |
NET INCOME | | $ | 16,048 | | $ | 21,347 | | -25 | % |
| | | | | | | |
Preferred Stock Cash Dividend and Accretion of Preferred Stock Discount | | 2,718 | | — | | N/A | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | $ | 13,330 | | $ | 21,347 | | -38 | % |
| | | | | | | |
PER COMMON SHARE INFORMATION | | | | | | | |
Basic Earnings Per Common Share | | $ | 0.45 | | $ | 0.73 | | -38 | % |
Diluted Earnings Per Common Share | | $ | 0.45 | | $ | 0.73 | | -38 | % |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | |
Basic | | 29,413,757 | | 29,355,231 | | | |
Diluted | | 29,422,528 | | 29,402,212 | | | |
(continued)
10
SUMMARY OF FINANCIAL DATA
(dollars in thousands, except per share data) (unaudited)
AVERAGE BALANCES
| | Quarter Ended | | | |
| | September 30, 2009 | | | | June 30, 2009 | | | | September 30, 2008 | | | |
| | | | | | | | | | | | | |
Average Assets | | $ | 3,298,238 | | | | $ | 2,691,508 | | | | $ | 2,381,999 | | | |
Average Equity | | 276,770 | | | | 262,437 | | | | 186,332 | | | |
Average Net Loans (includes LHFS) | | 2,393,513 | | | | 2,060,306 | | | | 1,979,435 | | | |
Average Deposits | | 2,547,303 | | | | 2,000,690 | | | | 1,774,451 | | | |
Average Time Deposits in denomination of $100,000 or more | | 984,521 | | | | 994,514 | | | | 770,812 | | | |
Average Interest Earning Assets | | 3,062,707 | | | | 2,517,899 | | | | 2,219,745 | | | |
| | | | | | | | | | | | | |
| | Nine Months Ended | | | |
| | September 30, 2009 | | | | | | | | September 30, 2008 | | | |
| | | | | | | | | | | | | |
Average Assets | | $ | 2,840,993 | | | | | | | | $ | 2,299,152 | | | |
Average Equity | | 266,157 | | | | | | | | 181,122 | | | |
Average Net Loans (includes LHFS) | | 2,162,801 | | | | | | | | 1,906,985 | | | |
Average Deposits | | 2,129,473 | | | | | | | | 1,735,283 | | | |
Average Time Deposits in denomination of $100,000 or more | | 972,176 | | | | | | | | 784,790 | | | |
Average Interest Earning Assets | | 2,650,310 | | | | | | | | 2,143,678 | | | |
| | | | | | | | | | | | | |
PROFITABILITY | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Quarter Ended | | | |
| | September 30, 2009 | | | | June 30, 2009 | | | | September 30, 2008 | | | |
| | | | | | | | | | | | | |
Annualized Return on Average Assets | | -0.09 | % | | | 2.04 | % | | | 1.15 | % | | |
Annualized Return on Average Equity | | -1.09 | % | | | 20.95 | % | | | 14.74 | % | | |
Efficiency Ratio | | 40.26 | % | | | 28.40 | % | | | 45.99 | % | | |
Annualized Operating Expense/Average Assets | | 1.80 | % | | | 2.09 | % | | | 2.07 | % | | |
Annualized Net Interest Margin | | 3.87 | % | | | 3.36 | % | | | 3.87 | % | | |
| | | | | | | | | | | | | |
| | Nine Months Ended | | | |
| | September 30, 2009 | | | | | | | | September 30, 2008 | | | |
| | | | | | | | | | | | | |
Annualized Return on Average Assets | | 0.75 | % | | | | | | | 1.24 | % | | |
Annualized Return on Average Equity | | 8.04 | % | | | | | | | 15.71 | % | | |
Efficiency Ratio | | 37.24 | % | | | | | | | 47.79 | % | | |
Annualized Operating Expense/Average Assets | | 1.92 | % | | | | | | | 2.15 | % | | |
Annualized Net Interest Margin | | 3.52 | % | | | | | | | 3.82 | % | | |
| | | | | | | | | | | | | |
DEPOSIT COMPOSITION - COMBINED |
| | | | | | | | | | | | | |
| | Quarter Ended | | Cost of | | Quarter Ended | | Cost of | | Quarter Ended | | Cost of | |
| | September 30, 2009 | | Fund | | June 30, 2009 | | Fund | | September 30, 2008 | | Fund | |
| | | | | | | | | | | | | |
Noninterest Bearing Demand Deposits | | 14.0 | % | 0.00 | % | 15.0 | % | 0.00 | % | 16.5 | % | 0.00 | % |
Savings & Interest Checking | | 3.4 | % | 2.76 | % | 3.3 | % | 2.90 | % | 3.6 | % | 2.77 | % |
Money Market Deposits | | 28.2 | % | 2.41 | % | 24.2 | % | 2.54 | % | 25.1 | % | 3.21 | % |
Time Deposits of $100,000 or More | | 34.8 | % | 2.28 | % | 46.4 | % | 2.72 | % | 42.8 | % | 3.48 | % |
Other Time Deposits | | 19.7 | % | 2.56 | % | 11.1 | % | 3.35 | % | 12.0 | % | 3.69 | % |
Total Deposits | | 100.0 | % | 2.04 | % | 100.0 | % | 2.35 | % | 100.0 | % | 2.81 | % |
| | | | | | | | | | | | | |
CAPITAL RATIOS | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Quarter Ended | | | |
| | September 30, 2009 | | | | June 30, 2009 | | | | September 30, 2008 | | | |
| | | | | | | | | | | | | |
Tier 1 Leverage Ratio | | 10.03 | % | | | 12.30 | % | | | 10.19 | % | | |
Tier 1 Risk-Based Capital Ratio | | 14.29 | % | | | 13.26 | % | | | 11.68 | % | | |
Total Risk-Based Capital Ratio | | 15.82 | % | | | 14.75 | % | | | 14.01 | % | | |
Total Shareholders’ Equity | | $ | 272,487 | | | | $ | 269,158 | | | | $ | 187,879 | | | |
Book Value Per Common Share | | $ | 7.23 | | | | $ | 7.12 | | | | $ | 6.39 | | | |
Tangible Common Equity Per Common Share * | | $ | 6.93 | | | | $ | 6.81 | | | | $ | 6.12 | | | |
Tangible Common Equity to Tangible Assets ** | | 6.05 | % | | | 6.33 | % | | | 7.56 | % | | |
* Tangible common equity excludes goodwill, other intangible assets, and TARP preferred stock
** Tangible assets exclude goodwill and intangible assets
Reconciliation of GAAP financial measures to non-GAPP financial measures:
| | September 30, 2009 | | June 30, 2009 | | December 31, 2008 | | September 30, 2008 | |
| | | | | | | | | |
Total stockholders’ equity | | $ | 272,487 | | $ | 269,158 | | $ | 255,060 | | $ | 187,879 | |
Preferred stock, net of discount | | (59,806 | ) | (59,683 | ) | (59,443 | ) | — | |
Goodwill and other intangible assets, net | | (8,906 | ) | (9,145 | ) | (7,963 | ) | (8,038 | ) |
Tangible common equity | | $ | 203,775 | | $ | 200,330 | | $ | 187,654 | | $ | 179,841 | |
| | | | | | | | | |
Total assets | | $ | 3,377,563 | | $ | 3,174,111 | | $ | 2,450,011 | | $ | 2,387,135 | |
Goodwill and other intangible assets, net | | (8,906 | ) | (9,145 | ) | (7,963 | ) | (8,038 | ) |
Tangible assets | | $ | 3,368,657 | | $ | 3,164,966 | | $ | 2,442,048 | | $ | 2,379,096 | |
| | | | | | | | | |
Common shares outstanding | | 29,413,757 | | 29,413,757 | | 29,413,757 | | 29,401,757 | |
(continued)
11
SUMMARY OF FINANCIAL DATA
(dollars in thousands, except per share data) (unaudited)
ALLOWANCE FOR LOAN LOSSES
(net of SBA guaranteed portion)
| | Quarter Ended | | | |
| | September 30, 2009 | | June 30, 2009 | | March 31, 2009 | | December 31, 2008 | | | |
| | | | | | | | | | | |
Balance at Beginning of Period | | $ | 38,758 | | $ | 34,156 | | $ | 29,437 | | $ | 25,950 | | | |
Provision for Losses on Loans | | 23,967 | | 11,812 | | 7,009 | | 5,902 | | | |
Recoveries on Loans Previously Charged-off | | 223 | | 262 | | 113 | | 191 | | | |
Less Charge Offs | | (8,213 | ) | (7,472 | ) | (2,403 | ) | (2,606 | ) | | |
Balance at End of Period | | $ | 54,735 | | $ | 38,758 | | $ | 34,156 | | $ | 29,437 | | | |
| | | | | | | | | | | |
Net Loan Charge-offs/Average Total Loans | | 0.33 | % | 0.34 | % | 0.11 | % | 0.12 | % | | |
Charge-offs/Average Total Loans | | 0.34 | % | 0.36 | % | 0.12 | % | 0.13 | % | | |
Allowance for Loan Losses/Gross Loans | | 2.24 | % | 1.62 | % | 1.65 | % | 1.43 | % | | |
Allowance for Loan Losses/Legacy Wilshire Loans | | 2.52 | % | 1.83 | % | 1.65 | % | 1.43 | % | | |
Allowance for Loan Losses/Non-accrual Loans | | 70.72 | % | 78.58 | % | 116.71 | % | 191.90 | % | | |
Allowance for Loan Losses/Non-performing Loans | | 70.02 | % | 78.38 | % | 114.84 | % | 189.27 | % | | |
Allowance for Loan Losses/Total Assets | | 1.62 | % | 1.22 | % | 1.31 | % | 1.20 | % | | |
Allowance for Loan Losses/Non-performing Assets | | 64.85 | % | 71.62 | % | 94.82 | % | 161.61 | % | | |
| | | | | | | | | | | |
NON-PERFORMING ASSETS | | | | | | | | | | | |
(net of SBA guaranteed portion) | | | | | | | | | | | |
| | | | | | | | | | | |
| | Quarter Ended | | | |
| | September 30, 2009 | | June 30, 2009 | | March 31, 2009 | | December 31, 2008 | | | |
Nonaccrual Loans: | | | | | | | | | | | |
Non-covered Loans | | $ | 52,386 | | $ | 35,032 | | $ | 29,266 | | $ | 15,339 | | | |
Covered Loans | | 25,007 | | 14,290 | | — | | — | | | |
Total | | 77,393 | | 49,322 | | 29,266 | | 15,339 | | | |
| | | | | | | | | | | |
Loans 90 days or more past due and still accruing: | | | | | | | | | | | |
Non-covered Loans | | — | | 128 | | 475 | | 213 | | | |
Covered Loans | | 772 | | — | | — | | — | | | |
Total | | 772 | | 128 | | 475 | | 213 | | | |
Total Nonperforming Loans | | 78,165 | | 49,450 | | 29,266 | | 15,339 | | | |
| | | | | | | | | | | |
OREO and Repossessed Vehicles: | | | | | | | | | | | |
Non-covered Loans | | 5,738 | | 5,456 | | 6,282 | | 2,663 | | | |
Covered Loans | | 500 | | 500 | | — | | — | | | |
Total | | 6,238 | | 5,956 | | 6,282 | | 2,663 | | | |
| | | | | | | | | | | |
Total Nonperforming Assets: | | | | | | | | | | | |
Non-covered Assets | | 58,124 | | 40,616 | | 36,023 | | 18,215 | | | |
Covered Assets | | 26,279 | | 14,790 | | — | | — | | | |
Total | | $ | 84,403 | | $ | 55,406 | | $ | 36,023 | | $ | 18,215 | | | |
| | | | | | | | | | | |
Total Nonperforming Loans/Gross Loans | | 3.20 | % | 2.01 | % | 1.43 | % | 0.76 | % | | |
| | | | | | | | | | | |
Total Nonperforming Assets/Total Assets | | 2.50 | % | 1.70 | % | 1.38 | % | 0.74 | % | | |
Performing Troubled Debt Restructured Loans
| | Quarter Ended | |
| | September 30, 2009 | | June 30, 2009 | |
| | COVERED | | NON-COVERED | | TOTAL LOANS | | COVERED | | NON-COVERED | | TOTAL LOANS | |
| | | | | | | | | | | | | |
Construction | | $ | — | | $ | — | | $ | — | | $ | 494 | | $ | — | | $ | 494 | |
Real Estate Secured | | 10,494 | | 54,868 | | 65,362 | | 16,147 | | 20,722 | | 36,869 | |
Commerial & Industrial | | — | | 895 | | 895 | | | | | | | |
Consumer | | — | | — | | 0 | | — | | 623 | | 623 | |
TOTAL PERFORMING TDR | | $ | 10,494 | | $ | 55,763 | | $ | 66,257 | | $ | 16,641 | | $ | 21,345 | | $ | 37,986 | |
(continued)
12
LOAN ORIGINATION AMOUNT
| | Quarter Ended | |
| | September 30, 2009 | | June 30, 2009 | | March 31, 2009 | | December 31, 2008 | | September 30, 2008 | |
| | | | | | | | | | | |
Total new loan origination amount, excluding renewal. | | $ | 183,859 | | $ | 159,334 | | $ | 64,838 | | $ | 72,412 | | $ | 98,999 | |
SBA new loan origination amount, excluding renewal. | | $ | 15,592 | | $ | 12,456 | | $ | 6,276 | | $ | 9,190 | | $ | 10,218 | |
ALLOWANCE FOR LOAN LOSSES
(net of SBA guaranteed portion)
| | Nine Months Ended | | | | | | | |
| | September 30, 2009 | | September 30, 2008 | | | | | | | |
| | | | | | | | | | | |
Balance at Beginning of Period | | $ | 29,437 | | $ | 23,494 | | | | | | | |
Provision for Losses on Loans | | 42,788 | | 3,795 | | | | | | | |
Recoveries on Loans Previously Charged-off | | 598 | | 174 | | | | | | | |
Less Charge Offs | | (18,088 | ) | (1,513 | ) | | | | | | |
Balance at End of Period | | $ | 54,735 | | $ | 25,950 | | | | | | | |
ALLOWANCE FOR OFF-BALANCE
SHEET ITEMS (non-covered loan only)
(net of SBA guaranteed portion)
| | Nine Months Ended | | | | | | | |
| | September 30, 2009 | | September 30, 2008 | | | | | | | |
| | | | | | | | | | | |
Balance at Beginning of Period | | $ | 1,243 | | $ | 1,998 | | | | | | | |
(Recapture of) Provision for Losses on Off-balance Sheet Items | | 212 | | (763 | ) | | | | | | |
Balance at End of Period | | $ | 1,455 | | $ | 1,235 | | | | | | | |
LOAN ORIGINATION AMOUNT
| | Nine Months Ended | | | | | | | |
| | September 30, 2009 | | September 30, 2008 | | | | | | | |
| | | | | | | | | | | |
Total new loan origination amount, excluding renewal. | | $ | 408,031 | | $ | 445,678 | | | | | | | |
SBA new loan origination amount, excluding renewal. | | $ | 34,324 | | $ | 54,139 | | | | | | | |
(continued)
13
WILSHIRE BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(dollars in thousands) (unaudited)
(Tax equivalent ratio)
| | For the Three Months Ended | |
| | September 30, 2009 | | June 30, 2008 | | September 30, 2008 | |
| | | | Interest | | Average | | | | Interest | | Average | | | | Interest | | Average | |
| | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
| | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
INTEREST EARNING ASSETS | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
LOANS: | | | | | | | | | | | | | | | | | | | |
Real Estate Loans | | $ | 1,982,131 | | $ | 31,400 | | 6.34 | % | $ | 1,700,543 | | $ | 25,886 | | 6.09 | % | $ | 1,592,285 | | $ | 27,661 | | 6.95 | % |
Commercial Loans | | 440,140 | | 6,821 | | 6.20 | % | 379,394 | | 4,569 | | 4.82 | % | 392,485 | | 5,787 | | 5.90 | % |
Consumer Loans | | 16,818 | | 250 | | 5.96 | % | 18,693 | | 256 | | 5.47 | % | 23,540 | | 375 | | 6.37 | % |
Total Loans - Gross | | 2,439,089 | | 38,471 | | 6.31 | % | 2,098,630 | | 30,711 | | 5.85 | % | 2,008,310 | | 33,823 | | 6.74 | % |
Loan Fees Toward Yield | | | | 918 | | | | | | 523 | | | | | | 896 | | | |
Allowance for Loan Losses & Unearned income | | (45,576 | ) | | | | | (38,324 | ) | | | | | (28,875 | ) | | | | |
Net Loans | | 2,393,513 | | 39,389 | | 6.58 | % | 2,060,306 | | 31,234 | | 6.06 | % | 1,979,435 | | 34,719 | | 7.02 | % |
| | | | | | | | | | | | | | | | | | | |
INVESTMENT SECURITIES AND OTHER INTEREST-EARNING ASSETS: | | | | | | | | | | | | | | | | | | | |
Investment Securities * | | 488,704 | | 4,876 | | 4.16 | % | 324,302 | | 3,194 | | 4.14 | % | 228,825 | | 2,798 | | 4.96 | % |
Federal Funds Sold | | 180,490 | | 844 | | 1.87 | % | 133,140 | | 777 | | 2.34 | % | 11,485 | | 63 | | 2.19 | % |
Total Investment Securities and Other Earning Assets | | 669,194 | | 5,720 | | 3.54 | % | 457,442 | | 3,971 | | 3.47 | % | 240,310 | | 2,861 | | 4.83 | % |
| | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST-EARNING ASSETS | | $ | 3,062,707 | | $ | 45,109 | | 5.92 | % | $ | 2,517,748 | | $ | 35,205 | | 5.62 | % | $ | 2,219,745 | | $ | 37,580 | | 6.78 | % |
| | | | | | | | | | | | | | | | | | | |
INTEREST BEARING LIABILITIES | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
INTEREST-BEARING DEPOSITS: | | | | | | | | | | | | | | | | | | | |
Money Market | | $ | 677,234 | | $ | 4,075 | | 2.41 | % | $ | 436,066 | | $ | 2,774 | | 2.54 | % | $ | 439,080 | | $ | 3,520 | | 3.21 | % |
NOW | | 21,481 | | 50 | | 0.93 | % | 19,142 | | 46 | | 0.96 | % | 21,144 | | 72 | | 1.36 | % |
Savings | | 62,090 | | 527 | | 3.39 | % | 48,511 | | 444 | | 3.66 | % | 41,273 | | 359 | | 3.48 | % |
Time Deposits of $100,000 or More | | 984,521 | | 5,611 | | 2.28 | % | 994,514 | | 6,751 | | 2.72 | % | 770,812 | | 6,702 | | 3.48 | % |
Other Time Deposits | | 427,234 | | 2,731 | | 2.56 | % | 210,020 | | 1,761 | | 3.35 | % | 197,044 | | 1,816 | | 3.69 | % |
Total Interest Bearing Deposits | | 2,172,560 | | 12,994 | | 2.39 | % | 1,708,253 | | 11,776 | | 2.76 | % | 1,469,353 | | 12,469 | | 3.39 | % |
| | | | | | | | | | | | | | | | | | | |
BORROWINGS: | | | | | | | | | | | | | | | | | | | |
FHLB Advances and Other Borrowings | | 362,208 | | 1,982 | | 2.19 | % | 321,434 | | 1,622 | | 2.02 | % | 309,576 | | 2,570 | | 3.32 | % |
Junior Subordinated Debentures | | 87,321 | | 720 | | 3.30 | % | 87,321 | | 826 | | 3.78 | % | 87,321 | | 1,127 | | 5.16 | % |
Total Borrowings | | 449,529 | | 2,702 | | 2.40 | % | 408,755 | | 2,448 | | 2.40 | % | 396,897 | | 3,697 | | 3.73 | % |
| | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST BEARING LIABILITIES | | $ | 2,622,089 | | $ | 15,696 | | 2.40 | % | $ | 2,117,008 | | $ | 14,224 | | 2.69 | % | $ | 1,866,250 | | $ | 16,166 | | 3.46 | % |
| | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | | $ | 29,413 | | | | | | $ | 20,981 | | | | | | $ | 21,414 | | | |
| | | | | | | | | | | | | | | | | | | |
NET INTEREST SPREAD | | | | | | 3.52 | % | | | | | 2.93 | % | | | | | 3.32 | % |
| | | | | | | | | | | | | | | | | | | |
NET INTEREST MARGIN | | | | | | 3.87 | % | | | | | 3.36 | % | | | | | 3.87 | % |
* Tax equivalent ratios for investment securities
(continued)
14
| | For the Nine Months Ended | |
| | September 30, 2009 | | September 30, 2008 | |
| | | | Interest | | Average | | | | Interest | | Average | |
| | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
| | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
INTEREST EARNING ASSETS | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
LOANS: | | | | | | | | | | | | | |
Real Estate Loans | | $ | 1,780,320 | | $ | 82,192 | | 6.16 | % | $ | 1,543,442 | | $ | 82,187 | | 7.10 | % |
Commercial Loans | | 402,929 | | 15,808 | | 5.23 | % | 365,086 | | 17,158 | | 6.27 | % |
Consumer Loans | | 18,867 | | 807 | | 5.70 | % | 26,585 | | 1,331 | | 6.68 | % |
Total Loans - Gross | | 2,202,116 | | 98,807 | | 5.98 | % | 1,935,113 | | 100,676 | | 6.94 | % |
Loan Fees toward Yield | | | | 2,010 | | | | | | 3,338 | | | |
Allowance for Loan Losses & Unearned income | | (39,315 | ) | | | | | (28,128 | ) | | | | |
Gross Loans, Net | | $ | 2,162,801 | | $ | 100,817 | | 6.22 | % | $ | 1,906,985 | | $ | 104,014 | | 7.27 | % |
| | | | | | | | | | | | | |
INVESTMENT SECURITIES AND OTHER INTEREST-EARNING ASSETS: | | | | | | | | | | | | | |
U.S. Government Agencies | | $ | 367,260 | | $ | 11,011 | | 4.17 | % | $ | 226,727 | | $ | 8,021 | | 4.79 | % |
Federal Funds Sold | | 12,249 | | 1,910 | | 2.12 | % | 9,966 | | 192 | | 2.57 | % |
Total Investment Securities and Other Earning Assets | | 487,509 | | 12,921 | | 3.66 | % | 236,693 | | 8,213 | | 4.70 | % |
| | | | | | | | | | | | | |
TOTAL INTEREST-EARNING ASSETS | | $ | 2,650,310 | | $ | 113,738 | | 5.75 | % | $ | 2,143,678 | | $ | 112,227 | | 6.98 | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
INTEREST BEARING LIABILITIES | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
INTEREST-BEARING DEPOSITS: | | | | | | | | | | | | | |
Money Market | | $ | 493,160 | | $ | 9,181 | | 2.48 | % | $ | 409,726 | | $ | 10,243 | | 3.33 | % |
NOW | | 20,066 | | 141 | | 0.94 | % | 22,062 | | 227 | | 1.37 | % |
Savings | | 51,347 | | 1,364 | | 3.54 | % | 36,646 | | 907 | | 3.30 | % |
Time Deposits of $100,000 or More | | 972,176 | | 19,031 | | 2.61 | % | 784,790 | | 23,222 | | 3.95 | % |
Other Time Deposits | | 277,684 | | 6,235 | | 2.99 | % | 178,342 | | 5,472 | | 4.09 | % |
Total Interest-Bearing Deposits | | 1,814,433 | | 35,952 | | 2.64 | % | 1,431,566 | | 40,071 | | 3.73 | % |
| | | | | | | | | | | | | |
BORROWINGS: | | | | | | | | | | | | | |
FHLB Advances and Other Borrowings | | 336,944 | | 5,261 | | 2.08 | % | 269,818 | | 6,969 | | 3.44 | % |
Junior Subordinated Debentures | | 87,321 | | 2,467 | | 3.77 | % | 87,321 | | 3,696 | | 5.64 | % |
Total Borrowings | | 424,265 | | 7,728 | | 2.43 | % | 357,139 | | 10,665 | | 3.98 | % |
| | | | | | | | | | | | | |
TOTAL INTEREST BEARING LIABILITIES | | $ | 2,238,698 | | $ | 43,680 | | 2.60 | % | $ | 1,788,705 | | $ | 50,736 | | 3.78 | % |
| | | | | | | | | | | | | |
NET INTEREST INCOME | | | | $ | 70,058 | | | | | | $ | 61,491 | | | |
| | | | | | | | | | | | | |
NET INTEREST SPREAD | | | | | | 3.15 | % | | | | | 3.20 | % |
| | | | | | | | | | | | | |
NET INTEREST MARGIN | | | | | | 3.55 | % | | | | | 3.83 | % |
(concluded)
15
