Wilshire Bancorp, Inc (WIBC)

[Enterprising Investor]

Wilshire Bancorp Reports Net Income of $11.3 Million or $0.16 Per Share for Third Quarter 2013 (10/21/13)

LOS ANGELES, Oct. 21, 2013 (GLOBE NEWSWIRE) -- Wilshire Bancorp, Inc. (Nasdaq:WIBC) (the "Company"), the holding company for Wilshire Bank, formerly Wilshire State Bank (the "Bank"), today reported net income available to common shareholders of $11.3 million, or $0.16 per diluted common share, for the quarter ended September 30, 2013. This compares to net income available to common shareholders of $38.5 million, or $0.54 per common share, for the same period of the prior year, and net income available to common shareholders of $11.5 million, or $0.16 per common share, for the second quarter of 2013.

Jae Whan (J.W.) Yoo, President and CEO of Wilshire Bancorp, said, "We are pleased with our third quarter performance, which was driven by solid revenue growth, enhanced efficiencies and continued improvement in our credit quality. We saw a significant pick-up in our commercial real estate lending during the third quarter, which helped increase our loan portfolio by nearly 5% from the end of the prior quarter. We continue to enhance our ability to generate new customer relationships, most notably through the creation of a New Business Marketing Group led by our new Chief Marketing Officer, which will focus on increasing penetration in our primary markets.

"We are seeing strong improvement in our core earnings power, with our pre-tax, pre-provision income increasing 20% on a year-over-year basis. With the acquisition of BankAsiana, which closed earlier this month, and our pending acquisition of Saehan Bancorp, we believe we have additional catalysts in place that should enable us to continue improving our core earnings power in the years ahead and creating significant value for shareholders," said Mr. Yoo.

Q3 2013 Summary

Net income available to common shareholders totaled $11.3 million or $0.16 per diluted common share

Total revenue of $34.5 million, an increase of 7.2% from the third quarter of 2012

Return on average assets of 1.62%; return on average equity of 12.61%

Operating efficiency ratio of 51.7% for Q3 2013 compared to 57.0% for Q3 2012

Loans receivable totaled $2.20 billion at September 30, 2013, an increase of 4.9% from $2.09 billion at June 30, 2013

Total deposits were $2.25 billion at September 30, 2013, an increase of 3.3% from $2.18 billion at June 30, 2013

Continued improvement in credit quality resulted in no provision for losses on loans and loan commitments for Q3 2013

STATEMENT OF OPERATIONS

Pre-Tax, Pre-Provision Income

Pre-tax, pre-provision income (PTPP) was $16.7 million for the third quarter of 2013, compared with $13.9 million for the third quarter of 2012, and $17.0 million for the second quarter of 2013. PTPP is a Non-GAAP measure of financial performance. Please refer to the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" table at the end of this press release for a reconciliation of PTPP to net income and important information about Non-GAAP measures of financial performance.

Net Interest Income and Margin

Net interest income before credit for losses on loans and loan commitments totaled $26.7 million for the third quarter of 2013, an increase of 4.3% from $25.6 million for the third quarter of 2012, and an increase of 3.7% from $25.8 million in the second quarter of 2013. The increase from prior quarter is largely attributable to large recovery of interest income from loans that were put back on accrual status.

Net interest margin was 4.17% for the third quarter of 2013, compared to 4.35% in the third quarter of 2012, and 4.06% for the second quarter of 2013. The increase in net interest margin from the second quarter of 2013 was also due to the recovery of interest income that was previously reversed out due to certain loans being put on non-accrual status. As credit quality in these loans improved, the loans were put back on accrual status and the previously reversed interest income was recognized during the third quarter of 2013.

Loan yields increased to 5.18% for the third quarter of 2013 from 5.10% for the second quarter of 2013, largely due the recovery of $1.1 million in foregone interest related to loans that were upgraded from non-accrual to accrual status during the third quarter of 2013.

The total cost of deposits was 0.53% for the third quarter of 2013, compared with 0.51% for the second quarter of 2013. The increase in the total cost of deposits is primarily attributable to an increase in the cost of time deposits.

Non-Interest Income

Total non-interest income was $7.8 million for the third quarter of 2013, compared to $6.6 million for the third quarter of 2012, and $8.3 million for the second quarter of 2013. The decrease from the prior quarter was primarily due to lower net gain on sales of loans during the third quarter of 2013 as the premiums for Small Business Administration ("SBA") loan sales continued to decline during the third quarter of 2013.

The $2.8 million in net gains on sales of loans recognized in the third quarter of 2013 was substantially all gains from the sale of SBA loans. During the third quarter of 2013, the Company sold $30.2 million in SBA loans, compared with $30.6 million sold during the second quarter of 2013.

Non-Interest Expense

Total non-interest expense was $17.8 million for the third quarter of 2013, compared with $18.3 million for the third quarter of 2012, and $17.1 million for the second quarter of 2013.

Total salaries and employee benefits expense was $8.8 million for the third quarter of 2013, compared with $9.4 million for the third quarter of 2012, and $9.5 million for the second quarter of 2013. The decrease from the prior quarter was primarily due to lower bonus accruals.

Other non-interest expense for the third quarter of 2013 totaled $6.3 million, compared with $4.4 million in the third quarter of 2012, and $4.9 million for the second quarter of 2013. The increase from the prior periods was primarily attributable to higher professional fees related to acquisition activity.

The Company's operating efficiency ratio was 51.7% for the third quarter of 2013, compared with 57.0% for the third quarter of 2012 and 50.1% for the second quarter of 2013.

Tax Provision

For the third quarter of 2013, the Company recorded a provision for income taxes totaling $5.4 million, reflecting an effective tax rate of 32.1%. The effective tax rate is lower than historical rates primarily due to the generation of tax credits associated with the Company's investment in affordable housing programs.

BALANCE SHEET

Total gross loans receivable, were $2.20 billion at September 30, 2013, compared to $2.09 billion at June 30, 2013. The increase in total gross loans receivable during the third quarter of 2013 was primarily due to a $103.5 million increase in the real estate secured portfolio.

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