BBCN Bancorp, Inc. (the “Company”) (NASDAQ: BBCN), the holding
company of BBCN Bank (the “Bank”), today reported net income
available to common stockholders of $21.5 million, or $0.28 per
diluted common share, for fourth quarter 2012. This compares with
net income available to common stockholders of $2.9 million, or
$0.05 per diluted common share, for fourth quarter 2011, and net
income available to common stockholders of $18.4 million, or $0.24
per diluted common share, for third quarter 2012.
For the full 2012 year, the Company posted net income available
to common stockholders of $77.6 million, or $0.99 per diluted
common share. This compares with net income available to common
stockholders of $22.5 million, or $0.53 per diluted common share,
for 2011, which reflects the operations of 11 months of the former
Nara Bancorp, Inc. and one month of combined operations following
the merger with Center Financial Corporation (“Center”), completed
November 30, 2011.
The Company also announced today that its Board of Directors
declared a quarterly cash dividend for first quarter 2013. All
stockholders of record as of February 8, 2013 will be paid a cash
dividend of $0.05 per common share, payable on or about February
22, 2013.
“We completed our first full year of operations as the leading
Korean American bank in the nation with strong performances on all
fronts,” said Alvin D. Kang, President and Chief Executive Officer.
“Fourth quarter 2012 new loan originations of $371.2 million
exceeded the strong levels of the preceding quarter. This
performance helped to mitigate the net interest margin compression
in the current interest rate environment and supported a five
percent linked quarter increase in our pre-tax pre-provision
earnings, which amounted to 2.83% of average assets on an
annualized basis. Combined with steadily improving asset quality
trends, we reported another quarter of strong core profitability to
complete the year. All-in-all, we believe BBCN is well positioned
for continued profitability and growth.”
The Company noted that the Center merger impacts the
comparability of operating results for fourth quarter 2012 versus
fourth quarter 2011 and the preceding third quarter 2012, as well
as the operating results for the full 2012 year versus 2011.
Supplemental information, which the Company believes will aid in
understanding past financial performance, is included in this press
release.
Financial
Highlights
(Dollars in
thousands)
2012 Fourth Quarter 2011 Fourth
Quarter 2012 Third Quarter Net income $ 21,527 $
4,236 $ 18,398 Net income available to common
stockholders
$ 21,527 $ 2,895 $ 18,398 Diluted earnings per share $ 0.28 $ 0.05
$ 0.24 Net interest income $ 59,646 $ 40,551 $ 58,231 Net interest
margin 4.61 % 4.52 % 4.79 % Non-interest income $ 9,859 $ 6,678 $
7,664 Non-interest expense $ 30,609 $ 31,836 $ 28,770 Net loans
receivable $ 4,229,311 $ 3,676,874 $ 4,003,542 Deposits $ 4,384,035
$ 3,940,892 $ 4,052,524 Non-accrual loans (1) $ 26,613 $ 31,213 $
29,369 ALLL to gross loans 1.56 % 1.66 % 1.62 % ALLL to non-accrual
loans (1) 251.53 % 198.49 % 224.56 % ALLL to non-performing assets
(1) 87.69 % 83.97 % 84.41 % Provision for loan losses $ 2,422 $
9,147 $ 6,900 Net charge-offs $ 1,433 $ 7,204 $ 6,453 ROA (2) 1.57
% 0.45 % 1.42 % ROE (2) 11.55 % 3.10 % 10.11 % Efficiency ratio
44.04 % 67.41 % 43.66 % (1) Excludes the guaranteed portion
of delinquent SBA loans totaling $17.6 million, $10.4 million and
$17.3 million at the close of the fourth quarter 2012, fourth
quarter 2011 and third quarter 2012, respectively. (2) Based
on net income before effects of dividends and discount accretion on
preferred stock.
Operating Results for Fourth Quarter
2012
As previously mentioned, the comparability of operating results
with past performance is impacted by the merger. The Company
believes the following supplemental information will be helpful in
understanding past financial performance. Operating results for the
three months ended December 31, 2012, September 30, 2012 and
December 31, 2011 include the following pre-tax acquisition
accounting adjustments related to the merger.
The increase (decrease) of major adjustments to pre-tax income
is summarized below. The impact which these adjustments have to
certain yields and costs are described in subsequent sections of
this release.
Three Months Ended
(In thousands)
December 31, 2012
September 30, 2012
December 31, 2011
Accretion of discount on acquired performing loans $ 4,697 $ 4,890
$ 2,429 Accretion of discount on acquired credit impaired loans
1,174 1,215 3,298 Amortization of premium on Center FHLB borrowings
92 307 419 Accretion of discount on Center subordinated debt (37 )
(37 ) (12 ) Amortization of premium on Center time deposits 375
650 315 Increase to pre-tax income $
6,301 $ 7,025 6,449
In addition to the items listed above, acquisition accounting
adjustments had the effect of reducing the yield on the securities
portfolio in fourth quarter and third quarter 2012. The acquired
securities portfolio of approximately $291 million was adjusted to
fair value of $293 million as of the merger date, resulting in
interest income on investment securities for that portfolio being
recognized at a lower average yield, compared with the yield on the
balance of the Company's securities portfolio.
Operating results were also impacted by merger and integration
related expenses, which amounted to $505,000, $183,000 and $3.2
million, for fourth quarter 2012, third quarter 2012 and fourth
quarter 2011, respectively. The Company noted that fourth quarter
2012 merger and integration related expenses primarily reflected
expenses associated with the pending Pacific International Bancorp,
Inc. acquisition.
Net Interest Income and Net Interest Margin. The
following table summarizes the reported net interest income before
provision for loan losses.
Three Months Ended
(In thousands)
12/31/2012 12/31/2011 %
change
9/30/2012 % change Net interest income
before provision for loan losses $ 59,646 $ 40,551 47 % $
58,231 2 %
Fourth quarter 2012 net interest income before provision for
loan losses rose 47% over fourth quarter 2011 and 2% over preceding
third quarter 2012, principally reflecting the higher level of
interest earning assets as a result of the net growth in loans
receivable.
The net interest margin (net interest income divided by average
interest-earning assets) and the impact of acquisition accounting
adjustments are summarized in the following table:
Three Months Ended
12/31/2012 12/31/2011 change
9/30/2012 change Net interest margin, excluding
effect of acquisition accounting adjustments 4.06 % 4.13 % (0.07 )
% 4.14 % (0.08 ) % Acquisition accounting adjustments 0.55
0.39 0.16 0.65 (0.10 ) Reported net interest
margin 4.61 % 4.52 % 0.09 % 4.79 % (0.18 ) %
Fourth quarter 2012 net interest margin was 4.61%, reflecting a
9 basis point improvement over fourth quarter 2011, largely
attributable to the accretion of discounts on acquired loans.
Excluding the effect of acquisition accounting adjustments, the
core net interest margin for fourth quarter 2012 decreased 11 basis
points from fourth quarter 2011 to 4.06%.
Compared with preceding third quarter, fourth quarter 2012 net
interest margin declined 18 basis points, largely reflecting
decreases in the weighted average yields on loans and investment
securities. Excluding the effect of acquisition accounting, the
core net interest margin for fourth quarter 2012 declined only 8
basis points from third quarter 2012.
The weighted average yield on loans and the impact of
acquisition accounting adjustments are summarized in the following
table:
Three Months Ended
12/31/2012 12/31/2011 change
9/30/2012 change The weighted average yield on loans,
excluding effect of acquisition accounting adjustments 5.24 % 5.87
% (0.63 ) % 5.39 % (0.15 ) % Acquisition accounting adjustments
0.65 0.43 0.22 0.72 (0.07 ) Reported weighted
average yield on loans 5.89 % 6.30 % (0.41 ) % 6.11 % (0.22 ) %
The weighted average yield on loans for fourth quarter 2012
decreased 41basis points from fourth quarter 2011 and 72 basis
points on a core basis excluding acquisition accounting
adjustments. The reduction in the core yield, excluding the effect
of acquisition accounting adjustments, is primarily attributed to
the significant pricing pressures in the market place over the past
year and the lower yielding acquired loan portfolio.
Compared with preceding third quarter 2012, the weighted average
yield on loans declined 22 basis points, and 15 basis points on a
core basis, excluding the acquisition accounting adjustments. The
more moderate decrease in the core yield, excluding the effect of
acquisition accounting adjustments, versus the year-over-year
comparison, reflects a stabilization in the competitive pricing
environment in the market place during fourth quarter 2012. The
weighted average yield on new loans originated during fourth
quarter 2012 was 4.54%, compared with 4.53% for third quarter
2012.
The composition of fixed and variable rate loans and the
associated weighted average yield, excluding loan discount
accretion, is summarized in the following table:
12/31/2012
12/31/2011 change
9/30/2012
change Fixed rate loans As a percentage of total loans 40 % 40 % —
% 38 % 2 % Weighted average yield 5.63 % 6.61 % (0.98 ) % 5.97 %
(0.34 ) % Variable rate loans As a percentage of total loans 60 %
60 % — % 62 % (2 ) % Weighted average yield 4.52 % 4.64 % (0.12 ) %
4.57 % (0.05 ) %
The increased composition of fixed rate loans as a percentage of
total loans reflects the high demand for fixed rate commercial real
estate loans in the current interest rate environment.
The weighted average yield on securities available for sale is
summarized in the following table:
Three Months Ended 12/31/2012
12/31/2011 change
9/30/2012
change Weighted average yield on securities
available-for-sale 2.08 % 2.65 % (0.57 )% 2.23 % (0.15 )%
The weighted average yield on securities available-for-sale for
fourth quarter 2012 declined 57 basis points from fourth quarter
2011 and 15 basis points from the preceding third quarter 2012. The
reductions are primarily attributable to the replacement of
maturing securities with lower yielding investments as market
interest rates declined.
The weighted average duration and average life of the securities
available-for-sale are summarized in the following table:
Three Months Ended 12/31/2012
12/31/2011 % change
9/30/2012
% change Weighted average duration of securities
available-for-sale in years 3.26 3.54 (7.91 )% 3.23
(0.93
)% Weighted average life of securities available-for-sale in years
3.50 3.91 (10.49 )% 3.47
(0.09
)%
The weighted average cost of deposits and the impact of
acquisition accounting adjustments are summarized in the following
table:
Three Months Ended
12/31/2012 12/31/2011 change
9/30/2012 change The weighted average cost of
deposits, excluding effect of acquisition accounting adjustments
0.55 % 0.75 % (0.20 ) % 0.59 % (0.04 ) % Acquisition accounting
adjustments (0.03 ) (0.04 ) (0.01 ) (0.07 )
0.04 Reported weighted average cost of
deposits 0.52 % 0.71 % (0.19 ) % 0.52 %
— %
The weighted average cost of deposits for fourth quarter 2012
improved 19 basis points to 0.52% from fourth quarter 2011, and
improved 20 basis points on a core basis, excluding the
amortization of premium on time deposits assumed in the merger.
Fourth quarter 2012 weighted average cost of deposits benefited
from reductions in the cost of most categories of interest-bearing
deposits.
Compared with the preceding third quarter 2012, the weighted
average cost of deposits for fourth quarter 2012 was the same, but
improved 4 basis points on a core basis, excluding the amortization
of premium on time deposits assumed in the merger.
The weighted average cost of FHLB advances and the impact of
acquisition accounting adjustments are summarized in the following
table:
Three Months Ended
12/31/2012 12/31/2011 change
9/30/2012 change The weighted average cost of FHLB
advances, excluding effect of acquisition accounting adjustments
1.40 % 3.32 % (1.92 ) % 1.87 % (0.47 ) % Acquisition accounting
adjustments (0.09 ) (0.51 ) 0.42 (0.31
) 0.22 Reported weighted average cost of FHLB
advances 1.31 % 2.81 % (1.50 ) % 1.56 % (0.25
) %
For fourth quarter 2012, the weighted average cost of FHLB
advances decreased 150 basis points to 1.31% from fourth quarter
2011, largely due to decreases in market interest rates. Excluding
acquisition accounting adjustments, the weighted average cost of
FHLB advances decreased 191 basis points, reflecting the addition
of $380.0 million in new FHLB borrowings at a weighted average rate
of 0.62%, which is substantially lower than the weighted average
rate of the rest of the borrowings. The weighted average original
maturity of the new borrowings was 2.66 years. In addition, a total
of $301.1 million of FHLB borrowings, with a weighted average rate
of 1.26%, matured during 2012.
Compared with preceding third quarter 2012, the weighted average
cost of FHLB advances decreased 25 basis points, and 47 basis
points on a core basis, excluding acquisition accounting
adjustments. During fourth quarter 2012, the Company added $100.0
million in new FHLB borrowings at a weighted average rate of 0.64%,
and the weighted average original maturity of these new borrowings
was 2.59 years. In addition, a total of $140.0 million of FHLB
borrowings, with a weighted average rate of 1.09%, matured during
fourth quarter 2012.
Non-interest Income. Total non-interest income for fourth
quarter 2012 amounted to $9.9 million, a 48% increase over $6.7
million for fourth quarter 2011, and a 29% increase over $7.7
million for third quarter 2012.
The various non-interest income items are summarized in the
following table:
Three Months Ended %
% (In thousands)
12/31/2012 12/31/2011 change
9/30/2012 change Service fees on deposit accounts $
2,916 $ 2,108 38 % $ 3,121 (7 )% Net gains on sales of SBA loans
2,754 1,017 171 % — 100 % Net gains on sale of other loans 6 63 (90
)% — 100 % Net gains on sales of securities available-for-sale —
1,219 (100 )% 133 (100 )% Net valuation gains (losses) on interest
swaps and caps 11 6 83 % 11 — Net gains (losses) on sales of OREO
(292 ) 58 (603 )% (12 ) 2,333 % Other income and fees 4,464
2,207 102 % 4,411 1 %
Total non-interest income $ 9,859 $ 6,678 48 %
$ 7,664 29 %
The 48% increase in non-interest income over fourth quarter 2011
largely reflects a full quarter of operations as a combined
Company, compared with one month of operations as a combined
Company during fourth quarter 2011.
Compared with third quarter 2012, non-interest income rose 29%
and is primarily attributed to a $2.8 million net gain on sales of
SBA loans. Given the historic high premiums currently available in
the market, the Company sold $30.8 million in SBA loans during
fourth quarter 2012 and recorded a net gain on sale of $2.8
million. The Company said it continues to consider capital,
liquidity and other factors in determining on a quarterly basis
whether to sell or hold such SBA loans, but that it expected to
sell SBA loans so long as the premiums available in the market
remain near historic highs.
Non-interest Expense. Total non-interest expense for
fourth quarter 2012 decreased 4% to $30.6 million from fourth
quarter 2011, but increased 6% when compared with preceding third
quarter 2012.
The various non-interest expense items are summarized in the
following table:
Three Months Ended %
% (In thousands)
12/31/2012 12/31/2011
change
9/30/2012 change Salaries and employee benefits $
14,143 $ 9,193 54 % $ 13,611 4 % Occupancy 3,843 4,471 (14 )% 3,910
(2 )% Furniture and equipment 1,482 1,180 26 % 1,495 (1 )%
Advertising and marketing 934 959 (3 )% 1,159 (19 )% Data
processing and communications 1,521 1,194 27 % 1,659 (8 )%
Professional fees 1,324 881 50 % 876 51 % FDIC assessment 710 1,198
(41 )% 644 10 % Merger and integration expenses 505 3,248 (84 )%
183 176 % Other 6,147 9,512 (35 )%
5,233 17 % Total non-interest expense $ 30,609 $
31,836 (4 )% $ 28,770 6 %
Salaries and benefits expense for fourth quarter 2012 increased
54% over fourth quarter 2011, due in large part to the combined
operations as BBCN for a full quarter in 2012. The number of full
time equivalent employees (FTEs) was 704, 684 and 678 as of
December 31, 2012, September 30, 2012, and December 31, 2011,
respectively. The adjusted number of FTEs, as of the merger closing
date of November 30, 2011, was 690. Compared with preceding third
quarter 2012, salaries and benefits expense increased 4%.
The Company noted that merger and integration expenses for
fourth quarter 2012 were principally associated with its previously
announced acquisition of Pacific International Bancorp, Inc., which
transaction is expected to be completed during first quarter 2013.
Merger and integration expenses for fourth quarter 2011 reflects
expenses associated with the Center merger.
Income Tax Provision. The effective tax rate for fourth
quarter 2012 was 41.0%, compared with 32.2% for fourth quarter 2011
and 39.1% for third quarter 2012.
Balance Sheet Summary
Gross loans receivable totaled $4.30 billion at December 31,
2012, an increase of 6% compared with $4.07 billion at September
30, 2012 and an increase of 15% compared with $3.74 billion at
December 31, 2011. Total loan originations for fourth quarter 2012
amounted to $371.2 million, including SBA loan originations of
$84.3 million.
In comparison, new loan production during third quarter 2012
equaled $312.7 million, including SBA loan originations of $63.7
million.
Sales of SBA loans to the secondary market and gains derived
from those sales are based substantially on the production of SBA
7(a) loans. Production of SBA 7(a) loans amounted to $27.5 million
for fourth quarter 2012, compared with $33.9 million for third
quarter 2012. During fourth quarter 2012, the Company sold $30.8
million of its SBA loans held for sale.
Aggregate loan pay-offs, pay-downs, amortization and other
adjustments totaled $144.5 million during fourth quarter 2012,
compared with $98.0 million during fourth quarter 2011 and $118.2
million during third quarter 2012.
Total deposits amounted to $4.38 billion at December 31, 2012,
reflecting an increase of 8% over $4.05 billion at September 30,
2012, and an 11% increase over $3.94 billion at December 31, 2011.
The increases reflect higher balances in non-interest bearing
demand deposits, money market accounts and jumbo time deposits. The
growth in total deposits was partially attributed to the successful
completion of a fourth quarter 2013 marketing campaign celebrating
BBCN's first anniversary. In addition, the Company added a net $139
million in wholesale deposits to support strong loan production
activities and in anticipation of potential deposit outflows as a
result of the expiration of the Federal Deposit Insurance
Corporation's Temporary Account Guarantee (TAG) program, effective
December 31, 2012. Non-interest bearing deposits at December 31,
2012 totaled $1.18 billion, or 27% of total deposits, compared with
$1.11 billion at September 30, 2012, or 27% of total deposits.
Credit Quality
The provision for loan losses for fourth quarter 2012 was $2.4
million, compared with $9.1 million for fourth quarter 2011 and
$6.9 million for preceding third quarter 2012. The fourth quarter
2012 provision reflects lower levels of net charge-offs relative to
comparable quarters and improving historic loss rates.
For a more detailed understanding of the changes in the
Allowance for Loan and Lease Losses (“ALLL”), the composition of
the ALLL has been segmented for disclosure purposes between loans
accounted for under the amortized cost method (referred to as
“BBCN” loans) and loans acquired in the merger (referred to as
“Acquired” loans). The acquired loans are further segregated
between performing and credit impaired loans.
The composition of ALLL for the three months ended December 31,
2012, September 30, 2012 and December 31, 2011 is as follows:
(dollars in thousands)
12/31/2012 9/30/2012
12/31/2011 BBCN loans (1) $ 61,003 $ 61,835
$ 61,952 Acquired loans - Performing Loans (2) 1,404 2,005 —
Acquired loans - Credit Impaired Loans (2) 4,534
2,112 — Total ALLL $ 66,941 $
65,952 $ 61,952 Gross loans, net of
deferred loan fees and costs $ 4,296,252 $ 4,069,494 $ 3,738,826
Loss coverage ratio 1.56 % 1.62 % 1.66
% (1) BBCN loans include Nara loans outstanding at
acquisition date, former Center loans that were refinanced and new
BBCN loans originated post merger. (2) Acquired loans were marked
to fair value at acquisition date, and their allowance for loan
losses reflect provisions for credit deterioration since the
acquisition date.
Following are the Special Mention, Classified and Total
Watchlist loan balances as of December 31 and September 30,
2012:
(dollars in
thousands)
12/31/2012
9/30/2012 Special Mention (1) $ 77,142 $ 94,659
Classified (1) $ 198,646 $ 188,354 Total Watchlist $ 275,788
$ 283,013 (1) Balances include the acquired loans
which were marked to fair value at November 30, 2011. For loan
classification purposes, the loan grading did not change as a
result of the merger.
Non-performing loans (defined as loans past due 90 days or more
and on non-accrual status, acquired loans past due 90 days or more
and on accrual status, and accruing restructured loans) at December
31, 2012 was 73.6 million, or 1.71% of total loans, compared with
$74.0 million, or 1.82% of total loans, at September 30, 2012. The
reduction in the dollar amount of non-performing loans is
attributed to charge-offs and pay-offs during the quarter.
Non-performing assets at December 31, 2012 were $76.3 million,
or 1.35% of total assets, compared with $78.1 million, or 1.47% of
total assets, at September 30, 2012, due largely to the decrease in
other real estate owned.
Net loan charge-offs during fourth quarter 2012 totaled $1.4
million, or 0.13% of average loans on an annualized basis, compared
with $6.5 million, or 0.64%, during third quarter 2012.
The allowance for loan losses at December 31, 2012 was $66.9
million, or 1.56% of gross loans receivable (excluding loans held
for sale), compared with $66.0 million, or 1.62%, at September 30,
2012. The coverage ratio of the allowance for loan losses to
non-performing loans (excluding acquired loans past due 90 days or
more on accrual status) was 119% at December 31, 2012, compared
with 128% at September 30, 2012.
Impaired loans (defined as loans for which it is probable that
not all principal and interest payments due will be collectible in
accordance with the contractual terms) increased modestly to $85.4
million at December 31, 2012 from $82.3 million at September 30,
2012. The increase was primarily related to two commercial real
estate loans aggregating $4.6 million.
Specific reserves for impaired loans were $9.2 million, or 10.7%
of the aggregate impaired loan amount, at December 31, 2012,
compared with $8.7 million, or 10.6% of the aggregate impaired loan
amount, at September 30, 2012. Excluding specific reserves for
impaired loans, the allowance coverage on the remaining loan
portfolio was 1.37% at December 31, 2012, compared with 1.44% at
September 30, 2012.
Capital
At December 31, 2012, the Company continued to exceed all
regulatory capital requirements to be classified as a
“well-capitalized” institution, as summarized in the following
table.
12/31/2012
9/30/2012 12/31/2011 Leverage Ratio (1)
12.76 % 13.15 % 19.81 % Tier 1
Risk-based Ratio 14.91 % 15.22 % 18.15 % Total Risk-based Ratio
16.16 % 16.48 % 19.41 % (1) The calculation for the Leverage
Ratio utilizes the daily average balance of total assets in the
denominator, as opposed to the period end balances utilized in the
calculation of the other capital ratios. Accordingly, the Company
believes that the Leverage Ratio reported for fourth quarter 2011
is not necessarily representative of the Company's Leverage Ratio
at the end of 2011. On a pro forma basis, utilizing the daily
average balance of total assets in the month of December following
the completion of the merger, the Leverage Ratio was 14.00%.
Tangible common equity per share and as a percentage of tangible
assets improved over prior comparable periods, as summarized in the
following table:
12/31/2012
9/30/2012 12/31/2011 Tangible
common equity per share (1) $ 8.43 $ 8.21
$ 7.43 Tangible common equity to tangible assets (1) 11.86 %
12.23 % 11.42 % (1) Tangible common equity to tangible
assets is a non-GAAP financial measure that represents common
equity less goodwill and net other intangible assets divided by
total assets less goodwill and net other intangible assets.
Management reviews tangible common equity to tangible assets in
evaluating the Company's capital levels and has included this ratio
in response to market participant interest in tangible common
equity as a measure of capital. See the accompanying financial
information for a reconciliation of the ratio of tangible common
equity to tangible assets with stockholders' equity and total
assets.
During fourth quarter 2012, the Company announced a definitive
agreement to acquire Seattle-based Pacific International Bancorp,
Inc. in an all stock transaction valued at approximately $8.2
million. Pacific International had total assets of $197.6 million
as of September 30, 2012, and its primary subsidiary, Pacific
International Bank, a state-chartered bank, has four bank locations
in the Seattle metropolitan area. The transaction is expected to be
completed during first quarter 2013.
The transaction is subject to regulatory approval, the approval
of the shareholders of Pacific International, and other customary
closing conditions.
As previously announced, upon the departure of President and
Chief Executive Officer Alvin D. Kang on January 31, 2013,
Executive Vice President and Chief Operating Officer Bonita I. Lee
will have the additional title of Acting President and lead an
Executive Council, which will carry out the duties of the Chief
Executive until an appointment is made by the Board of
Directors.
“We began 2013 with tremendous momentum as the premier Korean
American bank in the nation and expect to deliver another solid
year of profitability,” said Ms. Lee. “We look forward to
completing the merger of Pacific International later this quarter
and believe BBCN is well poised to capitalize on strategic
opportunities.”
Additional Information and Where to Find It
In connection with the proposed merger, BBCN Bancorp, Inc. filed
a Registration Statement with the Securities and Exchange
Commission (“SEC”) on Form S-4 that includes a proxy
statement/prospectus, as well as other relevant documents
concerning the proposed transaction. Shareholders are urged to read
the Registration Statement, including the proxy
statement/prospectus regarding the proposed transaction, and any
other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they contain
important information. Shareholders may obtain a free copy of the
proxy statement/prospectus, as well as other filings containing
information about BBCN Bancorp at the SEC’s Internet site
(www.sec.gov). Shareholders may also obtain these documents, free
of charge, by directing a request to BBCN Bancorp, Attention:
Investor Relations, 3731 Wilshire Blvd, Suite 1000, Los Angeles,
Calif. 90020, or on the BBCN website at www.bbcnbank.com in the
“Investor Relations” section under the heading “SEC Filings.”
Investor Conference Call
The Company will host an investor conference call on Tuesday,
January 29, 2013 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern
Time to review financial results for fourth quarter 2012. Investors
and analysts may access the conference call by dialing 866-713-8562
(domestic) or 617-597-5310 (international), passcode 57196640.
Other interested parties are invited to listen to a live webcast of
the call available at the Investor Relations section of BBCN
Bancorp's website at www.BBCNbank.com.
After the live webcast, a replay will be archived in the
Investor Relations section of BBCN Bancorp's website for one year.
A telephonic replay of the call will be available at 888-286-8010
(domestic) or 617-801-6888 (international) through February 5,
2013, passcode 38035327.
About BBCN Bancorp, Inc.
BBCN Bancorp, Inc. is the parent company of BBCN Bank, the
largest Korean American bank in the nation with $5.6 billion in
assets as of December 31, 2012. The Company is a result of the
merger of equals of Nara Bancorp, Inc. and Center Financial
Corporation completed on November 30, 2011. Headquartered in Los
Angeles and serving a diverse mix of customers mirroring its
communities, BBCN operates 40 branches in California, New York, New
Jersey, Washington and Illinois, along with five loan production
offices in Seattle, Denver, Dallas, Atlanta and Northern
California. BBCN specializes in core business banking products for
small and medium-sized businesses, with an emphasis in commercial
real estate and business lending, SBA lending and international
trade financing. BBCN Bank is a California-chartered bank and its
deposits are insured by the FDIC to the extent provided by law.
BBCN is an Equal Opportunity Lender.
Forward-Looking Statements
This press release contains forward-looking statements,
including statements about future operations and projected
full-year financial results that are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such forward looking statements.
These risks and uncertainties include but are not limited to
economic, competitive, governmental and technological factors
affecting the Company's operations, markets, products, services,
and pricing. Readers should carefully review the risk factors and
the information that could materially affect the Company's
financial results and business, described in documents the Company
files from time to time with the Securities and Exchange
Commission, including its quarterly reports on Form 10-Q and Annual
Reports on Form 10-K, and particularly the discussions of business
considerations and certain factors that may affect results of
operations and stock price set forth therein. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. The Company
undertakes no obligation to revise or publicly release the results
of any revision to these forward-looking statements.
BBCN Bancorp, Inc. Consolidated Statements
of Financial Condition Unaudited (Dollars in Thousands,
Except per Share Data)
Assets 12/31/2012
9/30/2012 % change
12/31/2011 %
change Cash and due from banks $ 312,916 $ 229,643 36 % $
300,110 4 % Term federal funds sold - - 0 % 40,000 -100 %
Securities available for sale, at fair value 704,403 687,059 3 %
740,920 -5 % Federal Home Loan Bank and Federal Reserve Bank stock
22,495 23,500 -4 % 27,373 -18 % Loans held for sale, at the lower
of cost or fair value 51,635 58,484 -12 % 42,407 22 % Loans
receivable 4,296,252 4,069,494 6 % 3,738,826 15 % Allowance for
loan losses (66,941 ) (65,952 ) -1 %
(61,952 ) -8 % Net loans receivable
4,229,311 4,003,542 6 %
3,676,874 15 % Accrued interest receivable
12,117 12,881 -6 % 13,439 -10 % Premises and equipment, net 22,609
22,672 0 % 20,913 8 % Bank owned life insurance 43,767 43,416 1 %
42,514 3 % Goodwill 89,878 89,882 0 % 90,473 -1 % Other intangible
assets, net 3,033 3,335 -9 % 4,276 -29 % Other assets
148,497 157,565 -6 %
167,305 -11 % Total assets $ 5,640,661
$ 5,331,979 6 % $ 5,166,604
9 %
Liabilities Deposits $ 4,384,035 $
4,052,524 8 % $ 3,940,892 11 % Borrowings from Federal Home Loan
Bank 420,722 460,815 -9 % 344,402 22 % Subordinated debentures
41,846 41,809 0 % 52,102 -20 % Accrued interest payable 4,355 5,451
-20 % 6,519 -33 % Other liabilities 38,599
36,925 5 % 26,750
44 % Total liabilities 4,889,557
4,597,524 6 % 4,370,665
12 %
Stockholders' Equity Preferred stock,
$0.001 par value; authorized 10,000,000 undesignated shares; issued
and outstanding 0 shares, 0 shares and 122,000 shares as of
December 31, 2012, September 30, 2012 and December 31, 2011,
respectively Series A, Fixed Rate Cumulative Perpetual Preferred
Stock, issued and outstanding 0 shares, 0 shares and 67,000 shares
at December 31, 2012, September 30, 2012 and December 31, 2011,
respectively - - 0 % 65,158 -100 % Series B, Fixed Rate Cumulative
Perpetual Preferred Stock, issued and outstanding 0 shares, 0
shares and 55,000 shares at December 31, 2012, September 30, 2012
and December 31, 2011, respectively - - 0 % 54,192 -100 % Common
stock, $0.001 par value; authorized, 150,000,000 shares at December
31, 2012, September 30, 2012 and December 31, 2011; issued and
outstanding, 78,041,511, 78,016,260 and 77,984,252 at December 31,
2012, September 30, 2012 and December 31, 2011, respectively 78 78
0 % 78 0 % Capital surplus 525,354 524,608 0 % 524,639 0 % Retained
earnings 216,590 198,964 9 % 142,909 52 % Accumulated other
comprehensive income, net 9,082 10,805
-16 % 8,963 1 % Total
stockholders' equity 751,104 734,455
2 % 795,939 -6 %
Total liabilities and stockholders' equity $ 5,640,661
$ 5,331,979 6 % $ 5,166,604
9 %
Three
Months Ended Twelve Months Ended 12/31/2012
12/31/2011 % change
9/30/2012
% change
12/31/2012 12/31/2011 %
change Interest income:
Interest and fees on loans $ 63,107 $ 44,417 42 % $ 61,553 3 % $
250,583 $ 145,554 72 % Interest on securities 3,540 3,763 -6 %
3,782 -6 % 16,480 15,501 6 % Interest on federal funds sold and
other investments 285 300
-5 % 120 138 % 822
840 -2 % Total interest income
66,932 48,480 38 %
65,455 2 % 267,885
161,895 65 % Interest expense:
Interest on deposits 5,492 5,047 9 % 5,214 5 % 21,354 20,245 5 %
Interest on other borrowings 1,794
2,882 -38 % 2,010
-11 % 8,293 11,832
-30 % Total interest expense 7,286
7,929 -8 % 7,224
1 % 29,647 32,077
-8 % Net interest income before provision for loan losses
59,646 40,551 47 % 58,231 2 % 238,238 129,818 84 % Provision for
loan losses 2,422 9,147
-74 % 6,900 -65 %
19,104 27,939 -32 % Net interest
income after provision for loan losses 57,224
31,404 82 % 51,331
11 % 219,134 101,879
115 % Non-interest income: Service fees on
deposit accounts 2,916 2,108 38 % 3,121 -7 % 12,466 6,370 96 % Net
gains (loss) on sales of SBA loans 2,754 1,017 171 % - 100 % 8,180
7,354 11 % Net gains (loss) on sales of other loans 6 63 -90 % -
100 % 152 33 361 % Net gains on sales of securities
available-for-sale - 1,219 -100 % 133 -100 % 949 1,289 -26 % Net
valuation gains (losses) on interest swaps and caps 11 6 83 % 11 0
% 35 (114 ) 131 % Net gains(loss) on sales of OREO (292 ) 58 -603 %
(12 ) 2333 % (251 ) 193 -230 % Other income and fees 4,464
2,207 102 %
4,411 1 % 17,859
8,005 123 % Total non-interest income 9,859
6,678 48 %
7,664 29 % 39,390
23,130 70 % Non-interest expense: Salaries and
employee benefits 14,143 9,193 54 % 13,611 4 % 56,491 31,629 79 %
Occupancy 3,843 4,471 -14 % 3,910 -2 % 15,631 11,833 32 % Furniture
and equipment 1,482 1,180 26 % 1,495 -1 % 5,663 4,033 40 %
Advertising and marketing 934 959 -3 % 1,159 -19 % 5,076 2,486 104
% Data processing and communications 1,521 1,194 27 % 1,659 -8 %
6,364 3,913 63 % Professional fees 1,324 881 50 % 876 51 % 3,882
2,971 31 % FDIC assessment 710 1,198 -41 % 644 10 % 2,442 4,347 -44
% Merger and integration expenses 505 3,248 -84 % 183 176 % 3,809
4,713 -19 % Other 6,147 9,512
-35 % 5,233 17 %
21,533 16,309 32 % Total
non-interest expense 30,609 31,836
-4 % 28,770
6 % 120,891 82,234 47 %
Income before income taxes 36,474 6,246 484 % 30,225 21 % 137,633
42,775 222 % Income tax provision 14,947
2,010 644 % 11,827
26 % 54,410 15,660
247 %
Net income $ 21,527
$ 4,236 408 %
$ 18,398 17
% $ 83,223 $
27,115 207 % Dividends and
discount accretion on preferred stock $ - $ (1,341 ) -100 % $ - 0 %
$ (5,640 ) $ (4,568 ) 23 %
Net income available to common
stockholders $ 21,527 $
2,895 644 %
$ 18,398 17 %
$ 77,583 $ 22,547
244 % Earnings Per Common Share: Basic
$ 0.28 $ 0.05 $ 0.24 $ 0.99 $ 0.53 Diluted $ 0.28 $ 0.05 $ 0.24 $
0.99 $ 0.53 Average Shares Outstanding: Basic 78,033,439
54,476,520 78,015,960 78,012,253 42,187,110 Diluted 78,113,083
54,487,415 78,103,795 78,091,116 42,210,600
Three
months ended Twelve Months Ended 12/31/2012
9/30/2012 6/30/2012
3/31/2012 12/31/2011 12/31/2012
12/31/2011 Net Income $ 21,527 $ 18,398 $ 19,364 $
23,934 $ 4,236 $ 83,223 $ 27,115 Add back: Income tax 14,947 11,827
12,101 15,535 2,010 54,410 15,660 Add back: Provision for loan
losses 2,422 6,900
7,182 2,600 9,147
19,104 27,939
Pre-tax,
pre-provision income (PTPP) 1 $ 38,896
$ 37,125 $
38,647 $ 42,069
$ 15,393 $ 156,737
$ 70,714 PTPP to average assets
(annualized) 2.83 % 2.87 %
3.03 % 3.27 % 1.62 %
3.00 % 2.23 % 1 While pre-tax,
pre-provision income is a non-GAAP performance measure, we believe
it is a useful measure in analyzing underlying performance trends,
particularly in times of economic stress. It is the level of
earnings adjusted to exclude the impact of income tax and provision
expense.
(Annualized)
At or for the Three Months
Ended
(Annualized)
At or for the Twelve Months
Ended
Profitability measures:
12/31/2012 12/31/2011
9/30/2012 12/31/2012
12/31/2011 ROA 2 1.57 % 0.45 % 1.42 % 1.59 %
0.86 % ROE 2 11.55 % 3.10 % 10.11 % 10.73 % 6.54 % Return on
average tangible equity 2,3 13.20 % 3.31 % 11.60 % 12.20 % 6.72 %
Net interest margin 4.61 % 4.52 % 4.79 % 4.88 % 4.29 % Efficiency
ratio 44.04 % 67.41 % 43.66 % 43.54 % 53.77 % 2 based on net
income before effect of dividends and discount accretion on
preferred stock
3 Average tangible equity is calculated by
subtracting average goodwill and average other intangibles from
average stockholders' equity. This is non-GAAP measure that we
believe provides investors with information that is useful in
understanding our financial performance and position.
Three Months Ended
Three Months Ended Three Months Ended
12/31/2012 12/31/2011 9/30/2012
Interest Annualized
Interest Annualized Interest Annualized
Average Income/ Average Average
Income/ Average Average Income/
Average Balance Expense Yield/Cost
Balance Expense Yield/Cost Balance
Expense Yield/Cost (Dollars in thousands)
(Dollars in thousands) (Dollars in thousands)
INTEREST EARNING ASSETS: Gross loans, includes loans
held for sale $ 4,262,167 $ 63,107 5.89 % $ 2,796,523 $ 44,417 6.30
% $ 4,007,402 $ 61,553 6.11 % Securities available for sale 681,296
3,540 2.08 % 568,111 3,763 2.65 % 679,764 3,782 2.23 % FRB and FHLB
stock and other investments 206,348 285 0.54 % 180,585 272 0.60 %
155,590 120 0.30 % Federal funds sold 43 -
0.30 % 13,761 28 0.81 % - -
N/A Total interest earning assets $ 5,149,854 $ 66,932
5.17 % $ 3,558,980 $ 48,480 5.41 % $ 4,842,756 $
65,455 5.38 %
INTEREST BEARING LIABILITIES:
Deposits: Demand, interest-bearing $ 1,192,546 $ 1,818 0.61 % $
912,825 $ 1,822 0.79 % $ 1,156,915 $ 1,775 0.61 % Savings 181,283
793 1.74 % 143,011 743 2.06 % 184,219 820 1.77 % Time deposits:
$100,000 or more 988,157 1,635 0.66 % 530,865 736 0.55 % 843,388
1,533 0.72 % Other 717,419 1,246 0.69 %
608,111 1,746 1.14 % 672,861 1,086
0.64 % Total time deposits 1,705,576 2,881
0.67 % 1,138,976 2,482 0.86 %
1,516,249 2,619 0.69 % Total interest bearing
deposits 3,079,405 5,492 0.71 %
2,194,812 5,047 0.91 % 2,857,383 5,214
0.73 % FHLB advances 422,518 1,397 1.31 % 332,324 2,352 2.81
% 407,325 1,603 1.56 % Other borrowings 40,231 397
3.86 % 44,551 530 4.66 % 40,407
407 3.95 % Total interest bearing liabilities
3,542,154 $ 7,286 0.82 % 2,571,687 $ 7,929
1.22 % 3,305,115 $ 7,224 0.87 % Non-interest bearing
demand deposits 1,155,905 632,785 1,104,101
Total funding liabilities / cost of funds $ 4,698,059 0.62 % $
3,204,472 0.98 % $ 4,409,216 0.65 % Net interest income / net
interest spread $ 59,646 4.35 % $ 40,551 4.19 % $
58,231 4.51 % Net interest margin 4.61 % 4.52 % 4.79 % Net
interest margin, excluding effect of non-accrual loan
income(expense) 4.63 % 4.54 % 4.79 % Net interest margin, excluding
effect of non-accrual loan income(expense) and prepayment fee
income 4.60 % 4.54 % 4.78 % Non-accrual loan income
(reversed) recognized $ (205 ) $ (184 ) $ (44 ) Prepayment fee
income received 313 49 119
Net $ 108 $ (135 ) $ 75 Cost of
deposits: Non-interest bearing demand deposits $ 1,155,905 $ - $
632,785 $ - $ 1,104,101 $ - Interest bearing deposits
3,079,405 5,492 0.71 % 2,194,812 5,047
0.91 % 2,857,383 5,214 0.73 % Total
deposits $ 4,235,310 $ 5,492 0.52 % $ 2,827,597 $ 5,047
0.71 % $ 3,961,484 $ 5,214 0.52 %
Twelve Months Ended
Twelve Months Ended 12/31/2012
12/31/2011 Interest
Annualized Interest Annualized Average
Income/ Average Average Income/
Average Balance Expense Yield/Cost
Balance Expense Yield/Cost (Dollars in
thousands) (Dollars in thousands) INTEREST EARNING
ASSETS: Gross loans, includes loans held for sale $
3,974,626 $ 250,583 6.30% $ 2,352,253 $ 145,554 6.19% Securities
available for sale 694,719 16,480 2.37% 520,460 15,501 2.98% FRB
and FHLB stock and other investments 205,743 744 0.36% 148,339 812
0.55% Federal funds sold 11,342 78 0.68% 3,469 28 0.81% Total
interest earning assets $ 4,886,430 $ 267,885 5.48% $ 3,024,521 $
161,895 5.35%
INTEREST BEARING LIABILITIES: Deposits:
Demand, interest-bearing $ 1,191,548 $ 7,566 0.63% $ 751,783 $
6,322 0.84% Savings 187,301 3,364 1.80% 130,568 2,945 2.26% Time
deposits: $100,000 or more 851,971 6,064 0.71% 383,271 1,923 0.50%
Other 691,579 4,361 0.63% 619,509 9,055 1.46% Total time deposits
1,543,550 10,425 0.68% 1,002,780 10,978 1.09% Total interest
bearing deposits 2,922,399 21,355 0.73% 1,885,131 20,245 1.07% FHLB
advances 374,938 6,229 1.66% 314,216 9,774 3.11% Other borrowings
44,535 2,064 4.56% 44,971 2,058 4.51% Total interest bearing
liabilities 3,341,872 $ 29,648 0.89% 2,244,318 $ 32,077 1.43%
Non-interest bearing demand deposits 1,067,002 475,655 Total
funding liabilities / cost of funds $ 4,408,874 0.67% $ 2,719,973
1.18% Net interest income / net interest spread $ 238,237 4.59% $
129,818 3.92% Net interest margin 4.88% 4.29% Net interest margin,
excluding effect of non-accrual loan income(expense) 4.90% 4.31%
Net interest margin, excluding effect of non-accrual loan
income(expense) and prepayment fee income 4.88% 4.29%
Non-accrual loan income (reversed) recognized $ (998) $ (368)
Prepayment fee income received 746 487 Net $ (252) $ 119
Cost of deposits: Non-interest bearing demand deposits $ 1,067,002
$ - $ 475,655 $ - Interest bearing deposits 2,922,399 21,355 0.73%
1,885,131 20,245 1.14% Total deposits $ 3,989,401 $ 21,355 0.54% $
2,360,786 $ 20,245 0.92%
For the Three Months Ended For the
Twelve Months Ended 12/31/2012 12/31/2011
% change
9/30/2012 % change
12/31/2012 12/31/2011 % change
AVERAGE BALANCES Gross loans,
includes loans held for sale $ 4,262,167 $ 2,796,523 52 % $
4,007,402 6 % 3,974,626 2,352,253 69 % Investments 887,687 762,457
16 % 835,354 6 % 911,804 672,268 36 % Interest-earning assets
5,149,854 3,558,980 45 % 4,842,756 6 % 4,886,430 3,024,521 62 %
Total assets 5,490,540 3,795,253 45 % 5,179,186 6 % 5,228,557
3,168,124 65 % Interest-bearing deposits 3,079,405 2,194,812
40 % 2,857,383 8 % 2,922,399 1,885,131 55 % Interest-bearing
liabilities 3,542,154 2,571,687 38 % 3,305,115 7 % 3,341,872
2,244,318 49 % Non-interest-bearing demand deposits 1,155,905
632,785 83 % 1,104,101 5 % 1,067,002 475,655 124 % Stockholders'
Equity 745,468 547,160 36 % 728,038 2 % 775,718 414,768 87 % Net
interest earning assets 1,607,700 987,293 63 % 1,537,641 5 %
1,544,558 780,203 98 %
LOAN PORTFOLIO COMPOSITION:
12/31/2012 9/30/2012 % change
12/31/2011 % change Commercial loans $
1,073,625 $ 1,076,262 0 % $ 996,260 8 % Real estate loans 3,174,759
2,940,866 8 % 2,678,679 19 % Consumer and other loans 49,954
54,442 -8 %
66,631 -25 % Loans outstanding 4,298,338 4,071,570 6
% 3,741,570 15 % Unamortized deferred loan fees - net of costs
(2,086 ) (2,076 ) 0 %
(2,744 ) 24 % Loans, net of deferred loan fees and
costs 4,296,252 4,069,494 6 % 3,738,826 15 % Allowance for loan
losses (66,941 ) (65,952 ) -1 %
(61,952 ) -8 % Loan receivable, net $
4,229,311 $ 4,003,542 6 %
$ 3,676,874 15 %
REAL ESTATE LOANS BY
PROPERTY TYPE: 12/31/2012 9/30/2012
% change
12/31/2011 % change Retail
buildings $ 868,567 $ 852,968 2 % $ 788,384 10 % Hotels/motels
609,076 502,186 21 % 432,206 41 % Gas stations/ car washes 428,997
431,100 0 % 408,812 5 % Mixed-use facilities 340,433 278,253 22 %
198,916 71 % Warehouses 294,421 302,792 -3 % 261,874 12 %
Multifamily 142,610 129,192 10 % 129,181 10 % Other 490,655
444,375 10 %
459,306 7 % Total $ 3,174,759 $
2,940,866 8 % $ 2,678,679
19 %
DEPOSIT COMPOSITION 12/31/2012
9/30/2012 % Change 12/31/2011
% Change Non-interest-bearing demand deposits $
1,184,285 $ 1,105,161 7 % $ 984,350 20 % Money market and other
1,248,304 1,145,304 9 % 1,237,378 1 % Saving deposits 180,686
185,709 -3 % 198,063 -9 % Time deposits of $100,000 or more
1,088,611 892,941 22 % 759,923 43 % Other time deposits
682,149 723,409 -6 %
761,178 -10 % Total deposit balances $
4,384,035 $ 4,052,524 8 %
$ 3,940,892 11 %
DEPOSIT COMPOSITION
(%) 12/31/2012 9/30/2012
12/31/2011 Non-interest-bearing demand deposits 27.0 % 27.3
% 25.0 % Money market and other 28.5 % 28.4 % 31.4 % Saving
deposits 4.1 % 4.6 % 5.0 % Time deposits of $100,000 or more 24.8 %
22.0 % 19.3 % Other time deposits 15.6 % 17.9
% 19.3 % Total deposit balances 100.0 %
100.0 % 100.0 %
CAPITAL RATIOS
12/31/2012 9/30/2012
12/31/2011 Total stockholders' equity $ 751,104
$ 734,455 $ 795,939 Tier 1 risk-based
capital ratio 14.91 % 15.22 % 18.15 % Total risk-based capital
ratio 16.16 % 16.48 % 19.41 % Tier 1 leverage ratio 12.76 % 13.15 %
19.81 % Book value per common share $ 9.62 $ 9.41 $ 8.64 Tangible
common equity per share4 $ 8.43 $ 8.21 $ 7.43 Tangible common
equity to tangible assets4 11.86 % 12.23 % 11.42 % 4
Tangible common equity to tangible assets is a non-GAAP financial
measure that represents common equity less goodwill and other
intangible assets, net divided by total assets less goodwill and
other intangible assets, net. Management reviews tangible common
equity to tangible assets in evaluating the Company's capital
levels and has included this ratio in response to market
participant interest in tangible common equity as a measure of
capital.
Reconciliation of GAAP financial
measures to non-GAAP financial measures:
12/31/2012 9/30/2012
12/31/2011 Total stockholders' equity $ 751,104 $
734,455 $ 795,939 Less: Preferred stock, net of discount - -
(119,350 ) Common stock warrant (378 ) (378 ) (2,760 ) Goodwill and
other intangible assets, net (92,911 ) (93,217
) (94,749 ) Tangible common equity $ 657,815
$ 640,860 $ 579,080 Total assets
$ 5,640,661 $ 5,331,979 $ 5,166,604 Less: Goodwill and other
intangible assets, net (92,911 ) (93,217 )
(94,749 ) Tangible assets $ 5,547,750 $
5,238,762 $ 5,071,855 Common shares
outstanding 78,041,511 78,016,260 77,984,252 Tangible common
equity to tangible assets 11.86 % 12.23 % 11.42 % Tangible common
equity per share $ 8.43 $ 8.21 $ 7.43
For the
Three Months Ended For the Twelve Months Ended
ALLOWANCE FOR LOAN LOSSES: 12/31/2012
9/30/2012 6/30/2012
3/31/2012 12/31/2011 12/31/2012
12/31/2011 Balance at beginning of period $ 65,952 $ 65,505
$ 62,309 $ 61,952 $ 60,009 $ 61,952 $ 62,320 Provision for loan
losses 2,422 6,900 7,182 2,600 9,147 19,104 27,939 Recoveries 587
1,316 1,623 1,139 524 4,665 3,892 Charge offs (2,020 )
(7,769 ) (5,609 )
(3,382 ) (7,728 ) (18,780 )
(32,199 ) Balance at end of period $ 66,941 $ 65,952
$ 65,505 $ 62,309
$ 61,952 $ 66,941 $ 61,952 Net
charge-off/average gross loans (annualized) 0.13 % 0.64 % 0.41 %
0.24 % 1.03 % 0.36 % 1.20 %
For the Three Months
Ended For the Twelve Months Ended NET CHARGED OFF
LOANS BY TYPE 12/31/2012 9/30/2012
6/30/2012 3/31/2012 12/31/2011
12/31/2012 12/31/2011 Real estate loans
$ 651 $ 1,101 $ 1,378 $ 1,610 $ 3,867 $ 4,740 $ 20,858 Commercial
loans 627 5,403 2,158 631 3,350 8,819 7,437 Consumer loans
155 (51 ) 451
2 (13 ) 556
12 Total net charge-offs $ 1,433 $
6,453 $ 3,987 $ 2,243
$ 7,204 $ 14,115 $ 28,307
NON-PERFORMING ASSETS 12/31/2012
9/30/2012 6/30/2012 3/31/2012
12/31/2011 Delinquent loans 90 days or more on
non-accrual status $ 26,613 $ 29,369 $ 39,567 $ 39,651 $ 31,213
Delinquent loans 90 days or more on accrual status5, 7 17,184
22,454 20,708 18,192 16,169 Accruing restructured loans
29,839 22,175 22,994
24,106 18,775
Total non-performing loans 73,636 73,998
83,269 81,949 66,157 Other real estate owned
2,698 4,135 6,712
5,641 7,625
Total non-performing assets $ 76,334
$ 78,133 $ 89,981
$ 87,590 $
73,782 Non-performing assets/ total assets 1.35 %
1.47 % 1.78 % 1.43 % 1.43 % Non-performing assets/ gross loans
& OREO 1.78 % 1.92 % 2.32 % 1.97 % 1.97 % Non-performing
assets/ total capital 10.16 % 10.64 % 12.58 % 9.27 % 9.27 %
Non-performing loans/gross loans 1.71 % 1.82 % 2.15 % 1.77 % 1.77 %
Non-accrual loans/gross loans 0.62 % 0.72 % 1.02 % 0.83 % 0.83 %
Allowance for loan losses/ gross loans 1.56 % 1.62 % 1.69 % 1.66 %
1.66 % Allowance for loan losses/ non-accrual loans 251.53 % 224.56
% 165.55 % 157.14 % 198.48 % Allowance for loan losses/
non-performing loans (excludes delinquent loans 90 days or more on
accrual status5) 118.58 % 127.95 % 104.71 % 97.73 % 123.93 %
Allowance for loan losses/ non-performing assets 87.69 % 84.41 %
72.80 % 71.14 % 83.97 % 5 All such loans represent acquired loans
that were originally recorded at fair value upon acquisition. These
loans are considered to be accruing as we can reasonably estimate
future cash flows on acquired loans and we expect to fully collect
the carrying value of these loans. Therefore, we are accreting the
difference between the carrying value of these loans and their
expected cash flows.
BREAKDOWN OF ACCRUING
RESTRUCTURED LOANS BY TYPE: 12/31/2012
9/30/2012 6/30/2012 3/31/2012
12/31/2011 Retail buildings $ 3,301 $ 1,915 $ 1,526 $
804 $ 586 Hotels/motels 8,774 8,841 8,909 8,425 9,481 Gas stations/
car washes - - - - - Mixed-use facilities - - 2,312 3,254 947
Warehouses 494 1,045 1,052 1,060 - Multifamily 3,247 - - - - Other6
14,023 10,374 9,195
10,563 7,761 Total $ 29,839 $
22,175 $ 22,994 $ 24,106 $ 18,775 6
Includes commercial business and other loans
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE
12/31/2012 9/30/2012 6/30/2012
3/31/2012 12/31/2011
Legacy 30 - 59 days $ 968 $ 3,056 $ 5,479 $ 3,062 $ 2,842 60
- 89 days 350 517 833
3,747 507 Total delinquent loans less
than 90 days past due - legacy7 $ 1,318 $ 3,573 $
6,312 $ 6,809 $ 3,349
Acquired
30 - 59 days $ 6,777 $ 4,062 $ 3,601 $ 6,422 $ 10,729 60 - 89 days
15,204 2,438 6,080
3,075 8,344 Total delinquent loans less than
90 days past due - acquired7 $ 21,981 $ 6,500 $ 9,681
$ 9,497 $ 19,073
Total delinquent
loans less than 90 days past due7 $ 23,299 $
10,073 $ 15,993 $ 16,306 $ 22,422
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE BY TYPE
12/31/2012 9/30/2012 6/30/2012
3/31/2012 12/31/2011
Legacy Real estate loans $ 595 $ 2,448 $ 5,269 $ 5,540 $
1,569 Commercial loans 533 1,108 1,027 1,269 1,777 Consumer loans
190 17 16 -
3 Total delinquent loans less than 90 days past due -
legacy7 $ 1,318 $ 3,573 $ 6,312 $ 6,809
$ 3,349
Acquired Real estate loans $ 19,629 $
3,813 $ 6,631 $ 6,972 $ 14,965 Commercial loans 2,238 2,318 2,422
1,655 3,040 Consumer loans 114 369
628 870 1,068 Total
delinquent loans less than 90 days past due - acquired7 $ 21,981
$ 6,500 $ 9,681 $ 9,497 $ 19,073
Total delinquent loans less than 90 days past
due7 $ 23,299 $ 10,073 $ 15,993 $
16,306 $ 22,422
NON-ACCRUAL LOANS BY TYPE
12/31/2012 9/30/2012 6/30/2012
3/31/2012 12/31/2011 Real estate
loans $ 18,705 $ 22,254 $ 27,822 $ 27,301 $ 19,470 Commercial loans
6,938 6,208 11,463 11,378 11,593 Consumer loans 970
907 282 972 150 Total non-accrual loans7 $
26,613 $ 29,369 $ 39,567 $ 39,651 $ 31,213
WATCH LIST
LOANS 12/31/2012 9/30/2012
6/30/2012 3/31/2012 12/31/2011
Legacy Special mention $ 25,278 $ 32,708 $ 48,701 $ 39,667 $
35,740 Substandard 91,661 92,091 88,537 100,394 97,673 Doubtful 474
597 5,530 6,243 6,411 Loss - - - -
- Total watch list loans - legacy7 $ 117,413 $ 125,396 $
142,768 $ 146,304 $ 139,824
Acquired Special mention
$ 51,864 $ 61,951 $ 60,686 $ 67,722 $ 61,411 Substandard 106,167
95,387 110,370 109,699 100,680 Doubtful 305 202 261 470 76 Loss
39 77 11 81 - Total watch list
loans - acquired7 $ 158,375 $ 157,617 $ 171,328 $ 177,972 $ 162,167
Total watch list loans7 $ 275,788 $ 283,013 $
314,096 $ 324,276 $ 301,991
7 Excludes the guaranteed portion of
delinquent SBA loans as these are 100% guaranteed by the SBA.
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