WIBC Wilshire Bancorp, Inc. (MM)

Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported that continued strong loan growth and a focus on operating efficiencies resulted in record profits in both the fourth quarter and full year ended December 31, 2005. In 2005, net income increased 43% to $27.8 million, or $0.96 per diluted share, up from $19.5 million, or $0.68 per share in 2004. For the quarter ended December 31, 2005, net income increased 50% to $7.8 million, or $0.27 per diluted share, compared to $5.2 million, or $0.18 per share in the fourth quarter of 2004. In August 2004, Wilshire Bancorp was formed as a holding company for Wilshire State Bank. All previous results reflect the operations of Wilshire State Bank, which are comparable to those of the holding company. All per share results reflect the one-for-one conversion of Wilshire State Bank stock into Wilshire Bancorp stock, and the two-for-one stock split that followed in December 2004. Wilshire's profitability ratios all improved from the same periods last year for both the quarter and year ended December 31, 2005. In 2005, the return on average equity (ROE) grew to 27.2%, from 25.4% in the preceding year, while return on average assets (ROA) was 1.92%, compared to 1.70% in 2004. The efficiency ratio improved to 40.2% in 2005, compared to 43.1% in 2004, reflecting strong cost controls throughout the expansion. In the fourth quarter of 2005, ROE was 27.9%, ROA was 1.92% and the efficiency ratio was 41.3%, versus 24.0%, 1.68% and 46.1%, respectively, in the final quarter of 2004. "We achieved tremendous success in 2005 by sticking to our strategy: growing a high-quality loan portfolio while building our presence in premier multi-ethnic business environments," stated Soo Bong Min, President and CEO. "We opened two more branches in Southern California, Business Lending Offices in four new markets, and announced plans to purchase Liberty Bank of New York. The Liberty Bank transaction should close in the next few months, subject to the necessary regulatory approval, adding two branches to our existing office in one of the nation's best markets." Reflecting the success of Wilshire's growth strategy, total loan originations increased 27% in 2005 to $877 million, compared to $692 million in the previous year. In the fourth quarter of 2005, loan originations grew 40% to $238 million, from $170 million in the same quarter last year. Total loans increased by 24% to $1.26 billion at year-end 2005, compared to $1.02 billion a year earlier. Total assets grew 32% to $1.67 billion at the end of 2005, from $1.27 billion a year prior, due to the loan growth and an increase in short-term investments. "Our credit quality remained very strong throughout 2005, with minimal net charge offs and a decline in non-performing loans from a year ago," Min said. "Non-performing loans were $2.5 million at the end of 2005, compared to $3.9 million at the end of the third quarter and $2.7 million a year earlier. Despite our solid credit history, we continue to build our reserve for loan losses to reflect the growth in our portfolio." Non-performing loans dropped to 0.20% of total loans at the end of 2005, compared to 0.26% at the end of 2004. Net charge offs were just $324,000 in 2005, less than 0.03% of total loans, compared to $908,000, or 0.09% of total loans a year earlier. The provision for loan losses totaled $3.4 million in 2005, boosting the allowance for loan losses to $14.0 million at year-end, and representing 1.11% of total loans and more than five times non-performing assets. Total deposits grew by 28% in 2005, to $1.41 billion, compared to $1.10 billion at the end of the previous year. Core deposits grew by 19% in 2005 to $636 million, while time deposits increased 37% to $774 million. "Our net interest margin has improved substantially, up 66 basis points over the 2004 level and up 40 basis points compared to the fourth quarter last year," stated Brian Cho, EVP and Chief Financial Officer. Wilshire's net interest margin was 4.71% in 2005, compared to 4.05% in 2004. In the fourth quarter of 2005 the margin was 4.82%, basically flat from 4.84% in the preceding quarter. "After six consecutive quarters of margin expansion, our net interest margin did not increase any further on a sequential-quarter basis, as customers have shifted their funds into higher-yielding time deposits. Although our interest income was up 63% on the year, interest expense nearly doubled as interest rate increases and competition have driven up funding costs," Cho said. Net interest income was up 49% to $62.9 million in 2005, compared to $42.3 million in the preceding year. Noninterest income declined 2% to $20.5 million, versus $21.0 million in 2004, as a moderate increase in service fees was offset by a decrease in gain on sale of non-guaranteed SBA loans. Noninterest expense increased 23% to $33.6 million in 2005, compared to $27.3 million in 2004, reflecting the additional staff and occupancy expenses associated with the expansion. In the fourth quarter of 2005, net interest income increased 43% to $18.0 million from $12.6 million in the same quarter of 2004. Noninterest income grew 21% to $5.8 million in the quarter, versus $4.8 million in the final quarter of 2004, as gain on sale of non-guaranteed SBA loans and fee income both improved. Noninterest expense grew 23% to $9.8 million in the fourth quarter of 2005, from $8.0 million in the same quarter the preceding year. At December 31, 2005, shareholders' equity was $113 million, up 28% from $88.3 million a year earlier, and book value grew to $3.95 per share, from $3.14 a year ago. Capital ratios continue to exceed the "Well Capitalized" guidelines established by regulatory agencies. At 2005 year-end, Tier 1 Leverage Ratio was 9.39%, Tier 1 Risk-Based Capital Ratio was 11.59%, and Total Risk-Based Capital Ratio was 14.39%, compared to 8.35%, 9.87%, and 11.94%, respectively, at the end of 2004. Management will host its quarterly conference call today, January 26, at 10:30 am PST (1:30 pm EST). Investment professionals are invited to participate in the call by dialing 800-659-2032 and using passcode 96013307. Current and prospective shareholders are also invited to listen to the live or archived call at www.wilshirebank.com, or www.earnings.com. Wilshire Bancorp and its Wilshire State Bank subsidiary have received significant accolades for growth, performance and profitability. In January 2006, US Banker magazine named Wilshire Bancorp third in its All-Star Lineup -- The Top 20 Banks of 2006, based on year-over-year return on equity. In September 2005, Fortune named Wilshire the 79th fastest growing public company in the nation. A month earlier, U.S. Banker ranked Wilshire seventh on its list of the Top 100 Publicly Traded Mid-Tier Banks, those with less than $10 billion in assets, based on their three-year ROE. In addition, Sandler O'Neill identified Wilshire as one of its Bank and Thrift Sm-All Stars in 2004 and 2005, among just 38 companies out of 573 with market capitalizations below $2 billion. Headquartered in Los Angeles, Wilshire State Bank operates 16 branch offices in California and Texas and nine Loan Production Offices in San Jose, Seattle, Oklahoma City, San Antonio, Las Vegas, Houston, Atlanta, Denver and New York, and is an SBA preferred lender at all of its office locations. The 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. -0- *T CONSOLIDATED STATEMENT OF OPERATIONS ------------------------------------------ (unaudited) (dollars in thousands, except per share data) Quarter Ended Quarter Ended Quarter Ended Twelve December 31, September 30, December 31, Month 2005 2005 2004 Change INTEREST INCOME ------------- ------------- ------------- ------ Interest on Loans and Leases $ 27,192 $ 23,426 $ 16,494 65% Interest on Securities 1,432 1,332 841 70% Interest on Federal Funds Sold and Other Cash Equivalents 1,319 506 280 371% Interest on Commercial Papers - 15 - NA ----------- ----------- ----------- Total Interest Income 29,943 25,279 17,615 70% INTEREST EXPENSE Deposits 10,439 7,829 4,513 131% FHLB Advances and Other 1,490 1,124 523 185% ----------- ----------- ----------- Total Interest Expense 11,929 8,953 5,036 137% Net Interest Income 18,014 16,326 12,579 43% Provision for Loan Losses 880 1,250 550 60% ----------- ----------- ----------- Net Interest Income After Provision for Loan Losses 17,134 15,076 12,029 42% OTHER OPERATING INCOME Fees on Deposits 2,039 1,973 1,830 11% Gain on Sales of Loans 2,636 2,162 1,930 37% Other 1,124 991 1,030 9% ----------- ----------- ----------- Total Other Operating Income 5,799 5,126 4,790 21% OPERATING EXPENSES Salaries and Employee Benefits 5,609 4,924 4,196 34% Occupancy and Equipment 969 893 734 32% Other 3,255 2,543 3,080 6% ----------- ----------- ----------- Total Other Operating Expenses 9,833 8,360 8,010 23% ----------- ----------- ----------- Income Before Taxes 13,100 11,842 8,809 49% Income Tax 5,341 4,663 3,619 48% ----------- ----------- ----------- NET INCOME $ 7,759 $ 7,179 $ 5,190 50% =========== =========== =========== Per Share Data Basic Earnings Per Common Share $ 0.27 $ 0.25 $ 0.18 50% Earnings Per Share - Assuming Dilution $ 0.27 $ 0.25 $ 0.18 50% Weighted Average Shares Outstanding 28,591,879 28,585,640 28,123,389 Weighted Average Shares Outstanding Including Dilutive Effect of Stock Options 28,960,724 28,931,230 28,740,583 CONSOLIDATED STATEMENT OF OPERATIONS ------------------------------------------ (unaudited) (dollars in thousands, except per share data) Year Ended Year Ended December 31, December 31, 2005 2004 Change INTEREST INCOME -------------------------------- Interest on Loans and Leases $ 89,628 $ 55,943 60% Interest on Securities 4,783 3,050 57% Interest on Federal Funds Sold and Other Cash Equivalents 2,796 805 247% Interest on Commercial Papers 82 - NA ----------- ----------- Total Interest Income 97,289 59,798 63% INTEREST EXPENSE Deposits 29,914 15,663 91% FHLB Advances and Other 4,427 1,800 146% ----------- ----------- Total Interest Expense 34,341 17,463 97% Net Interest Income 62,948 42,335 49% Provision for Loan Losses 3,350 3,567 -6% ----------- ----------- Net Interest Income After Provision for Loan Losses 59,598 38,768 54% OTHER OPERATING INCOME Fees on Deposits 7,547 7,379 2% Gain on Sales of Loans 8,310 8,832 -6% Other 4,621 4,786 -3% ----------- ----------- Total Other Operating Income 20,478 20,997 -2% OPERATING EXPENSES Salaries and Employee Benefits 19,226 14,581 32% Occupancy and Equipment 3,465 2,730 27% Other 10,872 9,972 9% ----------- ----------- Total Other Operating Expenses 33,563 27,283 23% ----------- ----------- Income Before Taxes 46,513 32,482 43% Income Tax 18,753 13,024 44% ----------- ----------- NET INCOME $ 27,760 $ 19,458 43% =========== =========== Per Share Data Basic Earnings Per Common Share $ 0.97 $ 0.70 38% Earnings Per Share - Assuming Dilution $ 0.96 $ 0.68 41% Weighted Average Shares Outstanding 28,544,474 27,623,766 Weighted Average Shares Outstanding Including Dilutive Effect of Stock Options 28,920,921 28,515,881 CONSOLIDATED FINANCIAL Quarter Quarter Quarter Year Year RATIOS Ended Ended Ended Ended Ended ------------------------- (unaudited) Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2005 2005 2004 2005 2004 -------- --------- -------- -------- -------- Annualized Return on Average Assets 1.92% 1.96% 1.68% 1.92% 1.70% Annualized Return on Average Equity 27.91% 27.35% 23.96% 27.21% 25.42% Efficiency Ratio 41.29% 38.97% 46.12% 40.23% 43.08% Annualized Operating Expense/Average Assets 2.44% 2.28% 2.59% 2.32% 2.39% Annualized Net Interest Margin 4.82% 4.84% 4.42% 4.71% 4.05% Tier 1 Leverage Ratio 9.39% 9.71% 8.35% Tier 1 Risk-Based Capital Ratio 11.59% 11.76% 9.87% Total Risk-Based Capital Ratio 14.39% 14.94% 11.94% Book Value Per Share $3.95 $3.74 $3.14 CONSOLIDATED BALANCE SHEET ------------------------- (unaudited)(dollars in Twelve thousands, except share December 31, September 30, December 31, Month data) 2005 2005 2004 Change ---------- ---------- ---------- ------ ASSETS: Noninterest-Earning Demand Deposits and Cash on Hand $ 68,205 $ 59,398 $ 53,903 27% Federal Funds Sold and Other Cash Equivalents 126,003 100,003 45,003 180% ---------- ---------- ---------- Total Cash and Cash Equivalents 194,208 159,401 98,906 96% Interest-Bearing Deposits in Other Financial Institutions 500 - - NA Securities Available For Sale 138,650 126,798 85,712 62% Securities Held To Maturity 22,860 24,881 29,262 -22% ---------- ---------- ---------- Total Securities 162,010 151,679 114,974 41% Loans and Leases Receivable 1,262,560 1,189,166 1,020,723 24% Allowance For Loan Losses 13,999 13,551 11,111 26% ---------- ---------- ---------- Loans & Leases Receivable, Net 1,248,561 1,175,615 1,009,612 24% Accrued Interest Receivable 6,892 6,164 3,867 78% Acceptance 3,221 2,972 2,041 58% Other Real Estate Owned 294 156 - NA Premises and Equipment 8,956 8,724 5,480 63% Federal Home Loan Bank (FHLB) Stock, at Cost 6,182 6,112 4,372 41% Cash Surrender Value of Life Insurance 15,099 14,956 11,536 31% Other Assets 20,850 20,057 14,853 40% ---------- ---------- ---------- TOTAL ASSETS $1,666,273 $1,545,836 $1,265,641 32% ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Non-interest Bearing Demand Deposits $ 292,171 $ 312,890 $ 273,940 7% Savings and NOW Deposits 46,374 47,195 47,594 -3% Money Market Deposits 297,313 231,882 212,916 40% Time Deposits 773,607 707,497 564,255 37% ---------- ---------- ---------- Total Deposits 1,409,465 1,299,464 1,098,705 28% FHLB Advances 61,000 61,000 41,000 49% Acceptance 3,221 2,972 2,041 58% Subordinated Debentures 61,547 61,547 25,464 142% Accrued Interest and Other Liabilities 17,936 14,054 10,124 77% ---------- ---------- ---------- Total Liabilities 1,553,169 1,439,037 1,177,334 32% STOCKHOLDERS' EQUITY: Common Stock - No Par Value-Authorized, 80,000,000 Shares Issued and Outstanding, 28,630,600, 28,585,640 and 28,142,470 Shares, Respectively 41,340 41,079 38,926 6% Retained Earnings 72,790 66,176 49,605 47% Accumulated Other Comprehensive Income, Net of Taxes (1,026) (456) (224) 358% ---------- ---------- ---------- Total Stockholders' Equity 113,104 106,799 88,307 28% ---------- ---------- ---------- ---------- ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,666,273 $1,545,836 $1,265,641 32% ========== ========== ========== AVERAGE BALANCES ----------- (unaudited) Quarter Quarter Quarter (dollars Ended Ended Ended Year Ended Year Ended in Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, thousands) 2005 2005 2004 2005 2004 ----------------------------------------------------------- Average Assets $1,614,097 $1,468,264 $1,236,655 $1,447,557 $1,141,430 Average Equity 111,205 104,974 86,652 102,018 76,562 Average Net Loans (Includes LHFS) 1,221,325 1,145,588 978,612 1,120,371 895,380 Average Deposits 1,361,429 1,247,913 1,071,753 1,227,473 984,330 Average Interest Earning Assets $1,496,144 $1,350,199 $1,138,767 $1,337,222 $1,046,022 ALLOWANCE FOR LOAN Quarter Quarter Quarter Year Year LOSSES Ended Ended Ended Ended Ended ------------------------ (unaudited) (dollars in Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, thousands) 2005 2005 2004 2005 2004 ------------------ -------------------------- Balance at Beginning of Period $13,551 $12,450 $11,131 $11,111 $ 9,011 Provision for Loan Losses 880 1,250 550 3,350 3,567 Less Charge Offs (Net Recoveries) 383 90 467 324 908 Less Adjustment for Unfunded Loan Commitments 49 59 103 138 559 ------- ------- ------- ------- ------- Balance at End of Period $13,999 $13,551 $11,111 $13,999 $11,111 Loan Loss Allowance/Gross Loans 1.11% 1.14% 1.09% Loan Loss Allowance/Non- performing Loans 567.15% 329.99% 411.63% Loan Loss Allowance/Total Assets 0.84% 0.88% 0.88% Loan Loss Allowance/Non- performing Assets 506.71% 317.89% 411.63% NON-PERFORMING ASSETS ------------------------ (net of guaranteed Dec. 31, 2005 Sept. 30, 2005 Dec. 31, portion) 2004 ----------------- ----------------- -------- Accruing Loans - 90 Days Past Due $ 664 $ 343 $ 42 Non-accrual Loans 1,804 3,597 2,643 Restructured Loans 0 0 14 ------- ------- ------- Total Non-performing Loans $ 2,468 $ 3,940 $ 2,699 Total Non-performing Loans/Gross Loans 0.20% 0.33% 0.26% OREO $ 295 $ 157 $ - ------- ------- ------- Total Non-performing Assets $ 2,763 $ 4,097 $ 2,699 Total Non-performing Assets/Total Assets 0.17% 0.27% 0.21% *T 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 is 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.