WIBC Wilshire Bancorp, Inc. (MM)

Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported record profits in both the third quarter of 2006 and year-to-date, fueled by continued strong loan growth. For the quarter ended September 30, 2006, net income increased 23% to $8.8 million, or $0.30 per diluted share, compared to $7.2 million, or $0.25 per diluted share, in the third quarter of 2005. For the first nine months of 2006, net income grew 25% to $25.1 million, or $0.86 per diluted share, compared to $20.0 million, or $0.69 per diluted share, in the same period last year. Wilshire�s performance measures remain amongst the best in the banking industry. In the third quarter of 2006, the return on average equity (ROE) was 25.5% and the return on average assets (ROA) was 1.86%, compared to 27.4% and 1.96%, respectively, in the third quarter of 2005. For the nine-month period through September 30, 2006, ROE was 26.0% and ROA was 1.87%, compared to 27.0% and 1.92% in 2005. �The integration of Liberty Bank of New York (LBNY) has been very successful, with strong loan and deposit generation continuing since the acquisition closed in mid-May,� stated Soo Bong Min, President and CEO. �In less than five months, our portfolio of loans in New York increased by 77%, from LBNY�s $26 million to $46 million at the end of the third quarter. Deposit growth has exceeded our expectations as well, doubling to $100 million at the end of September 2006. Although building upon the strong foundation in New York has contributed to our success, loan and deposit generation has been strong throughout our entire franchise.� New loan originations were $254 million in the third quarter of 2006, up 11% from $229 million in the same quarter in 2005. For the first nine months of 2006, new loan originations were $753 million, an 18% increase over $640 million in the same period in 2005. Total loans increased by 27% to $1.51 billion at September 30, 2006, compared to $1.19 billion a year earlier. Assets grew to $1.91 billion at the end of the third quarter of 2006, up 24% from $1.55 billion at the end of September 2005. �With roughly 79% of our loans tied to Prime, the steady rise in interest rates over the past two years has greatly benefited our loan yields,� stated Brian Cho, EVP and Chief Financial Officer. �While deposit rates are typically slower to adjust upwards, now that interest rates have leveled off, our cost of funds has continued to rise. As a result, our net interest margin was under some pressure and dropped to 4.59% in the third quarter of 2006, compared to 4.84% in the third quarter last year and 4.74% in the preceding quarter. Unusually fast loan prepayments inflated the second quarter margin, which included additional loan yields for the higher than normal reversals of deferred premiums and collections of prepayment penalties. Our rate-sensitivity position between assets and liabilities for the one-year period is currently about neutral, so we do not anticipate major changes in our net interest margin unless prepayment speeds change dramatically, which could again impact our loan yields.� �Deposit pricing has remained very competitive, particularly in California,� Min added. �New York is a very attractive market with substantial opportunities for loan growth and relatively low-cost deposits. The Liberty Bank acquisition instantly increased our presence on the East Coast, and we believe we can lower our overall deposit costs as we continue to build market share there. However, in our primary Southern California market, our main funding sources remain time deposits and money market accounts at this time.� Total deposits grew 28% to $1.66 billion at September 30, 2006, compared to $1.30 billion at the end of the third quarter last year. Checking and savings account balances were $315 million and $47 million, respectively, at September 30, 2006, little changed from a year ago. Money market deposits grew by 60% to $371 million, compared to $232 million at the end of September 2005. Jumbo time deposits and smaller CDs each increased by 31% over a year-ago level, to $767 million and $161 million, respectively, at the end of the 2006 third quarter. Reflecting the rise in interest rates and consistent asset growth over the past year, interest income increased by 48% over the third quarter of 2005. However, interest expense was up 94% for the same period, as competition for deposits and the general interest rate environment continued to drive up funding costs. In the third quarter of 2006, net interest income was $20.1 million, up 23% from $16.3 million in the same quarter last year. Other operating income grew 46% to $7.5 million, from $5.1 million in the third quarter of 2005. Increased gain on sale of loans included $1.2 million from the sale of non-guaranteed SBA loans in the third quarter of 2006, compared to none in the same quarter of last year. In addition, service fees on deposits increased by $571,000 over year-ago levels. Other operating expenses increased 28% to $10.7 million, compared to $8.4 million in the third quarter of 2005, largely due to additional overhead expenses incurred to operate and integrate our New York branches. In the nine months through September 2006, interest income grew 53%, while interest expense more than doubled. Net interest income was $56.8 million year-to-date, up 26% from $44.9 million in the same period last year. Other operating income was $19.8 million, a 35% increase over the $14.7 million posted in the first nine months of 2005. Service fees on deposits grew by 30%, or $1.6 million, while gains on sale of loans grew by 56%, or $3.2 million. Other operating expenses were up 27% to $30.2 million, compared to $23.7 million in the first nine months of 2005. �Our efficiency ratio improved, back down below 40% in the third quarter after the incremental costs associated with our New York operations pushed it above that level in the second quarter,� Cho said. �We have kept our operating expenses in check despite relatively heavy marketing costs.� The efficiency ratio was 38.8% in the quarter ended September 30, 2006, compared to 40.8% in the preceding quarter and 39.0% in the third quarter last year. For the first nine months of 2006, the efficiency ratio improved slightly to 39.4%, compared to 39.8% in the same period a year ago. The provision for income taxes was $5.3 million and $16.3 million, respectively, for the third quarter and first nine months of 2006, as compared with $4.7 million and $13.4 million, respectively, for the prior year�s same periods. In the third quarter of 2006, the effective tax rate decreased to 37.4% from 39.4% for the prior year�s same periods, mainly the effect of the 2005 tax liability true-up. Wilshire filed its 2005 income tax returns in the third quarter of 2006 and the actual income tax liability was approximately $300,000 less than the income tax provision recognized in 2005. �Our strict underwriting standards have been supplemented by a strong economy, keeping our asset quality very solid the past couple of years,� Min said. �While our charge offs and non-performers both ticked up in the third quarter, they remain quite manageable. Although there are credit risks inherent in the banking business, we are well secured with real estate with low loan-to-values. Non-performing loans (NPLs) were 0.47% of gross loans at the end of the third quarter of 2006, compared to 0.35% of loans at the end of September 2005. Non-performing assets (NPAs) were 0.38% of total assets at quarter-end, compared to 0.28% of assets at the end of the third quarter last year. �We have continued to increase our loan loss reserves to keep pace with the growth in our loan portfolio and to maintain solid coverage ratios,� Cho said. �In the first nine months of 2006, we had $5.1 million in loan loss provisions, while net charge offs were just $892,000. As a result, the allowance for loan losses had grown to $18.4 million at the end of September 2006, representing 1.22% of gross loans and 251% of NPAs.� At September 30, 2006, shareholders� equity was $142 million, up 32% from $107 million a year earlier, and book value was $4.86 per share, compared to $3.74 a year prior. Capital ratios continue to exceed the �Well Capitalized� guidelines established by regulatory agencies. Management will host its quarterly conference call today, October 26, at 1:30 pm PDT (4:30 pm EDT). Investment professionals are invited to participate in the call by dialing 866-383-8008 and using passcode 61045217. 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 subsidiary, Wilshire State Bank, have received significant accolades for growth, performance and profitability. In September, US Banker ranked Wilshire Bancorp third in its list of Top 100 Mid-Tier Banks, ranked by three-year average ROE, and Fortune named Wilshire the 70th fastest-growing public company in the nation. Ryan Beck & Co. evaluated the five year total return of all banks and thrifts nationally, and ranked Wilshire second. In August, Sandler O�Neill�s Bank and Thrift Sm-All Stars�Class of 2006, recognized 34 of the 573 publicly traded institutions with assets of less than $2 billion, focusing on growth, profitability, credit quality and capital strength. Wilshire is one of only nine companies to be named each year since the list�s inception in 2004. In April, Wilshire Bancorp was added to the Standard & Poor�s SmallCap 600 index, and in January, US Banker named Wilshire third in its All-Star Lineup - The Top 20 Banks of 2006, based on year-over-year ROE. Headquartered in Los Angeles, Wilshire State Bank operates 19 branch offices in California, Texas and New York, and seven loan production offices in San Jose, Seattle, Las Vegas, Houston, Atlanta, Denver, and Annandale, Virginia, and is an SBA preferred lender nationwide. Wilshire State Bank is a community bank with a focus on commercial real estate lending and general commercial banking, with its primary market encompassing the multi-ethnic populations of the Los Angeles Metropolitan area. Wilshire Bancorp�s strategic goals include increasing shareholder and franchise value by continuing to grow its multi-ethnic banking business and expanding its geographic reach to other similar markets with strong levels of small business activity. www.wilshirebank.com 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. CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) (dollars in thousands, except per share data) Quarter EndedSeptember 30, 2006 Three MonthChange Quarter EndedJune 30, 2006 One YearChange Quarter EndedSeptember 30, 2005 INTEREST INCOME Interest on Loans and Leases $ 33,995� 7% $ 31,626� 45% $ 23,426� Interest on Securities 2,362� 6% 2,238� 77% 1,333� Interest on Federal Funds Sold 1,107� 43% 773� 119% 505� Interest on Commercial Paper � -� 0% � -� na � 15� Total Interest Income 37,464� 8% 34,637� 48% 25,279� � INTEREST EXPENSE Deposits 15,846� 16% 13,645� 102% 7,829� FHLB Advances and Other � 1,515� -3% � 1,554� 35% � 1,124� Total Interest Expense 17,361� 14% 15,199� 94% 8,953� � Net Interest Income 20,103� 3% 19,438� 23% 16,326� Provision for Loan Losses � 2,800� 133% � 1,200� 124% � 1,250� Net Interest Income After Provision for Loan Losses 17,303� -16% 18,238� 15% 15,076� � OTHER OPERATING INCOME Fees on Deposits 2,544� 4% 2,441� 29% 1,973� Gain on Sales of Loans 3,455� 13% 3,055� 60% 2,162� Other � 1,481� 37% � 1,084� 49% � 991� Total Other Operating Income 7,480� 14% 6,580� 46% 5,126� � OPERATING EXPENSES Salaries and Employee Benefits 6,327� 6% 5,965� 28% 4,924� Occupancy and Equipment 1,257� 17% 1,072� 41% 893� Other � 3,123� -13% � 3,580� 23% � 2,543� Total Other Operating Expenses � 10,707� 1% � 10,617� 28% � 8,360� � Income Before Taxes 14,076� -1% 14,201� 19% 11,842� Income Tax � 5,258� -9% � 5,786� 13% � 4,663� NET INCOME $ 8,818� 5% $ 8,415� 23% $ 7,179� � Per Share Data Basic Earnings Per Common Share $ 0.30� 4% $ 0.29� 21% $ 0.25� Earnings Per Share � Assuming Dilution $ 0.30� 4% $ 0.29� 20% $ 0.25� Weighted Average Shares Outstanding 29,137,027� 28,911,555� 28,585,640� Weighted Average Shares Outstanding Including Dilutive Effect of Stock Options 29,458,592� 29,278,179� 28,931,230� CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) (dollars in thousands, except per share data) Nine Months EndedSeptember 30, 2006 Change Nine Months EndedSeptember 30, 2005 INTEREST INCOME Interest on Loans and Leases $ 93,271� 49% $ 62,436� Interest on Securities 6,375� 90% 3,351� Interest on Federal Funds Sold 3,496� 137% 1,477� Interest on Commercial Paper � -� na � 82� Total Interest Income 103,142� 53% 67,346� � INTEREST EXPENSE Deposits 41,743� 114% 19,475� FHLB Advances and Other � 4,579� 56% � 2,937� Total Interest Expense 46,322� 107% 22,412� � Net Interest Income 56,820� 26% 44,934� Provision for Loan Losses � 5,060� 105% � 2,470� Net Interest Income After Provision for Loan Losses 51,760� 22% 42,464� � OTHER OPERATING INCOME Fees on Deposits 7,141� 30% 5,508� Gain on Sales of Loans 8,860� 56% 5,674� Other � 3,823� 9% � 3,496� Total Other Operating Income 19,824� 35% 14,678� � OPERATING EXPENSES Salaries and Employee Benefits 17,548� 29% 13,617� Occupancy and Equipment 3,225� 29% 2,496� Other � 9,415� 24% � 7,617� Total Other Operating Expenses � 30,188� 27% � 23,730� � Income Before Taxes 41,396� 24% 33,412� Income Tax � 16,340� 22% � 13,412� NET INCOME $ 25,056� 25% $ 20,000� � Per Share Data Basic Earnings Per Common Share $ 0.87� 24% $ 0.70� Earnings Per Share � Assuming Dilution $ 0.86� 24% $ 0.69� Weighted Average Shares Outstanding 28,922,416� 28,528,499� Weighted Average Shares Outstanding Including Dilutive Effect Of Stock Options 29,273,461� 28,906,440� CONSOLIDATED BALANCE SHEET September 30, 2006 Three Month Change June 30, 2006 One Year Change September 30, 2005 (unaudited)(dollars in thousands, except share data) ASSETS: Noninterest-Earning Demand Deposits and Cash on Hand $ 70,832� -2% $ 72,585� 19% $ 59,398� Federal Funds Sold and Other Cash Equivalents 65,003� -14% 76,003� -35% 100,000� Commercial Paper � -� 0% � -� 0% � -� Total Cash and Cash Equivalents 135,835� -9% 148,588� -15% 159,398� � Interest-Bearing Deposits in Other Financial Institutions 500� 0% 500� 16567% 3� Securities Available for Sale 182,419� -3% 188,272� 44% 126,798� Securities Held to Maturity � 20,630� -1% � 20,835� -17% � 24,881� Total Securities 203,549� -3% 209,607� 34% 151,682� � Loans and Leases Receivable 1,509,883� 5% 1,434,135� 27% 1,189,166� Allowance For Loan Losses � 18,417� 13% � 16,358� 36% � 13,551� Loans and Leases Receivable, Net 1,491,466� 5% 1,417,777� 27% 1,175,615� � Accrued Interest Receivable 9,994� 15% 8,728� 62% 6,164� Due from Customers on Acceptance 3,013� 5% 2,879� 1% 2,972� Other Real Estate Owned 241� 0% 242� 54% 156� Premises and Equipment 10,217� 3% 9,940� 17% 8,724� Federal Home Loan Bank (FHLB) Stock, at Cost 7,438� 1% 7,346� 22% 6,112� Cash Surrender Value of Life Insurance 15,536� 1% 15,397� 4% 14,956� Goodwill 6,675� -1% 6,767� 0% -� Core Deposit Intangible 1,576� -3% 1,619� 0% -� Other Assets � 24,373� -2% � 24,924� 21% � 20,057� TOTAL ASSETS $ 1,909,913� 3% $ 1,853,814� 24% $ 1,545,836� � LIABILITIES AND STOCKHOLDERS� EQUITY: LIABILITIES: Non-interest Bearing Demand Deposits $ 315,446� -9% $ 345,019� 1% $ 312,890� Savings and NOW Deposits 47,444� 4% 45,821� 1% 47,195� Money Market Deposits 370,656� 4% 355,787� 60% 231,882� Time Deposits of $100,000 or More 766,951� 10% 695,657� 31% 584,233� Other Time Deposits � 160,954� 9% � 148,160� 31% � 123,264� Total Deposits 1,661,451� 4% 1,590,444� 28% 1,299,464� � FHLB Advances 20,000� -56% 45,000� -67% 61,000� Acceptance Outstanding 3,013� 5% 2,879� 1% 2,972� Subordinated Debentures 61,547� 0% 61,547� 0% 61,547� Accrued Interest and Other Liabilities � 22,148� 5% � 21,163� 60% � 14,054� Total Liabilities 1,768,159� 3% 1,721,033� 23% 1,439,037� � STOCKHOLDERS� EQUITY: Common Stock - No Par Value-Authorized, 80,000,000 Shares Issued and Outstanding 29,166,050, 29,120,370 and 28,585,640 Shares, Respectively 48,882� 1% 48,505� 18% 41,079� Retained Earnings 93,495� 9% 86,135� 41% 66,176� Accumulated Other Comprehensive Income, Net of Taxes � (623) -66% � (1,859) 40% � (456) Total Stockholders� Equity � 141,754� 7% � 132,781� 32% � 106,799� � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,909,913� 3% $ 1,853,814� 24% $ 1,545,836� AVERAGE BALANCES Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended (unaudited)(dollars in thousands) September 30, 2006 June 30, 2006 September 30, 2005 September 30, 2006 September 30, 2005 Average Assets $ 1,893,185� $ 1,774,172� $ 1,468,264� $ 1,790,659� $ 1,391,433� Average Equity $ 138,454� $ 127,895� $ 104,974� $ 128,346� $ 98,923� Average Net Loans (includes LHFS) $ 1,460,959� $ 1,377,679� $ 1,145,588� $ 1,369,249� $ 1,086,350� Average Deposits $ 1,633,097� $ 1,512,128� $ 1,247,913� $ 1,530,630� $ 1,182,330� Average Time Deposits of $100,000 or More $ 726,287� $ 657,744� $ 562,434� $ 678,061� $ 512,575� Average Interest Earning Assets $ 1,750,638� $ 1,642,050� $ 1,350,199� $ 1,658,574� $ 1,283,666� � CONSOLIDATED FINANCIAL RATIOS Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended (unaudited) September 30, 2006 June 30, 2006 September 30, 2005 September 30, 2006 September 30, 2005 Annualized Return on Average Assets 1.86% 1.90% 1.96% 1.87% 1.92% Annualized Return on Average Equity 25.48% 26.32% 27.35% 26.03% 26.96% Efficiency Ratio 38.82% 40.81% 38.97% 39.39% 39.81% Annualized Operating Expense/Average Assets 2.26% 2.39% 2.28% 2.25% 2.27% Annualized Net Interest Margin 4.59% 4.74% 4.84% 4.57% 4.67% Tier 1 Leverage Ratio 9.59% 9.63% 9.71% Tier 1 Risk-Based Capital Ratio 11.60% 11.35% 11.66% Total Risk-Based Capital Ratio 13.66% 13.53% 14.94% Book Value Per Share $ 4.86� $ 4.56� $ 3.74� � ALLOWANCE FOR LOAN LOSSES Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended (unaudited) (dollars in thousands) September 30, 2006 June 30, 2006 September 30, 2005 September 30, 2006 September 30, 2005 Balance at Beginning of Period $ 16,358� $ 14,870� $ 12,450� $ 13,999� $ 11,111� Provision for Loan Losses 2,800� 1,200� 1,250� 5,060� 2,470� Allowance for Loan Losses Acquired from LBNY -� 601� -� 601� -� Less Charge Offs (Net Recoveries) 707� 108� 90� 892� (59) Less: Provision for Losses on Off Balance Sheet Item � 35� � 205� � 59� � 351� � 89� Balance at End of Period $ 18,417� $ 16,358� $ 13,551� $ 18,417� $ 13,551� Loan Loss Allowance/Gross Loans 1.22% 1.14% 1.14% Loan Loss Allowance/Non-performing Loans 259.50% 351.53% 329.99% Loan Loss Allowance/Total Assets 0.96% 0.88% 0.88% Loan Loss Allowance/Non-performing Assets 250.96% 334.19% 317.89% � NON-PERFORMING ASSETS (net of guaranteed portion) (unaudited) (dollars in thousands) September 30, 2006 June 30, 2006 September 30, 2005 Accruing Loans - 90 Days Past Due $ 1,337� $ 901� $ 305� Non-accrual Loans 5,760� 3,753� 3,801� Restructured Loans � 0� � 0� � 0� Total Non-performing Loans 7,097� 4,654� 4,106� Total Non-performing Loans/Gross Loans 0.47% 0.32% 0.35% OREO � 242� � 242� � 156� Total Non-performing Assets $ 7,339� $ 4,895� $ 4,263� Total Non-performing Assets/Total Assets 0.38% 0.26% 0.28% Wilshire Bancorp, Inc. (Nasdaq:WIBC), the holding company for Wilshire State Bank, today reported record profits in both the third quarter of 2006 and year-to-date, fueled by continued strong loan growth. For the quarter ended September 30, 2006, net income increased 23% to $8.8 million, or $0.30 per diluted share, compared to $7.2 million, or $0.25 per diluted share, in the third quarter of 2005. For the first nine months of 2006, net income grew 25% to $25.1 million, or $0.86 per diluted share, compared to $20.0 million, or $0.69 per diluted share, in the same period last year. Wilshire's performance measures remain amongst the best in the banking industry. In the third quarter of 2006, the return on average equity (ROE) was 25.5% and the return on average assets (ROA) was 1.86%, compared to 27.4% and 1.96%, respectively, in the third quarter of 2005. For the nine-month period through September 30, 2006, ROE was 26.0% and ROA was 1.87%, compared to 27.0% and 1.92% in 2005. "The integration of Liberty Bank of New York (LBNY) has been very successful, with strong loan and deposit generation continuing since the acquisition closed in mid-May," stated Soo Bong Min, President and CEO. "In less than five months, our portfolio of loans in New York increased by 77%, from LBNY's $26 million to $46 million at the end of the third quarter. Deposit growth has exceeded our expectations as well, doubling to $100 million at the end of September 2006. Although building upon the strong foundation in New York has contributed to our success, loan and deposit generation has been strong throughout our entire franchise." New loan originations were $254 million in the third quarter of 2006, up 11% from $229 million in the same quarter in 2005. For the first nine months of 2006, new loan originations were $753 million, an 18% increase over $640 million in the same period in 2005. Total loans increased by 27% to $1.51 billion at September 30, 2006, compared to $1.19 billion a year earlier. Assets grew to $1.91 billion at the end of the third quarter of 2006, up 24% from $1.55 billion at the end of September 2005. "With roughly 79% of our loans tied to Prime, the steady rise in interest rates over the past two years has greatly benefited our loan yields," stated Brian Cho, EVP and Chief Financial Officer. "While deposit rates are typically slower to adjust upwards, now that interest rates have leveled off, our cost of funds has continued to rise. As a result, our net interest margin was under some pressure and dropped to 4.59% in the third quarter of 2006, compared to 4.84% in the third quarter last year and 4.74% in the preceding quarter. Unusually fast loan prepayments inflated the second quarter margin, which included additional loan yields for the higher than normal reversals of deferred premiums and collections of prepayment penalties. Our rate-sensitivity position between assets and liabilities for the one-year period is currently about neutral, so we do not anticipate major changes in our net interest margin unless prepayment speeds change dramatically, which could again impact our loan yields." "Deposit pricing has remained very competitive, particularly in California," Min added. "New York is a very attractive market with substantial opportunities for loan growth and relatively low-cost deposits. The Liberty Bank acquisition instantly increased our presence on the East Coast, and we believe we can lower our overall deposit costs as we continue to build market share there. However, in our primary Southern California market, our main funding sources remain time deposits and money market accounts at this time." Total deposits grew 28% to $1.66 billion at September 30, 2006, compared to $1.30 billion at the end of the third quarter last year. Checking and savings account balances were $315 million and $47 million, respectively, at September 30, 2006, little changed from a year ago. Money market deposits grew by 60% to $371 million, compared to $232 million at the end of September 2005. Jumbo time deposits and smaller CDs each increased by 31% over a year-ago level, to $767 million and $161 million, respectively, at the end of the 2006 third quarter. Reflecting the rise in interest rates and consistent asset growth over the past year, interest income increased by 48% over the third quarter of 2005. However, interest expense was up 94% for the same period, as competition for deposits and the general interest rate environment continued to drive up funding costs. In the third quarter of 2006, net interest income was $20.1 million, up 23% from $16.3 million in the same quarter last year. Other operating income grew 46% to $7.5 million, from $5.1 million in the third quarter of 2005. Increased gain on sale of loans included $1.2 million from the sale of non-guaranteed SBA loans in the third quarter of 2006, compared to none in the same quarter of last year. In addition, service fees on deposits increased by $571,000 over year-ago levels. Other operating expenses increased 28% to $10.7 million, compared to $8.4 million in the third quarter of 2005, largely due to additional overhead expenses incurred to operate and integrate our New York branches. In the nine months through September 2006, interest income grew 53%, while interest expense more than doubled. Net interest income was $56.8 million year-to-date, up 26% from $44.9 million in the same period last year. Other operating income was $19.8 million, a 35% increase over the $14.7 million posted in the first nine months of 2005. Service fees on deposits grew by 30%, or $1.6 million, while gains on sale of loans grew by 56%, or $3.2 million. Other operating expenses were up 27% to $30.2 million, compared to $23.7 million in the first nine months of 2005. "Our efficiency ratio improved, back down below 40% in the third quarter after the incremental costs associated with our New York operations pushed it above that level in the second quarter," Cho said. "We have kept our operating expenses in check despite relatively heavy marketing costs." The efficiency ratio was 38.8% in the quarter ended September 30, 2006, compared to 40.8% in the preceding quarter and 39.0% in the third quarter last year. For the first nine months of 2006, the efficiency ratio improved slightly to 39.4%, compared to 39.8% in the same period a year ago. The provision for income taxes was $5.3 million and $16.3 million, respectively, for the third quarter and first nine months of 2006, as compared with $4.7 million and $13.4 million, respectively, for the prior year's same periods. In the third quarter of 2006, the effective tax rate decreased to 37.4% from 39.4% for the prior year's same periods, mainly the effect of the 2005 tax liability true-up. Wilshire filed its 2005 income tax returns in the third quarter of 2006 and the actual income tax liability was approximately $300,000 less than the income tax provision recognized in 2005. "Our strict underwriting standards have been supplemented by a strong economy, keeping our asset quality very solid the past couple of years," Min said. "While our charge offs and non-performers both ticked up in the third quarter, they remain quite manageable. Although there are credit risks inherent in the banking business, we are well secured with real estate with low loan-to-values. Non-performing loans (NPLs) were 0.47% of gross loans at the end of the third quarter of 2006, compared to 0.35% of loans at the end of September 2005. Non-performing assets (NPAs) were 0.38% of total assets at quarter-end, compared to 0.28% of assets at the end of the third quarter last year. "We have continued to increase our loan loss reserves to keep pace with the growth in our loan portfolio and to maintain solid coverage ratios," Cho said. "In the first nine months of 2006, we had $5.1 million in loan loss provisions, while net charge offs were just $892,000. As a result, the allowance for loan losses had grown to $18.4 million at the end of September 2006, representing 1.22% of gross loans and 251% of NPAs." At September 30, 2006, shareholders' equity was $142 million, up 32% from $107 million a year earlier, and book value was $4.86 per share, compared to $3.74 a year prior. Capital ratios continue to exceed the "Well Capitalized" guidelines established by regulatory agencies. Management will host its quarterly conference call today, October 26, at 1:30 pm PDT (4:30 pm EDT). Investment professionals are invited to participate in the call by dialing 866-383-8008 and using passcode 61045217. 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 subsidiary, Wilshire State Bank, have received significant accolades for growth, performance and profitability. In September, US Banker ranked Wilshire Bancorp third in its list of Top 100 Mid-Tier Banks, ranked by three-year average ROE, and Fortune named Wilshire the 70th fastest-growing public company in the nation. Ryan Beck & Co. evaluated the five year total return of all banks and thrifts nationally, and ranked Wilshire second. In August, Sandler O'Neill's Bank and Thrift Sm-All Stars--Class of 2006, recognized 34 of the 573 publicly traded institutions with assets of less than $2 billion, focusing on growth, profitability, credit quality and capital strength. Wilshire is one of only nine companies to be named each year since the list's inception in 2004. In April, Wilshire Bancorp was added to the Standard & Poor's SmallCap 600 index, and in January, US Banker named Wilshire third in its All-Star Lineup - The Top 20 Banks of 2006, based on year-over-year ROE. Headquartered in Los Angeles, Wilshire State Bank operates 19 branch offices in California, Texas and New York, and seven loan production offices in San Jose, Seattle, Las Vegas, Houston, Atlanta, Denver, and Annandale, Virginia, and is an SBA preferred lender nationwide. Wilshire State Bank is a community bank with a focus on commercial real estate lending and general commercial banking, with its primary market encompassing the multi-ethnic populations of the Los Angeles Metropolitan area. Wilshire Bancorp's strategic goals include increasing shareholder and franchise value by continuing to grow its multi-ethnic banking business and expanding its geographic reach to other similar markets with strong levels of small business activity. www.wilshirebank.com 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. -0- *T CONSOLIDATED STATEMENT OF OPERATIONS ---------------------------------------------------------------------- (unaudited) (dollars in thousands, except per share data) Quarter Quarter Quarter Ended Three Ended One Ended September Month June 30, Year September 30, 2006 Change 2006 Change 30, 2005 ------------ ------- ------------ ------ ------------ INTEREST INCOME Interest on Loans and Leases $ 33,995 7% $ 31,626 45% $ 23,426 Interest on Securities 2,362 6% 2,238 77% 1,333 Interest on Federal Funds Sold 1,107 43% 773 119% 505 Interest on Commercial Paper - 0% - na 15 ------------ ------ ------------ ------------ Total Interest Income 37,464 8% 34,637 48% 25,279 INTEREST EXPENSE Deposits 15,846 16% 13,645 102% 7,829 FHLB Advances and Other 1,515 -3% 1,554 35% 1,124 ------------ ------------ ------------ Total Interest Expense 17,361 14% 15,199 94% 8,953 Net Interest Income 20,103 3% 19,438 23% 16,326 Provision for Loan Losses 2,800 133% 1,200 124% 1,250 ------------ ------------ ------------ Net Interest Income After Provision for Loan Losses 17,303 -16% 18,238 15% 15,076 OTHER OPERATING INCOME Fees on Deposits 2,544 4% 2,441 29% 1,973 Gain on Sales of Loans 3,455 13% 3,055 60% 2,162 Other 1,481 37% 1,084 49% 991 ------------ ------------ ------------ Total Other Operating Income 7,480 14% 6,580 46% 5,126 OPERATING EXPENSES Salaries and Employee Benefits 6,327 6% 5,965 28% 4,924 Occupancy and Equipment 1,257 17% 1,072 41% 893 Other 3,123 -13% 3,580 23% 2,543 ------------ ------------ ------------ Total Other Operating Expenses 10,707 1% 10,617 28% 8,360 ------------ ------------ ------------ Income Before Taxes 14,076 -1% 14,201 19% 11,842 Income Tax 5,258 -9% 5,786 13% 4,663 ------------ ------------ ------------ NET INCOME $ 8,818 5% $ 8,415 23% $ 7,179 ============ ============ ============ Per Share Data Basic Earnings Per Common Share $ 0.30 4% $ 0.29 21% $ 0.25 Earnings Per Share - Assuming Dilution $ 0.30 4% $ 0.29 20% $ 0.25 Weighted Average Shares Outstanding 29,137,027 28,911,555 28,585,640 Weighted Average Shares Outstanding Including Dilutive Effect of Stock Options 29,458,592 29,278,179 28,931,230 *T -0- *T CONSOLIDATED STATEMENT OF OPERATIONS ---------------------------------------------------------------------- (unaudited) (dollars in thousands, except per share data) Nine Months Nine Months Ended Ended September September 30, 2006 Change 30, 2005 ------------ ------ ------------ INTEREST INCOME Interest on Loans and Leases $ 93,271 49% $ 62,436 Interest on Securities 6,375 90% 3,351 Interest on Federal Funds Sold 3,496 137% 1,477 Interest on Commercial Paper - na 82 ------------ ------------ Total Interest Income 103,142 53% 67,346 INTEREST EXPENSE Deposits 41,743 114% 19,475 FHLB Advances and Other 4,579 56% 2,937 ------------ ------------ Total Interest Expense 46,322 107% 22,412 Net Interest Income 56,820 26% 44,934 Provision for Loan Losses 5,060 105% 2,470 ------------ ------------ Net Interest Income After Provision for Loan Losses 51,760 22% 42,464 OTHER OPERATING INCOME Fees on Deposits 7,141 30% 5,508 Gain on Sales of Loans 8,860 56% 5,674 Other 3,823 9% 3,496 ------------ ------------ Total Other Operating Income 19,824 35% 14,678 OPERATING EXPENSES Salaries and Employee Benefits 17,548 29% 13,617 Occupancy and Equipment 3,225 29% 2,496 Other 9,415 24% 7,617 ------------ ------------ Total Other Operating Expenses 30,188 27% 23,730 ------------ ------------ Income Before Taxes 41,396 24% 33,412 Income Tax 16,340 22% 13,412 ------------ ------------ NET INCOME $ 25,056 25% $ 20,000 ============ ============ Per Share Data Basic Earnings Per Common Share $ 0.87 24% $ 0.70 Earnings Per Share - Assuming Dilution $ 0.86 24% $ 0.69 Weighted Average Shares Outstanding 28,922,416 28,528,499 Weighted Average Shares Outstanding Including Dilutive Effect Of Stock Options 29,273,461 28,906,440 *T -0- *T CONSOLIDATED BALANCE SHEET ------------------- (unaudited)(dollars Three One in thousands, September Month June 30, Year September except share data) 30, 2006 Change 2006 Change 30, 2005 ----------- ------- ----------- ------- ----------- ASSETS: Noninterest-Earning Demand Deposits and Cash on Hand $ 70,832 -2% $ 72,585 19% $ 59,398 Federal Funds Sold and Other Cash Equivalents 65,003 -14% 76,003 -35% 100,000 Commercial Paper - 0% - 0% - ----------- ----------- ----------- Total Cash and Cash Equivalents 135,835 -9% 148,588 -15% 159,398 Interest-Bearing Deposits in Other Financial Institutions 500 0% 500 16567% 3 Securities Available for Sale 182,419 -3% 188,272 44% 126,798 Securities Held to Maturity 20,630 -1% 20,835 -17% 24,881 ----------- ----------- ----------- Total Securities 203,549 -3% 209,607 34% 151,682 Loans and Leases Receivable 1,509,883 5% 1,434,135 27% 1,189,166 Allowance For Loan Losses 18,417 13% 16,358 36% 13,551 ----------- ----------- ----------- Loans and Leases Receivable, Net 1,491,466 5% 1,417,777 27% 1,175,615 Accrued Interest Receivable 9,994 15% 8,728 62% 6,164 Due from Customers on Acceptance 3,013 5% 2,879 1% 2,972 Other Real Estate Owned 241 0% 242 54% 156 Premises and Equipment 10,217 3% 9,940 17% 8,724 Federal Home Loan Bank (FHLB) Stock, at Cost 7,438 1% 7,346 22% 6,112 Cash Surrender Value of Life Insurance 15,536 1% 15,397 4% 14,956 Goodwill 6,675 -1% 6,767 0% - Core Deposit Intangible 1,576 -3% 1,619 0% - Other Assets 24,373 -2% 24,924 21% 20,057 ----------- ----------- ----------- TOTAL ASSETS $1,909,913 3% $1,853,814 24% $1,545,836 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Non-interest Bearing Demand Deposits $ 315,446 -9% $ 345,019 1% $ 312,890 Savings and NOW Deposits 47,444 4% 45,821 1% 47,195 Money Market Deposits 370,656 4% 355,787 60% 231,882 Time Deposits of $100,000 or More 766,951 10% 695,657 31% 584,233 Other Time Deposits 160,954 9% 148,160 31% 123,264 ----------- ----------- ----------- Total Deposits 1,661,451 4% 1,590,444 28% 1,299,464 FHLB Advances 20,000 -56% 45,000 -67% 61,000 Acceptance Outstanding 3,013 5% 2,879 1% 2,972 Subordinated Debentures 61,547 0% 61,547 0% 61,547 Accrued Interest and Other Liabilities 22,148 5% 21,163 60% 14,054 ----------- ----------- ----------- Total Liabilities 1,768,159 3% 1,721,033 23% 1,439,037 STOCKHOLDERS' EQUITY: Common Stock - No Par Value- Authorized, 80,000,000 Shares Issued and Outstanding 29,166,050, 29,120,370 and 28,585,640 Shares, Respectively 48,882 1% 48,505 18% 41,079 Retained Earnings 93,495 9% 86,135 41% 66,176 Accumulated Other Comprehensive Income, Net of Taxes (623) -66% (1,859) 40% (456) ----------- ----------- ----------- Total Stockholders' Equity 141,754 7% 132,781 32% 106,799 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,909,913 3% $1,853,814 24% $1,545,836 =========== =========== =========== *T -0- *T AVERAGE BALANCES Quarter Ended Quarter Ended ----------------------------------- (unaudited)(dollars in thousands) September 30, June 30, 2006 2006 -------------- --------------- Average Assets $ 1,893,185 $ 1,774,172 Average Equity $ 138,454 $ 127,895 Average Net Loans (includes LHFS) $ 1,460,959 $ 1,377,679 Average Deposits $ 1,633,097 $ 1,512,128 Average Time Deposits of $100,000 or More $ 726,287 $ 657,744 Average Interest Earning Assets $ 1,750,638 $ 1,642,050 CONSOLIDATED FINANCIAL RATIOS Quarter Ended Quarter Ended ----------------------------------- (unaudited) September 30, June 30, 2006 2006 -------------- --------------- Annualized Return on Average Assets 1.86% 1.90% Annualized Return on Average Equity 25.48% 26.32% Efficiency Ratio 38.82% 40.81% Annualized Operating Expense/Average Assets 2.26% 2.39% Annualized Net Interest Margin 4.59% 4.74% Tier 1 Leverage Ratio 9.59% 9.63% Tier 1 Risk-Based Capital Ratio 11.60% 11.35% Total Risk-Based Capital Ratio 13.66% 13.53% Book Value Per Share $ 4.86 $ 4.56 ALLOWANCE FOR LOAN LOSSES Quarter Ended Quarter Ended ----------------------------------- (unaudited) (dollars in thousands) September 30, June 30, 2006 2006 -------------- --------------- Balance at Beginning of Period $ 16,358 $ 14,870 Provision for Loan Losses 2,800 1,200 Allowance for Loan Losses Acquired from LBNY - 601 Less Charge Offs (Net Recoveries) 707 108 Less: Provision for Losses on Off Balance Sheet Item 35 205 ------------- ------------- Balance at End of Period $ 18,417 $ 16,358 Loan Loss Allowance/Gross Loans 1.22% 1.14% Loan Loss Allowance/Non-performing Loans 259.50% 351.53% Loan Loss Allowance/Total Assets 0.96% 0.88% Loan Loss Allowance/Non-performing Assets 250.96% 334.19% NON-PERFORMING ASSETS ----------------------------------- (net of guaranteed portion) (unaudited) (dollars in thousands) September 30, June 30, 2006 2006 -------------- --------------- Accruing Loans - 90 Days Past Due $ 1,337 $ 901 Non-accrual Loans 5,760 3,753 Restructured Loans 0 0 ------------- ------------- Total Non-performing Loans 7,097 4,654 Total Non-performing Loans/Gross Loans 0.47% 0.32% OREO 242 242 ------------- ------------- Total Non-performing Assets $ 7,339 $ 4,895 Total Non-performing Assets/Total Assets 0.38% 0.26% AVERAGE BALANCES Quarter Nine Months Nine Months Ended Ended Ended --------------------------------- (unaudited)(dollars in thousands)September September September 30, 2005 30, 2006 30, 2005 ----------- ----------- ----------- Average Assets $1,468,264 $1,790,659 $1,391,433 Average Equity $ 104,974 $ 128,346 $ 98,923 Average Net Loans (includes LHFS)$1,145,588 $1,369,249 $1,086,350 Average Deposits $1,247,913 $1,530,630 $1,182,330 Average Time Deposits of $100,000 or More $ 562,434 $ 678,061 $ 512,575 Average Interest Earning Assets $1,350,199 $1,658,574 $1,283,666 CONSOLIDATED FINANCIAL RATIOS Quarter Nine Months Nine Months Ended Ended Ended --------------------------------- (unaudited) September September September 30, 2005 30, 2006 30, 2005 ----------- ----------- ----------- Annualized Return on Average Assets 1.96% 1.87% 1.92% Annualized Return on Average Equity 27.35% 26.03% 26.96% Efficiency Ratio 38.97% 39.39% 39.81% Annualized Operating Expense/Average Assets 2.28% 2.25% 2.27% Annualized Net Interest Margin 4.84% 4.57% 4.67% Tier 1 Leverage Ratio 9.71% Tier 1 Risk-Based Capital Ratio 11.66% Total Risk-Based Capital Ratio 14.94% Book Value Per Share $ 3.74 ALLOWANCE FOR LOAN LOSSES Quarter Nine Months Nine Months Ended Ended Ended --------------------------------- (unaudited) (dollars in September September September thousands) 30, 2005 30, 2006 30, 2005 ----------- ----------- ----------- Balance at Beginning of Period $ 12,450 $ 13,999 $ 11,111 Provision for Loan Losses 1,250 5,060 2,470 Allowance for Loan Losses Acquired from LBNY - 601 - Less Charge Offs (Net Recoveries) 90 892 (59) Less: Provision for Losses on Off Balance Sheet Item 59 351 89 ----------- ----------- ----------- Balance at End of Period $ 13,551 $ 18,417 $ 13,551 Loan Loss Allowance/Gross Loans 1.14% Loan Loss Allowance/Non- performing Loans 329.99% Loan Loss Allowance/Total Assets 0.88% Loan Loss Allowance/Non- performing Assets 317.89% NON-PERFORMING ASSETS --------------------------------- (net of guaranteed portion) (unaudited) (dollars in September thousands) 30, 2005 ----------- Accruing Loans - 90 Days Past Due$ 305 Non-accrual Loans 3,801 Restructured Loans 0 ----------- Total Non-performing Loans 4,106 Total Non-performing Loans/Gross Loans 0.35% OREO 156 ----------- Total Non-performing Assets $ 4,263 Total Non-performing Assets/Total Assets 0.28% *T