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BBCN Bancorp Reports Financial Results for 2016 First Quarter

Q1 2016 Summary:

  • Net income totals $23.6 million, or $0.30 per diluted common share
  • New loan originations amount to $333.5 million
  • Loans receivable increase 2% to $6.37 billion, or 12% year-over-year
  • Total deposits increase 2% to $6.47 billion, or 11% year-over-year
  • Total assets increase 2% to $8.07 billion, or 11% year-over-year

LOS ANGELES, April 18, 2016 (GLOBE NEWSWIRE) -- BBCN Bancorp, Inc. (the “Company”) (NASDAQ:BBCN), the holding company of BBCN Bank (the “Bank”), today reported net income of $23.6 million, or $0.30 per diluted common share, for the three months ended March 31, 2016.  This compares with net income of $22.9 million, or $0.29 per diluted common share, for the preceding 2015 fourth quarter and $21.4 million, or $0.27 per diluted common share, for the year-ago first quarter.

“BBCN’s 2016 first quarter results reflect another quarter of solid operational performance,” said Kevin S. Kim, Chairman and Chief Executive Officer of BBCN Bancorp, Inc.  “While new loan originations are down from the seasonally higher and record fourth quarter, we are pleased with the improved mix of new loans with increased contributions of commercial and consumer loans.  We are also seeing stability in the average yield on new loans, which was up 5 basis points linked quarter, and our core net interest margin is holding relatively steady, increasing 1 basis point over the preceding fourth quarter.  Notwithstanding lower gains on sales of SBA loans in the first quarter and merger-related expenses, we continued to demonstrate the stability and strength of our earnings platform with net income increasing to $23.6 million for the three months ended March 31, 2016.

“Considering BBCN’s consistent financial performance, our ongoing progress in becoming a more diversified financial institution and the pending combination with the second strongest commercial lender in our space, we remain optimistic about the prospects of our organization and believe we are well positioned to deliver improved value to our customers, employees and shareholders,” said Kim.

Financial Highlights

(dollars in thousands, except per share data)At or for the Three Months Ended
 3/31/2016 12/31/2015 3/31/2015
Net income$23,623  $22,869  $21,358 
Diluted earnings per share$0.30  $0.29  $0.27 
Net interest income before provision for loan losses$71,607  $71,768  $65,123 
Net interest margin 3.84%  3.88%  3.87%
Noninterest income$8,775  $10,977  $11,048 
Noninterest expense$40,049  $38,938  $39,077 
Net loans receivable$6,295,079  $6,171,933  $5,641,045 
Deposits$6,467,411  $6,340,976  $5,803,254 
Nonaccrual loans (1)$43,548  $40,801  $38,755 
ALLL to loans receivable 1.21%  1.22%  1.22%
ALLL to nonaccrual loans (1) 176.49%  187.27%  179.57%
ALLL to nonperforming assets (1) (2) 66.17%  69.34%  59.86%
Provision for loan losses$500  $4,900  $1,500 
Net charge offs (recoveries)$52  $(398) $(336)
ROA 1.20%  1.19%  1.19%
ROE 9.99%  9.76%  9.60%
Efficiency ratio 49.82%  47.06%  51.30%

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.4 million, $18.7 million and $26.0 million at March 31, 2016, December 31, 2015, and March 31, 2015, respectively.
(2) Nonperforming assets exclude acquired credit impaired loans totaling $13.1 million, $12.2 million and $24.1 million at March 31, 2016, December 31, 2015, and March 31, 2015, respectively.

Operating Results for the 2016 First Quarter

The comparability of BBCN’s operating results with past performance is impacted by acquisition accounting adjustments related to past acquisitions.  The Company provides the following supplemental information to facilitate a better understanding of financial performance.  Net interest income for the three months ended March 31, 2016, December 31, 2015, and March 31, 2015 include the following pre-tax acquisition accounting adjustments related to past acquisitions:

(dollars in thousands)Three Months Ended
 3/31/2016 12/31/2015 3/31/2015
Accretion of discount on acquired performing loans$1,966  $2,648  $2,183 
Accretion of discount on acquired credit impaired loans 1,965   2,206   1,555 
Amortization of premium on acquired FHLB borrowings 97   97   94 
Accretion of discount on acquired subordinated debt (44)  (44)  (41)
Amortization of premium on acquired time deposits 24   28   75 
  Total$4,008  $4,935  $3,866 
            

Net Interest Income and Net Interest Margin.  Net interest income before provision for loan losses for the 2016 first quarter totaled $71.6 million, down slightly from $71.8 million in the preceding 2015 fourth quarter, reflecting a 15% reduction in acquisition accounting adjustments versus the preceding 2015 fourth quarter and a 2 basis point decline in yields on interest earning assets, which more than offset the higher interest income earned on the Company’s steadily growing base of loans receivable.  Compared with the prior-year period, net interest income before provision for loan losses rose 10% over $65.1 million in the 2015 first quarter, benefiting from a 12% increase in average loans receivable and a 35% increase in securities available for sale.

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
 3/31/2016 12/31/2015 change 3/31/2015 change
Net interest margin, excluding the effect of acquisition accounting adjustments3.60% 3.59% 0.01% 3.61% (0.01)%
Acquisition accounting adjustments0.24  0.29  (0.05) 0.26  (0.02)
Net interest margin3.84% 3.88% (0.04)% 3.87% (0.03)%
               

The net interest margin for the 2016 first quarter was 3.84%, down 4 basis points from the preceding fourth quarter and down 3 basis points from the year-ago first quarter.  On a core basis, excluding the effect of acquisition accounting adjustments, the net interest margin for the 2016 first quarter was relatively stable, up 1 basis point from the preceding fourth quarter and down 1 basis point from the year-ago first quarter.

The weighted average yield on loans and the impact of acquisition accounting adjustments are summarized in the following table:

 Three Months Ended
 3/31/2016 12/31/2015 change 3/31/2015 change
Weighted average yield on loans, excluding the effect of acquisition accounting adjustments4.66% 4.64% 0.02% 4.71% (0.05)%
Acquisition accounting adjustments0.29  0.35  (0.06) 0.32  (0.05)
Weighted average yield on loans4.95% 4.99% (0.04)% 5.03% (0.10)%
               

The weighted average yield on loans for the 2016 first quarter declined 4 basis points from the preceding 2015 fourth quarter, but increased 2 basis points when excluding the effect of acquisition accounting adjustments.  Compared with the prior-year period, the weighted average yield on loans decreased 10 basis points, or 5 basis points on a core basis excluding the effect of acquisition accounting adjustments.

The weighted average yield on new loans originated during the 2016 first quarter was 4.29%, up 5 basis points from 4.24% in the preceding fourth quarter and up 22 basis points from 4.07% in the year-ago first quarter.

The weighted average cost of deposits for the 2016 first quarter increased 3 basis points from the preceding fourth quarter and 8 basis points from the year-ago first quarter.  The Company noted that there was virtually no impact on the weighted average cost of deposits noted above from the effect of premium amortization on time deposits assumed in acquisitions.

Noninterest Income Noninterest income for the 2016 first quarter totaled $8.8 million, down from $11.0 million in both the preceding 2015 fourth quarter and 2015 first quarter.  Aside from the normal range of fluctuations in service fees on deposit accounts and other income and fees, the Company posted lower-than-recent levels of gains on sales of SBA loans of $1.8 million in the 2016 quarter, versus $3.1 million and $3.0 million in the 2015 fourth and first quarters, respectively.  Additional details relating to quarterly sales of SBA loans is provided in the balance sheet summary discussion below.

Noninterest Expense.  The Company continued to manage its operations efficiently notwithstanding the additional merger related expenses associated with its pending combination with Wilshire Bancorp, Inc. Total noninterest expense for the 2016 first quarter, 2015 fourth quarter and 2015 first quarter totaled $40.0 million, $38.9 million and $39.1 million, respectively, including merger related expenses of $1.2 million, $1.4 million and $52,000. Salaries and employee benefits expense totaled $21.6 million for the 2016 first quarter, compared with $21.3 million for the preceding fourth quarter and $21.2 million for the year-ago first quarter. The total number of FTEs as of March 31, 2016 was 945, compared with 938 as of December 31, 2015 and 933 as of March 31, 2015.

Income Tax Provision.  The effective tax rate for the 2016 first quarter was 40.7%, compared with 41.2% for the preceding 2015 fourth quarter and 40.0% for the 2015 first quarter.

Balance Sheet Summary

Loans receivable totaled $6.37 billion at March 31, 2016, reflecting a 2% increase over $6.25 billion at December 31, 2015, and a 12% increase over $5.71 billion at March 31, 2015.

Total new loan originations during the 2016 first quarter amounted to $333.5 million, including SBA loan originations of $54.3 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, which amounted to $37.6 million for the first quarter of 2016, compared with $39.4 million for the preceding 2015 fourth quarter and $42.9 million for the 2015 first quarter.  During the 2016 first quarter, the Company sold $23.8 million of its SBA loans held for sale, compared with $41.9 million in the preceding fourth quarter and $32.5 million in the year-ago first quarter.

Aggregate pay offs and pay downs for the 2016 first quarter amounted to $201.9 million, compared with $263.0 million for the preceding 2015 fourth quarter and $166.3 million for the year-ago first quarter.

Total deposits increased to $6.47 billion at March 31, 2016, up 2% from $6.34 billion at December 31, 2015,  reflecting increased balances in time deposits.  Noninterest bearing deposits at the close of the 2016 first quarter accounted for 26% of total deposits.  Compared with the year-ago first quarter, total deposits increased 11% from $5.80 million at March 31, 2015, reflecting increased balances in all deposit categories, except savings deposits.

Credit Quality

The provision for loan losses for the 2016 first quarter was $500,000, compared with $4.9 million for the preceding 2015 fourth quarter and $1.5 million for the prior-year first quarter.

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 “Legacy Loans”) and loans acquired through the Center Financial, Pacific International and Foster transactions (referred to as “Acquired Loans”).  The Acquired Loans are further segregated between performing and credit impaired loans.

The composition of the ALLL as of March 31, 2016, December 31, 2015, and March 31, 2015 is as follows:

(dollars in thousands)3/31/2016 12/31/2015 3/31/2015
Legacy Loans (1)$ 64,016  $ 63,309  $ 55,397 
Acquired Loans - Performing (2)  963    1,117    1,550 
Acquired Loans - Credit Impaired (2)  11,877    11,982    12,647 
Total ALLL$ 76,856  $ 76,408  $ 69,594 
         
Loans Receivable$ 6,371,935  $ 6,248,341  $ 5,710,639 
ALLL coverage ratio  1.21%   1.22%   1.22%

(1) Legacy Loans include loans originated by the Bank’s predecessor bank, loans originated by BBCN and loans that were acquired and that have been refinanced as new loans.
(2) Acquired Loans were marked to fair value at acquisition date, and the allowance for loan losses reflect provisions for credit deterioration since the acquisition date.

Following are the components of criticized loan balances as of March 31, 2016, December 31, 2015, and March 31, 2015:

(dollars in thousands)3/31/2016 12/31/2015 3/31/2015
Special Mention (1)$104,042 $104,186 $112,298
Classified (1) 203,398  203,576  209,992
  Criticized$307,440 $307,762 $322,290

(1) Balances include Acquired Loans which were marked to fair value on the date of acquisition.

The Company defines nonperforming loans to include delinquent loans past due 90 days or more on nonaccrual status, delinquent loans past due 90 days or more on accrual status (excluding acquired credit impaired loans) and accruing restructured loans.  Nonaccrual loans at March 31, 2016 totaled $43.5 million, or 0.68% of loans receivable.  This compares with nonaccrual loans of $40.8 million, or 0.65% of loans receivable, at December 31, 2015 and $38.8 million, or 0.68% of loans receivable, at March 31, 2015.  Accruing restructured loans amounted to $52.8 million at March 31, 2016, $48.0 million at December 31, 2015 and $57.9 million at March 31, 2015.  Total nonperforming loans at March 31, 2016 amounted to $96.4 million, or 1.51% of loans receivable, compared with $89.2 million, or 1.43% of loans receivable, at December 31, 2015 and $96.7 million, or 1.69% of loans receivable, at March 31, 2015.

Nonperforming assets, including nonperforming loans and other real estate owned, amounted to $116.1 million at March 31, 2016, or 1.44% of total assets, compared with $110.2 million, or 1.39% of total assets, at December 31, 2015, and $116.3 million, or 1.60% of total assets, at March 31, 2015.

For the 2016 first quarter, the Company recorded net charge offs of $52,000, or 0.00% of average loans receivable on an annualized basis.  This compares with net recoveries of $398,000 for the 2015 fourth quarter, or 0.03% of average loans receivable on an annualized basis, and net recoveries of $336,000, or 0.02% of average loans receivable on an annualized basis, for the year-ago first quarter.

The allowance for loan losses at March 31, 2016 was $76.9 million, or 1.21% of loans receivable (excluding loans held for sale), compared with $76.4 million, or 1.22%, at December 31, 2015 and $69.6 million, or 1.22%, at March 31, 2015.   The coverage ratio of the allowance for loan losses to nonperforming loans (excluding acquired credit impaired loans) was 79.77% at March 31, 2016, versus 85.70% at December 31, 2015 and 72.00% at March 31, 2015.

Impaired loans (defined as loans for which it is probable that not all principal and interest payments due will be collected in accordance with the contractual terms) totaled $140.4 million at March 31, 2016, compared with $138.1 million at December 31, 2015 and $122.7 million at March 31, 2015.

Capital

At March 31, 2016, the Company continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” institution, as summarized in the following table.

 3/31/2016 12/31/2015 3/31/2015
Common Equity Tier 1 Capital 11.95%  12.08%  12.73%
Leverage Ratio 11.44%  11.53%  11.76%
Tier 1 Risk-based Ratio 12.53%  12.67%  13.39%
Total Risk-based Ratio 13.63%  13.80%  14.53%
            

Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:

 3/31/2016 12/31/2015 3/31/2015
Tangible common equity per share (1)$10.73  $10.43  $9.93 
Tangible common equity to tangible assets (1) 10.73%  10.63%  11.03%

(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.  The accompanying financial information includes a reconciliation of the ratio of tangible common equity to tangible assets with stockholders’ equity and total assets.

Investor Conference Call

The Company will host an investor conference call on Tuesday, April 19, 2016 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the 2016 first quarter.  Investors and analysts are invited to access the conference call by dialing 866-235-9917 (domestic) or 412-902-4103 (international), and asking for the “BBCN Bancorp Call.”  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 remain available in the Investor Relations section of BBCN Bancorp’s website for one year.  A telephonic replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) through April 26, 2016, passcode 10083449.

About BBCN Bancorp, Inc.

BBCN Bancorp, Inc. is the holding company of BBCN Bank, the largest Korean-American bank in the nation with $8.1 billion in assets as of March 31, 2016. Headquartered in Los Angeles and serving a diverse mix of customers mirroring its communities, BBCN operates 50 branches in California, New York, New Jersey, Illinois, Washington and Virginia; eight loan production offices in Seattle, Denver, Dallas, Atlanta, Northern California, Annandale, Virginia, Portland, Oregon and Fremont, California; and a representative office in Seoul, Korea.  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.

Additional Information and Where to Find It

In connection with the proposed merger, BBCN Bancorp, Inc. has filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that includes a preliminary joint proxy statement/prospectus of BBCN Bancorp, Inc. and Wilshire Bancorp, Inc., as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the registration statement, the preliminary joint proxy statement/prospectus regarding the merger, the definitive joint proxy statement/prospectus when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the preliminary joint proxy statement/prospectus, as well as other filings containing information about BBCN Bancorp and Wilshire Bancorp at the SEC’s Internet site (www.sec.gov). You will also be able to obtain these documents, free of charge, from BBCN at www.BBCNbank.com in the “Investor Relations” section under the “About” tab, or from Wilshire Bancorp at www.wilshirebank.com in the “Investor Relations” section under the “About Wilshire Bank” tab.

Participants in Solicitation

BBCN Bancorp, Wilshire Bancorp and their respective directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning BBCN Bancorp’s participants is set forth in the proxy statement, dated May 1, 2015, and supplemental proxy materials, dated May 20, 2015, for BBCN Bancorp’s 2015 annual meeting of stockholders, as filed with the SEC on Schedules 14A. Information concerning Wilshire Bancorp’s participants is set forth in the proxy statement, dated April 9, 2015, for Wilshire Bancorp’s 2015 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of participants of BBCN Bancorp and Wilshire Bancorp in the solicitation of proxies in respect of the merger are included in the registration statement and preliminary joint proxy statement/prospectus filed with the SEC.

Forward-Looking Statements

This press release may contain forward-looking statements, including statements about future operations and projected 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.

(tables follow)

 
BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
          
Assets3/31/2016 12/31/2015 % change 3/31/2015 % change
Cash and due from banks*$236,101  $298,389  (21)% $429,871  (45)%
Securities available for sale, at fair value1,087,897  1,010,556  8% 808,372  35%
Federal Home Loan Bank, Federal Reserve Bank stock and other investments*68,329  66,859  2% 32,673  109%
Loans held for sale, at the lower of cost or fair value13,843  8,273  67% 26,432  (48)%
Loans receivable6,371,935  6,248,341  2% 5,710,639  12%
Allowance for loan losses(76,856) (76,408) (1)% (69,594) (10)%
  Net loans receivable6,295,079  6,171,933  2% 5,641,045  12%
Accrued interest receivable15,660  15,195  3% 13,904  13%
Premises and equipment, net35,134  34,575  2% 30,074  17%
Bank owned life insurance47,292  47,018  1% 46,196  2%
Goodwill105,401  105,401  % 105,401  %
Servicing assets11,856  12,000  (1)% 10,529  13%
Other intangible assets, net2,607  2,820  (8)% 3,620  (28)%
Other assets149,106  139,629  7% 119,788  24%
  Total assets$8,068,305  $7,912,648  2% $7,267,905  11%
          
Liabilities         
Deposits$6,467,411  $6,340,976  2% $5,803,254  11%
Borrowings from Federal Home Loan Bank530,495  530,591  % 480,881  10%
Subordinated debentures42,371  42,327  % 42,199  %
Accrued interest payable6,746  6,007  12% 6,477  4%
Other liabilities59,300  54,652  9% 35,896  65%
  Total liabilities7,106,323  6,974,553  2% 6,368,707  12%
          
Stockholders’ Equity         
Common stock, $0.001 par value; authorized, 150,000,000 shares at March 31, 2016, December 31, 2015, and March 31, 2015; issued and outstanding, 79,597,106, 79,566,356, and 79,542,321 shares at March 31, 2016, December 31, 2015, and March 31, 2015, respectively80  80  % 79  1%
Capital surplus541,625  541,596  % 541,824  %
Retained earnings413,122  398,251  4% 352,807  17%
Accumulated other comprehensive income (loss), net7,155  (1,832) 491% 4,488  59%
  Total stockholders’ equity961,982  938,095  3% 899,198  7%
  Total liabilities and stockholders’ equity$8,068,305  $7,912,648  2% $7,267,905  11%
          


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 Three Months Ended
 3/31/2016 12/31/2015 % change 3/31/2015 % change
Interest income:         
  Interest and fees on loans$77,118  $76,807  % $69,639  11%
  Interest on securities5,677  5,544  2% 4,207  35%
  Interest on federal funds sold and other investments666  622  7% 708  (6)%
  Total interest income83,461  82,973  1% 74,554  12%
                  
Interest expense:                 
  Interest on deposits9,907  9,297  7% 7,754  28%
  Interest on other borrowings1,947  1,908  2% 1,677  16%
  Total interest expense11,854  11,205  6% 9,431  26%
                  
Net interest income before provision for loan losses71,607  71,768  % 65,123  10%
Provision for loan losses500  4,900  (90)% 1,500  (67)%
Net interest income after provision for loan losses71,107  66,868  6% 63,623  12%
                  
Noninterest income:                 
  Service fees on deposit accounts2,683  2,944  (9)% 3,062  (12)%
  Net gains on sales of SBA loans1,825  3,112  (41)% 3,044  (40)%
  Net gains on sales of other loans  17  (100)% 182  (100)%
  Net gains on sales of securities available for sale    % 424  (100)%
  Other income and fees4,267  4,904  (13)% 4,336  (2)%
  Total noninterest income8,775  10,977  (20)% 11,048  (21)%
                  
Noninterest expense:                 
  Salaries and employee benefits21,569  21,329  1% 21,181  2%
  Occupancy4,817  4,949  (3)% 4,692  3%
  Furniture and equipment2,287  2,330  (2)% 2,263  1%
  Advertising and marketing1,136  906  25% 1,391  (18)%
  Data processing and communications2,171  2,175  % 2,349  (8)%
  Professional fees1,083  1,618  (33)% 1,424  (24)%
  FDIC assessment1,038  1,040  % 1,112  (7)%
  Credit related expenses421  324  30% 855  (51)%
  OREO (income) expense1,428  (154) 1,027% 1,177  21%
  Merger related expenses1,207  1,438  (16)% 52  2,221%
  Other2,892  2,983  (3)% 2,581  12%
  Total noninterest expense40,049  38,938  3% 39,077  2%
Income before income taxes39,833  38,907  2% 35,594  12%
Income tax provision16,210  16,038  1% 14,236  14%
Net income$23,623  $22,869  3% $21,358  11%
          
Earnings Per Common Share:         
  Basic$0.30  $0.29    $0.27   
  Diluted$0.30  $0.29    $0.27   
          
Average Shares Outstanding:         
  Basic79,583,188  79,556,859    79,526,218   
  Diluted79,609,317  79,601,452    79,602,122   
             


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 At or for the Three Months Ended
 (Annualized)
Profitability measures:3/31/2016 12/31/2015 3/31/2015
  ROA1.20% 1.19% 1.19%
  ROE9.99% 9.76% 9.60%
  Return on average tangible equity 111.28% 11.03% 10.94%
  Net interest margin3.84% 3.88% 3.87%
  Efficiency ratio49.82% 47.06% 51.30%
      
Average tangible equity is calculated by subtracting average goodwill and average core deposit intangible assets from average stockholders’ equity. This is a non-GAAP measure that we believe provides investors with information that is useful in understanding our financial performance and position.
 


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 Three Months Ended Three Months Ended Three Months Ended
 3/31/2016 12/31/2015 3/31/2015
   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
INTEREST EARNING ASSETS:                 
  Loans receivable, including loans held for sale$6,269,428  $77,118  4.95% $6,102,693  $76,807  4.99% $5,617,929  $69,639  5.03%
  Securities available for sale1,016,865  5,677  2.23% 1,010,247  5,544  2.20% 778,305  4,207  2.16%
  FRB and FHLB stock and other investments217,048  666  1.21% 225,529  622  1.08% 414,973  708  0.68%
Total interest earning assets$7,503,341  $83,461  4.47% $7,338,469  $82,973  4.49% $6,811,207  $74,554  4.44%
                                 
INTEREST BEARING LIABILITIES:                                
  Deposits:                                
  Demand, interest bearing$1,968,637  $4,004  0.82% $1,855,772  $3,651  0.78% $1,625,641  $2,765  0.68%
  Savings186,462  366  0.79% 189,271  410  0.86% 195,063  425  0.88%
  Time deposits:                                
  $100,000 or more1,806,609  4,057  0.90% 1,752,429  3,764  0.85% 1,713,331  3,377  0.80%
  Other699,431  1,481  0.85% 704,040  1,472  0.83% 626,197  1,187  0.77%
  Total time deposits2,506,040  5,537  0.89% 2,456,469  5,236  0.85% 2,339,528  4,564  0.79%
  Total interest bearing deposits4,661,139  9,907  0.85% 4,501,512  9,297  0.82% 4,160,232  7,754  0.76%
  FHLB advances532,206  1,523  1.15% 515,981  1,507  1.16% 480,942  1,297  1.09%
  Other borrowings40,813  424  4.11% 40,764  401  3.85% 40,624  380  3.74%
Total interest bearing liabilities5,234,158  $11,854  0.91% 5,058,257  $11,205  0.88% 4,681,798  $9,431  0.82%
Noninterest bearing demand deposits1,629,565       1,645,237       1,543,144      
Total funding liabilities/cost of funds$6,863,723    0.69% $6,703,494    0.66% $6,224,942    0.61%
Net interest income/net interest spread  $71,607  3.56%   $71,768  3.61%   $65,123  3.62%
Net interest margin    3.84%     3.88%     3.87%
Net interest margin, excluding effect of nonaccrual loan income (expense)    3.84%     3.88%     3.88%
Net interest margin, excluding effect of nonaccrual loan income (expense) and prepayment fee income    3.81%     3.83%     3.85%
Nonaccrual loan income (reversed) recognized  $(123)     $71      $(24)  
Prepayment fee income received  631      902      510   
  Net  $508      $973      $486   
                  
Cost of deposits:                 
  Noninterest bearing demand deposits$1,629,565  $    $1,645,237  $    $1,543,144  $   
  Interest bearing deposits4,661,139  9,907  0.85% 4,501,512  9,297  0.82% 4,160,232  7,754  0.76%
Total deposits$6,290,704  $9,907  0.63% $6,146,749  $9,297  0.60% $5,703,376  $7,754  0.55%


 
BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
  Three Months Ended
AVERAGE BALANCES3/31/2016 12/31/2015 % change 3/31/2015 % change
Loans receivable, including loans held for sale$6,269,428  $6,102,693  3% $5,617,929  12%
Investments1,233,913  1,235,776  % 1,193,278  3%
Interest earning assets7,503,341  7,338,469  2% 6,811,207  10%
Total assets7,875,990  7,700,716  2% 7,161,811  10%
                  
Interest bearing deposits4,661,139  4,501,512  4% 4,160,232  12%
Interest bearing liabilities5,234,158  5,058,257  3% 4,681,798  12%
Noninterest bearing demand deposits1,629,565  1,645,237  (1)% 1,543,144  6%
Stockholders’ equity945,634  937,664  1% 890,206  6%
Net interest earning assets2,269,183  2,280,212  % 2,129,409  7%
          
          
LOAN PORTFOLIO COMPOSITION:3/31/2016 12/31/2015 % change 3/31/2015 % change
Commercial loans$1,118,420  $1,079,316  4% $1,072,261  4%
Real estate loans5,132,517  5,069,482  1% 4,554,128  13%
Consumer and other loans124,064  102,573  21% 87,558  42%
   Loans outstanding6,375,001  6,251,371  2% 5,713,947  12%
Unamortized deferred loan fees - net of costs(3,066) (3,030) (1)% (3,308) 7%
  Loans, net of deferred loan fees and costs6,371,935  6,248,341  2% 5,710,639  12%
Allowance for loan losses(76,856) (76,408) (1)% (69,594) (10)%
  Loan receivable, net$6,295,079  $6,171,933  2% $5,641,045  12%
          
REAL ESTATE LOANS BY PROPERTY TYPE:3/31/2016 12/31/2015 % change 3/31/2015 % change
Retail buildings$1,339,676  $1,326,516  1% $1,215,120  10%
Hotels/motels1,079,649  1,061,111  2% 907,106  19%
Gas stations/car washes689,883  667,496  3% 624,644  10%
Mixed-use facilities381,955  369,425  3% 346,865  10%
Warehouses530,353  529,255  % 486,656  9%
Multifamily251,780  245,532  3% 205,383  23%
Other859,221  870,147  (1)% 768,354  12%
Total$5,132,517  $5,069,482  1% $4,554,128  13%
          
DEPOSIT COMPOSITION3/31/2016 12/31/2015 % change 3/31/2015 % change
  Noninterest bearing demand deposits$1,695,039  $1,694,427  % $1,616,935  5%
  Money market and other1,951,561  1,983,250  (2)% 1,592,151  23%
  Saving deposits181,779  187,498  (3)% 193,839  (6)%
  Time deposits of $100,000 or more1,885,842  1,772,984  6% 1,774,109  6%
  Other time deposits753,189  702,817  7% 626,220  20%
  Total deposit balances$6,467,410  $6,340,976  2% $5,803,254  11%
          
DEPOSIT COMPOSITION (%)3/31/2016 12/31/2015   3/31/2015  
  Noninterest bearing demand deposits26.2% 26.7%   27.9%  
  Money market and other30.2% 31.3%   27.4%  
  Saving deposits2.8% 3.0%   3.3%  
  Time deposits of $100,000 or more29.2% 28.0%   30.6%  
  Other time deposits11.6% 11.0%   10.8%  
  Total deposit balances100.0% 100.0%   100.0%  


 
BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
CAPITAL RATIOS3/31/2016 12/31/2015 3/31/2015    
  Total stockholders’ equity$961,982  $938,095  $899,198     
  Common Equity Tier 1 ratio11.95% 12.08% 12.73%    
  Tier 1 risk-based capital ratio12.53% 12.67% 13.39%    
  Total risk-based capital ratio13.63% 13.80% 14.53%    
  Tier 1 leverage ratio11.44% 11.53% 11.76%    
  Total risk weighted assets$7,098,332  $6,905,154  $6,194,595     
  Book value per common share$12.09  $11.79  $11.30     
  Tangible common equity to tangible assets 210.73% 10.63% 11.03%    
  Tangible common equity per share 2$10.73  $10.43  $9.93     
          
Tangible common equity to tangible assets is a non-GAAP financial measure that represents common equity less goodwill and core deposit intangible assets, net divided by total assets less goodwill and core deposit 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:    
 3/31/2016 12/31/2015 3/31/2015    
Total stockholders’ equity$961,982  $938,095  $899,198     
Less:  Common stock warrant    (378)    
  Goodwill and core deposit intangible assets, net(108,008) (108,221) (109,021)    
Tangible common equity$853,974  $829,874  $789,799     
          
Total assets$8,068,305  $7,912,648  $7,267,905     
Less:  Goodwill and core deposit intangible assets, net(108,008) (108,221) (109,021)    
Tangible assets$7,960,297  $7,804,427  $7,158,884     
          
Common shares outstanding79,597,106  79,566,356  79,542,321     
          
  Tangible common equity to tangible assets10.73% 10.63% 11.03%    
  Tangible common equity per share$10.73  $10.43  $9.93     
          
  Three Months Ended
ALLOWANCE FOR LOAN LOSSES:3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Balance at beginning of period$76,408  $71,110  $70,118  $69,594  $67,758 
Provision for loan losses500  4,900  600  1,000  1,500 
Recoveries769  955  2,171  975  1,461 
Charge offs(821) (557) (1,779) (1,451) (1,125)
Balance at end of period$76,856  $76,408  $71,110  $70,118  $69,594 
Net charge offs/average gross loans (annualized)% (0.03)% (0.03)% 0.03% (0.02)%
          
 Three Months Ended
NET CHARGED OFF LOANS  BY TYPE3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Real estate loans$(390) $(254) $(505) $13  $(460)
Commercial loans379  (127) (25) 560  111 
Consumer loans63  (17) 138  (97) 13 
  Charge offs excluding Acquired Credit Impaired Loans52  (398) (392) 476  (336)
Charge offs on Acquired Credit Impaired Loans         
  Total net charge offs$52  $(398) $(392) $476  $(336)


 
BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
          
NONPERFORMING ASSETS3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Delinquent loans on nonaccrual status 3$43,548  $40,801  $32,446  $39,681  $38,755 
Delinquent loans 90 days or more on accrual status 445  375    333   
Accruing restructured loans52,760  47,984  54,274  57,393  57,905 
Total nonperforming loans96,353  89,160  86,720  97,407  96,660 
Other real estate owned19,794  21,035  21,350  20,187  19,606 
Total nonperforming assets$116,147  $110,195  $108,070  $117,594  $116,266 
Nonperforming assets/total assets1.44% 1.39% 1.43% 1.60% 1.60%
Nonperforming assets/loans receivable & OREO1.82% 1.76% 1.80% 2.01% 2.03%
Nonperforming assets/total capital12.07% 11.75% 11.63% 12.94% 12.93%
Nonperforming loans/loans receivable1.51% 1.43% 1.45% 1.67% 1.69%
Nonaccrual loans/loans receivable0.68% 0.65% 0.54% 0.68% 0.68%
Allowance for loan losses/loans receivable1.21% 1.22% 1.19% 1.21% 1.22%
Allowance for loan losses/nonaccrual loans176.49% 187.27% 219.16% 176.70% 179.57%
Allowance for loan losses/nonperforming loans79.77% 85.70% 82.00% 71.98% 72.00%
Allowance for loan losses/nonperforming assets66.17% 69.34% 65.80% 59.63% 59.86%
          
3  Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.4 million, $18.7 million, $19.9 million, $22.6 million, and $26.0 million at March 31, 2016, December 31, 2015, September, 30, 2015, June 30, 2015, and March 31, 2015, respectively.
4  Excludes Acquired Credit Impaired Loans totaling $13.1 million, $12.2 million, $18.5 million, $23.0 million, and $24.1 million, at March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015, respectively.
          
BREAKDOWN OF ACCRUING RESTRUCTURED LOANS BY TYPE:3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Retail buildings$4,598  $5,593  $5,631  $5,705  $5,956 
Hotels/motels1,336  1,342  7,632  8,012  8,095 
Gas stations/car washes840  845       
Mixed-use facilities1,117  1,124  775  844  784 
Warehouses5,575  5,635  5,698  5,759  6,180 
Multifamily         
Other 539,294  33,445  34,538  37,073  36,890 
Total$52,760  $47,984  $54,274  $57,393  $57,905 
          
Includes commercial business and other loans         
          
          
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Legacy         
30 - 59 days$4,488  $3,104  $4,380  $3,457  $4,901 
60 - 89 days1,510  1,678  2,874  1,546  1,565 
  Total delinquent loans less than 90 days past due - legacy$5,998  $4,782  $7,254  $5,003  $6,466 
          
Acquired         
30 - 59 days$1,456  $3,170  $2,382  $1,553  $1,294 
60 - 89 days47  39  147  629  66 
  Total delinquent loans less than 90 days past due - acquired$1,503  $3,209  $2,529  $2,182  $1,360 
          
  Total delinquent loans less than 90 days past due$7,501  $7,991  $9,783  $7,185  $7,826 
          


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
          
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE BY TYPE3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
          
Legacy         
Real estate loans$1,624  $2,179  $2,467  $2,240  $2,127 
Commercial loans1,441  1,676  4,737  2,734  4,082 
Consumer loans2,933  927  50  29  257 
  Total delinquent loans less than 90 days past due - legacy$5,998  $4,782  $7,254  $5,003  $6,466 
          
Acquired         
Real estate loans$1,189  $2,572  $2,335  $1,843  $1,145 
Commercial loans314  349  164  333  199 
Consumer loans  288  30  6  16 
  Total delinquent loans less than 90 days past due - acquired$1,503  $3,209  $2,529  $2,182  $1,360 
          
  Total delinquent loans less than 90 days past due$7,501  $7,991  $9,783  $7,185  $7,826 
          
          
NONACCRUAL LOANS  BY TYPE3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
          
Real estate loans$26,123  $24,375  $23,361  $25,922  $25,126 
Commercial loans16,842  15,600  7,995  12,031  12,591 
Consumer loans583  826  1,090  1,728  1,038 
  Total non-accrual loans$43,548  $40,801  $32,446  $39,681  $38,755 
          
CRITICIZED LOANS3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
Legacy         
Special mention$87,025  $85,945  $116,267  $102,725  $90,041 
Substandard129,314  126,880  97,225  103,074  111,162 
Doubtful133  20  184  220  228 
Loss         
  Total criticized loans - legacy$216,472  $212,845  $213,676  $206,019  $201,431 
          
Acquired         
Special mention$17,017  $18,241  $25,388  $27,070  $22,257 
Substandard71,954  74,482  79,774  90,262  96,655 
Doubtful1,997  2,194  1,537  1,833  1,947 
Loss         
  Total criticized loans - acquired$90,968  $94,917  $106,699  $119,165  $120,859 
          
  Total criticized loans$307,440  $307,762  $320,375  $325,184  $322,290 

 

Contact:
Angie Yang
SVP, Investor Relations
213-251-2219
angie.yang@BBCNbank.com

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