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BBCN Bancorp Reports Solid Financial Results for 2016 Second Quarter

Q2 2016 Summary:

  • Net income totals $23.4 million, or $0.29 per diluted common share
  • New loan originations amount to $496.2 million
  • Loans receivable increase 5% year-to-date to $6.58 billion, or 13% year-over-year
  • Total deposits increase 5% year-to-date to $6.64 billion, or 15% year-over-year
  • Total assets increase 5% year-to-date to $8.34 billion, or 14% year-over-year

LOS ANGELES, July 18, 2016 (GLOBE NEWSWIRE) -- BBCN Bancorp, Inc. (the “Company”) (NASDAQ:BBCN), the holding company of BBCN Bank (the “Bank”), today reported net income of $23.4 million, or $0.29 per diluted common share, for the three months ended June 30, 2016.  This compares with net income of $23.6 million, or $0.30 per diluted common share, for the preceding 2016 first quarter and $22.9 million, or $0.29 per diluted common share, for the 2015 second quarter.  These results include merger-related expenses of $1.5 million, $1.2 million and $26,000 for the 2016 second quarter, 2016 first quarter and 2015 second quarter, respectively.

“We delivered another solid performance for the 2016 second quarter and believe the consistency of our financial performance quarter after quarter is a testament to the overall soundness of BBCN’s platform,” said Kevin S. Kim, Chairman and Chief Executive Officer of BBCN Bancorp, Inc.  “New loan originations were very strong, reaching a record second-quarter high of $496 million, boosted in part by a number of loans in our pipeline that carried over from the first to the second quarter.  The mix of new loan production also continues to show favorable trends with robust volumes of commercial loans and a growing base of consumer loan originations, in line with the ramp up of our residential mortgage product. While we continue to see stability in the average yield on new loans, our core net interest margin declined 7 basis points linked quarter, reflecting the continued low interest rate environment.  Notwithstanding a significant reduction in acquisition accounting adjustments, merger-related expenses and a higher tax rate, our net earnings remained solid at $23.4 million for the 2016 second quarter.

“Importantly, we made meaningful progress in the second quarter with our planned merger of equals with Wilshire Bancorp, having received all regulatory approvals to move ahead with the transaction.  As previously announced, shareholder approvals have been received, and we are on track to complete the merger at the close of business on July 29, 2016.  This is indeed a very exciting time for us, and on behalf of the Board of Directors and employees at BBCN, we thank all of our shareholders for the overwhelming support of this transaction.  We look forward to keeping everyone apprised of the ongoing achievements of the organization under the new banner of Hope Bancorp, Inc. and Bank of Hope.”

Financial Highlights

(dollars in thousands, except per share data)At or for the Three Months Ended
 6/30/2016 3/31/2016 6/30/2015
Net income$23,390  $23,623  $22,941 
Diluted earnings per share$0.29  $$0.30  $0.29 
Net interest income before provision for loan losses$71,064  $71,607  $67,391 
Net interest margin 3.67%  3.84%  3.91%
Noninterest income$10,707  $8,775  $10,483 
Noninterest expense$40,348  $40,049  $38,613 
Net loans receivable$6,507,812  $6,295,079  $5,745,706 
Deposits$6,637,522  $6,467,411  $5,758,290 
Nonaccrual loans (1)$42,398  $43,548  $39,681 
ALLL to loans receivable 1.16%  1.21%  1.21%
ALLL to nonaccrual loans (1) 180.26%  176.49%  176.70%
ALLL to nonperforming assets (1) (2) 69.62%  66.17%  59.63%
Provision for loan losses$1,200  $500  $1,000 
Net charge offs$1,631  $52  $476 
ROA 1.15%  1.20%  1.26%
ROE 9.67%  9.99%  10.13%
Efficiency ratio 49.34%  49.82%  49.58%
            

(1) Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.5 million, $15.4 million and $22.6 million at June 30, 2016, March 31, 2016, and June 30, 2015, respectively.
(2) Nonperforming assets exclude acquired credit impaired loans totaling $13.8 million, $13.1 million and $23.0 million at June 30, 2016, March 31, 2016, and June 30, 2015, respectively.

Operating Results for the 2016 Second Quarter

The comparability of BBCN’s operating results with past performance is impacted by acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions .  The Company provides the following supplemental information to facilitate a better understanding of financial performance.  Net interest income and operating for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015 include the following pre-tax acquisition accounting adjustments and merger-related expenses associated with past and current acquisitions:

(dollars in thousands)Three Months Ended
 6/30/2016 3/31/2016 6/30/2015
Accretion of discount on acquired performing loans$898  $1,966  $2,515 
Accretion of discount on acquired credit impaired loans 1,436   1,965   1,818 
Amortization of premium on acquired FHLB borrowings 97   97   95 
Accretion of discount on acquired subordinated debt (44)  (44)  (42)
Amortization of premium on acquired time deposits 24   24   49 
Total acquisition accounting adjustments$2,411  $4,008  $4,435 
Merger-related expenses (1,533)  (1,207)  (26)
Total$878  $2,801  $4,409 
            

Net Interest Income and Net Interest Margin.  Net interest income before provision for loan losses for the 2016 second quarter totaled $71.1 million, down modestly from $71.6 million in the preceding 2016 first quarter.  The Company attributed the reduction to a $1.6 million reduction in acquisition accounting adjustments from the preceding first quarter, which more than offset the benefit of a 3% linked quarter increase in average loans receivable.

Compared with the 2015 second quarter, net interest income before provision for loan losses rose 5% over $67.4 million in the year-ago second quarter.  The Company attributed the increase to the benefit of a 12% increase in average loans receivable and a 33% increase in average securities available for sale.  These increases were partially offset by a $2.0 million decrease year-over-year in acquisition accounting adjustments.

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
 6/30/2016 3/31/2016 change 6/30/2015 change
Net interest margin, excluding the effect of acquisition accounting adjustments3.53% 3.60% (0.07) 3.63% (0.10)
Acquisition accounting adjustments0.14  0.24  (0.10) 0.28  (0.14)
Net interest margin3.67% 3.84% (0.17) 3.91% (0.24)
               

The net interest margin for the 2016 second quarter was 3.67%, down 17 basis points from the preceding first quarter and down 24 basis points from the year-ago second quarter.  On a core basis, excluding the effect of acquisition accounting adjustments, the net interest margin for the 2016 second quarter declined by 7 basis points from the preceding first quarter and was down 10 basis points from the year-ago second quarter.

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

 Three Months Ended
 6/30/2016 3/31/2016 change 6/30/2015 change
Weighted average yield on loans, excluding the effect of acquisition accounting adjustments4.63% 4.66% (0.03) 4.64% (0.01)
Acquisition accounting adjustments0.17  0.29  (0.12) 0.34  (0.17)
Weighted average yield on loans4.80% 4.95% (0.15) 4.98% (0.18)
               

The weighted average yield on loans for the 2016 second quarter declined 15 basis points from the preceding 2016 first quarter and declined 18 basis points from the year-ago second quarter.  On a core basis, excluding the effect of acquisition accounting adjustments, the weighted average yield on loans declined by just 3 basis points from the preceding first quarter and just 1 basis point from the 2015 second quarter.

The weighted average yield on new loans originated during the 2016 second quarter was stable at 4.28%, down just 1 basis point from 4.29% in each of the 2016 first and 2015 second quarters.

The weighted average cost of deposits for the 2016 second quarter increased 1 basis point to 0.64% from the preceding first quarter and 9 basis points from the year-ago second quarter.  The Company noted that there was no impact on the weighted average cost of deposits from the effect of premium amortization on time deposits assumed in acquisitions.

Noninterest Income Noninterest income for the 2016 second quarter increased to $10.7 million from $8.8 million in the preceding 2016 first quarter and from $10.5 million in the year-ago second quarter.  The variance in noninterest income was largely due to the gains on sales of SBA loans in each respective quarter.  The Company posted gains on sales of SBA loans of $3.0 million, $1.8 million, and $3.1 million for the 2016 second quarter, 2016 first quarter, and 2015 second quarter, respectively.

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 second quarter, 2016 first quarter and 2015 second quarter totaled $40.3 million, $40.0 million and $38.6 million, respectively.  Excluding merger related expenses of $1.5 million, $1.2 million and $26,000 for the 2016 second quarter, 2016 first quarter and 2015 second quarter, respectively, total noninterest expense was $38.8 million, $38.8 million and $38.6 million. Salaries and employee benefits expense totaled $21.8 million for the 2016 second quarter, $21.6 million for the 2016 first quarter and $20.9 million for the year-ago second quarter. The total number of FTEs as of June 30, 2016 was 918, compared with 945 as of March 31, 2016 and 927 as of June 30, 2015.

Income Tax Provision.  The effective tax rate for the 2016 second quarter was 41.8%, compared with 40.7% for the preceding 2016 first quarter and 40.0% for the 2015 second quarter.

Balance Sheet Summary

Loans receivable totaled $6.58 billion at June 30, 2016, reflecting a 3% increase over $6.37 billion at March 31, 2016, and a 13% increase over $5.82 billion at June 30, 2015.

Total new loan originations during the 2016 second quarter amounted to $496.2 million, including SBA loan originations of $58.7 million. Sales of SBA loans to the secondary market and gains derived from those sales are based substantially on the production of SBA 7(a) loans.  Production of SBA 7(a) loans totaled $56.7 million for the second quarter of 2016, compared with $37.6 million for the preceding 2016 first quarter and $58.3 million for the 2015 second quarter.  During the 2016 second quarter, the Company sold $39.6 million of its SBA loans held for sale, compared with $23.8 million in the preceding first quarter and $34.2 million in the year-ago second quarter.

Aggregate pay offs and pay downs for the 2016 second quarter amounted to $235.6 million, compared with $201.9 million for the preceding 2016 first quarter and $216.5 million for the year-ago second quarter.

Total deposits increased to $6.64 billion at June 30, 2016, up 3% from $6.47 billion at March 31, 2016, largely reflecting increases in noninterest bearing deposits and money market accounts.  Compared with June 30, 2015, deposits grew 15% over $5.76 billion at June 30, 2015 reflecting increases in all deposit categories except savings accounts.

Credit Quality

The provision for loan losses for the 2016 second quarter was $1.2 million, compared with $500,000 for the preceding 2016 first quarter and $1.0 million for the prior-year second 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 June 30, 2016, March 31, 2016, and June 30, 2015 is as follows:

(dollars in thousands)6/30/2016
 3/31/2016
 6/30/2015
Legacy Loans (1)$63,616  $64,016  $55,563 
Acquired Loans - Performing (2) 860   963   1,908 
Acquired Loans - Credit Impaired (2) 11,949   11,877   12,647 
Total ALLL$76,425  $76,856  $70,118 
            
Loans Receivable$6,584,237  $6,371,935  $5,815,824 
ALLL coverage ratio 1.16%  1.21%  1.21%
            

(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 June 30, 2016, March 31, 2016, and June 30, 2015:

(dollars in thousands)6/30/2016 3/31/2016 6/30/2015
Special Mention (1)$100,370 $104,042 $129,795
Classified (1) 198,857  203,398  195,389
Criticized$299,227 $307,440 $325,184
         

(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 June 30, 2016 totaled $42.4 million, or 0.64% of loans receivable.   This compares with nonaccrual loans of $43.5 million, or 0.68% of loans receivable, at March 31, 2016 and $39.7 million, or 0.68% of loans receivable, at June 30, 2015.  Accruing restructured loans declined to $50.8 million at June 30, 2016, from $52.8 million at March 31, 2016 and $57.4 million at June 30, 2015.  Total nonperforming loans at June 30, 2016 declined to $93.4 million, or 1.42% of loans receivable.  This compares with total nonperforming loans of $96.4 million, or 1.51% of loans receivable, at March 31, 2016 and $97.4 million, or 1.67% of loans receivable, at June 30, 2015.

Nonperforming assets, including nonperforming loans and other real estate owned, declined to $109.8 million, or 1.32% of total assets, at June 30, 2016 from $116.1 million, or 1.44% of total assets, at March 31, 2016 and $117.6 million, or 1.60% of total assets, at June 30, 2015.

For the 2016 second quarter, the Company recorded net charge offs of $1.6 million, or 0.10% of average loans receivable on an annualized basis.  This compares with net charge offs of $52,000, or 0.00% of average loans receivable on an annualized basis for the 2016 first quarter, and $476,000, or 0.03% of average loans receivable on an annualized basis, for the 2015 second quarter.

The allowance for loan losses at June 30, 2016 was $76.4 million, or 1.16% of loans receivable (excluding loans held for sale), compared with $76.9 million, or 1.21%, at March 31, 2016 and $70.1 million, or 1.21%, at June 30, 2015.   The coverage ratio of the allowance for loan losses to nonperforming loans (excluding acquired credit impaired loans) was 81.84% at June 30, 2016 versus 79.77% at March 31, 2016 and 71.98% at June 30, 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 $136.6 million at June 30, 2016, compared with $140.4 million at March 31, 2016 and $118.7 million at June 30, 2015.

Capital

At June 30, 2016, the Company continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” institution, as summarized in the following table.

 6/30/2016 3/31/2016 6/30/2015 Minimum Guideline
for “Well-Capitalized”
Institution
Common Equity Tier 1 Capital 11.66%  11.96%  12.58%  
Leverage Ratio 11.14%  11.44%  11.80%  5.00%
Tier 1 Risk-based Ratio 12.22%  12.54%  13.22%  5.00%
Total Risk-based Ratio 13.28%  13.64%  14.34%  10.00%
                

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

 6/30/2016 3/31/2016 6/30/2015
Tangible common equity per share (1)$10.85  $10.73  $10.05 
Tangible common equity to tangible assets (1) 10.50%  10.73%  11.07%
            

(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, July 19, 2016 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the 2016 second 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 July 26, 2016, passcode 10088805.

About BBCN Bancorp, Inc.

BBCN Bancorp, Inc. is the holding company of BBCN Bank, the largest Korean-American bank in the nation with $8.3 billion in assets as of June 30, 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.

Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the proposed merger transaction between BBCN Bancorp and Wilshire Bancorp and the expected timetable for completing the transaction, future operations and projected financial results. These statements are based on current expectations, estimates, forecasts and projections and management assumptions about the future performance of the combined company, as well as the businesses and markets in which the combined company operates and is expected to operate. These statements constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, involve certain risks, uncertainties and assumptions that are difficult to assess and  are not guarantees of future performance and.  Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. 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)
 
Assets6/30/2016 3/31/2016 % change 12/31/2015 % change 6/30/2015 % change
Cash and due from banks$286,173  $236,101  21% $298,389  (4)% $299,882  (5)%
Securities available for sale, at fair value1,099,944  1,087,897  1% 1,010,556  9% 871,405  26%
Federal Home Loan Bank, Federal Reserve Bank stock and other investments63,429  68,329  (7)% 66,859  (5)% 44,558  42%
Loans held for sale, at the lower of cost or fair value14,323  13,843  3% 8,273  73% 33,785  (58)%
Loans receivable6,584,237  6,371,935  3% 6,248,341  5% 5,815,824  13%
Allowance for loan losses(76,425) (76,856) 1% (76,408) % (70,118) (9)%
Net loans receivable6,507,812  6,295,079  3% 6,171,933  5% 5,745,706  13%
Accrued interest receivable15,787  15,660  1% 15,195  4% 13,781  15%
Premises and equipment, net37,663  35,134  7% 34,575  9% 35,321  7%
Bank owned life insurance47,562  47,292  1% 47,018  1% 46,466  2%
Goodwill105,401  105,401  % 105,401  % 105,401  %
Servicing assets12,193  11,856  3% 12,000  2% 10,935  12%
Other intangible assets, net2,395  2,607  (8)% 2,820  (15)% 3,354  (29)%
Other assets144,490  144,553  % 139,629  3% 122,725  18%
Total assets$8,337,172  $8,063,752  3% $7,912,648  5% $7,333,319  14%
                 
Liabilities                
Deposits$6,637,522  $6,467,411  3% $6,340,976  5% $5,758,290  15%
Borrowings from Federal Home Loan Bank610,398  530,495  15% 530,591  15% 580,785  5%
Subordinated debentures42,415  42,371  % 42,327  % 42,241  %
Accrued interest payable7,164  6,746  6% 6,007  19% 5,954  20%
Other liabilities67,933  54,747  24% 54,652  24% 37,461  81%
Total liabilities7,365,432  7,101,770  4% 6,974,553  6% 6,424,731  15%
                 
Stockholders’ Equity                
Common stock, $0.001 par value; authorized, 150,000,000 shares at June 30, 2016, March 31, 2016, December 31, 2015, and June 30, 2015; issued and outstanding, 79,606,821, 79,597,106, 79,566,356, and 79,542,321 shares at June 30, 2016, March 31, 2016, December 31, 2015, and June 30, 2015, respectively80  80  % 80  % 80  %
Capital surplus541,688  541,625  % 541,596  % 541,091  %
Retained earnings418,998  413,122  1% 398,251  5% 367,792  14%
Accumulated other comprehensive income (loss), net10,974  7,155  53% (1,832) 699% (375) 3,026%
Total stockholders’ equity971,740  961,982  1% 938,095  4% 908,588  7%
Total liabilities and stockholders’ equity$8,337,172  $8,063,752  3% $7,912,648  5% $7,333,319  14%
              


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 Three Months Ended Six Months Ended
 6/30/2016 3/31/2016 % change 6/30/2015 % change 6/30/2016 6/30/2015 % change
Interest income:               
  Interest and fees on loans$77,086  $77,118  % $71,249  8% $154,204  $140,888  9%
  Interest on securities5,729  5,677  1% 4,203  36% 11,406  8,409  36%
  Interest on federal funds sold and other investments719  666  8% 1,623  (56)% 1,385  2,332  (41)%
  Total interest income83,534  83,461  % 77,075  8% 166,995  151,629  10%
                         
Interest expense:                        
  Interest on deposits10,352  9,907  4% 7,970  30% 20,259  15,724  29%
  Interest on other borrowings2,118  1,947  9% 1,714  24% 4,065  3,391  20%
  Total interest expense12,470  11,854  5% 9,684  29% 24,324  19,115  27%
                         
Net interest income before provision for loan losses71,064  71,607  (1)% 67,391  5% 142,671  132,514  8%
Provision for loan losses1,200  500  140% 1,000  20% 1,700  2,500  (32)%
Net interest income after provision for loan losses69,864  71,107  (2)% 66,391  5% 140,971  130,014  8%
                         
Noninterest income:                        
  Service fees on deposit accounts2,902  2,683  8% 3,030  (4)% 5,585  6,092  (8)%
  Net gains on sales of SBA loans3,035  1,825  66% 3,119  (3)% 4,860  6,163  (21)%
  Net gains on sales of other loans43    100% 45  (4)% 43  227  (81)%
  Net gains on sales of securities available for sale    %   %   424  (100)%
  Other income and fees4,727  4,267  11% 4,289  10% 8,994  8,625  4%
  Total noninterest income10,707  8,775  22% 10,483  2% 19,482  21,531  (10)%
                         
Noninterest expense:                        
  Salaries and employee benefits21,757  21,569  1% 20,932  4% 43,326  42,113  3%
  Occupancy4,920  4,817  2% 4,810  2% 9,737  9,502  2%
  Furniture and equipment2,337  2,287  2% 2,323  1% 4,624  4,586  1%
  Advertising and marketing1,402  1,136  23% 1,484  (6)% 2,538  2,875  (12)%
  Data processing and communications2,129  2,171  (2)% 2,463  (14)% 4,300  4,812  (11)%
  Professional fees1,273  1,083  18% 1,253  2% 2,356  2,677  (12)%
  FDIC assessment1,095  1,038  5% 909  20% 2,133  2,021  6%
  Credit related expenses911  421  116% 669  36% 1,332  1,525  (13)%
  OREO expense133  1,428  (91)% 1,221  (89)% 1,561  2,398  (35)%
  Merger related expenses1,533  1,207  27% 26  5,796% 2,740  78  3,413%
  Other2,858  2,892  (1)% 2,523  13% 5,750  5,103  13%
  Total noninterest expense40,348  40,049  1% 38,613  4% 80,397  77,690  3%
Income before income taxes40,223  39,833  1% 38,261  5% 80,056  73,855  8%
Income tax provision16,833  16,210  4% 15,320  10% 33,043  29,556  12%
Net income$23,390  $23,623  (1)% $22,941  2% $47,013  $44,299  6%
                
Earnings Per Common Share:               
  Basic$0.29  $0.30    $0.29    $0.59  $0.56   
  Diluted$0.29  $0.30    $0.29    $0.59  $0.56   
                
Average Shares Outstanding:               
  Basic79,604,673  79,583,188    79,549,097    79,595,599  79,539,789   
  Diluted79,634,762  79,613,245    79,569,875    79,625,673  79,563,944   
                     


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 At or for the Three Months Ended At or for the Six Months Ended
 (Annualized) (Annualized)
Profitability measures:6/30/2016 3/31/2016 6/30/2015 6/30/2016 6/30/2015
  ROA1.15% 1.20% 1.26% 1.17% 1.23%
  ROE9.67% 9.99% 10.13% 9.83% 9.86%
  Return on average tangible equity 110.88% 11.28% 11.51% 11.08% 11.23%
  Net interest margin3.67% 3.84% 3.91% 3.75% 3.89%
  Efficiency ratio49.34% 49.82% 49.58% 49.58% 50.43%
          
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
 6/30/2016 3/31/2016 6/30/2015
   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$6,457,883  $77,086  4.80% $6,269,428  $77,118  4.95% $5,742,153  $71,249  4.98%
Securities available for sale1,089,080  5,729  2.10% 1,016,865  5,677  2.23% 815,820  4,203  2.06%
FRB and FHLB stock and other investments237,872  719  1.20% 217,048  666  1.21% 352,690  1,623  1.82%
Total interest earning assets$7,784,835  $83,534  4.31% $7,503,341  $83,461  4.47% $6,910,663  $77,075  4.47%
                             
INTEREST BEARING LIABILITIES:                            
Deposits:                            
Demand, interest bearing$2,030,272  $4,147  0.82% $1,968,637  $4,004  0.82% $1,608,495  $2,873  0.72%
Savings178,249  285  0.64% 186,462  366  0.79% 194,053  416  0.86%
Time deposits:                            
$100,000 or more1,890,891  4,240  0.90% 1,806,609  4,057  0.90% 1,750,089  3,514  0.81%
Other745,761  1,680  0.91% 699,431  1,480  0.85% 609,654  1,167  0.77%
Total time deposits2,636,652  5,920  0.90% 2,506,040  5,537  0.89% 2,359,743  4,681  0.80%
Total interest bearing deposits4,845,173  10,352  0.86% 4,661,139  9,907  0.85% 4,162,291  7,970  0.77%
FHLB advances564,637  1,686  1.20% 532,206  1,523  1.15% 481,946  1,327  1.10%
Other borrowings40,861  431  4.18% 40,813  424  4.11% 40,670  387  3.76%
Total interest bearing liabilities5,450,671  $12,470  0.92% 5,234,158  $11,854  0.91% 4,684,907  $9,684  0.83%
Noninterest bearing demand deposits1,671,986       1,629,565         1,623,922      
Total funding liabilities/cost of funds$7,122,657    0.70% $6,863,723    0.69% $6,308,829    0.62%
Net interest income/net interest spread  $71,064  3.39%   $71,607  3.56%   $67,391  3.64%
Net interest margin    3.67%     3.84%     3.91%
Net interest margin, excluding effect of nonaccrual loan income (expense)    3.67%     3.84%     3.91%
Net interest margin, excluding effect of nonaccrual loan income (expense) and prepayment fee income    3.64%     3.81%     3.88%
Nonaccrual loan income reversed  $(21)     $(123)     $(21)  
Prepayment fee income received  528      631      457   
Net  $507      $508      $436   
                  
Cost of deposits:                 
Noninterest bearing demand deposits$1,671,986  $    $1,629,565  $    $1,623,922  $   
Interest bearing deposits4,845,173  10,352  0.86% 4,661,139  9,907  0.85% 4,162,291  7,970  0.77%
Total deposits$6,517,159  $10,352  0.64% $6,290,704  $9,907  0.63% $5,786,213  $7,970  0.55%
                                 


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
 Six Months Ended Six Months Ended
 6/30/2016 6/30/2015
   Interest Annualized   Interest Annualized
 Average Income/ Average Average Income/ Average
 Balance Expense Yield/Cost Balance Expense Yield/Cost
INTEREST EARNING ASSETS:           
Loans receivable, including loans held for sale$6,363,656  $154,204  4.87% $5,680,364  $140,888  5.00%
Securities available for sale1,052,972  11,406  2.17% 797,166  8,409  2.11%
FRB and FHLB stock and other investments227,460  1,385  1.20% 383,659  2,332  1.21%
Total interest earning assets$7,644,088  $166,995  4.39% $6,861,189  $151,629  4.45%
                  
INTEREST BEARING LIABILITIES:                 
Deposits:                 
Demand, interest bearing$1,999,454  $8,151  0.82% $1,617,021  $5,638  0.70%
Savings182,356  651  0.72% 194,555  841  0.87%
Time deposits:                 
$100,000 or more1,848,750  8,297  0.90% 1,731,812  6,891  0.80%
Other722,596  3,160  0.88% 617,879  2,354  0.77%
Total time deposits2,571,346  11,457  0.90% 2,349,691  9,245  0.79%
Total interest bearing deposits4,753,156  20,259  0.86% 4,161,267  15,724  0.76%
FHLB advances548,421  3,209  1.18% 481,447  2,624  1.10%
Other borrowings40,837  856  4.14% 40,647  767  3.75%
Total interest bearing liabilities5,342,414  $24,324  0.92% 4,683,361  $19,115  0.82%
Noninterest bearing demand deposits1,650,775       1,583,756      
Total funding liabilities/cost of funds$6,993,189    0.70% $6,267,117    0.61%
Net interest income/net interest spread  $142,671  3.47%   $132,514  3.63%
Net interest margin    3.75%     3.89%
Net interest margin, excluding effect of nonaccrual loan income (expense)    3.76%     3.89%
Net interest margin, excluding effect of nonaccrual loan income (expense) and prepayment fee income    3.72%     3.86%
Nonaccrual loan income reversed  $(144)      $(45)   
Prepayment fee income received  1,159       967    
Net  $1,015       $922    
              
Cost of deposits:             
Noninterest bearing demand deposits$1,650,775  $     $1,583,756  $    
Interest bearing deposits4,753,156  20,259  0.86% 4,161,267  15,724  0.76%
Total deposits$6,403,931  $20,259  0.64% $5,745,023  $15,724  0.55%
                      


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
  Three Months Ended Six Months Ended
AVERAGE BALANCES6/30/2016 3/31/2016 % change 6/30/2015 % change 6/30/2016 6/30/2015 % change
Loans receivable, including loans held for sale$6,457,883  $6,269,428  3% $5,742,153  12% $6,363,656  $5,680,364  12%
Investments1,326,952  1,233,913  8% 1,168,510  14% 1,280,432  1,180,825  8%
Interest earning assets7,784,835  7,503,341  4% 6,910,663  13% 7,644,088  6,861,189  11%
Total assets8,157,362  7,875,940  4% 7,264,687  12% 8,016,651  7,213,533  11%
                         
Interest bearing deposits4,845,173  4,661,139  4% 4,162,291  16% 4,753,156  4,161,267  14%
Interest bearing liabilities5,450,671  5,234,158  4% 4,684,907  16% 5,342,414  4,683,361  14%
Noninterest bearing demand deposits1,671,986  1,629,565  3% 1,623,922  3% 1,650,775  1,583,756  4%
Stockholders’ equity967,919  945,634  2% 906,310  7% 956,777  898,302  7%
Net interest earning assets2,334,164  2,269,183  3% 2,225,756  5% 2,301,674  2,177,828  6%
                
LOAN PORTFOLIO COMPOSITION:6/30/2016 3/31/2016 % change 12/31/2015 % change 6/30/2015 % change  
Commercial loans$1,111,219  $1,118,420  (1)% $1,079,316  3% $1,085,714  2%  
Real estate loans5,331,015  5,132,517  4% 5,069,482  5% 4,645,401  15%  
Consumer and other loans145,182  124,064  17% 102,573  42% 87,707  66%  
Loans outstanding6,587,416  6,375,001  3% 6,251,371  5% 5,818,822  13%  
Unamortized deferred loan fees - net of costs(3,179) (3,066) (4)% (3,030) (5)% (2,998) (6)%  
Loans, net of deferred loan fees and costs6,584,237  6,371,935  3% 6,248,341  5% 5,815,824  13%  
Allowance for loan losses(76,425) (76,856) 1% (76,408) % (70,118) (9)%  
Loan receivable, net$6,507,812  $6,295,079  3% $6,171,933  5% $5,745,706  13%  
                
REAL ESTATE LOANS BY PROPERTY TYPE:6/30/2016 3/31/2016 % change 12/31/2015 % change 6/30/2015 % change  
Retail buildings$1,365,808  $1,339,676  2% $1,326,516  3% $1,183,866  15%  
Hotels/motels1,155,928  1,079,649  7% 1,061,111  9% 969,980  19%  
Gas stations/car washes704,334  689,883  2% 667,496  6% 630,445  12%  
Mixed-use facilities400,559  381,955  5% 369,425  8% 349,600  15%  
Warehouses543,270  530,353  2% 529,255  3% 499,313  9%  
Multifamily260,708  251,780  4% 245,532  6% 213,256  22%  
Other900,408  859,221  5% 870,147  3% 798,941  13%  
Total$5,331,015  $5,132,517  4% $5,069,482  5% $4,645,401  15%  
                
DEPOSIT COMPOSITION6/30/2016 3/31/2016 % change 12/31/2015 % change 6/30/2015 % change  
Noninterest bearing demand deposits$1,717,045  $1,695,039  1% $1,694,427  1% $1,689,137  2%  
Money market and other2,176,978  1,951,561  12% 1,983,250  10% 1,615,974  35%  
Saving deposits173,549  181,779  (5)% 187,498  (7)% 196,998  (12)%  
Time deposits of $100,000 or more1,828,649  1,885,842  (3)% 1,772,984  3% 1,637,673  12%  
Other time deposits741,301  753,189  (2)% 702,817  5% 618,508  20%  
Total deposit balances$6,637,522  $6,467,410  3% $6,340,976  5% $5,758,290  15%  
                
DEPOSIT COMPOSITION (%)6/30/2016 3/31/2016   12/31/2015   6/30/2015    
Noninterest bearing demand deposits25.9% 26.2%   26.7%   29.3%    
Money market and other32.8% 30.2%   31.3%   28.1%    
Saving deposits2.6% 2.8%   3.0%   3.4%    
Time deposits of $100,000 or more27.6% 29.2%   28.0%   28.4%    
Other time deposits11.1% 11.6%   11.0%   10.8%    
Total deposit balances100.0% 100.0%   100.0%   100.0%    
                    


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
CAPITAL RATIOS6/30/2016 3/31/2016 12/31/2015 6/30/2015      
Total stockholders’ equity$971,740  $961,982  $938,095  $908,588       
Common Equity Tier 1 ratio11.66% 11.96% 12.08% 12.58%      
Tier 1 risk-based capital ratio12.22% 12.54% 12.67% 13.22%      
Total risk-based capital ratio13.28% 13.64% 13.80% 14.34%      
Tier 1 leverage ratio11.14% 11.44% 11.53% 11.80%      
Total risk weighted assets$7,329,828  $7,093,779  $6,905,154  $6,380,538       
Book value per common share$12.21  $12.09  $11.79  $11.42       
Tangible common equity to tangible assets 210.50% 10.73% 10.63% 11.07%      
Tangible common equity per share 2$10.85  $10.73  $10.43  $10.05       
              
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:        
 6/30/2016 3/31/2016 12/31/2015 6/30/2015      
Total stockholders’ equity$971,740  $961,982  $938,095  $908,588       
Less:  Goodwill and core deposit intangible assets, net(107,796) (108,008) (108,221) (108,755)      
Tangible common equity$863,944  $853,974  $829,874  $799,833       
              
Total assets$8,337,172  $8,063,752  $7,912,648  $7,333,319       
Less:  Goodwill and core deposit intangible assets, net(107,796) (108,008) (108,221) (108,755)      
Tangible assets$8,229,376  $7,955,744  $7,804,427  $7,224,564       
              
Common shares outstanding79,606,821  79,597,106  79,566,356  79,550,403       
              
Tangible common equity to tangible assets10.50% 10.73% 10.63% 11.07%      
Tangible common equity per share$10.85  $10.73  $10.43  $10.05       
              
  Three Months Ended Six Months Ended
ALLOWANCE FOR LOAN LOSSES:6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 6/30/2016 6/30/2015
Balance at beginning of period$76,856  $76,408  $71,110  $70,118  $69,594  $76,408  $67,758 
Provision for loan losses1,200  500  4,900  600  1,000  1,700  2,500 
Recoveries664  769  955  2,171  975  1,433  2,436 
Charge offs(2,295) (821) (557) (1,779) (1,451) (3,116) (2,576)
Balance at end of period$76,425  $76,856  $76,408  $71,110  $70,118  $76,425  $70,118 
Net annualized charge offs (recoveries) / average gross loans0.10% % (0.03)% (0.03)% 0.03% 0.05% 0.03%
              
 Three Months Ended Six Months Ended
NET CHARGED OFF (RECOVERED) LOANS  BY TYPE6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 6/30/2016 6/30/2015
Real estate loans$18  $(390) $(254) $(505) $13  $(372) $(447)
Commercial loans1,649  379  (127) (25) 560  2,028  671 
Consumer loans(36) 63  (17) 138  (97) 27  (84)
Charge offs (recoveries) excluding Acquired Credit Impaired Loans1,631  52  (398) (392) 476  1,683  140 
Charge offs on Acquired Credit Impaired Loans             
Total net charge offs (recoveries)$1,631  $52  $(398) $(392) $476  $1,683  $140 
                            


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
NONPERFORMING ASSETS6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Delinquent loans on nonaccrual status 3$42,398  $43,548  $40,801  $32,446  $39,681 
Delinquent loans 90 days or more on accrual status 4147  45  375    333 
Accruing restructured loans50,837  52,760  47,984  54,274  57,393 
Total nonperforming loans93,382  96,353  89,160  86,720  97,407 
Other real estate owned16,392  19,794  21,035  21,350  20,187 
Total nonperforming assets$109,774  $116,147  $110,195  $108,070  $117,594 
Nonperforming assets/total assets1.32% 1.44% 1.39% 1.43% 1.60%
Nonperforming assets/loans receivable & OREO1.66% 1.82% 1.76% 1.80% 2.01%
Nonperforming assets/total capital11.30% 12.07% 11.75% 11.63% 12.94%
Nonperforming loans/loans receivable1.42% 1.51% 1.43% 1.45% 1.67%
Nonaccrual loans/loans receivable0.64% 0.68% 0.65% 0.54% 0.68%
Allowance for loan losses/loans receivable1.16% 1.21% 1.22% 1.19% 1.21%
Allowance for loan losses/nonaccrual loans180.26% 176.49% 187.27% 219.16% 176.70%
Allowance for loan losses/nonperforming loans81.84% 79.77% 85.70% 82.00% 71.98%
Allowance for loan losses/nonperforming assets69.62% 66.17% 69.34% 65.80% 59.63%
          
3  Excludes delinquent SBA loans that are guaranteed and currently in liquidation totaling $15.5 million, $15.4 million, $18.7 million, $19.9 million, and $22.6 million at June 30, 2016, March 31, 2016, December 31, 2015, September, 30, 2015, and June 30, 2015, respectively.
4  Excludes Acquired Credit Impaired Loans totaling $13.8 million, $13.1 million, $12.2 million, $18.5 million, and $23.0 million, at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively.
          
BREAKDOWN OF ACCRUING RESTRUCTURED LOANS BY TYPE:6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Retail buildings$4,565  $4,598  $5,593  $5,631  $5,705 
Hotels/motels1,324  1,336  1,342  7,632  8,012 
Gas stations/car washes835  840  845     
Mixed-use facilities1,111  1,117  1,124  775  844 
Warehouses5,512  5,575  5,635  5,698  5,759 
Other 537,490  39,294  33,445  34,538  37,073 
Total$50,837  $52,760  $47,984  $54,274  $57,393 
          
Includes commercial business and other loans         
          
          
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Legacy         
30 - 59 days$2,920  $4,488  $3,104  $4,380  $3,457 
60 - 89 days1,427  1,510  1,678  2,874  1,546 
Total delinquent loans less than 90 days past due - legacy$4,347  $5,998  $4,782  $7,254  $5,003 
          
Acquired         
30 - 59 days$2,735  $1,456  $3,170  $2,382  $1,553 
60 - 89 days345  47  39  147  629 
Total delinquent loans less than 90 days past due - acquired$3,080  $1,503  $3,209  $2,529  $2,182 
          
Total delinquent loans less than 90 days past due$7,427  $7,501  $7,991  $9,783  $7,185 
          


BBCN Bancorp, Inc.
Selected Financial Data
Unaudited (dollars in thousands, except per share data)
 
DELINQUENT LOANS LESS THAN 90 DAYS PAST DUE BY TYPE6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Legacy         
Real estate loans$2,047  $1,624  $2,179  $2,467  $2,240 
Commercial loans2,215  1,441  1,676  4,737  2,734 
Consumer loans85  2,933  927  50  29 
Total delinquent loans less than 90 days past due - legacy$4,347  $5,998  $4,782  $7,254  $5,003 
          
Acquired         
Real estate loans$2,557  $1,189  $2,572  $2,335  $1,843 
Commercial loans211  314  349  164  333 
Consumer loans312    288  30  6 
Total delinquent loans less than 90 days past due - acquired$3,080  $1,503  $3,209  $2,529  $2,182 
          
Total delinquent loans less than 90 days past due$7,427  $7,501  $7,991  $9,783  $7,185 
          
          
NONACCRUAL LOANS  BY TYPE6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Real estate loans$25,306  $26,123  $24,375  $23,361  $25,922 
Commercial loans16,270  16,842  15,600  7,995  12,031 
Consumer loans822  583  826  1,090  1,728 
Total non-accrual loans$42,398  $43,548  $40,801  $32,446  $39,681 
          
CRITICIZED LOANS6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Legacy         
Special mention$80,923  $87,025  $85,945  $116,267  $102,725 
Substandard128,885  129,314  126,880  97,225  103,074 
Doubtful108  133  20  184  220 
Loss         
Total criticized loans - legacy$209,916  $216,472  $212,845  $213,676  $206,019 
          
Acquired         
Special mention$19,447  $17,017  $18,241  $25,388  $27,070 
Substandard67,261  71,954  74,482  79,774  90,262 
Doubtful2,603  1,997  2,194  1,537  1,833 
Loss         
Total criticized loans - acquired$89,311  $90,968  $94,917  $106,699  $119,165 
          
Total criticized loans$299,227  $307,440  $307,762  $320,375  $325,184 

 

Contact:
Angie Yang
SVP, Director of Investor Relations &
Corporate Communications
213-251-2219
angie.yang@BBCNbank.com

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