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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%
1 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
2 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
5 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

Source:BBCN Bancorp, Inc.

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