Thursday, Wilshire Bancorp, Inc. (WIBC), the holding company for Wilshire State Bank, reported a sharp decline in profit for the fourth-quarter from the year-ago quarter on higher provision for loan losses, despite a sizable increase in interest income and non-interest income.
Wilshire Bancorp fourth-quarter profit declined 36% to $3.14 million from $4.97 million in the prior-year period. Earnings per share declined to $0.11 from $0.17. On an average, nine analysts polled by Thomson Reuters expected the company to earn $0.03 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total interest income increased 23% to $44.61 million from $36.40 million, while total interest expense remained flat at $15.21 million, compared to $15.27 million in the year-ago period.
The company's net interest income increased 39% to $29.40 million from $21.12 million due to increased earning assets with the acquisition of the assets of Mirae Bank, as well as strong organic growth.
Provision for losses on loans and loan commitments increased 333% to $25.60 million from $5.91 million in the year-earlier quarter; bringing down net interest income after provision for losses on loans and loan commitments by 75% to $3.80 million from $15.21 million in the prior-year quarter.
Net interest margin decreased by one basis point to 3.73% from 3.74% in the year-ago quarter. During the fourth quarter, Wilshire was able to realize a gain on sale of investment securities of $9.6 million and a gain on sale of loans of $2 million.
Wilshire Bancorp's non-interest income rose 178% to $57.31 million from $20.64 million, while non-interest expense decreased 19% to $57.36 million from $48.40 million in the year-earlier quarter.
The allowance for loan losses as a percentage of total gross loans was strengthened to $62.1 million or 2.56% for the fourth quarter, compared to $29.4 million or 1.43% in the year-ago period.
Total assets increased to $3.43 million as on December 31, 2009 from $2.45 million last year. Total deposits increased 56% to $2.83 billion from $1.81 billion in the prior year due to a substantial increase in core deposits. As a result of continual growth in core deposits, Wilshire was able to pay off $90 million in Federal Home Loan Bank or FHLB borrowings during the fourth quarter. Compared to total FHLB borrowings of $322 million in the third quarter, borrowings were down by 28% to $232 million.
For the third quarter, the company has recorded a net loss available to common shareholders of $1.7 million or $0.06 per share.
For the full fiscal year, the company reported a decline in net income of $16.5 million or $0.56 per share from $26.3 million or $0.90 per share last year. Wall Street expected the company to report earnings of $0.48 per share for the quarter.
Year-to-date interest income increased 7% to $158.3 million from $148.6 million, while net interest income before provision for loan losses increased 20% to $99.46 million from $82.61 million last year. Provision for losses on loans and loan commitments was increased 466% to $68.60 million from $12.11 million last year.
WIBC is currently trading at $8.58, up $0.44 or 5.41%, on a volume of 127,241 shares on the Nasdaq.
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