Q1 2015 Summary:Net income totals $21.4 million, or $0.27 per diluted common shareNew loan originations for the quarter total $351 millionLoans receivable increase 3% to $5.71 billion, or 10% annualizedTotal deposits increase 2% to $5.80 billion, or 8% annualizedTotal assets increase 2% to $7.26 billion, or 9% annualizedLOS ANGELES, April 20, 2015 (MILITARY-TECHNOLOGIES.NET) -- BBCN Bancorp, Inc. (the "Company") (Nasdaq:BBCN), the holding company of BBCN Bank (the "Bank"), today reported net income of $21.4 million, or $0.27 per diluted common share, for the three months ended March 31, 2015. This compares with net income of $22.7 million, or $0.29 per diluted common share, for the preceding 2014 fourth quarter and $22.2 million, or $0.28 per diluted common share, for the year-ago first quarter."Strong organic loan and deposit growth, along with improvements in asset quality, highlight BBCN's 2015 first quarter," said Kevin S. Kim, Chairman and Chief Executive Officer of BBCN Bancorp, Inc. "New loan production for the first quarter exceeded the seasonally higher fourth quarter originations by 15% and totaled $351 million. Deposit trends were also positive with noninterest bearing demand deposits increasing to 28% of total deposits. We experienced improvements in asset quality across the board, with a 16% decline in nonaccrual loans and net recoveries of $366,000 for the first quarter. While we continue to be challenged by the low interest rate environment and diminishing purchase accounting benefit, we are very pleased to have posted another quarter of solid operational and financial performance to start off 2015."After considerable investment in 2014, we are taking a major step forward in BBCN's transformation to become a more diversified financial institution with the launch of our new residential mortgage, wealth management and credit card business lines. We expect a strong reception by our existing customer base to BBCN's expanded offering of financial products and services and believe these new businesses will not only deepen our existing relationships, but also open the door for more customer acquisition opportunities, ultimately leading to enhanced earnings and shareholder value for BBCN in the years to come," said Kim.Financial HighlightsOperating Results for the 2015 First QuarterThe 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 past financial performance. Operating results for the three months ended March 31, 2015, December 31, 2014, and March 31, 2014 include the following pre-tax acquisition accounting adjustments related to past acquisitions:Net Interest Income and Net Interest Margin. Net interest income before provision for loan losses for the 2015 first quarter amounted to $65.1 million, compared with $66.2 million in the preceding fourth quarter of 2014 and $65.0 million in the prior-year first quarter. While the average loans receivable reflect solid gains over prior periods, diminishing acquisition accounting adjustments and lower yields on interest earning assets had the adverse effect of constraining the growth in net interest income. Overall, average loans receivable for the 2015 first quarter rose 2% over the preceding fourth quarter and increased 8% over the first quarter of 2014.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:The net interest margin for the 2015 quarter declined 3 basis points from the preceding fourth quarter to 3.87%, but increased 4 basis points on a core basis when excluding the effect of acquisition accounting adjustments. Compared with the year-ago first quarter, net interest margin for the 2015 first quarter declined 42 basis points and decreased 21 basis points when excluding the effect of acquisition accounting adjustments. The Company attributed the pressures on net interest margin largely to declines in the weighted average yield on loans.The weighted average yield on loans and the impact of acquisition accounting adjustments are summarized in the following table:The weighted average yield on loans for the 2015 first quarter declined 8 basis points to 5.03% from the preceding fourth quarter. On a core basis excluding the effect of acquisition accounting adjustments, the weighted average yield on loans was flat at 4.71%. The weighted average yield on new loans originated during the 2015 first quarter decreased to 4.07% from 4.39% in the preceding fourth quarter, reflecting higher origination levels of variable rate loans and commercial loans. Variable rate loans, which typically have lower initial rates than fixed rate loans, accounted for 68% of new loan originations for the 2015 first quarter and marked the third consecutive period in which variable rate loan volumes exceeded fixed rate loans.Compared with the prior-year period, the weighted average yield on loans decreased 34 basis points and 12 basis points on a core basis, excluding the effect of acquisition accounting adjustments.The composition of fixed and variable rate loans and the associated weighted average contractual rates are summarized in the following table: The declines in the weighted average contractual rate for the 2015 first quarter versus prior periods reflect what continues to be a highly competitive rate environment for fixed rate and variable rate loans in the current interest rate environment.The weighted average cost of deposits and the impact of acquisition accounting adjustments are summarized in the following table: The weighted average cost of deposits for the 2015 first quarter was flat with the preceding fourth quarter both on a reported basis and on a core basis, excluding the effect of amortization of premium on time deposits assumed in acquisitions. Compared with the prior-year period, the weighted average cost of deposits for the 2015 first quarter increased 3 basis points and just 1 basis point on a core basis, excluding the effect of premium amortization on time deposits assumed in acquisitions.Noninterest Income. Noninterest income for the 2015 first quarter totaled $11.2 million, compared with $12.1 million in the preceding 2014 fourth quarter and $11.1 million in the prior-year first quarter. The variances in noninterest income is largely attributable to the amount of gain on sale of SBA loans, which amounted to $3.0 million in the 2015 first quarter, $4.1 million in the 2014 fourth quarter, and $2.7 million for the year-ago first quarter.Noninterest Expense. Total noninterest expense for the 2015 first quarter increased to $39.2 million from $39.0 million in the preceding 2014 fourth quarter and $36.3 million in the first quarter a year ago.Salaries and employee benefits expense for the 2015 first quarter rose 10% over the preceding fourth quarter, and is largely attributed to higher levels of payroll tax and vacation accruals. The total number of FTEs as of March 31, 2015 was 933, compared with 915 as of December 31, 2014 and 860 as of March 31, 2014. Compared with the 2014 first quarter, salaries and employee benefits expense increased 12%.Income Tax Provision. The effective tax rate for the 2015 first quarter was 40.0%, compared with 38.5% for the preceding 2014 fourth quarter and 39.6% for the 2014 first quarter.Balance Sheet SummaryLoans receivable totaled $5.71 billion at March 31, 2015, reflecting a 3% increase over $5.57 billion at December 31, 2014, and a 10% increase over $5.19 billion at March 31, 2014.Total new loan originations during the first quarter of 2015 amounted to $350.8 million, including SBA loan originations of $65.3 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. Production of SBA 7(a) loans amounted to $42.9 million for the first quarter of 2015, compared with $48.3 million for the preceding 2014 fourth quarter. During the 2015 first quarter, the Company sold $32.5 million of its SBA loans held for sale.Aggregate pay offs and pay downs for the 2015 first quarter amounted to $166.3 million for the quarter, compared with $262.2 million for the preceding 2014 fourth quarter and $195.9 million for the year-ago first quarter.Total deposits amounted to $5.80 billion at March 31, 2015, reflecting a 2% increase over $5.69 billion at December 31, 2014, and a 9% increase over $5.33 billion at March 31, 2014. The increase in total deposits from December 31, 2014 reflects a 5% increase in noninterest bearing demand deposits and a 6% increase in jumbo time deposits, offset in part by a 4% decrease in money market account balances. Noninterest bearing deposits at March 31, 2015 totaled $1.62 billion and accounted for 28% of total deposits.Credit QualityThe provision for loan losses for the 2015 first quarter was $1.5 million, compared with $2.4 million for the preceding 2014 fourth quarter and $3.0 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, 2015, December 31, 2014, and March 31, 2014 is as follows:Following are the components of criticized loan balances as of March 31, 2015, December 31, 2014, and March 31, 2014: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 declined to $38.8 million, or 0.68% of loans receivable at March 31, 2015. This compares with nonaccrual loans of $46.4 million, or 0.83% of loans receivable, at December 31, 2014 and $47.3 million, or 0.91% of loans receivable, at March 31, 2014. Accruing restructured loans totaled $57.9 million at March 31, 2015, compared with $57.1 million at December 31, 2014 and $37.5 million at March 31, 2014. Total nonperforming loans at March 31, 2015 decreased to $96.7 million, or 1.69% of loans receivable, compared with $103.8 million, or 1.87% of loans receivable, at December 31, 2014 and $84.8 million, or 1.63% of loans receivable, at March 31, 2014.Nonperforming assets, including other real estate owned, amounted to $116.3 million at March 31, 2015, or 1.60% of total assets, compared with $125.8 million, or 1.76% of total assets, at December 31, 2014, and $104.8 million, or 1.57% of total assets, at March 31, 2014.The Company recorded net recoveries of $336,000 for the 2015 first quarter, equal to 0.02% of average loans receivable on an annualized basis. This compares with net loan charge offs of $2.8 million, or 0.21% of average loans receivable on an annualized basis, for the preceding 2014 fourth quarter and $4.6 million, or 0.36% of average loans receivable on an annualized basis, for the year-ago first quarter.The allowance for loan losses at March 31, 2015 was $69.6 million, or 1.22% of loans receivable (excluding loans held for sale), compared with $67.8 million, or 1.22%, at December 31, 2014 and $65.7 million, or 1.27%, at March 31, 2014. The coverage ratio of the allowance for loan losses to nonperforming loans (excluding acquired credit impaired loans) was 72.00% at March 31, 2015, versus 65.25% at December 31, 2014 and 77.44% at March 31, 2014.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 and restructured loans) totaled $122.7 million at March 31, 2015, compared with $127.1 million at December 31, 2014 and $121.8 million at March 31, 2014.CapitalAt March 31, 2015, the Company continued to exceed all regulatory capital requirements to be classified as a "well-capitalized" institution, as summarized in the following table.Tangible common equity per share and as a percentage of tangible assets are summarized in the following table:(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 CallThe Company will host an investor conference call on Tuesday, April 21, 2015 at 9:30 a.m. Pacific Time / 12:30 p.m. Eastern Time to review financial results for the 2015 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 28, 2015, passcode 10063803.About BBCN Bancorp, Inc.BBCN Bancorp, Inc. is the holding company of BBCN Bank, the largest Korean-American bank in the nation with $7.3 billion in assets as of March 31, 2015. 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 StatementsThis 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)Angie Yang
SVP, Investor Relations
213-251-2219
Source: Globenewswire Public
BBCN Bancorp Reports 2015 First Quarter Financial Results