Wilshire Bancorp Announces Purchase of Certain Assets and the Partial Assumption of Operations of Bank of Manhattan's Mortgag...
February 09 2015 - 4:30PM
Wilshire Bancorp, Inc. (Nasdaq:WIBC), the parent company of
Wilshire Bank, announced today the signing of an asset purchase
agreement in which Wilshire will acquire certain assets and assume
certain operations of Bank of Manhattan's Mortgage Lending
Division. First formed in 2010, the Mortgage Lending Division has
primarily offered conforming, super-conforming and jumbo
residential mortgage products, and has originated over $3.0 billion
in residential loans since 2012.
Wilshire Bancorp is acquiring and will operate on an ongoing
basis a scaled down model of Bank of Manhattan's current mortgage
lending operations:
- Wilshire will continue to conduct mortgage lending operations
at certain existing loan production offices while others will be
consolidated into existing Wilshire premises.
- Wilshire plans to retain the high performing employees
consisting of selected loan officers and operations personnel.
- Significant cost savings have been identified which will
increase the combined mortgage operations efficiency.
Consummation of the transaction is subject to the satisfaction
of general closing conditions. The transaction is expected to close
on February 27, 2015.
The anticipated financial impact of the transaction for the
first year of operations subsequent to the transaction includes the
following:
- Wilshire expects the acquired mortgage lending division to
originate approximately $550 million in residential mortgage
loans.
- The loans originated after the acquisition are expected to
contribute approximately $1.0 million in net interest income and
$15.0 million in gain on sale and other income.
- The addition of the two locations, retained employees, and
other costs are expected to add approximately $13.0 million to
Wilshire's non-interest expense.
- The transaction is expected to be immediately accretive to
earnings per share and generate net income before tax of
approximately $3.0 million.
- Minimal capital outlay and acquisition-related costs.
Anticipated strategic benefits from the transaction include:
- Substantially increasing Wilshire's residential mortgage
origination platform;
- Increasing the non-interest income component of Wilshire's
revenue mix;
- Further diversifying Wilshire's loan portfolio and helping to
reduce the concentration of commercial real estate loans;
- Incremental loan production opportunities will be added by
expanding the mortgage lending division's production from Southern
California to other Wilshire Bank markets in Texas and New York/New
Jersey; and
- Increasing the Company's exposure to non-ethnic markets and
generating cross-selling opportunities for deposit products in
markets.
"The addition of the Mortgage Lending Division operations is a
significant step in the continued growth of our franchise," said
Jae Whan Yoo, President and Chief Executive Officer of Wilshire
Bancorp. "We believe the Mortgage Lending Division can steadily
grow to the point of originating more than $1 billion in loans
annually and will position Wilshire Bancorp as the leading mortgage
lender in the Korean-American banking industry. With our
existing residential mortgage unit, we believe we are well suited
to efficiently integrate the personnel and locations we will be
adding from Bank of Manhattan and capture the synergies that will
make this transaction accretive to our earnings in 2015. We
believe this transaction will provide another catalyst for growing
Wilshire Bancorp in the future, while also creating a more
diversified business model."
ABOUT WILSHIRE BANCORP
Headquartered in Los Angeles, Wilshire Bancorp is the parent
company of Wilshire Bank, which operates 33 branch offices in
California, Texas, New Jersey and New York, and 4 loan production
offices in Atlanta, GA, Aurora, CO, Newark, CA, and Federal Way,
WA, and is an SBA preferred lender nationwide. Wilshire Bank is a
community bank with a focus on commercial real estate lending and
general commercial banking, with its primary market encompassing
the multi-ethnic populations of the Los Angeles metropolitan
area. For more information, please go to
www.wilshirebank.com.
FORWARD-LOOKING STATEMENTS
Statements concerning future performance, events, or any other
guidance on future periods constitute forward-looking statements
that are subject to a number of risks and uncertainties that might
cause actual results to differ materially from stated expectations.
Undue reliance should not be placed on forward-looking statements,
as they are subject to risks and uncertainties, including but not
limited to the risk factors set forth in our most recent Annual
Report on Form 10-K and our other reports filed with or furnished
to the Securities and Exchange Commission. Specific factors
that could cause future results to differ materially from
historical performance and these forward-looking statements
include, but are not limited to: 18i) the risk that a condition to
closing of the transaction may not be satisfied; (ii) the timing to
consummate the proposed transaction; (iii) the risk that the
businesses will not be integrated successfully; (iv) the risk that
the cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
(v) disruption from the transaction making it more difficult to
maintain relationships with customers, employees or vendors; (vi)
the diversion of management time on transaction-related issues;
(vii) general worldwide economic conditions. and related
uncertainties; (viii) the effect of changes in governmental
regulations; (ix) credit risk associated with an obligor's failure
to meet the terms of any contract with the bank or to otherwise
perform as agreed; (x) interest risk involving the effect of a
change in interest rates on both the bank's earnings and the market
value of the portfolio equity; (xi) liquidity risk affecting the
bank's ability to meet its obligations when they come due; (xii)
price risk focusing on changes in market factors that may affect
the value of traded instruments in "mark-to-market" portfolios;
(xiii) transaction risk arising from problems with service or
product delivery; (xiv) compliance risk involving risk to earnings
or capital resulting from violations of or nonconformance with
laws, rules, regulations, prescribed practices, or ethical
standards; (xv) strategic risk resulting from adverse business
decisions or improper implementation of business decisions; (xvi)
reputation risk that adversely affects earnings or capital arising
from negative public opinion; (xvii) terrorist activities risk that
results in loss of consumer confidence and economic disruptions;
(xviii) economic downturn risk resulting in deterioration in the
credit markets; (xix) greater than expected noninterest expenses;
(xx) excessive loan losses; and (xxi) other factors we discuss or
refer to in the "Risk Factors" section of our most recent Annual
Report on Form 10-K filed with the Securities and Exchange
Commission. The information in this press release speaks only as of
the date of this release and Wilshire Bancorp specifically
disclaims any duty to update the information in this press release,
expect as required by applicable law. Additional information on
these and other factors that could affect financial results are
included in the reports of Wilshire Bancorp filed with or furnished
to the Securities and Exchange Commission.
CONTACT: Alex Ko, EVP & CFO, (213) 427-6560
www.wilshirebank.com
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