Wilshire Bancorp Inc. swung to a loss in the second quarter after continued problems in its commercial real estate portfolio forced the bank holding company to pad its loan loss reserves.
Before markets opened Tuesday, the Koreatown parent of Wilshire State Bank reported a $4.6 million loss (15 cents per share), compared with net income of $12.8 million (44 cents) during the second quarter a year ago.
Analysts surveyed by Thomson Reuters expected a loss of 16 cents per share. Investors were encouraged by the results, which were better than Wilshire had expected. Earlier this month, the company said it expected a loss of as much as 17 cents per share.
The company recorded a $32.2 million loan loss provision, due in part to the sale of $48 million in non-performing and delinquent loans.
“We were able to dispose of a large number of problem loans with only a small impact to our capital ratios,” Chief Executive Joanne Kim said in a statement. “We will continue our proactive approach to managing credit quality including additional sales of non-performing and delinquent loans if problem assets remain elevated in the near future.”
Net interest income before the provision for loan losses was $29.2 million, up 39 percent from a year ago.
Shares were up 93 cents, or 13 percent, to $7.94 in afternoon trading.
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