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Wilshire Bancorp Inc. Message Board

  • plan.maestro plan.maestro Jan 24, 2012 3:54 AM Flag

    Results 2011

    Watching these results I wonder, why did they raise capital! Not that I complain because it opened me the opportunity to buy, but the only reasonable explanation seems to be Hanmi. Other hypothesis?

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    • Reiterating what Sam said,

      Some former execs were guilty of hiding some losses from examiners and not booking them.

      They generated losses for too long and had to reserve for their tax loss carryforwards rather than carry them as an asset.

      Their capital levels were too low as a result of the losses and the tax write-off. Also, don't forget they have that TARP stock that has to be paid off too.

      Net result was the Comptroller of the Currency and the bank entered into a memo of understanding as to future operations. Management also may have intentionally pushed shares down further in order to benefit themselves as 10% of the share issuance was reserved not just for themselves which would trigger reporting requirements but for family members who could flip the shares for a nice gain shortly after the issuance without bothering to let shareholders know they sold. They may be still holding the shares for all I know and I might have been o.k. with management buying the shares but relatives not subject to reporting rules crosses a line in my judgement.

      So bottom line here you have a nice company but you also have management who have a history of not being completely honest.

      Hanmi may be part of the reason for the spike in the share price but it sure wouldn't be a good reason for a spike in my not so humble opinion.

      • 1 Reply to cohsgrad
      • <<Some former execs were guilty of hiding some losses from examiners and not booking them.>>

        Credit numbers do not look so bad. Those provisions when Yoo took charge looks more like a case of setting the bar low

        <<They generated losses for too long and had to reserve for their tax loss carryforwards rather than carry them as an asset. Their capital levels were too low as a result of the losses and the tax write-off. Also, don't forget they have that TARP stock that has to be paid off too.>>

        As we see with their current capital ratios, they were not too low. 9% TCE ratio for gods sake. Remember TCE DOES NOT include the TARP prefs. They have much more capital than they need.

        <<Net result was the Comptroller of the Currency and the bank entered into a memo of understanding as to future operations. >>

        From the recent CCs, it does not look like regulators were too tough on this issue. It may be more a case of over-compensating to have them on the good side in case of a merger.

        <<Management also may have intentionally pushed shares down further in order to benefit themselves as 10% of the share issuance was reserved not just for themselves which would trigger reporting requirements but for family members who could flip the shares for a nice gain shortly after the issuance without bothering to let shareholders know they sold. They may be still holding the shares for all I know and I might have been o.k. with management buying the shares but relatives not subject to reporting rules crosses a line in my judgement. So bottom line here you have a nice company but you also have management who have a history of not being completely honest.>>

        You may have a point here

    • Hi, Plan,

      Hanmi's numbers were soft. So were WIBC's. Seems a long way to clearing.

      To your question, I had my doubt about capital raising, especially the total write off of tax asset leading to the secondary.

      Only nine months after the huge write off, the company is saying maybe some of the tax asset can still be captured. Whether it's due to MOU or other accounting convention, it distorted economic reality.

      The result was disastrous to the legacy shareholders that included me.

      Since this kind of abuse repeated elsewhere as well and it clearly show the lack of fiduciary responsibility by the board--who is in charge of watching out for shareholders--some kind of legal reform might be necessary to protect shareholders. That, I am afraid, is long way off, if ever.


      Simply adding the $1.5 million provision to the $13.4 million pretax income, we get annualized $59.6 million pretax, pre-provision income. That is roughly 2.2% on asset, a slight improvement from 3Q. This number was quite good as compared to banks in general, but still not quite what it used to be.
      Note the 2.2% needs to be adjusted upward if only we know the above excessive costs related to credit, OREO, etc.

      Loan production improved a little but still not quite enough to maintain loan size. If we include SBA loan production, it went south. This probably reflect a generally soft demand.

    • hi,
      what about Q4 result ?

      thank you.

 
WIBC
10.11-0.05(-0.49%)Jul 11 4:00 PMEDT

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