This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Wilshire Bancorp Tanks on Poor Outlook

LOS ANGELES (TheStreet) -- Shares of Wilshire Bancorp (WIBC) fell on heavy volume Friday after the bank warned of a surprise loss for the second quarter and temporarily suspended the five-cent dividend on its common stock because of souring loans.

The stock was off 85 cents, or 10%, to $7.70 in midday trades. Volume of roughly 620,000 was nearly five times the issue's trailing three-month daily average of around 126,000.

In a statement early Friday, Wilshire said it expects its net loss for the second quarter won't be greater than $5 million, or 17 cents a share. The bank, whose total assets stood at $3.46 billion as of March 31, cited an "elevated provision for loan losses and an increase in net loan charge-offs" for the loss view.

The average estimate of analysts polled by Thomson Reuters was for Wilshire to report a profit of 11 cents a share in the June quarter. Of the nine analysts covering the stock, seven rate it at hold.

Friday's press release followed an announcement shortly after Thursday's closing bell where Wilshire said it expected a loss for the quarter and announced the dividend suspension, but didn't provide a specific outlook.

"During the first half of 2010, we saw an acceleration of loans migrating to non-performing status and additional declines in underlying collateral values of our problem loans," said Ms. Joanne Kim, President and CEO of Wilshire Bancorp, said in Thursday's statement. In announcing the dividend suspension, the bank cited an expectation that "credit costs will remain elevated for the foreseeable future."

Wilshire attributed the higher net loan charge-offs in the second quarter to writedowns stemming from its sale of $49 million in nonperforming loans during in the period at a 17% discount to their carrying values. The sale, however, will result in a sequential decline in the company's level of non-performing loans in the latest quarter, Wilshire said. The company's non-performing loans totaled $105 million as of March 31.

Banks with total assets ranging from $1 billion to $5 billion that compete with Wilshire in the Los Angeles area include Nara Bancorp (NARA), Center Financial (CLFC) and Preferred Bank (PFBC). All of those stocks were trading marginally lower on Friday.

Excluding the $903,000 in dividends and expenses on preferred shares held by the government in exchange for $62 million in bailout money received in December 2008 via the Troubled Assets Relief Program, Wilshire reported a first-quarter profit on April 22 of $2.4 million, or 8 cents a share, a performance that came in a penny ahead of Wall Street expectations.

Through Thursday's closing bell, Wilshire shares had been up about 4% so far in 2010. At Friday's session-low of $7.54, the stock was down roughly 8% year-to-date.

-- Written by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs