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BBCN Bancorp Reports Second Quarter 2012 Results

BBCN Bancorp, Inc. (the “Company”) (NASDAQ: BBCN), the holding company of BBCN Bank (the “Bank”), today reported net income available to common stockholders of $15.6 million, or $0.20 per diluted common share, for second quarter 2012. This compares with net income available to common stockholders of $5.2 million, or $0.14 per diluted common share, for second quarter 2011, and net income available to common stockholders of $22.1 million, or $0.28 per diluted common share, for first quarter 2012.

The merger with Center Financial Corporation (“Center”), completed on November 30, 2011, impacts the comparability of operating results for second quarter 2012 versus second quarter 2011 and the preceding first quarter 2012. The Company includes in this press release supplemental information to help in understanding past financial performance.

“The completion of the merger integration during the quarter marked a milestone achievement that positions BBCN for enduring growth as the leading Korean American bank in the nation,” said Alvin D. Kang, President and Chief Executive Officer. “Notwithstanding the tremendous company-wide effort required to complete the systems and office integrations, our front lines produced strong new loan originations that resulted in a 4% linked quarter increase in our loan portfolio, underscoring the strength of the new BBCN organization. We continued to focus on enhancing efficiencies, maintaining asset quality and improving our earnings power, and delivered pre-tax, pre-provision earnings of 3.03% for the quarter. While the overall economic and interest rate environment continues to present challenges, we believe we are well positioned with the integration and TARP redemption behind us to expand our franchise.”

Financial Highlights

        2012 Second Quarter       2011 Second Quarter       2012 First Quarter
      (Dollars in thousands)
Net income $ 19,364       $ 6,318       $ 23,934

Net income available to common stockholders

$ 15,593 $ 5,243 $ 22,065
Diluted earnings per share $ 0.20 $ 0.14 $ 0.28
Net interest income $ 59,502 $ 29,331 $ 60,859
Net interest margin 5.02 % 4.16 % 5.11 %
Non-interest income $ 10,222 $ 7,684 $ 11,645
Non-interest expense $ 31,077 $ 16,886 $ 30,435
Net loans receivable $ 3,809,033 $ 2,142,750 $ 3,674,890
Deposits $ 3,882,680 $ 2,232,180 $ 3,920,464
Non-accrual loans (1) $ 39,567 $ 35,385 $ 39,651
ALLL to gross loans 1.69 % 2.71 % 1.67 %
ALLL to non-accrual loans (1) 165.55 % 168.70 % 157.14 %
ALLL to non-performing assets (1) 72.80 % 107.41 % 71.14 %
Provision for loan losses $ 7,182 $ 10,047 $ 2,600
Net charge-offs $ 3,987 $ 13,691 $ 2,243
ROA (2) 1.52 % 0.86 % 1.86 %
ROE (2) 9.4 % 6.84 % 11.87 %
Efficiency ratio 44.57 % 45.62 % 41.98 %
(1) Excludes the guaranteed portion of delinquent SBA loans totaling $18.1 million, $14.2 million and $16.9 million at the close of the second quarter 2012, second quarter 2011 and first quarter 2012, respectively.
(2) Based on net income before effects of dividends and discount accretion on preferred stock.

The Company noted that the variance between net income and net income available to common stockholders in second quarter 2012 was significantly larger than in past quarters. In addition to regular quarterly dividends and discount accretion on TARP preferred stock, the Company incurred additional discount accretion of $1.9 million, equal to $0.02 per diluted common share, related to the TARP redemption on June 27, 2012.

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