Wilshire Bancorp - Value
October 09 2012 - 7:00PM
Zacks
Wilshire Bancorp Inc. (WIBC) became a Zacks #1 Rank (Strong
Buy) on September 29 and currently trades near its 52 week high. In
addition, a forward P/E multiple of just 5.7 makes this regional
bank stock an attractive value pick.
Q2 Results
Wilshire Bancorp is expected to release its third quarter
earnings on October 22. The Zacks Consensus Estimate for the
quarter is 22 cents per share. The company has surpassed profit
expectations in the past two quarters.
On July 23, Wilshire Bancorp announced second-quarter earnings
of 31 cents per share, outpacing the Zacks Consensus Estimate of 17
cents by 82.4% and significantly beating last year’s 4 cents.
Results improved due primarily to significant fee income growth,
partially offset by a drop in net interest income and a rise in
operating expenses. Moreover, during the quarter, the company fully
repurchased Troubled Asset Relief Program (TARP) preferred stock
along with the TARP warrants.
Net interest income dipped 11% from the year-ago quarter to
$24.2 million. However, non-interest income had a significant jump
and stood at $8.5 million, primarily driven by a gain on the sale
of loans. Non-interest expenses rose 23% to $20.4 million on the
back of higher salaries and employee benefits expense.
Wilshire Bancorp also witnessed a marked improvement in its
asset quality. As of June 30, 2012, non-accrual loans declined
46.8% to $41.5 million. Furthermore, the provision for losses on
loans and loan commitments was a credit of $10.0 million, compared
with $10.3 million of provision in the prior-year quarter.
Earnings Estimates
Over the last 90 days, the Zacks Consensus Estimate for 2012
jumped 38% to $1.12 per share, implying year-over-year improvement
of about 283.8%. There has also been a penny improvement in the
past 30 days for both this year and next.
Reasonable Valuation
Along with a low forward P/E multiple, Wilshire Bancorp has a
P/B ratio as low as 1.6 (a P/E ratio under 15.0 and a P/B ratio
below 3.0 generally indicate value). The company has a trailing
12-month ROE of 21.6%, compared with the peer group average of
9.9%.
Moreover, given the long-term growth projection of 8%, the PEG
ratio comes in at 0.71, a 29.0% discount to the benchmark of 1 for
a fairly priced stock. Thus, the expected long-term earnings growth
is currently priced at a discount.
Based in Los Angeles, California, Wilshire Bancorp is the bank
holding company for Wilshire State Bank. The company offers a wide
range of financial products and services through 24 branch offices
and eight loan production offices. With a market capitalization of
roughly $452.7 million, Wilshire Bancorp competes with TriCo
Bancshares (TCBK) and Westamerica Bancorporation (WABC), among
others.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades
are about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called Zacks
Confidential.
Learn More>>
WILSHIRE BCP (WIBC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Wilshire Bancorp, Inc. (MM) (NASDAQ:WIBC)
Historical Stock Chart
From Apr 2024 to May 2024
Wilshire Bancorp, Inc. (MM) (NASDAQ:WIBC)
Historical Stock Chart
From May 2023 to May 2024