The Federal Reserve Bank of San Francisco has terminated a memorandum of understanding with Wilshire Bancorp (WIBC) in Los Angeles.
The informal order, which was implemented in June 2011, required the company to seek Fed approval before paying dividends, repurchasing stock and replacing its senior management or board. It was terminated on Sept. 26.
The $2.6 billion-asset company was wounded by the economic downturn, but it raised $108.7 million of common equity in the second quarter of 2011. The added equity helped Wilshire deal with its nonperforming assets, which fell to 2.31% of total assets at June 30, compared to 4.13% a year earlier.
The company has been profitable since the second quarter of 2011. It had a total risk-based capital ratio of 19.41% at June 30.
"We are pleased that the [Fed] has recognized the improvement in our overall condition and determined that the MOU is no longer warranted," Jae Whan Yoo, Wilshire's president and chief executive, said in a press release. "We will now have the flexibility to consider additional opportunities for the utilization of our excess capital."
Despite the order, Wilshire company was still allowed to exit the Treasury Department's Troubled Asset Relief Program earlier this year. In the first quarter, the company bought 60,000 shares at a 5.6% discount in an auction sponsored by the Treasury Department. In the second quarter, Wilshire redeemed the remaining 2,158 shares at par.
The company's Wilshire Bank was released from a memorandum of understanding with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions on May 18.
