Wilshire State Bank in Los Angeles has been released from an enforcement order that required it to boost its capital ratios and reduce its level of problem loans.
The bank's parent, the $2.7 billion-asset Wilshire Bancorp (WIBC) announced late Tuesday that a memorandum of understanding it signed with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions last year was terminated on May 18.
Wilshire was hit hard by California's real estate bust, but it has made significant progress since losing roughly $52 million in last year's first quarter. In the quarter that ended March 31, the company turned a profit of $17.9 million and its nonaccrual loans totaled $35.5 million, compared to $62.1 million a year earlier.
The bank's capital levels have also improved markedly over the last year, thanks largely to proceeds generated from a stock sale last year. Its Tier 1 leverage ratio at March 31 was 12%, according to FDIC data, up from 8% a year earlier. The enforcement order required the bank to maintain a Tier 1 leverage ratio of at least 10%.
"We believe the bank has made great progress over the past year, and we are gratified that the regulators have recognized this improvement and lifted the bank's MOU," said Jae Whan Yoo, the president and chief executive of Wilshire Bancorp and Wilshire State Bank. "The entire Wilshire State Bank team has been dedicated to achieving this goal."