Good day, ladies and gentlemen, and welcome to the Second Quarter 2013 BBCN Bancorp Earnings Conference Call. My name is Tahisia[ph] and I'll be operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Angie Yang, Senior Vice President, Investor Relations. Please proceed.

Thank you, Tahisia. Good morning everyone and thank you for joining us for the BBCN 2013 Second Quarter Investor Conference Call. Before we begin, I'd like to make a brief statement regarding forward-looking remarks. The call today may contain forward-looking projections regarding future events and the future financial performance of the company. These statements constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such words as expect, believe, estimate, anticipate, target, goal, project, intend, plan, seek and variations of such words and similar expressions are intended to identify such forward-looking statements, which are not statements of historical fact. We wish to caution you that such statements reflect our expectations based on information currently available are not guaranteed of future performance and involves certain risk, uncertainties and assumptions that are difficult to assess. Actual results may differ materially as a result of risks and uncertainties that pertain to the company's business. We refer you to the documents the company files periodically with the SEC, as well as the Safe Harbor statements in the press release issued yesterday. These documents contain important risks factors that would cause actual results to differ materially from the forward-looking statements. BBCN assumes no obligation to revise any forward-looking projections that may be made on today's call. The company cautions that the complete financial results to be included in the quarterly report on Form 10-Q for the quarter ended June 30, 2013 could differ materially from the financial results being reported yesterday. We have allotted one hour for this call. With this today for management are Kevin Kim, BBCN Bancorp's Chairman and CEO, and our Chief Financial Officer Doug Goddard. Our newly named Chief Operating Officer Kyu Kim, Chief Credit Officer Mark Lee and Chief Lending Officer Jason Kim are also here with us today and will be available to respond to the questions during the Q&A session. With that, let me turn the call over to Kevin Kim. Kevin?

Thank you, Angie. Good morning everyone and thank you for joining us today. Before we begin our discussion of the financial results for the 2013 second quarter, I would like to make a few comments about the management transitions since our last call. As you may recall, Mr. Soo Bong Min was named President and CEO of BBCN Bank effective May 1. In making this selection, the Board largely credited his 50 plus years of banking experience. Mr. Min is very well-recognized in the Korean-American community as a proven banking executive having been instrumental to the growth and prosperity of both Wilshire State Bank and Omni Bank. It’s now been three months since he joined BBCN Bank and I’m even more positive that he is the right choice for BBCN Bank at this particular stage of integration and growth. As announced last Friday, our Senior EVP and Chief Commercial Banking Officer, Kyu Kim will succeed Bonnie Lee in the role of Chief Operating Officer. Just as Bonnie has been an integral member of the organization for many years, Kyu has been an instrumental leader of the company for quite some time. Since joining the former Nara in 1998, Kyu spearheaded the Bank’s expansion in New York and New Jersey. Kyu was actually recruited from Chicago based Foster Bank where she was the Chief Credit Officer from 1990 to 1997. We are very confident that with Kyu’s leadership skills and experience, she will be able to step up to the plate and competently carry on the duties of Chief Operating Officer on a more national scale as we plan to have her relocate to our corporate headquarters in Los Angeles next month. With that, let’s begin our review of the quarter. BBCN’s 2013 second quarter financial results demonstrate the stability of…

Thank you, Kevin. As we did last quarter, since we have provided quite a bit of detail in our press release, I will just discuss a few items where I think some additional color as warranted. Taking a look at our income statement, we saw a 4% increase in our net interest income compared to last quarter. This is due in part to an increase in our average loans outstanding for approximately $100 million resulting from the full-quarter impact of Pacific International. In addition, the higher than usual level of payoffs during the quarter contributed to a higher benefit from purchase accounting adjustment than in the first quarter 2013. Compared with the first quarter of 2013, our core net interest margin declined by 11 basis points. Coincidentally, the positive effect of purchase accounting adjustments was 11 basis points this quarter, which left our reported net interest margin unchanged from quarter-to-quarter. The primary driver of the pressure on core NIM was lower average yields in the loan portfolio as new CRE loans and refinancings are being booked at rates lower than the loans that are rolling off of our books. Within non-interest income, our net gain on sales of SBA loans was 22% higher than last quarter. We saw $33.8 million in SBA loans during the quarter, compared with $25.7 million in the prior quarter. The premium on SBA loan sales was 12.3% in the second quarter, compared with 12.5% in the prior quarter. Following the treasury market sell off in May and June, we are starting to see some signs of volatility in the SBA secondary market. While we expect approximately a 10% decline in premium rates, the market should still be new record highs for the foreseeable future. Within non-interest expense, our occupancy expense costs were up 21% from…

Thanks Doug. As noted in the press release, we have received all regulatory approvals and expect to complete the Foster Bank acquisition in the early part of August. This transaction will make BBCN the only Korean-American bank in the Midwest provide a first entry to the Washington D.C. metropolitan market and significantly strengthen our national platform. The steady progress we continue to make gives us greater confidence in our ability to further enhance the value proposition for our customers, employees, and shareholders. This confidence is underscored by the announcement made this morning about the 50% increase in our dividends to $0.75 per share. We look forward to keeping you updated on our achievements. With that, we would be happy to take any questions that you may have. Operator, please open up the call.

Thank you, will do. (Operator Instructions). Your first question comes from Scott Valentin from FBR Capital Markets. Please proceed.

Just with regard to loan rates, it was encouraging to see that the origination rates were up quarter-over-quarter. Is that trend continuing or does that reflect more of your discipline and maybe it's not then is it -- are you seeing the markets start to move kind of in that direction as well?

Well, I think that's more -- this is Mark. That I think reflects our discipline and the market expectation for rate rising to really set in would take us some time. I mean, customers recognize that rates are going to go up, but for them to actually see and understand that it's got to take another few quarters. So, in that sense, we're at more that's having self-discipline.

I understand.

Those are rates for the second quarter, throughout the quarter most of which was set before the rise in treasury rates that occurred late in the quarter.

Okay, it's helpful. And then, just in terms of -- you mentioned competition, is it coming more from a small banks now, like you said there are some small banks entering the market and may be distorting price a little bit?

I would say it is coming from whole spectrum and larger banks using interest rate swap. They are using -- proposing very aggressive grades in the range of 3% to 4%, and also we are seeing that from our peers.

Okay. And then, final question, I'll go back in a queue. You mentioned pay-offs are extremely high in the second quarter versus the first quarter. I assume that -- I mean, it seem like rates did not move until late in a quarter, so may be the rise in rates did not really drive that. But would you expect given the moving rates, you will see some more people seek to lock in rates now and maybe pay-off?

Well, in the second quarter, the larger pay-off really happened with the C&I credits, we had some unique situation. We had a $20 million credit that was paid off. And also the $50 million that was paid off and I think I would consider that as more or less one off and don't expect that to happen like that.

Your next question comes from line of Julianna Balicka from KBW. Please proceed.

Good morning. This is actually David out for Julianna.

Hi, Dave.

And just other quick question on capital management. So your TC ratio right now is 11.9% and I saw increase of dividend to $0.075 per quarter. I was just wondering, so what's your plan on capital management going forward? Are we expecting any special dividends or buybacks coming up?

The management team and the board here look at all the things that our competitors do and that you would expect us to look at to optimize value to shareholders. Right now, we did in the dividend and we do have another merger expected to close on the next month, which will have some use of capital. But everything that you would consider for capital management is on the table that is actively considered.

(Operator Instructions). And ladies and gentlemen, it looks like we have no more questions in the queue. I would now like to turn the conference back over to management for any closing remarks.

Okay. Once again, thank you all for joining us today and we look forward to speaking with you next quarter. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.