On Tuesday, BBCN Bancorp Inc (BBCN) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Aaron Deer – Sandler O’Neill & Partners LP: First of all, I’ve got a question on the expense guidance. I guess, if I back out the merger cost in the quarter, the FHLB prepaid penalty, the lease negotiation expense and the FDIC benefits that you had, it looks to me like core expenses were up about 3% sequentially to about $29.5 million. Your guidance suggests that there’s really not any additional savings that you had from the merger that you were kind of already at your run rate, is that right? Am I thinking about that correctly?
Alvin D. Kang – CEO: I think that’s fair to say we have some additional savings that are scheduled to come in over time, but they will be offset by the need to support the growth of the Bank as we move forward.
Aaron Deer – Sandler O’Neill & Partners LP: On the funding side, you obviously back, bookings were pretty strong, loan growth – is that continues? What are your thoughts in terms of how to fund that? (Did you let the securities come in from or did you use CDs more)? Obviously you picked up some FHLB borrowings in the quarter. What’s kind of your preference with…?
Philip E. Guldeman – CFO: I don’t see us significantly reducing the securities portfolio. The funding of that loan growth will come from a combination of longer-term FHLB advances that you know are pretty cheap right now on, and brokered deposits so that we can keep our loan to deposit ratio at an acceptable level.
Provisioning in Reserve Levels
Joe Gladue – B. Riley & Company, Inc.: Wanted to touch base the mix between fixed rate and variable rate commercial loans today, clearly the mix moved a little bit more towards fixed this quarter. Just wondering a, what the mix is of originations and b, how you’re incentivizing borrowers to variable rate loans when rates are so low now?
Bonita I. Lee – COO: The first question, the fixed versus variable in terms of origination out of our total production, 35% of the origination was from the fixed and the variable rates, 65%. Most of the C&I business loan customers obviously don’t stay with variable rate and then looking at more of the long term real estate investor types, they’re still looking at the fixed rate, so it differs from their investments strategy.
Joe Gladue – B. Riley & Company, Inc.: And I guess, I just wanted to follow-up a little bit on provisioning in reserve levels, before the merger, I guess there was some indication that following the merger there’d be some rebuilding of reserve levels, and just wondering what the current thoughts are on what may be a comfortable level for the loan loss reserves might be?
Alvin D. Kang – CEO: It’s always difficult to predict what the loan loss reserve is going to be or the provision is going to be, but I think what we saw this quarter, I think we have a better understanding of how the dynamic works going forward. So, I think, we are comfortable with where we are today, the trend line.