Good day, ladies and gentlemen, thank you all for joining, and welcome to the fourth quarter 2013 BBCN Bancorp, Inc. earnings conference call. My name is Lisa and I will be your coordinator for today. (Operator Instructions) I'd now like to turn the conference over to Ms. Angie Yang, Senior Vice President of Investor Relations for opening remarks. Please proceed, ma'am. Thank you.

Thank you, Lisa. Good morning, everyone, and thank you for joining us for the BBCN 2013 fourth 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 and are not statements of historical facts. We wish to caution you that such forward-looking statements reflect our expectations based on information currently available, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to assess. Actual results may differ materially as a result of these 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. 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 Annual Report on Form 10-K for the year ended December 31, 2013, could differ materially from the financial results being reported today. As usual, we have allotted one hour for this call. With us today from management are Kevin Kim, BBCN Bancorp's Chairman and CEO; Kyu Kim, our Chief Operating Officer; and Doug Goddard, our Chief Financial Officer. Chief Credit Officer, Mark Lee and Chief Lending Officer, Jason Kim are also here with us today and will participate in 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. Let me start the call today with just a few brief comments, before asking Kyu and Doug to provide more details on the results for the quarter. When they have finished, I will offer a few more thoughts on our growth strategies and outlook for 2014. We had a solid fourth quarter with positive trends in loan production, revenue generation, deposit gathering and core expense management. However, we had one problem credit this quarter that will make higher level of credit costs, which Doug will elaborate on later in the presentation. While the elevated provision adversely impacted our profitability metrics for the quarter, our overall performance trends remain consistently strong. New loan originations for the quarter amounted to $323 million, totaling $1.14 billion for the full year. This is up 4% over $1.09 billion in new loan originations in 2012. Loans receivable increased during the quarter to $5.07 billion, reflecting organic growth of 4% over the third quarter or 14% on an annualized basis. Total deposits increased to $5.15 billion, reflecting organic growth of 3% during the quarter or 10% on an annualized basis. And total assets increased to $6.47 billion as of yearend, reflecting organic growth of 2% during the quarter or 8% on an annualized basis. For the 2013 fourth quarter, we generated net income of $19.8 million or $0.25 per diluted share. On a pre-tax, pre-provision basis, we generated $40.3 million, which represents an annualized return of 2.52% on our average assets. This is right in line with the strong level of pre-tax, pre-provision returns we generated throughout 2013 and representative of the consistent earnings power of the company. At this point, let me turn the call over to Kyu to provide some comments on our business development efforts in the fourth quarter. Kyu?

Thank you, Kevin. We finished the 2013 with a strong quarter of business development. We had $323 million in loan origination with approximately 85% of the originations being commercial real estate and 14% being commercial loans. Within the commercial real estate portfolio, we are seeing very balanced growth across virtually all property types. During the fourth quarter, the retail, hospitality, warehouse, mixed-use and multifamily segments of the CRE portfolio all increased between 5% and 8%. During the fourth quarter, most of the loan production came from the Southern California and New York, New Jersey market. With the Pacific International acquisition fully integrated and refocusing of our business development team now in full gear, we are starting to see more deal discussions taking place in the Pacific Northwest, and we look forward to this market making a larger contribution to our overall loan production in 2014. Currently, our team in the Midwest and Virginia is primarily focused on ensuring a smooth transition for the customers of Foster Bank and refinancing maturing loans. The systems integration was successfully completed during the fourth quarter, and as we shift more towards a business development focus and build on the pipeline of lending opportunities, we expect to see a more meaningful contribution from these markets in the second half of the year. I can tell you that we are already seeing growth in the pipeline for these markets. Well, overall, we are very pleased with the level of business development efforts across all of our geographic market, not withstanding what continues to be an extremely competitive market for good loans, particularly commercial real estate. The average rate on new loan originations was 4.5% in the fourth quarter, an increase of 6 basis points over the preceding quarter. This reflects a heightened emphasis on pricing discipline…

Thank you, Kyu. We provided quite a bit of detail in our press release. So I will just discuss a few items, where I think some additional color is warranted. The fourth quarter was our first full quarter following the closing of the Foster Bankshares acquisition, and you can see the positive impact throughout our income statement. We posted a 4% increase in our net interest income compared with last quarter. This was primarily due to a 5% increase in our average loans outstanding, coming from both our strong loan production as well as the full quarter impact of Foster. Compared with the third quarter of 2013, our net interest margin increased by 3 basis points to 4.45%. On a core basis, excluding the effects of purchase accounting adjustments, net interest margin increased by 1 basis point to 3.87%. The impact of the increase in average loans outstanding along with a more favorable mix of earning assets, more than offset of a 4 basis point decline in average loan yields or 6 basis points on a core basis, enabling us to generate a slight improvement in our margin both on a core and as reported basis. Going forward, we would expect the negative impact of maturing loans will be a declining factor to the overall pressure on our net interest margin. In 2013, loans with interest rates in the high 5% to mid 6% range were maturing and repricing at rates in the low-to-mid 4% range. We were loosing anywhere between a 125 basis points to 250 basis points of yield of these repricings. In 2014, the loans scheduled to mature have rates in the low-to-mid 5% range and we expect to repricings to be in the mid 4% to low 5% range. In general, we expect to lose less…

Thanks, Doug. I just want to wrap up with a few remarks about our strategies and outlook for 2014. Throughout the year, we continued making progress as the largest and premier Korean-American bank in the country. We completed two acquisitions, fortifying our national footprints. BBCN Bank is the dominant Korean-American bank in all five of our core geographic markets, including Southern California, New Jersey metropolitan area, Chicago, Northern California and Seattle. Complementing this strategic expansion was solid organic growth of approximately 8% during 2013. While the banking industry remains challenged in a low interest rate and heightened regulatory environment, we believe BBCN is well-positioned to continue our journey to become a more diversified financial services company. Since taking the leadership role, as the holding company, we have made significant investments with respect to strategic planning. Assisting me in this effort is a newly established strategic planning team, now led by Chief Planning Officer, Daniel Kim. While Daniel just joined us this past December, the planning team has been busy developing new initiatives that will enable us to better capitalize on the foundation we have build as the largest Korean-American bank in the United States. During the first half of the year, we expect to launch a new commercial equipment leasing business. This is a service that our existing customer base has regularly requested in the past. Now, we are in the process of gearing up to launch this new offering initially targeting our current commercial customer base. We are also actively developing a residential mortgage strategy, which we expect will be launched in phases throughout our various geographic markets. And we are currently projecting the launch of this business line sometime in the second half of the year. We have a number of other business lines that we are in…

(Operator Instructions) So your first question is from the line of Aaron Deer of Sandler O'Neill & Partners. Aaron Deer - Sandler O'Neill & Partners: Doug, can you give some thoughts on expectations for the provision over the coming year? It sounds like you expected to trend lower. On a related point, looking at the charge-offs that BBCN has had over the past several year since 2007, and looks like there's over a $200 million over that timeframe. And I guess that actually excludes center, so I've got to think that there is probably going to be some recoveries coming in that book given the improving economic outlook. Is that built into your provision expectations or would those just kind of be considered icing on the cake, so to speak?

This is Mark. With regards to the expectation for recovery, we are running somewhere between $0.5 million to $1 million in a quarter. It jumps all over the place. Now, when we look at the provision that's not something we anticipate happening on a consistent basis. So that's not something we're baking into our expectation. Aaron Deer - Sandler O'Neill & Partners: I guess looking at the capital, with not a lot of big deals necessarily to be had, at least directly within your niche at this point, and with your TCE ratio pushing back above 11%. Kevin, are share repurchases something that you and the Board are looking at as a way to manage capital levels at this point?

Well, the share repurchase has been the subject matter that the Board has been reviewing on a regular basis and it's a possibility, but at this particular time, we do not have any specific plan to introduce share repurchase plan, but that's a consideration that would be possible in the future. Aaron Deer - Sandler O'Neill & Partners: How would you kind of rank that in terms of your priorities, for trying to keep your capital levels?

Well, we believe that the best use of our capital would be to fund our organic and strategic growth, so although some repurchase is always a possibility, I don't think it is the very top priority for us.

Our next question is from the line of Scott Valentin of FBR Capital Markets.

This is Josh in for Scott. So looking at margin, what's the opportunity for re-pricing of time deposits and for better deposit mix?

Our cost of deposits actually ticked up 1 basis point this quarter. We've been bumping along at a pretty flat rate for several quarters. I don't see it re-pricing down from here.

And what would be the benefit of the redemption of the trust preferred shares on your margin?

Fairly small, the coupon rate on those trust preferred shares is only about 2% right now. The reason we're redeeming it is if we were not redeeming at short-term as a result of the mark-to-market adjustment acquiring it, we would have had to book a much higher yield, but given that it was a very short-term maturity, we were only booking 2% on it right now.

And then, moving to expenses. How should we think about additional cuts for 2014, if at all?

I'm sorry, I think about additional cost?

Like cost cuts from the merger?

In terms of our run rate in the fourth quarter on just the compensation line, we're probably $600,000 to $800,000 higher than what I would call a run rate. Offsetting that we do certainly hope to be investing in new production and new products during the year, so there will be some upward adjustment for that. But just in terms of the core run rate in the fourth quarter, we're probably $600,000 to $800,000 high.

Our next question in the line is from Julianna Balicka of KBW.

This is actually David Gong for Julianna. Just had a question, you talk about most of the loan production in the quarter came from California and New York and New Jersey markets. So could you talk a little bit about loan growth expectations from Chicago and Seattle in 2014? KBW: This is actually David Gong for Julianna. Just had a question, you talk about most of the loan production in the quarter came from California and New York and New Jersey markets. So could you talk a little bit about loan growth expectations from Chicago and Seattle in 2014?

Yes, for Seattle, we are actually seeing some loan development from Seattle and we are getting many discussions for the loan deals. So we do expect meaningful contribution from that region in 2014. For Chicago region, our teams are still focusing on the smooth transition at our system conversion, so it's going to take some time. But we do see some development in small commercial loans and also CRE loans in the markets. So probably not until the second half of the 2014, we're not going to see meaningful contribution from that area. But we are hopeful that we will have some contribution by second half of the year.

So in terms of originations, can you give us the dollar amount for some of the larger originations in the quarter and the rates you're getting on those? KBW: So in terms of originations, can you give us the dollar amount for some of the larger originations in the quarter and the rates you're getting on those?

The three largest new credits, they are all CRE, starting from the top $15.9 million multi-tenant retail; $13 million industrial warehouse CRE and we also had $11.5 million, which actually represents our four gas station loan to one borrower.

On the rates, we don't like to comment on individual deals for competitive reasons, but our average rate on the new deals was 4.5%.

And just a follow-up question on expenses. So what was the contribution, in terms of Foster acquisition, are we seeing all of the cost saves in the fourth quarter numbers or are there more cost savings to come in 2014? KBW: And just a follow-up question on expenses. So what was the contribution, in terms of Foster acquisition, are we seeing all of the cost saves in the fourth quarter numbers or are there more cost savings to come in 2014?

There will be some, as I said. I think our run rate of expenses is about $600,000 to $800,000 high on the comps line. And obviously the line merger related expense contains a lot of our conversion expenses that occurred in the quarter, which will go away nearly entirely next quarter. So those will be the most measurable impacts for further cost cuts in the next year.

Moving on, our next in the line is the line of Lana Chan of BMO Capital Markets.

Couple of questions. One Doug, I was wondering if you could give us some guidance on expectations for the purchase accounting accretion this year. How much we should be building in?

Well, that's always fun to try to answer. If you look at the current quarter, I would expect it to decline probably 20% during the year, the coming year, because that's a sort of the run rate at which it's declining as the portfolios pay down.

And I think last year you guys had targeted sort of mid-to-high-single digit organic loan growth, and did a little bit better than that. Given the new initiatives and sort of the new markets, would you expect to be able to do better than that this year?

Yes, I think for high-single digit organic loan growth for this year that's comparable to the 8% organic loan growth that we delivered in 2013.

I would just to add, if you take our 2013 numbers and back out the acquisitions, our organic growth is about 8%. If we do that again in next year that will be growing off those acquired portfolio also, so that would represent more dollars of growth because of the bigger base we've built with those acquisitions.

My last question was I was wondering if you could discuss the recent retirement of Mr. Min and what the expectations are in terms of replacing that position.

Well, we would like to have the interim period to be as brief as possible, but at the same time, we have to be prudent in our due diligence efforts and the Board has decided to retain an outside search firm to identify and elect our next CEO. I think that's the information that I can share with you.

Our next question is from the line of Gary Tenner of D.A. Davidson.

I had a question on the trade finance loan that was impaired. What was the total size of that loan, gross of the impairment?

This is actively ongoing workout case. It's something that we don't want to discuss openly on open forum, in terms of total credit limit. I can answer that offline if you like.

And then secondarily, in terms of the new initiatives on the leasing business and on the residential mortgage business, can you give us a sense of whose going to be leading that? Are you bringing somebody in from the outside to lead the leasing business? What kind of expense build out would you expect heading into '15, which is when you expect there would be more of a revenue benefit?

In terms of new initiative on commercial equipment leasing, we have spent a lot of time and effort in developing this product as requested by our existing customer base. And we have done a lot of strategic initiative to really better manage in terms of risk and expenses. And I think we will have more clarity as we go maybe few more quarters down the line in the second half of the year 2014, in terms of production and expenses and the income that will be driven on this product. And I will have this product in the developing and we will launch towards the end of 2014, most likely in March.

If I can just add Jason, there's a lot of details to come, but it is not something, the way we have structured where there is a big upfront expense we'll see. It would be fairly modest impact in the start-up, because we've structured it that way intentionally.

So we have another question, and it's from the line of Don Worthington of Raymond James.

Just noticed and looking at the balance sheet that the goodwill number came down about $12 million, I guess linked-quarter. Anymore color on that?

When we released the third quarter, we did highlight the fact that the purchase accounting on Foster was preliminary. And the final analysis of both the loan mark and the deferred tax asset ended up with a more favorable result than we put in our preliminary numbers, so that entirely climb was related to Foster.

And then any guidance on the tax rate for 2014? What you expect that to be?

Well, I would round it to 40%, if you're doing a model. I think we tend to bounce around 39.5%. The mix of what states we do business in is actually one of the biggest variables. We have got higher tax jurisdictions, but 40% is not a bad guess.

As we have no further questions in the queue. I would like to hand back to management for closing remark.

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

Thank you.

Thank you to all the speakers. Thank you, ladies and gentlemen for participating. That concludes today's conference call. You may now disconnect your lines. Have a good day. Thank you.