-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q3vMXQihLEP1RN6hW2QqfMMVPi7s6iR2HAVQUVCOHfVlvLRvoc5Ti9N49JwlaR9Y +z2pq4Jp9YhMtE4VTbJGnw== 0001157523-07-004300.txt : 20070501 0001157523-07-004300.hdr.sgml : 20070501 20070430204408 ACCESSION NUMBER: 0001157523-07-004300 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070430 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070501 DATE AS OF CHANGE: 20070430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NARA BANCORP INC CENTRAL INDEX KEY: 0001128361 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 954170121 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50245 FILM NUMBER: 07802884 BUSINESS ADDRESS: STREET 1: 3731 WILSHIRE BLVD STREET 2: SUITE 1000 CITY: LOS ANGELES STATE: CA ZIP: 90010 BUSINESS PHONE: 2136391700 MAIL ADDRESS: STREET 1: 3731 WILSHIRE BLVD STREET 2: SUITE 1000 CITY: LOS ANGELES STATE: CA ZIP: 90010 8-K 1 a5390377.txt NARA BANCORP, INC. 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 30, 2007 Nara Bancorp, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-50245 95-4170121 - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3731 Wilshire Boulevard, Suite 1000, Los Angeles, CA 90010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (213) 639-1700 - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On April 30, 2007, Nara Bancorp, Inc. issued a press release announcing results for the quarter ended March 31, 2007. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K. The foregoing information and the attached exhibit are intended to be furnished only and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description - ------------ ----------- Exhibit 99.1 Press release issued by Nara Bancorp, Inc. dated April 30, 2007. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Nara Bancorp, Inc. Date: April 30, 2007 By: /s/ Alvin D. Kang --------------------------------------- Name: Alvin D. Kang Title: Chief Financial Officer EX-99.1 2 a5390377ex991.txt EXHIBIT 99.1 Exhibit 99.1 Nara Bancorp Reports $0.28 Earnings Per Diluted Share for First Quarter 2007 LOS ANGELES--(BUSINESS WIRE)--April 30, 2007--Nara Bancorp, Inc. (the "Company") (NASDAQ: NARA), the holding company of Nara Bank (the "Bank") reported net income of $7.3 million, or $0.28 per diluted share, for first quarter 2007, a 7% decrease compared to net income of $7.9 million, or $0.30 per diluted share, for first quarter 2006. The decrease in net income was primarily due to compression in the Company's net interest margin. Min Kim, President and Chief Executive Officer, said, "Our first quarter results were affected by a highly competitive loan pricing environment, which led to lower than expected loan growth. We have made adjustments in pricing strategies that we believe are already having a positive effect on loan production. On the liability side, we are pleased with our efforts to attract more core deposits. A new money market product enabled us to generate annualized growth of 68% in our money market accounts during the first quarter, while keeping our cost of interest-bearing liabilities stable. Importantly, our asset quality remains healthy, and we do not see any trends to indicate that our credit costs will exceed our expected range for the year." First Quarter Financial Summary (2007 vs. 2006): -- Net income decreased 7% to $7.3 million -- Diluted EPS decreased 7% to $0.28 per share -- Net interest income increased 1% to $22.7 million -- Net interest margin decreased 55 basis points to 4.62% -- Non-interest income decreased 9% to $4.6 million -- Non-interest expense increased 6% to $13.9 million -- Net loans receivable increased 15% over prior year to $1.73 billion -- Deposits increased 6% over prior year to $1.75 billion -- Non-performing assets to total assets ratio increased to 0.42% from 0.28% Operating Results for First Quarter 2007 Net Interest Income and Net Interest Margin. First quarter net interest income before provision for loan losses increased 1% to $22.7 million from $22.6 million for first quarter 2006. The slight improvement was attributable to a $37 million increase in the net average interest-earning assets, which offset the 64 basis points decline in the net interest spread. The resulting first quarter net interest margin (net interest income divided by average interest-earning assets) decreased 55 basis points to 4.62% from 5.17%. The weighted average yield on the loan portfolio for first quarter 2007 increased 2 basis points to 8.71% from 8.69% for the same period last year. The increase was the result of the prime rate-based portion of the loan portfolio repricing upward as interest rates increased during the first half of 2006, offset by the increase in the percentage of fixed rate loans in the portfolio that have lower yields. The weighted average yield on our variable rate and fixed rate portfolios (excluding loan discount accretion) at March 31, 2007 were 9.27% and 7.67%, respectively, compared to 8.76% and 7.53% at March 31, 2006. At March 31, 2007, 42% of our loan portfolio consisted of fixed-rate loans, compared to 24% at March 31, 2006. Also, at March 31, 2007, the loan portfolio yield (excluding loan discount accretion) was 8.65% compared to 8.58% at March 31, 2006. The weighted average cost of deposits for first quarter 2007 increased 86 basis points to 3.80% from 2.94% for the same period last year. The cost of time deposits increased 100 basis points to 5.22% from 4.22%, accounting for a substantial portion of the increase. The weighted average cost of borrowings for first quarter 2007 decreased to 5.70% from 6.57% for first quarter 2006, largely due to the $69 million net increase since March 2006 in lower costing FHLB advances, resulting in an average cost for FHLB advances of 4.21%, compared to 4.33% for first quarter 2006. Sequentially, first quarter 2007 net interest income before provision for loan losses decreased $1.5 million, or 6%, from the fourth quarter 2006. Net average interest-earning assets increased 4% and the net interest spread decreased by 50 basis points, resulting in a decline in the net interest margin to 4.62% from 5.10%. During the first quarter 2007, three loans were transferred to non-accrual status, resulting in a reversal of $350 thousand in interest income, which negatively affected the net interest margin by 7 basis points. Excluding these items, the first quarter 2007 net interest margin would have been 4.69%. During the fourth quarter of 2006, the net interest margin benefited from the recognition of delinquent interest, totaling $238 thousand, relating to the recovery of delinquent interest from a non-accrual loan placed back on accrual status. Excluding this item, the fourth quarter 2006 net interest margin would have been 5.05%. In the first quarter of 2007, the Bank was able to maintain the cost of the time deposits stable at 5.22%, following an upward re-pricing by 16 basis points during the fourth quarter of 2006. The cost of the time deposits is anticipated to stabilize or slightly decrease in future periods as higher costing time deposits re-price downwards. Prepayment penalty income for first quarter 2007, first quarter 2006, and fourth quarter 2006 was $142 thousand, $204 thousand and $553 thousand, respectively. Excluding the effects of non-accrual loan interest income and prepayment penalty income, the net interest margin for first quarter 2007, first quarter 2006, and fourth quarter 2006 was 4.66%, 5.13% and 4.94%, respectively. Non-interest Income. First quarter 2007 non-interest income was lower by $438 thousand or 9% compared to first quarter 2006. This decrease was primarily due to a decrease in net gains on sales of SBA loans. Net gains on sales of SBA loans decreased $497 thousand, or 29%, to $1.2 million for first quarter 2007 from $1.7 million for first quarter 2006. The decrease was primarily due to a reduction in the average sale premiums and an increase in commission paid related to loan originations. The net realized gain on sale for first quarter 2007 was 4.9% of the gross loans sold compared to 7.0% during first quarter 2006 and 5.6% during fourth quarter 2006. Sequentially, non-interest income decreased 15%, primarily due to the recognition of a gain of $1.3 million on the sale of commercial real estate loans during the fourth quarter 2006. Net gains on sales of SBA loans increased 12% to $1.2 million during the first quarter 2007, compared to $1.1 million in fourth quarter 2006. Non-interest Expense. First quarter non-interest expense increased 6% to $13.9 million from $13.2 million for the same period last year. Compensation expense decreased by 1% over the same quarter of the prior year. Included in the compensation expense during first quarter 2007 was a reversal of a $600 thousand contingent liability accrual established during 2002 related to a past compensation matter for which the Company has now determined that no liability exists. Excluding this item, compensation expense would have increased 7% over the same quarter of the prior year due to an increase in the full-time equivalent employee count from 378 to 407, and a $129 thousand increase in stock compensation expense. Occupancy expense increased 14%, primarily due to lease renewals at higher lease rates for four branches and a new lease related to the relocation of our corporate headquarters during the second half of 2006. Furniture and equipment expense increased 20%, primarily due to the new Garden Grove branch, the new corporate headquarters, and IT related equipment purchased to support and enhance the Company's technology. Advertising and marketing expense also increased 20%, primarily to support increased marketing efforts. Professional fees increased by $168 thousand, or 25%, primarily due to expense related to the current arbitration matter. Other expense increased 12%, primarily due to an increase in our FDIC insurance premium under the new assessment formula. Sequentially, non-interest expense in first quarter 2007 increased 2% to $13.9 million from $13.6 million in fourth quarter 2006. This increase was primarily due to increases in data processing and professional fees. Data processing fees increased primarily due to the year-end processing performed during the first quarter of 2007. Professional fees increased 28% primarily due to legal expense related to the arbitration matter previously mentioned. Income Taxes. The effective tax rate was 41.1% for first quarter 2007 compared to 41.0% for first quarter 2006, and 36.2% for fourth quarter 2006. The lower effective tax rate for fourth quarter 2006 was due primarily to the resolution of certain tax contingencies during fourth quarter 2006, resulting in a reduction of deferred tax liabilities and a credit to income tax expense of $772 thousand. Balance Sheet Summary At March 31, 2007 total assets were $2.12 billion compared to $2.05 billion at December 31, 2006, an increase of 15% (annualized). Gross loans receivable were $1.75 billion at March 31, 2007, an increase of 8% (annualized) from the $1.71 billion at December 31, 2006. New loan production was $139 million during first quarter 2007, compared to $198 million during fourth quarter 2006 and $182 million during the first quarter 2006. Loan pay-offs were at the same level during first quarter 2007 and first quarter 2006, but lower than fourth quarter 2006 at $67 million, $67 million and $92 million, respectively. SBA loan originations were $28.1 million during first quarter 2007 compared to $35.4 million during first quarter 2006 and $39.2 million during fourth quarter 2006. Sales of SBA loans during first quarter 2007 were $25.0 million, compared to $24.5 million during first quarter 2006 and $19.4 million during fourth quarter 2006. Total deposits were $1.75 billion at March 31, 2007, an increase of 9% (annualized) from $1.71 billion at December 31, 2006. The largest increases came in money market deposits and jumbo certificates of deposit. Money market deposits increased $31.5 million, or 68% (annualized), and jumbo CDs increased $40.4 million, or 21% (annualized), during first quarter of 2007. The increase in money market accounts was largely due to a new product developed in fourth quarter 2006 with the rate of 5.0% in an effort to attract core deposits. FHLB advances were $100.0 million at March 31, 2007 compared to $76.0 million at December 31, 2006. FHLB advances during first quarter 2007 were used to augment deposits as a source of match-funding $24 million of fixed-rate loan originations. Asset Quality The Company recorded a provision for loan losses of $980 thousand in first quarter 2007, compared to $1.1 million in the same period of the prior year, and $1.4 million in fourth quarter 2006. Non-performing assets at March 31, 2007 were $8.9 million, or 0.42% of total assets, compared to $3.6 million or 0.17% of total assets at December 31, 2006 and $5.4 million or 0.28% of total assets, at March 31, 2006 Non-performing loans at March 31, 2007 were $8.7 million, or 0.50% of total loans, compared to $3.3 million, or 0.19% of total loans, at December 31, 2006 and $4.6 million, or 0.30% of total loans, at March 31, 2006. The increase in non-performing loans during the quarter was primarily from three borrowing relationships aggregating $6.4 million, collateralized by a hotel property, a gas station, and a commercial retail rental property. All of the above loans have been placed on non-accrual, resulting in a reversal of accrued interest income this quarter amounting to $350 thousand. All of these loans are fully secured, and no loss is anticipated. Although non-performing loans increased during the first quarter of 2007, the collateral underlying the loans that moved into non-performing status required that the Company only establish a nominal specific allowance for loan losses for these credits. Net loan charge-offs during first quarter 2007 were $1.3 million, or 0.31% of average loans on annualized basis, compared to $1.2 million during fourth quarter 2006, or 0.27% of average loans on an annualized basis, and also compared to $300 thousand, or 0.08% of average loans on an annualized basis, for first quarter 2006. First quarter 2007 charge-offs primarily consisted of loans to retail businesses averaging approximately $100 thousand. The net loan charge-offs of $1.3 million during the first quarter of 2007 were substantially reserved at December 31, 2006. The allowance for loan losses at March 31, 2007 was $18.8 million, or 1.07% of gross loans receivable, compared to $19.1 million, or 1.11% of gross loans receivable, at December 31, 2006 and $18.4 million, or 1.21% of gross loans receivable, at March 31, 2006. The Company experienced moderate loan growth during the first quarter of 2007 and a decrease in special mention and classified assets, net of impaired loans, from $6.6 million at December 31, 2006 to $5.1 million at March 31, 2007. These items were contributing factors to the reduction in the allowance for loan losses ratio to gross loans receivable. Performance Ratios The annualized return on average equity (ROE) for first quarter 2007 was 15.26%, compared to 20.56% for fourth quarter 2006 and 20.72% for first quarter 2006. The annualized return on average assets (ROA) for first quarter 2007 was 1.41%, compared to 1.88% for fourth quarter 2006 and 1.72% for first quarter 2006. The efficiency ratio for first quarter 2007 was 51.01%, compared to 47.74% for first quarter 2006. The increase in the efficiency ratio was primarily due to the nominal growth in net interest income, a 9% decrease in non-interest income and a 6% increase in non-interest expense. Capital At March 31, 2007, the Company continued to exceed the regulatory capital requirements to be classified as a "well-capitalized institution." The Leverage Ratio was 11.16% compared to 11.18% at December 31, 2006. The Tier 1 Risk-based Ratio was 12.29% compared to 12.16% at December 31, 2006. The Total Risk-based Ratio was 13.30% compared to 13.21% at December 31, 2006. Earnings Outlook For the full year of 2007, the Company continues to expect fully diluted earnings per share to range between $1.29 and $1.33. Commenting on the outlook, Ms. Kim said, "Since adjusting our loan pricing strategies, we have seen a meaningful increase in loan production. We believe that our earning asset growth will help us to more effectively offset the pressure on our net interest margin in future quarters. We also expect to generate higher non-interest income over the course of the year as the additions we have made to our SBA lending group continue to gain traction. While we expect the operating environment will remain challenging, we believe we can deliver improved financial performance over the remainder of 2007." Conference Call and Webcast A conference call with simultaneous webcast to discuss the Company's first quarter 2007 financial results will be held tomorrow, May 1, 2007 at 9:30 a.m. Pacific / 12:30 p.m. Eastern. Interested participants and investors may access the conference call by dialing 800-329-9097 (domestic) or 617-614-4929 (international), passcode 36713712. There will also be a live webcast of the call available at the Investor Relations section of Nara Bank's web site at www.narabank.com. Web participants are encouraged to go to the web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. After the live webcast, a replay will remain available in the Investor Relations section of Nara Bancorp's web site. A replay of the call will be available at 888-286-8010 (domestic) or 617-801-6888 (international) through May 8, 2007; the passcode is 79433149. About Nara Bancorp, Inc. Nara Bancorp, Inc. is the parent company of Nara Bank, which was founded in 1989. Nara Bank is a full-service community bank headquartered in Los Angeles, with 18 branches and 7 loan production offices in the United States. Nara Bank operates full-service branches in California and New York, with loan production offices in California, Washington, Texas, Georgia, Illinois, New Jersey, and Virginia. Nara Bank was founded specifically to serve the needs of Korean-Americans, one of the fastest-growing Asian ethnic communities over the past decade. Presently, Nara Bank serves a diverse group of customers mirroring its communities. Nara Bank specializes in core business banking products for small and medium-sized companies, with emphasis in commercial real estate and business lending, SBA lending and international trade financing. Nara Bank is a member of the FDIC and is an Equal Opportunity Lender. For more information on Nara Bank, visit our website at www.narabank.com. Nara Bancorp, Inc. stock is listed on NASDAQ under the symbol "NARA." Forward-Looking Statements This press release contains forward-looking statements including statements about future operations and projected full-year financial results that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward looking statements, including, but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services, and pricing. Readers should carefully review the risk factors and the information that could materially affect the Company's financial results and business, described in documents the Company files from time to time with the Securities and Exchange Commission, including its quarterly reports on Form 10-Q and Annual Reports on Form 10-K, and particularly the discussion of business considerations and certain factors that may affect results of operations and stock price set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Nara Bancorp, Inc. Consolidated Statements of Financial Condition Unaudited (Dollars in Thousands, Except for Share Data) Assets % % 3/31/2007 12/31/2006 change 3/31/2006 change ----------- ------------------- ------------------- Cash and due from banks $31,600 $36,300 -13% $38,306 -18% Federal funds sold 82,000 44,500 84% 75,500 9% Term federal funds sold - - 0% 7,000 -100% Securities available for sale, at fair value 176,071 162,851 8% 185,653 -5% Securities held to maturity, at amortized cost (fair value: December 31, 2006 - $1,002; March 31, 2006 - $1,015) - 1,000 -100% 1,000 -100% Federal Home Loan Bank and Federal Reserve Bank stock 9,868 9,758 1% 8,341 18% Loans held for sale, at the lower of cost or market 7,978 15,162 -47% 15,422 -48% Loans receivable 1,749,242 1,714,865 2% 1,524,377 15% Allowance for loan losses (18,752) (19,112) -2% (18,398) 2% ----------- --------------------------------------- Net loans 1,730,490 1,695,753 2% 1,505,979 15% ----------- --------------------------------------- Accrued interest receivable 8,664 8,974 -3% 7,694 13% Premises and equipment, net 11,972 11,941 0% 8,575 40% Cash surrender value of life insurance 15,225 15,113 1% 14,775 3% Goodwill 2,347 2,347 0% 2,347 0% Other intangible assets, net 2,735 2,899 -6% 3,416 -20% Other assets 44,085 40,387 9% 37,302 18% ----------- --------------------------------------- Total assets $2,123,035 $2,046,985 4% $1,911,310 11% =========== ======================================= Liabilities Deposits $1,750,976 $1,712,235 2% $1,650,623 6% Borrowings from Federal Home Loan Bank 100,000 76,000 32% 31,000 223% Subordinated debentures 39,268 39,268 0% 39,268 0% Accrued interest payable 10,840 8,258 31% 11,655 -7% Other liabilities 27,396 24,597 11% 24,307 13% ----------- --------------------------------------- Total liabilities 1,928,480 1,860,358 4% 1,756,853 10% ----------- --------------------------------------- Stockholders' Equity Common stock, $0.001 par value; authorized, 40,000,000 shares; issued and outstanding, 26,131,672, 26,107,672 and 25,557,948 shares at March 31, 2007, December 31, 2006 and March 31, 2006, respectively $26 $26 0% $25 4% Capital surplus 78,563 77,939 1% 70,900 11% Retained earnings 118,567 111,978 6% 88,192 34% Accumulated other comprehensive loss, net (2,601) (3,316) -22% (4,660) -44% ----------- ------------------- ------------------- Total stockholders' equity 194,555 186,627 4% 154,457 26% ----------- ------------------- ------------------- Total liabilities and stockholders' equity $2,123,035 $2,046,985 4% $1,911,310 11% =========== =================== =================== Nara Bancorp, Inc. Consolidated Statements of Income Unaudited (Dollars in Thousands, Except for Share and Per Share Data) Three Months Ended, --------------------------------------------------- % % 3/31/2007 12/31/2006 change 3/31/2006 change ----------- --------------------------------------- Interest income: Interest and fees on loans $38,244 $38,950 -2% $32,604 17% Interest on securities 2,053 2,151 -5% 1,884 9% Interest on federal funds sold and other investments 495 324 53% 792 -38% ----------- --------------------------------------- Total interest income 40,792 41,425 -2% 35,280 16% ----------- --------------------------------------- Interest expense: Interest on deposits 16,299 15,245 7% 11,589 41% Interest on other borrowings 1,758 1,963 -10% 1,122 57% ----------- --------------------------------------- Total interest expense 18,057 17,208 5% 12,711 42% ----------- --------------------------------------- Net interest income before provision for loan losses 22,735 24,217 -6% 22,569 1% Provision for loan losses 980 1,362 -28% 1,080 -9% ----------- --------------------------------------- Net interest income after provision for loan losses 21,755 22,855 -5% 21,489 1% ----------- --------------------------------------- Non-interest income: Service fees on deposit accounts 1,620 1,553 4% 1,537 5% Net gains on sales of SBA loans 1,220 1,091 12% 1,717 -29% Net gains on sales of other loans - 1,272 N/A - N/A Net gains on sales of securities available-for- sale - 92 N/A - N/A Other income and fees 1,764 1,439 23% 1,788 -1% ----------- --------------------------------------- Total non- interest income 4,604 5,447 -15% 5,042 -9% ----------- --------------------------------------- Non-interest expense: Salaries and employee benefits 6,714 6,857 -2% 6,811 -1% Occupancy 2,075 2,087 -1% 1,816 14% Furniture and equipment 625 639 -2% 520 20% Advertising and marketing 662 655 1% 551 20% Data processing and communications 954 781 22% 953 0% Professional fees 846 663 28% 678 25% Other 2,070 1,965 5% 1,853 12% ----------- --------------------------------------- Total non- interest expense 13,946 13,647 2% 13,182 6% ----------- --------------------------------------- Income before income taxes 12,413 14,655 -15% 13,349 -7% Income taxes 5,105 5,298 -4% 5,470 -7% ----------- --------------------------------------- Net Income $7,308 $9,357 -22% $7,879 -7% =========== ======================================= Earnings Per Share: Basic $0.28 $0.36 $0.31 Diluted $0.28 $0.35 $0.30 Average Shares Outstanding Basic 26,123,405 26,103,639 25,473,400 Diluted 26,537,416 26,533,757 26,140,846 Nara Bancorp, Inc. Supplemental Data Unaudited (Dollars in Thousands) (Annualized) At or for the Three Months Ended, --------------------------------- Profitability measures: 3/31/2007 12/31/2006 3/31/2006 ---------- ---------------------- ROA 1.41% 1.88% 1.72% ROE 15.26% 20.56% 20.72% Net interest margin, including loan prepayment fee income 4.62% 5.10% 5.17% Net interest margin, excluding loan prepayment fee income 4.59% 4.99% 5.13% Efficiency ratio 51.01% 46.01% 47.74% Yield on loan portfolio 8.71% 9.21% 8.69% Yield on interest-earning assets 8.29% 8.73% 8.09% Cost of interest-bearing deposits 4.84% 4.78% 3.80% Cost of total deposits 3.80% 3.68% 2.94% Cost of interest-bearing liabilities 4.91% 4.91% 3.95% Cost of time deposits 5.22% 5.22% 4.22% Cost of funds 3.93% 3.87% 3.09% Net interest spread (yield on average interest-earning assets - average cost of funds) 4.36% 4.86% 5.00% For the Three Months Ended, --------------------------------------------------- % % 3/31/2007 12/31/2006 change 3/31/2006 change ----------- --------------------------------------- AVERAGE BALANCES Gross loans, includes loans held for sale $1,755,760 $1,691,340 4% $1,500,177 17% Interest-earning assets 1,967,142 1,898,348 4% 1,744,924 13% Total assets 2,066,373 1,995,194 4% 1,836,238 13% Interest-bearing deposits 1,348,086 1,276,231 6% 1,218,324 11% Interest-bearing liabilities 1,471,577 1,401,350 5% 1,286,621 14% Non-interest- bearing demand deposits 368,043 378,703 -3% 360,460 2% Stockholders' Equity 191,604 182,019 5% 152,105 26% LOAN PORTFOLIO % % COMPOSITION: 3/31/2007 12/31/2006 change 3/31/2006 change ----------- --------------------------------------- Commercial loans $562,406 $565,759 -1% $495,080 14% Real estate loans 1,145,196 1,102,072 4% 973,903 18% Consumer and other loans 43,945 49,201 -11% 58,214 -25% ----------- --------------------------------------- Loans outstanding 1,751,547 1,717,032 2% 1,527,197 15% Unamortized deferred loan fees - net of costs (2,305) (2,167) 6% (2,820) -18% ----------- --------------------------------------- Loans, net of deferred loan fees and costs 1,749,242 1,714,865 2% 1,524,377 15% Allowance for loan losses (18,752) (19,112) -2% (18,398) 2% ----------- --------------------------------------- Loan receivable, net $1,730,490 $1,695,753 2% $1,505,979 15% =========== ======================================= For the Three Months Ended, ------------------------------------------------------ ALLOWANCE FOR % % LOAN LOSSES: 3/31/2007 12/31/2006 Change 3/31/2006 Change ----------- ------------------------------------------ Balance at Beginning of Period $19,112 $18,909 1% $17,618 8% Provision for Loan Losses 980 1,362 -28% 1,080 -9% Recoveries 191 108 77% 351 -46% Charge Offs (1,531) (1,267) 21% (651) 135% ----------- ------------------------------------------ Balance at End of Period $18,752 $19,112 -2% $18,398 2% =========== ========================================== Net charge- off/Average gross loans (annualized) 0.31% 0.27% 0.08% NON-PERFORMING ASSETS 3/31/2007 12/31/2006 3/31/2006 ----------- ---------------------- Delinquent Loans 90 days or more on Non-Accrual Status $8,722 $3,271 $4,589 Delinquent Loans 90 days or more on Accrual Status - - - ----------- ---------------------- Total Non- Performing Loans 8,722 3,271 4,589 Other real estate owned - - - Restructured Loans 192 298 807 ----------- ---------------------- Total Non- Performing Assets $8,914 $3,569 $5,396 =========== ====================== Non-Performing Assets/ Total Assets 0.42% 0.17% 0.28% Non-Performing Loans/Gross Loans 0.50% 0.19% 0.30% Allowance for loan losses/ Gross Loans 1.07% 1.11% 1.21% Allowance for loan losses/ Non-Performing Loans 215% 584% 401% DEPOSIT % % COMPOSITION 3/31/2007 12/31/2006 Change 3/31/2006 Change ----------- ------------------------------------------ Non-interest- bearing demand deposits $383,525 $407,519 -6% $375,672 2% Money market and other 215,694 184,199 17% 218,235 -1% Saving deposits 141,754 141,611 0% 141,327 0% Time deposits of $100,000 or more 809,154 768,727 5% 732,348 10% Other time deposits 200,849 210,179 -4% 183,041 10% ----------- ----------- ------------------------------ Total deposit balances $1,750,976 $1,712,235 2% $1,650,623 6% =========== =========== ============================== DEPOSIT COMPOSITION (%)3/31/2007 12/31/2006 3/31/2006 ----------- ---------------------- Non-interest- bearing demand deposits 21.9% 23.8% 22.8% Money market and other 12.3% 10.7% 13.2% Saving deposits 8.1% 8.3% 8.6% Time deposits of $100,000 or more 46.2% 44.9% 44.4% Other time deposits 11.5% 12.3% 11.0% ----------- ---------------------- Total deposit balances 100.0% 100.0% 100.0% =========== ====================== CAPITAL RATIOS 3/31/2007 12/31/2006 3/31/2006 ----------- ---------------------- Total stockholders' equity $194,555 $186,627 $154,457 Tier 1 risk- based capital ratio 12.29% 12.16% 11.67% Total risk- based capital ratio 13.30% 13.21% 12.79% Tier 1 leverage ratio 11.16% 11.18% 10.45% Book value per share $7.45 $7.15 $6.04 Tangible book value per share $7.25 $6.95 $5.82 Tangible equity to tangible assets 8.95% 8.88% 7.80% CONTACT: Investors and Financial Media: Financial Relations Board Tony Rossi, 310-854-8317 -----END PRIVACY-ENHANCED MESSAGE-----