Nara Bancorp Reports $0.19 Earnings Per Diluted Share for Third Quarter 2008

LOS ANGELES--(BUSINESS WIRE)--October 22, 2008--Nara Bancorp, Inc. (the “Company”) (NASDAQ: NARA), the holding company of Nara Bank (the “Bank”), reported net income of $5.0 million, or $0.19 per diluted share, for third quarter 2008, compared to net income of $8.8 million, or $0.33 per diluted share, for third quarter 2007, and $1.9 million, or $0.07 per diluted share, for second quarter 2008.

Min Kim, President and Chief Executive Officer, said, “In the current challenging environment, we are focusing on maintaining strong capital and liquidity, attracting more core deposits, and aggressively monitoring our loan portfolio. As a result, we improved our total risk-based capital ratio to 13.08% during the third quarter and also increased our core deposit balances by approximately $74 million. This has helped to further strengthen our balance sheet and positions us well to manage through this difficult period.

“Our asset quality has continued to be adversely affected by economic conditions, although it remains manageable. In August we conducted a comprehensive loan review, which included performing individual reviews on over 800 loans that in the aggregate comprised 66% of our portfolio. The purpose of this review was to identify loans that are currently performing well, but have the potential to deteriorate in the future if economic conditions do not improve. In connection with this review, we identified approximately $66 million, or 3% of our total portfolio, that warrant closer monitoring. As a result of this review, we believe we have a good understanding of our exposure to potential credit deterioration,” said Ms. Kim.

	2008 Third Quarter			2007 Third Quarter			2008 Second Quarter
	(Dollars in thousands)
Net Income	$	4,982		$	8,782		$	1,853
Diluted EPS	$	0.19		$	0.33		$	0.07
Net interest income	$	24,753		$	25,135		$	24,156
Net interest margin		4.02	%		4.67	%		3.97	%
Non-interest income	$	4,011		$	5,890		$	3,325
Non-interest expense	$	13,991		$	14,585		$	14,840
Net Loans receivable	$	2,069,527		$	1,939,262		$	2,092,807
Deposits	$	1,946,843		$	1,814,463		$	1,928,580
Non-performing loans	$	30,501		$	5,491		$	25,222
ALLL to total loans		1.33	%		0.99	%		1.32	%
ALLL to non-performing loans		91	%		354	%		111	%
Provision for loan losses	$	6,180		$	1,550		$	9,652
Efficiency ratio		48.64	%		47.01	%		54.00	%

Net Interest Income and Net Interest Margin. Third quarter 2008 net interest income before provision for loan losses was $24.8 million, a decrease of 2% from third quarter 2007. Third quarter 2008 net interest margin (net interest income divided by average interest-earning assets) decreased 65 basis points to 4.02% from 4.67% in the third quarter of 2007. The decline in net interest margin was partially offset by average interest-earning asset growth of 14%.

The weighted average yield on the loan portfolio for third quarter 2008 decreased 172 basis points to 7.15% from 8.87% for the same period last year. The decrease was the result of the prime rate-based portion of the loan portfolio repricing downward as market interest rates continued to decline, due to further reductions in interest rates by the Federal Reserve through second quarter 2008. This was partially mitigated by the percentage of fixed rate loans in the portfolio increasing to 52% at September 30, 2008 from 48% at September 30, 2007. The weighted average yield on the variable rate and fixed rate portfolios (excluding loan discount accretion) at September 30, 2008 was 6.04% and 7.65%, respectively, compared to 8.80% and 7.72% at September 30, 2007.

The weighted average yield on securities available for sale for third quarter 2008 decreased 36 basis points to 4.62% from 4.98% for the same period last year. The decrease was primarily due to variable rate investment securities repricing downward as market rates declined.

The weighted average cost of deposits for third quarter 2008 decreased 124 basis points to 2.70% from 3.94% for the same period last year. The cost of time deposits decreased 194 basis points to 3.35% from 5.29%, contributing to a substantial portion of the decrease.

The weighted average cost of FHLB advances for third quarter 2008 decreased 65 basis points to 3.82% from 4.47% for third quarter 2007, reflecting the decline in market interest rates.

Sequentially, third quarter 2008 net interest income before provision for loan losses increased $597 thousand, or 2%, from second quarter 2008. The increase was primarily attributable to a slight increase in net interest margin resulting from a lower cost of funds. Although the Federal Reserve maintained the target Fed funds rate at 2.00% after its April 30, 2008 rate cut, the lag effect of deposits repricing downward continued to positively impact the Company’s cost of funds. Accordingly, the net interest margin increased 5 basis points to 4.02% for third quarter 2008 from 3.97% for second quarter 2008. In addition, average interest earning assets grew by $27 million during the quarter.

Interest income that was reversed for non-accrual loans was $273 thousand, $63 thousand, and $292 thousand for third quarter 2008, third quarter 2007, and second quarter 2008, respectively. Excluding this effect, the net interest margin for third quarter 2008, third quarter 2007, and second quarter 2008 was 4.07%, 4.68% and 4.02%, respectively.

Prepayment penalty income for third quarter 2008, third quarter 2007 and second quarter 2008 was $434 thousand, $654 thousand and $580 thousand, respectively. Excluding the effects of both non-accrual loan interest income and prepayment penalty income, the net interest margin for third quarter 2008, third quarter 2007 and second quarter 2008 was 4.00%, 4.56% and 3.92%, respectively.

Non-interest Income. Third quarter 2008 non-interest income was $4.0 million, a decrease of $1.9 million, or 32% compared to third quarter 2007. Net gains on sales of SBA and other loans were $268 thousand for third quarter 2008, a decrease of 88% from $2.2 million for third quarter 2007. The decline was primarily due to a substantial decrease in SBA loans sold and a reduction in the average sale premium. The average sale premium decreased to 4.89% for third quarter 2008 from 6.18% for third quarter 2007. The net realized gains on SBA loan sales for third quarter 2008 was 2.61% of the gross loans sold compared to 3.44% during third quarter 2007.

No gains on sale of other commercial real estate loans were recognized during third quarter 2008, compared to $518 thousand for the same period of 2007.

Sequentially, non-interest income increased 21% from second quarter 2008. Included in non-interest income for second quarter 2008 was an other-than-temporary impairment charge of $1.7 million resulting from the write-down of an asset-backed security, and a gain of $824 thousand due to an increase in the net valuation of interest rate swaps.

Non-interest Expense. Third quarter 2008 non-interest expense was $14.0 million, a decrease of 4% from $14.6 million for the same period last year. Salaries and employee benefits expense decreased by 5% over the same quarter of the prior year, primarily due to a decrease in bonus expense partially offset by an increase in salaries from annual salary adjustments. Professional fees decreased by 17%, primarily due to lower legal fees. Occupancy expense increased by 9% due to higher depreciation and amortization costs from the new branches opened in 2008.

Other non-interest expense decreased 13% to $2.3 million for third quarter 2008, compared to $2.6 million for the same period last year. Other non-interest expense for third quarter 2007 included a settlement expense of approximately $668 thousand related to an arbitration matter. Excluding this item, other non-interest expense increased by 16%, primarily due to an increase in credit related expense, including expenses related to OREO.

Sequentially, non-interest expense in third quarter 2008 decreased by 6% from $14.8 million in second quarter 2008. Salaries and employee benefits decreased $501 thousand primarily due to lower bonus accruals. Advertising and marketing expenses decreased 29%, primarily due to higher advertising cost during second quarter 2008 related to several deposit promotions. Data processing and communications expense decreased 16%, primarily due to an annual purging of closed accounts and the closing of unused telephone lines. Professional fees decreased by 25% primarily due to lower legal fees.

Income Taxes. The effective income tax rate was 42.0% for third quarter 2008 compared to 41.0% for third quarter 2007, and 38.0% for second quarter 2008. The lower effective income tax rate for second quarter 2008 was due primarily to increases in certain tax credits.

At September 30, 2008 total assets were $2.60 billion compared to $2.57 billion at June 30, 2008, an increase of 3.7% (annualized), and $2.42 billion at December 31, 2007.

Gross loans receivable were $2.10 billion at September 30, 2008, a decrease of 4.4% (annualized) from $2.12 billion at June 30, 2008. New loan production was $105.7 million during third quarter 2008, compared to $146 million during second quarter 2008 and $245 million during the third quarter 2007. New loan production has declined due to tightened underwriting criteria and reduced demand on the part of borrowers resulting from the economic slowdown. Loan pay-offs were $81.9 million during third quarter 2008, compared to $70 million during second quarter 2008 and $85 million during third quarter 2007.

SBA loan originations were $6.9 million during third quarter 2008 compared to $12.9 million during second quarter 2008 and $58.5 million during third quarter 2007. Sales of SBA loans during third quarter 2008 were $5.8 million, compared to $12.0 million during second quarter 2008 and $43.1 million during third quarter 2007.

Total deposits were $1.95 billion at September 30, 2008, an increase of 3.8% (annualized) from $1.93 billion at June 30, 2008 and 8.3% (annualized) from $1.83 billion at December 31, 2007. During third quarter 2008, core deposits increased $74 million offset by a $39 million decrease in jumbo CDs and a $17 million decrease in wholesale deposits, including brokered and state deposits. The retail deposit marketplace continues to be very competitive and rate sensitive as many financial institutions are aggressively pricing CDs in an attempt to improve liquidity.

FHLB advances were $350.0 million at September 30, 2008 and June 30, 2008 and $297.0 million at December 31, 2007. Advances are primarily long term advances with an expected average remaining term to maturity of 3.7 years. The average interest rate at September 30, 2008 was 3.78%

The Company recorded a provision for loan losses of $6.2 million in third quarter 2008, compared to $1.6 million in the same period of the prior year and $9.7 million in second quarter 2008.

Total delinquencies, representing loans 30 days or more past due, increased to $43.8 million at September 30, 2008 from $33.0 million at June 30, 2008 and $34.7 million at December 31, 2007. The $10.8 million increase in delinquencies during third quarter 2008 is largely attributable to the following two loan relationships:

Non-performing loans at September 30, 2008 were $30.5 million, or 1.45% of total loans, compared to $25.2 million, or 1.19% of total loans, at June 30, 2008 and $16.6 million, or 0.83% of total loans, at December 31, 2007. The sequential increase in non-performing loans is primarily due to the $7 million commercial line of credit described above.

Net loan charge-offs during third quarter 2008 were $6.3 million, or 1.19% of average loans on an annualized basis, compared to $1.2 million, or 0.25% of average loans on an annualized basis during third quarter 2007 and $4.9 million, or 0.93% of average loans on an annualized basis during second quarter 2008. Third quarter 2008 charge-offs include the following large charge-offs:

Excluding these loans, third quarter charge-offs primarily consisted of loans to retail businesses, averaging approximately $130 thousand per loan, excluding auto loans. Third quarter 2008 gross charge-offs were substantially provided for in the allowance for loan losses at June 30, 2008.

The allowance for loan losses at September 30, 2008 was $27.8 million, or 1.33% of gross loans receivable, compared to $27.9 million, or 1.32% of gross loans receivable, at June 30, 2008, and compared to $20.0 million, or 1.00% of gross loans receivable, at December 31, 2007. The allowance for loan losses to non-performing loans was 91%, 111% and 121% at September 30, 2008, June 30, 2008 and December 31, 2007, respectively. The allowance for loan losses reflects an increase in allowance allocations for increases in delinquencies, special mention and classified assets. Additionally, the Company has provided specific allowances for certain impaired loans. The most significant new impaired loan during third quarter 2008 was the $7 million commercial line of credit relationship noted above, which required an allowance allocation of $4.0 million, based on an updated appraisal. Excluding impaired loans, the allowance coverage on non-impaired loans was 77 basis points, compared to 76 basis points at June 30, 2008.

With the credit crisis morphing into a liquidity crisis, the tightened flow of funds has affected Wall Street, banks and consumers. The Company has focused on managing liquidity by controlling loan growth, emphasizing core deposit growth, and maximizing the sources of liquidity. Alternative funding sources have been an important part of asset-liability management. $200 million is from the California State Treasurer secured by investment securities, and $350 million are long term advances from the FHLB, secured by commercial real estate loans. Both of these sources are very stable and cost-effective. In addition, the Company has access to approximately $1 billion of additional cash through secured and unsecured sources.

The annualized return on average equity (ROE) for third quarter 2008 was 8.56%, compared to 16.85% for third quarter 2007 and 3.18% for second quarter 2008.

The annualized return on average assets (ROA) for third quarter 2008 was 0.77%, compared to 1.56% for third quarter 2007 and 0.29% for second quarter 2008.

The efficiency ratio for third quarter 2008 was 48.64%, compared to 47.01% for third quarter 2007 and 54.00% for second quarter 2008. The higher efficiency ratio during second quarter 2008 was due to lower net interest income and non-interest income and higher non-interest expense for second quarter 2008 as compared to third quarter 2008 and 2007.

At September 30, 2008, the Company continued to exceed the regulatory capital requirements to be classified as a “well-capitalized institution.” The Leverage Ratio was 10.42% at September 30, 2008, compared to 10.77% at December 31, 2007 and 10.98% at September 30, 2007. The Tier 1 Risk-based Ratio was 11.84% at September 30, 2008, compared to 11.84% at December 31, 2007 and 11.67% at September 30, 2007. The Total Risk-based Ratio was 13.08% at September 30, 2008 compared to 12.78% at December 31, 2007 and 12.60% at September 30, 2007.

The Company continues to expect full year 2008 fully diluted earnings per share to range between $0.62 and $0.67.

Commenting on the outlook, Ms. Kim said, “We anticipate that the operating environment will remain challenging for generating higher levels of earnings in the near future. We expect that credit costs will remain elevated as the economy continues to weaken and our net interest margin will once again contract as a result of additional rate cuts by the Fed. We intend to continue taking a very conservative approach to balance sheet management, with any loan growth being funded by continued increases in core deposits. This approach will enable us to maintain strong capital and liquidity until economic conditions improve.”

A conference call with simultaneous webcast to discuss the Company’s third quarter 2008 financial results will be held tomorrow, October 23, 2008 at 9:30 a.m. Pacific / 12:30 p.m. Eastern. Interested participants and investors may access the conference call by dialing 888-371-9318 (domestic) or 973-935-2986 (international), passcode 67931211. 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.

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 800-642-1687 (domestic) or 706-645-9291 (international) through October 30, 2008; the passcode is 67931211.

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 21 branches and 6 loan production offices in the United States. Nara Bank operates full-service branches in California, New York and New Jersey, with loan production offices in California, Nevada, Texas, Georgia, 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."

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)

Nara Bancorp, Inc.

Assets	9/30/2008			6/30/2008			% change		12/31/2007			% change		9/30/2007			% change

Cash and due from banks	$	41,281		$	41,963		-2	%	$	40,147		3	%	$	27,936		48	%
Federal funds sold		32,500			14,500		124	%		9,000		261	%		2,000		1525	%
Securities available for sale, at fair value		313,393			291,343		8	%		258,773		21	%		237,626		32	%
Federal Home Loan Bank and Federal Reserve Bank stock		21,836			23,817		-8	%		17,694		23	%		14,055		55	%
Loans held for sale, at the lower of cost or market		4,705			6,100		-23	%		12,304		-62	%		20,626		-77	%
Loans receivable		2,097,333			2,120,706		-1	%		2,008,729		4	%		1,958,693		7	%
Allowance for loan losses		(27,806	)		(27,899	)	0	%		(20,035	)	39	%		(19,431	)	43	%
Net loans receivable		2,069,527			2,092,807		-1	%		1,988,694		4	%		1,939,262		7	%
Accrued interest receivable		8,153			8,334		-2	%		9,348		-13	%		10,257		-21	%
Premises and equipment, net		11,836			11,683		1	%		11,254		5	%		11,476		3	%
Bank owned life insurance		23,291			23,219		0	%		22,908		2	%		22,695		3	%
Goodwill		2,697			2,697		0	%		2,347		15	%		2,347		15	%
Other intangible assets, net		1,795			1,963		-9	%		2,242		-20	%		2,406		-25	%
Other assets		66,638			55,158		21	%		48,699		37	%		53,813		24	%
Total assets	$	2,597,652		$	2,573,584		1	%	$	2,423,410		7	%	$	2,344,499		11	%


Liabilities

Deposits	$	1,946,843		$	1,928,580		1	%	$	1,833,346		6	%	$	1,814,463		7	%
Borrowings from Federal Home Loan Bank		350,000			350,000		0	%		297,000		18	%		240,000		46	%
Subordinated debentures		39,268			39,268		0	%		39,268		0	%		39,268		0	%
Accrued interest payable		8,599			7,943		8	%		10,481		-18	%		11,445		-25	%
Other liabilities		22,429			20,114		12	%		21,135		6	%		26,696		-16	%
Total liabilities		2,367,139			2,345,905		1	%		2,201,230		8	%		2,131,872		11	%

Stockholders' Equity

Common stock, $0.001 par value; authorized, 40,000,000 shares; issued and outstanding, 26,201,672, 26,197,672, 26,193,672 and 26,193,672 shares at September 30, 2008, June 30 2008, December 31, 2007 and September 30, 2007, respectively	$	26		$	26		0	%	$	26		0	%	$	26		0	%
Capital surplus		81,426			81,006		1	%		79,974		2	%		79,596		2	%
Retained earnings		152,939			148,677		3	%		142,491		7	%		134,874		13	%
Accumulated other comprehensive loss, net		(3,878	)		(2,030	)	91	%		(311	)	1147	%		(1,869	)	107	%
Total stockholders' equity		230,513			227,679		1	%		222,180		4	%		212,627		8	%

Total liabilities and stockholders' equity	$	2,597,652		$	2,573,584		1	%	$	2,423,410		7	%	$	2,344,499		11	%

Nara Bancorp, Inc.
Consolidated Statements of Income
Unaudited (Dollars in Thousands, Except for Per Share Data)

	Three Months Ended										Nine Months Ended September 30,
	9/30/2008		9/30/2007		% change		6/30/2008		% change		2008			2007	% change

Interest income:
Interest and fees on loans	$	37,801	$	42,752	-12	%	$	37,699	0	%	$	115,864	$	121,285	-4	%
Interest on securities		3,358		2,613	29	%		3,571	-6	%		10,597		6,771	57	%
Interest on federal funds sold and other investments		531		201	164	%		517	3	%		1,376		1,378	0	%
Total interest income		41,690		45,566	-9	%		41,787	0	%		127,837		129,434	-1	%

Interest expense:
Interest on deposits		12,948		17,613	-26	%		13,578	-5	%		41,733		50,815	-18	%
Interest on other borrowings		3,989		2,818	42	%		4,053	-2	%		12,585		6,539	92	%
Total interest expense		16,937		20,431	-17	%		17,631	-4	%		54,318		57,354	-5	%

Net interest income before provision for loan losses		24,753		25,135	-2	%		24,156	2	%		73,519		72,080	2	%
Provision for loan losses		6,180		1,550	299	%		9,652	-36	%		20,825		3,880	437	%
Net interest income after provision for loan losses		18,573		23,585	-21	%		14,504	28	%		52,694		68,200	-23	%

Non-interest income:
Service fees on deposit accounts		1,895		1,841	3	%		1,723	10	%		5,439		5,146	6	%
Net gains on sales of SBA and other loans		268		2,177	-88	%		626	-57	%		1,694		5,888	-71	%
Net gains on sales of securities available-for-sale		-		-	0	%		393	-100	%		860		-	100	%
Other income and fees		1,848		1,872	-1	%		583	217	%		3,942		5,571	-29	%
Total non-interest income		4,011		5,890	-32	%		3,325	21	%		11,935		16,605	-28	%

Non-interest expense:
Salaries and employee benefits		6,955		7,298	-5	%		7,456	-7	%		22,047		20,735	6	%
Occupancy		2,353		2,155	9	%		2,147	10	%		6,663		6,339	5	%
Furniture and equipment		722		699	3	%		707	2	%		2,138		2,008	6	%
Advertising and marketing		466		456	2	%		653	-29	%		1,669		1,602	4	%
Data processing and communications		754		798	-6	%		897	-16	%		2,481		2,622	-5	%
Professional fees		448		541	-17	%		601	-25	%		1,581		2,436	-35	%
Other		2,293		2,638	-13	%		2,379	-4	%		6,683		6,852	-2	%
Total non-interest expense		13,991		14,585	-4	%		14,840	-6	%		43,262		42,594	2	%
Income before income taxes		8,593		14,890	-42	%		2,989	187	%		21,367		42,211	-49	%
Income taxes		3,611		6,108	-41	%		1,136	218	%		8,759		17,351	-50	%
Net Income	$	4,982	$	8,782	-43	%	$	1,853	169	%	$	12,608	$	24,860	-49	%

Earnings Per Share:
Basic	$	0.19	$	0.34			$	0.07			$	0.48	$	0.95
Diluted	$	0.19	$	0.33			$	0.07			$	0.48	$	0.94

Average Shares Outstanding
Basic		26,199,455		26,189,368				26,195,035				26,196,066		26,159,584
Diluted		26,443,893		26,497,773				26,450,222				26,431,197		26,514,819

Nara Bancorp, Inc.
Supplemental Data
Unaudited (Dollars in Thousands, Except for Per Share Data)

	(Annualized) At or for the Three Months Ended						(Annualized) At or for the Nine Months Ended
Profitability measures:	9/30/2008		9/30/2007		6/30/2008		9/30/2008		9/30/2007
ROA	0.77	%	1.56	%	0.29	%	0.66	%	1.53	%
ROE	8.56	%	16.85	%	3.18	%	7.27	%	16.56	%
Net interest margin	4.02	%	4.67	%	3.97	%	4.05	%	4.67	%
Efficiency ratio	48.64	%	47.01	%	54.00	%	50.63	%	48.03	%

	Three Months Ended							Three Months Ended							Three Months Ended
	9/30/2008							9/30/2007							6/30/2008

			Interest			Annualized				Interest			Annualized					Interest		Annualized
	Average		Income/			Average		Average		Income/			Average		Average			Income/		Average
	Balance		Expense			Yield/Cost		Balance		Expense			Yield/Cost		Balance			Expense		Yield/Cost
	(Dollars in thousands)							(Dollars in thousands)							(Dollars in thousands)
INTEREST EARNING ASSETS:

Gross loans, includes loans held for sale	$	2,113,925	$	37,801		7.15	%	$	1,928,293	$	42,752		8.87	%	$	2,096,825		$	37,699	7.19	%
Securities available for sale		290,641		3,358		4.62	%		209,761		2,613		4.98	%		283,782			3,571	5.03	%
FRB and FHLB stock and other investments		23,052		369		6.40	%		11,876		174		5.86	%		25,311			371	5.86	%
Federal funds sold		32,626		162		1.99	%		2,185		27		4.94	%		27,552			146	2.12	%
Total interest earning assets	$	2,460,244	$	41,690		6.78	%	$	2,152,115	$	45,566		8.47	%	$	2,433,470		$	41,787	6.87	%

INTEREST BEARING LIABILITIES:
Deposits:
Demand, interest-bearing	$	291,134	$	2,121		2.91	%	$	265,416	$	2,874		4.33	%	$	263,094		$	1,819	2.77	%
Savings		140,295		1,229		3.50	%		147,134		1,425		3.87	%		143,161			1,340	3.74	%
Time deposits:
$100,000 or more		992,395		8,305		3.35	%		843,767		11,280		5.35	%		979,718			9,008	3.68	%
Other		153,560		1,293		3.37	%		163,461		2,034		4.98	%		151,777			1,411	3.72	%
Total time deposits		1,145,955		9,598		3.35	%		1,007,228		13,314		5.29	%		1,131,495			10,419	3.68	%
Total interest bearing deposits		1,577,384		12,948		3.28	%		1,419,778		17,613		4.96	%		1,537,750			13,578	3.53	%
FHLB advances		350,700		3,349		3.82	%		178,205		1,991		4.47	%		365,379			3,413	3.74	%
Other borrowings		37,709		640		6.79	%		37,564		827		8.81	%		38,214			640	6.70	%
Total interest bearing liabilities		1,965,793	$	16,937		3.45	%		1,635,547	$	20,431		5.00	%		1,941,343		$	17,631	3.63	%
Non-interest bearing demand deposits		342,200							368,321							337,229
Total funding liabilities / cost of funds	$	2,307,993				2.94	%	$	2,003,868				4.08	%	$	2,278,572				3.10	%
Net interest income / net interest spread			$	24,753		3.33	%			$	25,135		3.47	%				$	24,156	3.24	%
Net interest margin						4.02	%						4.67	%						3.97	%

Net interest margin, excluding effect of non-accrual loan income(expense)						4.07	%						4.68	%						4.02	%
Net interest margin, excluding effect of non-accrual loan income(expense) and prepayment fee income						4.00	%						4.56	%						3.92	%

Non-accrual loan income (reversed) recognized			$	(273	)					$	(63	)			$	(292	)
Prepayment fee income received				434							654					580
Net			$	161						$	591				$	288

Cost of deposits:
Non-interest bearing demand deposits	$	342,200	$	-				$	368,321	$	-				$	337,229		$	-
Interest bearing deposits		1,577,384		12,948		3.28	%		1,419,778		17,613		4.96	%		1,537,750			13,578	3.53	%
Total deposits	$	1,919,584	$	12,948		2.70	%	$	1,788,099	$	17,613		3.94	%	$	1,874,979		$	13,578	2.90	%

	Nine Months Ended							Nine Months Ended
	9/30/2008							9/30/2007

			Interest			Annualized				Interest			Annualized
	Average		Income/			Average		Average		Income/			Average
	Balance		Expense			Yield/Cost		Balance		Expense			Yield/Cost
	(Dollars in thousands)							(Dollars in thousands)
INTEREST EARNING ASSETS:

Gross loans, includes loans held for sale	$	2,088,853	$	115,864		7.40	%	$	1,836,424	$	121,285		8.81	%
Securities available for sale		288,910		10,597		4.89	%		187,037		6,771		4.83	%
FRB and FHLB stock and other investments		23,765		1,056		5.92	%		10,752		441		5.47	%
Federal funds sold		20,605		320		2.07	%		23,912		937		5.22	%
Total interest earning assets	$	2,422,133	$	127,837		7.04	%	$	2,058,125	$	129,434		8.39	%

INTEREST BEARING LIABILITIES:
Deposits:
Demand, interest-bearing	$	266,872	$	5,851		2.92	%	$	233,144	$	7,163		4.10	%
Savings		140,018		3,877		3.69	%		143,777		3,967		3.68	%
Time deposits:
$100,000 or more		954,933		27,522		3.84	%		821,707		32,781		5.32	%
Other		154,456		4,483		3.87	%		185,261		6,904		4.97	%
Total time deposits		1,109,389		32,005		3.85	%		1,006,968		39,685		5.25	%
Total interest bearing deposits		1,516,279		41,733		3.67	%		1,383,889		50,815		4.90	%
FHLB advances		372,330		10,543		3.78	%		123,832		4,041		4.35	%
Other borrowings		37,846		2,042		7.19	%		37,558		2,498		8.87	%
Total interest bearing liabilities		1,926,455	$	54,318		3.76	%		1,545,279	$	57,354		4.95	%
Non-interest bearing demand deposits		339,169							374,504
Total funding liabilities / cost of funds	$	2,265,624				3.20	%	$	1,919,783				3.98	%
Net interest income / net interest spread			$	73,519		3.28	%			$	72,080		3.44	%
Net interest margin						4.05	%						4.67	%
Net interest margin, excluding effect of non-accrual loan income(expense)						4.07	%						4.70	%
Net interest margin, excluding effect of non-accrual loan income(expense) and prepayment fee income						4.00	%						4.62	%

Non-accrual loan income (reversed) recognized			$	(406	)					$	(515	)
Prepayment fee income received				1,235							1,320
Net			$	829						$	805

Cost of deposits:
Non-interest bearing demand deposits	$	339,169	$	-				$	374,504	$	-
Interest bearing deposits		1,516,279		41,733		3.67	%		1,383,889		50,815		4.90	%
Total deposits	$	1,855,448	$	41,733		3.00	%	$	1,758,393	$	50,815		3.85	%

	For the Three Months Ended									For the Nine Months Ended
	9/30/2008		9/30/2007	% change		6/30/2008		% change		9/30/2008	9/30/2007	% change
AVERAGE BALANCES
Gross loans, includes loans held for sale	2,113,925	$	1,928,293	10	%	$	2,096,825	1	%	2,088,853	1,836,424	14	%
Investments	346,319		223,822	55	%		336,645	3	%	333,280	221,701	50	%
Interest-earning assets	2,460,244		2,152,115	14	%		2,433,470	1	%	2,422,133	2,058,125	18	%
Total assets	2,573,286		2,258,958	14	%		2,545,239	1	%	2,532,671	2,161,190	17	%

Interest-bearing deposits	1,577,384		1,419,778	11	%		1,537,750	3	%	1,516,279	1,383,889	10	%
Interest-bearing liabilities	1,965,793		1,635,547	20	%		1,941,343	1	%	1,926,455	1,545,279	25	%
Non-interest-bearing demand deposits	342,200		368,321	-7	%		337,229	1	%	339,169	374,504	-9	%
Stockholders' Equity	232,918		208,498	12	%		232,865	0	%	231,133	200,151	15	%
Net interest earning assets	494,451		516,568	-4	%		492,127	0	%	495,678	512,846	-3	%

LOAN PORTFOLIO COMPOSITION:	9/30/2008			6/30/2008			% change		12/31/2007			% change		9/30/2007			% change

Commercial loans	$	600,933		$	615,977		-2	%	$	605,553		-1	%	$	593,962		1	%
Real estate loans		1,470,348			1,474,204		0	%		1,369,826		7	%		1,333,428		10	%
Consumer and other loans		27,574			32,140		-14	%		34,809		-21	%		33,207		-17	%
Loans outstanding		2,098,855			2,122,321		-1	%		2,010,188		4	%		1,960,597		7	%
Unamortized deferred loan fees - net of costs		(1,522	)		(1,615	)	-6	%		(1,459	)	4	%		(1,904	)	-20	%
Loans, net of deferred loan fees and costs		2,097,333			2,120,706		-1	%		2,008,729		4	%		1,958,693		7	%
Allowance for loan losses		(27,806	)		(27,899	)	0	%		(20,035	)	39	%		(19,431	)	43	%
Loan receivable, net	$	2,069,527		$	2,092,807		-1	%	$	1,988,694		4	%	$	1,939,262		7	%

DEPOSIT COMPOSITION (%)	9/30/2008			6/30/2008			12/31/2007			9/30/2007
Non-interest-bearing demand deposits		18.1	%		18.2	%		19.9	%		20.4	%
Money market and other		16.4	%		13.9	%		14.2	%		14.7	%
Saving deposits		6.6	%		7.6	%		7.8	%		8.2	%
Time deposits of $100,000 or more		48.9	%		52.7	%		49.1	%		47.9	%
Other time deposits		10.0	%		7.6	%		9.0	%		8.8	%
Total deposit balances		100.0	%		100.0	%		100.0	%		100.0	%


CAPITAL RATIOS	9/30/2008			6/30/2008			12/31/2007			9/30/2007
Total stockholders' equity	$	230,513		$	227,679		$	222,180		$	212,627
Tier 1 risk-based capital ratio		11.84	%		11.53	%		11.84	%		11.67	%
Total risk-based capital ratio		13.08	%		12.76	%		12.78	%		12.60	%
Tier 1 leverage ratio		10.42	%		10.35	%		10.77	%		10.98	%
Book value per share	$	8.80		$	8.69		$	8.48		$	8.12
Tangible book value per share	$	8.63		$	8.51		$	8.31		$	7.94
Tangible equity to tangible assets		8.72	%		8.68	%		9.00	%		8.88	%

	For the Three Months Ended													For the Nine Months Ended
ALLOWANCE FOR LOAN LOSSES:	9/30/2008			6/30/2008			% Change		9/30/2007			% Change		9/30/2008			9/30/2007			% Change
Balance at Beginning of Period	$	27,899		$	23,116		21	%	$	19,101		46	%	$	20,035		$	19,112		5	%
Provision for Loan Losses		6,180			9,652		-36	%		1,550		299	%		20,825			3,880		437	%
Recoveries		23			58		-60	%		87		-74	%		128			674		-81	%
Charge Offs		(6,296	)		(4,927	)	28	%		(1,307	)	382	%		(13,182	)		(4,235	)	211	%
Balance at End of Period	$	27,806		$	27,899		0	%	$	19,431		43	%	$	27,806		$	19,431		43	%
Net charge-off/Average gross loans (annualized)		1.19	%		0.93	%				0.25	%				0.83	%		0.26	%

NON-PERFORMING ASSETS	9/30/2008			6/30/2008			12/31/2007			9/30/2007
Delinquent Loans 90 days or more on Non-Accrual Status	$	30,501		$	25,222		$	16,592		$	5,491
Delinquent Loans 90 days or more on Accrual Status		-			-			-			-
Total Non-Performing Loans		30,501			25,222			16,592			5,491
Other real estate owned		2,623			-			-			-
Restructured Loans		3,699			1,414			765			621
Total Non-Performing Assets	$	36,823		$	26,636		$	17,357		$	6,112
Non-Performing Assets/Total Assets		1.42	%		1.03	%		0.72	%		0.26	%
Non-Performing Loans/Gross Loans		1.45	%		1.19	%		0.83	%		0.28	%
Allowance for loan losses/ Gross Loans		1.33	%		1.32	%		1.00	%		0.99	%
Allowance for loan losses/ Non-Performing Loans		91	%		111	%		121	%		354	%

3731 Wilshire Boulevard, Suite 1000, Los Angeles, CA	90010
(Address of principal executive offices)	(Zip Code)

(d) Exhibits

Exhibit No.	Description

Exhibit 99.1	Press release issued by Nara Bancorp, Inc. dated October 22, 2008.

		Nara Bancorp, Inc.



Date:	October 23, 2008	By:	/s/ Alvin D. Kang
		Name:	Alvin D. Kang
		Title:	Chief Financial Officer

	September 30
	2008		2007
Weighted average loan portfolio yield (excluding discounts)	6.87	%	8.28	%
Weighted average securities available-for-sale portfolio yield	4.89	%	5.25	%
Weighted average cost of deposits	2.69	%	3.87	%
Weighted average cost of total interest-bearing deposits	3.29	%	4.88	%
Weighted average cost of FHLB advances	3.78	%	4.33	%

DEPOSIT COMPOSITION	9/30/2008		6/30/2008		% Change		12/31/2007		% Change			9/30/2007	% Change
Non-interest-bearing demand deposits	$	352,252	$	351,188	0	%	$	364,518	-3	%	$	370,100	-5	%
Money market and other		318,701		266,988	19	%		260,224	22	%		266,039	20	%
Saving deposits		128,490		146,362	-12	%		143,020	-10	%		147,987	-13	%
Time deposits of $100,000 or more		951,987		1,017,160	-6	%		899,980	6	%		869,879	9	%
Other time deposits		195,413		146,882	33	%		165,604	18	%		160,458	22	%
Total deposit balances	$	1,946,843	$	1,928,580	1	%	$	1,833,346	6	%	$	1,814,463	7	%