EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

CENTER FINANCIAL REPORTS SOLID OPERATING PERFORMANCE

FOR 2007 SECOND QUARTER

— Company Posts 23% Gain in Net Loans and 10% Increase in Deposits Year-Over-Year —

LOS ANGELES, CA – July 25, 2007 – Center Financial Corporation (NASDAQ: CLFC), the holding company of Center Bank, today reported financial results for its three and six-month periods ended June 30, 2007, reflecting solid levels of growth in both loans and deposits over the prior-year periods.

2007 second-quarter highlights include:

 

   

Net loans increased sequentially by $34.4 million to $1.61 billion from Q1 2007; up 23% over Q2 2006

 

   

Net loans represented 84.3% of total assets, versus 83.4% at year-end 2006

 

   

Provision for loan losses of $1.1 million, compared with $1.5 million in Q2 2006

 

   

Allowance for loan losses was at 1.12%

 

   

Total non-performing assets of $6.0 million, or 0.37% of total gross loans, versus $3.9 million, or 0.24% of total loans, at March 31, 2007

 

   

Impaired loans decreased to $2.6 million from $21.0 million from March 31, 2007

 

   

Total deposits up 10% from March 31, 2007 to $1.59 billion on strong growth in money market accounts

 

   

Non-interest bearing deposits equal 25% of total deposits, versus 27% for Q1 2007

 

   

Net interest margin stable at 4.39%, compared with Q1 2007

 

   

Net interest income before provision for loan losses increased 11% to $19.2 million over Q2 2006

 

   

Net income totaled $6.5 million, or $0.39 per diluted share, compared with $5.9 million, or $0.35 per diluted share, in preceding first quarter

 

   

Efficiency ratio improved sequentially to 51.2%, versus 51.9% for Q1 2007

 

   

Return on average assets improved to 1.39%, up from 1.29% for Q1 2007

 

   

Return on average equity improved sequentially to 17.27%, compared with 16.43% for Q1 2007

 

   

Memorandum of Understanding (MOU) with FDIC lifted after a finding of significant improvement in compliance with BSA-related regulations

 

   

Authorized stock repurchase program up to $10 million

 

   

Quarterly cash dividend of $0.05 per share, reflecting a 25% increase over the prior quarterly dividend

“Our second quarter financial results reflect solid operating performance, and we remain encouraged with the consistent levels of organic growth being delivered by Center Bank’s team,” said Jae Whan (J.W.) Yoo, president and chief executive officer. “Despite the difficult operating environment that continues to challenge both the ethnic and mainstream institutions in the loan and deposit market, we originated stronger-than-anticipated levels of loan production and benefited from a successful money market account campaign to boost deposit growth during the quarter.

“Importantly, these results were achieved during a time of renewed building and strengthening at Center Bank,” Yoo said. “Early in the quarter, we announced organizational changes, newly created positions and units, and new appointments, all to support our next phase of growth. To further enhance our growth, we organized our existing branches and loan production offices into four regional groups, each with a regional director to more effectively support and monitor loan production and to streamline productivity.

“Of course, we were thrilled with the Federal Deposit Insurance Corporation’s findings following our recent annual examination that culminated in the lifting of the memorandum of understanding,” Yoo said. “We also announced a share repurchase plan and effected a 25 percent increase in our quarterly dividend, both of which underpin our board’s absolute confidence in the long-term prospects of Center Bank and deep commitment to our shareholders. With the MOU now behind us, along with consistent financial performance and strong asset quality, we look forward to returning to an expansion mode and seeking strategic opportunities to further enhance the value of our organization for Center’s customers, employees and shareholders.”


2007 SECOND QUARTER

For the three months ended June 30, 2007, net interest income before provision for loan losses rose 11% to $19.2 million from $17.3 million in the 2006 second quarter, reflecting the growth in the company’s earning assets driven by continued strength in loan originations, offset in part by higher interest expense on borrowed funds. The company’s yield on interest-earning assets averaged 8.11% for the three months ended June 30, 2007, compared with 8.02% in the 2007 first quarter and 7.88% in the 2006 second quarter. The net interest margin for the 2007 second quarter was 4.39%, equal to the rate in the immediately preceding first quarter, but down from 4.58% in the year-ago second quarter.

The company’s provision for loan losses decreased to $1.1 million in the 2007 second quarter, versus $1.3 million in the 2007 first quarter and $1.5 million in the prior-year’s second quarter. Allowance for loan losses to gross loans was 1.12%, the same level as in the immediately preceding first quarter.

Noninterest income in the second quarter of 2007 totaled $4.5 million, including a gain of $618,000 on a sale of unguaranteed portion of SBA loans. This compares with noninterest income of $7.7 million in the year-ago period, which included a one-time insurance settlement recognition of approximately $2.5 million, as well as a gain on sale of loans of $1.1 million.

Noninterest expense for the 2007 second quarter equaled $12.1 million, compared with $10.7 million a year earlier, principally reflecting increased costs for staff and occupancy over the prior-year period. In addition, the company posted higher professional fees in the current quarter versus the 2006 second quarter. In the year ago period, the company utilized the previously mentioned insurance settlement to recoup $230,000 of legal costs, which thereby reduced the overall expenses during the quarter. The company’s efficiency ratio was 51.2% for the three months ended June 30, 2007. The company’s efficiency ratio for the second quarter of 2006 benefited from the one-time insurance settlement and was 42.7% for the period. Excluding the insurance settlement, the company would have reported an efficiency ratio of 47.5% for the 2006 second quarter.

Net income for the 2007 second quarter totaled $6.4 million, equal to $0.39 per diluted share. This compares with $7.7 million, or $0.46 per diluted share, in the same period a year ago, or $6.2 million, or $0.36 per diluted share, excluding the one-time insurance settlement recognition.

Return on average assets (ROAA) and return on average equity (ROAE) equaled 1.39% and 17.27%, respectively, for the three months ended June 30, 2007. This compares with 1.29% and 16.43%, respectively, for the immediately preceding first quarter. In the year-ago second quarter, ROAA and ROAE were 1.87% and 25.16%, respectively, or 1.50% and 20.24% excluding the positive impact of the one-time insurance settlement.

FIRST HALF 2007

For the six months ended June 30, 2007, net interest income before provision for loan losses increased 11% to $37.8 million from $33.9 million in the comparable 2006 period, reflecting the growth in the company’s earning assets driven by continued strength in loan originations, offset in part by higher interest expense on borrowed funds. Yield on interest earning assets in the first half of 2007 rose to 8.06% from 7.71% in same period a year ago. The net interest margin year-to-date was 4.39%, compared with 4.49% for the first six months of 2006.

The company’s provision for loan losses totaled $2.4 million in the first half of 2007, compared with $1.8 million in the 2006 six-month period. Allowance for loan losses to gross loans was 1.12% for the first half of 2007 and 1.13% for the first half 2006.

Noninterest income totaled $8.1 million for first half of 2007, compared with $12.7 million in the 2006 six-month period. The decrease in noninterest income is primarily attributed to the $2.5 million one-time insurance settlement recognition, as well as a $1.2 million decline in the gain on sale of loans totaling $618,000 in the current year-to-date period, compared with $1.8 million in the first half of 2006.

Noninterest expense for the first six months of 2007 rose 4% to $23.7 million from $22.8 million a year earlier, reflecting increased costs for staff and occupancy over the prior-year period. The company’s efficiency ratio was 51.5% for the first half of 2007. This compares with an efficiency ratio of 48.8%, which included the net positive impact from the $2.5 million non-recurring insurance settlement offset partially by a one-time, BSA-related consulting expense of $1.5 million recorded in the 2006 first quarter. Excluding the insurance settlement, the company would have reported an efficiency ratio of 51.6% for the 2006 first half.


Net income for the first six months of 2007 totaled $12.3 million, or $0.74 per diluted share. This compares with $13.4 million, or $0.81 per diluted share, in 2006 year-to-date period, or $12.0 million, equal to $0.71 per diluted share, excluding the one-time insurance settlement recognition.

Return on average assets and return on average equity for the six months ended June 30, 2007 equaled 1.33% and 16.86%, respectively, compared with 1.64% and 22.74% during the same period in 2006. Excluding one-time insurance settlement in the year-ago second quarter, ROAA and ROAE would have been 1.45% and 20.20%, respectively.

Gross loans at June 30, 2007 increased sequentially to $1.64 billion from $1.60 billion at March 31, 2007 and rose 5% from $1.56 billion at December 31, 2006. As of June 30, 2007, commercial real estate loans remained the largest component of the company’s total loan portfolio, increasing 4% over year-end 2006 and accounting for 66% of total loans. Real estate construction loans increased 35% by $15.4 million over December 31, 2006 and accounted for 4% of the company’s total loans at June 30, 2007. Commercial and industrial loans, including commercial, trade finance and SBA loans, represented 25% and consumer loans totaled 5% of the gross loan portfolio at June 30, 2007. Net loans as a percentage of total assets increased to 84.3% at June 30, 2007, compared with 83.4% at year-end 2006.

While Center Financial continues to maintain high levels of asset quality in its loan portfolio, it experienced slight deterioration during the 2007 second quarter with non-performing assets totaling $6.0 million, or 0.37% of total loans, at June 30, 2007, compared with $3.3 million, or 0.21% of total loans, at December 31, 2006. The company said the majority of the increase was related to two nonperforming guaranteed SBA loans outside of Southern California, which are currently under recovery. Net charge-offs year-to-date totaled $1.5 million. This compares with net charge-offs of $682,000 in the first six months of 2006, which reflected larger-than-usual levels of recoveries during the period. The allowance for loan losses at June 30, 2007 increased to $18.3 million, reflecting the expansion of the company’s loan portfolio, and represented 1.12% of loans. This compares with allowance for losses of $17.4 million, or 1.12% of gross loans, at December 31, 2006.

Total deposits at June 30, 2007 equaled $1.59 billion, up 11% over $1.43 billion at December 31, 2006. Non-interest bearing deposits at the end of the 2007 second quarter totaled $393.1 million and accounted for 25% of total deposits, versus $388.2 million, or 27% of total deposits, at December 31, 2006. During the current second quarter, Center Bank initiated a money market account promotion, which drew in approximately $85 million in deposits. Time deposits at June 30, 2007 accounted for 54% of total deposits, compared with same level at year-end 2006. With the success of Center Bank’s deposit campaign during the quarter, the company’s loan-to-deposit ratio June 30, 2007 declined to 101.8% from 107.5% at December 31, 2006.

The average cost of interest-bearing deposits year-to-date increased to 4.74% from 4.28% for the 2006 first half, reflecting continual increases in the Fed Funds Rate by the Federal Reserve. The average cost of total deposits rose to 3.47% for the current six months, up from 3.17% in the same year-ago period.

Total assets at June 30, 2007 increased to $1.91 billion from $1.84 billion at December 31, 2006, reflecting growth in both the company’s loan and deposit portfolios. Average interest-earning assets totaled $1.74 billion for the 2007 six-month period, compared with $1.52 billion for the corresponding 2006 period.

Shareholders’ equity at June 30, 2007 increased 9% to $153.0 million from $140.7 million at December 31, 2006. At June 30, 2007, Center Financial remained “well-capitalized” under all regulatory categories, with a Tier 1 risk-based capital ratio of 9.85%, a total risk-based capital ratio of 10.96%, and a Tier 1 leverage ratio of 9.03%.

Subsequent to the close of the 2007 second quarter, Center Bank opened a new Loan Production Office (LPO) in Northern California. Jung H. Cho, who joined Center Bank’s SBA department in August 2005, was promoted to manager of the Northern California LPO, located at 2620 Augustine Drive, Suite #185, Santa Clara, California 95054, telephone number (408) 988-9028. The company said it closed its Honolulu and Houston LPOs due to inactivity.


Investor Conference Call

The company will host an investor conference call at 11:00 a.m. EDT (8:00 a.m. PDT) on Thursday, July 26, 2007 to review the financial results for its 2007 second quarter. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet at www.centerbank.com and www.earnings.com. Listeners are encouraged to visit the Web site at least 15 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephone replay of the call will be available through 8:00 p.m. EDT, Thursday, August 2, 2007 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 36494107.

About Center Financial Corporation

Center Financial Corporation is the holding company of Center Bank, a community bank offering a full range of financial services for diverse ethnic and small business customers. Founded in 1986 and specializing in commercial and SBA loans and trade finance products, Center Bank has grown to be one of the nation’s largest financial institutions focusing on the Korean-American community, with total assets of $1.91 billion at June 30, 2007. Headquartered in Los Angeles, Center Bank operates 25 branch and loan production offices. Of the company’s 17 full-service branches, 15 are located throughout Southern California, along with one branch each in Chicago and Seattle. Center Bank’s eight loan production offices are strategically located in Phoenix, Seattle, Denver, Washington D.C., Las Vegas, Atlanta, Dallas and Northern California. Center Bank is a California state-chartered institution and its deposits are insured by the FDIC to the extent provided by law. For additional information on Center Bank, visit the company’s Web site at www.centerbank.com.

This release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the next phase of growth for Center Financial and Center Bank, the company’s ability to successfully return to an expansion mode and the company’s ability to engage in strategic opportunities to further enhance its value. The forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and actual results and performance in future periods may be materially different from any future results or performance suggested by the forward-looking statements in this release. Factors that might cause such differences include, but are not limited to, those identified in our cautionary statements contained in Center Financial Corp.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (See Business, and Management’s Discussion and Analysis), and other filings with the Securities and Exchange Commission (SEC) are incorporated herein by reference. These factors include, but are not limited to: competition in the financial services market for both deposits and loans; the ability of Center Financial and its subsidiaries to increase its customer base; changes in interest rates; new litigation or changes or adverse developments in existing litigation; and regional and general economic conditions. Such forward-looking statements speak only as of the date of this release. Center Financial expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in the company’s expectations of results or any change in events.

# # #

(TABLES FOLLOW)


CENTER FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

 

     6/30/2007     12/31/2006  
     (Dollars in thousands)  

ASSETS

    

Cash and due from banks

   $ 77,784     $ 71,504  

Federal funds sold

     6,745       —    

Money market funds and interest-bearing deposits in other banks

     1,972       1,872  
                

Cash and cash equivalents

     86,501       73,376  

Securities available for sale, at fair value

     130,057       148,913  

Securities held to maturity, at amortized cost (fair value of $11,021 as of June 30, 2007 and $10,571 as of December 31, 2006)

     11,257       10,591  

Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost

     13,181       11,065  

Loans, net of allowance for loan losses of $18,289 as of June 30, 2007 and $17,412 as of December 31, 2006

     1,583,793       1,518,666  

Loans held for sale, at the lower of cost or market

     30,367       18,510  

Premises and equipment, net

     13,606       13,322  

Customers' liability on acceptances

     3,115       4,871  

Accrued interest receivable

     8,314       8,574  

Deferred income taxes, net

     11,140       11,723  

Investments in affordable housing partnerships

     6,219       6,878  

Cash surrender value of life insurance

     11,380       11,183  

Goodwill

     1,253       1,253  

Intangible assets, net

     293       320  

Other assets

     3,731       4,067  
                

Total Assets

   $ 1,914,207     $ 1,843,312  
                

LIABILITIES AND SHAREHOLDERS' EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 393,108     $ 388,163  

Interest-bearing

     1,192,244       1,041,236  
                

Total deposits

     1,585,352       1,429,399  

Acceptances outstanding

     3,115       4,871  

Accrued interest payable

     11,623       11,458  

Other borrowed funds

     133,258       229,490  

Trust preferred securities

     18,557       18,557  

Accrued expenses and other liabilities

     9,289       8,803  
                

Total liabilities

     1,761,194       1,702,578  

Commitments and contingencies

     —         —    

Shareholders' equity

    

Serial preferred stock, no par value; authorized 10,000,000 shares; issued and outstanding, none

     —         —    

Common stock, no par value; authorized 40,000,000 shares; issued and outstanding, 16,718,447 as of June 30, 2007 and 16,632,601 as of December 31, 2006

     70,587       69,172  

Retained earnings

     82,614       71,777  

Accumulated other comprehensive loss, net of tax

     (188 )     (215 )
                

Total shareholders' equity

     153,013       140,734  
                

Total Liabilities and Shareholders' Equity

   $ 1,914,207     $ 1,843,312  
                

Tangible book value per share

   $ 9.06     $ 8.37  


CENTER FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

 

    

Three Months

Ended

  

Six Months Ended

June 30,

     6/30/07    3/31/07    6/30/06    2007    2006
     (Dollars in thousands, except per share data)

Interest and Dividend Income:

              

Interest and fees on loans

   $ 33,490    $ 31,981    $ 26,767    $ 65,471    $ 52,055

Interest on federal funds sold

     62      52      595      114      1,418

Interest on taxable investment securities

     1,551      1,626      2,058      3,177      4,244

Interest on tax-advantaged investment securities

     129      133      152      262      249

Dividends on equity stock

     181      174      92      355      158

Money market funds and interest-earning deposits

     16      15      53      32      113
                                  

Total interest and dividend income

     35,429      33,981      29,717      69,411      58,237

Interest Expense:

              

Interest on deposits

     13,431      11,577      11,920      25,008      23,344

Interest on borrowed funds

     2,426      3,436      177      5,862      281

Interest expense on trust preferred securities

     373      369      359      743      693
                                  

Total interest expense

     16,230      15,382      12,456      31,613      24,318
                                  

Net interest income before provision for loan losses

     19,199      18,599      17,261      37,798      33,919

Provision for loan losses

     1,100      1,270      1,518      2,370      1,775
                                  

Net interest income after provision for loan losses

     18,099      17,329      15,743      35,428      32,144

Noninterest Income:

              

Customer service fees

     1,772      1,767      2,084      3,539      4,214

Fee income from trade finance transactions

     682      749      797      1,431      1,750

Wire transfer fees

     226      211      237      437      453

Gain on sale of loans

     618      —        1,123      618      1,797

Gain on sale of premises and equipment

     —        12      —        —        —  

Loan service fees

     612      377      414      990      968

Insurance settlement - legal fees

     —        —        2,520      —        2,520

Other income

     585      534      532      1,131      1,012
                                  

Total noninterest income

     4,495      3,650      7,707      8,146      12,714

Noninterest Expense:

              

Salaries and employee benefits

     6,218      6,257      5,315      12,476      10,878

Occupancy

     983      959      896      1,943      1,779

Furniture, fixtures, and equipment

     497      467      509      964      969

Data processing

     533      503      541      1,037      1,083

Professional service fees

     1,082      1,008      354      2,090      2,414

Business promotion and advertising

     830      641      1,123      1,471      1,968

Stationery and supplies

     138      134      167      271      326

Telecommunications

     146      136      165      282      338

Postage and courier service

     191      190      195      381      336

Security service

     271      241      239      511      502

Loss on interest rate swaps

     —        —        30      —        83

Other operating expenses

     1,240      1,001      1,133      2,241      2,081
                                  

Total noninterest expense

     12,129      11,537      10,667      23,667      22,757
                                  

Income before income tax provision

     10,465      9,442      12,783      19,907      22,101

Income tax provision

     3,982      3,584      5,104      7,566      8,653
                                  

Net income

   $ 6,483    $ 5,858    $ 7,679    $ 12,341    $ 13,448
                                  

EARNINGS PER SHARE:

              

Basic

   $ 0.39    $ 0.35    $ 0.47    $ 0.74    $ 0.82
                                  

Diluted

   $ 0.39    $ 0.35    $ 0.46    $ 0.74    $ 0.81
                                  

Weighted average shares outstanding - basic

     16,679,653      16,645,356      16,494,337      16,671,814      16,481,486
                                  

Weighted average shares outstanding - diluted

     16,761,144      16,670,678      16,634,626      16,788,787      16,641,017
                                  


CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

 

     Three Months Ended  
     6/30/07     3/31/2007     6/30/06  
    

Average

Balance

  

Rate/

Yield

   

Average

Balance

  

Rate/

Yield

   

Average

Balance

  

Rate/

Yield

 

Assets:

               

Interest-earning assets:

               

Loans

   $ 1,591,648    8.44  %   $ 1,546,276    8.39 %   $ 1,244,273    8.63 %

Federal funds sold

     4,401    5.65       3,649    5.78       49,293    4.84  

Investments

     156,539    4.81       169,307    4.67       218,259    4.60  
                                       

Total interest-earning assets

     1,752,588    8.11  %     1,719,232    8.02  %     1,511,825    7.88  %
                                       

Noninterest earning assets:

               

Cash and due from banks

     66,295        74,121        79,629   

Bank premises and equipment, net

     13,553        13,418        13,769   

Customers’ acceptances outstanding

     4,446        3,641        5,228   

Accrued interest receivable

     7,642        7,884        6,930   

Other assets

     31,631        29,224        32,613   
                           

Total noninterest-earning assets

     123,567        128,288        138,169   
                           

Total assets

   $ 1,876,155      $ 1,847,520      $ 1,649,994   
                           

Liabilities and Shareholders’ Equity:

               

Interest-bearing liabilities:

               

Deposits:

               

Money market and NOW accounts

   $ 228,726    4.01 %   $ 171,633    3.34 %   $ 219,626    2.99 %

Savings

     69,258    3.43       72,887    3.58       81,958    3.80  

Time certificates of deposit over $100,000

     718,716    5.26       667,823    5.17       680,426    4.96  

Other time certificates of deposit

     97,148    4.69       90,723    4.50       101,748    4.30  
                                       
     1,113,848    4.84       1,003,066    4.68       1,083,758    4.45  

Other borrowed funds

     181,339    5.37       263,099    5.30       14,463    4.92  

Long-term subordinated debentures

     18,557    8.06       18,557    8.06       18,557    7.76  
                                       

Total interest-bearing liabilities

     1,313,744    4.96       1,284,722    4.86       1,116,778    4.47  
                               

Noninterest-bearing liabilities:

               

Demand deposits

     389,084        392,732        387,106   
                           

Total funding liabilities

     1,702,828    3.82  %     1,677,454    3.72  %     1,503,884    3.32  %
                           

Other liabilities

     22,745        25,397        23,686   
                           

Total noninterest-bearing liabilities

     411,829        418,129        410,792   

Shareholders’ equity

     150,582        144,669        122,424   
                           

Total liabilities and shareholders’ equity

   $ 1,876,155      $ 1,847,520      $ 1,649,994   
                           

Net interest income

               

Cost of deposits

      3.58  %      3.36  %      3.25  %
                           

Net interest spread

      3.15  %      3.16  %      3.41  %
                           

Net interest margin

      4.39  %      4.39  %      4.58  %
                           


CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

 

     Six Months Ended June 30,  
     2007     2006  
     Average
Balance
   Rate/
Yield
    Average
Balance
   Rate/
Yield
 

Assets:

          

Interest-earning assets:

          

Loans

   $ 1,570,071    8.41 %   $ 1,236,045    8.49  %

Federal funds sold

     4,027    5.71       61,482    4.65  

Investments

     162,888    4.74       225,237    4.48  
                          

Total interest-earning assets

     1,736,986    8.06  %     1,522,764    7.71  %
                          

Noninterest-earning assets:

          

Cash and due from banks

     70,187        77,062   

Bank premises and equipment, net

     13,486        13,871   

Customers’ acceptances outstanding

     4,046        4,636   

Accrued interest receivable

     7,762        6,722   

Other assets

     31,995        31,209   
                  

Total noninterest-earning assets

     127,476        133,500   
                  

Total assets

   $ 1,864,462      $ 1,656,264   
                  

Liabilities and Shareholders’ Equity:

          

Interest-bearing liabilities:

          

Deposits:

          

Money market and NOW accounts

   $ 204,663    3.65  %   $ 211,339    2.86 %

Savings

     71,063    3.51       81,317    3.77  

Time certificates of deposit over $100,000

     693,410    5.21       707,290    4.80  

Other time certificates of deposit

     93,953    4.60       101,122    4.02  
                          
     1,063,089    4.74       1,101,068    4.28  

Other borrowed funds

     221,391    5.34       11,964    4.74  

Long-term subordinated debentures

     18,557    8.07       18,557    7.53  
                          

Total interest-bearing liabilities

     1,303,037    4.89       1,131,589    4.33  
                          

Noninterest-bearing liabilities:

          

Demand deposits

     391,881        383,290   
                  

Total funding liabilities

     1,694,918    3.76  %     1,514,879    3.24  %
                  

Other liabilities

     21,894        22,135   
                  

Total noninterest-bearing liabilities

     413,775        405,425   

Shareholders’ equity

     147,650        119,250   
                  

Total liabilities and shareholders’ equity

   $ 1,864,462      $ 1,656,264   
                  

Net interest income

          

Cost of deposits

      3.47  %      3.17  %
                  

Net interest spread

      3.17  %      3.38  %
                  

Net interest margin

      4.39  %      4.49  %
                  


CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

 

     As of the Dates Indicated  
     6/30/07     3/31/07     12/31/06     9/30/06     6/30/06  
     (Dollars in thousands)  

Real estate:

          

Construction

   $ 58,865     $ 53,468     $ 43,508     $ 30,934     $ 18,260  

Commercial

     1,080,128       1,060,110       1,042,562       985,334       858,331  

Commercial

     288,736       285,132       277,296       260,437       244,557  

Trade finance

     67,000       68,703       66,925       72,349       75,351  

SBA

     58,464       56,083       50,606       54,347       53,621  

Consumer and other

     82,084       77,893       77,682       77,031       75,011  
                                        

Total gross loans

     1,635,277       1,601,389       1,558,579       1,480,432       1,325,131  
                                        

Less:

          

Allowance for Losses

     18,289       17,855       17,412       16,530       14,964  

Deferred loan fees

     1,954       2,225       2,347       1,970       1,828  

Discount on SBA loans retained

     874       1,535       1,644       1,373       1,088  
                                        

Total net loans and loans held for sale

   $ 1,614,160     $ 1,579,774     $ 1,537,176     $ 1,460,559     $ 1,307,251  
                                        

As a percentage of total gross loans:

          

Real estate:

          

Construction

     3.6 %     3.3 %     2.8 %     2.1 %     1.4 %

Commercial

     66.1       66.2       66.9       66.6       64.8  

Commercial

     17.6       17.8       17.8       17.6       18.5  

Trade finance

     4.1       4.3       4.3       4.9       5.6  

SBA

     3.6       3.5       3.2       3.6       4.0  

Consumer

     5.0       4.9       5.0       5.2       5.7  
                                        

Total gross loans

     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
                                        


     As of the Dates Indicated  
     06/30/07     03/31/07     12/31/06     09/30/06     06/30/06  
     (Dollars in thousands)  

Demand deposits (noninterest-bearing)

   $ 393,108     $ 389,358     $ 388,163     $ 394,144     $ 409,380  

Money market accounts and NOW

     275,403       181,305       190,453       182,231       215,931  

Savings

     65,838       71,973       76,846       78,974       82,178  
                                        
     734,349       642,636       655,462       655,349       707,489  

Time deposits

          

Less than $100,000

     102,582       91,600       91,830       95,551       98,711  

$100,000 or more

     748,421       707,915       682,107       664,598       637,958  
                                        

Total deposits

   $ 1,585,352     $ 1,442,151     $ 1,429,399     $ 1,415,498     $ 1,444,158  
                                        

As a percentage of total deposits:

          

Demand deposits (noninterest-bearing)

     24.8 %     27.0 %     27.2 %     27.8 %     28.3 %

Money market accounts and NOW

     17.4       12.6       13.3       12.9       15.0  

Savings

     4.1       5.0       5.4       5.6       5.7  
                                        
     46.3       44.6       45.9       46.3       49.0  

Time deposits

          

Less than $100,000

     6.5       6.3       6.4       6.7       6.8  

$100,000 or more

     47.2       49.1       47.7       47.0       44.2  
                                        

Total deposits

     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
                                        


CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

 

     June 30,
2007
    December 31,
2006
    June 30,
2006
 
     (Dollars in thousands)  

Nonaccrual loans:

      

Commercial Real Estate

   $ —       $ —       $ 355  

Commercial

     1,401       1,502       2,249  

Consumer

     365       429       191  

Trade Finance

     120       —         —    

SBA

     4,087       1,330       687  
                        

Total nonperforming loans and assets

     5,973       3,261       3,482  
                        

Guaranteed portion of nonperforming SBA loans

     2,657       973       255  
                        

Total nonperforming assets, net of SBA guarantee

   $ 3,316     $ 2,288     $ 3,227  
                        
     Six Months
Ended
June 30,
2007
    Year Ended
December 31,
2006
    Six Months
Ended
June 30,
2006
 
     (Dollars in thousands)  

Balances

    

Average total loans outstanding during the period

   $ 1,587,641     $ 1,356,169     $ 1,250,187  
                        

Total loans outstanding at end of period

   $ 1,632,449     $ 1,554,588     $ 1,322,215  
                        

Allowance for Loan Losses:

      

Balance at beginning of period

   $ 17,412     $ 13,871     $ 13,871  
                        

Charge-offs:

      

Commercial Real Estate

     —         258       258  

Commercial

     1,363       1,635       783  

Consumer

     92       333       126  

SBA

     84       473       35  
                        

Total charge-offs

     1,539       2,699       1,202  
                        

Recoveries

      

Real estate

     —         423       423  

Commercial

     14       44       34  

Consumer

     25       101       60  

SBA

     7       6       3  
                        

Total recoveries

     46       574       520  
                        

Net loan charge-offs

     1,493       2,125       682  

Provision for loan losses

     2,370       5,666       1,775  
                        

Balance at end of period

   $ 18,289     $ 17,412     $ 14,964  
                        

Ratios:

      

Nonperforming loans as a percent of total gross loans

     0.37 %     0.21 %     0.26 %

Nonperforming assets as a percent of total loans and other real estate owned

     0.37       0.21       0.26  

Net loan charge-offs to average loans

     0.09       0.16       0.05  

Provision for loan losses to average total loans

     0.15       0.42       0.14  

Allowance for loan losses to gross loans at end of period

     1.12       1.12       1.13  

Allowance for loan losses to total nonperforming loans

     306       534       430  

Net loan charge-offs to allowance for loan losses at end of period

     8.16       12.20       4.56  

Net loan charge-offs to provision for loan losses

     63.00       37.50       38.42