Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

LOGO

News Release


Contacts:	Lonny Robinson	Angie Yang
	Chief Financial Officer	Investor Relations
	213.401.2311	PondelWilkinson Inc.
	lonnyr@centerbank.com	310.279.5967
		ayang@pondel.com

CENTER FINANCIAL REPORTS FINANCIAL RESULTS FOR 2008 THIRD QUARTER

— Results Impacted by Previously Disclosed Litigation Settlement Expense

and OTTI Impairment Expense, Totaling $15 Million —

— Strategic Management of Balance Sheet and Cost Control Efforts Contribute to another Quarter

of Enhanced Core Operating Performance, Excluding Two Expenses —

LOS ANGELES – October 23, 2008 – Center Financial Corporation (NASDAQ: CLFC), the holding company of Center Bank, today reported financial results for its three- and nine-month periods ended September 30, 2008, delivering another quarter of sequential improvements in its core operating performance, excluding two, previously announced two expenses totaling $15.0 million.

2008 Third Quarter Summary:

•

A $7.7 million settlement expense, $4.5 million net of tax, or $0.27 per share, which removed all potential liabilities under the consolidated Korea Export Insurance Corporation (KEIC) litigation

•

An Other Than Temporary Impairment (OTTI) expense of $7.3 million, equal to $4.2 million net of tax, or $0.26 per share, recognizing the recent decline in the fair market valuation of its bank collateralized pooled trust preferred CDO

•

Net interest income before provision for loan losses increased to $19.8 million from $19.0 million for Q2 2008

•

Net interest margin expanded by 21 basis points to 4.02% from 3.81% for Q2 2008

•

Core noninterest expense, excluding KEIC and OTTI expenses, declined 2% from Q2 2008

•

OTTI and KEIC expenses offset earnings by $8.7 million, net of tax, or $0.53 per share

•

Net loss of $3.2 million, or $0.19 per share, versus net income of $5.3 million, or $0.32 per diluted share for Q2 2008

•

Loss on average assets of 0.61% and non-GAAP return on average assets of 1.06%, versus 1.00% for Q2 2008

•

Loss on average equity of 7.59% and non-GAAP return on average equity of 13.28%, compared with 12.97% for Q2 2008

•

Nonperforming assets as a percent of total loans and OREO stable at 0.48%

•

Allowance for loan losses to gross loans increased to 1.22% from 1.18% at June 30, 2008

•

Net loans strategically reduced to $1.73 billion from $1.79 billion at June 30, 2008

•

Non-interest bearing deposits total $367.2 million, equal to 23% of total deposits as of September 30, 2008

•

Total deposits of $1.62 billion down by 2% linked quarter, reflecting strategic runoff of jumbo time deposits

•

Total risk-based capital ratio increased organically to 11.03%, versus 10.63% as of June 30, 2008

•

Quarterly cash dividend of $0.05 per share

“The third quarter of 2008 was a momentous period for Center Financial with the signing of settlement agreements that completely resolved all potential liabilities for the company under the consolidated KEIC action,” said Jae Whan (J.W.) Yoo, president and chief executive officer. “Notwithstanding management’s time and expenses associated with the KEIC settlement and the OTTI expense, as well as the challenges of operating in an extraordinarily difficult business environment that has been severely crippled by the unprecedented events in the financial markets, the company’s third quarter financial results demonstrate another quarter of sequential improvements in core operational performance, excluding the KEIC and OTTI expenses.

(more)

Center Financial Corporation

2-2-2

“As in the preceding second quarter, the company’s net interest margin expanded, but to a greater degree having increased 21 basis points sequentially. If not for the KEIC and OTTI expenses, noninterest expenses would have declined, and we would have reported improvements in our efficiency ratio, return on average assets and return on average equity, all on a linked quarter basis. Center Financial also continued to manage well through the credit down cycle and maintained a consistently healthy asset quality level that is superior to industry averages, as well as in our core ethnic space. Particularly in these turbulent times, we are gratified that our strategic initiatives have contributed to strong, organic expansion of our capital positioning. Given the achievements of this third quarter, we believe Center Financial is well poised to capitalize on the many potential opportunities that we believe will become available to us as the financial markets eventually recover,” Yoo said.

2008 THIRD QUARTER

For the three months ended September 30, 2008, net interest income before provision for loan losses increased to $19.8 million from $19.0 million in the preceding 2008 second quarter and $19.3 million in the year-ago third quarter. The company’s yield on interest-earning assets averaged 6.69% for the 2008 third quarter, just five basis points lower than the 2008 second quarter. Compared with the 2007 third quarter, the yield on interest-earning assets declined 132 basis points, primarily reflecting reductions in the Fed Funds rate totaling 325 basis points between September 2007 through April 2008.

Benefiting from the company’s funding strategies and deposit cost management, the net interest margin for the 2008 third quarter expanded 21 basis points to 4.02% from 3.81% in the immediately preceding second quarter, but was down 20 basis points from 4.22% in the third quarter of 2007.

Center Financial provided $2.1 million to its allowance for loan losses in the 2008 third quarter, compared with $2.0 million provision in the immediately preceding second quarter and in the year-ago third quarter.

Noninterest income totaled $3.4 million in the 2008 third, compared with $3.9 million in the preceding second quarter and $3.4 million in the 2007 third quarter. The sequential decline in noninterest income is wholly attributed to a lower gain on sale of loans of $59,000 in the 2008 third quarter, versus $630,000 in the preceding second quarter. The company did not record any gain on sale of loans in the prior-year third quarter.

Noninterest expense for the 2008 third quarter totaled $27.0 million and included two large expenses totaling $15.0 million. As previously announced, the company recognized in the 2008 third quarter a $7.3 million non-cash, Other Than Temporary Impairment (OTTI) expense in accordance with U.S. GAAP, due to a recent decline in the fair market valuation of its bank collateralized pooled trust preferred CDO. As well, Center Financial’s 2008 third quarter results include a $7.7 million expense, related to the resolution of the long-standing Korea Export Insurance Corporation (KEIC) litigation during the quarter. Excluding these two expenses, the company’s core noninterest expense for the 2008 third quarter was less than $12.0 million, down from $12.3 million in the preceding second quarter. In the year-ago third quarter, the company posted noninterest expense of $11.4 million.

(more)

Center Financial Corporation

3-3-3

As a percentage of average earning assets, noninterest expense, including the KEIC and OTTI expenses, was 5.5% for the 2008 third quarter. This compares with 2.5% for the 2008 second quarter and the year-ago third quarter. The company’s efficiency ratio more than doubled to 116.51% for the 2008 third quarter as a result of the two expenses. Excluding the impact of the KEIC and OTTI expenses, the non-GAAP efficiency ratio for the 2008 third quarter was 51.80%. This compares with an efficiency ratio of 53.49% in the immediately preceding second quarter and 50.39% in the third quarter of 2007.

The company incurred a net loss for the 2008 third quarter of $3.2 million, or $0.19 per share, including an income tax benefit of $2.8 million. The permanent tax differences relating primarily to the California Enterprise Zone Tax credit were not affected by the OTTI write-down and the KEIC settlement which resulted in the pretax loss and the effective tax benefit rate was higher than the company’s normal effective tax rate as compared with the quarter ended September 30, 2007 and June 30, 2008. While Center Financial posted another quarter of sequential improvements in core operating trends for the 2008 third quarter, the OTTI and KEIC expenses offset the company’s earnings by a total of $8.7 million, net of tax, or $0.53 per share. Excluding these expenses, non-GAAP net income for the 2008 third quarter amounted to $5.5 million, or $0.34 per diluted share. This compares with net income of $5.3 million, or $0.32 per diluted share, in the preceding second quarter and net income of $5.7 million, or $0.34 per diluted share, in the 2007 third quarter.

Reflecting the adverse impact of the OTTI and KEIC expenses, the company recorded a loss on average assets and loss on average equity for the current third quarter of 0.61% and 7.59%, respectively. Excluding the KEIC and OTTI impact, the company achieved improved return on average assets (ROAA) of 1.06% and return on average equity (ROAE) of 13.28%, compared with ROAA of 1.00% and ROAE of 12.97% for the three months ended June 30, 2008. For the 2007 third quarter, ROAA equaled 1.16% and ROAE was 14.47%.

FINANCIAL CONDITION

Gross loans at September 30, 2008 narrowed to $1.76 billion from $1.82 billion at June 30, 2008, reflecting the company’s strategic initiative to de-leverage its balance sheet in the current economic environment. During the quarter, the company executed the sale of $14.5 million of certain loans to the wholesale market, as part of an ongoing effort to manage its commercial real estate and fixed-rate loan concentrations. As of September 30, 2008, commercial real estate loans accounted for approximately 66%, real estate construction loans represented 4%, commercial and industrial loans, including commercial, trade finance and SBA loans, totaled 25% and consumer loans equaled 5% of the company’s gross loan portfolio at the close of the 2008 third quarter. Net loans as a percentage of total assets equaled 85.19% at September 30, 2008, compared with 84.37% at June 30, 2008, and 85.99% at December 31, 2007.

Center Financial posted another quarter of healthy asset quality metrics notwithstanding the extremely challenging credit environment. Nonperforming assets at September 30, 2008 declined sequentially to $8.4 million, or $5.9 million net of the SBA guarantee, from $8.7 million, or $5.9 million net of the SBA guarantee, at June 30, 2008. At December 31, 2007, nonperforming assets totaled $6.6 million, or $3.9 million net of the SBA guarantee. As a percentage of total gross loans and other real estate owned, nonperforming loans at September 30, 2008 were stable at 0.48%, compared with June 30, 2008, but higher when compared with 0.37% at December 31, 2007.

Year-to-date net charge-offs amounted to $5.3 million, versus net charge-offs of $2.2 million in the first nine months of 2007 and $3.4 million for the full 2007 year. The allowance for loan losses as of September 30, 2008 totaled $21.5 million and represented 1.22% of gross loans at the end of the period. This compares with an allowance for losses of $20.5 million, or 1.13% of gross loans, at December 31, 2007.

(more)

Center Financial Corporation

4-4-4

Total deposits at September 30, 2008 equaled $1.62 billion, down 2% from $1.66 billion at the end of the 2008 second quarter, reflecting the strategic runoff of $91.5 million in the company’s higher-cost jumbo time deposits, offset by a $52.1 million increase in lower-cost core deposits. Non-interest bearing deposits at the end of the 2008 third quarter were relatively stable at $367.2 million, compared with $378.8 million at June 30, 2008 and $363.5 million at December 31, 2007, all equaling 23% of total deposits. The company’s money market deposits increased again sequentially, up by $49.6 million and totaling $425.2 million at September 30, 2008, or 26% of the company’s total deposits. Time deposits at September 30, 2008 accounted for 48% of total deposits, down from 51% as of June 30, 2008 and 58% as of year-end 2007. Center Bank’s loan-to-deposit ratio as of September 30, 2008 equaled 107.1%, compared with 108.1% at June 30, 2008 and 113.4% at December 31, 2007.

The company’s average cost of interest-bearing deposits continued to benefit from the lagging effect of the Federal Reserve’s reductions in the Fed Funds rate since September 2007 and management’s strategic efforts to minimize deposit costs. The average cost of interest-bearing deposits for the three months ended September 30, 2008 was 3.35%, reflecting a 37 basis point reduction from 3.72% for 2008 second quarter and 156 basis points lower than 4.91% for the year-ago third quarter.

Total assets at September 30, 2008 equaled $2.04 billion, down from $2.13 billion at June 30, 2008, and $2.08 billion at year-end 2007, generally reflecting the company’s successful efforts to de-leverage its balance sheet in the current credit and interest rate environment. Average interest-earning assets for the third quarter of 2008 amounted to $1.96 billion, compared with $2.0 billion for the preceding 2008 second quarter and $1.92 billion for the 2007 fourth quarter.

Shareholders’ equity at September 30, 2008 rose 5% to $164.9 million from $157.5 million at December 31, 2007. Tangible book value at the close of the 2008 third quarter increased to $9.74 per share from $9.53 per share at year-end 2007. At September 30, 2008, Center Financial remained comfortably “well-capitalized” under all regulatory categories, with a Tier 1 risk-based capital ratio of 9.84%, a total risk-based capital ratio of 11.03%, and a Tier 1 leverage ratio of 8.71%.

Use of Non-GAAP Financial Measures

This news release includes “non-GAAP financial measures” within the meaning of the Securities and Exchange Commission rules. Center Financial believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and management’s judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items in the company’s 2008 third-quarter financial results. For this reason, the company has disclosed certain core operating results for the 2008 third quarter, including noninterest expense, net income, earnings per share, efficiency ratio, return on average assets and return on average equity, adjusted to exclude the impact of the KEIC settlement expense and OTTI impairment expense. The company has provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company’s performance. This information is not intended to be considered in isolation or as a substitute for the relevant measures calculated in accordance with U.S. GAAP. The reconciliations of these non-GAAP financial measures to GAAP financial measures included in this news release are attached herein.

(more)

Center Financial Corporation

5-5-5

Investor Conference Call

The company will host an investor conference call at 8:30 a.m. PST (11:30 a.m. EST) on Thursday, October 23, 2008 to review the financial results for its 2008 third quarter ended September 30, 2008. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet at www.centerbank.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 audio broadcast will be archived for one year. A telephone replay of the call will be available through 11:59 p.m. PDT, Thursday, October 30, 2008 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 36811647.

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 soundest financial institutions focusing on the Korean-American community, with total assets of $2.04 billion at September 30, 2008. Headquartered in Los Angeles, Center Bank operates 25 branch and loan production offices. Of the company’s 19 full-service branches, 16 are located throughout Southern California, along with one branch in Chicago and two in Seattle. Center Bank’s six loan production offices are strategically located in Seattle, Denver, Washington D.C., 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, integration risks associated with the First Intercontinental Bank acquisitions, satisfaction of various closing conditions and receipt of all regulatory approvals. 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, 2007 (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)

(Dollars in thousands)


	9/30/2008		12/31/2007
ASSETS
Cash and due from banks	$	41,972	$	58,339
Federal funds sold		7,760		7,125
Money market funds and interest-bearing deposits in other banks		3,152		2,825

Cash and cash equivalents		52,884		68,289

Securities available for sale, at fair value		154,661		128,778
Securities held to maturity, at amortized cost (fair value of $9,285 as of September 30, 2008 and $10,961 as of December 31, 2007)		9,265		10,932
Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost		14,360		15,219
Loans, net of allowance for loan losses of $21,485 as of September 30, 2008 and $20,477 as of December 31, 2007		1,724,390		1,748,143
Loans held for sale, at the lower of cost or fair value		9,381		41,492
Premises and equipment, net		14,683		13,585
Customers’ liability on acceptances		3,972		3,292
Other real estate owned, net		–		380
Accrued interest receivable		7,661		8,886
Deferred income taxes, net		13,427		13,142
Investments in affordable housing partnerships		11,603		11,911
Cash surrender value of life insurance		11,893		11,583
Goodwill		1,253		1,253
Intangible assets, net		227		267
Other assets		5,507		3,511

Total Assets	$	2,035,167	$	2,080,663

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	367,171	$	363,465
Interest-bearing		1,252,105		1,214,209

Total deposits		1,619,276		1,577,674

Acceptances outstanding		3,972		3,292
Accrued interest payable		7,955		13,213
Other borrowed funds		207,153		299,606
Long-term subordinated debentures		18,557		18,557
Accrued expenses and other liabilities		13,323		10,868

Total liabilities		1,870,236		1,923,210

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, 16,787,530 shares as of September 30, 2008 and 16,366,791 shares as of December 31, 2007 (including 9,900 and 8,850 shares of unvested restricted stock)		71,926		67,006
Retained earnings		92,961		90,541
Accumulated other comprehensive income (loss), net of tax		44		(94	)

Total shareholders’ equity		164,931		157,453

Total Liabilities and Shareholders’ Equity	$	2,035,167	$	2,080,663

Tangible book value per share	$	9.74	$	9.53

CENTER FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended								Nine Months Ended
	9/30/08			6/30/08			9/30/07		9/30/08		9/30/07
Interest and Dividend Income:
Interest and fees on loans	$	30,574		$	31,369		$	34,781	$	95,553	$	100,252
Interest on federal funds sold		24			25			67		90		180
Interest on taxable investment securities		2,004			1,868			1,595		5,613		4,771
Interest on tax-advantaged investment securities		51			48			125		151		387
Dividends on equity stock		228			220			151		653		506
Money market funds and interest-earning deposits		31			32			16		92		48

Total interest and dividend income		32,912			33,562			36,735		102,152		106,144

Interest Expense:
Interest on deposits		10,666			12,157			14,767		36,860		39,775
Interest on borrowed funds		2,225			2,188			2,258		7,130		8,120
Interest expense on trust preferred securities		259			258			378		843		1,120

Total interest expense		13,150			14,603			17,403		44,833		49,015

Net interest income before provision for loan losses		19,762			18,959			19,332		57,319		57,129
Provision for loan losses		2,121			2,047			2,000		6,330		4,370

Net interest income after provision for loan losses		17,641			16,912			17,332		50,989		52,759
Noninterest Income:
Customer service fees		1,918			1,913			1,676		5,644		5,215
Fee income from trade finance transactions		675			672			615		1,948		2,046
Wire transfer fees		269			293			206		822		643
Gain on sale of loans		59			630			–		1,019		618
Loan service fees		144			48			409		445		1,398
Other income		321			387			477		1,091		1,608

Total noninterest income		3,386			3,943			3,383		10,969		11,528

Noninterest Expense:
Salaries and employee benefits		6,137			5,924			6,342		19,182		19,220
Occupancy		1,115			1,119			1,079		3,275		3,022
Furniture, fixtures, and equipment		546			500			575		1,538		1,539
Data processing		527			577			530		1,626		1,567
Legal fees		529			971			173		2,130		1,020
Accounting and other professional service fees		323			381			186		1,041		1,429
Business promotion and advertising		469			494			480		1,424		1,549
Stationery and supplies		140			157			137		429		408
Telecommunications		188			179			160		537		442
Postage and courier service		192			191			185		584		565
Security service		283			294			268		851		779
Loss on available-for-sale securities		7,279			–			–		7,279		–
Regulatory assessment		312			352			337		953		477
KEIC litigation settlement		7,700						—		7,700		–
Other operating expenses		1,229			1,112			995		3,909		3,097

Total noninterest expense		26,969			12,251			11,447		52,458		35,114

(Loss) income before income tax (benefit) provision		(5,942	)		8,604			9,268		9,500		29,173

Income tax (benefit) provision		(2,783	)		3,325			3,570		3,161		11,136

Net (loss) income		(3,159	)		5,279			5,698		6,339		18,037
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale securities, net of income tax expense (benefit) of $1,075, $(1,410) $345, $100 and $365		1,484			(2,115	)		476		138		503

Comprehensive (loss) income	$	(1,675	)	$	3,164		$	6,174	$	6,477	$	18,540
(Loss) earnings per share:
Basic	$	(0.19	)	$	0.32		$	0.34	$	0.38	$	1.08

Diluted	$	(0.19	)	$	0.32		$	0.34	$	0.38	$	1.07

Weighted average shares outstanding - basic		16,577,318			16,367,475			16,720,539		16,437,778		16,689,622

Weighted average shares outstanding - diluted		16,577,318			16,399,197			16,785,290		16,474,486		16,785,126

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)


	Three Months Ended
	9/30/08				6/30/08				9/30/07
	Average Balance		Rate/ Yield		Average Balance		Rate/ Yield		Average Balance		Rate/ Yield
Assets:
Interest-earning assets:
Loans	$	1,766,415	6.89	%	$	1,816,960	6.94	%	$	1,662,816	8.30	%
Federal funds sold		4,387	2.18			4,745	2.12			4,582	5.80
Investments		185,109	4.97			179,755	4.85			152,387	4.91

Total interest-earning assets		1,955,911	6.69			2,001,460	6.74			1,819,785	8.01

Noninterest - earning assets:
Cash and due from banks		49,557				56,875				63,727
Bank premises and equipment, net		14,703				14,526				13,564
Customers’ acceptances outstanding		3,750				5,411				3,241
Accrued interest receivables		7,547				7,499				8,286
Other assets		42,872				37,762				32,399

Total noninterest-earning assets		118,429				122,073				121,217

Total assets	$	2,074,340			$	2,123,533			$	1,941,002

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts	$	393,830	2.88	%	$	358,778	2.89	%	$	263,320	4.30	%
Savings		54,424	3.52			54,429	3.35			60,946	3.17
Time certificates of deposit over $100,000		688,610	3.63			785,529	4.07			763,632	5.27
Other time certificates of deposit		128,155	3.26			116,365	4.06			104,879	4.83

		1,265,019	3.35			1,315,101	3.72			1,192,777	4.91
Other borrowed funds		244,059	3.63			244,631	3.60			180,667	4.96
Long-term subordinated debentures		18,557	5.55			18,557	5.59			18,557	8.08

Total interest-bearing liabilities		1,527,635	3.42			1,578,289	3.72			1,392,001	4.96

Noninterest-bearing liabilities:
Demand deposits		357,145				356,309				370,254

Total funding liabilities		1,884,780	2.78	%		1,934,598	3.04	%		1,762,255	3.92	%

Other liabilities		23,973				25,262				22,572

Total noninterest-bearing liabilities		381,118				381,571				392,826
Shareholders’ equity		165,587				163,673				156,175

Total liabilities and shareholders’ equity	$	2,074,340			$	2,123,533			$	1,941,002

Cost of deposits			2.62	%			2.93	%			3.75	%

Net interest spread			3.27	%			3.02	%			3.05	%

Net interest margin			4.02	%			3.81	%			4.22	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)


	Nine Months Ended
	9/30/08				9/30/07
	Average Balance		Rate/ Yield		Average Balance		Rate/ Yield
Assets:
Interest-earning assets:
Loans	$	1,799,893	7.09	%	$	1,601,321	8.37	%
Federal funds sold		4,627	2.60			4,214	5.71
Investments		175,976	4.94			158,883	4.81

Total interest-earning assets		1,980,496	6.89			1,764,418	8.04

Noninterest - earning assets:
Cash and due from banks		58,487				68,010
Bank premises and equipment, net		14,407				13,512
Customers’ acceptances outstanding		4,182				3,774
Accrued interest receivables		7,747				7,939
Other assets		39,775				32,625

Total noninterest-earning assets		124,598				125,860

Total assets	$	2,105,094			$	1,890,278

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts	$	350,219	3.10	%	$	224,431	3.91	%
Savings		54,228	3.40			67,653	3.41
Time certificates of deposit over $100,000		760,854	4.18			717,074	5.23
Other time certificates of deposit		120,361	3.97			97,635	4.68

		1,285,662	3.83			1,106,793	4.80
Other borrowed funds		255,235	3.73			208,329	5.21
Long-term subordinated debentures		18,557	6.07			18,557	8.07

Total interest-bearing liabilities		1,559,454	3.84			1,333,679	4.91

Noninterest-bearing liabilities:
Demand deposits		357,913				384,593

Total funding liabilities		1,917,367	3.12	%		1,718,272	3.81	%

Other liabilities		24,091				21,461

Total noninterest-bearing liabilities		382,004				406,054
Shareholders’ equity		163,636				150,545

Total liabilities and shareholders’ equity	$	2,105,094			$	1,890,278

Cost of deposits			3.00	%			3.57	%

Net interest spread			3.05	%			3.13	%

Net interest margin			3.87	%			4.33	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)


	As of the Dates Indicated
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Real Estate:
Construction	$	62,296		$	62,072		$	76,243		$	68,143		$	59,821
Commercial		1,157,286			1,191,097			1,222,385			1,197,104			1,142,899
Commercial		336,929			352,220			332,950			310,962			306,037
Trade Finance		70,395			81,399			83,418			66,964			75,526
SBA		38,069			39,310			61,583			70,517			65,561
Consumer and other		93,053			92,157			96,717			98,969			90,675

Total Gross Loans		1,758,028			1,818,255			1,873,296			1,812,659			1,740,519
Less:
Allowance for Loan Losses		21,485			21,499			21,685			20,477			19,619
Deferred Loan Fees		1,488			1,688			1,561			1,847			1,833
Discount on SBA Loans Retained		1,284			1,296			880			700			796

Total Net Loans and Loans Held for Sale	$	1,733,771		$	1,793,772		$	1,849,170		$	1,789,635		$	1,718,271

As a percentage of total gross loans:
Real estate:
Construction		3.5	%		3.4	%		4.1	%		3.8	%		3.4	%
Commercial		65.8			65.5			65.3			66.0			65.7
Commercial		19.2			19.4			17.8			17.2			17.6
Trade finance		4.0			4.5			4.5			3.7			4.3
SBA		2.2			2.1			3.3			3.9			3.8
Consumer and other		5.3			5.1			5.0			5.4			5.2

Total gross loans		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%


	As of the Dates Indicated
	9/30/08			6/30/08			3/31/08			12/31/07			9/30/07
Demand deposits (noninterest-bearing)	$	367,171		$	378,835		$	357,422		$	363,465		$	361,137
Money market accounts and NOW		425,156			375,606			337,678			244,233			237,457
Savings		54,520			55,281			55,265			54,838			58,764

		846,847			809,722			750,365			662,536			657,358
Time deposits
Less than $100,000		132,074			117,068			117,550			112,614			105,038
$100,000 or more		640,355			731,900			810,026			802,524			757,873

Total	$	1,619,276		$	1,658,690		$	1,677,941		$	1,577,674		$	1,520,269

As a percentage of total deposits:
Demand deposits (noninterest-bearing)		22.7	%		22.9	%		21.3	%		23.0	%		23.8	%
Money market accounts and NOW		26.3			22.6			20.1			15.5			15.6
Savings		3.4			3.3			3.3			3.5			3.9

		52.4			48.8			44.7			42.0			43.3
Time deposits
Less than $100,000		8.2			7.1			7.0			7.1			6.9
$100,000 or more		39.4			44.1			48.3			50.9			49.9

Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)


	September 30, 2008			December 31, 2007			September 30, 2007
Nonperforming loans:
Construction Real Estate	$	2,152		$	—		$	—
Commercial		1,557			1,775			1,428
Consumer		307			457			445
Trade Finance		2,301			—			199
SBA		2,061			4,033			4,535

Total nonperforming loans		8,378			6,265			6,607
Other real estate owned		—			380			—

Total nonperforming assets		8,378			6,645			6,607

Guaranteed portion of nonperforming loans with SBA guarantee		2,485			2,740			2,418

Total nonperforming assets, net of SBA guarantee	$	5,893		$	3,905		$	4,189


	Nine Months Ended September 30, 2008			Year Ended December 31, 2007			Nine Months Ended September 30, 2007
Balances
Average total loans outstanding during the period	$	1,759,602		$	1,656,842		$	1,619,267

Total loans outstanding at end of period ⁽¹⁾	$	1,755,137		$	1,810,112		$	1,737,890


Allowance for Loan Losses:
Balance at beginning of period	$	20,477		$	17,412		$	17,412

Charge-offs:
Construction Real Estate		201			—			—
Commercial Real Estate		319			—			—
Commercial		3,347			2,725			2,032
Consumer		617			218			127
Trade Finance		725			—			—
SBA		424			609			84

Total charge-offs		5,633			3,552			2,243

Recoveries
Real estate		—			—			—
Commercial		109			34			19
Consumer		78			72			54
Trade finance		10			—			—
SBA		114			17			7

Total recoveries		311			123			80

Net loan charge-offs		5,322			3,429			2,163
Provision for loan losses		6,330			6,494			4,370

Balance at end of period	$	21,485		$	20,477		$	19,619

Ratios:
Nonperforming loans as a percent of total gross loans		0.48	%		0.35	%		0.38	%
Nonperforming assets as a percent of total loans and other real estate owned		0.48			0.37			0.38
Net loan charge-offs to average loans		0.30			0.21			0.13
Provision for loan losses to average total loans		0.36			0.39			0.27
Allowance for loan losses to gross loans at end of period		1.22			1.13			1.13
Allowance for loan losses to total nonperforming loans		256			327			297
Net loan charge-offs to allowance for loan losses at end of period		24.77			16.75			11.03
Net loan charge-offs to provision for loan losses		84.08			52.80			49.50

⁽¹⁾	Net of deferred loan fees and discount on SBA loans sold

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)


	Three Months Ended										Nine Months Ended
	9/30/08		6/30/08		3/31/08		12/31/07		9/30/07		9/30/08		9/30/07
Performance ratios:
Return on average assets	(0.61	)%	1.00	%	0.79	%	0.81	%	1.16	%	0.40	%	1.28	%
Return on average equity	(7.59	)	12.97		10.47		10.03		14.47		5.17		16.02
Efficiency ratio	116.51		53.49		59.52		61.80		50.39		76.82		51.14

Net loans to total deposits at period end	107.07		108.10		110.2		113.44		113.02		107.07		113.02
Net loans to total assets at period end	85.19		84.37		85.81		85.99		85.60		85.19		85.60


	As of the Dates Indicated
	9/30/08		6/30/08		3/31/08		12/31/07		9/30/07
Capital ratios:
Leverage capital ratio
Consolidated Company	8.71	%	8.51	%	8.35	%	8.49	%	9.01	%
Center Bank	8.73		8.46		8.23		8.28		8.80
Tier 1 risk-based capital ratio
Consolidated Company	9.84		9.49		9.11		9.31		9.93
Center Bank	9.86		9.43		8.98		9.08		9.70
Total risk-based capital ratio
Consolidated Company	11.03		10.63		10.25		10.42		11.08
Center Bank	11.04		10.57		10.11		10.19		10.85

CENTER FINANCIAL CORPORATION

RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP

(Unaudited, in thousands)

The following table sets forth the reconciliation of non-U.S. GAAP financial information included in the company’s 2008 third quarter financial results news release, adjusted for the effects of the KEIC settlement expense and OTTI impairment expense:


	For the Three Months Ended September 30, 2008
	GAAP As Reported			Less KEIC Effect			Less OTTI Effect			Non-GAAP As Adjusted
Noninterest expense	$	26,969		$	(7,700	)	$	(7,279	)	$	11,990
Net (loss) income	$	(3,159	)	$	4,466		$	4,222		$	5,529
(Loss) earnings per share
Basic	$	(0.19	)	$	0.27		$	0.26		$	0.34
Diluted	$	(0.19	)	$	0.27		$	0.26		$	0.34
Weighted average shares outstanding – basic and diluted		16,577,318			207,685			—			16,369,633
Efficiency ratio		116.51	%		(33.26	)%		(31.45	)%		51.80	%
Return on average assets		(0.61	)%		0.86	%		0.81	%		1.06	%
Return on average equity		(7.59	)%		10.73	%		10.14	%		13.28	%