8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 29, 2009

Center Financial Corporation

(Exact name of Registrant as specified in its charter)

Commission file number: 000-50050

California	52-2380548
(State of Incorporation)	(IRS Employer Identification No)

3435 Wilshire Boulevard, Suite 700, Los Angeles, California 90010

(Address of principal executive offices)

(213) 251-2222

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the follow provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On January 29, 2009, Center Financial Corporation issued a press release concerning its results of operations and financial condition for its fourth quarter ended December 31, 2008. A copy of the press release is attached hereto as Exhibit 99.1. The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

99.1 Press release concerning results of operations and financial condition as of and for the three months and the year ended December 31, 2008

SIGNATURES

Pursuant to the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:

Date: January 29, 2009	/s/ Lonny D. Robinson
	Center Financial Corporation Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description	Page
99.1	Press release concerning results of operations and financial condition as of and for the three months and the year ended December 31, 2008	5

EX-99

EXHIBIT 99.1

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 2008 FOURTH QUARTER AND FULL YEAR

— Quarter’s Results Reflect Increased Loan Loss Provisioning and Additional OTTI Expenses —

— Company Posts Net Income of $7.0 Million for 2008 in Spite of $17.6 Million in Non-Core Expenses —

LOS ANGELES – January 29, 2009 – Center Financial Corporation (NASDAQ: CLFC), the holding company of Center Bank, today reported financial results for its fourth quarter and year ended December 31, 2008.

“2008 marked a year of significant achievements, as well as mounting challenges,” said Jae Whan (J.W.) Yoo, president and chief executive officer. “The strategic initiatives implemented earlier in the year, along with Center Financial’s participation in the U.S. Treasury’s Capital Purchase Program, fortified our foundation as we face what is now expected to be a more prolonged and deeper recessionary period. Notably, we completely resolved all potential liabilities under a major legal battle that weighed heavily on the organization for many years. Notwithstanding charges totaling $17.6 million during 2008 related to litigation settlement and other-than-temporary impairment expenses, Center Financial closed 2008 with net income of $7.0 million and well poised to report considerable reductions in our noninterest expense levels going forward.

“At the same time, we are of course disappointed to see signs of weakness in our asset quality late in the fourth quarter after having successfully maintained consistently healthy credit metrics throughout the subprime and financial crises to date, unlike many of our peers. We recognize, however, that the turbulent macroeconomic conditions will continue to adversely impact the overall credit markets for at least the near term and on a broader scale. Accordingly, we have initiated additional measures to even more closely, proactively and aggressively monitor our loan portfolio and believe that our stringent underwriting standards will sustain Center Bank’s positioning as one of the soundest financial institutions serving the Korean-American and ethnic communities,” Yoo said.

2008 Fourth Quarter and Full Year Summary:

• Additional Other Than Temporary Impairment (OTTI) expense of $2.6 million in Q4, equal to $1.5 million net of tax, or $0.09 per share, reflecting the continued decline in the fair market valuation of the company’s bank collateralized pooled trust preferred security (CDO)

• 2008 OTTI charges total $9.9 million, effectively writing down the CDO to approximately 10% of the original value

• Settlement expense of $7.7 million in 2008, equal to $4.4 million net of tax, or $0.27 per share, associated with the complete resolution of the consolidated Korea Export Insurance Corporation (KEIC) litigation

• Q4 other expenses includes $100,000 related to the settlement of the First Intercontinental Bank dispute

• Nonperforming assets increased to 1.19% of total loans and OREO at year-end 2008

• Net charge-offs of $3.2 million in Q4, totaling $8.5 million for 2008

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• Q4 2008 provision increased to $8.5 million, raising the allowance for loan losses to gross loans to 1.56% at December 31, 2008

• Net loans strategically reduced to $1.69 billion from $1.79 billion at December 31, 2007

• Non-interest bearing deposits total $310.2 million, equal to 19% of total deposits as of December 31, 2008

• Total deposits of $1.60 billion as of December 31, 2008

• Issued preferred stock and common stock warrants as a participant in the U.S. Treasury’s Capital Purchase Program, received $55 million of new capital

• Total risk-based capital ratio, including the TARP funds, increased to 14.13% at December 31, 2008

• Tangible common equity to total assets increased to 8.10%

• Net interest margin for Q4 compressed 25 basis points to 3.77% from Q3 2008

• Q4 2008 noninterest expense, excluding OTTI charges, declined 11% from Q3 2008 and down 19%, compared with Q4 2007

• Q4 2008 net income totaling $667,000, equal to $0.03 per diluted share; excluding OTTI charge, Q4 2008 net income totaled $2.2 million, equal to $0.12 per diluted share

• 2008 net income of $7.0 million, equal to $0.41 per diluted share; excluding KEIC settlement and OTTI charges, 2008 net income totaled $17.2 million, equal to $1.04 per diluted shares

• Q4 return on average assets of 0.13%, or 0.43% excluding OTTI charge

• Q4 return on average equity of 1.47%, or 4.82% excluding OTTI charge

• Maintained quarterly cash dividend at $0.05 per share

BALANCE SHEET & CAPITAL

Total assets at December 31, 2008 equaled $2.06 billion, compared with $2.08 billion at year-end 2007, generally reflecting the successful completion of the company’s strategic plan to de-leverage its balance sheet in light of the current credit and interest rate environment. Average interest-earning assets for 2008 totaled $1.96 billion, compared with $1.80 billion for 2007.

Total shareholders’ equity at December 31, 2008 rose 41% to $221.4 million from $157.5 million at December 31, 2007 due largely to the $55.0 million of new capital received from the U.S. Treasury through the Capital Purchase Program. The company’s tangible book value at December 31, 2008 increased to $9.94 per share from $9.53 per share at year-end 2007 and tangible common equity to total assets rose to 8.10% from 7.49% at December 31, 2007. Center Financial remains strongly capitalized, exceeding all regulatory guidelines. At the end of 2008, the company’s Tier 1 risk-based capital ratio was 12.88%, total risk-based capital ratio equaled 14.13%, and a Tier 1 leverage ratio was 11.62%.

LOAN PORTFOLIO & ASSET QUALITY

Gross loans totaled $1.72 billion at December 31, 2008, down from $1.76 billion at September 30, 2008 and $1.81 billion at year-end 2007. Earlier in 2008, Center Financial announced its intent to strategically sell certain loans to the wholesale market in an effort to manage its commercial real estate and fixed-rate loan concentrations. As of December 31, 2008, the company’s total loan portfolio was comprised of 66% in commercial real estate loans, 4% of real estate construction loans, 25% in commercial and industrial loans, including commercial, trade finance and SBA loans, and 5% of consumer loans. Net loans as a percentage of total assets declined to 81.99% at December 31, 2008, versus 85.19% at September 30, 2008, and 86.01% at December 31, 2007.

Principally reflecting an increasingly challenging credit environment in the 2008 fourth quarter, nonperforming assets at December 31, 2008 increased to $20.5 million, or $18.3 million net of the SBA guarantee, from $8.4 million, or $5.9 million net of the SBA guarantee, at September 30, 2008. The increase was primarily attributed to two commercial real estate loans, one of which was originally a real estate construction loan that the company did the permanent financing. At the end of 2007, nonperforming assets

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equaled $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 December 31, 2008 rose significantly to 1.19% from 0.48% at September 30, 2008 and 0.37% at December 31, 2007.

“While we are disappointed to see the deterioration in asset quality late in the year, based on a new appraisal received for one of the properties and a recent purchase offering price on the other, we believe we are well collateralized for each to avoid any significant losses,” Yoo said. “We anticipate the recession will take its toll on the credit environment and expect to see elevated levels of credit deterioration at least through the first half of 2009.”

During the 2008 fourth quarter, Center Financial charged off $3.2 million, increasing the year-to-date net charge-offs to $8.5 million. This compares with 2007 net charge-offs of $3.4 million. As a percentage of average loans, net charge-offs equaled 0.47% for 2008, versus 0.21% for 2007.

In light of the increased amount of nonperforming assets and the continuing challenges in the credit environment, Center Financial provided $8.5 million to its allowance for loan losses in the 2008 fourth quarter, exceeding the charge-offs in the quarter by $4.9 million. This compares with a $2.1 million provision in the immediately preceding third quarter and in the year-ago fourth quarter. The total allowance for loan losses as of December 31, 2008 equaled $26.8 million and represented 1.56% of gross loans. At December 31, 2007, allowance for loan losses totaled $20.5 million, or 1.13% of gross loans.

DEPOSITS

Total deposits of $1.60 billion at December 31, 2008 declined moderately from $1.62 at September 30, 2008. Total deposits at year-end 2007 equaled $1.58 billion. Non-interest bearing deposits at the end of 2008 equaled $310.2 million, or 19% of total deposits. This compares with $367.2 million at September 30, 2008, representing 23% of total deposits. At December 31, 2008, money market deposits totaled $447.3 million, or 28% of the company’s total deposits, versus $425.2 million, or 26% of total deposits, at the end of the preceding third quarter. Time deposits at December 31, 2008 accounted for 50% of total deposits and totaled $793.4 million, compared with 48%, or $772.4 million, at September 30, 2008. The company continued to improve its loan-to-deposit ratio, which equaled 105.4% at December 31, 2008, versus 107.1% at September 30, 2008 and 113.4% at December 31, 2007.

The company’s average cost of interest-bearing deposits improved as a result of reductions in the Fed Funds rate during 2008 and management’s continued efforts to minimize deposit costs. The average cost of interest-bearing deposits for the three months ended December 31, 2008 was 3.05%, reflecting a 30 basis point reduction from 3.35% for the 2008 third quarter and a decline of 173 basis points from 4.78% for the fourth quarter of 2007.

2008 FOURTH QUARTER OPERATIONAL HIGHLIGHTS

For the three months ended December 31, 2008, net interest income before provision for loan losses totaled $18.1 million, compared with $19.8 million in the immediately preceding 2008 third quarter and $19.1 million in the fourth quarter of 2007. The company’s yield on interest-earning assets averaged 6.22% for the 2008 fourth quarter, down 47 basis points from the immediately preceding 2008 third quarter, principally due to reductions in the Fed Funds rate during the 2008 fourth quarter totaling the 175 basis points. Compared with the year-ago fourth quarter, the company’s yield on interest-earning assets declined 144 basis points, primarily reflecting a total of 400 basis point reduction in the Fed Funds rate during 2008.

The company’s net interest margin for three months ended December 31, 2008 was pressured by the 175 basis point reduction in the Fed Funds rate during the fourth quarter and declined 25 basis points to 3.77% from 4.02% in the immediately preceding third quarter. In the 2007 fourth quarter, the company’s net interest margin equaled 3.95%.

Noninterest income totaled $3.6 million in the 2008 fourth quarter, up moderately from $3.4 million in the preceding third quarter and $3.3 million in the 2007 fourth quarter.

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Noninterest expense for the 2008 fourth quarter totaled $12.8 million, including a $2.6 million non-cash charge related to Other Than Temporary Impairment (OTTI) expense recognizing the additional decline in the fair market valuation of its bank collateralized pooled trust preferred security. Excluding the OTTI expense, the company’s core noninterest expense for the 2008 fourth quarter narrowed to $10.2 million from comparable core noninterest expense of $12.0 million in the preceding third quarter and $12.6 million in the 2007 fourth quarter.

Yoo attributed the reduction in noninterest expenses to two primary factors. First, the company’s right-sizing of the organization throughout the year in anticipation of a slow down in business activities resulted in a sizable reduction in salary and employee benefit expenses for the 2008 fourth quarter versus the year-ago period. The 2008 fourth quarter compensation expense also benefited from a reversal of previously accrued discretionary employee incentive bonus. Second, the company’s resolution of both the KEIC litigation and the First Intercontinental Bank dispute during 2008 eliminated the requisite professional legal fees to defend the company’s position.

For the 2008 fourth quarter, the efficiency ratio equaled 58.88%, or non-GAAP 46.84% excluding the impact of the OTTI expense. This compares with the non-GAAP efficiency ratio for the preceding 2008 third quarter of 51.80%.

Center Financial’s net income was $667,000, or $0.03 per diluted share, for the 2008 fourth quarter, including an income tax benefit of $245,000 and distributions of $155,000 to preferred shareholder. Non-GAAP net income, excluding the OTTI expense, equaled $2.2 million, or $0.12 per diluted share, for the 2008 fourth quarter, compared with $5.5 million, or $0.34 per diluted share, for the immediately preceding third quarter. In the 2007 fourth quarter, net income totaled $3.9 million, or $0.23 per diluted share.

Including the adverse impact of the OTTI expense, the company’s return on average assets (ROAA) and return on average equity (ROAE) for the fourth quarter of 2008 equaled 0.13% and 1.47%, respectively. Excluding the OTTI impact, non-GAAP ROAA and ROAE amounted to 0.43% and 4.82%, respectively, for the 2008 fourth quarter.

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 financial results. For this reason, the company has disclosed certain core operating results for the 2008 fourth quarter and full year, 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 and OTTI impairment expenses. 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.

Investor Conference Call

The company will host an investor conference call at 9:00 a.m. PST (12:00 noon EST) on Thursday, January 29, 2009 to review the financial results for its 2008 fourth quarter ended December 31, 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. PST, Thursday, February 5, 2009 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 31997901.

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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 $2.06 billion at December 31, 2008. Headquartered in Los Angeles, Center Bank operates a total of 19 full-service branches and one loan production office. The company has 16 full-service branches located throughout Southern California. Center Bank also operates two branches and one loan production office in the Seattle area, along with one branch in Chicago. 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.

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CENTER FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollars in thousands)

	12/31/2008			12/31/2007
ASSETS
Cash and due from banks	$	45,129		$	58,339
Federal funds sold		50,435			7,125
Money market funds and interest-bearing deposits in other banks		2,647			2,825
Cash and cash equivalents		98,211			68,289
Securities available for sale, at fair value		173,833			128,778
Securities held to maturity, at amortized cost (fair value of $8,879 as of December 31, 2008 and $10,961 as of December 31, 2007)		8,861			10,932
Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost		15,673			15,219
Loans, net of allowance for loan losses of $26,820 as of December 31, 2008 and $20,477 as of December 31, 2007		1,680,828			1,748,143
Loans held for sale, at the lower of cost or fair value		9,864			41,492
Premises and equipment, net		14,739			13,585
Customers’ liability on acceptances		4,503			3,292
Other real estate owned, net		—			380
Accrued interest receivable		7,477			8,886
Deferred income taxes, net		15,700			13,142
Investments in affordable housing partnerships		11,587			11,911
Cash surrender value of life insurance		11,992			11,583
Goodwill		1,253			1,253
Intangible assets, net		213			267
Other assets		7,314			3,511
Total Assets	$	2,062,048		$	2,080,663
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	310,154		$	363,465
Interest-bearing		1,293,365			1,214,209
Total deposits		1,603,519			1,577,674
Acceptances outstanding		4,503			3,292
Accrued interest payable		7,268			13,213
Other borrowed funds		193,021			299,606
Long-term subordinated debentures		18,557			18,557
Accrued expenses and other liabilities		13,823			10,868
Total liabilities		1,840,691			1,923,210
Commitments and contingencies		—			—
Shareholders’ equity
Preferred stock, par value of $1,000 per share; authorized 10,000,000 shares; issued and outstanding, 55,000 shares and none as of
December 31, 2008 and 2007, respectively		52,959			—
Common stock, no par value; authorized 40,000,000 shares; issued and outstanding, 16,789,080 shares and 16,366,791 shares (including 10,400 shares and 8,850 shares of unvested restricted stock) as of December 31, 2008 and December 31, 2007, respectively		74,254			67,006
Retained earnings		92,636			90,541
Accumulated other comprehensive income (loss), net of tax		1,508			(94	)
Total shareholders’ equity		221,357			157,453
Total Liabilities and Shareholders’ Equity	$	2,062,048		$	2,080,663
Tangible book value per common share	$	9.94		$	9.53
Tangible common equity to total assets 1		8.10	%		7.49	%

¹ Tangible common equity represents total shareholders’ equity less preferred stock, goodwill and intangible assets

CENTER FINANCIAL CORPORATION

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

(Dollars in thousands, except per share data)

	Three Months Ended								Twelve Months Ended
	12/31/08			9/30/08			12/31/07		2008		2007
Interest and Dividend Income:
Interest and fees on loans	$	27,714		$	30,574		$	35,038	$	123,267	$	135,290
Interest on federal funds sold		15			24			75		105		255
Interest on investment securities		2,169			2,314			1,987		8,678		7,696
Total interest and dividend income		29,898			32,912			37,100		132,050		143,241
Interest Expense:
Interest on deposits		9,266			10,666			14,421		46,126		54,195
Interest expense on long-term subordinated debentures		344			259			373		1,187		1,493
Interest on borrowed funds		2,165			2,225			3,178		9,294		11,298
Total interest expense		11,775			13,150			17,972		56,607		66,986
Net interest income before provision for loan losses		18,123			19,762			19,128		75,443		76,255
Provision for loan losses		8,495			2,121			2,125		14,825		6,494
Net interest income after provision for loan losses		9,628			17,641			17,003		60,618		69,761
Noninterest Income:
Customer service fees		2,014			1,918			1,725		7,658		6,940
Fee income from trade finance transactions		572			675			574		2,520		2,621
Wire transfer fees		332			269			256		1,153		899
Gain on sale of loans		(2	)		59			—		1,017		618
Loan service fees		69			144			322		514		1,720
Other income		579			321			457		1,671		2,065
Total noninterest income		3,564			3,386			3,334		14,533		14,863
Noninterest Expense:
Salaries and employee benefits		4,545			6,137			6,432		23,726		25,650
Occupancy		1,206			1,115			1,154		4,480		4,176
Furniture, fixtures, and equipment		565			546			533		2,103		2,072
Data processing		543			527			495		2,169		2,062
Legal fees		73			529			472		2,203		1,493
Accounting and other professional service fees		321			323			301		1,362		1,730
Business promotion and advertising		477			469			841		1,900		2,390
Stationery and supplies		131			140			144		560		553
Telecommunications		220			188			195		757		637
Postage and courier service		205			192			173		789		738
Security service		280			283			251		1,131		1,031
Impairment loss on securities available for sale		2,611			7,279			1,328		9,889		1,328
Regulatory assessment		312			312			288		1,265		765
Other operating expenses		1,281			8,929			1,314		12,891		4,410
Total noninterest expense		12,770			26,969			13,921		65,225		49,035
Income (loss) before income tax provision		422			(5,942	)		6,416		9,926		35,589
Income tax (benefit) provision		(245	)		(2,783	)		2,510		2,916		13,646
Net income (loss)		667			(3,159	)		3,906		7,010		21,943
Other comprehensive income - unrealized gain on available-for-sale securities, net of income tax expense		1,464			1,484			141		1,602		644
Comprehensive income (loss)	$	2,131		$	(1,675	)	$	4,047	$	8,612	$	22,587
Earnings (loss) per share:
Basic	$	0.03		$	(0.19	)	$	0.23	$	0.41	$	1.32
Diluted	$	0.03		$	(0.19	)	$	0.23	$	0.41	$	1.31
Weighted average shares outstanding - basic		16,788,000			16,577,000			16,680,000		16,526,000		16,649,000
Weighted average shares outstanding - diluted		16,815,000			16,577,000			16,725,000		16,560,000		16,732,000

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

	Three Months Ended
	12/31/08				9/30/08				12/31/07
	Average Balance		Rate/ Yield		Average Balance		Rate/ Yield		Average Balance		Rate/ Yield
Assets:
Interest-earning assets:
Loans	$	1,712,834	6.44	%	$	1,766,415	6.89	%	$	1,756,464	7.91	%
Federal funds sold		10,664	0.56			4,387	2.18			5,781	5.15
Investments		188,268	4.58			185,109	4.97			157,999	4.98
Total interest-earning assets		1,911,766	6.22			1,955,911	6.69			1,920,244	7.66
Noninterest - earning assets:
Cash and due from banks		45,105				49,557				68,245
Bank premises and equipment, net		14,814				14,703				13,598
Customers’ acceptances outstanding		4,081				3,750				3,004
Accrued interest receivables		7,365				7,547				8,003
Other assets		43,344				42,872				35,674
Total noninterest-earning assets		114,709				118,429				128,524
Total assets	$	2,026,475			$	2,074,340			$	2,048,768
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts	$	402,482	2.52	%	$	393,830	2.88	%	$	262,331	4.00	%
Savings		51,731	3.48			54,424	3.52			56,755	3.17
Time certificates of deposit over $100,000		615,768	3.25			688,610	3.63			772,459	5.16
Other time certificates of deposit		137,787	3.58			128,155	3.26			105,525	4.79
		1,207,768	3.05			1,265,019	3.35			1,197,070	4.78
Other borrowed funds		266,839	3.23			244,059	3.63			273,914	4.60
Long-term subordinated debentures		18,557	7.37			18,557	5.55			18,557	7.97
Total interest-bearing liabilities		1,493,164	3.14			1,527,635	3.42			1,489,541	4.79
Noninterest-bearing liabilities:
Demand deposits		329,467				357,145				374,589
Total funding liabilities		1,822,631	2.57	%		1,884,780	2.78	%		1,864,130	3.82	%
Other liabilities		23,810				23,973				24,085
Total noninterest-bearing liabilities		353,277				381,118				398,674
Shareholders’ equity		180,034				165,587				160,553
Total liabilities and shareholders’ equity	$	2,026,475			$	2,074,340			$	2,048,768
Cost of deposits			2.40	%			2.62	%			3.64	%
Net interest spread			3.08	%			3.27	%			2.88	%
Net interest margin			3.77	%			4.02	%			3.95	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

	Twelve Months Ended December 31,
	2008				2007
	Average Balance		Rate/ Yield		Average Balance		Rate/ Yield
Assets:
Interest-earning assets:
Loans	$	1,779,420	6.93	%	$	1,640,425	8.25	%
Federal funds sold		6,144	1.71			4,609	5.53
Investments		179,066	4.85			159,364	4.83
Total interest-earning assets		1,964,630	6.72			1,804,398	7.94
Noninterest - earning assets:
Cash and due from banks		52,851				67,373
Bank premises and equipment, net		14,509				13,534
Customers’ acceptances outstanding		4,156				3,580
Accrued interest receivables		7,651				7,955
Other assets		40,675				33,394
Total noninterest-earning assets		119,842				125,836
Total assets	$	2,084,472			$	1,930,234
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts	$	363,356	2.94	%	$	233,984	3.93	%
Savings		53,601	3.42			64,906	3.35
Time certificates of deposit over $100,000		724,384	3.98			731,034	5.22
Other time certificates of deposit		124,741	3.86			99,624	4.71
		1,266,082	3.64			1,129,548	4.80
Other borrowed funds		258,151	3.60			224,860	5.02
Long-term subordinated debentures		18,557	6.40			18,557	8.05
Total interest-bearing liabilities		1,542,790	3.67			1,372,965	4.88
Noninterest-bearing liabilities:
Demand deposits		349,902				382,071
Total funding liabilities		1,892,692	2.99	%		1,718,272	3.82	%
Other liabilities		24,020				22,080
Total noninterest-bearing liabilities		373,922				404,151
Shareholders’ equity		167,760				153,118
Total liabilities and shareholders’ equity	$	2,084,472			$	1,930,234
Cost of deposits			2.85	%			3.59	%
Net interest spread			3.05	%			3.06	%
Net interest margin			3.84	%			4.23	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

	As of the Dates Indicated
	12/31/08			9/30/08			6/30/08			3/31/08			12/31/07
Real Estate:
Construction	$	61,983		$	62,296		$	62,072		$	76,243		$	68,143
Commercial		1,134,793			1,157,286			1,191,097			1,222,385			1,197,104
Commercial		334,350			336,929			352,220			332,950			310,962
Trade Finance		63,479			70,395			81,399			83,418			66,964
SBA		37,027			38,069			39,310			61,583			70,517
Consumer and other		88,423			93,053			92,157			96,717			98,969
Total Gross Loans		1,720,055			1,758,028			1,818,255			1,873,296			1,812,659
Less:
Allowance for Loan Losses		26,820			21,485			21,499			21,685			20,477
Deferred Loan Fees		1,359			1,488			1,688			1,561			1,847
Discount on SBA Loans Retained		1,184			1,284			1,296			880			700
Total Net Loans and Loans Held for Sale	$	1,690,692		$	1,733,771		$	1,793,772		$	1,849,170		$	1,789,635
As a percentage of total gross loans:
Real estate:
Construction		3.6	%		3.5	%		3.4	%		4.1	%		3.8	%
Commercial		66.0			65.8			65.5			65.3			66.0
Commercial		19.4			19.2			19.4			17.8			17.2
Trade finance		3.7			4.0			4.5			4.5			3.7
SBA		2.2			2.2			2.2			3.3			3.9
Consumer and other		5.1			5.3			5.0			5.0			5.4
Total gross loans		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
	As of the Dates Indicated
	12/31/08			9/30/08			6/30/08			3/31/08			12/31/07
Demand deposits (noninterest-bearing)	$	310,154		$	367,171		$	378,835		$	357,422		$	363,465
Money market accounts and NOW		447,275			425,156			375,606			337,678			244,233
Savings		52,692			54,520			55,281			55,265			54,838
		810,121			846,847			809,722			750,365			662,536
Time deposits
Less than $100,000		143,221			132,074			117,068			117,550			112,614
$100,000 or more		650,177			640,355			731,900			810,026			802,524
Total	$	1,603,519		$	1,619,276		$	1,658,690		$	1,677,941		$	1,577,674
As a percentage of total deposits:
Demand deposits (noninterest-bearing)		19.3	%		22.7	%		22.8	%		21.3	%		23.0	%
Money market accounts and NOW		27.9			26.3			22.6			20.1			15.5
Savings		3.3			3.4			3.3			3.3			3.5
		50.5			52.4			48.7			44.7			42.0
Time deposits
Less than $100,000		8.9			8.2			7.1			7.0			7.1
$100,000 or more		40.6			39.4			44.2			48.3			50.9
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

(Dollars in thousands)

	December 31, 2008			September 30, 2008			December 31, 2007
Nonperforming loans:
Construction Real Estate	$	1,951		$	2,152		$	—
Commercial Real Estate		13,128			—			—
Commercial		2,272			1,557			1,775
Consumer		369			307			457
Trade Finance		1,196			2,301			—
SBA		1,538			2,061			4,033
Total nonperforming loans		20,454			8,378			6,265
Other real estate owned		—			—			380
Total nonperforming assets		20,454			8,378			6,645
Guaranteed portion of nonperforming loans with SBA guarantee		2,110			2,485			2,740
Total nonperforming assets, net of SBA guarantee	$	18,344		$	5,893		$	3,905
Nonperforming loans as a percent of total gross loans		1.19	%		0.48	%		0.35	%
Nonperforming assets as a percent of total loans and other real estate owned		1.19	%		0.48	%		0.37	%
	Year Ended December 31, 2008			Nine Months Ended September 30, 2008			Year Ended December 31, 2007
Balances
Average total loans outstanding during the period	$	1,800,972		$	1,821,449		$	1,656,842
Total loans outstanding at end of period (1)	$	1,717,511		$	1,755,137		$	1,810,112
Allowance for Loan Losses:
Balance at beginning of period	$	20,477		$	20,477		$	17,412
Charge-offs:
Construction Real Estate		402			201			—
Commercial Real Estate		319			319			—
Commercial		4,403			3,347			2,725
Consumer		2,039			617			218
SBA		581			424			609
Trade Finance		1,144			725			—
Total charge-offs		8,888			5,633			3,552
Recoveries
Commercial		128			109			34
Consumer		131			78			72
SBA		135			114			17
Trade Finance		12			10			—
Total recoveries		406			311			123
Net loan charge-offs		8,482			5,322			3,429
Provision for loan losses		14,825			6,330			6,494
Balance at end of period	$	26,820		$	21,485		$	20,477
Ratios:
Net loan charge-offs to average loans		0.47	%		0.29	%		0.21	%
Provision for loan losses to average total loans		0.82			0.35			0.39
Allowance for loan losses to gross loans at end of period		1.56			1.22			1.13
Allowance for loan losses to total nonperforming loans		131			256			327
Net loan charge-offs to allowance for loan losses at end of period		31.63			24.77			16.75
Net loan charge-offs to provision for loan losses		57.21			84.08			52.80

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

CENTER FINANCIAL CORPORATION

SELECTED FINANCIAL DATA (Unaudited)

	Three Months Ended										Twelve Months Ended
	12/31/08		9/30/08		6/30/08		3/31/08		12/31/07		12/31/08		12/31/07
Performance ratios:
Return on average assets	0.13	%	(0.61	)%	1.00	%	0.79	%	0.81	%	0.34	%	1.14	%
Return on average equity	1.47		7.59		12.97		10.47		10.03		4.18		14.33
Efficiency ratio	58.88		116.51		53.49		59.52		61.80		72.49		53.80
Net loans to total deposits at period end	105.44		107.07		108.10		110.2		113.44		105.44		113.44
Net loans to total assets at period end	81.99		85.19		84.37		85.81		86.01		81.99		86.01
					As of the Dates Indicated
					12/31/08		9/30/08		6/30/08		3/31/08		12/31/07
Capital ratios:
Leverage capital ratio
Consolidated Company					11.62	%	8.71	%	8.51	%	8.35	%	8.49	%
Center Bank					10.98		8.73		8.46		8.23		8.28
Tier 1 risk-based capital ratio
Consolidated Company					12.88		9.84		9.49		9.11		9.31
Center Bank					12.16		9.86		9.43		8.98		9.08
Total risk-based capital ratio
Consolidated Company					14.13		11.03		10.63		10.25		10.42
Center Bank					13.41		11.04		10.57		10.11		10.19

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 fourth quarter financial results news release, adjusted for the effects of the KEIC settlement expense and OTTI impairment expense:

	For the Three Months Ended December 31, 2008
	GAAP As Reported			Less OTTI Effect			Non-GAAP As Adjusted
Noninterest expense	$	(12,770	)	$	2,611		$	(10,159	)
Net income	$	667		$	1,514		$	2,181
Earnings per share
Basic	$	0.03		$	0.09		$	0.12
Diluted	$	0.03		$	0.09		$	0.12
Weighted average shares outstanding – basic and diluted		16,815,000			—			16,815,000
Efficiency ratio		58.88	%		(12.04	)%		46.84	%
Return on average assets		0.13	%		0.30	%		0.43	%
Return on average equity		1.47	%		3.35	%		4.82	%

	For the Year Ended December 31, 2008
	GAAP As Reported			Less KEIC Effect			Less OTTI Effect			Non-GAAP As Adjusted
Noninterest expense	$	(65,225	)	$	7,700		$	9,889		$	(47,636	)
Net income	$	7,010		$	4,466		$	5,736		$	17,212
Earnings per share
Basic	$	0.41		$	0.27		$	0.35		$	1.04
Diluted	$	0.41		$	0.27		$	0.35		$	1.04
Weighted average shares outstanding – basic and diluted		16,560,000			157,000			—			16,403,000
Efficiency ratio		72.49	%		(8.56	)%		(10.99	)%		52.94
			%
Return on average assets		0.34	%		0.21	%		0.28	%		0.83
			%
Return on average equity		4.18	%		2.66	%		3.42	%		10.26
			%