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2009 THIRD QUARTER SUMMARY: -- Delinquent loans 30 to 89 days past due decreased to $15.6 million at September 30, representing 0.98% of total loans, compared with $29.7 million at June 30, 2009 -- Nonaccrual loans increased to $43.0 million at September 30 from $38.9 million at June 30, 2009 -- Net charge-offs totaled $11.8 million for Q3, $29.0 million year-to-date -- Provision for loan losses of $10.6 million, versus $29.8 million in Q2 2009 -- Allowance for loan losses to gross loans increased to 4.01% as of September 30, from 3.96% at June 30, 2009 -- Gross loans further reduced to $1.59 billion from $1.65 billion at June 30, 2009 -- Total deposits declined to $1.81 billion at September 30, 2009, reflecting reductions in jumbo time deposits and money market accounts, partially offset by increases in noninterest-bearing deposits -- Higher balances in lower-yielding Federal funds sold due to excess liquidity and the reversal of interest income on nonaccrual loans pressure net interest margin, down 11 basis points to 2.85% from 2.96% from for Q2 2009 -- Net loss reduced to $2.5 million for Q3 2009 from $12.8 million for Q2 2009 -- Company remains strongly capitalized with total risk-based capital ratio of 13.43% at September 30, 2009 -- Tangible common equity to tangible assets, a non-GAAP financial measure, increased to 6.41% at September 30, 2009 from 6.32% at June 30, 2009 "The assertive actions taken in the second quarter of 2009 have positioned us on strong grounds to manage through one of the most challenging credit environments in history," said Jae Whan (J.W.) Yoo, president and chief executive officer. "While additional loans migrated to nonaccrual status during the third quarter, we are gratified to see that the flows into delinquencies 30 to 89 days past due subsided considerably. We continue to stay in front of potential issues by identifying impaired loans early on, proactively working with our customers to seek resolutions and tactically disposing of problem assets. This is underscored by the resolution of four large credits, two of which were nonperforming loans and two that were delinquent 60 to 89 days, for an aggregate total of $25.2 million during the quarter." ASSET QUALITY Nonperforming loans as of September 30, 2009 totaled $43.0 million, compared with $38.9 million at June 30, 2009. The increase primarily reflects net additions of $20.7 million in commercial real estate (CRE) loans, offset by reductions of $11.7 million in commercial real estate construction loans and $5.3 million in commercial business loans. Total nonperforming assets as of September 30, 2009, including $4.8 million in other real estate owned (OREO), equaled $47.8 million, or $44.7 million net of the SBA guarantee. This compares with total nonperforming assets of $43.5 million as of June 30, 2009, or $41.0 million net of the SBA guarantee, including $4.6 million in OREO. Total nonperforming assets as a percentage of gross loans and OREO amounted to 2.99% at September 30, 2009, compared with 2.63% as of June 30, 2009. The company attributed the increase in nonperforming CRE loans to five loan relationships totaling $20.6 million, of which $11.5 million in loans is related to industrial buildings, $4.0 million to vacant land, $2.2 million to retail commercial real estate and $2.9 million to a multi-family apartment building. Delinquent loans 30 to 89 days past due were sharply lower at $15.6 million as of September 30, 2009, compared with $29.7 million at June 30, 2009, primarily reflecting the migration of loans from delinquent to nonaccrual status. The company noted that troubled debt restructurings (TDRs) increased to $21.9 million at September 30, 2009, of which $17.0 million is included in nonaccrual loans. At June 30, 2009, TDRs amounted to $1.4 million. Net charge-offs during the 2009 third quarter declined to $11.8 million from $14.4 million in the preceding second quarter, and increased year-to-date net charge-offs to $29.0 million. As a percentage of average loans on an annualized basis, net charge-offs equaled 2.33% for the nine months ended September 30, 2009, versus 2.05% for the six months ended June 30, 2009. Center Financial recorded a provision for loan losses of $10.6 million for the 2009 third quarter, compared with a $29.8 million provision in the preceding 2009 second quarter. The allowance for loan losses totaled $64.0 million as of September 30, 2009 and represented 4.01% of gross loans. As of June 30, 2009, the allowance for loan losses was $65.2 million, representing 3.96% of gross loans. LOANS & DEPOSITS Gross loans at September 30, 2009 totaled $1.59 billion, reflecting a decrease of $53.8 million from June 30, 2009. The strategic reductions reflect significantly lower levels of loan production in the difficult credit environment, higher levels of loan pay-offs and charge-offs, and the resolution of four larger credits previously mentioned. Net loans as a percentage of total assets declined to 69.4% at September 20, 2009 from 69.7% at June 30, 2009, principally due to higher levels of liquidity on balance sheet. Total deposits declined to $1.81 billion at September 30, 2009 from $1.85 billion at June 30, 2009. Noninterest-bearing demand deposits grew to $332.5 million at September 30, 2009 from $314.6 million at June 30, 2009 and increased as a percentage of total deposits to 18.4% from 17.0% respectively. This increase was offset by reductions in the company's money market accounts and jumbo time deposits. At September 30, 2009, money market deposits decreased to $503.0 million from $530.4 million at June 30, 2009. Time deposits at the close of the 2009 third quarter fell to $897.0 million from $932.0 million at June 30, 2009. The company's loan-to-deposit ratio equaled 84.4% at September 30, 2009, compared with 85.2% at June 30, 2009. The average cost of interest-bearing deposits continued to decline and was 2.36% for the three months ended September 30, 2009. This compares with 2.68% for the preceding 2009 second quarter. BALANCE SHEET SUMMARY & CAPITAL Total assets at September 30, 2009 increased to $2.20 billion from $2.06 billion at year-end 2008, reflecting higher levels of liquidity on the balance sheet, partially offset by a continued reduction in the company's loan portfolio. Average interest-earning assets for the 2009 third quarter equaled $2.06 billion, compared with $2.08 billion for the preceding second quarter, reflecting the lower balances in the company's loan portfolio. Total shareholders' equity at September 30, 2009 was $197.7 million, compared with $214.6 million at December 31, 2008. As of September 30, 2009, the company's tangible common equity as a percentage of tangible assets equaled 6.41%, compared with 7.69% at December 31, 2008. Center Financial remains strongly capitalized, exceeding all regulatory guidelines. As of September 30, 2009, the company's capital position improved from the preceding period end with total risk-based capital ratio increasing to 13.43%, Tier 1 risk-based capital ratio advancing to 12.15%, and Tier 1 leverage ratio expanding to 9.41%. 2009 THIRD QUARTER OPERATIONAL HIGHLIGHTS Net interest income before provision for loan losses totaled $14.8 million for the three months ended September 30, 2009, compared with $15.3 million for the three months ended June 30, 2009 and $19.8 million in the third quarter of 2008. The company attributed the decrease to market rate reductions and the reversal of interest on non-accrual loans, which lowered its yield on loans. The average yield on loans for the 2009 third quarter declined by 21 basis points to 5.91% from 6.12% in the preceding 2009 second quarter and fell by 98 basis points from the prior-year third quarter. The average yields on the investment portfolio were 3.82% for the 2009 third quarter, 4.14% for the 2009 second quarter and 4.97% for the third quarter of 2008. The company's net interest margin for the 2009 third quarter was 2.85%, compared with 2.96% in the preceding second quarter and 4.02% in the third quarter a year ago. The compression in net interest margin principally reflects the decline in weighted average loan yields, decreasing loan balances, the reversal of previously accrued interest income on loans placed on non-accrual status during the quarter and higher balances in low-yielding Federal funds sold. Noninterest income totaled $3.3 million in the 2009 third quarter, versus $3.5 million in the 2009 second quarter and $3.4 million in the prior-year third quarter. Total noninterest expense was stable at $11.7 million for the 2009 third and second quarters. For the year-ago third quarter, total noninterest expense was $27.0 million, including two large expenses totaling $15.0 million related to a non-cash, other-than-temporary impairment expense and the complete resolution of the long-standing Korea Export Insurance Corporation litigation during the quarter. The company's efficiency ratio for the 2009 third quarter equaled 64.55%, compared with 62.48% for the preceding 2009 second quarter and 116.51% for the 2008 third quarter. Center Financial incurred a net loss of $2.5 million, equal to $0.19 per common share, for the 2009 third quarter. This is down from a net loss of $12.8 million, or $0.81 per common share, for the preceding 2009 second quarter, and a net loss of $3.2 million, equal to $0.19 per common share, for the prior-year third quarter. For the 2009 third quarter, Center Financial posted a loss on average assets and loss on average equity of 0.45% and 5.01%, respectively. This compares with loss on average assets of 2.32% and loss on average equity of 23.95% in the preceding second quarter of 2009. For the year-ago third quarter, loss on average assets equaled 0.61% and loss on average equity was 7.59%. Yoo concluded, "Center Financial's board and management team will not hesitate to do what it takes to ensure the healthy survival of the Center Bank franchise and enhance the value of the organization for our customers, employees and shareholders. We look forward to emerging from this economic downturn as the leading bank in our niche providing the best strategic advantages." Use of Non-GAAP Financial Measures This news release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. Tangible common equity per common share and tangible common equity to tangible assets are non-GAAP financial measures. Tangible common equity was calculated as total shareholders' equity less preferred stock and related dividend and accretion of preferred stock discount, goodwill and intangible assets, net. Tangible common equity to tangible assets represents tangible common equity divided by total assets less goodwill and other intangible assets, net. The calculation of tangible common equity may differ among companies in light of diversity in presentation in the marketplace. Management believes that these measures are useful when comparing banks with preferred stock due to TARP funding to banks without preferred stock on their balance sheet and for evaluating a company's capital levels. This information is being provided in response to market participant interest in these financial metrics. 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 measure included in this news release are attached herein. Investor Conference Call The company will host an investor conference call at 9:15 a.m. PDT (12:15 EDT) on Thursday, October 22, 2009 to review the financial results for its third quarter ended September 30, 2009. 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 telephonic replay of the call will be available through Thursday, October 29, 2009 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering replay passcode 31174236. 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 $2.20 billion at September 30, 2009. 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. 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, 2008 (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. CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
9/30/2009 12/31/2008
(Dollars in thousands)
ASSETS
Cash and due from banks $ 37,369 $ 45,129
Federal funds sold 217,615 50,435
Money market funds and interest-bearing deposits in other banks 52,039 2,647
Cash and cash equivalents 307,023 98,211
Securities available for sale, at fair value 253,575 173,833
Securities held to maturity, at amortized cost (fair value of $0 as - 8,861
of
September 30, 2009 and $8,879 as of December 31, 2008)
Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost 15,673 15,673
Loans, net of allowance for loan losses of $63,978 as of September 1,510,564 1,669,476
30, 2009
and $38,172 as of December 31, 2008
Loans held for sale, at the lower of cost or fair value 17,789 9,864
Premises and equipment, net 13,698 14,739
Customers' liability on acceptances 1,982 4,503
Other real estate owned, net 4,813 -
Accrued interest receivable 7,679 7,477
Deferred income taxes, net 25,669 19,855
Investments in affordable housing partnerships 11,870 12,936
Cash surrender value of life insurance 12,291 11,992
Income tax receivable 11,125 2,327
Goodwill 1,253 1,253
Intangible assets, net 173 213
Other assets 6,665 5,396
Total $ 2,201,842 $ 2,056,609
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing $ 332,541 $ 310,154
Interest-bearing 1,477,674 1,293,365
Total deposits 1,810,215 1,603,519
Acceptances outstanding 1,982 4,503
Accrued interest payable 7,108 7,268
Other borrowed funds 147,805 193,021
Long-term subordinated debentures 18,557 18,557
Accrued expenses and other liabilities 18,456 15,174
Total liabilities 2,004,123 1,842,042
Commitments and Contingencies - -
Shareholders' Equity
Preferred stock, par value of $1,000 per share; authorized 53,115 52,959
10,000,000 shares; issued and outstanding, 55,000 shares as of
September 30, 2009 and December 31, 2008, respectively
Common stock, no par value; authorized 40,000,000 shares; issued 74,504 74,254
and outstanding, 16,800,726 shares and 16,789,080 shares
(including 10,700 shares and 10,400 shares of unvested restricted
stock) as of September 30, 2009 and December 31, 2008
Retained earnings 65,601 85,846
Accumulated other comprehensive income, net of tax 4,499 1,508
Total shareholders' equity 197,719 214,567
Total $ 2,201,842 $ 2,056,609
Tangible common equity per common share $ 8.40 $ 9.42
Tangible common equity to tangible assets 6.41 % 7.69 %
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
Three Months Nine Months
Ended Ended
9/30/09 6/30/09 9/30/08 9/30/09 9/30/08
(Dollars in thousands, except per share data)
Interest and Dividend Income:
Interest and fees on loans $ 23,128 $ 24,742 $ 30,574 $ 72,181 $ 95,553
Interest on federal funds sold 162 114 24 310 90
Interest on taxable investment securities 2,380 2,321 2,004 6,955 5,613
Interest on tax-advantaged investment securities 2 3 51 12 151
Dividends on equity stock 33 4 228 37 653
Money market funds and interest-earning deposits 11 15 31 56 92
Total interest and dividend income 25,716 27,199 32,912 79,551 102,152
Interest Expense:
Interest on deposits 9,031 9,913 10,666 27,668 36,860
Interest on borrowed funds 1,736 1,782 2,225 5,336 7,130
Interest expense on trust preferred securities 156 181 259 529 843
Total interest expense 10,923 11,876 13,150 33,533 44,833
Net interest income before provision for loan losses 14,793 15,323 19,762 46,018 57,319
Provision for loan losses 10,561 29,835 2,121 54,847 6,330
Net interest income (loss) after provision for loan losses 4,232 (14,512 ) 17,641 (8,829 ) 50,989
Noninterest Income:
Customer service fees 2,008 2,022 1,918 6,004 5,644
Fee income from trade finance transactions 543 587 675 1,679 1,948
Wire transfer fees 275 279 269 820 822
Gain on sale of loans - - 59 - 1,019
Loan service fees 167 185 144 626 445
Other income 356 401 321 1,480 1,091
Total noninterest income 3,349 3,474 3,386 10,609 10,969
Noninterest Expense:
Salaries and employee benefits 4,671 4,684 6,137 13,645 19,182
Occupancy 1,214 1,248 1,115 3,644 3,275
Furniture, fixtures, and equipment 713 517 546 1,757 1,538
Data processing 591 522 527 1,708 1,626
Legal fees 174 408 529 824 2,130
Accounting and other professional service fees 425 352 323 1,187 1,041
Business promotion and advertising 289 344 469 971 1,424
Stationery and supplies 104 105 140 318 429
Telecommunications 185 152 188 506 537
Postage and courier service 79 47 192 272 584
Security service 269 261 283 775 851
Net loss on sale of securities available for sale 7 - 7,279 55 7,279
Regulatory assessment 642 1,642 312 2,876 953
KEIC litigation settlement - - 7,700 - 7,700
Other operating expenses 2,347 1,463 1,229 5,112 3,909
Total noninterest expense 11,710 11,745 26,969 33,650 52,458
(Loss) income before income tax (benefit) provision (4,129 ) (22,783 ) (5,942 ) (31,870 ) 9,500
Income tax (benefit) provision (1,605 ) (9,996 ) (2,783 ) (13,834 ) 3,161
Net (loss) income (2,524 ) (12,787 ) (3,159 ) (18,036 ) 6,339
Preferred stock dividends and accretion of preferred stock discount (742 ) (739 ) - (2,211 ) -
Net (loss) income available to common shareholders (3,266 ) (13,526 ) (3,159 ) (20,247 ) 6,339
Other comprehensive income - unrealized gain on securities 1,365 2,270 1,484 2,991 138
available for sale, net of income tax expense of $991, $1,644,
$1,075, $2,167 and $100
Comprehensive (loss) income $ (1,159 ) $ (10,517 ) $ (1,675 ) $ (15,045 ) $ 6,477
(Loss) earnings per common share
Basic $ (0.19 ) $ (0.81 ) $ (0.19 ) $ (1.21 ) $ 0.38
Diluted $ (0.19 ) $ (0.81 ) $ (0.19 ) $ (1.21 ) $ 0.38
Weighted average shares outstanding - basic 16,788,950 16,789,080 16,577,318 16,789,036 16,437,778
Weighted average shares outstanding - diluted 16,788,950 16,789,080 16,577,318 16,789,036 16,474,486
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands)
Three Months Ended
9/30/09 6/30/09 9/30/08
Average Rate/ Average Rate/ Average Rate/
Balance Yield Balance Yield Balance Yield
Assets:
Interest-earning assets:
Loans $ 1,553,814 5.91 % $ 1,622,366 6.12 % $ 1,766,415 6.89 %
Federal funds sold 254,853 0.25 227,678 0.20 4,387 2.18
Investments 251,891 3.82 227,014 4.14 185,109 4.97
Total interest-earning assets 2,060,558 4.95 2,077,058 5.25 1,955,911 6.69
Noninterest - earning assets:
Cash and due from banks 84,367 53,934 49,557
Bank premises and equipment, net 13,975 14,382 14,703
Customers' acceptances outstanding 2,587 3,073 3,750
Accrued interest receivables 7,427 7,037 7,547
Other assets 62,418 53,653 42,872
Total noninterest-earning assets 170,774 132,079 118,429
Total assets $ 2,231,332 $ 2,209,137 $ 2,074,340
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts $ 496,907 1.75 % $ 492,730 2.09 % $ 393,830 2.88 %
Savings 80,529 3.24 63,569 3.48 54,424 3.52
Time certificates of deposit over $100,000 585,469 2.66 582,390 2.91 688,610 3.63
Other time certificates of deposit 353,058 2.54 344,761 2.99 128,155 3.26
1,515,963 2.36 1,483,450 2.68 1,265,019 3.35
Other borrowed funds 159,775 4.31 168,147 4.25 244,059 3.63
Long-term subordinated debentures 18,557 3.34 18,557 3.91 18,557 5.55
Total interest-bearing liabilities 1,694,295 2.56 1,670,154 2.85 1,527,635 3.42
Noninterest-bearing liabilities:
Demand deposits 322,370 304,931 357,145
Total funding liabilities 2,016,665 2.15 % 1,975,085 2.41 % 1,884,780 2.78 %
Other liabilities 14,611 19,937 23,973
Total noninterest-bearing liabilities 336,981 324,868 381,118
Shareholders' equity 200,056 214,115 165,587
Total liabilities and shareholders' equity $ 2,231,332 $ 2,209,137 $ 2,074,340
Cost of deposits 1.95 % 2.22 % 2.62 %
Net interest spread 2.39 % 2.40 % 3.27 %
Net interest margin 2.85 % 2.96 % 4.02 %
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands)
Nine Months Ended September 30,
2009 2008
Average Rate/ Average Rate/
Balance Yield Balance Yield
Assets:
Interest-earning assets:
Loans $ 1,614,596 5.98 % $ 1,799,893 7.09 %
Federal funds sold 180,436 0.23 4,627 2.60
Investments 228,200 4.14 175,976 4.94
Total interest-earning assets 2,023,232 5.26 1,980,496 6.89
Noninterest - earning assets:
Cash and due from banks 59,980 58,487
Bank premises and equipment, net 14,366 14,407
Customers' acceptances outstanding 3,166 4,182
Accrued interest receivables 7,108 7,747
Other assets 54,063 39,775
Total noninterest-earning assets 138,683 124,598
Total assets $ 2,161,915 $ 2,105,094
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Money market and NOW accounts $ 480,777 1.94 % $ 350,219 3.10 %
Savings 65,254 3.40 54,228 3.40
Time certificates of deposit over $100,000 658,685 2.40 760,854 4.18
Other time certificates of deposit 228,078 4.23 120,361 3.97
1,432,794 2.58 1,285,662 3.83
Other borrowed funds 168,199 4.24 255,235 3.73
Long-term subordinated debentures 18,557 3.81 18,557 6.07
Total interest-bearing liabilities 1,619,550 2.77 1,559,454 3.84
Noninterest-bearing liabilities:
Demand deposits 311,058 357,913
Total funding liabilities 1,930,608 2.32 % 1,917,367 3.12 %
Other liabilities 18,757 24,091
Total noninterest-bearing liabilities 329,815 382,004
Shareholders' equity 212,550 163,636
Total liabilities and shareholders' equity $ 2,161,915 $ 2,105,094
Cost of deposits 2.12 % 3.00 %
Net interest spread 2.49 % 3.05 %
Net interest margin 3.04 % 3.87 %
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands) As of the Dates Indicated
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
Loans
Real Estate:
Construction $ 21,800 $ 37,224 $ 53,072 $ 61,983 $ 62,296
Commercial 1,095,858 1,104,496 1,131,682 1,134,793 1,157,286
Commercial 290,675 320,005 313,065 334,350 336,929
Trade Finance 43,602 52,000 48,813 63,479 70,395
SBA 43,969 38,401 37,962 37,027 38,069
Consumer and other 97,841 95,417 79,868 88,423 93,053
Total Gross Loans 1,593,745 1,647,543 1,664,462 1,720,055 1,758,028
Less:
Allowance for Losses 63,978 65,197 49,778 38,172 21,485
Deferred Loan Fees 483 555 1,188 1,359 1,488
Discount on SBA Loans Retained 931 1,016 1,102 1,184 1,284
Total Net Loans and Loans Held for Sale $ 1,528,353 $ 1,580,775 $ 1,612,394 $ 1,679,340 $ 1,733,771
As a percentage of total gross loans:
Real estate:
Construction 1.4 % 2.3 % 3.2 % 3.6 % 3.5 %
Commercial 68.8 % 67.0 % 68.0 % 66.0 % 65.8 %
Commercial 18.2 % 19.4 % 18.8 % 19.4 % 19.2 %
Trade finance 2.7 % 3.2 % 2.9 % 3.7 % 4.0 %
SBA 2.8 % 2.3 % 2.3 % 2.2 % 2.2 %
Consumer 6.1 % 5.8 % 4.8 % 5.1 % 5.3 %
Total gross loans 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
As of the Dates Indicated
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
Deposits
Demand deposits (noninterest-bearing) $ 332,541 $ 314,621 $ 306,112 $ 310,154 $ 367,171
Money market accounts and NOW 503,006 530,410 470,741 447,275 425,156
Savings 77,698 77,958 52,683 52,692 54,520
913,245 922,989 829,536 810,121 846,847
Time deposits
Less than $100,000 336,689 335,440 321,456 312,136 218,498
$100,000 or more 560,281 596,519 513,076 481,262 553,931
Total deposits $ 1,810,215 $ 1,854,948 $ 1,664,068 $ 1,603,519 $ 1,619,276
As a percentage of total deposits:
Demand deposits (noninterest-bearing) 18.4 % 17.0 % 18.4 % 19.3 % 22.7 %
Money market accounts and NOW 27.8 % 28.6 % 28.3 % 27.9 % 26.3 %
Savings 4.2 % 4.2 % 3.1 % 3.3 % 3.3 %
50.4 % 49.8 % 49.8 % 50.5 % 52.3 %
Time deposits
Less than $100,000 18.6 % 18.1 % 19.3 % 19.5 % 13.5 %
$100,000 or more 31.0 % 32.1 % 30.9 % 30.0 % 34.2 %
Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands)
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
Nonperforming loans:
Construction Real Estate $ 5,309 $ 16,973 $ 15,451 $ 1,951 $ 2,152
Commercial Real Estate 25,167 4,516 18,870 13,128 -
Commercial 8,236 13,577 18,582 2,272 1,557
Consumer 909 889 416 369 307
Trade Finance 1,196 1,196 1,196 1,196 2,301
SBA 2,185 1,774 1,774 1,538 2,061
Total nonperforming loans 43,002 38,925 56,289 20,454 8,378
Other real estate owned 4,813 4,567 - - -
Total nonperforming assets 47,815 43,492 56,289 20,454 8,378
Guaranteed portion of nonperforming loans through SBA 3,134 2,448 2,408 2,110 2,485
Total nonperforming assets, net of SBA guarantee $ 44,681 $ 41,044 $ 53,881 $ 18,344 $ 5,893
Nonperforming loans as a percent of total gross loans 2.70 % 2.36 % 3.38 % 1.19 % 0.48 %
Nonperforming assets as a percent of total loans and other real 2.99 % 2.63 % 3.38 % 1.19 % 0.48 %
estate owned
Delinquent loans 30-89 days past due $ 15,638 $ 29,740 $ 26,931 $ 16,737 $ 11,084
Total nonperforming loans 43,002 38,925 56,289 20,454 8,378
Total delinquent loans $ 58,640 $ 68,665 $ 83,220 $ 37,191 $ 19,462
Nine Months Six Months Three Months Year Nine Months
Ended Ended Ended Ended Ended
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
Balances
Average total loans outstanding during the period $ 1,661,384 $ 1,682,918 $ 1,678,518 $ 1,800,972 $ 1,821,449
Total loans outstanding at end of period(1) $ 1,592,331 $ 1,645,972 $ 1,662,172 $ 1,717,511 $ 1,755,137
(1) Net of deferred loan fees and discount on SBA loans
sold
Allowance for Loan Losses:
Balance at beginning of period $ 38,172 $ 38,172 $ 38,172 $ 20,477 $ 20,477
Charge-offs:
Construction Real Estate 5,078 2,727 931 402 201
Commercial Real Estate 7,173 4,448 70 319 319
Commercial 15,305 8,780 1,236 4,403 3,347
Consumer 1,298 1,104 605 2,040 617
SBA 786 417 129 581 424
Other - - - 1,144 725
Total charge-offs 29,640 17,476 2,971 8,889 5,633
Recoveries
Commercial 253 43 25 128 109
Consumer 299 140 78 131 78
SBA 46 30 22 135 114
Other 1 1 1 12 10
Total recoveries 599 214 126 406 311
Net loan charge-offs 29,041 17,262 2,845 8,483 5,322
Provision for loan losses 54,847 44,287 14,451 26,178 6,330
Balance at end of period $ 63,978 $ 65,197 $ 49,778 $ 38,172 $ 21,485
Ratios:
Net loan charge-offs to average loans(2) 2.33 % 2.05 % 0.68 % 0.47 % 0.39 %
Provision for loan losses to average total loans(2) 4.40 5.26 3.44 1.45 0.46
Allowance for loan losses to gross loans at end of period 4.01 3.96 2.99 2.22 1.22
Allowance for loan losses to total nonperforming loans 148.8 167.5 88.4 186.6 256.4
Net loan charge-offs to allowance for loan losses at end of period(2) 60.52 52.95 22.86 22.22 33.03
Net loan charge-offs to provision for loan losses 52.95 38.98 19.69 32.41 84.08
(2) Annualized for comparability
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
Three Months Ended Nine Months Ended
9/30/2009 6/30/2009 9/30/2008 9/30/2009 9/30/2008
Performance ratios:
(Loss) return on average assets (0.45 ) % (2.32 ) % (0.61 ) % (1.12 ) % 0.40 %
(Loss) return on average equity (5.01 ) (23.95 ) (7.59 ) (11.35 ) 5.17
Efficiency ratio 64.55 62.48 116.51 59.42 76.82
Net loans to total deposits at period end 84.43 85.22 107.07 84.43 107.07
Net loans to total assets at period end 69.41 69.71 85.19 69.41 85.19
Capital ratios:
Leverage capital ratio
Consolidated Company 9.41 % 9.38 % 8.71 %
Center Bank 8.98 8.88 8.73
Tier 1 risk-based capital ratio
Consolidated Company 12.15 11.49 9.84
Center Bank 11.59 10.84 9.86
Total risk-based capital ratio
Consolidated Company 13.43 12.76 11.03
Center Bank 12.87 12.11 11.04
CENTER FINANCIAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES
(Unaudited)
9/30/2009 12/31/2008
Total shareholders' equity $ 197,719 $ 214,567
Less: Preferred stock (53,115 ) (52,959 )
Common stock warrant (2,051 ) (2,051 )
Goodwill and intangible assets, net (1,426 ) (1,466 )
Tangible common equity $ 141,127 $ 158,091
Total assets $ 2,201,842 $ 2,056,609
Less: Goodwill and intangible assets, net (1,426 ) (1,466 )
Tangible assets $ 2,200,416 $ 2,055,143
Common shares outstanding 16,800,726 16,789,080
Tangible common equity to tangible assets 6.41 % 7.69 %
Tangible common equity per common share $ 8.40 $ 9.42
SOURCE: Center Financial Corporation Center Financial Corporation Lonny Robinson Chief Financial Officer 213-401-2311 lonnyr@centerbank.com or PondelWilkinson Inc. Angie Yang Investor Relations 310-279-5967 ayang@pondel.com For full details for CLFC click here.
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