EXHIBIT 99.1
CENTER FINANCIAL REPORTS DOUBLE-DIGIT PERCENTAGE INCREASES
IN LOANS AND DEPOSITS, CONTINUED STRONG CREDIT QUALITY FOR 2007
LOS ANGELES – January 31, 2008 – Center Financial Corporation (NASDAQ: CLFC), the holding company of Center Bank, today reported financial results for its fourth quarter and year ended December 31, 2007, reflecting solid gains in both loans and deposits while maintaining strong asset quality.
“2007 was a year of building and strengthening the Center Financial organization in preparation for our next phase of growth,” said Jae Whan (J.W.) Yoo, who joined the company as president and chief executive officer on January 16, 2007. “Early in the year, we implemented a number of organizational changes designed to improve our overall internal controls and reporting lines. We added a number of seasoned banking executives and have what we believe to be the strongest and most cohesive senior management team among our direct peers. These enhancements contributed to the lifting of our BSA-related memorandum of understanding last May and enabled us to move forward on a steady, controlled pace of expansion.
“The Center Bank team, supported by a group of regional directors, worked diligently in an extremely challenging banking environment to add more than $250 million net to our loan portfolio during 2007. Importantly, we stayed true to our conservative credit culture provisioning adequate loan loss allowances and was successful in continuing to maintain healthy levels of asset quality,” Yoo said.
2007 Fourth Quarter Summary:
• | Net loans increased 4% sequentially by $71.4 million to $1.79 billion from Q3 2007; up 16% over 2006 |
• | Nonperforming assets as a percent of total loans and OREO 0.37%, versus 0.38% at September 30, 2007 |
• | Allowance for loan losses at 1.13%, compared with 1.12% at December 31, 2006 |
• | Total deposits up 10% year-over-year to $1.58 billion |
• | Non-interest bearing deposits equal 23% of total deposits, versus 24% for Q3 2007 |
• | Net interest margin compressed to 3.95% from 4.22% in Q3 2007 |
• | Net interest income before provision for loan losses stable at $19.1 million |
• | Other-than-temporary impairment (OTTI) write down of $1.3 million related to decline in market valuation of Fannie Mae preferred stocks, equal to $0.05 per diluted share after tax |
• | Net income of $3.9 million, or $0.23 per diluted share, versus $6.4 million, or $0.38 per diluted share, in Q4 2006 |
• | ROAA and ROAE down sequentially to 0.81% and 10.03%, respectively, versus 1.16% and 14.47% for Q3 2007 |
• | Opened second Seattle area full-service branch office |
• | Total of 363,766 shares repurchased during Q4 2007; 373,820 shares repurchased year-to-date |
• | Quarterly cash dividend of $0.05 per share |
2007 FOURTH QUARTER
Net interest income before provision for loan losses totaled $19.1 million for the three months ended December 31, 2007, the same level as in the 2006 fourth quarter. The company’s yield on interest-earning assets averaged 7.66% for the 2007 fourth quarter, compared with 8.01% in the preceding third quarter and 8.08% in the prior-year fourth quarter. The net interest margin for the 2007 fourth quarter was 3.95%, down from 4.22% in the immediately preceding third quarter and 4.49% in the year-ago fourth quarter. The
company attributed the net interest margin compression primarily to the 100 basis point reduction of the Federal Funds rate during 2007, which resulted in a downward re-pricing of 40% of the loan portfolio which is variable rate. To a lesser extent, the growing concentration of fixed rate loans in its portfolio, which typically provides lower rates than variable rate loans and a less favorable mix of interest-bearing to noninterest-bearing deposits also pressured the company’s net interest margin. General rate increases in funding liabilities from the fourth quarter of 2006 to the same 2007 period also contributed to the year-over-year net margin compression.
Center Financial added $2.1 million to its provision for loan losses in the 2007 fourth quarter, compared with $2.0 million in the immediately preceding third quarter and $1.4 million in the year-ago fourth quarter.
Noninterest income in the fourth quarter of 2007 totaled $3.3 million and did not include any gain from the sale of loans to the wholesale market. This compares with total noninterest income of $4.6 million in the year-ago fourth quarter, which included a gain on sale of loans of $719,000. Since the beginning of 2007, the company strategically refrained from selling loans to the wholesale market for an immediate gain on sale each quarter, electing rather to retain them for greater profitability longer term.
Noninterest expense for the 2007 fourth quarter increased significantly to $13.9 million from $11.8 million in the prior-year fourth quarter, principally reflecting an OTTI impairment loss of securities available for sale of $1.3 million in the 2007 fourth quarter related to the sudden and dramatic decline in the market value of its Fannie Mae preferred securities during the period. The company did not have any similar impairment in 2006. In addition, the higher levels of noninterest expense reflected additional costs associated with the opening of the company’s second full-service branch office in the Seattle area. As a percentage of average earning assets, noninterest expense was 2.9% for the 2007 fourth quarter, compared with 2.8% in the same period a year ago. The company’s efficiency ratio for the 2007 fourth quarter rose to 61.80% from 49.80% posted in the fourth quarter of 2006.
Net income for the 2007 fourth quarter totaled $3.9 million, equal to $0.23 per diluted share. On an after-tax basis, the impairment charge reduced the company’s 2007 fourth quarter earnings by $820,000, equal to $0.05 per diluted share. In the year-ago fourth quarter, the company posted net income of $6.4 million, or $0.38 per diluted share, which included the pre-tax gain on sale of $719,000.
Return on average assets (ROAA) and return on average equity (ROAE) equaled 0.81% and 10.03%, respectively, for the three months ended December 31, 2007. This compares with ROAA of 1.40% and ROAE of 18.30% in the year-ago fourth quarter.
2007 FULL YEAR
For 2007, net interest income before provision for loan losses increased 7% to $76.3 million from $71.4 million in the prior year. The increase reflects the growth in the company’s earning assets driven by continued strength in loan originations, partially offset by a larger proportion of interest-bearing deposits and higher interest expense on borrowed funds. Yield on interest-earning assets in 2007 rose modestly to 7.94% from 7.91% in 2006. The net interest margin for 2007 was 4.23%, compared with 4.53% a year ago. The company attributed the net interest margin compression to the higher concentration of fixed rate loans, which generally provides lower rates than variable rate loans, overall rate increases in funding liabilities and a less favorable mix of interest-bearing to noninterest-bearing deposits.
The company’s provision for loan losses totaled $6.5 million for 2007, compared with $5.7 million in 2006.
The company posted noninterest income of $14.9 million for the full 2007 year, which included a $618,000 gain on the sale of unguaranteed portion SBA loans posted in the 2007 second quarter. For 2006, noninterest income totaled $22.2 million, which included $3.3 million in gain on sale of SBA loans and a one-time recognition of $2.5 million related to an insurance settlement and a credit to legal expenses of $700,000.
Noninterest expense for 2007 totaled $49.0 million, including the previously mentioned OTTI impairment charge of $1.3 million. This compares with noninterest expense of $45.3 million in the prior year. The company’s efficiency ratio was 53.8% for 2007, compared with 48.4% for 2006. Management noted that its 2006 efficiency ratio benefited from the net positive impact from the $2.5 million insurance settlement and a credit to legal expenses of $700,000, offset partially by a one-time, BSA-related consulting expense of $1.5 million.
Net income for 2007 totaled $21.9 million, or $1.31 per diluted share, including the $618,000 in gain on sale of loans for the year. As previously mentioned, the impairment charge reduced the company’s 2007 fourth quarter earnings by $820,000, equal to $0.05 per diluted share, on an after-tax basis. For 2006, the company posted net income of $26.2 million, or $1.57 per diluted share, which included $3.3 million in gain on sale of loans and the insurance settlement of $2.5 million, offset partially by BSA-related consulting expense of $1.5 million.
Return on average assets and return on average equity for 2007 equaled 1.14% and 14.33%, respectively, compared with ROAA of 1.53% and ROAE of 20.66% for 2006.
FINANCIAL CONDITION
Gross loans at December 31, 2007 increased 4% sequentially to $1.81 billion from $1.74 billion at September 30, 2007 and rose 16% from $1.56 billion at December 31, 2006. As of year-end, 2007, commercial real estate loans, which increased 15% from year-end 2006, remained the largest component of the company’s total loan portfolio and accounted for approximately 66% of total loans outstanding. Real estate construction loans grew by $24.6 million and accounted for 4% of the company’s total loans at December 31, 2007. Commercial and industrial loans, including commercial, trade finance and SBA loans, represented 25% and consumer loans totaled 5% of the company’s gross loan portfolio at September 31, 2007. Net loans as a percentage of total assets was 85.99% at December 31, 2007, compared with 85.60% at September 30, 2007 and 83.39% at year-end 2006.
Center Financial continued to maintain sound asset quality with nonperforming assets at December 31, 2007 totaling approximately the same level as of September 30, 2007 at $6.6 million. Excluding the guaranteed portion of nonperforming SBA loans, nonperforming assets equaled $3.9 million at year end, down from $4.2 million at September 30, 2007. At December 31, 2006, nonperforming assets totaled $3.3 million, or $2.3 million, net of SBA guarantee. As a percentage of total gross loans, nonperforming loans equaled 0.35% at December 31, 2007, 0.38% at September 30, 2007 and 0.21% at December 31, 2006.
For the full 2007 year, net charge-offs totaled $3.4 million, compared with net charge-offs of $2.1 million in the prior year. The total allowance for loan losses at December 31, 2007 increased to $20.5 million, reflecting the company’s expanded loan portfolio as well as an uncertain economic environment, and represented 1.13% of gross loans. This compares with allowance for losses of $17.4 million, or 1.12% of gross loans, at December 31, 2006.
Total deposits at December 31, 2007 equaled $1.58 billion, up 10% over $1.43 billion at the end of 2006. Non-interest bearing deposits at the close of 2007 totaled $363.5 million and represented 23% of total deposits, compared with $388.2 million, or 27% of total deposits, at December 31, 2006. Time deposits at December 31, 2007 accounted for 58% of total deposits, compared with 54% at year-end 2006. Center Bank’s loan-to-deposit ratio as of December 31, 2007 equaled 113.44%, compared with 107.54% at December 31, 2006.
The average cost of interest-bearing deposits for the full 2007 year was 4.80%, up from 4.43% for the prior year, primarily reflecting the four increases of 25 basis points each in the Fed Funds rate by the Federal Reserve over the course of 2006. While the Federal Reserve lowered the Fed funds rate by a total of 100 basis points during 2007, the lagging effect of the 50 basis point reduction on September 18, 2007, followed by two additional 25 basis point reductions on October 31 and December 18, did not result in any significant impact to the company’s cost of interest-bearing deposits for 2007. The average cost of total deposits for 2007 rose to 3.59% from 3.25% a year ago.
Total assets at the close of 2007 increased to $2.08 billion from $1.84 billion at December 31, 2006, primarily reflecting the growth in the company’s loan portfolio. Average interest-earning assets for the 2007 full year totaled $1.80 billion, compared with $1.58 billion for 2006.
Under a $10 million stock buyback plan authorized by the board of directors in May 2007, the company repurchased a total of 363,766 shares at an average price of $12.20 during the 2007 fourth quarter, or 373,820 shares year-to-date at an average price of $12.33. At year end, $5.4 million remained available under the repurchase plan.
Shareholders’ equity at December 31, 2007 increased 12% to $158.0 million from $140.7 million at December 31, 2006. Tangible book value at year-end 2007 increased to $9.56 per share from $8.37 per share at year-end 2006. At December 31, 2007, Center Financial remained “well-capitalized” under all regulatory categories, with a Tier 1 risk-based capital ratio of 9.31%, a total risk-based capital ratio of 10.42%, and a Tier 1 leverage ratio of 8.49%.
Yoo concluded: “Looking forward into 2008, we anticipate implementing a number of strategies designed to enhance our ability to gather core deposits and increase our liquidity. We are also planning for controlled levels of quality loan growth, as well as greater management of our portfolio concentrations. With Center Bank’s historically prudent, conservative credit culture and a strong leadership team in place, we are confident that we will weather the challenges of the current market and be able to maintain healthy asset quality metrics throughout the year. Our regional director reorganization is coming into full swing, and we believe we are better prepared to serve the financial needs of small business entrepreneurs. We look forward to creating even greater value for all of our customers, employees and shareholders as we enter our next phase of growth.”
DEFINITIVE AGREEMENT TO ACQUIRE FIRST INTERCONTINENTAL BANK
On September 18, 2007, Center Financial announced that it had entered into a definitive agreement to acquire First Intercontinental Bank of Doraville, Ga., the commercial business center of Atlanta’s Asian community. Under the terms of the definitive agreement, which has been approved by each respective board of directors, First Intercontinental will be merged into a newly formed Georgia state-chartered banking subsidiary of Center Financial that will operate under the First Intercontinental Bank name. Center Financial will become a multi-bank holding company with Center Bank and First Intercontinental Bank as its two wholly owned banking subsidiaries. The transaction is valued at $22.27 per fully diluted share of First Intercontinental Bank common stock, based on a total purchase price of $65.2 million. Of this amount, approximately $3.6 million is to be paid in cash for the cancellation of outstanding First Intercontinental stock options, and the remainder is to be paid to First Intercontinental shareholders, payable 60% in cash and 40 % in Center Financial common stock. The closing of the transaction is subject to the approvals of the Federal Reserve Board, the FDIC and the Georgia Department of Banking and Finance, as well as the approval of First Intercontinental’s shareholders. The transaction is expected to be completed in the second quarter of 2008.
Investor Conference Call
The company will host an investor conference call at 9:00 a.m. PST (12 noon EST) on Thursday, Jan. 31, 2008 to review the financial results for its 2007 fourth quarter and full year. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet athttp://www.centerbank.com andhttp://www.earnings.com. Listeners are encouraged to visit the Web site at least 15 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, the audio broadcast will be archived for one year at both Web sites. A telephone replay of the call will be available through 11:59 p.m. PST, Thursday, Feb. 7, 2008 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 30740438.
About Center Financial Corporation
Center Financial Corporation is the holding company of Center Bank, a community bank offering a full range of financial services for diverse ethnic and small business customers. Founded in 1986 and specializing in commercial and SBA loans and trade finance products, Center Bank has grown to be one of the nation’s largest financial institutions focusing on the Korean-American community, with total assets of $2.1 billion at December 31, 2007. Headquartered in Los Angeles, Center Bank operates 26 branch and loan production offices. Of the company’s 18 full-service branches, 15 are located throughout Southern California, along with one branch in Chicago and two in Seattle. Center Bank’s eight loan production offices are strategically located in Seattle, Denver, Washington D.C., Las Vegas, Atlanta, Dallas, Houston 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, 2006 (See Business, and Management’s Discussion and Analysis), and other filings with the Securities and Exchange Commission (SEC) are incorporated herein by reference. These factors include, but are not limited to: competition in the financial services market for both deposits and loans; the ability of Center Financial and its subsidiaries to increase its customer base; changes in interest rates; new litigation or changes or adverse developments in existing litigation; and regional and general economic conditions. Such forward-looking statements speak only as of the date of this release. Center Financial expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in the company’s expectations of results or any change in events.
# # #
(tables follow)
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Unaudited)
12/31/2007 | 12/31/2006 | ||||||
(Dollars in thousands) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 58,339 | $ | 71,504 | |||
Federal funds sold | 7,125 | — | |||||
Money market funds and interest-bearing deposits in other banks | 2,825 | 1,872 | |||||
Cash and cash equivalents | 68,289 | 73,376 | |||||
Securities available for sale, at fair value | 129,680 | 148,913 | |||||
Securities held to maturity, at amortized cost (Fair value of $10,961 as of December 31, 2007 and $10,571 as of December 31, 2006) | 10,932 | 10,591 | |||||
Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost | 15,219 | 11,065 | |||||
Loans, net of allowance for loan losses of $20,477 as of December 31, 2007 and $17,412 as of December 31, 2006 | 1,748,143 | 1,518,666 | |||||
Loans held for sale, at the lower of cost or market | 41,492 | 18,510 | |||||
Premises and equipment, net | 13,585 | 13,322 | |||||
Customers’ liability on acceptances | 3,292 | 4,871 | |||||
Other real estate owned, net | 380 | — | |||||
Accrued interest receivable | 8,886 | 8,574 | |||||
Deferred income taxes, net | 12,763 | 11,723 | |||||
Investments in affordable housing partnerships | 11,911 | 6,878 | |||||
Cash surrender value of life insurance | 11,583 | 11,183 | |||||
Goodwill | 1,253 | 1,253 | |||||
Intangible assets, net | 267 | 320 | |||||
Other assets | 3,511 | 4,067 | |||||
Total Assets | $ | 2,081,186 | $ | 1,843,312 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 363,465 | $ | 388,163 | |||
Interest-bearing | 1,214,209 | 1,041,236 | |||||
Total deposits | 1,577,674 | 1,429,399 | |||||
Acceptances outstanding | 3,292 | 4,871 | |||||
Accrued interest payable | 13,213 | 11,458 | |||||
Other borrowed funds | 299,606 | 229,490 | |||||
Trust preferred securities | 18,557 | 18,557 | |||||
Accrued expenses and other liabilities | 10,868 | 8,803 | |||||
Total liabilities | 1,923,210 | 1,702,578 | |||||
Commitments and Contingencies | — | — | |||||
Shareholders’ Equity | |||||||
Serial preferred stock, no par value; authorized 10,000,000 shares; issued and outstanding, none | — | — | |||||
Common stock, no par value; authorized 40,000,000 shares; issued and outstanding, 16,366,791 (including 8,700 shares of unvested restricted stock) as of December 31, 2007 and 16,632,601 as of December 31, 2006 | 67,006 | 69,172 | |||||
Retained earnings | 90,541 | 71,777 | |||||
Accumulated other comprehensive income (loss), net of tax | 429 | (215 | ) | ||||
Total shareholders’ equity | 157,976 | 140,734 | |||||
Total Liabilities and Shareholders’ Equity | $ | 2,081,186 | $ | 1,843,312 | |||
Tangible book value per share | $ | 9.56 | $ | 8.37 |
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(Unaudited)
Three Months Ended | Twelve Months Ended December 31, | ||||||||||||||||
12/31/07 | 9/30/07 | 12/31/06 | 2007 | 2006 | |||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Interest and Dividend Income: | |||||||||||||||||
Interest and fees on loans | $ | 35,038 | $ | 34,781 | $ | 32,277 | $ | 135,290 | $ | 114,238 | |||||||
Interest on federal funds sold | 75 | 67 | 69 | 255 | 1,575 | ||||||||||||
Interest on taxable investment securities | 1,645 | 1,595 | 1,546 | 6,416 | 7,547 | ||||||||||||
Interest on tax-advantaged investment securities | 129 | 125 | 135 | 516 | 528 | ||||||||||||
Dividends on equity stock | 183 | 151 | 154 | 689 | 419 | ||||||||||||
Money market funds and interest-earning deposits | 29 | 16 | 190 | 75 | 422 | ||||||||||||
Total interest and dividend income | 37,098 | 36,735 | 34,371 | 143,241 | 124,729 | ||||||||||||
Interest Expense: | |||||||||||||||||
Interest on deposits | 14,421 | 14,767 | 12,216 | 54,195 | 47,403 | ||||||||||||
Interest expense on trust preferred securities | 373 | 378 | 379 | 1,493 | 1,455 | ||||||||||||
Interest on borrowed funds | 3,178 | 2,258 | 2,681 | 11,298 | 4,461 | ||||||||||||
Total interest expense | 17,972 | 17,403 | 15,276 | 66,986 | 53,319 | ||||||||||||
Net interest income before provision for loan losses | 19,127 | 19,332 | 19,095 | 76,255 | 71,410 | ||||||||||||
Provision for loan losses | 2,125 | 2,000 | 1,397 | 6,494 | 5,666 | ||||||||||||
Net interest income after provision for loan losses | 17,002 | 17,332 | 17,698 | 69,761 | 65,744 | ||||||||||||
Noninterest Income: | |||||||||||||||||
Customer service fees | 1,725 | 1,676 | 1,948 | 6,940 | 8,181 | ||||||||||||
Fee income from trade finance transactions | 574 | 615 | 813 | 2,621 | 3,412 | ||||||||||||
Wire transfer fees | 256 | 206 | 223 | 899 | 897 | ||||||||||||
Gain on sale of loans | — | — | 719 | 618 | 3,335 | ||||||||||||
Net loss on sale of securities available for sale | — | — | (115 | ) | — | (115 | ) | ||||||||||
Gain on sale of premises and equipment | — | — | — | 12 | — | ||||||||||||
Loan service fees | 322 | 409 | 394 | 1,720 | 1,842 | ||||||||||||
Insurance settlement - legal fees | — | — | — | — | 2,520 | ||||||||||||
Other income | 457 | 477 | 622 | 2,053 | 2,154 | ||||||||||||
Total noninterest income | 3,334 | 3,383 | 4,604 | 14,863 | 22,226 | ||||||||||||
Noninterest Expense: | |||||||||||||||||
Salaries and employee benefits | 7,003 | 6,342 | 6,211 | 25,650 | 23,684 | ||||||||||||
Occupancy | 1,154 | 1,079 | 917 | 4,176 | 3,653 | ||||||||||||
Furniture, fixtures, and equipment | 533 | 575 | 477 | 2,072 | 1,933 | ||||||||||||
Data processing | 495 | 530 | 478 | 2,062 | 2,100 | ||||||||||||
Professional service fees | 773 | 359 | 1,069 | 3,222 | 4,187 | ||||||||||||
Business promotion and advertising | 269 | 480 | 1,015 | 2,390 | 2,572 | ||||||||||||
Stationery and supplies | 144 | 137 | 142 | 553 | 647 | ||||||||||||
Telecommunications | 195 | 160 | 143 | 636 | 650 | ||||||||||||
Postage and courier service | 173 | 185 | 183 | 738 | 731 | ||||||||||||
Security service | 251 | 268 | 242 | 1,030 | 991 | ||||||||||||
Impairment loss of securities available for sale | 1,328 | — | 1,328 | — | |||||||||||||
Loss on interest rate swaps | — | — | — | — | 26 | ||||||||||||
Other operating expenses | 1,603 | 1,332 | 914 | 5,178 | 4,153 | ||||||||||||
Total noninterest expense | 13,920 | 11,447 | 11,791 | 49,035 | 45,327 | ||||||||||||
Income before income tax provision | 6,416 | 9,268 | 10,511 | 35,589 | 42,643 | ||||||||||||
Income tax provision | 2,510 | 3,570 | 4,161 | 13,646 | 16,485 | ||||||||||||
Net income | 3,906 | 5,698 | 6,350 | 21,943 | 26,158 | ||||||||||||
Other comprehensive income - unrealized gain onavailable-for-sale securities, net of income tax expense of $(103), $(361), $(468) and $(697) | 141 | 476 | 497 | 644 | 961 | ||||||||||||
Comprehensive income | $ | 4,047 | $ | 6,174 | $ | 6,847 | $ | 22,587 | $ | 27,119 | |||||||
EARNINGS PER SHARE: | |||||||||||||||||
Basic | $ | 0.23 | $ | 0.34 | $ | 0.38 | $ | 1.32 | $ | 1.58 | |||||||
Diluted | $ | 0.23 | $ | 0.34 | $ | 0.38 | $ | 1.31 | $ | 1.57 | |||||||
Weighted average shares outstanding - basic | 16,680,000 | 16,720,539 | 16,629,471 | 16,649,495 | 16,535,189 | ||||||||||||
Weighted average shares outstanding - diluted | 16,725,667 | 16,785,290 | 16,720,733 | 16,731,694 | 16,666,768 | ||||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands)
Three Months Ended | ||||||||||||||||||
12/31/07 | 9/30/07 | 12/31/06 | ||||||||||||||||
Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | |||||||||||||
Assets: | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans | $ | 1,756,464 | 7.91 | % | $ | 1,662,816 | 8.30 | % | $ | 1,508,918 | 8.49 | % | ||||||
Federal funds sold | 5,781 | 5.15 | 4,582 | 5.80 | 4,673 | 5.86 | ||||||||||||
Investments | 157,999 | 4.98 | 152,387 | 4.96 | 173,204 | 4.64 | ||||||||||||
Total interest-earning assets | 1,920,244 | 7.66 | 1,819,785 | 8.01 | 1,686,795 | 8.08 | ||||||||||||
Noninterest - earning assets: | ||||||||||||||||||
Cash and due from banks | 68,245 | 63,727 | 78,241 | |||||||||||||||
Bank premises and equipment, net | 13,598 | 13,564 | 13,445 | |||||||||||||||
Customers’ acceptances outstanding | 3,004 | 3,241 | 5,008 | |||||||||||||||
Accrued interest receivables | 8,003 | 8,286 | 7,492 | |||||||||||||||
Other assets | 35,674 | 32,399 | 31,746 | |||||||||||||||
Total noninterest-earning assets | 128,524 | 121,217 | 135,932 | |||||||||||||||
Total assets | $ | 2,048,768 | $ | 1,941,002 | $ | 1,822,727 | ||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Money market and NOW accounts | $ | 262,331 | 4.00 | % | $ | 263,320 | 4.30 | % | $ | 188,888 | 3.05 | % | ||||||
Savings | 56,755 | 3.17 | 60,946 | 3.17 | 78,761 | 3.82 | ||||||||||||
Time certificates of deposit over $100,000 | 772,459 | 5.16 | 763,632 | 5.27 | 685,735 | 5.19 | ||||||||||||
Other time certificates of deposit | 105,525 | 4.79 | 104,879 | 4.83 | 93,007 | 4.44 | ||||||||||||
1,197,070 | 4.78 | 1,192,777 | 4.91 | 1,046,391 | 4.63 | |||||||||||||
Other borrowed funds | 273,914 | 4.60 | 180,667 | 4.96 | 198,634 | 5.36 | ||||||||||||
Long-term subordinated debentures | 18,557 | 7.97 | 18,557 | 8.08 | 18,557 | 8.10 | ||||||||||||
Total interest-bearing liabilities | 1,489,541 | 4.79 | 1,392,001 | 4.96 | 1,263,582 | 4.80 | ||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||
Demand deposits | 374,589 | 370,254 | 401,182 | |||||||||||||||
Total funding liabilities | 1,864,130 | 3.82 | % | 1,762,255 | 3.92 | % | 1,664,764 | 3.64 | % | |||||||||
Other liabilities | 24,085 | 22,572 | 20,376 | |||||||||||||||
Total noninterest-bearing liabilities | 398,674 | 392,826 | 421,558 | |||||||||||||||
Shareholders’ equity | 160,553 | 156,175 | 137,587 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,048,768 | $ | 1,941,002 | $ | 1,822,727 | ||||||||||||
Net interest income | ||||||||||||||||||
Cost of deposits | 3.64 | % | 3.75 | % | 3.35 | % | ||||||||||||
Net interest spread | 2.88 | % | 3.05 | % | 3.29 | % | ||||||||||||
Net interest margin | 3.95 | % | 4.22 | % | 4.49 | % | ||||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(Dollars in thousands)
Twelve Months Ended December 31, | ||||||||||||
2007 | 2006 | |||||||||||
Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | |||||||||
Assets: | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans | $ | 1,640,425 | 8.25 | % | $ | 1,340,959 | 8.52 | % | ||||
Federal funds sold | 4,609 | 5.53 | 33,286 | 4.73 | ||||||||
Investments | 159,364 | 4.88 | 203,453 | 4.43 | ||||||||
Total interest-earning assets | 1,804,398 | 7.94 | 1,577,698 | 7.91 | ||||||||
Noninterest - earning assets: | ||||||||||||
Cash and due from banks | 67,373 | 76,934 | ||||||||||
Bank premises and equipment, net | 13,534 | 13,714 | ||||||||||
Customers’ acceptances outstanding | 3,580 | 5,017 | ||||||||||
Accrued interest receivables | 7,955 | 7,011 | ||||||||||
Other assets | 33,394 | 31,502 | ||||||||||
Total noninterest-earning assets | 125,836 | 134,178 | ||||||||||
Total assets | $ | 1,930,234 | $ | 1,711,876 | ||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Money market and NOW accounts | $ | 233,984 | 3.93 | % | $ | 204,535 | 2.97 | % | ||||
Savings | 64,906 | 3.35 | 80,219 | 3.79 | ||||||||
Time certificates of deposit over $100,000 | 731,034 | 5.22 | 687,181 | 4.97 | ||||||||
Other time certificates of deposit | 99,624 | 4.71 | 98,077 | 4.22 | ||||||||
1,129,548 | 4.80 | 1,070,012 | 4.43 | |||||||||
Other borrowed funds | 224,860 | 5.02 | 83,941 | 5.31 | ||||||||
Long-term subordinated debentures | 18,557 | 8.05 | 18,557 | 7.84 | ||||||||
Total interest-bearing liabilities | 1,372,965 | 4.88 | 1,172,510 | 4.55 | ||||||||
Noninterest-bearing liabilities: | ||||||||||||
Demand deposits | 382,071 | 390,675 | ||||||||||
Total funding liabilities | 1,755,036 | 3.82 | % | 1,563,185 | 3.41 | % | ||||||
Other liabilities | 22,080 | 22,050 | ||||||||||
Total noninterest-bearing liabilities | 404,151 | 412,725 | ||||||||||
Shareholders’ equity | 153,118 | 126,641 | ||||||||||
Total liabilities and shareholders’ equity | $ | 1,930,234 | $ | 1,711,876 | ||||||||
Net interest income | ||||||||||||
Cost of deposits | 3.59 | % | 3.25 | % | ||||||||
Net interest spread | 3.06 | % | 3.36 | % | ||||||||
Net interest margin | 4.23 | % | 4.53 | % | ||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
As of the Dates Indicated | ||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Real Estate: | ||||||||||||||||||||
Construction | $ | 68,143 | $ | 59,821 | $ | 58,865 | $ | 53,468 | $ | 43,508 | ||||||||||
Commercial | 1,197,104 | 1,142,899 | 1,080,128 | 1,060,110 | 1,042,562 | |||||||||||||||
Commercial | 310,962 | 306,037 | 288,736 | 285,132 | 277,296 | |||||||||||||||
Trade Finance | 66,964 | 75,526 | 67,000 | 68,703 | 66,925 | |||||||||||||||
SBA | 70,517 | 65,561 | 58,464 | 56,083 | 50,606 | |||||||||||||||
Consumer and other | 98,969 | 90,675 | 82,084 | 77,893 | 77,682 | |||||||||||||||
Total Gross Loans | 1,812,659 | 1,740,519 | 1,635,277 | 1,601,389 | 1,558,579 | |||||||||||||||
Less: | ||||||||||||||||||||
Allowance for Losses | 20,477 | 19,619 | 18,289 | 17,855 | 17,412 | |||||||||||||||
Deferred Loan Fees | 1,847 | 1,833 | 1,954 | 2,225 | 2,347 | |||||||||||||||
Discount on SBA Loans Retained | 700 | 796 | 874 | 1,535 | 1,644 | |||||||||||||||
Total Net Loans and Loans Held for Sale | $ | 1,789,635 | $ | 1,718,271 | $ | 1,614,160 | $ | 1,579,774 | $ | 1,537,176 | ||||||||||
As a percentage of total gross loans: | ||||||||||||||||||||
Real estate: | ||||||||||||||||||||
Construction | 3.8 | % | 3.4 | % | 3.6 | % | 3.3 | % | 2.8 | % | ||||||||||
Commercial | 66.0 | % | 65.7 | % | 66.1 | % | 66.2 | % | 66.9 | % | ||||||||||
Commercial | 17.2 | % | 17.6 | % | 17.7 | % | 17.8 | % | 17.8 | % | ||||||||||
Trade finance | 3.7 | % | 4.3 | % | 4.1 | % | 4.3 | % | 4.3 | % | ||||||||||
SBA | 3.9 | % | 3.8 | % | 3.6 | % | 3.5 | % | 3.2 | % | ||||||||||
Consumer | 5.5 | % | 5.2 | % | 5.0 | % | 4.9 | % | 5.0 | % | ||||||||||
Total gross loans | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
As of the Dates Indicated | ||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Demand deposits (noninterest-bearing) | $ | 363,465 | $ | 361,137 | $ | 393,108 | $ | 389,358 | $ | 388,163 | ||||||||||
Money market accounts and NOW | 244,233 | 237,457 | 275,403 | 181,305 | 190,453 | |||||||||||||||
Savings | 54,838 | 58,764 | 65,838 | 71,973 | 76,846 | |||||||||||||||
662,536 | 657,358 | 734,349 | 642,636 | 655,462 | ||||||||||||||||
Time deposits | ||||||||||||||||||||
Less than $100,000 | 112,614 | 105,038 | 102,582 | 91,600 | 91,830 | |||||||||||||||
$100,000 or more | 802,524 | 757,873 | 748,421 | 707,915 | 682,107 | |||||||||||||||
Total | $ | 1,577,674 | $ | 1,520,269 | $ | 1,585,352 | $ | 1,442,151 | $ | 1,429,399 | ||||||||||
As a percentage of total deposits: | ||||||||||||||||||||
Demand deposits (noninterest-bearing) | 23.0 | % | 23.8 | % | 24.8 | % | 27.0 | % | 27.2 | % | ||||||||||
Money market accounts and NOW | 15.5 | % | 15.6 | % | 17.4 | % | 12.6 | % | 13.3 | % | ||||||||||
Savings | 3.5 | % | 3.9 | % | 4.2 | % | 5.0 | % | 5.4 | % | ||||||||||
42.0 | % | 43.2 | % | 46.3 | % | 44.6 | % | 45.9 | % | |||||||||||
Time deposits | ||||||||||||||||||||
Less than $100,000 | 7.1 | % | 6.9 | % | 6.5 | % | 6.4 | % | 6.4 | % | ||||||||||
$100,000 or more | 50.9 | % | 49.9 | % | 47.2 | % | 49.1 | % | 47.7 | % | ||||||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
December 31, 2007 | September 30, 2007 | December 31, 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Nonperforming loans: | ||||||||||||
Commercial | $ | 1,775 | $ | 1,428 | $ | 1,502 | ||||||
Consumer | 457 | 445 | 429 | |||||||||
Trade Finance | — | 199 | — | |||||||||
SBA | 4,033 | 4,535 | 1,330 | |||||||||
Total nonperforming loans and assets | 6,265 | 6,607 | 3,261 | |||||||||
Other real estate owned | 380 | — | — | |||||||||
Total nonperforming assets | 6,645 | 6,607 | 3,261 | |||||||||
Guaranteed portion of nonperforming SBA loans | 2,740 | 2,418 | 973 | |||||||||
Total nonperforming assets, net of SBA guarantee | $ | 3,905 | $ | 4,189 | $ | 2,288 | ||||||
Year Ended December 31, 2007 | Nine Months Ended September 30, 2007 | Year Ended December 31, 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balances | ||||||||||||
Average total loans outstanding during the period | $ | 1,656,842 | $ | 1,619,267 | $ | 1,356,169 | ||||||
Total loans outstanding at end of period (1) | $ | 1,810,083 | $ | 1,737,890 | $ | 1,554,588 | ||||||
Allowance for Loan Losses: | ||||||||||||
Balance at beginning of period | $ | 17,412 | $ | 17,412 | $ | 13,871 | ||||||
Charge-offs: | ||||||||||||
Commercial Real Estate | — | — | 258 | |||||||||
Commercial | 2,725 | 2,032 | 1,635 | |||||||||
Consumer | 218 | 127 | 333 | |||||||||
SBA | 609 | 84 | 473 | |||||||||
Other | — | — | — | |||||||||
Total charge-offs | 3,552 | 2,243 | 2,699 | |||||||||
Recoveries | ||||||||||||
Real estate | — | — | 424 | |||||||||
Commercial | 34 | 19 | 43 | |||||||||
Consumer | 72 | 54 | 101 | |||||||||
SBA | 17 | 7 | 6 | |||||||||
Total recoveries | 123 | 80 | 574 | |||||||||
Net loan charge-offs | 3,429 | 2,163 | 2,125 | |||||||||
Provision for loan losses | 6,494 | 4,370 | 5,666 | |||||||||
Balance at end of period | $ | 20,477 | $ | 19,619 | $ | 17,412 | ||||||
Ratios: | ||||||||||||
Nonperforming loans as a percent of total gross loans | 0.35 | % | 0.38 | % | 0.21 | % | ||||||
Nonperforming assets as a percent of total loans and other real estate owned | 0.37 | 0.38 | 0.21 | |||||||||
Net loan charge-offs to average loans | 0.21 | 0.13 | 0.16 | |||||||||
Provision for loan losses to average total loans | 0.39 | 0.27 | 0.42 | |||||||||
Allowance for loan losses to gross loans at end of period | 1.13 | 1.13 | 1.12 | |||||||||
Allowance for loan losses to total nonperforming loans | 327 | 297 | 534 | |||||||||
Net loan charge-offs to allowance for loan losses at end of period | 16.75 | 11.03 | 12.20 | |||||||||
Net loan charge-offs to provision for loan losses | 52.80 | 49.50 | 37.50 |
(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 | ||||||||||||||
12/31/07 | 9/30/07 | 12/31/06 | 12/31/07 | 12/31/06 | |||||||||||
Performance ratios: | |||||||||||||||
Return on average assets | 0.81 | % | 1.16 | % | 1.40 | % | 1.14 | % | 1.53 | % | |||||
Return on average equity | 10.03 | 14.47 | 18.30 | 14.33 | 20.66 | ||||||||||
Efficiency ratio | 61.80 | 50.40 | 49.80 | 53.8 | 48.41 | ||||||||||
Net loans to total deposits at period end | 113.44 | 113.02 | 107.54 | 113.44 | 107.54 | ||||||||||
Net loans to total assets at period end | 85.99 | 85.60 | 83.39 | 85.99 | 83.39 |
As of the Dates Indicated | |||||||||
12/31/07 | 9/30/07 | 12/31/06 | |||||||
Capital ratios: | |||||||||
Leverage capital ratio | 8.49 | % | 9.01 | % | 8.62 | % | |||
Tier 1 risk-based capital ratio | 9.31 | 9.93 | 9.45 | ||||||
Total risk-based capital ratio | 10.42 | 11.08 | 10.54 |