Exhibit 99.1
News Release
Contacts: | Lonny Robinson Chief Financial Officer 213.401.2311 lonnyr@centerbank.com | Angie Yang Investor Relations PondelWilkinson Inc. 310.279.5967 ayang@pondel.com |
CENTER FINANCIAL REPORTS 2009 SECOND QUARTER RESULTS; TAKES ASSERTIVE STANCE ON CREDIT WITH $29.8MM PROVISION, $14.4MM IN NET CHARGE-OFFS
LOS ANGELES – July 23, 2009 – Center Financial Corporation (NASDAQ: CLFC), the holding company of Center Bank, today reported financial results for its three- and six-month periods ended June 30, 2009, reflecting significantly higher levels of loan loss provisioning and net charge-offs to mitigate potential credit risks in the challenging economic environment.
“Over the course of 2009, it has become more apparent that the current economic crisis we are all experiencing may be even more severe and prolonged than widely anticipated,” said Jae Whan (J.W.) Yoo, president and chief executive officer. “In light of this outlook, we are taking an even more assertive stance on credit risk management and are preparing for potentially even greater stress on our portfolio. As part of this effort, we completed our annual internal portfolio analysis during the second quarter, after expanding the application of the stress test to 100% of our loan portfolio. Having the benefit of this recent review of our entire portfolio, we believe the second quarter’s provisioning, charge-offs and increased reserve levels help position Center Bank ahead of the curve to better manage through this credit cycle.”
2009 SECOND QUARTER SUMMARY:
• | Nonperforming assets decreased to $43.5 million at June 30 from $56.3 million at March 31, 2009 |
• | Nonperforming assets to total loans and OREO declined to 2.63% at June 30, 2009 from 3.38% at March 31, 2009 |
• | Net charge-offs increased significantly to $14.4 million for Q2, $17.3 million year-to-date |
• | Total delinquent loans including nonaccrual loans declined 17% from the preceding quarter to $68.7 million at June 30, 2009 |
• | Provision for loan losses of $29.8 million exceeded Q2 charge-offs by $15.4 million |
• | Allowance for loan losses to gross loans increased to 3.96% as of June 30, from 2.99% as of March 31, 2009 |
• | Deposits increased $190.9 million totaling $1.85 billion at June 30, 2009 |
• | Gross loans further reduced to $1.65 billion from $1.66 billion at March 31, 2009 |
• | 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 38 basis points to 2.96% from 3.34% for Q1 2009 |
• | Company remains strongly capitalized with total risk-based capital ratio of 12.76% at June 30, 2009 |
• | Tangible common equity to total assets equals 6.48% at June 30, 2009 |
ASSET QUALITY
Nonperforming assets as of June 30, 2009 declined to $43.5 million from $56.3 million at March 31, 2009. This reflects reductions of $14.4 million in commercial real estate loans and $5.0 million in commercial business loans due to charge-offs and the sales of four nonaccrual loans, partially offset by additions of $4.6 million in other real
(more)
Center Financial Corporation
2-2-2
estate owned (OREO), $1.5 million in construction real estate loans and $473,000 in consumer loans. Total nonperforming assets as a percentage of gross loans and OREO improved to 2.63% as of June 30, 2009 from 3.38% at March 31, 2009.
Net charge-offs during the 2009 second quarter totaled $14.4 million, increasing year-to-date net charge-offs to $17.3 million. As a percentage of average loans, net charge-offs equaled 1.03% for the six months ended June 30, 2009, versus 0.17% for the comparable prior-year period.
Considering the comprehensive analysis of Center Financial’s total loan portfolio and accounting for directional consistency with respect to recent asset quality trends, the company posted a $29.8 million provision for loan losses in the 2009 second quarter. This provision exceeded net charge-offs during the quarter by $15.4 million and boosted the total allowance for loan losses to $65.2 million as of June 30, 2009, equaling 3.96% of gross loans. The 2009 first quarter provision for loan losses was $14.5 million, with the allowance for loan losses totaling $49.8 million as of March 31, 2009 and representing 2.99% of gross loans.
BALANCE SHEET SUMMARY & CAPITAL
Gross loans at June 30, 2009 totaled $1.65 billion, reflecting a decrease of $16.9 million from March 31, 2009 and a decrease of $170.7 million from June 30, 2008. The reductions are attributed to lower levels of loan production, higher levels of loan pay-offs and charge-offs in 2009, and the company’s strategic sale of commercial real estate and SBA loans in 2008. Net loans as a percentage of total assets declined to 69.7% at June 30, 2009 from 77.2% at March 31, 2009 and 84.4% at June 30, 2008, principally due to higher levels of liquidity on balance sheet.
Total deposits increased sharply to $1.85 billion at June 30, 2009 from $1.66 billion at March 31, 2009 and at June 30, 2008. The company’s marketing campaign initiated late in the preceding first quarter and targeting the non-ethnic consumer base resulted in increased money market deposits and time deposits. At June 30, 2009, money market deposits increased to $530.4 million from $470.7 million at March 31, 2009. Time deposits at the close of the 2009 second quarter rose to $932.0 million from $834.5 million at March 31, 2009. Noninterest-bearing demand deposits grew to $314.6 million at June 30, 2009 from $306.1 million at the end of the preceding first quarter. Savings deposits also increased to $78.0 million at June 30, 2009 from $52.7 million at March 31, 2009. Reflecting the significant increase in deposits, the company’s loan-to-deposit ratio equaled 85.2% at June 30, 2009, compared with 96.9% at March 31, 2009.
The average cost of interest-bearing deposits was 2.68% for the three months ended June 30, 2009, versus 2.73% for the three months ended March 31, 2009 and 3.72% for the prior-year second quarter.
Total assets at June 30, 2009 increased to $2.27 billion from $2.06 billion at year-end 2008, reflecting higher levels of liquidity on the balance sheet, offset in part by a continued reduction in the company’s loan portfolio. Average interest-earning assets for the 2009 second quarter equaled $2.08 billion, compared with $2.00 billion for the year-ago second quarter.
Total shareholders’ equity at June 30, 2009 was $200.0 million, compared with $211.7 million at March 31, 2009 and $214.6 million at December 31, 2008. As of June 30, 2009, the company’s tangible book value and tangible common equity as a percentage of total assets equaled $8.75 and 6.48%, respectively. This compares with tangible book value of $9.53 per share and tangible common equity to total assets of 7.78% as of December 31, 2008. Center Financial remains strongly capitalized, exceeding all regulatory guidelines. As of June 30, 2009, the company’s total risk-based capital ratio equaled 12.76%, Tier 1 risk-based capital ratio was 11.49%, and Tier 1 leverage ratio was 9.38%.
(more)
Center Financial Corporation
3-3-3
2009 SECOND QUARTER OPERATIONAL HIGHLIGHTS
Net interest income before provision for loan losses declined to $15.3 million for the three months ended June 30, 2009 from $15.9 million in the immediately preceding 2009 first quarter and $19.0 million in the second quarter of 2008. The company attributed the decrease to a shift in the asset mix, the reversal of interest on non-accrual loans and market rate reductions. The average yield on loans for the 2009 second quarter increased to 6.12% from 5.91% for the preceding first quarter, but was down by 82 basis points from the prior-year second quarter. The average yields on the investment portfolio were 4.14% for the 2009 second quarter, 4.53% for the preceding first quarter and 4.85% for the second quarter of 2008.
The company’s net interest margin for the 2009 second quarter was 2.96%, compared with 3.34% in the preceding first quarter and 3.81% in the second 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 $3.5 million in the 2009 second quarter, versus $3.7 million in the preceding first quarter. In the year-ago second quarter, noninterest income amounted to $3.9 million, which included a $630,000 gain on sale of loans.
Total noninterest expense increased to $11.7 million in the 2009 second quarter from $10.1 million in the preceding first quarter, as the company’s operational efficiencies were more than offset by a special FDIC deposit insurance assessment of $1.0 million. Notwithstanding this assessment and a significant hike in the regular FDIC insurance premiums, total noninterest expense for the 2009 second quarter was lower when compared with $12.3 million in the prior-year period, primarily due to a 21% reduction in compensation expenses. The special assessment fee adversely impacted the company’s efficiency ratio for the 2009 second quarter, which increased to 62.48% from 51.67% in the preceding first quarter and 53.49% in the 2008 second quarter.
Including the $29.8 million provision for loan losses and an income tax benefit of $10.0 million, Center Financial posted a net loss of $12.8 million, equal to $0.81 per share, for the 2009 second quarter. This compares with a net loss of $2.7 million, or $0.19 per share, for the 2009 first quarter, after a provision for loan losses of $14.5 million and an income tax benefit of $2.2 million. In the 2008 second quarter, the company posted net income of $5.3 million, equal to $0.32 per diluted share, after a provision for loan losses of $2.0 million and an income tax provision of $3.3 million.
For the 2009 second quarter, Center Financial posted a loss on average assets and loss on average equity of 2.32% and 23.95%, respectively. This compares with loss on average assets of 0.54% and loss on average equity of 4.94% in the preceding first quarter. For the year-ago second quarter, return on average assets equaled 1.00% and return on average equity was 12.97%.
“We believe the actions taken this quarter move the company significantly forward in managing credit risk in the current environment and will enable our management and board to redirect more of our focus on building franchise value,” Yoo said.
(more)
Center Financial Corporation
4-4-4
Investor Conference Call
The company will host an investor conference call at 9 a.m. PDT (12 noon EDT) on Thursday, July 23, 2009 to review the financial results for its second quarter ended June 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, July 30, 2009 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering replay passcode 14006319.
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 $2.27 billion at June 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.
# # #
(tables follow)
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Unaudited)
(Dollars in thousands)
6/30/2009 | 12/31/2008 | |||||||
ASSETS |
| |||||||
Cash and due from banks | $ | 37,153 | $ | 45,129 | ||||
Federal funds sold | 263,240 | 50,435 | ||||||
Money market funds and interest-bearing deposits in other banks | 53,047 | 2,647 | ||||||
Cash and cash equivalents | 353,440 | 98,211 | ||||||
Securities available for sale, at fair value | 219,368 | 173,833 | ||||||
Securities held to maturity, at amortized cost (fair value of $0 as of June 30, 2009 and $8,879 as of December 31, 2008) | - | 8,861 | ||||||
Federal Home Loan Bank and Pacific Coast Bankers Bank stock, at cost | 15,673 | 15,673 | ||||||
Loans, net of allowance for loan losses of $65,197 as of June 30, 2009 and $38,172 as of December 31, 2008 | 1,568,298 | 1,669,476 | ||||||
Loans held for sale, at the lower of cost or fair value | 12,477 | 9,864 | ||||||
Premises and equipment, net | 14,095 | 14,739 | ||||||
Customers’ liability on acceptances | 2,927 | 4,503 | ||||||
Other real estate owned, net | 4,567 | - | ||||||
Accrued interest receivable | 7,668 | 7,477 | ||||||
Deferred income taxes, net | 27,472 | 19,855 | ||||||
Investments in affordable housing partnerships | 12,229 | 12,936 | ||||||
Cash surrender value of life insurance | 12,190 | 11,992 | ||||||
Income tax receivable | 9,221 | 2,327 | ||||||
Goodwill | 1,253 | 1,253 | ||||||
Intangible assets, net | 187 | 213 | ||||||
Other assets | 6,573 | 5,396 | ||||||
Total | $ | 2,267,638 | $ | 2,056,609 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
| |||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 314,621 | $ | 310,154 | ||||
Interest-bearing | 1,540,327 | 1,293,365 | ||||||
Total deposits | 1,854,948 | 1,603,519 | ||||||
Acceptances outstanding | 2,927 | 4,503 | ||||||
Accrued interest payable | 7,681 | 7,268 | ||||||
Other borrowed funds | 168,321 | 193,021 | ||||||
Long-term subordinated debentures | 18,557 | 18,557 | ||||||
Accrued expenses and other liabilities | 15,411 | 15,174 | ||||||
Total liabilities | 2,067,845 | 1,842,042 | ||||||
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 as of June 30, 2009 and December 31, 2008, respectively | 53,061 | 52,959 | ||||||
Common stock, no par value; authorized 40,000,000 shares; issued and outstanding, 16,789,080 shares (including 11,550 shares and 10,400 shares of unvested restricted stock) as of June 30, 2009 and December 31, 2008 | 74,732 | 74,254 | ||||||
Retained earnings | 68,866 | 85,846 | ||||||
Accumulated other comprehensive income, net of tax | 3,134 | 1,508 | ||||||
Total shareholders’ equity | 199,793 | 214,567 | ||||||
Total | $ | 2,267,638 | $ | 2,056,609 | ||||
Book value per common share | $ | 8.84 | $ | 9.62 | ||||
Tangible book value | $ | 8.75 | $ | 9.53 | ||||
Tangible common equity to total assets | 6.48 | % | 7.78 | % |
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||
6/30/09 | 3/31/09 | 6/30/08 | 6/30/09 | 6/30/08 | ||||||||||||||||
Interest and Dividend Income: | ||||||||||||||||||||
Interest and fees on loans | $ | 24,742 | $ | 24,311 | $ | 31,369 | $ | 49,053 | $ | 64,979 | ||||||||||
Interest on federal funds sold | 114 | 35 | 25 | 149 | 66 | |||||||||||||||
Interest on investment securities | 2,343 | 2,291 | 2,168 | 4,634 | 4,196 | |||||||||||||||
Total interest and dividend income | 27,199 | 26,637 | 33,562 | 53,836 | 69,241 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest on deposits | 9,913 | 8,725 | 12,157 | 18,637 | 26,194 | |||||||||||||||
Interest on borrowed funds | 1,782 | 1,818 | 2,188 | 3,600 | 4,905 | |||||||||||||||
Interest expense on trust preferred securities | 181 | 192 | 258 | 373 | 584 | |||||||||||||||
Total interest expense | 11,876 | 10,735 | 14,603 | 22,610 | 31,683 | |||||||||||||||
Net interest income before provision for loan losses | 15,323 | 15,902 | 18,959 | 31,226 | 37,558 | |||||||||||||||
Provision for loan losses | 29,835 | 14,451 | 2,047 | 44,287 | 4,209 | |||||||||||||||
Net interest (loss) income after provision for loan losses | (14,512 | ) | 1,451 | 16,912 | (13,061 | ) | 33,349 | |||||||||||||
Noninterest Income: | ||||||||||||||||||||
Customer service fees | 2,022 | 1,973 | 1,913 | 3,996 | 3,726 | |||||||||||||||
Fee income from trade finance transactions | 587 | 548 | 672 | 1,136 | 1,273 | |||||||||||||||
Wire transfer fees | 279 | 267 | 293 | 546 | 553 | |||||||||||||||
Gain on sale of loans | - | - | 630 | - | 960 | |||||||||||||||
Net loss on sale of securities available for sale | - | (49 | ) | - | (49 | ) | - | |||||||||||||
Loan service fees | 185 | 275 | 48 | 459 | 301 | |||||||||||||||
Other income | 401 | 724 | 387 | 1,124 | 770 | |||||||||||||||
Total noninterest income | 3,474 | 3,738 | 3,943 | 7,212 | 7,583 | |||||||||||||||
Noninterest Expense: | ||||||||||||||||||||
Salaries and employee benefits | 4,684 | 4,289 | 5,924 | 8,973 | 13,044 | |||||||||||||||
Occupancy | 1,248 | 1,182 | 1,119 | 2,430 | 2,160 | |||||||||||||||
Furniture, fixtures and equipment | 517 | 528 | 500 | 1,045 | 992 | |||||||||||||||
Data processing | 522 | 595 | 577 | 1,117 | 1,099 | |||||||||||||||
Legal fees | 408 | 243 | 971 | 650 | 1,601 | |||||||||||||||
Accounting and other professional fees | 352 | 410 | 381 | 762 | 718 | |||||||||||||||
Business promotion and advertising | 344 | 338 | 494 | 682 | 956 | |||||||||||||||
Stationery and supplies | 105 | 109 | 157 | 214 | 288 | |||||||||||||||
Telecommunications | 152 | 169 | 179 | 321 | 348 | |||||||||||||||
Postage and courier service | 47 | 146 | 191 | 193 | 392 | |||||||||||||||
Security service | 261 | 245 | 294 | 506 | 568 | |||||||||||||||
Regulatory assessment | 1,642 | 592 | 352 | 2,235 | 640 | |||||||||||||||
Other operating expenses | 1,463 | 1,302 | 1,112 | 2,765 | 2,682 | |||||||||||||||
Total noninterest expense | 11,745 | 10,148 | 12,251 | 21,893 | 25,488 | |||||||||||||||
(Loss) income before income tax (benefit) provision | (22,783 | ) | (4,959 | ) | 8,604 | (27,742 | ) | 15,444 | ||||||||||||
Income tax (benefit) provision | (9,996 | ) | (2,233 | ) | 3,325 | (12,229 | ) | 5,945 | ||||||||||||
Net (loss) income | (12,787 | ) | (2,726 | ) | 5,279 | (15,513 | ) | 9,499 | ||||||||||||
Preferred stock dividends and accretion of preferred stock discount | (739 | ) | (731 | ) | - | (1,470 | ) | - | ||||||||||||
Net (loss) income available to common shareholders | (13,526 | ) | (3,457 | ) | 5,279 | (16,983 | ) | 9,499 | ||||||||||||
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale securities, net of income tax (expense) benefit of ($1,644), $1,532, ($1,845) and $975 | 2,270 | 278 | (2,115 | ) | 1,226 | (1,346 | ) | |||||||||||||
Comprehensive (loss) income | $ | (10,517 | ) | $ | (2,448 | ) | $ | 3,164 | $ | (14,287 | ) | $ | 8,153 | |||||||
EARNINGS PER SHARE: | ||||||||||||||||||||
Basic | $ | (0.81 | ) | $ | (0.21 | ) | $ | 0.32 | $ | (1.01 | ) | $ | 0.58 | |||||||
Diluted | $ | (0.81 | ) | $ | (0.21 | ) | $ | 0.32 | $ | (1.01 | ) | $ | 0.58 | |||||||
Weighted average shares outstanding - basic | 16,789,080 | 16,789,080 | 16,367,475 | 16,789,080 | 16,367,608 | |||||||||||||||
Weighted average shares outstanding - diluted | 16,789,080 | 16,789,080 | 16,399,197 | 16,789,080 | 16,401,955 | |||||||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA
(Unaudited) (Dollars in thousands)
Three Months Ended | ||||||||||||||||||
6/30/09 | 3/31/09 | 6/30/08 | ||||||||||||||||
Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | |||||||||||||
Assets: | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans | $ | 1,622,366 | 6.12 | % | $ | 1,668,873 | 5.91 | % | $ | 1,816,960 | 6.94 | % | ||||||
Federal funds sold | 227,678 | 0.20 | 56,598 | 0.25 | 4,745 | 2.12 | ||||||||||||
Investments | 227,014 | 4.14 | 205,180 | 4.53 | 179,755 | 4.85 | ||||||||||||
Total interest-earning assets | 2,077,058 | 5.25 | 1,930,651 | 5.60 | 2,001,460 | 6.74 | ||||||||||||
Noninterest-earning assets: | ||||||||||||||||||
Cash and due from banks | 53,934 | 41,163 | 56,875 | |||||||||||||||
Bank premises and equipment, net | 14,382 | 14,750 | 14,526 | |||||||||||||||
Customers' acceptances outstanding | 3,073 | 3,851 | 5,411 | |||||||||||||||
Accrued interest receivables | 7,037 | 6,853 | 7,499 | |||||||||||||||
Other assets | 53,653 | 45,940 | 37,762 | |||||||||||||||
Total noninterest-earning assets | 132,079 | 112,557 | 122,073 | |||||||||||||||
Total assets | $ | 2,209,137 | $ | 2,043,208 | $ | 2,123,533 | ||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Money market and NOW accounts | $ | 492,730 | 2.09 | % | $ | 452,204 | 1.99 | % | $ | 358,778 | 2.89 | % | ||||||
Savings | 63,569 | 3.48 | 51,343 | 3.56 | 54,429 | 3.35 | ||||||||||||
Time certificates of deposit over $100,000 | 582,390 | 2.91 | 484,393 | 3.08 | 697,414 | 4.07 | ||||||||||||
Other time certificates of deposit | 344,761 | 2.99 | 308,618 | 3.13 | 204,480 | 4.06 | ||||||||||||
1,483,450 | 2.68 | 1,296,558 | 2.73 | 1,315,101 | 3.72 | |||||||||||||
Other borrowed funds | 168,147 | 4.25 | 176,864 | 4.17 | 244,631 | 3.60 | ||||||||||||
Long-term subordinated debentures | 18,557 | 3.91 | 18,557 | 4.20 | 18,557 | 5.59 | ||||||||||||
Total interest-bearing liabilities | 1,670,154 | 2.85 | 1,491,979 | 2.92 | 1,578,289 | 3.72 | ||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||
Demand deposits | 304,931 | 305,690 | 356,309 | |||||||||||||||
Total funding liabilities | 1,975,085 | 2.41 | % | 1,797,669 | 2.42 | % | 1,934,598 | 3.04 | % | |||||||||
Other liabilities | 19,937 | 21,799 | 25,262 | |||||||||||||||
Total noninterest-bearing liabilities | 324,868 | 327,489 | 381,571 | |||||||||||||||
Shareholders' equity | 214,115 | 223,740 | 163,673 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 2,209,137 | $ | 2,043,208 | $ | 2,123,533 | ||||||||||||
Net interest income | ||||||||||||||||||
Cost of deposits | 2.22 | % | 2.21 | % | 2.93 | % | ||||||||||||
Net interest spread | 2.40 | % | 2.68 | % | 3.02 | % | ||||||||||||
Net interest margin | 2.96 | % | 3.34 | % | 3.81 | % | ||||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA
(Unaudited) (Dollars in thousands)
Six Months Ended June 30, | ||||||||||||
2009 | 2008 | |||||||||||
Average Balance | Rate/ Yield | Average Balance | Rate/ Yield | |||||||||
Assets: | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans | $ | 1,645,491 | 6.01 | % | $ | 1,816,817 | 7.19 | % | ||||
Federal funds sold | 142,610 | 0.21 | 4,748 | 2.80 | ||||||||
Investments | 216,157 | 4.32 | 171,359 | 4.92 | ||||||||
Total interest-earning assets | 2,004,258 | 5.42 | 1,992,924 | 6.99 | ||||||||
Noninterest-earning assets: | ||||||||||||
Cash and due from banks | 47,584 | 58,432 | ||||||||||
Bank premises and equipment, net | 14,565 | 14,257 | ||||||||||
Customers' acceptances outstanding | 3,460 | 4,400 | ||||||||||
Accrued interest receivables | 6,946 | 7,849 | ||||||||||
Other assets | 49,818 | 38,210 | ||||||||||
Total noninterest-earning assets | 122,373 | 123,148 | ||||||||||
Total assets | $ | 2,126,631 | $ | 2,116,072 | ||||||||
Liabilities and Shareholders' Equity: | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Money market and NOW accounts | $ | 472,579 | 2.05 | % | $ | 328,173 | 3.23 | % | ||||
Savings | 57,490 | 3.52 | 54,129 | 3.34 | ||||||||
Time certificates of deposit over $100,000 | 533,662 | 2.98 | 710,889 | 4.41 | ||||||||
Other time certificates of deposit | 326,789 | 3.05 | 202,905 | 4.36 | ||||||||
1,390,520 | 2.70 | 1,296,096 | 4.06 | |||||||||
Other borrowed funds | 172,481 | 4.21 | 260,884 | 3.78 | ||||||||
Long-term subordinated debentures | 18,557 | 4.05 | 18,557 | 6.33 | ||||||||
Total interest-bearing liabilities | 1,581,558 | 2.88 | 1,575,537 | 4.04 | ||||||||
Noninterest-bearing liabilities: | ||||||||||||
Demand deposits | 305,308 | 353,708 | ||||||||||
Total funding liabilities | 1,886,866 | 2.42 | % | 1,929,245 | 3.30 | % | ||||||
Other liabilities | 20,864 | 24,176 | ||||||||||
Total noninterest-bearing liabilities | 326,172 | 377,884 | ||||||||||
Shareholders' equity | 218,901 | 162,651 | ||||||||||
Total liabilities and shareholders' equity | $ | 2,126,631 | $ | 2,116,072 | ||||||||
Net interest income | ||||||||||||
Cost of deposits | 2.22 | % | 3.19 | % | ||||||||
Net interest spread | 2.53 | % | 2.94 | % | ||||||||
Net interest margin | 3.14 | % | 3.79 | % | ||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA
(Unaudited) (Dollars in thousands)
As of the Dates Indicated | |||||||||||||||
6/30/09 | 3/31/09 | 12/31/08 | 9/30/08 | 6/30/08 | |||||||||||
Loans | |||||||||||||||
Real Estate: | |||||||||||||||
Construction | $ | 37,224 | $ | 53,072 | $ | 61,983 | $ | 62,296 | $ | 62,072 | |||||
Commercial | 1,104,496 | 1,131,682 | 1,134,793 | 1,157,286 | 1,191,097 | ||||||||||
Commercial | 320,005 | 313,065 | 334,350 | 336,929 | 352,220 | ||||||||||
Trade Finance | 52,000 | 48,813 | 63,479 | 70,395 | 81,399 | ||||||||||
SBA | 38,401 | 37,962 | 37,027 | 38,069 | 39,310 | ||||||||||
Consumer and other | 95,417 | 79,868 | 88,423 | 93,053 | 92,157 | ||||||||||
Total Gross Loans | 1,647,543 | 1,664,462 | 1,720,055 | 1,758,028 | 1,818,255 | ||||||||||
Less: | |||||||||||||||
Allowance for Losses | 65,197 | 49,778 | 38,172 | 21,485 | 21,499 | ||||||||||
Deferred Loan Fees | 555 | 1,188 | 1,359 | 1,488 | 1,688 | ||||||||||
Discount on SBA Loans Retained | 1,016 | 1,102 | 1,184 | 1,284 | 1,296 | ||||||||||
Total Net Loans and Loans Held for Sale | $ | 1,580,775 | $ | 1,612,394 | $ | 1,679,340 | $ | 1,733,771 | $ | 1,793,772 | |||||
As a percentage of total gross loans: | |||||||||||||||
Real estate: | |||||||||||||||
Construction | 2.3% | 3.2% | 3.6% | 3.5% | 3.4% | ||||||||||
Commercial | 67.0% | 68.0% | 66.0% | 65.8% | 65.5% | ||||||||||
Commercial | 19.4% | 18.8% | 19.4% | 19.2% | 19.4% | ||||||||||
Trade finance | 3.2% | 2.9% | 3.7% | 4.0% | 4.5% | ||||||||||
SBA | 2.3% | 2.3% | 2.2% | 2.2% | 2.2% | ||||||||||
Consumer | 5.8% | 4.8% | 5.1% | 5.3% | 5.0% | ||||||||||
Total gross loans | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
As of the Dates Indicated | |||||||||||||||
6/30/09 | 3/31/09 | 12/31/08 | 9/30/08 | 6/30/08 | |||||||||||
Deposits | |||||||||||||||
Demand deposits (noninterest-bearing) | $ | 314,621 | $ | 306,112 | $ | 310,154 | $ | 367,171 | $ | 378,835 | |||||
Money market accounts and NOW | 530,410 | 470,741 | 447,275 | 425,156 | 375,606 | ||||||||||
Savings | 77,958 | 52,683 | 52,692 | 54,520 | 55,281 | ||||||||||
922,989 | 829,536 | 810,121 | 846,847 | 809,722 | |||||||||||
Time deposits | |||||||||||||||
Less than $100,000 | 335,440 | 321,456 | 312,136 | 218,498 | 191,310 | ||||||||||
$100,000 or more | 596,519 | 513,076 | 481,262 | 553,931 | 657,658 | ||||||||||
Total deposits | $ | 1,854,948 | $ | 1,664,068 | $ | 1,603,519 | $ | 1,619,276 | $ | 1,658,690 | |||||
As a percentage of total deposits: | |||||||||||||||
Demand deposits (noninterest-bearing) | 17.0% | 18.4% | 19.3% | 22.7% | 22.8% | ||||||||||
Money market accounts and NOW | 28.6% | 28.3% | 27.9% | 26.3% | 22.6% | ||||||||||
Savings | 4.2% | 3.2% | 3.3% | 3.3% | 3.4% | ||||||||||
49.8% | 49.9% | 50.5% | 52.3% | 48.8% | |||||||||||
Time deposits | |||||||||||||||
Less than $100,000 | 18.1% | 19.3% | 19.5% | 13.5% | 11.5% | ||||||||||
$100,000 or more | 32.1% | 30.8% | 30.0% | 34.2% | 39.7% | ||||||||||
Total deposits | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA(Unaudited)
(Dollars in thousands)
June 30, 2009 | March 31, 2009 | December 31, 2008 | June 30, 2008 | |||||||||||||
Nonperforming loans: | ||||||||||||||||
Construction Real Estate | $ | 16,973 | $ | 15,451 | $ | 1,951 | $ | 2,152 | ||||||||
Commercial Real Estate | 4,516 | 18,870 | 13,128 | - | ||||||||||||
Commercial | 13,577 | 18,582 | 2,272 | 1,434 | ||||||||||||
Consumer | 889 | 416 | 369 | 380 | ||||||||||||
Trade Finance | 1,196 | 1,196 | 1,196 | 2,276 | ||||||||||||
SBA | 1,774 | 1,774 | 1,538 | 2,454 | ||||||||||||
Total nonperforming loans | 38,925 | 56,289 | 20,454 | 8,696 | ||||||||||||
Other real estate owned | 4,567 | - | - | - | ||||||||||||
Total nonperforming assets | 43,492 | 56,289 | 20,454 | 8,696 | ||||||||||||
Guaranteed portion of nonperforming loans with SBA guarantee | 2,448 | 2,408 | 2,110 | 2,755 | ||||||||||||
Total nonperforming assets, net of SBA guarantee | $ | 41,044 | $ | 53,881 | $ | 18,344 | $ | 5,941 | ||||||||
Nonperforming loans as a percent of total gross loans | 2.36 | % | 3.38 | % | 1.19 | % | 0.48 | % | ||||||||
Nonperforming assets as a percent of total loans and other real estate owned | 2.63 | % | 3.38 | % | 1.19 | % | 0.48 | % | ||||||||
Delinquent loans 30-89 days past due | $ | 29,740 | $ | 26,931 | $ | 16,737 | $ | 2,934 | ||||||||
Total nonperforming loans | 38,925 | 56,289 | 20,454 | 8,696 | ||||||||||||
Total delinquent loans | $ | 68,665 | $ | 83,220 | $ | 37,190 | $ | 11,630 | ||||||||
Six Months Ended June 30, 2009 | Three Months Ended March 31, 2009 | Year Ended December 31, 2008 | Six Months Ended June 30, 2008 | |||||||||||||
Balances | ||||||||||||||||
Average total loans outstanding during the period | $ | 1,682,918 | $ | 1,678,518 | $ | 1,800,972 | $ | 1,838,280 | ||||||||
Total loans outstanding at end of period 1 | $ | 1,645,972 | $ | 1,662,172 | $ | 1,717,511 | $ | 1,815,271 | ||||||||
Allowance for Loan Losses: | ||||||||||||||||
Balance at beginning of period | $ | 38,172 | $ | 38,172 | $ | 20,477 | $ | 20,477 | ||||||||
Charge-offs: | ||||||||||||||||
Construction Real Estate | 2,727 | 931 | 402 | 201 | ||||||||||||
Commercial Real Estate | 4,448 | 70 | 319 | 319 | ||||||||||||
Commercial | 8,780 | 1,236 | 4,403 | 2,257 | ||||||||||||
Consumer | 1,104 | 605 | 2,040 | 472 | ||||||||||||
SBA | 417 | 129 | 581 | 144 | ||||||||||||
Trade Finance | - | 1,144 | - | |||||||||||||
Total charge-offs | 17,476 | 2,971 | 8,889 | 3,393 | ||||||||||||
Recoveries | ||||||||||||||||
Commercial | 43 | 25 | 128 | 74 | ||||||||||||
Consumer | 140 | 78 | 131 | 56 | ||||||||||||
SBA | 30 | 22 | 135 | 76 | ||||||||||||
Trade Finance | 1 | 1 | 12 | - | ||||||||||||
Total recoveries | 214 | 126 | 406 | 206 | ||||||||||||
Net loan charge-offs | 17,262 | 2,845 | 8,483 | 3,187 | ||||||||||||
Provision for loan losses | 44,287 | 14,451 | 26,178 | 4,209 | ||||||||||||
Balance at end of period | $ | 65,197 | $ | 49,778 | $ | 38,172 | $ | 21,499 | ||||||||
Ratios: | ||||||||||||||||
Net loan charge-offs to average loans | 1.03 | % | 0.17 | % | 0.47 | % | 0.17 | % | ||||||||
Provision for loan losses to average total loans | 2.63 | 0.86 | 1.45 | 0.23 | ||||||||||||
Allowance for loan losses to gross loans at end of period | 3.96 | 2.99 | 2.22 | 1.18 | ||||||||||||
Allowance for loan losses to total nonperforming loans | 168 | 88 | 187 | 247 | ||||||||||||
Net loan charge-offs to allowance for loan losses at end of period | 26.48 | 5.72 | 22.22 | 14.82 | ||||||||||||
Net loan charge-offs to provision for loan losses | 38.98 | 19.69 | 32.41 | 75.72 |
1 Net of deferred loan fees and discount on SBA loans sold
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
6/30/09 | 3/31/09 | 6/30/08 | 6/30/09 | 6/30/08 | |||||||||||
Performance ratios: | |||||||||||||||
(Loss) return on average assets | (2.32 | ) % | (0.54 | ) % | 1.00 | % | (1.47 | ) % | 0.90 | % | |||||
(Loss) return on average equity | (23.95 | ) | (4.94 | ) | 12.97 | (14.29 | ) | 11.74 | |||||||
Efficiency ratio | 62.48 | 51.67 | 53.49 | 56.96 | 56.46 | ||||||||||
Net loans to total deposits at period end | 85.22 | 96.89 | 108.14 | 85.22 | 108.10 | ||||||||||
Net loans to total assets at period end | 69.71 | 77.19 | 84.37 | 69.71 | 84.37 |
As of the Dates Indicated | |||||||||
6/30/09 | 3/31/09 | 6/30/08 | |||||||
Capital ratios: | |||||||||
Leverage capital ratio | |||||||||
Consolidated Company | 9.38 | % | 11.04 | % | 8.51 | % | |||
Center Bank | 8.88 | 10.41 | 8.46 | ||||||
Tier 1 risk-based capital ratio | |||||||||
Consolidated Company | 11.49 | 12.53 | 9.49 | ||||||
Center Bank | 10.84 | 11.81 | 9.43 | ||||||
Total risk-based capital ratio | |||||||||
Consolidated Company | 12.76 | 13.80 | 10.63 | ||||||
Center Bank | 12.11 | 13.08 | 10.57 |