August 22, 2005
Mail Stop 4561
By U.S. Mail and facsimile to (213) 386-6774
Mr. Patrick Hartman
Chief Financial Officer
Center Financial Corporation
3435 Wilshire Blvd, Suite 700
Los Angeles, CA 90010
Re: Center Financial Corporation
Form 10-K filed March 31, 2005
Form 8-K filed August 9, 2005
File No. 0-50050
Dear Mr. Hartman:
We have reviewed your filings and have the following
comments.
We have limited our review to only the issues raised in our
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comments are inapplicable or a revision
is
unnecessary. Please be as detailed as necessary in your
explanation.
In our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Year Ended December 31, 2004:
Derivatives, page 64
1. In your Form 8-K filed on August 9, 2005 you have disclosed
that
your financial statements for the years ended December 31, 2004,
2003
and 2002 can no longer be relied upon because you had
inappropriately
applied the shortcut method of assessing hedge effectiveness for
certain hedging relationships that did not qualify for such
accounting.
* Please tell us whether such misstatements are the result of your
determination during the 4th quarter of 2004 that your interest
rate
swaps did not qualify for hedge accounting treatment because the
designated risk being hedged was not based on the benchmark
interest
rate and therefore did not qualify for shortcut accounting
treatment.
* Please tell us why you now believe that your application of the
shortcut method to these hedges was also inappropriate during the
years ended December 31, 2004, 2003 and 2002.
* Please tell us whether the restatement of your financial
statements
will reflect no hedge accounting or a change to the long-haul
method
of assessing effectiveness for these hedges.
2. Please tell us whether you entered into any other hedging
transactions besides the four interest rate swaps disclosed on
page
65 for which you applied hedge accounting under SFAS 133 during
any
of the periods presented.
Controls and Procedures, page 109
3. We note your statement that "even effective internal control
over
financial reporting, can provide only reasonable assurance with
respect to financial statement preparation." Please revise to
state
clearly, if true, that your disclosure controls and procedures are
designed to provide reasonable assurance of achieving their
objectives and that your principal executive officer and principal
financial officer concluded that your disclosure controls and
procedures are effective at the reasonable assurance level. In
the
alternative, remove the reference to the level of assurance of
your
disclosure controls and procedures. Please refer to Section
II.F.4
of Management`s Reports on Internal Control Over Financial
Reporting
and Certification of Disclosure in Exchange Act Periodic Reports,
SEC
Release No. 33-8238, available on our website at
<http://www.sec.gov/rules/final/33-8238.htm>.
Form 8-K filed August 9, 2005:
4. Please revise your Item 4.02 8-K to disclose whether your audit
committee has discussed with your independent accountant the
matters
disclosed in your filing as required by Item 4.02(a)(3).
5. We note your disclosure in your Form 8-K filed on August 9,
2005
that you intend to file restated financial statements. Please tell
us
when you will file your restated Form 10-K.
* * * * *
As appropriate, please amend your filings in response to
these
comments. You may wish to provide us with marked copies of the
amendment to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Angela Jackson, Staff Accountant, at (202)
551-
3426 or me at (202) 551-3494 if you have questions.
Sincerely,
Kevin W. Vaughn
Accounting Branch Chief
??
??
??
??
Mr. Patrick Hartman
Center Financial Corporation
Page 1