[2] Nara Bank Posts Record Third Quarter Earnings, Up 166%; Assets Grow 58% and Deposits Increase 60% Year Over Year.Business Editors LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Calif.--(BUSINESS WIRE)--Oct. 30, 2000 Nara Bank, N.A. (Nasdaq:NARA) today reported internal growth and expansion into the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of markets drove third quarter results to record levels. Net income nearly tripled to $2.8 million, or $.56 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in the third quarter ended September September: see month. 30, 2000, compared to $1.0 million, or $.21 per diluted share, in the like quarter a year ago. -- Revenues (net interest income plus non-interest income) increased 62% to $10.5 million -- Efficiency ratio improved to 59.5%, 311 basis points ahead of the same 1999 quarter -- Return on average equity reached 34.2%; compared to 14.9% for last year's third quarter -- Return on average assets doubled to 2.4%, compared to last year -- Net loans increased 57.2% to $339.5 million, compared to $216 million at September 30, 1999 -- Total assets expanded 58% to $528.7 million, over $334.7 million at last year's third quarter end -- Deposits grew 59.8% to $472.9 million, compared to $295.9 million at September 30, 1999 Net interest income before loan loss provision increased 54% to $7.3 million, compared to $4.7 million in the third quarter of 1999. The third quarter net interest margin increased 27 basis points over the same quarter last year to 6.44%. Net income for the nine months ended September 30, 2000 nearly tripled to $8.1 million, or $1.62 per diluted share, compared to $2.7 million, or $.55 per diluted share, in the like period a year ago. "This has been an extraordinary year for Nara Bank as we expanded our presence in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). and entered into New York. We started this year with the acquisition of Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. First Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. in February February: see month. and just this month opened our first branch in Oakland, California “Oakland” redirects here. For other uses, see Oakland (disambiguation). Oakland (IPA: /ˈoʊklənd/), founded in 1852, is the eighth-largest city in the U.S. ," said Benjamin Hong n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. , President and Chief Executive Officer. "Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , throughout our aggressive expansion, we have been able to steadily grow earnings." Nara's loan portfolio increased 44% since December December: see month. 31, 1999, and 57% over September 30, 1999 totals. "The focus on commercial lending and our strong reputation within the Korean Korean, language of uncertain ancestry. It is thought by some scholars to be akin to Japanese, by others to be a member of the Altaic subfamily of the Ural-Altaic family of languages (see Uralic and Altaic languages), and by still others to be unrelated to any known business community not only assisted in our portfolio growth, but also supported the 27 basis point growth in the net interest margin for the third quarter compared to the same quarter last year. We pride ourselves on the strategic management of our loan portfolio, not only on its overall growth but also on adequately providing for any potential problem loans from acquisitions," Hong continued. On September 30th, the allowance for loan losses as a percentage of gross loans equaled 2.9%, up from 1.4% at the same time last year. Nara acquired $7.9 million in allowance for loan losses when it purchased Korea First Bank of New York in February. Non-performing assets at September 30, 2000 were $3.6 million or 0.68% of total assets. Based on the high level of reserves, Nara Bank added $400,000 to loan loss reserves in the third quarter. Since the beginning of this year, Nara Bank has charged off $5.26 million of loans, a substantial portion of which was related to the acquisition of the Korea First Bank. The bank's net charge off was $1.7 million for the year to date, compared to $1.8 million for the same period of 1999. "Our customer service policy contributes not only to our loan growth, but also to the strong deposit growth that Nara Bank is achieving throughout our branch network," added Hong. Deposits kept pace with NARA's exceptional asset growth, increasing 60% over the past twelve months. Reflecting the focus on controlling costs with an expanded branch network, Nara Bank achieved a 59.5% efficiency ratio significantly improved from the 62.6% generated in the like quarter last year. Non-interest income was $3.2 million for the third quarter of 2000 or 82% ahead of the $1.7 million in the year ago quarter. For the first nine months of 2000, non-interest income increased 66% to $9.7 million, compared to $5.9 million in the like period a year ago. This growth reflects the generation of higher service fees associated with the bank's growth in deposit relationships. Non-interest expense was $6.2 million during the third quarter, compared to $4.1 million in the like quarter a year ago. At quarter end, Nara Bank's portfolio consisted of 57.5% commercial loans, 17.1% SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government loans, 9.0% trade finance related lending, and 16.4% consumer and other loans. The bank had net loans of $339.5 million and total deposits of $472.9 million at September 30, 2000. Nara Bank's assets totaled $528.7 million at September 30, 2000, up 58% from September 30 a year ago. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased to $41.7 million from $25.6 million one year ago. Return on average assets was 2.4%, significantly higher than the 1.2% at September 30, 1999, reflecting the bank's rapid asset growth. Book value equaled $7.64 per share and the average equity to average asset ratio was 6.99%. Headquartered in Los Angeles, Nara Bank is the third largest Korean bank in southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, with eight full service branches, four mini See minicomputer. branches and two loan production offices. In addition to its Los Angeles branches, Nara Bank's branches and loan production offices are located in Silicon Valley, Oakland Oakland, city (1990 pop. 372,242), seat of Alameda co., W Calif., on the eastern side of San Francisco Bay; inc. 1852. Together with San Francisco and San Jose, the city comprises the fourth largest metropolitan area in the United States. , New York, Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. and Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. . The bank specializes in commercial, SBA, trade finance, and consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. and leasing. Nara's shares closed the trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. on October October: see month. 27, 2000 at $13.75 per share.
FINANCIAL HIGHLIGHTS
(unaudited) ($ in thousands, except per share data)
INCOME STATEMENT Third Quarters ended Nine Months ended
September 30, September 30,
2000 1999 2000 1999
Interest Income $ 11,100 $ 6,779 $ 29,045 $ 17,841
Interest Expense 3,795 2,038 9,781 5,636
Net Interest Income 7,305 4,741 19,264 12,205
Provision for Loan Loss 400 615 400 1,895
Net Interest Income
after Provision for
Loan Loss 6,905 4,126 18,864 10,310
Non-Interest Income 3,168 1,739 9,721 5,862
Non-Interest Expense 6,227 4,055 16,371 11,596
Income before Income
Taxes 3,846 1,810 12,214 4,576
Provision for Income
Taxes (1,053) (761) (4,083) (1,837)
Net Income $ 2,793 $ 1,049 $ 8,131 $ 2,739
Earnings per Share
Basic $ 0.58 $ 0.22 $ 1.68 $ 0.58
Diluted $ 0.56 $ 0.21 $ 1.62 $ 0.55
Weighted Average Shares
Outstanding
Basic 4,831 4,734 4,831 4,734
Diluted 5,032 4,945 5,032 4,945
Efficiency Ratio
(Non-interest Expense/
(Net Interest
Income+Non-interest
Income)) 59.46% 62.57% 56.48% 64.18%
Non-interest
Expense/Average Assets 1.37% 1.27% 3.61% 3.86%
BALANCE SHEET Sept 30, December 31, Sept 30,
2000 1999 1999
Total Assets $ 528,658 $ 358,898 $ 334,693
Securities Held to
Maturity $ 17,626 $ 16,047 $ 17,674
Securities Available
for Sale (Fair Value) $ 34,735 $ 17,284 $ 12,239
Loans Receivable, Net $ 339,506 $ 235,287 $ 215,991
Costs in Excess of Net
Assets Acquired
(Including Goodwill
and Other Intangibles) $ 1,597 $ 1,748 $ 1,798
Deposits $ 472,856 $ 319,868 $ 295,857
Total Liabilities $ 486,919 $ 332,172 $ 309,068
Equity $ 41,739 $ 26,726 $ 25,625
Book Value per Share $ 7.64 $ 6.07 $ 6.05
Tier 1 Leverage Capital
Ratio 7.98% 7.24% 7.43%
Ratios Annualized
Interest Rate Yield on
Interest-earning Assets 9.71% 9.08% 9.02%
Interest Rate Expense
on Interest-bearing
Liabilities 3.17% 2.81% 2.78%
Net Interest Margin 6.44% 6.19% 6.17%
Return on Average
Assets 2.39% 1.27% 1.22%
Return on Average
Equity 34.22% 15.92% 14.95%
Averate Equity/Average
Assets 6.99% 7.98% 8.13%
LOANS
(unaudited)($ in thousands,except per share data)
Nine Months ended September 30,
2000 1999
LOAN PORTFOLIO ANALYSIS:
Total Commercial Loans $ 201,104 $ 124,975
Total Trade Finance 31,463 22,814
Total SBA Loans 59,976 32,029
Total Consumer and Other Loans 57,407 39,331
Total Loans Receivable $ 349,950 $ 219,149
ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period $ 3,644 $ 2,961
Provision for Loan Losses 400 1,895
Recoveries 3,521 179
Charge Offs (5,259) (1,964)
Adjustment from KEB, NY Acquisition 7,878 -
Balance at End of Period $ 10,184 $ 3,071
Loan Loss Allowance/ Gross Loans 2.91% 1.40%
Loan Loss Allowance/ Non-Performing
Loans 298% 180%
NON-PERFORMING ASSETS:
Delinquent Loans on
Non-Accrual Status $ 2,366 $ 1,644
Delinquent Loans on Accural Status 1,049 58
Total Non-Performing Loans $ 3,415 $ 1,702
OREO 195 44
Total Non-Performing Assets $ 3,610 $ 1,746
Total Non-Performing
Assets/ Total Assets 0.68% 0.52%
OPERATING PERFORMANCE
Average Interest-Earning Assets $ 398,676 $ 261,277
Average Non-Interest
Earning Assets 54,806 39,129
Total Average Assets $ 453,482 $ 300,406
Average Interest-Bearing
Liabilities $ 261,694 $ 171,210
Average Non-Interest
Bearing Liabilities 160,103 104,766
Total Average Liabilities $ 421,797 $ 275,976
Average Equity 31,685 24,430
Total Average Liabilities and
Equity $ 453,482 $ 300,406
Statements concerning future performance, developments or events, concerning expectations for growth and any other guidance on future periods, constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These factors include but are not limited to: the effect of interest rate changes; competition in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. market for both deposits and loans; NARA's ability to efficiently incorporate acquisitions and new branch offices into its operations; and regional and general economic conditions. |
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