Center Financial Fourth Quarter Net Income Increases 37% to $2.5 Million or $0.34 Per Share and Full Year Earnings Increase to Record $1.32 Per Share.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Jan. 27, 2003 Center Financial Corporation (Nasdaq:CLFC CLFC Creating Lasting Family Connections (New Hampshire) CLFC Clear Lake Fencing Club (Texas) ), parent company of Center Bank, one of the premier community banks focused on the Korean-American niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. , today reported its 2002 net income increased 20% to a record $9.3 million or $1.32 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 fourth quarter, earnings increased 37% to $2.5 million or $0.34 per diluted share. Continued efforts to enhance asset quality through timely monitoring of credit, exceptional growth in core deposits and increased non-interest income, all contributed to the year's record earnings, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite an interest margin squeeze Squeeze 1. In financial terms, a period of time when borrowing is difficult. 2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "squeeze" on profit margins. due to successive rate cuts by the Federal Reserve. Highlights for the year include: -- 20% increase in net income to $9.3 million -- 40% increase in total assets to $819 million -- 40% increase in net loans to $521 million -- 38% increase in deposits to $727 million -- Reduced non-performing assets to 0.30% of total assets -- Non-interest income increased 29% or 22% excluding the one time gain of $738,000 on the sale of a branch facility following its strategic relocation to a more visible site -- Formation of holding company -- Listing on Nasdaq "2002 was a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. year for Center Financial and our shareholders, not only because of the year of record earnings, but also due to the success of a number of actions undertaken during the year," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Seon 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. Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness , President, and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "I am proud to report that the five new Center Bank branches opened during 2001 now are contributing to the Bank's bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. ." "Also we completed our reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. as a holding company and listed on Nasdaq during the fourth quarter of 2002. We enter the year 2003 in the strongest position ever to continue the successful development of our commercial banking franchise. The dedication of our employees is the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of Center Financial's growth, which also differentiates us from our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ," Kim added. "As has always been our practice, we worked diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d during the year to ensure that we maintain prudent, safe, and sound management practices to support the Company's expansion throughout a variety of economic and interest rate environments," Kim said. "The success of these actions was evident not only in generating the highest level of net income in our history in spite of the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. , but also in keeping the level of non-performing assets at a reasonable level, achieving a significant increase in non-interest income, and building a strong deposit mix. We also believe that this firm foundation will continue to enhance shareholder value in the coming year and beyond, as we further capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our low cost, stable deposit franchise and strong asset quality to become one of California's most dynamic commercial banking operations." Financial Summary Net income for 2002, increased 20% to a record $9.3 million compared to $7.8 million in 2001. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 17% to $1.32 compared to $1.13 the year before. Center Financial earned $2.5 million in the fourth quarter ended December December: see month. 31, 2002 up 37% compared to $1.8 million in the like quarter a year ago. Diluted earnings per share increased to $0.34 compared to $0.25 reported for the fourth quarter of 2001. "The basic reason for our increased earnings were both an increase in net interest income and the growth in non-interest income -- mostly due to the increase in earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin , and partially due to interest rate hedge we entered into in 2001 and 2002 to protect the bank's asset sensitivity against further declines in interest rates and the significant increase in non-interest income." For 2002, the Company achieved a return on average equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) of 16.27% and a return on average assets (ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). ) of 1.39%, compared to 16.33% and 1.52% for 2001. In the fourth quarter, Center Financial produced a 15.55% ROE and a 1.30% ROA compared to 14.08% and 1.27%, respectively, for the like quarter a year ago. Balance Sheet Summary Average earning assets for the fourth quarter of 2002 totaled $695.2 million, 36% greater than the same quarter a year ago, while average gross loans for the quarter were $492.5 million, 36% higher than the same quarter of the prior year. "Significantly, we generated strong loan growth during 2002 while at the same time strengthening our risk-based credit underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards," Kim commented. Primarily because of exceptional growth in core deposits, Center Financial's fourth quarter average deposits increased 33% to $668.2 million compared to $502.4 million in the fourth quarter a year ago. Deposits as of December 31, 2002 increased 38% to $727.0 million, compared to $525.4 million a year ago. Core deposits increased on average $89 million during 2002 compared to 2001. "Five branches opened during 2001 plus one new branch opened in 2002 attracted $89 million in average deposits for the year and had $149 million in deposits at December 31, 2002, " Kim added. The growth in core deposits, combined with a continued repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of term interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposits in this low interest rate environment, resulted in a decrease in the cost of deposits for the fourth quarter to 1.73%, 24% (56 basis points) below the 2.29% reported for the same quarter of 2001. The total cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. for the fourth quarter of 2002, including other interest-bearing liabilities, decreased 23% (53 basis points) to 1.76% compared to 2.29% in the same quarter a year ago. Deposit cost and cost of funding for the entire year of 2002 were 1.81% and 1.83%, respectively, a 40% decrease from 3.04% and 3.04% reported for the prior year. Management expects the cost of deposits and funds to remain stable throughout most of 2003 and move up slightly in the fourth quarter. As of December 31, 2002, total assets grew 40% to $818.6 million, compared to $586.7 million a year earlier. Net loans increased 40% to $521.2 million from $372.0 million a year ago. Total deposits increased 38% to $727.0 million, compared to $525.4 million as of December 31, 2001. Total 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. was $65.2 million, a 27% increase from $51.4 million at the end of 2001. Book value increased to $9.15 per share from $8.42 per share at December 31, 2001. Operating Results As a result of growth in earning assets, a decrease in deposit costs and increase in net interest income from interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , net interest income increased 17% to $7.0 million for the fourth quarter of 2002, compared to $6.0 million in the like quarter a year ago. For the full year, net interest income increased 18% to $26.5 million compared to $22.4 million in 2001. The interest margin for the quarter equaled 4.05% compared to 4.71% for the same quarter of 2001. The Company's net interest margin for 2002 was 4.31% compared to 4.86% in 2001. "We worked to manage interest rate risk in this unprecedented low interest rate environment by entering into several interest rate swap contracts to hedge some of our prime rate-based loan portfolio against declining rates, by paying prime rate and receiving a fixed rate. We anticipate that our margin will remain flat for 2003," Y. H. Kim, Chief Financial Officer added, "if the current interest rate environment sustains for the year." The yield on earning assets for the fourth quarter of 2002 was 5.78%, compared to 6.97% in the same quarter a year ago. The provision for loan losses for the quarter was $1.2 million, 140% above the $0.5 million provision for prior year period. Center Financial made a higher provision during the quarter as a prudent response to the significant growth in the Company's loan portfolio as well as in response to general economic uncertainty. For the full year, Center Financial added $2.1 million to its provision for loan losses, $900,000 or 75% above the $1.2 million added in 2001. Center Financial's non-interest income for the fourth quarter increased 38% to $4.2 million compared to $3.1 million in the same quarter of 2001. Core recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. non-interest income totaled $3.5 million, 14% greater than the $3.1 million earned in the same quarter a year ago. The growth in the core non-interest income resulted from increased service fee income from deposits and loans, primarily due to the branch network expansion. During the quarter, the Company sold one of its branch facilities with a gain of $738,000 in order to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. the branch to a better site with outstanding exposure to the community. For the twelve months ended December 31, 2002, non-interest income grew 29% to $13.8 million compared to $10.7 million a year earlier. Core recurring non-interest income totaled $13.0 million, 22% greater than the $10.7 million earned in 2001. The growth in the core non-interest income for the year resulted from a combination of gains on sale of the guaranteed portion of 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, service fees on transaction accounts and loan service fees resulting from increased loan production. From time to time, Center Financial sells for a gain the guaranteed portion of its SBA loans into the secondary market and continues to service the sold loans for a fee. Management anticipates that non-interest income will continue to make a greater contribution to overall earnings in 2003 as a result of a continued focus on fee generation and maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: the potential from the new banking relationships established at the branches opened during 2001 and 2002. "While new branches opened in the second quarter of 2001 are contributing to our growth, they have also increased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. such as compensation, occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy , furniture, fixtures and equipment Furniture, fixtures and equipment (or FF&E) is an accounting term used in valuing, selling, or liquidating a company or a building. FF&E are movable furniture, fixtures or other equipment that have no permanent connection to the structure of a building or utilities. , data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a and advertising. We also incurred additional expenses this past year for professional fees related to our reorganization as a holding company, SEC registration and Nasdaq listing," Paul Seon Hong Kim added. Also, business promotion and advertising increased primarily due to the Company's marketing and business referral program. Total operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. for the year increased 18% to $23.3 million, compared to $19.8 million for 2001. Total operating expenses for the fourth quarter grew 10% to $6.4 million, compared to $5.8 million for the same period last year. The efficiency ratio, which measures the ability to produce revenue per dollar of expense, improved 7.4 percent to 56.4% for the fourth quarter compared to 63.8% in the like quarter a year ago. The efficiency ratio for the year improved to 58.0% compared to 59.8% in 2001. Management expects that the efficiency ratio will improve further in 2003, as the new branches contribute more to the profitability of the Company. Asset Quality The level of non-performing assets as of December 31, 2002 totaled $2.4 million and represented 0.30% of total assets and 0.46% of gross loans and OREO, respectively. At December 31, 2001, non-performing assets totaled $2.1 million, or 0.36% of total assets and 0.56% of gross loans and OREO. Non-accrual loans slightly increased to 0.46% of total loans, or $2.4 million, from 0.39% or $1.5 million. Net charge-offs for the year totaled $837,000 or 0.19% of average loans, compared to $2.3 million, or 0.68% in the prior year. The allowance for loan losses totaled $6.8 million, or 1.28% of gross loans at December 31, 2002, and $5.5 million, or 1.47% of gross loans as of December 31, 2001, respectively. The allowance for loan losses to non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. at December 31, 2002 was 278.4%, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to last year's 259.5%. "During the year, we established a 'Credit Risk Monitoring' team to strengthen our loan portfolio monitoring and risk control. The careful monitoring by this team, as well as an overall stability in borrowers' financial condition, contributed to the decrease in net charge-offs and lower non-performing asset ratio," Paul Seon Hong Kim said. Capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. Center Financial remains "well-capitalized" under all regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. categories, with a Tier 1 risk based capital ratio of 10.40%, a total risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. of 11.52%, and a Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio of 9.48%. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. as of December 31, 2002 was $65.2 million, compared to $ 51.4 million a year ago. The increase of shareholders' equity was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to net income of $9.3 million for the year, the increase of capital by $2.8 million from the proceeds and income tax benefits of options exercised during the year, $1.7 million increase in the unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. from securities available for sale and the increase in the fair value of interest rate swaps for hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. purposes. Center Financial Corp. Center Financial Corp. is a publicly-owned company, whose stock is traded on the Nasdaq National Market under the symbol of "CLFC." Center Financial is a financial holding company formed in 2002 and is the parent company of Center Bank. Founded in 1986, Center Bank is a community bank offering a full-range A Full-range loudspeaker drive unit is defined as a driver which reproduces as much of the audible frequency range as possible, with high-fidelity, within the boundaries imposed by the physical limitations of the specific design. of 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. . Center Bank changed its name to Center Bank from 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). Center Bank in December 2002. It specializes in commercial and SBA loans and trade finance products for multi-ethnic Adj. 1. multi-ethnic - involving several ethnic groups multiethnic social - living together or enjoying life in communities or organized groups; "a human being is a social animal"; "mature social behavior" and small business customers. The Bank operates 12 branches throughout 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, and four Loan Production Offices located in Phoenix, 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. , Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. D.C. It is one of the largest financial institutions in the nation focusing on the Korean-American community. Further information about the Company can be found at www.centerbank.com. 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. Statements concerning future performance, events, expectations for growth and market forecasts, and any other guidance on future periods constitute forward-looking statements under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and are subject to a number of risks and uncertainties which might cause actual results to differ materially from stated expectations. Specific factors include, but are not limited to: the effect of interest rate and currency exchange fluctuations; competition in the financial services market for both deposits and loans; Center Financial's ability to efficiently incorporate acquisitions and de novo [Latin, Anew.] A second time; afresh. A trial or a hearing that is ordered by an appellate court that has reviewed the record of a hearing in a lower court and sent the matter back to the original court for a new trial, as if it had not been previously heard nor decided. branches into its operations; the ability of Center Financial and its subsidiaries to increase their customer base; and regional and general economic conditions. Additional information on these and other factors that could affect the Company's financial results are included the filings by the Company with the Securities and Exchange Commission. Forward-looking statements contained herein 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. For any question related to this report, please contact Y. H. Kim, SVP SVP S'il Vous Plaît (French: Please) SVP Senior Vice President SVP Schweizerische Volkspartei (Swiss People~s Party) SVP Society of Vertebrate Paleontology SVP Social Venture Partners SVP St Vincent de Paul & Chief Financial Officer at 213/251-2250.
CENTER FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)
12/31/2002 12/31/2001
-----------------------
ASSETS:
Cash and due from banks $ 38,878 $ 28,791
Federal funds sold 35,500 33,000
Money market funds and interest-bearing
deposits in other banks 40,000 20,400
-----------------------
Cash and cash equivalents 114,378 82,191
-----------------------
Interest-bearing deposits in other banks - 200
Securities available for sale, at fair value 140,998 94,520
Securities held to maturity, at amortized cost
(fair value of $16,289 as of December 31, 2002
and $15,224 as of December 31, 2001) 15,741 14,926
Federal Home Loan Bank and other equity stock,
at cost 817 162
Loans, net of allowance for loan losses of
$6,760 as of December 31, 2002 and $5,540 as
of December 31, 2001 508,967 372,044
Loans held for sale, at the lower of cost or
market 12,250 -
Premises and equipment, net 9,988 8,921
Customers' liability on acceptances 4,257 4,447
Other real estate owned, net - 674
Accrued interest receivable 3,269 2,750
Deferred income taxes, net 824 1,622
Investments in affordable housing partnerships 2,982 2,679
Other assets 4,154 1,537
-----------------------
TOTAL $818,625 $586,673
-----------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $207,093 $168,530
Interest-bearing 519,928 356,840
-----------------------
Total Deposits 727,021 525,370
-----------------------
Acceptances outstanding 4,257 4,447
Accrued interest payable 2,576 3,313
Federal Home Loan Bank borrowing 14,899 -
Other borrowed funds 2,666 324
Accrued expenses and other liabilities 2,000 1,828
-----------------------
Total liabilities 753,419 535,282
-----------------------
STOCKHOLDERS' EQUITY
Serial preferred stock, no par value;
authorized 10,000,000 shares;
issued and outstanding, none - -
Common stock, no par value; authorized
20,0000,000 shares; issued
and outstanding, 7,122,612 as of December 31,
2002 and 6,104,441 as of December 31, 2001 51,832 41,284
Retained earnings 11,703 10,098
Accumulated other comprehensive income, net of
tax 1,671 9
Total stockholders' equity 65,206 51,391
-----------------------
TOTAL $818,625 $586,673
=======================
Book value per share $9.15 $8.42
Number of common shares outstanding at period
end 7,122,612 6,104,441
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(In thousands, except share and per share data)
Quarter ended Year ended
December 31, December 31,
2002 2001 2002 2001
----------------------------------------------------------------------
Interest and dividend income $10,087 $8,938 $37,507 $36,123
Interest expense 3,038 2,908 11,044 13,749
----------------------------------------
Net interest income before
provision for loan losses 7,049 6,030 26,463 22,374
Provision for loan losses 1,200 500 2,100 1,200
----------------------------------------
Net interest income after
provision for loan losses 5,849 5,530 24,363 21,174
Non-interest income
Customer service fees 1,706 1,433 6,147 5,517
Fee income from trade finance
transactions 713 670 2,819 2,923
Wire transfer fees 166 131 606 473
Gain on sale of loans 360 302 1,589 574
Net gain on sale of
securities available for
sale - 205 171 197
Gain on sale of fixed assets 738 - 738 -
Loan service fees 274 192 945 576
Other income 269 130 773 427
----------------------------------------
Total non-interest income 4,226 3,063 13,788 10,687
Non-interest expenses
Salaries and employee
benefits 3,104 3,194 12,294 10,981
Occupancy 436 419 1,739 1,437
Furniture, fixtures, and
equipment 297 231 1,050 803
Net other real estate owned
income - - (98) (191)
Data processing 500 448 1,650 1,348
Professional service fees 288 250 1,375 1,040
Business promotion and
advertising 483 336 1,553 1,121
Stationery and supplies 145 121 420 417
Telecommunications 145 126 455 449
Postage and courier service 139 117 485 429
Security service 159 161 576 524
Other operating expenses 666 399 1,846 1,396
----------------------------------------
Total non-interest expenses 6,362 5,802 23,345 19,754
----------------------------------------
INCOME BEFORE INCOME TAX
PROVISION 3,713 2,791 14,806 12,107
INCOME TAX PROVISION 1,229 983 5,459 4,347
----------------------------------------
Net income $2,484 $1,808 $9,347 $7,760
========================================
Other comprehensive income
(loss) (1) 73 (859) 1,662 17
Total comprehensive income $2,557 $949 $11,009 $7,777
========================================
Earnings per share, basic (2) $0.35 $0.26 $1.35 $1.16
Earnings per share, diluted (2) $0.34 $0.25 $1.32 $1.13
Basic average common shares
outstanding (2) 7,090,227 6,703,632 6,908,332 6,685,546
Diluted average common shares
outstanding (2) 7,358,156 6,913,889 7,101,962 6,877,128
(1) Other comprehensive income represents the change in unrealized
gains/(losses) on securities available for sale-net of tax and
fair market value of interest swap-net of tax, from the previous
period end.
(2) Adjusted to reflect eleven percent stock dividend paid in 2002.
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION (Unaudited)
(Dollars in thousands)
For the year For the three
ended months ended
December 31, December 31,
2002 2001 2002 2001
------------------------------------
Average total loans outstanding
during period $439,494 $338,258 $490,515 $361,013
Total gross loans outstanding at
end of period 528,147 378,047 528,147 378,047
Net charge offs 837 2,293 656 2,278
Non-performing assets
Loans past due 90 days or more and
still accruing interest $ - $ - $ - $ -
Non-accrual loans 2,428 1,461 2,428 1,461
------------------------------------
Total non-performing loans 2,428 1,461 2,428 1,461
Other Real Estate Owned - 674 - 674
------------------------------------
Total Non-performing assets $ 2,428 $ 2,135 $ 2,428 $ 2,135
Allowance for Loan Losses
Allowance for loan losses $5,497 $6,590 $6,216 $6,775
Reserve for losses on commitments
to extend credit 43 $43 43 43
------------------------------------
Balance at beginning of period 5,540 6,633 6,216 6,818
------------------------------------
Provision for loan losses 2,100 1,200 1,200 1,000
Charge Off - Net of Recoveries (837) (2,293) (656) (2,278)
------------------------------------
Balance as of December 31, $6,760 $5,540 $6,760 $5,540
Selected Ratios For the Period
Return on average assets 1.39% 1.52% 1.30% 1.27%
Return on average equity 16.27% 16.33% 15.55% 14.08%
Interest rate spread 3.52% 3.47% 3.34% 3.72%
Net interest margin 4.31% 4.86% 4.05% 4.71%
Yield on earning assets 6.11% 7.84% 5.78% 6.97%
Cost of deposits 1.81% 3.04% 1.73% 2.29%
Cost of funds 1.83% 3.04% 1.76% 2.29%
Non-interest expense/average assets 3.48% 3.87% 0.84% 1.24%
Efficiency ratio 58.00% 59.75% 56.42% 63.80%
Net charge-offs to average loans 0.19% 0.68% 0.18% 0.84%
Period End
Tier 1 capital ratio (Bank) 9.48% 10.04%
Tier 1 risk-based capital ratio
(Bank) 10.40% 11.60%
Total risk-based capital ratio
(Bank) 11.52% 12.85%
Non-accrual loans to gross loans 0.46% 0.39%
Non-performing assets to total
loans and OREO 0.46% 0.56%
Non-performing assets to total
assets 0.30% 0.36%
Allowance for loan loss to gross
loans 1.28% 1.47%
Allowance for loan losses to
nonperforming assets 278.43% 259.48%
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION (Unaudited)
(Dollars in thousands)
For the year ended
December 31,
Loans 2002 2001 % chg
-------------------
Real estate -- construction $20,669 $12,851 60.8%
Real estate -- commercial 241,252 161,670 49.2%
Commercial 108,540 95,730 13.4%
Consumer 41,463 35,128 18.0%
Trade finance 50,106 26,830 86.8%
SBA 65,988 45,816 44.0%
Other 129 22 494.6%
-------------------
Total loans -- gross 528,147 378,047 39.7%
Unearned income (170) (463) -63.2%
Allowance for loan losses (6,760) (5,540) 22.0%
-------------------
Total loans -- net $521,217 $372,044 40.1%
Deposits
Non-interest bearing $207,093 $168,530 22.9%
Interest bearing checking 168,562 77,690 117.0%
Savings 45,408 30,253 50.1%
Time deposits 305,958 248,897 22.9%
-------------------
Total deposits $727,021 $525,370 38.4%
Average Balances For the year For the three
ended months ended
December 31, December 31,
2002 2001 2002 2001
----------------- -----------------
Loans
Real estate loans $251,755 $168,343 $243,456 $193,593
Commercial loans 149,728 137,463 204,451 132,409
Consumer loans 32,973 28,496 36,926 30,763
Equity & Term loans 5,038 3,956 5,682 4,248
Total Loans $439,494 $338,258 $490,515 $361,013
Investment securities 124,008 93,849 145,727 116,078
Earnings Assets 613,487 460,469 695,248 510,866
Total Assets $670,908 $510,572 $756,182 $566,501
Deposits
Noninterest-Bearing deposits 178,081 137,219 189,353 154,454
Super NOW 6,826 5,197 6,453 5,374
Money market accounts 91,338 56,750 124,628 70,478
Savings deposits 37,125 25,180 43,558 28,500
Total core deposits $313,370 $224,347 $363,992 $258,806
TCD under 100M 80,427 74,104 86,056 76,275
TCD over 100M 203,121 151,819 218,109 167,295
Total deposits $596,918 $450,269 $668,157 $502,377
Interest-bearing liabilities $425,505 $314,357 $494,341 $354,795
Stockholders' equity $ 57,450 $ 47,528 $ 63,357 $ 50,953
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