Center Financial Posts 69% Increase in Net Income for 2005 First Quarter; Results Reflect Balanced Gains in Loans and Deposits and Improvements in Operating Ratios.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. -- Center Financial Corporation (Nasdaq:CLFC CLFC Creating Lasting Family Connections (New Hampshire) CLFC Clear Lake Fencing Club (Texas) ), the financial holding company of Center Bank, today reported another quarter of record earnings for the three months ended March 31, 2005. 2005 first quarter highlights, compared with a year ago, include: --Net income increased 69% to $5.7 million, or $0.34 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 --Net loans rose 30% to $1.03 billion --Total deposits grew 26% to $1.19 billion --Total assets were up 30% to $1.39 billion --Return on average assets and return on average equity increased to 1.70% and 24.39%, respectively --Efficiency ratio improved to 47.76% --Net interest income before provision for loan losses increased 49% to $14.0 million --Noninterest income advanced 22% to $5.0 million --Received 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. approvals to establish two new full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. branch offices -- one in Seattle, Washington  This page is protected from moves until disputes have been resolved on the .The reason for its protection is listed on the protection policy page. and one in Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). --Quarterly cash dividend of $0.04 per share "These financial results marked another outstanding quarter with the highest ever quarterly earnings posted by the company," 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 Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness , president and chief executive officer. "We are particularly pleased that the balanced growth achieved in all the major areas of our business translated to significant improvements in our efficiency ratio, return on average assets and return on average equity. With the celebration of our 19th anniversary during the quarter and our continued dedication to meeting the financial needs of our core markets, we believe we are well positioned for growth in 2005." For the three months ended March 31, 2005, net interest income before provision for loan losses rose 49% to $14.0 million from $9.4 million in the same period a year earlier, reflecting strong growth in net loans and the benefit of the recent series of Federal fund rate hikes. The net interest margin improved to 4.62% from 4.02% in the 2004 first quarter, and from 4.45% in the immediately preceding fourth quarter. The company added $650,000 to its provision for loan losses during the current first quarter, compared with $850,000 in the corresponding prior-year period. Noninterest income grew 22% to $5.0 million from $4.1 million in the 2004 first quarter, benefiting from higher customer service fees, increases in the gain on sale 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 and fee income from trade finance transactions, offset, in part, by a reduction in loan service fees. In addition, Center Financial posted $673,000 from the sale of SBA loans in the current three-month period and amortization on 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. of $61,000. A year earlier, the company recorded $377,000 from the sale of SBA loans and no amortization on interest rate swaps. Noninterest expenses totaled $9.1 million, an increase of 26% from $7.2 million in the first quarter a year ago. The increase principally reflects higher staff, 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 and operational costs associated with Center Bank's expanded franchise, as well as increased professional fees due primarily to Sarbanes-Oxley 404 compliance. Compared with the 2004 first quarter, the current period includes the costs associated with four additional loan production offices and the operations of two additional full-service branches in 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. and in San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. . Center Financial continued to enhance its efficiency ratio, which improved to 47.76% for the 2005 first quarter from 53.48% in same period a year ago. Net income for the first quarter of 2005 increased 69% to $5.7 million, or $0.34 per diluted share, from $3.3 million, or $0.20 per diluted share, in the corresponding period a year ago. Return on average assets for the current first quarter increased to 1.70% from 1.29% in the year-ago period and from 1.38% in the immediately preceding fourth quarter. Return on average equity improved to 24.39% from 16.80% in the first quarter of 2004 and from 19.33% in the 2004 fourth quarter. The company's yield on interest 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 rose to 6.39% in the 2005 first quarter from 5.39% in the same period a year ago. Gross and net loans at March 31, 2005 increased 30% each to $1.05 billion and $1.03 billion, respectively, from $808.5 million and $796.1 million at March 31, 2004. Commercial real estate loans recorded growth of 49% from prior-year levels, accounting for 61% of the company's gross loans at the end of the 2005 first quarter. Commercial business loans grew by 24% and represented 20% of Center Financial's loan portfolio. Trade finance loans remained relatively flat compared with a year ago, but decreased to 7% of gross loans, as compared with 9% in the first quarter of 2004. SBA loans, consumer and construction loans totaled 5%, 6%, and 1%, respectively, of the company's loan portfolio at March 31, 2005. Total deposits grew to $1.19 billion at the end of the first quarter of 2005, compared with $1.17 billion at December December: see month. 31, 2004 and $946.5 million at March 31, 2004. Core deposits represented 62% of total deposits at the end of the current quarter, with non-interest bearing, interest bearing checking and savings deposits Savings deposits Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand. posting increases of 31%, 19% and 23%, respectively, over year-ago levels. Non-interest bearing deposits accounted for 31% of total deposits at March 31, 2005, as compared with 30% at the end of the 2004 first quarter. Time deposits rose 25% over a year ago and accounted for 46% of total deposits. The average cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposits for the 2005 first quarter increased to 2.37% from 1.83% a year earlier. The average cost of total deposits equaled 1.66% for the current first quarter, up from 1.27% in the 2004 first quarter. The average 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 period ended March 31, 2005 was 2.46%, compared with 1.89% in the prior-year first quarter. Total assets at March 31, 2005 rose to $1.39 billion from $1.34 billion at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2004 and $1.07 billion at the end of the 2004 first quarter. Interest-earning assets grew to $1.27 billion from $1.22 billion at December 31, 2004 and $969.9 million at March 31, 2004. The growth of total assets was financed by the increase in deposits collected by the company's expanded network of branch offices. Total non-performing assets were $3.5 million, or 0.25% of total assets, at March 31, 2005, compared with $3.4 million, or 0.26% of total assets, at December 31, 2004, and $3.0 million, or 029% of total assets, at the end of the first quarter of 2004. Net charge-offs for the current quarter totaled $94,000, compared with $376,000 for the first quarter of 2004. The allowance for loan losses was increased to $11.8 million in response to the strong growth in the company's loan portfolio, and represented 1.13% of loans, net of unearned income Unearned Income Any income that comes from investments and other sources unrelated to employment services. Notes: Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. at March 31, 2005, compared with 1.10% at year-end 2004 and 1.15% at the end of the year-ago first quarter. 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. at March 31, 2005 increased to $95.2 million from $90.7 million at December 31, 2004 and $81.6 million at March 31, 2004. At the end of the 2005 first quarter, Center Financial remained "well-capitalized" under all regulatory categories, with a Tier 1 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 9.88%, a total risk-based capital ratio of 10.94%, and a Tier 1 leverage ratio of 8.36%. Kim added: "Late in the quarter, we announced the appointment of Patrick Hartman Hartman may refer to: Surname
An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. with more than 28 years of experience 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. industry, as our new chief financial officer. We are pleased to have strengthened our management team with the vast experience that Patrick brings to Center Financial, most of which as the chief financial officer of a community bank. We look forward to his valued contributions, particularly related to corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. and compliance with Sarbanes-Oxley, as we work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to grow the Center Bank franchise and deliver greater value to our shareholders." About Center Financial Corporation Center Financial Corporation is the financial 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 $1.39 billion at March 31, 2005. Headquartered in Los Angeles, Center Bank operates 24 branch and loan production offices across the nation, of which 14 full-service branches are located 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 one branch in Chicago, plus nine loan production offices 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. , 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., Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Honolulu Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. , Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837.
EconomyThe fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; and Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. . Center Bank is a 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). state-chartered institution and a member of the FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). . For additional information on Center Bank, visit the company's Web site at www.centerbank.com. This release may contain 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 included in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of 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 accordingly, the cautionary statements contained in Center Financial Corp's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended Dec. 31, 2004 (See Business, and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial ), and other filings with the Securities and Exchange Commission 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; and regional and general economic conditions. 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. 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.
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(In thousands, except share and per share data)
03/31/05 03/31/04 12/31/04
---------------------------------
Assets
Cash and due from banks $69,566 $53,199 $63,564
Federal funds sold 52,470 29,165 35,915
Money market funds and interest-
bearing deposits in other banks 3,564 30,000 3,663
Securities available-for-sale 167,829 100,602 157,027
Securities held-to-maturity 10,880 13,992 11,396
Loans (net of unearned income) 1,043,676 805,409 1,021,700
Allowance for loan losses (11,783) (9,278) (11,227)
---------------------------------
Net loans 1,031,893 796,131 1,010,473
Fixed assets 12,047 11,048 11,695
Bank-owned life insurance - cash
surrender value 10,522 10,136 10,430
Goodwill 1,253 - 1,253
Other assets 27,494 23,291 32,698
---------------------------------
Total assets $1,387,518 $1,067,564 $1,338,114
=================================
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing deposits $374,917 $285,417 $347,195
Interest bearing deposits 815,734 661,108 818,341
---------------------------------
Total deposits 1,190,651 946,525 1,165,536
Borrowed funds 69,268 10,709 44,854
Long-term subordinated debenture 18,557 18,557 18,557
Other liabilities 13,825 10,074 18,447
---------------------------------
Total Liabilities 1,292,301 985,865 1,247,394
Shareholders' Equity 95,217 81,699 90,720
---------------------------------
Total Liabilities & Shareholders'
Equity $1,387,518 $1,067,564 $1,338,114
=================================
Book value per share $5.83 $5.08 $5.57
Number of common shares outstanding
at period end 16,341,063 16,088,264 16,283,496
=================================
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(In thousands, except share and per share data)
Quarter Ended
March 31,
2005 2004
----------------------------------------------------------------------
Interest income $19,324 $12,562
Interest expense 5,341 3,173
----------------------
Net interest income before provision for loan
losses 13,983 9,389
Provision for loan losses 650 850
----------------------
Net interest income after provision for loan
losses 13,333 8,539
Noninterest income
Customer service fees 2,235 1,916
Fee income from trade finance transactions 902 703
Wire transfer fees 204 185
Gain on sale of loans 673 377
Net gain on sale of securities available for
sale 50 -
Loan service fees 336 551
Amortization on interest rate swaps 61 -
Other income 533 353
----------------------
Total noninterest income 4,994 4,085
----------------------
Noninterest expenses
Salaries and employee benefits 4,445 3,682
Occupancy 715 537
Furniture, fixtures, and equipment 408 321
Data processing 465 468
Professional service fees 955 144
Business promotion and advertising 650 321
Stationery and supplies 177 106
Telecommunications 129 126
Postage and courier service 163 129
Impairment loss of securities available for
sale - 540
Security service 175 155
Other operating expenses 781 677
----------------------
Total noninterest expenses 9,063 7,206
----------------------
INCOME BEFORE INCOME TAX PROVISION 9,264 5,418
INCOME TAX PROVISION 3,613 2,071
----------------------
Net income $5,651 $3,347
======================
Other comprehensive (loss) income(1) (794) 574
Total comprehensive income $4,857 $3,921
======================
Earning per share, basic $0.35 $0.21
Earning per share, diluted $0.34 $0.20
Basic average common shares outstanding 16,314,981 16,062,048
Diluted average common shares outstanding 16,669,216 16,464,230
(1) Comprehensive income represents the change in unrealized gain
(loss) on securities available for sale and, interest rate swaps,
net of tax, from the previous period end.
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(In thousands)
For the Three Months For the Year
Ended Ended
March 31, December 31,
2005 2004 2004
----------------------------------
Average gross loans outstanding
during period $1,039,245 $784,072 $878,819
Total loans outstanding at end of
period(1) 1,043,676 805,409 1,021,700
Non-performing assets
Loans past due 90 days or more and
still accruing interest $ - $ - $ -
Non-accrual loans 3,499 3,018 3,431
----------------------------------
Total non-performing loans 3,499 3,018 3,431
Other Real Estate Owned - - -
----------------------------------
Total Non-performing assets $3,499 $3,018 $3,431
=========== ========== ==========
Allowance for Loan Losses
Balance as of January 1, 2005 $(11,227) $(8,804) $(8,804)
Provision for loan losses (650) (850) (3,250)
Net loan charge-offs and
(recoveries) 94 376 827
----------------------------------
Balance as of March 31, 2005 $(11,783) $(9,278) $(11,227)
=========== ========== ==========
Quarter Ended Year Ended
Selected Ratios March 31,
For the Period 2005 2004 2004
Return on average assets 1.70% 1.29% 1.29%
Return on average equity 24.39 16.80 17.82
Interest rate spread 3.93 3.50 3.52
Net interest margin 4.62 4.02 4.10
Yield on earning assets 6.39 5.39 5.56
Cost of interest-bearing deposits 2.37 1.83 1.97
Cost of deposits 1.66 1.27 1.37
Cost of funds 2.46 1.89 2.04
Noninterest expense/average assets 0.67 0.69 3.15
Efficiency ratio 47.76 53.48 57.47
Net charge-offs/(recoveries) to average loans 0.01 0.05 0.09
Period Ended Year Ended
March 31, December
2005 2004 31, 2004
Tier 1 risk-based capital ratio 9.88% 11.17% 9.57%
Total risk-based capital ratio 10.94 12.24 10.59
Tier 1 leverage ratio 8.36 9.26 9.09
Non-accrual loans to gross loans 0.34 0.37 0.34
Non-performing assets to total loans and OREO 0.34 0.37 0.34
Non-performing assets to total assets 0.25 0.28 0.26
Allowance for loan loss to gross loans 1.13 1.15 1.10
Allowance for loan losses to nonperforming
assets 336.75 307.42 327.22
(1) Total loans are net of deferred loan fees and discount on SBA loan
sold.
CENTER FINANCIAL CORPORATION
SELECTED FINANCIAL DATA (Unaudited)
(In thousands)
For the Three Months Year Ended
Ended March 31, December 31,
Loans 2005 2004 % chg 2004
----------------------------------------
Real estate-construction $11,122 $17,396 -36.1% $16,919
Real estate-commercial 634,747 426,770 48.7% 607,296
Commercial 211,248 169,844 24.4% 208,995
Consumer 61,385 50,627 21.2% 58,178
Trade finance 76,892 76,215 0.9% 83,763
SBA 51,643 67,549 -23.5% 49,027
Other 159 89 78.7% 864
----------------------------------------
Total loans-gross 1,047,196 808,490 29.5% 1,025,042
Unearned Income (3,520) (3,081) 14.2% (3,342)
Allowance for loan losses (11,783) (9,278) 27.0% (11,227)
----------------------------------------
Total loans-net $1,031,893 $796,131 29.6% $1,010,473
Deposits
Non-interest bearing $374,917 $285,417 31.4% $347,195
Interest bearing checking 191,288 160,325 19.3% 210,842
Savings 78,498 63,955 22.7% 73,733
Time deposits 545,948 436,828 25.0% 533,766
----------------------------------------
Total deposits $1,190,651 $946,525 25.8% $1,165,536
Quarter Ended
Average Balances March 31,
2005 2004
----------------------
Average assets $1,344,656 $1,044,741
Average equity 93,985 80,132
Average net loans 1,027,819 774,888
Average deposits 1,178,961 896,589
Average interest earning assets 1,226,812 937,683
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