Nara Bancorp Inc. beat Wall Street expectations for the second quarter, as the Koreatown bank holding company cleared bad loans dating from the recession off its books and generated strong production of new loans.
The parent Nara Bank late Monday reported net income of $5.2 million (14 cents per share), compared with a net loss $17 million (-45 cents) a year ago. Net interest income rose 9 percent to $29.3 million, and non-interest income jumped 122 percent to $7.7 million for total revenue of $37 million.
Analysts surveyed by Thomson Reuters on average expected per-share profit of 14 cents on total revenue of $33 million.
The results included a $10 million provision for loan losses, which is 76 percent lower than in the same period a year ago. Net charge-offs fell 68 percent to $13.7 million. New loan production totaled $116 million, 32 percent higher than in the first quarter and 13 percent higher than a year ago.
“We believe we can continue generating prudent balance sheet growth and making further improvement in our asset quality, which should enable us to continue being solidly profitable,” Chief Executive Alvin Kang said in a statement.
Nara’s pending merger with Center Financial Corp. will create the nation’s largest Korean-American bank. Kang, who will be chief executive of the combined company, said in a Tuesday conference call that the deal is expected to close in the fourth quarter and that integration planning has accelerated.
Shares on Tuesday closed up 8 cents, or less than 1 percent, to $8.49 on the Nasdaq.
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