Business & Finance
Business and Finance
Business and Finance
Sun, August 22, 2010
Fri, August 20, 2010
Thu, August 19, 2010 
LOS ANGELES--([ BUSINESS WIRE ])--Nara Bancorp, Inc. (NASDAQ: NARA), the holding company of Nara Bank, today announced the closing of its bulk sale of problem loans that were transferred to loans held-for-sale at June 30, 2010. After subtracting the loan sale advisor fee, the Company received cash proceeds of $38.8 million from the sale of $61.1 million of these loans.
"The bulk sale was an efficient mechanism for disposing of problem assets outside of our primary markets and improving our credit quality in the process"
At June 30, 2010, the Company determined its best estimate of the fair value of the loans transferred to held-for-sale based on the market conditions and performance of the portfolio at that time. The market conditions and loan performance have improved slightly, which resulted in a better than expected sales price. Accordingly, the Company will record a pre-tax gain of $3.7 million on the sale of these loans in the third quarter of 2010.
The loan sale consisted of commercial real estate loans secured by hospitality (44.6%), retail (21.8%), gas station/car wash (17.9%), and mixed-use (15.7%) properties. Approximately 43% of the loans sold were related to properties located in California, primarily in markets outside of the major metropolitan areas. The remainder of the loans related to properties located outside of California.
During the second quarter of 2010, the Company recorded a $26.3 million provision for loan losses related to the loans included in the bulk sale. Approximately $17.3 million of this provision reflects the discount required to dispose of the loans through a bulk sale process.
Approximately $2.2 million of the $63.3 million of loans transferred to held-for-sale at June 30, 2010 were not sold through the bulk sale process, as the Bank has decided to pursue alternative courses of resolution. No material additional losses are expected to be incurred on these loans.
aThe bulk sale was an efficient mechanism for disposing of problem assets outside of our primary markets and improving our credit quality in the process,a said Alvin Kang, President and Chief Executive Officer of Nara Bancorp. aFollowing this sale, we have significantly reduced our exposure to areas that have experienced the most economic weakness and have had the most significant declines in collateral valuations. We will continue to be aggressive in further reducing our level of problem assets, which could include additional loan sales. However, it is more likely that future dispositions would be through individual sales to relationships within our primary markets, which would be at smaller discounts than a bulk sale.a
Keefe, Bruyette & Woods, Inc. served as the loan sale advisor to Nara Bank for the bulk sale.
About Nara Bancorp, Inc.
Nara Bancorp, Inc. is the parent company of Nara Bank, which was founded in 1989. Nara Bank is a full-service community bank headquartered in Los Angeles with 23 branches and one loan production office in the United States. Nara Bank operates full-service branches in California, New York and New Jersey, and a loan production office in Texas. Nara Bank was founded specifically to serve the needs of Korean-Americans. Presently, Nara Bank serves a diverse group of customers mirroring its communities. Nara Bank specializes in core business banking products for small and medium-sized companies, with an emphasis in commercial real estate and business lending, SBA lending and international trade financing. Nara Bank is a member of the FDIC and is an Equal Opportunity Lender.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about future operations and projected full-year financial results that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include but are not limited to economic, competitive, governmental and technological factors affecting the Companya™s operations, markets, products, services, and pricing. Readers should carefully review the risk factors and the information that could materially affect the Companya™s financial results and business, described in documents the Company files from time to time with the Securities and Exchange Commission, including its quarterly reports on Form 10-Q and Annual Reports on Form 10-K, and particularly the discussions of business considerations and certain factors that may affect results of operations and stock price set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.
