Hi, fellow shareholders,

It was a challenging quarter. Center successfully resolved $25 million worth of delinquent loans, or the numbers would be a lot worse. Judging by the elevated ALLL, now above 4% of all loans, center is preparing for more challenges ahead. The cost of fund remains high, partially due to still high brokered deposit. Jumbo CD's made up about 30% of deposits.
The loan portfolio shrank a bit, maybe to match the reduced equity level, or maybe just unable to make profitable loans to replace pay offs (which tend to yield more).
The interest spread shrank further to 2.85%. Much was due to reversal of interest income booked in prior quarter.
The result is less interest income to offset further losses. Center is walking a fine line.
The silver lining may be the much lower past due between 30 to 89 days, which are precursors of non-accrual. Judging by that, reversal of booked-but-not-yet-collected interest will not be as bad in next quarter.

I am okay with the results. It still confirms that Center would not need to float additional shares at deep discount. It can deal with TARP later. Too, the hefty reserve is much higher at Center than any other Korean-American banks. It's better prepared for CRE fallout IMO.

I think improvement in interest rate spread was masked by factors mentioned above and will show through by next quarter. That'll help.

Sam