Center Financial Corp. said Friday that it revised its first-quarter results, posting a net loss rather than a profit, because of a stock conversion completed in March.
The net loss to common shareholders was $27 million. The Los Angeles parent of Center Bank originally reported $2 million of net income available to those shareholders for the period.
The $2.3 billion-asset Center Financial said that while completing its second-quarter results, it found "it did not properly account for the intrinsic value" of the conversion from preferred to common shares.
The conversion price was $3.75 a share for its preferred stock while the market value of its common stock at the time the preferred shares were issued in December was $5.23 per share. The conversion created a discount of $29 million for converting the preferred stock to common stock.
While this hurt the bottom line for common shareholders, the company's net income before paying preferred dividends and the conversion discount remained at $2.8 million in the first quarter. Center Financial's president and chief executive, Jae Whan Yoo, said in a press release that the revision also does not affect total shareholders' equity at March 31 or June 30. On a per-share basis, the net loss to common shareholders in the first quarter was $1.27, against the originally reported net income of 10 cents.