Nara Bancorp Inc. of Los Angeles swung to a $4 million profit in the third quarter, a 37% improvement from a year earlier, after selling a pool of problem loans.
The $2.9 billion-asset company reported Monday that it sold $61.1 million of the loans, booking a pre-tax gain of $3.7 million.
Despite the sale, credit problems remain high. Nara's provision for loan losses totaled $11.1 million, up 30% from a year earlier, and roughly a quarter of the provision for the second quarter. The majority of the provision went toward covering net charge-offs, which totaled $10.4 million, up 80% from a year earlier.
Nonperforming assets totaled $88.5 million, or 4.11% of total assets, up 2% from the second quarter and 4% from a year earlier.
Nara also reported a 46% year-over-year reduction in interest expense, which totaled $9.5 million for the quarter, as the company added more non-interest bearing deposits.