Bolstered by improved credit quality and growing demand for Small Business Administration loans, Nara Bancorp Inc. in Los Angeles reported its fourth-consecutive quarterly profit in the three months that ended June 30.
The $2.3 billion-asset company said late Monday that it earned $5.2 million in the second quarter, or 14 cents per diluted share, compared to a loss of $17 million loss in the same quarter last year. Per-share results were in line with estimates of analysts polled by Thomson Reuters.
The improvement was driven largely by a 38% drop in nonperforming loans year over year, to $51.2 million and a 76% decrease in its provision for loan losses, to $10 million during the same periods.
Nara's president and chief executive, Alvin Kang, said in a news release that the company booked $116 million of loans in the second quarter, its highest level of new loan production in six quarters.
In particular, Small Business Administration loan production and sales ramped up, contributing to $4 million in net gain on sales. Because of this, Nara reported a 122% increase in its noninterest income from a year ago, to $7.7 million, and a 70% gain from the first quarter.