Center Financial Eyes $73.5 Million Private Placement

December 31, 2009 (FinancialWire) — Center Financial Corp. (NASDAQ: CLFC), the holding company of Center Bank, said it has entered into securities purchase agreements with institutional investors, insiders and “friends of the company” under which it expects to raise $73.5 million.

In preparation for the planned capital raise, the company said it completed a detailed loan review and an evaluation of its deferred tax asset and goodwill during the fourth quarter of 2009.

Under the securities purchase agreements, the $73.5 million capital raise will be executed through a private placement of 73,500 mandatorily convertible non-cumulative non-voting perpetual preferred stock, series B at a price of $1,000 per share.

The stock will automatically convert into a number of shares of Center Financial’s common stock after the company has received shareholder approval at a special meeting of shareholders expected to be held on or before March 31, 2010.

Center said that the conversion ratio for each share of the stock will be equal to the quotient obtained by dividing the series B share price by the conversion price. The initial conversion price of $3.75 per share is subject to certain possible adjustments in the future.

On a pro forma basis as if this private placement, along with the $12.8 million private placement reported on December 1, had occurred prior to September 30, 2009, and accounting for the company’s projected 2009 fourth quarter net loss and average asset balances, Center Financial would have reported an approximate total risk based capital ratio of 17.21%, tier 1 risk based capital ratio of 15.93% and tier 1 leverage ratio of 12.56%.

Los Angeles-based Center Financial is the holding company of Center Bank, a community bank offering a range of financial services focusing on the Korean-American community. The bank operates a total of 19 full-service branches and one loan production office.

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