Center Financial to Receive TARP Funds

0

Center Financial Corp. said Monday it received approval to obtain $55 million as part of the government’s $700 billion financial bailout program.

The Los Angeles holding company of Center Bank becomes the seventh local institution to receive approvals for investment under the U.S. Treasury Department’s Capital Purchase Program.

City National Corp., East West Bancorp Inc. and Broadway Financial Corp. are among the institutions receiving funds in amounts ranging from a high of $395 million to a low of $9 million.

Center Financial said after the market closed that the investment in its senior preferred shares represents 3 percent of the bank’s total risk-weighted assets as of the end of the third quarter.

The company, which targets Korean-American and other ethnic communities, will pay the government a 5 percent dividend annually for each of the first five years of the investment and 9 percent dividend thereafter until the shares are redeemed. The government also will receive 10-year warrants for common stock.

“While increasing Center Bank’s lending capacity to continue supporting the financial needs of small and middle-market businesses in our communities, the additional capital will enhance the company’s liquidity and further our ability to capitalize on strategic opportunities,” said Chief Executive Jae Whan Yoo in a statement.

Center Financial’s stock closed up 52 cents, or 9 percent, to $6.51 in regular trading, but fell 16 cents, or 2.5 percent, in after-market trading.

No posts to display