Nara Bancorp to Restate Annual Financial Results for Calendar Year 200

    Business Editors

    LOS ANGELES--(BUSINESS WIRE)--March 30, 2005--Nara Bancorp, Inc. (Nasdaq:NARA), the holding company of Nara Bank, today announced that on March 24, 2005, a subcommittee of the Audit Committee concluded (and the Board of Directors concurred) that the Company should restate its consolidated financial statements for the year ended December 31, 2002 and accordingly, the previously issued consolidated financial statements and the related independent auditors' reports thereon issued by Deloitte & Touche LLP for the years ended December 31, 2002 and 2003 should no longer be relied upon; that Crowe Chizek and Company LLP, the Company's independent registered public accounting firm for 2004, should be engaged to audit the Company's consolidated financial statements for the calendar years ended December 31, 2002 and 2003; and that the Company would not timely file its annual report on Form 10-K for the calendar year ended December 31, 2004, which is due on March 31, 2005.
    A special subcommittee of the Audit Committee of the Board of Directors conducted an investigation after the discovery of the existence of a letter dated October 10, 2002 addressed to the former president and chief executive officer of the Company and signed by the former chairman of the board which addressed the relinquishment of certain profit sharing rights held by the former president and chief executive officer payable in 2003 and 2004 (for services rendered in 2002 and 2003 respectively) and the reimbursement of certain automobile and country club expenses and the payment of compensation for additional work to be performed after his retirement, all in an amount not to exceed the amount of profit sharing rights relinquished. The subcommittee discovered that the amount the former president and chief executive officer relinquished was approximately $600,000 in 2003 and $0 in 2004.
    The subcommittee determined that the failure to disclose and account for the arrangement to reimburse and pay those amounts up to approximately $600,000 contemplated by the letter had a material effect on the Company's previously issued consolidated financial statements for the year ended December 31, 2002 and that a material weakness in the Company's internal control over financial reporting existed in 2002 relating to the related party arrangement which was not subjected to internal review and analysis to determine the proper accounting and disclosure under U.S. generally accepted accounting principles ("GAAP") and rules and regulations of the Securities and Exchange Commission.
    The preliminary assessment of the impact of the error for the year ended December 31, 2002 is expressed in the table below. The restated results will be reflected in the Company's Form 10-K/A for the years ended December 31, 2002 and December 31, 2003, subject to completion of reviews by management and the audit by the Company's independent registered public accounting firm.

Year Ended Year Ended December 31, 2002 December 31, 2002 (estimated (as reported) restatement) (unaudited) (unaudited) --------------------- ---------------------- ------------------------- Net Interest Income before provision for Loan Losses $35,106,671 $35,106,671 --------------------- ---------------------- ------------------------- Provision for loan losses $2,790,000 $2,790,000 --------------------- ---------------------- ------------------------- Non-interest income $18,000,976 $18,000,976 --------------------- ---------------------- ------------------------- Non-interest expense $32,837,449 $32,237,449 --------------------- ---------------------- ------------------------- Income before income tax provision and cumulative effect of a change in accounting principle $17,480,198 $18,080,198 --------------------- ---------------------- ------------------------- Income tax provision $6,551,760 $6,776,760 --------------------- ---------------------- ------------------------- Income before cumulative effect of a change in accounting principle $10,928,438 $11,303,438 --------------------- ---------------------- ------------------------- Cumulative effect of a change in accounting principle $4,192,334 $4,192,334 --------------------- ---------------------- ------------------------- Net Income $15,120,772 $15,495,772 --------------------- ====================== ========================= Earnings per share before cumulative effect of a change in accounting principle(a) Basic $0.50 $0.52 Diluted $0.48 $0.49 --------------------- ---------------------- ------------------------- Earnings per share after cumulative effect of a change in accounting principle(a) Basic $0.69 $0.71 Diluted $0.66 $0.67 --------------------- ---------------------- -------------------------

(a) EPS figures adjusted for stock splits occurring in 2003 and 2004

    The Company also announced that on March 24, 2005, Dr. Thomas Chung tendered his resignation, effective immediately, from the Boards of Directors and the committees of Nara Bancorp, Inc. and Nara Bank, and that on March 25, 2005, the Board of Directors of Nara Bancorp, Inc. removed Mr. Benjamin Hong from the Board of Directors and committees of Nara Bank and requested by letter that he resign from the Board of Directors and committees of Nara Bancorp, Inc. To date, Mr. Hong has not tendered his resignation.
    Further, on March 25, 2005, the Board of Directors of Nara Bancorp, Inc. reassigned the Company's chief financial officer to other duties at the Company and appointed Ms. Christine Oh as the Company's acting chief financial officer until such time as the Company retains the services of a permanent chief financial officer.

    About Nara Bancorp

    Nara Bancorp, Inc. is the parent company of Nara Bank, which was founded in 1989. Nara Bank is a full-service commercial bank headquartered in Los Angeles with twenty-five branches and loan production offices in the United States, and one representative office in Seoul, Korea. Nara Bank operates full-service branches in California and New York with loan production offices in California, Washington, Colorado, Texas, Georgia, Illinois, New Jersey, and Virginia. Nara Bank was founded specifically to serve the needs of Korean-Americans, one of the fastest-growing Asian ethnic communities over the past decade. Presently, Nara Bank serves a diverse group of customers mirroring its communities. Nara Bank specializes in core business banking products for small and medium-sized companies with emphasis in commercial real estate and business lending, SBA lending and international trade financing. Nara Bank is a member of the FDIC and is an Equal Opportunity Lender. For more information on Nara Bank call our Los Angeles office at 213-639-1700 or New York office at 212-279-2790 or visit our website at www.narabank.com. Nara Bancorp, Inc. stock is listed on Nasdaq under the symbol "NARA."

    Forward-Looking Statements

    This news release includes "forward-looking statements" that are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. Forward-looking statements in this release are generally identified by words, such as "believes," "anticipates," "plans," "expects," "will," "would," "guidance," "projects" and similar expressions which are intended to identify forward-looking statements. There are a number of important factors that could cause the results or outcomes discussed herein to differ materially from those indicated by these forward-looking statements, including, among others, the discovery of additional errors in the consolidated financial statements. Nara Bancorp undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the Form 8-K that the Company filed with the Securities and Exchange Commission on March 30, 2005 as well as the risk factors and other information that could materially affect Nara Bancorp's financial results, described in other documents the Company files from time to time with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

--30--WAM/la*

CONTACT: Nara Bancorp, Inc. Ho Yang, 213-639-1700

KEYWORD: CALIFORNIA SOUTH KOREA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: BANKING MANAGEMENT CHANGES EARNINGS SOURCE: Nara Bancorp, Inc.

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