N@N

LOS ANGELES--([ BUSINESS WIRE ])--Pacific City Financial Corporation (OTCBB:PFCF) today reported financial results for its 2012 first quarter, posting consolidated net income of $1.8 million and net income available to common shareholders of $1.5 million, accompanied with improvements in asset quality.

"We are pleased to announce the results of our 2012 first quarter. Including this quarter we have been profitable for the past four consecutive quarters. We continue to make improvements in our performance, asset quality, and capital strength"

"We are pleased to announce the results of our 2012 first quarter. Including this quarter we have been profitable for the past four consecutive quarters. We continue to make improvements in our performance, asset quality, and capital strength," said Haeyoung Cho, president and chief executive officer. "We have been experiencing a slow improvement in our marketplace during the past several quarters and we are optimistic in our ability to expand our business in small increments for the rest of the year.a

ASSET QUALITY

At March 31, 2012, total nonperforming assets declined to $11.0 million from $12.4 million at year-end 2011. The percentage of nonperforming assets to total assets declined to 1.87% at March 31, 2012 from 2.26% at December 31, 2011. The Company's OREO portfolio declined to a net value of $993,000 compared to $1,335,000 at December 31, 2011.

During the first quarter 2012, the new inflow to non-accrual status loans amounted to $2.5 million, a decrease of $1.7 million or 40.5% compared to the inflow during the fourth quarter 2011. The Company charged off $1.6 million and sold the non-performing loans in carrying value of $2.1 million during the first quarter resulting a decrease of $1.0 million in non-performing loans portfolio.

LOANS & DEPOSITS

Net loan receivable increased to $443 million at March 31, 2012, compared to $421 million at December 31, 2011. The increase was mainly due to the production of $69.7 million in new loans, offset by decreasing transactions of regular pay-down and pay-off in the amount of $27.7 million and sale of loans in the amount of $18.5 million. Gross loan at March 31, 2012 amounted to $457 million. Mentioning about SBA loans, one of Companyas main income driver, $17.1 million was produced offset by regular pay-down in the amount of $2.2 million and sale of SBA loans in the amount of $8.6 million during the first quarter 2012. The Company also produced $18.6 million of home mortgage loans offset by regular pay-down and pay-off in the amount of $3.3 million and sale of mortgage loans in the amount of $7.7 million during the first quarter 2012.

Total deposits at March 31, 2012 increased to $509.7 million from $481.8 million at December 31, 2011. The total deposits newly opened during the first quarter 2012 amounted to $53.2 million while the closed deposits was $39.2 million. The balance change in existing deposits accounts amounted to $13.9 million and contributed to the deposit portfolio increase as well. Demand deposits to total deposits ratio was 23.4% at March 31, 2012 from 21.8% at year-end 2011. The Company's net loan-to-deposit ratio was 86.9% at March 31, 2012.

BALANCE SHEET SUMMARY & CAPITAL

Total assets at March 31, 2012 amounted to $585.5 million, an increase of $39.5 million or 7.23%, compared to $546.0 million at December 31, 2011. The increase was mainly due to the increase of $22 million in net loan receivable, the increase of $12 million in investment securities, and the increase of $5 million in cash and due from banks, partially offset by the decrease of $0.3 million in Other Real Estate Owned(OREO) during the first quarter of 2012.

During the first quarter, the Company has sold $10.0 million of mortgage loans to the secondary market. However, due to the six months of recourse period in the contract, the transaction has not been recognized as a sale. Instead, the net proceed received was recognized as secured borrowing.

Total shareholders' equity at March 31, 2012 increased to $59.9 million from $58.3 million at December 31, 2011. The increase was mainly due to the retained earnings of $1.8 million during the first quarter, offset by the TARP dividend accrual of $0.3 million. Attributable to four consecutive profitable quarters, the Companyas Tier 1 leverage ratio improved to 10.61% at March 31, 2012 from 10.12% at March 31, 2011 and it exceeds minimum guidelines for "well-capitalized" institutions.

In December 2008, the Company participated in Troubled Asset Relief Program (TARP) and U.S. government purchased the Companyas preferred stock and warrants of $17.0 million. The program requires quarterly dividend at the rate of 5% annual rate for Series A and 9% for Series B or approximately $882,900 per year for the first five years. The submission of quarterly dividend payment has been stopped since August 2009. Unpaid dividends in the amount of $2.5 million and $180,000 of interest on unpaid dividends have been fully reserved and reflected in the financial statements.

2012 FIRST QUARTER RESULTS OF OPERATION

Net interest income before provision for loan losses increased to $5.2 million for the first quarter of 2012 compared to $4.9 million for the first quarter of 2011. The increase was attributable to the increase of $28.7 million in average earning assets. The loan yield also improved to 5.60% for 2012 from 5.42% for 2011. The average interest bearing liabilities increased to $392 million for the first quarter of 2012 from $390 million for the first quarter of 2011. However, the cost of interest bearing liabilities has decreased 45 bps to 1.13% compared to 1.58% for the first quarter of 2011 having positive impact on improvement of net interest margin. As a result, net interest margin increased 11 bps to 3.80% in 2012 compared to 3.69% in 2011.

Noninterest income for the first quarter 2012 amounted to $1.8 million while $2.7 million for the first quarter 2011. The decrease was mainly due to the decrease of $1.3 million in gain on sale of SBA loans. In the first quarter of 2011, the Company has recognized the 2010 fourth quarter deferred sale which was delayed by the recourse period clause. The delayed gain portion recognized at the beginning of 2011 due to 2010 deferred sale was $831,000. The gain on sale of home mortgage loans also decreased to $30,000 compared to $78,000 for the first quarter 2011.

Total noninterest expense for the first quarter 2012 remained at $4.3 million compared to the first quarter 2011. Despite the improvement in net interest income and non-interest expense, the Company's efficiency ratio for the first quarter 2012 increased 342 bps to 60.14% compared to 56.72% for the first quarter 2011. The unfavorable increase was mainly due to the aforementioned decrease in non-interest income. In absence of the non-recurring $831,000 SBA gain, the efficiency ratio would have been 63.63% for the first quarter 2011.

As a combined result, the Company recorded the net income of $1.8 million for the first quarter 2012. The net income available to common shareholders for the first quarter of 2012 was $1.5 million. The return on average assets (ROAA) and the return on average equity (ROAE) were 1.28% and 11.51%, respectively.

About Pacific City Financial Corporation

Pacific City Financial Corporation is a bank holding company with headquarters in Los Angeles, California. Its wholly owned subsidiary, Pacific City Bank, is a full-service commercial bank established in September 2003 by local Korean-American business owners and professionals with a simple mission to help first generation Asian immigrants realize the American Dream through business ownership. Since its inception, Pacific City Bank has specialized in commercial banking services for small to medium-size businesses by providing commercial real estate loans, small business loans and line of credit, trade finance loans, auto loans, residential mortgage loans, and SBA loans. With over $500 million in total assets, Pacific City Bank serves a diverse customer base through seven branches in the Greater Los Angeles Area and three Loan Production Offices in three States.

Safe Harbor Statement

This press release may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from the projected, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words abelieve,a aexpect,a aanticipate,a aintend,a aplan,a aestimate,a or words of similar meaning, or future or conditional verbs such as awill,a awould,a ashould,a acould,a or amay.a