(RTTNews) -  Thursday, Nara Bancorp, Inc. (NARA: News ), reported a decline in net income for the third quarter of 2009. The decline is attributable to an increase in the provision for loans losses.

Net income available to common stockholders declined to $2.9 million or $0.11 per share, compared with $5.0 million or $0.19 per share for third quarter 2008. On average, seven analysts polled by Thomson Reuters estimated a loss of $0.23 per share. Analysts' estimates typically exclude special items.

Total interest income for the quarter increased to $41.70 million from $41.69 million year-ago, while the total interest expense increased by 3% to $17.47 million from $16.93 million year-ago.

Net interest income before provision for loans losses declined by 2% to $24.23 million from $24.75 million during the prior year period.

The company's net interest margin declined year-over-year to 3.14% from 4.02%.

The company reduced its provision for loan losses to $8.50 million from $6.18 million year-ago. This was primarily due to the impact of lower net charge offs and lower special mention and classified loans, partially offset by an increase in non-performing loans.
Nara Bancorp's non-interest income for the third quarter increased by 22% to $4.89 million, compared with $4.01 million year-ago. The increase was primarily due to higher net gains on sale of securities available-for-sale during third quarter 2009, offset by a loss recognized from the sale of loans during the quarter.

Net loan charge-offs during the third quarter of 2009 were $5.9 million, or 1.1% of average loans on an annualized basis, compared with $6.3 million, or 1.2% during third quarter of 2008.

According to the Los Angeles-headquartered bank, total delinquent loans, 30 or more days delinquent, increased to $67.9 million at September 30, from $42.8 million at June 30. Loans past due 59 days increased significantly to $24.5 million at September 30, from $5.4 million at June 30. The increase in early stage delinquencies was primarily attributable to five loan relationships aggregating $18.3 million. The relationships consisted of $10.9 million in loans to a borrower with several car wash businesses, $6.0 million in loans to three motel operators, and a $1.4 million loan to a dry cleaner. These borrowers are experiencing a fall-off in revenues due to the economy.

According to the company, total deposits grew 28% year-over-year, primarily from the growth in the first half of the year. Third quarter deposit growth was 2%, resulting in a loan to deposit ratio of 86% at September 30, compared with 108% during the prior year period. Total loans grew 2% year over year, primarily due to net loan growth of $52 million during third quarter 2009.

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