Good day ladies and gentlemen and thank you for standing by. Welcome to the 1st quarter 2008 Nara Bancorp earnings conference call. (Operator Instructions) I would now like to turn the conference call over to Tony Rossi of the Financial Relations Board. Please go ahead sir.

Thank you operator. Good morning everyone and thank you for joining us for the Nara Bancorp 1st quarter 2008 earnings call. Joining us this morning from management are Ms. Min J. Kim, Chief Executive Officer, Mr. Alvin D. Kang, Chief Financial Officer and Ms. Bonnie Lee, Chief Credit Officer. Before we begin I’d like to make a brief statement regarding forward looking remarks. The call today may contain forward looking projections regarding future events and the future financial performance of the company. We wish to caution you that such statements are just predictions and the actual results may differ materially as a result of risks and uncertainties that pertain to the companies business. We refer you to the documents the company files periodically with the SEC, specifically the company’s most recent 10Q and annual report on form 10K as well as the safe harbor statement in the press release issued yesterday. These documents contain important risk factors that could cause actual results to differ materially from forward looking statements. Nara Bancorp assumes no obligation to revise any forward looking projections that may be made on today’s call. With that I’d like to turn the call over to Ms. Min J. Kim. Ms. Kim?

Thank you, Tony. Good morning and thank you for joining us today. I am going to provide a brief overview of the first quarter of 2008 and then I will turn the call over to Al Kang, our Chief Financial Officer who will review our financial results. Following Al’s remarks I will conclude with a discussion of our outlook for the remainder of 2008. We earned 27 cents per share in the 1st quarter compared to 28 cents in the same quarter last year. Our performance in the first quarter was in line with our expectations. One of the significant challenges during the first quarter was managing our net interest margin. With our federal reserve continuing to reduce interest rates we continue to experience significant compression in our net interest margin. On a year-over-year basis our net interest margin declined by 47 basis points. It also declined 28 basis points from last quarter. We were able to offset the pressure on our net interest margin to some extent with a strong asset growth during the 1st quarter. Our loan portfolio increased at annualized rate of 13% during the quarter with all of the growth coming in our commercial real estate portfolio. However, we are seeing the effect of the weaker economy in our SBA lending business. Quarter origination declined by 27% from the prior quarter as the demand for loan is decreasing and fewer borrowers are able to meet our conservative underwriting criteria. In addition the premiums on SBA loans sold continue to decline as the market is pricing in faster prepayment rate. The average sales premium was 4.81% in the 1st quarter of 2008, down from 7.56% in the same period last year. These two factors contributed to a year-over-year decline of 41% in our net gains on SBA…

Thank you, Min. Let me first provide some color on our net interest margin. On a gap basis, our net interest margin was 4.15% in the 1st quarter of 2008 compared to 4.43% last quarter, a decline of 28 basis points at Min indicated. In the declining interest rate environment we’ve seen a steady decrease in the yield of our loan portfolio. At the same time we have not been able to reduce deposit costs at the same rate due to the highly competitive deposit pricing in the marketplace. During the 1st quarter the yield on our loan portfolio declined by 70 basis points from 8.55% to 7.85% while the cost of total deposits only decline by 42 basis points from 3.85% to 3.43%. We also saw a decline in average non-interest bearing deposits during the quarter which contributed to the decline in net interest margin. The decline in the yield on the loan portfolio is attributable to adjustable rate loans repricing lower with each reduction in interest rates. At March 31, 2008 the yield on our adjustable rate loan portfolio was 6.63%. On the other hand, our fixed rate portfolio with a yield of 7.69% at March 31, 2008 serves as a buffer against declining interest rates. During the 1st quarter fixed rate loans represented 45% of loan originations and at March 31, 2008 fixed rate loans comprised 55% of the loan portfolio compared to 52% at December 31, 2007. Despite the decline in our net interest margin our strong growth and assets helped us to still achieve an 8% year-over-year increase in net interest income before provision for loan losses. Our non-interest income was $4.6 million in the 1st quarter, essentially flat with the same period last year. Within our non-interest income categories our service fees on deposit…

Thanks Al. At this point we would like to update our guidance for 2008. For the full year we now expect fully diluted earnings per share to range between $1 and $1.05. So reduction in earnings guidance is primarily attributable to our belief that we will experience more compression in our net interest margin than we initially expected. With a federal reserve continuing to make drastic cuts in interest rates it appears that we will have a longer period of time to wait before rates have stabilized and our deposit repricing can catch up to our loan repricing. Over the next few quarters we do not expect our loan production to be able to offset the net interest margin pressure as much as it did in the 1st quarter. The loan pipeline is not as robust as it was entering the year and we are not expecting to see the same levels of asset growth in the near future. While we are disappointed with the lowered earnings expectations for 2008 we will now deviated from – we will not deviate from our disciplined operating philosophy in order to generate short-term gains. We believe that maintaining our conservative underwriting criteria, executing our interest rate risk management and capital management strategies and continuing to invest in our technological infrastructure will position the company to create long-term value for our shareholders as economic conditions improve in the future. Now we will be happy to take any questions you might have. Operator would you please open up the calls?

Yes ma’am. (Operator Instructions) Our first question comes from Aaron Deer with Sandler O’Neil. Please go ahead. Aaron Deer – Sandler O’Neil & Partners LP: Hi, good morning everyone.

Good morning Aaron. Aaron Deer – Sandler O’Neil & Partners LP: I was wondering if you could give us some more of your thoughts with respect to the margins, with respect to how much pressure you might anticipate in the 2nd quarter. I’m asking because it seems like your current deposit costs are well above kind of where market rates are, particularly on CDs and it just seems like there ought to be a pretty good snap back in the second half. So I’m just wondering how much more downside we see before we see that come back.

I think you’re right. We are seeing drops in our cost of funds, particularly the CDs. It seems to be dropping anywhere from five to 10 basis points a week. However, the competition in the marketplace is still a challenging proposition for us. So it would be nice if we could just follow the yield curve or follow the fed rate cuts that – but the competition really prevents us from doing that. And so we I think will see less compression than perhaps we did in the 1st quarter. Aaron Deer – Sandler O’Neil & Partners LP: Okay, but you still see another say 10 to 20 basis points down in the 2nd quarter?

It could be in that range. Aaron Deer – Sandler O’Neil & Partners LP: And then can you run by me how big your exposure is within the CRE portfolio to retail strip malls and similar types of properties and give us an update on how specifically that part of the CRE portfolio is performing?

Well on the retail strip malls we have not experienced any deterioration or weakness of those portfolios. And all those retail strip malls that we financed are very seasoned properties with strong cash flow. And it is all located within the metropolitan area. So for now, of course, we are closely monitoring that segment of our portfolio, but we are have not seen any deterioration. Aaron Deer – Sandler O’Neil & Partners LP: Okay and then lastly, it looked like you took the securities portfolio up quite a bit, and I'm just wondering what your thoughts are on that, whether it's going to hold at this level or you continue growing it or maybe we see it drift back down.

Well, we've been trying to target our investment portfolio to fall within a certain range of percentage of assets for asset allocation purposes, and so we've gradually increased that portfolio over the year. Also I think investments provide perhaps a more attractive opportunity given the fact that the loan yields have dropped so much and when you consider the credit issues and investments become an attractive opportunity. So I think we're going to try to maintain a certain percentage but, you know, monitor the situation and see whether we need to sell securities for liquidity or, you know, just as part of our overall interest rate risk management. Aaron Deer – Sandler O’Neil & Partners LP: And is that kind of the percentage that you're targeting? Is that it looks like it's somewhere between 10% and 15% of earning assets. Is that–would you put it at the higher end or the lower end of that range?

Probably the lower end. I think we’d like to get it within 10% to 12%. Aaron Deer – Sandler O’Neil & Partners LP: Okay, that’s great. Thank you very much for the help.

Our next question comes from Brett Rabatin with FTN Midwest. Please go ahead. Brett Rabatin – FTN Midwest Research Corp.: Good morning.

Good morning, Brett.

Good morning. Brett Rabatin – FTN Midwest Research Corp.: First, I wanted to ask on the CD rates in the quarter how much–I know you had $120 million of brokerage CDs reprice–how much that benefitted the time deposits? And then secondly, just I’ve heard that at least one of the two competitors that were offering the high rates have backed down some, and you mentioned competitors were still pretty aggressive, if things have changed any in the past month relative to what we were seeing in early March on the CD side in particular.

The brokerage CDs if we looked at–and this includes state and brokered CDs, we could break it down–but when you say state and brokerage CDs, at December our rate was 4.5%. And as of the end of March, we were at, let’s see, yes 2.99%. The brokered CDs, our cost was–and this is at the point in time–is 5.2% and with the callable deposit programs that we had, we’re able to refinance those down to 3.76% at March end. Our state deposits of the rate was 3.96% at December, and because they price off treasuries, that dropped down to 2.22% at March. Brett Rabatin – FTN Midwest Research Corp.: Okay and then wanted to talk about the CRE portfolio and first, was there a reclassification from year-end and CRE and CNI in terms of one category?

Yes, we had included some SBA CRE loans in the commercial portfolio, so we reclassified that to put it in its proper loan type. Brett Rabatin – FTN Midwest Research Corp.: Okay, so that’s the difference?

Right. Brett Rabatin – FTN Midwest Research Corp.: And just with the consumer soft and I know when I visited, you know, you could see restaurants slower. I’m just curious to hear on the retail, I know you have like 13% of those CRE portfolio and gas stations and car washes and another 20 or so in hotel/motel. It sounds like you’re saying you haven’t seen the stress, but I’m curious as to dig a little deeper there and find out why you’re not seeing risk migration and just kind of what your expectations are for that portfolio.

So far from the hotel and motel properties, we only have actually one loan that’s in the past due area, and it’s not even related to actually the economic conditions. Actually, the partners are having a dispute. As far as retail buildings are concerned, we just have a small retail rental building that’s in the past due less than $700,000. Other than that, those both categories, our portfolio’s pretty clean. Brett Rabatin – FTN Midwest Research Corp.: Okay and remind me when–I can’t remember when the regulators come to see you guys. Is it this summer?

Yes, this summer. Brett Rabatin – FTN Midwest Research Corp.: Okay and then just lastly on credit, the metrics were obviously very good this quarter. I was just hoping to get a little more color on the charge-offs that you had, $1.9 million, what those comprised of. Was there any thing unusual that comprised a larger portion of that or was it a bunch of smaller granular loans?

Yes, it’s pretty much a smaller retail loan type. I think that we gave out the numbers. The average charge-off is less than $100,000. Brett Rabatin – FTN Midwest Research Corp.: Okay, so it’s all small stuff. Okay.

Right. Brett Rabatin – FTN Midwest Research Corp.: Great, thank you.

Okay.

Our next question comes from Lana Chan with BMO Capital Markets. Please go ahead.

Hi. Good morning.

Morning.

Morning, Lana.

Could you quantify how much Min said, you said before the loans pipeline is down from the end of 2007. Could you quantify how much it’s down?

Yes, compared to the first quarter loan pipeline, we are seeing about 20% to 30% reduction in our pipeline at the beginning of the second quarter. So there was some reduction in our pipeline.

Okay and it that both really across all the markets, California and New York?

Right, right.

Okay and then on the earnings guidance, what are your assumptions for the fed funds rate by the end of this year?

Well, probably two more rate cuts.

Twenty-five basis points?

Twenty-five each, yes.

Okay and then my last question is I was wondering if you could give us an update on the classified and special mention loans at the end of the quarter? I think they were about $21 million at the end of ’07?

Yes, classified loans, they were about $21 million at the end of year-end. At the first quarter end under classified it’s about $28 million. You have to think that we still have that $7.5 million loan that we worked it out, brought it current. We still have it classified. We want to see some sustained performance.

Okay, thank you.

Our next question comes from Don Worthington with Howe Barnes Hoefer and Arnett. Please go ahead. Don Worthington – Howe Barnes Hoefer & Arnett: Good morning.

Good morning, Don. Don Worthington – Howe Barnes Hoefer & Arnett: Just wanted to get an update on the New York/New Jersey market, how the hell that was looking, say, compared to Southern California just in terms of loan demand?

Well, we are seeing overall same level of decline in the loan pipeline overall, and it was mainly due to our changed underwriting criteria of particular industries and types of the loans. So overall, you know, we have not seen any big difference compared to New York and California. Don Worthington – Howe Barnes Hoefer & Arnett: Okay and then would you expect any other gain on sale of securities throughout the year just periodic strategic type sales?

I think that would be probably on a strategic basis. Don Worthington – Howe Barnes Hoefer & Arnett: Okay and I guess lastly you talked about SBA being, you know, categorized between your loan types. What’s the total SBA balance at quarter end?

It was about a hundred–

$110 million.

$110 million approximately. Don Worthington – Howe Barnes Hoefer & Arnett: $110, okay. Thank you.

Our next question comes from Erica Penela, Merrill Lynch. Please go ahead.

Good morning.

Good morning, Erica.

Your guidance for $1.00 to $1.05, what are you assuming in terms of your loss rate and your allowance ratio?

Well, on the loss we are admitting about $2 million charge-off each quarter and maintaining at $1.01 loan loss reserve level.

You know, it seems that your tone surrounding the economy is appropriately cautious. I mean are you sort of, you know, I guess how are you thinking about that $1.01 reserve level going forward? Is that something that you’re looking to move up? I mean it doesn’t seem to gel with your outlook?

Well, the loan loss reserves I guess we can get into a long discussion on this, but our methodology has served us very well. We’re going to stick to it. It’s driven by several things. Obviously, one is charge-offs, but we first look at loans to see whether they’re impaired. That’s a FAS Loan 14 calculation. Then we look at our historical loss experience, and that drives the quantitative reserve requirement, so if our losses pick up and we weight heavily towards the current period, then that would require higher quantitative reserves. And then we look at qualitative factors, and we have nine difference categories that we look at to put additional reserves for the full portfolio, and so we don’t do anything that the methodology does not suggest or require us to do. And when you look at the allowance, actually the qualitative allowance is significantly higher than the quantitative allowance. It’s about 60% of the total allowance, which suggests that, you know, we have quite a bit of additional reserve coverage, more than what the historical loss experience reflects. The other thing is that we always have been aggressive in recognizing our problems and charging off loans, so it’s not a situation where we’re trying to delay recognition of losses. So, you know, we feel very comfortable with the way that we provide for our loan losses. Whether the allowance stays at $1.01 we don’t know. If the losses pick up, then it’s obviously just by the nature of the methodology going to drive the allowance to a higher level. And but the–we’re very comfortable with how we’re providing.

On the qualitative portion of your reserve methodology, have you recently changed your assumptions for the underlying economic backdrop?

Yes, in fact we have. We increased it for the weakening economy. We also increased it for the increasing trend in delinquencies. We have a good percentage for concentration, and we also make an adjustment for the nature and the volume of loans, so those are the four primary qualitative factors that we look at.

Okay and I just have one more question. You know, you mentioned how difficult the deposit-gathering environment still is. Is more the pressure coming from other Korean-American peer banks or are the larger banks still fairly aggressive?

Well, I think it’s both, and it seems that the mainstream banks, particularly countrywide and some of the other shops in California, have actually bumped up their CD rates, so the pressure is coming from both sides.

Okay. Thank you for your time.

Our next question comes from Joe Gladue with B. Riley and Company. Please go ahead. Joe Gladue – B. Riley and Co.: Yes, hi.

Good morning. Joe Gladue – B. Riley and Co.: First off, let me ask a little bit about the expenses. I guess you mentioned there were some increases in professional fees and other fees. Just wondering I guess what those were and if we can expect those to continue going forward. And this is sequentially I guess they were increased versus the fourth quarter.

Well, the–professional fees. I’m just looking at our detail. There isn’t anything that we–oh, okay. We had some I guess reimbursements, not reimbursements, but a credit to legal fees so…

Previous quarter.

In the previous quarter so that was a reason, probably the primary reason. Joe Gladue – B. Riley and Co.: Okay, alright and there was an increase in just the category Other Fees that was I guess about $362,000 versus the fourth quarter, again, just trying to gauge where things are going going forward.

It, you know, it’s a lot of little different things, nothing significant. Joe Gladue – B. Riley and Co.: Okay. Alright, just an overall question on SBA loan sales. As, you know, the premiums continue to go down, does there become a point where you, you know, they get low enough that you decide to just hold onto the loans or cut back on originating them?

Well, in terms of whether we hold or sell, we actually are always considering that and so, you know, we’ll make that decision at some point if we feel that it just isn’t economic to sell the loan. On the production side, we know that production is down, but I think we still are very much interested in staying in the program and continuing to be a leader in the SBA loan business. Joe Gladue – B. Riley and Co.: Okay and I guess just finally again on the looking forward, tax rate I guess you said there is some, you know, it was lower this quarter due to some tax credits. You know, I guess the 41% we saw this quarter, is that a good rate to use going forward or—

Yes, I think that’s a good run rate. Joe Gladue – B. Riley and Co.: Okay. Alright. Thank you. That’s it.

Our next question comes from Chris Stuplin with D.A. Davidson. Please go ahead. Chris Stuplin – D.A. Davidson & Co.: Good morning.

Good morning. Chris Stuplin – D.A. Davidson & Co.: Most of my questions have been answered except one. Just following you guys, relatively new. You mentioned, you know, virtually no exposure to the inland empire. Exactly what is your exposure to that section of California?

We couldn’t hear what you were saying. Might be too far from the mic or something. Chris Stuplin – D.A. Davidson & Co.: I’m sorry. What is your Inland Empire exposure? How much is that? You say there’s Virtually–

Yes, virtually we have no exposure in that market.

Yes, it is so insignificant. It doesn’t even come close to a percentage. Chris Stuplin – D.A. Davidson & Co.: Okay and all the rest of my questions have been answered. Thank you very much.

Our next question comes from Sean Ryan with Sterne Agee and Leach. Please go ahead. Sean Ryan – Sterne Agee & Leach Inc.: Good morning. One last question. You say delinquencies $12.6 million of them were either brought current or sold? Can you please give us a breakout of how much of that $12.6 was actually sold?

Yes, we sold two loans, approximately $3.2 million and $7.5, one the large loan, and another $1.5 million, so a total of about $9 million that was brokered. Sean Ryan – Sterne Agee & Leach Inc.: So the $7.5 and the $1.5 were the ones that were brought current.

Right. Sean Ryan – Sterne Agee & Leach Inc.: Okay, thank you very much.

And there appear to be no further questions in the queue. I’d like to turn the call back over to management for any concluding remarks they may have.

Well, once again, thank you all for joining us today. We’ll look forward to speaking with you again next quarter.

Ladies and gentlemen, this does conclude the First Quarter 2008 Nara Bancorp Earnings Conference Call. You may now disconnect and we thank you for using ATT Conferencing.