Nara Bancorp’s profit drops 7%

Los Angeles-based Nara Bancorp Inc. on Monday reported first-quarter profit that missed analysts’ estimates, as new lending shrank while deposit costs jumped from a year earlier.

The parent of Nara Bank said it earned $7.3 million, or 28 cents a share, down 7% from $7.9 million, or 30 cents, a year earlier. Analysts had expected profit of 31 cents.

Nara, which has $2.1 billion in assets and 18 branches, mostly in Southern California, said new lending was down 24% from a year earlier because of a “highly competitive” market. The bank, which focuses on loans for small businesses and commercial real estate, said it was adjusting its pricing to boost lending.

Nara said nonperforming loans, meaning those that aren’t current on payments, rose to $8.7 million, or 0.5% of total loans as of March 31, up from $4.6 million, or 0.3%, a year earlier.

But Min Kim, Nara’s chief executive, said the bank’s asset quality “remains healthy, and we do not see any trends to indicate that our credit costs will exceed our expected range” in 2007.

The earnings were reported after markets closed. Nara’s stock fell 2 cents to $16.51, a 52-week low, before the report.