Nara Bank CEO departs in a hurry; stock skids
Note: An earlier version of this story mistakenly quoted analyst Chris Stulpin as saying Min Kim had been "head banging" with Nara's directors instead of "head butting."
The abrupt resignation of Nara Bancorp Inc.’s chief executive sent shares of the Koreatown bank tumbling today as investors worried over the stability of an institution that had been seen as a probable acquirer of rival Korean American banks.
Nara said late Wednesday that the CEO, Min Kim, had resigned "to pursue personal interests." Although investors at first feared that might foreshadow trouble when Nara reports its results next week, analyst W. Chris Stulpin of D.A. Davidson & Co. said the "educated speculation" was that Kim had departed after "head-butting with the board of directors."
It wasn’t clear what was involved, but Stulpin and Sandler O’Neill analyst Aaron Deer said they did not think major new financial problems were emerging.
Kim, 50, worked for Nara for 15 years. She was named CEO in late 2006, becoming the first woman to lead a Korean American bank. She could not be reached for comment.
She was replaced by Alvin Kang, 65, who had been Nara’s executive vice president and chief financial officer.
Deer said Kim had successfully shepherded Nara through a difficult period as it, like many other smaller Southern California banks, struggled with trouble in their commercial real estate loans. The bank has been seen as a survivor, having garnered a U.S. Treasury investment of $67 million in November 2008 and then raising $82 million in a common stock offering this October.
The dozen Korean American banks in Southern California have long seemed ripe for consolidation, and Nara has said it hoped to be able to acquire a failed rival with help from the Federal Deposit Insurance Corp. But Kim’s sudden departure "will look like a black eye to the FDIC" because Nara appears less stable, Stulpin said.
Nara shares sank as much as 19% today before recovering somewhat to close at $9.50, down 46 cents, or 4.6%.
-- E. Scott Reckard