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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | 9. INCOME TAXES A summary of income tax provision (benefit) follows for the years ended December 31:
|  | Current |  |  | Deferred |  |  | Total |
|  | (In thousands) |
2011 |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 4,154 |  |  | $ | 7,614 |  |  | $ | 11,768 |
State |  |  | 2,810 |  |  |  | 1,082 |  |  |  | 3,892 |
|  | $ | 6,964 |  |  | $ | 8,696 |  |  | $ | 15,660 |
2010 |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (463 | ) |  | $ | (4,906 | ) |  | $ | (5,369 | )
State |  |  | 473 |  |  |  | (3,004 | ) |  |  | (2,531 | )
|  | $ | 10 |  |  | $ | (7,910 | ) |  | $ | (7,900 | )
2009 |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 469 |  |  | $ | (4,497 | ) |  | $ | (4,028 | )
State |  |  | (296 | ) |  |  | (1,875 | ) |  |  | (2,171 | )
|  | $ | 173 |  |  | $ | (6,372 | ) |  | $ | (6,199 | )
A reconciliation of the difference between the federal statutory income tax rate and the effective tax rate is shown in the following table for the years ended December 31:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Statutory tax rate (benefit) |  |  | 35 | % |  |  | (35 | )% |  |  | (35 | )%
State taxes (benefit)-net of federal tax effect |  |  | 6 |  |  |  | (11 | ) |  |  | (12 | )
CRA investment tax credit |  |  | (3 | ) |  |  | (4 | ) |  |  | (4 | )
Other |  |  | (1 | ) |  |  | (2 | ) |  |  | (1 | )
|  |  | 37 | % |  |  | (52 | )% |  |  | (52 | )%
Deferred tax assets and liabilities at December 31, 2011 and 2010 are comprised of the following:
|  | 2011 |  |  | 2010 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Purchase accounting fair value adjustment |  | $ | 46,957 |  |  | $ | 0 |
Statutory bad debt deduction less than financial statement provision |  |  | 28,881 |  |  |  | 29,160 |
Net operating loss carryforward |  |  | 6,901 |  |  |  | 6,600 |
Capital loss carryforward |  |  | 53 |  |  |  | 0 |
Investment security provision |  |  | 1,657 |  |  |  | 802 |
Lease expense |  |  | 1,653 |  |  |  | 1,510 |
State tax deductions |  |  | 799 |  |  |  | 1 |
Accrued compensation |  |  | 106 |  |  |  | 469 |
Deferred compensation |  |  | 625 |  |  |  | 452 |
Mark to market on loans held for sale |  |  | 2,158 |  |  |  | 801 |
Depreciation |  |  | 1,180 |  |  |  | 540 |
Nonaccrual loan interest |  |  | 53 |  |  |  | 645 |
Other real estate owned |  |  | 475 |  |  |  | 205 |
Tax credits |  |  | 0 |  |  |  | 1,191 |
Other |  |  | 2,072 |  |  |  | 733 |
Non-qualified stock option and restricted unit expense |  |  | 1,486 |  |  |  | 1,549 |
Goodwill |  |  | 1,126 |  |  |  | 0 |
Amortization of intangibles |  |  | 0 |  |  |  | 324 |
|  | $ | 96,182 |  |  | $ | 44,982 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
FHLB stock dividends |  | $ | (1,428 | ) |  | $ | (490 | )
Deferred loan costs |  |  | (1,439 | ) |  |  | (1,018 | )
State taxes deferred and other |  |  | (8,409 | ) |  |  | (3,692 | )
Prepaid expenses |  |  | (955 | ) |  |  | (1,013 | )
FDIC loss share receivable |  |  | (3,081 | ) |  |  | 0 |
Amortization of intangibles |  |  | (953 | ) |  |  | 0 |
Unrealized gain on securities available for sale |  |  | (7,210 | ) |  |  | (1,628 | )
Unrealized gain on interest rate swaps |  |  | (17 | ) |  |  | (35 | )
Unrealized gain on interest only strips |  |  | (33 | ) |  |  | (34 | )
|  |  | (23,525 | ) |  |  | (7,910 | )
Valuation allowance on capital loss carryforward |  |  | (53 | ) |  |  | 0 |
Net deferred tax assets: |  | $ | 72,604 |  |  | $ | 37,072 |
At December 31, 2011, the Company had capital loss carryforwards of approximately $53 thousand. The Company has evaluated the available evidence supporting the realization of its deferred tax assets and determined that it is not more likely than not that the Company would generate future capital gains to offset the capital loss carryforwards, and accordingly, the Company has recorded a valuation allowance against the capital loss carryforwards of $53 thousand. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, the forecasts of future income, applicable tax planning strategies, and assessments of current and future economic and business conditions. This analysis is updated quarterly and adjusted as necessary. Based on the analysis, the Company has determined that except for the valuation allowance against the capital loss carryforwards of $53 thousand, a valuation allowance for deferred tax assets was not required as of December 31, 2011. A summary of the Company's net operating loss carry-forwards is as follows:
|  | FEDERAL |  |  | STATE |
|  | Remaining Amount |  |  | Expires |  |  | Annual Limitation |  |  | Remaining Amount |  |  | Expires |  |  | Annual Limitation |
|  | (In thousands) |
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nara Ownership Change |  | $ | 0 |  |  |  | N/A |  |  | $ | 0 |  |  | $ | 124 |  |  |  | 2016 |  |  | $ | 83 |
Korea First Bank of New York |  |  | 3,973 |  |  |  | 2019 |  |  |  | 497 |  |  |  | 0 |  |  |  | N/A |  |  |  | 0 |
Asiana |  |  | 1,146 |  |  |  | 2015 |  |  |  | 348 |  |  |  | 723 |  |  |  | 2014 |  |  |  | 348 |
Nara Bank Net Operating Loss |  |  | 0 |  |  |  | N/A |  |  |  | N/A |  |  |  | 12,539 |  |  |  | 2031 |  |  |  | 12,539 |
Center Bank Net Operating Loss |  |  | 0 |  |  |  | N/A |  |  |  | N/A |  |  |  | 37,394 |  |  |  | 2031 |  |  |  | 13,356 |
Total |  | $ | 5,119 |  |  |  |  |  |  | $ | 845 |  |  | $ | 50,780 |  |  |  |  |  |  | $ | 26,326 |
2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nara Ownership Change |  | $ | 0 |  |  |  | N/A |  |  | $ | 0 |  |  | $ | 124 |  |  |  | 2015 |  |  | $ | 83 |
Korea First Bank of New York |  |  | 4,967 |  |  |  | 2019 |  |  |  | 497 |  |  |  | 0 |  |  |  | N/A |  |  |  | 0 |
Asiana |  |  | 1,841 |  |  |  | 2015 |  |  |  | 348 |  |  |  | 723 |  |  |  | 2013 |  |  |  | 348 |
Nara Bank Net Operating Loss |  |  | 8,323 |  |  |  | 2025 |  |  |  | N/A |  |  |  | 11,735 |  |  |  | 2030 |  |  |  | N/A |
Total |  | $ | 15,131 |  |  |  |  |  |  | $ | 845 |  |  | $ | 12,582 |  |  |  |  |  |  | $ | 431 |
For the 2010 and 2011 tax years, the state of California suspended the utilization of Net Operating Losses ("NOLs"). Suspended NOLs for 2010 and 2011 will be allowed additional carryover periods of two years and one year, respectively. The Company and our subsidiaries are subject to U.S. federal income tax as well as income tax of the state of California and various other state income taxes. The statute of limitations related to the consolidated Federal income tax return is closed for all tax years up to and including 2007. The expiration of the statute of limitations related to the various state income tax returns that the Company and subsidiaries file, varies by state. The Company is currently under examination by New York City for the 2007, 2008, and 2009 tax years. While the outcome of the examination is unknown, the Company expects no material adjustments. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2011 and 2010 is as follows:
|  | 2011 |  |  | 2010 |
|  | (In thousands) |
Balance at January 1, |  | $ | 276 |  |  | $ | 215 |
Additions based on tax positions related to the current year |  |  | 101 |  |  |  | 52 |
Additions based on tax positions related to the prior year |  |  | 192 |  |  |  | 9 |
Balance at December 31, |  | $ | 569 |  |  | $ | 276 |
The total amount of unrecognized tax benefits was $569 thousand at December 31, 2011 and $276 thousand at December 31, 2010 and is primarily for uncertainties related to California enterprise zone loan interest deductions taken in prior years. The total amount of tax benefits that, if recognized, would favorably impact the effective tax rate was $420 thousand and $202 thousand at December 31, 2011 and 2010, respectively. The amount of unrecognized tax benefits increased due to the current year accrual of $101 thousand and additional accrual of $192 thousand for prior years. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company had approximately $77 thousand and $35 thousand for interest and penalties accrued at December 31, 2011 and 2010, respectively.

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- Definition Description containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 + Details
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