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As filed with the Securities and Exchange Commission on April 2, 2001.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2000

or

For the transition period from                to                

NARA BANCORP, INC.
(Exact name of Registrant as specified in its charter)

3701 Wilshire Boulevard
Suite 220
Los Angeles, California 90010
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (213) 639-1700

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share
                                                                                            (Title of Class)

    Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/  No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / /

    The aggregate market value of the Common Stock held by non-affiliates of the Registrant based upon the closing sale price of the Common Stock on March 22, 2001, as reported on the Nasdaq National Market, was approximately $56,881,929. Shares of Common Stock held by each executive officer and director and each person owning more than 5% of the outstanding Common Stock of the Registrant have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

    Number of shares outstanding of the Registrant's Common Stock, as of March 22, 2001: 5,470,779

    Portions of the Definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 16, 2001 are incorporated by reference into Part III of this Form 10-K

Table of Contents

PART I

Recent Development

    On March 28, 2001, Bancorp, through a newly formed wholly-owned subsidiary, Nara Bancorp Capital Trust I ("Nara Capital"), a Delaware statutory business trust, completed a private offering of $10 million of trust preferred securities, issued as part of a pooled offering with several other financial institutions.

    The trust preferred securities bear a 10.18% fixed rate of interest payable semi-annually. Nara Capital used the proceeds from the sale of the trust preferred securities to purchase junior subordinated deferrable interest debentures of Bancorp. Bancorp intends to invest a portion of the net proceeds in Nara Bank to increase the Bank's capital levels and intends to use the remaining net proceeds for general corporate purposes. Under applicable regulatory guidelines, Bancorp expects that the trust preferred securities will qualify as Tier I Capital.

Forward-Looking Information

    Certain matters discussed in this Annual Report on Form 10-K may constitute forward-looking statements under Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market and statements regarding the Company's mission and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the word "will," "believes," "expects," "anticipates," "intends," "plans," "estimates" or similar expressions. The Company's actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in such forward-looking statements. For discussion of the factors that might cause such a difference, see Item 1. "Business—Business Considerations and Certain Factors that May Affect Future Results of Operations and Stock Price."

Item 1 BUSINESS

    Nara Bancorp, Inc. ("Bancorp" or the "Parent") is a bank holding company offering a full range of commercial banking and consumer financial services through its wholly owned subsidiary, Nara Bank, N.A., a national bank (the "Bank"). During the first quarter of 2001, Bancorp became a bank holding company regulated by the Board of Governors of the Federal Reserve System (the "Federal Reserve") as part of the reorganization of the Bank into a holding company formation. See "Nara Bank, N.A." below. Unless the context otherwise indicates, the "Company" refers to Bancorp and its wholly owned subsidiary, the Bank.

    As of December 31, 2000, no shares of Bancorp's common stock were outstanding. As described in this report, Bancorp succeeded to the business and operations of the Bank upon consummation of reorganization of the Bank into the holding company structure, effective as of February 2, 2001. A registration statement on Form S-4 with respect to Bancorp's common stock was declared effective on December 6, 2000. Upon consummation of the reorganization, Bancorp had 5,467,942 shares of common stock outstanding, all of which were authorized for quotation on the Nasdaq National Market. Prior to the completion of the reorganization, Bancorp had no material operations or assets. The Company's principal business is to serve as a holding company for the Bank and other bank or bank related subsidiaries, which the Company may establish or acquire.

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Nara Bank, N.A.

    The Bank conducts its operations through 12 branch offices and 3 loan production offices. The Bank's headquarters office is located at 3701 Wilshire Boulevard, Suite 220, Los Angeles, California 90010. Its telephone number is (213) 639-1700. On February 25, 2000, the Bank acquired Korea First Bank of New York for a purchase price of approximately $8.7 million and thereby took over its three New York City branches. In August of 2000, the Bank opened its twelfth office in Oakland, California and in September of 2000, the Bank established a loan production office in the State of New Jersey named "Nara Loan Center Corporation," which is a wholly owned subsidiary of the Bank. The FDIC insures the Bank's deposits up to the maximum legal limits and the Bank is a member of the Federal Reserve System.

    In September 2000, the Bank filed an application with the Office of the Comptroller of the Currency ("Comptroller") to reorganize into a holding company formation with Bancorp as the Bank's parent holding company. In January 2001, the Bank and Bancorp received all of the necessary regulatory approvals, and, on February 2, 2001, completed the reorganization of the Bank into the holding company formation. The Bank adopted a holding company structure primarily to take advantage of the greater market opportunities that would be available to a holding company.

    The Bank offers a full range of commercial banking and consumer financial services for its customers: individuals and small- to medium-sized businesses in its market areas. The Bank accepts deposits and originates a variety of loans including commercial loans, trade finance, Small Business Administration (SBA) loans, automobile and various consumer loans. The Bank also offers equipment lease financing and factoring services. To better meet its customers' needs, the Bank's mini-market branches generally offer extended hours from 10 a.m. to 8 p.m. Each of the Bank's branches, except for the Wilshire and Downtown Offices, operates 24-hour automated teller machines. The Bank provides courier services to qualifying clients and has personal banking officers for the Bank's key customers to better support their banking needs. The Bank honors merchant drafts for both VISA and MasterCard and provides debit cards services to its customers. In addition, the Bank offers travelers' checks, safe deposit boxes, notary public and other customary bank services. The Bank also offers 24-hour banking by telephone and recently upgraded its website at www.narabank.com. Its newly created website features both English and Korean applications and Internet banking services.

    A significant amount of the Bank's operating income and net income depends on the difference between the interest revenue received from interest-earning assets and the interest expense paid on interest-bearing liabilities. However, interest rates are highly sensitive to many factors that are beyond the Bank's control, such as general economic conditions and the policies of various governmental and regulatory authorities, in particular those of the Federal Reserve Board. Although the business of the Bank may vary with local and national economic conditions, such variations do not appear to be seasonal in nature.

Loan Portfolio

    The Bank's net loans totaled approximately $355 million as of December 31, 2000, accounting for 66.7% of the Bank's total interest-earning assets of $532 million. Total loans consist of: commercial loans, including lease financing, of approximately $139.5 million; real estate and construction loans of approximately $177.8 million; consumer loans of approximately $45.5 million; less deferred loan fees of $177,000 and allowance for loan losses of $7.9 million at December 31, 2000. These loans are carried at face amount, less payments collected, net of deferred loan originating fee, and the allowance for loan losses. Interest on all loans is accrued daily on a simple interest basis. Loans are placed on a non-accrual basis when principal and interest on a loan is past due 90 days or more, unless a loan is both well secured and in process of collection. Once a loan is placed on non-accrual status, accrual of interest is discontinued and previously accrued interest is reversed.

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    The rates of interest charged on variable rate loans are set at specified increments in relation to the Bank's prime lending rate and, accordingly, vary as the Bank's prime lending rate varies. A majority of the Bank's loans (approximately 78.2% of the Bank's loans at December 31, 2000) are variable rate loans. While most of these loans are secured loans, the Bank is permitted with certain exceptions, under applicable law, to make unsecured loans to individual borrowers in aggregate amounts of up to 15% of the sum of the Bank's total capital and the allowance for loan losses, as defined for regulatory purposes. As of December 31, 2000, these lending limits for the Bank were approximately $8.0 million for unsecured loans. For the purpose of lending limits, a secured loan is defined as a loan secured by readily marketable collateral having a current market value of at least 100% of the amount of the loan or extension of credit at all times. In addition to unsecured loans, the Bank is permitted to make loans secured by such collaterals in an additional amount up to 10% of the Bank's total capital and the allowance for loan losses.

    The following table shows the composition of the Bank's loan portfolio by type of loan on the dates indicated (dollars in thousands):

*

Includes loans held for sale in commercial loans; $168,250 in 1999 and $415,138 in 1998

Commercial Loans

    Commercial loans are made primarily for the purposes of providing working capital or financing the purchase of inventory and equipment and for other business purposes. Short term business loans (due within one year), referred to as Business Lines of Credit, generally are used to finance current transactions and typically provide for periodic interest payments, with principal being payable at maturity. Term loans (1 to 25 years) normally provide for monthly payments of both principal and interest. The credit-worthiness of the borrower is reviewed on a periodic basis, and most loans are collateralized by inventory, equipment and/or real estate.

Trade Finance

    The Bank has established the Trade Finance Department to serve international trade customers. This department issues and advises letters of credit for export and import businesses. It also purchases

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bills from export businesses at discounts and makes loans to international traders. These loans are usually collateralized with inventories and accounts receivables. As of December 31, 2000, outstanding letters of credit, including domestic letters of credit totaled $26 million.

Real Estate Loans

    The Bank's real estate loans consist primarily of loans secured by deeds of trust on commercial properties and are normally written for a short duration. It is the Bank's policy to restrict real estate loans to 70% of the Bank's appraised value of the property. The Bank offers both fixed and floating rate loans. While maturities on such loans are generally restricted to seven years (on an amortization ranging from 10 to 15 years with a balloon payment due at maturity), the Bank has occasionally made longer term (up to 25 years) fully amortizing loans.

Small Business Administration Loans

    The Bank's Small Business Administration (SBA) loans typically are made for the purpose of providing working capital, financing the purchase of equipment or inventory, financing the purchase of a business, debt refinancing, or financing the purchase or construction of owner occupied commercial property. The SBA loans typically are term loans with maturities ranging from 7 to 25 years. These loans normally provide for floating interest rates, with monthly payments of both principal and interest.

    The Bank's SBA lending represents an important portion of its loan portfolio because of its ability to sell the guaranteed portion in the secondary market at a premium, while earning servicing fees on the sold portion over the remaining life of the loan. Thus, in addition to the yield earned on the portion of the SBA loans retained by the Bank, the Bank recognizes gains on the sale and revenue for the loan services provided for the loans sold into the secondary market.

    The Bank established a separate SBA loan department to expedite its services related to SBA loans. The SBA loan department is staffed by loan officers who provide assistance to qualified individuals and existing businesses. The Bank attained SBA Preferred Lenders status in the Los Angeles and Santa Ana districts on January 16, 1997. SBA Preferred Lender status is the highest designation awarded by the SBA and generally facilitates the marketing and approval process for new SBA loans. On February 24, 1999, the Bank attained Preferred Lender status in the New York, Chicago, San Francisco, Seattle, and Spokane districts.

Consumer Loans

    Most of the Bank's consumer loans consist of automobile loans. Nara Bank began originating automobile loans in early 1995. Referrals from automobile dealers comprise the majority of originations of such loans. The Bank also offers fixed-rate loans to buyers of new and previously owned automobiles, who are not qualified for automobile dealers' most preferential loan rates. During 2000, these loans increased to $33.9 million from $25.9 million at December 31, 1999 and $24.7 million at December 31, 1998.

Lines of Credit

    The Bank extends lines of credit to business customers usually on an annual review basis. The Bank's undisbursed commercial loan commitments at December 31, 2000, 1999 and 1998 were

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$87.9 million, $56.3 million and $47.7 million, respectively. The following table shows the Bank's loan commitments and letters of credit outstanding at the dates indicated (in thousands):

Concentrations

    Loan concentrations are considered to exist when there are significant amounts of loans to a multiple number of borrowers engaged in similar activities, which would cause them to be similarly impacted by economic or other conditions. The following table describes the industry concentrations in the Bank's loan portfolio which exceeded 10% of the Bank's total loans as of the dates indicated (in thousands):

Other Real Estate Owned

    Assets classified as other real estate owned ("OREO") include foreclosed real estate owned by the Bank. The Bank owned other real estate, taken through foreclosure, in the aggregate amount of approximately $300,000 and $57,000 at December 31, 2000, and 1999, respectively. The Bank reserved $37,000 and $13,000 at December 31, 2000 and 1999, respectively, as a valuation allowance, while there was no valuation allowance at December 31, 1998. The Bank incurred expenses of $90,748, $16,628 and $10,612 and earned income of $0, $906 and $5,400 from these properties in 2000, 1999 and 1998, respectively. The following table summarizes the Bank's OREO at the dates indicated (dollars in thousands):

    Nonaccrual loans increased $0.5 million or 33.3% to $2.0 million at year-end 2000 from $1.5 million at year-end 1999. This increase was primarily due to one exposure of $1.2 million, which was subsequently charged-off in February of 2001.

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    The allowance for loan losses increased $4.3 million or 119.4% to $7.9 million at year ended 2000, from $3.6 million at year ended 1999. The allowance increased $683,000 or 23.1% in 1999 from $3.0 million in 1998. Approximately $7.9 million of loan loss reserve came from Korea First Bank of New York. During the year 2000, the Bank charged off approximately $6.6 million and recovered $4.0 million. Specific reserves for impaired loans in accordance with SFAS No. 114, were $1.9 million at year-end 2000, compared to $1.0 million at year-end 1999 and $1.4 million at year-end 1998. The Bank's management and Board of Directors review the adequacy of the allowance for loan losses at least quarterly. Based upon these evaluations and internal and external reviews of the overall quality of the Bank's loan portfolio, management and the Board of Directors believe that the allowance for loan losses was adequate as of December 31, 2000, to absorb estimated losses associated with the loan portfolio. However, no assurances can be given as to whether the Bank will experience further losses in excess of the allowance, which may require additional provisions for loan loss reserves. If there are further losses, they may have a negative impact on the Bank's earnings.

Investment Security Portfolio

    The main objectives of the Bank's investment strategy are to support a sufficient level of liquidity while providing means to plan and maintain the Bank's interest rate position, and to generate an adequate level of interest income without taking undue risks. The Bank's present policy permits investment in various types of securities, certificates of deposits and federal funds sold in compliance with various restrictions in the policy. The Bank may invest in any bond rated "BBB" or higher. The Bank's policy states that the Bank's Investment Officer (or Chief Financial Officer in the absence of Investment Officer) may make most investments pursuant to the Investment Policy only with approval from the President of the Bank.

    The Bank classifies its securities as held-to-maturity or available-for-sale. The securities that the Bank has the ability and intent to hold to maturity are classified as held-to-maturity securities. All other securities are classified as available-for-sale. The Bank owned no trading securities at December 31, 2000 or 199. As of December 31, 2000, held-to-maturity securities totaled $15.7 million, compared to $17.3 million at December 31,1999, and the available-for-sale securities totaled $54.9 million at December 31, 2000, compared to $16.0 million at December 31, 1999. The securities held by the Bank are government sponsored agency bonds and corporate bonds. The Bank held securities with amortized cost of about $4.2 million and $3.5 million, which it pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2000 and 1999, respectively. This investment portfolio composition reflects the Bank's investment strategy.

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    The following table summarizes the maturity of securities and their pertinent weighted average yield ratios at the dates and for the periods indicated (dollars in thousands):

Deposits

    The Bank's primary source of funds are FDIC-insured deposits. The Bank tries to match its interest-bearing liabilities with its interest-earning assets. The Bank's deposits consist of demand deposits, savings deposits, money market, super-NOW, and time deposits with various maturities. The Bank covers all volatile funds with liquid assets as a method to ensure adequate liquidity. Thus, the Bank analyzes its deposits' maturity and interest rates to monitor and control the cost of funds and review the stability of its supply of funds. Management believes its deposits are a stable and reliable funding source.

    When the Bank has more funds than the amount it requires for its reserve requirements or short-term liquidity needs, it sells federal funds to other financial institutions. Conversely, when the Bank has less funds than required, the Bank is allowed to borrow funds from both its corresponding banks and the Federal Reserve Bank (FRB). The maximum amount which the Bank is currently authorized to borrow from its correspondent banks is $13 million on overnight basis. The maximum amount which the Bank may borrow from the FRB discount window is 93% of the market value of the pledged security with the FRB, which amount was $2.6 million at December 31, 2000.

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    The following table sets forth information for the periods indicated regarding the balances of the Bank's deposits by category.

Other Borrowings

    On September 31, 1999, the Bank issued five-year subordinated capital notes in the aggregate amount of $4.3 million with a stated interest rate of 9 percent, maturing on September 30, 2004. Interest on the notes is payable quarterly and no scheduled payments of principal are due prior to maturity. The Bank may redeem the notes prior to their maturity as of, or after, September 30, 2002. The notes qualify as Tier 2 risk-based capital under the Comptroller of guidelines for assessing regulatory capital. For the total risk-based capital ratio, the amount of notes that qualify as capital is reduced as those notes approach maturity. At December 31, 2000, $2.6 million, which represents 60% of the total outstanding amount of the notes, qualified as risk-based capital.

    During 2000, the Bank established a lending line with the FHLB of San Francisco. Advances may be obtained from the FHLB of San Francisco to supplement our supply of lendable funds. Advances from the FHLB of San Francisco are typically secured by a pledge of mortgage loans and/or secuirities, with a market value at least equal to outstanding advances. At December 31, 2000, the Bank had $5.0 million of advances outstanding, all collateralized with securities pledged by the Bank. The borrowing has a seven-year, fixed-rate term.

Employees

    As of December 31, 2000, the Bank had 239 full-time equivalent employees and Bancorp had none. The Bank also had 27 part-time employees at December 31, 2000. The Bank's employees are not represented by a union or covered by a collective bargaining agreement. The Bank has entered into a written employment agreement with Benjamin B. Hong, its President and Chief Executive Officer. The Bank does not have any other written contracts with its other employees. Bancorp currently has no employees. Management believes that its relations with its employees are good.

Competition

    The banking and financial services industry generally, and in our market areas specifically, including California and New York City, is highly competitive. The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems, and the accelerating pace of consolidation among financial services providers. We compete for loans, deposits, and customers with other commercial banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market funds, credit unions, and other nonbank financial service providers. Many of these competitors are much larger in total assets and capitalization, have greater access to capital markets and offer a broader range of financial services than we do. In addition, recent federal legislation may have the

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effect of further increasing the pace of consolidation within the financial services industry. See "Item 1. Business—Supervision and Regulation—Financial Services Modernization Legislation."

Economic Conditions, Government Policies, Legislation, and Regulation

    Our profitability, like most financial institutions, primarily depends on interest rate differentials. In general, the difference between the interest rates paid by the Bank on interest-bearing liabilities, such as deposits and other borrowings, and the interest rates received by the Bank on its interest-earning assets, such as loans extended to its clients and securities held in its investment portfolio, comprise the major portion of our earnings. These rates are highly sensitive to many factors that are beyond our control, such as inflation, recession and unemployment, and the impact which future changes in domestic and foreign economic conditions might have on our performance cannot be predicted.

    Our business also is influenced by the monetary and fiscal policies of the federal government and the policies of regulatory agencies, particularly the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). The Federal Reserve Board implements national monetary policies (with objectives such as curbing inflation and combating recession) through its open-market operations in U.S. Government securities by adjusting the required level of reserves for depository institutions subject to its reserve requirements, and by varying the target federal funds and discount rates applicable to borrowings by depository institutions. The actions of the Federal Reserve Board in these areas influence the growth of bank loans, investments, and deposits and also affect interest rates earned on interest-earning assets and paid on interest-bearing liabilities. The nature and impact on the Company of any future changes in monetary and fiscal policies cannot be predicted.

    From time to time, legislation, as well as regulations, is enacted which has the effect of increasing the cost of doing business, limiting or expanding permissible activities, or affecting the competitive balance between banks and other financial services providers. Proposals to change the laws and regulations governing the operations and taxation of banks, bank holding companies, and other financial institutions and financial services providers are frequently made in the U.S. Congress, in the state legislatures, and before various regulatory agencies. This legislation may change banking statutes and the operating environment of Bancorp and its subsidiaries in substantial and unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. We cannot predict whether any of this potential legislation will be enacted, and if enacted, the effect that it, or any implementing regulations, would have on our financial condition or results of operations of us or any of our subsidiaries. See "Item 1. Business—Supervision and Regulation."

Supervision and Regulation

General

    Bank holding companies and banks are extensively regulated under both federal and state law. This regulation is intended primarily for the protection of depositors and the deposit insurance fund and not for the benefit of our stockholders. Set forth below is a summary description of the material laws and regulations which relate to the operations of Bancorp and the Bank. The description is qualified in its entirety by reference to the applicable laws and regulations.

Nara Bancorp

    Nara Bancorp, as a registered bank holding company, is subject to regulation under the Bank Holding Company Act of 1956, as amended (the "BHCA"). We are required to file with the Federal Reserve Board periodic reports and such additional information as the Federal Reserve Board may require pursuant to the BHCA. The Federal Reserve Board may conduct examinations of us and our

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subsidiaries. Further, we are required by the Federal Reserve Board to maintain certain minimum levels of capital. See "Item 1. Business—Capital Standards."

    The Federal Reserve Board may require that we terminate an activity or terminate control of or liquidate or divest certain subsidiaries or affiliates when the Federal Reserve Board believes the activity or the control of the subsidiary or affiliate constitutes a significant risk to the financial safety, soundness or stability of any of its banking subsidiaries. The Federal Reserve Board also has the authority to regulate provisions of certain bank holding company debt, including the authority to impose interest ceilings and reserve requirements on such debt. Under certain circumstances, we must file written notice and obtain approval from the Federal Reserve Board prior to purchasing or redeeming its equity securities.

    We are required to obtain the prior approval of the Federal Reserve Board for the acquisition of more than 5% of the outstanding shares of any class of voting securities or substantially all of the assets of any bank or bank holding company. Prior approval of the Federal Reserve Board is also required for our merger or consolidation with another bank holding company.

    We are prohibited by the BHCA, except in certain statutorily prescribed instances, from acquiring direct or indirect ownership or control of more than 5% of the outstanding voting shares of any company that is not a bank or bank holding company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks, or furnishing services to its subsidiaries. However, subject to the prior approval of the Federal Reserve Board, we may engage in any, or acquire shares of companies engaged in, activities that are deemed by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. We may elect to exercise other investment and activity authority pursuant to new financial service modernization. See "Item I. Business—Supervision and Regulation—Financial Services Modernization Legislation"

    Under Federal Reserve Board regulations, a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner. In addition, it is the Federal Reserve Board's policy that a bank holding company should stand ready to use available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks. A bank holding company's failure to meet its obligations to serve as a source of strength to its subsidiary banks will generally be considered by the Federal Reserve Board to be an unsafe and unsound banking practice or a violation of the Federal Reserve Board's regulations or both.

    The Company is also a bank holding company within the meaning of Section 3700 of the California Financial Code. As such, the Company and its subsidiaries are subject to examination by, and may be required to file reports with, the California Department of Financial Institutions.

    The Company's securities are registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, the Company is subject to the information, proxy solicitation, insider trading, and other requirements and restrictions of the Exchange Act.

Nara Bank

    Nara Bank, as a national banking association, is subject to primary supervision, examination, and regulation by the Office of the Comptroller of the Currency (the "Comptroller"). In addition, the Bank is subject to regulations of the Federal Deposit Insurance Corporation ("FDIC") as administrator of the Bank Insurance Fund ("BIF") and the Federal Reserve Board. If, as a result of an examination of Nara Bank, the Comptroller should determine that the financial condition, capital resources, asset

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quality, earnings prospects, management, liquidity or other aspects of the Bank's operations are unsatisfactory or that the Bank or its management is violating or has violated any law or regulation, various remedies are available to the Comptroller. Such remedies include the power to enjoin "unsafe or unsound practices," to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in capital, to restrict the growth of the Bank, to assess civil monetary penalties, and to remove officers and directors. The FDIC has similar enforcement authority, in addition to its authority to terminate the Bank's deposit insurance in the absence of action by the Comptroller and upon a finding that the Bank is in an unsafe or unsound condition, is engaging in unsafe or unsound activities, or that its conduct poses a risk to the deposit insurance fund or may prejudice the interest of its depositors.

    Various requirements and restrictions under the laws of the United States and the State of California affect the operations of the Bank. Federal and California statutes and regulations relate to many aspects of the Bank's operations, including reserves against deposits, ownership of deposit accounts, interest rates payable on deposits, loans, investments, mergers and acquisitions, borrowings, dividends, locations of branch offices and new products and services. Further, the Bank is also required to maintain certain minimum levels of capital. See "Capital Standards."

Financial Services Modernization Legislation

    General.  On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley Act of 1999 (the "Financial Services Modernization Act"). The Financial Services Modernization Act repeals the two affiliation provisions of the Glass-Steagall Act: Section 20, which restricted the affiliation of Federal Reserve member banks with firms "engaged principally" in specified securities activities; and Section 32, which restricts officer, director, or employee interlocks between a member bank and any company or person "primarily engaged" in specified securities activities. In addition, the Financial Services Modernization Act also contains provisions that expressly preempt any state law restricting the establishment of financial affiliations, primarily related to insurance. The general effect of the law is to establish a comprehensive framework to permit affiliations among commercial banks, insurance companies, securities firms, and other financial service providers by revising and expanding the BHCA framework to permit a bank holding company system to engage in a full range of financial activities through a new operating status known as a financial holding company

    The law also:

•

Broadens the activities that may be conducted by national banks, banking subsidiaries of bank holding companies, and their financial subsidiaries;



•

Provides an enhanced framework for protecting the privacy of consumer information;



•

Adopts a number of provisions related to the capitalization, membership, corporate governance, and other measures designed to modernize the Federal Home Loan Bank system;



•

Modifies the laws governing the implementation of the Community Reinvestment Act; and



•

Addresses a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions.

    Bancorp and the Bank do not believe that the Financial Services Modernization Act will have a material adverse effect on their operations in the near-term. However, to the extent that it permits banks, securities firms, and insurance companies to affiliate, the financial services industry may experience further consolidation. The Financial Services Modernization Act is intended to grant to community banks certain powers as a matter of right that larger institutions have accumulated on an ad hoc basis. Nevertheless, this Act may have the result of increasing the amount of competition that we

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face from larger institutions and other types of companies offering financial products, many of which may have substantially more financial resources than we do.

    Financial Holding Companies.  Bank holding companies that elect to become a financial holding company may affiliate with securities firms and insurance companies and engage in other activities that are financial in nature or are incidental or complementary to activities that are financial in nature. "Financial in nature" activities include:

•

securities underwriting,



•

dealing and market making,



•

sponsoring mutual funds and investment companies,



•

insurance underwriting and agency,



•

merchant banking, and



•

activities that the Federal Reserve Board, in consultation with the Secretary of the Treasury, determines to be financial in nature of incidental to a financial activity.

    A bank holding company must meet three requirements before becoming a financial holding company:

•

all of the bank holding company's depository institution subsidiaries must be well capitalized, well managed, and, except in limited circumstances, have satisfactory or better ratings pursuant to the Community Reinvestment Act; and



•

the bank holding company must file with the Federal Reserve a declaration of its election to become a financial holding company, including a certification that its depository institution subsidiaries meet the prior two criteria.

    Failure to comply with the financial holding company requirements could lead to divestiture of subsidiary banks or require all activities of such company to conform to those permissible for a bank holding company. No prior Federal Reserve Board approval is required for a financial holding company to acquire a company (other than a bank holding company, bank or savings association) engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

    A bank holding company that is not also a financial holding company can only engage in banking and such other activities determined by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.

    We are not currently a financial holding company. Our management has not determined at this time whether it will seek an election to become a financial holding company.

    Expanded Bank Activities.  The Financial Services Modernization Act also permits national banks to engage in expanded activities through the formation of financial subsidiaries. A national bank may have a subsidiary engaged in any activity authorized for national banks directly or any financial activity, except for insurance underwriting, insurance investments, real estate investment or development, or merchant banking, which may only be conducted through a subsidiary of a financial holding company. Financial activities include all activities permitted under new sections of the BHCA or permitted by regulation.

    A national bank seeking to have a financial subsidiary, and each of its depository institution affiliates, must be "well-capitalized," "well-managed" and have a satisfactory or better rating under the Community Reinvestment Act. The total assets of all financial subsidiaries may not exceed the lesser of 45% of a bank's total assets, or $50 billion. The largest 100 insured banks also must satisfy certain

12

minimum debt rating requirements. A national bank must exclude from its assets and equity all equity investments, including retained earnings, in a financial subsidiary. The assets of the subsidiary may not be consolidated with the bank's assets. The financial subsidiary will be treated as an affiliate subject to restrictions or transactions between the Bank and affiliate imposed by Federal Reserve Act Sections 23A and 23B. The bank must also have policies and procedures to assess financial subsidiary risk and protect the bank from such risks and potential liabilities.

    Privacy.  Under the Financial Services Modernization Act, federal banking regulators are required to adopt rules that will limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations will require disclosure of privacy policies to consumers and, in some circumstances, will allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. Federal banking regulators issued final rules on May 10, 2000. Pursuant to these rules, financial institutions must provide:

•

initial notices to customers about their privacy policies, describing the conditions under which they may disclose nonpublic personal information to nonaffiliated third parties and affiliates;



•

annual notices of their privacy policies to current customers; and



•

a reasonable method for customers to "opt out" of disclosures to nonaffiliated third parties.

The rules were effective November 13, 2000, but compliance is optional until July 1, 2001. These privacy provisions will affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. It is not possible at this time to assess the impact of the privacy provisions on the Company's financial condition or results of operations.

    Consumer Protection Rules—Sale of Insurance Products.  In December 2000 pursuant to the requirements of the Financial Services Modernization Act, the federal bank and thrift regulatory agencies adopted consumer protection rules for the sale of insurance products by depository institutions. The rule is effective on April 1, 2001. The final rule applies to any depository institution or any person selling, soliciting, advertising, or offering insurance products or annuities to a consumer at an office of the institution or on behalf of the institution. Before an institution can complete the sale of an insurance product or annuity, the regulation requires oral and written disclosure that such product:

•

is not a deposit or other obligation of, or guaranteed by, the depository institution or its affiliate;



•

is not insured by the FDIC or any other agency of the United States, the depository institution or its affiliate; and



•

has certain risks in investment, including the possible loss of value.

    Finally, the depository institution may not condition an extension of credit:

•

on the consumer's purchase of an insurance product or annuity from the depository institution or from any of its affiliates, or



•

on the consumer's agreement not to obtain, or a prohibition on the consumer from obtaining, an insurance product or annuity from an unaffiliated entity.

    The rule also requires formal acknowledgement from the consumer that disclosures were received.

    In addition, to the extent practicable, a depository institution must keep insurance and annuity sales activities physically segregated from the areas where retail deposits are routinely accepted from the general public.

13

    Safeguarding Confidential Customer Information.  In January 2000, the banking agencies adopted guidelines requiring financial institutions to establish an information security program to:

•

identify and assess the risks that may threaten customer information;



•

develop a written plan containing policies and procedures to manage and control these risks;



•

implement and test the plan; and



•

adjust the plan on a continuing basis to account for changes in technology, the sensitivity of customer information, and internal or external threats to information security.

Each institution may implement a security program appropriate to its size and complexity and the nature and scope of its operations.

    The guidelines outline specific security measures that institutions should consider in implementing a security program. A financial institution must adopt those security measures determined to be appropriate. The guidelines require the board of directors to oversee an institution's efforts to develop, implement, and maintain an effective information security program and approve written information security policies and programs. The guidelines are effective July 1, 2001.

Dividends and Other Transfers of Funds

    Dividends from the Bank constitute our principal source of income. Bancorp is a legal entity separate and distinct from the Bank. The Bank is subject to various statutory and regulatory restrictions on its ability to pay dividends to us. Under such restrictions, the amount available for payment of dividends to Bancorp by the Bank totaled $12 million at December 31, 2000. In addition, the Comptroller and the Federal Reserve Board have the authority to prohibit the Bank from paying dividends, depending upon its financial condition, if such payment is deemed to constitute an unsafe or unsound practice.

    The Comptroller also has authority to prohibit the Bank from engaging in activities that, in the Comptroller's opinion, constitute unsafe or unsound practices in conducting its business. It is possible, depending upon the financial condition of the bank in question and other factors, that the Comptroller could assert that the payment of dividends or other payments might, under some circumstances, be such an unsafe or unsound practice. Further, the Comptroller and the Federal Reserve Board have established guidelines with respect to the maintenance of appropriate levels of capital by banks or bank holding companies under their jurisdiction. Compliance with the standards set forth in such guidelines and the restrictions that are or may be imposed under the prompt corrective action provisions of federal law could limit the amount of dividends which Bancorp or the Bank may pay. An insured depository institution is prohibited from paying management fees to any controlling persons or, with certain limited exceptions, making capital distributions if after such transaction the institution would be undercapitalized. See "—Prompt Corrective Regulatory Action and Other Enforcement Mechanisms" and "—Capital Standards" for a discussion of these additional restrictions on capital distributions.

    The Bank is subject to certain restrictions imposed by federal law on any extensions of credit to, or the issuance of a guarantee or letter of credit on behalf of, Bancorp or other affiliates, the purchase of, or investments in, stock or other securities thereof, the taking of such securities as collateral for loans, and the purchase of assets of Bancorp or other affiliates. Such restrictions prevent Bancorp and such other affiliates from borrowing from the Bank unless the loans are secured by marketable obligations of designated amounts. Further, such secured loans and investments by the Bank to or in Bancorp or to or in any other affiliate are limited, individually, to 10.0% of the Bank's capital and surplus (as defined by federal regulations), and such secured loans and investments are limited, in the aggregate, to 20% of the Bank's capital and surplus (as defined by federal regulations). Additional restrictions on transactions with affiliates may be imposed on the Bank under the prompt corrective action provisions

14

of federal law. See "Item 1. Business—Supervision and Regulation—Prompt Corrective Action and Other Enforcement Mechanisms."

Capital Standards

    The federal banking agencies have adopted risk-based minimum capital guidelines intended to provide a measure of capital that reflects the degree of risk associated with a banking organization's operations for both transactions reported on the balance sheet as assets and transactions which are recorded as off balance sheet items. Under these guidelines, nominal dollar amounts of assets and credit equivalent amounts of off balance sheet items are multiplied by one of several risk adjustment percentages, which range from 0% for assets with low credit risk federal banking agencies, to 100% for assets with relatively high credit risk.

    The guidelines require a minimum ratio of qualifying total capital to risk-adjusted assets of 8% and a minimum ratio of Tier 1 capital to risk-adjusted assets of 4%. In addition to the risk-based guidelines, federal banking regulators require banking organizations to maintain a minimum amount of Tier 1 capital to total assets, referred to as the leverage ratio. For a banking organization rated in the highest of the five categories used by regulators to rate banking organizations, the minimum leverage ratio of Tier 1 capital to total assets must be 3%. In addition to these uniform risk-based capital guidelines and leverage ratios that apply across the industry, the regulators have the discretion to set individual minimum capital requirements for specific institutions at rates significantly above the minimum guidelines and ratios.

    The following table presents the amounts of regulatory capital and the capital ratios for the Bank, compared to its minimum regulatory capital requirements as of December 31, 2000.

    The federal banking regulators may set capital requirements higher than the minimums described above for holding companies whose circumstances warrant it. For example, a financial institution experiencing or anticipating significant growth may be expected to maintain capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. The Federal Reserve Board has also indicated that it will consider a "tangible Tier 1 capital leverage ratio" (deducting all intangibles) and other indications of capital strength when evaluating proposals for expansion or new activities.

Proposed Capital Requirements for Community Institutions

    In November 2000, the federal bank and thrift regulatory agencies requested public comment on an advance notice of proposed rulemaking that considers the establishment of a simplified regulatory capital framework for non-complex institutions.

    In the proposal, the agencies suggested criteria that could be used to determine eligibility for a simplified capital framework, such as the nature of a bank's activities, its asset size and its risk profile. In the advance notice, the agencies seek comment on possible minimum regulatory capital requirements for non-complex institutions, including a simplified risk-based ratio, a simple leverage ratio, or a leverage ratio modified to incorporate certain off-balance sheet exposures.

15

    The advance notice solicits public comment on the agencies' preliminary views. Comments were due on the proposal on February 1, 2001. Given the preliminary nature of the proposal, it is not possible to predict its impact on us at this time.

Prompt Corrective Action and Other Enforcement Mechanisms

    Federal banking agencies possess broad powers to take corrective and other supervisory action to resolve the problems of insured depository institutions, including but not limited to those institutions that fall below one or more prescribed minimum capital ratios. Each federal banking agency has promulgated regulations defining the following five categories in which an insured depository institution will be placed, based on its capital ratios: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. At December 31, 2000, the Bank exceeded the required ratios for classification as "well capitalized."

    An institution that, based upon its capital levels, is classified as well capitalized, adequately capitalized, or undercapitalized may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions. The federal banking agencies, however, may not treat a significantly undercapitalized institution as critically undercapitalized unless its capital ratio actually warrants such treatment.

    In addition to measures taken under the prompt corrective action provisions, commercial banking organizations may be subject to potential enforcement actions by the federal regulators for unsafe or unsound practices in conducting their businesses or for violations of any law, rule, regulation, or any condition imposed in writing by the agency or any written agreement with the agency.

Safety and Soundness Standards

    The federal banking agencies have adopted guidelines designed to assist the federal banking agencies in identifying and addressing potential safety and soundness concerns before capital becomes impaired. The guidelines set forth operational and managerial standards relating to: (i) internal controls, information systems and internal audit systems, (ii) loan documentation, (iii) credit underwriting, (iv) asset growth, (v) earnings, and (vi) compensation, fees and benefits. In addition, the federal banking agencies have also adopted safety and soundness guidelines with respect to asset quality and earnings standards. These guidelines provide six standards for establishing and maintaining a system to identify problem assets and prevent those assets from deteriorating. Under these standards, an insured depository institution should: (i) conduct periodic asset quality reviews to identify problem assets, (ii) estimate the inherent losses in problem assets and establish reserves that are sufficient to absorb estimated losses, (iii) compare problem asset totals to capital, (iv) take appropriate corrective action to resolve problem assets, (v) consider the size and potential risks of material asset concentrations, and (vi) provide periodic asset quality reports with adequate information for management and the board of directors to assess the level of asset risk. These new guidelines also set forth standards for evaluating and monitoring earnings and for ensuring that earnings are sufficient for the maintenance of adequate capital and reserves.

Premiums for Deposit Insurance

    Through the Bank Insurance Fund ("BIF") and the Savings Association Insurance Fund ("SAIF"), the FDIC insures the deposits of the Company's depository institution subsidiary up to prescribed limits for each depositor. The amount of FDIC assessments paid by each BIF member institution is based on its relative risk of default as measured by regulatory capital ratios and other factors. Specifically, the assessment rate is based on the institution's capitalization risk category and supervisory subgroup

16

category. An institution's capitalization risk category is based on the FDIC's determination of whether the institution is well capitalized, adequately capitalized or less than adequately capitalized. An institution's supervisory subgroup category is based on the FDIC's assessment of the financial condition of the institution and the probability that FDIC intervention or other corrective action will be required.

    The assessment rate currently ranges from zero to 27 cents per $100 of domestic deposits. The FDIC may increase or decrease the assessment rate schedule on a semi-annual basis. An increase in the assessment rate could have a material adverse effect on our earnings, depending on the amount of the increase. The FDIC is authorized to terminate a depository institution's deposit insurance upon a finding by the FDIC that the institution's financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices or has violated any applicable rule, regulation, order or condition enacted or imposed by the institution's regulatory agency. The termination of Nara Bank's deposit insurance could have a material adverse effect on our earnings.

    All FDIC-insured depository institutions must pay an annual assessment to provide funds for the payment of interest on bonds issued by the Financing Corporation, a federal corporation chartered under the authority of the Federal Housing Finance Board. The bonds, commonly referred to as FICO bonds, were issued to capitalize the Federal Savings and Loan Insurance Corporation. The FDIC established the FICO assessment rates effective for the third quarter of 2000 at approximately $.021 per $100 annually for assessable deposits. The FICO assessments are adjusted quarterly to reflect changes in the assessment bases of the FDIC's insurance funds and do not vary depending on a depository institution's capitalization or supervisory evaluations.

Interstate Banking

    The BHCA permits bank holding companies from any state to acquire banks and bank holding companies located in any other state, subject to certain conditions, including certain nationwide- and state-imposed concentration limits. Bancorp and the Bank have the ability, respectively, subject to certain state law restrictions, to acquire by acquisition or merger banks or bank branches outside of their home state. The establishment of new interstate branches is also possible in those states with laws that expressly permit it. Interstate banks or branches are subject to certain laws of the states in which they are located. Competition may increase further as banks branch across state lines and enter new markets.

Community Reinvestment Act and Fair Lending Developments

    Nara Bank is subject to certain fair lending requirements and reporting obligations involving home mortgage lending operations and Community Reinvestment Act ("CRA") activities. The CRA generally requires the federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities, including low- and moderate-income neighborhoods. A bank may be subject to substantial penalties and corrective measures for a violation of certain fair lending laws. The federal banking agencies may take compliance with such laws and CRA obligations into account when regulating and supervising other activities. In December 2000, the federal banking agencies established annual reporting and public disclosure requirements for certain written agreements that are entered into between insured depository institutions or their affiliates and nongovernmental entities or persons that are made pursuant to, or in connection with, the fulfillment of the CRA.

    A bank's compliance with its CRA obligations is based a performance-based evaluation system which bases CRA ratings on an institution's lending service and investment performance. When a bank holding company applies for approval to acquire a bank or other bank holding company, the Federal Reserve Board will review the assessment of each subsidiary bank of the applicant bank holding company, and such records may be the basis for denying the application. Based on an examination conducted on July 27, 1998, the Bank was rated "Satisfactory" in complying with its CRA obligations.

17

Business Considerations and Certain Factors that May Affect Our Results of Operations and Stock Price

    We have set forth below certain factors that may affect our financial results and operations, which you should consider when evaluating our business and prospects.

    Deterioration of economic conditions in Southern California, New York or Korea could adversely affect our loan portfolio and reduce the demand for our services. We focus our business primarily in Korean communities in Southern California and in the greater New York City metropolitan area. A deterioration in economic conditions in our market areas could have a material adverse impact on the quality of our business. An economic slowdown in California or New York could have the following consequences, any of which could reduce our net income:

•

Loan delinquencies may increase;



•

Problem assets and foreclosures may increase;



•

Claims and lawsuits may increase;



•

Demand for our products and services may decline; and



•

Collateral for loans may decline in value below the principal amount owed by the borrower.

    Furthermore, the financial weakness of California's three primary energy providers and shortages in electrical generation capacities may further weaken the California economy and businesses operating in Southern California.

    Loan loss reserves may not cover actual loan losses. If our actual loan losses exceed the amount we have reserved for probable losses, it will hurt our business. We try to limit the risk that borrowers will fail to repay loans by carefully underwriting the loans. Losses nevertheless occur. We create reserves for estimated loan losses in its accounting records. We base these allowances on estimates of the following:

•

industry standards;



•

historical experience with our loans;



•

evaluation of current economic conditions;



•

regular reviews of the quality, mix and size of the overall loan portfolio;



•

regular reviews of delinquencies; and



•

the quality of the collateral underlying our loans.

    A downturn in the real estate market could seriously impair our loan portfolio. As of December 31, 2000, approximately 48% of the value of our loan portfolio consisted of loans secured by various types of real estate. If real estate values decline significantly, especially in California or New York, higher vacancies and other factors could harm the financial condition of our borrowers, the collateral for our loans will provide less security, and we would be more likely to suffer losses on defaulted loans.

    Changes in interest rates affect our profitability. Changes in prevailing interest rates may hurt our business. We derive our income mainly from the difference or "spread" between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits, borrowings and other interest-bearing liabilities. In general, the wider the spread, the more we earn. When market rates of interest change, the interest we receive on our assets and the interest we pay on our liabilities will fluctuate. This can cause decreases on our spread and can greatly affect our income. In addition,

18

interest rates affect how much money we can lend. For example, when interest rates rise, loan originations tend to decrease.

    We face strong competition from financial service companies and other companies that offer banking services that can hurt our business. We have offices in Southern and Northern California, Seattle, Chicago and New York. Increased competition in our markets may result in reduced loans and deposits. Ultimately, we may not be able to compete successfully against current and future competitors. Many competitors offer the same or similar banking services that we offer in our service areas. These competitors include national banks, regional banks and other community banks. We also face competition from many other types of financial institutions, including, without limitation, savings and loans, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries.

    Future sales of securities could diminish the interests of our shareholders. If we raise additional funds or make acquisitions by using equity or convertible debt securities, the percentage ownership of our shareholders will be diluted. Also, any new securities could have rights, preferences and privileges senior to those of our common stock. We currently do not have any commitments for additional financing. We cannot be certain that additional financing will be available in the future to the extent required or that, if available, it will be made on acceptable terms.

    If we lose key employees, our business may suffer. If we lost key employees temporarily or permanently, it could hurt our business. We could be particularly hurt if our key employees went to work for competitors. Our future success depends on the continued contributions of our existing senior management personnel, particularly on the efforts of Benjamin Hong, our President and Chief Executive Officer.

    Environmental laws could force us to pay for environmental problems. The cost of cleaning up or paying damages and penalties associated with environmental problems could increase our operating expenses. When a borrower defaults on a loan secured by real property, the Bank often purchases the property in foreclosure or accepts a deed to the property surrendered by the borrower. The Bank may also take over the management of commercial properties whose owners have defaulted on loans. The Bank also owns and leases premises where our branches and other facilities are located and where environmental problems may exist. Although the Bank has lending, foreclosure and facilities guidelines intended to exclude properties with an unreasonable risk of contamination, hazardous substances may exist on some of the properties that we own, lease, manage or occupy. We may face the risk that environmental laws could force us to clean up the properties at our expense. It may cost much more to clean a property than the property is worth. We also could be liable for pollution generated by a borrower's operations if we take a role in managing those operations after a default. We may find it difficult or impossible to sell contaminated properties.

    We are exposed to the risks of natural disasters. A significant portion of our operations are concentrated in Southern California. A major earthquake could result in material loss to the Company. A significant percentage of our loans are and will be secured by real estate. California is in an earthquake-prone region. A majority of our properties and most of the real and personal property securing loans in our portfolio are in Southern California. Many of our borrowers could suffer uninsured property damage, experience interruption of their businesses or lose their jobs after an earthquake. Those borrowers might not be able to repay their loans, and the collateral for loans could decline significantly in value. Unlike a bank with operations that are more geographically diversified, we are vulnerable to greater losses if an earthquake, fire, flood or other natural catastrophe occurs in Southern California.

    An increase in nonperforming assets would reduce our income and increase our expenses. If the level of nonperforming assets rises in the future, it could adversely affect our operating results.

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Nonperforming assets are mainly loans on which the borrowers are not making their required payments. Nonperforming assets also include loans that have been restructured to permit the borrower to have smaller payments and real estate that has been acquired through foreclosure of unpaid loans. To the extent that assets are nonperforming, we have less cash available for lending and other activities.

    Governmental regulation may impair our operations or restrict our growth. Bancorp and Bank are subject to significant governmental supervision and regulation. These regulations are intended primarily for the protection of depositors. Statutes and regulations affecting Bancorp or the Bank may be changed at any time, and the interpretation of these statutes and regulations by examining authorities may also change. Within the last year Congress and the President have passed and enacted significant changes to these statutes and regulations. There can be no assurance that such changes to the statutes and regulations or in their interpretation will not adversely affect our business. The Bank is subject to regulation and examination by the Comptroller of the Currency. In addition to governmental supervision and regulation, the Bank is subject to changes in other federal and state laws, including changes in tax laws, which could materially affect the banking industry. Bancorp is subject to the rules and regulations of the Federal Reserve Board. If we fail to comply with federal and state bank regulations, the regulators may limit our activities or growth, fine us or ultimately put us out of business. Banking laws and regulations change from time to time. Bank regulations can hinder our ability to compete with financial services companies that are not regulated or are less regulated.

    Federal and state bank regulatory agencies regulate many aspects of our operations. These areas include:

•

the capital we must maintain;



•

the kinds of activities we can engage in;



•

the kinds and amounts of investments we can make;



•

the locations of our offices;



•

how much interest we can pay on demand deposits;



•

insurance of our deposits and the premiums we must pay for this insurance; and



•

how much cash we must set aside as reserves for deposits.

    Because the price of our common stock may vary widely, when you decide to sell it, you may encounter delay or have to accept a reduced price. The price of our common stock may fluctuate widely, depending on many factors. Some of these factors have little to do with our operating results or our intrinsic worth. For example, the market value of our common stock may be effected by the trading volume of the shares, announcements of expanded services by us or our competitors, general trends in the banking industry, general price and volume fluctuations in the stock market, acquisitions of related companies, variations in quarterly operating results, and the dilutive effects of future issuances of common or convertible preferred stock. Also, if the trading market for our common stock remains limited, that may exaggerate changes in market value, leading to more price volatility than would occur in a more active trading market.

Accounting Matters

    In September 2000, SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125, was issued. It revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of SFAS No. 125's provisions without reconsideration. SFAS No. 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The statement is effective for recognition

20

and reclassification of collateral and for disclosures related to securitization transactions and collateral for fiscal years ending after December 15, 2000. It is not expected that the adoption of SFAS No. 140 will have a material impact on the Company's results of operations, financial position, or cash flows.

    During 1999, the Bank adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS Nos. 137 and 138. SFAS No. 133 requires companies to record derivatives on the balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in the values of derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows. The Company did not engage in derivative activities during 2000 and 1999.

Item 2. PROPERTIES

    The Company's principal executive offices are located at 3701 Wilshire Blvd., Los Angeles, California 90010. The Company conducts its operations through thirteen branch offices located throughout California, in New York City and in Chicago and Seattle. The Company leases all but one of its offices. Information with respect to the Company's principal executive and branch offices is as follows:

Item 3. LEGAL PROCEEDINGS

    The Bank is a party to routine litigation incidental to its business, none of which is considered likely to have a material adverse effect on the Bank.

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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matter was submitted by the Bank or Bancorp to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year ending December 31, 2000.

Item 4(a).  EXECUTIVE OFFICERS OF THE REGISTRANT

    The following individuals are executive officers of the Bank as of December 31, 2000. Pertinent information relating to these individuals is set forth below. There are no family relationships between any of the officers. All of the officers hold their respective offices at the pleasure of the Board of Directors, subject to the rights, if any, of an officer under any contract of employment.

Benjamin B. Hong—Chief Executive Officer and President—Age 68

    Mr. Hong has served as President and Chief Executive Officer of Nara Bank since 1994 and as President and Chief Executive Officer of Bancorp since 2001. Mr. Hong served as President and Chief Executive Officer of Hanmi Bank from 1988 to 1994.

Bon T. Goo—Executive Vice President and Chief Financial Officer—Age 51

    Mr. Goo has served as Executive Vice President and Chief Financial Officer of Nara Bank since 1990 and as Executive Vice President and Chief Financial Officer of Bancorp since 2001. Mr. Goo served as Vice President and Manager of the Accounting, Investment and Control Division of Hanmi Bank from 1988 to 1990.

Min Jung Kim—Executive Vice President and Chief Credit Officer—Age 41

    Ms. Kim has served as Executive Vice President and Chief Credit Officer of Nara Bank since 1995. Ms. Kim served as Vice President and Manager of the Western Branch of Hanmi Bank from 1992 to 1995.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    Bancorp's common stock, par value $0.001 per share, began trading on the Nasdaq National Market on February 5, 2001. Accordingly, the information presented herein is for the Bank. The Bank's common stock, par value $3.00 per share, was traded on the Nasdaq National Market under the symbol "NARA" through February 2, 2001, the Bank's last trading day.

    There were 2,701,786 shares of the Bank's common stock held by approximately 747 beneficial owners as of March 22, 2001. The following table sets forth, for the calendar quarters indicated, the range of high and low sales prices for the common stock for each quarter within the last two fiscal years. Sales prices represent actual sales of which management of the Bank has knowledge.

22

    The following table sets forth, for the calendar quarters indicated, the range of high and low sales prices for the common stock for each quarter within the last two fiscal years. Sales prices represent actual sales of which management of the Bank has knowledge.

    In May of 2000 the Bank paid an 8.0% stock dividend to shareholders of record on April 14, 2000. Future dividends are subject to the discretion of the Company's Board of Directors and will depend upon a number of factors, including future earnings, financial condition, cash needs and general business conditions. Any dividend must comply with applicable bank regulations.

    The Company's ability to pay dividends is subject to restrictions set forth in the Delaware General Corporation Law. The Delaware General Corporation Law provides that a Delaware corporation may pay dividends either (i) out of the corporation's surplus (as defined by Delaware law), or (ii) if there is no surplus, out of the corporation's net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Furthermore, the Company is deemed to be a quasi-California corporation, and therefore must comply with California law with respect to, among other things, distributions to shareholders. Under California law, a corporation is prohibited from paying dividends unless (i) the retained earnings of the corporation immediately prior to the distribution exceed the amount of the distribution, (ii) the assets of the corporation exceed 1¹/4 times its liabilities, or (iii) the current assets of the corporation exceed its current liabilities, but if the average pre-tax net earnings of the corporation before interest expense for the two years preceding the distribution was less than the average interest expense of the corporation for those years, the current assets of the corporation must exceed 1¹/4 times its current liabilities.

    The Company's ability to pay cash dividends in the future will depend in large part on the ability of the Bank to pay dividends on its capital stock to Bancorp.

    The ability of the Bank to pay dividends to Bancorp is subject to restrictions set forth in the National Bank Act and the rules of the Comptroller. Pursuant to such regulations, among other restrictions, the Bank can not pay dividends out of its capital; all dividends must be paid out of net profits then on hand, after deducting for expenses such as losses and bad debts. In addition, the payment of dividends out of net profits of a national bank is further limited by statute which prohibits a bank from declaring a dividend on its shares of common stock until the surplus fund equals the amount of capital stock, or if the surplus fund does not equal the amount of capital stock, until not less than one-tenth of its net profits for the preceding half-year (in the case of quarterly dividends) or at least one-tenth of its net profits for the preceding year (in case of annual dividends) are transferred to the surplus fund.

Item 6. SELECTED FINANCIAL DATA

    The following table presents selected financial and other data of the Bank for each of the years in the five-year period ended December 31, 2000. The information below should be read in conjunction with, and is qualified in its entirety by, the more detailed information included elsewhere herein including the Bank's Audited Consolidated Financial Statements and Notes thereto.

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(1)

Difference between the interest yield on interest-earning assets and interest paid on interest-bearing liabilities

(2)

Net interest income expressed as a percentage of average total interest-earning assets.

24

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
            OPERATIONS.

Forward-Looking Statements

    Management's discussion and analysis is written to provide greater detail of the results of operations and financial condition of the Bank. This analysis should be read in conjunction with the audited financial statements contained within this report including the notes thereto.

    Some of the statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this document constitute forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. These factors include, among other things, those listed under "Business Considerations and certain Factors That May Affect Our Results of Operations and Stock Price" and elsewhere in this document.

    In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "intends," "considering," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of such terms and other comparable terminology.

    Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance of achievements.

Overview

    Bancorp is a bank holding company, which, as of February 2, 2001, owns 100% of the stock of the Bank. The financial statements and financial data presented in this report are those of the Bank, on an unconsolidated basis.

    On February 25, 2000, the Bank acquired Korea First Bank of New York, for approximately $8.7 million paid to the Korea Deposit Insurance Corporation, the sole shareholder of Korea First Bank of New York, for all of the shares of stock of Korea First Bank of New York, which were then canceled in connection with the acquisition. The underlying assets acquired primarily included loans, cash, real estate and bank premise and equipment, while the primary liabilities assumed included deposit accounts and accrued liabilities related to ongoing business. The acquisition is accounted for as a purchase. From this transaction, the Bank recognized $6.6 million in negative goodwill. In August 2000, the Bank opened its ninth full service branch in Oakland, California. In September 2000, the Bank established a wholly owned subsidiary corporation to operate a loan production office in New Jersey named "Nara Loan Center Corporation".

    The Bank reported net income for the year ended December 31, 2000 of $10.5 million or $1.98 per diluted share, compared with $4.0 million or $0.80 per diluted share for the year ended December 31, 1999, and $3.2 million or $0.64 per diluted share for the year ended December 31, 1998. The increase in net earnings for 2000 compared to 1999, and from 1999 compared to 1998 was primarily the result of an increase in net interest income and an increase in other operating income. Increased net income for 1999 over 1998 reflected higher volumes for average earnings assets for each year. The increases in net income and operating income for 2000 and 1999 were partially offset by increases in interest expense and other operating expense. The following table summarizes Nara Bank's increases and decreases, as applicable, in income and expense for the years indicated.

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Results of Operations

Operations Summary