Chinese American Bank Stocks Surge to Highs

Stocks in two Los Angeles banks that target the Chinese American market have surged in recent days to 52-week highs, but analysts speculated that the gains are unrelated.

Cathay Bancorp Inc. (CATY), which has nearly $2 billion in assets, is up more than 20% over the last two days. The thinly traded stock closed Thursday at $53, up $2.63 in Nasdaq trading. Volume on Tuesday and Wednesday was more than 15 times the recent average.

A Cathay spokeswoman attributed the increase to a large institutional stock purchase Tuesday, but she said the bank did not know the identity of the buyer. The bank has no plans to make any other announcements, she added.

Analysts said investors may be betting on the continued growth and consolidation of small banks that specialize in the Chinese American market.

Meanwhile, GBC Bancorp (GBCB), parent of General Bank, is up more than 25% in the last two weeks. Stock in the bank, which has about $1.7 billion in assets, closed Thursday at $25.25, down 6 cents on Nasdaq.

Investors are reacting favorably to General Bank’s efforts to resolve the default of a $31-million loan to a Las Vegas casino developer who filed for bankruptcy protection, said Elizabeth Ruckwardt, analyst at Pacific Crest Securities.