East West Bancorp swings to profit; shares rise
Shares of East West Bancorp rallied Wednesday after the Pasadena bank reported a first-quarter profit of $24.9 million, reversing a year-earlier loss.
The company, which released its earnings late Tuesday, said it benefited from lower provisions for loan losses as well as its acquisition of a failed rival.
The results sent East West stock up as much as 5.7% on Wednesday. But it fell back to close at $19.91, up 53 cents, or 2.7%.
The profit in the latest period, amounting to 13 cents a share, contrasted with a loss of $22.5 million, or 50 cents, in the first quarter of 2009.
The earnings also were boosted by an increase in the bank’s asset base, which grew from the takeover in November of United Commercial Bank of San Francisco.
East West’s assets rose to $20.3 billion as of March 31, up from $12.6 billion a year earlier.
The company’s provisions for loan losses peaked in the third quarter of last year, as did its volume of loans newly recognized as uncollectible. The bank said it expected both to continue to decline for the rest of this year.
To persuade East West to take on troubled loans held by United Commercial, the Federal Deposit Insurance Corp. agreed to shoulder most of the losses on them.
East West focuses on the Chinese American market, as did United Commercial.
