East West posts unexpected profit
When East West Bancorp Inc. acquired failed rival United Commercial Bank in November, analysts applauded. But they still expected the Pasadena bank to report year-end losses as it worked its way through the commercial loan problems gnawing at regional financial firms.
East West, now the largest banker in the Chinese American niche, instead reported a profit late Tuesday for the fourth quarter and 2009. The firm said San Francisco-based United Commercial’s loan troubles were less severe than estimated when the takeover deal with the Federal Deposit Insurance Corp. was struck.
What’s more, East West Chairman Dominic Ng told analysts Wednesday, the bank has turned the corner on dealing with its own lending problems and expects its provisions for loan losses to decline through the rest of this year.
East West’s shares surged 82 cents, or 4.8%, to $18, a 21-month high. The shares have more than doubled in value since the United Commercial deal was announced.
After recording a $471-million gain on the acquisition, East West posted a fourth-quarter profit of $259.7 million, or $1.96 a share, compared with a year-earlier loss of $3 million, or 5 cents.
For all of 2009, profit was $76.6 million, compared with a 2008 loss of $49.7 million.
