Two large Chinese American banks report second-quarter profits
East West Bancorp and Cathay General Bancorp, the nation’s largest Chinese American banks, posted profits in the second quarter, another sign that Southern California’s larger regional banks may be recovering from the economic crisis.
But two large Korean American banks in Los Angeles, Wilshire Bancorp and Hanmi Financial Corp., reported losses on Tuesday.
East West said it earned $30.2 million, or 21 cents a share, during the quarter ended June 30, compared with a loss of $115.7 million, or $1.83 per share, during the same quarter in 2009. The results, which were reported after the close of trading, exceeded analysts’ expectations of 18 cents a share.
East West, based in Pasadena, has nearly $20 billion in assets , making it the second-largest bank based in Southern California, after City National Corp. City National said last week it earned $41.3 million in the quarter, up from $6.8 million a year earlier, and also beat expectations on improving credit quality.
East West’s provision for loan losses and its charge-offs of uncollectible loans both fell compared with the first quarter. Its integration of former rival United Commercial Bank of San Francisco, which East West acquired after United Commercial failed in October, was proceeding “quickly and efficiently,” East West Chairman Dominic Ng said in a statement.
Cathay, based in Los Angeles’ Chinatown, also said its loss provision and charge-offs fell as it earned $1.9 million, compared with a loss of $25.7 million a year earlier. The bank, with $11.4 billion in assets, said it lost 3 cents a share after paying $4.1billion in dividends to preferred shareholders. Wall Street had forecast a loss of 21 cents a share.
Hanmi, with $2.9 billion in assets, is selling a majority interest in the company to a South Korean bank after bad loans depleted its capital. It lost $29.3 million, or 57 cents per share, compared with a loss of $9.5 million, or 21 cents per share, a year earlier.
Hanmi, under orders from regulators to raise more capital, also reported that it had sold $47 million in stock to its current shareholders and an additional $73 million through stock sales to the public. Korea’s Woori Finance Holdings has agreed to take a controlling stake it Hanmi. It will invest at least $210 million.
Hanmi and other banks based in Koreatown were especially concentrated in commercial mortgage lending, a category hard-hit by the severe recession.
Hanmi rival Wilshire Holdings, with $3.4 billion in assets, said it lost $4.6 million, or 15 cents a share, during the quarter, compared with a profit of $12.8 million, or 44 cents a share, a year earlier.
On Monday, another L.A.-based Korean American bank, Nara Bancorp, which has $2.9 billion in assets, reported a loss of $15.9 million, or 45 cents a share, compared with a year-earlier loss of $9.2 million, or 43 cents a share.
