Cathay General Bancorp said its third quarter profit jumped 67 percent as the Asian-American bank saw lower interest expenses and higher non-interest income.
The Chinatown parent of Cathay Bank reported net income of $22 million (28 cents per share), compared with $13.2 million (17 cents) in the same period a year earlier. Analysts surveyed by Thomson Reuters on average expected per-share profit of 28 cents.
Net interest income before provision for credit losses rose 10 percent to $81 million, which it attributed primarily to a fall in interest expense. Non-interest income rose 333 percent $16.8 million. The bank paid $4.5 million in penalties for prepaying $100 million in advances from the Federal Home Loan Bank advances.
The provision for credit losses was down 50 percent to $9 million. Since the end of the second quarter, the bank’s non-accrual portfolio loans, excluding non-accrual loans held for sale, has decreased 25 percent to $193 million.
Chief Executive Dunson Cheng noted commercial loan growth of 11 percent during the quarter and 26 percent so far this year, which he said reflects both increased business from existing customers and new borrowers.
"We are optimistic that our commercial loan portfolio will continue to grow and become a larger proportion of our overall loan portfolio,” said Cheng in a statement. “We are hopeful that our profitability will approach our historical levels over the course of time.”
Shares were down 32 cents, or 2.5 percent, to $12.47 in midday trading on the Nasdaq.