Los Angeles Business Journal

Improved Loan Quality Boost’s Cathay’s Profit

By Deborah Crowe Wednesday, October 17, 2012

Shares of Cathay General Bancorp rose more than 11 percent on Wednesday after the bank holding company reported a nearly 20 percent increase in third-quarter profit.

The Los Angeles the holding company for Cathay Bank late Tuesday reported net income of $30.4 million compared with $26.1 million in the same period a year ago. Adjusted net income, minus dividends on preferred stock, was $26.2 million (33 cents a share), up from $22 million (28 cents) a year earlier. That beat the Wall Street consensus of 32 cents a share.

Net-interest income fell 0.7 percent to $80.4 million, with non-interest income down 7 percent to $15.6 million. The bank’s provision for loan losses was breakeven, compared to a provision of $9 million taken last year. Nonperforming assets fell 48 percent to less than $156 million.

Shares closed up $1.95, or more than 11 percent, to $18.87 on the Nasdaq.