East West Bancorp Inc., parent company of East West Bank, is gradually getting the attention of Wall Street. As the San Marino-based commercial bank has reported quarter after quarter of strong earnings growth, its stock price has picked up steam and has handsomely outperformed its peer group.

Since July 1999, East West's share price has risen 62.1 percent, closing at $16.31 on Aug. 1, up from about $10 a year ago. The Russell 2000 Financial Services Index, meanwhile, dropped 8.9 percent in value over this period, as small-cap stocks in general and banks in particular failed to stir up much excitement on the market.

For the second quarter ended June 30, the bank reported net income of $8.4 million (39 cents per share), compared to $7.1 million (32 cents) for the like year-earlier quarter. That represents an 18 percent increase and puts the company on track to meet its projected 20 percent growth in earnings per share for 2000.

"Strategically, we're at the right place at the right time and we have the management team to take advantage of this situation," said Dominic Ng, East West's chairman and chief executive. "We continue to see strong growth from our retail banking services for the Chinese-American community, as well as from our mainstream banking services for small and mid-sized local businesses, and our international banking services."

Traditionally, East West Bank has catered to the Chinese-American community in the San Gabriel Valley. By providing bilingual banking services for the many immigrants in that area, the bank has formed a strong grip on this fast-growing and increasingly affluent market niche. More recently, the bank has been diversifying to take advantage of the departure of the large banks that used to be headquartered in Los Angeles and serviced local businesses, Ng said.

In addition, the continuing growth of international trade, in particular with Asia, has made East West one of the premier banks in the region for businesses that require international banking services. The bank has strong ties with financial institutions in Asia.

These growth factors, combined with East West's prudent lending habits, have made the bank a favorite with the few industry analysts who follow the stock.

"They are a premium bank and they are delivering on all fronts," said Derick Derman, an analyst with Wedbush Morgan Securities who rates East West shares a "strong buy" and has a 12-month target price of $19. "They are delivering in terms of earnings growth, asset growth, increasing their net interest margins they've got their engine humming."


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