East West Bancorp Inc. saw fourth quarter profit decline nearly 5 percent after the bank raised its loan loss provisions due to the decline in the real estate market.
Net income for the parent of East West Bank fell to $37.2 million (59 cents per share), from $39.1 million (63 cents) from the same period a year earlier. Analysts on average forecast earnings of 63 cents per share, according to Thomson Financial.
The Pasadena-based holding company said its loan loss provisions rose to $9 million compared with $2 million a year earlier.
"While we are pleased with our overall performance for 2007, our fourth-quarter results reflect that we are not immune to the challenging economic environment facing the entire financial industry," said Chairman and Chief Executive Dominic Ng in a statement.
The bank posted record net income of $161 million for 2007, up 12 percent from the prior year. It was the 11th consecutive year the company posted record earnings. But earnings failed to meet analyst expectations as the bank recorded $12 million in loan loss provisions. The company expects the provisions to double to $24 million this year.
Shares in East West were down 4.5 percent to $23.78 in afternoon trading Tuesday on the Nasdaq.
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