East West Bancorp Inc. shares gained more than 17 percent Wednesday, despite reporting a worse-than-expected first quarter loss and slashing its quarterly dividend. The owner of L.A. County's second largest locally based bank also raised its provision for loan losses.
Late Tuesday, the Pasadena holding company for East West Bank reported a net loss of $31.2 million (-50 cents per share), compared with net income of $5.04 million (8 cents) a year ago.
Analysts surveyed by Thomson Reuters expected the company to report a per-share loss of 23 cents.
Provision for loan losses for the quarter increased 41 percent to $78 million. Net loan charge offs were 2.91 percent, compared to 1.13 percent a year ago.
Net interest income for the quarter fell 20 percent to $79.7 million, and non-interest income for the quarter dropped13 percent to $13.8 million. The bank grew core deposits 14 percent to $8.5 billion.
The company cut its cash dividend payable May 26 to 1 cent per share from 2 cents to preserve capital.
"We believe that our strong core profitability, along with strong capital, liquidity and allowance for loan losses will serve as a foundation for strong earnings and growth when the market turns," said Chief Executive Dominic Ng in a statement.
East West Bank shares closed up 90 cents, or 17.5 percent, to $6.04 on the Nasdaq.
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