Cathay General Bancorp on Thursday announced its quarterly loss was greater than expected but that it has cut its portfolio of delinquent loans by 50 percent, sending the company's shares higher.
Third quarter results for the downtown Los Angeles-based bank company showed it lost $17.7 million, or 43 cents a share, for the July-to-September period. A First Call consensus of analysts expected a loss of 23 cents for the quarter.
By comparison, the bank had a positive net income of $6.9 million or 14 cents per share in the third quarter last year.
Despite the earnings downturn, shares of Cathay gained more than 6 percent following the announcement. By late morning, the stock traded at $8.62, a gain of 49 cents from the previous close.
The bank company reported total loans delinquent 30 days or more decreased by 50 percent to $79.3 million by the end of the quarter, compared to $158.2 million on June 30. Also, non-accrual loans, or those where payments have stopped, declined by 6 percent in the quarter.
"Our focus continues to be managing through this challenging credit cycle, resolving problem assets on a case-by-case basis without resorting to bulk sales and maintaining strong liquidity," Cathay Chairman Dunson Cheng said in a statement. "We expect an increase in the pace of sales of non-accrual loans and foreclosed real estate during the remainder of the year as we continue to resolve problem assets."
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