Cathay General Bancorp moved from a loss to a profit in the first quarter as improved credit quality enabled the parent of Cathay Bank parent to take a significantly smaller provision for loan losses.

The holding company for Los Angeles County’s third largest local bank late Wednesday reported net income of $18 million (23 cents per share), compared with a loss of $29.8 million (-41 cents) a year earlier.

Analysts surveyed by Thomson Reuters on average expected the company to report per-share profit of 18 cents.

Revenue rose 10 percent to $87.7 million, Net interest income increased 0.5 percent to $75.1 million and non-interest income soared 162 percent to $12.6 million. Net charge-offs dropped nearly 84 percent to $10.4 million, and the bank’s provision for credit losses fell 93 percent to $6 million.

"We continue to make steady progress in reducing the overall level of credit risk in our loan portfolio and in improving our net interest margin by prepaying shorter maturity wholesale borrowings on a selective basis,” Chief Executive Officer Dunson Cheng said in a statement. “We are hopeful that our profitability will continue to improve to our historical levels over the course of time.”

Shares on Thursday closed up 3 cents, or less than a percent, to $17.08 on the Nasdaq.

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