East West Bancorp on Tuesday reported a lower fourth-quarter profit, but the results were better than Wall Street expected. Shares rose in after-market trading after the Pasadena bank forecast earnings that were above analysts’ expectations.
After the markets closed Tuesday, Los Angeles County’s second largest local bank reported net income of $32.2 million (22 cents per share), compared with net income of more than $253 million ($1.96 per share) a year earlier.
Excluding a non-cash charge of $18.7 million, the company earned 35 cents per share. Analysts surveyed by Thomson Reuters on average were expecting adjusted per-share profit of 29 cents.
East West’s provision for loan losses dropped 79 percent to $29.8 million due to improving credit quality, and net interest income rose 11 percent to $247 million. But the bank reported a non-interest loss of $17.2 million, compared with year-earlier non-interest income of $29.3 million, largely due to settlement adjustments related to its FDIC-assisted acquisition of a failed bank.
Chief Executive Dominic Ng noted that the bank’s full-year net income of $165 million was the highest in its history. “We also completed the full integration of two acquisitions in 2010, improving, streamlining, and strengthening our operations,” Ng said in a statement. “During the fourth quarter, East West successfully exited the TARP capital purchase program. We increased earnings each and every quarter in 2010 and expect to continue this upward trend throughout 2011.”
The company forecast earnings this year between $1.44 and $1.48 per share, and expects bad loan provisions to range from $95 to $100 million. Analysts were expecting earnings of $1.38 cents.
Shares earlier closed up 23 cents, or 1 percent, to $20.55 on the Nasdaq, and were up 3.5 percent in after-hours trading.
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