Cathay General Bancorp swung to a profit in the second quarter as the Los Angeles bank holding company increased its income from loans and slashed its provision for credit losses.
After the markets closed Wednesday, the parent of Cathay Bank reported net income available of $20.2 million (26 cents per share), compared with a loss of $2.2 million (-3 cents) a year ago. Analysts surveyed by Thomson Reuters on average expected per-share profit of 26 cents.
Net interest income before provision for credit losses rose 5 percent to $78.3 million. Non-interest income rose 69 percent to $12.5 million.
The bank’s provision for credit losses decreased by 78 percent to $10 million.
"We continue to make steady progress in reducing the overall level of credit risk in our loan portfolio and completed sales of $41 million of nonaccrual loans during the second quarter,” Chief Executive Dunson Cheng said in a statement. “We are hopeful that our continued growth in commercial and residential mortgage loans will increase our profitability back to our historical levels over the course of time.”
Shares on Thursday were down 1 cent, or less than 1 percent, to $16.01 in midday trading on the Nasdaq.
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