With declining credit costs and steady loan growth, East West Bancorp Inc. increased its second quarter net income by a healthy 17 percent, narrowly beating analyst estimates.
After the markets closed Wednesday, the Pasadena holding company for East West Bank reported a quarterly profit of $70.6 million (47 cents a share), compared to $60.5 million (39 cents) in the same quarter a year ago. Analysts polled by Bloomberg News expected earnings of just under 46 cents a share.
Dominic Ng, the bank’s chief executive, pointed to several factors influencing the strong results, including efforts to grow its commercial and trade finance loan portfolios.
“The increase in East West’s profitability is due to our success in growing key loan and deposit portfolios, combined with reduced credit costs and strong expense management,” Ng said in a statement.
East West, which caters to the local Chinese-American community and specializes in trade finance, is Los Angeles County’s second largest commercial bank, with $21.5 billion in assets.
The bank said its noncovered loans grew 3 percent during the quarter, while stable core deposits increased 5 percent.
Asset quality improved as well, with nonperforming assets down 7 percent. East West managed to shrink its loan loss provision 42 percent from a year ago to $15.5 million and decreased its net charge-offs by 63 percent to $11.7 million.
The bank estimated third quarter earnings per share between 45 cents and 47 cents. Management also upped the full-year estimates to between $1.84 and $1.86 a share.
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