East West Bancorp swung to a second quarter loss as the bank company’s provision for bad loans soared, leading it to forecast a weak second half.
East West on Thursday posted a second-quarter loss of $25.9 million (- 41 cents per share), a sharp downturn from a profit of $40.5 million (66 cents) in the same period a year ago. Results missed analysts’ expectations of a profit of 5 cents per share, according to Reuters Estimates.
Profit was hurt because it set aside $85 million to cover souring loans. The amount of that provision for loan losses was up 55 percent from the first quarter. The bank company recorded no provision in the second quarter of last year.
Net interest income for the Pasadena-based bank company fell 7 percent to $92.2 million.
East West said it expects third-quarter earnings of 8 cents to 10 cents per share, far less than Wall Street’s estimates of 18 cents per share. It also missed on fourth quarter projections, saying it expected to earn 11 cents to 13 cents per share, compared with analysts’ estimates of 27 cents per share.
Shares in East West closed down 18 cents to $10.92 on Friday.