Cathay General Bancorp (NASDAQ:CATY) of Los Angeles reported first-quarter earnings of $24.8 million, up roughly 38% from a year earlier, as credit quality improved
The $10.6 billion-asset company reported Tuesday that it recorded a credit of $4 million for its provision for loan losses, compared with a charge of $6 million a year ago. Net chargeoffs declined more than 21%, to $8.1 million, and its nonaccrual loans decreased about 52%, to $131.5 million, year over year.
Cathay General’s noninterest income fell 30%, to $8.8 million, year over year because of a decline in gains from the sale of securities. However, net interest income rose 22% to $84.7 million from a year earlier.
The bank’s noninterest expense dropped less than 1%, to $47.9 million, year over year. Penalties from prepaying $100 million in Federal Home Loan Bank advances totaled $2.8 million, which was 68% lower than the penalties the bank paid a year earlier when it prepaid $200 million in advances. This drop in expense was offset by a $4.5 million increase in other real estate owned expenses and an 8.7% increase in salaries and employee benefits.
Cathay General’s earnings per share totaled 32 cents, beating estimates of analysts polled by Thomson Reuters by two cents.
