East West Profit Off; President and COO Julia Gouw to Retire
East West Bancorp in Pasadena, Calif., said higher income taxes and lower interest income were partly to blame for a 3.87% drop, to $91.8 million, in its fourth-quarter profit.
Earnings per share fell 3 cents from a year earlier to 63 cents.
East West announced the results Wednesday. It also announced Wednesday that its president and chief operating officer, Julia Gouw, will retire at the end of March.
CaliforniaEast West Bancorp in Pasadena, Calif., paid $118.4 million to terminate single-family and commercial shared-loss agreements with the Federal Deposit Insurance Corp., tied to an acquisition of a failed bank.
East West Bancorp has been placed under an enforcement action for anti-money-laundering compliance weaknesses, as it continues a plan to spend an estimated total of $12 million on program upgrades.
The decision to terminate a shared-loss agreement with the Federal Deposit Insurance Corp. boosted third-quarter profits at East West Bancorp in Pasadena, Calif.
Gouw, who was 55 at the time of East West's 2015 annual report, joined the company as president and COO after it purchased the failed United Commercial Bank in San Francisco in 2009. It did not say who would succeed her.
The $32.4 billion-asset company's net interest income before the provision for credit losses fell 4.84% to $246.9 million. The net interest margin narrowed by 54 basis points to 3.26%.
East West released $2 million from loan-loss reserves in the three months; in the year-earlier quarter it made a $19 million provision.
Total loans rose 9% to $23.7 billion, led by increases in commercial and commercial real estate lending.
Noninterest income rose nearly sixfold to $44.5 million from $7.8 million. Over the past year, East West has ended loss-share agreements tied to two failed banks it had acquired, United Commercial and Washington First International Bank.
Noninterest expenses rose 15% to $144.9 million on higher costs tied to employee compensation and consulting. Income taxes more than doubled to $56.7 million.