Shares of East West Bancorp Inc. fell sharply Wednesday after the Pasadena, Calif., company reported that its first-quarter profits fell 88% from a year earlier, to $5 million.
The $11.8 billion-asset East West posted the results late Tuesday. It attributed the drop to a $55 million loan-loss provision in response to weakening real estate conditions in its market.
The company also announced that it was suspending earnings guidance for the rest of the year.
"We currently believe it is unrealistic to provide meaningful guidance as to the level of earnings, given the uncertainty surrounding the economy and real estate market and the potential impact this will have to the company," East West said.
In the first quarter it foreclosed on five properties, including three residential construction loans with a carrying value of $12.2 million.
Net chargeoffs climbed to $25.4 million, from $5.4 million in the fourth quarter and $156,000 a year earlier.
By late Wednesday East West's shares had dropped 10% from Tuesday's close, to $14.12.
Also late Tuesday, East West announced that it has hired Thomas J. Tolda as the chief financial officer and an executive vice president of the holding company and its East West Bank.
Before joining East West, Mr. Tolda spent the last nine years as executive vice president and the CFO of the consumer credit group at Wells Fargo & Co.
He succeeded Julie Gouw, who will become vice chairman and chief risk officer of East West Bank until her planned retirement at yearend.
