Cathay General Bancorp (CATY) in Los Angeles reported earnings that were below expectations after expenses rose.
The $10.6 billion-asset company's earnings rose 2% from a year earlier, to $28.3 million. But its earnings per share of 31 cents were 2 cents below average estimate of analysts polled by Bloomberg.
Higher expenses offset revenue growth. Noninterest expenses rose 14% from a year earlier, to $49.5 million, largely because of a spike in prepayment penalties, which totaled $5.9 million in the fourth quarter.
Net interest income rose 2% from a year earlier, to $81 million. Total loans increased by $169.2 million from a year earlier, to $7.2 billion. There was no loan-loss provision in the fourth quarter, compared to a $2 million provision a year earlier. Net charge-offs fell by 70% from the fourth quarter of 2011, to $1.3 million. The net interest margin held steady from a year earlier, at 3.28%.
Noninterest income rose 35% from a year earlier, to $12.2 million, though it included $3.9 million in securities gains.
Cathay is "working diligently to be able to repurchase in installments during 2013" shares issued under the Troubled Asset relief Program, Dunson Cheng, the company's chairman, president and chief executive, said in a press release.