The two largest U.S. banks serving Chinese Americans — Cathay General Bancorp and East West Bancorp Inc. — both reported double-digit jumps in third-quarter profits. Each cited solid demand for commercial loans.
East West's net income rose 51% year over year, to $60.7 million, while Cathay's said its profits jumped 67%, to $22 million. East West's earnings worked out to 41 cents per share, beating the average estimates of analysts polled by Thomson Reuters by two cents. Cathay earned 28 cents a share, in line with analysts' estimates.
Both companies reported earnings after the close of trading on Wednesday.
The $10.5 billion-asset Cathay, headquartered in Los Angeles, cited several factors for the big jump, including a 49.7% year-over-year decrease in its provision for credit losses, to $9 million.
Also, Cathay’s commercial loans grew 26.4% year over year, to $1.8 billion. Dunson Cheng, Cathay’s chairman, president and chief executive, said in a news release he is “optimistic” that commercial loan demand will persist and comprise a bigger portion of its loan portfolio.
Residential mortgage loans also grew from a year earlier, Cathay said, but construction loans and commercial real estate loans each declined as a category.
East West, a $21.8 billion-asset company based in Pasadena, Calif., said commercial loans grew 77.6% year-over-year, to $3 billion. Credit quality also improved, as its provision for loan losses fell 75.7% to $22 million.