UCBH Holdings Inc. in San Francisco said Friday that second-quarter net income fell 73% from a year earlier, to $7.7 million, or 7 cents a share, because of a higher provision for residential construction loans and a writedown in its investment portfolio.
The results were in line with the average analyst estimate, according to Thomson Reuters.
The $12.9 billion-asset UCBH said that its provision rose 15-fold from a year earlier but fell 7.1% from the first quarter, to $32.6 million.
Nonperforming assets nearly quintupled from a year earlier and grew 8% from the first quarter, to $200 million, or 1.55% of total assets.
UCBH took a $10.8 million writedown on the declining value of several investments, including government-sponsored enterprise stock, mortgage-backed securities, and a collateralized debt obligation.
UCBH's stock rose 21.4% by late Friday, to $4.48 a share, likely because of investors covering short positions, analysts said.
