PASADENA - East West Bancorp on Wednesday reported that it ended the year more profitable than 2008, bolstered by the purchase of a new bank and the unloading of bad residential construction loans, bank officials said.
The Pasadena-based bank - with branches all over the San Gabriel Valley, and now the country catalog printing and China - ended the year with $76.6million in net earnings. That was a rebound from 2008, when the bank suffered its first net loss in 30 years.
Measures taken to stem the flow of losses were reflected in the year's earnings and in the fourth quarter, which saw net earnings of $259.7 million, officials said.
"Currently, our balance sheet is the strongest it's ever been," said Julia S. Gouw, the bank's president and chief operating officer.
Still, the economy has taken its toll.
While the net earnings were up, they were a far cry from the years before the recession, when net income topped $140 million in 2006 and 2007.
But in an earnings webcast with analysts Wednesday, Gouw, Chief Financial Officer Irene Oh and Chairman and CEO Dominic Ng pointed to increased deposits related to the bank's purchase of San Francisco-based United Commercial Bank and its 60 branches late last year; lower loan delinquencies; and a strong capital ratio as the bank heads into 2010.
A key for the bank has been unloading troubled loans in the midst of the real estate meltdown.
While the bank stayed away from the subprime lending that resulted in bankruptcy for banks such as former neighbor IndyMac, East West had a healthy portfolio of other kinds of loans, such as residential construction.
But the bank has steadily been getting the troubled ones off its back, and is cautious about taking on new ones.
In the fourth quarter ending Dec. 31, East West shed $187 million Prada Replica Handbags in nonperforming assets, a decrease of $43.2 million, or 19 percent, from the third quarter.
Much of those loans were residential construction loans, according to the bank.
The bank's commitments on construction loans fell by $1 billion, 63 percent, over the year.
And though its provision for loan losses was $238.8 million, officials expected those provisions to fall in 2010.
"We believe that on the credit front the worst is over," Gouw said. "2010 will continue to be challenging, but we expect loss provisioning will be lower ... we've already worked through much of our problem loans."
East West got many new loans when it acquired UCB in November, expanding East West's network of branches into Seattle, New York, Boston, and two in China.
Officials touted the acquisition as a sign of strength, given that the Federal Deposit Insurance Corp. was part of the deal.
rolex replicaUltimately, the bank's total assets grew to a record $20.6 billion in the year, a 66 percent increase. Deposits grew by $15 billion, a 84 percent increase.
Ng said as of today, East West is "stabilizing" it's new operations in China, waiting for approvals from the Chinese government to grant the bank a license and name change. It's also working to shed non-performing loans gained in the acquisition of UCB.
Looking forward, the bank stood firm on
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