East West Bancorp, Inc., the parent of East West Bank, reported higher third-quarter profit as net interest income grew, while a larger provision for credit losses reflected a cautious economic outlook.
Net income rose 4% from a year earlier to $382 million, the company said in an earnings release furnished with its Oct. 20 Form 8-K. Revenue increased 6% to $823 million, and diluted earnings per share reached $2.76, compared with $2.65 a year earlier. East West described all three results as records.
East West recorded a $45 million provision for credit losses, up from $33 million in the second quarter. Net charge-offs fell to $22 million from $27 million over the same period. Chairman and Chief Executive Officer Dominic Ng said the company increased its allowance for loan losses as it assessed uncertainty in the economic outlook.
Net interest income climbed 6% from a year earlier to a record $719 million. East West’s net interest margin was 3.49%, above its second-quarter level but below its level a year earlier. The higher net interest income and lower year-over-year margin were separate measures of the bank’s quarterly performance.
Loans totaled $59.7 billion at Sept. 30, while deposits reached $71.5 billion. Each balance was 7% higher than a year earlier. East West linked its deposit growth to its strategy of expanding small-business checking accounts.
The board declared a quarterly dividend of $0.80 per common share. Shareholders of record Nov. 2 are due to receive the payment Nov. 17.
