East West Bancorp Q3 Earnings Are Looking Good

East West Bancorp (Nasdaq: EWBC  ) reported earnings for its third quarter yesterday afternoon, and the California-based regional bank appears to have gone well. Net income increased 14% from the same quarter last year to $71.1 million, and earnings per share came in just above analysts' expectations at $0.48, an increase of 17% from last year. The bank with a strong link to Greater China experienced its seventh consecutive quarter of earnings-per-share growth, and continuing success may be ahead.

What I was watching
In addition to the income and EPS numbers referenced above, I was also watching for continued improvement nonperforming assets. The bank reported total nonperforming assets below 1% for the 12th consecutive quarter, but nevertheless saw a slight decrease to its capital ratios. Last quarter saw $952 million in total assets beyond the minimal requirements to be considered "well capitalized." This number decreased to $885 million, but it is still well above the minimum requirements.

What to expect going forward
I am still hoping for the bank to improve the quality of its dividend, but if an increase is to happen, I would anticipate it happen with the release of fourth-quarter earnings in January. With a payout ratio around 17%, there is plenty of room to grow the dividend next year. In the meantime, the bank repurchased 2.3 million shares during the quarter, returning additional value to shareholders.

Regional banks are a often a better option than some of their bigger brethren. In fact some of the best opportunities over the next few years can be found there, including one small, under-the-radar bank. It's been called one of The Stocks Only the Smartest Investors Are Buying. You can learn about it, and more, in our exclusive free report. Just click here to keep reading.

Robert Eberhard has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2063806, ~/Articles/ArticleHandler.aspx, 9/18/2014 11:59:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement