LOS ANGELES, Jan. 28 /PRNewswire-FirstCall/ -- Cathay General
Bancorp (the "Company") (NASDAQ:CATY), the holding company for
Cathay Bank (the "Bank"), today announced results for the fourth
quarter of 2009. FINANCIAL PERFORMANCE Three months ended December
31, Year ended December 31, -------------------------------
----------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net
(loss)/ Income ($35.3) million ($2.9) million ($67.4) million $50.5
million Net (loss)/ income attributable to common stockholders
($39.4) million ($4.0) million ($83.7) million $49.4 million
(Loss)/basic earnings per common share ($0.64) ($0.08) ($1.59)
$1.00 (Loss)/ diluted earnings per common share ($0.64) ($0.08)
($1.59) $1.00 Return on average assets -1.19% -0.10% -0.58% 0.47%
Return on average total stockholders' equity -10.45% -1.06% -5.20%
4.95% Efficiency ratio 64.25% 42.24% 50.65% 43.52% FOURTH QUARTER
HIGHLIGHTS -- Nonaccrual portfolio loans down 22% - Total
nonaccrual portfolio loans, excluding $54.8 million of nonaccrual
loans held for sale, decreased by 22.2%, or $79.9 million, to
$280.6 million at December 31, 2009, compared to $360.5 million at
September 30, 2009. -- Other real estate owned ("OREO") decreased
19% - OREO decreased $16.8 million, or 19.1%, during the fourth
quarter of 2009. -- Allowance for credit losses strengthened -
Total allowance for credit losses increased to $217.1 million, or
3.15%, of total loans, excluding loans held for sale, at December
31, 2009, compared to 2.73% of total loans at September 30, 2009.
-- Capital strengthened - During the fourth quarter of 2009, the
Company raised $88.7 million in additional capital through the sale
of 10.4 million shares of common stock through its stock offering
on October 13, 2009, and its new At-the-Market common stock
issuance program which commenced on November 23, 2009. FULL YEAR
HIGHLIGHTS -- In 2009, the Company raised $120.5 million in
additional capital through the sale of 13.9 million shares of
common stock. -- Total deposits increased by $668.3 million, or
9.8%, to $7.5 billion at December 31, 2009, from $6.8 billion at
December 31, 2008. "In the fourth quarter, we have taken several
steps to improve our bank's risk profile and strengthen our capital
base. Our nonaccruals continue to decrease during the fourth
quarter and we are committed to continue to aggressively dispose of
problem assets during 2010. We recorded a provision for credit
losses during the fourth quarter of $91 million which increased our
allowance for credit losses to 3.15% of total loans," commented
Dunson Cheng, Chairman of the Board, Chief Executive Officer, and
President of the Company. "During 2009, we had solid growth in
total deposits, which increased by $668 million, or 10%, which
helped us to improve our net loan to deposit ratio to 90% at
December 31, 2009. We are especially pleased that our core deposits
in 2009 increased $527.4 million, or 20%, to $3.2 billion at
December 31, 2009," said Peter Wu, Executive Vice Chairman and
Chief Operating Officer. "As part of our ongoing evaluation of our
capital levels and needs during this challenging economic period,
we raised additional new capital of $88.7 million during the fourth
quarter. We intend to raise additional capital shortly to provide
the Company with additional capital to take advantage of any new
business opportunities and to continue to strengthen our balance
sheet. Our focus continues to be managing through this challenging
credit cycle, continuing our momentum in resolving problem assets
in 2010 and maintaining strong liquidity," concluded Dunson Cheng.
INCOME STATEMENT REVIEW Net loss attributable to common
stockholders for the three month ended December 31, 2009 was $39.4
million, an increased loss of $35.4 million, compared to net loss
attributable to common stockholders of $4.0 million for the same
period a year ago. Loss per share for the three months ended
December 31, 2009, was $0.64 compared to loss of $0.08 per share
for the same period a year ago due primarily to increases in the
provision for credit losses, lower net interest income and higher
provision for OREO write-downs. Return on average stockholders'
equity was negative 10.45% and return on average assets was
negative 1.19% for the three months ended December 31, 2009,
compared to a return on average stockholders' equity of negative
1.06% and a return on average assets of negative 0.10% for the same
period of 2008. Net interest income before provision for credit
losses Net interest income before provision for credit losses
decreased to $73.8 million during the fourth quarter of 2009, a
decline of $487,000, or 0.7%, compared to $74.2 million during the
same quarter a year ago. The decrease was due primarily to the
increases in interest expense paid for securities sold under
agreements to repurchase. The net interest margin, on a fully
taxable-equivalent basis, was 2.65% for both the fourth quarter of
2009 and the third quarter of 2009 and was impacted during the
fourth quarter by the substantial amount of short term liquidity
which has been redeployed in securities towards the end of the
fourth quarter. The net interest margin decreased 20 basis points
from 2.85%, on a fully taxable-equivalent basis, in the fourth
quarter of 2008. The decrease in net interest margin from
corresponding quarter of the prior year primarily resulted from
increases in non-accrual loans and the increase in the borrowing
rate on our long term repurchase agreements and other borrowed
funds. The majority of our variable rate loans contain interest
rate floors, which help limit the impact of the record low level of
the prime interest rate. For the fourth quarter of 2009, the yield
on average interest-earning assets was 4.66%, on a fully
taxable-equivalent basis, the cost of funds on average
interest-bearing liabilities equaled 2.35%, and the cost of
interest bearing deposits was 1.63%. In comparison, for the fourth
quarter of 2008, the yield on average interest-earning assets was
5.57%, on a fully taxable-equivalent basis, cost of funds on
average interest-bearing liabilities equaled 3.10%, and the cost of
interest bearing deposits was 2.72%. The interest spread, defined
as the difference between the yield on average interest-earning
assets and the cost of funds on average interest-bearing
liabilities, decreased 16 basis points to 2.31% for the fourth
quarter ended December 31, 2009, from 2.47% for the same quarter a
year ago, primarily due to the reasons discussed above. The cost of
deposits, including demand deposits, decreased 17 basis points to
1.45% in the fourth quarter of 2009 compared to 1.62% in the third
quarter of 2009 and decreased 97 basis points from 2.42% in the
fourth quarter of 2008 due primarily to the decrease in the rates
paid on certificates of deposit upon renewal and for core deposits
as a result of the decline in market interest rates. Provision for
credit losses The provision for credit losses was $91.0 million for
the fourth quarter of 2009 compared to $76.0 million for the third
quarter of 2009 and compared to $62.9 million in the fourth quarter
of 2008. The provision for credit losses was based on the review of
the adequacy of the allowance for loan losses at December 31, 2009.
The provision for credit losses represents the charge against
current earnings that is determined by management, through a credit
review process, as the amount needed to establish an allowance that
management believes to be sufficient to absorb credit losses
inherent in the Company's loan portfolio, including unfunded
commitments. The following table summarizes the charge-offs and
recoveries for the periods as indicated: For the three months For
the year ended December 31, ended December 31, --------------------
------------------ (In thousands) 2009 2008 2009 2008 ---- ----
---- ---- Charge-offs: Commercial loans $9,713 $4,015 $59,370
$12,932 Construction loans- residential 12,612 12,414 71,147 20,653
Construction loans- other 11,394 - 22,128 - Real estate loans (1)
26,381 4,738 52,931 5,291 Real estate- land loans 9,368 9,213
16,967 9,553 Installment and other loans - 254 4 254 -------
------- ------- ------- Total charge-offs(2) 69,468 30,634 222,547
48,683 ------- ------- ------- ------- Recoveries: Commercial loans
381 116 904 1,750 Construction loans- residential 367 - 1,140 83
Real estate loans (1) 415 - 461 - Real estate- land loans 6 - 692 -
Installment and other loans 2 - 21 16 ------- ------- -------
------- Total recoveries 1,171 116 3,218 1,849 ------- -------
------- ------- Net Charge-offs $68,297 $30,518 $219,329 $46,834
======= ======= ======= ======= (1) Real estate loans includes
commercial mortgage loans, residential mortgage loans and equity
lines. (2) Total charge-offs for the fourth quarter of 2009
included charge-offs of $19.3 million recorded upon the transfer of
loans to loans held for sale. Total charge-offs of $69.5 million
for the fourth quarter of 2009 included $24.0 million of
charge-offs on 17 construction loans, $25.4 million of charge-offs
on 29 commercial real estate loans, $9.7 million on 21 commercial
loans, $9.4 million of charge-offs on eight land loans and $942,000
charge-offs on residential mortgage loans. Net loan charge-offs
remained high in the fourth quarter as a result of the continuing
weak economy and the charge-offs related to the transfer of certain
loans to held for sale status. Non-interest income Non-interest
income, which includes revenues from depository service fees,
letters of credit commissions, securities gains (losses), gains
(losses) on loan sales, wire transfer fees, and other sources of
fee income, was $8.3 million for the fourth quarter of 2009, a
decrease of $3.3 million compared to the non-interest income of
$11.6 million for the fourth quarter of 2008. The decrease in
non-interest income was primarily due to a decrease in securities
gains from $7.0 million in the fourth quarter of 2008 to $3.3
million in the fourth quarter of 2009. In addition, the net loss
for interest rate swaps increased $1.0 million and venture capital
income decreased $272,000 in the fourth quarter of 2009. Offsetting
the above non-interest income decreases were a $1.0 million
decrease in other-than-temporary impairment write-down of the
Company's investment in the common stock of Broadway Financial
Corporation during 2008 and a $730,000 increase in gains on sale of
loans. Non-interest expense Non-interest expense increased $16.5
million, or 45.4%, to $52.7 million in the fourth quarter of 2009
compared to $36.2 million in the same quarter a year ago. The
efficiency ratio was 64.25% in the fourth quarter of 2009 compared
to 42.24% for the same period a year ago due primarily to higher
OREO expenses in the fourth quarter of 2009 and higher securities
gains recorded in the same quarter a year ago. OREO expense
increased $12.8 million to $15.9 million in the fourth quarter of
2009 from $3.1 million in the same quarter a year ago primarily due
to write-downs required as a result of continued decline in real
estate values and expense resulting from increased OREO holdings.
Professional service expense increased $3.3 million to $6.4 million
in the fourth quarter of 2009 compared with $3.1 million in the
same quarter a year ago due mainly to increases in legal expenses,
professional expenses, and collection expenses. FDIC and State
assessments increased $2.4 million to $4.0 million in the fourth
quarter of 2009 from $1.6 million in the same quarter a year ago
due to a higher assessment rate and higher deposit balances.
Occupancy expense increased $665,000 primarily due to our new
administrative offices at 9650 Flair Drive, El Monte which opened
in January 2009. Offsetting the above described increases were
decreases of $1.6 million in salaries and employee benefits due
primarily to a $751,000 decrease in option compensation expense, a
$407,000 decrease in salaries, and a $231,000 decrease in bonus
accruals and decreases of $727,000 in marketing expense. Income
taxes The tax benefit for the fourth quarter of 2009 resulted from
the pretax loss for the quarter and the utilization of low income
housing tax credits. BALANCE SHEET REVIEW Total assets were $11.6
billion at both December 31, 2009 and December 31, 2008. Securities
held-to-maturity increased $635.0 million and short-term investment
and interest bearing deposits increased $229.7 million offset
primarily by a $518.4 million decrease in gross loans and by a
$201.0 million decrease in securities purchased under agreement to
resell. The changes in the loan composition from December 31, 2008,
are presented below: Type of Loans: December 31, 2009 December 31,
2008 % Change -------------- ----------------- -----------------
-------- (Dollars in thousands) Commercial $1,307,880 $1,620,438
(19) Residential mortgage 682,291 622,741 10 Commercial mortgage
4,065,155 4,132,850 (2) Equity lines 195,975 168,756 16 Real estate
construction 626,087 913,168 (31) Installment 13,390 11,340 18
Other 8,364 3,075 172 ---------- ---------- Gross loans and leases
$6,899,142 $7,472,368 (8) Allowance for loan losses (211,889)
(122,093) 74 Unamortized deferred loan fees (8,339) (10,094) (17)
---------- ---------- Total loans and leases, net $6,678,914
$7,340,181 (9) ---------- ---------- Loans held for sale $54,826 $-
100 ---------- ---------- Total deposits were $7.5 billion at
December 31, 2009, an increase of $668.3 million, or 9.8%, from
$6.8 billion at December 31, 2008, primarily due to increases of
$283.7 million, or 43.0%, in money market deposits, increases of
$253.4 million, or 7.8%, in time deposits of $100,000 or more, and
increases of $134.1 million, or 18.4%, in non-interest-bearing
deposits offset by decreases of $114.5 million, or 7.0%, in time
deposits under $100,000. The changes in the deposit composition
from December 31, 2008, are presented below: Deposits December 31,
2009 December 31, 2008 % Change -------- -----------------
----------------- -------- (Dollars in thousands)
Non-interest-bearing demand $864,551 $730,433 18 NOW 337,304
257,234 31 Money market 943,164 659,454 43 Savings 347,724 316,263
10 Time deposits under $100,000 1,529,954 1,644,407 (7) Time
deposits of $100,000 or more 3,482,343 3,228,945 8 ---------
--------- Total deposits $7,505,040 $6,836,736 10 ==========
========== ASSET QUALITY REVIEW At December 31, 2009, total
non-accrual portfolio loans, excluding non-accrual loans held for
sale, were $280.6 million, a decrease of $79.9 million, or 22.2%,
from $360.5 million at September 30, 2009 and an increase of $99.4
million, or 54.9%, from $181.2 million at December 31, 2008. A
summary of non-accrual loans by collateral type as of December 31,
2009 is shown below: No. of Other No. of No. of Collateral Type
California Loans States Loans Total Loans ---------- ------ ------
----- ----- ------ (Dollars in thousands except no. of loans)
Non-accrual portfolio loans Commercial real estate $82,106 22
$30,667 25 $112,773 47 Commercial 22,873 31 3,697 9 26,570 40
Construction- residential 50,322 9 4,168 4 54,490 13 Construction-
non-residential 35,972 8 825 1 36,797 9 Residential mortgage 6,922
25 2,556 11 9,478 36 Land 20,706 14 19,828 6 40,534 20 -------- ---
-------- --- -------- --- Total non-accrual portfolio loans
$218,901 109 $61,741 56 $280,642 165 -------- --- -------- ---
-------- --- Non-accrual loans held for sale $25,628 6 $29,198 4
$54,826 10 -------- --- -------- --- -------- --- Included in
nonaccrual commercial real estate loans is a loan with an
outstanding balance of $47.6 million to a borrower who filed for
bankruptcy in March 2009. While the loan is on non-accrual at
December 31, 2009, management believes that the value and cash flow
of the underlying real estate collateral is sufficient for a full
collection of principal and interest. Nonaccrual loans also include
those troubled debt restructurings that do not qualify for accrual
status. At December 31, 2009, non-accrual loans held for sale of
$54.8 million comprised of a $15.6 million residential construction
loan which is expected to be sold in February, 2010, $11.7 million
for seven commercial real estate loans, a $1.5 million construction
loan, and $26.0 million for a commercial real estate loan which was
sold on December 30, 2009. The sale of the $26.0 million commercial
real estate loan will be recognized for financial reporting
purposes during the first quarter of 2010 when the cash portion of
the purchase price is received. Total charge-offs of $19.3 million
were recorded during the fourth quarter of 2009 upon the transfer
of loans to held for sale. During the fourth quarter, eight loans
were sold for $22.0 million. At December 31, 2009, total
residential construction loans were $227.0 million of which $7.4
million were in the Central Valley in California and $12.3 million
were in San Bernardino and Riverside counties in California. At
December 31, 2009, total land loans were $184.6 million of which
$9.3 million were in San Bernardino, Riverside, and Imperial
counties, $2.5 million were in the Central Valley and $19.8 million
in the state of Nevada. Troubled debt restructurings on accrual
status totaled $55.0 million at December 31, 2009 and were
comprised of 14 loans. These loans are classified as troubled debt
restructurings as a result of granting a concession to borrowers.
The concessions may be granted in various forms, including
reduction in the stated interest rate, reduction in the loan
balance or accrued interest, or extension of the maturity date.
Although these loan modifications are considered Statement 15
troubled debt restructurings, the loans have performed under the
restructured terms and have demonstrated sustained performance
under the modified terms. The sustained performance considered by
management includes the periods prior to the modification if the
prior performance met or exceeded the modified terms as well as
cash paid to set up interest reserves. At December 31, 2009, other
real estate owned totaled $71.0 million which was $16.8 million, or
19.1%, lower compared to $87.8 million at September 30, 2009, but
increased $10.0 million, or 16.4%, from $61.0 million at December
31, 2008. At December 31, 2009, $51.6 million of OREO was located
in California, $12.7 million of OREO was located in Texas, $4.3
million of OREO was located in the state of Washington, and $2.4
million was located in all other states. The ratio of
non-performing assets, excluding non-accrual loans held for sale,
to total assets was 3.0% at December 31, 2009, compared to 2.2% at
December 31, 2008, and compared to 4.0% at September 30, 2009.
Total non-performing portfolio assets decreased $113.1 million, or
24.3%, to $351.7 million at December 31, 2009, compared with $464.8
million at September 30, 2009, primarily due to a $79.9 million
decrease in non-accrual loans, a $16.8 million decrease in OREO and
a $16.5 million decrease in 90 days or more past due still accruing
loans. Total non-performing portfolio assets increased $99.8
million, or 39.6%, to $351.7 million at December 31, 2009, compared
with $251.8 million at December 31, 2008, primarily due to a $99.4
million increase in non-accrual loans and a $10.0 million increase
in OREO. The allowance for loan losses was $211.9 million and the
allowance for off-balance sheet unfunded credit commitments was
$5.2 million at December 31, 2009, and represented the amount that
the Company believes to be sufficient to absorb credit losses
inherent in the Company's loan portfolio. The allowance for credit
losses, the sum of allowance for loan losses and for off-balance
sheet unfunded credit commitments, was $217.1 million at December
31, 2009, compared to $129.4 million at December 31, 2008, an
increase of $87.7 million, or 67.7%. The allowance for credit
losses represented 3.15% of period-end gross loans, excluding loans
held for sale, and 77.4% of non-performing portfolio loans at
December 31, 2009. The comparable ratios were 1.73% of period-end
gross loans and 68.9% of non-performing loans at December 31, 2008.
Results of the changes from December 31, 2008 and September 30,
2009, to December 31, 2009, of the Company's non-performing assets
and troubled debt restructurings are highlighted below: (Dollars in
thousands) December 31, September 30, % December 31, % 2009 2009
Change 2008 Change ------ ------ ------ ------ ------
Non-performing assets Accruing loans past due 90 days or more $-
$16,507 (100) $6,733 (100) Non-accrual portfolio loans:
Construction- residential 54,490 96,329 (43) 100,169 (46)
Construction- non-residential 36,797 35,201 5 22,012 67 Land 40,534
27,258 49 12,608 221 Commercial real estate, excluding land 112,774
164,967 (32) 19,733 471 Commercial 26,570 25,479 4 20,904 27
Residential mortgage 9,478 11,271 (16) 5,776 64 -------- --------
---- -------- ---- Total non-accrual loans: $280,643 $360,505 (22)
$181,202 55 -------- -------- ---- -------- ---- Total
non-performing loans 280,643 377,012 (26) 187,935 49 Other real
estate owned and other assets 71,014 87,769 (19) 63,892 11 --------
-------- ---- -------- ---- Total non-performing assets $351,657
$464,781 (24) $251,827 40 -------- -------- ---- -------- ----
Performing troubled debt restructurings $54,992 $59,400 (7) $924
5,852 Non-accrual loans held for sale $54,826 - 100 $- 100
Allowance for loan losses $211,889 $189,370 12 $122,093 74
Allowance for off-balance sheet credit commitments 5,207 5,023 4
7,332 (29) -------- -------- ---- -------- ---- Allowance for
credit losses $217,096 $194,393 12 $129,425 68 ======== ========
==== ======== ==== Total gross loans outstanding at period-end (1)
$6,899,142 $7,115,582 (3) $7,472,368 (8) Allowance for loan losses
to non-performing loans, at period-end (2) 75.50% 50.23% 64.97%
Allowance for loan losses to gross loans, at period-end (1) 3.07%
2.66% 1.63% Allowance for credit losses to non-performing loans, at
period-end (2) 77.36% 51.56% 68.87% Allowance for credit losses to
gross loans, at period-end (1) 3.15% 2.73% 1.73% (1) Excludes loans
held for sale, at period-end. (2) Excludes non-accrual loans held
for sale at period-end. CAPITAL ADEQUACY REVIEW At December 31,
2009, the Tier 1 risk-based capital ratio of 13.55%, total
risk-based capital ratio of 15.43%, and Tier 1 leverage capital
ratio of 9.64%, continue to place the Company in the "well
capitalized" category for regulatory purposes, which is defined as
institutions with a Tier 1 risk-based capital ratio equal to or
greater than 6%, a total risk-based capital ratio equal to or
greater than 10%, and a Tier 1 leverage capital ratio equal to or
greater than 5%. At December 31, 2008, the Company's Tier 1
risk-based capital ratio was 12.12%, the total risk-based capital
ratio was 13.94%, and Tier 1 leverage capital ratio was 9.79%.
During the fourth quarter of 2009, the Company raised additional
capital of $88.7 million from the sale of approximately 10.4
million shares of common stock; $76.0 million from its stock
offering on October 13, 2009 at $9.25 per share for 8,756,756
shares and $12.3 million from 1,623,100 shares from its new
At-the-Market common stock issuance program which commenced on
November 23, 2009. YEAR-TO-DATE REVIEW Net loss attributable to
common stockholders for the year ended December 31, 2009, was $83.7
million, a $133.1 million decrease in income compared to net income
attributable to common stockholders of $49.4 million for the year
ended December 31, 2008. Loss per share was $1.59 for the year
ended December 31, 2009, compared to earnings of $1.00 per diluted
share for year ended December 31, 2008, due primarily to increases
in the provision for loan losses, lower net interest income and
higher provision for OREO write-downs. The net interest margin for
the year of 2009 decreased 33 basis points to 2.62% compared to
2.95% for the year of 2008. Return on average stockholders' equity
was negative 5.20% and return on average assets was negative 0.58%
for the year of 2009 compared to a return on average stockholders'
equity of 4.95% and a return on average assets of 0.47% for the
year of 2008. The efficiency ratio for the year of 2009 was 50.65%
compared to 43.52% for the year of 2008. CONFERENCE CALL Cathay
General Bancorp will host a conference call this afternoon to
discuss its fourth-quarter and year-end 2009 financial results. The
call will begin at 3:00 p.m. PDT. Analysts and investors may dial
in and participate in the question-and-answer session. To access
the call, please dial 1-866-202-4683 and enter Participant Passcode
19183671. A listen-only live Webcast of the call will be available
at http://www.cathaygeneralbancorp.com/ and a recorded version will
be available for replay for 12 months after the call. ABOUT CATHAY
GENERAL BANCORP Cathay General Bancorp is the holding company for
Cathay Bank, a California state-chartered bank. Founded in 1962,
Cathay Bank offers a wide range of financial services. Cathay Bank
currently operates 31 branches in California, eight branches in New
York State, one in Massachusetts, two in Texas, three in Washington
State, three in the Chicago, Illinois area, one in New Jersey, one
in Hong Kong, and a representative office in Shanghai and in
Taipei. Cathay Bank's website is found at
http://www.cathaybank.com/. Cathay General Bancorp's website is
found at http://www.cathaygeneralbancorp.com/. Information set
forth on such websites is not incorporated into this press release.
FORWARD-LOOKING STATEMENTS AND OTHER NOTICES The information
contained in this press release is not intended as a solicitation
to buy Cathay General Bancorp stock or any other securities and is
provided for information only. Statements made in this press
release, other than statements of historical fact, are
forward-looking statements within the meaning of the applicable
provisions of the Private Securities Litigation Reform Act of 1995
regarding management's beliefs, projections, and assumptions
concerning future results and events. These forward-looking
statements may include, but are not limited to, such words as
"aims," "anticipates," "believes," "could," "estimates," "expects,"
"hopes," "intends," "may," "plans," "projects," "seeks," "shall,"
"should," "will," "predicts," "potential," "continue," and
variations of these words and similar expressions. Forward-looking
statements are based on estimates, beliefs, projections, and
assumptions and are not guarantees of future performance. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Such risks and uncertainties and other factors
include, but are not limited to, adverse developments or conditions
related to or arising from: significant volatility and
deterioration in the credit and financial markets; adverse changes
in general economic conditions; the effects of the Emergency
Economic Stabilization Act, the American Recovery and Reinvestment
Act, and the Troubled Asset Relief Program (TARP) and any changes
or amendments thereto; deterioration in asset or credit quality;
the availability of capital; the impact of any goodwill impairment
that may be determined; acquisitions of other banks, if any;
fluctuations in interest rates; the soundness of other financial
institutions; expansion into new market areas; earthquakes,
wildfires, or other natural disasters; competitive pressures;
changes in laws, regulations, and accounting rules, or their
interpretations; legislative, judicial, or regulatory actions and
developments against us; and general economic or business
conditions in California and other regions where Cathay Bank has
operations, including, but not limited to, adverse changes in
economic conditions resulting from the continuation or worsening of
the current economic downturn. These and other factors are further
described in Cathay General Bancorp's Current Report on Form 8-K
filed on November 23, 2009, (Item 8.01 in particular), other
reports filed with the Securities and Exchange Commission ("SEC"),
and other filings Cathay General Bancorp makes with the SEC from
time to time. Actual results in any future period may also vary
from the past results discussed in this press release. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on any forward-looking statements, which speak to the date
of this press release. Cathay General Bancorp has no intention and
undertakes no obligation to update any forward-looking statement or
to publicly announce any revision of any forward-looking statement
to reflect future developments or events, except as required by
law. Cathay General Bancorp's filings with the SEC are available at
the website maintained by the SEC at http://www.sec.gov/, or by
request directed to Cathay General Bancorp, 9650 Flair Drive, El
Monte, California 91731, Attention: Investor Relations (626)
279-3286. CATHAY GENERAL BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited) Three months Twelve months (Dollars in ended December
31, ended December 31, thousands, ------------------------
----------------------- except % % per share data) 2009 2008 Change
2009 2008 Change ---- ---- ------ ---- ---- ------ FINANCIAL
PERFORMANCE Net interest income before provision for credit losses
$73,755 $74,242 (1) $282,692 $295,147 (4) Provision for credit
losses 91,000 62,900 45 307,000 106,700 188 ------- ------ ----
------- ------- ---- Net interest (loss)/income after provision for
credit losses (17,245) 11,342 (252) (24,308) 188,447 (113)
Non-interest income/(loss) 8,272 11,577 (29) 78,654 18,907 316
Non-interest expense 52,701 36,247 45 183,037 136,676 34 -------
------ ---- ------- ------- ---- (Loss)/income before income tax
(benefit)/ expense (61,674) (13,328) 363 (128,691) 70,678 (282)
Income tax (benefit)/ expense (26,550) (10,579) 151 (61,912) 19,554
(417) ------- ------ ---- ------- ------- ---- Net (loss)/ income
(35,124) (2,749) 1,178 (66,779) 51,124 (231) Net (loss)/ income
attributable to noncontrolling interest (154) (151) 2 (611) (603) 1
------- ------ ---- ------- ------- ---- Net (loss)/ income
attributable to Cathay General Bancorp (35,278) (2,900) 1,116
(67,390) 50,521 (233) ------- ------ ---- ------- ------- ----
Dividends on preferred stock (4,089) (1,140) 259 (16,338) (1,140)
1,333 ------- ------ ---- ------- ------- ---- Net (loss)/ income
available to common stockholders $(39,367) $(4,040) 874 $(83,728)
$49,381 (270) ======= ====== ==== ======= ======= ==== Net (loss)/
income available to common stockholders per common share: Basic
$(0.64) $(0.08) 700 $(1.59) $1.00 (259) Diluted $(0.64) $(0.08) 700
$(1.59) $1.00 (259) Cash dividends paid per common share $0.010
$0.105 (90) $0.205 $0.420 (51)
=========================================================================
SELECTED RATIOS Return on average assets -1.19% -0.10% 1,090 -0.58%
0.47% (223) Return on average total stockholders' equity -10.45%
-1.06% 886 -5.20% 4.95% (205) Efficiency ratio 64.25% 42.24% 52
50.65% 43.52% 16 Dividend payout ratio n/m nm n/m n/m 41.07% n/m *
n/m-not meaningful
=========================================================================
YIELD ANALYSIS (Fully taxable equivalent) Total interest- earning
assets 4.66% 5.57% (16) 4.90% 5.89% (17) Total interest- bearing
liabilities 2.35% 3.10% (24) 2.63% 3.35% (21) Net interest spread
2.31% 2.47% (6) 2.27% 2.54% (11) Net interest margin 2.65% 2.85%
(7) 2.62% 2.95% (11)
=========================================================================
CAPITAL RATIOS Well Minimum December 31, December 31, September 30,
Capitalized Regulatory 2009 2008 2009 Requirements Requirements
------ ------ ------ ------------ ------------ Tier 1 risk- based
capital ratio 13.55% 12.12% 12.63% 6.0% 4.0% Total risk- based
capital ratio 15.43% 13.94% 14.49% 10.0% 8.0% Tier 1 leverage
capital ratio 9.64% 9.79% 9.29% 5.0% 4.0%
=========================================================================
CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share December 31, December 31, %
and per share data) 2009 2008 change ------ ------ ------ Assets
Cash and due from banks $100,124 $84,818 18 Short-term investments
and interest bearing deposits 254,726 25,000 919 Securities
purchased under agreements to resell - 201,000 (100) Securities
held-to-maturity 635,015 - 100 Securities available-for-sale
(amortized cost of $2,916,491 in 2009 and $3,043,566 in 2008)
2,915,099 3,083,817 (5) Trading securities 18 12 50 Loans held for
sale 54,826 - 100 Loans 6,899,142 7,472,368 (8) Less: Allowance for
loan losses (211,889) (122,093) 74 Unamortized deferred loan fees,
net (8,339) (10,094) (17) ----------- ----------- Loans, net
6,678,914 7,340,181 (9) Federal Home Loan Bank stock 71,791 71,791
- Other real estate owned, net 71,014 61,015 16 Affordable housing
investments, net 95,853 103,562 (7) Premises and equipment, net
108,635 104,107 4 Customers' liability on acceptances 26,554 39,117
(32) Accrued interest receivable 35,982 43,603 (17) Goodwill
316,340 319,557 (1) Other intangible assets, net 23,157 29,246 (21)
Other assets 200,184 75,813 164 ----------- ----------- Total
assets $11,588,232 $11,582,639 0 =========== ===========
Liabilities and Stockholders' Equity Deposits Non-interest-bearing
demand deposits $864,551 $730,433 18 Interest-bearing deposits: NOW
deposits 337,304 257,234 31 Money market deposits 943,164 659,454
43 Savings deposits 347,724 316,263 10 Time deposits under $100,000
1,529,954 1,644,407 (7) Time deposits of $100,000 or more 3,482,343
3,228,945 8 ----------- ----------- Total deposits 7,505,040
6,836,736 10 ----------- ----------- Federal funds purchased -
52,000 (100) Securities sold under agreements to repurchase
1,557,000 1,610,000 (3) Advances from the Federal Home Loan Bank
929,362 1,449,362 (36) Other borrowings from financial institutions
7,212 - 100 Other borrowings for affordable housing investments
19,320 19,500 (1) Long-term debt 171,136 171,136 - Acceptances
outstanding 26,554 39,117 (32) Other liabilities 59,864 103,401
(42) ----------- ----------- Total liabilities 10,275,488
10,281,252 (0) ----------- ----------- Commitments and
contingencies - - - ----------- ----------- Stockholders' Equity
Preferred stock, 10,000,000 shares authorized, 258,000 issued and
outstanding in 2009 and 2008 243,967 240,554 1 Common stock, $0.01
par value, 100,000,000 shares authorized, 67,667,155 issued and
63,459,590 outstanding at December 31, 2009 and 53,715,815 issued
and 49,508,250 outstanding at December 31, 2008 677 537 26
Additional paid-in-capital 634,623 508,613 25 Accumulated other
comprehensive income, net (875) 23,327 (104) Retained earnings
551,588 645,592 (15) Treasury stock, at cost (4,207,565 shares in
2009 and in 2008) (125,736) (125,736) - ----------- -----------
Total Cathay General Bancorp stockholders' equity 1,304,244
1,292,887 1 ----------- ----------- Noncontrolling interest 8,500
8,500 - ----------- ----------- Total equity 1,312,744 1,301,387 1
----------- ----------- Total liabilities and equity $11,588,232
$11,582,639 0 =========== =========== Book value per common stock
share $16.49 $20.90 (21) Number of common stock shares outstanding
63,459,590 49,508,250 28 CATHAY GENERAL BANCORP CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended
Twelve months ended December 31, December 31, ------------------
------------------- 2009 2008 2009 2008 ------ ------ ------ ------
(In thousands, except share and per share data) INTEREST AND
DIVIDEND INCOME Loan receivable, including loan fees $99,599
$110,336 $401,831 $452,216 Investment securities- taxable 29,835
31,383 123,939 115,890 Investment securities- nontaxable 168 276
788 1,250 Federal Home Loan Bank stock - 616 149 3,301 Agency
preferred stock - - 1,621 Federal funds sold and securities
purchased under agreements to resell 13 2,723 1,351 15,017 Deposits
with banks 423 133 673 656 ------- ------- ------- ------- Total
interest and dividend income 130,038 145,467 528,731 589,951
------- ------- ------- ------- INTEREST EXPENSE Time deposits of
$100,000 or more 18,012 24,895 83,349 111,293 Other deposits 10,011
16,898 50,207 66,417 Securities sold under agreements to repurchase
16,655 15,843 65,182 60,559 Advances from Federal Home Loan Bank
10,661 11,283 42,442 46,512 Long-term debt 944 2,201 4,835 9,090
Short-term borrowings - 105 24 933 ------- ------- ------- -------
Total interest expense 56,283 71,225 246,039 294,804 -------
------- ------- ------- Net interest income before provision for
credit losses 73,755 74,242 282,692 295,147 Provision for credit
losses 91,000 62,900 307,000 106,700 ------- ------- -------
------- Net interest (loss)/income after provision for loan losses
(17,245) 11,342 (24,308) 188,447 ------- ------- ------- -------
NON-INTEREST INCOME Securities gains (losses), net 3,325 7,009
55,644 (5,971) Letters of credit commissions 1,057 1,332 4,216
5,613 Depository service fees 1,266 1,105 5,206 4,741 Other
operating income 2,624 2,131 13,588 14,524 ------- ------- -------
------- Total non-interest income 8,272 11,577 78,654 18,907
------- ------- ------- ------- NON-INTEREST EXPENSE Salaries and
employee benefits 14,426 15,983 60,795 66,626 Occupancy expense
3,983 3,318 16,109 13,236 Computer and equipment expense 1,918
1,835 7,856 7,859 Professional services expense 6,407 3,121 16,428
12,011 FDIC and State assessments 4,014 1,637 19,386 4,809
Marketing expense 440 1,167 2,593 3,616 Other real estate owned
expense 15,925 3,147 36,075 4,953 Operations of affordable housing
investments 2,083 2,036 7,338 7,397 Amortization of core deposit
intangibles 1,547 1,713 6,636 6,909 Other operating expense 1,958
2,290 9,821 9,260 ------- ------- ------- ------- Total
non-interest expense 52,701 36,247 183,037 136,676 ------- -------
------- ------- (Loss)/income before income tax (benefit)/ expense
(61,674) (13,328) (128,691) 70,678 Income tax (benefit)/ expense
(26,550) (10,579) (61,912) 19,554 ------- ------- ------- -------
Net (loss)/income (35,124) (2,749) (66,779) 51,124 Less: net income
attributable to noncontrolling interest (154) (151) (611) (603)
------- ------- ------- ------- Net (loss)/income attributable to
Cathay General Bancorp (35,278) (2,900) (67,390) 50,521 -------
------- ------- ------- Dividends on preferred stock (4,089)
(1,140) (16,338) (1,140) ------- ------- ------- ------- Net
(loss)/income available to common stockholders $(39,367) $(4,040)
$(83,728) $49,381 ======= ======= ======= ======= Net (loss)/income
available to common stockholders per common share: Basic $(0.64)
$(0.08) $(1.59) $1.00 Diluted $(0.64) $(0.08) $(1.59) $1.00 Cash
dividends paid per common share $0.010 $0.105 $0.205 $0.420 Basic
average common shares outstanding 61,146,538 49,480,850 52,629,159
49,414,824 Diluted average common shares outstanding 61,146,538
49,480,850 52,629,159 49,529,793 CATHAY GENERAL BANCORP AVERAGE
BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
For the three months ended,
------------------------------------------------------- (In
thousands) December 31, December 31, September 30, 2009 2008 2009
----------------- ---------------- ---------------- Average Average
Average Interest- Yield/ Yield/ Yield/ earning Average Rate Average
Rate Average Rate assets Balance (1)(2) Balance (1)(2) Balance
(1)(2) ------- ------- ------- ------- ------- ------- Loans and
leases (1) $7,056,871 5.60% $7,500,351 5.85% $7,211,971 5.48%
Taxable investment securities 3,341,762 3.54% 2,625,517 4.76%
3,385,904 3.70% Tax-exempt investment securities (2) 15,324 6.68%
26,190 6.45% 18,590 5.48% FHLB stock 71,791 0.00% 68,235 3.59%
71,819 0.82% Federal funds sold and securities purchased under
agreements to resell 44,185 0.12% 155,326 6.97% 104,946 0.13%
Deposits with banks 541,845 0.31% 19,471 2.72% 57,297 0.82%
----------- ----- ----------- ----- ----------- ----- Total
interest- earning assets $11,071,778 4.66% $10,395,090 5.57%
$10,850,527 4.82% ----------- ----------- ----------- -----
Interest- bearing liabilities Interest- bearing demand deposits
$333,583 0.32% $260,558 0.48% $310,047 0.40% Money market 996,423
1.30% 746,152 1.63% 967,839 1.54% Savings deposits 376,949 0.21%
331,329 0.25% 338,053 0.21% Time deposits 5,120,702 1.88% 4,777,558
3.18% 5,175,066 2.04% ----------- ----- ----------- -----
----------- ----- Total interest- bearing deposits $6,827,657 1.63%
$6,115,597 2.72% $6,791,005 1.80% Federal funds purchased - 0.00%
39,620 1.05% 163 0.45% Securities sold under agreements to
repurchase 1,553,522 4.25% 1,555,217 4.05% 1,556,343 4.22% Other
borrowed funds 953,545 4.44% 1,262,653 3.55% 957,558 4.42%
Long-term debt 171,136 2.19% 171,136 5.12% 171,136 2.47%
----------- ----- ----------- ----- ----------- ----- Total
interest- bearing liabilities 9,505,860 2.35% 9,144,223 3.10%
9,476,205 2.48% Non-interest- bearing demand deposits 851,664
759,038 783,826 ----------- ----------- ----------- Total deposits
and other borrowed funds $10,357,524 $9,903,261 $10,260,031
----------- ----------- ----------- Total average assets
$11,790,703 $11,148,143 $11,626,640 Total average equity $1,347,477
$1,102,248 $1,264,864 ----------- ----------- ----------- For the
twelve months ended, ----------------------------------- (In
thousands) December 31, December 31, 2009 2008 ----------------
---------------- Average Average Interest- Yield/ Yield/ earning
Average Rate Average Rate assets Balance (1)(2) Balance (1)(2)
------- ------- ------- ------- Loans and leases (1) $7,266,254
5.53% $7,214,689 6.27% Taxable investment securities 3,216,516
3.85% 2,460,181 4.71% Tax-exempt investment securities (2) 18,996
6.38% 50,520 8.22% FHLB stock 71,798 0.21% 66,025 5.00% Federal
funds sold and securities purchased under agreements to resell
58,482 2.31% 234,896 6.39% Deposits with banks 174,939 0.38% 14,631
4.48% ----------- ----- ----------- ----- Total interest-earning
assets $10,806,985 4.90% $10,040,942 5.89% ----------- -----------
Interest-bearing liabilities Interest-bearing demand deposits
$295,770 0.36% $255,185 0.61% Money market deposits 890,427 1.49%
736,739 1.84% Savings deposits 338,781 0.24% 334,222 0.36% Time
deposits 5,084,309 2.33% 4,530,923 3.56% ----------- -----
----------- ----- Total interest-bearing deposits $6,609,287 2.02%
$5,857,069 3.03% Federal funds purchased 8,392 0.27% 40,128 2.25%
Securities sold under agreements to repurchase 1,562,447 4.17%
1,554,023 3.90% Other borrowed funds 997,277 4.26% 1,177,869 3.95%
Long-term debt 171,136 2.83% 171,136 5.31% ----------- -----
----------- ----- Total interest-bearing liabilities 9,348,539
2.63% 8,800,225 3.35% Non-interest-bearing demand deposits 781,391
772,982 ----------- ----------- Total deposits and other borrowed
funds $10,129,930 $9,573,207 ----------- ----------- Total average
assets $11,544,807 $10,736,130 Total average equity $1,303,375
$1,036,789 ----------- ----------- (1) Yields and interest earned
include net loan fees. Non-accrual loans are included in the
average balance. (2) The average yield has been adjusted to a fully
taxable-equivalent basis for certain securities of states and
political subdivisions and other securities held using a statutory
Federal income tax rate of 35%. DATASOURCE: Cathay General Bancorp
CONTACT: Heng W. Chen of Cathay General Bancorp, +1-626-279-3652
Web Site: http://www.cathaybank.com/
http://www.cathaygeneralbancorp.com/
Copyright