LOS ANGELES, April 20, 2011 /PRNewswire/ -- Cathay General
Bancorp (the "Company", NASDAQ: CATY), the holding company for
Cathay Bank (the "Bank"), today announced results for the first
quarter of 2011.
FINANCIAL PERFORMANCE
|
Three months
ended March 31,
|
|
|
2011
|
|
2010
|
|
Net income/(loss)
|
$22.1 million
|
|
($25.7) million
|
|
Net income/(loss) available to
common stockholders
|
$18.0 million
|
|
($29.8) million
|
|
Basic earnings/(loss) per common
share
|
$0.23
|
|
($0.41)
|
|
Diluted earnings/(loss) per
common share
|
$0.23
|
|
($0.41)
|
|
Return on average
assets
|
0.83%
|
|
-0.88%
|
|
Return on average total
stockholders' equity
|
6.20%
|
|
-7.51%
|
|
Efficiency ratio
|
54.47%
|
|
55.55%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER HIGHLIGHTS
- Improved profitability – First quarter net income was
$22.1 million compared to net income
of $18.1 million in the fourth
quarter of 2010 and a net loss of $25.7
million in the same quarter a year ago.
- Decrease in net charge-offs – Net charge-offs decreased
$52.7 million, or 83.6%, to
$10.4 million in the first quarter of
2011 from $63.1 million in the same
quarter a year ago and decreased $12.4
million, or 54.5%, from $22.8
million in the fourth quarter of 2010. The provision for
credit losses was $6.0 million for
the first quarter of 2011 compared to $10.0
million in the fourth quarter of 2010 and $84.0 million in the same quarter a year
ago.
- Increase in net interest margin – The net interest margin
increased to 3.06% for the first quarter of 2011, from 2.88% for
the fourth quarter of 2010, and from 2.72% for the first quarter a
year ago.
"We are pleased to see continuing improvement in profitability
compared to prior quarters. Our commercial and residential
mortgage loans continue to grow, while construction loans dropped
another 16% in the first quarter of 2011," commented Dunson Cheng, Chairman of the Board, Chief
Executive Officer, and President of the Company.
"Our retail branches continue to experience solid growth in
relationship deposits which contributed to an improvement in our
net interest margin to 3.06%. Our focus on core deposit generation
resulted in core deposits increasing 12.4% on an annualized basis
in the first quarter of 2011," said Peter
Wu, Executive Vice Chairman and Chief Operating Officer.
"We continue to make steady progress in reducing the overall
level of credit risk in our loan portfolio and in improving our net
interest margin by prepaying shorter maturity wholesale borrowings
on a selective basis. We are hopeful that our profitability will
continue to improve to our historical levels over the course of
time," concluded Dunson Cheng.
INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter
ended March 31, 2011, was
$18.0 million, an increase of
$47.8 million, or 160%, compared to a
net loss available to common stockholders of $29.8 million for the same quarter a year ago.
Diluted earnings per share available to common stockholders
for the quarter ended March 31, 2011,
was $0.23 compared to a loss per
share of $0.41 for the same quarter a
year ago due primarily to decreases in the provision for credit
losses, lower other real estate owned expenses, decreases in net
losses from interest rate swaps and increases in net securities
gains which were partially offset by prepayment penalties on the
repayment of Federal Home Loan Bank ("FHLB") advances and increases
in salaries and employee benefits.
Return on average stockholders' equity was 6.20% and return on
average assets was 0.83% for the quarter ended March 31, 2011, compared to a return on average
stockholders' equity of negative 7.51% and a return on average
assets of negative 0.88% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$384,000, or 0.5% to $75.1 million during the first quarter of 2011
compared to $74.7 million during the
same quarter a year ago. The increase was due primarily to
the decrease in interest expense paid on time certificates of
deposit and the prepayment of FHLB advances.
The net interest margin, on a fully taxable-equivalent basis,
was 3.06% for the first quarter of 2011, an increase of 18 basis
points from 2.88% for the fourth quarter of 2010 and an increase of
34 basis points from 2.72% for the first quarter of 2010. The
decrease in the rate on interest bearing deposits and the
prepayment of FHLB advances contributed to the increase in the net
interest margin from the same quarter a year ago.
For the first quarter of 2011, the yield on average
interest-earning assets was 4.63%, on a fully taxable-equivalent
basis, the cost of funds on average interest-bearing liabilities
equaled 1.90%, and the cost of interest bearing deposits was 1.10%.
In comparison, for the first quarter of 2010, the yield on
average interest-earning assets was 4.61%, on a fully
taxable-equivalent basis, cost of funds on average interest-bearing
liabilities equaled 2.20%, and the cost of interest bearing
deposits was 1.44%. 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, increased 32
basis points to 2.73% for the first quarter ended March 31, 2011, from 2.41% for the same quarter a
year ago, primarily due to the reasons discussed above.
The cost of deposits, including demand deposits, decreased 5
basis points to 0.95% in the first quarter of 2011 compared to
1.00% in the fourth quarter of 2010 and decreased 33 basis points
from 1.28% in the first quarter of 2010 due primarily to the
decrease in the rates paid on certificates of deposit upon renewal
and on money market accounts as a result of the decline in market
interest rates.
Provision for credit losses
The provision for credit losses was $6.0
million for the first quarter of 2011 compared to
$10.0 million for the fourth quarter
of 2010 and compared to $84.0 million
in the first quarter of 2010. The provision for credit losses
was based on the review of the adequacy of the allowance for loan
losses at March 31, 2011. 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 ended,
|
|
|
March 31,
2011
|
|
December 31,
2010
|
|
March 31,
2010
|
|
|
(In
thousands)
|
|
Charge-offs:
|
|
|
|
|
|
|
Commercial
loans
|
$
1,378
|
|
$
4,108
|
|
$
9,646
|
|
Construction loans-
residential
|
2,885
|
|
2,660
|
|
7,882
|
|
Construction loans-
other
|
3,363
|
|
4,448
|
|
17,581
|
|
Real estate loans
(1)
|
4,945
|
|
10,088
|
|
24,157
|
|
Real estate- land
loans
|
404
|
|
4,240
|
|
4,751
|
|
Total
charge-offs
|
12,975
|
|
25,544
|
|
64,017
|
|
Recoveries:
|
|
|
|
|
|
|
Commercial
loans
|
775
|
|
1,380
|
|
578
|
|
Construction loans-
residential
|
660
|
|
1,043
|
|
70
|
|
Construction loans-
other
|
227
|
|
100
|
|
78
|
|
Real estate loans
(1)
|
932
|
|
3
|
|
202
|
|
Real estate- land
loans
|
5
|
|
205
|
|
30
|
|
Installment and other
loans
|
12
|
|
11
|
|
2
|
|
Total
recoveries
|
2,611
|
|
2,742
|
|
960
|
|
Net charge-offs
|
$
10,364
|
|
$
22,802
|
|
$
63,057
|
|
|
|
|
|
|
|
|
(1) Real estate loans include
commercial mortgage loans,
residential mortgage loans, and equity lines.
|
|
|
|
|
|
|
|
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 $12.6
million for the first quarter of 2011, an increase of
$7.8 million, or 164%, compared to
non-interest income of $4.8 million
for the first quarter of 2010. The increase in non-interest income
in the first quarter of 2011 was primarily due to an increase in
securities gains of $2.8 million, a
decrease of $3.9 million in loss from
interest rate swaps, an increase of $336,000 in commissions from foreign exchange and
currency transactions, and an increase of $318,000 in letters of credit commissions
compared to the first quarter of 2010.
Non-interest expense
Non-interest expense increased $3.6
million, or 8.2%, to $47.8
million in the first quarter of 2011 compared to
$44.2 million in the same quarter a
year ago. The efficiency ratio was 54.47% in the first
quarter of 2011 compared to 55.55% for the same quarter a year ago
due primarily to lower OREO expenses, decreased losses from
interest rate swaps and higher securities gains offset by higher
prepayment penalties from prepayment of FHLB advances and increases
in salaries and employee benefits in the first quarter of 2011.
Prepayment penalties from prepaying FHLB advances increased
$7.9 million to $8.8 million in the
first quarter of 2011 from $909,000
in the same quarter a year ago. The Company prepaid
$200.0 million of FHLB advances with
a weighted average rate of 4.29% in the first quarter of 2011
compared to $65.0 million with a rate
of 3.49% in the same quarter a year ago. Salaries and
employee benefits increased $3.0 million to
$18.2 million in the first quarter of 2011 compared to
$15.2 million in the same quarter a
year ago primarily due to a $2.2
million increase in bonus expenses and the hiring of new
employees.
Offsetting the above increases were a decrease of $3.0 million in OREO expense, a $2.3 million decrease in write-down on loans held
for sale, a $910,000 decrease in
professional services expense and an $827,000 decrease in FDIC assessments. OREO
expense was $221,000 in the first
quarter of 2011 compared $3.3 million
in the first quarter of 2010 primarily due to increases in gains on
sale of OREO and decreases in provision for OREO losses.
Professional services expense decreased primarily due to
decreases in consulting and collection expenses. Decreases in
the level of deposits between the first quarter of 2010 and the
first quarter of 2011 as a result of the planned runoff of brokered
deposits caused the decreases in FDIC assessment expense.
Income taxes
The effective tax rate for the first quarter of 2011 was 34.7%
compared to a benefit of 47.3% in the first quarter of 2010.
The effective tax rate includes the impact of the utilization
of low income housing tax credits and for the first quarter of 2011
was based on the forecasted net income for the full year.
BALANCE SHEET REVIEW
Total assets were $10.6 billion at
March 31, 2011, a decrease of
$187.6 million, or 1.7%, from
$10.8 billion at December 31, 2010, primarily due to the decrease
of $110.0 million in securities
purchased under agreements to resell and the decrease of
$74.6 million, or 2.6%, in investment
securities.
Gross loans, excluding loans held for sale, were $6.89 billion at March 31,
2011, an increase of $25.7
million, or 0.4%, from $6.87
billion at December 31, 2010,
primarily due to an increase of $90.4
million, or 6.3%, in commercial loans and an increase of
$44.7 million, or 5.2% in residential
mortgage loans offset by a decrease of $67.5
million, or 16.5%, in construction loans, and a decrease of
$46.2 million, or 1.2%, in commercial
real estate loans. The changes in loan composition from
December 31, 2010, are presented
below:
Type of Loans:
|
March 31, 2011
|
|
December 31,
2010
|
|
%
Change
|
|
|
(Dollars in
thousands)
|
|
|
|
Commercial
|
$
1,531,593
|
|
$
1,441,167
|
|
6
|
|
Residential mortgage
|
897,108
|
|
852,454
|
|
5
|
|
Commercial mortgage
|
3,893,904
|
|
3,940,061
|
|
(1)
|
|
Equity lines
|
210,569
|
|
208,876
|
|
1
|
|
Real estate
construction
|
342,453
|
|
409,986
|
|
(16)
|
|
Installment &
other
|
18,684
|
|
16,077
|
|
16
|
|
|
|
|
|
|
|
|
Gross loans and
leases
|
$
6,894,311
|
|
$
6,868,621
|
|
0
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
(241,030)
|
|
(245,231)
|
|
(2)
|
|
Unamortized deferred loan
fees
|
(7,827)
|
|
(7,621)
|
|
3
|
|
|
|
|
|
|
|
|
Total loans and
leases, net
|
$
6,645,454
|
|
$
6,615,769
|
|
0
|
|
Loans held for sale
|
$
2,388
|
|
$
2,873
|
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits were $7.1 billion
at March 31, 2011, an increase of
$87.5 million, or 1.3%, from
$7.0 billion at December 31, 2010, primarily due to a
$87.9 million, or 2.8%, increase in
time deposits of $100,000 or more, a
$30.4 million, or 3.3%, increase in
non-interest-bearing demand deposits, a $29.7 million, or 3.0%, increase in money market
deposits offset by a $63.3 million,
or 5.9%, decrease in time deposits under $100,000. The changes in deposit
composition from December 31, 2010,
are presented below:
Deposits
|
March 31, 2011
|
|
December 31,
2010
|
|
%
Change
|
|
|
(Dollars in
thousands)
|
|
|
|
Non-interest-bearing
demand
|
$
960,677
|
|
$
930,300
|
|
3
|
|
NOW
|
415,986
|
|
418,703
|
|
(1)
|
|
Money market
|
1,012,324
|
|
982,617
|
|
3
|
|
Savings
|
390,679
|
|
385,245
|
|
1
|
|
Time deposits under
$100,000
|
1,018,000
|
|
1,081,266
|
|
(6)
|
|
Time deposits of $100,000 or
more
|
3,281,641
|
|
3,193,715
|
|
3
|
|
Total
deposits
|
$
7,079,307
|
|
$
6,991,846
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY REVIEW
At March 31, 2011, total
non-accrual portfolio loans, excluding non-accrual loans held for
sale, were $274.5 million, an
increase of $32.2 million, or 13.3%,
from $242.3 million at December 31, 2010, and a decrease of $20.9 million, or 7.1%, from $295.4 million at March
31, 2010. A summary of non-accrual loans, excluding
non-accrual loans held for sale, and the related allowance and
charge-offs as of March 31, 2011, is
shown below:
|
At March 31,
2011
|
|
|
Balance
|
|
Allowance
|
Cumulative
Charge-off
|
Cumulative
Charge-off as a
% of Unpaid
Balance
|
|
|
(Dollars in
thousands)
|
|
Non-accrual loans without
charge-off
|
|
|
|
|
|
|
Commercial real
estate
|
$
45,482
|
|
$
102
|
$
-
|
0.0%
|
|
Commercial
|
9,057
|
|
1,028
|
-
|
0.0%
|
|
Construction-
residential
|
12,829
|
|
128
|
-
|
0.0%
|
|
Construction-
non-residential
|
7,501
|
|
-
|
-
|
0.0%
|
|
Residential
mortgage
|
12,499
|
|
731
|
-
|
0.0%
|
|
Land
|
5,599
|
|
118
|
-
|
0.0%
|
|
Subtotal
|
$
92,967
|
|
$
2,107
|
$
-
|
0.0%
|
|
Non-accrual loans with
charge-off
|
|
|
|
|
|
|
Commercial real
estate
|
$
103,390
|
|
$
1,434
|
$
36,568
|
26.1%
|
|
Commercial
|
23,249
|
|
1,378
|
18,069
|
43.7%
|
|
Construction-
residential
|
10,853
|
|
7,237
|
10,854
|
50.0%
|
|
Construction-
non-residential
|
25,355
|
|
-
|
26,673
|
51.3%
|
|
Residential
mortgage
|
3,154
|
|
238
|
1,260
|
28.5%
|
|
Land
|
15,522
|
|
141
|
11,876
|
43.3%
|
|
Subtotal
|
$
181,523
|
|
$
10,428
|
$
105,300
|
36.7%
|
|
Total
|
$
274,490
|
|
$
12,535
|
$
105,300
|
27.7%
|
|
|
|
|
|
|
|
The allowance for loan losses was $241.0
million and the allowance for off-balance sheet unfunded
credit commitments was $2.2 million
at March 31, 2011, and represented
the amount that the Company believes to be sufficient to absorb
credit losses inherent in the Company's loan portfolio including
unfunded commitments. The allowance for credit losses, the
sum of allowance for loan losses and for off-balance sheet unfunded
credit commitments, was $243.2
million at March 31, 2011,
compared to $247.6 million at
December 31, 2010, a decrease of
$4.4 million, or 1.8%. The
allowance for credit losses represented 3.53% of period-end gross
loans, excluding loans held for sale, and 88.6% of non-performing
portfolio loans at March 31, 2011.
The comparable ratios were 3.60% of period-end gross loans
and 100.1% of non-performing loans at December 31, 2010. Results of the changes
from December 31, 2010, and
March 31, 2010, to March 31, 2011, of the Company's non-performing
assets and troubled debt restructurings are highlighted below:
(Dollars in
thousands)
|
March 31, 2011
|
|
December 31,
2010
|
|
% Change
|
|
March 31, 2010
|
|
% Change
|
|
Non-performing
assets
|
|
|
|
|
|
|
|
|
|
|
Accruing loans past due 90 days
or more
|
$
8
|
|
$
5,006
|
|
(100)
|
|
$
5,912
|
|
(100)
|
|
Non-accrual loans:
|
|
|
|
|
|
|
|
|
|
|
Construction-
residential
|
23,682
|
|
25,251
|
|
(6)
|
|
38,811
|
|
(39)
|
|
Construction-
non-residential
|
32,856
|
|
28,686
|
|
15
|
|
44,592
|
|
(26)
|
|
Land
|
21,121
|
|
21,923
|
|
(4)
|
|
34,254
|
|
(38)
|
|
Commercial real estate,
excluding land
|
148,872
|
|
122,672
|
|
21
|
|
141,078
|
|
6
|
|
Commercial
|
32,306
|
|
31,499
|
|
3
|
|
26,793
|
|
21
|
|
Residential
mortgage
|
15,653
|
|
12,288
|
|
27
|
|
9,833
|
|
59
|
|
Total non-accrual
loans:
|
$
274,490
|
|
$
242,319
|
|
13
|
|
$
295,361
|
|
(7)
|
|
Total non-performing
loans
|
274,498
|
|
247,325
|
|
11
|
|
301,273
|
|
(9)
|
|
Other real estate
owned
|
75,585
|
|
77,740
|
|
(3)
|
|
111,858
|
|
(32)
|
|
Other assets
|
365
|
|
-
|
|
100
|
|
-
|
|
100
|
|
Total non-performing
assets
|
$
350,448
|
|
$
325,065
|
|
8
|
|
$
413,131
|
|
(15)
|
|
Accruing troubled
debt restructurings (TDRs)
|
$
135,327
|
|
$
136,800
|
|
(1)
|
|
$
43,264
|
|
213
|
|
Non-accrual TDRs (included in
non-accrual loans above)
|
$
43,130
|
|
$
28,146
|
|
53
|
|
$
27,424
|
|
57
|
|
Non-accrual loans held for
sale
|
$
2,388
|
|
$
2,873
|
|
(17)
|
|
$
20,944
|
|
(89)
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
241,030
|
|
$
245,231
|
|
(2)
|
|
$
233,120
|
|
3
|
|
Allowance for off-balance sheet
credit commitments
|
2,174
|
|
2,337
|
|
(7)
|
|
4,919
|
|
(56)
|
|
Allowance for credit
losses
|
$
243,204
|
|
$
247,568
|
|
(2)
|
|
$
238,039
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gross loans outstanding,
at period-end (1)
|
$6,894,311
|
|
$6,868,621
|
|
0
|
|
$6,852,549
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to
non-performing loans, at period-end (2)
|
87.81%
|
|
99.15%
|
|
|
|
77.38%
|
|
|
|
Allowance for loan losses to
gross loans, at period-end (1)
|
3.50%
|
|
3.57%
|
|
|
|
3.40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses to
non-performing loans, at period-end (2)
|
88.60%
|
|
100.10%
|
|
|
|
79.01%
|
|
|
|
Allowance for credit losses to
gross loans, at period-end (1)
|
3.53%
|
|
3.60%
|
|
|
|
3.47%
|
|
|
|
(1) Excludes loans held for sale
at period-end.
|
|
(2) Excludes non-accrual loans
held for sale at period-end.
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2011, total
residential construction loans were $100.3
million of which $2.0 million
were in Riverside county in
California. At March 31, 2011, total land loans were
$126.2 million, of which $18.4 million were in San Bernardino, Riverside, and Imperial counties in California, $754,000 were in the Central Valley of
California, and $2.9 million were in the state of Nevada.
Troubled debt restructurings on non-accrual status totaled
$43.1 million at March 31, 2011. Troubled debt restructurings on
accrual status totaled $135.3 million
at March 31, 2011. 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 troubled debt restructurings under
Accounting Standard Codification 310-40, formerly Statement of
Financial Accounting Standards 15, these loans have been performing
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.
Non-performing assets, excluding non-accrual loans held for
sale, to total assets was 3.3% at March 31,
2011, compared to 3.0% at December
31, 2010, and compared to 3.5% at March 31, 2010. Total non-performing
portfolio assets increased $25.3
million, or 7.8%, to $350.4
million at March 31, 2011,
compared to $325.1 million at
December 31, 2010, primarily due to a
$32.2 million increase in non-accrual
loans offset by a $2.2 million
decrease in OREO and by a $5.0
million decrease in accruing loans past due 90 days or more.
Total non-performing portfolio assets decreased $62.7 million, or 15.2%, to $350.4 million at March
31, 2011, compared to $413.1
million at March 31, 2010,
primarily due to a $20.9 million
decrease in non-accrual loans, a $36.3
million decrease in OREO, and a $5.9
million decrease in accruing loans past due 90 days or
more.
As of April 19, 2011, the Company
has sold or entered into agreements to sell thirteen OREOs with net
book values as of March 31, 2011,
totaling $31.6 million.
CAPITAL ADEQUACY REVIEW
At March 31, 2011, the Company's
Tier 1 risk-based capital ratio of 15.36%, total risk-based capital
ratio of 17.28%, and Tier 1 leverage capital ratio of 11.79%,
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, 2010, the Company's Tier
1 risk-based capital ratio was 15.37%, total risk-based capital
ratio was 17.27%, and Tier 1 leverage capital ratio was 11.44%.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its first quarter 2011 financial results. The
call will begin at 3:00 p.m. Pacific
Time. Analysts and investors may dial in and participate in
the question-and-answer session. To access the call, please dial
1-800-510-0146 and enter Participant Passcode 79400440. A
listen-only live Webcast of the call will be available at
www.cathaygeneralbancorp.com and a recorded version is scheduled to
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
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 of management 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: U.S.
and international economic and market conditions; market disruption
and volatility; current and potential future supervisory action by
bank supervisory authorities and changes in laws and regulations,
or their interpretations; restrictions on dividends and other
distributions by laws and regulations and by our regulators and our
capital structure; credit losses and deterioration in asset or
credit quality; availability of capital; potential goodwill
impairment; liquidity risk; fluctuations in interest rates; past
and future acquisitions; inflation and deflation; success of
expansion, if any, of our business in new markets; the soundness of
other financial institutions; real estate market conditions; our
ability to compete with competitors; increased costs of compliance
and other risks associated with changes in regulation and the
current regulatory environment, including the requirements of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”), the potential for substantial changes in the
legal, regulatory, and enforcement framework and oversight
applicable to financial institutions in reaction to recent adverse
financial market events, including changes pursuant to the
Dodd-Frank Act; the short term and long term impact of the Basel II
and the proposed Basel III capital standards of the Basel
Committee; our ability to retain key personnel; successful
management of reputational risk; natural disasters and geopolitical
events; general economic or business conditions in California, Asia, and other regions where Cathay Bank has
operations; restrictions on compensation paid to our executives as
a result of our participation in the TARP Capital Purchase
Program; our ability to adapt our information technology systems;
and changes in accounting standards or tax laws and
regulations.
These and other factors are further described in Cathay General
Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2010 (Item 1A 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
ended March 31,
|
|
(Dollars in thousands, except
per share data)
|
2011
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
FINANCIAL
PERFORMANCE
|
|
|
|
|
|
|
Net interest income before
provision for credit losses
|
$ 75,105
|
|
$ 74,721
|
|
1
|
|
Provision for
credit losses
|
6,000
|
|
84,000
|
|
(93)
|
|
Net
interest income/(loss) after provision for credit losses
|
69,105
|
|
(9,279)
|
|
845
|
|
Non-interest
income
|
12,626
|
|
4,784
|
|
164
|
|
Non-interest
expense
|
47,783
|
|
44,163
|
|
8
|
|
Income/(loss)
before income tax expense/(benefit)
|
33,948
|
|
(48,658)
|
|
170
|
|
Income tax
expense/(benefit)
|
11,734
|
|
(23,068)
|
|
151
|
|
Net
income/(loss)
|
22,214
|
|
(25,590)
|
|
187
|
|
Net
income attributable to noncontrolling interest
|
(151)
|
|
(151)
|
|
-
|
|
Net income/(loss)
attributable to Cathay General Bancorp
|
$ 22,063
|
|
$ (25,741)
|
|
186
|
|
Dividends on
preferred stock
|
(4,105)
|
|
(4,092)
|
|
0
|
|
Net income/(loss)
available to common stockholders
|
$ 17,958
|
|
$ (29,833)
|
|
160
|
|
|
|
|
|
|
|
|
Net income/(loss)
available to common stockholders per common share:
|
|
|
|
|
|
|
Basic
|
$
0.23
|
|
$
(0.41)
|
|
156
|
|
Diluted
|
$
0.23
|
|
$
(0.41)
|
|
156
|
|
|
|
|
|
|
|
|
Cash dividends paid per common
share
|
$ 0.010
|
|
$
0.010
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED RATIOS
|
|
|
|
|
|
|
Return on
average assets
|
0.83%
|
|
-0.88%
|
|
194
|
|
Return on
average total stockholders’ equity
|
6.20%
|
|
-7.51%
|
|
183
|
|
Efficiency
ratio
|
54.47%
|
|
55.55%
|
|
(2)
|
|
Dividend
payout ratio
|
3.56%
|
|
n/m
|
*
|
|
|
* n/m, not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ANALYSIS (Fully taxable
equivalent)
|
|
|
|
|
|
|
Total
interest-earning assets
|
4.63%
|
|
4.61%
|
|
0
|
|
Total
interest-bearing liabilities
|
1.90%
|
|
2.20%
|
|
(14)
|
|
Net interest
spread
|
2.73%
|
|
2.41%
|
|
13
|
|
Net interest
margin
|
3.06%
|
|
2.72%
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS
|
March 31,
2011
|
|
March 31,
2010
|
|
December 31,
2010
|
|
Well
Capitalized
Requirements
|
|
Minimum
Regulatory
Requirements
|
|
Tier 1 risk-based
capital ratio
|
15.36%
|
|
14.48%
|
|
15.37%
|
|
6.0%
|
|
4.0%
|
|
Total risk-based
capital ratio
|
17.28%
|
|
16.36%
|
|
17.27%
|
|
10.0%
|
|
8.0%
|
|
Tier 1 leverage
capital ratio
|
11.79%
|
|
10.11%
|
|
11.44%
|
|
5.0%
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATHAY
GENERAL BANCORP
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(In thousands, except share and
per share data)
|
|
March 31,
2011
|
|
December 31,
2010
|
|
% change
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
87,111
|
|
$
87,347
|
|
(0)
|
|
Short-term investments and
interest bearing deposits
|
|
169,963
|
|
206,321
|
|
(18)
|
|
Securities purchased under
agreements to resell
|
|
-
|
|
110,000
|
|
(100)
|
|
Securities held-to-maturity
(market value of $1,228,109 in 2011
|
|
|
|
|
|
|
|
and $837,359 in
2010)
|
|
1,231,955
|
|
840,102
|
|
47
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale
(amortized cost of $1,545,034 in 2011 and $2,005,330 in
2010)
|
|
1,537,111
|
|
2,003,567
|
|
(23)
|
|
Trading securities
|
|
3,824
|
|
3,818
|
|
0
|
|
Loans held for sale
|
|
2,388
|
|
2,873
|
|
(17)
|
|
Loans
|
|
6,894,311
|
|
6,868,621
|
|
0
|
|
Less:
|
Allowance for loan
losses
|
|
(241,030)
|
|
(245,231)
|
|
(2)
|
|
|
Unamortized deferred loan fees,
net
|
|
(7,827)
|
|
(7,621)
|
|
3
|
|
|
Loans, net
|
|
6,645,454
|
|
6,615,769
|
|
0
|
|
Federal Home Loan Bank
stock
|
|
61,364
|
|
63,873
|
|
(4)
|
|
Other real estate owned,
net
|
|
75,585
|
|
77,740
|
|
(3)
|
|
Affordable housing investments,
net
|
|
86,896
|
|
88,472
|
|
(2)
|
|
Premises and equipment,
net
|
|
108,790
|
|
109,456
|
|
(1)
|
|
Customers’ liability on
acceptances
|
|
22,623
|
|
14,014
|
|
61
|
|
Accrued interest
receivable
|
|
33,524
|
|
35,382
|
|
(5)
|
|
Goodwill
|
|
316,340
|
|
316,340
|
|
-
|
|
Other intangible assets,
net
|
|
15,520
|
|
17,044
|
|
(9)
|
|
Other assets
|
|
215,961
|
|
209,868
|
|
3
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
10,614,409
|
|
$
10,801,986
|
|
(2)
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
$
960,677
|
|
$
930,300
|
|
3
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
NOW
deposits
|
|
415,986
|
|
418,703
|
|
(1)
|
|
Money
market deposits
|
|
1,012,324
|
|
982,617
|
|
3
|
|
Savings deposits
|
|
390,679
|
|
385,245
|
|
1
|
|
Time
deposits under $100,000
|
|
1,018,000
|
|
1,081,266
|
|
(6)
|
|
Time
deposits of $100,000 or more
|
|
3,281,641
|
|
3,193,715
|
|
3
|
|
Total
deposits
|
|
7,079,307
|
|
6,991,846
|
|
1
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements
to repurchase
|
|
1,459,000
|
|
1,561,000
|
|
(7)
|
|
Advances from the Federal Home
Loan Bank
|
|
350,000
|
|
550,000
|
|
(36)
|
|
Other borrowings from financial
institutions
|
|
10,991
|
|
8,465
|
|
30
|
|
Other borrowings for affordable
housing investments
|
|
19,075
|
|
19,111
|
|
(0)
|
|
Long-term debt
|
|
171,136
|
|
171,136
|
|
-
|
|
Acceptances
outstanding
|
|
22,623
|
|
14,014
|
|
61
|
|
Other liabilities
|
|
50,101
|
|
50,309
|
|
(0)
|
|
Total
liabilities
|
|
9,162,233
|
|
9,365,881
|
|
(2)
|
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
-
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
Preferred stock,
10,000,000 shares authorized, 258,000 issued
|
|
|
|
|
|
|
|
and
outstanding in 2011 and 2010
|
|
248,334
|
|
247,455
|
|
0
|
|
Common
stock, $0.01 par value, 100,000,000 shares authorized,
|
|
|
|
|
|
|
|
82,842,027 issued and 78,634,462
outstanding at March 31, 2011, and
|
|
|
|
|
|
|
|
82,739,348 issued and 78,531,783
outstanding at December 31, 2010
|
|
828
|
|
827
|
|
0
|
|
Additional
paid-in-capital
|
|
764,098
|
|
762,509
|
|
0
|
|
Accumulated other
comprehensive loss, net
|
|
(4,592)
|
|
(1,022)
|
|
(349)
|
|
Retained
earnings
|
|
560,797
|
|
543,625
|
|
3
|
|
Treasury
stock, at cost (4,207,565 shares at March 31, 2011,
|
|
|
|
|
|
|
|
and at December 31,
2010)
|
|
(125,736)
|
|
(125,736)
|
|
-
|
|
|
|
|
|
|
|
|
|
Total Cathay
General Bancorp stockholders' equity
|
|
1,443,729
|
|
1,427,658
|
|
1
|
|
Noncontrolling
interest
|
|
8,447
|
|
8,447
|
|
-
|
|
Total
equity
|
|
1,452,176
|
|
1,436,105
|
|
1
|
|
Total liabilities
and equity
|
|
$
10,614,409
|
|
$
10,801,986
|
|
(2)
|
|
|
|
|
|
|
|
|
|
Book value per common stock
share
|
|
$14.98
|
|
$14.80
|
|
1
|
|
Number of common stock shares
outstanding
|
|
78,634,462
|
|
78,531,783
|
|
0
|
|
|
|
|
|
|
|
|
|
CATHAY
GENERAL BANCORP
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three months
ended March 31,
|
|
|
2011
|
2010
|
|
|
(In
thousands, except share and per share data)
|
|
INTEREST AND DIVIDEND
INCOME
|
|
|
|
Loan receivable, including loan
fees
|
$
90,558
|
$
95,739
|
|
Investment securities-
taxable
|
21,854
|
30,288
|
|
Investment securities-
nontaxable
|
1,056
|
77
|
|
Federal Home Loan Bank
stock
|
47
|
48
|
|
Federal funds sold and
securities
|
|
|
|
purchased under agreements
to resell
|
41
|
-
|
|
Deposits with banks
|
221
|
317
|
|
|
|
|
|
Total interest and dividend
income
|
113,777
|
126,469
|
|
|
|
|
|
INTEREST EXPENSE
|
|
|
|
Time deposits of $100,000 or
more
|
10,725
|
15,383
|
|
Other deposits
|
5,720
|
9,101
|
|
Securities sold under agreements
to repurchase
|
16,171
|
16,312
|
|
Advances from Federal Home Loan
Bank
|
4,849
|
10,039
|
|
Long-term debt
|
1,206
|
913
|
|
Short-term borrowings
|
1
|
-
|
|
|
|
|
|
Total interest
expense
|
38,672
|
51,748
|
|
|
|
|
|
Net interest income before
provision for credit losses
|
75,105
|
74,721
|
|
Provision for credit
losses
|
6,000
|
84,000
|
|
|
|
|
|
Net interest income/(loss) after
provision for loan losses
|
69,105
|
(9,279)
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
Securities gains, net
|
6,232
|
3,439
|
|
Letters of credit
commissions
|
1,278
|
959
|
|
Depository service
fees
|
1,361
|
1,357
|
|
Other operating
income/(loss)
|
3,755
|
(971)
|
|
|
|
|
|
Total non-interest
income
|
12,626
|
4,784
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
Salaries and employee
benefits
|
18,271
|
15,226
|
|
Occupancy expense
|
3,538
|
3,838
|
|
Computer and equipment
expense
|
2,183
|
2,013
|
|
Professional services
expense
|
3,729
|
4,639
|
|
FDIC and State
assessments
|
4,317
|
5,144
|
|
Marketing expense
|
695
|
899
|
|
Other real estate owned
expense
|
221
|
3,295
|
|
Operations of affordable housing
investments
|
1,976
|
2,113
|
|
Amortization of core deposit
intangibles
|
1,481
|
1,507
|
|
Cost associated with debt
redemption
|
8,811
|
909
|
|
Other operating
expense
|
2,561
|
4,580
|
|
|
|
|
|
Total non-interest
expense
|
47,783
|
44,163
|
|
|
|
|
|
Income/(loss) before income tax
expense/(benefit)
|
33,948
|
(48,658)
|
|
Income tax
expense/(benefit)
|
11,734
|
(23,068)
|
|
Net income/(loss)
|
22,214
|
(25,590)
|
|
Less: net income
attributable to noncontrolling interest
|
(151)
|
(151)
|
|
Net income/(loss) attributable
to Cathay General Bancorp
|
22,063
|
(25,741)
|
|
|
|
|
|
Dividends on preferred
stock
|
(4,105)
|
(4,092)
|
|
Net income/(loss) available to
common stockholders
|
$
17,958
|
$
(29,833)
|
|
|
|
|
|
Net income/(loss) available to
common stockholders per common share:
|
|
|
|
Basic
|
$
0.23
|
$
(0.41)
|
|
Diluted
|
$
0.23
|
$
(0.41)
|
|
|
|
|
|
Cash dividends paid per common
share
|
$
0.010
|
$
0.010
|
|
Basic average common shares
outstanding
|
78,609,460
|
72,653,755
|
|
Diluted average common shares
outstanding
|
78,635,620
|
72,653,755
|
|
|
|
|
|
|
|
|
CATHAY
GENERAL BANCORP
AVERAGE
BALANCES – SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited)
|
|
|
For the
three months ended,
|
|
|
(In thousands)
|
March 31,
2011
|
|
March 31,
2010
|
|
December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average
Yield/Rate
(1) (2)
|
|
Average
Balance
|
Average
Yield/Rate
(1) (2)
|
|
Average
Balance
|
Average
Yield/Rate
(1) (2)
|
|
Loans and leases (1)
|
$
6,897,109
|
5.32%
|
|
$
6,953,032
|
5.58%
|
|
$
6,890,269
|
5.45%
|
|
Taxable investment
securities
|
2,671,826
|
3.32%
|
|
3,670,984
|
3.35%
|
|
3,126,869
|
2.89%
|
|
Tax-exempt investment securities
(2)
|
133,516
|
4.94%
|
|
12,124
|
3.95%
|
|
84,929
|
4.74%
|
|
FHLB stock
|
63,789
|
0.30%
|
|
71,791
|
0.27%
|
|
65,162
|
0.40%
|
|
Federal funds sold and
securities purchased
|
|
|
|
|
|
|
|
|
|
under agreements to
resell
|
81,889
|
0.20%
|
|
-
|
-
|
|
27,500
|
0.20%
|
|
Deposits with banks
|
168,492
|
0.53%
|
|
432,711
|
0.30%
|
|
215,579
|
0.42%
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$ 10,016,621
|
4.63%
|
|
$ 11,140,642
|
4.61%
|
|
$ 10,410,308
|
4.52%
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
$
412,990
|
0.20%
|
|
$
393,865
|
0.32%
|
|
$
416,344
|
0.20%
|
|
Money market
|
1,026,770
|
0.84%
|
|
931,918
|
1.00%
|
|
1,023,787
|
0.85%
|
|
Savings deposits
|
380,344
|
0.14%
|
|
355,500
|
0.22%
|
|
381,940
|
0.14%
|
|
Time deposits
|
4,267,781
|
1.33%
|
|
5,201,310
|
1.69%
|
|
4,369,433
|
1.41%
|
|
Total
interest-bearing deposits
|
$
6,087,885
|
1.10%
|
|
$
6,882,593
|
1.44%
|
|
$
6,191,504
|
1.16%
|
|
Federal funds
purchased
|
111
|
1.27%
|
|
-
|
-
|
|
-
|
-
|
|
Securities sold under agreements
to repurchase
|
1,548,600
|
4.23%
|
|
1,560,200
|
4.24%
|
|
1,561,864
|
4.23%
|
|
Other borrowed funds
|
465,649
|
4.22%
|
|
912,547
|
4.46%
|
|
675,280
|
4.36%
|
|
Long-term debt
|
171,136
|
2.86%
|
|
171,136
|
2.16%
|
|
171,136
|
2.20%
|
|
Total
interest-bearing liabilities
|
8,273,381
|
1.90%
|
|
9,526,476
|
2.20%
|
|
8,599,784
|
1.99%
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits
|
937,650
|
|
|
884,680
|
|
|
969,014
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$
9,211,031
|
|
|
$ 10,411,156
|
|
|
$
9,568,798
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average assets
|
$ 10,727,733
|
|
|
$ 11,883,997
|
|
|
$ 11,087,902
|
|
|
Total average equity
|
$
1,451,039
|
|
|
$
1,398,396
|
|
|
$
1,447,423
|
|
|
|
|
|
|
|
|
|
|
|
|
(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%.
|
|
|
|
|
|
|
|
|
|
|
SOURCE Cathay General Bancorp