Cathay General Bancorp Announces Net Income of $30.4 Million, or
$0.33 Per Share, For the Third Quarter 2012
LOS ANGELES, Oct. 16, 2012 /PRNewswire/ -- Cathay General
Bancorp (the "Company," NASDAQ: CATY), the holding company for
Cathay Bank, today announced results for the third quarter of
2012.
FINANCIAL PERFORMANCE
|
Third
Quarter
|
|
2012
|
|
2011
|
Net
income
|
$30.4
million
|
|
$26.1
million
|
Net income
available to common stockholders
|
$26.2
million
|
|
$22.0
million
|
Basic
earnings per common share
|
$0.33
|
|
$0.28
|
Diluted
earnings per common share
|
$0.33
|
|
$0.28
|
Return on
average assets
|
1.14%
|
|
0.98%
|
Return on
average total stockholders' equity
|
7.62%
|
|
6.91%
|
Efficiency
ratio
|
49.82%
|
|
49.48%
|
THIRD QUARTER HIGHLIGHTS
- Improved profitability – Third quarter net income was
$30.4 million, an increase of
$4.3 million, or 16.4%, compared to
net income of $26.1 million in the
same quarter a year ago.
- Decrease in non-performing assets – Non-performing assets
decreased $145.0 million, or 48.2%,
to $155.6 million at September 30, 2012, from $300.6 million at December
31, 2011, and decreased $42.4
million, or 21.4%, from $198.0
million at June 30, 2012.
"Our loan growth for the third quarter was solid at $216.2 million, or a 12% annualized rate.
There were increases in most loan categories, with both commercial
loans and residential mortgage loans leading the way at a 26%
annualized rate," commented Dunson
Cheng, Chairman of the Board, Chief Executive Officer, and
President of the Company.
"Our focus on core deposit generation resulted in core deposits
increasing at an annualized rate of 14% in the third quarter of
2012, another good quarter for core deposit generation," said
Peter Wu, Executive Vice Chairman
and Chief Operating Officer.
"We expect to maintain steady commercial loan and residential
mortgage loan growth in the fourth quarter," concluded Dunson Cheng.
INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter
ended September 30, 2012, was
$26.2 million, an increase of
$4.2 million, or 19.4%, compared to a
net income available to common stockholders of $22.0 million for the same quarter a year
ago. Diluted earnings per share available to common
stockholders for the quarter ended September
30, 2012, was $0.33 compared
to $0.28 for the same quarter a year
ago due primarily to decreases in the provision for credit losses,
decreases in other real estate owned ("OREO") expenses, decreases
in prepayment penalties on the repayment of Federal Home Loan Bank
("FHLB") advances and securities sold under agreements to
repurchase, and decreases in operations expenses of affordable
housing investments, which were partially offset by decreases in
gains on sales of loans, increases in litigation settlement
expenses, increases in salaries and employee benefits, and
increases in income tax expense.
Return on average stockholders' equity was 7.62% and return on
average assets was 1.14% for the quarter ended September 30, 2012, compared to a return on
average stockholders' equity of 6.91% and a return on average
assets of 0.98% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses decreased
$536,000, or 0.7%, to $80.4 million during the third quarter of 2012
compared to $81.0 million during the
same quarter a year ago. The decrease was due primarily to
the decreases in yield and volume on investment securities and
decreases in yield on loans offset by decreases in rates paid on
time certificates of deposit, the prepayment of FHLB advances, and
maturities of securities sold under agreements to repurchase.
The net interest margin, on a fully taxable-equivalent basis,
was 3.26% for the third quarter of 2012, an increase of 2 basis
points from 3.24% for the second quarter of 2012, and a decrease of
6 basis points from 3.32% for the third quarter of 2011. The
decrease in yields on investment securities and loans offset by
decrease in the rate on interest bearing deposits, and the
prepayment of FHLB advances and decreases in securities sold under
agreements to repurchase caused the decrease in the net interest
margin from the same quarter a year ago.
For the third quarter of 2012, the yield on average
interest-earning assets was 4.32%, on a fully taxable-equivalent
basis, the cost of funds on average interest-bearing liabilities
was 1.35%, and the cost of interest bearing deposits was
0.72%. In comparison, for the third quarter of 2011, the
yield on average interest-earning assets was 4.68%, on a fully
taxable-equivalent basis, the cost of funds on average
interest-bearing liabilities was 1.66%, and the cost of interest
bearing deposits was 0.99%. 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 5 basis points to 2.97% for the quarter ended
September 30, 2012, from 3.02% for
the same quarter a year ago, primarily for the reasons discussed
above.
Provision for credit losses
There was no change in the provision for credit losses for the
third quarter of 2012 compared to a credit of $5.0 million for the second quarter of 2012 and a
charge of $9.0 million in the third
quarter of 2011. The provision for credit losses was based on
the review of the adequacy of the allowance for loan losses at
September 30, 2012. The provision or
reversal for credit losses represents the charge against or benefit
toward 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 indicated:
|
For the
three months ended September 30,
|
|
For the
nine months ended September 30,
|
|
2012
|
|
|
2011
|
|
2012
|
|
2011
|
|
(In
thousands)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
Commercial loans
|
$
7,387
|
|
|
$
1,219
|
|
$
14,479
|
|
$
11,215
|
Construction loans- residential
|
-
|
|
|
10,923
|
|
391
|
|
18,349
|
Construction loans- other
|
39
|
|
|
12,616
|
|
774
|
|
16,045
|
Real estate loans (1)
|
1,441
|
|
|
5,560
|
|
12,351
|
|
24,119
|
Real estate- land loans
|
2
|
|
|
522
|
|
101
|
|
1,008
|
Installment and other loans
|
-
|
|
|
-
|
|
25
|
|
-
|
Total
charge-offs
|
8,869
|
|
|
30,840
|
|
28,121
|
|
70,736
|
Recoveries:
|
|
|
|
|
|
|
|
|
Commercial loans
|
331
|
|
|
513
|
|
1,230
|
|
1,568
|
Construction loans- residential
|
449
|
|
|
6
|
|
3,712
|
|
3,667
|
Construction loans- other
|
28
|
|
|
402
|
|
1,913
|
|
629
|
Real estate loans (1)
|
317
|
|
|
426
|
|
6,784
|
|
2,665
|
Real estate- land loans
|
12
|
|
|
25
|
|
1,178
|
|
618
|
Installment and other loans
|
-
|
|
|
-
|
|
3
|
|
-
|
Total recoveries
|
1,137
|
|
|
1,372
|
|
14,820
|
|
9,147
|
Net
charge-offs
|
$
7,732
|
|
|
$
29,468
|
|
$
13,301
|
|
$
61,589
|
|
|
|
|
|
|
|
|
|
(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 $15.6
million for the third quarter of 2012, a decrease of
$1.2 million, or 7.2%, compared to
$16.8 million for the third quarter
of 2011. The decrease in non-interest income in the third quarter
of 2012 was primarily due to decreases of $1.6 million from gains on sale of loans offset
by a $513,000 increase in revenue
from trading securities.
Non-interest expense
Non-interest expense decreased $539,000, or 1.1%, to $47.8 million in the third quarter of 2012
compared to $48.4 million in the same
quarter a year ago. The efficiency ratio was 49.82% in the
third quarter of 2012 compared to 49.48% for the same quarter a
year ago.
OREO expenses decreased $4.3
million to $1.8 million in the
third quarter of 2012 compared to $6.1
million in the same quarter a year ago primarily due to
decreases in provisions for OREO write-downs, higher OREO gains,
and decreases in OREO expenses. Operation expense on
affordable housing investments also decreased $1.6 million in the third quarter of 2012
compared to the same quarter a year ago primarily due to gains
realized from sales of properties owned by an affordable housing
limited partnerships. Prepayment penalties decreased by
$1.1 million, or 24.0% in the third
quarter of 2012 compared to the same quarter a year ago. FDIC
and State assessments decreased $548,000, or 20.7%, to $2.1 million in the third quarter of 2012 from
$2.6 million for the same quarter a
year ago.
Offsetting the above decreases were increases in litigation
accruals of $5.8 million mainly due
to an accrual for the Company's share of a jury verdict that is not
final in a trial that is not completed. Salaries and
employee benefits increased $970,000,
or 5.5%, in the third quarter of 2012 compared to the same quarter
a year ago primarily due to the hiring of new employees.
Professional services expense increased $427,000, or 8.8%, primarily due to increases in
consulting expenses related to the upcoming core system
conversion.
Income taxes
The effective tax rate for the third quarter of 2012 was 36.8%
compared to 35.2% in the third quarter of 2011. The effective
tax rate includes the impact of the utilization of low income
housing tax credits and the recognition of other tax credits.
BALANCE SHEET REVIEW
Gross loans, excluding loans held for sale, were $7.26 billion at September
30, 2012, an increase of $216.2
million, or 3.1%, from $7.04
billion at June 30, 2012,
primarily due to a $137.2 million, or
7.1% increase in commercial loans. Gross loans, excluding loans
held for sale, were $7.26 billion at
September 30, 2012, an increase of
$200.7 million, or 2.8%, from
$7.06 billion at December 31, 2011, primarily due to an increase
of $214.6 million, or 11.5%, in
commercial loans and an increase of $101.6
million, or 10.5%, in residential mortgage loans offset by a
decrease of $50.1 million, or 21.1%,
in real estate construction loans and a decrease of $44.1 million, or 1.2%, in commercial mortgage
loans. The changes in loan composition from December 31, 2011, are presented below:
Type of
Loans:
|
September
30, 2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Commercial
loans
|
$
2,082,920
|
|
$
1,868,275
|
|
11
|
Residential mortgage loans
|
1,073,880
|
|
972,262
|
|
10
|
Commercial
mortgage loans
|
3,704,777
|
|
3,748,897
|
|
(1)
|
Equity
lines
|
199,403
|
|
214,707
|
|
(7)
|
Real
estate construction loans
|
187,248
|
|
237,372
|
|
(21)
|
Installment & other loans
|
11,702
|
|
17,699
|
|
(34)
|
|
|
|
|
|
|
Gross
loans
|
$
7,259,930
|
|
$
7,059,212
|
|
3
|
|
|
|
|
|
|
Allowance
for loan losses
|
(184,438)
|
|
(206,280)
|
|
(11)
|
Unamortized deferred loan fees
|
(9,036)
|
|
(8,449)
|
|
7
|
|
|
|
|
|
|
Total
loans, net
|
$
7,066,456
|
|
$
6,844,483
|
|
3
|
Loans held
for sale
|
$
-
|
|
$
760
|
|
(100)
|
Total deposits were $7.4 billion
at September 30, 2012, an increase of
$123.9 million, or 1.7%, from
$7.2 billion at December 31, 2011, primarily due to a
$170.6 million, or 15.9%, increase in
non-interest bearing demand deposits, a $132.4 million, or 13.9% increase in money market
deposits, a $118.2 million, or 26.2%,
increase in NOW deposits, and a $40.2
million, or 9.6%, increase in savings deposits, offset by a
$164.9 million, or 19.8%, decrease in
time deposits under $100,000 and a
$172.5 million, or 4.9%, decrease in
time deposits of $100,000 or
more. The changes in deposit composition from December 31, 2011, are presented below:
Deposits
|
September
30, 2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Non-interest-bearing demand deposits
|
$
1,245,312
|
|
$
1,074,718
|
|
16
|
NOW
deposits
|
569,708
|
|
451,541
|
|
26
|
Money
market deposits
|
1,083,917
|
|
951,516
|
|
14
|
Savings
deposits
|
460,182
|
|
420,030
|
|
10
|
Time
deposits under $100,000
|
668,051
|
|
832,997
|
|
(20)
|
Time
deposits of $100,000 or more
|
3,325,871
|
|
3,498,329
|
|
(5)
|
Total
deposits
|
$
7,353,041
|
|
$
7,229,131
|
|
2
|
ASSET QUALITY REVIEW
At September 30, 2012, total
non-accrual portfolio loans, excluding loans held for sale, were
$94.9 million, a decrease of
$106.3 million, or 52.8%, from
$201.2 million at December 31, 2011, and a decrease of $97.8 million, or 50.7%, from $192.7 million at September 30, 2011.
The allowance for loan losses was $184.4
million and the allowance for off-balance sheet unfunded
credit commitments was $1.6 million
at September 30, 2012, which
represented the amount believed by management to be sufficient to
absorb credit losses inherent in the loan portfolio, including
unfunded commitments. The allowance for credit losses, which
is the sum of the allowances for loan losses and for off-balance
sheet unfunded credit commitments, was $186.0 million at September 30, 2012, compared to $208.3 million at December
31, 2011, a decrease of $22.3
million, or 10.7%. The allowance for credit losses
represented 2.56% of period-end gross loans, excluding loans held
for sale, and 196.0% of non-performing portfolio loans at
September 30, 2012. The
comparable ratios were 2.95% of period-end gross loans, excluding
loans held for sale, and 100.2% of non-performing portfolio loans
at December 31, 2011. The
changes in the Company's non-performing assets and troubled debt
restructurings at September 30, 2012,
compared to December 31, 2011, and
September 30, 2011, are highlighted
below:
(Dollars in thousands)
|
September
30, 2012
|
|
December
31, 2011
|
|
%
Change
|
|
September
30, 2011
|
|
%
Change
|
Non-performing assets
|
|
|
|
|
|
|
|
|
|
Accruing
loans past due 90 days or more
|
$
-
|
|
$
6,726
|
|
(100)
|
|
$
13,053
|
|
(100)
|
Non-accrual loans:
|
|
|
|
|
|
|
|
|
|
Construction- residential loans
|
2,342
|
|
25,288
|
|
(91)
|
|
28,386
|
|
(92)
|
Construction- non-residential loans
|
7,080
|
|
20,724
|
|
(66)
|
|
21,611
|
|
(67)
|
Land loans
|
7,204
|
|
10,975
|
|
(34)
|
|
13,355
|
|
(46)
|
Commercial real estate loans, excluding land loans
|
41,550
|
|
96,809
|
|
(57)
|
|
83,983
|
|
(51)
|
Commercial loans
|
23,035
|
|
30,661
|
|
(25)
|
|
29,723
|
|
(23)
|
Residential mortgage loans
|
13,733
|
|
16,740
|
|
(18)
|
|
15,656
|
|
(12)
|
Total
non-accrual loans:
|
$
94,944
|
|
$
201,197
|
|
(53)
|
|
$
192,714
|
|
(51)
|
Total
non-performing loans
|
94,944
|
|
207,923
|
|
(54)
|
|
205,767
|
|
(54)
|
Other real
estate owned
|
60,642
|
|
92,713
|
|
(35)
|
|
94,308
|
|
(36)
|
Total
non-performing assets
|
$
155,586
|
|
$
300,636
|
|
(48)
|
|
$
300,075
|
|
(48)
|
Accruing troubled debt
restructurings (TDRs)
|
$
170,151
|
|
$
120,016
|
|
42
|
|
$
126,270
|
|
35
|
Non-accrual loans held for sale
|
$
-
|
|
$
760
|
|
(100)
|
|
$
1,276
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses
|
$
184,438
|
|
$
206,280
|
|
(11)
|
|
$
209,116
|
|
(12)
|
Allowance
for off-balance sheet credit commitments
|
1,610
|
|
2,069
|
|
(22)
|
|
1,863
|
|
(14)
|
Allowance
for credit losses
|
$
186,048
|
|
$
208,349
|
|
(11)
|
|
$
210,979
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
Total
gross loans outstanding, at period-end (1)
|
$
7,259,930
|
|
$
7,059,212
|
|
3
|
|
$
7,017,142
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses to non-performing loans, at period-end
(2)
|
194.26%
|
|
99.21%
|
|
|
|
101.63%
|
|
|
Allowance
for loan losses to gross loans, at period-end (1)
|
2.54%
|
|
2.92%
|
|
|
|
2.98%
|
|
|
Allowance
for credit losses to gross loans, at period-end (1)
|
2.56%
|
|
2.95%
|
|
|
|
3.01%
|
|
|
|
(1)
Excludes loans held for sale at period-end.
|
(2)
Excludes non-accrual loans held for sale at period-end.
|
Troubled debt restructurings on accrual status totaled
$170.2 million at September 30, 2012, compared to $120.0 million at December
31, 2011. These loans are classified as troubled debt
restructurings as a result of granting a concession to borrowers
who are experiencing financial difficulties. The concessions
may be granted in various forms, including a change in the stated
interest rate, a reduction in the loan balance or accrued interest,
or an extension of the maturity date that causes a significant
delay in payment. Although these loan modifications are
considered troubled debt restructurings under Accounting Standard
Codification 310-40 and Accounting Standard Update 2011-02, 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.
The ratio of non-performing assets, excluding non-accrual loans
held for sale, to total assets was 1.5% at September 30, 2012, compared to 2.8% at
December 31, 2011. Total
non-performing portfolio assets decreased $145.0 million, or 48.2%, to $155.6 million at September 30, 2012, compared to $300.6 million at December
31, 2011, primarily due to a $106.3
million decrease in non-accrual loans, a $32.1 million decrease in OREO, and a
$6.7 million decrease in accruing
loans past due 90 days or more.
CAPITAL ADEQUACY REVIEW
At September 30, 2012, the
Company's Tier 1 risk-based capital ratio of 17.08%, total
risk-based capital ratio of 18.96%, and Tier 1 leverage capital
ratio of 13.57%, 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,
2011, the Company's Tier 1 risk-based capital ratio was
15.97%, total risk-based capital ratio was 17.85%, and Tier 1
leverage capital ratio was 12.93%.
YEAR-TO-DATE REVIEW
Net income attributable to common stockholders for the nine
months ended September 30, 2012, was
$76.8 million, an increase of
$16.7 million, or 27.7%, compared to
net income attributable to common stockholders of $60.1 million for the same period a year ago due
primarily to decreases in the provision for loan losses, decreases
in prepayment penalties on the repayment of FHLB advances and
the prepayment of securities sold under an agreement to repurchase,
decreases in gains on sale of securities, decreases in operation
expenses of affordable housing investments, and decreases in FDIC
and State assessments, which were partially offset by increases in
income tax expenses, increases in litigation accrual expenses,
increases in OREO expenses, and increases in salaries and incentive
compensation expense. Diluted earnings per share was
$0.98 compared to $0.76 per share for the same period a year
ago. The net interest margin for the nine months ended
September 30, 2012, increased 9 basis
points to 3.28% compared to 3.19% for the same period a year
ago.
Return on average stockholders' equity was 7.65% and return on
average assets was 1.12% for the nine months ended September 30, 2012, compared to a return on
average stockholders' equity of 6.59% and a return on average
assets of 0.91% for the same period of 2011. The efficiency
ratio for the nine months ended September
30, 2012, was 52.12% compared to 51.24% for the same period
a year ago.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its third quarter of 2012 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
1-866-362-4666 and enter Participant Passcode 29044536. 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," "can," "could,"
"estimates," "expects," "hopes," "intends," "may," "plans,"
"projects," "seeks," "shall," "should," "will," "predicts,"
"potential," "continue," "possible," "optimistic," 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 business and
economic conditions; credit risks of lending activities and
deterioration in asset or credit quality; adverse results in legal
proceedings; current and potential future supervisory action by
federal supervisory authorities; 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"), and 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; potential goodwill impairment; liquidity risk;
fluctuations in interest rates; inflation and deflation; risks
associated with acquisitions and the expansion of our business into
new markets; real estate market conditions and the value of real
estate collateral; environmental liabilities; the effect of repeal
of the federal prohibition on payment of interest on demand deposit
accounts; our ability to compete with larger competitors; the
possibility of higher capital requirements, including
implementation of the 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;
failures, interruptions, or security breaches of systems or data
breaches; our ability to adapt our systems to technological
changes, including successfully implementing our core system
conversion; changes in accounting standards or tax laws and
regulations; market disruption and volatility; restrictions on
dividends and other distributions by laws and regulations and by
our regulators and our capital structure; successfully raising
additional capital, if needed, and the resulting dilution of
interests of holders of our common stock; and the soundness of
other financial institutions.
These and other factors are further described in Cathay General
Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2011 (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 September 30,
|
|
|
|
Nine
months ended September 30,
|
(Dollars
in thousands, except per share data)
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income before provision for credit
losses
|
|
$
80,417
|
|
$
80,953
|
|
(1)
|
|
$
240,188
|
|
$
234,373
|
2
|
Provision/(reversal) for credit losses
|
|
-
|
|
9,000
|
|
(100)
|
|
(9,000)
|
|
25,000
|
(136)
|
Net
interest income after provision for credit losses
|
|
80,417
|
|
71,953
|
|
12
|
|
249,188
|
|
209,373
|
19
|
Non-interest income
|
|
15,622
|
|
16,827
|
|
(7)
|
|
34,305
|
|
41,906
|
(18)
|
Non-interest expense
|
|
47,844
|
|
48,383
|
|
(1)
|
|
143,057
|
|
141,576
|
1
|
Income
before income tax expense
|
|
48,195
|
|
40,397
|
|
19
|
|
140,436
|
|
109,703
|
28
|
Income tax
expense
|
|
17,686
|
|
14,162
|
|
25
|
|
50,852
|
|
36,802
|
38
|
Net
income
|
|
30,509
|
|
26,235
|
|
16
|
|
89,584
|
|
72,901
|
23
|
Net
income attributable to noncontrolling interest
|
|
151
|
|
151
|
|
-
|
|
452
|
|
452
|
-
|
Net income
attributable to Cathay General Bancorp
|
|
$
30,358
|
|
$
26,084
|
|
16
|
|
$
89,132
|
|
$
72,449
|
23
|
Dividends
on preferred stock
|
|
(4,123)
|
|
(4,111)
|
|
0
|
|
(12,361)
|
|
(12,323)
|
0
|
Net income
attributable to common stockholders
|
|
$
26,235
|
|
$
21,973
|
|
19
|
|
$
76,771
|
|
$
60,126
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.33
|
|
$
0.28
|
|
18
|
|
$
0.98
|
|
$
0.76
|
29
|
Diluted
|
|
$
0.33
|
|
$
0.28
|
|
18
|
|
$
0.98
|
|
$
0.76
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
|
$
0.01
|
|
-
|
|
$
0.03
|
|
$
0.03
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets
|
|
1.14%
|
|
0.98%
|
|
16
|
|
1.12%
|
|
0.91%
|
23
|
Return on
average total stockholders' equity
|
|
7.62%
|
|
6.91%
|
|
10
|
|
7.65%
|
|
6.59%
|
16
|
Efficiency
ratio
|
|
49.82%
|
|
49.48%
|
|
1
|
|
52.12%
|
|
51.24%
|
2
|
Dividend
payout ratio
|
|
2.59%
|
|
3.01%
|
|
(14)
|
|
2.65%
|
|
3.26%
|
(19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD
ANALYSIS (Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.32%
|
|
4.68%
|
|
(8)
|
|
4.42%
|
|
4.65%
|
(5)
|
Total
interest-bearing liabilities
|
|
1.35%
|
|
1.66%
|
|
(19)
|
|
1.44%
|
|
1.77%
|
(19)
|
Net
interest spread
|
|
2.97%
|
|
3.02%
|
|
(2)
|
|
2.98%
|
|
2.88%
|
3
|
Net
interest margin
|
|
3.26%
|
|
3.32%
|
|
(2)
|
|
3.28%
|
|
3.19%
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
September
30, 2012
|
|
September
30, 2011
|
|
December
31, 2011
|
|
Well
Capitalized Requirements
|
|
Minimum
Regulatory Requirements
|
|
Tier 1
risk-based capital ratio
|
|
17.08%
|
|
15.83%
|
|
15.97%
|
|
6.0%
|
|
4.0%
|
|
Total
risk-based capital ratio
|
|
18.96%
|
|
17.72%
|
|
17.85%
|
|
10.0%
|
|
8.0%
|
|
Tier 1
leverage capital ratio
|
|
13.57%
|
|
12.60%
|
|
12.93%
|
|
5.0%
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
|
|
|
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
September
30, 2012
|
|
December
31, 2011
|
|
%
change
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and
due from banks
|
|
$
114,646
|
|
$
117,888
|
|
(3)
|
Short-term
investments and interest bearing deposits
|
|
426,456
|
|
294,956
|
|
45
|
Securities held-to-maturity (market value of
$908,067 in 2012 and $1,203,977 in 2011)
|
|
849,376
|
|
1,153,504
|
|
(26)
|
Securities available-for-sale (amortized cost
of $1,290,212 in 2012 and $1,309,521 in
2011)
|
|
1,293,571
|
|
1,294,478
|
|
(0)
|
Trading
securities
|
|
4,619
|
|
4,542
|
|
2
|
Loans held
for sale
|
|
-
|
|
760
|
|
(100)
|
Loans
|
|
7,259,930
|
|
7,059,212
|
|
3
|
Less: Allowance for loan losses
|
|
(184,438)
|
|
(206,280)
|
|
(11)
|
Unamortized deferred loan fees, net
|
|
(9,036)
|
|
(8,449)
|
|
7
|
Loans,
net
|
|
7,066,456
|
|
6,844,483
|
|
3
|
Federal
Home Loan Bank stock
|
|
45,493
|
|
52,989
|
|
(14)
|
Other real
estate owned, net
|
|
60,642
|
|
92,713
|
|
(35)
|
Affordable
housing investments, net
|
|
87,076
|
|
78,358
|
|
11
|
Premises
and equipment, net
|
|
103,456
|
|
105,961
|
|
(2)
|
Customers'
liability on acceptances
|
|
30,553
|
|
37,300
|
|
(18)
|
Accrued
interest receivable
|
|
29,542
|
|
32,226
|
|
(8)
|
Goodwill
|
|
316,340
|
|
316,340
|
|
-
|
Other
intangible assets, net
|
|
7,638
|
|
11,598
|
|
(34)
|
Other
assets
|
|
168,660
|
|
206,768
|
|
(18)
|
|
|
|
|
|
|
|
Total
assets
|
|
$
10,604,524
|
|
$
10,644,864
|
|
(0)
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
$
1,245,312
|
|
$
1,074,718
|
|
16
|
Interest-bearing deposits:
|
|
|
|
|
|
|
NOW
deposits
|
|
569,708
|
|
451,541
|
|
26
|
Money
market deposits
|
|
1,083,917
|
|
951,516
|
|
14
|
Savings
deposits
|
|
460,182
|
|
420,030
|
|
10
|
Time
deposits under $100,000
|
|
668,051
|
|
832,997
|
|
(20)
|
Time
deposits of $100,000 or more
|
|
3,325,871
|
|
3,498,329
|
|
(5)
|
Total
deposits
|
|
7,353,041
|
|
7,229,131
|
|
2
|
|
|
|
|
|
|
|
Securities
sold under agreements to repurchase
|
|
1,350,000
|
|
1,400,000
|
|
(4)
|
Advances
from the Federal Home Loan Bank
|
|
21,200
|
|
225,000
|
|
(91)
|
Other
borrowings from financial institutions
|
|
-
|
|
880
|
|
(100)
|
Other
borrowings for affordable housing investments
|
|
18,746
|
|
18,920
|
|
(1)
|
Long-term
debt
|
|
171,136
|
|
171,136
|
|
-
|
Acceptances outstanding
|
|
30,553
|
|
37,300
|
|
(18)
|
Other
liabilities
|
|
53,912
|
|
46,864
|
|
15
|
Total
liabilities
|
|
8,998,588
|
|
9,129,231
|
|
(1)
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
-
|
Stockholders' Equity
|
|
|
|
|
|
|
Preferred stock, 10,000,000 shares authorized,
258,000 issued
and
outstanding in 2012 and 2011
|
|
253,678
|
|
250,992
|
|
1
|
Common stock, $0.01 par value, 100,000,000
shares authorized,
82,951,885
issued and 78,744,320 outstanding at September 30, 2012,
and
82,860,122
issued and 78,652,557 outstanding at December 31, 2011
|
|
830
|
|
829
|
|
0
|
Additional
paid-in-capital
|
|
768,169
|
|
765,641
|
|
0
|
Accumulated other comprehensive income/(loss),
net
|
|
1,947
|
|
(8,732)
|
|
122
|
Retained
earnings
|
|
698,601
|
|
624,192
|
|
12
|
Treasury stock, at cost (4,207,565 shares at
September 30, 2012, and at December 31, 2011)
|
|
(125,736)
|
|
(125,736)
|
|
-
|
|
|
|
|
|
|
|
Total
Cathay General Bancorp stockholders' equity
|
|
1,597,489
|
|
1,507,186
|
|
6
|
Noncontrolling interest
|
|
8,447
|
|
8,447
|
|
-
|
Total
equity
|
|
1,605,936
|
|
1,515,633
|
|
6
|
Total
liabilities and equity
|
|
$
10,604,524
|
|
$
10,644,864
|
|
(0)
|
|
|
|
|
|
|
|
Book value
per common share
|
|
$16.84
|
|
$15.75
|
|
7
|
Number of
common shares outstanding
|
|
78,744,320
|
|
78,652,557
|
|
0
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended September 30,
|
|
Nine
months ended September 30,
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
(In
thousands, except share and per share data)
|
INTEREST AND DIVIDEND INCOME
|
|
|
|
|
|
|
Loan
receivable, including loan fees
|
|
$
90,024
|
$
92,590
|
|
$
269,486
|
$
272,940
|
Investment
securities- taxable
|
|
15,157
|
20,304
|
|
50,046
|
65,274
|
Investment
securities- nontaxable
|
|
1,036
|
1,054
|
|
3,127
|
3,165
|
Federal
Home Loan Bank stock
|
|
57
|
38
|
|
190
|
134
|
Federal
funds sold and securities
|
|
|
|
|
|
|
purchased
under agreements to resell
|
|
2
|
33
|
|
18
|
81
|
Deposits
with banks
|
|
471
|
360
|
|
1,596
|
901
|
|
|
|
|
|
|
|
Total
interest and dividend income
|
|
106,747
|
114,379
|
|
324,463
|
342,495
|
|
|
|
|
|
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
Time
deposits of $100,000 or more
|
|
7,970
|
10,496
|
|
26,152
|
32,115
|
Other
deposits
|
|
3,261
|
4,777
|
|
11,045
|
15,871
|
Securities
sold under agreements to repurchase
|
|
13,734
|
14,840
|
|
42,987
|
45,903
|
Advances
from Federal Home Loan Bank
|
|
74
|
2,101
|
|
196
|
10,592
|
Long-term
debt
|
|
1,291
|
1,208
|
|
3,895
|
3,630
|
Short-term
borrowings
|
|
-
|
4
|
|
-
|
11
|
|
|
|
|
|
|
|
Total
interest expense
|
|
26,330
|
33,426
|
|
84,275
|
108,122
|
|
|
|
|
|
|
|
Net
interest income before provision for credit losses
|
|
80,417
|
80,953
|
|
240,188
|
234,373
|
Provision/(reversal) for credit losses
|
|
-
|
9,000
|
|
(9,000)
|
25,000
|
|
|
|
|
|
|
|
Net
interest income after provision for credit losses
|
|
80,417
|
71,953
|
|
249,188
|
209,373
|
|
|
|
|
|
|
|
NON-INTEREST INCOME
|
|
|
|
|
|
|
Securities
gains, net
|
|
8,652
|
8,833
|
|
13,241
|
20,243
|
Letters of
credit commissions
|
|
1,728
|
1,440
|
|
4,873
|
4,113
|
Depository
service fees
|
|
1,342
|
1,341
|
|
4,114
|
4,101
|
Other
operating income
|
|
3,900
|
5,213
|
|
12,077
|
13,449
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
15,622
|
16,827
|
|
34,305
|
41,906
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
18,451
|
17,481
|
|
58,426
|
53,411
|
Occupancy
expense
|
|
3,853
|
3,714
|
|
10,926
|
10,709
|
Computer
and equipment expense
|
|
2,340
|
2,139
|
|
7,194
|
6,437
|
Professional services expense
|
|
5,273
|
4,846
|
|
15,224
|
13,534
|
FDIC and
State assessments
|
|
2,094
|
2,642
|
|
6,554
|
9,864
|
Marketing
expense
|
|
519
|
908
|
|
3,408
|
2,420
|
Other real
estate owned expense
|
|
1,794
|
6,120
|
|
13,548
|
8,603
|
Operations
of affordable housing investments
|
|
476
|
2,102
|
|
4,387
|
6,055
|
Amortization of core deposit intangibles
|
|
1,404
|
1,461
|
|
4,265
|
4,402
|
Cost
associated with debt redemption
|
|
3,450
|
4,540
|
|
6,200
|
18,527
|
Other
operating expense
|
|
8,190
|
2,430
|
|
12,925
|
7,614
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
47,844
|
48,383
|
|
143,057
|
141,576
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
48,195
|
40,397
|
|
140,436
|
109,703
|
Income tax
expense
|
|
17,686
|
14,162
|
|
50,852
|
36,802
|
Net
income
|
|
30,509
|
26,235
|
|
89,584
|
72,901
|
Less: net income
attributable to noncontrolling interest
|
|
151
|
151
|
|
452
|
452
|
Net income
attributable to Cathay General Bancorp
|
|
30,358
|
26,084
|
|
89,132
|
72,449
|
|
|
|
|
|
|
|
Dividends
on preferred stock
|
|
(4,123)
|
(4,111)
|
|
(12,361)
|
(12,323)
|
Net income
attributable to common stockholders
|
|
$
26,235
|
$
21,973
|
|
$
76,771
|
$
60,126
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
Basic
|
|
$
0.33
|
$
0.28
|
|
$
0.98
|
$
0.76
|
Diluted
|
|
$
0.33
|
$
0.28
|
|
$
0.98
|
$
0.76
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
$
0.01
|
|
$
0.03
|
$
0.03
|
Basic
average common shares outstanding
|
|
78,729,272
|
78,640,308
|
|
78,706,150
|
78,628,477
|
Diluted
average common shares outstanding
|
|
78,731,180
|
78,641,142
|
|
78,711,235
|
78,637,977
|
CATHAY GENERAL BANCORP
AVERAGE
BALANCES – SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited)
|
|
|
|
|
For the
three months ended,
|
|
(In
thousands)
|
September
30, 2012
|
|
September
30, 2011
|
|
June 30,
2012
|
|
|
|
|
|
|
|
|
|
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
(1)
|
$
7,122,569
|
5.03%
|
|
$
6,981,382
|
5.26%
|
|
$
6,938,638
|
5.15%
|
Taxable
investment securities
|
2,188,205
|
2.76%
|
|
2,308,508
|
3.49%
|
|
2,353,629
|
2.93%
|
Tax-exempt
investment securities (2)
|
131,024
|
4.84%
|
|
134,736
|
4.77%
|
|
131,085
|
4.91%
|
FHLB
stock
|
46,702
|
0.49%
|
|
57,439
|
0.26%
|
|
49,197
|
0.54%
|
Federal
funds sold and securities purchased under
agreements to resell
|
6,413
|
0.12%
|
|
207,174
|
0.06%
|
|
30,989
|
0.14%
|
Deposits
with banks
|
394,830
|
0.47%
|
|
64,897
|
2.20%
|
|
400,372
|
0.54%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,889,743
|
4.32%
|
|
$
9,754,136
|
4.68%
|
|
$
9,903,910
|
4.39%
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
535,708
|
0.15%
|
|
$
431,016
|
0.17%
|
|
$
493,800
|
0.15%
|
Money
market deposits
|
1,041,986
|
0.55%
|
|
948,678
|
0.71%
|
|
1,019,393
|
0.57%
|
Savings
deposits
|
464,091
|
0.08%
|
|
454,780
|
0.10%
|
|
446,147
|
0.09%
|
Time
deposits
|
4,129,075
|
0.91%
|
|
4,306,331
|
1.22%
|
|
4,312,129
|
1.01%
|
Total
interest-bearing deposits
|
$
6,170,860
|
0.72%
|
|
$
6,140,805
|
0.99%
|
|
$
6,271,469
|
0.80%
|
Securities
sold under agreements to repurchase
|
1,358,152
|
4.02%
|
|
1,411,332
|
4.17%
|
|
1,400,000
|
4.19%
|
Other
borrowed funds
|
40,030
|
0.74%
|
|
283,996
|
2.94%
|
|
39,368
|
0.70%
|
Long-term
debt
|
171,136
|
3.00%
|
|
171,136
|
2.80%
|
|
171,136
|
3.02%
|
Total
interest-bearing liabilities
|
7,740,178
|
1.35%
|
|
8,007,269
|
1.66%
|
|
7,881,973
|
1.45%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,209,253
|
|
|
1,013,859
|
|
|
1,110,988
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,949,431
|
|
|
$
9,021,128
|
|
|
$
8,992,961
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,637,868
|
|
|
$
10,595,366
|
|
|
$
10,636,617
|
|
Total
average equity
|
$
1,592,696
|
|
|
$
1,505,156
|
|
|
$
1,563,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
nine months ended,
|
|
|
|
(In
thousands)
|
September
30, 2012
|
|
September
30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
|
|
Loans and
leases (1)
|
$
7,019,974
|
5.13%
|
|
$
6,926,633
|
5.27%
|
|
|
|
Taxable
investment securities
|
2,287,967
|
2.92%
|
|
2,541,139
|
3.43%
|
|
|
|
Tax-exempt
investment securities (2)
|
131,732
|
4.88%
|
|
134,377
|
4.84%
|
|
|
|
FHLB
stock
|
49,499
|
0.51%
|
|
60,402
|
0.30%
|
|
|
|
Federal
funds sold and securities purchased under
agreements to resell
|
20,018
|
0.12%
|
|
109,890
|
0.10%
|
|
|
|
Deposits
with banks
|
354,268
|
0.60%
|
|
121,406
|
0.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,863,458
|
4.42%
|
|
$
9,893,847
|
4.65%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
498,613
|
0.15%
|
|
$
420,214
|
0.19%
|
|
|
|
Money
market deposits
|
1,012,603
|
0.57%
|
|
986,984
|
0.79%
|
|
|
|
Savings
deposits
|
444,882
|
0.08%
|
|
408,776
|
0.13%
|
|
|
|
Time
deposits
|
4,278,222
|
1.00%
|
|
4,327,742
|
1.27%
|
|
|
|
Total
interest-bearing deposits
|
$
6,234,320
|
0.80%
|
|
$
6,143,716
|
1.04%
|
|
|
|
Federal
funds purchased
|
-
|
-
|
|
37
|
1.25%
|
|
|
|
Securities
sold under agreements to repurchase
|
1,385,949
|
4.14%
|
|
1,462,277
|
4.20%
|
|
|
|
Other
borrowed funds
|
36,518
|
0.72%
|
|
368,893
|
3.84%
|
|
|
|
Long-term
debt
|
171,136
|
3.04%
|
|
171,136
|
2.84%
|
|
|
|
Total
interest-bearing liabilities
|
7,827,923
|
1.44%
|
|
8,146,059
|
1.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,130,830
|
|
|
977,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,958,753
|
|
|
$
9,123,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,608,659
|
|
|
$
10,688,181
|
|
|
|
|
Total
average equity
|
$
1,563,793
|
|
|
$
1,477,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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