Cathay General Bancorp Announces Net Income of $28.3 Million, or
$0.31 Per Share, For the Fourth Quarter and Net Income of $117.4
Million For the Year Ended December 31, 2012
LOS ANGELES, Jan. 23, 2013 /PRNewswire/ -- Cathay General
Bancorp (the "Company"), (NASDAQ: CATY), the holding company for
Cathay Bank (the "Bank"), today announced results for the fourth
quarter and for the year ended December 31,
2012.
FINANCIAL PERFORMANCE
|
Three
months ended December 31,
|
|
Year ended
December 31,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
income
|
$28.3
million
|
|
$27.7
million
|
|
$117.4
million
|
|
$100.2
million
|
Net income
available to common stockholders
|
$24.2
million
|
|
$23.6
million
|
|
$101.0
million
|
|
$83.7
million
|
Basic
earnings per common share
|
$0.31
|
|
$0.30
|
|
$1.28
|
|
$1.06
|
Diluted
earnings per common share
|
$0.31
|
|
$0.30
|
|
$1.28
|
|
$1.06
|
Return on
average assets
|
1.06%
|
|
1.05%
|
|
1.11%
|
|
0.94%
|
Return on
average total stockholders' equity
|
6.97%
|
|
7.33%
|
|
7.48%
|
|
6.78%
|
Efficiency
ratio
|
53.11%
|
|
49.82%
|
|
52.37%
|
|
50.90%
|
FULL YEAR HIGHLIGHTS
- Net income increased $17.2
million, or 17.3%, to $117.4
million for the year ended 2012 compared to net income of
$100.2 million for the year ended
2011.
- Memorandum of Understanding of Cathay Bank was lifted by the
CDFI and FDIC as of November 7,
2012.
- Strong growth in loans – Commercial loans increased
$258.8 million, or 13.9%, during
2012, to $2.1 billion at December 31, 2012, compared to $1.9 billion at December
31, 2011. Residential mortgage loans increased
$174.0 million, or 17.9%, to
$1.1 billion at December 31, 2012, from $972.3 million at December
31, 2011.
- Decrease in non-performing assets – Non-performing assets
decreased $149.7 million, or 49.8%,
to $150.9 million at December 31, 2012, from $300.6 million at December
31, 2011.
- Net charge-offs decreased $51.5
million, or 77.9%, to $14.7
million for the year ended 2012 from $66.2 million for the year ended 2011.
"Our loan growth for the fourth quarter was solid at
$169.2 million, or a 9% annualized
rate and included annualized growth in commercial real estate loans
of 7%," commented Dunson Cheng,
Chairman of the Board, Chief Executive Officer, and President of
the Company.
"With the lifting of the Bank MOU, we expect to open a number of
branches during the next two years in our existing regions to
better serve our customers" said Peter
Wu, Executive Vice Chairman and Chief Operating Officer.
"We expect to maintain steady loan growth in 2013 and are
working diligently to be able to repurchase in installments during
2013 the preferred shares issued under the TARP Capital
Purchase Program," concluded Dunson
Cheng.
INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter
ended December 31, 2012, was
$24.2 million, an increase of
$592,000, or 2.5%, compared to a net
income available to common stockholders of $23.6 million for the same quarter a year
ago. Diluted earnings per share available to common
stockholders for the quarter ended December
31, 2012, was $0.31 compared
to $0.30 for the same quarter a year
ago due primarily to increases in gains on sale of securities,
increases in net interest income, decreases in the provision for
credit losses, which were partially offset by increases in costs
associated with debt redemption and increases in income tax
expense.
Return on average stockholders' equity was 6.97% and return on
average assets was 1.06% for the quarter ended December 31, 2012, compared to a return on
average stockholders' equity of 7.33% and a return on average
assets of 1.05% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$1.8 million, or 2.2%, to
$81.1 million during the fourth
quarter of 2012 compared to $79.3
million during the same quarter a year ago. The
increase was due primarily to the increase in loans and the
prepayment and maturity of FHLB advances and securities sold under
agreements to repurchase.
The net interest margin, on a fully taxable-equivalent basis,
was 3.28% for the fourth quarter of 2012, compared to 3.26% for the
third quarter of 2012, and compared to 3.28% for the fourth quarter
of 2011. The slight increase in the interest margin from last
quarter was due primarily to the increase in
loans.
For the fourth quarter of 2012, the yield on average
interest-earning assets was 4.25%, on a fully taxable-equivalent
basis, the cost of funds on average interest-bearing liabilities
was 1.25%, and the cost of interest bearing deposits was
0.65%. In comparison, for the fourth quarter of 2011, the
yield on average interest-earning assets was 4.58%, on a fully
taxable-equivalent basis, the cost of funds on average
interest-bearing liabilities was 1.60%, and the cost of interest
bearing deposits was 0.92%. 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 2 basis points to 3.00% for the quarter ended
December 31, 2012, from 2.98% 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
fourth quarter of 2012 compared to charge of $2.0 million in the fourth quarter of 2011.
The provision for credit losses was based on the review of the
adequacy of the allowance for loan losses at December 31, 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:
|
Three
months ended December 31,
|
|
Year ended
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
(In
thousands)
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
Commercial loans
|
$
3,228
|
|
$
530
|
|
$
17,707
|
|
$
11,745
|
|
Construction loans- residential
|
-
|
|
2,452
|
|
391
|
|
20,801
|
|
Construction loans- other
|
-
|
|
654
|
|
774
|
|
16,699
|
|
Real estate loans (1)
|
1,265
|
|
3,208
|
|
13,616
|
|
27,327
|
|
Real estate- land loans
|
177
|
|
46
|
|
278
|
|
1,054
|
|
Installment and other loans
|
-
|
|
-
|
|
25
|
|
-
|
|
Total
charge-offs
|
4,670
|
|
6,890
|
|
32,791
|
|
77,626
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
Commercial loans
|
719
|
|
206
|
|
1,949
|
|
1,774
|
|
Construction loans- residential
|
76
|
|
141
|
|
3,788
|
|
3,808
|
|
Construction loans- other
|
452
|
|
36
|
|
2,365
|
|
665
|
|
Real estate loans (1)
|
2,036
|
|
1,874
|
|
8,820
|
|
4,539
|
|
Real estate- land loans
|
24
|
|
3
|
|
1,202
|
|
621
|
|
Installment and other loans
|
-
|
|
-
|
|
3
|
|
-
|
|
Total recoveries
|
3,307
|
|
2,260
|
|
18,127
|
|
11,407
|
|
Net
charge-offs
|
$
1,363
|
|
$
4,630
|
|
$
14,664
|
|
$
66,219
|
|
|
|
|
|
|
|
|
|
|
(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 $12.2
million for the fourth quarter of 2012, an increase of
$3.2 million, or 35.8%, compared to
$9.0 million for the fourth quarter
of 2011. The increase in non-interest income in the fourth
quarter of 2012 was primarily due to increases of $3.9 million from gains on sale of securities
which were partially offset by an $899,000 decrease in foreign exchange
income.
Non-interest expense
Non-interest expense increased $5.5
million, or 12.6%, to $49.5
million in the fourth quarter of 2012 compared to
$44.0 million in the same quarter a
year ago. The efficiency ratio was 53.11% in the fourth
quarter of 2012 compared to 49.82% for the same quarter a year
ago.
Prepayment penalties increased $4.2
million to $5.9 million in the
fourth quarter of 2012 compared to $1.7
million in the same quarter a year ago. The Company
prepaid securities sold under agreements to repurchase of
$100.0 million in the fourth quarter
of 2012. Salaries and employee benefits increased
$1.5 million, or 8.2%, in the fourth
quarter of 2012 compared to the same quarter a year ago primarily
due the hiring of new employees as well as the addition of
temporary employees related to the upcoming core system
conversion. Partially offsetting the above increases was an
$845,000, or 32.1%, decrease in FDIC
and State assessments.
Income taxes
The effective tax rate for the fourth quarter of 2012 was 35.1%
compared to 34.3% in the fourth 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 $7.43 billion at December
31, 2012, an increase of $369.9
million, or 5.2%, from $7.06
billion at December 31, 2011,
primarily due to an increase of $258.8
million, or 13.9%, in commercial loans and an increase of
$174.0 million, or 17.9%, in
residential mortgage loans offset by a decrease of $56.4 million, or 23.8%, in real estate
construction loans and a decrease of $20.9
million, or 9.7%, in equity lines. The changes in loan
composition from December 31, 2011,
are presented below:
Type of
Loans:
|
December
31, 2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Commercial
loans
|
$
2,127,107
|
|
$
1,868,275
|
|
14
|
Residential mortgage loans
|
1,146,230
|
|
972,262
|
|
18
|
Commercial
mortgage loans
|
3,768,452
|
|
3,748,897
|
|
1
|
Equity
lines
|
193,852
|
|
214,707
|
|
(10)
|
Real
estate construction loans
|
180,950
|
|
237,372
|
|
(24)
|
Installment & other loans
|
12,556
|
|
17,699
|
|
(29)
|
|
|
|
|
|
|
Gross
loans
|
$
7,429,147
|
|
$
7,059,212
|
|
5
|
|
|
|
|
|
|
Allowance
for loan losses
|
(183,322)
|
|
(206,280)
|
|
(11)
|
Unamortized deferred loan fees
|
(10,238)
|
|
(8,449)
|
|
21
|
|
|
|
|
|
|
Total
loans, net
|
$
7,235,587
|
|
$
6,844,483
|
|
6
|
Total deposits were $7.4 billion
at December 31, 2012, an increase of
$154.1 million, or 2.1%, from
$7.2 billion at December 31, 2011, primarily due to a
$235.3 million, or 24.7%, increase in
money market deposits, a $194.7
million, or 18.1%, increase in non-interest bearing demand
deposits, a $141.6 million, or 31.4%,
increase in NOW deposits, and a $53.8
million, or 12.8%, increase in savings deposits, offset by a
$188.8 million, or 22.7%, decrease in
time deposits under $100,000 and a
$282.5 million, or 8.1%, decrease in
time deposits of $100,000 or
more. The changes in deposit composition from December 31, 2011, are presented below:
Deposits
|
December
31, 2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Non-interest-bearing demand deposits
|
$
1,269,455
|
|
$
1,074,718
|
|
18
|
NOW
deposits
|
593,133
|
|
451,541
|
|
31
|
Money
market deposits
|
1,186,771
|
|
951,516
|
|
25
|
Savings
deposits
|
473,805
|
|
420,030
|
|
13
|
Time
deposits under $100,000
|
644,191
|
|
832,997
|
|
(23)
|
Time
deposits of $100,000 or more
|
3,215,870
|
|
3,498,329
|
|
(8)
|
Total
deposits
|
$
7,383,225
|
|
$
7,229,131
|
|
2
|
|
|
|
|
|
|
ASSET QUALITY REVIEW
At December 31, 2012, total
non-accrual portfolio loans, excluding loans held for sale, were
$103.9 million, an increase of
$9.0 million, or 9.4%, from
$94.9 million at September 30, 2012, and a decrease of
$97.3 million, or 48.4%, from
$201.2 million at December 31, 2011.
The allowance for loan losses was $183.3
million and the allowance for off-balance sheet unfunded
credit commitments was $1.4 million
at December 31, 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 $184.7 million at December
31, 2012, compared to $208.3
million at December 31, 2011,
a decrease of $23.6 million, or
11.4%. The allowance for credit losses represented 2.49% of
period-end gross loans, excluding loans held for sale, and 176.7%
of non-performing portfolio loans at December 31, 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
December 31, 2012, compared to
September 30, 2012, and to
December 31, 2011, are highlighted
below:
(Dollars in thousands)
|
December
31, 2012
|
|
September
30, 2012
|
|
%
Change
|
|
December
31, 2011
|
|
%
Change
|
Non-performing assets
|
|
|
|
|
|
|
|
|
|
Accruing
loans past due 90 days or more
|
$
630
|
|
$
-
|
|
100
|
|
$
6,726
|
|
(91)
|
Non-accrual loans:
|
|
|
|
|
|
|
|
|
|
Construction- residential loans
|
2,984
|
|
2,342
|
|
27
|
|
25,288
|
|
(88)
|
Construction- non-residential loans
|
33,315
|
|
7,080
|
|
371
|
|
20,724
|
|
61
|
Land loans
|
6,053
|
|
7,204
|
|
(16)
|
|
10,975
|
|
(45)
|
Commercial real estate loans, excluding land loans
|
29,651
|
|
41,550
|
|
(29)
|
|
96,809
|
|
(69)
|
Commercial loans
|
19,958
|
|
23,035
|
|
(13)
|
|
30,661
|
|
(35)
|
Residential mortgage loans
|
11,941
|
|
13,733
|
|
(13)
|
|
16,740
|
|
(29)
|
Total
non-accrual loans:
|
$
103,902
|
|
$
94,944
|
|
9
|
|
$
201,197
|
|
(48)
|
Total
non-performing loans
|
104,532
|
|
94,944
|
|
10
|
|
207,923
|
|
(50)
|
Other real estate owned
|
46,384
|
|
60,642
|
|
(24)
|
|
92,713
|
|
(50)
|
Total
non-performing assets
|
$
150,916
|
|
$
155,586
|
|
(3)
|
|
$
300,636
|
|
(50)
|
Accruing troubled debt
restructurings (TDRs)
|
$
144,695
|
|
$
170,151
|
|
(15)
|
|
$
120,016
|
|
21
|
Non-accrual loans held for sale
|
$
-
|
|
$
-
|
|
-
|
|
$
760
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses
|
$
183,322
|
|
$
184,438
|
|
(1)
|
|
$
206,280
|
|
(11)
|
Allowance
for off-balance sheet credit commitments
|
1,362
|
|
1,610
|
|
(15)
|
|
2,069
|
|
(34)
|
Allowance
for credit losses
|
$
184,684
|
|
$
186,048
|
|
(1)
|
|
$
208,349
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
Total
gross loans outstanding, at period-end (1)
|
$
7,429,147
|
|
$
7,259,930
|
|
2
|
|
$
7,059,212
|
|
5
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses to non-performing loans, at period-end
(2)
|
175.37%
|
|
194.26%
|
|
|
|
99.21%
|
|
|
Allowance
for loan losses to gross loans, at period-end (1)
|
2.47%
|
|
2.54%
|
|
|
|
2.92%
|
|
|
Allowance
for credit losses to gross loans, at period-end (1)
|
2.49%
|
|
2.56%
|
|
|
|
2.95%
|
|
|
(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
$144.7 million at December 31, 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 1.4% at December 31, 2012, compared to 2.8% at
December 31, 2011. Total
non-performing portfolio assets decreased $149.7 million, or 49.8%, to $150.9 million at December
31, 2012, compared to $300.6
million at December 31, 2011,
primarily due to a $97.3 million
decrease in non-accrual loans, a $46.3
million decrease in other real estate owned, and a
$6.1 million decrease in accruing
loans past due 90 days or more.
CAPITAL ADEQUACY REVIEW
At December 31, 2012, the
Company's Tier 1 risk-based capital ratio of 17.36%, total
risk-based capital ratio of 19.12%, and Tier 1 leverage capital
ratio of 13.82%, 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 year
ended December 31, 2012, was
$101.0 million, an increase of
$17.3 million, or 20.6%, compared to
net income attributable to common stockholders of $83.7 million for the same period a year ago due
primarily to increases in net interest income, 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 FDIC and State
assessments, and decreases in operation expenses of affordable
housing investments, which were partially offset by increases in
income tax expenses, increases in litigation accrual expenses,
increases in other real estate owned expenses, increases in
salaries and incentive compensation expense, and decreases in gains
on sale of securities. Diluted earnings per share was
$1.28 compared to $1.06 per share for the same period a year
ago. The net interest margin for the year ended December 31, 2012, increased 7 basis points to
3.28% compared to 3.21% for the year ended December 31, 2011.
Return on average stockholders' equity was 7.48% and return on
average assets was 1.11% for the year ended December 31, 2012, compared to a return on
average stockholders' equity of 6.78% and a return on average
assets of 0.94% for the year ended December
31, 2011. The efficiency ratio for the year ended
December 31, 2012, was 52.37%
compared to 50.90% for the year ended December 31, 2011.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its fourth 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
1-866-713-8563 and enter Participant Passcode 12690883. 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 December 31,
|
|
|
|
Year ended
December 31,
|
(Dollars
in thousands, except per share data)
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income before provision for credit
losses
|
|
$
81,065
|
|
$
79,317
|
|
2
|
|
$
321,253
|
|
$
313,690
|
2
|
Provision/(reversal) for credit losses
|
|
-
|
|
2,000
|
|
(100)
|
|
(9,000)
|
|
27,000
|
(133)
|
Net
interest income after provision for credit losses
|
|
81,065
|
|
77,317
|
|
5
|
|
330,253
|
|
286,690
|
15
|
Non-interest income
|
|
12,202
|
|
8,986
|
|
36
|
|
46,507
|
|
50,892
|
(9)
|
Non-interest expense
|
|
49,532
|
|
43,990
|
|
13
|
|
192,589
|
|
185,566
|
4
|
Income
before income tax expense
|
|
43,735
|
|
42,313
|
|
3
|
|
184,171
|
|
152,016
|
21
|
Income tax
expense
|
|
15,276
|
|
14,459
|
|
6
|
|
66,128
|
|
51,261
|
29
|
Net
income
|
|
28,459
|
|
27,854
|
|
2
|
|
118,043
|
|
100,755
|
17
|
Net
income attributable to noncontrolling interest
|
|
153
|
|
153
|
|
-
|
|
605
|
|
605
|
-
|
Net income
attributable to Cathay General Bancorp
|
|
$
28,306
|
|
$
27,701
|
|
2
|
|
$
117,438
|
|
$
100,150
|
17
|
Dividends
on preferred stock
|
|
(4,127)
|
|
(4,114)
|
|
0
|
|
(16,488)
|
|
(16,437)
|
0
|
Net income
attributable to common stockholders
|
|
$
24,179
|
|
$
23,587
|
|
3
|
|
$
100,950
|
|
$
83,713
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.31
|
|
$
0.30
|
|
3
|
|
$
1.28
|
|
$
1.06
|
21
|
Diluted
|
|
$
0.31
|
|
$
0.30
|
|
3
|
|
$
1.28
|
|
$
1.06
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
|
$
0.01
|
|
-
|
|
$
0.04
|
|
$
0.04
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets
|
|
1.06%
|
|
1.05%
|
|
1
|
|
1.11%
|
|
0.94%
|
18
|
Return on
average total stockholders' equity
|
|
6.97%
|
|
7.33%
|
|
(5)
|
|
7.48%
|
|
6.78%
|
10
|
Efficiency
ratio
|
|
53.11%
|
|
49.82%
|
|
7
|
|
52.37%
|
|
50.90%
|
3
|
Dividend
payout ratio
|
|
2.78%
|
|
2.84%
|
|
(2)
|
|
2.68%
|
|
3.14%
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD
ANALYSIS (Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.25%
|
|
4.58%
|
|
(7)
|
|
4.38%
|
|
4.63%
|
(6)
|
Total
interest-bearing liabilities
|
|
1.25%
|
|
1.60%
|
|
(22)
|
|
1.39%
|
|
1.73%
|
(20)
|
Net
interest spread
|
|
3.00%
|
|
2.98%
|
|
1
|
|
2.99%
|
|
2.90%
|
2
|
Net
interest margin
|
|
3.28%
|
|
3.28%
|
|
-
|
|
3.28%
|
|
3.21%
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
December
31, 2012
|
|
December
31, 2011
|
|
September
30, 2012
|
|
Well
Capitalized Requirements
|
|
Minimum
Regulatory Requirements
|
|
Tier 1
risk-based capital ratio
|
|
17.36%
|
|
15.97%
|
|
17.08%
|
|
6.0%
|
|
4.0%
|
|
Total
risk-based capital ratio
|
|
19.12%
|
|
17.85%
|
|
18.96%
|
|
10.0%
|
|
8.0%
|
|
Tier 1
leverage capital ratio
|
|
13.82%
|
|
12.93%
|
|
13.57%
|
|
5.0%
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
|
|
|
|
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
December
31, 2012
|
|
December
31, 2011
|
|
%
change
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and
due from banks
|
|
$
144,909
|
|
$
117,888
|
|
23
|
Short-term
investments and interest bearing deposits
|
|
411,983
|
|
294,956
|
|
40
|
Securities held-to-maturity (market value of
$823,906 in 2012 and $1,203,977 in 2011)
|
|
773,768
|
|
1,153,504
|
|
(33)
|
Securities available-for-sale (amortized cost
of $1,290,676 in 2012 and $1,309,521 in
2011)
|
|
1,291,480
|
|
1,294,478
|
|
(0)
|
Trading
securities
|
|
4,703
|
|
4,542
|
|
4
|
Loans held
for sale
|
|
-
|
|
760
|
|
(100)
|
Loans
|
|
7,429,147
|
|
7,059,212
|
|
5
|
Less: Allowance for loan losses
|
|
(183,322)
|
|
(206,280)
|
|
(11)
|
Unamortized deferred loan fees, net
|
|
(10,238)
|
|
(8,449)
|
|
21
|
Loans, net
|
|
7,235,587
|
|
6,844,483
|
|
6
|
Federal
Home Loan Bank stock
|
|
41,272
|
|
52,989
|
|
(22)
|
Other real
estate owned, net
|
|
46,384
|
|
92,713
|
|
(50)
|
Affordable
housing investments, net
|
|
85,037
|
|
78,358
|
|
9
|
Premises
and equipment, net
|
|
102,613
|
|
105,961
|
|
(3)
|
Customers'
liability on acceptances
|
|
41,271
|
|
37,300
|
|
11
|
Accrued
interest receivable
|
|
26,015
|
|
32,226
|
|
(19)
|
Goodwill
|
|
316,340
|
|
316,340
|
|
-
|
Other
intangible assets, net
|
|
6,132
|
|
11,598
|
|
(47)
|
Other
assets
|
|
166,595
|
|
206,768
|
|
(19)
|
|
|
|
|
|
|
|
Total
assets
|
|
$
10,694,089
|
|
$
10,644,864
|
|
0
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
$
1,269,455
|
|
$
1,074,718
|
|
18
|
Interest-bearing deposits:
|
|
|
|
|
|
|
NOW
deposits
|
|
593,133
|
|
451,541
|
|
31
|
Money
market deposits
|
|
1,186,771
|
|
951,516
|
|
25
|
Savings
deposits
|
|
473,805
|
|
420,030
|
|
13
|
Time
deposits under $100,000
|
|
644,191
|
|
832,997
|
|
(23)
|
Time
deposits of $100,000 or more
|
|
3,215,870
|
|
3,498,329
|
|
(8)
|
Total
deposits
|
|
7,383,225
|
|
7,229,131
|
|
2
|
|
|
|
|
|
|
|
Securities
sold under agreements to repurchase
|
|
1,250,000
|
|
1,400,000
|
|
(11)
|
Advances
from the Federal Home Loan Bank
|
|
146,200
|
|
225,000
|
|
(35)
|
Other
borrowings from financial institutions
|
|
-
|
|
880
|
|
(100)
|
Other
borrowings for affordable housing investments
|
|
18,713
|
|
18,920
|
|
(1)
|
Long-term
debt
|
|
171,136
|
|
171,136
|
|
-
|
Acceptances outstanding
|
|
41,271
|
|
37,300
|
|
11
|
Other
liabilities
|
|
54,040
|
|
46,864
|
|
15
|
Total
liabilities
|
|
9,064,585
|
|
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
|
|
254,580
|
|
250,992
|
|
1
|
Common
stock, $0.01 par value, 100,000,000 shares authorized,
|
|
|
|
|
|
|
82,985,853
issued and 78,778,288 outstanding at December 31, 2012,
and
|
|
|
|
|
|
|
82,860,122
issued and 78,652,557 outstanding at December 31, 2011
|
|
830
|
|
829
|
|
0
|
Additional
paid-in-capital
|
|
768,925
|
|
765,641
|
|
0
|
Accumulated other comprehensive income/(loss),
net
|
|
465
|
|
(8,732)
|
|
105
|
Retained
earnings
|
|
721,993
|
|
624,192
|
|
16
|
Treasury stock, at cost (4,207,565 shares at
December 31, 2012, and at December 31, 2011)
|
|
(125,736)
|
|
(125,736)
|
|
-
|
|
|
|
|
|
|
|
Total
Cathay General Bancorp stockholders' equity
|
|
1,621,057
|
|
1,507,186
|
|
8
|
Noncontrolling interest
|
|
8,447
|
|
8,447
|
|
-
|
Total
equity
|
|
1,629,504
|
|
1,515,633
|
|
8
|
Total
liabilities and equity
|
|
$
10,694,089
|
|
$
10,644,864
|
|
0
|
|
|
|
|
|
|
|
Book value
per common share
|
|
$17.12
|
|
$15.75
|
|
9
|
Number of
common shares outstanding
|
|
78,778,288
|
|
78,652,557
|
|
0
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
Three
months ended December 31,
|
|
Year ended
December 31,
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
(In
thousands, except share and per share data)
|
INTEREST AND DIVIDEND INCOME
|
|
|
|
|
|
|
Loan
receivable, including loan fees
|
|
$
91,157
|
$
91,640
|
|
$
360,643
|
$
364,580
|
Investment
securities- taxable
|
|
12,349
|
17,809
|
|
62,395
|
83,083
|
Investment
securities- nontaxable
|
|
1,034
|
1,053
|
|
4,161
|
4,218
|
Federal
Home Loan Bank stock
|
|
295
|
43
|
|
485
|
177
|
Federal
funds sold and securities
|
|
|
|
|
|
|
purchased
under agreements to resell
|
|
-
|
2
|
|
18
|
83
|
Deposits
with banks
|
|
446
|
529
|
|
2,042
|
1,430
|
|
|
|
|
|
|
|
Total
interest and dividend income
|
|
105,281
|
111,076
|
|
429,744
|
453,571
|
|
|
|
|
|
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
Time
deposits of $100,000 or more
|
|
7,289
|
10,089
|
|
33,441
|
42,204
|
Other
deposits
|
|
2,887
|
4,139
|
|
13,932
|
20,010
|
Securities
sold under agreements to repurchase
|
|
12,712
|
14,830
|
|
55,699
|
60,733
|
Advances
from Federal Home Loan Bank
|
|
74
|
1,441
|
|
270
|
12,033
|
Long-term
debt
|
|
1,254
|
1,260
|
|
5,149
|
4,890
|
Short-term
borrowings
|
|
-
|
-
|
|
-
|
11
|
|
|
|
|
|
|
|
Total
interest expense
|
|
24,216
|
31,759
|
|
108,491
|
139,881
|
|
|
|
|
|
|
|
Net
interest income before provision for credit losses
|
|
81,065
|
79,317
|
|
321,253
|
313,690
|
Provision/(reversal) for credit losses
|
|
-
|
2,000
|
|
(9,000)
|
27,000
|
|
|
|
|
|
|
|
Net
interest income after provision for credit losses
|
|
81,065
|
77,317
|
|
330,253
|
286,690
|
|
|
|
|
|
|
|
NON-INTEREST INCOME
|
|
|
|
|
|
|
Securities
gains, net
|
|
4,785
|
888
|
|
18,026
|
21,131
|
Letters of
credit commissions
|
|
1,443
|
1,531
|
|
6,316
|
5,644
|
Depository
service fees
|
|
1,339
|
1,319
|
|
5,453
|
5,420
|
Other
operating income
|
|
4,635
|
5,248
|
|
16,712
|
18,697
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
12,202
|
8,986
|
|
46,507
|
50,892
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
19,951
|
18,438
|
|
78,377
|
71,849
|
Occupancy
expense
|
|
3,682
|
3,516
|
|
14,608
|
14,225
|
Computer
and equipment expense
|
|
2,397
|
2,071
|
|
9,591
|
8,508
|
Professional services expense
|
|
6,544
|
6,675
|
|
21,768
|
20,209
|
FDIC and
State assessments
|
|
1,785
|
2,630
|
|
8,339
|
12,494
|
Marketing
expense
|
|
1,199
|
755
|
|
4,607
|
3,175
|
Other real
estate owned expense
|
|
1,568
|
1,980
|
|
15,116
|
10,583
|
Operations
of affordable housing investments
|
|
1,919
|
2,098
|
|
6,306
|
8,153
|
Amortization of core deposit intangibles
|
|
1,398
|
1,457
|
|
5,663
|
5,859
|
Cost
associated with debt redemption
|
|
5,920
|
1,704
|
|
12,120
|
20,231
|
Other
operating expense
|
|
3,169
|
2,666
|
|
16,094
|
10,280
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
49,532
|
43,990
|
|
192,589
|
185,566
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
43,735
|
42,313
|
|
184,171
|
152,016
|
Income tax
expense
|
|
15,276
|
14,459
|
|
66,128
|
51,261
|
Net
income
|
|
28,459
|
27,854
|
|
118,043
|
100,755
|
Less: net income
attributable to noncontrolling interest
|
|
153
|
153
|
|
605
|
605
|
Net income
attributable to Cathay General Bancorp
|
|
28,306
|
27,701
|
|
117,438
|
100,150
|
|
|
|
|
|
|
|
Dividends
on preferred stock
|
|
(4,127)
|
(4,114)
|
|
(16,488)
|
(16,437)
|
Net income
attributable to common stockholders
|
|
$
24,179
|
$
23,587
|
|
$
100,950
|
$
83,713
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
Basic
|
|
$
0.31
|
$
0.30
|
|
$
1.28
|
$
1.06
|
Diluted
|
|
$
0.31
|
$
0.30
|
|
$
1.28
|
$
1.06
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
$
0.01
|
|
$
0.04
|
$
0.04
|
Basic
average common shares outstanding
|
|
78,757,798
|
78,647,680
|
|
78,719,133
|
78,633,317
|
Diluted
average common shares outstanding
|
|
78,759,222
|
78,648,591
|
|
78,723,297
|
78,640,652
|
CATHAY GENERAL BANCORP
AVERAGE
BALANCES – SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited)
|
|
|
|
|
For the
three months ended,
|
|
(In
thousands)
|
December
31, 2012
|
|
December
31, 2011
|
|
September
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)
|
$
7,318,749
|
4.96%
|
|
$
7,061,140
|
5.15%
|
|
$
7,122,569
|
5.03%
|
Taxable
investment securities
|
2,005,074
|
2.45%
|
|
2,316,940
|
3.05%
|
|
2,188,205
|
2.76%
|
Tax-exempt
investment securities (2)
|
130,927
|
4.83%
|
|
133,856
|
4.80%
|
|
131,024
|
4.84%
|
FHLB
stock
|
43,290
|
2.71%
|
|
54,835
|
0.31%
|
|
46,702
|
0.49%
|
Federal
funds sold and securities purchased
|
|
|
|
|
|
|
|
|
under
agreements to resell
|
-
|
-
|
|
9,130
|
0.07%
|
|
6,413
|
0.12%
|
Deposits
with banks
|
405,467
|
0.44%
|
|
90,301
|
2.32%
|
|
394,830
|
0.47%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,903,507
|
4.25%
|
|
$
9,666,202
|
4.58%
|
|
$
9,889,743
|
4.32%
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
568,762
|
0.16%
|
|
$
444,170
|
0.15%
|
|
$
535,708
|
0.15%
|
Money
market deposits
|
1,200,528
|
0.55%
|
|
956,313
|
0.63%
|
|
1,041,986
|
0.55%
|
Savings
deposits
|
469,249
|
0.08%
|
|
421,381
|
0.09%
|
|
464,091
|
0.08%
|
Time
deposits
|
3,958,704
|
0.83%
|
|
4,312,235
|
1.15%
|
|
4,129,075
|
0.91%
|
Total
interest-bearing deposits
|
$
6,197,243
|
0.65%
|
|
$
6,134,099
|
0.92%
|
|
$
6,170,860
|
0.72%
|
Securities
sold under agreements to repurchase
|
1,288,587
|
3.92%
|
|
1,407,076
|
4.18%
|
|
1,358,152
|
4.02%
|
Other
borrowed funds
|
41,290
|
0.71%
|
|
169,386
|
3.38%
|
|
40,030
|
0.74%
|
Long-term
debt
|
171,136
|
2.92%
|
|
171,136
|
2.92%
|
|
171,136
|
3.00%
|
Total
interest-bearing liabilities
|
7,698,256
|
1.25%
|
|
7,881,697
|
1.60%
|
|
7,740,178
|
1.35%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,236,304
|
|
|
1,052,501
|
|
|
1,209,253
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,934,560
|
|
|
$
8,934,198
|
|
|
$
8,949,431
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,641,799
|
|
|
$
10,513,596
|
|
|
$
10,637,868
|
|
Total
average equity
|
$
1,625,065
|
|
|
$
1,508,717
|
|
|
$
1,592,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended,
|
|
|
|
(In
thousands)
|
December
31, 2012
|
|
December
31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
|
|
Loans and
leases (1)
|
$
7,095,076
|
5.08%
|
|
$
6,960,536
|
5.24%
|
|
|
|
Taxable
investment securities
|
2,216,857
|
2.81%
|
|
2,484,629
|
3.34%
|
|
|
|
Tax-exempt
investment securities (2)
|
131,530
|
4.87%
|
|
134,245
|
4.83%
|
|
|
|
FHLB
stock
|
47,938
|
1.01%
|
|
58,999
|
0.30%
|
|
|
|
Federal
funds sold and securities purchased
|
|
|
|
|
|
|
|
|
under
agreements to resell
|
14,986
|
0.12%
|
|
84,493
|
0.10%
|
|
|
|
Deposits
with banks
|
367,138
|
0.56%
|
|
113,566
|
1.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,873,525
|
4.38%
|
|
$
9,836,468
|
4.63%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
516,246
|
0.15%
|
|
$
426,252
|
0.18%
|
|
|
|
Money
market deposits
|
1,059,841
|
0.56%
|
|
979,253
|
0.75%
|
|
|
|
Savings
deposits
|
451,022
|
0.08%
|
|
411,953
|
0.12%
|
|
|
|
Time
deposits
|
4,197,906
|
0.96%
|
|
4,323,833
|
1.24%
|
|
|
|
Total
interest-bearing deposits
|
$
6,225,015
|
0.76%
|
|
$
6,141,291
|
1.01%
|
|
|
|
Federal
funds purchased
|
-
|
-
|
|
27
|
1.29%
|
|
|
|
Securities
sold under agreements to repurchase
|
1,361,475
|
4.09%
|
|
1,448,363
|
4.19%
|
|
|
|
Other
borrowed funds
|
37,717
|
0.72%
|
|
318,607
|
3.78%
|
|
|
|
Long-term
debt
|
171,136
|
3.01%
|
|
171,136
|
2.86%
|
|
|
|
Total
interest-bearing liabilities
|
7,795,343
|
1.39%
|
|
8,079,424
|
1.73%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,157,343
|
|
|
996,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,952,686
|
|
|
$
9,075,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,617,004
|
|
|
$
10,629,217
|
|
|
|
|
Total
average equity
|
$
1,579,195
|
|
|
$
1,485,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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