LOS ANGELES, Jan. 23, 2019 /PRNewswire/ -- Cathay General
Bancorp (the "Company", "we", "us", or "our" NASDAQ: CATY), the
holding company for Cathay Bank, today announced its unaudited
financial results for the quarter and year ended December 31, 2018. The Company reported net
income of $64.9 million, or
$0.80 per share, for the fourth
quarter of 2018, and net income of $272.2
million, or $3.34 per share,
for the year ended December 31,
2018.
FINANCIAL PERFORMANCE
|
Three months
ended
|
|
Year ended December
31,
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
2018
|
|
2017
|
Net income
|
$64.9
million
|
|
$69.8
million
|
|
$25.9
million
|
|
$272.2
million
|
|
$176.0
million
|
Basic earnings per
common share
|
$0.80
|
|
$0.86
|
|
$0.32
|
|
$3.35
|
|
$2.19
|
Diluted earnings per
common share
|
$0.80
|
|
$0.85
|
|
$0.32
|
|
$3.34
|
|
$2.17
|
Return on average
assets
|
1.57%
|
|
1.72%
|
|
0.66%
|
|
1.70%
|
|
1.19%
|
Return on average
total stockholders' equity
|
12.13%
|
|
13.19%
|
|
5.18%
|
|
13.19%
|
|
9.10%
|
Efficiency
ratio
|
47.16%
|
|
43.14%
|
|
46.27%
|
|
44.13%
|
|
44.40%
|
FULL YEAR HIGHLIGHTS
- Total loans increased for the year by $1.1 billion, or 8.5%, to $14.0 billion from $12.9
billion in 2017.
- Net interest margin for 2018 increased to 3.79% compared to
3.63% in 2017.
"We reported record net income of $272.2
million and record EPS of $3.34 in 2018. Strong loan growth of
$1.1 billion in 2018 or 8.5% was a
major contributor to the record results. In light of recent stock
market weakness, we resumed our stock buyback program and
repurchased 1.1 million shares of our common stock at an average
price of $38.25," commented Pin Tai,
Chief Executive Officer and President of the Company.
FOURTH QUARTER INCOME STATEMENT REVIEW
Net income for the quarter ended December
31, 2018, was $64.9 million,
an increase of $39.0 million, or
150.6%, compared to net income of $25.9
million for the same quarter a year ago, which included
$22.3 million of additional tax
expense related to the revaluation of the Company's deferred tax
assets and a $2.6 million pretax
write-down of low income housing tax credit investments as a result
of the enactment of the Tax Cuts and Jobs Act. Diluted
earnings per share for the quarter ended December 31, 2018, was $0.80 compared to $0.32 for the same quarter a year ago. Net
income for the quarter ended December 31,
2018 included a $6.2 million increase in amortization
expense of investments in low income housing and alternative energy
partnerships and a decrease of $1.9 million in income from other real estate
owned compared to the same quarter in prior year.
Return on average stockholders' equity was 12.1% and return on
average assets was 1.57% for the quarter ended December 31, 2018, compared to a return on
average stockholders' equity of 5.18% and a return on average
assets of 0.66% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$12.1 million, or 9.1%, to
$145.4 million during the fourth
quarter of 2018, compared to $133.3
million during the same quarter a year ago. The
increase was due primarily to an increase in interest income from
loans and securities, offset by increases in interest expense from
time deposits.
The net interest margin was 3.77% for the fourth quarter of 2018
compared to 3.65% for the fourth quarter of 2017 and 3.83% for the
third quarter of 2018.
For the fourth quarter of 2018, the yield on average
interest-earning assets was 4.76%, the cost of funds on average
interest-bearing liabilities was 1.36%, and the cost of
interest-bearing deposits was 1.29%. In comparison, for the
fourth quarter of 2017, the yield on average interest-earning
assets was 4.27%, the cost of funds on average interest-bearing
liabilities was 0.84%, and the cost of interest-bearing deposits
was 0.73%. The increase in the yield on average interest-earning
assets resulted mainly from higher rates on loans. The net
interest spread, defined as the difference between the yield on
average interest-earning assets and the cost of funds on average
interest-bearing liabilities, was 3.40% for the quarter ended
December 31, 2018, compared to 3.43%
for the same quarter a year ago.
Provision for credit losses
The Company did not record a provision for credit losses in the
fourth quarter of 2018 or 2017, based on a review of the
appropriateness of the allowance for loan losses at December 31, 2018. The following table
summarizes the charge-offs and recoveries for the periods
indicated:
|
Three months
ended
|
|
Year ended December
31,
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
2018
|
|
2017
|
|
(In thousands)
(Unaudited)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
Commercial
loans
|
$
-
|
|
$
122
|
|
$
1,503
|
|
$
629
|
|
$
3,313
|
Real estate
loans (1)
|
2,186
|
|
-
|
|
-
|
|
2,576
|
|
860
|
Total
charge-offs
|
2,186
|
|
122
|
|
1,503
|
|
3,205
|
|
4,173
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
Commercial
loans
|
625
|
|
187
|
|
2,001
|
|
1,875
|
|
3,402
|
Construction
loans
|
44
|
|
44
|
|
86
|
|
177
|
|
229
|
Real estate
loans(1)
|
451
|
|
2,949
|
|
1,160
|
|
4,765
|
|
7,355
|
Total recoveries
|
1,120
|
|
3,180
|
|
3,247
|
|
6,817
|
|
10,986
|
Net
(recoveries)/charge-offs
|
$
1,066
|
|
$
(3,058)
|
|
$
(1,744)
|
|
$ (3,612)
|
|
$ (6,813)
|
|
(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), wire transfer fees, and other sources of fee income, was
$10.4 million for the fourth quarter
of 2018, an increase of $0.2 million,
or 2.0%, compared to $10.2 million
for the fourth quarter of 2017, primarily due to a $1.8 million increase in net unrealized gains
from equity securities and offset by a $1.4
million decrease in net realized gains from securities.
Non-interest expense
Non-interest expense increased $7.1
million, or 10.7%, to $73.5
million in the fourth quarter of 2018 compared to
$66.4 million in the same quarter a
year ago. The increase in non-interest expense in the fourth
quarter of 2018 was primarily due to a $3.7
million increase in salaries and employee benefits expense,
a $6.2 million increase in
amortization expense of investments in low income housing and
alternative energy partnerships
offset by a $1.2 million
decrease in provision for unfunded commitments, and a decrease of
$1.9 million in FDIC and State
assessments when compared to the same quarter a year ago.
Fourth quarter of 2018 non-interest
expense included a $1.8 million
impairment charge for investments in low income housing
partnerships. The efficiency ratio was 47.2% in
the fourth quarter of 2018 compared to 46.3% for the same quarter a
year ago.
Income taxes
The effective tax rate for the fourth quarter of 2018 was 21.2%
compared to 66.4% for the fourth quarter of 2017. The
effective tax rate includes the reduction of the corporate tax rate
from the enactment of the Tax Cuts and Jobs Act, an alternative
energy investment made in the second quarter and the impact of
low-income housing tax credits. Income tax expense for 2018
was reduced by $0.9 million in
benefits from the distribution of restricted stock units and
exercises of stock options.
BALANCE SHEET REVIEW
Gross loans, excluding loans held for sale, were $14.0 billion at December
31, 2018, an increase of $1.1
billion, or 8.5%, from $12.9
billion at December 31,
2017. The increase was primarily due to increases of
$631.8 million, or 20.6%, in
residential mortgage loans, $280.7
million, or 11.4%, in commercial loans, and $241.5 million, or 3.7%, in commercial mortgage
loans, which were partially offset by a decrease of $97.4 million, or 14.3%, in real estate
construction loans. The loan balances and composition at
December 31, 2018, compared to
September 30, 2018 and December 31, 2017, are presented below:
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
(In thousands)
(Unaudited)
|
Commercial
loans
|
$
2,741,965
|
|
$
2,674,089
|
|
$
2,461,266
|
Residential mortgage
loans
|
3,693,853
|
|
3,569,111
|
|
3,062,050
|
Commercial mortgage
loans
|
6,724,200
|
|
6,580,254
|
|
6,482,695
|
Equity
lines
|
249,967
|
|
221,599
|
|
180,304
|
Real estate
construction loans
|
581,454
|
|
597,018
|
|
678,805
|
Installment and other
loans
|
4,349
|
|
5,575
|
|
5,170
|
|
|
|
|
|
|
Gross
loans
|
$
13,995,788
|
|
$
13,647,646
|
|
$
12,870,290
|
|
|
|
|
|
|
Allowance for loan
losses
|
(122,391)
|
|
(123,457)
|
|
(123,279)
|
Unamortized deferred
loan fees
|
(1,565)
|
|
(2,086)
|
|
(3,245)
|
|
|
|
|
|
|
Total loans,
net
|
$
13,871,832
|
|
$
13,522,103
|
|
$
12,743,766
|
|
|
|
|
|
|
Loans held for
sale
|
$
-
|
|
$
-
|
|
$
8,000
|
Total deposits were $13.7 billion
at December 31, 2018, an increase of
$1.0 billion, or 8.0%, from
$12.7 billion at December 31, 2017. The deposit balances and
composition at December 31, 2018,
compared to September 30, 2018 and
December 31, 2017, are presented
below:
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
(In thousands)
(Unaudited)
|
Non-interest-bearing
demand deposits
|
$
2,857,443
|
|
$
2,957,881
|
|
$
2,783,127
|
NOW
deposits
|
1,365,763
|
|
1,409,463
|
|
1,410,519
|
Money market
deposits
|
2,027,404
|
|
2,134,097
|
|
2,248,271
|
Savings
deposits
|
738,656
|
|
747,814
|
|
857,199
|
Time
deposits
|
6,713,074
|
|
6,331,823
|
|
5,390,777
|
Total
deposits
|
$
13,702,340
|
|
$
13,581,078
|
|
$
12,689,893
|
ASSET QUALITY REVIEW
At December 31, 2018, total
non-accrual loans were $41.8 million,
a decrease of $0.6 million, or 1.4%,
from $42.4 million at September 30, 2018, and a decrease of
$7.0 million, or 14.3%, from
$48.8 million at December 31, 2017.
The allowance for loan losses was $122.4
million and the allowance for off-balance sheet unfunded
credit commitments was $2.3 million
at December 31, 2018, which
represented the amount believed by management to be appropriate to
absorb credit losses inherent in the loan portfolio, including
unfunded credit commitments. The $122.4 million allowance for loan losses at
December 31, 2018, decreased
$0.9 million, or 0.7%, from
$123.3 million at December 31, 2017. The allowance for loan
losses represented 0.87% of period-end gross loans, excluding loans
held for sale, and 268.5% of non-performing loans at December 31, 2018. The comparable ratios
were 0.96% of period-end gross loans, excluding loans held for
sale, and 252.7% of non-performing loans at December 31, 2017. The changes in
non-performing assets and troubled debt restructurings at
December 31, 2018, compared to
December 31, 2017 and September 30, 2018, are shown below:
(Dollars in
thousands) (Unaudited)
|
December 31,
2018
|
|
December 31,
2017
|
|
% Change
|
|
September 30,
2018
|
|
% Change
|
Non-performing
assets
|
|
|
|
|
|
|
|
|
|
Accruing loans past
due 90 days or more
|
$
3,773
|
|
$
-
|
|
100
|
|
$
6,681
|
|
(44)
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
Construction
loans
|
4,872
|
|
8,185
|
|
(40)
|
|
4,922
|
|
(1)
|
Commercial mortgage
loans
|
10,611
|
|
19,820
|
|
(46)
|
|
13,172
|
|
(19)
|
Commercial
loans
|
18,805
|
|
14,296
|
|
32
|
|
17,118
|
|
10
|
Residential mortgage
loans
|
7,527
|
|
6,486
|
|
16
|
|
7,199
|
|
5
|
Total non-accrual
loans:
|
$
41,815
|
|
$
48,787
|
|
(14)
|
|
$
42,411
|
|
(1)
|
Total non-performing
loans
|
45,588
|
|
48,787
|
|
(7)
|
|
49,092
|
|
(7)
|
Other real estate
owned
|
12,674
|
|
9,442
|
|
34
|
|
8,741
|
|
45
|
Total non-performing
assets
|
$
58,262
|
|
$
58,229
|
|
0
|
|
$
57,833
|
|
1
|
Accruing
troubled debt restructurings (TDRs)
|
$
65,071
|
|
$
68,565
|
|
(5)
|
|
$
74,598
|
|
(13)
|
Non-accrual loans
held for sale
|
$
-
|
|
$
8,000
|
|
(100)
|
|
$
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
122,391
|
|
$
123,279
|
|
(1)
|
|
$
123,457
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
Total gross loans
outstanding, at period-end (1)
|
$
13,995,788
|
|
$
12,870,290
|
|
9
|
|
$
13,647,646
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses to non-performing loans, at period-end
(2)
|
268.47%
|
|
252.69%
|
|
|
|
251.48%
|
|
|
Allowance for loan
losses to gross loans, at period-end (1)
|
0.87%
|
|
0.96%
|
|
|
|
0.90%
|
|
|
|
(1) Excludes loans
held for sale at period-end.
|
(2) Excludes
non-accrual loans held for sale at period-end.
|
The ratio of non-performing assets, excluding non-accrual loans
held for sale, to total assets was 0.3% at December 31, 2018, compared to 0.4% at
December 31, 2017. Total
non-performing assets increased $33
thousand, or 0.1%, to $58.3
million at December 31, 2018,
compared to $58.2 million at
December 31, 2017, primarily due to
an increase of $3.2 million, or
34.2%, in other real estate owned, and an increase of $3.8 million, or 100.0%, in accruing loans past
due 90 days or more, offset by a decrease of $7.0 million, or 14.3%, in non-accrual
loans.
CAPITAL ADEQUACY REVIEW
At December 31, 2018, the
Company's Tier 1 risk-based capital ratio of 12.44%, total
risk-based capital ratio of 14.16%, and Tier 1 leverage capital
ratio of 10.83%, calculated under the Basel III capital rules,
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
8%, 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, 2017, the Company's Tier
1 risk-based capital ratio was 12.19%, total risk-based capital
ratio was 14.11%, and Tier 1 leverage capital ratio was 10.35%.
FULL YEAR REVIEW
Net income for the year ended December
31, 2018, was $272.2 million,
an increase of $96.2 million, or
54.7%, compared to net income of $176.0
million for the year ended December
31, 2017, which included $22.3
million of additional tax expense related to the revaluation
of the Company's deferred tax assets and a $2.6 million pretax write-down of low income
housing tax credit investments as a result of the enactment of the
Tax Cuts and Jobs Act. Diluted earnings per share for the
year ended December 31, 2018 was
$3.34 compared to $2.17 per share for the year ended December 31, 2017. The net interest margin
for the year ended December 31, 2018,
was 3.79% compared to 3.63% for the year ended December 31, 2017.
Return on average stockholders' equity was 13.19% and return on
average assets was 1.70% for the year ended December 31, 2018, compared to a return on
average stockholders' equity of 9.10% and a return on average
assets of 1.19% for the year ended December
31, 2017. The efficiency ratio for the year ended
December 31, 2018, was 44.1% compared
to 44.4% for the year ended December
31, 2017.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its fourth quarter and year end 2018 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 1-855-761-3186 and enter Conference ID 2655929. 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 40 branches in
California, 11 branches in
New York State, four in
Washington, three in Illinois, Chicago area, two in Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New
Jersey, one in Hong Kong,
and a representative office in Taipei, Beijing, and Shanghai. Cathay Bank's website is found at
www.cathaybank.com. Cathay General Bancorp's website is found at
www.cathaygeneralbancorp.com. Information set forth on such
websites is not incorporated into this press release.
FORWARD-LOOKING STATEMENTS
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," "continue,"
"could," "estimates," "expects," "hopes," "intends," "may,"
"plans," "projects," "predicts," "potential," "possible,"
"optimistic," "seeks," "shall," "should," "will," 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; possible additional provisions for loan losses
and charge-offs; credit risks of lending activities and
deterioration in asset or credit quality; extensive laws and
regulations and supervision that we are subject to including
potential future supervisory action by bank supervisory
authorities; increased costs of compliance and other risks
associated with changes in regulation including the implementation
of the Dodd-Frank Wall Street Reform and Consumer Protection Act;
higher capital requirements from the implementation of the Basel
III capital standards; compliance with the Bank Secrecy Act and
other money laundering statutes and regulations; potential goodwill
impairment; liquidity risk; fluctuations in interest rates; risks
associated with acquisitions and the expansion of our business into
new markets; inflation and deflation; real estate market conditions
and the value of real estate collateral; environmental liabilities;
our ability to compete with larger competitors; our ability to
retain key personnel; successful management of reputational risk;
natural disasters and geopolitical events; general economic or
business conditions in Asia, and
other regions where Cathay Bank has operations; failures,
interruptions, or security breaches of our information systems; our
ability to adapt our systems to technological changes; risk
management processes and strategies; adverse results in legal
proceedings; certain provisions in our charter and bylaws that may
affect acquisition of the Company; 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;
issuance of preferred stock; successfully raising additional
capital, if needed, and the resulting dilution of interests of
holders of our common stock; the soundness of other financial
institutions; our ability to consummate and realize the anticipated
benefits of our acquisitions; the risk that integration of business
operations following any acquisitions, will be materially delayed
or will be more costly or difficult than expected; and general
competitive, economic political, and market conditions and
fluctuations.
These and other factors are further described in Cathay General
Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2017 (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
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Year ended December
31,
|
(Dollars in
thousands, except per share data)
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
Net interest income
before provision for credit
losses
|
$
145,441
|
|
$
145,084
|
|
$
133,298
|
|
$565,899
|
|
$495,709
|
Reversal for credit
losses
|
|
-
|
|
(1,500)
|
|
-
|
|
(4,500)
|
|
(2,500)
|
Net interest income
after reversal for credit losses
|
|
145,441
|
|
146,584
|
|
133,298
|
|
570,399
|
|
498,209
|
Non-interest
income
|
|
10,436
|
|
7,835
|
|
10,215
|
|
31,348
|
|
36,297
|
Non-interest
expense
|
|
73,513
|
|
65,964
|
|
66,407
|
|
263,536
|
|
236,199
|
Income before income
tax expense
|
|
82,364
|
|
88,455
|
|
77,106
|
|
338,211
|
|
298,307
|
Income tax
expense
|
|
17,424
|
|
18,698
|
|
51,166
|
|
66,034
|
|
122,265
|
Net income
|
|
$
64,940
|
|
$
69,757
|
|
$
25,940
|
|
$272,177
|
|
176,042
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.80
|
|
$
0.86
|
|
$
0.32
|
|
$
3.35
|
|
$
2.19
|
Diluted
|
|
$
0.80
|
|
$
0.85
|
|
$
0.32
|
|
$
3.34
|
|
$
2.17
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
paid per common share
|
|
$
0.31
|
|
$
0.24
|
|
$
0.24
|
|
$
1.03
|
|
$
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.57%
|
|
1.72%
|
|
0.66%
|
|
1.70%
|
|
1.19%
|
Return on average
total stockholders' equity
|
|
12.13%
|
|
13.19%
|
|
5.18%
|
|
13.19%
|
|
9.10%
|
Efficiency
ratio
|
|
47.16%
|
|
43.14%
|
|
46.27%
|
|
44.13%
|
|
44.40%
|
Dividend payout
ratio
|
|
38.42%
|
|
28.00%
|
|
74.78%
|
|
30.66%
|
|
39.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ANALYSIS
(Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.76%
|
|
4.67%
|
|
4.27%
|
|
4.61%
|
|
4.22%
|
Total
interest-bearing liabilities
|
|
1.36%
|
|
1.15%
|
|
0.84%
|
|
1.12%
|
|
0.81%
|
Net interest
spread
|
|
3.40%
|
|
3.52%
|
|
3.43%
|
|
3.49%
|
|
3.41%
|
Net interest
margin
|
|
3.77%
|
|
3.83%
|
|
3.65%
|
|
3.79%
|
|
3.63%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
|
|
Tier 1 risk-based
capital ratio
|
|
12.44%
|
|
12.81%
|
|
12.19%
|
|
|
|
|
Total risk-based
capital ratio
|
|
14.16%
|
|
14.60%
|
|
14.11%
|
|
|
|
|
Tier 1 leverage
capital ratio
|
|
10.83%
|
|
11.03%
|
|
10.35%
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
|
CATHAY GENERAL
BANCORP
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(In thousands, except
share and per share data)
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
225,333
|
|
$
204,178
|
|
$
247,056
|
Short-term
investments and interest bearing deposits
|
|
374,957
|
|
377,839
|
|
292,745
|
Cash and cash
equivalents
|
|
600,290
|
|
582,017
|
|
539,801
|
Securities
available-for-sale (amortized cost of $1,267,731 at December 31,
2018, $1,320,843 at September 30, 2018 and $1,336,345 at December
31, 2017)
|
|
1,242,509
|
|
1,283,060
|
|
1,333,626
|
Loans held for
sale
|
|
-
|
|
-
|
|
8,000
|
Loans
|
|
13,995,788
|
|
13,647,646
|
|
12,870,290
|
Less: Allowance for loan losses
|
|
(122,391)
|
|
(123,457)
|
|
(123,279)
|
Unamortized deferred
loan fees, net
|
|
(1,565)
|
|
(2,086)
|
|
(3,245)
|
Loans, net
|
|
13,871,832
|
|
13,522,103
|
|
12,743,766
|
Equity
securities
|
|
25,098
|
|
23,522
|
|
-
|
Federal Home Loan
Bank stock
|
|
17,250
|
|
17,250
|
|
23,085
|
Other real estate
owned, net
|
|
12,674
|
|
8,741
|
|
9,442
|
Affordable housing
investments and alternative energy partnerships, net
|
|
284,614
|
|
295,857
|
|
272,871
|
Premises and
equipment, net
|
|
103,189
|
|
102,565
|
|
103,064
|
Customers' liability
on acceptances
|
|
22,709
|
|
10,454
|
|
13,482
|
Accrued interest
receivable
|
|
51,650
|
|
50,291
|
|
45,307
|
Goodwill
|
|
372,189
|
|
372,189
|
|
372,189
|
Other intangible
assets, net
|
|
7,194
|
|
7,391
|
|
8,062
|
Other
assets
|
|
174,562
|
|
186,282
|
|
167,491
|
|
|
|
|
|
|
|
Total
assets
|
|
$
16,785,760
|
|
$
16,461,722
|
|
$
15,640,186
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
|
$
2,857,443
|
|
$
2,957,881
|
|
$
2,783,127
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
NOW
deposits
|
|
1,365,763
|
|
1,409,463
|
|
1,410,519
|
Money market
deposits
|
|
2,027,404
|
|
2,134,097
|
|
2,248,271
|
Savings
deposits
|
|
738,656
|
|
747,814
|
|
857,199
|
Time
deposits
|
|
6,713,074
|
|
6,331,823
|
|
5,390,777
|
Total
deposits
|
|
13,702,340
|
|
13,581,078
|
|
12,689,893
|
|
|
|
|
|
|
|
Securities sold under
agreements to repurchase
|
|
-
|
|
-
|
|
100,000
|
Advances from the
Federal Home Loan Bank
|
|
530,000
|
|
315,000
|
|
430,000
|
Other borrowings for
affordable housing investments
|
|
17,298
|
|
17,332
|
|
17,481
|
Long-term
debt
|
|
189,448
|
|
194,136
|
|
194,136
|
Deferred payments
from acquisition
|
|
18,458
|
|
18,253
|
|
35,404
|
Acceptances
outstanding
|
|
22,709
|
|
10,454
|
|
13,482
|
Other
liabilities
|
|
183,349
|
|
208,694
|
|
186,486
|
Total
liabilities
|
|
14,663,602
|
|
14,344,947
|
|
13,666,882
|
Stockholders'
equity
|
|
2,122,158
|
|
2,116,775
|
|
1,973,304
|
Total liabilities and
equity
|
|
$
16,785,760
|
|
$
16,461,722
|
|
$
15,640,186
|
|
|
|
|
|
|
|
Book value per common
share
|
|
$
26.36
|
|
$
25.93
|
|
$
24.26
|
Number of common
shares outstanding
|
|
80,501,948
|
|
81,396,047
|
|
80,893,379
|
CATHAY GENERAL
BANCORP
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three months
ended
|
|
Year ended December
31,
|
|
December 31,
2018
|
September 30,
2018
|
December 31,
2017
|
|
2018
|
2017
|
|
(In thousands, except
share and per share data)
|
INTEREST AND
DIVIDEND INCOME
|
|
|
|
|
|
|
Loan receivable,
including loan fees
|
$
174,352
|
$
168,179
|
$
148,162
|
|
$
652,480
|
$
549,291
|
Investment
securities
|
7,391
|
7,546
|
5,965
|
|
28,603
|
20,531
|
Federal Home Loan
Bank stock
|
584
|
303
|
481
|
|
1,663
|
1,798
|
Federal funds sold
and securities purchased under agreements to resell
|
-
|
-
|
2
|
|
-
|
110
|
Deposits with
banks
|
1,542
|
838
|
1,281
|
|
5,209
|
4,421
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
183,869
|
176,866
|
155,891
|
|
687,955
|
576,151
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
Time
deposits
|
29,774
|
22,135
|
13,339
|
|
86,368
|
46,768
|
Other
deposits
|
5,610
|
5,474
|
4,831
|
|
20,503
|
19,076
|
Securities sold under
agreements to repurchase
|
-
|
124
|
761
|
|
1,446
|
4,250
|
Advances from Federal
Home Loan Bank
|
620
|
1,430
|
1,246
|
|
3,739
|
2,711
|
Long-term
debt
|
1,456
|
2,220
|
1,455
|
|
5,776
|
5,775
|
Deferred payments
from acquisition
|
947
|
399
|
960
|
|
4,037
|
1,861
|
Short-term
borrowings
|
21
|
|
1
|
|
187
|
1
|
|
|
|
|
|
|
|
Total interest
expense
|
38,428
|
31,782
|
22,593
|
|
122,056
|
80,442
|
|
|
|
|
|
|
|
Net interest income
before reversal for credit losses
|
145,441
|
145,084
|
133,298
|
|
565,899
|
495,709
|
Reversal for credit
losses
|
-
|
(1,500)
|
-
|
|
(4,500)
|
(2,500)
|
|
|
|
|
|
|
|
Net interest income
after reversal for credit losses
|
145,441
|
146,584
|
133,298
|
|
570,399
|
498,209
|
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
Net gains/(losses)
from equity securities
|
1,793
|
391
|
|
|
(2,787)
|
-
|
Securities
gains/(losses), net
|
36
|
(14)
|
1,445
|
|
22
|
1,006
|
Letters of credit
commissions
|
1,505
|
1,459
|
1,242
|
|
5,614
|
4,860
|
Depository service
fees
|
1,179
|
1,219
|
1,405
|
|
5,084
|
5,624
|
Gains from
acquisition
|
-
|
-
|
188
|
|
340
|
5,628
|
Other operating
income
|
5,923
|
4,780
|
5,935
|
|
23,075
|
19,179
|
|
|
|
|
|
|
|
Total non-interest
income
|
10,436
|
7,835
|
10,215
|
|
31,348
|
36,297
|
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
Salaries and employee
benefits
|
33,252
|
30,514
|
29,529
|
|
124,743
|
109,458
|
Occupancy
expense
|
4,883
|
5,186
|
5,696
|
|
20,691
|
20,429
|
Computer and
equipment expense
|
2,922
|
2,772
|
2,951
|
|
11,400
|
10,846
|
Professional services
expense
|
6,030
|
5,286
|
5,898
|
|
23,085
|
20,439
|
Data processing
service expense
|
2,988
|
3,080
|
3,344
|
|
12,438
|
11,190
|
FDIC and State
assessments
|
1,468
|
2,555
|
3,372
|
|
8,200
|
10,633
|
Marketing
expense
|
2,316
|
1,263
|
1,367
|
|
7,837
|
6,200
|
Other real estate
owned expense
|
(483)
|
(21)
|
(2,396)
|
|
(719)
|
(1,649)
|
Amortization of
investments in low income housing and alternative energy
partnerships
|
16,646
|
11,115
|
10,415
|
|
38,635
|
27,212
|
Amortization of core
deposit intangibles
|
172
|
190
|
304
|
|
876
|
930
|
Acquisition and
integration costs
|
23
|
179
|
844
|
|
2,106
|
4,121
|
Other operating
expense
|
3,296
|
3,845
|
5,083
|
|
14,244
|
16,390
|
|
|
|
|
|
|
|
Total non-interest
expense
|
73,513
|
65,964
|
66,407
|
|
263,536
|
236,199
|
|
|
|
|
|
|
|
Income before income
tax expense
|
82,364
|
88,455
|
77,106
|
|
338,211
|
298,307
|
Income tax
expense
|
17,424
|
18,698
|
51,166
|
|
66,034
|
122,265
|
Net income
|
$
64,940
|
$
69,757
|
$
25,940
|
|
272,177
|
176,042
|
|
|
|
|
|
|
|
Net
income per common share:
|
|
|
|
|
|
|
Basic
|
$
0.80
|
$
0.86
|
$
0.32
|
|
$
3.35
|
$
2.19
|
Diluted
|
$
0.80
|
$
0.85
|
$
0.32
|
|
$
3.34
|
$
2.17
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
$
0.31
|
$
0.24
|
$
0.24
|
|
$
1.03
|
$
0.87
|
Basic average common
shares outstanding
|
80,854,451
|
81,311,899
|
80,825,201
|
|
81,131,269
|
80,262,782
|
Diluted average
common shares outstanding
|
81,122,093
|
81,855,271
|
81,619,905
|
|
81,607,346
|
81,004,550
|
CATHAY GENERAL
BANCORP
|
AVERAGE BALANCES –
SELECTED CONSOLIDATED FINANCIAL INFORMATION
|
(Unaudited)
|
|
|
Three months
ended
|
(In
thousands)
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate
(1)
|
Loans
(1)
|
$13,737,560
|
5.04%
|
|
$13,434,018
|
4.97%
|
|
$12,735,456
|
4.62%
|
Taxable investment
securities
|
1,306,821
|
2.24%
|
|
1,399,031
|
2.14%
|
|
1,338,653
|
1.77%
|
FHLB stock
|
17,250
|
13.44%
|
|
17,250
|
6.95%
|
|
25,770
|
7.40%
|
Federal funds sold
and securities purchased under agreements to resell
|
-
|
-
|
|
-
|
-
|
|
1,978
|
0.54%
|
Deposits with
banks
|
262,525
|
2.33%
|
|
178,434
|
1.86%
|
|
387,725
|
1.31%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$15,324,156
|
4.76%
|
|
$15,028,733
|
4.67%
|
|
$14,489,582
|
4.27%
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
1,373,250
|
0.21%
|
|
$
1,396,436
|
0.20%
|
|
$
1,366,808
|
0.18%
|
Money market
deposits
|
2,113,257
|
0.85%
|
|
2,234,139
|
0.79%
|
|
2,361,128
|
0.62%
|
Savings
deposits
|
746,224
|
0.20%
|
|
780,412
|
0.18%
|
|
886,706
|
0.24%
|
Time
deposits
|
6,616,390
|
1.79%
|
|
5,997,268
|
1.46%
|
|
5,263,846
|
1.01%
|
Total
interest-bearing deposits
|
$10,849,121
|
1.29%
|
|
$10,408,255
|
1.05%
|
|
$
9,878,488
|
0.73%
|
Securities sold under
agreements to repurchase
|
-
|
0.00%
|
|
16,304
|
3.02%
|
|
100,000
|
3.02%
|
Other borrowed
funds
|
152,654
|
1.99%
|
|
307,298
|
2.36%
|
|
491,000
|
1.52%
|
Long-term
debt
|
194,085
|
4.62%
|
|
194,136
|
4.54%
|
|
158,266
|
4.45%
|
Total
interest-bearing liabilities
|
11,195,860
|
1.36%
|
|
10,925,993
|
1.15%
|
|
10,627,754
|
0.84%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
2,887,607
|
|
|
2,877,646
|
|
|
2,766,338
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$14,083,467
|
|
|
$13,803,639
|
|
|
$13,394,092
|
|
|
0
|
|
|
|
|
|
|
|
Total average
assets
|
$16,418,979
|
|
|
$16,134,349
|
|
|
$15,591,373
|
|
Total average
equity
|
$
2,124,418
|
|
|
$
2,097,786
|
|
|
$
1,984,890
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended,
|
|
|
|
(In
thousands)
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
|
|
Loans
(1)
|
$13,280,665
|
4.91%
|
|
$11,937,666
|
4.60%
|
|
|
|
Taxable investment
securities
|
1,344,964
|
2.13%
|
|
1,308,089
|
1.57%
|
|
|
|
FHLB stock
|
18,540
|
8.97%
|
|
23,208
|
7.75%
|
|
|
|
Federal funds sold
and securities purchased under agreements to resell
|
-
|
-
|
|
9,499
|
1.16%
|
|
|
|
Deposits with
banks
|
277,005
|
1.88%
|
|
366,674
|
1.21%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$14,921,174
|
4.61%
|
|
$13,645,136
|
4.22%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
1,389,326
|
0.20%
|
|
$
1,304,053
|
0.17%
|
|
|
|
Money market
deposits
|
2,200,847
|
0.74%
|
|
2,360,188
|
0.64%
|
|
|
|
Savings
deposits
|
791,982
|
0.20%
|
|
834,973
|
0.21%
|
|
|
|
Time
deposits
|
6,031,061
|
1.43%
|
|
4,947,051
|
0.95%
|
|
|
|
Total
interest-bearing deposits
|
$10,413,216
|
1.03%
|
|
$
9,446,265
|
0.70%
|
|
|
|
Securities sold under
agreements to repurchase
|
49,589
|
2.92%
|
|
136,849
|
3.11%
|
|
|
|
Other borrowed
funds
|
253,714
|
1.90%
|
|
256,423
|
1.66%
|
|
|
|
Long-term
debt
|
194,123
|
4.49%
|
|
128,999
|
4.73%
|
|
|
|
Total
interest-bearing liabilities
|
10,910,642
|
1.12%
|
|
9,968,536
|
0.81%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
2,819,712
|
|
|
2,599,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$13,730,354
|
|
|
$12,567,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
$16,004,322
|
|
|
$14,733,002
|
|
|
|
|
Total average
equity
|
$
2,063,400
|
|
|
$
1,935,059
|
|
|
|
|
|
(1) Yields and
interest earned include net loan fees. Non-accrual loans are
included in the average balance.
|
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SOURCE Cathay General Bancorp