LOS ANGELES, July 17, 2013 /PRNewswire/ -- Cathay General
Bancorp (the "Company"), (NASDAQ: CATY), the holding company for
Cathay Bank (the "Bank"), today announced results for the second
quarter of 2013.
FINANCIAL PERFORMANCE
|
Second
Quarter
|
|
2013
|
|
2012
|
Net income
|
$29.9
million
|
|
$29.9
million
|
Net income available
to common stockholders
|
$27.8
million
|
|
$25.7
million
|
Basic earnings per
common share
|
$0.35
|
|
$0.33
|
Diluted earnings per
common share
|
$0.35
|
|
$0.33
|
Return on average
assets
|
1.15%
|
|
1.13%
|
Return on average
total stockholders' equity
|
7.74%
|
|
7.72%
|
Efficiency
ratio
|
53.53%
|
|
53.21%
|
SECOND QUARTER HIGHLIGHTS
- Strong loan growth of $330
million, or 4.5%, to $7.69
billion at June 30, 2013, from
$7.36 billion at March 31, 2013.
- Conversion to a new core processing system on July 15, 2013.
"We are pleased with the loan growth of $330 million during the second quarter, which
came from increases in commercial, commercial real estate and
residential mortgage loans. We continue to work on redeeming,
subject to regulatory approval, the remaining preferred stock we
issued to the U.S. Treasury under the TARP Capital Purchase
Program," commented Dunson Cheng,
Chairman of the Board, Chief Executive Officer, and President of
the Company.
"We opened a new branch in Las Vegas,
Nevada, on June 17, 2013, and
expect to open our new West Covina,
California branch before the end of the year. We
continue to look for sites for new branches in our footprint to
better serve our customers," said Peter
Wu, Executive Vice Chairman and Chief Operating Officer.
"We want to thank our employees for their contributions to our
core system conversion. Over time, we expect that we will be able
to achieve improved customer service, increased product
functionality, as well as operational streamlining, with the new
core system," concluded Dunson
Cheng.
INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter
ended June 30, 2013, was $27.8 million, an increase of $2.1 million, or 8.2%, compared to a net income
available to common stockholders of $25.7
million for the same quarter a year ago. Diluted
earnings per share available to common stockholders for the quarter
ended June 30, 2013, was $0.35 compared to $0.33 for the same quarter a year ago due
primarily to increases in gains on sale of securities and decreases
in other real estate owned ("OREO") expenses offset by increases in
costs associated with debt redemption and the reversal for credit
losses taken in 2012.
Return on average stockholders' equity was 7.74% and return on
average assets was 1.15% for the quarter ended June 30, 2013, compared to a return on average
stockholders' equity of 7.72% and a return on average assets of
1.13% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$874,000, or 1.1%, to $80.0 million during the second quarter of 2013
compared to $79.1 million during the
same quarter a year ago. The increase was due primarily to
the decrease in interest expense from time deposits and securities
sold under agreements to repurchase offset by the decrease in
interest income from investment securities.
The net interest margin, on a fully taxable-equivalent basis,
was 3.30% for the second quarter of 2013, compared to 3.35% for the
first quarter of 2013, and 3.24% for the second quarter of
2012. The decrease in the interest expense on time deposits
and securities sold under agreements to repurchase offset by
decrease in earnings on investment securities and loans contributed
to the increase in the net interest margin compared to the second
quarter of 2012. The net interest margin for the first
quarter of 2013 was favorably impacted by a higher amount of
interest recognized on payoff of loans that had been on nonaccrual
status.
For the second quarter of 2013, the yield on average
interest-earning assets was 4.16%, on a fully taxable-equivalent
basis, the cost of funds on average interest-bearing liabilities
was 1.11%, and the cost of interest bearing deposits was
0.63%. In comparison, for the second quarter of 2012, the
yield on average interest-earning assets was 4.39%, on a fully
taxable-equivalent basis, the cost of funds on average
interest-bearing liabilities was 1.45%, and the cost of interest
bearing deposits was 0.80%. 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 11 basis points to 3.05% for the quarter ended
June 30, 2013, from 2.94% for the
same quarter a year ago, primarily for the reasons discussed
above.
Provision for credit losses
There was no provision for credit losses for the second quarter
of 2013 compared to a credit of $5.0
million in the second quarter of 2012. The provision
for credit losses was based on the review of the adequacy of the
allowance for loan losses at June 30,
2013. 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 June 30,
|
|
For the six months
ended June 30,
|
|
2013
|
|
|
2012
|
|
2013
|
|
2012
|
|
(In
thousands)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
Commercial
loans
|
$
1,690
|
|
|
$
2,133
|
|
$
4,380
|
|
$
7,092
|
Construction
loans- residential
|
-
|
|
|
251
|
|
-
|
|
391
|
Construction
loans- other
|
-
|
|
|
-
|
|
-
|
|
735
|
Real estate
loans (1)
|
1,189
|
|
|
1,983
|
|
2,319
|
|
10,910
|
Real estate-
land loans
|
1,048
|
|
|
25
|
|
1,318
|
|
99
|
Installment
and other loans
|
-
|
|
|
-
|
|
-
|
|
25
|
Total
charge-offs
|
3,927
|
|
|
4,392
|
|
8,017
|
|
19,252
|
Recoveries:
|
|
|
|
|
|
|
|
|
Commercial
loans
|
624
|
|
|
153
|
|
1,579
|
|
899
|
Construction
loans- residential
|
108
|
|
|
1,364
|
|
154
|
|
3,263
|
Construction
loans- other
|
833
|
|
|
227
|
|
866
|
|
1,885
|
Real estate
loans (1)
|
2,645
|
|
|
4,836
|
|
3,004
|
|
6,467
|
Real estate-
land loans
|
645
|
|
|
373
|
|
654
|
|
1,166
|
Installment
and other loans
|
11
|
|
|
-
|
|
11
|
|
3
|
Total recoveries
|
4,866
|
|
|
6,953
|
|
6,268
|
|
13,683
|
Net
(recoveries)/charge-offs
|
$
(939)
|
|
|
$
(2,561)
|
|
$
1,749
|
|
$
5,569
|
|
|
|
|
|
|
|
|
|
(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 $20.4
million for the second quarter of 2013, an increase of
$10.5 million, or 107%, compared to
$9.9 million for the second quarter
of 2012. The increase in non-interest income in the second quarter
of 2013 was primarily due to an increase of $9.8 million from gains on sale of securities and
an increase of $625,000 in
commissions from wealth management.
Non-interest expense
Non-interest expense increased $6.4
million, or 13.5%, to $53.7
million in the second quarter of 2013 compared to
$47.3 million in the same quarter a
year ago. The efficiency ratio was 53.53% in the second
quarter of 2013 compared to 53.21% for the same quarter a year
ago.
Prepayment penalties increased to $10.1
million in the second quarter of 2013 compared to zero in
the same quarter a year ago. The Company prepaid securities
sold under agreements to repurchase of $200.0 million in the second quarter of
2013. Salaries and employee benefits increased $1.5 million, or 7.4%, in the second quarter of
2013 compared to the same quarter a year ago primarily due to the
hiring of new employees as well as an increase in the number of
temporary employees assisting in the core system conversion.
Professional expense increased $1.7
million to $6.9 million in the
second quarter of 2013 compared to $5.2
million in the same quarter a year ago primarily due to
higher legal collection expenses of $738,000 and higher consulting expenses of
$1.1 million, of which $0.7 million related to the core system
conversion. Offsetting the above increases were a
$7.3 million decrease in OREO
expenses. Decreases in OREO writedowns of $5.6 million and OREO operating expenses of
$1.4 million contributed primarily to
the decrease in OREO expenses.
Income taxes
The effective tax rate for the second quarter of 2013 was 35.7%
compared to 35.8% in the second quarter of 2012. 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 were $7.69 billion at
June 30, 2013, an increase of
$265.2 million, or 3.6%, from
$7.43 billion at December 31, 2012, primarily due to an increase
of $141.1 million, or 3.7%, in
commercial mortgage loans, an increase of $83.7 million, or 3.9%, in commercial loans and
an increase of $78.5 million, or
6.8%, in residential mortgage loans offset by a decrease of
$27.3 million, or 15.1%, in
construction loans and a decrease of $11.0
million, or 5.7%, in equity lines. The changes in loan
balances and composition from December 31,
2012, are presented below:
Type of
Loans
|
June 30,
2013
|
|
December 31,
2012
|
|
%Change
|
|
(Dollars in
thousands)
|
|
|
Commercial
loans
|
$
2,210,761
|
|
$
2,127,107
|
|
4
|
Residential mortgage
loans
|
1,224,692
|
|
1,146,230
|
|
7
|
Commercial mortgage
loans
|
3,909,559
|
|
3,768,452
|
|
4
|
Equity
lines
|
182,855
|
|
193,852
|
|
(6)
|
Real estate
construction loans
|
153,663
|
|
180,950
|
|
(15)
|
Installment &
other loans
|
12,843
|
|
12,556
|
|
2
|
|
|
|
|
|
|
Gross
loans
|
$
7,694,373
|
|
$
7,429,147
|
|
4
|
|
|
|
|
|
|
Allowance for loan
losses
|
(179,733)
|
|
(183,322)
|
|
(2)
|
Unamortized deferred
loan fees
|
(11,685)
|
|
(10,238)
|
|
14
|
|
|
|
|
|
|
Total loans,
net
|
$
7,502,955
|
|
$
7,235,587
|
|
4
|
Total deposits were $7.71 billion
at June 30, 2013, an increase of
$327.3 million, or 4.4%, from
$7.38 billion at December 31, 2012, primarily due to a
$172.3 million, or 26.8%, increase in
time deposits under $100,000, a
$95.1 million, or 3.0%, increase in
time deposits of $100,000 or more, a
$77.7 million, or 6.1%, increase in
non-interest bearing demand deposits, and a $36.7 million, or 6.2%, increase in NOW deposits,
offset by a $65.5 million, or
5.5%, decrease in money market deposits. The changes in
deposit balances and composition from December 31, 2012, are presented below:
Deposits
|
June 30,
2013
|
|
December 31,
2012
|
|
% Change
|
|
(Dollars in
thousands)
|
|
|
Non-interest-bearing
demand deposits
|
$
1,347,134
|
|
$
1,269,455
|
|
6
|
NOW
deposits
|
629,858
|
|
593,133
|
|
6
|
Money market
deposits
|
1,121,290
|
|
1,186,771
|
|
(6)
|
Savings
deposits
|
484,704
|
|
473,805
|
|
2
|
Time deposits under
$100,000
|
816,539
|
|
644,191
|
|
27
|
Time deposits of
$100,000 or more
|
3,310,996
|
|
3,215,870
|
|
3
|
Total
deposits
|
$
7,710,521
|
|
$
7,383,225
|
|
4
|
ASSET QUALITY REVIEW
At June 30, 2013, total
non-accrual loans, excluding loans held for sale, were $95.6 million, a decrease of $27.2 million, or 22.2%, from $122.8 million at June 30,
2012, and a decrease of $8.3
million, or 8.0%, from $103.9
million at December 31,
2012.
The allowance for loan losses was $179.7
million and the allowance for off-balance sheet unfunded
credit commitments was $3.2 million
at June 30, 2013, 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 $182.9
million at June 30, 2013,
compared to $184.7 million at
December 31, 2012, a decrease of
$1.7 million, or 0.9%. The
allowance for credit losses represented 2.38% of period-end gross
loans and 191.3% of non-performing loans at June 30, 2013. The comparable ratios were
2.49% of period-end gross loans and 176.7% of non-performing loans
at December 31, 2012. The
changes in the Company's non-performing assets and troubled debt
restructurings at June 30, 2013,
compared to December 31, 2012, and to
June 30, 2012, are highlighted
below:
(Dollars in
thousands)
|
June 30,
2013
|
|
December 31,
2012
|
|
% Change
|
|
June 30,
2012
|
|
% Change
|
Non-performing
assets
|
|
|
|
|
|
|
|
|
|
Accruing loans past
due 90 days or more
|
$
-
|
|
$
630
|
|
(100)
|
|
$
746
|
|
(100)
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
Construction-
residential loans
|
3,691
|
|
2,984
|
|
24
|
|
4,828
|
|
(24)
|
Construction-
non-residential loans
|
25,763
|
|
33,315
|
|
(23)
|
|
7,118
|
|
262
|
Land
loans
|
11,534
|
|
6,053
|
|
91
|
|
7,410
|
|
56
|
Commercial
real estate loans, excluding land loans
|
30,326
|
|
29,651
|
|
2
|
|
63,220
|
|
(52)
|
Commercial
loans
|
14,029
|
|
19,958
|
|
(30)
|
|
25,716
|
|
(45)
|
Residential
mortgage loans
|
10,270
|
|
11,941
|
|
(14)
|
|
14,530
|
|
(29)
|
Total non-accrual
loans:
|
$
95,613
|
|
$
103,902
|
|
(8)
|
|
$
122,822
|
|
(22)
|
Total non-performing
loans
|
95,613
|
|
104,532
|
|
(9)
|
|
123,568
|
|
(23)
|
Other real
estate owned
|
49,141
|
|
46,384
|
|
6
|
|
74,463
|
|
(34)
|
Total non-performing
assets
|
$
144,754
|
|
$
150,916
|
|
(4)
|
|
$
198,031
|
|
(27)
|
Accruing
troubled debt restructurings (TDRs)
|
$
115,464
|
|
$
144,695
|
|
(20)
|
|
$
153,249
|
|
(25)
|
Non-accrual loans
held for sale
|
$
-
|
|
$
-
|
|
-
|
|
$
500
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
179,733
|
|
$
183,322
|
|
(2)
|
|
$
192,274
|
|
(7)
|
Allowance for
off-balance sheet credit commitments
|
3,203
|
|
1,362
|
|
135
|
|
1,505
|
|
113
|
Allowance for credit
losses
|
$
182,936
|
|
$
184,684
|
|
(1)
|
|
$
193,779
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
Total gross loans
outstanding, at period-end (1)
|
$
7,694,373
|
|
$
7,429,147
|
|
4
|
|
$
7,043,683
|
|
9
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses to non-performing loans, at period-end (2)
|
187.98%
|
|
175.37%
|
|
|
|
155.60%
|
|
|
Allowance for loan
losses to gross loans, at period-end (1)
|
2.34%
|
|
2.47%
|
|
|
|
2.73%
|
|
|
Allowance for credit
losses to gross loans, at period-end (1)
|
2.38%
|
|
2.49%
|
|
|
|
2.75%
|
|
|
(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
$115.5 million at June 30, 2013, compared to $144.7 million at December
31, 2012. These loans are classified as troubled debt
restructurings as a result of granting a concession to
borrowers. 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 to total assets was 1.4% at
June 30, 2013, compared to 1.4% at
December 31, 2012. Total
non-performing assets decreased $6.1
million, or 4.1%, to $144.8
million at June 30, 2013,
compared to $150.9 million at
December 31, 2012, primarily due to a
$8.3 million, or 8.0%, decrease in
non-accrual loans offset by a $2.8
million, or 5.9%, increase in OREO.
CAPITAL ADEQUACY REVIEW
At June 30, 2013, the Company's
Tier 1 risk-based capital ratio of 16.15%, total risk-based capital
ratio of 17.92%, and Tier 1 leverage capital ratio of 13.40%,
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, 2012, the Company's Tier
1 risk-based capital ratio was 17.36%, total risk-based capital
ratio was 19.12%, and Tier 1 leverage capital ratio was 13.82%.
YEAR-TO-DATE REVIEW
Net income attributable to common stockholders was $51.5 million, an increase of $1.0 million, or 1.9%, compared to net income
attributable to common stockholders of $50.5
million for the same period a year ago due primarily to
increases in gains on sale of securities, decreases in OREO
expenses, and increases in commissions from wealth management,
offset by decreases in the reversal for credit losses, increases in
prepayment penalties on the prepayment of securities sold under an
agreement to repurchase, increases in salaries and incentive
compensation expense, increases in consulting expense, and
increases in legal and collection expense. Diluted earnings
per share was $0.65 compared to
$0.64 per share for the same period a
year ago. The net interest margin for the six months ended
June 30, 2013, increased 5 basis
points to 3.33% compared to 3.28% for the same period a year
ago.
Return on average stockholders' equity was 7.47% and return on
average assets was 1.13% for the six months ended June 30, 2013, compared to a return on average
stockholders' equity of 7.67% and a return on average assets of
1.12% for the same period of 2012. The efficiency ratio for
the six months ended June 30, 2013,
was 52.64% compared to 53.35% for the same period a year ago.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its second quarter 2013 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
1-877-280-4960 and enter Participant Passcode 94354175. 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 Nevada, 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," "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; credit risks of lending activities and
deterioration in asset or credit quality; potential 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; 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
our information systems; our ability to adapt our systems to
technological changes, including successfully implementing our core
system conversion; adverse results in legal proceedings; 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, 2012 (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
June 30,
|
|
|
|
Six months ended June
30,
|
(Dollars in
thousands, except per share data)
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
before provision for credit
losses
|
|
$
79,994
|
|
$
79,120
|
|
1
|
|
$
160,126
|
|
$
159,771
|
0
|
Provision/(reversal)
for credit losses
|
|
-
|
|
(5,000)
|
|
(100)
|
|
-
|
|
(9,000)
|
(100)
|
Net interest income
after provision for credit losses
|
|
79,994
|
|
84,120
|
|
(5)
|
|
160,126
|
|
168,771
|
(5)
|
Non-interest
income
|
|
20,361
|
|
9,852
|
|
107
|
|
35,242
|
|
18,683
|
89
|
Non-interest
expense
|
|
53,716
|
|
47,342
|
|
13
|
|
102,844
|
|
95,213
|
8
|
Income before income
tax expense
|
|
46,639
|
|
46,630
|
|
0
|
|
92,524
|
|
92,241
|
0
|
Income tax
expense
|
|
16,573
|
|
16,619
|
|
(0)
|
|
33,460
|
|
33,166
|
1
|
Net income
|
|
30,066
|
|
30,011
|
|
0
|
|
59,064
|
|
59,075
|
(0)
|
Net income
attributable to noncontrolling interest
|
|
150
|
|
150
|
|
-
|
|
301
|
|
301
|
-
|
Net income
attributable to Cathay General Bancorp
|
|
$
29,916
|
|
$
29,861
|
|
0
|
|
$
58,763
|
|
$
58,774
|
(0)
|
Dividends on
preferred stock and noncash charge from repayment
|
(2,067)
|
|
(4,121)
|
|
(50)
|
|
(7,251)
|
|
(8,238)
|
(12)
|
Net income
attributable to common stockholders
|
|
$
27,849
|
|
$
25,740
|
|
8
|
|
$
51,512
|
|
$
50,536
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.35
|
|
$
0.33
|
|
6
|
|
$
0.65
|
|
$
0.64
|
2
|
Diluted
|
|
$
0.35
|
|
$
0.33
|
|
6
|
|
$
0.65
|
|
$
0.64
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
0.01
|
|
$
0.01
|
|
-
|
|
$
0.02
|
|
$
0.02
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.15%
|
|
1.13%
|
|
2
|
|
1.13%
|
|
1.12%
|
1
|
Return on average
total stockholders' equity
|
|
7.74%
|
|
7.72%
|
|
0
|
|
7.47%
|
|
7.67%
|
(3)
|
Efficiency
ratio
|
|
53.53%
|
|
53.21%
|
|
1
|
|
52.64%
|
|
53.35%
|
(1)
|
Dividend payout
ratio
|
|
2.64%
|
|
2.64%
|
|
-
|
|
2.68%
|
|
2.68%
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ANALYSIS
(Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.16%
|
|
4.39%
|
|
(5)
|
|
4.21%
|
|
4.47%
|
(6)
|
Total
interest-bearing liabilities
|
|
1.11%
|
|
1.45%
|
|
(23)
|
|
1.15%
|
|
1.48%
|
(22)
|
Net interest
spread
|
|
3.05%
|
|
2.94%
|
|
4
|
|
3.06%
|
|
2.99%
|
2
|
Net interest
margin
|
|
3.30%
|
|
3.24%
|
|
2
|
|
3.33%
|
|
3.28%
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
June 30,
2013
|
|
June 30,
2012
|
|
December 31,
2012
|
|
Well Capitalized
Requirements
|
|
Minimum Regulatory
Requirements
|
|
Tier 1 risk-based
capital ratio
|
|
16.15%
|
|
16.91%
|
|
17.36%
|
|
6.0%
|
|
4.0%
|
|
Total risk-based
capital ratio
|
|
17.92%
|
|
18.82%
|
|
19.12%
|
|
10.0%
|
|
8.0%
|
|
Tier 1 leverage
capital ratio
|
|
13.40%
|
|
13.30%
|
|
13.82%
|
|
5.0%
|
|
4.0%
|
|
|
|
.
|
|
|
|
|
|
|
|
|
|
CATHAY
GENERAL BANCORP
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(In thousands, except
share and per share data)
|
|
June 30,
2013
|
|
December 31,
2012
|
|
% change
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
133,003
|
|
$
144,909
|
|
(8)
|
Short-term
investments and interest bearing deposits
|
|
139,840
|
|
411,983
|
|
(66)
|
Securities
held-to-maturity (market value of $823,906 in 2012)
|
|
-
|
|
773,768
|
|
(100)
|
Securities
available-for-sale (amortized cost of $2,044,312 in 2013
and
|
|
|
|
|
|
|
$1,290,676 in 2012)
|
|
2,018,305
|
|
1,291,480
|
|
56
|
Trading
securities
|
|
4,816
|
|
4,703
|
|
2
|
Loans
|
|
7,694,373
|
|
7,429,147
|
|
4
|
Less: Allowance
for loan losses
|
|
(179,733)
|
|
(183,322)
|
|
(2)
|
Unamortized
deferred loan fees, net
|
|
(11,685)
|
|
(10,238)
|
|
14
|
Loans,
net
|
|
7,502,955
|
|
7,235,587
|
|
4
|
Federal Home Loan
Bank stock
|
|
32,918
|
|
41,272
|
|
(20)
|
Other real estate
owned, net
|
|
49,141
|
|
46,384
|
|
6
|
Affordable housing
investments, net
|
|
87,456
|
|
85,037
|
|
3
|
Premises and
equipment, net
|
|
102,611
|
|
102,613
|
|
(0)
|
Customers' liability
on acceptances
|
|
23,084
|
|
41,271
|
|
(44)
|
Accrued interest
receivable
|
|
26,374
|
|
26,015
|
|
1
|
Goodwill
|
|
316,340
|
|
316,340
|
|
-
|
Other intangible
assets, net
|
|
4,113
|
|
6,132
|
|
(33)
|
Other
assets
|
|
162,279
|
|
166,595
|
|
(3)
|
|
|
|
|
|
|
|
Total
assets
|
|
$
10,603,235
|
|
$
10,694,089
|
|
(1)
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
|
$
1,347,134
|
|
$
1,269,455
|
|
6
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
NOW
deposits
|
|
629,858
|
|
593,133
|
|
6
|
Money market
deposits
|
|
1,121,290
|
|
1,186,771
|
|
(6)
|
Savings
deposits
|
|
484,704
|
|
473,805
|
|
2
|
Time deposits under
$100,000
|
|
816,539
|
|
644,191
|
|
27
|
Time deposits of
$100,000 or more
|
|
3,310,996
|
|
3,215,870
|
|
3
|
Total
deposits
|
|
7,710,521
|
|
7,383,225
|
|
4
|
|
|
|
|
|
|
|
Securities sold under
agreements to repurchase
|
|
950,000
|
|
1,250,000
|
|
(24)
|
Advances from the
Federal Home Loan Bank
|
|
126,200
|
|
146,200
|
|
(14)
|
Other borrowings for
affordable housing investments
|
|
19,190
|
|
18,713
|
|
3
|
Long-term
debt
|
|
171,136
|
|
171,136
|
|
-
|
Acceptances
outstanding
|
|
23,084
|
|
41,271
|
|
(44)
|
Other
liabilities
|
|
63,682
|
|
54,040
|
|
18
|
Total
liabilities
|
|
9,063,813
|
|
9,064,585
|
|
(0)
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
-
|
Stockholders'
Equity
|
|
|
|
|
|
|
Preferred stock,
10,000,000 shares authorized, 129,000 issued
|
|
|
|
|
|
|
and outstanding at
June 30, 2013, and 258,000 issued
|
|
|
|
|
|
|
and outstanding at
December 31, 2012
|
|
128,178
|
|
254,580
|
|
(50)
|
Common stock, $0.01
par value, 100,000,000 shares authorized,
|
|
|
|
|
|
|
83,091,449 issued and
78,883,884 outstanding at June 30, 2013, and
|
|
|
|
|
|
|
82,985,853 issued and
78,778,288 outstanding at December 31, 2012
|
|
831
|
|
830
|
|
0
|
Additional
paid-in-capital
|
|
770,847
|
|
768,925
|
|
0
|
Accumulated other
comprehensive (loss)/income, net
|
|
(15,072)
|
|
465
|
|
(3,341)
|
Retained
earnings
|
|
771,927
|
|
721,993
|
|
7
|
Treasury stock, at
cost (4,207,565 shares at June 30, 2013,
|
|
|
|
|
|
|
and at December 31,
2012)
|
|
(125,736)
|
|
(125,736)
|
|
-
|
|
|
|
|
|
|
|
Total Cathay General
Bancorp stockholders' equity
|
|
1,530,975
|
|
1,621,057
|
|
(6)
|
Noncontrolling
interest
|
|
8,447
|
|
8,447
|
|
-
|
Total
equity
|
|
1,539,422
|
|
1,629,504
|
|
(6)
|
Total liabilities and
equity
|
|
$
10,603,235
|
|
$
10,694,089
|
|
(1)
|
|
|
|
|
|
|
|
Book value per common
share
|
|
$17.56
|
|
$17.12
|
|
3
|
Number of common
shares outstanding
|
|
78,883,884
|
|
78,778,288
|
|
0
|
CATHAY
GENERAL BANCORP
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
Three months ended
June 30,
|
|
Six months ended June
30,
|
|
|
2013
|
2012
|
|
2013
|
2012
|
|
|
(In thousands, except
share and per share data)
|
INTEREST AND
DIVIDEND INCOME
|
|
|
|
|
|
|
Loan receivable,
including loan fees
|
|
$
87,879
|
$
88,761
|
|
$
176,719
|
$
179,462
|
Investment
securities- taxable
|
|
12,332
|
17,166
|
|
24,118
|
34,889
|
Investment
securities- nontaxable
|
|
28
|
1,039
|
|
995
|
2,091
|
Federal Home Loan
Bank stock
|
|
342
|
67
|
|
592
|
133
|
Federal funds sold
and securities
|
|
|
|
|
|
|
purchased under
agreements to resell
|
|
-
|
11
|
|
-
|
16
|
Deposits with
banks
|
|
281
|
537
|
|
489
|
1,125
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
100,862
|
107,581
|
|
202,913
|
217,716
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
Time deposits of
$100,000 or more
|
|
6,822
|
8,642
|
|
13,579
|
18,182
|
Other
deposits
|
|
2,993
|
3,868
|
|
5,759
|
7,784
|
Securities sold under
agreements to repurchase
|
|
9,984
|
14,598
|
|
21,376
|
29,253
|
Advances from Federal
Home Loan Bank
|
|
145
|
69
|
|
225
|
122
|
Long-term
debt
|
|
924
|
1,284
|
|
1,848
|
2,604
|
|
|
|
|
|
|
|
Total interest
expense
|
|
20,868
|
28,461
|
|
42,787
|
57,945
|
|
|
|
|
|
|
|
Net interest income
before provision for credit losses
|
|
79,994
|
79,120
|
|
160,126
|
159,771
|
Provision/(reversal)
for credit losses
|
|
-
|
(5,000)
|
|
-
|
(9,000)
|
|
|
|
|
|
|
|
Net interest income
after provision for credit losses
|
|
79,994
|
84,120
|
|
160,126
|
168,771
|
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
Securities gains,
net
|
|
12,177
|
2,374
|
|
18,469
|
4,589
|
Letters of credit
commissions
|
|
1,449
|
1,619
|
|
2,910
|
3,145
|
Depository service
fees
|
|
1,485
|
1,383
|
|
2,959
|
2,772
|
Other operating
income
|
|
5,250
|
4,476
|
|
10,904
|
8,177
|
|
|
|
|
|
|
|
Total non-interest
income
|
|
20,361
|
9,852
|
|
35,242
|
18,683
|
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
21,588
|
20,097
|
|
44,441
|
39,975
|
Occupancy
expense
|
|
3,510
|
3,489
|
|
7,154
|
7,073
|
Computer and
equipment expense
|
|
2,366
|
2,391
|
|
5,042
|
4,854
|
Professional services
expense
|
|
6,854
|
5,209
|
|
12,671
|
9,951
|
FDIC and State
assessments
|
|
1,981
|
1,971
|
|
3,719
|
4,460
|
Marketing
expense
|
|
1,169
|
1,483
|
|
1,606
|
2,889
|
Other real estate
owned (income)/expense
|
|
(264)
|
7,061
|
|
359
|
11,754
|
Operations of
affordable housing investments
|
|
2,023
|
1,951
|
|
3,718
|
3,911
|
Amortization of core
deposit intangibles
|
|
1,338
|
1,404
|
|
2,734
|
2,861
|
Cost associated with
debt redemption
|
|
10,051
|
-
|
|
15,696
|
2,750
|
Other operating
expense
|
|
3,100
|
2,286
|
|
5,704
|
4,735
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
53,716
|
47,342
|
|
102,844
|
95,213
|
|
|
|
|
|
|
|
Income before income
tax expense
|
|
46,639
|
46,630
|
|
92,524
|
92,241
|
Income tax
expense
|
|
16,573
|
16,619
|
|
33,460
|
33,166
|
Net income
|
|
30,066
|
30,011
|
|
59,064
|
59,075
|
Less: net income
attributable to noncontrolling interest
|
|
150
|
150
|
|
301
|
301
|
Net income
attributable to Cathay General Bancorp
|
|
29,916
|
29,861
|
|
58,763
|
58,774
|
|
|
|
|
|
|
|
Dividends on
preferred stock and noncash charge from repayment
|
|
(2,067)
|
(4,121)
|
|
(7,251)
|
(8,238)
|
Net income
attributable to common stockholders
|
|
$
27,849
|
$
25,740
|
|
$
51,512
|
$
50,536
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
Basic
|
|
$
0.35
|
$
0.33
|
|
$
0.65
|
$
0.64
|
Diluted
|
|
$
0.35
|
$
0.33
|
|
$
0.65
|
$
0.64
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
0.01
|
$
0.01
|
|
$
0.02
|
$
0.02
|
Basic average common
shares outstanding
|
|
78,869,089
|
78,710,279
|
|
78,832,530
|
78,694,462
|
Diluted average
common shares outstanding
|
|
78,899,906
|
78,712,172
|
|
78,857,758
|
78,701,152
|
CATHAY
GENERAL BANCORP
AVERAGE BALANCES –
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
|
|
|
For the three months
ended,
|
|
(In
thousands)
|
June 30,
2013
|
|
June 30,
2012
|
|
March 31,
2013
|
|
|
|
|
|
|
|
|
|
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)
|
$
7,441,872
|
4.74%
|
|
$
6,938,638
|
5.15%
|
|
$
7,386,866
|
4.88%
|
Taxable investment
securities
|
2,050,533
|
2.41%
|
|
2,353,629
|
2.93%
|
|
2,006,091
|
2.38%
|
Tax-exempt investment
securities (2)
|
11,051
|
1.56%
|
|
131,085
|
4.91%
|
|
124,182
|
4.86%
|
FHLB stock
|
35,186
|
3.90%
|
|
49,197
|
0.54%
|
|
41,041
|
2.47%
|
Federal funds sold
and securities purchased
|
|
|
|
|
|
|
|
|
under agreements to
resell
|
-
|
-
|
|
30,989
|
0.14%
|
|
-
|
-
|
Deposits with
banks
|
191,255
|
0.59%
|
|
400,372
|
0.54%
|
|
196,615
|
0.43%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,729,897
|
4.16%
|
|
$
9,903,910
|
4.39%
|
|
$
9,754,795
|
4.26%
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
622,998
|
0.16%
|
|
$
493,800
|
0.15%
|
|
$
600,110
|
0.16%
|
Money market
deposits
|
1,137,452
|
0.56%
|
|
1,019,393
|
0.57%
|
|
1,164,125
|
0.55%
|
Savings
deposits
|
513,781
|
0.08%
|
|
446,147
|
0.09%
|
|
466,952
|
0.08%
|
Time
deposits
|
3,974,923
|
0.80%
|
|
4,312,129
|
1.01%
|
|
3,878,847
|
0.80%
|
Total
interest-bearing deposits
|
$
6,249,154
|
0.63%
|
|
$
6,271,469
|
0.80%
|
|
$
6,110,034
|
0.63%
|
Securities sold under
agreements to repurchase
|
1,042,308
|
3.84%
|
|
1,400,000
|
4.19%
|
|
1,197,222
|
3.86%
|
Other borrowed
funds
|
70,836
|
0.82%
|
|
39,368
|
0.70%
|
|
48,807
|
0.66%
|
Long-term
debt
|
171,136
|
2.17%
|
|
171,136
|
3.02%
|
|
171,136
|
2.19%
|
Total
interest-bearing liabilities
|
7,533,434
|
1.11%
|
|
7,881,973
|
1.45%
|
|
7,527,199
|
1.18%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
1,278,311
|
|
|
1,110,988
|
|
|
1,221,552
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$
8,811,745
|
|
|
$
8,992,961
|
|
|
$
8,748,751
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
$
10,442,747
|
|
|
$
10,636,617
|
|
|
$
10,464,464
|
|
Total average
equity
|
$
1,559,276
|
|
|
$
1,563,394
|
|
|
$
1,632,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months
ended,
|
|
|
|
(In
thousands)
|
June 30,
2013
|
|
June 30,
2012
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average Yield/Rate
(1) (2)
|
|
Average
Balance
|
Average Yield/Rate
(1) (2)
|
|
|
|
Loans and leases
(1)
|
$
7,414,521
|
4.81%
|
|
$
6,968,112
|
5.18%
|
|
|
|
Taxable investment
securities
|
2,028,435
|
2.40%
|
|
2,338,397
|
3.00%
|
|
|
|
Tax-exempt investment
securities (2)
|
67,304
|
4.59%
|
|
132,090
|
4.90%
|
|
|
|
FHLB stock
|
38,097
|
3.13%
|
|
50,912
|
0.52%
|
|
|
|
Federal funds sold
and securities purchased
|
|
|
|
|
|
|
|
|
under agreements to
resell
|
-
|
-
|
|
26,896
|
0.12%
|
|
|
|
Deposits with
banks
|
193,920
|
0.51%
|
|
333,765
|
0.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,742,277
|
4.21%
|
|
$
9,850,172
|
4.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
611,617
|
0.16%
|
|
$
479,861
|
0.15%
|
|
|
|
Money market
deposits
|
1,150,715
|
0.56%
|
|
997,751
|
0.57%
|
|
|
|
Savings
deposits
|
490,496
|
0.08%
|
|
435,172
|
0.08%
|
|
|
|
Time
deposits
|
3,927,151
|
0.80%
|
|
4,353,615
|
1.04%
|
|
|
|
Total
interest-bearing deposits
|
$
6,179,979
|
0.63%
|
|
$
6,266,399
|
0.83%
|
|
|
|
Securities sold under
agreements to repurchase
|
1,119,337
|
3.85%
|
|
1,400,000
|
4.20%
|
|
|
|
Other borrowed
funds
|
59,883
|
0.76%
|
|
34,743
|
0.71%
|
|
|
|
Long-term
debt
|
171,136
|
2.18%
|
|
171,136
|
3.06%
|
|
|
|
Total
interest-bearing liabilities
|
7,530,335
|
1.15%
|
|
7,872,278
|
1.48%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
1,250,088
|
|
|
1,091,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$
8,780,423
|
|
|
$
8,963,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
$
10,453,545
|
|
|
$
10,593,893
|
|
|
|
|
Total average
equity
|
$
1,595,821
|
|
|
$
1,549,184
|
|
|
|
|
(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