LOS ANGELES, Jan. 30, 2018 /PRNewswire/ -- Cathay General
Bancorp (the "Company", "we", "us", or "our" NASDAQ: CATY), the
holding company for Cathay Bank, today announced net income of
$25.9 million, or $0.32 per share, for the fourth quarter of 2017,
and net income of $176.0 million, or
$2.17 per share, for the year ended
December 31, 2017. Fourth
quarter and full-year 2017 results 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, both as a result of the
enactment of the Tax Cuts and Jobs Act. These two items had
the effect of reducing diluted EPS by $.29 per diluted share for the quarter and for
the year.
FINANCIAL
PERFORMANCE
|
|
|
Three months
ended
|
|
Year ended December
31,
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
2017
|
|
2016
|
Net income
|
$25.9
million
|
|
$49.7
million
|
|
$48.0
million
|
|
$176.0
million
|
|
$175.1
million
|
Basic earnings per
common share
|
$0.32
|
|
$0.62
|
|
$0.61
|
|
$2.19
|
|
$2.21
|
Diluted earnings per
common share
|
$0.32
|
|
$0.61
|
|
$0.60
|
|
$2.17
|
|
$2.19
|
Return on average
assets
|
0.66%
|
|
1.29%
|
|
1.37%
|
|
1.19%
|
|
1.31%
|
Return on average
total stockholders' equity
|
5.18%
|
|
9.77%
|
|
10.52%
|
|
9.10%
|
|
9.88%
|
Efficiency
ratio
|
46.27%
|
|
41.91%
|
|
45.39%
|
|
44.40%
|
|
49.79%
|
FULL YEAR HIGHLIGHTS
- Including the acquisition of Far East National Bank, (FENB)
total loans and deposits increased for the year by $1.7 billion to $12.9
billion and $1.0 billion to
$12.7 billion, respectively.
- Net interest margin for 2017 increased to 3.63% compared to
3.38% in 2016.
"Cathay made significant progress in 2017, both from organic
growth and from the acquisition of Far East National Bank.
Including the acquisition, we grew our loans by $1.7 billion, or 14.9%, for the year and by
$275 million or 8.7% annualized for
the fourth quarter and our total deposits by $1.0 billion, or 8.7%, for the year ended 2017.
Also, in November 2017, we
increased our dividend by 14% to $.24
per share from the $.21 per share
paid previously," commented Pin Tai, Chief Executive Officer and
President of the Company.
Further, he added "The systems conversion for Far East National
Bank onto Cathay's systems is scheduled for April 2018, which will permit completion of the
integration of our operations."
FOURTH QUARTER INCOME STATEMENT REVIEW
Net income for the quarter ended December
31, 2017, was $25.9 million, a
decrease of $22.1 million, or 46.0%,
compared to net income of $48.0
million for the same quarter a year ago. Fourth
quarter results 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 investments, both, as a result of the enactment of the Tax
Cuts and Jobs Act. These two items had the effect of reducing
diluted EPS by $.29 per diluted share
for the quarter and for the year. Diluted earnings per share
for the quarter ended December 31,
2017, was $0.32 compared to
$0.60 for the same quarter a year
ago.
Return on average stockholders' equity was 5.18% and return on
average assets was 0.66% for the quarter ended December 31, 2017, compared to a return on
average stockholders' equity of 10.52% and a return on average
assets of 1.37% for the same quarter a year
ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$23.4 million, or 21.3%, to
$133.3 million during the fourth
quarter of 2017 compared to $109.9
million during the same quarter a year ago. The
increase was due primarily to an increase in interest income from
organic loan growth and loans from the acquisition of FENB and a
decrease in interest expense from securities sold under agreements
to repurchase.
The net interest margin was 3.65% for the fourth quarter of 2017
compared to 3.36% for the fourth quarter of 2016 and 3.75% for the
third quarter of 2017. The decrease from the third quarter of
2017 was primarily the result of interest recoveries and prepayment
penalties of $2.5 million recorded in
the fourth quarter of 2017 compared to $5.6
million in the third quarter.
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%. In comparison, for the
fourth quarter of 2016, the yield on average interest-earning
assets was 4.00%, the cost of funds on average interest-bearing
liabilities was 0.86%, and the cost of average interest-bearing
deposits was 0.69%. The increase in the yield on average interest
earning assets was a result of higher interest rates. 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 3.43% for the quarter ended
December 31, 2017, compared to 3.14%
for the same quarter a year ago.
Provision/(reversal) for credit losses
There was no provision for credit losses recorded for the fourth
quarter of 2017 or 2016. The provision/(reversal) for credit
losses was based on a review of the appropriateness of the
allowance for loan losses at December 31,
2017. The following table summarizes the charge-offs
and recoveries for the periods indicated:
|
Three months
ended
|
|
Year ended December
31,
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
2017
|
|
2016
|
|
(In
thousands)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
Commercial
loans
|
$
1,503
|
|
$
80
|
|
$
920
|
|
$
3,313
|
|
$
12,955
|
Real estate
loans (1)
|
-
|
|
305
|
|
118
|
|
860
|
|
5,948
|
Total
charge-offs
|
1,503
|
|
385
|
|
1,038
|
|
4,173
|
|
18,903
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
Commercial
loans
|
2,001
|
|
575
|
|
424
|
|
3,402
|
|
4,144
|
Construction
loans
|
86
|
|
47
|
|
46
|
|
229
|
|
7,917
|
Real estate
loans(1)
|
1,160
|
|
5,489
|
|
1,592
|
|
7,355
|
|
2,495
|
Total recoveries
|
3,247
|
|
6,111
|
|
2,062
|
|
10,986
|
|
14,556
|
Net
(recoveries)/charge-offs
|
$
(1,744)
|
|
$
(5,726)
|
|
$
(1,024)
|
|
$
(6,813)
|
|
$
4,347
|
|
(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
$10.2 million for the fourth quarter
of 2017, an increase of $2.2 million,
or 28.3%, compared to $8.0 million
for the fourth quarter of 2016, primarily due to increases of
$2.3 million in other operating
income relating to venture capital investments, wealth management
commissions and other fees.
Non-interest expense
Non-interest expense increased $12.9
million, or 24.1%, to $66.4
million in the fourth quarter of 2017 compared to
$53.5 million in the same quarter a
year ago. The increase in non-interest expense in the fourth
quarter of 2017 was primarily due to a $5.8
million increase in amortization of investments in low
income housing and alternative energy partnerships expenses, a
$3.5 million increase in salaries and
employee benefits expense, a $1.2
million increase in professional services expense, and
offset by a $2.6 million decrease in
other real estate owned expense when compared to the same quarter a
year ago. The efficiency ratio was 46.3% in the fourth
quarter of 2017 compared to 45.4% for the same quarter a year ago.
Income taxes
The effective tax rate for the fourth quarter of 2017 was 66.4%
compared to 25.4% for the fourth quarter of 2016. On
December 22, 2017, the Tax Cuts and
Jobs Act, was enacted into law and as a result, during the fourth
quarter of 2017, the Company recorded $22.3
million of additional income tax expense related to
the revaluation of the Company's deferred tax assets.
These adjustments are management's best estimate based on the
information available as of this earnings release and are subject
to change as final tax calculations are completed in conjunction
with the filing of the Form 10-K.
ACQUISITION OF SINOPAC BANCORP
Under the terms of the Stock Purchase Agreement with Bank
SinoPac Co. Ltd, the Company purchased all of the issued and
outstanding share capital of SinoPac Bancorp for an aggregate
purchase price of $351.6 million plus
additional post closing payments based on the realization of
certain assets of FENB. The Company issued 926,192 shares of
common stock as consideration and the remainder of the
consideration is payable in cash. SinoPac Bancorp was merged
into Cathay General Bancorp on July 17,
2017 and subsequently, on October 27,
2017, FENB was merged into Cathay Bank. At the date of
acquisition, the total value of assets purchased was $1.2 billion including total gross loans of
$703.8 million, investments of
$114.3 million, and core deposit
intangibles of $6.1 million.
The total value of deposits purchased was $813.9 million. The acquisition resulted in
a gain of $5.6 million. The purchase
accounting adjustments are preliminary and subject to finalization
during the one-year measurement period from the date of the
acquisition.
BALANCE SHEET REVIEW
Gross loans, excluding loans held for sale, were $12.9 billion at December
31, 2017, an increase of $1.7
billion, or 14.9%, from $11.2
billion at December 31,
2016. The increase was primarily due to increases of
$699.5 million, or 12.1%, in
commercial mortgage loans, $618.0
million, or 25.3%, in residential mortgage loans,
$213.1 million, or 9.5%, in
commercial loans, and $130.7 million,
or 23.8%, in real estate construction loans. The loan
balances and composition at December 31,
2017, compared to September 30,
2017, and to December 31,
2016, are presented below:
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(In
thousands)
|
Commercial
loans
|
$
2,461,266
|
|
$
2,419,891
|
|
$
2,248,187
|
Residential mortgage
loans
|
3,062,050
|
|
2,922,537
|
|
2,444,048
|
Commercial mortgage
loans
|
6,484,700
|
|
6,377,047
|
|
5,785,248
|
Equity
lines
|
180,304
|
|
181,751
|
|
171,711
|
Real estate
construction loans
|
678,805
|
|
691,486
|
|
548,088
|
Installment &
other loans
|
5,170
|
|
4,722
|
|
3,993
|
|
|
|
|
|
|
Gross
loans
|
$
12,872,295
|
|
$
12,597,434
|
|
$
11,201,275
|
|
|
|
|
|
|
Allowance for loan
losses
|
(123,279)
|
|
(121,535)
|
|
(118,966)
|
Unamortized deferred
loan fees
|
(3,245)
|
|
(3,424)
|
|
(4,994)
|
|
|
|
|
|
|
Total loans,
net
|
$
12,745,771
|
|
$
12,472,475
|
|
$
11,077,315
|
Loans held for
sale
|
$
8,000
|
|
$
-
|
|
$
7,500
|
Total deposits were $12.7 billion
at December 31, 2017, an increase of
$1.0 billion, or 8.7%, from
$11.7 billion at December 31, 2016. The deposit balances and
composition at December 31, 2017,
compared to September 30, 2017, and
to December 31, 2016, are presented
below:
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(In
thousands)
|
Non-interest-bearing
demand deposits
|
$
2,783,127
|
|
$
2,730,006
|
|
$
2,478,107
|
NOW
deposits
|
1,410,519
|
|
1,379,100
|
|
1,230,445
|
Money market
deposits
|
2,248,271
|
|
2,370,724
|
|
2,198,938
|
Savings
deposits
|
857,199
|
|
925,312
|
|
719,949
|
Time
deposits
|
5,390,777
|
|
5,156,553
|
|
5,047,287
|
Total
deposits
|
$
12,689,893
|
|
$
12,561,695
|
|
$
11,674,726
|
ASSET QUALITY REVIEW
At December 31, 2017, total
non-accrual loans were $48.8 million,
a decrease of $16.6 million, or
25.3%, from $65.4 million at
September 30, 2017, and a decrease of
$895,000, or 1.8%, from $49.7 million at December
31, 2016.
The allowance for loan losses was $123.3
million and the allowance for off-balance sheet unfunded
credit commitments was $4.6 million
at December 31, 2017, which
represented the amount believed by management to be appropriate to
absorb credit losses inherent in the loan portfolio, including
unfunded commitments. The $123.3
million allowance for loan losses at December 31, 2017, increased $4.3 million, or 3.6%, from $119.0 million at December
31, 2016. The allowance for loan losses represented
0.96% of period-end gross loans, excluding loans held for sale, and
252.7% of non-performing loans at December
31, 2017. The comparable ratios were 1.06% of
period-end gross loans, excluding loans held for sale, and 239.5%
of non-performing loans at December
31, 2016. The changes in non-performing assets and
troubled debt restructurings at December 31,
2017, compared to December 31,
2016, and to September 30,
2017, are presented below:
(Dollars in
thousands)
|
December 31,
2017
|
|
December 31,
2016
|
|
% Change
|
|
September 30,
2017
|
|
% Change
|
Non-performing
assets
|
|
|
|
|
|
|
|
|
|
Accruing loans past
due 90 days or more
|
$
-
|
|
$
-
|
|
-
|
|
$
3,900
|
|
(100)
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
Construction
loans
|
8,185
|
|
5,458
|
|
50
|
|
14,267
|
|
(43)
|
Commercial
mortgage loans
|
19,820
|
|
20,078
|
|
(1)
|
|
28,379
|
|
(30)
|
Commercial
loans
|
14,296
|
|
15,710
|
|
(9)
|
|
15,942
|
|
(10)
|
Residential
mortgage loans
|
6,486
|
|
8,436
|
|
(23)
|
|
6,763
|
|
(4)
|
Total non-accrual
loans:
|
$
48,787
|
|
$
49,682
|
|
(2)
|
|
$
65,351
|
|
(25)
|
Total non-performing
loans
|
48,787
|
|
49,682
|
|
(2)
|
|
69,251
|
|
(30)
|
Other real
estate owned
|
9,442
|
|
20,070
|
|
(53)
|
|
18,115
|
|
(48)
|
Total non-performing
assets
|
$
58,229
|
|
$
69,752
|
|
(17)
|
|
$
87,366
|
|
(33)
|
Accruing
troubled debt restructurings (TDRs)
|
$
68,565
|
|
$
65,393
|
|
5
|
|
$
62,358
|
|
10
|
Non-accrual loans
held for sale
|
$
8,000
|
|
$
7,500
|
|
7
|
|
$
-
|
|
100
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
123,279
|
|
$
118,966
|
|
4
|
|
$
121,535
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Total gross loans
outstanding, at period-end (1)
|
$
12,872,295
|
|
$
11,201,275
|
|
15
|
|
$
12,597,434
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses to non-performing loans, at period-end
(2)
|
252.69%
|
|
239.45%
|
|
|
|
175.50%
|
|
|
Allowance for loan
losses to gross loans, at period-end (1)
|
0.96%
|
|
1.06%
|
|
|
|
0.96%
|
|
|
|
(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 0.4% at December 31, 2017, compared to 0.5% at
December 31, 2016. Total
non-performing assets decreased $11.6
million, or 16.6%, to $58.2
million at December 31, 2017,
compared to $69.8 million at
December 31, 2016, primarily due to a
decrease of $10.6 million, or 53.0%,
in other real estate owned and a decrease of $895,000, or 1.8%, in non-accrual
loans.
CAPITAL ADEQUACY REVIEW
At December 31, 2017, the
Company's common equity Tier 1 capital ratio of 12.14%, Tier 1
risk-based capital ratio of 12.14%, total risk-based capital ratio
of 14.07%, and Tier 1 leverage capital ratio of 10.31%, 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 common equity tier 1 capital ratio
equal to or greater than 6.5%, 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,
2016, the Company's common equity Tier 1 capital ratio was
12.84%, Tier 1 risk-based capital ratio was 13.85%, total
risk-based capital ratio was 14.97%, and Tier 1 leverage capital
ratio was 11.57%.
FULL YEAR REVIEW
Net income for the year ended December
31, 2017, was $176.0 million,
an increase of $943,000, or 0.5%,
compared to net income of $175.1
million for the year ended December
31, 2016. 2017 results were impacted by a $22.3 million of additional income 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 investments, both, as a result of the enactment
of the Tax Cuts and Jobs Act. These two items had the effect
of reducing diluted EPS by $.29 per
diluted share for the fourth quarter and for the year. Diluted
earnings per share for the year ended December 31, 2017 was $2.17 compared to $2.19 per share for year ended December 31, 2016. The net interest margin
for the year ended December 31, 2017,
was 3.63% compared to 3.38% for the year ended December 31, 2016.
Return on average stockholders' equity was 9.10% and return on
average assets was 1.19% for the year ended December 31, 2017, compared to a return on
average stockholders' equity of 9.88% and a return on average
assets of 1.31% for the year ended December
31, 2016. The efficiency ratio for the year ended
December 31, 2017, was 44.40%
compared to 49.79% for the year ended December 31, 2016.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its fourth quarter and year end 2017 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 2079959. 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 42 branches in
California, 12 branches in
New York State, three in the
Chicago, Illinois area, three in
Washington State, 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 and in Shanghai. Cathay Bank's website is found at
www.cathaybank.com.
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, including the recent acquisition of
SinoPac Bancorp and Far East National Bank; the risk that
integration of business operations following any acquisitions,
including the recent acquisition of SinoPac Bancorp and Far East
National Bank, will be materially delayed or will be more costly or
difficult than expected; the diversion of management's attention
from ongoing business operations and opportunities; the challenges
of integrating and retaining key employees; 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, 2016 (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,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
Net interest income
before provision for credit
losses
|
|
$
133,298
|
|
$
133,196
|
|
$
109,902
|
|
$
495,709
|
|
$
417,870
|
Reversal for credit
losses
|
|
-
|
|
-
|
|
-
|
|
(2,500)
|
|
(15,650)
|
Net interest income
after reversal for credit losses
|
|
133,298
|
|
133,196
|
|
109,902
|
|
498,209
|
|
433,520
|
Non-interest
income
|
|
10,215
|
|
12,961
|
|
7,961
|
|
36,297
|
|
33,370
|
Non-interest
expense
|
|
66,407
|
|
61,248
|
|
53,503
|
|
236,199
|
|
224,690
|
Income before income
tax expense
|
|
77,106
|
|
84,909
|
|
64,360
|
|
298,307
|
|
242,200
|
Income tax
expense
|
|
51,166
|
|
35,163
|
|
16,345
|
|
122,265
|
|
67,101
|
Net income
|
|
$
25,940
|
|
$
49,746
|
|
$
48,015
|
|
176,042
|
|
175,099
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.32
|
|
$
0.62
|
|
$
0.60
|
|
$
2.19
|
|
$
2.21
|
Diluted
|
|
$
0.32
|
|
$
0.61
|
|
$
0.60
|
|
$
2.17
|
|
$
2.19
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
paid per common share
|
|
$
0.24
|
|
$
0.21
|
|
$
0.21
|
|
$
0.87
|
|
$
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.66%
|
|
1.29%
|
|
1.37%
|
|
1.19%
|
|
1.31%
|
Return on average
total stockholders' equity
|
|
5.18%
|
|
9.77%
|
|
10.52%
|
|
9.10%
|
|
9.88%
|
Efficiency
ratio
|
|
46.27%
|
|
41.91%
|
|
45.39%
|
|
44.40%
|
|
49.79%
|
Dividend payout
ratio
|
|
74.78%
|
|
34.11%
|
|
34.79%
|
|
39.70%
|
|
33.85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ANALYSIS
(Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.27%
|
|
4.34%
|
|
4.00%
|
|
4.22%
|
|
4.04%
|
Total
interest-bearing liabilities
|
|
0.84%
|
|
0.81%
|
|
0.86%
|
|
0.81%
|
|
0.88%
|
Net interest
spread
|
|
3.43%
|
|
3.53%
|
|
3.14%
|
|
3.41%
|
|
3.16%
|
Net interest
margin
|
|
3.65%
|
|
3.75%
|
|
3.36%
|
|
3.63%
|
|
3.38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
|
|
|
Common Equity Tier 1
capital ratio
|
|
12.14%
|
|
12.22%
|
|
12.84%
|
|
|
|
|
Tier 1 risk-based
capital ratio
|
|
12.14%
|
|
12.22%
|
|
13.85%
|
|
|
|
|
Total risk-based
capital ratio
|
|
14.07%
|
|
14.15%
|
|
14.97%
|
|
|
|
|
Tier 1 leverage
capital ratio
|
|
10.31%
|
|
10.41%
|
|
11.57%
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
|
CATHAY GENERAL
BANCORP
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(In thousands, except
share and per share data)
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
247,056
|
|
$
167,886
|
|
$
218,017
|
Federal funds
sold
|
|
-
|
|
7,000
|
|
-
|
Cash and cash equivalents
|
|
247,056
|
|
174,886
|
|
218,017
|
Short-term
investments and interest bearing deposits
|
|
292,745
|
|
566,059
|
|
967,067
|
Securities
available-for-sale (amortized cost of $1,336,345 at December 31,
2017, $1,364,955 at September 30,
2017, and $1,317,012 at December 31, 2016)
|
|
1,333,626
|
|
1,368,487
|
|
1,314,345
|
Loans held for
sale
|
|
8,000
|
|
-
|
|
7,500
|
Loans
|
|
12,872,295
|
|
12,597,434
|
|
11,201,275
|
Less: Allowance
for loan losses
|
|
(123,279)
|
|
(121,535)
|
|
(118,966)
|
Unamortized
deferred loan fees, net
|
|
(3,245)
|
|
(3,424)
|
|
(4,994)
|
Loans,
net
|
|
12,745,771
|
|
12,472,475
|
|
11,077,315
|
Federal Home Loan
Bank and Federal Reserve Bank stock
|
|
23,085
|
|
30,681
|
|
17,250
|
Other real estate
owned, net
|
|
9,442
|
|
18,115
|
|
20,070
|
Affordable housing
investments and alternative energy partnerships, net
|
|
272,871
|
|
298,426
|
|
251,077
|
Premises and
equipment, net
|
|
103,064
|
|
107,954
|
|
105,607
|
Customers' liability
on acceptances
|
|
13,482
|
|
12,009
|
|
12,182
|
Accrued interest
receivable
|
|
45,307
|
|
42,190
|
|
37,299
|
Goodwill
|
|
372,189
|
|
372,189
|
|
372,189
|
Other intangible
assets, net
|
|
8,062
|
|
9,408
|
|
2,949
|
Other
assets
|
|
164,162
|
|
255,538
|
|
117,902
|
|
|
|
|
|
|
|
Total
assets
|
|
$
15,638,862
|
|
$
15,728,417
|
|
$
14,520,769
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
|
$
2,783,127
|
|
$
2,730,006
|
|
$
2,478,107
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
NOW
deposits
|
|
1,410,519
|
|
1,379,100
|
|
1,230,445
|
Money market
deposits
|
|
2,248,271
|
|
2,370,724
|
|
2,198,938
|
Savings
deposits
|
|
857,199
|
|
925,312
|
|
719,949
|
Time
deposits
|
|
5,390,777
|
|
5,156,553
|
|
5,047,287
|
Total
deposits
|
|
12,689,893
|
|
12,561,695
|
|
11,674,726
|
|
|
|
|
|
|
|
Securities sold under
agreements to repurchase
|
|
100,000
|
|
100,000
|
|
350,000
|
Advances from the
Federal Home Loan Bank
|
|
430,000
|
|
595,000
|
|
350,000
|
Other borrowings for
affordable housing investments
|
|
17,481
|
|
17,518
|
|
17,662
|
Long-term
debt
|
|
194,136
|
|
119,136
|
|
119,136
|
Acceptances
outstanding
|
|
13,482
|
|
12,009
|
|
12,182
|
Deferred payments
from acquisition
|
|
36,696
|
|
136,056
|
|
-
|
Other
liabilities
|
|
189,823
|
|
218,304
|
|
168,524
|
Total
liabilities
|
|
13,671,511
|
|
13,759,718
|
|
12,692,230
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
-
|
Stockholders'
Equity
|
|
|
|
|
|
|
Common stock, $0.01
par value, 100,000,000 shares authorized, 89,104,022 issued and 80,893,379 outstanding at
December 31, 2017, 89,027,259
issued and 80,816,616 outstanding at September 30, 2017, and
87,820,920 issued and 79,610,277
outstanding at December 31, 2016
|
|
891
|
|
890
|
|
878
|
Additional
paid-in-capital
|
|
926,923
|
|
932,521
|
|
895,480
|
Accumulated other
comprehensive income/(loss), net
|
|
(2,511)
|
|
(217)
|
|
(3,715)
|
Retained
earnings
|
|
1,281,637
|
|
1,275,094
|
|
1,175,485
|
Treasury stock, at
cost (8,210,643 shares at December 31, 2017, at September 30, 2017, and at December 31,
2016)
|
|
(239,589)
|
|
(239,589)
|
|
(239,589)
|
|
|
|
|
|
|
|
Total
equity
|
|
1,967,351
|
|
1,968,699
|
|
1,828,539
|
Total liabilities and
equity
|
|
$
15,638,862
|
|
$
15,728,417
|
|
$
14,520,769
|
|
|
|
|
|
|
|
Book value per common
share
|
|
$
24.18
|
|
$
24.24
|
|
$
22.80
|
Number of common
shares outstanding
|
|
80,893,379
|
|
80,816,616
|
|
79,610,277
|
CATHAY GENERAL
BANCORP
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Year ended December
31,
|
|
|
December 31,
2017
|
September 30,
2017
|
December 31,
2016
|
|
2017
|
2016
|
|
|
(In thousands, except
share and per share data)
|
INTEREST AND
DIVIDEND INCOME
|
|
|
|
|
|
|
|
Loan receivable,
including loan fees
|
|
$
148,162
|
$
146,383
|
$
124,570
|
|
$
549,291
|
$
473,782
|
Investment
securities
|
|
5,965
|
5,692
|
4,452
|
|
20,531
|
21,426
|
Federal Home Loan
Bank and Federal Reserve Bank stock
|
|
481
|
607
|
977
|
|
1,798
|
2,099
|
Federal funds sold
and securities purchased under
agreements to resell
|
|
2
|
108
|
-
|
|
110
|
-
|
Deposits with
banks
|
|
1,281
|
1,288
|
669
|
|
4,421
|
1,763
|
|
|
|
|
|
|
|
|
Total interest and
dividend income
|
|
155,891
|
154,078
|
130,668
|
|
576,151
|
499,070
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
Time
deposits
|
|
13,339
|
11,678
|
11,150
|
|
46,768
|
43,327
|
Other
deposits
|
|
4,831
|
5,101
|
4,311
|
|
19,076
|
16,094
|
Securities sold under
agreements to repurchase
|
|
761
|
874
|
3,633
|
|
4,250
|
15,329
|
Advances from Federal
Home Loan Bank
|
|
1,246
|
872
|
217
|
|
2,711
|
659
|
Long-term
debt
|
|
1,455
|
1,456
|
1,455
|
|
5,775
|
5,791
|
Deferred payments
from acquisition
|
|
960
|
901
|
-
|
|
1,861
|
-
|
Short-term
borrowings
|
|
1
|
-
|
-
|
|
1
|
-
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
22,593
|
20,882
|
20,766
|
|
80,442
|
81,200
|
|
|
|
|
|
|
|
|
Net interest income
before reversal for credit losses
|
|
133,298
|
133,196
|
109,902
|
|
495,709
|
417,870
|
Reversal for credit
losses
|
|
-
|
-
|
-
|
|
(2,500)
|
(15,650)
|
|
|
|
|
|
|
|
|
Net interest income
after reversal for credit losses
|
|
133,298
|
133,196
|
109,902
|
|
498,209
|
433,520
|
|
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
Securities
(losses)/gains, net
|
|
1,445
|
24
|
1,757
|
|
1,006
|
4,898
|
Letters of credit
commissions
|
|
1,242
|
1,302
|
1,241
|
|
4,860
|
4,939
|
Depository service
fees
|
|
1,405
|
1,407
|
1,369
|
|
5,664
|
5,478
|
Gain from
acquisition
|
|
188
|
5,440
|
-
|
|
5,628
|
-
|
Other operating
income
|
|
5,935
|
4,788
|
3,594
|
|
19,139
|
18,055
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
|
10,215
|
12,961
|
7,961
|
|
36,297
|
33,370
|
|
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
29,529
|
27,913
|
26,035
|
|
109,458
|
97,348
|
Occupancy
expense
|
|
5,696
|
5,312
|
4,728
|
|
20,429
|
18,315
|
Computer and
equipment expense
|
|
2,951
|
2,643
|
2,417
|
|
10,846
|
9,777
|
Professional services
expense
|
|
5,898
|
4,942
|
4,705
|
|
20,439
|
18,686
|
Data processing
service expense
|
|
3,344
|
2,918
|
2,401
|
|
11,190
|
8,957
|
FDIC and State
assessments
|
|
3,372
|
2,552
|
2,072
|
|
10,633
|
9,712
|
Marketing
expense
|
|
1,367
|
2,103
|
1,778
|
|
6,200
|
5,092
|
Other real estate
owned expense
|
|
(2,396)
|
369
|
244
|
|
(1,649)
|
856
|
Amortization of
investments in low income housing and alternative energy
partnerships
|
|
10,415
|
5,723
|
4,638
|
|
27,212
|
40,264
|
Amortization of core
deposit intangibles
|
|
304
|
281
|
172
|
|
930
|
689
|
Acquisition and
integration costs
|
|
844
|
3,277
|
-
|
|
4,121
|
-
|
Other operating
expense
|
|
5,083
|
3,215
|
4,313
|
|
16,390
|
14,994
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
66,407
|
61,248
|
53,503
|
|
236,199
|
224,690
|
|
|
|
|
|
|
|
|
Income before income
tax expense
|
|
77,106
|
84,909
|
64,360
|
|
298,307
|
242,200
|
Income tax
expense
|
|
51,166
|
35,163
|
16,345
|
|
122,265
|
67,101
|
Net income
|
|
$
25,940
|
$
49,746
|
$
48,015
|
|
176,042
|
175,099
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.32
|
$
0.62
|
$
0.61
|
|
$
2.19
|
$
2.21
|
Diluted
|
|
$
0.32
|
$
0.61
|
$
0.60
|
|
$
2.17
|
$
2.19
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
0.24
|
$
0.21
|
$
0.21
|
|
$
0.87
|
$
0.75
|
Basic average common
shares outstanding
|
|
80,825,201
|
80,665,398
|
79,171,401
|
|
80,262,782
|
79,153,762
|
Diluted average
common shares outstanding
|
|
81,619,905
|
81,404,854
|
80,007,934
|
|
81,004,550
|
79,929,262
|
CATHAY GENERAL
BANCORP
|
AVERAGE BALANCES –
SELECTED CONSOLIDATED FINANCIAL INFORMATION
|
(Unaudited)
|
|
|
Three months
ended
|
(In
thousands)
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate
(1)
|
Loans
(1)
|
$
12,735,456
|
4.62%
|
|
$
12,317,720
|
4.71%
|
|
$
11,080,313
|
4.47%
|
Investment
securities
|
1,338,653
|
1.77%
|
|
1,396,859
|
1.61%
|
|
1,339,848
|
1.32%
|
FHLB and FRB
stock
|
25,770
|
7.40%
|
|
32,369
|
7.44%
|
|
18,290
|
21.25%
|
Federal funds sold
and securities purchased under
agreements to resell
|
1,978
|
0.54%
|
|
35,707
|
1.20%
|
|
-
|
-
|
Deposits with
banks
|
387,725
|
1.31%
|
|
292,595
|
1.75%
|
|
560,896
|
0.47%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
14,489,582
|
4.27%
|
|
$
14,075,250
|
4.34%
|
|
$
12,999,347
|
4.00%
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
1,366,808
|
0.18%
|
|
$
1,349,508
|
0.17%
|
|
$
1,144,082
|
0.17%
|
Money market
deposits
|
2,361,128
|
0.62%
|
|
2,496,548
|
0.63%
|
|
2,176,268
|
0.65%
|
Savings
deposits
|
886,706
|
0.24%
|
|
942,452
|
0.24%
|
|
666,867
|
0.17%
|
Time
deposits
|
5,263,846
|
1.01%
|
|
4,939,189
|
0.94%
|
|
4,982,911
|
0.89%
|
Total
interest-bearing deposits
|
$
9,878,488
|
0.73%
|
|
$
9,727,697
|
0.68%
|
|
$
8,970,128
|
0.69%
|
Securities sold under
agreements to repurchase
|
100,000
|
3.02%
|
|
109,239
|
3.17%
|
|
350,000
|
4.13%
|
Other borrowed
funds
|
491,000
|
1.52%
|
|
324,581
|
2.17%
|
|
148,675
|
0.58%
|
Long-term
debt
|
158,266
|
4.45%
|
|
119,136
|
4.85%
|
|
119,136
|
4.86%
|
Total
interest-bearing liabilities
|
10,627,754
|
0.84%
|
|
10,280,653
|
0.81%
|
|
9,587,939
|
0.86%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
2,766,338
|
|
|
2,714,244
|
|
|
2,400,404
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$
13,394,092
|
|
|
$
12,994,897
|
|
|
$
11,988,343
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
$
15,591,373
|
|
|
$
15,354,123
|
|
|
$
13,992,093
|
|
Total average
equity
|
$
1,984,890
|
|
|
$
2,020,224
|
|
|
$
1,814,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended,
|
|
|
|
(In
thousands)
|
December 31,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets
|
Average
Balance
|
Average
Yield/Rate
(1)
|
|
Average
Balance
|
Average
Yield/Rate (1)
|
|
|
|
Loans
(1)
|
$
11,937,666
|
4.60%
|
|
$
10,622,160
|
4.46%
|
|
|
|
Investment
securities
|
1,308,089
|
1.57%
|
|
1,372,916
|
1.56%
|
|
|
|
FHLB and FRB
stock
|
23,208
|
7.75%
|
|
17,516
|
11.98%
|
|
|
|
Federal funds sold
and securities purchased under
agreements to resell
|
9,499
|
1.16%
|
|
-
|
-
|
|
|
|
Deposits with
banks
|
366,674
|
1.21%
|
|
345,136
|
0.51%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
13,645,136
|
4.22%
|
|
$
12,357,728
|
4.04%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
demand deposits
|
$
1,304,053
|
0.17%
|
|
$
1,046,046
|
0.17%
|
|
|
|
Money market
deposits
|
2,360,188
|
0.64%
|
|
2,059,823
|
0.65%
|
|
|
|
Savings
deposits
|
834,973
|
0.21%
|
|
636,422
|
0.16%
|
|
|
|
Time
deposits
|
4,947,051
|
0.95%
|
|
4,810,746
|
0.90%
|
|
|
|
Total
interest-bearing deposits
|
$
9,446,265
|
0.70%
|
|
$
8,553,037
|
0.69%
|
|
|
|
Securities sold under
agreements to repurchase
|
136,849
|
3.11%
|
|
381,967
|
4.01%
|
|
|
|
Other borrowed
funds
|
256,423
|
1.66%
|
|
126,720
|
0.52%
|
|
|
|
Long-term
debt
|
128,999
|
4.73%
|
|
119,136
|
4.86%
|
|
|
|
Total
interest-bearing liabilities
|
9,968,536
|
0.81%
|
|
9,180,860
|
0.88%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
2,599,109
|
|
|
2,199,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits and
other borrowed funds
|
$
12,567,645
|
|
|
$
11,380,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
$
14,733,002
|
|
|
$
13,331,148
|
|
|
|
|
Total average
equity
|
$
1,935,059
|
|
|
$
1,772,017
|
|
|
|
|
|
(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