LOS ANGELES, July 29 /PRNewswire-FirstCall/ -- Cathay General
Bancorp (the "Company"), (NASDAQ:CATY), the holding company for
Cathay Bank (the "Bank"), today announced results for the second
quarter of 2009. FINANCIAL PERFORMANCE Second Quarter 2009 Second
Quarter 2008 ---------------------------------------------
------------------- Net (loss)/income ($11.4) million $19.2 million
Net (loss)/income ($15.5) million $19.2 million available to common
stockholders (Loss)/basic earnings per share ($0.31) $0.39 (Loss)/
diluted earnings per share ($0.31) $0.39 Return on average assets
-0.40% 0.73% Return on average total stockholders' equity -3.55%
7.66% Efficiency ratio 54.87% 41.34% SECOND QUARTER HIGHLIGHTS --
Second quarter net loss was $11.4 million compared to a net income
of $10.2 million for the first quarter of 2009, and compared to net
income of $19.2 million in the same quarter a year ago. Second
quarter net loss to common stockholders was $15.5 million, which
was after the deduction of $4.1 million for dividends on preferred
stock, compared to net income available to common stockholders of
$6.2 million for the first quarter of 2009. -- Loss per share was
$0.31 for the second quarter, compared to diluted earnings per
share of $0.12 in the first quarter of 2009, and compared to
diluted earnings per share of $0.39 in the same quarter a year ago.
-- Total allowance for credit losses to total loans at June 30,
2009 strengthened to 2.10% from 1.87% at March 31, 2009, with a
provision for credit losses of $70.2 million compared to $47.0
million in the first quarter of 2009, and compared to $20.5 million
the same quarter a year ago. -- Capital ratios remain strong with a
total capital ratio of 14.23% which is substantially higher than
the 10% total capital ratio for well-capitalized status. -- For the
first half of 2009, total deposits excluding brokered deposits
increased by $919.2 million, or a 31.4% annualized growth. --
Results indicated the Company and the Bank would remain well
capitalized for regulatory purposes under stress test economic
scenario. "Our second quarter results continue to be significantly
impacted by the continuing recession and the ongoing slowdown in
residential housing. We recorded a provision for credit losses
during the second quarter of $70.2 million which increased our
allowance for credit losses to 2.10% of total loans," commented
Dunson Cheng, Chairman of the Board, Chief Executive Officer, and
President of the Company. "During the first six months of the year,
our total deposits grew strongly by $543 million, or 8.0%, net of a
$376 million reduction of brokered deposits, which helped us to
improve our net loan to deposit ratio to 96.2% at June 30, 2009. We
are especially pleased that our core deposits increased $425
million to $3.1 billion, or a 32.1% annualized growth," said Peter
Wu, Executive Vice Chairman and Chief Operating Officer. "Our focus
continues to be managing through this challenging credit cycle,
resolving problem assets on a case by case basis without resorting
to bulk sales and maintaining strong liquidity. So far in the third
quarter, we have sold or entered into contracts to sell $25 million
of foreclosed real estate at a small gain to our June 30 carrying
value. With the improving investment sentiment, we expect an
increase in the pace of sales during the remainder of the third
quarter as we continue to resolve problem assets," concluded Dunson
Cheng. CAPITAL ADEQUACY AND RESULTS OF CATHAY STRESS TEST At June
30, 2009, the Tier 1 risk-based capital ratio of 12.39%, total
risk-based capital ratio of 14.23%, and Tier 1 leverage capital
ratio of 9.48%, continue to place the Company in the "well
capitalized" category, 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%. During the
second quarter, management followed the tenets of the Supervisory
Capital Assessment Program (SCAP) and applied the "more adverse"
stress test guidelines to our loan portfolio. The Company was not
one of the banks subject to the SCAP stress test; however,
management believed that it was prudent risk management to conduct
a similar test on our loan portfolio. The loss assumptions we used
in our stress test were similar to the indicative loss rates
disclosed in the SCAP white paper and simulates an economic
downturn scenario that is more severe than what we are currently
experiencing. The results of our stress test indicated that the
Company and the Bank would remain well capitalized for regulatory
purposes under the SCAP's economic scenario. INCOME STATEMENT
REVIEW Net interest income before provision for credit losses Net
interest income before provision for credit losses decreased to
$66.0 million during the second quarter of 2009, a decline of $6.1
million, or 8.5%, compared to the $72.1 million during the same
quarter a year ago. The decrease was due primarily to the larger
decline in earning asset yields compared to rates paid for
securities sold under agreements to repurchase and other
borrowings. The net interest margin, on a fully taxable-equivalent
basis, was 2.49% for the second quarter of 2009. The net interest
margin decreased 20 basis points from 2.69% in the first quarter of
2009, of which 14 basis points was due to higher levels of
nonaccrual loans, and decreased 45 basis points from 2.94% in the
second quarter of 2008. The decrease in net interest income from
the prior year primarily resulted from increases in non-accrual
loans and the increase in the borrowing rate on our long term
repurchase agreements and other borrowed funds compared to the
decreases in the prime rate. The majority of our variable rate
loans contain interest rate floors, which help limit the impact of
the recent decreases of the prime interest rate. For the second
quarter of 2009, the yield on average interest-earning assets was
4.88% on a fully taxable-equivalent basis, the cost of funds on
average interest-bearing liabilities equaled 2.75%, and the cost of
interest bearing deposits was 2.18%. In comparison, for the second
quarter of 2008, the yield on average interest-earning assets was
5.86%, cost of funds on average interest-bearing liabilities
equaled 3.34%, and the cost of interest bearing deposits was 3.03%.
The interest spread, defined as the difference between the yield on
average interest-earning assets and the cost of funds on average
interest-bearing liabilities, decreased 39 basis points to 2.13%
for the second quarter ended June 30, 2009, from 2.52% for the same
quarter a year ago, primarily due to the reasons discussed above.
The cost of deposits, including demand deposits, decreased 32 basis
points to 1.95% in the second quarter of 2009 compared to 2.27% in
the first quarter of 2009 due primarily to growth in core deposits
and decreased 72 basis points from 2.67% in the same quarter a year
ago due partly to decrease in market rates and partly to growth in
core deposits. Provision for credit losses The provision for credit
losses was $70.2 million for the second quarter of 2009 compared to
$47.0 million for the first quarter of 2009 and compared to $20.5
million in the second quarter of 2008. During the second quarter,
the Company's provision for credit losses included re-estimation of
certain of the Company's loss reserve factors based on a newly
updated migration analysis reflecting more recent loan experience.
The provision for credit losses was based on the review of the
adequacy of the allowance for loan losses at June 30, 2009. The
provision for credit losses represents the charge against 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. The following table
summarizes the charge-offs and recoveries for the periods as
indicated: For the three months ended For the six months ended June
30, June 30, -----------------------------------------------
------------------------ (In thousands) 2009 2008 2009 2008
---------------------------------- ----------- -----------
----------- Charge-offs: Commercial loans $11,087 $1,870 $22,165
$2,121 Construction loans- residential 27,893 879 44,070 5,009
Construction loans- other 2,884 - 10,107 - Real estate loans 13,095
207 14,456 382 Real estate - land loans 1,357 - 3,734 339
Installment and other loans 4 - 4 - ------- ------ ------- ------
Total charge-offs 56,320 2,956 94,536 7,851 ------- ------ -------
------ Recoveries: Commercial loans 106 380 304 567 Construction
loans- residential 174 83 174 83 Construction loans- other 1 - 1 -
Real estate- land loans 1 - 1 - Installment and other loans 17 8 17
12 ------- ------ ------- ------ Total recoveries 299 471 497 662
------- ------ ------- ------ Net Charge-offs $56,021 $2,485
$94,039 $7,189 ======= ====== ======= ====== Total charge-offs of
$56.3 million for the second quarter of 2009 included $18.7 million
of charge-offs on fourteen multi-family residential construction
loans, $9.2 million of charge-offs on four single family
residential construction loans, $2.9 million of charge-offs on
commercial property construction loans, $10.6 million of
charge-offs on commercial real estate loans, $11.1 million on
commercial loans, $2.4 million charge-offs on residential mortgage
loans, and $1.4 million of charge-offs on land loans. Net loan
charge-offs increased from $38.0 million in the first quarter of
2009 to $56.0 million in the second quarter of 2009 and compared to
$2.5 million in the second quarter of last year as a result of the
continuing weak economy. 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 $32.4 million for the second quarter of 2009, an increase of
$23.2 million compared to the non-interest income of $9.2 million
for the second quarter of 2008. The increase in non-interest income
was primarily due to increases in net gains on sale of
available-for-sale securities of $24.6 million. Offsetting the
increase were primarily a $1.2 million decrease in gains from
foreign currency and exchange transactions and a $343,000 decrease
in letters of credit commissions. Non-interest expense Non-interest
expense increased $20.4 million, or 60.7%, to $54.0 million in the
second quarter of 2009 compared to $33.6 million in the same
quarter a year ago. The efficiency ratio was 54.87% in the second
quarter of 2009 compared to 41.34% for the same period a year ago
due to increases in other real estate owned ("OREO") expense and
Federal Deposit Insurance Corporation ("FDIC") and State
assessments. OREO expense increased $13.2 million to $13.9 million
in the second quarter of 2009 from $641,000 in the same quarter a
year ago primarily due to a $13.9 million provision for OREO
write-down and a $591,000 increase in OREO expense offset by a $1.1
million gain on the sale of OREO. FDIC and State assessments
increased $6.6 million to $8.1 million in the second quarter of
2009 from $1.5 million in the same quarter a year ago of which $5.5
million was from the special assessment based on total assets as of
June 30, 2009. Occupancy expense increased $764,000 primarily due
to increases in depreciation expense of $770,000 primarily related
to our new administrative offices at 9650 Flair Drive, El Monte
which opened in January 2009, which were partially offset by lower
rental expense of $218,000. Professional service expense increased
$265,000, or 8.6%, primarily due to increases in legal expenses and
collection expenses. Expense from operations of affordable housing
investments increased $454,000 to $2.2 million compared to $1.7
million in the same quarter a year ago as a result of additional
investments in affordable housing projects. Other operating
expenses increased $880,000 primarily due to a $983,000 charge for
closure of two branches. Offsetting the above described increases
were decreases of $1.3 million in salaries and employee benefits
and decreases of $392,000 in marketing expense. Salaries and
employee benefits decreased primarily due to a $650,000 decrease in
bonus accruals and a $492,000 decrease in option compensation
expense. Income taxes The tax benefit for the second quarter of
2009 resulted from the pretax loss for the quarter and the
utilization of low income housing tax credits. BALANCE SHEET REVIEW
Total assets decreased by $173.6 million, or 1.5%, to $11.4 billion
at June 30, 2009, from $11.6 billion at December 31, 2008. The
changes in the loan composition from December 31, 2008, are
presented below: June 30, December 31, Type of Loans: 2009 2008 %
Change ------------------------------------------- ------------
-------- (Dollars in thousands) Commercial $1,467,338 $1,620,438
(9) Residential mortgage 640,381 622,741 3 Commercial mortgage
4,126,753 4,132,850 (0) Equity lines 184,108 168,756 9 Real estate
construction 825,836 913,168 (10) Installment 7,364 11,340 (35)
Other 2,484 3,075 (19) ---------- ---------- Gross loans and leases
$7,254,264 $7,472,368 (3) Allowance for loan losses (147,687)
(122,093) 21 Unamortized deferred loan fees (9,495) (10,094) (6)
---------- ---------- Total loans and leases, net $7,097,082
$7,340,181 (3) ========== ========== Total deposits were $7.4
billion at June 30, 2009, an increase of $543.3 million, or 8.0%,
from $6.8 billion at December 31, 2008, primarily due to increases
of $258.0 million, or 39.1%, in money market accounts and increases
of $494.6 million, or 15.3%, in time deposits of $100,000 or more
offset by decreases of $287.8 million, or 17.5%, in time deposits
under $100,000. Brokered deposits which are reported in time
deposits under $100,000 declined $375.9 million to $613.4 million
at June 30, 2009 from $989.3 million at December 31, 2008. The
changes in the deposit composition from December 31, 2008, are
presented below: June 30, December 31, Deposits 2009 2008 % Change
---------------------------------------------- ------------
-------- (Dollars in thousands) Non-interest-bearing demand
$764,553 $730,433 5 NOW 286,893 257,234 12 Money market 917,472
659,454 39 Savings 330,981 316,263 5 Time deposits under $100,000
1,356,647 1,644,407 (17) Time deposits of $100,000 or more
3,723,509 3,228,945 15 ---------- ---------- Total deposits
$7,380,055 $6,836,736 8 ========== ========== ASSET QUALITY REVIEW
At June 30, 2009, total non-accrual loans increased to $383.1
million, an increase of $161.9 million, or 73.2%, from $221.2
million at March 31, 2009 and an increase of $201.9 million, or
111%, from $181.2 million at December 31, 2008. A summary of
non-accrual loans by collateral type is shown below: Collateral No.
of Other No. of No. of Type California Borrowers States Borrowers
Total Borrowers ----------------------------------- ------
--------- ----- --------- (Dollars in thousands except no. of
borrowers) Commercial real estate $106,327 19 $26,834 31 $133,161
50 Commercial 27,951 21 6,893 9 34,844 30 Construction- residential
133,748 25 20,600 8 154,348 33 Construction- non-residential 22,962
6 835 1 23,797 7 Residential mortgage 7,198 22 2,671 8 9,869 30
Land 17,145 13 9,915 5 27,060 18 -------- --- ------- -- --------
--- Total $315,331 106 $67,748 62 $383,079 168 ======== === =======
== ======== === Included in nonaccrual commercial real estate loans
is a loan with an outstanding balance of $47.6 million to a
borrower who filed for bankruptcy in March 2009. Included in
nonaccrual residential construction loans are six residential
condominium construction loans totaling $64.5 million where the
borrower continues to be involved in the marketing of the units or
in the completion of the project. At June 30, 2009, total
residential construction loans were $372.2 million of which $8.8
million were in the Central Valley in California and $31.4 million
were in San Bernardino and Riverside counties in California.
Residential construction loans of $7.5 million in the Central
Valley and $19.9 million in San Bernardino and Riverside counties
were on non-accrual status as of June 30, 2009. At June 30, 2009,
total land loans were $210.0 million of which $31.2 million were in
San Bernardino, Riverside, and Imperial counties and $2.8 million
were in the Central Valley. Land loans of $2.8 million in the
Central Valley and a land loan of 0.4 million in Riverside were on
non-accrual status as of June 30, 2009. A land loan of $22.2
million in Nevada was restructured during the second quarter to a
below market interest rate and is included in the troubled debt
restructured loans total. At June 30, 2009, net carrying value of
other real estate owned increased $9.8 million, or 16.1%, to $70.8
million from $61.0 million at December 31, 2008. At June 30, 2009,
$37.7 million of OREO was located in California, $26.8 million of
OREO was located in Texas, $4.0 million of OREO was in Nevada, and
$2.4 million in all other states. Non-performing assets to total
assets was 4.2% at June 30, 2009, compared to 2.2% at December 31,
2008. Total non-performing assets increased $221.9 million, or
88.1%, to $473.7 million at June 30, 2009, compared with $251.8
million at December 31, 2008, primarily due to a $201.9 million
increase in non-accrual loans. The allowance for loan losses was
$147.7 million and the allowance for off-balance sheet unfunded
credit commitments was $4.9 million at June 30, 2009, and
represented the amount that the Company believes to be sufficient
to absorb credit losses inherent in the Company's loan portfolio.
The allowance for credit losses, the sum of allowance for loan
losses and for off-balance sheet unfunded credit commitments, was
$152.6 million at June 30, 2009, compared to $129.4 million at
December 31, 2008, an increase of $23.2 million, or 17.9%. The
allowance for credit losses represented 2.10% of period-end gross
loans and 38.1% of non-performing loans at June 30, 2009. The
comparable ratios were 1.73% of period-end gross loans and 68.9% of
non-performing loans at December 31, 2008. Results of the changes
to the Company's non-performing assets and troubled debt
restructurings are highlighted below: June 30, December 31,
(Dollars in thousands) 2009 2008 % Change -------------
------------ -------- Non-performing assets Accruing loans past due
90 days or more $16,952 $6,733 152 Non-accrual loans:
Construction-residential 154,348 100,169 54
Construction-non-residential 23,797 22,012 8 Land 27,060 12,608 115
Commercial real estate, excluding land 133,161 19,733 575
Commercial 34,844 20,904 67 Residential mortgage 9,869 5,776 71
---------- --------- Total non-accrual loans: $383,079 $181,202 111
---------- --------- Total non-performing loans 400,031 187,935 113
Other real estate owned and other assets 73,715 63,892 15
---------- --------- Total non-performing assets $473,746 $251,827
88 ---------- --------- Troubled debt restructurings $23,705 $924
2,465 ========== ========== Allowance for loan losses $147,687
$122,093 21 Allowance for off-balance sheet credit commitments
4,898 7,332 (33) ---------- --------- Allowance for credit losses
$152,585 $129,425 18 ========== ========== Total gross loans
outstanding, at period-end $7,254,264 $7,472,368 (3) Allowance for
loan losses to non-performing loans, at period-end 36.92% 64.97%
Allowance for loan losses to gross loans, at period-end 2.04% 1.63%
Allowance for credit losses to non-performing loans, at period-end
38.14% 68.87% Allowance for credit losses to gross loans, at
period-end 2.10% 1.73% DIVIDEND DECLARATION On July 29, 2009, the
Board of Directors of the Company declared a cash dividend of one
cent per common share payable August 20, 2009, to stockholders of
record at the close of business on August 10, 2009. "Although we
remain well-capitalized, we believe that reducing our dividend is a
prudent measure in view of the continuing uncertainties in the
economy and the challenges facing the banking industry," said
Dunson Cheng, Chairman of the Board, Chief Executive Officer, and
President of the Company. "We recognize the value of dividends and
understand the importance of dividends to our stockholders. We also
appreciate the steadfast loyalty of our stockholders. Thus, the
decision to reduce the dividend was a difficult one to make and was
made only after thoughtfully considering the long-term interests of
our stockholders. It is important for our stockholders to
understand that we are committed to returning the dividend to a
normalized rate as soon as practicable," Mr. Cheng continued.
YEAR-TO-DATE REVIEW Net loss was $1.2 million, a $47.7 million, or
103%, decrease compared to net income of $46.5 million for the same
period a year ago. Loss per share was $0.19 compared to $0.94
earnings per diluted share for the same period a year ago due
primarily to increases in the provision for loan losses, lower net
interest income and higher provision for OREO write-downs. The net
interest margin for the six months ended June 30, 2008, decreased
46 basis points to 2.59% compared to 3.05% for the same period a
year ago. Return on average stockholders' equity was negative 0.19%
and return on average assets was negative 0.02% for the six months
ended June 30, 2009, compared to a return on average stockholders'
equity of 9.32% and a return on average assets of 0.90% for the
same period of 2008. The efficiency ratio for the six months ended
June 30, 2009 was 46.58% compared to 40.13% for the same period a
year ago. ABOUT CATHAY GENERAL BANCORP Cathay General Bancorp is
the holding company for Cathay Bank, a California state-chartered
bank. Founded in 1962, Cathay Bank offers a wide range of financial
services. Cathay Bank currently operates 31 branches in California,
eight branches in New York State, one in Massachusetts, two in
Texas, three in Washington State, three in the Chicago, Illinois
area, one in New Jersey, one in Hong Kong, and a representative
office in Shanghai and in Taipei. Cathay Bank's website is found at
http://www.cathaybank.com/. Cathay General Bancorp's website is
found at http://www.cathaygeneralbancorp.com/. 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," "could," "estimates," "expects,"
"hopes," "intends," "may," "plans," "projects," "seeks," "shall,"
"should," "will," "predicts," "potential," "continue," and
variations of these words and similar expressions. Forward-looking
statements are based on estimates, beliefs, projections, and
assumptions 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: significant volatility and
deterioration in the credit and financial markets; adverse changes
in general economic conditions; the effects of the Emergency
Economic Stabilization Act, the American Recovery and Reinvestment
Act, and the Troubled Asset Relief Program (TARP) and any changes
or amendments thereto; deterioration in asset or credit quality;
the availability of capital; the impact of any goodwill impairment
that may be determined; acquisitions of other banks, if any;
fluctuations in interest rates; the soundness of other financial
institutions; expansion into new market areas; earthquakes,
wildfires, or other natural disasters; competitive pressures;
changes in laws, regulations, and accounting rules, or their
interpretations; legislative, judicial, or regulatory actions and
developments against us; and general economic or business
conditions in California and other regions where Cathay Bank has
operations, including, but not limited to, adverse changes in
economic conditions resulting from the continuation or worsening of
the current economic downturn. These and other factors are further
described in Cathay General Bancorp's Annual Report on Form 10-K
for the year ended December 31, 2008 (at Item 1A in particular),
other reports and registration statements filed with the Securities
and Exchange Commission ("SEC"), and other filings it 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
Six months ended (Dollars in June 30, June 30, thousands,
--------------------------- ---------------------------- except % %
per share data) 2009 2008 Change 2009 2008 Change
------------------------- ------ -------- -------- --------- ------
FINANCIAL PERFORMANCE Net interest income before provision for
credit losses $65,997 $72,114 (8) $136,422 $147,304 (7) Provision
for credit losses 70,200 20,500 242 117,200 28,000 319 --------
------- ------- ------- Net interest income after provision for
credit losses (4,203) 51,614 (108) 19,222 119,304 (84) Non-interest
income 32,434 9,175 254 60,095 15,699 283 Non-interest expense
54,006 33,604 61 91,529 65,409 40 -------- ------- ------- -------
(Loss)/income before income tax (benefit)/ expense (25,775) 27,185
(195) (12,212) 69,594 (118) Income tax (benefit)/ expense (14,498)
7,804 (286) (11,324) 22,763 (150) -------- ------- ------- -------
Net (loss)/ income (11,277) 19,381 (158) (888) 46,831 (102) Net
(loss)/ income attributable to noncontrolling interest (150) (150)
- (301) (301) - -------- ------- ------- ------- Net (loss)/ income
attributable to Cathay General Bancorp (11,427) 19,231 (159)
(1,189) 46,530 (103) -------- ------- ------- ------- Dividends on
preferred stock (4,083) - 100 (8,163) - 100 -------- -------
------- ------- Net (loss)/ income available to common stockholders
$(15,510) $19,231 (181) $(9,352) $46,530 (120) ======== =======
======= ======= Net (loss)/ income available to common stockholders
per common share: Basic $(0.31) $0.39 (179) $(0.19) $0.94 (120)
Diluted $(0.31) $0.39 (179) $(0.19) $0.94 (120) Cash dividends paid
per common share $0.080 $0.105 (24) $0.185 $0.210 (12)
==========================================================================
SELECTED RATIOS Return on average assets -0.40% 0.73% (155) -0.02%
0.90% (102) Return on average total stockholders' equity -3.55%
7.66% (146) -0.19% 9.32% (102) Efficiency ratio 54.87% 41.34% 33
46.58% 40.13% 16 Dividend payout ratio n/m 26.96% n/m n/m 22.28%
n/m * n/m - not meaningful
==========================================================================
YIELD ANALYSIS (Fully taxable equivalent) Total interest- earning
assets 4.88% 5.86% (17) 5.07% 6.16% (18) Total interest- bearing
liabilities 2.75% 3.34% (18) 2.86% 3.56% (20) Net interest spread
2.13% 2.52% (15) 2.21% 2.60% (15) Net interest margin 2.49% 2.94%
(15) 2.59% 3.05% (15)
==========================================================================
Well Minimum CAPITAL June 30, June 30, December 31, Capitalized
Regulatory RATIOS 2009 2008 2008 Requirements Requirements --------
-------- ------------ ------------ ------------ Tier 1 risk-based
capital ratio 12.39% 9.38% 12.12% 6.0% 4.0% Total risk-based
capital ratio 14.23% 11.02% 13.94% 10.0% 8.0% Tier 1 leverage
capital ratio 9.48% 7.83% 9.79% 5.0% 4.0%
==========================================================================
CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share and June 30, December 31, %
per share data) 2009 2008 change --------------------------------
------------- ------------ ------- Assets Cash and due from banks
$104,273 $84,818 23 Federal funds sold 33,000 - 100 ------------
------------ Cash and cash equivalents 137,273 84,818 62 Short-term
investments 49,032 25,000 96 Securities purchased under agreements
to resell - 201,000 (100) Securities available-for-sale (amortized
cost of $3,177,575 in 2009 and $3,043,566 in 2008) 3,158,450
3,083,817 2 Trading securities 75,334 12 100 Loans 7,254,264
7,472,368 (3) Less: Allowance for loan losses (147,687) (122,093)
21 Unamortized deferred loan fees, net (9,495) (10,094) (6)
------------ ------------ Loans, net 7,097,082 7,340,181 (3)
Federal Home Loan Bank stock 71,791 71,791 - Other real estate
owned, net 70,838 61,015 16 Affordable housing investments, net
99,674 103,562 (4) Premises and equipment, net 107,987 104,107 4
Customers' liability on acceptances 26,398 39,117 (33) Accrued
interest receivable 41,495 43,603 (5) Goodwill 319,468 319,557 (0)
Other intangible assets, net 26,094 29,246 (11) Other assets
128,077 75,813 69 ----------- ----------- Total assets $11,408,993
$11,582,639 (1) =========== =========== Liabilities and
Stockholders' Equity Deposits Non-interest-bearing demand deposits
$764,553 $730,433 5 Interest-bearing deposits: NOW deposits 286,893
257,234 12 Money market deposits 917,472 659,454 39 Savings
deposits 330,981 316,263 5 Time deposits under $100,000 1,356,647
1,644,407 (17) Time deposits of $100,000 or more 3,723,509
3,228,945 15 ------------ ------------ Total deposits 7,380,055
6,836,736 8 ------------ ------------ Federal funds purchased -
52,000 (100) Securities sold under agreements to repurchase
1,557,000 1,610,000 (3) Advances from the Federal Home Loan Bank
929,362 1,449,362 (36) Other borrowings for affordable housing
investments 19,390 19,500 (1) Long-term debt 171,136 171,136 -
Acceptances outstanding 26,398 39,117 (33) Other liabilities 71,816
103,401 (31) ------------ ------------ Total liabilities 10,155,157
10,281,252 (1) ------------ ------------ Commitments and
contingencies - - - ------------ ------------ Stockholders' Equity
Preferred stock, 10,000,000 shares authorized, 258,000 issued and
outstanding in 2009 and 2008 242,242 240,554 - Common stock, $0.01
par value, 100,000,000 shares authorized, 53,780,633 issued and
49,573,068 outstanding at June 30, 2009 and 53,715,815 issued and
49,508,250 outstanding at December 31, 2008 538 537 0 Additional
paid-in-capital 512,299 508,613 1 Accumulated other comprehensive
income, net (11,084) 23,327 (148) Retained earnings 627,077 645,592
(3) Treasury stock, at cost (4,207,565 shares in 2009 and in 2008)
(125,736) (125,736) - Total Cathay General Bancorp stockholders'
equity 1,245,336 1,292,887 (4) ------------ ------------
Noncontrolling interest 8,500 8,500 - ------------ ------------
Total equity 1,253,836 1,301,387 (4) ------------ ------------
Total liabilities and equity $11,408,993 $11,582,639 (1)
============ ============ Book value per common stock share $19.93
$20.90 (5) Number of common stock shares outstanding 49,573,068
49,508,250 0 CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) Three months ended Six months
ended June 30, June 30, ----------------------
--------------------- 2009 2008 2009 2008 -------- ------- -------
------- (In thousands, except share and per share data) INTEREST
AND DIVIDEND INCOME Loan receivable, including loan fees $98,650
$110,850 $202,644 $227,875 Investment securities- taxable 30,321
28,426 62,515 56,932 Investment securities- nontaxable 207 324 453
690 Federal Home Loan Bank stock - 928 - 1,681 Agency preferred
stock - 592 - 1,308 Federal funds sold and securities purchased
under agreements to resell 1 2,915 1,303 9,395 Deposits with banks
73 27 131 481 Total interest and dividend income 129,252 144,062
267,046 298,362 -------- ------- ------- ------- INTEREST EXPENSE
Time deposits of $100,000 or more 21,876 28,304 45,113 60,172 Other
deposits 13,459 15,184 29,574 32,419 Securities sold under
agreements to repurchase 16,036 14,917 31,972 29,542 Advances from
Federal Home Loan Bank 10,552 11,323 21,117 23,444 Long-term debt
1,319 2,010 2,824 4,859 Short-term borrowings 13 210 24 622 Total
interest expense 63,255 71,948 130,624 151,058 -------- -------
------- ------- Net interest income before provision for credit
losses 65,997 72,114 136,422 147,304 Provision for credit losses
70,200 20,500 117,200 28,000 Net interest income after provision
for loan losses (4,203) 51,614 19,222 119,304 -------- -------
------- ------- NON-INTEREST INCOME Securities gains, net 26,938
2,333 49,436 2,333 Letters of credit commissions 1,033 1,376 2,009
2,816 Depository service fees 1,269 1,175 2,668 2,447 Other
operating income 3,194 4,291 5,982 8,103 Total non-interest income
32,434 9,175 60,095 15,699 -------- ------- ------- -------
NON-INTEREST EXPENSE Salaries and employee benefits 15,073 16,408
31,959 34,267 Occupancy expense 4,006 3,242 8,127 6,525 Computer
and equipment expense 1,990 1,932 3,886 4,176 Professional services
expense 3,360 3,095 6,327 5,480 FDIC and State assessments 8,054
1,545 10,908 1,836 Marketing expense 456 848 1,484 1,865 Other real
estate owned expense (income) 13,873 641 16,015 624 Operations of
affordable housing investments 2,150 1,696 3,848 2,521 Amortization
of core deposit intangibles 1,689 1,722 3,400 3,474 Other operating
expense 3,355 2,475 5,575 4,641 Total non-interest expense 54,006
33,604 91,529 65,409 -------- ------- ------- ------- (Loss)/income
before income tax (benefit)/expense (25,775) 27,185 (12,212) 69,594
Income tax (benefit)/expense (14,498) 7,804 (11,324) 22,763
-------- ------- ------- ------- Net (loss)/income (11,277) 19,381
(888) 46,831 Less: net income attributable to noncontrolling
interest (150) (150) (301) (301) -------- ------- ------- -------
Net (loss)/income attributable to Cathay General Bancorp (11,427)
19,231 (1,189) 46,530 -------- ------- ------- ------- Dividends on
preferred stock (4,083) - (8,163) - -------- ------- -------
------- Net (loss)/income available to common stockholders
$(15,510) $19,231 $(9,352) $46,530 ======== ======= ======= =======
Net (loss)/income available to common stockholders per common
share: Basic $(0.31) $0.39 $(0.19) $0.94 Diluted $(0.31) $0.39
$(0.19) $0.94 Cash dividends paid per common share $0.080 $0.105
$0.185 $0.210 Basic average common shares outstanding 49,554,696
49,389,522 49,543,084 49,367,903 Diluted average common shares
outstanding 49,557,514 49,429,348 49,549,323 49,480,439 CATHAY
GENERAL BANCORP AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL
INFORMATION (Unaudited) For the three months ended,
--------------------------------------------------------------------------
(In thousands) June 30, 2009 June 30, 2008 March 31, 2009
-------------------------------- -------------------
------------------- Interest- Average Average Average Average
Average Average earning Balance Yield/Rate Balance Yield/Rate
Balance Yield/Rate assets (1) (2) (1) (2) (1) (2)
------------------- ------------------- ------------------- Loans
and leases (1) $7,342,100 5.39% $7,122,528 6.26% $7,459,092 5.65%
Taxable investment securities 3,158,622 3.85% 2,475,628 4.62%
2,970,700 4.40% Tax-exempt investment securities (2) 19,315 6.60%
60,781 8.69% 22,845 6.73% FHLB stock 71,791 0.00% 65,879 5.67%
71,791 0.00% Federal funds sold and securities purchased under
agreements to resell 3,989 0.10% 177,445 6.61% 80,700 6.54%
Deposits with banks 37,363 0.78% 5,188 2.09% 24,998 0.94%
----------------- ---------------- ------------------- Total
interest- earning assets $10,633,180 4.88% $9,907,449 5.86%
$10,630,126 5.26% ----------- ---------- ----------- Interest-
bearing liabilities Interest- bearing demand deposits $278,944
0.41% $253,559 0.58% $259,535 0.40% Money market 834,063 1.56%
738,206 1.76% 759,930 1.58% Savings deposits 328,274 0.21% 337,512
0.33% 311,145 0.22% Time deposits 5,064,471 2.50% 4,452,317 3.58%
4,961,130 2.94% ----------------- ----------------
------------------- Total interest- bearing deposits $6,505,752
2.18% $5,781,594 3.03% $6,291,740 2.54% Federal funds purchased
16,747 0.26% 37,720 2.24% 16,933 0.26% Securities sold under
agreements to repurchase 1,559,302 4.12% 1,551,571 3.87% 1,580,989
4.09% Other borrowed funds 962,405 4.40% 1,134,448 4.01% 1,117,844
3.83% Long-term debt 171,136 3.09% 171,136 4.72% 171,136 3.57%
----------------- ---------------- ------------------- Total
interest- bearing liabilities 9,215,342 2.75% 8,676,469 3.34%
9,178,642 2.98% Non-interest- bearing demand deposits 749,573
764,270 734,883 ----------- ---------- ----------- Total deposits
and other borrowed funds $9,964,915 $9,440,739 $9,913,525
----------- ---------- ----------- Total average assets $11,385,388
$10,561,123 $11,351,762 Total average equity $1,300,169 $1,017,963
$1,300,732 ----------- ---------- ----------- For the six months
ended,
--------------------------------------------------------------------------
(In thousands) June 30, 2009 June 30, 2008
-------------------------------------------------
----------------------- Interest-earning assets Average Average
Average Average Balance Yield/Rate Balance Yield/Rate (1) (2) (1)
(2) ----------------------- ----------------------- Loans and
leases (1) $7,400,273 5.52% $6,963,564 6.58% Taxable investment
securities 3,065,179 4.11% 2,364,324 4.84% Tax-exempt investment
securities (2) 21,071 6.67% 64,125 8.98% FHLB stock 71,791 0.00%
65,816 5.14% Federal funds sold and securities purchased under
agreements to resell 42,133 6.24% 298,560 6.33% Deposits with banks
31,214 0.85% 15,062 6.42% ----------------------
--------------------- Total interest- earning assets $10,631,661
5.07% $9,771,451 6.16% ----------- ---------- Interest-bearing
liabilities Interest-bearing demand deposits $269,293 0.41%
$245,585 0.70% Money market deposits 797,202 1.57% 719,879 1.97%
Savings deposits 319,757 0.22% 334,008 0.43% Time deposits
5,013,085 2.72% 4,316,594 3.91% ----------------------
--------------------- Total interest- bearing deposits $6,399,337
2.35% $5,616,066 3.32% Federal funds purchased 16,840 0.26% 40,530
2.94% Securities sold under agreements to repurchase 1,570,086
4.11% 1,555,454 3.82% Other borrowed funds 1,039,695 4.10%
1,145,343 4.12% Long-term debt 171,136 3.33% 171,136 5.71%
---------------------- --------------------- Total interest-
bearing liabilities 9,197,094 2.86% 8,528,529 3.56% Non-interest-
bearing demand deposits 742,269 772,424 Total deposits and other
borrowed funds $9,939,363 $9,300,953 ----------- ---------- Total
average assets $11,368,574 $10,431,709 Total average equity
$1,300,355 $1,012,690 (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%. DATASOURCE: Cathay General Bancorp
CONTACT: Heng W. Chen of Cathay General Bancorp, +1-626-279-3652
Web Site: http://www.cathaybank.com/
http://www.cathaygeneralbancorp.com/
Copyright