LOS ANGELES, July 17, 2012 /PRNewswire/ -- Cathay General
Bancorp (the "Company," NASDAQ: CATY), the holding company for
Cathay Bank, today announced results for the second quarter of
2012.
FINANCIAL PERFORMANCE
|
Second
Quarter
|
|
2012
|
|
2011
|
Net
income
|
$29.9
million
|
|
$24.3
million
|
Net income
available to common stockholders
|
$25.7
million
|
|
$20.2
million
|
Basic
earnings per common share
|
$0.33
|
|
$0.26
|
Diluted
earnings per common share
|
$0.33
|
|
$0.26
|
Return on
average assets
|
1.13%
|
|
0.91%
|
Return on
average total stockholders' equity
|
7.72%
|
|
6.64%
|
Efficiency
ratio
|
53.21%
|
|
50.03%
|
|
|
|
|
SECOND QUARTER HIGHLIGHTS
- Improved profitability – Second quarter net income was
$29.9 million, an increase of
$5.6 million, or 22.9%, compared to
net income of $24.3 million in the
same quarter a year ago.
- Net recoveries – Net recoveries of loans were $2.6 million in the second quarter of 2012,
compared to net charge-offs of $21.8
million the same quarter a year ago and compared to net
charge-offs of $8.1 million in the
first quarter of 2012.
"We are pleased with the net recoveries achieved in the second
quarter of 2012. We were also pleased with the 22% annualized
rate of growth in commercial loans during the second quarter of
2012," commented Dunson Cheng,
Chairman of the Board, Chief Executive Officer, and President of
the Company.
"Our focus on core deposit generation resulted in core deposits
increasing at an annualized rate of 14% in the second quarter of
2012, another good quarter for core deposit generation," said
Peter Wu, Executive Vice Chairman
and Chief Operating Officer.
"We expect solid loan growth in the second half in all major
loan categories, excluding construction loans," concluded
Dunson Cheng.
INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter
ended June 30, 2012, was $25.7 million, an increase of $5.5 million, or 27.5%, compared to a net income
available to common stockholders of $20.2
million for the same quarter a year ago. Diluted
earnings per share available to common stockholders for the quarter
ended June 30, 2012, was $0.33 compared to $0.26 for the same quarter a year ago due
primarily to decreases in the provision for credit losses,
decreases in prepayment penalties on the repayment of Federal Home
Loan Bank ("FHLB") advances and securities sold under agreements to
repurchase, increases in net interest income, and decreases in FDIC
assessments which were partially offset by decreases in gains on
sales of securities, increases in other real estate owned ("OREO")
expense, increases in salaries and employee benefits, and increases
in professional service expenses.
Return on average stockholders' equity was 7.72% and return on
average assets was 1.13% for the quarter ended June 30, 2012, compared to a return on average
stockholders' equity of 6.64% and a return on average assets of
0.91% for the same quarter a year ago.
Net interest income before provision for credit
losses
Net interest income before provision for credit losses increased
$805,000, or 1.0%, to $79.1 million during the second quarter of 2012
compared to $78.3 million during the
same quarter a year ago. The increase was due primarily to
the decrease in rates paid on time certificates of deposit and the
prepayment of FHLB advances and maturities of securities sold under
agreements to repurchase.
The net interest margin, on a fully taxable-equivalent basis,
was 3.24% for the second quarter of 2012, a decrease of 9 basis
points from 3.33% for the first quarter of 2012, and an increase of
5 basis points from 3.19% for the second quarter of 2011. The
decrease in the rate on interest bearing deposits and the
prepayment of FHLB advances and decreases in securities sold under
agreements to repurchase contributed to the increase in the net
interest margin from the same quarter a year
ago.
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
equaled 1.45%, and the cost of interest bearing deposits was
0.80%. In comparison, for the second quarter of 2011, the
yield on average interest-earning assets was 4.65%, on a fully
taxable-equivalent basis, the cost of funds on average
interest-bearing liabilities equaled 1.77%, and the cost of
interest bearing deposits was 1.05%. 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 6 basis points to 2.94% for the quarter
ended June 30, 2012, from 2.88% for
the same quarter a year ago, primarily due to the reasons discussed
above.
Provision for credit losses
The provision for credit losses was a credit of $5.0 million for the second quarter of 2012
compared to a credit of $4.0 million
for the first quarter of 2012 and a charge of $10.0 million in the same quarter a year
ago. The provision for credit losses was based on the review
of the adequacy of the allowance for loan losses at June 30, 2012. The provision or reversal for
credit losses represents the charge against or benefit toward
current earnings that is determined by management, through a credit
review process, as the amount needed to establish an allowance that
management believes to be sufficient to absorb credit losses
inherent in the Company's loan portfolio, including unfunded
commitments. The following table summarizes the charge-offs
and recoveries for the periods indicated:
|
For the
three months ended June 30,
|
|
For the
six months ended June 30,
|
|
2012
|
|
|
2011
|
|
2012
|
|
2011
|
|
(In
thousands)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
Commercial loans
|
$
2,133
|
|
|
$
8,618
|
|
$
7,092
|
|
$
9,996
|
Construction loans- residential
|
251
|
|
|
4,541
|
|
391
|
|
7,426
|
Construction loans- other
|
-
|
|
|
66
|
|
735
|
|
3,429
|
Real estate loans (1)
|
1,983
|
|
|
13,614
|
|
10,910
|
|
18,559
|
Real estate- land loans
|
25
|
|
|
82
|
|
99
|
|
486
|
Installment and other loans
|
-
|
|
|
-
|
|
25
|
|
-
|
Total
charge-offs
|
4,392
|
|
|
26,921
|
|
19,252
|
|
39,896
|
Recoveries:
|
|
|
|
|
|
|
|
|
Commercial loans
|
153
|
|
|
280
|
|
899
|
|
1,055
|
Construction loans- residential
|
1,364
|
|
|
3,001
|
|
3,263
|
|
3,661
|
Construction loans- other
|
227
|
|
|
-
|
|
1,885
|
|
227
|
Real estate loans (1)
|
4,836
|
|
|
1,295
|
|
6,467
|
|
2,239
|
Real estate- land loans
|
373
|
|
|
588
|
|
1,166
|
|
593
|
Installment and other loans
|
-
|
|
|
-
|
|
3
|
|
-
|
Total recoveries
|
6,953
|
|
|
5,164
|
|
13,683
|
|
7,775
|
Net
(recoveries)/charge-offs
|
$
(2,561)
|
|
|
$
21,757
|
|
$
5,569
|
|
$
32,121
|
|
|
|
|
|
|
|
|
|
(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 $9.9
million for the second quarter of 2012, a decrease of
$2.6 million, or 20.9%, compared to
$12.5 million for the second quarter
of 2011. The decrease in non-interest income in the second quarter
of 2012 was primarily due to decreases of $2.8 million from gains on sale of securities and
decreases of $923,000 in gains on
sales of loans offset by a $954,000
increase in net gains on interest rate swap agreements and a
$224,000 increase in letters of
credit commissions.
Non-interest expense
Non-interest expense increased $1.9
million, or 4.3%, to $47.3
million in the second quarter of 2012 compared to
$45.4 million in the same quarter a
year ago. The efficiency ratio was 53.21% in the second
quarter of 2012 compared to 50.03% for the same quarter a year ago
due primarily to increases in OREO expenses and lower gains on sale
of securities.
OREO expenses increased to $7.1
million in the second quarter of 2012 compared to
$2.3 million in the same
quarter a year ago primarily due to increases in provisions for
OREO write-down of $2.4 million,
increases in OREO expenses of $1.5
million, and decreases of $938,000 in gains from sales and transfers of
OREO. Salaries and employee benefits increased $2.4 million, or 13.8% in the second quarter of
2012 compared to the same quarter a year ago primarily due to
increases in incentive compensation and the hiring of new
employees. Marketing expense increased $666,000 primarily due to increases in media and
promotion expenses, and contributions to Cathay Bank
Foundation.
Offsetting the above increases were prepayment penalties of
$5.2 million in the second quarter of
2011 compared to none during the second quarter of 2012. FDIC
assessment decreased $934,000, or
32.2%, to $2.0 million in the second
quarter of 2012 from $2.9 million for
the same quarter a year ago.
Income taxes
The effective tax rate for the second quarter of 2012 was 35.8%
compared to 31.0% in the second quarter of 2011. The
effective tax rate includes the impact of the utilization of low
income housing tax credits and the recognition of other tax
credits.
BALANCE SHEET REVIEW
Gross loans, excluding loans held for sale, were $7.04 billion at June 30,
2012, an increase of $135.0
million, or 2.0%, from $6.91
billion at March 31, 2012,
primarily due to a $100.9 million, or
5.5% increases in commercial loans. Gross loans, excluding loans
held for sale, were $7.04 billion at
June 30, 2012, a decrease of
$15.5 million, or 0.2%, from
$7.06 billion at December 31, 2011, primarily due to a decrease of
$53.5 million, or 1.4%, in commercial
real estate loans, a decrease of $57.3
million, or 24.1%, in construction loans offset by an
increase of $77.4 million, or 4.1%,
in commercial loans and an increase of $29.7
million, or 3.1%, in residential mortgage loans. The
changes in loan composition from December
31, 2011, are presented below:
Type of
Loans:
|
June 30,
2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Commercial
loans
|
$
1,945,720
|
|
$
1,868,275
|
|
4
|
Residential mortgage loans
|
1,001,976
|
|
972,262
|
|
3
|
Commercial
mortgage loans
|
3,695,440
|
|
3,748,897
|
|
(1)
|
Equity
lines
|
203,788
|
|
214,707
|
|
(5)
|
Real
estate construction loans
|
180,086
|
|
237,372
|
|
(24)
|
Installment & other loans
|
16,673
|
|
17,699
|
|
(6)
|
|
|
|
|
|
|
Gross
loans
|
$
7,043,683
|
|
$
7,059,212
|
|
(0)
|
|
|
|
|
|
|
Allowance
for loan losses
|
(192,274)
|
|
(206,280)
|
|
(7)
|
Unamortized deferred loan fees
|
(8,855)
|
|
(8,449)
|
|
5
|
|
|
|
|
|
|
Total
loans, net
|
$
6,842,554
|
|
$
6,844,483
|
|
(0)
|
Loans held
for sale
|
$
500
|
|
$
760
|
|
(34)
|
Total deposits were $7.4 billion
at June 30, 2012, an increase of
$155.1 million, or 2.1%, from
$7.2 billion at December 31, 2011, primarily due to a
$97.9 million, or 9.1%, increase in
non-interest bearing demand deposits, a $48.6 million, or 10.8%, increase in NOW
deposits, a $68.8 million, or 7.2%,
increase in money market deposits, a $24.1
million, or 5.7% increase in savings deposits, and a
$53.2 million, or 6.4%, increase in
time deposits under $100,000 offset
by a $137.5 million, or 3.9%,
decrease in time deposits of $100,000
or more. The changes in deposit composition from December 31, 2011, are presented below:
Deposits
|
June 30,
2012
|
|
December
31, 2011
|
|
%
Change
|
|
(Dollars in thousands)
|
|
|
Non-interest-bearing demand deposits
|
$
1,172,622
|
|
$
1,074,718
|
|
9
|
NOW
deposits
|
500,220
|
|
451,541
|
|
11
|
Money
market deposits
|
1,020,304
|
|
951,516
|
|
7
|
Savings
deposits
|
444,083
|
|
420,030
|
|
6
|
Time
deposits under $100,000
|
886,176
|
|
832,997
|
|
6
|
Time
deposits of $100,000 or more
|
3,360,828
|
|
3,498,329
|
|
(4)
|
Total
deposits
|
$
7,384,233
|
|
$
7,229,131
|
|
2
|
ASSET QUALITY REVIEW
At June 30, 2012, total
non-accrual portfolio loans, excluding loans held for sale, were
$122.8 million, a decrease of
$78.4 million, or 39.0%, from
$201.2 million at December 31, 2011, and a decrease of $133.6 million, or 52.1%, from $256.4 million at June
30, 2011.
The allowance for loan losses was $192.3
million and the allowance for off-balance sheet unfunded
credit commitments was $1.5 million
at June 30, 2012, and 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, the sum of
allowance for loan losses and for off-balance sheet unfunded credit
commitments, was $193.8 million at
June 30, 2012, compared to
$208.3 million at December 31, 2010, a decrease of $14.5 million, or 7.0%. The allowance for
credit losses represented 2.75% of period-end gross loans,
excluding loans held for sale, and 156.8% of non-performing
portfolio loans at June 30,
2012. The comparable ratios were 2.95% of period-end gross
loans, excluding loans held for sale, and 100.2% of non-performing
portfolio loans at December 31,
2011. The changes in the Company's non-performing assets and
troubled debt restructurings at June 30,
2012, compared to December 31,
2011, and June 30, 2011, are
highlighted below:
(Dollars in thousands)
|
June 30,
2012
|
|
December
31, 2011
|
|
%
Change
|
|
June 30,
2011
|
|
%
Change
|
Non-performing assets
|
|
|
|
|
|
|
|
|
|
Accruing
loans past due 90 days or more
|
$
746
|
|
$
6,726
|
|
(89)
|
|
$
-
|
|
100
|
Non-accrual loans:
|
|
|
|
|
|
|
|
|
|
Construction- residential loans
|
4,828
|
|
25,288
|
|
(81)
|
|
41,030
|
|
(88)
|
Construction- non-residential loans
|
7,118
|
|
20,724
|
|
(66)
|
|
29,419
|
|
(76)
|
Land loans
|
7,410
|
|
10,975
|
|
(32)
|
|
14,209
|
|
(48)
|
Commercial real estate loans, excluding land loans
|
63,220
|
|
96,809
|
|
(35)
|
|
122,092
|
|
(48)
|
Commercial loans
|
25,716
|
|
30,661
|
|
(16)
|
|
34,350
|
|
(25)
|
Residential mortgage loans
|
14,530
|
|
16,740
|
|
(13)
|
|
15,319
|
|
(5)
|
Total
non-accrual loans:
|
$
122,822
|
|
$
201,197
|
|
(39)
|
|
$
256,419
|
|
(52)
|
Total
non-performing loans
|
123,568
|
|
207,923
|
|
(41)
|
|
256,419
|
|
(52)
|
Other real estate owned
|
74,463
|
|
92,713
|
|
(20)
|
|
74,233
|
|
0
|
Total
non-performing assets
|
$
198,031
|
|
$
300,636
|
|
(34)
|
|
$
330,652
|
|
(40)
|
Accruing troubled debt
restructurings (TDRs)
|
$
153,249
|
|
$
120,016
|
|
28
|
|
$
116,327
|
|
32
|
Non-accrual loans held for sale
|
$
500
|
|
$
760
|
|
(34)
|
|
$
1,637
|
|
(69)
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses
|
$
192,274
|
|
$
206,280
|
|
(7)
|
|
$
229,900
|
|
(16)
|
Allowance
for off-balance sheet credit commitments
|
1,505
|
|
2,069
|
|
(27)
|
|
1,547
|
|
(3)
|
Allowance
for credit losses
|
$
193,779
|
|
$
208,349
|
|
(7)
|
|
$
231,447
|
|
(16)
|
|
|
|
|
|
|
|
|
|
|
Total
gross loans outstanding, at period-end (1)
|
$
7,043,683
|
|
$
7,059,212
|
|
(0)
|
|
$
6,922,157
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses to non-performing loans, at period-end
(2)
|
155.60%
|
|
99.21%
|
|
|
|
89.66%
|
|
|
Allowance
for loan losses to gross loans, at
period-end (1)
|
2.73%
|
|
2.92%
|
|
|
|
3.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
$153.2 million at June 30, 2012, compared to $120.0 million at December
31, 2011. These loans are classified as troubled debt
restructurings as a result of granting a concession to borrowers
who are experiencing financial difficulties. The concessions
may be granted in various forms, including a change in the stated
interest rate, a reduction in the loan balance or accrued interest,
or an extension of the maturity date that causes a significant
delay in payment. Although these loan modifications are
considered troubled debt restructurings under Accounting Standard
Codification 310-40 and Accounting Standard Update 2011-02, these
loans have been performing under the restructured terms and have
demonstrated sustained performance under the modified terms.
The sustained performance considered by management includes the
periods prior to the modification if the prior performance met or
exceeded the modified terms as well as cash paid to set up interest
reserves.
The ratio of non-performing assets, excluding non-accrual loans
held for sale, to total assets was 1.9% at June 30, 2012, compared to 2.8% at December 31, 2011. Total non-performing
portfolio assets decreased $102.6
million, or 34.1%, to $198.0
million at June 30, 2012,
compared to $300.6 million at
December 31, 2011, primarily due to a
$78.4 million decrease in non-accrual
loans, a $18.3 million decrease in
OREO, and a $6.0 million decrease in
accruing loans past due 90 days or more.
CAPITAL ADEQUACY REVIEW
At June 30, 2012, the Company's
Tier 1 risk-based capital ratio of 16.91%, total risk-based capital
ratio of 18.82%, and Tier 1 leverage capital ratio of 13.30%,
continue to place the Company in the "well capitalized" category
for regulatory purposes, which is defined as institutions with a
Tier 1 risk-based capital ratio equal to or greater than 6%, a
total risk-based capital ratio equal to or greater than 10%, and a
Tier 1 leverage capital ratio equal to or greater than 5%. At
December 31, 2011, the Company's Tier
1 risk-based capital ratio was 15.97%, total risk-based capital
ratio was 17.85%, and Tier 1 leverage capital ratio was 12.93%.
YEAR-TO-DATE REVIEW
Net income attributable to common stockholders was $50.5 million, an increase of $12.3 million, or 32.5%, compared to net income
attributable to common stockholders of $38.2
million for the same period a year ago due primarily to
decreases in the provision for loan losses, decreases in
prepayment penalties on the repayment of FHLB advances and the
prepayment of securities sold under an agreement to repurchase,
increases in net interest income, and decreases in FDIC
assessments, which were partially offset by increases in income tax
expenses, increases in OREO expenses, decreases in gains on sale of
securities, and increases in salaries and incentive compensation
expense. Diluted earnings per share was $0.64 compared to $0.49 per share for the same period a year
ago. The net interest margin for the six months ended
June 30, 2012, increased 15 basis
points to 3.28% compared to 3.13% for the same period a year
ago.
Return on average stockholders' equity was 7.67% and return on
average assets was 1.12% for the six months ended June 30, 2012, compared to a return on average
stockholders' equity of 6.42% and a return on average assets
of 0.87% for the same period of 2011. The efficiency ratio
for the six months ended June 30,
2012, was 53.35% compared to 52.21% for the same period a
year ago.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this
afternoon to discuss its second quarter of 2012 financial results.
The call will begin at 3:00 p.m. Pacific
Time. Analysts and investors may dial in and participate in
the question-and-answer session. To access the call, please dial
1-866-202-3048 and enter Participant Passcode 91715143. A
listen-only live Webcast of the call will be available at
www.cathaygeneralbancorp.com and a recorded version is scheduled to
be available for replay for 12 months after the call.
ABOUT CATHAY GENERAL BANCORP
Cathay General Bancorp is the holding company for Cathay Bank, a
California state-chartered bank.
Founded in 1962, Cathay Bank offers a wide range of financial
services. Cathay Bank currently operates 31 branches in
California, eight branches in
New York State, one in
Massachusetts, two in Texas, three in Washington State, three in the Chicago, Illinois area, one in New Jersey, one in Hong Kong, and a representative office in
Shanghai and in Taipei. Cathay Bank's website is found at
http://www.cathaybank.com. Cathay General Bancorp's website is
found at http://www.cathaygeneralbancorp.com. Information set
forth on such websites is not incorporated into this press
release.
FORWARD-LOOKING STATEMENTS AND OTHER NOTICES
Statements made in this press release, other than statements of
historical fact, are forward-looking statements within the meaning
of the applicable provisions of the Private Securities Litigation
Reform Act of 1995 regarding management's beliefs, projections, and
assumptions concerning future results and events. These
forward-looking statements may include, but are not limited to,
such words as "aims," "anticipates," "believes," "can," "could,"
"estimates," "expects," "hopes," "intends," "may," "plans,"
"projects," "seeks," "shall," "should," "will," "predicts,"
"potential," "continue," "possible," "optimistic," and variations
of these words and similar expressions. Forward-looking statements
are based on estimates, beliefs, projections, and assumptions of
management and are not guarantees of future performance. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Such risks and uncertainties and other factors
include, but are not limited to, adverse developments or conditions
related to or arising from U.S. and international business and
economic conditions; credit risks of lending activities and
deterioration in asset or credit quality; current and potential
future supervisory action by federal supervisory authorities;
increased costs of compliance and other risks associated with
changes in regulation and the current regulatory environment,
including the requirements of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the "Dodd-Frank Act"), and the potential
for substantial changes in the legal, regulatory, and enforcement
framework and oversight applicable to financial institutions in
reaction to recent adverse financial market events, including
changes pursuant to the Dodd-Frank Act; potential goodwill
impairment; liquidity risk; fluctuations in interest rates;
inflation and deflation; risks associated with acquisitions and the
expansion of our business into new markets; real estate market
conditions and the value of real estate collateral; environmental
liabilities; the effect of repeal of the federal prohibition on
payment of interest on demand deposit accounts; our ability to
compete with larger competitors; the possibility of higher capital
requirements, including implementation of the Basel III capital
standards of the Basel Committee; our ability to retain key
personnel; successful management of reputational risk; natural
disasters and geopolitical events; general economic or business
conditions in California,
Asia, and other regions where
Cathay Bank has operations; restrictions on compensation paid to
our executives as a result of our participation in the TARP Capital
Purchase Program; failures, interruptions, or security breaches of
systems or data breaches; our ability to adapt our systems to
technological changes, including successfully implementing our core
system conversion; changes in accounting standards or tax laws and
regulations; market disruption and volatility; restrictions on
dividends and other distributions by laws and regulations and by
our regulators and our capital structure; successfully raising
additional capital, if needed, and the resulting dilution of
interests of holders of our common stock; and the soundness of
other financial institutions.
These and other factors are further described in Cathay General
Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2011 (Item 1A in
particular), other reports filed with the Securities and Exchange
Commission ("SEC"), and other filings Cathay General Bancorp makes
with the SEC from time to time. Actual results in any future period
may also vary from the past results discussed in this press
release. Given these risks and uncertainties, readers are cautioned
not to place undue reliance on any forward-looking statements,
which speak to the date of this press release. Cathay General
Bancorp has no intention and undertakes no obligation to update any
forward-looking statement or to publicly announce any revision of
any forward-looking statement to reflect future developments or
events, except as required by law.
Cathay General Bancorp's filings with the SEC are available at
the website maintained by the SEC at http://www.sec.gov, or by
request directed to Cathay General Bancorp, 9650 Flair Drive,
El Monte, California 91731,
Attention: Investor Relations (626) 279-3286.
CATHAY GENERAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
|
|
|
|
Three
months ended June 30,
|
|
|
Six months
ended June 30,
|
(Dollars
in thousands, except per share data)
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income before provision for credit
losses
|
|
$
79,120
|
|
$
78,315
|
|
1
|
|
$
159,771
|
|
$
153,420
|
4
|
Provision/(reversal) for credit losses
|
|
(5,000)
|
|
10,000
|
|
(150)
|
|
(9,000)
|
|
16,000
|
(156)
|
Net
interest income after provision for credit losses
|
|
84,120
|
|
68,315
|
|
23
|
|
168,771
|
|
137,420
|
23
|
Non-interest income
|
|
9,852
|
|
12,453
|
|
(21)
|
|
18,683
|
|
25,079
|
(26)
|
Non-interest expense
|
|
47,342
|
|
45,410
|
|
4
|
|
95,213
|
|
93,193
|
2
|
Income
before income tax expense
|
|
46,630
|
|
35,358
|
|
32
|
|
92,241
|
|
69,306
|
33
|
Income tax
expense
|
|
16,619
|
|
10,906
|
|
52
|
|
33,166
|
|
22,640
|
46
|
Net
income
|
|
30,011
|
|
24,452
|
|
23
|
|
59,075
|
|
46,666
|
27
|
Net
income attributable to noncontrolling interest
|
|
150
|
|
150
|
|
-
|
|
301
|
|
301
|
-
|
Net income
attributable to Cathay General Bancorp
|
|
$
29,861
|
|
$
24,302
|
|
23
|
|
$
58,774
|
|
$
46,365
|
27
|
Dividends
on preferred stock
|
|
(4,121)
|
|
(4,107)
|
|
0
|
|
(8,238)
|
|
(8,212)
|
0
|
Net income
attributable to common stockholders
|
|
$
25,740
|
|
$
20,195
|
|
27
|
|
$
50,536
|
|
$
38,153
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.33
|
|
$
0.26
|
|
27
|
|
$
0.64
|
|
$
0.49
|
31
|
Diluted
|
|
$
0.33
|
|
$
0.26
|
|
27
|
|
$
0.64
|
|
$
0.49
|
31
|
|
|
.
|
|
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
|
$
0.01
|
|
$
-
|
|
$
0.02
|
|
$
0.02
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets
|
|
1.13%
|
|
0.91%
|
|
24
|
|
1.12%
|
|
0.87%
|
29
|
Return on
average total stockholders' equity
|
|
7.72%
|
|
6.64%
|
|
16
|
|
7.67%
|
|
6.42%
|
19
|
Efficiency
ratio
|
|
53.21%
|
|
50.03%
|
|
6
|
|
53.35%
|
|
52.21%
|
2
|
Dividend
payout ratio
|
|
2.64%
|
|
3.24%
|
|
(19)
|
|
2.68%
|
|
3.39%
|
(21)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD
ANALYSIS (Fully taxable equivalent)
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
|
4.39%
|
|
4.65%
|
|
(6)
|
|
4.47%
|
|
4.64%
|
(4)
|
Total
interest-bearing liabilities
|
|
1.45%
|
|
1.77%
|
|
(18)
|
|
1.48%
|
|
1.83%
|
(19)
|
Net
interest spread
|
|
2.94%
|
|
2.88%
|
|
2
|
|
2.99%
|
|
2.81%
|
6
|
Net
interest margin
|
|
3.24%
|
|
3.19%
|
|
2
|
|
3.28%
|
|
3.13%
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
June 30,
2012
|
|
June 30,
2011
|
|
December
31, 2011
|
|
Well
Capitalized Requirements
|
|
Minimum
Regulatory Requirements
|
|
Tier 1
risk-based capital ratio
|
|
16.91%
|
|
15.75%
|
|
15.97%
|
|
6.0%
|
|
4.0%
|
|
Total
risk-based capital ratio
|
|
18.82%
|
|
17.67%
|
|
17.85%
|
|
10.0%
|
|
8.0%
|
|
Tier 1
leverage capital ratio
|
|
13.30%
|
|
12.19%
|
|
12.93%
|
|
5.0%
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
|
|
(In
thousands, except share and per share data)
|
|
June 30,
2012
|
|
December
31, 2011
|
|
%
change
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and
due from banks
|
|
$
134,744
|
|
$
117,888
|
|
14
|
|
Short-term
investments and interest bearing deposits
|
|
513,636
|
|
294,956
|
|
74
|
|
Securities
purchased under agreements to resell
|
|
10,000
|
|
-
|
|
100
|
|
Securities
held-to-maturity (market value of $1,073,077 in 2012
and $1,203,977 in 2011)
|
|
1,019,977
|
|
1,153,504
|
|
(12)
|
|
|
Securities
available-for-sale (amortized cost of $1,173,146 in 2012
and $1,309,521 in 2011)
|
|
1,166,783
|
|
1,294,478
|
|
(10)
|
|
|
Trading
securities
|
|
104,465
|
|
4,542
|
|
2,200
|
|
Loans held
for sale
|
|
500
|
|
760
|
|
(34)
|
|
Loans
|
|
7,043,683
|
|
7,059,212
|
|
(0)
|
|
Less: Allowance for loan losses
|
|
(192,274)
|
|
(206,280)
|
|
(7)
|
|
Unamortized deferred loan fees, net
|
|
(8,855)
|
|
(8,449)
|
|
5
|
|
Loans, net
|
|
6,842,554
|
|
6,844,483
|
|
(0)
|
|
Federal
Home Loan Bank stock
|
|
47,966
|
|
52,989
|
|
(9)
|
|
Other real
estate owned, net
|
|
74,463
|
|
92,713
|
|
(20)
|
|
Affordable
housing investments, net
|
|
83,835
|
|
78,358
|
|
7
|
|
Premises
and equipment, net
|
|
104,255
|
|
105,961
|
|
(2)
|
|
Customers'
liability on acceptances
|
|
40,714
|
|
37,300
|
|
9
|
|
Accrued
interest receivable
|
|
29,547
|
|
32,226
|
|
(8)
|
|
Goodwill
|
|
316,340
|
|
316,340
|
|
-
|
|
Other
intangible assets, net
|
|
9,147
|
|
11,598
|
|
(21)
|
|
Other
assets
|
|
162,257
|
|
206,768
|
|
(22)
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
10,661,183
|
|
$
10,644,864
|
|
0
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
$
1,172,622
|
|
$
1,074,718
|
|
9
|
|
Interest-bearing deposits:
|
|
|
|
|
|
|
|
NOW
deposits
|
|
500,220
|
|
451,541
|
|
11
|
|
Money
market deposits
|
|
1,020,304
|
|
951,516
|
|
7
|
|
Savings
deposits
|
|
444,083
|
|
420,030
|
|
6
|
|
Time
deposits under $100,000
|
|
886,176
|
|
832,997
|
|
6
|
|
Time
deposits of $100,000 or more
|
|
3,360,828
|
|
3,498,329
|
|
(4)
|
|
Total
deposits
|
|
7,384,233
|
|
7,229,131
|
|
2
|
|
|
|
|
|
|
|
|
|
Securities
sold under agreements to repurchase
|
|
1,400,000
|
|
1,400,000
|
|
-
|
|
Advances
from the Federal Home Loan Bank
|
|
21,200
|
|
225,000
|
|
(91)
|
|
Other
borrowings from financial institutions
|
|
-
|
|
880
|
|
(100)
|
|
Other
borrowings for affordable housing investments
|
|
18,834
|
|
18,920
|
|
(0)
|
|
Long-term
debt
|
|
171,136
|
|
171,136
|
|
-
|
|
Acceptances outstanding
|
|
40,714
|
|
37,300
|
|
9
|
|
Other
liabilities
|
|
52,062
|
|
46,864
|
|
11
|
|
Total
liabilities
|
|
9,088,179
|
|
9,129,231
|
|
(0)
|
|
Commitments and
contingencies
|
|
-
|
|
-
|
|
-
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
Preferred
stock, 10,000,000 shares authorized, 258,000 issued and
outstanding in 2012 and 2011
|
|
252,780
|
|
250,992
|
|
1
|
|
Common
stock, $0.01 par value, 100,000,000 shares authorized,
82,927,085
issued and 78,719,520 outstanding at June 30, 2012, and
82,860,122
issued and 78,652,557 outstanding at December 31, 2011
|
|
829
|
|
829
|
|
-
|
|
Additional
paid-in-capital
|
|
767,218
|
|
765,641
|
|
0
|
|
Accumulated other comprehensive loss, net
|
|
(3,688)
|
|
(8,732)
|
|
58
|
|
Retained
earnings
|
|
673,154
|
|
624,192
|
|
8
|
|
Treasury
stock, at cost (4,207,565 shares at June 30,
2012, and at December 31, 2011)
|
|
(125,736)
|
|
(125,736)
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
Cathay General Bancorp stockholders' equity
|
|
1,564,557
|
|
1,507,186
|
|
4
|
|
Noncontrolling interest
|
|
8,447
|
|
8,447
|
|
-
|
|
Total
equity
|
|
1,573,004
|
|
1,515,633
|
|
4
|
|
Total
liabilities and equity
|
|
$
10,661,183
|
|
$
10,644,864
|
|
0
|
|
|
|
|
|
|
|
|
|
Book value
per common stock share
|
|
$16.44
|
|
$15.75
|
|
4
|
|
Number of
common stock shares outstanding
|
|
78,719,520
|
|
78,652,557
|
|
0
|
|
|
|
|
|
|
|
|
|
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
|
|
|
Three
months ended June 30,
|
|
Six months
ended June 30,
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
(In
thousands, except share and per share data)
|
INTEREST AND DIVIDEND INCOME
|
|
|
|
|
|
|
Loan
receivable, including loan fees
|
|
$
88,761
|
$
89,792
|
|
$
179,462
|
$
180,350
|
Investment
securities- taxable
|
|
17,166
|
23,116
|
|
34,889
|
44,970
|
Investment
securities- nontaxable
|
|
1,039
|
1,055
|
|
2,091
|
2,111
|
Federal
Home Loan Bank stock
|
|
67
|
49
|
|
133
|
96
|
Federal
funds sold and securities
|
|
|
|
|
|
|
purchased
under agreements to resell
|
|
11
|
7
|
|
16
|
48
|
Deposits
with banks
|
|
537
|
320
|
|
1,125
|
541
|
|
|
|
|
|
|
|
Total
interest and dividend income
|
|
107,581
|
114,339
|
|
217,716
|
228,116
|
|
|
|
|
|
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
Time
deposits of $100,000 or more
|
|
8,642
|
10,894
|
|
18,182
|
21,619
|
Other
deposits
|
|
3,868
|
5,374
|
|
7,784
|
11,094
|
Securities
sold under agreements to repurchase
|
|
14,598
|
14,892
|
|
29,253
|
31,063
|
Advances
from Federal Home Loan Bank
|
|
69
|
3,642
|
|
122
|
8,491
|
Long-term
debt
|
|
1,284
|
1,216
|
|
2,604
|
2,422
|
Short-term
borrowings
|
|
-
|
6
|
|
-
|
7
|
|
|
|
|
|
|
|
Total
interest expense
|
|
28,461
|
36,024
|
|
57,945
|
74,696
|
|
|
|
|
|
|
|
Net
interest income before provision for credit losses
|
|
79,120
|
78,315
|
|
159,771
|
153,420
|
Provision/(reversal) for credit losses
|
|
(5,000)
|
10,000
|
|
(9,000)
|
16,000
|
|
|
|
|
|
|
|
Net
interest income after provision for credit losses
|
|
84,120
|
68,315
|
|
168,771
|
137,420
|
|
|
|
|
|
|
|
NON-INTEREST INCOME
|
|
|
|
|
|
|
Securities
gains, net
|
|
2,374
|
5,178
|
|
4,589
|
11,410
|
Letters of
credit commissions
|
|
1,619
|
1,395
|
|
3,145
|
2,673
|
Depository
service fees
|
|
1,383
|
1,399
|
|
2,772
|
2,760
|
Other
operating income
|
|
4,476
|
4,481
|
|
8,177
|
8,236
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
9,852
|
12,453
|
|
18,683
|
25,079
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
20,097
|
17,659
|
|
39,975
|
35,930
|
Occupancy
expense
|
|
3,489
|
3,457
|
|
7,073
|
6,995
|
Computer
and equipment expense
|
|
2,391
|
2,115
|
|
4,854
|
4,298
|
Professional services expense
|
|
5,209
|
4,959
|
|
9,951
|
8,688
|
FDIC and
State assessments
|
|
1,971
|
2,905
|
|
4,460
|
7,222
|
Marketing
expense
|
|
1,483
|
817
|
|
2,889
|
1,512
|
Other real
estate owned expense
|
|
7,061
|
2,262
|
|
11,754
|
2,483
|
Operations
of affordable housing investments
|
|
1,951
|
1,977
|
|
3,911
|
3,953
|
Amortization of core deposit intangibles
|
|
1,404
|
1,460
|
|
2,861
|
2,941
|
Cost
associated with debt redemption
|
|
-
|
5,176
|
|
2,750
|
13,987
|
Other
operating expense
|
|
2,286
|
2,623
|
|
4,735
|
5,184
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
47,342
|
45,410
|
|
95,213
|
93,193
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
46,630
|
35,358
|
|
92,241
|
69,306
|
Income tax
expense
|
|
16,619
|
10,906
|
|
33,166
|
22,640
|
Net
income
|
|
30,011
|
24,452
|
|
59,075
|
46,666
|
Less: net income
attributable to noncontrolling interest
|
|
150
|
150
|
|
301
|
301
|
Net income
attributable to Cathay General Bancorp
|
|
29,861
|
24,302
|
|
58,774
|
46,365
|
|
|
|
|
|
|
|
Dividends
on preferred stock
|
|
(4,121)
|
(4,107)
|
|
(8,238)
|
(8,212)
|
Net income
attributable to common stockholders
|
|
$
25,740
|
$
20,195
|
|
$
50,536
|
$
38,153
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per common share:
|
|
|
|
|
|
|
Basic
|
|
$
0.33
|
$
0.26
|
|
$
0.64
|
$
0.49
|
Diluted
|
|
$
0.33
|
$
0.26
|
|
$
0.64
|
$
0.49
|
|
|
|
|
|
|
|
Cash
dividends paid per common share
|
|
$
0.01
|
$
0.01
|
|
$
0.02
|
$
0.02
|
Basic
average common shares outstanding
|
|
78,710,279
|
78,635,324
|
|
78,694,462
|
78,622,464
|
Diluted
average common shares outstanding
|
|
78,712,172
|
78,637,108
|
|
78,701,152
|
78,636,369
|
|
|
|
|
|
|
|
CATHAY GENERAL BANCORP
AVERAGE
BALANCES – SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited)
|
|
|
For the
three months ended,
|
|
(In
thousands)
|
June 30,
2012
|
|
June 30,
2011
|
|
March 31,
2012
|
|
|
|
|
|
|
|
|
|
Interest-earning assets
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
Loans
(1)
|
$
6,938,638
|
5.15%
|
|
$
6,900,481
|
5.22%
|
|
$
6,997,586
|
5.21%
|
Taxable
investment securities
|
2,353,629
|
2.93%
|
|
2,647,076
|
3.50%
|
|
2,323,166
|
3.07%
|
Tax-exempt
investment securities (2)
|
131,085
|
4.91%
|
|
134,865
|
4.83%
|
|
133,094
|
4.89%
|
FHLB
stock
|
49,197
|
0.54%
|
|
60,047
|
0.33%
|
|
52,627
|
0.50%
|
Federal
funds sold and securities purchased
under
agreements to resell
|
30,989
|
0.14%
|
|
39,231
|
0.07%
|
|
22,802
|
0.09%
|
Deposits
with banks
|
400,372
|
0.54%
|
|
131,968
|
0.97%
|
|
267,157
|
0.88%
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,903,910
|
4.39%
|
|
$
9,913,668
|
4.65%
|
|
$
9,796,432
|
4.54%
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
493,800
|
0.15%
|
|
$
416,437
|
0.20%
|
|
$
465,921
|
0.15%
|
Money
market deposits
|
1,019,393
|
0.57%
|
|
986,362
|
0.81%
|
|
976,109
|
0.57%
|
Savings
deposits
|
446,147
|
0.09%
|
|
390,387
|
0.15%
|
|
424,198
|
0.08%
|
Time
deposits
|
4,312,129
|
1.01%
|
|
4,408,690
|
1.27%
|
|
4,395,102
|
1.08%
|
Total
interest-bearing deposits
|
$
6,271,469
|
0.80%
|
|
$
6,201,876
|
1.05%
|
|
$
6,261,330
|
0.86%
|
Securities
sold under agreements to repurchase
|
1,400,000
|
4.19%
|
|
1,428,407
|
4.18%
|
|
1,400,000
|
4.21%
|
Other
borrowed funds
|
39,368
|
0.70%
|
|
359,031
|
4.08%
|
|
30,117
|
0.71%
|
Long-term
debt
|
171,136
|
3.02%
|
|
171,136
|
2.85%
|
|
171,136
|
3.10%
|
Total
interest-bearing liabilities
|
7,881,973
|
1.45%
|
|
8,160,450
|
1.77%
|
|
7,862,583
|
1.51%
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,110,988
|
|
|
979,392
|
|
|
1,071,387
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,992,961
|
|
|
$
9,139,842
|
|
|
$
8,933,970
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,636,617
|
|
|
$
10,682,900
|
|
|
$
10,551,170
|
|
Total
average equity
|
$
1,563,394
|
|
|
$
1,476,417
|
|
|
$
1,534,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
six months ended,
|
|
|
|
(In
thousands)
|
June 30,
2012
|
|
June 30,
2011
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
Average
Balance
|
Average
Yield/Rate (1) (2)
|
|
|
|
Loans and
leases (1)
|
$
6,968,112
|
5.18%
|
|
$
6,898,804
|
5.27%
|
|
|
|
Taxable
investment securities
|
2,338,397
|
3.00%
|
|
2,659,382
|
3.41%
|
|
|
|
Tax-exempt
investment securities (2)
|
132,090
|
4.90%
|
|
134,195
|
4.88%
|
|
|
|
FHLB
stock
|
50,912
|
0.52%
|
|
61,908
|
0.31%
|
|
|
|
Federal
funds sold and securities purchased
under
agreements to resell
|
26,896
|
0.12%
|
|
60,442
|
0.16%
|
|
|
|
|
|
|
Deposits
with banks
|
333,765
|
0.68%
|
|
150,129
|
0.73%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-earning assets
|
$
9,850,172
|
4.47%
|
|
$
9,964,860
|
4.64%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$
479,861
|
0.15%
|
|
$
414,723
|
0.20%
|
|
|
|
Money
market deposits
|
997,751
|
0.57%
|
|
1,006,455
|
0.83%
|
|
|
|
Savings
deposits
|
435,172
|
0.08%
|
|
385,393
|
0.15%
|
|
|
|
Time
deposits
|
4,353,615
|
1.04%
|
|
4,338,625
|
1.30%
|
|
|
|
Total
interest-bearing deposits
|
$
6,266,399
|
0.83%
|
|
$
6,145,196
|
1.07%
|
|
|
|
Federal
funds purchased
|
-
|
-
|
|
55
|
1.27%
|
|
|
|
Securities
sold under agreements to repurchase
|
1,400,000
|
4.20%
|
|
1,488,171
|
4.21%
|
|
|
|
Other
borrowed funds
|
34,743
|
0.71%
|
|
412,045
|
4.16%
|
|
|
|
Long-term
debt
|
171,136
|
3.06%
|
|
171,136
|
2.85%
|
|
|
|
Total
interest-bearing liabilities
|
7,872,278
|
1.48%
|
|
8,216,603
|
1.83%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
1,091,188
|
|
|
958,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deposits and other borrowed funds
|
$
8,963,466
|
|
|
$
9,175,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average assets
|
$
10,593,893
|
|
|
$
10,705,192
|
|
|
|
|
Total
average equity
|
$
1,549,184
|
|
|
$
1,463,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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