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CATHAY GENERAL BANCORP
Symbol U : CATY
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Cathay General Bancorp Announces Net Income of $28.3 Million, or $0.31 Per Share, For the Fourth Quarter and Net Income of $117.4 Million For the Year Ended December 31, 2012

2013-01-23 16:35 ET - News Release

LOS ANGELES, Jan. 23, 2013 /PRNewswire/ -- Cathay General Bancorp (the "Company"), (NASDAQ: CATY), the holding company for Cathay Bank (the "Bank"), today announced results for the fourth quarter and for the year ended December 31, 2012.

FINANCIAL PERFORMANCE


Three months ended December 31,


Year ended December 31,


2012


2011


2012


2011

Net income

$28.3 million


$27.7 million


$117.4 million


$100.2 million

Net income available to common stockholders

$24.2 million


$23.6 million


$101.0 million


$83.7 million

Basic earnings per common share

$0.31


$0.30


$1.28


$1.06

Diluted earnings per common share

$0.31


$0.30


$1.28


$1.06

Return on average assets

1.06%


1.05%


1.11%


0.94%

Return on average total stockholders' equity

6.97%


7.33%


7.48%


6.78%

Efficiency ratio

53.11%


49.82%


52.37%


50.90%

FULL YEAR HIGHLIGHTS

  • Net income increased $17.2 million, or 17.3%, to $117.4 million for the year ended 2012 compared to net income of $100.2 million for the year ended 2011.
  • Memorandum of Understanding of Cathay Bank was lifted by the CDFI and FDIC as of November 7, 2012. 
  • Strong growth in loans – Commercial loans increased $258.8 million, or 13.9%, during 2012, to $2.1 billion at December 31, 2012, compared to $1.9 billion at December 31, 2011.   Residential mortgage loans increased $174.0 million, or 17.9%, to $1.1 billion at December 31, 2012, from $972.3 million at December 31, 2011.
  • Decrease in non-performing assets – Non-performing assets decreased $149.7 million, or 49.8%, to $150.9 million at December 31, 2012, from $300.6 million at December 31, 2011.
  • Net charge-offs decreased $51.5 million, or 77.9%, to $14.7 million for the year ended 2012 from $66.2 million for the year ended 2011.

"Our loan growth for the fourth quarter was solid at $169.2 million, or a 9% annualized rate and included annualized growth in commercial real estate loans of 7%," commented Dunson Cheng, Chairman of the Board, Chief Executive Officer, and President of the Company.

"With the lifting of the Bank MOU, we expect to open a number of branches during the next two years in our existing regions to better serve our customers" said Peter Wu, Executive Vice Chairman and Chief Operating Officer.

"We expect to maintain steady loan growth in 2013 and are working diligently to be able to repurchase in installments during 2013 the preferred shares issued under the  TARP Capital Purchase Program," concluded Dunson Cheng.

INCOME STATEMENT REVIEW

Net income available to common stockholders for the quarter ended December 31, 2012, was $24.2 million, an increase of $592,000, or 2.5%, compared to a net income available to common stockholders of $23.6 million for the same quarter a year ago.  Diluted earnings per share available to common stockholders for the quarter ended December 31, 2012, was $0.31 compared to $0.30 for the same quarter a year ago due primarily to increases in gains on sale of securities, increases in net interest income, decreases in the provision for credit losses, which were partially offset by increases in costs associated with debt redemption and increases in income tax expense.

Return on average stockholders' equity was 6.97% and return on average assets was 1.06% for the quarter ended December 31, 2012, compared to a return on average stockholders' equity of 7.33% and a return on average assets of 1.05% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $1.8 million, or 2.2%, to $81.1 million during the fourth quarter of 2012 compared to $79.3 million during the same quarter a year ago.  The increase was due primarily to the increase in loans and the prepayment and maturity of FHLB advances and securities sold under agreements to repurchase.

The net interest margin, on a fully taxable-equivalent basis, was 3.28% for the fourth quarter of 2012, compared to 3.26% for the third quarter of 2012, and compared to 3.28% for the fourth quarter of 2011.  The slight increase in the interest margin from last quarter was due primarily to the increase in loans.   

For the fourth quarter of 2012, the yield on average interest-earning assets was 4.25%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.25%, and the cost of interest bearing deposits was 0.65%.  In comparison, for the fourth quarter of 2011, the yield on average interest-earning assets was 4.58%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.60%, and the cost of interest bearing deposits was 0.92%. 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 2 basis points to 3.00% for the quarter ended December 31, 2012, from 2.98% for the same quarter a year ago, primarily for the reasons discussed above.

Provision for credit losses

There was no change in the provision for credit losses for the fourth quarter of 2012 compared to charge of $2.0 million in the fourth quarter of 2011.  The provision for credit losses was based on the review of the adequacy of the allowance for loan losses at December 31, 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:


Three months ended December 31,


Year ended December 31,





2012


2011


2012


2011



(In thousands)


Charge-offs:









  Commercial loans

$  3,228


$     530


$  17,707


$  11,745


  Construction loans- residential

-


2,452


391


20,801


  Construction loans- other

-


654


774


16,699


  Real estate loans (1)

1,265


3,208


13,616


27,327


  Real estate- land loans

177


46


278


1,054


  Installment and other loans

-


-


25


-


     Total charge-offs 

4,670


6,890


32,791


77,626


Recoveries:









  Commercial loans

719


206


1,949


1,774


  Construction loans- residential

76


141


3,788


3,808


  Construction loans- other

452


36


2,365


665


  Real estate loans (1)

2,036


1,874


8,820


4,539


  Real estate- land loans

24


3


1,202


621


  Installment and other loans

-


-


3


-


     Total recoveries

3,307


2,260


18,127


11,407


Net charge-offs

$  1,363


$  4,630


$  14,664


$  66,219











(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 $12.2 million for the fourth quarter of 2012, an increase of $3.2 million, or 35.8%, compared to $9.0 million for the fourth quarter  of 2011. The increase in non-interest income in the fourth quarter of 2012 was primarily due to increases of $3.9 million from gains on sale of securities which were partially offset by an $899,000 decrease in foreign exchange income.      

Non-interest expense

Non-interest expense increased $5.5 million, or 12.6%, to $49.5 million in the fourth quarter of 2012 compared to $44.0 million in the same quarter a year ago.  The efficiency ratio was 53.11% in the fourth quarter of 2012 compared to 49.82% for the same quarter a year ago.

Prepayment penalties increased $4.2 million to $5.9 million in the fourth quarter of 2012 compared to $1.7 million in the same quarter a year ago.  The Company prepaid securities sold under agreements to repurchase of $100.0 million in the fourth quarter of 2012.  Salaries and employee benefits increased $1.5 million, or 8.2%, in the fourth quarter of 2012 compared to the same quarter a year ago primarily due the hiring of new employees as well as the addition of temporary employees related to the upcoming core system conversion.  Partially offsetting the above increases was an $845,000, or 32.1%, decrease in FDIC and State assessments.

Income taxes

The effective tax rate for the fourth quarter of 2012 was 35.1% compared to 34.3% in the fourth 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 $7.43 billion at December 31, 2012, an increase of $369.9 million, or 5.2%, from $7.06 billion at December 31, 2011, primarily due to an increase of $258.8 million, or 13.9%, in commercial loans and an increase of $174.0 million, or 17.9%, in residential mortgage loans offset by a decrease of $56.4 million, or 23.8%, in real estate construction loans and a decrease of $20.9 million, or 9.7%, in equity lines.  The changes in loan composition from December 31, 2011, are presented below:

Type of Loans:

December 31, 2012


December 31, 2011


 % Change 


(Dollars in thousands)



Commercial loans

$            2,127,107


$            1,868,275


14

Residential mortgage loans

1,146,230


972,262


18

Commercial mortgage loans

3,768,452


3,748,897


1

Equity lines

193,852


214,707


(10)

Real estate construction loans

180,950


237,372


(24)

Installment & other loans

12,556


17,699


(29)







Gross loans

$            7,429,147


$            7,059,212


5







Allowance for loan losses

(183,322)


(206,280)


(11)

Unamortized deferred loan fees

(10,238)


(8,449)


21







Total loans, net

$            7,235,587


$            6,844,483


6

 

Total deposits were $7.4 billion at December 31, 2012, an increase of $154.1 million, or 2.1%, from $7.2 billion at December 31, 2011, primarily due to a $235.3 million, or 24.7%, increase in money market deposits, a $194.7 million, or 18.1%, increase in non-interest bearing demand deposits, a $141.6 million, or 31.4%, increase in NOW deposits, and a $53.8 million, or 12.8%, increase in savings deposits, offset by a $188.8 million, or 22.7%, decrease in time deposits under $100,000 and a $282.5 million, or 8.1%, decrease in time deposits of $100,000 or more.  The changes in deposit composition from December 31, 2011, are presented below:

Deposits 

December 31, 2012


December 31, 2011


 % Change 


(Dollars in thousands)



Non-interest-bearing demand deposits

$            1,269,455


$            1,074,718


18

NOW deposits

593,133


451,541


31

Money market deposits

1,186,771


951,516


25

Savings deposits

473,805


420,030


13

Time deposits under $100,000

644,191


832,997


(23)

Time deposits of $100,000 or more

3,215,870


3,498,329


(8)

Total deposits

$            7,383,225


$            7,229,131


2







ASSET QUALITY REVIEW

At December 31, 2012, total non-accrual portfolio loans, excluding loans held for sale, were $103.9 million, an increase of $9.0 million, or 9.4%, from $94.9 million at September 30, 2012, and a decrease of $97.3 million, or 48.4%, from $201.2 million at December 31, 2011.       

The allowance for loan losses was $183.3 million and the allowance for off-balance sheet unfunded credit commitments was $1.4 million at December 31, 2012, which represented the amount believed by management to be sufficient to absorb credit losses inherent in the loan portfolio, including unfunded commitments.  The allowance for credit losses, which is the sum of the allowances for loan losses and for off-balance sheet unfunded credit commitments, was $184.7 million at December 31, 2012, compared to $208.3 million at December 31, 2011, a decrease of $23.6 million, or 11.4%.  The allowance for credit losses represented 2.49% of period-end gross loans, excluding loans held for sale, and 176.7% of non-performing portfolio loans at December 31, 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 December 31, 2012, compared to September 30, 2012, and to December 31, 2011, are highlighted below:

 

(Dollars in thousands)

December 31, 2012


September 30, 2012


% Change


December 31, 2011


% Change

Non-performing assets










Accruing loans past due 90 days or more

$       630


$             -


100


$      6,726


(91)

Non-accrual loans:










  Construction- residential loans

2,984


2,342


27


25,288


(88)

  Construction- non-residential loans

33,315


7,080


371


20,724


61

  Land loans

6,053


7,204


(16)


10,975


(45)

  Commercial real estate loans, excluding land loans

29,651


41,550


(29)


96,809


(69)

  Commercial loans

19,958


23,035


(13)


30,661


(35)

  Residential mortgage loans

11,941


13,733


(13)


16,740


(29)

Total non-accrual loans:

$    103,902


$          94,944


9


$    201,197


(48)

Total non-performing loans

104,532


94,944


10


207,923


(50)

 Other real estate owned

46,384


60,642


(24)


92,713


(50)

Total non-performing assets

$    150,916


$         155,586


(3)


$    300,636


(50)

Accruing  troubled  debt  restructurings (TDRs)

$    144,695


$         170,151


(15)


$    120,016


21

Non-accrual loans held for sale

$                -


$                     -


-


$           760


(100)











Allowance for loan losses

$    183,322


$          184,438


(1)


$    206,280


(11)

Allowance for off-balance sheet credit commitments

1,362


1,610


(15)


2,069


(34)

Allowance for credit losses

$      184,684


$           186,048


(1)


$   208,349


(11)











Total gross loans outstanding, at period-end (1)

$   7,429,147


$        7,259,930


2


$  7,059,212


5











Allowance for loan losses to non-performing loans, at period-end (2)

175.37%


194.26%




99.21%



Allowance for loan losses to gross loans, at period-end (1)

2.47%


2.54%




2.92%



Allowance for credit losses to gross loans, at period-end (1)

2.49%


2.56%




2.95%



(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 $144.7 million at December 31, 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 1.4% at December 31, 2012, compared to 2.8% at December 31, 2011.  Total non-performing portfolio assets decreased $149.7 million, or 49.8%, to $150.9 million at December 31, 2012, compared to $300.6 million at December 31, 2011, primarily due to a $97.3 million decrease in non-accrual loans, a $46.3 million decrease in other real estate owned, and a $6.1 million decrease in accruing loans past due 90 days or more. 

CAPITAL ADEQUACY REVIEW

At December 31, 2012, the Company's Tier 1 risk-based capital ratio of 17.36%, total risk-based capital ratio of 19.12%, and Tier 1 leverage capital ratio of 13.82%, 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 for the year ended December 31, 2012, was $101.0 million, an increase of $17.3 million, or 20.6%, compared to net income attributable to common stockholders of $83.7 million for the same period a year ago due primarily to increases in net interest income, 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, decreases in FDIC and State assessments, and decreases in operation expenses of affordable housing investments, which were partially offset by increases in income tax expenses, increases in litigation accrual expenses, increases in other real estate owned expenses, increases in salaries and incentive compensation expense, and decreases in gains on sale of securities.  Diluted earnings per share was $1.28 compared to $1.06 per share for the same period a year ago.  The net interest margin for the year ended December 31, 2012, increased 7 basis points to 3.28% compared to 3.21% for the year ended December 31, 2011.

Return on average stockholders' equity was 7.48% and return on average assets was 1.11% for the year ended December 31, 2012, compared to a return on average stockholders' equity of 6.78% and a return on average assets of 0.94% for the year ended December 31, 2011.  The efficiency ratio for the year ended December 31, 2012, was 52.37% compared to 50.90% for the year ended December 31, 2011.

CONFERENCE CALL

Cathay General Bancorp will host a conference call this afternoon to discuss its fourth 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 1-866-713-8563 and enter Participant Passcode 12690883. 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; adverse results in legal proceedings; 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 December 31,




Year ended December 31,

(Dollars in thousands, except per share data)


2012


2011


% Change


2012


2011

% Change













FINANCIAL PERFORMANCE












Net interest income before provision for credit losses    


$  81,065


$   79,317


2


$  321,253


$    313,690

2

Provision/(reversal) for credit losses


-


2,000


(100)


(9,000)


27,000

(133)

Net interest income after provision for credit losses


81,065


77,317


5


330,253


286,690

15

Non-interest income


12,202


8,986


36


46,507


50,892

(9)

Non-interest expense


49,532


43,990


13


192,589


185,566

4

Income before income tax expense


43,735


42,313


3


184,171


152,016

21

Income tax expense


15,276


14,459


6


66,128


51,261

29

Net income


28,459


27,854


2


118,043


100,755

17

  Net income attributable to noncontrolling interest


153


153


-


605


605

-

Net income attributable to Cathay General Bancorp


$   28,306


$    27,701


2


$  117,438


$   100,150

17

Dividends on preferred stock 


(4,127)


(4,114)


0


(16,488)


(16,437)

0

Net income attributable to common stockholders


$   24,179


$    23,587


3


$  100,950


$     83,713

21













Net income attributable to common stockholders per common share:










Basic


$       0.31


$       0.30


3


$       1.28


$       1.06

21

Diluted


$       0.31


$       0.30


3


$       1.28


$       1.06

21













 Cash dividends paid per common share  


$       0.01


$       0.01


-


$       0.04


$        0.04

-

























SELECTED RATIOS












Return on average assets


1.06%


1.05%


1


1.11%


0.94%

18

Return on average total stockholders' equity


6.97%


7.33%


(5)


7.48%


6.78%

10

Efficiency ratio


53.11%


49.82%


7


52.37%


50.90%

3

Dividend payout ratio


2.78%


2.84%


(2)


2.68%


3.14%

(15)

























YIELD ANALYSIS (Fully taxable equivalent)












Total interest-earning assets


4.25%


4.58%


(7)


4.38%


4.63%

(6)

Total interest-bearing liabilities


1.25%


1.60%


(22)


1.39%


1.73%

(20)

Net interest spread


3.00%


2.98%


1


2.99%


2.90%

2

Net interest margin


3.28%


3.28%


-


3.28%


3.21%

2





























































CAPITAL RATIOS


December 31, 2012


December 31, 2011


September 30, 2012


Well Capitalized Requirements


Minimum Regulatory Requirements


Tier 1 risk-based capital ratio


17.36%


15.97%


17.08%


6.0%


4.0%


Total risk-based capital ratio


19.12%


17.85%


18.96%


10.0%


8.0%


Tier 1 leverage capital ratio


13.82%


12.93%


13.57%


5.0%


4.0%














 

 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 









(In thousands, except share and per share data)


December 31, 2012


December 31, 2011


% change








Assets







Cash and due from banks


$       144,909


$    117,888


23

Short-term investments and interest bearing deposits


411,983


294,956


40

Securities held-to-maturity (market value of $823,906 in 2012 and $1,203,977 in 2011)


773,768


1,153,504


(33)

Securities available-for-sale (amortized cost of $1,290,676 in 2012 and $1,309,521 in 2011)


1,291,480


1,294,478


(0)

Trading securities


4,703


4,542


4

Loans held for sale


-


760


(100)

Loans


7,429,147


7,059,212


5

Less:  Allowance for loan losses


(183,322)


(206,280)


(11)

 Unamortized deferred loan fees, net


(10,238)


(8,449)


21

 Loans, net


7,235,587


6,844,483


6

Federal Home Loan Bank stock


41,272


52,989


(22)

Other real estate owned, net


46,384


92,713


(50)

Affordable housing investments, net


85,037


78,358


9

Premises and equipment, net


102,613


105,961


(3)

Customers' liability on acceptances


41,271


37,300


11

Accrued interest receivable


26,015


32,226


(19)

Goodwill


316,340


316,340


-

Other intangible assets, net


6,132


11,598


(47)

Other assets


166,595


206,768


(19)








Total assets


$    10,694,089


$   10,644,864


0








Liabilities and Stockholders' Equity







Deposits







Non-interest-bearing demand deposits


$     1,269,455


$     1,074,718


18

Interest-bearing deposits:







NOW deposits


593,133


451,541


31

Money market deposits


1,186,771


951,516


25

Savings deposits


473,805


420,030


13

Time deposits under $100,000


644,191


832,997


(23)

Time deposits of $100,000 or more


3,215,870


3,498,329


(8)

Total deposits


7,383,225


7,229,131


2








Securities sold under agreements to repurchase


1,250,000


1,400,000


(11)

Advances from the Federal Home Loan Bank


146,200


225,000


(35)

Other borrowings from financial institutions


-


880


(100)

Other borrowings for affordable housing investments


18,713


18,920


(1)

Long-term debt


171,136


171,136


-

Acceptances outstanding


41,271


37,300


11

Other liabilities


54,040


46,864


15

Total liabilities


9,064,585


9,129,231


(1)

     Commitments and contingencies


-


-


-

Stockholders' Equity







Preferred stock, 10,000,000 shares authorized, 258,000 issued







and outstanding in 2012 and 2011


254,580


250,992


1

Common stock, $0.01 par value, 100,000,000 shares authorized,







82,985,853 issued and 78,778,288 outstanding at December 31, 2012, and







82,860,122 issued and 78,652,557 outstanding at December 31, 2011


830


829


0

Additional paid-in-capital


768,925


765,641


0

Accumulated other comprehensive income/(loss), net


465


(8,732)


105

Retained earnings


721,993


624,192


16

Treasury stock, at cost (4,207,565 shares at December 31, 2012, and at December 31, 2011)


(125,736)


(125,736)


-








Total Cathay General Bancorp stockholders' equity


1,621,057


1,507,186


8

Noncontrolling interest


8,447


8,447


-

Total equity


1,629,504


1,515,633


8

Total liabilities and equity


$   10,694,089


$   10,644,864


0








Book value per common share


$17.12


$15.75


9

Number of common shares outstanding


78,778,288


78,652,557


0

 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 








Three months ended December 31,


Year ended December 31,



2012

2011


2012

2011



(In thousands, except share and per share data)

INTEREST AND  DIVIDEND INCOME







Loan receivable, including loan fees


$       91,157

$       91,640


$    360,643

$    364,580

Investment securities- taxable


12,349

17,809


62,395

83,083

Investment securities- nontaxable


1,034

1,053


4,161

4,218

Federal Home Loan Bank stock


295

43


485

177

Federal funds sold and securities 







purchased under agreements to resell


-

2


18

83

Deposits with banks


446

529


2,042

1,430








Total interest and dividend income


105,281

111,076


429,744

453,571








INTEREST EXPENSE







Time deposits of $100,000 or more


7,289

10,089


33,441

42,204

Other deposits


2,887

4,139


13,932

20,010

Securities sold under agreements to repurchase


12,712

14,830


55,699

60,733

Advances from Federal Home Loan Bank


74

1,441


270

12,033

Long-term debt


1,254

1,260


5,149

4,890

Short-term borrowings


-

-


-

11








Total interest expense


24,216

31,759


108,491

139,881








Net interest income before provision for credit losses


81,065

79,317


321,253

313,690

Provision/(reversal) for credit losses


-

2,000


(9,000)

27,000








Net interest income after provision for credit losses


81,065

77,317


330,253

286,690








NON-INTEREST INCOME







Securities gains, net


4,785

888


18,026

21,131

Letters of credit commissions


1,443

1,531


6,316

5,644

Depository service fees


1,339

1,319


5,453

5,420

Other operating income


4,635

5,248


16,712

18,697








Total non-interest income


12,202

8,986


46,507

50,892








NON-INTEREST EXPENSE







Salaries and employee benefits


19,951

18,438


78,377

71,849

Occupancy expense


3,682

3,516


14,608

14,225

Computer and equipment expense


2,397

2,071


9,591

8,508

Professional services expense


6,544

6,675


21,768

20,209

FDIC and State assessments


1,785

2,630


8,339

12,494

Marketing expense


1,199

755


4,607

3,175

Other real estate owned expense


1,568

1,980


15,116

10,583

Operations of affordable housing investments 


1,919

2,098


6,306

8,153

Amortization of core deposit intangibles


1,398

1,457


5,663

5,859

Cost associated with debt redemption


5,920

1,704


12,120

20,231

Other operating expense


3,169

2,666


16,094

10,280








Total non-interest expense


49,532

43,990


192,589

185,566








Income before income tax expense


43,735

42,313


184,171

152,016

Income tax expense


15,276

14,459


66,128

51,261

Net income


28,459

27,854


118,043

100,755

     Less: net income attributable to noncontrolling interest


153

153


605

605

Net income attributable to Cathay General Bancorp


28,306

27,701


117,438

100,150








Dividends on preferred stock


(4,127)

(4,114)


(16,488)

(16,437)

Net income attributable to common stockholders


$       24,179

$       23,587


$    100,950

$      83,713








Net income attributable to common stockholders per common share:







Basic


$           0.31

$           0.30


$          1.28

$          1.06

Diluted


$           0.31

$           0.30


$          1.28

$          1.06








Cash dividends paid per common share


$           0.01

$           0.01


$          0.04

$          0.04

Basic average common shares outstanding


78,757,798

78,647,680


78,719,133

78,633,317

Diluted average common shares outstanding


78,759,222

78,648,591


78,723,297

78,640,652

 

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

 





For the three months ended,


(In thousands)

December 31, 2012


December 31, 2011


September 30, 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)

$   7,318,749

4.96%


$  7,061,140

5.15%


$   7,122,569

5.03%

Taxable investment securities 

2,005,074

2.45%


2,316,940

3.05%


2,188,205

2.76%

Tax-exempt investment securities  (2)

130,927

4.83%


133,856

4.80%


131,024

4.84%

FHLB stock

43,290

2.71%


54,835

0.31%


46,702

0.49%

Federal funds sold and securities purchased









under agreements to resell

-

-


9,130

0.07%


6,413

0.12%

Deposits with banks

405,467

0.44%


90,301

2.32%


394,830

0.47%










Total interest-earning assets

$  9,903,507

4.25%


$   9,666,202

4.58%


$   9,889,743

4.32%










Interest-bearing liabilities









Interest-bearing demand deposits

$   568,762

0.16%


$  444,170

0.15%


$      535,708

0.15%

Money market deposits

1,200,528

0.55%


956,313

0.63%


1,041,986

0.55%

Savings deposits

469,249

0.08%


421,381

0.09%


464,091

0.08%

Time deposits

3,958,704

0.83%


4,312,235

1.15%


4,129,075

0.91%

Total interest-bearing deposits

$  6,197,243

0.65%


$  6,134,099

0.92%


$   6,170,860

0.72%

Securities sold under agreements to repurchase

1,288,587

3.92%


1,407,076

4.18%


1,358,152

4.02%

Other borrowed funds

41,290

0.71%


169,386

3.38%


40,030

0.74%

Long-term debt

171,136

2.92%


171,136

2.92%


171,136

3.00%

Total interest-bearing liabilities

7,698,256

1.25%


7,881,697

1.60%


7,740,178

1.35%










Non-interest-bearing demand deposits

1,236,304



1,052,501



1,209,253











Total deposits and other borrowed funds

$   8,934,560



$  8,934,198



$   8,949,431











Total average assets

$  10,641,799



$  10,513,596



$ 10,637,868


Total average equity

$    1,625,065



$    1,508,717



$   1,592,696





















Year ended,




(In thousands)

December 31, 2012


December 31, 2011












Interest-earning assets

Average Balance

Average Yield/Rate (1) (2)


Average
Balance

Average Yield/Rate (1) (2)




Loans and leases (1)

$   7,095,076

5.08%


$   6,960,536

5.24%




Taxable investment securities 

2,216,857

2.81%


2,484,629

3.34%




Tax-exempt investment securities  (2)

131,530

4.87%


134,245

4.83%




FHLB stock

47,938

1.01%


58,999

0.30%




Federal funds sold and securities purchased









under agreements to resell

14,986

0.12%


84,493

0.10%




Deposits with banks

367,138

0.56%


113,566

1.26%













Total interest-earning assets

$  9,873,525

4.38%


$   9,836,468

4.63%













Interest-bearing liabilities









Interest-bearing demand deposits

$   516,246

0.15%


$   426,252

0.18%




Money market deposits

1,059,841

0.56%


979,253

0.75%




Savings deposits

451,022

0.08%


411,953

0.12%




Time deposits

4,197,906

0.96%


4,323,833

1.24%




Total interest-bearing deposits

$  6,225,015

0.76%


$  6,141,291

1.01%




Federal funds purchased

-

-


27

1.29%




Securities sold under agreements to repurchase

1,361,475

4.09%


1,448,363

4.19%




Other borrowed funds

37,717

0.72%


318,607

3.78%




Long-term debt

171,136

3.01%


171,136

2.86%




Total interest-bearing liabilities

7,795,343

1.39%


8,079,424

1.73%













Non-interest-bearing demand deposits

1,157,343



996,215














Total deposits and other borrowed funds

$   8,952,686



$  9,075,639














Total average assets

$ 10,617,004



$  10,629,217





Total average equity

$    1,579,195



$   1,485,545














(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

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