CATHAY GENERAL BANCORP 
By 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 Year ended December
December 31, 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 Average Yield/Rate (1) (2)
Balance
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
