Cathay General Bancorp Announces Net Income of $29.9 Million, or $0.33 Per Share, For the Second Quarter 2012

Jul 17, 2012, 16:30 ET from Cathay General Bancorp

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



RELATED LINKS

http://www.cathaybank.com