Cathay General Bancorp (the “Company”, “we”, “us”, or “our”)
(Nasdaq: CATY), the holding company for Cathay Bank, today
announced its unaudited financial results for the quarter ended
September 30, 2023. The Company reported net income of $82.4
million, or $1.13 per share, for the third quarter of 2023.
FINANCIAL PERFORMANCE
Three months ended (unaudited) September 30, 2023 June 30, 2023
September 30, 2022 Net income $ 82.4 million $ 93.2 million $99.0
million Basic earnings per common share
$1.14
$1.29
$1.34
Diluted earnings per common share
$1.13
$1.28
$1.33
Return on average assets
1.42%
1.67%
1.81%
Return on average total stockholders' equity
12.36%
14.47%
15.94%
Efficiency ratio
48.57%
45.36%
36.35%
THIRD QUARTER HIGHLIGHTS
- Total deposits increased by $538.6 million, or 11.6%
annualized, to $19.6 billion in the third quarter of 2023.
- Total gross loans increased by $71.0 million, or 1.6%
annualized, to $19.0 billion in the third quarter of 2023.
- Diluted earnings per share decreased to $1.13 for the third
quarter of 2023 compared to $1.28 for the second quarter of 2023
due in part to changes in equity securities valuations.
- Our net interest margin declined slightly from 3.44% in the
second quarter to 3.38% in the third quarter.
“For the third quarter of 2023, our total deposits increased by
$538.6 million or 11.6% annualized to $19.6 billion. Our net
interest margin declined slightly from 3.44% in the second quarter
to 3.38% in the third quarter,” commented Chang M. Liu, President
and Chief Executive Officer of the Company.
INCOME STATEMENT REVIEW THIRD QUARTER 2023 COMPARED TO
THE SECOND QUARTER 2023
Net income for the quarter ended September 30, 2023 was $82.4
million, a decrease of $10.8 million, or 11.6%, compared to net
income of $93.2 million for the second quarter of 2023. Diluted
earnings per share for the third quarter of 2023 was $1.13 per
share compared to $1.28 per share for the second quarter of 2023.
Net income for the third quarter included a $6.2 million unrealized
loss on equity securities or $0.06 per diluted share, in the third
quarter of 2023 compared to a $10.7 million unrealized gain on
equity securities, or $0.10 per diluted share, for the second
quarter of 2023.
Return on average stockholders’ equity was 12.36% and return on
average assets was 1.42% for the quarter ended September 30, 2023,
compared to a return on average stockholders’ equity of 14.47% and
a return on average assets of 1.67% in the second quarter of
2023.
Net interest income before provision for credit losses
Net interest income before provision for credit losses increased
$4.1 million, or 2.3%, to $185.6 million during the third quarter
of 2023, compared to $181.5 million in the second quarter of 2023.
The increase was due primarily to an increase in interest income
from loans and securities, partially offset by an increase in
deposit interest expense.
The net interest margin was 3.38% for the third quarter of 2023
compared to 3.44% for the second quarter of 2023.
For the third quarter of 2023, the yield on average
interest-earning assets was 5.89%, the cost of funds on average
interest-bearing liabilities was 3.33%, and the cost of
interest-bearing deposits was 3.23%. In comparison, for the second
quarter of 2023, the yield on average interest-earning assets was
5.68%, the cost of funds on average interest-bearing liabilities
was 2.99%, and the cost of interest-bearing deposits was 2.91%. The
increase in the costs of interest-bearing liabilities was mainly a
result of higher interest rates on interest bearing deposits. The
net interest spread, defined as the difference between the yield on
average interest-earning assets and the cost of funds on average
interest-bearing liabilities, was 2.56% for the third quarter of
2023, compared to 2.69% for the second quarter of 2023.
Provision for credit losses
The Company recorded a provision for credit losses of $7.0
million in the third quarter of 2023 compared with $9.2 million in
the second quarter of 2023. As of September 30, 2023, the allowance
for credit losses, comprised of the reserve for loan losses and the
reserve for unfunded loan commitments, increased $312 thousand to
$166.0 million, or 0.87% of gross loans, compared to $165.6
million, or 0.87% of gross loans, as of June 30, 2023.
Three months ended Nine months ended September 30,
September 30, 2023
June 30, 2023
September 30, 2022
2023
2022
(In thousands) (Unaudited)
Charge-offs: Commercial loans
$ 6,254
$ 2,448
$ 2,091
$ 12,517
$ 2,362
Real estate loans (1)
1,221
34
137
5,341
138
Installment and other loans
8
1
—
15
—
Total charge-offs
7,483
2,483
2,228
17,873
2,500
Recoveries: Commercial loans
611
442
1,576
1,564
2,109
Construction loans
—
—
—
—
6
Real estate loans (1)
261
61
95
2,862
336
Total recoveries
872
503
1,671
4,426
2,451
Net charge-offs/(recoveries)
$ 6,611
$ 1,980
$ 557
$ 13,447
$ 49
(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), wealth management fees, and other sources of fee income,
was $7.8 million for the third quarter of 2023, a decrease of $15.3
million, or 66.2%, compared to $23.1 million for the second quarter
of 2023. The decrease was primarily due to a $16.9 million decrease
in unrealized gains on equity securities offset, in part, by a $1.5
million increase in commissions from wealth management, when
compared to the second quarter of 2023.
Non-interest expense
Non-interest expense increased $1.2 million, or 1.3%, to $94.0
million in the third quarter of 2023 compared to $92.8 million in
the second quarter of 2023. The increase in non-interest expense in
the third quarter of 2023 was primarily due to an increase of $1.7
million in salaries and employee benefits, an increase of $1.4
million in amortization expense of investments in low-income
housing and alternative energy partnerships, offset, in part, by a
decrease of $1.0 million in professional services expenses when
compared to the second quarter of 2023. The efficiency ratio,
defined as non-interest expense divided by the sum of net interest
income before provision for loan losses plus non-interest income,
was 48.57% in the third quarter of 2023 compared to 45.36% for the
second quarter of 2023.
Income taxes
The effective tax rate for the third quarter of 2023 was 10.95%
compared to 9.20% for the second quarter of 2023. The effective tax
rate includes the impact of alternative energy investments,
including the impact of a new solar tax credit fund that closed in
the second quarter of 2023, and low-income housing tax credits.
BALANCE SHEET REVIEW
Gross loans were $19.02 billion as of September 30, 2023, an
increase of $71.0 million, or 0.4%, from $18.95 billion as of June
30, 2023. The increase from June 30, 2023 was primarily due to an
increase of $218.3 million, or 2.3%, in commercial mortgage loans,
and an increase of $143.4 million, or 2.6%, in residential mortgage
loans offset, in part, by a decrease of $227.3 million, or 6.8%, in
commercial loans, a decrease of $47.4 million, or 9.1%, in real
estate construction loans, and a decrease of $18.2 million, or
6.7%, in home equity loans.
The loan balances and composition as of September 30, 2023,
compared to June 30, 2023, and September 30, 2022, are presented
below:
September 30, 2023 June 30, 2023 September 30, 2022 (In thousands)
(Unaudited) Commercial loans
$ 3,090,609
$ 3,317,868
$ 3,367,437
Residential mortgage loans
5,685,844
5,542,466
5,130,650
Commercial mortgage loans
9,511,805
9,293,475
8,677,733
Equity lines
253,826
272,055
350,448
Real estate construction loans
474,294
521,673
573,421
Installment and other loans
7,444
5,257
7,114
Gross loans
$ 19,023,822
$ 18,952,794
$ 18,106,803
Allowance for loan losses
(154,619)
(155,109)
(148,817)
Unamortized deferred loan fees
(9,521)
(9,497)
(6,936)
Total loans, net
$ 18,859,682
$ 18,788,188
$ 17,951,050
Total deposits were $19.64 billion as of September 30, 2023, an
increase of $538.6 million, or 2.8%, from $19.10 billion as of June
30, 2023.
The deposit balances and composition as of September 30, 2023,
compared to June 30, 2023, and September 30, 2022, are presented
below:
September 30, 2023 June 30, 2023 September 30, 2022 (In thousands)
(Unaudited) Non-interest-bearing demand deposits
$ 3,623,483
$ 3,561,237
$ 4,398,152
NOW deposits
2,454,878
2,404,470
2,570,036
Money market deposits
3,222,612
3,033,868
4,935,266
Savings deposits
1,131,352
1,131,602
1,128,823
Time deposits
9,203,263
8,965,826
5,543,474
Total deposits
$ 19,635,588
$ 19,097,003
$ 18,575,751
ASSET QUALITY REVIEW
As of September 30, 2023, total non-accrual loans were $77.3
million, an increase of $8.3 million, or 12.0%, from $69.0 million
as of June 30, 2023.
The allowance for loan losses was $154.6 million and the
allowance for off-balance sheet unfunded credit commitments was
$11.4 million as of September 30, 2023. The allowances represent
the amount estimated by management to be appropriate to absorb
expected credit losses inherent in the loan portfolio, including
unfunded credit commitments. We reported net charge-offs of $6.6
million for the three months ended September 30, 2023, of which
$4.3 million had been reserved for in prior quarters. The allowance
for loan losses represented 0.81% of period-end gross loans, and
195.09% of non-performing loans as of September 30, 2023. The
comparable ratios were 0.82% of period-end gross loans, and 206.89%
of non-performing loans as of June 30, 2023.
The changes in non-performing assets and modifications to
borrowers experiencing financial difficulties as of September 30,
2023, compared to June 30, 2023, and September 30, 2022, are
presented below:
(Dollars in thousands) (Unaudited) September 30, 2023 June 30, 2023
%Change September 30, 2022 %Change
Non-performing assets
Accruing loans past due 90 days or more
$
1,924
$
5,968
(68
)
$
3,172
(39
)
Non-accrual loans: Construction loans
16,992
—
—
—
—
Commercial mortgage loans
32,539
39,558
(18
)
26,911
21
Commercial loans
14,661
17,574
(17
)
26,604
(45
)
Residential mortgage loans
13,138
11,872
11
14,601
(10
)
Installment and other loans
—
—
—
9
(100
)
Total non-accrual loans
$
77,330
$
69,004
12
$
68,125
14
Total non-performing loans
79,254
74,972
6
71,297
11
Other real estate owned
14,407
4,067
254
4,067
254
Total non-performing assets
$
93,661
$
79,039
18
$
75,364
24
Accruing loan modifications to borrowers experiencing
financialdifficulties (1)
$
1,489
$
—
—
$
—
—
Accruing troubled debt restructurings (TDRs)
$
—
$
—
—
$
15,208
(100
)
Allowance for loan losses
$
154,619
$
155,109
(0
)
$
148,817
4
Total gross loans outstanding, at period-end
$
19,023,822
$
18,952,794
0
$
18,106,803
5
Allowance for loan losses to non-performing loans, at
period-end
195.09
%
206.89
%
208.73
%
Allowance for loan losses to gross loans, at period-end
0.81
%
0.82
%
0.82
%
(1) Beginning after January 1, 2023, modifications are reported
in accordance with the new guidance under ASU 2022-02.
The ratio of non-performing assets to total assets was 0.41% as
of September 30, 2023, compared to 0.34% as of June 30, 2023. Total
non-performing assets increased $14.7 million, or 18.6%, to $93.7
million as of September 30, 2023, compared to $79.0 million as of
June 30, 2023, primarily due to an increase of $10.3 million, or
254.2%, in other real estate owned, an increase of $8.3 million, or
12.1%, in non-accrual loans offset, in part, by a decrease of $4.0
million, or 67.8%, in accruing loans past due 90 days or more.
CAPITAL ADEQUACY REVIEW
As of September 30, 2023, the Company’s Tier 1 risk-based
capital ratio of 12.70%, total risk-based capital ratio of 14.21%,
and Tier 1 leverage capital ratio of 10.44%, calculated under the
Basel III capital rules, 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 8%, 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%. As of June 30, 2023, the Company’s Tier 1
risk-based capital ratio was 12.38%, total risk-based capital ratio
was 13.88%, and Tier 1 leverage capital ratio was 10.45%.
CONFERENCE CALL
Cathay General Bancorp will host a conference call to discuss
its third quarter 2023 financial results this afternoon, Monday,
October 23, 2023, 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 1-833-816-1377 and refer
to Conference Code 10183158. The presentation accompanying this
call and access to the live webcast is available on our site at
www.cathaygeneralbancorp.com and a replay of the webcast will be
archived for one year within 24 hours after the event.
ABOUT CATHAY GENERAL BANCORP
Cathay General Bancorp is a publicly traded company (Nasdaq:
CATY) and is the holding company for Cathay Bank, a California
state-chartered bank. Founded in 1962, Cathay Bank offers a wide
range of financial services and currently operate over 60 branches
across the United States in California, New York, Washington,
Texas, Illinois, Massachusetts, Maryland, Nevada, and New Jersey.
Overseas, it has a branch outlet in Hong Kong, and a representative
office in Beijing, Shanghai, and Taipei. To learn more about Cathay
Bank, please visit www.cathaybank.com. Cathay General Bancorp’s
website is at www.cathaygeneralbancorp.com. Information set forth
on such websites is not incorporated into this press release.
FORWARD-LOOKING STATEMENTS
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,” “continue,”
“could,” “estimates,” “expects,” “hopes,” “intends,” “may,”
“plans,” “projects,” “predicts,” “potential,” “possible,”
“optimistic,” “seeks,” “shall,” “should,” “will,” 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 local, regional, national and
international business, market and economic conditions and events
and the impact they may have on us, our customers and our
operations, assets and liabilities; possible additional provisions
for loan losses and charge-offs; credit risks of lending activities
and deterioration in asset or credit quality; extensive laws and
regulations and supervision that we are subject to including
potential future supervisory action by bank supervisory
authorities; increased costs of compliance and other risks
associated with changes in regulation; higher capital requirements
from the implementation of the Basel III capital standards;
compliance with the Bank Secrecy Act and other money laundering
statutes and regulations; potential goodwill impairment; liquidity
risk; fluctuations in interest rates; risks associated with
acquisitions and the expansion of our business into new markets;
inflation and deflation; real estate market conditions and the
value of real estate collateral; our ability to generate
anticipated returns on our investments and financings, including in
tax-advantaged projects; environmental liabilities; our ability to
compete with larger competitors; our ability to retain key
personnel; successful management of reputational risk; natural
disasters, public health crises and geopolitical events; general
economic or business conditions in Asia, and other regions where
Cathay Bank has operations; failures, interruptions, or security
breaches of our information systems; our ability to adapt our
systems to technological changes; risk management processes and
strategies; adverse results in legal proceedings; certain
provisions in our charter and bylaws that may affect acquisition of
the Company; 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; issuance of preferred
stock; successfully raising additional capital, if needed, and the
resulting dilution of interests of holders of our common stock; the
soundness of other financial institutions; and general competitive,
economic political, and market conditions and fluctuations.
These and other factors are further described in Cathay General
Bancorp’s Annual Report on Form 10-K for the year ended December
31, 2022 (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. Any forward-looking statement
speaks only as of the date on which it is made, and, except as
required by law, we undertake no obligation to update or review any
forward-looking statement to reflect circumstances, developments or
events occurring after the date on which the statement is made or
to reflect the occurrence of unanticipated events.
CATHAY GENERAL BANCORP
CONSOLIDATED FINANCIAL
HIGHLIGHTS
(Unaudited)
Three months ended
Nine months ended September
30,
(Dollars in thousands, except per share data)
September 30, 2023
June 30, 2023
September 30, 2022
2023
2022
Financial performance Net interest income before
provision for credit losses
$
185,640
$
181,533
$
197,529
$
559,608
$
531,883
Provision for credit losses
7,000
9,155
2,000
24,255
13,143
Net interest income after provision for credit losses
178,640
172,378
195,529
535,353
518,740
Non-interest income
7,837
23,110
9,876
45,191
44,726
Non-interest expense
93,973
92,821
75,388
269,980
222,208
Income before income tax expense
92,504
102,667
130,017
310,564
341,258
Income tax expense
10,133
9,447
30,982
38,966
78,217
Net income
$
82,371
$
93,220
$
99,035
$
271,598
$
263,041
Net income per common share Basic
$
1.14
$
1.29
$
1.34
$
3.74
$
3.52
Diluted
$
1.13
$
1.28
$
1.33
$
3.73
$
3.50
Cash dividends paid per common share
$
0.34
$
0.34
$
0.34
$
1.02
$
1.02
Selected ratios Return on average assets
1.42
%
1.67
%
1.81
%
1.61
%
1.66
%
Return on average total stockholders’ equity
12.36
%
14.47
%
15.94
%
14.04
%
14.35
%
Efficiency ratio
48.57
%
45.36
%
36.35
%
44.64
%
38.54
%
Dividend payout ratio
29.95
%
26.46
%
25.30
%
27.22
%
28.94
%
Yield analysis (Fully taxable equivalent)
Total interest-earning assets
5.89
%
5.68
%
4.38
%
5.71
%
3.91
%
Total interest-bearing liabilities
3.33
%
2.99
%
0.78
%
2.94
%
0.53
%
Net interest spread
2.56
%
2.69
%
3.60
%
2.77
%
3.38
%
Net interest margin
3.38
%
3.44
%
3.83
%
3.52
%
3.54
%
Capital ratios September 30, 2023 June 30,
2023 September 30, 2022 Tier 1 risk-based capital ratio
12.70
%
12.38
%
12.06
%
Total risk-based capital ratio
14.21
%
13.88
%
13.59
%
Tier 1 leverage capital ratio
10.44
%
10.45
%
10.02
%
.
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands, except share and per share data) September
30, 2023 June 30, 2023 September 30, 2022
Assets Cash
and due from banks
$ 145,580
$ 187,886
$ 200,051
Short-term investments and interest bearing deposits
1,017,354
1,294,379
1,063,294
Securities available-for-sale (amortized cost of $1,684,951 at
September 30, 2023, $1,629,357 at June 30, 2023 and $1,577,311 at
September 30, 2022)
1,508,798
1,487,321
1,414,411
Loans
19,023,822
18,952,794
18,106,803
Less: Allowance for loan losses
(154,619)
(155,109)
(148,817)
Unamortized deferred loan fees,
net
(9,521)
(9,497)
(6,936)
Loans, net
18,859,682
18,788,188
17,951,050
Equity securities
31,456
37,674
23,123
Federal Home Loan Bank stock
17,250
25,242
17,250
Other real estate owned, net
14,407
4,067
4,067
Affordable housing investments and alternative energy partnerships,
net
332,903
323,984
325,439
Premises and equipment, net
91,033
92,090
96,419
Customers’ liability on acceptances
16,900
4,364
6,899
Accrued interest receivable
90,875
86,211
71,177
Goodwill
375,696
375,696
375,696
Other intangible assets, net
4,725
4,992
6,948
Right-of-use assets- operating leases
30,586
31,399
30,679
Other assets
307,284
284,945
303,628
Total assets
$ 22,844,529
$ 23,028,438
$ 21,890,131
Liabilities and Stockholders’ Equity Deposits:
Non-interest-bearing demand deposits
$ 3,623,483
$ 3,561,237
$ 4,398,152
Interest-bearing deposits: NOW deposits
2,454,878
2,404,470
2,570,036
Money market deposits
3,222,612
3,033,868
4,935,266
Savings deposits
1,131,352
1,131,602
1,128,823
Time deposits
9,203,263
8,965,826
5,543,474
Total deposits
19,635,588
19,097,003
18,575,751
Advances from the Federal Home Loan Bank
15,000
815,000
360,000
Other borrowings for affordable housing investments
22,374
22,428
22,651
Long-term debt
119,136
119,136
119,136
Acceptances outstanding
16,900
4,364
6,899
Lease liabilities - operating leases
32,962
33,870
33,931
Other liabilities
363,833
333,966
352,204
Total liabilities
20,205,793
20,425,767
19,470,572
Stockholders' equity
2,638,736
2,602,671
2,419,559
Total liabilities and equity
$ 22,844,529
$ 23,028,438
$ 21,890,131
Book value per common share
$ 36.35
$ 35.87
$ 32.67
Number of common shares outstanding
72,586,992
72,563,169
73,411,960
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
Nine months ended September
30,
September 30, 2023
June 30, 2023
September 30, 2022
2023
2022
(In thousands, except share and
per share data)
Interest and Dividend Income Loan receivable, including loan
fees
$
293,108
$
273,478
$
211,541
$
827,765
$
558,657
Investment securities
12,698
12,370
7,483
36,832
18,059
Federal Home Loan Bank stock
355
298
258
957
774
Deposits with banks
17,307
13,959
6,732
43,405
10,003
Total interest and dividend income
323,468
300,105
226,014
908,959
587,493
Interest Expense Time deposits
90,022
79,975
10,218
234,171
22,002
Other deposits
38,207
30,659
13,871
92,683
25,894
Advances from Federal Home Loan Bank
6,779
5,498
2,941
14,875
3,396
Long-term debt
1,726
1,552
1,455
4,721
4,318
Short-term borrowings
1,094
888
—
2,901
—
Total interest expense
137,828
118,572
28,485
349,351
55,610
Net interest income before provision for credit losses
185,640
181,533
197,529
559,608
531,883
Provision for credit losses
7,000
9,155
2,000
24,255
13,143
Net interest income after provision for credit losses
178,640
172,378
195,529
535,353
518,740
Non-Interest Income Net (losses)/gains from equity
securities
(6,218
)
10,663
(3,661
)
9,298
1,358
Debt securities losses, net
—
—
—
(3,000
)
—
Letters of credit commissions
1,738
1,664
1,609
4,972
4,767
Depository service fees
1,536
1,641
1,690
5,009
4,993
Wealth management fees
5,150
3,639
4,184
12,686
12,494
Other operating income
5,631
5,503
6,054
16,226
21,114
Total non-interest income
7,837
23,110
9,876
45,191
44,726
Non-Interest Expense Salaries and employee benefits
38,774
37,048
34,677
114,048
107,453
Occupancy expense
5,851
5,528
5,975
16,883
17,150
Computer and equipment expense
4,387
4,227
3,509
12,899
9,762
Professional services expense
7,906
8,900
6,337
24,212
20,738
Data processing service expense
3,614
3,672
3,484
11,010
9,813
FDIC and State assessments
3,063
3,012
2,003
9,230
5,999
Marketing expense
1,587
2,416
2,005
4,777
4,692
Other real estate owned expense
435
81
55
566
93
Amortization of investments in low income housing andalternative
energy partnerships
23,157
21,746
11,949
60,497
27,471
Amortization of core deposit intangibles
250
559
250
1,059
724
Acquisition, integration and restructuring costs
—
—
59
—
4,086
Other operating expense
4,949
5,632
5,085
14,799
14,227
Total non-interest expense
93,973
92,821
75,388
269,980
222,208
Income before income tax expense
92,504
102,667
130,017
310,564
341,258
Income tax expense
10,133
9,447
30,982
38,966
78,217
Net income
$
82,371
$
93,220
$
99,035
$
271,598
$
263,041
Net income per common share: Basic
$
1.14
$
1.29
$
1.34
$
3.74
$
3.52
Diluted
$
1.13
$
1.28
$
1.33
$
3.73
$
3.50
Cash dividends paid per common share
$
0.34
$
0.34
$
0.34
$
1.02
$
1.02
Basic average common shares outstanding
72,568,518
72,536,301
73,956,052
72,546,149
74,743,941
Diluted average common shares outstanding
72,890,414
72,753,746
74,242,052
72,847,907
75,068,232
CATHAY GENERAL BANCORP
AVERAGE BALANCES – SELECTED
CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
Three months ended (In thousands)(Unaudited) September 30, 2023
June 30, 2023 September 30, 2022
Interest-earning assets:
Average Balance Average Yield/Rate (1) Average Balance Average
Yield/Rate (1) Average Balance Average Yield/Rate (1) Loans (1)
$
18,959,444
6.13
%
$
18,503,889
5.93
%
$
17,923,495
4.68
%
Taxable investment securities
1,530,767
3.29
%
1,561,443
3.18
%
1,364,013
2.18
%
FHLB stock
19,141
7.35
%
18,431
6.49
%
18,756
5.46
%
Deposits with banks
1,273,751
5.39
%
1,090,019
5.14
%
1,178,261
2.27
%
Total interest-earning assets
$
21,783,103
5.89
%
$
21,173,782
5.68
%
$
20,484,525
4.38
%
Interest-bearing liabilities: Interest-bearing demand
deposits
$
2,405,011
1.98
%
$
2,325,101
1.57
%
$
2,508,526
0.30
%
Money market deposits
3,036,445
2.98
%
3,047,163
2.55
%
5,153,566
0.90
%
Savings deposits
1,151,615
1.17
%
1,076,260
0.81
%
1,151,126
0.07
%
Time deposits
9,145,176
3.91
%
8,803,900
3.64
%
5,013,213
0.81
%
Total interest-bearing deposits
$
15,738,247
3.23
%
$
15,252,424
2.91
%
$
13,826,431
0.69
%
Other borrowed funds
586,824
5.32
%
508,081
5.04
%
498,234
2.34
%
Long-term debt
119,136
5.75
%
119,136
5.22
%
119,136
4.85
%
Total interest-bearing liabilities
16,444,207
3.33
%
15,879,641
2.99
%
14,443,801
0.78
%
Non-interest-bearing demand deposits
3,603,779
3,667,533
4,456,214
Total deposits and other borrowed funds
$
20,047,986
$
19,547,174
$
18,900,015
Total average assets
$
22,997,408
$
22,403,606
$
21,658,860
Total average equity
$
2,644,005
$
2,583,677
$
2,465,192
Nine months ended (In thousands)(Unaudited) September 30,
2023 September 30, 2022
Interest-earning assets: Average
Balance Average Yield/Rate (1) Average Balance Average Yield/Rate
(1) Loans (1)
$
18,572,222
5.96
%
$
17,468,247
4.28
%
Taxable investment securities
1,546,951
3.18
%
1,263,341
1.91
%
FHLB stock
18,290
7.00
%
17,757
5.83
%
Deposits with banks
1,145,398
5.07
%
1,332,491
1.00
%
Total interest-earning assets
$
21,282,861
5.71
%
$
20,081,836
3.91
%
Interest-bearing liabilities: Interest-bearing demand
deposits
$
2,361,732
1.57
%
$
2,456,556
0.17
%
Money market deposits
3,152,703
2.51
%
5,088,227
0.58
%
Savings deposits
1,056,234
0.73
%
1,137,485
0.07
%
Time deposits
8,728,133
3.59
%
5,060,286
0.58
%
Total interest-bearing deposits
$
15,298,802
2.86
%
$
13,742,554
0.47
%
Securities sold under agreements to repurchase Other borrowed funds
473,114
5.02
%
209,679
2.17
%
Long-term debt
119,136
5.30
%
119,136
4.85
%
Total interest-bearing liabilities
15,891,052
2.94
%
14,071,369
0.53
%
Non-interest-bearing demand deposits
3,741,982
4,403,195
Total deposits and other borrowed funds
$
19,633,034
$
18,474,564
Total average assets
$
22,503,115
$
21,203,918
Total average equity
$
2,586,548
$
2,450,650
(1) Yields and interest earned include net loan fees.
Non-accrual loans are included in the average balance.
CATHAY GENERAL BANCORP GAAP to
NON-GAAP RECONCILIATION SELECTED CONSOLIDATED
FINANCIAL INFORMATION (Unaudited)
The Company uses certain non-GAAP financial measures to provide
supplemental information regarding the Company’s performance.
Tangible equity and tangible equity to tangible assets ratio are
non-GAAP financial measures. Tangible equity and tangible assets
represent stockholders’ equity and total assets, respectively,
which have been reduced by goodwill and other intangible assets.
Given that the use of such measures and ratios is more prevalent in
the banking industry, and such measures and ratios are used by
banking regulators and analysts, the Company has included them
below for discussion.
As of
September 30, 2023
June 30, 2023
September 30, 2022
(In thousands) (Unaudited)
Stockholders' equity (a)
$
2,638,736
$
2,602,671
$
2,419,559
Less: Goodwill
(375,696
)
(375,696
)
(375,696
)
Other intangible assets (1)
(4,725
)
(4,992
)
(6,948
)
Tangible equity (b)
$
2,258,315
$
2,221,983
$
2,036,915
Total assets (c)
$
22,844,529
$
23,028,438
$
21,890,131
Less: Goodwill
(375,696
)
(375,696
)
(375,696
)
Other intangible assets (1)
(4,725
)
(4,992
)
(6,948
)
Tangible assets (d)
$
22,464,108
$
22,647,750
$
21,507,487
Number of common shares outstanding (e)
72,586,992
72,563,169
73,411,960
Total stockholders' equity to total assets ratio (a)/(c)
11.55
%
11.30
%
11.05
%
Tangible equity to tangible assets ratio (b)/(d)
10.05
%
9.81
%
9.47
%
Tangible book value per share (b)/(e)
$
31.11
$
30.62
$
27.75
Three months ended
Nine months ended
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
(In thousands) (Unaudited)
Net Income
$
82,371
$
93,220
$
99,035
$
271,598
$
263,041
Add: Amortization of other intangibles (1)
270
570
250
1,031
724
Tax effect of amortization adjustments (2)
(80
)
(169
)
(74
)
(306
)
(215
)
Tangible net income (f)
$
82,561
$
93,621
$
99,211
$
272,323
$
263,550
Return on tangible common equity (3) (f)/(b)
14.62
%
16.85
%
19.48
%
16.08
%
17.25
%
(1) Includes core deposit intangibles and mortgage servicing (2)
Applied the statutory rate of 29.65%. (3) Annualized
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231023967763/en/
Heng W. Chen (626)
279-3652
Cathay General Bancorp (NASDAQ:CATY)
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