CATY Cathay General Bancorp

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 March 31, 2024. The Company reported net income of $71.4 million, or $0.98 per share, for the first quarter of 2024. The first quarter net income included a $9.0 million or $0.09 per diluted share mark-to market loss from equity securities held by the Company and a $2.9 million or $0.03 per diluted share accrual for an increase in the FDIC special assessment.

FINANCIAL PERFORMANCE

Three months ended

(unaudited)

March 31, 2024

 

December 31, 2023

 

March 31, 2023

Net income

$ 71.4 million

 

$82.5 million

 

$ 96.0 million

Basic earnings per common share

$0.98

 

$1.14

 

$1.32

Diluted earnings per common share

$0.98

 

$1.13

 

$1.32

Return on average assets

1.23%

 

1.40%

 

1.76%

Return on average total stockholders' equity

10.40%

 

12.21%

 

15.39%

Efficiency ratio

53.22%

 

53.84%

 

40.25%

FIRST QUARTER HIGHLIGHTS

• Total deposits increased by $520.8 million, or 10.8% annualized, to $19.85 billion in the first quarter of 2024.
• Net interest margin decreased to 3.05% in the first quarter of 2024 from 3.27% in the fourth quarter of 2023.
• Diluted earnings per share decreased to $0.98 for the first quarter of 2024 compared to $1.13 for the fourth quarter of 2023 due in part to changes in equity securities valuations.

“For the first quarter of 2024, our total deposits increased by $520.8 million, or 10.8% annualized, to $19.85 billion,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW FIRST QUARTER 2024 COMPARED TO THE FOURTH QUARTER 2023

Net income for the quarter ended March 31, 2024, was $71.4 million, a decrease of $11.1 million, or 13.5%, compared to net income of $82.5 million for the fourth quarter of 2023. Diluted earnings per share for the first quarter of 2024 was $0.98 per share compared to $1.13 per share for the fourth quarter of 2023. The first quarter net income included a $9.0 million, or $0.09 per diluted share mark-to-market loss from equity securities held by the Company and a $2.9 million, or $0.03 per diluted share, accrual for an increase in the FDIC special assessment.

Return on average stockholders’ equity was 10.40% and return on average assets was 1.23% for the quarter ended March 31, 2024, compared to a return on average stockholders’ equity of 12.21% and a return on average assets of 1.40% in the fourth quarter of 2023.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $13.5 million, or 7.4%, to $168.6 million during the first quarter of 2024, compared to $182.1 million in the fourth quarter of 2023. The decrease was due primarily to an increase in deposit interest expense and a decrease in interest income from loans and securities.

The net interest margin was 3.05% for the first quarter of 2024 compared to 3.27% for the fourth quarter of 2023.

For the first quarter of 2024, the yield on average interest-earning assets was 6.01%, the cost of funds on average interest-bearing liabilities was 3.87%, and the cost of interest-bearing deposits was 3.78%. In comparison, for the fourth quarter of 2023, the yield on average interest-earning assets was 5.99%, the cost of funds on average interest-bearing liabilities was 3.59%, and the cost of interest-bearing deposits was 3.50%. The increase in the costs of average 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 2.14% for the first quarter of 2024, compared to 2.40% for the fourth quarter of 2023.

Provision for credit losses

The Company recorded a provision for credit losses of $1.9 million in the first quarter of 2024 compared with $1.7 million in the fourth quarter of 2023. As of March 31, 2024, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, increased $760 thousand to $164.4 million, or 0.85% of gross loans, compared to $163.6 million, or 0.84% of gross loans, as of December 31, 2023.

The following table sets forth the charge-offs and recoveries for the periods indicated:

Three months ended March 31, 2024 December 31, 2023 March 31, 2023 (In thousands) (Unaudited) Charge-offs: Commercial loans

$

1,939

 

$

1,392

 

$

3,911

 

Construction loans

 

—

 

 

4,221

 

 

—

 

Real estate loans (1)

 

254

 

 

—

 

 

3,990

 

Installment and other loans

 

—

 

 

—

 

 

6

 

Total charge-offs

 

2,193

 

 

5,613

 

 

7,907

 

Recoveries: Commercial loans

 

812

 

 

1,426

 

 

511

 

Construction loans

 

—

 

 

—

 

 

—

 

Real estate loans (1)

 

241

 

 

55

 

 

2,540

 

Total recoveries

 

1,053

 

 

1,481

 

 

3,051

 

Net charge-offs/(recoveries)

$

1,140

 

$

4,132

 

$

4,856

 

(1)

Real estate loans include commercial real estate 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 $6.6 million for the first quarter of 2024, a decrease of $16.5 million, or 71.4%, compared to $23.1 million for the fourth quarter of 2023. The decrease was primarily due to an $18.0 million decrease in unrealized gains on equity securities offset, in part, by a $1.4 million recovery from the sale of a previously written-off security, when compared to the fourth quarter of 2023.

Non-interest expense

Non-interest expense decreased $17.3 million, or 15.7%, to $93.2 million in the first quarter of 2024 compared to $110.5 million in the fourth quarter of 2023. The decrease in non-interest expense in the first quarter of 2024 was primarily due to a decrease of $11.7 million in amortization expense of investments in low-income housing and alternative energy partnerships, a decrease of $8.3 million in FDIC and state assessments and a decrease of $1.3 million in professional services expenses offset, in part, by an increase of $3.5 million in salaries and employee benefits when compared to the fourth 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 53.22% in the first quarter of 2024 compared to 53.84% for the fourth quarter of 2023.

Income taxes

The effective tax rate for the first quarter of 2024 was 10.76% compared to 11.28% for the fourth quarter of 2023. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans, excluding loans held for sale, were $19.43 billion as of March 31, 2024, a decrease of $118.7 million, or 0.6%, from $19.55 billion as of December 31, 2023. The decrease was primarily due to a decrease of $172.5 million, or 5.2%, in commercial loans, and a decrease of $39.9 million, or 9.4%, in construction loans offset, in part, by an increase of $92.2 million, or 0.9%, in commercial real estate loans and an increase of $3.1 million, or 0.1%, in residential mortgage loans.

The loan balances and composition as of March 31, 2024, compared to December 31, 2023, and March 31, 2023, are presented below:

March 31, 2024

 

December 31, 2023

 

March 31, 2023

(In thousands) (Unaudited)

Commercial loans

$

3,132,580

 

$

3,305,048

 

$

3,153,039

 

Construction loans

 

382,775

 

 

422,647

 

 

558,967

 

Commercial real estate loans

 

9,821,807

 

 

9,729,581

 

 

8,916,766

 

Residential mortgage loans

 

5,841,846

 

 

5,838,747

 

 

5,384,220

 

Equity lines

 

245,222

 

 

245,919

 

 

298,630

 

Installment and other loans

 

5,166

 

 

6,198

 

 

5,717

 

Gross loans

$

19,429,396

 

$

19,548,140

 

$

18,317,339

 

  Allowance for loan losses

 

(154,589

)

 

(154,562

)

 

(144,884

)

Unamortized deferred loan fees

 

(11,737

)

 

(10,720

)

 

(5,872

)

Total loans, net

$

19,263,070

 

$

19,382,858

 

$

18,166,583

 

Total deposits were $19.85 billion as of March 31, 2024, an increase of $520.8 million, or 2.7%, from $19.33 billion as of December 31, 2023.

The deposit balances and composition as of March 31, 2024, compared to December 31, 2023, and March 31, 2023, are presented below:

March 31, 2024

 

December 31, 2023

 

March 31, 2023

(In thousands) (Unaudited)

Non-interest-bearing demand deposits

$

3,289,539

 

$

3,529,018

 

$

3,748,719

 

NOW deposits

 

2,331,486

 

 

2,370,685

 

 

2,354,195

 

Money market deposits

 

3,117,557

 

 

3,049,754

 

 

3,014,500

 

Savings deposits

 

1,039,144

 

 

1,039,203

 

 

891,061

 

Time deposits

 

10,068,533

 

 

9,336,787

 

 

8,640,397

 

Total deposits

$

19,846,259

 

$

19,325,447

 

$

18,648,872

 

ASSET QUALITY REVIEW

As of March 31, 2024, total non-accrual loans were $98.1 million, an increase of $31.4 million, or 47.1%, from $66.7 million as of December 31, 2023.

The allowance for loan losses was $154.6 million and the allowance for off-balance sheet unfunded credit commitments was $9.8 million as of March 31, 2024. 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. The allowance for loan losses represented 0.80% of period-end gross loans, and 146.30% of non-performing loans as of March 31, 2024. The comparable ratios were 0.79% of period-end gross loans, and 209.33% of non-performing loans as of December 31, 2023.

The changes in non-performing assets and modifications to borrowers experiencing financial difficulties as of March 31, 2024, compared to December 31, 2023, and March 31, 2023, are presented below:

(Dollars in thousands) (Unaudited)

March 31, 2024

 

December 31, 2023

 

% Change

 

March 31, 2023

 

% Change

Non-performing assets Accruing loans past due 90 days or more

$

7,560

 

$

7,157

 

6

 

$

12,756

 

(41

)

  Non-accrual loans: Construction loans

 

22,998

 

 

7,736

 

197

 

 

—

 

—

 

Commercial real estate loans

 

47,465

 

 

32,030

 

48

 

 

40,218

 

18

 

Commercial loans

 

14,642

 

 

14,404

 

2

 

 

22,079

 

(34

)

Residential mortgage loans

 

13,002

 

 

12,511

 

4

 

 

11,283

 

15

 

Total non-accrual loans

$

98,107

 

$

66,681

 

47

 

$

73,580

 

33

 

Total non-performing loans

 

105,667

 

 

73,838

 

43

 

 

86,336

 

22

 

Other real estate owned

 

19,441

 

 

19,441

 

—

 

 

4,067

 

378

 

Total non-performing assets

$

125,108

 

$

93,279

 

34

 

$

90,403

 

38

 

Accruing loan modifications to borrowers experiencing financial difficulties

$

—

 

$

2,872

 

(100

) 

$

—

 

—

 

  Allowance for loan losses

$

154,589

 

$

154,562

 

—

 

$

144,884

 

7

 

Total gross loans outstanding, at period-end

$

19,429,396

 

$

19,548,140

 

(1

)

$

18,317,339

 

6

 

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

 

146.30

%

 

209.33

%

 

167.81

%

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

 

0.80

%

 

0.79

%

 

0.79

%

 

The ratio of non-performing assets to total assets was 0.53% as of March 31, 2024, compared to 0.40% as of December 31, 2023. Total non-performing assets increased $31.8 million, or 34.1%, to $125.1 million as of March 31, 2024, compared to $93.3 million as of December 31, 2023, primarily due to an increase of $31.4 million, or 47.1%, in non-accrual loans, and an increase of $403 thousand, or 5.6%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of March 31, 2024, the Company’s Tier 1 risk-based capital ratio of 13.08%, total risk-based capital ratio of 14.55%, and Tier 1 leverage capital ratio of 10.71%, 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 December 31, 2023, the Company’s Tier 1 risk-based capital ratio was 12.84%, total risk-based capital ratio was 14.31%, and Tier 1 leverage capital ratio was 10.55%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its first quarter 2024 financial results this afternoon, Monday, April 22, 2024, 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 10187902. 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 operates 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, 2023 (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

(Dollars in thousands, except per share data)

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

  Financial performance Net interest income before provision for credit losses

$

168,572

 

$

182,138

 

$

192,435

 

Provision for credit losses

 

1,900

 

 

1,723

 

 

8,100

 

Net interest income after provision for credit losses

 

166,672

 

 

180,415

 

 

184,335

 

Non-interest income

 

6,611

 

 

23,101

 

 

14,244

 

Non-interest expense

 

93,239

 

 

110,498

 

 

83,186

 

Income before income tax expense

 

80,044

 

 

93,018

 

 

115,393

 

Income tax expense

 

8,609

 

 

10,492

 

 

19,386

 

Net income

$

71,435

 

$

82,526

 

$

96,007

 

  Net income per common share Basic

$

0.98

 

$

1.14

 

$

1.32

 

Diluted

$

0.98

 

$

1.13

 

$

1.32

 

  Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

 

    Selected ratios Return on average assets

 

1.23

%

 

1.40

%

 

1.76

%

Return on average total stockholders’ equity

 

10.40

%

 

12.21

%

 

15.39

%

Efficiency ratio

 

53.22

%

 

53.84

%

 

40.25

%

Dividend payout ratio

 

34.59

%

 

29.92

%

 

25.63

%

    Yield analysis (Fully taxable equivalent) Total interest-earning assets

 

6.01

%

 

5.99

%

 

5.54

%

Total interest-bearing liabilities

 

3.87

%

 

3.59

%

 

2.46

%

Net interest spread

 

2.14

%

 

2.40

%

 

3.08

%

Net interest margin

 

3.05

%

 

3.27

%

 

3.74

%

    Capital ratios

March 31, 2024

 

December 31, 2023

 

March 31, 2023

Tier 1 risk-based capital ratio

 

13.08

%

 

12.84

%

 

12.42

%

Total risk-based capital ratio

 

14.55

%

 

14.31

%

 

13.94

%

Tier 1 leverage capital ratio

 

10.71

%

 

10.55

%

 

10.27

%

   

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

  (In thousands, except share and per share data) March 31, 2024 December 31, 2023 March 31, 2023   Assets Cash and due from banks

$

165,284

 

$

173,988

 

$

252,048

 

Short-term investments and interest bearing deposits

 

1,010,651

 

 

654,813

 

 

881,282

 

Securities available-for-sale (amortized cost of $1,783,915 at March 31, 2024, $1,726,080 at December 31, 2023 and $1,672,440 at March 31, 2023)

 

1,653,167

 

 

1,604,570

 

 

1,541,250

 

Loans held for sale

 

23,171

 

 

—

 

 

—

 

Loans

 

19,429,396

 

 

19,548,140

 

 

18,317,339

 

Less: Allowance for loan losses

 

(154,589

)

 

(154,562

)

 

(144,884

)

Unamortized deferred loan fees, net

 

(11,737

)

 

(10,720

)

 

(5,872

)

Loans, net

 

19,263,070

 

 

19,382,858

 

 

18,166,583

 

Equity securities

 

31,380

 

 

40,406

 

 

27,011

 

Federal Home Loan Bank stock

 

17,250

 

 

17,746

 

 

17,250

 

Other real estate owned, net

 

19,441

 

 

19,441

 

 

4,067

 

Affordable housing investments and alternative energy partnerships, net

 

330,912

 

 

315,683

 

 

316,475

 

Premises and equipment, net

 

90,454

 

 

91,097

 

 

93,204

 

Customers’ liability on acceptances

 

17,074

 

 

3,264

 

 

6,547

 

Accrued interest receivable

 

97,937

 

 

97,673

 

 

82,420

 

Goodwill

 

375,696

 

 

375,696

 

 

375,696

 

Other intangible assets, net

 

4,131

 

 

4,461

 

 

5,564

 

Right-of-use assets- operating leases

 

31,698

 

 

32,076

 

 

29,906

 

Other assets

 

273,487

 

 

267,762

 

 

232,298

 

Total assets

$

23,404,803

 

$

23,081,534

 

$

22,031,601

 

  Liabilities and Stockholders’ Equity Deposits: Non-interest-bearing demand deposits

$

3,289,539

 

$

3,529,018

 

$

3,748,719

 

Interest-bearing deposits: NOW deposits

 

2,331,486

 

 

2,370,685

 

 

2,354,195

 

Money market deposits

 

3,117,557

 

 

3,049,754

 

 

3,014,500

 

Savings deposits

 

1,039,144

 

 

1,039,203

 

 

891,061

 

Time deposits

 

10,068,533

 

 

9,336,787

 

 

8,640,397

 

Total deposits

 

19,846,259

 

 

19,325,447

 

 

18,648,872

 

  Advances from the Federal Home Loan Bank

 

265,000

 

 

540,000

 

 

360,000

 

Other borrowings for affordable housing investments

 

17,557

 

 

15,787

 

 

22,481

 

Long-term debt

 

119,136

 

 

119,136

 

 

119,136

 

Acceptances outstanding

 

17,074

 

 

3,264

 

 

6,547

 

Lease liabilities - operating leases

 

34,325

 

 

34,797

 

 

32,599

 

Other liabilities

 

327,380

 

 

306,528

 

 

299,627

 

Total liabilities

 

20,626,731

 

 

20,344,959

 

 

19,489,262

 

Stockholders' equity

 

2,778,072

 

 

2,736,575

 

 

2,542,339

 

Total liabilities and equity

$

23,404,803

 

$

23,081,534

 

$

22,031,601

 

  Book value per common share

$

38.22

 

$

37.66

 

$

35.12

 

Number of common shares outstanding

 

72,688,191

 

 

72,668,927

 

 

72,390,694

 

 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

Three months ended

 

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

 

 

(In thousands, except share and per share data)

Interest and Dividend Income Loans receivable

$

302,528

 

$

302,477

 

$

261,179

 

Investment securities

 

14,951

 

 

14,885

 

 

11,764

 

Federal Home Loan Bank stock

 

431

 

 

392

 

 

304

 

Deposits with banks

 

14,732

 

 

15,509

 

 

12,139

 

Total interest and dividend income

 

332,642

 

 

333,263

 

 

285,386

 

  Interest Expense Time deposits

 

109,546

 

 

97,826

 

 

64,174

 

Other deposits

 

42,788

 

 

43,282

 

 

23,817

 

Advances from Federal Home Loan Bank

 

9,316

 

 

7,289

 

 

2,598

 

Long-term debt

 

1,721

 

 

1,759

 

 

1,443

 

Short-term borrowings

 

699

 

 

969

 

 

919

 

Total interest expense

 

164,070

 

 

151,125

 

 

92,951

 

  Net interest income before provision for credit losses

 

168,572

 

 

182,138

 

 

192,435

 

Provision for credit losses

 

1,900

 

 

1,723

 

 

8,100

 

Net interest income after provision for credit losses

 

166,672

 

 

180,415

 

 

184,335

 

  Non-Interest Income Net (losses)/gains from equity securities

 

(9,027

)

 

8,950

 

 

4,853

 

Debt securities gains/(losses), net

 

1,107

 

 

—

 

 

(3,000

)

Letters of credit commissions

 

1,717

 

 

1,744

 

 

1,570

 

Depository service fees

 

1,550

 

 

1,423

 

 

1,832

 

Wealth management fees

 

5,638

 

 

4,820

 

 

3,897

 

Other operating income

 

5,626

 

 

6,164

 

 

5,092

 

Total non-interest income

 

6,611

 

 

23,101

 

 

14,244

 

  Non-Interest Expense Salaries and employee benefits

 

43,552

 

 

40,101

 

 

38,226

 

Occupancy expense

 

5,967

 

 

5,387

 

 

5,504

 

Computer and equipment expense

 

5,068

 

 

4,579

 

 

4,285

 

Professional services expense

 

6,992

 

 

8,279

 

 

7,406

 

Data processing service expense

 

3,929

 

 

3,718

 

 

3,724

 

FDIC and State assessments

 

6,089

 

 

14,358

 

 

3,155

 

Marketing expense

 

1,914

 

 

1,110

 

 

774

 

Other real estate owned expense

 

253

 

 

195

 

 

50

 

Amortization of investments in low income housing and alternative energy partnerships

 

14,432

 

 

26,119

 

 

15,594

 

Amortization of core deposit intangibles

 

339

 

 

251

 

 

250

 

Acquisition, integration and restructuring costs

 

—

 

 

671

 

 

—

 

Other operating expense

 

4,704

 

 

5,730

 

 

4,218

 

Total non-interest expense

 

93,239

 

 

110,498

 

 

83,186

 

  Income before income tax expense

 

80,044

 

 

93,018

 

 

115,393

 

Income tax expense

 

8,609

 

 

10,492

 

 

19,386

 

Net income

$

71,435

 

$

82,526

 

$

96,007

 

Net income per common share: Basic

$

0.98

 

$

1.14

 

$

1.32

 

Diluted

$

0.98

 

$

1.13

 

$

1.32

 

  Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

 

Basic average common shares outstanding

 

72,673,974

 

 

72,652,779

 

 

72,533,239

 

Diluted average common shares outstanding

 

72,971,157

 

 

72,906,310

 

 

72,899,662

 

 

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

 

Three months ended

(In thousands)(Unaudited)

March 31, 2024

 

December 31, 2023

 

March 31, 2023

Interest-earning assets:

Average Balance

 

Average Yield/Rate (1)

 

Average Balance

 

Average Yield/Rate (1)

 

Average Balance

 

Average Yield/Rate (1)

Loans (1)

$

19,498,954

 

6.24

%

$

19,330,187

 

6.21

%

$

18,245,488

 

5.81

%

Taxable investment securities

 

1,638,317

 

3.67

%

 

1,594,267

 

3.71

%

 

1,548,841

 

3.08

%

FHLB stock

 

23,006

 

7.53

%

 

19,599

 

7.94

%

 

17,276

 

7.14

%

Deposits with banks

 

1,093,972

 

5.42

%

 

1,130,806

 

5.44

%

 

1,070,188

 

4.60

%

Total interest-earning assets

$

22,254,249

 

6.01

%

$

22,074,859

 

5.99

%

$

20,881,793

 

5.54

%

  Interest-bearing liabilities: Interest-bearing demand deposits

$

2,312,246

 

2.19

%

$

2,466,263

 

2.14

%

$

2,354,531

 

1.12

%

Money market deposits

 

3,114,298

 

3.53

%

 

3,200,455

 

3.33

%

 

3,378,257

 

2.05

%

Savings deposits

 

1,046,103

 

1.10

%

 

1,112,454

 

1.11

%

 

938,485

 

0.10

%

Time deposits

 

9,720,917

 

4.53

%

 

9,208,820

 

4.21

%

 

8,225,215

 

3.16

%

Total interest-bearing deposits

$

16,193,564

 

3.78

%

$

15,987,992

 

3.50

%

$

14,896,488

 

2.40

%

Other borrowed funds

 

730,779

 

5.51

%

 

600,483

 

5.46

%

 

321,522

 

4.44

%

Long-term debt

 

119,136

 

5.81

%

 

119,136

 

5.86

%

 

119,136

 

4.91

%

Total interest-bearing liabilities

 

17,043,479

 

3.87

%

 

16,707,611

 

3.59

%

 

15,337,146

 

2.46

%

  Non-interest-bearing demand deposits

 

3,338,551

 

 

3,598,385

 

 

3,958,533

 

  Total deposits and other borrowed funds

$

20,382,030

 

$

20,305,996

 

$

19,295,679

 

  Total average assets

$

23,451,901

 

$

23,304,836

 

$

22,098,431

 

Total average equity

$

2,761,843

 

$

2,681,899

 

$

2,530,719

 

(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 March 31, 2024 December 31, 2023 March 31, 2023 (In thousands) (Unaudited) Stockholders' equity

(a)

$

2,778,072

 

$

2,736,575

 

$

2,542,339

 

Less: Goodwill

 

 

(375,696

)

 

(375,696

)

 

(375,696

)

Other intangible assets (1)

 

 

(4,131

)

 

(4,461

)

 

(5,564

)

Tangible equity

(b)

$

2,398,245

 

$

2,356,418

 

$

2,161,079

 

 

Total assets

(c)

$

23,404,803

 

$

23,081,534

 

$

22,031,601

 

Less: Goodwill

 

 

(375,696

)

 

(375,696

)

 

(375,696

)

Other intangible assets (1)

 

 

(4,131

)

 

(4,461

)

 

(5,564

)

Tangible assets

(d)

$

23,024,976

 

$

22,701,377

 

$

21,650,341

 

 

Number of common shares outstanding

(e)

 

72,688,191

 

 

72,668,927

 

 

72,390,694

 

 

Total stockholders' equity to total assets ratio

(a)/(c)

 

11.87

%

 

11.86

%

 

11.54

%

Tangible equity to tangible assets ratio

(b)/(d)

 

10.42

%

 

10.38

%

 

9.98

%

Tangible book value per share

(b)/(e)

$

32.99

 

$

32.43

 

$

29.85

 

 

 

Three months ended

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

 

(In thousands) (Unaudited)

Net Income

 

$

71,435

 

$

82,526

 

$

96,007

 

Add: Amortization of other intangibles (1)

 

 

330

 

 

262

 

 

192

 

Tax effect of amortization adjustments (2)

 

 

(98

)

 

(78

)

 

(57

)

Tangible net income

(f)

$

71,667

 

$

82,710

 

$

96,142

 

 

Return on tangible common equity (3)

(f)/(b)

 

11.95

%

 

14.04

%

 

17.80

%

(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/20240422394216/en/

Heng W. Chen (626) 279-3652