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 and year
ended December 31, 2022. The Company reported net income of $97.6
million, or $1.33 per share, for the fourth quarter of 2022, and
net income of $360.6 million, or $4.83 per share, for the year
ended December 31, 2022.
FINANCIAL PERFORMANCE
Three months ended Year ended December 31, (unaudited) December 31,
2022 September 30, 2022 December 31, 2021
2022
2021
Net income $97.6 million $99.0 million $75.3 million $360.6 million
$298.3 million Basic earnings per common share
$1.33
$1.34*
$0.98
$4.85
$3.81
Diluted earnings per common share
$1.33
$1.33*
$0.98
$4.83
$3.80
Return on average assets
1.77%
1.81%
1.48%
1.69%
1.52%
Return on average total stockholders' equity
15.73%
15.94%
12.12%
14.70%
12.11%
Efficiency ratio
37.97%
36.35%
41.77%
38.38%
43.92%
*Net income per common share previously reported for the
third quarter of 2022 has been corrected. The correction decreased
basic and diluted net income per common share by $.01 and $.02,
respectively.
HIGHLIGHTS
- Record net income of $360.6 million and EPS of $4.83 per share
in 2022.
- Quarterly earnings per share increased 35.7% compared to same
quarter in 2021.
- Total loans increased $1.4 billion, or 8.3%, excluding HSBC
purchased loans of $550.5 million, in 2022.
“Net interest income for the quarter increased by 29.8% compared
to the same quarter last year primarily as a result of loan growth
and the higher level of interest rates. During 2022, we repurchased
3,227,465 shares at an average cost of $43.79 per share, for a
total of $141.3 million,” commented Chang M. Liu, President and
Chief Executive Officer of the Company.
FOURTH QUARTER INCOME STATEMENT REVIEW
Net income for the quarter ended December 31, 2022, was $97.6
million, an increase of $22.3 million, or 29.6%, compared to net
income of $75.3 million for the same quarter a year ago. Diluted
earnings per share for the quarter ended December 31, 2022,
increased by 35.7%, or $1.33 per share, compared to $0.98 per share
for the same quarter a year ago.
Net interest income before provision for credit losses
Net interest income before provision for credit losses increased
$46.3 million, or 29.8%, to $201.8 million during the fourth
quarter of 2022, compared to $155.5 million during the same quarter
a year ago. The increase was due primarily to an increase in
interest income from loans and securities which was partially
offset by an increase in interest expense from deposits.
The net interest margin was 3.87% for the fourth quarter of 2022
compared to 3.23% for the fourth quarter of 2021 and 3.83% for the
third quarter of 2022.
For the fourth quarter of 2022, the yield on average
interest-earning assets was 5.06%, the cost of funds on average
interest-bearing liabilities was 1.66%, and the cost of average
interest-bearing deposits was 1.59%. In comparison, for the fourth
quarter of 2021, the yield on average interest-earning assets was
3.52%, the cost of funds on average interest-bearing liabilities
was 0.41%, and the cost of average interest-bearing deposits was
0.37%. The increase in the yield on average interest-bearing
liabilities resulted mainly from higher interest rates on deposits
driven by the higher repricing of maturing time deposits in the
fourth quarter. The increase in the yield on average
interest-earning assets resulted mainly from higher interest rates
on loans due to the increasing rate environment.
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 3.40% for the quarter
ended December 31, 2022, compared to 3.11% for the same quarter a
year ago.
Provision/(reversal) for credit losses
The Company recorded a provision for credit losses of $1.4
million in the fourth quarter of 2022 compared to $2.0 million in
the third quarter of 2022 and $3.5 million in the fourth quarter of
2021. As of December 31, 2022, the allowance for loan losses
decreased by $2.3 million to $146.5 million, or 0.80% of gross
loans, compared to $148.8 million, or 0.82% of gross loans as of
September 30, 2022.
The following table sets forth the charge-offs and recoveries
for the periods indicated:
Three months ended Year ended December 31, December 31, 2022
September 30, 2022 December 31, 2021
2022
2021
(In thousands) (Unaudited) Charge-offs: Commercial loans
$
860
$
2,091
$
552
$
3,222
$
20,051
Real estate loans (1)
2,131
137
—
2,268
3
Total charge-offs
2,991
2,228
552
5,490
20,054
Recoveries: Commercial loans
356
1,576
160
2,465
1,706
Construction loans
—
—
—
6
76
Real estate loans (1)
99
95
104
434
661
Total recoveries
455
1,671
264
2,905
2,443
Net charge-offs/(recoveries)
$
2,536
$
557
$
288
$
2,585
$
17,611
(1) Real estate loans include commercial mortgage loans,
residential mortgage loans, equity lines and installment &
other loans.
Non-interest income
Non-interest income, which includes revenues from depository
service fees, letters of credit commissions, securities gains
(losses), wire transfer fees, and other sources of fee income, was
$12.1 million for the fourth quarter of 2022, a decrease of $7.7
million, or 38.9%, compared to $19.8 million for the fourth quarter
of 2021. The decrease was primarily due to an increase of $3.2
million in loss on equity securities, a decrease of $3.1 million in
gain on distribution from venture capital investments, and a
decrease of $1.7 million in derivative fees, when compared to the
same quarter a year ago.
Non-interest expense
Non-interest expense increased $8.0 million, or 10.9%, to $81.2
million in the fourth quarter of 2022 compared to $73.2 million in
the same quarter a year ago. The increase in non-interest expense
in the fourth quarter of 2022 was primarily due to an increase of
$3.8 million in amortization expense of investments in low-income
housing and alternative energy partnerships, an increase of $1.2
million in salaries and employee benefits and an increase of $1.0
million in amortization of core deposit intangibles, when compared
to the fourth quarter of 2021. 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
38.0% in the fourth quarter of 2022 compared to 41.8% for the same
quarter a year ago.
Income taxes
The effective tax rate for the fourth quarter of 2022 was 25.7%
compared to 23.6% for the fourth quarter of 2021. The effective tax
rate includes the impact of alternative energy investments and
low-income housing tax credits.
BALANCE SHEET REVIEW
Gross loans were $18.3 billion as of December 31, 2022, an
increase of $2.0 billion, or 12.3%, from $16.3 billion as of
December 31, 2021. The increase was primarily due to increases of
$1.1 billion, or 25.6%, in residential mortgage loans, which
included $548.3 million from the acquisition of certain HSBC West
Coast branches, $650.4 million, or 8.0%, in commercial mortgage
loans, $336.4 million, or 11.3%, in commercial loans, offset by a
decrease of $94.9 million, or 22.6%, in home equity loans and $51.7
million, or 8.5%, in real estate construction loans. For the fourth
quarter of 2022, gross loans, increased by $147.2 million, or 3.6%
annualized.
The loan balances and composition as of December 31, 2022,
compared to September 30, 2022 and December 31, 2021, are presented
below:
December 31, 2022 September 30, 2022 December 31, 2021
(In
thousands) (Unaudited) Commercial loans
$
3,316,187
$
3,361,523
$
2,891,914
Paycheck protection program loans
2,591
5,914
90,485
Residential mortgage loans
5,252,952
5,130,650
4,182,006
Commercial mortgage loans
8,793,685
8,677,733
8,143,272
Equity lines
324,548
350,448
419,487
Real estate construction loans
559,372
573,421
611,031
Installment and other loans
4,689
7,114
4,284
Gross loans
$
18,254,024
$
18,106,803
$
16,342,479
Allowance for loan losses
(146,485
)
(148,817
)
(136,157
)
Unamortized deferred loan fees
(6,641
)
(6,936
)
(4,321
)
Total loans, net
$
18,100,898
$
17,951,050
$
16,202,001
Total deposits were $18.5 billion as of December 31, 2022, an
increase of $446.4 million, or 2.5%, from $18.1 billion as of
December 31, 2021.
The deposit balances and composition as of December 31, 2022,
compared to September 30, 2022 and December 31, 2021, are presented
below:
December 31, 2022
September 30, 2022
December 31, 2021
(In thousands) (Unaudited) Non-interest-bearing demand
deposits
$
4,168,989
$
4,398,152
$
4,492,054
NOW deposits
2,509,736
2,570,036
2,522,442
Money market deposits
3,812,724
4,935,266
4,611,579
Savings deposits
1,000,460
1,128,823
915,515
Time deposits
7,013,370
5,543,474
5,517,252
Total deposits
$
18,505,279
$
18,575,751
$
18,058,842
ASSET QUALITY REVIEW
As of December 31, 2022, total non-accrual loans were $68.9
million, an increase of $3.0 million, or 4.6%, from $65.8 million
as of December 31, 2021, and an increase of $729 thousand, or 1.1%,
from $68.1 million as of September 30, 2022.
The allowance for loan losses was $146.5 million and the
allowance for off-balance sheet unfunded credit commitments was
$8.7 million as of December 31, 2022. The allowances represent the
amount estimated by management to be appropriate to absorb 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 182.12% of non-performing loans as of
December 31, 2022. The comparable ratios were 0.83% of period-end
gross loans, and 202.36% of non-performing loans as of December 31,
2021.
The changes in non-performing assets and troubled debt
restructurings as of December 31, 2022, compared to December 31,
2021 and September 30, 2022, are presented below:
(Dollars in thousands) (Unaudited) December 31, 2022
December 31, 2021 %Change September 30, 2022 %Change
Non-performing assets Accruing loans past due 90 days or
more
$
11,580
$
1,439
705
$
3,172
265
Non-accrual loans: Construction loans
—
—
—
—
—
Commercial mortgage loans
34,096
38,173
(11
)
26,911
27
Commercial loans
25,772
16,558
56
26,604
(3
)
Residential mortgage loans
8,978
11,115
(19
)
14,601
(39
)
Installment and other loans
8
—
—
9
(11
) Total non-accrual loans:
$
68,854
$
65,846
5
$
68,125
1
Total non-performing loans
80,434
67,285
20
71,297
13
Other real estate owned
4,067
4,368
(7
)
4,067
—
Total non-performing assets
$
84,501
$
71,653
18
$
75,364
12
Accruing troubled debt restructurings (TDRs)
$
15,145
$
12,837
18
$
15,208
(0
)
Allowance for loan losses
$
146,485
$
136,157
8
$
148,817
(2
)
Total gross loans outstanding, at period-end
$
18,254,024
$
16,342,479
12
$
18,106,803
1
Allowance for loan losses to non-performing loans, at
period-end
182.12
%
202.36
%
208.73
%
Allowance for loan losses to gross loans, at period-end
0.80
%
0.83
%
0.82
%
The ratio of non-performing assets to total assets was 0.4% as
of December 31, 2022, compared to 0.3% as of December 31, 2021.
Total non-performing assets increased $12.8 million, or 17.9%, to
$84.5 million as of December 31, 2022, compared to $71.7 million as
of December 31, 2021, primarily due to an increase of $10.1
million, or 704.7%, in accruing loans past due 90 days or more and
an increase of $3.0 million, or 4.6%, in non-accrual loans.
CAPITAL ADEQUACY REVIEW
As of December 31, 2022, the Company’s Tier 1 risk-based capital
ratio of 12.19%, total risk-based capital ratio of 13.71%, and Tier
1 leverage capital ratio of 10.08%, 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, 2021, the Company’s Tier 1
risk-based capital ratio was 12.80%, total risk-based capital ratio
was 14.41%, and Tier 1 leverage capital ratio was 10.40%.
FULL YEAR REVIEW
Net income for the year ended December 31, 2022, was $360.6
million, an increase of $62.3 million, or 20.9%, compared to net
income of $298.3 million for the year ended December 31, 2021.
Diluted earnings per share for the year ended December 31, 2022 was
$4.83 compared to $3.80 per share for the year ended December 31,
2021. The net interest margin for the year ended December 31, 2022
was 3.63% compared to 3.22% for the year ended December 31,
2021.
Return on average stockholders’ equity was 14.70% and return on
average assets was 1.69% for the year ended December 31, 2022,
compared to a return on average stockholders’ equity of 12.11% and
a return on average assets of 1.52% for the year ended December 31,
2021. The efficiency ratio for the year ended December 31, 2022,
was 38.38% compared to 43.92% for the year ended December 31,
2021.
CONFERENCE CALL
Cathay General Bancorp will host a conference call to discuss
its fourth quarter and year-end 2022 financial results this
afternoon, Wednesday, January 25, 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 enter Conference ID 10174540. 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 are 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
(such as the COVID-19 pandemic) 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 including the
implementation of the Dodd-Frank Wall Street Reform and Consumer
Protection Act; 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 (such as the COVID-19 pandemic) 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, 2021 (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 Year ended December 31, (Dollars in
thousands, except per share data) December 31, 2022 September 30,
2022 December 31, 2021
2022
2021
FINANCIAL PERFORMANCE Net interest income before
(reversal)/provision for credit losses
$
201,814
$
197,529
$
155,452
$
733,697
$
597,755
Provision/(reversal) for credit losses
1,400
2,000
3,500
14,543
(16,008
)
Net interest income after (reversal)/provision for credit losses
200,414
195,529
151,952
719,154
613,763
Non-interest income
12,088
9,876
19,804
56,814
54,603
Non-interest expense
81,224
75,388
73,197
303,432
286,523
Income before income tax expense
131,278
130,017
98,559
472,536
381,843
Income tax expense
33,677
30,982
23,234
111,894
83,539
Net income
$
97,601
$
99,035
$
75,325
$
360,642
$
298,304
Net income per common share Basic
$
1.33
$
1.34
*
$
0.98
$
4.85
$
3.81
Diluted
$
1.33
$
1.33
*
$
0.98
$
4.83
$
3.80
Cash dividends paid per common share
$
0.34
$
0.34
$
0.34
$
1.36
$
1.27
SELECTED RATIOS Return on average assets
1.77
%
1.81
%
1.48
%
1.69
%
1.52
%
Return on average total stockholders’ equity
15.73
%
15.94
%
12.12
%
14.70
%
12.11
%
Efficiency ratio
37.97
%
36.35
%
41.77
%
38.38
%
43.92
%
Dividend payout ratio
25.45
%
25.30
%
34.50
%
27.99
%
33.30
%
YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets
5.06
%
4.38
%
3.52
%
4.21
%
3.59
%
Total interest-bearing liabilities
1.66
%
0.78
%
0.41
%
0.82
%
0.52
%
Net interest spread
3.40
%
3.60
%
3.11
%
3.39
%
3.07
%
Net interest margin
3.87
%
3.83
%
3.23
%
3.63
%
3.22
%
CAPITAL RATIOS December 31, 2022 September 30,
2022 December 31, 2021 Tier 1 risk-based capital ratio
12.19
%
12.06
%
12.80
%
Total risk-based capital ratio
13.71
%
13.59
%
14.41
%
Tier 1 leverage capital ratio
10.08
%
10.02
%
10.40
%
. . . *Net income per common share previously reported for
the third quarter of 2022 has been corrected. The correction
decreased basic and diluted net income per common share by $.01 and
$.02, respectively.
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands, except share and per share data) December 31,
2022 September 30, 2022 December 31, 2021
Assets Cash
and due from banks
$
195,440
$
200,051
$
134,141
Short-term investments and interest bearing deposits
958,731
1,063,294
2,315,563
Securities available-for-sale (amortized cost of $1,622,173 at
December 31, 2022, $1,577,311 at September 30, 2022 and $1,126,867
at December 31, 2021)
1,473,348
1,414,411
1,127,309
Loans
18,254,024
18,106,803
16,342,479
Less: Allowance for loan losses
(146,485
)
(148,817
)
(136,157
)
Unamortized deferred loan fees, net
(6,641
)
(6,936
)
(4,321
)
Loans, net
18,100,898
17,951,050
16,202,001
Equity securities
22,158
23,123
22,319
Federal Home Loan Bank stock
17,250
17,250
17,250
Other real estate owned, net
4,067
4,067
4,368
Affordable housing investments and alternative energy partnerships,
net
327,128
325,439
299,211
Premises and equipment, net
94,776
96,419
99,402
Customers’ liability on acceptances
2,372
6,899
8,112
Accrued interest receivable
82,428
71,177
56,994
Goodwill
375,696
375,696
372,189
Other intangible assets, net
5,757
6,948
4,627
Right-of-use assets- operating leases
29,627
30,679
27,834
Other assets
296,077
303,628
195,403
Total assets
$
21,985,753
$
21,890,131
$
20,886,723
Liabilities and Stockholders’ Equity Deposits
Non-interest-bearing demand deposits
$
4,168,989
$
4,398,152
$
4,492,054
Interest-bearing deposits: NOW deposits
2,509,736
2,570,036
2,522,442
Money market deposits
3,812,724
4,935,266
4,611,579
Savings deposits
1,000,460
1,128,823
915,515
Time deposits
7,013,370
5,543,474
5,517,252
Total deposits
18,505,279
18,575,751
18,058,842
Advances from the Federal Home Loan Bank
485,000
360,000
20,000
Other borrowings for affordable housing investments
22,600
22,651
23,145
Long-term debt
119,136
119,136
119,136
Acceptances outstanding
2,372
6,899
8,112
Lease liabilities - operating leases
32,518
33,931
30,694
Other liabilities
344,808
352,204
180,543
Total liabilities
19,511,713
19,470,572
18,440,472
Stockholders' equity
2,474,040
2,419,559
2,446,251
Total liabilities and equity
$
21,985,753
$
21,890,131
$
20,886,723
Book value per common share
$
34.01
$
32.96
$
32.29
Number of common shares outstanding
72,742,151
73,411,960
75,750,862
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Year ended December 31, December 31, 2022
September 30, 2022 December 31, 2021
2022
2021
(In thousands, except share and per share data)
INTEREST AND
DIVIDEND INCOME Loan receivable, including loan fees
$
243,324
$
211,541
$
164,062
$
801,981
$
649,224
Investment securities
10,181
7,483
4,188
28,240
14,151
Federal Home Loan Bank stock
329
258
261
1,103
991
Deposits with banks
9,954
6,732
678
19,957
2,145
Total interest and dividend income
263,788
226,014
169,189
851,281
666,511
INTEREST EXPENSE Time deposits
34,352
10,218
7,179
56,354
40,542
Other deposits
23,048
13,871
4,957
48,942
21,259
Advances from Federal Home Loan Bank
2,484
2,941
146
5,880
1,182
Long-term debt
1,228
1,455
1,455
5,546
5,773
Short-term borrowings
862
—
—
862
—
Total interest expense
61,974
28,485
13,737
117,584
68,756
Net interest income before (reversal)/provision for credit
losses
201,814
197,529
155,452
733,697
597,755
Provision/(reversal) for credit losses
1,400
2,000
3,500
14,543
(16,008
)
Net interest income after (reversal)/provision for credit losses
200,414
195,529
151,952
719,154
613,763
NON-INTEREST INCOME Net (losses)/gains from equity
securities
(966
)
(3,661
)
2,202
392
(1,426
)
Securities gains, net
—
—
—
—
853
Letters of credit commissions
1,584
1,609
1,867
6,351
7,103
Depository service fees
1,530
1,690
1,477
6,523
5,584
Wealth management fees
3,942
4,184
3,982
16,436
15,056
Other operating income
5,998
6,054
10,276
27,112
27,433
Total non-interest income
12,088
9,876
19,804
56,814
54,603
NON-INTEREST EXPENSE Salaries and employee benefits
35,093
34,677
33,878
142,546
132,795
Occupancy expense
5,658
5,975
5,176
22,808
20,318
Computer and equipment expense
3,842
3,509
3,456
13,604
13,549
Professional services expense
7,529
6,337
6,968
28,267
23,666
Data processing service expense
3,368
3,484
3,185
13,181
13,607
FDIC and State assessments
2,038
2,003
1,937
8,037
7,132
Marketing expense
2,171
2,005
1,643
6,863
6,913
Other real estate owned expense/(income)
34
55
146
127
343
Amortization of investments in low income housing andalternative
energy partnerships
14,594
11,949
10,784
42,065
45,447
Amortization of core deposit intangibles
1,168
250
172
1,892
687
Cost associated with debt redemption
—
—
—
—
732
Acquisition, integration and reorganization costs
—
59
949
4,086
1,425
Other operating expense
5,729
5,085
4,903
19,956
19,909
Total non-interest expense
81,224
75,388
73,197
303,432
286,523
Income before income tax expense
131,278
130,017
98,559
472,536
381,843
Income tax expense
33,677
30,982
23,234
111,894
83,539
Net income
$
97,601
$
99,035
$
75,325
$
360,642
$
298,304
Net income per common share: Basic
$
1.33
$
1.34
*
$
0.98
$
4.85
$
3.81
Diluted
$
1.33
$
1.33
*
$
0.98
$
4.83
$
3.80
Cash dividends paid per common share
$
0.34
$
0.34
$
0.34
$
1.36
$
1.27
Basic average common shares outstanding
73,130,500
73,956,052
*
76,566,481
74,337,265
78,268,369
Diluted average common shares outstanding
73,467,401
74,242,052
*
76,914,817
74,664,735
78,570,638
*Net income per common share, basic and diluted average
shares outstanding previously reported for the third quarter of
2022 has been corrected. The correction decreased basic and diluted
net income per common share by $.01 and $.02, respectively and
increased basic and diluted average common shares by 797,956
shares.
CATHAY GENERAL BANCORP
AVERAGE BALANCES – SELECTED
CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
Three months ended
(In thousands) December 31, 2022
September 30, 2022 December 31, 2021
Interest-earning assets
AverageBalance AverageYield/Rate (1) AverageBalance
AverageYield/Rate (1) AverageBalance AverageYield/Rate (1) Loans
(1)
$
18,117,692
5.33
%
$
17,923,495
4.68
%
$
16,130,896
4.04
%
Taxable investment securities
1,493,472
2.70
%
1,364,013
2.18
%
1,152,596
1.44
%
FHLB stock
17,250
7.57
%
18,756
5.46
%
17,250
6.00
%
Deposits with banks
1,052,161
3.75
%
1,178,261
2.27
%
1,779,275
0.15
%
Total interest-earning assets
$
20,680,575
5.06
%
$
20,484,525
4.38
%
$
19,080,017
3.52
%
Interest-bearing liabilities Interest-bearing demand
deposits
$
2,514,877
0.78
%
$
2,508,526
0.30
%
$
2,217,341
0.08
%
Money market deposits
4,350,804
1.63
%
5,153,566
0.90
%
4,393,816
0.39
%
Savings deposits
1,064,019
0.09
%
1,151,126
0.07
%
932,678
0.08
%
Time deposits
6,403,334
2.13
%
5,013,213
0.81
%
5,604,073
0.51
%
Total interest-bearing deposits
$
14,333,034
1.59
%
$
13,826,431
0.69
%
$
13,147,908
0.37
%
Other borrowed funds
358,840
3.70
%
498,234
2.34
%
43,186
1.34
%
Long-term debt
119,136
4.09
%
119,136
4.85
%
119,136
4.85
%
Total interest-bearing liabilities
14,811,010
1.66
%
14,443,801
0.78
%
13,310,230
0.41
%
Non-interest-bearing demand deposits
4,337,065
4,456,214
4,162,906
Total deposits and other borrowed funds
$
19,148,075
$
18,900,015
$
17,473,136
Total average assets
$
21,917,339
$
21,658,860
$
20,176,429
Total average equity
$
2,461,524
$
2,465,192
$
2,466,363
Year ended
(In thousands) December 31, 2022 December
31, 2021
Interest-earning assets AverageBalance
AverageYield/Rate (1) AverageBalance AverageYield/Rate (1) Loans
(1)
$
17,631,943
4.55
%
$
15,827,550
4.10
%
Taxable investment securities
1,321,346
2.14
%
1,046,187
1.35
%
FHLB stock
17,629
6.26
%
17,250
5.74
%
Deposits with banks
1,261,833
1.58
%
1,649,564
0.13
%
Total interest-earning assets
$
20,232,751
4.21
%
$
18,540,551
3.59
%
Interest-bearing liabilities Interest-bearing demand
deposits
$
2,471,256
0.33
%
$
2,047,177
0.11
%
Money market deposits
4,902,357
0.81
%
4,034,246
0.45
%
Savings deposits
1,118,967
0.08
%
897,663
0.09
%
Time deposits
5,398,808
1.04
%
5,979,191
0.68
%
Total interest-bearing deposits
$
13,891,388
0.76
%
$
12,958,277
0.48
%
Other borrowed funds
247,276
2.73
%
75,516
1.57
%
Long-term debt
119,136
4.66
%
119,136
4.85
%
Total interest-bearing liabilities
14,257,800
0.82
%
13,152,929
0.52
%
Non-interest-bearing demand deposits
4,386,526
3,751,626
Total deposits and other borrowed funds
$
18,644,326
$
16,904,555
Total average assets
$
21,383,739
$
19,591,537
Total average equity
$
2,453,391
$
2,463,021
(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.
(In thousands, except share and per share data)
December 31, 2022
September 30, 2022
December 31, 2021
Stockholders' equity (a)
$
2,474,040
$
2,419,559
$
2,446,251
Less: Goodwill
(375,696
)
(375,696
)
(372,189
)
Other intangible assets (1)
(5,757
)
(6,948
)
(4,627
)
Tangible equity (b)
$
2,092,587
$
2,036,915
$
2,069,435
Total assets (c)
$
21,985,753
$
21,890,131
$
20,886,723
Less: Goodwill
(375,696
)
(375,696
)
(372,189
)
Other intangible assets (1)
(5,757
)
(6,948
)
(4,627
)
Tangible assets (d)
$
21,604,300
$
21,507,487
$
20,509,907
Number of common shares outstanding (e)
72,742,151
73,411,960
75,750,862
Total stockholders' equity to total assets ratio (a)/(c)
11.25
%
11.05
%
11.71
%
Tangible equity to tangible assets ratio (b)/(d)
9.69
%
9.47
%
10.09
%
Tangible book value per share (b)/(e)
$
28.77
$
27.75
$
27.32
Three Months Ended Twelve Months Ended (In
thousands, except share and per share data)
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Net Income
$
97,601
$
99,035
$
75,325
$
360,642
$
298,304
Add: Amortization of other intangibles
1,191
250
203
2,007
828
Tax effect of amortization adjustments (2)
(353
)
(74
)
(60
)
(595
)
(246
)
Tangible net income (f)
$
98,439
$
99,211
$
75,468
$
362,054
$
298,886
Return on tangible common equity (3) (f)/(b)
18.82
%
19.48
%
14.59
%
17.30
%
14.44
%
(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/20230125005217/en/
Heng W. Chen (626) 279-3652
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