CATHAY GENERAL BANCORP 
By LOS ANGELES, Jan. 23, 2014 /PRNewswire/ -- Cathay General Bancorp (the "Company", NASDAQ: CATY), the holding company for Cathay Bank, today announced results for the fourth quarter and for the year ended December 31, 2013.
FINANCIAL PERFORMANCE
Three months ended December Year ended December
31, 31,
---------------------------- --------------------
2013 2012 2013 2012
---- ---- ---- ----
Net income $31.9 million $28.3 million $123.1 million $117.4 million
Net income available to common stockholders $31.9 million $24.2 million $113.5 million $101.0 million
Basic earnings per common share $0.40 $0.31 $1.44 $1.28
Diluted earnings per common share $0.40 $0.31 $1.43 $1.28
Return on average assets 1.19% 1.06% 1.17% 1.11%
Return on average total stockholders' equity 8.70% 6.97% 8.00% 7.48%
Efficiency ratio 44.65% 53.11% 50.35% 52.37%
FULL YEAR HIGHLIGHTS
-- Diluted earnings per share increased 11.7% to $1.43 per share for the
year ended 2013 compared to $1.28 per share for the year ended 2012.
-- Strong growth in loans - Total loans increased $655.4 million, or 8.8%,
during 2013, to $8.1 billion at December 31, 2013, compared to $7.4
billion at December 31, 2012.
-- Redemption on September 30, 2013, of the remaining $129 million of the
Company's preferred stock issued under the U.S. Treasury's TARP Capital
Purchase Program.
"Our loan growth for the fourth quarter was solid at $252.6 million, or a 13% annualized rate. Continuing our goal of increasing our number of branches to better serve our customers, earlier this week, we signed an agreement to purchase the deposits of a branch located in the Richmond District of San Francisco, which will become our second branch in the City of San Francisco," commented Dunson Cheng, Chairman of the Board, Chief Executive Officer, and President of the Company.
"Our new West Covina, California branch opened on December 19, 2013 and we expect to open our new Bensonhurst, New York branch in March, 2014. Our focus on core deposit generation resulted in core deposits increasing 10.3% during 2013," said Peter Wu, Executive Vice Chairman and Chief Operating Officer.
"During December 2013, we increased our quarterly dividend from $.01 to $.05 per share. We will continue to work to restore our dividend to historical levels," concluded Dunson Cheng.
FOURTH QUARTER INCOME STATEMENT REVIEW
Net income available to common stockholders for the quarter ended December 31, 2013, was $31.9 million, an increase of $7.7 million, or 31.8%, compared to a net income available to common stockholders of $24.2 million for the same quarter a year ago. Diluted earnings per share available to common stockholders for the quarter ended December 31, 2013, was $0.40 compared to $0.31 for the same quarter a year ago due primarily to decreases in cost associated with debt redemption, decreases in other real estate owned ("OREO") expenses, and decreases in amortization of core deposit intangibles offset by decreases in gains on sale of securities.
Return on average stockholders' equity was 8.70% and return on average assets was 1.19% for the quarter ended December 31, 2013, compared to a return on average stockholders' equity of 6.97% and a return on average assets of 1.06% for the same quarter a year ago.
Net interest income before provision for credit losses
Net interest income before provision for credit losses increased $897,000, or 1.1%, to $82.0 million during the fourth quarter of 2013 compared to $81.1 million during the same quarter a year ago. The increase was due primarily to the decrease in interest expense from securities sold under agreements to repurchase offset by the decrease in interest income from investment securities.
The net interest margin, on a fully taxable-equivalent basis, was 3.30% for the fourth quarter of 2013, compared to 3.35% for the third quarter of 2013, and 3.28% for the fourth quarter of 2012. The decrease in the interest expense on securities sold under agreements to repurchase offset by decreases in earnings on investment securities contributed to the increase in the net interest margin compared to the fourth quarter of 2012.
For the fourth quarter of 2013, the yield on average interest-earning assets was 4.09%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.03%, and the cost of interest bearing deposits was 0.65%. In comparison, for the fourth quarter of 2012, the yield on average interest-earning assets was 4.25%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.25%, and the cost of interest bearing deposits was 0.65%. The interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, increased six basis points to 3.06% for the quarter ended December 31, 2013, from 3.00% for the same quarter a year ago, primarily for the reasons discussed above.
Provision for credit losses
Provision for credit losses was zero for both the fourth quarter of 2013 and the fourth quarter of 2012. The provision for credit losses was based on the review of the adequacy of the allowance for loan losses at December 31, 2013. The provision or reversal for credit losses represents the charge against or benefit toward current earnings that is determined by management, through a credit review process, as the amount needed to establish an allowance that management believes to be sufficient to absorb credit losses inherent in the Company's loan portfolio, including unfunded commitments. The following table summarizes the charge-offs and recoveries for the periods indicated:
Three months ended December
31, Year ended December 31,
---------------------------- -----------------------
2013 2012 2013 2012
---- ---- ---- ----
(In thousands)
Charge-
offs:
Commercial
loans $11,045 $3,228 $15,625 $17,707
Construction
loans-
residential - - - 391
Construction
loans-
other - - - 774
Real
estate
loans
(1) 626 1,265 3,499 13,616
Real
estate-
land
loans - 177 1,318 278
Installment
and
other
loans - - - 25
--- --- --- ---
Total
charge-
offs 11,671 4,670 20,442 32,791
------ ----- ------ ------
Recoveries:
Commercial
loans 724 719 2,739 1,949
Construction
loans-
residential 1 76 1,201 3,788
Construction
loans-
other 27 452 1,083 2,365
Real
estate
loans
(1) 1,749 2,036 5,978 8,820
Real
estate-
land
loans 896 24 2,997 1,202
Installment
and
other
loans - - 11 3
--- --- --- ---
Total
recoveries 3,397 3,307 14,009 18,127
----- ----- ------ ------
Net
charge-
offs $8,274 $1,363 $6,433 $14,664
====== ====== ====== =======
(1) Real estate loans
include commercial
mortgage loans,
residential mortgage
loans, and equity
lines.
Non-interest income
Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), gains (losses) on loan sales, wire transfer fees, and other sources of fee income, was $8.3 million for the fourth quarter of 2013, a decrease of $3.9 million, or 31.6%, compared to $12.2 million for the fourth quarter of 2012. The decrease in non-interest income in the fourth quarter of 2013 was primarily due to a decrease of $4.6 million in gains on sale of securities and a decrease of $470,000 in venture capital income offset by increases of $331,000 in other miscellaneous loan fees, $242,000 in commissions from wealth management, and $230,000 in letters of credit commissions.
Non-interest expense
Non-interest expense decreased $9.2 million, or 18.6%, to $40.3 million in the fourth quarter of 2013 compared to $49.5 million in the same quarter a year ago. The efficiency ratio was 44.65% in the fourth quarter of 2013 compared to 53.11% for the same quarter a year ago.
Prepayment penalties decreased $5.9 million to $2,000 in the fourth quarter of 2013 compared to $5.9 million in the same quarter a year ago. The Company did not prepay any securities sold under agreements in the fourth quarter of 2013 compared to $100.0 million in the same period a year ago. In December 2013, the Company prepaid $50.0 million of subordinated debt. OREO expenses decreased $2.7 million primarily due to increases in gains on sales of OREO and decreases in provision for OREO write-downs. Amortization of core deposit premium decreased $962,000 to $436,000 in the fourth quarter of 2013 compared to $1.4 million in the same quarter a year ago as a result of the full amortization of the core deposit premium from the General Bank acquisition.
Income taxes
The effective tax rate for the fourth quarter of 2013 was 36.0% compared to 35.1% for the fourth quarter of 2012. The effective tax rate includes the impact of the utilization of low income housing tax credits and the recognition of other tax credits.
BALANCE SHEET REVIEW
Gross loans were $8.08 billion at December 31, 2013, an increase of $655.4 million, or 8.8%, from $7.43 billion at December 31, 2012, primarily due to increases of $254.6 million, or 6.8%, in commercial mortgage loans, increases of $209.0 million, or 18.2%, in residential mortgage loans, and increases of $171.6 million, or 8.1%, in commercial loans. The changes in loan balances and composition from December 31, 2012, are presented below:
Type
of
Loans December 31, 2013 December 31, 2012 % Change
----- ----------------- ----------------- --------
(Dollars in thousands)
Commercial
loans $2,298,724 $2,127,107 8
Residential
mortgage
loans 1,355,255 1,146,230 18
Commercial
mortgage
loans 4,023,051 3,768,452 7
Equity
lines 171,277 193,852 (12)
Real
estate
construction
loans 221,701 180,950 23
Installment
&
other
loans 14,555 12,556 16
Gross
loans $8,084,563 $7,429,147 9
Allowance
for
loan
losses (173,889) (183,322) (5)
Unamortized
deferred
loan
fees (13,487) (10,238) 32
------- -------
Total
loans,
net $7,897,187 $7,235,587 9
---------- ----------
Total deposits were $7.98 billion at December 31, 2013, an increase of $598.1 million, or 8.1%, from $7.38 billion at December 31, 2012, primarily due to a $287.0 million, or 44.6%, increase in time deposits under $100,000, a $99.6 million, or 8.4%, increase in money market deposits, a $172.4 million, or 13.6%, increase in non-interest bearing demand deposits, a $90.7 million, or 15.3%, increase in NOW deposits, and a $25.7 million, or 5.4%, increase in saving deposits offset by a $77.4 million, or 2.4%, decrease in time deposits of $100,000 or more. Increases in time deposits under $100,000 were primarily due to increases in brokered time deposits. The changes in deposit balances and composition from December 31, 2012, are presented below:
Deposits December 31, 2013 December 31, 2012 % Change
-------- ----------------- ----------------- --------
(Dollars in thousands)
Non-
interest-
bearing
demand
deposits $1,441,858 $1,269,455 14
NOW
deposits 683,873 593,133 15
Money
market
deposits 1,286,338 1,186,771 8
Savings
deposits 499,520 473,805 5
Time
deposits
under
$100,000 931,204 644,191 45
Time
deposits
of
$100,000
or
more 3,138,512 3,215,870 (2)
--------- ---------
Total
deposits $7,981,305 $7,383,225 8
========== ==========
ASSET QUALITY REVIEW
At December 31, 2013, total non-accrual loans were $83.2 million, a decrease of $20.7 million, or 19.9%, from $103.9 million at December 31, 2012.
The allowance for loan losses was $173.9 million and the allowance for off-balance sheet unfunded credit commitments was $1.4 million at December 31, 2013, which represented the amount believed by management to be sufficient to absorb credit losses inherent in the loan portfolio, including unfunded commitments. The allowance for credit losses, which is the sum of the allowances for loan losses and for off-balance sheet unfunded credit commitments, was $175.3 million at December 31, 2013, compared to $184.7 million at December 31, 2012, a decrease of $9.4 million, or 5.1%. The allowance for credit losses represented 2.17% of period-end gross loans and 208.2% of non-performing loans at December 31, 2013. The comparable ratios were 2.49% of period-end gross loans and 176.7% of non-performing loans at December 31, 2012. The changes in the Company's non-performing assets and troubled debt restructurings at December 31, 2013, compared to December 31, 2012, and to September 30, 2013, are highlighted below:
(Dollars in
thousands) December 31, 2013 December 31, 2012 % Change September 30, 2013 % Change
----------------- ----------------- -------- ------------------ --------
Non-
performing
assets
Accruing
loans past
due 90 days
or more $982 $630 56 $499 97
Non-accrual
loans:
Construction-
residential
loans 3,313 2,984 11 3,495 (5)
Construction-
non-
residential
loans 25,273 33,315 (24) 25,500 (1)
Land loans 6,502 6,053 7 8,334 (22)
Commercial
real estate
loans,
excluding
land loans 13,119 29,651 (56) 27,662 (53)
Commercial
loans 21,232 19,958 6 24,506 (13)
Residential
mortgage
loans 13,744 11,941 15 10,364 33
------ ------ ------
Total non-
accrual
loans: $83,183 $103,902 (20) $99,861 (17)
------- -------- -------
Total non-
performing
loans 84,165 104,532 (19) 100,360 (16)
Other real
estate
owned 52,985 46,384 14 49,777 6
Total non-
performing
assets $137,150 $150,916 (9) $150,137 (9)
-------- -------- --------
Accruing
troubled
debt
restructurings
(TDRs) $117,597 $144,695 (19) $115,940 1
Allowance
for loan
losses $173,889 $183,322 (5) $181,452 (4)
Allowance
for off-
balance
sheet
credit
commitments 1,362 1,363 (0) 2,074 (34)
----- ----- -----
Allowance
for credit
losses $175,251 $184,685 (5) $183,526 (5)
======== ======== ========
Total gross
loans
outstanding,
at period-
end $8,084,563 $7,429,147 9 $7,832,013 3
Allowance
for loan
losses to
non-
performing
loans, at
period-end 206.60% 175.37% 180.80%
Allowance
for loan
losses to
gross
loans, at
period-end 2.15% 2.47% 2.32%
Allowance
for credit
losses to
gross
loans, at
period-end 2.17% 2.49% 2.34%
Troubled debt restructurings on accrual status totaled $117.6 million at December 31, 2013, compared to $144.7 million at December 31, 2012. These loans are classified as troubled debt restructurings as a result of granting a concession to borrowers. Although these loan modifications are considered troubled debt restructurings under Accounting Standard Codification 310-40 and Accounting Standard Update 2011-02, these loans have been performing under the restructured terms and have demonstrated sustained performance under the modified terms. The sustained performance considered by management includes the periods prior to the modification if the prior performance met or exceeded the modified terms as well as cash paid to set up interest reserves.
The ratio of non-performing assets to total assets was 1.3% at December 31, 2013, compared to 1.4% at December 31, 2012. Total non-performing assets decreased $13.7 million, or 9.1%, to $137.2 million at December 31, 2013, compared to $150.9 million at December 31, 2012, primarily due to a $20.7 million, or 19.9%, decrease in non-accrual loans offset by a $6.6 million, or 14.2%, increase in OREO.
CAPITAL ADEQUACY REVIEW
At December 31, 2013, the Company's Tier 1 risk-based capital ratio of 15.03%, total risk-based capital ratio of 16.34%, and Tier 1 leverage capital ratio of 12.48%, continue to place the Company in the "well capitalized" category for regulatory purposes, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 6%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%. At December 31, 2012, the Company's Tier 1 risk-based capital ratio was 17.36%, total risk-based capital ratio was 19.12%, and Tier 1 leverage capital ratio was 13.82%.
FULL YEAR REVIEW
Net income attributable to common stockholders for the year ended December 31, 2013, was $113.5 million, an increase of $12.5 million, or 12.4%, compared to net income attributable to common stockholders of $101.0 million for the year ended December 31, 2012, due primarily to increases in gains on sale of securities, decreases in OREO expenses, decreases in litigation expenses, and increases in commissions from wealth management, offset by decreases in the reversal for credit losses, increases in prepayment penalties on the prepayment of securities sold under an agreement to repurchase, increases in salaries and incentive compensation expense, increases in consulting expense, and increases in legal and collection expense. Diluted earnings per share was $1.43 for the year ended December 31, 2013, compared to $1.28 per share for the year ended December 31, 2012. The net interest margin for the year ended December 31, 2013, increased five basis points to 3.33% compared to 3.28% for the year ended December 31, 2012.
Return on average stockholders' equity was 8.00% and return on average assets was 1.17% for the year ended December 31, 2013, compared to a return on average stockholders' equity of 7.48% and a return on average assets of 1.11% for the year ended December 31, 2012. The efficiency ratio for the year ended December 31, 2013, was 50.35% compared to 52.37% for the year ended December 31, 2012.
CONFERENCE CALL
Cathay General Bancorp will host a conference call this afternoon to discuss its fourth quarter 2013 financial results. The call will begin at 3:00 p.m. Pacific Time. Analysts and investors may dial in and participate in the question-and-answer session. To access the call, please dial 1-877-703-6102 and enter Participant Passcode 88064359. A listen-only live Webcast of the call will be available at www.cathaygeneralbancorp.com and a recorded version is scheduled to be available for replay for 12 months after the call.
ABOUT CATHAY GENERAL BANCORP
Cathay General Bancorp is the holding company for Cathay Bank, a California state-chartered bank. Founded in 1962, Cathay Bank offers a wide range of financial services. Cathay Bank currently operates 32 branches in California, eight branches in New York State, one in Massachusetts, two in Texas, three in Washington State, three in the Chicago, Illinois area, one in New Jersey, one in Nevada, one in Hong Kong, and a representative office in Shanghai and in Taipei. Cathay Bank's website is found at http://www.cathaybank.com. Cathay General Bancorp's website is found at http://www.cathaygeneralbancorp.com. Information set forth on such websites is not incorporated into this press release.
FORWARD-LOOKING STATEMENTS AND OTHER NOTICES
Statements made in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 regarding management's beliefs, projections, and assumptions concerning future results and events. These forward-looking statements may include, but are not limited to, such words as "aims," "anticipates," "believes," "can," "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 U.S. and international business and economic conditions; credit risks of lending activities and deterioration in asset or credit quality; potential supervisory action by federal supervisory authorities; increased costs of compliance and other risks associated with changes in regulation and the current regulatory environment, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), and the potential for substantial changes in the legal, regulatory, and enforcement framework and oversight applicable to financial institutions in reaction to recent adverse financial market events, including changes pursuant to the Dodd-Frank Act; potential goodwill impairment; liquidity risk; fluctuations in interest rates; inflation and deflation; risks associated with acquisitions and the expansion of our business into new markets; real estate market conditions and the value of real estate collateral; environmental liabilities; our ability to compete with larger competitors; the possibility of higher capital requirements, including implementation of the Basel III capital standards of the Basel Committee; our ability to retain key personnel; successful management of reputational risk; natural disasters and geopolitical events; general economic or business conditions in California, Asia, and other regions where Cathay Bank has operations; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to technological changes, including successfully implementing our core system conversion; adverse results in legal proceedings; changes in accounting standards or tax laws and regulations; market disruption and volatility; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; and the soundness of other financial institutions.
These and other factors are further described in Cathay General Bancorp's Annual Report on Form 10-K for the year ended December 31, 2012 (Item 1A in particular), other reports filed with the Securities and Exchange Commission ("SEC"), and other filings Cathay General Bancorp makes with the SEC from time to time. Actual results in any future period may also vary from the past results discussed in this press release. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements, which speak to the date of this press release. Cathay General Bancorp has no intention and undertakes no obligation to update any forward-looking statement or to publicly announce any revision of any forward-looking statement to reflect future developments or events, except as required by law.
Cathay General Bancorp's filings with the SEC are available at the website maintained by the SEC at http://www.sec.gov, or by request directed to Cathay General Bancorp, 9650 Flair Drive, El Monte, California 91731, Attention: Investor Relations, (626) 279-3286.
CATHAY GENERAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Three months ended
December 31, Year ended December 31,
------------------- -----------------------
(Dollars in
thousands, except
per share data) 2013 2012 % Change 2013 2012 % Change
------------------ ---- ---- -------- ---- ---- --------
FINANCIAL
PERFORMANCE
Net interest
income before
provision for
credit losses $81,962 $81,065 1 $324,696 $321,253 1
Provision reversal
for credit losses - - - (3,000) (9,000) (67)
--- --- ------ ------
Net interest
income after
provision for
credit losses 81,962 81,065 1 327,696 330,253 (1)
Non-interest
income 8,345 12,202 (32) 60,307 46,507 30
Non-interest
expense 40,319 49,532 (19) 193,833 192,589 1
------ ------ ------- -------
Income before
income tax
expense 49,988 43,735 14 194,170 184,171 5
Income tax expense 17,946 15,276 17 70,435 66,128 7
------ ------ ------ ------
Net income 32,042 28,459 13 123,735 118,043 5
Net income
attributable to
noncontrolling
interest 140 153 (8) 592 605 (2)
--- --- --- ---
Net income
attributable to
Cathay General
Bancorp $31,902 $28,306 13 $123,143 $117,438 5
------- ------- -------- --------
Dividends on
preferred stock
and noncash
charge from
repayment - (4,127) (100) (9,685) (16,488) (41)
--- ------ ------ -------
Net income
attributable to
common
stockholders $31,902 $24,179 32 $113,458 $100,950 12
======= ======= ======== ========
Net income attributable to common stockholders
per common share:
Basic $0.40 $0.31 29 $1.44 $1.28 13
Diluted $0.40 $0.31 29 $1.43 $1.28 12
Cash dividends
paid per common
share $0.05 $0.01 400 $0.08 $0.04 100
SELECTED RATIOS
Return on average
assets 1.19% 1.06% 12 1.17% 1.11% 5
Return on average
total
stockholders'
equity 8.70% 6.97% 25 8.00% 7.48% 7
Efficiency ratio 44.65% 53.11% (16) 50.35% 52.37% (4)
Dividend payout
ratio 12.46% 2.78% 348 5.15% 2.68% 92
YIELD ANALYSIS
(Fully taxable
equivalent)
Total interest-
earning assets 4.09% 4.25% (4) 4.17% 4.38% (5)
Total interest-
bearing
liabilities 1.03% 1.25% (18) 1.09% 1.39% (22)
Net interest
spread 3.06% 3.00% 2 3.08% 2.99% 3
Net interest
margin 3.30% 3.28% 1 3.33% 3.28% 2
CAPITAL RATIOS December 31, 2013 December 31, 2012 September 30, 2013 Well Capitalized Requirements Minimum Regulatory Requirements
----------------- ----------------- ------------------ ----------------------------- -------------------------------
Tier 1 risk-based
capital ratio 15.03% 17.36% 14.88% 6.0% 4.0%
Total risk-based
capital ratio 16.34% 19.12% 16.65% 10.0% 8.0%
Tier 1 leverage
capital ratio 12.48% 13.82% 12.36% 5.0% 4.0%
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands,
except share and
per share data) December 31, 2013 December 31, 2012 % change
----------------- ----------------- ----------------- --------
Assets
Cash and due from
banks $153,747 $144,909 6
Short-term
investments and
interest bearing
deposits 516,938 411,983 25
Securities held-
to-maturity
(market value of
$823,906 in
2012) - 773,768 (100)
Securities
available-for-
sale (amortized
cost of
$1,637,965 in
2013 and
$1,290,676 in 2012) 1,586,668 1,291,480 23
Trading
securities 4,936 4,703 5
Loans 8,084,563 7,429,147 9
Less: Allowance
for loan losses (173,889) (183,322) (5)
Unamortized
deferred loan
fees, net (13,487) (10,238) 32
------- -------
Loans, net 7,897,187 7,235,587 9
Federal Home Loan
Bank stock 25,000 41,272 (39)
Other real estate
owned, net 52,985 46,384 14
Affordable
housing
investments, net 84,108 85,037 (1)
Premises and
equipment, net 102,045 102,613 (1)
Customers'
liability on
acceptances 32,194 41,271 (22)
Accrued interest
receivable 24,274 26,015 (7)
Goodwill 316,340 316,340 -
Other intangible
assets, net 2,230 6,132 (64)
Other assets 191,095 166,595 15
------- -------
Total assets $10,989,747 $10,694,089 3
=========== ===========
Liabilities and
Stockholders'
Equity
Deposits
Non-interest-
bearing demand
deposits $1,441,858 $1,269,455 14
Interest-bearing
deposits:
NOW deposits 683,873 593,133 15
Money market
deposits 1,286,338 1,186,771 8
Savings deposits 499,520 473,805 5
Time deposits
under $100,000 931,204 644,191 45
Time deposits of
$100,000 or more 3,138,512 3,215,870 (2)
--------- ---------
Total deposits 7,981,305 7,383,225 8
--------- ---------
Securities sold
under agreements
to repurchase 800,000 1,250,000 (36)
Advances from the
Federal Home
Loan Bank 521,200 146,200 256
Other borrowings
for affordable
housing
investments 19,062 18,713 2
Long-term debt 121,136 171,136 (29)
Acceptances
outstanding 32,194 41,271 (22)
Other liabilities 55,418 54,040 3
------ ------
Total liabilities 9,530,315 9,064,585 5
--------- ---------
Commitments and
contingencies - - -
--- ---
Stockholders'
Equity
Preferred stock,
10,000,000
shares
authorized, none
issued
and outstanding
at December 31,
2013, and
258,000 issued
and outstanding
at December 31,
2012 - 254,580 (100)
Common stock,
$0.01 par value,
100,000,000
shares
authorized,
83,797,434 issued
and 79,589,869
outstanding at
December 31,
2013, and
82,985,853 issued
and 78,778,288
outstanding at
December 31,
2012 838 830 1
Additional paid-
in-capital 784,949 768,925 2
Accumulated other
comprehensive
(loss)/income,
net (29,728) 465 (6,493)
Retained earnings 829,109 721,993 15
Treasury stock,
at cost
(4,207,565
shares at
December 31,
2013,
and at December
31, 2012) (125,736) (125,736) -
-------- --------
Total Cathay
General Bancorp
stockholders'
equity 1,459,432 1,621,057 (10)
--------- ---------
Noncontrolling
interest - 8,447 (100)
--- -----
Total equity 1,459,432 1,629,504 (10)
--------- ---------
Total liabilities
and equity $10,989,747 $10,694,089 3
=========== ===========
Book value per
common share $18.25 $17.12 7
Number of common
shares
outstanding 79,589,869 78,778,288 1
CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended December 31, Year ended December 31,
------------------------------- -----------------------
2013 2012 2013 2012
---- ---- ---- ----
(In thousands, except share and per share data)
INTEREST AND
DIVIDEND INCOME
Loan receivable,
including loan fees $92,402 $91,157 $359,959 $360,643
Investment
securities-
taxable 8,426 12,349 43,412 62,395
Investment
securities-
nontaxable - 1,034 995 4,161
Federal Home Loan
Bank stock 439 295 1,480 485
Federal funds sold
and securities
purchased under
agreements to
resell - - - 18
Deposits with banks 354 446 1,150 2,042
Total interest and
dividend income 101,621 105,281 406,996 429,744
------- ------- ------- -------
INTEREST EXPENSE
Time deposits of
$100,000 or more 6,745 7,289 27,211 33,441
Other deposits 3,934 2,887 13,178 13,932
Securities sold
under agreements to
repurchase 7,914 12,712 37,692 55,699
Advances from
Federal Home Loan
Bank 153 74 528 270
Long-term debt 913 1,254 3,691 5,149
Total interest
expense 19,659 24,216 82,300 108,491
------ ------ ------ -------
Net interest income
before provision
for credit losses 81,962 81,065 324,696 321,253
Provision reversal
for credit losses - - (3,000) (9,000)
Net interest income
after provision for
credit losses 81,962 81,065 327,696 330,253
------ ------ ------- -------
NON-INTEREST INCOME
Securities gains,
net 205 4,785 27,362 18,026
Letters of credit
commissions 1,673 1,443 6,281 6,316
Depository service
fees 1,371 1,339 5,701 5,453
Other operating
income 5,096 4,635 20,963 16,712
Total non-interest
income 8,345 12,202 60,307 46,507
----- ------ ------ ------
NON-INTEREST EXPENSE
Salaries and
employee benefits 21,084 19,951 88,276 78,377
Occupancy expense 3,880 3,682 14,846 14,608
Computer and
equipment expense 2,280 2,397 9,768 9,591
Professional
services expense 6,090 6,544 24,574 21,768
FDIC and State
assessments 1,920 1,785 7,351 8,339
Marketing expense 700 1,199 3,403 4,607
Other real estate
owned
(income)/expense (1,121) 1,568 (235) 15,116
Operations of
affordable housing
investments 2,301 1,919 7,253 6,306
Amortization of core
deposit intangibles 436 1,398 4,533 5,663
Cost associated with
debt redemption 2 5,920 22,557 12,120
Other operating
expense 2,747 3,169 11,507 16,094
Total non-interest
expense 40,319 49,532 193,833 192,589
------ ------ ------- -------
Income before income
tax expense 49,988 43,735 194,170 184,171
Income tax expense 17,946 15,276 70,435 66,128
------ ------ ------ ------
Net income 32,042 28,459 123,735 118,043
Less: net income
attributable to
noncontrolling
interest 140 153 592 605
--- --- --- ---
Net income
attributable to
Cathay General
Bancorp 31,902 28,306 123,143 117,438
------ ------ ------- -------
Dividends on
preferred stock and
noncash charge from
repayment - (4,127) (9,685) (16,488)
--- ------ ------ -------
Net income
attributable to
common stockholders $31,902 $24,179 $113,458 $100,950
======= ======= ======== ========
Net income
attributable to
common stockholders
per common share:
Basic $0.40 $0.31 $1.44 $1.28
Diluted $0.40 $0.31 $1.43 $1.28
Cash dividends paid
per common share $0.05 $0.01 $0.08 $0.04
Basic average common
shares outstanding 79,256,279 78,757,798 78,954,898 78,719,133
Diluted average
common shares
outstanding 79,713,155 78,759,222 79,137,983 78,723,297
CATHAY GENERAL BANCORP
AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
Three months ended,
-------------------
(In
thousands) December 31, 2013 December 31, 2012 September 30, 2013
----------- ----------------- ----------------- ------------------
Interest-
earning
assets Average Balance Average Average Balance Average Average Balance Average
Yield/Rate Yield/Rate Yield/Rate
(1) (2) (1) (2) (1) (2)
--- --- -------
Loans
(1) $7,945,343 4.61% $7,318,749 4.96% $7,732,167 4.66%
Taxable
investment
securities 1,683,358 1.99% 2,005,074 2.45% 1,869,101 2.31%
Tax-
exempt
investment
securities
(2) - - 130,927 4.83% - -
FHLB
stock 26,801 6.50% 43,290 2.71% 30,938 5.76%
Deposits
with
banks 190,092 0.74% 405,467 0.44% 160,985 0.76%
------- ---- ------- ---- ------- ----
Total
interest-
earning
assets $9,845,594 4.09% $9,903,507 4.25% $9,793,191 4.15%
---------- ---------- ----------
Interest-bearing liabilities
Interest-
bearing
demand
deposits $667,005 0.16% $568,762 0.16% $647,037 0.16%
Money
market
deposits 1,323,759 0.61% 1,200,528 0.55% 1,234,091 0.58%
Savings
deposits 504,411 0.08% 469,249 0.08% 471,849 0.07%
Time
deposits 4,047,956 0.81% 3,958,704 0.83% 4,069,612 0.80%
--------- ---- --------- ---- --------- ----
Total
interest-
bearing
deposits $6,543,131 0.65% $6,197,243 0.65% $6,422,589 0.64%
Securities
sold
under
agreements
to
repurchase 800,000 3.92% 1,288,587 3.92% 855,435 3.90%
Other
borrowed
funds 87,746 0.69% 41,290 0.71% 82,822 0.72%
Long-
term
debt 164,614 2.20% 171,136 2.92% 171,136 2.16%
------- ---- ------- ---- ------- ----
Total
interest-
bearing
liabilities 7,595,491 1.03% 7,698,256 1.25% 7,531,982 1.05%
Non-
interest-
bearing
demand
deposits 1,448,044 1,236,304 1,353,451
--------- --------- ---------
Total
deposits
and
other
borrowed
funds $9,043,535 $8,934,560 $8,885,433
---------- ---------- ----------
Total
average
assets $10,612,221 $10,641,799 $10,519,491
Total
average
equity $1,463,034 $1,625,065 $1,547,606
---------- ---------- ----------
Year ended,
-----------
(In
thousands) December 31, 2013 December 31, 2012
----------- ----------------- -----------------
Interest-
earning
assets Average Balance Average Average Balance Average
Yield/Rate Yield/Rate
(1) (2) (1) (2)
---
Loans
(1) $7,630,530 4.72% $7,095,076 5.08%
Taxable
investment
securities 1,903,541 2.28% 2,216,857 2.81%
Tax-
exempt
investment
securities
(2) 29,076 5.27% 131,530 4.87%
FHLB
stock 33,446 4.43% 47,938 1.01%
Federal funds sold and securities
purchased
under
agreements
to
resell - - 14,986 0.12%
Deposits
with
banks 184,654 0.62% 367,138 0.56%
------- ---- ------- ----
Total
interest-
earning
assets $9,781,247 4.17% $9,873,525 4.38%
---------- ----------
Interest-bearing liabilities
Interest-
bearing
demand
deposits $634,506 0.16% $516,246 0.15%
Money
market
deposits 1,215,347 0.58% 1,059,841 0.56%
Savings
deposits 488,932 0.08% 451,022 0.08%
Time
deposits 3,993,508 0.80% 4,197,906 0.96%
--------- ---- --------- ----
Total
interest-
bearing
deposits $6,332,293 0.64% $6,225,015 0.76%
Securities
sold
under
agreements
to
repurchase 972,329 3.88% 1,361,475 4.09%
Other
borrowed
funds 72,687 0.73% 37,717 0.72%
Long-
term
debt 169,492 2.18% 171,136 3.01%
------- ---- ------- ----
Total
interest-
bearing
liabilities 7,546,801 1.09% 7,795,343 1.39%
Non-
interest-
bearing
demand
deposits 1,325,781 1,157,343
--------- ---------
Total
deposits
and
other
borrowed
funds $8,872,582 $8,952,686
---------- ----------
Total
average
assets $10,506,842 $10,617,004
Total
average
equity $1,548,179 $1,579,195
---------- ----------
(1) Yields and interest earned
include net loan fees. Non-
accrual loans are included in
the average balance.
(2) The average yield has been
adjusted to a fully taxable-
equivalent basis for certain
securities of states and
political subdivisions and
other securities held using a
statutory Federal income tax
rate of 35%.
SOURCE Cathay General Bancorp
