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 June 30, 2024. The Company reported net income of $66.8 million, or $0.92 per share, for the second quarter of 2024. The second quarter net income included $4.1 million or $0.04 per diluted share from accelerated amortization of solar tax credit investments, which were previously forecasted to be amortized in the second half of 2024 and $1.4 million or $0.01 per diluted share mark-to-market loss from equity securities held by the Company.

FINANCIAL PERFORMANCE

Three months ended (unaudited) June 30, 2024 March 31, 2024 June 30, 2023 Net income $ 66.8 million $ 71.4 million $ 93.2 million Basic earnings per common share

$0.92

$0.98

$1.29

Diluted earnings per common share

$0.92

$0.98

$1.28

Return on average assets

1.15%

1.23%

1.67%

Return on average total stockholders' equity

9.63%

10.40%

14.47%

Efficiency ratio

55.65%

53.22%

45.36%

SECOND QUARTER HIGHLIGHTS

• Net interest margin decreased to 3.01% in the second quarter of 2024 from 3.05% in the first quarter of 2024.
• Diluted earnings per share decreased to $0.92 for the second quarter of 2024 compared to $0.98 for the first quarter of 2024 due mainly from higher provision for loan losses in the second quarter of 2024.
• On May 28, 2024, the Company announced a new stock repurchase program to buy back up to $125.0 million of the Company’s common stock. The previous $125.0 million share repurchase program announced on May 26, 2022, was completed on February 21, 2023, with the repurchase of 2,897,628 shares at an average cost of $43.14.

“We are seeing signs that our net interest margin has begun to stabilize. During the second quarter, we repurchased 0.7 million shares at an average cost of $36.41 per share, for a total of $25.1 million,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW SECOND QUARTER 2024 COMPARED TO THE FIRST QUARTER 2024

Net income for the quarter ended June 30, 2024, was $66.8 million, a decrease of $4.6 million, or 6.4%, compared to net income of $71.4 million for the first quarter of 2024. Diluted earnings per share for the second quarter of 2024 was $0.92 per share compared to $0.98 per share for the first quarter of 2024. The second quarter net income included $4.1 million or $0.04 per diluted share from accelerated amortization of solar tax credit investments, which were previously scheduled to be amortized in the second half of 2024 and $1.4 million or $0.01 per diluted share mark-to-market loss from equity securities held by the Company.

Return on average stockholders’ equity was 9.63% and return on average assets was 1.15% for the quarter ended June 30, 2024, compared to a return on average stockholders’ equity of 10.40% and a return on average assets of 1.23% in the first quarter of 2024.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $3.3 million, or 2.0%, to $165.3 million during the second quarter of 2024, compared to $168.6 million in the first quarter of 2024. The decrease was due primarily to an increase in deposit interest expense offset, in part, by an increase in interest income from loans and securities.

The net interest margin was 3.01% for the second quarter of 2024 compared to 3.05% for the first quarter of 2024.

For the second quarter of 2024, the yield on average interest-earning assets was 6.05%, the cost of funds on average interest-bearing liabilities was 3.97%, and the cost of interest-bearing deposits was 3.94%. In comparison, 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%. 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 2.08% for the second quarter of 2024, compared to 2.14% for the first quarter of 2024.

Provision for credit losses

The Company recorded a provision for credit losses of $6.6 million in the second quarter of 2024 compared with $1.9 million in the first quarter of 2024. As of June 30, 2024, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, decreased $1.4 million to $163.0 million, or 0.84% of gross loans, compared to $164.4 million, or 0.85% of gross loans, as of March 31, 2024.

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

Three months ended

 

Six months ended June 30,

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

 

2024

 

 

2023

(In thousands) (Unaudited) Charge-offs: Commercial loans

$

8,257

$

1,939

$

2,352

$

10,196

$

6,263

Real estate loans (1)

 

—

 

254

 

130

 

254

 

4,120

Installment and other loans

 

—

 

—

 

1

 

—

 

7

Total charge-offs

 

8,257

 

2,193

 

2,483

 

10,450

 

10,390

Recoveries: Commercial loans

 

126

 

812

 

442

 

938

 

953

Real estate loans (1)

 

134

 

241

 

61

 

375

 

2,601

Installment and other loans

 

—

 

—

 

—

 

—

 

—

Total recoveries

 

260

 

1,053

 

503

 

1,313

 

3,554

Net charge-offs/(recoveries)

$

7,997

$

1,140

$

1,980

$

9,137

$

6,836

(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 $13.2 million for the second quarter of 2024, an increase of $6.6 million, or 100.0%, compared to $6.6 million for the first quarter of 2024. The increase was primarily due to a $7.6 million decrease in unrealized losses on equity securities offset, in part, by a $1.4 million decrease in gain from the sale of a previously written-off security, when compared to the first quarter of 2024.

Non-interest expense

Non-interest expense increased $6.1 million, or 6.5%, to $99.3 million in the second quarter of 2024 compared to $93.2 million in the first quarter of 2024. The increase in non-interest expense in the second quarter of 2024 was primarily due to an increase of $9.0 million in amortization expense of investments in low-income housing and alternative energy partnerships, $1.2 million in other real estate owned, and $1.2 million in professional services expenses offset, in part, by a decrease of $2.3 million in FDIC and state assessments and a decrease of $3.0 million in salaries and employee benefits when compared to the first quarter of 2024. 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 55.65% in the second quarter of 2024 compared to 53.22% for the first quarter of 2024.

Income taxes

The effective tax rate for the second quarter of 2024 was 7.92% compared to 10.76% for the first quarter of 2024. 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 $19.36 billion as of June 30, 2024, a decrease of $71.9 million, or 0.4%, from $19.43 billion as of March 31, 2024. The decrease was primarily due to a decrease of $59.6 million, or 1.0%, in residential mortgage loans, a decrease of $41.8 million, or 1.3% in commercial loans, and a decrease of $25.8 million, or 6.7% in construction loans offset, in part, by an increase of $64.2 million, or 0.7%, in commercial real estate loans.

The loan balances and composition as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

June 30, 2024 March 31, 2024 June 30, 2023 (In thousands) (Unaudited) Commercial loans

$

3,090,763

 

$

3,132,580

 

$

3,317,868

 

Construction loans

 

356,978

 

 

382,775

 

 

521,673

 

Commercial real estate loans

 

9,886,030

 

 

9,821,807

 

 

9,293,475

 

Residential mortgage loans

 

5,782,202

 

 

5,841,846

 

 

5,542,466

 

Equity lines

 

235,277

 

 

245,222

 

 

272,055

 

Installment and other loans

 

6,274

 

 

5,166

 

 

5,257

 

Gross loans

$

19,357,524

 

$

19,429,396

 

$

18,952,794

 

  Allowance for loan losses

 

(153,404

)

 

(154,589

)

 

(155,109

)

Unamortized deferred loan fees

 

(10,785

)

 

(11,737

)

 

(9,497

)

Total loans, net

$

19,193,335

 

$

19,263,070

 

$

18,788,188

 

Total deposits were $19.77 billion as of June 30, 2024, a decrease of $73.2 million, or 0.4%, from $19.85 billion as of March 31, 2024.

The deposit balances and composition as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

June 30, 2024 March 31, 2024 June 30, 2023 (In thousands) (Unaudited) Non-interest-bearing demand deposits

$

3,161,632

$

3,289,539

$

3,561,237

NOW deposits

 

2,145,580

 

2,331,486

 

2,404,470

Money market deposits

 

3,182,031

 

3,117,557

 

3,033,868

Savings deposits

 

1,014,287

 

1,039,144

 

1,131,602

Time deposits

 

10,269,487

 

10,068,533

 

8,965,826

Total deposits

$

19,773,017

$

19,846,259

$

19,097,003

ASSET QUALITY REVIEW

As of June 30, 2024, total non-accrual loans were $107.3 million, an increase of $9.2 million, or 9.4%, from $98.1 million as of March 31, 2024.

The allowance for loan losses was $153.4 million and the allowance for off-balance sheet unfunded credit commitments was $9.6 million as of June 30, 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 0.79% of period-end gross loans, and 138.56% of non-performing loans as of June 30, 2024. The comparable ratios were 0.80% of period-end gross loans, and 146.30% of non-performing loans as of March 31, 2024.

The changes in non-performing assets and modifications to borrowers experiencing financial difficulties as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

(Dollars in thousands) (Unaudited) June 30, 2024 March 31, 2024 % Change June 30, 2023 % Change Non-performing assets Accruing loans past due 90 days or more

$

3,443

 

$

7,560

 

(54

)

$

5,968

 

(42

)

  Non-accrual loans: Construction loans

 

22,998

 

 

22,998

 

—

 

 

—

 

—

 

Commercial real estate loans

 

60,085

 

 

47,465

 

27

 

 

39,558

 

52

 

Commercial loans

 

4,075

 

 

14,642

 

(72

)

 

17,574

 

(77

)

Residential mortgage loans

 

20,112

 

 

13,002

 

55

 

 

11,872

 

69

 

Total non-accrual loans

$

107,270

 

$

98,107

 

9

 

$

69,004

 

55

 

Total non-performing loans

 

110,713

 

 

105,667

 

5

 

 

74,972

 

48

 

Other real estate owned

 

18,277

 

 

19,441

 

(6

)

 

4,067

 

349

 

Total non-performing assets

$

128,990

 

$

125,108

 

3

 

$

79,039

 

63

 

Accruing loan modifications to borrowers experiencingfinancial difficulties

$

—

 

$

—

 

—

 

$

—

 

—

 

  Allowance for loan losses

$

153,404

 

$

154,589

 

(1

)

$

155,109

 

(1

)

Total gross loans outstanding, at period-end

$

19,357,524

 

$

19,429,396

 

(0

)

$

18,952,794

 

2

 

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

 

138.56

%

 

146.30

%

 

206.89

%

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

 

0.79

%

 

0.80

%

 

0.82

%

The ratio of non-performing assets to total assets was 0.56% as of June 30, 2024, compared to 0.53% as of March 31, 2024. Total non-performing assets increased $3.9 million, or 3.1%, to $129.0 million as of June 30, 2024, compared to $125.1 million as of March 31, 2024, primarily due to an increase of $9.2 million, or 9.3%, in non-accrual loans, and a decrease of $4.1 million, or 54.5%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of June 30, 2024, the Company’s Tier 1 risk-based capital ratio of 13.26%, total risk-based capital ratio of 14.74%, and Tier 1 leverage capital ratio of 10.83%, 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 March 31, 2024, the Company’s Tier 1 risk-based capital ratio was 13.08%, total risk-based capital ratio was 14.55%, and Tier 1 leverage capital ratio was 10.71%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its second quarter 2024 financial results this afternoon, Monday, July 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 10190674. The presentation accompanying this call and access to the live webcast is available on our site at www.cathaygeneralbancorp.com and a replay of the webcast will be archived for one year within 24 hours after the event.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp is a publicly traded company (Nasdaq: CATY) and is the holding company for Cathay Bank, a California state-chartered bank. Founded in 1962, Cathay Bank offers a wide range of financial services and currently operate over 60 branches across the United States in California, New York, Washington, Texas, Illinois, Massachusetts, Maryland, Nevada, and New Jersey. Overseas, it has a branch outlet in Hong Kong, and a representative office in Beijing, Shanghai, and Taipei. To learn more about Cathay Bank, please visit www.cathaybank.com. Cathay General Bancorp’s website is at www.cathaygeneralbancorp.com. Information set forth on such websites is not incorporated into this press release.

FORWARD-LOOKING STATEMENTS

Statements made in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 regarding management’s beliefs, projections, and assumptions concerning future results and events. These forward-looking statements may include, but are not limited to, such words as “aims,” “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “projects,” “predicts,” “potential,” “possible,” “optimistic,” “seeks,” “shall,” “should,” “will,” and variations of these words and similar expressions. Forward-looking statements are based on estimates, beliefs, projections, and assumptions of management and are not guarantees of future performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from local, regional, national and international business, market and economic conditions and events and the impact they may have on us, our customers and our operations, assets and liabilities; possible additional provisions for loan losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to including potential future supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation; higher capital requirements from the implementation of the Basel III capital standards; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; fluctuations in interest rates; risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; our ability to generate anticipated returns on our investments and financings, including in tax-advantaged projects; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters, public health crises and geopolitical events; general economic or business conditions in Asia, and other regions where Cathay Bank has operations; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to technological changes; risk management processes and strategies; adverse results in legal proceedings; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in accounting standards or tax laws and regulations; market disruption and volatility; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; issuance of preferred stock; successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; and general competitive, economic political, and market conditions and fluctuations.

These and other factors are further described in Cathay General Bancorp’s Annual Report on Form 10-K for the year ended December 31, 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

 

Six months ended June 30,

(Dollars in thousands, except per share data)

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

 

2024

 

 

 

2023

 

  Financial performance Net interest income before provision for credit losses

$

165,316

 

$

168,572

 

$

181,533

 

$

333,888

 

$

373,968

 

Provision for credit losses

 

6,600

 

 

1,900

 

 

9,155

 

 

8,500

 

 

17,255

 

Net interest income after provision for credit losses

 

158,716

 

 

166,672

 

 

172,378

 

 

325,388

 

 

356,713

 

Non-interest income

 

13,215

 

 

6,611

 

 

23,110

 

 

19,826

 

 

37,354

 

Non-interest expense

 

99,352

 

 

93,239

 

 

92,821

 

 

192,591

 

 

176,007

 

Income before income tax expense

 

72,579

 

 

80,044

 

 

102,667

 

 

152,623

 

 

218,060

 

Income tax expense

 

5,750

 

 

8,609

 

 

9,447

 

 

14,359

 

 

28,833

 

Net income

$

66,829

 

$

71,435

 

$

93,220

 

$

138,264

 

$

189,227

 

  Net income per common share Basic

$

0.92

 

$

0.98

 

$

1.29

 

$

1.90

 

$

2.61

 

Diluted

$

0.92

 

$

0.98

 

$

1.28

 

$

1.90

 

$

2.60

 

  Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

 

$

0.68

 

$

0.68

 

    Selected ratios Return on average assets

 

1.15

%

 

1.23

%

 

1.67

%

 

1.19

%

 

1.71

%

Return on average total stockholders’ equity

 

9.63

%

 

10.40

%

 

14.47

%

 

10.01

%

 

14.92

%

Efficiency ratio

 

55.65

%

 

53.22

%

 

45.36

%

 

54.45

%

 

42.79

%

Dividend payout ratio

 

37.06

%

 

34.59

%

 

26.46

%

 

35.78

%

 

26.04

%

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

 

6.05

%

 

6.01

%

 

5.68

%

 

6.03

%

 

5.61

%

Total interest-bearing liabilities

 

3.97

%

 

3.87

%

 

2.99

%

 

3.92

%

 

2.73

%

Net interest spread

 

2.08

%

 

2.14

%

 

2.69

%

 

2.11

%

 

2.88

%

Net interest margin

 

3.01

%

 

3.05

%

 

3.44

%

 

3.03

%

 

3.59

%

    Capital ratios June 30, 2024 March 31, 2024 June 30, 2023 Tier 1 risk-based capital ratio

 

13.26

%

 

13.08

%

 

12.38

%

Total risk-based capital ratio

 

14.74

%

 

14.55

%

 

13.88

%

Tier 1 leverage capital ratio

 

10.83

%

 

10.71

%

 

10.45

%

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data) June 30, 2024 March 31, 2024 June 30, 2023   Assets Cash and due from banks

$

160,389

 

$

165,284

 

$

187,886

 

Short-term investments and interest bearing deposits

 

944,612

 

 

1,010,651

 

 

1,294,379

 

Securities available-for-sale (amortized cost of $1,780,251 at June 30, 2024, $1,783,915 at March 31, 2024 and $1,629,357 at June 30, 2023)

 

1,648,731

 

 

1,653,167

 

 

1,487,321

 

Loans held for sale

 

—

 

 

23,171

 

 

—

 

Loans

 

19,357,524

 

 

19,429,396

 

 

18,952,794

 

Less: Allowance for loan losses

 

(153,404

)

 

(154,589

)

 

(155,109

)

Unamortized deferred loan fees, net

 

(10,785

)

 

(11,737

)

 

(9,497

)

Loans, net

 

19,193,335

 

 

19,263,070

 

 

18,788,188

 

Equity securities

 

29,949

 

 

31,380

 

 

37,674

 

Federal Home Loan Bank stock

 

17,250

 

 

17,250

 

 

25,242

 

Other real estate owned, net

 

18,277

 

 

19,441

 

 

4,067

 

Affordable housing investments and alternative energy partnerships, net

 

309,834

 

 

330,912

 

 

323,984

 

Premises and equipment, net

 

89,451

 

 

90,454

 

 

92,090

 

Customers’ liability on acceptances

 

16,264

 

 

17,074

 

 

4,364

 

Accrued interest receivable

 

99,434

 

 

97,937

 

 

86,211

 

Goodwill

 

375,696

 

 

375,696

 

 

375,696

 

Other intangible assets, net

 

3,860

 

 

4,131

 

 

4,992

 

Right-of-use assets- operating leases

 

32,858

 

 

31,698

 

 

31,399

 

Other assets

 

295,305

 

 

273,487

 

 

284,945

 

Total assets

$

23,235,245

 

$

23,404,803

 

$

23,028,438

 

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

$

3,161,632

 

$

3,289,539

 

$

3,561,237

 

Interest-bearing deposits: NOW deposits

 

2,145,580

 

 

2,331,486

 

 

2,404,470

 

Money market deposits

 

3,182,031

 

 

3,117,557

 

 

3,033,868

 

Savings deposits

 

1,014,287

 

 

1,039,144

 

 

1,131,602

 

Time deposits

 

10,269,487

 

 

10,068,533

 

 

8,965,826

 

Total deposits

 

19,773,017

 

 

19,846,259

 

 

19,097,003

 

  Advances from the Federal Home Loan Bank

 

165,000

 

 

265,000

 

 

815,000

 

Other borrowings for affordable housing investments

 

17,838

 

 

17,557

 

 

22,428

 

Long-term debt

 

119,136

 

 

119,136

 

 

119,136

 

Acceptances outstanding

 

16,264

 

 

17,074

 

 

4,364

 

Lease liabilities - operating leases

 

35,355

 

 

34,325

 

 

33,870

 

Other liabilities

 

315,393

 

 

327,380

 

 

333,966

 

Total liabilities

 

20,442,003

 

 

20,626,731

 

 

20,425,767

 

Stockholders' equity

 

2,793,242

 

 

2,778,072

 

 

2,602,671

 

Total liabilities and equity

$

23,235,245

 

$

23,404,803

 

$

23,028,438

 

  Book value per common share

$

38.70

 

$

38.22

 

$

35.87

 

Number of common shares outstanding

 

72,170,433

 

 

72,688,191

 

 

72,563,169

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended Six months ended June 30,

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

 

2024

 

 

 

2023

 

(In thousands, except share and per share data) Interest and Dividend Income Loans receivable

$

303,336

 

$

302,528

 

$

273,478

$

605,864

 

$

534,657

 

Investment securities

 

15,644

 

 

14,951

 

 

12,370

 

30,595

 

 

24,134

 

Federal Home Loan Bank stock

 

499

 

 

431

 

 

298

 

930

 

 

602

 

Deposits with banks

 

13,381

 

 

14,732

 

 

13,959

 

28,113

 

 

26,098

 

Total interest and dividend income

 

332,860

 

 

332,642

 

 

300,105

 

665,502

 

 

585,491

 

  Interest Expense Time deposits

 

118,076

 

 

109,546

 

 

79,975

 

227,622

 

 

144,149

 

Other deposits

 

44,512

 

 

42,788

 

 

30,659

 

87,300

 

 

54,476

 

Advances from Federal Home Loan Bank

 

2,316

 

 

9,316

 

 

5,498

 

11,632

 

 

8,096

 

Long-term debt

 

1,863

 

 

1,721

 

 

1,552

 

3,584

 

 

2,995

 

Short-term borrowings

 

777

 

 

699

 

 

888

 

1,476

 

 

1,807

 

Total interest expense

 

167,544

 

 

164,070

 

 

118,572

 

331,614

 

 

211,523

 

  Net interest income before provision for credit losses

 

165,316

 

 

168,572

 

 

181,533

 

333,888

 

 

373,968

 

Provision for credit losses

 

6,600

 

 

1,900

 

 

9,155

 

8,500

 

 

17,255

 

Net interest income after provision for credit losses

 

158,716

 

 

166,672

 

 

172,378

 

325,388

 

 

356,713

 

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

 

(1,430

)

 

(9,027

)

 

10,663

 

(10,457

)

 

15,516

 

Debt securities gains/(losses), net

 

—

 

 

1,107

 

 

—

 

1,107

 

 

(3,000

)

Letters of credit commissions

 

1,888

 

 

1,717

 

 

1,664

 

3,605

 

 

3,234

 

Depository service fees

 

1,778

 

 

1,550

 

 

1,641

 

3,328

 

 

3,473

 

Wealth management fees

 

5,678

 

 

5,638

 

 

3,639

 

11,316

 

 

7,536

 

Other operating income

 

5,301

 

 

5,626

 

 

5,503

 

10,927

 

 

10,595

 

Total non-interest income

 

13,215

 

 

6,611

 

 

23,110

 

19,826

 

 

37,354

 

  Non-Interest Expense Salaries and employee benefits

 

40,439

 

 

43,552

 

 

37,048

 

83,991

 

 

75,274

 

Occupancy expense

 

5,652

 

 

5,967

 

 

5,528

 

11,619

 

 

11,032

 

Computer and equipment expense

 

5,391

 

 

5,068

 

 

4,227

 

10,459

 

 

8,512

 

Professional services expense

 

8,212

 

 

6,992

 

 

8,900

 

15,204

 

 

16,306

 

Data processing service expense

 

3,877

 

 

3,929

 

 

3,672

 

7,806

 

 

7,396

 

FDIC and State assessments

 

3,742

 

 

6,089

 

 

3,012

 

9,831

 

 

6,167

 

Marketing expense

 

1,474

 

 

1,914

 

 

2,416

 

3,388

 

 

3,190

 

Other real estate owned expense

 

1,482

 

 

253

 

 

81

 

1,735

 

 

131

 

Amortization of investments in low income housing andalternative energy partnerships

 

23,396

 

 

14,432

 

 

21,746

 

37,828

 

 

37,340

 

Amortization of core deposit intangibles

 

259

 

 

339

 

 

559

 

598

 

 

809

 

Other operating expense

 

5,428

 

 

4,704

 

 

5,632

 

10,132

 

 

9,850

 

Total non-interest expense

 

99,352

 

 

93,239

 

 

92,821

 

192,591

 

 

176,007

 

  Income before income tax expense

 

72,579

 

 

80,044

 

 

102,667

 

152,623

 

 

218,060

 

Income tax expense

 

5,750

 

 

8,609

 

 

9,447

 

14,359

 

 

28,833

 

Net income

$

66,829

 

$

71,435

 

$

93,220

$

138,264

 

$

189,227

 

Net income per common share: Basic

$

0.92

 

$

0.98

 

$

1.29

$

1.90

 

$

2.61

 

Diluted

$

0.92

 

$

0.98

 

$

1.28

$

1.90

 

$

2.60

 

  Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

$

0.68

 

$

0.68

 

Basic average common shares outstanding

 

72,658,810

 

 

72,673,974

 

 

72,536,301

 

72,666,392

 

 

72,534,779

 

Diluted average common shares outstanding

 

72,825,356

 

 

72,971,157

 

 

72,753,746

 

72,898,256

 

 

72,826,301

 

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

Three months ended (In thousands)(Unaudited)

June 30, 2024

March 31, 2024 June 30, 2023 Interest-earning assets: Average Balance AverageYield/Rate (1) Average Balance AverageYield/Rate (1) Average Balance AverageYield/Rate (1) Loans (1)

$

19,439,112

6.28

%

$

19,498,954

6.24

%

$

18,503,889

5.93

%

Taxable investment securities

 

1,667,279

3.77

%

 

1,638,317

3.67

%

 

1,561,443

3.18

%

FHLB stock

 

17,250

11.63

%

 

23,006

7.53

%

 

18,431

6.49

%

Deposits with banks

 

997,808

5.39

%

 

1,093,972

5.42

%

 

1,090,019

5.14

%

Total interest-earning assets

$

22,121,449

6.05

%

$

22,254,249

6.01

%

$

21,173,782

5.68

%

  Interest-bearing liabilities: Interest-bearing demand deposits

$

2,169,045

2.07

%

$

2,312,246

2.19

%

$

2,325,101

1.57

%

Money market deposits

 

3,217,813

3.77

%

 

3,114,298

3.53

%

 

3,047,163

2.55

%

Savings deposits

 

1,037,771

1.23

%

 

1,046,103

1.10

%

 

1,076,260

0.81

%

Time deposits

 

10,185,497

4.66

%

 

9,720,917

4.53

%

 

8,803,900

3.64

%

Total interest-bearing deposits

$

16,610,126

3.94

%

$

16,193,564

3.78

%

$

15,252,424

2.91

%

Other borrowed funds

 

235,234

5.29

%

 

730,779

5.51

%

 

508,081

5.04

%

Long-term debt

 

119,136

6.29

%

 

119,136

5.81

%

 

119,136

5.22

%

Total interest-bearing liabilities

 

16,964,496

3.97

%

 

17,043,479

3.87

%

 

15,879,641

2.99

%

  Non-interest-bearing demand deposits

 

3,247,498

 

3,338,551

 

3,667,533

  Total deposits and other borrowed funds

$

20,211,994

$

20,382,030

$

19,547,174

  Total average assets

$

23,336,454

$

23,451,901

$

22,403,606

Total average equity

$

2,792,557

$

2,761,843

$

2,583,677

(1)

Yields and interest earned include net loan fees. Non-accrual loans are included in the average balance.

Six months ended (In thousands)(Unaudited) June 30, 2024 June 30, 2023 Interest-earning assets: AverageBalance AverageYield/Rate (1) AverageBalance AverageYield/Rate (1) Loans (1)

$

19,469,033

6.26

%

$

18,375,402

5.87

%

Taxable investment securities

 

1,652,798

3.72

%

 

1,555,177

3.13

%

FHLB stock

 

20,128

9.29

%

 

17,856

6.80

%

Deposits with banks

 

1,045,890

5.41

%

 

1,080,158

4.87

%

Total interest-earning assets

$

22,187,849

6.03

%

$

21,028,593

5.61

%

  Interest-bearing liabilities: Interest-bearing demand deposits

$

2,240,645

2.13

%

$

2,339,735

1.35

%

Money market deposits

 

3,166,055

3.66

%

 

3,211,795

2.29

%

Savings deposits

 

1,041,938

1.16

%

 

1,007,753

0.48

%

Time deposits

 

9,953,207

4.60

%

 

8,516,156

3.41

%

Total interest-bearing deposits

$

16,401,845

3.86

%

$

15,075,439

2.66

%

  Other borrowed funds

 

483,007

5.46

%

 

415,317

4.81

%

Long-term debt

 

119,136

6.05

%

 

119,136

5.07

%

Total interest-bearing liabilities

 

17,003,988

3.92

%

 

15,609,892

2.73

%

  Non-interest-bearing demand deposits

 

3,293,024

 

3,812,229

Total deposits and other borrowed funds

$

20,297,012

$

19,422,121

  Total average assets

$

23,394,177

$

22,251,861

Total average equity

$

2,777,200

$

2,557,344

(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 June 30, 2024 March 31, 2024 June 30, 2023 (In thousands) (Unaudited) Stockholders' equity (a)

$

2,793,242

 

$

2,778,072

 

$

2,602,671

 

Less: Goodwill

 

(375,696

)

 

(375,696

)

 

(375,696

)

Other intangible assets (1)

 

(3,860

)

 

(4,131

)

 

(4,992

)

Tangible equity (b)

$

2,413,686

 

$

2,398,245

 

$

2,221,983

 

  Total assets (c)

$

23,235,245

 

$

23,404,803

 

$

23,028,438

 

Less: Goodwill

 

(375,696

)

 

(375,696

)

 

(375,696

)

Other intangible assets (1)

 

(3,860

)

 

(4,131

)

 

(4,992

)

Tangible assets (d)

$

22,855,689

 

$

23,024,976

 

$

22,647,750

 

  Number of common shares outstanding (e)

 

72,170,433

 

 

72,688,191

 

 

72,563,169

 

  Total stockholders' equity to total assets ratio (a)/(c)

 

12.02

%

 

11.87

%

 

11.30

%

Tangible equity to tangible assets ratio (b)/(d)

 

10.56

%

 

10.42

%

 

9.81

%

Tangible book value per share (b)/(e)

$

33.44

 

$

32.99

 

$

30.62

 

  Three months ended Six months ended June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (In thousands) (Unaudited) Net Income

$

66,829

 

$

71,435

 

$

93,220

 

$

138,264

 

$

189,227

 

Add: Amortization of other intangibles (1)

 

270

 

 

330

 

 

570

 

 

600

 

 

762

 

Tax effect of amortization adjustments (2)

 

(80

)

 

(98

)

 

(169

)

 

(178

)

 

(226

)

Tangible net income (f)

$

67,019

 

$

71,667

 

$

93,621

 

$

138,686

 

$

189,763

 

  Return on tangible common equity (3) (f)/(b)

 

11.11

%

 

11.95

%

 

16.85

%

 

11.49

%

 

17.08

%

(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/20240722138417/en/

Heng W. Chen (626) 279-3652