Cathay General Bancorp Announces Second Quarter 2021 Results

LOS ANGELES, July 26, 2021 /PRNewswire/ — Cathay General Bancorp (the «Company», «we», «us», or «our») (Nasdaq: CATY), the holding…

LOS ANGELES, July 26, 2021 /PRNewswire/ — 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, 2021.  The Company reported net income of $77.2 million, or $0.97 per share, for the second quarter of 2021.

FINANCIAL PERFORMANCE


Three months ended

(unaudited)

June 30, 2021


March 31, 2021


June 30, 2020

Net income

$77.2 million


$73.4 million


$54.3 million

Basic earnings per common share

$0.98


$0.92


$0.68

Diluted earnings per common share

$0.97


$0.92


$0.68

Return on average assets

1.60%


1.57%


1.15%

Return on average total stockholders’ equity

12.53%


12.18%


9.31%

Efficiency ratio

43.41%


47.03%


44.82%







SECOND QUARTER HIGHLIGHTS

  • Total loans, excluding Paycheck Protection Program loans, increased by 3.4% annualized.
  • The net interest margin increased to 3.24% in the second quarter of 2021 from 3.20% in the first quarter of 2021 and 3.02% in second quarter of 2020.
  • Quarterly earnings per share increased 5.75% from first quarter of 2021 and 42.6% from same quarter in 2020.
  • Total deposits, excluding time deposits, increased for the quarter by $462.2 million, or 18.3% annualized.

«For the second quarter of 2021, total loans, excluding Paycheck Protection Program loans, increased by 3.4% annualized.  Under our previously announced April 2021 stock repurchase program, we repurchased 1.5 million shares at an average cost of $41.46 per share, for a total of $63.5 million, during the second quarter,» commented Chang M. Liu, President and Chief Executive Officer of the Company.

SECOND QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended June 30, 2021, was $77.2 million, an increase of $22.9 million, or 42.2%, compared to net income of $54.3 million for the same quarter a year ago.  Diluted earnings per share for the quarter ended June 30, 2021, was $0.97 per share compared to $0.68 per share for the same quarter a year ago.

Return on average stockholders’ equity was 12.53% and return on average assets was 1.60% for the quarter ended June 30, 2021, compared to a return on average stockholders’ equity of 9.31% and a return on average assets of 1.15% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $13.5 million, or 10.0%, to $148.0 million during the second quarter of 2021, compared to $134.5 million during the same quarter a year ago.  The increase was due primarily to a decrease in interest expense from deposits, offset, in part, by a decrease in interest income from loans and securities.

The net interest margin was 3.24% for the second quarter of 2021 compared to 3.02% for the second quarter of 2020 and 3.20% for the first quarter of 2021.

For the second quarter of 2021, the yield on average interest-earning assets was 3.62%, the cost of funds on average interest-bearing liabilities was 0.53%, and the cost of interest-bearing deposits was 0.48%.  In comparison, for the second quarter of 2020, the yield on average interest-earning assets was 3.91%, the cost of funds on average interest-bearing liabilities was 1.20%, and the cost of interest-bearing deposits was 1.16%. The decrease in the yield on average interest-earning assets resulted mainly from lower lending rates.  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 3.09% for the quarter ended June 30, 2021, compared to 2.71% for the same quarter a year ago.

(Reversal)/provision for credit losses

As permitted under the Coronavirus, Aid, Relief and Economic Security Act (the «CARES Act») and as extended by the Consolidated Appropriations Act, 2021, the Company adopted the Current Expected Credit Losses («CECL») methodology for estimated credit losses effective as of January 1, 2021. The Company recorded a reversal for credit losses of $9.0 million in the second quarter of 2021 compared to a reversal for credit losses of $13.6 million in the first quarter of 2021 and a $25.0 million provision for loan losses in the second quarter of 2020. The first and second quarter reversal for credit losses were primarily driven by the more favorable macroeconomic forecast in the two periods. As of June 30, 2021, the allowance for loan losses decreased $12.6 million to $131.3 million, or 0.84% of gross loans, compared to $145.1 million, or 0.93% of gross loans, as of March 31, 2021. The change in the allowance for loan losses included a $6.6 million reversal for loan losses for the second quarter of 2021, and $7.3 million in net charge-offs. In the second quarter of 2020, a provision for loan losses of $25.0 million was recorded under the incurred loss method, which includes management’s projection of the potential impacts from the COVID-19 pandemic at that time. The Company will continue to monitor the continuing impact of the COVID-19 pandemic on credit risks and losses, as well as on customer deposits and other liabilities and assets. 

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












Three months ended


Six months ended June 30,


June 30, 2021


March 31, 2021


June 30, 2020


2021


2020


(In thousands) (Unaudited)

Charge-offs:










  Commercial loans

$                        7,712


$                       9,138


$                         5,106


$            16,850


$            6,427

     Total charge-offs

7,712


9,138


5,106


16,850


6,427

Recoveries:










  Commercial loans

155


1,269


1,350


1,424


2,558

  Real estate loans (1)

303


111


163


413


325

     Total recoveries

458


1,380


1,513


1,837


2,883

Net charge-offs

$                        7,254


$                       7,758


$                         3,593


$            15,013


$            3,544











(1) Real estate loans include commercial mortgage loans, residential mortgage loans, and equity lines.





 

Allowance for credit losses

The Company adopted CECL as of January 1, 2021 under a modified retrospective approach.  The following table presents a rollforward of the allowance for credit losses:



Allowance for Credit Losses Rollforward

Allowance for

Loan Losses


Reserve for

Unfunded Loan

Commitments


Total

Allowance for

Credit Losses


(In thousands) (Unaudited)

Balance at December 31, 2020

$       166,538


$                5,880


$        172,418

Impact of ASU 2016-13 adoption *

(1,560)


6,018


4,458

Balance, at January 1, 2021 *

164,978


11,898


176,876

Reversal of provision for credit losses

(12,110)


(1,448)


(13,558)

Charge-offs

(9,138)



(9,138)

Recoveries

1,380



1,380

Net charge-offs

(7,758)



(7,758)

Balance, at March 31, 2021 *

$       145,110


$              10,450


$        155,560

Reversal of provision for credit losses

(6,600)


(2,400)


(9,000)

Charge-offs

(7,712)



(7,712)

Recoveries

458



458

Net charge-offs

(7,254)



(7,254)

Balance, at June 30, 2021

$       131,256


$                8,050


$        139,306







* Balance sheet amounts previously reported for the impact of the initial adoption of CECL have been corrected.

  The correction decreased the allowance for loan losses by $2.2 million and increased the allowance for unfunded

  credit commitments by $5.5 million and an after-tax decrease to opening retained earnings of $2.3 million.

 

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 $12.6 million for the second quarter of 2021, a decrease of $3.0 million, or 19.2%, compared to $15.6 million for the second quarter of 2020.  The decrease was primarily due to a $6.7 million decrease in net gains from equity securities offset, in part by, a $1.7 million increase in wealth management fees and commissions, a $1.3 million increase in bank owned life insurance benefit, and a $0.9 million increase in interest rate swap fair value, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense increased $2.4 million, or 3.6%, to $69.7 million in the second quarter of 2021 compared to $67.3 million in the same quarter a year ago.  The increase in non-interest expense in the second quarter of 2021 was primarily due to an increase of $4.6 million in salaries and other employee benefits, and an increase of $1.1 million in computer and equipment expenses, offset, in part, by a decrease of $2.2 million in amortization expense of investments in low-income housing and alternative energy partnerships and a decrease of $1.0 million in FDIC and state assessments, when compared to the same quarter a year ago.  The efficiency ratio was 43.4% in the second quarter of 2021 compared to 44.8% for the same quarter a year ago.

Income taxes

The effective tax rate for the second quarter of 2021 was 22.7% compared to 6.0% for the second quarter of 2020. In the second quarter of 2020, the Company made a new alternative energy investment which resulted in a year-to-date catchup adjustment in the second quarter to reflect the lower full year effective tax rate for 2020 resulting from tax credits generated from the new alternative energy investment. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $15.7 billion as of June 30, 2021, an increase of $46.3 million, or 3.0%, from $15.6 billion as of December 31, 2020.  The increase was primarily due to an increase of $60.1 million in commercial mortgage loans and an increase of $32.6 million in commercial loans, not including Paycheck Protection Program («PPP») loans, offset, in part, by a decrease of $41.7 million, or 1.0%, in residential mortgage loans and $15.0 million, or 2.2%, in real estate construction loans.  During the second quarter of 2021, Cathay Bank funded 355 new PPP loans totaling $24.9 million. Loan fees recognized on PPP loans were $2.7 million in the second quarter and $1.7 million in the first quarter of 2021 compared to $1.7 million in the fourth quarter of 2020.  As of June 30, 2021, the remaining deferred loan fees on PPP loans was $8.8 million.

The loan balances and composition as of June 30, 2021, compared to December 31, 2020 and June 30, 2020, are presented below:








June 30, 2021


December 31, 2020


June 30, 2020


(In thousands) (Unaudited)

Commercial loans

$                2,628,534


$                2,595,926


$                  2,746,316

Paycheck protection program loans

238,904


240,907


261,650

Residential mortgage loans

4,103,736


4,145,389


4,184,721

Commercial mortgage loans

7,615,087


7,555,027


7,391,502

Equity lines

436,801


424,555


399,207

Real estate construction loans

664,495


679,492


624,199

Installment and other loans

3,132


3,100


688

Gross loans

$              15,690,689


$              15,644,396


$                15,608,283







Allowance for loan losses

(131,256)


(166,538)


(169,680)

Unamortized deferred loan fees

(6,865)


(2,494)


(4,507)

 

Total loans, net

 

$              15,552,568


$              15,475,364


$                15,434,096

Total deposits were $16.5 billion as of June 30, 2021, an increase of $428.1 million, or 2.7%, from $16.1 billion as of December 31, 2020.  We believe the increases in noninterest-bearing demand deposits, money market deposits and savings deposits resulted from higher liquidity maintained by our depositors during these uncertain times and improved money market deposit generation. We believe the decreases in time deposits resulted primarily from the runoff of wholesale time deposits and migration of some maturing time deposits to money market deposits.  During the second quarter of 2021, our deposits excluding CD’s increased by $462.2 million, or 18.3% annualized. The deposit balances and composition as of June 30, 2021, compared to December 31, 2020 and June 30, 2020, are presented below:

 


June 30, 2021


December 31, 2020


June 30, 2020


(In thousands) (Unaudited)

Non-interest-bearing demand deposits

$                3,664,931


$                3,365,086


$                3,298,415

NOW deposits

2,026,154


1,926,135


1,671,290

Money market deposits

4,003,043


3,359,191


2,982,385

Savings deposits

900,106


785,672


743,982

Time deposits

5,943,278


6,673,317


7,585,832

Total deposits

$              16,537,512


$              16,109,401


$              16,281,904

ASSET QUALITY REVIEW

As of June 30, 2021, total non-accrual loans were $67.8 million, an increase of $0.1 million, or 0.1%, from $67.7 million as of December 31, 2020, and an increase of $11.3 million, or 20.0%, from $56.5 million as of June 30, 2020. 

The allowance for loan losses was $131.3 million and the allowance for off-balance sheet unfunded credit commitments was $8.1 million as of June 30, 2021.  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 0.84% of period-end gross loans, and 189.42% of non-performing loans as of June 30, 2021.  The comparable ratios were 1.06% of period-end gross loans, and 229.18% of non-performing loans as of December 31, 2020. 

The changes in non-performing assets and troubled debt restructurings as of June 30, 2021, compared to December 31, 2020 and June 30, 2020, are presented below:

(Dollars in thousands) (Unaudited)

June 30, 2021


December 31, 2020


%

Change


June 30, 2020


%

Change

Non-performing assets










Accruing loans past due 90 days or more

$                       1,513


$                      4,982


(70)


$                     21,374


(93)

Non-accrual loans:










  Construction loans

4,116


4,286


(4)


4,433


(7)

  Commercial mortgage loans

36,884


33,715


9


10,896


239

  Commercial loans

16,333


23,087


(29)


27,125


(40)

  Residential mortgage loans

10,449


6,596


58


14,004


(25)

Total non-accrual loans:

$                     67,782


$                    67,684


0


$                     56,458


20

Total non-performing loans

69,295


72,666


(5)


77,832


(11)

 Other real estate owned

4,871


4,918


(1)


7,318


(33)

Total non-performing assets

$                     74,166


$                    77,584


(4)


$                     85,150


(13)

Accruing troubled debt restructurings (TDRs)

$                     27,261


$                    27,721


(2)


$                     31,671


(14)











Allowance for loan losses

$                   131,256


$                  166,538


(21)


$                   169,680


(23)

Total gross loans outstanding, at period-end

$              15,690,689


$             15,644,396


0


$              15,608,283


1











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

189.42%


229.18%




218.01%



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

0.84%


1.06%




1.09%













The ratio of non-performing assets to total assets was 0.4% as of June 30, 2021, compared to 0.4% as of December 31, 2020.  Total non-performing assets decreased $3.4 million, or 4.4%, to $74.2 million as of June 30, 2021, compared to $77.6 million as of December 31, 2020, primarily due to a decrease of $3.5 million, or 70.0%, in accruing loans past due 90 days or more. 

CAPITAL ADEQUACY REVIEW

As of June 30, 2021, the Company’s Tier 1 risk-based capital ratio of 13.77%, total risk-based capital ratio of 15.47%, and Tier 1 leverage capital ratio of 10.85%, 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, 2020, the Company’s Tier 1 risk-based capital ratio was 13.53%, total risk-based capital ratio was 15.47%, and Tier 1 leverage capital ratio was 10.94%. During the second quarter of 2021, the Company repurchased 1.5 million shares at an average cost of $41.46 per share for a total of $63.4 million under its April 2021 stock repurchase program of up to $75 million.

YEAR-TO-DATE REVIEW

Net income for the six months ended June 30, 2021, was $150.6 million, an increase of $49.4 million, or 48.8%, compared to net income of $101.2 million for the same period a year ago.  Diluted earnings per share was $1.89 compared to $1.27 per share for the same period a year ago.  The net interest margin for the six months ended June 30, 2021, was 3.22% compared to 3.17% for the same period a year ago.

Return on average stockholders’ equity was 12.36% and return on average assets was 1.58% for the six months ended June 30, 2021, compared to a return on average stockholders’ equity of 8.72% and a return on average assets of 1.10% for the same period a year ago.  The efficiency ratio for the six months ended June 30, 2021, was 45.17% compared to 44.71% for the same period a year ago. 

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its second quarter 2021 financial results this afternoon, Monday, July 26, 2021, 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 1-855-761-3186 and enter Conference ID 1378058. A presentation to accompany the earnings call will be available at www.cathaygeneralbancorp.com.  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 37 branches in California, 10 branches in New York State, four in Washington State, two in Illinois, two in Texas, one in Maryland, Massachusetts, Nevada, and New Jersey, one in Hong Kong, and a representative office in Taipei, Beijing, and Shanghai. Cathay Bank’s website is at 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 (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, 2020 (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, 2021


March 31, 2021


June 30, 2020


2021


2020












FINANCIAL PERFORMANCE











Net interest income before (reversal)/provision for credit losses   

$         148,001


$                   141,818


$         134,475


$       289,819


$          274,786

(Reversal)/provision for credit losses


(9,000)


(13,558)


25,000


(22,558)


50,000

Net interest income after (reversal)/provision for credit losses


157,001


155,376


109,475


312,377


224,786

Non-interest income


12,583


10,000


15,606


22,583


21,392

Non-interest expense


69,707


71,403


67,268


141,110


132,422

Income before income tax expense


99,877


93,973


57,813


193,850


113,756

Income tax expense


22,678


20,589


3,492


43,267


12,583

Net income


$          77,199


$                    73,384


$           54,321


$       150,583


$          101,173












Net income per common share











Basic


$              0.98


$                        0.92


$              0.68


$             1.90


$                1.27

Diluted


$              0.97


$                        0.92


$              0.68


$             1.89


$                1.27












 Cash dividends paid per common share 


$              0.31


$                        0.31


$              0.31


$             0.62


$                0.62























SELECTED RATIOS











Return on average assets


1.60%


1.57%


1.15%


1.58%


1.10%

Return on average total stockholders’ equity


12.53%


12.18%


9.31%


12.36%


8.72%

Efficiency ratio


43.41%


47.03%


44.82%


45.17%


44.71%

Dividend payout ratio


31.80%


33.59%


45.42%


32.67%


48.76%























YIELD ANALYSIS (Fully taxable equivalent)











Total interest-earning assets


3.62%


3.68%


3.91%


3.65%


4.17%

Total interest-bearing liabilities


0.53%


0.67%


1.20%


0.60%


1.34%

Net interest spread


3.09%


3.01%


2.71%


3.05%


2.83%

Net interest margin


3.24%


3.20%


3.02%


3.22%


3.17%























CAPITAL RATIOS


June 30, 2021


December 31, 2020


June 30, 2020





Tier 1 risk-based capital ratio


13.77%


13.53%


12.88%





Total risk-based capital ratio


15.47%


15.47%


14.81%





Tier 1 leverage capital ratio


10.85%


10.94%


10.46%

















































 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In thousands, except share and per share data)


June 30, 2021


December 31, 2020


June 30, 2020








Assets







Cash and due from banks


$          133,507


$                    138,616


$        148,700

Short-term investments and interest bearing deposits


1,589,086


1,282,462


1,425,001

Securities available-for-sale (amortized cost of $991,715 at June 30, 2021,







    $1,019,230 at December 31, 2020 and $1,122,994 at June 30, 2020)


1,002,515


1,036,550


1,146,102

Loans


15,690,689


15,644,396


15,608,283

Less:  Allowance for loan losses


(131,256)


(166,538)


(169,680)

 Unamortized deferred loan fees, net


(6,865)


(2,494)


(4,507)

 Loans, net


15,552,568


15,475,364


15,434,096

Equity securities


20,113


23,744


24,570

Federal Home Loan Bank stock


17,250


17,250


17,250

Other real estate owned, net


4,871


4,918


7,318

Affordable housing investments and alternative energy partnerships, net


286,833


309,016


320,047

Premises and equipment, net


100,917


102,998


104,165

Customers’ liability on acceptances


7,560


13,753


10,665

Accrued interest receivable


56,092


59,032


54,326

Goodwill


372,189


372,189


372,189

Other intangible assets, net


5,041


5,434


6,030

Right-of-use assets- operating leases


31,310


30,919


34,217

Other assets


168,510


170,889


162,361

Total assets


$     19,348,362


$               19,043,134


$     19,267,037








Liabilities and Stockholders’ Equity







Deposits







Non-interest-bearing demand deposits


$       3,664,931


$                 3,365,086


$       3,298,415

Interest-bearing deposits:







NOW deposits


2,026,154


1,926,135


1,671,290

Money market deposits


4,003,043


3,359,191


2,982,385

Savings deposits


900,106


785,672


743,982

Time deposits


5,943,278


6,673,317


7,585,832

Total deposits


16,537,512


16,109,401


16,281,904








Advances from the Federal Home Loan Bank


20,000


150,000


230,000

Other borrowings for affordable housing investments


23,249


23,714


32,399

Long-term debt


119,136


119,136


119,136

Deferred payments from acquisition




7,753

Acceptances outstanding


7,560


13,753


10,665

Lease liabilities – operating leases


34,194


33,484


36,408

Other liabilities


154,354


175,502


206,324

Total liabilities


16,896,005


16,624,990


16,924,589

Stockholders’ equity


2,452,357


2,418,144


2,342,448

Total liabilities and equity


$     19,348,362


$               19,043,134


$     19,267,037








Book value per common share


$             31.38


$                       30.41


$             29.42

Number of common shares outstanding


78,158,590


79,508,265


79,619,984








 

 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 




Three months ended


Six months ended June 30,



June 30, 2021

March 31, 2021

June 30, 2020


2021

2020



(In thousands, except share and per share data)




INTEREST AND  DIVIDEND INCOME








Loan receivable, including loan fees


$         161,493

$                  159,721

$         168,149


$    321,214

$          346,019

Investment securities


3,189

3,067

5,405


6,256

13,015

Federal Home Loan Bank stock


255

217

214


472

519

Deposits with banks


438

315

240


753

1,191

Total interest and dividend income


165,375

163,320

174,008


328,695

360,744









INTEREST EXPENSE








Time deposits


10,055

14,009

30,811


24,064

65,966

Other deposits


5,465

5,594

5,919


11,059

13,910

Advances from Federal Home Loan Bank


415

475

1,316


890

2,868

Long-term debt


1,439

1,424

1,440


2,863

2,880

Deferred payments from acquisition


42


100

Short-term borrowings


5


234

Total interest expense


17,374

21,502

39,533


38,876

85,958









Net interest income before (reversal)/provision for credit losses


148,001

141,818

134,475


289,819

274,786

(Reversal)/provision for credit losses


(9,000)

(13,558)

25,000


(22,558)

50,000

Net interest income after (reversal)/provision for credit losses


157,001

155,376

109,475


312,377

224,786









NON-INTEREST INCOME








Net (losses)/gains from equity securities


(879)

(2,752)

5,779


(3,631)

(323)

Securities gains, net


853

1,147


853

1,153

Letters of credit commissions


1,782

1,690

1,560


3,472

3,200

Depository service fees


1,343

1,363

1,117


2,706

2,415

Other operating income


10,337

8,846

6,003


19,183

14,947

Total non-interest income


12,583

10,000

15,606


22,583

21,392









NON-INTEREST EXPENSE








Salaries and employee benefits


32,758

32,722

28,197


65,480

59,136

Occupancy expense


4,960

5,046

4,963


10,006

10,140

Computer and equipment expense


3,647

3,271

2,581


6,918

5,174

Professional services expense


5,756

4,710

5,200


10,466

10,345

Data processing service expense


3,243

3,655

3,566


6,898

7,232

FDIC and State assessments


1,440

1,925

2,446


3,365

4,861

Marketing expense


1,443

2,882

915


4,325

2,801

Other real estate owned expense/(income)


191

94

452


285

(3,652)

Amortization of investments in low income housing and

  alternative energy partnerships


10,682

11,570

12,934


22,252

26,824

Amortization of core deposit intangibles


171

172

171


343

343

Cost associated with debt redemption


732


732

Other operating expense


5,416

4,624

5,843


10,040

9,218

Total non-interest expense


69,707

71,403

67,268


141,110

132,422









Income before income tax expense


99,877

93,973

57,813


193,850

113,756

Income tax expense


22,678

20,589

3,492


43,267

12,583

Net income


$          77,199

$                    73,384

$          54,321


$    150,583

$          101,173

Net income per common share:








Basic


$              0.98

$                        0.92

$              0.68


$          1.90

$               1.27

Diluted


$              0.97

$                        0.92

$              0.68


$          1.89

$               1.27









Cash dividends paid per common share


$              0.31

$                        0.31

$              0.31


$          0.62

$               0.62

Basic average common shares outstanding


79,167,004

79,530,777

79,581,097


79,347,886

79,584,587

Diluted average common shares outstanding


79,418,668

79,832,305

79,682,426


79,624,344

79,756,226









 

 

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

 



Three months ended


(In thousands)

June 30, 2021


March 31, 2021


June 30, 2020

Interest-earning assets

Average

Balance

Average

 Yield/Rate (1)


Average

Balance

Average

Yield/Rate (1)


Average

Balance

Average

Yield/Rate (1)

Loans (1)

$    15,684,329

4.13%


$ 15,691,976

4.13%


$   15,626,412

4.33%

Taxable investment securities

976,593

1.31%


995,704

1.25%


1,268,661

1.71%

FHLB stock

17,250

5.93%


17,250

5.10%


17,434

4.95%

Deposits with banks

1,633,686

0.11%


1,283,375

0.10%


980,949

0.10%

Total interest-earning assets

$    18,311,858

3.62%


$ 17,988,305

3.68%


$   17,893,456

3.91%










Interest-bearing liabilities









Interest-bearing demand deposits

$      1,967,069

0.13%


$   1,890,390

0.14%


$     1,586,112

0.19%

Money market deposits

3,951,549

0.47%


3,552,217

0.54%


2,756,493

0.72%

Savings deposits

896,747

0.09%


845,543

0.10%


740,500

0.14%

Time deposits

6,035,219

0.67%


6,404,755

0.89%


7,616,446

1.63%

Total interest-bearing deposits

$    12,850,584

0.48%


$ 12,692,905

0.63%


$   12,699,551

1.16%

Other borrowed funds

93,442

1.79%


123,424

1.56%


412,953

1.33%

Long-term debt

119,136

4.84%


119,136

4.85%


119,136

4.86%

Total interest-bearing liabilities

13,063,162

0.53%


12,935,465

0.67%


13,231,640

1.20%










Non-interest-bearing demand deposits

3,597,475



3,406,460



3,101,265











Total deposits and other borrowed funds

$    16,660,637



$ 16,341,925



$   16,332,905











Total average assets

$    19,347,886



$ 19,011,161



$   18,930,651


Total average equity

$      2,471,388



$   2,443,040



$     2,346,775












Six months ended




(In thousands)

June 30, 2021


June 30, 2020




Interest-earning assets

Average

Balance

Average

Yield/Rate (1)


Average

Balance

Average

Yield/Rate (1)




Loans (1)

$    15,688,131

4.13%


$ 15,419,926

4.51%




Taxable investment securities

986,096

1.28%


1,324,013

1.98%




FHLB stock

17,250

5.52%


17,352

6.02%




Deposits with banks

1,459,498

0.10%


645,986

0.37%




Total interest-earning assets

$    18,150,975

3.65%


$ 17,407,277

4.17%













Interest-bearing liabilities









Interest-bearing demand deposits

$      1,928,941

0.14%


$   1,487,354

0.20%




Money market deposits

3,752,986

0.50%


2,597,245

0.92%




Savings deposits

871,286

0.10%


736,936

0.16%




Time deposits

6,218,967

0.78%


7,556,033

1.76%




Total interest-bearing deposits

$    12,772,180

0.55%


$ 12,377,568

1.30%




Other borrowed funds

108,350

1.66%


402,491

1.60%




Long-term debt

119,136

4.85%


119,136

4.86%




Total interest-bearing liabilities

12,999,666

0.60%


12,899,195

1.34%













Non-interest-bearing demand deposits

3,502,495



2,982,577





Total deposits and other borrowed funds

$    16,502,161



$ 15,881,772














Total average assets

$    19,181,963



$ 18,466,846





Total average equity

$      2,456,167



$   2,333,529














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















 

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SOURCE Cathay General Bancorp