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Cathay General Bancorp Announces Net Income of $32.5 Million, or $0.38 Per Share, For the Third Quarter 2013

LOS ANGELES, Oct. 21, 2013 /PRNewswire/ -- Cathay General Bancorp (the "Company", NASDAQ: CATY), the holding company for Cathay Bank (the "Bank"), today announced results for the third quarter of 2013.

FINANCIAL PERFORMANCE


Third Quarter


2013


2012

Net income

$32.5 million


$30.4 million

Net income available to common stockholders

$30.0 million


$26.2 million

Basic earnings per common share

$0.38


$0.33

Diluted earnings per common share

$0.38


$0.33

Return on average assets

1.22%


1.14%

Return on average total stockholders' equity

8.37%


7.62%

Efficiency ratio

51.01%


49.82%

THIRD QUARTER HIGHLIGHTS

  • 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.
  • Net recoveries of loans were $3.6 million in the third quarter of 2013, compared to net charge-offs of $7.7 million the same quarter a year ago and net recoveries of $939,000 in the second quarter of 2013.

"We are very pleased that our retained earnings and liquidity have enabled us to complete the repayment of the Company's remaining TARP preferred stock.  We continued to generate solid loan growth of $137.6 million, or 7.2% on an annualized basis, during the third quarter, which came from increases in commercial mortgage loans, residential mortgage loans and commercial loans," commented Dunson Cheng, Chairman of the Board, Chief Executive Officer, and President of the Company.

"We expect to open our new West Covina, California branch before the end of the year and our new Bensonhurst, New York branch in the first quarter of 2014.  Our focus on core deposit generation resulted in core deposits increasing at an annualized rate of 18.8% in the third quarter of 2013," said Peter Wu, Executive Vice Chairman and Chief Operating Officer.

"With the core conversion completed on July 15, 2013, we are now implementing other enhancements in our data processing capabilities over the next several quarters to achieve improved customer service and increased product functionality, as well as operational streamlining," concluded Dunson Cheng.

INCOME STATEMENT REVIEW

Net income available to common stockholders for the quarter ended September 30, 2013, was $30.0 million, an increase of $3.8 million, or 14.5%, compared to a net income available to common stockholders of $26.2 million for the same quarter a year ago.  Diluted earnings per share available to common stockholders for the quarter ended September 30, 2013, was $0.38 compared to $0.33 for the same quarter a year ago due primarily to decreases in litigation settlement, the reversal for credit losses, increases in net interest income, increases in wealth management commissions and decreases in other real estate owned ("OREO") expenses offset by increases in salaries and employees benefits and costs associated with debt redemption.

Return on average stockholders' equity was 8.37% and return on average assets was 1.22% for the quarter ended September 30, 2013, compared to a return on average stockholders' equity of 7.62% and a return on average assets of 1.14% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $2.2 million, or 2.7%, to $82.6 million during the third quarter of 2013 compared to $80.4 million during the same quarter a year ago.  The increase was due primarily to the decrease in interest expense from time deposits and 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 3.35% for the third quarter of 2013, compared to 3.30% for the second quarter of 2013, and 3.26% for the third quarter of 2012.  The decrease in the interest expense on time deposits and securities sold under agreements to repurchase offset by decreases in earnings on investment securities and loans contributed to the increase in the net interest margin compared to the third quarter of 2012.

For the third quarter of 2013, the yield on average interest-earning assets was 4.15%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.05%, and the cost of interest bearing deposits was 0.64%.  In comparison, for the third quarter of 2012, the yield on average interest-earning assets was 4.32%, on a fully taxable-equivalent basis, the cost of funds on average interest-bearing liabilities was 1.35%, and the cost of interest bearing deposits was 0.72%. 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 13 basis points to 3.10% for the quarter ended September 30, 2013, from 2.97% for the same quarter a year ago, primarily for the reasons discussed above.

Provision for credit losses

Provision for credit losses was a credit of $3.0 million for the third quarter of 2013 compared to no provision for credit losses in the third quarter of 2012.  The provision for credit losses was based on the review of the adequacy of the allowance for loan losses at September 30, 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 September 30,


Nine months ended September 30,


2013



2012


2013


2012


(In thousands)

Charge-offs:









  Commercial loans

$                  200



$                7,387


$              4,580


$                 14,479

  Construction loans- residential

-



-


-


391

  Construction loans- other

-



39


-


774

  Real estate loans (1)

554



1,441


2,873


12,351

  Real estate- land loans

-



2


1,318


101

  Installment and other loans

-



-


-


25

     Total charge-offs 

754



8,869


8,771


28,121

Recoveries:









  Commercial loans

436



331


2,015


1,230

  Construction loans- residential

1,046



449


1,200


3,712

  Construction loans- other

190



28


1,056


1,913

  Real estate loans (1)

1,225



317


4,229


6,784

  Real estate- land loans

1,447



12


2,101


1,178

  Installment and other loans

-



-


11


3

     Total recoveries

4,344



1,137


10,612


14,820

Net (recoveries)/charge-offs

$                (3,590)



$                   7,732


$              (1,841)


$                 13,301










(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 $16.7 million for the third quarter of 2013, an increase of $1.1 million, or 7.0%, compared to $15.6 million for the third quarter of 2012. The increase in non-interest income in the third quarter of 2013 was primarily due to an increase of $630,000 in commissions from wealth management and an increase of $267,000 in other loan fees.    

Non-interest expense

Non-interest expense increased $2.9 million, or 5.9%, to $50.7 million in the third quarter of 2013 compared to $47.8 million in the same quarter a year ago.  The efficiency ratio was 51.01% in the third quarter of 2013 compared to 49.82% for the same quarter a year ago.

Prepayment penalties increased to $6.9 million in the third quarter of 2013 compared to $3.5 million in the same quarter a year ago.  The Company prepaid securities sold under agreements to repurchase of $150.0 million in the third quarter of 2013 compared to $50.0 million in the same period a year ago.  Salaries and employee benefits increased $4.3 million, or 23.3%, in the third quarter of 2013 compared to the same quarter a year ago primarily due to increases in bonus expenses, the hiring of new employees as well as an increase in the number of temporary employees assisting in the core system conversion.  Offsetting the above increases were a $5.6 million decrease in litigation accrual expenses and a $1.3 million decrease in OREO expenses. 

Income taxes

The effective tax rate for the third quarter of 2013 was 36.9% compared to 36.8% in the third 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 $7.83 billion at September 30, 2013, an increase of $402.9 million, or 5.4%, from $7.43 billion at December 31, 2012, primarily due to an increase of $152.9 million, or 4.1%, in commercial mortgage loans, an increase of $147.6 million, or 12.9%, in residential mortgage loans, and an increase of $110.8 million, or 5.2%, in commercial loans.  The changes in loan balances and composition from December 31, 2012, are presented below:

Type of Loans

September 30, 2013


December 31, 2012


% Change


(Dollars in thousands)



Commercial loans

$                 2,237,902


$               2,127,107


5

Residential mortgage loans

1,293,849


1,146,230


13

Commercial mortgage loans

3,921,348


3,768,452


4

Equity lines

173,798


193,852


(10)

Real estate construction loans

189,867


180,950


5

Installment & other loans

15,249


12,556


21







Gross loans

$                 7,832,013


$               7,429,147


5







Allowance for loan losses

(181,452)


(183,322)


(1)

Unamortized deferred loan fees

(12,933)


(10,238)


26







Total loans, net

$                 7,637,628


$               7,235,587


6

Total deposits were $7.92 billion at September 30, 2013, an increase of $535.3 million, or 7.3%, from $7.38 billion at December 31, 2012, primarily due to a $245.6 million, or 38.1%, increase in time deposits under $100,000, a $116.4 million, or 9.8%, increase in money market deposits, a $116.0 million, or 9.1%, increase in non-interest bearing demand deposits, and a $60.8 million, or 10.2%, increase in NOW deposits,  offset by a $27.9 million, or 0.9%, 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

September 30, 2013


December 31, 2012


% Change


(Dollars in thousands)



Non-interest-bearing demand deposits

$              1,385,430


$            1,269,455


9

NOW deposits

653,903


593,133


10

Money market deposits

1,303,121


1,186,771


10

Savings deposits

498,246


473,805


5

Time deposits under $100,000

889,828


644,191


38

Time deposits of $100,000 or more

3,188,015


3,215,870


(1)

Total deposits

$              7,918,543


$             7,383,225


7

ASSET QUALITY REVIEW

At September 30, 2013, total non-accrual loans were $99.9 million, an increase of $5.0 million, or 5.2%, from $94.9 million at September 30, 2012, and a decrease of $4.0 million, or 3.9%, from $103.9 million at December 31, 2012.       

The allowance for loan losses was $181.4 million and the allowance for off-balance sheet unfunded credit commitments was $2.1 million at September 30, 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 $183.5 million at September 30, 2013, compared to $184.7 million at December 31, 2012, a decrease of $1.2 million, or 0.6%.  The allowance for credit losses represented 2.34% of period-end gross loans and 182.9% of non-performing loans at September 30, 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 September 30, 2013, compared to December 31, 2012, and to September 30, 2012, are highlighted below:

(Dollars in thousands)

September 30, 2013


December 31, 2012


% Change


September 30, 2012


% Change

Non-performing assets










Accruing loans past due 90 days or more

$                             499


$                         630


(21)


$                           -


100

Non-accrual loans:










  Construction- residential loans

3,495


2,984


17


2,342


49

  Construction- non-residential loans

25,500


33,315


(23)


7,080


260

  Land loans

8,334


6,053


38


7,204


16

  Commercial real estate loans, excluding land loans

27,662


29,651


(7)


41,550


(33)

  Commercial loans

24,506


19,958


23


23,035


6

  Residential mortgage loans

10,364


11,941


(13)


13,733


(25)

Total non-accrual loans:

$                        99,861


$                  103,902


(4)


$                    94,944


5

Total non-performing loans

100,360


104,532


(4)


94,944


6

 Other real estate owned

49,777


46,384


7


60,642


(18)

Total non-performing assets

$                      150,137


$                  150,916


(1)


$                  155,586


(4)

Accruing  troubled  debt  restructurings (TDRs)

$                      115,940


$                  144,695


(20)


$                  170,151


(32)











Allowance for loan losses

$                      181,452


$                  183,322


(1)


$                  184,438


(2)

Allowance for off-balance sheet credit commitments

2,074


1,362


52


1,610


29

Allowance for credit losses

$                      183,526


$                  184,684


(1)


$                  186,048


(1)











Total gross loans outstanding, at period-end

$                   7,832,013


$               7,429,147


5


$               7,259,930


8











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

180.80%


175.37%




194.26%



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

2.32%


2.47%




2.54%



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

2.34%


2.49%




2.56%



Troubled debt restructurings on accrual status totaled $115.9 million at September 30, 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 1.4% at September 30, 2013, compared to 1.4% at December 31, 2012.  Total non-performing assets decreased $779,000 , or 0.5%, to $150.1 million at September 30, 2013, compared to $150.9 million at December 31, 2012, primarily due to a $4.0 million, or 3.9%, decrease in non-accrual loans offset by a $3.4 million, or 7.3%, increase in OREO. 

CAPITAL ADEQUACY REVIEW

At September 30, 2013, the Company's Tier 1 risk-based capital ratio of 14.88%, total risk-based capital ratio of 16.65%, and Tier 1 leverage capital ratio of 12.36%, 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%.

YEAR-TO-DATE REVIEW

Net income attributable to common stockholders was $81.6 million, an increase of $4.8 million, or 6.2%, compared to net income attributable to common stockholders of $76.8 million for the same period a year ago due primarily to increases in gains on sale of securities, decreases in OREO 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 $1.03 compared to $0.98 per share for the same period a year ago.  The net interest margin for the nine months ended September 30, 2013, increased 5 basis points to 3.33% compared to 3.28% for the same period a year ago.

Return on average stockholders' equity was 7.78% and return on average assets was 1.16% for the nine months ended September 30, 2013, compared to a return on average stockholders' equity of 7.65% and a return on average assets of 1.12% for the same period of 2012.  The efficiency ratio for the nine months ended September 30, 2013, was 52.09% compared to 52.12% for the same period a year ago.

CONFERENCE CALL

Cathay General Bancorp will host a conference call this afternoon to discuss its third 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 1-866-271-6130 and enter Participant Passcode 36963779. 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 31 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 September 30,




Nine months ended September 30,

(Dollars in thousands, except per share data)


2013


2012


% Change


2013


2012

% Change













FINANCIAL PERFORMANCE












Net interest income before provision for credit losses    


$         82,608


$         80,417


3


$  242,734


$       240,188

1

Provision/(reversal) for credit losses


(3,000)


-


100


(3,000)


(9,000)

(67)

    Net interest income after provision for credit losses


85,608


80,417


6


245,734


249,188

(1)

Non-interest income


16,720


15,622


7


51,962


34,305

51

Non-interest expense


50,670


47,844


6


153,514


143,057

7

Income before income tax expense


51,658


48,195


7


144,182


140,436

3

Income tax expense


19,029


17,686


8


52,489


50,852

3

Net income


32,629


30,509


7


91,693


89,584

2

    Net income attributable to noncontrolling interest


151


151


-


452


452

-

Net income attributable to Cathay General Bancorp


$         32,478


$         30,358


7


$    91,241


$         89,132

2

Dividends on preferred stock and noncash charge from repayment

(2,434)


(4,123)


(41)


(9,685)


(12,361)

(22)

Net income attributable to common stockholders


$         30,044


$         26,235


15


$    81,556


$         76,771

6













Net income attributable to common stockholders per common share:










    Basic


$              0.38


$              0.33


15


$         1.03


$              0.98

5

    Diluted


$              0.38


$              0.33


15


$         1.03


$              0.98

5













 Cash dividends paid per common share  


$              0.01


$              0.01


-


$         0.03


$              0.03

-

























SELECTED RATIOS












Return on average assets


1.22%


1.14%


7


1.16%


1.12%

4

Return on average total stockholders' equity


8.37%


7.62%


10


7.78%


7.65%

2

Efficiency ratio


51.01%


49.82%


2


52.09%


52.12%

(0)

Dividend payout ratio


2.43%


2.59%


(6)


2.59%


2.65%

(2)

























YIELD ANALYSIS (Fully taxable equivalent)












Total interest-earning assets


4.15%


4.32%


(4)


4.19%


4.42%

(5)

Total interest-bearing liabilities


1.05%


1.35%


(22)


1.11%


1.44%

(23)

Net interest spread


3.10%


2.97%


4


3.08%


2.98%

3

Net interest margin


3.35%


3.26%


3


3.33%


3.28%

2





























































CAPITAL RATIOS


September 30, 2013


September 30, 2012


December 31, 2012


Well Capitalized Requirements


Minimum Regulatory Requirements


Tier 1 risk-based capital ratio


14.88%


17.08%


17.36%


6.0%


4.0%


Total risk-based capital ratio


16.65%


18.96%


19.12%


10.0%


8.0%


Tier 1 leverage capital ratio


12.36%


13.57%


13.82%


5.0%


4.0%














 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In thousands, except share and per share data)


September 30, 2013


December 31, 2012


% change








Assets







Cash and due from banks


$                     201,815


$                     144,909


39

Short-term investments and interest bearing deposits


389,024


411,983


(6)

Securities held-to-maturity (market value of $823,906 in 2012)


-


773,768


(100)

Securities available-for-sale (amortized cost of $1,779,859 in 2013 and







    $1,290,676 in 2012)


1,743,309


1,291,480


36

Trading securities


4,855


4,703


3

Loans


7,832,013


7,429,147


5

Less:  Allowance for loan losses


(181,452)


(183,322)


(1)

    Unamortized deferred loan fees, net


(12,933)


(10,238)


26

    Loans, net


7,637,628


7,235,587


6

Federal Home Loan Bank stock


28,683


41,272


(31)

Other real estate owned, net


49,777


46,384


7

Affordable housing investments, net


86,381


85,037


2

Premises and equipment, net


102,379


102,613


(0)

Customers' liability on acceptances


42,533


41,271


3

Accrued interest receivable


23,367


26,015


(10)

Goodwill


316,340


316,340


-

Other intangible assets, net


2,765


6,132


(55)

Other assets


192,590


166,595


8








Total assets


$                10,821,446


$                10,694,089


1








Liabilities and Stockholders' Equity







Deposits







Non-interest-bearing demand deposits


$                  1,385,430


$                  1,269,455


9

Interest-bearing deposits:







    NOW deposits


653,903


593,133


10

    Money market deposits


1,303,121


1,186,771


10

    Savings deposits


498,246


473,805


5

    Time deposits under $100,000


889,828


644,191


38

    Time deposits of $100,000 or more


3,188,015


3,215,870


(1)

    Total deposits


7,918,543


7,383,225


7








Securities sold under agreements to repurchase


800,000


1,250,000


(36)

Advances from the Federal Home Loan Bank


376,200


146,200


157

Other borrowings for affordable housing investments


19,108


18,713


2

Long-term debt


171,136


171,136


-

Acceptances outstanding


42,533


41,271


3

Other liabilities


58,624


54,040


8

Total liabilities


9,386,144


9,064,585


4

      Commitments and contingencies


-


-


-

Stockholders' Equity







Preferred stock, 10,000,000 shares authorized, none issued







    and outstanding at September 30, 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,







    83,113,308 issued and 78,905,743 outstanding at September 30, 2013, and







    82,985,853 issued and 78,778,288 outstanding at December 31, 2012


831


830


0

Additional paid-in-capital


771,759


768,925


0

Accumulated other comprehensive (loss)/income, net


(21,182)


465


(4,655)

Retained earnings


801,183


721,993


11

Treasury stock, at cost (4,207,565 shares at September 30, 2013, 







     and at December 31, 2012)


(125,736)


(125,736)


-








Total Cathay General Bancorp stockholders' equity


1,426,855


1,621,057


(12)

Noncontrolling interest


8,447


8,447


-

Total equity


1,435,302


1,629,504


(12)

Total liabilities and equity


$                10,821,446


$                10,694,089


1








Book value per common share


$18.04


$17.12


5

Number of common shares outstanding


78,905,743


78,778,288


0

                                                               

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three months ended September 30,


Nine months ended September 30,


2013

2012


2013

2012


(In thousands, except share and per share data)

INTEREST AND  DIVIDEND INCOME






Loan receivable, including loan fees

$                90,838

$                 90,024


$       267,557

$     269,486

Investment securities- taxable

10,868

15,157


34,986

50,046

Investment securities- nontaxable

-

1,036


995

3,127

Federal Home Loan Bank stock

449

57


1,041

190

Federal funds sold and securities 






purchased under agreements to resell

-

2


-

18

Deposits with banks

307

471


796

1,596







Total interest and dividend income

102,462

106,747


305,375

324,463







INTEREST EXPENSE






Time deposits of $100,000 or more

6,887

7,970


20,466

26,152

Other deposits

3,485

3,261


9,244

11,045

Securities sold under agreements to repurchase

8,402

13,734


29,778

42,987

Advances from Federal Home Loan Bank

150

74


375

196

Long-term debt

930

1,291


2,778

3,895







Total interest expense

19,854

26,330


62,641

84,275







Net interest income before provision for credit losses

82,608

80,417


242,734

240,188

Provision/(reversal) for credit losses

(3,000)

-


(3,000)

(9,000)







Net interest income after provision for credit losses

85,608

80,417


245,734

249,188







NON-INTEREST INCOME






Securities gains, net

8,688

8,652


27,157

13,241

Letters of credit commissions

1,698

1,728


4,608

4,873

Depository service fees

1,371

1,342


4,330

4,114

Other operating income

4,963

3,900


15,867

12,077







Total non-interest income

16,720

15,622


51,962

34,305







NON-INTEREST EXPENSE






Salaries and employee benefits

22,751

18,451


67,192

58,426

Occupancy expense

3,812

3,853


10,966

10,926

Computer and equipment expense

2,446

2,340


7,488

7,194

Professional services expense

5,813

5,273


18,484

15,224

FDIC and State assessments

1,712

2,094


5,431

6,554

Marketing expense

1,097

519


2,703

3,408

Other real estate owned expense

527

1,794


886

13,548

Operations of affordable housing investments 

1,234

476


4,952

4,387

Amortization of core deposit intangibles

1,363

1,404


4,097

4,265

Cost associated with debt redemption

6,861

3,450


22,557

6,200

Other operating expense

3,054

8,190


8,758

12,925







Total non-interest expense

50,670

47,844


153,514

143,057







Income before income tax expense

51,658

48,195


144,182

140,436

Income tax expense

19,029

17,686


52,489

50,852

Net income

32,629

30,509


91,693

89,584

     Less: net income attributable to noncontrolling interest

151

151


452

452

Net income attributable to Cathay General Bancorp

32,478

30,358


91,241

89,132







Dividends on preferred stock and noncash charge from repayment

(2,434)

(4,123)


(9,685)

(12,361)

Net income attributable to common stockholders

$                30,044

$                 26,235


$         81,556

$       76,771







Net income attributable to common stockholders per common share:






Basic

$                    0.38

$                     0.33


$             1.03

$           0.98

Diluted

$                    0.38

$                     0.33


$             1.03

$           0.98







Cash dividends paid per common share

$                    0.01

$                     0.01


$             0.03

$           0.03

Basic average common shares outstanding

78,894,262

78,729,272


78,853,333

78,706,150

Diluted average common shares outstanding

79,114,122

78,731,180


78,944,152

78,711,235

 


 

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)



Three months ended,


(In thousands)

September 30, 2013


September 30, 2012


June 30, 2013










Interest-earning assets

Average Balance

Average Yield/Rate (1) (2)


Average Balance

Average Yield/Rate (1) (2)


Average Balance

Average Yield/Rate (1) (2)

Loans (1)

$           7,732,167

4.66%


$           7,122,569

5.03%


$         7,441,872

4.74%

Taxable investment securities 

1,869,101

2.31%


2,188,205

2.76%


2,050,533

2.41%

Tax-exempt investment securities  (2)

-

-


131,024

4.84%


11,051

1.56%

FHLB stock

30,938

5.76%


46,702

0.49%


35,186

3.90%

Federal funds sold and securities purchased









under agreements to resell

-

-


6,413

0.12%


-

-

Deposits with banks

160,985

0.76%


394,830

0.47%


191,255

0.59%










Total interest-earning assets

$           9,793,191

4.15%


$           9,889,743

4.32%


$         9,729,897

4.16%










Interest-bearing liabilities









Interest-bearing demand deposits

$              647,037

0.16%


$              535,708

0.15%


$            622,998

0.16%

Money market deposits

1,234,091

0.58%


1,041,986

0.55%


1,137,452

0.56%

Savings deposits

471,849

0.07%


464,091

0.08%


513,781

0.08%

Time deposits

4,069,612

0.80%


4,129,075

0.91%


3,974,923

0.80%

Total interest-bearing deposits

$           6,422,589

0.64%


$           6,170,860

0.72%


$         6,249,154

0.63%

Securities sold under agreements to repurchase

855,435

3.90%


1,358,152

4.02%


1,042,308

3.84%

Other borrowed funds

82,822

0.72%


40,030

0.74%


70,836

0.82%

Long-term debt

171,136

2.16%


171,136

3.00%


171,136

2.17%

Total interest-bearing liabilities

7,531,982

1.05%


7,740,178

1.35%


7,533,434

1.11%










Non-interest-bearing demand deposits

1,353,451



1,209,253



1,278,311











Total deposits and other borrowed funds

$           8,885,433



$           8,949,431



$         8,811,745











Total average assets

$         10,519,491



$         10,637,868



$       10,442,747


Total average equity

$           1,547,606



$           1,592,696



$         1,559,276





















Nine months ended,




(In thousands)

September 30, 2013


September 30, 2012












Interest-earning assets

Average Balance

Average Yield/Rate (1) (2)


Average Balance

Average Yield/Rate (1) (2)




Loans (1)

$           7,524,439

4.75%


$           7,019,974

5.13%




Taxable investment securities 

1,977,788

2.37%


2,287,967

2.92%




Tax-exempt investment securities  (2)

38,874

5.27%


131,732

4.88%




FHLB stock

35,685

3.90%


49,499

0.51%




Federal funds sold and securities purchased









under agreements to resell

-

-


20,018

0.12%




Deposits with banks

182,820

0.58%


354,268

0.60%













Total interest-earning assets

$           9,759,606

4.19%


$           9,863,458

4.42%













Interest-bearing liabilities









Interest-bearing demand deposits

$              623,554

0.16%


$              498,613

0.15%




Money market deposits

1,178,812

0.57%


1,012,603

0.57%




Savings deposits

483,715

0.08%


444,882

0.08%




Time deposits

3,975,160

0.80%


4,278,222

1.00%




Total interest-bearing deposits

$           6,261,241

0.63%


$           6,234,320

0.80%




Securities sold under agreements to repurchase

1,030,403

3.86%


1,385,949

4.14%




Other borrowed funds

67,613

0.74%


36,518

0.72%




Long-term debt

171,136

2.17%


171,136

3.04%




Total interest-bearing liabilities

7,530,393

1.11%


7,827,923

1.44%













Non-interest-bearing demand deposits

1,284,579



1,130,830














Total deposits and other borrowed funds

$           8,814,972



$           8,958,753














Total average assets

$         10,471,330



$         10,608,659





Total average equity

$           1,576,872



$           1,563,793














(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

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