Cathay General Bancorp Announces First Quarter 2023 Results

LOS ANGELES--()--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 first quarter ended March 31, 2023. The Company reported net income of $96.0 million, or $1.32 per share, for the first quarter of 2023.

FINANCIAL PERFORMANCE

Three months ended
(unaudited) March 31, 2023 December 31, 2022 March 31, 2022
Net income

$ 96.0 million

$ 97.6 million

$ 75.0 million

Basic earnings per common share

$1.32

$1.33

$1.00

Diluted earnings per common share

$1.32

$1.33

$0.99

Return on average assets

1.76%

1.77%

1.46%

Return on average total stockholders' equity

15.39%

15.73%

12.44%

Efficiency ratio

40.25%

37.97%

40.52%

FIRST QUARTER HIGHLIGHTS

  • Total deposits increased by $143.6 million, or 3.1% annualized, to $18.6 billion in the first quarter of 2023.
  • The net interest margin decreased to 3.74% in the first quarter of 2023 from 3.87% in the fourth quarter of 2022.
  • Diluted earnings per share decreased to $1.32 for the first quarter of 2023 compared to $1.33 for the fourth quarter of 2022.

“For the first quarter of 2023, our total deposits increased by $143.6 million or 3.1% annualized to $18.6 billion. We are prepared to operate during these challenging times to serve the financial needs of our customers,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW
FIRST QUARTER 2023 COMPARED TO THE FOURTH QUARTER 2022

Net income for the first quarter of 2023 was $96.0 million, a decrease of $1.6 million, or 1.6%, compared to net income of $97.6 million for the fourth quarter of 2022. Net income for the first quarter of 2023 included a $3.0 million write-off, or $0.03 per share of Signature Bank debt securities. Diluted earnings per share for the first quarter of 2023 was $1.32 per share compared to $1.33 per share for the fourth quarter of 2022.

Return on average stockholders’ equity was 15.39% and return on average assets was 1.76% for the quarter ended March 31, 2023, compared to a return on average stockholders’ equity of 15.73% and a return on average assets of 1.77% in the fourth quarter of 2022.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $9.4 million, or 4.7%, to $192.4 million during the first quarter of 2023, compared to $201.8 million in the fourth quarter of 2022. The decrease was due primarily to an increase in deposit interest expense, offset by an increase in income from loans and securities.

The net interest margin was 3.74% for the first quarter of 2023 compared to 3.87% for the fourth quarter of 2022.

For the first quarter of 2023, the yield on average interest-earning assets was 5.54%, the cost of funds on average interest-bearing liabilities was 2.46%, and the cost of interest-bearing deposits was 2.40%. In comparison, for the fourth quarter of 2022, the yield on average interest-earning assets was 5.06%, the cost of funds on average interest-bearing liabilities was 1.66%, and the cost of interest-bearing deposits was 1.59%. The increase in the yield on average interest-earning assets resulted mainly from higher interest rates on loans and securities. 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 3.08% for the first quarter of 2023, compared to 3.40% for the fourth quarter of 2022.

Provision for credit losses

The Company recorded a provision for credit losses of $8.1 million in the first quarter of 2023 compared with $1.4 million in the fourth quarter of 2022. As of March 31, 2023, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, increased $3.3 million to $158.5 million, or 0.87% of gross loans, compared to $155.2 million, or 0.85% of gross loans, as of December 31, 2022.

Three months ended
March 31, 2023 December 31, 2022 March 31, 2022
(In thousands) (Unaudited)
Charge-offs:
Commercial loans

$

3,911

$

860

$

221

 

Real estate loans (1)

 

3,990

 

2,094

 

 

Installment and other loans

 

6

 

37

 

 

Total charge-offs

 

7,907

 

2,991

 

221

 

Recoveries:
Commercial loans

 

511

 

356

 

359

 

Construction loans

 

 

 

6

 

Real estate loans (1)

 

2,540

 

99

 

146

 

Total recoveries

 

3,051

 

455

 

511

 

Net charge-offs/(recoveries)

$

4,856

$

2,536

$

(290

)

 
(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), wealth management fees, and other sources of fee income, was $14.2 million for the first quarter of 2023, an increase of $2.2 million, or 18.2%, compared to $12.1 million for the fourth quarter of 2022. The increase was primarily due to a $5.8 million increase in unrealized gains on equity securities offset, in part, by a $3.0 million write-off of an available for sale security from Signature Bank when compared to the fourth quarter of 2022.

Non-interest expense

Non-interest expense increased $2.0 million, or 2.5%, to $83.2 million in the first quarter of 2023 compared to $81.2 million in the fourth quarter of 2022. The increase in non-interest expense in the first quarter of 2023 was primarily due to an increase of $3.1 million in salaries and employee benefits, and an increase of $1.1 million in FDIC deposit insurance assessment expense offset, in part, by a decrease of $1.4 million in marketing expense when compared to the fourth quarter of 2022. 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 40.3% in the first quarter of 2023 compared to 38.0% for the fourth quarter of 2022.

Income taxes

The effective tax rate for the first quarter of 2023 was 16.8% compared to 25.7% for the fourth quarter of 2022. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $18.32 billion as of March 31, 2023, an increase of $63.3 million, or 0.3%, from $18.25 billion as of December 31, 2022. The increase from December 31, 2022 was primarily due to an increase of $131.3 million, or 2.5%, in residential mortgage loans and an increase of $123.1 million, or 1.4%, in commercial mortgage loans offset, in part, by a decrease of $165.7 million, or 5.0%, in commercial loans, and a decrease of $25.9 million, or 8.0%, in home equity loans.

The loan balances and composition as of March 31, 2023, compared to December 31, 2022, and March 31, 2022, are presented below:

March 31, 2023 December 31, 2022 March 31, 2022
(In thousands) (Unaudited)
Commercial loans

$

3,153,039

 

$

3,318,778

 

$

3,125,151

 

Residential mortgage loans

 

5,384,220

 

 

5,252,952

 

 

4,834,782

 

Commercial mortgage loans

 

8,916,766

 

 

8,793,685

 

 

8,401,742

 

Equity lines

 

298,630

 

 

324,548

 

 

398,851

 

Real estate construction loans

 

558,967

 

 

559,372

 

 

631,740

 

Installment and other loans

 

5,717

 

 

4,689

 

 

6,091

 

Gross loans

$

18,317,339

 

$

18,254,024

 

$

17,398,357

 

 
Allowance for loan losses

 

(144,884

)

 

(146,485

)

 

(145,786

)

Unamortized deferred loan fees

 

(5,872

)

 

(6,641

)

 

(4,679

)

Total loans, net

$

18,166,583

 

$

18,100,898

 

$

17,247,892

 

Total deposits were $18.65 billion as of March 31, 2023, an increase of $143.6 million, or 0.8%, from $18.51 billion as of December 31, 2022.

The deposit balances and composition as of March 31, 2023, compared to December 31, 2022, and March 31, 2022, are presented below:

March 31, 2023 December 31, 2022 March 31, 2022
(In thousands) (Unaudited)
Non-interest-bearing demand deposits

$

3,748,719

$

4,168,989

$

4,398,779

NOW deposits

 

2,354,195

 

2,509,736

 

2,435,725

Money market deposits

 

3,014,500

 

3,812,724

 

5,113,385

Savings deposits

 

891,061

 

1,000,460

 

1,156,727

Time deposits

 

8,640,397

 

7,013,370

 

4,955,645

Total deposits

$

18,648,872

$

18,505,279

$

18,060,261

ASSET QUALITY REVIEW

As of March 31, 2023, total non-accrual loans were $73.6 million, an increase of $4.7 million, or 6.8%, from $68.9 million as of December 31, 2022.

The allowance for loan losses was $144.9 million and the allowance for off-balance sheet unfunded credit commitments was $13.6 million as of March 31, 2023. 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 167.81% of non-performing loans as of March 31, 2023. The comparable ratios were 0.80% of period-end gross loans, and 182.12% of non-performing loans as of December 31, 2022.

The changes in non-performing assets and troubled debt restructurings as of March 31, 2023, compared to December 31, 2022, and March 31, 2022, are presented below:

(Dollars in thousands) (Unaudited)

March 31, 2023 December 31, 2022 % Change March 31, 2022 % Change

Non-performing assets

Accruing loans past due 90 days or more

$

12,756

 

$

11,580

 

10

 

$

300

 

4,152

 

Non-accrual loans:

Construction loans

 

 

 

 

 

 

 

 

Commercial mortgage loans

 

40,218

 

 

34,096

 

18

 

 

38,095

 

6

 

Commercial loans

 

22,079

 

 

25,772

 

(14

)

 

36,282

 

(39

)

Residential mortgage loans

 

11,283

 

 

8,978

 

26

 

 

11,956

 

(6

)

Installment and other loans

 

 

 

8

 

(100

)

 

 

 

Total non-accrual loans

$

73,580

 

$

68,854

 

7

 

$

86,333

 

(15

)

Total non-performing loans

 

86,336

 

 

80,434

 

7

 

 

86,633

 

 

Other real estate owned

 

4,067

 

 

4,067

 

 

 

4,067

 

 

Total non-performing assets

$

90,403

 

$

84,501

 

7

 

$

90,700

 

 

Accruing troubled debt restructurings (TDRs)1

$

 

$

15,145

 

(100

)

$

12,994

 

(100

)

 

Allowance for loan losses

$

144,884

 

$

146,485

 

(1

)

$

145,786

 

(1

)

Total gross loans outstanding, at period-end

$

18,317,339

 

$

18,254,024

 

 

$

17,398,357

 

5

 

 

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

 

167.81

%

 

182.12

%

 

168.28

%

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

 

0.79

%

 

0.80

%

 

0.84

%

 

1 Current period TDR's are reported in accordance with the new guidance under ASU 2022-02.

The ratio of non-performing assets to total assets was 0.4% as of March 31, 2023, compared to 0.4% as of December 31, 2022. Total non-performing assets increased $5.9 million, or 7.0%, to $90.4 million as of March 31, 2023, compared to $84.5 million as of December 31, 2022, primarily due to an increase of $4.7 million, or 6.9%, in nonaccrual loans and an increase of $1.2 million, or 10.2%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of March 31, 2023, the Company’s Tier 1 risk-based capital ratio of 12.42%, total risk-based capital ratio of 13.94%, and Tier 1 leverage capital ratio of 10.27%, 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, 2022, the Company’s Tier 1 risk-based capital ratio was 12.21%, total risk-based capital ratio was 13.73%, and Tier 1 leverage capital ratio was 10.08%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its first quarter 2023 financial results this afternoon, Thursday, April 20, 2023, at 3:00 p.m., Pacific Time. Analysts and investors may dial in and participate in the question-and-answer session. To access the call, please dial 1-833-816-1377 and refer to Conference Code 10177602. 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 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 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, 2022 (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
(Dollars in thousands, except per share data) March 31, 2023 December 31, 2022 March 31, 2022
 
Financial performance
Net interest income before provision for credit losses

$

192,435

 

$

201,814

 

$

159,191

 

Provision for credit losses

 

8,100

 

 

1,400

 

 

8,643

 

Net interest income after provision for credit losses

 

184,335

 

 

200,414

 

 

150,548

 

Non-interest income

 

14,244

 

 

12,088

 

 

20,232

 

Non-interest expense

 

83,186

 

 

81,224

 

 

72,697

 

Income before income tax expense

 

115,393

 

 

131,278

 

 

98,083

 

Income tax expense

 

19,386

 

 

33,677

 

 

23,055

 

Net income

$

96,007

 

$

97,601

 

$

75,028

 

 
Net income per common share
Basic

$

1.32

 

$

1.33

 

$

1.00

 

Diluted

$

1.32

 

$

1.33

 

$

0.99

 

Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

 

 
Selected ratios
Return on average assets

 

1.76

%

 

1.77

%

 

1.46

%

Return on average total stockholders’ equity

 

15.39

%

 

15.73

%

 

12.44

%

Efficiency ratio

 

40.25

%

 

37.97

%

 

40.52

%

Dividend payout ratio

 

25.63

%

 

25.45

%

 

34.01

%

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

 

5.54

%

 

5.06

%

 

3.53

%

Total interest-bearing liabilities

 

2.46

%

 

1.66

%

 

0.38

%

Net interest spread

 

3.08

%

 

3.40

%

 

3.15

%

Net interest margin

 

3.74

%

 

3.87

%

 

3.26

%

 
Capital ratios March 31, 2023 December 31, 2022 March 31, 2022
Tier 1 risk-based capital ratio

 

12.42

%

 

12.21

%

 

12.36

%

Total risk-based capital ratio

 

13.94

%

 

13.73

%

 

13.96

%

Tier 1 leverage capital ratio

 

10.27

%

 

10.08

%

 

10.11

%

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
(In thousands, except share and per share data) March 31, 2023 December 31, 2022 March 31, 2022
 
Assets
Cash and due from banks

$

252,048

 

$

195,440

 

$

138,979

 

Short-term investments and interest bearing deposits

 

881,282

 

 

966,962

 

 

1,119,105

 

Securities available-for-sale (amortized cost of $1,672,440 at March 31, 2023, $1,622,173 at December 31, 2022 and $1,284,863 at March 31, 2022)

 

1,541,250

 

 

1,473,348

 

 

1,219,541

 

Loans

 

18,317,339

 

 

18,254,024

 

 

17,398,357

 

Less: Allowance for loan losses

 

(144,884

)

 

(146,485

)

 

(145,786

)

Unamortized deferred loan fees, net

 

(5,872

)

 

(6,641

)

 

(4,679

)

Loans, net

 

18,166,583

 

 

18,100,898

 

 

17,247,892

 

Equity securities

 

27,011

 

 

22,158

 

 

27,740

 

Federal Home Loan Bank stock

 

17,250

 

 

17,250

 

 

17,250

 

Other real estate owned, net

 

4,067

 

 

4,067

 

 

4,067

 

Affordable housing investments and alternative energy partnerships, net

 

316,475

 

 

327,128

 

 

289,430

 

Premises and equipment, net

 

93,204

 

 

94,776

 

 

98,795

 

Customers’ liability on acceptances

 

6,547

 

 

2,372

 

 

6,753

 

Accrued interest receivable

 

82,420

 

 

82,428

 

 

60,056

 

Goodwill

 

375,696

 

 

375,696

 

 

375,706

 

Other intangible assets, net

 

5,564

 

 

5,757

 

 

7,512

 

Right-of-use assets- operating leases

 

29,906

 

 

29,627

 

 

32,045

 

Other assets

 

232,298

 

 

250,069

 

 

221,699

 

Total assets

$

22,031,601

 

$

21,947,976

 

$

20,866,570

 

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

$

3,748,719

 

$

4,168,989

 

$

4,398,779

 

Interest-bearing deposits:
NOW deposits

 

2,354,195

 

 

2,509,736

 

 

2,435,725

 

Money market deposits

 

3,014,500

 

 

3,812,724

 

 

5,113,385

 

Savings deposits

 

891,061

 

 

1,000,460

 

 

1,156,727

 

Time deposits

 

8,640,397

 

 

7,013,370

 

 

4,955,645

 

Total deposits

 

18,648,872

 

 

18,505,279

 

 

18,060,261

 

 
Advances from the Federal Home Loan Bank

 

360,000

 

 

485,000

 

 

20,000

 

Other borrowings for affordable housing investments

 

22,481

 

 

22,600

 

 

23,108

 

Long-term debt

 

119,136

 

 

119,136

 

 

119,136

 

Acceptances outstanding

 

6,547

 

 

2,372

 

 

6,753

 

Lease liabilities - operating leases

 

32,599

 

 

32,518

 

 

35,403

 

Other liabilities

 

299,627

 

 

307,031

 

 

179,679

 

Total liabilities

 

19,489,262

 

 

19,473,936

 

 

18,444,340

 

Stockholders' equity

 

2,542,339

 

 

2,474,040

 

 

2,422,230

 

Total liabilities and equity

$

22,031,601

 

$

21,947,976

 

$

20,866,570

 

 
Book value per common share

$

35.12

 

$

34.01

 

$

32.26

 

Number of common shares outstanding

 

72,390,694

 

 

72,742,151

 

 

75,078,258

 

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
Three months ended
March 31, 2023 December 31, 2022 March 31, 2022
(In thousands, except share and per share data)
Interest and Dividend Income
Loan receivable, including loan fees

$

261,179

 

$

243,324

 

$

166,094

Investment securities

 

11,764

 

 

10,181

 

 

4,828

Federal Home Loan Bank stock

 

304

 

 

329

 

 

261

Deposits with banks

 

12,139

 

 

9,954

 

 

763

Total interest and dividend income

 

285,386

 

 

263,788

 

 

171,946

 
Interest Expense
Time deposits

 

64,174

 

 

34,352

 

 

6,060

Other deposits

 

23,817

 

 

23,048

 

 

5,128

Advances from Federal Home Loan Bank

 

2,598

 

 

2,484

 

 

143

Long-term debt

 

1,443

 

 

1,228

 

 

1,424

Short-term borrowings

 

919

 

 

862

 

 

Total interest expense

 

92,951

 

 

61,974

 

 

12,755

 
Net interest income before provision for credit losses

 

192,435

 

 

201,814

 

 

159,191

Provision for credit losses

 

8,100

 

 

1,400

 

 

8,643

Net interest income after provision for credit losses

 

184,335

 

 

200,414

 

 

150,548

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

 

4,853

 

 

(966

)

 

5,974

Debt securities losses, net

 

(3,000

)

 

 

 

Letters of credit commissions

 

1,570

 

 

1,584

 

 

1,556

Depository service fees

 

1,832

 

 

1,530

 

 

1,671

Wealth management fees

 

3,897

 

 

3,942

 

 

4,354

Other operating income

 

5,092

 

 

5,998

 

 

6,677

Total non-interest income

 

14,244

 

 

12,088

 

 

20,232

 
Non-Interest Expense
Salaries and employee benefits

 

38,226

 

 

35,093

 

 

35,475

Occupancy expense

 

5,504

 

 

5,658

 

 

5,613

Computer and equipment expense

 

4,285

 

 

3,842

 

 

2,956

Professional services expense

 

7,406

 

 

7,529

 

 

6,697

Data processing service expense

 

3,724

 

 

3,368

 

 

2,909

FDIC and State assessments

 

3,155

 

 

2,038

 

 

1,802

Marketing expense

 

774

 

 

2,171

 

 

947

Other real estate owned expense

 

50

 

 

34

 

 

71

Amortization of investments in low income housing and
alternative energy partnerships

 

15,594

 

 

14,594

 

 

8,287

Amortization of core deposit intangibles

 

250

 

 

1,168

 

 

224

Acquisition, integration and restructuring costs

 

 

 

 

 

3,936

Other operating expense

 

4,218

 

 

5,729

 

 

3,780

Total non-interest expense

 

83,186

 

 

81,224

 

 

72,697

 
Income before income tax expense

 

115,393

 

 

131,278

 

 

98,083

Income tax expense

 

19,386

 

 

33,677

 

 

23,055

Net income

$

96,007

 

$

97,601

 

$

75,028

Net income per common share:
Basic

$

1.32

 

$

1.33

 

$

1.00

Diluted

$

1.32

 

$

1.33

 

$

0.99

Cash dividends paid per common share

$

0.34

 

$

0.34

 

$

0.34

Basic average common shares outstanding

 

72,533,239

 

 

73,130,500

 

 

75,331,976

Diluted average common shares outstanding

 

72,899,662

 

 

73,467,401

 

 

75,719,375

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

 
Three months ended
(In thousands) March 31, 2023 December 31, 2022 March 31, 2022
Interest-earning assets Average
Balance
Average Yield/Rate(1) Average
Balance
Average Yield/Rate(1) Average
Balance
Average Yield/Rate(1)
Loans (1)

$

18,245,488

5.81

%

$

18,117,692

5.33

%

$

16,939,787

3.98

%

Taxable investment securities

 

1,548,841

3.08

%

 

1,493,472

2.70

%

 

1,174,245

1.67

%

FHLB stock

 

17,276

7.14

%

 

17,250

7.57

%

 

17,250

6.14

%

Deposits with banks

 

1,070,188

4.60

%

 

1,052,161

3.75

%

 

1,650,702

0.19

%

Total interest-earning assets

$

20,881,793

5.54

%

$

20,680,575

5.06

%

$

19,781,984

3.53

%

 
Interest-bearing liabilities
Interest-bearing demand deposits

$

2,354,531

1.12

%

$

2,514,877

0.78

%

$

2,400,010

0.08

%

Money market deposits

 

3,378,257

2.05

%

 

4,350,804

1.63

%

 

4,815,578

0.38

%

Savings deposits

 

938,485

0.10

%

 

1,064,019

0.09

%

 

1,076,690

0.07

%

Time deposits

 

8,225,215

3.16

%

 

6,403,334

2.13

%

 

5,289,313

0.46

%

Total interest-bearing deposits

$

14,896,488

2.40

%

$

14,333,034

1.59

%

$

13,581,591

0.33

%

Other borrowed funds

 

321,522

4.44

%

 

358,840

3.70

%

 

43,143

1.34

%

Long-term debt

 

119,136

4.91

%

 

119,136

4.09

%

 

119,136

4.85

%

Total interest-bearing liabilities

 

15,337,146

2.46

%

 

14,811,010

1.66

%

 

13,743,870

0.38

%

Non-interest-bearing demand deposits

 

3,958,533

 

4,337,065

 

4,360,392

Total deposits and other borrowed funds

$

19,295,679

$

19,148,075

$

18,104,262

Total average assets

$

22,098,431

$

21,917,339

$

20,864,531

Total average equity

$

2,530,719

$

2,461,524

$

2,445,412

 
(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
March 31, 2023 December 31, 2022 March 31, 2022
 
Stockholders' equity (a)

$

2,542,339

 

$

2,474,040

 

$

2,422,230

 

Less: Goodwill

 

(375,696

)

 

(375,696

)

 

(375,706

)

Other intangible assets (1)

 

(5,564

)

 

(5,757

)

 

(7,512

)

Tangible equity (b)

$

2,161,079

 

$

2,092,587

 

$

2,039,012

 

 
Total assets (c)

$

22,031,601

 

$

21,947,976

 

$

20,866,570

 

Less: Goodwill

 

(375,696

)

 

(375,696

)

 

(375,706

)

Other intangible assets (1)

 

(5,564

)

 

(5,757

)

 

(7,512

)

Tangible assets (d)

$

21,650,341

 

$

21,566,523

 

$

20,483,352

 

 
Number of common shares outstanding (e)

 

72,390,694

 

 

72,742,151

 

 

75,078,258

 

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

 

11.54

%

 

11.27

%

 

11.61

%

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

 

9.98

%

 

9.70

%

 

9.95

%

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

$

29.85

 

$

28.77

 

$

27.16

 

 
Three months ended
March 31, 2023 December 31, 2022 March 31, 2022
Net Income

$

96,007

 

$

97,601

 

$

75,028

 

Add: Amortization of other intangibles (1)

 

192

 

 

1,191

 

 

250

 

Tax effect of amortization adjustments (2)

 

(57

)

 

(353

)

 

(74

)

Tangible net income (f)

$

96,142

 

$

98,439

 

$

75,204

 

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

 

17.80

%

 

18.82

%

 

14.75

%

 
(1) Includes core deposit intangibles and mortgage servicing
(2) Applied the statutory rate of 29.65%.
(3) Annualized

 

Contacts

Heng W. Chen
(626) 279-3652

Contacts

Heng W. Chen
(626) 279-3652