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Cathay General Bancorp Announces Third Quarter 2016 Results

Mittwoch, 19.10.2016 22:35 von

PR Newswire

LOS ANGELES, Oct. 19, 2016 /PRNewswire/ -- Cathay General Bancorp (the "Company", NASDAQ: CATY), the holding company for Cathay Bank, today announced net income of $46.1 million, or $0.58 per share, for the third quarter of 2016.

Cathay General Bancorp

FINANCIAL PERFORMANCE


Three months ended


September 30, 2016


June 30, 2016


September 30, 2015

Net income

$46.1 million


$34.8 million


$38.5 million

Basic earnings per common share

$0.58


$0.44


$0.47

Diluted earnings per common share

$0.58


$0.44


$0.47

Return on average assets

1.38%


1.07%


1.23%

Return on average total stockholders' equity

10.30%


8.00%


8.80%

Efficiency ratio

45.05%


62.15%


53.81%

 

THIRD QUARTER HIGHLIGHTS

  • Diluted earnings per share increased 23.4% to $0.58 per share for the third quarter of 2016 compared to $0.47 per share for the same quarter a year ago.
  • Total loans increased $487.4 million for the quarter, or 18.5% annualized, to $11.0 billion compared to $10.5 billion at June 30, 2016.  

"Our loan growth for the third quarter was the strongest in many years, with the largest increases being $212.8 million, or 15.4% annualized, in commercial mortgage loans, and $182.5 million, or 34.0% annualized, in residential mortgage loans, which included purchases of mortgage pools of $110.9 million.  On a year to date basis, loan growth was $847 million or over 11% annualized.  Our deposits also increased $429.6 million, or 5.5% annualized, to $10.9 billion," commented Dunson Cheng, Executive Chairman of the Board of the Company.

"Our transaction to acquire Far East National Bank continues to progress and we still expect it to be completed during the first half of 2017," concluded Dunson Cheng.

THIRD QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended September 30, 2016, was $46.1 million, an increase of $7.6 million, or 19.8%, compared to net income of $38.5 million for the same quarter a year ago.  Diluted earnings per share for the quarter ended September 30, 2016, was $0.58 compared to $0.47 for the same quarter a year ago.

Return on average stockholders' equity was 10.30% and return on average assets was 1.38% for the quarter ended September 30, 2016, compared to a return on average stockholders' equity of 8.80% and a return on average assets of 1.23% for the same quarter a year ago.  The increase is primarily due to the $11.7 million decrease in amortization of investments in alternative energy partnerships. 

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $6.2 million, or 6.3%, to $103.8 million during the third quarter of 2016 compared to $97.6 million during the same quarter a year ago.  The increase was due primarily to an increase in interest income from loans, partially offset by an increase in interest expense from time and other deposits.

The net interest margin was 3.36% for the third quarter of 2016 and 3.37% for the third quarter of 2015.  The decrease in the net interest margin for the third quarter of 2016 from 3.38% in the second quarter of 2016, was primarily due to lower interest recoveries and prepayment penalties during the third quarter of 2016.

For the third quarter of 2016, the yield on average interest-earning assets was 4.02%, the cost of funds on average interest-bearing liabilities was 0.89%, and the cost of interest-bearing deposits was 0.70%.  In comparison, for the third quarter of 2015, the yield on average interest-earning assets was 4.03%, the cost of funds on average interest-bearing liabilities was 0.87%, and the cost of interest-bearing deposits was 0.67%. 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 3.13% for the quarter ended September 30, 2016, compared to 3.16% for the same quarter a year ago.

Reversal for credit losses

Reversal for credit losses was zero for the third quarter of 2016 compared to $1.3 million for the third quarter of 2015.  This was based on a review of the appropriateness of the allowance for loan losses at September 30, 2016. A provision or reversal for credit losses represents a 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


Nine months ended September 30,


September 30, 2016


June 30, 2016


September 30, 2015


2016


2015


(In thousands)

Charge-offs:










  Commercial loans

$                    3,278


$                    6,688


$                     3,310


$              12,035


$                   6,754

  Real estate loans (1)

4,626


945


97


5,830


3,774

     Total charge-offs 

7,904


7,633


3,407


17,865


10,528

Recoveries:










  Commercial loans

$                    2,006


727


606


3,720


3,084

  Construction loans

548


47


41


7,871


163

  Real estate loans(1)

343


405


648


903


4,336

     Total recoveries

2,897


1,179


1,295


12,494


7,583

Net charge-offs

$                    5,007


$                    6,454


$                     2,112


$                5,371


$                   2,945


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

 

Non-interest income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), gains (losses) on loan sales, wire transfer fees, and other sources of fee income, was $8.8 million for the third quarter of 2016, a decrease of $400,000, or 3.8%, compared to $9.2 million for the third quarter of 2015.

Non-interest expense

Non-interest expense decreased $6.8 million, or 11.7%, to $50.7 million in the third quarter of 2016 compared to $57.5 million in the same quarter a year ago.  The decrease in non-interest expense in the third quarter of 2016 was primarily due to decreases of $11.7 million in amortization of investments in alternative energy partnerships. The efficiency ratio was 45.05% in the third quarter of 2016 compared to 53.81% for the same quarter a year ago.   

Income taxes

The effective tax rate for the third quarter of 2016 was 25.5% compared to 23.9% for the third quarter of 2015.  The effective tax rate includes the impact of the utilization of low income housing tax credits and alternative energy tax credits. 

BALANCE SHEET REVIEW

Gross loans, excluding loans held for sale, were $11.0 billion at September 30, 2016, an increase of $847.0 million, or 8.3%, from $10.2 billion at December 31, 2015, primarily due to increases of $442.8 million, or 8.4%, in commercial mortgage loans, $397.0 million, or 20.5%, in residential mortgage loans, and $73.7 million, or 16.7%, in real estate construction loans partially offset by decreases of $67.9 million, or 2.9%, in commercial loans.  The loan balances and composition at September 30, 2016, compared to December 31, 2015, and to September 30, 2015, are presented below:


September 30, 2016


December 31, 2015


September 30, 2015


(Dollars in thousands)

Commercial loans

$               2,248,996


$                 2,316,863


$                 2,362,059

Residential mortgage loans

2,329,402


1,932,355


1,816,464

Commercial mortgage loans

5,743,991


5,301,218


5,275,570

Equity lines

170,022


168,980


174,790

Real estate construction loans

515,236


441,543


405,278

Installment & other loans

2,810


2,493


5,771







Gross loans

$             11,010,457


$               10,163,452


$               10,039,932







Allowance for loan losses

(117,942)


(138,963)


(150,076)

Unamortized deferred loan fees

(5,519)


(8,262)


(9,592)







Total loans, net

$             10,886,996


$               10,016,227


$                 9,880,264

Loans held for sale

$                      4,750


$                        6,676


$                                -

 

Total deposits were $10.9 billion at September 30, 2016, an increase of $700 million, or 6.8%, from $10.2 billion at September 30, 2015, and an increase of $430 million, or 4.1% from $10.5 billion at December 31, 2015.  The deposit balances and composition at September 30, 2016, compared to December 31, 2015, and to September 30, 2015, are presented below: 


September 30, 2016


December 31, 2015


September 30, 2015


(Dollars in thousands)

Non-interest-bearing demand deposits

$                  2,246,661


$            2,033,048


$            1,978,387

NOW deposits

1,073,436


966,404


901,084

Money market deposits

2,131,190


1,905,719


1,685,943

Savings deposits

633,345


618,164


596,651

Time deposits

4,854,064


4,985,752


5,076,410

Total deposits

$                10,938,696


$          10,509,087


$          10,238,475







 

ASSET QUALITY REVIEW

At September 30, 2016, total non-accrual loans were $44.4 million, a decrease of $26.8 million, or 37.7%, from $71.2 million at September 30, 2015, and a decrease of $7.7 million, or 14.9%, from $52.1 million at December 31, 2015.         

The allowance for loan losses was $117.9 million and the allowance for off-balance sheet unfunded credit commitments was $2.2 million at September 30, 2016, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded commitments.  The $117.9 million allowance for loan losses at September 30, 2016, decreased $21.1 million, or 15.1%, from $139.0 million at December 31, 2015.  The allowance for loan losses represented 1.07% of period-end gross loans, excluding loans held for sale, and 265.9% of non-performing loans at September 30, 2016.  The comparable ratios were 1.37% of period-end gross loans, excluding loans held for sale, and 266.6% of non-performing loans at December 31, 2015.  The changes in non-performing assets and troubled debt restructurings at September 30, 2016, compared to December 31, 2015, and to September 30, 2015, are highlighted below:


(Dollars in thousands)

September 30, 2016


December 31, 2015


% Change


September 30, 2015


% Change

Non-performing assets










Accruing loans past due 90 days or more

$                               -


$                             -


-


$                          2,573


(100)

Non-accrual loans:










  Construction loans

5,507


16,306


(66)


16,579


(67)

  Commercial mortgage loans

21,077


25,231


(16)


33,214


(37)

  Commercial loans

9,251


3,545


161


14,758


(37)

  Residential mortgage loans

8,524


7,048


21


6,690


27

Total non-accrual loans:

$                        44,359


$                     52,130


(15)


$                        71,241


(38)

  Total non-performing loans

44,359


52,130


(15)


73,814


(40)

 Other real estate owned

20,986


24,701


(15)


26,326


(20)

  Total non-performing assets

$                        65,345


$                     76,831


(15)


$                      100,140


(35)

Accruing  troubled  debt  restructurings (TDRs)

$                        86,555


$                     81,680


6


$                        89,881


(4)

Non-accrual loans held for sale

$                          4,750


$                       5,944


(20)


$                                  -


100











Allowance for loan losses

$                      117,942


$                   138,963


(15)


$                      150,076


(21)











Total gross loans outstanding, at period-end (1)

$                 11,010,457


$              10,163,452


8


$                 10,039,932


10











Allowance for loan losses to non-performing loans, at period-end (2)

265.88%


266.57%




203.32%



Allowance for loan losses to gross loans, at period-end (1)

1.07%


1.37%




1.49%













(1) Excludes loans held for sale at period-end.










(2) Excludes non-accrual loans held for sale at period-end.










 

Troubled debt restructurings on accrual status totaled $86.6 million at September 30, 2016, compared to $81.7 million at December 31, 2015.  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 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, excluding non-accrual loans held for sale, to total assets was 0.5% at September 30, 2016, compared to 0.6% at December 31, 2015.  Total non-performing assets decreased $11.5 million, or 15.0%, to $65.3 million at September 30, 2016, compared to $76.8 million at December 31, 2015, primarily due to a decrease of $7.7 million, or 14.9%, in non-accrual loans and a decrease of $3.8 million, or 15.0%, in other real estate owned. 

CAPITAL ADEQUACY REVIEW

At September 30, 2016, the Company's common equity Tier 1 capital ratio of  12.64%, Tier 1 risk-based capital ratio of 13.67%, total risk-based capital ratio of 14.78%, and Tier 1 leverage capital ratio of 11.91%, 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 common equity tier 1 capital ratio equal to or greater than 6.5%, 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%. At December 31, 2015, the Company's common equity Tier 1 capital ratio was 12.95%, Tier 1 risk-based capital ratio was 14.03%, total risk-based capital ratio was 15.30%, and Tier 1 leverage capital ratio was 11.95%.

YEAR-TO-DATE REVIEW

Net income for the nine months ended September 30, 2016, was $127.1 million, an increase of $7.4 million, or 6.2%, compared to net income of $119.7 million for the same period a year ago.  Diluted earnings per share was $1.59 compared to $1.48 per share for the same period a year ago.  The net interest margin for the nine months ended September 30, 2016, was 3.39% compared to 3.43% for the same period a year ago.

Return on average stockholders' equity was 9.66% and return on average assets was 1.29% for the nine months ended September 30, 2016, compared to a return on average stockholders' equity of 9.56% and a return on average assets of 1.36% for the same period of 2015.  The efficiency ratio for the nine months ended September 30, 2016, was 51.35% compared to 49.13% for the same period a year ago.

CONFERENCE CALL

Cathay General Bancorp will host a conference call this afternoon to discuss its third quarter 2016 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 1-855-761-3186 and enter Conference ID 95261755. 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 34 branches in California, 12 branches in New York State, three in the Chicago, Illinois area, three in Washington State, two in Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New Jersey, 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

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; 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 (the "Dodd-Frank 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; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters 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: our pending acquisition of SinoPac Bancorp, including the possibility that any of the anticipated benefits of the proposed acquisition will not be realized or will not be realized within the expected time period; the failure to satisfy conditions to completion of the proposed acquisition or the merger of Cathay Bank and Far East National Bank, including receipt of required regulatory approvals; the failure of the proposed acquisition or the merger of Cathay Bank and Far East National Bank to be completed for any reason; the inability to complete the proposed acquisition or the merger of Cathay Bank and Far East National Bank in a timely manner; the risk that integration of SinoPac Bancorp's and Far East National Bank's operations with those of the Company and Cathay Bank will be materially delayed or will be more costly or difficult than expected; the diversion of management's attention from ongoing business operations and opportunities; the challenges of integrating and retaining key employees; the effect of the announcement of the proposed acquisition on the Company's, SinoPac Bancorp's, Far East National Bank's or the combined companies' respective customer relationships and operating results; the possibility that the proposed acquisition may be more expensive to complete than anticipated, including as a result of unexpected factors or events; 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, 2015 (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
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)








Three months ended


Nine months ended September 30,

(Dollars in thousands, except per share data)


September 30, 2016


June 30, 2016


September 30, 2015


2016


2015












FINANCIAL PERFORMANCE











Net interest income before provision for credit losses    


$                  103,824


$                  101,776


$                    97,646


$          307,968


$             280,326

Reversal for credit losses


-


(5,150)


(1,250)


(15,650)


(8,400)

Net interest income after reversal for credit losses


103,824


106,926


98,896


323,618


288,726

Non-interest income


8,811


9,057


9,156


25,409


23,324

Non-interest expense


50,737


68,879


57,471


171,187


149,187

Income before income tax expense


61,898


47,104


50,581


177,840


162,863

Income tax expense


15,808


12,273


12,098


50,756


43,200

Net income


$                    46,090


$                    34,831


$                    38,483


127,084


119,663












Net income per common share











Basic


$                        0.58


$                        0.44


$                        0.47


$                1.61


$                   1.49

Diluted


$                        0.58


$                        0.44


$                        0.47


$                1.59


$                   1.48












 Cash dividends paid per common share  


$                        0.18


$                        0.18


$                        0.14


$                0.54


$                   0.38























SELECTED RATIOS











Return on average assets


1.38%


1.07%


1.23%


1.29%


1.36%

Return on average total stockholders' equity


10.30%


8.00%


8.80%


9.66%


9.56%

Efficiency ratio


45.05%


62.15%


53.81%


51.35%


49.13%

Dividend payout ratio


30.80%


40.75%


29.94%


33.50%


25.65%























YIELD ANALYSIS (Fully taxable equivalent)











Total interest-earning assets


4.02%


4.05%


4.03%


4.05%


4.09%

Total interest-bearing liabilities


0.89%


0.89%


0.87%


0.89%


0.87%

Net interest spread


3.13%


3.16%


3.16%


3.16%


3.22%

Net interest margin


3.36%


3.38%


3.37%


3.39%


3.43%























CAPITAL RATIOS


September 30, 2016


December 31, 2015


September 30, 2015





Common Equity Tier 1 capital ratio


12.64%


12.95%


12.89%





Tier 1 risk-based capital ratio


13.67%


14.03%


13.98%





Total risk-based capital ratio


14.78%


15.30%


15.25%





Tier 1 leverage capital ratio


11.91%


11.95%


12.24%







.









 

CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)








(In thousands, except share and per share data)


September 30, 2016


December 31, 2015


September 30, 2015








Assets







Cash and due from banks


$                                203,877


$                              180,130


$                             196,342

Short-term investments and interest bearing deposits


791,757


536,880


369,829

Securities available-for-sale (amortized cost of $1,283,808 at September 30, 2016, $1,595,723 at December 31, 2015, and $1,378,088 at September 30, 2015)








1,298,469


1,586,352


1,380,879

Loans held for sale


4,750


6,676


-

Loans


11,010,457


10,163,452


10,039,932

Less:  Allowance for loan losses


(117,942)


(138,963)


(150,076)

 Unamortized deferred loan fees, net


(5,519)


(8,262)


(9,592)

 Loans, net


10,886,996


10,016,227


9,880,264

Federal Home Loan Bank stock


18,900


17,250


17,250

Other real estate owned, net


20,986


24,701


26,326

Affordable housing investments and alternative energy partnerships, net


225,535


182,943


168,276

Premises and equipment, net


106,885


108,924


110,272

Customers' liability on acceptances


13,339


40,335


35,087

Accrued interest receivable


31,868


30,558


29,418

Goodwill


372,189


372,189


373,208

Other intangible assets, net


3,158


3,677


4,108

Other assets


120,080


147,284


158,706








Total assets


$                           14,098,789


$                         13,254,126


$                        12,749,965








Liabilities and Stockholders' Equity







Deposits







Non-interest-bearing demand deposits


$                             2,246,661


$                           2,033,048


$                          1,978,387

Interest-bearing deposits:







NOW deposits


1,073,436


966,404


901,084

Money market deposits


2,131,190


1,905,719


1,685,943

Savings deposits


633,345


618,164


596,651

Time deposits 


4,854,064


4,985,752


5,076,410

Total deposits


10,938,696


10,509,087


10,238,475








Securities sold under agreements to repurchase


350,000


400,000


400,000

Advances from the Federal Home Loan Bank


700,000


275,000


75,000

Other borrowings for affordable housing investments


17,705


18,593


18,721

Long-term debt


119,136


119,136


119,136

Acceptances outstanding


13,339


40,335


35,087

Other liabilities


166,474


144,197


131,460

Total liabilities


12,305,350


11,506,348


11,017,879

     Commitments and contingencies


-


-


-

Stockholders' Equity







Common stock, $0.01 par value, 100,000,000 shares authorized,

87,090,319 issued and 78,879,676 outstanding at September 30, 2016, 87,002,931 issued and 80,806,116 outstanding at December 31, 2015, and 86,916,637 issued and 81,001,822 outstanding at September 30, 2015




















871


870


869

Additional paid-in-capital


886,081


880,822


877,445

Accumulated other comprehensive income/(loss), net


1,903


(8,426)


(2,597)

Retained earnings


1,144,173


1,059,660


1,032,806

Treasury stock, at cost (8,210,643 shares at September 30, 2016, 6,196,815 at December 31, 2015, and 5,914,815 at September 30, 2015)








(239,589)


(185,148)


(176,437)








Total equity


1,793,439


1,747,778


1,732,086

Total liabilities and equity


$                           14,098,789


$                         13,254,126


$                        12,749,965








Book value per common share


$22.57


$21.46


$21.22

Number of common shares outstanding


78,879,676


80,806,116


81,001,822

                                                                                                                                                                   

CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)








Three months ended


Nine months ended September 30,



September 30, 2016

June 30, 2016

September 30, 2015


2016

2015



(In thousands, except share and per share data)

INTEREST AND  DIVIDEND INCOME








Loan receivable, including loan fees


$                       118,500

$                       115,822

$                  109,943


$           349,212

$            315,038

Investment securities


4,850

5,265

6,142


16,974

15,262

Federal Home Loan Bank stock


393

382

524


1,122

2,782

Deposits with banks


412

433

258


1,094

1,105









Total interest and dividend income


124,155

121,902

116,867


368,402

334,187









INTEREST EXPENSE








Time deposits 


10,701

10,619

10,407


32,177

28,321

Other deposits


4,212

3,931

3,217


11,783

9,010

Securities sold under agreements to repurchase


3,828

3,934

3,977


11,696

11,836

Advances from Federal Home Loan Bank


134

202

164


442

374

Long-term debt


1,456

1,440

1,456


4,336

4,320









Total interest expense


20,331

20,126

19,221


60,434

53,861









Net interest income before reversal for credit losses


103,824

101,776

97,646


307,968

280,326

Reversal for credit losses


-

(5,150)

(1,250)


(15,650)

(8,400)









Net interest income after reversal for credit losses


103,824

106,926

98,896


323,618

288,726









NON-INTEREST INCOME








Securities gains/(losses), net


1,692

1,655

(16)


3,141

(3,369)

Letters of credit commissions


1,212

1,205

1,455


3,698

4,114

Depository service fees


1,401

1,385

1,409


4,109

4,003

Other operating income


4,506

4,812

6,308


14,461

18,576









Total non-interest income


8,811

9,057

9,156


25,409

23,324









NON-INTEREST EXPENSE








Salaries and employee benefits


22,881

21,501

20,725


71,313

67,804

Occupancy expense


4,734

4,484

4,412


13,587

12,419

Computer and equipment expense


2,337

2,443

3,893


7,360

8,783

Professional services expense


4,999

4,614

3,792


13,981

11,408

Data processing service expense


2,279

2,027

1,895


6,556

5,822

FDIC and State assessments


2,288

2,763

2,403


7,640

6,907

Marketing expense


1,516

1,002

1,436


3,314

3,577

Other real estate owned expense/(income)


(176)

493

250


612

(1,053)

Amortization of investments in low income housing and alternative energy partnerships


5,432

27,400

15,427


35,626

23,277

Amortization of core deposit intangibles


172

173

169


517

493

Other operating expense


4,275

1,979

3,069


10,681

9,750









Total non-interest expense


50,737

68,879

57,471


171,187

149,187









Income before income tax expense


61,898

47,104

50,581


177,840

162,863

Income tax expense


15,808

12,273

12,098


50,756

43,200

Net income


$                         46,090

$                         34,831

$                    38,483


127,084

119,663









Net income per common share:








Basic


$                             0.58

$                             0.44

$                        0.47


$                 1.61

$                  1.49

Diluted


$                             0.58

$                             0.44

$                        0.47


$                 1.59

$                  1.48









Cash dividends paid per common share


$                             0.18

$                             0.18

$                        0.14


$                 0.54

$                  0.38

Basic average common shares outstanding


78,865,860

78,846,237

81,475,288


79,147,839

80,422,711

Diluted average common shares outstanding


79,697,069

79,619,883

82,285,478


79,902,846

81,105,190

 


CATHAY GENERAL BANCORP
AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)








Three months ended

(In thousands)

September 30, 2016


June 30, 2016


September 30, 2015










Interest-earning assets

Average Balance

Average Yield/Rate (1)


Average Balance

Average Yield/Rate (1)


Average Balance

Average Yield/Rate (1) 

Loans (1)

$   10,670,253

4.42%


$   10,441,941

4.46%


$     9,855,450

4.43%

Taxable investment securities 

1,303,598

1.48%


1,293,490

1.64%


1,488,655

1.64%

FHLB stock

17,268

9.05%


17,250

8.91%


17,250

12.05%

Deposits with banks

294,292

0.56%


358,944

0.49%


149,153

0.69%










Total interest-earning assets

$   12,285,411

4.02%


$   12,111,625

4.05%


$   11,510,508

4.03%










Interest-bearing liabilities









Interest-bearing demand deposits

$     1,060,065

0.17%


$     1,013,028

0.17%


$        880,209

0.17%

Money market deposits

2,117,831

0.66%


2,017,867

0.65%


1,721,394

0.60%

Savings deposits

627,912

0.16%


630,042

0.17%


632,466

0.15%

Time deposits

4,651,593

0.92%


4,707,847

0.91%


4,868,908

0.85%

Total interest-bearing deposits

$     8,457,401

0.70%


$     8,368,784

0.70%


$     8,102,977

0.67%

Securities sold under agreements to repurchase

378,261

4.03%


400,000

3.96%


400,000

3.94%

Other borrowed funds

107,203

0.50%


166,191

0.49%


114,998

0.57%

Long-term debt

119,136

4.86%


119,136

4.86%


119,136

4.85%

Total interest-bearing liabilities

9,062,001

0.89%


9,054,111

0.89%


8,737,111

0.87%










Non-interest-bearing demand deposits

2,254,123



2,106,062



1,795,938











Total deposits and other borrowed funds

$   11,316,124



$   11,160,173



$   10,533,049











Total average assets

$   13,263,385



$   13,090,024



$   12,436,281


Total average equity

$     1,779,852



$     1,750,936



$     1,735,149





















Nine months ended,




(In thousands)

September 30, 2016


September 30, 2015












Interest-earning assets

Average Balance

Average Yield/Rate (1)


Average Balance

Average Yield/Rate (1)




Loans (1)

$   10,468,328

4.46%


$     9,425,705

4.47%




Taxable investment securities 

1,384,019

1.64%


1,337,791

1.53%




FHLB stock

17,256

8.69%


22,905

16.24%




Deposits with banks

272,690

0.54%


147,206

1.00%













Total interest-earning assets

$   12,142,293

4.05%


$   10,933,607

4.09%













Interest-bearing liabilities









Interest-bearing demand deposits

$     1,013,129

0.17%


$        838,976

0.16%




Money market deposits

2,020,725

0.65%


1,634,848

0.60%




Savings deposits

626,200

0.16%


582,632

0.15%




Time deposits

4,752,938

0.90%


4,541,376

0.83%




Total interest-bearing deposits

$     8,412,992

0.70%


$     7,597,832

0.66%




Securities sold under agreements to repurchase

392,701

3.98%


401,099

3.95%




Other borrowed funds

119,348

0.49%


118,091

0.42%




Long-term debt

119,136

4.86%


119,136

4.85%




Total interest-bearing liabilities

9,044,177

0.89%


8,236,158

0.87%













Non-interest-bearing demand deposits

2,131,741



1,710,823














Total deposits and other borrowed funds

$   11,175,918



$     9,946,981














Total average assets

$   13,109,225



$   11,765,599





Total average equity

$     1,757,592



$     1,673,954


















(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