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Cathay General Bancorp Announces Fourth Quarter and Full Year 2021 Results

CATY

Cathay General Bancorp (the “Company”, “we”, “us”, or “our”; NASDAQ: CATY), the holding company for Cathay Bank, today announced its unaudited financial results for the quarter and year ended December 31, 2021. The Company reported net income of $75.3 million, or $0.98 per share, for the fourth quarter of 2021, and net income of $298.3 million, or $3.80 per share, for the year ended December 31, 2021.

FINANCIAL PERFORMANCE

Three months ended Year ended December 31,
(unaudited) December 31, 2021 September 30, 2021 December 31, 2021

2021

2020

Net income

$75.3 million

$72.4 million

$70.9 million

$298.3 million

$228.9 million

Basic earnings per common share

$0.98

$0.93

$0.89

$3.81

$2.88

Diluted earnings per common share

$0.98

$0.93

$0.89

$3.80

$2.87

Return on average assets

1.48%

1.45%

1.50%

1.52%

1.22%

Return on average total stockholders' equity

12.12%

11.61%

11.75%

12.11%

9.70%

Efficiency ratio

41.77%

43.85%

49.61%

43.92%

47.65%

HIGHLIGHTS

  • Record net income of $298.3 million and EPS of $3.80 per share in 2021.
  • Quarterly earnings per share increased 10.1% compared to same quarter in 2020.
  • Total loans, excluding Paycheck Protection Program (“PPP”) loans, increased by $444.6 million or 11.4% annualized, in the fourth quarter.
  • Total deposits for the quarter increased $1.1 billion, or 24.7% annualized.
  • Total deposits, excluding time deposits, increased for the year by $3.1 billion, or 33.0%, to $12.5 billion from $9.4 billion in 2020.

“For the fourth quarter of 2021, total loans, excluding PPP loans, increased by $444.6 million, or 11.4% annualized. During 2021, we repurchased 3,986,057 shares at an average cost of $41.92 per share, for a total of $167.1 million as of December 31, 2021,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

FOURTH QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended December 31, 2021, was $75.3 million, an increase of $4.4 million, or 6.3%, compared to net income of $70.9 million for the same quarter a year ago. Diluted earnings per share for the quarter ended December 31, 2021, increased by 10.1%, or $0.98 per share, compared to $0.89 per share for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $15.6 million, or 11.2%, to $155.5 million during the fourth quarter of 2021, compared to $139.8 million during the same quarter a year ago. The increase was due primarily to a decrease in interest expense from deposits and an increase in interest income from loans and securities.

The net interest margin was 3.23% for the fourth quarter of 2021 compared to 3.12% for the fourth quarter of 2020 and 3.22% for the third quarter of 2021.

For the fourth quarter of 2021, the yield on average interest-earning assets was 3.52%, the cost of funds on average interest-bearing liabilities was 0.41%, and the cost of interest-bearing deposits was 0.37%. In comparison, for the fourth quarter of 2020, the yield on average interest-earning assets was 3.74%, the cost of funds on average interest-bearing liabilities was 0.86%, and the cost of interest-bearing deposits was 0.80%. The decrease in the yield on interest-bearing liabilities resulted mainly from lower interest rates on deposits driven by the lower repricing of maturing time deposits in the fourth quarter. The decrease in the yield on average interest-earning assets resulted mainly from lower interest rates on loans due to the lower rate environment.

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 3.11% for the quarter ended December 31, 2021, compared to 2.88% for the same quarter a year ago.

Provision/Reversal for credit losses

As permitted under the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”) and as extended by the Consolidated Appropriations Act, 2021, the Company adopted the Current Expected Credit Losses (“CECL”) methodology for estimated credit losses effective as of January 1, 2021. The Company recorded a provision for credit losses of $3.5 million in the fourth quarter of 2021 compared with $3.1 million in the third quarter of 2021 and reversal for credit losses of $5.0 million in the fourth quarter of 2020. The fourth quarter provision for credit losses was primarily driven by loan growth. As of December 31, 2021, the allowance for loan losses increased by $4.2 million to $136.2 million, or 0.83% of gross loans, compared to $131.9 million, or 0.83% of gross loans as of September 31, 2021. The change in the allowance for loan losses during the fourth quarter of 2021 included a $4.5 million provision for loan losses, and $287.7 thousand in net charge-offs. The Company will continue to monitor the continuing impact of the COVID-19 pandemic on credit risks and losses, as well as on customer deposits and other liabilities and assets.

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

Three months ended Year ended December 31,
December 31, 2021 September 30, 2021 December 31, 2020

2021

2020

(In thousands) (Unaudited)

Charge-offs:
Commercial loans

$

552

$

2,649

$

8,613

$

20,051

$

21,996

Real estate loans (1)

3

3

Total charge-offs

552

2,652

8,613

20,054

21,996

Recoveries:
Commercial loans

160

121

912

1,706

7,267

Construction loans

76

76

Real estate loans (1)

104

144

109

661

543

Total recoveries

264

341

1,021

2,443

7,810

Net charge-offs

$

288

$

2,311

$

7,592

$

17,611

$

14,186

(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), wire transfer fees, and other sources of fee income, was $19.8 million for the fourth quarter of 2021, an increase of $8.4 million, or 73.0%, compared to $11.5 million for the fourth quarter of 2020. The increase was primarily due to a $3.7 million gain on distribution from venture capital investments, a $2.5 million increase in derivative fees, and $1.4 million increase in wealth management fees, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense decreased $1.8 million, or 2.5%, to $73.2 million in the fourth quarter of 2021 compared to $75.0 million in the same quarter a year ago. The decrease in non-interest expense in the fourth quarter of 2021 was primarily due to a decrease of $4.4 million in amortization expense of investments in low-income housing and alternative energy partnerships offset, in part, by an increase of $2.3 million in salaries and employee benefits and an increase of $1.0 million in acquisition, integration and reorganization costs, when compared to the fourth quarter of 2020. 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 41.8% in the fourth quarter of 2021 compared to 49.6% for the same quarter a year ago.

Income taxes

The effective tax rate for the fourth quarter of 2021 was 23.6% compared to 12.7% for the fourth quarter of 2020. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $16.3 billion at December 31, 2021, an increase of $698.1 million, or 4.5%, from $15.6 billion at December 31, 2020. The increase was primarily due to increases of $588.2 million, or 7.8%, in commercial mortgage loans, $296.0 million, or 11.4%, in commercial loans, not including PPP loans, and an increase of $36.6 million, or 0.9%, in residential mortgage loans, offset, in part, by a decrease of $150.4 million, or 62.4%, in PPP loans, and $68.5 million, or 10.1%, in real estate construction loans. For the fourth quarter of 2021, total loans, excluding PPP loans, increased by $444.6 million, or 11.4% annualized. Loan fees recognized on PPP loans were $2.3 million in the fourth quarter of 2021 compared to $5.8 million in the third quarter, $2.7 million in second quarter and $2.5 million in the first quarter of 2021. As of December 31, 2021, the remaining deferred loan fees on PPP loans was $643.0 thousand.

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

December 31, 2021 September 30, 2021 December 31, 2020
(In thousands) (Unaudited)
Commercial loans

$

2,891,914

$

2,702,333

$

2,595,926

Paycheck protection program loans

90,485

169,360

240,907

Residential mortgage loans

4,182,006

4,144,789

4,145,389

Commercial mortgage loans

8,143,272

7,835,528

7,555,027

Equity lines

419,487

433,206

424,555

Real estate construction loans

611,031

688,195

679,492

Installment and other loans

4,284

3,370

3,100

Gross loans

$

16,342,479

$

15,976,781

$

15,644,396

Allowance for loan losses

(136,157

)

(131,945

)

(166,538

)

Unamortized deferred loan fees

(4,321

)

(3,835

)

(2,494

)

Total loans, net

$

16,202,001

$

15,841,001

$

15,475,364

Total deposits were $18.1 billion as of December 31, 2021, an increase of $1.9 billion, or 12.1%, from $16.1 billion as of December 31, 2020. The increases in noninterest-bearing demand deposits, NOW deposits, money market deposits and savings deposits resulted from higher liquidity maintained by our depositors during these uncertain times and improved money market deposit generation from corporate accounts. The decreases in time deposits resulted primarily from the runoff of wholesale time deposits.

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

December 31, 2021

September 30, 2021

December 31, 2020

(In thousands) (Unaudited)
Non-interest-bearing demand deposits

$

4,492,054

$

4,024,504

$

3,365,086

NOW deposits

2,522,442

2,202,956

1,926,135

Money market deposits

4,611,579

4,132,912

3,359,191

Savings deposits

915,515

920,138

785,672

Time deposits

5,517,252

5,726,360

6,673,317

Total deposits

$

18,058,842

$

17,006,870

$

16,109,401

As a result of the 12.1% increase in deposits year over year, our loan to deposits ratio decreased from 96% to 90%. As the majority of the increase was in non-CD deposits, our asset liability sensitivity has become more asset sensitive during 2021.

ASSET QUALITY REVIEW

As of December 31, 2021, total non-accrual loans were $65.8 million, a decrease of $1.8 million, or 2.7%, from $67.7 million as of December 31, 2020, and a decrease of $2.8 million, or 4.1%, from $68.7 million as of September 30, 2021.

The allowance for loan losses was $136.2 million and the allowance for off-balance sheet unfunded credit commitments was $7.1 million as of December 31, 2021. The allowances represent the amount estimated by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments. The allowance for loan losses represented 0.83% of period-end gross loans, and 202.4% of non-performing loans as of December 31, 2021. The comparable ratios were 1.06% of period-end gross loans, and 229.18% of non-performing loans as of December 31, 2020.

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

(Dollars in thousands) (Unaudited)

December 31, 2021

December 31, 2020

% Change

September 30, 2021

% Change

Non-performing assets
Accruing loans past due 90 days or more

$

1,439

$

4,982

(71

)

$

4,333

(67

)

Non-accrual loans:
Construction loans

4,286

(100

)

5,491

(100

)

Commercial mortgage loans

38,173

33,715

13

36,968

3

Commercial loans

16,558

23,087

(28

)

17,098

(3

)

Residential mortgage loans

11,115

6,596

69

9,125

22

Total non-accrual loans:

$

65,846

$

67,684

(3

)

$

68,682

(4

)

Total non-performing loans

67,285

72,666

(7

)

73,015

(8

)

Other real estate owned

4,368

4,918

(11

)

5,251

(17

)

Total non-performing assets

$

71,653

$

77,584

(8

)

$

78,266

(8

)

Accruing troubled debt restructurings (TDRs)

$

12,837

$

27,721

(54

)

$

24,406

(47

)

Allowance for loan losses

$

136,157

$

166,538

(18

)

$

131,945

3

Total gross loans outstanding, at period-end

$

16,342,479

$

15,644,396

4

$

15,976,781

2

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

202.36

%

229.18

%

180.71

%

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

0.83

%

1.06

%

0.83

%

The ratio of non-performing assets to total assets was 0.3% as of December 31, 2021, compared to 0.4% as of December 31, 2020. Total non-performing assets decreased $5.9 million, or 7.6%, to $71.7 million as of December 31, 2021, compared to $77.6 million as of December 31, 2020, primarily due to a decrease of $3.5 million, or 71.1%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of December 31, 2021, the Company’s Tier 1 risk-based capital ratio of 12.80%, total risk-based capital ratio of 14.41%, and Tier 1 leverage capital ratio of 10.40%, calculated under the Basel III capital rules, continue to place the Company in the “well capitalized” category for regulatory purposes, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%. As of December 31, 2020, the Company’s Tier 1 risk-based capital ratio was 13.52%, total risk-based capital ratio was 15.45%, and Tier 1 leverage capital ratio was 10.94%.

FULL YEAR REVIEW

Net income for the year ended December 31, 2021, was $298.3 million, an increase of $69.4 million, or 30.3%, compared to net income of $228.9 million for the year ended December 31, 2020. Diluted earnings per share for the year ended December 31, 2021 was $3.80 compared to $2.87 per share for the year ended December 31, 2020. The net interest margin for the year ended December 31, 2021, was 3.22% compared to 3.12% for the year ended December 31, 2020.

Return on average stockholders’ equity was 12.11% and return on average assets was 1.52% for the year ended December 31, 2021, compared to a return on average stockholders’ equity of 9.7% and a return on average assets of 1.22% for the year ended December 31, 2020. The efficiency ratio for the year ended December 31, 2021, was 43.92% compared to 47.65% for the year ended December 31, 2020.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its fourth quarter and year-end 2021 financial results this afternoon, Thursday, January 27, 2022, 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 9375967. A presentation to accompany the earnings call will be available at www.cathaygeneralbancorp.com. A listen-only live Webcast of the call will be available at www.cathaygeneralbancorp.com and a recorded version is scheduled to be available for replay for 12 months after the call.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp is the holding company for Cathay Bank, a California state-chartered bank. Founded in 1962, Cathay Bank offers a wide range of financial services. Cathay Bank currently operates 37 branches in California, 10 in New York State, four in Washington State, two in Illinois, two in Texas, one in each of Maryland, Massachusetts, Nevada, New Jersey, and Hong Kong, and a representative office in Taipei, Beijing, and Shanghai. Cathay Bank’s website is at www.cathaybank.com. Cathay General Bancorp’s website is at www.cathaygeneralbancorp.com. Information set forth on such websites is not incorporated into this press release.

FORWARD-LOOKING STATEMENTS

Statements made in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 regarding management’s beliefs, projections, and assumptions concerning future results and events. These forward-looking statements may include, but are not limited to, such words as “aims,” “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “projects,” “predicts,” “potential,” “possible,” “optimistic,” “seeks,” “shall,” “should,” “will,” and variations of these words and similar expressions. Forward-looking statements are based on estimates, beliefs, projections, and assumptions of management and are not guarantees of future performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from local, regional, national and international business, market and economic conditions and events (such as the COVID-19 pandemic) and the impact they may have on us, our customers and our operations, assets and liabilities; possible additional provisions for loan losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to including potential future supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act; higher capital requirements from the implementation of the Basel III capital standards; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; fluctuations in interest rates; risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; our ability to generate anticipated returns on our investments and financings, including in tax-advantaged projects; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters, public health crises (such as the COVID-19 pandemic) and geopolitical events; general economic or business conditions in Asia, and other regions where Cathay Bank has operations; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to technological changes; risk management processes and strategies; adverse results in legal proceedings; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in accounting standards or tax laws and regulations; market disruption and volatility; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; issuance of preferred stock; successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; and general competitive, economic political, and market conditions and fluctuations.

These and other factors are further described in Cathay General Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2020 (Item 1A in particular), other reports filed with the Securities and Exchange Commission (“SEC”), and other filings Cathay General Bancorp makes with the SEC from time to time. Actual results in any future period may also vary from the past results discussed in this press release. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we undertake no obligation to update or review any forward-looking statement to reflect circumstances, developments or events occurring after the date on which the statement is made or to reflect the occurrence of unanticipated events.

CATHAY GENERAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Three months ended Year ended December 31,
(Dollars in thousands, except per share data) December 31, 2021 September 30, 2021 December 31, 2020

2021

2020

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

$

155,452

$

152,484

$

139,820

$

597,755

$

552,110

(Reversal)/provision for credit losses

3,500

3,050

(5,000

)

(16,008

)

57,500

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

151,952

149,434

144,820

613,763

494,610

Non-interest income

19,804

12,216

11,451

54,603

42,820

Non-interest expense

73,197

72,215

75,046

286,523

283,465

Income before income tax expense

98,559

89,435

81,225

381,843

253,965

Income tax expense

23,234

17,038

10,332

83,539

25,105

Net income

$

75,325

$

72,397

$

70,893

$

298,304

$

228,860

Net income per common share
Basic

$

0.98

$

0.93

$

0.89

$

3.81

$

2.88

Diluted

$

0.98

$

0.93

$

0.89

$

3.80

$

2.87

Cash dividends paid per common share

$

0.34

$

0.31

$

0.31

$

1.27

$

1.24

SELECTED RATIOS
Return on average assets

1.48

%

1.45

%

1.50

%

1.52

%

1.22

%

Return on average total stockholders’ equity

12.12

%

11.61

%

11.75

%

12.11

%

9.70

%

Efficiency ratio

41.77

%

43.85

%

49.61

%

43.92

%

47.65

%

Dividend payout ratio

34.50

%

33.34

%

34.80

%

33.30

%

43.12

%

YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets

3.52

%

3.56

%

3.74

%

3.59

%

3.96

%

Total interest-bearing liabilities

0.41

%

0.48

%

0.86

%

0.52

%

1.14

%

Net interest spread

3.11

%

3.08

%

2.88

%

3.07

%

2.82

%

Net interest margin

3.23

%

3.22

%

3.12

%

3.22

%

3.12

%

CAPITAL RATIOS December 31, 2021 September 30, 2021 December 31, 2020
Tier 1 risk-based capital ratio

12.80

%

13.29

%

13.52

%

Total risk-based capital ratio

14.41

%

14.93

%

15.45

%

Tier 1 leverage capital ratio

10.40

%

10.67

%

10.94

%

. . .

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data) December 31, 2021 September 30, 2021 December 31, 2020
Assets
Cash and due from banks

$

134,141

$

156,287

$

138,616

Short-term investments and interest bearing deposits

2,315,563

1,667,875

1,282,462

Securities available-for-sale (amortized cost of $1,126,867 at December 31, 2021, $1,073,074 at September 30, 2021 and $1,019,230 at December 31, 2020)

1,127,309

1,079,216

1,036,550

Loans

16,342,479

15,976,781

15,644,396

Less: Allowance for loan losses

(136,157

)

(131,945

)

(166,538

)

Unamortized deferred loan fees, net

(4,321

)

(3,835

)

(2,494

)

Loans, net

16,202,001

15,841,001

15,475,364

Equity securities

22,319

20,117

23,744

Federal Home Loan Bank stock

17,250

17,250

17,250

Other real estate owned, net

4,368

5,251

4,918

Affordable housing investments and alternative energy partnerships, net

299,211

313,517

309,016

Premises and equipment, net

99,402

100,344

102,998

Customers’ liability on acceptances

8,112

13,185

13,753

Accrued interest receivable

56,994

56,844

59,032

Goodwill

372,189

372,189

372,189

Other intangible assets, net

4,627

4,831

5,434

Right-of-use assets-operating leases

27,834

29,179

30,919

Other assets

195,403

183,354

170,889

Total assets

$

20,886,723

$

19,860,440

$

19,043,134

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

$

4,492,054

$

4,024,504

$

3,365,086

Interest-bearing deposits:
NOW deposits

2,522,442

2,202,956

1,926,135

Money market deposits

4,611,579

4,132,912

3,359,191

Savings deposits

915,515

920,138

785,672

Time deposits

5,517,252

5,726,360

6,673,317

Total deposits

18,058,842

17,006,870

16,109,401

Advances from the Federal Home Loan Bank

20,000

20,000

150,000

Other borrowings for affordable housing investments

23,145

23,197

23,714

Long-term debt

119,136

119,136

119,136

Acceptances outstanding

8,112

13,185

13,753

Lease liabilities - operating leases

30,694

32,028

33,484

Other liabilities

180,544

182,733

175,502

Total liabilities

18,440,473

17,397,149

16,624,990

Stockholders' equity

2,446,250

2,463,291

2,418,144

Total liabilities and equity

$

20,886,723

$

19,860,440

$

19,043,134

Book value per common share

$

32.29

$

31.89

$

30.41

Number of common shares outstanding

75,750,862

77,240,215

79,508,265

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended Year ended December 31,
December 31, 2021 September 30, 2021 December 31, 2020

2021

2020

(In thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loan receivable, including loan fees

$

164,062

$

163,948

$

163,618

$

649,224

$

677,193

Investment securities

4,188

3,707

3,469

14,151

20,599

Federal Home Loan Bank stock

261

258

217

991

952

Deposits with banks

678

714

292

2,145

1,830

Total interest and dividend income

169,189

168,627

167,596

666,511

700,574

INTEREST EXPENSE
Time deposits

7,179

9,299

19,416

40,542

111,629

Other deposits

4,957

5,243

5,725

21,259

25,396

Advances from Federal Home Loan Bank

146

146

1,180

1,182

5,299

Long-term debt

1,455

1,455

1,455

5,773

5,791

Deferred payments from acquisition

115

Short-term borrowings

234

Total interest expense

13,737

16,143

27,776

68,756

148,464

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

155,452

152,484

139,820

597,755

552,110

(Reversal)/provision for credit losses

3,500

3,050

(5,000

)

(16,008

)

57,500

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

151,952

149,434

144,820

613,763

494,610

NON-INTEREST INCOME
Net gains/(losses) from equity securities

2,202

3

780

(1,426

)

(1,148

)

Securities gains, net

542

853

1,695

Letters of credit commissions

1,867

1,764

1,749

7,103

6,741

Depository service fees

1,477

1,401

1,271

5,584

4,949

Other operating income

14,258

9,048

7,109

42,489

30,583

Total non-interest income

19,804

12,216

11,451

54,603

42,820

NON-INTEREST EXPENSE
Salaries and employee benefits

33,878

33,437

31,545

132,795

124,022

Occupancy expense

5,176

5,136

5,199

20,318

20,634

Computer and equipment expense

3,456

3,175

2,915

13,549

11,133

Professional services expense

6,968

6,232

6,270

23,666

21,856

Data processing service expense

3,185

3,524

3,893

13,607

14,897

FDIC and State assessments

1,937

1,830

2,145

7,132

8,999

Marketing expense

1,643

945

1,334

6,913

5,224

Other real estate owned expense/(income)

146

(88

)

138

343

(3,091

)

Amortization of investments in low income housing and alternative energy partnerships

10,784

12,411

15,228

45,447

58,225

Amortization of core deposit intangibles

172

172

172

687

687

Cost associated with debt redemption

693

732

693

Acquisition, integration and reorganization costs

949

476

1,425

Other operating expense

4,903

4,965

5,514

19,909

20,186

Total non-interest expense

73,197

72,215

75,046

286,523

283,465

Income before income tax expense

98,559

89,435

81,225

381,843

253,965

Income tax expense

23,234

17,038

10,332

83,539

25,105

Net income

$

75,325

$

72,397

$

70,893

$

298,304

$

228,860

Net income per common share:
Basic

$

0.98

$

0.93

$

0.89

$

3.81

$

2.88

Diluted

$

0.98

$

0.93

$

0.89

$

3.80

$

2.87

Cash dividends paid per common share

$

0.34

$

0.31

$

0.31

$

1.27

$

1.24

Basic average common shares outstanding

76,566,481

77,846,424

79,540,694

78,268,369

79,584,560

Diluted average common shares outstanding

76,914,817

78,153,408

79,834,150

78,570,638

79,777,847

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

Three months ended
(In thousands) December 31, 2021 September 30, 2021 December 31, 2020
Interest-earning assets

Average

Balance

Average

Yield/Rate (1)

Average

Balance

Average

Yield/Rate (1)

Average

Balance

Average

Yield/Rate (1)

Loans (1)

$

16,130,896

4.04

%

$

15,798,496

4.12

%

$

15,569,490

4.18

%

Taxable investment securities

1,152,596

1.44

%

1,058,004

1.39

%

1,073,058

1.29

%

FHLB stock

17,250

6.00

%

17,250

5.93

%

17,250

5.00

%

Deposits with banks

1,779,275

0.15

%

1,893,785

0.15

%

1,156,764

0.10

%

Total interest-earning assets

$

19,080,017

3.52

%

$

18,767,535

3.56

%

$

17,816,562

3.74

%

Interest-bearing liabilities
Interest-bearing demand deposits

$

2,217,341

0.08

%

$

2,109,632

0.10

%

$

1,694,831

0.15

%

Money market deposits

4,393,816

0.39

%

4,228,025

0.43

%

3,295,103

0.59

%

Savings deposits

932,678

0.08

%

914,540

0.07

%

797,438

0.11

%

Time deposits

5,604,073

0.51

%

5,882,576

0.63

%

6,687,731

1.15

%

Total interest-bearing deposits

$

13,147,908

0.37

%

$

13,134,773

0.44

%

$

12,475,103

0.80

%

Other borrowed funds

43,186

1.34

%

43,246

1.34

%

237,467

1.98

%

Long-term debt

119,136

4.85

%

119,136

4.84

%

119,136

4.86

%

Total interest-bearing liabilities

13,310,230

0.41

%

13,297,155

0.48

%

12,831,706

0.86

%

Non-interest-bearing demand deposits

4,162,906

3,830,485

3,365,075

Total deposits and other borrowed funds

$

17,473,136

$

17,127,640

$

16,196,781

Total average assets

$

20,176,429

$

19,812,508

$

18,843,635

Total average equity

$

2,466,363

$

2,473,223

$

2,400,494

Year ended
(In thousands) December 31, 2021 December 31, 2020
Interest-earning assets

Average

Balance

Average

Yield/Rate (1)

Average

Balance

Average

Yield/Rate (1)

Loans (1)

$

15,827,550

4.10

%

$

15,500,910

4.37

%

Taxable investment securities

1,046,187

1.35

%

1,215,957

1.69

%

FHLB stock

17,250

5.74

%

17,300

5.50

%

Deposits with banks

1,649,564

0.13

%

960,276

0.19

%

Total interest-earning assets

$

18,540,551

3.59

%

$

17,694,443

3.96

%

Interest-bearing liabilities
Interest-bearing demand deposits

$

2,047,177

0.11

%

$

1,591,924

0.18

%

Money market deposits

4,034,246

0.45

%

2,903,837

0.74

%

Savings deposits

897,663

0.09

%

759,581

0.13

%

Time deposits

5,979,191

0.68

%

7,268,738

1.54

%

Total interest-bearing deposits

$

12,958,277

0.48

%

$

12,524,080

1.09

%

Other borrowed funds

75,516

1.57

%

326,023

1.73

%

Long-term debt

119,136

4.85

%

119,136

4.86

%

Total interest-bearing liabilities

13,152,929

0.52

%

12,969,239

1.14

%

Non-interest-bearing demand deposits

3,751,626

3,158,828

Total deposits and other borrowed funds

$

16,904,555

$

16,128,067

Total average assets

$

19,591,538

$

18,736,854

Total average equity

$

2,463,021

$

2,359,735

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



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