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Cathay General Bancorp Announces Second Quarter 2024 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 ended June 30, 2024. The Company reported net income of $66.8 million, or $0.92 per share, for the second quarter of 2024. The second quarter net income included $4.1 million or $0.04 per diluted share from accelerated amortization of solar tax credit investments, which were previously forecasted to be amortized in the second half of 2024 and $1.4 million or $0.01 per diluted share mark-to-market loss from equity securities held by the Company.

FINANCIAL PERFORMANCE

Three months ended
(unaudited) June 30, 2024 March 31, 2024 June 30, 2023
Net income $ 66.8 million $ 71.4 million $ 93.2 million
Basic earnings per common share

$0.92

$0.98

$1.29

Diluted earnings per common share

$0.92

$0.98

$1.28

Return on average assets

1.15%

1.23%

1.67%

Return on average total stockholders' equity

9.63%

10.40%

14.47%

Efficiency ratio

55.65%

53.22%

45.36%

SECOND QUARTER HIGHLIGHTS

  • Net interest margin decreased to 3.01% in the second quarter of 2024 from 3.05% in the first quarter of 2024.
  • Diluted earnings per share decreased to $0.92 for the second quarter of 2024 compared to $0.98 for the first quarter of 2024 due mainly from higher provision for loan losses in the second quarter of 2024.
  • On May 28, 2024, the Company announced a new stock repurchase program to buy back up to $125.0 million of the Company’s common stock. The previous $125.0 million share repurchase program announced on May 26, 2022, was completed on February 21, 2023, with the repurchase of 2,897,628 shares at an average cost of $43.14.

“We are seeing signs that our net interest margin has begun to stabilize. During the second quarter, we repurchased 0.7 million shares at an average cost of $36.41 per share, for a total of $25.1 million,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW
SECOND QUARTER 2024 COMPARED TO THE FIRST QUARTER 2024

Net income for the quarter ended June 30, 2024, was $66.8 million, a decrease of $4.6 million, or 6.4%, compared to net income of $71.4 million for the first quarter of 2024. Diluted earnings per share for the second quarter of 2024 was $0.92 per share compared to $0.98 per share for the first quarter of 2024. The second quarter net income included $4.1 million or $0.04 per diluted share from accelerated amortization of solar tax credit investments, which were previously scheduled to be amortized in the second half of 2024 and $1.4 million or $0.01 per diluted share mark-to-market loss from equity securities held by the Company.

Return on average stockholders’ equity was 9.63% and return on average assets was 1.15% for the quarter ended June 30, 2024, compared to a return on average stockholders’ equity of 10.40% and a return on average assets of 1.23% in the first quarter of 2024.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $3.3 million, or 2.0%, to $165.3 million during the second quarter of 2024, compared to $168.6 million in the first quarter of 2024. The decrease was due primarily to an increase in deposit interest expense offset, in part, by an increase in interest income from loans and securities.

The net interest margin was 3.01% for the second quarter of 2024 compared to 3.05% for the first quarter of 2024.

For the second quarter of 2024, the yield on average interest-earning assets was 6.05%, the cost of funds on average interest-bearing liabilities was 3.97%, and the cost of interest-bearing deposits was 3.94%. In comparison, for the first quarter of 2024, the yield on average interest-earning assets was 6.01%, the cost of funds on average interest-bearing liabilities was 3.87%, and the cost of interest-bearing deposits was 3.78%. The increase in the costs of average interest-bearing liabilities was mainly a result of higher interest rates on interest bearing deposits. 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 2.08% for the second quarter of 2024, compared to 2.14% for the first quarter of 2024.

Provision for credit losses

The Company recorded a provision for credit losses of $6.6 million in the second quarter of 2024 compared with $1.9 million in the first quarter of 2024. As of June 30, 2024, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, decreased $1.4 million to $163.0 million, or 0.84% of gross loans, compared to $164.4 million, or 0.85% of gross loans, as of March 31, 2024.

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

Three months ended

Six months ended June 30,

June 30, 2024

March 31, 2024

June 30, 2023

2024

2023

(In thousands) (Unaudited)
Charge-offs:
Commercial loans

$

8,257

$

1,939

$

2,352

$

10,196

$

6,263

Real estate loans (1)

254

130

254

4,120

Installment and other loans

1

7

Total charge-offs

8,257

2,193

2,483

10,450

10,390

Recoveries:
Commercial loans

126

812

442

938

953

Real estate loans (1)

134

241

61

375

2,601

Installment and other loans

Total recoveries

260

1,053

503

1,313

3,554

Net charge-offs/(recoveries)

$

7,997

$

1,140

$

1,980

$

9,137

$

6,836

(1)

Real estate loans include commercial real estate 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 $13.2 million for the second quarter of 2024, an increase of $6.6 million, or 100.0%, compared to $6.6 million for the first quarter of 2024. The increase was primarily due to a $7.6 million decrease in unrealized losses on equity securities offset, in part, by a $1.4 million decrease in gain from the sale of a previously written-off security, when compared to the first quarter of 2024.

Non-interest expense

Non-interest expense increased $6.1 million, or 6.5%, to $99.3 million in the second quarter of 2024 compared to $93.2 million in the first quarter of 2024. The increase in non-interest expense in the second quarter of 2024 was primarily due to an increase of $9.0 million in amortization expense of investments in low-income housing and alternative energy partnerships, $1.2 million in other real estate owned, and $1.2 million in professional services expenses offset, in part, by a decrease of $2.3 million in FDIC and state assessments and a decrease of $3.0 million in salaries and employee benefits when compared to the first quarter of 2024. 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 55.65% in the second quarter of 2024 compared to 53.22% for the first quarter of 2024.

Income taxes

The effective tax rate for the second quarter of 2024 was 7.92% compared to 10.76% for the first quarter of 2024. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans, excluding loans held for sale, were $19.36 billion as of June 30, 2024, a decrease of $71.9 million, or 0.4%, from $19.43 billion as of March 31, 2024. The decrease was primarily due to a decrease of $59.6 million, or 1.0%, in residential mortgage loans, a decrease of $41.8 million, or 1.3% in commercial loans, and a decrease of $25.8 million, or 6.7% in construction loans offset, in part, by an increase of $64.2 million, or 0.7%, in commercial real estate loans.

The loan balances and composition as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

June 30, 2024 March 31, 2024 June 30, 2023
(In thousands) (Unaudited)
Commercial loans

$

3,090,763

$

3,132,580

$

3,317,868

Construction loans

356,978

382,775

521,673

Commercial real estate loans

9,886,030

9,821,807

9,293,475

Residential mortgage loans

5,782,202

5,841,846

5,542,466

Equity lines

235,277

245,222

272,055

Installment and other loans

6,274

5,166

5,257

Gross loans

$

19,357,524

$

19,429,396

$

18,952,794

Allowance for loan losses

(153,404

)

(154,589

)

(155,109

)

Unamortized deferred loan fees

(10,785

)

(11,737

)

(9,497

)

Total loans, net

$

19,193,335

$

19,263,070

$

18,788,188

Total deposits were $19.77 billion as of June 30, 2024, a decrease of $73.2 million, or 0.4%, from $19.85 billion as of March 31, 2024.

The deposit balances and composition as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

June 30, 2024 March 31, 2024 June 30, 2023
(In thousands) (Unaudited)
Non-interest-bearing demand deposits

$

3,161,632

$

3,289,539

$

3,561,237

NOW deposits

2,145,580

2,331,486

2,404,470

Money market deposits

3,182,031

3,117,557

3,033,868

Savings deposits

1,014,287

1,039,144

1,131,602

Time deposits

10,269,487

10,068,533

8,965,826

Total deposits

$

19,773,017

$

19,846,259

$

19,097,003

ASSET QUALITY REVIEW

As of June 30, 2024, total non-accrual loans were $107.3 million, an increase of $9.2 million, or 9.4%, from $98.1 million as of March 31, 2024.

The allowance for loan losses was $153.4 million and the allowance for off-balance sheet unfunded credit commitments was $9.6 million as of June 30, 2024. 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 138.56% of non-performing loans as of June 30, 2024. The comparable ratios were 0.80% of period-end gross loans, and 146.30% of non-performing loans as of March 31, 2024.

The changes in non-performing assets and modifications to borrowers experiencing financial difficulties as of June 30, 2024, compared to March 31, 2024, and June 30, 2023, are presented below:

(Dollars in thousands) (Unaudited) June 30, 2024 March 31, 2024 % Change June 30, 2023 % Change
Non-performing assets
Accruing loans past due 90 days or more

$

3,443

$

7,560

(54

)

$

5,968

(42

)

Non-accrual loans:
Construction loans

22,998

22,998

Commercial real estate loans

60,085

47,465

27

39,558

52

Commercial loans

4,075

14,642

(72

)

17,574

(77

)

Residential mortgage loans

20,112

13,002

55

11,872

69

Total non-accrual loans

$

107,270

$

98,107

9

$

69,004

55

Total non-performing loans

110,713

105,667

5

74,972

48

Other real estate owned

18,277

19,441

(6

)

4,067

349

Total non-performing assets

$

128,990

$

125,108

3

$

79,039

63

Accruing loan modifications to borrowers experiencing
financial difficulties

$

$

$

Allowance for loan losses

$

153,404

$

154,589

(1

)

$

155,109

(1

)

Total gross loans outstanding, at period-end

$

19,357,524

$

19,429,396

(0

)

$

18,952,794

2

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

138.56

%

146.30

%

206.89

%

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

0.79

%

0.80

%

0.82

%

The ratio of non-performing assets to total assets was 0.56% as of June 30, 2024, compared to 0.53% as of March 31, 2024. Total non-performing assets increased $3.9 million, or 3.1%, to $129.0 million as of June 30, 2024, compared to $125.1 million as of March 31, 2024, primarily due to an increase of $9.2 million, or 9.3%, in non-accrual loans, and a decrease of $4.1 million, or 54.5%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of June 30, 2024, the Company’s Tier 1 risk-based capital ratio of 13.26%, total risk-based capital ratio of 14.74%, and Tier 1 leverage capital ratio of 10.83%, 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 March 31, 2024, the Company’s Tier 1 risk-based capital ratio was 13.08%, total risk-based capital ratio was 14.55%, and Tier 1 leverage capital ratio was 10.71%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its second quarter 2024 financial results this afternoon, Monday, July 22, 2024, 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 10190674. 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; 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, 2023 (Item 1A in particular), other reports filed with the Securities and Exchange Commission (“SEC”), and other filings Cathay General Bancorp makes with the SEC from time to time. Actual results in any future period may also vary from the past results discussed in this press release. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we undertake no obligation to update or review any forward-looking statement to reflect circumstances, developments or events occurring after the date on which the statement is made or to reflect the occurrence of unanticipated events.

CATHAY GENERAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Three months ended

Six months ended June 30,

(Dollars in thousands, except per share data)

June 30, 2024

March 31, 2024

June 30, 2023

2024

2023

Financial performance
Net interest income before provision for credit losses

$

165,316

$

168,572

$

181,533

$

333,888

$

373,968

Provision for credit losses

6,600

1,900

9,155

8,500

17,255

Net interest income after provision for credit losses

158,716

166,672

172,378

325,388

356,713

Non-interest income

13,215

6,611

23,110

19,826

37,354

Non-interest expense

99,352

93,239

92,821

192,591

176,007

Income before income tax expense

72,579

80,044

102,667

152,623

218,060

Income tax expense

5,750

8,609

9,447

14,359

28,833

Net income

$

66,829

$

71,435

$

93,220

$

138,264

$

189,227

Net income per common share
Basic

$

0.92

$

0.98

$

1.29

$

1.90

$

2.61

Diluted

$

0.92

$

0.98

$

1.28

$

1.90

$

2.60

Cash dividends paid per common share

$

0.34

$

0.34

$

0.34

$

0.68

$

0.68

Selected ratios
Return on average assets

1.15

%

1.23

%

1.67

%

1.19

%

1.71

%

Return on average total stockholders’ equity

9.63

%

10.40

%

14.47

%

10.01

%

14.92

%

Efficiency ratio

55.65

%

53.22

%

45.36

%

54.45

%

42.79

%

Dividend payout ratio

37.06

%

34.59

%

26.46

%

35.78

%

26.04

%

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

6.05

%

6.01

%

5.68

%

6.03

%

5.61

%

Total interest-bearing liabilities

3.97

%

3.87

%

2.99

%

3.92

%

2.73

%

Net interest spread

2.08

%

2.14

%

2.69

%

2.11

%

2.88

%

Net interest margin

3.01

%

3.05

%

3.44

%

3.03

%

3.59

%

Capital ratios June 30, 2024 March 31, 2024 June 30, 2023
Tier 1 risk-based capital ratio

13.26

%

13.08

%

12.38

%

Total risk-based capital ratio

14.74

%

14.55

%

13.88

%

Tier 1 leverage capital ratio

10.83

%

10.71

%

10.45

%

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data) June 30, 2024 March 31, 2024 June 30, 2023
Assets
Cash and due from banks

$

160,389

$

165,284

$

187,886

Short-term investments and interest bearing deposits

944,612

1,010,651

1,294,379

Securities available-for-sale (amortized cost of $1,780,251 at June 30, 2024,
$1,783,915 at March 31, 2024 and $1,629,357 at June 30, 2023)

1,648,731

1,653,167

1,487,321

Loans held for sale

23,171

Loans

19,357,524

19,429,396

18,952,794

Less: Allowance for loan losses

(153,404

)

(154,589

)

(155,109

)

Unamortized deferred loan fees, net

(10,785

)

(11,737

)

(9,497

)

Loans, net

19,193,335

19,263,070

18,788,188

Equity securities

29,949

31,380

37,674

Federal Home Loan Bank stock

17,250

17,250

25,242

Other real estate owned, net

18,277

19,441

4,067

Affordable housing investments and alternative energy partnerships, net

309,834

330,912

323,984

Premises and equipment, net

89,451

90,454

92,090

Customers’ liability on acceptances

16,264

17,074

4,364

Accrued interest receivable

99,434

97,937

86,211

Goodwill

375,696

375,696

375,696

Other intangible assets, net

3,860

4,131

4,992

Right-of-use assets- operating leases

32,858

31,698

31,399

Other assets

295,305

273,487

284,945

Total assets

$

23,235,245

$

23,404,803

$

23,028,438

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

$

3,161,632

$

3,289,539

$

3,561,237

Interest-bearing deposits:
NOW deposits

2,145,580

2,331,486

2,404,470

Money market deposits

3,182,031

3,117,557

3,033,868

Savings deposits

1,014,287

1,039,144

1,131,602

Time deposits

10,269,487

10,068,533

8,965,826

Total deposits

19,773,017

19,846,259

19,097,003

Advances from the Federal Home Loan Bank

165,000

265,000

815,000

Other borrowings for affordable housing investments

17,838

17,557

22,428

Long-term debt

119,136

119,136

119,136

Acceptances outstanding

16,264

17,074

4,364

Lease liabilities - operating leases

35,355

34,325

33,870

Other liabilities

315,393

327,380

333,966

Total liabilities

20,442,003

20,626,731

20,425,767

Stockholders' equity

2,793,242

2,778,072

2,602,671

Total liabilities and equity

$

23,235,245

$

23,404,803

$

23,028,438

Book value per common share

$

38.70

$

38.22

$

35.87

Number of common shares outstanding

72,170,433

72,688,191

72,563,169

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended Six months ended June 30,

June 30, 2024

March 31, 2024

June 30, 2023

2024

2023

(In thousands, except share and per share data)
Interest and Dividend Income
Loans receivable

$

303,336

$

302,528

$

273,478

$

605,864

$

534,657

Investment securities

15,644

14,951

12,370

30,595

24,134

Federal Home Loan Bank stock

499

431

298

930

602

Deposits with banks

13,381

14,732

13,959

28,113

26,098

Total interest and dividend income

332,860

332,642

300,105

665,502

585,491

Interest Expense
Time deposits

118,076

109,546

79,975

227,622

144,149

Other deposits

44,512

42,788

30,659

87,300

54,476

Advances from Federal Home Loan Bank

2,316

9,316

5,498

11,632

8,096

Long-term debt

1,863

1,721

1,552

3,584

2,995

Short-term borrowings

777

699

888

1,476

1,807

Total interest expense

167,544

164,070

118,572

331,614

211,523

Net interest income before provision for credit losses

165,316

168,572

181,533

333,888

373,968

Provision for credit losses

6,600

1,900

9,155

8,500

17,255

Net interest income after provision for credit losses

158,716

166,672

172,378

325,388

356,713

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

(1,430

)

(9,027

)

10,663

(10,457

)

15,516

Debt securities gains/(losses), net

1,107

1,107

(3,000

)

Letters of credit commissions

1,888

1,717

1,664

3,605

3,234

Depository service fees

1,778

1,550

1,641

3,328

3,473

Wealth management fees

5,678

5,638

3,639

11,316

7,536

Other operating income

5,301

5,626

5,503

10,927

10,595

Total non-interest income

13,215

6,611

23,110

19,826

37,354

Non-Interest Expense
Salaries and employee benefits

40,439

43,552

37,048

83,991

75,274

Occupancy expense

5,652

5,967

5,528

11,619

11,032

Computer and equipment expense

5,391

5,068

4,227

10,459

8,512

Professional services expense

8,212

6,992

8,900

15,204

16,306

Data processing service expense

3,877

3,929

3,672

7,806

7,396

FDIC and State assessments

3,742

6,089

3,012

9,831

6,167

Marketing expense

1,474

1,914

2,416

3,388

3,190

Other real estate owned expense

1,482

253

81

1,735

131

Amortization of investments in low income housing and
alternative energy partnerships

23,396

14,432

21,746

37,828

37,340

Amortization of core deposit intangibles

259

339

559

598

809

Other operating expense

5,428

4,704

5,632

10,132

9,850

Total non-interest expense

99,352

93,239

92,821

192,591

176,007

Income before income tax expense

72,579

80,044

102,667

152,623

218,060

Income tax expense

5,750

8,609

9,447

14,359

28,833

Net income

$

66,829

$

71,435

$

93,220

$

138,264

$

189,227

Net income per common share:
Basic

$

0.92

$

0.98

$

1.29

$

1.90

$

2.61

Diluted

$

0.92

$

0.98

$

1.28

$

1.90

$

2.60

Cash dividends paid per common share

$

0.34

$

0.34

$

0.34

$

0.68

$

0.68

Basic average common shares outstanding

72,658,810

72,673,974

72,536,301

72,666,392

72,534,779

Diluted average common shares outstanding

72,825,356

72,971,157

72,753,746

72,898,256

72,826,301

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

Three months ended
(In thousands)(Unaudited)

June 30, 2024

March 31, 2024 June 30, 2023
Interest-earning assets: Average Balance Average
Yield/Rate (1)
Average Balance Average
Yield/Rate (1)
Average Balance Average
Yield/Rate (1)
Loans (1)

$

19,439,112

6.28

%

$

19,498,954

6.24

%

$

18,503,889

5.93

%

Taxable investment securities

1,667,279

3.77

%

1,638,317

3.67

%

1,561,443

3.18

%

FHLB stock

17,250

11.63

%

23,006

7.53

%

18,431

6.49

%

Deposits with banks

997,808

5.39

%

1,093,972

5.42

%

1,090,019

5.14

%

Total interest-earning assets

$

22,121,449

6.05

%

$

22,254,249

6.01

%

$

21,173,782

5.68

%

Interest-bearing liabilities:
Interest-bearing demand deposits

$

2,169,045

2.07

%

$

2,312,246

2.19

%

$

2,325,101

1.57

%

Money market deposits

3,217,813

3.77

%

3,114,298

3.53

%

3,047,163

2.55

%

Savings deposits

1,037,771

1.23

%

1,046,103

1.10

%

1,076,260

0.81

%

Time deposits

10,185,497

4.66

%

9,720,917

4.53

%

8,803,900

3.64

%

Total interest-bearing deposits

$

16,610,126

3.94

%

$

16,193,564

3.78

%

$

15,252,424

2.91

%

Other borrowed funds

235,234

5.29

%

730,779

5.51

%

508,081

5.04

%

Long-term debt

119,136

6.29

%

119,136

5.81

%

119,136

5.22

%

Total interest-bearing liabilities

16,964,496

3.97

%

17,043,479

3.87

%

15,879,641

2.99

%

Non-interest-bearing demand deposits

3,247,498

3,338,551

3,667,533

Total deposits and other borrowed funds

$

20,211,994

$

20,382,030

$

19,547,174

Total average assets

$

23,336,454

$

23,451,901

$

22,403,606

Total average equity

$

2,792,557

$

2,761,843

$

2,583,677

(1)

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

Six months ended
(In thousands)(Unaudited) June 30, 2024 June 30, 2023
Interest-earning assets: Average
Balance
Average
Yield/Rate (1)
Average
Balance
Average
Yield/Rate (1)
Loans (1)

$

19,469,033

6.26

%

$

18,375,402

5.87

%

Taxable investment securities

1,652,798

3.72

%

1,555,177

3.13

%

FHLB stock

20,128

9.29

%

17,856

6.80

%

Deposits with banks

1,045,890

5.41

%

1,080,158

4.87

%

Total interest-earning assets

$

22,187,849

6.03

%

$

21,028,593

5.61

%

Interest-bearing liabilities:
Interest-bearing demand deposits

$

2,240,645

2.13

%

$

2,339,735

1.35

%

Money market deposits

3,166,055

3.66

%

3,211,795

2.29

%

Savings deposits

1,041,938

1.16

%

1,007,753

0.48

%

Time deposits

9,953,207

4.60

%

8,516,156

3.41

%

Total interest-bearing deposits

$

16,401,845

3.86

%

$

15,075,439

2.66

%

Other borrowed funds

483,007

5.46

%

415,317

4.81

%

Long-term debt

119,136

6.05

%

119,136

5.07

%

Total interest-bearing liabilities

17,003,988

3.92

%

15,609,892

2.73

%

Non-interest-bearing demand deposits

3,293,024

3,812,229

Total deposits and other borrowed funds

$

20,297,012

$

19,422,121

Total average assets

$

23,394,177

$

22,251,861

Total average equity

$

2,777,200

$

2,557,344

(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
June 30, 2024 March 31, 2024 June 30, 2023
(In thousands) (Unaudited)
Stockholders' equity (a)

$

2,793,242

$

2,778,072

$

2,602,671

Less: Goodwill

(375,696

)

(375,696

)

(375,696

)

Other intangible assets (1)

(3,860

)

(4,131

)

(4,992

)

Tangible equity (b)

$

2,413,686

$

2,398,245

$

2,221,983

Total assets (c)

$

23,235,245

$

23,404,803

$

23,028,438

Less: Goodwill

(375,696

)

(375,696

)

(375,696

)

Other intangible assets (1)

(3,860

)

(4,131

)

(4,992

)

Tangible assets (d)

$

22,855,689

$

23,024,976

$

22,647,750

Number of common shares outstanding (e)

72,170,433

72,688,191

72,563,169

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

12.02

%

11.87

%

11.30

%

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

10.56

%

10.42

%

9.81

%

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

$

33.44

$

32.99

$

30.62

Three months ended Six months ended
June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023
(In thousands) (Unaudited)
Net Income

$

66,829

$

71,435

$

93,220

$

138,264

$

189,227

Add: Amortization of other intangibles (1)

270

330

570

600

762

Tax effect of amortization adjustments (2)

(80

)

(98

)

(169

)

(178

)

(226

)

Tangible net income (f)

$

67,019

$

71,667

$

93,621

$

138,686

$

189,763

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

11.11

%

11.95

%

16.85

%

11.49

%

17.08

%

(1)

Includes core deposit intangibles and mortgage servicing

(2)

Applied the statutory rate of 29.65%.

(3)

Annualized



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