株探米国株
日本語 英語
エドガーで原本を確認する


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  January 25, 2023
 
CATHAY GENERAL BANCORP
(Exact name of registrant as specified in its charter)

Delaware
 
001-31830
  95-4274680
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer Identification No.)

777 North Broadway, Los Angeles, California 90012
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (213) 625-4700
 
Not Applicable
 (Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
CATY
The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company  ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02
Results of Operations and Financial Condition.
 
On January 25, 2023, Cathay General Bancorp (the “Company”) announced, in a press release, its financial results for the quarter and year ended December 31, 2022. That press release is attached hereto as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.
 
As announced in the press release attached hereto as Exhibit 99.1, the Company will host a conference call on Wednesday, January 25, 2023 at 3:00 p.m. Pacific Time to discuss its fourth quarter and full year 2022 financial results.  A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available on its website at www.cathaygeneralbancorp.com. A copy of the Presentation Materials is attached hereto as Exhibit 99.2.

The information included in this report pursuant to Item 2.02 and Item 7.01 of Form 8-K (including Exhibit 99.1 and Exhibit 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 
 
 
99.1
 
 
 
 
99.2 Presentation Materials, dated January 25, 2023
 
 
 
 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date:  January 25, 2023
 
CATHAY GENERAL BANCORP
 
 
 
 
 
 
 
 
 
 
By:
/s/ Heng W. Chen
 
 
Heng W. Chen
 
 
Executive Vice President and
 
 
Chief Financial Officer
EX-99.1 2 a53290481ex_991.htm EXHIBIT 99.1
Exhibit 99.1

Cathay General Bancorp Announces Fourth Quarter and Full Year 2022 Results

LOS ANGELES--(BUSINESS WIRE)--January 25, 2023--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, 2022. The Company reported net income of $97.6 million, or $1.33 per share, for the fourth quarter of 2022, and net income of $360.6 million, or $4.83 per share, for the year ended December 31, 2022.

FINANCIAL PERFORMANCE


Three months ended
Year ended December 31,
(unaudited) December 31, 2022
September 30, 2022
December 31, 2021

2022


2021

Net income $97.6 million
$99.0 million
$75.3 million
$360.6 million
$298.3 million
Basic earnings per common share

$1.33


$1.34*

$0.98


$4.85


$3.81

Diluted earnings per common share

$1.33


$1.33*

$0.98


$4.83


$3.80

Return on average assets

1.77%


1.81%


1.48%


1.69%


1.52%

Return on average total stockholders' equity

15.73%


15.94%


12.12%


14.70%


12.11%

Efficiency ratio

37.97%


36.35%


41.77%


38.38%


43.92%










 
*Net income per common share previously reported for the third quarter of 2022 has been corrected. The correction decreased basic and diluted net income per common share by $.01 and $.02, respectively.

HIGHLIGHTS

  • Record net income of $360.6 million and EPS of $4.83 per share in 2022.
  • Quarterly earnings per share increased 35.7% compared to same quarter in 2021.
  • Total loans increased $1.4 billion, or 8.3%, excluding HSBC purchased loans of $550.5 million, in 2022.

“Net interest income for the quarter increased by 29.8% compared to the same quarter last year primarily as a result of loan growth and the higher level of interest rates. During 2022, we repurchased 3,227,465 shares at an average cost of $43.79 per share, for a total of $141.3 million,” 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, 2022, was $97.6 million, an increase of $22.3 million, or 29.6%, compared to net income of $75.3 million for the same quarter a year ago. Diluted earnings per share for the quarter ended December 31, 2022, increased by 35.7%, or $1.33 per share, compared to $0.98 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 $46.3 million, or 29.8%, to $201.8 million during the fourth quarter of 2022, compared to $155.5 million during the same quarter a year ago. The increase was due primarily to an increase in interest income from loans and securities which was partially offset by an increase in interest expense from deposits.


The net interest margin was 3.87% for the fourth quarter of 2022 compared to 3.23% for the fourth quarter of 2021 and 3.83% for the third quarter of 2022.

For the fourth quarter of 2022, the yield on average interest-earning assets was 5.06%, the cost of funds on average interest-bearing liabilities was 1.66%, and the cost of average interest-bearing deposits was 1.59%. In comparison, 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 average interest-bearing deposits was 0.37%. The increase in the yield on average interest-bearing liabilities resulted mainly from higher interest rates on deposits driven by the higher repricing of maturing time deposits in the fourth quarter. The increase in the yield on average interest-earning assets resulted mainly from higher interest rates on loans due to the increasing 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 3.40% for the quarter ended December 31, 2022, compared to 3.11% for the same quarter a year ago.

Provision/(reversal) for credit losses

The Company recorded a provision for credit losses of $1.4 million in the fourth quarter of 2022 compared to $2.0 million in the third quarter of 2022 and $3.5 million in the fourth quarter of 2021. As of December 31, 2022, the allowance for loan losses decreased by $2.3 million to $146.5 million, or 0.80% of gross loans, compared to $148.8 million, or 0.82% of gross loans as of September 30, 2022.

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


Three months ended
Year ended December 31,

December 31, 2022
September 30, 2022
December 31, 2021

 

2022


 

2021


(In thousands) (Unaudited)
Charge-offs:








Commercial loans

$

860


$

2,091


$

552


$

3,222


$

20,051

Real estate loans (1)

 

2,131


 

137


 


 

2,268


 

3

Total charge-offs

 

2,991


 

2,228


 

552


 

5,490


 

20,054

Recoveries:








Commercial loans

 

356


 

1,576


 

160


 

2,465


 

1,706

Construction loans

 


 


 


 

6


 

76

Real estate loans (1)

 

99


 

95


 

104


 

434


 

661

Total recoveries

 

455


 

1,671


 

264


 

2,905


 

2,443

Net charge-offs/(recoveries)

$

2,536


$

557


$

288


$

2,585


$

17,611










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

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 $12.1 million for the fourth quarter of 2022, a decrease of $7.7 million, or 38.9%, compared to $19.8 million for the fourth quarter of 2021. The decrease was primarily due to an increase of $3.2 million in loss on equity securities, a decrease of $3.1 million in gain on distribution from venture capital investments, and a decrease of $1.7 million in derivative fees, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense increased $8.0 million, or 10.9%, to $81.2 million in the fourth quarter of 2022 compared to $73.2 million in the same quarter a year ago. The increase in non-interest expense in the fourth quarter of 2022 was primarily due to an increase of $3.8 million in amortization expense of investments in low-income housing and alternative energy partnerships, an increase of $1.2 million in salaries and employee benefits and an increase of $1.0 million in amortization of core deposit intangibles, when compared to the fourth quarter of 2021. 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 38.0% in the fourth quarter of 2022 compared to 41.8% for the same quarter a year ago.

Income taxes

The effective tax rate for the fourth quarter of 2022 was 25.7% compared to 23.6% for the fourth quarter of 2021. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $18.3 billion as of December 31, 2022, an increase of $2.0 billion, or 12.3%, from $16.3 billion as of December 31, 2021. The increase was primarily due to increases of $1.1 billion, or 25.6%, in residential mortgage loans, which included $548.3 million from the acquisition of certain HSBC West Coast branches, $650.4 million, or 8.0%, in commercial mortgage loans, $336.4 million, or 11.3%, in commercial loans, offset by a decrease of $94.9 million, or 22.6%, in home equity loans and $51.7 million, or 8.5%, in real estate construction loans. For the fourth quarter of 2022, gross loans, increased by $147.2 million, or 3.6% annualized.

The loan balances and composition as of December 31, 2022, compared to September 30, 2022 and December 31, 2021, are presented below:


December 31, 2022
September 30, 2022
December 31, 2021

(In thousands) (Unaudited)
Commercial loans

$

3,316,187

 


$

3,361,523

 


$

2,891,914

 

Paycheck protection program loans

 

2,591

 


 

5,914

 


 

90,485

 

Residential mortgage loans

 

5,252,952

 


 

5,130,650

 


 

4,182,006

 

Commercial mortgage loans

 

8,793,685

 


 

8,677,733

 


 

8,143,272

 

Equity lines

 

324,548

 


 

350,448

 


 

419,487

 

Real estate construction loans

 

559,372

 


 

573,421

 


 

611,031

 

Installment and other loans

 

4,689

 


 

7,114

 


 

4,284

 

Gross loans

$

18,254,024

 


$

18,106,803

 


$

16,342,479

 






 
Allowance for loan losses

 

(146,485

)


 

(148,817

)


 

(136,157

)

Unamortized deferred loan fees

 

(6,641

)


 

(6,936

)


 

(4,321

)

Total loans, net

$

18,100,898

 


$

17,951,050

 


$

16,202,001

 


Total deposits were $18.5 billion as of December 31, 2022, an increase of $446.4 million, or 2.5%, from $18.1 billion as of December 31, 2021.

The deposit balances and composition as of December 31, 2022, compared to September 30, 2022 and December 31, 2021, are presented below:


December 31, 2022


September 30, 2022


December 31, 2021


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

$

4,168,989


$

4,398,152


$

4,492,054

NOW deposits

 

2,509,736


 

2,570,036


 

2,522,442

Money market deposits

 

3,812,724


 

4,935,266


 

4,611,579

Savings deposits

 

1,000,460


 

1,128,823


 

915,515

Time deposits

 

7,013,370


 

5,543,474


 

5,517,252

Total deposits

$

18,505,279


$

18,575,751


$

18,058,842

ASSET QUALITY REVIEW

As of December 31, 2022, total non-accrual loans were $68.9 million, an increase of $3.0 million, or 4.6%, from $65.8 million as of December 31, 2021, and an increase of $729 thousand, or 1.1%, from $68.1 million as of September 30, 2022.

The allowance for loan losses was $146.5 million and the allowance for off-balance sheet unfunded credit commitments was $8.7 million as of December 31, 2022. 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 0.80% of period-end gross loans, and 182.12% of non-performing loans as of December 31, 2022. The comparable ratios were 0.83% of period-end gross loans, and 202.36% of non-performing loans as of December 31, 2021.

The changes in non-performing assets and troubled debt restructurings as of December 31, 2022, compared to December 31, 2021 and September 30, 2022, are presented below:

(Dollars in thousands) (Unaudited) December 31, 2022
December 31, 2021
%
Change

September 30, 2022
%
Change
Non-performing assets








Accruing loans past due 90 days or more

$

11,580

 


$

1,439

 


705

 


$

3,172

 


265

 

Non-accrual loans:








Construction loans

 

 


 

 


 


 

 


 

Commercial mortgage loans

 

34,096

 


 

38,173

 


(11

)


 

26,911

 


27

 

Commercial loans

 

25,772

 


 

16,558

 


56

 


 

26,604

 


(3

)

Residential mortgage loans

 

8,978

 


 

11,115

 


(19

)


 

14,601

 


(39

)

Installment and other loans

8









9



(11

)
Total non-accrual loans:

$

68,854

 


$

65,846

 


5

 


$

68,125

 


1

 

Total non-performing loans

 

80,434

 


 

67,285

 


20

 


 

71,297

 


13

 

Other real estate owned

 

4,067

 


 

4,368

 


(7

)


 

4,067

 


 

Total non-performing assets

$

84,501

 


$

71,653

 


18

 


$

75,364

 


12

 

Accruing troubled debt restructurings (TDRs)

$

15,145

 


$

12,837

 


18

 


$

15,208

 


(0

)










 
Allowance for loan losses

$

146,485

 


$

136,157

 


8

 


$

148,817

 


(2

)

Total gross loans outstanding, at period-end

$

18,254,024

 


$

16,342,479

 


12

 


$

18,106,803

 


1

 










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

 

182.12

%


 

202.36

%




 

208.73

%



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

 

0.80

%


 

0.83

%




 

0.82

%



The ratio of non-performing assets to total assets was 0.4% as of December 31, 2022, compared to 0.3% as of December 31, 2021. Total non-performing assets increased $12.8 million, or 17.9%, to $84.5 million as of December 31, 2022, compared to $71.7 million as of December 31, 2021, primarily due to an increase of $10.1 million, or 704.7%, in accruing loans past due 90 days or more and an increase of $3.0 million, or 4.6%, in non-accrual loans.


CAPITAL ADEQUACY REVIEW

As of December 31, 2022, the Company’s Tier 1 risk-based capital ratio of 12.19%, total risk-based capital ratio of 13.71%, and Tier 1 leverage capital ratio of 10.08%, 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, 2021, the Company’s Tier 1 risk-based capital ratio was 12.80%, total risk-based capital ratio was 14.41%, and Tier 1 leverage capital ratio was 10.40%.

FULL YEAR REVIEW

Net income for the year ended December 31, 2022, was $360.6 million, an increase of $62.3 million, or 20.9%, compared to net income of $298.3 million for the year ended December 31, 2021. Diluted earnings per share for the year ended December 31, 2022 was $4.83 compared to $3.80 per share for the year ended December 31, 2021. The net interest margin for the year ended December 31, 2022 was 3.63% compared to 3.22% for the year ended December 31, 2021.

Return on average stockholders’ equity was 14.70% and return on average assets was 1.69% for the year ended December 31, 2022, compared to a return on average stockholders’ equity of 12.11% and a return on average assets of 1.52% for the year ended December 31, 2021. The efficiency ratio for the year ended December 31, 2022, was 38.38% compared to 43.92% for the year ended December 31, 2021.


CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its fourth quarter and year-end 2022 financial results this afternoon, Wednesday, January 25, 2023, at 3:00 p.m., Pacific Time. Analysts and investors may dial in and participate in the question-and-answer session. To access the call, please dial 1-833-816-1377 and enter Conference ID 10174540. 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 are 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, 2021 (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, 2022
September 30, 2022
December 31, 2021

 

2022

 


 

2021

 











 
FINANCIAL PERFORMANCE









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

$

201,814

 


$

197,529

 


$

155,452

 


$

733,697

 


$

597,755

 

Provision/(reversal) for credit losses

 

1,400

 


 

2,000

 


 

3,500

 


 

14,543

 


 

(16,008

)

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

 

200,414

 


 

195,529

 


 

151,952

 


 

719,154

 


 

613,763

 

Non-interest income

 

12,088

 


 

9,876

 


 

19,804

 


 

56,814

 


 

54,603

 

Non-interest expense

 

81,224

 


 

75,388

 


 

73,197

 


 

303,432

 


 

286,523

 

Income before income tax expense

 

131,278

 


 

130,017

 


 

98,559

 


 

472,536

 


 

381,843

 

Income tax expense

 

33,677

 


 

30,982

 


 

23,234

 


 

111,894

 


 

83,539

 

Net income

$

97,601

 


$

99,035

 


$

75,325

 


$

360,642

 


$

298,304

 











 
Net income per common share









Basic

$

1.33

 


$

1.34

*


$

0.98

 


$

4.85

 


$

3.81

 

Diluted

$

1.33

 


$

1.33

*


$

0.98

 


$

4.83

 


$

3.80

 











 
Cash dividends paid per common share

$

0.34

 


$

0.34

 


$

0.34

 


$

1.36

 


$

1.27

 











 










 
SELECTED RATIOS









Return on average assets

 

1.77

%


 

1.81

%


 

1.48

%


 

1.69

%


 

1.52

%

Return on average total stockholders’ equity

 

15.73

%


 

15.94

%


 

12.12

%


 

14.70

%


 

12.11

%

Efficiency ratio

 

37.97

%


 

36.35

%


 

41.77

%


 

38.38

%


 

43.92

%

Dividend payout ratio

 

25.45

%


 

25.30

%


 

34.50

%


 

27.99

%


 

33.30

%











 










 
YIELD ANALYSIS (Fully taxable equivalent)









Total interest-earning assets

 

5.06

%


 

4.38

%


 

3.52

%


 

4.21

%


 

3.59

%

Total interest-bearing liabilities

 

1.66

%


 

0.78

%


 

0.41

%


 

0.82

%


 

0.52

%

Net interest spread

 

3.40

%


 

3.60

%


 

3.11

%


 

3.39

%


 

3.07

%

Net interest margin

 

3.87

%


 

3.83

%


 

3.23

%


 

3.63

%


 

3.22

%











 










 
CAPITAL RATIOS
December 31, 2022
September 30, 2022
December 31, 2021



Tier 1 risk-based capital ratio

 

12.19

%


 

12.06

%


 

12.80

%





Total risk-based capital ratio

 

13.71

%


 

13.59

%


 

14.41

%





Tier 1 leverage capital ratio

 

10.08

%


 

10.02

%


 

10.40

%







.


.
.











 
*Net income per common share previously reported for the third quarter of 2022 has been corrected. The correction decreased basic and diluted net income per common share by $.01 and $.02, respectively.

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)







 
(In thousands, except share and per share data)
December 31, 2022
September 30, 2022
December 31, 2021






 
Assets





Cash and due from banks

$

195,440

 


$

200,051

 


$

134,141

 

Short-term investments and interest bearing deposits

 

958,731

 


 

1,063,294

 


 

2,315,563

 

Securities available-for-sale (amortized cost of $1,622,173 at December 31, 2022, $1,577,311 at September 30, 2022 and $1,126,867 at December 31, 2021)






 

1,473,348

 


 

1,414,411

 


 

1,127,309

 

Loans

 

18,254,024

 


 

18,106,803

 


 

16,342,479

 

Less: Allowance for loan losses

 

(146,485

)


 

(148,817

)


 

(136,157

)

Unamortized deferred loan fees, net

 

(6,641

)


 

(6,936

)


 

(4,321

)

Loans, net

 

18,100,898

 


 

17,951,050

 


 

16,202,001

 

Equity securities

 

22,158

 


 

23,123

 


 

22,319

 

Federal Home Loan Bank stock

 

17,250

 


 

17,250

 


 

17,250

 

Other real estate owned, net

 

4,067

 


 

4,067

 


 

4,368

 

Affordable housing investments and alternative energy partnerships, net

 

327,128

 


 

325,439

 


 

299,211

 

Premises and equipment, net

 

94,776

 


 

96,419

 


 

99,402

 

Customers’ liability on acceptances

 

2,372

 


 

6,899

 


 

8,112

 

Accrued interest receivable

 

82,428

 


 

71,177

 


 

56,994

 

Goodwill

 

375,696

 


 

375,696

 


 

372,189

 

Other intangible assets, net

 

5,757

 


 

6,948

 


 

4,627

 

Right-of-use assets- operating leases

 

29,627

 


 

30,679

 


 

27,834

 

Other assets

 

296,077

 


 

303,628

 


 

195,403

 

Total assets

$

21,985,753

 


$

21,890,131

 


$

20,886,723

 







 
Liabilities and Stockholders’ Equity





Deposits





Non-interest-bearing demand deposits

$

4,168,989

 


$

4,398,152

 


$

4,492,054

 

Interest-bearing deposits:





NOW deposits

 

2,509,736

 


 

2,570,036

 


 

2,522,442

 

Money market deposits

 

3,812,724

 


 

4,935,266

 


 

4,611,579

 

Savings deposits

 

1,000,460

 


 

1,128,823

 


 

915,515

 

Time deposits

 

7,013,370

 


 

5,543,474

 


 

5,517,252

 

Total deposits

 

18,505,279

 


 

18,575,751

 


 

18,058,842

 







 
Advances from the Federal Home Loan Bank

 

485,000

 


 

360,000

 


 

20,000

 

Other borrowings for affordable housing investments

 

22,600

 


 

22,651

 


 

23,145

 

Long-term debt

 

119,136

 


 

119,136

 


 

119,136

 

Acceptances outstanding

 

2,372

 


 

6,899

 


 

8,112

 

Lease liabilities - operating leases

 

32,518

 


 

33,931

 


 

30,694

 

Other liabilities

 

344,808

 


 

352,204

 


 

180,543

 

Total liabilities

 

19,511,713

 


 

19,470,572

 


 

18,440,472

 

Stockholders' equity

 

2,474,040

 


 

2,419,559

 


 

2,446,251

 

Total liabilities and equity

$

21,985,753

 


$

21,890,131

 


$

20,886,723

 







 
Book value per common share

$

34.01

 


$

32.96

 


$

32.29

 

Number of common shares outstanding

 

72,742,151

 


 

73,411,960

 


 

75,750,862

 


CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)





 


Three months ended
Year ended December 31,


December 31, 2022 September 30, 2022
December 31, 2021

 

2022

 

2021

 



(In thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME







Loan receivable, including loan fees

$

243,324

 

$

211,541

 


$

164,062


$

801,981

$

649,224

 

Investment securities

 

10,181

 

 

7,483

 


 

4,188


 

28,240

 

14,151

 

Federal Home Loan Bank stock

 

329

 

 

258

 


 

261


 

1,103

 

991

 

Deposits with banks

 

9,954

 

 

6,732

 


 

678


 

19,957

 

2,145

 

Total interest and dividend income

 

263,788

 

 

226,014

 


 

169,189


 

851,281

 

666,511

 









 
INTEREST EXPENSE







Time deposits

 

34,352

 

 

10,218

 


 

7,179


 

56,354

 

40,542

 

Other deposits

 

23,048

 

 

13,871

 


 

4,957


 

48,942

 

21,259

 

Advances from Federal Home Loan Bank

 

2,484

 

 

2,941

 


 

146


 

5,880

 

1,182

 

Long-term debt

 

1,228

 

 

1,455

 


 

1,455


 

5,546

 

5,773

 

Short-term borrowings

 

862

 

 

 


 


 

862

 

 

Total interest expense

 

61,974

 

 

28,485

 


 

13,737


 

117,584

 

68,756

 









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

 

201,814

 

 

197,529

 


 

155,452


 

733,697

 

597,755

 

Provision/(reversal) for credit losses

 

1,400

 

 

2,000

 


 

3,500


 

14,543

 

(16,008

)

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

 

200,414

 

 

195,529

 


 

151,952


 

719,154

 

613,763

 









 
NON-INTEREST INCOME







Net (losses)/gains from equity securities

 

(966

)

 

(3,661

)


 

2,202


 

392

 

(1,426

)

Securities gains, net

 

 

 

 


 


 

 

853

 

Letters of credit commissions

 

1,584

 

 

1,609

 


 

1,867


 

6,351

 

7,103

 

Depository service fees

 

1,530

 

 

1,690

 


 

1,477


 

6,523

 

5,584

 

Wealth management fees

 

3,942

 

 

4,184

 


 

3,982


 

16,436

 

15,056

 

Other operating income

 

5,998

 

 

6,054

 


 

10,276


 

27,112

 

27,433

 

Total non-interest income

 

12,088

 

 

9,876

 


 

19,804


 

56,814

 

54,603

 









 
NON-INTEREST EXPENSE







Salaries and employee benefits

 

35,093

 

 

34,677

 


 

33,878


 

142,546

 

132,795

 

Occupancy expense

 

5,658

 

 

5,975

 


 

5,176


 

22,808

 

20,318

 

Computer and equipment expense

 

3,842

 

 

3,509

 


 

3,456


 

13,604

 

13,549

 

Professional services expense

 

7,529

 

 

6,337

 


 

6,968


 

28,267

 

23,666

 

Data processing service expense

 

3,368

 

 

3,484

 


 

3,185


 

13,181

 

13,607

 

FDIC and State assessments

 

2,038

 

 

2,003

 


 

1,937


 

8,037

 

7,132

 

Marketing expense

 

2,171

 

 

2,005

 


 

1,643


 

6,863

 

6,913

 

Other real estate owned expense/(income)

 

34

 

 

55

 


 

146


 

127

 

343

 

Amortization of investments in low income housing and
alternative energy partnerships

 

14,594

 

 

11,949

 


 

10,784


 

42,065

 

45,447

 

Amortization of core deposit intangibles

 

1,168

 

 

250

 


 

172


 

1,892

 

687

 

Cost associated with debt redemption

 

 

 

 


 


 

 

732

 

Acquisition, integration and reorganization costs

 

 

 

59

 


 

949


 

4,086

 

1,425

 

Other operating expense

 

5,729

 

 

5,085

 


 

4,903


 

19,956

 

19,909

 

Total non-interest expense

 

81,224

 

 

75,388

 


 

73,197


 

303,432

 

286,523

 









 
Income before income tax expense

 

131,278

 

 

130,017

 


 

98,559


 

472,536

 

381,843

 

Income tax expense

 

33,677

 

 

30,982

 


 

23,234


 

111,894

 

83,539

 

Net income

$

97,601

 

$

99,035

 


$

75,325


$

360,642

$

298,304

 

Net income per common share:







Basic

$

1.33

 

$

1.34

*


$

0.98


$

4.85

$

3.81

 

Diluted

$

1.33

 

$

1.33

*


$

0.98


$

4.83

$

3.80

 









 
Cash dividends paid per common share

$

0.34

 

$

0.34

 


$

0.34


$

1.36

$

1.27

 

Basic average common shares outstanding

 

73,130,500

 

 

73,956,052

*


 

76,566,481


 

74,337,265

 

78,268,369

 

Diluted average common shares outstanding

 

73,467,401

 

 

74,242,052

*


 

76,914,817


 

74,664,735

 

78,570,638

 









 
*Net income per common share, basic and diluted average shares outstanding previously reported for the third quarter of 2022 has been corrected. The correction decreased basic and diluted net income per common share by $.01 and $.02, respectively and increased basic and diluted average common shares by 797,956 shares.

CATHAY GENERAL BANCORP

AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)



 

Three months ended
(In thousands) December 31, 2022
September 30, 2022
December 31, 2021
Interest-earning assets Average
Balance
Average
Yield/Rate (1)

Average
Balance
Average
Yield/Rate (1)

Average
Balance
Average
Yield/Rate (1)
Loans (1)

$

18,117,692

5.33

%


$

17,923,495

4.68

%


$

16,130,896

4.04

%

Taxable investment securities

 

1,493,472

2.70

%


 

1,364,013

2.18

%


 

1,152,596

1.44

%

FHLB stock

 

17,250

7.57

%


 

18,756

5.46

%


 

17,250

6.00

%

Deposits with banks

 

1,052,161

3.75

%


 

1,178,261

2.27

%


 

1,779,275

0.15

%

Total interest-earning assets

$

20,680,575

5.06

%


$

20,484,525

4.38

%


$

19,080,017

3.52

%









 
Interest-bearing liabilities







Interest-bearing demand deposits

$

2,514,877

0.78

%


$

2,508,526

0.30

%


$

2,217,341

0.08

%

Money market deposits

 

4,350,804

1.63

%


 

5,153,566

0.90

%


 

4,393,816

0.39

%

Savings deposits

 

1,064,019

0.09

%


 

1,151,126

0.07

%


 

932,678

0.08

%

Time deposits

 

6,403,334

2.13

%


 

5,013,213

0.81

%


 

5,604,073

0.51

%

Total interest-bearing deposits

$

14,333,034

1.59

%


$

13,826,431

0.69

%


$

13,147,908

0.37

%

Other borrowed funds

 

358,840

3.70

%


 

498,234

2.34

%


 

43,186

1.34

%

Long-term debt

 

119,136

4.09

%


 

119,136

4.85

%


 

119,136

4.85

%

Total interest-bearing liabilities

 

14,811,010

1.66

%


 

14,443,801

0.78

%


 

13,310,230

0.41

%









 
Non-interest-bearing demand deposits

 

4,337,065



 

4,456,214



 

4,162,906










 
Total deposits and other borrowed funds

$

19,148,075



$

18,900,015



$

17,473,136










 
Total average assets

$

21,917,339



$

21,658,860



$

20,176,429


Total average equity

$

2,461,524



$

2,465,192



$

2,466,363










 

Year ended


(In thousands) December 31, 2022
December 31, 2021


Interest-earning assets Average
Balance
Average
Yield/Rate (1)

Average
Balance
Average
Yield/Rate (1)



Loans (1)

$

17,631,943

4.55

%


$

15,827,550

4.10

%




Taxable investment securities

 

1,321,346

2.14

%


 

1,046,187

1.35

%




FHLB stock

 

17,629

6.26

%


 

17,250

5.74

%




Deposits with banks

 

1,261,833

1.58

%


 

1,649,564

0.13

%




Total interest-earning assets

$

20,232,751

4.21

%


$

18,540,551

3.59

%












 
Interest-bearing liabilities







Interest-bearing demand deposits

$

2,471,256

0.33

%


$

2,047,177

0.11

%




Money market deposits

 

4,902,357

0.81

%


 

4,034,246

0.45

%




Savings deposits

 

1,118,967

0.08

%


 

897,663

0.09

%




Time deposits

 

5,398,808

1.04

%


 

5,979,191

0.68

%




Total interest-bearing deposits

$

13,891,388

0.76

%


$

12,958,277

0.48

%




Other borrowed funds

 

247,276

2.73

%


 

75,516

1.57

%




Long-term debt

 

119,136

4.66

%


 

119,136

4.85

%




Total interest-bearing liabilities

 

14,257,800

0.82

%


 

13,152,929

0.52

%












 
Non-interest-bearing demand deposits

 

4,386,526



 

3,751,626





Total deposits and other borrowed funds

$

18,644,326



$

16,904,555













 
Total average assets

$

21,383,739



$

19,591,537





Total average equity

$

2,453,391



$

2,463,021













 
(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.





 
(In thousands, except share and per share data)

December 31, 2022


September 30, 2022


December 31, 2021















 
Stockholders' equity (a)

$

2,474,040

 


$

2,419,559

 


$

2,446,251

 





Less: Goodwill

 

(375,696

)


 

(375,696

)


 

(372,189

)





Other intangible assets (1)

 

(5,757

)


 

(6,948

)


 

(4,627

)





Tangible equity (b)

$

2,092,587

 


$

2,036,915

 


$

2,069,435

 















 
Total assets (c)

$

21,985,753

 


$

21,890,131

 


$

20,886,723

 





Less: Goodwill

 

(375,696

)


 

(375,696

)


 

(372,189

)





Other intangible assets (1)

 

(5,757

)


 

(6,948

)


 

(4,627

)





Tangible assets (d)

$

21,604,300

 


$

21,507,487

 


$

20,509,907

 















 
Number of common shares outstanding (e)

 

72,742,151

 


 

73,411,960

 


 

75,750,862

 















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

 

11.25

%


 

11.05

%


 

11.71

%





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

 

9.69

%


 

9.47

%


 

10.09

%





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

$

28.77

 


$

27.75

 


$

27.32

 















 


Three Months Ended
Twelve Months Ended
(In thousands, except share and per share data)

December 31, 2022

 

September 30, 2022

 

December 31, 2021

 

December 31, 2022


December 31, 2021

Net Income

$

97,601

 


$

99,035

 


$

75,325

 


$

360,642

 


$

298,304

 

Add: Amortization of other intangibles

 

1,191

 


 

250

 


 

203

 


 

2,007

 


 

828

 

Tax effect of amortization adjustments (2)

 

(353

)


 

(74

)


 

(60

)


 

(595

)


 

(246

)

Tangible net income (f)

$

98,439

 


$

99,211

 


$

75,468

 


$

362,054

 


$

298,886

 











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

 

18.82

%


 

19.48

%


 

14.59

%


 

17.30

%


 

14.44

%











 
(1) Includes core deposit intangibles and mortgage servicing








(2) Applied the statutory rate of 29.65%.









(3) Annualized









 

Contacts

Heng W. Chen
(626) 279-3652

EX-99.2 3 a53290481ex_992.htm EXHIBIT 99.2
Exhibit 99.2
 Financial Earnings   Results  Fourth Quarter and Full Year 2022  January 25, 2023 
 

 Forward Looking Statements  This presentation contains forward-looking statements about Cathay General Bancorp and its subsidiaries (collectively referred to herein as the “Company,” “we,” “us,” or “our”) within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements in these provisions. Statements that are not historical or current facts, including statements about beliefs, expectations and future economic performance, are “forward-looking statements” and are based on the information available to, and estimates, beliefs, projections, and assumptions made by, management as of the date on which such statements are first made. Forward-looking statements are not guarantees of future performance and are subject to inherent risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. These risks and uncertainties include, but are not limited to: 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; the impact on our business, operations, financial condition, liquidity, results of operations, prospects and trading prices of our shares arising out of the COVID-19 pandemic; 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 supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation; 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 generate anticipated returns from our investments and/or financings in certain tax advantaged-projects; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters, public health crises (including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic) and geopolitical events; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to the expanding use of technology in banking; adverse results in legal proceedings; changes in accounting standards or tax laws and regulations; market disruption and volatility; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; capital level requirements and successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; and the soundness of other financial institutions.  For a discussion of these and other risks that may cause actual results to differ from expectations, please see our Annual Report on Form 10-K (at Item 1A in particular) for the year ended December 31, 2021 and all subsequent reports and filings we make with the Securities and Exchange Commission under the applicable provisions of the Securities Exchange Act of 1934. 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 first made and, except as required by law, we undertake no obligation to update or review any forward-looking statements to reflect circumstances, developments or events occurring after the date on which the statement is first made or to reflect the occurrence of unanticipated events.  2 
 

 Financial Highlights 4Q 2022  Quarterly results ending   December 31, 2022  Net Income  $97.6 million  Diluted EPS  $1.33   Total Revenue  $213.9 million  Total Loans  $18.3 billion  Total Deposits  $18.5 billion  Efficiency Ratio  37.97%  3  * Refer to GAAP to non-GAAP reconciliation in Appendix. 
 

 Summary Highlights: 4Q and Full Year 2022 Results  4  Note: Information as of 12.31.22 and 9.30.22 are unaudited.  * Gross Loans, net of fees 
 

 Summary Balance Sheets  5  Note: Information as of 12.31.22 and 9.30.22 is unaudited. 
 

 Loan Composition  Total Loan Portfolio  $18.3 billion*   as of 12.31.22  Total CRE $8.8 billion  Residential Mortgage** $5.6 billion  C&I Loans $3.3 billion   Construction Loans $0.6 billion  Paycheck Protection Program $3 million  6  * Includes Day 1 loan balance of $646 million acquired through the HSBC Bank USA, N.A. West Coast mass retail banking operations on February 7, 2022.  ** Residential Mortgage includes equity lines, installment and other loans. 
 

 Commercial Real Estate Portfolio  Total CRE  $8.8 billion   48% of total loans  7  * Residential Mortgage includes equity lines, installment and other loans. 
 

 LTV & Size by Property Type  Commercial Real Estate Portfolio  8 
 

 Selected CRE and Construction Loan Portfolios  weighted avg. LTV 54%  weighted avg. LTV 50%  weighted avg. LTV 56%  9 
 

 Geographic Distribution of Residential Mortgage  Residential Mortgage Portfolio  10  * Residential Mortgage includes equity lines, installment and other loans. 
 

 Allowance for Loan and Lease Losses (ALLL)  11 
 

 Asset Quality Metrics  Allowance coverage of loans HFI: 0.80% as of 12/31/22 vs.0.82% as of 9/30/22.  Nonaccrual loans/loans HFI: 0.38% as of 12/31/22 and 9/30/22 vs. 0.40% as of 12/31/21.   Classified Loans are loans classified as substandard and doubtful.  12  Non-Performing Assets (NPA) = Non-accrual Loans + OREO 
 

 Deposit Mix  Total Deposits  $18.5 billion*   as of 12.31.22  13  * Includes Day 1 deposit balance of $575 million acquired through the HSBC Bank USA, N.A. West Coast mass retail banking operations on February 7, 2022. 
 

 Summary Income Statements  14  Note: Information for quarter ending 12.31.22 and 9.30.22 is unaudited. 
 

 Loan Yields, Deposit Costs and Net Interest Margins  15 
 

 Non-Interest Income  16  $ in millions  Non-Interest Income*  * Non-interest income excludes net gains/(losses) from equity securities.  
 

 Operating Expense & Efficiency  17 
 

 Strong Capital Ratios  Capital Ratio well above regulatory standards that continues to place Cathay in the “well capitalized” category, calculated under the Basel III capital rules.   Book Value Per Common Share is $34.01 as of 12.31.22: +3.19% compared to 9.30.22 and +5.33% YoY.   Tangible Book Value* Per Common Share is $28.77 as of 12.31.22: +3.68% compared to 9.30.22 and +5.31% YoY.   Capital Return on Shareholder  common stock dividend: $0.34/share quarterly, or $1.36/share annualized.   stock buyback: purchased 693,000 shares at avg. cost of $45.52/sh. in fourth quarter.  18  * Refer to GAAP to non-GAAP reconciliation in Appendix. 
 

 Management Guidance Full Year 2023  19  Full Year 2023 Guidance  Compared with 2022 Actual  Full Year  2022 Actual  Loans, end of period   Estimated growth rate 3% to 5%  $18.3 billion  +11.7% YoY  Deposits  Estimated growth rate 3% to 5%  $18.5 billion  +2.5% YoY  Core Noninterest Expense  Estimated growth rate 3.5%   $255.3 million  +7.3% YoY  NIM  Estimated to range between 3.75% and 3.85%  3.63%  Tax Rate  Effective tax rate for 2023 estimated between 17.5% and 18.5%.  Solar amortization estimated to be $10 million for each of the first three quarters or 2023.  Effective tax rate for the full year was 23.68%.  Solar amortization year to date was $6.2 million.  The guidance provided above is based on a number of assumptions that management believes to be reasonable and reflects our expectations as of the date of this presentation. Actual results may differ materially from these estimates as a result of various factors, and we refer to the cautionary language regarding “forward-looking statements” included in this presentation when considering this information. 
 

 Appendix 
 

 We use certain non-GAAP financial measures to provide supplemental information regarding our 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, we have included them below for discussion.  Appendix: GAAP to Non-GAAP Reconciliation   Selected Consolidation Financial Information ($ in thousands) (unaudited)  21