Cathay General Bancorp Announces Fourth Quarter and Full Year 2022 Results
01/25/2023 - 04:30 PM
LOS ANGELES --(BUSINESS WIRE)--
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 $1.33 $360.6 million $4.83 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 $4.83
Quarterly earnings per share increased 35.7% compared to same quarter in 2021.
Total loans increased $1.4 billion 8.3% , excluding HSBC purchased loans of $550.5 million
“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 $141.3 million 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 $22.3 million 29.6% , compared to net income of $75.3 million December 31, 2022 , increased by 35.7% , or $1.33 $0.98
Net interest income before provision for credit losses
Net interest income before provision for credit losses increased $46.3 million 29.8% , to $201.8 million $155.5 million
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 $2.0 million $3.5 million December 31, 2022 , the allowance for loan losses decreased by $2.3 million $146.5 million 0.80% of gross loans, compared to $148.8 million 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 $7.7 million 38.9% , compared to $19.8 million $3.2 million $3.1 million $1.7 million
Non-interest expense
Non-interest expense increased $8.0 million 10.9% , to $81.2 million $73.2 million $3.8 million $1.2 million $1.0 million 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 December 31, 2022 , an increase of $2.0 billion 12.3% , from $16.3 billion December 31, 2021 . The increase was primarily due to increases of $1.1 billion 25.6% , in residential mortgage loans, which included $548.3 million HSBC West Coast branches, $650.4 million 8.0% , in commercial mortgage loans, $336.4 million 11.3% , in commercial loans, offset by a decrease of $94.9 million 22.6% , in home equity loans and $51.7 million 8.5% , in real estate construction loans. For the fourth quarter of 2022, gross loans, increased by $147.2 million 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 December 31, 2022 , an increase of $446.4 million 2.5% , from $18.1 billion 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 $3.0 million 4.6% , from $65.8 million December 31, 2021 , and an increase of $729 thousand 1.1% , from $68.1 million September 30, 2022 .
The allowance for loan losses was $146.5 million $8.7 million 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 %
September 30, 2022 %
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 17.9% , to $84.5 million December 31, 2022 , compared to $71.7 million December 31, 2021 , primarily due to an increase of $10.1 million 704.7% , in accruing loans past due 90 days or more and an increase of $3.0 million 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 $62.3 million 20.9% , compared to net income of $298.3 million December 31, 2021 . Diluted earnings per share for the year ended December 31, 2022 was $4.83 $3.80 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 December 31, 2022 , $1,577,311 September 30, 2022 and $1,126,867 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
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
Average(1)
Average
Average(1)
Average
Average(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
Average(1)
Average
Average(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
View source version on businesswire.com : https://www.businesswire.com/news/home/20230125005217/en/
Heng W. Chen
Source: Cathay General Bancorp
