Cathay General Bancorp Announces Third Quarter 2023 Results

Rhea-AI Summary

Cathay General Bancorp reports net income of $82.4 million for Q3 2023

Positive

• Total deposits increased by $538.6 million, or 11.6% annualized, to $19.6 billion in Q3 2023
• Total gross loans increased by $71.0 million, or 1.6% annualized, to $19.0 billion in Q3 2023

Negative

• Diluted earnings per share decreased to $1.13 for Q3 2023 compared to $1.28 for Q2 2023
• Net interest margin declined slightly from 3.44% in Q2 to 3.38% in Q3

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 ended September 30, 2023. The Company reported net income of $82.4 million, or $1.13 per share, for the third quarter of 2023.

FINANCIAL PERFORMANCE

	Three months ended
(unaudited)	September 30, 2023		June 30, 2023		September 30, 2022
Net income	$ 82.4 million		$ 93.2 million		$99.0 million
Basic earnings per common share	$1.14		$1.29		$1.34
Diluted earnings per common share	$1.13		$1.28		$1.33
Return on average assets	1.42%		1.67%		1.81%
Return on average total stockholders' equity	12.36%		14.47%		15.94%
Efficiency ratio	48.57%		45.36%		36.35%

THIRD QUARTER HIGHLIGHTS

• Total deposits increased by $538.6 million, or 11.6% annualized, to $19.6 billion in the third quarter of 2023.
• Total gross loans increased by $71.0 million, or 1.6% annualized, to $19.0 billion in the third quarter of 2023.
• Diluted earnings per share decreased to $1.13 for the third quarter of 2023 compared to $1.28 for the second quarter of 2023 due in part to changes in equity securities valuations.
• Our net interest margin declined slightly from 3.44% in the second quarter to 3.38% in the third quarter.

“For the third quarter of 2023, our total deposits increased by $538.6 million or 11.6% annualized to $19.6 billion. Our net interest margin declined slightly from 3.44% in the second quarter to 3.38% in the third quarter,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW
THIRD QUARTER 2023 COMPARED TO THE SECOND QUARTER 2023

Net income for the quarter ended September 30, 2023 was $82.4 million, a decrease of $10.8 million, or 11.6%, compared to net income of $93.2 million for the second quarter of 2023. Diluted earnings per share for the third quarter of 2023 was $1.13 per share compared to $1.28 per share for the second quarter of 2023. Net income for the third quarter included a $6.2 million unrealized loss on equity securities or $0.06 per diluted share, in the third quarter of 2023 compared to a $10.7 million unrealized gain on equity securities, or $0.10 per diluted share, for the second quarter of 2023.

Return on average stockholders’ equity was 12.36% and return on average assets was 1.42% for the quarter ended September 30, 2023, compared to a return on average stockholders’ equity of 14.47% and a return on average assets of 1.67% in the second quarter of 2023.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $4.1 million, or 2.3%, to $185.6 million during the third quarter of 2023, compared to $181.5 million in the second quarter of 2023. The increase was due primarily to an increase in interest income from loans and securities, partially offset by an increase in deposit interest expense.

The net interest margin was 3.38% for the third quarter of 2023 compared to 3.44% for the second quarter of 2023.

For the third quarter of 2023, the yield on average interest-earning assets was 5.89%, the cost of funds on average interest-bearing liabilities was 3.33%, and the cost of interest-bearing deposits was 3.23%. In comparison, for the second quarter of 2023, the yield on average interest-earning assets was 5.68%, the cost of funds on average interest-bearing liabilities was 2.99%, and the cost of interest-bearing deposits was 2.91%. The increase in the costs of 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 2.56% for the third quarter of 2023, compared to 2.69% for the second quarter of 2023.

Provision for credit losses

The Company recorded a provision for credit losses of $7.0 million in the third quarter of 2023 compared with $9.2 million in the second quarter of 2023. As of September 30, 2023, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, increased $312 thousand to $166.0 million, or 0.87% of gross loans, compared to $165.6 million, or 0.87% of gross loans, as of June 30, 2023.

	Three months ended						Nine months ended September 30,
	September 30, 2023		June 30, 2023		September 30, 2022		2023		2022
	(In thousands) (Unaudited)
Charge-offs:
Commercial loans	$ 6,254		$ 2,448		$ 2,091		$ 12,517		$ 2,362
Real estate loans (1)	1,221		34		137		5,341		138
Installment and other loans	8		1		—		15		—
Total charge-offs	7,483		2,483		2,228		17,873		2,500
Recoveries:
Commercial loans	611		442		1,576		1,564		2,109
Construction loans	—		—		—		—		6
Real estate loans (1)	261		61		95		2,862		336
Total recoveries	872		503		1,671		4,426		2,451
Net charge-offs/(recoveries)	$ 6,611		$ 1,980		$ 557		$ 13,447		$ 49

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

Non-interest income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wealth management fees, and other sources of fee income, was $7.8 million for the third quarter of 2023, a decrease of $15.3 million, or 66.2%, compared to $23.1 million for the second quarter of 2023. The decrease was primarily due to a $16.9 million decrease in unrealized gains on equity securities offset, in part, by a $1.5 million increase in commissions from wealth management, when compared to the second quarter of 2023.

Non-interest expense

Non-interest expense increased $1.2 million, or 1.3%, to $94.0 million in the third quarter of 2023 compared to $92.8 million in the second quarter of 2023. The increase in non-interest expense in the third quarter of 2023 was primarily due to an increase of $1.7 million in salaries and employee benefits, an increase of $1.4 million in amortization expense of investments in low-income housing and alternative energy partnerships, offset, in part, by a decrease of $1.0 million in professional services expenses when compared to the second quarter of 2023. 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 48.57% in the third quarter of 2023 compared to 45.36% for the second quarter of 2023.

Income taxes

The effective tax rate for the third quarter of 2023 was 10.95% compared to 9.20% for the second quarter of 2023. The effective tax rate includes the impact of alternative energy investments, including the impact of a new solar tax credit fund that closed in the second quarter of 2023, and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $19.02 billion as of September 30, 2023, an increase of $71.0 million, or 0.4%, from $18.95 billion as of June 30, 2023. The increase from June 30, 2023 was primarily due to an increase of $218.3 million, or 2.3%, in commercial mortgage loans, and an increase of $143.4 million, or 2.6%, in residential mortgage loans offset, in part, by a decrease of $227.3 million, or 6.8%, in commercial loans, a decrease of $47.4 million, or 9.1%, in real estate construction loans, and a decrease of $18.2 million, or 6.7%, in home equity loans.

The loan balances and composition as of September 30, 2023, compared to June 30, 2023, and September 30, 2022, are presented below:

	September 30, 2023		June 30, 2023		September 30, 2022
	(In thousands) (Unaudited)
Commercial loans	$ 3,090,609		$ 3,317,868		$ 3,367,437
Residential mortgage loans	5,685,844		5,542,466		5,130,650
Commercial mortgage loans	9,511,805		9,293,475		8,677,733
Equity lines	253,826		272,055		350,448
Real estate construction loans	474,294		521,673		573,421
Installment and other loans	7,444		5,257		7,114
Gross loans	$ 19,023,822		$ 18,952,794		$ 18,106,803
Allowance for loan losses	(154,619)		(155,109)		(148,817)
Unamortized deferred loan fees	(9,521)		(9,497)		(6,936)
Total loans, net	$ 18,859,682		$ 18,788,188		$ 17,951,050

Total deposits were $19.64 billion as of September 30, 2023, an increase of $538.6 million, or 2.8%, from $19.10 billion as of June 30, 2023.

The deposit balances and composition as of September 30, 2023, compared to June 30, 2023, and September 30, 2022, are presented below:

	September 30, 2023		June 30, 2023		September 30, 2022
	(In thousands) (Unaudited)
Non-interest-bearing demand deposits	$ 3,623,483		$ 3,561,237		$ 4,398,152
NOW deposits	2,454,878		2,404,470		2,570,036
Money market deposits	3,222,612		3,033,868		4,935,266
Savings deposits	1,131,352		1,131,602		1,128,823
Time deposits	9,203,263		8,965,826		5,543,474
Total deposits	$ 19,635,588		$ 19,097,003		$ 18,575,751

ASSET QUALITY REVIEW

As of September 30, 2023, total non-accrual loans were $77.3 million, an increase of $8.3 million, or 12.0%, from $69.0 million as of June 30, 2023.

The allowance for loan losses was $154.6 million and the allowance for off-balance sheet unfunded credit commitments was $11.4 million as of September 30, 2023. 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. We reported net charge-offs of $6.6 million for the three months ended September 30, 2023, of which $4.3 million had been reserved for in prior quarters. The allowance for loan losses represented 0.81% of period-end gross loans, and 195.09% of non-performing loans as of September 30, 2023. The comparable ratios were 0.82% of period-end gross loans, and 206.89% of non-performing loans as of June 30, 2023.

The changes in non-performing assets and modifications to borrowers experiencing financial difficulties as of September 30, 2023, compared to June 30, 2023, and September 30, 2022, are presented below:

(Dollars in thousands) (Unaudited)	September 30, 2023				June 30, 2023				% Change			September 30, 2022				% Change
Non-performing assets
Accruing loans past due 90 days or more	$	1,924			$	5,968			(68	)		$	3,172			(39	)
Non-accrual loans:
Construction loans		16,992				—			—				—			—
Commercial mortgage loans		32,539				39,558			(18	)			26,911			21
Commercial loans		14,661				17,574			(17	)			26,604			(45	)
Residential mortgage loans		13,138				11,872			11				14,601			(10	)
Installment and other loans		—				—			—				9			(100	)
Total non-accrual loans	$	77,330			$	69,004			12			$	68,125			14
Total non-performing loans		79,254				74,972			6				71,297			11
Other real estate owned		14,407				4,067			254				4,067			254
Total non-performing assets	$	93,661			$	79,039			18			$	75,364			24
Accruing loan modifications to borrowers experiencing financial difficulties (1)	$	1,489			$	—			—			$	—			—
Accruing troubled debt restructurings (TDRs)	$	—			$	—			—			$	15,208			(100	)
Allowance for loan losses	$	154,619			$	155,109			(0	)		$	148,817			4
Total gross loans outstanding, at period-end	$	19,023,822			$	18,952,794			0			$	18,106,803			5
Allowance for loan losses to non-performing loans, at period-end		195.09	%			206.89	%						208.73	%
Allowance for loan losses to gross loans, at period-end		0.81	%			0.82	%						0.82	%

⁽¹⁾ Beginning after January 1, 2023, modifications are reported in accordance with the new guidance under ASU 2022-02.

The ratio of non-performing assets to total assets was 0.41% as of September 30, 2023, compared to 0.34% as of June 30, 2023. Total non-performing assets increased $14.7 million, or 18.6%, to $93.7 million as of September 30, 2023, compared to $79.0 million as of June 30, 2023, primarily due to an increase of $10.3 million, or 254.2%, in other real estate owned, an increase of $8.3 million, or 12.1%, in non-accrual loans offset, in part, by a decrease of $4.0 million, or 67.8%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of September 30, 2023, the Company’s Tier 1 risk-based capital ratio of 12.70%, total risk-based capital ratio of 14.21%, and Tier 1 leverage capital ratio of 10.44%, 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 June 30, 2023, the Company’s Tier 1 risk-based capital ratio was 12.38%, total risk-based capital ratio was 13.88%, and Tier 1 leverage capital ratio was 10.45%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its third quarter 2023 financial results this afternoon, Monday, October 23, 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 refer to Conference Code 10183158. 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, 2022 (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												Nine months ended September 30,
(Dollars in thousands, except per share data)		September 30, 2023				June 30, 2023				September 30, 2022					2023				2022
Financial performance
Net interest income before provision for credit losses		$	185,640			$	181,533			$	197,529			$	559,608			$	531,883
Provision for credit losses			7,000				9,155				2,000				24,255				13,143
Net interest income after provision for credit losses			178,640				172,378				195,529				535,353				518,740
Non-interest income			7,837				23,110				9,876				45,191				44,726
Non-interest expense			93,973				92,821				75,388				269,980				222,208
Income before income tax expense			92,504				102,667				130,017				310,564				341,258
Income tax expense			10,133				9,447				30,982				38,966				78,217
Net income		$	82,371			$	93,220			$	99,035			$	271,598			$	263,041
Net income per common share
Basic		$	1.14			$	1.29			$	1.34			$	3.74			$	3.52
Diluted		$	1.13			$	1.28			$	1.33			$	3.73			$	3.50
Cash dividends paid per common share		$	0.34			$	0.34			$	0.34			$	1.02			$	1.02
Selected ratios
Return on average assets			1.42	%			1.67	%			1.81	%			1.61	%			1.66	%
Return on average total stockholders’ equity			12.36	%			14.47	%			15.94	%			14.04	%			14.35	%
Efficiency ratio			48.57	%			45.36	%			36.35	%			44.64	%			38.54	%
Dividend payout ratio			29.95	%			26.46	%			25.30	%			27.22	%			28.94	%
Yield analysis (Fully taxable equivalent)
Total interest-earning assets			5.89	%			5.68	%			4.38	%			5.71	%			3.91	%
Total interest-bearing liabilities			3.33	%			2.99	%			0.78	%			2.94	%			0.53	%
Net interest spread			2.56	%			2.69	%			3.60	%			2.77	%			3.38	%
Net interest margin			3.38	%			3.44	%			3.83	%			3.52	%			3.54	%
Capital ratios		September 30, 2023				June 30, 2023				September 30, 2022
Tier 1 risk-based capital ratio			12.70	%			12.38	%			12.06	%
Total risk-based capital ratio			14.21	%			13.88	%			13.59	%
Tier 1 leverage capital ratio			10.44	%			10.45	%			10.02	%
														.

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)		September 30, 2023		June 30, 2023		September 30, 2022
Assets
Cash and due from banks		$ 145,580		$ 187,886		$ 200,051
Short-term investments and interest bearing deposits		1,017,354		1,294,379		1,063,294
Securities available-for-sale (amortized cost of $1,684,951 at September 30, 2023,
$1,629,357 at June 30, 2023 and $1,577,311 at September 30, 2022)		1,508,798		1,487,321		1,414,411
Loans		19,023,822		18,952,794		18,106,803
Less: Allowance for loan losses		(154,619)		(155,109)		(148,817)
Unamortized deferred loan fees, net		(9,521)		(9,497)		(6,936)
Loans, net		18,859,682		18,788,188		17,951,050
Equity securities		31,456		37,674		23,123
Federal Home Loan Bank stock		17,250		25,242		17,250
Other real estate owned, net		14,407		4,067		4,067
Affordable housing investments and alternative energy partnerships, net		332,903		323,984		325,439
Premises and equipment, net		91,033		92,090		96,419
Customers’ liability on acceptances		16,900		4,364		6,899
Accrued interest receivable		90,875		86,211		71,177
Goodwill		375,696		375,696		375,696
Other intangible assets, net		4,725		4,992		6,948
Right-of-use assets- operating leases		30,586		31,399		30,679
Other assets		307,284		284,945		303,628
Total assets		$ 22,844,529		$ 23,028,438		$ 21,890,131
Liabilities and Stockholders’ Equity
Deposits:
Non-interest-bearing demand deposits		$ 3,623,483		$ 3,561,237		$ 4,398,152
Interest-bearing deposits:
NOW deposits		2,454,878		2,404,470		2,570,036
Money market deposits		3,222,612		3,033,868		4,935,266
Savings deposits		1,131,352		1,131,602		1,128,823
Time deposits		9,203,263		8,965,826		5,543,474
Total deposits		19,635,588		19,097,003		18,575,751
Advances from the Federal Home Loan Bank		15,000		815,000		360,000
Other borrowings for affordable housing investments		22,374		22,428		22,651
Long-term debt		119,136		119,136		119,136
Acceptances outstanding		16,900		4,364		6,899
Lease liabilities - operating leases		32,962		33,870		33,931
Other liabilities		363,833		333,966		352,204
Total liabilities		20,205,793		20,425,767		19,470,572
Stockholders' equity		2,638,736		2,602,671		2,419,559
Total liabilities and equity		$ 22,844,529		$ 23,028,438		$ 21,890,131
Book value per common share		$ 36.35		$ 35.87		$ 32.67
Number of common shares outstanding		72,586,992		72,563,169		73,411,960

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three months ended											Nine months ended September 30,
		September 30, 2023				June 30, 2023			September 30, 2022					2023				2022
		(In thousands, except share and per share data)
Interest and Dividend Income
Loan receivable, including loan fees		$	293,108			$	273,478		$	211,541			$	827,765			$	558,657
Investment securities			12,698				12,370			7,483				36,832				18,059
Federal Home Loan Bank stock			355				298			258				957				774
Deposits with banks			17,307				13,959			6,732				43,405				10,003
Total interest and dividend income			323,468				300,105			226,014				908,959				587,493
Interest Expense
Time deposits			90,022				79,975			10,218				234,171				22,002
Other deposits			38,207				30,659			13,871				92,683				25,894
Advances from Federal Home Loan Bank			6,779				5,498			2,941				14,875				3,396
Long-term debt			1,726				1,552			1,455				4,721				4,318
Short-term borrowings			1,094				888			—				2,901				—
Total interest expense			137,828				118,572			28,485				349,351				55,610
Net interest income before provision for credit losses			185,640				181,533			197,529				559,608				531,883
Provision for credit losses			7,000				9,155			2,000				24,255				13,143
Net interest income after provision for credit losses			178,640				172,378			195,529				535,353				518,740
Non-Interest Income
Net (losses)/gains from equity securities			(6,218	)			10,663			(3,661	)			9,298				1,358
Debt securities losses, net			—				—			—				(3,000	)			—
Letters of credit commissions			1,738				1,664			1,609				4,972				4,767
Depository service fees			1,536				1,641			1,690				5,009				4,993
Wealth management fees			5,150				3,639			4,184				12,686				12,494
Other operating income			5,631				5,503			6,054				16,226				21,114
Total non-interest income			7,837				23,110			9,876				45,191				44,726
Non-Interest Expense
Salaries and employee benefits			38,774				37,048			34,677				114,048				107,453
Occupancy expense			5,851				5,528			5,975				16,883				17,150
Computer and equipment expense			4,387				4,227			3,509				12,899				9,762
Professional services expense			7,906				8,900			6,337				24,212				20,738
Data processing service expense			3,614				3,672			3,484				11,010				9,813
FDIC and State assessments			3,063				3,012			2,003				9,230				5,999
Marketing expense			1,587				2,416			2,005				4,777				4,692
Other real estate owned expense			435				81			55				566				93
Amortization of investments in low income housing and alternative energy partnerships			23,157				21,746			11,949				60,497				27,471
Amortization of core deposit intangibles			250				559			250				1,059				724
Acquisition, integration and restructuring costs			—				—			59				—				4,086
Other operating expense			4,949				5,632			5,085				14,799				14,227
Total non-interest expense			93,973				92,821			75,388				269,980				222,208
Income before income tax expense			92,504				102,667			130,017				310,564				341,258
Income tax expense			10,133				9,447			30,982				38,966				78,217
Net income		$	82,371			$	93,220		$	99,035			$	271,598			$	263,041
Net income per common share:
Basic		$	1.14			$	1.29		$	1.34			$	3.74			$	3.52
Diluted		$	1.13			$	1.28		$	1.33			$	3.73			$	3.50
Cash dividends paid per common share		$	0.34			$	0.34		$	0.34			$	1.02			$	1.02
Basic average common shares outstanding			72,568,518				72,536,301			73,956,052				72,546,149				74,743,941
Diluted average common shares outstanding			72,890,414				72,753,746			74,242,052				72,847,907				75,068,232

CATHAY GENERAL BANCORP AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
	Three months ended
(In thousands)(Unaudited)	September 30, 2023					June 30, 2023					September 30, 2022
Interest-earning assets:	Average Balance		Average Yield/Rate (1)			Average Balance		Average Yield/Rate (1)			Average Balance		Average Yield/Rate (1)
Loans (1)	$	18,959,444	6.13	%		$	18,503,889	5.93	%		$	17,923,495	4.68	%
Taxable investment securities		1,530,767	3.29	%			1,561,443	3.18	%			1,364,013	2.18	%
FHLB stock		19,141	7.35	%			18,431	6.49	%			18,756	5.46	%
Deposits with banks		1,273,751	5.39	%			1,090,019	5.14	%			1,178,261	2.27	%
Total interest-earning assets	$	21,783,103	5.89	%		$	21,173,782	5.68	%		$	20,484,525	4.38	%
Interest-bearing liabilities:
Interest-bearing demand deposits	$	2,405,011	1.98	%		$	2,325,101	1.57	%		$	2,508,526	0.30	%
Money market deposits		3,036,445	2.98	%			3,047,163	2.55	%			5,153,566	0.90	%
Savings deposits		1,151,615	1.17	%			1,076,260	0.81	%			1,151,126	0.07	%
Time deposits		9,145,176	3.91	%			8,803,900	3.64	%			5,013,213	0.81	%
Total interest-bearing deposits	$	15,738,247	3.23	%		$	15,252,424	2.91	%		$	13,826,431	0.69	%
Other borrowed funds		586,824	5.32	%			508,081	5.04	%			498,234	2.34	%
Long-term debt		119,136	5.75	%			119,136	5.22	%			119,136	4.85	%
Total interest-bearing liabilities		16,444,207	3.33	%			15,879,641	2.99	%			14,443,801	0.78	%
Non-interest-bearing demand deposits		3,603,779					3,667,533					4,456,214
Total deposits and other borrowed funds	$	20,047,986				$	19,547,174				$	18,900,015
Total average assets	$	22,997,408				$	22,403,606				$	21,658,860
Total average equity	$	2,644,005				$	2,583,677				$	2,465,192
	Nine months ended
(In thousands)(Unaudited)	September 30, 2023					September 30, 2022
Interest-earning assets:	Average Balance		Average Yield/Rate (1)			Average Balance		Average Yield/Rate (1)
Loans (1)	$	18,572,222	5.96	%		$	17,468,247	4.28	%
Taxable investment securities		1,546,951	3.18	%			1,263,341	1.91	%
FHLB stock		18,290	7.00	%			17,757	5.83	%
Deposits with banks		1,145,398	5.07	%			1,332,491	1.00	%
Total interest-earning assets	$	21,282,861	5.71	%		$	20,081,836	3.91	%
Interest-bearing liabilities:
Interest-bearing demand deposits	$	2,361,732	1.57	%		$	2,456,556	0.17	%
Money market deposits		3,152,703	2.51	%			5,088,227	0.58	%
Savings deposits		1,056,234	0.73	%			1,137,485	0.07	%
Time deposits		8,728,133	3.59	%			5,060,286	0.58	%
Total interest-bearing deposits	$	15,298,802	2.86	%		$	13,742,554	0.47	%
Securities sold under agreements to repurchase
Other borrowed funds		473,114	5.02	%			209,679	2.17	%
Long-term debt		119,136	5.30	%			119,136	4.85	%
Total interest-bearing liabilities		15,891,052	2.94	%			14,071,369	0.53	%
Non-interest-bearing demand deposits		3,741,982					4,403,195
Total deposits and other borrowed funds	$	19,633,034				$	18,474,564
Total average assets	$	22,503,115				$	21,203,918
Total average equity	$	2,586,548				$	2,450,650

(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
		September 30, 2023				June 30, 2023				September 30, 2022
		(In thousands) (Unaudited)
Stockholders' equity	(a)	$	2,638,736			$	2,602,671			$	2,419,559
Less: Goodwill			(375,696	)			(375,696	)			(375,696	)
Other intangible assets (1)			(4,725	)			(4,992	)			(6,948	)
Tangible equity	(b)	$	2,258,315			$	2,221,983			$	2,036,915
Total assets	(c)	$	22,844,529			$	23,028,438			$	21,890,131
Less: Goodwill			(375,696	)			(375,696	)			(375,696	)
Other intangible assets (1)			(4,725	)			(4,992	)			(6,948	)
Tangible assets	(d)	$	22,464,108			$	22,647,750			$	21,507,487
Number of common shares outstanding	(e)		72,586,992				72,563,169				73,411,960
Total stockholders' equity to total assets ratio	(a)/(c)		11.55	%			11.30	%			11.05	%
Tangible equity to tangible assets ratio	(b)/(d)		10.05	%			9.81	%			9.47	%
Tangible book value per share	(b)/(e)	$	31.11			$	30.62			$	27.75
		Three months ended												Nine months ended
		September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023			September 30, 2022
		(In thousands) (Unaudited)
Net Income		$	82,371			$	93,220			$	99,035			$	271,598		$	263,041
Add: Amortization of other intangibles (1)			270				570				250				1,031			724
Tax effect of amortization adjustments (2)			(80	)			(169	)			(74	)			(306	)		(215	)
Tangible net income	(f)	$	82,561			$	93,621			$	99,211			$	272,323		$	263,550
Return on tangible common equity (3)	(f)/(b)		14.62	%			16.85	%			19.48	%			16.08	%		17.25	%

⁽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/20231023967763/en/

Heng W. Chen (626) 279-3652                   

Source: Cathay General Bancorp

FAQ

What was the net income for Cathay General Bancorp in Q3 2023?

The net income for Cathay General Bancorp in Q3 2023 was $82.4 million.

What was the change in total deposits in Q3 2023?

Total deposits increased by $538.6 million, or 11.6% annualized, to $19.6 billion in Q3 2023.

What was the change in total gross loans in Q3 2023?

Total gross loans increased by $71.0 million, or 1.6% annualized, to $19.0 billion in Q3 2023.

What was the change in diluted earnings per share in Q3 2023 compared to Q2 2023?

Diluted earnings per share decreased to $1.13 for Q3 2023 compared to $1.28 for Q2 2023.

What was the change in net interest margin from Q2 to Q3?

The net interest margin declined slightly from 3.44% in Q2 to 3.38% in Q3.