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Cathay General Bancorp Announces Second Quarter 2019 Results

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LOS ANGELES, July 17, 2019 /PRNewswire/ -- Cathay General Bancorp ((the ", Company", , ", we", , ", us", , or ", our", NASDAQ:CATY), the holding company for Cathay Bank, today announced its unaudited financial results for the quarter ended June 30, 2019.  The Company reported net income of $72.2 million, or $0.90 per share, for the second quarter of 2019. 

Cathay General Bancorp (PRNewsFoto/Cathay General Bancorp) (PRNewsfoto/Cathay General Bancorp)

FINANCIAL PERFORMANCE


Three months ended

(unaudited)

June 30, 2019


March 31, 2019


June 30, 2018

Net income

$72.2 million


$66.7 million


$73.7 million

Basic earnings per common share

$0.90


$0.83


$0.91

Diluted earnings per common share

$0.90


$0.83


$0.90

Return on average assets

1.69%


1.61%


1.88%

Return on average total stockholders' equity

13.27%


12.57%


14.51%

Efficiency ratio

44.53%


45.42%


42.69%

SECOND QUARTER HIGHLIGHTS

  • Total loans increased $316.1 million, or 9.0% annualized, to $14.6 billion for the quarter.
  • Total deposits increased $276.6 million, or 8.1% annualized, to $14.4 billion for the quarter.

"In the second quarter of 2019, our total loans increased $316.1 million, or 9.0% annualized, to $14.6 billion.  We continued our stock buyback program in the second quarter and repurchased 641,894 shares of our common stock at an average cost of $35.84," commented Pin Tai, Chief Executive Officer and President of the Company.

SECOND QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended June 30, 2019, was $72.2 million, a decrease of $1.5 million, or 2.0%, compared to net income of $73.7 million for the same quarter a year ago. Diluted earnings per share for both the quarter ended June 30, 2019 and June 30, 2018, was $0.90.  

Return on average stockholders' equity was 13.27% and return on average assets was 1.69% for the quarter ended June 30, 2019, compared to a return on average stockholders' equity of 14.51% and a return on average assets of 1.88% for the same quarter a year ago.    

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $3.4 million, or 2.4%, to $143.4 million during the second quarter of 2019, compared to $140.0 million during the same quarter a year ago.  The increase was due primarily to increases in interest income from loans and securities, offset in part by an increase in interest expense from time deposits.

The net interest margin was 3.58% for the second quarter of 2019 compared to 3.83% for the second quarter of 2018 and 3.70% for the first quarter of 2019. 

For the second quarter of 2019, the yield on average interest-earning assets was 4.81%, the cost of funds on average interest-bearing liabilities was 1.65%, and the cost of interest-bearing deposits was 1.58%.  In comparison, for the second quarter of 2018, the yield on average interest-earning assets was 4.58%, the cost of funds on average interest-bearing liabilities was 1.03%, and the cost of interest-bearing deposits was 0.92%. The increase in the yield on average interest-earning assets resulted mainly from higher rates on loans.  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 3.16% for the quarter ended June 30, 2019, compared to 3.55% for the same quarter a year ago.

Provision/(reversal) for credit losses

There was no provision/(reversal) for credit losses recorded for the second quarter of 2019 or 2018, based on our management's review of the appropriateness of the allowance for loan losses at June 30, 2019.  The following table summarizes the charge-offs and recoveries for the periods indicated:


Three months ended


Six months ended June 30,


June 30, 2019


March 31, 2019


June 30, 2018


2019


2018


(In thousands) (Unaudited)

Charge-offs:










  Commercial loans

$            1,713


$              1,231


$               488


$ 2,944


$      507

  Real estate loans (1)

-


-


390


-


390

     Total charge-offs 

1,713


1,231


878


2,944


897

Recoveries:










  Commercial loans

1,356


41


150


1,397


1,063

  Construction loans

30


1,044


44


1,074


88

  Real estate loans(1)

423


310


499


733


1,366

     Total recoveries

1,809


1,395


693


3,204


2,517

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