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Cathay General Bancorp Announces Third Quarter 2019 Results

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LOS ANGELES, Oct. 16, 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 September 30, 2019. The Company reported net income of $72.8 million, or $0.91 per share, for the third quarter of 2019.

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

FINANCIAL PERFORMANCE


Three months ended

(unaudited)

September 30, 2019


June 30, 2019


September 30, 2018

Net income

$72.8 million


$72.2 million


$69.8 million

Basic earnings per common share

$0.91


$0.90


$0.86

Diluted earnings per common share

$0.91


$0.90


$0.85

Return on average assets

1.65%


1.69%


1.72%

Return on average total stockholders' equity

12.98%


13.27%


13.19%

Efficiency ratio

41.67%


44.53%


43.14%

THIRD QUARTER HIGHLIGHTS

  • Total loans, including loans held for sale, increased $171.8 million, or 4.9% annualized, to $14.8 billion for the quarter.
  • Total deposits increased $295.3 million, or 8.6% annualized, to $14.7 billion for the quarter.

"In the third quarter of 2019, our total loans increased $171.8 million, or 4.9% annualized, to $14.8 billion. We are pleased by the $295.3 million increase, or 8.6% annualized, in total deposits for the quarter," commented Pin Tai, Chief Executive Officer of the Company.

THIRD QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended September 30, 2019, was $72.8 million, an increase of $3.0 million, or 4.3%, compared to net income of $69.8 million for the same quarter a year ago. Diluted earnings per share for the quarter ended September 30, 2019, was $0.91 compared to $0.85 for the same quarter a year ago.

Return on average stockholders' equity was 12.98% and return on average assets was 1.65% for the quarter ended September 30, 2019, compared to a return on average stockholders' equity of 13.19% and a return on average assets of 1.72% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $1.9 million, or 1.3%, to $147.0 million during the third quarter of 2019, compared to $145.1 million during the same quarter a year ago. The increase was due primarily to a $3.1 million increase in interest recoveries and prepayment penalties, offset in part by an increase in interest expense from time deposits.

The net interest margin was 3.56% for the third quarter of 2019 compared to 3.83% for the third quarter of 2018 and 3.58% for the second quarter of 2019.

For the third quarter of 2019, the yield on average interest-earning assets was 4.80%, the cost of funds on average interest-bearing liabilities was 1.65%, and the cost of interest-bearing deposits was 1.60%. In comparison, for the third quarter of 2018, the yield on average interest-earning assets was 4.67%, the cost of funds on average interest-bearing liabilities was 1.15%, and the cost of interest-bearing deposits was 1.05%. The increase in the yield on average interest-earning assets resulted primarily from the higher interest recoveries and prepayment penalties discussed above. 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 3.15% for the quarter ended September 30, 2019, compared to 3.52% for the same quarter a year ago.

Provision/(reversal) for credit losses

The Company recorded a reversal for credit losses of $2.0 million in the third quarter of 2019 compared to a reversal of $1.5 million in the same quarter a year ago. The reversal for credit losses was based on our management's review of the appropriateness of the allowance for loan losses at September 30, 2019 and September 30, 2018. The following table summarizes the charge-offs and recoveries for the periods indicated:


Three months ended


Nine months ended September 30,


September 30, 2019


June 30, 2019


September 30, 2018


2019


2018


(In thousands) (Unaudited)

Charge-offs:










  Commercial loans

$ 3,356


$ 1,713


$ 122


$ 6,300


$ 629

  Real estate loans (1)

-


-


-


-


390

   Total charge-offs

3,356


1,713


122


6,300


1,019

Recoveries:










  Commercial loans

211


1,356


187


1,609


1,250

  Construction loans

-


30


44


1,073


132

  Real estate loans(1)

8,401


423


2,949


9,134


4,315

   Total recoveries

8,612


1,809


3,180


11,816


5,697

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