SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ___________________________________
Commission file number 0-18630
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CATHAY BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 95-4274680
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 North Broadway, Los Angeles, California 90012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 625-4700
-----------------------------
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(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, $.01 par value, 8,929,508 shares outstanding as of
September 30, 1997.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION........................................... 3
Item 1. Financial Statements........................................ 4-6
Notes to Condensed Consolidated Financial Statements......... 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............. 9-19
PART II - OTHER INFORMATION............................................. 20
Item 1. Legal Proceedings.......................................... 20
Item 2. Changes in Securities...................................... 20
Item 3. Defaults upon Senior Securities............................ 20
Item 4. Submission of Matters to a Vote of Security Holders........ 20
Item 5. Other Information.......................................... 20
Item 6. Exhibits and Reports on Form 8-K........................... 20
SIGNATURES.............................................................. 21
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
CATHAY BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS)
Sept. 30, 1997 Dec. 31, 1996
(unaudited) (unaudited)
-------------- -------------
ASSETS
Cash and due from banks $ 68,819 $ 47,194
Federal funds sold and securities purchased under
agreement to resell 26,000 28,000
-------- ---------
Cash and cash equivalents 94,819 75,194
Securities available-for-sale (with amortized costs of
$260,173 in 1997 and $385,228 in 1996) 260,925 383,391
Securities held-to-maturity (with estimated fair
values of $332,981 in 1997 and $212,002 in 1996) 328,478 210,129
Loans (net of allowance for loan losses of
$14,969 in 1997 and $13,529 in 1996) 809,915 744,384
Other real estate owned, net 10,063 18,854
Investments in real estate, net 1,735 3,987
Premises and equipment, net 25,328 25,771
Customers' liability on acceptance 9,726 6,653
Accrued interest receivable 9,809 15,008
Goodwill 9,696 9,897
Other assets 10,302 11,061
---------- ----------
Total assets $1,570,796 $1,504,329
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing demand deposits $ 160,854 $ 135,345
Interest bearing accounts
NOW accounts 112,940 118,498
Money market deposits 98,207 95,158
Savings deposits 211,744 224,443
Time deposits under $100,000 308,209 302,981
Time deposits of $100,000 or more 527,781 488,315
---------- ---------
Total deposits 1,419,735 1,364,740
---------- ---------
Securities sold under agreements to repurchase 3,101 10,000
Acceptances outstanding 9,726 6,653
Other liabilities 6,429 4,490
---------- ---------
Total liabilities 1,438,991 1,385,883
---------- ---------
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value; 10,000,000
shares authorized, none issued -- --
Common stock, $.01 par value; 25,000,000 shares
authorized, 8,929,508 and 8,878,144 shares issued and
outstanding in 1997 and 1996, respectively 89 89
Additional paid-in-capital 60,885 59,812
Unrealized holding gains (losses) on securities
available-for-sale, net of tax 435 (1,059)
Retained earnings 70,396 59,604
---------- ----------
Total stockholders' equity 131,805 118,446
---------- ----------
Total liabilities and stockholders' equity $1,570,796 $1,504,329
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---------- ----------
SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
CATHAY BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
3rd Qtr 3rd Qtr YTD YTD
Sept. 1997 Sept. 1996 Sept. 1997 Sept. 1996
---------- ---------- ---------- ----------
INTEREST INCOME
Interest and fees on loans $ 18,795 $ 13,613 $ 54,689 $ 40,295
Interest on securities available-for-sale 4,407 4,253 14,515 12,269
Interest on securities held-to-maturity 4,352 3,103 11,857 8,192
Interest on Federal funds sold and securities purchased
under agreement to resell 889 393 1,698 1,233
Interest on deposit with banks 2 - 2 -
--------- --------- --------- ---------
Total interest income 28,445 21,362 82,761 61,989
--------- --------- --------- ---------
INTEREST EXPENSE
Time deposits of $100,000 or more 6,945 5,658 19,441 16,664
Other deposits 5,983 3,943 17,774 11,501
Other borrowed funds 130 21 193 78
--------- --------- --------- ---------
Total interest expense 13,058 9,622 37,408 28,243
--------- --------- --------- ---------
Net interest income before provision for loan losses 15,387 11,740 45,353 33,746
Provision for loan losses 900 900 2,700 2,700
--------- --------- --------- ---------
Net interest income after provision for loan losses 14,487 10,840 42,653 31,046
--------- --------- --------- ---------
NON-INTEREST INCOME
Securities gains 31 - 35 22
Letter of credit commissions 460 371 1,065 974
Service charges 907 724 2,571 2,193
Other operating income 497 440 1,244 1,013
--------- --------- --------- ---------
Total non-interest income 1,895 1,535 4,915 4,202
--------- --------- --------- ---------
NON-INTEREST EXPENSE
Salaries and employee benefits 4,165 3,105 12,145 9,302
Occupancy expense 712 564 2,143 1,692
Computer and equipment expense 661 452 1,813 1,475
Professional services expense 746 798 2,324 2,348
FDIC and State assessments 97 99 248 282
Marketing expense 295 199 1,111 785
Other operating expense 577 740 2,998 3,658
--------- --------- --------- ---------
Total non-interest expense 7,253 5,957 22,782 19,542
--------- --------- --------- ---------
Income before income tax expense 9,129 6,418 24,786 15,706
Income tax expense 3,733 2,688 9,992 5,992
--------- --------- --------- ---------
Net Income $ 5,396 $ 3,730 $ 14,794 $ 9,714
--------- --------- --------- ---------
--------- --------- --------- ---------
NET INCOME PER COMMON SHARE, based on the
weighted average number of shares
outstanding during the periods: $ 0.60 $ 0.47 $ 1.66 $ 1.23
Weighted average number of common shares outstanding 8,925,219 7,946,475 8,908,363 7,911,894
SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
CATHAY BANCORP, INC. & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
(In thousands)
----------------------------
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 14,794 $ 9,714
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 2,700 2,700
Provision for losses on other real estate owned 410 1,270
Depreciation 994 1,097
Net gain on disposition of other real estate
owned (190) (97)
Net gain on disposition of investments in real
estate (222) -
Premises and equipment disposal gains - 2
Net gain on sales and calls of securities (34) (22)
Amortization and accretion of investment
security premiums, net 163 573
Increase in deferred loan fees, net 20 227
Decrease in accrued interest receivable 5,199 2,822
(Increase) decrease in other assets, net (133) 823
Increase in other liabilities 1,939 2,283
- --------------------------------------------------------------------------------
Total adjustments 10,846 11,678
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Net cash provided by operating activities 25,640 21,392
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available-for-sale (163,814) (84,368)
Proceeds from maturity and call of securities
available-for-sale 204,433 42,465
Purchase of securities held-to-maturity (13,113) (13,515)
Proceeds from maturity and call of securities
held-to-maturity 41,187 11,155
Proceeds from sale of securities available-for-sale 92,700 -
Purchase of mortgage-backed securities available-for-
sale (12,444) (8,903)
Proceeds from repayments of mortgage-backed
securities available-for-sale 4,664 -
Purchase of mortgage-backed securities held-to-
maturity (157,401) (47,597)
Repayments from mortgage-backed securities held-
to-maturity 10,363 1,967
Proceeds from sale of loans 1,834 2,034
Net change in loans (65,627) (38,422)
Purchase of premises and equipment (551) (355)
Proceeds from sale of equipment - 7
Proceeds from disposition of other real estate owned 4,113 2,802
Proceeds from disposition of investment in real estate 2,292 -
Decrease in investments in real estate 182 104
- --------------------------------------------------------------------------------
Net cash used in investing activities (51,182) (132,626)
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, NOW accounts,
money market and savings deposits 10,301 10,371
Net increase in time deposits 44,694 93,156
Net decrease in securities sold under agreement
to repurchase (6,899) (700)
Cash dividends (4,001) (3,552)
Proceeds from shares issued to Dividend Reinvestment
Plan 1,072 1,357
- --------------------------------------------------------------------------------
Net cash provided by financing activities 45,167 100,632
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Increase in cash and cash equivalents 19,625 (10,602)
Cash and cash equivalents, beginning of the period 75,194 71,326
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Cash and cash equivalents, end of the period $ 94,819 $ 60,724
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Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 36,805 $ 28,310
Income taxes $ 9,746 $ 2,720
Non-cash investing activities:
Securities held-to-maturity transferred
to available-to-sale within 90 days of
maturity $ 630 $ 305
Net change in unrealized holding gain/
loss on securities available-for-sale,
net of tax $ 1,494 $ (2,750)
Transfers to other real estate owned $ 2,383 $ 9,190
Loans to facilitate the sale of other
real estate owned $ 6,841 $ 3,524
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SEE ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
6
CATHAY BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine months ended September 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the consolidated
financial statements and footnotes included in the Company's annual report on
Form 10-K for the year ended December 31, 1996.
2. NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share". This Statement establishes standards for computing and presenting
earnings per share (EPS) and applies to entities with publicly held common stock
or potential common stock. This statement simplifies the standards for
computing earnings per share previously found in APB Opinion No. 15, Earnings
per Share, and makes them comparable to international EPS standards. It
replaces the presentation of primary EPS with a presentation of basic EPS. It
also requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. Basic EPS
excludes dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. Diluted EPS is computed similarly to fully
diluted EPS pursuant to Opinion 15. This Statement supersedes Opinion 15 and
AICPA Accounting Interpretations 1-102 of Opinion 15. It also supersedes or
amends other accounting pronouncements. The provisions in this Statement are
substantially the same as those in International Accounting Standard 33,
Earnings per Share, recently issued by the International Accounting Standards
Committee. This Statement is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods; earlier
application is not permitted. This Statement requires restatement of all prior-
period EPS data presented. Upon adoption of SFAS No. 128, the Company
anticipates that its basic EPS disclosures will be increased as compared to the
primary EPS disclosures presently required by APB Opinion 15. Diluted EPS
disclosures are not expected to differ materially from the fully-diluted
disclosures presently required by APB Opinion 15.
In February 1997 the FASB issued SFAS No. 129, "Disclosure of Information
About Capital Structure." SFAS No. 129 consolidates existing reporting
standards for disclosing information about an entity's capital structure. SFAS
No. 129 also supersedes previously issued accounting statements. SFAS No. 129
must be adopted for financial statements for periods ending after December 15,
1997. The impact on the Company of adopting SFAS No. 129 is not expected to be
material as the Company's existing disclosures are generally in compliance with
the disclosure requirements in SFAS No. 129.
7
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial statements.
SFAS No. 130 is effective for fiscal years beginning after December 15, 1997.
The impact on the Company of adopting SFAS No. 130 is not expected to be
material to the Company's existing disclosure.
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards to
report information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in interim
reports to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. SFAS No. 131
is effective for financial statements for periods beginning after December 15,
1997, with comparative information for earlier years to be restated. The
Company is currently assessing the effect of adopting SFAS No. 131.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion is given based on the assumption that the reader has
access to the 1996 Annual Report of Cathay Bancorp, Inc. ("Bancorp") and its
subsidiary Cathay Bank ("the Bank"), together ("the Company").
RESULTS OF OPERATIONS
For the third quarter of 1997, the Company reported net income of $5.4
million or $0.60 per share, as compared to $3.7 million or $0.47 per share for
the third quarter of 1996, representing an increase of $1.7 million or 44.7%.
Income before income tax expense amounted to $9.1 million for the third quarter
of 1997, an increase of $2.7 million or 42.2% over $6.4 million for the same
quarter a year ago. The consistent earnings growth in the third quarter of 1997
was due to increases in earning assets, primarily loans and securities. The
annualized return on average assets and return on average stockholders' equity
were 1.38% and 16.60%, respectively for the third quarter of 1997, as compared
to 1.24% and 15.22%, respectively for the same quarter of 1996.
For the nine months ended September 30, 1997, the Company reported net income
of $14.8 million or $1.66 per share, as compared to $9.7 million or $1.23 per
share for the same period a year ago. This represents an increase of $5.1
million or 52.3%. Income before income tax expense increased $9.1 million or
57.8% to $24.8 million for the nine months ended September 30, 1997 from $15.7
million a year ago. The annualized return on average assets and return on
average stockholders' equity for the first nine months of 1997 were 1.29% and
15.81%, respectively, as compared to 1.13% and 13.39% for the same period in
1996.
NET INTEREST INCOME
For the first nine months of 1997 and 1996, net interest income before
provision for loan losses totaled $45.4 million and $33.7 million, respectively,
representing an increase of $11.7 million or 34.4% for 1997. On a taxable
equivalent basis, net interest income totaled $46.2 million and $34.6 million
for the first nine months of 1997 and 1996, respectively, representing an
increase of $11.6 million or 33.6% for 1997. The increase in net interest
income was substantially attributable to a $339.9 million growth in average
earning assets. The increase in average earning assets was primarily funded by
time deposits and, secondarily by other interest-bearing deposits and demand
deposits. Although the increase of average loans of $225.4 million or 40.6%
contributed to an increase of $14.4 million in interest income, the average
yield on loans dropped 32 basis points from 9.69% to 9.37% despite a 14 basis
point increase in the Bank's average reference rate. This was primarily due to
substantial increases in average real estate mortgage loans from the acquisition
of First Public Savings Bank last November, and to a lesser extent, the keen
competition in the Company's market area. Average real estate mortgage loans
comprised approximately 17.5% of total loans in the first nine months of 1997 as
compared to 7.8% in the same period in 1996. The average taxable equivalent
yield on securities and Federal funds sold improved 27 basis points and 37 basis
points from 6.08% and 5.28% to 6.35% and 5.65%, respectively, while cost of
funds remained at approximately the same at 4.01%. As a result, net interest
margin, defined as taxable equivalent net interest income to average earning
assets, increased 5 basis points from 4.38% in the first nine months of 1996 to
4.43% in 1997.
For the third quarter of 1997, net interest income before provision for loan
losses totaled $15.4 million, as compared to $11.7 million for the same quarter
of 1996. This represents an increase of $3.7 million or 31.1%. On a taxable
equivalent basis, net interest income increased $3.8 million or 31.3% to $15.7
million for the third quarter of 1997, as compared to $11.9 million for the same
quarter of 1996. The increase in the quarterly net interest income was
primarily attributable to an increase of $338.7 million in average earning
assets with average loans increasing $241.1 million or 43.1%. The increase in
average loans added $5.2 million to the interest income. However, the average
yield on loans declined 36 basis points from 9.68% to 9.32% between the third
quarter of 1996 and 1997 due to the same reasons as explained previously. The
taxable equivalent average yield on earning assets increased
9
11 basis points in the third quarter of 1997 to 8.00% as compared to 7.89%
for the same quarter of 1996, primarily resulting from higher yields on
securities and Federal funds sold. Nevertheless, cost of funds went up 15
basis points mainly due to higher rates paid on time deposits resulting from
the Fed's tightening of 25 basis points in late March of 1997. Consequently,
the net interest margin for the third quarter of 1997 remained approximately
the same at 4.36% compared to the third quarter of 1996.
NON-INTEREST INCOME
For the first nine months of 1997, non-interest income totaled $4.9 million,
as compared to $4.2 million for the same period a year ago. This represents an
increase of $713,000 or 17.0% resulting from higher income in service charges,
wire transfer fees, letter of credit commissions and fees related to loans.
On a quarterly basis, non-interest income totaled $1.9 million and $1.5
million for the third quarter of 1997 and 1996, respectively. The $360,000 or
23.5% increase was attributable to the same reasons as stated in the previous
paragraph. The following tables illustrate the components of non-interest
income, as well as the amount and percentage changes for the periods indicated:
(Dollars in thousands)
Nine Months Ended Percent
09/30/97 09/30/96 Increase Change
-------- -------- -------- --------
Non-interest income:
Securities Gains $ 35 $ 22 $ 13 59.1%
Letter of credit commissions 1,065 974 91 9.3
Service charges 2,571 2,193 378 17.2
Other operating income 1,244 1,013 231 22.8
------ ------ ------ ------
Total non-interest income $4,915 $4,202 $ 713 17.0%
------ ------ ------
3rd Qtr. 3rd Qtr. Percent
Non-interest income: 1997 1996 Increase Change
------- ------- -------- --------
Securities Gains $ 31 $ 0 $ 31 NMV*
Letter of credit commissions 460 371 89 24.0%
Service charges 907 724 183 25.3
Other operating income 497 440 57 13.0
------ ------ ------
Total non-interest income $1,895 $1,535 $ 360 23.5%
------ ------ ------ ------
------ ------ ------ ------
*No meaningful value
NON-INTEREST EXPENSE
Non-interest expense amounted to $22.8 million and $19.5 million, respectively
for the first nine months of 1997 and 1996. The increase of $3.3 million or
16.6% in 1997 was primarily due to the higher operating cost associated with
added personnel and facilities from the acquisition while net other real estate
owned ("OREO") expense declined $1.0 million. The efficiency ratio, defined as
non-interest expense divided by net interest income before provision for loan
losses plus non-interest income, improved from 51.50% for the nine months ended
September 30, 1996 to 45.32% for the same period in 1997.
Quarterly, non-interest expense totaled $7.3 million and $6.0 million for the
third quarter of 1997 and 1996, respectively. The higher quarterly non-interest
expense was attributable to substantially the same factors discussed in the
previous paragraph. The efficiency ratios for the third quarter of 1997 and
1996 were 41.97% and 44.87%, respectively. The following tables present the
components of the non-interest expense with the amount and percentage changes
for the periods indicated:
10
(Dollars in thousands)
Nine Months Ended Increase Percent
09/30/97 09/30/96 (Decrease) Change
-------- -------- --------- --------
Non-interest expense:
Salaries and employee benefits $12,145 $ 9,302 $ 2,843 30.6%
Occupancy expense 2,143 1,692 451 26.7
Computer and equipment expense 1,813 1,475 338 22.9
Professional services expense 2,324 2,348 (24) (1.0)
FDIC and State assessments 248 282 (34) (12.1)
Marketing expense 1,111 785 326 41.5
Net other real estate owned expense 367 1,375 (1,008) (73.3)
Other operating expense 2,631 2,283 348 15.2
-------- -------- --------- --------
Total non-interest expense $22,782 $19,542 $3,240 16.6%
-------- -------- ---------
-------- -------- ---------
3rd Qtr. 3rd Qtr. Increase Percent
1997 1996 (Decrease) Change
-------- -------- --------- --------
Non-interest expense:
Salaries and employee benefits $ 4,165 $ 3,105 $1,060 34.1%
Occupancy expense 712 564 148 26.2
Computer and equipment expense 661 452 209 46.2
Professional services expense 746 798 (52) (6.5)
FDIC and State assessments 97 99 (2) (2.0)
Marketing expense 295 199 96 48.2
Net other real estate owned expense (79) 66 (145) (219.7)
Other operating expense 656 674 (18) (2.7)
-------- -------- --------- --------
Total non-interest expense $ 7,253 $ 5,957 $1,296 21.8%
-------- -------- ---------
-------- -------- ---------
FINANCIAL CONDITION
During the nine month period from year-end 1996 to September 30, 1997, total
assets increased $66.5 million or 4.4% to $1,570.8 million; loans, net of
deferred fees, grew by $67.0 million or 8.8% to $824.9 million; investment
securities (including available-for-sale and held-to-maturity) decreased $4.1
million or 0.7% to $589.4 million; deposits were up $55.0 million or 4.0% to
$1,419.7 million; and stockholders' equity advanced $13.4 million or 11.3% to
$131.8 million.
EARNING ASSET MIX
Total earning assets amounted to $1,440.3 million as of September 30, 1997,
as compared to $1,379.4 million at year-end 1996, representing an increase of
$60.9 million or 4.4% which was entirely from loans. The gradual shift in the
earning asset mix from securities and other investments to loans favorably
affected the net interest margin. The table below shows the changes in the
earning asset mix as of the dates indicated:
(Dollars in thousands)
As of 09/30/97 As of 12/31/96
------------------- --------------------
Amount Percent Amount Percent
-------- -------- ---------- --------
Types of earning assets:
Federal funds sold $ 26,000 1.8% $ 28,000 2.0%
Securities available-for-sale 260,925 18.1 383,391 27.8
Securities held-to-maturity 328,478 22.8 210,129 15.2
Loans (net of deferred fees) 824,884 57.3 757,913 55.0
Total earning assets $1,440,287 100.0% $1,379,433 100.0%
---------- ----- ----------
---------- ----- ----------
11
SECURITIES
As of September 30, 1997 securities available-for-sale decreased $122.5
million or 31.9% from $383.4 million at year-end 1996 to $260.9 million, while
securities held-to-maturity increased $118.3 million or 56.3% from $210.1
million at year-end 1996 to $328.5 million. The average yields on taxable
securities available-for-sale and held-to-maturity increased 42 basis points and
13 basis points from 5.69% and 6.18% to 6.11% and 6.31%, respectively comparing
the first nine months of 1996 and 1997 as a result of a portfolio restructure in
the third quarter of 1997. The following tables summarize the composition and
maturity distribution of the investment portfolio as of the dates indicated:
(Dollars in thousands)
SECURITIES AVAILABLE-FOR-SALE: As of 09/30/97
- ------------------------------ ------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
--------- ---------- ---------- ----------
U.S. Treasury securities $ 39,031 $ 33 $ 84 $ 38,980
U.S. government agencies 117,438 131 43 117,526
Mortgage-backed securities 30,820 680 13 31,487
Assets-backed securities 13,415 31 0 13,446
Federal Home Loan Bank stock 5,653 0 0 5,653
Commercial paper 53,816 23 6 53,833
-------- ------ ------ --------
Total $260,173 $ 898 $ 146 $260,925
-------- ------ ------ --------
-------- ------ ------ --------
As of 12/31/96
-------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
--------- ---------- ---------- ----------
U.S. Treasury securities $122,116 $ 197 $ 544 $121,769
U.S. government agencies 229,695 128 1,446 228,377
State and municipal securities 50 0 0 50
Mortgage-backed securities 23,053 7 178 22,882
Assets-backed securities 4,999 0 1 4,998
Federal Home Loan Bank stock 5,315 0 0 5,315
--------- ---------- ---------- ----------
Total $385,228 $ 332 $2,169 $383,391
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
(Dollars in thousands)
SECURITIES HELD-TO-MATURITY: As of 09/30/97
------------------------------------------
Gross Gross
Carrying Unrealized Unrealized Estimated
Value Gains Losses Fair Value
--------- ---------- ---------- ----------
U.S. Treasury securities $ 26,061 $ 334 $ 0 $ 26,395
U.S. government agencies 39,381 342 0 39,723
State and municipal securities 42,347 1,786 2 44,131
Mortgage-backed securities 210,192 1,879 66 212,005
Assets-backed securities 1,584 0 2 1,582
Other securities 8,913 232 0 9,145
--------- ---------- ---------- ----------
Total $ 328,478 $4,573 $ 70 $332,981
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
As of 12/31/96
------------------------------------------
Gross Gross
Carrying Unrealized Unrealized Estimated
Value Gains Losses Fair Value
--------- ---------- ---------- ----------
U.S. Treasury securities $ 26,081 $ 91 $ 9 $ 26,163
U.S. government agencies 66,900 0 106 66,794
State and municipal securities 40,393 1,513 31 41,875
Mortgage-backed securities 63,109 504 103 63,510
Assets-backed securities 3,545 0 1 3,544
Other securities 10,101 15 0 10,116
--------- ---------- ---------- ----------
Total $210,129 $2,123 $ 250 $212,002
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
12
SECURITIES PORTFOLIO MATURITY DISTRIBUTION: (Dollars in thousands)
As of September 30, 1997
Maturity Schedule
---------------------------------------------
After 1 After 5
But But
SECURITIES AVAILABLE-FOR-SALE: Within Within Within Over
1 Yr 5 Yrs 10 Yrs 10 Yrs Total
------ ------ ------ ------- ---------
U.S. Treasury securities $ 35,969 $ 3,011 $ 0 $ 0 $ 38,980
U.S. government agencies 20,081 97,445 0 0 117,526
Mortgage-backed securities* 0 8,410 3,549 19,528 31,487
Assets-backed securities* 0 3,600 9,846 0 13,446
Federal Home Loan Bank stock 5,653 0 0 0 5,653
Commercial paper 53,833 0 0 0 53,833
--------- -------- ------- --------- ---------
Total $115,536 $112,466 $ 13,395 $ 19,528 $260,925
--------- -------- ------- --------- ---------
--------- -------- ------- --------- ---------
SECURITIES HELD-TO-MATURITY:
U.S. Treasury securities $ 0 $ 26,061 $ 0 $ 0 $ 26,061
U.S. government agencies 0 39,381 0 0 39,381
State and municipal securities 364 9,637 16,908 15,438 42,347
Mortgage-backed securities* 0 20,646 24,890 164,656 210,192
Assets-backed securities* 0 0 0 1,584 1,584
Corporate bonds 0 8,913 0 0 8,913
--------- -------- ------- --------- ---------
Total $ 364 $104,638 $ 41,798 $181,678 $328,478
--------- -------- ------- --------- ---------
--------- -------- ------- --------- ---------
* The mortgage-backed securities and asset-backed securities reflect stated
maturities and not anticipated prepayments.
LOANS
The Bank experienced a good loan growth in the first nine months of 1997,
particularly in the first and third quarters. Total gross loans increased $67.0
million or 8.8% to $828.6 million as of September 30, 1997, from $761.6 million
at year-end 1996. All loan categories showed increases with the majority in
commercial loans and real estate mortgage loans. Commercial loans grew by $36.0
million or 12.7%, followed by commercial real estate loans, residential real
estate loans and equity lines which added $14.6 million, $7.9 million and $3.6
million, respectively, bringing to a total increase of $26.1 million in the real
estate mortgage loans. Installment loans advanced $2.8 million.
The following table sets forth the classification of loans by type and mix as
of the dates indicated:
(Dollars in thousands)
As of 09/30/97 As of 12/31/96
---------------- ----------------
Types of loans: Amount Percent Amount Percent
-------- ------- -------- -------
Commercial loans $319,869 39.5% $283,894 38.1%
Real estate mortgage loans 446,463 55.1 420,315 56.5
Real estate construction loans 35,157 4.3 33,510 4.5
Installment loans 26,386 3.3 23,551 3.1
Other loans 772 0.1 385 0.1
-------- ------- -------- -------
Total loans - Gross 828,647 761,655
Allowance for loan losses (14,969) (1.8) (13,529) (1.8)
Unamortized deferred loan fees (3,763) (0.5) (3,742) (0.5)
-------- ------- -------- -------
Total loans - Net $809,915 100.0% $744,384 100.0%
-------- ------- -------- -------
-------- ------- -------- -------
13
RISK ELEMENTS OF THE LOAN PORTFOLIO
NON-PERFORMING ASSETS
Non-performing assets include loans past due 90 days or more and still
accruing interest, non-accrual loans, and OREO. Non-performing assets totaled
$30.4 million as of September 30, 1997 as compared to $30.2 million at year-end
1996. The slight increase in non-performing assets was primarily due to
increases of $7.5 million in non-accrual loans and $1.5 million in loans past
due 90 days or more and still accruing interest, offset by a reduction of $8.8
million in OREO. The non-accrual coverage ratio, which is the allowance for
loan losses to non-performing loans, was 73.53% at September 30, 1997 as
compared to 119.15% at year-end 1996. The decrease in the non-accrual coverage
ratio was primarily attributable to an increase of $9.0 million in non-
performing loans which include non-accrual loans and loans past due 90 days or
more and still accruing interest combined with a $1.4 million increase in the
allowance for loan losses. Although the coverage ratio declined considerably,
management does not expect substantial losses from the non-performing loans
since most of these loans are well collateralized. The increase in non-accrual
loans was significantly due to two commercial loans totaling $4.9 million, both
of which were secured by the first trust deeds on the respective commercial
properties. However, non-performing assets decreased as a percentage of total
loans plus OREO from 3.87% at year-end 1996 to 3.63% at September 30, 1997. The
following table presents the breakdown of non-performing assets by categories as
of the dates indicated:
(Dollars in thousands)
As of As of As of As of
Non-Performing Assets: 09/30/97 06/30/97 03/31/97 12/31/96
-------- -------- -------- --------
Loans past due 90 days or more and
still accruing interest $ 3,516 $ 4,943 $ 56 $ 2,050
Non-accrual loans 16,841 13,618 10,120 9,305
-------- -------- -------- --------
Total past due loans 20,357 18,561 10,176 11,355
Real estate acquired in foreclosure 10,063 10,390 14,202 18,854
-------- -------- -------- --------
Total non-performing assets $30,420 $28,951 $24,378 $30,209
-------- -------- -------- --------
-------- -------- -------- --------
Accruing troubled debt restructurings 2,911 3,673 3,195 3,201
Non-performing assets as a percentage of
period-end total loans plus OREO 3.63% 3.60% 3.01% 3.87%
The balance of $16.8 million in non-accrual loans as of September 30, 1997
consisted mainly of $10.6 million in commercial loans and $5.6 million in
commercial real estate loans. The following tables present the type of
properties securing the loans and the type of businesses the borrowers engaged
in under commercial real estate and commercial non-accrual loan categories as of
the dates indicated:
(Dollars in thousands)
09/30/97 12/31/96
--------------------- -----------------------
Non-accrual Loan Balance
---------------------------------------------
Commercial Commercial
Type of property: Real Estate Commercial Real Estate Commercial
----------- ---------- ----------- ----------
Single/multi-family residence $ 821 $ 618 $ 583 $ 1,707
Commercial 3,092 9,184 226 3,302
Motel 1,350 489 1,350 511
Marina 0 0 769 0
Others 364 132 0 399
Unsecured 0 151 0 84
-------- ------- -------- --------
$ 5,627 $10,574 $ 2,928 $ 6,003
-------- ------- -------- --------
-------- ------- -------- --------
14
(Dollars in thousands)
09/30/97 12/31/96
----------------------- -------------------
Non-accrual Loan Balance
-------------------------------------------
Commercial Commercial
Type of business: Real Estate Commercial Real Estate Commercial
----------- ---------- ----------- ----------
Real estate development $ 0 $ 140 $ 995 $ 562
Wholesale 429 2,647 0 780
Retail 0 246 0 0
Food/Restaurant 0 1,255 0 1,327
Import 752 383 0 305
Motel 1,857 489 1,933 511
Investments 723 3,713 0 0
Industrial 916 378 0 6
Clothing 0 482 0 1,139
Others 950 841 0 1,373
----------- ---------- ----------- ----------
$5,627 $10,574 $2,928 $6,003
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
The previous tables show a $1.4 million balance in non-accrual motel loan as
of September 30, 1997, which represents one credit secured by the first trust
deed on the respective motel located in Southern California. The $3.1 million
non-accrual loans under commercial real estate included six credits, all of
which were secured by the first trust deeds of the respective commercial
properties. Under the non-accrual commercial loan category as of September 30,
1997, the $9.2 million balance consisted of 15 credits including the two credits
totaling $4.9 million mentioned previously plus 13 others with a majority of the
loan amounts less than $300,000. The collateral on these credits include
primarily first trust deeds and secondarily second and third trust deeds on
commercial buildings and warehouses. Although the non-accrual coverage ratio
declined considerably, management does not expect substantial losses from the
non-accrual loans since a majority of these loans are adequately secured.
Troubled debt restructurings totaled $2.9 million as of September 30, 1997,
as compared to $3.2 million at year-end 1996. All of the restructured loans
were current under their revised terms with the exception of one credit in the
amount of $473,000 which was 11 days past due as of September 30, 1997.
There were no loan concentrations to multiple borrowers in similar
activities, which exceeded 10% of total loans as of September 30, 1997.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses amounted to $15.0 million or 1.81% of total
loans as of September 30, 1997, as compared to $13.5 million or 1.78% of total
loans at year-end 1996. The following table presents information relating to
the allowance for loan losses for the periods indicated:
(Dollars in thousands)
YTD YTD YTD YTD
09/30/97 06/30/97 03/31/97 12/31/96
-------- -------- -------- --------
Allowance for loan losses:
Balance at beginning of period $13,529 $13,529 $13,529 $12,742
Allowance from acquisition 0 0 0 1,644
Provision for loan losses 2,700 1,800 900 3,600
Loans charged-off (1,568) (1,346) (39) (5,388)
Recoveries of charged-off loans 308 43 24 931
-------- -------- -------- --------
Balance at end of period $14,969 $14,026 $14,414 $13,529
-------- -------- -------- --------
-------- -------- -------- --------
15
(Dollars in thousands)
YTD YTD YTD YTD
09/30/97 06/30/97 03/31/97 12/31/96
-------- -------- -------- --------
Average loans outstanding during the
period $780,756 $770,763 $754,240 $579,634
Ratio of net charge-offs to average
loans outstanding
during the period (annualized) 0.22% 0.34% 0.01% 0.77%
Provision for loan losses to average
loans outstanding
during the period (annualized) 0.46% 0.47% 0.48% 0.62%
Allowance to non-performing loans at
period-end 73.53% 75.57% 141.65% 119.15%
Allowance to total loans at period-end 1.81% 1.77% 1.81% 1.78%
In determining the allowance for loan losses, management continues to assess
the risks inherent in the loan portfolio, the possible impact of known and
potential problem loans, and other factors such as collateral value, portfolio
composition, loan concentration, financial strength of borrower, and trends in
local economic conditions.
The Bank's allowance for loan losses consists of a specific allowance and a
general allowance. The specific allowance is further broken down to provide for
impaired loans and the remaining internally classified loans. Management
allocates a specific allowance to those remaining internally classified loans
which do not require impairment allowance, based on the current financial
condition of the borrowers and guarantors, the prevailing value of the
underlying collateral and general economic conditions. The general allowance is
determined by an assessment of the overall quality of the unclassified portion
of the loan portfolio as a whole, and by loan type. Management maintained the
percentage assigned to the general allowance based on charge-off history and
management's knowledge of the quality of the portfolio.
The Bank's impaired loans include all non-accrual loans with outstanding
balances equal to or greater than $500,000, all other loans classified
substandard or worse with outstanding balances equal to or greater than $750,000
and all troubled debt restructurings. The following table presents a breakdown
of impaired loans and the impairment allowance related to impaired loans:
(Dollars in thousands)
As of September 30, 1997
------------------------
Impaired loans: Recorded Impairment
Loans with impairment allowance: Investment Allowance
---------- ----------
Commercial $12,245 $ 2,439
Commercial real estate 15,063 2,532
Other 72 36
---------- ----------
Total loans with impairment
allowance $27,380 $ 5,007
---------- ----------
---------- ----------
Management believes the allowance level as of September 30, 1997 to be
adequate to absorb the estimated known and inherent risks identified through its
analysis.
OTHER REAL ESTATE OWNED
The Company's OREO properties, net of a valuation allowance of $1.0 million,
were carried at $10.1 million as of September 30, 1997. This compares with
OREO, net of a valuation allowance of $1.6 million, carried at $18.8 million at
year-end 1996. During the first three quarters of 1997, 12 properties totaling
$11.7 million were disposed of with a net gain of $190,000. As of September 30,
1997, the Bank's OREO properties include different types of residential
properties, commercial buildings, warehouses and land. All properties are
located in Southern California.
The Bank continues to maintain a valuation allowance for the OREO properties
in order to record estimated fair value of the properties. Periodic evaluation
is performed on each property and corresponding adjustment is made to the
valuation allowance. Any decline in value is recognized as non-interest expense
in the current period. During the first nine months of 1997, management
provided
16
approximately $410,000 to the provision for OREO losses based on new
listing prices or new appraisals received.
DEPOSITS
Total deposits rose $55.0 million or 4.0% to $1,419.7 million as of September
30, 1997, as compared to $1,364.7 million at year-end 1996. Time deposits over
$100,000 ("Jumbo CD's"), which were up $39.5 million, continued to account for
the majority of the growth while core deposits (defined as total deposits
excluding brokered deposits and Jumbo CD's) increased $15.5 million. The ratio
of core deposits to total deposits declined slightly from 64.22% at year-end
1996 to 62.83% at September 30, 1997.
Management continues to monitor the Jumbo CD portfolio to identify any
changes in the deposit behavior in the market and of the patrons the Bank is
servicing. The Bank's Jumbo CD's are considered generally less volatile since
1) a majority of the Bank's Jumbo CD's have been fairly consistent based on
statistics which support that a considerable portion of the Jumbo CD's stayed
with the Bank for more than two years; 2) the Jumbo CD portfolio continued to be
diversified with 3,188 individual accounts owned by 2,296 individual depositors
as of May 30, 1997. The balance of the accounts averaged approximately
$155,000; and 3) this phenomenon of having relatively higher percentage of Jumbo
CD's exists in most of the Asian American banks in the Company's market which is
dictated by the fact that the customers in this market tend to have a higher
savings rate. However, management has constantly made efforts to discourage the
continued growth in Jumbo CD's, such as to diversify the customer base by branch
expansion and acquisition, to offer non-competitive interest rates paid on Jumbo
CD's and to develop new transaction-based products to attract depositors. There
were no brokered deposits as of September 30, 1997. The following table
illustrates the deposit mix on the dates indicated:
(Dollars in thousands)
As of 09/30/97 As of 12/31/96
-------------------- --------------------
Amount Percent Amount Percent
---------- ------- ---------- -------
Types of deposits:
Demand $ 160,854 11.3% $ 135,345 9.9%
NOW accounts 112,940 8.0 118,498 8.7
Money market accounts 98,207 6.9 95,158 7.0
Savings deposits 211,744 14.9 224,443 16.4
Time deposits under $100,000 308,209 21.7 302,981 22.2
Time deposits of $100,000 or more 527,781 37.2 488,315 35.8
---------- ------- ---------- -------
Total deposits $1,419,735 100.0% $1,364,740 100.0%
---------- ------- ---------- -------
---------- ------- ---------- -------
CAPITAL RESOURCES
Stockholders' equity amounted to $131.8 million or 8.39% of total assets as
of September 30, 1997, as compared to $118.4 million or 7.87% of total assets at
year-end 1996. The $13.4 million or 11.3% increase in stockholders' equity was
primarily attributable to year-to-date net income of $14.8 million, plus $1.1
million from issuance of additional common shares through Dividend Reinvestment
Plan and a positive net change in the securities valuation allowance, net of
tax, of $1.5 million, offset by dividends paid in the amount of $4.0 million.
The Company declared a cash dividend of $0.15 per share in January, April and
July, 1997, on 8,878,144, 8,895,878 and 8,914,260 shares outstanding,
respectively. In October 1997, the Company declared another cash dividend of
$0.175 per share on 8,929,508 shares outstanding. Total cash dividends paid in
1997, including the $1.6 million paid in October 1997, amounted to $5.6 million.
Management is committed to retain the Company's capital at a level sufficient
to support future growth, to protect depositors, to absorb any unanticipated
losses and to comply with various regulatory requirements. As presented in the
following tables, the Company and the Bank's capital and leverage ratios well
exceeded the regulatory minimum requirements as of September 30, 1997. The
capital ratios of the Bank place it in the "well capitalized" category which is
defined as institutions with
17
total risk-based ratio equal to or greater than 10.0%, Tier 1 risk-based capital
ratio equal to or greater than 6.0% and Tier 1 leverage capital ratio equal to
or greater than 5.0%.
(Dollars in thousands)
Company Bank
As of 09/30/1997 As of 09/30/1997
Balance Percent Balance Percent
Tier 1 capital (to risk-weighted
assets) $121,674* 11.32% $118,488* 11.02%
Tier 1 capital minimum requirement 42,997 4.00 42,997 4.00
-------- ------ ------- ------
Excess $ 78,677 7.32% $75,491 7.02%
-------- ------ ------- ------
-------- ------ ------- ------
Total capital (to risk-weighted assets) $135,130* 12.57% $131,944* 12.27%
Total capital minimum requirement 85,995 8.00 85,995 8.00
-------- ------ -------- ------
Excess $ 49,135 4.57% $ 45,949 4.27%
-------- ------ -------- ------
-------- ------ -------- ------
Risk-weighted assets $1,074,936 $1,074,934
Tier 1 capital (to average assets)
- Leverage ratio $121,674* 7.89% $ 118,488* 7.69%
Minimum leverage requirement 61,668 4.00 61,668 4.00
-------- ------ -------- ------
Excess $ 60,006 3.89% $ 56,820 3.69%
-------- ------ -------- ------
-------- ------ -------- ------
Total average assets $1,541,705 $1,541,701
* Excluding the unrealized holding gains on securities available-for-sale of
$435,000, and goodwill of $9,696,000.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Liquidity is the Company's ability to maintain sufficient cash flow to meet
maturing financial obligations and customer credit needs. The Company derives
liquidity primarily from various types of deposits. In addition, liquidity can
be obtained from assets as well, which include cash and cash equivalents, time
deposits with other depository institutions, Federal funds sold and repurchases,
unpledged securities available-for-sale, and unpledged securities held-to-
maturity. The Company's liquidity ratio (defined as net cash, short-term and
marketable securities to net deposits and short-term liabilities) stood at
47.46% as of September 30, 1997, which was slightly higher than 47.09% at year-
end 1996.
To further enhance its liquidity, the Bank maintains a total credit line of
$45 million for Federal funds with three correspondent banks, a repo line of $30
million with BancAmerica Robertson Stephens and a total retail certificate of
deposit (CD) line of approximately $211 million with three brokerage firms.
Moreover, the Bank is a shareholder of Federal Home Loan Bank (FHLB) since
January 1993, which enables the Bank to have access to lower cost FHLB financing
when and if necessary. Management believes all the above-mentioned sources will
provide adequate liquidity to the Company to meet its daily operating needs.
Interest sensitivity risk management minimizes the risk to net interest
income resulting from the changes in market interest rates. Although no single
measure can completely identify the impact of changes in interest rates on net
interest income, gap analysis is one gauge to identify the differences between
rate sensitive assets and rate sensitive liabilities over certain periods of
time. A positive gap exists when rate sensitive assets which reprice over a
given time period exceed rate sensitive liabilities and may enhance net interest
margin during periods of increasing interest rates, while a negative gap exists
when rate sensitive liabilities which reprice over a given time period exceed
rate sensitive assets and may impair net interest margin during periods of
increasing interest rates. As of September 30, 1997, the Company was asset
sensitive with a cumulative gap ratio of a positive 18.43% within three months,
and liability sensitive with a cumulative gap ratio of a negative 10.05% within
a 1-year period.
18
A gap report can show mismatches in the maturities and repricing
opportunities of assets and liabilities, but has limited usefulness in measuring
or managing interest rate risks related to timing differences in the repricing
of assets and liabilities or the basis risk which is the differences in the
behavior of the lending and funding rates. To quantify the extent of these
risks, the Company uses simulation model to take basis risk into account and
project future earnings or market values under alternative interest rate
scenarios. The simulation is used to measure the volatility of net interest
income under a rising or falling interest rate scenario for comparison against
the Company's policy limit, which is to manage the net interest income
volatility to a change of plus or minus 30% when the hypothetical rate change is
plus or minus 200 basis points.
19
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company, including its wholly-owned subsidiary, Cathay Bank, has been a
party to ordinary routine litigation incidental to various aspects of its
operations.
Management is not currently aware of any other litigation that will have
material adverse impact on the Company's consolidated financial condition, or
the results of operations.
ITEM 2. CHANGES IN SECURITIES
There have been no changes in securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no reportable events.
ITEM 5. OTHER INFORMATION
There were no reportable events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reportable events.
Exhibit:
27 Financial Data Schedule
20
SIGNATURES
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.
Cathay Bancorp, Inc.
--------------------
(Registrant)
Date: November 13, 1997 DUNSON K. CHENG
----------------- --------------------
Dunson K. Cheng
Chairman and President
Date: November 13, 1997 ANTHONY M. TANG
----------------- ----------------------
Anthony M. Tang
Chief Financial Officer