Exhibit 99.1
Page 1
FOR IMMEDIATE RELEASE
- ---------------------
For: Cathay General Bancorp Contact: Heng W. Chen
777 N. Broadway (213) 625-4752
Los Angeles, CA 90012
CATHAY GENERAL BANCORP ANNOUNCES RECORD EARNINGS OF $29.1 MILLION,
------------------------------------------------------------------
OR $0.56 PER SHARE, IN SECOND QUARTER 2006
------------------------------------------
Los Angeles, Calif., July 20: Cathay General Bancorp (the "Company",
NASDAQ: CATY), the holding company for Cathay Bank (the "Bank"), today announced
results for the second quarter of 2006.
STRONG FINANCIAL PERFORMANCE
Second Quarter Second Quarter
2006 2005
--------------- ---------------
Net income $ 29.1 million $ 25.7 million
Basic earnings per share $ 0.57 $ 0.51
Diluted earnings per share $ 0.56 $ 0.51
Return on average assets 1.60% 1.68%
Return on average stockholders' equity 14.45% 14.07%
Efficiency ratio 37.85% 37.08%
HIGHLIGHTS
o Second quarter earnings increased $3.4 million, or 12.9%, compared to the
same quarter a year ago.
o Second quarter diluted earnings per share reached $0.56, increasing 9.8%,
compared to the same quarter a year ago.
o Return on average assets was 1.60% for the quarter ended June 30, 2006,
compared to 1.67% for the quarter ended March 31, 2006 and compared to
1.68% for the same quarter a year ago.
o Return on average stockholders' equity was 14.45% for the quarter ended
June 30, 2006, compared to 14.06% for the quarter ended March 31, 2006, and
compared to 14.07% for the same quarter a year ago.
o Gross loans excluding the loans acquired through Great Eastern Bank ("GEB")
increased by $185.8 million, or 3.7%, from March 31, 2006 to June 30, 2006.
o We acquired 84.1% of the shares of GEB on April 7, 2006 and on July 6,
2006, the Company entered into an agreement with Chicago based New Asia
Bancorp to acquire all of its outstanding shares.
"We are pleased to report another record quarter of earnings while the
Company announced its expansion into the Chicago market through a merger with
New Asia Bancorp. Solid organic loan growth and strong net interest income were
the main factors that contributed to the record second quarter results,"
commented Dunson Cheng, Chairman of the Board, Chief Executive Officer, and
President of the Company.
"We expect to open a loan production office in Dallas during the third
quarter and a new branch in Bellevue, Washington during the fourth quarter. We
continue to be pleased by the level of retention of customers and key officers
of Great Eastern Bank to date," said Peter Wu, Executive Vice Chairman and Chief
Operating Officer.
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"While the flat yield curve and the strong competition for core deposits
continue to present challenges, we are still optimistic that 2006 should be
another record year for Cathay General Bancorp," concluded Dunson Cheng.
INCOME STATEMENT REVIEW
The comparability of financial information is affected by our acquisitions.
Operating results included the operations of acquired entities from the date of
acquisition.
Net interest income before provision for loan losses
Net interest income before provision for loan losses increased $11.9
million, or 20.0%, to $71.1 million during the second quarter of 2006 from $59.2
million during the same quarter a year ago. The increase was due primarily to
the strong growth in loans as well as the acquisition of GEB on April 7, 2006.
The net interest margin, on a fully taxable-equivalent basis, was 4.27% for
the second quarter of 2006. The net interest margin decreased six basis points
from 4.33% in the first quarter of 2006 and increased five basis points from
4.22% in the second quarter of 2005. The year to year increase in the net
interest margin was primarily a result of the loan growth, the decrease in
securities as a percentage of earning assets, and the increases in short term
interest rates.
For the second quarter of 2006, the yield on average interest-earning
assets was 7.26% on a fully taxable-equivalent basis, and the cost of funds on
average interest-bearing liabilities equaled 3.60%. In comparison, for the
second quarter of 2005, the yield on average interest-earning assets was 6.01%
and cost of funds on average interest-bearing liabilities equaled 2.20%. The
interest spread decreased primarily due to the increase in wholesale borrowing
rates.
Provision for loan losses
The provision for loan losses was $1.5 million for the second quarter of
2006 compared to negative $500,000 provision for loan losses for the second
quarter of 2005 and a $1.5 million provision for loan losses for the first
quarter of 2006. The provision for loan losses was based on the review of the
adequacy of the allowance for loan losses at June 30, 2006. The provision for
loan losses represents the charge or credit against current earnings that is
determined by management, through a credit review process, as the amount needed
to establish an allowance that management believes to be sufficient to absorb
loan losses inherent in the Company's loan portfolio. The following table
summarizes the charge-offs and recoveries for the quarters shown:
For the three months ended,
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(Dollars in thousands) June 30, 2006 March 31, 2006 June 30, 2005
- ----------------------------------- -------------- -------------- --------------
Charge-offs $ 544 $ 265 $ 270
Recoveries 422 241 430
-------------- -------------- --------------
Net Charge-offs (Recoveries) $ 122 $ 24 $ (160)
-------------- -------------- --------------
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Non-interest income
Non-interest income, which includes revenues from service charges on
deposit accounts, letters of credit commissions, securities gains (losses),
gains (losses) on loan sales, wire transfer fees, and other sources of fee
income, was $5.8 million for the second quarter of 2006, an increase of
$312,000, or 5.7%, compared to the non-interest income of $5.4 million for the
second quarter of 2005.
Letter of credit commissions increased $536,000, or 53.6%, to $1.5 million
in the second quarter of 2006 from $1.0 million in the second quarter of 2005
primarily due to a $327,000 increase in standby letter of credit commissions and
a $105,000 increase in export letter of credit commissions.
Service charges on deposit accounts decreased $147,000, or 10.6%, from $1.4
million in the second quarter of 2005 to $1.2 million in the second quarter of
2006 due primarily to the reclassification of certain wire transfer fees from
depository service fees to other operating income in 2006.
Other operating income increased $855,000, or 37.1%, from $2.3 million in
the second quarter of 2005 to $3.2 million in the second quarter of 2006
primarily due to the increase in wealth management commissions of $345,000,
increase in commissions on safe deposit boxes and cashier checks of $189,000,
and the increase in wire transfer fees of $156,000 due to the acquisition of
GEB.
The above increases were offset by the decrease in securities gains. For
the second quarter of 2006, the Company recorded $187,000 of securities losses
compared to $745,000 of securities gains recorded in the same quarter a year
ago.
Non-interest expense
Non-interest expense increased $5.1 million, or 21.3%, to $29.1 million in
the second quarter of 2006 compared to the same quarter a year ago. The
efficiency ratio was 37.85% for the second quarter of 2006 compared to 37.08% in
the year ago quarter and 36.07% for the first quarter of 2006.
The increase of non-interest expense was primarily due to the following:
o Salaries and employee benefits increased $3.1 million, or 23.4%,
from $13.0 million in the second quarter of 2005 to $16.1 million
in the second quarter of 2006 due primarily to the merger with
GEB and an increase in stock option compensation expense of
$303,000.
o Occupancy expenses increased $559,000, or 25.8%, primarily due to
the increases of $213,000 in rent expenses, $169,000 in repair
and maintenance expenses and $74,000 in property taxes all due
primarily to the acquisition of GEB.
o Computer and equipment expenses increased $233,000, or 12.8%,
primarily due to a $157,000 system conversion charge for the
conversion of GEB customers to the Company's data processing
system.
o Professional services expenses decreased $285,000, or 15.3%, due
primarily to the decrease of $145,000 in internal audit
outsourcing expenses and a decrease of $222,000 in consulting
expenses.
o Marketing expenses increased $216,000, or 31.1%, in the second
quarter of 2006 compared to the same quarter a year ago mainly
due to increases in charitable contributions.
o OREO expenses increased $411,000 due the increased expenses of
$128,000 and a $283,000 writedown of OREO.
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o Expenses from operation of affordable housing investments
increased $353,000, or 37.3%, to $1.3 million compared to
$946,000 in the same quarter a year ago as a result of the
funding of additional investments in affordable housing during
the last two years.
o Amortization of core deposit premium increased $172,000, or
12.3%, due to the merger with GEB.
o Other operating expenses increased $387,000, or 21.5%, due to
increases in printing and supply expenses, postage and travel
expenses, primarily as a result of the acquisition of GEB.
Income taxes
The effective tax rate was 37.2% for the second quarter of 2006, compared
to 37.5% for the same quarter a year ago and 37.5% for the full year 2005. The
decrease in the effective tax rate was primarily due to the increase in low
income housing tax credits.
As previously disclosed, on December 31, 2003, the California Franchise Tax
Board (FTB) announced its intent to list certain transactions that in its view
constitute potentially abusive tax shelters. Included in the transactions
subject to this listing were transactions utilizing regulated investment
companies (RICs) and real estate investment trusts (REITs). As part of the
notification indicating the listed transactions, the FTB also indicated its
position that it intends to disallow tax benefits associated with these
transactions. While the Company continues to believe that the tax benefits
recorded in three prior years with respect to its RIC were appropriate and fully
defensible under California law, the Company has deemed it prudent to
participate in Voluntary Compliance Initiative - Option 2, requiring payment of
all California taxes and interest on these disputed 2000 through 2002 tax
benefits, and permitting the Company to claim a refund for these years while
avoiding certain potential penalties. The Company retains potential exposure for
assertion of an accuracy-related penalty should the FTB prevail in its position
in addition to the risk of not being successful in its refund claims. As of June
30, 2006, the Company reflected a $12.1 million net state tax receivable for the
years 2000, 2001, and 2002 after giving effect to reserves for loss
contingencies on the refund claims, or an equivalent of $7.9 million after
giving effect to Federal tax benefits. The FTB is currently in the process of
reviewing and assessing our refund claims for taxes and interest for tax years
2000 through 2002. Although the Company believes its tax deductions related to
the regulated investment company were appropriate and fully defensible, there
can be no assurance of the outcome of its refund claims, and an adverse outcome
on the refund claims could result in a loss of all or a portion of the $7.9
million net state tax receivable after giving effect to Federal tax benefits.
BALANCE SHEET REVIEW
Total assets increased by $1.1 billion, or 16.6%, to $7.5 billion at June
30, 2006 from year-end 2005 of $6.4 billion. The increase in total assets was
represented primarily by loan growth and investment securities increase funded
by growth of deposits and borrowings. At April 6, 2006, the closing date of the
tender offer for GEB, the total fair value of GEB's assets was approximately
$332.6 million excluding intangible assets.
The growth of gross loans to $5.4 billion as of June 30, 2006, from $4.6
billion as of December 31, 2005, represents an increase of $755.1 million, or
16.3%, of which $212.1 million resulted from the acquisition of GEB on April 7,
2006.
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The changes in the loan composition from December 31, 2005, are presented
below:
June 30, December 31,
TYPE OF LOANS: 2006 2005 % Change
- ----------------------------------- -------------- -------------- --------------
(Dollars in thousands)
Commercial $ 1,138,568 $ 1,110,401 3
Residential mortgage 378,512 326,249 16
Commercial mortgage 3,145,623 2,590,752 21
Equity lines 107,036 105,040 2
Real estate construction 615,292 500,027 23
Installment 16,185 13,662 18
Other 1,722 1,684 2
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Gross loans and leases $ 5,402,938 $ 4,647,815 16
Allowance for loan losses (65,106) (60,251) 8
Unamortized deferred loan fees (14,387) (12,733) 13
-------------- --------------
Total loans and leases, net $ 5,323,445 $ 4,574,831 16
============== ==============
Total deposits increased $337.6 million, or 6.9%, to $5.3 billion from
December 31, 2005, of $4.9 billion, of which $294.0 million resulted from the
acquisition of GEB on April 7, 2006. The changes in the deposit composition from
December 31, 2005, are presented below:
June 30, December 31,
DEPOSITS 2006 2005 % Change
- ----------------------------------- -------------- -------------- --------------
(Dollars in thousands)
Non-interest-bearing demand $ 742,018 $ 726,722 2
NOW 238,385 240,885 (1)
Money market 606,352 523,076 16
Savings 397,242 364,793 9
Time deposits under $100,000 781,292 641,411 22
Time deposits of $100,000 or more 2,488,621 2,419,463 3
-------------- --------------
Total deposits $ 5,253,910 $ 4,916,350 7
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At June 30, 2006, brokered deposits totaled $82.4 million compared to no
brokered deposits at December 31, 2005.
Advances from the Federal Home Loan Bank increased $492.6 million to $707.6
million at Ju ne 30, 2006, compared to $215.0 million at December 31, 2005.
Securities sold under agreement to repurchase increased from $200.0 million at
December 31, 2005, to $400.0 million at June 30, 2006. Federal funds purchased
decreased $75.0 million to $44.0 million at June 30, 2006, from $119.0 million
at December 31, 2005.
ASSET QUALITY REVIEW
Non-performing assets to gross loans was 0.44% at June 30, 2006, compared
to 0.39% at December 31, 2005. Total non-performing assets increased $10.3
million to $28.2 million at June 30, 2006, compared with $17.9 million at
December 31, 2005, primarily due to a $4.3 million increase in other real estate
owned, a $4.8 million increase in non-accrual loans and a $1.2 million increase
in accruing loans past due 90 days or more. The non-performing assets included
$576,000 non-accrual loans and $486,000 accruing loans past due 90 days or more
from GEB.
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The allowance for loan losses amounted to $65.1 million at June 30, 2006,
and represented the amount that the Company believes to be sufficient to absorb
loan losses inherent in the Company's loan portfolio. The allowance for loan
losses represented 1.21% of period-end gross loans and 273% of non-performing
loans at June 30, 2006. The comparable ratios were 1.30% of gross loans and 337%
of non-performing loans at December 31, 2005. Results of the changes to the
Company's non-performing assets and troubled debt restructurings are highlighted
below:
June 30, December 31,
(Dollars in thousands) 2006 2005 % Change
-------------- -------------- --------------
NON-PERFORMING ASSETS
Accruing loans past due
90 days or more $ 3,315 $ 2,106 57
Non-accrual loans 20,491 15,799 30
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Total non-performing loans 23,806 17,905 33
Other real estate owned 4,347 0
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Total non-performing assets $ 28,153 $ 17,905 57
-------------- --------------
Troubled debt restructurings $ 2,740 $ 3,088 (11)
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CAPITAL ADEQUACY REVIEW
At June 30, 2006, the Tier 1 risk-based capital ratio of 9.46%, total
risk-based capital ratio of 10.47%, and Tier 1 leverage capital ratio of 8.87%,
continue to place the Company in the "well capitalized" category, which is
defined as institutions with a Tier 1 risk-based capital ratio equal to or
greater than six percent, a total risk-based capital ratio equal to or greater
than ten percent, and a Tier 1 leverage capital ratio equal to or greater than
five percent. At December 31, 2005, the Company's Tier 1 risk-based capital
ratio was 10.61%, the total risk-based capital ratio was 11.72%, and Tier 1
leverage capital ratio was 9.80%.
No shares were repurchased during the second quarter of 2006. At June 30,
2006, 451,703 shares remain under the Company's latest stock buyback
authorization which was announced on March 18, 2005.
YEAR-TO-DATE REVIEW
Net income was $56.4 million, or $1.10 per diluted share for the six months
ended June 30, 2006, an increase of $5.7 million, or 11.2%, in net income over
the $50.7 million, or $0.99 per diluted share for the same period a year ago due
primarily to increases in net interest income. The net interest margin for the
six months ended June 30, 2006, increased 8 basis points to 4.30% compared to
4.22% in the same period a year ago.
Return on average stockholders' equity was 14.26% and return on average
assets was 1.64% for the six months of 2006, compared to a return on average
stockholders' equity of 14.02% and a return on average assets of 1.66% for the
six months of 2005. The efficiency ratio for the six months ended June 30, 2006
was 37.00% compared to 36.17% during the same period a year ago.
ABOUT CATHAY GENERAL BANCORP
Cathay General Bancorp is the holding company for Cathay Bank, a California
state-chartered bank. Founded in 1962, Cathay Bank offers a wide range of
financial services. Cathay Bank currently operates thirty branches in
California, nine branches in New York State, one in Massachusetts, one in
Houston, Texas, two in Washington State, and representative offices in Taipei,
Hong Kong, and Shanghai. Cathay Bank's website is found at
http://www.cathaybank.com/.
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FORWARD-LOOKING STATEMENTS AND OTHER NOTICES
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 "believes," "expects," "anticipates," "intends," "plans," "estimates," "may,"
"will," "should," "could," "predicts," "potential," "continue," or the negative
of such terms and other comparable terminology or similar expressions.
Forward-looking statements are not guarantees. They involve known and unknown
risks, uncertainties, and other factors that may cause the actual results,
performance, or achievements, of Cathay General Bancorp to be materially
different from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such risks and uncertainties and
other factors include, but are not limited to, adverse developments or
conditions related to or arising from: expansion into new market areas;
acquisitions of other banks, if any; fluctuations in interest rates; demographic
changes; earthquake or other natural disasters; competitive pressures;
deterioration in asset or credit quality; changes in the availability of
capital; legislative and regulatory developments; changes in business strategy,
including the formation of a real estate investment trust; general economic or
business conditions in California and other regions where the Bank has
operations. There can be no guarantee that any transaction between Cathay
General Bancorp and New Asia Bancorp will consummate. This press release does
not constitute an offer to sell or a solicitation of an offer to buy any
securities of Cathay General Bancorp.
These and other factors are further described in Cathay General Bancorp's
Annual Report on Form 10-K for the year ended December 31, 2005, its reports and
registration statements filed with the Securities and Exchange Commission
("SEC") and other filings it makes in the future with the SEC from time to time.
Cathay General Bancorp has no intention and undertakes no obligation to update
any forward-looking statements or to publicly announce the results of any
revision of any forward-looking statement to reflect future developments or
events.
Cathay General Bancorp's filings with the SEC are available to the public
from commercial document retrieval services and at the website maintained by the
SEC at http://www.sec.gov, or by request directed to Cathay General Bancorp, 777
N. Broadway, Los Angeles, CA 90012, Attention: Investor Relations (213)
625-4749.
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CATHAY GENERAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------------- ------------------------------------
(Dollars in thousands, except per share data) 2006 2005 % Change 2006 2005 % Change
- --------------------------------------------------- -------- -------- -------- ---------- ---------- --------
FINANCIAL PERFORMANCE
Net interest income before provision for loan
losses $ 71,050 $ 59,188 20 $ 136,191 $ 117,952 15
Provision for loan losses 1,500 (500) (400) 3,000 500 500
-------- -------- ---------- ----------
Net interest income after provision
for loan losses 69,550 59,688 17 133,191 117,452 13
Non-interest income 5,751 5,439 6 10,826 11,452 (5)
Non-interest expense 29,069 23,964 21 54,395 46,807 16
-------- -------- ---------- ----------
Income before income tax expense 46,232 41,163 12 89,622 82,097 9
Income tax expense 17,180 15,429 11 33,234 31,403 6
-------- -------- ---------- ----------
Net income $ 29,052 $ 25,734 13 $ 56,388 $ 50,694 11
======== ======== ========== ==========
Net income per common share:
Basic $ 0.57 $ 0.51 12 $ 1.11 $ 1.00 11
Diluted $ 0.56 $ 0.51 10 $ 1.10 $ 0.99 11
Cash dividends paid per common share $ 0.09 $ 0.09 - $ 0.18 $ 0.18 -
SELECTED RATIOS
Return on average assets 1.60% 1.68% (5) 1.64% 1.66% (1)
Return on average stockholders' equity 14.45% 14.07% 3 14.26% 14.02% 2
Efficiency ratio 37.85% 37.08% 2 37.00% 36.17% 2
Dividend payout ratio 15.94% 17.76% (10) 16.23% 18.01% (10)
YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets 7.26% 6.01% 21 7.11% 5.90% 21
Total interest-bearing liabilities 3.60% 2.20% 64 3.40% 2.06% 65
Net interest spread 3.66% 3.81% (4) 3.71% 3.84% (3)
Net interest margin 4.27% 4.22% 1 4.30% 4.22% 2
June 30, June 30, December 31,
2006 2005 2005
-------- -------- ------------
CAPITAL RATIOS
Tier 1 risk-based capital ratio 9.46% 10.60% 10.61%
Total risk-based capital ratio 10.47% 11.83% 11.72%
Tier 1 leverage capital ratio 8.87% 9.03% 9.80%
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CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2006 2005 % change
------------ ------------ ------------
(In thousands, except share
and per share data)
ASSETS
Cash and due from banks $ 119,177 $ 109,275 9
Securities available-for-sale (amortized cost of $1,432,233 at
June 30, 2006 and $1,240,308 at December 31, 2005) 1,390,181 1,217,438 14
Loans 5,402,938 4,647,815 16
Less: Allowance for loan losses (65,106) (60,251) 8
Unamortized deferred loan fees, net (14,387) (12,733) 13
------------ ------------
Loans, net 5,323,445 4,574,831 16
Federal Home Loan Bank stock 33,582 29,698 13
Other real estate owned, net 4,347 - 100
Affordable housing investments, net 77,419 80,211 (3)
Premises and equipment, net 63,133 30,290 108
Customers' liability on acceptances 23,504 16,153 46
Accrued interest receivable 31,319 24,767 26
Goodwill 306,627 239,527 28
Other intangible assets, net 44,966 41,508 8
Other assets 39,950 33,805 18
------------ ------------
Total assets $ 7,457,650 $ 6,397,503 17
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest-bearing demand deposits $ 742,018 $ 726,722 2
Interest-bearing deposits:
NOW deposits 238,385 240,885 (1)
Money market deposits 606,352 523,076 16
Savings deposits 397,242 364,793 9
Time deposits under $100,000 781,292 641,411 22
Time deposits of $100,000 or more 2,488,621 2,419,463 3
------------ ------------
Total deposits 5,253,910 4,916,350 7
------------ ------------
Federal funds purchased 44,000 119,000 (63)
Securities sold under agreement to repurchase 400,000 200,000 100
Advances from the Federal Home Loan Bank 707,580 215,000 229
Other borrowings from financial institutions 28,000 20,000 40
Other borrowings from affordable housing investments 19,982 20,507 (3)
Junior subordinated notes 54,006 53,976 0
Acceptances outstanding 23,504 16,153 46
Minority interest in consolidated subsidiaries 8,500 8,500 -
Other liabilities 56,251 54,400 3
------------ ------------
Total liabilities 6,595,733 5,623,886 17
------------ ------------
Commitments and contingencies - - -
------------ ------------
Total stockholders' equity 861,917 773,617 11
------------ ------------
Total liabilities and stockholders' equity $ 7,457,650 $ 6,397,503 17
============ ============
Book value per share $ 16.73 $ 15.41 9
Number of common stock shares outstanding 51,512,705 50,191,089
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CATHAY GENERAL BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
Three months ended June 30, Six months ended June 30,
---------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(In thousands, except share
and per share data)
INTEREST AND DIVIDEND INCOME
Loan receivable, including loan fees $ 104,158 $ 67,268 $ 194,244 $ 128,522
Securities available-for-sale - taxable 15,381 15,604 28,527 33,537
Securities available-for-sale - nontaxable 707 940 1,429 1,923
Federal Home Loan Bank stock 369 344 717 643
Agency preferred stock 295 203 504 303
Federal funds sold and securities
purchased under agreements to resell 102 190 130 211
Deposits with banks 87 102 154 180
------------ ------------ ------------ ------------
Total interest and dividend income 121,099 84,651 225,705 165,319
------------ ------------ ------------ ------------
INTEREST EXPENSE
Time deposits of $100,000 or more 24,390 12,663 45,828 22,854
Other deposits 12,714 8,589 22,607 15,456
Securities sold under agreements to repurchase 4,013 - 6,526 14
Advances from Federal Home Loan Bank 6,894 3,082 10,693 6,904
Junior subordinated notes 1,110 853 2,151 1,628
Short-term borrowings 928 276 1,709 511
------------ ------------ ------------ ------------
Total interest expense 50,049 25,463 89,514 47,367
------------ ------------ ------------ ------------
Net interest income before provision for loan losses 71,050 59,188 136,191 117,952
Provision for loan losses 1,500 (500) 3,000 500
------------ ------------ ------------ ------------
Net interest income after provision for loan losses 69,550 59,688 133,191 117,452
------------ ------------ ------------ ------------
NON-INTEREST INCOME
Securities (losses) gains, net (187) 745 (609) 1,122
Letters of credit commissions 1,537 1,001 2,606 2,036
Depository service fees 1,238 1,385 2,493 2,896
Gains on sale of premises and equipment - - - 958
Other operating income 3,163 2,308 6,336 4,440
------------ ------------ ------------ ------------
Total non-interest income 5,751 5,439 10,826 11,452
------------ ------------ ------------ ------------
NON-INTEREST EXPENSE
Salaries and employee benefits 16,071 13,021 30,111 25,442
Occupancy expense 2,727 2,168 4,807 4,177
Computer and equipment expense 2,058 1,825 3,668 3,574
Professional services expense 1,578 1,863 3,219 3,386
FDIC and State assessments 254 244 503 496
Marketing expense 911 695 1,606 1,155
Other real estate owned expense (income) 411 1 496 (103)
Operations of affordable housing investments 1,299 946 2,598 1,965
Amortization of core deposit intangibles 1,576 1,404 2,977 3,146
Other operating expense 2,184 1,797 4,410 3,569
------------ ------------ ------------ ------------
Total non-interest expense 29,069 23,964 54,395 46,807
------------ ------------ ------------ ------------
Income before income tax expense 46,232 41,163 89,622 82,097
Income tax expense 17,180 15,429 33,234 31,403
------------ ------------ ------------ ------------
Net income 29,052 25,734 56,388 50,694
------------ ------------ ------------ ------------
Other comprehensive loss (gain), net of tax (4,278) 9,078 (11,117) (4,818)
------------ ------------ ------------ ------------
Total comprehensive income $ 24,774 $ 34,812 $ 45,271 $ 45,876
============ ============ ============ ============
Net income per common share:
Basic $ 0.57 $ 0.51 $ 1.11 $ 1.00
Diluted $ 0.56 $ 0.51 $ 1.10 $ 0.99
Cash dividends paid per common share $ 0.09 $ 0.09 $ 0.18 $ 0.18
Basic average common shares outstanding 51,390,534 50,497,321 50,811,866 50,601,527
Diluted average common shares outstanding 51,890,487 50,868,919 51,300,063 51,038,046
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CATHAY GENERAL BANCORP
AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
For the three months ended,
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June 30, 2006 June 30, 2005 March 31, 2006
------------------------ ------------------------ ------------------------
Average Average Average Average Average Average
Balance Yield/Rate Balance Yield/Rate Balance Yield/Rate
(In thousands) (1)(2) (1)(2) (1)(2)
- ------------------------------------------------ ------------ ---------- ------------ ---------- ------------ ----------
INTEREST-EARNING ASSETS
Loans and leases (1) $ 5,285,231 7.90% $ 4,063,720 6.64% $ 4,838,651 7.55%
Taxable securities available-for-sale 1,289,299 4.79% 1,452,066 4.31% 1,161,798 4.59%
Tax-exempt securities available-for-sale (2) 85,393 7.01% 104,517 6.62% 86,755 6.54%
FHLB & FRB stock 30,171 4.91% 29,502 4.67% 29,756 4.74%
Federal funds sold and securities purchased
under agreements to resell 9,723 4.21% 25,730 2.95% 2,622 4.33%
Deposits with banks 17,235 2.02% 9,178 4.47% 19,340 1.41%
------------ ---------- ------------ ---------- ------------ ----------
Total interest-earning assets $ 6,717,052 7.26% $ 5,684,713 6.01% $ 6,138,922 6.94%
------------ ------------ ------------
INTEREST-BEARING LIABILITIES
Interest-bearing demand deposits $ 245,933 1.25% $ 246,533 0.52% $ 242,462 0.95%
Money market 577,276 2.65% 534,812 1.19% 575,759 2.30%
Savings deposits 405,519 0.92% 398,181 0.40% 357,795 0.77%
Time deposits 3,258,591 3.89% 2,924,412 2.60% 3,095,301 3.51%
------------ ---------- ------------ ---------- ------------ ----------
Total interest-bearing deposits $ 4,487,319 3.32% $ 4,103,938 2.08% $ 4,271,317 2.97%
Federal funds purchased 45,357 4.98% 32,280 3.01% 45,028 4.53%
Securities sold under agreements to repurchase 400,000 4.02% - 0.00% 280,000 3.64%
Other borrowed funds 647,259 5.19% 502,750 3.17% 438,895 4.73%
------------ ---------- ------------ ---------- ------------ ----------
Total interest-bearing liabilities 5,579,935 3.60% 4,638,968 2.20% 5,035,240 3.18%
Non-interest-bearing demand deposits 776,203 688,583 717,599
------------ ------------ ------------
Total deposits and other borrowed funds $ 6,356,138 $ 5,327,551 $ 5,752,839
------------ ------------ ------------
Total average assets $ 7,264,557 $ 6,142,639 $ 6,628,833
Total average stockholders' equity $ 806,534 $ 733,666 $ 788,565
------------ ------------ ------------
For the six months ended,
------------------------------------------------------------
June 30, 2006 June 30, 2005
---------------------------- ----------------------------
Average Average Average Average
Balance Yield/Rate Balance Yield/Rate
(In thousands) (1)(2) (1)(2)
- ------------------------------------------------ ------------ ------------ ------------ ------------
INTEREST-EARNING ASSETS
Loans and leases $ 5,063,174 7.74% $ 3,989,136 6.50%
Taxable securities available-for-sale 1,225,901 4.69% 1,544,321 4.38%
Tax-exempt securities available-for-sale (1) 86,070 6.78% 106,418 6.40%
FHLB & FRB stock 29,964 4.83% 29,031 4.47%
Federal funds sold and securities purchased
under agreements to resell 6,192 4.23% 14,721 2.89%
Deposits with banks 18,281 1.70% 8,593 4.22%
------------ ------------
Total interest-earning assets $ 6,429,582 7.11% $ 5,692,220 5.90%
------------ ------------
INTEREST-BEARING LIABILITIES
Interest-bearing demand deposits $ 244,207 1.10% $ 246,803 0.46%
Money market deposits 576,522 2.48% 559,270 1.15%
Savings deposits 381,789 0.85% 403,352 0.39%
Time deposits 3,177,397 3.71% 2,817,187 2.42%
------------ ------------
Total interest-bearing deposits $ 4,379,915 3.15% $ 4,026,612 1.92%
Federal funds purchased 45,193 4.76% 35,243 2.74%
Securities sold under agreements to repurchase 340,331 3.87% 1,293 2.18%
Other borrowed funds 543,653 5.00% 578,510 2.98%
------------ ------------
Total interest-bearing liabilities 5,309,092 3.40% 4,641,658 2.06%
Non-interest-bearing demand deposits 747,063 690,522
------------ ------------
Total deposits and other borrowed funds $ 6,056,155 $ 5,332,180
------------ ------------
Total average assets $ 6,948,451 $ 6,145,804
Total average stockholders' equity $ 797,599 $ 729,174
------------ ------------
(1) Yields and interest earned include net loan fees. Non-accrual loans are
included in the average balance.
(2) The average yield has been adjusted to a fully taxable-equivalent basis for
certain securities of states and political subdivisions and other
securities held using a statutory Federal income tax rate of 35%.