-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q6qshywqumiRdZiAzhD8HcjmY/BGmYYy1kSg0xDzWP8dAAYrgQyZoH9vuF4JvhIS xUVkJ53RyXbgOWVzI0X4Rg== 0000891092-03-002792.txt : 20031016 0000891092-03-002792.hdr.sgml : 20031016 20031016162504 ACCESSION NUMBER: 0000891092-03-002792 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031015 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CATHAY BANCORP INC CENTRAL INDEX KEY: 0000861842 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 954274680 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18630 FILM NUMBER: 03944089 BUSINESS ADDRESS: STREET 1: 777 N BROADWAY CITY: LOS ANGELES STATE: CA ZIP: 90012 BUSINESS PHONE: 2136254700 MAIL ADDRESS: STREET 1: 777 NORTH BROADWAY CITY: LOS ANGELES STATE: CA ZIP: 90012 8-K 1 e15903_8k.txt FORM 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 15, 2003 CATHAY BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 0-18630 95-4274680 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 777 North Broadway, Los Angeles, California 90012 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (213) 625-4700 Not Applicable (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated October 15, 2003. Item 12. Results of Operations and Financial Condition The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Item 12 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be incorporated by reference into the filings of Cathay Bancorp, Inc under the Securities Act of 1933, as amended. On October 15, 2003, Cathay Bancorp, Inc. announced in a press release its financial results for the quarter ended September 30, 2003. That press release is attached hereto as exhibit 99.1. SIGNATURE 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. Date: October 15, 2003 CATHAY BANCORP, INC. By: /s/ Dunson K. Cheng ---------------------- Dunson K. Cheng Chairman and President EXHIBIT INDEX Number Exhibit - ------ ------- 99.1 Press Release, dated October 15, 2003. EX-99.1 3 e15903ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Cathay Bancorp, Inc. Announces Strong Third Quarter Results LOS ANGELES, Oct. 15 /PRNewswire-FirstCall/ -- Cathay Bancorp, Inc. (the "Company") (Nasdaq: CATY), the holding company for Cathay Bank (the "Bank"), today announced results for the third quarter of 2003. STRONG FINANCIAL PERFORMANCE 3rd Quarter 2003 3rd Quarter 2002 Net income $13.0 million $13.0 million Basic earnings per share $0.72 $0.72 Diluted earnings per share $0.72 $0.72 Return on average assets 1.66% 1.96% Return on average stockholders' equity 16.55% 18.94% Efficiency ratio 34.45% 34.65% THIRD QUARTER HIGHLIGHTS: * Net income for the third quarter 2003 was the same as the quarter a year ago, at $13.0 million. * Total asset growth of $447.6 million or 16.3% to $3.2 billion at September 30, 2003, from December 31, 2002 of $2.8 billion. * Gross loans grew to $2.1 billion from December 31, 2002, an increase of $219.0 million or 11.7%, primarily in commercial mortgage loans and commercial loans. * Deposit accounts grew to $2.5 billion from December 31, 2002, an increase of $229.5 million or 9.9%, of which $140.8 million or 61.4% of the total growth was in core deposits. * Net recoveries of $46,000 in the third quarter of 2003, compared with net charge-offs of $402,000 in the year ago quarter. * Return on average stockholders' equity was 16.55% and return on average assets was 1.66% for the quarter ended September 30, 2003. * Receipt of stockholder and regulatory approval for the merger of GBC Bancorp into the Company, which is currently expected to occur after the close of business on Monday, October 20, 2003, or as soon thereafter as possible. * On September 4, 2003, the American Banker newspaper ranked the Company as the 16th most efficient US bank holding company among the 500 largest, based on the results for the first quarter of 2003. "The third quarter results were strong as measured by the robust $142.0 million increase in loans during the quarter and continued excellent credit quality. However, net income of $13.0 million was adversely impacted by the decline in the net interest margin to 3.74% from 3.91% in the second quarter of 2003, primarily as a result of accelerated securities premium amortization expense of $0.8 million due to higher prepayments and lower overall yields in the securities portfolio. Third quarter results were also impacted by higher effective income tax rates compared with last year. With the improved momentum from new business and a decrease in securities premium amortization expense, we are optimistic that the fourth quarter will show stronger operating results," commented Dunson Cheng, Chairman of the Board and President of the Company. "Our proposed merger with GBC Bancorp (which is currently expected to close after the close of business on Monday, October 20, 2003 or as soon thereafter as possible) will create, we believe, the largest full-service bank catering primarily to Asian-American business and retail customers in key U.S. markets. Our integration plans are nearly complete and we expect the conversion to one common computer system to occur in April 2004." INCOME STATEMENT REVIEW Net interest income before provision for loan losses Our net interest income before provision for loan losses increased to $27.1 million during the third quarter of 2003, or 3.3% higher than the $26.2 million during the same quarter a year ago. The increase was due to growth in both the investment and loan portfolios, which helped to mitigate the effect of the accelerated amortization of premiums on securities due to higher prepayments, lower securities yields available on reinvestment and the effect of the decreases in the target federal funds rate on the Company's asset-sensitive balance sheet. The net interest margin, on a fully taxable-equivalent basis, fell 17 basis points from 3.91% during the second quarter 2003 to 3.74% for the third quarter 2003, primarily as a result of lower yields from the loan portfolio, accelerated amortization of premiums on securities due to higher prepayments as well as the lower yields available upon reinvestment. The net interest margin decreased from 4.29% in the third quarter of 2002 to 3.74% in the third quarter of 2003, primarily as a result of the 50 and 25 basis point drops in the federal funds rate in November 2002 and June 2003, respectively, the accelerated amortization of premiums on securities due to higher prepayments, prepayments and calls of higher yielding securities and the related lagging effect on our interest-bearing time deposit accounts. For the third quarter of 2003, the interest rate earned on our average interest-earning assets was 4.96% on a fully taxable-equivalent basis, and our cost of funds on average interest-bearing liabilities equaled 1.47%. In comparison, for the third quarter of 2002, the interest rate earned on our average interest-earning assets was 5.90% and our cost of funds on average interest-bearing liabilities equaled 1.96%. Provision for loan losses We increased the provision for loan losses by $150,000 to $1.7 million during the third quarter of 2003, compared with $1.5 million for the third quarter of 2002. The provision for loan losses represents the charge against current earnings that is determined by management, through a credit review process, as the amount needed to maintain an allowance that management believes should be sufficient to absorb loan losses inherent in the Company's loan portfolio. Total charge-offs for the third quarter of 2003 were $15,000 compared with charge-offs of $415,000 during the third quarter of 2002. Recoveries in the third quarter of 2003 equaled $61,000, compared with recoveries of $13,000 in the same quarter a year ago. Non-interest income Non-interest income, which includes revenues from service charges on deposit accounts, letters of credit commissions, securities sales, loan sales, wire transfer fees, and other sources of fee income, was $5.2 million for the third quarter of 2003, which was the same as the third quarter of 2002. For the third quarter of 2003, the Company realized a net gain on securities of $1.7 million compared to $1.4 million for the same quarter in 2002. Other operating income decreased by 16.3% to $1.6 million during the third quarter 2003 compared with $1.9 million in the year ago quarter. The decrease in other operating income was due primarily to lower wire transfer fees and foreign exchange income. Non-interest expense Non-interest expense increased $242,000 to $11.1 million in the third quarter of 2003, while the efficiency ratio improved slightly to 34.45% compared to 34.65% in the year ago quarter. The increase in non-interest expense during the third quarter 2003 was primarily attributable to higher losses from operations of $181,000 from additional affordable housing limited partnerships, increases in salaries and employee benefits expenses of $163,000, and increases in occupancy expense of $85,000. The increases in salaries and employee benefits expense and occupancy expense were related to a higher number of employees, resulting in part from the opening of additional branches and $97,000 for stock option expense. During the first quarter of 2003, the Company adopted prospectively the stock option expense provisions of the Financial Accounting Standards Board ("FASB") Statement No. 123, "Accounting for Stock-Based Compensation," as amended by FASB Statement No. 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure, an Amendment of FASB Statement No. 123". Income taxes The provision for income taxes was $6.5 million, representing an effective income tax rate of 33.3%, for the third quarter 2003 compared with $6.0 million, representing an effective income tax rate of 31.7%, in the year ago quarter. The effective income tax rate during the third quarter of 2003 reflected tax credits from qualified affordable housing investments, and the income tax benefits of the real estate investment trust formed in the first quarter of 2003. The effective income tax rate during the third quarter of 2002 reflected tax credits from affordable housing investments, and the income tax benefits of a registered investment company subsidiary of the Bank, which was deregistered in March 2003. The increase in the effective tax rate from 2002 to 2003 resulted from the lower level of assets in the real estate investment trust in 2003 compared to the registered investment company in 2002. BALANCE SHEET REVIEW Total assets increased by $447.6 million to $3.2 billion at September 30, 2003, up 16.3% from year-end 2002 of $2.8 billion. The increase in total assets was driven primarily by growth in investment securities totaling $239.3 million and an increase of $219.0 million in loans. Total investment securities increased 33.8% to $947.0 million at September 30, 2003, compared to $707.7 million at December 31, 2002. As a percentage of total assets, the investment securities portfolio increased to 29.6% at September 30, 2003, compared with 25.7% at year-end 2002. Gross loan growth during the nine months ended September 30, 2003, equaled $219.0 million, an increase of 11.7% from year-end 2002, reflecting increases in commercial mortgage loans, which grew by $182.8 million to $1.1 billion at September 30, 2003, compared with $943.4 million at year-end 2002, and in commercial loans, which increased by $35.9 million to $599.5 million at period-end, September 30, 2003, compared with $563.7 million at year-end 2002. The changes in the loan composition from year-end 2002 are presented below: (Dollar in thousands) September 30, December 31, % Change 2003 2002 Loans Commercial $599,532 $563,675 6 Residential mortgage 245,618 231,371 6 Commercial mortgage 1,126,160 943,391 19 Real estate construction 114,988 122,773 (6) Installment 9,807 15,570 (37) Other 155 447 (65) Gross loans 2,096,260 1,877,227 12 Allowance for loan losses (29,369) (24,543) 20 Unamortized deferred loan fees (5,290) (4,606) 15 Total loans, net $2,061,601 $1,848,078 12 The Company invested in three affordable housing limited partnerships during the third quarter of 2003. Capital contributions made on these new and existing limited partnerships totaled $2.1 million during the quarter. In addition, during the third quarter of 2003, the Company adopted Interpretation No. 46, "Consolidation of Variable Interest Entities," issued by FASB in January 2003. Three of the limited partnerships in which the Company has an equity interest were determined to be variable interest entities, and the carrying value of certain real estate is now consolidated in the Company's consolidated financial statements. In total, affordable housing investments increased $5.4 million to $27.1 million as of September 30, 2003 from year-end 2002. The increase in total assets from year-end 2002 was funded primarily by deposit growth of $229.5 million or 9.9%, to $2.5 billion, and by increase in wholesale borrowings of $194.0 million. The deposit growth was comprised of $140.8 million or 10.6% in lower-cost core deposits, and $88.6 million or 9.0% in time deposits of $100,000 or more. This includes the Bank's purchase of $2.1 million in deposits from CITIC International Financial Holdings Limited, which was completed in May 2003. The changes in the deposit composition from year-end 2002 are presented below: (Dollars in thousands) September 30, December 31, % Change 2003 2002 Deposits Non-interest-bearing deposits $366,018 $302,828 21 Interest-bearing checking deposits 347,724 309,665 12 Savings deposits 325,530 290,226 12 Time deposits 1,504,823 1,411,924 7 Total deposits $2,544,095 $2,314,643 10 Federal funds purchased and securities sold under agreements to repurchase increased by $84.0 million to $112.5 million at September 30, 2003, compared with $28.5 million at year-end 2002. Advances from the Federal Home Loan Bank increased to $160.0 million in the third quarter of 2003, compared to $50.0 million at year-end 2002. Other borrowings increased $4.8 million from year-end 2002 as a result of consolidation of the mortgage liabilities of the three affordable housing limited partnerships determined to be variable interest entities under FASB's Interpretation No. 46. Other liabilities decreased by $50.2 million from December 31, 2002 to September 30, 2003. The decrease was due primarily to a liability that was established for investment securities purchased in December 2002 that settled in January 2003. Stockholders' equity of $319.9 million rose $31.9 million or 11.1% from December 31, 2002. The increase was primarily due to net income of $38.8 million for the nine months ended September 30, 2003, and $2.6 million from the Company's dividend reinvestment plan which was partially offset by cash dividends on common stock of $10.1 million. ASSET QUALITY REVIEW Non-performing assets to gross loans plus other real estate owned decreased to 0.24% at September 30, 2003, from 0.39% at December 31, 2002, and from 0.64% at September 30, 2002. Total non-performing assets decreased to $4.9 million at September 30, 2003, compared with $7.2 million at December 31, 2002, and $11.8 million at September 30, 2002. Non-performing loans decreased to $4.3 million at September 30, 2003, compared with year-end 2002 of $6.6 million, and $11.1 million at September 30, 2002. The allowance for loan losses amounted to $29.4 million at September 30, 2003, and represented the amount that the Company believes should be sufficient to absorb loan losses inherent in the Company's loan portfolio. The allowance for loan losses represented 1.40% of period-end gross loans and 685.6% of non-performing loans at September 30, 2003. The comparable ratios were 1.31% of gross loans and 372.3% of non-performing loans at December 31, 2002. The changes to the Company's asset quality results are highlighted below: (In thousands) September 30, December 31, % Change 2003 2002 Non-performing assets Accruing loans past due 90 days or more $1,044 $2,468 (58) Non-accrual loans 3,240 4,124 (21) Total non-performing loans 4,284 6,592 (35) Other real estate owned 653 653 -- Total non-performing assets $4,937 $7,245 (32) Troubled debt restructurings $5,253 $5,266 -- Troubled debt restructurings totaled $5.3 million, unchanged at September 30, 2003, compared to year-end 2002. There were five loans in the category, all current as of September 30, 2003. CAPITAL ADEQUACY REVIEW The Tier 1 risk-based capital ratio of 13.63%, total risk-based capital ratio of 14.81%, and Tier 1 leverage capital ratio of 11.00%, continued to place the Company in the "well capitalized" category, which is defined as institutions with a total risk-based capital ratio equal to or greater than ten percent, a Tier 1 risk-based capital ratio equal to or greater than six percent and a Tier 1 leverage capital ratio equal to or greater than five percent. The Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage capital ratios for year-end 2002 were 11.93%, 13.01%, and 10.11%, respectively. In September 2003, the Company completed the issuance of a second $20 million of trust preferred securities which qualify as Tier 1 capital under current regulatory guidelines. The trust preferred securities were issued by a newly established subsidiary of the Company named Cathay Statutory Trust I and have a variable interest rate of three-month LIBOR plus 3.0% and a 30-year term. The trust preferred securities are redeemable, in whole or in part, at the option of the Company, once each quarter beginning five years after their issuance. YEAR-TO-DATE REVIEW Net income was $38.8 million or $2.14 per diluted share for the nine months ended September 30, 2003, an increase of 5.9% over the $36.6 million or $2.02 per diluted share for the same period a year ago. The net interest margin, on a fully taxable-equivalent basis for the nine months ended September 30, 2003 decreased 49 basis points to 3.89% compared to 4.38% during the like period a year ago. Return on average stockholders' equity was 17.10% and return on average assets was 1.75% for the first nine months of 2003, compared to a return on average stockholders' equity of 18.81% and a return on average assets of 1.91%, for the nine months ended September 30, 2002. The efficiency ratio for the nine months ended September 30, 2003, was 35.29% compared to 35.36% during the same period a year ago. ABOUT CATHAY BANCORP, INC. Cathay Bancorp, Inc. is the one-bank holding company for Cathay Bank. Cathay Bank was founded in 1962 and offers a wide range of financial services. The Bank currently operates twelve branches in Southern California, eight branches in Northern California, three branches in New York State, one branch in Houston, Texas, and two representative offices, one in Hong Kong, and one in Shanghai, China. In addition, the Bank's subsidiary, Cathay Investment Company, maintains an office in Taipei. Cathay Bank's web page is found at http://www.cathaybank.com / 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. 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 Bancorp, Inc. 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: fluctuations in interest rates, demographic changes, inflation, competition, legislative and regulatory developments, war and terrorism, changes in business strategy, including the formation of a real estate investment trust and the deregistration of our registered investment company, and general economic or business conditions in California and other regions where the Bank has operations such as the currently unknown impact of the California budget deficit. These and other factors are further described in Cathay Bancorp Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002, its Quarterly Reports on Form 10-Q and other filings it makes with the Securities and Exchange Commission ("SEC") from time to time. Cathay 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. In connection with the proposed merger of Cathay Bancorp, Inc. with GBC Bancorp, Cathay Bancorp, Inc. has filed a Registration Statement on Form S-4 with the SEC (which has been declared effective) and will file certain other materials with the SEC from time to time, including amendments to the Registration Statement on Form S-4. Because those documents will contain important information, you are urged to read them as they become available. When filed with the SEC, they will be available for free on the SEC's website at http://www.sec.gov . You may obtain from us free copies of our reports, proxy statements, and other information regarding us filed with the SEC and, when available, the proxy statement/prospectus relating to the proposed merger. Cathay Bancorp, Inc.'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 requests directed to Cathay Bancorp, Inc., 777 N. Broadway, Los Angeles, CA 90012, Attention: Investor Relations (213) 625-4749. CATHAY BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) Three months ended Nine months ended (Dollars in September 30, September 30, thousands, except 2003 2002 % 2003 2002 % per share data) change change FINANCIAL PERFORMANCE Net interest income before provision for loan losses $27,112 $26,242 3 $80,135 $77,257 4 Provision for loan losses 1,650 1,500 10 4,950 4,500 10 Net interest income after provision for loan losses 25,462 24,742 3 75,185 72,757 3 Non-interest income 5,208 5,185 -- 17,607 12,541 40 Non-interest expense 11,133 10,891 2 34,496 31,757 9 Income before income tax expense 19,537 19,036 3 58,296 53,541 9 Income tax expense 6,507 6,031 8 19,487 16,910 15 Net income $13,030 $13,005 -- $38,809 $36,631 6 Net income per common share: Basic $0.72 $0.72 -- $2.15 $2.04 5 Diluted $0.72 $0.72 -- $2.14 $2.02 6 Cash dividends paid per common share $0.280 $0.140 100 $0.560 $0.405 38 SELECTED RATIOS Return on average assets 1.66% 1.96% (15) 1.75% 1.91% (8) Return on average stockholders' equity 16.55% 18.94% (13) 17.10% 18.81% (9) Efficiency ratio 34.45% 34.65% (1) 35.29% 35.36% -- Dividend payout ratio 38.89% 19.44% 100 26.05% 19.85% 31 YIELD ANALYSIS (Fully tax equivalent) Total interest -earning assets 4.96% 5.90% (16) 5.18% 6.07% (15) Total interest -bearing liabilities 1.47% 1.96% (25) 1.57% 2.05% (23) Net interest spread 3.49% 3.94% (11) 3.61% 4.02% (10) Net interest margin 3.74% 4.29% (13) 3.89% 4.38% (11) September 30, December 31, September 30, 2003 2002 2002 CAPITAL RATIOS Tier 1 risk-based capital ratio 13.63% 11.93% 11.81% Total risk-based capital ratio 14.81% 13.01% 12.86% Tier 1 leverage capital ratio 11.00% 10.11% 10.01% CATHAY BANCORP, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (In thousands, except share and per share data) September 30, December 31, % 2003 2002 change Assets Cash and due from banks $77,475 $ 70,777 9 Federal funds sold and securities purchased under agreements to resell 2,000 19,000 (89) Cash and cash equivalents 79,475 89,777 (11) Investment securities (amortized cost of $935,729 in 2003 and $698,192 in 2002) 947,029 707,725 34 Loans 2,096,260 1,877,227 12 Less: Allowance for loan losses (29,369) (24,543) 20 Unamortized deferred loan fees (5,290) (4,606) 15 Loans, net 2,061,601 1,848,078 12 Other real estate owned, net 653 653 -- Affordable housing investments, net 27,109 21,678 25 Premises and equipment, net 29,568 29,788 (1) Customers' liability on acceptances 8,525 10,608 (20) Accrued interest receivable 13,166 14,453 (9) Goodwill 6,552 6,552 -- Other assets 27,954 24,686 13 Total assets $3,201,632 $2,753,998 16 Liabilities and Stockholders' Equity Deposits Non-interest-bearing demand deposits $366,018 $302,828 21 Interest-bearing deposits: NOW deposits 161,661 148,085 9 Money market deposits 186,063 161,580 15 Savings deposits 325,530 290,226 12 Time deposits under $100 429,424 425,138 1 Time deposits of $100 or more 1,075,399 986,786 9 Total deposits 2,544,095 2,314,643 10 Federal funds purchased and securities sold under agreements to repurchase 112,500 28,500 295 Advances from the Federal Home Loan Bank 160,000 50,000 220 Other borrowings 4,755 -- 100 Acceptances outstanding 8,525 10,608 (20) Trust preferred securities 39,716 -- 100 Other liabilities 12,131 62,286 (81) Total liabilities 2,881,722 2,466,037 17 Stockholders' Equity Preferred stock, $0.01 par value; 10,000,000 shares Authorized, none issued -- -- Common stock, $0.01 par value, 25,000,000 shares authorized, 18,371,272 issued and 18,051,362 outstanding in 2003 and 18,305,255 issued and 17,999,955 outstanding in 2002 184 183 -- Treasury stock, at cost (319,910 shares in 2003 and 305,300 in 2002) (8,810) (8,287) 6 Additional paid-in-capital 75,473 70,857 7 Unearned compensation (1,646) -- 100 Accumulated other comprehensive income, net 7,499 6,719 12 Retained earnings 247,210 218,489 13 Total stockholders' equity 319,910 287,961 11 Total liabilities and stockholders' equity $3,201,632 $2,753,998 16 Book value per share $17.72 $16.00 11 CATHAY BANCORP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) Three months ended Nine months ended (In thousands, except September 30, September 30, share and per share data) 2003 2002 2003 2002 INTEREST INCOME Interest on loans $27,103 $27,384 $80,446 $79,980 Interest on securities available-for-sale 8,959 8,648 26,506 27,174 Interest on federal funds sold and securities Purchased under agreements to resell 11 265 312 657 Interest on deposits with banks 21 7 35 26 Total interest income 36,094 36,304 107,299 107,837 INTEREST EXPENSE Time deposits of $100 or more 4,712 5,817 14,944 17,847 Other deposits 2,381 3,432 7,660 10,366 Other borrowed funds 1,889 813 4,560 2,367 Total interest expense 8,982 10,062 27,164 30,580 Net interest income before provision for loan losses 27,112 26,242 80,135 77,257 Provision for loan losses 1,650 1,500 4,950 4,500 Net interest income after provision for loan losses 25,462 24,742 75,185 72,757 NON-INTEREST INCOME Securities gains 1,690 1,421 7,343 1,881 Letters of credit commissions 542 533 1,536 1,471 Depository service fees 1,385 1,330 4,190 4,291 Other operating income 1,591 1,901 4,538 4,898 Total non-interest income 5,208 5,185 17,607 12,541 NON-INTEREST EXPENSE Salaries and employee benefits 6,537 6,374 20,261 18,787 Occupancy expense 1,094 1,009 2,999 2,757 Computer and equipment expense 766 808 2,418 2,392 Professional services expense 901 1,003 2,845 2,857 FDIC and State assessments 145 127 402 373 Marketing expense 392 357 1,241 1,128 Other real estate owned expense (income) 10 -- 139 (385) Operations of affordable housing investments 596 415 1,824 1,533 Other operating expense 692 798 2,367 2,315 Total non-interest expense 11,133 10,891 34,496 31,757 Income before income tax expense 19,537 19,036 58,296 53,541 Income tax expense 6,507 6,031 19,487 16,910 Net income 13,030 13,005 38,809 36,631 Other comprehensive (loss) income, net of tax (4,639) 1,806 780 2,162 Total comprehensive income $8,391 $14,811 $39,589 $38,793 Net income per common share: Basic $0.72 $0.72 $2.15 $2.04 Diluted $0.72 $0.72 $2.14 $2.02 Cash dividends paid per common share $0.280 $0.140 $0.560 $0.405 Basic average common shares outstanding 18,033,582 18,005,262 18,017,905 17,989,066 Diluted average common shares outstanding 18,223,498 18,133,446 18,165,335 18,113,054 CATHAY BANCORP, INC. AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited) For the three months ended, (In thousands) September 30, September 30, June 30, 2003 2002 2003 Interest-earning assets Federal funds sold and securities purchased under agreements to resell $6,054 $60,457 $42,544 Investment securities 939,232 629,978 819,657 Loans, net of unamortized deferred loan fees 1,981,930 1,787,281 1,913,593 Deposits with banks 2,285 840 1,193 Total interest-earning assets $2,929,501 $2,478,556 $2,776,987 Interest-bearing liabilities Interest-bearing checking deposits $347,965 $305,603 $341,040 Savings deposits 317,156 274,913 304,498 Time deposits 1,494,803 1,382,875 1,472,711 Total interest-bearing deposits 2,159,924 1,963,391 2,118,249 Other borrowed funds 262,445 78,512 165,686 Total interest-bearing liabilities 2,422,369 2,041,903 2,283,935 Non-interest-bearing demand deposits 326,803 279,454 306,260 Total deposits and other borrowed funds $2,749,172 $2,321,357 $2,590,195 Total average assets $3,108,858 $2,630,188 $2,929,110 Total average stockholders' equity $312,393 $272,354 $306,279 For the nine months ended, (In thousands) September 30, 2003 September 30, 2002 Interest-earning assets Federal funds sold and securities purchased under agreements to resell $35,218 $50,551 Investment securities 822,773 646,610 Loans receivable, net of unamortized deferred loan fees 1,948,381 1,711,242 Deposits with banks 1,299 953 Total interest-earning assets $2,807,671 $2,409,356 Interest-bearing liabilities Interest-bearing checking deposits $342,346 $288,906 Savings deposits 308,217 266,015 Time deposits 1,466,330 1,363,055 Total interest-bearing deposits 2,116,893 1,917,976 Other borrowed funds 190,052 79,338 Total interest-bearing liabilities 2,306,945 1,997,314 Non-interest-bearing demand deposits 296,652 266,968 Total deposits and other borrowed funds $2,603,597 $2,264,282 Total average assets $2,968,371 $2,560,339 Total average stockholders' equity $303,510 $260,305 -----END PRIVACY-ENHANCED MESSAGE-----