-----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, RcmhHFKdSgQPEz4Crp/NR+alCU6uYlFNBct//v3lHMyGA+Z5eA8u2KAQwa/Vb9T6 Bv6Z5Hhc5LCCfg1KdOBokQ== 0000891092-04-000331.txt : 20040128 0000891092-04-000331.hdr.sgml : 20040128 20040127202831 ACCESSION NUMBER: 0000891092-04-000331 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040127 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CATHAY GENERAL BANCORP 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: 001-31830 FILM NUMBER: 04547628 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 FORMER COMPANY: FORMER CONFORMED NAME: CATHAY BANCORP INC DATE OF NAME CHANGE: 19930328 8-K 1 e16718_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): January 27, 2004 CATHAY GENERAL BANCORP (Exact name of registrant as specified in its charter) Delaware 0-18630 95-4274680 (State or other jurisdiction of (Commission File (IRS Employer incorporation) No.) Number) Identification 777 North Broadway, Los Angeles, California 90012 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (213) 625-4700 (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated January 27, 2004. 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 General Bancorp under the Securities Act of 1933, as amended. On January 27, 2004, Cathay General Bancorp announced, in a press release, its financial results for the quarter ended December 31, 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: January 27, 2004 CATHAY GENERAL BANCORP By: /s/ Heng W. Chen ----------------------------- Heng W. Chen Executive Vice President and Chief Financial Officer EXHIBIT INDEX Number Exhibit - ------ ------- 99.1 Press Release, dated January 27, 2004. EX-99.1 3 e16718ex99_1.txt PRESS RELEASE Exhibit 99.1 Cathay General Bancorp Announces 10th Consecutive Year of Double-Digit Earnings Growth and Record 2003 Earnings of $55.6 Million LOS ANGELES, Jan. 27 /PRNewswire-FirstCall/ -- Cathay General Bancorp (the "Company"), (Nasdaq: CATY), the holding company for Cathay Bank (the "Bank"), today announced results for the fourth quarter and for the year ended December 31, 2003. STRONG FINANCIAL PERFORMANCE 4th Quarter 2003 4th Quarter 2002 Year 2003 Year 2002 Net income $16.8 million $12.1 million $55.6 million $48.7 million Basic earnings per share $0.72 $0.67 $2.87 $2.71 Diluted earnings per share $0.71 $0.67 $2.85 $2.69 Return on average assets 1.28% 1.78% 1.58% 1.88% Return on average stockholders' equity 11.99% 16.89% 15.13% 18.30% Efficiency ratio 39.57% 37.88% 36.73% 36.00% FOURTH QUARTER HIGHLIGHTS -- Fourth quarter earnings increased $4.7 million, or 39%, compared to the same quarter a year ago. -- Merger with GBC Bancorp closed on October 20, 2003. -- Net recoveries of $191,000 in the fourth quarter of 2003, compared with net charge-offs of $89,000 in the year ago quarter. -- Return on average stockholders' equity was 11.99% and return on average assets was 1.28% for the quarter ended December 31, 2003. -- Effective tax rate for the fourth quarter was 43% compared to 31% in the same quarter in 2002 primarily as a result of certain tax benefits recorded in the first three quarters of 2003 that were reversed in the fourth quarter. FULL YEAR HIGHLIGHTS -- Record net income of $55.6 million or 14% over 2002. This strong net earnings performance resulted in an increase of 6% in diluted income per share to $2.85 compared with diluted income per share of $2.69 a year ago. -- Total assets increased by 101% from 2002, due primarily to the merger with GBC Bancorp. -- Gross loans grew to $3.3 billion from December 31, 2002, an increase of $1.4 billion or 76%. -- Deposit balances grew to $4.4 billion from December 31, 2002, an increase of $2.1 billion or 91%. -- Net recoveries of $66,000 for 2003 compared to net charge-offs of $5.4 million in 2002. "Our record results for the fourth quarter of 2003 were achieved as we prepare for the integration of General Bank with Cathay Bank. Strong organic loan growth, an improvement in the net interest margin and net recoveries were all factors that contributed to the record results. We believe the completion of our merger with GBC Bancorp on October 20, 2003 positions us to become the bank of choice catering primarily to Asian-American business and retail customers in key U.S. markets," commented Dunson Cheng, Chairman of the Board and President of the Company. "As we complete and implement our integration plans, we are convinced that the combined Cathay Bank will maintain highly efficient operations and a commitment to strong loan growth while maintaining sound underwriting criteria. We expect the conversion to a single common computer system to occur in April 2004 with a good level of customer retention," said Peter Wu, Executive Vice Chairman and Chief Operating Officer. "We are optimistic that 2004 will be another record year for Cathay General Bancorp as we build on our larger size and scale to grow and better serve our attractive customer niche," concluded Dunson Cheng. INCOME STATEMENT REVIEW Net interest income before provision for loan losses Our net interest income before provision for loan losses increased to $45.9 million during the fourth quarter of 2003, or 70.7% higher than the $26.9 million during the same quarter a year ago. The increase was due primarily to the merger with GBC Bancorp and strong growth in loans. The net interest margin, on a fully taxable-equivalent basis, increased 10 basis points from 3.74% during the third quarter 2003 to 3.84% for the fourth quarter 2003, primarily as a result of the sale of lower yielding securities. The net interest margin decreased from 4.28% in the fourth quarter of 2002 to 3.84% in the fourth 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 prepayments, calls and sales of higher yielding securities and the related lagging effect on our interest-bearing time deposit accounts. For the fourth quarter of 2003, the interest rate earned on our average interest-earning assets was 4.91% on a fully taxable-equivalent basis, and our cost of funds on average interest-bearing liabilities equaled 1.29%. In comparison, for the fourth quarter of 2002, the interest rate earned on our average interest-earning assets was 5.74% and our cost of funds on average interest-bearing liabilities equaled 1.78%. Provision for loan losses We increased the provision for loan losses by $700,000 to $2.2 million during the fourth quarter of 2003, compared with $1.5 million for the fourth 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 net recoveries for the fourth quarter of 2003 were $191,000 compared with a net charge-offs of $89,000 during the fourth quarter of 2002. 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 $6.6 million for the fourth quarter of 2003, an increase of $3.0 million, or 82.0%, compared to the non-interest income of $3.6 million for the fourth quarter of 2002. For the fourth quarter of 2003, the Company realized a net gain on the sale of securities of $2.5 million compared to a $45,000 net gain for the same quarter in 2002. Letters of credit commissions increased $383,000, or 80.5%, from $476,000 in the fourth quarter 2002 to $859,000 in the fourth quarter of 2003. Comparing the fourth quarter of 2003 to the fourth quarter of 2002, depository service fees increased $286,000, or 19.5%. These increases were due primarily to the merger with GBC Bancorp. Non-interest expense Non-interest expense increased $9.2 million to $20.8 million in the fourth quarter of 2003 primarily due to the merger with GBC Bancorp. The efficiency ratio was 39.57% for the fourth quarter 2003 compared to 37.88% in the year ago quarter. The efficiency ratio excluding the amortization of core deposit intangibles was 37.60% for the fourth quarter of 2003 compared to 37.73% for the fourth quarter of 2002. The increase in non-interest expense during the fourth quarter 2003 was primarily attributable to higher salaries and employee benefits expense of $4.8 million, higher core deposit amortization of $1.1 million, and higher other operating expenses of $1.1 million. These increases were all due primarily to the merger with GBC Bancorp. Income taxes The effective tax rates for the fourth quarter of 2003 and 2002 were 43.2% and 30.9%, respectively. The effective tax rates for the full year 2003 and 2002 were 36.7% and 31.4%, respectively. The higher effective tax rate for 2003 reflects changes in the mix of tax rates applicable to income before tax and the absence of certain tax benefits recognized in 2002, including benefits related to the Company's previously disclosed regulated investment company (RIC). In the fourth quarter, the Company reversed the net state tax benefits recorded in the first three quarters of 2003 related to the real estate investment trust (REIT) formed during 2003 and reflected no such benefits in the fourth quarter related to its REIT. On December 31, 2003, the California Franchise Tax Board announced its position that certain transactions related to RICs and REITs will be disallowed pursuant to legislation recently enacted into law in the fourth quarter of 2003. The Company previously deregistered its RIC in 2003 and does not expect to record any tax benefits relating to the REIT in 2004. The Company created these subsidiaries for the purpose of raising capital. The Company believes it is appropriately reserved for the benefits previously recognized in the three prior years. The Company also believes that its position has merit and will accordingly pursue its claims and defend its use of these entities and transactions. BALANCE SHEET REVIEW Total assets increased by $2.8 billion to $5.5 billion at December 31, 2003, up 101.2% from year-end 2002 of $2.8 billion. The increase in total assets was due primarily to the merger with GBC Bancorp. The growth of gross loans and leases to $3.3 billion as of December 31, 2003 from $1.9 billion as of December 31, 2002, represents a $1.4 billion, or 76.1%, growth due primarily to the merger with GBC Bancorp. General Bank had total gross loans of $1.2 billion as of October 20, 2003, the date of merger. The changes in the loan composition from year-end 2002 are presented below: (Dollar in thousands) December 31, December 31, % Change 2003 2002 Loans Commercial $956,382 $563,675 70 Residential mortgage 262,954 231,371 14 Commercial mortgage 1,715,434 943,391 82 Real estate construction 359,339 122,773 193 Installment 11,452 15,570 (26) Other 860 447 92 Gross loans and leases $3,306,421 $1,877,227 76 Allowance for loan losses (65,808) (24,543) 168 Unamortized deferred loan fees (10,862) (4,606) 136 Total loans and leases, net $3,229,751 $1,848,078 75 The increase in total assets from year-end 2002 was funded primarily by deposits, which increased by $2.1 billion or 91%, to $4.4 billion, and by the increase in wholesale borrowings of $345 million. The deposit increase was comprised of $1.2 billion or 92% in lower-cost core deposits, and $0.9 billion or 90% in time deposits of $100,000 or more. General Bank had total deposits of $1.9 billion at the date of the merger. The changes in the deposit composition from year-end 2002 are presented below: (Dollars in thousands) December 31, December 31, % Change 2003 2002 Deposits Non-interest- bearing deposits $633,556 $302,828 109 Interest-bearing checking deposits 937,317 309,665 203 Savings deposits 425,076 290,226 46 Time deposits under $100 559,305 425,138 32 Time deposits of $100 or more 1,872,827 986,786 90 Total deposits $4,428,081 $2,314,643 91 Federal funds purchased and securities sold under agreements to repurchase increased by $54.0 million to $82.5 million at December 31, 2003, compared with $28.5 million at year-end 2002. Advances from the Federal Home Loan Bank increased to $258.3 million at year-end compared to $50.0 million at year-end 2002. Other borrowings increased $27.6 million from year-end 2002. Stockholders' equity of $619.3 million rose $331.3 million or 115% from December 31, 2002. The Company issued 6.75 million shares of common stock valued as of the time of the announcement of the merger at $40.78 per share for a portion of the merger consideration for GBC Bancorp. The Company also paid $162.4 million in cash and assumed stock options for 708,280 of the Company's shares in exchange for stock options under GBC Bancorp's 1999 stock option plan for the remainder of the merger consideration for GBC Bancorp. ASSET QUALITY REVIEW Non-performing assets to gross loans plus other real estate owned increased to 1.18% at December 31, 2003, from 0.39% at December 31, 2002, and from 0.24% at September 30, 2003. Total non-performing assets increased to $39.3 million at December 31, 2003, compared with $7.2 million at December 31, 2002, and $4.9 million at September 30, 2003. Non-performing loans increased to $38.9 million at December 31, 2003, compared with year-end 2002 of $6.6 million, and $4.3 million at September 30, 2003. General Bank had $25.5 million in non-accrual loans as of the merger date. The allowance for loan losses amounted to $65.8 million at December 31, 2003, and represented the amount that the Company believes should be sufficient to absorb loan losses inherent in the Company's loan portfolio. General Bank had an allowance for the losses of $34.0 million at the date of the merger. The allowance for loan losses represented 2.00% of period-end gross loans and 169% of non-performing loans at December 31, 2003. The comparable ratios were 1.31% of gross loans and 372% of non-performing loans at December 31, 2002. The changes to the Company's asset quality results are highlighted below: (In thousands) December 31, 2003 December 31, 2002 % Change Non-performing assets Accruing loans past due 90 days or more $5,916 $2,468 140 Non-accrual loans 32,959 4,124 699 Total non-performing loans 38,875 6,592 490 Other real estate owned 400 653 (39) Total non-performing assets $39,275 $7,245 442 Troubled debt restructurings $5,808 $5,266 10 Troubled debt restructurings totaled $5.8 million at December 31, 2003, compared to $5.3 million at year-end 2002. There were six loans in the category, which were all current as of December 31, 2003. CAPITAL ADEQUACY REVIEW The Tier 1 risk-based capital ratio of 10.05%, total risk-based capital ratio of 11.30%, and Tier 1 leverage capital ratio of 7.94%, 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. At December 31, 2002, the Company's Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage capital ratios were 11.93%, 13.01%, and 10.11%, respectively. In the fourth quarter of 2003, the Company completed an additional issuance of $12.5 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 Capital Trust II and have a variable interest rate of three-month LIBOR plus 2.9% and mature in 2034. The trust preferred securities are redeemable, in whole or in part, at the option of the Company, once each quarter beginning March 30, 2009. As of December 31, 2003, the total junior subordinated notes issued by the Company to the trusts totaled $53.9 million. Such trusts are no longer consolidated in accordance with a December 2003 accounting pronouncement. In addition, the Company's REIT raised $4.3 million of Tier 1 capital from sale of its preferred stock to accredited investors in the fourth quarter of 2003. YEAR-TO-DATE REVIEW Net income was $55.6 million or $2.85 per diluted share for year ended December 31, 2003, an increase of 14.1% over the $48.7 million or $2.69 per diluted share for the same period a year ago. The net interest margin, on a fully taxable-equivalent basis for the year ended December 31, 2003 decreased 48 basis points to 3.87% compared to 4.35% for the year ended 2002. Return on average stockholders' equity was 15.13% and return on average assets was 1.58% for the year of 2003, compared to a return on average stockholders' equity of 18.30% and a return on average assets of 1.88%, for the year ended December 31, 2002. For the years ended December 31, 2003 and 2002, the efficiency ratio was 36.73% and 36.00%, respectively. ABOUT CATHAY GENERAL BANCORP Cathay General Bancorp is the one-bank 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 38 branches in California, three branches in New York State, two branches in Massachusetts, one in Houston, Texas, one in Washington State, and representative offices in Hong Kong and Shanghai, China. In addition, the Bank's subsidiaries, Cathay Investment Company and GBC Investment & Consulting Company, Inc., both maintain an office in Taipei. As part of its post-merger integration plans to efficiently serve its customers, Cathay Bank intends to close four branches in Southern California and three branches in Northern California in or after April 2004 and to consolidate their operations with nearby branches. Cathay Bank's website 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 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: fluctuations in interest rates, ability to integrate its operations after its recent merger and realize the benefits of its merger, demographic changes, inflation, competition, war and terrorism, general economic or business conditions in California and other regions where Cathay Bank has operations such as the currently unknown impact of the California budget deficit, changes in business strategy, including the formation of a real estate investment trust (REIT) and the deregistration of its registered investment company (RIC), and legislative and regulatory developments (particularly, the potential effects of recently enacted California tax legislation and the subsequent Franchise Tax Board announcement on December 31, 2003 regarding the taxation of REITs and RICs. These and other factors are further described in its predecessors Cathay Bancorp Inc.'s and GBC Bancorp's Annual Reports on Form 10-K for the year ended December 31, 2002, their Quarterly Reports on Form 10-Q, its registration statement on Form S-4 relating to the GBC Bancorp merger, and other filings it makes in the future with the Securities and Exchange Commission ("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 requests directed to Cathay General Bancorp, 777 N. Broadway, Los Angeles, CA 90012, Attention: Investor Relations (213) 625-4749. CATHAY GENERAL BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) Three months ended For the years ended (Dollars in thousands, December 31, December 31, except per share % % data) 2003 2002 Change 2003 2002 Change FINANCIAL PERFORMANCE Net interest income before provision for loan losses $45,898 $26,884 71 $127,119 $104,141 22 Provision for loan losses 2,200 1,500 47 7,150 6,000 19 Net interest income after provision for loan losses 43,698 25,384 72 119,969 98,141 22 Non-interest income 6,607 3,630 82 22,993 16,171 42 Non-interest expense 20,778 11,560 80 55,140 43,317 27 Income before income tax expense 29,527 17,454 69 87,822 70,995 24 Income tax expense 12,763 5,385 137 32,250 22,295 45 Net income $16,764 $12,069 39 $55,572 $48,700 14 Net income per common share: Basic $0.72 $0.67 7 $2.87 $2.71 6 Diluted $0.71 $0.67 6 $2.85 $2.69 6 Cash dividends paid per common share $-- $0.140 (100) $0.560 $0.545 3 SELECTED RATIOS Return on average assets 1.28% 1.78% (28) 1.58% 1.88% (16) Return on average stockholders' equity 11.99% 16.89% (29) 15.13% 18.30% (17) Efficiency ratio 39.57% 37.88% 4 36.73% 36.00% 2 Dividend payout ratio 0.00% 20.90% (100) 18.15% 20.11% (10) YIELD ANALYSIS (Fully tax equivalent) Total interest- earning assets 4.91% 5.74% (14) 5.08% 5.99% (15) Total interest- bearing liabilities 1.29% 1.78% (28) 1.47% 1.98% (26) Net interest spread 3.62% 3.96% (9) 3.61% 4.01% (10) Net interest margin 3.84% 4.28% (10) 3.87% 4.35% (11) December 31, 2003 December 31, 2002 CAPITAL RATIOS Tier 1 risk-based capital ratio 10.05% 11.93% Total risk-based capital ratio 11.30% 13.01% Tier 1 leverage capital ratio 7.94% 10.11% CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) Years ended (In thousands, except share December 31, December 31, and per share data) 2003 2002 % change Assets Cash and due from banks $111,699 $70,777 58 Federal funds sold and securities purchased under agreements to resell 82,000 19,000 332 Cash and cash equivalents 193,699 89,777 116 Investment securities 1,681,251 707,725 138 Loans 3,306,421 1,877,227 76 Less: Allowance for loan losses (65,808) (24,543) 168 Unamortized deferred loan fees (10,862) (4,606) 136 Loans, net 3,229,751 1,848,078 75 Other real estate owned, net 400 653 (39) Affordable housing investments, net 32,976 21,678 52 Premises and equipment, net 35,624 29,788 20 Customers' liability on acceptances 11,731 10,608 11 Accrued interest receivable 21,552 14,453 49 Goodwill 241,728 6,552 3,589 Other intangible assets 52,730 2,265 2,228 Other assets 40,473 22,421 81 Total assets $5,541,915 $2,753,998 101 Liabilities and Stockholders' Equity Deposits Non-interest-bearing demand deposits $633,556 $302,828 109 Interest-bearing deposits: NOW deposits 279,679 148,085 89 Money market deposits 657,638 161,580 307 Savings deposits 425,076 290,226 46 Time deposits under $100 559,305 425,138 32 Time deposits of $100 or more 1,872,827 986,786 90 Total deposits 4,428,081 2,314,643 91 Federal funds purchased and securities sold under agreement to repurchase 82,500 28,500 189 Advances from the Federal Home Loan Bank 258,313 50,000 417 Other borrowings 27,622 -- 100 Acceptances outstanding 11,731 10,608 11 Junior subordinated notes 53,856 -- 100 Other liabilities 60,516 62,286 (3) Total liabilities 4,922,619 2,466,037 100 Total stockholders' equity 619,296 287,961 115 Total liabilities and stockholders' equity $5,541,915 $2,753,998 101 Book value per share $24.97 $16.00 CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) (In thousands, except Three months ended For the year ended share and per share December 31, December 31, data) 2003 2002 2003 2002 INTEREST INCOME Interest on loans $42,499 $27,713 $124,031 $107,693 Interest on securities available-for-sale 16,261 8,349 42,767 35,523 Interest on federal funds sold and securities Purchased under agreements to resell 104 156 416 813 Interest on deposits with banks 18 6 53 32 Total interest income 58,882 36,224 167,267 144,061 INTEREST EXPENSE Time deposits of $100 or more 6,864 5,504 21,808 23,351 Other deposits 3,506 3,022 11,166 13,388 Other borrowed funds 2,614 814 7,174 3,181 Total interest expense 12,984 9,340 40,148 39,920 Net interest income before provision for loan losses 45,898 26,884 127,119 104,141 Provision for loan losses 2,200 1,500 7,150 6,000 Net interest income after provision for loan losses 43,698 25,384 119,969 98,141 NON-INTEREST INCOME Securities gains 2,547 45 9,890 1,926 Letters of credit commissions 859 476 2,395 1,947 Depository service fees 1,750 1,464 5,940 5,755 Other operating income 1,451 1,645 4,768 6,543 Total non-interest income 6,607 3,630 22,993 16,171 NON-INTEREST EXPENSE Salaries and employee benefits 11,768 6,929 32,029 25,716 Occupancy expense 1,729 973 4,728 3,730 Computer and equipment expense 1,500 833 3,918 3,225 Professional services expense 1,195 1,179 4,040 4,036 FDIC and State assessments 258 128 660 501 Marketing expense 397 277 1,638 1,405 Other real estate owned expense (income) 253 36 392 (349) Operations of affordable housing investments 839 505 2,663 2,038 Amortization of core deposit premium 1,037 47 1,180 198 Other operating expense 1,802 653 3,892 2,817 Total non-interest expense 20,778 11,560 55,140 43,317 Income before income tax expense 29,527 17,454 87,822 70,995 Income tax expense 12,763 5,385 32,250 22,295 Net income 16,764 12,069 55,572 48,700 Other comprehensive income (loss), net of tax 1,945 (506) 2,725 1,656 Total comprehensive income $18,709 $11,563 $58,297 $50,356 Net income per common share: Basic $0.72 $0.67 $2.87 $2.71 Diluted $0.71 $0.67 $2.85 $2.69 Cash dividends paid per common share $-- $0.14 $0.56 $0.55 Basic average common shares outstanding 23,330,080 17,998,061 19,356,864 17,991,333 Diluted average common shares outstanding 23,530,279 18,121,236 19,517,808 18,115,119 CATHAY GENERAL BANCORP AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited) For the three months ended, (In thousands) December 31, December 31, September 30, 2003 2002 2003 Interest-earning assets Federal funds sold and securities purchased under agreements to resell $52,413 $44,261 $6,054 Investment securities 1,695,971 637,338 939,232 Loans and Leases, net of unamortized deferred loan fees 3,046,301 1,858,162 1,981,930 Deposits with banks 2,200 787 2,285 Total interest-earning assets $4,796,885 $2,540,548 $2,929,501 Interest-bearing liabilities Interest-bearing checking deposits $857,695 $309,127 $347,965 Savings deposits 398,674 286,931 317,156 Time deposits 2,256,619 1,401,929 1,494,803 Total interest-bearing deposits $3,512,988 $1,997,987 $2,159,924 Other borrowed funds 469,686 78,826 262,445 Total interest-bearing liabilities 3,982,674 2,076,813 2,422,369 Non-interest-bearing demand deposits 546,414 297,245 326,803 Total deposits and other borrowed funds $4,529,088 $2,374,058 $2,749,172 Total average assets $5,189,506 $2,694,679 $3,108,858 Total average stockholders' equity $554,510 $283,496 $312,393 For the year ended, (In thousands) December 31, December 31, 2003 2002 Interest-earning assets Federal funds sold and securities purchased under agreements to resell $39,552 $48,966 Investment securities 1,065,519 644,273 Loans and Leases, net of unamortized deferred loan fees 2,227,335 1,748,274 Deposits with banks 1,490 894 Total interest-earning assets $3,333,896 $2,442,407 Interest-bearing liabilities Interest-bearing checking deposits $472,242 $294,775 Savings deposits 327,336 270,514 Time deposits 1,665,114 1,372,854 Total interest-bearing deposits $2,464,692 $1,938,143 Other borrowed funds 260,535 79,209 Total interest-bearing liabilities 2,725,227 2,017,352 Non-interest-bearing demand deposits 357,731 274,614 Total deposits and other borrowed funds $3,082,958 $2,291,966 Total average assets $3,524,511 $2,590,426 Total average stockholders' equity $367,243 $266,120 SOURCE Cathay General Bancorp -0- 01/27/2004 /CONTACT: Heng W. Chen of Cathay General Bancorp, +1-213-625-4752/ /Web site: http://www.cathaybank.com / (CATY) CO: Cathay General Bancorp ST: California IN: FIN SU: ERN -----END PRIVACY-ENHANCED MESSAGE-----