EX-99.1 2 cg6464ex991.txt EXHIBIT 99.1 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. (more) Page 2 "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, -------------------------------------------------- (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) -------------- -------------- --------------
(more) Page 3 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. (more) Page 4 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. (more) Page 5 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 -------------- -------------- 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 ============== ==============
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. (more) Page 6 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 -------------- -------------- Total non-performing loans 23,806 17,905 33 Other real estate owned 4,347 0 -------------- -------------- Total non-performing assets $ 28,153 $ 17,905 57 -------------- -------------- Troubled debt restructurings $ 2,740 $ 3,088 (11) ============== ==============
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/. (more) Page 7 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. (more) Page 8 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%
(more) Page 9 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
(more) Page 10 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
(more) Page 11 CATHAY GENERAL BANCORP AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
For the three months ended, ------------------------------------------------------------------------------ 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%.