Note 11 - Capital Resources

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

11. Capital Resources

Total equity was $1.75 billion at December 31, 2015, an increase of $144.9 million, or 9.0%, from $1.60 billion at December 31, 2014, primarily due to increases in net income of $161.1 million and equity consideration for the acquisition of Asia Bancshares, Inc. of $82.8 million offset by purchases of treasury stock of $59.4 million and common stock cash dividends of $45.3 million. Under the terms of the acquisition of Asia Bancshares, Inc. which was completed on July 31, 2015, we issued 2.58 million shares of our common stock and paid $57.0 million in cash for all of the issued and outstanding stock of Asia Bancshares. The Company paid cash dividends of $0.56 per common share in 2015 and $0.29 per common share in 2014.

In November 2007, the Board of Directors approved a stock repurchase program for the Company to buy back up to one million shares of our common stock, and 377,500 shares were repurchased during 2007. Repurchases of shares were suspended under this program between 2008 and July 2015. In August 2015, the Company resumed stock repurchases under the November 2007 repurchase program and repurchased the remaining 622,500 shares under the November 2007 repurchase program for $18.1 million, or an average price of $29.08 per share.

On August 31, 2015, the Board of Directors approved a new stock repurchase program to buy back up to two million shares of our common stock. In 2015, the Company repurchased 1,366,750 shares for $41.3 million, or $30.22 per share under the August 2015 repurchase program.

As of December 31, 2015, the Company could repurchase up to 633,250 shares of common stock under the August 2015 stock repurchase program, subject to regulatory limitations. The August 2015 stock repurchase program were completed on February 1, 2016 by repurchasing the remaining shares of 633,250 for $17.0 million, or $26.82 per share, in January and February of 2016.

On February 1, 2016, the Board of Directors approved a new stock repurchase program to buy back up to $45.0 million of the Company’s common stock. As of February 16, 2016, the Company repurchased 579,543 shares for $15.8 million, or $27.22 per share, under the February 2016 repurchase program. As of February 16, 2016, the Company may repurchase up to $29.2 million of its common stock under the February 2016 repurchase program.

The Bancorp established three special purpose trusts in 2003 and two in 2007 for the purpose of issuing trust preferred securities to outside investors (“Capital Securities”). The trusts exist for the purpose of issuing the Capital Securities and investing the proceeds thereof, together with proceeds from the purchase of the common securities of the trusts by the Bancorp, in Junior Subordinated Notes issued by the Bancorp. Subject to some limitations, payment of distributions out of the monies held by the trusts and payments on liquidation of the trusts or the redemption of the Capital Securities are guaranteed by the Bancorp to the extent the trusts have funds on hand at such time. The obligations of the Bancorp under the guarantees and the Junior Subordinated Notes are subordinate and junior in right of payment to all indebtedness of the Bancorp and will be structurally subordinated to all liabilities and obligations of the Bancorp’s subsidiaries. The Bancorp has the right to defer payments of interest on the Junior Subordinated Notes at any time or from time to time for a period of up to twenty consecutive quarterly periods with respect to each deferral period. Under the terms of the Junior Subordinated Notes, the Bancorp may not, with certain exceptions, declare or pay any dividends or distributions on its capital stock or purchase or acquire any of its capital stock if the Bancorp has deferred payment of interest on the Junior Subordinated Notes.

The five special purpose trusts are considered variable interest entities. Because the Bancorp is not the primary beneficiary of the trusts, the financial statements of the trusts are not included in the Consolidated Financial Statements of the Company. The Junior Subordinated Notes are currently included in the Tier 1 capital of the Bancorp for regulatory capital purposes. Interest expense, excluding impact of cash flow interest rate swaps entered into during June 2014, on the Junior Subordinated Notes was $3.0 million for 2015, $2.9 million for 2014, and $3.0 million for 2013.

The table below summarizes the outstanding Junior Subordinated Notes issued by the Company to each trust as of December 31, 2015:

		Principal		Not			Current			Date of	Payable/
	Issuance	Balance of		Redeemable	Stated	Annualized	Interest			Rate	Distribution
Trust Name	Date	Notes		Until	Maturity	Coupon Rate	Rate			Change	Date
(Dollars in thousands)
Cathay Capital Trust I	June 26, 2003	$	20,619	June 30, 2008	June 30, 2033	3-month LIBOR + 3.15%		3.75	%	December 30, 2015	March 30 June 30 September 30 December 30
Cathay StatutoryTrust I	September 17, 2003		20,619	September 17, 2008	September 17, 2033	3-month LIBOR + 3.00%		3.53	%	December 17, 2015	March 17 June 17 September 17 December 17
Cathay Capital Trust II	December 30, 2003		12,887	March 30, 2009	March 30, 2034	3-month LIBOR + 2.90%		3.50	%	December 30, 2015	March 30 June 30 September 30 December 30
Cathay Capital Trust III	March 28, 2007		46,392	June 15, 2012	June 15, 2037	3-month LIBOR + 1.48%		1.99	%	December 15, 2015	March 15 June 15 September 15 December 15
Cathay Capital Trust IV	May 31, 2007		18,619	September 6, 2012	September 6, 2037	3-month LIBOR + 1.4%		1.85	%	December 7, 2015	March 6 June 6 September 6 December 6
Total Junior Subordinated Notes		$	119,136