Note 21 - Regulatory Matters

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

2

1

.       Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the

federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

 

The Federal Deposit Insurance Corporation has established

five

capital ratio categories: “well capitalized

,” “adequately capitalized

,” “undercapitalized

,” “significantly undercapitalized

,” and “critically undercapitalized.” A well capitalized institution must have a

common equity tier

1

capital ratio equal to or greater than

6.5%,

a Tier

1

risk-based capital ratio equal to or greater than

8%,

a total risk-based capital ratio equal to or greater than

10%,

and a Tier

1

leverage capital ratio equal to or greater than

5%.

At

December 31, 2017

and

2016

, the Bank qualified as well capitalized under the regulatory framework for prompt corrective action.

The Bancorp

’s and the Bank’s capital and leverage ratios as of

December 31, 2017,

and

December 31, 2016,

are presented in the tables below:

	Cathay General Bancorp								Cathay Bank
	December 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
(Dollars in thousands)	Balance		%		Balance		%		Balance		%		Balance		%
Common equity Tier 1 capital ( to risk-weighted assets)	$	1,572,025		12.19	$	1,459,351		12.84	$	1,734,719		13.46	$	1,515,096		13.35
Common equity Tier 1 capital minimum requirement		580,552		4.50		511,590		4.50		579,921		4.50		510,582		4.50
Excess	$	991,473		7.69	$	947,761		8.34	$	1,154,798		8.96	$	1,004,514		8.85
Tier 1 capital (to risk-weighted assets)	$	1,572,025		12.19	$	1,574,806		13.85	$	1,734,719		13.46	$	1,515,096		13.35
Tier 1 capital minimum requirement		774,070		6.00		682,120		6.00		773,229		6.00		680,776		6.00
Excess	$	797,955		6.19	$	892,686		7.85	$	961,490		7.46	$	834,320		7.35
Total capital (to risk-weighted assets)	$	1,820,860		14.11	$	1,702,144		14.97	$	1,862,806		14.45	$	1,637,286		14.43
Total capital minimum requirement		1,032,093		8.00		909,493		8.00		1,030,971		8.00		907,701		8.00
Excess	$	788,767		6.11	$	792,651		6.97	$	831,835		6.45	$	729,585		6.43
Tier 1 capital (to average assets) – Leverage ratio	$	1,572,025		10.35	$	1,574,806		11.57	$	1,734,719		11.82	$	1,515,096		11.16
Minimum leverage requirement		607,349		4.00		544,614		4.00		586,959		4.00		543,059		4.00
Excess	$	964,676		6.35	$	1,030,192		7.57	$	1,147,760		7.82	$	972,037		7.16
Risk-weighted assets	$	12,901,161			$	11,368,663			$	12,887,142			$	11,346,260
Total average assets (1)	$	15,183,720			$	13,615,348			$	14,673,981			$	13,576,477

(

1

) The quarterly total average assets reflect all debt securities at amortized cost, equity security with readily determinable fair values at the lower of cost or fair value, and equity securities without readily determinable fair values at historical cost.