Note 22 - Regulatory Matters

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

22. 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, 2019 and 2018, 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, 2019, and December 31, 2018, are presented in the tables below:

	Actual				Minimum Capital Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
December 31, 2019	(Dollars in thousands)
Common Equity Tier 1 to Risk-Weighted Assets
Cathay General Bancorp	$	1,892,321		12.51	$	1,059,259		7.00	$	983,597		6.50
Cathay Bank		1,959,832		12.97		1,057,880		7.00		982,318		6.50
Tier 1 Capital to Risk-Weighted Assets
Cathay General Bancorp		1,892,321		12.51		1,286,243		8.50		1,210,581		8.00
Cathay Bank		1,959,832		12.97		1,284,569		8.50		1,209,006		8.00
Total Capital to Risk-Weighted Assets
Cathay General Bancorp		2,134,900		14.11		1,588,888		10.50		1,513,227		10.00
Cathay Bank		2,086,911		13.81		1,586,821		10.50		1,511,258		10.00
Leverage Ratio
Cathay General Bancorp		1,892,321		10.83		699,173		4.00		873,966		5.00
Cathay Bank		1,959,832		11.23		697,976		4.00		872,470		5.00

	Actual				Minimum Capital Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
December 31, 2018	(Dollars in thousands)
Common Equity Tier 1 to Risk-Weighted Assets
Cathay General Bancorp	$	1,736,854		12.43	$	890,524		6.375	$	907,985		6.50
Cathay Bank		1,904,820		13.66		889,287		6.375		906,724		6.50
Tier 1 Capital to Risk-Weighted Assets
Cathay General Bancorp		1,736,854		12.43		1,100,059		7.875		1,117,520		8.00
Cathay Bank		1,904,820		13.66		1,098,531		7.875		1,115,968		8.00
Total Capital to Risk-Weighted Assets
Cathay General Bancorp		1,976,995		14.15		1,379,439		9.875		1,396,900		10.00
Cathay Bank		2,029,462		14.55		1,377,523		9.875		1,394,961		10.00
Leverage Ratio
Cathay General Bancorp		1,736,854		10.83		641,755		4.00		802,146		5.00
Cathay Bank		1,904,820		11.89		640,807		4.00		800,983		5.00