Note 9 - Capital Resources

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

9. Capital Resources

Total equity was $2.45 billion at December 31, 2021, an increase of $28.1 million, or 1.2%, from $2.42 billion at December 31, 2020, primarily due to increases in net income of $298.3 million, proceeds from dividend reinvestment of $3.6 million, and stock based compensation of $6.0 million, offset by other comprehensive income of $8.4 million, shares withheld related to net share settlement of RSUs of $2.6 million, purchase of treasury stock of $167.1 million, and common stock cash dividends of $99.3 million. The Company paid cash dividends of $1.27 per common share in 2021 and $1.24 per common share in 2020.

On April 1, 2021, the Board of Directors approved a new stock repurchase program to buy back up to $75.0 million of the Company’s common stock. The $75.0 million share repurchase program was completed and terminated on August 5, 2021, with the repurchase of 1,832,481 shares for a total of $75.0 million, at an average cost of $40.93 per share.

On September 2, 2021, the Board of Directors approved a new stock repurchase program to buy back up to $125.0 million of the Company’s common stock. Under this program, the Company repurchased 2,153,576 shares for $92.1 million at an average cost of $42.77 for the year. During 2021, the Company repurchased 3,986,057 shares in total for approximately $167.1 million at an average cost of $41.92.

The five special purpose trusts established for the purpose of issuing the Capital Securities 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, all of which were issued before May 19, 2010, are currently included in the Tier 2 capital of the Bancorp for regulatory capital purposes. Under the Dodd-Frank Act, trust preferred securities issued before May 19, 2010, by bank holding companies with assets of less than $15.0 billion as of December 31, 2009, continue to qualify for Tier 1 capital treatment. As of December 31, 2021, and 2020, the Company’s assets exceeded the $15.0 billion threshold and, as a result, the Junior Subordinated Notes no longer qualify as Tier 1 capital for regulatory reporting purposes.

The table below summarizes the outstanding Junior Subordinated Notes issued by the Company to each trust as of December 31, 2021:

		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,	$	20,619	June 30,	June 30,	3-month		3.37	%	December 31,	March 31
	2003			2008	2033	LIBOR				2021	June 30
						+ 3.15%					September 30
											December 31
Cathay Statutory
Trust I	September 17,		20,619	September 17,	September 17,	3-month		3.22	%	December 17,	March 17
	2003			2008	2033	LIBOR				2021	June 17
						+ 3.00%					September 17
											December 17
Cathay Capital
Trust II	December 30,		12,887	March 30,	March 30,	3-month		3.12	%	December 31,	March 31
	2003			2009	2034	LIBOR				2021	June 30
						+ 2.90%					September 30
											December 31
Cathay Capital
Trust III	March 28,		46,392	June 15,	June 15,	3-month		1.68	%	December 15,	March 15
	2007			2012	2037	LIBOR				2021	June 15
						+ 1.48%					September 15
											December 15
Cathay Capital
Trust IV	May 31,		18,619	September 6,	September 6,	3-month		1.58	%	December 6,	March 7
	2007			2012	2037	LIBOR				2021	June 6
						+ 1.4%					September 6
											December 6
Total Junior Subordinated Notes		$	119,136