Note 11 - Capital Resources

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

11.         Capital Resources

Total equity was $2.47 billion as of December 31, 2022, an increase of $27.8 million, or 1.1%, from $2.45 billion at December 31, 2021, primarily due to net income of $360.6 million, proceeds from dividend reinvestment of $3.7 million, and stock based compensation of $7.0 million, offset by other comprehensive income/(loss) of $99.2 million, shares withheld related to net share settlement of RSUs of $2.9 million, purchase of treasury stock of $141.3 million, and common stock cash dividends of $101.0 million. The Company paid cash dividends of $1.36 per common share in 2022, $1.27 per common share in 2021, and $1.24 per common share in 2020.

The Company completed its September 2021 stock buyback program by repurchasing 704,927 shares at an average cost of $46.67 for a total of $32.9 million during the first quarter of 2022.

On May 26th, 2022, 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 2,522,538 shares for $108.4 million at an average cost of $42.98 for the year. During 2022, the Company repurchased 3,227,465 shares in total for approximately $141.3 million at an average cost of $43.79.

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, 2022, and 2021, 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, 2022 and 2021:

As of December 31, 2022
		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		6.82	%	December 29,	March 30
	2003			2008	2033	LIBOR				2022	June 30
						+ 3.15%					September 30
											December 30
Cathay Statutory Trust I	September 17,		20,619	September 17,	September 17,	3-month		6.53	%	December 18,	March 17
	2003			2008	2033	LIBOR				2022	June 17
						+ 3.00%					September 17
											December 17
Cathay Capital Trust II	December 30,		12,887	March 30,	March 30,	3-month		6.57	%	December 29,	March 30
	2003			2009	2034	LIBOR				2022	June 30
						+ 2.90%					September 30
											December 30
Cathay Capital Trust III	March 28,		46,392	June 15,	June 15,	3-month		4.77	%	December 14,	March 15
	2007			2012	2037	LIBOR				2022	June 15
						+ 1.48%					September 15
											December 15
Cathay Capital Trust IV	May 31,		18,619	September 6,	September 6,	3-month		4.54	%	December 5,	March 6
	2007			2012	2037	LIBOR				2022	June 6
						+ 1.4%					September 6
											December 6
Total Junior Subordinated Notes		$	119,136

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