Note 11 - Capital Resources

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Equity [Text Block]

11.         Capital Resources

Total equity was $2.74 billion as of December 31, 2023, an increase of $262.5 million, or 10.6%, from $2.47 billion at December 31, 2022, primarily due to net income of $354.1 million, other comprehensive income of $16.9 million, stock based compensation of $7.0 million, proceeds from dividend reinvestment of $3.5 million, stock issued to directors of $0.9 million, offset by common stock cash dividends of $98.6 million, purchases of treasury stock of $16.7 million, and shares withheld related to net share settlement of RSU’s of $4.5 million. . The Company paid cash dividends of $1.36 per common share in 2023, $1.36 per common share in 2022, and $1.27 per common share in 2021.

On May 26th, 2022, the Board of Directors approved a 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.

On February 21, 2023, the Company completed its May 2022 stock buyback program by repurchasing 375,090 shares at an average cost of $44.20 in the first quarter of 2023, for a total of $16.6 million.

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, 2023, and 2022, 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, 2023 and 2022:

As of December 31, 2023
		Principal		Not		Annualized	Current			Date of	Payable/
	Issuance	Balance of		Redeemable	Stated	Coupon	Interest			Rate	Distribution
Trust Name	Date	Notes		Until	Maturity	Rate	Rate			Change	Date
(Dollars in thousands)
Cathay Capital Trust I	June 26,	$	20,619	June 30,	June 30,	3-month		8.81	%	December 29,	March 30
	2003			2008	2033	SOFR				2023	June 30
						+ 3.15%					September 30
						+ 0.26161%					December 30
Cathay Statutory Trust I	September 17,		20,619	September 17,	September 17,	3-month		8.67	%	December 17,	March 17
	2003			2008	2033	SOFR				2023	June 17
						+ 3.00%					September 17
						+ 0.26161%					December 17
Cathay Capital Trust II	December 30,		12,887	March 30,	March 30,	3-month		8.56	%	December 29,	March 30
	2003			2009	2034	SOFR				2023	June 30
						+ 2.90%					September 30
						+ 0.26161%					December 30
Cathay Capital Trust III	March 28,		46,392	June 15,	June 15,	3-month		7.15	%	December 14,	March 15
	2007			2012	2037	SOFR				2023	June 15
						+ 1.48%					September 15
						+ 0.26161%					December 15
Cathay Capital Trust IV	May 31,		18,619	September 6,	September 6,	3-month		7.06	%	December 5,	March 6
	2007			2012	2037	SOFR				2023	June 6
						+ 1.40%					September 6
Total Junior Subordinated Notes		$	119,136

As of December 31, 2022
		Principal		Not		Annualized	Current			Date of	Payable/
	Issuance	Balance of		Redeemable	Stated	Coupon	Interest			Rate	Distribution
Trust Name	Date	Notes		Until	Maturity	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