Note 23 - Regulatory Matters

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

23.         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%.  As of December 31, 2023, and 2022, 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, 2023, and December 31, 2022, 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, 2023	(In thousands)
Common Equity Tier 1 to Risk-Weighted Assets
Cathay General Bancorp	$	2,430,773		12.84	$	1,325,277		7.00	$	1,230,615		6.50
Cathay Bank		2,501,439		13.23		1,323,846		7.00		1,229,286		6.50
Tier 1 Capital to Risk-Weighted Assets
Cathay General Bancorp		2,430,773		12.84		1,609,265		8.50		1,514,602		8.00
Cathay Bank		2,501,439		13.23		1,607,527		8.50		1,512,967		8.00
Total Capital to Risk-Weighted Assets
Cathay General Bancorp		2,709,888		14.31		1,987,916		10.50		1,893,253		10.00
Cathay Bank		2,665,054		14.09		1,985,769		10.50		1,891,209		10.00
Leverage Ratio
Cathay General Bancorp		2,430,773		10.55		921,473		4.00		1,151,841		5.00
Cathay Bank		2,501,439		10.87		920,670		4.00		1,150,838		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, 2022	(In thousands)
Common Equity Tier 1 to Risk-Weighted Assets
Cathay General Bancorp	$	2,182,066		12.21	$	1,250,914		7.00	$	1,161,563		6.50
Cathay Bank		2,276,830		12.75		1,250,461		7.00		1,161,142		6.50
Tier 1 Capital to Risk-Weighted Assets
Cathay General Bancorp		2,182,066		12.21		1,518,967		8.50		1,429,616		8.00
Cathay Bank		2,276,830		12.75		1,518,417		8.50		1,429,098		8.00
Total Capital to Risk-Weighted Assets
Cathay General Bancorp		2,452,781		13.73		1,876,371		10.50		1,787,020		10.00
Cathay Bank		2,432,045		13.61		1,875,691		10.50		1,786,373		10.00
Leverage Ratio
Cathay General Bancorp		2,182,066		10.08		865,470		4.00		1,081,838		5.00
Cathay Bank		2,276,830		10.53		864,918		4.00		1,081,148		5.00