Cathay General Bancorp(US:CATY)2021-05-06 16:00Financial Performance - Net income for Q1 2021 was $73.4 million, an increase of $26.5 million, or 56.5%, compared to $46.9 million in Q1 2020[230] - Diluted earnings per share for Q1 2021 was $0.92, up from $0.59 in the same quarter a year ago[230] - Non-interest income rose to $10.0 million, a 72.4% increase compared to $5.8 million in the same quarter last year[243] - The net interest income before provision for credit losses increased by $1.5 million, or 1.1%, to $141.8 million in Q1 2021[233] - Return on average stockholders' equity was 12.18% for Q1 2021, compared to 8.12% for the same quarter a year ago[231] Interest Margin and Loans - Total net interest margin increased to 3.20% in Q1 2021 from 3.12% in Q4 2020[229] - The yield on average interest-earning assets was 3.68% in Q1 2021, down from 4.44% in Q1 2020[235] - The cost of funds on average interest-bearing liabilities was 0.67% in Q1 2021, compared to 1.49% in Q1 2020[235] - Total loans increased to $15,691,976 thousand with a net interest income of $141,818 thousand, reflecting a yield of 4.13%[1] - The net interest spread improved to 3.01% from 2.95% year-over-year[1] Asset and Liability Management - Total assets reached $19,011,161 thousand, an increase from $18,003,041 thousand[1] - Total assets increased by $187.1 million, or 1.0%, to $19.2 billion as of March 31, 2021, compared to $19.0 billion as of December 31, 2020[247] - Securities available-for-sale decreased to $0.9 billion, representing 4.7% of total assets as of March 31, 2021, down from 5.4% as of December 31, 2020[252] - Total deposits were $16.4 billion at March 31, 2021, an increase of $244.2 million, or 1.5%, from $16.1 billion at December 31, 2020[303] - Total equity was $2.46 billion as of March 31, 2021, an increase of $45.1 million from $2.42 billion as of December 31, 2020[314] Credit Quality and Loan Losses - The allowance for loan losses decreased by $19.8 million to $147.3 million, representing 0.94% of gross loans, compared to 1.07% previously[241] - Total charge-offs for the quarter were $9,138 thousand, significantly higher than $1,321 thousand in the same quarter last year[241] - Non-performing assets increased by $23.9 million, or 30.8%, to $101.5 million at March 31, 2021, compared to $77.6 million at December 31, 2020[262] - The ratio of non-performing assets to total assets was 0.5% at March 31, 2021, compared to 0.4% at December 31, 2020[262] - The allowance for loan losses to non-performing loans was 152.5% as of March 31, 2021, compared to 229.2% as of December 31, 2020[272] Capital Adequacy - As of March 31, 2021, Cathay General Bancorp's Common Equity Tier 1 to Risk-Weighted Assets ratio was 14.00%, exceeding the minimum required ratio of 7.00%[319] - Cathay Bank reported a Total Capital to Risk-Weighted Assets ratio of 15.25% as of March 31, 2021, above the minimum requirement of 10.50%[319] - Capital levels at Bancorp and the Bank exceed all capital adequacy requirements under the fully phased-in Basel III Capital Rules as of March 31, 2021[319] Derivative Instruments and Interest Rate Risk - The notional amount of interest rate swap contracts as of March 31, 2021, was $119.1 million, with a weighted average fixed rate of 2.61%[327] - The Bank's outstanding interest rate swap contracts had a notional amount of $819.8 million as of March 31, 2021, with a weighted average fixed rate of 3.26%[329] - The estimated impact of a +200 basis point change in interest rates would result in a 16.6% increase in net interest income volatility[343] Operational Efficiency - Non-interest expense increased by $6.2 million, or 9.5%, totaling $71.4 million, driven by higher salaries and contributions to the Cathay Bank Foundation[244] - The efficiency ratio was reported at 47.0%, up from 44.6% in the same quarter last year[244] - The Company declared a cash dividend of $0.31 per share on 79,514,076 shares, resulting in total cash dividends of $24.6 million in Q1 2021[322]