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EX - 99.1 2 d168303dex991.htm EX - 99.1 Exhibit 99.1 Cathay General Bancorp Announces First Quarter 2021 Results LOS ANGELES , April 26 , 2021 / PRNewswire / -- Cathay General Bancorp ( the " Company " , " we " , " us " , or " our " ) ( Nasdaq : CATY ) , the holding company for Cathay Bank , today announced its unaudited financial results for the quarter ended March 31 , 2021. The Company reported net income of $ 73.4 million , or $ 0.92 per share , for the first quarter of 2021 . FINANCIAL PERFORMANCE $ 46.9 million $ 0.89 $ 0.59 $ 0.89 $ 0.59 1.50 % 1.05 % 11.75 % 8.12 % 47.03 % 49.61 % 44.60 % ( unaudited ) Net income Basic earnings per common share Diluted earnings per common share Return on average assets Return on average total stockholders ' equity Efficiency ratio March 31 , 2021 $ 73.4 million $ 0.92 $ 0.92 1.57 % 12.23 % LLL Three months ended December 31 , 2020 $ 70.9 million March 31 , 2020 FIRST QUARTER HIGHLIGHTS • The net interest margin increased to 3.20 % in the first quarter of 2021 from 3.12 % in the fourth quarter of 2020 . There was a reversal of provisions for credit losses of $ 13.6 million in the first quarter of 2021 compared to a reversal for loan losses of $ 5.0 million for the fourth quarter of 2020 . " For the first quarter of 2021 , our net interest margin was 3.20 % , increasing 8 basis points from the fourth quarter of 2020. Also , there was a reversal of provisions for credit losses of $ 13.6 million in the first quarter of 2021 primarily due to the improved macroeconomic conditions , " commented Chang M. Liu , President and Chief Executive Officer of the Company . FIRST QUARTER INCOME STATEMENT REVIEW Net income for the quarter ended March 31 , 2021 , was $ 73.4 million , an increase of $ 26.5 million , or 56.5 % , compared to net income of $ 46.9 million for the same quarter a year ago . Diluted earnings per share for the quarter ended March 31 , 2021 , was $ 0.92 per share compared to $ 0.59 per share for the same quarter a year ago . Return on average stockholders ' equity was 12.23 % and return on average assets was 1.57 % for the quarter ended March 31 , 2021 , compared to a return on average stockholders ' equity of 8.12 % and a return on average assets of 1.05 % for the same quarter a year ago . Net interest income before provision for credit losses Net interest income before provision for credit losses increased $ 1.5 million , or 1.1 % , to $ 141.8 million during the first quarter of 2021 , compared to $ 140.3 million during the same quarter a year ago . The increase was due primarily to a decrease in interest expense from deposits , offset , in part , by a decrease in interest income from loans and securities . The net interest margin was 3.20 % for the first quarter of 2021 compared to 3.34 % for the first quarter of 2020 and 3.12 % for the fourth quarter of 2020 . For the first quarter of 2021 , the yield on average interest - earning assets was 3.68 % , the cost of funds on average interest - bearing liabilities was 0.67 % , and the cost of interest - bearing deposits was 0.63 % . In comparison , for the first quarter of 2020 , the yield on average interest - earning assets was 4.44 % , the cost of funds on average interest - bearing liabilities was 1.49 % , and the cost of interest - bearing deposits was 1.44 % . The decrease in the yield on average interest - earning assets resulted mainly from lower lending rates . The net interest spread , defined as the difference between the yield on average interest - earning assets and the cost of funds on average interest - bearing liabilities , was 3.01 % for the quarter ended March 31 , 2021 , compared to 2.95 % for the same quarter a year ago . ( Reversal ) / provision for credit losses As permitted under the Coronavirus , Aid , Relief and Economic Security Act ( the " CARES Act " ) and as extended by the Consolidated Appropriations Act , 2021 , the Company adopted the Current Expected Credit Losses ( " CECL " ) methodology for estimated credit losses effective as of January 1 , 2021. The adoption of CECL under a modified retrospective approach as of January 1 , 2021 increased the allowance for loan losses by $ 13.9 million and allowance for unfunded credit commitments by $ 0.5 million and an after - tax decrease to opening retained earnings of $ 10.2 million . As of March 31 , 2021 , the allowance for loan losses decreased $ 19.9 million to $ 160.6 million , or 1.03 % of gross loans , compared to $ 180.5 million , or 1.15 % of gross loans , as of January 1 , 2021. The change in the allowance for loan losses included a $ 12.1 million reversal for loan losses for the first quarter of 2021 , as a result of the improving macroeconomic conditions and $ 7.8 million in net charge - offs . In the first quarter of 2020 , a provision for loan losses of $ 25.0 million was recorded under the incurred loss method . The Company will continue to monitor the continuing impact of the COVID - 19 pandemic on credit risks and losses , as well as on customer demand deposits and other liabilities and assets . The following table sets forth the charge - offs and recoveries for the periods indicated : March 31 , 2021 Three months ended December 31 , 2020 March 31 , 2020 ( In thousands ) ( Unaudited ) Charge - offs : Commercial loans $ Total charge - offs Recoveries : 9,138 9,138 $ 8,613 8,613 $ 1,321 1,321 Commercial loans Real estate loans ( 1 ) Total recoveries Net charge - offs / ( recoveries ) $ 1,269 111 1,380 7,758 $ 912 109 1,021 7,592 $ ( 1 ) Real estate loans include commercial mortgage loans , residential mortgage loans , and equity lines . Allowance for credit losses 1,208 162 1,370 ( 49 ) The following table presents a roll forward of the allowance for credit losses for the periods indicated : Three Months Ended December 31 , 2020 Three Months Ended March 31 , 2021 Allowance for Credit Losses Rollforward Allowance for Loan Losses Reserve for Unfunded Loan Commitments Total Allowance for Credit Losses Allowance for Loan Losses Reserve for Unfunded Loan Commitments Total Allowance for Credit Losses Allowance for Loan Losses Three Months Ended March 31 , 2020 Reserve for Unfunded Loan Commitments Total Allowance for Credit Losses