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EX - 99.1 2 d65936dex991.htm EX - 99.1 Exhibit 99.1 Cathay General Bancorp Announces Second Quarter 2021 Results LOS ANGELES , July 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 June 30 , 2021. The Company reported net income of $ 77.2 million , or $ 0.97 per share , for the second quarter of 2021 . FINANCIAL PERFORMANCE Three months ended ( unaudited ) Net income June 30 , 2021 March 31 , 2021 June 30 , 2020 $ 77.2 million $ 73.4 million $ 54.3 million Basic earnings per common share $ 0.98 $ 0.92 $ 0.68 Diluted earnings per common share $ 0.97 $ 0.92 $ 0.68 Return on average assets 1.60 % 1.57 % 1.15 % Return on average total stockholders ' equity Efficiency ratio 12.53 % 12.18 % 9.31 % 43.41 % 47.03 % 44.82 % SECOND QUARTER HIGHLIGHTS • Total loans , excluding Paycheck Protection Program loans , increased by 3.4 % annualized . • The net interest margin increased to 3.24 % in the second quarter of 2021 from 3.20 % in the first quarter of 2021 and 3.02 % in second quarter of 2020 . • Quarterly earnings per share increased 5.75 % from first quarter of 2021 and 42.6 % from same quarter in 2020 . • Total deposits , excluding time deposits , increased for the quarter by $ 462.2 million , or 18.3 % annualized . " For the second quarter of 2021 , total loans , excluding Paycheck Protection Program loans , increased by 3.4 % annualized . Under ou previously announced April 2021 stock repurchase program , we repurchased 1.5 million shares at an average cost of $ 41.46 per share , for a total of $ 63.5 million , during the second quarter , " commented Chang M. Liu , President and Chief Executive Officer of the Company . SECOND QUARTER INCOME STATEMENT REVIEW Net income for the quarter ended June 30 , 2021 , was $ 77.2 million , an increase of $ 22.9 million , or 42.2 % , compared to net income of $ 54.3 million for the same quarter a year ago . Diluted earnings per share for the quarter ended June 30 , 2021 , was $ 0.97 per share compared to $ 0.68 per share for the same quarter a year ago . Return on average stockholders ' equity was 12.53 % and return on average assets was 1.60 % for the quarter ended June 30 , 2021 , compared to a return on average stockholders ' equity of 9.31 % and a return on average assets of 1.15 % for the same quarter a year ago . Net interest income before provision for credit losses Net interest income before provision for credit losses increased $ 13.5 million , or 10.0 % , to $ 148.0 million during the second quarter of 2021 , compared to $ 134.5 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 3.24 % for the second quarter of 2021 compared to 3.02 % for the second quarter of 2020 and 3.20 % for the first quarter of 2021 . For the second quarter of 2021 , the yield on average interest - earning assets was 3.62 % , the cost of funds on average interest- bearing liabilities was 0.53 % , and the cost of interest - bearing deposits was 0.48 % . In comparison , for the second quarter of 2020 , the yield on average interest - earning assets was 3.91 % , the cost of funds on average interest - bearing liabilities was 1.20 % , and the cost of interest - bearing deposits was 1.16 % . 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 3.09 % for the quarter ended June 30 , 2021 , compared to 2.71 % 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 Company recorded a reversal for credit losses of $ 9.0 million in the second quarter of 2021 compared to a reversal for credit losses of $ 13.6 million in the first quarter of 2021 and a $ 25.0 million provision for loan losses in the second quarter of 2020. The first and second quarter reversal for credit losses were primarily driven by the more favorable macroeconomic forecast in the two periods . As of June 30 , 2021 , the allowance for loan losses decreased $ 12.6 million to $ 131.3 million , or 0.84 % of gross loans , compared to $ 145.1 million , or 0.93 % of gross loans , as of March 31 , 2021. The change in the allowance for loan losses included a $ 6.6 million reversal for loan losses for the second quarter of 2021 , and $ 7.3 million in net charge - offs . In the second quarter of 2020 , a provision for loan losses of $ 25.0 million was recorded under the incurred loss method , which includes management's projection of the potential impacts from the COVID - 19 pandemic at that time . The Company will