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EX - 99.1 2 d210581dex991.htm EX - 99.1 Exhibit 99.1 Cathay General Bancorp Announces Third Quarter 2021 Results LOS ANGELES , Oct. 25 , 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 September 30 , 2021. The Company reported net income of $ 72.4 million , or $ 0.93 per share , for the third quarter of 2021 . FINANCIAL PERFORMANCE Three months ended ( unaudited ) Net income September 30 , 2021 June 30 , 2021 September 30 , 2020 $ 72.4 million $ 77.2 million $ 56.8 million Basic earnings per common share $ 0.93 $ 0.98 $ 0.71 Diluted earnings per common share $ 0.93 $ 0.97 $ 0.71 Return on average assets 1.45 % 1.60 % 1.18 % Return on average total stockholders ' equity Efficiency ratio 11.61 % 12.53 % 9.53 % 43.85 % 43.41 % 51.53 % THIRD QUARTER HIGHLIGHTS • Total loans , excluding Paycheck Protection Program ( " PPP " ) loans , increased by 9.1 % annualized . • The net interest margin increased to 3.22 % in the third quarter of 2021 from 3.02 % in third quarter of 2020 . Quarterly earnings per share increased 31.0 % compared to the same quarter in 2020 . • Total deposits , excluding time deposits , increased for the quarter by $ 686.3 million , or 25.9 % annualized . For the third quarter of 2021 , total loans , excluding PPP loans , increased by 9.1 % annualized . " The Company announced a new share repurchase program of up to $ 125 million on September 2021 and repurchased 942,613 shares of common stock at an average cost of $ 39.40 per share during the quarter " commented Chang M. Liu , President and Chief Executive Officer of the Company . THIRD QUARTER INCOME STATEMENT REVIEW Net income for the quarter ended September 30 , 2021 , was $ 72.4 million , an increase of $ 15.6 million , or 27.5 % , compared to net income of $ 56.8 million for the same quarter a year ago . Diluted earnings per share for the quarter ended September 30 , 2021 , was $ 0.93 per share compared to $ 0.71 per share for the same quarter a year ago . Return on average stockholders ' equity was 11.61 % and return on average assets was 1.45 % for the quarter ended September 30 , 2021 , compared to a return on average stockholders ' equity of 9.53 % and a return on average assets of 1.18 % for the same quarter a year ago . Net interest income before provision for credit losses Net interest income before provision for credit losses increased $ 15.0 million , or 10.9 % , to $ 152.5 million during the third quarter of 2021 , compared to $ 137.5 million during the same quarter a year ago . The increase was due primarily to a decrease in interest expense from deposits . The net interest margin was 3.22 % for the third quarter of 2021 compared to 3.02 % for the third quarter of 2020 and 3.24 % for the second quarter of 2021 . For the third quarter of 2021 , the yield on average interest - earning assets was 3.56 % , the cost of funds on average interest - bearing liabilities was 0.48 % , and the cost of interest - bearing deposits was 0.44 % . In comparison , for the third quarter of 2020 , the yield on average interest - earning assets was 3.78 % , the cost of funds on average interest - bearing liabilities was 1.04 % , and the cost of interest - bearing deposits was 0.99 % . The decrease in the yield on average interest - earning assets resulted mainly from lower lending rates . The decrease in average interest - bearing liabilities was a result of the renewal of maturing higher rate certificates of deposit at lower rates and the continuing run off of brokered CD's during the quarter . 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 3.08 % for the quarter ended September 30 , 2021 , compared to 2.74 % 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 provision for credit losses of $ 3.1 million in the third quarter of 2021 compared to a reversal for credit losses of $ 9.0 million in the second quarter of 2021 and a $ 12.5 million provision for loan losses in the third quarter of 2020. The third quarter provision for credit losses was primarily driven by the net charge - offs during the period and the growth of loans . As of September 30 , 2021 , the allowance for loan losses increased by $ 689 thousand to $ 131.9 million , or 0.83 % of gross loans , compared to $ 131.3 million , or 0.84 % of gross loans , as of June 30 , 2021. The change in the allowance for loan losses during the third quarter of 2021 included a $ 3.0 million provision for loan losses , and $ 2.3 million in net charge - offs . In the third quarter of 2020 , a provision for loan losses of $ 12.5 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 continue to monitor the continuing impact of the COVID - 19 pandemic on credit risks and losses , as well as on customer deposits and other liabilities and assets . The following table sets forth the charge - offs and recoveries for the periods indicated : Charge - offs : September 30 , 2021 Three months ended June 30 , 2021 September 30 , 2020 ( In thousands ) ( Unaudited ) Commercial loans $ 2,649 $ 7,712 $ Real estate loans ( 1 ) 3 Total charge - offs 2,652 7,712 Nine months ended Sept 30 , 2021 2020 6,956 $ 19,499 $ 13,383 3 6,956 19,502 13,383 Recoveries : Commercial loans Construction loans 121 155 3,796 1,545 6,354 76 Real estate loans ( 1 ) Total recoveries Net charge - offs 144 303 110 76 558 341 458 3,906 $ 2,311 $ 7,254 $ 3,050 $ 2,179 17,323 435 6,789 $ 6,594 ( 1 ) Real estate loans include commercial mortgage loans , residential mortgage loans , and equity lines . Non - interest income Non - interest income , which includes revenues from depository service fees , letters of credit commissions , securities gains ( losses ) , wire transfer fees , and other sources of fee income , was $ 12.2 million for the third quarter of 2021 , an increase of $ 2.2 million , or 22.0 % , compared to $ 10.0 million for the third quarter of 2020. The