Cathay General Bancorp (CATY) Q4 2001 earnings summary

Executive summary

• Record 2001 net income of $42.62M, up 10.45% YoY; diluted EPS was $4.69, up from $4.25, with 21 consecutive quarters of double-digit earnings growth.

• Assets rose 11.16% to $2.45B, loans 14.10% to $1.64B and deposits 13.10% to $2.12B at year-end.

Financial highlights

• Net interest income before loan-loss provision was $93.20M, up from $90.40M; interest income fell 3.16% to $159.35M while interest expense fell $8.00M to $66.15M.

• Net income was $42.62M; Q4 net income was $11.54M and diluted EPS was $1.28.

• Provision for loan losses increased to $6.37M from $4.20M; non-interest income rose 15.86% to $14.78M, including $2.16M in securities gains.

• Non-interest expense rose 4.31% to $40.17M; income tax expense fell to $18.82M, with the effective tax rate declining to 30.63% from 36.17%.

Outlook and guidance

• Two branches, in Brooklyn and Sacramento, were expected to open in early Q2 2002; the Shanghai representative office was expected to open in Q2 after regulatory approval.

• Construction-financing demand remained strong despite recession conditions, with management expecting the trend to continue into 2002.

• Excluding impairment adjustments, adoption of SFAS No. 142 was expected to lower 2002 non-interest expense by ~$661,000 as goodwill amortization ceased.