Cathay General Bancorp (CATY) Q4 2002 earnings summary

Executive summary

• Record FY2002 net income of $48.70 million, up 14.27% YoY; diluted EPS was $2.69 versus $2.35.

• Net loans grew 12.69% to $1.85 billion and deposits rose 9.06% to $2.31 billion; growth in commercial mortgage lending and lower-cost core deposits supported expansion.

• Q4 net income was $12.07 million, up from $11.54 million YoY but down from $13.01 million in Q3; diluted EPS was $0.67.

Financial highlights

• Net interest income before loan-loss provision increased 11.74% to $104.14 million; total interest income was $144.06 million and interest expense fell to $39.92 million.

• Non-interest income rose 9.42% to $16.17 million, led by deposit fees, loan-related and other operating fees; securities gains were $1.93 million.

• Non-interest expense increased 7.85% to $43.32 million, including higher salaries and new-branch costs; income tax expense was $22.30 million.

• Total assets rose 12.27% to $2.75 billion; stockholders’ equity increased 17.05% to $287.96 million.

Outlook and guidance

• FY2003 effective tax rate expected to exceed recent years as registered-investment-company tax benefits end; the real estate investment trust received regulatory approval in February 2003 and began building assets.

• Management anticipated minimal runoff from substantial time deposits maturing within one year, based on historical experience, with replenishment through normal deposit growth.

• Management expected available liquidity sources to cover operating needs; the outlook remained exposed to uncertain economic recovery and borrower debt-service capacity.