Cathay General Bancorp (CATY) Q4 2004 earnings summary

Executive summary

• 2004 marked the first full year of combined operations after the October 2003 merger; integration was largely completed, and earnings grew for the 11th consecutive year.

• Record net income reached $86.8 million, up 56.2% YoY; diluted EPS was $1.72, up from $1.42.

Financial highlights

• Net interest income rose 69.0% to $214.8 million, driven by 58.9% growth in average earning assets and net interest margin expansion to 4.09% from 3.87%.

• Total assets grew 10.0% to $6.10 billion; gross loans rose 15.9% to $3.83 billion, and deposits increased 3.8% to $4.60 billion.

• Provision for loan losses was zero in 2004 versus $7.2 million in 2003; net charge-offs were $2.9 million versus net recoveries of $67,000.

• Non-interest income was $16.3 million versus $23.0 million, including $4.0 million of net securities losses; non-interest expense increased 64.4% to $90.7 million.

Outlook and guidance

• Management began 2005 optimistic about another record year, with plans to broaden branch locations, invest in technology, upgrade online banking, and improve customer service.

• Planned growth initiatives included extending SBA Preferred Lender status to more districts and pursuing strategic opportunities in technology and life sciences lending.