Cathay General Bancorp (CATY) Q4 2011 earnings summary

Executive summary

• FY11 net income attributable to common stockholders was $83.7M, or $1.06/share, versus a $4.8M loss, or $0.06/share, in FY10; Q4 common income was $18.0M, or $0.23/share, versus a $29.8M loss, or $0.41/share, in Q4’10.

• FY11 profitability improved mainly on lower credit-loss provisions, stronger net interest income, and reduced OREO and FDIC assessment costs.

Financial highlights

• FY11 net interest income rose 5.3% to $313.7M; provision for credit losses fell to $27.0M from $156.9M in FY10.

• FY11 net income attributable to the Bancorp was $100.2M versus $11.6M in FY10; non-interest income increased 57.8% to $50.9M.

• Total assets declined 1.5% to $10.6B; gross loans increased 2.7% to $7.06B, while investment securities fell to $2.45B from $2.84B.

• FY11 net charge-offs declined to $66.2M from $126.4M; non-performing assets fell 7.5% to $300.6M, while OREO rose $15.0M to $92.7M.

Outlook and guidance

• Management expected liquidity sources to meet operating needs for the next 12 months and anticipated time-deposit maturities to produce no significant net runoff, based on historical experience.

• A request for regulatory approval to pay a Bank dividend in Q2’12 was planned to fund at least two years of holding-company operating expenses; additional quarterly distributions were planned from Q3’12, subject to approval.

• Partial or full TARP redemption was contemplated in 2012 or 2013, dependent on earnings and regulatory approval for Bank dividends.