Cathay General Bancorp · NASDAQ:CATY
Cathay General Bancorp — Q2 2023 Earnings Presentation
22 slides from Cathay General Bancorp's earnings presentation, Jul 24, 2023
Slide 1: Financial Earnings Results Second Quarter 2023
Financial Earnings Results Second Quarter 2023 July 24, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements about Cathay General Bancorp and its subsidiaries (collectively referred to herein as the “Company,” “we,” “us,” or “our”) within the meaning of the applicable provisions of the Private Securities Litigation Reform Act
Slide 3: Financial Highlights 2Q 2023
Financial Highlights 2Q 2023 Quarterly results ending Profitability: Return on Assets & Equity Return on Tangible Equity* June 30, 2023 20.00% 22.00% 18.00% Net Income 15.94% 15.73% 15.39% 19.48% 18.82% • $93.2 million 16.00% 14.62% 17.00% 14.47% 17.41% 17.80% 14.00% 16.85% 12.00% 12.00% 10.00% 8.00
Slide 4: Summary Balance Sheets
Summary Balance Sheets $ in millions, except per share data 6.30.23 3.31.23 QoQ Change Cash equivalents & ST investments $ 1,482 $ 1,133 $ 349 AFS debt securities 1,487 1,541 (54) Gross loans, net of discounts $ 18,943 $ 18,311 $ 632 Allowance for credit losses (155) (145) (10) Net Loans $ 18,788 $
Slide 5: Loan Composition
Loan Composition Total Loan Portfolio Average Loan Growth – QoQ Annualized • $19.0 billion Construction $ in billions as of 6.30.23 3% $17.9 $18.1 $18.2 $18.4 $17.5 +9.7% +4.8% +3.2% +3.2% 20.0% 18.000000 $0.6 $0.6 $0.6 $0.6 Residential $0.6 Mortgage* 16.000000 $3.2 $3.3 $3.2 $3.2 10.0% $3.2 31% 14.
Slide 6: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio Total CRE Geographic Distribution Total CRE $9.3 billion 49% of total loans NY Residential 16% 34% Construction Total CRE 3% $9.3 Billion CA 48% Residential TX 4% Mortgage* Retail 11% WA 3% 31% IL 3% Total Loans Total CRE 49% $19.0 Billion Other 8% Office 8% C&I 17%
Slide 7: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio LTV Distribution of Total CRE $9.3 Billion LTV & Size by Property Type • $1.74 mil avg. outstanding size Total CRE • weighted avg. LTV 50% Total CRE Weighted $ in millions Loan Portfolio Avg. LTV Residental $ 3,100 54% Retail $ 2,060 50% Office* $ 1,552 49% 40% to 50
Slide 8: Selected CRE and Construction Loan Portfolios
Selected CRE and Construction Loan Portfolios Residential CRE Portfolio Retail CRE Portfolio Construction Portfolio % based on $3.10 billion loans outstanding % based on $2.06 billion loans outstanding % based on $522 million loans outstanding 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 5% 10% 15
Slide 9: Selected CRE and Construction Loan Portfolios (cont'd)
Selected CRE and Construction Loan Portfolios (cont’d) Office CRE Portfolio Office CRE Loan Total CRE % based on $1.55 billion loans outstanding $ in millions Portfolio Weighted Avg. LTV 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Office CRE Portfolio Office Building 34% Office Building $ 534 47% Of
Slide 10: Residential Mortgage Portfolio
Residential Mortgage Portfolio Geographic Distribution of SFR LTV Distribution Residential Mortgage • $416,280 avg. outstanding size • weighted avg. LTV 55% NY 56% to 60% 35% 15% 51% to 55% 10% $5.8 Billion Residential CA Over 60% 52% Mortgage* 42% Under 50% 33% WA 4% TX 3% NJ 2% Other 4% * Resident
Slide 11: Allowance for Loan and Lease Losses (ALLL)
Allowance for Loan and Lease Losses (ALLL) ALLL Ratio ALLL Composition $ in millions $ in millions 180 180 1.50% Millions $155 $155 $149 $149 $149 $149 160 160 $146 $145 1.30% $146 $145 $18.2 $22.2 $18.3 140 $23.8 140 $17.6 1.10% 120 120 $73.5 0.90% 100 100 $68.6 $70.1 $68.4 $70.4 80 0.84% 0.82% 0.8
Slide 12: Asset Quality Metrics
Asset Quality Metrics Reserves and Net Charge-Offs Classified Loans Ratio $ in millions 6.00% 1.00% 0.84% 5.90% 0.82% 0.82% 600 5.80% 0.80% 5.70% 0.79% 5.60% 0.90% 5.50% 5.40% 5.30% $256 5.20% 5.10% 5.00% 0.80% 4.90% $240 500 $244 4.80% 4.70% 4.60% 4.50% 4.40% $240 0.70% 4.30% 4.20% 4.10% $193 4.00%
Slide 13: Deposit Mix
Deposit Mix Total Deposits Average Deposit Growth – QoQ Annualized $ in billions • $19.1 billion $18.7 +4% $18.9 +2% $18.9 as of 6.30.23 19 $18.2 +2% $18.3 +9% MMA 20% 16% 17 $3.6 $3.3 $3.4 $3.6 $3.7 10% 15 IB Checking & $3.4 $3.0 Savings 13 $4.4 0% 18% $5.3 $5.2 $3.7 11 $4.0 -10% $4.3 9 Time 47% 7
Slide 14: Summary Income Statements
Summary Income Statements $ in millions, except per share data 6.30.23 3.31.23 $ Change % Change Net Interest Income $ 181.5 $ 192.4 $ (10.9) (5.7)% Noninterest income 12.5 9.4 3.1 32.6% Net (losses) / Gains from equity securities 10.7 4.9 5.8 119.7% Total Noninterest Income 23.1 14.2 8.9 62.2% Noni
Slide 15: Loan Yields, Deposit Costs and Net Interest Income
Loan Yields, Deposit Costs and Net Interest Income Average Loan Yield vs Prime Rate and 1M SOFR Average Cost of Deposits vs Fed Funds Rate 4.99% 8.16% 350 4.52% 5.00% 7.69% 291 8.00% 6.83% 300 3.65% 4.00% 5.81% 5.93% 240 235 5.35% 250 5.33% 6.00% 4.92% 4.42% 200 189 3.00% 4.14% 4.68% 159 4.00% 3.37%
Slide 16: Non-Interest Income
Non-Interest Income Non-Interest Income* $ in millions 18 16 $15.6 $1.6 $13.5 $13.1 $12.4 $12.4 14 $1.6 $1.7 $1.5 $1.6 12 $1.6 $1.8 $4.0 $1.6 10 $1.6 $1.7 8 $4.2 $3.9 $3.9 $3.6 6 4 $8.4 $6.0 $6.1 $5.1 $5.5 2 - 2Q22 3Q22 4Q22 1Q23 2Q23 other operating income wealth management fees letter of credit co
Slide 17: Operating Expense & Efficiency
Operating Expense & Efficiency Core Noninterest Expense* Core Noninterest Expense* & Efficiency Ratio* $ in millions $ in millions $70.4 $67.3 71 $66.6 80 40.00% $65.4 $70.4 $63.1 $8.0 $66.6 $65.4 $67.3 38.00% $5.0 70 $63.1 $7.1 36.00% 61 $7.9 $3.2 $3.0 60 $2.2 $7.1 34.00% $2.0 35.1% $2.0 $7.4 $8.9
Slide 18: Strong Capital Ratios
Strong Capital Ratios • Capital Ratio well above regulatory standards that continues to place Cathay 16.00% in the “well capitalized” category, 13.88% calculated under the Basel III capital 12.38% 12.38% 14.00% rules. 10.45% 12.00% 10.50% • 10.00% 8.50% Book Value Per Common Share is 8.00% 7.00% $35
Slide 19: Management Guidance Full Year 2023
Management Guidance Full Year 2023 Full Year Prior Full Year 2023 Guidance Outlook 2022 Actual Loans, end of • Estimated growth rate 5% to 7% • Estimated growth rate 1% to 3% $18.3 billion period +11.7% YoY Deposits • Estimated growth rate 5% to 7% • Estimated growth rate 2% to 4% $18.5 billion +2.5
Slide 20: Appendix
Appendix hs
Slide 21: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation Selected Consolidation Financial Information ($ in thousands) (unaudited) We use certain non-GAAP financial measures to provide supplemental information regarding our performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP fina
Slide 22: Cathay General Bancorp
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