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Cathay General Bancorp (NASDAQ:CATY)

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On Thursday, Shares of Cathay General Bancorp (NASDAQ:CATY), added 3.35% and closed at $38.22 in the last trading session. The last trading range of the stock ranges between $37.50 and $39.09. Cathay General Bancorp (the “Company”, NASDAQ: CATY), the holding company for Cathay Bank, recently declared net income of $48.9 million, or $0.61 per share, for the first quarter of 2017.

FIRST QUARTER HIGHLIGHTS

Diluted earnings per share raised 7% to $0.61 per share for the first quarter of 2017 contrast to $0.57 per share for the same quarter a year ago.

Total loans raised $164 million, or 6% annualized, apart from loans held for sale, to $11.4 billion for the quarter.

“For the first quarter of 2017, our total loans raised $164 million or 6% annualized to $11.4 billion.  Also, our net interest margin raised to 3.49% during the first quarter contrast to 3.36% in the fourth quarter of 2016 mainly as a result of the payoff of high cost borrowings and higher interest rates,” commented Pin Tai, Chief Executive Officer and President of the Company.

“We are happy to declare that on March 20, 2017, the Federal Reserve Board approved our application to acquire SinoPac Bancorp, the parent of Far East National Bank,” added Dunson Cheng, Executive Chairman of the Board of the Company.  The acquisition remains subject to receipt of Taiwan regulatory approvals and the satisfaction of customary conditions.

FIRST QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended March 31, 2017, was $48.9 million, a boost of $2.8 million, or 6.0%, contrast to net income of $46.2 million for the same quarter a year ago.  Diluted earnings per share for the quarter ended March 31, 2017, was $0.61 contrast to $0.57 for the same quarter a year ago.

Return on average stockholders’ equity was 10.73% and return on average assets was 1.42% for the quarter ended March 31, 2017, contrast to a return on average stockholders’ equity of 10.66% and a return on average assets of 1.43% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses raised $9.7 million, or 9.5%, to $112.1 million during the first quarter of 2017 contrast to $102.4 million during the same quarter a year ago.  The increase was due mainly to a boost in interest income from loans and a decrease in interest expense from securities sold under agreements to repurchase, partially offset by a decrease in interest income from investment securities.

The net interest margin was 3.49% for the first quarter of 2017 contrast to 3.42% for the first quarter of 2016 and 3.36% for the fourth quarter of 2016.

For the first quarter of 2017, the yield on average interest-earning assets was 4.07%, the cost of funds on average interest-bearing liabilities was 0.80%, and the cost of interest-bearing deposits was 0.69%.  In comparison, for the first quarter of 2016, the yield on average interest-earning assets was 4.09%, the cost of funds on average interest-bearing liabilities was 0.89%, and the cost of interest-bearing deposits was 0.69%. The decrease in the yield on average interest earning assets resulted mainly from higher deposits at the Federal Reserve Bank.  The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 3.27% for the quarter ended March 31, 2017, contrast to 3.20% for the same quarter a year ago.

Analyst recommendation for this stock stands at 2.60.