In This Article:
Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cathay General Bancorp (NASDAQ:CATY) reported a net income of $80.2 million for Q4 2024, marking an 18.8% increase compared to Q3.
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Earnings per share increased by 19.1% to $1.12 in Q4 2024, up from $0.94 in Q3.
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The company repurchased 506,651 shares of common stock, indicating strong capital management.
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Total core deposits increased by 16.7% annualized, driven by seasonal factors and marketing activities.
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The tier one leverage capital ratio improved to 10.97% as of December 31, 2024, reflecting a strong capital position.
Negative Points
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Total deposits decreased by $258 million or 5.3% annualized during Q4 2024, primarily due to a decrease in broker deposits.
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Net charge-offs increased significantly to $16.3 million in Q4 2024, compared to $4.2 million in Q3.
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Nonaccrual loans rose to 0.83% of total loans, with a notable increase due to a $16 million CRE loan reclassified as nonaccrual.
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The reserve to loan ratio decreased to 0.83% for Q4 from 0.85% in Q3, indicating a slight reduction in loan loss reserves.
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Noninterest income decreased by $4.9 million in Q4 2024, primarily due to changes in market-to-market and realized gains.
Q & A Highlights
Q: Could you give us the average margin for December and the spot rate on deposits at the end of the year? A: The average margin for December was 3.11%, including six basis points of interest recoveries. The total weighted spot rate at year-end was 3.52% for interest-bearing deposits. - Heng Chen, CFO
Q: How much in CDs do you have maturing in the first quarter, and what are the expected renewal rates? A: We have 4.2 billion in CDs maturing from our Chinese Lunar New Year promotion, with an average yield of 4.6%. We are offering renewals at rates between 4% and 4.1%, depending on the deposit size. - Heng Chen, CFO
Q: Can you provide more details on the core expense growth of roughly 5%? A: The increase is mainly due to the full-year impact of staff additions in 2024 and higher bonus accruals for next year. We've been adding staff to the risk side of our business to meet regulatory expectations. - Heng Chen, CFO and Chang Liu, CEO
Q: What is the impact of the wildfires on your credit exposure? A: We have assessed the affected areas and found no loss reported in our commercial real estate, business banking, or SBA portfolios. There are some reported items in the C&I portfolio and a few mortgages and HELOCs, but these are small compared to our total mortgage assets. - Chang Liu, CEO