Release Date: April 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you give us the average margin in the month of March and then the spot rate on interest-bearing or total deposits at the end of March?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: The NIM for the month of March was 2.99%. And then the spot rate for interest-bearing deposits at the end of March was 3.8%.
Q: What do you think takes you from the lower end of the NIM guidance range to the higher end?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: We're getting less deposit pricing pressure as the quarter goes on. Our new loans are at market rates, which will pull up the average rate on our loans. We also have some CRE loans that are repricing, which will improve the rate on the loan.
Q: Could you update us on the CD repricing or the CD maturities for the rest of the year?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: In the second quarter, we have $2.1 billion in CDs maturing at a yield of 4.57%. In Q3, $3.6 billion at 4.82%, and in Q4, $2 billion at 4.67%. In Q1 2025, we have $1.9 billion maturing at 4.18%.
Q: In a year where you don't have a need for massive deposit growth, how aggressive can you be on deposit pricing maybe outside the CD portfolio?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: We're facing less pressure to raise new deposits because we expect our loan growth to be slower. We plan to be more aggressive in pushing down the rates, especially as the treasury rates start declining.
Q: Just a quick follow-up on the margin. Is the flattish commentary off of the spot margin you referenced or the March margin of 2.99%?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: The margin will be down a couple of basis points in Q2, then flattish in Q3, and starts to lift in Q4, commensurate with our Fed cut assumptions.
Q: How much of the 1Q lift in core operating expenses was seasonality driven?
A: Heng Chen - Cathay General Bancorp - Chief Financial Officer, Executive Vice President, Treasurer of the Company and Executive Vice President, Chief Financial Officer of the Bank: The lift was influenced by the FICA hit, bonus catch-up, and accelerated charitable contributions. We expect to be close to the 3.5% upper range of expense growth guidance for the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.