Cathay General Bancorp (NASDAQ:CATY) Q3 2020 Earnings Conference Call - Final Transcript

Oct 26, 2020 • 06:00 pm ET

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Cathay General Bancorp (NASDAQ:CATY) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions]

Our first question comes from Michael Young of Truist Securities. Your line is open.

Analyst
Michael Young

Hey. Thanks for taking the question.

Executive
Chang M. Liu

Hi Michael.

Analyst
Michael Young

I appreciate the commentary on the share buyback reinstatement. Could you maybe help size that or frame that for us, and kind of your expectations given there's not a lot standing on the remaining program, and how you guys would think about your kind of future programs and how much capital to deploy?

Executive
Heng W. Chen

Yeah, Michael, right now, our plan is to hopefully complete the $10.7 million remaining here in the fourth quarter, and then we would go to our Board for a new authorization in 2021, and hopefully, we will announce in the January call. We hope that based on our excess capital generation that -- and the fact that our credit quality seems to have stabilized, that we could start buying back at a higher pace in 2021 than the $10.7 million that we hope to complete in Q4. But we're going to look at it every quarter, so that we don't -- we maintain our strong capital ratio.

Analyst
Michael Young

Okay. That makes sense. And I guess the other side of that equation would be organic growth. Can you maybe provide any outlook on organic growth expectation, and maybe the contributing factors whether it be residential or commercial? Any outlook on pipelines, etc., would be helpful.

Executive
Chang M. Liu

Well, Michael, in light of the current economic uncertainties caused by COVID-19 pandemic, we're no longer able to update our current growth guidance. But we're hopeful that 2021 will have some more recoveries and we love to see more C&I growth in the future in our loan portfolio. And we continue to do fairly well with some CRE loan growth with our existing customer and existing relationships.

Analyst
Michael Young

Okay. I guess, just overall, maybe -- I know it's kind of point in time, maybe not a view for 2021, but are you seeing kind of a return of demand from customers? Are you seeing any pipeline building in the construction area? Anything else like that would be helpful, if you have any color there.

Executive
Chang M. Liu

Yeah. As far as the construction side of the portfolio, we actually saw a slight decrease in the commitment. The increase in the construction outstanding balance is a result of the actual drawdowns from previously-approved commitments. So that's where we saw some of that increase in those numbers.

Executive
Heng W. Chen

Yeah. [Indecipherable] Michael, we have been adding a number of new team lenders. Chang, do you want to...?

Executive
Chang M. Liu

Yeah. We added a team -- commercial banking team in the San Fernando Valley area through an external hire and put a team -- small team together and we're looking -- and they've got a pretty decent pipeline. So we're looking for that pipeline to get to some closings both by fourth quarter and well into 2021.

Analyst
Michael Young

Okay. I'll step back. Thanks.

Executive
Heng W. Chen

Thank you.

Operator
Operator

Our next question comes from Chris McGratty of KBW. Your line is open.

Analyst
Christopher McGratty

Great, thanks for the question.