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

Oct 26, 2020 • 06:00 pm ET

Previous

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

Share
Close

Loading Event

Loading Transcript

Presentation
Executive
Chang M. Liu

origination of new loans, and construction loans increased by $50.9 million or 8.2% as a result of construction drawdowns.

During the third quarter, we again conducted credit reviews of our borrowers in industries particularly impacted by the economic impact of the pandemic. We are encouraged because 68.6% of our commercial real estate in single-family mortgages that were on payment deferral have returned to full schedule payment status as of September 30, 2020. Also many of our borrowers are reporting improved cash flows and many of our hotel borrowers are reporting higher occupancy levels during the third quarter. We are also encouraged by the low loan-to-value for these reviewed loans and of the outside liquidity that is held by the guarantors of these loans, which we expect could be used to support these loans.

As of September 30, 2020, our COVID-19 loan modifications were as follows. 48 C&I loans with an aggregate balance of $45.3 million as of September 30, 2020, or approximately 1.8% of our commercial loan portfolio, are still modified to provide relief on payment -- on repayment terms.

Turning to Slide 7 of our earnings presentation. As of September 30, 2020, 95 CRE loans with an aggregate balance of $428 million, or approximately 5.7% of our CRE loan portfolio, are still on loan modifications to provide relief on repayment terms. The average loan-to-value ratio at origination for these loans was 52%. On October 20, 2020, the balance of CRE loans still under loan modifications have further decrease to only $146 million, or approximately 2% of our CRE loan portfolio. We will provide some specifics about Cathay's hotel and retail loan portfolios of the two segments more impacted by the downturn. As of September 30, 2020, Cathay had 64 hotel loans that totaled $351.6 million, including $49.2 million of SBA loans. As of September 30, 2020, the remaining loans with loan mods were at $129 million or 37% of the total hotel portfolio. Among the 64 hotel loans, 59 are limited service and five are full service, three in Southern California and two in Texas.

Turning to Slide 8. We note that we reviewed 81% of the loans in our retail loan portfolio, which comprises 19% of our total commercial real estate loan portfolio and 9% of our total loan portfolio as of September 30, 2020. The majority, 62% of the $1.42 billion in retail loans reviewed is secured by neighborhood, community -- neighborhood, community or strip centers, and only 12% is secured by regional malls, power, or lifestyle or factory outlet properties. Among the $161 million of CRE retail loans still under loan modifications as of September 30, 2020, approximately 38% are paying interest-only.

Turning to Slide 9. As of September 30, 2020, 367 payment deferment requests with an aggregate balance of $180.6 million or approximately 4.3% of our residential mortgage loan portfolio remain on payment deferral status. As of October 20, 2020, the balance of our residential mortgage loans still under loan modifications had decreased to $139