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Note 22 - Regulatory Matters | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Regulatory Capital Requirements under Banking Regulations [Text Block] |
22. | Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The Federal Deposit Insurance Corporation has established five capital ratio categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” A well-capitalized institution must have a common equity tier 1 capital ratio equal to or greater than 6.5%, a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%. At December 31, 2018 and 2017, the Bank qualified as well capitalized under the regulatory framework for prompt corrective action. The Bancorp’s and the Bank’s capital and leverage ratios as of December 31, 2018, and December 31, 2017, are presented in the tables below:
|  | Cathay General Bancorp |  |  | Cathay Bank |
|  | December 31, 2018 |  |  | December 31, 2017 |  |  | December 31, 2018 |  |  | December 31, 2017 |
(Dollars in thousands) |  | Balance |  |  | % |  |  | Balance |  |  | % |  |  | Balance |  |  | % |  |  | Balance |  |  | % |
Common equity Tier 1 capital ( to risk-weighted assets) |  | $ | 1,736,854 |  |  |  | 12.43 |  |  | $ | 1,572,025 |  |  |  | 12.19 |  |  | $ | 1,904,820 |  |  |  | 13.66 |  |  | $ | 1,734,719 |  |  |  | 13.46 |
Common equity Tier 1 capital minimum requirement |  |  | 628,393 |  |  |  | 4.50 |  |  |  | 580,552 |  |  |  | 4.50 |  |  |  | 627,800 |  |  |  | 4.50 |  |  |  | 579,921 |  |  |  | 4.50 |
Excess |  | $ | 1,108,461 |  |  |  | 7.93 |  |  | $ | 991,473 |  |  |  | 7.69 |  |  | $ | 1,277,020 |  |  |  | 9.16 |  |  | $ | 1,154,798 |  |  |  | 8.96 |
Tier 1 capital (to risk-weighted assets) |  | $ | 1,736,854 |  |  |  | 12.43 |  |  | $ | 1,572,025 |  |  |  | 12.19 |  |  | $ | 1,904,820 |  |  |  | 13.66 |  |  | $ | 1,734,719 |  |  |  | 13.46 |
Tier 1 capital minimum requirement |  |  | 838,258 |  |  |  | 6.00 |  |  |  | 774,070 |  |  |  | 6.00 |  |  |  | 837,067 |  |  |  | 6.00 |  |  |  | 773,229 |  |  |  | 6.00 |
Excess |  | $ | 898,596 |  |  |  | 6.43 |  |  | $ | 797,955 |  |  |  | 6.19 |  |  | $ | 1,067,753 |  |  |  | 7.66 |  |  | $ | 961,490 |  |  |  | 7.46 |
Total capital (to risk-weighted assets) |  | $ | 1,976,995 |  |  |  | 14.15 |  |  | $ | 1,820,860 |  |  |  | 14.11 |  |  | $ | 2,029,462 |  |  |  | 14.55 |  |  | $ | 1,862,806 |  |  |  | 14.45 |
Total capital minimum requirement |  |  | 1,117,677 |  |  |  | 8.00 |  |  |  | 1,032,093 |  |  |  | 8.00 |  |  |  | 1,116,089 |  |  |  | 8.00 |  |  |  | 1,030,971 |  |  |  | 8.00 |
Excess |  | $ | 859,318 |  |  |  | 6.15 |  |  | $ | 788,767 |  |  |  | 6.11 |  |  | $ | 913,373 |  |  |  | 6.55 |  |  | $ | 831,835 |  |  |  | 6.45 |
Tier 1 capital (to average assets) – Leverage ratio |  | $ | 1,736,854 |  |  |  | 10.83 |  |  | $ | 1,572,025 |  |  |  | 10.35 |  |  | $ | 1,904,820 |  |  |  | 11.89 |  |  | $ | 1,734,719 |  |  |  | 11.82 |
Minimum leverage requirement |  |  | 641,755 |  |  |  | 4.00 |  |  |  | 607,349 |  |  |  | 4.00 |  |  |  | 640,807 |  |  |  | 4.00 |  |  |  | 586,959 |  |  |  | 4.00 |
Excess |  | $ | 1,095,099 |  |  |  | 6.83 |  |  | $ | 964,676 |  |  |  | 6.35 |  |  | $ | 1,264,013 |  |  |  | 7.89 |  |  | $ | 1,147,760 |  |  |  | 7.82 |
Risk-weighted assets |  | $ | 13,969,004 |  |  |  |  |  |  | $ | 12,901,161 |  |  |  |  |  |  | $ | 13,949,605 |  |  |  |  |  |  | $ | 12,887,142 |  |  |  |  |
Total average assets (1) |  | $ | 16,042,924 |  |  |  |  |  |  | $ | 15,183,720 |  |  |  |  |  |  | $ | 16,019,658 |  |  |  |  |  |  | $ | 14,673,981 |  |  |  |  |
( 1 ) | The quarterly total average assets reflect all debt securities at amortized cost, equity security with readily determinable fair values at the lower of cost or fair value, and equity securities without readily determinable fair values at historical cost.

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- Definition The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958572-112826 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958573-112826 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958570-112826 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958569-112826 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958577-112826 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958575-112826 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958574-112826 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958568-112826 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=84167132&loc=d3e65071-112826 + Details
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