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Note 10 - Capital Resources | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Stockholders' Equity Note Disclosure [Text Block] |
10. | Capital Resources
Total equity was $2.12 billion at December 31, 2018, an increase of $148.6 million, or 7.5%, from $1.97 billion at December 31, 2017, primarily due to increases in net income of $271.9 million, proceeds from dividend reinvestment of $2.8 million, and proceeds from exercise of stock options of $838,000, offset by purchases of treasury stock of $42.6 million, shares withheld related to net share settlement of RSUs of $2.4 million, and common stock cash dividends of $83.4 million. The Company paid cash dividends of $1.03 per common share in 2018 and $0.87 per common share in 2017. In January and February of 2016, the Company repurchased the remaining 633,250 shares under the August 2015 two million share repurchase program for $17.0 million, or an average price of $26.82 per share. On February 1, 2016, the Board of Directors approved a new stock repurchase program to buy back up to $45.0 million of our common stock. In 2016, the Company repurchased 1,380,578 shares for $37.5 million, or $27.13 per share under the February 2016 repurchase program. In October 2018, the Company repurchased 200,326 shares for $7.5 million, or $37.65 per share, and completed its February 2016 $45.0 million repurchase program. On October 26, 2018, the Board of Directors approved a new stock repurchase program to buy back up to $45.0 million of our common stock. In 2018, the Company repurchased 913,400 shares for $35.1 million, or $38.43 per share, under the October 2018 repurchase program. As of December 31, 2018, the Company may repurchase up to $9.9 million of its common stock under the October 2018 repurchase program. The five special purpose trusts are considered variable interest entities. Because the Bancorp is not the primary beneficiary of the trusts, the financial statements of the trusts are not included in the Consolidated Financial Statements of the Company. The Junior Subordinated Notes, all of which were issued before May 19, 2010, are currently included in the Tier 2 capital of the Bancorp for regulatory capital purposes. Under the Dodd-Frank Act, trust preferred securities issued before May 19, 2010 by bank holding companies with assets of less than $15 billion as of December 31, 2019 continue to qualify for Tier 1 capital treatment. As of December 31, 2017, the Company’s assets exceeded the $15 billion threshold and, as a result, the Junior Subordinated Notes no longer qualify as Tier 1 capital for regulatory reporting purposes. The Junior Subordinated Notes qualify as Tier 1 capital for regulatory reporting purposes at December 31, 2016. The table below summarizes the outstanding Junior Subordinated Notes issued by the Company to each trust as of December 31, 2018:
|  |  |  | Principal |  | Not |  |  |  |  |  | Current |  |  | Date of |  | Payable/ |
|  | Issuance |  | Balance of |  | Redeemable |  | Stated |  | Annualized |  | Interest |  |  | Rate |  | Distribution |
Trust Name |  | Date |  | Notes |  | Until |  | Maturity |  | Coupon Rate |  | Rate |  |  | Change |  | Date |
(Dollars in thousands) |
Cathay Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust I |  | June 26, |  | $ | 20,619 |  | June 30, |  | June 30, |  | 3-month |  |  | 5.95 | % |  | December 30, |  | March 30 |
|  | 2003 |  |  |  |  | 2008 |  | 2033 |  | LIBOR |  |  |  |  |  | 2018 |  | June 30 |
|  |  |  |  |  |  |  |  |  |  | + 3.15% |  |  |  |  |  |  |  | September 30 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 30 |
Cathay Statutory |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust I |  | September 17, |  |  | 20,619 |  | September 17, |  | September 17, |  | 3-month |  |  | 5.79 | % |  | December 18, |  | March 17 |
|  | 2003 |  |  |  |  | 2008 |  | 2033 |  | LIBOR |  |  |  |  |  | 2018 |  | June 17 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | + 3.00% December 17 |
Cathay Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust II |  | December 30, |  |  | 12,887 |  | March 30, |  | March 30, |  | 3-month |  |  | 5.70 | % |  | December 30, |  | March 30 |
|  | 2003 |  |  |  |  | 2009 |  | 2034 |  | LIBOR |  |  |  |  |  | 2018 |  | June 30 |
|  |  |  |  |  |  |  |  |  |  | + 2.90% |  |  |  |  |  |  |  | September 30 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 30 |
Cathay Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust III |  | March 28, |  |  | 46,392 |  | June 15, |  | June 15, |  | 3-month |  |  | 4.27 | % |  | December 15, |  | March 15 |
|  | 2007 |  |  |  |  | 2012 |  | 2037 |  | LIBOR |  |  |  |  |  | 2018 |  | June 15 |
|  |  |  |  |  |  |  |  |  |  | + 1.48% |  |  |  |  |  |  |  | September 15 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 15 |
Cathay Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trust IV |  | May 31, |  |  | 18,619 |  | September 6, |  | September 6, |  | 3-month |  |  | 4.14 | % |  | December 6, |  | March 6 |
|  | 2007 |  |  |  |  | 2012 |  | 2037 |  | LIBOR |  |  |  |  |  | 2018 |  | June 6 |
|  |  |  |  |  |  |  |  |  |  | + 1.4% |  |  |  |  |  |  |  | September 6 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 6 |
Total Junior Subordinated Notes |  | $ | 119,136 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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