Cathay General Bancorp (CATY) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Cathay General Bancorp. Our host for today's call is Dunson Cheng, Executive Chairman of the Board. [Operator Instructions] I would now like to turn the call over to your host. Mr. Cheng, you may begin.

Thank you. Good afternoon, and welcome to the 2020 Annual Meeting of Shareholders of Cathay General Bancorp. I am Dunson Cheng, Executive Chairman of the Board of the company and who'll preside at this meeting today. It is now shortly after 5 p.m. Pacific Time on May 18, and this meeting is officially called to order. Our Corporate Secretary, Ms. [ May Chen ] will act as secretary of the meeting. We are also being assisted today by a representative of the American Elections Services, Ms. [ Crystal Pauline ], who will serve as a proxy tabulation agent and inspector of elections. Now before proceeding to the business of the meeting today, allow me to introduce the directors and officers of the company who are present today. Mr. Peter Wu, Vice Chairman of the Board; Mr. Anthony Tang, Vice Chairman of the Board; Mr. Michael Chang, Director; Mr. Kelly Chan, Director and Chairman of the Audit Committee; Ms. Jane Jelenko, a Director and Chairperson of the Risk Committee, Mr. Ting Y. Liu, the Director and Chairman of the Compensation Committee who will retire after today; Mr. Joseph Poon, a Director and Chairman of the Investment Committee and the Nomination and Governance Committee; Mr. Pin Tai, a Director and also CEO of the company. Directors and this year's nominees are: Mr. Nelson Chung, Lead Director, a director nominee; Mr. Felix S. Fernandez, director nominee; Mr. Richard Sun, director nominee and; nominee, Ms. Maan-Huei Hung, who is not currently a director, but is a director nominee. Officers present today are: Mr. Heng Chen, EVP and Chief Financial Officer; Mr. Chang Liu, President and Chief Operating Officer of the bank; Mr. Irwin Wong, Senior Executive Officer and Chief Administrative Officer of the bank; Mr. Kim Bingham, Executive Vice President and Chief Risk Officer of the bank; Mr. Mark Lee, Executive Vice President and Chief Credit Officer. We are also joined here today by KPMG; our independent director, Mr. Steven Crowley and Mr. Brian Gordon. We also have Mr. Ben Chung of Morrison & Foerster, the company's SEC counsel. Before we go further, I want to remind everyone that we may make forward-looking statements during this meeting. Actual results can differ materially, and you should refer to our filings with the SEC for factors that could cause such results to differ. The Secretary of the meeting will now report on the mailing of notice of this meeting and the presence of a quorum.

Thank you, Mr. Chairman. This meeting is held pursuant to a notice mailed on April 16, 2020, to each stockholder of record as of April 1, 2020. A list of stockholders entitled to vote at this meeting is available for examination. It has also been on file at the office of the company for the last 10 days and available for examination by any stockholder during ordinary business hours. I've been advised by the inspector of elections that immediately prior to the commencement of the meeting, 84.47% of the company's issued and outstanding shares of common stock represented in person or by proxy at today's meeting. Since the majority of the company's outstanding shares of common stock is represented today in person or by proxy, a quorum is present. The meeting is duly constituted and the business of the meeting may proceed.

Thank you, [ May ]. I now declare there is a quorum for the transaction of business and ask the secretary to include the notice of the meeting and the affidavit of mailing of the notice in the minute book of the company. Now I will present the proposals to be voted upon. If any stockholder would like to make a comment or ask a question regarding any of the proposals to be voted upon, please submit your comment or question through the web portal. Proposal #1 is the election of 4 Class III directors to serve until the 2023 Annual Meeting of Stockholders and their successors have been elected and qualified. Ms. Secretary, please place before the meeting of the Board of Directors nominee for directors of the company.

Thank you, Mr. Chairman. The Board nominees for Class III directors are: Mr. Nelson Chung; Mr. Felix S. Fernandez; Ms. Maan-Huei Hung; and Mr. Richard Sun.

Thank you. The Board of Directors unanimously recommend that you vote for each nominee. Proposal #2 is to vote on an advisory but nonbinding resolution to approve our executive compensation disclosed in the proxy statement. The Board of Directors unanimously recommend that you vote for this proposal. Proposal #3 is to vote on an advisory but nonbinding proposal on the frequency of holding future advisory votes on executive compensation. The Board of Directors unanimously recommends that you vote for every year on this proposal. Proposal #4 is to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 2020 fiscal year. The Board of Directors unanimously recommend that you vote for this proposal. If there are any remaining questions or comments regarding any of the proposals, please submit them now if you have not done so already. We see that there are no questions or comments. We will now proceed to voting. It is 5:10 Pacific Time on May 18, 2020, and the polls are now open. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have already mailed in their proxy or voted via telephone or Internet and do not want to change their vote do not need to take any further action. [Voting]

Now that everyone has had an opportunity to vote, I now declare the polls closed at 5:11 Pacific Time on May 18, '20. We have received a report of the preliminary voting results. Ms. Secretary, please report on the voting results.

Thank you, Mr. Chairman. Proposal 1, election of directors. On the election of directors, I've been advised by the inspector of elections that Nelson Chung, Felix S. Fernandez, Maan-Huei Hung and Richard Sun have each received a majority of the votes cast at this meeting. Accordingly, they have been elected as Class III Directors to serve until the 2023 Annual Meeting of Stockholders and their successors have been elected and qualified. Proposal 2, executive compensation, the advisory nonbinding resolution to approve our executive compensation disclosed in the proxy statement. It has received an affirmative vote of the holders of a majority of the shares of Bancorp's common stock present in person or represented by proxy and entitled to vote at the meeting. Accordingly, the advisory nonbinding resolution on our executive compensation has been approved. Proposal 3, frequency of future advisory votes on executive compensation. With respect to the advisory nonbinding proposal on the frequency of future advisory votes on executive compensation, we have received an affirmative vote of the holders of a majority of the shares of Bancorp's common stock present in person or represented by proxy and entitled to vote at the meeting for the frequency to be every year. Proposal 4, KPMG ratification. And finally, with respect to the ratifying of the appointment of KPMG, it has received an affirmative vote of the holders of a majority of the shares of Bancorp's common stock present in person or represented by proxy and entitled to vote at the meeting. Accordingly, the appointment of KPMG as our independent registered public accounting firm for the 2020 fiscal year has been ratified. The inspector of elections will furnish me with a written report of the final vote count with respect to the matters voted on today, which will be included in the minutes of the meeting.

Thank you. Ms. Secretary. There being no further business to come before the meeting, the formal part of the stockholders' meeting is now adjourned. As you have heard on the result of the shareholders' votes, we have a new Board Member. I want to welcome Ms. Maan-Huei Hung to our Board, and we look forward to working with Ms. Hung in the years to come. On the other hand, we are set to see that our long-serving Director, Mr. Ting Liu, has chosen to not to stay for another term on the Board. Mr. Liu has tirelessly served our company for 39 years. On behalf of the Board, I wish to thank Mr. Liu for his service, leadership and dedication and wish him good health and all the best in his retirement. I will now turn the floor over to our CEO, Mr. Pin Tai, to end this meeting with some brief closing remarks.

Thank you, Mr. Chairman. Good afternoon, ladies and gentlemen. While we are pleased to report that Cathay General Bancorp achieved record net income of $279.1 million for the year ended December 31, 2019, as well as record earnings per share of $3.48 in 2019, the unprecedented nature of the COVID-19 environment that we are operating in today requires us to prioritize our focus on the significant and ongoing actions we are taking for our customers, our employees and our communities. Through this unprecedented global and national health emergency, our offices have remained open. We have implemented a set of health and safety measures that allow us to maintain our ability to provide exceptional banking services to our customers. In our effort to support customers affected by the pandemic, we have participated in the SBA's Paycheck Protection Program and have deployed a range of alternative repayment and payment deferment options to our customers. While the duration of the corona pandemic remains unknown, we believe we have the financial strength to continue to serve our valued customer throughout this difficult period. We will continue to put our people and customers first while also seeking to effectively manage credit quality, improve operational efficiency and maximize stockholder value. Thank you very much for attending this year's Annual Stockholders' Meeting.

This now concludes the meeting. Thank you for joining and have a pleasant day.