Regional banking concern Cathay General Bancorp (NASDAQ:CATY) repaid the U.S. Treasury $129 million, plus accrued and unpaid dividends, related to its redemption of 50% of its outstanding Series B preferred stock that was issued through the Treasury's TARP Capital Purchase Program.
Since receiving the TARP money, Cathay has paid the Treasury Dept. approximately $54.7 million in dividends on its Series B preferred stock through Feb. 15. By redeeming half of the preferred stock, Cathay no longer needs to pay quarterly dividends to the Treasury of approximately $1.6 million.
Cathay's chairman, president, and CEO Dunson K. Cheng said, "We believe that regulatory approval to repay one-half of our TARP obligation demonstrates the financial strength of our banking franchise. We are also pleased that we had the retained earnings and liquidity to be able to repay this portion of our TARP obligation."
As of Dec. 31, 2012, Cathay exceeded all regulatory capital requirements to be classified as a "well-capitalized" institution for regulatory purposes.