9. Cathay General Bancorp
Shares of Cathay General Bancorp (CATY) of El Monte, Calif., closed at $10.21 Wednesday, for a one-week decline of 26% and a year-to-date decline of 39%.
The shares traded for 0.9 times tangible book value as of Wednesday's market close, according to SNL Financial.The company operates branches in California and New York, as well as other states. It also has a branch in Hong Kong and representative offices in Taiwan and China. Cathay General owes $258 million in federal bailout funds received through the Troubled Assets Relief Program, or TARP, and is operating under a December 2009 memorandum of understanding, or MOU, with the Federal Reserve not to pay dividends or make other capital distributions. The company raised a net $124.9 in common equity through a public offering in February 2010, and seemed reasonably well-positioned to repay TARP, with a second-quarter profit attributable to common shareholders of $20.2 million, or 26 cents a share, and a Tier 1 leverage ratio of 12.19%, according to SNL. Following the bank's second-quarter earnings release, Sterne Agee analyst Brett Rabatin on July 21 reiterated his neutral rating for Cathay General, saying the second-quarter results were "good, but not enough to drive consensus expectations or the valuation appreciably higher in the near-term." Then again, the shares closed at $15.78 on the date Rabatin's report was published, pulling back 35% since then. Rabatin also said that he believes the "MOU and TARP repayment will be addressed next year." The shares trade just below eight times the consensus 2012 EPS estimate of $1.42 a share, among analysts polled by FactSet. Out of 13 analysts covering Cathay General Bancorp, three rate the shares a buy, while the remaining analysts all have neutral ratings.
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