Dunson K. Cheng, Chairman, President and CEO
Thank you, Monica, and good afternoon. Welcome to our 2014 fourth quarter earnings conference call. This morning before the market opened, we announced the merger of Asia Bancshares of New York into our company. Asia Bank as a subsidiary of Bancshare was founded in 1984 in Flushing, New York. Its mission, same as Cathay, was and is to serve the Asian emigrant community of New York. We also share the same philosophy in running our banks. In 30 years, Asia Bank has assembled a loyal customer base and has established a solid reputation. As of September 2014, it’s total assets of $498 million, total loans of $490 million, and total deposits of $450 million. It has three branches in New York City, and one in Rockville, Maryland, which is 18 miles north of Washington D.C. The Asian population around Washington D.C. has grown 60% since year 2000.
Our experience with New York region has been largely positive. In 15 years, we have put together nine branches in New York City with a deposit base of $0.92 billion and a loan book of $1.84 billion. During the 2008 recession, New York’s loan portfolio has performed better with must lower losses than the rest of our loan portfolio. In 2014, New York was our fastest growing region for long with a year-over-year growth of 23%. This merger will bring the number of branches in New York City to 12 with the deposit base of $1.34 billion and total loans of $2.26 billion. It will also open up a new marketplace for Cathay Bank in Maryland and Washington D.C., and increase the number of states that Cathay has operations in to nine. Equally important, this merger will bring a group of experienced and dedicated officers and staff to Cathay. We are especially pleased that Asia Bank Chairman, President, and Deputy President will join our advisory board to facilitate the integration of the two banks and solidify customer retention. We expect this merger to be completed during the second quarter of 2015 after receiving regulatory and Asia Bancshares shareholders approvals. We believe this merger will strengthen our business in New York. Our CFO, Mr. Heng Chen will speak to the financials of this merger later on.
Returning to our first quarter results, we report net income of $35.6 million, an 11.5% increase when compared to net income available to common shareholders of $31.9 million for the fourth quarter of 2013. Diluted earnings per share increased 10% to $0.44 per share for the fourth quarter of 2014 compared to $0.40 per share of the same quarter a year ago. Our net loan growth slowed during the fourth quarter to $56 million or 0.06% of quarter-over-quarter. CRE loans grew by $72 million, while residential mortgages increased by 53 million. The pace of new loans book continue to be good while we experienced an unusually large loan payoffs and pay down of over $300 million in the quarter. For the twelve months ended December 31, 2014, our loans increased $830 million or 10.3% compared to an increase of $650 million or 8.8% of twelve months ended December 31, 2013. The main drivers of our annual increases came from CRE loans, which increased $453 million in residential mortgages, which grew by $250 million, while C&I loans grew by $84 million, and construction loans by $77 million. We expect that our loan growth in 2015 excluding the acquisition of Asia Bank will be over 10%.
The fourth quarter 2014, our total deposits increased by $89 million to $8.78 billion. For the twelve months ended December 31, 2014, the increase in deposits was $802 million which represent a 10.1 increase from December 31, 2013. Our core deposits increased by $14.5 million or $656 million from December 2013. In the fourth quarter, our efficiency ratio was 22.96%, an improvement of 42.96% and improvement over the third quarter of 44.51%, and an improvement over the fourth quarter of 2013 of 44.65%. With that, I will turn the floor over to our Executive Vice President and CFO, Heng Chen to discuss the fourth quarter financials in more details.
