LOS ANGELES, Oct. 25, 2017 /PRNewswire/ -- Cathay General Bancorp (the "Company", NASDAQ: CATY), the holding company for Cathay Bank, today announced net income of $49.7 million, or $0.61 per share, for the third quarter of 2017.

FINANCIAL PERFORMANCE



                              Three months ended
                              ------------------

                      September 30, 2017                June 30, 2017             September 30, 2016
                      ------------------                -------------             ------------------

    Net income                            $49.7 million            $51.4 million                     $46.1 million

    Basic earnings
     per common share                             $0.62                     $0.64                              $0.58

    Diluted earnings
     per common share                             $0.61                     $0.64                              $0.58

    Return on average
     assets                                       1.29%                    1.48%                             1.38%

    Return on average
     total
     stockholders'
     equity                                       9.77%                   10.96%                            10.30%

    Efficiency ratio                             41.91%                   45.88%                            45.05%

THIRD QUARTER HIGHLIGHTS


    --  Completed the acquisition of SinoPac Bancorp, the holding company for
        Far East National Bank, ("FENB") on July 14, 2017.
    --  Total loans during the third quarter increased by $1.0 billion to $12.6
        billion.
    --  Net interest margin increased to 3.75% in the third quarter compared to
        3.63% in the second quarter of 2017.

"We enjoyed strong growth during the third quarter of 2017. Excluding the loans and deposits from Far East National Bank, our loan growth was $331.5 million, or 11.8% annualized, and our deposit growth was $380.8 million, or 13.0% annualized, for the third quarter of 2017," commented Pin Tai, Chief Executive Officer and President of the Company.

"We recently received final regulatory approval to merge Far East National Bank into Cathay Bank, which will permit additional integration of our operations," added Dunson Cheng, Executive Chairman of the Board of the Company.

THIRD QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended September 30, 2017, was $49.7 million, an increase of $3.6 million, or 7.8%, compared to net income of $46.1 million for the same quarter a year ago. Diluted earnings per share for the quarter ended September 30, 2017, was $0.61 compared to $0.58 for the same quarter a year ago.

Return on average stockholders' equity was 9.77% and return on average assets was 1.29% for the quarter ended September 30, 2017, compared to a return on average stockholders' equity of 10.30% and a return on average assets of 1.38% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $29.4 million, or 28.3%, to $133.2 million during the third quarter of 2017 compared to $103.8 million during the same quarter a year ago. The increase was due primarily to an increase in interest income from loans from organic growth and from the acquisition of FENB and a decrease in interest expense from securities sold under agreements to repurchase.

The net interest margin was 3.75% for the third quarter of 2017 compared to 3.36% for the third quarter of 2016 and 3.63% for the second quarter of 2017. The increase from the second quarter of 2017 was primarily the result of interest recoveries and prepayment penalties of $5.6 million, including $4.5 million from the payoff of a loan that had been on nonaccrual status in prior years.

For the third quarter of 2017, the yield on average interest-earning assets was 4.34%, the cost of funds on average interest-bearing liabilities was 0.81%, and the cost of interest-bearing deposits was 0.68%. In comparison, for the third quarter of 2016, the yield on average interest-earning assets was 4.02%, the cost of funds on average interest-bearing liabilities was 0.89%, and the cost of average interest-bearing deposits was 0.70%. The increase in the yield on average interest earning assets was a result of higher interest rates and increases in interest income collected from nonaccrual loans and loan prepayment penalties. The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 3.53% for the quarter ended September 30, 2017, compared to 3.13% for the same quarter a year ago.

Provision/(reversal) for credit losses

There was no provision for credit losses recorded for the third quarter of 2017 or 2016. The provision/(reversal) for credit losses was based on a review of the appropriateness of the allowance for loan losses at September 30, 2017. The following table summarizes the charge-offs and recoveries for the periods indicated:



                                        Three months ended                                       Nine months ended September 30,
                                        ------------------                                       -------------------------------

                                 September 30, 2017                        June 30, 2017                                         September 30, 2016             2017      2016
                                 ------------------                        -------------                                         ------------------             ----      ----

                                                            (In thousands)

    Charge-offs:

      Commercial loans                                         $80                          $526                                                      $3,278     $1,810   $12,035

      Real estate loans (1)                                    305                             -                                                      4,626        860     5,830
                                                                                                                                                                 ---     -----

         Total charge-offs                                     385                           526                                                       7,904      2,670    17,865
                                                               ---                           ---                                                       -----      -----    ------

    Recoveries:

      Commercial loans                                         575                           335                                                       2,006      1,401     3,720

      Construction loans                                        47                            47                                                         548        143     7,871

      Real estate loans(1)                                   5,489                           410                                                         343      6,195       903
                                                             -----                           ---                                                         ---      -----       ---

         Total recoveries                                    6,111                           792                                                       2,897      7,739    12,494

    Net (recoveries)/charge-offs                          $(5,726)                       $(266)                                                     $5,007   $(5,069)   $5,371
                                                           =======                         =====                                                      ======    =======    ======



    (1)              Real estate loans include
                     commercial mortgage loans,
                     residential mortgage loans,
                     and equity lines.

Non-interest income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wire transfer fees, and other sources of fee income, was $13.0 million for the third quarter of 2017, an increase of $4.2 million, or 47.7%, compared to $8.8 million for the third quarter of 2016, primarily due to the gain of $5.4 million on the acquisition of SinoPac Bancorp that was offset by a decrease in securities gains of $1.7 million from the quarter a year ago.

Non-interest expense

Non-interest expense increased $10.5 million, or 20.7%, to $61.2 million in the third quarter of 2017 compared to $50.7 million in the same quarter a year ago. The increase in non-interest expense in the third quarter of 2017 was primarily due to a $5.0 million increase in salary and employee benefit expenses and a $3.3 million increase in acquisition related expense when compared to the same quarter a year ago. Acquisition related expenses during the third quarter totaled approximately, $3.3 million, including $2.8 million in legal and investment banking fees and $0.5 million in severance and retention expenses. The efficiency ratio was 41.9% in the third quarter of 2017 compared to 45.1% for the same quarter a year ago.

Income taxes

The effective tax rate for the third quarter of 2017 was 41.4% compared to 25.5% for the third quarter of 2016. The third quarter 2017 effective tax rate of 41.4% reflected additional tax expense to increase the full year effective tax rate to 34% compared to the 29% effective tax rate forecasted at June 30, 2017. This adjustment in the third quarter was the result of lower tax credits from the slow deployment of alternative energy investments. Income tax expense for the first quarter of 2017 was also reduced by $2.6 million in benefits from the distribution of restricted stock units and exercises of stock options.

ACQUISITION OF SINOPAC BANCORP

Under the terms of the Stock Purchase Agreement with Bank SinoPac Co. Ltd, the Company purchased all of the issued and outstanding share capital of SinoPac Bancorp for an aggregate purchase price of $351.6 million plus additional post closing payments based on the realization of certain assets of FENB. We issued 926,192 shares of common stock as consideration and the remainder of the consideration is payable in cash. Pursuant to the Stock Purchase Agreement, $100 million of the purchase price will be released 30 days after receipt of regulatory approval for the merger of FENB into Cathay Bank and $35.1 million will be released over a period of three years. SinoPac Bancorp was merged into Cathay General Bancorp on July 17, 2017 with FENB scheduled to merge into Cathay Bank with the surviving bank being Cathay Bank. At the date of acquisition, the total value of assets purchased was $1.2 billion including total gross loans of $703.8 million, investments of $114.3 million, and core deposit intangibles of $7.1 million. The total value of deposits purchased was $813.9 million. The acquisition resulted in a gain of $5.4 million. The purchase accounting adjustments are preliminary and subject to finalization during the one-year measurement period from the date of the acquisition.

BALANCE SHEET REVIEW

Gross loans, excluding loans held for sale, were $12.6 billion at September 30, 2017, an increase of $1.4 billion, or 12.5%, from $11.2 billion at December 31, 2016. The increase was primarily due to increases of $591.8 million, or 10.2%, in commercial mortgage loans, $478.5 million, or 19.6%, in residential mortgage loans, $171.7 million, or 7.6%, in commercial loans, and $143.4 million, or 26.2%, in real estate construction loans. The total loan growth during the third quarter compared to the second quarter 2017 was $1.03 billion, of which $331.5 million was organic loan growth and $694.7 million from loans acquired from FENB. The loan balances and composition at September 30, 2017, compared to December 31, 2016, and to September 30, 2016, are presented below:



                     September 30, 2017                December 31, 2016             September 30, 2016
                     ------------------                -----------------             ------------------

                              (In thousands)

    Commercial loans                        $2,419,891                    $2,248,187                     $2,248,996

    Residential
     mortgage loans                          2,922,537                     2,444,048                      2,329,402

    Commercial
     mortgage loans                          6,377,047                     5,785,248                      5,743,991

    Equity lines                               181,751                       171,711                        170,022

    Real estate
     construction
     loans                                     691,486                       548,088                        515,236

    Installment &
     other loans                                 4,722                         3,993                          2,810


    Gross loans                            $12,597,434                   $11,201,275                    $11,010,457


    Allowance for
     loan losses                             (121,535)                    (118,966)                     (117,942)

    Unamortized
     deferred loan
     fees                                      (3,424)                      (4,994)                       (5,519)
                                                ------                        ------                         ------


    Total loans, net                       $12,472,475                   $11,077,315                    $10,886,996
                                           -----------                   -----------                    -----------

    Loans held for
     sale               $                            -                       $7,500                         $4,750
                        ------------------------------                       ------                         ------

Total deposits were $12.6 billion at September 30, 2017, an increase of $887 million, or 7.6%, from $11.7 billion at December 31, 2016. The total deposit growth in the third quarter compared to the second quarter 2017 was $1.1 billion, of which $380.8 million was organic deposit growth and $717.5 million from deposits acquired from FENB. The deposit balances and composition at September 30, 2017, compared to December 31, 2016, and to September 30, 2016, are presented below:



               September 30, 2017                December 31, 2016             September 30, 2016
               ------------------                -----------------             ------------------

                       (In thousands)

    Non-
     interest-
     bearing
     demand
     deposits                         $2,730,006                    $2,478,107                     $2,246,661

    NOW
     deposits                          1,379,100                     1,230,445                      1,073,436

    Money
     market
     deposits                          2,370,724                     2,198,938                      2,131,190

    Savings
     deposits                            925,312                       719,949                        633,345

    Time
     deposits                          5,156,553                     5,047,287                      4,854,064
                                       ---------                     ---------                      ---------

    Total
     deposits                        $12,561,695                   $11,674,726                    $10,938,696
                                     ===========                   ===========                    ===========

ASSET QUALITY REVIEW

At September 30, 2017, total non-accrual loans were $65.4 million, an increase of $15.7 million, or 31.6%, from $49.7 million at December 31, 2016, and an increase of $21.0 million, or 47.3%, from $44.4 million at September 30, 2016. The increase in total non-accrual loans resulted primarily from several construction and commercial real estate loans placed on nonaccrual status.

The allowance for loan losses was $121.5 million and the allowance for off-balance sheet unfunded credit commitments was $4.3 million at September 30, 2017, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded commitments. The $121.5 million allowance for loan losses at September 30, 2017, increased $2.5 million, or 2.1%, from $119.0 million at December 31, 2016. The allowance for loan losses represented 0.96% of period-end gross loans, excluding loans held for sale, and 175.5% of non-performing loans at September 30, 2017. The comparable ratios were 1.06% of period-end gross loans, excluding loans held for sale, and 239.5% of non-performing loans at December 31, 2016. The changes in non-performing assets and troubled debt restructurings at September 30, 2017, compared to December 31, 2016, and to September 30, 2016, are highlighted below:



    (Dollars in thousands)                                               September 30, 2017             December 31, 2016             % Change        September 30, 2016             % Change
    ---------------------                                                ------------------             -----------------             --------        ------------------             --------

    Non-performing assets

    Accruing loans past due 90 days or more                                                      $3,900      $                      -            100        $                     -             100

    Non-accrual loans:

      Construction loans                                                                         14,267                         5,458             161                          5,507              159

      Commercial mortgage loans                                                                  28,379                        20,078              41                         21,077               35

      Commercial loans                                                                           15,942                        15,710               1                          9,251               72

      Residential mortgage loans                                                                  6,763                         8,436            (20)                         8,524             (21)
                                                                                                  -----                         -----                                         -----

    Total non-accrual loans:                                                                    $65,351                       $49,682              32                        $44,359               47
                                                                                                -------                       -------                                       -------

    Total non-performing loans                                                                   69,251                        49,682              39                         44,359               56

     Other real estate owned                                                                     18,115                        20,070            (10)                        20,986             (14)

    Total non-performing assets                                                                 $87,366                       $69,752              25                        $65,345               34
                                                                                                -------                       -------                                       -------

    Accruing  troubled  debt  restructurings (TDRs)                                             $62,358                       $65,393             (5)                       $86,555             (28)

    Non-accrual loans held for sale                                         $                         -                       $7,500           (100)                        $4,750            (100)


    Allowance for loan losses                                                                  $121,535                      $118,966               2                       $117,942                3


    Total gross loans outstanding, at period-end (1)                                        $12,597,434                   $11,201,275              12                    $11,010,457               14


    Allowance for loan losses to non-performing loans, at period-end (2)                        175.50%                      239.45%                                      265.88%

    Allowance for loan losses to gross loans, at period-end (1)                                   0.96%                        1.06%                                        1.07%



    (1)              Excludes loans held for
                     sale at period-end.

    (2)              Excludes non-accrual
                     loans held for sale at
                     period-end.

The ratio of non-performing assets, excluding non-accrual loans held for sale, to total assets was 0.6% at September 30, 2017, compared to 0.5% at December 31, 2016. Total non-performing assets increased $17.6 million, or 25.2%, to $87.4 million at September 30, 2017, compared to $69.8 million at December 31, 2016, primarily due to an increase of $15.7 million, or 31.5%, in non-accrual loans offset by a decrease of $2.0 million, or 9.7%, in other real estate owned.

CAPITAL ADEQUACY REVIEW

At September 30, 2017, the Company's common equity Tier 1 capital ratio of 12.18%, Tier 1 risk-based capital ratio of 12.18%, total risk-based capital ratio of 14.11%, and Tier 1 leverage capital ratio of 10.41%, calculated under the Basel III capital rules, continue to place the Company in the "well capitalized" category for regulatory purposes, which is defined as institutions with a common equity tier 1 capital ratio equal to or greater than 6.5%, a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%. At December 31, 2016, the Company's common equity Tier 1 capital ratio was 12.84%, Tier 1 risk-based capital ratio was 13.85%, total risk-based capital ratio was 14.97%, and Tier 1 leverage capital ratio was 11.57%.

YEAR-TO-DATE REVIEW

Net income for the nine months ended September 30, 2017, was $150.1 million, an increase of $23.0 million, or 18.1%, compared to net income of $127.1 million for the same period a year ago. Diluted earnings per share was $1.86 compared to $1.59 per share for the same period a year ago. The net interest margin for the nine months ended September 30, 2017, was 3.63% compared to 3.39% for the same period a year ago.

Return on average stockholders' equity was 10.46% and return on average assets was 1.39% for the nine months ended September 30, 2017, compared to a return on average stockholders' equity of 9.66% and a return on average assets of 1.29% for the same period of 2016. The efficiency ratio for the nine months ended September 30, 2017, was 43.71% compared to 51.35% for the same period a year ago.

CONFERENCE CALL

Cathay General Bancorp will host a conference call this afternoon to discuss its third quarter 2017 financial results. The call will begin at 3:00 p.m., Pacific Time. Analysts and investors may dial in and participate in the question-and-answer session. To access the call, please dial 1-855-761-3186 and enter Conference ID 88339508. A listen-only live Webcast of the call will be available at www.cathaygeneralbancorp.com and a recorded version is scheduled to be available for replay for 12 months after the call.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp is the holding company for Cathay Bank, a California state-chartered bank and Far East National Bank, a U.S. federally chartered bank. Founded in 1962, Cathay Bank offers a wide range of financial services. Cathay Bank currently operates 34 branches in California, 12 branches in New York State, three in the Chicago, Illinois area, three in Washington State, two in Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New Jersey, one in Hong Kong, and a representative office in Taipei and in Shanghai. Cathay Bank's website is found at www.cathaybank.com. Founded in 1974, Far East National Bank offers a wide range of financial services. Far East National Bank operates nine branches in California, and a representative office in Beijing. Far East National Bank's website is found at www.fareastnationalbank.com. Information set forth on such websites are not incorporated into this press release.

FORWARD-LOOKING STATEMENTS

Statements made in this press release, other than statements of historical fact, are forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 regarding management's beliefs, projections, and assumptions concerning future results and events. These forward-looking statements may include, but are not limited to, such words as "aims," "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "hopes," "intends," "may," "plans," "projects," "predicts," "potential," "possible," "optimistic," "seeks," "shall," "should," "will," and variations of these words and similar expressions. Forward-looking statements are based on estimates, beliefs, projections, and assumptions of management and are not guarantees of future performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from U.S. and international business and economic conditions; possible additional provisions for loan losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to including potential future supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act; higher capital requirements from the implementation of the Basel III capital standards; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; fluctuations in interest rates; risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters and geopolitical events; general economic or business conditions in Asia, and other regions where Cathay Bank has operations; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to technological changes; risk management processes and strategies; adverse results in legal proceedings; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in accounting standards or tax laws and regulations; market disruption and volatility; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; issuance of preferred stock; successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; our ability to consummate and realize the anticipated benefits of our acquisitions, including the recent acquisition of SinoPac Bancorp and Far East National Bank; the risk that integration of SinoPac Bancorp's and Far East National Bank's operations with those of the Company and Cathay Bank will be materially delayed or will be more costly or difficult than expected; the diversion of management's attention from ongoing business operations and opportunities; the challenges of integrating and retaining key employees; and general competitive, economic political, and market conditions and fluctuations.

These and other factors are further described in Cathay General Bancorp's Annual Report on Form 10-K for the year ended December 31, 2016 (Item 1A in particular), other reports filed with the Securities and Exchange Commission ("SEC"), and other filings Cathay General Bancorp makes with the SEC from time to time. Actual results in any future period may also vary from the past results discussed in this press release. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements, which speak to the date of this press release. Cathay General Bancorp has no intention and undertakes no obligation to update any forward-looking statement or to publicly announce any revision of any forward-looking statement to reflect future developments or events, except as required by law.



                                                                                   CATHAY GENERAL BANCORP

                                                                             CONSOLIDATED FINANCIAL HIGHLIGHTS

                                                                                        (Unaudited)


                                                  Three months ended                                                    Nine months ended September 30,
                                                  ------------------                                                    -------------------------------

    (Dollars in thousands, except per
     share data)                           September 30, 2017                               June 30, 2017                                               September 30, 2016             2017         2016
    ---------------------------------      ------------------                               -------------                                               ------------------             ----         ----


    FINANCIAL PERFORMANCE

    Net interest income before provision
     for credit losses                                              $133,196                                   $117,352                                                    $103,824   $362,662     $307,968

    Reversal for credit losses                                             -                                         -                                                          -   (2,500)    (15,650)
                                                                         ---                                       ---                                                        ---    ------      -------

    Net interest income after reversal for
     credit losses                                                   133,196                                    117,352                                                     103,824    365,162      323,618

    Non-interest income                                               12,961                                      6,152                                                       8,811     25,831       25,409

    Non-interest expense                                              61,248                                     56,658                                                      50,737    169,792      171,187
                                                                      ------                                     ------                                                      ------    -------      -------

    Income before income tax expense                                  84,909                                     66,846                                                      61,898    221,201      177,840

    Income tax expense                                                35,163                                     15,431                                                      15,808     71,099       50,756
                                                                      ------                                     ------                                                      ------     ------       ------

    Net income                                                       $49,746                                    $51,415                                                     $46,090    150,102      127,084
                                                                     =======                                    =======                                                     =======    =======      =======


    Net income per common share

    Basic                                                              $0.62                                      $0.64                                                       $0.58      $1.87        $1.61

    Diluted                                                            $0.61                                      $0.64                                                       $0.58      $1.86        $1.59


     Cash dividends paid per common share                              $0.21                                      $0.21                                                       $0.18      $0.63        $0.54



    SELECTED RATIOS

    Return on average assets                                           1.29%                                     1.48%                                                      1.38%     1.39%       1.29%

    Return on average total stockholders'
     equity                                                            9.77%                                    10.96%                                                     10.30%    10.46%       9.66%

    Efficiency ratio                                                  41.91%                                    45.88%                                                     45.05%    43.71%      51.35%

    Dividend payout ratio                                             34.11%                                    32.61%                                                     30.80%    33.64%      33.50%



    YIELD ANALYSIS (Fully taxable
     equivalent)

    Total interest-earning assets                                      4.34%                                     4.19%                                                      4.02%     4.21%       4.05%

    Total interest-bearing liabilities                                 0.81%                                     0.78%                                                      0.89%     0.79%       0.89%

    Net interest spread                                                3.53%                                     3.41%                                                      3.13%     3.42%       3.16%

    Net interest margin                                                3.75%                                     3.63%                                                      3.36%     3.63%       3.39%





    CAPITAL RATIOS                         September 30, 2017                             December 31, 2016                                             September 30, 2016
                                           ------------------                             -----------------                                             ------------------

    Common Equity Tier 1 capital ratio                                12.18%                                    12.84%                                                     12.64%

    Tier 1 risk-based capital ratio                                   12.18%                                    13.85%                                                     13.67%

    Total risk-based capital ratio                                    14.11%                                    14.97%                                                     14.78%

    Tier 1 leverage capital ratio                                     10.41%                                    11.57%                                                     11.91%

                                                   .
                                                  ===


                                                                                                    CATHAY GENERAL BANCORP

                                                                                             CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                                          (Unaudited)


    (In thousands, except share and per share data)               September 30, 2017                                               December 31, 2016             September 30, 2016
    ----------------------------------------------                ------------------                                               -----------------             ------------------


    Assets

    Cash and due from banks                                                             $167,886                                                        $218,017                       $203,877

    Federal funds sold                                                                     7,000                                                               -                             -
                                                                                           -----                                                             ---                           ---

        Cash and cash equivalents                                                        174,886                                                         218,017                        203,877

    Short-term investments and interest bearing deposits                                 566,059                                                         967,067                        791,757

    Securities available-for-sale (amortized cost of $1,364,955
     at September 30, 2017, $1,317,012 at December 31, 2016, and
     $1,283,808 at September 30, 2016)

                                                                                       1,368,487                                                       1,314,345                      1,298,469

    Loans held for sale                                                                        -                                                          7,500                          4,750

    Loans                                                                             12,597,434                                                      11,201,275                     11,010,457

    Less:  Allowance for loan losses                                                   (121,535)                                                      (118,966)                     (117,942)

     Unamortized deferred loan fees, net                                                 (3,424)                                                        (4,994)                       (5,519)
                                                                                          ------                                                          ------                         ------

     Loans, net                                                                       12,472,475                                                      11,077,315                     10,886,996

    Federal Home Loan Bank and Federal Reserve Bank stock                                 30,681                                                          17,250                         18,900

    Other real estate owned, net                                                          18,115                                                          20,070                         20,986

    Affordable housing investments and alternative energy
     partnerships, net                                                                   298,426                                                         251,077                        225,535

    Premises and equipment, net                                                          107,954                                                         105,607                        106,885

    Customers' liability on acceptances                                                   12,009                                                          12,182                         13,339

    Accrued interest receivable                                                           42,190                                                          37,299                         31,868

    Goodwill                                                                             372,189                                                         372,189                        372,189

    Other intangible assets, net                                                           9,408                                                           2,949                          3,158

    Other assets                                                                         255,538                                                         117,902                        120,080


    Total assets                                                                     $15,728,417                                                     $14,520,769                    $14,098,789
                                                                                     ===========                                                     ===========                    ===========


    Liabilities and Stockholders' Equity

    Deposits

    Non-interest-bearing demand deposits                                              $2,730,006                                                      $2,478,107                     $2,246,661

    Interest-bearing deposits:

    NOW deposits                                                                       1,379,100                                                       1,230,445                      1,073,436

    Money market deposits                                                              2,370,724                                                       2,198,938                      2,131,190

    Savings deposits                                                                     925,312                                                         719,949                        633,345

    Time deposits                                                                      5,156,553                                                       5,047,287                      4,854,064
                                                                                       ---------                                                       ---------                      ---------

    Total deposits                                                                    12,561,695                                                      11,674,726                     10,938,696
                                                                                      ----------                                                      ----------                     ----------


    Securities sold under agreements to repurchase                                       100,000                                                         350,000                        350,000

    Advances from the Federal Home Loan Bank                                             595,000                                                         350,000                        700,000

    Other borrowings for affordable housing investments                                   17,518                                                          17,662                         17,705

    Long-term debt                                                                       119,136                                                         119,136                        119,136

    Acceptances outstanding                                                               12,009                                                          12,182                         13,339

    Deferred payments from acquisition                                                   136,056                                                               -                             -

    Other liabilities                                                                    218,304                                                         168,524                        166,474
                                                                                         -------                                                         -------                        -------

    Total liabilities                                                                 13,759,718                                                      12,692,230                     12,305,350
                                                                                      ----------                                                      ----------                     ----------

         Commitments and contingencies                                                         -                                                              -                             -
                                                                                             ---                                                            ---                           ---

    Stockholders' Equity

    Common stock, $0.01 par value, 100,000,000 shares authorized,
     89,027,259 issued and 80,816,616 outstanding at September
     30, 2017, 87,820,920 issued and 79,610,277 outstanding at
     December 31, 2016, and 87,090,319 issued and 78,879,676
     outstanding at September 30, 2016

                                                                                             890                                                             878                            871

    Additional paid-in-capital                                                           932,521                                                         895,480                        886,081

    Accumulated other comprehensive income/(loss), net                                     (217)                                                        (3,715)                         1,903

    Retained earnings                                                                  1,275,094                                                       1,175,485                      1,144,173

    Treasury stock, at cost (8,210,643 shares at September 30,
     2017, at December 31, 2016, and at September 30, 2016)

                                                                                       (239,589)                                                      (239,589)                     (239,589)


    Total equity                                                                       1,968,699                                                       1,828,539                      1,793,439
                                                                                       ---------                                                       ---------                      ---------

    Total liabilities and equity                                                     $15,728,417                                                     $14,520,769                    $14,098,789
                                                                                     ===========                                                     ===========                    ===========


    Book value per common share                                                           $24.24                                                          $22.80                         $22.57

    Number of common shares outstanding                                               80,816,616                                                      79,610,277                     78,879,676


                                                                  CATHAY GENERAL BANCORP

                                                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                        (Unaudited)


                                   Three months ended                                                       Nine months ended September 30,
                                   ------------------                                                       -------------------------------

                                   September 30, 2017                             June 30, 2017                   September 30, 2016                     2017         2016
                                   ------------------                             -------------                   ------------------                     ----         ----

                                      (In thousands, except share and per share data)

    INTEREST AND  DIVIDEND INCOME

    Loan receivable, including
     loan fees                                              $146,383                               $129,836                                  $118,500   $401,129     $349,212

    Investment securities                                      5,692                                  4,719                                     4,850     14,817       16,974

    Federal Home Loan Bank and
     Federal Reserve Bank stock                                  607                                    298                                       393      1,317        1,122

    Federal funds sold and
     securities purchased under
     agreements to resell

                                                                 108                                      -                                        -       108            -

    Deposits with banks                                        1,288                                    776                                       412      3,140        1,094


    Total interest and dividend
     income                                                  154,078                                135,629                                   124,155    420,511      368,402
                                                             -------                                -------                                   -------    -------      -------


    INTEREST EXPENSE

    Time deposits                                             11,678                                 10,769                                    10,701     33,429       32,177

    Other deposits                                             5,101                                  4,698                                     4,212     14,245       11,783

    Securities sold under
     agreements to repurchase                                    874                                  1,065                                     3,828      3,489       11,696

    Advances from Federal Home
     Loan Bank                                                   872                                    305                                       134      1,465          442

    Long-term debt                                             1,456                                  1,440                                     1,456      4,320        4,336

    Deferred payments from
     acquisition                                                 901                                      -                                        -       901            -


    Total interest expense                                    20,882                                 18,277                                    20,331     57,849       60,434
                                                              ------                                 ------                                    ------     ------       ------


    Net interest income before
     reversal for credit losses                              133,196                                117,352                                   103,824    362,662      307,968

    Reversal for credit losses                                     -                                     -                                        -   (2,500)    (15,650)


    Net interest income after
     reversal for credit losses                              133,196                                117,352                                   103,824    365,162      323,618
                                                             -------                                -------                                   -------    -------      -------


    NON-INTEREST INCOME

    Securities (losses)/gains, net                                24                                      3                                     1,692      (439)       3,141

    Letters of credit commissions                              1,302                                  1,193                                     1,212      3,618        3,698

    Depository service fees                                    1,407                                  1,344                                     1,401      4,259        4,109

    Gain from acquisition                                      5,440                                      -                                        -     5,440            -

    Other operating income                                     4,788                                  3,612                                     4,506     12,953       14,461


    Total non-interest income                                 12,961                                  6,152                                     8,811     25,831       25,409
                                                              ------                                  -----                                     -----     ------       ------


    NON-INTEREST EXPENSE

    Salaries and employee benefits                            27,913                                 26,145                                    22,881     79,929       71,313

    Occupancy expense                                          5,312                                  4,722                                     4,734     14,733       13,587

    Computer and equipment expense                             2,643                                  2,528                                     2,337      7,895        7,360

    Professional services expense                              4,942                                  5,343                                     4,999     14,541       13,981

    Data processing service
     expense                                                   2,918                                  2,396                                     2,279      7,846        6,556

    FDIC and State assessments                                 2,552                                  2,189                                     2,288      7,261        7,640

    Marketing expense                                          2,103                                  1,859                                     1,516      4,833        3,314

    Other real estate owned
     expense                                                     369                                    317                                     (176)       747          612

    Amortization of investments in
     low income housing and
     alternative energy
     partnerships                                              5,723                                  6,224                                     5,432     16,797       35,626

    Amortization of core deposit
     intangibles                                                 281                                    173                                       172        626          517

    Acquisition and integration
     costs                                                     3,277                                      -                                        -     3,277            -

    Other operating expense                                    3,215                                  4,762                                     4,275     11,307       10,681


    Total non-interest expense                                61,248                                 56,658                                    50,737    169,792      171,187
                                                              ------                                 ------                                    ------    -------      -------


    Income before income tax
     expense                                                  84,909                                 66,846                                    61,898    221,201      177,840

    Income tax expense                                        35,163                                 15,431                                    15,808     71,099       50,756
                                                              ------                                 ------                                    ------     ------       ------

    Net income                                               $49,746                                $51,415                                   $46,090    150,102      127,084
                                                             =======                                =======                                   =======    =======      =======


    Net income per common share:

    Basic                                                      $0.62                                  $0.64                                     $0.58      $1.87        $1.61

    Diluted                                                    $0.61                                  $0.64                                     $0.58      $1.86        $1.59


    Cash dividends paid per common
     share                                                     $0.21                                  $0.21                                     $0.18      $0.63        $0.54

    Basic average common shares
     outstanding                                          80,665,398                             79,840,188                                78,865,860 80,073,249   79,147,839

    Diluted average common shares
     outstanding                                          81,404,854                             80,562,607                                79,697,069 80,797,179   79,902,846


                                                                                                                                  CATHAY GENERAL BANCORP

                                                                                                              AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION

                                                                                                                                        (Unaudited)


                                                                    Three months ended
                                                                    ------------------

    (In thousands)                                September 30, 2017                                           June 30, 2017                                                 September 30, 2016
    -------------                                 ------------------                                           -------------                                                 ------------------


    Interest-
     earning assets                                Average Balance                          Average                                           Average Balance                     Average              Average Balance                              Average
                                                                                       Yield/Rate (1)                                                                        Yield/Rate (1)                                                    Yield/Rate (1)
                                                                                                                                                             ---                                                      ---              --------------

    Loans (1)                                                       $12,317,720                       4.71%                                                     $11,388,056                     4.57%                     $10,670,253                         4.42%

    Taxable
     investment
     securities                                                       1,396,859                       1.61%                                                       1,260,646                     1.50%                       1,303,598                         1.48%

    FHLB and FRB
     stock                                                               32,369                       7.44%                                                          17,250                     6.93%                          17,268                         9.05%

    Federal funds sold and securities purchased under
     agreements to resell

                                                                         35,707                       1.20%                                                               -                        -                               -                            -

    Deposits with
     banks                                                              292,595                       1.75%                                                         302,224                     1.03%                         294,292                         0.56%


    Total interest-
     earning assets                                                 $14,075,250                       4.34%                                                     $12,968,176                     4.19%                     $12,285,411                         4.02%
                                                                    -----------                                                                                 -----------                                               -----------


    Interest-bearing liabilities

    Interest-
     bearing demand
     deposits                                                        $1,349,508                       0.17%                                                      $1,260,574                     0.17%                      $1,060,065                         0.17%

    Money market
     deposits                                                         2,496,548                       0.63%                                                       2,304,586                     0.66%                       2,117,831                         0.66%

    Savings
     deposits                                                           942,452                       0.24%                                                         794,450                     0.20%                         627,912                         0.16%

    Time deposits                                                     4,939,189                       0.94%                                                       4,722,920                     0.91%                       4,651,593                         0.92%
                                                                      ---------                                                                                   ---------                                                 ---------

    Total interest-
     bearing
     deposits                                                        $9,727,697                       0.68%                                                      $9,082,530                     0.68%                      $8,457,401                         0.70%

    Securities sold
     under
     agreements to
     repurchase                                                         109,239                       3.17%                                                         150,000                     2.85%                         378,261                         4.03%

    Other borrowed
     funds                                                              324,581                       2.17%                                                         103,538                     1.18%                         107,203                         0.50%

    Long-term debt                                                      119,136                       4.85%                                                         119,136                     4.85%                         119,136                         4.86%
                                                                        -------                        ----                                                          -------                      ----                          -------                          ----

    Total interest-
     bearing
     liabilities                                                     10,280,653                       0.81%                                                       9,455,204                     0.78%                       9,062,001                         0.89%


    Non-interest-
     bearing demand
     deposits                                                         2,714,244                                                                                   2,440,181                                                 2,254,123


    Total deposits
     and other
     borrowed funds                                                 $12,994,897                                                                                 $11,895,385                                               $11,316,124
                                                                    -----------                                                                                 -----------                                               -----------


    Total average
     assets                                                         $15,354,123                                                                                 $13,964,206                                               $13,263,385

    Total average
     equity                                                          $2,020,224                                                                                  $1,882,454                                                $1,779,852



                                                  Nine months ended,
                                                  ------------------

    (In thousands)                                September 30, 2017                                        September 30, 2016
    -------------                                 ------------------                                        ------------------


    Interest-
     earning assets                                Average Balance                          Average                                           Average Balance                     Average
                                                                                       Yield/Rate (1)                                                                        Yield/Rate (1)
                                                                                                                                                             ---

    Loans (1)                                                       $11,668,814                       4.60%                                                     $10,468,328                     4.46%

    Taxable
     investment
     securities                                                       1,297,789                       1.52%                                                       1,384,019                     1.64%

    FHLB and FRB
     stock                                                               22,345                       7.88%                                                          17,256                     8.69%

    Federal funds sold and securities purchased under
     agreements to resell

                                                                         12,033                       1.20%                                                               -                        -

    Deposits with
     banks                                                              359,579                       1.17%                                                         272,690                     0.54%


    Total interest-
     earning assets                                                 $13,360,560                       4.21%                                                     $12,142,293                     4.05%
                                                                    -----------                                                                                 -----------


    Interest-bearing liabilities

    Interest-
     bearing demand
     deposits                                                        $1,282,904                       0.17%                                                      $1,013,129                     0.17%

    Money market
     deposits                                                         2,359,871                       0.64%                                                       2,020,725                     0.65%

    Savings
     deposits                                                           817,540                       0.20%                                                         626,200                     0.16%

    Time deposits                                                     4,840,293                       0.92%                                                       4,752,938                     0.90%
                                                                      ---------                                                                                   ---------

    Total interest-
     bearing
     deposits                                                        $9,300,608                       0.69%                                                      $8,412,992                     0.70%

    Securities sold
     under
     agreements to
     repurchase                                                         149,267                       3.13%                                                         392,701                     3.98%

    Other borrowed
     funds                                                              177,372                       1.78%                                                         119,348                     0.49%

    Long-term debt                                                      119,136                       4.85%                                                         119,136                     4.86%
                                                                        -------                        ----                                                          -------                      ----

    Total interest-
     bearing
     liabilities                                                      9,746,383                       0.79%                                                       9,044,177                     0.89%


    Non-interest-
     bearing demand
     deposits                                                         2,542,754                                                                                   2,131,741


    Total deposits
     and other
     borrowed funds                                                 $12,289,137                                                                                 $11,175,918
                                                                    -----------                                                                                 -----------


    Total average
     assets                                                         $14,443,734                                                                                 $13,109,225

    Total average
     equity                                                          $1,918,266                                                                                  $1,757,592


                    Yields and interest
                     earned include net loan
                     fees. Non-accrual
                     loans are included in
    (1)              the average balance.

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SOURCE Cathay General Bancorp