PR Newswire | Apr 26, 2021 04:30PM EDT

04/26 15:30 CDT

Cathay General Bancorp Announces First Quarter 2021 Results LOS ANGELES, April 26, 2021

LOS ANGELES, April 26, 2021 /PRNewswire/ -- Cathay General Bancorp (the "Company", "we", "us", or "our") (Nasdaq: CATY), the holding company for Cathay Bank, today announced its unaudited financial results for the quarter ended March 31, 2021. The Company reported net income of $73.4 million, or $0.92 per share, for the first quarter of 2021.

FINANCIAL PERFORMANCE

Three months ended

(unaudited) March 31, 2021 December 31, 2020 March 31, 2020

Net income $73.4 million $70.9 million $46.9 million

Basic earnings per common $0.92 $0.89 $0.59share

Diluted earnings per common $0.92 $0.89 $0.59share

Return on average assets 1.57% 1.50% 1.05%

Return on average total 12.23% 11.75% 8.12%stockholders' equity

Efficiency ratio 47.03% 49.61% 44.60%

FIRST QUARTER HIGHLIGHTS

* The net interest margin increased to 3.20% in the first quarter of 2021 from 3.12% in the fourth quarter of 2020. * There was a reversal of provisions for credit losses of $13.6 million in the first quarter of 2021 compared to a reversal for loan losses of $5.0 million for the fourth quarter of 2020.

"For the first quarter of 2021, our net interest margin was 3.20%, increasing 8 basis points from the fourth quarter of 2020. Also, there was a reversal of provisions for credit losses of $13.6 million in the first quarter of 2021 primarily due to the improved macroeconomic conditions," commented Chang M. Liu, President and Chief Executive Officer of the Company.

FIRST QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended March 31, 2021, was $73.4 million, an increase of $26.5 million, or 56.5%, compared to net income of $46.9 million for the same quarter a year ago. Diluted earnings per share for the quarter ended March 31, 2021, was $0.92 per share compared to $0.59 per share for the same quarter a year ago.

Return on average stockholders' equity was 12.23% and return on average assets was 1.57% for the quarter ended March 31, 2021, compared to a return on average stockholders' equity of 8.12% and a return on average assets of 1.05% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $1.5 million, or 1.1%, to $141.8 million during the first quarter of 2021, compared to $140.3 million during the same quarter a year ago. The increase was due primarily to a decrease in interest expense from deposits, offset, in part, by a decrease in interest income from loans and securities.

The net interest margin was 3.20% for the first quarter of 2021 compared to 3.34% for the first quarter of 2020 and 3.12% for the fourth quarter of 2020.

For the first quarter of 2021, the yield on average interest-earning assets was 3.68%, the cost of funds on average interest-bearing liabilities was 0.67%, and the cost of interest-bearing deposits was 0.63%. In comparison, for the first quarter of 2020, the yield on average interest-earning assets was 4.44%, the cost of funds on average interest-bearing liabilities was 1.49%, and the cost of interest-bearing deposits was 1.44%. The decrease in the yield on average interest-earning assets resulted mainly from lower lending rates. 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 3.01% for the quarter ended March 31, 2021, compared to 2.95% for the same quarter a year ago.

(Reversal)/provision for credit losses

As permitted under the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and as extended by the Consolidated Appropriations Act, 2021, the Company adopted the Current Expected Credit Losses ("CECL") methodology for estimated credit losses effective as of January 1, 2021. The adoption of CECL under a modified retrospective approach as of January 1, 2021 increased the allowance for loan losses by $13.9 million and allowance for unfunded credit commitments by $0.5 million and an after-tax decrease to opening retained earnings of $10.2 million. As of March 31, 2021, the allowance for loan losses decreased $19.9 million to $160.6 million, or 1.03% of gross loans, compared to $180.5 million, or 1.15% of gross loans, as of January 1, 2021. The change in the allowance for loan losses included a $12.1 million reversal for loan losses for the first quarter of 2021, as a result of the improving macroeconomic conditions and $7.8 million in net charge-offs. In the first quarter of 2020, a provision for loan losses of $25.0 million was recorded under the incurred loss method. The Company will continue to monitor the continuing impact of the COVID-19 pandemic on credit risks and losses, as well as on customer demand deposits and other liabilities and assets. The following table sets forth the charge-offs and recoveries for the periods indicated:

Three months ended

March 31, 2021 December 31, 2020 March 31, 2020

(In thousands) (Unaudited)

Charge-offs:

Commercial $ 9,138 $ 8,613 $ 1,321loans

Total 9,138 8,613 1,321charge-offs

Recoveries:

Commercial 1,269 912 1,208loans

Realestate loans 111 109 162^(1)

Total 1,380 1,021 1,370recoveries

Netcharge-offs/ $ 7,758 $ 7,592 $ (49)(recoveries)

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

Allowance for credit losses

The following table presents a roll forward of the allowance for credit losses for the periods indicated:

Three Months Ended March 31, 2021 Three Months Ended December 31, 2020 Three Months Ended March 31, 2020

Allowance for Allowance Reserve for Total Allowance Reserve for Total Allowance Reserve for TotalCredit Losses for Loan Unfunded Loan Allowance for Loan Unfunded Allowance for Loan Unfunded AllowanceRollforward Losses Commitments for Credit Losses Loan for Credit Losses Loan for Credit Losses Commitments Losses Commitments Losses

Beginning $ 166,538 $ 5,880 $ 172,418 $ 179,131 $ 5,663 $ 184,794 $ 123,224 $ 3,855 $ 127,079Balance

Impact of ASU2016-13 13,913 539 14,452 - - - - - -adoption

Balance, atJanuary 1, 180,451 6,419 186,870 179,131 5,663 184,794 123,224 3,855 127,0792021

(Reversal)/provision for (12,110) (1,448) (13,558) (5,000) 217 (4,783) 25,000 (842) 24,158credit losses

Charge-offs (9,138) - (9,138) (8,613) - (8,613) (1,321) - (1,321)

Recoveries 1,380 - 1,380 1,020 - 1,020 1,370 - 1,370

Net(charge-offs) (7,758) - (7,758) (7,593) - (7,593) 49 - 49/recoveries

Ending $ 160,583 $ 4,971 $ 165,554 $ 166,538 $ 5,880 $ 172,418 $ 148,273 $ 3,013 $ 151,286Balance

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 $10.0 million for the first quarter of 2021, an increase of $4.2 million, or 72.4%, compared to $5.8 million for the first quarter of 2020. The increase was primarily due to a $3.4 million decrease in net losses from equity securities and a $0.8 million increase in gain from sale of securities, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense increased $6.2 million, or 9.5%, to $71.4 million in the first quarter of 2021 compared to $65.2 million in the same quarter a year ago. The increase in non-interest expense in the first quarter of 2021 was primarily due to a decrease of $4.2 million in income from other real estate owned, an increase of $1.8 million in salaries and other employee benefits, an increase of $1.0 million in contributions to the Cathay Bank foundation, to combat anti-Asian American hate crimes, and an increase of $0.7 million in costs associated with debt redemption, offset, in part, by a decrease of $2.3 million in amortization expense of investments in low-income housing and alternative energy partnerships, when compared to the same quarter a year ago. The efficiency ratio was 47.0% in the first quarter of 2021 compared to 44.6% for the same quarter a year ago.

Income taxes

The effective tax rate for the first quarter of 2021 was 21.9% compared to 16.3% for the first quarter of 2020. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $15.7 billion as of March 31, 2021, an increase of $7.5 million, or 0.05%, from $15.6 billion as of December 31, 2020. The increase was primarily due to an increase of $93.5 million in Paycheck Protection Program Loans, offset, in part, by a decrease of $43.2 million, or 1.0%, in residential mortgage loans and $39.7 million, or 1.5%, in commercial loans not including Paycheck Protection Program Loans. During the first quarter of 2021, Cathay Bank funded 1,333 new PPP loans totaling $142.4 million. Loan fees recognized on PPP loans were $2.5 million in the first quarter of 2021 compared to $1.7 million in the fourth quarter of 2020.

The loan balances and composition as of March 31, 2021, compared to December 31, 2020 and March 31, 2020, are presented below:

March 31, 2021 December 31, 2020 March 31, 2020

(In thousands) (Unaudited)

Commercial $ 2,556,247 $ 2,595,926 $ 2,973,078loans

Paycheckprotection 334,446 240,907 -programloans

Residentialmortgage 4,102,203 4,145,389 4,173,876loans

Commercialmortgage 7,549,522 7,555,027 7,422,585loans

Equity lines 428,318 424,555 385,317

Real estateconstruction 677,816 679,492 577,240loans

Installmentand other 3,296 3,100 2,116loans

Gross loans $ 15,651,848 $ 15,644,396 $ 15,534,212

Allowancefor loan (160,583) (166,538) (148,273)losses

Unamortizeddeferred (6,872) (2,494) (277)loan fees

Total loans, $ 15,484,393 $ 15,475,364 $ 15,385,662net

Total deposits were $16.4 billion as of March 31, 2021, an increase of $244.2 million, or 1.5%, from $16.1 billion as of December 31, 2020. The increases in noninterest-bearing demand deposits, money market deposits and savings deposits resulted from higher liquidity maintained by our depositors during these uncertain times and improved money market deposit generation. The decreases in time deposits resulted primarily from the runoff of wholesale time deposits and migration of some maturing time deposits to money market deposits. During the first quarter of 2021, our deposits excluding CD's increased by $695.5 million, or 29.5% annualized. The deposit balances and composition as of March 31, 2021, compared to December 31, 2020 and March 31, 2020, are presented below:

March 31, 2021 December 31, 2020 March 31, 2020

(In thousands) (Unaudited)

Non-interest-bearing $ 3,495,775 $ 3,365,086 $ 2,860,580demand deposits

NOW deposits 1,915,822 1,926,135 1,514,434

Money market 3,808,794 3,359,191 2,482,950deposits

Savings deposits 911,210 785,672 710,602

Time deposits 6,222,032 6,673,317 7,521,584

Total deposits $ 16,353,633 $ 16,109,401 $ 15,090,150

ASSET QUALITY REVIEW

As of March 31, 2021, total non-accrual loans were $94.4 million, an increase of $26.7 million, or 39.5%, from $67.7 million as of December 31, 2020, and an increase of $40.7 million, or 75.8%, from $53.7 million as of March 31, 2020. The increase from the fourth quarter was due primarily to an $18.8 million oil and gas commercial loan and a $10.1 million commercial mortgage loan placed on nonaccrual status during the first quarter of 2021.

The allowance for loan losses was $160.6 million and the allowance for off-balance sheet unfunded credit commitments was $5.0 million as of March 31, 2021. The allowances represent the amount estimated by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments. The $160.6 million allowance for loan losses as of March 31, 2021, decreased $19.9 million, or 11.0%, from $180.5 million as of January 1, 2021. The allowance for loan losses represented 1.03% of period-end gross loans, and 166.26% of non-performing loans as of March 31, 2021. The comparable ratios were 1.06% of period-end gross loans, and 229.18% of non-performing loans as of December 31, 2020. The changes in non-performing assets and troubled debt restructurings as of March 31, 2021, compared to December 31, 2020 and March 31, 2020, are presented below:

(Dollars inthousands) March 31, 2021 December 31, 2020 % Change March 31, 2020 % Change(Unaudited)

Non-performingassets

Accruing loanspast due 90 $ 2,138 $ 4,982 (57) $ 4,531 (53)days or more

Non-accrualloans:

Construction 4,189 4,286 (2) 4,482 (7)loans

Commercial 43,361 33,715 29 11,859 266mortgage loans

Commercial 38,351 23,087 66 30,443 26loans

Residential 8,545 6,596 30 6,949 23mortgage loans

Totalnon-accrual $ 94,446 $ 67,684 40 $ 53,733 76loans:

Totalnon-performing 96,584 72,666 33 58,264 66loans

Other real 4,918 4,918 - 9,048 (46)estate owned

Totalnon-performing $ 101,502 $ 77,584 31 $ 67,312 51assets

Accruingtroubled debt $ 27,864 $ 27,721 1 $ 34,364 (19)restructurings(TDRs)

Allowance for $ 160,583 $ 166,538 (4) $ 148,273 8loan losses

Total grossloans $ 15,651,848 $ 15,644,396 0 $ 15,534,212 1outstanding,at period-end

Allowance forloan losses tonon-performing 166.26% 229.18% 254.48%loans, atperiod-end

Allowance forloan losses to 1.03% 1.06% 0.95%gross loans,at period-end

The ratio of non-performing assets to total assets was 0.5% as of March 31, 2021, compared to 0.4% as of December 31, 2020. Total non-performing assets increased $23.9 million, or 30.8%, to $101.5 million as of March 31, 2021, compared to $77.6 million as of December 31, 2020, primarily due to an increase of $26.8 million, or 39.5%, in nonaccrual loans, offset, in part, by a decrease of $2.8 million, or 57.1%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of March 31, 2021, the Company's Tier 1 risk-based capital ratio of 13.94%, total risk-based capital ratio of 15.84%, and Tier 1 leverage capital ratio of 11.06%, 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 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%. As of December 31, 2020, the Company's Tier 1 risk-based capital ratio was 13.53%, total risk-based capital ratio was 15.47%, and Tier 1 leverage capital ratio was 10.94%.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its first quarter 2021 financial results this afternoon, Monday, April 26, 2021, 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 5682513. A presentation to accompany the earnings call will be available at www.cathaygeneralbancorp.com. 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. Founded in 1962, Cathay Bank offers a wide range of financial services. Cathay Bank currently operates 38 branches in California, 10 branches in New York State, four in Washington State, three in Illinois, two in Texas, one in Maryland, Massachusetts, Nevada, and New Jersey, one in Hong Kong, and a representative office in Taipei, Beijing, and Shanghai. Cathay Bank's website is at www.cathaybank.com. Cathay General Bancorp's website is at www.cathaygeneralbancorp.com. Information set forth on such websites is 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 local, regional, national and international business, market and economic conditions and events (such as the COVID-19 pandemic) and the impact they may have on us, our customers and our operations, assets and liabilities; 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; our ability to generate anticipated returns on our investments and financings, including in tax-advantaged projects; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters, public health crises (such as the COVID-19 pandemic) 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; 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, 2020 (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. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we undertake no obligation to update or review any forward-looking statement to reflect circumstances, developments or events occurring after the date on which the statement is made or to reflect the occurrence of unanticipated events.

CATHAY GENERAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Three months ended

(Dollars inthousands, March 31, 2021 December 31, 2020 March 31, 2020except per sharedata)

FINANCIALPERFORMANCE

Net interestincome before(reversal)/ $ 141,818 $ 139,820 $ 140,311provision forcreditlosses

(Reversal)/provision for (13,558) (5,000) 25,000credit losses

Net interestincome after(reversal)/ 155,376 144,820 115,311provision forcredit losses

Non-interest 10,000 11,451 5,786income

Non-interest 71,403 75,046 65,154expense

Income beforeincome tax 93,973 81,225 55,943expense

Income tax 20,589 10,332 9,091expense

Net income $ 73,384 $ 70,893 $ 46,852

Net income percommon share

Basic $ 0.92 $ 0.89 $ 0.59

Diluted $ 0.92 $ 0.89 $ 0.59

Cash dividendspaid per common $ 0.31 $ 0.31 $ 0.31share

SELECTED RATIOS

Return on 1.57% 1.50% 1.05%average assets

Return onaverage total 12.23% 11.75% 8.12%stockholders'equity

Efficiency ratio 47.03% 49.61% 44.60%

Dividend payout 33.59% 34.80% 52.63%ratio

YIELD ANALYSIS(Fully taxableequivalent)

Totalinterest-earning 3.68% 3.74% 4.44%assets

Totalinterest-bearing 0.67% 0.86% 1.49%liabilities

Net interest 3.01% 2.88% 2.95%spread

Net interest 3.20% 3.12% 3.34%margin

CAPITAL RATIOS March 31, 2021 December 31, 2020 March 31, 2020

Tier 1risk-based 13.94% 13.53% 12.38%capital ratio

Total risk-based 15.84% 15.47% 14.12%capital ratio

Tier 1 leverage 11.06% 10.94% 10.82%capital ratio

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands,except share and per March 31, 2021 December 31, 2020 March 31, 2020share data)

Assets

Cash and due from $ 141,885 $ 138,616 $ 136,350banks

Short-terminvestments and 1,612,411 1,282,462 363,666interest bearingdeposits

Securitiesavailable-for-sale(amortized cost of$898,463 at March31, 2021,

$1,019,230 atDecember 31, 2020 908,844 1,036,550 1,355,173and $1,330,232 atMarch 31, 2020)

Loans 15,651,848 15,644,396 15,534,212

Less: Allowance for (160,583) (166,538) (148,273)loan losses

Unamortizeddeferred loan fees, (6,872) (2,494) (277)net

Loans, net 15,484,393 15,475,364 15,385,662

Equity securities 20,993 23,744 18,790

Federal Home Loan 17,250 17,250 17,250Bank stock

Other real estate 4,918 4,918 9,048owned, net

Affordable housinginvestments and 296,229 309,016 294,639alternative energypartnerships, net

Premises and 101,864 102,998 103,481equipment, net

Customers' liability 4,125 13,753 5,175on acceptances

Accrued interest 58,216 59,032 53,110receivable

Goodwill 372,189 372,189 372,189

Other intangible 5,249 5,434 6,187assets, net

Right-of-use assets- 32,927 30,919 32,743operating leases

Other assets 159,319 170,889 142,996

Total assets $ 19,220,812 $ 19,043,134 $ 18,296,459

Liabilities andStockholders' Equity

Deposits

Non-interest-bearing $ 3,495,775 $ 3,365,086 $ 2,860,580demand deposits

Interest-bearingdeposits:

NOW deposits 1,915,822 1,926,135 1,514,434

Money market 3,808,794 3,359,191 2,482,950deposits

Savings deposits 911,210 785,672 710,602

Time deposits 6,222,032 6,673,317 7,521,584

Total deposits 16,353,633 16,109,401 15,090,150

Short-term - - 12,898borrowings

Advances from theFederal Home Loan 75,000 150,000 495,000Bank

Other borrowings foraffordable housing 23,333 23,714 28,981investments

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

Deferred payments - - 7,716from acquisition

Acceptances 4,125 13,753 5,175outstanding

Lease liabilities - 35,803 33,484 34,790operating leases

Other liabilities 155,870 175,502 189,576

Total liabilities 16,766,900 16,624,990 15,983,422

Stockholders' equity 2,453,912 2,418,144 2,313,037

Total liabilities $ 19,220,812 $ 19,043,134 $ 18,296,459and equity

Book value per $ 30.83 $ 30.41 $ 29.12common share

Number of common 79,595,025 79,508,265 79,420,267shares outstanding

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended

March 31, 2021 December 31, 2020 March 31, 2020

(In thousands, except share and per share data)

INTERESTAND DIVIDENDINCOME

Loanreceivable, $ 159,721 $ 163,618 $ 177,870includingloan fees

Investment 3,067 3,469 7,610securities

Federal HomeLoan Bank 217 217 305stock

Deposits 315 292 951with banks

Totalinterest and 163,320 167,596 186,736dividendincome

INTERESTEXPENSE

Time 14,009 19,416 35,155deposits

Other 5,594 5,725 7,991deposits

Advancesfrom Federal 475 1,180 1,552Home LoanBank

Long-term 1,424 1,455 1,440debt

Deferredpayments - - 58fromacquisition

Short-term - - 229borrowings

Totalinterest 21,502 27,776 46,425expense

Net interestincomebefore(reversal)/ 141,818 139,820 140,311provisionfor creditlosses

(Reversal)/provision (13,558) (5,000) 25,000for creditlosses

Net interestincome after(reversal)/ 155,376 144,820 115,311provisionfor creditlosses

NON-INTERESTINCOME

Net (losses)/gains from (2,752) 780 (6,102)equitysecurities

Securities 853 542 6gains, net

Letters ofcredit 1,690 1,749 1,640commissions

Depository 1,363 1,271 1,298service fees

Otheroperating 8,846 7,109 8,944income

Totalnon-interest 10,000 11,451 5,786income

NON-INTERESTEXPENSE

Salaries andemployee 32,722 31,545 30,939benefits

Occupancy 5,046 5,199 5,177expense

Computer andequipment 3,271 2,915 2,593expense

Professionalservices 4,710 6,270 5,145expense

Dataprocessing 3,655 3,893 3,666serviceexpense

FDIC andState 1,925 2,145 2,415assessments

Marketing 2,882 1,334 1,886expense

Other realestate owned 94 138 (4,104)expense/(income)

Amortizationofinvestmentsin lowincome 11,570 15,228 13,890housing and alternativeenergypartnerships

Amortizationof core 172 172 172depositintangibles

Costassociated 732 693 -with debtredemption

Otheroperating 4,624 5,514 3,375expense

Totalnon-interest 71,403 75,046 65,154expense

Incomebefore 93,973 81,225 55,943income taxexpense

Income tax 20,589 10,332 9,091expense

Net income $ 73,384 $ 70,893 $ 46,852

Net incomeper commonshare:

Basic $ 0.92 $ 0.89 $ 0.59

Diluted $ 0.92 $ 0.89 $ 0.59

Cashdividends $ 0.31 $ 0.31 $ 0.31paid percommon share

Basicaveragecommon 79,530,777 79,540,694 79,588,076sharesoutstanding

Dilutedaveragecommon 79,832,305 79,834,150 79,830,025sharesoutstanding

CATHAY GENERAL BANCORP

AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

Three months ended

(In thousands) March 31, 2021 December 31, 2020 March 31, 2020

Interest-earning Average Average Average Average Average Averageassets Balance Yield/Rate ^(1) Balance Yield/Rate ^(1) Balance Yield/Rate ^(1)

Loans ^(1) $ 15,691,976 4.13% $ 15,569,490 4.18% $ 15,213,440 4.70%

Taxable investment 995,704 1.25% 1,073,058 1.29% 1,379,365 2.22%securities

FHLB stock 17,250 5.10% 17,250 5.00% 17,268 7.09%

Deposits with banks 1,283,375 0.10% 1,156,764 0.10% 311,024 1.23%

Totalinterest-earning $ 17,988,305 3.68% $ 17,816,562 3.74% $ 16,921,097 4.44%assets

Interest-bearingliabilities

Interest-bearing $ 1,890,390 0.14% $ 1,694,831 0.15% $ 1,388,597 0.21%demand deposits

Money market 3,552,217 0.54% 3,295,103 0.59% 2,437,997 1.15%deposits

Savings deposits 845,543 0.10% 797,438 0.11% 733,372 0.18%

Time deposits 6,404,755 0.89% 6,687,731 1.15% 7,495,619 1.89%

Totalinterest-bearing $ 12,692,905 0.63% $ 12,475,103 0.80% $ 12,055,585 1.44%deposits

Other borrowed funds 123,424 1.56% 237,467 1.98% 392,029 1.89%

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

Totalinterest-bearing 12,935,465 0.67% 12,831,706 0.86% 12,566,750 1.49%liabilities

Non-interest-bearing 3,406,460 3,365,075 2,863,889demand deposits

Total deposits and $ 16,341,925 $ 16,196,781 $ 15,430,639other borrowed funds

Total average assets $ 19,002,097 $ 18,843,635 $ 18,003,041

Total average equity $ 2,433,976 $ 2,400,494 $ 2,320,283

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

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SOURCE Cathay General Bancorp