PR Newswire | Oct 26, 2020 04:39PM EDT

10/26 15:38 CDT

Cathay General Bancorp Announces Third Quarter 2020 Results LOS ANGELES, Oct. 26, 2020

LOS ANGELES, Oct. 26, 2020 /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 September 30, 2020. The Company reported net income of $56.8 million, or $0.71 per share, for the third quarter of 2020.

FINANCIAL PERFORMANCE

Three months ended

(unaudited) September 30, June 30, September 30, 2020 2020 2019

Net income $56.8 million $54.3 $72.8 million million

Basic earnings per common share $0.71 $0.68 $0.91

Diluted earnings per common share $0.71 $0.68 $0.91

Return on average assets 1.18% 1.15% 1.65%

Return on average total 9.53% 9.31% 12.98%stockholders' equity

Efficiency ratio 51.53% 44.82% 41.67%

THIRD QUARTER HIGHLIGHTS

* The net interest margin of 3.02% during the third quarter of 2020 is unchanged from the second quarter of 2020. * The provision for loan losses decreased to $12.5 million for the third quarter of 2020 compared to $25.0 million for the second quarter of 2020.

"For the third quarter of 2020, our net interest margin was 3.02%, unchanged from the second quarter of 2020 while our net interest income for the third quarter increased to $137.5 million compared to $134.5 million for the second quarter of 2020 on higher average earning assets," commented Chang M. Liu, President and Chief Executive Officer of the Company.

THIRD QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended September 30, 2020, was $56.8 million, a decrease of $16.0 million, or 22.0%, compared to net income of $72.8 million for the same quarter a year ago. Diluted earnings per share for the quarter ended September 30, 2020, was $0.71 per share compared to $0.91 per share for the same quarter a year ago.

Return on average stockholders' equity was 9.53% and return on average assets was 1.18% for the quarter ended September 30, 2020, compared to a return on average stockholders' equity of 12.98% and a return on average assets of 1.65% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $9.5 million, or 6.5%, to $137.5 million during the third quarter of 2020, compared to $147.0 million during the same quarter a year ago. The decrease was due primarily to a decrease in interest income from loans and securities.

The net interest margin was 3.02% for the third quarter of 2020 compared to 3.56% for the third quarter of 2019 and 3.02% for the second quarter of 2020.

For the third quarter of 2020, the yield on average interest-earning assets was 3.78%, the cost of funds on average interest-bearing liabilities was 1.04%, and the cost of interest-bearing deposits was 0.99%. In comparison, for the third quarter of 2019, the yield on average interest-earning assets was 4.80%, the cost of funds on average interest-bearing liabilities was 1.65%, and the cost of interest-bearing deposits was 1.60%. The decrease in the yield on average interest-earning assets resulted mainly from lower rates on loans. 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 2.74% for the quarter ended September 30, 2020, compared to 3.15% for the same quarter a year ago.

Provision/(Reversal) for credit losses

Based on a review of the appropriateness of the allowance for loan losses at September 30, 2020, the Company recorded a provision for credit losses of $12.5 million in the third quarter of 2020, compared to a reversal for credit losses of $2.0 million in the third quarter of 2019. The provision for credit losses is primarily a result of the economic deterioration of the global economy resulting from the COVID-19 pandemic. The Company will continue to monitor the continuing impact of the pandemic on credit risks and losses, as well as on customer demand deposits and other liabilities and assets. As permitted under the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act"), the Company has chosen to defer the adoption of the Current Expected Credit Losses (CECL) methodology for estimated credit losses until the earlier of the date the U.S. government declares an end to the national emergency or December 31, 2020. The expected impact of CECL on the third quarter results, if CECL had been adopted, will be disclosed in the Company's Form 10-Q for the third quarter of 2020. The following table sets forth the charge-offs and recoveries for the periods indicated:

Three months ended Nine months ended September 30,

September 30, 2020 June 30, 2020 September 30, 2019 2020 2019

(In thousands) (Unaudited)

Charge-offs:

Commercial loans $ 6,956 $ 5,106 $ 3,356 $ 13,383 $ 6,300

Total charge-offs 6,956 5,106 3,356 13,383 6,300

Recoveries:

Commercial loans 3,796 1,350 212 6,354 1,609

Construction loans - - 3,378 - 4,612

Real estate loans^(1) 110 163 5,023 435 5,596

Total recoveries 3,906 1,513 8,613 6,789 11,817

Net charge-offs/(recoveries) $ 3,050 $ 3,593 $ (5,257) $ 6,594 $ (5,517)

(1) Real estate loans include commercial mortgage loans, residential mortgageloans, 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 $10.0 million for the third quarter of 2020, a decrease of $0.4 million, or 3.8%, compared to $10.4 million for the third quarter of 2019. The decrease was primarily due to a $2.0 million decrease in net gains from equity securities, and a decrease of $0.7 million from gain on sale of loans, offset in part by a $1.4 million increase in gain on low income housing investments, and a $0.6 million increase in wealth management fees, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense increased $10.4 million, or 15.9%, to $76.0 million in the third quarter of 2020 compared to $65.6 million in the same quarter a year ago. The increase in non-interest expense in the third quarter of 2020 was primarily due to an increase of $9.2 million in amortization expense of investments in low-income housing and alternative energy partnerships, an increase of $1.4 million in salaries and employee benefits and an increase of $1.0 million in provision for unfunded commitments offset, in part, by a decrease of $1.3 million in marketing expense, when compared to the same quarter a year ago. The efficiency ratio was 51.5% in the third quarter of 2020 compared to 41.7% for the same quarter a year ago.

Income taxes

The effective tax rate for the third quarter of 2020 was 3.7% compared to 22.4% for the third quarter of 2019. The effective tax rate includes an alternative energy investment made in the second quarter of 2020 and the impact of low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans, including loans held for sale, were $15.6 billion at September 30, 2020, an increase of $490.3 million, or 3.3%, from $15.1 billion at December 31, 2019. The increase was primarily due to $265.7 million in Paycheck Protection Loans and increases of $184.1 million, or 2.5%, in commercial mortgage loans, $81.3 million, or 2.0%, in residential mortgage loans, $63.9 million, or 18.4%, in equity lines and $95.2 million, or 16.4%, in real estate construction loans offset, in part, by a decrease of $196.5 million, or 7.1%, in commercial loans not including Paycheck Protection Loans. The loan balances and composition at September 30, 2020, compared to December 31, 2019 and September 30, 2019, are presented below:

September 30, 2020 December 31, 2019 September 30, 2019

(In thousands) (Unaudited)

Commercial $ 2,582,272 $ 2,778,744 $ 2,668,061loans

Paycheckprotection 265,728 - -programloans

Residentialmortgage 4,169,847 4,088,586 4,010,739loans

Commercialmortgage 7,459,316 7,275,262 7,135,599loans

Equity lines 411,848 347,975 315,252

Real estateconstruction 675,112 579,864 593,816loans

Installmentand other 1,656 5,050 5,087loans

Gross loans $ 15,565,779 $ 15,075,481 $ 14,728,554

Allowancefor loan (179,130) (123,224) (125,908)losses

Unamortizeddeferred (4,210) (626) (1,081)loan fees

Total loans, $ 15,382,439 $ 14,951,631 $ 14,601,565net

Loans held $ $ $ for sale - - 36,778

Total deposits were $16.0 billion at September 30, 2020, an increase of $1.3 billion, or 8.8%, from $14.7 billion at December 31, 2019. The increases in non-interest bearing demand deposits NOW deposits and money market deposits resulted from higher liquidity maintained by our depositors during these uncertain times and improved money market deposit generation from corporate accounts. The decreases in time deposits resulted primarily from the runoff of wholesale time deposits. The deposit balances and composition at September 30, 2020, compared to December 31, 2019 and September 30, 2019, are presented below:

September 30, 2020 December 31, 2019 September 30, 2019

(In thousands) (Unaudited)

Non-interest-bearing $ 3,306,421 $ 2,871,444 $ 2,939,924demand deposits

NOW deposits 1,767,227 1,358,152 1,282,267

Money market 3,227,359 2,260,764 2,095,328deposits

Savings deposits 784,076 758,903 721,547

Time deposits 6,949,165 7,443,045 7,619,203

Total deposits $ 16,034,248 $ 14,692,308 $ 14,658,269

ASSET QUALITY REVIEW

At September 30, 2020, total non-accrual loans were $77.2 million, an increase of $36.7 million, or 90.6%, from $40.5 million at December 31, 2019, and an increase of $30.0 million, or 63.6%, from $47.2 million at September 30, 2019. The increase was due primarily to two commercial real estate loans totaling $25.0 million that become non-accrual during the third quarter of 2020.

The allowance for loan losses was $179.1 million and the allowance for off-balance sheet unfunded credit commitments was $5.7 million at September 30, 2020, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments. The $179.1 million allowance for loan losses at September 30, 2020, increased $55.9 million, or 45.4%, from $123.2 million at December 31, 2019. This increase includes additional provisions for credit losses and reflects the deterioration in economic conditions related to the COVID-19 pandemic. The allowance for loan losses represented 1.15% of period-end gross loans, and 223.8% of non-performing loans at September 30, 2020. The comparable ratios were 0.82% of period-end gross loans, and 262.6% of non-performing loans at December 31, 2019. The changes in non-performing assets and troubled debt restructurings at September 30, 2020, compared to December 31, 2019 and September 30, 2019, are presented below:

(Dollars in thousands) (Unaudited) September 30, 2020 December 31, 2019 September 30, 2019 % %

Non-performing assets

Accruing loans past due 90 days or more $ 2,868 $ 6,409 (55) $ 683 320

Non-accrual loans:

Construction loans 4,335 4,580 (5) 4,629 (6)

Commercial mortgage loans 33,782 9,928 240 12,330 174

Commercial loans 29,757 19,381 54 22,970 30

Residential mortgage loans 9,317 6,634 40 7,271 28

Total non-accrual loans: $ 77,191 $ 40,523 90 $ 47,200 64

Total non-performing loans 80,059 46,932 71 47,883 67

Other real estate owned 4,918 10,244 (52) 11,329 (57)

Total non-performing assets $ 84,977 $ 57,176 49 $ 59,212 44

Accruing troubled debt restructurings (TDRs) $ 28,587 $ 35,336 (19) $ 41,647 (31)

Allowance for loan losses $ 179,130 $ 123,224 45 $ 125,908 42

Total gross loans outstanding, at period-end ^(1) $ 15,565,779 $ 15,075,481 3 $ 14,728,554 6

Allowance for loan losses to non-performing loans, at period-end ^(2) 223.75% 262.56% 262.95%

Allowance for loan losses to gross loans, at period-end ^(1) 1.15% 0.82% 0.85%

(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 to total assets was 0.4% at September 30, 2020, compared to 0.3% at December 31, 2019. Total non-performing assets increased $27.8 million, or 48.6%, to $85.0 million at September 30, 2020, compared to $57.2 million at December 31, 2019, primarily due to an increase of $36.7 million, or 90.6%, in nonaccrual loans, offset, in part, by a decrease of $5.3 million, or 52.0%, in other real estate owned and a decrease of $3.5 million, or 55.2%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

At September 30, 2020, the Company's Tier 1 risk-based capital ratio of 13.22%, total risk-based capital ratio of 15.23%, and Tier 1 leverage capital ratio of 10.51%, 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%. At December 31, 2019, the Company's Tier 1 risk-based capital ratio was 12.51%, total risk-based capital ratio was 14.11%, and Tier 1 leverage capital ratio was 10.83%.

YEAR-TO-DATE REVIEW

Net income for the nine months ended September 30, 2020, was $158.0 million, a decrease of $53.8 million, or 25.4%, compared to net income of $211.8 million for the same period a year ago. Diluted earnings per share was $1.98 compared to $2.64 per share for the same period a year ago. The net interest margin for the nine months ended September 30, 2020, was 3.12% compared to 3.61% for the same period a year ago.

Return on average stockholders' equity was 8.99% and return on average assets was 1.13% for the nine months ended September 30, 2020, compared to a return on average stockholders' equity of 12.94% and a return on average assets of 1.65% for the same period a year ago. The efficiency ratio for the nine months ended September 30, 2020, was 46.98% compared to 43.87% for the same period a year ago.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its third quarter 2020 financial results this afternoon, Monday, October 26, 2020, 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 8781217. 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, 2019 (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 BANCORPCONSOLIDATED FINANCIAL HIGHLIGHTS(Unaudited)

Three months ended Nine months ended September 30,

(Dollars inthousands, September 30, 2020 June 30, 2020 September 30, 2019 2020 2019except per sharedata)

FINANCIALPERFORMANCE

Net interestincome beforeprovision/ $ 137,504 $ 134,475 $ 147,000 $ 412,290 $ 433,695(reversal) forcreditlosses

Provision/(reversal) for 12,500 25,000 (2,000) 62,500 (2,000)credit losses

Net interestincome afterprovision/ 125,004 109,475 149,000 349,790 435,695(reversal) forcredit losses

Non-interest 9,977 15,606 10,388 31,369 36,103income

Non-interest 75,997 67,268 65,580 208,419 206,096expense

Income beforeincome tax 58,984 57,813 93,808 172,740 265,702expense

Income tax 2,190 3,492 20,973 14,773 53,944expense

Net income $ $ 54,321 $ $ 157,967 $ 211,758 56,794 72,835

Net income percommon share

Basic $ $ $ $ $ 2.64 0.71 0.68 0.91 1.98

Diluted $ $ $ $ $ 2.64 0.71 0.68 0.91 1.98

Cash dividends $ $ $ $ paid per common 0.31 0.31 0.31 0.93 $ 0.93share

SELECTED RATIOS

Return on 1.18% 1.15% 1.65% 1.13% 1.65%average assets

Return onaverage total 9.53% 9.31% 12.98% 8.99% 12.94%stockholders'equity

Efficiency ratio 51.53% 44.82% 41.67% 46.98% 43.87%

Dividend payout 43.46% 45.42% 33.92% 46.85% 35.14%ratio

YIELD ANALYSIS(Fully taxableequivalent)

Totalinterest-earning 3.78% 3.91% 4.80% 4.03% 4.82%assets

Totalinterest-bearing 1.04% 1.20% 1.65% 1.24% 1.62%liabilities

Net interest 2.74% 2.71% 3.15% 2.79% 3.20%spread

Net interest 3.02% 3.02% 3.56% 3.12% 3.61%margin

CAPITAL RATIOS September 30, 2020 December 31, 2019 September 30, 2019

Tier 1risk-based 13.22% 12.51% 12.41%capital ratio

Total risk-based 15.23% 14.11% 14.06%capital ratio

Tier 1 leverage 10.51% 10.83% 10.81%capital ratio

CATHAY GENERAL BANCORPCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)

(In thousands,except share and per September 30, 2020 December 31, 2019 September 30, 2019share data)

Assets

Cash and due from $ 128,896 $ 177,240 $ 257,189banks

Short-terminvestments and 1,305,170 416,538 567,957interest bearingdeposits

Securitiesavailable-for-sale(amortized cost of$1,060,975 atSeptember 30, 2020,

$1,443,730 atDecember 31, 2019 1,080,540 1,451,842 1,427,438and $1,422,431 atSeptember 30, 2019)

Loans held for sale - - 36,778

Loans 15,565,779 15,075,481 14,728,554

Less: Allowance for (179,130) (123,224) (125,908)loan losses

Unamortizeddeferred loan fees, (4,210) (626) (1,081)net

Loans, net 15,382,439 14,951,631 14,601,565

Equity securities 22,964 28,005 32,862

Federal Home Loan 17,250 18,090 17,250Bank stock

Other real estate 4,918 10,244 11,329owned, net

Affordable housinginvestments and 325,013 308,681 321,929alternative energypartnerships, net

Premises and 103,438 104,239 103,820equipment, net

Customers' liability 12,973 10,694 12,503on acceptances

Accrued interest 57,102 53,541 52,337receivable

Goodwill 372,189 372,189 372,189

Other intangible 5,631 6,296 6,821assets, net

Right-of-use assets- 32,591 33,990 34,518operating leases

Other assets 167,124 150,924 148,481

Total assets $ 19,018,238 $ 18,094,144 $ 18,004,966

Liabilities andStockholders' Equity

Deposits

Non-interest-bearing $ 3,306,421 $ 2,871,444 $ 2,939,924demand deposits

Interest-bearingdeposits:

NOW deposits 1,767,227 1,358,152 1,282,267

Money market 3,227,359 2,260,764 2,095,328deposits

Savings deposits 784,076 758,903 721,547

Time deposits 6,949,165 7,443,045 7,619,203

Total deposits 16,034,248 14,692,308 14,658,269

Short-term - 25,683 -borrowings

Advances from theFederal Home Loan 230,000 670,000 600,000Bank

Other borrowings foraffordable housing 23,788 29,022 30,767investments

Long-term debt 119,136 119,136 160,386

Deferred payments - 7,644 7,602from acquisition

Acceptances 12,973 10,694 12,503outstanding

Lease liabilities - 35,116 35,873 36,142operating leases

Other liabilities 188,254 209,501 253,403

Total liabilities 16,643,515 15,799,861 15,759,072

Stockholders' equity 2,374,723 2,294,283 2,245,894

Total liabilities $ 19,018,238 $ 18,094,144 $ 18,004,966and equity

Book value per $ 29.81 $ 28.78 $ 28.18common share

Number of common 79,659,396 79,729,419 79,706,511shares outstanding

CATHAY GENERAL BANCORPCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

Three months ended Nine months ended September 30,

September 30, 2020 June 30, 2020 September 30, 2019 2020 2019

(In thousands, except share and per share data)

INTERESTAND DIVIDENDINCOME

Loanreceivable, $ 167,556 $ 168,149 $ 187,827 $ 513,575 $ 548,395includingloan fees

Investment 4,115 5,405 8,687 17,130 24,454securities

Federal HomeLoan Bank 216 214 301 735 903stock

Deposits 347 240 1,016 1,538 4,289with banks

Totalinterest and 172,234 174,008 197,831 532,978 578,041dividendincome

INTERESTEXPENSE

Time 26,247 30,811 40,378 92,213 113,992deposits

Other 5,761 5,919 6,626 19,671 17,591deposits

Advancesfrom Federal 1,251 1,316 1,661 4,119 5,976Home LoanBank

Long-term 1,456 1,440 1,948 4,336 6,087debt

Deferredpayments 15 42 93 115 502fromacquisition

Short-term - 5 125 234 198borrowings

Totalinterest 34,730 39,533 50,831 120,688 144,346expense

Net interestincomebeforeprovision/ 137,504 134,475 147,000 412,290 433,695(reversal)for creditlosses

Provision/(reversal) 12,500 25,000 (2,000) 62,500 (2,000)for creditlosses

Net interestincome afterprovision/ 125,004 109,475 149,000 349,790 435,695(reversal)for creditlosses

NON-INTERESTINCOME

Net (losses)/gains from (1,605) 5,779 364 (1,928) 7,764equitysecurities

Securitiesgains/ - 1,147 (121) 1,153 (108)(losses),net

Letters ofcredit 1,792 1,560 1,602 4,992 4,733commissions

Depository 1,263 1,117 1,119 3,678 3,617service fees

Otheroperating 8,527 6,003 7,424 23,474 20,097income

Totalnon-interest 9,977 15,606 10,388 31,369 36,103income

NON-INTERESTEXPENSE

Salaries andemployee 33,341 28,197 31,915 92,477 97,200benefits

Occupancy 5,295 4,963 5,579 15,435 16,617expense

Computer andequipment 3,044 2,581 2,741 8,218 8,453expense

Professionalservices 5,241 5,200 5,952 15,586 17,209expense

Dataprocessing 3,772 3,566 3,246 11,004 9,737serviceexpense

FDIC andState 1,993 2,446 2,582 6,854 7,190assessments

Marketing 1,089 915 2,436 3,890 5,556expense

Other realestate owned 423 452 190 (3,229) 839expense/(income)

Amortizationofinvestmentsin lowincome 16,173 12,934 6,997 42,997 26,909housing and alternativeenergypartnerships

Amortizationof core 172 171 172 515 515depositintangibles

Otheroperating 5,454 5,843 3,770 14,672 15,871expense

Totalnon-interest 75,997 67,268 65,580 208,419 206,096expense

Incomebefore 58,984 57,813 93,808 172,740 265,702income taxexpense

Income tax 2,190 3,492 20,973 14,773 53,944expense

Net income $ 56,794 $ 54,321 $ 72,835 $ 157,967 $ 211,758

Net incomeper commonshare:

Basic $ 0.71 $ 0.68 $ 0.91 $ 1.98 $ 2.64

Diluted $ 0.71 $ 0.68 $ 0.91 $ 1.98 $ 2.64

Cashdividends $ 0.31 $ 0.31 $ 0.31 $ 0.93 $ 0.93paid percommon share

Basicaveragecommon 79,628,372 79,581,097 79,736,814 79,599,288 80,096,855sharesoutstanding

Dilutedaveragecommon 79,764,318 79,682,426 79,993,830 79,758,943 80,330,616sharesoutstanding

CATHAY GENERAL BANCORPAVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION(Unaudited)

Three months ended

(In thousands) September 30, 2020 June 30, 2020 September 30, 2019

Average Average AverageInterest-earning Average Balance Yield/ Average Yield/ Average Yield/assets Rate ^ Balance Rate ^ Balance Rate ^ (1) (1) (1)

Loans ^(1) $ 15,592,536 4.28% $ 15,626,412 4.33% $ 14,662,847 5.08%

Taxable investment 1,145,092 1.43% 1,268,661 1.71% 1,498,569 2.30%securities

FHLB stock 17,250 4.99% 17,434 4.95% 17,250 6.92%

Deposits with banks 1,385,535 0.10% 980,949 0.10% 188,772 2.14%

Totalinterest-earning $ 18,140,413 3.78% $ 17,893,456 3.91% $ 16,367,438 4.80%assets

Interest-bearingliabilities

Interest-bearing $ 1,695,882 0.17% $ 1,586,112 0.19% $ 0.18%demand deposits 1,281,629

Money market 3,119,091 0.62% 2,756,493 0.72% 2,028,039 1.11%deposits

Savings deposits 766,521 0.11% 740,500 0.14% 726,763 0.19%

Time deposits 7,281,403 1.43% 7,616,446 1.63% 7,623,238 2.10%

Totalinterest-bearing $ 12,862,897 0.99% $ 12,699,551 1.16% $ 11,659,669 1.60%deposits

Other borrowed funds 263,306 1.91% 412,953 1.33% 362,698 2.05%

Long-term debt 119,136 4.86% 119,136 4.86% 165,023 4.68%

Totalinterest-bearing 13,245,339 1.04% 13,231,640 1.20% 12,187,390 1.65%liabilities

Non-interest-bearing 3,301,253 3,101,265 2,805,582demand deposits

Total deposits and $ 16,546,592 $ 16,332,905 $ 14,992,972other borrowed funds

Total average assets $ 19,164,220 $ 18,930,651 $ 17,483,376

Total average equity $ 2,370,817 $ 2,346,775 $ 2,226,591

Nine months ended

(In thousands) September 30, 2020 September 30, 2019

Average AverageInterest-earning Average Balance Yield/ Average Yield/assets Rate ^ Balance Rate ^ (1) (1)

Loans ^(1) $ 15,477,883 4.43% $ 14,374,397 5.10%

Taxable investment 1,263,937 1.81% 1,404,046 2.33%securities

FHLB stock 17,317 5.67% 17,268 6.99%

Deposits with banks 894,302 0.23% 245,971 2.33%

Totalinterest-earning $ 17,653,439 4.03% $ 16,041,682 4.82%assets

Interest-bearingliabilities

Interest-bearing $ 1,557,371 0.19% $ 1,285,180 0.18%demand deposits

Money market 2,772,463 0.81% 1,933,898 1.02%deposits

Savings deposits 746,870 0.14% 725,257 0.20%

Time deposits 7,463,821 1.65% 7,421,255 2.05%

Totalinterest-bearing $ 12,540,525 1.19% $ 11,365,590 1.55%deposits

Other borrowed funds 355,758 1.68% 392,483 2.27%

Long-term debt 119,136 4.86% 172,567 4.72%

Totalinterest-bearing 13,015,419 1.24% 11,930,640 1.62%liabilities

Non-interest-bearing 3,089,578 2,790,367demand deposits

Total deposits and $ 16,104,997 $ 14,721,007other borrowed funds

Total average assets $ 18,701,000 $ 17,153,196

Total average equity $ 2,346,049 $ 2,187,621

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

View original content to download multimedia: http://www.prnewswire.com/news-releases/cathay-general-bancorp-announces-third-quarter-2020-results-301159918.html

SOURCE Cathay General Bancorp