8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 27, 2020

CATHAY GENERAL BANCORP
(Exact name of registrant as specified in its charter)

Delaware	001-31830	95-4274680
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

777 North Broadway, Los Angeles, California	90012
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 625-4700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	CATY	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operations and Financial Condition.

On July 27, 2020, Cathay General Bancorp (the “Company”) announced, in a press release, its financial results for the quarter ended June 30, 2020. That press release is attached hereto as Exhibit 99.1.

Item 7.01.Regulation FD Disclosure

As announced in the press release attached hereto as Exhibit 99.1, the Company will host a conference call on Monday, July 27, 2020 at 3:00 p.m. Pacific Time to discuss its second quarter 2020 financial results.  A presentation to accompany the conference call, which contains certain historical and forward-looking information relating to the Company (the “Presentation Materials”), has been made available on its website at www.cathaygeneralbancorp.com. A copy of the Presentation Materials is attached hereto as Exhibit 99.2.

The information included in this report pursuant to Item 2.02 and Item 7.01 of Form 8-K (including Exhibit 99.1 and Exhibit 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

99.1Press Release of Cathay General Bancorp, dated July 27, 2020

99.2Presentation Materials, dated July 27, 2020

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  July 27, 2020

CATHAY GENERAL BANCORP

By:	/s/ Heng W. Chen
	Heng W. Chen
	Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Cathay General Bancorp Announces Second Quarter 2020 Results

LOS ANGELES, July 27, 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 June 30, 2020. The Company reported net income of $54.3 million, or $0.68 per share, for the second quarter of 2020.

FINANCIAL PERFORMANCE

	Three months ended
(unaudited)	June 30, 2020	March 31, 2020	June 30, 2019
Net income	$54.3 million	$46.9 million	$72.2 million
Basic earnings per common share	$0.68	$0.59	$0.90
Diluted earnings per common share	$0.68	$0.59	$0.90
Return on average assets	1.15%	1.05%	1.69%
Return on average total stockholders' equity	9.31%	8.12%	13.27%
Efficiency ratio	44.82%	44.60%	44.53%

SECOND QUARTER HIGHLIGHTS

• Total deposits increased for the quarter by $1.2 billion, or 7.9%, to $16.3 billion.

"For the second quarter of 2020, our total deposits increased $1.2 billion, or 31.6% annualized, to $16.3 billion, with the majority of the increase in core deposits. This strong growth in deposits reflects Cathay's commitment to serve the financial needs of our customers during this challenging time," commented Pin Tai, Chief Executive Officer of the Company.

SECOND QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended June 30, 2020, was $54.3 million, a decrease of $17.9 million, or 24.8%, compared to net income of $72.2 million for the same quarter a year ago. Diluted earnings per share for the quarter ended June 30, 2020, was $0.68 per share compared to $0.90 per share for the same quarter a year ago.

Return on average stockholders' equity was 9.31% and return on average assets was 1.15% for the quarter ended June 30, 2020, compared to a return on average stockholders' equity of 13.27% and a return on average assets of 1.69% for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $8.9 million, or 6.2%, to $134.5 million during the second quarter of 2020, compared to $143.4 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 second quarter of 2020 compared to 3.58% for the second quarter of 2019 and 3.34% for the first quarter of 2020.

For the second quarter of 2020, the yield on average interest-earning assets was 3.91%, the cost of funds on average interest-bearing liabilities was 1.20%, and the cost of interest-bearing deposits was 1.16%. In comparison, for the second quarter of 2019, the yield on average interest-earning assets was 4.81%, the cost of funds on average interest-bearing liabilities was 1.65%, and the cost of interest-bearing deposits was 1.58%. 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 2.71% for the quarter ended June 30, 2020, compared to 3.16% for the same quarter a year ago.

Provision for credit losses

Based on a review of the appropriateness of the allowance for loan losses at June 30, 2020, the Company recorded a provision for credit losses of $25.0 million in second quarter of 2020 compared to no provision for credit losses in the second 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 US government declares an end to the national emergency or December 31, 2020. The expected impact of CECL on second quarter results, if CECL had been adopted, will be disclosed in our Form 10-Q for the second quarter of 2020. The following table sets forth the charge-offs and recoveries for the periods indicated:

	Three months ended			Six months ended June 30,
	June 30, 2020	March 31, 2020	June 30, 2019	2020	2019
	(In thousands) (Unaudited)
Charge-offs:
Commercial loans	$            5,106	$              1,321	$            1,713	$6,427	$2,944
Total charge-offs	5,106	1,321	1,713	6,427	2,944
Recoveries:
Commercial loans	1,350	1,208	1,356	2,558	1,397
Construction loans	—	—	30	—	1,074
Real estate loans(1)	163	162	423	325	733
Total recoveries	1,513	1,370	1,809	2,883	3,204
Net charge-offs/(recoveries)	$            3,593	$                 (49)	$               (96)	$3,544	$ (260)

(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 $15.6 million for the second quarter of 2020, an increase of $2.8 million, or 21.9%, compared to $12.8 million for the second quarter of 2019. The increase was primarily due to a $2.5 million increase in net gains from equity securities, and an increase of $1.1 million from the gain on sale of mortgage backed securities, offset in part by a $682.1 thousand decrease in the valuation of interest rate swap contracts, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense decreased $2.2 million, or 3.2%, to $67.3 million in the second quarter of 2020 compared to $69.5 million in the same quarter a year ago. The decrease in non-interest expense in the second quarter of 2020 was primarily due to a $5.0 million decrease in salaries and employee benefits resulting from lower bonus accruals and an increase in salaries capitalized for loan originations offset in part by an increase of $3.8 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 44.8% in the second quarter of 2020 compared to 44.5% for the same quarter a year ago.

Income taxes

The effective tax rate for the second quarter of 2020 was 6.0% compared to 16.6% for the second 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 were $15.6 billion at June 30, 2020, an increase of $532.8 million, or 3.5%, from $15.1 billion at December 31, 2019. The increase was primarily due to $261.7 million in Paycheck Protection Loans and increases of $116.2 million, or 1.6%, in commercial mortgage loans, $96.1 million, or 2.4%, in residential mortgage loans, $51.2 million, or 14.7%, in equity lines and $44.3 million, or 7.6%, in real estate construction loans. The loan balances and composition at June 30, 2020, compared to December 31, 2019 and June 30, 2019, are presented below:

	June 30, 2020	December 31, 2019	June 30, 2019
	(In thousands) (Unaudited)
Commercial loans	$     2,746,316	$               2,778,744	$     2,772,982
Paycheck protection program loans	261,650	—	—
Residential mortgage loans	4,184,721	4,088,586	3,967,135
Commercial mortgage loans	7,391,502	7,275,262	6,945,562
Equity lines	399,207	347,975	302,351
Real estate construction loans	624,199	579,864	598,849
Installment and other loans	688	5,050	6,631
Gross loans	$   15,608,283	$             15,075,481	$   14,593,510
Allowance for loan losses	(169,680)	(123,224)	(122,651)
Unamortized deferred loan fees	(4,507)	(626)	(1,415)
Total loans, net	$   15,434,096	$             14,951,631	$   14,469,444

Total deposits were $16.3 billion at June 30, 2020, an increase of $1.6 billion, or 10.9%, from $14.7 billion at December 31, 2019. The increases in non-interest bearing demand deposits and money market deposits resulted from higher liquidity maintained by our depositors during these uncertain times, unused funds still in demand deposit accounts from payroll protection program loans and improved money market deposit generation from corporate accounts. The deposit balances and composition at June 30, 2020, compared to December 31, 2019 and June 30, 2019, are presented below:

	June 30, 2020	December 31, 2019	June 30, 2019
	(In thousands) (Unaudited)
Non-interest-bearing demand deposits	$     3,298,415	$               2,871,444	$     2,758,344
NOW deposits	1,671,290	1,358,152	1,267,464
Money market deposits	2,982,385	2,260,764	1,909,097
Savings deposits	743,982	758,903	716,206
Time deposits	7,585,832	7,443,045	7,711,811
Total deposits	$   16,281,904	$             14,692,308	$   14,362,922

ASSET QUALITY REVIEW

At June 30, 2020, total non-accrual loans were $56.5 million, an increase of $16.0 million, or 39.5%, from $40.5 million at December 31, 2019, and an increase of $1.8 million, or 3.3%, from $54.7 million at June 30, 2019 due primarily to a $11.7 million commercial loan.

The allowance for loan losses was $169.7 million and the allowance for off-balance sheet unfunded credit commitments was $4.7 million at June 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 $169.7 million allowance for loan losses at June 30, 2020, increased $46.5 million, or 37.7%, 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 COVID-19 and an increase in specific reserves of $4.3 million. The allowance for loan losses represented 1.09% of period-end gross loans, and 218.0% of non-performing loans at June 30, 2020. The comparable ratios were 0.82% of period-end gross loans, and 262.6% of non-performing loans at December 31, 2019. Accruing loans past due 90 days or more at June 30, 2020 have been reduced to $3.1 million as of July 27, 2020 due to the completion of loan renewals. The changes in non-performing assets and troubled debt restructurings at June 30, 2020, compared to December 31, 2019 and June 30, 2019, are presented below:

(Dollars in thousands) (Unaudited)	June 30, 2020	December 31, 2019	% Change	June 30, 2019	% Change
Non-performing assets
Accruing loans past due 90 days or more	$          21,374	$                      6,409	233	$          14,469	48
Non-accrual loans:
Construction loans	4,433	4,580	(3)	4,702	(6)
Commercial mortgage loans	10,896	9,928	10	14,515	(25)
Commercial loans	27,125	19,381	40	28,070	(3)
Residential mortgage loans	14,004	6,634	111	7,461	88
Total non-accrual loans:	$          56,458	$                   40,523	39	$          54,748	3
Total non-performing loans	77,832	46,932	66	69,217	12
Other real estate owned	7,318	10,244	(29)	11,329	(35)
Total non-performing assets	$          85,150	$                   57,176	49	$          80,546	6
Accruing troubled debt restructurings (TDRs)	$          31,671	$                   35,336	(10)	$          64,898	(51)
Allowance for loan losses	$        169,680	$                  123,224	38	$        122,651	38
Total gross loans outstanding, at period-end	$   15,608,283	$             15,075,481	4	$   14,593,510	7
Allowance for loan losses to non-performing loans, at period-end	218.01%	262.56%		177.20%
Allowance for loan losses to gross loans, at period-end	1.09%	0.82%		0.84%

The ratio of non-performing assets to total assets was 0.4% at June 30, 2020, compared to 0.3% at December 31, 2019. Total non-performing assets increased $28.0 million, or 49.0%, to $85.2 million at June 30, 2020, compared to $57.2 million at December 31, 2019, primarily due to an increase of $15.0 million, or 233.5%, in loans 90 days or more past due and still accruing and an increase of $15.9 million, or 39.3%, in nonaccrual loans, offset in part by a decrease of $2.9 million, or 28.6%, in other real estate owned.

CAPITAL ADEQUACY REVIEW

At June 30, 2020, the Company's Tier 1 risk-based capital ratio of 12.88%, total risk-based capital ratio of 14.81%, and Tier 1 leverage capital ratio of 10.46%, 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 six months ended June 30, 2020, was $101.2 million, a decrease of $37.7 million, or 27.1%, compared to net income of $138.9 million for the same period a year ago. Diluted earnings per share was $1.27 compared to $1.73 per share for the same period a year ago. The net interest margin for the six months ended June 30, 2020, was 3.17% compared to 3.64% for the same period a year ago.

Return on average stockholders' equity was 8.72% and return on average assets was 1.10% for the six months ended June 30, 2020, compared to a return on average stockholders' equity of 12.92% and a return on average assets of 1.65% for the same period a year ago. The efficiency ratio for the six months ended June 30, 2020, was 44.71% compared to 44.98% for the same period a year ago.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its second quarter 2020 financial results this afternoon, Monday, July 27, 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 7670941. 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 found at www.cathaybank.com. Cathay General Bancorp's website is found 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 BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
	Three months ended			Six months ended June 30,
(Dollars in thousands, except per share data)	June 30, 2020	March 31, 2020	June 30, 2019	2020	2019
FINANCIAL PERFORMANCE
Net interest income before provision for credit losses	$       134,475	$                 140,311	$       143,379	$274,786	$286,695
Provision for credit losses	25,000	25,000	—	50,000	—
Net interest income after provision for credit losses	109,475	115,311	143,379	224,786	286,695
Non-interest income	15,606	5,786	12,794	21,392	25,715
Non-interest expense	67,268	65,154	69,546	132,422	140,516
Income before income tax expense	57,813	55,943	86,627	113,756	171,894
Income tax expense	3,492	9,091	14,383	12,583	32,971
Net income	$         54,321	$                  46,852	$         72,244	$101,173	$138,923
Net income per common share
Basic	$             0.68	$                      0.59	$             0.90	$      1.27	$      1.73
Diluted	$             0.68	$                      0.59	$             0.90	$      1.27	$      1.73
Cash dividends paid per common share	$             0.31	$                      0.31	$             0.31	$      0.62	$      0.62
SELECTED RATIOS
Return on average assets	1.15%	1.05%	1.69%	1.10%	1.65%
Return on average total stockholders' equity	9.31%	8.12%	13.27%	8.72%	12.92%
Efficiency ratio	44.82%	44.60%	44.53%	44.71%	44.98%
Dividend payout ratio	45.42%	52.63%	34.26%	48.76%	35.79%
YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets	3.91%	4.44%	4.81%	4.17%	4.83%
Total interest-bearing liabilities	1.20%	1.49%	1.65%	1.34%	1.60%
Net interest spread	2.71%	2.95%	3.16%	2.83%	3.23%
Net interest margin	3.02%	3.34%	3.58%	3.17%	3.64%
CAPITAL RATIOS	June 30, 2020	December 31, 2019	June 30, 2019
Tier 1 risk-based capital ratio	12.88%	12.51%	12.26%
Total risk-based capital ratio	14.81%	14.11%	13.92%
Tier 1 leverage capital ratio	10.46%	10.83%	10.73%
	.			.

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)	June 30, 2020	December 31, 2019	June 30, 2019
Assets
Cash and due from banks	$          148,700	$                    177,240	$          206,123
Short-term investments and interest bearing deposits	1,425,001	416,538	351,603
Securities available-for-sale (amortized cost of $1,122,994 at June 30, 2020,
$1,443,730 at December 31, 2019 and $1,468,452 at June 30, 2019)	1,146,102	1,451,842	1,471,584
Loans	15,608,283	15,075,481	14,593,510
Less:  Allowance for loan losses	(169,680)	(123,224)	(122,651)
Unamortized deferred loan fees, net	(4,507)	(626)	(1,415)
Loans, net	15,434,096	14,951,631	14,469,444
Equity securities	24,570	28,005	32,498
Federal Home Loan Bank stock	17,250	18,090	17,250
Other real estate owned, net	7,318	10,244	11,329
Affordable housing investments and alternative energy partnerships, net	320,047	308,681	301,410
Premises and equipment, net	104,165	104,239	102,919
Customers' liability on acceptances	10,665	10,694	9,616
Accrued interest receivable	54,326	53,541	55,711
Goodwill	372,189	372,189	372,189
Other intangible assets, net	6,030	6,296	6,782
Right-of-use assets- operating leases	34,217	33,990	36,515
Other assets	162,361	150,924	161,033
Total assets	$      19,267,037	$                   18,094,144	$      17,606,006
Liabilities and Stockholders' Equity
Deposits
Non-interest-bearing demand deposits	$       3,298,415	$                 2,871,444	$       2,758,344
Interest-bearing deposits:
NOW deposits	1,671,290	1,358,152	1,267,464
Money market deposits	2,982,385	2,260,764	1,909,097
Savings deposits	743,982	758,903	716,206
Time deposits	7,585,832	7,443,045	7,711,811
Total deposits	16,281,904	14,692,308	14,362,922
Short-term borrowings	—	25,683	—
Advances from the Federal Home Loan Bank	230,000	670,000	550,000
Other borrowings for affordable housing investments	32,399	29,022	30,820
Long-term debt	119,136	119,136	169,761
Deferred payments from acquisition	7,753	7,644	18,843
Acceptances outstanding	10,665	10,694	9,616
Lease liabilities - operating leases	36,408	35,873	37,858
Other liabilities	206,324	209,501	226,889
Total liabilities	16,924,589	15,799,861	15,406,709
Stockholders' equity	2,342,448	2,294,283	2,199,297
Total liabilities and equity	$     19,267,037	$               18,094,144	$     17,606,006
Book value per common share	$             29.42	$                       28.78	$             27.55
Number of common shares outstanding	79,619,984	79,729,419	79,818,003

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three months ended			Six months ended June 30,
	June 30, 2020	March 31, 2020	June 30, 2019	2020	2019
	(In thousands, except share and per share data)
INTEREST AND  DIVIDEND INCOME
Loan receivable, including loan fees	$       168,149	$          177,870	$       182,291	$   346,019	$   360,568
Investment securities	5,405	7,610	8,477	13,015	15,767
Federal Home Loan Bank stock	214	305	298	519	602
Deposits with banks	240	951	1,383	1,191	3,273
Total interest and dividend income	174,008	186,736	192,449	360,744	380,210
INTEREST EXPENSE
Time deposits	30,811	35,155	39,491	65,966	73,614
Other deposits	5,919	7,991	5,588	13,910	10,965
Advances from Federal Home Loan Bank	1,316	1,552	1,725	2,868	4,315
Long-term debt	1,440	1,440	2,007	2,880	4,139
Deferred payments from acquisition	42	58	192	100	409
Short-term borrowings	5	229	67	234	73
Total interest expense	39,533	46,425	49,070	85,958	93,515
Net interest income before provision for credit losses	134,475	140,311	143,379	274,786	286,695
Provision for credit losses	25,000	25,000	-	50,000	-
Net interest income after provision for credit losses	109,475	115,311	143,379	224,786	286,695
NON-INTEREST INCOME
Net gains/(losses) from equity securities	5,779	(6,102)	3,237	(323)	7,400
Securities gains, net	1,147	6	13	1,153	13
Letters of credit commissions	1,560	1,640	1,577	3,200	3,131
Depository service fees	1,117	1,298	1,243	2,415	2,498
Other operating income	6,003	8,944	6,724	14,947	12,673
Total non-interest income	15,606	5,786	12,794	21,392	25,715
NON-INTEREST EXPENSE
Salaries and employee benefits	28,197	30,939	33,153	59,136	65,285
Occupancy expense	4,963	5,177	5,489	10,140	11,038
Computer and equipment expense	2,581	2,593	2,833	5,174	5,712
Professional services expense	5,200	5,145	6,000	10,345	11,257
Data processing service expense	3,566	3,666	3,081	7,232	6,491
FDIC and State assessments	2,446	2,415	2,132	4,861	4,608
Marketing expense	915	1,886	979	2,801	3,120
Other real estate owned expense/(income)	452	(4,104)	369	(3,652)	649
Amortization of investments in low income housing and   alternative energy partnerships	12,934	13,890	9,102	26,824	19,912
Amortization of core deposit intangibles	171	172	171	343	343
Other operating expense	5,843	3,375	6,237	9,218	12,101
Total non-interest expense	67,268	65,154	69,546	132,422	140,516
Income before income tax expense	57,813	55,943	86,627	113,756	171,894
Income tax expense	3,492	9,091	14,383	12,583	32,971
Net income	$         54,321	$           46,852	$         72,244	$   101,173	$   138,923
Net income per common share:
Basic	$            0.68	$               0.59	$            0.90	$        1.27	$        1.73
Diluted	$            0.68	$               0.59	$            0.90	$        1.27	$        1.73
Cash dividends paid per common share	$            0.31	$               0.31	$            0.31	$        0.62	$        0.62
Basic average common shares outstanding	79,581,097	79,588,076	80,106,329	79,584,587	80,279,859
Diluted average common shares outstanding	79,682,426	79,830,025	80,302,679	79,756,226	80,501,800

CATHAY GENERAL BANCORP AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
	Three months ended
(In thousands)	June 30, 2020		March 31, 2020		June 30, 2019
Interest-earning assets	Average Balance	Average Yield/Rate (1)	Average Balance	Average Yield/Rate (1)	Average Balance	Average Yield/Rate (1)
Loans (1)	$15,626,412	4.33%	$15,213,440	4.70%	$14,365,544	5.09%
Taxable investment securities	1,268,661	1.71%	1,379,365	2.22%	1,441,005	2.36%
FHLB stock	17,434	4.95%	17,268	7.09%	17,250	6.93%
Deposits with banks	980,949	0.10%	311,024	1.23%	235,019	2.36%
Total interest-earning assets	$17,893,456	3.91%	$16,921,097	4.44%	$16,058,818	4.81%
Interest-bearing liabilities
Interest-bearing demand deposits	$  1,586,112	0.19%	$  1,388,597	0.21%	$  1,265,105	0.18%
Money market deposits	2,756,493	0.72%	2,437,997	1.15%	1,857,384	1.00%
Savings deposits	740,500	0.14%	733,372	0.18%	731,512	0.20%
Time deposits	7,616,446	1.63%	7,495,619	1.89%	7,570,131	2.09%
Total interest-bearing deposits	$12,699,551	1.16%	$12,055,585	1.44%	$11,424,132	1.58%
Other borrowed funds	412,953	1.33%	392,029	1.89%	353,799	2.25%
Long-term debt	119,136	4.86%	119,136	4.86%	169,761	4.74%
Total interest-bearing liabilities	13,231,640	1.20%	12,566,750	1.49%	11,947,692	1.65%
Non-interest-bearing demand deposits	3,101,265		2,863,889		2,789,644
Total deposits and other borrowed funds	$16,332,905		$15,430,639		$14,737,336
Total average assets	$18,930,651		$18,003,041		$17,157,578
Total average equity	$  2,346,775		$  2,320,283		$  2,184,251
	Six months ended
(In thousands)	June 30, 2020		June 30, 2019
Interest-earning assets	Average Balance	Average Yield/Rate (1)	Average Balance	Average Yield/Rate (1)
Loans (1)	$15,419,926	4.51%	$14,227,782	5.11%
Taxable investment securities	1,324,013	1.98%	1,356,001	2.34%
FHLB stock	17,352	6.02%	17,277	7.03%
Deposits with banks	645,986	0.37%	275,044	2.40%
Total interest-earning assets	$17,407,277	4.17%	$15,876,104	4.83%
Interest-bearing liabilities
Interest-bearing demand deposits	$  1,487,354	0.20%	$  1,286,985	0.19%
Money market deposits	2,597,245	0.92%	1,886,048	0.97%
Savings deposits	736,936	0.16%	724,492	0.20%
Time deposits	7,556,033	1.76%	7,318,590	2.03%
Total interest-bearing deposits	$12,377,568	1.30%	$11,216,115	1.52%
Other borrowed funds	402,491	1.60%	407,622	2.37%
Long-term debt	119,136	4.86%	176,401	4.73%
Total interest-bearing liabilities	12,899,195	1.34%	11,800,138	1.60%
Non-interest-bearing demand deposits	2,982,577		2,782,633
Total deposits and other borrowed funds	$15,881,772		$14,582,771
Total average assets	$18,466,846		$16,985,370
Total average equity	$  2,333,529		$  2,167,812

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

CONTACT: Heng W. Chen, Cathay General Bancorp, (626) 279-3652

EX-99.2

Financial Earnings Results. Second Quarter 2020 July 27, 2020 Exhibit 99.2

Forward Looking Statements This presentation contains forward-looking statements about Cathay General Bancorp and its subsidiaries (collectively referred to herein as the “Company,” “we,” “us,” or “our”) within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements in these provisions. Statements that are not historical or current facts, including statements about beliefs, expectations and future economic performance, are “forward-looking statements” and are based on the information available to, and estimates, beliefs, projections, and assumptions made by, management as of the date on which such statements are first made. Forward-looking statements are not guarantees of future performance and are subject to inherent risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. These risks and uncertainties include, but are not limited to: local, regional, national and international business, market and economic conditions and events and the impact they may have on us, our customers and our operations, assets and liabilities; the impact on our business, operations, financial condition, liquidity, results of operations, prospects and trading prices of our shares arising out of the COVID-19 pandemic; 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 supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation; 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 generate anticipated returns from our investments and/or financings in certain tax advantaged-projects; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; natural disasters, public health crises (including the occurrence of a contagious disease or illness, such as the COVID-19 pandemic) and geopolitical events; failures, interruptions, or security breaches of our information systems; our ability to adapt our systems to the expanding use of technology in banking; adverse results in legal proceedings; 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; capital level requirements and successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; and the soundness of other financial institutions. For a discussion of these and other risks that may cause actual results to differ from expectations, please see our Annual Report on Form 10-K (at Item 1A in particular) for the year ended December 31, 2019 and all subsequent reports and filings we make with the Securities and Exchange Commission under the applicable provisions of the Securities Exchange Act of 1934. 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 first made and, except as required by law, we undertake no obligation to update or review any forward-looking statements to reflect circumstances, developments or events occurring after the date on which the statement is first made or to reflect the occurrence of unanticipated events. The information in this presentation may include financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our management uses these non-GAAP measures in its analysis of the Company’s performance. We believe that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of our businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Financial Highlights 2Q 2020 As of June 30, 2020 Net Income $54.3 million Diluted EPS $0.68 Total Revenue $150.1 million Total Loans $15.6 billion Total Deposits $16.3 billion Efficiency Ratio 44.82%

Summary Balance Sheet Note: Information as of 6.30.20 and 6.30.19 are unaudited. $ in millions, except per share data 6.30.20 12.31.19 Change 6.30.19 YoY Change Cash equivalents & ST investments $1,574 $594 1.6498316498316499 $558 1.8207885304659499 AFS debt securities 1146 1452 -0.21074380165289255 1472 -0.22146739130434784 Gross loans, net of discounts $15,604 $15,075 3.5091210613598676E-2 $14,592 6.9353070175438597E-2 Allowance for credit losses -170 -123 0.38211382113821141 -123 0.38211382113821141 Net Loans $15,434 $14,952 3.2236490101658639E-2 $14,469 6.6694311977330847E-2 Other assets 1113 1096 1.5510948905109489E-2 1107 5.4200542005420054E-3 Total Assets $19,267 $18,094 6.4828119818724439E-2 $17,606 9.4342837668976484E-2 Customer deposits $16,282 $14,692 0.1082221617206643 $14,363 0.13360718512845507 Short-term borrowings 0 26 -1 0 0 Debt 382 818 -0.5330073349633252 751 -0.49134487350199735 Other Liabilities 261 264 -1.1363636363636364E-2 293 -0.10921501706484642 Total Liabilities $16,925 $15,800 7.1202531645569625E-2 $15,407 9.8526643733367947E-2 Total Stockholders' Equity $2,342 $2,294 2.0924149956408022E-2 $2,199 6.5029558890404723E-2

2Q 2020 Loan Composition Total Loan Portfolio $15.6 billion as of 6.30.20 * Residential Mortgage includes equity lines, installment and other loans. Total CRE $7.4 billion Residential Mortgage $4.6 billion C & I Loans $2.7 billion Paycheck Protection Program $262 million Construction loans $0.6 billion

2Q 2020: Commercial Real Estate Portfolio Total CRE $7.4 billion 47% of total loans * Residential Mortgage includes equity lines, installment and other loans.

LTV & Size by Property Type 2Q 2020: Commercial Real Estate Portfolio $ in millions Total CRE Loan Portfolio Total CREWeighted Avg. LTV COVID CRE Loan Modification COVID Weighted Avg. LTV Residental $1,958 0.52761546058984699 $135 0.5457874902150367 Retail $1,746 0.50427213797515213 $511 0.5205082912885205 Office $1,393 0.49667111895286586 $243 0.51301575238290598 Warehouse $897 0.50096037965501194 $76 0.47553130769260854 Industrial $400 0.49014852434276418 $34 0.47749639544436689 Special Use $399 0.50242368959640893 $73 0.4953980049069534 Hotel / Motel $296 0.48323196535636098 $151 0.47690034910144535 Restaurant $169 0.48208925450458689 $21 0.52288461345744164 Land $109 0.4795746770430841 $0 n/a Theater $25 0.74399999999999999 $25 0.74399999999999999 Total CRE $7,392 0.50800000000000001 $1,269 0.51600000000000001

Selected CRE and Construction Loan Portfolios weighted avg. LTV 53% COVID weighted avg. LTV 55% weighted avg. LTV 51% COVID weighted avg. LTV 52% weighted avg. LTV 51% ($ in millions) Number of Loans Loan Balance COVID Modification Deferred Principal and Interest 130 $425.5 Interest Only 32 $250.5

Geographic Distribution of Residential Mortgage 2Q 2020: Residential Mortgage Portfolio * Residential Mortgage includes equity lines, installment and other loans. ($ in millions) 4.30.20 5.31.20 6.30.20 Portfolio under Mortgage Assistance Program (MAP) Loans under MAP $278.32107000000002 $511.04068000000001 $518.10136699999998 % of Total SFR Portfolio 6.7% 0.12239999999999999 0.124

Allowance for Loan and Lease Losses (ALLL)

Asset Quality Metrics Allowance coverage of loans HFI: 1.09% as of 6/30/20, compared to 0.95% as of 3/31/20. Nonaccrual loans/loans HFI: 0.36% as of 6/30/20 vs. 0.27% as of 12/31/19 vs. 0.38% as of 6/30/19. Classified Loans are loans classified as substandard and doubtful. Non-Performing Assets (NPA) = Non-accrual Loans + OREO

Deposit Mix Total Deposit $16.3 billion as of 6.30.20

Summary Income Statement Note: Information as of 6.30.20 and 3.31.20 are unaudited. $ in millions, except per share data 6.30.20 3.31.20 $ Change % Change Net Interest Income $134.5 $140.30000000000001 $-5.8000000000000114 -4.1% -2.0967651902090486E-2 Fee income 9.8000000000000007 11.9 -2.0999999999999996 -0.17647058823529407 0.35738753139986296 Net (losses) / Gains from equity securities 5.8 -6.1 11.899999999999999 1.9510000000000001 -2.465769877492193 Total Noninterest Income 15.6 5.8 9.8000000000000007 1.6896551724137934 -0.55220184196269639 Noninterest expense 54.2 51.1 3.1000000000000014 6.7% -0.14829632593185305 amortization of tax credit and other investmesnt plus core deposit tangibles 13.1 14 -0.90000000000000036 -6.4% 0.28045893279912582 Total Noninterest Expense $67.3 $65.099999999999994 $2.2000000000000028 3.4% -8.1950119768916446E-2 Provision for credit losses 25 25 0 0.0% 1 Income tax expense 3.5 9.1 -5.6 -0.61538461538461542 -0.51092102431676345 Net Income $54.3 $46.9 $7.3999999999999986 0.15778251599147119 -0.29734999025180342 Diluted EPS $0.68 $0.59 $9.000000000000008E-2 0.15254237288135608 -0.28966503653468711 Weighted avg. diluted shares (in millions) 79.682426000000007 79.830025000000006 -0.14759899999999959 -0.2% -1.081877439852583E-2

Net Interest Income & Non-interest Income $ in millions Non-Interest Income* * Non-interest income excludes net gains/(losses) from equity securities. Amortization Expense ($ in millions) 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Non-interest income, before net gains/(losses) from equity securities Non-interest income* $9.5570000000000004 $10.023999999999999 $10.9 $11.888 $9.827 net gains/(losses) from equity securities $3.2370000000000001 $0.36399999999999999 $-2.1859999999999999 $-6.1020000000000003 $5.7789999999999999 Total Non-interest Income $12.794 $10.388 $8.6999999999999993 $5.7859999999999996 $15.606

Operating Expense & Efficiency Amortization Expense ($ in millions) 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Non-interest expense, before amortization and other real estate Non-interest expense* $59.904000000000003 $58.220999999999997 $57.920999999999999 $55.195999999999998 $53.7 Amortization in investment in low income housing $5.6195149999999998 $3.6239050000000002 $6.8091359999999996 $5.9805679999999999 $6.3 Amortization in alternative energy partnerships $3.4820869999999999 $3.3733019999999998 $6.0129700000000001 $7.9090870000000004 $6.6656490000000002 Other real estate & CDF $0.54 $0.36199999999999999 $0.5 $-3.9319999999999999 $0.623 Total Noninterest Expense $69.545602000000017 $65.580206999999987 $71.191105999999991 $65.153655000000001 $67.268091999999996

Strong Capital Ratios Capital Ratio well above regulatory standards that continues to place Cathay in the “well capitalized” category, calculated under the Basel III capital rules. Book Value Per Common Share is $29.42 as of 6.30.20: +2.2% compared to 12.31.19 and +6.8% YoY. Capital Return on Shareholder common stock dividend: $0.31/sh. quarterly, or $1.24/sh. annualized. Stock buyback suspended after March 2020 until further notice.

XML

Document And Entity Information	Jul. 27, 2020
Cover [Abstract]
Document, Type	8-K
Amendment Flag	false
Document, Period End Date	Jul. 27, 2020
Entity, Registrant Name	CATHAY GENERAL BANCORP
Entity Central Index Key	0000861842
Entity, Emerging Growth Company	false
Entity, File Number	001-31830
Entity, Incorporation, State or Country Code	DE
Entity, Tax Identification Number	95-4274680
Entity, Address, Address Line One	777 North Broadway
Entity, Address, City or Town	Los Angeles
Entity, Address, State or Province	CA
Entity, Address, Postal Zip Code	90012
City Area Code	213
Local Phone Number	625-4700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock
Trading Symbol	CATY
Security Exchange Name	NASDAQ