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): January 24, 2008

CATHAY GENERAL BANCORP

(Exact name of registrant as specified in its charter)

Delaware	0-18630	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:

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

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

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

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

 Item 2.02     Results of Operations and Financial Condition

           On January 24, 2008, Cathay General Bancorp announced, in a press release, its financial results for the quarter and year ended December 31, 2007.  That press release is attached hereto as Exhibit 99.1.

           The foregoing information and the attached exhibit are intended to be furnished only and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release of Cathay General Bancorp dated January 24, 2008.

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: January 24, 2008

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

EXHIBIT INDEX

Number Exhibit

99.1 Press Release of Cathay General Bancorp dated January 24, 2008.

EX-99.1

Page 1

FOR IMMEDIATE RELEASE

For:	Cathay General Bancorp	Contact: Heng W. Chen
	777 N. Broadway	(213) 625-4752
	Los Angeles, CA 90012

CATHAY GENERAL BANCORP ANNOUNCES RECORD TOTAL EARNINGS OF $125.5 MILLION AND TOTAL ASSETS OF $10.4 BILLION AT DECEMBER 31, 2007

LOS ANGELES, Jan. 24 /PRNewswire-FirstCall/ -- Cathay General Bancorp (the “Company”, Nasdaq: CATY), the holding company for Cathay Bank (the “Bank”), today announced results for the fourth quarter and for the year ended December 31, 2007.

STRONG FINANCIAL PERFORMANCE

	Three months ended December 31,						Year ended December 31,
	2007			2006			2007			2006
Net income	$	30.9 million		$	30.5 million		$	125.5 million		$	117.6 million
Basic earnings per share	$	0.62		$	0.59		$	2.49		$	2.29
Diluted earnings per share	$	0.62		$	0.58		$	2.46		$	2.27
Return on average assets		1.23	%		1.54	%		1.38	%		1.60	%
Return on average stockholders' equity		12.70	%		13.03	%		13.28	%		13.61	%
Efficiency ratio		38.62	%		38.82	%		38.38	%		37.88	%

FOURTH QUARTER HIGHLIGHTS

·   Fourth quarter earnings increased $392,000, or 1.3%, compared to the same quarter a year ago.

·   Diluted earnings per share reached $0.62, increasing 6.9% compared to the same quarter a year ago.

·   Return on average assets was 1.23% for the quarter ended December 31, 2007, compared to 1.46% for the quarter ended September 30, 2007, and 1.54% for the same quarter a year ago.

·   Return on average stockholders’ equity was 12.70% for the quarter ended December 31, 2007, compared to 14.45% for the quarter ended September 30, 2007, and 13.03% for the same quarter a year ago.

·   Gross loans increased by $244.2 million, or 3.8%, for the quarter to $6.7 billion at December 31, 2007, from $6.4 billion at September 30, 2007.

·   Total assets were $10.4 billion at December 31, 2007, which increased by $774.2 million, or 8.0%, from $9.6 billion at September 30, 2007.

FULL YEAR HIGHLIGHTS

·   Record net income for 2007 was $125.5 million, which increased $7.9 million, or 6.7%, over 2006. This strong earnings performance resulted in an increase of 8.4% in diluted earnings per share to $2.46 compared with diluted earnings per share of $2.27 a year ago.

·   Total assets increased by $2.4 billion, or 29.5%, to $10.4 billion at December 31, 2007, from year-end 2006 of $8.0 billion.

·   Gross loans increased $936.1 million, or 16.3%, to $6.7 billion at December 31, 2007, from $5.7 billion at December 31, 2006.

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·   Deposit balances at December 31, 2007, grew to $6.3 billion, an increase of $603.1 million, or 10.6%, compared to deposit balances of $5.7 billion at December 31, 2006.

“We are pleased to report another year of record earnings despite this challenging economic environment. We continue to focus on credit quality and maintaining strong capital levels,” commented Dunson Cheng, Chairman of the Board, Chief Executive Officer, and President of the Company.

“We are concentrating on increasing core deposits and managing the cost of deposits in this declining interest rate environment,” said Peter Wu, Executive Vice Chairman and Chief Operating Officer.

“We are optimistic that 2008 should be another year of solid growth for Cathay General Bancorp as our operations outside of California gain increased momentum,” concluded Dunson Cheng.

INCOME STATEMENT REVIEW

The comparability of financial information is affected by our acquisitions. Operating results included the operations of acquired entities from the date of acquisition.

Net interest income before provision for loan losses

Net interest income before provision for loan losses increased $8.0 million, or 11.1%, to $80.4 million during the fourth quarter of 2007 from $72.4 million during the same quarter a year ago. The increase was due primarily to the strong growth in loans and investment securities.

The net interest margin, on a fully taxable-equivalent basis, was 3.43% for the fourth quarter of 2007. The net interest margin decreased 26 basis points from 3.69% in the third quarter of 2007 and decreased 58 basis points from 4.01% in the fourth quarter of 2006. The decrease in the net interest margin from the same quarter a year ago was primarily a result of the lag in the downward repricing of certificates of deposit. The decrease in the net interest margin from the third quarter of 2007 was primarily due to a significant increase in the average balance for investment securities, which have a lower yield compared to loans, and the lag in the downward repricing of certificates of deposit.

For the fourth quarter of 2007, the yield on average interest-earning assets was 7.01% on a fully taxable-equivalent basis, and the cost of funds on average interest-bearing liabilities equaled 4.12%. In comparison, for the fourth quarter of 2006, the yield on average interest-earning assets was 7.53% and cost of funds on average interest-bearing liabilities equaled 4.20%. The interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, decreased to 2.89% for the quarter ended December 31, 2007, from 3.33% for the same quarter a year ago primarily due to the reasons discussed above.

Provision for loan losses

The provision for loan losses was $5.7 million for the fourth quarter of 2007 compared to zero provision for loan losses for the fourth quarter of 2006 and a $2.2 million provision for loan losses for the third quarter of 2007. The provision for loan losses was $11.0 million for 2007 and $2.0 million for 2006. The provision for loan losses was based on the review of the adequacy of the allowance for loan losses at December 31, 2007. The provision for loan losses represents the charge or credit against current earnings that is determined by management, through a credit review process, as the amount needed to establish an allowance that management believes to be sufficient to absorb loan losses inherent in the Company’s loan portfolio. The following table summarizes the charge-offs and recoveries for the periods as indicated:

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	For the three months ended December 31,				For the year ended December 31,
(Dollars in thousands)	2007		2006		2007		2006
Charge-offs:
Commercial loans	$	1,250	$	1,147	$	7,503	$	1,985
Construction loans		788		-		978		-
Real estate loans		540		-		1,570		3
Installment and other loans		22		38		23		42
Total charge-offs		2,600		1,185		10,074		2,030
Recoveries:
Commercial loans		114		299		3,025		1,243
Construction loans		-		-		190		-
Real estate loans		63		37		265		41
Installment and other loans		5		6		32		31
Total recoveries		182		342		3,512		1,315
Net Charge-offs / (Recoveries)	$	2,418	$	843	$	6,562	$	715

Non-interest income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), gains (losses) on loan sales, wire transfer fees, gains from sales of premises and equipment and other sources of fee income, was $6.6 million for the fourth quarter of 2007, an increase of $1.4 million, or 25.8%, compared to non-interest income of $5.2 million for the fourth quarter of 2006. Non-interest income increased in the fourth quarter of 2007 primarily due to higher venture capital gains of $756,000, an increase in gains on sale of available-for-sale securities of $577,000 and an increase in letter of credit commissions of $240,000, or 17.6% partially offset by a $746,000 other-than-temporary impairment write-down of the Company’s investment in the common stock of Broadway Financial Corporation.

Non-interest expense

Non-interest expense increased $3.5 million, or 11.5%, to $33.6 million in the fourth quarter of 2007 compared to $30.1 million in the same quarter a year ago. The efficiency ratio was 38.62% for the fourth quarter of 2007 compared to 38.82% in the year ago quarter and 37.46% for the third quarter of 2007.

The increase of non-interest expense in the fourth quarter of 2007 compared to the same period a year ago was primarily due to the following:

·   Salaries and employee benefits increased $1.8 million, or 10.7%, due primarily to the Company’s acquisitions, the hiring of additional staff and higher bonus accruals.

·   Occupancy expense increased $406,000, or 15.2%, primarily due to the opening of new branches.

·   Professional services expense increased $757,000, or 40.1%, due primarily to increases of $438,000 in collection expenses because collection expenses in the fourth quarter of 2006 were low as a result of reimbursements from borrowers, and an increase in consulting expenses of $122,000 related to a new telephone system.

·   Expense from operations of affordable housing investmentsincreased $331,000, or 24.5%, to $1.7 million compared to $1.4 million in the same quarter a year ago as a result of additional investments in affordable housing projects.

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·   Other operating expense increased $392,000, or 17.5%, primarily due to increases in communication expenses, recruiting expenses, seminar expenses, and other miscellaneous expenses.

Income taxes

The effective tax rate was 35.2% for the fourth quarter of 2007, compared to 35.7% for the same quarter a year ago, and 36.2% for the full year 2007, and 36.4% for the full year 2006.

BALANCE SHEET REVIEW

Total assets increased by $2.4 billion, or 29.5%, to $10.4 billion at December 31, 2007, from year-end 2006 total assets of $8.0 billion. The increase in total assets was represented primarily by increases in loans, investment securities and securities purchased under agreements to resell.

Securities purchased under agreements to resell increased $516.1 million and long-term certificates of deposit increased $50.0 million in 2007 due to attractive rates available on these investments. Securities available-for-sale increased by $825.4 million in 2007 primarily due to purchases of agency mortgage backed securities.

The growth of gross loans to $6.7 billion as of December 31, 2007, from $5.7 billion as of December 31, 2006, represents an increase of $936.1 million, or 16.3%, primarily due to increases in commercial mortgage loans and commercial loans and $38.6 million from the acquisition of United Heritage Bank on March 30, 2007.

The changes in the loan composition from December 31, 2006, are presented below:

Type of Loans:	December 31, 2007			December 31, 2006			% Change
	(Dollars in thousands)
Commercial	$	1,432,694		$	1,243,756			15
Residential mortgage		555,703			455,949			22
Commercial mortgage		3,762,689			3,226,658			17
Equity lines		108,004			118,473			(9	)
Real estate construction		802,397			685,206			17
Installment		15,099			13,257			14
Other		7,059			4,247			66
Gross loans and leases	$	6,683,645		$	5,747,546			16
Allowance for loan losses		(64,983	)		(60,220	)		8
Unamortized deferred loan fees		(10,583	)		(11,984	)		(12	)
Total loans and leases, net	$	6,608,079		$	5,675,342			16

Total deposits increased $603.1 million, or 10.6%, to $6.3 billion at December 31, 2007, from $5.7 billion at December 31, 2006, of which $54.2 million resulted from the acquisition of United Heritage Bank at March 30, 2007. The changes in the deposit composition from December 31, 2006, are presented below:

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Deposits	December 31, 2007		December 31, 2006		% Change
	(Dollars in thousands)
Non-interest-bearing demand	$	785,364	$	781,492		0
NOW		231,583		239,589		(3	)
Money market		681,783		657,689		4
Savings		331,316		358,827		(8	)
Time deposits under $100,000		1,311,251		1,007,637		30
Time deposits of $100,000 or more		2,937,070		2,630,072		12
Total deposits	$	6,278,367	$	5,675,306		11

At December 31, 2007, brokered deposits increased $384.9 million to $632.6 million from $247.7 million at December 31, 2006.

Securities sold under agreement to repurchase increased $991.0 million from $400.0 million at December 31, 2006, to $1.4 billion at December 31, 2007. Advances from the Federal Home Loan Bank increased $660.5 million to $1.4 billion at December 31, 2007, compared to $714.7 million at December 31, 2006. Long-term debt increased $67.0 million from $104.1 million at December 31, 2006 to $171.1 million at December 31, 2007.

ASSET QUALITY REVIEW

At December 31, 2007, total non-accrual loans included two construction loans totaling $12.6 million ($6.6 million in Los Angeles County and $6.0 million in the Central Valley) that were placed on nonaccrual status upon receipt of appraisals indicating that the appraised value of the collateral is below the loan amounts. In addition, during the fourth quarter, two land development loans in Los Angeles County totaling $6.4 million were placed on nonaccrual status, three land loans in Northern California totaling $4.2 million were placed on nonaccrual status and a condominium conversion loan in San Diego County for $3.2 million, net of a chargeoff of $0.7 million, was placed on nonaccrual status. Nonaccrual loans in Texas totaled $10.4 million of which $4.9 million has paid off subsequent to December 31, 2007. Subsequent to December 31, 2007, $3.3 million of loans have been restored to accrual status. In addition, the foreclosure of a $4.5 million nonaccrual loan in San Jose County is expected to be completed in February, 2008. Non-performing assets to gross loans and other real estate owned was 1.25% at December 31, 2007, compared to 0.62% at December 31, 2006. Total non-performing assets increased $48.1 million to $83.7 million at December 31, 2007, compared with $35.6 million at December 31, 2006, primarily due to a $35.9 million increase in non-accrual loans, a $10.9 million increase in other real estate owned and a $1.3 million increase in accruing loans past due 90 days or more.

At December 31, 2007, other real estate owned is comprised of three properties, an $8.9 million apartment building in Texas, a $6.8 million shopping center in Texas which is in escrow to be sold prior to the end of the first quarter of 2007 and a $0.4 million retail building in New York State. Included in troubled debt restructured loans at December 31, 2007, is an $11.7 million condominium conversion construction loan for a project in San Diego County where the interest rate has been reduced to 6.0%. Subsequent to December 31, 2007, $6.8 million of loans past due ninety days and still on accrual status have been renewed or brought current.

The allowance for loan losses amounted to $65.0 million at December 31, 2007, and represented the amount that the Company believes to be sufficient to absorb probable loan losses inherent in the Company’s loan portfolio. This was after the Company reclassified $4.6 million for unfunded loan commitments from the allowance for loan losses to other liabilities. This presentation does not lower the total reserve for credit losses. Amounts presented prior to December 31, 2007 have been restated to conform with the current reporting period.The allowance for credit losses, the sum of allowance for loan losses and allowance for off-balance sheet unfunded credit commitments, were $69.6 million at December 31, 2007 and $64.7 million at December 31, 2006. The allowance for credit losses represented 1.04% of period-end gross loans and 103% of non-performing loans at December 31, 2007. The comparable ratios were 1.13% of gross loans and 213% of non-performing loans at December 31, 2006. Results of the changes to the Company’s non-performing assets and troubled debt restructurings are highlighted below:

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(Dollars in thousands)	December 31, 2007			December 31, 2006			% Change
Non-performing assets
Accruing loans past due 90 days or more	$	9,265		$	8,008			16
Non-accrual loans:
Construction		29,677			5,786			413
Commercial real estate		19,963			1,276			1,464
Commercial		6,664			14,425			(54	)
Real Estate Mortgage		1,971			835			136
Total non-accrual loans:	$	58,275		$	22,322			161
Total non-performing loans		67,540			30,330			123
Other real estate owned		16,147			5,259			207
Total non-performing assets	$	83,687		$	35,589			135
Troubled debt restructurings	$	12,601		$	955			1,219
Allowance for loan losses	$	64,983		$	60,220			8
Allowance for off-balance sheet credit commitments		4,576			4,469			2
Allowance for credit losses	$	69,559		$	64,689			8
Total gross loans outstanding, at period-end	$	6,683,645		$	5,747,546			16
Allowance for loan losses to non-performing loans, at period-end		96.21	%		198.55	%
Allowance for loan losses to gross loans, at period-end		0.97	%		1.05	%
Allowance for credit losses to non-performing loans, at period-end		102.99	%		213.28	%
Allowance for credit losses to gross loans, at period-end		1.04	%		1.13	%

CAPITAL ADEQUACY REVIEW

At December 31, 2007, the Tier 1 risk-based capital ratio of 9.09%, total risk-based capital ratio of 10.52%, and Tier 1 leverage capital ratio of 7.83%, continue to place the Company in the “well capitalized” category, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 6.00%, a total risk-based capital ratio equal to or greater than 10.00%, and a Tier 1 leverage capital ratio equal to or greater than 5.00%. At December 31, 2006, the Company’s Tier 1 risk-based capital ratio was 9.40%, the total risk-based capital ratio was 11.00%, and Tier 1 leverage capital ratio was 8.98%.

During the fourth quarter of 2007, the Company repurchased 549,650 shares of its common stock for $15.5 million, or $28.23 average cost per share. In 2007, the Company repurchased 2,829,203 shares of its common stock for $92.4 million, or $32.67 average cost per share. At December 31, 2007, 622,500 shares remain under the Company’s November 16, 2007, repurchase program.

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YEAR-TO-DATE REVIEW

Net income was $125.5 million, or $2.46 per diluted share for the year ended December 31, 2007, an increase of $7.9 million, or 6.7%, in net income over the $117.6 million, or $2.27 per diluted share for the same period a year ago due primarily to increases in net interest income. The net interest margin for the year ended December 31, 2007, decreased 50 basis points to 3.67% compared to 4.17% for the same period a year ago.

Return on average stockholders’ equity was 13.28% and return on average assets was 1.38% for the year ended December 31, 2007, compared to a return on average stockholders’ equity of 13.61% and a return on average assets of 1.60% for the same period of 2006. The efficiency ratio for the year December 31, 2007, was 38.38% compared to 37.88% for the same period a year ago.

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 31 branches in California, nine branches in New York State, one in Massachusetts, two in Texas, three in Washington State, three in the Chicago, Illinois area, one in New Jersey, one in Hong Kong and a representative office in Taipei and in Shanghai. Cathay Bank’s website is found at http://www.cathaybank.com/.

FORWARD-LOOKING STATEMENTS AND OTHER NOTICES

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 "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "should," "could," "predicts," "potential," "continue," or the negative of such terms and other comparable terminology or similar expressions. Forward-looking statements are not guarantees. They involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of Cathay General Bancorp to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from: expansion into new market areas; acquisitions of other banks, if any; fluctuations in interest rates; demographic changes; earthquake or other natural disasters; competitive pressures; deterioration in asset or credit quality; changes in the availability of capital; legislative and regulatory developments; changes in business strategy; and general economic or business conditions in California and other regions where Cathay Bank has operations.

These and other factors are further described in Cathay General Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006, its reports and registration statements filed with the Securities and Exchange Commission (“SEC”) and other filings it makes in the future with the SEC from time to time. Cathay General Bancorp has no intention and undertakes no obligation to update any forward-looking statements or to publicly announce the results of any revision of any forward-looking statement to reflect future developments or events.

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Cathay General Bancorp's filings with the SEC are available to the public from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov, or by request directed to Cathay General Bancorp, 777 N. Broadway, Los Angeles, CA 90012, Attention: Investor Relations (213) 625-4749.

CATHAY GENERAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

	Three months ended December 31,									Twelve months ended December 31,
(Dollars in thousands, except per share data)	2007			2006			% Change			2007			2006			% Change
FINANCIAL PERFORMANCE
Net interest income before provision for credit losses	$	80,445		$	72,409			11		$	309,521		$	279,283			11
Provision for credit losses		5,700			-			100			11,000			2,000			450
Net interest income after provision for credit losses		74,745			72,409			3			298,521			277,283			8
Non-interest income		6,582			5,234			26			27,487			21,464			28
Non-interest expense		33,612			30,140			12			129,348			113,918			14
Income before income tax expense		47,715			47,503			0			196,660			184,829			6
Income tax expense		16,799			16,979			(1	)		71,191			67,259			6
Net income	$	30,916		$	30,524			1		$	125,469		$	117,570			7
Net income per common share:
Basic	$	0.62		$	0.59			5		$	2.49		$	2.29			9
Diluted	$	0.62		$	0.58			7		$	2.46		$	2.27			8
Cash dividends paid per common share	$	0.105		$	0.090			17		$	0.405		$	0.360			13
SELECTED RATIOS
Return on average assets		1.23	%		1.54	%		(20	)		1.38	%		1.60	%		(14	)
Return on average stockholders’ equity		12.70	%		13.03	%		(3	)		13.28	%		13.61	%		(2	)
Efficiency ratio		38.62	%		38.82	%		(1	)		38.38	%		37.88	%		1
Dividend payout ratio		16.92	%		15.20	%		11			16.36	%		15.67	%		4
YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets		7.01	%		7.53	%		(7	)		7.28	%		7.31	%		(0	)
Total interest-bearing liabilities		4.12	%		4.20	%		(2	)		4.21	%		3.78	%		11
Net interest spread		2.89	%		3.33	%		(13	)		3.07	%		3.53	%		(13	)
Net interest margin		3.43	%		4.01	%		(14	)		3.67	%		4.17	%		(12	)
CAPITAL RATIOS		December 31, 2007						December 31, 2006
Tier 1 risk-based capital ratio		9.09	%					9.40	%
Total risk-based capital ratio		10.52	%					11.00	%
Tier 1 leverage capital ratio		7.83	%					8.98	%

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CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31, 2007			December 31, 2006			% change
	(In thousands, except share and per share data)
Assets
Cash and due from banks	$	118,437		$	114,798			3
Federal funds sold		-			18,000			(100	)
Cash and cash equivalents		118,437			132,798			(11	)
Short-term investments		2,278			16,379			(86	)
Securities purchased under agreements to resell		516,100			-			100
Long-term certificates of deposit		50,000			-			100
Securities available-for-sale (amortized cost of $2,348,606 at December 31, 2007 and $1,543,667 at December 31, 2006)		2,347,665			1,522,223			54
Trading securities		5,225			5,309			(2	)
Loans		6,683,645			5,747,546			16
Less: Allowance for loan losses		(64,983	)		(60,220	)		8
Unamortized deferred loan fees, net		(10,583	)		(11,984	)		(12	)
Loans, net		6,608,079			5,675,342			16
Federal Home Loan Bank stock		65,720			34,348			91
Other real estate owned, net		16,147			5,259			207
Affordable housing investments, net		94,000			87,289			8
Premises and equipment, net		76,848			72,934			5
Customers’ liability on acceptances		53,148			27,040			97
Accrued interest receivable		53,032			39,267			35
Goodwill		319,873			316,752			1
Other intangible assets, net		36,097			42,987			(16	)
Other assets		39,883			53,050			(25	)
Total assets	$	10,402,532		$	8,030,977			30
Liabilities and Stockholders’ Equity
Deposits
Non-interest-bearing demand deposits	$	785,364		$	781,492			0
Interest-bearing deposits:
NOW deposits		231,583			239,589			(3	)
Money market deposits		681,783			657,689			4
Savings deposits		331,316			358,827			(8	)
Time deposits under $100,000		1,311,251			1,007,637			30
Time deposits of $100,000 or more		2,937,070			2,630,072			12
Total deposits		6,278,367			5,675,306			11
Federal funds purchased		41,000			50,000			(18	)
Securities sold under agreement to repurchase		1,391,025			400,000			248
Advances from the Federal Home Loan Bank		1,375,180			714,680			92
Other borrowings		8,301			10,000			(17	)
Other borrowings from affordable housing investments		19,642			19,981			(2	)
Long-term debt		171,136			104,125			64
Acceptances outstanding		53,148			27,040			97
Minority interest in consolidated subsidiaries		8,500			8,500			-
Other liabilities		84,314			78,271			8
Total liabilities		9,430,613			7,087,903			33
Commitments and contingencies		-			-			-
Total stockholders’ equity		971,919			943,074			3
Total liabilities and stockholders’ equity	$	10,402,532		$	8,030,977			30
Book value per share	$	19.70		$	18.16			8
Number of common stock shares outstanding		49,336,187			51,930,955			(5	)

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Page 10

CATHAY GENERAL BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

	Three months ended December 31,					Twelve months ended December 31,
	2007		2006			2007		2006
	(In thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loan receivable, including loan fees	$	123,928	$	114,888		$	480,769	$	419,454
Investment securities- taxable		29,282		19,766			100,663		66,071
Investment securities- nontaxable		382		614			2,007		2,730
Federal Home Loan Bank stock		659		495			2,348		1,594
Agency preferred stock		174		294			686		1,094
Federal funds sold and securities purchased under agreements to resell		8,927		35			24,309		195
Deposits with banks		1,201		121			4,489		380
Total interest and dividend income		164,553		136,213			615,271		491,518
INTEREST EXPENSE
Time deposits of $100,000 or more		34,698		30,517			132,225		104,328
Other deposits		20,539		17,781			77,278		55,763
Securities sold under agreements to repurchase		11,911		4,500			35,037		15,683
Advances from Federal Home Loan Bank		13,142		8,160			48,072		27,475
Long-term debt		3,183		2,004			11,240		5,363
Short-term borrowings		635		842			1,898		3,623
Total interest expense		84,108		63,804			305,750		212,235
Net interest income before provision for credit losses		80,445		72,409			309,521		279,283
Provision for credit losses		5,700		-			11,000		2,000
Net interest income after provision for credit losses		74,745		72,409			298,521		277,283
NON-INTEREST INCOME
Securities gains/(losses), net		542		(35	)		810		201
Letters of credit commissions		1,602		1,362			5,951		5,409
Depository service fees		1,234		1,169			4,763		4,799
Gains from sale of premises and equipment		2		-			2,716		-
Other operating income		3,202		2,738			13,247		11,055
Total non-interest income		6,582		5,234			27,487		21,464
NON-INTEREST EXPENSE
Salaries and employee benefits		18,193		16,440			68,949		62,500
Occupancy expense		3,080		2,674			12,115		10,118
Computer and equipment expense		2,391		2,332			9,600		7,876
Professional services expense		2,645		1,888			9,304		7,284
FDIC and State assessments		293		256			1,097		1,017
Marketing expense		896		1,130			3,309		3,459
Other real estate owned expense		50		83			334		596
Operations of affordable housing investments		1,681		1,350			6,609		5,377
Amortization of core deposit intangibles		1,755		1,751			7,053		6,529
Other operating expense		2,628		2,236			10,978		9,162
Total non-interest expense		33,612		30,140			129,348		113,918
Income before income tax expense		47,715		47,503			196,660		184,829
Income tax expense		16,799		16,979			71,191		67,259
Net income		30,916		30,524			125,469		117,570
Other comprehensive gain/(loss), net of tax		9,315		(105	)		11,883		826
Total comprehensive income	$	40,231	$	30,419		$	137,352	$	118,396
Net income per common share:
Basic	$	0.62	$	0.59		$	2.49	$	2.29
Diluted	$	0.62	$	0.58		$	2.46	$	2.27
Cash dividends paid per common share	$	0.105	$	0.090		$	0.405	$	0.360
Basic average common shares outstanding		49,630,914		51,793,432			50,418,303		51,234,596
Diluted average common shares outstanding		50,061,883		52,298,620			50,975,449		51,804,495

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Page 11

CATHAY GENERAL BANCORP

AVERAGE BALANCES - SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

	For the three months ended,
(In thousands)	December 31, 2007					December 31, 2006					September 30, 2007
Interest-earning assets	Average Balance		Average Yield/Rate (1) (2)			Average Balance		Average Yield/Rate (1) (2)			Average Balance		Average Yield/Rate (1) (2)
Loans and leases (1)	$	6,574,603		7.48	%	$	5,628,885		8.10	%	$	6,298,452		7.81	%
Taxable investment securities		2,115,571		5.49	%		1,442,358		5.44	%		1,769,245		5.63	%
Tax-exempt investment securities (2)		51,098		6.41	%		77,977		6.86	%		55,217		6.62	%
FHLB & FRB stock		55,637		4.70	%		34,917		5.62	%		50,297		5.04	%
Federal funds sold and securities purchased under agreements to resell		466,084		7.60	%		2,744		5.06	%		371,413		8.13	%
Deposits with banks		60,316		7.90	%		13,068		3.67	%		71,843		6.89	%
Total interest-earning assets	$	9,323,309		7.01	%	$	7,199,949		7.53	%	$	8,616,467		7.34	%
Interest-bearing liabilities
Interest-bearing demand deposits	$	229,450		1.03	%	$	231,415		1.27	%	$	233,116		1.28	%
Money market		755,556		2.97	%		636,143		2.94	%		699,679		3.18	%
Savings deposits		335,504		0.77	%		359,894		0.99	%		342,971		1.01	%
Time deposits		4,130,688		4.64	%		3,609,594		4.61	%		3,935,125		4.77	%
Total interest-bearing deposits	$	5,451,198		4.02	%	$	4,837,046		3.96	%	$	5,210,891		4.15	%
Federal funds purchased		45,859		4.65	%		43,940		5.40	%		22,863		4.84	%
Securities sold under agreements to repurchase		1,267,643		3.73	%		400,000		4.46	%		1,041,577		3.76	%
Other borrowed funds		1,155,823		4.54	%		635,190		5.25	%		978,759		4.65	%
Long-term debt		171,136		7.38	%		104,125		7.64	%		171,136		7.38	%
Total interest-bearing liabilities		8,091,659		4.12	%		6,020,301		4.20	%		7,425,226		4.24	%
Non-interest-bearing demand deposits		798,292					786,132					774,513
Total deposits and other borrowed funds	$	8,889,951				$	6,806,433				$	8,199,739
Total average assets	$	9,986,980				$	7,844,168				$	9,263,156
Total average stockholders’ equity	$	965,805				$	929,564				$	933,562

	For the twelve months ended,
(In thousands)	December 31, 2007					December 31, 2006
Interest-earning assets	Average Balance		Average Yield/Rate (1) (2)			Average Balance		Average Yield/Rate (1) (2)
Loans and leases	$	6,170,505		7.79	%	$	5,310,564		7.90	%
Taxable investment securities		1,800,930		5.59	%		1,304,325		5.07	%
Tax-exempt investment securities (2)		61,932		6.51	%		83,349		6.85	%
FHLB & FRB stock		50,293		4.67	%		32,475		4.91	%
Federal funds sold and securities purchased under agreements to resell		318,778		7.63	%		4,340		4.49	%
Deposits with banks		62,101		7.23	%		15,091		2.52	%
Total interest-earning assets	$	8,464,539		7.28	%	$	6,750,144		7.31	%
Interest-bearing liabilities
Interest-bearing demand deposits	$	232,114		1.22	%	$	237,113		1.18	%
Money market deposits		699,606		3.08	%		599,210		2.69	%
Savings deposits		344,066		0.95	%		374,570		0.91	%
Time deposits		3,852,468		4.72	%		3,344,931		4.12	%
Total interest-bearing deposits	$	5,128,254		4.09	%	$	4,555,824		3.51	%
Federal funds purchased		32,190		5.01	%		43,407		5.06	%
Securities sold under agreements to repurchase		941,380		3.72	%		374,356		4.19	%
Other borrowed funds		1,010,574		4.79	%		578,181		5.00	%
Long-term debt		151,478		7.42	%		66,907		8.02	%
Total interest-bearing liabilities		7,263,876		4.21	%		5,618,675		3.78	%
Non-interest-bearing demand deposits		782,347					761,991
Total deposits and other borrowed funds	$	8,046,223				$	6,380,666
Total average assets	$	9,111,671				$	7,345,020
Total average stockholders’ equity	$	944,528				$	863,641

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

(2) The average yield has been adjusted to a fully taxable-equivalent basis for certain securities of states and political subdivisions.