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, 2024

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	The 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 2.02.   Results of Operations and Financial Condition.

On January 24, 2024, Cathay General Bancorp (the “Company”) announced, in a press release, its financial results for the quarter and year ended December 31, 2023. 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 Wednesday, January 24, 2024 at 3:00 p.m. Pacific Time to discuss its fourth quarter and full year 2023 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 9.01.   Financial Statements and Exhibits.

(d)	Exhibits
	99.1	Press Release of Cathay General Bancorp, dated January 24, 2024
	99.2	Presentation Materials, dated January 24, 2024
	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:  January 24, 2024

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 Fourth Quarter and Full Year 2023 Results

LOS ANGELES--(BUSINESS WIRE)--January 24, 2024--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 and year ended December 31, 2023. The Company reported net income of $354.1 million, or $4.86 per share, for the year ended December 31, 2023 and net income of $82.5 million, or $1.13 per share, for the fourth quarter of 2023. The fourth quarter net income included a $11.3 million, or $0.12 per diluted share, charge for the one-time FDIC special assessment.

FINANCIAL PERFORMANCE

	Three months ended			Year ended December 31,
(unaudited)	December 31, 2023	September 30, 2023	December 31, 2022	2023	2022
Net income	$82.5 million	$82.4 million	$97.6 million	$354.1 million	$360.6 million
Basic earnings per common share	$1.14	$1.14	$1.33	$4.88	$4.85
Diluted earnings per common share	$1.13	$1.13	$1.33	$4.86	$4.83
Return on average assets	1.40%	1.42%	1.77%	1.56%	1.69%
Return on average total stockholders' equity	12.21%	12.36%	15.73%	13.56%	14.70%
Efficiency ratio	53.84%	48.57%	37.97%	46.97%	38.38%

HIGHLIGHTS

• Diluted earnings per share for the year increased to $4.86.
• Total loans increased $1.3 billion, or 7.1%, to $19.55 billion in 2023.
• Total deposits increased $820.2 million, or 4.4%, to $19.33 billion in 2023.

“Total loans increased by $1.3 billion to $19.55 billion for the year and diluted earnings per share for the year increased to $4.86 per share,” commented Chang M. Liu, President and Chief Executive Officer of the Company.

INCOME STATEMENT REVIEW
FOURTH QUARTER 2023 COMPARED TO THE THIRD QUARTER 2023

Net income for the quarter ended December 31, 2023, was $82.5 million, an increase of $0.1 million, or 0.1%, compared to net income of $82.4 million for the third quarter of 2023. Diluted earnings per share for the fourth quarter of 2023 was $1.13 per share compared to $1.13 per share for the third quarter of 2023. Net income for the fourth quarter included an $11.3 million, or $0.12 per diluted share, one-time FDIC special assessment as a result of the Federal Deposit Insurance Act.

Return on average stockholders’ equity was 12.21% and return on average assets was 1.40% for the quarter ended December 31, 2023, compared to a return on average stockholders’ equity of 12.36% and a return on average assets of 1.42% in the third quarter of 2023.

Net interest income before provision for credit losses

Net interest income before provision for credit losses decreased $3.5 million, or 1.9%, to $182.1 million during the fourth quarter of 2023, compared to $185.6 million in the third quarter of 2023. The decrease was due primarily to an increase in interest deposit expense, partially offset by an increase in interest income from loans and securities.

The net interest margin was 3.27% for the fourth quarter of 2023 compared to 3.38% for the third quarter of 2023.

For the fourth quarter of 2023, the yield on average interest-earning assets was 5.99%, the cost of funds on average interest-bearing liabilities was 3.59%, and the cost of average interest-bearing deposits was 3.50%. In comparison, for the third quarter of 2023, the yield on average interest-earning assets was 5.89%, the cost of funds on average interest-bearing liabilities was 3.33%, and the cost of average interest-bearing deposits was 3.23%. The increase in the yield on average interest-bearing liabilities resulted mainly from higher interest rates on deposits driven by the higher repricing of maturing time deposits in the fourth quarter. The increase in the yield on average interest-earning assets resulted mainly from higher interest rates on loans due to the increasing rate environment. 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 2.40% for the fourth quarter of 2023, compared to 2.56% for the third quarter of 2023.

Provision for credit losses

The Company recorded a provision for credit losses of $1.7 million in the fourth quarter of 2023, compared to $7.0 million in the third quarter of 2023. As of December 31, 2023, the allowance for credit losses decreased by $2.4 million to $163.6 million, or 0.84% of gross loans, compared to $166.0 million, or 0.87% of gross loans as of September 30, 2023.

The following table sets forth the charge-offs and recoveries for the periods indicated:

	Three months ended						Year ended December 31,
	December 31, 2023		September 30, 2023		December 31, 2022		2023		2022
	(In thousands) (Unaudited)
Charge-offs:
Commercial loans	$	1,392	$	6,254	$	860	$	13,909	$	3,222
Construction loans		4,221		—		—		4,221		—
Real estate loans (1)		—		1,221		2,131		5,341		2,268
Installment and other loans		—		8		—		15		—
Total charge-offs		5,613		7,483		2,991		23,486		5,490
Recoveries:
Commercial loans		1,426		611		356		2,990		2,465
Construction loans		—		—		—		—		6
Real estate loans (1)		55		261		97		2,918		432
Installment and other loans		—		—		2		—		2
Total recoveries		1,481		872		455		5,908		2,905
Net charge-offs/(recoveries)	$	4,132	$	6,611	$	2,536	$	17,578	$	2,585

⁽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), wealth management fees, and other sources of fee income, was $23.1 million for the fourth quarter of 2023, an increase of $15.3 million, or 194.8%, compared to $7.8 million for the third quarter of 2023. The increase was primarily due to an increase of $15.2 million in gain on equity securities, when compared to the third quarter of 2023.

Non-interest expense

Non-interest expense increased $16.5 million, or 17.6%, to $110.5 million in the fourth quarter of 2023, compared to $94.0 million in the third quarter of 2023. The increase in non-interest expense in the fourth quarter of 2023 was primarily due to an increase of $11.3 million in FDIC and State assessments, an increase of $3.0 million in amortization expense of investments in low-income housing and alternative energy partnerships, an increase of $1.3 million in salaries and employee benefits and an increase of $671 thousand in one-time restructuring costs, when compared to the third quarter of 2023. The efficiency ratio, defined as non-interest expense divided by the sum of net interest income before provision for loan losses plus non-interest income, was 53.84% in the fourth quarter of 2023, compared to 48.57% for the third quarter of 2023.

Income taxes

The effective tax rate for the fourth quarter of 2023 was 11.28%, compared to 10.95% for the third quarter of 2023. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $19.55 billion as of December 31, 2023, an increase of $1.3 billion, or 7.1%, from $18.25 billion as of December 31, 2022. The increase was primarily due to increases of $935.9 million, or 10.6%, in commercial real estate loans, $585.8 million, or 11.2%, in residential mortgage loans, offset by a decrease of $136.7 million, or 24.4%, in construction loans, and a decrease of $78.6 million, or 24.2%, in home equity loans. For the fourth quarter of 2023, gross loans increased by $524.3 million, or 11.5% annualized.

The loan balances and composition as of December 31, 2023, compared to September 30, 2023, and December 31, 2022, are presented below:

	December 31, 2023		September 30, 2023		December 31, 2022
	(In thousands) (Unaudited)
Commercial loans	$	3,305,048	$	3,090,609	$	3,318,778
Residential mortgage loans		5,838,747		5,685,844		5,252,952
Commercial real estate loans		9,729,581		9,511,805		8,793,685
Equity lines		245,919		253,826		324,548
Construction loans		422,647		474,294		559,372
Installment and other loans		6,198		7,444		4,689
Gross loans	$	19,548,140	$	19,023,822	$	18,254,024
Allowance for loan losses		(154,562)		(154,619)		(146,485)
Unamortized deferred loan fees		(10,720)		(9,521)		(6,641)
Total loans, net	$	19,382,858	$	18,859,682	$	18,100,898

Total deposits were $19.33 billion as of December 31, 2023, an increase of $820.2 million, or 4.4%, from $18.51 billion as of December 31, 2022.

The deposit balances and composition as of December 31, 2023, compared to September 30, 2023, and December 31, 2022, are presented below:

	December 31, 2023		September 30, 2023		December 31, 2022
	(In thousands) (Unaudited)
Non-interest-bearing demand deposits	$	3,529,018	$	3,623,483	$	4,168,989
NOW deposits		2,370,685		2,454,878		2,509,736
Money market deposits		3,049,754		3,222,612		3,812,724
Savings deposits		1,039,203		1,131,352		1,000,460
Time deposits		9,336,787		9,203,263		7,013,370
Total deposits	$	19,325,447	$	19,635,588	$	18,505,279

ASSET QUALITY REVIEW

As of December 31, 2023, total non-accrual loans were $66.7 million, a decrease of $2.2 million, or 3.2%, from $68.9 million as of December 31, 2022, and a decrease of $10.6 million, or 13.7%, from $77.3 million as of September 30, 2023.

The allowance for loan losses was $154.6 million and the allowance for off-balance sheet unfunded credit commitments was $9.1 million as of December 31, 2023. The allowances represent the amount estimated by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments. The allowance for loan losses represented 0.79% of period-end gross loans, and 209.33% of non-performing loans as of December 31, 2023. The comparable ratios were 0.80% of period-end gross loans, and 182.12% of non-performing loans as of December 31, 2022.

The changes in non-performing assets and loan modifications to borrowers experiencing financial difficulty as of December 31, 2023, compared to December 31, 2022, and September 30, 2023, are presented below:

(Dollars in thousands) (Unaudited)	December 31, 2023		December 31, 2022		% Change	September 30, 2023		% Change
Non-performing assets
Accruing loans past due 90 days or more	$	7,157	$	11,580	(38)	$	1,924	272
Non-accrual loans:
Construction loans		7,736		—	—		16,992	(54)
Commercial real estate loans		32,030		34,096	(6)		32,539	(2)
Commercial loans		14,404		25,772	(44)		14,661	(2)
Residential mortgage loans		12,511		8,978	39		13,138	(5)
Installment and other loans		—		8	(100)		—	—
Total non-accrual loans:	$	66,681	$	68,854	(3)	$	77,330	(14)
Total non-performing loans		73,838		80,434	(8)		79,254	(7)
Other real estate owned		19,441		4,067	378		14,407	35
Total non-performing assets	$	93,279	$	84,501	10	$	93,661	(0)
Accruing loan modifications to borrowers experiencing financial difficulties (1)	$	2,872	$	—	—	$	1,489	93
Accruing troubled debt restructurings (TDRs)	$	—	$	15,145	(100)	$	—	—
Allowance for loan losses	$	154,562	$	146,485	6	$	154,619	(0)
Total gross loans outstanding, at period-end	$	19,548,140	$	18,254,024	7	$	19,023,822	3
Allowance for loan losses to non-performing loans, at period-end		209.33%		182.12%			195.09%
Allowance for loan losses to gross loans, at period-end		0.79%		0.80%			0.81%

⁽¹⁾ Beginning after January 1, 2023, modifications are reported in accordance with the new guidance under ASU 2022-02.

The ratio of non-performing assets to total assets was 0.40% as of December 31, 2023, compared to 0.39% as of December 31, 2022. Total non-performing assets increased $8.8 million, or 10.4%, to $93.3 million as of December 31, 2023, compared to $84.5 million as of December 31, 2022, primarily due to an increase of $15.4 million, or 378.0%, in other real estate owned, offset by a decrease of $4.4 million, or 38.2%, in accruing loans past due 90 days or more and a decrease of $2.2 million, or 3.2%, in non-accrual loans.

CAPITAL ADEQUACY REVIEW

As of December 31, 2023, the Company’s Tier 1 risk-based capital ratio of 12.82%, total risk-based capital ratio of 14.30%, and Tier 1 leverage capital ratio of 10.55%, calculated under the Basel III capital rules, continue to place the Company in the “well capitalized” category for regulatory purposes, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%. As of December 31, 2022, the Company’s Tier 1 risk-based capital ratio was 12.21%, total risk-based capital ratio was 13.73%, and Tier 1 leverage capital ratio was 10.08%.

FULL YEAR REVIEW

Net income for the year ended December 31, 2023, was $354.1 million, a decrease of $6.5 million, or 1.8%, compared to net income of $360.6 million for the year ended December 31, 2022. Diluted earnings per share for the year ended December 31, 2023 was $4.86, compared to $4.83 per share for the year ended December 31, 2022. The net interest margin for the year ended December 31, 2023 was 3.45%, compared to 3.63% for the year ended December 31, 2022.

Return on average stockholders’ equity was 13.56% and return on average assets was 1.56% for the year ended December 31, 2023, compared to a return on average stockholders’ equity of 14.70% and a return on average assets of 1.69% for the year ended December 31, 2022. The efficiency ratio for the year ended December 31, 2023, was 46.97%, compared to 38.38% for the year ended December 31, 2022.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its fourth quarter and year-end 2023 financial results this afternoon, Wednesday, January 24, 2024, 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 1-833-816-1377 and enter Conference ID 10185350. The presentation accompanying this call and access to the live webcast is available on our site at www.cathaygeneralbancorp.com and a replay of the webcast will be archived for one year within 24 hours after the event.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp is a publicly traded company (Nasdaq: CATY) and is the holding company for Cathay Bank, a California state-chartered bank. Founded in 1962, Cathay Bank offers a wide range of financial services and currently operates over 60 branches across the United States in California, New York, Washington, Texas, Illinois, Massachusetts, Maryland, Nevada, and New Jersey. Overseas, it has a branch outlet in Hong Kong, and representative offices in Beijing, Shanghai, and Taipei. To learn more about Cathay Bank, please visit 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 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; 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 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, 2022 (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						Year ended December 31,
(Dollars in thousands, except per share data)	December 31, 2023		September 30, 2023		December 31, 2022		2023		2022
Financial performance
Net interest income before provision for credit losses	$	182,138	$	185,640	$	201,814	$	741,746	$	733,697
Provision for credit losses		1,723		7,000		1,400		25,978		14,543
Net interest income after provision for credit losses		180,415		178,640		200,414		715,768		719,154
Non-interest income		23,101		7,837		12,088		68,292		56,814
Non-interest expense		110,498		93,973		81,224		380,478		303,432
Income before income tax expense		93,018		92,504		131,278		403,582		472,536
Income tax expense		10,492		10,133		33,677		49,458		111,894
Net income	$	82,526	$	82,371	$	97,601	$	354,124	$	360,642
Net income per common share
Basic	$	1.14	$	1.14	$	1.33	$	4.88	$	4.85
Diluted	$	1.13	$	1.13	$	1.33	$	4.86	$	4.83
Cash dividends paid per common share	$	0.34	$	0.34	$	0.34	$	1.36	$	1.36
Selected ratios
Return on average assets		1.40%		1.42%		1.77%		1.56%		1.69%
Return on average total stockholders’ equity		12.21%		12.36%		15.73%		13.56%		14.70%
Efficiency ratio		53.84%		48.57%		37.97%		46.97%		38.38%
Dividend payout ratio		29.92%		29.95%		25.45%		27.85%		27.99%
Yield analysis (Fully taxable equivalent)
Total interest-earning assets		5.99%		5.89%		5.06%		5.78%		4.21%
Total interest-bearing liabilities		3.59%		3.33%		1.66%		3.11%		0.82%
Net interest spread		2.40%		2.56%		3.40%		2.67%		3.39%
Net interest margin		3.27%		3.38%		3.87%		3.45%		3.63%
Capital ratios	December 31, 2023		September 30, 2023		December 31, 2022
Tier 1 risk-based capital ratio		12.82%		12.70%		12.19%
Total risk-based capital ratio		14.30%		14.21%		13.71%
Tier 1 leverage capital ratio		10.55%		10.44%		10.08%
	.				.		.

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)	December 31, 2023		September 30, 2023		December 31, 2022
Assets
Cash and due from banks	$	173,988	$	145,580	$	195,440
Short-term investments and interest bearing deposits		654,813		1,017,354		966,962
Securities available-for-sale (amortized cost of $1,726,080 at December 31, 2023, $1,684,951 at September 30, 2023 and $1,622,173 at December 31, 2022)		1,604,570		1,508,798		1,473,348
Loans		19,548,140		19,023,822		18,254,024
Less: Allowance for loan losses		(154,562)		(154,619)		(146,485)
Unamortized deferred loan fees, net		(10,720)		(9,521)		(6,641)
Loans, net		19,382,858		18,859,682		18,100,898
Equity securities		40,406		31,456		22,158
Federal Home Loan Bank stock		17,746		17,250		17,250
Other real estate owned, net		19,441		14,407		4,067
Affordable housing investments and alternative energy partnerships, net		315,683		332,903		327,128
Premises and equipment, net		91,097		91,033		94,776
Customers’ liability on acceptances		3,264		16,900		2,372
Accrued interest receivable		97,673		90,875		82,428
Goodwill		375,696		375,696		375,696
Other intangible assets, net		4,461		4,725		5,757
Right-of-use assets- operating leases		32,076		30,586		29,627
Other assets		267,762		307,284		250,069
Total assets	$	23,081,534	$	22,844,529	$	21,947,976
Liabilities and Stockholders’ Equity
Deposits:
Non-interest-bearing demand deposits	$	3,529,018	$	3,623,483	$	4,168,989
Interest-bearing deposits:
NOW deposits		2,370,685		2,454,878		2,509,736
Money market deposits		3,049,754		3,222,612		3,812,724
Savings deposits		1,039,203		1,131,352		1,000,460
Time deposits		9,336,787		9,203,263		7,013,370
Total deposits		19,325,447		19,635,588		18,505,279
Advances from the Federal Home Loan Bank		540,000		15,000		485,000
Other borrowings for affordable housing investments		15,787		22,374		22,600
Long-term debt		119,136		119,136		119,136
Acceptances outstanding		3,264		16,900		2,372
Lease liabilities - operating leases		34,797		32,962		32,518
Other liabilities		306,529		363,833		307,031
Total liabilities		20,344,960		20,205,793		19,473,936
Stockholders' equity		2,736,574		2,638,736		2,474,040
Total liabilities and equity	$	23,081,534	$	22,844,529	$	21,947,976
Book value per common share	$	37.66	$	36.35	$	34.01
Number of common shares outstanding		72,668,927		72,586,992		72,742,151

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three months ended						Year ended December 31,
	December 31, 2023		September 30, 2023		December 31, 2022		2023		2022
	(In thousands, except share and per share data)
Interest and Dividend Income
Loan receivable, including loan fees	$	302,477	$	293,108	$	243,324	$	1,130,242	$	801,981
Investment securities		14,885		12,698		10,181		51,717		28,240
Federal Home Loan Bank stock		392		355		329		1,349		1,103
Deposits with banks		15,509		17,307		9,954		58,914		19,957
Total interest and dividend income		333,263		323,468		263,788		1,242,222		851,281
Interest Expense
Time deposits		97,826		90,022		34,352		331,997		56,354
Other deposits		43,282		38,207		23,048		135,965		48,942
Advances from Federal Home Loan Bank		7,289		6,779		2,484		22,164		5,880
Long-term debt		1,759		1,726		1,228		6,480		5,546
Short-term borrowings		969		1,094		862		3,870		862
Total interest expense		151,125		137,828		61,974		500,476		117,584
Net interest income before provision for credit losses		182,138		185,640		201,814		741,746		733,697
Provision for credit losses		1,723		7,000		1,400		25,978		14,543
Net interest income after provision for credit losses		180,415		178,640		200,414		715,768		719,154
Non-Interest Income
Net (losses)/gains from equity securities		8,950		(6,218)		(966)		18,248		392
Debt securities losses, net		—		—		—		(3,000)		—
Letters of credit commissions		1,744		1,738		1,584		6,716		6,351
Depository service fees		1,423		1,536		1,530		6,432		6,523
Wealth management fees		4,820		5,150		3,942		17,506		16,436
Other operating income		6,164		5,631		5,998		22,390		27,112
Total non-interest income		23,101		7,837		12,088		68,292		56,814
Non-Interest Expense
Salaries and employee benefits		40,101		38,774		35,093		154,149		142,546
Occupancy expense		5,387		5,851		5,658		22,270		22,808
Computer and equipment expense		4,579		4,387		3,842		17,478		13,603
Professional services expense		8,279		7,906		7,529		32,491		28,237
Data processing service expense		3,718		3,614		3,368		14,728		13,181
FDIC and State assessments		14,358		3,063		2,038		23,588		8,037
Marketing expense		1,110		1,587		2,171		5,887		6,863
Other real estate owned expense		195		435		34		761		127
Amortization of investments in low income housing and alternative energy partnerships		26,119		23,157		14,594		86,616		42,065
Amortization of core deposit intangibles		251		250		1,168		1,310		1,892
Acquisition, integration and restructuring costs		671		—		—		671		4,127
Other operating expense		5,730		4,949		5,729		20,529		19,946
Total non-interest expense		110,498		93,973		81,224		380,478		303,432
Income before income tax expense		93,018		92,504		131,278		403,582		472,536
Income tax expense		10,492		10,133		33,677		49,458		111,894
Net income	$	82,526	$	82,371	$	97,601	$	354,124	$	360,642
Net income per common share:
Basic	$	1.14	$	1.14	$	1.33	$	4.88	$	4.85
Diluted	$	1.13	$	1.13	$	1.33	$	4.86	$	4.83
Cash dividends paid per common share	$	0.34	$	0.34	$	0.34	$	1.36	$	1.36
Basic average common shares outstanding		72,652,779		72,568,518		73,130,500		72,573,025		74,337,265
Diluted average common shares outstanding		72,906,310		72,890,414		73,467,401		72,862,628		74,664,735

CATHAY GENERAL BANCORP AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
	Three months ended
(In thousands)(Unaudited)	December 31, 2023			September 30, 2023			December 31, 2022
Interest-earning assets:	Average Balance		Average Yield/Rate (1)	Average Balance		Average Yield/Rate (1)	Average Balance		Average Yield/Rate (1)
Loans (1)	$	19,330,187	6.21%	$	18,959,444	6.13%	$	18,117,692	5.33%
Taxable investment securities		1,594,267	3.71%		1,530,767	3.29%		1,493,472	2.70%
FHLB stock		19,599	7.94%		19,141	7.35%		17,250	7.57%
Deposits with banks		1,130,806	5.44%		1,273,751	5.39%		1,052,161	3.75%
Total interest-earning assets	$	22,074,859	5.99%	$	21,783,103	5.89%	$	20,680,575	5.06%
Interest-bearing liabilities:
Interest-bearing demand deposits	$	2,466,263	2.14%	$	2,405,011	1.98%	$	2,514,877	0.78%
Money market deposits		3,200,455	3.33%		3,036,445	2.98%		4,350,804	1.63%
Savings deposits		1,112,454	1.11%		1,151,615	1.17%		1,064,019	0.09%
Time deposits		9,208,820	4.21%		9,145,176	3.91%		6,403,334	2.13%
Total interest-bearing deposits	$	15,987,992	3.50%	$	15,738,247	3.23%	$	14,333,034	1.59%
Other borrowed funds		600,483	5.46%		586,824	5.32%		358,840	3.70%
Long-term debt		119,136	5.86%		119,136	5.75%		119,136	4.09%
Total interest-bearing liabilities		16,707,611	3.59%		16,444,207	3.33%		14,811,010	1.66%
Non-interest-bearing demand deposits		3,598,385			3,603,779			4,337,065
Total deposits and other borrowed funds	$	20,305,996		$	20,047,986		$	19,148,075
Total average assets	$	23,304,836		$	22,997,408		$	21,917,339
Total average equity	$	2,681,899		$	2,644,005		$	2,461,524
	Year ended
(In thousands)(Unaudited)	December 31, 2023			December 31, 2022
Interest-earning assets:	Average Balance		Average Yield/Rate (1)	Average Balance		Average Yield/Rate (1)
Loans (1)	$	18,763,271	6.02%	$	17,631,943	4.55%
Taxable investment securities		1,558,877	3.32%		1,321,346	2.14%
FHLB stock		18,620	7.25%		17,629	6.26%
Deposits with banks		1,141,720	5.16%		1,261,833	1.58%
Total interest-earning assets	$	21,482,488	5.78%	$	20,232,751	4.21%
Interest-bearing liabilities:
Interest-bearing demand deposits	$	2,388,080	1.71%	$	2,471,256	0.33%
Money market deposits		3,164,739	2.72%		4,902,357	0.81%
Savings deposits		1,070,405	0.83%		1,118,967	0.08%
Time deposits		8,849,293	3.75%		5,398,808	1.04%
Total interest-bearing deposits	$	15,472,517	3.02%	$	13,891,388	0.76%
Other borrowed funds		505,218	5.15%		247,276	2.73%
Long-term debt		119,136	5.44%		119,136	4.66%
Total interest-bearing liabilities		16,096,871	3.11%		14,257,800	0.82%
Non-interest-bearing demand deposits		3,705,788			4,386,526
Total deposits and other borrowed funds	$	19,802,659		$	18,644,326
Total average assets	$	22,705,192		$	21,383,739
Total average equity	$	2,610,582		$	2,453,391

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

CATHAY GENERAL BANCORP
GAAP to NON-GAAP RECONCILIATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)

The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.

		As of
		December 31, 2023		September 30, 2023		December 31, 2022
		(In thousands) (Unaudited)
Stockholders' equity	(a)	$	2,736,574	$	2,638,736	$	2,474,040
Less: Goodwill			(375,696)		(375,696)		(375,696)
Other intangible assets (1)			(4,461)		(4,725)		(5,757)
Tangible equity	(b)	$	2,356,417	$	2,258,315	$	2,092,587
Total assets	(c)	$	23,081,534	$	22,844,529	$	21,947,976
Less: Goodwill			(375,696)		(375,696)		(375,696)
Other intangible assets (1)			(4,461)		(4,725)		(5,757)
Tangible assets	(d)	$	22,701,377	$	22,464,108	$	21,566,523
Number of common shares outstanding	(e)		72,668,927		72,586,992		72,742,151
Total stockholders' equity to total assets ratio	(a)/(c)		11.86%		11.55%		11.27%
Tangible equity to tangible assets ratio	(b)/(d)		10.38%		10.05%		9.70%
Tangible book value per share	(b)/(e)	$	32.43	$	31.11	$	28.77
		Three Months Ended						Twelve Months Ended
		December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
		(In thousands) (Unaudited)
Net Income		$	82,526	$	82,371	$	97,601	$	354,124	$	360,642
Add: Amortization of other intangibles			262		270		1,191		1,294		2,007
Tax effect of amortization adjustments (2)			(78)		(80)		(353)		(384)		(595)
Tangible net income	(f)	$	82,710	$	82,561	$	98,439	$	355,034	$	362,054
Return on tangible common equity (3)	(f)/(b)		14.04%		14.62%		18.82%		15.07%		17.30%

⁽¹⁾ Includes core deposit intangibles and mortgage servicing.

⁽²⁾ Applied the statutory rate of 29.65%.

⁽³⁾ Annualized.

Contacts

Heng W. Chen
(626) 279-3652

EX-99.2

Exhibit 99.2

 Financial Earnings   Results  Fourth Quarter and Full Year 2023  January 24, 2024 

 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 clients 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 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 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, 2022, 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.  2 

 Financial Highlights 4Q 2023  Quarterly results ending   December 31, 2023  Net Income  $82.5 million  Diluted EPS  $1.13   Total Revenue  $205.2 million  Total Loans  $19.5 billion  Total Deposits  $19.3 billion  Efficiency Ratio  53.84%  3  * Refer to GAAP to non-GAAP reconciliation in Appendix. 

 Summary Highlights: 4Q and Full Year 2023 Results  4  Note: Information as of 12.31.23 and 9.30.23 are unaudited.  * Gross Loans, net of fees 

 Summary Balance Sheets  5  Note: Information as of 12.31.23 and 9.30.23 are unaudited. 

 Loan Composition  Total Loan Portfolio  $19.5 billion   as of 12.31.23  Total CRE $9.7 billion  Residential Mortgage* $6.1 billion  C&I Loans $3.3 billion   Construction Loans $0.4 billion  6  * Residential Mortgage includes equity lines, installment and other loans. 

 Commercial Real Estate Portfolio  Total CRE  $9.7 billion   50% of total loans  7  * Residential Mortgage includes equity lines, installment and other loans. 

 LTV & Size by Property Type  Commercial Real Estate Portfolio  8 

 Selected CRE and Construction Loan Portfolios  weighted avg. LTV 54%  weighted avg. LTV 49%  weighted avg. LTV 55%  9 

 Selected CRE and Construction Loan Portfolios (cont’d)  10  weighted avg. LTV 48%  Central Business District (CBD) – Central Business/Financial Centers (mainly city downtowns)  Urban – City and metropolitan areas  Suburban – Outside of the city/metropolitan area 

 Geographic Distribution of Residential Mortgage  Residential Mortgage Portfolio  11  * Residential Mortgage includes equity lines, installment and other loans. 

 Allowance for Loan and Lease Losses (ALLL)  12 

 Asset Quality Metrics  Allowance coverage of loans HFI: 0.79% as of 12/31/23 vs. 0.81% as of 9/30/23.  Nonaccrual loans/loans HFI: 0.34% as of 12/31/23 vs. 0.40% as of 9/30/23.   Classified Loans are loans classified as substandard and doubtful.  13  Non-Performing Assets (NPA) = Non-accrual Loans + OREO 

 Deposit Mix  Total Deposits  $19.3 billion   as of 12.31.23  14 

 Summary Income Statements  15  Note: Information for quarter ending 12.31.23 and 9.30.23 are unaudited. Totals may not foot due to rounding. 

 Loan Yields, Deposit Costs and Net Interest Income  16 

 Non-Interest Income  17  $ in millions  Non-Interest Income*  * Non-interest income excludes net gains/(losses) from equity securities.  

 Operating Expense & Efficiency  18 

 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 $37.66 as of 12.31.23: +3.60% compared to 9.30.23 and +10.73% YoY.   Tangible Book Value* Per Common Share is $32.43 as of 12.31.23: +4.20% compared to 9.30.23 and +12.72% YoY.   Capital Return on Shareholder  common stock dividend: $0.34/share quarterly, or $1.36/share annualized.   19  * Refer to GAAP to non-GAAP reconciliation in Appendix. 

 Management Guidance Full Year 2024  20  The guidance provided above is based on a number of assumptions that management believes to be reasonable and reflects our expectations as of the date of this presentation. Actual results may differ materially from these estimates as a result of various factors, and we refer to the cautionary language regarding “forward-looking statements” included in this presentation when considering this information.  Full Year 2024 Guidance  Compared with 2023 Actual  Full Year  2023 Actual  Loans,   end of period   Estimated growth rate 4% to 5%.  $19.5 billion  +7.1% YoY  Deposits  Estimated growth rate 4% to 5%.  $19.3 billion  +4.4% YoY  Core   Noninterest Expense  Estimated growth rate 3.0% to 3.5%.  $279.8 million  +9.6% YoY  NIM  Estimated to range between 3.15% and 3.25%.  3.45%  Tax Rate  Effective tax rate for 2024 estimated between 20.0% and 21.0%.  Solar amortization estimated to be $6.5 million for 2024; $6.0 million in Q1 and $0.5 in Q2.  Effective tax rate for the full year was 12.25%.  Solar amortization was $47.9 million. 

 Appendix 

 We use certain non-GAAP financial measures to provide supplemental information regarding our performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, we have included them below for discussion.  Appendix: GAAP to Non-GAAP Reconciliation   Selected Consolidation Financial Information ($ in thousands) (unaudited)  22 

XML

Document and Entity Information	Jan. 24, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 24, 2024
Entity Registrant Name	CATHAY GENERAL BANCORP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-31830
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
Entity Emerging Growth Company	false
Entity Central Index Key	0000861842
Title of 12(b) Security	Common Stock
Trading Symbol	CATY
Security Exchange Name	NASDAQ