Note 17 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

17.

     

Employee Benefit Plans

    

Employee Stock Ownership Plan.

Under the Company’s Amended and Restated Cathay Bank Employee Stock Ownership Plan (“ESOP”), the Company can make annual contributions to a trust in the form of either cash or common stock of the Bancorp for the benefit of eligible employees. Employees are eligible to participate in the ESOP after completing

two

years of service for salaried full-time employees or

1,000

 hours for each of

two

consecutive years for salaried part-time employees. The amount of the annual contribution is discretionary except that it must be sufficient to enable the trust to meet its current obligations. The Company also pays for the administration of this plan and of the trust. The Company has not made contributions to the trust since

2004

and does not expect to make any contributions in the future. Effective

June

17,

2004,

the ESOP was amended to provide the participants the election either to reinvest the dividends on the Company stock allocated to their accounts or to have these dividends distributed to the participant. The ESOP trust purchased

19,377

shares in

2016,

18,012

shares in

2015,

and

11,887

shares in

2014,

of the Bancorp’s common stock at an aggregate cost of

$600,000

in

2016,

$541,000

in

2015,

and

$301,902

in

2014

. The distribution of benefits to participants totaled

103,367

shares in

2016,

107,202

shares in

2015,

and

73,439

shares in

2014.

As of

December

31,

2016,

the ESOP owned

918,360

shares

, or

1.2%

, of the Company’s outstanding common stock.

401(k)

Plan.

In

1997,

the Board approved the Company’s

401(k)

Profit Sharing Plan, which began on

March

 

1,

1997.

Salaried employees who have completed

three

months of service and have attained the age of

21

are eligible to participate. Enrollment dates are on the

first

of each month. Participants

may

contribute up to

75%

of their eligible compensation for the year but not to exceed the dollar limit set by the Internal Revenue Code. Participants

may

change their contribution election on the enrollment dates. The vesting schedule for the matching contribution is

0%

for less than

two

years of service,

25%

after

two

years of service and from then on, at an increment of

25%

each year until

100%

is vested after

five

 years of service. Effective on

October

1,

2014,

the Company matches

100%

on the

first

4.0%

of eligible compensation contributed per pay period by the participant, after

one

year of service. The Company’s contribution amounted to

$2.1

million in

2016,

$2.0

million in

2015,

and

$1.4

million in

2014.

The Plan allows participants to withdraw all or part of their vested amount in the Plan due to certain financial hardship as set forth in the Internal Revenue Code and Treasury Regulations. Participants

may

also borrow up to

50%

of the vested amount, with a maximum of

$50,000.

The minimum loan amount is

$1,000.