Business Combinations

July 14, 2017,

the Company completed the acquisition of SinoPac Bancorp, the parent of Far East National Bank (FENB), pursuant to a Stock Purchase Agreement, dated

as of

July 8, 2016,

by and between the Company and Bank SinoPac Co. Ltd. Under the terms of the Stock Purchase Agreement, the Company purchased all of the issued and outstanding share capital of SinoPac Bancorp for an aggregate purchase price of

$351.6

million plus additional post closing payments based on the realization of certain assets of FENB. The Company issued

926,192

shares of common stock as consideration and the remainder of the consideration is payable in cash. Pursuant to the Stock Purchase Agreement, (i)

$100

million of the purchase price was deferred and will be released within

one

year based on the timing of the contemplated merger of FENB into Cathay Bank and (ii)

10%

of the purchase price was held back and will be released over a period of

three

years following the closing of the acquisition, subject to any indemnity claims. Founded in

1974,

FENB offers a wide range of financial services. The acquisition allowed the Company to expand its number of branches in California. As of

July 14, 2017,

FENB operated

nine

branches in California, and a representative office in Beijing. The acquisition will be accounted for as a business combination, subject to the provisions of ASC

805

50,

Business Combinations.

The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the J

uly

14,

2017

acquisition date. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. We have included the financial results of the business combinations in the condensed consolidated statement of income beginning on the acquisition date. The purchase accounting adjustments are preliminary and subject to finalization during the

one

-year measurement period from the date of the acquisition.

The fair value of the assets and the liabilities acquired as of

July 1

2017

are shown below:

	SinoPac Bancorp
Assets acquired:
Cash and cash equivalents	$	166,932
Short-term investments		122,000
Securities available-for-sale		107,934
Loans		703,787
Premises and equipment		6,198
Cash surrender value of life insurance		46,083
Deferred tax assets, net		40,136
Core deposit intangible		7,144
Accrued interest receivable and other assets		9,134
Total assets acquired		1,209,348

Liabilities assumed:
Deposits		813,888
Long-term debt		30,000
Accrued interest payable and other liabilities		5,608
Total liabilities assumed		849,496
Net assets acquired	$	359,852


Cash paid	$	181,241
Fair value of common stock issued		34,862
Total consideration paid	$	216,103

Purchase price payable to SinoPac		138,309
Total consideration	$	354,412
Gains on bargain purchase	$	5,440