Acquisition

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 of which

$100

million was deferred and paid on

November 14, 2017

and

$35.4

million was deferred and will be released over the next

three

years. On

December 12, 2017,

additional cash consideration of

$4.1

million was paid based on the realized gain from the sale of the building that housed FENB’s former Alhambra, California branch. SinoPac Bancorp was merged into Cathay General Bancorp on

July 17, 2017

and subsequently, on

October 27, 2017,

FENB was merged into Cathay Bank. 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

July 14, 2017

acquisition date.

We have included the financial results of the business combinations in the condensed consolidated statement of income beginning on the acquisition date. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. We made significant estimates and exercised significant judgement in estimating fair values and accounting for such acquired assets and liabilities. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting.

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

July 14, 2017

are shown below:

	SinoPac Bancorp
Assets acquired :
Cash and cash equivalents	$	166,932
Short-term investments		122,000
Securities available-for-sale		88,044
FHLB and FRB stock		19,890
Loans		705,792
Premises and equipment		6,239
Cash surrender value of life insurance		46,083
Deferred tax assets, net		40,690
Core deposit intangible		6,122
Accrued interest receivable and other assets		10,689
Total assets acquired		1,212,481
Liabilities assumed:
Deposits		813,888
Advances from the Federal Home Loan Bank		30,000
Accrued interest payable and other liabilities		8,512
Total liabilities assumed		852,400
Net assets acquired	$	360,081


Cash paid	$	285,324
Fair value of common stock issued		34,862
Total consideration paid	$	320,186

Purchase price payable to SinoPa c		34,267
Total consideration	$	354,453
Gain from acquisition	$	5,628