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, 2021. The Company reported net income of $75.3 million, or $0.98 per share, for the fourth quarter of 2021, and net income of $298.3 million, or $3.80 per share, for the year ended December 31, 2021.

FINANCIAL PERFORMANCE

	Three months ended			Year ended December 31,
(unaudited)	December 31, 2021	September 30, 2021	December 31, 2021	2021	2020
Net income	$75.3 million	$72.4 million	$70.9 million	$298.3 million	$228.9 million
Basic earnings per common share	$0.98	$0.93	$0.89	$3.81	$2.88
Diluted earnings per common share	$0.98	$0.93	$0.89	$3.80	$2.87
Return on average assets	1.48%	1.45%	1.50%	1.52%	1.22%
Return on average total stockholders' equity	12.12%	11.61%	11.75%	12.11%	9.70%
Efficiency ratio	41.77%	43.85%	49.61%	43.92%	47.65%

HIGHLIGHTS

Record net income of $298.3 million and EPS of $3.80 per share in 2021.
Quarterly earnings per share increased 10.1% compared to same quarter in 2020.
Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $444.6 million or 11.4% annualized, in the fourth quarter.
Total deposits for the quarter increased $1.1 billion, or 24.7% annualized.
Total deposits, excluding time deposits, increased for the year by $3.1 billion, or 33.0%, to $12.5 billion from $9.4 billion in 2020.

"For the fourth quarter of 2021, total loans, excluding PPP loans, increased by $444.6 million, or 11.4% annualized. During 2021, we repurchased 3,986,057 shares at an average cost of $41.92 per share, for a total of $167.1 million as of December 31, 2021," commented Chang M. Liu, President and Chief Executive Officer of the Company.

FOURTH QUARTER INCOME STATEMENT REVIEW

Net income for the quarter ended December 31, 2021, was $75.3 million, an increase of $4.4 million, or 6.3%, compared to net income of $70.9 million for the same quarter a year ago. Diluted earnings per share for the quarter ended December 31, 2021, increased by 10.1%, or $0.98 per share, compared to $0.89 per share for the same quarter a year ago.

Net interest income before provision for credit losses

Net interest income before provision for credit losses increased $15.6 million, or 11.2%, to $155.5 million during the fourth quarter of 2021, compared to $139.8 million during the same quarter a year ago. The increase was due primarily to a decrease in interest expense from deposits and an increase in interest income from loans and securities.

The net interest margin was 3.23% for the fourth quarter of 2021 compared to 3.12% for the fourth quarter of 2020 and 3.22% for the third quarter of 2021.

For the fourth quarter of 2021, the yield on average interest-earning assets was 3.52%, the cost of funds on average interest-bearing liabilities was 0.41%, and the cost of interest-bearing deposits was 0.37%. In comparison, for the fourth quarter of 2020, the yield on average interest-earning assets was 3.74%, the cost of funds on average interest-bearing liabilities was 0.86%, and the cost of interest-bearing deposits was 0.80%. The decrease in the yield on interest-bearing liabilities resulted mainly from lower interest rates on deposits driven by the lower repricing of maturing time deposits in the fourth quarter. The decrease in the yield on average interest-earning assets resulted mainly from lower interest rates on loans due to the lower 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 3.11% for the quarter ended December 31, 2021, compared to 2.88% for the same quarter a year ago.

Provision/Reversal for credit losses

As permitted under the Coronavirus, Aid, Relief and Economic Security Act (the "CARES Act") and as extended by the Consolidated Appropriations Act, 2021, the Company adopted the Current Expected Credit Losses ("CECL") methodology for estimated credit losses effective as of January 1, 2021. The Company recorded a provision for credit losses of $3.5 million in the fourth quarter of 2021 compared with $3.1 million in the third quarter of 2021 and reversal for credit losses of $5.0 million in the fourth quarter of 2020. The fourth quarter provision for credit losses was primarily driven by loan growth. As of December 31, 2021, the allowance for loan losses increased by $4.2 million to $136.2 million, or 0.83% of gross loans, compared to $131.9 million, or 0.83% of gross loans as of September 31, 2021. The change in the allowance for loan losses during the fourth quarter of 2021 included a $4.5 million provision for loan losses, and $287.7 thousand in net charge-offs. The Company will continue to monitor the continuing impact of the COVID-19 pandemic on credit risks and losses, as well as on customer deposits and other liabilities and assets.

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

	Three months ended						Year ended December 31,
	December 31, 2021		September 30, 2021		December 31, 2020		2021		2020
	(In thousands) (Unaudited)
Charge-offs:
Commercial loans	$	552	$	2,649	$	8,613	$	20,051	$	21,996
Real estate loans ⁽¹⁾		—		3		—		3		—
Total charge-offs		552		2,652		8,613		20,054		21,996
Recoveries:
Commercial loans		160		121		912		1,706		7,267
Construction loans		—		76		—		76		—
Real estate loans⁽¹⁾		104		144		109		661		543
Total recoveries		264		341		1,021		2,443		7,810
Net charge-offs	$	288	$	2,311	$	7,592	$	17,611	$	14,186

(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), wire transfer fees, and other sources of fee income, was $19.8 million for the fourth quarter of 2021, an increase of $8.4 million, or 73.0%, compared to $11.5 million for the fourth quarter of 2020. The increase was primarily due to a $3.7 million gain on distribution from venture capital investments, a $2.5 million increase in derivative fees, and $1.4 million increase in wealth management fees, when compared to the same quarter a year ago.

Non-interest expense

Non-interest expense decreased $1.8 million, or 2.5%, to $73.2 million in the fourth quarter of 2021 compared to $75.0 million in the same quarter a year ago. The decrease in non-interest expense in the fourth quarter of 2021 was primarily due to a decrease of $4.4 million in amortization expense of investments in low-income housing and alternative energy partnerships offset, in part, by an increase of $2.3 million in salaries and employee benefits and an increase of $1.0 million in acquisition, integration and reorganization costs, when compared to the fourth quarter of 2020. 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 41.8% in the fourth quarter of 2021 compared to 49.6% for the same quarter a year ago.

Income taxes

The effective tax rate for the fourth quarter of 2021 was 23.6% compared to 12.7% for the fourth quarter of 2020. The effective tax rate includes the impact of alternative energy investments and low-income housing tax credits.

BALANCE SHEET REVIEW

Gross loans were $16.3 billion at December 31, 2021, an increase of $698.1 million, or 4.5%, from $15.6 billion at December 31, 2020. The increase was primarily due to increases of $588.2 million, or 7.8%, in commercial mortgage loans, $296.0 million, or 11.4%, in commercial loans, not including PPP loans, and an increase of $36.6 million, or 0.9%, in residential mortgage loans, offset, in part, by a decrease of $150.4 million, or 62.4%, in PPP loans, and $68.5 million, or 10.1%, in real estate construction loans. For the fourth quarter of 2021, total loans, excluding PPP loans, increased by $444.6 million, or 11.4% annualized. Loan fees recognized on PPP loans were $2.3 million in the fourth quarter of 2021 compared to $5.8 million in the third quarter, $2.7 million in second quarter and $2.5 million in the first quarter of 2021. As of December 31, 2021, the remaining deferred loan fees on PPP loans was $643.0 thousand.

The loan balances and composition as of December 31, 2021, compared to September 30, 2021 and December 31, 2020, are presented below:

	December 31, 2021			September 30, 2021			December 31, 2020
	(In thousands) (Unaudited)
Commercial loans	$	2,891,914		$	2,702,333		$	2,595,926
Paycheck protection program loans		90,485			169,360			240,907
Residential mortgage loans		4,182,006			4,144,789			4,145,389
Commercial mortgage loans		8,143,272			7,835,528			7,555,027
Equity lines		419,487			433,206			424,555
Real estate construction loans		611,031			688,195			679,492
Installment and other loans		4,284			3,370			3,100
Gross loans	$	16,342,479		$	15,976,781		$	15,644,396

Allowance for loan losses		(136,157	)		(131,945	)		(166,538	)
Unamortized deferred loan fees		(4,321	)		(3,835	)		(2,494	)
Total loans, net	$	16,202,001		$	15,841,001		$	15,475,364

Total deposits were $18.1 billion as of December 31, 2021, an increase of $1.9 billion, or 12.1%, from $16.1 billion as of December 31, 2020. The increases in noninterest-bearing demand deposits, NOW deposits, money market deposits and savings deposits resulted from higher liquidity maintained by our depositors during these uncertain times and improved money market deposit generation from corporate accounts. The decreases in time deposits resulted primarily from the runoff of wholesale time deposits.

The deposit balances and composition as of December 31, 2021, compared to September 30, 2021 and December 31, 2020, are presented below:

	December 31, 2021		September 30, 2021		December 31, 2020
	(In thousands) (Unaudited)
Non-interest-bearing demand deposits	$	4,492,054	$	4,024,504	$	3,365,086
NOW deposits		2,522,442		2,202,956		1,926,135
Money market deposits		4,611,579		4,132,912		3,359,191
Savings deposits		915,515		920,138		785,672
Time deposits		5,517,252		5,726,360		6,673,317
Total deposits	$	18,058,842	$	17,006,870	$	16,109,401

As a result of the 12.1% increase in deposits year over year, our loan to deposits ratio decreased from 96% to 90%. As the majority of the increase was in non-CD deposits, our asset liability sensitivity has become more asset sensitive during 2021.

ASSET QUALITY REVIEW

As of December 31, 2021, total non-accrual loans were $65.8 million, a decrease of $1.8 million, or 2.7%, from $67.7 million as of December 31, 2020, and a decrease of $2.8 million, or 4.1%, from $68.7 million as of September 30, 2021.

The allowance for loan losses was $136.2 million and the allowance for off-balance sheet unfunded credit commitments was $7.1 million as of December 31, 2021. 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 0.83% of period-end gross loans, and 202.4% of non-performing loans as of December 31, 2021. The comparable ratios were 1.06% of period-end gross loans, and 229.18% of non-performing loans as of December 31, 2020.

The changes in non-performing assets and troubled debt restructurings as of December 31, 2021, compared to December 31, 2020 and September 30, 2021, are presented below:

(Dollars in thousands) (Unaudited)	December 31, 2021			December 31, 2020			% Change		September 30, 2021			% Change
Non-performing assets
Accruing loans past due 90 days or more	$	1,439		$	4,982		(71	)	$	4,333		(67	)
Non-accrual loans:
Construction loans		—			4,286		(100	)		5,491		(100	)
Commercial mortgage loans		38,173			33,715		13			36,968		3
Commercial loans		16,558			23,087		(28	)		17,098		(3	)
Residential mortgage loans		11,115			6,596		69			9,125		22
Total non-accrual loans:	$	65,846		$	67,684		(3	)	$	68,682		(4	)
Total non-performing loans		67,285			72,666		(7	)		73,015		(8	)
Other real estate owned		4,368			4,918		(11	)		5,251		(17	)
Total non-performing assets	$	71,653		$	77,584		(8	)	$	78,266		(8	)
Accruing troubled debt restructurings (TDRs)	$	12,837		$	27,721		(54	)	$	24,406		(47	)

Allowance for loan losses	$	136,157		$	166,538		(18	)	$	131,945		3
Total gross loans outstanding, at period-end	$	16,342,479		$	15,644,396		4		$	15,976,781		2

Allowance for loan losses to non-performing loans, at period-end		202.36	%		229.18	%				180.71	%
Allowance for loan losses to gross loans, at period-end		0.83	%		1.06	%				0.83	%

The ratio of non-performing assets to total assets was 0.3% as of December 31, 2021, compared to 0.4% as of December 31, 2020. Total non-performing assets decreased $5.9 million, or 7.6%, to $71.7 million as of December 31, 2021, compared to $77.6 million as of December 31, 2020, primarily due to a decrease of $3.5 million, or 71.1%, in accruing loans past due 90 days or more.

CAPITAL ADEQUACY REVIEW

As of December 31, 2021, the Company's Tier 1 risk-based capital ratio of 12.80%, total risk-based capital ratio of 14.41%, and Tier 1 leverage capital ratio of 10.40%, 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, 2020, the Company's Tier 1 risk-based capital ratio was 13.52%, total risk-based capital ratio was 15.45%, and Tier 1 leverage capital ratio was 10.94%.

FULL YEAR REVIEW

Net income for the year ended December 31, 2021, was $298.3 million, an increase of $69.4 million, or 30.3%, compared to net income of $228.9 million for the year ended December 31, 2020. Diluted earnings per share for the year ended December 31, 2021 was $3.80 compared to $2.87 per share for the year ended December 31, 2020. The net interest margin for the year ended December 31, 2021, was 3.22% compared to 3.12% for the year ended December 31, 2020.

Return on average stockholders' equity was 12.11% and return on average assets was 1.52% for the year ended December 31, 2021, compared to a return on average stockholders' equity of 9.7% and a return on average assets of 1.22% for the year ended December 31, 2020. The efficiency ratio for the year ended December 31, 2021, was 43.92% compared to 47.65% for the year ended December 31, 2020.

CONFERENCE CALL

Cathay General Bancorp will host a conference call to discuss its fourth quarter and year-end 2021 financial results this afternoon, Thursday, January 27, 2022, 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 1-855-761-3186 and enter Conference ID 9375967. A presentation to accompany the earnings call will be available at www.cathaygeneralbancorp.com. A listen-only live Webcast of the call will be available at www.cathaygeneralbancorp.com and a recorded version is scheduled to be available for replay for 12 months after the call.

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 37 branches in California, 10 in New York State, four in Washington State, two in Illinois, two in Texas, one in each of Maryland, Massachusetts, Nevada, New Jersey, and Hong Kong, and a representative office in Taipei, Beijing, and Shanghai. Cathay Bank's website is at 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 (such as the COVID-19 pandemic) 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 including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act; 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 (such as the COVID-19 pandemic) 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, 2020 (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, 2021			September 30, 2021			December 31, 2020			2021			2020

FINANCIAL PERFORMANCE
Net interest income before (reversal)/provision for credit losses	$	155,452		$	152,484		$	139,820		$	597,755		$	552,110
(Reversal)/provision for credit losses		3,500			3,050			(5,000	)		(16,008	)		57,500
Net interest income after (reversal)/provision for credit losses		151,952			149,434			144,820			613,763			494,610
Non-interest income		19,804			12,216			11,451			54,603			42,820
Non-interest expense		73,197			72,215			75,046			286,523			283,465
Income before income tax expense		98,559			89,435			81,225			381,843			253,965
Income tax expense		23,234			17,038			10,332			83,539			25,105
Net income	$	75,325		$	72,397		$	70,893		$	298,304		$	228,860

Net income per common share
Basic	$	0.98		$	0.93		$	0.89		$	3.81		$	2.88
Diluted	$	0.98		$	0.93		$	0.89		$	3.80		$	2.87

Cash dividends paid per common share	$	0.34		$	0.31		$	0.31		$	1.27		$	1.24


SELECTED RATIOS
Return on average assets		1.48	%		1.45	%		1.50	%		1.52	%		1.22	%
Return on average total stockholders' equity		12.12	%		11.61	%		11.75	%		12.11	%		9.70	%
Efficiency ratio		41.77	%		43.85	%		49.61	%		43.92	%		47.65	%
Dividend payout ratio		34.50	%		33.34	%		34.80	%		33.30	%		43.12	%


YIELD ANALYSIS (Fully taxable equivalent)
Total interest-earning assets		3.52	%		3.56	%		3.74	%		3.59	%		3.96	%
Total interest-bearing liabilities		0.41	%		0.48	%		0.86	%		0.52	%		1.14	%
Net interest spread		3.11	%		3.08	%		2.88	%		3.07	%		2.82	%
Net interest margin		3.23	%		3.22	%		3.12	%		3.22	%		3.12	%


CAPITAL RATIOS	December 31, 2021			September 30, 2021			December 31, 2020
Tier 1 risk-based capital ratio		12.80	%		13.29	%		13.52	%
Total risk-based capital ratio		14.41	%		14.93	%		15.45	%
Tier 1 leverage capital ratio		10.40	%		10.67	%		10.94	%
	.						.			.

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share data)			December 31, 2021			September 30, 2021			December 31, 2020

Assets
Cash and due from banks			$	134,141		$	156,287		$	138,616
Short-term investments and interest bearing deposits				2,315,563			1,667,875			1,282,462
Securities available-for-sale (amortized cost of $1,126,867 at December 31, 2021, $1,073,074 at September 30, 2021 and $1,019,230 at December 31, 2020)				1,127,309			1,079,216			1,036,550
Loans				16,342,479			15,976,781			15,644,396
	Less:	Allowance for loan losses		(136,157	)		(131,945	)		(166,538	)
		Unamortized deferred loan fees, net		(4,321	)		(3,835	)		(2,494	)
		Loans, net		16,202,001			15,841,001			15,475,364
Equity securities				22,319			20,117			23,744
Federal Home Loan Bank stock				17,250			17,250			17,250
Other real estate owned, net				4,368			5,251			4,918
Affordable housing investments and alternative energy partnerships, net				299,211			313,517			309,016
Premises and equipment, net				99,402			100,344			102,998
Customers' liability on acceptances				8,112			13,185			13,753
Accrued interest receivable				56,994			56,844			59,032
Goodwill				372,189			372,189			372,189
Other intangible assets, net				4,627			4,831			5,434
Right-of-use assets-operating leases				27,834			29,179			30,919
Other assets				195,403			183,354			170,889
	Total assets		$	20,886,723		$	19,860,440		$	19,043,134

Liabilities and Stockholders' Equity
Deposits
Non-interest-bearing demand deposits			$	4,492,054		$	4,024,504		$	3,365,086
Interest-bearing deposits:
NOW deposits				2,522,442			2,202,956			1,926,135
Money market deposits				4,611,579			4,132,912			3,359,191
Savings deposits				915,515			920,138			785,672
Time deposits				5,517,252			5,726,360			6,673,317
Total deposits				18,058,842			17,006,870			16,109,401

Advances from the Federal Home Loan Bank				20,000			20,000			150,000
Other borrowings for affordable housing investments				23,145			23,197			23,714
Long-term debt				119,136			119,136			119,136
Acceptances outstanding				8,112			13,185			13,753
Lease liabilities - operating leases				30,694			32,028			33,484
Other liabilities				180,544			182,733			175,502
Total liabilities				18,440,473			17,397,149			16,624,990
Stockholders' equity				2,446,250			2,463,291			2,418,144
Total liabilities and equity			$	20,886,723		$	19,860,440		$	19,043,134

Book value per common share			$	32.29		$	31.89		$	30.41
Number of common shares outstanding				75,750,862			77,240,215			79,508,265

CATHAY GENERAL BANCORP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three months ended								Year ended December 31,
	December 31, 2021		September 30, 2021			December 31, 2020			2021			2020
	(In thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loan receivable, including loan fees	$	164,062	$	163,948		$	163,618		$	649,224		$	677,193
Investment securities		4,188		3,707			3,469			14,151			20,599
Federal Home Loan Bank stock		261		258			217			991			952
Deposits with banks		678		714			292			2,145			1,830
Total interest and dividend income		169,189		168,627			167,596			666,511			700,574

INTEREST EXPENSE
Time deposits		7,179		9,299			19,416			40,542			111,629
Other deposits		4,957		5,243			5,725			21,259			25,396
Advances from Federal Home Loan Bank		146		146			1,180			1,182			5,299
Long-term debt		1,455		1,455			1,455			5,773			5,791
Deferred payments from acquisition		—		—			—			—			115
Short-term borrowings		—		—			—			—			234
Total interest expense		13,737		16,143			27,776			68,756			148,464

Net interest income before (reversal)/provision for credit losses		155,452		152,484			139,820			597,755			552,110
(Reversal)/provision for credit losses		3,500		3,050			(5,000	)		(16,008	)		57,500
Net interest income after (reversal)/provision for credit losses		151,952		149,434			144,820			613,763			494,610

NON-INTEREST INCOME
Net gains/(losses) from equity securities		2,202		3			780			(1,426	)		(1,148	)
Securities gains, net		—		—			542			853			1,695
Letters of credit commissions		1,867		1,764			1,749			7,103			6,741
Depository service fees		1,477		1,401			1,271			5,584			4,949
Other operating income		14,258		9,048			7,109			42,489			30,583
Total non-interest income		19,804		12,216			11,451			54,603			42,820

NON-INTEREST EXPENSE
Salaries and employee benefits		33,878		33,437			31,545			132,795			124,022
Occupancy expense		5,176		5,136			5,199			20,318			20,634
Computer and equipment expense		3,456		3,175			2,915			13,549			11,133
Professional services expense		6,968		6,232			6,270			23,666			21,856
Data processing service expense		3,185		3,524			3,893			13,607			14,897
FDIC and State assessments		1,937		1,830			2,145			7,132			8,999
Marketing expense		1,643		945			1,334			6,913			5,224
Other real estate owned expense/(income)		146		(88	)		138			343			(3,091	)
Amortization of investments in low income housing and alternative energy partnerships		10,784		12,411			15,228			45,447			58,225
Amortization of core deposit intangibles		172		172			172			687			687
Cost associated with debt redemption		—		—			693			732			693
Acquisition, integration and reorganization costs		949		476			—			1,425			—
Other operating expense		4,903		4,965			5,514			19,909			20,186
Total non-interest expense		73,197		72,215			75,046			286,523			283,465

Income before income tax expense		98,559		89,435			81,225			381,843			253,965
Income tax expense		23,234		17,038			10,332			83,539			25,105
Net income	$	75,325	$	72,397		$	70,893		$	298,304		$	228,860
Net income per common share:
Basic	$	0.98	$	0.93		$	0.89		$	3.81		$	2.88
Diluted	$	0.98	$	0.93		$	0.89		$	3.80		$	2.87

Cash dividends paid per common share	$	0.34	$	0.31		$	0.31		$	1.27		$	1.24
Basic average common shares outstanding		76,566,481		77,846,424			79,540,694			78,268,369			79,584,560
Diluted average common shares outstanding		76,914,817		78,153,408			79,834,150			78,570,638			79,777,847

CATHAY GENERAL BANCORP AVERAGE BALANCES – SELECTED CONSOLIDATED FINANCIAL INFORMATION (Unaudited)

	Three months ended
(In thousands)	December 31, 2021				September 30, 2021				December 31, 2020
Interest-earning assets	Average Balance		Average Yield/Rate ⁽¹⁾		Average Balance		Average Yield/Rate ⁽¹⁾		Average Balance		Average Yield/Rate ⁽¹⁾
Loans ⁽¹⁾	$	16,130,896	4.04	%	$	15,798,496	4.12	%	$	15,569,490	4.18	%
Taxable investment securities		1,152,596	1.44	%		1,058,004	1.39	%		1,073,058	1.29	%
FHLB stock		17,250	6.00	%		17,250	5.93	%		17,250	5.00	%
Deposits with banks		1,779,275	0.15	%		1,893,785	0.15	%		1,156,764	0.10	%
Total interest-earning assets	$	19,080,017	3.52	%	$	18,767,535	3.56	%	$	17,816,562	3.74	%

Interest-bearing liabilities
Interest-bearing demand deposits	$	2,217,341	0.08	%	$	2,109,632	0.10	%	$	1,694,831	0.15	%
Money market deposits		4,393,816	0.39	%		4,228,025	0.43	%		3,295,103	0.59	%
Savings deposits		932,678	0.08	%		914,540	0.07	%		797,438	0.11	%
Time deposits		5,604,073	0.51	%		5,882,576	0.63	%		6,687,731	1.15	%
Total interest-bearing deposits	$	13,147,908	0.37	%	$	13,134,773	0.44	%	$	12,475,103	0.80	%
Other borrowed funds		43,186	1.34	%		43,246	1.34	%		237,467	1.98	%
Long-term debt		119,136	4.85	%		119,136	4.84	%		119,136	4.86	%
Total interest-bearing liabilities		13,310,230	0.41	%		13,297,155	0.48	%		12,831,706	0.86	%
Non-interest-bearing demand deposits		4,162,906				3,830,485				3,365,075
Total deposits and other borrowed funds	$	17,473,136			$	17,127,640			$	16,196,781

Total average assets	$	20,176,429			$	19,812,508			$	18,843,635
Total average equity	$	2,466,363			$	2,473,223			$	2,400,494

	Year ended
(In thousands)	December 31, 2021				December 31, 2020
Interest-earning assets	Average Balance		Average Yield/Rate ⁽¹⁾		Average Balance		Average Yield/Rate ⁽¹⁾
Loans ⁽¹⁾	$	15,827,550	4.10	%	$	15,500,910	4.37	%
Taxable investment securities		1,046,187	1.35	%		1,215,957	1.69	%
FHLB stock		17,250	5.74	%		17,300	5.50	%
Deposits with banks		1,649,564	0.13	%		960,276	0.19	%
Total interest-earning assets	$	18,540,551	3.59	%	$	17,694,443	3.96	%

Interest-bearing liabilities
Interest-bearing demand deposits	$	2,047,177	0.11	%	$	1,591,924	0.18	%
Money market deposits		4,034,246	0.45	%		2,903,837	0.74	%
Savings deposits		897,663	0.09	%		759,581	0.13	%
Time deposits		5,979,191	0.68	%		7,268,738	1.54	%
Total interest-bearing deposits	$	12,958,277	0.48	%	$	12,524,080	1.09	%
Other borrowed funds		75,516	1.57	%		326,023	1.73	%
Long-term debt		119,136	4.85	%		119,136	4.86	%
Total interest-bearing liabilities		13,152,929	0.52	%		12,969,239	1.14	%
Non-interest-bearing demand deposits		3,751,626				3,158,828
Total deposits and other borrowed funds	$	16,904,555			$	16,128,067

Total average assets	$	19,591,538			$	18,736,854
Total average equity	$	2,463,021			$	2,359,735

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

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Cathay General Bancorp Announces Fourth Quarter and Full Year 2021 Results