Inspired by
our customers.
Powering
their journey.
2018 Annual Report
Installation of the new logo.
More than half a century ago, Cathay Bank opened our doors to serve the growing Chinese American community in Los Angeles.
We helped our customers put down new roots with cars and homes. We supported their businesses, which continue to
sustain generations. We worked with them to cultivate communities united by a shared drive to create and build lives in
Southern California.
Over time, we’ve expanded along with our customers. Cathay General Bancorp is the holding company for Cathay Bank,
and is publicly held (Nasdaq: CATY), with $16.8 billion in assets.
Cathay Bank has 64 branches across the United States, as well as outposts in Hong Kong, Beijing, Shanghai, and Taipei.
While the people we serve have evolved and changed, the spirit of what makes up our customers remains the same. Every
one believes in the power of initiative and perseverance. Each aims to achieve what’s possible. All strive to live their best
lives. And we’re happy to work alongside them—providing the tools and services to get them where they want to go.
Introduction
The journey
continues.
Personal banking. Home loans. Commercial financing.
Every customer is on a journey, ready to achieve
what’s next.
Cathay Bank is here to support these dreams with
hard work and heart. Customer experience remains
our priority, as it has for more than 50 years. Powered
by well-trained employees, Cathay Bank works closely
with customers, providing the tools and services to
get them where they want to go.
Customers want agility, and we’ve responded with
innovations in digital banking and online mortgage
applications. Communities want support, and
we’ve responded with grants and financial literacy
workshops. We’re inspired by the drive of our customers,
and Cathay Bank is here to power their journey.
2018 Annual Report
1
Financial Highlights
Financial
highlights
(Dollars in thousands, except per share data)
2018
2017
Amount
Percentage
Increase/(Decrease)
For the Year
Net income
Net income per common share
Cash dividends paid per common share
At Year-End
Investment securities
Loans, net
Assets
Deposits
Stockholders’ equity
Book value per common share
Profitability Ratios
Return on average assets
Return on average stockholders’ equity
Capital Ratios
Common equity Tier 1 capital
Tier 1 capital ratio
Total capital ratio
Leverage ratio
$
271,885
3.33
1.03
$ 1,242,509
13,871,832
16,784,737
13,702,340
2,121,866
26.36
1.70%
13.18%
12.43%
12.43%
14.15%
10.83%
$
176,042
2.17
0.87
$ 95,843
1.16
0.16
$ 1,333,626
12,743,766
15,640,186
12,689,893
1,973,304
24.26
$ (91,117)
1,128,066
1,144,551
1,012,447
148,562
2.10
54.4%
53.5%
18.4%
(6.8)%
8.9%
7.3%
8.0%
7.5%
8.7%
1.19%
9.10%
12.19%
12.19%
14.11%
10.35%
Net Income
(in millions)
Assets
(in millions)
Stockholders’ Equity
(in millions)
$
2
7
2
,
$
1
6
7
8
5
,
$
1
5
6
4
0
$
1
4
5
2
1
,
,
$
1
3
2
5
4
$
2
,
1
2
2
$
1
,
9
7
3
$
1
,
7
4
8
$
1
,
8
2
9
$
1
7
5
$
1
7
6
$
1
6
1
2015
2016
2017
2018
2015
2016
2017
2018
2015
2016
2017
2018
2
Cathay General Bancorp
Letter to Stockholders
Dear fellow
stockholders,
We are pleased to report that Cathay General Bancorp
achieved record net income of $271.9 million for the
year, an increase of 54.4% from $176.0 million in 2017,
as well as record earnings per share of $3.33 in 2018.
Gross loans totaled $14.0 billion as of December 31, 2018, growing by
8.5% or $1.1 billion, showing particular strength in residential mortgage
loans, with an increase of $631.8 million, or 20.6%; growth in commercial
loans of $280.7 million, or 11.4%; and commercial mortgage loans increasing
$241.5 million, or 3.7%. Our deposits grew by 8.0%, or $1.0 billion, for total
deposits of $13.7 billion as of December 31, 2018. Total assets increased
by $1.2 billion to $16.8 billion as of year-end 2018. Our net interest margin
increased to 3.79% in 2018, compared with 3.63% in 2017.
Our capital ratios remain strong and positioned for growth. As of
December 31, 2018, our common equity Tier 1 capital ratio of 12.43%,
Tier 1 risk-based capital ratio of 12.43%, total risk-based capital ratio
of 14.15%, and Tier 1 leverage capital ratio of 10.83%, calculated under
the Basel III capital rules, continue to place the Company in the “well
capitalized” category for regulatory purposes.
In October 2018, we announced the adoption of an additional share
repurchase program, authorizing the Company to repurchase up to
$45,000,000 of the Company’s common stock. We resumed our share
buyback program in the fourth quarter 2018, repurchasing 1.1 million
shares of our common stock at an average price of $38.25. We increased
our dividend to $0.31 per share in the fourth quarter of 2018, the fifth
increase in four years.
2018 Annual Report
3
Letter to Stockholders
We believe the Cathay business model is clearly working. We are fortunate to
have motivated, well-trained employees who continue to deliver a unique
banking experience. They reinforce a strong brand identity that attracts
new customers while retaining existing customers. Our reputation in the
industry has also helped us attract skilled relationship managers who are
creating new customer connections. As we invest in training, technology,
and brand awareness, our efficiency ratio improved to 44.25% at year-end.
“We are fortunate to have motivated,
well-trained employees who continue to
deliver a unique banking experience.”
The strength of our team creates the confidence needed to pursue
our goals, such as frictionless banking and a digital transformation
that delivers the best customer experience. In 2018, our Cathay Home
Lending online application portal debuted, in order to further solidify our
strength in residential mortgages. We provide home mortgages for all
types of families, including nonresidents and first-time homebuyers.
We’re also focused on financing the American dream, from providing
specialized lending for private equity firms supporting the next innovation
to working capital lines for companies in the food, healthcare, and
entertainment industries. These businesses may be long-standing or
newly founded by immigrants, and Cathay Bank continues to support
the diversity found in communities in our footprint. The Cathay Bank
Foundation augments our commitment to local communities with
$3 million distributed in 2018.
The Cathay Bank team is also sharing another valuable commodity:
their time. Employees volunteered for over 4,000 hours helping low-
and moderate-income families, youth, teens, and seniors by providing
financial literacy programs, workforce development efforts, and
supporting community based organizations.
Looking ahead, we are focused on several factors. The U.S.–China trade
negotiations continue. Interest-rate trends are unclear. The economy
is sending mixed signals about its strength and for how long growth
4
Cathay General Bancorp
Letter to Stockholders
will continue. And it is more important than ever to maintain a stable,
motivated management team and enthusiastic, productive employees.
But we are ready to confront any challenge as we always do—with hard
work and heart.
We continue to maintain our reputation in the local communities we
serve across nine states, as a strong niche bank and Top 10 nationally
as ranked by Forbes’ 2019 Best Banks in America.
We look forward to another year of growth in 2019. We will diligently
watch trends and carefully study data in order to make the best decisions.
We will keep an eye on opportunities for optimization of our U.S. footprint
in the coming year. And we will always remember that it’s a “people
business.” We will be there for customers. And we will be there for our
employees—equipping our people for excellence, developing their
talent to seize tomorrow’s opportunities.
We would like to thank you, our stockholders, for your consistent trust
and confidence. We are grateful that you are part of our journey. And the
management team remains dedicated to continuing our track record
of stability, growth, and performance.
Sincerely,
Dunson K. Cheng
Executive Chairman of the Board
Pin Tai
CEO and President
2018 Annual Report
5
CEO and President Pin Tai proudly accepted the Corporate
Award from the New Jersey Chinese-American Chamber of
Commerce, in recognition of Cathay Bank’s business achievements
and community service.
In collaboration with Operation HOPE and its Founder,
Chairman, and CEO John Hope Bryant, Cathay Bank hosts
a HOPE Inside financial education office in a separate suite
at our Westminster branch location in Orange County,
California—the first in an Asian community nationwide.
Milestones and
accomplishments
Cathay Bank collaborates with UCLA Anderson Forecast to produce the
quarterly U.S.–China Economic Report. The report provides insights and a future
outlook on interactions between the two largest economies in the world.
Cathay is ranked #10 on Forbes’ “2019
Best Banks in America” list, rising two spots
from last year. This is the fourth consecutive
year the company has been ranked within the
top 20 on the list.
Foothill Family Services recognized Cathay
Bank as its first Corporate Honoree for our
philanthropic leadership in the San Gabriel Valley,
California, which includes providing customized
financial planning seminars to Foothill Family
clients and employees.
Cathay Bank Foundation distributed $3 million in 2018. One of many initiatives
included HIRE LA’s Youth program, a Los Angeles city program creating a pipeline
for young Angelenos ages 14 to 24 to have their first job experience.
Milestones and
accomplishments
Boys & Girls Clubs of West San Gabriel Valley,
California, selected Cathay Bank as the recipient of
its inaugural Corporate Partnership Award, prompted
by our continued educational support for students in
grades 6 to 12.
Cathay Bank launched a Vendor Diversity Program with the goal of
fostering business opportunities for companies owned by minorities,
women, LGBTQ persons, the disabled, and veterans. The program includes
development of a bank database of local suppliers.
2018 Annual Report
7
Branding and Guiding Principles
The new Cathay Bank logo was installed at the
Corporate Center in November 2018.
Make it personal.
Make it powerful.
The Cathay Bank brand experienced a renewal in 2018. Our employees
have been successful in bringing our brand promise to life and living
our guiding principles: make it personal, inspire confidence, work
together, get it done.
The Cathay Bank Walk, located at the Corporate
Center in El Monte, California, showcases the
bank’s founding; growth and expansion; leadership;
brand purpose, promise, and guiding principles;
community involvement; and employees.
We bring honesty, integrity, and authenticity to every
interaction. And we look ahead to future possibilities,
focusing on the way to put people on a path to success.
This welcoming, flexible approach helps us respond
more quickly to customers while adapting more rapidly
to a changing marketplace.
Cathay Bank is committed to delivering the best
customer experience by demonstrating a genuine
interest in the unique background, story, and journey
of every customer.
From our economic outlook events and insights in
the Cathay Bank | UCLA Anderson Forecast U.S.–China
Report to our new museum-quality Cathay Bank Walk
exhibition at our Corporate Center, we are committed to
sharing our story with existing and new customers alike
and introducing them to the Cathay way.
8
Cathay General Bancorp
Cathay’s Corporate Center is parallel to the 10 Freeway in Los Angeles,
and the prominent top-of-building logo signage is visible for miles.
Customer Experience and Training
New branches.
True experience.
Cathay Bank continues to optimize its service network. Three new
branches opened in 2018—two in Southern California (Temple City
and Irvine Northwood) and one in Seattle, Washington.
The Irvine Northwood Branch—the third Cathay location in Irvine—
celebrated its grand opening on November 3, 2018. A live broadcast on
Los Angeles radio station KAZN AM 1300 covered the ceremonies at
Irvine Northwood and Temple City, held on the same day.
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Cathay Bank’s success can be attributed to our commitment to strategic leadership and our investment in employee
Cathay Bank’s success can be attributed to our commitment to strategic leadership and our investment in employee
development. The Senior Leadership Cohort Program was initiated to accelerate the development of selected senior leaders—to
development. The Senior Leadership Cohort Program was initiated to accelerate the development of selected senior leaders—to
build successorship and prepare our next generation of leaders.
build successorship and prepare our next generation of leaders.
Cathay Bank is ready to deliver a unique experience.
Our new branches bring a new service style to customers,
with traditional teller lines being replaced by comfortable
reception areas. This setting creates the opportunity for
more personalized attention, provided by a Relationship
Banker with broad banking knowledge. Personal banking
for individuals. Cash management for businesses.
Specialized lending for corporate growth.
Knowledgeable team members are another big
part of the experience. Cathay Bank is serious about
accelerating the development of senior leadership.
Cathay Bank also facilitates an annual Officer Trainee
Program and Operations Career Pathway Program
for customer service and sales managers. Succession
planning is a significant challenge in the business world,
and Cathay is responding with programs designed to
cultivate the next generation of leaders.
The Temple City Branch grand opening
on November 3, 2018, included Facebook
Live streaming the festivities.
2018 Annual Report
11
Digital Transformation
Cathay Mobile Banking Apps for iPhone®, iPad®, and
Android™ devices provide convenience and easy access
to bank accounts for consumers and businesses.
Customer expectations.
Cathay innovations.
Digital transformation is a priority at Cathay Bank. Today’s customers
demand a frictionless banking experience that is fast and easy. We’ve
responded by activating multiple digital initiatives in 2018, including
the establishment of a Digital Banking Department.
Social media campaigns attract visitors to
follow Cathay Bank on WeChat, the most widely
used social media platform in China. Cathay Bank
is also on Facebook, LinkedIn, and YouTube.
Cathay Online Banking helps customers manage
finances more efficiently, with a comprehensive set of
financial management tools.
The Cathay Home Lending digital mortgage application
portal is another powerful tool. Customers can apply for
a mortgage loan online, then track loan status, upload
documents, and e-sign disclosures from their mobile
device. This kind of innovation helps customers manage
their finances with greater speed and efficiency.
Important strides were also made with social media
in 2018, with the launch of a Cathay Bank WeChat
account that features lifestyle articles and other
interesting stories. This will create heightened brand
awareness among users worldwide, as WeChat is the
leading social media platform in China.
12
Cathay General Bancorp
Cathay Home Lending provides a convenient, time-saving way to apply
for a mortgage online. Users can get a rate quote immediately, and even
nonresidents can apply online.
Core Lending and Specialties
Traditional strengths.
Emerging specialties.
Commercial real estate and residential lending remain long-standing
strengths of Cathay Bank, followed by middle market commercial
and industrial (C&I) and specialty lending to drive growth.
Cathay Bank remains a leader in commercial real estate lending, with
$6.7 billion in commercial mortgage loans, $2.7 billion in commercial loans,
and $581 million in real estate construction loans as of December 31, 2018.
The Professional Loan joins our Smart Business Lending lines of credit and SBA Guaranteed Loan Program, which are all
geared to giving small businesses access to capital in order to grow.
2018 saw the first full year of our Oil and Gas Group,
focused primarily on reserve-based lending, along
with a new Funds Finance lending specialty, providing
subscription and bridge capital call financing to fund
sponsors. This diversification into different products
and industries provides expanded opportunities
for our corporate banking division.
Specialty lending requires a different mind-set.
So Cathay Bank has assembled diverse teams from
many different industries. All with specialty lending
experience. All sharing the commitment to delivering
a great customer experience.
Cathay Bank introduced the Professional Loan in
2018 as a new way to help small businesses like
physicians, dentists, optometrists, CPAs, and attorneys.
The loan can be used for operations, equipment, debt
consolidation, adding personnel, and marketing.
Our Oil and Gas Group works directly
with independent producers, as well as with
other lenders, to provide revolving loans to
fund drilling.
2018 Annual Report
15
Commitment to Community
Team Cathay had 150 participants in its 10th year at the
Walk for Hope on November 4, 2018, at the City of Hope campus in
Duarte, California. City of Hope is leading the fight against cancer
through research, treatment, and education.
Stronger communities.
Inclusive opportunities.
The Cathay Bank Foundation is a nonprofit organization focused on
enhancing the growth and success of local communities. The ultimate
objective is to create opportunities in affordable housing, community
and economic development, and education.
Cathay Bank employees proudly wear red shirts
when volunteering, representing our giving spirit
and heart.
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Working with nonprofit organization Operation HOPE,
Cathay Bank welcomes the first HOPE Inside location
in Orange County, California, in a separate suite at our
Westminster branch location, in a primarily Vietnamese
community. Staffed by Operation HOPE well-being
coaches, the center provides free, one-on-one credit and
money management counseling services, supporting
financial literacy while creating opportunities for the
community to thrive.
2018 was another great year of fundraising for local
communities. Team Cathay generated more than
$60,000 at the annual Walk for Hope event, in support
of the fight against cancer at City of Hope. Our 42nd
Annual Charity Golf Tournament raised more than
$118,000 for local organizations in the Greater Los
Angeles Area. And Cathay Bank sponsored a statue of
the late Bruce Lee—a symbol of perseverance unveiled
during the 80th anniversary celebration of Los Angeles
Chinatown and its revitalization.
Corporate Information
Corporate information
Board of Directors
Dunson K. Cheng
Executive Chairman of the
Board of Cathay General
Bancorp and Cathay Bank
Peter Wu
Vice Chairman of the Board
of Cathay General Bancorp
and Cathay Bank
Anthony M. Tang
Vice Chairman of the Board
of Cathay General Bancorp
and Cathay Bank
Michael M.Y. Chang
Retired Attorney and former
Secretary of Cathay General
Bancorp and Cathay Bank
Kelly L. Chan
VP of Finance, Phoenix
Bakery Inc., and Certified
Public Accountant
Nelson Chung
President of Pacific
Communities Builder, Inc.
Felix S. Fernandez
Retired Banker
Jane Jelenko
Retired Financial Services
Partner of KPMG LLP
Ting Y. Liu
Retired Investor
Joseph C.H. Poon
President of Edward
Properties, LLC
Cathay General
Bancorp
Dunson K. Cheng
Executive Chairman
of the Board
Peter Wu
Vice Chairman of the Board
Anthony M. Tang
Vice Chairman of the Board
Pin Tai
Chief Executive
Officer and President
Director Emeritus
Patrick S.D. Lee
Heng W. Chen
Executive Vice
President, Chief Financial
Officer, and Treasurer
Lisa L. Kim
Executive Vice
President, General Counsel,
and Secretary
Richard Sun
President of SSS
Development, Inc.
Pin Tai
Chief Executive Officer and
President of Cathay General
Bancorp and Cathay Bank
Cathay Bank
Executive Officers
Dunson K. Cheng
Executive Chairman
of the Board
Pin Tai
Chief Executive Officer,
President, and Director of
Cathay Bank
Irwin Wong
Senior Executive Vice
President and Chief
Administrative Officer
Heng W. Chen
Executive Vice President
and Chief Financial Officer
Chang M. Liu
Executive Vice President
and Chief Operating Officer
Kim R. Bingham
Executive Vice President
and Chief Risk Officer
Mark H. Lee
Executive Vice President
and Chief Credit Officer
Lisa L. Kim
Executive Vice President,
General Counsel, and
Secretary
Other Executive
Vice Presidents
Matthew Bonaccorso
Executive Vice President
and Chief Lending Officer
Eddie Chang
Executive Vice President
and Manager, Corporate
Commercial Real Estate and
Construction Lending
Shu-Yuan Lai
Executive Vice President
and Chief Lending Officer
Thomas Lo
Executive Vice President,
Director of Commercial and
International Banking
Allen Peng
Executive Vice President and
Chief Retail Administrator
Veronica Tsang
Executive Vice President and
Chief Retail Administrator
Jennifer L. Powells
Executive Vice President
and Chief Human Resources
Officer
Marisa DeRojas
Executive Vice President,
Director of Financial Crimes
Risk Management
Kelly Wu
Executive Vice President,
Head of Corporate Banking
Division
777 North Broadway
Los Angeles, CA 90012
T 213 625 4700
F 213 625 1368
cathaygeneralbancorp.com
cathaybank.com
Serving more
customers in more
places
Founded in 1962, Cathay Bank
offers a wide range of financial
services. Cathay Bank operates
in nine states, with branches
in California, Illinois, Maryland,
Massachusetts, Nevada, New
Jersey, New York, Texas, and
Washington State, as well as
Hong Kong.
Three new branches opened
in 2018—two in Southern
California (Temple City and
Irvine Northwood) and one in
Seattle, Washington.
Our Beijing Representative
Office was approved in
March 2018.
Texas
Houston
Plano
Washington
Bellevue
Kent
Seattle
Overseas
Hong Kong
Overseas
Representative
Offices
Beijing
Shanghai
Taipei
United States
California
Alhambra
Arcadia
Artesia
City of Industry
Cupertino
Diamond Bar
Dublin
El Monte
Fountain Valley
Fremont
Irvine
Los Angeles
Millbrae
Milpitas
Monterey Park
Northridge
Oakland
Ontario
Orange
Rancho Cucamonga
Richmond
Rowland Heights
Sacramento
San Diego
San Francisco
San Gabriel
San Jose
Temple City
Torrance
Union City
West Covina
Westminster
Illinois
Chicago
Westmont
Maryland
Rockville
Massachusetts
Boston
Nevada
Las Vegas
New Jersey
Edison
New York
Brooklyn
Elmhurst
Flushing
New York City
Forward Looking Statement
Our annual report includes 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. We intend such forward-
looking statements to be covered by the safe harbor for forward-looking statements in these provisions. All statements other than statements of
historical fact are “forward-looking statements” for purposes of federal and state securities laws. Words such as “aims,” “anticipates,” “believes,”
“can,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “optimistic,” “plans,” “predicts,” “possible,” “potential,” “projects,”
“seeks,” “shall,” “should,” “will,” and variations of these words and similar expressions are intended to identify these forward-looking statements.
Forward-looking statements by us 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. These and other factors are described in our Annual Report on Form
10-K (at Item 1A in particular) for the year ended December 31, 2018; in other reports filed with the Securities and Exchange Commission (the “SEC”);
and in other filings we make with the SEC from time to time. Given these risks and uncertainties, readers are cautioned not to place undue reliance
on any forward-looking statements, which speak to the date of this annual report. We have no intention and undertake no obligation to update
any forward-looking statements or to publicly announce any revision of any forward-looking statements to reflect future developments or events,
except as required by law.
Cathay General Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018, and other filings with the SEC are available at
the website maintained by the SEC at www.sec.gov or by request directed to Cathay General Bancorp, 9650 Flair Drive, El Monte, CA 91731;
Attention: Investor Relations; telephone 626 279 3296. These reports and filings are also available at www.cathaygeneralbancorp.com.
The information on the websites of Cathay General Bancorp and Cathay Bank is not part of this Annual Report.
Cathay Bank, Member FDIC, is an Equal Housing Lender.
FDIC insurance coverage is limited to deposit accounts at Cathay Bank’s U.S. domestic branch locations.
Non-Deposit Investment Products are NOT A DEPOSIT | NOT FDIC INSURED | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NO BANK
GUARANTEE | MAY LOSE VALUE.