Cathay General Bancorp's Business Segments

Cathay General Bancorp is a corporation that was organized in 1990 under the laws of the State of Delaware. We are the holding company of Cathay Bank, a California state-chartered commercial bank, seven limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner, GBC Venture Capital, Inc, and Asia Realty Corp. We also own 100% of the common stock of five statutory business trusts created for the purpose of issuing capital securities. In the future, we may become an operating company or acquire savings institutions, other banks, or companies engaged in bank-related activities and may engage in such other activities or acquire such other businesses as may be permitted by applicable law. Our principal place of business is currently located at 777 North Broadway, Los Angeles, California 90012, and our telephone number at that location is (213) 625-4700. In addition, certain of our administrative offices are located in El Monte, California, and our address there is 9650 Flair Drive, El Monte, California 91731. Our common stock is traded on the NASDAQ Global Select Market and our trading symbol is “CATY”.

Cathay General Bancorp, the parent corporation of Cathay Bank, offers a comprehensive array of financial products and services tailored to meet the diverse needs of its clientele, which includes individuals, small and medium-sized businesses, and larger enterprises. The bank’s services can be segmented into several key categories, including commercial loans, residential mortgages, consumer banking products, and specialized lending services.

1. Commercial Lending

Commercial Mortgage Loans
Cathay Bank provides commercial mortgage loans primarily secured by first deeds of trust on various commercial properties. The portfolio encompasses:
- Retail Properties: Shopping centers and standalone retail establishments.
- Industrial Properties: Owner-occupied industrial facilities and multi-tenanted industrial spaces.
- Office Buildings: Class A and B properties designed for business use.
- Residential Investments: Multi-unit apartments and hotels also form a part of the lending mix.

The bank also extends medium-term commercial mortgage loans for properties that the borrower utilizes for business operations or derives income from tenants.

Commercial Loans
The bank supports various commercial and professional businesses through short-term loans, often structured to mature within one year. Notable aspects include:
- Working Capital: Lines of credit aimed at financing day-to-day operational expenses and trade.
- Market Focus: Special emphasis on small-to-mid-sized businesses within the bank’s geographic regions.
- Syndication Opportunities: The bank collaborates with other financial institutions on larger loans (typically above $25 million) to manage credit exposure.

Pricing for commercial loans is typically tied to the prime rate or the bank’s reference rate.

SBA Loans
Cathay Bank holds the preferred lenderstatus with the U.S. Small Business Administration (SBA), allowing it to facilitate expedited loan processing:
- 7(a) Program: Covers a range of general business purposes, including real estate acquisition and working capital.
- 504 Program: Focuses on long-term fixed asset financing, such as buildings and large equipment.

The SBA guarantee enhances the collateral position, providing additional security for both the bank and borrowers.

Residential Mortgage Lending

Residential Mortgage Loans
The bank offers a wide range of residential mortgage products:
- Types of Loans: These include conforming, non-conforming, and jumbo mortgages.
- Structures: Fixed-rate and adjustable-rate mortgages are available, secured by first or subordinate liens on primary residences.

Loan underwriting adheres to stringent guidelines based on the borrower’s financial background, property appraisal values, and regulatory requirements. The bank typically sells conforming fixed-rate mortgages to Government Sponsored Entities while retaining other mortgage products in its portfolio.

Real Estate Construction Loans
Cathay Bank provides short-term financing specifically for:
- Residential Projects: Targeted towards individuals and developers focusing on multi-unit construction.
- Commercial Construction: Loans for high-net-worth clients for office and warehouse developments.

The underwriting process evaluates project viability, borrower creditworthiness, and construction experience, utilizing independent appraisers and monitoring project progress through inspections.

Consumer Banking Products

Home Equity Lines of Credit (HELOCs)
These are variable-rate credit lines secured by the borrower’s home, designed for:
- Personal Financing Needs: Including home improvement, debt consolidation, and general personal expenses.
Rates are generally tied to prevailing prime rates.

Installment Loans
These fixed-rate loans cater primarily to consumers for:
- Automotive Purchases: Financing for vehicle acquisition and other personal use cases.
- Loan Structuring: Maturities range from one to six years, allowing flexible repayment terms.

Additional Services
Beyond traditional lending products, Cathay General Bancorp also offers:
- Treasury Management Services: Tailored solutions for businesses to manage cash flow efficiently.
- International Banking Services: Supporting customers with foreign transactions and trade financing.
- Financial Advisory: Guidance services to assist customers with investment and financial planning needs.

Conclusion
Cathay General Bancorp operates with a robust framework and a diverse product suite designed to fulfill a wide spectrum of banking and financial needs. Its lending policies prioritize thorough evaluation processes, ensuring responsible lending practices while catering to individual and commercial borrowers alike. The bank’s commitment to serving its community and client base is reflected in its varied offerings, competitive pricing, and client-centered service approach.