Cathay General Bancorp (CATY) to Acquire Bank SinoPac in $340M Deal

Cathay General Bancorp (Nasdaq: CATY) and Bank SinoPac Co. Ltd. announced that they have signed a Stock Purchase Agreement for Cathay to acquire SinoPac Bancorp, the U.S. subsidiary of Bank SinoPac, for $340 million subject to certain adjustments.

SinoPac Bancorp, through its subsidiary Far East National Bank ("FENB"), operates five branches in Los Angeles, one in Orange County, two in San Francisco, and one in Silicon Valley. As of March 31, 2016, SinoPac Bancorp reported, on a consolidated basis, total assets of $1.3 billion, total loans of $956 million, and total deposits of $964 million.

"We are very excited about this transaction and the additional scale it adds to our franchise in Los Angeles, our home market, as well as Orange County, San Francisco, and Silicon Valley and the opportunity to deploy a portion of our capital to generate strong returns," stated Mr. Dunson K. Cheng, Chairman of the Board, Chief Executive Officer, and President of Cathay. "Cathay Bank and Far East National Bank share similar attributes and business values, and we look forward to servicing customers of Far East National Bank and hope they will enjoy the additional products and services that Cathay Bank has to offer."

"SinoPac and Cathay General Bancorp have worked closely together and in good faith to complete this transaction. We are pleased with the effort both sides have put into this process. We believe this transaction is mutually beneficial for both groups and we look forward to working with Cathay to provide valuable services to our customers in the future," stated Mr. Michael Chang, President of Bank SinoPac.

Under the terms of the Stock Purchase Agreement the purchase price will be subject to an adjustment based on the net gain from the sale of certain real estate owned by FENB. The aggregate consideration mix paid to Bank SinoPac will be at least 90% cash, with Cathay having the option to pay up to 10% in Cathay common stock. $100 million of the purchase price will be held back and released based on the timing of the subsequent merger of FENB and Cathay Bank and 10% of the purchase price will be held back and released over a period of three years.

The exchange ratio for determining the number of shares of Cathay common stock deliverable to Bank SinoPac will float based on the volume weighted average closing price of Cathay's common stock for the 20 full trading days ending on the third business day immediately preceding the closing date.

The transaction is expected to be completed during the first half of 2017. The transaction is subject to regulatory approvals and other customary closing conditions.

The transaction is not expected to result in the creation of any additional goodwill and is expected to be approximately 4-5% accretive to Cathay's GAAP earnings per share, excluding any one-time transaction costs and restructuring charges.

RBC Capital Markets served as financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to Cathay. Morgan Stanley served as financial advisor and Lee and Li Attorneys-at-Law and Davis Polk & Wardwell, LLP served as legal counsel to Bank SinoPac.

An investor presentation related to this transaction is available at Cathay's website, www.cathaygeneralbancorp.com. Cathay General Bancorp will host a conference call this morning to discuss the transaction. The call will begin at 8:00 a.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 46677247. 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.

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