What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-29 · 47 added, 24 removed, 561 unchanged (11% of the section changed)

12 unchanged sentences

Cathay Capital Trust I, Cathay Statutory Trust I, Cathay Capital Trust II, Cathay Capital Trust III and Cathay Capital Trust IV.

The Bancorp established Cathay Capital Trust I in June 2003, Cathay Statutory Trust I in September 2003, Cathay Capital Trust II in December 2003, Cathay Capital Trust III in March 2007, and Cathay Capital Trust IV in May 2007 (collectively, the “Trusts”) as wholly-owned subsidiaries.

The Trusts are statutory business trusts.

7 unchanged sentences

For a discussion of those risks, see “Business of the Bank — Competition” below under this Item 1.

Due to the limited nature of the Bancorp’s activities as a bank holding company, the Bancorp currently does not employ any persons other than the Bancorp’s management, which includes the Chief Executive Officer and President, Executive Chairman, the Chief Financial Officer, the Corporate Secretary and General Counsel, and the Assistant Corporate Secretary.

Due to the limited nature of the Bancorp’s activities as a bank holding company, the Bancorp currently does not employ any persons other than the Bancorp’s corporate officers, which includes the Chief Executive Officer and President, Executive Chairman, the Chief Financial Officer, the Corporate Secretary, General Counsel and Sustainability Officer, and the Assistant Corporate Secretary.

See also “Business of the Bank — Employees ” below under this Item 1 where we describe human capital management matters for Cathay Bank.

6 unchanged sentences

Deposit accounts at the Hong Kong branch are not insured by the FDIC.

Each branch has loan approval rights subject to the branch manager’s authorized lending limits.

Current activities of the Beijing, Shanghai, and Taipei representative offices are limited to coordinating the transportation of documents to the Bank’s head office and performing liaison services.

21 unchanged sentences

Commercial real estate loans (also known as CRE loans) are typically secured by first deeds of trust on commercial properties.

Our commercial real estate portfolio includes primarily commercial retail properties, shopping centers, and owner-occupied industrial facilities, and, secondarily, office buildings, multiple-unit apartments, hotels, and multi-tenanted industrial properties.

Our commercial real estate portfolio includes primarily commercial real estate, commercial retail properties, office buildings, warehouse, and owner-occupied industrial facilities, and, secondarily, hotels, multiple-unit apartments, and multi-tenanted industrial properties.

The Bank also makes medium-term commercial real estate loans which are generally secured by commercial or industrial buildings where the borrower uses the property for business purposes or derives income from tenants.

52 unchanged sentences

The Bank offers a variety of deposit products to meet its clients’ needs.

As of December 31, 2023, the Bank offered passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits.

As of December 31, 2024, the Bank offered savings accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits.

These products are priced generally to promote growth of deposits in a safe and sound manner.

20 unchanged sentences

In California, one larger Chinese-American bank competes for loans and deposits with the Bank and at least two super-regional banks compete with the Bank for deposits.

In addition, there are many other banks that target the Chinese-American communities in both Southern and Northern California.

In addition, there are many other banks that target the Chinese-American communities in New York and in both Southern and Northern California.

Banks from the Pacific Rim countries, such as Taiwan, Hong Kong, and China, also continue to open branches in the Los Angeles area, thus increasing competition in the Bank’s primary markets.

8 unchanged sentences

To achieve this level of value creation, we believe we must strive to find, develop and keep a world-class workforce.

We invest in our employees by providing quality training and learning opportunities, promoting inclusion and diversity, and upholding a high standard of ethics and respect for human rights.

We invest in our employees by providing quality training and learning opportunities, promoting inclusion and talent recruitment and retention, and upholding a high standard of ethics and respect for human rights.

As of December 31, 2024, Cathay Bank employed approximately 1,266 regular full-time equivalent employees, of whom 1,226 were located in the United States and 40 were located in China, Hong Kong and Taiwan.

1 unchanged sentence

None of the employees are represented by a union.

Diversity and Inclusion

Inclusion and diversity are the cultural hallmarks of Cathay Bank.

We benefit from the diversity of our staff offering a multiplicity of viewpoints, backgrounds and experiences, in service of our clients and the commercial and financial industries in which we work.

Our staff comprise of a diverse mixture of different genders, races, ethnic backgrounds, religions, sexual orientations, cultures and primary languages.

Our commitment to diversity enables us to draw from a remarkable wealth of talent to recruit and retain the best employees to provide innovative solutions for our clients' banking needs.

The Bank is continuing its efforts to expand gender diversity on the Bank’s Board, and senior management.

In 2023, 80% of our employees are of Asian descent, 13% are members of non-Asian traditionally underrepresented racial/ethnic groups, and 7% are Caucasian.

At the manager-level, 73% are of Asian descent, 13% are members of non-Asian traditionally underrepresented racial/ethnic groups, and 14% are Caucasian.

Talent Strategy and Inclusion

Talent recruitment and inclusion are the cultural hallmarks of Cathay Bank.

We benefit from our staff offering a multiplicity of viewpoints, backgrounds and experiences, in service of our clients and the commercial and financial industries in which we work.

Our commitment to talent recruitment and retention enables us to draw from a remarkable wealth of talent to recruit and retain the best employees to provide innovative solutions for our clients' banking needs.

The Bank is continuing its efforts on talent and inclusion with the Bank’s Board, and senior management.

In 2024, 79% of our employees are of Asian descent, 14% are members of non-Asian minority groups, and 7% are Caucasian.

At the manager-level, 72% are of Asian descent, 14% are members of non-Asian minority groups, and 14% are Caucasian.

55% of our management-level positions are held by women, and 64% of our employees are women.

Our 12 member Board of Directors consists of 11 members of traditionally underrepresented racial/ethnic groups descent and a quarter of the Board seats are held by women.

Our commitment to diversity and inclusion extends to our community.

Our 14 member Board of Directors consists of 12 members of minority racial/ethnic group descent and 36% of the Board seats are held by women.

Our commitment to inclusion extends to our community.

We invest in affordable housing and renewable energy projects;

in addition, we offer community checking and various affordable home ownership and loan programs serving the underbanked, and routinely engage in collaboration with local nonprofit organizations working together to build and cultivate lives in low-to-moderate income communities.

We also promote diversity and inclusion among our supplier base, through the Cathay Bank Vendor Diversity Program.

The program promotes the use of suppliers owned by minority, women, and small businesses, to help contribute to long-term economic sustainability in our communities.

We also promote inclusion among our supplier base, through the Cathay Bank Vendor Program.

The program promotes the inclusiveness of the use of a wide range of suppliers to help contribute to long-term economic sustainability in our communities.

Grow, Engage and Elevate

35 unchanged sentences

Chief Financial Officer of the Bank since 2004.

Chief Risk Officer of the Bank since 2014;

Executive Vice President of the Bank since 2004;

Chief Credit Officer of the Bank from 2004 to 2013.

Executive Vice President and Chief Risk Officer of the Bank since January 21, 2025;

Executive Vice President, Head of Operational Risk for its Basel Operational Risk Program from 2018 to 2023 as well as Chief Ethics and Conduct Officer from 2022 to 2023 at Bank of the West which was acquired by Bank of Montreal in 2023;

Executive Vice President, Head of International Risk Oversight at Wells Fargo from 2013 to 2017;

and Managing Director, Head of Global Compliance Strategy, Technology and Operations at JPMorgan Chase from 2008 to 2013.

Executive Vice President and Chief Credit Officer of the Bank since January 2024;

150 unchanged sentences

In June 2020, the federal agencies adopted new regulations that exempted venture capital funds from the definition of “covered funds” under the Volcker Rule, so the Bancorp’s remaining venture capital funds can be held indefinitely.

We believe that the Volcker Rule will not require any material changes in our operations or business or security holdings.

We believe that the Volcker Rule does not require any material changes in our operations or business or security holdings.

The Dodd-Frank Act provided for the creation of the CFPB as an independent entity within the Federal Reserve with broad rulemaking, supervisory, and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans and credit cards.

100 unchanged sentences

The Federal Deposit Insurance Act (FDI Act) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023.

See further discussion under Operation Risks.

See further discussion under Operational Risks.

Holders of the Bancorp’s common stock are entitled to receive dividends as and when declared by the board of directors out of funds legally available therefore under the laws of the State of Delaware.

55 unchanged sentences

Risk Factors for a further discussion of risks related to regulations and liabilities.

Climate-Related Risk Management

In recent years, the federal banking agencies have increased their focus on climate-related risks affecting the operations of banks, the communities they serve and the broader financial system.

The agencies have begun to enhance their supervisory expectations regarding banks’ climate risk management practices, including by proposing guidance that would encourage banking organizations to, among other things:

evaluate the potential impact of climate-related risks on the bank’s financial condition, operations and business objectives as part of its strategic planning process;

account for the effects of climate change in stress testing scenarios and systemic risk assessments;

revise expectations for credit portfolio concentrations based on climate-related factors;

and prepare for the transition risks to the bank associated with the adjustment to a low-carbon economy and related changes in laws, regulations, governmental policies, technology, and consumer behavior and expectations.

In October 2023, the federal banking agencies released interagency guidance, “Principles for Climate-Related Financial Risk Management for Large Financial Institutions” (the “Principles”), which are intended to encourage banking organizations with $100 billion or more in assets to focus on key aspects of climate-related financial risk management.

The Principles cover six areas:

policies, procedures, and limits;

strategic planning;

risk management;

data, risk measurement, and reporting;

and scenario analysis.

The Principles also describe how large banking organizations should manage climate-related financial risks that can arise in risk categories such as credit, liquidity, and other financial risk, and operational, legal and compliance, and other nonfinancial risk.

While the agencies’ efforts to-date, including the Principles, have focused on banking organizations with $100 billion or more in total assets, their supervisory expectations on climate risk management practices ultimately may apply to smaller banking organizations such as the Bank.

In addition, states such as California, are taking similar actions on climate-related financial risks.

In October 2023, California Governor Gavin Newsom signed into law Senate Bill 253, the Climate Corporate Data Accountability Act (“CCDAA”) and Senate Bill 261, the Climate-Related Financial Risk Act (“CRFRA”).

The CCDAA is applicable to U.S.-organized entities that do business in California with annual revenue in excess of $1 billion.

Subject to the adoption of implementing regulations by the California Air Resources Board, these entities will need to file annual reports publicly disclosing their direct greenhouse gas (“GHG”) emissions from operations (“Scope 1 emissions”), indirect GHG emissions from energy use (“Scope 2 emissions”) and indirect upstream and downstream supply-chain GHG emissions (“Scope 3 emissions”).

The reporting requirements related to Scope 1 and 2 emissions will begin in 2026, while the reporting requirements of Scope 3 emissions will begin in 2027.

The CRFRA requires U.S.-organized entities that do business in California, with annual revenues over $500 million to prepare biennial reports disclosing climate-related financial risk and the measures they have adopted to reduce and adapt to that risk.

The Company is a reporting entity under both laws and may incur compliance, maintenance and remediation costs to conform to such requirements.

Federal Home Loan Bank System

49 unchanged sentences

Although the reduced tax rate generally should be favorable to us by resulting in lower tax expense in future periods, it decreased the value of our existing deferred tax assets as of December 31, 2017.

The Tax Reform Act expires at the end of 2025 if not extended or further legislation is enacted by Congress.

FDIC Insurance Premiums.

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business