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Note 2 - Acquisition | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
2. | Acquisition
On July 14, 2017, the Company completed the acquisition of SinoPac Bancorp, the parent of Far East National Bank (FENB), pursuant to a Stock Purchase Agreement, dated as of July 8, 2016, by and between the Company and Bank SinoPac Co. Ltd. Under the terms of the Stock Purchase Agreement, the Company purchased all of the issued and outstanding share capital of SinoPac Bancorp for an aggregate purchase price of $351.6 million plus additional post closing payments based on the realization of certain assets of FENB. The Company issued 926,192 shares of common stock as consideration and the remainder of the consideration is payable in cash of which $100 million was deferred and paid on November 14, 2017 and $35.4 million was deferred and will be released over the next three years. On December 12, 2017, additional cash consideration of $4.1 million was paid based on the realized gain from the sale of the building that housed FENB’s former Alhambra, California branch. SinoPac Bancorp was merged into Cathay General Bancorp on July 17, 2017 and subsequently, on October 27, 2017, FENB was merged into Cathay Bank. Founded in 1974, FENB offers a wide range of financial services. The acquisition allowed the Company to expand its number of branches in California. As of July 14, 2017, FENB operated nine branches in California, and a representative office in Beijing. The acquisition will be accounted for as a business combination, subject to the provisions of ASC 805 - 10 - 50, Business Combinations. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the July 14, 2017 acquisition date. We have included the financial results of the business combinations in the condensed consolidated statement of income beginning on the acquisition date. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. We made significant estimates and exercised significant judgement in estimating fair values and accounting for such acquired assets and liabilities. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The fair value of the assets and the liabilities acquired as of July 14, 2017 are shown below:
|  | SinoPac Bancorp |
Assets acquired: |  |  |  |
Cash and cash equivalents |  | $ | 283,932 |
Short-term investments |  |  | 5,000 |
Securities available-for-sale |  |  | 88,044 |
FHLB and FRB stock |  |  | 19,890 |
Loans |  |  | 705,792 |
Premises and equipment |  |  | 6,239 |
Cash surrender value of life insurance |  |  | 46,083 |
Deferred tax assets, net |  |  | 40,690 |
Core deposit intangible |  |  | 6,122 |
Accrued interest receivable and other assets |  |  | 10,689 |
Total assets acquired |  |  | 1,212,481 |
Liabilities assumed: |  |  |  |
Deposits |  |  | 813,888 |
Advances from the Federal Home Loan Bank |  |  | 30,000 |
Accrued interest payable and other liabilities |  |  | 8,512 |
Total liabilities assumed |  |  | 852,400 |
Net assets acquired |  | $ | 360,081 |
Cash paid |  | $ | 285,324 |
Fair value of common stock issued |  |  | 34,862 |
Total consideration paid |  | $ | 320,186 |
Purchase price payable to SinoPac |  |  | 34,267 |
Total consideration |  | $ | 354,453 |
Gain from acquisition |  | $ | 5,628 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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