Cathay General Bancorp announced that its subsidiary bank, Cathay Bank, has entered into a purchase and assumption agreement with HSBC Bank USA, National Association (“HSBC”), to purchase 10 HSBC retail branches in California and additional loans and deposits associated with HSBC’s West Coast mass retail market consumer banking business and retail business banking business.
Cathay General Bancorp Executive Chairman Dunson K. Cheng stated, “This transaction will broaden the reach of our Northern and Southern California branch network. As we continue to grow and expand, the ability to provide our clients added ease in accessing banking services is a significant step in our journey.”
Chang M. Liu, President and Chief Executive Officer of Cathay General Bancorp, said, “We are excited to continue our long history of banking in the California community. The transaction complements our footprint and strengthens our ability to serve our communities and clients well and long into the future.”
Under the terms of the purchase and assumption agreement, Cathay Bank will acquire 10 HSBC branches and purchase and assume additional deposit liabilities and assets, including residential mortgage loans, retail business banking loans and personal loans associated with HSBC’s West Coast mass retail market consumer banking business and retail business banking business. Cathay Bank is not acquiring or assuming loans or assets associated with HSBC’s brokerage business, its private banking and high net worth businesses or its non-retail business banking business. The transaction is expected to be completed during the first quarter of 2022, subject to regulatory approval. As of March 31, 2021, the total acquired loans were approximately $0.8 billion and total deposit were approximately $1 billion. The financial terms of the agreement were not disclosed. The transaction is expected to be approximately 2.0% accretive to Cathay General Bancorp’s GAAP 2022 earnings per share, on a run-rate basis, excluding any one-time transaction costs and restructuring expenses.
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