CATHAY GENERAL BANCORP Leases Disclosure
14. Leases
The Company enters into operating leases in the normal course of business primarily for branch offices, office spaces and certain equipment. The Company may seek to include options to extend or terminate a lease when it is reasonably certain that the Company will exercise those options.
ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. The Company uses its incremental borrowing rate to determine the present value of its lease liabilities. The Company has elected to not separate lease and non-lease components. The Company has also elected not to recognize a ROU asset and lease liability for leases with original lease term of 12 months or less (short-term leases). The Company does not possess any leases that have variable lease payments or residual value guarantees as of December 31, 2025, and 2024.
The following table represents the operating lease amounts reported on the Consolidated Balance Sheets and other supplemental information as of December 31, 2025, and December 31, 2024:
| December 31, 2025 | December 31, 2024 | |||||||
| ($ In millions) | ||||||||
| Operating Leases: | ||||||||
| ROU assets | $ | 34.2 | $ | 28.6 | ||||
| Lease liabilities | $ | 36.1 | $ | 30.9 | ||||
| Weighted-average remaining lease term (in years) | 4.3 | 3.8 | ||||||
| Weighted-average discount rate | 4.3 | % | 4.1 | % | ||||
| Operating cash flows from operating leases | $ | 11.2 | $ | 11.4 | ||||
| ROU assets obtained in exchange for lease obligations | $ | 15.1 | $ | 4.4 | ||||
Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $13.5 million, $13.4 million and $12.8 million for the years ended December 31, 2025, 2024 and 2023, respectively, and includes short-term leases that were immaterial.
The following table presents a maturity analysis of the Company’s operating lease liabilities as of December 31, 2025:
| As of December 31, 2025 | ||||
| Operating Leases | ||||
| ($ In thousands) | ||||
| 2026 | $ | 10,938 | ||
| 2027 | 9,573 | |||
| 2028 | 8,227 | |||
| 2029 | 5,174 | |||
| 2030 | 2,849 | |||
| Thereafter | 2,831 | |||
| Total lease payments | $ | 39,592 | ||
| Less amount of payment representing interest | (3,490 | ) | ||
| Total present value of lease payments | $ | 36,102 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.