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 THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                                                     June 30, 2004                                                      

For the transition period from _______________________ to _____________________________________

Commission file number _____________________________0-18630_______________________________

(Exact name of registrant as specified in its charter)

                             Delaware                                                                         95-4274680                                    

(State of other jurisdiction of incorporation                                               (I.R.S. Employer

                or organization)                                                                         Identification No.)

(Address of principal executive offices)                                                           (Zip Code)

Registrant's telephone number, including area code:                         (213) 625-4700                                              

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock, $.01 par value, 24,918,673 shares outstanding as of July 30, 2004.

PART I - FINANCIAL INFORMATION 3

Item 1. FINANCIAL STATEMENTS (Unaudited) 3

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 7

Business 7

Merger with GBC Bancorp and Related Acquisition Reserves 7

Basis of Presentation 7

Recent Accounting Pronouncements 8

Financial Derivatives 8

Earnings per Share 9

Stock-Based Compensation 9

Commitments and Contingencies 10

Regulatory Matters 11

Regulated Investment Company 11

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12

Critical Accounting Policies 13

Income Statement Review 14

Financial Condition Review 17

Asset Quality Review 22

Capital Resources 27

Capital Adequacy Review 28

Liquidity 29

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30

Market Risk 30

Financial Derivatives 32

Item 4. CONTROLS AND PROCEDURES 33

PART II - OTHER INFORMATION 33

Item 1. LEGAL PROCEEDINGS 33

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 33

Item 3. DEFAULTS UPON SENIOR SECURITIES 34

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 34

Item 5. OTHER INFORMATION 34

Item 6. EXHIBITS AND REPORTS ON FORM 8-K 34

SIGNATURES 35

Cathay General Bancorp (the "Bancorp") is the holding company for Cathay Bank (the "Bank"), four limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner, and GBC Venture Capital, Inc., (together the "Company" or "we", "us," or "our"). Bancorp also owns 100% of the common stock of three statutory business trusts created for the purpose of issuing capital securities. The Bank was founded in 1962 and offers a wide range of financial services. The Bank now operates twenty-three branches in Southern California, nine branches in Northern California, one branch in Washington State, three branches in New York State, two branches in Massachusetts, and one branch in Houston, Texas, plus representative offices in Taipei, Taiwan, Hong Kong and Shanghai, China. As part of its post-merger integration plans to efficiently serve its customers, the Bank closed six branches in April, 2004, and intends to close four additional branches in Southern California in or around October 2004. In addition, the Bank's subsidiaries, Cathay Investment Company and GBC Trade Services, Asia Limited maintain offices in Taiwan and Hong Kong, respectively. The Bank is a commercial bank, servicing primarily individuals, professionals, and small to medium-sized businesses in the local markets in which its branches are located.

As of the close of business on October 20, 2003, the Company completed its merger with GBC Bancorp and General Bank (the "GBC merger"), pursuant to the terms of the Agreement and Plan of Merger dated May 6, 2003. As a result of the merger, Cathay Bancorp, Inc. issued 6.75 million shares of its newly issued common stock, and paid $162.4 million in cash for all of the issued and outstanding shares of GBC Bancorp common stock. In addition, the Company's name was changed to Cathay General Bancorp. The results of GBC Bancorp's operations have been included in the Company's consolidated financial statements since October 20, 2003. The return on assets and return on equity after the merger with GBC Bancorp are lower than in previous periods, due in part to the increases in assets and stockholders' equity as a result of the GBC merger.

Reserves for estimated lease termination costs of $1.3 million and severance and contract termination costs of $1.3 million were established as purchase price adjustments for the October 20, 2003 merger with GBC Bancorp. Through June 30, 2004, approximately $0.5 million of these costs have been incurred and paid. During 2004, goodwill was decreased by $1.3 million due to a decrease of $0.8 million of income taxes payable upon finalization of GBC Bancorp's tax return for 2003 and by $0.5 million to reflect the after-tax impact of the decrease in the reserve for estimated lease termination costs as a result of more precisely determining the branches expected to be closed.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. Certain reclassifications have been made to the prior year's financial statements to conform to the current year's presentation. For further information, refer to the audited consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 2003.

The preparation of the consolidated financial statements in accordance with GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The most significant estimate subject to change relates to the allowance for loan losses.

 In March 2004, the FASB issued Emerging Issues Task Force Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments". This EITF describes a model involving three steps: (1) determine whether an investment is impaired, (2) determine whether the impairment is other-than-temporary, and (3) to recognize the impairment loss in earnings. The EITF also requires several additional disclosures for cost-method investments. The EITF's impairment accounting guidance is effective for reporting periods beginning after June 15, 2004. The Company expects that the adoption of this EITF will not have a material impact on its consolidated financial statements.

Financial Derivatives

The Company enters into financial derivatives in order to seek mitigation of exposure to interest rate risks related to its interest-earning assets and interest-bearing liabilities. The Company recognizes all derivatives on the balance sheet at fair value. Fair value is based on dealer quotes, or quoted prices from instruments with similar characteristics. The Company uses financial derivatives designated for hedging activities as cash flow hedges. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income until the hedged item is recognized in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives will be reflected in current earnings, together with changes in the fair value of the related hedged item.

On March 21, 2000, the Company entered into an interest rate swap agreement with a major financial institution in the notional amount of $20.0 million for a period of five years. The interest rate swap was for the purpose of hedging the cash flows from a portion of our floating rate loans against declining interest rates. The purpose of the hedge is to provide a measure of stability in the future cash receipts from such loans over the term of the swap agreement, which at June 30, 2004, had a remaining term of approximately three quarters. At June 30, 2004, the fair value of the interest rate swap was $0.7 million, exclusive of accrued interest. Amounts to be paid or received on the interest rate swap are reclassified into earnings upon the receipt of interest payments in the underlying hedged loans, including amounts totaling $0.3 million that were reclassified into earnings during the quarter ended June 30, 2004. The estimated net amount of the existing gains within accumulated other comprehensive income that are expected to reclassify into earnings within the next nine months is approximately $0.7 million.

Earnings per Share

Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that then shared in earnings.

For the three months and six months ended June 30, 2004, options to purchase an additional 1.3 million shares of common stock were outstanding, but were not included in the computation of diluted earnings per share because their inclusion would have had an antidilutive effect.  For the three months ended June 30, 2003, all options to purchase shares of common stock were included in the computation of diluted earnings share.  For the six months ended June 30, 2003, 0.2 million shares of common stock were outstanding, but were not included in the computation of diluted earnings per share becuase their inclusion would have had an antidilutive effect.

The following table sets forth basic and diluted earnings per share calculations:

Prior to 2003, the Company used the intrinsic-value method to account for stock-based compensation. Accordingly, no expense was recorded in periods prior to 2003. In 2003, the Company adopted prospectively the fair value recognition provisions of Financial Accounting Standards Board ("FASB") Statement No. 123, "Accounting for Stock-Based Compensation," as amended by FASB Statement No. 148, "Accounting for Stock-Based Compensation - - Transition and Disclosure, an Amendment of FASB Statement No. 123," and began recognizing the expense associated with stock options granted starting in 2003 using the fair value method, which resulted in charges to salaries and employee benefits for the second quarters of 2004 and 2003 of $754,000 and $97,000, respectively. For the six months ended June 2004 and 2003, the compensation expense associated with stock options granted was $1.5 million and $194,000, respectively. Stock-based compensation expense for stock options is calculated based on the fair value of the award at the grant date, and is recognized as an expense over the vesting period of the grant. The Company uses the Black-Scholes option pricing model to estimate the value of granted options. This model takes into account the option exercise price, the expected life, the current price of the underlying stock, the expected volatility of the Company's stock, expected dividends on the stock and a risk-free interest rate. Since compensation cost is measured at the grant date, the only variable whose change would impact expected compensation expense recognized in future periods for these grants is actual forfeitures.

Under SFAS No.123, the weighted average per share fair value of the options granted during the six months of 2004 and the full year 2003 was $13.59 and $11.12, respectively, on the date of grant. Fair value under SFAS No.123 is determined using the Black-Scholes option pricing model with the following assumptions:

If the compensation cost for all awards granted under the Company's stock option plan had been determined using the fair value method of SFAS No. 123, the Company's net income and earnings per share for the three months and the six months ended June 30, 2004 and 2003, would have been reduced to the pro forma amounts indicated in the table below.

In the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans, or through commercial or standby letters of credit, and financial guarantees. Those instruments represent varying degrees of exposure to risk in excess of the amounts included in the accompanying condensed consolidated statements of financial condition. The contractual or notional amount of these instruments indicates a level of activity associated with a particular class of financial instrument and is not a reflection of the level of expected losses, if any.

The Company's exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the commitment agreement. These commitments generally have fixed expiration dates and the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management's credit evaluation of the borrowers. Letters of credit, including standby letters of credit and bill of lading guarantees, are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing these types of instrument is essentially the same as that involved in making loans to customers.

Following a regular examination by the Federal Deposit Insurance Corporation (the "FDIC"), the Bank's Board of Directors, on June 17, 2004, approved and signed a memorandum of understanding ("MOU") with the FDIC in connection with certain deficiencies identified by the FDIC relating to the Bank's compliance with certain provisions of the Bank Secrecy Act (the "BSA"). Under the terms of the MOU, the Bank must comply in all material respects with the BSA within 90 days from the MOU's effective date, July 18, 2004. The MOU requires in part that the Bank perform an analysis of its BSA risk profile and implement a written action plan designed to ensure compliance with the BSA. Such plan will include revisions of the Bank's policies and procedures, enhancements of the Bank's internal controls for BSA compliance, independent compliance testing, dedicated compliance staff, and regular employee training.

The MOU is expected to result in additional BSA compliance expenses for the Bank, although these expenses are not anticipated to have a material financial impact on the Bancorp. It may also have the effect of limiting or delaying the Bank's and the Bancorp's ability to obtain regulatory approval for certain expansionary activities.

As previously disclosed, in the fourth quarter of 2003, the California Franchise Tax Board (FTB) announced its intent to list certain transactions that in its view constitute potentially abusive tax shelters. Included in the transactions subject to this listing were transactions utilizing regulated investment companies (RICs) and real estate investment trusts (REITs). As part of the notification indicating the listed transactions, the FTB also indicated its position that it intends to disallow tax benefits associated with these transactions. As also previously disclosed, in December 2002, the Company decided to deregister its regulated investment company and, in February 2003, the Company completed such deregistration. The Company had created the regulated investment company for the purpose of raising capital.

The Company believes that the tax benefits recorded in the three prior years with respect to its regulated investment company were appropriate and fully defensible under California law in effect at the time the tax benefits were recorded. The Company had relied on the existing California tax law related to regulated investment companies and on an outside tax opinion in creating this subsidiary. While the Company continues to believe that the tax benefits realized in previous years were appropriate, the Company deemed it prudent to participate in the Voluntary Compliance Initiative - Option 2, requiring payment of all California taxes and interest on these disputed 2000 through 2002 tax benefits, and permitting the Company to claim a refund for these years while avoiding certain potential penalties. The Company retains potential exposure for assertion of an accuracy related penalty should the FTB prevail in its position, in addition to the risk of not being successful in its refund claims for taxes and interest. As of June 30, 2004, the Company reflected a $12.3 million net state tax receivable for the years 2000, 2001, and 2002 after giving effect to reserves for loss contingencies on the refund claims, or an equivalent of $8.0 million after giving effect to Federal tax benefits. Although the Company believes its tax deductions related to the regulated investment company were appropriate and fully defensible, there can be no assurance of the outcome of its refund claims, and an adverse outcome on the refund claims could result in a loss of all or a portion of the $8.0 million net state tax receivable after giving effect to Federal tax benefits.

The following discussion is given based on the assumption that the reader has access to and read the Annual Report on Form 10-K for the year ended December 31, 2003, of Cathay General Bancorp ("Bancorp") and its wholly-owned subsidiary Cathay Bank (the "Bank" and together the "Company" or "we", "us," or "our").

The statements in this report include forward-looking statements regarding management's beliefs, projections, and assumptions concerning future results and events. These forward-looking statements may, but do not necessarily, include words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "should," "could," "predicts," "potential," "continue" or similar expressions. Forward-looking statements are not guarantees. They involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, adverse developments, or conditions related to or arising from:

• the Company's ability to integrate its operations after its recent merger with GBC Bancorp and realize the benefits of that merger;
• demographic changes;
• fluctuations in interest rates;
• inflation;
• competition;
• war and terrorism;
• general economic or business conditions in California and other regions where Cathay Bank has operations such as the impact of the California budget deficit;
• changes in business strategy, including the formation of a real estate investment trust (REIT) and the deregistration of its registered investment company (RIC); and
• and legislative and regulatory developments such as the potential effects of recently enacted California tax legislation and the subsequent Franchise Tax Board announcement on December 31, 2003 regarding the taxation of REITs and RICs.

These and other factors are further described in Cathay General Bancorp's Annual Report on Form 10-K for the year ended December 31, 2003, its reports and registration statements filed (including those filed by GBC Bancorp prior to the merger) with the Securities and Exchange Commission ("SEC") and other filings it makes in the future with the SEC from time to time. Cathay General Bancorp has no intention and undertakes no obligation to update any forward-looking statement or to publicly announce the results of any revision of any forward-looking statement to reflect future developments or events.

Cathay General Bancorp's filings with the SEC are available to the public from commercial document retrieval services and at the website maintained by the SEC at htpp://www.sec.gov, or by requests directed to Cathay General Bancorp, 777 North Broadway, Los Angeles, California 90012, Attn: Investor Relations (213) 625-4749.

Critical Accounting Policies

The discussion and analysis of our consolidated financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Accounting for the allowance for loan losses involves significant judgments and assumptions by management, which have a material impact on the carrying value of net loans; management considers this accounting policy to be a critical accounting policy. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances as described under the heading "Allowance for Loan Losses."

Accounting for the merger with GBC Bancorp involves significant judgments and assumptions by management, which have a material impact on the carrying value of fixed rate loans and borrowings and the determination of core deposit intangible assets and goodwill. The judgments and assumptions used by management are described in Note 2 to the Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended December 31, 2003.

• S econd quarter earnings increased $8.9 million, or 67%, compared to the same quarter a year ago.
• Fully diluted earnings per share reached $0.88 and increased 20.6% compared to the same quarter a year ago.
• Gross loan growth from March 31, 2004, of $109.3 million, or 3%, primarily in commercial mortgage loans.
• Deposit growth from March 31, 2004, of $136.8 million, or 3%, compared to a decline of $56.6 million in the first quarter of 2004.
• Return on average stockholders' equity was 13.88% and return on average assets was 1.55% for the quarter ended June 30, 2004.
• Net recoveries of $0.2 million and a $6.2 million, or 19%, decrease in nonaccrual loans during the second quarter.
• Improvement in the efficiency ratio to 38.63% from 41.94% in the first quarter of 2004.
• Completion of the computer system conversion in April 2004.

Income Statement Review

Net income for the second quarter of 2004 was $22.1 million or $0.88 per diluted share, a 67.2% increase in net income compared with net income of $13.2 million or $0.73 per diluted share for the same quarter a year ago. Return on average stockholders' equity was 13.88% and return on average assets was 1.55% for the second quarter of 2004 compared with a return on average stockholders' equity of 17.35% and a return on average assets of 1.81% for the three months ended June 30, 2003.

Our net interest income before provision for loan losses increased to $52.2 million during the second quarter of 2004, or 94.7% higher than the $26.8 million during the same quarter a year ago. The increase was due primarily to the merger with GBC Bancorp and the growth in loans.

The net interest margin, on a fully taxable-equivalent basis, decreased 5 basis points from 4.07% during the first quarter 2004 to 4.02% for the second quarter 2004, due primarily to the decrease in yields from investment securities and the increase in rates paid on certificates of deposits. The net interest margin increased from 3.91% in the second quarter of 2003 to 4.02% in the second quarter of 2004, primarily as a result of decreases in rates paid on certificates of deposit and wholesale borrowings.

For the second quarter of 2004, the interest rate earned on our average interest-earning assets was 5.06% on a fully taxable-equivalent basis, and our cost of funds on average interest-bearing liabilities equaled 1.27%. In comparison, for the second quarter of 2003, the interest rate earned on our average interest-earning assets was 5.21% and our cost of funds on average interest-bearing liabilities equaled 1.59%.

Average daily balances, together with the total dollar amounts, on a taxable-equivalent basis, of interest income and interest expense, and the weighted-average interest rate, the net interest spread. and the net interest margin were as follows:

The provision for loan losses was zero for the second quarter of 2004 compared to zero for the first quarter of 2004 and $1.7 million for the second quarter of 2003. The provision for loan losses represents the charge against current earnings that is determined by management, through a credit review process, as the amount needed to maintain an allowance that management believes should be sufficient to absorb loan losses inherent in the Company's loan portfolio. Total net recoveries for the second quarter of 2004 were $206,000 compared to net charge-offs for the first quarter of 2004 of $7,000 and net recoveries for the second quarter of 2003 of $60,000.

Non-interest income, which includes revenues from service charges on deposit accounts, letters of credit commissions, securities gains, loan sales, wire transfer fees, and other sources of fee income, was $6.6 million for the second quarter of 2004, a decrease of $0.4 million, or 5.9%, compared to the non-interest income of $7.0 million for the second quarter of 2003.

For the second quarter of 2004, the Company recorded net securities gains of $1.4 million compared to $3.9 million of net gains for the same quarter in 2003.

Letters of credit commissions increased $648,000, or 130.6%, from $496,000 in the second quarter of 2003 to $1.1 million in the second quarter of 2004. Comparing the second quarter of 2004 to the second quarter of 2003, depository service fees increased $424,000, or 28.8% and other operating income increased $955,000, or 83.8%. These increases were due primarily to the merger with GBC Bancorp.

Non-interest expense increased $10.7 million to $22.7 million in the second quarter of 2004 primarily due to the merger with GBC Bancorp. The efficiency ratio was 38.63% for the second quarter of 2004 compared to 35.58% in the year ago quarter. Salaries and employee benefits increased $6.0 million, or 85.3%, from $7.1 million in the second quarter of 2003 to $13.1 million in the second quarter of 2004 due to the merger with GBC Bancorp, retention bonus expense of $440,000 and a $658,000 increase in compensation expense due to the amortization of compensation expense associated with stock options granted after the second quarter of 2003. Occupancy expense increased by $880,000 or 95.2%, from $985,000 in the second quarter of 2003 to $1.8 million in the second quarter of 2004, due primarily to the merger with GBC Bancorp. Computer and equipment expense increased $985,000 or 118.4% from $832,000 in the second quarter of 2003 to $1.8 million in the second quarter of 2004 due to the additional expenses associated with operating General Bank's data processing systems prior to the completion of the data processing conversion in April 2004 and approximately $400,000 of conversion related expenses. Professional services expense increased $781,000 or 82.5% from $947,000 in the second quarter of 2003 to $1.7 million in the second quarter of 2004 due to higher legal, consulting, and other professional expenses primarily as a result of the merger with GBC Bancorp. Amortization of core deposit intangibles increased by $1.3 million due to the merger with GBC Bancorp. Other operating expenses increased $623,000 or 77.1% due primarily to the merger with GBC Bancorp.