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1. Company Snapshot

1.a. Company Description

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States.The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits.It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures.


In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, traveler's check, safe deposit, night deposit, social security payment deposit, collection, bank-by-mail, drive-up and walk-up window, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products.As of March 1, 2022, it operated 31 branches in Southern California, 16 branches in Northern California, 10 branches in New York, four branches in Washington, two branches in Illinois, and two branches in Texas, as well as one branch each in Maryland, Massachusetts, Nevada, and New Jersey, and Hong Kong; and a representative office each in Beijing, Taipei, and Shanghai.The company was founded in 1962 and is headquartered in Los Angeles, California.

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1.b. Last Insights on CATY

Breaking News: Cathay General Bancorp has been highlighted as a top dividend stock for portfolios. The company's recent dividend payment has drawn attention to its shareholder benefits. As of the latest available data, Cathay General Bancorp shows potential for consistent dividend payouts. The board of directors has been steadily declaring dividends. Several analysts have given a hold recommendation on the stock. No recent earnings release data shows significant deviation from expectations. A few analysts have given a buy recommendation. The company continues to provide returns to shareholders through dividends.

1.c. Company Highlights

2. Cathay General Bancorp's Strong Q4 Earnings Exceed Expectations

Cathay General Bancorp reported a net income of $90.5 million for the fourth quarter of 2025, representing a 16.5% increase from $77.7 million in Q3. Diluted earnings per share (EPS) also rose by 18.3% to $1.33, surpassing analyst estimates of $1.2. For the full year 2025, the company's net income was $315.1 million, a 10.1% increase from $286 million in 2024. The strong EPS performance was supported by a lower cost of funds, which contributed to an increase in net interest income.

Publication Date: Feb -08

📋 Highlights
  • Q4 Net Income Growth:: Increased to $90.5 million, a 16.5% rise from $77.7 million in Q3 2025.
  • Diluted EPS Growth:: Rose to $1.33, an 18.3% increase from $1.13 in Q3 2025.
  • 2025 Full-Year Net Income:: Reached $315.1 million, a 10.1% gain from $286 million in 2024.
  • Loan Portfolio Expansion:: Total gross loans grew by $42 million, driven by $18 million in CRE loans and $17 million in residential loans.
  • Net Charge-Offs Decline:: Reduced to $5.4 million in Q4 2025, compared to $15.6 million in Q3.

Loan Growth and Credit Quality

Total gross loans grew by $42 million, driven primarily by increases of $18 million in commercial real estate (CRE) loans and $17 million in residential loans. The average loan-to-value of CRE loans remained steady at 49%, indicating a relatively conservative lending approach. Net charge-offs decreased to $5.4 million in Q4, down from $15.6 million in the prior quarter, suggesting an improvement in credit quality. As Chang Liu mentioned, "We continue to monitor our CRE portfolio," highlighting the bank's focus on managing credit risk.

Net Interest Margin and Outlook

Net interest income increased by $5.4 million in Q4, primarily due to a lower cost of funds. The company anticipates further benefits to the net interest margin from declining deposit costs, supported by the fixed-rate proportion of its loan portfolio. Heng Chen stated that the bank projects 2 rate cuts in 2026, which is expected to result in a net interest margin ranging between 3.4% and 3.5%. The current net interest margin is already a positive indicator, and the expected rate cuts should provide additional support.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.25, Cathay General Bancorp's valuation appears reasonable compared to its peers. The Dividend Yield stands at 2.51%, providing a relatively attractive return for income investors. Analysts estimate revenue growth at 5.4% for the next year, which, combined with the current valuation multiples, suggests a stable outlook for the stock. The current P/E Ratio of 11.62 indicates that the stock is not overly expensive, considering its growth prospects.

3. NewsRoom

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Why Cathay General (CATY) is a Top Dividend Stock for Your Portfolio

Feb -27

Source: zacks.com

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3 Bank Stocks With Recent Dividend Hikes to Keep on Your Radar

Feb -16

Source: zacks.com

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Cathay General Bancorp Declares $0.38 Per Share Dividend

Feb -13

Source: businesswire.com

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Cathay General Bancorp (NASDAQ:CATY) Receives $52.50 Consensus Target Price from Brokerages

Feb -10

Source: defenseworld.net

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Cathay General Bancorp (NASDAQ:CATY) versus Plumas Bancorp (NASDAQ:PLBC) Head to Head Analysis

Feb -02

Source: defenseworld.net

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Cathay General Bancorp: The Setup Looks Good For 2026

Jan -24

Source: seekingalpha.com

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Maryland State Retirement & Pension System Trims Stake in Cathay General Bancorp $CATY

Jan -24

Source: defenseworld.net

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Cathay General Bancorp Q4 Earnings Call Highlights

Jan -24

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.90%)

6. Segments

Banking

Expected Growth: 7.2%

The banking segment is expected to grow at a rate slightly above the global revenue growth hypothesis of 6.9% due to its diversified product offerings and strong customer relationships. The segment's focus on customer service and community involvement is likely to drive growth, as is the overall recovery in the economy. Additionally, the segment's ability to adapt to changing market conditions will be crucial in maintaining its competitive edge. The expected growth rate reflects a positive outlook for the banking industry.

7. Detailed Products

Commercial Banking

Provides financial solutions to small and medium-sized businesses, including loans, lines of credit, and cash management services.

Consumer Banking

Offers personal banking services, including checking and savings accounts, credit cards, and personal loans.

Mortgage Lending

Provides residential and commercial mortgage loans to individuals and businesses.

Wealth Management

Offers investment and wealth management services, including financial planning, investment management, and trust services.

International Banking

Provides international banking services, including trade finance, foreign exchange, and correspondent banking.

8. Cathay General Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Cathay General Bancorp operates in a highly competitive industry, and customers have various alternatives for their banking needs. However, the company's strong brand recognition and extensive branch network help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Cathay General Bancorp's customers are primarily individuals and small businesses, which have limited bargaining power. The company's diverse customer base and lack of concentration in a single industry also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Cathay General Bancorp's suppliers are primarily technology and service providers, which have limited bargaining power. The company's scale and diversified supplier base also reduce the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. While fintech companies are increasing competition, Cathay General Bancorp's established brand and extensive branch network provide a competitive advantage.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Cathay General Bancorp faces intense competition from larger banks and fintech companies, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.04%
Debt Cost 5.22%
Equity Weight 79.96%
Equity Cost 9.55%
WACC 8.68%
Leverage 25.06%

11. Quality Control: Cathay General Bancorp passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Bank OZK

A-Score: 7.1/10

Value: 7.9

Growth: 8.3

Quality: 7.6

Yield: 7.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Popular

A-Score: 6.8/10

Value: 6.7

Growth: 5.9

Quality: 7.1

Yield: 5.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
First Bank

A-Score: 6.8/10

Value: 7.1

Growth: 6.6

Quality: 8.2

Yield: 6.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Cathay Bank

A-Score: 6.3/10

Value: 6.0

Growth: 6.1

Quality: 7.4

Yield: 6.0

Momentum: 4.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Citizens Financial Group

A-Score: 6.2/10

Value: 5.3

Growth: 5.2

Quality: 5.9

Yield: 7.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Fulton Financial

A-Score: 6.2/10

Value: 6.3

Growth: 6.3

Quality: 6.1

Yield: 8.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.2$

Current Price

50.2$

Potential

-0.00%

Expected Cash-Flows