The 10-Q report for CATHAY GENERAL BANCORP has been released, providing a comprehensive overview of the company's financial performance and operations. As a holding company for Cathay Bank, it offers a range of commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. This includes various deposit accounts, loan products, trade financing, investment products, and other customary bank services.
In the 10-Q report, the management's discussion and analysis of financial condition and results of operations highlighted several critical accounting policies. One of the key areas of focus was the allowance for loan losses, which involves significant judgments and assumptions by management and has a material impact on the carrying value of net loans.
Notable financial highlights from the report include an increase in the net interest margin to 3.27% during the second quarter of 2025 from 3.01% in the same quarter of 2024. Additionally, total loans, excluding loans held for sale, increased to $19.78 billion, representing a 2.11% increase from the previous year-end. Total deposits also saw an increase of $320.1 million, reaching $20.01 billion from December 31, 2024.
The quarterly statement of operations review revealed that net income for the quarter ended June 30, 2025, was $77.5 million, marking a 16.0% increase compared to the same quarter a year ago. Diluted earnings per share for the quarter also saw a significant rise to $1.10 per share from $0.92 per share for the same quarter in 2024.
Furthermore, the report detailed the performance of net interest income before provision for credit losses, which increased by $15.9 million, or 9.6%, during the second quarter of 2025 compared to the same quarter in 2024. The net interest margin also improved to 3.27% for the second quarter of 2025, compared to 3.01% for the same quarter in 2024.
The provision for credit losses was recorded at $11.2 million in the second quarter of 2025, reflecting an increase from $6.6 million in the second quarter of 2024. As of June 30, 2025, the allowance for credit losses stood at $183.4 million, representing 0.93% of gross loans.
Non-interest income, including revenues from various sources, such as depository service fees and wealth management fees, amounted to $15.4 million for the second quarter of 2025, showing a 16.7% increase from the same quarter in 2024.
In terms of non-interest expenses, there was a notable decrease of $10.3 million, or 10.4%, to $89.1 million in the second quarter of 2025 compared to the same quarter a year ago. This decrease was primarily attributed to a reduction in amortization expense of investments in low-income housing and alternative energy partnerships.
The effective tax rate for the second quarter of 2025 was 19.6%, compared to 7.9% for the same quarter of 2024. This rate includes the impact of low-income housing tax credits in 2025 and solar tax credits and low-income housing tax credits in 2024.
The market has reacted to these announcements by moving the company's shares 1.39% to a price of $45.40. For more information, read the company's full 10-Q submission here.
