Cathay General Bancorp recently released its 10-Q report, providing insights into the company's financial performance for the quarter ended June 30, 2025. The company operates as the holding company for Cathay Bank, offering various commercial banking products and services in the United States. It provides savings and checking accounts, loan products, trade financing, investment products, and other customary bank services.
In the 10-Q report, Cathay General Bancorp's management discussed critical accounting policies, including the allowance for loan losses, which involves significant judgments and assumptions and has a material impact on the carrying value of net loans. The company recorded a provision for credit losses of $11.2 million in the second quarter of 2025, compared to $6.6 million in the same quarter of 2024. As of June 30, 2025, the allowance for credit losses increased to $183.4 million, or 0.93% of gross loans, compared to $171.4 million, or 0.88% of gross loans, as of December 31, 2024.
The company reported net income of $77.5 million for the quarter ended June 30, 2025, representing a 16.0% increase compared to the same quarter a year ago. Diluted earnings per share for the quarter were $1.10, compared to $0.92 per share for the same quarter a year ago. Return on average assets was 1.33% for the quarter, compared to 1.15% for the same quarter a year ago.
Cathay General Bancorp's net interest margin increased to 3.27% during the second quarter from 3.01% in the second quarter of 2024. Total loans, excluding loans held for sale, increased to $19.78 billion, a 2.11% increase from $19.38 billion at December 31, 2024. Additionally, total deposits increased by $320.1 million, or 1.6%, to $20.01 billion from December 31, 2024.
Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wealth management fees, and other sources of fee income, was $15.4 million for the second quarter of 2025, reflecting a 16.7% increase compared to the same quarter of 2024.
Non-interest expense decreased by $10.3 million, or 10.4%, to $89.1 million in the second quarter of 2025 compared to $99.4 million in the same quarter a year ago. The efficiency ratio was 45.34% in the second quarter of 2025, an improvement from 55.65% for the same quarter a year ago.
The effective tax rate for the second quarter of 2025 was 19.6% compared to 7.9% for the second quarter of 2024. This includes the impact of low-income housing tax credits in 2025 and solar tax credits and low-income housing tax credits in 2024.
For the six months ended June 30, 2025, Cathay General Bancorp reported a net income of $147.0 million, a 6.3% increase compared to the same period a year ago, with diluted earnings per share of $2.09, compared to $1.90 per share for the same period a year ago. Return on average assets was 1.27% for the six months ended June 30, 2025, compared to 1.19% for the same period a year ago.
Cathay General Bancorp's net interest margin was 3.27% for the second quarter of 2025, compared to 3.01% for the same quarter of 2024. The company's net interest income before provision for credit losses increased by $15.9 million, or 9.6%, to $181.2 million during the second quarter of 2025, compared to $165.3 million during the same quarter a year ago. As a result of these announcements, the company's shares have moved 1.39% on the market, and are now trading at a price of $45.40. Check out the company's full 10-Q submission here.
