Cathay General Bancorp has recently released its 10-Q report, providing a detailed look into the company's financial performance. The company operates as the holding company for Cathay Bank, offering various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. This includes savings accounts, checking accounts, loan products, trade financing, investment products, and other customary bank services. Cathay General Bancorp was founded in 1962 and is headquartered in Los Angeles, California.
The 10-Q report delves into Item 2, MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. It highlights critical accounting policies, legislative updates, and financial performance.
The report discusses critical accounting policies, emphasizing the significance of accounting for the allowance for loan losses, which involves significant judgments and assumptions by management that have a material impact on the carrying value of net loans.
In terms of legislative updates, the report mentions California's Senate Bill No. 132, the GENIUS Act, and the One Big Beautiful Bill Act, all of which have implications for financial institutions and tax changes.
Moving on to financial performance, the report highlights several key figures:
- Net interest margin increased to 3.31% during the third quarter from 3.04% in the third quarter of 2024.
- Total loans, excluding loans held for sale, increased to $20.10 billion, a 3.8% increase from $19.38 billion at December 31, 2024.
- Total deposits increased by $835.0 million, or 4.2%, to $20.52 billion from December 31, 2024.
- Provision for credit losses of $28.7 million for the third quarter of 2025, included an additional reserve of $9.1 million for two movie theatre loans and $3.8 million from a change in the CECL model.
The Quarterly Statement of Operations Review provides further insights into the financial performance:
- Net income for the quarter ended September 30, 2025, was $77.7 million, an increase of $10.2 million, or 15.1%, compared to net income of $67.5 million for the same quarter a year ago.
- Return on average stockholders’ equity was 10.60%, and return on average assets was 1.29% for the quarter ended September 30, 2025, compared to 9.50% and 1.15% for the same quarter a year ago.
- Net interest income before provision for credit losses increased $20.4 million, or 12.1%, to $189.6 million during the third quarter of 2025, compared to $169.2 million during the same quarter a year ago.
The provision for credit losses is also detailed, with the report highlighting the increase in the allowance for credit losses and the changes in charge-offs and recoveries.
Non-interest income and non-interest expense are also discussed, with non-interest income increasing by $0.6 million, and non-interest expense decreasing by $8.8 million in the third quarter of 2025 compared to the same period a year ago. Following these announcements, the company's shares moved 1.07%, and are now trading at a price of $47.06. Check out the company's full 10-Q submission here.
