CATHAY GENERAL BANCORP recently released its 10-Q report. The company is the holding company for Cathay Bank, which provides commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. Its offerings include deposit accounts, commercial and real estate lending, residential mortgages, trade finance, foreign exchange services, and selected investment and advisory products.
For the quarter ended June 30, 2026, Cathay General Bancorp reported net income of $92.2 million, up 19.0% from $77.5 million a year earlier. Diluted earnings per share rose to $1.37 from $1.10. Return on average assets improved to 1.52% from 1.33%, and return on average stockholders’ equity increased to 12.21% from 10.72%.
Net interest income before provision for credit losses rose $19.7 million, or 10.9%, to $200.9 million. The net interest margin widened to 3.48% from 3.27%, while the net interest spread increased to 2.77% from 2.46%. Average interest-earning assets were $23.2 billion, compared with $22.2 billion a year earlier.
The improvement in net interest income came mainly from lower interest expense on deposits. Average interest-bearing deposits were $17.2 billion in the quarter, up from $16.6 billion, while the average cost of interest-bearing deposits fell to 2.86% from 3.35%. Time deposits averaged $9.5 billion and carried a 3.39% rate, down from 3.91% a year earlier.
Loans averaged $20.3 billion in the quarter, up from $19.5 billion, but the yield on total loans declined to 5.97% from 6.11%. Deposits with banks averaged $1.2 billion, with yield falling to 3.64% from 4.37%. Investment securities averaged $1.7 billion, with yield essentially flat at 3.39% versus 3.38%.
The company recorded a provision for credit losses of $11.2 million in the second quarter, unchanged from the prior-year quarter. The allowance for loan losses rose to $218.9 million at June 30, 2026, from $195.9 million at December 31, 2025, equal to 1.06% of total loans versus 0.97% at year-end 2025.
Net charge-offs in the quarter were $1.8 million, down from $12.7 million in the second quarter of 2025. Commercial loan charge-offs were $2.7 million, compared with $9.1 million a year earlier, while recoveries totaled $895,000 versus $289,000. For the first six months of 2026, net charge-offs were $4.0 million, compared with $14.7 million in the same period of 2025.
Non-interest income increased to $21.4 million from $15.4 million. The increase was driven by a $13.0 million rise in net gains from equity securities and a $3.0 million increase in wealth management fees, partly offset by a $10.6 million net loss on the sale of available-for-sale investment securities tied to repositioning activity.
Non-interest expense rose to $92.3 million from $89.1 million. Salaries and employee benefits increased $3.6 million, computer and equipment expense rose $1.4 million, and other real estate owned expense increased $700,000. Those increases were partly offset by a $1.5 million decline in professional service expense and a $1.3 million drop in amortization expense of investments in low-income housing.
The efficiency ratio improved to 41.53% from 45.34% in the second quarter of 2025. The effective tax rate was 22.4%, compared with 19.6% a year earlier.
For the first six months of 2026, net income was $179.1 million, up 21.9% from $147.0 million. Diluted earnings per share increased to $2.66 from $2.09. Return on average assets was 1.50%, compared with 1.27%, and return on average stockholders’ equity was 12.05%, compared with 10.28%.
Over the six-month period, net interest income before provision for credit losses increased to $401.4 million from $364.1 million. Average total interest-earning assets were $23.1 billion, up from $22.1 billion, while average total interest-bearing liabilities were $17.4 billion, up from $16.8 billion. Today the company's shares have moved -0.28% to a price of $63.53. For the full picture, make sure to review CATHAY GENERAL BANCORP's 10-Q report.
