Cathay General (CATY) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors often f ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents Cathay General Bancorp's unaudited consolidated financial statements, including balance sheets, income statements, equity changes, and cash flows, with notes on accounting policies [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $23.72 billion from $23.05 billion at year-end 2024, driven by growth in loans, with total liabilities rising to $20.84 billion and total stockholders' equity increasing to $2.89 billion Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$23,723,847** | **$23,054,681** | | Loans held for investment, net | $19,597,337 | $19,203,649 | | Securities available-for-sale | $1,648,433 | $1,547,128 | | **Total Liabilities** | **$20,837,552** | **$20,208,977** | | Total deposits | $20,006,330 | $19,686,199 | | Advances from FHLB | $412,000 | $60,000 | | **Total Stockholders' Equity** | **$2,886,295** | **$2,845,704** | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Net income for Q2 2025 rose to $77.5 million ($1.10 diluted EPS) from $66.8 million in Q2 2024, driven by higher net interest income and lower non-interest expense, with six-month net income reaching $147.0 million Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $181,221 | $165,316 | | Provision for Credit Losses | $11,200 | $6,600 | | Non-Interest Income | $15,391 | $13,215 | | Non-Interest Expense | $89,134 | $99,352 | | **Net Income** | **$77,450** | **$66,829** | | **Diluted EPS** | **$1.10** | **$0.92** | Six Months 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net Interest Income | $357,860 | $333,888 | | Provision for Credit Losses | $26,700 | $8,500 | | Non-Interest Income | $26,595 | $19,826 | | Non-Interest Expense | $174,790 | $192,591 | | **Net Income** | **$146,956** | **$138,264** | | **Diluted EPS** | **$2.09** | **$1.90** | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased to $2.89 billion by June 30, 2025, from $2.85 billion at year-end 2024, primarily due to net income and other comprehensive income, partially offset by treasury stock purchases and cash dividends Reconciliation of Stockholders' Equity (Six Months Ended June 30, 2025, in thousands) | Description | Amount | | :--- | :--- | | Balance at Dec 31, 2024 | $2,845,704 | | Net Income | $146,956 | | Other Comprehensive Income | $16,385 | | Purchases of Treasury Stock | $(77,338) | | Cash Dividends | $(47,701) | | Other (Stock Comp, DRIP, etc.) | $(2,001) | | **Balance at June 30, 2025** | **$2,886,295** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $162.9 million for the first half of 2025, while investing activities used $501.1 million and financing activities provided $545.6 million, resulting in a $207.5 million net increase in cash and cash equivalents Cash Flow Summary (Six Months Ended June 30, 2025, in thousands) | Activity | Amount | | :--- | :--- | | Net Cash from Operating Activities | $162,911 | | Net Cash from Investing Activities | $(501,088) | | Net Cash from Financing Activities | $545,632 | | **Net Increase in Cash** | **$207,455** | [Notes to Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed disclosures supporting the primary financial statements, covering business operations, accounting policies, investment securities, loan portfolio, credit losses, borrowed funds, fair value, derivatives, and equity activities [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=50&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition and results for Q2 and H1 2025, analyzing net interest income, credit losses, non-interest items, and balance sheet components including loans, non-performing assets, deposits, capital, and liquidity, alongside critical accounting policies like CECL [Highlights](index=51&type=section&id=Highlights) The company reported strong Q2 2025 performance with net income of $77.5 million ($1.10 diluted EPS), a 16.0% increase year-over-year, alongside an improved net interest margin, and growth in total loans and deposits Q2 2025 Key Performance Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (millions) | $77.5 | $66.8 | | Diluted EPS | $1.10 | $0.92 | | Return on Average Assets | 1.33% | 1.15% | | Return on Average Equity | 10.72% | 9.63% | | Efficiency Ratio | 45.34% | 55.65% | - Net interest margin expanded to **3.27%** in Q2 2025 from 3.01% in Q2 2024[171](index=171&type=chunk) - Total loans grew **2.11%** to **$19.78 billion** and total deposits grew **1.6%** to **$20.01 billion** since December 31, 2024[171](index=171&type=chunk) [Quarterly Statement of Operations Review](index=51&type=section&id=Quarterly%20Statement%20of%20Operations%20Review) Q2 2025 net interest income increased 9.6% year-over-year to $181.2 million due to lower cost of funds, while provision for credit losses rose, non-interest income increased, and non-interest expense decreased primarily from reduced amortization of tax credit investments - The increase in net interest income was primarily due to a decrease in interest expense from deposits, which more than offset a decrease in interest income from loans and securities[168](index=168&type=chunk) - The provision for credit losses increased to **$11.2 million** in Q2 2025 from $6.6 million in Q2 2024[175](index=175&type=chunk) - Non-interest expense decreased mainly due to a **$12.2 million** reduction in amortization expense from investments in low-income housing and alternative energy partnerships[179](index=179&type=chunk) [Balance Sheet Review](index=57&type=section&id=Balance%20Sheet%20Review) The balance sheet review details changes from year-end 2024 to June 30, 2025, showing total asset growth to $23.72 billion driven by a 2.1% increase in gross loans to $19.78 billion, stable non-performing assets, 1.6% deposit growth, and an increased allowance for credit losses [Loans](index=59&type=section&id=Loans) Gross loans held for investment increased by **$408.7 million** (2.1%) to **$19.78 billion** by June 30, 2025, primarily driven by commercial real estate and commercial loans, with commercial real estate comprising **52.4%** of the portfolio Loan Portfolio Composition (in thousands) | Loan Type | June 30, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Commercial loans | $3,194,724 | $3,098,004 | 3.1% | | Construction loans | $301,125 | $319,649 | (5.8)% | | Commercial real estate loans | $10,363,109 | $10,033,830 | 3.3% | | Residential mortgage & equity lines | $5,922,143 | $5,919,092 | 0.1% | | **Gross loans held for investment** | **$19,784,702** | **$19,375,955** | **2.1%** | [Non-performing Assets](index=59&type=section&id=Non-performing%20Assets) Total non-performing assets increased slightly to **$199.5 million** by June 30, 2025, maintaining a stable 0.84% ratio to total assets, with non-accrual loans rising to **$174.2 million** primarily due to commercial real estate Non-Performing Assets (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Accruing loans past due 90+ days | $6,389 | $4,050 | | Non-accrual loans | $174,153 | $169,161 | | Other real estate owned (OREO) | $18,990 | $23,071 | | **Total Non-Performing Assets** | **$199,532** | **$196,282** | | **NPA / Total Assets** | **0.84%** | **0.85%** | [Allowance for Credit Losses](index=66&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses increased to **$183.4 million** by June 30, 2025, representing **0.93%** of gross loans, driven by a **$26.7 million** provision, with the CECL methodology incorporating an 8-quarter forecast period sensitive to macroeconomic factors like unemployment Allowance for Credit Losses Ratios | Ratio | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | ACL to Gross Loans | 0.93% | 0.88% | | ACL to Non-Performing Loans | 101.60% | 98.98% | - The CECL model uses a blended scenario approach with an 8-quarter reasonable and supportable forecast period and a 4-quarter reversion period. The baseline scenario projects unemployment peaking at **4.8%** in Q4 2026, while the downside scenario contemplates a recession with unemployment peaking at **8.3%**[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - A sensitivity analysis indicates that applying a 100% weighting to the downside scenario would have increased the ACL by approximately **$111.9 million** as of June 30, 2025[235](index=235&type=chunk) [Deposits](index=72&type=section&id=Deposits) Total deposits increased by **$320.1 million** (1.6%) to **$20.01 billion** by June 30, 2025, maintaining a stable mix with time deposits at **48.5%**, and available liquidity sources exceeding the **$9.48 billion** in uninsured deposits Deposit Composition (in thousands) | Deposit Type | June 30, 2025 | % of Total | | :--- | :--- | :--- | | Non-interest-bearing | $3,381,407 | 16.9% | | Interest-bearing | $16,624,923 | 83.1% | | *Time deposits* | *$9,702,651* | *48.5%* | | **Total Deposits** | **$20,006,330** | **100.0%** | - Total uninsured deposits were **$9.48 billion**. Excluding **$824.0 million** in collateralized deposits, uninsured and uncollateralized deposits were **$8.66 billion**, representing **43.3%** of total deposits[244](index=244&type=chunk) - The company has recognized **$13.3 million** cumulatively as of June 30, 2025, related to the FDIC special assessment to recover losses from the Deposit Insurance Fund (DIF)[246](index=246&type=chunk) [Capital Resources](index=74&type=section&id=Capital%20Resources) Total equity increased to **$2.89 billion** in H1 2025, with the company remaining well-capitalized as evidenced by a **13.35%** CET1 ratio and **14.92%** Total Capital ratio, while maintaining a **$0.34** quarterly cash dividend per share Bancorp Capital Ratios | Ratio | June 30, 2025 | Required (incl. buffer) | | :--- | :--- | :--- | | CET1 Capital Ratio | 13.35% | 7.00% | | Tier 1 Capital Ratio | 13.35% | 8.50% | | Total Capital Ratio | 14.92% | 10.50% | | Leverage Ratio | 11.09% | 4.00% | - The company declared a cash dividend of **$0.34** per share in Q2 2025, continuing the rate set in Q4 2021[256](index=256&type=chunk)[258](index=258&type=chunk) [Liquidity](index=78&type=section&id=Liquidity) The company maintains a strong liquidity position, with principal sources including deposit growth, securities cash flows, and FHLB advances, holding an **$8.12 billion** approved FHLB credit line with **$7.00 billion** unused capacity, deemed adequate for the next twelve months - The average monthly liquidity ratio was **13.9%** as of June 30, 2025[259](index=259&type=chunk) - At June 30, 2025, the Bank had an approved FHLB credit line of **$8.12 billion**, with **$412.0 million** in advances outstanding and **$930.0 million** in standby letters of credit issued[260](index=260&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages interest rate risk using a net interest income simulation model, projecting that a +200 basis point shock would increase NII by **13.0%** and decrease market value of equity by **8.4%**, while a -200 basis point shock would decrease NII by **4.2%** and increase market value of equity by **5.2%** Interest Rate Sensitivity Analysis (as of June 30, 2025) | Change in Interest Rate (bps) | % Change in Net Interest Income (12 mo.) | % Change in Market Value of Equity | | :--- | :--- | :--- | | +200 | 13.0% | -8.4% | | +100 | 6.5% | -3.7% | | -100 | -2.3% | 3.2% | | -200 | -4.2% | 5.2% | - The company has established policy tolerance levels to limit NII volatility to **+/- 5%** and the loss in net economic value to zero for a **+/- 200 basis point** rate shock[266](index=266&type=chunk) [Controls and Procedures](index=80&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of Q2 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures are effective as of the end of the period covered by the report[270](index=270&type=chunk) - No changes in internal control over financial reporting occurred during Q2 2025 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[271](index=271&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=80&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company is involved in ordinary course litigation, but management believes any resulting liability would not materially adversely impact its financial condition, results of operations, or liquidity - Management believes that the outcomes of current legal proceedings are not expected to have a material adverse impact on the Company's consolidated financial condition[273](index=273&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20RISK%20FACTORS) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the Company's 2024 Form 10-K[274](index=274&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased **804,179** shares in June 2025 at an average price of **$44.22** as part of a new **$150.0 million** stock repurchase program, with approximately **$114.4 million** remaining available as of June 30, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2025 | 0 | $0.00 | - | | May 2025 | 0 | $0.00 | - | | June 2025 | 804,179 | $44.22 | $114,438,105 | - A new stock repurchase program of up to **$150.0 million** was announced on June 4, 2025, after the completion of the previous **$125.0 million** program[159](index=159&type=chunk) [Other Information](index=81&type=section&id=Item%205.%20OTHER%20INFORMATION) President and CEO Chang M. Liu entered into a Rule 10b5-1 trading agreement on May 1, 2025, for the sale of vested net shares to cover estimated tax liabilities from equity compensation - President and CEO Chang M. Liu entered into a Rule 10b5-1 trading agreement on May 1, 2025, to sell shares to cover tax liabilities associated with equity awards[280](index=280&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act and Inline XBRL data files - Exhibits filed include CEO and CFO certifications (Rule 302 and 906) and Inline XBRL documents[281](index=281&type=chunk)[282](index=282&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net income of $77.4 million for Q2 2025, an 11.4% increase compared to $69.5 million for Q1 2025 [6][14] - Diluted earnings per share increased by 12.2% to $1.10 for Q2 2025 from $0.98 in Q1 2025 [6] - Net interest margin increased from 2.25% in Q1 2025 to 3.27% in Q2 2025, attributed to a lower cost of funds [14][17] - Total deposits increased by $189 million or 3.8% annualized during Q2 2025 [12] Business Line Data and Key Metrics Changes - Total gross loans increased by $432 million or 8.9% annualized, driven by increases in commercial loans, commercial real estate loans, and residential loans [6][12] - Noninterest income for Q2 2025 increased by $4.2 million to $15.4 million compared to $11.2 million in Q1 2025 [15] - Noninterest expense increased by 4% to $89.1 million in Q2 2025 from $85.7 million in Q1 2025 [16] Market Data and Key Metrics Changes - The average loan-to-value ratio for commercial real estate loans remained at 49% as of June 30, 2025 [9] - Nonaccrual loans were 0.9% of total loans as of June 30, 2025, increasing by $19.6 million compared to Q1 2025 [11] Company Strategy and Development Direction - The company revised its 2025 loan growth guidance to 3% to 4% from a previous range of 1% to 4% due to strong Q2 loan growth [7] - The management emphasized a balanced growth in both commercial and industrial (C&I) loans and commercial real estate [29] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic landscape, noting potential impacts from external factors such as terrorism and CPI adjustments [29] - The company is optimistic about maintaining a strong pipeline for the second half of the year [29] Other Important Information - The effective tax rate for Q2 2025 was 19.56%, with guidance updated to between 18.5% to 19% due to recent California tax legislation [17] - The company has an unused borrowing capacity from the Federal Home Loan Bank of $7 billion and the Federal Reserve Bank of $1.5 billion as of June 30, 2025 [13] Q&A Session Summary Question: Impact of California state tax change on income tax rate - The CFO confirmed a direct impact of $3.4 million due to writing off a portion of the deferred tax asset [20] Question: Allowance for Credit Losses (ACL) refill drivers - The CFO explained that the refill was primarily driven by economic factors in Moody's model rather than specific portfolio issues [21][23] Question: Loan growth guidance and pipeline outlook - Management indicated a strong pipeline for the second half of the year but maintained caution regarding potential loan demand drops [29][30] Question: Federal Home Loan Bank borrowing details - The CFO clarified that the recent borrowings were mainly two-week borrowings at a rate of approximately 4.6% [32] Question: Increase in classified loans - The CFO noted that the increase was due to one commercial relationship experiencing cash flow issues, but they are expected to catch up [37][39]

Financial Data and Key Metrics Changes - The company reported a net income of $77.4 million for Q2 2025, an 11.4% increase compared to $69.5 million for Q1 2025 [6][14] - Diluted earnings per share increased 12.2% to $1.10 for Q2 2025 from $0.98 in Q1 2025 [6] - Net interest margin increased from 2.25% in Q1 2025 to 3.27% in Q2 2025, attributed to a lower cost of funds [14][16] - Total gross loans increased by $432 million or 8.9% annualized during Q2 2025 [6][12] Business Line Data and Key Metrics Changes - Commercial loans increased by $196 million, commercial real estate loans by $202 million, and residential loans by $69 million, while construction loans decreased by $32 million [6] - Noninterest income for Q2 2025 increased by $4.2 million to $15.4 million compared to $11.2 million in Q1 2025, driven by changes in unrealized losses on equity securities and higher foreign exchange income [15] - Noninterest expense increased by 4% to $89.1 million in Q2 2025 from $85.7 million in Q1 2025 [15] Market Data and Key Metrics Changes - Total deposits increased by $189 million or 3.8% annualized during Q2 2025, primarily due to increases in core deposits and time deposits [12] - As of June 30, 2025, total uninsured deposits were $8.7 billion, representing 43.3% of total deposits [12] Company Strategy and Development Direction - The company revised its 2025 loan growth guidance to 3% to 4% from a previous range of 1% to 4% due to strong loan growth in Q2 2025 [7] - The company continues to monitor its commercial real estate loans, with an average loan-to-value ratio of 49% as of June 30, 2025 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the loan pipeline for the second half of the year, citing balanced growth in both commercial and industrial sectors [27] - The company is cautious about potential economic factors that could impact loan demand, including inflation and geopolitical issues [27] Other Important Information - The effective tax rate for Q2 2025 was 19.56%, with guidance updated to between 18.5% to 19% due to recent California tax legislation [16] - The company has an unused borrowing capacity from the Federal Home Loan Bank of $7 billion and the Federal Reserve Bank of $1.5 billion as of June 30, 2025 [13] Q&A Session Summary Question: Impact of California state tax change on income tax rate - Management confirmed a direct impact of $3.4 million from writing off a portion of the deferred tax asset due to lower state apportionment [19] Question: Allowance for Credit Losses (ACL) refill drivers - The refill was primarily driven by economic factors in Moody's model, with an increase in unemployment and loan growth contributing to the adjustment [20][22] Question: Loan growth guidance and pipeline outlook - Management indicated a strong pipeline for the second half of the year but maintained caution regarding economic conditions that could affect loan demand [27][28] Question: Increase in classified loans - The increase was attributed to one commercial relationship facing cash flow issues, with expectations for the borrower to become current by the end of Q3 [34][35]

分组1 - Cathay General (CATY) reported quarterly earnings of $1.1 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.97 per share a year ago [1] - The company posted revenues of $196.61 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.31% and up from $178.53 million year-over-year [2] - Cathay has surpassed consensus revenue estimates three times over the last four quarters [2] 分组2 - The stock's immediate price movement will depend on management's commentary during the earnings call [3] - Cathay shares have increased about 1% since the beginning of the year, compared to a 7.2% gain in the S&P 500 [3] 分组3 - The current consensus EPS estimate for the upcoming quarter is $1.13 on revenues of $202 million, and for the current fiscal year, it is $4.47 on revenues of $795 million [7] - The Zacks Industry Rank for Banks - West is in the top 28% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Net income for the second quarter of 2025 was $77.4 million, with diluted EPS of $1.10[5, 64] - Return on average assets (ROAA) was 1.15% and return on average equity (ROAE) was 9.84% for 2Q25[5] - Pre-Tax Pre-Provision (PTPP) income was $119 million, with a PTPP ratio of 2.03%[8] - Net interest income increased to $181.2 million, a 3% increase compared to the previous quarter[64] - Total noninterest income was $15.4 million, a 37% increase compared to the previous quarter[64] Balance Sheet - Total assets reached $23.724 billion, a $520 million increase from the previous quarter[11] - Gross loans, net of fees, amounted to $19.771 billion, a $430 million increase from the previous quarter[11] - Total deposits reached $20.006 billion, a $189 million increase from the previous quarter[11] - The net loans-to-deposit ratio was 98%[13] Loan Portfolio - Total loans amounted to $19.8 billion, with Commercial Real Estate (CRE) comprising 52% of the portfolio[9, 15] - Average loan growth quarter-over-quarter annualized was +1.6%[15] - The total CRE portfolio was $10.4 billion, with a weighted average LTV of 49%[15, 29]

[Financial Performance and Highlights](index=1&type=section&id=Financial%20Performance%20and%20Highlights) The company reported strong Q2 2025 net income growth, an improved net interest margin, and a new stock repurchase program [Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) Cathay General Bancorp reported strong Q2 2025 net income of $77.5 million with improved profitability and efficiency ratios Q2 2025 Financial Performance Summary | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income (millions) | $77.5 | $69.5 | $66.8 | | Diluted EPS | $1.10 | $0.98 | $0.92 | | Return on Average Assets | 1.33% | 1.22% | 1.15% | | Return on Average Equity | 10.72% | 9.84% | 9.63% | | Efficiency Ratio | 45.34% | 45.60% | 55.65% | [Second Quarter Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Key highlights include a rising net interest margin, a new $150.0 million stock repurchase program, and growth in total loans and deposits - The net interest margin increased to **3.27%** in Q2 2025 from 3.25% in Q1 2025[8](index=8&type=chunk) - A new stock repurchase program of up to **$150.0 million** was announced; in Q2 2025, the company repurchased 804,179 shares for a total of **$35.6 million**[5](index=5&type=chunk) - Total loans grew by **2.23%** to **$19.78 billion**, and total deposits increased by **0.95%** to **$20.01 billion** during the second quarter[8](index=8&type=chunk) [Detailed Financial Analysis (Q2 2025 vs. Q1 2025)](index=1&type=section&id=Detailed%20Financial%20Analysis%20(Q2%202025%20vs.%20Q1%202025)) This chapter provides a detailed comparison of the company's income statement and balance sheet between Q2 and Q1 2025 [Income Statement Review](index=1&type=section&id=Income%20Statement%20Review) Net income grew 11.5% quarter-over-quarter, driven by higher net interest and non-interest income and a lower credit provision - Net income increased by **11.5%** to **$77.5 million**, and diluted EPS rose to **$1.10** from $0.98 in the prior quarter[6](index=6&type=chunk) - Return on average stockholders' equity improved to **10.72%** from 9.84%, and return on average assets increased to **1.33%** from 1.22% in Q1 2025[7](index=7&type=chunk) [Net Interest Income](index=2&type=section&id=Net%20interest%20income%20before%20provision%20for%20credit%20losses) Net interest income rose 2.6% to $181.2 million, supported by an expanded net interest margin of 3.27% - Net interest income increased by **$4.6 million (2.6%)** to **$181.2 million** compared to Q1 2025[9](index=9&type=chunk) Key Interest Rate Metrics (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Interest Margin | 3.27% | 3.25% | | Yield on Avg. Interest-Earning Assets | 5.83% | 5.89% | | Cost of Funds on Avg. Interest-Bearing Liabilities | 3.37% | 3.46% | | Net Interest Spread | 2.46% | 2.43% | [Provision for Credit Losses](index=2&type=section&id=Provision%20for%20credit%20losses) The provision for credit losses decreased to $11.2 million, though net charge-offs increased significantly to $12.7 million - Provision for credit losses was **$11.2 million** in Q2 2025, down from $15.5 million in Q1 2025[11](index=11&type=chunk) Net Charge-offs (in thousands) | Period | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Charge-offs | $13,030 | $2,344 | $8,257 | | Total Recoveries | $289 | $367 | $260 | | **Net Charge-offs** | **$12,741** | **$1,977** | **$7,997** | - The allowance for credit losses decreased to **$183.4 million (0.93% of gross loans)** from $185.0 million (0.96% of gross loans) at the end of Q1 2025[11](index=11&type=chunk) [Non-interest Income](index=3&type=section&id=Non-interest%20income) Non-interest income grew 37.5% to $15.4 million, mainly from lower equity security losses and higher swap fees - Non-interest income rose **$4.2 million (37.5%)** to **$15.4 million** in Q2 2025[13](index=13&type=chunk) - Key drivers for the increase were a lower loss on equity securities (by **$2.8 million**) and higher fees from interest rate swaps (by **$1.8 million**)[13](index=13&type=chunk) [Non-interest Expense](index=3&type=section&id=Non-interest%20expense) Non-interest expense increased 4.0% to $89.1 million, yet the efficiency ratio improved to 45.34% - Non-interest expense increased by **$3.4 million (4.0%)** to **$89.1 million** in Q2 2025[14](index=14&type=chunk) - The efficiency ratio improved to **45.34%** in Q2 2025 from 45.60% in Q1 2025[14](index=14&type=chunk) [Income Taxes](index=3&type=section&id=Income%20taxes) The effective tax rate for Q2 2025 was 19.56%, slightly down from the previous quarter - The effective tax rate was **19.56%** for Q2 2025, compared to 19.82% for Q1 2025[15](index=15&type=chunk) [Balance Sheet Review](index=3&type=section&id=BALANCE%20SHEET%20REVIEW) The balance sheet expanded with gross loans growing 2.23% to $19.78 billion and total deposits up 1.0% to $20.01 billion Loan Composition (in thousands) | Loan Type | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Commercial loans | $3,194,724 | $2,998,423 | 6.5% | | Construction loans | $301,125 | $332,729 | -9.5% | | Commercial real estate | $10,363,109 | $10,160,934 | 2.0% | | Residential mortgage | $5,692,142 | $5,623,564 | 1.2% | | **Gross loans** | **$19,784,702** | **$19,353,003** | **2.2%** | Deposit Composition (in thousands) | Deposit Type | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Non-interest-bearing | $3,381,407 | $3,361,245 | 0.6% | | NOW deposits | $2,174,108 | $2,131,445 | 2.0% | | Money market deposits | $3,431,060 | $3,423,953 | 0.2% | | Savings deposits | $1,317,104 | $1,266,561 | 4.0% | | Time deposits | $9,702,651 | $9,634,324 | 0.7% | | **Total deposits** | **$20,006,330** | **$19,817,528** | **1.0%** | [Asset Quality and Capital Adequacy](index=4&type=section&id=Asset%20Quality%20and%20Capital%20Adequacy) This chapter reviews the company's asset quality metrics and strong capital position as of Q2 2025 [Asset Quality Review](index=4&type=section&id=ASSET%20QUALITY%20REVIEW) Asset quality weakened slightly with non-performing assets increasing 14.9% to $199.5 million Non-Performing Assets (in thousands) | Category | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Total non-accrual loans | $174,153 | $154,626 | 12.6% | | Total non-performing loans | $180,542 | $155,221 | 16.3% | | Other real estate owned | $18,990 | $18,484 | 2.7% | | **Total non-performing assets** | **$199,532** | **$173,705** | **14.9%** | Key Asset Quality Ratios | Ratio | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Allowance for loan losses to gross loans | 0.88% | 0.90% | | Allowance for loan losses to non-performing loans | 96.12% | 112.06% | | Non-performing assets to total assets | 0.84% | 0.75% | [Capital Adequacy Review](index=5&type=section&id=CAPITAL%20ADEQUACY%20REVIEW) The company maintained a robust capital position, exceeding all "well capitalized" regulatory requirements - The company continues to be classified as **"well capitalized"** for regulatory purposes[22](index=22&type=chunk) Capital Ratios | Ratio | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Tier 1 risk-based capital ratio | 13.35% | 13.58% | | Total risk-based capital ratio | 14.92% | 15.19% | | Tier 1 leverage capital ratio | 11.09% | 11.06% | [Year-to-Date Performance Review](index=5&type=section&id=Year-to-Date%20Performance%20Review) This chapter summarizes the company's financial performance for the first six months of 2025 compared to the prior year [Six-Month Performance Summary (YTD 2025 vs. YTD 2024)](index=5&type=section&id=Six-Month%20Performance%20Summary%20(YTD%202025%20vs.%20YTD%202024)) Year-to-date net income grew 6.3% to $147.0 million, driven by margin expansion and improved efficiency Year-to-Date Financial Performance | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net Income (millions) | $147.0 | $138.3 | | Diluted EPS | $2.09 | $1.90 | | Net Interest Margin | 3.26% | 3.03% | | Return on Average Assets | 1.27% | 1.19% | | Return on Average Equity | 10.28% | 10.01% | | Efficiency Ratio | 45.46% | 54.45% | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents the detailed consolidated financial statements and supplementary financial data for the period [Consolidated Financial Highlights](index=8&type=section&id=CONSOLIDATED%20FINANCIAL%20HIGHLIGHTS) This section provides a detailed tabular summary of key financial performance metrics and ratios for comparative periods - The table presents key financial data including net interest income, net income, earnings per share, profitability ratios (ROA, ROE), efficiency ratio, and yield analysis for comparative quarterly and six-month periods[31](index=31&type=chunk) [Condensed Consolidated Balance Sheets](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The company's financial position shows total assets grew to $23.72 billion as of June 30, 2025 - The balance sheet details assets such as loans and securities, and liabilities including deposits and borrowings, providing a snapshot of the company's financial health at the end of the period[33](index=33&type=chunk) [Condensed Consolidated Statements of Operations](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This statement details the components of revenue and expenses that resulted in the company's quarterly net income - This statement shows the components of revenue and expenses, illustrating how the company arrived at its net income of **$77.5 million** for Q2 2025[35](index=35&type=chunk) [Average Balances and Yields](index=12&type=section&id=AVERAGE%20BALANCES%20%E2%80%93%20SELECTED%20CONSOLIDATED%20FINANCIAL%20INFORMATION) This analysis of average balances, yields, and costs explains the key drivers of the net interest margin - The tables show average balances for interest-earning assets and interest-bearing liabilities, along with the calculated yields and rates, which are used to determine net interest spread and margin[37](index=37&type=chunk)[38](index=38&type=chunk) [GAAP to Non-GAAP Reconciliation](index=14&type=section&id=GAAP%20to%20NON-GAAP%20RECONCILIATION) This section reconciles GAAP measures to non-GAAP metrics like tangible book value per share, which was $36.16 - The company provides a reconciliation for tangible equity and tangible assets, which are considered supplemental measures of performance[41](index=41&type=chunk) Key Non-GAAP Metrics (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Tangible equity to tangible assets ratio | 10.74% | | Tangible book value per share | $36.16 | | Return on tangible common equity (annualized) | 12.39% | [Other Information](index=6&type=section&id=Other%20Information) This section provides details on the upcoming conference call, company background, and forward-looking statements [Conference Call Information](index=6&type=section&id=CONFERENCE%20CALL) A conference call to discuss Q2 2025 financial results is scheduled for July 22, 2025 - A conference call is scheduled for **July 22, 2025, at 3:00 p.m. PT** to discuss the quarterly results[26](index=26&type=chunk) [About Cathay General Bancorp](index=6&type=section&id=ABOUT%20CATHAY%20GENERAL%20BANCORP) Cathay General Bancorp is the holding company for Cathay Bank, which operates branches across the U.S. and Asia - Cathay General Bancorp is the holding company for Cathay Bank, which was founded in 1962 and operates over 60 branches in the U.S. and has an international presence in Asia[27](index=27&type=chunk) [Forward-Looking Statements](index=6&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains a legal disclaimer regarding forward-looking statements and associated risks and uncertainties - The press release includes forward-looking statements that are subject to risks and uncertainties, and readers are cautioned not to place undue reliance on them[28](index=28&type=chunk)[29](index=29&type=chunk)

Core Viewpoint - Cathay General (CATY) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on July 22, with a consensus EPS estimate of $1.10 per share, reflecting a year-over-year increase of +13.4% [3]. - Revenues are projected to reach $196 million, which is a 9.8% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 0.44% higher, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Cathay is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.76%, suggesting a bullish outlook on the company's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Cathay currently holds a Zacks Rank of 2, which, combined with the positive Earnings ESP, suggests a high likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Cathay exceeded the expected earnings of $0.95 per share by delivering $0.98, resulting in a surprise of +3.16% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Summary: Cathay General (CATY) - Cathay General currently holds a Momentum Style Score of B, indicating potential as a solid momentum pick [2][3] - The company has a Zacks Rank of 2 (Buy), which historically outperforms the market when combined with a Style Score of A or B [3] Price Performance - Over the past week, CATY shares increased by 5.62%, outperforming the Zacks Banks - West industry, which rose by 5.2% [5] - In the last month, CATY's price change was 10.23%, compared to the industry's 11.14% [5] - Over the past quarter, CATY shares rose by 27.58%, and over the last year, they increased by 31.14%, while the S&P 500 only moved 16.66% and 14.76% respectively [6] Trading Volume - The average 20-day trading volume for CATY is 467,017 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for CATY increased, while none decreased, raising the consensus estimate from $4.46 to $4.47 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [9] Conclusion - Considering the positive price trends, trading volume, and earnings outlook, CATY is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [11]

Industry Overview - A number of regional banks have announced significant new share buyback authorizations, indicating a level of industry-wide confidence and suggesting these firms are well-capitalized to return excess funds to shareholders [1][17]. Fifth Third Bancorp (FITB) - Fifth Third Bancorp has initiated a buyback program allowing for the repurchase of up to 100 million shares, representing approximately 15% of its outstanding shares as of June 20 [2]. - The bank's Common Equity Tier 1 (CET1) ratio is nearly 10.5%, exceeding the regulatory requirement of approximately 7.7%, which supports its ability to buy back shares [5][6]. - The firm generates around $1 billion in cash flow per quarter from its bond portfolio, further bolstering its confidence in executing buybacks [7]. Citizens Financial Group (CFG) - Citizens Financial Group has increased its share buyback authorization to $1.5 billion, which is about 8.3% of its market capitalization [9]. - The company's CET1 ratio stands at 10.6%, reflecting strong financial performance and confidence in its capital return strategy [9]. Cathay General Bancorp (CATY) - Cathay General Bancorp announced a $150 million share repurchase program, equating to around 5% of its $3 billion market cap [11]. - The bank's CET1 ratio is nearly 13.6%, indicating strong capital strength to support ongoing shareholder returns [12]. Third Coast Bancshares (TCBX) - Third Coast Bancshares announced a $30 million buyback authorization, which is approximately 7.1% of its $424 million market cap [14]. - The company's CET1 ratio has improved to 8.7%, up from 8% a year ago, indicating enhanced financial stability [15]. RBB Bancorp (RBB) - RBB Bancorp announced an $18 million buyback program, equal to around 6.2% of its $291 million market cap [16]. - The company's CET1 ratio is approximately 17.9%, showcasing strong capital adequacy [16].