Cathay General Bancorp(US:CATY)2026-01-23 00:02Financial Data and Key Metrics Changes - The company reported a net income of $90.5 million for Q4 2025, a 16.5% increase from $77.7 million in Q3 2025 [4] - Diluted earnings per share increased by 18.3% to $1.33 in Q4, up from $1.13 in Q3 [4] - For the full year 2025, net income was $315.1 million, a 10.1% increase from $286 million in 2024 [4] - The net interest margin increased to 3.36% in Q4 from 3.31% in Q3 [11] - Total deposits increased by $373 million or 7.6% on an annualized basis during Q4 [9] Business Line Data and Key Metrics Changes - Total gross loans grew by $42 million, driven by increases of $80 million in commercial real estate (CRE) loans and $17 million in residential loans [5] - Non-accrual loans were 0.6% of total loans as of December 31, 2025, down $53.3 million to $112.4 million compared to the prior quarter [8] - The average loan-to-value of CRE loans remained steady at 49% [6] Market Data and Key Metrics Changes - The company expects loan growth in 2026 to be between 3.5% and 4.5% [5] - For 2026, deposit growth is expected to range between 4% and 5% [9] Company Strategy and Development Direction - The company plans to announce a new buyback program after approvals are received, with $12 million remaining under the current buyback program [4] - The management is focused on transitioning some of the maturing CDs into non-interest-bearing deposits while being sensitive to defending the existing base [18] Management's Comments on Operating Environment and Future Outlook - Management anticipates further benefit to the net interest margin from declining deposit costs supported by the fixed-rate proportion of the loan portfolio [11] - The competitive landscape in the local LA and New York markets remains strong, particularly for maturing CDs [18] - Management does not see any particular trends in credit migration but is closely monitoring special mention loans [20] Other Important Information - The company recorded $17.2 million in provisions for credit losses in Q4 compared to $28.7 million in Q3 [9] - The effective tax rate for Q4 2025 was 20.23% compared to 17.18% for Q3 [13] Q&A Session Summary Question: Can you speak more in terms of what you're assuming for deposit betas embedded in that NIM outlook? - The company is assuming deposit betas in the 60% range, with market competition remaining rational in Q4 [17] Question: What are you seeing in terms of credit and any migration into criticized and overall trends? - Management noted that there are no particular trends in credit migration, with some loans being downgraded to special mention due to short-term financial issues [20][21] Question: Have you seen an elevated level of competition for incremental loan growth? - Management indicated strong competition in the C&I segment, with existing portfolios facing the most competition [29][30]