Cathay General Bancorp reconfirms dividend while executing share repurchases amid rising non-performing assets.
Los Angeles, California, USA, August 16, 2025
Cathay General Bancorp reaffirmed its quarterly cash dividend of $0.34 per share and repurchased $35.6 million of stock under a newly authorized $150 million buyback program. Q2 results showed net income rose to $77.5 million, supported by higher net interest income and a 3.27% net interest margin. The bank reported solid capital ratios but a notable rise in non-performing assets to $199.5 million and a decline in the allowance-to-NPL ratio, prompting management to emphasize conservative payout policy and strategic lending shifts toward lower-risk segments while maintaining shareholder returns.
Key takeaway: Cathay General Bancorp declared a quarterly cash dividend and repurchased stock while reporting stronger second‑quarter earnings, rising non‑performing assets and solid capital ratios that together shape a cautious but shareholder‑friendly outlook.
The board declared a cash dividend of $0.34 per common share, payable September 8, 2025, to shareholders of record at the close of business on August 28, 2025. Cathay has maintained that same $0.34 quarterly dividend for five years, producing an annualized dividend yield of 2.88% as of August 2025. The company reports a conservative payout ratio of 32.6%, below the Financial Services sector average of 41.3%, intended to preserve capital as credit pressures rise.
In June 2025 the company authorized a $150 million stock repurchase program. During Q2 the bank executed $35.6 million in buybacks, equal to roughly 4.4% of equity. Management linked the buybacks in part to the 11.5% year‑over‑year net income growth in the quarter and said the moves align with a strategy to return capital while keeping a strong balance sheet.
Q2 2025 net income rose to $77.5 million, up 11.5% from $66.8 million a year earlier. Basic earnings per share were $1.11 and diluted EPS $1.10, compared with $0.92 in Q2 2024. The quarter saw total interest and dividend income of $322.9 million, down from $332.9 million a year earlier, largely driven by lower interest income from loans receivable.
Net interest income before provision for credit losses improved to $181.2 million from $165.3 million in Q2 2024. Reported net interest margin was 3.27%, a figure the company presents as outperforming peers. Efficiency was highlighted at 45.34%, also shown as better than regional bank averages, a result attributed to cost management and pricing power.
Non‑performing assets rose to $199.5 million in Q2 2025, a 55% year‑over‑year increase. The bank said non‑accrual loans increased 12.7%, which was a key driver of the NPA jump. The allowance for loan losses to non‑performing loans ratio fell to 96.12% in Q2 from 112.06% in Q1 2025, signaling smaller default buffers. Management singled out exposures in construction and commercial real estate as areas to watch.
Despite the NPA rise, non‑performing assets to total assets stood at 0.84%, which the company noted is below regional bank averages. Construction loans declined 9.5% in the quarter as the firm reduced exposure to volatile projects and shifted lending toward lower‑risk segments.
The bank reported a strategic reallocation of lending into lower‑risk commercial real estate, residential mortgages, affordable housing and renewable energy projects. The company framed this as part of a move to diversify risk and align with longer‑term growth opportunities, while describing its capital allocation approach as an income‑growth hybrid that pairs dividends and buybacks with strong capital metrics.
Cathay reported a Tier 1 risk‑based capital ratio of 13.35%, a CET1 ratio of 13.6% and a leverage ratio of 11.09% as of June 2025. The firm said these measures remain above required thresholds and provide room for continued buybacks and dividend payments.
The company operates more than 60 branches nationwide: 24 in Southern California, 17 in Northern California, 9 in New York State, and additional branches in Washington, Illinois, Texas, Maryland, Massachusetts, Nevada, and New Jersey. Internationally, the bank maintains a branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei. Cathay General Bancorp was founded in 1962.
The bank filed its Form 10‑Q for the quarter on August 8, 2025. The filing highlights the allowance for loan losses as the most significant estimate subject to change and notes ongoing monitoring of economic conditions and potential impacts on loan performance.
Analysts provided an upside projection in their consensus view, with an average target implying about 26.42% upside for the stock in 2025. The bank indicated that its ability to reduce credit loss provisions and maintain asset quality is a key factor in that outlook. At the same time, management acknowledged regional concentration in California and an Asian‑American market focus as both strengths and potential vulnerabilities.
Q4 2024 net income had declined from 2023 levels, with 2024 net income down 19.2% to $286 million, though there was an 18.8% sequential improvement in Q4 2024. For Q2 2025 the company cited higher net interest income and lower interest expense as contributors to the quarterly net income increase.
Company press contact: Heng W. Chen, (626) 279‑3652. Company web pages: www.cathaygeneralbancorp.com and www.cathaybank.com. Select market and reference data provided by ICE Data Services and FactSet. Charting and market metadata include TradingView references.
The board declared a cash dividend of $0.34 per common share, payable on September 8, 2025 to holders of record at the close of business on August 28, 2025. The bank has kept the quarterly dividend level unchanged for five years.
The bank repurchased $35.6 million of stock in Q2 2025 under a $150 million repurchase authorization. The repurchases represented about 4.4% of equity for the quarter.
Non‑performing assets rose to $199.5 million, a 55% year‑over‑year increase, and the allowance for loan losses to NPLs fell to 96.12%. The bank says this reduces default buffers and highlighted construction and commercial real estate as watch areas, even as NPA-to-assets remains relatively low at 0.84%.
Capital ratios remain solid with a Tier 1 ratio of 13.35%, CET1 of 13.6%, and a leverage ratio of 11.09%, which the bank says supports continued dividends and buybacks while maintaining reserves.
The bank has over 60 branches across several states, with the largest concentration in California, plus a branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei.
| Feature | Detail |
|---|---|
| Dividend | $0.34 per share quarterly; payable Sep 8, 2025; annualized yield 2.88% |
| Q2 2025 Net Income | $77.5 million, +11.5% YoY |
| Net Interest Margin | 3.27% |
| Efficiency Ratio | 45.34% |
| Buybacks | $35.6 million in Q2; $150 million authorization |
| Non‑Performing Assets | $199.5 million, +55% YoY; NPA/Assets 0.84% |
| Capital Ratios | Tier 1: 13.35%; CET1: 13.6%; Leverage: 11.09% |
| Branch Footprint | Over 60 branches; strong California presence; operations in multiple U.S. states and Asia |
| SEC Filing | Form 10‑Q filed August 8, 2025 |
| Analyst outlook | Consensus suggests ~26.42% upside for 2025 |
Market and reference data supplied by ICE Data Services and FactSet. Charting metadata includes TradingView. Press contact: Heng W. Chen, (626) 279‑3652.
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