Cathay General Bancorp (CATY) AI Stock Analysis

• Market Cap: $3.58B
• Dividend Yield: 2.72%
• Average Volume (3M): 474.25K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.79
• Revenue Growth: -1.59%
• EPS Growth: 9.34%
• Country: US
• Employees: 1,266
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.33
• Shares Outstanding: 68,036,610
• 10 Day Avg. Volume: 691,581
• 30 Day Avg. Volume: 474,251
• PEG Ratio: -0.64
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 2.47
• P/FCF Ratio: 10.54
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.71
• Enterprise Value/Gross Profit: 5.22
• Enterprise Value/Ebitda: 9.77
• 1Y Price Target: $50.00
• Price Target Upside: -4.71% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $57.00 ▲(8.63% Upside)

CATY scores well on financial strength (strong margins, low leverage, and strong cash generation) and supportive technicals (above major moving averages with positive MACD). Valuation is favorable with a low P/E and a solid dividend yield. The score is held back by the sharp recent revenue growth decline and earnings-call risk items tied to credit monitoring, deposit repricing competition, and a high uninsured deposit mix.

Positive Factors

Strong profitability margins

Sustained high net and EBIT margins signal durable operating efficiency and pricing power in core banking operations. These margins provide a buffer versus cyclical NIM compression and support internal capital generation for lending, reserves and shareholder returns over the medium term.

Low leverage and solid capitalization

Very low debt-to-equity and respectable ROE indicate a conservative balance sheet and capital base. This reduces insolvency risk, preserves lending capacity in downturns, and gives the bank flexibility to absorb credit losses or pursue buybacks/dividends without stressing solvency over the next several quarters.

Strong free cash flow generation

Robust FCF growth and near-par conversion of net income to cash underpin sustainable capital return programs and reserve builds. Reliable cash generation supports ongoing buybacks, dividend coverage and investment in lending capacity, improving resilience across economic cycles.

Negative Factors

Sharp revenue decline

A pronounced drop in TTM revenue undermines the sustainability of earnings and heightens reliance on margin improvements or nonrecurring items. If top-line weakness persists, it could constrain loan growth, limit capacity for expense absorption, and pressure long-term profit momentum and capital accumulation.

High share of uninsured deposits

Nearly half of deposits being uninsured is a structural funding vulnerability. In stressed markets this mix can prompt faster outflows or higher pricing to retain balances. Even with stated liquidity coverage, the concentration raises ongoing funding cost and stability risks over the medium term.

Rising special-mention loans

An increase in special-mention loans signals emerging credit stress within the portfolio. Downgrades tied to covenant breaches point to idiosyncratic weakness that may require higher provisions and could weigh on net income and capital if not resolved within management's expected timeframe.

Cathay General Bancorp Business Overview & Revenue Model

Company Description

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures. In addition, the company offers trade financing, letter of credit, wire transfer, forward currency spot and forward contract, traveler's check, safe deposit, night deposit, social security payment deposit, collection, bank-by-mail, drive-up and walk-up window, automatic teller machine, Internet banking, investment, and other customary bank services, as well as securities and insurance products. As of March 1, 2022, it operated 31 branches in Southern California, 16 branches in Northern California, 10 branches in New York, four branches in Washington, two branches in Illinois, and two branches in Texas, as well as one branch each in Maryland, Massachusetts, Nevada, and New Jersey, and Hong Kong; and a representative office each in Beijing, Taipei, and Shanghai. The company was founded in 1962 and is headquartered in Los Angeles, California.

How the Company Makes Money

Cathay General Bancorp generates revenue primarily through interest income from loans and investments, as well as non-interest income from various banking services. Key revenue streams include net interest income, which is earned from the interest on loans provided to customers, and investment securities. Additionally, the bank earns fee-based income from services such as account maintenance fees, transaction fees, and wealth management services. The company also benefits from its strong relationships with the Asian American community, which has led to a loyal customer base and increased demand for its products. Partnerships with local businesses and community organizations further enhance its market presence and contribute to its earnings.

Cathay General Bancorp Financial Statement Overview

Summary

Solid overall fundamentals supported by strong profitability (TTM net margin 22.6%, EBIT margin 37.7%), low leverage (debt-to-equity 0.041), healthy ROE (10.6%), and strong cash conversion (FCF-to-net income 98.1%) with FCF growth (+21.6%). The main offset is a sharp TTM revenue growth decline (-33.8%), which raises questions about near-term growth durability.

Income Statement

Cathay General Bancorp's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by 33.8%, which is concerning. However, the company maintains a solid net profit margin of 22.6% and an EBIT margin of 37.7%, reflecting strong profitability. Historical data shows fluctuating revenue growth with a peak in 2023, but recent declines suggest potential challenges in sustaining growth.

Balance Sheet

The balance sheet of Cathay General Bancorp is robust, with a low debt-to-equity ratio of 0.041 in the TTM period, indicating low leverage and financial stability. The return on equity is healthy at 10.6%, showcasing efficient use of equity to generate profits. The equity ratio is not explicitly calculated, but the company's strong equity position relative to assets suggests a stable financial structure.

Cash Flow

Cathay General Bancorp's cash flow statement reveals a positive trend in free cash flow growth, with a 21.6% increase in the TTM period. The free cash flow to net income ratio is high at 98.1%, indicating strong cash generation relative to net income. However, the operating cash flow to net income ratio is not available, which limits a full assessment of cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.37B	1.39B	1.31B	908.10M	721.11M	743.39M
Gross Profit	711.62M	692.22M	784.06M	775.97M	668.37M	537.43M
EBITDA	379.77M	334.37M	421.69M	492.34M	397.96M	270.48M
Net Income	304.81M	285.98M	354.12M	360.64M	298.30M	228.86M
Balance Sheet
Total Assets	24.08B	23.05B	23.08B	21.95B	20.89B	19.04B
Cash, Cash Equivalents and Short-Term Investments	2.21B	1.71B	2.43B	2.64B	3.58B	2.46B
Total Debt	359.84M	227.73M	709.72M	659.25M	192.97M	326.33M
Total Liabilities	21.17B	20.21B	20.34B	19.47B	18.44B	16.62B
Stockholders Equity	2.90B	2.85B	2.74B	2.47B	2.45B	2.42B
Cash Flow
Free Cash Flow	394.89M	325.52M	381.34M	464.00M	330.59M	314.18M
Operating Cash Flow	400.33M	329.15M	384.74M	467.39M	334.32M	319.95M
Investing Cash Flow	-891.04M	184.03M	-1.48B	-1.85B	-859.92M	-242.20M
Financing Cash Flow	460.01M	-302.47M	758.74M	94.74M	1.55B	749.55M

Cathay General Bancorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CATY, the sentiment is Positive. The current price of 52.47 is above the 20-day moving average (MA) of 50.88, above the 50-day MA of 50.08, and above the 200-day MA of 46.79, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 65.24 is Neutral, neither overbought nor oversold. The STOCH value of 64.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CATY.

Cathay General Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INDB	79 Outperform	$4.06B	18.49	6.25%	3.05%	11.05%	-10.78%
FBP	77 Outperform	$3.55B	10.46	18.97%	3.38%	2.35%	13.72%
FULT	75 Outperform	$3.78B	10.11	10.92%	3.52%	9.60%	20.38%
CATY	74 Outperform	$3.58B	11.58	10.63%	2.72%	-1.59%	9.34%
FIBK	73 Outperform	$3.79B	12.52	8.95%	5.24%	-5.43%	4.19%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TBBK	65 Neutral	$2.76B	12.32	30.85%	―	29.24%	21.49%

Cathay General Bancorp Corporate Events

Cathay General Bancorp Announces CFO Retirement and Successor

On January 23, 2026, Cathay General Bancorp announced that long-serving Chief Financial Officer and Treasurer Heng W. Chen will retire from his roles at Cathay General Bancorp and Cathay Bank effective March 1, 2026, after a 23-year tenure at the company, during which the bank recorded sustained growth, strong earnings and consistent shareholder value creation; Chen will stay on as Special Advisor to the Office of the President at Cathay Bank through December 31, 2026. The company named Deputy Chief Financial Officer Albert J. Wang, a certified public accountant with more than 28 years of finance and accounting experience at institutions including Webster Bank, Banc of California, Santander Bank and PricewaterhouseCoopers, as Chen’s successor as CFO and Treasurer effective March 1, 2026, with the two executives working closely to ensure a smooth leadership transition in the bank’s finance function.

The most recent analyst rating on (CATY) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Cathay General Bancorp stock, see the CATY Stock Forecast page.

Cathay General Bancorp Reports Strong Q4 and 2025 Results

On January 22, 2026, Cathay General Bancorp reported unaudited results for the fourth quarter and full year ended December 31, 2025, posting net income of $315.1 million, or $4.54 per diluted share, for 2025 and $90.5 million, or $1.33 per diluted share, for the fourth quarter. Quarterly net income rose 16.5% from the third quarter, supported by higher net interest income as deposit costs declined, lifting net interest margin to 3.36% from 3.31%, while returns on average assets and equity improved to 1.49% and 12.27%, respectively. For the full year, loans grew 4.0% to $20.15 billion and deposits climbed 6.1% to $20.89 billion versus 2024, indicating solid franchise growth, while the efficiency ratio improved markedly to 43.41% from 51.35% a year earlier and the allowance for credit losses increased to 1.03% of gross loans as the bank continued to build reserves. Management also highlighted share repurchases in the fourth quarter, buying back about 1.1 million shares for $51.9 million, signaling ongoing capital return to shareholders alongside balance sheet expansion and tighter operating efficiency.

The most recent analyst rating on (CATY) stock is a Sell with a $45.00 price target. To see the full list of analyst forecasts on Cathay General Bancorp stock, see the CATY Stock Forecast page.