Cathay General Bancorp (CATY) AI Stock Analysis

• Market Cap: $3.42B
• Dividend Yield: 2.72%
• Average Volume (3M): 474.25K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.83
• 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: 0.69
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 2.37
• P/FCF Ratio: 8.89
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 2.51
• Enterprise Value/Gross Profit: 4.56
• Enterprise Value/Ebitda: 8.07
• 1Y Price Target: $50.00
• Price Target Upside: -0.40% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): 5.26
• Revenue Forecast (FY): $879.55M

• Rating: 74 Outperform
• Price Target: $56.00 ▲(11.55% Upside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

The score is driven primarily by strong financial quality (healthy margins, solid ROE, and very low leverage) and supportive valuation (P/E ~10.95 with a ~2.82% yield). Offsetting factors are weaker near-term technicals (below 20/50-day averages with subdued RSI) and earnings-call risk items around credit monitoring and deposit/loan pricing competition, despite constructive 2026 guidance and ongoing buybacks.

Positive Factors

Conservative balance sheet / low leverage

Very low leverage and steady equity growth give the bank durable capital flexibility. This reduces insolvency and refinancing risk, supports loan origination and buybacks, and provides a buffer through economic cycles, sustaining franchise stability over the next several quarters.

Strong profitability and margins

High net and operating margins indicate a profitable business model and pricing power in core products. Sustained margin levels, alongside an improving efficiency ratio, support internal capital generation and the ability to absorb modest credit or funding pressure over a multi‑quarter horizon.

Deposit growth and ample liquidity

Consistent deposit inflows plus sizable contingency funding (FHLB, Fed capacity, unpledged securities) underpin funding resilience. This structural liquidity buffer reduces rollover risk on uninsured balances and supports lending and margin stability across changing rate cycles.

Negative Factors

Rising special‑mention loans

An increase in special‑mention relationships signals emerging credit stress that can pressure provisioning and capital if remediations don't progress. These watch items may require higher reserves or write‑offs over 6–12 months, reducing earnings durability and lending capacity.

High share of uninsured deposits

A structurally high uninsured deposit share increases funding fragility in stressed conditions and raises reliance on contingency liquidity. Even with current coverage, this concentration can limit pricing power and require ongoing liquidity management, constraining strategic flexibility.

Choppy free‑cash‑flow and cooling momentum

While absolute FCF is healthy, negative and uneven FCF growth points to less consistent cash conversion, which can constrain discretionary uses like buybacks or reinvestment. Cooling earnings momentum and variable cash flow raise sensitivity to credit or funding shocks over coming quarters.

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

Strong underlying profitability and capitalization (net margin ~22.8%, EBIT margin ~29.4%, very low debt-to-equity ~0.07, ROE ~10.9%). Offsets are cooling earnings momentum versus 2022–2023 and uneven growth, plus choppy/declining TTM free cash flow growth despite solid absolute FCF (~$357M) and strong cash conversion (~0.99x net income).

Income Statement

CATY shows strong profitability, with TTM (Trailing-Twelve-Months) net margin of ~22.8% and solid operating profitability (EBIT margin ~29.4%). Revenue growth is positive in TTM (reported ~110.3%), but the longer-term pattern is uneven (strong expansion in 2022–2023 followed by a flatter 2024). Net income also softened from 2023 to 2024 and remains below the 2022–2023 peak, suggesting earnings momentum has cooled despite still-healthy margins.

Balance Sheet

The balance sheet looks conservatively positioned with low leverage: TTM debt-to-equity is ~0.07 (down materially from ~0.26 in 2022–2023). Equity has grown steadily over time, supporting balance sheet resilience. Returns remain solid for a regional bank, with TTM return on equity at ~10.9% (down from the 2022–2023 highs but still respectable), indicating good profitability without heavy reliance on debt.

Cash Flow

Cash generation is solid and generally tracks earnings well: TTM free cash flow is ~$357M and is ~0.99x net income, indicating high earnings-to-cash conversion. However, free cash flow growth is negative in TTM (-9.48%) and has been choppy over several years, which points to less consistent cash flow momentum even though absolute cash flow remains healthy.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.38B	1.39B	1.31B	908.10M	721.11M
Gross Profit	762.46M	692.22M	784.06M	775.97M	668.37M
EBITDA	431.08M	334.37M	421.69M	492.34M	397.96M
Net Income	315.12M	285.98M	354.12M	360.64M	298.30M
Balance Sheet
Total Assets	24.23B	23.05B	23.08B	21.95B	20.89B
Cash, Cash Equivalents and Short-Term Investments	1.80B	1.71B	2.43B	2.64B	3.58B
Total Debt	208.92M	227.73M	709.72M	659.25M	192.97M
Total Liabilities	21.30B	20.21B	20.34B	19.47B	18.44B
Stockholders Equity	2.93B	2.85B	2.74B	2.47B	2.45B
Cash Flow
Free Cash Flow	368.57M	325.52M	381.34M	464.00M	330.59M
Operating Cash Flow	368.57M	329.15M	384.74M	467.39M	334.32M
Investing Cash Flow	-857.32M	184.03M	-1.48B	-1.85B	-859.92M
Financing Cash Flow	873.64M	-302.47M	758.74M	94.74M	1.55B

Cathay General Bancorp Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 50.20
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CATY, the sentiment is Neutral. The current price of 50.2 is below the 20-day moving average (MA) of 52.44, below the 50-day MA of 50.88, and above the 200-day MA of 47.41, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.93 is Neutral, neither overbought nor oversold. The STOCH value of 25.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CATY.

Cathay General Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FBP	75 Outperform	$3.36B	9.85	18.97%	3.38%	2.35%	13.72%
CATY	74 Outperform	$3.42B	10.95	10.63%	2.72%	-1.59%	9.34%
FULT	70 Outperform	$3.76B	9.83	11.71%	3.52%	9.60%	20.38%
FIBK	68 Neutral	$3.56B	11.78	8.95%	5.24%	-5.43%	4.19%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TBBK	67 Neutral	$2.28B	11.01	30.85%	―	29.24%	21.49%
INDB	66 Neutral	$3.91B	17.58	6.25%	3.05%	11.05%	-10.78%

Cathay General Bancorp Corporate Events

Cathay General Bancorp Adds Veteran Director to Board

On February 4, 2026, Cathay General Bancorp appointed seasoned financial expert Lana Chan as a Class I director of both the company and Cathay Bank, with her term running until the 2027 annual meeting of stockholders; the board has not yet decided on any committee assignments for her, and her compensation will be aligned with that of other non-employee directors. Chan brings over three decades of experience in stock market analysis, risk assessment, and strategic advisory, including 15 years as a banking-focused equity research analyst at BMO Capital Markets and recent consulting work for Cathay Bank, while current director Jane Jelenko has notified the company that she will retire effective April 30, 2026, a planned transition that will leave the board at 12 members, 8 of whom will be independent, signaling continuity in governance and potentially strengthening the bank’s institutional investor engagement and industry expertise.

The most recent analyst rating on (CATY) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Cathay General Bancorp stock, see the CATY Stock Forecast page.

Cathay General Bancorp 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.