Cathay General Bancorp (CATY) AI Stock Analysis

• Market Cap: $3.43B
• Dividend Yield: 2.73%
• Average Volume (3M): 362.13K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.96
• Revenue Growth: -0.17%
• EPS Growth: -0.29%
• Country: US
• Employees: 1,266
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.10
• Shares Outstanding: 69,093,414
• 10 Day Avg. Volume: 321,194
• 30 Day Avg. Volume: 362,132
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 2.58
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 10.73
• 1Y Price Target: $51.00
• Price Target Upside: 2.31% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: $52.00 ▲(4.31% Upside)

Cathay General Bancorp's overall stock score reflects strong financial performance and reasonable valuation. The company's robust profitability and stable cash flow are significant strengths. Technical analysis indicates mixed signals, while the earnings call reveals both growth prospects and operational challenges. The stock's valuation is fair, with a moderate dividend yield enhancing its appeal.

Positive Factors

Earnings and Profitability

NIM compression of 4 basis points was better than the estimated 6 basis points, with 2024 guidance reiterated.

Financial Flexibility

The company's strong capital position provides flexibility to reduce deposit costs and generate prudent growth in a lower rate environment.

Share Repurchases

Share repurchases are guided to $35 million per quarter, with a potential increase by $7.5 million, which is better than expected.

Negative Factors

Credit Quality

Credit quality weakened as nonperforming loans increased 5% to $111 million, with net-charge offs rising by $7 million in the second quarter.

Financial Performance

Higher than expected expenses, tax rate, and provision for loan losses resulted in a combined earnings reduction of $0.11 per share.

Loan Growth

Loan growth guidance for 2024 was lowered to -1% to 0% year-over-year, falling below previous expectations of 0%-2%.

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 investment securities, as well as non-interest income from various banking services. The key revenue streams include interest earned on commercial and residential loans, which constitute a significant portion of their earnings. Additionally, the bank earns fees from deposit accounts, service charges, and other transactional services. Investment in securities also contributes to interest income. The company benefits from its strong reputation within the Asian-American community, fostering customer loyalty and driving business growth. Furthermore, strategic partnerships with local businesses and community organizations enhance its market presence and customer base, positively impacting its financial performance.

Cathay General Bancorp Financial Statement Overview

Summary

Cathay General Bancorp shows strong revenue growth, but faces challenges in sustaining profitability and operational efficiency. Despite this, the balance sheet is robust with low leverage and strong equity, supporting financial stability. However, cash flow performance needs attention due to reduced operating cash flow, though free cash flow remains positive.

Income Statement

Cathay General Bancorp demonstrates solid revenue growth over the years, with a notable increase from $784 million in 2023 to $1.33 billion in 2024. However, the net profit margin has decreased from 45.17% in 2023 to 21.42% in 2024, indicating a decline in profitability. The EBIT margin also dropped significantly from 68.47% in 2023 to 1.77% in 2024, suggesting operational challenges. Despite these issues, the overall revenue trajectory remains positive.

Balance Sheet

The balance sheet reflects a strong equity position with stockholders' equity increasing to $2.85 billion in 2024. The debt-to-equity ratio improved from 0.26 in 2023 to 0.04 in 2024, indicating reduced leverage and enhanced financial stability. The equity ratio stands at 12.34%, highlighting a stable capital structure despite the decrease in total assets.

Cash Flow

Operating cash flow decreased from $384 million in 2023 to $209 million in 2024, indicating reduced cash generation efficiency. However, free cash flow remained positive, and the company maintained strong free cash flow to net income ratios across the periods. The decline in operating cash flow suggests potential challenges in maintaining cash flow levels.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	729.72M	784.06M	908.10M	721.11M	743.39M
Gross Profit	692.22M	784.06M	775.97M	668.37M	537.43M
EBITDA	0.00	0.00	27.11M	397.96M	270.48M
Net Income	285.98M	354.12M	360.64M	298.30M	228.86M
Balance Sheet
Total Assets	23.05B	23.08B	21.99B	20.89B	19.04B
Cash, Cash Equivalents and Short-Term Investments	1.70B	828.80M	2.63B	3.58B	2.46B
Total Debt	227.73M	709.72M	659.25M	192.97M	326.33M
Total Liabilities	20.21B	20.34B	19.51B	192.97M	326.33M
Stockholders Equity	2.85B	2.74B	2.47B	2.45B	2.42B
Cash Flow
Free Cash Flow	325.52M	381.34M	464.00M	330.59M	314.18M
Operating Cash Flow	329.15M	384.74M	467.39M	334.32M	319.95M
Investing Cash Flow	184.03M	-1.48B	-1.85B	-859.92M	-242.20M
Financing Cash Flow	-302.47M	758.74M	94.74M	1.55B	749.55M

Cathay General Bancorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.85
• 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 49.85 is above the 20-day moving average (MA) of 48.40, above the 50-day MA of 47.35, and above the 200-day MA of 45.31, indicating a bullish trend. The MACD of 0.99 indicates Negative momentum. The RSI at 60.35 is Neutral, neither overbought nor oversold. The STOCH value of 68.27 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
FBP	81 Outperform	$3.54B	11.74	18.38%	3.20%	3.10%	3.14%
INDB	79 Outperform	$3.54B	16.05	6.29%	3.27%	3.67%	-10.83%
TBBK	78 Outperform	$3.49B	16.46	27.41%	―	25.43%	21.96%
FIBK	73 Outperform	$3.41B	14.66	6.91%	5.72%	-2.11%	-8.95%
FULT	73 Outperform	$3.53B	11.36	10.08%	3.65%	17.61%	1.89%
CATY	71 Outperform	$3.43B	11.97	10.38%	2.73%	-0.17%	-0.29%
Sector *	68 Neutral	$17.80B	11.94	9.89%	3.74%	9.69%	1.17%

Cathay General Bancorp Corporate Events

Cathay General Bancorp Reports Strong Q2 2025 Results

Cathay General Bancorp announced its financial results for the second quarter of 2025, reporting a net income of $77.5 million, an increase from the previous quarter. The company saw improvements in net interest margin, total loans, and deposits, and initiated a stock repurchase program. The financial performance highlights a robust growth trajectory, with significant increases in net interest income and non-interest income, indicating strong operational efficiency and strategic financial management.

The most recent analyst rating on (CATY) stock is a Hold with a $43.00 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 $150M Share Buyback

On June 4, 2025, Cathay General Bancorp announced a new share repurchase program authorizing the buyback of up to $150 million of its common stock. This initiative follows the completion of a previous $125 million repurchase program. The timing, price, and volume of repurchases will be determined by management, and the program can be adjusted based on market conditions and other factors. This move reflects the company’s strategic financial management and could impact its stock value and shareholder returns.

The most recent analyst rating on (CATY) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Cathay General Bancorp stock, see the CATY Stock Forecast page.

Cathay General Bancorp Approves Amended Incentive Plan

On May 12, 2025, Cathay General Bancorp held its Annual Meeting of Stockholders, where several key decisions were made. The stockholders approved the amended and restated 2005 Incentive Plan, which increased the number of shares authorized for issuance by 1,724,538. Additionally, four Class II directors were elected, the executive compensation was approved, and KPMG LLP was ratified as the independent registered public accounting firm for the 2025 fiscal year. These decisions are likely to impact the company’s operations by aligning executive incentives with shareholder interests and ensuring continued financial oversight.

The most recent analyst rating on (CATY) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on Cathay General Bancorp stock, see the CATY Stock Forecast page.