Cathay General Bancorp (CATY) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $69.5 million, down 13.3% sequentially and 2.7% year-over-year; diluted EPS was $0.98, down 12.5% from Q4 2024 and flat year-over-year.

• Total assets grew to $23.21 billion, and total deposits increased 0.7% to $19.82 billion.

• Net interest margin rose to 3.25% from 3.07% in Q4 2024, with net interest income before provision for credit losses up to $176.6 million.

• Completed $125 million stock repurchase program, buying back 876,906 shares at an average of $46.83 per share; $41.1 million repurchased in Q1 2025.

• Return on average equity was 9.84% and return on average assets was 1.22% for Q1 2025.

Financial highlights

• Net interest income rose 3% sequentially to $176.6 million; net interest margin improved to 3.25%.

• Non-interest income dropped 27.6% sequentially to $11.2 million, mainly due to lower gains on equity securities.

• Non-interest expense was $85.7 million, up 0.6% sequentially, driven by higher FDIC and equipment costs.

• Provision for credit losses was $15.5 million, up from $14.5 million in Q4 2024, mainly for one commercial client.

• Efficiency ratio was 45.60%, essentially flat sequentially.

Outlook and guidance

• 2025 loan growth guidance widened to 1%-4% amid economic and tariff uncertainties, revised down from 3%-4%.

• Net interest margin guidance raised to 3.25%-3.35% for 2025; one rate cut anticipated in July.

• Effective tax rate for 2025 estimated at 19.5%-20.5%; no solar tax credit investment planned.

• Core noninterest expense projected to rise 4.5%-5.5% in 2025.

• Liquidity sources, including FHLB borrowing capacity and unpledged securities, exceed uninsured and uncollateralized deposits.