Cathay General Bancorp (CATY) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $77.5 million, up 11.5% sequentially and 16% year-over-year, with diluted EPS of $1.10, and return on average assets and equity at 1.33% and 10.72%, respectively.

• Total revenue reached $196.6 million, with total loans at $19.8 billion and deposits at $20.01 billion as of June 30, 2025.

• Book value per share rose to $41.62, up 1.74% sequentially and 7.54% year-over-year.

• A new $150 million stock repurchase program was announced, with $35.6 million repurchased in Q2 2025.

Financial highlights

• Net interest income before provision for credit losses was $181.2 million, up 2.6% sequentially and 9.6% year-over-year.

• Noninterest income rose 37.5% sequentially to $15.4 million, mainly from higher swap and derivative fees.

• Noninterest expense increased 4% to $89.1 million, mainly due to higher amortization and professional fees.

• Efficiency ratio improved to 45.34% from 45.60% in Q1 2025 and 55.65% in Q2 2024.

• Provision for credit losses was $11.2 million, down from $15.5 million in Q1 2025 but up from $6.6 million in Q2 2024.

Outlook and guidance

• 2025 loan and deposit growth guidance revised to 3%-4% due to strong Q2 performance.

• Net interest margin projected between 3.25% and 3.35% for 2025, with further expansion expected if Fed cuts rates.

• Effective tax rate guidance updated to 18.5%-19% for 2025 due to California tax legislation.

• Core noninterest expense growth estimated at 4.5%-5.5% for the year.

• Management anticipates two rate cuts in September and December 2025.