Cathay General Bancorp (CATY) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $67.5 million, or $0.94 per diluted share, up 1% sequentially but down from $82.4 million a year ago.

• Total revenue reached $189.5 million for the quarter; total assets were $23.27 billion, with deposits at $19.94 billion and gross loans at $19.37 billion.

• Book value per share increased to $39.66, up 2.48% sequentially and 9.11% year-over-year; tangible book value per share rose to $34.35.

• Return on average equity was 9.50% and return on average assets was 1.15% for Q3 2024, both lower than the prior year.

• Share repurchases totaled 832,460 shares for $35 million at $42/share in Q3 under the $125 million buyback program.

Financial highlights

• Net interest income was $169.2 million, up 2.4% sequentially but down 8.8% year-over-year; non-interest income surged 54% sequentially to $20.4 million.

• Net interest margin rose to 3.04% from 3.01% in Q2, but declined from 3.38% a year ago; September NIM was 3.17%.

• Non-interest expense was $96.9 million, down 2.5% sequentially but up 3.1% year-over-year; efficiency ratio improved to 51.11%.

• Provision for credit losses increased to $14.5 million from $6.6 million in Q2 and $7.0 million a year ago; allowance for credit losses rose to $173.2 million, or 0.89% of gross loans.

• Effective tax rate for Q3 was 13.6%, up from 7.9% in Q2 and 11.0% a year ago.

Outlook and guidance

• Net interest margin for 2024 expected between 3.05% and 3.10%.

• Full-year 2024 loan growth projected between -1% and 0%, revised from prior 0% to 2%.

• Deposit growth guidance maintained at 3% to 4% for the year; core noninterest expense projected to grow 4% to 5%.

• Effective tax rate for 2024 expected between 10.5% and 11.5%.

• Continued share repurchases of ~$35 million per quarter anticipated, with potential increase in buyback authorization to $150 million in 2025.