Cathay General Bancorp (CATY) Q4 2024 earnings summary

Executive summary

• Q4 2024 net income was $80.2 million, up 18.8%–19% sequentially but down 3% year-over-year; full-year net income was $286.0 million, down 19% year-over-year.

• Diluted EPS for Q4 2024 was $1.12, up 19% sequentially and down 1% year-over-year; full-year diluted EPS was $3.95, down 19% year-over-year.

• Total revenue for Q4 2024 was $186.5 million, down 2% sequentially and 9% year-over-year; full-year revenue was $729.7 million, down 10% year-over-year.

• The company repurchased 506,651 shares for $23.9 million in Q4 at an average cost of $47.10 per share and plans to continue buybacks in Q1 2025.

• Full-year and Q4 results reflect improved net interest income, lower non-interest expense, and reduced tax expense, despite a decrease in non-interest income.

Financial highlights

• Net interest margin for Q4 was 3.07%, up from 3.04% in Q3; full-year margin was 3.04%, down from 3.45% in 2023.

• Net interest income for Q4 2024 was $171.0 million, up 1% sequentially and down 6% year-over-year.

• Non-interest income fell by $4.9 million to $15.5 million, mainly due to lower gains on equity securities.

• Non-interest expenses dropped $11.6 million to $85.2 million, primarily from lower solar tax credit fund amortization and FDIC/State assessments.

• Q4 2024 efficiency ratio improved to 45.70% from 51.11% in Q3 and 53.84% in Q4 2023.

Outlook and guidance

• Loan and deposit growth expected between 3% and 4% for 2025.

• Net interest margin anticipated to range from 3.10% to 3.20% in 2025, assuming one rate cut in July.

• Core non-interest expense (excluding tax credit and core deposit intangible amortization) expected to rise 4.5%-5.5% in 2025.

• Effective tax rate forecasted at 19.5%-20.5% for 2025; no new solar tax credit investments planned.

• Management highlighted ongoing risks including credit quality, regulatory changes, interest rate fluctuations, and economic conditions in key markets.