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Cathay General Bancorp
(NASDAQ:CATY)
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Rating:77Outperform
Price Target:
$69.00
▲(11.08% Upside)
Action:Reiterated
Date:10/22/26
CATY scores well primarily on strong financial performance (low leverage, solid profitability, and improving recent cash generation) and a constructive earnings update with raised growth guidance and resilient margin outlook. Valuation is supportive with a modest P/E and decent dividend yield. The main constraint is mixed technical momentum (negative MACD and price below key mid-term moving averages).
Positive Factors
Raised Growth Outlook
Higher full-year loan and deposit targets indicate stronger underlying demand and franchise momentum than previously expected. Sustained balance-sheet expansion can support recurring net interest income, broaden customer relationships, and improve operating leverage over the next several quarters.
Negative Factors
Elevated Credit Losses
Concentrated charge-offs in movie theater commercial real estate and multifamily construction demonstrate that selected portfolios remain vulnerable to borrower-specific problems. Further losses could raise provisions, reduce earnings, and weaken the benefit of otherwise strong operating performance.
Read all positive and negative factors
Positive Factors
Negative Factors
Raised Growth Outlook
Higher full-year loan and deposit targets indicate stronger underlying demand and franchise momentum than previously expected. Sustained balance-sheet expansion can support recurring net interest income, broaden customer relationships, and improve operating leverage over the next several quarters.
Read all positive factors
Cathay General Bancorp (CATY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.05B
Dividend Yield2.44%
Average Volume (3M)468.83K
Price to Earnings (P/E)11.1
Beta (1Y)0.79
Revenue Growth0.26%
EPS Growth23.49%
CountryUS
Employees1,268
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)5.15
Shares Outstanding66,713,820
10 Day Avg. Volume395,984
30 Day Avg. Volume468,830
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)1.12
Price to Sales (P/S)2.37
P/FCF Ratio9.01
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue2.98
Enterprise Value/Gross Profit5.21
Enterprise Value/Ebitda8.76
Forecast
1Y Price Target
$61.50Price Target Upside-1.00% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)5.57
Revenue Forecast (FY)$892.09M
Cathay General Bancorp Business Overview & Revenue Model
Company Description
Cathay General Bancorp serves as the parent entity for Cathay Bank, a financial institution that delivers a broad spectrum of commercial banking solutions. These services are tailored for individual clients, professional practices, and small to me...
How the Company Makes Money
Cathay General Bancorp makes money primarily through its banking subsidiary by earning interest income and fees from financial services. The largest earnings driver is net interest income: the bank collects interest on loans (such as commercial an...
Cathay General Bancorp Earnings Call Summary
Earnings Call Date:Oct 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 27, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. Management reported record net interest income, margin expansion, robust loan and deposit growth, improved efficiency, declining non-performing assets, and higher full-year growth outlooks. These strengths outweighed the elevated charge-offs, continued deposit-cost pressure, higher notable expenses, lower wealth management fees, and some uncertainty around fourth-quarter growth.Positive Updates
Record Net Interest Income and Margin Expansion
Net interest income reached a record $211.9 million, increasing $11 million or 5.5% from the prior quarter. Net interest margin expanded 4 basis points to 3.52%, as higher loan yields more than offset higher funding costs.
Negative Updates
Elevated Charge-Offs in Three Previously Identified Credits
Net charge-offs increased to $25.3 million, or 49 basis points annualized, and were concentrated in three previously identified credits: two movie theater CRE loans totaling approximately $18 million and one multifamily construction loan with almost $9 million of exposure related to water damage and mold contamination. The provision for credit loss was $28.6 million, and the allowance for loan loss increased approximately $5 million to $224 million.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Net Interest Income and Margin Expansion
Net interest income reached a record $211.9 million, increasing $11 million or 5.5% from the prior quarter. Net interest margin expanded 4 basis points to 3.52%, as higher loan yields more than offset higher funding costs.
Read all positive updates
Company Guidance
Management raised full-year loan growth guidance to 5%-6% from 3.5%-4.5% previously and deposit growth guidance to 4%-5% from 3%-4%, while maintaining adjusted non-interest expense growth guidance of 3.5%-4.5% and full-year NIM guidance of 3.40%-3.50%; the rate outlook assumes two 25 basis points increases during 2026, including the September increase and another increase in December, and the full-year effective tax rate is expected to be between 21.5% and 22.5%. Management said it is “not ready to call a peak on NIM,” still thinks there is room for expansion, and will “probably be at the upper end of the range” near term; $8.9 billion of loans repricing over the next year should provide an asset-side tailwind, while $3.4 billion of CDs rolling off this quarter at a rate of 3.46 and competition are expected to create more pressure. Fourth-quarter LIHTC amortization is expected to be “more of the $9 million-$10 million per quarter,” though it can vary quarter to quarter; the $331 million increase in non-interest-bearing deposits in 1 quarter was described as “not sustainable” and should not be baked into the forward guide; wealth management revenue is expected to show “a tick up” next quarter, “Maybe not back to the Q2 level”; and securities repositioning transactions are expected to add approximately $11.4 million to annual net interest income, with an aggregate earn-back period of approximately 3.6 years.Cathay General Bancorp Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
84
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.39B | 1.38B | 1.39B | 1.31B | 908.10M | 721.11M |
| Gross Profit | 795.13M | 762.46M | 692.22M | 784.06M | 775.97M | 668.37M |
| EBITDA | 473.05M | 423.43M | 334.37M | 421.69M | 492.34M | 397.96M |
| Net Income | 347.26M | 315.12M | 285.98M | 354.12M | 360.64M | 298.30M |
Balance Sheet | ||||||
| Total Assets | 24.65B | 24.23B | 23.05B | 23.08B | 21.95B | 20.89B |
| Cash, Cash Equivalents and Short-Term Investments | 3.01B | 1.80B | 1.71B | 2.43B | 2.64B | 3.58B |
| Total Debt | 154.25M | 208.92M | 227.73M | 709.72M | 659.25M | 192.97M |
| Total Liabilities | 21.61B | 21.30B | 20.21B | 20.34B | 19.47B | 18.44B |
| Stockholders Equity | 3.05B | 2.93B | 2.85B | 2.74B | 2.47B | 2.45B |
Cash Flow | ||||||
| Free Cash Flow | 534.03M | 363.66M | 325.52M | 381.34M | 464.00M | 330.59M |
| Operating Cash Flow | 541.18M | 368.57M | 329.15M | 384.74M | 467.39M | 334.32M |
| Investing Cash Flow | -877.79M | -857.32M | 184.03M | -1.48B | -1.85B | -859.92M |
| Financing Cash Flow | 416.73M | 873.64M | -302.47M | 758.74M | 94.74M | 1.55B |
Cathay General Bancorp Technical Analysis
Positive
62.12
Price Trends
61.34
Positive
61.27
Positive
56.51
Positive
Market Momentum
0.02
Negative
69.26
Neutral
84.08
Negative
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 62.12 is above the 20-day moving average (MA) of 60.21, above the 50-day MA of 61.34, and above the 200-day MA of 56.51, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 69.26 is Neutral, neither overbought nor oversold. The STOCH value of 84.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CATY.
Cathay General Bancorp Risk Analysis
Cathay General Bancorp disclosed 45 risk factors in its most recent earnings report. Cathay General Bancorp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cathay General Bancorp Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.25B | 9.45 | 17.32% | 3.04% | 0.58% | 15.28% | |
77 Outperform | $4.05B | 11.12 | 12.14% | 2.44% | 0.26% | 23.49% | |
76 Outperform | $3.90B | 14.63 | 8.22% | 3.60% | 8.42% | -0.98% | |
75 Outperform | $933.06M | 10.54 | 11.20% | 3.52% | 4.08% | 38.09% | |
68 Neutral | $1.74B | 13.66 | 5.61% | 4.10% | 7.35% | 178.63% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
51 Neutral | $2.75B | -42.37 | -0.62% | 2.65% | -12.90% | -161.70% |
* Financial Sector Average
CATY
Cathay General Bancorp
64.24
19.33
43.05%
HOPE
Hope Bancorp
14.05
3.99
39.68%
CVBF
Cvb Financial
23.05
5.11
28.49%
BANC
Banc of California
17.74
1.60
9.94%
HAFC
Hanmi Financial
32.24
7.19
28.69%
PFBC
Preferred Bank
108.62
19.72
22.18%
Cathay General Bancorp Corporate Events
Business Operations and StrategyFinancial Disclosures
Cathay General Bancorp Posts Strong Q3 2026 Results
Positive
Oct 21, 2026
Cathay General Bancorp reported unaudited third-quarter 2026 results on October 21, 2026, posting net income of $95.2 million, or $1.43 per diluted share, up from $92.2 million, or $1.37 per diluted share, in the prior quarter. Returns on assets a...
Business Operations and StrategyStock BuybackFinancial Disclosures
Cathay General Bancorp Reports Strong Second-Quarter Results
Positive
Jul 22, 2026
Cathay General Bancorp reported unaudited net income of $92.2 million, or $1.37 per diluted share, for the quarter ended June 30, 2026, up from $86.9 million, or $1.29 per diluted share, in the first quarter, with returns on average assets and equ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.