Los Angeles, California, USA, August 16, 2025
News Summary
Cathay General Bancorp reaffirmed its quarterly cash dividend of $0.34 per share and repurchased $35.6 million of stock under a newly authorized $150 million buyback program. Q2 results showed net income rose to $77.5 million, supported by higher net interest income and a 3.27% net interest margin. The bank reported solid capital ratios but a notable rise in non-performing assets to $199.5 million and a decline in the allowance-to-NPL ratio, prompting management to emphasize conservative payout policy and strategic lending shifts toward lower-risk segments while maintaining shareholder returns.
Cathay General Bancorp Confirms Dividend, Reports $35.6M in Buybacks as Credit Stress Rises
Key takeaways
The board declared a cash dividend of $0.34 per common share payable September 8, 2025, and the company executed $35.6 million of stock buybacks in Q2 2025. Quarterly net income rose 11.5% year‑over‑year to $77.5 million, but non‑performing assets jumped 55% from a year earlier. Capital ratios remain well above regulatory minimums even as the allowance for loan losses falls relative to non‑performing loans.
Dividend and buybacks top the news
Stockholders of record as of the close of business on August 28, 2025 will receive the $0.34 per share cash dividend on September 8. The company has paid this same quarterly dividend steadily for five years, translating to an annualized yield of about 2.88% as of August 2025. Management says the dividend policy is conservative, with a company payout ratio of 32.6% compared with a Financial Services sector average of 41.3%, to preserve capital amid rising credit risks.
Cathay authorized a $150 million repurchase program in June 2025 and repurchased $35.6 million of shares in Q2, representing about 4.4% of equity. The buybacks were partly funded by the increase in net income and are presented as part of a shareholder‑friendly approach that balances returns with balance‑sheet strength.
Profit, margins and efficiency
Q2 2025 net income was $77.5 million, up from $66.8 million in Q2 2024. Earnings per share were $1.11 basic and $1.10 diluted, compared with $0.92 a share the prior year. Net interest income before provisions rose to $181.2 million from $165.3 million a year earlier, while total interest and dividend income fell modestly to $322.9 million from $332.9 million, mainly because of lower loan interest income.
The reported net interest margin (NIM) was 3.27%, and the efficiency ratio was 45.34%, both cited as outperforming peers and regional averages. Management attributes those strengths to disciplined cost control and pricing power.
Rising credit stress and allowance trends
The company reported non‑performing assets (NPA) of $199.5 million in Q2 2025, a 55% year‑over‑year increase. Non‑accrual loans rose 12.7% and were identified as a primary driver of the NPA increase. Despite the dollar rise, NPAs remain a modest 0.84% of total assets — below regional bank averages.
The allowance for loan losses (ALL) to non‑performing loans ratio declined to 96.12% in Q2 from 112.06% in Q1, indicating reduced default buffers. The company warned that this drop highlights vulnerability in certain areas, particularly construction and commercial real estate (CRE). Construction loans fell 9.5% during the quarter as the bank reduced exposure to more volatile projects.
Capital and balance‑sheet strength
Capital ratios remained solid: Tier 1 risk‑based capital was 13.35%, common equity Tier 1 (CET1) was 13.6%, and the leverage ratio was 11.09% as of June 2025. Management framed these levels as providing room to continue dividends and buybacks while maintaining a conservative cushion against credit stress.
Strategic lending shifts and geographic profile
The bank reported a strategic reallocation of lending into lower‑risk sectors, including lower‑risk CRE, residential mortgages, affordable housing and renewable energy projects. The shift is intended to diversify risk and seek longer‑run growth opportunities while reducing construction exposure.
Cathay operates a strong California franchise and focuses on Asian‑American markets, a concentration management says is both a strength and a regional vulnerability. The branch footprint includes over 60 branches: 24 in Southern California, 17 in Northern California, 9 in New York State and additional branches across Washington, Illinois, Texas, Maryland, Massachusetts, Nevada and New Jersey. The company also maintains a branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei.
Outlook, risks and analyst view
Analysts included in the consensus set a 2025 upside projection of roughly 26.42% for the stock, citing the firm’s ability to reduce credit loss provisions and maintain asset quality as contributors to that view. The company highlighted that allowance for loan losses is the most significant estimate that could change, per its Form 10‑Q filed on August 8, 2025, and continues to monitor economic conditions that could affect loan performance.
Management presented the firm as an income‑growth hybrid, combining dividend income and buybacks with strong capital metrics. At the same time, the rising NPAs and a falling ALL‑to‑NPL ratio signal a need for cautious credit management, especially in CRE and construction sectors where a few large downgrades and defaults were cited as proximate causes of deterioration.
Where to find more information
Company information is available on the corporate site at www.cathaygeneralbancorp.com and the bank site at www.cathaybank.com. The company press contact is listed as Heng W. Chen, (626) 279‑3652. The Form 10‑Q for the quarter was filed with the SEC on August 8, 2025. Select market data referenced in reporting were provided by ICE Data Services and select reference data by FactSet; charting and market views reference TradingView.
FAQ
Will the declared dividend be paid as scheduled?
Yes. The board declared a cash dividend of $0.34 per share payable September 8, 2025 to stockholders of record at the close of business on August 28, 2025.
How large were the buybacks in Q2 2025?
$35.6 million of shares were repurchased in Q2 2025, funded in part by higher net income and representing about 4.4% of equity.
Are there signs of credit trouble?
Yes. Non‑performing assets rose 55% year‑over‑year to $199.5 million and the allowance for loan losses fell relative to non‑performing loans, signaling reduced buffers against defaults, particularly in construction and CRE.
How strong is the bank’s capital position?
Capital ratios remain solid: Tier 1 at 13.35%, CET1 at 13.6%, and a leverage ratio of 11.09% as of June 2025, which the company views as providing room for capital returns.
What strategic changes is the bank making to lending?
The bank is reducing exposure to construction loans and reallocating to lower‑risk CRE, residential mortgages, affordable housing and renewable energy projects to diversify risk.
Key Q2 2025 metrics and features
| Feature | Q2 2025 Value / Note |
|---|---|
| Cash dividend | $0.34 per share; payable Sept 8, 2025; record date Aug 28, 2025 |
| Buybacks executed | $35.6 million in Q2 2025; $150 million program authorized in June 2025 |
| Net income | $77.5 million in Q2 2025; +11.5% YoY |
| Non‑performing assets | $199.5 million; +55% YoY; 0.84% of total assets |
| ALL to NPL ratio | 96.12% in Q2 2025 (down from 112.06% in Q1 2025) |
| Net interest margin (NIM) | 3.27% |
| Efficiency ratio | 45.34% |
| Tier 1 / CET1 / Leverage | Tier 1: 13.35% | CET1: 13.6% | Leverage: 11.09% |
| Branch footprint | Over 60 branches (24 SoCal, 17 NorCal, 9 NY, plus others); Hong Kong branch and offices in Beijing, Shanghai, Taipei |
| Analyst upside | Consensus projected ~26.42% upside for 2025 |
Data and market references: select market data provided by ICE Data Services; select reference data provided by FactSet; charting reference TradingView.
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Additional Resources
- Business Wire: Cathay General Bancorp Declares $0.34 Per Share Dividend
- Wikipedia: Cathay General Bancorp
- TradingView: Cathay General Bancorp SEC 10-Q Report
- Google Search: Cathay General Bancorp news
- AiInvest: Cathay General Bancorp — Balancing dividend resilience, credit risks
- Google Scholar: Cathay General Bancorp
- Investing.com: Cathay General Bancorp declares $0.34 per share dividend
- Encyclopedia Britannica: Cathay General Bancorp
- The Globe and Mail: Cathay General Bancorp to announce Q2 2025 financial results
- Google News: Cathay General Bancorp
