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, executes $35.6M buybacks amid rising non-performing assets and strong capital ratios
Cathay General Bancorp declared a quarterly cash dividend of $0.34 per common share, payable September 8, 2025 to shareholders of record at the close of business August 28, 2025. The bank also executed $35.6 million of share repurchases in Q2 2025 under a newly authorized $150 million buyback program. These moves come alongside improving profit metrics and a notable increase in non-performing assets.
Top-line financials and capital position
Net income for Q2 2025 rose to $77.5 million, an 11.5% increase year over year from Q2 2024. Basic earnings per share were $1.11 and diluted EPS $1.10, up from $0.92 in the prior-year quarter. The rise in quarterly profit was supported by higher net interest income and lower interest expense.
Total interest and dividend income was $322.9 million, down from $332.9 million a year earlier, primarily due to lower interest income from loans receivable. Net interest income before the provision for credit losses climbed to $181.2 million from $165.3 million in Q2 2024. The reported net interest margin stood at 3.27%, a level the company says outperforms many peers. The company reported an efficiency ratio of 45.34%, another metric the company cites as favorable versus regional bank averages.
Shareholder returns and capital management
The board confirmed the long-standing quarterly dividend of $0.34, a streak maintained for five years, giving an annualized yield of 2.88% as of August 2025. The company reported a dividend payout ratio of 32.6%, compared with a Financial Services sector average payout ratio of 41.3%. Management framed the payout ratio as a conservative choice intended to preserve capital buffers amid rising credit risk.
In June 2025 the company authorized a $150 million repurchase program and bought back $35.6 million in Q2, representing 4.4% of equity. The firm said the buybacks were funded in part by the 11.5% year-over-year net income growth and that the program aligns with a strategy of returning capital while maintaining a strong balance sheet.
Capital ratios remained solid at quarter end: Tier 1 risk-based capital ratio 13.35%, CET1 ratio 13.6%, and a leverage ratio of 11.09%. Management noted ratios remain above key thresholds and provide room for ongoing dividends and buybacks.
Asset quality: rising NPAs and reduced loss buffers
Non-performing assets totaled $199.5 million in Q2 2025, a 55% increase year over year. Non-accrual loans climbed 12.7% and the allowance for loan losses to non-performing loans ratio fell to 96.12% in Q2 from 112.06% in Q1 2025. The company cautioned that the decline in the ALL-to-NPL ratio signals reduced default buffers, with particular pressure in construction and commercial real estate sectors.
Despite the increase in dollar-level NPAs, the non-performing assets to total assets ratio was 0.84%, which the company notes remains below regional bank averages. Construction loan balances declined 9.5% in Q2 2025 as originations and portfolio mix shifted. Management described a strategic reallocation of lending toward lower-risk segments, including lower-risk commercial real estate, residential mortgages, affordable housing, and renewable energy projects to diversify risk and pursue long-term growth opportunities.
Company positioning and market context
The company characterized its strategy as an income-growth hybrid that pairs steady dividends and buybacks with a focus on capital strength. It pointed to disciplined cost management and pricing power as drivers of its favorable efficiency ratio and NIM performance. The Form 10-Q filed on August 8, 2025 highlights the allowance for loan losses as the most significant estimate subject to change and signals active monitoring of economic conditions and potential credit impacts.
At the same time, the sector context shows rising delinquencies in construction and CRE among regional banks. Cathay attributed its recent NPA increase to a handful of large commercial defaults and the downgrade of a loan relationship, while asserting that overall credit risk practices and asset quality metrics compare favorably to many peers.
Footprint, history and analyst view
Founded in 1962, the company operates more than 60 branches across the United States, with a concentration in California: 24 Southern California branches and 17 Northern California branches. The network also includes 9 branches in New York State and locations in Washington, Illinois, Texas, Maryland, Massachusetts, Nevada, and New Jersey. Overseas presence includes a branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei.
Analysts cited a consensus projection of approximately 26.42% upside for the stock in 2025. Company commentary pointed to the ability to reduce credit loss provisions and maintain asset quality as drivers of that upside outlook.
Key documents, contacts and data sources
- Form 10-Q filed on August 8, 2025 (quarterly SEC filing)
- Company websites: www.cathaygeneralbancorp.com and www.cathaybank.com
- Press contact listed: Heng W. Chen, (626) 279-3652
- Market and reference data: select market data provided by ICE Data Services; select reference data provided by FactSet. Additional market charts and metadata provided by TradingView.
Frequently Asked Questions
What dividend did Cathay General Bancorp declare for Q3 2025?
The board declared a quarterly cash dividend of $0.34 per common share, payable September 8, 2025 to shareholders of record at the close of business August 28, 2025.
How did Cathay perform in Q2 2025?
Net income rose to $77.5 million in Q2 2025, up 11.5% year over year. Net interest income increased and NIM was reported at 3.27%.
What is the company’s buyback program?
In June 2025 the company authorized a $150 million stock repurchase plan. During Q2 2025 it executed $35.6 million in buybacks, equal to 4.4% of equity.
Is asset quality a concern?
Non-performing assets rose to $199.5 million, a 55% year-over-year increase, and the allowance for loan losses to NPLs declined to 96.12%, indicating thinner loss buffers. The company signaled elevated pressure in construction and CRE but also noted the NPA-to-assets ratio remains below regional averages.
How strong is the bank’s capital?
Capital ratios are reported as robust: Tier 1 risk-based capital 13.35%, CET1 13.6%, and a leverage ratio of 11.09%, providing headroom for dividends and buybacks.
Where does Cathay operate?
The bank has over 60 branches with a strong California presence, branches in New York State and several other U.S. states, plus a branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei.
Key features at a glance
| Feature | Q2 2025 / Latest |
|---|---|
| Quarterly dividend | $0.34 per share; payable Sept 8, 2025; record date Aug 28, 2025 |
| Q2 net income | $77.5 million (up 11.5% YoY) |
| EPS (basic / diluted) | $1.11 / $1.10 |
| Net interest margin | 3.27% |
| Efficiency ratio | 45.34% |
| Buybacks executed in Q2 | $35.6 million (4.4% of equity) |
| Authorized repurchase program | $150 million (June 2025) |
| Non-performing assets | $199.5 million (up 55% YoY); NPA / assets 0.84% |
| ALL to NPL ratio | 96.12% (Q2 2025) |
| Tier 1 / CET1 / Leverage | 13.35% / 13.6% / 11.09% |
| Branch footprint | 60+ branches; strong California presence; Hong Kong branch; rep offices in Beijing, Shanghai, Taipei |
| Form 10-Q filed | August 8, 2025 |
Select market and reference data provided by ICE Data Services and FactSet. Additional charting and metadata provided by 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
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