Cathay General Bancorp reconfirms dividend while executing share repurchases amid rising non-performing assets.
Los Angeles, California, USA, August 16, 2025
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.
Quick take: The company declared a cash dividend of $0.34 per common share payable September 8, 2025, while reporting $35.6 million in stock repurchases for Q2 2025. Those shareholder returns come amid a notable rise in problem assets, with non-performing assets climbing 55% year over year to $199.5 million. At the same time, capital ratios remain strong, with a CET1 ratio of 13.6% and a Tier 1 risk-based capital ratio of 13.35%, giving management room to pursue both dividends and buybacks.
Net income for Q2 2025 came in at $77.5 million, an 11.5% increase from Q2 2024. Earnings per share were reported as $1.11 basic and $1.10 diluted, up from $0.92 in the prior-year quarter. Total interest and dividend income fell slightly to $322.9 million from $332.9 million in Q2 2024, driven mainly by lower loan interest income. Net interest income before provision for credit losses rose to $181.2 million from $165.3 million a year earlier.
The reported net interest margin stood at 3.27%, a metric the company highlighted as outperforming many regional peers. Operating efficiency also held up, with an efficiency ratio of 45.34%, again noted as favorable versus typical regional bank averages. The board authorized a $150 million repurchase program in June 2025; $35.6 million was executed in Q2, equal to roughly 4.4% of equity. Management attributed part of the buyback funding to the year-over-year net income gain and described the moves as consistent with a shareholder-friendly capital allocation approach combining dividends and repurchases.
Problem assets climbed sharply: non-performing assets rose to $199.5 million, a 55% increase year over year. Non-accrual loans were up 12.7%. The allowance for loan losses to non-performing loans ratio fell to 96.12% in Q2 from 112.06% in Q1, indicating smaller default buffers after recent write-downs and downgraded relationships. Management flagged that the allowance movement reduces protection particularly in construction and commercial real estate (CRE) exposures. Construction lending declined 9.5% in the quarter as the company reduced exposure to more volatile loan segments.
Company statements describe a deliberate reallocation of lending toward lower-risk CRE categories, residential mortgages, affordable housing and renewable energy projects. The firm characterized its posture as an income-growth hybrid, pairing consistent quarterly dividends with targeted buybacks while preserving capital strength. The Form 10-Q filed on August 8, 2025, identifies the allowance for loan losses as the most significant estimate sensitive to changes in economic conditions and loan performance.
Capital levels remain a central theme: leverage ratio was reported at 11.09%, with management noting ratios above key supervisory thresholds and sufficient room for return-of-capital actions. The firm operates a U.S. branch network of more than 60 locations, including 24 branches in Southern California, 17 in Northern California and 9 in New York State, with additional branches in multiple states and a branch in Hong Kong plus representative offices in Beijing, Shanghai and Taipei. The company traces its origins to 1962.
The bank reported a 2024 net income decline of 19.2% on an annual basis but has shown sequential improvement into late 2024 and through Q2 2025. Analysts cited in market references project a roughly 26.42% upside for the stock in 2025, driven in part by expectations the company can reduce credit loss provisioning and sustain asset quality. Management points to disciplined cost control and pricing power as contributors to the bank’s efficiency and margin performance.
The company highlighted concentration in California and its focus on Asian-American markets as both a strength and a regional vulnerability. For further investor or media inquiries, the listed press contact is Heng W. Chen at (626) 279-3652. Company websites include www.cathaygeneralbancorp.com and www.cathaybank.com. Form 10-Q information and more detailed financial tables are available in the SEC filing dated August 8, 2025.
The board declared a cash dividend of $0.34 per common share payable September 8, 2025, to shareholders of record at the close of business on August 28, 2025.
Stock repurchases totaled $35.6 million in Q2 2025 under a $150 million authorization approved in June 2025.
Non-performing assets rose 55% year over year to $199.5 million, and the allowance for loan losses to non-performing loans ratio declined to 96.12% from 112.06% in Q1, which management flagged as a reduction in default buffers, particularly in construction and CRE.
Capital ratios remain above common supervisory benchmarks: CET1 at 13.6%, Tier 1 at 13.35% and leverage at 11.09% as of June 2025.
The company is reallocating lending toward lower-risk CRE, residential mortgages, affordable housing and renewable energy projects while reducing exposure to volatile construction loans.
| Feature | Q2 2025 / Note |
|---|---|
| Dividend | $0.34 per share; payable Sept 8, 2025; annualized yield ~2.88% |
| Net income | $77.5 million (up 11.5% YoY) |
| Buybacks | $35.6 million executed in Q2; $150 million authorization |
| Non-performing assets | $199.5 million (55% YoY increase); NPA-to-assets 0.84% |
| Allowance coverage | ALL-to-NPL 96.12% (down from 112.06% in Q1) |
| Capital | CET1 13.6%; Tier 1 13.35%; Leverage 11.09% |
| Margin & efficiency | NIM 3.27%; Efficiency ratio 45.34% |
| Footprint | 60+ branches; strong California presence; branch in Hong Kong and offices in Beijing, Shanghai, Taipei |
Data and market references include select market data provided by ICE Data Services and select reference data provided by FactSet. Market charts and platform references include copyright notices for FactSet and TradingView. For detailed filings and tables consult the company’s Form 10-Q filed August 8, 2025. Press contact: Heng W. Chen, (626) 279-3652.
Watertown, MA, August 16, 2025 News Summary Tishman Speyer closed a $25.2 million mezzanine loan to…
Fort Lauderdale, Florida, August 16, 2025 News Summary Moss has started construction on The Dunes Fort…
California (Eaton and Palisades fire zones), August 16, 2025 News Summary The governor issued an executive…
Irvine, Orange County, California, August 16, 2025 News Summary CBRE has bolstered its Orange County presence…
Port of Long Beach, California, August 16, 2025 News Summary Jacobs has been awarded the program-level…
North America, August 16, 2025 News Summary A survey of 160 verified North American dealerships finds…