third quarter 2026
Filed Oct 21, 2026Cathay General Bancorp reported third-quarter net income of $95.2 million, or $1.43 per diluted share, as net interest income, loans and deposits increased and net interest margin expanded.
Net income increased to $95.2 million, net interest income before provision for credit losses reached a record $211.9 million, net interest margin expanded to 3.52%, and loans and deposits increased. Higher credit provision, borrower-specific charge-offs, and elevated non-interest expense tempered the quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $95.2M | $3.0 million, or 3.3% | – |
| Basic earnings per common shareGAAP | $1.43 | – | – |
| Diluted earnings per common shareGAAP | $1.43 per share | – | – |
| Net interest income before provision for credit lossesGAAP | $211.9M | $11.0 million, or 5.5% | – |
| Provision for credit lossesGAAP | $28.6M | – | – |
| Net interest income after provision for credit lossesGAAP | $183.3M | – | – |
| Non-interest incomeGAAP | $42.8M | $21.4 million, or 99.8% | – |
| Non-interest expenseGAAP | $103.4M | $11.1 million, or 12.0% | – |
| Income before income tax expenseGAAP | $122.7M | – | – |
| Income tax expenseGAAP | $27.5M | – | – |
| Effective tax rateGAAP | 22.42% | – | – |
| Net interest marginGAAP | 3.52% | four basis points | – |
| Net interest spreadGAAP | 2.81% | – | – |
| Yield on average interest-earning assetsGAAP | 5.74% | – | – |
| Cost of funds on average interest-bearing liabilitiesGAAP | 2.93% | – | – |
| Cost of average interest-bearing depositsGAAP | 2.91% | – | – |
| Return on average assetsGAAP | 1.51% | – | – |
| Return on average total stockholders' equityGAAP | 12.28% | – | – |
| Efficiency ratioGAAP | 40.60% | – | – |
| Adjusted total revenuenon-GAAP | $230.5M | – | – |
| Adjusted non-interest incomenon-GAAP | $18.67M | – | – |
| Adjusted non-interest expensenon-GAAP | $82.87M | – | – |
| Adjusted efficiency rationon-GAAP | 35.9% | – | – |
| Return on average tangible common equitynon-GAAP | 14.03% | – | – |
| Gross loans, excluding loans held for saleGAAP | $21.2B | $574.5 million, or 2.79% | – |
| Commercial loansGAAP | $3.95B | $420.4 million, or 11.9% | – |
| Construction loansGAAP | $265.9M | $17.5 million, or 7.0% | – |
| Commercial real estate loansGAAP | $10.84B | $65.5 million, or 0.6% | – |
| Residential mortgage loansGAAP | $5.91B | $73.3 million, or 1.3% | – |
| Equity linesGAAP | $227.8M | decrease of $6.4 million, or 2.7% | – |
| Total depositsGAAP | $21.83B | $773.3 million, or 3.67% | – |
| Non-interest-bearing demand depositsGAAP | $3.95B | – | – |
| Money market depositsGAAP | $4.28B | – | – |
| Time depositsGAAP | $9.45B | – | – |
| Net charge-offsGAAP | $25.3 million, or 0.48% of average loans on an annualized basis | – | – |
| Total non-performing assetsGAAP | $119.2M | decreased $26.2 million, or 18.0% | (40)% |
| Non-performing assets to total assetsGAAP | 0.47% | – | – |
| Allowance for loan lossesGAAP | $224.2M | $5.3 million | 20% |
| Allowance for loan losses to gross loans, at period-endGAAP | 1.06% | – | – |
| Allowance for loan losses to non-performing loans, at period-endGAAP | 242.97% | – | – |
| Total assetsGAAP | $25.57B | – | – |
| Cash and due from banksGAAP | $131.0M | – | – |
| Short-term investments and interest bearing depositsGAAP | $1.58B | – | – |
| Stockholders' equityGAAP | $3.06B | – | – |
| Tangible book value per sharenon-GAAP | $40.54 | – | – |
| Common Equity Tier 1 capital ratioGAAP | 13.51% | – | – |
| Tier 1 risk-based capital ratioGAAP | 13.51% | – | – |
| Total risk-based capital ratioGAAP | 15.00% | – | – |
| Tier 1 leverage capital ratioGAAP | 11.06% | – | – |
| Nine months ended September 30, 2026 net incomeGAAP | $274.3M | – | $49.7 million, or 22.1% |
| Nine months ended September 30, 2026 diluted earnings per shareGAAP | $4.09 per share | – | – |
| Nine months ended September 30, 2026 net interest marginGAAP | 3.48% | – | – |
| Nine months ended September 30, 2026 efficiency ratioGAAP | 40.82% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Cash dividends paid per common share: $0.38.
- The Company completed the redemption of $54.1 million of Trust Preferred Securities (“TruPS”), representing approximately 45% of the Company's $119.1 million of outstanding TruPS.
- Long-term debt was $65,011 as of September 30, 2026, compared to $119,136 as of June 30, 2026.
- Number of common shares outstanding was 66,083,728 as of September 30, 2026, compared to 66,825,367 as of June 30, 2026.
What drove it
- Net interest income before provision for credit losses increased primarily because of an increase in interest income from loans and deposits with banks, partially offset by an increase in deposit interest expense.
- The increase in the yield on average interest-earning assets resulted mainly from higher interest rates on loans.
- The increase in the cost of funds on average interest-bearing liabilities resulted mainly from higher interest rates on deposits, driven by the higher repricing of maturing time deposits.
- Loan growth was primarily due to increases in commercial loans, residential real estate loans, commercial real estate loans and construction loans.
- Non-interest income increased primarily due to a $24.4 million increase in net gains from equity securities and a $3.1 million benefit from the redemption of TruPS, partially offset by a $4.5 million increase in losses related to investment securities repositioning activities and a $1.3 million decrease in wealth management fees.
Concerns
- The provision for credit losses increased to $28.6 million from $11.2 million in the second quarter of 2026, primarily reflecting strong loan growth and updated loss assumptions incorporating recent charge-off experience.
- Net charge-offs of $25.3 million, or 0.48% of average loans on an annualized basis, were concentrated in three borrower-specific credits, including one construction loan and two movie theater CRE loans acquired from Far East National Bank.
- Non-interest expense increased $11.1 million, or 12.0%, primarily due to an $8.0 million charitable contribution, a $5.4 million contract termination fee and a $1.5 million increase in salaries and employee benefits.
- Reported non-interest income included net gains from equity securities of $36,053 and net loss on investment securities of $(15,084).
- Total risk-based capital ratio declined to 15.00% from 15.47%, and the Tier 1 leverage capital ratio declined to 11.06% from 11.28%.
What to watch
- The durability of loan growth after gross loans increased $574.5 million, or 2.79%, sequentially.
- Deposit growth and the repricing of maturing time deposits following the increase in the cost of average interest-bearing deposits to 2.91%.
- Net interest margin after expansion to 3.52% from 3.48%.
- Credit performance in construction and movie theater CRE credits following $25.3 million of net charge-offs.
- Whether nonperforming assets remain lower after declining to $119.2 million and 0.47% of total assets.
- The impact of charitable contribution and contract termination costs on non-interest expense.
Balance sheet and cash flow
- Total assets were $25,572,501 as of September 30, 2026.
- Cash and due from banks were $131,044 as of September 30, 2026.
- Short-term investments and interest bearing deposits were $1,576,961 as of September 30, 2026.
- Loans, net were $20,956,148 as of September 30, 2026.
- Total deposits were $21,834,988 as of September 30, 2026.
- Advances from the Federal Home Loan Bank were $200,000 as of September 30, 2026.
- Long-term debt was $65,011 as of September 30, 2026.
- Stockholders' equity was $3,056,745 as of September 30, 2026.
- No operating cash flow or free cash flow was reported.
Analysis
Cathay General Bancorp reported third-quarter net income of $95.2 million, compared with $92.2 million in the second quarter of 2026 and $77.7 million in the third quarter of 2025. Diluted earnings per share were $1.43, compared with $1.37 per share in the preceding quarter and $1.13 in the prior-year quarter. Profitability was supported by record net interest income before provision for credit losses of $211.9 million, up $11.0 million, or 5.5%, sequentially. The nine-month result was net income of $274.3 million, an increase of $49.7 million, or 22.1%, from the same period a year ago.
Core balance-sheet growth was strong. Gross loans, excluding loans held for sale, increased $574.5 million, or 2.79%, sequentially to $21.20 billion, while total deposits increased $773.3 million, or 3.67%, to $21.83 billion. Commercial loans increased $420.4 million, or 11.9%, residential real estate loans increased $73.3 million, or 1.3%, commercial real estate loans increased $65.5 million, or 0.6%, and construction loans increased $17.5 million, or 7.0%. The loan and deposit expansion accompanied a four-basis-point sequential increase in net interest margin to 3.52%, as the yield on average interest-earning assets rose to 5.74% while the cost of funds rose to 2.93%.
Credit results were mixed. Total non-performing assets declined $26.2 million, or 18.0%, to $119.2 million, and the ratio of non-performing assets to total assets improved to 0.47% from 0.59%. The allowance for loan losses increased to $224.2 million, or 1.06% of gross loans, while allowance coverage of non-performing loans increased to 242.97%. However, the provision for credit losses was $28.6 million compared with $11.2 million in the second quarter, and net charge-offs were $25.3 million, or 0.48% of average loans on an annualized basis, concentrated in three borrower-specific credits.
Reported fee income and expenses included notable discrete items. Non-interest income rose to $42.8 million, primarily due to a $24.4 million increase in net gains from equity securities and a $3.1 million TruPS redemption benefit, partly offset by a $4.5 million increase in losses related to investment securities repositioning activities. Non-interest expense increased to $103.4 million, reflecting an $8.0 million charitable contribution and a $5.4 million contract termination fee. On the company's non-GAAP basis, adjusted total revenue was $230,545, adjusted non-interest expense was $82,866, and adjusted efficiency ratio was 35.9%.
Capital remained above applicable minimum regulatory requirements, although reported capital ratios declined sequentially. The Company redeemed $54.1 million of TruPS, and long-term debt was $65,011 at September 30, 2026, compared with $119,136 at June 30, 2026. Common Equity Tier 1 capital ratio was 13.51%, total risk-based capital ratio was 15.00%, and Tier 1 leverage capital ratio was 11.06%. The release did not provide forward financial guidance.
Management, verbatim
Our third quarter results reflected strong performance across the franchise. Net interest income grew, loans and deposits increased meaningfully, and net interest margin continued to expand,
Chang M. Liu, President and Chief Executive Officer of the Company
We remain focused on disciplined execution and prudent balance sheet management to build on this progress and continue delivering long-term value for our shareholders.
Chang M. Liu, President and Chief Executive Officer of the Company
Not in the filing
stated, not guessed- Forward revenue, margin, expense, tax-rate, earnings-per-share, loan-growth, deposit-growth, capital or credit guidance
- Previous-release outlook for comparison
- GAAP total revenue
- Gross margin
- Operating income
- Operating cash flow
- Free cash flow
- Share repurchases or a repurchase authorization
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.