Cathay General Bancorp confirms dividend and executes $35.6M buybacks

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 quarterly dividend, buys back stock while non-performing assets rise

Cathay General Bancorp declared a cash dividend and carried out a smaller round of stock buybacks in the quarter, while reporting stronger net interest income and higher non‑performing assets. The company has kept its quarterly dividend steady and says capital levels remain strong enough to support both payouts and share repurchases, even as credit stress rises in some loan categories.

Top takeaways

• Dividend confirmed: Cash dividend of $0.34 per common share payable Sept. 8, 2025; record date Aug. 28, 2025. The dividend has been steady at $0.34 for five years.
• Buybacks: A $150 million repurchase program was authorized in June 2025; $35.6 million was executed in Q2 2025 (about 4.4% of equity).
• Profit and margins: Q2 2025 net income was $77.5 million, up 11.5% year‑over‑year. Net interest income (before credit loss provision) rose to $181.2 million. Net interest margin was 3.27%.
• Asset quality weakness: Non‑performing assets rose to $199.5 million, a 55% year‑over‑year increase. The allowance for loan losses relative to non‑performing loans dropped to 96.12% from 112.06% in Q1 2025.
• Capital strength: Tier 1 risk‑based capital ratio stood at 13.35%, CET1 at 13.6%, and leverage ratio at 11.09% as of June 2025.

Dividend and capital return details

The board approved the $0.34 quarterly dividend, maintaining five years of consistent payments. As of August 2025 that dividend equated to an annualized yield of 2.88%. The company reports a payout ratio of 32.6%, lower than the Financial Services sector average of 41.3%, citing a conservative payout approach to protect capital buffers amid rising credit risk.

Management also authorized a $150 million stock repurchase program in June 2025 and executed $35.6 million of buybacks in the second quarter. The buybacks represented about 4.4% of equity and were partly funded by the 11.5% year‑over‑year net income increase. Company messaging frames this mix of dividends and buybacks as a shareholder‑friendly strategy that still preserves balance sheet strength.

Earnings, margin and efficiency

Q2 2025 net income rose to $77.5 million from $66.8 million in Q2 2024. Reported earnings per common share were $1.11 basic and $1.10 diluted, compared with $0.92 a year earlier. Total interest and dividend income fell modestly to $322.9 million from $332.9 million, driven mainly by lower interest on loans receivable. Despite that, net interest income before provisions increased to $181.2 million from $165.3 million. The bank reported a net interest margin of 3.27% and an efficiency ratio of 45.34%, both positioned above many regional peers.

Asset quality — rising NPAs and shifting loan exposure

Non‑performing assets rose sharply to $199.5 million, a 55% increase from the prior year. Non‑accrual loans were a notable contributor, up 12.7% in the period. The allowance for loan losses to non‑performing loans ratio declined to 96.12% from 112.06% in the prior quarter, signaling smaller buffers against potential defaults. Company disclosures link the NPA rise to a small number of large commercial defaults and a downgraded loan relationship.

The bank reduced construction loan exposure (down 9.5% in Q2 2025) and is shifting originations toward lower‑risk commercial real estate, residential mortgages, affordable housing and renewable energy projects. The non‑performing assets to total assets ratio was reported at 0.84%, which the company notes is below regional bank averages.

Capital posture and regulatory context

Capital ratios remain above commonly observed thresholds, with Tier 1 risk‑based ratio at 13.35% and CET1 at 13.6% as of June 2025. The bank reported an 11.09% leverage ratio. Management indicates these buffers give flexibility to return capital while managing credit stress. The Form 10‑Q filed on Aug. 8, 2025 highlights the allowance for loan losses as the most significant estimate subject to change and says it will monitor economic conditions that could affect loan performance.

Strategy and outlook

The company describes its model as an income‑growth hybrid, pairing steady dividends with buybacks supported by solid capital and rising net interest income. Analysts have noted potential upside (consensus projection of roughly 26.42% upside for the stock in 2025), pointing to the bank’s ability to reduce credit loss provisions and hold asset quality if economic trends remain stable. The company also emphasizes disciplined cost control and pricing power as drivers of its efficiency and margin outperformance.

Footprint and background

The bank operates more than 60 branches nationwide: 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. It maintains an overseas branch in Hong Kong and representative offices in Beijing, Shanghai and Taipei. The firm was founded in 1962.

What to watch next

• Trends in non‑performing assets and the allowance for loan losses.
• Movement in construction and CRE delinquencies, and redeployment into lower‑risk loan types.
• Future pace of share repurchases under the $150 million authorization.
• Any revisions to dividend policy if credit conditions materially deteriorate.

Company contact and filings: Form 10‑Q filed Aug. 8, 2025; press contact listed as Heng W. Chen, (626) 279‑3652. Company web pages: www.cathaygeneralbancorp.com and www.cathaybank.com. Select market data referenced from ICE Data Services and FactSet.

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FAQ

Key features at a glance

Feature	Q2 2025 Value	Notes
Quarterly dividend	$0.34 per share	Payable Sept. 8, 2025; record date Aug. 28, 2025
Net income (Q2)	$77.5 million	Up 11.5% year‑over‑year
Buybacks	$35.6 million executed in Q2	Part of $150 million authorization
Net interest margin (NIM)	3.27%	Reported as above regional peers
Efficiency ratio	45.34%	Outperforms regional bank averages
Non‑performing assets (NPA)	$199.5 million	55% increase year‑over‑year
Allowance to NPLs	96.12%	Lower than 112.06% in Q1 2025
Tier 1 capital ratio	13.35%	Above common safety thresholds
Branches	60+ nationwide	Strong California footprint; international presence in HK and Asia offices

For more detailed figures and footnotes, refer to the company’s Form 10‑Q filed August 8, 2025 and the company websites listed above. Press contact: Heng W. Chen, (626) 279‑3652.

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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
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• 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
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