CATHAY GENERAL BANCORP recently released its 10-Q report. The company is the holding company for Cathay Bank, which provides commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. Its business includes deposit accounts, commercial and consumer lending, trade finance, foreign exchange services, and other customary banking services, and it is headquartered in Los Angeles.
In Item 2, Management’s Discussion and Analysis, Cathay said net interest margin widened to 3.43% in the first quarter of 2026 from 3.25% a year earlier. Net interest income before provision for credit losses rose $17.6 million, or 10.0%, to $194.2 million, driven mainly by lower interest expense on deposits. The yield on average interest-earning assets fell to 5.70% from 5.89%, while the cost of funds on average interest-bearing liabilities declined to 2.99% from 3.46%; the net interest spread improved to 2.71% from 2.43%.
Net income increased to $86.9 million from $69.5 million, and diluted earnings per share rose to $1.29 from $0.98. Return on average assets improved to 1.47% from 1.22%, return on average total stockholders’ equity increased to 11.88% from 9.84%, and the efficiency ratio improved to 40.35% from 45.60%.
Average total interest-earning assets increased to $22.98 billion from $22.01 billion a year earlier. Average total loans rose to $20.16 billion from $19.33 billion, while average deposits with banks fell to $1.13 billion from $1.20 billion. Average interest-bearing deposits increased to $17.21 billion from $16.40 billion, but the average cost of those deposits dropped to 2.96% from 3.43%.
Provision for credit losses was $18.2 million, up from $15.5 million in the prior-year quarter. The allowance for loan losses increased to $208.9 million, or 1.03% of total loans, from $195.9 million, or 0.97% at December 31, 2025. Net charge-offs were $2.1 million, compared with $2.0 million a year earlier.
Non-interest income climbed to $20.7 million from $11.2 million. The increase was driven by a $17.3 million equity securities gain in the quarter, compared with a $4.2 million loss in the same period last year, and by $1.1 million more in derivative fees. That was partly offset by a $15.7 million impairment loss on available-for-sale securities tied to the planned sale of certain impaired securities.
Non-interest expense increased to $86.7 million from $85.7 million. Salaries and employee benefits rose $3.1 million, and other real estate owned expense increased $1.3 million, while amortization expense on low-income housing and alternative energy partnerships fell $2.3 million and FDIC and state assessments declined by $1.0 million.
Total assets were $24.05 billion at March 31, 2026, down $180.9 million from $24.23 billion at December 31, 2025. Available-for-sale securities were $1.68 billion, up from $1.66 billion, and represented 7.0% of total assets. More than 90% of that portfolio was invested in U.S. Treasuries and agency mortgage-backed securities.
Gross loans held for investment were $20.17 billion, up $27.4 million from year-end. Commercial loans increased $98.0 million to $3.28 billion, commercial real estate loans rose $24.0 million to $10.59 billion, and equity lines increased $6.7 million to $289.0 million. Those gains were offset by a $53.6 million decline in residential mortgage loans to $6.01 billion and a $48.5 million drop in real estate construction loans to $289.0 million.
Deposits fell $218.5 million, or 1.0%, to $20.68 billion from December 31, 2025. As a result of these announcements, the company's shares have moved 0.81% on the market, and are now trading at a price of $57.45. If you want to know more, read the company's complete 10-Q report here.
