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- **Record Q4 Profit**: 16.5% YoY net income growth; 18.3% EPS beat. 
- **Credit Improvement**: Nonaccrual loans down 32% QoQ; $12M buyback remaining. 
- **Margin Guidance**: 3.4-3.5% 2026 NIM; 60% deposit beta. 
- **Liquidity Strength**: $10.4B available vs. $9.3B uninsured deposits. 
- **Expense Control**: 4.1% QoQ increase due to bonus accruals. 
- **Lending Competition**: C&I segment most price-sensitive. 
- **Amortization Outlook**: $11M quarterly low-income housing credit. 
- **Capital Position**: 13.27% Tier 1 risk-based capital. 


**【CEO Opening Remarks】**
- Q4 2025 net income: $90.5 million (16.5% YoY increase); EPS: $1.33 (18.3% YoY growth). Full year 2025 net income: $315.1 million (10.1% YoY increase). 
- 2025 share buyback program: $51.9M spent on 1.1M shares; $12M remaining. 
- Total loans grew $42M (3.5-4.5% 2026 growth target); 60% fixed/hybrid rate loans to mitigate rate risk. 
- Nonaccrual loans down 32% QoQ to $112.4M; net charge-offs $5.4M (vs. $15.6M prior quarter). 
- Deposit growth: $373M annualized (4-5% 2026 target); 90% of retail property loans secured by stable assets. 
- Liquidity: $10.4B available vs. $9.3B uninsured deposits. 

**【CFO Financial Commentary】**
- Q4 net interest margin: 3.36% (vs. 3.31% prior quarter); 2026 NIM guidance: 3.4-3.5%. 
- Noninterest income up 32% QoQ to $27.8M (driven by equity securities gains). 
- Noninterest expenses: $92.2M (4.1% QoQ increase due to bonus accruals). 
- 2026 core expense growth: 3.5-4.5%; tax rate: 20.5-21.5%. 
- Capital ratios: Tier 1 leverage 10.91%, Tier 1 risk-based 13.27% (well above regulatory requirements). 

**【Q&A Highlights】**
- **Deposit Strategy**: 60% beta on interest-bearing deposits; Lunar New Year campaign to reprice $4B maturing CDs. 
- **Credit Quality**: 5 special mention loans ($92M) expected to resolve within 12 months; 90% of CRE loans in stable sub-markets. 
-Loan Yield Performance**: 50% from interest recoveries. 
- **Lending Competition**: C&I segment most competitive. 

**【Strategic Initiatives】**
- 2026 loan growth target: 3.5-4.5%; 44% of loans in fixed rates. 
- 2025, 90% of retail loans in stable assets. 
- 2026 NIM guidance. 


Cathay General Bancorp (CATY) Q4 2025 Earnings Call Transcript

- **Stable Earnings Growth**: Q3 net income $77.7M, EPS $1.13, with modest loan and deposit expansion.
- **Credit Resilience**: Despite higher provision ($28.7M), credit metrics remain solid (0.8% nonaccrual loans, 49% CRE LTV).
- **Cost Management**: Expense control ($88.1M) and lower deposit costs (3.16%) support NIM expansion.
- **Strategic Focus**: Emphasizes organic growth, with cautious M&A approach.

**【CEO Summary Section】**
- **Q3 2025 Financial Highlights**: Net income of $77.7 million (0.3% increase vs. Q2), EPS of $1.13 (2.7% increase). Repurchased $50.1 million in shares under a $150 million buyback program.
- **Loan Growth**: Total loans increased $320 million (6.6% annualized), driven by $122M CRE and $123M residential loans. Updated guidance: 3.5%-5% growth for loans and deposits.
- **Credit Portfolio**: 60% of loans are fixed-rate (30% fixed, 30% hybrid). CRE loans have 49% LTV, with 24% in retail properties (90% in strip centers) and 14% in office properties (40% mixed-use).
- **Credit Quality**: Net charge-offs $15.6M (vs. $12.7M Q2). Nonaccrual loans decreased to $165.6M (0.8% of total loans). Provision for credit losses rose to $28.7M due to $9.1M in movie theater loans and CECL model changes.
- **Deposit Growth**: Core deposits increased $508M (10.5% annualized). Uninsured deposits $9.1B, with $7.2B FHLB borrowing capacity covering 100% of uninsured deposits.

**【CFO Financial Commentary】**
- **Net Interest Margin (NIM)**: 3.31% (vs. 3.27% Q2), driven by lower cost of funds. September NIM reached 3.38%.
- **Income Components**: Noninterest income up $5.6M to $21M (mark-to-market gains on equity securities). Noninterest expense decreased $1M to $88.1M due to lower professional and data processing costs.
- **Capital Ratios**: Tier 1 leverage ratio 10.88%, Tier 1 risk-based 13.15%, total risk-based 14.76% (all down slightly vs. Q2).

**【Q&A Key Highlights】**
- **Credit Concerns**: 6 loan relationships ($145M) downgraded to special mention due to covenant issues. Largest was a printing company ($50M) with Q2 weakness but improving momentum.
- **Expense Guidance**: Q3 core expenses stable at $88.1M. Low-income housing tax credit amortization $11.5M (one-time adjustment). Expect no significant changes in Q4.
- **M&A Strategy**: Open to acquisitions if strategically aligned, but focused on organic growth. No immediate M&A plans.
- **Rate Sensitivity**: NIM expected to rise 6-7bps per 25bps rate cut. September deposit cost 3.16% (down from 3.31% Q2).

Cathay General Bancorp (CATY) Q3 2025 Earnings Call Transcript

- **Strong Q2 Growth**: Net income up 11.4%, EPS 12.2%, with $432M loan growth driven by commercial and CRE sectors.
- **Revised Guidance**: Loan growth target raised to 3-4% for 2025, reflecting strong pipeline.
- **Credit Quality**: Elevated charge-offs due to a reserved commercial loan, but nonaccruals remain low at 0.9%.
- **Tax Rate Adjustment**: Updated to 18.5-19% due to California legislation, impacting Q2 by $3.4M.
- **NIM Outlook**: 60% of loans fixed/hybrid; NIM poised to expand with expected Fed rate cuts.
- **Liquidity Strength**: Uninsured deposits fully covered by $7B FHLB and $1.5B Fed borrowings.


**【CEO Summary Section】**
- **Q2 Financial Highlights**: Net income of $77.4 million (+11.4% QoQ), EPS of $1.10 (+12.2% QoQ). Repurchased 804,179 shares under a $150M program.
- **Loan Growth**: Total loans increased $432M (8.9% annualized), driven by $196M in commercial loans and $202M in CRE loans. Revised 2025 loan growth guidance to 3-4% from 1-4%.
- **Loan Portfolio Mix**: 62% fixed/hybrid loans; 24% of CRE loans in retail properties, 14% in office properties. Average LTV for CRE loans at 49%.
- **Credit Quality**: Net charge-offs $12.7M (vs. $2M Q1), primarily due to a $8.3M reserved commercial loan. Nonaccrual loans 0.9% of total loans. Classified loans increased to $432M (vs. $380M Q1) due to a large loan downgrade.
- **Deposit Growth**: Core deposits up $120M, total deposits +$189M. Uninsured deposits $8.7B (43.3% of total). Liquidity sources exceed 100% of uninsured deposits.

**【CFO Financial Commentary】**
- **Net Income Drivers**: Higher net interest income ($4.6M), lower credit provisions ($4.3M), and increased noninterest income ($4.2M). Offset by higher noninterest expenses ($3.5M) and taxes ($1.7M).
- **Net Interest Margin (NIM)**: 3.27% (vs. 3.25% Q1), driven by lower cost of funds. Prepayment penalties added 3bps to NIM (vs. 6bps Q1).
- **Noninterest Income**: $15.4M (+$4.2M QoQ) due to equity securities gains and foreign exchange income. Wealth management income declined $1.2M.
- **Expenses**: $89.1M (+$3.4M QoQ) due to long-term housing amortization and professional fees.
- **Tax Rate Update**: Guidance revised to 18.5-19% (from 19.5-20.5%) due to California tax legislation.
- **Capital Ratios**: Tier 1 leverage ratio 11.07%, stable from Q1. Risk-based capital ratios slightly down due to loan growth.

**【Q&A Key Highlights】**
- **Tax Impact**: $3.4M write-off of deferred tax asset due to lower California apportionment.
- **Allowance for Credit Losses (ACL)**: Refill driven by Moody's economic model (unemployment factor +40bps) and loan growth, offset by reduced specific provisions.
- **Loan Pipeline**: Strong pipeline for H2, but cautious on economic headwinds (tariffs, CPI). Focused on CRE and C&I growth.
- **FHLB Borrowings**: $412M in 2-week borrowings at 4.6%, to be replaced with broker CDs at 4.3%.
- **Classified Loans**: $50M increase due to a single commercial borrower with cash flow issues; 90% secured by real estate.
- **Deposit Beta**: 60% of loans fixed/hybrid; residential mortgage originations at 6.25% (Q2 avg yield 5.79%). NIM expected to expand with Fed rate cuts.
- **Amortization**: $11M per quarter for tax credits.


Cathay General Bancorp (CATY) Q2 2025 Earnings Call Transcript

- **Q1 Results**: Net income $69.5M (-13.3% YoY), driven by tariff-related loan risk (1.4% of portfolio) and slower C&I growth.
- **NIM Outlook**: 3.25-3.35% for 2025, with 4bps benefit per rate cut; 60% fixed/hybrid loans cushion repricing.
- **Risk Management**: $380M classified loans include 1 large C&I credit; 2% allowance allocated to tariff-exposed borrowers.
- **Liquidity**: $7B FHLB borrowing capacity covers 100% of uninsured deposits.
- **Share Buyback**: Awaiting regulatory approval for new program after completing $125M repurchase.


**【CEO Opening Remarks】**
- Q1 2025 net income: $69.5M (-13.3% YoY), EPS: $0.98 (-12.5% YoY). 
- Tariffs impact: 1.4% of total loans (~$154M) at risk; borrowers shifting sourcing to Mexico.
- Loan growth guidance revised to 1-4% (prev 3-4%) due to economic uncertainty.
- Fixed-rate loan structure: 62% of portfolio (30% fixed, 32% hybrid), mitigating rate hike risk.
- CRE loan quality: 49% LTV avg, 90% retail CRE in stable properties, 35% office loans in mixed-use.
- Charge-offs improved: $2M (vs $16.3M prior qtr), NPLs: 0.8%.

**【CFO Financial Details】**
- Net interest margin (NIM): 3.25% (vs 3.07% prior qtr), guided 3.25-3.35% for 2025.
- Noninterest income: $11.2M (-27% YoY) due to $2.9M equity security loss, lower FX income.
- Expenses: $85.7M (+0.6%) driven by $2.2M higher FDIC fees, offset by $1.7M solar tax credit savings.
- Tax rate: 19.8% (vs 7.6% prior qtr) due to reduced solar tax credits.
- Capital: Tier 1 leverage ratio 11.06%, liquidity covers 100% of uninsured deposits.

**【Q&A Key Takeaways】**
1. **Loan Growth Guidance**: 
   - C&I borrowers pausing expansion (3-9 months inventory buildup), 1.4% of loans at tariff risk.
   - Residential mortgage market shifting from seller's to buyer's favor.
2. **NIM Sensitivity**: 
   - 4bps annualized benefit per rate cut; 60% loans fixed/hybrid limit repricing drag.
3. **Tariff Risk Management**: 
   - $380M classified loans include 1 large C&I credit; 2% allowance allocated to tariff-exposed borrowers.
4. **Share Repurchase**: 
   - $125M program completed; awaiting regulatory approval for new buyback.
5. **Expense Trends**: 
   - Salaries up $2.5M from bonus accruals; consulting costs expected to decline.
6. **Deposit Strategy**: 
   - Lunar New Year promotion added $200M at 4.10% rates; reducing high-cost CDs.


Cathay General Bancorp (CATY)-21 Apr 25-2025 Q1 Earnings call transcript

- **Q4 Earnings Beat**: Net income up 18.8% YoY to $80.2M, driven by loan growth and cost control.
- **Loan Growth Target**: 3%-4% in 2025, supported by fixed-rate CRE loans.
- **NIM Stability**: 3.07% in Q4; 2025 guidance of 3.10%-3.20% reflects deposit cost management.
- **Wildfire Impact**: Minimal exposure (<1% of loans) to wildfire-affected areas.
- **Capital Deployment**: $30M/Q1 share buybacks; open to M&A under $1B.

**【CEO Summary Section】**
- **Q4 2024 Financial Highlights**: Net income of $80.2 million (18.8% YoY increase), EPS of $1.12 (19.1% YoY rise). 
- **Loan Growth**: Total loans up $2.4 million annualized, driven by CRE (+$59M) and construction loans (+$30M). 2025 loan growth target: 3%-4%.
- **Deposit Management**: Core deposits +16.7% annualized; 2025 deposit growth target: 3%-4%. Broker deposits declined $449M.
- **Credit Quality**: Net charge-offs at $16.3M (vs. $4.2M in Q3), with $12.2M from a single syndicated loan. Non-accrual loans at 0.83% of total loans.
- **Share Repurchases**: $23.9M in Q4; plans to repurchase ~$30M in Q1 2025.

**【CFO Financial Commentary】**
- **Net Interest Margin (NIM)**: 3.07% in Q4 (vs. 3.04% in Q3), with NIM expected to stabilize between 3.10%-3.20% in 2025.
- **Non-Interest Income**: $15.5M in Q4 (down $4.9M YoY due to equity securities mark-to-market losses).
- **Cost Control**: Non-interest expenses down 12% YoY to $85.2M, driven by lower solar tax credits.
- **Tax Rate**: Q4 effective tax rate of 7.6%; 2025 guidance: 19.5%-20.5%.
- **Capital Strength**: Tier 1 leverage ratio at 10.97%, well above regulatory requirements.

**【Q&A Key Takeaways】**
- **Rate Expectations**: Fed funds futures suggest 1 rate cut in July 2025; bank expects to lower deposit costs over next 2 quarters.
- **Deposit Mix**: $4.2B in maturing CDs (4.6% yield) being renewed at 4%-4.1%; core deposits grew due to seasonal marketing.
- **Credit Risk**: <1% of loans exposed to wildfire-affected areas; no material impact on CRE or business banking portfolios.
- **M&A Strategy**: Open to acquisitions under $1B, but prioritizes accretive deals in niche markets.
- **Tax Credits**: $10M/Q in low-income housing tax credit amortization; no solar tax credits in 2025.
- **CRO Transition**: Incoming CRO will enhance risk management maturity post-2023 regulatory shifts.

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