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Cathay General Bancorp is rated BUY, with shares up 25% YTD and trading at an attractive valuation relative to sector-leading ROE. CATY's CET1 ratio of 13.5% and low non-performing assets underscore strong credit quality and capital strength. 42% of CATY's loan book will reprice over the next 12 months, supporting NIM and earnings in a higher-rate environment.

Regional Bank Buybacks: 5 Institutions Making Big MovesCathay General Bancorp NASDAQ: CATY reported third-quarter 2026 net income of $95.2 million, or $1.43 per diluted share, as record net interest income, loan growth and margin expansion helped offset higher credit costs and operating expenses.

President and Chief Executive Officer Chang Liu said the company’s operating performance during the quarter was supported by “active balance sheet management, loan growth, and asset repricing.” Net interest income rose $11 million, or 5.5% from the prior quarter, to a record $211.9 million. Net interest margin expanded by 4 basis points to 3.52%.

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Pre-provision net revenue totaled $151.3 million, up 16.4% on a linked-quarter basis. Excluding notable items, adjusted pre-provision net revenue was $140.6 million, an increase of $11.7 million, or 9.1%.

Loan and Deposit Growth Supports Balance Sheet Period-end loans, net of fees, reached $21.2 billion, increasing approximately $573 million, or 2.8%, from the prior quarter. Executive Vice President and Chief Financial Officer Al Wang said growth was particularly strong in commercial and industrial lending.

Period-end deposits rose $773 million, or 3.7%, to $21.8 billion. The increase was led by non-interest-bearing demand deposits and money market balances, helping improve the company’s net loan-to-deposit ratio to approximately 96%.

Average loans grew at an annualized rate of 5.9% to $20.5 billion, while average deposits increased at an annualized rate of 13.8% to $21.4 billion. The company’s commercial real estate concentration ratio stood at 283%, below both regulatory thresholds and its internal limits.

Management raised its full-year loan growth outlook to 5% to 6%, from a previous range of 3.5% to 4.5%. Its deposit growth outlook was raised to 4% to 5%, compared with an earlier forecast of 3% to 4%.

Liu said C&I lending had been the primary driver of recent growth, with activity spanning manufacturing, distribution, service providers and food wholesalers. He said customer borrowing in C&I is generally need-based, while higher rates may have a greater effect on commercial real estate demand, particularly property purchases.

Margin Expands, Though Deposit Costs Remain a Pressure Point Loan yields increased 5 basis points during the quarter to 6.02%, aided by higher rates, interest recoveries and prepayment penalties. Total deposit costs rose 4 basis points to 2.43%, while interest-bearing deposit costs increased 5 basis points to 2.91%.

Wang said the company was not ready to call a peak in net interest margin, pointing to $8.9 billion of loans expected to reprice over the next year, as well as cash and investment portfolio repricing opportunities. He added that the outlook includes a 25-basis-point rate increase in December.

However, Wang said funding costs could remain under pressure amid deposit competition. About $3.4 billion of certificates of deposit were set to roll off during the fourth quarter at an average rate of 3.46%.

Management maintained its full-year net interest margin outlook of 3.40% to 3.50%. Wang said that excluding loan prepayments and recoveries, the company’s September margin was about 3.53%. Interest recoveries totaled roughly $3.7 million to $3.8 million during the quarter and added about 6 basis points to margin, he said.

Securities Repositioning and Notable Items Affect Results During the quarter, Cathay sold approximately $89 million of agency mortgage-backed securities yielding 1.83% and reinvested in agency MBS yielding 5.65%. The newly acquired securities have similar average lives and shorter duration, according to Wang.

The transaction generated a $15.1 million loss but is expected to add approximately $2.9 million to annual net interest income. Year to date, the company has repositioned about $460 million of securities in three transactions, which management expects will add $11.4 million in annual net interest income with an aggregate earn-back period of about 3.6 years.

Non-interest income increased to $42.8 million, primarily reflecting a $36.1 million unrealized valuation gain on equity securities and a $3.1 million benefit from the redemption of trust preferred securities. Adjusted non-interest income was $18.8 million, slightly lower than the prior quarter due mainly to reduced wealth management fees. Wang said the decrease reflected transaction-based volume and that the company expects wealth management revenue to rise in the next quarter.

Non-interest expense rose to $103.4 million from $92.3 million in the second quarter. The increase included an $8 million commitment to the Cathay Bank Foundation and $5.4 million in contract termination costs. Wang characterized the contract cost as a one-time charge related to replacing a vendor platform for one line of business, with the new platform expected to support future revenue growth.

Excluding notable items, adjusted non-interest expense was $82.9 million, up 1.2% from the previous quarter. The reported efficiency ratio improved to 40.6%, while the adjusted efficiency ratio improved to 35.9%.

Credit Costs Concentrated in Previously Identified Loans The provision for credit losses was $28.6 million, reflecting loan growth and updated loss assumptions based on recent charge-off experience. Net charge-offs were $25.3 million, or 49 basis points annualized.

Management said the charge-offs were concentrated in three previously identified credits: two movie theater commercial real estate loans acquired through the Far East National Bank acquisition, totaling about $18 million, and a Southern California multifamily construction loan with nearly $9 million of exposure. Liu said the construction loan experienced water damage, mold contamination and resulting structural issues.

The allowance for loan losses increased approximately $5 million to $224 million, while the allowance ratio remained at 1.06% of gross loans. Non-performing assets declined approximately 18%, while criticized and classified balances also decreased, largely because of the charge-offs. Management said broader portfolio trends remained stable.

The company repurchased about 801,000 shares for $50.3 million during the quarter, at an average price of $62.81 per share. It ended the period with a common equity tier 1 ratio of 13.51% and a total risk-based capital ratio of 15%.

About Cathay General Bancorp (NASDAQ:CATY)Cathay General Bancorp is a bank holding company headquartered in Los Angeles, California. Its principal subsidiary, Cathay Bank, provides banking and financial services to individuals, families, businesses and institutions, with a particular focus on serving the Chinese American and broader communities in the markets where it operates.

Cathay Bank offers deposit accounts, residential and commercial real estate loans, commercial and industrial lending, small-business financing, consumer loans, treasury management and other traditional banking services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Cathay General Bancorp (CATY) Q3 2026 Earnings Call October 21, 2026 6:00 PM EDT

Company Participants

Georgia Lo - Assistant Secretary & Investor Relations
Chang Liu - CEO, President & Director
Albert Wang - Executive VP, CFO & Treasurer

Conference Call Participants

David Chiaverini - Jefferies LLC, Research Division
Gary Tenner - D.A. Davidson & Co., Research Division
Andrew Terrell - Stephens Inc., Research Division
Matthew Clark - Piper Sandler & Co., Research Division
Kelly Motta - Keefe, Bruyette, & Woods, Inc., Research Division
Andrew Liesch - StoneX Group Inc.

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to Cathay General Bancorp's Third Quarter 2026 Earnings Conference Call. My name is Ashia, and I will be your coordinator for today. [Operator Instructions] Today's call is being recorded and will be available for replay at www.cathaygeneralbancorp.com.

Now I would like to turn the call over to Georgia Lo, Investor Relations of Cathay General Bancorp. Please go ahead.

Georgia Lo
Assistant Secretary & Investor Relations

Thank you, Ashia, and good afternoon. Here to discuss the financial results today are Mr. Chang Liu, our President and Chief Executive Officer; and Al Wang, our Executive Vice President and Chief Financial Officer.

Before we begin, we wish to remind you that speakers on this call may make forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 concerning future results and events, and that these statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are further described in the company's annual report on Form 10-K for the year ended December 31, 2025, at Item 1A in particular, and in other reports and filings with the Securities and Exchange Commission from time to time. As such, we caution you not to place undue reliance on such forward-looking statements. Any forward-looking

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Los Angeles, Cathay General (CATY - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 22.63%. The holding company for Cathay Bank is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.56%. This compares to the Banks - West industry's yield of 2.7% and the S&P 500's yield of 1.38%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for CATY for this fiscal year. The Zacks Consensus Estimate for 2026 is $5.54 per share, with earnings expected to increase 22.03% from the year ago period.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CATY is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Cathay General (CATY - Free Report) , which belongs to the Zacks Banks - West industry, could be a great candidate to consider.

This holding company for Cathay Bank has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 5.71%.

For the last reported quarter, Cathay came out with earnings of $1.37 per share versus the Zacks Consensus Estimate of $1.33 per share, representing a surprise of 3.01%. For the previous quarter, the company was expected to post earnings of $1.19 per share and it actually produced earnings of $1.29 per share, delivering a surprise of 8.40%.

Price and EPS Surprise

Thanks in part to this history, there has been a favorable change in earnings estimates for Cathay lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Cathay currently has an Earnings ESP of +2.54%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on October 21, 2026.

With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Cathay General (CATY - Free Report) is headquartered in Los Angeles, and is in the Finance sector. The stock has seen a price change of 26.99% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.47%. In comparison, the Banks - West industry's yield is 2.66%, while the S&P 500's yield is 1.42%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for CATY for this fiscal year. The Zacks Consensus Estimate for 2026 is $5.54 per share, with earnings expected to increase 22.03% from the year ago period.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CATY is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Jupiter Topco LLC acquired a new position in shares of Cathay General Bancorp (NASDAQ:CATY – Free Report) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm acquired 28,326 shares of the bank’s stock, valued at approximately $1,757,000.

Several other hedge funds and other institutional investors have also recently added to or reduced their stakes in the stock. ProShare Advisors LLC grew its holdings in shares of Cathay General Bancorp by 1.5% during the 4th quarter. ProShare Advisors LLC now owns 12,925 shares of the bank’s stock worth $625,000 after purchasing an additional 196 shares in the last quarter. GAMMA Investing LLC increased its position in shares of Cathay General Bancorp by 6.2% in the second quarter. GAMMA Investing LLC now owns 3,583 shares of the bank’s stock worth $222,000 after purchasing an additional 210 shares during the period. NewEdge Advisors LLC raised its stake in Cathay General Bancorp by 3.0% in the first quarter. NewEdge Advisors LLC now owns 8,068 shares of the bank’s stock valued at $402,000 after purchasing an additional 237 shares in the last quarter. CANADA LIFE ASSURANCE Co lifted its position in Cathay General Bancorp by 0.5% during the fourth quarter. CANADA LIFE ASSURANCE Co now owns 57,646 shares of the bank’s stock worth $2,788,000 after purchasing an additional 301 shares during the period. Finally, Illinois Municipal Retirement Fund lifted its position in Cathay General Bancorp by 1.2% during the first quarter. Illinois Municipal Retirement Fund now owns 36,078 shares of the bank’s stock worth $1,799,000 after purchasing an additional 424 shares during the period. 75.01% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In A number of brokerages have issued reports on CATY. Weiss Ratings reiterated a “buy (b)” rating on shares of Cathay General Bancorp in a research note on Monday, July 6th. Stephens upped their price target on shares of Cathay General Bancorp from $56.00 to $63.00 and gave the stock an “equal weight” rating in a report on Thursday, July 23rd. Piper Sandler increased their price target on shares of Cathay General Bancorp from $49.50 to $53.00 and gave the stock an “underweight” rating in a research report on Monday, July 27th. Keefe, Bruyette & Woods lifted their price objective on shares of Cathay General Bancorp from $64.00 to $67.00 and gave the company a “market perform” rating in a research note on Thursday, July 23rd. Finally, Zacks Research downgraded shares of Cathay General Bancorp from a “strong-buy” rating to a “hold” rating in a research report on Wednesday, August 12th. One equities research analyst has rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and an average price target of $62.25.

View Our Latest Stock Analysis on CATY Insiders Place Their Bets In related news, EVP Thomas M. Lo sold 1,600 shares of the business’s stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $62.47, for a total transaction of $99,952.00. Following the sale, the executive vice president owned 2,362 shares in the company, valued at $147,554.14. The trade was a 40.38% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Richard Sun sold 20,000 shares of the company’s stock in a transaction dated Wednesday, July 29th. The stock was sold at an average price of $63.31, for a total value of $1,266,200.00. Following the completion of the transaction, the director directly owned 7,315 shares of the company’s stock, valued at approximately $463,112.65. The trade was a 73.22% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 31,600 shares of company stock valued at $1,996,362 over the last quarter. 4.53% of the stock is owned by corporate insiders.

Cathay General Bancorp Trading Up 0.9% CATY opened at $62.58 on Friday. The company has a market cap of $4.17 billion, a P/E ratio of 12.22 and a beta of 0.85. The company has a current ratio of 1.04, a quick ratio of 1.04 and a debt-to-equity ratio of 0.04. The company’s 50 day moving average is $62.65 and its 200-day moving average is $57.12. Cathay General Bancorp has a 1-year low of $44.57 and a 1-year high of $65.25.

Cathay General Bancorp (NASDAQ:CATY – Get Free Report) last released its quarterly earnings data on Wednesday, July 22nd. The bank reported $1.37 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.35 by $0.02. Cathay General Bancorp had a net margin of 24.66% and a return on equity of 11.71%. The business had revenue of $221.20 million during the quarter, compared to analysts’ expectations of $218.28 million. During the same period in the prior year, the company earned $1.10 EPS. The firm’s quarterly revenue was up 13.1% compared to the same quarter last year. Equities research analysts predict that Cathay General Bancorp will post 5.48 earnings per share for the current fiscal year.

Cathay General Bancorp Dividend Announcement The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 8th. Stockholders of record on Friday, August 28th will be issued a dividend of $0.38 per share. The ex-dividend date is Friday, August 28th. This represents a $1.52 annualized dividend and a dividend yield of 2.4%. Cathay General Bancorp’s dividend payout ratio is 29.69%.

(Free Report)

Cathay General Bancorp is a bank holding company headquartered in Los Angeles, California, trading on NASDAQ under the symbol CATY. Its principal subsidiary, Cathay Bank, provides a full suite of financial services to commercial, institutional and retail clients. As a community-focused institution, the company emphasizes relationship banking and tailored solutions for businesses and individuals.

Founded in 1962 by a group of Chinese American entrepreneurs, Cathay has expanded from a single branch operation in downtown Los Angeles into one of the largest Asian-American banks in the United States.

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LOS ANGELES--(BUSINESS WIRE)-- #AsiaPacific--Cathay Bank celebrated a significant milestone in its expansion throughout the Asia-Pacific region with the grand opening of its Vietnam Representative Office on August 21 at Ho Chi Minh City. The new office is located in the Royal Center Building, Unit 606, 6th Floor, Royal Tower A, Royal Center Building, 235 Nguyen Van Cu, Cau Ong Lanh Ward, Ho Chi Minh City, 700000. With this new office, Cathay Bank now has a total of four representative offices, including ones.

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LOS ANGELES--(BUSINESS WIRE)--Cathay General Bancorp (Nasdaq: CATY) announced that its Board of Directors declared a cash dividend of thirty-eight cents per common share, payable on September 8, 2026, to stockholders of record at the close of business on August 28, 2026.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp (Nasdaq: CATY) is the holding company for Cathay Bank. Cathay General Bancorp’s website is at www.cathaygeneralbancorp.com. Founded in 1962, Cathay Bank offers a wide range of financial services and currently operates over 60 branches across the nation in California, New York, Washington, Texas, Illinois, Massachusetts, Maryland, Nevada, and New Jersey. Overseas, it has a branch in Hong Kong, and representative offices in Beijing, Shanghai, Taipei, and Ho Chi Minh City. To learn more about Cathay Bank, please visit www.cathaybank.com.

More News From Cathay General Bancorp

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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Los Angeles, Cathay General (CATY - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 29.22%. The holding company for Cathay Bank is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.43%. This compares to the Banks - West industry's yield of 2.42% and the S&P 500's yield of 1.33%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

CATY is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $5.42 per share, which represents a year-over-year growth rate of 19.38%.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CATY is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).

Regional Bank Buybacks: 5 Institutions Making Big MovesCathay General Bancorp NASDAQ: CATY reported higher second-quarter 2026 earnings as net interest income rose and the bank continued to expand its net interest margin, while management pointed to improved loan and deposit momentum entering the second half of the year.

President and Chief Executive Officer Chang Liu said the company generated net income of $92.2 million, or $1.37 per diluted share, for the quarter. Net interest income increased to $200.9 million, while net interest margin expanded to 3.48%, marking what Liu described as the company’s eighth consecutive quarter of margin expansion.

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“This reflects our continued focus on managing funding costs in a competitive environment,” Liu said on the call.

Executive Vice President and Chief Financial Officer Al Wang said net income rose 6% from the prior quarter, driven by higher net interest income and a lower provision for credit losses, partially offset by higher non-interest expense and income tax expense.

Loan and Deposit Growth Improved During the Quarter Wang said period-end loans totaled $20.6 billion, up 2.2% from the prior quarter, while period-end deposits increased 1.9% to $21.1 billion. Average loan balances increased 1% on an annualized linked-quarter basis, and average deposits rose 2% on the same basis.

Deposit growth remained modest year to date, increasing $167 million, or 0.8%, but Wang said quarterly deposit growth accelerated “meaningfully” during May and June. Non-maturity deposits increased while time deposits declined, resulting in what management described as a more favorable funding mix and lower concentration in certificates of deposit. The uninsured deposit ratio remained stable at 45%.

During the question-and-answer portion of the call, Liu said the company saw stronger loan activity after a slower first quarter. He said second-quarter loan growth reflected more commercial and industrial activity, slight growth in residential mortgage and stronger commercial real estate activity, while construction declined somewhat.

“Looking ahead in Q3, honestly, I think we see pretty strong numbers so far,” Liu said, adding that the company had seen $200 million in loan bookings during the first three weeks of July, with much of that tied to commercial real estate, including apartment refinancing, multifamily and retail activity.

Margin Outlook Maintained Despite Deposit Competition Cathay maintained its full-year net interest margin target of 3.4% to 3.5%, with Wang noting that the outlook now assumes a 25-basis-point rate increase in September. He said net interest margin expanded five basis points from the prior quarter, reflecting lower funding costs, partially offset by narrower loan spreads.

In response to a question from David Chiaverini of Jefferies, Wang said reported loan yields were affected by interest recoveries and prepayment penalties. Excluding those items, he said loan yields were roughly flat. He added that the company saw a 10-basis-point reduction in deposit costs during the quarter, helped by both pricing and mix.

Wang cautioned that deposit pricing remains competitive. He said the company has approximately $3.3 billion to $3.4 billion of CDs rolling off at a 3.54% rate and expects replacement rates to be slightly higher. Still, he said management believes there is room for margin expansion in the near term, though that room is narrowing.

Wang also said the company’s non-interest-bearing deposit mix, roughly 17%, is projected to remain about where it ended the second quarter. Through the first 21 days of July, he said Cathay had grown deposits by $240 million, distributed mainly among money market, savings and time deposits.

Securities Repositioning Aimed at Future Earnings Management highlighted another securities repositioning during the quarter as part of balance sheet optimization efforts. Liu said the transaction resulted in a $10.6 million loss on sale but is expected to improve future earnings and support margin expansion.

Wang said the company sold $160 million of lower-yielding securities in June and reinvested the proceeds at significantly higher yields, with an expected earn-back period of less than 3.5 years. In response to a question from Matthew Clark of Piper Sandler, Wang said the securities sold in the second quarter were yielding about 3.15%, while the company reinvested about $152 million at approximately 5.31%.

For the year to date, Cathay has sold $371.7 million of lower-yielding securities and reinvested $341.8 million into higher-yielding investments. Wang said the combined repositioning activities have an aggregate earn-back period of approximately 3.1 years and were executed without a meaningful change to the portfolio’s overall duration or credit profile.

The available-for-sale securities portfolio remains defensively positioned, Wang said, with a duration of approximately two years, about two-thirds of projected cash flow expected to return within 12 months and more than 95% backed by U.S. government agencies.

Expenses Rose, Credit Metrics Improved Non-interest expense increased to $92.3 million from $86.7 million in the prior quarter. Wang said the increase was primarily driven by $3.1 million of higher amortization expense tied to low-income housing tax partnerships after receiving updated fund financial statements. Excluding that and other non-core expenses, adjusted non-interest expense was $81.9 million, and the adjusted efficiency ratio was 37.0%, compared with 36.9% in the prior quarter.

Credit quality remained strong, management said. Net charge-offs declined to $1.8 million, classified loans decreased by $10 million and criticized loans improved by $103 million during the quarter. The allowance for loan losses increased $10 million to $219 million, or 1.06% of gross loans, primarily reflecting loan growth.

In response to Gary Tenner of D.A. Davidson, Wang said roughly $5.5 million of the allowance increase was due to loan growth, about $3 million related to specific reserves and another $1.5 million came from an adjustment to a qualitative factor.

Capital Return and Full-Year Guidance Liu said capital management remains a key part of the company’s strategy. During the quarter, Cathay repurchased 242,000 shares at an average cost of $58 per share. The board also approved an increase in the share repurchase authorization from $150 million to $200 million, subject to regulatory approval.

Wang said buyback activity was lighter during the quarter in part because regulatory approval came later in the period. He said the company expects to increase repurchase activity through the rest of the year and maintain more capacity heading into the first quarter than in prior years.

Cathay also plans to redeem approximately $54.1 million of its $119.1 million in outstanding trust-preferred securities, targeting its highest-cost issuances. Management said the move is expected to reduce funding costs and improve recurring earnings.

For the full year, Wang said Cathay continues to expect loan growth of 3.5% to 4.5%. The company lowered its deposit growth outlook to 3% to 4%, citing slower-than-expected first-half growth. Cathay maintained its adjusted non-interest expense growth outlook of 3.5% to 4.5% and now expects an effective tax rate between 21% and 22%.

“Overall, we’re pleased with our performance for the first half of the year,” Liu said, adding that the company is entering the third quarter with “good momentum” while maintaining a disciplined approach to growth, capital and expenses.

About Cathay General Bancorp (NASDAQ:CATY)Cathay General Bancorp is a bank holding company headquartered in Los Angeles, California, trading on NASDAQ under the symbol CATY. Its principal subsidiary, Cathay Bank, provides a full suite of financial services to commercial, institutional and retail clients. As a community-focused institution, the company emphasizes relationship banking and tailored solutions for businesses and individuals.

Founded in 1962 by a group of Chinese American entrepreneurs, Cathay has expanded from a single branch operation in downtown Los Angeles into one of the largest Asian-American banks in the United States.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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LOS ANGELES--(BUSINESS WIRE)--Cathay General Bancorp (the “Company”, “we”, “us”, or “our”) (Nasdaq: CATY), the holding company for Cathay Bank, today announced its unaudited financial results for the quarter ended June 30, 2026. The Company reported net income of $92.2 million, or $1.37 per diluted share, for the second quarter of 2026 compared to $86.9 million, or $1.29 per diluted share for the first quarter of 2026. “We delivered strong second quarter results, with higher earnings driven by.

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LOS ANGELES--(BUSINESS WIRE)--Cathay General Bancorp (Nasdaq: CATY), the holding company for Cathay Bank, is scheduled to announce its second quarter 2026 financial results after the markets close on Wednesday, July 22, 2026.

Cathay General Bancorp has scheduled a conference call as set forth below. Analysts and investors may participate in the question-and-answer session.

Conference Call and Webcast Information:

Participants should join the live conference call 5 to 10 minutes before its scheduled start.

Webcast Access: A listen-only live webcast of the call will be available at www.cathaygeneralbancorp.com and the recorded version will be available for replay within 24 hours after the call and archived for one year.

ABOUT CATHAY GENERAL BANCORP

Cathay General Bancorp (Nasdaq: CATY) is the holding company for Cathay Bank. Cathay General Bancorp’s website is at www.cathaygeneralbancorp.com. Founded in 1962, Cathay Bank offers a wide range of financial services and currently operates over 60 branches across the nation in California, New York, Washington, Texas, Illinois, Massachusetts, Maryland, Nevada, and New Jersey. Overseas, it has a branch in Hong Kong and representative offices in Beijing, Shanghai, and Taipei. To learn more about Cathay Bank, please visit www.cathaybank.com.

More News From Cathay General Bancorp

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Cathay General (CATY - Free Report) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.

The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for Cathay basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Cathay imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for CathayThis holding company for Cathay Bank is expected to earn $5.42 per share for the fiscal year ending December 2026, which represents no year-over-year change.

Analysts have been steadily raising their estimates for Cathay. Over the past three months, the Zacks Consensus Estimate for the company has increased 6.1%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Cathay to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Headquartered in Los Angeles, Cathay General (CATY - Free Report) is a Finance stock that has seen a price change of 22.11% so far this year. The holding company for Cathay Bank is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.57%. This compares to the Banks - West industry's yield of 2.57% and the S&P 500's yield of 1.43%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

CATY is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $5.40 per share, which represents a year-over-year growth rate of 18.94%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CATY is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Cathay General (CATY - Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Cathay General currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for CATY that show why this holding company for Cathay Bank shows promise as a solid momentum pick.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For CATY, shares are up 3.58% over the past week while the Zacks Banks - West industry is up 2.8% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 7.59% compares favorably with the industry's 2.83% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Cathay General have increased 3.57% over the past quarter, and have gained 35.68% in the last year. On the other hand, the S&P 500 has only moved -4.5% and 31.98%, respectively.

Investors should also take note of CATY's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now CATY is averaging 642,534 shares for the last 20 days..

Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with CATY.

Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. This revision helped boost CATY's consensus estimate, increasing from $5.11 to $5.14 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.

Bottom LineGiven these factors, it shouldn't be surprising that CATY is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Cathay General on your short list.

LOS ANGELES--(BUSINESS WIRE)--Cathay General Bancorp (Nasdaq: CATY), the holding company for Cathay Bank, is scheduled to announce its first quarter 2026 financial results after the markets close on Wednesday, April 22, 2026. Cathay General Bancorp has scheduled a conference call as set forth below. Analysts and investors may participate in the question-and-answer session. Conference Call and Webcast Information: Date: Wednesday, April 22, 2026 Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Ti.

Cathay General Bancorp remains a soft "Buy" after outperforming the S&P 500, driven by strong financials and asset quality. CATY's deposits and loans both expanded, with net interest income and non-interest income rising, supporting robust profit growth. Valuation is slightly above preferred thresholds, but superior return on assets (1.49%) and equity (12.27%) justify the premium.

LOS ANGELES--(BUSINESS WIRE)--Cathay General Bancorp (the “Company”, “we”, “us”, or “our”) (Nasdaq: CATY), the holding company for Cathay Bank, today announced its unaudited financial results for the quarter ended March 31, 2026. The Company reported net income of $86.9 million, or $1.29 per diluted share, for the first quarter of 2026 compared to $90.5 million, or $1.33 per diluted share for the fourth quarter of 2025. “Our ability to expand net interest margin while keeping deposit costs cont.

Cathay General Bancorp (CATY) Q1 2026 Earnings Call Transcript

LOS ANGELES--(BUSINESS WIRE)-- #CathayBank--Cathay Bank is excited to announce its upcoming 49th Annual Charity Golf Tournament, that will take place on May 6, 2026 at the Industry Hills Golf Club at Pacific Palms Resort in the City of Industry, California. This annual charity event serves as a long-standing tradition and cornerstone community event, bringing together golf enthusiasts to raise funds to support local nonprofit organizations. The tournament will feature an 18-hole, four-player scramble format,.

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Cathay General (CATY - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Cathay General currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for CATY that show why this holding company for Cathay Bank shows promise as a solid momentum pick.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For CATY, shares are up 0.24% over the past week while the Zacks Banks - West industry is down 0.45% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 13.77% compares favorably with the industry's 8.76% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Cathay General have increased 5.8% over the past quarter, and have gained 32.4% in the last year. In comparison, the S&P 500 has only moved 3.1% and 31.34%, respectively.

Investors should also take note of CATY's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now CATY is averaging 329,988 shares for the last 20 days..

Earnings OutlookThe Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with CATY.

Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. This revision helped boost CATY's consensus estimate, increasing from $5.11 to $5.16 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.

Bottom LineTaking into account all of these elements, it should come as no surprise that CATY is a #2 (Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Cathay General on your short list.

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Based in Los Angeles, Cathay General (CATY - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 16.57%. The holding company for Cathay Bank is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.69%. This compares to the Banks - West industry's yield of 2.71% and the S&P 500's yield of 1.39%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, CATY expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $5.40 per share, with earnings expected to increase 18.94% from the year ago period.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CATY is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Los Angeles, Cathay General (CATY - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 15.77%. The holding company for Cathay Bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.71% compared to the Banks - West industry's yield of 2.79% and the S&P 500's yield of 1.45%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

CATY is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $5.40 per share, which represents a year-over-year growth rate of 18.94%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CATY is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Headquartered in Los Angeles, Cathay General (CATY - Free Report) is a Finance stock that has seen a price change of 20.23% so far this year. The holding company for Cathay Bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 2.61% compared to the Banks - West industry's yield of 2.68% and the S&P 500's yield of 1.44%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 11.8% from last year. Over the last 5 years, Cathay General has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.11%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cathay's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for CATY for this fiscal year. The Zacks Consensus Estimate for 2026 is $5.40 per share, representing a year-over-year earnings growth rate of 18.94%.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CATY is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).