Cathay General Bancorp posts $95.2 million quarterly profit, record interest income
Key Facts
Cathay General Bancorp reported net income of $95.2 million in the third quarter of 2026, alongside record interest income and an expansion of its loan portfolio. Diluted earnings per share were $1.43, according to the company's earnings statement issued on October 21. Net interest income before the provision for credit losses reached $211.9 million, a level the company described as a record for the period. Net interest margin widened to 3.52%, compared with 3.48% in the second quarter of the same year. The margin improvement coincided with growth in loans and deposits, while results included provisions for credit losses and expenses that included a donation and contract termination costs.
On the balance sheet, loans, excluding those held for sale, rose to $21.20 billion at the end of the third quarter, according to the company's statement. The increase from the previous quarter was $574.5 million, equivalent to quarterly growth of 2.79% in this portfolio. Deposits also rose, reaching $21.83 billion at the end of the period. The provision for credit losses was $28.6 million during the quarter, which the company attributed primarily to loan growth and updated loss assumptions. It said the updated assumptions reflected its recent loan charge-off experience, alongside the impact of expanded lending on provisions. Meanwhile, the ratio of nonperforming assets to total assets improved, falling to 0.47% at the end of the third quarter from 0.59% at the end of the second quarter.
Outside interest income, the official earnings presentation showed non-interest income rising to $42.8 million in the third quarter, compared with $21.4 million in the second quarter. The company attributed the increase to equity valuation gains and the benefit from the redemption of capital securities. Results included pre-tax valuation gains on equity securities of "$36.1 million", according to the presentation. In another item related to the investment portfolio, repositioning the debt securities portfolio resulted in a pre-tax loss of $15.1 million. Adjusted non-interest income was $18.8 million, down $1.5 million from the previous quarter. This is a non-GAAP measure, and the company attributed its decline primarily to lower wealth management fees.
On costs, non-interest expenses rose to $103.4 million during the third quarter, according to the earnings presentation. The quarterly increase was 12%, compared with expenses of $92.3 million in the second quarter. Expenses for the period included an $8.0 million donation to the Cathay Bank Foundation. Items affecting expenses also included contract termination costs of $5.4 million during the quarter. These two items were included in results for the same period that saw equity valuation gains and losses from repositioning debt securities, alongside growth in lending activity.
The company had announced arrangements for releasing and discussing its third-quarter results in a notice issued on October 8. It scheduled the results for release on October 21, 2026, after the market close. It also scheduled an earnings conference call for the same Wednesday. The call begins at 3:00 p.m. Pacific time, according to the company's announcement. That corresponds to 6:00 p.m. Eastern time.