Cathay General Bancorp (NASDAQ:CATY) Issues Quarterly Earnings Results

Cathay General Bancorp (NASDAQ:CATY) announced its quarterly earnings data on Wednesday. The bank reported $1.37 EPS for the quarter, beating analysts’ consensus estimates of $1.35 by $0.02, FiscalAI reports. The firm had revenue of $221.20 million during the quarter, compared to analysts’ expectations of $218.28 million. Cathay General Bancorp had a return on equity of 11.82% and a net margin of 24.66%.The company’s revenue for the quarter was up 13.1% compared to the same quarter last year. During the same quarter last year, the firm posted $1.10 earnings per share.

Here are the key takeaways from Cathay General Bancorp’s conference call:

• Cathay General Bancorp reported net income of $92.2 million, or $1.37 per diluted share, while net interest margin expanded to 3.48% for the eighth straight quarter of improvement.
• Loan growth accelerated in the quarter, with period-end loans up 2.2% linked quarter, and management said the pipeline remains healthy heading into the second half of the year.
• Credit quality remained strong, as net charge-offs declined and criticized and classified assets improved; the allowance for loan losses rose modestly mainly because of loan growth.
• The bank completed another securities repositioning, taking a $10.6 million loss but reinvesting at much higher yields, which management said should improve future earnings and support margin expansion.
• Management remains committed to capital returns, having repurchased shares in the quarter and increased the buyback authorization to $200 million, while also planning to redeem a portion of higher-cost trust preferred securities.

Cathay General Bancorp Stock Down 0.3%

CATY traded down $0.20 during mid-day trading on Friday, reaching $62.33. 15,754 shares of the stock were exchanged, compared to its average volume of 471,010. Cathay General Bancorp has a 1 year low of $43.65 and a 1 year high of $63.91. The company has a debt-to-equity ratio of 0.04, a quick ratio of 1.03 and a current ratio of 1.03. The stock has a market capitalization of $4.18 billion, a PE ratio of 12.21 and a beta of 0.86. The company has a 50 day moving average price of $59.91 and a two-hundred day moving average price of $54.66.

Cathay General Bancorp Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, June 9th. Shareholders of record on Thursday, May 28th were paid a dividend of $0.38 per share. The ex-dividend date was Thursday, May 28th. This represents a $1.52 annualized dividend and a yield of 2.4%. Cathay General Bancorp’s dividend payout ratio (DPR) is 31.34%.

Analyst Ratings Changes

CATY has been the topic of a number of recent research reports. Keefe, Bruyette & Woods increased their target price on Cathay General Bancorp from $64.00 to $67.00 and gave the stock a “market perform” rating in a report on Thursday. Zacks Research upgraded shares of Cathay General Bancorp from a “hold” rating to a “strong-buy” rating in a research note on Tuesday, June 23rd. DA Davidson upped their price objective on shares of Cathay General Bancorp from $56.00 to $66.00 and gave the stock a “neutral” rating in a report on Thursday. Weiss Ratings reaffirmed a “buy (b)” rating on shares of Cathay General Bancorp in a research note on Monday, July 6th. Finally, Stephens lifted their price objective on shares of Cathay General Bancorp from $56.00 to $63.00 and gave the company an “equal weight” rating in a report on Thursday. One analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus price target of $60.75.

Cathay General Bancorp declared that its board has initiated a share buyback program on Thursday, April 23rd that permits the company to buyback $150,000.00 billion in outstanding shares. This buyback authorization permits the bank to repurchase up to 4,164,630.6% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s board of directors believes its shares are undervalued.

Insider Activity

In related news, SVP May K. Chan sold 558 shares of the firm’s stock in a transaction dated Tuesday, April 28th. The shares were sold at an average price of $56.00, for a total transaction of $31,248.00. Following the transaction, the senior vice president directly owned 2,693 shares of the company’s stock, valued at $150,808. This trade represents a 17.16% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Vice Chairman Peter Wu sold 20,000 shares of the company’s stock in a transaction on Tuesday, May 5th. The shares were sold at an average price of $57.33, for a total value of $1,146,600.00. Following the completion of the transaction, the insider owned 275,252 shares of the company’s stock, valued at $15,780,197.16. This trade represents a 6.77% decrease in their position. The SEC filing for this sale provides additional information. Corporate insiders own 4.53% of the company’s stock.

Hedge Funds Weigh In On Cathay General Bancorp

Institutional investors have recently added to or reduced their stakes in the stock. Millennium Management LLC boosted its stake in Cathay General Bancorp by 375.1% in the third quarter. Millennium Management LLC now owns 420,509 shares of the bank’s stock valued at $20,189,000 after acquiring an additional 331,997 shares during the last quarter. Invesco Ltd. increased its stake in shares of Cathay General Bancorp by 6.7% during the 4th quarter. Invesco Ltd. now owns 1,685,203 shares of the bank’s stock worth $81,547,000 after purchasing an additional 105,484 shares during the last quarter. HRT Financial LP bought a new stake in shares of Cathay General Bancorp in the 2nd quarter worth approximately $3,987,000. Dark Forest Capital Management LP bought a new stake in shares of Cathay General Bancorp in the 3rd quarter worth approximately $3,910,000. Finally, Qube Research & Technologies Ltd lifted its stake in Cathay General Bancorp by 674.4% in the third quarter. Qube Research & Technologies Ltd now owns 93,282 shares of the bank’s stock valued at $4,478,000 after purchasing an additional 81,236 shares during the last quarter. Institutional investors own 75.01% of the company’s stock.

Cathay General Bancorp Company Profile

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.