Cathay General Bancorp (CATY) SEC Filings & Earnings Calls

Elevated provision for credit losses due to strong loan growth and updated loss assumptions

“The provision for credit losses was $28.6 million, primarily reflecting strong loan growth and updated loss assumptions incorporating recent charge-off experience.” · word for word

Net charge-offs concentrated in three borrower-specific credits including construction and CRE loans

“Net charge-offs of $25.3 million, or 0.48% of average loans on an annualized basis, were concentrated in three borrower-specific credits, including one construction loan and two movie theater CRE loans acquired from Far East National Bank.” · word for word

Commercial real estate concentration

“Total CRE loans represented 277% of total risk-based capital as of June 30, 2026” · word for word

Geographic concentration in California

“California represented 46% of total CREC loans as of both June 30, 2026” · word for word

Unrealized losses on AFS securities

“Gross unrealized losses $ 54,774”

Non-accrual loan exposure to commercial real estate

“Commercial real estate loans 70,157” · word for word

Credit quality remains stable with lower net charge-offs and provision, but allowance ratio increased slightly.

“Net charge-offs decreased to $1.8M from $12.7M YoY; provision decreased to $11.2M from $18.2M QoQ; allowance ratio increased to 1.06% from 1.03%.”

Deposit cost pressure is easing as cost of deposits declined 10 bps QoQ.

“Cost of average interest-bearing deposits decreased to 2.86% from 2.96% QoQ.”

CRE concentration risk

“Total CRE loans represented 278% of total risk-based capital as of March 31, 2026, and 287% as of December 31, 2025, which were within the Bank’s internal limit of 400%.” · word for word

California economic exposure

“There were 45% and 46% of total CREC loans concentrated in California as of March 31, 2026, and December 31, 2025, respectively. Changes in California’s economy and real estate values could have a significant impact on the collectability of these loans.” · word for word

Downside economic scenario sensitivity

“Applying a 100% weighting to the downside scenario would have increased the ACL by approximately $70.7 million as of March 31, 2026.” · word for word

Loan growth below expectations due to intentional credit focus; may limit revenue growth.

“Although loan growth did not meet our earlier expectations” · word for word

Net interest income slightly declined QoQ due to lower interest income from loans and securities.

“Net interest income before provision for credit losses decreased $0.8 million, or 0.4%” · word for word

TSR underperformance vs peer index

“Total shareholder return ('TSR') for 2025 was 4.64%, which was below the TSR of 28.85% for the banks included in the S&P U.S. BMI Banks - Western Region Index” · word for word

EPS-based LTI payout low (52.875%) for 2023-2025 period

“With respect to the awards based on EPS, the payout percentage was 52.875%.” · word for word

Commercial real estate concentration risk

“As of December 31, 2025, we had approximately $10.90 billion in commercial real estate and construction loans.” · word for word

Credit loss cycle risk

“we recorded a provision for credit losses of $72.6 million in the year ended December 31, 2025.” · word for word

Tariff and trade policy risk

“Tariffs and retaliatory tariffs have been imposed...could cause the prices of our clients’ products to increase which could reduce demand for such products, or reduce our client margins, and adversely impact their revenues, financial results and ability to service debt” · word for word

Key man risk from long-tenured CFO departure, but mitigated by orderly succession.

“CFO served since 2003; successor already onboard as Deputy CFO since Sep 2025.”

Credit quality remains manageable but net charge-offs increased to $5.4M in Q4 from $15.6M in Q3 (improvement).

“Net charge-offs of $5.4 million in Q4 2025, down from $15.6 million in Q3 2025. Allowance for credit losses increased to 1.03% of gross loans.”

CRE concentration risk

“Total CRE loans represented 290% of total risk-based capital as of September 30, 2025” · word for word

Specific loan credit risk (movie theatre)

“additional reserve of $9.1 million for two movie theatre loans” · word for word

California economic exposure

“There were 46% ... of total CREC loans concentrated in California as of September 30, 2025”