Cathay General Bancorp (CATY) Financials

Cathay General Bancorp’s latest results show a continued improvement in profitability and balance-sheet growth. In Q2 2026, net income increased to $92.2 million from $77.5 million in Q2 2025, while diluted earnings per share rose to $1.37 from $1.10. The latest quarter also represents the strongest reported net interest income in the supplied period.

Net interest income reached $200.9 million in Q2 2026, up 10.9% year over year and 3.5% from Q1 2026. Total revenue rose 13.1% year over year to $222.3 million. Interest income from loans increased modestly, while lower deposit interest expense helped support the margin recovery. Net interest income has generally trended higher from approximately $165 million to $171 million per quarter in 2024 to more than $194 million in each quarter of 2026.

The balance sheet has also expanded. Net loans increased to $20.4 billion in Q2 2026 from $19.6 billion a year earlier and $18.0 billion in Q3 2022. Total deposits reached approximately $21.1 billion, up from $20.0 billion in Q2 2025. Total assets grew to $24.7 billion, while common equity increased to $3.0 billion.

Cash generation improved sharply in the latest quarter. Net cash from operating activities was $237.2 million in Q2 2026, compared with $98.3 million in Q1 and $55.1 million in Q4 2025. However, cash flow remains heavily influenced by investment-security purchases, debt activity and changes in deposits, making quarter-to-quarter cash trends volatile.

• Profitability is improving: Q2 2026 net income increased 19.1% year over year, while diluted EPS rose 24.5%, aided by both higher earnings and a lower share count.
• Net interest income has recovered: NII reached $200.9 million, up from $181.2 million in Q2 2025 and $165.3 million in Q2 2024.
• Loan and deposit growth supports future revenue: Net loans increased about 4% year over year, and total deposits grew roughly 5% over the same period.
• Capital and retained earnings are building: Common equity rose to $3.05 billion from $2.89 billion in Q2 2025, despite ongoing share repurchases and dividend payments.
• Operating cash flow strengthened: Q2 2026 operating cash flow of $237.2 million was more than double the Q1 2026 figure and substantially above the $55.1 million reported in Q4 2025.
• Cash deployment is shifting: Cathay purchased $1.25 billion of investment securities in Q2 2026 while receiving $797.3 million from sales and maturities, resulting in $460.2 million of net investing cash outflow.
• Shareholder returns remain consistent: The quarterly dividend was $0.38 per share in Q1 and Q2 2026, up from $0.34 throughout 2024 and 2025, while the company continued repurchasing shares.
• Credit reserves have risen faster than loans: The allowance for loan losses increased 26% year over year to $218.9 million, compared with roughly 4% growth in net loans. This may reflect a more cautious outlook on credit quality.
• Credit-loss provisions remain elevated: The Q2 2026 provision was $11.2 million, following $18.2 million in Q1 and $28.7 million in Q3 2025. Although the latest provision declined sequentially, it remains higher than the $6.6 million reported in Q2 2024.
• Expense growth is outpacing some revenue lines: Q2 2026 non-interest expense increased 3.6% year over year to $92.3 million, and salaries, occupancy and other operating costs have generally risen as the balance sheet has expanded.

Overall, the statements present a favorable earnings trend for CATY, supported by loan growth, stronger net interest income, rising equity and improved operating cash flow. Investors should continue monitoring the expanding loan-loss allowance, credit-loss provisions and the sustainability of deposit costs, because a deterioration in credit quality or renewed pressure on funding costs could reduce the benefit of the current earnings recovery.