Cathay General Q3 2026 slides: record NII drives earnings growth

Cathay General Bancorp reported Q3 2026 earnings on October 21, 2026, showcasing record net interest income and improved profitability despite record credit costs. The Los Angeles-based bank's net income increased by 3.3% to $95.2 million, or $1.43 per diluted share, marking a 23% year-over-year growth. Revenue exceeded expectations, reaching $254.65 million, while EPS fell shy of Wall Street's estimate by 3.3%.

Investors reacted more to the earnings miss and higher charge-offs than to the stronger revenue performance and lifted guidance. The bank highlighted several key achievements, including record net interest income and strong profitability metrics. Net interest income surged to $211.9 million, up 5.5% quarter-over-quarter and 12% year-over-year, driven by loan expansion, higher asset yields, and expanding net interest margins.

The net interest margin improved 4 basis points to 3.52%, reflecting improved loan yields and investment yields. Return on average tangible common equity grew to 14.03%, and return on average assets remained at 1.51%. The bank's balance sheet expanded, with total assets hitting $25.6 billion, up 6% year-over-year. Loan-to-deposit ratio improved to 96.04%, while cash equivalents and short-term investments rose by 29% quarter-over-quarter.

The loan portfolio remains heavily concentrated in commercial real estate at 51%, followed by residential mortgages at 29% and commercial and industrial loans at 19%. Despite strong revenue performance, credit costs emerged as a notable pressure point, with provision for credit losses totaling $28.6 million and net charge-offs at $25.3 million. Management maintains confidence in future expansion of net interest margins.