Regional bank Cathay General Bancorp (NASDAQ: CATY) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 10.1% year on year to $196.6 million. Its GAAP profit of $1.10 per share was 1.1% above analysts’ consensus estimates.
Is now the time to buy Cathay General Bancorp? Find out by accessing our full research report, it’s free.
Cathay General Bancorp (CATY) Q2 CY2025 Highlights:
- Net Interest Income: $181.2 million vs analyst estimates of $180.5 million (9.6% year-on-year growth, in line)
- Net Interest Margin: 3.3% vs analyst estimates of 3.3% (26 basis point year-on-year increase, in line)
- Revenue: $196.6 million vs analyst estimates of $196 million (10.1% year-on-year growth, in line)
- Efficiency Ratio: 45.3% vs analyst estimates of 44.6% (0.7 percentage point miss)
- EPS (GAAP): $1.10 vs analyst estimates of $1.09 (1.1% beat)
- Market Capitalization: $3.37 billion
“We are pleased by the continued increase in the net interest margin compared to the first quarter of 2025. On June 4, 2025, the Company announced a new stock repurchase program to buy back up to $150.0 million of the Company's common stock. During the second quarter, we repurchased 804,179 common shares at an average cost of $44.22 per share, for a total of $35.6 million.”
Company Overview
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ: CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Over the last five years, Cathay General Bancorp grew its revenue at a mediocre 4.7% compounded annual growth rate. This fell short of our benchmark for the bank sector and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Cathay General Bancorp’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.4% annually. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Cathay General Bancorp’s year-on-year revenue growth was 10.1%, and its $196.6 million of revenue was in line with Wall Street’s estimates.
Net interest income made up 92.3% of the company’s total revenue during the last five years, meaning Cathay General Bancorp lives and dies by its lending activities because non-interest income barely moves the needle.
Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.
Cathay General Bancorp’s TBVPS grew at an impressive 7.9% annual clip over the last five years. The last two years show a similar trajectory as TBVPS grew by 8.7% annually from $30.62 to $36.16 per share.
Over the next 12 months, Consensus estimates call for Cathay General Bancorp’s TBVPS to grow by 9.4% to $39.54, decent growth rate.
Key Takeaways from Cathay General Bancorp’s Q2 Results
We struggled to find many positives in these results. Overall, this quarter could have been better. The stock remained flat at $47.75 immediately following the results.
So do we think Cathay General Bancorp is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
