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CATY

Cathay General Bancorp NasdaqGS:CATY Stock Report

Last Price

US$39.70

Market Cap

US$3.0b

7D

-5.5%

1Y

-5.4%

Updated

28 Sep, 2022

Data

Company Financials +
CATY fundamental analysis
Snowflake Score
Valuation4/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends4/6

CATY Stock Overview

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States.

Cathay General Bancorp Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Cathay General Bancorp
Historical stock prices
Current Share PriceUS$39.70
52 Week HighUS$48.88
52 Week LowUS$37.37
Beta1.14
1 Month Change-7.07%
3 Month Change1.41%
1 Year Change-5.43%
3 Year Change16.08%
5 Year Change-0.97%
Change since IPO877.23%

Recent News & Updates

Aug 18

Cathay General Bancorp declares $0.34 dividend

Cathay General Bancorp (NASDAQ:CATY) declares $0.34/share quarterly dividend, in line with previous. Forward yield 3.01% Payable Sept. 9; for shareholders of record Aug. 30; ex-div Aug. 29. See CATY Dividend Scorecard, Yield Chart, & Dividend Growth.

Aug 01

Cathay General Bancorp: Mid-50% LTV Ratio Across All Real Estate Loans Is Attractive

Cathay General Bancorp focuses on the Asian population in California and New York. The majority of its loan book appears to be low-risk, with a 52-55% average LTV ratio. The dividend yield is relatively low at 3.2%, but that's mainly due to the low payout ratio of approximately 30%. The premium of about 50% to the tangible book value is not low, but I think this premium valuation is warranted. Introduction When I last discussed Cathay General Bancorp (CATY) about six months ago, I liked the bank's low LTV ratio in both the commercial real estate portfolio as well as the residential mortgages portfolio (both are focused on California and New York). Of course, a lot has happened since that last article. Russia invaded Ukraine, interest rates have been hiked, and the economy is shrinking. While the share price is down just about 10% since my previous article, this is an opportune time to have a look at how the bank performed in the first semester. CATY data by YCharts The EPS remains strong thanks to low loan loss provisions Looking at the Q2 results, the very first thing you see is the massive increase in the net interest income. We see an increase in excess of $17.5M in the interest income, while the total interest expenses increased by just over $1.5M. This caused the net interest income to increase by more than 10% to just over $175M. An impressive result. Cathay General Bancorp Investor Relations On the other hand, Cathay saw its net non-interest expenses increase from $52M to just under $60M. That's mainly due to the fact the bank was able to record a $6M gain on equity securities, while it lost almost $1M on securities during the second quarter. This $7M delta almost single-handedly explains the 'deteriorating' non-interest results, although we should just conclude there was a non-recurring benefit in the first quarter and the situation is now just normalizing. Cathay General Bancorp recorded a $2.5M loan loss provision in the second quarter which resulted in a pre-tax income of $113.2M and a net income of just under $89M which worked out to be $1.19 per share. The book value per share: surprisingly stable While most other banks see their equity value (and thus book value per share) being hit by the lower value of the portfolio of securities classified as 'available for sale' due to the mandatory mark-to-market principle, Cathay seems to be immune for this. While the net book value is slightly lower than as of the end of FY 2021, keep in mind Cathay has been buying back stock and has been paying a dividend. The current quarterly dividend is $0.34 per share which means the payout ratio is less than 30% but more importantly, it also means that given the EPS of $2.18 in the first semester, the book value per share would have increased by about $1.50. This didn't happen. While there likely was some impact on the securities available for sale, we should also keep in mind the company repurchased in excess of 1.3 million shares in the first semester which would have carried a total cost of around $55-60M and keeping that in mind, the decrease of the book value by $15M is not bad at all. In fact, it boosted the total book value per share as the share count decreased at a faster pace than the equity value did and as of the end of H1, Cathay's book value per share came in at $32.67. Keep in mind that in excess of 15% of the book value consists of goodwill and if we would deduct the $383M in goodwill and intangible assets from the $2.43B equity value, we end up with a tangible equity of $2.05B which works out to just over $27.5/share. I'm also not too worried about the $17.8B loan book, despite seeing about 48% of the loans being classified as commercial real estate. Cathay General Bancorp Investor Relations As explained in a previous article, Cathay's average LTV ratios are low. In the CRE portfolio, the average LTV ratio is just around 52% with only 28% of the loans exceeding an LTV ratio of 60%. We see a similar percentage in the residential mortgage portfolio, where the average LTV value of the $5.4B portfolio is just 55%. So even if all homes would suddenly drop in value by 50%, Cathay General would still be able to walk away without too much of a haircut. This means Cathay's loan book appears to be safer than most of its peers.

Shareholder Returns

CATYUS BanksUS Market
7D-5.5%-4.5%-2.0%
1Y-5.4%-23.8%-20.3%

Return vs Industry: CATY exceeded the US Banks industry which returned -24.8% over the past year.

Return vs Market: CATY exceeded the US Market which returned -22.1% over the past year.

Price Volatility

Is CATY's price volatile compared to industry and market?
CATY volatility
CATY Average Weekly Movement3.1%
Banks Industry Average Movement3.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: CATY is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: CATY's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19621,156Chang Liuhttps://www.cathaygeneralbancorp.com

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States. The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for household, and other consumer expenditures.

Cathay General Bancorp Fundamentals Summary

How do Cathay General Bancorp's earnings and revenue compare to its market cap?
CATY fundamental statistics
Market CapUS$2.96b
Earnings (TTM)US$311.73m
Revenue (TTM)US$691.47m

9.5x

P/E Ratio

1.2x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CATY income statement (TTM)
RevenueUS$691.47m
Cost of RevenueUS$0
Gross ProfitUS$691.47m
Other ExpensesUS$379.74m
EarningsUS$311.73m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)4.19
Gross Margin100.00%
Net Profit Margin45.08%
Debt/Equity Ratio9.8%

How did CATY perform over the long term?

See historical performance and comparison

Dividends

3.4%

Current Dividend Yield

33%

Payout Ratio