How Does Cathay General Bank Company Work?

The bank's lending portfolio is diverse, with commercial real estate loans forming the largest segment. As of Q2 2025, these loans accounted for 52% of the total loan portfolio, amounting to $10.4 billion. Residential mortgage loans represented 30% ($5.9 billion), and commercial and industrial (C&I) loans made up 16% ($3.2 billion).

Cathay Bank also offers various deposit accounts, including core and time deposits, totaling $20.01 billion as of June 30, 2025. Beyond these fundamental banking activities, the bank provides wealth management services and specializes in international trade finance.

The bank's operational infrastructure includes over 60 branches across nine U.S. states, a branch in Hong Kong, and representative offices in key Asian cities. This expansive network is crucial for facilitating international trade finance and cross-border transactions, particularly for its target demographic.

Cathay General Bancorp's primary value proposition stems from its deep understanding and established relationships within its target market. The bank offers culturally sensitive services and specialized financial tools, creating a distinct market differentiation and providing tangible benefits to its customers.

Founded in 1962, Cathay General Bancorp's journey includes significant expansion beyond California in 1999, reaching Houston and New York. Further growth was fueled by acquiring Golden City Commercial Bank, New Asia Bank in 2006, and United Heritage Bank in 2007, extending its presence into New Jersey. A notable move in 2021 was the agreement to purchase HSBC's West Coast retail operations, adding approximately $1.0 billion in deposits and $800 million in loans.

The company actively adjusts to market dynamics, as seen in its revised 2025 loan growth guidance to 3%-4% in Q2 2025, indicating confidence in its loan pipelines. Strategic efforts to lower funding costs have positively impacted its net interest margin, demonstrating an ability to navigate challenging interest rate environments.

Cathay's competitive edge is deeply rooted in its understanding and service to Asian American communities, fostering strong customer loyalty. Its expansive branch network across nine U.S. states, coupled with international offices in Hong Kong, Beijing, Shanghai, and Taipei, provides a distinct advantage, particularly in international trade finance.

Robust capital ratios are a cornerstone of Cathay's stability. As of Q2 2025, its Tier 1 risk-based capital ratio stood at 13.35%, and its total risk-based capital ratio was 14.92%. These strong figures highlight the company's resilience and its capacity to pursue growth opportunities effectively.

Cathay General Bancorp has established a strong market presence, particularly in serving Asian American communities and businesses. As of Q2 2025, the bank reported substantial figures, including $23.7 billion in total assets and $20.0 billion in total deposits, underscoring its significant role in the regional banking sector.

The bank's efficiency ratio improved to 45.34% in Q2 2025, reflecting effective cost management and streamlined operations. This focus on efficiency is a key aspect of understanding Cathay General Bank operations.

Potential risks include interest rate fluctuations and real estate market conditions, which could impact loan portfolios. Nonaccrual loans stood at 0.9% of total loans as of June 30, 2025, with a noted increase primarily due to a single real estate loan in foreclosure.

Management projects loan and deposit growth of 3-4% for the full year 2025. The anticipated net interest margin is between 3.25% and 3.35%, with an effective tax rate projected at 18.50% to 19.00%.