Cathay earnings increased in the third quarter of 2026 but fell just short of analyst expectations, as record net interest income was accompanied by a sharp rise in credit-loss provisions. The bank holding company reported unaudited net income of $95.2 million, or $1.43 per diluted share, in its October 21, 2026, 8-K filing.
Key Takeaways
- Diluted earnings of $1.43 per share missed the $1.45 analyst estimate but increased from $1.37 in the previous quarter.
- Net interest income reached a record $211.9 million, while the provision for credit losses rose to $28.6 million.
Table of Contents
- Cathay earnings grow alongside a wider interest margin
- Higher credit provision contrasts with fewer nonperforming assets
Cathay earnings grow alongside a wider interest margin
For the quarter ended September 30, net income increased 3.3% from $92.2 million in the second quarter. Profit also exceeded the $77.7 million reported a year earlier, when diluted earnings were $1.13 per share.
Net interest income rose 5.5% from the preceding quarter to $211.9 million. That figure represents net interest income, rather than total revenue. Net interest margin improved to 3.52%, and loans and deposits grew.
Operating efficiency improved, with the efficiency ratio declining to 40.60% from 41.53% in the second quarter and 41.84% a year earlier. Return on equity increased to 12.28% from 12.21% sequentially, while return on assets edged down to 1.51% from 1.52%.
Cathay General Bancorp, which trades on Nasdaq under CATY, is the holding company for Los Angeles-based Cathay Bank.
Higher credit provision contrasts with fewer nonperforming assets
The provision for credit losses increased to $28.6 million from $11.2 million in the previous quarter, providing a counterpoint to the stronger interest-income performance.
At the same time, nonperforming assets declined to 0.47% of total assets. The two measures presented a mixed credit picture: a larger quarterly provision alongside a lower reported share of nonperforming assets.
Insider selling totaled $8.3 million over the preceding 12 months.
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