Cathay General Bancorp Q3 net income rises on higher interest income from loans

Overview

• U.S. regional bank's Q3 net income and EPS rose from prior quarter and year-ago period

• Net interest income reached a record, with net interest margin expanding to 3.52%

• Company completed redemption of $54.1 mln Trust Preferred Securities

Outlook

• Company did not provide specific financial guidance for upcoming quarters or full year in its press release

Result Drivers

• NET INTEREST INCOME - Increased net interest income before provision for credit losses was driven mainly by higher interest income from loans and deposits with banks

• LOAN AND DEPOSIT GROWTH - Total loans, excluding loans held for sale, rose 2.79% and total deposits increased 3.67% sequentially, supporting loan growth and balance sheet positioning

• NON-INTEREST INCOME - Non-interest income nearly doubled from the prior quarter, mainly due to higher net gains from equity securities and a benefit from redemption of Trust Preferred Securities

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Cathay General Bancorp is $66.00, about 8.8% above its October 20 closing price of $60.67

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• Oct 20 - East West Bancorp Q3 revenue beats estimates on loan and deposit growth

• Oct 19 - Zions Bancorp Q3 EPS rises 20% on improved credit quality

• Oct 21 - Pinnacle Financial Partners Q3 adjusted profit beats estimates on loan, fee income growth

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)