Cathay Bank net worth in 2024 reflects its strong financial performance, driven by a robust loan portfolio and strategic financial management.
At Ando Money, we dive into the key metrics, including interest margins and revenue drivers, that shape the bank’s standing in the industry.
Quick Facts
| FACT | DETAIL |
|---|---|
| Name | Cathay Bank |
| Full Name | Cathay General Bancorp |
| Traded as | Nasdaq: CATY |
| ISIN | US1491501045 |
| Founded | 1962 |
| Founders | N/A |
| Country/Territory | United States |
| Headquarters | Los Angeles, California |
| Chief Executive Officer | Chang M. Liu |
| Number of Employees | N/A |
| Market Cap | $3.10 Billion (as of September 2024) |
| Total Assets | $23.23 Billion (as of June 2024) |
| Total Equity | $2.79 Billion (as of June 2024) |
| Revenue | N/A |
| Net Income | $66.8 Million (Q2 2024) |
What is the Net Worth/ Market Cap of Cathay Bank in 2024?
As of September 2024, Cathay General Bancorp, the parent company of Cathay Bank, boasts a market capitalization of $3.10 billion.
This places Cathay Bank within the ranks of mid-sized banks in the U.S. financial landscape.
While not as large as some global banking giants, Cathay Bank’s market cap reflects its stable growth and strategic initiatives, particularly in its focus on commercial real estate lending and expanding its customer base.
When comparing its size to other prominent banks in the industry, Cathay Bank falls short of the largest players but holds its own in its niche markets.
For those interested in how Cathay Bank stacks up, here’s a list of some other financial institutions:
- Wells Fargo
- Bank of America
- JPMorgan Chase
- U.S. Bancorp
- East West Bancorp
- PNC Financial Services
- Citigroup
To explore how banks worldwide measure up, check out the largest financial institutions in this overview.
Financial Performance Overview
Loan Portfolio Drives Revenue Growth
Cathay Bank’s loan portfolio is one of its core pillars of financial performance. The bank’s diversified portfolio includes commercial loans, residential mortgages, and real estate loans, which together contribute significantly to its interest income.
As of Q2 2024, gross loans totaled $19.36 billion. Commercial real estate loans, valued at $9.88 billion, and residential mortgages at $5.78 billion, are key drivers of revenue.
While the bank saw slight declines in its residential mortgage and construction loans during the second quarter, the stability in its commercial real estate loans helps maintain its profitability.
Interest from loans remains a major revenue stream. However, as interest rates fluctuate, the bank has been proactive in adjusting its loan strategies to balance risk and return.
By focusing on lending in strong real estate markets and building relationships with commercial clients, Cathay Bank ensures a steady inflow of income, despite a competitive and sometimes volatile financial environment.
Net Interest Margin and Its Impact on Profitability
Cathay Bank’s net interest margin (NIM), a crucial indicator of its earning capacity, slightly declined in Q2 2024, falling to 3.01% from 3.05% in the previous quarter.
This dip is partly due to rising interest expenses on deposits, offset by income from loans.
Despite these challenges, Cathay Bank’s NIM remains relatively strong compared to other mid-sized banks, reflecting its careful management of both its asset yields and cost of funds.
The margin is also impacted by the Federal Reserve’s interest rate policies, as well as market demand for loans. In a high-interest-rate environment, Cathay Bank may face increased pressure to maintain its profitability.
However, the bank’s well-established portfolio of commercial real estate and mortgage loans continues to generate robust interest income, contributing to the bottom line.
Deposit Base: The Backbone of Financial Stability
Deposits form the foundation of Cathay Bank’s liquidity and loan issuance capability. As of June 2024, total deposits reached $19.77 billion, with a strong emphasis on time deposits, which accounted for $10.27 billion of that total.
This demonstrates the bank’s focus on securing long-term, stable sources of funding, essential for supporting its loan portfolio.
Non-interest-bearing demand deposits provide additional liquidity, amounting to $3.16 billion, but these deposits can be more volatile than time deposits.
Nevertheless, Cathay Bank’s mix of deposit types ensures that it has the flexibility to meet both short-term operational needs and long-term investment strategies.
The strong deposit base is also an indicator of customer trust, reinforcing the bank’s reputation in the markets it serves.
Managing Credit Losses and Risk
One of the key challenges for any bank is managing credit losses, and Cathay Bank is no exception. In Q2 2024, the bank recorded a $6.6 million provision for credit losses, a significant increase from the $1.9 million reported in Q1 2024.
This rise reflects the bank’s cautious stance amid uncertain economic conditions. The provision serves as a buffer against potential loan defaults, ensuring the bank remains financially resilient even in tougher economic environments.
The bank’s total allowance for loan losses stood at $153.4 million, or 0.79% of gross loans, as of June 2024.
This conservative approach to credit risk management underscores Cathay Bank’s focus on long-term stability, ensuring that its capital reserves can absorb unexpected shocks.
Non-Interest Income and Expense Management
Cathay Bank also benefits from a diverse range of non-interest income streams. In Q2 2024, non-interest income increased to $13.2 million, up from $6.6 million in Q1.
This was primarily driven by a reduction in unrealized losses on equity securities. Other sources of income, such as wealth management fees, depository service fees, and letters of credit commissions, continue to provide steady contributions to the bank’s financial health.
On the expense side, non-interest expenses rose to $99.3 million in Q2 2024, reflecting increased costs in areas like amortization of alternative energy partnerships, real estate owned expenses, and professional services.
Despite these rising costs, Cathay Bank has maintained an efficiency ratio of 55.65%, indicating solid expense management relative to its income.
By focusing on loan portfolio growth, careful risk management, and a diversified income base, Cathay Bank continues to build a strong financial foundation to support its growth ambitions.
FAQs about Cathay Bank
What is the history of the Cathay Bank?
The bank was founded in 1962 to serve the Chinese-American community in Los Angeles. It has since expanded across the U.S. and internationally, including New York and Hong Kong.
How does the bank generate revenue?
It generates revenue through loan interest from commercial real estate and residential mortgages. It also earns from non-interest income like fees from financial services and wealth management.
What are its major financial services?
The bank offers commercial loans, residential mortgages, wealth management, deposit services, and letters of credit. It serves both personal banking and business clients.
How has Cathay Bank performed in 2024?
In Q2 2024, it reported a net income of $66.8 million. Its financial performance is stable with growth in commercial real estate loans and a net interest margin of 3.01%.
How does it manage credit risk?
The bank manages credit risk by setting aside $6.6 million for credit losses in Q2 2024, ensuring stability.
What types of deposits does it offer?
The bank offers demand deposits, savings accounts, money market accounts, and time deposits. Total deposits reached $19.77 billion as of June 2024.
Where does Cathay Bank operate?
It has branches across the U.S. in states like California and Texas, with international branches in Hong Kong and offices in Beijing, Shanghai, and Taipei.
Conclusion
Cathay Bank continues to grow, backed by strong financial performance. We’d love to hear your thoughts—feel free to leave comments, share this post, or explore more on our website at andomoney.com.
Check out how other major U.S. banks measure up here.
