The following is a summary of the Cathay General Bancorp (CATY) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Cathay General Bancorp reported a Q3 2024 net income increase to $67.5 million, up 1% from Q2 of the same year.

• Diluted earnings per share increased by 2.2% to $0.94 for Q3 2024.

• Net interest margin for Q3 2024 was reported at 3.04%.

• The bank anticipates a modest increase in net interest margin to a range between 3.05% and 3.10% for the rest of 2024.

• Non-interest income increased significantly by $7.2 million to $20.4 million in Q3.

Business Progress:

• The bank continues to implement its stock buyback program, expecting to repurchase about $35 million per quarter in upcoming periods.

• Total gross loans saw a slight annualized increase of 0.3%, driven by growth in CRE and C&I loans.

• Deposits grew significantly, with total core deposits up by $195 million or 7.8% annualized.

• Maintenance of strong liquidity with significant unused borrowing capacities and unpledged securities.

Opportunities:

• Expansion of residential, CRE, and C&I loans presents opportunities for portfolio diversification and revenue growth.

• The expected decrease in market rates may reduce the cost of time deposits favorably affecting overall profitability.

Risks:

• The increase in non-accrual loans, primarily from a large $38 million relationship, portrays credit risk in loan portfolios, raising concerns about potential loan delinquencies.

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