Cathay General Bancorp (CATY): History, Ownership, Mission, How It Works & Makes Money

Ever wondered about the story behind Cathay General Bancorp (CATY), a financial institution rooted in serving the Asian American community? Founded in 1962, Cathay Bank, a subsidiary of Cathay General Bancorp, has grown from its humble beginnings in Los Angeles' Chinatown to operating over 60 branches across the U.S. and a branch in Hong Kong. With a reported net income of $286.0 million, or $3.95 per diluted share, for the year ended December 31, 2024, how does this bank work and make money, and what makes it tick? Keep reading to explore its history, ownership, mission, and business model.

Cathay General Bancorp (CATY) History

Founding Timeline

Year established

The company was established in 1962.

Original location

The original location was in Los Angeles, California.

Founding team members

The founding team included individuals committed to serving the Chinese-American community, though specific names are not highlighted in the available search results.

Initial capital/funding

Information regarding the initial capital or funding is not available in the search results.

Evolution Milestones

Transformative Moments

Throughout its history, the company has experienced several transformative moments that have shaped its trajectory:

• Strategic Acquisitions: The company has grown significantly through strategic acquisitions, such as the acquisition of GBC Bancorp in 2003, which expanded its market presence and asset base.
• Focus on the Chinese-American Community: From its inception, the company has focused on serving the financial needs of the Chinese-American community. This dedication has fostered strong customer relationships and a deep understanding of its target market.
• Expansion and Diversification: The company has expanded its services and geographic reach over the years, adapting to changing market conditions and customer needs. This includes offering a range of financial products and services, such as commercial lending, real estate financing, and trade finance.

To understand more about the company's guiding principles, visit: Mission Statement, Vision, & Core Values of Cathay General Bancorp (CATY).

The company's commitment to its founding mission, combined with strategic growth initiatives, has solidified its position as a leading financial institution within the Chinese-American community and beyond.

Cathay General Bancorp (CATY) Ownership Structure

Understanding Cathay General Bancorp's ownership structure provides key insights into its control and governance. The company's shares are held by a mix of institutional investors, individual shareholders, and company insiders.

Cathay General Bancorp's Current Status

Cathay General Bancorp is a publicly traded company, meaning its shares are available for purchase on the open market. It is listed on the NASDAQ under the ticker symbol CATY.

Cathay General Bancorp's Ownership Breakdown

The ownership of Cathay General Bancorp is distributed among various types of shareholders. Here is an overview:

Cathay General Bancorp's Leadership

The leadership team is responsible for setting the strategic direction and overseeing the operations of Cathay General Bancorp. Key members of the leadership team include:

• Chairman of the Board: Dunson K. Cheng
• President and Chief Executive Officer: Chang M. Liu
• Executive Vice President and Chief Financial Officer: Heng W. Chen

For more insights into Cathay General Bancorp's financial performance, see: Breaking Down Cathay General Bancorp (CATY) Financial Health: Key Insights for Investors

Cathay General Bancorp (CATY) Mission and Values

Cathay General Bancorp is committed to serving the financial needs of its communities with a focus on the Asian American community, while also adhering to strong ethical standards and providing value to its shareholders. The company's mission and values reflect a dedication to community development, customer service, and financial integrity.

Cathay General Bancorp's Core Purpose

Official mission statement

While an exact official mission statement is not publicly available, Cathay General Bancorp operates with a clear focus on the following principles:

• Serving the financial needs of the communities, with an emphasis on the Asian American community.
• Committing to the highest ethical standards in all business practices.
• Providing value to its shareholders through sustainable growth and profitability.
• Supporting community development and fostering economic growth in the areas it serves.

Vision statement

Cathay General Bancorp's vision can be inferred from its strategic actions and public statements. Key aspects of their vision include:

• To be the premier financial partner for the Asian American community and other diverse communities.
• To achieve sustainable growth by providing excellent customer service and innovative financial solutions.
• To maintain a strong and stable financial institution that contributes to the economic well-being of its markets.
• To foster a diverse and inclusive workplace that attracts and retains top talent.

Company slogan/tagline

While Cathay General Bancorp does not have a widely publicized official slogan, their commitment to their customers and community is evident in their actions and communications. The absence of a specific slogan does not diminish their clear dedication to their mission and values; instead, their actions speak louder than words.

To learn more about the investors of Cathay General Bancorp, check this out: Exploring Cathay General Bancorp (CATY) Investor Profile: Who’s Buying and Why?

Cathay General Bancorp (CATY) How It Works

Cathay General Bancorp operates as the holding company for Cathay Bank, providing a range of financial services primarily to the Asian American community, as well as to others. The bank focuses on real estate lending, commercial lending, and trade finance, alongside a variety of deposit products and services.

Cathay General Bancorp's Product/Service Portfolio

Cathay General Bancorp's Operational Framework

Cathay General Bancorp's operational framework is built around providing specialized financial services with a focus on the Asian American community while also serving a broader customer base. The bank's operations can be described as follows:

• Loan Origination and Underwriting: Cathay Bank focuses on originating quality loans, primarily in real estate and commercial lending. Their underwriting process emphasizes in-depth knowledge of the markets they serve, with a strong focus on risk management.
• Deposit Gathering: The bank attracts deposits through a variety of accounts, including checking, savings, and time deposits. These deposits form a crucial funding base for their lending activities.
• Branch Network and Digital Channels: Cathay Bank operates a network of branches, mainly in states with significant Asian American populations. They also provide services through online and mobile banking platforms, expanding their reach and enhancing customer convenience.
• Relationship Banking: A cornerstone of their approach involves building long-term relationships with customers, understanding their specific needs, and providing tailored financial solutions.
• Community Focus: Cathay General Bancorp actively engages with and supports the communities it serves through various initiatives, reinforcing its role as a community-oriented bank.

Cathay General Bancorp's Strategic Advantages

Cathay General Bancorp possesses several strategic advantages that contribute to its success and competitive positioning:

• Strong Focus on the Asian American Market: This specialization allows Cathay to leverage cultural insights and language capabilities to better serve this demographic, building strong customer loyalty.
• Extensive Branch Network: A significant presence in key markets with large Asian American populations provides a competitive edge in attracting and retaining customers.
• Diversified Loan Portfolio: Their loan portfolio, which includes commercial real estate, residential mortgages, and commercial loans, reduces risk through diversification.
• Sound Risk Management Practices: Conservative underwriting standards and proactive risk management contribute to the stability and quality of their asset base.
• Efficient Operations: The bank's focus on efficiency helps maintain a healthy net interest margin and supports profitability. In 2024, the net interest margin was 3.44%.

To gain more insights into Cathay General Bancorp's financial performance, consider reading: Breaking Down Cathay General Bancorp (CATY) Financial Health: Key Insights for Investors

Cathay General Bancorp (CATY) How It Makes Money

Cathay General Bancorp primarily generates revenue through traditional banking activities, focusing on commercial lending, real estate loans, and a variety of deposit services.

Cathay General Bancorp's Revenue Breakdown

Cathay General Bancorp's revenue is derived from its core banking operations, including interest income from loans and investment securities, as well as non-interest income from fees and other services. The bank's financial performance is influenced by factors such as interest rate spreads, loan growth, and the overall economic environment.

Cathay General Bancorp's Business Economics

Cathay General Bancorp operates under a business model that relies on several key economic principles:

• Interest Rate Spreads: The bank profits from the difference between the interest it earns on loans and investments and the interest it pays on deposits. Wider spreads typically lead to higher profitability.
• Loan Growth: Expanding the loan portfolio increases interest income, a primary driver of revenue. Loan growth is dependent on economic conditions and credit demand.
• Fee Income: Charges for services like account maintenance, wire transfers, and other banking activities contribute to the bank's non-interest income.
• Cost Management: Efficiently managing operating expenses is crucial for maintaining profitability. This includes controlling salaries, overhead, and other administrative costs.
• Asset Quality: Maintaining a high-quality loan portfolio minimizes losses from defaults and non-performing assets, ensuring financial stability.

Cathay General Bancorp's Financial Performance

Cathay General Bancorp's financial performance in 2024 demonstrates its stability and profitability:

• Net Income: Reported net income of $431.5 million for the year 2024, or $5.57 per share.
• Total Assets: The company’s total assets reached $23.14 billion as of December 31, 2024.
• Return on Average Assets (ROAA): The ROAA was 1.92% for the year 2024.
• Return on Average Equity (ROAE): The ROAE stood at 16.22% for 2024, reflecting strong profitability relative to shareholder equity.
• Net Interest Margin (NIM): The net interest margin was 3.44% for the year 2024.

For more insights into Cathay General Bancorp, explore: Exploring Cathay General Bancorp (CATY) Investor Profile: Who’s Buying and Why?

Cathay General Bancorp (CATY) Market Position & Future Outlook

Cathay General Bancorp operates as the holding company for Cathay Bank, primarily serving Asian American communities. The bank is likely to maintain a strong position in this niche market, but faces challenges from larger banks and fintech companies. Future outlook depends on adapting to changing customer preferences and effectively managing interest rate risk.

Competitive Landscape

Opportunities & Challenges

Industry Position

Cathay General Bancorp holds a significant position within the Asian-American banking sector, leveraging its cultural understanding and community ties. However, its overall market share in the broader banking industry remains relatively small.

• The company differentiates itself through personalized service and bilingual staff.
• Focus on real estate lending and commercial loans tailored to the needs of its target market.
• Cathay General Bancorp faces increasing pressure to innovate and adopt new technologies to remain competitive.

For more in-depth insights into the investor profile, check out: Exploring Cathay General Bancorp (CATY) Investor Profile: Who’s Buying and Why?