Peter Wu, Vice Chairman of Cathay General Bancorp (NASDAQ:CATY), has sold a significant amount of shares, according to a recent SEC filing. Over two days, Wu disposed of a total of 20,000 shares, fetching prices between $46.92 and $47.0505 per share. The transactions, completed on October 30 and 31, resulted in a total sale value of approximately $939,351. Following these transactions, Wu retains direct ownership of 335,252 shares through PACJU, LLC, and indirect ownership of 396,901 shares through the Wu Family Trust.
In other recent news, Cathay General Bancorp has reported a stable Q3, with a slight increase in net income to $67.5 million, marking a 1% growth from the previous quarter. The company's diluted earnings per share also rose to $0.94. Despite an increase in non-performing loans by 53%, which led to a shortfall in the earnings per share, the bank continued its share buyback strategy, aiming to repurchase approximately $35 million in stock per quarter through the first quarter of 2025.
Keefe, Bruyette & Woods maintained its Market Perform rating on Cathay General Bancorp, even though it acknowledged the earnings per share shortfall and increased credit costs. The firm has revised its earnings estimates for the bank for 2025 and 2026, reducing them by 1% and 2% respectively, reflecting a more conservative outlook on the bank's net interest income.
In other developments, the bank reported a marginal increase in total gross loans, largely driven by growth in commercial real estate loans. However, non-accrual loans rose to 0.84% of total loans, primarily due to a $38 million loan becoming non-accrual. The Tier 1 leverage capital ratio also slightly decreased to 10.82%. Despite these challenges, Cathay General Bancorp remains committed to maintaining its financial stability and creating value for its shareholders.
InvestingPro Insights
The recent share sale by Peter Wu comes at a time when Cathay General Bancorp (NASDAQ:CATY) is trading near its 52-week high, with the stock price at $45.98 as of the last close. This proximity to the yearly peak is reflected in one of the InvestingPro Tips, which notes that CATY is "Trading near 52-week high." The timing of Wu's sale could be seen as capitalizing on the stock's strong performance, with CATY showing a substantial 32.83% price total return over the past six months.
Despite the recent insider selling, CATY's financial metrics present a mixed picture. The company's P/E ratio stands at 11.54, suggesting a relatively modest valuation compared to some peers in the banking sector. Additionally, CATY boasts a dividend yield of 2.96%, with an InvestingPro Tip highlighting that the company "Has maintained dividend payments for 34 consecutive years," demonstrating a commitment to shareholder returns.
However, investors should note that another InvestingPro Tip indicates CATY "Suffers from weak gross profit margins," which could be a concern in the competitive banking landscape. This is balanced by the fact that analysts predict the company will remain profitable this year, as per another InvestingPro Tip.
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for CATY, providing a deeper dive into the company's financial health and market position. These insights can be particularly valuable for investors looking to contextualize insider transactions like Wu's recent sale within the broader financial picture of Cathay General Bancorp.
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