LOS ANGELES—Peter Wu, Vice Chairman of Cathay General Bancorp (NASDAQ:CATY), recently sold 40,000 shares of the company’s common stock. The shares were sold on November 6 at a weighted-average price of $52.87, resulting in a total transaction value of approximately $2.11 million. The sale occurred at prices ranging from $52.55 to $53.18 per share.
Following this transaction, Wu holds 295,252 shares indirectly through PACJU, LLC, and 396,901 shares through the Wu Family Trust. This activity was disclosed in a Form 4 filing with the Securities and Exchange Commission.
In other recent news, Cathay General Bancorp reported a stable third quarter, with a slight increase in net income to $67.5 million, a 1% rise from the previous quarter. The bank's diluted earnings per share also grew to $0.94. Additionally, the company announced its plan to continue its stock repurchase program, aiming to buy back about $35 million in stock per quarter through the first quarter of 2025, subject to market conditions.
Despite an earnings per share shortfall, Keefe, Bruyette & Woods maintained its Market Perform rating on Cathay General shares. The shortfall was largely due to increased credit costs, driven by a significant rise in non-performing loans, up 53% from the last quarter. However, the firm adjusted its earnings projections for Cathay General Bancorp, slightly reducing its estimates for the years 2025 and 2026 by 1% and 2%, respectively.
These recent developments also include a marginal increase in total gross loans, primarily driven by growth in commercial real estate loans. However, non-accrual loans rose to 0.84% of total loans, largely due to a $38 million loan becoming non-accrual. Despite these challenges, Cathay General Bancorp continues to actively manage its capital allocation to create value for shareholders.
InvestingPro Insights
Peter Wu's recent sale of Cathay General Bancorp shares comes at a time when the company's stock has shown significant momentum. According to InvestingPro data, CATY has demonstrated strong returns across multiple timeframes, with a notable 51.45% price total return over the past year and a 38.15% return in the last six months.
These robust returns align with an InvestingPro Tip indicating that CATY has experienced a "Significant return over the last week," which may have influenced the timing of Wu's sale. The stock's current price is also hovering near its 52-week high, at 96.09% of that peak.
Despite the strong stock performance, it's worth noting that CATY's revenue growth has been negative, with a -8.74% decline in the last twelve months. This contrasts with the company's attractive valuation metrics, including a P/E ratio of 12.85, which suggests the stock may still be reasonably priced relative to earnings.
Investors should also consider that CATY "Has maintained dividend payments for 34 consecutive years," as highlighted by another InvestingPro Tip. This long-standing commitment to shareholder returns, coupled with a current dividend yield of 2.66%, may provide some reassurance to long-term investors despite the insider sale.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for CATY, providing deeper insights into the company's financial health and market position.
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