Cathay (CATY) Q2 2025 Earnings Call Transcript
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Cathay General Bancorp (NASDAQ:CATY) management attributed most of the allowance for credit losses build to economic forecasts, specifically noting increased unemployment expectations from Moody’s models. Large, short-term borrowings from the Federal Home Loan Bank, mostly at 4.6%, were used to fund concentrated loan growth late in the quarter, with management planning to replace these with lower-rate brokered CDs. Updated loan growth guidance reflects management’s caution regarding potential economic headwinds, including trade tariffs and inflation, while emphasizing a strong loan pipeline. The effective tax rate increase included a $3.4 million write-off of deferred tax assets due to lower California apportionment.
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