UPDATE: BMO Capital Markets Downgrades Cathay General Bancorp to Market Perform on Valuation

BMO Capital Markets reduced its rating on Cathay General Bancorp

from Outperform to Market Perform while reiterating its $21 price target. BMO Capital Markets said, "Our downgrade is based mostly on valuation, given the stock's outperformance over the past year. We had been recommending CATY for several key catalysts including credit quality improvement, an upward bias to its net interest margin driven by lower funding costs, a lifting of the regulatory MOU, TARP repayment in early 2013, and the potential for more aggressive capital return to shareholders thereafter. With the stock now trading in line with our small-cap peer group, we believe that most of the optimism is reflected in the current valuation." Cathay General Bancorp closed at $19.98 on Wednesday.