CATHAY GENERAL BANCORP

CATHAY GENERAL BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Business

Cathay General Bancorp (“Bancorp”) is the holding company for Cathay Bank (the “Bank” and, together, with Bancorp, the “Company”), andeleven limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner. Bancorp also owns 100% of the common stock offive statutory business trusts created for the purpose of issuing capital securities. The Bank was founded in1962 and offers a wide range of financial services. As of* March 31, 2025*, the Bank operates 24 branches in Southern California,18 branches in Northern California,9 branches in New York State, four in Washington State, two in Illinois, two in Texas, one in Maryland, Massachusetts, Nevada, and New Jersey, one in Hong Kong, and a representative office in Taipei, Beijing, and Shanghai. Deposit accounts at the Hong Kong branch arenot insured by the Federal Deposit Insurance Corporation (the “FDIC”). Current activities of Beijing, Shanghai, and Taipei representative offices are limited to coordinating the transportation of documents to Bank's head office and performing liaison services.

2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, they donot include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented arenot necessarily indicative of the results that* maybe expected for the year ending December 31, 2025.For further information, refer to the audited Consolidated Financial Statements and Notes included in the Company’s Annual Report on Form10*-K for the year ended* December 31, 2024*, filed with the SEC on* February 28, 2025 (the“2024* Form10-K”).

The preparation of the Consolidated Financial Statements in accordance with GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements. Actual results could differ from those estimates. The Company expects that the most significant estimate subject to change is the allowance for loan losses.

3. Other Accounting Standards Pending Adoption

In* November 2024,ASUNo.* 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses”, was issued. This ASU requires disaggregated disclosure of income statement expenses for public business entities. ASU2024-03 requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU2024-03 is effective for us, on a prospective basis, for annual periods beginning after* December 15, 2026,and interim periods within fiscal years beginning after December 15,*2027, though early adoption and retrospective application is permitted. ASU2024-03 isnot expected to have a significant impact on our financial statements.

In* December 2023,ASUNo.* 2023-09, “Income Taxes (Topic740): Improvements to Income Tax Disclosures” was issued. This ASU amends the disclosure requirements for income taxes, including the requirement for further disaggregation of the income tax rate reconciliation and income taxes paid disclosures. The amendments in this guidance are effective for annual periods beginning after* December 15, 2024.These amendments should be applied prospectively, with the option to apply retrospectively. ASU2023*-09 is effective for us in2025 and isnot expected to have a significant impact on our financial statements.

6

4. Cash, Cash Equivalents and Restricted Cash

The Company manages its cash and cash equivalents based upon the Company’s operating, investment, and financing activities. Cash and cash equivalents, for the purposes of reporting cash flows, consist of cash and due from banks, short-term investments, and interest-bearing deposits. Cash and due from banks include cash on hand, cash items in transit, cash due from the Federal Reserve Bank of San Francisco (“FRBSF”) and other financial institutions. Short-term investments and interest-bearing deposits include cash placed with other banks with original maturity ofthree months or less.

The Company had average excess balance with FRBSF of $1.17 billion as of* March 31, 2025*, and $1.05 billion as of* December 31, 2024*. As of* March 31, 2025*, and* December 31, 2024*, the Company had $32.6 million and $43.4 million, respectively, as cash margin that serves as collateral on deposits in a cash margin account for interest rate swaps. Of the balances held in the cash margin account $7.6 million and $8.6 million are restricted as of* March 31, 2025*, and* December 31, 2024*, respectively. As of* December 31, 2024*, the Company held $0.3 million in a restricted escrow account with a major bank for its alternative energy investments.

5. Earnings per Share

Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that then shared in earnings. Restricted stock units (“RSUs”) with anti-dilutive effect werenot included in the computation of diluted earnings per share. The following table sets forth earnings per common share calculations:

6. Stock-Based Compensation

Pursuant to the Company’s2005 Incentive Plan, as amended and restated, the Company* may*grant incentive stock options (employees only), non-statutory stock options, common stock awards, restricted stock, RSUs, stock appreciation rights and cash awards to non-employee directors and eligible employees.

RSUs are generally granted atno cost to the recipient. RSUs generally vest ratably over three years or cliff vest afterone orthree years of continued employment from the date of the grant. While a portion of RSUs* maybe time-vesting awards, others may*vest subject to the attainment of specified performance goals and are referred to as “performance-based RSUs.” All RSUs are subject to forfeiture until vested.

Performance-based RSUs are granted at the target amount of awards. Based on the Company’s attainment of specified performance goals and consideration of market conditions, the number of shares that vest can be adjusted to a minimum ofzero and to a maximum of 150% of the target. The amount of performance-based RSUs that are eligible to vest is determined at the end of each performance period and is then added together to determine the total number of performance shares that are eligible to vest. Performance-based RSUs generally cliff vest three years from the date of grant.

Compensation costs for the time-based awards are based on the quoted market price of the Company’s stock at the grant date. Compensation costs associated with performance-based RSUs are based on grant date fair value, which considers both market and performance conditions. Compensation costs of both time-based and performance-based awards are recognized on a straight-line basis from the grant date until the vesting date of each grant.

7

The following table presents RSU activity during thethree months ended* March 31, 2025*:

The compensation expense recorded for RSUs was $1.5 million and $0.9 million for thethree months ended* March 31, 2025*, and2024, respectively. Unrecognized stock-based compensation expense related to RSUs was $8.1 million and $7.7 million as of* March 31, 2025*, and2024, respectively. As of* March 31, 2025*, these costs are expected to be recognized over the next 1.7 years for time-based and performance-based RSUs.

As of* March 31, 2025*,1,240,814 shares were available for future grants under the Company’s2005 Incentive Plan, as amended and restated.

7. Investment Securities

The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of securities available-for-sale ("AFS") as of* March 31, 2025*, and* December 31, 2024*

As of* March 31, 2025*, and* December 31, 2024*, the amortized cost of AFS securities excluded accrued interest receivables of $3.9 million and $4.6 million, respectively, which are included in accrued interest receivable on the Consolidated Balance Sheets. For the Company’s accounting policy related to AFS securities accrued interest receivable,see Note1* -* Summary of Significant Accounting Policies–* Securities Available for Sale*–* Allowance for Credit Losses on Available for Sale Securities* to the Consolidated Financial Statements in the Company’s2024 Form10-K.

8

The amortized cost and fair value of AFS securities as of* March 31, 2025*, by contractual maturities, are set forth in the table below. Actual maturities* maydiffer from contractual maturities because borrowers may*have the right to call or repay obligations with or without call or repayment penalties.

Equity Securities - The Company recognized an unrealized net loss of $4.2 million for thethree months ended* March 31, 2025*, compared to a net loss of $9.0 million for thethree months ended* March 31, 2024*. The $4.8 million decrease in unrealized loss was due to a smaller decrease in fair value of equity investments with readily determinable fair values during thefirst quarter of2025. Equity securities were $30.2 million and $34.4 million as of* March 31, 2025*, and* December 31, 2024*, respectively.

The following tables set forth the gross unrealized losses and related fair value of the Company’s investment portfolio, aggregated by investment category and the length of time that individual security has been in a continuous unrealized loss position, as of* March 31, 2025*, and* December 31, 2024*:

As of* March 31, 2025*, the Company had a total of 183 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 149 mortgage-backed securities,14 Corporate debt securities,10 U.S. government agency securities, seven U.S. treasury securities andthree collateralized mortgage obligations. In comparison, as of* December 31, 2024*, the Company has a total of 182 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 154 mortgage-backed securities,16 Corporate debt securities, nine U.S. treasury securities andthree collateralized mortgage obligations.

9

The AFS securities that were in an unrealized loss position at* March 31, 2025*, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses,see Note1* -* Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements in the Company’s2024 Form10-K.

The Company concluded the unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. The issuers havenot, to the Company’s knowledge, established any cause for default on these securities. The Company expects to recover the amortized cost basis of its securities and hasno present intent to sell and willnot be required to sell securities AFS that have declined below their cost before their anticipated recovery. Accordingly, no allowance for credit losses was recorded as of* March 31, 2025*, against these securities, and there wasno provision for credit losses recognized for thethree months ended* March 31, 2025*.

AFS securities having a carrying value of $17.1 million and $17.8 million as of* March 31, 2025*, and* December 31, 2024*, respectively, were pledged to secure public deposits and other borrowings.

8. Loans* *

Most of the Company’s business activities are with clients located in the high-density Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has loan clients in Hong Kong. The Company hasno specific industry concentration, and generally its loans, when secured, are secured by real property or other collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral.

The types of loans in the Company’s Consolidated Balance Sheets as of* March 31, 2025*, and* December 31, 2024*, were as follows:

As of* March 31, 2025*, and* December 31, 2024*, recorded investment in non-accrual loans was $154.6 million and $169.2 million, respectively. For non-accrual loans, the amounts previously charged-off represent 11.9% and 11.8% of the contractual balances for non-accrual loans as of* March 31, 2025*, and* December 31, 2024*, respectively.

The following table presents non-accrual loans and the related allowance as of* March 31, 2025*, and* December 31, 2024*.

10

The following tables present the average recorded investment and interest income recognized on non-accrual loans for the period indicated:

The following tables present the aging of the loan portfolio by type as of* March 31, 2025*, and as of* December 31, 2024*:

11

The Company has adopted ASU2022-02, "Financial Instruments – Troubled Debt Restructurings ("TDR") and Vintage Disclosures". The Company has elected to apply the guidance prospectively and the practical expedient to exclude the accrued interest receivable balance from the disclosed amortized cost basis of loan modifications to debtors experiencing financial difficulty, consistent with our Allowance for Credit Losses ("ACL") approach discussed further below in this footnote.

Under this guidance on loan modifications made to borrowers experiencing financial difficulty, when a loan held for investment is modified and is considered to be a continuation of the original loan, the Company uses the post-modification contractual rate to derive the effective interest rate when using a discounted cash flow method to determine the allowance for credit loss.

The amendments in this guidance require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan.

The Company establishes a specific reserve for individually evaluated loans that donot share similar risk characteristics with the loans included in the quantitative baseline. These individually evaluated loans are removed from the pooling approach for the quantitative baseline, and include non-accrual loans, loan modifications made to borrowers experiencing financial difficulty, and other loans as deemed appropriate by management. The Company applies the loan refinancing and restructuring guidance provided in ASU2022-02 to determine whether a modification made to a borrower results in a new loan or a continuation of an existing loan.

If economic conditions or other factors worsen relative to the assumptions the Company utilized, the expected loan losses will increase accordingly in future periods.

The following table presents the amortized cost of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted and the financial effects of the modifications for thethree months ended* March 31, 2025*, and* March 31, 2024*, by loan class and modification type.

12

The Company considers a loan to be in payment default once it is 60 to 90 days contractually past due under the modified terms. The Company tracks the performance of modified loans.

The following table presents information on loans that defaulted during thethree months ended* March 31, 2025*, that received modifications within thetwelve months preceding payment default. There wereno loans that received modifications which subsequently defaulted during thethree months ended* March 31, 2024.*

A modified loan* maybecome delinquent and mayresult in a payment default (generally90* days past due) subsequent to modification.

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of loans that were modified in thetwelve months ended* March 31, 2025*, and2024.

13

Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty.

As of* March 31, 2025*, there wereno commitments to lend additional funds to borrowers experiencing financial difficulty and whose loans were modified.

As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of sources of repayment, the borrower’s current financial and liquidity status and other relevant information. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:

The following table summarizes the Company’s loans held for investment and current year-to-date gross write-offs as of* March 31, 2025*, and* December 31, 2024*, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification. Revolving Loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year columns.

14

15

The Company has an allowance framework under ASC Topic326 for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses inherent in the Company’s relevant financial assets. The forward-looking concept of current expected credit loss (“CECL”) approach requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances.

The ACL is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets (Unaudited). The amortized cost basis of loans doesnot include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Operations and Comprehensive Income (Unaudited) is a combination of the provision for loan losses and the provision for unfunded loan commitments.

Under the Company’s CECL approach, management estimates the ACL using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable economic forecasts that vary by loan portfolio. We use economic forecasts from Moody’s Analytics in this process. The economic forecast is updated monthly; therefore, theone used for each quarter-end calculation is generally based on aone-month lag based on the timing of when the forecast is released. The Company doesnot consider aone-month lag to create a material difference but considers any subsequent material changes to our estimated loss forecasts as deemed appropriate. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in gross domestic product (or “GDP”), unemployment rates, property values, or other relevant factors.

Under the CECL methodology, quantitative and qualitative loss factors are applied to our population of loans on a collective pool basis when similar risk characteristics exist. The Company evaluates loans for expected credit losses on an individual basis if, based on current information and events, the loan doesnot share similar credit risk characteristics with other loans. The Company* maychoose to measure expected credit losses on an individual loan basis by usingone* of the following methods: (1) the present value of the expected future cash flows of the loan discounted at the loan’s original effective interest rate, or (2) if the loan is collateral dependent, the fair value of the collateral less costs to sell. For loans that arenot collateral-dependent, the Company uses the present value of future cash flows.

Quantitative Factors

Under the Company’s CECL methodology,nine portfolio segments with similar risk characteristics are evaluated for expected loss. Six portfolios are modeled using econometric models andthree smaller portfolios are evaluated using a simplified loss-rate method that calculates lifetime expected credit losses for the respective pools (simplified approach). Thesix portfolios subject to econometric modeling include residential mortgages; commercial and industrial loans (“C&I”); construction loans; commercial real estate (“CRE”) for multifamily loans; CRE for owner-occupied loans; and other CRE loans. We estimate the probability of default during the reasonable and supportable forecast period using separate econometric regression models developed to correlate macroeconomic variables, (GDP, unemployment, CRE prices and residential mortgage prices) to historical credit performance for each of thesix loan portfolios from thefourth quarter of2007 to thefourth quarter of2022. Loss given default rates are computed based on the charge-offs recognized divided by the exposure at default of defaulted loans starting with thefourth quarter of2007 through thefourth quarter of2022. The probability of default and the loss given default rates are applied to the expected amount at default at the loan level based on contractual scheduled payments and estimated prepayments. The amounts so calculated comprise the quantitative portion of the allowance for credit losses.

The Company’s CECL methodology utilizes aneight-quarter reasonable and supportable (“R&S”) forecast period, and afour-quarter reversion period. Management relies on multiple forecasts, blending them into a single loss estimate. Generally speaking, the blended scenario approach would include the Baseline, the Alternative Scenario1 – Upside –10th Percentile and the Alternative Scenario3 – Downside –90th Percentile forecasts. After the R&S period, the Company reverts linearly for thefour-quarter reversion period to the long-term loss rates for each of thesix portfolios of loans.

The Company’s CECL methodology estimates expected credit losses over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extension or renewal options are included in the original or modified contract at the reporting date and arenot unconditionally cancellable by the Company.

The simplified approach portfolios include Small Business Administration (“SBA”) loans, Home Equity Lines of Credit (“HELOCs”) and cash-secured loans, which arenot modelled econometrically due to the low loss history for thesethree pools of loans. The forecasted loss rate is based on the forecasted GDP and unemployment rates during thefirst eight quarters of the portfolio’s contractual life, reversion loss rates for the nextfour quarters of the portfolio’s contractual life on a linear declining rate, and the long-term loss rate projected over the remainder of the portfolio’s contractual life.

Qualitative Factors

Under the Company’s CECL methodology, the qualitative portion of the reserve on pooled loans represents management’s judgment of additional considerations to account for internal and external risk factors that arenot adequately measured in the quantitative reserve. The qualitative loss factors consider idiosyncratic risk factors, conditions that* may**not* be reflected in quantitatively derived results, or other relevant factors to seek to ensure the allowance for credit losses reflects our best estimate of current expected credit losses. The qualitative reserves include reserves for policy exceptions, experience of management and staff, level of competition in the lending environment, weak risk identification, lack of historical loss experience with residential mortgage loans made to non-U.S. residents, oil & gas, the higher risk characteristics of purchased syndicated loans, model uncertainty, and loans with potential risk of loss given the current environment, including CRE and Office loans, but havenot degraded to the point of qualifying for a specific reserve. Current and forecasted economic trends and underlying market values for collateral dependent loans also are considered within the econometric models described above.

16

The Company’s CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things:

In addition, the CECL methodology is dependent on economic forecasts that are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered by management to be appropriate, there can beno assurance that it will be sufficient to absorb future losses.

Management believes the allowance for credit losses is appropriate for the CECL in our loan portfolio and associated unfunded commitments, and the credit risk ratings and inherent loss rates currently assigned are reasonable and appropriate as of the reporting date. The criteria for default* mayinclude anyone* of the following: on nonaccrual status, modifications to borrowers experiencing financial difficulty, or payment delinquency of90 days or more.

Individually Evaluated Loans

When a loanno longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for loan losses on an individual loan basis. Generally, the allowance for loan losses for individually evaluated loans is measured as the difference between the recorded value of the loans and the fair value of the collateral. For loans evaluated individually, the Company usesone oftwo different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; or (2) the present value of expected future cash flows. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determinednot to be collateral dependent, the Company uses the present value of future cash flows.

Unfunded Loan Commitments

Unfunded loan commitments are generally related to providing credit facilities to clients of the Bank and arenot actively traded financial instruments. These unfunded commitments are disclosed as off-balance sheet financial instruments in Note9 in the Notes to Consolidated Financial Statements (Unaudited).

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company, using the same loss factors as used for the allowance for loan losses. The reserve for unfunded loan commitments uses aone-year historical usage rate of the unfunded commitments during the contractual life of the commitments. The allowance for unfunded commitments is included in “other liabilities” on the Consolidated Balance Sheets. Changes in the allowance for unfunded commitments are included in the provision for credit losses.

The following tables set forth activity in the allowance for loan losses by portfolio segment for thethree months ended* March 31, 2025*, and* March 31, 2024*.

17

18

Loans Held-for-Sale

At the time of commitment to originate or purchase a loan, the loan is determined to be held for investment if it is in the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. As of* March 31, 2025*, there were $11.7 million of loans held-for-sale, which were comprised of commercial loans and commercial real estate loans. There wereno loans held-for-sale as of* December 31,*2024.

Loan Transfers, Sales and Purchases

The Company purchases and sells loans in the secondary market in the ordinary course of business. From time to time, purchased loans* maybe transferred from held-for-investment to held-for-sale, and write-downs to the allowance for loan losses are recorded, when appropriate. During thethree* months ended* March 31, 2025*, the Company transferred $2.1 million in commercial loans and $9.6 million in commercial real estate loans held for investment to loans held for sale. Net gains on sale of loans, excluding the lower of cost or fair value adjustments, were $121 thousand for thethree months ended* March 31, 2025*. There wereno lower of cost or fair value adjustments during thethree months ended* March 31, 2025*.

9. Commitments and Contingencies

From time to time, Bancorp and its subsidiaries are parties to litigation that arises in the ordinary course of business or otherwise is incidental to various aspects of its operations. Based upon information available to the Company and its review of any such litigation with counsel, management presently believes that the liability relating to such litigation, if any, wouldnot be expected to have a material adverse impact on the Company’s consolidated financial condition, results of operations or liquidity taken as a whole. The outcome of litigation and other legal and regulatory matters is inherently uncertain, however, and it is possible thatone or more of the legal matters currently pending or threatened against the Company could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity taken as a whole.

Although the Company establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, the Company doesnot have accruals for all legal proceedings where there is a risk of loss. In addition, amounts accrued* may**not* represent the ultimate loss to the Company from the legal proceedings in question. Thus, ultimate losses* may*be higher or lower, and possibly significantly so, than the amounts accrued for legal loss contingencies.

In the normal course of business, the Company from time to time becomes a party to financial instruments with off-balance sheet risk to meet the financing needs of its clients. These financial instruments include commitments to extend credit in the form of loans, or through commercial or standby letters of credit and financial guarantees. These instruments represent varying degrees of exposure to risk in excess of the amounts included in the accompanying Consolidated Balance Sheets. The contractual or notional amount of these instruments indicates a level of activity associated with a particular class of financial instrument and isnot a reflection of the level of expected losses, if any.

The Company’s unfunded commitments related to investments in qualified affordable housing and alternative energy partnerships were $98.8 million and $99.5 million as of* March 31, 2025*, and* December 31, 2024*, respectively.

10. Borrowed Funds

Borrowings from the Federal Home Loan Bank (“FHLB”)– There wereno over-night borrowings from the FHLB as of* March 31, 2025*, and* December 31, 2024*. Advances from the FHLB were $95.0 million at a weighted average rate 4.59% as of* March 31, 2025*, and $60.0 million at a weighted average rate of 5.08% as of* December 31, 2024*. As of* March 31, 2025*, final maturity for the FHLB advances was $95.0 million in* April**2025.* Our unused borrowing capacity from the FHLB as of* March 31, 2025*, and* December 31, 2024*, was $7.35 billion and $7.47 billion, respectively, and unpledged securities at* March 31, 2025*, and* December 31, 2024*, was $1.42 billion and $1.53 billion, respectively.

Junior Subordinated Notes –* The Company establishedthree* special purpose trusts in2003 andtwo in2007 for the purpose of issuing Guaranteed Preferred Beneficial Interests in their Subordinated Debentures to outside investors (“Capital Securities”). The proceeds from the issuance of the Capital Securities as well as our purchase of the common stock of the special purpose trusts were invested in Junior Subordinated Notes of the Company (“Junior Subordinated Notes”). The trusts exist for the purpose of issuing Capital Securities and investing in Junior Subordinated Notes. Subject to some limitations, payment of distributions out of the monies held by the trusts and payments on liquidation of the trusts, or the redemption of the Capital Securities, are guaranteed by the Company to the extent the trusts have funds on hand at such time. The obligations of the Company under the guarantees and the Junior Subordinated Notes are subordinate and junior in right of payment to all indebtedness of the Company and are structurally subordinated to all liabilities and obligations of the Company’s subsidiaries. The Company has the right to defer payments of interest on the Junior Subordinated Notes at any time or from time to time for a period of up totwenty consecutive quarterly periods with respect to each deferral period. Under the terms of the Junior Subordinated Notes, the Company* may**not,* with certain exceptions, declare or pay any dividends or distributions on its capital stock or purchase or acquire any of its capital stock if it has deferred payment of interest on any Junior Subordinated Notes.

At* March 31, 2025*, Junior Subordinated Notes totaled $119.1 million with a weighted average interest rate of 6.88%, compared to $119.1 million with a weighted average rate of 7.75% at* December 31, 2024*. The Junior Subordinated Notes have a stated maturity term of 30 years.

19

11. Income Taxes

The effective tax rate for thefirst quarter of2025 was 19.8% compared to 10.8% for thefirst quarter of2024. The effective tax rate for thefirst quarter of2025 includes the impact of low-income housing tax credits and for thefirst quarter of2024 includes the impact of alternative energy investment and low-income housing tax credits.

The Company’s tax returns are open for audit by the Internal Revenue Service back to 2022 and by the California Franchise Tax Board back to 2021.

It is reasonably possible that unrecognized tax benefits could change significantly over the nexttwelve months. The Company doesnot expect that any such changes would have a material impact on its annual effective tax rate.

12. Fair Value Measurements and Fair Value of Financial Instruments

The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily securities available-for-sale and derivatives. For assets measured at the lower of cost or fair value, the fair value measurement criteria* mayor may**not* be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for individually evaluated loans and other real estate owned and also to record impairment on certain assets, such as goodwill, CDI, and other long-lived assets.

The Company used valuation methodologies to measure assets at fair value under ASC Topic820 and ASC Topic825, as amended by ASU2016-01 and ASU2018-03, to estimate the fair value of financial instrumentsnot recorded at fair value. The fair value of the Company’s assets and liabilities is classified and disclosed inone of the followingthree categories:

The classification of assets and liabilities within the hierarchy is based on whether inputs to the valuation methodology used are observable or unobservable, and the significance of those inputs in the fair value measurement. The Company’s assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurements.

Financial assets and liabilities measured at fair value on a recurring basis:

The Company uses the following methodologies to measure the fair value of its financial assets and liabilities on a recurring basis:

Securities Available-for-Sale and Equity Securities - For certain actively traded agency preferred stocks, mutual funds, U.S. Treasury securities, and other equity securities, the Company measures the fair value based on quoted market prices in active exchange markets at the reporting date, a Level1 measurement. The Company also measures securities by using quoted market prices for similar securities or dealer quotes, a Level2 measurement. This category generally includes U.S. Government agency securities, U.S. Government sponsored entities, state and municipal securities, mortgage-backed securities (“MBS”), collateralized mortgage obligations and corporate bonds.

Interest Rate Swaps – The Company measures the fair value of interest rate swaps usingthird party models with observable market data, a Level2 measurement.

Currency Option Contracts and Foreign Exchange Contracts - The Company measures the fair value of currency option contracts and foreign exchange contracts based on observable market rates on a recurring basis, a Level2 measurement.

20

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of* March 31, 2025*, and* December 31, 2024*:

21

Financial assets and liabilities measured at estimated fair value on a non-recurring basis:

Certain assets or liabilities are required to be measured at estimated fair value on a nonrecurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower-of-cost-or-fair value or other impairment write-downs of individual assets. In determining the estimated fair values during the period, the Company determined that substantially all the changes in estimated fair value were due to declines in market conditions versus instrument specific credit risk. For the periods ended* March 31, 2025*, and* December 31, 2024*, there wereno material adjustments to fair value for the Company’s assets and liabilities measured at fair value on a nonrecurring basis in accordance with GAAP.

During thesecond quarter of2024, the Company entered into a restructuring support agreement and received equity securities for equity interest in a private company, a Level3 measurement. The fair value of the Company’s Level3 equity security was measured using the private company’s projected earnings plus cash on hand. The primary inputs and assumptions used in the fair value measurement was derived from the issuer’s projected earnings and collateral, which included cash on hand, the financial standing of the issuer, the business and financial plan of the issuer, among other factors. Significant increases or decreases in any of the inputs or assumptions could result in a significant increase or decrease in the fair value measurement.

For financial assets measured at fair value on a nonrecurring basis that were still reflected in the Consolidated Balance Sheets as of* March 31, 2025*, and* December 31, 2024*, the following tables set forth the level of valuation assumptions used to determine each adjustment, the carrying value of the related individual assets as of* March 31, 2025*, and* December 31, 2024*, and the total losses for the periods indicated:

The significant unobservable (Level3) inputs used in the fair value measurement of collateral for collateral-dependent individually evaluated loans are primarily based on the appraised value of collateral adjusted by estimated sales cost and commissions. The Company generally obtains new appraisal reports everytwelve months as appropriate. As the Company’s primary objective in the event of default would be to monetize the collateral to settle the outstanding balance of the loan, less marketable collateral would receive a larger discount. In the current year, the Company used borrower specific collateral discounts with various discount levels.

The fair value of individually evaluated loans is calculated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company doesnot record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent individually evaluated loans are recorded based on the current appraised value of the collateral, a Level2 measurement, or management’s judgment and estimation of value using discounted future cash flows or old appraisals which are then adjusted based on recent market trends, a Level3 measurement.

Loans held for sale are recorded at the lower of cost or fair value upon transfer. Loans held for sale* maybe measured at fair value on a nonrecurring basis when fair value is less than cost. Fair value is generally determined based on available market data for similar loans and therefore, are classified as Level2* measurement.

The significant unobservable inputs (Level3) used in the fair value measurement of other real estate owned (“OREO”) are primarily based on the appraised value of OREO adjusted by estimated sales cost and commissions. The Company applies estimated sales cost and commissions ranging from 3% to 6% of the collateral value of individually evaluated loans, quoted price, or loan sale price of loans held for sale, and appraised value of OREO.

22

Fair value is estimated in accordance with ASC Topic825. Fair value estimates are made at specific points in time, based on relevant market information and information about the financial instrument. These estimates donot reflect any premium or discount that could result from offering for sale atone time the Bank’s entire holdings of a particular financial instrument. Becauseno market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The following table sets forth the carrying and notional amounts and estimated fair value of financial instruments as of* March 31, 2025*, and* December 31, 2024*:

The following tables set forth the level in the fair value hierarchy for the estimated fair values of financial instruments as of* March 31, 2025*, and* December 31, 2024*, excluding financial instruments recorded at fair value on a recurring basis already presented in other tables in this note:

23

13. Goodwill and Other Intangible Assets

Goodwill.Total goodwill was $375.7 million as of March 31, 2025, and remains unchanged compared with* December 31, 2024*. The Company completed its annual goodwill impairment testing and concluded that goodwill wasnot impaired as of* December 31, 2024*. Additionally, the Company reviewed the macroeconomic conditions on its business performance and market capitalization during thefirst three months of2025 and concluded that goodwill wasnot impaired as of* March 31, 2025*.

Core Deposit Intangibles.

The following table presents the gross carrying amount and accumulated amortization of core deposits intangible assets as of* March 31, 2025*, and* December 31, 2024*:

There wereno impairment write-downs included inamortization of core deposit intangibles for thethree months ended* March 31, 2025* and $88 thousand in impairment write-downs for thethree months ended* March 31, 2024*.

The Company amortizes the core deposit intangibles based on the projected useful lives of the related deposits. The amortization expense related to the core deposit intangible assets was $250 thousand and $339 thousand for thethree months ended* March 31, 2025*, and2024, respectively.

The following table presents the estimated aggregate amortization expense of core deposit intangibles for each of the remaining years:

14. Financial Derivatives

The Company doesnot speculate on the future direction of interest rates. As part of the Company’s asset and liability management, however, the Company enters into financial derivatives to seek to mitigate exposure to interest rate risks related to its interest-earning assets and interest-bearing liabilities. The Company believes that these transactions, when properly structured and managed,* mayprovide a hedge against inherent interest rate risk in our assets or liabilities and against risk in specific transactions. In such instances, the Company mayprotect its position through the purchase or sale of interest rate future contracts for a specific cash or interest rate risk position. Other hedging transactions may*be implemented using interest rate swaps, interest rate caps, floors, financial futures, forward rate agreements, and options on futures or bonds. Prior to considering any hedging activities, the Company seeks to analyze the costs and benefits of the hedge in comparison to other viable alternative strategies. All hedges will require an assessment of basis risk and must be approved by the Bancorp or the Bank’s Investment Committee.

24

The Company follows ASC Topic815 that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s Consolidated Balance Sheets and measurement of those financial derivatives at fair value. The accounting treatment of changes in fair value is dependent upon whether ornot a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined usingthird-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there isnot a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

The Company offers various interest rate derivative contracts to its clients. When derivative transactions are executed with its clients, the derivative contracts are offset by paired trades withthird-party financial institutions including with central counterparties (“CCP”). Certain derivative contracts entered with CCPs are settled-to-market daily to the extent the CCP’s rulebooks legally characterize the variation margin as settlement. Derivative contracts are intended to allow borrowers to lock in attractive intermediate and long-term fixed rate financing whilenot increasing the interest rate risk to the Company. These transactions are generallynot linked to specific Company assets or liabilities on the Consolidated Balance Sheets or to forecasted transactions in a hedging relationship and, therefore, are economic hedges. The contracts are marked to market at each reporting period. The changes in fair values of the derivative contracts traded withthird-party financial institutions are expected to be largely comparable to the changes in fair values of the derivative transactions executed with clients throughout the terms of these contracts, except for the credit valuation adjustment component. The Company records credit valuation adjustments on derivatives to properly reflect the variances of credit worthiness between the Company and the counterparties, considering the effects of enforceable master netting agreements and collateral arrangements. As of* March 31, 2025*, and* December 31, 2024*, the Company had outstanding interest rate derivative contracts with certain clients andthird-party financial institutions with a notional amount of $723.5 million and $680.5 million, respectively, with a fair value of $27.9 million and $32.7 million, respectively, for both clients andthird-party financial institutions. As of* March 31, 2025*, and* December 31, 2024*, for borrower swap transactions, there wereno notional amount of interest rate swaps cleared through the CCP.

In* May 2014,Bancorp entered into interest rate swap contracts in the notional amount of $119.1 million for a period often years. The objective of these interest rate swap contracts, which were designated as hedging instruments in cash flow hedges, was to hedge the quarterly interest payments on Bancorp’s $119.1 million of Junior Subordinated Debentures that had been issued tofive* trusts, throughout theten-year period beginning in* June 2014and ending in June 2024,from the risk of variability of these payments resulting from changes in thethree*-month LIBOR interest rate. The Company early terminated these cash flow derivative swaps in2022 and realized a gain of $4.0 million for the year ended* December 31, 2022,and recognized the amount as a reduction of long-term debt interest expense over the remaining life of the swaps on a straight-line basis ending in June 2024.*

As of* March 31, 2025*, the Bank’s outstanding fair value interest rate swap contracts matched to individual fixed-rate commercial real estate loans had a notional amount of $74.8 million with a fair value of $2.5 million and various terms from three toten years. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying commercial real estate loans due to changes in interest rates. The swap contracts are structured so that the notional amounts reduce over time to match the contractual amortization of the underlying loan and allow prepayments with the same pre-payment penalty amounts as the related loan. As of* March 31, 2025and2024*, the ineffective portion of these interest rate swaps wasnot significant.

The Company has designated as a partial-term hedging election of $713.5 million notional with a net fair value loss of $3.6 million as last-of-layer hedge on pools of loans with a notational value of $1.16 billion as of* March 31, 2025*. The loans arenot expected to be affected by prepayment, defaults, or other factors affecting the timing and amount of cash flows under the last-of-layer method. The Company has entered into these pay-fixed and receive1-Month Term SOFR interest rate swaps to convert the last-of-layer*$713.5* million portion of*$1.16* billion fixed rate loan pools in order to reduce the Company’s exposure to higher interest rates for the last-of-layer tranches. As of* March 31, 2025*, the last-of-layer loan tranche had a net fair value gain basis adjustment of $4.9 million. The interest rate swap converts this last-of-layer tranche into a floating rate instrument. The Company’s risk management objective with respect to this last-of-layer interest rate swap is to reduce interest rate exposure as to the last-of-layer tranche.

Interest rate swap contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have a strong credit profile and be approved by the Company’s Board of Directors. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure* may*be reduced by the amount of collateral pledged by the counterparty. Bancorp’s interest rate swaps had been assigned by the counterparties to a derivative clearing organization.

The notional amount and net unrealized loss of the Company’s fair value derivative financial instruments as of* March 31, 2025*, and* December 31, 2024*, were as follows:

25

Included in the total notional amount of $788.3 million of the fair value interest rate contracts entered into with financial counterparties as of* March 31, 2025*, was a notional amount of $572.4 million of interest rate swaps that cleared through the CCP. Applying variation margin payments as settlement to CCP cleared derivative transactions resulted in a reduction in derivative asset fair values of $3.2 million as of* March 31, 2025*.

The Company enters into foreign exchange forward contracts with various counterparties to mitigate the risk of fluctuations in foreign currency exchange rates for foreign exchange certificates of deposit or foreign exchange contracts entered into with our clients. These contracts arenot designated as hedging instruments and are recorded at fair value in our Consolidated Balance Sheets. Changes in the fair value of these contracts as well as the related foreign exchange certificates of deposit and foreign exchange contracts are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded inother assets and gross negative fair values are recorded inother liabilities.

The notional amount and fair value of the Company’s derivative financial instrumentsnot designated as hedging instruments as of* March 31, 2025*, and* December 31, 2024*,not including interest rate swaps cleared through the CCP, were as follows:

15. Balance Sheet Offsetting

Certain financial instruments, including resell and repurchase agreements, securities lending arrangements and derivatives,* maybe eligible for offset in the Consolidated Balance Sheets and/or subject to master netting arrangements or similar agreements. The Company’s securities sold with agreements to repurchase and derivative transactions with upstream financial institution counterparties are generally executed under International Swaps and Derivative Association master agreements that include “right of set-off” provisions. In such cases, there is generally a legally enforceable right to offset recognized amounts and there maybe an intention to settle such amounts on a net basis. Nonetheless, the Company doesnot* generally offset such financial instruments for financial reporting purposes.

Financial instruments that are eligible for offset in the Consolidated Balance Sheets, as of* March 31, 2025*, and* December 31, 2024*, are set forth in the following table:

16. Revenue from Contracts with Clients

The following is a summary of revenue from contracts with clients that are in-scope andnot in-scope under ASC Topic606:

26

The major revenue streams by fee type that are within the scope of ASC Topic606 presented in the above table are described in additional detail below:

Fees and Services Charges on Deposit Accounts

Fees and service charges on deposit accounts include charges for analysis, overdraft, cash checking, ATM, and safe deposit activities executed by our deposit clients, as well as interchange income earned through card payment networks for the acceptance of card-based transactions. Fees earned from our deposit clients are governed by contracts that provide for overall custody and access to deposited funds and other related services and can be terminated at will by either party. Fees received from deposit clients for the various deposit activities are recognized as revenue by the Company once the performance obligations are met.

Wealth Management Fees

The Company employs financial consultants to provide investment planning services for clients including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The fees the Company earns are variable and are generally received monthly by the Company. The Company recognizes revenue for the services performed at quarter end based on actual transaction details received from the broker dealer the Company engages.

Practical Expedients and Exemptions

The Company applies the practical expedient in ASC606-10-50-14 and doesnot disclose the value of unsatisfied performance obligations as the Company’s contracts with clients generally have a term that is less thanone year, are open-ended with a cancellation period that is less thanone year or allow the Company to recognize revenue in the amount to which the Company has the right to invoice.

In addition, given the short-term nature of the contracts, the Company also applies the practical expedient in ASC606-10-32-18 and doesnot adjust the consideration from clients for the effects of a significant financing component, if at contract inception the period between when the entity transfers the goods or services and when the client pays for that good or service isone year or less.

17. Stockholders’*** Equity***

Total equity was $2.87 billion as of* March 31, 2025*, an increase of $19.5 million, from $2.85 billion as of* December 31, 2024*, primarily due to net income of $69.5 million, other comprehensive income of $13.9 million, stock-based compensation of $1.5 million, and proceeds from dividend reinvestment of $0.7 million, offset by purchase of treasury stock of $41.5 million, common stock cash dividends of $23.9 million, and shares withheld related to net share settlement of RSUs of $0.8 million.

Activity in accumulated other comprehensive income/(loss), net of tax, and reclassification out of accumulated other comprehensive income/(loss) for thethree months ended* March 31, 2025*, and* March 31, 2024*, was as follows:

27

18. Stock Repurchase Program

On* February**28,* 2025, the Company completed its* May 2024stock buyback program by repurchasing 876,906 shares at an average cost of $46.83 in thefirst* quarter of2025, for a total of $41.1 million.

19. Subsequent Events

The Company has evaluated the effect of events that have occurred subsequent to* March 31, 2025*, through the date of issuance of the Consolidated Financial Statements, and, based on such evaluation, the Company believes that there have beenno material events during such period that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements.