CATHAY GENERAL BANCORP
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
CATY$64.22+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001437749-25-033885
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001437749-26-015940
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 99 current paragraphs.
50 unchanged; 34 reworded; 15 added; 47 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 23 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
The Company recorded a provision for credit losses of $18.2 million in the first quarter of 2026 compared with $15.5 million in the first quarter of 2025. As of March 31, 2026, the allowance for loan losses, increased $12.9 million to $208.9 million, or 1.03% of total loans, compared to $195.9 million, or 0.97% of total loans as of December 31, 2025.
Current report
Total assets were $24.05 billion as of March 31, 2026, a decrease of $180.9 million, or 0.7%, from $24.23 billion as of December 31, 2025.
Current report
The carrying value of our securities available-for-sale (“AFS”) portfolio was $1.68 billion and $1.66 billion as of March 31, 2026 and December 31, 2025, respectively. The increase in the AFS securities portfolio consists primarily of a net addition of $87.8 million in treasury securities was partially offset by the amortization of existing securities during the three months ended March 31, 2026. The increase was partially offset by the amortization of existing securities. AFS securities represented 7.0% of total assets as of March 31, 2026, compared to 6.8% of total assets as of December 31, 2025.
Current report
The portfolio continues to be concentrated in U.S. government-backed securities, with more than 90% of the AFS investment portfolio invested in U.S. Treasuries and agency mortgage-backed securities issued by Fannie Mae and Freddie Mac with the remainder held in investment-grade securities. There was no allowance for credit losses provided against the AFS investment securities as of both March 31, 2026 and December 31, 2025. Additionally, there were no credit losses recognized in earnings during the three months ended March 31, 2026, and December 31, 2025.
Current report
The Company actively manages the investment portfolio in the context of asset/liability objectives, interest rate risk, and market conditions. These evaluations may result in changes to portfolio size, composition, or hedging strategies, including adjustments to the mix of securities classified as AFS.
Current report
During the quarter, the Company recorded a $15.7 million impairment loss related to its decision to sell certain AFS investment securities as part of a portfolio repositioning initiative designed to improve yield while maintaining the portfolio’s overall duration and credit quality. These securities, with a book value of $210.6 million, were subsequently sold in April 2026, resulting in a realized loss of $15.7 million. The AFS portfolio had an effective duration of 1.9 years at March 31, 2026, compared with 2.0 years at December 31, 2025.
Current report
Allowance for Credit Losses
Current report
The increase in the ACL during the quarter was driven primarily by changes in the quantitative component of the reserve. Quantitative reserves increased due to higher modeled lifetime loss estimates, reflecting updates to certain model assumptions intended to better capture the portfolio’s historical loss experience across economic cycles. These updates resulted in higher expected credit losses across several loan categories.
Current report
The qualitative component of the allowance was relatively stable in total; however, qualitative adjustments shifted across portfolios based on management’s assessment of credit conditions and risk trends. In particular, additional qualitative reserves were applied to certain commercial real estate segments, including office and construction, to reflect market‑specific considerations not fully captured in the model’s baseline economic forecasts. These increases were offset by reductions in qualitative reserves in other portfolios, resulting in an overall qualitative reserve level that was broadly unchanged from the prior quarter.
Current report
The ACL is also influenced by the macroeconomic forecasts used in the Company’s CECL model. The March 31, 2026 estimate incorporated multiple forward‑looking economic scenarios obtained from a reputable third‑party forecaster. These scenarios reflect a range of potential economic outcomes and include a baseline view of expected conditions, along with more optimistic and more adverse alternatives. Management applies judgment in determining how these scenarios are incorporated into the allowance estimate, taking into account prevailing economic uncertainty and risks.
Current report
To illustrate the sensitivity of the allowance to changes in economic assumptions, management estimates that applying a 100% weighting to the downside scenario would have increased the ACL by approximately $70.7 million as of March 31, 2026. This analysis is intended to demonstrate the directional impact of more adverse economic conditions and should not be interpreted as a forecast of future allowance levels.
Current report
Total deposits were $20.68 billion as of March 31, 2026, a decrease of $218.5 million, or 1.0% from $20.89 billion as of December 31, 2025.
Current report
In 2023, the FDIC issued a final rule implementing a special assessment for certain banks to recover losses to the DIF associated with protecting uninsured depositors of Silicon Valley Bank and Signature Bank upon their failure in March 2023. The Company paid its eighth and final quarterly special assessment during the three months ended March 31, 2026, and its remaining accrual for its estimated special assessment liability is zero as of March 31, 2026. The Company will continue to monitor the estimated loss attributable to the protection of uninsured depositors at Silicon Valley Bank and Signature Bank, which could impact the amount of its accrued liability. In December 2025, the FDIC issued an interim final rule outlining a process for a potential offset to regular quarterly deposit insurance assessments for banks subject to the special assessment if the special assessment amount collected ultimately exceeds losses to the DIF. The FDIC plans to provide additional updates on future offsets or a one-time final shortfall special assessment collection, if any, through future invoices.
Current report
Our most significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations.
Current report
For additional information regarding critical accounting estimates, see the section titled “Critical Accounting Policies” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2025.
Removed paragraphs (47)
Previous report
The following discussion is based on the assumption that the reader has access to and has read the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Previous report
Critical accounting policies involve significant judgments, assumptions and uncertainties and are essential to understanding the Company’s results of operations and financial condition. Management of the Company considers the following to be critical accounting policies:
Previous report
Accounting for the allowance for loan losses involves significant judgments and assumptions by management, which have a material impact on, among other things, the carrying value of net loans. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances as described in “Allowance for Credit Losses” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the 2024 Form 10-K. For more information, please also see Note 2 to the Company’s unaudited Consolidated Financial Statements.
Previous report
Other Legislative Updates
Previous report
In June 2025, California enacted Senate Bill No. 132 (“SB 132”), requiring banks and financial institutions to adopt a single sales factor for income apportionment, effective for tax years beginning on or after January 1, 2025. Prior to SB 132, financial institutions had been required to use an equally weighted three-factor apportionment formula, which considered property, payroll and sales equally in apportioning income for California tax purposes.
Previous report
In July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or the “GENIUS Act,” was signed into law, establishing a federal licensing and supervisory framework for payment stablecoins and their issuers. The GENIUS Act may accelerate and increase the competition that non-traditional financial institutions pose to banks’ payment services, but may also create opportunities for banks to hold stablecoin reserve assets, custody stablecoins, or issue stablecoins. Several key provisions of the GENIUS Act require federal regulatory agencies to adopt implementing regulations, and the Act will take effect the earlier of 18 months after its enactment or 120 days after the agencies issue final implementing regulations.
Previous report
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, introducing significant tax changes. The OBBBA extends or makes permanent various tax provisions that were originally enacted in the 2017 Tax Cuts and Jobs Act and were set to expire at the end of this year. The OBBBA features modified versions of individual and business tax relief proposals, and other new tax relief measures. In addition, it includes various revenue-raising measures, including changes to certain Inflation Reduction Act clean energy tax credits and various limits on business and individual tax deductions, that are intended to offset part of the cost of the legislation. The Company is currently evaluating the impact of the OBBBA on its business and consolidated financial statements.
Previous report
Net Income
Previous report
Net income for the quarter ended September 30, 2025, was $77.7 million, an increase of $10.2 million, or 15.1%, compared to net income of $67.5 million for the same quarter a year ago. Diluted earnings per share for the quarter ended September 30, 2025, was $1.13 per share compared to $0.94 per share for the same quarter a year ago.
Previous report
Return on average stockholders’ equity was 10.60% and return on average assets was 1.29% for the quarter ended September 30, 2025, compared to a return on average stockholders’ equity of 9.50% and a return on average assets of 1.15% for the same quarter a year ago.
Previous report
The Company recorded a provision for credit losses of $28.7 million in the third quarter of 2025 compared with $14.5 million in the third quarter of 2024. Provision for credit losses of $28.7 million for the third quarter of 2025 included an additional reserve of $9.1 million for two movie theatre loans and $3.8 million from a change in the CECL model. As of September 30, 2025, the allowance for credit losses, comprised of the reserve for loan losses and the reserve for unfunded loan commitments, increased $25.1 million to $196.5 million, or 0.98% of gross loans, compared to $171.4 million, or 0.88% of gross loans, as of December 31, 2024. The change in the allowance for credit losses during the nine months ended September 30, 2025, consisted of a $55.4 million provision for credit losses, and $30.4 million in net charge-offs.
Previous report
As a result of the enactment of the single sales factor apportionment by the State of California in June 2025, the Company recorded a $3.4 million write down of its deferred tax assets during the nine months ended September 30, 2025.
Previous report
Year-to-Date Statement of Operations Review
Previous report
Net Income
Previous report
Net income for the nine months ended September 30, 2025, was $224.6 million, an increase of $18.8 million, or 9.1%, compared to net income of $205.8 million for the same period a year ago. Diluted earnings per share for the nine months ended September 30, 2025, was $3.21 per share compared to $2.83 per share for the same period a year ago.
Previous report
Return on average stockholders’ equity was 10.39% and return on average assets was 1.28% for the nine months ended September 30, 2025, compared to a return on average stockholders’ equity of 9.84% and a return on average assets of 1.18% for the same period a year ago.
Previous report
Total assets were $24.07 billion as of September 30, 2025, an increase of $1.02 billion, or 4.4%, from $23.05 billion as of December 31, 2024.
Previous report
Debt securities available-for-sale are measured at fair value and subject to impairment testing. When an available-for-sale debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, (1) recognize an allowance for credit losses by a charge to earnings for the credit-related component (if any) of the decline in fair value, and (2) recognize in other comprehensive income (loss) any non-credit related components of the fair value change. If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security.
Previous report
For available-for-sale (“AFS”) debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.
Previous report
In making this assessment, management considers the extent to which fair value is less than amortized cost, the payment structure of the security, failure of the issuer of the security to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. Any fair value changes that have not been recorded through an allowance for credit losses is recognized in other comprehensive income.
Previous report
Losses are charged against the allowance when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Changes in the allowance for credit losses are recorded as provision for credit loss expense.
Previous report
The amortized cost of the Company’s AFS debt securities exclude accrued interest, which is included in “accrued interest income” on the Consolidated Balance Sheets. The Company has made an accounting policy election not to measure an allowance for credit losses for accrued interest receivables on AFS debt securities since the Company timely reverses any previously accrued interest when the debt security remains in default for an extended period. As each AFS debt security has a unique security structure, where the accrual status is clearly determined when certain criteria listed in the terms are met, the Company assesses the default status of each security as defined by the debt security’s specific security structure. At September 30, 2025, no AFS debt securities were in default.
Previous report
In the current period, management evaluated the securities in an unrealized loss position and determined that their unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. Accordingly, we determined the unrealized losses were not credit-related and recognized the unrealized losses in "other comprehensive income/(loss)" in stockholders' equity. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any impaired securities before recovery of their amortized cost.
Previous report
Securities available-for-sale represented 6.8% of total assets as of September 30, 2025, compared to 6.7% of total assets as of December 31, 2024. Securities available-for-sale were $1.64 billion as of September 30, 2025, compared to $1.55 billion as of December 31, 2024.
Previous report
Securities available-for-sale having a carrying value of $19.5 million as of September 30, 2025, and $17.8 million as of December 31, 2024, were pledged to secure public deposits and other borrowings.
Previous report
The Bank maintains the allowance for credit losses at a level that the Bank’s management considers appropriate to cover the estimated and known risks in the loan portfolio and off-balance sheet unfunded credit commitments. Allowance for credit losses is comprised of the allowance for loan losses and for off-balance sheet unfunded credit commitments. With this risk management objective, the Bank’s management has an established monitoring system that is designed to identify individually evaluated and potential problem loans, and to permit periodic evaluation of impairment and the appropriate level of the allowance for credit losses in a timely manner.
Previous report
In addition, the Company’s Board of Directors has established a written credit policy that includes a credit review and control system that it believes should be effective in ensuring that the Bank maintains an appropriate allowance for credit losses. The Board of Directors provides oversight for the allowance evaluation process, including quarterly evaluations, and determines whether the allowance is appropriate to absorb losses in the credit portfolio. The determination of the amount of the allowance for credit losses and the provision for credit losses are based on management’s current judgment about the credit quality of the loan portfolio and take into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for credit losses. The nature of the process by which the Bank determines the appropriate allowance for credit losses requires the exercise of considerable judgment. Additions or reductions to the allowance for credit losses are made by charges or credits to the provision for credit losses. While management utilizes its business judgment based on the information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors, many of which are beyond the Bank’s control, including but not limited to the performance of the Bank’s loan portfolio, the economy and market conditions, changes in interest rates, and the view of the regulatory authorities toward loan classifications. Identified credit exposures that are determined to be uncollectible are charged against the allowance for credit losses. Recoveries of previously charged off amounts, if any, are credited to the allowance for credit losses. A weakening of the economy or other factors that adversely affect asset quality could result in an increase in the number of delinquencies, bankruptcies, or defaults, and a higher level of non-performing assets, net charge-offs, and provision for credit losses.
Previous report
The allowance for loan losses was $186.6 million and the allowance for off-balance sheet unfunded credit commitments was $9.9 million at September 30, 2025, which represented the amount estimated by management to be appropriate to absorb expected credit losses inherent in the loan portfolio, including unfunded credit commitments. The allowance for credit losses, which is the sum of the allowances for loan losses and for off-balance sheet unfunded credit commitments, was $196.5 million at September 30, 2025, compared to $171.4 million at December 31, 2024. The allowance for credit losses represented 0.98% of period-end gross loans and 118.56% of non-performing loans at September 30, 2025. The comparable ratios were 0.88% of period-end gross loans and 98.98% of non-performing loans at December 31, 2024.
Previous report
Critical Accounting Policies and Estimates
Previous report
Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. We identify critical policies and estimates as those that require management to make particularly difficult, subjective, and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. We have identified the policy and estimates related to the allowance for credit losses on loans as a critical accounting policy.
Previous report
Expected Credit Losses Estimate for Loans
Previous report
The allowance for credit losses 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. The amortized cost basis of loans does not include interest receivable, which is included in "Other assets" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statement of Operations and Comprehensive Income is a combination of the provision for loan losses and the provision for unfunded loan commitments.
Previous report
Under the CECL methodology, expected credit losses reflect losses over the remaining contractual life of an asset, considering the effect of prepayments and available information about the collectability of cash flows, including information about relevant historical experience, current conditions, and reasonable and supportable forecasts of future events and circumstances. Thus, the CECL methodology incorporates a broad range of information in developing credit loss estimates. For further information regarding the calculation of the allowance for credit losses on loans held for investment using the CECL methodology, see Note 8 to the unaudited Consolidated Financial Statements contained in "Item 1. Consolidated Financial Statements."
Previous report
In calculating our allowance for credit losses in the third quarter of 2025, changes to the qualitative reserves, as well as an increase in individually evaluated reserves accounted for the increased allowance. Our methodology and framework along with the 8-quarter reasonable and supportable forecast period and the 4-quarter reversion period have remained consistent since the implementation of CECL. Certain management assumptions are reassessed every quarter based on current expectations for credit losses, while other assumptions are assessed and updated on at least an annual basis.
Previous report
The use of different economic forecasts, whether based on different scenarios, the use of multiple or single scenarios, or updated economic forecasts and scenarios, can change the outcome of the calculations. In addition to the economic forecasts, there are numerous components and assumptions that are integral to the overall estimation of allowance for credit losses.
Previous report
The determination of the allowance for credit losses is complex and dependent on numerous models, assumptions, and judgments made by management. Management's current expectation for credit losses as quantified in the allowance for credit losses, considers the impact of assumptions and is reflective of historical credit experience, economic forecasts viewed to be reasonable and supportable, current loan composition, and relative credit risks known as of the balance sheet date.
Previous report
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 and three smaller portfolios are evaluated using a simplified loss-rate method that calculates lifetime expected credit losses for the respective pools (simplified approach). The six 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 the six loan portfolios from the fourth quarter of 2007 through the fourth quarter of 2024. Loss given default rates are computed based on the charge-offs recognized and then applied to the expected exposure at default of defaulted loans starting with the fourth quarter of 2007 through the third quarter of 2025. 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.
Previous report
The Company’s CECL methodology utilizes an eight-quarter reasonable and supportable (“R&S”) forecast period, and a four-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 Scenario 1 – Upside – 10th Percentile and the Alternative Scenario 3 – Downside – 90th Percentile forecasts. After the R&S period, the Company will revert straight-line for the four-quarter reversion period to the long-term loss rates for each of the six portfolios of loans. The contractual term excludes renewals and modifications but includes pre-approved extensions and prepayment assumptions where applicable.
Previous report
Our allowance for credit losses is sensitive to a number of inputs, including macroeconomic forecast assumptions and credit rating migrations during the period. Our macroeconomic forecasts used in determining the September 30, 2025, allowance for credit losses consisted of three scenarios as provided by a reputable third-party economic forecaster. This quarter the scenario weighting remains the same as the macroeconomic forecasts continue to project marginally strong growth while still capturing several of the challenges facing the economy. The baseline scenario reflects modest ongoing GDP growth in spite of a slight rise in the unemployment rate, starting from 4.4% in the fourth quarter of 2025, peaking at 4.8% in the fourth quarter of 2026, and decreasing back down to 4.7% by the end of the R&S period. The upside scenario assumes the impacts of tariffs and deportations on the economy are less than expected and reflects higher GDP growth and lower unemployment rates with the stronger economy resulting in inflation and interest rates a bit higher than in the baseline scenario. The downside scenario assumes the impacts of tariffs, deportations and political tensions on the economy are worse than expected and contemplates a recession as rising inflation prompts the Federal Reserve to raise the fed funds rate during the fourth quarter of 2025. This results in negative GDP growth for three quarters peaking at 4.0% in the second quarter of 2026, rising unemployment that peaks at 8.4% in the fourth quarter of 2026, a decline in CRE prices of 20.4% and a decline in residential home prices of 10.4% during the forecast period.
Previous report
Keeping all other factors constant, we estimate that if we had applied 100% weighting to the downside scenario, the allowance for credit losses as of September 30, 2025, would have been approximately $106.2 million higher. This estimate is intended to reflect the sensitivity of the allowance for credit losses to changes in our scenario weights and is not intended to be indicative of future changes in the allowance for credit losses.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Reworded paragraphs (34)
Previous wording
The discussion and analysis of the Company’s financial condition and results of operations are based upon its unaudited Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these Consolidated Financial Statements requires management 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 may differ from these estimates under different assumptions or conditions.
Current wording
The following discussion and analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and are based upon its unaudited Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these Consolidated Financial Statements requires management 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 may differ from these estimates under different assumptions or conditions.
Previous wording
Net interest income before provision for credit losses increased $20.4 million, or 12.1%, to $189.6 million during the third quarter of 2025, compared to $169.2 million during the same quarter a year ago. The increase was due primarily to a decrease in interest expense from deposits, offset by a small decrease in interest income from loans and securities.
Current wording
Net interest income before provision for credit losses increased $17.6 million, or 10.0%, to $194.2 million during the first quarter of 2026, compared to $176.6 million during the same quarter a year ago. The increase was due primarily to a decrease in interest expense from deposits, offset by a small decrease in interest in deposits with other banks.
Previous wording
The net interest margin was 3.31% for the third quarter of 2025 compared to 3.04% for the third quarter of 2024.
Current wording
The net interest margin was 3.43% for the first quarter of 2026 compared to 3.25% for the first quarter of 2025.
Previous wording
For the third quarter of 2025, the yield on average interest-earning assets was 5.84%, the cost of funds on average interest-bearing liabilities was 3.32%, and the average cost of interest-bearing deposits was 3.28%. In comparison, for the third quarter of 2024, the yield on average interest-earning assets was 6.10%, the cost of funds on average interest-bearing liabilities was 3.99%, and the average cost of interest-bearing deposits was 3.95%. The decrease in the yield on average interest-bearing liabilities and on average interest-earning assets resulted mainly from lower interest rates on deposits and lower interest rates on loans and securities, respectively. The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 2.52% for the quarter ended September 30, 2025, compared to 2.11% for the same quarter a year ago.
Current wording
For the first quarter of 2026, the yield on average interest-earning assets was 5.70%, the cost of funds on average interest-bearing liabilities was 2.99%, and the average cost of interest-bearing deposits was 2.96%. In comparison, for the first quarter of 2025, the yield on average interest-earning assets was 5.89%, the cost of funds on average interest-bearing liabilities was 3.46%, and the average cost of interest-bearing deposits was 3.43%. The decrease in the yield on average interest-bearing liabilities and on average interest-earning assets resulted mainly from lower interest rates on deposits and lower interest rates on loans and securities, respectively. The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 2.71% for the quarter ended March 31, 2026, compared to 2.43% for the same quarter a year ago.
Previous wording
Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wealth management fees, and other sources of fee income, was $21.0 million for the third quarter of 2025, an increase of $0.6 million, or 2.9%, compared to $20.4 million for the third quarter of 2024. The increase was primarily due to an increase of $0.5 million in other operating income related to a legal settlement when compared to the same quarter a year ago.
Current wording
Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wealth management fees, and other sources of fee income, was $20.7 million for the first quarter of 2026, an increase of $9.5 million, or 84.8%, compared to $11.2 million for the first quarter of 2025. The increase was primarily due to an equity securities gain of $17.3 million in first quarter of 2026 compared to a loss of $4.2 million in the first quarter of 2025 for a net increase of $21.5 million gain from equity securities and an increase of $1.1 million in derivative fees, offset by an impairment loss of $15.7 million on available-for-sale investment securities in connection with the Company's decision to sell certain impaired securities within that portfolio when compared to the same quarter a year ago.
Previous wording
Non-interest expense decreased $8.8 million, or 9.1%, to $88.1 million in the third quarter of 2025 compared to $96.9 million in the same quarter a year ago. The decrease in non-interest expense in the third quarter of 2025 was primarily due to a decrease of $11.9 million in amortization expense of investments in low-income housing and alternative energy partnerships, offset by an increase of $2.6 million in salaries and employee benefits and an increase of $1.0 million in computer and equipment expense when compared to the same quarter a year ago. The efficiency ratio was 41.84% in the third quarter of 2025 compared to 51.11% for the same quarter a year ago.
Current wording
Non-interest expense increased $1.0 million, or 1.2%, to $86.7 million in the first quarter of 2026 compared to $85.7 million in the same quarter a year ago. The increase in non-interest expense in the first quarter of 2026 was primarily due to an increase of $3.1 million in salaries and employee benefits, an increase of $1.3 million in other real estate owned expense, offset by a decrease of $2.3 million in amortization expense of investments in low-income housing and alternative energy partnerships, and $1.0 million in FDIC and State assessments when compared to the same quarter a year ago. The efficiency ratio was 40.35% in the first quarter of 2026 compared to 45.60% for the same quarter a year ago.
Previous wording
The effective tax rate for the third quarter of 2025 was 17.2% compared to 13.6% for the third quarter of 2024. The effective tax rate includes the impact of low-income housing tax credits in 2025 and solar tax credits and low-income housing tax credits in 2024.
Current wording
The effective tax rate for the first quarter of 2026 was 21.0% compared to 19.8% for the first quarter of 2025. The effective tax rate includes the impact of low-income housing tax credits in 2025.
Previous wording
Gross loans held for investment were $20.10 billion at September 30, 2025, an increase of $728.8 million, or 3.8%, from $19.38 billion at December 31, 2024. The increase was primarily due to an increase of $451.1 million, or 4.5%, in commercial real estate loans, an increase of $126.0 million, or 2.2% in residential mortgage loans, an increase of $114.9 million, or 3.7%, in commercial loans, and an increase of $36.6 million, or 11.4% in real estate construction loans.
Current wording
Gross loans held for investment were $20.17 billion at March 31, 2026, an increase of $27.4 million, or 0.1%, from $20.15 billion at December 31, 2025. The increase was primarily due to an increase of $98.0 million, or 3.1%, in commercial loans, an increase of $24.0 million, or 0.2%, in commercial real estate loans, and an increase of $6.7 million, or 3.0% in equity lines, offset by a decrease of $53.6 million, or 0.9% in residential mortgage loans, and a decrease of $48.5 million, or 14.4% in real estate construction loans.
Previous wording
The ratio of non-performing assets to total assets was 0.83% as of September 30, 2025, compared to 0.85% as of December 31, 2024. Total non-performing assets increased $2.4 million, or 1.2% to $198.7 million at September 30, 2025, compared to $196.3 million at December 31, 2024, primarily due to an increase of $9.9 million, or 43.0%, in other real estate owned, offset by a decrease of $3.9 million, or 97.3%, in accruing loans past due 90 days or more, and a decrease of $3.6 million, or 2.1%, in non-accrual loans.
Current wording
The ratio of non-performing assets to total assets was 0.53% as of March 31, 2026, compared to 0.59% as of December 31, 2025. Total non-performing assets decreased $15.8 million, or 11.0% to $127.9 million at March 31, 2026, compared to $143.7 million at December 31, 2025, primarily due to a decrease of $23.4 million, or 20.8%, in non-accrual loans, offset by, an increase of $4.5 million, or 449.1%, in accruing loans past due 90 days or more, and an increase of $3.1 million, or 10.2%, in other real estate owned.
Previous wording
As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets were 0.99% and 1.01% as of September 30, 2025, and December 31, 2024, respectively. The non-performing loan portfolio coverage ratio, defined as the allowance for credit losses to non-performing loans, increased to 118.56% as of September 30, 2025, from 98.98% as of December 31, 2024.
Current wording
As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets were 0.63% and 0.71% as of March 31, 2026, and December 31, 2025, respectively. The non-performing loan portfolio coverage ratio, defined as the allowance for credit losses to non-performing loans, increased to 237.50% as of March 31, 2026, from 183.79% as of December 31, 2025.
Previous wording
As of September 30, 2025, total non-accrual loans were $165.6 million, a decrease of $3.6 million, or 2.1%, from $169.2 million at December 31, 2024, and an increase of $2.8 million, or 1.7%, from $162.8 million at September 30, 2024. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information, less cost to sell. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly.
Current wording
As of March 31, 2026, total non-accrual loans were $89.0 million, a decrease of $23.4 million, or 20.8%, from $112.4 million at December 31, 2025, and a decrease of $65.6 million, or 42.4%, from $154.6 million at March 31, 2025. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information, less cost to sell. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly.
Previous wording
For non-accrual loans, the amounts previously charged-off represent 13.0% of the contractual balances for non-accrual loans as of September 30, 2025, and 11.7% as of December 31, 2024. As of September 30, 2025, $131.9 million, or 79.7%, of the $165.6 million of non-accrual loans were secured by real estate compared to $109.4 million, or 64.7%, of the $169.2 million of non-accrual loans that were secured by real estate as of December 31, 2024. The Bank generally seeks to obtain current appraisals, sales contracts, or other available market price information intended to provide updated factors in evaluating potential loss.
Current wording
For non-accrual loans, the amounts previously charged-off represent 7.7% of the contractual balances for non-accrual loans as of March 31, 2026, and 14.4% as of December 31, 2025. As of March 31, 2026, $81.3 million, or 91.4%, of the $89.0 million of non-accrual loans were secured by real estate compared to $90.9 million, or 80.8%, of the $112.4 million of non-accrual loans that were secured by real estate as of December 31, 2025. The Bank generally seeks to obtain current appraisals, sales contracts, or other available market price information intended to provide updated factors in evaluating potential loss.
Previous wording
The allowance for loan losses to non-performing loans was 112.61% as of September 30, 2025, compared to 93.39% as of December 31, 2024. The increase was due primarily to a net increase in the allowance for loan losses.
Current wording
The allowance for loan losses to non-performing loans was 220.95% as of March 31, 2026, compared to 172.82% as of December 31, 2025. The increase was due primarily to a net increase in the allowance for loan losses and a decrease in non-accrual loans.
Previous wording
As of September 30, 2025, construction loans of $246.8 million were disbursed with pre-established interest reserves of $37.6 million, compared to $227.9 million with pre-established interest reserves of $31.3 million at December 31, 2024. The balance for construction loans with interest reserves that have been extended was $3.2 million with pre-established interest reserves of $512 thousand at September 30, 2025, compared to $4.2 million with pre-established interest reserves of $53 thousand at December 31, 2024. Land loans of $9.2 million were disbursed with pre-established interest reserves of $1.0 million at September 30, 2025, compared to no land loans disbursements with pre-established interest reserves at December 31, 2024. There were no land loans with interest reserves which have been extended as of September 30, 2025, and December 31, 2024.
Current wording
As of March 31, 2026, construction loans of $197.1 million were disbursed with pre-established interest reserves of $29.1 million, compared to $225.9 million with pre-established interest reserves of $34.0 million at December 31, 2025. There were no balances on construction loans with interest reserves that have been extended with pre-established interest reserves of $380 thousand at March 31, 2026, compared to a balance of $3.3 million with pre-established interest reserves of $95 thousand at December 31, 2025. Land loans of $18.1 million were disbursed with pre-established interest reserves of $1.5 million at March 31, 2026, compared to land loans of $15.3 million with pre-established interest reserves of $1.3 million at December 31, 2025. There were no land loans with interest reserves which have been extended as of March 31, 2026, and December 31, 2025.
Previous wording
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 has no specific industry concentration, and generally our loans are collateralized with real property or other pledged collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the collateral.
Current wording
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 has no significant industry concentration, and generally our loans are collateralized with real property or other pledged collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the collateral.
Previous wording
The federal banking regulatory agencies issued final guidance on December 6, 2006, regarding risk management practices for financial institutions with high or increasing concentrations of commercial real estate (“CRE”) loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: (1) total reported loans for construction, land development, and other land represent 100% of the institution’s total risk-based capital, and (2) both total CRE loans represent 300% or more of the institution’s total risk-based capital and the institution’s CRE loan portfolio has increased 50% or more within the last thirty-six months. The Bank’s loans for construction, land development, and other land represented 15% of the Bank’s total risk-based capital as of September 30, 2025, and December 31, 2024. Total CRE loans represented 290% of total risk-based capital as of September 30, 2025, and 289% as of December 31, 2024, which were within the Bank’s internal limit of 400%, of total capital.
Current wording
The federal banking regulatory agencies issued final guidance on December 6, 2006, regarding risk management practices for financial institutions with high or increasing concentrations of commercial real estate (“CRE”) loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: (1) total reported loans for construction, land development, and other land represent 100% of the institution’s total risk-based capital, and (2) both total CRE loans represent 300% or more of the institution’s total risk-based capital and the institution’s CRE loan portfolio has increased 50% or more within the last thirty-six months. The Bank’s loans for construction, land development, and other land represented 12% of the Bank’s total risk-based capital as of March 31, 2026, and 14% as of December 31, 2025. Total CRE loans represented 278% of total risk-based capital as of March 31, 2026, and 287% as of December 31, 2025, which were within the Bank’s internal limit of 400%, of total capital.
Previous wording
The Company’s total CREC loan portfolio is diversified by property type with an average CREC loan size of $1.9 million as of September 30, 2025, and December 31, 2024. The following table summarizes the Company’s total CREC loans by property type as of September 30, 2025, and December 31, 2024:
Current wording
The Company’s total CREC loan portfolio is diversified by property type with an average CREC loan size of $2.0 million as of March 31, 2026, and December 31, 2025. The following table summarizes the Company’s total CREC loans by property type as of March 31, 2026, and December 31, 2025:
Previous wording
The weighted-average loan-to-value (“LTV”) ratio of the total CREC loan portfolio was 49% as of September 30, 2025, and December 31, 2024. Approximately 86% and 85% of total CREC loans had an LTV ratio of 60% or lower as of September 30, 2025, and December 31, 2024, respectively.
Current wording
The weighted-average loan-to-value (“LTV”) ratio of the total CREC loan portfolio was 49% as of March 31, 2026, and December 31, 2025. Approximately 86% of total CREC loans had an LTV ratio of 60% or lower as of March 31, 2026, and December 31, 2025.
Previous wording
There were 46% and 47% of total CREC loans concentrated in California as of September 30, 2025, and December 31, 2024, respectively. Changes in California’s economy and real estate values could have a significant impact on the collectability of these loans and the required level of allowance for loan losses.
Current wording
There were 45% and 46% of total CREC loans concentrated in California as of March 31, 2026, and December 31, 2025, respectively. Changes in California’s economy and real estate values could have a significant impact on the collectability of these loans and the required level of allowance for loan losses.
Previous wording
The Company focuses on providing financing to experienced real estate investors and developers who have moderate levels of leverage, many of whom are long-time customers of the Bank. CRE loans totaled $7.60 billion as of September 30, 2025, compared with $7.23 billion as of December 31, 2024, and accounted for 38% and 37% of total loans held-for-investment, not including loans held for sale, as of September 30, 2025, and December 31, 2024, respectively. Interest rates on CRE loans may be fixed or variable. As of September 30, 2025, 20% and 38% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2024, 25% and 37% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. Loans are underwritten with conservative standards for cash flows, debt service coverage and LTV.
Current wording
The Company focuses on providing financing to experienced real estate investors and developers who have moderate levels of leverage, many of whom are long-time customers of the Bank. CRE loans totaled $7.64 billion as of March 31, 2026, compared with $7.61 billion as of December 31, 2025, and accounted for 38% of total loans held-for-investment, not including loans held for sale, as of March 31, 2026, and December 31, 2025. Interest rates on CRE loans may be fixed or variable. As of March 31, 2026, 21% and 40% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2025, 21% and 40% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. Loans are underwritten with conservative standards for cash flows, debt service coverage and LTV.
Previous wording
Owner-occupied properties comprised 24% of the CRE loans as of both September 30, 2025, and December 31, 2024. The remainder were non-owner-occupied properties, where 50% or more of the debt service for the loan is typically provided by rental income from an unaffiliated third party.
Current wording
Owner-occupied properties comprised 25% of the CRE loans as of March 31, 2026, and December 31, 2025. The remainder were non-owner-occupied properties, where 50% or more of the debt service for the loan is typically provided by rental income from an unaffiliated third party.
Previous wording
The multifamily residential loan portfolio is largely comprised of loans secured by residential properties with five or more units. Multifamily residential loans totaled $2.81 billion as of September 30, 2025, compared with $2.72 billion as of December 31, 2024, and accounted for 14% of total loans held-for investment, not including loans held for sale, as of September 30, 2025, and December 31, 2024. The Company offers a variety of first lien mortgages, including fixed and variable-rate loans. As of September 30, 2025, 24% and 38% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2024, 18% and 41% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively.
Current wording
The multifamily residential loan portfolio is largely comprised of loans secured by residential properties with five or more units. Multifamily residential loans totaled $2.87 billion as of March 31, 2026, compared with $2.89 billion as of December 31, 2025, and accounted for 14% of total loans held-for investment, not including loans held for sale, as of March 31, 2026, and December 31, 2025. The Company offers a variety of first lien mortgages, including fixed and variable-rate loans. As of March 31, 2026, 22% and 40% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2025, 24% and 36% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively.
Previous wording
Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $425.6 million as of September 30, 2025, compared with $403.1 million as of December 31, 2024, and accounted for 2% of total loans held-for-investment, not including loans held for sale, as of September 30, 2025, and December 31, 2024. Construction loan exposure was made up of $356.2 million in outstanding loans, plus $242.6 million in unfunded commitments as of September 30, 2025, compared with $319.6 million in outstanding loans, plus $186.5 million in unfunded commitments as of December 31, 2024. Land loans totaled $69.4 million as of September 30, 2025, compared with $83.4 million as of December 31, 2024.
Current wording
Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $360.7 million as of March 31, 2026, compared with $408.0 million as of December 31, 2025, and accounted for 2% of total loans held-for-investment, not including loans held for sale, as of March 31, 2026, and December 31, 2025. Construction loan exposure was made up of $289.0 million in outstanding loans, plus $199.8 million in unfunded commitments as of March 31, 2026, compared with $337.6 million in outstanding loans, plus $235.3 million in unfunded commitments as of December 31, 2025. Land loans totaled $71.7 million as of March 31, 2026, compared with $70.4 million as of December 31, 2025.
Previous wording
Our critical accounting policies and estimates are described inItem 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2024 Form 10-K. For more information, please also see Note 2 to the Company’s unaudited Consolidated Financial Statements.
Current wording
Our methodology, policies and estimates on allowance for credit losses for loans are described inItem 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Form 10-K. For more information, please also see Note 6 to the Company’s unaudited Consolidated Financial Statements.
Previous wording
The Company calculates its uninsured deposits based on the methodologies and assumptions used for regulatory reporting. Total uninsured deposits were $9.96 billion as of September 30, 2025, increasing approximately $525.5 million, from $9.43 billion as of December 31, 2024. Excluding $856.4 million in collateralized deposits, the uninsured and uncollateralized deposits of $9.10 billion was 44.4% of total deposits as of September 30, 2025. Our unused borrowing capacity from the Federal Home Loan Bank as of September 30, 2025, was $7.50 billion and unpledged securities at September 30, 2025, was $1.62 billion. These sources of available liquidity, including cash and short-term investments, were more than 100% of uninsured and uncollateralized deposits as of September 30, 2025.
Current wording
The Company calculates its uninsured deposits based on the methodologies and assumptions used for regulatory reporting. Total uninsured deposits were $10.08 billion as of March 31, 2026, decreasing approximately $116.5 million, from $10.19 billion as of December 31, 2025. Excluding $865.3 million in collateralized deposits, the uninsured and uncollateralized deposits of $9.21 billion was 44.6% of total deposits as of March 31, 2026. Our unused borrowing capacity from the Federal Home Loan Bank as of March 31, 2026, was $7.95 billion and unpledged securities at March 31, 2026, was $1.66 billion. These sources of available liquidity, including cash and short-term investments, were more than 100% of uninsured and uncollateralized deposits as of March 31, 2026.
Previous wording
Total equity was $2.90 billion as of September 30, 2025, an increase of $56.6 million, from $2.85 billion as of December 31, 2024, primarily due to net income of $224.6 million, other comprehensive income of $25.9 million, stock-based compensation of $4.7 million, proceeds from dividend reinvestment of $2.0 million, and stock issued to directors of $1.0 million, offset by, purchase of treasury stock of $127.9 million, common stock cash dividends of $70.9 million, and shares withheld related to net share settlement of RSUs of $2.8 million.
Current wording
Total equity was $2.99 billion as of March 31, 2026, an increase of $61.3 million, from $2.93 billion as of December 31, 2025, primarily due to net income of $86.9 million, other comprehensive income of $10.2 million, stock-based compensation of $1.6 million, and proceeds from dividend reinvestment of $0.7 million, offset by common stock cash dividends of $25.4 million, and purchase of treasury stock of $12.6 million.
Previous wording
The following table summarizes changes in total equity for the nine months ended September 30, 2025:
Current wording
The following table summarizes changes in total equity for the three months ended March 31, 2026:
Previous wording
Holders of common stock are entitled to dividends as and when declared by our Board of Directors out of funds legally available for the payment of dividends. Although we have historically paid cash dividends on our common stock, we are not required to do so. We increased the common stock dividend from $0.24 per share in the fourth quarter of 2017, to $0.31 per share in the fourth quarter of 2018, to $0.34 per share in the fourth quarter of 2021. The amount of future dividends, if any, will depend on our earnings, financial condition, capital requirements and other factors, and will be determined by our Board of Directors. The terms of our Junior Subordinated Notes also limit our ability to pay dividends. If we are not current in our payment of dividends on our Junior Subordinated Notes, we may not pay dividends on our common stock.
Current wording
Holders of common stock are entitled to dividends as and when declared by our Board of Directors out of funds legally available for the payment of dividends. Although we have historically paid cash dividends on our common stock, we are not required to do so. The Company declared cash dividends per common share of $0.38 and $0.34 for the three months ended March 31, 2026, and 2025, respectively. The amount of future dividends, if any, will depend on our earnings, financial condition, capital requirements and other factors, and will be determined by our Board of Directors. The terms of our Junior Subordinated Notes also limit our ability to pay dividends. If we are not current in our payment of dividends on our Junior Subordinated Notes, we may not pay dividends on our common stock.
Previous wording
The Company declared a cash dividend of $0.34 per share on 68,363,418 shares outstanding on August 15, 2025, for distribution to holders of our common stock on September 8, 2025. The Company paid total cash dividends of $23.2 million in the third quarter of 2025.
Current wording
The Company declared a cash dividend of $0.38 per share on 66,957,659 shares outstanding on February 26, 2026, for distribution to holders of our common stock on March 9, 2026. The Company paid total cash dividends of $25.4 million in the first quarter of 2026.
Previous wording
Liquidity is our ability to maintain sufficient cash flow to meet maturing financial obligations and client credit needs, and to take advantage of investment opportunities as they are presented in the marketplace. Our principal sources of liquidity are growth in deposits, proceeds from the maturity or sale of securities and other financial instruments, repayments from securities and loans, Federal funds purchased, securities sold under agreements to repurchase, and advances from the FHLB. As of September 30, 2025, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 14.1% compared to 14.4% as of December 31, 2024.
Current wording
Liquidity is our ability to maintain sufficient cash flow to meet maturing financial obligations and client credit needs, and to take advantage of investment opportunities as they are presented in the marketplace. Our principal sources of liquidity are growth in deposits, proceeds from the maturity or sale of securities and other financial instruments, repayments from securities and loans, Federal funds purchased, securities sold under agreements to repurchase, and advances from the FHLB. As of March 31, 2026, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 13.9% compared to 14.7% as of December 31, 2025.
Previous wording
The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary. At September 30, 2025, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.30 billion. Total advances from the FHLB of San Francisco were $190.0 million and standby letters of credit issued by the FHLB on the Company’s behalf were $949.0 million as of September 30, 2025. These borrowings bear fixed rates and are secured by the Bank’s loans. See Note 10 to the Consolidated Financial Statements. At September 30, 2025, the Bank pledged $1.63 billion of its commercial loans and $1.5 million of securities to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.48 billion from the Federal Reserve Bank Discount Window at September 30, 2025.
Current wording
The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary. At March 31, 2026, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.47 billion. There were no total advances from the FHLB of San Francisco and there were $959.5 million in standby letters of credit issued by the FHLB on the Company’s behalf as of March 31, 2026. These borrowings bear fixed rates and are secured by the Bank’s loans. See Note 9 to the Consolidated Financial Statements. At March 31, 2026, the Bank pledged $1.38 billion of its commercial loans and $1.4 million of securities to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.26 billion from the Federal Reserve Bank Discount Window at March 31, 2026.
Previous wording
Liquidity can also be provided through the sale of liquid assets, which may consist of federal funds sold, securities purchased under agreements to resell, and securities available-for-sale. At September 30, 2025, investment securities totaled $1.64 billion, with $19.5 million pledged as collateral for borrowings and other commitments. The remaining balance was available as additional liquidity or to be pledged as collateral for additional borrowings.
Current wording
Liquidity can also be provided through the sale of liquid assets, which may consist of federal funds sold, securities purchased under agreements to resell, and securities available-for-sale. At March 31, 2026, investment securities totaled $1.68 billion, with $22.5 million pledged as collateral for borrowings and other commitments. The remaining balance was available as additional liquidity or to be pledged as collateral for additional borrowings.
Previous wording
Approximately 99.8% of our time deposits mature within one year or less as of September 30, 2025. Management anticipates that these deposits will reprice lower as a result of the expected decreases in the target Fed funds rate expected in 2025. Management anticipates that there may be some outflow of these deposits upon maturity due to the keen competition in the Bank’s marketplace. However, based on our historical runoff experience, we expect the outflow will not be significant and can be replenished through our normal growth in deposits. As of September 30, 2025, management believes all the above-mentioned sources will provide adequate liquidity during the next twelve months for the Bank to meet its operating needs.
Current wording
Approximately 99.7% of our time deposits mature within one year or less as of March 31, 2026. Management anticipates that these deposits will reprice lower as a result of the expected decreases in the target Fed funds rate expected in 2025. Management anticipates that there may be some outflow of these deposits upon maturity due to the keen competition in the Bank’s marketplace. However, based on our historical runoff experience, we expect the outflow will not be significant and can be replenished through our normal growth in deposits. As of March 31, 2026, management believes all the above-mentioned sources will provide adequate liquidity during the next twelve months for the Bank to meet its operating needs.
Previous wording
The business activities of Bancorp consist primarily of the operation of the Bank and limited activities in other investments. The Bank paid dividends to Bancorp totaling $175.0 million and $156.0 million during the third quarter of 2025 and 2024, respectively.
Current wording
The business activities of Bancorp consist primarily of the operation of the Bank and limited activities in other investments. The Bank paid dividends to Bancorp totaling $45.0 million and $40.0 million during the first quarter of 2026 and 2025, respectively.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields and rates paid on those assets and liabilities for the nine months ended September 30, 2025, and 2024. The average outstanding amounts included in the table are daily averages.
Previous report — wording carried elsewhere
The following table summarizes the changes in interest income and interest expense attributable to changes in volume and changes in interest rates for the nine months ended September 30, 2025 and 2024: