CATHAY GENERAL BANCORP
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Aug 7, 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 2026-03-31; filed 2026-05-08.
0001437749-26-015940
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001437749-26-026554
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 99 previous paragraphs and 109 current paragraphs.
51 unchanged; 44 reworded; 11 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 21 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 (11)
Current report
Net Income
Current report
Net income for the three months ended June 30, 2026, was $92.2 million, an increase of $14.7 million, or 19.0% compared to net income of $77.5 million for the same period in 2025. Diluted earnings per share for the three months ended June 30, 2026, was $1.37 per share compared to $1.10 per share for the same period in 2025.
Current report
Return on average stockholders’ equity was 12.21% and return on average assets was 1.52% for the three months ended June 30, 2026, compared to a return on average stockholders’ equity of 10.72% and a return on average assets of 1.33% for the same period in 2025.
Current report
Net Income
Current report
Net income for the six months ended June 30, 2026, was $179.1 million, an increase of $32.1 million, or 21.9% compared to net income of $147.0 million for the same period in 2025. Diluted earnings per share for the six months ended June 30, 2026, was $2.66 per share compared to $2.09 per share for the same period in 2025.
Current report
Return on average stockholders’ equity was 12.05% and return on average assets was 1.50% for the six months ended June 30, 2026, compared to a return on average stockholders’ equity of 10.28% and a return on average assets of 1.27% for the same period in 2025.
Current report
The increase in the ACL was driven primarily by changes in the quantitative component of the reserve in relation to the changes in loan volume. The quantitative reserve increased with strong growth in both the CRE and C&I segments, offset by a decline in the Construction portfolio. In addition, individually assessed reserves increased, largely attributable to a reserve established for a newly completed CRE Multifamily property which sustained damage requiring significant remediation.
Current report
The qualitative component of the allowance increased modestly during the quarter, largely reflecting an enhancement to the loan risk rating imprecision methodology to better align the reserve with an expected lifetime loss framework. This increase was partially offset by lower qualitative reserves for certain commercial real estate segments, including Office and Construction, as a softening baseline economic forecast reduced the severity differential with the model’s downside scenario.
Current report
FDIC Special Assessment
Current report
In December 2025, the FDIC adopted an interim final rule establishing a process under which institutions subject to the special assessment may receive an offset against future regular deposit insurance assessments if total special assessment collections ultimately exceed losses required to be recovered by the FDIC. The interim final rule also provides for the possibility of an additional one-time shortfall special assessment if ultimate losses exceed amounts collected. As of June 30, 2026, the Company had not recognized any asset related to a potential future offset because the amount and timing of any such offset, if any, are not currently determinable. The Company will continue to monitor future FDIC communications and guidance regarding any additional assessments or offsets.
Current report
During the three months ended June 30, 2026, the Company’s common equity tier 1 (“CET1”) ratio and total risk based capital ratio benefited, approximately 20 basis points, from a risk-weighted asset optimization analysis associated with certain off-balance sheet commitments for home equity lines of credit.”
Removed paragraphs (4)
Previous report
Highlights
Previous 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.
Previous 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.
Previous 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.
Reworded paragraphs (44)
Previous 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.
Current wording
Net interest income before provision for credit losses increased $19.7 million, or 10.9%, to $200.9 million during the second quarter of 2026, compared to $181.2 million during the same quarter in 2025. The increase was primarily due to a lower interest expense on deposits, partially offset by a lower interest income on deposits with other banks.
Previous wording
The net interest margin was 3.43% for the first quarter of 2026 compared to 3.25% for the first quarter of 2025.
Current wording
The net interest margin was 3.48% for the second quarter of 2026 compared to 3.27% for the second quarter of 2025.
Previous 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.
Current wording
For the second quarter of 2026, the yield on average interest-earning assets was 5.66%, the cost of funds on average interest-bearing liabilities was 2.89%, and the average cost of interest-bearing deposits was 2.86%. In comparison, for the second quarter of 2025, the yield on average interest-earning assets was 5.83%, the cost of funds on average interest-bearing liabilities was 3.37%, and the average cost of interest-bearing deposits was 3.35%. The decrease in the cost on average interest-bearing liabilities resulted mainly from lower interest rates paid on deposits, while the decrease in the yield on average interest-earning assets resulted mainly from lower interest rates earned on loans. 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 2.77% for the quarter ended June 30, 2026, compared to 2.46% for the same quarter in 2025.
Previous wording
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 three months ended March 31, 2026, and 2025. The average outstanding amounts included in the table are daily averages.
Current wording
The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields earned on those assets and rates paid on those liabilities for the three months ended June 30, 2026, and 2025. The average outstanding amounts included in the table are daily averages.
Previous wording
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 wording
The Company recorded a provision for credit losses of $11.2 million in the second quarter of 2026 compared to $11.2 million in the second quarter of 2025. As of June 30, 2026, the allowance for loan losses increased $23.0 million to $218.9 million, or 1.06% of total loans compared to $195.9 million, or 0.97% of total loans as of December 31, 2025.
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 $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.
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 $21.4 million for the second quarter of 2026, an increase of $6.0 million, or 39.0%, compared to $15.4 million for the second quarter of 2025. The increase was primarily due to a $13.0 million increase in net gains from equity securities and a $3.0 million increase in wealth management fees, partially offset by a $10.6 million net loss on the sale of available-for-sale investment securities related to investment securities repositioning activities.
Previous 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.
Current wording
Non-interest expense was $92.3 million for the second quarter of 2026, an increase of $3.2 million, or 3.6% compared to $89.1 million for the second quarter of 2025. The increase was primarily due to a $3.6 million increase in salaries and employee benefits, a $1.4 million increase in computer and equipment expenses, and a $0.7 million increase in other real estate owned expense, partially offset by a $1.5 million decrease in professional service expense, and a $1.3 million decrease in amortization expense of investments in low-income housing. The efficiency ratio was 41.53% in the second quarter of 2026 compared to 45.34% for the same quarter in 2025.
Previous 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.
Current wording
The effective tax rate for the second quarter of 2026 was 22.4% compared to 19.6% for the second quarter of 2025. The effective tax rate includes the impact of low-income housing tax credits in 2025.
Previous wording
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 wording
Total assets were $24.65 billion as of June 30, 2026, an increase of $423.2 million, or 1.7%, from $24.23 billion as of December 31, 2025.
Previous wording
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 wording
The carrying value of our securities available-for-sale (“AFS”) portfolio was $1.68 billion and $1.66 billion as of June 30, 2026, and December 31, 2025, respectively. The increase in the AFS securities portfolio was primarily due to a net addition of $82.9 million in treasury securities, partially offset by the amortization of existing securities during the six months ended June 30, 2026. AFS securities represented 6.8% of total assets as of both June 30, 2026, and December 31, 2025.
Previous wording
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 wording
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 June 30, 2026, and December 31, 2025. Additionally, there were no credit losses recognized in earnings during the six months ended June 30, 2026, and 2025.
Previous wording
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 wording
During the quarter, the Company recorded a $10.6 million 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 $160.2 million, were sold in June 2026, resulting in a realized loss of $10.6 million. The AFS portfolio had an effective duration of 2.03 years at June 30, 2026, compared to 1.9 years at December 31, 2025.
Previous 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.
Current wording
Gross loans held for investment were $20.62 billion at June 30, 2026, an increase of $474.1 million, or 2.4%, from $20.15 billion at December 31, 2025. The increase was primarily due to an increase of $340.4 million, or 10.7%, in commercial loans, an increase of $214.6 million, or 2.0%, in commercial real estate loans, and an increase of $7.8 million, or 3.5%, in equity lines, partially offset by a decrease of $89.2 million, or 26.4% in construction loans.
Previous 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.
Current wording
The ratio of non-performing assets to total assets was 0.59% as of June 30, 2026, and December 31, 2025. Total non-performing assets increased $1.7 million, or 1.2%, to $145.4 million at June 30, 2026, compared to $143.7 million at December 31, 2025, primarily due to an increase of $3.3 million, or 11.0%, in other real estate owned, partially offset by a decrease of $1.0 million, or 100.0%, in accruing loans past due 90 days or more, and a decrease of $0.7 million, or 0.6%, in non-accrual loans.
Previous 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.
Current wording
As a percentage of gross loans, excluding loans held for sale, plus OREO, non-performing assets were 0.71% as of both June 30, 2026 and December 31, 2025. The non-performing loan portfolio coverage ratio, defined as the allowance for credit losses to non-performing loans, increased to 209.33% as of June 30, 2026, from 183.79% as of December 31, 2025.
Previous 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.
Current wording
As of June 30, 2026, total non-accrual loans were $111.7 million, a decrease of $0.7 million, or 0.6%, from $112.4 million at December 31, 2025, and a decrease of $62.5 million, or 35.9%, from $174.2 million at June 30, 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
The following tables set forth the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers engaged in as of the dates indicated:
Current wording
The following tables set forth the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers were engaged in as of the dates indicated:
Previous 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.
Current wording
For non-accrual loans, amounts previously charged-off represented 6.3% and 14.4% of the contractual balances of non-accrual loans as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, $103.2 million, or 92.4%, of the $111.7 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 to update the factors used in evaluating potential losses.
Previous 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.
Current wording
The allowance for loan losses to non-performing loans was 195.97% as of June 30, 2026, compared to 172.82% as of December 31, 2025. The increase was primarily due to an increase in the allowance for loan losses and a decrease in non-accrual loans.
Previous wording
In accordance with customary banking practice, construction loans and land development loans generally are originated where interest on the loan is disbursed from pre-established interest reserves included in the total original loan commitment. Our construction loans and land development loans generally include optional renewal terms after the maturity of the initial loan term. New appraisals are obtained prior to extension or renewal of these loans in part to determine the appropriate interest reserve to be established for the new loan term. Loans with interest reserves are generally underwritten to the same criteria, including loan to value and, if applicable, pro forma debt service coverage ratios, as loans without interest reserves. Construction loans with interest reserves are monitored on a periodic basis to gauge progress towards completion. Interest reserves are frozen if it is determined that additional draws would result in a loan to value ratio that exceeds policy maximums based on collateral property type. Our policy limits in this regard are consistent with supervisory limits and range from 50% in the case of land to 85% in the case of one to four family residential construction projects.
Current wording
In accordance with customary banking practice, construction loans and land development loans generally are originated with interest disbursed from pre-established interest reserves included in the total original loan commitment. Our construction loans and land development loans generally include optional renewal terms after the maturity of the initial loan term. New appraisals are obtained before extension or renewal of these loans in part to determine the appropriate interest reserve to be established for the new loan term. Loans with interest reserves are generally underwritten to the same criteria, including loan to value and, if applicable, pro forma debt service coverage ratios, as loans without interest reserves. Construction loans with interest reserves are monitored on a periodic basis to gauge progress toward completion. Interest reserves are frozen if it is determined that additional draws would result in a loan to value ratio that exceeds policy maximums based on collateral property type. Our policy limits in this regard are consistent with supervisory limits and range from 50% in the case of land to 85% in the case of one to four family residential construction projects.
Previous 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.
Current wording
As of June 30, 2026, construction loans of $227.5 million were disbursed with pre-established interest reserves of $44.1 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 pre-established interest reserves that had been extended as of June 30, 2026, compared to a balance of $3.3 million of such loans with pre-established interest reserves of $95 thousand at December 31, 2025. Land loans of $20.4 million were disbursed with pre-established interest reserves of $1.3 million at June 30, 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 that had been extended as of June 30, 2026, and December 31, 2025.
Previous wording
At March 31, 2026, and December 31, 2025, the Bank had no loan on non-accrual status with available interest reserves. There were no non-accrual residential construction loans, non-accrual non-residential construction loans, and non-accrual land loans that were originated with pre-established interest reserves as of March 31, 2026, and December 31, 2025. While we typically expect loans with interest reserves to be repaid in full according to the original contractual terms, some loans may require one or more extensions beyond the original maturity before full repayment. Typically, these extensions are required due to construction delays, delays in the sale or lease of the property, or some combination of these two factors.
Current wording
At June 30, 2026, and December 31, 2025, the Bank had no loans on non-accrual status with available interest reserves. There were no non-accrual residential construction loans, non-accrual non-residential construction loans, or non-accrual land loans that were originated with pre-established interest reserves as of June 30, 2026, and December 31, 2025. While we typically expect loans with interest reserves to be repaid in full according to the original contractual terms, some loans may require one or more extensions beyond the original maturity before full repayment. Typically, these extensions are required due to construction delays, delays in the sale or lease of the property, or some combination of these factors.
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 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.
Current wording
Most of the Company’s business activities are with clients located in areas with significant Asian populations in 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 does not have a significant concentration in any single commercial industry section, and our loans generally 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, through refinancing by another lender, or through the borrowers' sales of 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 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.
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) 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 10% of the Bank’s total risk-based capital as of June 30, 2026, and 14% as of December 31, 2025. Total CRE loans represented 277% of total risk-based capital as of June 30, 2026, and 287% as of December 31, 2025, which were within the Bank’s internal limit of 400%, of total capital.
Previous 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.
Current wording
California represented 46% of total CREC loans as of both June 30, 2026, and December 31, 2025. 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 $7.64 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.
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 $7.83 billion as of June 30, 2026, compared to $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 June 30, 2026, and December 31, 2025. Interest rates on CRE loans may be fixed or variable. As of June 30, 2026, 22% and 39% 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 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.
Current wording
Owner-occupied properties comprised 26% of the CRE loans as of June 30, 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 $2.87 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.
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 $2.88 billion as of June 30, 2026, compared to $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 June 30, 2026, and December 31, 2025. The Company offers a variety of first lien mortgages, including fixed and variable-rate loans. As of June 30, 2026, 23% and 37% 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 $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.
Current wording
Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $310.4 million as of June 30, 2026, compared to $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 June 30, 2026, and December 31, 2025. Construction loan exposure was made up of $248.4 million in outstanding loans, plus $269.0 million in unfunded commitments as of June 30, 2026, compared to $337.6 million in outstanding loans, plus $235.3 million in unfunded commitments as of December 31, 2025. Land loans totaled $62.0 million as of June 30, 2026, compared to $70.4 million as of December 31, 2025.
Previous wording
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 wording
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 $72.1 million as of June 30, 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.
Previous wording
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 wording
Total deposits were $21.06 billion as of June 30, 2026, an increase of $167.5 million, or 0.8% from $20.89 billion as of December 31, 2025.
Previous 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.
Current wording
The Company calculates its uninsured deposits based on the methodologies and assumptions used for regulatory reporting. Total uninsured deposits were $10.39 billion as of June 30, 2026, an increase of approximately $199.5 million, from $10.19 billion as of December 31, 2025. Excluding $847.3 million in collateralized deposits, the uninsured and uncollateralized deposits of $9.55 billion were 45.3% of total deposits as of June 30, 2026. As of June 30, 2026, our unused borrowing capacity from the Federal Home Loan Bank was $7.05 billion, and our unpledged securities were $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 June 30, 2026.
Previous wording
FDIC Special Assessment and Uninsured Deposits
Current wording
In November 2023, the FDIC adopted a final rule implementing a special assessment to recover losses to the Deposit Insurance Fund ("DIF") arising from the systemic risk determination related to the failures of Silicon Valley Bank and Signature Bank in March 2023. The Company was subject to the special assessment and paid its eighth and final scheduled quarterly assessment during the quarter ended March 31, 2026. As of June 30, 2026, the Company had no remaining accrued liability related to the FDIC special assessment.
Previous 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.
Current wording
Total equity was $3.05 billion as of June 30, 2026, an increase of $121.2 million, from $2.93 billion as of December 31, 2025, primarily due to net income of $179.1 million, other comprehensive income of $16.1 million, stock-based compensation of $3.9 million, stock issued to directors of $0.9 million, and proceeds from dividend reinvestment of $1.3 million, offset by common stock cash dividends of $50.9 million, purchase of treasury stock of $26.8 million and shares withheld related to net share settlement of RSUs of $2.4 million.
Previous wording
The following table summarizes changes in total equity for the three months ended March 31, 2026:
Current wording
The following table summarizes changes in total equity for the six months ended June 30, 2026:
Previous wording
Management seeks to retain our capital at a level sufficient to support future growth, protect depositors and stockholders, and comply with various regulatory requirements.
Current wording
Management seeks to maintain capital at a level sufficient to support future growth, protect depositors and stockholders, and comply with applicable regulatory requirements.
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. 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.
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 increased cash dividends per common share from $0.34 to $0.38 during the three months ended March 31, 2026. 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 $0.38 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.
Current wording
The Company declared a cash dividend of $0.38 per share on 66,951,215 shares outstanding on May 28, 2026, for distribution to holders of our common stock on June 9, 2026. The Company paid total cash dividends of $25.4 million in the second 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 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.
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 June 30, 2026, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 14.2% 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 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.
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 June 30, 2026, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.41 billion. There were no outstanding advances from the FHLB of San Francisco and there were $865.9 million in standby letters of credit issued by the FHLB on the Company’s behalf as of June 30, 2026. FHLB advances, if any, bear fixed rates and are secured by the Bank’s loans. See Note 8 to the Consolidated Financial Statements. At June 30, 2026, the Bank pledged $1.32 billion of its commercial loans and no securities to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.22 billion from the Federal Reserve Bank Discount Window at June 30, 2026.
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Year-to-Date Statement of Operations Review
Current report — wording carried from elsewhere
The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields earned on those assets and rates paid on those liabilities for the six months ended June 30, 2026, and 2025. The average outstanding amounts included in the table are daily averages.
Current report — wording carried from 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 six months ended June 30, 2026 and 2025: