CATHAY GENERAL BANCORP

CATHAY GENERAL BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Business

Cathay General Bancorp (“Bancorp”) is the holding company for Cathay Bank (the “Bank” and, together, with Bancorp, the “Company”), andfour limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner. Bancorp also owns 100% of the common stock oftwo statutory business trusts created for the purpose of issuing capital securities. The Bank was founded in1962 and offers a wide range of financial services. As of* September 30, 2026*, the Bank operates 24 branches in Southern California,17 branches in Northern California,9 branches in New York State, four in Washington State, two in Illinois, two in Texas, one in Maryland, Massachusetts, Nevada, and New Jersey, one in Hong Kong, and a representative office in Taipei, Beijing, Shanghai and Ho Chi Minh City. Deposit accounts at the Hong Kong branch arenot insured by the Federal Deposit Insurance Corporation (the “FDIC”). Current activities of Taipei, Beijing, Shanghai and Ho Chi Minh City representative offices are limited to coordinating the transportation of documents to Bank's head office and performing liaison services.

2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, they donot include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented arenot necessarily indicative of the results that* maybe expected for the year ending December 31, 2026*. For further information, refer to the audited Consolidated Financial Statements and Notes included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025*, filed with the SEC on* March**2,* 2026 (the*“2025* Form10-K”).

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

Certain prior period amounts disclosed have been reclassified to conform to the current presentation withno impact on previously reported net income or stockholders’ equity.

3. Recently Issued Accounting Standards Pending Adoption

In* December 2025,ASU2025‑11,* “Interim Reporting (Topic270): Narrow‑Scope Improvements”, was issued. ASU2025-11 clarifies and enhances guidance under ASC270 on interim financial reporting by (i) clarifying the scope of ASC270 such that it now explicitly applies only to entities that issue complete interim financial statements and related notes under U.S. GAAP, (ii) establishing clear guidance on the form of interim statements and notes, incorporating a comprehensive list of required interim disclosures drawn from across the ASC, and (iii) introducing a requirement to disclose material events and changes occurring after the end of the last annual period that could impact interim results. ASU2025-11 will be effective for us for interim periods beginning in2028, though early adoption is permitted. ASU2025-11 isnot expected to have a significant impact on our financial statements.

In* November 2025,ASU2025‑09,* “Derivatives and Hedging (Topic815): Hedge Accounting Improvements”, was issued. ASU2025-09 amends ASC815 to align hedge accounting more closely with an entity’s economic risk management practices. Key amendments include (i) to allow designating a variable price component of a nonfinancial forecasted purchase or sale as the hedged risk, (ii) to allow grouping individual forecasted transactions with similar (not identical) risk exposures, (iii) a new model for hedging forecasted interest on variable-rate debt, enabling changes in index or tenor without de-designation, subject to simplifying assumptions, and (iv) additional clarifications related to hedge accounting of nonfinancial components, net written options, and dual-hedge strategies. ASU2025-09 will be effective for us beginning in2027, though early adoption is permitted. ASU2025-09 isnot expected to have a significant impact on our financial statements.

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In* November 2025,ASU2025‑08,* “Financial Instruments - Credit Losses (Topic326): Purchased Loans”, was issued. ASU2025-08 expands the scope of the “gross‑up” method, formerly applicable only to purchased credit‑deteriorated ("PCD") assets, to include acquired non‑PCD loans that meet certain criteria, now referred to as “purchased seasoned loans” (PSLs). Under this model, an allowance for expected credit losses is recognized at acquisition, offsetting the loan’s amortized cost basis, thereby eliminating the day-one credit‑loss expense previously required for non‑PCD assets. PSLs are defined as non‑PCD loans acquired either (i) through a business combination, or (ii) purchased more than90 days after origination when the acquirer wasnot involved in origination. ASU2025-08 will be effective for us, on a prospective basis for loans acquired on or after the adoption date, for interim and annual reporting periods beginning in2027, though early adoption is permitted. ASU2025-08 isnot expected to have a significant impact on our financial statements.

In* September 2025,ASUNo.* 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic350-40): Targeted Improvements to the Accounting for Internal-Use Software”, was issued. ASU2025-06 simplifies and modernizes the accounting for internal-use software by removing prescriptive project stage guidance and introducing a new capitalization threshold. Under the revised standard, software development costs are capitalized when management authorizes and commits funding for the project, and it is probable the software will be completed and used as intended. ASU2025-06 will be effective in2028. ASU2025-06 isnot expected to have a significant impact on our financial statements.

In* November 2024,ASUNo.* 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses”, was issued. This ASU requires disaggregated disclosure of income statement expenses for public business entities. ASU2024-03 requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU2024-03 is effective for us, on a prospective basis, for annual periods beginning in2027, and interim periods within fiscal years beginning in2028, though early adoption and retrospective application is permitted. ASU2024-03 isnot expected to have a significant impact on our financial statements.

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4. Investment Securities

The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of securities available-for-sale ("AFS") as of* September 30, 2026*, and* December 31, 2025*.

AFS securities with carrying value of $19.7 million and $22.8 million as of* September 30, 2026*, and* December 31, 2025,*respectively, were pledged to secure public deposits and other borrowings.

As of* September 30, 2026*, and* December 31, 2025*, accrued interest receivables on AFS securities totaled $2.7 million and $3.0 million, respectively. These amounts are excluded from the securities' amortized cost and included in accrued interest receivable on the Consolidated Balance Sheets. For the Company’s accounting policy related to accrued interest receivable on AFS securities,see Note1* -* Summary of Significant Accounting Policies–* Securities Available for Sale*–* Allowance for Credit Losses on Available for Sale Securities* to the Consolidated Financial Statements in the Company’s2025 Form10-K.

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The amortized cost and fair value of AFS securities as of* September 30, 2026*, by contractual maturities, are set forth in the table below. Actual maturities* maydiffer from contractual maturities because borrowers may*have the right to call or repay obligations with or without call or repayment penalties.

The following tables set forth the gross unrealized losses and related fair value of the Company’s investment portfolio, aggregated by investment category and the length of time that individual security has been in a continuous unrealized loss position, as of* September 30, 2026*, and* December 31, 2025*.

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As of* September 30, 2026*, the Company had a total of 92 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 68 mortgage-backed securities,18 U.S. treasury securities, four U.S. government agency securities, one corporate debt security, andone collateralized mortgage obligation. As of* December 31, 2025*, the Company had a total of 159 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 138 mortgage-backed securities, ten U.S. government agency securities, eight corporate debt securities, andthree collateralized mortgage obligations.

The AFS securities that were in an unrealized loss position at* September 30, 2026*, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses,see Note1* -* Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements in the Company’s2025 Form10-K.

During the quarter ended* September 30, 2026*, the Company sold certain available-for-sale investment securities with an amortized cost basis of $89.8 million and recognized a loss of $15.1 million related to investment securities repositioning activities. For thenine months ended* September 30, 2026*, the Company sold lower-yielding securities with an amortized cost of $460.3 million and recognized a realized loss of $41.3 million.

The unrealized losses on the remaining AFS securities were primarily attributable to changes in the yield curve and wider liquidity and credit spreads. The issuers havenot, to the Company’s knowledge, exhibited any conditions that would indicate a risk of default. Other than the securities sold, the Company expects to recover the amortized cost basis of its AFS securities and hasno intent to sell, nor is it more likely thannot that it will be required to sell, securities in an unrealized loss position before recovery. Accordingly, no allowance for credit losses was recorded on AFS securities as of* September 30, 2026*, andno provision for credit losses was recognized for the quarter.

5. Loans

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 doesnot have a significant concentration in any single commercial industry sector and generally its loans, when secured, are secured by real property or other collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral.

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The types of loans in the Company’s Consolidated Balance Sheets as of* September 30, 2026*, and* December 31, 2025*, were as follows:

As of* September 30, 2026*, and* December 31, 2025*, recorded investment in non-accrual loans was $87.3 million and $112.4 million, respectively. For non-accrual loans, the amounts previously charged-off represent 5.0% and 14.4% of the contractual balances for non-accrual loans as of* September 30, 2026*, and* December 31, 2025*, respectively.

At* September 30, 2026*, the Bank pledged $1.27 billion of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.17 billion from the Federal Reserve Bank Discount Window at* September 30, 2026*.

The following table presents non-accrual loans and the related allowance as of* September 30, 2026*, and* December 31, 2025*.

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

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The following tables present the aging of the loan portfolio by type as of* September 30, 2026* and* December 31, 2025*:

The Company evaluates loan modifications made to borrowers experiencing financial difficulty to determine whether the modification results in a new loan under ASC310‑20. For modifications that donot result in a new loan, the Company uses the post‑modification contractual terms, including the post‑modification contractual interest rate, when applying a discounted cash flow method to estimate expected credit losses. Loan modifications made to borrowers experiencing financial difficulty are individually evaluated. The modification* mayinclude, but isnot* limited to, term extensions, payment delays, interest rate reductions, or a combination of such modifications.

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The following table presents the amortized cost of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable, type of concession granted and the financial effects of the modifications for thethree andnine months ended* September 30, 2026*, and* September 30, 2025*, by loan class and modification type. There wereno loan modification activities for thethree months ended* September 30, 2026*. The tables donot include those modifications that only resulted in an insignificant payment delay.

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The Company considers a loan to be in payment default once it is90 days contractually past due under the modified terms. The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

There wereno loans that received modifications within thetwelve months preceding payment default that subsequently defaulted during thethree months andnine months ended* September 30, 2026* and* September 30, 2025*.

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The following table presents the performance of loans that were modified in thetwelve months ended* September 30, 2026*, and2025.

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

As of* September 30, 2026*, there wereno commitments to lend additional funds to borrowers experiencing financial difficulty and whose loans were modified.

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

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The following table summarizes the Company’s loans held for investment and current year-to-date gross write-offs as of* September 30, 2026*, and* December 31, 2025*, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification. Revolving Loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year columns.

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Allowance for Credit Losses

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

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

Management estimates expected credit losses using a combination of historical loss experience, internal credit risk metrics, borrower‑specific information, and external economic forecasts. Historical loss data accounts for portfolio composition, delinquency trends, and other relevant credit indicators. The Company incorporates forward‑looking information by applying reasonable and supportable forecasts of key macroeconomic variables, including GDP, unemployment rates, and real estate market conditions, which are updated regularly and applied consistently across loan portfolios.

Under the CECL methodology, quantitative and qualitative loss factors are applied to our population of loans on a collective pool basis when similar risk characteristics exist. Loans that donot share similar risk characteristics with pooled loans include loans individually evaluated due to credit deterioration, borrower‑specific circumstances and loan modifications made to borrowers experiencing financial difficulty. Expected credit losses for individually evaluated loans are measured using discounted expected cash flows or, for collateral‑dependent loans, the fair value of collateral less estimated costs to sell.

Quantitative Factors

The Company evaluates expected credit losses for loan pools with similar risk characteristics using quantitative models that incorporate historical loss experience, borrower credit attributes, collateral characteristics, and projected economic conditions. Loan portfolios are segmented into groups such as residential mortgages, commercial and industrial loans, construction loans, and various classes of commercial real estate based on common risk characteristics. The quantitative models estimate lifetime expected credit losses by considering contractual cash flows and expected prepayments, and the impact of forecasted macroeconomic conditions.

The quantitative framework generally considers the probability that a borrower will default (“probability of default” or PD), the expected severity of loss in the event of default (“loss given default” or LGD), and the expected exposure at the time of default (“exposure at default” or EAD). These components are influenced by historical performance, loan structure, collateral type, and forecasted macroeconomic conditions. The models estimate lifetime expected credit losses by considering contractual cash flows and expected prepayments, and the impact of forecasted economic conditions.

The Company applies aneight quarter reasonable and supportable forecast period followed by afour quarter systematic reversion to long‑term historical loss experience. Multiple economic scenarios* may*be considered in developing the forecast, and management applies judgment in determining the weighting of those scenarios.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals, and modifications unless such options are included in the original or modified contract and arenot unconditionally cancellable by the Company.

For certain smaller portfolios with limited historical loss experience, such as SBA loans and HELOCs, the Company applies a simplified loss‑rate approach that incorporates historical performance, forecasted economic conditions, and reversion to long‑term loss expectations.

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Qualitative Factors

The Company applies qualitative adjustments to reflect factorsnot fully captured in the quantitative models, including changes in underwriting practices, borrower concentrations, subportfolio growth, competitive dynamics, regulatory developments, and economic uncertainty. Qualitative adjustments also consider emerging risks, model limitations, and credit trendsnot yet reflected in historical data, as well as collateral value considerations for certain loan types.

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

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

Management believes the allowance for credit losses is appropriate based on the Company’s loan portfolio, associated unfunded commitments, credit risk ratings, and other relevant information available.

Individually Evaluated Loans

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

Unfunded Loan Commitments

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

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

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The following tables set forth activity in the allowance for loan losses and allowance for unfunded commitments by portfolio segment for thethree andnine months ended* September 30, 2026*, and* September 30, 2025*.

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During thenine months ended* September 30, 2026*, the Company transferred $24.6 million in commercial loans held for investment to loans held for sale. Loans transferred to held-for-sale are recorded at the lower of cost or fair value at the time of transfer, with any write-down recognized through the allowance for credit losses. During thenine months ended* September 30, 2026*, the Company sold $11.0 million in commercial loans held for sale.

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6. Equity Securities

As of* September 30, 2026*, and* December 31, 2025,equity securities had a carrying value of $116.9 million and $51.9 million, including certain equity securities with a fair value of $27.2 million and $32.8 million, respectively, which are valued using quoted prices in active markets. The remaining balance of equity securities consists of investments in private investment funds, which are accounted for under the equity method. The Company recognized an unrealized net gain of $36.1 million during thethree* months ended* September 30, 2026*, compared to an unrealized net gain of $3.3 million for thethree months ended* September 30, 2025*. The Company recognized an unrealized net gain of $65.0 million for thenine months ending* September 30, 2026*, compared to an unrealized net loss of $2.3 million for thenine months ending* September 30, 2025*. The $67.3 million increase in unrealized gain was primarily due to an increase in the value of an investment in a private investment fund during thenine months ending* September 30, 2026*, when compared to thenine months ending* September 30, 2025*.

7. Goodwill and Other Intangible Assets

Goodwill

Total goodwill was $375.7 million as of* September 30, 2026*, and remains unchanged compared to* December 31, 2025*. The Company completed its annual goodwill impairment testing and concluded that goodwill wasnot impaired as of* December 31, 2025*. Management has identifiedno interim events or changes in circumstances that would indicate potential impairment.

Core Deposit Intangibles

The following table presents the carrying amounts and accumulated amortization of core deposits intangible assets as of* September 30, 2026*, and* December 31, 2025*:

There wereno impairment write-downs included in amortization of core deposit intangibles for thethree andnine months ended* September 30, 2026*, and* September 30, 2025*.

The Company amortizes the core deposit intangibles based on the projected useful lives of the related deposits. The amortization expense related to the core deposit intangible assets was $218 thousand and $229 thousand for thethree months ended* September 30, 2026*, and2025, respectively. The amortization expense related to the core deposit intangible assets was $653 thousand and $729 thousand for thenine months ended* September 30, 2026*, and2025, respectively.

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

8. Borrowed Funds

Borrowings from the Federal Home Loan Bank (“FHLB”)– There were $200.0 million of outstanding over-night borrowings from the FHLB as of* September 30, 2026*, andno over-night borrowing from the FHLB as of* December 31, 2025*. Total advance from the FHLB was $200.0 million at a weighted average rate of 4.42% as of* September 30, 2026*, and there wasno advance from the FHLB as of* December 31, 2025*. Our unused borrowing capacity from the FHLB as of* September 30, 2026*, and* December 31, 2025*, was $7.02 billion and $7.89 billion, respectively, and unpledged securities at* September 30, 2026*, and* December 31, 2025*, was $1.57 billion and $1.64 billion, respectively.

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

As of* September 30, 2026,the Company completed the redemption of $54.1 million of Trust Preferred Securities ("TruPS"), issued bythree* of the Company's statutory business trusts and extinguished the related Junior Subordinated Notes. There wasno gain or loss on the extinguishment of the Junior Subordinated Notes, as the reacquisition price equaled the carrying amount.

At* September 30, 2026*, Junior Subordinated Notes totaled $65.0 million with a weighted average interest rate of 6.21%, compared to $119.1 million with a weighted average rate of 6.76% at* December 31, 2025*. The Junior Subordinated Notes have a stated maturity term of 30 years.

9. Commitments and Contingencies

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

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

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

The Company’s unfunded commitments related to investments in qualified affordable housing were $86.7 million and $89.3 million as of* September 30, 2026*, and* December 31, 2025*, respectively.

Loan Commitments - We enter into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of our commitments to extend credit are contingent upon clients maintaining specific credit standards at the time of loan funding. We minimize our exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for credit losses.

Standby Letters of Credit - Standby letters of credit are written conditional commitments issued by us to secure the obligations of a client to athird party. In the event the client doesnot perform in accordance with the terms of an agreement with thethird party, we would be required to fund the commitment. The maximum potential amount of future payments we could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, we would be entitled to seek reimbursement from the client. Our policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements.

As of* September 30, 2026* and* December 31, 2025,*commitments to extend credit of $4.20 billion and $3.81 billion include commitments to fund fixed rate loans of $54.4 million and $48.4 million and adjustable-rate loans of $4.15 billion and $3.76 billion, respectively.

10. Stockholders’*** Equity***

Total stockholders' equity was $3.06 billion as of* September 30, 2026*, an increase of $131.4 million from $2.93 billion as of* December 31, 2025*. The increase primarily reflected net income of $274.3 million, other comprehensive income of $5.9 million, stock-based compensation of $5.8 million, proceeds from dividend reinvestment of $2.0 million, and stock issued to directors of $0.9 million, partially offset by purchase of treasury stock of $77.5 million, common stock cash dividends of $76.1 million, and shares withheld related to net share settlement of RSUs of $3.9 million.

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Activity in accumulated other comprehensive income/(loss), net of tax, and reclassification out of accumulated other comprehensive income/(loss) for thethree andnine months ended* September 30, 2026*, and* September 30, 2025*, was as follows:

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11. Earnings per Share

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

12. Stock-Based Compensation

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

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

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

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

The following table presents RSU activity during thenine months ended* September 30, 2026*:

The compensation expense recorded for RSUs was $1.9 million and $2.0 million for thethree months ended* September 30, 2026*, and2025, respectively. For thenine months ended* September 30, 2026*, and2025, the compensation expense recorded for RSUs was $5.8 million and $4.7 million, respectively. Unrecognized stock-based compensation expense related to RSUs was $10.9 million and $11.4 million as of* September 30, 2026*, and2025, respectively. As of* September 30, 2026*, these costs are expected to be recognized over the next 1.9 years for time-based and performance-based RSUs.

As of* September 30, 2026*,2,722,817 shares were available for future grants under the Company’s2005 Incentive Plan, as amended and restated.

13. Income Taxes

The effective tax rate for thefirst nine months of2026 was 21.9% compared to 18.8% for thefirst nine months of2025. The effective tax rate for thefirst nine months of2026 and2025 includes the impact of low-income housing tax credits.

The Company’s tax returns are open for audit by the Internal Revenue Service back to 2023 and by the California Franchise Tax Board and other states where the Company files state tax returns back to 2022.

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

14. Fair Value Measurements and Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of* September 30, 2026*, and* December 31, 2025*:

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

Certain assets or liabilities are required to be measured at estimated fair value on a nonrecurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower-of-cost-or-fair value or other impairment write-downs of individual assets. In determining the estimated fair values during the period, the Company determined that substantially all the changes in estimated fair value were due to declines in market conditions versus instrument specific credit risk.

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For financial assets measured at fair value on a nonrecurring basis that were still reflected in the Consolidated Balance Sheets as of* September 30, 2026*, and* December 31, 2025*, the following tables set forth the level of valuation assumptions used to determine each adjustment, the carrying value of the related individual assets as of* September 30, 2026*, and* December 31, 2025*, and the total losses for the periods indicated:

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

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

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

The significant unobservable inputs (Level3) used in the fair value measurement of other real estate owned (“OREO”) are primarily based on the appraised value of OREO adjusted by estimated sales cost and commissions. The Company applies estimated sales cost and commissions of 5% of the collateral value of individually evaluated loans, quoted price, or loan sale price of loans held for sale, and appraised value of OREO.

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

The following table sets forth the carrying and notional amounts and estimated fair value of financial instruments as of* September 30, 2026*, and* December 31, 2025*:

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The following tables set forth the level in the fair value hierarchy for the estimated fair values of financial instruments as of* September 30, 2026*, and* December 31, 2025*, excluding financial instruments recorded at fair value on a recurring basis already presented in other tables in this note:

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15. Financial Derivatives

The Company uses derivative instruments to manage exposure to interest rate and foreign currency risk and to assist customers with their risk‑management objectives. Certain derivatives are designated as hedging instruments in qualifying fair value hedge relationships. Other derivatives are economic hedges that donot qualify for, or the Company has electednot to apply, hedge accounting, including derivatives entered into to accommodate customer needs. Derivative instruments are recognized on the Consolidated Balance Sheets at fair value, and the accounting for changes in fair value depends on whether the derivative is designated as a hedging instrument.

Customer Accommodation Derivatives (Economic Hedges)

The Company enters into interest rate and foreign exchange derivative contracts with customers to assist them in managing market risks. For each customer derivative, the Company enters into an offsetting derivative with a third‑party financial institution, including centrally cleared counterparties (“CCPs”), resulting in minimal net market risk to the Company. These derivatives arenot designated as accounting hedges and are recorded at fair value, with changes in fair value recognized in earnings.

Certain derivatives cleared through CCPs are subject to daily variation margin. When variation margin is legally characterized as settlement under the CCP’s rulebook, the daily cash exchanges are accounted for as settlements of the derivative’s fair value rather than collateral.

As of* September 30, 2026*, and* December 31, 2025*, the Company had outstanding customer and offsetting dealer interest rate derivative contracts with a notional amount of $1.12 billion and $1.02 billion, respectively, fair values of $36.0 million and $24.0 million, respectively. As of* September 30, 2026*, and* December 31, 2025*, no customer swap transactions were cleared through a CCP.

The Company also enters into foreign exchange forward contracts with customers to mitigate the risk of fluctuations in foreign currency exchange rates associated with foreign currency deposits or customer‑initiated foreign exchange transactions. These contracts arenot designated as hedging instruments and are recorded at fair value, with changes in fair value recognized in non‑interest income. Period‑end gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities.

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The notional amount and fair value of the Company’s derivative financial instrumentsnot designated as hedging instruments as of* September 30, 2026*, and* December 31, 2025*,not including interest rate swaps cleared through the CCP, were as follows:

Fair Value Hedges of Individual Loans

As of* September 30, 2026*, the Bank’s outstanding fair value interest rate swap contracts matched to individual fixed-rate commercial real estate loans with a notional amount of $46.2 million and a fair value of $1.9 million. These swaps are designated as fair value hedges of changes in the fair value of the underlying loans attributable to interest rate movements. The swaps amortize in line with the contractual amortization of the hedged loans and permit prepayments with the same prepayment penalty terms as the related loans. Hedge ineffectiveness for these relationships wasnot significant for the periods presented.

Last‑of‑Layer (Portfolio Layer) Fair Value Hedges

The Company has designated $476.7 million of notional amount as a last-of layer fair value hedge of closed pools of fixed-rate loans with an aggregate notional value of $681.9 million as of* September 30, 2026*. The loans included in the closed portfolio are expected to retain sufficient principal such that the hedged layer isnot affected by prepayments, defaults, or other factors under the last‑of‑layer method.

The Company uses pay‑fixed, receive1‑Month Term SOFR interest rate swaps to hedge the designated last‑of‑layer portion of the loan pools. As of* September 30, 2026*, the hedged last‑of‑layer tranche had a fair value loss basis adjustment of $215.0 thousand. These swaps convert the hedged layer into a floating‑rate exposure. The Company’s objective in these hedging relationships is to reduce exposure to changes in fair value attributable to interest rate movements.

The notional amount and net unrealized loss of the Company’s fair value derivative financial instruments as of* September 30, 2026*, and* December 31, 2025*, were as follows:

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Included in the total notional amount of $522.9 million of the fair value interest rate contracts entered into with financial counterparties as of* September 30, 2026*, was $470.0 million of interest rate swaps cleared through the CCP. Applying variation margin payments as settlement to CCP cleared derivative transactions resulted in a reduction in derivative asset fair values of $1.8 million as of* September 30, 2026*.

As of* September 30, 2026*, and* December 31, 2025*, the Company had $39.7 million and $12.1 million, respectively, as cash margin that serves as collateral on deposits in a cash margin account for interest rate swaps. Of the balances held in the cash margin account $1.2 million and $4.3 million are restricted as of* September 30, 2026*, and* December 31, 2025*, respectively.

Counterparty Credit Risk

Derivative contracts expose the Company to the risk that counterparties* may*be unable to meet their contractual obligations. The Company manages this risk by transacting with institutional counterparties that have strong credit profiles and by requiring approval from the Bank’s Board of Directors. Credit exposure is limited to the net favorable fair value and any accrued interest receivable on derivative positions. A significant portion of the Company’s interest rate swaps are centrally cleared through a derivative clearing organization, which reduces counterparty credit risk.

16. Balance Sheet Offsetting

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

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Financial instruments that are eligible for offset in the Consolidated Balance Sheets, as of* September 30, 2026*, and* December 31, 2025*, are set forth in the following table:

17. Revenue from Contracts with Clients

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

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

Fees and Services Charges on Deposit Accounts

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

Wealth Management Fees

The Company employs financial consultants to provide investment planning services for clients including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The fees the Company earns are variable and are recognized over the period in which the related services are performed, based on transaction details received from thethird-party broker-dealer.

Practical Expedients and Exemptions

The Company applies the practical expedient and exemptions in ASC606-10-50-14 and doesnot disclose the transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations. The Company’s contracts with customers generally have an original expected duration ofone year or less, are open-ended arrangements that* maybe terminated by either party upon notice of less thanone* year or qualify for the practical expedient because the Company recognizes revenue in the amount to which it has a right to invoice for services performed.

In addition, given the short-term nature of the contracts, the Company applies the practical expedient in ASC606-10-32-18 and doesnot adjust the consideration for a significant financing component when, at contract inception, the period between transfer of the applicable service and customer payment is expected to beone year or less.

18. Stock Repurchase Program

On* February**4,* 2026, the Company completed its* June 2025stock repurchase program by repurchasing 243,499 shares at an average cost of $51.31 in thefirst* quarter of2026, for a total of $12.5 million.

On* April 23, 2026,the Company announced that its Board of Directors adopted a new share repurchase program authorizing the Company to repurchase up to $150.0 million of the Company’s common stock. On July 16, 2026,the Company's Board approved an increase to its existing share repurchase authorization from $150.0 million to $200.0 million, withno* change to the current authorization expiration date that is subject to regulatory approval which is currently pending.

During thethird quarter, we repurchased 800,594 common shares at an average cost of $62.81 per share, for a total of $50.7 million.

19. Subsequent Events

The Company has evaluated the effect of events that have occurred subsequent to* September 30, 2026*, through the date of issuance of the Consolidated Financial Statements, and, based on such evaluation, the Company believes that there have beenno material events during such period that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements.

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