CATY 10-K & 10-Q changes, risk factors and insider trading

We seek to minimize the adverse effects of changes in interest rates by structuring our asset-liability composition to obtain the maximum spread. We use interest rate sensitivity analysis and a simulation model to assist us in estimating the optimal asset-liability composition. However, such management tools have inherent limitations that impair their effectiveness. Moreover, the long-term effects of the Federal Reserve’s unprecedented quantitative easing and tapering off are unknown,unknown. In December 2025, the Federal Reserve released projections whereby the projected target range for the federal funds rate would decrease by the end of 2026 and whilecontinue interestto ratesdecrease havein risen, they still remain at relatively low levels.2027. There can be no such assurance that any such decreases in the federal funds rate will occur or that we will be successful in minimizing the adverse effects of changes in interest rates.

In addition, the risks inherent in construction lending may continue toadversely affect adversely our results of operations. Such risks include, among other things, the possibility that contractors may fail to complete, or complete on a timely basis, construction of the relevant properties; substantial cost overruns in excess of original estimates and financing (including shortages in labor and raw materials and supplies); market deterioration during construction; and lack of permanent take-out financing. Loans secured by such properties also involve additional risk because they have no operating history. In these loans, loan funds are advanced upon the security of the project under construction (which is of uncertain value prior to completion of construction) and the estimated operating cash flow to be generated by the completed project. There is no assurance that such properties will be sold or leased so as to generate the cash flow anticipated by the borrower. A general decline in real estate sales and prices across the United States or locally in the relevant real estate market, a decline in demand for residential real estate, economic weakness, high rates of unemployment, and reduced availability of mortgage credit, are some of the factors that can adversely affect the borrowers’ ability to repay their obligations to us and the value of our security interest in collateral, and thereby adversely affect our results of operations and financial results.

Competition for qualified employees and personnel in the banking industry is intense and we believe there are a limited number of qualified persons with knowledge of, and experience in, the communities that we serve. The process of recruiting personnel with the combination of skills and attributes required to carry out our strategies is often lengthy. Our success depends to a significant degree upon our ability to attract and retain qualified management, loan origination, finance, client service, administrative, marketing, and technical personnel and upon the continued contributions of our management and personnel. In particular, our success has been and continues to be highly dependent upon the abilities of key executives and certain other employees, including, but not limited to, our Executive Chairman of the Board, Dunson K. Cheng, and our Chief Executive Officer, Chang M. Liu,Liu. andOur ourcurrent Chief Financial Officer, Heng W. Chen.Chen, will retire effective March 1, 2026, and at the time, Albert J. Wang will assume the role of Chief Financial Officer.

Our compensation practices are subject to review and oversight, and may be subject to limitations, by the FDIC, the DFPI, the Federal Reserve and other regulators. Such limitations may or may not affect our competitors and could further affect our ability to attract and retain our executive officers and other key personnel. In April 2011 and April 2016,Although the Federal Reserve, other federal banking agencies and the SEC jointly have published proposed rules designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at covered financial institutions, which includes a bank or bank holding company with $1 billion or more of assets, such as the Bancorp and the Bank.Bank, such proposed rules have not been adopted. It cannot be determined at this time whether or when a final rule will be adopted and whether compliance with such a final rule will substantially affect the manner in which we structure compensation for our executives and other employees. Depending on the nature and application of the final rules, we may not be able to successfully compete with certain financial institutions and other companies that are not subject to some or all of the rules to retain and attract executives and other high performing employees. If this were to occur, our business, financial condition and results of operations could be adversely affected, perhaps materially.

Governments have become increasingly focused on the effects of climate change and related environmental issues, and various policymakers with jurisdiction over us have adopted, or are considering adopting, climate-related policies or regulations which may require us to incur increased costs. For example,While the SEC published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, whichsuch wouldrules haveare requirednot usexpected to incurbe significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controlsimplemented in thetheir past,current andform. impose increased oversight obligations on our management and board of directors. While the application of this rule is currently stayed pending resolution of legal challenges and recent comments from the acting commissioner of the SEC indicate that the SEC may not defend the rule against such legal challenges,However, the SEC may seek to enact new rules related to environmental issues in the future. In the absence of an SEC rule requiring such disclosures, certain states may be more likely to implement legislation at the state-level requiring climate and other environmental disclosure. For instance, the California legislature passed legislation requiring that certain entities doing business in California with revenues exceeding $1 billion report their direct and indirect greenhouse gas emissions. The legislation authorizes regulations which could administer penalties against reporting entities for non-compliance. This legislation and similar legislation that may be introduced in future may require us to incur various and significant costs to comply. Various banking regulators, including the FDIC and the New York Department of Financial Services, have also proposed guidelines for climate-related risk management. While guidance from the FDIC is aimed at financial institutions with over $100 billion in consolidated assets, there is no guarantee that we will not be subject to additional regulation regarding climate-related risk management in future. The Federal Reserve Board, for example, may incorporate climate-related risks into its supervisory stress tests In addition, consumers and businesses also may change their behavior on their own as a result of their concerns over the long-term impacts of climate change. We and our clients will need to respond to new laws and regulations as well as client and business preferences resulting from climate change concerns. We and our clients may face cost increases, asset value reductions (including the possibility of stranded assets), operating process changes, and the like. The impact on our loan relationships and other clients will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities and the impact of rising sea levels and other effects of climate change. Among the impacts to us could be a drop in demand for our products and services, particularly in certain sectors. In addition, we could face reductions in creditworthiness on the part of some clients or in the value of assets securing loans. Our efforts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. It is possible as well that changes in climate and related environmental risks, perceptions of them, and governmental responses to them may occur more rapidly than we are able to adapt without disrupting our business and impairing our financial results. In addition, the impact of heightened environmental regulation upon our clients could impact our existing loan portfolio as well as asset value and our clients’ operating costs, which could adversely affect our business.

The following discussion is intended to provide information to facilitate the understanding and assessment of the consolidated financial condition and results of operations of the Bancorp and its subsidiaries.subsidiaries for the year ended December 31,2025, as compared to 2024. It should be read in conjunction with this Annual Report and the audited Consolidated Financial Statements and Notes appearing elsewhere in this Annual Report. For discussion and analysis of the Company’s 2024 results, as compared to 2023, refer to Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 28, 2025. The following discussion and analysis of our financial condition and results of operations contains forward-looking statements. These statements are based on current expectations and assumptions, which are subject to risks and uncertainties. See “Forward-Looking Statements” and “Risk Factors Summary.” Actual results could differ materially because of various factors, including but not limited to those discussed in “Risk Factors,” under Part I, Item 1A of this Annual Report.

In addition, the Company’s Board of Directors has established a written credit policy that includes a credit review and control system that the Board of Directors believes should be effective in ensuring that the Bank maintains an appropriate allowance for credit losses. The Board of Directors provides oversight for the allowance evaluation process, including quarterly evaluations, and determines whether the allowance is appropriate to absorb losses in the credit portfolio. The determination of the amount of the allowance for credit losses and the provision for credit losses are based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for credit losses. The nature of the process by which the Bank determines the appropriate allowance for credit losses requires the exercise of considerable judgment. Additions to the allowance for credit losses are made by charges to the provision for credit losses. While management utilizes its business judgment based on the information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors, many of which are beyond the Bank’s control, including but not limited to the performance of the Bank’s loan portfolio, the economy and market conditions, macroeconomic forecasts, and the view of the regulatory authorities toward loan classifications. Identified credit exposures that are determined to be uncollectible are charged against the allowance for credit losses. Recoveries of previously charged off amounts, if any, are credited to the allowance for credit losses. A weakening of the economy or other factors that adversely affect asset quality could result in an increase in the number of delinquencies, bankruptcies, or defaults, and a higher level of non-performing assets, net charge-offs, and provision for credit losses in future periods.

For the year ended December 31, 2024,2025, we reported net income of $315.1 million, or $4.54 per diluted share, compared to net income of $286.0 million, or $3.95 per diluted share, comparedin to2024, and net income of $354.1 million, or $4.86 per diluted share, in 2023, and net income of $360.6 million, or $4.83 per diluted share, in 2022.2023. The $68.1$29.1 million decreaseincrease in net income from 20232024 to 20242025 was primarily the result of decreasesan increase in net-interestnet income, and non-interestinterest income and non interest income and a decrease in non interest expense, offset by an increase in provision for credit losses, partially offset by decreases in non-interest expense.losses. The return on average assets in 20242025 was 1.22%,1.33%, compared to 1.22% in 2024, and to 1.56% in 2023, and to 1.69% in 2022.2023. The return on average stockholders’ equity was 10.87% in 2025, compared to 10.18% in 2024, comparedand to 13.56% in 2023, and to 14.70% in 2022.2023.

Net interest income decreasedincreased $67.7$68.4 million, or 9.1%,10.1%, from $741.7 million in 2023 to $674.1 million in 2024.2024 to $742.5 million in 2025. The decreaseincrease in net interest income was due primarily to the increasedecrease in interest expense from time deposits partially offset by ana increasedecrease in interest income from loans.

Average loans for 20242025 were $19.43$19.72 billion, a $671.3$287.8 million, or a 3.6%1.5% increase from $18.76$19.43 billion in 2023.2024. Compared with 2023,2024, average commercial real estate loans increased $675.2$418.0 million, or 7.3%,4.2%, average residential mortgage loans increaseddecreased $246.2$68.7 million, or 4.4%, average equity lines decreased $41.3 million, or 14.9% and1.2%, average construction loans decreased $162.9$29.1 million, or 31.3%.8.2%, and average commercial loans decreased $25.2 million, or 0.8%. Average investment securities were $1.62$1.59 billion in 2024,2025, ana increasedecrease of $62.6$28.8 million, or 4.0%,1.8%, from 2023.2024. Average interest-bearing cash on deposits with financial institutions decreasedincreased $43.2$63.4 million, or 3.8%,5.8%, to $1.16 billion in 2025 from $1.10 billion in 2024 from $1.14 billion in 2023.2024.

Average interest-bearing deposits were $15.47$16.78 billion in 2023,2025, an increase of $1.58$253.7 billion,million, or 11.4%,1.5%, from $13.89$16.53 billion in 2022,2024, primarily due to an increase of $3.45$352.4 billion,million, or 63.9%, in time deposits offset by decreases of $1.74 billion, or 35.4%11.1% in money marketmarket, accounts, $83.2$242.0 million, or 3.4%,21.0%, in savings accounts, and $6.4 million, or 0.3%, in interest bearing demand deposits,deposits andoffset $48.6by a decreases of $347.1 million, or 4.3%,3.5%, in savingstime accounts.deposits.

Interest income increaseddecreased $390.9$25.7 million, or 45.9%,1.9%, from $851.3 million in 2022 to $1.24$1.33 billion in 20232024 to $1.31 billion in 2025 primarily due to increasesdecreases in loan rates:

Interest expense increaseddecreased by $382.9$94.1 million, or 325.6%,14.2%, to $500.5$566.8 million in 2023,2025, compared with $117.6$660.9 million in 2022, primarily due to increases in interest rates on average interest-bearing deposits.2024. The overall increasedecrease in interest expense was primarily due to increasesdecreases in rates on interest-bearinginterest bearing deposits, and rate increasesdecreases in other borrowings and long term debt as discussed below:

Non-interest income decreasedincreased $12.6$19.8 million, or 18.5%,35.5%, to $75.4 million for 2025, from $55.7 million forin 2024, fromcompared to $68.3 million in 2023, compared to $56.8 million in 2022.2023. Non-interest income includes depository service fees, letters of credit commissions, net gains (losses) from equity securities, securities gains (losses), gains (losses) from loan sales, gains from sale of premises and equipment, gains on acquisition, and other sources of fee income. These other fee-based services include wire transfer fees, safe deposit fees, fees on loan-related activities, fee income from our Wealth Management division, and foreign exchange fees.

The increase in non-interest income from 20222024 to 20232025 was primarily due to a $17.9$14.9 million increase in unrealized gain on equity securities, $2.8 million in gain on interest rate swaps, $1.2 million in gain on sale of loans, and a $1.1 million increase in wealthletters managementof fees,credit commissions, offset, in part, by a $3.0 million increase in securities losses, a $3.2$1.1 million decrease in derivativesecurities fees and a $1.7 million decrease in BOLI death benefit.gains.

Non-interest expense totaled $380.5$355.1 million in 20232025 compared to $303.4$374.7 million in 2022.2024. The increasedecrease of $77.1$19.6 million, or 25.4%,5.2%, in non-interest expense in 20232025 compared to 20222024 was primarily due to a combination of the following:

The efficiency ratio, defined as non-interest expense divided by the sum of net interest income before provision for loan losses plus non-interest income, increaseddecreased to 46.97%43.41% in 20232025 compared to 38.38%51.35% in 20222024 due primarily to higher net interest income offsetand bynon-interest anincome increaseand inlower non-interest expense as explained above.

In making this assessment, management considers the extent to which fair value is less than amortized cost, the payment structure of the security, failure of the issuer of the security to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. Any fair value changes that have not been recorded through an allowance for credit losses is recognized in other comprehensive income. In the current period, management evaluated the securities in an unrealized loss position and determined that their unrealized losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. Accordingly, we determined the unrealized losses were not credit-related and recognized the unrealized losses in "other comprehensive income/(loss)" in stockholders' equity. Although we periodically sell securities for portfolio for management purposes, we do not foresee having to sell any impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any impaired securities before recovery of their amortized cost.

Loans represented 87.4%89.6% of average interest-earning assets during 2024,2025, compared with 91.0%87.4% during 2023.2024. Gross loans decreasedincreased by $172.2$771.2 million, or 0.9%,4.0%, to $20.15 billion at December 31, 2025, compared with $19.38 billion at December 31, 2024, compared with $19.55 billion at December 31, 2023.2024. The decreaseincrease in gross loans was primarily attributable to the following:

The BankBank's primarilyprimary usesfunding sources are client depositsdeposits, tosupplemented fund its operations, and to a lesser extentby advances from the Federal Home Loan Bank (“FHLB”), and other borrowings. The Bank’s deposits are generally obtained from the Bank’s geographic market area. The Bank utilizes traditional marketing methods to attract new clients and deposits, by offering a wide variety of products and services and utilizing various forms of advertising media. Although the vast majority of the Bank’s deposits are retail in nature, the Bank does engage in certain wholesale activities, primarily accepting deposits generated by brokers. The Bank considers wholesale deposits to be an alternative borrowing source rather than a client relationship and, as such, their levels are determined by management’s decisions as to the most economic funding sources. Brokered-deposits totaled $1.06$1.59 billion, or 5.4%,7.6%, of total deposits, at December 31, 2024,2025, compared to $1.52$1.06 billion, or 7.9%,5.4%, at December 31, 2023.2024.

The Bank’s total deposits increased $360.8$1.21 million,billion, or 1.9%,6.1%, to $20.89 billion at December 31, 2025, from $19.69 billion at December 31, 2024, from $19.33 billion at December 31, 2023, primarily due to aan $323.0increase of $427.7 million, or 10.6% increase12.7% in money market deposits, a $233.8$248.1 million, or 2.5%,19.8% increasein saving deposits, $221.3 million, or 6.7% in non-interest bearing deposit, $164.4 million, or 7.5% in NOW deposits, and $146.6 million, or 1.5%, in time deposits and a $213.6 million , or 20.6% increase in saving deposits offset, in part, by a $244.7 million, or 6.9%, decrease in non-interest-bearing demand deposits and a $165.0 million, or 7.0%, decrease in NOW deposits.

Each institution should account for the special assessment in accordance with U.S. generally accepted accounting principles (GAAP). In accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 450, Contingencies (FASB ASC Topic 450), an estimated loss from a loss contingency shall be accrued by a charge to income if information indicates that it is probable that a liability has been incurred and the amount of loss is reasonably estimable. Therefore, an institution will recognize in the Call Report and other financial statements the accrual of a liability and estimated loss (i.e., expense) from a loss contingency for the special assessment when the institution determines that the conditions for accrual under GAAP have been met. Each institution should account for any shortfall special assessment in accordance with FASB ASC Topic 450 when the conditions for accrual under GAAP have been met. As a result, the Company recordedhas anrecognized $11.3$11.7 million cumulatively related to the special assessment fee in the fourth quarteras of 2023December and31, an additional $1.8 million in 2024.2025.

Holders of common stock are entitled to dividends as and when declared by our Board of Directors out of funds legally available for the payment of dividends. Although we have historically paid cash dividends on our common stock, we are not required to do so. We increased the common stock dividend from $0.24 per share in the fourth quarter of 2017, to $0.31 per share in the fourth quarter of 2018, to $0.34 per share in the fourth quarter of 2021. On February 13, 2026, the Company declared a cash dividend of $0.38 per share for the first quarter of 2026 to common shareholders of record on February26, 2026. The amount of future dividends 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.

Total non-performing portfolio assets increaseddecreased $103.0$52.6 million, or 110.4%,26.8%, to $143.7 million at December 31, 2025, compared to $196.3 million at December 31, 2024, compared to $93.3 million at December 31, 2023, primarily due to ana increasedecrease of $102.5$56.8 million in total non-accrual loans and $3.6 million in other real estate owned, offset by decrease of $3.1 million in loans 90 days or more past due.due, offset by increase of $7.3 million in other real estate owned.

As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets increaseddecreased to 0.71% at December 31, 2025, from 1.01% at December 31, 2024, from 0.48% at December 31, 2023.2024. The non-performing portfolio loan, excluding loans held for sale, coverage ratio, defined as the allowance for credit losses to non-performing loans, excluding loans held for sale, decreasedincreased to 183.79% at December 31, 2025, from 98.98% at December 31, 2024, from 221.58% at December 31, 2023.2024. The following table presents the breakdown of total non-accrual, past due, and restructured loans for the past five years:

Total non-accrual portfolio loans were $112.4 million at December 31, 2025, decreased $56.8 million, or 33.6%, from $169.2 million at December 31, 2024, increased $102.5 million, or 153.7%, from $66.7 million at December 31, 2023.2024. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information, less cost to sell. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly.

The allowance for loan losses to non-performing loans was 172.82% at December 31, 2025, compared to 93.39% at December 31, 2024, compared to 209.33% at December 31, 2023, primarily due to ana increasedecrease in non-performingnon-accrual loans. Non-accrual loans also include those modifications to borrowers experiencing financial difficulties that do not qualify for accrual status.

As of December 31, 2024,2025, construction loans of $227.9$225.9 million were disbursed with pre-established interest reserves of $31.3$34.0 million compared to $220.6$227.9 million of such loans disbursed with pre-established interest reserves of $41.3$31.3 million at December 31, 2023.2024. The balance for construction loans with interest reserves which have been extended was $3.3 million with pre-established interest reserves of $95 thousand at December 31, 2025, compared to $4.2 million with pre-established interest reserves of $53 thousand at December 31, 2024,2024. comparedLand toloans $6.4of $15.3 million were disbursed with pre-established interest reserves of $0.5$1.3 million at December 31, 2023.2025, Therecompared wereto no land loans disbursed with pre-established interest reserves at December 31, 2024, compared to $12.9 million of land loans disbursed with pre-established interest reserves of $0.4 million at December 31, 2023.2024. There were no land loans with interest reserves which have been extended at December 31, 2024,2025, and December 31, 2023.2024.

The Federal banking regulatory agencies issued final guidance on December 6, 2006, regarding risk management practices for financial institutions with high or increasing concentrations of commercial real estate ("CRE") loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: (1) total reported loans for construction, land development, and other land represent 100% of the institution's total risk-based capital, and (2) both total CRE loans represent 300% or more of the institution's total risk-based capital and the institution's CRE loan portfolio has increased 50% or more within the last thirty-six months. The Bank’s loans for construction, land development, and other land represented 15%14% of total risk-based capital as of December 31, 2024,2025, and 19%15% as of December 31, 2023.2024. Total CRE loans represented 289%287% of total risk-based capital as of December 31, 2024,2025, and 292%289% as of December 31, 2023,2024, which were within both the Bank’s internal policy limit ofand 400%supervisory of total capital.criteria. See Part I — Item 1A — “Risk Factors” for a discussion of some of the factors that may affect us.

The weighted-average loan-to-value (“LTV”) ratio of the total CREC loan portfolio was 49% and 50% as of December 31, 2024,2025, and 2023, respectively.2024. Most of our CREC loan property types had a low weighted-average LTV ratio. Approximately 85%86% and 83%85% of total CREC loans had an LTV ratio of 60% or lower as of December 31, 2024,2025, and 2023,2024, respectively.

Commercial — Multifamily Residential Loans. The multifamily residential loan portfolio is largely comprised of loans secured by residential properties with five or more units. Multifamily residential loans totaled $2.89 billion as of December 31, 2025, compared with $2.72 billion as of December 31, 2024, compared with $2.60 billion as of December 31, 2023, and accounted for 14% and 13% of total loans held-for investment as of December 31, 2024,2025, and 2023, respectively.2024. The Company offers a variety of first lien mortgages, including fixed- and variable-rate loans. 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. In comparison, as of December 31, 2024, 18% and 41% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2023, 20% and 40% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively.

Commercial — Construction and Land Loans. Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $408.0 million as of December 31, 2025, compared with $403.1 million as of December 31, 2024, compared with $494.5 million as of December 31, 2023, and accounted for 2% and 3% of total loans held-for-investment as of December 31, 2024,2025, and 2023, respectively.2024. Construction loan exposure was made up of $337.6 million in loans outstanding, plus $235.3 million in unfunded commitments as of December 31, 2025, compared with $319.6 million in loans outstanding, plus $186.5 million in unfunded commitments as of December 31, 2024,2024. compared with $422.6 million inLand loans outstanding,totaled plus $280.5$70.4 million in unfunded commitments as of December 31, 2023.2025, Landcompared loans totaledwith $83.4 million as of December 31, 2024, compared with $71.8 million as of December 31, 2023.2024.

In calculating our allowance for credit losses for the year ended 2024,2025, an increase in Special Mention-rated loans and an increase in individually evaluated loan reserves accounted for the changeincreased in Moody’s forecast of future GDP, unemployment rates, CRE and home price indexes, did not result in a significant impact to the allowance for credit losses.allowance. Our methodology and framework along with the 8-quarter reasonable and supportable forecast period and the 4-quarter reversion period have remained consistent since the implementation of CECL. Certain management assumptions are reassessed every quarter based on current expectations for credit losses, while other assumptions are assessed and updated on at least an annual basis.

Under the Company’s CECL methodology, nine portfolio segments with similar risk characteristics are evaluated for expected loss. Six portfolios are modeled using econometric models and three smaller portfolios are evaluated using a simplified loss-rate method that calculates lifetime expected credit losses for the respective pools (simplified approach). The six portfolios subject to econometric modeling include residential mortgages; commercial and industrial loans (“C&I”); construction loans; commercial real estate (“CRE”) for multifamily loans; CRE for owner-occupied loans; and other CRE loans. We estimate the probability of default during the reasonable and supportable forecast period using separate econometric regression models developed to correlate macroeconomic variables, (GDP, unemployment, CRE prices and residential mortgage prices) to historical credit performance for each of the six loan portfolios from the fourth quarter of 2007 through the fourth quarter of 2022.2024. Loss given default rates are computed based on the net charge-offs recognizedestimated and then applied to the expected exposure at default of defaulted loans starting with the fourth quarter of 2007 through the fourth quarter of 2022.2025. The probability of default and the loss given default rates are applied to the expected amount at default at the loan level based on contractual scheduled payments and estimated prepayments. The amounts so calculated comprise the quantitative portion of the allowance for credit losses.

The Company’s CECL methodology utilizes an eight-quarter reasonable and supportable (“R&S”) forecast period, and a four-quarter reversion period. Management relies on multiple forecasts, blending them into a single loss estimate. Generally speaking, the blended scenario approach would include the Baseline, the Alternative Scenario 1 – Upside – 10th Percentile and the Alternative Scenario 3 – Downside – 90th Percentile forecasts. After the R&S period, the Company will revert to straight-line for the four-quarter reversion period to the long-term loss rates for each of the six portfolios of loans. The contractual term excludes renewals and modifications but includes pre-approved extensions and prepayment assumptions where applicable.

Our allowance for credit losses is sensitive to a number of inputs, including macroeconomic forecast assumptions and credit rating migrations during the period. Our macroeconomic forecasts used in determining the December 31, 2024,2025, allowance for credit losses consisted of three scenarios as provided by ana outsidereputable third-party economic forecaster. AfterThis increasingquarter the scenario weighting ofremains the same from the previous quarter, with the greatest weight placed on the baseline scenario and more weight placed on the downside scenario than the upside scenario, as the macroeconomic forecasts project weak growth in 2022the tonear reflectterm, our expectations that aavoiding recession wasbut morestill likelycapturing than not we reduced the weightingseveral of the severechallenges scenario slightly during the third quarter of 2023, in light of the continued strength offacing the economy. With the economy continuing to expand at a solid pace, the downside scenario weighting was once again reduced while giving greater weight to the baseline scenario. The baseline scenario reflects modest ongoingmoderate GDP growth andin spite of a steadyslight declinerise in the unemployment raterate, starting from 4.15%4.5% in the first quarter of 20252026, peaking at 4.8% by the fourth quarter of 2026, and decreasing back down to 4.09%4.6% by the end of the R&S period. The upside scenario assumes the impacts of tariffs and deportations on the economy are less than expected and reflects higher GDP growth and lower unemployment rates with the stronger economy resulting in inflation,inflation and interest rates a bit higher than in the baseline scenario, though the Federal Reserve is projected to continue to cut the fed funds rate in the first quarter of 2025.scenario. The downside scenario contemplatesassumes athe economy falls into recession as the impacts of tariffs, deportations and political tensions are worse than expected and rising inflation prompts the Federal Reserve to initially raiselower the fed funds rate before lowering again belowduring the baseline in the thirdfirst quarter of 2025,2026. resultingThis results in negative GDP growth for three quarters peaking at 3.9%3.8% in the third quarter of 2025,2026, rising unemployment that peaks at 8.3%8.4% in the first quarter of 2026,2027, a decline in CRE prices of 18.9%21% and a decline in residential home prices of 11.3%12.3% during the forecast period. As of December 31, 2024, we slightly decreased the weighting on our downside scenario while placing greater weight on the base scenario, with a small weighting on the upside scenario.

The allowance allocated to commercial loans was $39.1 million at December 31, 2025, compared to $57.8 million at December 31, 2024, compared to $53.8 million at December 31, 2023.2024. The increasedecrease was primarily due to ana increasedecrease in non-accrual loans.

The allowance allocated to commercialresidential real estatemortgage loans and equity lines was $79.6$24.6 million at December 31, 2024,2025, compared to $74.4$16.2 million at December 31, 2023.2024. The increase iswas primarily due primarily to an increase in commercialresidential realmortgage estateloans and an increase in non-accrual loans.

The allowance allocated for construction loans remainedwas the$6.5 samemillion ofat December 31, 2025, compared to $8.2 million at December 31, 2024,2024. andThe Decemberdecrease 31,was 2023.primarily due to a decrease in average construction loans.

The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary. At December 31, 2024,2025, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.44$8.85 billion. TotalThere were no total advances from the FHLB of San Francisco were $60.0 million and standby letter of credits issued by FHLB on the Company’s behalf were $915.0$953.5 million as of December 31, 2024.2025. These borrowings bear fixed rates and are secured by loans. See Note 9 to the Consolidated Financial Statements. At December 31, 2024,2025, the Bank pledged $474.8$1.42 millionbillion of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $395.1$1.28 millionbillion from the Federal Reserve Bank Discount Window at December 31, 2024.2025.

Net interest income before provision for credit losses increased $17.6$19.7 million, or 10.0%,10.9%, to $194.2$200.9 million during the firstsecond quarter of 2026, compared to $176.6$181.2 million during the same quarter ain year ago.2025. The increase was primarily due primarily to a decrease inlower interest expense fromon deposits, partially offset by a small decrease inlower interest inincome on deposits with other banks.

The net interest margin was 3.43%3.48% for the firstsecond quarter of 2026 compared to 3.25%3.27% for the firstsecond quarter of 2025.

For the firstsecond quarter of 2026, the yield on average interest-earning assets was 5.70%,5.66%, the cost of funds on average interest-bearing liabilities was 2.99%,2.89%, and the average cost of interest-bearing deposits was 2.96%.2.86%. In comparison, for the firstsecond quarter of 2025, the yield on average interest-earning assets was 5.89%,5.83%, the cost of funds on average interest-bearing liabilities was 3.46%,3.37%, and the average cost of interest-bearing deposits was 3.43%.3.35%. The decrease in the yieldcost on average interest-bearing liabilities andresulted 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 on deposits and lower interest ratesearned on loans and securities, respectively.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 2.71%2.77% for the quarter ended MarchJune 31,30, 2026, compared to 2.43%2.46% for the same quarter ain year ago.2025.

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 assets and liabilities for the three months ended MarchJune 31,30, 2026, and 2025. The average outstanding amounts included in the table are daily averages.

The following table summarizes the changes in interest income and interest expense attributable to changes in volume and changes in interest rates for the three months ended MarchJune 31,30, 2026 and 2025:

The Company recorded a provision for credit losses of $18.2$11.2 million in the firstsecond quarter of 2026 compared withto $15.5$11.2 million in the firstsecond quarter of 2025. As of MarchJune 31,30, 2026, the allowance for loan losses,losses increased $12.9$23.0 million to $208.9$218.9 million, or 1.03%1.06% of total loans,loans compared to $195.9 million, or 0.97% of total loans as of December 31, 2025.

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$21.4 million for the firstsecond quarter of 2026, an increase of $9.5$6.0 million, or 84.8%,39.0%, compared to $11.2$15.4 million for the firstsecond quarter of 2025. The increase was primarily due to ana equity securities gain of $17.3$13.0 million in first quarter of 2026 compared to a loss of $4.2 millionincrease in the first quarter of 2025 for a net increase of $21.5 million gaingains from equity securities and ana $3.0 million increase of $1.1 million in derivativewealth management fees, partially offset by ana impairment$10.6 million net loss on the sale of $15.7 million on available-for-sale investment securities in connection with the Company's decisionrelated to sell certain impairedinvestment securities withinrepositioning that portfolio when compared to the same quarter a year ago.activities.

Non-interest expense increasedwas $1.0$92.3 million for the second quarter of 2026, an increase of $3.2 million, or 1.2%,3.6% compared to $86.7$89.1 million infor the firstsecond quarter of 2026 compared to $85.7 million in the same quarter a year ago.2025. The increase in non-interest expense in the first quarter of 2026 was primarily due to ana $3.6 million increase of $3.1 million in salaries and employee benefits, ana $1.4 million increase ofin $1.3computer and equipment expenses, and a $0.7 million increase in other real estate owned expense, partially offset by a $1.5 million decrease ofin $2.3professional service expense, and a $1.3 million decrease 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.housing. The efficiency ratio was 40.35%41.53% in the firstsecond quarter of 2026 compared to 45.60%45.34% for the same quarter ain year ago.2025.

The effective tax rate for the firstsecond quarter of 2026 was 21.0%22.4% compared to 19.8%19.6% for the firstsecond quarter of 2025. The effective tax rate includes the impact of low-income housing tax credits in 2025.

Total assets were $24.05$24.65 billion as of MarchJune 31,30, 2026, aan decreaseincrease of $180.9$423.2 million, or 0.7%,1.7%, from $24.23 billion as of December 31, 2025.

The carrying value of our securities available-for-sale (“AFS”) portfolio was $1.68 billion and $1.66 billion as of MarchJune 31,30, 20262026, and December 31, 2025, respectively. The increase in the AFS securities portfolio consistswas primarily ofdue to a net addition of $87.8$82.9 million in treasury securities wassecurities, partially offset by the amortization of existing securities during the threesix months ended MarchJune 31,30, 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 both June 30, 2026, and December 31, 2025.

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 MarchJune 31,30, 20262026, and December 31, 2025. Additionally, there were no credit losses recognized in earnings during the threesix months ended MarchJune 31,30, 2026, and December 31, 2025.

During the quarter, the Company recorded a $15.7$10.6 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$160.2 million, were subsequently sold in AprilJune 2026, resulting in a realized loss of $15.7$10.6 million. The AFS portfolio had an effective duration of 1.92.03 years at MarchJune 31,30, 2026, compared withto 2.01.9 years at December 31, 2025.

Gross loans held for investment were $20.17$20.62 billion at MarchJune 31,30, 2026, an increase of $27.4$474.1 million, or 0.1%,2.4%, from $20.15 billion at December 31, 2025. The increase was primarily due to an increase of $98.0$340.4 million, or 3.1%,10.7%, in commercial loans, an increase of $24.0$214.6 million, or 0.2%,2.0%, in commercial real estate loans, and an increase of $6.7$7.8 million, or 3.0%3.5%, in equity lines, partially offset by a decrease of $53.6$89.2 million, or 0.9%26.4% in residential mortgage loans, and a decrease of $48.5 million, or 14.4% in real estate construction loans.

The loan held for investment balances and composition at MarchJune 31,30, 2026, compared to December 31, 2025, are set forth below:

The ratio of non-performing assets to total assets was 0.53%0.59% as of MarchJune 31,30, 2026, compared to 0.59% as ofand December 31, 2025. Total non-performing assets decreasedincreased $15.8$1.7 million, or 11.0%1.2%, to $127.9$145.4 million at MarchJune 31,30, 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 $23.4$1.0 million, or 20.8%, in non-accrual loans, offset by, an increase of $4.5 million, or 449.1%,100.0%, in accruing loans past due 90 days or more, and ana increasedecrease of $3.1$0.7 million, or 10.2%,0.6%, in othernon-accrual real estate owned.loans.

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 Marchboth 31,June 2026,30, 2026 and December 31, 2025, respectively.2025. The non-performing loan portfolio coverage ratio, defined as the allowance for credit losses to non-performing loans, increased to 237.50%209.33% as of MarchJune 31,30, 2026, from 183.79% as of December 31, 2025.

The following table sets forth the changes in non-performing assets as of MarchJune 31,30, 2026, compared to December 31, 2025, and to MarchJune 31,30, 2025:

As of MarchJune 31,30, 2026, total non-accrual loans were $89.0$111.7 million, a decrease of $23.4$0.7 million, or 20.8%,0.6%, from $112.4 million at December 31, 2025, and a decrease of $65.6$62.5 million, or 42.4%,35.9%, from $154.6$174.2 million at MarchJune 31,30, 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.

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:

For non-accrual loans, the amounts previously charged-off representrepresented 7.7%6.3% and 14.4% of the contractual balances forof non-accrual loans as of MarchJune 31,30, 2026,2026 and 14.4% as of December 31, 2025.2025, respectively. As of MarchJune 31,30, 2026, $81.3$103.2 million, or 91.4%,92.4%, of the $89.0$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 intended to provideupdate updatedthe factors used in evaluating potential loss.losses.

The allowance for loan losses to non-performing loans was 220.95%195.97% as of MarchJune 31,30, 2026, compared to 172.82% as of December 31, 2025. The increase was primarily due primarily to a netan increase in the allowance for loan losses and a decrease in non-accrual loans.

In accordance with customary banking practice, construction loans and land development loans generally are originated wherewith 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 tobefore 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 towardstoward 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.

As of MarchJune 31,30, 2026, construction loans of $197.1$227.5 million were disbursed with pre-established interest reserves of $29.1$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 havehad been extended with pre-established interest reservesas of $380June thousand at March 31,30, 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 $18.1$20.4 million were disbursed with pre-established interest reserves of $1.5$1.3 million at MarchJune 31,30, 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 whichthat havehad been extended as of MarchJune 31,30, 2026, and December 31, 2025.

At MarchJune 31,30, 2026, and December 31, 2025, the Bank had no loanloans on non-accrual status with available interest reserves. There were no non-accrual residential construction loans, non-accrual non-residential construction loans, andor non-accrual land loans that were originated with pre-established interest reserves as of MarchJune 31,30, 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 two factors.

Most of the Company’s business activities are with clients located in the high-density Asian-populated areas ofwith 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 hasdoes nonot have a significant concentration in any single commercial industry concentration,section, and generally 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 sale by the borrowersborrowers' sales of the collateral.

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 capitalcapital, 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%10% of the Bank’s total risk-based capital as of MarchJune 31,30, 2026, and 14% as of December 31, 2025. Total CRE loans represented 278%277% of total risk-based capital as of MarchJune 31,30, 2026, and 287% as of December 31, 2025, which were within the Bank’s internal limit of 400%, of total capital.

The Company’s total CREC loan portfolio is diversified by property type with an average CREC loan size of $2.0 million as of MarchJune 31,30, 2026, and December 31, 2025. The following table summarizes the Company’s total CREC loans by property type as of MarchJune 31,30, 2026, and December 31, 2025:

The weighted-average loan-to-value (“LTV”) ratio of the total CREC loan portfolio was 49% as of MarchJune 31,30, 2026, and December 31, 2025. Approximately 86% of total CREC loans had an LTV ratio of 60% or lower as of MarchJune 31,30, 2026, and December 31, 2025.

The following tables provide a summary of the Company’s CREC, multifamily residential, and construction and land loans by geography as of MarchJune 31,30, 2026, and December 31, 2025. The distribution of the total CREC loan portfolio reflects the Company’s geographical footprint, which is primarily concentrated in California:

ThereCalifornia were 45% andrepresented 46% of total CREC loans concentrated in California as of Marchboth 31,June 30, 2026, and December 31, 2025, respectively.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.

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$7.83 billion as of MarchJune 31,30, 2026, compared withto $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 MarchJune 31,30, 2026, and December 31, 2025. Interest rates on CRE loans may be fixed or variable. As of MarchJune 31,30, 2026, 21%22% and 40%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.

Owner-occupied properties comprised 25%26% of the CRE loans as of MarchJune 31,30, 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.

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$2.88 billion as of MarchJune 31,30, 2026, compared withto $2.89 billion as of December 31, 2025, and accounted for 14% of total loans held-for investment,held-for-investment, not including loans held for sale, as of MarchJune 31,30, 2026, and December 31, 2025. The Company offers a variety of first lien mortgages, including fixed and variable-rate loans. As of MarchJune 31,30, 2026, 22%23% and 40%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.

Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $360.7$310.4 million as of MarchJune 31,30, 2026, compared withto $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 MarchJune 31,30, 2026, and December 31, 2025. Construction loan exposure was made up of $289.0$248.4 million in outstanding loans, plus $199.8$269.0 million in unfunded commitments as of MarchJune 31,30, 2026, compared withto $337.6 million in outstanding loans, plus $235.3 million in unfunded commitments as of December 31, 2025. Land loans totaled $71.7$62.0 million as of MarchJune 31,30, 2026, compared withto $70.4 million as of December 31, 2025.

The ACL is also influenced by the macroeconomic forecasts used in the Company’s CECL model. The MarchJune 31,30, 2026 estimate incorporated multiple forward‑looking economic scenarios obtained from a reputable third‑party forecaster. These scenarios reflect a range of potential economic outcomes and include a baseline view of expected conditions, along with more optimistic and more adverse alternatives. Management applies judgment in determining how these scenarios are incorporated into the allowance estimate, taking into account prevailing economic uncertainty and risks.

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$72.1 million as of MarchJune 31,30, 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.

Total deposits were $20.68$21.06 billion as of MarchJune 31,30, 2026, aan decreaseincrease of $218.5$167.5 million, or 1.0%0.8% from $20.89 billion as of December 31, 2025.

The Company calculates its uninsured deposits based on the methodologies and assumptions used for regulatory reporting. Total uninsured deposits were $10.08$10.39 billion as of MarchJune 31,30, 2026, decreasingan increase of approximately $116.5$199.5 million, from $10.19 billion as of December 31, 2025. Excluding $865.3$847.3 million in collateralized deposits, the uninsured and uncollateralized deposits of $9.21$9.55 billion waswere 44.6%45.3% of total deposits as of MarchJune 31,30, 2026. OurAs of June 30, 2026, our unused borrowing capacity from the Federal Home Loan Bank as of March 31, 2026, was $7.95$7.05 billionbillion, and our unpledged securities at March 31, 2026, waswere $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 MarchJune 31,30, 2026.

The following table sets forth the maturity distribution of time deposits as of MarchJune 31,30, 2026:

FDIC Special Assessment and Uninsured Deposits

The following table summarizes the Company’s contractual obligations to make future payments as of MarchJune 31,30, 2026. Payments for deposits and borrowings do not include interest. Payments related to leases are based on actual payments specified in the underlying contracts:

Total equity was $2.99$3.05 billion as of MarchJune 31,30, 2026, an increase of $61.3$121.2 million, from $2.93 billion as of December 31, 2025, primarily due to net income of $86.9$179.1 million, other comprehensive income of $10.2$16.1 million, stock-based compensation of $1.6$3.9 million, stock issued to directors of $0.9 million, and proceeds from dividend reinvestment of $0.7$1.3 million, offset by common stock cash dividends of $25.4$50.9 million, and purchase of treasury stock of $12.6$26.8 million and shares withheld related to net share settlement of RSUs of $2.4 million.