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What changed in CATHAY GENERAL BANCORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CATHAY GENERAL BANCORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+224 added−226 removedSource: 10-K (2026-03-02) vs 10-K (2025-02-28)

Top changes in CATHAY GENERAL BANCORP's 2025 10-K

224 paragraphs added · 226 removed · 188 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

35 edited+13 added−7 removed256 unchanged
Biggest changeWhile the agencies’ efforts to-date, including the Principles, have focused on banking organizations with $100 billion or more in total assets, their supervisory expectations on climate risk management practices ultimately may apply to smaller banking organizations such as the Bank. In addition, states such as California, are taking similar actions on climate-related financial risks.
Biggest changeHowever, they have reaffirmed that all banking organizations, regardless of size, are expected under existing safety and soundness standards to maintain risk management practices that appropriately address all material risks in their operating environment, which may include climate-related financial risks. In addition, states such as California are taking similar actions on climate-related financial risks.
Deen 62 Executive Vice President and Chief Risk Officer of the Bank since January 21, 2025; Executive Vice President, Head of Operational Risk for its Basel Operational Risk Program from 2018 to 2023 as well as Chief Ethics and Conduct Officer from 2022 to 2023 at Bank of the West which was acquired by Bank of Montreal in 2023; Executive Vice President, Head of International Risk Oversight at Wells Fargo from 2013 to 2017; and Managing Director, Head of Global Compliance Strategy, Technology and Operations at JPMorgan Chase from 2008 to 2013.
Deen 63 Executive Vice President and Chief Risk Officer of the Bank since January 21, 2025; Executive Vice President, Head of Operational Risk for its Basel Operational Risk Program from 2018 to 2023 as well as Chief Ethics and Conduct Officer from 2022 to 2023 at Bank of the West which was acquired by Bank of Montreal in 2023; Executive Vice President, Head of International Risk Oversight at Wells Fargo from 2013 to 2017; and Managing Director, Head of Global Compliance Strategy, Technology and Operations at JPMorgan Chase from 2008 to 2013.
NASDAQ has also adopted corporate governance rules, which are intended to allow stockholders and investors to more easily and efficiently monitor the performance of companies and their directors. Under the Sarbanes-Oxley Act, management and the Bancorp’s independent registered public accounting firm are required to assess the effectiveness of the Bancorp’s internal control over financial reporting as of December 31, 2024.
NASDAQ has also adopted corporate governance rules, which are intended to allow stockholders and investors to more easily and efficiently monitor the performance of companies and their directors. Under the Sarbanes-Oxley Act, management and the Bancorp’s independent registered public accounting firm are required to assess the effectiveness of the Bancorp’s internal control over financial reporting as of December 31, 2025.
The Bancorp is the holding company of Cathay Bank, a California state-chartered commercial bank (“Cathay Bank” or the “Bank”), and eleven limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner. The Bancorp also owns 100% of the common stock of five statutory business trusts created for the purpose of issuing capital securities.
The Bancorp is the holding company of Cathay Bank, a California state-chartered commercial bank (“Cathay Bank” or the “Bank”), and twelve limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner. The Bancorp also owns 100% of the common stock of five statutory business trusts created for the purpose of issuing capital securities.
As of December 31, 2024, all securities and insurance products provided by Cathay Wealth Management are offered by, and all financial consultants are registered with, Cetera Investment Services LLC, a registered securities broker/dealer and licensed insurance agency and member of the Financial Industry Regulatory Authority and Security Investor Protection Corporation. Cetera Investment Services LLC and Cathay Bank are independent entities.
As of December 31, 2025, all securities and insurance products provided by Cathay Wealth Management are offered by, and all financial consultants are registered with, Cetera Investment Services LLC, a registered securities broker/dealer and licensed insurance agency and member of the Financial Industry Regulatory Authority and Security Investor Protection Corporation. Cetera Investment Services LLC and Cathay Bank are independent entities.
As of December 31, 2024, the Bank offered savings accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. These products are priced generally to promote growth of deposits in a safe and sound manner. The Bank’s deposits are generally obtained from residents within its geographic market area.
As of December 31, 2025, the Bank offered savings accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. These products are priced generally to promote growth of deposits in a safe and sound manner. The Bank’s deposits are generally obtained from residents within its geographic market area.
Liu 58 President and Chief Executive Officer, and Director of the Bancorp since October 2020; Chief Executive Officer of the Bank since October 2020; Director of the Bank since October 2019; President of the Bank from October 2019 to September 2020; Executive Vice President and Chief Operating Officer of the Bank from February 2019 to September 2019; Executive Vice President and Chief Lending Officer of the Bank from 2016 to 2019; Senior Vice President and Deputy Chief Lending Officer of the Bank from 2015 to 2016; Senior Vice President and Assistant Chief Lending Officer of the Bank from 2014 to 2015; Chief Lending Officer at Banc of California (formerly known as Pacific Trust Bank) from 2011 to 2014.
Liu 59 President and Chief Executive Officer, and Director of the Bancorp since October 2020; Chief Executive Officer of the Bank since October 2020; Director of the Bank since October 2019; President of the Bank from October 2019 to September 2020; Executive Vice President and Chief Operating Officer of the Bank from February 2019 to September 2019; Executive Vice President and Chief Lending Officer of the Bank from 2016 to 2019; Senior Vice President and Deputy Chief Lending Officer of the Bank from 2015 to 2016; Senior Vice President and Assistant Chief Lending Officer of the Bank from 2014 to 2015; Chief Lending Officer at Banc of California (formerly known as Pacific Trust Bank) from 2011 to 2014.
Chan 47 Senior Vice President, General Counsel and Corporate Secretary of Bancorp and the Bank since 2020; Sustainability Officer of Bancorp and the Bank since 2022; First Vice President and Associate General Counsel of Bancorp and the Bank from 2015 to 2020; Senior Counsel of Business Banking Group at Wells Fargo Bank from 2014 to 2015; and Senior Associate of the Finance Department at Latham & Watkins LLP from 2002 to 2011.
Chan 48 Senior Vice President, General Counsel and Corporate Secretary of Bancorp and the Bank since 2020; Sustainability Officer of Bancorp and the Bank since 2022; First Vice President and Associate General Counsel of Bancorp and the Bank from 2015 to 2020; Senior Counsel of Business Banking Group at Wells Fargo Bank from 2014 to 2015; and Senior Associate of the Finance Department at Latham & Watkins LLP from 2002 to 2011.
Lo 63 Executive Vice President and Chief Administrative Officer of Cathay Bank since September 2023; Executive Vice President and Director of Commercial and International Banking of Cathay Bank from 2018 to 2023; Senior Vice President, Deputy Director of International and Business Banking and Deputy to Head of International and Commercial Banking of East West Bank from 2010 to 2018; and Executive Vice President and Group Manager in Orange County of Preferred Bank from 2007 to 2010.
Lo 64 Executive Vice President and Chief Administrative Officer of Cathay Bank since September 2023; Executive Vice President and Director of Commercial and International Banking of Cathay Bank from 2018 to 2023; Senior Vice President, Deputy Director of International and Business Banking and Deputy to Head of International and Commercial Banking of East West Bank from 2010 to 2018; and Executive Vice President and Group Manager in Orange County of Preferred Bank from 2007 to 2010.
Subsidiaries of Cathay Bank Cathay Holdings LLC (“CHLLC”) was incorporated in December 2007. The purpose of this subsidiary is to hold other real estate owned that was transferred from the Bank. As of December 31, 2024, CHLLC no longer owned properties.
Subsidiaries of Cathay Bank Cathay Holdings LLC (“CHLLC”) was incorporated in December 2007. The purpose of this subsidiary is to hold other real estate owned that was transferred from the Bank. As of December 31, 2025, CHLLC no longer owned properties.
Albert Sun 70 Executive Vice President and Chief Credit Officer of the Bank since January 2024; Executive Vice President, Special Advisor to the Office of the President from September 2023 to December 2023; Chief Credit Officer of Piermont Bank from 2022 to 2023: Chief Credit Officer of Grasshopper Bank from 2017 to 2021; and Chief Credit Officer of East West Bank from 2015 to 2017.
Albert Sun 71 Executive Vice President and Chief Credit Officer of the Bank since January 2024; Executive Vice President, Special Advisor to the Office of the President from September 2023 to December 2023; Chief Credit Officer of Piermont Bank from 2022 to 2023: Chief Credit Officer of Grasshopper Bank from 2017 to 2021; and Chief Credit Officer of East West Bank from 2015 to 2017.
In addition, because the Bank has more than $3.0 billion in total assets, it is subject to the FDIC requirements for audit committees of large institutions. 16 Table of Contents Regulation of Non-Bank Subsidiaries Non-bank subsidiaries are subject to additional or separate regulation and supervision by other state, federal and self-regulatory bodies.
In addition, because the Bank has more than $3.0 billion in total assets, it is subject to the FDIC requirements for audit committees of large institutions. Regulation of Non-Bank Subsidiaries Non-bank subsidiaries are subject to additional or separate regulation and supervision by other state, federal and self-regulatory bodies.
Cheng 80 Executive Chairman of the Boards of Directors of the Bancorp and the Bank since October 2016; Director of the Bancorp since 1990; Director of the Bank since 1982; Chairman of the Boards of Directors of the Bancorp and the Bank from 1994 to September 2016; President of the Bank from 1985 to March 2015; President and Chief Executive Officer of the Bancorp from 1990 to September 2016.
Cheng 81 Executive Chairman of the Boards of Directors of the Bancorp and the Bank since October 2016; Director of the Bancorp since 1990; Director of the Bank since 1982; Chairman of the Boards of Directors of the Bancorp and the Bank from 1994 to September 2016; President of the Bank from 1985 to March 2015; President and Chief Executive Officer of the Bancorp from 1990 to September 2016.
As of December 31, 2024, the Bancorp and the Bank met all requirements to be considered well-capitalized under the Basel III Capital Rules.
As of December 31, 2025, the Bancorp and the Bank met all requirements to be considered well-capitalized under the Basel III Capital Rules.
In addition, the Dodd-Frank Act requires the federal bank regulatory agencies and the SEC to establish joint regulations or guidelines prohibiting certain incentive-based payment arrangements. These regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in April 2011, but the regulations have not been finalized.
In addition, the Dodd-Frank Act requires the federal bank regulatory agencies and the SEC to establish joint regulations or guidelines prohibiting certain incentive-based payment arrangements. These regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in various forms, but the regulations have not been finalized.
In its last reported examination by the FDIC in June 2019, the Bank received a CRA rating of “Satisfactory.” ● Compliance with the Bank Secrecy Act, the USA Patriot Act, and other anti-money laundering laws (“AML”), and the regulations of the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”).
In its last reported examination by the FDIC in August 2025, the Bank received a CRA rating of “Satisfactory.” ● Compliance with the Bank Secrecy Act, the USA Patriot Act, and other anti-money laundering laws (“AML”), and the regulations of the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”).
As of December 31, 2024, the Bank has branch offices in Southern California (24 branches), Northern California (18 branches), New York (9 branches), Washington (four branches), Illinois (two branches), Texas (two branches), Maryland (one branch), Massachusetts (one branch), Nevada (one branch), New Jersey (one branch), and Hong Kong (one branch) and a representative office in Beijing, Shanghai, and Taipei.
As of December 31, 2025, the Bank has branch offices in Southern California (24 branches), Northern California (17 branches), New York (9 branches), Washington (four branches), Illinois (two branches), Texas (two branches), Maryland (one branch), Massachusetts (one branch), Nevada (one branch), New Jersey (one branch), and Hong Kong (one branch) and a representative office in Beijing, Shanghai, and Taipei.
Heng W. Chen 72 Executive Vice President, Chief Financial Officer, and Treasurer of the Bancorp since 2003; Executive Vice President of the Bank since 2003; Chief Financial Officer of the Bank since 2004. Diana G.
Heng W. Chen (1) 73 Executive Vice President, Chief Financial Officer, and Treasurer of the Bancorp since 2003; Executive Vice President of the Bank since 2003; Chief Financial Officer of the Bank since 2004. Diana G.
Our 14 member Board of Directors consists of 12 members of minority racial/ethnic group descent and 36% of the Board seats are held by women. Our commitment to inclusion extends to our community.
Our 12 member Board of Directors consists of 10 members of minority racial/ethnic group descent and 42% of the Board seats are held by women. Our commitment to inclusion extends to our community.
As of December 31, 2024, we have 64% of our employees participating in the Well-Being program. 6 Table of Contents Executive Officers of the Registrant The table below sets forth the names, ages, and positions at the Bancorp and the Bank of all executive officers of the Company as of February 14, 2025.
As of December 31, 2025, we have 55% of our employees participating in the Well-Being program. 6 Table of Contents Executive Officers of the Registrant The table below sets forth the names, ages, and positions at the Bancorp and the Bank of all executive officers of the Company as of February 27, 2026.
At December 31, 2024, (i) the Bancorp’s and the Bank’s common equity Tier 1 capital ratios were 13.54% and 13.84%, respectively; (ii) their total risk-based capital ratios were 15.08% and 14.76% respectively; (iii) their Tier 1 risk-based capital ratios were, 13.54% and 13.84% respectively; and (iv) their leverage capital ratios were, respectively, 10.96% and 11.20% respectively all of which exceeded the minimum percentage requirements to be deemed “well-capitalized” for regulatory purposes. 10 Table of Contents Bank regulators may also continue their past policies of expecting banks to maintain additional capital beyond the requirements of the Basel III Capital Rules.
At December 31, 2025, (i) the Bancorp’s and the Bank’s common equity Tier 1 capital ratios were 13.27% and 13.73%, respectively; (ii) their total risk-based capital ratios were 14.93% and 14.79% respectively; (iii) their Tier 1 risk-based capital ratios were, 13.27% and 13.73% respectively; and (iv) their leverage capital ratios were, respectively, 10.91% and 11.28% respectively all of which exceeded the minimum percentage requirements to be deemed “well-capitalized” for regulatory purposes. 10 Table of Contents Bank regulators may also continue their past policies of expecting banks to maintain additional capital beyond the requirements of the Basel III Capital Rules.
As of December 31, 2024, Cathay Bank employed approximately 1,266 regular full-time equivalent employees, of whom 1,226 were located in the United States and 40 were located in China, Hong Kong and Taiwan. Of the total number of employees, 749 are banking officers. None of the employees are represented by a union.
As of December 31, 2025, Cathay Bank employed approximately 1,268 regular full-time equivalent employees, of whom 1,229 were located in the United States and 39 were located in China, Hong Kong and Taiwan. Of the total number of employees, 774 are banking officers. None of the employees are represented by a union.
The Tax Reform Act replaces the corporate tax rates applicable under prior law, which imposed a maximum tax rate of 35%, with a reduced 21% tax rate for 2018.
The Tax Reform Act included a number of provisions that impact us, including the following: ● Tax Rate. The Tax Reform Act replaces the corporate tax rates applicable under prior law, which imposed a maximum tax rate of 35%, with a reduced 21% tax rate for 2018.
The Federal Deposit Insurance Act (FDI Act) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023.
The Federal Deposit Insurance Act (FDI Act) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023. See further discussion under Item 1A. Risk Factors-Operational Risks.
Additionally, any foreign-based subsidiaries would also be subject to foreign laws and regulations. Tax Cuts and Jobs Act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform Act”) was signed into law. The Tax Reform Act included a number of provisions that impact us, including the following: ● Tax Rate.
Additionally, any foreign-based subsidiaries would also be subject to foreign laws and regulations. 16 Table of Contents Tax Cuts and Jobs Act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform Act”) was signed into law.
At December 31, 2024, we had $23.05 billion in total consolidated assets, $19.20 billion in net loans, $19.69 billion in deposits, and $2.85 billion in shareholders’ equity.
At December 31, 2025, we had $24.23 billion in total consolidated assets, $19.94 billion in net loans, $20.89 billion in deposits, and $2.93 billion in shareholders’ equity.
The Company is a reporting entity under both laws and may incur compliance, maintenance and remediation costs to conform to such requirements. 15 Table of Contents Federal Home Loan Bank System The Bank is a member of the FHLB of San Francisco.
The Company is subject to both of these laws, as currently enacted, and expects to incur compliance, maintenance and remediation costs to conform to such requirements if they are upheld. 15 Table of Contents Federal Home Loan Bank System The Bank is a member of the FHLB of San Francisco.
Given the small volume of such loans, we do not believe that this regulation will have a significant impact on our operations. 11 Table of Contents Risk Committee Framework Pursuant to Federal Reserve Board regulations promulgated under authority of the Dodd-Frank Act, as originally adopted, as a publicly traded bank holding company with $10.0 billion in assets, we were required and have established and maintained a risk committee responsible for enterprise-wide risk management practices, comprised of an independent chairman and at least one risk management expert.
We cannot currently predict the nature and timing of future developments that may potentially impact CFPB rules, proposals, enforcement and supervision. 11 Table of Contents Risk Committee Framework Pursuant to Federal Reserve Board regulations promulgated under authority of the Dodd-Frank Act, as originally adopted, as a publicly traded bank holding company with $10.0 billion in assets, we were required and have established and maintained a risk committee responsible for enterprise-wide risk management practices, comprised of an independent chairman and at least one risk management expert.
In October 2023, the federal banking agencies released interagency guidance, “Principles for Climate-Related Financial Risk Management for Large Financial Institutions” (the “Principles”), which are intended to encourage banking organizations with $100 billion or more in assets to focus on key aspects of climate-related financial risk management.
In October 2023, the federal banking agencies issued final interagency guidance, “Principles for Climate-Related Financial Risk Management for Large Financial Institutions” (the “Principles”), which was intended to provide a high-level framework for management of climate-related financial risks by banking organizations with $100 billion or more in total assets.
The Principles cover six areas: governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis. The Principles also describe how large banking organizations should manage climate-related financial risks that can arise in risk categories such as credit, liquidity, and other financial risk, and operational, legal and compliance, and other nonfinancial risk.
The Principles addressed six areas—governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis—and described how climate-related financial risks could manifest across traditional risk categories, including credit, liquidity and other financial risks, and operational, legal/compliance and other nonfinancial risks. In 2025, the federal banking agencies rescinded the Principles.
See further discussion under Operational Risks. 13 Table of Contents Dividends Holders of the Bancorp’s common stock are entitled to receive dividends as and when declared by the board of directors out of funds legally available therefore under the laws of the State of Delaware.
Our deposit insurance premiums could increase in the future, which could have a material adverse impact on future earnings and financial condition. 13 Table of Contents Dividends Holders of the Bancorp’s common stock are entitled to receive dividends as and when declared by the board of directors out of funds legally available therefore under the laws of the State of Delaware.
In 2024, 79% of our employees are of Asian descent, 14% are members of non-Asian minority groups, and 7% are Caucasian. At the manager-level, 72% are of Asian descent, 14% are members of non-Asian minority groups, and 14% are Caucasian. 55% of our management-level positions are held by women, and 64% of our employees are women.
As of December 31, 2025, 78% of our employees are of Asian descent, 14% are members of non-Asian minority groups, and 8% are Caucasian. At the manager-level, 73% are of Asian descent, 14% are members of non-Asian minority groups, and 13% are Caucasian. 54% of our management-level positions are held by women, and 63% of our employees are women.
The CRFRA requires U.S.-organized entities that do business in California, with annual revenues over $500 million to prepare biennial reports disclosing climate-related financial risk and the measures they have adopted to reduce and adapt to that risk.
SB 261 requires covered companies with total annual revenues exceeding $500 million to prepare and post on their websites biennial disclosures describing climate-related financial risks and the measures they have adopted to reduce and adapt to such risks.
The reporting requirements related to Scope 1 and 2 emissions will begin in 2026, while the reporting requirements of Scope 3 emissions will begin in 2027.
Under SB 253, disclosure of Scope 1 and Scope 2 emissions will begin in 2026 for the 2025 reporting year, and disclosure of Scope 3 emissions will begin in 2027 for the 2026 reporting year. SB 253 applies to public and private companies with total annual revenues exceeding $1 billion that do business in California.
In October 2023, California Governor Gavin Newsom signed into law Senate Bill 253, the Climate Corporate Data Accountability Act (“CCDAA”) and Senate Bill 261, the Climate-Related Financial Risk Act (“CRFRA”). The CCDAA is applicable to U.S.-organized entities that do business in California with annual revenue in excess of $1 billion.
California has enacted two statutes — Senate Bill 253, the Climate Corporate Data Accountability Act (“CCDAA”), and Senate Bill 261, the Climate-Related Financial Risk Act (“CRFRA”) — that will require certain companies doing business in the state to disclose greenhouse gas (“GHG”) emissions and climate-related financial risk information.
Removed
Additionally, in 2014, the CFPB adopted revisions to Regulation Z, which implement the Truth in Lending Act, pursuant to the Dodd-Frank Act, and apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans).
Added
(1) On January 23, 2026, the Company announced the retirement of Heng W. Chen, effective March 1, 2026. Albert J. Wang will succeed him as Chief Financial Officer of the Company and Cathay Bank and Treasurer of the Company. Mr.
Removed
The revisions mandate specific underwriting criteria for home loans in order for creditors to make a reasonable, good faith determination of a consumer's ability to repay and establish certain protections from liability under this requirement for “qualified mortgages” meeting certain standards.
Added
Chen will remain as a Special Advisor to the Office of the President for Cathay Bank through December 31,2026 but will no longer be a designated executive officer of the Company.
Removed
In particular, it will prevent banks from making “no doc” and “low doc” home loans, as the rules require that banks determine a consumer’s ability to pay based in part on verified and documented information. We do originate certain “low doc” loans that meet specific underwriting criteria.
Added
The current leadership of the CFPB has indicated intentions to rescind or revise many regulations, as well as to narrow its enforcement and supervision.
Removed
Subject to the adoption of implementing regulations by the California Air Resources Board, these entities will need to file annual reports publicly disclosing their direct greenhouse gas (“GHG”) emissions from operations (“Scope 1 emissions”), indirect GHG emissions from energy use (“Scope 2 emissions”) and indirect upstream and downstream supply-chain GHG emissions (“Scope 3 emissions”).
Added
SB 253 requires the California Air Resources Board (“CARB”) to develop and adopt regulations mandating annual disclosure of Scope 1, Scope 2, and Scope 3 GHG emissions, with certain emissions data subject to third-party assurance, though the final regulations have not yet been adopted.
Removed
In April 2016, the agencies published a notice of proposed rulemaking further revising the incentive-based compensation standards originally proposed in 2011.
Added
The Ninth Circuit Court of Appeals has granted a stay of enforcement of the January 1, 2026 filing deadline for SB 261 pending the outcome of an appeal, and the timing and scope of SB 261’s requirements may be further affected by ongoing litigation and future regulatory or legislative developments. SB 253 is also the subject of ongoing legal challenges.
Removed
Similar to the 2011 proposed rule, the 2016 proposed rule would prohibit financial institutions with at least $1.0 billion in consolidated assets from establishing or maintaining incentive-based compensation arrangements that encourage inappropriate risk by providing any executive officer, employee, director or principal shareholder who is a covered person with excessive compensation, fees or benefits or that could lead to material financial loss to the covered institution.
Added
The Tax Reform Act expired at the end of 2025 and certain tax provisions were made permanent under the One Big Beautiful Bill Act. See the OBBBA discussion below. ● FDIC Insurance Premiums.
Removed
Although the reduced tax rate generally should be favorable to us by resulting in lower tax expense in future periods, it decreased the value of our existing deferred tax assets as of December 31, 2017. The Tax Reform Act expires at the end of 2025 if not extended or further legislation is enacted by Congress. ● FDIC Insurance Premiums.
Added
One Big Beautiful Bill Act ( “ OBBBA ” ) In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, introducing significant tax changes. Among other things, the new law makes permanent certain expiring business tax provisions of the Tax Cuts and Jobs Act (“TCJA”).
Added
These include provisions which allow businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets and the cost of qualified domestic research and development. The OBBBA also imposes a floor on tax deductions taken on charitable contributions.
Added
These items did not have a significant impact on our financial statements, though some minor operational changes were necessary to support new information reporting requirements. The OBBBA also significantly changes U.S. tax law related to foreign operations and certain tax credits; however, such changes will not have a significant impact on us.
Added
Other Legislative Updates In June 2025, California enacted Senate Bill No. 132 (“SB 132”), requiring banks and financial institutions to adopt a single sales factor for income apportionment, effective for tax years beginning on or after January 1, 2025.
Added
Prior to SB 132, financial institutions had been required to use an equally weighted three-factor apportionment formula, which considered property, payroll and sales equally in apportioning income for California tax purposes. In July 2025, the Guiding and Establishing National Innovation for U.S.
Added
Stablecoins Act, or the “GENIUS Act,” was signed into law, establishing a federal licensing and supervisory framework for payment stablecoins and their issuers. The GENIUS Act may accelerate and increase the competition that non-traditional financial institutions pose to banks’ payment services, but may also create opportunities for banks to hold stablecoin reserve assets, custody stablecoins, or issue stablecoins.
Added
Several key provisions of the GENIUS Act require federal regulatory agencies to adopt implementing regulations, and the Act will take effect the earlier of 18 months after its enactment or 120 days after the agencies issue final implementing regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBecause the estimated loss pursuant to the systemic risk determination will continue to be periodically adjusted, the FDIC retains the ability to cease collection early, impose an extended special assessment collection period after the initial eight-quarter collection period to collect the difference between losses and the amounts collected, and impose a one-time final shortfall special assessment after both receiverships terminate. ● The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain.
Biggest changeAs provided for in the special assessment rule, if losses at the termination of the receiverships exceed the amount collected, the FDIC will implement a one-time final shortfall special assessment to ensure the full amount of actual losses is recovered as required by law. ● The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain.
Because a significant portion of our loan portfolio is comprised of commercial real estate loans, the banking regulators may require us to maintain higher levels of capital than we would otherwise be expected to maintain, which could limit our ability to leverage our capital and have a material adverse effect on our business, financial condition, results of operations and prospects. 23 Table of Contents In addition, the risks inherent in construction lending may continue to affect adversely our results of operations.
Because a significant portion of our loan portfolio is comprised of commercial real estate loans, the banking regulators may require us to maintain higher levels of capital than we would otherwise be expected to maintain, which could limit our ability to leverage our capital and have a material adverse effect on our business, financial condition, results of operations and prospects. 23 Table of Contents In addition, the risks inherent in construction lending may adversely affect our results of operations.
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, our Chief Executive Officer, Chang M. Liu, and our Chief Financial Officer, Heng W. Chen.
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. Our current Chief Financial Officer, Heng W.
There can be no assurance that we would succeed in raising any such additional capital, and any capital we obtain may dilute the interests of holders of our common stock, or otherwise have an adverse effect on their investment. 31 Table of Contents Item 1B. Unresolved Staff Comments None.
There can be no assurance that we would succeed in raising any such additional capital, and any capital we obtain may dilute the interests of holders of our common stock, or otherwise have an adverse effect on their investment. 31 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
If this were to happen, the value of our common stock could significantly decline, and you could lose some or all of your investment. 17 Table of Contents Risk Factors Summary The following is a summary of the material risks that we believe could adversely affect our business, operations and financial results.
If this were to happen, the value of our common stock could significantly decline, and you could lose some or all of your investment. Risk Factors Summary The following is a summary of the material risks that we believe could adversely affect our business, operations and financial results.
However, a declining interest rate environment may positively affect real estate sales and the refinancing of existing real estate loans. As of December 31, 2024, we had approximately $10.35 billion in commercial real estate and construction loans.
However, a declining interest rate environment may positively affect real estate sales and the refinancing of existing real estate loans. As of December 31, 2025, we had approximately $10.90 billion in commercial real estate and construction loans.
In April 2011 and April 2016, the Federal Reserve, other federal banking agencies and the SEC jointly 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.
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, such proposed rules have not been adopted.
Credit, Interest Rate and Liquidity Risks We may be required to make additional provisions for loan losses and charge off additional loans in the future, which could adversely affect our results of operations. At December 31, 2024, our allowance for loan losses totaled $161.8 million and we had net charge-offs of $29.7 million for 2024.
Credit, Interest Rate and Liquidity Risks We may be required to make additional provisions for loan losses and charge off additional loans in the future, which could adversely affect our results of operations. At December 31, 2025, our allowance for loan losses totaled $195.9 million and we had net charge-offs of $35.7 million for 2025.
Based on a review of the appropriateness of the allowance for loan losses at December 31, 2024, in light of current economic conditions, we recorded a provision for credit losses of $37.5 million in the year ended December 31, 2024.
Based on a review of the appropriateness of the allowance for loan losses at December 31, 2025, in light of current economic conditions, we recorded a provision for credit losses of $72.6 million in the year ended December 31, 2025.
The risks described below are not the only ones facing our business. Additional risks that management is not aware of or focused on or that management currently deems immaterial may also impair our business operations. This Annual Report on Form 10-K is qualified in its entirety by these risk factors.
The risks described below are not the only ones facing our business. Additional risks that management is not aware of or focused on or that management currently deems immaterial may also impair our business operations.
In general, large banks and regional banks, and particularly those with large amounts of uninsured deposits, were the banks most vulnerable to uninsured deposit runs and benefited most from the stability provided under the systemic risk determination. ● The FDIC estimates that 114 banking organizations will be subject to the special assessment, including 48 banking organizations with total assets over $50 billion and 66 banking organizations with total assets between $5 and $50 billion.
In general, large banks and regional banks, and particularly those with large amounts of uninsured deposits, were the banks most vulnerable to uninsured deposit runs and benefited most from the stability provided under the systemic risk determination. ● As of September 30, 2025, the FDIC estimates that 141 insured depository institutions (“IDI’s”) belonging to 110 banking organizations are subject to the special assessment.
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.
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.
If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected.
This Annual Report on Form 10-K is qualified in its entirety by these risk factors. 17 Table of Contents If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected.
Moreover, the long-term effects of the Federal Reserve’s unprecedented quantitative easing and tapering off are unknown, and while interest rates have risen, they still remain at relatively low levels. There can be no assurance that we will be successful in minimizing the adverse effects of changes in interest rates. Inflation and deflation may adversely affect our financial performance.
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. Inflation and deflation may adversely affect our financial performance.
These loss estimates will be periodically adjusted as assets are sold, liabilities are satisfied, and receivership expenses are incurred. 24 Table of Contents ● The special assessment initially would be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods.
These loss estimates continue to be periodically adjusted as assets are sold, liabilities are satisfied, and receivership expenses are incurred. 24 Table of Contents ● In December 2025, based upon the first six quarterly collections of the special assessment and anticipated collections for the seventh quarterly special assessment, the FDIC issued an interim final rule to amend the collection of the special assessment to reduce the eighth quarterly assessment rate from 3.36 basis points to 2.97 basis points.
The FDIC has subsequently updated its estimate of the DIF's losses that are recoverable through the special assessment, which as of June 2024 totaled $19.2 billion.
The FDIC has subsequently updated its estimate of the DIF's losses that are recoverable through the special assessment, which as of September 2025 totaled $16.7 billion. Based on the initial estimate of the special assessment we accrued $11.3 million and subsequently increased our accrual by a net additional $0.4 million for the FDIC's latest adjustments to estimated losses.
Removed
Given the update to the loss estimates and the increase in the aggregate special assessment base resulting from amendments to the reported amount of estimated uninsured deposits, the FDIC currently projects that the special assessment will be collected for an additional two quarter beyond the initial eight-quarter collection period, at a lower rate.
Added
Moreover, the long-term effects of the Federal Reserve’s unprecedented quantitative easing and tapering off are 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 continue to decrease in 2027.
Removed
For example, the SEC published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which would have required us to incur 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 controls in the past, and impose increased oversight obligations on our management and board of directors.
Added
Because the cumulative amount collected through the initial eight quarter special assessment period is projected to equal the FDIC’s loss estimate, the additional two quarter extend assessment period was removed.
Removed
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, the SEC may seek to enact new rules related to environmental issues in the future.
Added
The interim final rule also requires the FDIC to provide an offset to regular quarterly deposit insurance assessments for institutions subject to the special assessment if the aggregate amount collected exceeds estimated losses following the resolution of pending litigation, and again following the termination of the receiverships.
Added
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.
Added
While the SEC proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, such rules are not expected to be implemented in their current form. However, the SEC may seek to enact new rules related to environmental issues in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Chief Risk Officer and the board-level risk committees of the Company and the Bank report to the full board of directors on key cybersecurity risk management topics, as appropriate. 32 Table of Contents
Biggest changeThe Chief Risk Officer and the board-level risk committees of the Company and the Bank report to the full board of directors on key cybersecurity risk management topics, as appropriate.
Our processes and practices are reviewed by audits, regulators, and independent reviews of information security and cybersecurity practices and processes carried out by professional services organizations retained by us against industry requirements, such as the Federal Financial Institutions Examination Council (FFIEC) Information Technology Examination Handbooks, and the FFIEC Cybersecurity Assessment Tool.
Our processes and practices are reviewed by regulators, and independent reviews of information security and cybersecurity practices and processes carried out by professional services organizations retained by us against industry requirements, such as the Federal Financial Institutions Examination Council (FFIEC) Information Technology Examination Handbooks, and the FFIEC Cybersecurity Assessment Tool.
These reports address key cybersecurity topics, including the implementation and operation of preventative controls and the detection, mitigation and remediation of cybersecurity incidents. Our CISO also provides reports to our Chief Executive Officer and other members of our senior management, as appropriate.
These reports address key cybersecurity topics, including the implementation and operation of preventative controls and the detection, mitigation and remediation of cybersecurity incidents. Our CISO also provides reports to our Chief Risk Officer and other members of our senior management, as appropriate.
Removed
Our CISO holds a BSc degree in the combined studies of Computer Science & History of Science from Herriot-Watt University and a graduate of the Carnegie Mellon University’s Heinz College of Information Systems and Public Policy + Software Engineering Institute’s Chief Risk Officer Executive Education and Certificate Program.
Added
Our CISO holds the following professional certifications: Cybersecurity Certificate course at the University of California, Irvine, Certified Technology Business Management Executive Certification, and Society of Information Management – Regional Leadership Foundation Certification. Additionally, he is a U.S. Army veteran and has more than 25 years of experience in information security, technology leadership, and enterprise risk management across highly regulated industries.
Removed
He holds the following professional certifications from the Information Systems Audit and Control Association: Certified Information Systems Auditor (CISA), Certified in the Governance of Enterprise IT (CGEIT), and Certified in Risk and Information Systems Control (CRISC).
Added
He has held senior security and technology leadership roles, including CISO positions, where he led large‑scale security transformations, modernized control environments, and embedded risk‑based governance into enterprise operations. 32 Table of Contents
Removed
Additionally, he has more than 20 years of experience in financial services, including management experience with Globally Systemically Important Banks, as well as experience in cybersecurity, information security & information technology risk management, governance, risk, and compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIt also maintains certain of its administrative offices at its Corporate Center located at 9650 Flair Drive, El Monte, California 91731, and a building located at 4128 Temple City Boulevard, Rosemead. The Bank owns the buildings and land in all three locations. In addition, the Bank owns 15 of its active branch offices as well as two former branch offices.
Biggest changeIt also maintains certain administrative offices at its Corporate Center located at 9650 Flair Drive, El Monte, California 91731, and a building located at 4128 Temple City Boulevard, Rosemead. The Bank owns the buildings and land in all three of these locations. In addition, the Bank owns 15 of its active branch offices as well as two former branch offices.
The Bancorp uses the premises, equipment, and furniture of the Bank at 777 North Broadway, Los Angeles, California 90012 and at 9650 Flair Drive, El Monte, California 91731, in exchange for payment of a management fee to the Bank. Cathay Bank The Bank maintains its headquartered office in the Chinatown area of Los Angeles, California.
The Bancorp uses the premises, equipment, and furniture of the Bank at 777 North Broadway, Los Angeles, California 90012 and at 9650 Flair Drive, El Monte, California 91731, in exchange for payment of a management fee to the Bank. Cathay Bank The Bank maintains its headquarters office in the Chinatown area of Los Angeles, California.
The other branch offices of the Bank, as well as certain representative offices and loan production offices, are leased by the Bank under leases with expiration dates ranging from January 2025 to December 2029, exclusive of renewal options. As of December 31, 2024, the Bank’s investment in premises and equipment totaled $88.7 million, net of accumulated depreciation.
The other branch offices of the Bank, as well as certain representative offices and loan production offices, are leased by the Bank under leases with expiration dates ranging from January 2025 to December 2029, exclusive of renewal options. As of December 31, 2025, the Bank’s investment in premises and equipment totaled $87.6 million, net of accumulated depreciation.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+0 added−0 removed5 unchanged
Biggest changeIssuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 157,237 $ 46.23 157,237 $ 57,661,375.00 November 1, 2024 - November 30, 2024 88,205 $ 45.98 88,205 $ 53,605,625.00 December 1, 2024 - December 31, 2024 261,209 $ 47.99 261,209 $ 41,069,402.00 Total 506,651 $ 47.10 506,651 $ 41,069,402.00 Item 6.
Biggest changeIssuer Purchases of Equity Securities Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2025 - October 31, 2025 250,000 $ 46.54 250,000 $ 52,712,697.28 November 1, 2025 - November 30, 2025 722,803 $ 46.91 722,803 $ 18,804,150.00 December 1, 2025 - December 31, 2025 127,000 $ 49.68 127,000 $ 12,494,156.25 Total 1,099,803 $ 47.15 1,099,803 $ 12,494,156.25 Item 6.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 in this report. 33 Table of Contents Performance Graph The graph and accompanying information furnished below shows the cumulative total shareholder return over a five-year period through December 31, 2024, assuming an investment of $100 was made and that all dividends were reinvested, in each of our common stock, the Standard & Poor’s (S&P) 500 Index, and the S&P U.S.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 in this report. 33 Table of Contents Performance Graph The graph and accompanying information furnished below shows the cumulative total shareholder return over a five-year period through December 31, 2025, assuming an investment of $100 was made and that all dividends were reinvested, in each of our common stock, the Standard & Poor’s (S&P) 500 Index, and the S&P U.S.
We will furnish, without charge, on the written request of any person who is a stockholder of record as of the record date for the 2025 annual meeting of stockholders, a list of the companies included in the S&P U.S. BMI Banks–Western Region Index.
We will furnish, without charge, on the written request of any person who is a stockholder of record as of the record date for the 2026 annual meeting of stockholders, a list of the companies included in the S&P U.S. BMI Banks–Western Region Index.
Bancorp believes, however, that the actual number of beneficial holders of its common stock may be substantially greater than the stated number of holders of record because a substantial portion of the common stock is held in street name.
Bancorp believes, however, that the actual number of beneficial holders of its common stock may be substantially greater than the stated number of holders of record because a substantial portion of the common stock is held in street name by brokers or other custodians.
Unregistered Sales of Equity Securities There were no sales of any equity securities by the Company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act. 34 Table of Contents Issuer Purchases of Equity Securities On May 28th, 2024, the Company announced a new stock repurchase program to buy back up to $125.0 million of the Company's common stock.
Unregistered Sales of Equity Securities There were no sales of any equity securities by the Company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act. 34 Table of Contents Issuer Purchases of Equity Securities On June 4, 2025, the Company announced a new stock repurchase program to buy back up to $150.0 million of the Company's common stock.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Bancorp’s common stock is listed on the NASDAQ Global Select Market under the symbol “CATY.” As of February 14, 2025, Bancorp had outstanding approximately 70,285,292 shares of common stock with approximately 1,440 holders of record.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Bancorp’s common stock is listed on the NASDAQ Global Select Market under the symbol “CATY.” As of February 13, 2026, Bancorp had outstanding approximately 66,957,659 shares of common stock with approximately 1,386 holders of record.
BMI Banks - Western Region Index 100.00 74.84 115.39 89.54 89.01 123.76 Source: S&P Global Market Intelligence © 2025 This information shall not be deemed to be ‘‘soliciting material’’ or to be ‘‘filed’’ with the SEC or subject to Regulation 14A (17 CFR 240.14a-1-240.14a-104), other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r).
BMI Banks - Western Region Index 100.00 154.19 119.66 118.94 165.38 213.10 Source: S&P Global Market Intelligence © 2026 This information shall not be deemed to be ‘‘soliciting material’’ or to be ‘‘filed’’ with the SEC or subject to Regulation 14A (17 CFR 240.14a-1-240.14a-104), other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r).
The previous $125.0 million share repurchase program announced on May 26, 2022, was completed on February 21, 2023, with the repurchase of 2,897,628 shares at an average cost of $43.14.
The previous $125.0 million shares repurchase program announced on May 28, 2024, was completed on February 28, 2025, with the repurchase of a total of 2,905,487 shares at an average cost of $43.02.
Through December 31, 2024, the Company repurchased 2,028,581 shares of common stock for a total of $83.9 million, at an average cost of $41.37 per share under the May 2024 buyback program.
Through December 31, 2025, the Company repurchased 2,973,982 common shares for a total of $137.5 million, at an average cost of $46.24 per share under the June 2025 buyback program.
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Cathay General Bancorp 100.00 88.36 121.70 119.14 135.21 149.19 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P U.S.
Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Cathay General Bancorp 100.00 137.74 134.84 153.03 168.85 176.69 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 S&P U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

121 edited+16 added−25 removed123 unchanged
Biggest changeThe tables below show the related fair value and the gross unrealized losses of the Company’s investment portfolio, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2024, and December 31, 2023: As of December 31, 2024 Less than 12 months 12 months or longer Total Fair Gross Unrealized Fair Gross Unrealized Fair Gross Unrealized Value Losses Value Losses Value Losses (In thousands) Securities AFS U.S. government agency entities $ 4,199 $ 8 $ 2,108 $ 119 $ 6,307 $ 127 Mortgage-backed securities 29,955 959 653,236 112,237 683,191 113,196 Collateralized mortgage obligations — — 24,556 3,191 24,556 3,191 Corporate debt securities 24,900 100 127,744 5,431 152,644 5,531 Total $ 59,054 $ 1,067 $ 807,644 $ 120,978 $ 866,698 $ 122,045 As of December 31, 2023 Less than 12 months 12 months or longer Total Fair Gross Unrealized Fair Gross Unrealized Fair Gross Unrealized Value Losses Value Losses Value Losses (In thousands) Securities AFS U.S. treasury securities $ 49,831 $ 20 $ — $ — $ 49,831 $ 20 U.S. government agency entities 18,301 108 1,313 122 19,614 230 Mortgage-backed securities — — 768,274 106,442 768,274 106,442 Collateralized mortgage obligations — — 28,044 3,194 28,044 3,194 Corporate debt securities 64,448 552 166,864 11,587 231,312 12,139 Total $ 132,580 $ 680 $ 964,495 $ 121,345 $ 1,097,075 $ 122,025 41 Table of Contents The scheduled maturities and taxable-equivalent yields by security type are presented in the following table: Securities Portfolio Maturity Distribution and Yield Analysis: As of December 31, 2024 After One After Five One Year Year to Years to Over Ten or Less Five Years Ten Years Years Total (In thousands) Maturity Distribution: Securities AFS: U.S. treasury securities $ 621,462 $ — $ — $ — $ 621,462 U.S. government agency entities — 4,376 3,493 1,280 9,149 Mortgage-backed securities (1) 55 5,141 96,009 582,811 684,016 Collateralized mortgage obligations (1) — — — 24,556 24,556 Corporate debt securities 49,700 155,302 2,943 — 207,945 Total $ 671,217 $ 164,819 $ 102,445 $ 608,647 $ 1,547,128 Weighted-Average Yield: Securities AFS: U.S. treasury securities 4.73 % — % — % — % 4.73 % U.S. government agency entities — 4.96 5.00 6.37 5.17 Mortgage-backed securities (1) 2.61 2.37 2.72 2.57 2.59 Collateralized mortgage obligations (1) — — — 3.41 3.41 Corporate debt securities 3.50 3.33 4.40 — 3.38 Total 4.63 % 3.34 % 2.85 % 2.61 % 3.58 % (1) Securities reflect stated maturities and do not reflect the impact of anticipated prepayments.
Biggest changeThe tables below show the related fair value and the gross unrealized losses of the Company’s investment portfolio, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2025, and December 31, 2024: As of December 31, 2025 Less than 12 months 12 months or longer Total Fair Gross Unrealized Fair Gross Unrealized Fair Gross Unrealized Value Losses Value Losses Value Losses ($ In thousands) Securities AFS U.S. government agency entities $ 834 $ 1 $ 3,585 $ 117 $ 4,419 $ 118 Mortgage-backed securities 207 — 600,658 75,324 600,865 75,324 Collateralized mortgage obligations — — 22,747 1,706 22,747 1,706 Corporate debt securities — — 76,912 1,222 76,912 1,222 Total $ 1,041 $ 1 $ 703,902 $ 78,369 $ 704,943 $ 78,370 As of December 31, 2024 Less than 12 months 12 months or longer Total Fair Gross Unrealized Fair Gross Unrealized Fair Gross Unrealized Value Losses Value Losses Value Losses ($ In thousands) Securities AFS U.S. government agency entities $ 4,199 $ 8 $ 2,108 $ 119 $ 6,307 $ 127 Mortgage-backed securities 29,955 959 653,236 112,237 683,191 113,196 Collateralized mortgage obligations — — 24,556 3,191 24,556 3,191 Corporate debt securities 24,900 100 127,744 5,431 152,644 5,531 Total $ 59,054 $ 1,067 $ 807,644 $ 120,978 $ 866,698 $ 122,045 41 Table of Contents The scheduled maturities and taxable-equivalent yields by security type are presented in the following table: Securities Portfolio Maturity Distribution and Yield Analysis: As of December 31, 2025 After One After Five One Year Year to Years to Over Ten or Less Five Years Ten Years Years Total ($ In thousands) Maturity Distribution: Securities AFS: U.S. treasury securities $ 828,193 $ — $ — $ — $ 828,193 U.S. government agency entities — 5,079 — 743 5,822 U.S. government sponsored entities 25,011 — — — 25,011 Mortgage-backed securities (1) 15 29,266 57,772 542,384 629,437 Collateralized mortgage obligations (1) — — — 22,748 22,748 Corporate debt securities 113,865 33,147 — — 147,012 Total $ 967,084 $ 67,492 $ 57,772 $ 565,875 $ 1,658,223 Weighted-Average Yield: Securities AFS: U.S. treasury securities 3.93 % — % — % — % 3.93 % U.S. government agency entities — 4.24 — 5.73 4.43 U.S. government sponsored entities 4.11 — — — 4.11 Mortgage-backed securities (1) 2.25 2.34 2.63 2.46 2.47 Collateralized mortgage obligations (1) — — — 3.24 3.24 Corporate debt securities 2.20 5.43 — — 2.93 Total 3.73 % 4.00 % 2.63 % 2.49 % 3.28 % (1) Securities reflect stated maturities and do not reflect the impact of anticipated prepayments.
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.
Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any impaired securities before recovery of their amortized cost.
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 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.
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.
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.
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.
After the R&S period, the Company will revert straight-line for the four-quarter reversion period to the long-term loss rates for each of the six portfolios of loans. The contractual term excludes renewals and modifications but includes pre-approved extensions and prepayment assumptions where applicable.
However, based on our historical runoff experience, we expect the outflow will not be significant and can be replenished through our normal growth in deposits. As of December 31, 2024, management believes all the above-mentioned sources will provide adequate liquidity during the next twelve months for the Bank to meet its operating needs.
However, based on our historical runoff experience, we expect the outflow will not be significant and can be replenished through our normal growth in deposits. As of December 31, 2025, management believes all the above-mentioned sources will provide adequate liquidity during the next twelve months for the Bank to meet its operating needs.
Quantitative Information about Interest Rate Risk The following table shows the carrying value of our financial instruments that are sensitive to changes in interest rates, categorized by expected maturity, as well as the instruments’ total fair values at December 31, 2024, and 2023. For assets, expected maturities are based on contractual maturity.
Quantitative Information about Interest Rate Risk The following table shows the carrying value of our financial instruments that are sensitive to changes in interest rates, categorized by expected maturity, as well as the instruments’ total fair values at December 31, 2025, and 2024. For assets, expected maturities are based on contractual maturity.
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.
We estimate the probability of default during the reasonable and supportable forecast period using separate econometric regression models developed to correlate macroeconomic variables, (GDP, unemployment, CRE prices and residential mortgage prices) to historical credit performance for each of the six loan portfolios from the fourth quarter of 2007 through the fourth quarter of 2024.
The Company generally expects our loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the collateral. There are no loan concentrations to multiple borrowers in similar activities that exceeded 10% of total loans as of December 31, 2024, or as of December 31, 2023.
The Company generally expects our loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the collateral. There are no loan concentrations to multiple borrowers in similar activities that exceeded 10% of total loans as of December 31, 2025, or as of December 31, 2024.
At December 31, 2024, and December 31, 2023, the Bank had no loans on non-accrual status with available interest reserves. At December 31, 2024, and 2023, there were no non-accrual residential loans, non-accrual non-residential construction loans and non-accrual land loans that were originated with pre-established interest reserves, respectively.
At December 31, 2025, and December 31, 2024, the Bank had no loans on non-accrual status with available interest reserves. At December 31, 2025, and 2024, there were no non-accrual residential loans, non-accrual non-residential construction loans and non-accrual land loans that were originated with pre-established interest reserves, respectively.
At December 31, 2024, $1.53 billion of unpledged treasury securities, US agency securities, U.S. agency mortgage-backed securities, or CMO based on current cost are available for pledging to the Federal Reserve Bank’s Bank Term Funding Program. 54 Table of Contents Approximately 99.8% of our time deposits mature within one year or less as of December 31, 2024.
At December 31, 2025, $1.64 billion of unpledged treasury securities, US agency securities, U.S. agency mortgage-backed securities, or CMO based on current cost are available for pledging to the Federal Reserve Bank’s Bank Term Funding Program. 54 Table of Contents Approximately 99.8% of our time deposits mature within one year or less as of December 31, 2025.
Loans are underwritten with conservative standards for cash flows, debt service coverage and LTV. Owner-occupied properties comprised 24% and 23% of the CRE loans as of December 31, 2024, and 2023, respectively. 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.
Loans are underwritten with conservative standards for cash flows, debt service coverage and LTV. Owner-occupied properties comprised 25% and 24% of the CRE loans as of December 31, 2025, and 2024, respectively. 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 following tables provide a summary of the Company’s CREC, multifamily residential, and construction and land loans by geography as of December 31, 2024, and 2023.
The following tables provide a summary of the Company’s CREC, multifamily residential, and construction and land loans by geography as of December 31, 2025, and 2024.
The Bank paid dividends to the Bancorp totaling $216.0 million during 2024, $134.0 million during 2023, and $232.8 million during 2022. 46 Table of Contents The Federal Reserve Board issued Federal Reserve Supervision and Regulation Letter SR-09-4 that states that bank holding companies are expected to inform and consult with the Federal Reserve supervisory staff prior to declaring and paying a dividend that exceeds earnings for the period for which the dividend is being paid.
The Bank paid dividends to the Bancorp totaling $250.0 million during 2025, $216.0 million during 2024, and $134.0 million during 2023. 46 Table of Contents The Federal Reserve Board issued Federal Reserve Supervision and Regulation Letter SR-09-4 that states that bank holding companies are expected to inform and consult with the Federal Reserve supervisory staff prior to declaring and paying a dividend that exceeds earnings for the period for which the dividend is being paid.
If we are not current in our payment of dividends on our Junior Subordinated Notes, we may not pay dividends on our common stock. Substantially all of the revenues of the Company available for payment of dividends derive from amounts paid to it by the Bank.
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. Substantially all of the revenues of the Company available for payment of dividends derive from amounts paid to it by the Bank.
As of December 2024, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 14.4% compared to 13.6% for December 2023. The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary.
As of December 2025, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 14.7% compared to 14.4% for December 2024. The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary.
As of December 31, 2024, 25% and 37% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2023, 25% and 40% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively.
As of December 31, 2025, 21% and 40% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2024, 25% and 37% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively.
As of December 31, 2024, Junior Subordinated Notes totaled $119.1 million with a weighted average interest rate of 7.75%, compared to $119.1 million with a weighted average rate of 7.54% as of December 31, 2023. The Junior Subordinated Notes have a stated maturity term of 30 years and qualify as Total Capital for these periods.
As of December 31, 2025, Junior Subordinated Notes totaled $119.1 million with a weighted average interest rate of 6.76%, compared to $119.1 million with a weighted average rate of 7.75% as of December 31, 2024. The Junior Subordinated Notes have a stated maturity term of 30 years and qualify as Total Capital for these periods.
Most of our CREC loan property types had a low weighted-average LTV ratio. Approximately 85% and 83% of total CREC loans had an LTV ratio of 60% or lower as of December 31, 2024, and 2023, respectively.
Most of our CREC loan property types had a low weighted-average LTV ratio. Approximately 86% and 85% of total CREC loans had an LTV ratio of 60% or lower as of December 31, 2025, and 2024, respectively.
Under this regulation, the amount of retained earnings available for cash dividends to the Company immediately after December 31, 2024, was restricted to approximately $433.6 million. For additional information on statutory and regulatory limitations on the ability of Bancorp to pay dividends to its shareholders and on the Bank to pay dividends to Bancorp, see “Item 1.
Under this regulation, the amount of retained earnings available for cash dividends to the Company immediately after December 31, 2025, was restricted to approximately $376.9 million. For additional information on statutory and regulatory limitations on the ability of Bancorp to pay dividends to its shareholders and on the Bank to pay dividends to Bancorp, see “Item 1.
Commercial loans consist primarily of short-term loans (typically with a maturity of one year or less) to support general business purposes, or to provide working capital to businesses in the form of lines of credit, trade-finance loans, loans for commercial purposes secured by cash, and SBA loans. ● Real estate construction loans decreased $103.0 million, or 24.4%, to $319.6 million at December 31, 2024, compared to $422.6 million at December 31, 2023. 42 Table of Contents Our lending relates predominantly to activities in the states of California, New York, Texas, Washington, Massachusetts, Illinois, New Jersey, Maryland, and Nevada.
Commercial loans consist primarily of short-term loans (typically with a maturity of one year or less) to support general business purposes, or to provide working capital to businesses in the form of lines of credit, trade-finance loans, loans for commercial purposes secured by cash, and SBA loans. ● Real estate construction loans increased $18.0 million, or 5.6%, to $337.6 million at December 31, 2025, compared to $319.6 million at December 31, 2024. 42 Table of Contents Our lending relates predominantly to activities in the states of California, New York, Texas, Washington, Massachusetts, Illinois, New Jersey, Maryland, and Nevada.
The Bank had borrowing capacity of $395.1 million from the Federal Reserve Bank Discount Window at December 31, 2024. Liquidity can also be provided through the sale of liquid assets, which consist of federal funds sold, securities purchased under agreements to resell, securities available-for-sale ("AFS").
The Bank had borrowing capacity of $1.28 billion from the Federal Reserve Bank Discount Window at December 31, 2025. Liquidity can also be provided through the sale of liquid assets, which consist of federal funds sold, securities purchased under agreements to resell, securities available-for-sale ("AFS").
We also lend to domestic clients who are engaged in international trade. Loans outstanding in our branch in Hong Kong were $343.3 million as of December 31, 2024, compared to $341.9 million as of December 31, 2023.
We also lend to domestic clients who are engaged in international trade. Loans outstanding in our branch in Hong Kong were $322.3 million as of December 31, 2025, compared to $343.3 million as of December 31, 2024.
As of December 31, 2024, and 2023, the Company had $9.43 billion and $8.71 billion, respectively, of uninsured deposits outstanding. 44 Table of Contents Approximately 99.8% of the Bank’s CDs mature within one year as of December 31, 2024.
As of December 31, 2025, and 2024, the Company had $10.19 billion and $9.43 billion, respectively, of uninsured deposits outstanding. 44 Table of Contents Approximately 99.8% of the Bank’s CDs mature within one year as of December 31, 2025.
CRE and Construction Loans ("CREC") The Company’s total CREC loan portfolio is diversified by property type with an average CREC loan size of $1.9 million and $1.8 million as of December 31, 2024, and 2023, respectively.
CRE and Construction Loans ("CREC") The Company’s total CREC loan portfolio is diversified by property type with an average CREC loan size of $2.0 million and $1.9 million as of December 31, 2025, and 2024, respectively.
Multifamily residential loans totaled $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, and 2023, respectively. The Company offers a variety of first lien mortgages, including fixed- and variable-rate loans.
Multifamily residential loans totaled $2.89 billion as of December 31, 2025, compared with $2.72 billion as of December 31, 2024, and accounted for 14% of total loans held-for investment as of December 31, 2025, and 2024. The Company offers a variety of first lien mortgages, including fixed- and variable-rate loans.
The following table sets forth the information relating to the allowance for loan losses, charge-offs, recoveries, and the reserve for off-balance sheet credit commitments for the past five years: Allowance for Credit Losses Amount Outstanding as of December 31, 2024 2023 2022 2021 2020 (In thousands) Allowance for loan losses Balance at beginning of year $ 154,562 $ 146,485 $ 136,157 $ 166,538 $ 123,224 Impact of ASU 2016-13 adoption — — — (1,560 ) — Adjusted beginning balance $ 154,562 $ 146,485 $ 136,157 $ 164,978 $ 123,224 Provision/(reversal) for credit losses 36,877 25,655 12,913 (11,210 ) 57,500 Charge-offs: Commercial loans (26,926 ) (13,909 ) (3,222 ) (20,051 ) (21,996 ) Construction loans — (4,221 ) — — — Commercial real estate loans and residential mortgage loans (4,531 ) (5,341 ) (2,152 ) (3 ) — Installment loans and other loans (15 ) (15 ) (116 ) — — Total charge-offs (31,472 ) (23,486 ) (5,490 ) (20,054 ) (21,996 ) Recoveries: Commercial loans 1,102 2,990 2,465 1,706 7,267 Construction loans — — 6 76 — Commercial real estate loans and residential mortgage loans 694 2,918 432 661 543 Installment loans and other loans 2 — 2 — — Total recoveries 1,798 5,908 2,905 2,443 7,810 Balance at end of period $ 161,765 $ 154,562 $ 146,485 $ 136,157 $ 166,538 Reserve for off-balance sheet credit commitments Balance at beginning of year $ 9,053 $ 8,730 $ 7,100 $ 5,880 $ 3,855 Impact of ASU 2016-13 adoption — — — 6,018 — Adjusted beginning balance $ 9,053 $ 8,730 $ 7,100 $ 11,898 $ 3,855 Provision/(reversal) for credit losses 623 323 1,630 (4,798 ) 2,025 Balance at the end of period $ 9,676 $ 9,053 $ 8,730 $ 7,100 $ 5,880 Average loans outstanding during the year (1) $ 19,434,614 $ 18,763,271 $ 17,631,943 $ 15,827,550 $ 15,500,910 Ratio of net charge-offs/(recoveries) to average loans outstanding during the year (1) 0.15 % 0.09 % 0.01 % 0.11 % 0.09 % Provision/(reversal) for credit losses to average loans outstanding during the year (1) 0.19 % 0.14 % 0.07 % (0.07 )% 0.37 % Allowance for credit losses to non-performing portfolio loans at year-end (2) 98.98 % 221.58 % 192.97 % 212.91 % 237.27 % Allowance for credit losses to gross loans at year-end (1) 0.88 % 0.84 % 0.85 % 0.88 % 1.10 % (1) Excluding loans held for sale (2) Excluding non-accrual loans held for sale 53 Table of Contents The table set forth below reflects management’s allocation of the allowance for loan losses by loan category and the ratio of each loan category to the total loans as of the dates indicated: Allocation of Allowance for Loan Losses As of December 31, 2024 2023 2022 2021 2020 Percentage Percentage Percentage Percentage Percentage of Loans in of Loans in of Loans in of Loans in of Loans in Each Each Each Each Each Category Category Category Category Category to Average to Average to Average to Average to Average Amount Gross Loans Amount Gross Loans Amount Gross Loans Amount Gross Loans Amount Gross Loans (In thousands) Type of Loans: Commercial loans $ 57,796 16.2 % $ 53,791 17.1 % $ 49,435 18.2 % $ 43,394 18.4 % $ 68,742 18.8 % Residential mortgage loans and equity lines 16,181 31.0 18,140 31.0 18,232 30.2 25,379 28.7 17,737 29.4 Commercial real estate loans 79,597 51.0 74,428 49.1 68,366 48.2 61,081 48.7 49,205 47.8 Construction loans 8,185 1.8 8,180 2.8 10,417 3.4 6,302 4.2 30,854 4.0 Installment and other loans 6 — 23 — 35 — 1 — — — Total $ 161,765 100.0 % $ 154,562 100.0 % $ 146,485 100.0 % $ 136,157 100.0 % $ 166,538 100.0 % The allowance allocated to commercial loans was $57.8 million at December 31, 2024, compared to $53.8 million at December 31, 2023.
The following table sets forth the information relating to the allowance for loan losses, charge-offs, recoveries, and the reserve for off-balance sheet credit commitments for the past five years: Allowance for Credit Losses Amount Outstanding as of December 31, 2025 2024 2023 2022 2021 ($ In thousands) Allowance for loan losses Balance at beginning of year $ 161,765 $ 154,562 $ 146,485 $ 136,157 $ 166,538 Impact of ASU 2016-13 adoption — — — — (1,560 ) Adjusted beginning balance $ 161,765 $ 154,562 $ 146,485 $ 136,157 $ 164,978 Provision/(reversal) for credit losses 69,866 36,877 25,655 12,913 (11,210 ) Charge-offs: Commercial loans (33,101 ) (26,926 ) (13,909 ) (3,222 ) (20,051 ) Construction loans — — (4,221 ) — — Commercial real estate loans and residential mortgage loans (4,636 ) (4,531 ) (5,341 ) (2,152 ) (3 ) Installment loans and other loans — (15 ) (15 ) (116 ) — Total charge-offs (37,737 ) (31,472 ) (23,486 ) (5,490 ) (20,054 ) Recoveries: Commercial loans 1,529 1,102 2,990 2,465 1,706 Construction loans 6 — — 6 76 Commercial real estate loans and residential mortgage loans 482 694 2,918 432 661 Installment loans and other loans — 2 — 2 — Total recoveries 2,017 1,798 5,908 2,905 2,443 Balance at end of period $ 195,911 $ 161,765 $ 154,562 $ 146,485 $ 136,157 Reserve for off-balance sheet credit commitments Balance at beginning of year $ 9,676 $ 9,053 $ 8,730 $ 7,100 $ 5,880 Impact of ASU 2016-13 adoption — — — — 6,018 Adjusted beginning balance $ 9,676 $ 9,053 $ 8,730 $ 7,100 $ 11,898 Provision/(reversal) for credit losses 2,765 623 323 1,630 (4,798 ) Balance at the end of period $ 12,441 $ 9,676 $ 9,053 $ 8,730 $ 7,100 Average loans outstanding during the year (1) $ 19,722,436 $ 19,434,614 $ 18,763,271 $ 17,631,943 $ 15,827,550 Ratio of net charge-offs to average loans outstanding during the year (1) 0.18 % 0.15 % 0.09 % 0.01 % 0.11 % Provision/(reversal) for credit losses to average loans outstanding during the year (1) 0.37 % 0.19 % 0.14 % 0.07 % (0.07 )% Allowance for credit losses to non-performing portfolio loans at year-end (2) 183.79 % 98.98 % 221.58 % 192.97 % 212.91 % Allowance for credit losses to gross loans at year-end (1) 1.03 % 0.88 % 0.84 % 0.85 % 0.88 % (1) Excluding loans held for sale (2) Excluding non-accrual loans held for sale 53 Table of Contents The table set forth below reflects management’s allocation of the allowance for loan losses by loan category and the ratio of each loan category to the total loans as of the dates indicated: Allocation of Allowance for Loan Losses As of December 31, 2025 2024 2023 2022 2021 Percentage Percentage Percentage Percentage Percentage of Loans in of Loans in of Loans in of Loans in of Loans in Each Each Each Each Each Category Category Category Category Category to Average to Average to Average to Average to Average Amount Gross Loans Amount Gross Loans Amount Gross Loans Amount Gross Loans Amount Gross Loans ($ In thousands) Type of Loans: Commercial loans $ 39,123 15.9 % $ 57,796 16.2 % $ 53,791 17.1 % $ 49,435 18.2 % $ 43,394 18.4 % Residential mortgage loans and equity lines 24,641 30.1 16,181 31.0 18,140 31.0 18,232 30.2 25,379 28.7 Commercial real estate loans 125,665 52.3 79,597 51.0 74,428 49.1 68,366 48.2 61,081 48.7 Construction loans 6,475 1.7 8,185 1.8 8,180 2.8 10,417 3.4 6,302 4.2 Installment and other loans 7 0 6 — 23 — 35 — 1 — Total $ 195,911 100.0 % $ 161,765 100.0 % $ 154,562 100.0 % $ 146,485 100.0 % $ 136,157 100.0 % The allowance allocated to commercial loans was $39.1 million at December 31, 2025, compared to $57.8 million at December 31, 2024.
The Bank’s loans for construction, land development, and other land represented 15% of total risk-based capital as of December 31, 2024, and 19% as of December 31, 2023.
The Bank’s loans for construction, land development, and other land represented 14% of total risk-based capital as of December 31, 2025, and 15% as of December 31, 2024.
CRE loans totaled $7.23 billion as of December 31, 2024, compared with $7.06 billion as of December 31, 2023, and accounted for 37% and 36% of total loans held-for-investment as of December 31, 2024, and 2023, respectively. Interest rates on CRE loans may be fixed, variable or hybrid.
CRE loans totaled $7.61 billion as of December 31, 2025, compared with $7.23 billion as of December 31, 2024, and accounted for 38% and 37% of total loans held-for-investment as of December 31, 2025, and 2024, respectively. Interest rates on CRE loans may be fixed, variable or hybrid.
The comparable ratios were 0.84% of period-end gross loans and 221.58% of non-performing loans at December 31, 2023. 51 Table of Contents Critical Accounting Policies and Estimates Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition.
The comparable ratios were 0.88% of period-end gross loans and 98.98% of non-performing loans at December 31, 2024. 51 Table of Contents Critical Accounting Policies and Estimates Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition.
At December 31, 2024, investment securities totaled $1.55 billion, with $17.8 million pledged as collateral for borrowings and other commitments. The remaining balance was available as additional liquidity or to be pledged as collateral for additional borrowings.
At December 31, 2025, investment securities totaled $1.66 billion, with $22.8 million pledged as collateral for borrowings and other commitments. The remaining balance was available as additional liquidity or to be pledged as collateral for additional borrowings.
Results of Operations Overview For the year ended December 31, 2024, we reported net income of $286.0 million, or $3.95 per diluted share, compared to 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.
Results of Operations Overview For the year ended December 31, 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, in 2024, and net income of $354.1 million, or $4.86 per diluted share, in 2023.
The increase was primarily due to an increase in non-accrual loans. The allowance allocated to residential mortgage loans and equity lines was $16.2 million at December 31, 2024, compared to $18.1 million at December 31, 2023. The decrease was primarily due to a decrease in residential mortgage loans.
The decrease was primarily due to a decrease in non-accrual loans. The allowance allocated to residential mortgage loans and equity lines was $24.6 million at December 31, 2025, compared to $16.2 million at December 31, 2024. The increase was primarily due to an increase in residential mortgage loans and an increase in non-accrual loans.
At December 31, 2024, the Company’s Tier 1 risk-based capital ratio of 13.54%, total risk-based capital ratio of 15.08%, and Tier 1 leverage capital ratio of 10.96%, calculated under the Basel III Capital Rules, continue to place the Company in the “well capitalized” category for regulatory purposes, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%.
At December 31, 2025, the Company’s Tier 1 risk-based capital ratio of 13.27%, total risk-based capital ratio of 14.93%, and Tier 1 leverage capital ratio of 10.91%, calculated under the Basel III Capital Rules, continue to place the Company in the “well capitalized” category for regulatory purposes, which is defined as institutions with a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%.
Commercial real estate loans consist primarily of commercial retail properties, shopping centers, owner-occupied industrial facilities, office buildings, multiple-unit apartments, hotels, and multi-tenanted industrial properties, and are typically secured by first deeds of trust on such commercial properties. ● Commercial loans decreased $207.0 million, or 6.3%, to $3.10 billion at December 31, 2024, compared to $3.31 billion at December 31, 2023.
Commercial real estate loans consist primarily of commercial retail properties, shopping centers, owner-occupied industrial facilities, office buildings, multiple-unit apartments, hotels, and multi-tenanted industrial properties, and are typically secured by first deeds of trust on such commercial properties. ● Commercial loans increased $86.6 million, or 2.8%, to $3.18 billion at December 31, 2025, compared to $3.10 billion at December 31, 2024.
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 .
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. Commercial — Construction and Land Loans .
These borrowings bear fixed rates and are secured by loans. See Note 9 to the Consolidated Financial Statements. At December 31, 2024, the Bank pledged $474.8 million of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program.
These borrowings bear fixed rates and are secured by loans. See Note 9 to the Consolidated Financial Statements. At December 31, 2025, the Bank pledged $1.42 billion of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program.
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, allowance for credit losses consisted of three scenarios as provided by an outside forecaster.
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, 2025, allowance for credit losses consisted of three scenarios as provided by a reputable third-party economic forecaster.
Non-interest Expense Non-interest expense includes expenses related to salaries and benefits of employees, occupancy expenses, marketing expenses, computer and equipment expenses, amortization of core deposit intangibles, amortization of investment is affordable housing and alternative energy partnerships, and other operating expenses. Comparison of 2024 with 2023 Non-interest expense totaled $374.7 million in 2024 compared to $380.5 million in 2023.
Non-interest Expense Non-interest expense includes expenses related to salaries and benefits of employees, occupancy expenses, marketing expenses, computer and equipment expenses, amortization of core deposit intangibles, amortization of investment is affordable housing and alternative energy partnerships, and other operating expenses. 39 Table of Contents Comparison of 2025 with 2024 Non-interest expense totaled $355.1 million in 2025 compared to $374.7 million in 2024.
As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets increased to 1.01% at December 31, 2024, from 0.48% at December 31, 2023.
As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets decreased to 0.71% at December 31, 2025, from 1.01% at December 31, 2024.
Total CRE loans represented 289% of total risk-based capital as of December 31, 2024, and 292% as of December 31, 2023, which were within the Bank’s internal limit of 400% of total capital. See Part I — Item 1A — “Risk Factors” for a discussion of some of the factors that may affect us.
Total CRE loans represented 287% of total risk-based capital as of December 31, 2025, and 289% as of December 31, 2024, which were within both the Bank’s internal policy limit and supervisory criteria. See Part I — Item 1A — “Risk Factors” for a discussion of some of the factors that may affect us.
The Bank generally seeks to obtain current appraisals, sales contracts, or other available market price information intended to provide updated factors in evaluating potential loss. 48 Table of Contents The allowance for loan losses to non-performing loans was 93.39% at December 31, 2024, compared to 209.33% at December 31, 2023, primarily due to an increase in non-performing loans.
The Bank generally seeks to obtain current appraisals, sales contracts, or other available market price information intended to provide updated factors in evaluating potential loss. 48 Table of Contents The allowance for loan losses to non-performing loans was 172.82% at December 31, 2025, compared to 93.39% at December 31, 2024, primarily due to a decrease in non-accrual loans.
The allowance for loan losses was $161.8 million and the allowance for off-balance sheet unfunded credit commitments was $9.7 million at December 31, 2024, which represented the amount believed by management to be appropriate to absorb lifetime credit losses in the loan portfolio, including unfunded credit commitments.
The allowance for loan losses was $195.9 million and the allowance for off-balance sheet unfunded credit commitments was $12.4 million at December 31, 2025, which represented the amount believed by management to be appropriate to absorb lifetime credit losses in the loan portfolio, including unfunded credit commitments.
The Bank recorded a provision for credit losses of $37.5 million in 2024 compared with a provision for credit losses of $26.0 million in 2023, and a provision for credit losses of $14.5 million in 2022.
The Bank recorded a provision for credit losses of $72.6 million in 2025 compared with a provision for credit losses of $37.5 million in 2024, and a provision for credit losses of $26.0 million in 2023.
The allowance for loan losses was $161.8 million and the allowance for off-balance sheet unfunded credit commitments was $9.7 million at December 31, 2024, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments.
The allowance for loan losses was $195.9 million and the allowance for off-balance sheet unfunded credit commitments was $12.4 million at December 31, 2025, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded credit commitments.
The following table displays average deposits and rates for the past five years: Average Deposits and Average Rates Year Ended December 31, 2024 2023 2022 2021 2020 Amount % Amount % Amount % Amount % Amount % (In thousands) Deposits Non-interest-bearing demand deposits $ 3,283,586 — % $ 3,705,788 — % $ 4,386,526 — % $ 3,751,626 — % $ 3,158,828 — % Interest bearing demand deposits 2,186,726 2.05 2,388,080 1.71 2,471,256 0.33 2,047,177 0.11 1,591,924 0.18 Money market deposits 3,166,318 3.65 3,164,739 2.72 4,902,357 0.81 4,034,246 0.45 2,903,837 0.74 Savings deposits 1,151,427 1.52 1,070,405 0.83 1,118,967 0.08 897,663 0.09 759,581 0.13 Time deposits 10,022,826 4.57 8,849,293 3.75 5,398,808 1.04 5,979,191 0.68 7,268,738 1.54 Total deposits $ 19,810,883 3.21 % $ 19,178,305 2.44 % $ 18,277,914 0.58 % $ 16,709,903 0.37 % $ 15,682,908 0.87 % Management considers the Bank’s time deposits of $250 thousand or more, which totaled $5.70 billion at December 31, 2024, to be generally less volatile than other wholesale funding sources primarily because approximately 86.7% of the Bank’s CDs of $250 thousand or more have been on deposit with the Bank for two years or more.
The following table displays average deposits and rates for the past five years: Average Deposits and Average Rates Year Ended December 31, 2025 2024 2023 2022 2021 Amount % Amount % Amount % Amount % Amount % ($ In thousands) Deposits Non-interest-bearing demand deposits $ 3,376,699 — % $ 3,283,586 — % $ 3,705,788 — % $ 4,386,526 — % $ 3,751,626 — % NOW deposits 2,193,139 1.66 2,186,726 2.05 2,388,080 1.71 2,471,256 0.33 2,047,177 0.11 Money market deposits 3,518,747 3.36 3,166,318 3.65 3,164,739 2.72 4,902,357 0.81 4,034,246 0.45 Savings deposits 1,393,380 1.65 1,151,427 1.52 1,070,405 0.83 1,118,967 0.08 897,663 0.09 Time deposits 9,675,753 3.87 10,022,826 4.57 8,849,293 3.75 5,398,808 1.04 5,979,191 0.68 Total deposits $ 20,157,718 2.74 % $ 19,810,883 3.21 % $ 19,178,305 2.44 % $ 18,277,914 0.58 % $ 16,709,903 0.37 % Management considers the Bank’s time deposits of $250 thousand or more, which totaled $5.74 billion at December 31, 2025, to be generally less volatile than other wholesale funding sources primarily because approximately 90.3% of the Bank’s CDs of $250 thousand or more have been on deposit with the Bank for two years or more.
The balance for construction loans with interest reserves which have been extended was $4.2 million with pre-established interest reserves of $53 thousand at December 31, 2024, compared to $6.4 million with pre-established interest reserves of $0.5 million at December 31, 2023.
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.
Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $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, and 2023, respectively.
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, and accounted for 2% of total loans held-for-investment as of December 31, 2025, and 2024.
Net charge-offs for 2024 were $29.7 million, or 0.15% of average loans, compared to net charge-offs of $17.6 million for 2023, or 0.09% of average loans, and net charge-offs of $2.6 million for 2022, or 0.01% of average loans.
Net charge-offs for 2025 were $35.7 million, or 0.18% of average loans, compared to net charge-offs of $29.7 million for 2024, or 0.15% of average loans, and net charge-offs of $17.6 million for 2023, or 0.09% of average loans.
Table of Contents The classification of loans by type and amount outstanding as of December 31 for each of the past five years is presented below: Loan Type and Mix As of December 31, 2024 2023 2022 2021 2020 (In thousands) Commercial loans $ 3,098,004 $ 3,305,048 $ 3,318,778 $ 2,982,399 $ 2,836,833 Residential mortgage loans and equity lines 5,919,092 6,084,666 5,577,500 4,601,493 4,569,944 Commercial real estate loans 10,033,830 9,729,581 8,793,685 8,143,272 7,555,027 Construction loans 319,649 422,647 559,372 611,031 679,492 Installment and other loans 5,380 6,198 4,689 4,284 3,100 Gross loans 19,375,955 19,548,140 18,254,024 16,342,479 15,644,396 Less: Allowance for loan losses (161,765 ) (154,562 ) (146,485 ) (136,157 ) (166,538 ) Unamortized deferred loan fees (10,541 ) (10,720 ) (6,641 ) (4,321 ) (2,494 ) Total loans, net $ 19,203,649 $ 19,382,858 $ 18,100,898 $ 16,202,001 $ 15,475,364 Loans held for sale $ — $ — $ — $ — $ — The loan maturities in the table below are based on contractual maturities as of December 31, 2024.
The classification of loans by type and amount outstanding as of December 31 for each of the past five years is presented below: Loan Type and Mix As of December 31, 2025 2024 2023 2022 2021 ($ In thousands) Commercial loans $ 3,184,556 $ 3,098,004 $ 3,305,048 $ 3,318,778 $ 2,982,399 Residential mortgage loans and equity lines 6,058,538 5,919,092 6,084,666 5,577,500 4,601,493 Commercial real estate loans 10,564,744 10,033,830 9,729,581 8,793,685 8,143,272 Construction loans 337,550 319,649 422,647 559,372 611,031 Installment and other loans 1,814 5,380 6,198 4,689 4,284 Gross loans 20,147,202 19,375,955 19,548,140 18,254,024 16,342,479 Less: Allowance for loan losses (195,911 ) (161,765 ) (154,562 ) (146,485 ) (136,157 ) Unamortized deferred loan fees (14,903 ) (10,541 ) (10,720 ) (6,641 ) (4,321 ) Total loans, net $ 19,936,388 $ 19,203,649 $ 19,382,858 $ 18,100,898 $ 16,202,001 Loans held for sale $ — $ — $ — $ — $ — The loan maturities in the table below are based on contractual maturities as of December 31, 2025.
Total commercial real estate loans accounted for 51.8% of gross loans at December 31, 2024, compared to 49.8% at December 31, 2023.
Total commercial real estate loans accounted for 52.4% of gross loans at December 31, 2025, compared to 51.8% at December 31, 2024.
Income Tax Expense Income tax expense was $31.6 million in 2024, compared to $49.5 million in 2023, and $111.9 million in 2022. The effective tax rate was 9.9% for 2024, 12.3% for 2023, and 23.7% for 2022. The effective tax rate includes the impact of low-income housing and alternative energy investments.
Income Tax Expense Income tax expense was $75.1 million in 2025, compared to $31.6 million in 2024, and $49.5 million in 2023. The effective tax rate was 19.2% for 2025, 9.9% for 2024, and 12.3% for 2023. The effective tax rate includes the impact of low-income housing and alternative energy investments.
As of December 31, 2024, recorded investment in non-accrual loans was $169.2 million compared to $66.7 million as of December 31, 2023. For non-accrual loans, the amounts previously charged off represent 11.7% of the contractual balances for non-accrual loans as of December 31, 2024.
As of December 31, 2025, recorded investment in non-accrual loans was $112.4 million compared to $169.2 million as of December 31, 2024. For non-accrual loans, the amounts previously charged off represent 14.4% of the contractual balances for non-accrual loans as of December 31, 2025.
Investment Securities Investment securities were $1.55 billion and represented 6.7% of total assets at December 31, 2024, compared with $1.60 billion and 7.0% of total assets at December 31, 2023.
Investment Securities Investment securities were $1.66 billion and represented 6.8% of total assets at December 31, 2025, compared with $1.55 billion and 6.7% of total assets at December 31, 2024.
The allowance for loan losses represented 0.83% of period-end gross loans and 93.39% of non-performing loans at December 31, 2024. The comparable ratios were 0.79% of period-end gross loans and 209.33% of non-performing loans at December 31, 2023.
The allowance for loan losses represented 0.97% of period-end gross loans and 172.82% of non-performing loans at December 31, 2025. The comparable ratios were 0.83% of period-end gross loans and 93.39% of non-performing loans at December 31, 2024.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations General 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.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations General 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 for the year ended December 31,2025, as compared to 2024.
The changes in rate contributed to an interest income increase of $51.6 million. ● Change in the mix of interest-earning assets: Average gross loans, which generally have a higher yield than other types of investments, comprised 87.7% of total average interest-earning assets in 2024, an increase from 87.3% in 2023.
The changes in rate contributed to an interest income decrease of $45.6 million. ● Change in the mix of interest-earning assets: Average gross loans, which generally have a higher yield than other types of investments, comprised 87.7% of total average interest-earning assets for both 2025, and 2024.
All material transactions between these entities are eliminated. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
The financial information presented herein includes the accounts of the Bancorp, its subsidiaries, including the Bank, and the Bank’s consolidated subsidiaries. All material transactions between these entities are eliminated. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
Brokered-deposits totaled $1.06 billion, or 5.4%, of total deposits, at December 31, 2024, compared to $1.52 billion, or 7.9%, at December 31, 2023.
Brokered-deposits totaled $1.59 billion, or 7.6%, of total deposits, at December 31, 2025, compared to $1.06 billion, or 5.4%, at December 31, 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, decreased to 98.98% at December 31, 2024, from 221.58% at December 31, 2023.
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, increased to 183.79% at December 31, 2025, from 98.98% at December 31, 2024.
At December 31, 2024, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.44 billion. 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 million as of December 31, 2024.
At December 31, 2025, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.85 billion. There were no total advances from the FHLB of San Francisco and standby letter of credits issued by FHLB on the Company’s behalf were $953.5 million as of December 31, 2025.
The following table displays the deposit mix balances as of the end of the past three years: Deposit Mix Year Ended December 31, 2024 2023 2022 Amount % Amount % Amount % (In thousands) Deposits Non-interest-bearing demand deposits $ 3,284,342 16.7 % $ 3,529,018 18.3 % $ 4,168,989 22.5 % Interest bearing demand deposits 2,205,695 11.2 2,370,685 12.3 2,509,736 13.6 Money market deposits 3,372,773 17.1 3,049,754 15.8 3,812,724 20.6 Savings deposits 1,252,788 6.4 1,039,203 5.4 1,000,460 5.4 Time deposits 9,570,601 48.6 9,336,787 48.3 7,013,370 37.9 Total deposits $ 19,686,199 100.0 % $ 19,325,447 100.0 % $ 18,505,279 100.0 % Average total deposits increased $632.6 million, or 3.3%, to $19.81 billion in 2024, compared with average total deposits of $19.18 billion in 2023.
The following table displays the deposit mix balances as of the end of the past three years: Deposit Mix Year Ended December 31, 2025 2024 2023 Amount % Amount % Amount % ($ In thousands) Deposits Non-interest-bearing demand deposits $ 3,505,606 16.8 % $ 3,284,342 16.7 % $ 3,529,018 18.3 % NOW deposits 2,370,047 11.3 2,205,695 11.2 2,370,685 12.3 Money market deposits 3,800,471 18.2 3,372,773 17.1 3,049,754 15.8 Savings deposits 1,500,890 7.2 1,252,788 6.4 1,039,203 5.4 Time deposits 9,717,153 46.5 9,570,601 48.6 9,336,787 48.3 Total deposits $ 20,894,167 100.0 % $ 19,686,199 100.0 % $ 19,325,447 100.0 % Average total deposits increased $346.8 million, or 1.8%, to $20.16 billion in 2025, compared with average total deposits of $19.81 billion in 2024.
At December 31, 2023, the Company’s Tier 1 risk-based capital ratio was 12.84%, total risk-based capital ratio was 14.31%, and Tier 1 leverage capital ratio was 10.55%. A table displaying the Bancorp’s and the Bank’s capital and leverage ratios at December 31, 2024, and 2023, is included in Note 22 to the Consolidated Financial Statements.
At December 31, 2024, the Company’s Tier 1 risk-based capital ratio was 13.54%, total risk-based capital ratio was 15.08%, and Tier 1 leverage capital ratio was 10.96%. A table displaying the Bancorp’s and the Bank’s capital and leverage ratios at December 31, 2025, and 2024, is included in Note 22 to the Consolidated Financial Statements.
The allowance for credit losses, which is the sum of the allowances for loan losses and for off-balance sheet unfunded credit commitments, was $171.4 million at December 31, 2024, compared to $163.6 million at December 31, 2023. The allowance for credit losses represented 0.88% of period-end gross loans and 98.98% of non-performing loans at December 31, 2024.
The allowance for credit losses, which is the sum of the allowances for loan losses and for off-balance sheet unfunded credit commitments, was $208.4 million at December 31, 2025, compared to $171.4 million at December 31, 2024. The allowance for credit losses represented 1.03% of period-end gross loans and 183.79% of non-performing loans at December 31, 2025.
Construction loan exposure was made up of $319.6 million in loans outstanding, plus $186.5 million in unfunded commitments as of December 31, 2024, compared with $422.6 million in loans outstanding, plus $280.5 million in unfunded commitments as of December 31, 2023. Land loans totaled $83.4 million as of December 31, 2024, compared with $71.8 million as of December 31, 2023.
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. Land loans totaled $70.4 million as of December 31, 2025, compared with $83.4 million as of December 31, 2024.
As of December 31, 2024, construction loans of $227.9 million were disbursed with pre-established interest reserves of $31.3 million compared to $220.6 million of such loans disbursed with pre-established interest reserves of $41.3 million at December 31, 2023.
As of December 31, 2025, construction loans of $225.9 million were disbursed with pre-established interest reserves of $34.0 million compared to $227.9 million of such loans disbursed with pre-established interest reserves of $31.3 million at December 31, 2024.
There were 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. There were no land loans with interest reserves which have been extended at December 31, 2024, and December 31, 2023.
Land loans of $15.3 million were disbursed with pre-established interest reserves of $1.3 million at December 31, 2025, compared to no land loans disbursed with pre-established interest reserves at December 31, 2024. There were no land loans with interest reserves which have been extended at December 31, 2025, and December 31, 2024.
The overall increase in interest expense was primarily due to increases in rates on interest bearing deposits, and rate increases in other borrowings and long term debt as discussed below: ● Changes in volume: Average interest-bearing deposits increased $1.05 billion, or 6.8%, and average FHLB advances and other borrowings decreased $190.1 million, or 37.63%.
The overall decrease in interest expense was primarily due to decreases in rates on interest bearing deposits, and rate decreases in other borrowings and long term debt as discussed below: ● Changes in volume: Average interest-bearing deposits increased $253.7 million, or 1.5%, and average FHLB advances and other borrowings decreased $143.8 million, or 45.63%.
The following tables present the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers engaged in as of the dates indicated: December 31, 2024 December 31, 2023 Real Real Estate (1) Commercial Estate (1) Commercial (In thousands) Type of Collateral Single/multi-family residence $ 52,930 $ 5,259 $ 16,400 $ 3,363 Commercial real estate 56,464 576 35,877 — Personal property (UCC) — 53,932 — 11,041 Total $ 109,394 $ 59,767 $ 52,277 $ 14,404 (1) Real estate includes commercial real estate loans, construction loans, residential mortgage loans, equity lines and installment & other loans.
The following tables present the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers engaged in as of the dates indicated: December 31, 2025 December 31, 2024 Real Real Estate (1) Commercial Estate (1) Commercial ($ In thousands) Type of Collateral Single/multi-family residence $ 57,676 $ 516 $ 52,930 $ 5,259 Commercial real estate 33,189 3,514 56,464 576 Personal property (UCC) — 17,468 — 53,932 Total $ 90,865 $ 21,498 $ 109,394 $ 59,767 (1) Real estate includes commercial real estate loans, construction loans, residential mortgage loans, equity lines and installment & other loans.
The following table summarizes the carrying value of our portfolio of securities for each of the past two years: As of December 31, 2024 2023 (In thousands) Securities AFS: U.S. treasury securities $ 621,462 $ 495,300 U.S. government agency entities 9,149 48,169 Mortgage-backed securities 684,016 786,723 Collateralized mortgage obligations 24,556 28,044 Corporate debt securities 207,945 246,334 Total $ 1,547,128 $ 1,604,570 Equity Securities Mutual funds 5,532 5,585 Preferred stock of government sponsored entities 7,287 1,821 Other equity securities 21,610 33,000 Total $ 34,429 $ 40,406 40 Table of Contents Upon the adoption of ASU 2016-13, Financial Instruments - Credit Losses, debt securities available-for-sale ("AFS") are measured at fair value and subject to impairment testing.
The following table summarizes the carrying value of our portfolio of securities for each of the past two years: As of December 31, 2025 2024 ($ In thousands) Securities AFS: U.S. treasury securities $ 828,193 $ 621,462 U.S. government agency entities 5,822 9,149 U.S. government sponsored entities 25,011 — Mortgage-backed securities 629,437 684,016 Collateralized mortgage obligations 22,748 24,556 Corporate debt securities 147,012 207,945 Total $ 1,658,223 $ 1,547,128 Equity Securities Mutual funds 8,691 5,532 Preferred stock of government sponsored entities 9,364 7,287 Other equity securities 33,831 21,610 Total $ 51,886 $ 34,429 40 Table of Contents Upon the adoption of ASU 2016-13, Financial Instruments - Credit Losses, debt securities available-for-sale ("AFS") are measured at fair value and subject to impairment testing.
Net income available to common stockholders and key financial performance ratios are presented below for the three years indicated: Year Ended December 31, 2024 2023 2022 (In thousands, except per share and ratio data) Net income $ 285,979 $ 354,124 $ 360,642 Basic earnings per common share $ 3.97 $ 4.88 $ 4.85 Diluted earnings per common share $ 3.95 $ 4.86 $ 4.83 Return on average assets 1.22 % 1.56 % 1.69 % Return on average stockholders' equity 10.18 % 13.56 % 14.70 % Total average assets $ 23,368,433 $ 22,705,192 $ 21,383,526 Total average equity $ 2,809,621 $ 2,610,582 $ 2,453,391 Efficiency ratio 51.35 % 46.97 % 38.38 % Effective income tax rate 9.94 % 12.25 % 23.68 % Net Interest Income Comparison of 2024 with 2023 Net interest income decreased $67.7 million, or 9.1%, from $741.7 million in 2023 to $674.1 million in 2024.
Net income available to common stockholders and key financial performance ratios are presented below for the three years indicated: Year Ended December 31, 2025 2024 2023 ($ In thousands, except per share and ratio data) Net income $ 315,124 $ 285,979 $ 354,124 Basic earnings per common share $ 4.55 $ 3.97 $ 4.88 Diluted earnings per common share $ 4.54 $ 3.95 $ 4.86 Return on average assets 1.33 % 1.22 % 1.56 % Return on average stockholders' equity 10.87 % 10.18 % 13.56 % Total average assets $ 23,620,665 $ 23,368,433 $ 22,705,192 Total average equity $ 2,899,907 $ 2,809,621 $ 2,610,582 Efficiency ratio 43.41 % 51.35 % 46.97 % Effective income tax rate 19.24 % 9.94 % 12.25 % 36 Table of Contents Net Interest Income Comparison of 2025 with 2024 Net interest income increased $68.4 million, or 10.1%, from $674.1 million in 2024 to $742.5 million in 2025.
As of December 31, 2024, $109.4 million, or 64.7%, of the $169.2 million of non-accrual loans were secured by real estate compared to $52.3 million, or 78.4% of the $66.7 million of non-accrual loans that were secured by real estate as of December 31, 2023.
As of December 31, 2025, $90.9 million, or 80.8%, of the $112.4 million of non-accrual loans were secured by real estate compared to $109.4 million, or 64.7% of the $169.2 million of non-accrual loans that were secured by real estate as of December 31, 2024.
The following table presents non-accrual loans and the related allowance as of December 31, 2024, and 2023: As of December 31, 2024 Unpaid Principal Balance Recorded Investment Allowance (In thousands) With no allocated allowance: Commercial loans $ 56,022 $ 53,499 $ — Commercial real estate loans 100,316 82,936 — Residential mortgage and equity lines 19,340 18,831 — Subtotal $ 175,678 $ 155,266 $ — With allocated allowance: Commercial loans $ 18,769 $ 6,267 $ 1,208 Commercial real estate loans 194 193 1 Residential mortgage and equity lines 7,786 7,435 29 Subtotal $ 26,749 $ 13,895 $ 1,238 Total non-accrual loans $ 202,427 $ 169,161 $ 1,238 As of December 31, 2023 Unpaid Principal Balance Recorded Investment Allowance (In thousands) With no allocated allowance: Commercial loans $ 26,310 $ 14,404 $ — Construction loans 7,736 7,736 — Commercial real estate loans 41,725 32,030 — Residential mortgage and equity lines 12,957 12,511 — Subtotal $ 88,728 $ 66,681 $ — With allocated allowance: Commercial loans $ — $ — $ — Commercial real estate loans — — — Residential mortgage and equity lines — — — Subtotal $ — $ — $ — Total non-accrual loans $ 88,728 $ 66,681 $ — Loan Interest Reserves In accordance with customary banking practice, construction loans and land development loans generally are originated where interest on the loan is disbursed from pre-established interest reserves included in the total original loan commitment.
The following table presents non-accrual loans and the related allowance as of December 31, 2025, and 2024: As of December 31, 2025 Unpaid Principal Balance Recorded Investment Allowance ($ In thousands) With no allocated allowance: Commercial loans $ 25,154 $ 14,899 $ — Commercial real estate loans 58,213 39,874 — Residential mortgage and equity lines 32,854 31,354 — Subtotal $ 116,221 $ 86,127 $ — With allocated allowance: Commercial loans $ 6,887 $ 6,599 $ 3,409 Commercial real estate loans 24,438 19,637 8,932 Subtotal $ 31,325 $ 26,236 $ 12,341 Total non-accrual loans $ 147,546 $ 112,363 $ 12,341 As of December 31, 2024 Unpaid Principal Balance Recorded Investment Allowance ($ In thousands) With no allocated allowance: Commercial loans $ 56,022 $ 53,499 $ — Commercial real estate loans 100,316 82,936 — Residential mortgage and equity lines 19,340 18,831 — Subtotal $ 175,678 $ 155,266 $ — With allocated allowance: Commercial loans $ 18,769 $ 6,267 $ 1,208 Commercial real estate loans 194 193 1 Residential mortgage and equity lines 7,786 7,435 29 Subtotal $ 26,749 $ 13,895 $ 1,238 Total non-accrual loans $ 202,427 $ 169,161 $ 1,238 Loan Interest Reserves In accordance with customary banking practice, construction loans and land development loans generally are originated where interest on the loan is disbursed from pre-established interest reserves included in the total original loan commitment.
The changes in volume contributed to an interest income increase of $41.1 million. ● Changes in rate: The average yield of interest-bearing assets increased to 6.02% in 2024 from 5.78% in 2023.
The changes in volume contributed to an interest income increase of $19.8 million. ● Changes in rate: The average yield of interest-bearing assets decreased to 5.80% in 2025 from 6.02% in 2024.
Loss given default rates are computed based on the net charge-offs recognized 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.
Loss given default rates are estimated and then applied to the expected exposure at default of defaulted loans starting with the fourth quarter of 2007 through the fourth quarter of 2025.
As a result, the Company recorded an $11.3 million special assessment fee in the fourth quarter of 2023 and an additional $1.8 million in 2024. 45 Table of Contents Long-term Debt We established three special purpose trusts in 2003 and two in 2007 for the purpose of issuing Guaranteed Preferred Beneficial Interests in their Subordinated Debentures to outside investors (“Capital Securities”).
As a result, the Company has recognized $11.7 million cumulatively related to the special assessment as of December 31, 2025. 45 Table of Contents Long-term Debt We established three special purpose trusts in 2003 and two in 2007 for the purpose of issuing Guaranteed Preferred Beneficial Interests in their Subordinated Debentures to outside investors (“Capital Securities”).
Interest-Earning Assets and Interest-Bearing Liabilities Average Average Average 2024 Interest Yield/ 2023 Interest Yield/ 2022 Interest Yield/ Average Income/ Rate Average Income/ Rate Average Income/ Rate Balance Expense (1) (2) Balance Expense (1)(2) Balance Expense (1)(2) (In thousands) Interest-earning assets: Total loans (1) $ 19,434,614 $ 1,217,166 6.26 % $ 18,763,271 $ 1,130,242 6.02 % $ 17,631,943 $ 801,981 4.55 % Taxable investment securities 1,621,477 59,307 3.66 % 1,558,877 51,717 3.32 % 1,321,346 28,240 2.14 % Federal Home Loan Bank stock 18,681 1,684 9.02 % 18,620 1,349 7.24 % 17,630 1,103 6.26 % Interest-bearing deposits 1,098,488 56,818 5.17 % 1,141,720 58,914 5.16 % 1,261,878 19,957 1.58 % Total interest-earning assets $ 22,173,260 $ 1,334,975 6.02 % $ 21,482,488 $ 1,242,222 5.78 % $ 20,232,797 $ 851,281 4.21 % Non-interest earning assets: Cash and due from banks $ 168,265 $ 196,819 $ 173,825 Other non-earning assets 1,193,677 1,184,318 1,128,038 Total non-interest earning assets $ 1,361,942 $ 1,381,137 $ 1,301,863 Less: Allowance for loan losses (155,612 ) (150,110 ) (145,433 ) Deferred loan fees (11,157 ) (8,323 ) (5,701 ) Total assets $ 23,368,433 $ 22,705,192 $ 21,383,526 Interest-bearing liabilities: Interest-bearing demand deposits $ 2,186,726 $ 44,899 2.05 % $ 2,388,080 $ 40,952 1.71 % $ 2,471,256 $ 8,176 0.33 % Money market deposits 3,166,318 115,428 3.65 % 3,164,739 86,097 2.72 % 4,902,357 39,913 0.81 % Savings deposits 1,151,427 17,448 1.52 % 1,070,405 8,916 0.83 % 1,118,967 853 0.08 % Time deposits 10,022,826 458,490 4.57 % 8,849,293 331,997 3.75 % 5,398,808 56,354 1.04 % Total interest-bearing deposits $ 16,527,297 $ 636,265 3.85 % $ 15,472,517 $ 467,962 3.02 % $ 13,891,388 $ 105,296 0.76 % Other borrowings 315,086 16,526 5.24 % 505,218 26,034 5.15 % 247,276 6,742 2.73 % Long-term debt 119,136 8,129 6.82 % 119,136 6,480 5.44 % 119,136 5,546 4.66 % Total interest-bearing liabilities $ 16,961,519 $ 660,920 3.90 % $ 16,096,871 $ 500,476 3.11 % $ 14,257,800 $ 117,584 0.82 % Non-interest bearing liabilities: Demand deposits 3,283,586 3,705,788 4,386,526 Other liabilities 313,707 291,951 285,809 Today equity 2,809,621 2,610,582 2,453,391 Total liabilities and equity $ 23,368,433 $ 22,705,192 $ 21,383,526 Net interest spread 2.12 % 2.67 % 3.38 % Net interest income $ 674,055 $ 741,746 $ 733,697 Net interest margin 3.04 % 3.45 % 3.63 % (1) Yields and amounts of interest earned include loan fees.
Interest-Earning Assets and Interest-Bearing Liabilities Average Average Average 2025 Interest Yield/ 2024 Interest Yield/ 2023 Interest Yield/ Average Income/ Rate Average Income/ Rate Average Income/ Rate Balance Expense (1) (2) Balance Expense (1)(2) Balance Expense (1)(2) ($ In thousands) Interest-earning assets: Total loans (1) $ 19,722,436 $ 1,206,547 6.12 % $ 19,434,614 $ 1,217,166 6.26 % $ 18,763,271 $ 1,130,242 6.02 % Taxable investment securities 1,592,700 51,964 3.26 % 1,621,477 59,307 3.66 % 1,558,877 51,717 3.32 % Federal Home Loan Bank stock 17,250 1,508 8.74 % 18,681 1,684 9.02 % 18,620 1,349 7.24 % Interest-bearing deposits 1,161,842 49,241 4.24 % 1,098,488 56,818 5.17 % 1,141,720 58,914 5.16 % Total interest-earning assets $ 22,494,228 $ 1,309,260 5.80 % $ 22,173,260 $ 1,334,975 6.02 % $ 21,482,488 $ 1,242,222 5.78 % Non-interest earning assets: Cash and due from banks $ 163,019 $ 168,265 $ 196,819 Other non-earning assets 1,150,778 1,193,677 1,184,318 Total non-interest earning assets $ 1,313,797 $ 1,361,942 $ 1,381,137 Less: Allowance for loan losses (173,955 ) (155,612 ) (150,110 ) Deferred loan fees (13,405 ) (11,157 ) (8,323 ) Total assets $ 23,620,665 $ 23,368,433 $ 22,705,192 Interest-bearing liabilities: Interest-bearing demand deposits $ 2,193,139 $ 36,493 1.66 % $ 2,186,726 $ 44,899 2.05 % $ 2,388,080 $ 40,952 1.71 % Money market deposits 3,518,747 118,192 3.36 % 3,166,318 115,428 3.65 % 3,164,739 86,097 2.72 % Savings deposits 1,393,380 22,933 1.65 % 1,151,427 17,448 1.52 % 1,070,405 8,916 0.83 % Time deposits 9,675,753 374,232 3.87 % 10,022,826 458,490 4.57 % 8,849,293 331,997 3.75 % Total interest-bearing deposits $ 16,781,019 $ 551,850 3.29 % $ 16,527,297 $ 636,265 3.85 % $ 15,472,517 $ 467,962 3.02 % Other borrowings 171,309 6,902 4.03 % 315,086 16,526 5.24 % 505,218 26,034 5.15 % Long-term debt 119,136 8,048 6.76 % 119,136 8,129 6.82 % 119,136 6,480 5.44 % Total interest-bearing liabilities $ 17,071,464 $ 566,800 3.32 % $ 16,961,519 $ 660,920 3.90 % $ 16,096,871 $ 500,476 3.11 % Non-interest bearing liabilities: Demand deposits 3,376,699 3,283,586 3,705,788 Other liabilities 272,595 313,707 291,951 Today equity 2,899,907 2,809,621 2,610,582 Total liabilities and equity $ 23,620,665 $ 23,368,433 $ 22,705,192 Net interest spread 2.48 % 2.12 % 2.67 % Net interest income $ 742,460 $ 674,055 $ 741,746 Net interest margin 3.30 % 3.04 % 3.45 % (1) Yields and amounts of interest earned include loan fees.
The decrease in net interest income was due primarily to the increase in interest expense from time deposits offset by an increase in interest income from loans. Average loans for 2024 were $19.43 billion, a $671.3 million, or a 3.6% increase from $18.76 billion in 2023.
The increase in net interest income was due primarily to the decrease in interest expense from time deposits partially offset by a decrease in interest income from loans. Average loans for 2025 were $19.72 billion, a $287.8 million, or a 1.5% increase from $19.43 billion in 2024.
Total non-performing portfolio assets increased $103.0 million, or 110.4%, to $196.3 million at December 31, 2024, compared to $93.3 million at December 31, 2023, primarily due to an increase of $102.5 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.
Total non-performing portfolio assets decreased $52.6 million, or 26.8%, to $143.7 million at December 31, 2025, compared to $196.3 million at December 31, 2024, primarily due to a decrease of $56.8 million in total non-accrual loans and $3.1 million in loans 90 days or more past due, offset by increase of $7.3 million in other real estate owned.
The return on average stockholders’ equity was 10.18% in 2024, compared to 13.56% in 2023, and to 14.70% in 2022.
The return on average assets in 2025 was 1.33%, compared to 1.22% in 2024, and to 1.56% in 2023. The return on average stockholders’ equity was 10.87% in 2025, compared to 10.18% in 2024, and to 13.56% in 2023.

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