CATHAY GENERAL BANCORP

1.** Summary of Significant Accounting Policies

The accompanying Consolidated Financial Statements include the accounts of Cathay General Bancorp (the “Bancorp”), a Delaware corporation, its wholly-owned subsidiaries, Cathay Bank (the “Bank”), a California state-chartered bank, andtwelve limited partnerships investing in affordable housing projects (together, the “Company,” “we,” “us,” or “our”). All significant inter-company transactions and balances have been eliminated in consolidation. The Consolidated Financial Statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry.

Organization and Background.

The Bancorp’s primary business is to act as the holding company for the Bank.

The Bank is a commercial bank, servicing primarily the individuals, professionals, and small to medium-sized businesses in the local markets in which its branches are located. Its operations include the acceptance of checking, savings, and time deposits, and the making of commercial, real estate, and consumer loans. The Bank also offers trade financing, letters of credit, wire transfer, foreign currency spot and forward contracts, Internet banking, investment services, and other customary banking services to its clients. The Bank owns 100% of the common securities of Cathay Holdings LLC.

*Use of Estimates.*The preparation of the Consolidated Financial Statements in accordance with GAAP requires management of the Company to make several estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The significant estimates subject to change relate to the allowance for credit losses.

Concentrations.The Bank was incorporated in California and started its business from California. Therefore, loans originated, and deposits solicited were mainly from California. As of December 31, 2025, gross loans were primarily comprised of 52.4% of commercial real estate loans,29.0% of residential mortgage loans, and 15.8% of commercial loans. As of* December 31, 2025*, approximately 47.9% of the Bank’s residential mortgages were for properties located in California.

Securities Available for Sale. Debt securities Available For Sale (“AFS”) are measured at fair value and subject to impairment testing. When an AFS debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, (1) recognize an allowance for credit loss by a charge to earnings for the credit-related component (if any) of the decline in fair value, and (2) recognize in other comprehensive income (loss) any non-credit related components of the fair value change. If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, butnot more than the amount of the current existing reserve for that security.

Interest income includes amortization of premiums and discounts as an adjustment of yield on a level-yield basis. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

A debt security is placed on nonaccrual status at the time any principal or interest payments become delinquent by90 days or greater. Interest accrued butnot received for a security placed on non-accrual is reversed against interest income.No interest was reversed against interest income during the period.

Allowance for Credit Losses on Available for Sale Securities.For AFS debt securities in an unrealized loss position, the Companyfirst assesses whether it intends to sell, or it is more likely thannot that it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell the debt security, or more likely thannot will be required to sell the security before recovery of its amortized cost basis, any allowance for credit losses shall be written off and the amortized cost basis shall be written down to the debt security's fair value at the reporting date with any incremental impairment reported in earnings. For AFS debt securities that donot meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, the payment structure of the security, failure of the issuer of the security to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. Any fair value changes that havenot been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

The amortized cost of the Company’s AFS debt securities exclude accrued interest, which is included in “accrued interest receivable” on the Consolidated Balance Sheets. The Company has made an accounting policy electionnot to measure an allowance for credit losses for accrued interest receivables on AFS debt securities since the Company timely reverses any previously accrued interest when the debt security remains in default for an extended period. As each AFS debt security has a unique security structure, where the accrual status is clearly determined when certain criteria listed in the terms are met, the Company assesses the default status of each security as defined by the debt security’s specific security structure.

Equity securities.The Company owns equity securities directly or indirectly through limited partnership interests in private investment funds that invest in privately held and publicly traded equity securities. These investments are accounted for in accordance with ASC321 or ASC323, depending on the nature of the Company’s ownership interests and the rights conveyed.

When the Company doesnot have significant influence over the investee and the fair value of the investment is readily determinable, the investment is measured at fair value with changes recognized in net income. When the Company doesnot have significant influence over the investee and the fair value of the investment isnot readily determinable, the investment is measured under the ASC321 measurement alternative and carried at cost, adjusted for observable price changes and impairments, with changes recognized in net income. For investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the equity method of accounting is applied.

F-8

The Company records its share of earnings or losses on those investments accounted for under the equity method of accounting based on the latest available financial information which is consistent with the timing of financial information made available by the investees to investors. The Company evaluates these investments for impairment in accordance with applicable guidance.

Investment in Federal Home Loan Bank (“FHLB”) Stock. * * As a member of the FHLB system the Bank is required to maintain an investment in the capital stock of the FHLB. The amount of investment is also affected by the outstanding advances under the line of credit the Bank maintains with the FHLB. FHLB stock is carried at cost and is pledged as collateral to the FHLB. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. The carrying amount of the FHLB stock were $17.3 million and $17.3 million at* December 31,2025, and2024, respectively. As of December 31,*2025, the Company owned 172,500 shares of FHLB stock, which exceeded the minimum stock requirement of 150,000 shares.

Loans Held for Investment.Loans receivable that the Company has the intent and ability to hold for the foreseeable future or until maturity are stated at their outstanding principal, reduced by an allowance for loan losses and net of deferred loan fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Nonrefundable fees and direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The deferred net loan fees and costs are recognized in interest income as an adjustment to yield over the loan term using the effective interest method or straight-line method. Discounts or premiums on purchased loans are accreted or amortized to interest income using the effective interest method or straight-line method over the remaining period to contractual maturity. Interest on loans is calculated using the simple-interest method on daily balances of the principal amounts outstanding based on an actual or360-day basis.

Generally, loans are placed on nonaccrual status when they become90 days past due. Loans are considered past due when contractually required principal or interest payments havenot been made on the due dates. Loans are also placed on nonaccrual status when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that full collection of principal or interest becomes uncertain, regardless of the length of past due status. Once a loan is placed on nonaccrual status, interest accrual is discontinued, and all unpaid accrued interest is reversed against interest income. As a result, accrued interest receivable doesnot carry a credit loss reserve. Interest payments received on nonaccrual loans are reflected as a reduction of principal andnot as interest income. A loan is returned to accrual status when the borrower has demonstrated a satisfactory payment trend subject to management’s assessment of the borrower’s ability to repay the loan.

Loans held for sale. Loans held for sale are carried at the lower of aggregate cost or fair value. Gains and losses are recorded in non-interest income based on the difference between sales proceeds, net of sales commissions, and carrying value. When a determination is made at the time of commitment to originate or purchase loans as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic review under the Company’s management evaluation processes, including asset/liability management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from the loans held-for-investment portfolio at amortized cost to the loans held-for-sale portfolio at lower of aggregate cost or fair value and the existing ACL on the loans transferred is reversed.

Allowance for Credit Losses (“ACL”) on Loans Held for Investment. The Company uses the current expected credit loss (“CECL”) approach for financial instruments measured at amortized cost and other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, adjusted for current conditions and reasonable and supportable forecasts, which* may*include forecasts of items such as GDP, unemployment rates, CRE and home price indexes, and reasonable and supportable economic forecasts of future events and circumstances.

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

Under the Company’s CECL approach, management estimates the ACL using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable economic forecasts that vary by loan portfolio. We use economic forecasts from Moody’s Analytics in this process. The economic forecast is updated monthly; therefore, theone used for each quarter-end calculation is generally based on aone-month lag based on the timing of when the forecast is released. The Company doesnot consider aone-month lag to create a material difference but considers any subsequent material changes to our estimated loss forecasts as deemed appropriate. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in gross domestic product (or “GDP”), unemployment rates, property values, or other relevant factors.

Under the CECL methodology, quantitative and qualitative loss factors are applied to our population of loans on a collective pool basis when similar risk characteristics exist. The Company evaluates loans for expected credit losses on an individual basis if, based on current information and events, the loan doesnot share similar credit risk characteristics with other loans. The Company* maychoose to measure expected credit losses on an individual loan basis by usingone* of the following methods: (1) the present value of the expected future cash flows of the loan discounted at the loan’s original effective interest rate, or (2) if the loan is collateral dependent, the fair value of the collateral less costs to sell. For loans that arenot collateral-dependent, the Company uses the present value of future cash flows.

F-9

Under the Company’s CECL methodology,nine portfolio segments with similar risk characteristics are evaluated for expected loss. Six portfolios are modeled using econometric models andthree smaller portfolios are evaluated using a simplified loss-rate method that calculates lifetime expected credit losses for the respective pools (simplified approach). Thesix portfolios subject to econometric modeling include residential mortgages; commercial and industrial loans (“C&I”); construction loans; commercial real estate (“CRE”) for multifamily loans; CRE for owner-occupied loans; and other CRE loans. We estimate the probability of default during the reasonable and supportable forecast period using separate econometric regression models developed to correlate macroeconomic variables, (GDP, unemployment, CRE prices and residential mortgage prices) to loan risk rating performance for each of thesix loan portfolios from thefourth quarter of2007 to thefourth quarter of2024. Loss given default rates are computed based on the net charge-offs recognized divided by the exposure at default starting with thefourth quarter of2007 through thefourth quarter of2025. The probability of default and the loss given default rates are applied to the expected amount at default at the loan level based on contractual scheduled payments and estimated prepayments. The amounts so calculated comprise the quantitative portion of the allowance for credit losses.

The Company’s CECL methodology utilizes aneight-quarter reasonable and supportable (“R&S”) forecast period, and afour-quarter reversion period. Management relies on multiple forecasts scenarios, which are weighted in determining a single loss estimate. Generally speaking, the blended scenario approach would include the Baseline, the Alternative Scenario1 – Upside –10th Percentile and the Alternative Scenario3 – Downside –90th Percentile forecasts. After the R&S period, the Company reverts linearly for thefour-quarter reversion period to the long-term loss rates for each of thesix portfolios of loans.

The Company’s CECL methodology estimates expected credit losses over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extension or renewal options are included in the original or modified contract at the reporting date and arenot unconditionally cancellable by the Company.

The simplified approach portfolios include Small Business Administration (“SBA”) loans, Home Equity Lines of Credit (“HELOCs”) and cash-secured loans, which arenot modelled econometrically due to the low loss history for thesethree pools of loans. The forecasted loss rate is based on the forecasted GDP and unemployment rates during thefirst eight quarters of the portfolio’s contractual life, reversion loss rates for the nextfour quarters of the portfolio’s contractual life on a linear declining rate, and the long-term loss rate projected over the remainder of the portfolio’s contractual life.

Under the Company’s CECL methodology, the qualitative portion of the reserve on pooled loans represents management’s judgment of additional considerations to account for internal and external risk factors that arenot adequately measured in the quantitative reserve. The qualitative loss factors consider incremental risk factors, conditions that* may**not* be reflected in quantitatively derived results, or other relevant factors to seek to ensure the allowance for credit losses reflects our best estimate of current expected credit losses. The qualitative reserves include reserves for policy exceptions, experience of management and staff, level of competition in the lending environment, weak risk identification, lack of historical loss experience with residential mortgage loans made to non-U.S. residents, oil & gas, the higher risk characteristics of purchased syndicated loans, model uncertainty, and loans with potential risk of loss given the current environment, including CRE and Office loans, but havenot degraded to the point of qualifying for a specific reserve. Current and forecasted economic trends and underlying market values for collateral dependent loans also are considered within the econometric models described above.

The Company’s CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things: segmenting the loan portfolio; determining the period over which loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the R&S forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts that are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered by management to be appropriate, there can beno assurance that it will be sufficient to absorb future losses.

During thesecond quarter of2025, the Company updated its CECL methodology to better reflect expansion periods and recession periods and increase sensitivity to economic forecasts and adopted new models for all loan pools while recalibrating with losses incurred in2023 and2024. The implemented changes to the CECL model resulted in a significant increase in the quantitative reserve, though simultaneous decreases to the individually evaluated loan reserve and qualitative reserves mitigated this impact during the quarter ended* June 30, 2025.*

Management believes the allowance for credit losses is appropriate for the current expected credit losses in our loan portfolio and associated unfunded commitments, and the risk ratings and inherent loss rates currently assigned are reasonable and appropriate as of the reporting date. It is possible that others, given the same information,* may*at any point in time reach different conclusions that could result in a significant impact to the Company’s financial statements.

Individually Evaluated Loans. Loans that donot share similar risk characteristics with other financial assets are individually evaluated for impairment and excluded from loan pools used within the collective evaluation of estimated credit losses. We defined the following criteria for what constitutes a “default”, which results in a loanno longer sharing similar risk characteristics with other loans, and therefore requires an individual evaluation for expected credit losses. The criteria for default* mayinclude anyone* of the following: on nonaccrual status, modifications to borrowers experiencing financial difficulty, or payment delinquency of90 days or more.

The Company has adopted ASU2022-02, “Financial Instruments – Troubled Debt Restructurings and Vintage Disclosures”. The Company has elected to apply the guidance prospectively and the practical expedient to exclude the accrued interest receivable balance from the disclosed amortized cost basis of loan modifications to debtors experiencing financial difficulty, consistent with our ACL approach discussed further below in this footnote.

Under this guidance on loan modifications made to borrowers experiencing financial difficulty, when a loan held for investment is modified and is considered to be a continuation of the original loan, the Company uses the post-modification contractual rate to derive the effective interest rate when using a discounted cash flow method to determine the allowance for credit loss.

The amendments in this guidance require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan.

F-10

Unfunded Loan Commitments.Unfunded loan commitments are generally related to providing credit facilities to clients of the Bank and arenot actively traded financial instruments. These unfunded commitments are disclosed as off-balance sheet financial instruments in Note13 in the Notes to Consolidated Financial Statements.

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

Letter of Credit Fees. Issuance and commitment fees received for the issuance of commercial or standby letters of credit are recognized over the term of the instruments.* *

Other Real Estate Owned (“OREO”). Real estate acquired in the settlement of loans is initially recorded at fair value, less estimated costs to sell. Specific valuation allowances on other real estate owned are recorded through charges to operations to recognize declines in fair value subsequent to foreclosure. Gain or loss on sale is recognized when certain criteria relating to the buyer’s initial and continuing investment in the property are met.

Investments in Affordable Housing Partnerships and Other Tax Credit Investments. The Company is a limited partner in limited partnerships that invest in low-income housing projects that are intended to qualify for Federal and/or State income tax credits and limited partnerships that invests in alternative energy systems that are intended to qualify for alternative energy tax credits. As further discussed in Note5 to the Consolidated Financial Statements, the partnership interests are accounted for utilizing the equity method of accounting. As of* December 31, 2025*, twelve of the limited partnerships in which the Company has an equity interest were determined to be variable interest entities for which the Company is the primary beneficiary. The Company therefore consolidated the financial statements of thesetwelve limited partnerships into the Consolidated Financial Statements. The tax credits from these partnerships are recognized in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investments are reviewed for impairment on an annual basis or on an interim basis if an event occurred that would trigger potential impairment.

*Premises and Equipment.*Premises and equipment are carried at cost, less accumulated depreciation. Depreciation is computed on the straight-line method based on the following estimated useful lives of the assets:

Improvements are capitalized and amortized to occupancy expense based on the above table. Construction in process is carried at cost and includes land acquisition cost, architectural fees, general contractor fees, capitalized interest and other costs related directly to the construction of a property.

Goodwill and Other Intangible Assets. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in an acquisition. Goodwill and other intangible assets are assessed for impairment annually as of* December 31or whenever events or changes in circumstances indicate the carrying amount may**not* be recoverable. The Company performed its annual impairment test and determinedno impairment existed as of* December 31, 2025*, and2024.

Other intangible assets. Other intangible assets are mainly comprised of core deposit intangible ("CDI"), which represents estimated fair value of the economic benefit associated with acquired core deposit relationships, initially measured upon acquisition as the value of those deposits in excess of the cost of alternative funding sources. CDI is amortized over its estimated useful life to its residual value in proportion to the economic benefits consumed. If a pattern of consumption cannot be reliably determined, straight-line amortization is used. The Company assesses the recoverability of this intangible asset by determining whether the amortization of the premium balance over its remaining life can be recovered through the remaining deposit portfolio and amortizes core deposit premium over its estimated useful life.

Bank-Owned Life Insurance. We have purchased single premium life insurance policies (“bank-owned life insurance”) on certain officers. The Bank is the beneficiary under each policy. In the event of the death of a covered officer, we will receive the specified insurance benefit from the insurance carrier and pay a fixed dollar amount to the beneficiary designated by the officer. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due, if any, that are probable at settlement.

Stock-Based Compensation. The Company grants time-based RSUs, which include service conditions for vesting. Compensation cost for these time-based awards is based on the quoted market price of the Company’s common stock at the grant date. Compensation costs for time-based RSUs that will be settled in cash instead of shares are adjusted to fair value based on changes in the Company’s stock price up to the settlement date. In addition, the Company grants performance-based RSUs, which contain additional performance goals and market conditions that are required to be met in order for the awards to vest. Compensation expense for these performance-based RSUs is based on the grant-date fair value considers both performance and market conditions. Subsequently, the Company evaluates the probable outcome of the performance conditions quarterly and makes cumulative adjustments for current and prior periods in compensation expense in the period of change. Market conditions subsequent to the grant date haveno impact on the amount of compensation expense the Company will recognize over the life of the award. Compensation cost is amortized on a straight-line basis over the requisite service period for the entire award, which is generally the maximum vesting period of the award. Excess tax benefits and deficiencies on share-based payment awards are recognized within Income tax expense on the Consolidated Statement of Income. As stock-based compensation expense is estimated based on awards ultimately expected to vest, it is reduced by the expense related to awards expected to be forfeited. Forfeitures are estimated at the time of grant and are updated quarterly. If the estimated forfeitures are revised, a cumulative effect of changes in estimated forfeitures for the current and prior periods is recognized in compensation expense in the period of change. Refer to Note19 — Equity Incentive Plans on the Consolidated Financial Statements in this Form10-K for additional information.

F-11

Stock option compensation expense is calculated based on the fair value of the award at the grant date for those options expected to vest and is recognized as an expense over the vesting period of the grant using the straight-line method. The Company uses the Black-Scholes option pricing model to estimate the value of granted options. This model takes into account the option exercise price, the expected life, the current price of the underlying stock, the expected volatility of the Company’s stock, expected dividends on the stock and a risk-free interest rate. The Company estimates the expected volatility based on the Company’s historical stock prices for the period corresponding to the expected life of the stock options. Restricted stock units are valued at the closing price of the Company’s stock on the date of the grant.

Derivatives. The Company follows ASC Topic815 that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s Consolidated Balance Sheets at fair value. The accounting treatment of changes in fair value is dependent upon whether ornot a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined usingthird-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income/(loss) and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there isnot a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

Foreign Exchange Forwards and Foreign Currency Option Contracts. * We enter into foreign exchange forward contracts and foreign currency option contracts with correspondent banks to mitigate the risk of fluctuations in foreign currency exchange rates for foreign currency certificates of deposit, foreign exchange contracts or foreign currency option contracts entered into with our clients. These contracts arenot* designated as hedging instruments and are recorded at fair value in our Consolidated Balance Sheets. Changes in the fair value of these contracts as well as the related foreign currency certificates of deposit, foreign exchange contracts or foreign currency option contracts, are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities.

Income Taxes.The provision for income taxes is based on income reported for financial statement purposes, and differs from the amount of taxes currently payable, since certain income and expense items are reported for financial statement purposes in different periods than those for tax reporting purposes. The Company accounts for income taxes using the asset and liability approach, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is more likely thannot that some portion or all of the deferred tax assets willnot be realized.

Accounting Changes, Reclassifications and Restatements. Certain items in prior financial statements have been reclassified to conform to the current presentation. We adopted ASUNo. 2023-09, “Income Taxes (Topic740*): Improvements to Income Tax Disclosures*” for our annual financial statements in2025. See Note11 - Income Taxes.

*Comprehensive Income/(loss).*Comprehensive income/(loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income/(loss) generally includes net income/(loss), unrealized gains and losses on investments in securities available-for-sale, and cash flow hedges. Comprehensive income/(loss) and its components are reported and displayed in the Company’s Consolidated Statements of Operations and Comprehensive Income.

Net Income per Common Share. Earnings per share (“EPS”) is computed on a basic and diluted basis. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shares in the earnings of the Company. Potential dilution is excluded from computation of diluted per-share amounts when a net loss from operations exists.

Foreign Currency Translation. * *The Company considers the functional currency of its foreign operations to be the United States dollar. Accordingly, the Company remeasures monetary assets and liabilities at year-end exchange rates, while nonmonetary items are remeasured at historical rates. Income and expense accounts are remeasured at the average rates in effect during the year, except for depreciation, which is remeasured at historical rates. Foreign currency transaction gains and losses are recognized in income in the period of occurrence.

Statement of Cash Flows. Cash and cash equivalents include short-term highly liquid investments that generally have an original maturity ofthree months or less.

Segment Reporting. The Company operates as a single operating segment. Our Chief Executive Officer is our chief operating decision maker (“CODM”). The CODM evaluates financial performance and allocates resources based on consolidated net income which is consistent with the amounts reported in the Consolidated Statements of Income. The accounting policies of the operating segment are the same as those of our consolidated entity and described in the summary of significant accounting policies. The measure of segment assets is reported on the balance sheet as total assets.

The Company’s operations primarily consist of commercial banking services, servicing primarily the individuals, professionals, and small to medium-sized businesses in the local markets in which its branches are located. Its operations include the acceptance of checking, savings, and time deposits, and the making of commercial, real estate, and consumer loans. The Bank also offers trade financing, letters of credit, wire transfer, foreign currency spot and forward contracts, internet banking, investment services, and other customary banking services to its customers within the United States. Because the CODM reviews the business on a consolidated basis and the Company’s products and services are largely integrated, the Company doesnot report any disaggregated financial information for separate business lines.

The Company generates substantially all its revenues from banking services and doesnot have material operations outside the United States.

F-12

Recent Accounting Pronouncements Adopted in2025

In* December 2023,ASUNo.* 2023-09, “Income Taxes (Topic740): Improvements to Income Tax Disclosures” was issued. This ASU amends the disclosure requirements for income taxes, including the requirement for further disaggregation of the income tax rate reconciliation and income taxes paid disclosures. The amendments in this guidance are effective for annual periods beginning after* December 15, 2024.These amendments should be applied prospectively, with the option to apply retrospectively. The Company has adopted ASU2023*-09 with the required disclosures included in Note11.

Other Accounting Standards Pending Adoption

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

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

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

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

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

2. Cash, Cash Equivalents and Restricted Cash

The Company manages its cash and cash equivalents based upon the Company’s operating, investment, and financing activities. Cash and cash equivalents, for the purpose of reporting cash flows, consist of cash and due from banks, short-term investments, and interest-bearing deposits. Cash and due from banks include cash on hand, cash items in transit, cash due from the Federal Reserve Bank of San Francisco (“FRBSF”) and other financial institutions. Short-term investments and interest-bearing deposits include cash placed with other banks with original maturity ofthree months or less.

The Company had average excess balance with FRBSF of $1.14 billion and $1.05 billion for the years ended* December 31, 2025*, and2024, respectively. As of* December 31, 2025*, and2024, the Company had $12.1 million and $43.4 million, respectively, as cash margin that serves as collateral on deposit in a cash margin account for interest rate swaps. Of the balances held in the cash margin account $4.3 million and $8.6 million are restricted as of* December 31, 2025*, and2024, respectively. As of* December 31, 2025*, and2024, the Company held zero and $0.3 million, respectively, in a restricted escrow account with a major bank for its alternative energy investments.

F-13

3. Investment Securities

Investment Securities.The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of debt securities available-for-sale ("AFS") as of December 31, 2025, and* December 31,*2024:

The amortized cost and fair value of AFS securities as of* December 31, 2025*, by contractual maturities, are set forth in the table below. Actual maturities* maydiffer from contractual maturities because borrowers may*have the right to call or repay obligations with or without call or repayment penalties.

There wereno proceeds from the sale of investment securities for the years ended* December 31, 2025* and2023, and $33.7 million during the year ended* December 31, 2024*. Gross realized gain on sale of investment securities was $1.1 million for the year ended* December 31, 2024.*

Allowance for Credit Losses

The AFS securities that were in an unrealized loss position as of* December 31, 2025*, were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note1 Summary of Significant Accounting Policies - Allowance for Credit Losses on Available for Sale Securities to the Consolidated Financial Statements.

The Company concluded the unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. The issuers havenot, to the Company’s knowledge, established any cause for default on these securities. The Company expects to recover the amortized cost basis of its securities and hasno present intent to sell and willnot be required to sell AFS securities that have declined below their cost before their anticipated recovery. Accordingly, no allowance for credit losses was recorded as of* December 31, 2025*, and2024, against these securities, and there wasno provision for credit losses recognized for the years ended* December 31, 2025*,2024 and2023.

F-14

The 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*, the Company had a total of 159 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 138 mortgage-backed securities, ten U.S. government agencies securities, eight corporate debt securities, andthree collateralized mortgage obligations. In comparison, as of* December 31, 2024*, the Company had a total of 182 AFS securities in a gross unrealized loss position withno credit impairment, consisting primarily of 154 mortgage-backed securities,16 corporate debt securities, nine U.S. government agencies securities andthree collateralized mortgage obligations.

AFS securities having a carrying value of $22.8 million and $17.8 million as of* December 31, 2025*, and* December 31,*2024, respectively, were pledged to secure public deposits, and other borrowings.

Equity securities were $51.9 million and $34.4 million as of* December 31, 2025*, and2024, respectively. The Company recognized a net unrealized gain on equity securities of $7.4 million, a net unrealized loss on equity securities of $7.5 million and net unrealized gains on equity securities of $18.2 million for the years ended* December 31, 2025*,2024 and2023, respectively. `

F-15

4. Loans

Most of the Company’s business activities are with clients located in the high-density Asian-populated areas of Southern and Northern California; New York City, New York; Houston and Dallas, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has clients in Hong Kong. The Company hasno specific industry concentration, and generally its loans, when secured, are secured by real property or other collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, from refinancing by another lender, or through sale by the borrowers of the secured collateral.

The following table presents the composition of the Company’s loans as of* December 31, 2025*, and2024, were as follows:

The Company pledged real estate loans of $15.11 billion and $14.55 billion as of* December 31, 2025*, and2024, respectively, to the Federal Home Loan Bank of San Francisco under its blanket lien pledging program. The Company pledged commercial loans of $1.42 billion, and $474.8 million as of* December 31, 2025*, and2024, respectively, to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program.

Loans serviced for others as of* December 31, 2025*, totaled $166.2 million and were comprised of $54.3 million of residential mortgages, $52.7 million of commercial loans, $49.0 million of commercial real estate loans, and $10.2 million of construction loans. As of* December 31,*2024, loans serviced for others, totaled $172.2 million and were comprised of $63.3 million of residential mortgages, $44.5 million of commercial real estate loans, $41.8 million of commercial loans, and $22.6 million of construction loans.

The Company has entered into transactions with its directors, executive officers, or principal holders of its equity securities, or the associates of such persons (“related parties”). All loans to related parties were current as of* December 31, 2025*, and2024. An analysis of the activity with respect to loans to related parties for the years indicated is as follows:

F-16

Non-accrual Loans

As of* December 31, 2025*, recorded investment in non-accrual loans totaled $112.4 million compared to $169.2 million as of* December 31,2024. The average balance of non-accrual loans was $164.9 million and $130.1 million as of December 31, 2025*, and2024, respectively. Interest recognized on non-accrual loans totaled $5 thousand, $197 thousand and $321 thousand for the years ended* December 31, 2025*,2024 and2023. 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*, and 11.7% as of* December 31,*2024.

As of* December 31, 2025*, $94.9 million of the $112.4 million of non-accrual loans were secured by real estate compared to $115.2 million of the $169.2 million of non-accrual loans that were secured by real estate as of* December 31,2024. As of December 31, 2025*, and2024, collateral-dependent non-accrual loans were secured by real estate and personal property. 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. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information, less cost to sell. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly.

The following tables present the average balance and interest income recognized on non-accrual loans for the periods indicated:

The following table presents non-accrual loans and the related allowance as of* December 31, 2025*, and2024:

F-17

The following table is a summary of non-accrual loans as of* December 31, 2025*,2024, and2023 and the related net interest foregone for the years then ended:

The following tables present the aging of the loan portfolio by type as of* December 31, 2025*, and* December 31,*2024:

F-18

The Company has adopted ASU2022-02, “Financial Instruments – Troubled Debt Restructurings and Vintage Disclosures”. The Company has elected to apply the guidance prospectively and the practical expedient to exclude the accrued interest receivable balance from the disclosed amortized cost basis of loan modifications to debtors experiencing financial difficulty, consistent with our Allowance for Credit Losses ("ACL") approach discussed further below in this footnote.

Under this guidance on loan modifications made to borrowers experiencing financial difficulty, when a loan held for investment is modified and is considered to be a continuation of the original loan, the Company uses the post-modification contractual rate to derive the effective interest rate when using a discounted cash flow method to determine the allowance for credit loss.

The amendments in this guidance require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan.

The Company establishes a specific reserve for individually evaluated loans that donot share similar risk characteristics with the loans included in the collective reserve. These individually evaluated loans are removed from the pooling approach for the quantitative baseline, and include non-accrual loans, loan modifications made to borrowers experiencing financial difficulty, and other loans as deemed appropriate by management. The Company applies the loan refinancing and restructuring guidance provided in ASU2022-02 to determine whether a modification made to a borrower results in a new loan or a continuation of an existing loan.

If economic conditions or other factors worsen relative to the assumptions the Company utilized, the expected loan losses will increase accordingly in future periods.

Modifications of the loan terms in thetwelve months ended* December 31, 2025*,2024, and2023 were in the form of payment deferrals, term extensions, and interest rate reductions, or a combination thereof.

The following table presents the amortized cost of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted and the financial effects of the modifications for thetwelve months ended* December 31, 2025*,2024, and2023 by loan class and modification type:

F-19

The Company considers a loan to be in payment default once it is 60 to 90 days contractually past due. A modified loan* maybecome delinquent and mayresult in a payment default (generally 90 days past due) subsequent to modification. There wereno loans that received a modification for thetwelve* months ended* December 31, 2025,*2024, and2023 that subsequently defaulted.

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of loans that were modified during thetwelve months ended* December 31, 2025*, and2024.

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

As of* December 31, 2025*, there wereno commitments to lend additional funds to borrowers experiencing financial difficulty and whose loans were modified.

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

F-20

The following table summarizes the Company’s loan held for investment as of* December 31, 2025*, and2024, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year column.

F-21

Revolving loans that are converted to term loans presented in the table above are excluded from the term loans by vintage year columns.

F-22

The following table details activity in the allowance for loan losses by portfolio segment for the years ended* December 31, 2025*, and2024. Allocation of a portion of the allowance toone category of loans doesnot preclude its availability to absorb losses in other categories.

Residential mortgage loans in process of formal foreclosure proceedings were $8.8 million as of* December 31, 2025*, and $6.7 thousand as of* December 31,*2024.

**5. **Investments in Affordable Housing and Alternative Energy Partnerships

The Company holds ownership interests in a number of limited partnerships that were formed to develop and operate housing for lower-income tenants throughout the United States and alternative energy partnerships that qualify for energy tax credits. The Company evaluates its interests in these partnerships to determine whether they meet the definition of a Variable Interest Entity (“VIE”) and whether the Company is required to consolidate these entities. A VIE is consolidated by its primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) a variable interest that could potentially be significant to the VIE. To determine whether ornot a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE. While the Company has determined that its interests in these entities meet the definition of a variable interest in accordance with ASC810, the Company has determined that the Company isnot the primary beneficiary in all buttwelve of these partnerships because the Company doesnot have the power to direct the activities that most significantly impact the economic performance of the entities including operational and credit risk management activities. As the Company isnot the primary beneficiary, the Company didnot consolidate the entities.

The investment in these entities approximates the maximum exposure to loss as a result of the Company’s involvement with these unconsolidated entities. The balance of the Company’s investments in these entities was $287.2 million and $289.6 million as of* December 31, 2025*, and2024, respectively.

The Company’s investments in these partnerships, net, are presented in the table below:

As of* December 31, 2025*, twelve of the limited partnerships in which the Company has an equity interest were determined to be variable interest entities for which the Company is the primary beneficiary. The consolidation of these limited partnerships in the Company’s Consolidated Financial Statements increased total assets and liabilities by $26.9 million as of* December 31, 2025*, and by $26.0 million as of* December 31,2024. Recourse in other borrowings for affordable housing limited partnerships is limited to the assets of the limited partnerships. Investments in alternative energy partnerships were $8.1 million and $12.0 million as of December 31, 2025*, and2024, respectively. As of* December 31, 2025*, the Company didnot have any remaining balance in escrow related to alternative energy partnerships and $0.3 million, as of* December 31, 2024,*of this investment was in an escrow account with a major bank. Unfunded commitments for affordable housing limited partnerships was recorded under other liabilities.

F-23

As of* December 31, 2025*, the Company’s unfunded commitments related to investments in qualified affordable housing partnerships, net, are estimated to be paid as follows:

Each of the partnerships must meet regulatory requirements for affordable housing, including long-term minimum compliance periods (such as a15-year minimum compliance period for certain affordable housing tax credits) to fully utilize the tax credits. If the partnerships cease to qualify during the compliance period, the credits* maybe denied for any period in which the projects arenot* in compliance and a portion of the credits previously taken is subject to recapture with interest. The remaining tax credits to be utilized over a multiple-year period are $254.2 million for Federal and $2.6 million for State as of* December 31, 2025*. The possible inability to realize these tax credits and other returns from our investments in these partnerships can have a negative impact on our financial results. The risk ofnot being able to realize the tax credits and other returns depends on many factors, including changes in the applicable provisions of the tax code, the ability of the projects to be completed and properly managed and other factors that are outside of our control. In2025 and2024, non-interest expense included $7.0 million and $6.1 million in impairment charges for investments in low-income housing partnerships.

The following table summarizes the Company’s usage of affordable housing and other tax credits including energy tax credits:

**6. **Premises and Equipment

Premises and equipment consisted of the following as of* December 31, 2025*, and* December 31,*2024:

The amount of depreciation included in operating expense was $5.9 million, $6.1 million and $7.1 million for the years ended* December 31, 2025*,2024 and2023, respectively.

7. Goodwill and Other Intangible Assets

Goodwill. Total goodwill was $375.7 million as of* December 31, 2025*, and2024. Additional information pertaining to the Company’s accounting policy for goodwill is summarized in Note1 — Summary of Significant Accounting Policies — Goodwill and Other Intangible Assets. The Company completed its annual goodwill impairment testing and additionally reviewed the macroeconomic conditions on its business performance and market capitalization and concluded that goodwill wasnot impaired as of* December 31, 2025*, and2024.

F-24

Core Deposit Intangibles. * *

The following table presents the gross carrying amount and accumulated amortization of core deposits intangible assets as of* December 31, 2025*, and2024:

There wasno impairment write-down on core deposit intangibles during the year of* December 31, 2025*. There were $0.1 million and $0.3 million in impairment write-down on core deposit intangibles during the year of* December 31,*2024 and2023, respectively, included in amortization of core deposit intangibles on the Consolidated Statements of Operations and Comprehensive Income.

The Company amortizes the core deposit intangibles based on the projected useful lives of the related deposits. The amortization expense related to the core deposit intangible assets were $0.9 million, $1.1 million and $1.3 million for the years ended* December 31, 2025*,2024 and2023, respectively.

8. Deposits

The following table displays deposit balances as of* December 31, 2025*, and* December 31,*2024:

Time deposits outstanding as of* December 31, 2025*, mature as follows.

Accrued interest payable on client deposits was $26.2 million, $27.9 million, and $28.6 million as of* December 31, 2025*,2024 and2023, respectively. The following table summarizes the interest expense on deposits by account type for the years ended* December 31, 2025*,2024, and2023:

F-25

The aggregate amount of domestic time deposits in denominations that meet or exceed the current FDIC insurance limit of*$250* thousand was $5.55 billion and $5.60 billion as of* December 31, 2025*, and2024, respectively. Foreign offices’ time deposits of $192.1 million and $153.1 million as of* December 31, 2025*, and2024, respectively, were in denominations of greater than*$250* thousand.

9. Borrowed Funds

There wereno outstanding securities sold or entered into under agreements to repurchase at* December 31, 2025*,2024 and2023.

Securities sold under agreements to repurchase, if any, are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold.

As of* December 31, 2025*, and2024, there wereno over-night borrowings from the FHLB. There wereno advances from the FHLB as of* December 31, 2025*, and $60.0 million at a weighted average rate of 5.08% as of* December 31,2024. Our unused borrowing capacity from the Federal Home Loan Bank as of December 31, 2025*, was $7.89 billion and unpledged securities at* December 31, 2025*, was $1.64 billion.

Other Liabilities. * On November 23, 2004,the Company entered into an agreement with Mr. Dunson K. Cheng, pursuant to which he agreed to defer any bonus amounts in excess of $225 thousand for the year ended December 31, 2005,until the later of January 1of thefirst* year following his separation from service from the Company or thefirst day of theseventh month following his separation from service from the Company. Accordingly, an amount equal to $610 thousand was deferred in2004 and was accrued in other liabilities in the Consolidated Balance Sheets. The Company agreed to accrue interest on the deferred portion of the bonus at 7.0% per annum compounded quarterly. The deferred amount will be increased each quarter by the amount of interest computed for that quarter. On* November 23, 2014,the interest rate was reset to 5.06% based on 275 basis points above the interest rate on theten-year Treasury Note on that date. On March 13, 2014,the Compensation Committee of the Company awarded Mr. Cheng a cash bonus in the amount of $300 thousand for the quarter ended December 31, 2013and provided as part of the award that payment of the bonus would be deferred until the later of January 1of thefirst* year following his separation from service from the Company or thefirst day of theseventh month following his separation from service from the Company. The Company accrues interest on the deferred bonus at 5.02% per annum compounded quarterly. On* March 28, 2019,*the interest rate was reset to 5.72% based on 350 basis points above the interest rate on thefive-year Treasury Note on that date.

The balance of deferred bonuses was $2.7 million and $2.6 million at* December 31, 2025*, and2024, respectively. Accrued interest of deferred bonuses were $136 thousand during2025, $129 thousand during2024, and $122 thousand during2023.

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

As of* December 31, 2025*, and2024, Junior Subordinated Notes totaled $119.1 million, with a weighted average interest rate of 6.76% and 7.75%, respectively. The Junior Subordinated Notes have a stated maturity term of 30 years. Interest expense on the Junior Subordinated Notes was $8.0 million, $8.1 million, and $6.5 million for years ended* December 31, 2025*,2024 and2023, respectively. Included in the2023 interest expense is the amortization of the gain on cash flow interest rate swaps, early terminated in2022.

10. Capital Resources

Total equity was $2.93 billion as of* December 31, 2025*, an increase of $79.7 million, or 2.8%, from $2.85 billion at* December 31,*2024, primarily due to net income of $315.1 million, other comprehensive income of $31.2 million, stock based compensation of $6.6 million, proceeds from dividend reinvestment of $2.6 million, and stock issued to directors of $1.0 million, offset by purchases of treasury stock of $180.3 million, common stock cash dividends of $93.8 million, and shares withheld related to net share settlement of RSU’s of $2.8 million. The Company paid cash dividends of $1.36 per common share in2025,2024, and in2023.

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. The previous $125.0 million stock 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. Under the new stock repurchase program, through December 31, 2025*, the Company repurchased 2,973,982 common shares at an average cost of $46.24 per share, for a total of $137.5 million under the current stock repurchase program.

Thefive special purpose trusts established for the purpose of issuing the Capital Securities are considered variable interest entities. Because the Bancorp isnot the primary beneficiary of the trusts, the financial statements of the trusts arenot included in the Consolidated Financial Statements of the Company. The Junior Subordinated Notes, all of which were issued before* May 19, 2010,are currently included in the Tier2* capital of the Bancorp for regulatory capital purposes. Under the Dodd-Frank Act, trust preferred securities issued before* May 19, 2010,by bank holding companies with assets of less than$15.0* billion as of* December 31, 2009,continue to qualify for Tier1* capital treatment. As of* December 31, 2025*, and2024, the Company’s assets exceeded the*$15.0* billion threshold and, as a result, the Junior Subordinated Notesno longer qualify as Tier1 capital for regulatory reporting purposes.

F-26

The table below summarizes the outstanding Junior Subordinated Notes issued by the Company to each trust as of* December 31, 2025*, and2024:

F-27

11. Income Taxes

For the years ended* December 31, 2025*,2024, and2023, the current and deferred amounts of the income tax expense are summarized as follows:

Temporary differences between the amounts reported in the financial statements and the tax basis of assets and liabilities give rise to deferred taxes. Net deferred tax assets as of* December 31, 2025*, and2024 are included in other assets in the accompanying Consolidated Balance Sheets and are as follows:

Amounts for the current year are based upon estimates and assumptions and could vary from amounts shown on the tax returns as filed.

At* December 31, 2025*, the Company has California NOL carryovers of $33.5 million for which a California deferred tax asset of $3.2 million has been recorded reflecting the expected benefit of these California NOL carryovers. The annual IRC Section382 limitation is*$7.3* million per year. Ifnot utilized, a portion of the Company’s state NOL’s will begin to expire in2030. At* December 31, 2025*, the Company’s federal tax credit carryovers total $11.7 million. Ifnot utilized, the federal tax credit carryovers will begin to expire in2028. The AMT tax credit carryovers can be carried forward indefinitely.

In assessing the realization of deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely thannot the Company will realize all benefits related to these deductible temporary differences.

F-28

The Company had current income tax receivable of $13.3 million as of* December 31, 2025*, and $37.0 million as of* December 31,*2024. The Company had $2.9 million of tax credits generated in2025 that will be carried forward to2026. Current income tax receivable is included in other assets in the accompanying Consolidated Balance Sheets.

The Company’s tax returns are open for audits by the Internal Revenue Service back to 2022 and by the California Franchise Tax Board back to 2021. It is reasonably possible that unrecognized tax benefits could change significantly over the nexttwelve months. The Company doesnot expect that any such changes would have a material impact on its annual effective tax rate.

Income tax expense from continuing operations results in effective tax rates that differ from the statutory federal income tax rate for the years indicated as follows:

The table below shows income tax paid, net of refunds received, by jurisdiction for the years indicated as follows:

F-29

12. Stockholders’** Equity and Earnings per Share**

As a bank holding company, the Bancorp’s ability to pay dividends will depend upon the dividends it receives from the Bank and on the income it* maygenerate from any other activities in which it may*engage, either directly or through other subsidiaries.

Under California banking law, the Bank* may**not,* without regulatory approval, pay a cash dividend that exceeds the lesser of the Bank’s retained earnings or its net income for the lastthree fiscal years, less any cash distributions made during that period. Under this regulation, the amount of retained earnings available for cash dividends to the Company immediately after* December 31, 2025*, is restricted to approximately $376.9 million. The amount of retained earnings available for cash dividends is restricted to approximately $433.6 million for* December 31,*2024.

Activity in accumulated other comprehensive income, net of tax, and reclassification out of accumulated other comprehensive income for the years ended* December 31, 2025*, and2024 were as follows:

The Board of Directors of the Bancorp is authorized to issue preferred stock inone or more series and to fix the voting powers, designations, preferences or other rights of the shares of each such class or series and the qualifications, limitations, and restrictions thereon. Any preferred stock issued by the Bancorp* mayrank prior to the Bancorp common stock as to dividend rights, liquidation preferences, or both, mayhave full or limited voting rights, and may*be convertible into shares of the Bancorp common stock. There areno shares of preferred stock currently issued and outstanding.

F-30

The following is the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the years as indicated:

13. Commitments and Contingencies

Legal Proceedings. * The Company is involved in various claims and legal proceedings that arise in the course of conducting the Company’s business. The outcome of such claims and legal proceedings are inherently difficult to predict. Management, after consultation with legal counsel and based upon its assessment of information currently available to the Company, believes that any liability resulting from the resolution of any claims and proceedings currently pending against the Company willnot* have a material effect upon the Company’s consolidated financial condition, results of operations, or liquidity taken as a whole.

In accordance with ASC450, “Contingencies,” the Company accrues reserves for outstanding lawsuits, claims and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel, and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount* may**not* represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s exposure and ultimate losses* may*be higher, and possibly significantly more than the amounts accrued.

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

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company doesnot require collateral or other security to support financial instruments with credit risk.

Financial instruments for which contract amounts represent the amount of credit risk include the following:

Commitments to extend credit are agreements to lend to a client provided there isno violation of any condition established in the commitment agreement. These commitments generally have fixed expiration dates and are expected to expire without being drawn upon. The total commitment amounts donot necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the borrowers.

As of* December 31, 2025*, the Company doesnot have fixed-rate or variable-rate commitments with characteristics similar to options, which provide the holder, for a premium paid at inception to the Company, the benefits of favorable movements in the price of an underlying asset or index with limited orno exposure to losses from unfavorable price movements.

As of* December 31, 2025*, commitments to extend credit of $3.81 billion include commitments to fund fixed rate loans of $48.4 million and adjustable-rate loans of $3.76 billion. As of* December 31,*2024, commitments to extend credit of $3.47 billion included commitments to fund fixed rate loans of $63.4 million and adjustable-rate loans of $3.41 billion.

Commercial letters of credit and bill of lading guarantees are issued to facilitate domestic and foreign trade transactions while standby letters of credit are issued to make payments on behalf of clients if certain specified future events occur. The credit risk involved in issuing letters of credit and bill of lading guarantees is essentially the same as that involved in making loans to clients.

F-31

14. Leases

The Company enters into operating leases in the normal course of business primarily for branch offices, office spaces and certain equipment. The Company* may*seek to include options to extend or terminate a lease when it is reasonably certain that the Company will exercise those options.

ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. The Company uses its incremental borrowing rate to determine the present value of its lease liabilities. The Company has elected tonot separate lease and non-lease components. The Company has also electednot to recognize a ROU asset and lease liability for leases with original lease term of12 months or less (short-term leases). The Company doesnot possess any leases that have variable lease payments or residual value guarantees as of* December 31, 2025*, and2024.

The following table represents the operating lease amounts reported on the Consolidated Balance Sheets and other supplemental information as of* December 31, 2025*, and* December 31,*2024:

Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $13.5 million, $13.4 million and $12.8 million for the years ended* December 31, 2025*,2024 and2023, respectively, and includes short-term leases that were immaterial.

The following table presents a maturity analysis of the Company’s operating lease liabilities as of* December 31, 2025*:

15. Financial Derivatives

The Company doesnot speculate on the future direction of interest rates. As part of the Company’s asset and liability management, however, the Company enters into financial derivatives to seek to mitigate exposure to interest rate risks related to its interest-earning assets and interest-bearing liabilities. The Company believes that these transactions, when properly structured and managed,* mayprovide a hedge against inherent interest rate risk in our assets or liabilities and against risk in specific transactions. In such instances, the Company mayprotect its position through the purchase or sale of interest rate future contracts for a specific cash or interest rate risk position. Other hedging transactions may*be implemented using interest rate swaps, interest rate caps, floors, financial futures, forward rate agreements, and options on futures or bonds. Prior to considering any hedging activities, the Company seeks to analyze the costs and benefits of the hedge in comparison to other viable alternative strategies. All hedges will require an assessment of basis risk and must be approved by the Bancorp or the Bank’s Investment Committee.

F-32

The Company follows ASC Topic815 that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s Consolidated Balance Sheets and measurement of those financial derivatives at fair value. The accounting treatment of changes in fair value is dependent upon whether ornot a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined usingthird-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there isnot a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

The Company offers various interest rate derivative contracts to its clients. When derivative transactions are executed with its clients, the derivative contracts are offset by paired trades withthird-party financial institutions including with central counterparties (“CCP”). Certain derivative contracts entered with CCPs are settled-to-market daily to the extent the CCP’s rulebooks legally characterize the variation margin as settlement. Derivative contracts are intended to allow borrowers to lock in attractive intermediate and long-term fixed rate financing whilenot increasing the interest rate risk to the Company. These transactions are generallynot linked to specific Company assets or liabilities on the Consolidated Balance Sheets or to forecasted transactions in a hedging relationship and, therefore, are economic hedges. The contracts are marked to market at each reporting period. The changes in fair values of the derivative contracts traded withthird-party financial institutions are expected to be largely comparable to the changes in fair values of the derivative transactions executed with clients throughout the terms of these contracts, except for the credit valuation adjustment component. The Company records credit valuation adjustments on derivatives to properly reflect the variances of credit worthiness between the Company and the counterparties, considering the effects of enforceable master netting agreements and collateral arrangements. As of* December 31, 2025*, and2024, the Company had outstanding interest rate derivative contracts with certain clients andthird-party financial institutions with a notional amount of $1.02 billion and $680.5 million, respectively, with a fair value of $24.0 million and $32.7 million, respectively, for both clients andthird-party financial institutions. As of* December 31, 2025*, and2024, for borrower swap transactions, there wereno notional amount of interest rate swaps cleared through the CCP.

In* May 2014,Bancorp entered into interest rate swap contracts in the notional amount of $119.1 million for a period often years. The objective of these interest rate swap contracts, which were designated as hedging instruments in cash flow hedges, was to hedge the quarterly interest payments on Bancorp’s $119.1 million of Junior Subordinated Debentures that had been issued tofive* trusts, throughout theten-year period beginning in* June 2014and ending in June 2024,from the risk of variability of these payments resulting from changes in thethree*-month LIBOR interest rate. The Company early terminated these cash flow derivative swaps in2022 and realized a gain of $4.0 million for the year ended* December 31, 2022,and is recognizing the amount as a reduction of long-term debt interest expense over the remaining life of the swaps on a straight-line basis ending in June 2024.*

As of* December 31, 2025*, and2024, the Bank’s outstanding fair value interest rate swap contracts matched to individual fixed-rate commercial real estate loans had a notional amount of $47.6 million and $81.3 million with a fair value of $1.6 million and $3.3 million, respectively, and for various terms from three toten years. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying commercial real estate loans due to changes in interest rates. The swap contracts are structured so that the notional amounts reduce over time to match the contractual amortization of the underlying loan and allow prepayments with the same pre-payment penalty amounts as the related loan. As of* December 31, 2025*, and2024, the ineffective portion of these interest rate swaps wasnot significant.

The Company has designated as a partial-term hedging election $577.6 million and $793.80 million notional with a fair value loss of $4.0 million and $321 thousand as last-of-layer hedge on pools of loans with a notational value of $882.1 million and $1.32 billion as of* December 31, 2025*, and2024, respectively. The loans arenot expected to be affected by prepayment, defaults, or other factors affecting the timing and amount of cash flows under the last-of-layer method. The Company has entered into these pay-fixed and receive1-Month Term SOFR interest rate swaps to convert the last-of-layer $577.6 million portion of a $882.1 million fixed rate loan pools in order to reduce the Company’s exposure to higher interest rates for the last-of-layer tranches. As of* December 31, 2025*, and2024, the last-of-layer loan tranche had a net fair value basis adjustment of $5.0 million and $1.2 million, respectively. The interest rate swap converts this last-of-layer tranche into a floating rate instrument. The Company’s risk management objective with respect to this last-of-layer interest rate swap is to reduce interest rate exposure as to the last-of-layer tranche.

Interest rate swap contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have a strong credit profile and be approved by the Company’s Board of Directors. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure* may*be reduced by the amount of collateral pledged by the counterparty. Bancorp’s interest rate swaps have been assigned by the counterparties to a derivative clearing organization and daily margin is indirectly maintained with the derivative clearing organization.

The notional amount and net unrealized loss of the Company’s fair value hedge derivative financial instruments as of* December 31, 2025*, and* December 31,*2024, were as follows:

F-33

(1) the amount is included in other non-interest income.

(2) the amount of periodic net settlement of interest rate swaps was included in interest income.

Included in the total notional amount of $625.2 million and $875.1 million of the fair value hedge contracts entered into with financial counterparties as of* December 31, 2025*, and2024, was a notional amount of $571.2 million and $572.8 million of interest rate swaps that cleared through the CCP, respectively. Applying variation margin payments as settlement to CCP cleared derivative transactions resulted in a reduction in derivative asset fair values of $3.4 million and $158 thousand as of* December 31, 2025*, and2024, respectively.

The Company enters into foreign exchange forward contracts with various counterparties to mitigate the risk of fluctuations in foreign currency exchange rates for foreign exchange certificates of deposit or foreign exchange contracts entered into with our clients. These contracts arenot designated as hedging instruments and are recorded at fair value in our Consolidated Balance Sheets. Changes in the fair value of these contracts as well as the related foreign exchange certificates of deposit and foreign exchange contracts are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded inother assets and gross negative fair values are recorded inother liabilities.

The notional amount and fair value of the Company’s derivative financial instrumentsnot designated as hedging instruments as of* December 31, 2025*, and* December 31,*2024, were as follows:

16. Fair Value Measurements and Fair Value of Financial Instruments

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

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

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

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

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

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

F-34

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

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

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of* December 31, 2025*, and at* December 31,*2024:

F-35

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

Certain assets or liabilities are required to be measured at estimated fair value on a nonrecurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower-of-cost-or-fair value or other impairment write-downs of individual assets. In determining the estimated fair values during the period, the Company determined that substantially all the changes in estimated fair value were due to declines in market conditions versus instrument specific credit risk. For the periods ended* December 31, 2025*, and* December 31,*2024, there wereno material adjustments to fair value for the Company’s assets and liabilities measured at fair value on a nonrecurring basis in accordance with GAAP.

During thesecond quarter of2024, the Company entered into a restructuring support agreement and received equity securities in a private company, a Level3 measurement. The fair value of the Company’s Level3 equity securities were measured using the private company’s projected earnings plus cash on hand. The primary inputs and assumptions used in the fair value measurement was derived from the issuer’s projected earnings and collateral, which included cash on hand, the financial standing of the issuer, the business and financial plan of the issuer, among other factors. Significant increases or decreases in any of the inputs or assumptions could result in a significant increase or decrease in the fair value measurement.

For financial assets measured at fair value on a nonrecurring basis that were still reflected in the Consolidated Balance Sheets as of* December 31, 2025*, and2024, the following tables set forth the level of valuation assumptions used to determine each adjustment, the carrying value of the related individual assets at* December 31, 2025*, and* December 31,*2024, and the total losses for the periods indicated:

(1) Other real estate owned balance of $30.3 million in the Consolidated Balance Sheets is net of estimated disposal costs.

(1) Other real estate owned balance of $23.4 million in the Consolidated Balance Sheets is net of estimated disposal costs.

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

The fair value of individually evaluated loans is calculated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company doesnot record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent individually evaluated loans are recorded based on the current appraised value of the collateral, a Level2 measurement, or management’s judgment and estimation of value using discounted future cash flows or old appraisals which are then adjusted based on recent market trends, a Level3 measurement.

F-36

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

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

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

The following tables sets forth the carrying amounts and notional amounts and estimated fair value of financial instruments as of* December 31, 2025*, and* December 31, 2024*:

F-37

The following tables set forth the level in the fair value hierarchy for the estimated fair values of financial instruments as of* December 31, 2025*, and* December 31,*2024, excluding financial instruments recorded at fair value on a recurring basis already presented in other tables in this note:

17. Revenue from Contracts with Clients

The Company’s revenue from contracts with clients consists primarily of service charges and fees related to deposit accounts and wealth management fees.

The following is a summary of revenue from contracts with clients that are in-scope andnot in-scope under ASC606:

(1) Other service fees comprise of fees related to letters of credit, wire fees, fees on foreign exchange transactions and other immaterial individual revenue streams.

(2) These amounts primarily represent revenue from contracts with clients that are out of the scope of ASC Topic 606 and primarily represent revenue from interest rate swap fees, unrealized gains and losses on equity securities and other miscellaneous income.

F-38

The major revenue streams by fee type that are within the scope of ASC606 presented in the above tables are described in additional detail below:

Fees and Services Charges on Deposit Accounts

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

Wealth Management Fees

The Company employs financial consultants to provide investment planning services for clients including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The fees the Company earns are variable and are generally received monthly. The Company recognizes revenue for the services performed at quarter end based on actual transaction details received from the broker dealer the Company engages.

Practical Expedients and Exemptions

The Company applies the practical expedient in ASC606-10-50-14 and doesnot disclose the value of unsatisfied performance obligations as the Company’s contracts with clients generally have a term that is less thanone year, are open-ended with a cancellation period that is less thanone year or allow the Company to recognize revenue in the amount to which the Company has the right to invoice.

In addition, given the short-term nature of the Company’s contracts, the Company also applies the practical expedient in ASC606-10-32-18 and doesnot adjust the consideration from clients for the effects of a significant financing component, if at contract inception, the period between when the entity transfers the goods or services and when the client pays for that good or service isone year or less.

18. Employee Benefit Plans

Employee Stock Ownership Plan.Under the Company’s Amended and Restated Cathay Bank Employee Stock Ownership Plan (“ESOP”), the Company can make annual contributions to a trust in the form of either cash or common stock of the Bancorp for the benefit of eligible employees. Employees are eligible to participate in the ESOP after completingtwo years of service for salaried full-time employees or1,000 hours for each oftwo consecutive years for salaried part-time employees. The amount of the annual contribution is discretionary except that it must be sufficient to enable the trust to meet its current obligations. The Company also pays for the administration of this plan and of the trust. The Company hasnot made contributions to the trust since2004 and doesnot expect to make any contributions in the future. Effective* June 17, 2004,the ESOP was amended to provide the participants the election either to reinvest the dividends on the Company stock allocated to their accounts or to have these dividends distributed to the participant. The ESOP trust purchased 15,898 shares in2025*,21,218 shares in2024, and 16,555 shares in2023, of the Bancorp’s common stock at an aggregate cost of $742 thousand in2025, $867 thousand in2024, and $613 thousand in2023. The distribution of benefits to participants totaled 24,598 shares in2025,25,697 shares in2024, and 33,554 shares in2023. As of* December 31, 2025*, the ESOP owned 614,028 shares, or 0.91%, of the Company’s outstanding common stock.

401(k) Plan. * In1997,* the Board approved the Company’s401(k) Profit Sharing Plan, which began on* March**1,* 1997. Salaried employees who have completedone month of service and have attained the age of21 are eligible to participate. Enrollment dates are on thefirst of each month. Participants* maycontribute up to 75% of their eligible compensation for the year butnot* to exceed the dollar limit set by the Internal Revenue Code. Participants* maychange their contribution election on the enrollment dates. Effective October 1, 2022,the vesting schedule for the matching contribution is 0% for less thanthree* years of service and 100% afterthree years of service. Effective on* June 1, 2018,the Company matches 100% on thefirst* 5.0% of eligible compensation contributed per pay period by the participant, on thefirst day of the following month after30 days of service. The Company’s contribution amounted to $4.9 million in2025, $4.3 million in2024, and $4.5 million in2023. The Plan allows participants to withdraw all or part of their vested amount in the Plan due to certain financial hardship as set forth in the Internal Revenue Code and Treasury Regulations. Participants* may*also borrow up to 50% of the vested amount, with a maximum of $50 thousand. The minimum loan amount is $1 thousand.

Bank-Owned Life Insurance.As of December 31, 2025, and2024, cash surrender value of bank-owned life insurance was $53.2 million and $52.1 million, respectively. The Bank is the beneficiary under the policy. In the event of the death of a covered officer, we will receive the specified insurance benefit from the insurance carrier and pay a fixed dollar amount to the beneficiary designated by the officer.

F-39

19. Equity Incentive Plans

Pursuant to the Company’s2005 Incentive Plan, as amended and restated in* May 2025 (the"2005* Incentive Plan"), the Company* may*grant incentive stock options (employees only), non-statutory stock options, common stock awards, restricted stock, RSUs, stock appreciation rights and cash awards to non-employee directors and eligible employees.

As of* December 31, 2025*,2,770,049 shares were available under the2005 Incentive Plan for future grants.

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

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

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

The following table presents RSU activity for2025,2024, and2023:

The compensation expense recorded for RSUs was $6.6 million in2025, $6.0 million in2024, and $7.0 million in2023. Unrecognized stock-based compensation expense related to RSUs was $9.6 million and $9.6 million as of* December 31, 2025*, and2024, respectively. As of* December 31, 2025*, these costs are expected to be recognized over the next 1.8 years.

F-40

20. Condensed Financial Information of Cathay General Bancorp

The condensed financial information of the Bancorp as of* December 31, 2025*, and* December 31,2024, and for the years ended December 31, 2025*,2024 and2023 is as follows:

Balance Sheets

Statements of Operations

F-41

Statements of Cash Flows

21. Dividend Reinvestment Plan

The Company has a Dividend Reinvestment Plan which allows for participants’ reinvestment of cash dividends and certain optional additional investments in the Bancorp’s common stock. Shares issued under the plan and the consideration received were 55,563 shares for $2.6 million in2025,70,503 shares for $2.9 million in2024, and 93,182 shares for $3.5 million in2023.

22. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts, and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The Federal Deposit Insurance Corporation has establishedfive capital ratio categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” A well-capitalized institution must have a common equity tier1 capital ratio equal to or greater than 6.5%, a Tier1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier1 leverage capital ratio equal to or greater than 5%. As of* December 31, 2025*, and2024, the Bank qualified as well capitalized under the regulatory framework for prompt corrective action.

F-42

The Bancorp’s and the Bank’s capital and leverage ratios as of* December 31, 2025*, and* December 31,*2024, are presented in the tables below:

F-43

23. Balance Sheet Offsetting

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

Financial instruments that are eligible for offset in the Consolidated Balance Sheets, as of* December 31, 2025*, and* December 31,*2024, are presented in the following tables:

24. Subsequent Events

On* February 13, 2026,the Company’s Board of Directors declaredfirst* quarter2026 dividends for the Company’s common stock. The common stock cash dividend of $0.38 per share will be paid on* March 9, 2026,to stockholders of record on February 26, 2026.*

The Company has evaluated the effect of events that have occurred subsequent to* December 31, 2025*, through the date of issuance of the Consolidated Financial Statements. Based on this evaluation, the Company has determinednone of these events would require recognition in the Consolidated Financial Statements or disclosure in the notes to the Consolidated Financial Statements.