Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and are based upon its unaudited Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements. Actual results may differ from these estimates under different assumptions or conditions.

Quarterly Statement of Operations Review

Financial Performance

		Three months ended								Nine months ended
		September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
		($ In millions, except per share and ratio data)
Net income		$	95.2			$	77.7			$	274.3			$	224.6
Basic earnings per common share		$	1.43			$	1.13			$	4.10			$	3.22
Diluted earnings per common share		$	1.43			$	1.13			$	4.09			$	3.21
Return on average assets			1.51	%			1.29	%			1.50	%			1.28	%
Return on average total stockholders' equity			12.28	%			10.60	%			12.13	%			10.39	%
Efficiency ratio			40.60	%			41.84	%			40.82	%			44.18	%

Net Income

Net income for the three months ended September 30, 2026, was $95.2 million, an increase of $17.5 million, or 22.5% compared to net income of $77.7 million for the same period in 2025. Diluted earnings per share for the three months ended September 30, 2026, was $1.43 per share compared to $1.13 per share for the same period in 2025.

Return on average stockholders' equity was 12.28% and return on average assets was 1.51% for the three months ended September 30, 2026, compared to a return on average stockholders' equity of 10.60% and a return on average assets of 1.29% for the same period in 2025.

Net Interest Income Before Provision for Credit Losses

Net interest income before provision for credit losses increased $22.3 million, or 11.8%, to $211.9 million during the third quarter of 2026, compared to $189.6 million during the same quarter in 2025. The increase was primarily due to higher interest income from loans and investment securities and lower interest expense on deposits and advances from the FHLB.

The net interest margin was 3.52% for the third quarter of 2026 compared to 3.31% for the third quarter of 2025.

For the third quarter of 2026, the yield on average interest-earning assets was 5.74%, the cost of funds on average interest-bearing liabilities was 2.93%, and the average cost of interest-bearing deposits was 2.91%. In comparison, for the third quarter of 2025, the yield on average interest-earning assets was 5.84%, the cost of funds on average interest-bearing liabilities was 3.32%, and the average cost of interest-bearing deposits was 3.28%. The decrease in the cost on average interest-bearing liabilities was primarily attributable to lower interest rates paid on deposits. The decrease in the yield on average interest-earning assets primarily reflected lower interest rates earned on loans, partially offset by higher interest rates earned on investment securities and higher dividend income from FHLB stock. The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 2.81% for the quarter ended September 30, 2026, compared to 2.52% for the same quarter in 2025.

The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields earned on those assets and rates paid on those liabilities for the three months ended September 30, 2026, and 2025. The average outstanding amounts included in the table are daily averages.

		Interest-Earning Assets and Interest-Bearing Liabilities
		Three Months Ended September 30,
		2026												2025
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate (1)(2)				Balance				Expense				Rate (1)(2)
		($ In thousands)
Interest-earning assets:
Total loans (1)		$	20,891,868			$	317,189				6.02	%		$	19,951,853			$	308,945				6.14	%
Investment securities			1,651,113				15,086				3.62				1,634,248				12,690				3.08
Federal Home Loan Bank stock			17,250				658				15.13				17,250				376				8.65
Deposits with banks			1,310,565				12,219				3.70				1,113,274				12,184				4.34
Total interest-earning assets			23,870,796				345,152				5.74				22,716,625				334,195				5.84
Non-interest earning assets:
Cash and due from banks			134,872												163,891
Other non-earning assets			1,178,044												1,150,545
Total non-interest earning assets			1,312,916												1,314,436
Less: Allowance for loan losses			(223,148	)											(172,958	)
Deferred loan fees			(15,320	)											(14,723	)
Total assets		$	24,945,244											$	23,843,380
Interest-bearing liabilities:
Interest-bearing demand accounts		$	2,608,725			$	10,894				1.66	%		$	2,189,376			$	9,369				1.70	%
Money market accounts			4,065,916				31,517				3.08				3,556,374				30,792				3.44
Savings accounts			1,503,628				5,458				1.44				1,419,953				6,139				1.72
Time deposits			9,660,600				83,001				3.41				9,698,744				93,087				3.81
Total interest-bearing deposits			17,838,869				130,870				2.91				16,864,447				139,387				3.28
Other borrowings			71,414				596				3.32				295,892				3,178				4.26
Long-term debt			115,634				1,808				6.20				119,136				2,043				6.80
Total interest-bearing liabilities			18,025,917				133,274				2.93				17,279,475				144,608				3.32
Non-interest bearing liabilities:
Demand deposits			3,569,978												3,384,141
Other liabilities			275,086												272,168
Total equity			3,074,263												2,907,596
Total liabilities and equity		$	24,945,244											$	23,843,380
Net interest spread											2.81	%											2.52	%
Net interest income						$	211,878											$	189,587
Net interest margin											3.52	%											3.31	%
(1) Yields and amounts of interest earned include loan fees. Non-accrual loans are included in the average balance.
(2) Calculated by dividing net interest income by average outstanding interest-earning assets.

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

Taxable-Equivalent Net Interest Income - Changes Due to Volume and Rate(1)
		Three Months Ended September 30,
		2026-2025
		Increase/(Decrease) in
		Net Interest Income Due to
		Changes in Volume				Changes in Rate				Total Change
		($ In thousands)
Interest-earning assets:
Loans		$	14,285			$	(6,041	)		$	8,244
Investment securities			132				2,264				2,396
Federal Home Loan Bank stock			-				282				282
Deposits with other banks			1,969				(1,934	)			35
Total changes in interest income			16,386				(5,429	)			10,957
Interest-bearing liabilities:
Interest-bearing demand accounts			1,754				(228	)			1,526
Money market accounts			4,114				(3,390	)			724
Savings accounts			342				(1,023	)			(681	)
Time deposits			(365	)			(9,721	)			(10,086	)
Other borrowed funds			(1,999	)			(583	)			(2,582	)
Long-term debt			(58	)			(177	)			(235	)
Total changes in interest expense			3,788				(15,122	)			(11,334	)
Changes in net interest income		$	12,598			$	9,693			$	22,291
(1) Changes in interest income and interest expense attributable to changes in both volume and rate have been allocated proportionately to changes due to volume and changes due to rate.

Provision for credit losses

The Company recorded a provision for credit losses of $28.6 million in the third quarter of 2026 compared to $28.7 million in the third quarter of 2025. As of September 30, 2026, the allowance for loan losses increased $28.3 million to $224.2 million, or 1.06% of total loans compared to $195.9 million, or 0.97% of total loans as of December 31, 2025.

The following table sets forth the charge-offs and recoveries for the periods indicated:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
		($ In thousands)
Charge-offs:
Commercial loans		$	261			$	16,173			$	10,975			$	27,634
Construction loans			8,810				-				8,810				-
Real estate loans (1)			17,876				314				19,261				4,227
Total charge-offs			26,947				16,487				39,046				31,861
Recoveries:
Commercial loans			1,660				547				7,444				1,012
Construction loans			1				5				1				6
Real estate loans (1)			-				289				2,344				479
Total recoveries			1,661				841				9,789				1,497
Net charge-offs		$	25,286			$	15,646			$	29,257			$	30,364
(1) Real estate loans include commercial real estate loans, residential mortgage loans, and equity lines.

Non-Interest Income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wealth management fees, and other sources of fee income, was $42.8 million for the third quarter of 2026, an increase of $21.8 million, or 103.8%, compared to $21.0 million for the third quarter of 2025. The increase was primarily driven by a $32.8 million increase in net gains from equity securities, a $3.1 million benefit from the redemption of TruPS and a $0.4 million increase in wealth management fees, partially offset by a $15.1 million net loss on the sale of available-for-sale investment securities related to investment securities repositioning activities.

Non-Interest Expense

Non-interest expense was $103.4 million for the third quarter of 2026, an increase of $15.3 million, or 17.4% compared to $88.1 million for the third quarter of 2025. The increase was primarily attributable to an $8.0 million charitable contribution to the Cathay Bank Foundation, a $5.4 million contract termination fee, a $4.8 million increase in salaries and employee benefits, a $1.5 million increase in computer and equipment expenses, and a $1.5 million increase in other real estate owned expense, partially offset by a $5.7 million decrease in amortization expense of investments in low-income housing. The efficiency ratio was 40.60% in the third quarter of 2026 compared to 41.84% for the same quarter in 2025.

Income Taxes

The effective tax rate for the third quarter of 2026 was 22.4% compared to 17.2% for the third quarter of 2025, primarily due to the higher pre-tax income in the third quarter of 2026. The effective tax rate for the third quarter of 2026 and 2025 includes the impact of low-income housing tax credits.

Year-to-Date Statement of Operations Review

Net Income

Net income for the nine months ended September 30, 2026, was $274.3 million, an increase of $49.7 million, or 22.1% compared to net income of $224.6 million for the same period in 2025. Diluted earnings per share for the nine months ended September 30, 2026, was $4.09 per share compared to $3.21 per share for the same period in 2025.

Return on average stockholders' equity was 12.13% and return on average assets was 1.50% for the nine months ended September 30, 2026, compared to a return on average stockholders' equity of 10.39% and a return on average assets of 1.28% for the same period in 2025.

The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields earned on those assets and rates paid on those liabilities for the nine months ended September 30, 2026, and 2025. The average outstanding amounts included in the table are daily averages.

		Interest-Earning Assets and Interest-Bearing Liabilities
		Nine Months Ended September 30,
		2026												2025
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate (1)(2)				Balance				Expense				Rate (1)(2)
		($ In thousands)
Interest-earning assets:
Total loans (1)		$	20,453,313			$	918,294				6.00	%		$	19,593,553			$	899,786				6.14	%
Investment securities			1,675,273				42,489				3.39				1,572,074				38,459				3.27
Federal Home Loan Bank stock			17,250				1,785				13.83				17,250				1,128				8.74
Interest-bearing deposits			1,202,938				32,947				3.66				1,139,060				37,135				4.36
Total interest-earning assets			23,348,774				995,515				5.70				22,321,937				976,508				5.85
Non-interest earning assets:
Cash and due from banks			144,001												166,859
Other non-earning assets			1,153,945												1,156,304
Total non-interest earning assets			1,297,946												1,323,163
Less: Allowance for loan losses			(210,269	)											(169,464	)
Deferred loan fees			(14,809	)											(12,837	)
Total assets		$	24,421,642											$	23,462,799
Interest-bearing liabilities:
Interest-bearing demand accounts		$	2,482,097			$	28,352				1.53	%		$	2,155,336			$	27,321				1.69	%
Money market accounts			3,825,022				86,767				3.03				3,468,421				89,062				3.43
Savings accounts			1,509,852				16,686				1.48				1,351,352				16,721				1.65
Time deposits			9,616,901				248,054				3.45				9,658,300				283,517				3.92
Total interest-bearing deposits			17,433,872				379,859				2.91				16,633,409				416,621				3.35
Other borrowings			124,401				3,235				3.48				204,953				6,348				4.14
Long-term debt			117,956				5,478				6.21				119,136				6,092				6.84
Total interest-bearing liabilities			17,676,229				388,572				2.94				16,957,498				429,061				3.38
Non-interest bearing liabilities:
Demand deposits			3,459,809												3,340,530
Other liabilities			261,996												274,190
Total equity			3,023,608												2,890,581
Total liabilities and equity		$	24,421,642											$	23,462,799
Net interest spread											2.76	%											2.47	%
Net interest income						$	606,943											$	547,447
Net interest margin											3.48	%											3.28	%
(1) Yields and amounts of interest earned include loan fees. Non-accrual loans are included in the average balance.
(2) Calculated by dividing net interest income by average outstanding interest-earning assets.

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

Taxable-Equivalent Net Interest Income - Changes Due to Volume and Rate(1)
		Nine Months Ended September 30,
		2026-2025
		Increase/(Decrease) in
		Net Interest Income Due to
		Changes in Volume				Changes in Rate				Total Change
		($ In thousands)
Interest-earning assets:
Loans		$	38,971			$	(20,463	)		$	18,508
Investment securities			2,584				1,446				4,030
Federal Home Loan Bank stock			-				657				657
Deposits with other banks			2,005				(6,193	)			(4,188	)
Total changes in interest income			43,560				(24,553	)			19,007
Interest-bearing liabilities:
Interest-bearing demand accounts			3,904				(2,872	)			1,032
Money market accounts			8,683				(10,979	)			(2,296	)
Savings accounts			1,857				(1,892	)			(35	)
Time deposits			(1,211	)			(34,252	)			(35,463	)
Other borrowed funds			(2,212	)			(901	)			(3,113	)
Long-term debt			(60	)			(554	)			(614	)
Total changes in interest expense			10,961				(51,450	)			(40,489	)
Changes in net interest income		$	32,599			$	26,897			$	59,496
(1) Changes in interest income and interest expense attributable to changes in both volume and rate have been allocated proportionately to changes due to volume and changes due to rate.

Balance Sheet Review

Assets

Total assets were $25.57 billion as of September 30, 2026, an increase of $1.34 billion, or 5.5%, from $24.23 billion as of December 31, 2025.

Securities Available-for-Sale

The carrying value of our securities available-for-sale ("AFS") portfolio was $1.59 billion as of September 30, 2026, a decrease of $69.2 million from $1.66 billion as of December 31, 2025. The decrease primarily reflected reductions of $122.0 million in corporate securities, $25.0 million in government sponsored entities securities and $18.5 million in collateralized mortgage obligations, partially offset by a $96.5 million increase in U.S. Treasury securities during the nine months ended September 30, 2026. AFS securities represented 6.2% and 6.8% of total assets as of September 30, 2026, and December 31, 2025, respectively.

The portfolio continues to be concentrated in U.S. government-backed securities, with more than 90% of the AFS investment portfolio invested in U.S. Treasuries and agency mortgage-backed securities issued by Fannie Mae and Freddie Mac with the remainder held in investment-grade securities. There was no allowance for credit losses provided against the AFS investment securities as of both September 30, 2026, and December 31, 2025. Additionally, there were no credit losses recognized in earnings during the nine months ended September 30, 2026, and 2025.

The Company actively manages the investment portfolio in the context of asset/liability objectives, interest rate risk, and market conditions. These evaluations may result in changes to portfolio size, composition, or hedging strategies, including adjustments to the mix of securities classified as AFS.

During the quarter, the Company recorded a $15.1 million loss related to its decision to sell certain AFS investment securities as part of a portfolio repositioning initiative designed to improve yield while maintaining the portfolio's overall duration and credit quality. These securities, with an amortized cost basis of $89.8 million, were sold in September 2026, resulting in a realized loss of $15.1 million. The AFS portfolio had an effective duration of 2.03 years at September 30, 2026, compared to 1.9 years at December 31, 2025.

Loans

Gross loans held for investment were $21.20 billion at September 30, 2026, an increase of $1.05 billion, or 5.2%, from $20.15 billion at December 31, 2025. The increase was primarily due to an increase of $760.8 million, or 23.9%, in commercial loans, an increase of $280.0 million, or 2.7%, in commercial real estate loans, an increase of $74.7 million, or 1.2% in residential mortgage loans and equity lines, and an increase of $4.7 million, or 261.1% in installment and other loans, partially offset by a decrease of $71.7 million, or 21.2% in construction loans.

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

		September 30, 2026				% of Gross Loans				December 31, 2025				% of Gross Loans				% Change
		($ In thousands)
Commercial loans		$	3,945,390				18.6	%		$	3,184,556				15.8	%			23.9	%
Construction loans			265,880				1.3				337,550				1.7				(21.2	)
Commercial real estate loans			10,844,794				51.2				10,564,744				52.4				2.7
Residential mortgage loans and equity lines			6,133,247				28.9				6,058,538				30.1				1.2
Installment and other loans			6,550				-				1,814				-				261.1
Gross loans held for investment		$	21,195,861				100	%		$	20,147,202				100	%			5.2	%
Allowance for loan losses			(224,190	)							(195,911	)							14.4
Unamortized deferred loan fees			(15,523	)							(14,903	)							4.2
Total loans held for investment, net		$	20,956,148							$	19,936,388								5.1	%

Non-performing Assets

Non-performing assets include loans past due 90 days or more and still accruing interest, non-accrual loans, and OREO. Our policy is to place loans on non-accrual status if interest and/or principal is past due 90 days or more, or in cases where management deems the full collection of principal and interest unlikely. After a loan is placed on non-accrual status, any previously accrued but unpaid interest is reversed and charged against current income and subsequent payments received are generally first applied towards the outstanding principal balance of the loan. Depending on the circumstances, management may elect to continue the accrual of interest on certain past due loans if partial payment is received and/or the loan is well collateralized and in the process of collection. The loan is generally returned to accrual status when the borrower has brought the past due principal and interest payments current and, in the opinion of management, the borrower has demonstrated the ability to make future payments of principal and interest as scheduled.

Management reviews the loan portfolio regularly to seek to identify problem loans. During the ordinary course of business, management may become aware of borrowers that may not be able to meet the contractual requirements of their loan agreements. Such loans generally are placed under closer supervision with consideration given to placing the loans on non-accrual status, the need for an additional allowance for loan losses, and (if appropriate) partial or full charge-off.

The ratio of non-performing assets to total assets was 0.47% and 0.59% as of September 30, 2026, and December 31, 2025, respectively. Total non-performing assets decreased $24.5 million, or 17.0%, to $119.2 million at September 30, 2026, compared to $143.7 million at December 31, 2025, primarily due to a decrease of $25.1 million, or 22.3%, in non-accrual loans, and a decrease of $3.4 million, or 11.3%, in other real estate owned, partially offset by an increase of $4.0 million, or 399.4%, in accruing loans past due 90 days or more.

As a percentage of gross loans, excluding loans held for sale, plus OREO, non-performing assets were 0.56% and 0.71% as of September 30, 2026 and December 31, 2025, respectively. The non-performing loan portfolio coverage ratio, defined as the allowance for credit losses to non-performing loans, increased to 256.99% as of September 30, 2026, from 183.79% as of December 31, 2025.

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

		September 30, 2026				December 31, 2025				% Change				September 30, 2025				% Change
		($ In thousands)
Non-performing assets
Accruing loans past due 90 days or more		$	4,994			$	1,000				399			$	110				4,440
Non-accrual loans:
Commercial real estate loans			47,246				59,511				(21	)			103,158				(54	)
Commercial loans			7,188				21,498				(67	)			33,690				(79	)
Residential mortgage loans			32,844				31,354				5				28,784				14
Total non-accrual loans		$	87,278			$	112,363				(22	)		$	165,632				(47	)
Total non-performing loans			92,272				113,363				(19	)			165,742				(44	)
Other real estate owned			26,910				30,336				(11	)			32,983				(18	)
Total non-performing assets		$	119,182			$	143,699				(17	)		$	198,725				(40	)
Allowance for loan losses		$	224,190			$	195,911				14			$	186,647				20
Total gross loans outstanding, excluding loans held for sale, at period-end		$	21,195,861			$	20,147,202				5			$	20,104,716				5
Allowance for loan losses to non-performing loans, at period-end			242.97	%			172.82	%							112.61	%
Allowance for loan losses to gross loans, excluding loans held for sale, at period-end			1.06	%			0.97	%							0.93	%

Non-accrual Loans

As of September 30, 2026, total non-accrual loans were $87.3 million, a decrease of $25.1 million, or 22.3%, from $112.4 million at December 31, 2025, and a decrease of $78.3 million, or 47.3%, from $165.6 million at September 30, 2025. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information, less cost to sell. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly.

The following tables set forth the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers were engaged in as of the dates indicated:

		September 30, 2026								December 31, 2025
		Real								Real
		Estate (1)				Commercial				Estate (1)				Commercial
		($ In thousands)
Type of Collateral
Single/multi-family residence		$	62,774			$	516			$	57,676			$	516
Commercial real estate			17,316				4,765				33,189				3,514
Personal property (UCC)			-				1,907				-				17,468
Total		$	80,090			$	7,188			$	90,865			$	21,498
(1) Real estate includes commercial real estate loans, construction loans, residential mortgage loans, equity lines and installment & other loans.

		September 30, 2026								December 31, 2025
		Real								Real
		Estate (1)				Commercial				Estate (1)				Commercial
		($ In thousands)
Type of Business
Real estate development		$	46,855			$	-			$	40,848			$	4,873
Wholesale/Retail			391				5,397				18,662				15,812
Food/Restaurant			-				1,315				42				40
Import/Export			-				476				-				476
Other			32,844				-				31,313				297
Total		$	80,090			$	7,188			$	90,865			$	21,498
(1) Real estate includes commercial real estate loans, construction loans, residential mortgage loans, equity lines and installment & other loans.

For non-accrual loans, amounts previously charged-off represented 5.0% and 14.4% of the contractual balances of non-accrual loans as of September 30, 2026 and December 31, 2025, respectively. As of September 30, 2026, $80.1 million, or 91.8%, of the $87.3 million of non-accrual loans were secured by real estate compared to $90.9 million, or 80.8%, of the $112.4 million of non-accrual loans that were secured by real estate as of December 31, 2025. The Bank generally seeks to obtain current appraisals, sales contracts, or other available market price information to update the factors used in evaluating potential losses.

The allowance for loan losses to non-performing loans was 242.97% as of September 30, 2026, compared to 172.82% as of December 31, 2025. The increase was primarily due to an increase in the allowance for loan losses and a decrease in non-accrual loans.

Loan Interest Reserves

In accordance with customary banking practice, construction loans and land development loans generally are originated with interest disbursed from pre-established interest reserves included in the total original loan commitment. Our construction loans and land development loans generally include optional renewal terms after the maturity of the initial loan term. New appraisals are obtained before extension or renewal of these loans in part to determine the appropriate interest reserve to be established for the new loan term. Loans with interest reserves are generally underwritten to the same criteria, including loan to value and, if applicable, pro forma debt service coverage ratios, as loans without interest reserves. Construction loans with interest reserves are monitored on a periodic basis to gauge progress toward completion. Interest reserves are frozen if it is determined that additional draws would result in a loan to value ratio that exceeds policy maximums based on collateral property type. Our policy limits in this regard are consistent with supervisory limits and range from 50% in the case of land to 85% in the case of one to four family residential construction projects.

As of September 30, 2026, construction loans of $252.9 million were disbursed with pre-established interest reserves of $43.5 million, compared to $225.9 million with pre-established interest reserves of $34.0 million at December 31, 2025. The balance for construction loans with interest reserves which have been extended was $8.1 million with pre-established interest reserves of $0.6 million at September 30, 2026, compared to a balance of $3.3 million of such loans with pre-established interest reserves of $95 thousand at December 31, 2025. Land loans of $21.6 million were disbursed with pre-established interest reserves of $1.0 million at September 30, 2026, compared to land loans of $15.3 million with pre-established interest reserves of $1.3 million at December 31, 2025. There were no land loans with interest reserves that had been extended as of September 30, 2026, and December 31, 2025.

At September 30, 2026, and December 31, 2025, the Bank had no loans on non-accrual status with available interest reserves. There were no non-accrual residential construction loans, non-accrual non-residential construction loans, or non-accrual land loans that were originated with pre-established interest reserves as of September 30, 2026, and December 31, 2025. While we typically expect loans with interest reserves to be repaid in full according to the original contractual terms, some loans may require one or more extensions beyond the original maturity before full repayment. Typically, these extensions are required due to construction delays, delays in the sale or lease of the property, or some combination of these factors.

Loan Concentration

Most of the Company's business activities are with clients located in areas with significant Asian populations in Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has loan clients in Hong Kong. The Company does not have a significant concentration in any single commercial industry sector, and our loans generally are collateralized with real property or other pledged collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, through refinancing by another lender, or through the borrowers' sales of collateral.

The federal banking regulatory agencies issued final guidance on December 6, 2006, regarding risk management practices for financial institutions with high or increasing concentrations of commercial real estate ("CRE") loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: (1) total reported loans for construction, land development, and other land represent 100% of the institution's total risk-based capital, and (2) total CRE loans represent 300% or more of the institution's total risk-based capital, and the institution's CRE loan portfolio has increased 50% or more within the last thirty-six months. The Bank's loans for construction, land development, and other land represented 11% of the Bank's total risk-based capital as of September 30, 2026, and 14% as of December 31, 2025. Total CRE loans represented 284% of total risk-based capital as of September 30, 2026, and 287% as of December 31, 2025, which were within the Bank's internal limit of 400% of total capital.

CRE and Construction Loans ("CREC")

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

		As of September 30, 2026								As of December 31, 2025
($ In thousands)		Amount				%				Amount				%
Property type:
Retail		$	2,728,951				25	%		$	2,545,446				24	%
Multifamily			2,918,668				26	%			2,887,642				27	%
Office			1,375,596				12	%			1,439,568				13	%
Warehouse			1,515,072				14	%			1,359,887				12	%
Industrial			709,324				6	%			692,280				6	%
Hospitality			355,405				3	%			360,692				3	%
Construction & Land			331,392				3	%			407,957				4	%
Other			1,176,267				11	%			1,208,822				11	%
Total CREC loans		$	11,110,675				100	%		$	10,902,294				100	%

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

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

		As of September 30, 2026
($ In thousands)		CRE				%				Multifamily Residential				%				Construction and Land				%				Total				%
Geographic markets:
California		$	3,820,758				49	%		$	1,094,851				38	%		$	159,935				48	%		$	5,075,544				46	%
New York			2,429,836				31	%			1,382,768				47	%			89,883				27	%			3,902,487				35	%
Texas			411,659				5	%			183,788				6	%			5,948				2	%			601,395				5	%
Illinois			258,936				3	%			41,683				1	%			4,136				1	%			304,755				3	%
New Jersey			181,691				2	%			24,117				1	%			5,110				2	%			210,918				2	%
Nevada			227,327				3	%			28,020				1	%			12,288				4	%			267,635				3	%
Washington			67,426				1	%			145,382				5	%			45,762				14	%			258,570				2	%
Other markets			462,982				6	%			18,059				1	%			8,330				2	%			489,371				4	%
Total CREC loans		$	7,860,615				100	%		$	2,918,668				100	%		$	331,392				100	%		$	11,110,675				100	%

		As of December 31, 2025
($ In thousands)		CRE				%				Multifamily Residential				%				Construction and Land				%				Total				%
Geographic markets:
California		$	3,649,273				48	%		$	1,130,859				39	%		$	272,251				67	%		$	5,052,383				46	%
New York			2,373,202				31	%			1,291,064				45	%			102,685				25	%			3,766,951				35	%
Texas			388,334				5	%			202,313				7	%			-				0	%			590,647				5	%
Illinois			251,271				3	%			44,961				1	%			1,895				1	%			298,127				3	%
New Jersey			170,358				2	%			19,153				1	%			1,603				0	%			191,114				2	%
Nevada			209,928				3	%			27,523				1	%			5,259				1	%			242,710				2	%
Washington			66,130				1	%			143,135				5	%			15,934				4	%			225,199				2	%
Other markets			498,199				7	%			28,634				1	%			8,330				2	%			535,163				5	%
Total CREC loans		$	7,606,695				100	%		$	2,887,642				100	%		$	407,957				100	%		$	10,902,294				100	%

California represented 46% of total CREC loans as of both September 30, 2026, and December 31, 2025. Changes in California's economy and real estate values could have a significant impact on the collectability of these loans and the required level of allowance for loan losses.

Commercial Real Estate Loans

The Company focuses on providing financing to experienced real estate investors and developers who have moderate levels of leverage, many of whom are long-time customers of the Bank. CRE loans totaled $7.86 billion as of September 30, 2026, compared to $7.61 billion as of December 31, 2025, and accounted for 37% of total loans held-for-investment, not including loans held for sale, as of September 30, 2026, and December 31, 2025. Interest rates on CRE loans may be fixed or variable. As of September 30, 2026, 24% and 37% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2025, 21% and 40% of our CRE portfolio were variable rate and hybrid loans in their fixed period, respectively. Loans are underwritten with conservative standards for cash flows, debt service coverage and LTV.

Owner-occupied properties comprised 26% and 25% of the CRE loans as of September 30, 2026, and December 31, 2025, respectively. The remainder were non-owner-occupied properties, where 50% or more of the debt service for the loan is typically provided by rental income from an unaffiliated third party.

Commercial-Multifamily Residential Loans

The multifamily residential loan portfolio is largely comprised of loans secured by residential properties with five or more units. Multifamily residential loans totaled $2.92 billion as of September 30, 2026, compared to $2.89 billion as of December 31, 2025, and accounted for 14% of total loans held-for-investment, not including loans held for sale, as of September 30, 2026, and December 31, 2025. The Company offers a variety of first lien mortgages, including fixed and variable-rate loans. As of September 30, 2026, 28% and 35% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively. In comparison, as of December 31, 2025, 24% and 36% of our multifamily residential loan portfolio were variable rate and hybrid loans in their fixed period, respectively.

Commercial-Construction and Land Loans

Construction and land loans provide financing for diversified projects by real estate property type. Construction and land loans totaled $331.4 million as of September 30, 2026, compared to $408.0 million as of December 31, 2025, and accounted for 2% of total loans held-for-investment, not including loans held for sale, as of September 30, 2026, and December 31, 2025. Construction loan exposure was made up of $265.9 million in outstanding loans, plus $289.8 million in unfunded commitments as of September 30, 2026, compared to $337.6 million in outstanding loans, plus $235.3 million in unfunded commitments as of December 31, 2025. Land loans totaled $65.5 million as of September 30, 2026, compared to $70.4 million as of December 31, 2025.

Allowance for Credit Losses

The following table sets forth information relating to the allowance for loan losses, charge-offs, recoveries, and the reserve for off-balance sheet credit commitments for the periods indicated:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
		($ In thousands)
Allowance for loan losses
Balance at beginning of period		$	218,896			$	173,531			$	195,911			$	161,765
Provision for expected credit losses on loans			30,580				28,762				57,536				55,246
Charge-offs:
Commercial loans			(261	)			(16,173	)			(10,975	)			(27,634	)
Construction loans			(8,810	)			-				(8,810	)			-
Real estate loans (1)			(17,876	)			(314	)			(19,261	)			(4,227	)
Total charge-offs			(26,947	)			(16,487	)			(39,046	)			(31,861	)
Recoveries:
Commercial loans			1,660				547				7,444				1,012
Construction loans			1				5				1				6
Real estate loans (1)			-				289				2,344				479
Total recoveries			1,661				841				9,789				1,497
Balance at the end of period		$	224,190			$	186,647			$	224,190			$	186,647
Reserve for off-balance sheet credit commitments
Balance at beginning of period		$	14,918			$	9,892			$	12,441			$	9,676
Provision for expected credit losses on unfunded credit commitments			(1,980	)			(31	)			497			$	185
Balance at the end of period		$	12,938			$	9,861			$	12,938			$	9,861
Average loans outstanding during the period		$	20,891,868			$	19,951,853			$	20,453,313			$	19,593,553
Total gross loans outstanding, excluding loans held for sale, at period-end		$	21,195,861			$	20,104,716			$	21,195,861			$	20,104,716
Total non-performing loans, at period-end		$	92,272			$	165,742			$	92,272			$	165,742
Ratio of net charge-offs to average loans outstanding during the period(2)			0.48	%			0.31	%			0.19	%			0.21	%
Provision for expected credit losses to average loans outstanding during the period(2)			0.54	%			0.57	%			0.38	%			0.38	%
Allowance for loan losses to non-performing loans, at period-end			242.97	%			112.61	%			242.97	%			112.61	%
Allowance for loan losses to gross loans, excluding loans held for sale, at period-end			1.06	%			0.93	%			1.06	%			0.93	%
(1) Real estate loans include commercial real estate loans, residential mortgage loans, and equity lines.
(2) Annualized.

The table set forth below reflects management's allocation of the allowance for loan losses by loan category and the ratio of each loan category to the average gross loans as of the dates indicated:

		September 30, 2026								December 31, 2025
						Percentage of								Percentage of
						Loans in Each								Loans in Each
						Category								Category
						to Average								to Average
		Amount				Gross Loans				Amount				Gross Loans
		($ In thousands)
Type of Loan:
Commercial loans		$	39,674				17.4	%		$	39,123				15.9	%
Construction loans			11,373				1.3				6,475				1.7
Commercial real estate loans			142,977				52.2				125,665				52.3
Residential mortgage loans and equity lines			30,143				29.1				24,641				30.1
Installment and other loans			23				0.0				7				0.0
Total allowance		$	224,190				100	%		$	195,911				100	%

The increase in the ACL was driven primarily by strong quarterly loan growth and updated loss assumptions incorporating recent loan and charge-off data. This was largely offset by a decrease in individually evaluated reserves from three isolated credits - one construction loan which was fully reserved for last quarter, and two movie theater CRE loans inherited from the Far East National Bank acquisition.

The qualitative component of the allowance decreased modestly during the quarter, inversely impacted by enhancements to the quantitative model's updated loss assumptions. No new emerging qualitative risks were identified this quarter.

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

To illustrate the sensitivity of the allowance to changes in economic assumptions, management estimates that applying a 100% weighting to the downside scenario would have increased the ACL by approximately $105.6 million as of September 30, 2026. This analysis is intended to demonstrate the directional impact of more adverse economic conditions and should not be interpreted as a forecast of future allowance levels.

Our methodology, policies and estimates on allowance for credit losses for loans are described in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Form 10-K. For more information, please also see Note 5 to the Company's unaudited Consolidated Financial Statements.

Deposits

Total deposits were $21.83 billion as of September 30, 2026, an increase of $940.8 million, or 4.5% from $20.89 billion as of December 31, 2025.

The Company calculates its uninsured deposits based on the methodologies and assumptions used for regulatory reporting. Total uninsured deposits were $10.26 billion as of September 30, 2026, an increase of approximately $63.2 million, from $10.19 billion as of December 31, 2025. Excluding $797.4 million in collateralized deposits, the uninsured and uncollateralized deposits of $9.46 billion were 43.3% of total deposits as of September 30, 2026. As of September 30, 2026, our unused borrowing capacity from the Federal Home Loan Bank was $7.02 billion, and our unpledged securities were $1.57 billion. These sources of available liquidity, including cash and short-term investments, were more than 100% of uninsured and uncollateralized deposits as of September 30, 2026.

The following table sets forth the deposit mix as of the dates indicated:

		September 30, 2026								December 31, 2025
		Amount				Percentage				Amount				Percentage
		($ In thousands)
Deposits
Non-interest-bearing demand deposits		$	3,950,436				18.1	%		$	3,505,606				16.8	%
NOW deposits			2,634,247				12.1				2,370,047				11.3
Money market deposits			4,284,484				19.6				3,800,471				18.2
Savings deposits			1,517,383				6.9				1,500,890				7.2
Time deposits			9,448,438				43.3				9,717,153				46.5
Total deposits		$	21,834,988				100.0	%		$	20,894,167				100.0	%

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

		As of September 30, 2026
		Time Deposits -under $250,000				Time Deposits -$250,000 and over				Total Time Deposits
		($ In thousands)
Three months or less		$	1,346,493			$	2,465,243			$	3,811,736
Over three to six months			1,340,625				1,747,140				3,087,765
Over six to twelve months			916,303				1,501,625				2,417,928
Over twelve months			51,268				79,741				131,009
Total		$	3,654,689			$	5,793,749			$	9,448,438
Percent of total deposits			16.7	%			26.5	%			43.3	%

FDIC Special Assessment

In November 2023, the FDIC adopted a final rule implementing a special assessment to recover losses to the Deposit Insurance Fund ("DIF") arising from the systemic risk determination related to the failures of Silicon Valley Bank and Signature Bank in March 2023. The Company was subject to the special assessment and paid its eighth and final scheduled quarterly assessment during the quarter ended March 31, 2026. As of September 30, 2026, the Company had no remaining accrued liability related to the FDIC special assessment.

In December 2025, the FDIC adopted an interim final rule establishing a process under which institutions subject to the special assessment may receive an offset against future regular deposit insurance assessments if total special assessment collections ultimately exceed losses required to be recovered by the FDIC. The interim final rule also provides for the possibility of an additional one-time shortfall special assessment if ultimate losses exceed amounts collected. As of September 30, 2026, the Company had not recognized any asset related to a potential future offset because the amount and timing of any such offset, if any, are not currently determinable. The Company will continue to monitor future FDIC communications and guidance regarding any additional assessments or offsets.

Off-Balance-Sheet Arrangements and Contractual Obligations

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

		Payment Due by Period
						More than				3 years or
						1 year but				more but
		1 year				less than				less than				5 years
		or less				3 years				5 years				or more				Total
		($ In thousands)
Contractual obligations:
Deposits with stated maturity dates		$	9,317,429			$	130,982			$	24			$	3			$	9,448,438
Advances from the Federal Home Loan Bank			200,000				-			$	-			$	-				200,000
Long-term debt			-				-				-				65,011				65,011
Operating leases			11,313				17,794				7,850				5,225				42,182
Total contractual obligations and other commitments		$	9,528,742			$	148,776			$	7,874			$	70,239			$	9,755,631

In the normal course of business, we enter into various transactions, which, in accordance with GAAP, are not included in our Consolidated Balance Sheets. We enter into these transactions to meet the financing needs of our clients. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the Consolidated Balance Sheets.

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

Standby Letters of Credit - Standby letters of credit are written conditional commitments issued by us to secure the obligations of a client to a third party. In the event the client does not perform in accordance with the terms of an agreement with the third party, we would be required to fund the commitment. The maximum potential amount of future payments we could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, we would be entitled to seek reimbursement from the client. Our policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements.

Capital Resources

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

The following table summarizes changes in total equity for the nine months ended September 30, 2026:

		Nine Months Ended
		September 30, 2026
		($ In thousands)
Net income		$	274,269
Proceeds from shares issued through the Dividend Reinvestment Plan			1,988
Shares withheld related to net share settlement of RSUs			(3,878	)
Restricted stock units vested			1
Stock issued to directors			864
Purchase of treasury stock			(77,505	)
Stock-based compensation			5,807
Cash dividends paid to common stockholders			(76,093	)
Other comprehensive income			5,904
Net increase in total equity		$	131,357

Capital Adequacy Review

Management seeks to maintain capital at a level sufficient to support future growth, protect depositors and stockholders, and comply with applicable regulatory requirements.

The following tables set forth actual and required capital ratios as of September 30, 2026, and December 31, 2025, for Bancorp and the Bank under the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. See the 2025 Form 10-K for a more detailed discussion of the Basel III Capital Rules.

		Actual								For Capital Adequacy Purposes								To Be Well-Capitalized Under Prompt Corrective Action provisions
		Capital Amount				Ratio				Capital Amount				Ratio				Capital Amount				Ratio
		($ In thousands)
September 30, 2026
Cathay General Bancorp:
Common Equity Tier 1 to Risk-Weighted Assets		$	2,717,846				13.50			$	905,966				4.50
Tier 1 Capital to Risk-Weighted Assets			2,717,846				13.50				1,207,955				6.00
Total Capital to Risk-Weighted Assets			3,017,974				14.99				1,610,606				8.00
Leverage Ratio			2,717,846				11.05				984,008				4.00
Cathay Bank:
Common Equity Tier 1 to Risk-Weighted Assets		$	2,717,037				13.50			$	905,544				4.50			$	1,308,008				6.50
Tier 1 Capital to Risk-Weighted Assets			2,717,037				13.50				1,207,392				6.00				1,609,856				8.00
Total Capital to Risk-Weighted Assets			2,954,165				14.68				1,609,856				8.00				2,012,320				10.00
Leverage Ratio			2,717,037				11.05				983,640				4.00				1,229,550				5.00

		Actual								For Capital Adequacy Purposes								To Be Well-Capitalized Under Prompt Corrective Action provisions
		Capital Amount				Ratio				Capital Amount				Ratio				Capital Amount				Ratio
		($ In thousands)
December 31, 2025
Cathay General Bancorp:
Common Equity Tier 1 to Risk-Weighted Assets		$	2,590,921				13.27			$	878,810				4.50
Tier 1 Capital to Risk-Weighted Assets			2,590,921				13.27				1,171,746				6.00
Total Capital to Risk-Weighted Assets			2,914,774				14.93				1,562,328				8.00
Leverage Ratio			2,590,921				10.91				950,270				4.00
Cathay Bank:
Common Equity Tier 1 to Risk-Weighted Assets		$	2,678,692				13.73			$	878,257				4.50			$	1,268,593				6.50
Tier 1 Capital to Risk-Weighted Assets			2,678,692				13.73				1,171,009				6.00				1,561,345				8.00
Total Capital to Risk-Weighted Assets			2,887,045				14.79				1,561,345				8.00				1,951,682				10.00
Leverage Ratio			2,678,692				11.28				949,627				4.00				1,187,034				5.00

As of September 30, 2026, capital levels at Bancorp and the Bank exceed all capital adequacy requirements under the fully phased-in Basel III Capital Rules.

Dividend Policy

Holders of common stock are entitled to dividends as and when declared by our Board of Directors out of funds legally available for the payment of dividends. Although we have historically paid cash dividends on our common stock, we are not required to do so. The Company increased cash dividends per common share from $0.34 to $0.38 during the three months ended March 31, 2026. The amount of future dividends, if any, will depend on our earnings, financial condition, capital requirements and other factors, and will be determined by our Board of Directors. The terms of our Junior Subordinated Notes also limit our ability to pay dividends. If we are not current in our payment of dividends on our Junior Subordinated Notes, we may not pay dividends on our common stock.

The Company declared a cash dividend of $0.38 per share on 66,334,489 shares outstanding on August 28, 2026, for distribution to holders of our common stock on September 8, 2026. The Company paid total cash dividends of $25.2 million in the third quarter of 2026.

Liquidity

Liquidity is our ability to maintain sufficient cash flow to meet maturing financial obligations and client credit needs, and to take advantage of investment opportunities as they are presented in the marketplace. Our principal sources of liquidity are growth in deposits, proceeds from the maturity or sale of securities and other financial instruments, repayments from securities and loans, Federal funds purchased, securities sold under agreements to repurchase, and advances from the FHLB. As of September 30, 2026, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 15.1% compared to 14.7% as of December 31, 2025.

The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary. At September 30, 2026, the Bank had an approved credit line with the FHLB of San Francisco totaling $8.62 billion. There were $200.0 million in outstanding advances from the FHLB of San Francisco and there were $842.9 million in standby letters of credit issued by the FHLB on the Company's behalf as of September 30, 2026. FHLB advances, if any, bear fixed rates and are secured by the Bank's loans. See Note 8 to the Consolidated Financial Statements. At September 30, 2026, the Bank pledged $1.27 billion of its commercial loans and no securities to the Federal Reserve Bank's Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.17 billion from the Federal Reserve Bank Discount Window at September 30, 2026.

Liquidity can also be provided through the sale of liquid assets, which may consist of federal funds sold, securities purchased under agreements to resell, and securities available-for-sale. At September 30, 2026, investment securities totaled $1.59 billion, with $19.7 million pledged as collateral for borrowings and other commitments. The remaining balance was available as additional liquidity or to be pledged as collateral for additional borrowings.

Approximately 98.6% of our time deposits mature within one year or less as of September 30, 2026. Given the current competitive environment for certificates of deposit and the rising interest rate environment, management anticipates that certain maturing time deposits may reprice at higher rates. Management also anticipates that a portion of these deposits may run off at maturity due to competitive pressures in the market where the Bank operates. However, based on our historical runoff experience, we expect such outflows will not be significant and can be replenished through normal deposit growth. As of September 30, 2026, management believes that the liquidity sources described above will provide adequate liquidity for the Bank to meet its operating needs over the next twelve months.

The business activities of Bancorp consist primarily of the operation of the Bank and limited activities in other investments. The Bank paid dividends to Bancorp totaling $250.0 million and $175.0 million during the third quarter of 2026 and 2025, respectively.

Critical Accounting Policies

Our most significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions are based on historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations.

For additional information regarding critical accounting estimates, see the section titled "Critical Accounting Policies" included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company's application of critical accounting estimates since December 31, 2025.