Cathay General Bancorp

Good afternoon, ladies and gentlemen, and welcome to the Cathay General Bancorp's first quarter 2025 earnings conference call. My name is Rocco, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question and answer session. If you would like to participate in this portion of the call, please press star followed by one at any time during the conference. If assistance is needed at any time during the call, please press star followed by zero, and the coordinator will be happy to assist you.

Today's call is being recorded and will be available for replay at www.cafegeneralbankcorp.com. I would now like to turn the call over to Georgia Lowe. It's Mr. Lee, CEO of Cafe General Bank Corp. Please go ahead. Thank you, Rocco, and good afternoon. Here to discuss the financial results today are Mr. Chang Liu, our President and Chief Executive Officer, and Mr. Hang Chen, our Executive Vice President and Chief Financial Officer. Before we begin, we wish to remind you that the speaker on this call may make four looking statements with the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 concerning future results and events. and that these statements are subject to certain risks and uncertainties that could cause actual results that differ materially. These risks and uncertainties are further to describe in the company's annual report on Form 10-K for the year ended December 31st, 2024 at item 1A in particular. And in other reports and filings with securities and exchange conditions from time to time. As such, we caution you not to place undue reliance on such forward-looking statements. Any forward-looking statement speaks only as of the date of which it is made. Except as required by law, we undertake no obligation to update or review any forward-looking statements to reflect future circumstances, developments, or events, or the This afternoon, Texas General Bank Corp. issued an earnings release outlining its first quarter 21.5 results. To obtain a copy of our earnings release as well as our earnings presentation, please visit our website at www.cafegeneralbankcorp.com. After comments by management today, we will open this call out for questions. I will now turn the call over to our President and Chief Executive Officer, Mr. Chang Liu. Thank you, Georgia, and good afternoon. Before we discuss our 2025 first quarter earnings, I want to address the current tariffs between the U.S. and China. Based on our survey, customers have moved their sourcing away from China since 2018 to other countries, including some to Mexico. Our borrowers have told us that for the most part, they can move their sourcing to other countries or pause importing from China until the tariffs are more reasonable. We estimate that about 1.4% of total loans could be adversely impacted by the post tariffs.

We are closely monitoring the impact of the evolving tariff situation on our borrowers and our loan portfolio. This afternoon, we reported net income of 69.5 million for Q1 2025, a 13.3% decrease as compared to 80.2 million for Q4 2024. Earnings per share decreased 12.5% to 98 cents for Q1 2025 as compared to $1.12 in Q4 2024. During Q1 2025, we repurchased 876,906 shares of our common stock at an average cost of $46.83 per share for $41.1 million, completing our May 2024 $125 million stock repurchase program. In Q1 2025, total gross loans decreased $23 million or 0.5% annualized, primarily driven by decreases of $100 million in commercial loans and $65 million in residential loans, offset by increases of $127 million in CRE loans and $13 million in construction loans. Given the uncertainties in the economy, we have widened our 2025 loan growth guidance to 1% to 4% from the previous guidance of 3% to 4%. Slide 6 shows the percentage of loans in each major loan portfolio that are either at a fixed rate or hybrid loans