Cathay General Bancorp

Good afternoon, ladies and gentlemen, and welcome to Catholic General Bancorp's first quarter 2026 earnings conference call. My name is Asha and I'll 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 a coordinator will be happy to assist you. Today's call is being recorded and will be available for replay at www.KatharineGeneralBancorp.com. Now, I would like to turn the call over to Georgia Lowe, Investor Relations of Katharine General Bancorp. Please go ahead.

Thank you, Asha, and good afternoon. Here to discuss the financial results today are Mr. Chang Liu, our President and Chief Executive Officer of and Mr. Al Wang, our Executive Vice President and Chief Financial Officer. Before we begin, we wish to remind you that the speakers on this call may make forward-looking statements within 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 to differ materially. These results and uncertainties are further described in the company's annual report on Form 10-K for the year ended December 31, 2025, at Item 1A in particular, and in other reports and filings with the Security and Exchange Commission 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 on which it is made and 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 occurrence of unanticipated events. This afternoon, Cathay General Bancorp issued an earnings release outlining its first quarter 2026 results. To obtain a copy of our earnings release as well as our earnings presentation, please visit our website at cathaygeneralbancorp.com. After comments on management today, we will open up this call for questions. I will now turn the call over to our President and Chief Executive Officer, Mr. Chang Liu.

Thank you, Georgia. Good afternoon, and thank you for joining us today. I will begin on slide three. We delivered solid financial performance in the first quarter, reporting net income of 86.9 million and delivered earnings per share of the dollar and 29 cents. We also delivered another quarter of net interest margin expansion, driven by disciplined deposit cost management in a competitive environment. Our results reflected two noteworthy items that largely offset each other. The first was a 17.3 million valuation gain on equity securities, and the other was a 15.7 million impairment on AFS debt securities from balance sheet repositioning. We saw lower yielding securities and reinvested at current market rates, a move that supports margin expansion and accelerates tangible book value recovery. Excluding these items, diluted EPS would have been two cents lower. Credit quality was stable overall this quarter. We saw improvement in non-performing loans, and net chart drops, while criticized and classified levels remain steady, reflecting continued credit discipline across the portfolio. We remain focused on maintaining a prudent risk profile given the broader economic and geopolitical backdrop. We continue to generate positive operating leverage. Our efficiency ratio improved to 40.4%, down 100 basis points from the prior quarter, supported by ongoing expense management and steady core performance. On an adjusted basis, our efficiency ratio decreased by 1.5% to 36.9% from last quarter. Capital management remains a priority. During the quarter, we increased our quarterly cash dividend to 38 cents per share, reflecting an 11.8% increase. We also completed the 150 million share repurchase program announced in June 2025 by repurchasing 244,000 shares at an average cost of $51.31. In addition, our board approved the new $150 million share repurchase program, subject to regulatory approval, underscoring our commitment to returning capital to shareholders in a balanced and controlled way. Loan growth was softer than we anticipated, but this reflects our disciplined underwriting approach. Our focus remains on supporting our loyal customers and deepening longstanding relationships. Rather than pursuing volume that would require taking on additional credit risk in this unpredictable unpredictable economic environment. This relationship-driven strategy has served us well through many cycles and positions as well going forward. I will now turn the call over to Mr. Al Wang to walk through our first quarter results in more detail. I'll provide some closing comments before we open the call up to Q&A.