Core Viewpoint - The number of small and medium-sized banks withdrawing their IPO applications is increasing, reflecting a strategic adjustment in response to the current regulatory and market environment [1][3][4]. Group 1: IPO Withdrawal Trends - Six small and medium-sized banks have withdrawn their IPO applications since the transition to the registration system in March 2023, including Guangzhou Bank and Shunde Rural Commercial Bank [1][3]. - The number of banks still in the IPO queue has decreased to five, with only one bank in the "inquired" status [2]. Group 2: Market Conditions and Regulatory Environment - The banking sector has entered a prolonged "window period" for A-share IPOs, with no new listings since January 2022 [2]. - The China Securities Regulatory Commission (CSRC) has indicated a "phased tightening" of the IPO pace, prioritizing technology companies over traditional banks for financing [3]. Group 3: Financial Performance and Strategic Adjustments - The banking industry is facing a low interest rate, low spread, and low profitability environment, with the net interest margin dropping to 1.43% in Q1 2023 [4]. - Banks are encouraged to enhance corporate governance and adopt differentiated operations based on regional economic characteristics to improve stability and performance [4][5]. Group 4: Future Outlook - The withdrawal of IPO applications is seen as a strategic adjustment rather than a complete exit from the capital market, with banks planning to resume their IPO efforts when market conditions improve [5].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported a net loss of $123.3 million or $6.54 per share, compared to a net loss of $7.3 million or $0.39 per share in Q3 2024 [4] - On a core basis, the net loss was $5.1 million or $0.27 per share, an improvement from a net loss of $6 million or $0.32 per share in Q3 2024 [4][5] - The net interest income increased by $1 million from Q3 2024, with a net interest margin rising from 1.33% to 1.38% [6][7] Business Line Data and Key Metrics Changes - Non-interest income decreased in Q4 2024 primarily due to an $88.8 million loss on the sale of multifamily loans [9] - Non-interest expenses were reduced by $5.2 million in Q4 2024, attributed to a decrease in compensation benefits and general administrative expenses [9][10] Market Data and Key Metrics Changes - The ratio of non-performing assets to total assets was 71 basis points as of December 31, 2024, with total loans delinquent over 30 days at 106 basis points [9] - The company experienced a $15 million increase in non-accrual loans during Q4, mainly related to a syndicated commercial loan [9][15] Company Strategy and Development Direction - Following the termination of a merger, the company adopted a new strategic plan, including the sale of $990 million in multifamily loans to improve liquidity and reduce commercial real estate concentrations [12][13] - The company anticipates returning to profitability in the first half of the year, driven by loan repricing and effective management of non-interest expenses [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to profitability early in the year, contingent on stable interest rates and effective credit management [19][20] - The company noted that its deposits have shown resilience despite external pressures, maintaining a low level of uninsured deposits at 9% of total deposits [14][15] Other Important Information - The tangible book value per share decreased to $20.67 as of year-end, influenced by the loss on the loan sale and tax impacts [15][16] - The company has significant exposure to commercial real estate, particularly in areas affected by wildfires, but has current insurance coverage for impacted properties [17] Q&A Session Summary Question: What is the expected trajectory for NIM and breakeven levels? - Management does not have a specific targeted number but expects a positive impact on earnings from the loan sale and debt retirement [22][24] Question: Are there any other strategic initiatives needed for profitability? - The strategy is straightforward, focusing on working with commercial real estate borrowers to improve yields [25] Question: What is the current spot rate on deposits? - As of December 31, the spot rate for all deposits was 2.65%, with plans to reduce broker deposits further [30][31] Question: What is the appetite for more originate-to-sale business? - The appetite is large but tempered by current market conditions and borrower activity [45] Question: Can more be done to lower non-interest expenses? - Management believes they are close to the limit of what can be done, with some potential for slight decreases in certain areas [47][50]