Financial Data and Key Metrics Changes - The company reported a GAAP loss per share of $0.29 and core earnings per share of $0.23, with a significant non-cash goodwill impairment charge of $17.6 million or $0.51 per share impacting GAAP results [6][32] - GAAP and core net interest margins (NIM) expanded to 2.51% and 2.49% respectively, marking increases of 12 and 24 basis points quarter over quarter [9][32] - Average deposits increased by 7% year over year and about 1% quarter over quarter, with the loan to deposit ratio improving to 87% from 94% a year ago [11][32] Business Line Data and Key Metrics Changes - The company is focused on improving profitability through net interest margin expansion, particularly from real estate loans that are contractually set to reprice higher [8][10] - Approximately $511 million of loans are due to reprice 171 basis points higher in 2025, with expectations of generating $9 million in interest income for 2025 and $13 million for 2026 from these repricings [14][15] Market Data and Key Metrics Changes - The Asian markets account for about one-third of the company's branches, with $1.3 billion in deposits and $738 million in loans, indicating a 3% market share in a $40 billion market, suggesting significant growth potential [25][26] - The spread between the five-year FHLB advance and the three-month SOFR rate turned negative during the quarter, which may impact future net interest margins [26][27] Company Strategy and Development Direction - The company aims to enhance profitability, maintain credit discipline, and preserve strong liquidity and capital, with a focus on contractual loan repricing to drive net interest margin expansion [6][32] - The company plans to expand its branch network in Asian markets, leveraging its multilingual staff and community engagement to capture growth opportunities [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted that while the economic outlook has become uncertain, the company remains focused on controllable factors and investing in business initiatives to drive future profitability [29][32] - The company expects stable assets for the year, with loan growth being market-dependent and a continued emphasis on improving the mix of interest-earning assets and liabilities [30][32] Other Important Information - The allowance for credit losses is stable at 59 basis points of loans, with criticized loans to total loans at a low 133 basis points, reflecting a conservative underwriting approach [19][32] - Non-interest income is expected to benefit from the closing of back-to-back swap loans and a BOLI exchange, while non-interest expenses are projected to increase by 5% to 8% in 2025 [31][32] Q&A Session Summary Question: Can you provide insight on the adjustments that offset seasonal expenses? - Management indicated that adjustments were made based on year-end accruals that needed to be trued up as the new year began [38] Question: What is the status of the multifamily uptick in non-performing loans (NPLs)? - Management explained that the multifamily loan issue involves a relationship with three loans at an LTV of about 43%, and they are working to resolve it [40][44] Question: How is the Asian community managing through the tariff situation? - Management stated that there is no direct exposure to trade financing and that the community is expected to remain stable despite potential price increases [60][61] Question: What is the outlook for the SBA pipeline and gain on sale income? - Management noted that they do not provide guidance on gain on sale income but mentioned activity in real estate-based lending with premiums on sale around 7% [67]

Financial Data and Key Metrics Changes - Net interest income increased by more than 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the first quarter was $16,900,000, with diluted EPS at $0.81, reflecting improved net interest income and effective non-interest expense management [15] - The efficiency ratio was 59%, consistent with the full-year target of below 60% [5] - Annualized return on average assets was 110 basis points, while return on average equity was 11.82% [5] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by both commercial and industrial (C&I) and commercial real estate (CRE) lending [6] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [8] - Consumer indirect lending balances were up just shy of 1% from December 31, but down 7% year over year [10] - Residential lending decreased by 1% from both the linked and year-ago quarters due to high competition and tight housing inventory [12] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by seasonally higher public deposit balances and an increase in brokered deposits [12] - Cash-related deposits totaled approximately $55,000,000 as of March 31, 2025, with expectations for a portion to remain on the balance sheet into the third quarter [13] Company Strategy and Development Direction - The company is focused on maintaining momentum from its capital raise and investment securities restructuring to deliver strong results and profitability throughout 2025 [5] - A new executive was welcomed to the team to enhance customer growth and service excellence across the retail network [25] - The company intends to remain disciplined in credit extension and management amid a challenging economic environment [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan growth, indicating that uncertainty in the economic landscape may lead to a pause in anticipated investments by customers [30] - The company maintains a low single-digit growth guidance for 2025, reflecting a conservative approach given inflationary pressures and economic uncertainty [8] - Management reiterated a commitment to effective expense management while investing in people, processes, and technology for future growth [20] Other Important Information - The company expects non-interest income to be between $10,000,000 to $10,500,000 per quarter for 2025, an increase from previous guidance [18] - The provision for credit losses was $2,900,000 in the current quarter, down from $6,500,000 in the linked quarter [21] Q&A Session Summary Question: Loan growth outlook and conservativeness - Management is comfortable with their guidance, noting that uncertainty has led customers to pause investments [30] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with about $500,000,000 of CDs maturing in the next nine months [33][34] Question: COLI expected income over the next quarters - COLI income is expected to be elevated in Q2 and then normalize, but at a higher level than previous quarters [40][42] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [43]