iSeries Stored Proc returns EBCIDIC on case statement

When I run a store proc with a case statement it returns the result as EBCIDIC. When I run the same statement in iSeries Navigator the case statement returns the correct characters, not EBCIDIC.

Here is the SQL statement:
    SELECT  CASE
        CL.CSTAT WHEN 'O' THEN 'Open'
        WHEN 'R' THEN 'Reopen'
        WHEN 'S' THEN 'Suspend'
        WHEN 'C' THEN 'Complete'
        WHEN 'I' THEN 'Incomplete'
      ELSE 'UnKNOWN' END AS CSTAT
FROM SQBDCAPP.B99FL042 AS PR    
INNER JOIN SQBDCAPP.B97FL01B AS CL
     ON PR.RPOLST = CL.CPOLST
    AND PR.RPOLNO = CL.CPOLNO
    AND PR.RPOLCD = CL.CPOLCD
    AND PR.RPOLOC = CL.CPOLOC      
WHERE ( '7777777' IS NULL OR PR.RAGTNO =  '7777777'  )
  AND ( '39' IS NULL OR PR.RPOLST = '39' )
  AND ( '5500048310' IS NULL OR PR.RPOLNO = '5500048310' )  
The above statement returns:
CSTAT
Open
Reopen
Complete


Here is the stored proc:
CREATE PROCEDURE SQBDCOBJ/LOSSRUN2B (                        
   IN @AGENTID INTEGER ,                                      
   IN @STATE VARCHAR(2) ,                                    
   IN @POLNO VARCHAR(10) )                                    
   DYNAMIC RESULT SETS 1                                      
   LANGUAGE SQL                                              
   SPECIFIC SQBDCOBJ/LOSSRUN2B                                
   NOT DETERMINISTIC                                          
   READS SQL DATA                                          
  BEGIN DECLARE C1 CURSOR FOR
    SELECT  CASE
        CL.CSTAT WHEN 'O' THEN 'Open'
        WHEN 'R' THEN 'Reopen'
        WHEN 'S' THEN 'Suspend'
        WHEN 'C' THEN 'Complete'
        WHEN 'I' THEN 'Incomplete'
      ELSE 'UnKNOWN' END AS CSTAT
FROM SQBDCAPP/B99FL042 AS PR    
INNER JOIN SQBDCAPP/B97FL01B AS CL
     ON PR.RPOLST = CL.CPOLST
    AND PR.RPOLNO = CL.CPOLNO
    AND PR.RPOLCD = CL.CPOLCD
    AND PR.RPOLOC = CL.CPOLOC      
WHERE PR.RAGTNO = @AGENTID
  AND PR.RPOLST = @STATE  
  AND PR.RPOLNO = @POLNO ;
    OPEN C1 ; SET RESULT SETS CURSOR C1 ;
  END  

When I run the above store proc: CALL SQBDCOBJ.LOSSRUN2B('7777777', '39', '5500048310')
it returns:
CSTAT
D6978595
D98596978595
C39694979385A385

Does anyone know why the stored proc returns EBCIDIC instead of characters? I am new to iSeries SQL programming so I may be missing something obvious to an old timer. Any assistance is greatly appreciated.

Thanks,

Robert T