[10-Q] BayCom Corp Quarterly Earnings Report

Q: What was BayCom (BCML) Q3 2025 net income and EPS?

Net income was $5.0 million and EPS was $0.46 for the quarter ended September 30, 2025.

Q: How did BayCom’s net interest income change in Q3 2025?

Net interest income was $23.4 million , up from $22.9 million in the prior-year quarter.

Q: What were BayCom’s loans and deposits at September 30, 2025?

Loans, net, were $2.02 billion ; deposits were $2.23 billion .

Q: Did BayCom (BCML) change its debt structure in 2025?

Yes. The company repaid $64.7 million of subordinated debt during the nine months ended September 30, 2025.

Q: What happened to BayCom’s accumulated other comprehensive loss (AOCI)?

AOCI improved to $8.0 million loss from $13.0 million loss at December 31, 2024.

Q: How many BayCom shares were outstanding most recently?

There were 10,897,763 common shares outstanding as of November 3, 2025 .

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

BayCom Corp (BCML) reported Q3 2025 results. Net income was $5.0 million, or $0.46 per share, versus $6.0 million, or $0.54, a year ago. Net interest income rose to $23.4 million from $22.9 million, while the provision for credit losses increased to $3.0 million from $1.2 million.

For the first nine months, net income was $17.1 million and earnings per share were $1.55, matching last year’s per‑share level. Loans, net, grew to $2.02 billion from $1.93 billion at December 31, 2024, and the allowance for credit losses increased to $20.8 million from $17.9 million.

The balance sheet remained solid: deposits were $2.23 billion and shareholders’ equity rose to $334.3 million as accumulated other comprehensive loss improved to $8.0 million from $13.0 million. The company repaid $64.7 million of subordinated debt, contributing to lower leverage. Total assets were $2.60 billion, and there were 10,897,763 common shares outstanding as of November 3, 2025.

Insights

Stable earnings; higher reserves; meaningful debt paydown.

BayCom delivered Q3 2025 net income of $5.0M with net interest income edging up year over year. The higher provision for credit losses ($3.0M vs prior $1.2M) tempered bottom line results, consistent with prudent reserving as loans grew to $2.02B.

Capital and liquidity trends were constructive. Shareholders’ equity increased to $334.3M, aided by a reduction in accumulated other comprehensive loss to $8.0M. A notable event was the repayment of $64.7M of subordinated debt, which can lower future interest expense and simplify the liability stack.

Key dependencies include credit quality and funding costs. Actual impact on margins will reflect deposit pricing and loan yields through Q4 2025 and beyond, while the higher allowance ($20.8M) provides added cushion against potential losses.

11/07/2025 - 05:03 PM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2025

	or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number: 001-38483

BAYCOM CORP

(Exact name of registrant as specified in its charter)


California		37-1849111
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Ygnacio Valley Road, Suite 200, Walnut Creek, California		94596
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (925) 476-1800

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	BCML	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☒

Non-accelerated filer ☐	Smaller reporting company ☒

	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

As of November 3, 2025, there were 10,897,763 shares of the registrant’s common stock outstanding.

Table of Contents

BAYCOM CORP

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	2

ITEM 1. FINANCIAL STATEMENTS	2

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	59

ITEM 4. CONTROLS AND PROCEDURES	59

PART II — OTHER INFORMATION	61

ITEM 1. LEGAL PROCEEDINGS	61

ITEM 1A. RISK FACTORS	61

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	61

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	61

ITEM 4. MINE SAFETY DISCLOSURES	61

ITEM 5. OTHER INFORMATION	62

ITEM 6. EXHIBITS	62

SIGNATURES	63

In this document, “BayCom” refers to BayCom Corp, the “Bank” refers to United Business Bank, BayCom’s wholly-owned subsidiary, and the “Company,” “we,” “us,” and “our” refer to BayCom and the Bank collectively, unless the context otherwise requires.

Table of Contents

BAYCOM CORP

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements


	Condensed Consolidated Balance Sheets (unaudited)	3

	Condensed Consolidated Statements of Income (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income (unaudited)	5

	Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)	6

	Condensed Consolidated Statements of Cash Flows (unaudited)	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	10

Table of Contents

BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share data)

(unaudited)


	September 30,		December 31,
	2025		2024
ASSETS
Cash due from banks	$	21,731	$	23,138
Federal funds sold and interest-bearing balances in banks		206,715		340,894
Cash and cash equivalents		228,446		364,032
Time deposits in banks		—		249
Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $0 at both September 30, 2025 and December 31, 2024		187,774		193,328
Equity securities, at fair value		13,307		13,120
Federal Home Loan Bank ("FHLB") stock, at par		11,524		11,313
Federal Reserve Bank ("FRB") stock, at par		9,657		9,645
Loans held for sale		421		2,216
Loans, net of allowance for credit losses of $20,800 at September 30, 2025 and $17,900 at December 31, 2024		2,021,537		1,934,996
Premises and equipment, net		13,577		13,386
Core deposit intangible, net		1,945		2,693
Cash surrender value of bank owned life insurance ("BOLI") policies, net		24,162		23,591
Right-of-use assets ("ROU"), net		13,476		13,383
Goodwill		38,838		38,838
Interest receivable and other assets		39,123		43,718
Total assets	$	2,603,787	$	2,664,508

LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest and interest bearing deposits	$	2,228,052	$	2,234,009
Junior subordinated deferrable interest debentures, net		8,706		8,645
Subordinated debt, net		—		63,736
Salary continuation plan		4,991		4,737
Lease liabilities		14,494		14,383
Interest payable and other liabilities		13,275		14,632
Total liabilities		2,269,518		2,340,142
Commitments and contingencies (Note 17)

Shareholders' equity
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at both September 30, 2025 and December 31, 2024		—		—
Common stock, no par value; 100,000,000 shares authorized; 10,916,792 and 11,121,475 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		166,633		172,254
Additional paid in capital		287		287
Accumulated other comprehensive loss, net of tax		(7,962)		(13,006)
Retained earnings		175,311		164,831
Total shareholders’ equity		334,269		324,366
Total liabilities and shareholders’ equity	$	2,603,787	$	2,664,508

See Notes to Condensed Consolidated Financial Statements.

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BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for share and per share data)

(unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

Interest income:
Loans, including fees	$	29,220	$	26,232	$	84,331	$	76,503
Investment securities		2,315		2,393		7,175		6,530
Fed funds sold and interest-bearing balances in banks		3,017		4,414		8,359		13,348
FHLB dividends		253		243		750		762
FRB dividends		145		144		434		433
Total interest and dividend income		34,950		33,426		101,049		97,576
Interest expense:
Deposits		9,777		9,448		27,669		26,677
Subordinated debt		1,571		892		3,354		2,676
Junior subordinated deferrable interest debentures		193		221		577		656
Total interest expense		11,541		10,561		31,600		30,009
Net interest income		23,409		22,865		69,449		67,567
Provision for credit losses		2,973		1,245		3,818		1,668
Net interest income after provision for credit losses		20,436		21,620		65,631		65,899
Noninterest income:
Gain on sale of loans		—		—		251		287
Gain on equity securities		771		1,420		523		1,672
Service charges and other fees		825		898		2,683		2,471
Loan servicing and other loan fees		403		324		1,308		1,157
Loss on investment in Small Business Investment Company (“SBIC”) fund		(29)		(253)		(365)		(212)
Other income and fees		278		356		801		915
Total noninterest income		2,248		2,745		5,201		6,290
Noninterest expense:
Salaries and employee benefits		10,168		9,569		29,831		29,247
Occupancy and equipment		2,143		2,209		6,462		6,496
Data processing		2,038		1,973		5,804		5,376
Other expense		1,597		2,323		5,592		7,038
Total noninterest expense		15,946		16,074		47,689		48,157
Income before provision for income taxes		6,738		8,291		23,143		24,032
Provision for income taxes		1,731		2,274		6,070		6,538
Net income	$	5,007	$	6,017	$	17,073	$	17,494
Earnings per common share:
Basic earnings per common share	$	0.46	$	0.54	$	1.55	$	1.55
Weighted average common shares outstanding		10,929,779		11,148,482		11,022,179		11,308,901

Diluted earnings per common share	$	0.46	$	0.54	$	1.55	$	1.55
Weighted average common shares outstanding		10,929,779		11,148,482		11,022,179		11,308,901

See Notes to Condensed Consolidated Financial Statements.

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BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)


		Three months ended			Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

Net income	$	5,007	$	6,017	$	17,073	$	17,494
Other comprehensive income:
Change in unrealized gain on AFS securities		3,296		3,414		7,328		4,820
Deferred tax expense		(1,136)		(980)		(2,284)		(1,396)
Other comprehensive income, net of tax		2,160		2,434		5,044		3,424
Total comprehensive income	$	7,167	$	8,451	$	22,117	$	20,918

See Notes to Condensed Consolidated Financial Statements.

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BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except for share and per share data)

(unaudited)


						Accumulated
		Common		Additional		Other				Total
	Number of	Stock		Paid in		Comprehensive		Retained		Shareholders’
	Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
Three months ended September 30, 2025
Balance, July 1, 2025	10,941,232	$	167,369	$	287	$	(10,122)	$	173,028	$	330,562
Net income									5,007		5,007
Other comprehensive income, net							2,160				2,160
Restricted stock granted	8,860										—
Forfeiture of restricted stock grants											—
Cash dividends of $0.25 per share									(2,724)		(2,724)
Stock based compensation			173								173
Repurchase of shares	(33,300)		(909)								(909)
Balance, September 30, 2025	10,916,792	$	166,633	$	287	$	(7,962)	$	175,311	$	334,269

Three months ended September 30, 2024
Balance, July 1, 2024	11,172,323	$	173,108	$	287	$	(13,602)	$	155,472	$	315,265
Net income									6,017		6,017
Other comprehensive income, net							2,434				2,434
Restricted stock granted	9,289										—
Cash dividends of $0.10 per share									(1,110)		(1,110)
Stock based compensation			159								159
Repurchase of shares	(51,240)		(1,084)								(1,084)
Balance, September 30, 2024	11,130,372	$	172,183	$	287	$	(11,168)	$	160,379	$	321,681

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						Accumulated
		Common		Additional		Other				Total
	Number of	Stock		Paid in		Comprehensive		Retained		Shareholders’
	Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
Nine months ended September 30, 2025
Balance, January 1, 2025	11,121,475	$	172,254	$	287	$	(13,006)	$	164,831	$	324,366
Net income									17,073		17,073
Other comprehensive income, net							5,044				5,044
Restricted stock granted	31,081										—
Forfeiture of restricted stock granted	(3,221)										—
Cash dividends of $0.60 per share									(6,593)		(6,593)
Stock based compensation			475								475
Repurchase of shares	(232,543)		(6,096)								(6,096)
Balance, September 30, 2025	10,916,792	$	166,633	$	287	$	(7,962)	$	175,311	$	334,269

Nine months ended September 30, 2024
Balance, January 1, 2024	11,551,271	$	180,913	$	287	$	(14,592)	$	146,261	$	312,869
Net income									17,494		17,494
Other comprehensive income, net							3,424				3,424
Restricted stock granted	33,760										—
Forfeiture of restricted stock granted	(505)										—
Cash dividends of $0.30 per share									(3,376)		(3,376)
Stock based compensation			483								483
Repurchase of shares	(454,154)		(9,213)								(9,213)
Balance, September 30, 2024	11,130,372	$	172,183	$	287	$	(11,168)	$	160,379	$	321,681

See Notes to Condensed Consolidated Financial Statements.

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BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Nine months ended
	September 30,
	2025		2024

Cash flows from operating activities:
Net income	$	17,073	$	17,494
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		3,818		1,668
Deferred tax expense		1,495		3,409
Amortization (accretion) on acquired loans		180		(95)
Gain on sale of loans		(251)		(287)
Proceeds from sale of loans originated for sale		4,496		4,749
Loans originated for sale		(3,372)		(3,562)
Accretion on junior subordinated debentures		61		60
Gain on repayment of subordinated debt, net		—		(34)
Increase in cash surrender value of life insurance policies		(571)		(542)
Amortization/accretion of premiums/discounts on investment securities, net		95		18
Gain on equity securities		(523)		(1,672)
Depreciation and amortization		2,460		1,537
Core deposit intangible amortization		748		916
Stock based compensation expense		475		483
Decrease in deferred loan origination fees, net		(505)		(128)
Net change in interest receivable and other assets		1,011		(7)
Increase in salary continuation plan, net		254		145
Net change in interest payable and other liabilities		(3,951)		(1,783)
Net cash provided by operating activities		22,993		22,369
Cash flows from investing activities:
Proceeds from maturities of interest bearing deposits in banks		249		747
Purchase of investment securities AFS		(11,569)		(39,020)
Proceeds from maturities, repayments and calls of investment securities AFS		24,692		13,140
Purchase of FHLB stock		(211)		—
Purchase of FRB stock		(12)		(14)
Proceeds from sale of loans		—		6,837
Purchase of loans		(24,633)		(64,432)
(Increase) decrease in loans, net		(64,479)		65,032
Purchase of equipment and leasehold improvements, net		(2,008)		(1,643)
Net cash used in investing activities		(77,971)		(19,353)

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BAYCOM CORP AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – (continued)

(In thousands)

(unaudited)


	Nine months ended
	September 30,
	2025		2024

Cash flows from financing activities:
Decrease in noninterest and interest bearing deposits in banks, net		(16,767)		(8,900)
Increase in time deposits, net		10,810		12,591
Repayment of subordinated debt, net		(64,685)		(315)
Repurchase of common stock		(6,096)		(9,213)
Dividends paid on common stock		(3,870)		(3,434)
Net cash used in financing activities		(80,608)		(9,271)
Decrease in cash and cash equivalents		(135,586)		(6,255)
Cash and cash equivalents at beginning of period		364,032		307,539
Cash and cash equivalents at end of period	$	228,446	$	301,284

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest expense	$	32,287	$	30,096
Income taxes paid, net		6,473		5,317


Non-cash investing and financing activities:
Change in unrealized gain on AFS securities, net of tax	$	5,044	$	3,424
Transfer of loans to held-for-sale		697		2,252
Recognition of ROU assets in exchange for lease obligations		2,701		1,629
Cash dividends declared on common stock not yet paid		(2,724)		(1,110)

See Notes to Condensed Consolidated Financial Statements.

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NOTE 1 – BASIS OF PRESENTATION

BayCom Corp (the “Company”) is a bank holding company headquartered in Walnut Creek, California. United Business Bank (the “Bank”), the Company’s wholly owned banking subsidiary, is a California state-chartered bank which provides a broad range of financial services primarily to local small and mid-sized businesses, service professionals and individuals. In its 20 years of operation, the Bank has grown to 34 full-service banking branches at September 30, 2025, with 16 locations in California, one in Nevada, one in Washington, five in New Mexico and 11 in Colorado. The condensed consolidated financial statements include the accounts of the Company and the Bank.

All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements include all adjustments of a normal and recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. Dollar amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in annual financial statements prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for interim periods are not necessarily indicative of results for the full year. Certain prior year information has been reclassified to conform to the current year presentation. None of the reclassifications impacted consolidated net income, earnings per share or shareholders’ equity.

NOTE 2 - ACCOUNTING GUIDANCE NOT YET EFFECTIVE AND ADOPTED ACCOUNTING GUIDANCE

Accounting Guidance Recently Adopted

Segment Reporting – Improvements to Reportable Segment Disclosures (Topic 280) – In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, enhanced interim disclosure requirements, clarifying circumstances in which an entity can disclose multiple segment measures of profit or loss, providing new segment disclosure requirements for entities with a single reportable segment, and requiring other disclosures. The amendments are effective for annual reporting periods beginning after December 15, 2023 (i.e., starting with the Company’s 2024 Form 10-K) and interim periods within fiscal years beginning after December 31, 2024, and must be applied retrospectively to all prior periods presented in the financial statements. The disclosure requirements of this update did not have a material effect on the Company’s consolidated financial statements. See Note 18—Segment Information.

Recent Accounting Guidance Not Yet Effective

Income Taxes – Improvements to Income Tax Disclosures (Topic 740) –In December 2023, the FASB issued ASU 2023-09 to provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold. The amendments also require that entities disclose on an annual basis: 1) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received). The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effect on the Company’s consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01 to clarify how entities should determine whether profits interest and similar awards granted in exchanges for services fall within the scope of Topic 718, Compensation – Stock

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Compensation, or Topic 710, Compensation – General. The amendments include illustrative examples to assist entities in evaluating the substance of such awards and determining the appropriate accounting treatment. The amendments are effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the accounting and disclosure requirements of this update and does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220) – Reporting Comprehensive Income – Expense Disaggregation Disclosures, to address investor requests for more detailed information about certain expense types. The new standard requires public business entities to disclose disaggregated information about specific natural expense categories underlying relevant expense captions presented on the face of the income statement within continuing operations, such as employee compensation, depreciation, and intangible asset amortization. The amendments are effective for public business entities for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Entities are required to adopt the amendments prospectively. In January 2025, the FASB issued ASU 2025-01, Income Statement (Topic 220) – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Clarifying the Effective Date, to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05 to simplify the estimation of expected credit losses for current accounts receivable and contract assets arising from revenue transaction within the scope of Topic 606, Revenue from Contracts with Customers. The amendments introduce a practical expedient that allows entities to assume that conditions existing as of the balance sheet date remain unchanged over the remaining life of the asset, and for entities other than public business entities, permit the use of subsequent cash collections when estimating credit losses. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim periods within those annual periods. Early adoption is permitted. The amendments should be applied prospectively. The Company is currently evaluating the accounting and disclosure requirements of this update and does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

NOTE 3 – INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities AFS at the dates indicated are summarized as follows:


			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
September 30, 2025
U.S. Government Agencies	$	1,738	$	—	$	(7)	$	1,731
Municipal securities		25,219		166		(911)		24,474
Mortgage-backed securities		49,541		315		(2,752)		47,104
Collateralized mortgage obligations		47,862		210		(1,480)		46,592
SBA securities		3,177		6		(53)		3,130
Corporate bonds		71,094		63		(6,414)		64,743
Total	$	198,631	$	760	$	(11,617)	$	187,774

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			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
December 31, 2024
U.S. Government Agencies	$	1,949	$	—	$	(12)	$	1,937
Municipal securities		23,777		82		(1,334)		22,525
Mortgage-backed securities		51,281		95		(3,893)		47,483
Collateralized mortgage obligations		49,220		147		(2,208)		47,159
SBA securities		4,054		6		(75)		3,985
Corporate bonds		81,232		29		(11,022)		70,239
Total	$	211,513	$	359	$	(18,544)	$	193,328

No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position at both September 30, 2025 and December 31, 2024.

Amortized cost and fair values exclude accrued interest receivable of $1.5 million at September 30, 2025 and $1.3 million at December 31, 2024, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three and nine months ended September 30, 2025 and 2024, the Company sold no securities AFS.

The amortized cost and estimated fair value of securities AFS at the dates indicated by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	September 30, 2025				December 31, 2024
	Amortized		Estimated		Amortized		Estimated
	cost		fair value		cost		fair value

Securities AFS
Due in one year or less	$	2,059	$	2,058	$	2,002	$	1,993
Due after one through five years		18,242		16,809		37,763		33,467
Due after five years through ten years		88,868		81,798		84,002		74,018
Due after ten years		89,462		87,109		87,746		83,850
Total	$	198,631	$	187,774	$	211,513	$	193,328

At both September 30, 2025 and December 31, 2024, there were no securities pledged.

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The estimated fair value and gross unrealized losses for securities AFS aggregated by the length of time that individual securities have been in a continuous unrealized loss position at the dates indicated are as follows:


	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		loss		fair value		loss		fair value		loss
September 30, 2025
U.S. Government Agencies	$	911	$	(3)	$	820	$	(4)	$	1,731	$	(7)
Municipal securities		2,064		(138)		12,087		(773)		14,151		(911)
Mortgage-backed securities		1,582		(19)		25,336		(2,733)		26,918		(2,752)
Collateralized mortgage obligations		12,266		(52)		20,932		(1,428)		33,198		(1,480)
SBA securities		1,734		(12)		852		(41)		2,586		(53)
Corporate bonds		1,739		(11)		62,097		(6,403)		63,836		(6,414)
Total	$	20,296	$	(235)	$	122,124	$	(11,382)	$	142,420	$	(11,617)


	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		loss		fair value		loss		fair value		loss
December 31, 2024
U.S. Government Agencies	$	1,938	$	(12)	$	—	$	—	$	1,938	$	(12)
Municipal securities		5,135		(67)		13,333		(1,267)		18,468		(1,334)
Mortgage-backed securities		16,514		(321)		22,257		(3,572)		38,771		(3,893)
Collateralized mortgage obligations		17,234		(145)		19,012		(2,063)		36,246		(2,208)
SBA securities		2,023		(9)		1,250		(66)		3,273		(75)
Corporate bonds		2,760		(240)		64,118		(10,782)		66,878		(11,022)
Total	$	45,604	$	(794)	$	119,970	$	(17,750)	$	165,574	$	(18,544)

At September 30, 2025, the Company held 337 securities AFS, of which 179 were in an unrealized loss position for more than twelve months and 22 were in an unrealized loss position for less than twelve months. At December 31, 2024, the Company held 352 investment securities, of which 212 were in an unrealized loss position for more than twelve months and 53 were in an unrealized loss position for less than twelve months. The Company anticipates full recovery of amortized cost with respect to these securities at maturity or sooner in the event of a more favorable market interest rate environment.

Allowance for credit losses on investment debt securities available-for-sale

Investment debt securities that were in an unrealized loss position as of September 30, 2025 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors. This assessment first includes a determination of whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. In making this assessment, management considers the nature of the security and any related government guarantees, any changes to the rating of the security by a rating agency, creditworthiness of the issuers/guarantors, the underlying collateral, the financial conditions and prospects of the issuer, and any adverse conditions specifically related to the security, among other factors.

As of September 30, 2025, the Company expects to recover the amortized cost basis of its securities, the Company has no present intent to sell any investment securities with unrealized losses, it is not more likely than not that we will be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers of these securities continue to make timely principal and interest payments. No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality at September 30, 2025.

Equity Securities

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The Company recognized a net gain on equity securities of $771,000 and $523,000 for the three and nine months ended September 30, 2025, compared to $1.4 million and $1.7 million for the three and nine months ended September 30, 2024, respectively. Equity securities were $13.3 million and $13.1 million as of September 30, 2025 and December 31, 2024, respectively.

NOTE 4 – LOANS

The Company’s loan portfolio at the dates indicated is summarized below:


	September 30,		December 31,
	2025		2024
Commercial and industrial	$	177,250	$	173,948
Construction and land		5,124		1,515
Commercial real estate		1,743,268		1,667,231
Residential		115,292		109,662
Consumer		749		391
Total loans		2,041,683		1,952,747
Net deferred loan costs		654		149
Allowance for credit losses		(20,800)		(17,900)
Net loans	$	2,021,537	$	1,934,996

Net loans exclude accrued interest receivable of $6.5 million and $6.7 million at September 30, 2025 and December 31, 2024, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

The Company’s total individually evaluated loans, including collateral dependent loans, nonaccrual loans, modified loans to borrowers experiencing financial difficulty, and accreting purchase credit deteriorated (“PCD”) loans that have experienced post-acquisition declines in cash flows expected to be collected are summarized as follows:


	Commercial		Construction		Commercial
	and industrial		and land		real estate		Residential		Consumer		Total
September 30, 2025
Recorded investment in loans individually evaluated:
With no specific allowance recorded	$	—	$	—	$	13,333	$	711	$	—	$	14,044
With a specific allowance recorded		—		—		4,711		—		—		4,711
Total recorded investment in loans individually evaluated	$	—	$	—	$	18,044	$	711	$	—	$	18,755
Specific allowance on loans individually evaluated	$	—	$	—	$	868	$	—	$	—	$	868

December 31, 2024
Recorded investment in loans individually evaluated:
With no specific allowance recorded	$	—	$	—	$	13,671	$	984	$	—	$	14,655
With a specific allowance recorded		954		—		1,754		—		—		2,708
Total recorded investment in loans individually evaluated	$	954	$	—	$	15,425	$	984	$	—	$	17,363
Specific allowance on loans individually evaluated	$	367	$	—	$	25	$	—	$	—	$	392

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The Company may modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness. An assessment of whether a borrower is experiencing financial difficulty is made on the date of modification. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses on loans because of the measurement methodologies used to estimate the allowance.

During the three and nine months ended September 30, 2025 and 2024, there were no modifications of loans to borrowers experiencing financial difficulty.

A summary of previously modified loans to borrowers experiencing financial difficulty by type of concession and type of loan, as of the dates indicated, is set forth below:


	Number of	Rate		Term		Rate & term				% of Total
	loans	modification		modification		modification		Total		loans outstanding
September 30, 2025
Commercial and industrial	2	$	—	$	91	$	—	$	91		0.05	%
Construction and land	—		—		—		—		—		—	%
Commercial real estate	2		—		632		—		632		0.04	%
Residential	1		—		710		—		710		0.62	%
Consumer	—		—		—		—		—		—	%
Total	5	$	—	$	1,433	$	—	$	1,433		0.07	%


	Number of	Rate		Term		Rate & term				% of Total
	loans	modification		modification		modification		Total		loans outstanding
December 31, 2024
Commercial and industrial	2	$	—	$	97	$	—	$	97		0.06	%
Construction and land	—		—		—		—		—		—	%
Commercial real estate	3		—		1,846		—		1,846		0.11	%
Residential	1		—		747		—		747		0.68	%
Consumer	—		—		—		—		—		—	%
Total	6	$	—	$	2,690	$	—	$	2,690		0.14	%

For the three and nine months ended September 30, 2025, the Company recorded no charge-offs for modified loans to borrowers experiencing financial difficulty. During the three and nine months ended September 30, 2024, the Company recorded no charge-offs and $1.3 million of charge-offs related to modified loans to borrowers experiencing financial difficulty, respectively.

As of September 30, 2025 and December 31, 2024, individually evaluated modified loans to borrowers experiencing financial difficulty had no related allowance and an allowance of $24,000, respectively. At both dates, none of the modified loans to borrowers experiencing financial difficulty were performing in accordance with their modified terms. All accruing modified loans to borrowers experiencing financial difficulty, if any, are included in the loans individually evaluated in the calculation of the allowance for credit losses.

Risk Rating System

The Company evaluates and assigns a risk grade to each loan based on certain criteria to assess the credit quality of the loan. The assignment of a risk rating is done for each individual loan. Loans are graded from inception and on a continuing basis until the debt is repaid. Any adverse or beneficial trends will trigger a review of the loan risk rating. Each loan is assigned a risk grade based on its characteristics. Loans with low to average credit risk are assigned a lower risk grade than those with higher credit risk as determined by the individual loan characteristics.

The Company’s Pass loans include loans with acceptable business or individual credit risk where the borrower’s operations, cash flow or financial condition provides evidence of low to average levels of risk.

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Loans that are assigned higher risk grades are loans that exhibit the following characteristics:

Special Mention loans have potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Special Mention is a temporary rating, pending the occurrence of an event that would cause the risk rating either to improve or to be downgraded.

Loans in this category would be characterized by any of the following situations:

●

Credit that is currently protected but is potentially a weak asset;

●

Credit that is difficult to manage because of an inadequate loan agreement, the condition of and/or control over collateral, failure to obtain proper documentation, or any other deviation from product lending practices; and

●

Adverse financial trends.

Substandard loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans classified substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. The potential loss does not have to be recognizable in an individual credit for that credit to be risk rated Substandard. A loan can be fully and adequately secured and still be considered Substandard.

Some characteristics of Substandard loans are:

●

Inability to service debt from ordinary and recurring cash flow;

●

Chronic delinquency;

●

Reliance upon alternative sources of repayment;

●

Term loans that are granted on liberal terms because the borrower cannot service normal payments for that type of debt;

●

Repayment dependent upon the liquidation of collateral;

●

Inability to perform as agreed, but adequately protected by collateral;

●

Necessity to renegotiate payments to a non-standard level to ensure performance; and

●

The borrower is bankrupt, or for any other reason, future repayment is dependent on court action.

Doubtful loans have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and value, highly questionable and improbable. Doubtful loans have a high probability of loss, yet certain important and reasonably specific pending factors may work toward the strengthening of the credit.

Losses are recognized as charges to the allowance when the loan or portion of the loan is considered uncollectible or at the time of foreclosure. Recoveries on loans previously charged off are credited to the allowance for credit losses.

Revolving loans that are converted to term loans are treated as new originations in the tables below and are presented by year of initial origination. During the nine months ended September 30, 2025, and the year ended December 31, 2024, none and $867,000, respectively, of the Company’s revolving loans were converted to term loans.

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The following tables present the internally assigned risk grade by class of loans at the dates indicated:


													Revolving
		Term loans - amortized cost by origination year											loans
	2025		2024		2023		2022		2021		Prior		amortized cost		Total
September 30, 2025
Commercial and industrial:
Pass	$	29,078	$	51,084	$	15,667	$	17,741	$	7,973	$	29,228	$	23,984	$	174,755
Special mention		—		—		—		—		—		1,122		—		1,122
Substandard		—		—		154		—		55		878		286		1,373
Total commercial and industrial	$	29,078	$	51,084	$	15,821	$	17,741	$	8,028	$	31,228	$	24,270	$	177,250
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	193	$	—	$	193
Construction and land:
Pass	$	—	$	4,742	$	—	$	—	$	119	$	263	$	—	$	5,124
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total construction and land	$	—	$	4,742	$	—	$	—	$	119	$	263	$	—	$	5,124
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	247,443	$	182,898	$	69,954	$	323,265	$	350,993	$	413,211	$	1,866	$	1,589,630
Special mention		—		—		—		31,570		18,793		51,389		—		101,752
Substandard		—		—		5,463		—		14,724		31,699		—		51,886
Total commercial real estate	$	247,443	$	182,898	$	75,417	$	354,835	$	384,510	$	496,299	$	1,866	$	1,743,268
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	839	$	—	$	839
Residential:
Pass	$	44,227	$	26,603	$	—	$	—	$	32,089	$	6,795	$	4,711	$	114,425
Special mention		—		—		—		—		—		—		13		13
Substandard		—		—		—		—		44		746		64		854
Total residential	$	44,227	$	26,603	$	—	$	—	$	32,133	$	7,541	$	4,788	$	115,292
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	1
Consumer:
Pass	$	316	$	129	$	28	$	21	$	10	$	112	$	133	$	749
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total consumer	$	316	$	129	$	28	$	21	$	10	$	112	$	133	$	749
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	7
Total loans outstanding
Risk ratings
Pass	$	321,064	$	265,456	$	85,649	$	341,027	$	391,184	$	449,609	$	30,694	$	1,884,683
Special mention		—		—		—		31,570		18,793		52,511		13		102,887
Substandard		—		—		5,617		—		14,823		33,323		350		54,113
Total loans outstanding	$	321,064	$	265,456	$	91,266	$	372,597	$	424,800	$	535,443	$	31,057	$	2,041,683
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1,040	$	—	$	1,040

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													Revolving
		Term loans - amortized cost by origination year											loans
	2024		2023		2022		2021		2020		Prior		amortized cost		Total
December 31, 2024
Commercial and industrial:
Pass	$	54,720	$	20,314	$	20,759	$	11,823	$	13,433	$	28,708	$	19,699	$	169,456
Special mention		—		—		—		56		—		1,969		200		2,225
Substandard		150		154		—		—		1,184		471		308		2,267
Total commercial and industrial	$	54,870	$	20,468	$	20,759	$	11,879	$	14,617	$	31,148	$	20,207	$	173,948
YTD gross charge-offs	$	—	$	—	$	—	$	1,021	$	45	$	324	$	—	$	1,390
Construction and land:
Pass	$	10	$	—	$	—	$	128	$	1,090	$	287	$	—	$	1,515
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total construction and land	$	10	$	—	$	—	$	128	$	1,090	$	287	$	—	$	1,515
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	196,303	$	88,599	$	371,319	$	432,629	$	97,046	$	370,828	$	1,510	$	1,558,234
Special mention		—		632		6,243		10,462		18,250		44,089		—		79,676
Substandard		—		—		—		9,063		996		19,262		—		29,321
Total commercial real estate	$	196,303	$	89,231	$	377,562	$	452,154	$	116,292	$	434,179	$	1,510	$	1,667,231
YTD gross charge-offs	$	—	$	—	$	—	$	2,413	$	—	$	1,359	$	—	$	3,772
Residential:
Pass	$	31,828	$	—	$	—	$	36,624	$	1,452	$	32,245	$	5,041	$	107,190
Special mention		—		—		—		859		—		410		80		1,349
Substandard		—		—		—		30		—		1,093		—		1,123
Total residential	$	31,828	$	—	$	—	$	37,513	$	1,452	$	33,748	$	5,121	$	109,662
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Pass	$	153	$	54	$	35	$	10	$	2	$	128	$	3	$	385
Special mention		—		—		—		—		—		2		—		2
Substandard		—		—		—		—		—		4		—		4
Total consumer	$	153	$	54	$	35	$	10	$	2	$	134	$	3	$	391
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2	$	1	$	3
Total loans outstanding
Risk ratings
Pass	$	283,014	$	108,967	$	392,113	$	481,214	$	113,023	$	432,196	$	26,253	$	1,836,780
Special mention		—		632		6,243		11,377		18,250		46,470		280		83,252
Substandard		150		154		—		9,093		2,180		20,830		308		32,715
Total loans outstanding	$	283,164	$	109,753	$	398,356	$	501,684	$	133,453	$	499,496	$	26,841	$	1,952,747
YTD gross charge-offs	$	—	$	—	$	—	$	3,434	$	45	$	1,685	$	1	$	5,165

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The following tables provide an aging of the Company’s loans receivable as of the dates indicated:


															Recorded
					90 Days										investments
	30–59 Days		60–89 Days		or more		Total						Total loans		90 days or more past due
	past due		past due		past due		past due		Current		PCD loans		receivable		and still accruing
September 30, 2025
Commercial and industrial	$	513	$	91	$	965	$	1,569	$	175,681	$	—	$	177,250	$	395
Construction and land		—		—		—		—		5,124		—		5,124		—
Commercial real estate		77		1,673		3,676		5,426		1,720,840		17,002		1,743,268		—
Residential		11		7		711		729		114,452		111		115,292		—
Consumer		—		—		—		—		749		—		749		—
Total	$	601	$	1,771	$	5,352	$	7,724	$	2,016,846	$	17,113	$	2,041,683	$	395


															Recorded
					90 Days										investments
	30–59 Days		60–89 Days		or more		Total						Total loans		90 days or more past due
	past due		past due		past due		past due		Current		PCD loans		receivable		and still accruing
December 31, 2024
Commercial and industrial	$	758	$	87	$	399	$	1,244	$	172,704	$	—	$	173,948	$	220
Construction and land		—		—		—		—		1,509		6		1,515		—
Commercial real estate		4,794		1,527		3,220		9,541		1,635,499		22,191		1,667,231		—
Residential		123		1		747		871		108,538		253		109,662		—
Consumer		6		—		—		6		385		—		391		—
Total	$	5,681	$	1,615	$	4,366	$	11,662	$	1,918,635	$	22,450	$	1,952,747	$	220

Nonaccrual loans totaled $13.5 million and $9.2 million at September 30, 2025 and December 31, 2024, respectively. Nonaccrual loans guaranteed by a government agency, which reduces the Company’s credit exposure, were $946,000 at September 30, 2025 compared to $2.0 million at December 31, 2024. At September 30, 2025, nonaccrual loans included $8,000 of loans 30-89 days past due and $8.4 million of loans less than 30 days past due. At December 31, 2024, nonaccrual loans included $643,000 of loans 30-89 days past due and no loans less than 30 days past due. The increase in nonaccrual loans reflects borrower-specific credit deterioration, primarily within the commercial and industrial and commercial real estate portfolios.

At September 30, 2025, the $8,000 nonaccrual loans 30-89 days past due was comprised of two loans and the $8.4 million of loans less than 30 days past due was comprised of 18 loans. All these loans were placed on nonaccrual due to concerns over the financial condition of the borrowers.

At September 30, 2025 and December 31, 2024, there were two loans and one loan 90 days or more past due and still accruing, with balances of $395,000 and $220,000 at those dates, respectively.

Interest foregone on nonaccrual loans was approximately $257,000 and $896,000 for the three and nine months ended September 30, 2025, compared to $397,000 and $1.1 million for the three and nine months ended September 30, 2024. Interest income recognized on nonaccrual loans was approximately $70,000 and $136,000 for the three and nine months ended September 30, 2025, compared to $7,400 and $93,600 for the three and nine months ended September 30, 2024, respectively.

Pledged Loans

Our FHLB line of credit is secured under terms of a blanket collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $1.06 billion and $1.04 billion at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025 and December 31, 2024, $79.7 million and $76.7 million of loans were pledged to

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the FRB of San Francisco, respectively. For additional information, see “Note 11 - Borrowings” of the Notes to Condensed Consolidated Financial Statements.

NOTE 5 – ALLOWANCE FOR CREDIT LOSSES FOR LOANS

The following tables summarize the Company’s allowance for credit losses for loans, reserve for unfunded commitments, and loan balances individually and collectively evaluated by type of loan, as of the dates and for the periods indicated:


	Commercial		Construction		Commercial								Reserve for
	and industrial		and land		real estate		Residential		Consumer		Total		unfunded commitments
Three months ended September 30, 2025
Allowance for credit losses
Beginning balance	$	4,467	$	141	$	12,327	$	1,761	$	4	$	18,700	$	530
Charge-offs		—		—		(839)		—		—		(839)		—
Recoveries		6		—		—		—		—		6		—
Provision for (reversal of) credit losses		(35)		134		2,541		291		2		2,933		40
Ending balance	$	4,438	$	275	$	14,029	$	2,052	$	6	$	20,800	$	570

Nine months ended September 30, 2025
Allowance for credit losses:
Beginning balance	$	4,681	$	72	$	11,365	$	1,780	$	2	$	17,900	$	600
Charge-offs		(193)		—		(839)		(1)		(7)		(1,040)		—
Recoveries		21		—		69		1		1		92		—
Provision for (reversal of) credit losses		(71)		203		3,434		272		10		3,848		(30)
Ending balance	$	4,438	$	275	$	14,029	$	2,052	$	6	$	20,800	$	570

September 30, 2025
Allowance for credit losses:
Loans individually evaluated	$	—	$	—	$	868	$	—	$	—	$	868
Loans collectively evaluated		4,438		275		12,940		2,051		6		19,710
PCD loans		—		—		221		1		—		222

Loans receivable:
Individually evaluated	$	—	$	—	$	18,044	$	711	$	—	$	18,755
Collectively evaluated		177,250		5,124		1,708,222		114,470		749		2,005,815
PCD loans		—		—		17,002		111		—		17,113
Total loans	$	177,250	$	5,124	$	1,743,268	$	115,292	$	749	$	2,041,683

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	Commercial		Construction		Commercial								Reserve for
	and industrial		and land		real estate		Residential		Consumer		Total		unfunded commitments
Three months ended September 30, 2024
Allowance for credit losses
Beginning balance	$	3,987	$	105	$	13,695	$	1,205	$	8	$	19,000	$	200
Charge-offs		(1,031)		—		(566)		—		(1)		(1,598)		—
Recoveries		53		—		—		—		—		53		—
Provision for (reversal of) credit losses		1,991		13		(1,670)		523		(2)		855		390
Ending balance	$	5,000	$	118	$	11,459	$	1,728	$	5	$	18,310	$	590

Nine months ended September 30, 2024
Allowance for loan losses
Beginning balance	$	4,216	$	298	$	16,498	$	979	$	9	$	22,000	$	225
Charge-offs		(1,387)		—		(3,772)		—		(2)		(5,161)		—
Recoveries		68		—		—		99		1		168		—
Provision for (reversal of) credit losses		2,103		(180)		(1,267)		650		(3)		1,303		365
Ending balance	$	5,000	$	118	$	11,459	$	1,728	$	5	$	18,310	$	590

September 30, 2024
Allowance for credit losses:
Loans individually evaluated	$	44	$	—	$	194	$	205	$	—	$	443
Loans collectively evaluated		4,929		118		10,942		1,519		5		17,513
PCD loans		27		—		323		4		—		354

Loans receivable:
Individually evaluated	$	1,191	$	—	$	15,582	$	1,279	$	—	$	18,052
Collectively evaluated		173,116		2,620		1,592,348		101,507		397		1,869,988
PCD loans		123		11		23,443		304		—		23,881
Total loans	$	174,430	$	2,631	$	1,631,373	$	103,090	$	397	$	1,911,921

For the three months ended September 30, 2025, the provision for credit losses primarily reflected an increase in the reserve for pooled loans and the replenishment of the allowance due to charge-offs. Net charge-offs were $833,000 for the third quarter of 2025, compared to $1.5 million for the same period in 2024.

For the nine months ended September 30, 2025, the provision for credit losses and the related change in the allowance for credit losses on loans were mainly driven by loan growth, an increase in the reserve for pooled loans, replenishment of the allowance during the period and, to a lesser extent, an increase in specific reserves on individually evaluated loans. The increase in the allowance for credit losses on pooled loans primarily reflected higher quantitative reserves resulting from the Company’s annual update to its CECL model methodology. This update incorporated more recent economic data and revised segment-specific peer group comparisons, which together contributed to a higher modeled reserve level. To a lesser extent, the increase also reflected a higher forecasted national unemployment rate, a weaker outlook for national gross domestic product, loan growth during the quarter, and changes in the risk level of one qualitative factor. Net charge-offs totaled $948,000 for the nine months ended September 30, 2025, compared to $5.0 million for the nine months ended September 30, 2024, of which $3.2 million had been specifically reserved for at December 31, 2023.

The following table summarizes the amortized cost basis of individually evaluated collateral-dependent loans, including nonaccrual loans, modified loans to borrowers experiencing financial difficulty, and accreting purchase credit deteriorated (“PCD”) loans that have experienced post-acquisition declines in cash flows expected to be collected, by loan and collateral type as of the dates indicated.

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	Retail and				Convalescent								A/R and
	Office		Multifamily		facility		Hotel		Other		SFR 1-4		Equipment		Total		ACL
September 30, 2025
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and land		—		—		—		—		—		—		—		—		—
Commercial real estate		3,707		—		—		12,747		1,590		—		—		18,044		868
Residential		—		—		—		—		—		711		—		711		—
Consumer		—		—		—		—		—		—		—		—		—
Total	$	3,707	$	—	$	—	$	12,747	$	1,590	$	711	$	—	$	18,755	$	868

December 31, 2024
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—	$	954	$	954	$	367
Construction and land		—		—		—		—		—		—		—		—		—
Commercial real estate		466		77		1,200		7,987		5,695		—		—		15,425		25
Residential		—		—		—		—		—		984		—		984		—
Consumer		—		—		—		—		—		—		—		—		—
Total	$	466	$	77	$	1,200	$	7,987	$	5,695	$	984	$	954	$	17,363	$	392

The following table shows the amortized cost and allowance for credit losses for loans on nonaccrual status as of the dates indicated:


	As of September 30, 2025						As of December 31, 2024
	Nonaccrual		Nonaccrual				Nonaccrual		Nonaccrual
	with no allowance		with allowance		Total		with no allowance		with allowance		Total
	for credit losses		for credit losses		nonaccrual		for credit losses		for credit losses		nonaccrual
Commercial and industrial	$	—	$	863	$	863	$	—	$	293	$	293
Construction and land		—		—		—		—		—		—
Commercial real estate		6,406		5,455		11,861		6,055		1,792		7,847
Residential		711		42		753		984		119		1,103
Consumer		—		—		—		—		4		4
Total	$	7,117	$	6,360	$	13,477	$	7,039	$	2,208	$	9,247

As part of its acquisition of Pacific Enterprise Bancorp (“PEB”) in 2022, the Company acquired certain small business loans to borrowers qualified under The California Capital Access Program for Small Business, a state guaranteed loan program sponsored by the California Pollution Control Financing Authority (“CalCAP”). PEB ceased originating loans under this loan program in 2017. Under this loan program, the borrower, CalCAP and the participating lender contributed funds to a loss reserve account held in a demand deposit account at the participating lender. The borrower’s contributions to the loss reserve account are attributed to the participating lender. Losses on qualified loans are charged to this account after approval by CalCAP. Under the program, if a loan defaults, the participating lender has immediate coverage of 100% of the loss. The participating lender must return recoveries from the borrower, less expenses, to the credit loss reserve account. The funds in the loss reserve account are the property of CalCAP; however, in the event that the participating lender leaves the program any excess funds, after all loans have been repaid or unenrolled from the program by the participating lender and provided there are no pending claims for reimbursement, the remaining excess funds are distributed to CalCAP and the participating lender based on their respective contributions to the loss reserve account. Funds contributed by the participating lender to the loss reserve account are treated as a receivable from CalCAP and evaluated for impairment quarterly. As of September 30, 2025 and December 31, 2024, the Company had $10.5 million and $17.7 million, respectively, of loans enrolled in this loan program. The Company had a loss reserve account of $7.0 million and $10.4 million as of September 30, 2025 and December 31, 2024, respectively.

In addition, as successor to PEB, the Company was approved by CalCAP, in partnership with the California Air Resources Board, to originate loans to California truckers in the On-Road Heavy-Duty Vehicle Air Quality Loan Program. Under this loan program, CalCAP solely contributes funds to a loss reserve account held in a demand deposit account at the participating lender. Losses are handled in the same manner as described above. The funds are the property of CalCAP and are payable upon termination of the program. When the loss reserve account balance exceeds

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the total associated loan balance, the excess is to be remitted to CalCAP. The Company originated loans under this program of $3.3 million and $12.1 million during the three and nine months ended September 30, 2025 and $3.9 million and $8.4 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, the Company had $21.7 million of loans enrolled in this program and a loss reserve account of $4.7 million. As of December 31, 2024, the Company had $17.3 million of loans enrolled in this program and a loss reserve account of $3.8 million.

NOTE 6 – PREMISES AND EQUIPMENT

Premises and equipment consisted of the following at the dates indicated:


	September 30,		December 31,
	2025		2024
Premises owned	$	11,553	$	11,462
Leasehold improvements		4,251		3,602
Furniture, fixtures and equipment		10,588		9,929
Less accumulated depreciation and amortization		(12,815)		(11,607)
Total premises and equipment, net	$	13,577	$	13,386

Depreciation and amortization included in occupancy and equipment expense totaled $493,000 and $1.4 million for the three and nine months ended September 30, 2025, and $528,000 and $1.5 million for the three and nine months ended September 30, 2024, respectively.

NOTE 7 – LEASES

The Company leased 19 branches under noncancelable operating leases as of September 30, 2025. These leases expire on various dates through 2030. Many of these lease agreements include one or more renewal options, exercisable at the Company’s discretion. When the Company determines at lease commencement that it is reasonably certain to exercise a renewal option, the extended lease term is included in the measurement of the ROU asset and corresponding lease liability.

The Company uses the discount rate implicit in the lease when it is readily determinable. In instances where the implicit rate is not available, which is typically the case, the Company applies its incremental borrowing rate, determined on a collateralized basis and over a term comparable to the lease term, as of the lease commencement date.

The below maturity schedule presents, as of September 30, 2025, the undiscounted lease payments for the next five years and thereafter:


For remainder of 2025	$	972
2026		3,751
2027		3,507
2028		3,444
2029		2,990
Thereafter		1,093
Total undiscounted cash flows		15,757
Less: interest		(1,263)
Present value of lease payments	$	14,494

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The following table presents the weighted average lease term and discount rate at the dates indicated:


	September 30, 2025		December 31, 2024
Weighted-average remaining lease term	4.3	years	4.5	years
Weighted-average discount rate	3.9	%	3.8	%

The following table presents certain information related to the operating lease costs included in occupancy and equipment expense on the Condensed Consolidated Statements of Income for the periods indicated:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Operating lease cost	$	945	$	8,093	$	3,028	$	15,082
Short-term lease cost		—		—		—		15
Less: Sublease income		(26)		(32)		(72)		(66)
Total operating lease cost, net	$	919	$	8,061	$	2,956	$	15,031

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS

Goodwill is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and the liabilities assumed as of the acquisition date. Goodwill and other intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible represents the estimated future benefit of deposits related to an acquisition and is booked separately from the related deposits and amortized over an estimated useful life of seven to ten years.

Goodwill

The Company’s policy is to assess goodwill for impairment at the reporting unit level on an annual basis or between annual assessments if a triggering event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Impairment exists when a reporting unit’s fair value is less than its carrying amount, including goodwill.

Changes in the Company's goodwill during the periods indicated were as follows:


	Nine months Ended		Year ended
	September 30, 2025		December 31, 2024
Balance at beginning of period	$	38,838	$	38,838
Acquired goodwill		—		—
Impairment		—		—
Balance at end of period	$	38,838	$	38,838

Core Deposit Intangible

Changes in the Company’s core deposit intangible during the periods indicated were as follows:


	Nine months Ended		Year ended
	September 30, 2025		December 31, 2024
Balance at beginning of period	$	2,693	$	3,915
Additions		—		—
Less amortization		(748)		(1,222)
Balance at end of period	$	1,945	$	2,693

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Estimated annual amortization expense at September 30, 2025 was as follows:


For remainder of 2025	$	313
2026		455
2027		455
2028		455
Thereafter		267
Total	$	1,945

NOTE 9 – INTEREST RECEIVABLE AND OTHER ASSETS

The Company’s interest receivable and other assets at the dates indicated consisted of the following:


	September 30,		December 31,
	2025		2024
Tax assets, net	$	14,610	$	16,048
Accrued interest receivable		8,735		8,507
Investment in SBIC fund		2,876		3,241
Investment in Community Reinvestment Act fund		2,000		2,000
Prepaid assets		2,528		1,942
Servicing assets		447		673
Investment in Low Income Housing Tax Credit ("LIHTC") partnerships, net		3,417		4,035
Investment in statutory trusts		546		532
CalCAP reserve receivable		1,375		4,023
Other assets		2,589		2,717
Total interest receivable and other assets	$	39,123	$	43,718

NOTE 10 – DEPOSITS

The Company’s deposits at the dates indicated consisted of the following:


	September 30,		December 31,
	2025		2024
Demand deposits (1)	$	618,055	$	688,996
NOW accounts		270,650		261,430
Savings		71,431		82,300
Money market		700,703		644,880
Time deposits		567,213		556,403
Total	$	2,228,052	$	2,234,009
(1) Noninterest bearing.

Time deposits included no brokered deposits as of September 30, 2025, and $35.5 million of brokered deposits as of December 31, 2024. At September 30, 2025, uninsured deposits totaled $1.1 billion, or 47.2% of total deposits, compared to $1.0 billion, or 46.8% of total deposits at December 31, 2024. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

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NOTE 11 – BORROWINGS

Other borrowings – The Bank has an approved secured borrowing facility with the Federal Home Loan Bank of San Francisco (the “FHLB”) for up to 25% of total assets for a term not to exceed five years under a blanket lien of certain types of loans. At September 30, 2025 and December 31, 2024, we had the ability to borrow up to $595.0 million and $540.2 million, respectively, from the FHLB of San Francisco. At both September 30, 2025 and December 31, 2024, we had no FHLB borrowings outstanding.

The Bank has been approved for discount window advances from the FRB of San Francisco secured by certain types of loans. At September 30, 2025 and December 31, 2024, we had the ability to borrow up to $43.4 million and $41.9 million, respectively, from the FRB of San Francisco. At both September 30, 2025 and December 31, 2024, we had no FRB of San Francisco advances outstanding.

The Bank has Federal Funds lines with four correspondent banks. Cumulative available commitments totaled $65.0 million at both September 30, 2025 and December 31, 2024. There were no amounts outstanding under these facilities at both September 30, 2025 and December 31, 2024.

Junior subordinated deferrable interest debentures – In connection with its previous acquisitions, the Company assumed junior subordinated deferrable interest debentures, totaling $8.7 million, net of fair value adjustments, with a weighted average interest rate of 7.16% at September 30, 2025, compared to $8.6 million, net of fair value adjustments, with a weighted average rate of 7.20% at December 31, 2024. The junior subordinated deferrable interest debentures mature in 2034, subject to earlier redemption by the Company at its option.

Subordinated debt – On August 10, 2020, the Company issued and sold $65.0 million aggregate principal amount of 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) at a public offering price equal to 100% of the aggregate principal amount of the Notes. The Notes initially bore a fixed interest rate of 5.25% per year. Commencing on September 15, 2025, the interest rate on the Notes was to reset quarterly to the three-month Secured Overnight Financing rate plus a spread of 521 basis points (5.21%), payable quarterly in arrears. Interest on the Notes was payable semi-annually on March 15 and September 15 of each year through September 15, 2025 and quarterly thereafter on March 15, June 15, September 15 and December 15 of each year through the maturity or earlier redemption date. The Company, at its option, could redeem the Notes, in whole or in part, on any interest payment date on or after September 15, 2025, without a premium. During the current quarter, the Company redeemed all the outstanding Notes. At September 30, 2025, the Company had no outstanding Notes, compared to $63.7 million, net of issuance costs, at December 31, 2024.

NOTE 12 – INTEREST PAYABLE AND OTHER LIABILITIES

The Company’s interest payable and other liabilities at the dates indicated consisted of the following:


	September 30,		December 31,
	2025		2024
Accrued expenses	$	8,437	$	7,797
Accounts payable		469		614
Reserve for unfunded commitments		570		600
Accrued interest payable		2,386		3,118
Other liabilities		1,413		2,503
Total	$	13,275	$	14,632

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NOTE 13 – OTHER EXPENSES

The Company’s other expenses for the periods indicated consisted of the following:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Professional fees	$	474	$	594	$	1,522	$	1,854
Core deposit premium amortization		242		305		749		917
Marketing and promotions		226		238		634		607
Stationery and supplies		66		57		210		215
Insurance (including FDIC premiums)		340		361		1,069		1,070
Communication and postage		275		271		780		785
Loan default related expense		(345)		128		(495)		287
Director fees and expenses		68		79		203		249
Bank service charges		16		16		50		48
Courier expense		144		177		482		557
Other		91		97		388		449
Total	$	1,597	$	2,323	$	5,592	$	7,038

The Company expenses marketing and promotion costs as they are incurred. Advertising expense included in marketing and promotions totaled $12,000 and $26,000 for the three and nine months ended September 30, 2025, and $10,000 and $38,000 for the three and nine months ended September 30, 2024, respectively.

NOTE 14 – EQUITY INCENTIVE PLANS

Equity Incentive Plans

2024 Omnibus Equity Incentive Plan

The Company’s shareholders approved the Company’s 2024 Omnibus Equity Incentive Plan (“2024 Plan”) in June 2024. The 2024 Plan provides for the grant of equity incentive awards to employees and directors (including emeritus and advisory directors) of the Company and its subsidiaries. The 2024 Plan permits the granting of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance shares and performance units. Factors generally considered by the Board in awarding equity incentives to employees include the performance of the Company, the employee’s job performance, the importance of his or her position, and his or her contribution to the organization’s goals for the award period.

Generally, awards under the 2024 Plan are subject to a minimum vesting period of one year (at least three years for full vesting for the chief executive officer), provided that awards for up to 5% of the maximum shares available under the 2024 Plan (for any participant other than the chief executive officer) may provide for a shorter vesting period. Subject to adjustment as provided in the 2024 Plan, the maximum number of shares of common stock available for issuance under the 2024 Plan is 500,000, and awards granted under the 2024 Plan to any one participant in any one calendar year are subject to the following limitations: (i) aggregate grants of stock options or stock appreciation rights to any one participant are subject to an annual limit of the lesser of 100,000 shares or $2.0 million in fair market value as of the date of grant; (ii) aggregate grants of restricted stock or restricted stock units to any one participant are subject to an annual limit of the lesser of 50,000 shares or $2.0 million in fair market value as of the date of grant; and (iii) aggregate grants of performance shares or performance units to any one participant are subject to an annual limit of the lesser of 50,000 shares or $2.0 million in fair market value as of the date of grant. In addition, subject to adjustment as provided in the 2024 Plan, the maximum aggregate number of shares that may be covered by awards granted under the 2024 Plan to any non-employee director in any one calendar year is 25,000 shares. As of September 30, 2025, a total of 464,178 shares were available for future issuance under the 2024 Plan.

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2017 Omnibus Equity Incentive Plan

The Company’s shareholders approved the Company’s 2017 Omnibus Equity Incentive Plan (“2017 Plan”) in November 2017. The 2017 Plan provides for the awarding by the Company’s Board of Directors of equity incentive awards to employees and non-employee directors. An equity incentive award under the 2017 Plan may be an option, stock appreciation right, restricted stock units, stock award, other stock-based award or performance award. Factors considered by the Board in awarding equity incentives to employees include the performance of the Company, the employee’s job performance, the importance of his or her position, and his or her contribution to the organization’s goals for the award period. Generally, awards have a vesting period of one to five years. Subject to adjustment as provided in the 2017 Plan, the maximum number of shares of common stock that may be delivered pursuant to awards granted under the 2017 Plan is 450,000. The 2017 Plan provides for annual restricted stock grant limits to officers, employees and directors. The annual stock grant limit per person for officers and employees is the lesser of 50,000 shares or a value of $2.0 million, and per person for directors, the maximum is 25,000 shares. All unvested restricted shares outstanding vest in the event of a change in control of the Company. Restricted stock awards granted to non-employee directors generally vest one year from the date of grant. Awards to executive officers typically vest over three- or five-year periods, with initial vesting occurring on the one-year anniversary of the grant date. As of September 30, 2024, no shares remained available for issuance under the 2017 Plan, as the approval of the 2024 Plan by shareholders terminated the ability to grant further awards under the 2017 Plan.

The following table provides the restricted stock grant activity for the periods indicated:


	2025			2024
		Weighted-average			Weighted-average
		grant date			grant date
	Shares	fair value		Shares	fair value
Non-vested at January 1,	74,346	$	20.11	81,365	$	18.27
Granted	22,221		26.20	24,471		23.30
Vested	(20,568)		20.20	(19,927)		18.99
Forfeited	(3,221)		24.98	(505)		16.67
Non-vested, at March 31,	72,778		21.73	85,404		19.55
Granted	—		—	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Non-Vested, at June 30,	72,778	$	21.73	85,404	$	19.55
Granted	8,860		28.19	9,289		20.35
Vested	(7,962)		20.35	(11,331)		16.67
Forfeited	—		—	—		—
Non-Vested, at September 30,	73,676	$	22.66	83,362	$	20.10

NOTE 15 – FAIR VALUE MEASUREMENT

ASC Topic 820, “Fair Value Measurement,” defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities, as follows:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the reporting entity has the ability to access at the measurement date.

Level 2 – Observable prices in active markets for similar assets and liabilities; prices for identical or similar assets or liabilities in markets that are not active; directly observable market inputs for substantially the full term of the asset and liability; market inputs that are not directly observable but are derived from or corroborated by observable market data.

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Level 3 – Unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

We use fair value to measure certain assets and liabilities on a recurring basis, primarily securities AFS. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for individually evaluated loans and other real estate owned and to record impairment on certain assets, such as goodwill, core deposit intangible, and other long-lived assets.

In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the lowest level of inputs that is significant to the measurement is used to determine the hierarchy for the entire asset or liability. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our quarterly valuation process. There were no transfers between levels during the three and nine months ended September 30, 2025 and 2024.

At both September 30, 2025 and December 31, 2024, there were no liabilities measured at fair value on a recurring or non-recurring basis.

The following assets were measured at fair value on a recurring basis as of the dates indicated:


	Total Estimated		Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
September 30, 2025
U.S. Government Agencies	$	1,731	$	—	$	1,731	$	—
Municipal securities		24,475		—		24,475		—
Mortgage-backed securities		47,103		—		47,103		—
Collateralized mortgage obligations		46,592		—		46,592		—
SBA securities		3,130		—		3,130		—
Corporate bonds		64,743		—		64,743		—
Equity securities		13,307		13,307		—		—
Total	$	201,081	$	13,307	$	187,774	$	—


	Total Estimated		Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
December 31, 2024
U.S. Government Agencies	$	1,937	$	—	$	1,937	$	—
Municipal securities		22,525		—		22,525		—
Mortgage-backed securities		47,483		—		47,483		—
Collateralized mortgage obligations		47,159		—		47,159		—
SBA securities		3,985		—		3,985		—
Corporate bonds		70,239		—		70,239		—
Equity securities		13,120		13,120		—		—
Total	$	206,448	$	13,120	$	193,328	$	—

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The following assets were measured at fair value on a nonrecurring basis as of the dates indicated:


	Total Estimated		Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
September 30, 2025
Individually evaluated loans	$	4,711	$	—	$	—	$	4,711
Total	$	4,711	$	—	$	—	$	4,711

	Total Estimated		Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
December 31, 2024
Individually evaluated loans	$	9,490	$	—	$	—	$	9,490
Total	$	9,490	$	—	$	—	$	9,490

The Company does not record loans at fair value on a recurring basis. However, from time to time, certain loans have individual risk characteristics not consistent with a pool of loans and are individually evaluated for credit reserves. Loans for which it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement are typically individually evaluated. The fair value of individually evaluated loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise and liquidation value and discounted cash flows. Those individually evaluated loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the individually evaluated loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is less than the appraised value or the appraised value contains a significant assumption and there is no observable market price, the Company records the individually evaluated loan as nonrecurring Level 3.

The Company records foreclosed assets, or other real estate owned (“OREO”), at fair value on a nonrecurring basis based on the collateral value of the property. When the fair value of the collateral is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the OREO as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is less than the appraised value or the appraised value contains a significant assumption, and there is no observable market price, the Company records the OREO as nonrecurring Level 3. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management also incorporates assumptions regarding market trends or other relevant factors and selling and commission costs ranging from 5% to 10%. Such adjustments and assumptions are typically significant and result in a Level 3 classification of the inputs for determining fair value. The Company had no OREO at both September 30, 2025 and December 31, 2024.

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NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Company’s financial instruments at the dates indicated are presented below:


	Carrying		Fair		Fair value measurements
	amount		value		Level 1		Level 2		Level 3
September 30, 2025
Financial assets:
Cash and cash equivalents	$	228,446	$	228,446	$	228,446	$	—	$	—
Investment securities AFS		187,774		187,774		—		187,774		—
Equity securities		13,307		13,307		13,307		—		—
Investment in FHLB and FRB Stock		21,181		21,181		—		21,181		—
Loans held for sale		421		421		—		421		—
Loans, net		2,021,537		1,985,088		—		—		1,985,088
Accrued interest receivable		8,735		8,735		—		8,735		—
Financial liabilities:
Deposits		2,228,052		2,236,544		—		2,236,544		—
Junior subordinated deferrable interest debentures, net		8,706		8,452		—		—		8,452
Accrued interest payable		2,386		2,386		—		2,386		—
Off-balance sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit		76,811		76,241		—		—		76,241


	Carrying		Fair		Fair value measurements
	amount		value		Level 1		Level 2		Level 3
December 31, 2024
Financial assets:
Cash and cash equivalents	$	364,032	$	364,032	$	364,032	$	—	$	—
Time deposits in banks		249		249		249		—		—
Investment securities AFS		193,328		193,328		—		193,328		—
Equity securities		13,120		13,120		13,120		—		—
Investment in FHLB and FRB Stock		20,958		20,958		—		20,958		—
Loans held for sale		2,216		2,216		—		2,216		—
Loans, net		1,934,996		1,884,134		—		—		1,884,134
Accrued interest receivable		8,507		8,507		—		8,507		—
Financial liabilities:
Deposits		2,234,009		2,236,256		—		2,236,256		—
Junior subordinated deferrable interest debentures, net		8,645		8,527		—		—		8,527
Subordinated debt, net		63,736		63,736		—		63,736		—
Accrued interest payable		3,118		3,118		—		3,118		—
Off-balance sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit		73,414		72,814		—		—		72,814

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NOTE 17 – COMMITMENTS AND CONTINGENCIES

Lending and Letter of Credit Commitments

We operate in a highly regulated environment. From time to time, we are a party to various claims and litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings where we believe the resolution would have a material adverse effect on our business, financial condition, or results of operations.

Nevertheless, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business (including laws and regulations governing consumer protection, fair lending, fair labor, privacy, information security and anti-money laundering and anti-terrorism laws), we, like all banking organizations, are subject to heightened legal and regulatory compliance and litigation risk.

In the normal course of business, the Company enters into various commitments to extend credit which are not reflected in the financial statements. These commitments consist of the undisbursed balance on home equity and unsecured personal lines of credit and commercial lines of credit, including commercial real estate secured lines of credit, and undisbursed funds on construction and development loans. The Company also issues standby letter of credit commitments, primarily for the third-party performance obligations of clients.

The following table presents a summary of commitments described above as of the dates indicated:


	September 30,		December 31,
	2025		2024
Commitments to extend credit	$	75,337	$	72,737
Standby letters of credit		1,474		677
Total commitments	$	76,811	$	73,414

Commitments generally have fixed expiration dates or other termination clauses. The actual liquidity needs or the credit risk that the Company will experience will likely be lower than the contractual amount of commitments to extend credit because a significant portion of these commitments are expected to expire without being drawn upon. The commitments are generally variable rate and include unfunded home equity lines of credit, commercial real estate construction loans where disbursement is made over the course of construction, commercial revolving lines of credit, and unsecured personal lines of credit. The Company’s outstanding loan commitments are made using the same underwriting standards as comparable outstanding loans. The reserve associated with these commitments included in interest payable and other liabilities on the consolidated balance sheets was $570,000 at September 30, 2025 and $600,000 at December 31, 2024.

Commercial Real Estate Concentrations

At September 30, 2025 and December 31, 2024, in management’s judgment, a concentration of loans existed in commercial real estate related loans. The Company’s commercial real estate loans are secured by owner-occupied and non-owner occupied commercial real estate and multifamily properties. Although management believes that loans within these concentrations have no more than the normal risk of collectability, a decline in the performance of the economy in general, or a decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on collectability.

Other Assets

The Company has commitments to fund investments in LIHTC partnerships and an SBIC fund. At September 30, 2025, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $4.8 million and $122,000, respectively. At December 31, 2024, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $4.7 million and $122,000, respectively.

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Deposit Concentrations

At September 30, 2025, approximately $234.0 million, or 11.5%, of the Company's deposits were derived from its top ten depositors. At December 31, 2024, approximately $304.5 million, or 13.6%, of the Company's deposits were derived from its top ten depositors.

Local Agency Deposits and Other Advances

In the normal course of business, the Company accepts deposits from local agencies. The Company is required to provide collateral for certain local agency deposits in the states of California, Colorado, New Mexico and Washington. At both September 30, 2025 and December 31, 2024, the FHLB had issued letters of credit on behalf of the Company totaling $41.1 million as collateral for local agency deposits.

NOTE 18 – SEGMENT INFORMATION

The Company operates as one reportable segment: banking operations. The Company’s banking operations generate revenue primarily from loans and securities, deposits, and non-interest income. Loan products generate a significant portion of interest and fee income, while deposit products provide fee and service charge income. The Company also earns interest and dividend income from securities and generates net gains from the sale of loans to third parties. Interest expense, provisions for credit losses, salaries and employee benefits, data processing, and occupancy expense typically represent the significant expenses in banking operations. These expenses align with those reported in the Company’s Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flows. Noncash items, such as depreciation and amortization, are also reflected in both the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements Cash Flows.

The Company’s Chief Operating Decision Maker (CODM) is identified as the Chief Executive Officer, who is responsible for assessing the financial performance of the Company and allocating resources accordingly. The CODM is provided with consolidated balance sheets, income statements, and net interest margin analyses in order to evaluate revenue streams, significant expenses, and budget-to-actual results in assessing the Company’s segment and determining the allocation of resources, as well as evaluating return on assets. In addition, the CODM utilizes consolidated net income, return on assets, and net interest margin as benchmarks to compare the Company’s performance against competitors. All operations are domestic and align with a single operating segment. Information reported internally for performance assessment by the CODM is identical to that shown in the Condensed Consolidated Statements of Income.

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The following table presents the Company’s one operating segment for the periods indicated:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Interest and dividend income	$	34,950	$	33,426	$	101,049	$	97,576

Reconciliation of revenue:
Other revenues		2,248		2,745		5,201		6,290
Total consolidated revenue		37,198		36,171		106,250		103,866

Less:
Interest expense		11,541		10,561		31,600		30,009
Segment net interest income and noninterest income		25,657		25,610		74,650		73,857
Less:
Provision for credit losses		2,973		1,245		3,818		1,668
Salaries and employee benefits		10,168		9,569		29,831		29,247
Occupancy and equipment		2,143		2,209		6,462		6,496
Data processing		2,038		1,973		5,804		5,376
Other segment items		1,597		2,323		5,592		7,038
Provision for income taxes		1,731		2,274		6,070		6,538
Segment net income/consolidated net income	$	5,007	$	6,017	$	17,073	$	17,494

		September 30,		December 31,
		2025		2024
Reconciliation of assets:
Total assets for reportable segment	$	2,603,787	$	2,664,508
Other assets		—		—
Total consolidated assets	$	2,603,787	$	2,664,508

NOTE 19 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that no events have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and

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uncertainties. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward- looking statements as a result of a wide variety or range of factors including, but not limited to:

●

adverse impacts to economic conditions in general and in California, Nevada, Colorado, New Mexico and Washington specifically, as well as other markets where the Company has lending relationships;

●

effects of employment levels, labor shortages, persistent inflation, ongoing or renewed recessionary pressures, political instability or uncertainty, and rising debt levels;

●

changes in interest rate levels and the duration of such changes, including actions by the Board of Governors of the Federal Reserve System (“Federal Reserve”), which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity;

●

the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior;

●

fiscal policy disputes or disruptions, including the effects of any federal government shutdown, or delays in federal budget approvals;

●

the credit risks of lending and securities activities, including delinquencies, write-offs, and changes in our allowance for credit losses and provision for credit losses;

●

changes in the levels of general interest rates and the relative differences between short and long-term interest rates and loan and deposit interest rates;

●

unexpected outflows of uninsured deposits, which may require us to sell investment securities at a loss;

●

our net interest margin and funding sources;

●

fluctuations in the demand for loans, unsold homes, land and other properties;

●

fluctuations in real estate values in our market areas;

●

secondary market conditions for loans and our ability to sell loans in the secondary market;

●

results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, limit our business activities, require us to change our business mix, increase our allowance for credit losses, write down asset values or increase our capital levels, affect our ability to borrow funds or maintain or increase deposits;

●

risks related to our acquisition strategy, including our ability to identify future suitable acquisition candidates, exposure to potential asset and credit quality risks and unknown or contingent liabilities, the need for capital to finance such transactions, our ability to obtain required regulatory approvals and possible failures in realizing the anticipated benefits from acquisitions;

●

challenges arising from attempts to expand into new geographic markets, products, or services;

●

goodwill impairment;

●

bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;

●

legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulations, tax laws, or consumer protection laws;

●

our ability to attract and retain deposits;

●

our ability to control operating costs and expenses;

●

use of estimates in determining the fair value of certain of our assets and liabilities, which may prove incorrect;

●

staffing fluctuations in response to product demand or corporate implementation strategies;

●

the effectiveness of our risk management framework;

●

vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks;

●

our ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity;

●

risks associated with dependence on our Chief Executive Officer and other members of our senior management team and our ability to attract, motivate and retain qualified personnel;

●

costs and effects of litigation, including settlements and judgments;

●

our ability to implement our business strategies, including expectations regarding key growth initiatives and strategic priorities;

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●

liquidity issues, including our ability to borrow funds or raise additional capital, if needed or desired;

●

the loss of our large loan and deposit relationships;

●

increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on our market position and our loan and deposit products;

●

changes in consumer spending, borrowing and savings habits;

●

the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions;

●

our ability to pay dividends on our common stock;

●

the quality and composition of our securities portfolio and the impact of any adverse changes in the securities markets;

●

the inability of key third-party providers to perform their obligations;

●

changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board;

●

environmental, social and governance goals;

●

geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors;

●

effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events;

●

other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and

●

risks described in other reports filed with or furnished to the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report”) and this Form 10-Q.

In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur, and you should not put undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements included in this report or the reasons why actual results could differ from those contained in such statements, whether as a result of new information or to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for the remainder of 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect our consolidated financial condition and results of operations as well as our stock price performance.

Executive Overview

General. BayCom is a bank holding company headquartered in Walnut Creek, California. BayCom’s wholly owned banking subsidiary, United Business Bank, provides a broad range of financial services to businesses and business owners as well as individuals through its network of 34 full-service branches at September 30, 2025, with 16 locations in California, one in Nevada, one in Washington, five in New Mexico and 11 in Colorado. BayCom’s business activities generally are limited to passive investment activities and oversight of its investment in the Bank. Accordingly, the information set forth in this report, including the consolidated financial statements and related data, relates primarily to the Bank.

Our principal business objective is to enhance shareholder value and generate consistent earnings growth by expanding our commercial banking franchise through both strategic acquisitions and organic growth. Since 2010, we have expanded our geographic footprint through ten strategic acquisitions. We believe that our selective acquisition of community banks has yielded economies of scale and improved our efficiency. We have also grown organically by leveraging the potential within metropolitan and community markets where we operate. These markets offer significant opportunities to expand our commercial client base, increase interest-earning assets, and enhance market share. We believe

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our geographic footprint, which now includes the San Francisco Bay area, the metropolitan markets of Los Angeles, California; Seattle, Washington; Denver, Colorado; and Las Vegas, Nevada, and community markets including Albuquerque, New Mexico, and Custer, Delta, and Grand Counties, Colorado, provides us access to low cost, stable core deposits in community markets that we can use to fund commercial loan growth. We strive to provide an enhanced banking experience for our clients by providing them with a comprehensive suite of sophisticated banking products and services tailored to meet their needs, while delivering the high-quality, relationship-based client service of a community bank. At September 30, 2025, on a consolidated basis, the Company had approximately $2.6 billion in total assets, $2.0 billion in total loans, $2.2 billion in total deposits and $334.3 million in shareholders’ equity.

We continue to focus on growing our commercial loan portfolios through acquisitions as well as organic growth. At September 30, 2025, our $2.0 billion total loan portfolio included $245.1 million, or 12.0%, of loans acquired through business combinations (all of which were recorded to their estimated fair values at the time of acquisition), and the remaining $1.7 billion, or 86.9%, consisted of loans we originated or purchased not as part of a business combination.

The profitability of our operations depends primarily on our net interest income after provision for credit losses, which is the difference between interest earned on interest earning assets and interest paid on interest bearing liabilities less provision for credit losses. Our net income is also affected by other factors, including the provision for credit losses on loans, noninterest income and noninterest expense.

Set forth below is a discussion of the primary factors affecting our results of operations:

Net interest income. Net interest income represents interest income less interest expense. We generate interest income from interest and fees received on interest earning assets, including loans and investment securities and dividends on Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank of San Francisco (“FRB”) stock we own. We incur interest expense from interest paid on interest bearing liabilities, including interest bearing deposits and borrowings. To evaluate net interest income, we measure and monitor: (i) yields on our loans and other interest earning assets; (ii) the costs of our deposits and other funding sources; (iii) our net interest margin; and (iv) the regulatory risk weighting associated with our assets. Net interest margin is calculated as the annualized net interest income divided by average interest earning assets. Because noninterest bearing sources of funds, such as noninterest bearing deposits and shareholders’ equity, also fund interest earning assets, net interest margin reflects the benefit of these noninterest bearing sources.

Changes in market interest rates, the slope of the yield curve, and interest we earn on interest earning assets or pay on interest bearing liabilities, as well as the volume and composition of interest earning assets, interest bearing and noninterest bearing liabilities, and shareholders’ equity, usually have the most significant impact on our net interest spread, net interest margin and net interest income during a reporting period. Following a period of monetary easing that began in the second half of 2024, the Federal Open Market Committee (FOMC) of the Federal Reserve reduced the target range for the federal funds rate by a cumulative 125 basis points through September 2025, bringing the target range to 4.00% to 4.25%. On October 29, 2025, subsequent to quarter-end, the FOMC announced a further 25 basis point cut, bringing the target range to 3.75% to 4.00%.

Noninterest income. Noninterest income consists of, among other things: (i) service charges on loans and deposits; (ii) gain on sale of loans; (iii) gain (loss) on equity securities; and (iv) other noninterest income. Gain on sale of loans includes income (or losses) from the sale of the guaranteed portion of Small Business Administration (“SBA”) loans, capitalized loan servicing rights and other related income.

Provision for credit losses. We have established an allowance for credit losses by charging amounts to provision for credit losses at a level required to reflect estimated credit losses in the loan and available-for sale investment securities portfolios. For loans, management considers many factors, including, among others, historical loss experience, types and amounts of loans in the portfolio and adverse situations that may affect borrowers’ ability to repay. See “Critical Accounting Policies and Estimates - Allowance for Credit Losses” for a description of the manner in which the provision for credit losses is established.

For investments, the Company evaluates available-for-sale debt securities in an unrealized loss position to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-

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related factors. Such situations may result from either a decline in the financial condition of the issuing entity or, in the case of fixed interest rate investments, from rising interest rates. In making this assessment, management considers the length of time and the extent to which fair value is less than amortized cost, the nature of the security, the underlying collateral, and the financial condition and prospects of the issuer, among other factors. This assessment also includes a determination of whether the Company intends to sell the security, or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses. If the present value of the cash flows expected to be collected from the security is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses for available-for-sale securities is recorded for the credit loss, limited by the amount that the fair value is less than the amortized costs basis. Any impairment that has not been recorded through an allowance for credit losses for available-for-sale securities is recognized in other comprehensive income. Changes in the allowance for credit losses for available-for-sale securities are recorded as provision for (or reversal of) credit loss. Losses are charged against the allowance for credit losses for available-for-sale securities, with a corresponding adjustment to the security's amortized cost basis, when management believes the uncollectibility of an available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met.

Noninterest expense. Noninterest expense includes, among other things: (i) salaries and related benefits; (ii) occupancy and equipment expense; (iii) data processing expense; (iv) Federal Deposit Insurance Corporation (“FDIC”) and state assessments; (v) outside and professional services; and (vi) other general and administrative expenses, including amortization of intangible assets. Salaries and related benefits include compensation, employee benefits and employment tax expenses for our personnel. Occupancy and equipment expense includes depreciation expense on our owned properties and equipment, lease expense on our leased properties and other occupancy-related expenses. Data processing expense includes fees paid to our third-party data processing system provider and other data service providers. FDIC and state assessments expense represents the assessments that we pay to the FDIC for deposit insurance and other regulatory costs to various states. Outside and professional fees include legal, accounting, consulting and other outsourcing arrangements. Amortization of intangibles represents the amortization of our core deposit intangible from various acquisitions. Other general and administrative expenses include expenses associated with travel, meals, training, supplies and postage. Noninterest expenses generally increase as we grow our business. Noninterest expenses have increased significantly over the past few years as we have grown through acquisitions and organically, and as we have built out our operational infrastructure.

Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the banking industry. To prepare financial statements and interim financial statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes and are based on information available as of the dates of the financial statements. As this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements. In particular, management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

These critical accounting policies and estimates include determining the allowance for credit losses and related provision.

There have been no material changes in the Company’s critical accounting policies and estimates as previously disclosed in the Company’s 2024 Annual Report. For a detailed discussion, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the Company’s 2024 Annual Report, which was filed with the SEC on March 14, 2025.

`Comparison of Financial Condition at September 30, 2025 and December 31, 2024

Total assets. Total assets decreased $60.7 million, or 2.3%, to $2.6 billion at September 30, 2025, from December 31, 2024. The decrease primarily was due to a $135.6 million, or 37.2%, decline in cash and cash equivalents

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and a $1.8 million, or 841.0%, decline in loans held for sale, partially offset by a $89.4 million, or 4.6%, increase in loans receivable, net.

Cash and cash equivalents. Cash and cash equivalents decreased $135.6 million, or 37.2%, to $228.4 million at September 30, 2025, from $364.0 million at December 31, 2024. The decrease primarily was due to a $135.6 million decrease in federal funds sold and interest bearing balances in banks as excess funds were used to fund the Company’s early redemption of the remaining $63.7 million of its outstanding 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 (“Notes”), as well as to fund loan growth and deposit withdrawals.

Investment securities available-for-sale. Investment securities available-for-sale decreased $5.6 million, or 2.9%, to $187.8 million at September 30, 2025 from $193.3 million at December 31, 2024. The decrease was primarily attributable to routine maturities, principal repayments, and calls of investment securities, partially offset by purchases of investment securities and an upward fair value adjustment related to unrealized gains on investment securities available-for-sale.

The following table sets forth certain information regarding contractual maturities and the weighted average yields of our available for sale investment securities as of September 30, 2025. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. The weighted average yields were calculated by multiplying each carrying value by its yield and dividing the sum of these results by the total carrying values. Yields on tax-exempt investments are not calculated on a fully tax equivalent basis.


	Amount Due or Repricing Within:
	One Year				Over One				Over Five				Over
	or Less				to Five Years				to Ten Years				Ten Years				Total
			Weighted				Weighted				Weighted				Weighted				Weighted
	Amortized		Average		Amortized		Average		Amortized		Average		Amortized		Average		Amortized		Average
	Cost		Yield		Cost		Yield		Cost		Yield		Cost		Yield		Cost		Yield

	(Dollars in thousands)
U.S. Government Agencies	$	—	—	%	$	—	—	%	$	—	—	%	$	1,738	9.09	%	$	1,738	9.09	%
Municipal securities		856	2.85			9,372	1.57			7,120	3.37			7,871	4.72			25,219	3.11
Mortgage-backed securities		17	2.35			1,382	2.54			12,710	2.54			35,431	4.73			49,540	4.11
Collateralized mortgage obligations		1,181	4.64			1,716	1.85			2,438	2.38			42,527	4.44			47,862	4.22
SBA securities		5	5.11			22	4.85			2,006	4.43			1,144	6.01			3,177	5.00
Corporate bonds		—	—			5,750	6.58			64,594	4.38			750	3.37			71,094	4.54
Total	$	2,059	3.88	%	$	18,242	3.25	%	$	88,868	3.98	%	$	89,461	4.68	%	$	198,630	4.23	%

Equity securities. Equity securities increased $187,000, or 1.4%, to $13.3 million at September 30, 2025 from $13.1 million at December 31, 2024, primarily due to mark-to-market adjustments recorded during the nine months ended September 30, 2025.

Loans receivable, net. We originate a wide variety of loans with a focus on commercial real estate (“CRE”) loans and commercial and industrial loans. Total loans increased $89.4 million, or 4.6%, to $2.0 billion at September 30, 2025 from $1.9 billion at December 31, 2024. The increase was due to $337.2 million of new loan originations and $24.6 million of loan purchases, partially offset by $271.6 million of loan repayments and $3.4 million of loans sold.

The following table provides information about our loan portfolio by type of loan, with purchase credit deteriorated (“PCD”) loans presented as a separate balance, at the dates presented.

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	September 30,		December 31,
	2025		2024		% Change

	(Dollars in thousands)
Commercial and industrial	$	177,250	$	173,948	1.9	%
Real estate:
Residential		115,181		109,409	5.3
Multifamily residential		279,542		222,932	25.4
Owner occupied CRE		487,896		490,493	(0.5)
Non-owner occupied CRE		958,828		931,615	2.9
Construction and land		5,124		1,509	239.6
Total real estate		1,846,571		1,755,958	5.2
Consumer		749		391	91.6
PCD loans		17,113		22,450	(23.8)
Total Loans		2,041,683		1,952,747	4.6
Net deferred loan fees		654		149	337.9
Allowance for credit losses		(20,800)		(17,900)	16.2
Loans, net	$	2,021,537	$	1,934,996	4.5	%

The following table shows as of September 30, 2025, the geographic distribution of our loan portfolio, by type of loan, in dollar amounts and percentages:


	San Francisco Bay										Total in State of
	Area (1)					Other California (2)					California					All Other States (3)			Total
			% of					% of					% of				% of				% of
			Total in					Total in					Total in				Total in				Total in
	Amount		Category			Amount		Category			Amount		Category		Amount		Category		Amount		Category

	(Dollars in thousands)
September 30, 2025
Commercial and industrial	$	30,011		7.4	%	$	69,628		8.1	%	$	99,639	7.9	%	$	77,611	10.0	%	$	177,250	8.7	%
Real estate:
Residential		11,834		2.9			51,209		6.0			63,043	5.0			52,249	6.8			115,292	5.6
Multifamily residential		58,320		14.3			143,048		16.6			201,368	15.9			79,332	10.3			280,700	13.7
Owner occupied CRE		148,734		36.5			289,614		33.7			438,348	34.6			55,782	7.2			494,130	24.2
Non-owner occupied CRE		158,576		38.9			302,236		35.1			460,812	36.3			507,626	65.6			968,438	47.4
Construction and land		—		—			4,742		—			4,742	—			382	0.0			5,124	—
Total real estate		377,464					790,849					1,168,313				695,371				1,863,684
Consumer		45		—	%		1		—	%		46	—	%		703	0.1	%		749	—	%
Total loans	$	407,520				$	860,478				$	1,267,998			$	773,685			$	2,041,683

December 31, 2024
Commercial and industrial	$	29,922		7.8	%	$	66,163		8.3	%	$	96,085	8.1	%	$	77,863	10.1	%	$	173,948	8.9	%
Real estate:
Residential		11,140		2.9			41,609		5.2		$	52,749	4.5			56,913	7.4			109,662	5.6
Multifamily residential		37,236		9.7			114,806		14.4			152,042	12.8			73,152	9.5			225,194	11.5
Owner occupied CRE		158,486		41.1			280,631		35.1			439,117	37.1			60,798	7.9			499,915	25.6
Non-owner occupied CRE		148,710		38.6			294,779		36.9			443,489	37.4			498,633	64.9			942,122	48.2
Construction and land		—		—			1,090		0.1			1,090	0.1			425	0.1			1,515	0.1
Total real estate		355,572					732,915					1,088,487				689,921				1,778,408
Consumer		5		—	%		1		—	%		6	—	%		385	0.1	%		391	—	%
Total loans	$	385,499				$	799,079				$	1,184,578			$	768,169			$	1,952,747

(1)	Includes Alameda, Contra Costa, Solano, Sonoma, Marin, San Francisco, San Mateo and Santa Clara counties.

(2)

Includes loans in Sacramento and Northern California counties totaling $88.5 million and loans in Los Angeles and Orange counties totaling $564.2 million at September 30, 2025. At December 31, 2024, loans in Sacramento and Northern California counties and loans in Los Angeles and Orange counties totaled $86.4 million and $537.1 million, respectively.

(3)

Includes loans primarily in the states of Colorado, New Mexico and Washington. At September 30, 2025, loans in Colorado, New Mexico and Washington totaled $137.4 million, $71.5 million and $85.4 million, respectively. At December 31, 2024, loans in Colorado, New Mexico and Washington totaled $134.9 million, $84.6 million and $83.4 million, respectively.

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Acquired loans. As of September 30, 2025, our total loan portfolio included $245.1 million, or 12.0%, of loans acquired through business combinations (all of which were recorded at their estimated fair values as of the time of acquisition), of which $134.4 million had no remaining net premium or discount.

As of September 30, 2025, acquired non-PCD loans totaled $110.7 million, with a remaining net premium of $1.4 million, compared to $140.6 million with a remaining net premium of $1.8 million as of December 31, 2024. The net premium for acquired non-PCD loans includes a credit discount based on estimated losses in the acquired loans, partially offset by any premium based on market interest rates on the date of acquisition.

As of September 30, 2025, acquired PCD loans totaled $17.7 million, with a remaining net non-credit discount of $1.3 million, compared to $24.0 million with a remaining net non-credit discount of $1.5 million as of December 31, 2024.

Nonperforming assets and loans. Nonperforming assets generally consist of nonperforming loans and other real estate owned (“OREO”). Nonperforming loans include nonaccrual loans and accruing loans 90 days or more past due. Nonperforming assets increased $4.4 million to $13.9 million, or 0.68% of total loans, at September 30, 2025, compared to $9.5 million, or 0.48% of total loans, at December 31, 2024. The Company held no OREO at either date.

Nonperforming loans totaled $13.9 million, or 0.68% of total loans, at September 30, 2025, compared to $9.5 million, or 0.48% of total loans, at December 31, 2024. The increase in nonperforming loans was primarily due to 11 new commercial real estate loans (secured by various types of real estate) totaling $12.2 million being placed on nonaccrual status during the nine months ended September 30, 2025, and to a lesser extent a $175,000 increase in loans 90 days or more past due and still accruing, which were in the process of collection. These increases were partially offset by payoffs of nine nonaccrual loans totaling $5.8 million, one $3.2 million non-accrual loan returned to accrual status as the loan is current and in the process of collection, and one fully charged off nonaccrual loan of $105,000. The rise in nonperforming loans reflects elevated credit risk primarily within the commercial and industrial and commercial real estate portfolios. At September 30, 2025, nonaccrual loans included $8,000 of loans 30–89 days past due and $8.4 million of loans less than 30 days past due. The $8.4 million of nonaccrual loans less than 30 days past due consisted of 18 loans, all of which were placed on nonaccrual due to borrower-specific financial concerns, indicators of credit deterioration, and other credit related factors, which provided reasonable doubt about the full collectability of principal and interest, rather than delinquency. At December 31, 2024, nonaccrual loans included $643,000 of loans 30–89 days past due and no loans less than 30 days past due.

Of the nonperforming loans at September 30, 2025, approximately $939,000 were guaranteed by governmental agencies, compared to $2.0 million at December 31, 2024. The decrease in government-guaranteed nonaccrual loans reflects the runoff of previously guaranteed balances without comparable additions during the current nine-month period.

In general, loans are placed on nonaccrual status after being contractually delinquent for more than 90 days, or earlier, if management believes full collection of future principal and interest on a timely basis is unlikely. When a loan is placed on nonaccrual status, all interest accrued but not received is charged against interest income. When the ability to fully collect nonaccrual loan principal is in doubt, cash payments received are applied against the principal balance of the loan until such time as full collection of the remaining recorded balance is expected. Interest received on such loans is recognized as interest income when received. A nonaccrual loan is restored to an accrual basis when principal and interest payments are brought current, and full payment of principal and interest is probable. Loans that are well secured and in the process of collection will remain on accrual status.

Loans may be acquired at a premium or discount to par value, in which case the premium is amortized (subtracted from) or accreted (added to) interest income over the remaining life of the loan. Generally, over time, the effects of loan discount accretion and loan premium amortization decrease as the purchased loans mature or pay off before maturity. Upon the pay-off of a loan before maturity, any remaining (unaccreted) discount or (unamortized) premium is immediately taken into interest income; as loan payoffs may vary significantly from quarter to quarter, so may the impact of discount accretion and premium amortization on interest income.

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Modified loans to borrowers experiencing financial difficulty. Occasionally, the Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or any combination of these. When principal is forgiven, the amount of the forgiveness is charged-off against the allowance for credit losses for loans. Upon the Company’s subsequent determination that a modified loan (or a portion thereof) is uncollectible, the loan (or portion thereof) is charged off. The amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses for loans is adjusted by the same amount.

Modified loans to borrowers experiencing financial difficulty as of September 30, 2025 and December 31, 2024, totaled $1.4 million and $2.7 million, respectively. All such modified loans were on nonaccrual status as of each respective reporting date. Modified loans that are accruing and performing in accordance with their modified terms are not classified as nonperforming loans, as they continue to accrue interest and demonstrate satisfactory payment performance despite their modified terms. There were no such modified loans at September 30, 2025 and December 31, 2024. The related allowance for credit losses on individually evaluated modified loans was none and $24,000 at September 30, 2025 and December 31, 2024, respectively.

The following table provides information regarding nonperforming loans, nonperforming assets and modified loans as of the dates indicated:


	September 30,			December 31,
	2025			2024

	(Dollars in thousands)
Loans accounted for on a nonaccrual basis:
Commercial and industrial	$	863		$	293
Real estate:
Residential		753			1,103
Multifamily residential		55			77
Owner occupied CRE		4,127			4,284
Non-owner occupied CRE		7,679			3,486
Construction and land		—			—
Total real estate		12,614			8,950
Consumer		—			4
Total nonaccrual loans		13,477			9,247
Accruing loans 90 days or more past due		395			220
Total nonperforming loans		13,872			9,467
Real estate owned		—			—
Total nonperforming assets (1)	$	13,872		$	9,467
Modified loans to borrowers experiencing financial difficulty – performing	$	—		$	—
PCD loans	$	17,113		$	22,450
Nonperforming assets to total assets (1)		0.53	%		0.36	%
Nonperforming loans to total loans (1)		0.68	%		0.48	%

(1)	Performing modified loans to borrowers experiencing financial difficulty are neither included in nonperforming loans above nor are they included in the numerators used to calculate these ratios. There were no performing modified loans at September 30, 2025 or December 31, 2024.

Interest foregone on nonaccrual loans was approximately $257,000 and $896,000 for the three and nine months ended September 30, 2025, compared to $397,000 and $1.1 million for the three and nine months ended September 30, 2024. Interest income recognized on nonaccrual loans was approximately $70,000 and $136,000 for the three and nine months ended September 30, 2025, and $7,400 and $93,600 for the three and nine months ended September 30, 2024, respectively.

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Allowance for credit losses for loans. The allowance for credit losses is determined by the Company on a quarterly basis, although management monitors the appropriate level of the allowance more frequently. We assess the allowance for credit losses based on three categories: (i) originated loans, (ii) acquired non-PCD loans, and (iii) acquired PCD loans. The allowance for credit losses reflects management’s estimate of current expected credit losses inherent in the loan portfolios. The computation includes elements of judgment and high levels of subjectivity.

At September 30, 2025, the Company’s allowance for credit losses for loans was $20.8 million, or 1.02% of total loans, compared to $17.9 million, or 0.92% of total loans, at December 31, 2024. Management currently believes that the $20.8 million allowance for credit losses at September 30, 2025 is adequate to absorb expected credit losses inherent in the Company’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.

The increase in the allowance for credit losses at September 30, 2025 compared to December 31, 2024, was primarily attributable to growth in the loan portfolio, an increase in the reserve for pooled loans, the replenishment of the allowance during the period, and to a lesser extent, an increase in the reserve for individually evaluated loans. The increase in the allowance for credit losses on pooled loans primarily reflected higher quantitative reserves resulting from the Company’s annual update to its CECL model methodology. The update incorporated more recent economic data and revised segment-specific peer group comparisons, which together contributed to a higher modeled reserve level. To a lesser extent, the increase also reflected a higher forecasted national unemployment rate, a weaker outlook for national gross domestic product and loan growth during the quarter, as well as changes in the risk level of one qualitative factor. Specifically, the Company incorporated an increase in forecasted national unemployment and a decline in projected national gross domestic product (“GDP”) at September 30, 2025, as compared to December 31, 2024. Both of these are key economic indicators used in estimating expected credit losses under the CECL, model.

Net charge-offs were $833,000 and $948,000 for the three and nine months ended September 30, 2025, compared to net charge-offs of $1.5 million and $5.0 million for the three and nine months ended September 30, 2024, respectively. The lower net charge-offs primarily reflect fewer nonaccrual loan charge-offs, as well as payoffs and collections on previously nonaccrual loans. Approximately $8.4 million of nonaccrual loans were less than 30 days past due as of September 30, 2025, and were placed on nonaccrual primarily due to borrower-specific financial concerns or elevated risk in the underlying collateral rather than payment delinquency. The Company continues to monitor these loans closely, and certain loans may return to accrual status if the borrowers’ financial positions stabilize and full collection of principal and interest becomes probable.

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The following table presents certain credit ratios at the dates and for the periods indicated and each component of the ratio’s calculations:


	At and for the nine months ended September 30,
	2025			2024

	(Dollars in thousands)
Allowance for credit losses on loans as a percentage of total loans outstanding at period end		1.02	%		0.96	%
Allowance for credit losses on loans	$	20,800		$	18,310
Total loans outstanding		2,042,337			1,912,105

Nonaccrual loans as a percentage of total loans outstanding at period end		0.66	%		0.51	%
Total nonaccrual loans	$	13,477		$	9,707
Total loans outstanding		2,042,337			1,912,105

Allowance for credit losses on loans as a percentage of nonaccrual loans at period end		154.34	%		188.63	%
Allowance for credit losses on loans	$	20,800		$	18,310
Total nonaccrual loans		13,477			9,707

Net charge-offs during period to average loans outstanding:
Commercial and industrial:		0.10	%		0.81	%
Net charge-offs	$	172		$	1,319
Average loans outstanding		181,018			163,178
Construction and land:		—	%		—	%
Net charge-offs	$	—		$	—
Average loans outstanding		6,116			8,248
Commercial real estate:		0.05	%		0.23	%
Net charge-offs	$	770		$	3,772
Average loans outstanding		1,697,880			1,622,223
Residential:		—	%		(0.11)	%
Net charge-offs	$	—		$	(99)
Average loans outstanding		107,077			91,078
Consumer:		0.97	%		0.15	%
Net charge-offs	$	6		$	1
Average loans outstanding		621			648
Total loans:		0.05	%		0.26	%
Total net charge-offs	$	948		$	4,993
Total average loans outstanding		1,992,713			1,885,374

As of September 30, 2025, the Company individually evaluated $18.8 million in loans, inclusive of the $13.5 million of nonperforming loans. Of these individually evaluated loans, $4.7 million had a specific allowance totaling $868,000 as of September 30, 2025. As of December 31, 2024, the Company individually evaluated $17.4 million in loans, inclusive of the $9.2 million of nonperforming loans, with $2.7 million having a specific allowance totaling $392,000.

Management considers the allowance for credit losses for loans at September 30, 2025 to be adequate to cover expected credit losses inherent in the loan portfolio based on the assessment of current portfolio performance, historical loss experience, and relevant qualitative and quantitative factors, including current economic conditions and reasonable and supportable forecasts. While management believes the estimates and assumptions used in determining the adequacy of the allowance are reasonable, actual credit losses may differ from those expected. Changes in economic conditions, borrower performance, or other factors could result in actual losses exceeding the current allowance, which could adversely affect the Company’s financial condition and results of operations. In addition, the methodology, assumptions, and judgments used in determining the allowance for credit losses is subject to review by bank regulators, as part of their routine examination process, which may result in adjustments to the provision for credit losses based upon information available to them at the time of their examination.

Deposits. Deposits are our primary source of funding and generally consist of core deposits from the communities served by our branch and office locations. We offer a variety of deposit accounts with a competitive range of interest rates

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and terms to both consumers and businesses. Deposits include interest bearing and noninterest bearing demand accounts, savings accounts, money market accounts, certificates of deposit and individual retirement accounts. These accounts earn interest at rates established by management based on competitive market factors, management’s desire to increase certain product types or maturities, and consistent with our asset/liability, liquidity and profitability objectives. Competitive products, competitive pricing and high touch client service are important to attracting and retaining these deposits.

Total deposits decreased $5.9 million, or 0.3%, to $2.2 billion at September 30, 2025, compared to December 31, 2024. At September 30, 2025, noninterest-bearing demand deposits totaled $618.1 million, or 27.7% of total deposits, compared to $689.0 million, or 30.8% of total deposits, at December 31, 2024, representing a decrease of $70.9 million. From December 31, 2024 to September 30, 2025, interest-bearing deposits generally increased, with money market accounts increasing $55.8 million, NOW accounts increasing $9.2 million, and time deposits increasing $10.8 million. In contrast, savings accounts declined $10.9 million during the same period. Time deposits included no brokered deposits as of September 30, 2025, compared to $35.5 million of brokered deposits at December 31, 2024.

The overall decline in total deposits primarily reflects the reduction in noninterest-bearing demand deposits, partially offset by growth in interest-bearing deposit accounts. The shift in deposit composition reflects continued customer migration toward interest-bearing products in response to the prevailing rate environment. The decrease in brokered time deposits also contributed to the net decline in deposit balances. Management continues to monitor deposit mix and pricing strategies in the context of funding costs, liquidity needs, and interest rate risk.

We consider our deposit base to be seasoned, stable and well-diversified, and we do not have any significant industry concentrations among our non-insured deposits. We also offer an insured cash sweep product (ICS) that allows customers to insure deposits above FDIC insurance limits. At September 30, 2025, our average deposit account size (excluding public funds), calculated by dividing period-end deposits by the population of accounts with balances, was approximately $63,000. See “Note 17 – Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q for information regarding our top ten depositors.

The following table sets forth the dollar amount of deposits in the various types of deposit programs offered at the dates indicated.


	September 30,		December 31,
	2025		2024		% Change

	(Dollars in thousands)
Demand deposits (1)	$	618,055	$	688,996	(10.3)	%
NOW accounts		270,650		261,430	3.5
Saving		71,431		82,300	(13.2)
Money market		700,703		644,880	8.7
Time deposits		567,213		556,403	1.9
Total	$	2,228,052	$	2,234,009	(0.3)	%

(1)

Noninterest bearing.

Borrowings. Although deposits are our primary source of funds, we may from time to time utilize borrowings as a cost-effective source of funds when they can be invested at a positive interest rate spread, for additional capacity to fund loan demand, or to meet our asset/liability management goals. We are a member of and may obtain advances from the FHLB of San Francisco, which is part of the Federal Home Loan Bank System. The eleven regional Federal Home Loan Banks provide a central credit facility for their member institutions. These advances are provided upon the security of certain of our mortgage loans and mortgage-backed securities. These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features.

At September 30, 2025 and December 31, 2024, we could borrow up to $595.0 million and $540.2 million, respectively, from the FHLB of San Francisco. At both September 30, 2025 and December 31, 2024, there were no FHLB advances outstanding.

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$41.9 million, respectively, from the FRB of San Francisco. At both September 30, 2025 and December 31, 2024, we had no FRB of San Francisco advances outstanding.

We may also utilize Fed Funds purchased from correspondent banks as a source of short-term funding. At both September 30, 2025 and December 31, 2024, we had a total of $65.0 million in federal funds lines available from third-party financial institutions and no balances outstanding at these dates.

At both September 30, 2025 and December 31, 2024, the Company had outstanding junior subordinated deferrable interest debentures, net of fair value adjustments, assumed in connection with its previous acquisitions totaling $8.7 million and $8.6 million, respectively.

At September 30, 2025, the Company had no outstanding subordinated debt, net of costs to issue compared to $63.7 million at December 31, 2024.

We are required to provide collateral for certain local agency deposits. At both September 30, 2025 and December 31, 2024, the FHLB of San Francisco had issued letters of credit on behalf of the Bank totaling $41.1 million, as collateral for local agency deposits.

Shareholders’ equity. Shareholders’ equity increased $9.9 million, to $334.3 million at September 30, 2025 from $324.4 million at December 31, 2024. The increase in shareholders’ equity primarily was due to $17.1 million of net income earned during the first nine months of 2025 and $5.0 million in other comprehensive income, net of taxes, which primarily reflected changs in the unrealized gain on available-for-sale securities. These increases were partially offset by the repurchase of $6.1 million of Company common stock and $6.6 million of cash dividends paid or accrued during the period. During the nine months ended September 30, 2025, the Company repurchased a total of 232,543 shares of its common stock at a total cost of $6.1 million and an average price of $26.24 per share, leaving 231,555 shares available for future purchases under the current stock repurchase plan. For additional information see Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds.”

Comparison of Results of Operations for the Three and Nine months Ended September 30, 2025 and 2024

Earnings summary. Net income was $5.0 million for the three months ended September 30, 2025, compared to $6.0 million for the three months ended September 30, 2024, a decrease of $1.0 million or 13.6%. The decrease was primarily as a result of a $1.7 million increase in provision for credit losses and a $496,000 decrease in noninterest income, partially offset by a $543,000 increase in net interest income, a $128,000 decrease in noninterest expense, and a $543,000 decrease in provision for income taxes. Basic and diluted earnings per share were $0.46 for the three months ended September 30, 2025, compared to $0.54 for the three months ended September 30, 2024.

Net income was $17.1 million for the nine months ended September 30, 2025, compared to $17.5 million for the nine months ended September 30, 2024, a decrease of $421,000 or 2.4%. The decrease was primarily a result of a $2.2 million increase in provision for credit losses and a $1.1 million decrease in noninterest income, partially offset by a $1.9 million increase in net interest income, a $468,000 decrease in noninterest expense, and a $468,000 decrease in provision for income taxes. Basic and diluted earnings per share were $1.55 for both the nine months ended September 30, 2025 and 2024.

Our efficiency ratio, which is calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income, was 62.15% and 63.88% for the three and nine months ended September 30, 2025, compared to 62.76% and 65.20% for the three and nine months ended September 30, 2024, respectively. The improvement in the efficiency ratio for the three-month period was primarily driven by higher net interest income and a modest reduction in noninterest expense. For the nine-month period, the improvement was due to a decrease in noninterest expense and a slight increase in total revenue, as higher net interest income more than offset a decline in noninterest income.

Interest income. Interest income for the three months ended September 30, 2025 was $35.0 million, compared to $33.4 million for the three months ended September 30, 2024, an increase of $1.5 million or 4.6%. Increased yields

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earned on interest-earning assets, along with an increase in the average balance of loans, were the primary drivers of the increase in interest income, partially offset by decreases in the average balances of investment securities and fed funds sold and interest bearing balances in banks.

Interest income on loans, including fees, increased $3.0 million, or 11.4%, to $29.2 million for the three months ended September 30, 2025 from $26.2 million for the three months ended September 30, 2024, due to a $148.3 million increase in the average balance of loans and a 17 basis point increase in the average loan yield. The average balance of loans was $2.0 billion for the third quarter of 2025, compared to $1.9 billion for the third quarter of 2024. The average yield on loans was 5.70% for the third quarter of 2025, compared to 5.53% for the third quarter of 2024. The increase in the average yield on loans reflected increased rates on variable rate loans, as well as new loans being originated at higher market interest rates.

Interest income on loans for the three months ended September 30, 2025 and 2024 included $155,000 and $114,000 in accretion of the net discount on acquired loans and revenue from PCD loans in excess of discounts. Remaining net discounts on these acquired loans totaled $146,000 and $449,000 at September 30, 2025 and 2024, respectively. Additionally, interest income on loans for the three months ended September 30, 2025 and 2024, included $119,000 and $12,000, respectively, in fees related to prepayment penalties.

Interest income on investment securities decreased $78,000, or 3.3%, to $2.3 million for the three months ended September 30, 2025, compared to $2.4 million for the three months ended September 30, 2024, as a result of decreases in the average balance, with the average yield remaining unchanged at 4.60% for both periods. The average balance of investment securities totaled $199.8 million for the three months ended September 30, 2025, compared to $207.0 million for the three months ended September 30, 2024. In addition, during the third quarter of 2025, we received $401,000 in cash dividends on our FRB and FHLB stock, compared to $393,000 during the third quarter of 2024.

Interest income on federal funds sold and interest-bearing balances in banks decreased $1.4 million, or 31.6%, to $3.0 million for the three months ended September 30, 2025, compared to $4.4 million for the three months ended September 30, 2024, as a result of changes in the average yield and average balance. The average yield decreased 89 basis points to 4.44% for the three months ended September 30, 2025, compared to 5.43% for the three months ended September 30, 2024, reflecting the effects of Federal Reserve rate reductions during the second half of 2024. The average balance of federal funds sold and interest-bearing balance in banks totaled $269.8 million and $323.6 million for the three months ended September30, 2025 and 2024, respectively.

Interest income for the nine months ended September 30, 2025 was $101.0 million, compared to $97.6 million for the nine months ended September 30, 2024, an increase of $3.4 million or 3.6%. The increase reflects increases in interest income on loans and investment securities, partially offset by decreases in federal funds sold and interest-bearing balances in banks. Increased yields earned on interest-earning assets, along with an increase in the average balances of loans and investment securities, were the primary drivers for the increase in interest income, partially offset by a decrease in the average balance of and yield on fed funds sold and interest bearing balances in banks.

Interest income on loans, including fees, increased $7.8 million, or 10.2%, to $84.3 million for the nine months ended September 30, 2025 from $76.5 million for nine months ended September 30, 2024, primarily due to a $108.2 million increase in the average balance of loans and a 24 basis point increase in the average loan yield. The average balance of loans was $2.0 billion for the nine months ended September 30 2025, compared to $1.9 billion for the nine months ended September 30, 2024. The average yield on loans was 5.66% for the nine months ended September 30, 2025, compared to 5.42% for the nine months ended September 30, 2024. The increase in the average yield on loans was due to the impact of increased rates on variable rate loans as well as new loans being originated at higher market interest rates.

Interest income on loans for the nine months ended September 30, 2025 and 2024 included $579,000 and $107,000 in accretion of the net discount on acquired loans and revenue from PCD loans in excess of discounts, as well as $391,000 and $259,000, respectively, in fees related to prepayment penalties.

Interest income on investment securities increased $645,000, or 9.9%, to $7.2 million for the nine months ended September 30, 2025, compared to $6.5 million for the nine months ended September 30, 2024. The average yield on investment securities increased 22 basis points to 4.67% for the nine months ended September 30, 2025, compared to

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4.45% for the nine months ended September 30, 2024. The increase in average yield was due to higher market interest rates on newly purchased securities. The average balance of investment securities totaled $205.5 million for the nine months ended September 30, 2025, compared to $196.0 million for the nine months ended September 30, 2024. In addition, during both the nine months ended September 30, 2025 and 2024, we received $1.2 million in cash dividends on our FRB and FHLB stock.

Interest income on federal funds sold and interest-bearing balances in banks decreased $4.9 million, or 37.4%, to $8.4 million for the nine months ended September 30, 2025, compared to $13.3 million for the nine months ended September 30, 2024, as a result of changes in the average yield and average balance. The average yield decreased 101 basis points to 4.45% for the nine months ended September 30, 2025, compared to 5.46% for the nine months ended September 30, 2024, reflecting the effects of Federal Reserve rate reductions during the second half of 2024. The average balance totaled $251.1 million for the nine months ended September 30, 2025, compared to $326.7 million for the nine months ended September 30, 2024.

Interest expense. Interest expense increased $981,000, or 9.3%, to $11.5 million for the three months ended September 30, 2025, compared to $10.6 million for the three months ended September 30, 2024. The increase was primarily due to increased interest expense on subordinated debt, which included $835,000 of amortized debt issuance costs recognized in connection with the Company’s redemption of its subordinated notes during the current quarter, and to a lesser extent, higher deposit rates, reflecting increased market rates and competitive pricing pressures.

Interest expense on deposits increased $330,000, or 3.5%, to $9.8 million for the three months ended September 30, 2025, compared to $9.4 million for the same period in 2024. The increase was due to higher overall average deposit balances, partially offset by lower rates on time deposits. The average rate paid on money market accounts decreased five basis points to 2.42% during the third quarter of 2025, compared to 2.47% in the same period of 2024, and the average rate on time deposits declined 34 basis points to 3.73%, compared to 4.07% for the prior-year period. The average cost of all interest-bearing deposits was 2.41% for the three months ended September 30, 2025, compared to 2.45% for the three months ended September 30, 2024. The overall average cost of deposits was 1.74% for the third quarter of 2025, compared to 1.75% for the third quarter of 2024. The average cost of total interest-bearing liabilities was 2.73% for the third quarter of 2025, compared to 2.54% for the third quarter of 2024.

Total average interest-bearing liabilities increased $67.8 million, or 4.2%, to $1.7 billion for the three months ended September 30, 2025, compared to $1.6 billion for the three months ended September 30, 2024. The average balance of interest-bearing deposits increased to $1.6 billion for the three months ended September 30, 2025, from $1.5 billion for the same period in 2024. Within this category, the average balance of money market accounts rose $21.5 million, or 3.2%, to $685.6 million, while time deposits increased $74.0 million, or 5.1%, to $586.3 million. In contrast, average balances for savings accounts declined over the same period.

The average balance of noninterest-bearing deposits increased $1.6 million, or 0.3%, to $617.5 million for the three months ended September 30, 2025, compared to $615.8 million for the same period in 2024. This shift in deposit composition from noninterest-bearing demand deposits and savings accounts to interest-bearing time, NOW, and money market accounts reflects continued customer migration toward higher-yielding products in response to prevailing market rates and competitive offerings.

Interest expense on borrowings increased $650,000 or 58.4%, to $1.8 million for the three months ended September 30, 2025, compared to $1.1 million for the three months ended September 30, 2024. The increase was primarily due to the acceleration of the amortization of deferred debt issuance costs. The average cost of total borrowings increased to 11.4% for the three months ended September 30, 2025, compared to 6.1% for the three months ended September 30, 2024, and amortization of deferred debt issuance costs negatively impacted the average cost of interest-bearing liabilities by 19 basis points in 2025, compared to minimal impact in 2024. The average balance of borrowings decreased $10.9 million to $61.4 million during the three months ended September 30, 2025, compared to $72.3 million during the three months ended September 30, 2024.

Interest expense increased $1.6 million, or 5.3%, to $31.6 million for the nine months ended September 30, 2025, compared to $30.0 million for the nine months ended September 30, 2024. The increase reflects higher funding costs, primarily due to increased market rates on money market accounts and a higher average balance of money market and

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time deposit accounts, partially offset by a decline in the average rate paid on time deposits, as well as an increase in interest expense on subordinated debt, which included $835,000 of amortized debt issuance costs recognized in connection with the Company’s redemption of all outstanding subordinated debt during the current quarter. The average rate paid on interest-bearing liabilities was 2.59% for the nine months ended September 30, 2025, compared to 2.52% for the nine months ended September 30, 2024. Total average interest-bearing liabilities increased $42.5 million, or 2.7%, to $1.6 billion for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Interest expense on deposits increased $992,000, or 3.87%, to $27.7 million for the nine months ended September 30, 2025, compared to $26.7 million for the nine months ended September 30, 2024. The increase was driven by higher rates paid on money market accounts and, to a lesser extent, an increase in the average balance of time deposits and money market accounts, partially offset by a decrease in the rate paid on time deposits. Rates on money market accounts increased four basis points during the nine months ended September 30, 2025, compared to the same period in 2024, while rates on time deposits decreased 24 basis points. The average balance of money market accounts increased $25.9 million, or 4.0%, to $668.0 million for the nine months ended September 30, 2025, compared to $642.1 million for the nine months ended September 30, 2024. The average balance of time deposits increased $46.0 million, or 9.1%, to $552.4 million for the nine months ended September 30, 2025, compared to $506.4 million for the same period the prior year.

The overall average cost of deposits for the nine months ended September 30, 2025 and 2024 was 1.70% and 1.66%, respectively. The average rate paid on all interest-bearing deposits increased two basis points to 2.37% for the nine months ended September 30, 2025, compared to 2.35% for the nine months ended September 30, 2024. The average balance of interest-bearing deposits totaled $1.6 billion for the nine months ended September 30, 2025, compared to $1.5 billion for the nine months ended September 30, 2024. Meanwhile, the average balance of noninterest-bearing deposits decreased $16.6 million, or 2.7%, to $608.8 million for the nine months ended September 30, 2025 compared to $625.3 million for the nine months ended September 30, 3024.

Interest expense on borrowings increased $600,000, or 18.0%, to $3.9 million for the nine months ended September 30, 2025, compared to $3.3 million for the nine months ended September 30, 2024. The increase was primarily due to the amortization and acceleration of deferred debt issuance costs, partially offset by a 129 basis point decrease in the average rate paid on junior subordinated debentures. The average cost of total borrowings increased to 7.65% for the nine months ended September 30, 2025, compared to 6.15% for the nine months ended September 30, 2024. The average balance of borrowings decreased $3.5 million to $68.7 million during the nine months ended September 30, 2025, compared to $72.3 million during the nine months ended September 30, 2024.

Net interest income and net interest margin. Net interest income increased $544,000 million, or 2.4%, to $23.4 million for the three months ended September 30, 2025, compared to $22.9 million for the three months ended September 30, 2024. The increase in net interest income primarily reflects increases in interest income on loans, which rose by $3.0 million or 11.4%, due to higher average balances and yields. This was partially offset by decreases in interest income on fed funds sold and interest-bearing balances in banks and investment securities, which declined by $1.5 million or 30.6%, as well as higher interest expense on deposits and subordinated debt, which increased by $1.0 million or 9.3%. Average interest-earning assets increased $87.5 million, or 3.6%, compared to the third quarter of 2024.

The average annualized yield on interest-earning assets was 5.49% for the three months ended September 30, 2025, representing a four basis point increase from 5.45% for the three months ended September 30, 2024. This increase reflects the repricing of adjustable-rate loans and securities to higher rates, as well as the origination of new loans and the purchase of new securities at higher rates. The average annualized cost of interest-bearing liabilities was 2.73% for the three months ended September 30, 2025, representing a 11 basis point increase from 2.62% for the three months ended September 30, 2024. As a result, the annualized net interest margin declined to 3.68% for the three months ended September 30, 2025, compared to 3.73% for the same period in 2024. The decline in the net interest margin was due to the amortization of debt issuance costs and the rate paid on interest-bearing liabilities rising faster than the yield on interest earning assets.

Net interest income increased $1.9 million, or 2.8%, to $69.5 million for the nine months ended September 30, 2025, compared to $67.6 million for the nine months ended September 30, 2024. The increase was primarily driven by a $7.8 million, or 10.2%, increase in interest income on loans, reflecting both higher average balances and yields. Interest income on investment securities also rose by $645,000 or 9.9%. These increases were partially offset by a $5.0 million, or

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37.4%, decline in interest income on fed funds sold and interest-bearing balances in banks, and a $1.6 million, or 5.3%, increase in interest expense, primarily due to higher rates on subordinated debt and time deposits.

The average annualized yield on interest-earning assets was 5.47% for the nine months ended September 30, 2025, representing a 10 basis point increase from 5.37% for the nine months ended September 30, 2024. The average cost of interest-bearing liabilities increased to 2.59%, up seven basis points from 2.52% in the prior-year period. As a result, the annualized net interest margin improved to 3.76% for the nine months ended September 30, 2025, compared to 3.72% for the same period in 2024. The expansion in net interest margin was primarily due to the increase in yields on interest-earning assets, which outpaced the increase in the cost of interest-bearing liabilities.

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Average Balances, Interest and Average Yields/Cost. The following tables present, for the periods indicated, information about (i) average balances, the total dollar amount of interest income from interest earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest bearing liabilities and the resultant average costs; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. Nonaccrual loans have been included in the table as loans carrying a zero yield. Yields have been calculated on a pre-tax basis. Loan yields include the effect of amortization or accretion of deferred loan fees/costs and purchase accounting premiums/discounts to interest and fees on loans.


	Three months ended September 30,
	2025						2024
					Annualized						Annualized
	Average				Average		Average				Average
	Balance(4)		Interest		Yield/Cost		Balance(4)		Interest		Yield/Cost

	(Dollars in thousands)
Interest earning assets
Fed Funds sold and interest bearing balances in banks	$	269,795	$	$ 3,017	4.44	%	$	323,629	$	4,414	5.43	%
Investments securities		199,789		2,315	4.60	%		207,033		2,393	4.60	%
FHLB Stock		11,524		253	8.70	%		11,313		243	8.55	%
FRB Stock		9,655		145	5.94	%		9,643		144	5.92	%
Total loans (1)		2,034,570		29,220	5.70	%		1,886,231		26,232	5.53	%
Total interest earning assets		2,525,333		34,950	5.49	%		2,437,849		33,426	5.45	%
Noninterest earning assets		132,407						134,801
Total average assets	$	2,657,740					$	2,572,650
Interest bearing liabilities
Savings	$	73,657		$ 23	0.12	%	$	92,225		30	0.13	%
NOW accounts		267,115		59	0.09	%		265,397		63	0.09	%
Money market		685,625		4,187	2.42	%		664,114		4,116	2.47	%
Time deposits		586,265		5,508	3.73	%		512,229		5,239	4.07	%
Total interest bearing deposit accounts		1,612,662		9,777	2.41	%		1,533,965		9,448	2.45	%
Subordinated debt, net		52,742		1,571	11.82	%		63,667		892	5.58	%
Junior subordinated debentures, net		8,694		193	8.78	%		8,612		221	10.22	%
Other borrowings		—		—	—			16		—	—
Total interest bearing liabilities		1,674,098		11,541	2.73	%		1,606,260		10,561	2.62	%
Noninterest bearing deposits		617,481						615,844
Other noninterest bearing liabilities		31,533						31,203
Noninterest bearing liabilities		649,014						647,047
Total average liabilities		2,323,112						2,253,307
Average equity		334,610						319,343
Total average liabilities and equity	$	2,657,722					$	2,572,650
Net interest income			$	23,409					$	22,865

Interest rate spread (2)					2.76	%					2.83	%
Net interest margin (3)					3.68	%					3.73	%
Ratio of average interest earning assets to average interest bearing liabilities					150.85	%					151.77	%

(1)	Loan average balances are net of deferred origination fees and costs. Non-accrual loans are included in the average balances. Interest income on non-accruing loans is reflected in the period that it is collected, to the extent it is not applied to principal.

(2)	Interest rate spread is calculated as the average rate earned on interest earning assets minus the average rate paid on interest bearing liabilities.

(3)	Net interest margin is calculated as net interest income divided by total average interest earning assets.

(4)	Average balances are computed using average daily balances.

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	Nine months ended September 30,
	2025						2024

	(Dollars in thousands)
					Annualized						Annualized
	Average				Average		Average				Average
	Balance (4)		Interest		Yield/Cost		Balance (4)		Interest		Yield/Cost

	(Dollars in thousands)
Interest earning assets
Fed Funds sold and interest-bearing balances in banks	$	251,077	$	$ 8,359	4.45	%	$	326,658	$	13,348	5.46	%
Investments securities		205,456		7,175	4.67	%		195,998		6,530	4.45	%
FHLB Stock		11,441		750	8.76	%		11,313		762	9.00	%
FRB Stock		9,651		434	6.01	%		9,633		433	6.01	%
Total loans (1)		1,993,602		84,331	5.66	%		1,885,402		76,503	5.42	%
Total interest earning assets		2,471,227		101,049	5.47	%		2,429,004		97,576	5.37	%
Noninterest earning assets		132,657						133,248
Total average assets	$	2,603,884					$	2,562,252
Interest bearing liabilities
Savings	$	76,790		$ 71	0.12	%	$	95,246		93	0.13	%
NOW accounts		266,281		178	0.09	%		273,732		189	0.09	%
Money market		668,043		11,886	2.38	%		642,128		11,238	2.34	%
Time deposits		552,383		15,534	3.76	%		506,364		15,157	4.00	%
Total interest bearing deposit accounts		1,563,497		27,669	2.37	%		1,517,470		26,677	2.35	%
Subordinated debt, net		60,056		3,354	7.47	%		63,669		2,676	5.61	%
Junior subordinated debentures, net		8,673		577	8.90	%		8,593		656	10.19	%
Other borrowings		11		—	—	%		20		—	—	%
Total interest bearing liabilities		1,632,237		31,600	2.59	%		1,589,752		30,009	2.52	%
Noninterest bearing deposits		608,757						625,310
Other noninterest bearing liabilities		31,172						30,449
Noninterest bearing liabilities		639,929						655,759
Total average liabilities		2,272,166						2,245,511
Average equity		331,718						316,741
Total average liabilities and equity	$	2,603,884					$	2,562,252
Net interest income			$	69,449					$	67,567

Interest rate spread (2)					2.88	%					2.85	%
Net interest margin (3)					3.76	%					3.72	%
Ratio of average interest earning assets to average interest bearing liabilities					151.40	%					152.79	%

(1)	Loan average balances are net of deferred origination fees and costs. Non-accrual loans are included in the average balances. Interest income on non-accruing loans is reflected in the period that it is collected, to the extent it is not applied to principal.

(2)	Interest rate spread is calculated as the average rate earned on interest earning assets minus the average rate paid on interest bearing liabilities.

(3)	Net interest margin is calculated as net interest income divided by total average interest earning assets.

(4)	Average balances are computed using average daily balances.

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Rate/Volume Analysis. Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earning assets and interest bearing liabilities, as well as changes in weighted average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the periods shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Changes applicable to both volume and rate have been allocated to volume.


	Three months ended September 30,						Nine months ended September 30,
	2025 compared to 2024						2025 compared to 2024
	Increase/(Decrease)						Increase/(Decrease)
	Attributable to						Attributable to
	Rate		Volume		Total		Rate		Volume		Total

	(Dollars in thousands)						(Dollars in thousands)
Interest earning assets
Fed funds sold and interest bearing balances in banks	$	(661)	$	(736)	$	(1,397)	$	(1,903)	$	(3,086)	$	(4,989)
Investments securities		6		(84)		(78)		330		315		645
FHLB stock and FRB stock		7		4		11		(20)		8		(12)
Total loans		919		2,069		2,988		3,442		4,386		7,828
Total interest income		271		1,253		1,524		1,849		1,623		3,472

Interest bearing liabilities
Savings		(1)		(6)		(7)		(4)		(18)		(22)
NOW accounts		(4)		—		(4)		(6)		(5)		(11)
Money market accounts		(63)		134		71		195		453		648
Time deposits		(490)		759		269		(999)		1,376		377
Total deposit accounts		(558)		887		329		(814)		1,806		992
Subordinated debt, net		833		(154)		679		830		(152)		678
Junior subordinated debentures, net		(30)		2		(28)		(85)		6		(79)
Total interest expense		245		735		980		(69)		1,660		1,591
Net interest income	$	26	$	518	$	544	$	1,918	$	(37)	$	1,881

Provision for credit losses. We recorded a provision for credit losses of $3.0 million and $3.8 million for the three and nine months ended September 30, 2025, compared to $1.2 million and $1.7 million for the three and nine months ended September 30, 2024. The provision for credit losses during the three and nine months ended September 30, 2025, was primarily driven by loan growth, charge-offs during the current quarter, and increased reserves on pooled loans. Net charge-offs totaled $948,000 for the nine months ended September 30, 2025, compared to $5.0 million for nine months ended September 30, 2024. The lower net charge-offs primarily reflect fewer nonaccrual loan charge-offs, as well as payoffs and collections on previously nonaccrual loans. Approximately $8.4 million of nonaccrual loans were less than 30 days past due as of September 30, 2025, and were placed on nonaccrual primarily due to borrower-specific financial concerns or elevated risk in the underlying collateral rather than payment delinquency. The Company continues to monitor these loans closely, and certain loans may return to accrual status if the borrowers’ financial positions stabilize and full collection of principal and interest becomes probable.

Noninterest income. Noninterest income decreased $497,000, or 18.1%, to $2.2 million for the third quarter of 2025, compared to $2.7 million for the third quarter of 2024. The decrease was primarily due to a $649,000 decrease in gain on equity securities as a result of positive fair value adjustments on these securities due to changes in market conditions, a $73,000 decrease in service charges and other fees, and a $78,000 decrease in other income and fees. These decreases were partially offset by a $224,000 decrease in loss on investment in SBIC fund and a $79,000 increase in loan servicing and other fees.

Noninterest income decreased $1.1 million or 17.3%, to $5.2 million for the nine months ended September 30, 2025, compared to $6.3 million for the nine months ended September 30, 2024. The decrease in noninterest income was primarily due to a $1.1 million decrease in gain on equity securities as a result of positive fair value adjustments on these securities due to changes in market conditions, a $153,000 increase in loss on investment in SBIC fund, and a $114,000

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decrease in other income and fees, partially offset by a $212,000 increase in service charges and other fees and a $151,000 increase in loan servicing and other loan fees.

The following table presents the key components of noninterest income for the periods indicated:


	Three months ended September 30,
	2025		2024		$ Change		% Change

	(Dollars in thousands)
Gain on sale of loans	$	—	$	—	$	—	100.0	%
Gain on equity securities		771		1,420		(649)	45.7	%
Service charges and other fees		825		898		(73)	(8.1)	%
Loan servicing and other loan fees		403		324		79	24.4	%
Loss on investment in SBIC fund		(29)		(253)		224	(88.5)	%
Other income and fees		278		356		(78)	(21.9)	%
Total noninterest income	$	2,248	$	2,745	$	(497)	(18.1)	%


	Nine months ended September 30,
	2025		2024		$ Change		% Change

	(Dollars in thousands)
Gain on sale of loans	$	251	$	287	$	(36)	(12.5)	%
Gain on equity securities		523		1,672		(1,149)	(68.7)	%
Service charges and other fees		2,683		2,471		212	8.6	%
Loan servicing and other loan fees		1,308		1,157		151	13.1	%
Loss on investment in SBIC fund		(365)		(212)		(153)	72.2	%
Other income and fees		801		915		(114)	(12.5)	%
Total noninterest income	$	5,201	$	6,290	$	(1,089)	(17.3)	%

N/M - Not meaningful

Noninterest expense. Noninterest expense decreased $128,000, or 0.8%, to $16.0 million for the three months ended September 30, 2025, compared to $16.1 million for the three months ended September 30, 2024. The decrease was primarily due to a $726,000 decrease in other expense and a $66,000 decrease in occupancy and equipment expense. The decrease in other expense was due to lower legal and professional service costs, reduced deposit premium amortization, and lower default related expenses. In addition, $400,000 in excess funds were returned to the Bank in the current quarter from a loss reserve account previously established under the California Capital Access Program (CalCAP), which supports small business lending by requiring contributions to a reserve fund that covers potential loan losses. These funds were no longer needed due to strong loan performance. No unused CalCAP funds were returned in the same quarter a year ago. These decreases were offset by a $599,000 increase in salaries and wages, resulting from higher incentive compensation and increased base wages, and a $65,000 increase in data processing expense.

Noninterest expense decreased $468,000 million, or 1.0%, to $47.7 million for the nine months September 30, 2025 compared to $48.2 million for the nine months ended September 30, 2024. The decrease in noninterest expense was primarily due to $1.4 million decrease in other expense due to return of unused CalCAP reserve funds, as discussed above, a reduction in legal and professional service costs, a reduction in FDIC insurance costs and a lower level of fraudulent check losses, partially offset by a $584,000 increase in salaries and wages, resulting from higher incentive compensation and increased base wages, and a $428,000 increase in data processing expense due to newly implemented services in 2025.

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The following table details the components of noninterest expense for the periods indicated:


	Three months ended September 30,
	2025		2024		$ Change		% Change

	(Dollars in thousands)
Salaries and related benefits	$	10,168	$	9,569	$	599	6.3	%
Occupancy and equipment		2,143		2,209		(66)	(3.0)	%
Data processing		2,038		1,973		65	3.3	%
Other		1,597		2,323		(726)	(31.3)	%
Total noninterest expense	$	15,946	$	16,074	$	(128)	(0.8)	%


	Nine months ended September 30,
	2025		2024		$ Change		% Change

	(Dollars in thousands)
Salaries and employee benefits	$	29,831	$	29,247	$	584	2.0	%
Occupancy and equipment		6,462		6,496		(34)	(0.5)	%
Data processing		5,804		5,376		428	8.0	%
Other		5,592		7,038		(1,446)	(20.5)	%
Total noninterest expense	$	47,689	$	48,157	$	(468)	(1.0)	%

Income taxes. The provision for income taxes decreased $543,000, or 23.9%, to $1.7 million for the three months ended September 30, 2025, compared to $2.3 million for the three months ended September 30, 2024. The provision for income taxes decreased $421,000, or 2.4%, to $6.1 million for the nine months ended September 30, 2025 compared to $6.5 million for the nine months ended September 30, 2024. These decreases primarily were due to lower taxable income.

The Company’s effective tax rate was 25.7% and 26.2% for the three and nine months ended September 30, 2025, compared to 27.4% and 27.2% for the three and nine months ended September 30, 2024, respectively. The effective tax rate decreased for the three and nine months ended September 30, 2025, compared to the same periods in 2024, primarily due to greater low income housing tax credits in the current quarter.

Liquidity and Capital Resources

Planning for our normal business liquidity needs, both expected and unexpected, is done on a daily and short-term basis through the cash management function. On a longer-term basis, it is accomplished through the budget and strategic planning functions, with support from internal asset/liability management software model projections.

Management maintains a liquidity position that it believes will adequately provide funding for loan demand and deposit run off that may occur in the normal course of business. We rely on multiple sources to meet our potential liquidity needs. Our primary sources of funds are deposits, escrow and custodial deposits, principal and interest payments on loans and proceeds from sales of loans. During the nine months ended September 30, 2025, the Bank sold $3.4 million in loan participation interests and received $271.6 million in principal loan repayments. While maturities and scheduled amortizations of loans are generally predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition.

Deposits decreased $6.0 million to $2.2 billion and liquid assets, in the form of cash and cash equivalents and time deposit in banks, decreased $135.8 million to $228.4 million at September 30, 2025 from $364.3 million at December 31, 2024. In addition, investment securities available-for-sale decreased $8.6 million to $187.8 million at September 30, 2025 from $193.3 million at December 31, 2024. Management believes that our securities portfolio is of high quality and that the securities would therefore be marketable. Securities purchased during the nine months ended September 30, 2025 were $11.6 million, while securities repayments, maturities and sales during that period were $24.7 million. Certificates of deposit scheduled to mature in one year or less at September 30, 2025, totaled $460.9 million. It is management’s policy to maintain deposit rates that are competitive with other local financial institutions. Based on this management strategy, we believe that most of our maturing certificates of deposit will remain with us.

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In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. As of September 30, 2025, the Bank had an available borrowing capacity of $595.0 million with the FHLB of San Francisco, with no borrowings outstanding at that date or at December 31, 2024. At September 30, 2025, we had the ability to borrow up to $43.4 million from the FRB of San Francisco, with no borrowings outstanding at that date. The Bank also had, as of that date, federal funds lines with four correspondent banks, with available commitments totaling $65.0 million. There were no amounts outstanding under these facilities at September 30, 2025 and December 31, 2024. Subject to market conditions, we expect to utilize these borrowing facilities from time to time in the future to fund loan originations and deposit withdrawals, to satisfy other financial commitments, repay maturing debt and to take advantage of investment opportunities to the extent feasible.

Liquidity management is both a daily and long-term function of the Company’s management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer-term basis, a strategy is maintained of investing in various lending products and investment securities, including U.S. Government obligations and U.S. agency securities. We use our sources of funds primarily to meet our ongoing commitments, to pay maturing deposits and fund withdrawals, and to fund loan commitments. At September 30, 2025, loan commitments and letters of credit totaled $76.8 million, including $5.4 million of undisbursed construction and development loan commitments. For information regarding our commitments, see “Note 17 – Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Information” of Part I of this report.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Net cash provided by operating activities for the nine months ended September 30, 2025 and 2024 was $23.0 million and $22.4 million, respectively. During the nine months ended September 30, 2025, net cash used in investing activities was $78.0 million, which consisted primarily of loan fundings and purchases of loans and investment securities, partially offset by proceeds from maturities, repayments and calls of investment securities AFS and normal recuring loan payments and maturities, compared to $19.4 million of net cash used in investing activities for the nine months ended September 30, 2024. Net cash used in financing activities for the nine months ended September 30, 2025 was $80.6 million, which was comprised primarily of the redemption of all of the outstanding Notes, a decrease in noninterest and interest bearing deposits in banks, net, stock repurchases and dividend payments to shareholders, partially offset by an increase in time deposits, net, compared to $9.3 million of net cash used in financing activities during the nine months ended September 30, 2024. Management believes our capital sources are adequate to meet all reasonably foreseeable short-term and long-term cash requirements. There has not been a material change in our liquidity and capital resources since the information disclosed in our 2024 Annual Report other than set forth above. We are not aware of any reasonably likely material changes in the mix and relative cost of such resources.

BayCom Corp is a separate legal entity from the Bank and must provide for its own liquidity. At September 30, 2025, BayCom Corp had liquid assets of $11.1 million. In addition to its operating expenses, BayCom Corp is responsible for paying to its shareholders any dividends that have been declared, funding stock repurchases, and making payments on its junior subordinated debentures. BayCom Corp can receive dividends and other capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends and make other capital distributions.

On August 21, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.25 per share on the Company’s outstanding common stock, which was paid on September 11, 2025 to shareholders of record as of the close of business on October 9, 2025. The Company expects to continue to pay quarterly cash dividends on its common stock, subject to the Board of Directors’ discretion to modify or terminate this practice at any time and for any reason without prior notice. Assuming continued payment of the cash dividend at the rate of $0.25 per share, our average total dividend paid each quarter would be approximately $2.7 million based on the number of our outstanding shares at September 30, 2025. The dividends we pay may be limited as more fully discussed under “Business – Supervision and Regulation – BayCom Corp – Dividends” and “– Regulatory Capital Requirements” contained in “Part I. Item 1. Business” of the 2024 Annual Report.

From time to time, our Board of Directors has authorized stock repurchase programs. In general, stock repurchases allow us to proactively manage our capital position and return excess capital to shareholders. Stock repurchases also provide us with shares of common stock necessary to satisfy obligations related to stock compensation awards. As of September 30, 2025, there remained 231,555 shares available for repurchase under the Company’s current

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stock repurchase program. For additional information on the Company’s stock repurchases, see “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” contained in Part II of this report.

Regulatory Capital

The Bank, as a state-chartered, federally insured commercial bank and member of the Board of Governors of the Federal Reserve System, is subject to capital requirements established by the Federal Reserve. The Federal Reserve requires the Bank to maintain levels of capital adequacy that generally parallel the FDIC’s requirements. The capital adequacy requirements are quantitative measures established by regulation that require the Bank to maintain minimum amounts and ratios of capital. The FDIC requires the Bank to maintain minimum ratios of Total Capital, Tier 1 Capital, and Common Equity Tier 1 Capital to risk-weighted assets as well as Tier 1 Leverage Capital to average assets. Consistent with our goal to operate a sound and profitable organization, our policy is for the Bank to maintain “Well Capitalized” status under the Federal Reserve regulations. Based on capital levels at September 30, 2025 and December 31, 2024, the Bank was considered Well Capitalized at both of those dates.

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The table below shows the capital ratios under the Basel III capital framework as of the dates indicated:


	At September 30, 2025				At December 31, 2024
	Amount		Ratio		Amount		Ratio

	(Dollars in thousands)
Leverage Ratio
BayCom Corp	$	300,387	11.80	%	$	289,525	11.76	%
Minimum requirement for “Well Capitalized”		127,259	5.00	%		123,063	5.00	%
Minimum regulatory requirement		101,807	4.00	%		98,451	4.00	%

United Business Bank		283,745	10.88	%		333,965	13.23	%
Minimum requirement for “Well Capitalized”		130,441	5.00	%		126,213	5.00	%
Minimum regulatory requirement		104,353	4.00	%		100,970	4.00	%

Common Equity Tier 1 Ratio
BayCom Corp		300,387	14.25	%		289,525	14.41	%
Minimum requirement for “Well Capitalized”		137,053	6.50	%		130,584	6.50	%
Minimum regulatory requirement		94,883	4.50	%		90,404	4.50	%

United Business Bank		283,745	13.54	%		333,965	16.81	%
Minimum requirement for “Well Capitalized”		136,165	6.50	%		129,125	6.50	%
Minimum regulatory requirement		94,268	4.50	%		89,394	4.50	%

Tier 1 Risk-Based Capital Ratio
BayCom Corp		309,872	14.70	%		299,010	14.88	%
Minimum requirement for “Well Capitalized”		168,680	8.00	%		160,719	8.00	%
Minimum regulatory requirement		126,510	6.00	%		120,539	6.00	%

United Business Bank		283,745	13.54	%		333,965	16.81	%
Minimum requirement for “Well Capitalized”		167,588	8.00	%		158,923	8.00	%
Minimum regulatory requirement		125,691	6.00	%		119,192	6.00	%

Total Risk-Based Capital Ratio
BayCom Corp		331,242	15.71	%		382,595	19.04	%
Minimum requirement for “Well Capitalized”		210,850	10.00	%		200,899	10.00	%
Minimum regulatory requirement		168,680	8.00	%		160,719	8.00	%

United Business Bank		305,115	14.56	%		352,865	17.76	%
Minimum requirement for “Well Capitalized”		209,485	10.00	%		198,654	10.00	%
Minimum regulatory requirement		167,588	8.00	%		158,923	8.00	%

In addition to the minimum capital ratios, the Bank must maintain a capital conservation buffer consisting of additional Common Equity Tier 1 capital greater than 2.5% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. At September 30, 2025, the Bank’s Common Equity Tier 1 capital exceeded the required capital conservation buffer.

For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank-only basis and the Federal Reserve expects the holding company’s subsidiary bank(s) to be Well Capitalized under the prompt corrective action regulations. If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at September 30, 2025, the Company would have exceeded all regulatory capital requirements.

For additional information, see “Item 1. Business — Supervision and Regulation — United Business Bank — Capital Requirements” and “Note 19 - Regulatory Matters” in the Notes to the Consolidated Financial Statements, included in “Item 8. Financial Statements and Supplementary Data” in the 2024 Annual Report.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate risk through our lending and deposit gathering activities. Our results of operations are highly dependent upon our ability to manage interest rate risk. We consider interest rate risk to be a significant market risk that could have a material effect on our financial condition and results of operations. Interest rate risk is measured and assessed on a quarterly basis. For information regarding the Company’s market risk, see “Item 7A Quantitative and Qualitative Disclosures About Market and Interest Rate Risk,” in the Company’s 2024 Annual Report. In our opinion, there has not been a material change in our interest rate risk exposure since the information disclosed in our 2024 Annual Report.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

An evaluation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), was carried out as of September 30, 2025 under the supervision and with the participation of the Company’s principal executive officer, principal financial officer and several other members of the Company’s senior management. In designing and evaluating the Company’s disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

During this evaluation, management identified a disclosure control deficiency related to the public announcement of the Company’s current stock repurchase program. While the Board of Directors had approved an open-ended repurchase authorization, a prior public announcement incorrectly stated that the program would expire after one year. All repurchases under the program were made in accordance with the Board’s authorization and recorded appropriately in the Company’s financial statements. Management has implemented enhanced procedures to ensure that future public disclosures accurately reflect the terms of Board-approved authorizations.

The Company’s principal executive officer and principal financial officer concluded that as of September 30, 2025, based on their evaluation, the Company’s disclosure controls and procedures were effective in ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to BayCom Corp’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure, specified in the SEC’s rules and forms.

(b) Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, that occurred during the three months ended September 30, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all error and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the acts of individuals, by collusion of two or more people, or by override of the control. The design of any control procedure is also based in part upon certain assumptions about the likelihood of

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future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Periodically, there have been various claims and lawsuits involving the Company, such as claims to enforce liens, condemnation proceedings on properties in which the Company holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Company’s business. The Company is not a party to any pending legal proceedings that it believes would have a material adverse effect on the financial condition or results of operations of the Company.

Item 1A. Risk Factors

There have been no material changes in the Risk Factors previously disclosed in Item 1A of the 2024 Annual Report.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

(a)

Not applicable.

(b)

Not applicable.

(c)Stock Repurchases. The following table sets forth information with respect to our repurchases of our outstanding common shares during the three months ended September 30, 2025:


				Total number of
	Total		Average	shares purchased	Maximum number of
	number of		price	as part of	shares that may yet be
	shares		paid	publicly announced	purchased under the
	purchased		per share	plans or programs	plans or programs (1)
July 1, 2025 - July 31, 2025	1,621	$	27.01	1,621	263,234
August 1, 2025 - August 31, 2025	31,679		27.31	31,679	231,555
September 1, 2025 - September 30, 2025	—		—	—	231,555
	33,300	$	27.29	33,300

(1)

In May 2024, the Company’s Board of Directors approved the Company’s ninth stock repurchase program, which commenced following completion of the eighth stock repurchase program in June 2024, authorizing the purchase of up to 560,000 shares, or approximately 5.0%, of the Company’s outstanding common stock. While a prior public announcement incorrectly described the current program as expiring after one year, the Board’s authorization is open-ended and has no expiration date. Purchases under the Company’s stock repurchase programs may be made through open market purchases, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. The repurchase programs may be suspended, terminated, or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The Company’s stock repurchase programs do not obligate the Company to purchase any specific number of shares.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

(a)

Not applicable.

(b)

Not applicable.

(c) Trading Plans. During the three months ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


3.1	Articles of Incorporation of BayCom Corp⁽¹⁾
3.2	Amended and Restated Bylaws of BayCom Corp⁽²⁾
31.1 31.2	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Extensible Business Reporting Language (XBRL): (1) Condensed Consolidated Balance Sheets; (2) Condensed Consolidated Statements of Income; (3) Condensed Consolidated Statements of Comprehensive Income; (4) Condensed Consolidated Statements of Changes in Stockholders’ Equity; (5) Condensed Consolidated Statements of Cash Flows; and (6) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

(1)	Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 filed with the SEC on April 11, 2018 (File No. 333-224236) and incorporated herein by reference.

(2)	Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2020 (File No. 001-38483) and incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		BAYCOM CORP
		Registrant


Date: November 7, 2025	By:	/s/ George J. Guarini
		George J. Guarini
		President and Chief Executive Officer
		(Principal Executive Officer)


Date: November 7, 2025	By:	/s/ Keary L. Colwell
		Keary L. Colwell
		Senior Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

Source: View Original Filing on SEC EDGAR

FAQ

What was BayCom (BCML) Q3 2025 net income and EPS?

Net income was $5.0 million and EPS was $0.46 for the quarter ended September 30, 2025.

How did BayCom’s net interest income change in Q3 2025?

Net interest income was $23.4 million, up from $22.9 million in the prior-year quarter.

What were BayCom’s loans and deposits at September 30, 2025?

Loans, net, were $2.02 billion; deposits were $2.23 billion.

Did BayCom (BCML) change its debt structure in 2025?

Yes. The company repaid $64.7 million of subordinated debt during the nine months ended September 30, 2025.

What happened to BayCom’s accumulated other comprehensive loss (AOCI)?

AOCI improved to $8.0 million loss from $13.0 million loss at December 31, 2024.

How many BayCom shares were outstanding most recently?

There were 10,897,763 common shares outstanding as of November 3, 2025.

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What was BayCom (BCML) Q3 2025 net income and EPS?

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What were BayCom’s loans and deposits at September 30, 2025?

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What was BayCom (BCML) Q3 2025 net income and EPS?

How did BayCom’s net interest income change in Q3 2025?

What were BayCom’s loans and deposits at September 30, 2025?

Did BayCom (BCML) change its debt structure in 2025?

What happened to BayCom’s accumulated other comprehensive loss (AOCI)?

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