PCB BANCORP

Previous wording

On January 1, 2023, the Company adopted the provisions of Accounting Standards Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326).” The adoption of ASC 326 changes the way the Company estimates the ACL on certain financial assets. The adoption of ASC 326 requires the Company to measure and record current expected credit losses for financial assets within the scope of ASC 326, which the Company currently consist substantially of loans, off-balance sheet credit exposures and securities available-for-sale. Measuring credit losses under the current expected credit losses (“CECL”) framework requires a significant amount of judgment, including the incorporation of reasonable and supportable forecasts about future conditions that may ultimately impact the level of credit losses the Company may recognize. Under the CECL framework, current expected credit losses are recorded on financial assets within the scope of ASC 326 at the time of their origination or acquisition.

Current wording

On January 1, 2023, the Company adopted the provisions of Accounting Standards Codification (“ASC”) 326, “Financial Instruments - Credit Losses (Topic 326).” The adoption of ASC 326 changes the way the Company estimates the ACL on certain financial assets. The adoption of ASC 326 requires the Company to measure and record current expected credit losses for financial assets within the scope of ASC 326, which for the Company currently consist substantially of loans, off-balance sheet credit exposures and securities available-for-sale. Measuring credit losses under the current expected credit losses (“CECL”) framework requires a significant amount of judgment, including the incorporation of reasonable and supportable forecasts about future conditions that may ultimately impact the level of credit losses the Company may recognize. Under the CECL framework, current expected credit losses are recorded on financial assets within the scope of ASC 326 at the time of their origination or acquisition.

Previous wording

Within the various economic scenarios considered as of December 31, 2024, the quantitative estimate of the ACL would increase by approximately $19.0 million under sole consideration of the more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

Current wording

Within the various economic scenarios considered as of December 31, 2025, the quantitative estimate of the ACL would increase by approximately $21.0 million under sole consideration of the more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

Previous wording

(1) ACL and provision (reversal) for credit losses for the year ended December 31, 2024 and 2023 is presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310. Provision (reversal) for credit losses on off-balance sheet credit exposures of $85 thousand, $(24) thousand, and $(63) thousand, respectively, for the years ended December 31, 2022, 2021, and 2020 were recorded in Other Expense on the Consolidated Income Statement.

Current wording

(1) ACL and provision (reversal) for credit losses for the years ended December 31, 2025, 2024 and 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310. Provision (reversal) for credit losses on off-balance sheet credit exposures of $85 thousand and $(24) thousand, respectively, for the years ended December 31, 2022 and 2021 is recorded in Other Expense on the Consolidated Income Statement.

Previous wording

◦Diluted earnings per common share was $1.74, $2.12 and $2.31 for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

◦Diluted earnings per common share was $2.58, $1.74 and $2.12 for the years ended December 31, 2025, 2024 and 2023, respectively.

Previous wording

•Total assets were $3.06 billion at December 31, 2024, an increase of $274.5 million, or 9.8%, from $2.79 billion at December 31, 2023;

Current wording

•Total assets were $3.28 billion at December 31, 2025, an increase of $217.8 million, or 7.1%, from $3.06 billion at December 31, 2024;

Previous wording

•Loans held-for-investment were $2.63 billion at December 31, 2024, an increase of $305.9 million, or 13.2%, from $2.32 billion at December 31, 2023;

Current wording

•Loans held-for-investment were $2.82 billion at December 31, 2025, an increase of $191.0 million, or 7.3%, from $2.63 billion at December 31, 2024;

Previous wording

•Total deposits were $2.62 billion at December 31, 2024, an increase of $264.2 million, or 11.2%, from $2.35 billion at December 31, 2023;

Current wording

•Total deposits were $2.80 billion at December 31, 2025, an increase of $179.6 million, or 6.9%, from $2.62 billion at December 31, 2024;

Previous wording

•The Company declared and paid cash dividends of $0.72, $0.69, and $0.60 per common share for the years ended December 31, 2024, 2023 and 2022, respectively; and

Current wording

•The Company declared and paid cash dividends of $0.80, $0.72 and $0.69 per common share for the years ended December 31, 2025, 2024 and 2023, respectively; and

Previous wording

•The Company purchased and retired 14,947, 512,657, and 362,557 shares of common stock for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

•The Company purchased and retired 358,251, 14,947 and 512,657 shares of common stock for the years ended December 31, 2025, 2024 and 2023, respectively.

Previous wording

The decrease in net income for the year ended December 31, 2023 compared with the year ended December 31, 2022 was primarily due to an increase in noninterest expense, decreases in noninterest income and net interest income, partially offset by reversal for credit losses of $132 thousand for the year ended December 31, 2023 compared with provision for credit losses of $3.6 million for the year ended December 31, 2022.

Current wording

The increase in net income for the year ended December 31, 2025 compared with the year ended December 31, 2024 was primarily due to an increase in net interest income and noninterest income and a decrease in noninterest expense, partially offset by an increase in provision for credit losses of $4.0 million for the year ended December 31, 2025 compared with $3.4 million for the year ended December 31, 2024.

Previous wording

The increase in total assets for the year ended December 31, 2024 was primarily due to increases in loans held-for-investment and deferred tax assets.

Current wording

The increase in total assets for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment and securities available-for-sale.

Previous wording

The Company is committed to making corporate decisions that directly benefit its shareholders, and during the year ended December 31, 2024, increased its dividend per common share by $0.03, or 4.3%, to $0.72 from $0.69 for the year ended December 31, 2023. During the year ended December 31, 2024, the Company also repurchased 14,947 shares of common stock, totaling $222 thousand. Overall, the Company returned 42.0% of its earnings to common shareholders through dividends and common share repurchases during the year ended December 31, 2024.

Current wording

The Company is committed to making corporate decisions that directly benefit its shareholders, and during the year ended December 31, 2025, increased its dividend per common share by $0.08, or 11.1%, to $0.80 from $0.72 for the year ended December 31, 2024. During the year ended December 31, 2025, the Company also repurchased 358,251 shares of common stock, totaling $7.1 million. Overall, the Company returned 49.6% of its earnings to common shareholders through dividends and common share repurchases during the year ended December 31, 2025.

Previous wording

(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees (cost) of $1.2 million, $1.1 million and $2.2 million, respectively, and net accretion of discount on loans of $2.8 million, $2.2 million and $3.6 million, respectively, are included in the interest income for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees (cost) of $1.4 million, $1.2 million and $1.1 million, respectively, and net accretion of discount on loans of $2.8 million, $2.8 million and $2.2 million, respectively, are included in the interest income for the years ended December 31, 2025, 2024 and 2023, respectively.

Previous wording

Net interest income decreased primarily due to a 38.4% increase in average balance of interest-bearing liabilities and a 297 basis point increase in average cost of interest-bearing liabilities, partially offset by a 12.6% increase in average balance of interest-earning assets and a 147 basis point increase in average yield on interest-earning assets. The increase in average balance of interest-earning assets was primarily due to growth in loans and investment securities, supported by deposit growth. The increases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to the rising market rates during the year ended December 31, 2023.

Current wording

Net interest income increased primarily due to a 13.0% increase in average balance of interest-earning assets and a 67 basis point decrease in average cost of interest-bearing liabilities, partially offset by an 18.1% increase in average balance of interest-bearing liabilities and a 21 basis point decrease in average yield on interest-earning assets. The increase in average balance of interest-earning assets was primarily due to growth in loans and investment securities as well as other interest-earning assets, supported by deposit growth. The decreases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to re-pricing at evaluated rates and originations at lower market rates during the year ended December 31, 2025.

Previous wording

Interest and fees on loans increased primarily due to a 14.2% increase in average balance and a 128 basis point increase in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans. The increase in average yield was primarily due to the rising market rates, partially offset by a decrease in net amortization of deferred fees on SBA PPP loans.

Current wording

Interest and fees on loans increased primarily due to a 12.8% increase in average balance, partially offset by an 18 basis point decrease in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans. The decrease in average yield was primarily due to the lower market rates.

Previous wording

Interest on investment securities increased primarily due to a 114 basis point increase in average yield and a 6.1% increase in average balance. The increase in average yield was primarily due to new investment securities purchased at higher market rates and a decrease in net amortization of premium. The Company purchased $17.3 million and $57.4 million, respectively, of investment securities during the years ended December 31, 2023 and 2022. For the years ended December 31, 2023 and 2022, average yield on total investment securities was 3.33% and 2.19%, respectively.

Current wording

Interest on investment securities increased primarily due to a 5.0% increase in average balance and a 17 basis point increase in average yield. The Company purchased $31.7 million and $23.5 million, respectively, of investment securities during the years ended December 31, 2025 and 2024. The increase in average yield was primarily due to new investment securities purchased at higher rates and a decrease in net amortization of premium on investment securities. For the years ended December 31, 2025 and 2024, average yield on total investment securities was 3.86% and 3.69%, respectively.

Previous wording

Interest income on other interest-earning assets increased primarily due to a 332 basis point increase in average yield and a 2.4% increase in average balance. The increase in average yield was primarily due to the rising market rates and an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans. For the years ended December 31, 2023 and 2022, yield on total other interest-earning assets was 5.27% and 1.95%, respectively.

Current wording

Interest income on other interest-earning assets increased primarily due to a 21.7% increase in average balance, partially offset by a 92 basis point decrease in average yield. The decrease in average yield was primarily due to the lower market rates, partially offset by an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans. For the years ended December 31, 2025 and 2024, yield on total other interest-earning assets was 4.58% and 5.50%, respectively.

Previous wording

Interest expense on deposits increased primarily due to a 38.4% increase in average balance of interest-bearing deposits and a 296 basis point increase in average cost of interest-bearing deposits. The increase in average balance was primarily due to an increase in time deposits, partially offset by decreases in savings, NOW and money market accounts. The increase in average cost was primarily due to the rising market rates. For the years ended December 31, 2023 and 2022, average cost on total interest-bearing deposits was 4.04% and 1.08%, respectively.

Current wording

Interest expense on deposits increased primarily due to an 18.4% increase in average balance of interest-bearing deposits, partially offset by a 66 basis point decrease in average cost of interest-bearing deposits. The increase in average balance was primarily due to an increase in time deposits, and NOW and money market accounts, partially offset by decreases in savings. The decrease in average cost was primarily due to the lower market rates. For the years ended December 31, 2025 and 2024, average cost on total interest-bearing deposits was 4.12% and 4.78%, respectively.

Previous wording

Interest expense on other borrowings increased primarily due to a 46.1% increase in average balance and a 338 basis point increase in average cost. The increase in average cost was primarily due to the rising market rates.

Current wording

Interest expense on other borrowings decreased primarily due to a 1.3% decrease in average balance and a 96 basis point decrease in average cost.

Previous wording

Provision for credit losses on loans for the year ended December 31, 2024 was primarily due to increases in loans held-for-investment, partially offset by a decrease in quantitatively measured loss reserve requirement. See further discussion in “Allowance for Credit Losses.”

Current wording

Provision for credit losses on loans for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors. See further discussion in “Allowance for Credit Losses.”

Previous wording

Service charges and fees on deposits increased primarily due to an increase in fee-based transactions.

Current wording

Service charges and fees on deposits decreased primarily due to a decrease in fee-based transactions.

Previous wording

Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The increase was primarily due to an increase in servicing income received and a decrease in amortization of servicing assets from lower prepayments of loans being serviced.

Current wording

Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The decrease was primarily due to an increase in amortization of servicing assets from higher prepayments of loans being serviced.

Previous wording

Gain on sale of loans decreased primarily due to decreases in sales volume and gain margin. The Company sold SBA loans of $82.3 million with a gain of $3.6 million during the year ended December 31, 2023. During the year ended December 31, 2022, the Company sold SBA loans of $122.9 million with a gain of $8.0 million and residential mortgage loans of $858 thousand with a gain of $8 thousand.

Current wording

Gain on sale of loans increased primarily due to increases in gain margin and sales volume. The Company sold SBA loans of $85.8 million with a gain of $4.6 million during the year ended December 31, 2025. During the year ended December 31, 2024, the Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain.

Previous wording

Other income included wire and remittance fees of $625 thousand and $643 thousand, respectively, and debit card interchange fees of $339 thousand and $335 thousand, respectively, for the years ended December 31, 2023 and 2022.

Current wording

Other income included wire and remittance fees of $699 thousand and $626 thousand, respectively, and debit card interchange fees of $396 thousand and $340 thousand, respectively, for the years ended December 31, 2025 and 2024.

Previous wording

Gain on sale of loans increased primarily due to an increase in gain margin, partially offset by a decrease in sales volume. The Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain during the year ended December 31, 2024. During the year ended December 31, 2023, SBA loans of $82.3 million with a gain of $3.6 million during the year ended December 31, 2023.

Current wording

Gain on sale of loans increased primarily due to an increase in gain margin, partially offset by a decrease in sales volume. The Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain during the year ended December 31, 2024. During the year ended December 31, 2023, the Company sold SBA loans of $82.3 million with a gain of $3.6 million.

Previous wording

Salaries and employee benefits increased primarily due to increases in wages and other employee benefits, partially offset by decreases in bonus and vacation accruals, and incentives tied to LPO originated SBA loan sales and loan origination cost, which offsets the recognition of salaries. The number of full-time equivalent employees averaged 272.5 for the year ended December 31, 2023 compared to 268.3 for the year ended December 31, 2022.

Current wording

Salaries and employee benefits increased primarily due to increases in bonus accrual, group insurance and stock compensation expenses, partially offset by an increase in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense. The number of full-time equivalent employees averaged 264.3 for the year ended December 31, 2025 compared to 265.8 for the year ended December 31, 2024.

Previous wording

Salaries and employee benefits increased primarily due to increases in salaries, bonus accrual, and incentives tied to LPO originated SBA loan sales, partially offset by a decrease in vacation accruals. The number of full-time equivalent employees averaged 265.8 for the year ended December 31, 2024 compared to 272.5 for the year ended December 31, 2023.

Current wording

Salaries and employee benefits increased primarily due to increases in salaries, bonus accrual, and incentives tied to SBA loan sales, partially offset by a decrease in vacation accruals. The number of full-time equivalent employees averaged 265.8 for the year ended December 31, 2024 compared to 272.5 for the year ended December 31, 2023.

Previous wording

Occupancy and equipment expense increased primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and two branches into one location in Orange County, California in 2024.

Current wording

Occupancy and equipment expense increased primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and the consolidation of two branches into one location in Orange County, California in 2024.

Previous wording

Other expense included other loan related legal expenses of $432 thousand and $534 thousand, respectively, armed guard expense of $867 thousand and $798 thousand, respectively, office expenses of $2.2 million and $2.2 million, respectively. In addition, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guarantee during the second quarter of 2024. The Company has retained a law firm specializing in SBA recovery and intends to seek that SBA reconsider its decision so that the Company may recoup all or part of the reimbursement.

Current wording

Other expense included other loan related legal expenses of $432 thousand and $534 thousand, respectively, armed guard expense of $867 thousand and $798 thousand, respectively, office expenses of $2.2 million and $2.2 million, respectively, for the years ended December 31, 2024 and 2023. In addition, during the year ended December 31, 2024, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was determined by the SBA to be ineligible for the guarantee.

Previous wording

Income tax expense was $10.5 million, $12.6 million and $14.4 million, respectively, and the effective tax rate was 28.9%, 29.0% and 29.2%, respectively, for the years ended December 31, 2024, 2023 and 2022.

Current wording

Income tax expense was $15.0 million, $10.5 million and $12.6 million, respectively, and the effective tax rate was 28.6%, 28.9% and 29.0%, respectively, for the years ended December 31, 2025, 2024 and 2023.

Previous wording

Total carrying value of investment securities were $146.3 million at December 31, 2024, an increase of $3.0 million, or 2.1%, from $143.3 million at December 31, 2023. The increase was primarily due to purchases of $23.5 million, partially offset by principal paydowns and calls of $19.8 million, a decrease in fair value of securities available-for-sale of $541 thousand, and net premium amortization of $159 thousand.

Current wording

Total carrying value of investment securities were $160.0 million at December 31, 2025, an increase of $13.7 million, or 9.3%, from $146.3 million at December 31, 2024. The increase was primarily due to purchases of $31.7 million and an increase in fair value of securities available-for-sale of $6.3 million, partially offset by principal paydowns and calls of $24.2 million and net premium amortization of $146 thousand.

Previous wording

As of December 31, 2024 and 2023, 95.3% and 94.7%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of December 31, 2024 and 2023.

Current wording

As of December 31, 2025 and 2024, 95.5% and 95.3%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of December 31, 2025 and 2024.

Previous wording

On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings. Balance sheet information and results for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310.

Current wording

On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings. Balance sheet information and results for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310. The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated:

Previous wording

The increase in ACL for the year ended December 31, 2024 was primarily due to increases in loans held-for-investment and reserve related to qualitative adjustment factors, partially offset by decreases in quantitatively measured loss reserves and reserves on individually evaluated loans.

Current wording

The increase in ACL for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors.

Previous wording

The increase in qualitative reserve was primarily due to increases in maximum loss rate and charge-offs of commercial and industrial loans. The decrease in the quantitatively measured loss reserve requirement was primarily due to the improved year-over-year change in real GDP forecast, partially offset by the increased unemployment rate forecast. The Company utilizes these forecasts published by the Federal Open Market Committee (“FOMC”). The next year-end year-over-year change in forecasted real GDP increased to 2.1% in the December 2024 FOMC meeting from 1.4% in December 2023. The forecasted next year-end national unemployment rate increased to 4.3% in the December 2024 FOMC meeting from 4.1% in December 2023. Overall changes in macroeconomic projections resulted the decreases of PD and LGD rates across majority of the loan segments leading to lower overall expected loss measurements. Loans individually evaluated for impairment totaled $52.0 million and $40.3 million, respectively, and related reserve totaled $59 thousand and $264 thousand, respectively, at December 31, 2024 and 2023.

Current wording

The increase in the quantitatively measured loss reserve requirement was primarily due to the changes in the macroeconomics outlook and prepayment assumption updates. The Company utilizes forecasts published by the Federal Open Market Committee (“FOMC”). The next year-end year-over-year change in forecasted real GDP increased to 2.3% in the December 2025 FOMC meeting from 2.1% in December 2024. However, the projected percent change in year-over-year real GDP over the first 3 quarters of the forecast period were lower for December 2025 ACL measurement than those used prior year. The forecasted next year-end national unemployment rate increased to 4.4% in the December 2025 FOMC meeting from 4.3% in December 2024. Overall changes in macroeconomic projections resulted in the increases of PD and LGD rates across majority of the loan segments leading to higher overall expected loss measurements.

Previous wording

Total nonaccrual loans held-for-investment were $4.7 million at December 31, 2024, an increase of $777 thousand, or 19.8%, from $3.9 million at December 31, 2023. The increase was primarily due to loans placed on nonaccrual status during the year ended December 31, 2024 of $7.3 million, partially offset by payoffs and paydowns of $3.8 million, loans returned to accrual status of $2.0 million, a loan transferred to OREO of $94 thousand, and charge-offs of $691 thousand.

Current wording

Total nonaccrual loans held-for-investment were $7.9 million at December 31, 2025, an increase of $3.2 million, or 68.5%, from $4.7 million at December 31, 2024. The increase was primarily due to loans placed on nonaccrual status during the year ended December 31, 2025 of $6.1 million, partially offset by payoffs and paydowns of $2.3 million and charge-offs of $582 thousand.

Previous wording

Additional income of approximately $547 thousand would have been recorded during the year ended December 31, 2024, had these loans been paid in accordance with their original terms throughout the periods indicated.

Current wording

Additional income of approximately $624 thousand would have been recorded during the year ended December 31, 2025, had these loans been paid in accordance with their original terms throughout the periods indicated.

Previous wording

The Bank has policies and procedures in place to monitor compliance with the CRE Concentration Guidance. The Bank has set targets for CRE concentration limits as a percentage of total capital in accordance with interagency guidelines and actively manages the Bank’s exposure to CRE lending. The Bank’s construction and land development loans remain a small portion of the loan portfolio and as a percentage of total capital (as defined by the federal bank regulators) were 6.3% and 7.4%, respectively, at December 31, 2024 and 2023. As of December 31, 2024, using regulatory definitions in the CRE Concentration Guidance, CRE loans represented 297.0% of total risk-based capital, as compared to 280.7%, 253.9%, 269.8% and 256.1% as of December 31, 2023, 2022, 2021 and 2020, respectively.

Current wording

The Bank has policies and procedures in place to monitor compliance with the CRE Concentration Guidance. The Bank has set targets for CRE concentration limits as a percentage of total capital in accordance with interagency guidelines and actively manages the Bank’s exposure to CRE lending. The Bank’s construction and land development loans remain a small portion of the loan portfolio and as a percentage of total capital (as defined by the federal bank regulators) were 7.7% and 6.3%, respectively, at December 31, 2025 and 2024. As of December 31, 2025, using regulatory definitions in the CRE Concentration Guidance, CRE loans represented 307.7% of total risk-based capital, as compared to 297.0%, 280.7%, 253.9% and 269.8% as of December 31, 2024, 2023, 2022 and 2021, respectively.

Previous wording

Loans held-for-sale were $6.3 million at December 31, 2024, an increase of $1.1 million, or 22.1%, from $5.2 million at December 31, 2023. The increase was primarily due to originations of $74.0 million and a loan transferred from loans held-for-investment of $676 thousand, partially offset by sales of $71.7 million and pay-downs and pay-offs of $1.8 million.

Current wording

Loans held-for-sale were $12.1 million at December 31, 2025, an increase of $5.8 million, or 91.9%, from $6.3 million at December 31, 2024. The increase was primarily due to originations of $92.2 million, partially offset by sales of $85.8 million and pay-downs and pay-offs of $643 thousand.

Previous wording

As of December 31, 2024 and 2023, total deposits were comprised of 20.9% and 25.3%, respectively, of noninterest-bearing demand accounts, 17.9% and 17.9%, respectively, of savings, NOW and money market accounts and 61.2% and 56.8%, respectively, of time deposits.

Current wording

As of December 31, 2025 and 2024, total deposits were comprised of 19.9% and 20.9%, respectively, of noninterest-bearing demand accounts, 24.2% and 17.9%, respectively, of savings, NOW and money market accounts and 55.9% and 61.2%, respectively, of time deposits.