FIRST NORTHERN COMMUNITY BANCORP
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
FNRN$17.01-4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0001140361-25-007622
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0001437749-26-008040
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 142 current paragraphs.
87 unchanged; 46 reworded; 9 added; 10 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Non-interest income totaled $6.1 million in 2025, an increase of 1.3% from $6.0 million in 2024. The increase was primarily due to a decrease in realized losses on sales/calls of available for sale securities and an increase in other income, which was partially offset by decreases in service charges on deposit accounts and debit card income.
Current report
Deposits totaled $1.68 billion as of December 31, 2025, a 1.2% decrease from $1.70 billion as of December 31, 2024.
Current report
In November 2025, the FASB issued ASU 2025-08,Financial Instruments - Credit Losses (Topic 326): Purchased Loans. This ASU expands the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
Current report
In November 2025, the FASB issued ASU 2025-09,*Derivatives and Hedging (Topic 815): Hedge Accounting Improvements.*This ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: similar risk assessment for cash flow hedges, hedging forecasted interest payments on choose-your-rate debt instruments, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of ASU No. 2025-09. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
Current report
In December 2025, the FASB issued ASU 2025-11,Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU: clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP; incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity; and improve guidance about information included in and the format of interim financial statements. The amendments in this ASU are effective for pubic business entities for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
Current report
In December 2025, the FASB issued ASU 2025-12,*Codification Improvements.*The amendments in this ASU update the FASB ASC for a broad range of Topics arising from technical corrections, unintended application of the ASC, clarifications, and other minor improvements. The amendments in this ASU, which addresses 33 issues, affect a wide variety of Topics in the ASC and apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
Current report
(Dollars in thousands)
Current report
Net income for the year ended December 31, 2025, was $21.1 million, representing an increase of $1.1 million, or 5.5%, compared to net income of $20.0 million for the year ended December 31, 2024. The increase in net income was primarily attributable to an increase in net interest income of $3.1 million and a decrease in provision for income tax of $1.5 million, which was partially offset by an increase in non-interest expenses of $3.4 million. The increase in net interest income was primarily due to increases in yield on loans and investment securities and a decrease in volume and rate paid on time certificates, which was partially offset by decreases in volume and yield on due from banks and increases in rates paid on interest-bearing transaction deposits and savings and MMDAs. The increase in non-interest expenses was primarily due to an increase in salaries and employee benefits, occupancy and equipment and data processing expenses. The decrease in provision for income tax was due to the execution of a tax planning strategy that involved purchasing investment tax credits under the Inflation Reduction Act of 2022 tied to alternative energy projects. The investment tax credits were acquired at a discount and recognized as a reduction to income tax expense in 2025.
Current report
Interest expense on interest-bearing liabilities for 2025 was up 3.8% from 2024, increasing from $14,292,000 to $14,835,000. The increase in interest expense on interest-bearing liabilities was the result of a 2.4% increase in interest-bearing liabilities coupled with a 2 basis point increase in interest rates paid on interest-bearing liabilities.
Removed paragraphs (10)
Previous report
Non-interest income totaled $6.0 million in 2024, a decrease of 23.3% from $7.8 million in 2023. The decrease was primarily due to a gain on bargain purchase of $1.4 million as a result of the acquisition of the Colusa, Willows, and Orland branches in 2023, which was not repeated in 2024.
Previous report
Deposits totaled $1.70 billion as of December 31, 2024, a 0.5% increase from $1.69 billion as of December 31, 2023.
Previous report
Business Combinations
Previous report
The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase consideration over the fair value of acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill and a deficit is recognized as a bargain purchase gain.
Previous report
Goodwill and intangible assets acquired in a business combination and that are determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has no goodwill arising from business combinations. The Company recognized a bargain purchase gain arising from business combinations. The Company recorded the fair values based on the valuations available as of reporting date. In accordance with business combination accounting guidance, the Company continued to evaluate these fair values for one year following the acquisition date. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible assets arising from business combinations are amortized on an accelerated basis reflecting the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. The estimated life of the core deposit intangible is approximately 10 years.
Previous report
In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. This ASU extends the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
Previous report
In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture (JV) Formations: Recognition and Initial Measurement. The guidance requires newly formed JVs to apply a new basis of accounting to all of its contributed net assets, which results in the JV initially measuring its contributed net assets under ASC 805-20, Business Combinations. The new guidance would be applied prospectively and is effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
Previous report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing disclosures in Topic 280. The Company has determined that its current business and operations consist of a single business segment and a single reporting unit. The amendments in ASU 2023-07 are intended to improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company applied this ASU retrospectively with no material impact on the Company's consolidated financial statements; however, new disclosures have been added as applicable for a single reportable operating segment. For additional information, see Note 22 to the Consolidated Financial Statements in this Form 10-K.
Previous report
Net income for the year ended December 31, 2024, was $20.0 million, representing a decrease of $1.6 million, or 7.1%, compared to net income of $21.6 million for the year ended December 31, 2023. The decrease in net income was attributable to a decrease in net interest income of $2.2 million and a decrease in non-interest income of $1.8 million, which was partially offset by a decrease in provision for credit losses of $1.4 million and a decrease in non-interest expenses of $0.8 million. The decrease in non-interest income was primarily due to the bargain purchase gain of $1.4 million as a result of the branch acquisitions in 2023 which was not repeated in 2024. The decrease in provision for credit losses was due to decreases in unfunded commitments.
Previous report
Interest expense on deposits for 2024 was up 88.5% from 2023, increasing from $7,584,000 to $14,292,000. The increase in interest expense on deposits was the result of a 70 basis point increase in interest rates paid on interest-bearing deposits, which was partially offset by a 1.1% decrease in average balances of interest-bearing deposits.
Reworded paragraphs (46)
Previous wording
– MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Current wording
ITEM 7**–** MANAGEMENT**’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Previous wording
The Company reported net income of $20.0 million for 2024, a 7.1% decrease compared to net income of $21.6 million for 2023. Net income per common share for 2024 was $1.26, a decrease of 6.7% compared to net income per common share of $1.35 for 2023. Net income per common share on a fully diluted basis was $1.24 for 2024, a decrease of 7.5% compared to net income per common share on a fully diluted basis of $1.34 for 2023.
Current wording
The Company reported net income of $21.1 million for 2025, a 5.5% increase compared to net income of $20.0 million for 2024. Net income per common share for 2025 was $1.30, an increase of 8.3% compared to net income per common share of $1.20 for 2024. Net income per common share on a fully diluted basis was $1.27 for 2025, an increase of 6.7% compared to net income per common share on a fully diluted basis of $1.19 for 2024.
Previous wording
Net interest income totaled $64.4 million for 2024, a decrease of 3.3% from $66.5 million in 2023, primarily due to an increase in interest expense due to an increase in average rate paid on average interest-bearing deposits, which was partially offset by an increase in interest and dividend income due to an increase in yield on average earning assets. Net interest margin was 3.60% for the year ended 2024 which was a 2.6% or 10 basis point decrease from the 3.70% reported for the year ended 2023.
Current wording
Net interest income totaled $67.5 million for 2025, an increase of 4.8% from $64.4 million in 2024, primarily due to increases in yields earned on loans and investment securities, which was partially offset by decreases both in volume and yield earned on due from banks and increases in average rate paid on average interest-bearing transaction deposits and savings and MMDAs. Net interest margin was 3.77% for the year ended 2025 which was a 4.7% or 17 basis point increase from the 3.60% reported for the year ended 2024.
Previous wording
Reversal of provision for credit losses totaled $0.3 million in 2024, compared to provision for credit losses of $1.1 million in 2023. The reversal of provision for credit losses in 2024 was primarily due to decreases in unfunded commitments.
Current wording
No provision for credit losses was recorded in 2025, compared to a reversal of provision for credit losses of $0.3 million in 2024. No provision for credit losses was recorded in 2025 primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in forecasted loss rates and improvements in qualitative risk factors.
Previous wording
Non-interest expenses totaled $42.8 million for 2024, down 2.0% from $43.6 million in 2023. The decrease was primarily due to decreases in salaries and employee benefits, which was partially offset by increases in occupancy and equipment, data processing and consulting fees. The decrease in salaries and benefits was primarily due to decreases in commissions, contingent compensation and profit sharing expense. The increases in occupancy and equipment and data processing were primarily due to increases in service contracts. The increase in consulting fees was primarily due to staffing searches.
Current wording
Non-interest expenses totaled $46.2 million for 2025, up 7.9% from $42.8 million in 2024. The increase was primarily due to increases in salaries and employee benefits, occupancy and equipment, data processing and legal fees. The increase in salaries and benefits was primarily due to an increase in full-time equivalent employees and increases in contingent compensation and group medical insurance expense. The increase in occupancy and equipment was primarily due to an increase in service contracts related to upgrading and maintaining facilities. The increase in data processing was primarily due to an increase in costs of service contracts.
Previous wording
The Company reported total assets of $1.89 billion and $1.87 billion for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company reported total assets of $1.91 billion and $1.89 billion for the years ended December 31, 2025 and 2024, respectively.
Previous wording
Investments totaled $633.9 million as of December 31, 2024, a 10.7% increase from $572.4 million as of December 31, 2023. U.S. Treasury securities totaled $105.5 million as of December 31, 2024, up 21.1% from $87.2 million as of December 31, 2023; securities of U.S. government agencies and corporations totaled $95.7 million, down 16.9% from $115.1 million as of December 31, 2023; obligations of state and political subdivisions totaled $67.6 million, up 30.8% from $51.7 million as of December 31, 2023; collateralized mortgage obligations totaled $95.0 million, up 4.4% from $90.9 million as of December 31, 2023; and mortgage-backed securities totaled $270.1 million, up 18.7% from $227.5 million as of December 31, 2023.
Current wording
Investments totaled $617.2 million as of December 31, 2025, a 2.6% decrease from $633.9 million as of December 31, 2024. U.S. Treasury securities totaled $87.5 million as of December 31, 2025, down 17.0% from $105.5 million as of December 31, 2024; securities of U.S. government agencies and corporations totaled $85.3 million, down 10.8% from $95.7 million as of December 31, 2024; obligations of state and political subdivisions totaled $75.0 million, up 11.0% from $67.6 million as of December 31, 2024; collateralized mortgage obligations totaled $92.3 million, down 2.8% from $95.0 million as of December 31, 2024; and mortgage-backed securities totaled $277.1 million, up 2.6% from $270.1 million as of December 31, 2024.
Previous wording
Loans (including loans held-for-sale), net of allowance, totaled $1.047 billion as of December 31, 2024, a 0.5% decrease from $1.052 billion as of December 31, 2023. Commercial loans totaled $117.9 million as of December 31, 2024, up 10.3% from $106.9 million as of December 31, 2023; commercial real estate loans were $723.6 million, up 0.3% from $721.7 million as of December 31, 2023; agriculture loans were $92.6 million, down 12.5% from $105.8 million as of December 31, 2023; residential mortgage loans were $105.9 million, down 1.3% from $107.3 million as of December 31, 2023; residential construction loans were $6.9 million, down 44.3% from $12.3 million as of December 31, 2023; and consumer loans totaled $15.7 million, up 5.7% from $14.9 million as of December 31, 2023.
Current wording
Loans (including loans held-for-sale), net of allowance, totaled $1.050 billion as of December 31, 2025, a 0.4% increase from $1.047 billion as of December 31, 2024. Commercial loans totaled $146.2 million as of December 31, 2025, up 24.0% from $117.9 million as of December 31, 2024; commercial real estate loans were $702.5 million, down 2.9% from $723.6 million as of December 31, 2024; agriculture loans were $93.6 million, up 1.1% from $92.6 million as of December 31, 2024; residential mortgage loans were $100.7 million, down 4.9% from $105.9 million as of December 31, 2024; residential construction loans were $5.8 million, down 14.9% from $6.9 million as of December 31, 2024; and consumer loans totaled $15.5 million, down 1.5% from $15.7 million as of December 31, 2024.
Previous wording
Stockholders' equity increased to $176.3 million as of December 31, 2024, a 10.7% increase from $159.2 million as of December 31, 2023. The increase was primarily due to 2024 net income of $20.0 million.
Current wording
Stockholders' equity increased to $212.0 million as of December 31, 2025, a 20.2% increase from $176.3 million as of December 31, 2024. The increase was primarily due to 2025 net income of $21.1 million and a decrease in accumulated other comprehensive loss, net of $18.4 million.
Previous wording
The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to the allowance for credit losses and business combinations. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Current wording
The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to the allowance for credit losses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Previous wording
In determining the ACL, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. The Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from Moody’s Analytics. Individual loan credit quality indicators, including historical credit losses, have been statistically correlated with various econometrics, including national unemployment rate, and national gross domestic product. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process. Increases in external risk factors due to more pessimistic business and economic conditions could potentially add $5.6 million based on existing loan balances, if not more, to the ACL. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy and changes in interest rates.
Current wording
In determining the ACL, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. The Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from Moody’s Analytics. Individual loan credit quality indicators, including historical credit losses, have been statistically correlated with various econometrics, including national unemployment rate, national gross domestic product, and single-family home prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process. Increases in external risk factors due to more pessimistic business and economic conditions could potentially add $4.6 million based on existing loan balances, if not more, to the ACL. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy and changes in interest rates.
Previous wording
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Among other things, these amendments 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 has evaluated this ASU and does not expect the adoption to have a material impact on the Company's consolidated financial statements.
Current wording
In December 2023, the FASB issued ASU 2023-09,*Income Taxes (Topic 740): Improvements to Income Tax Disclosures.*Among other things, these amendments 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 adopted this ASU retrospectively. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. For additional information, see Note 18 to the Consolidated Financial Statements in this Form 10-K.
Previous wording
In March 2024, the FASB issued guidance within ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with a company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic 718: Compensation—Stock Compensation. The amendment in ASC paragraph 718-10-15-3 is solely intended to improve the overall clarity and does not change the guidance. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If a company adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes the interim period. The amendments should be applied either (1)
Current wording
In March 2024, the FASB issued guidance within ASU 2024-01,Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with a company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic 718: Compensation—Stock Compensation. The amendment in ASC paragraph 718-10-15-3 is solely intended to improve the overall clarity and does not change the guidance. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If a company adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes the interim period. The amendments should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) on a prospective basis. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements, as the Company does not typically provide these types of awards. For additional information, see Note 15 to the Consolidated Financial Statements in this Form 10-K.
Previous wording
The mix of investment securities held by the Company at December 31 of the previous two fiscal years is as follows (dollars in thousands):
Current wording
The mix of investment securities held by the Company at December 31 of the previous two fiscal years was as follows (dollars in thousands):
Previous wording
The mix of loans, net of deferred origination fees and costs and allowance for credit losses and excluding loans held-for-sale, at December 31, 2024 and December 31, 2023 is as follows (dollars in thousands):
Current wording
The mix of loans, net of deferred origination fees and costs and allowance for credit losses and excluding loans held-for-sale, at December 31, 2025 and December 31, 2024 was as follows (dollars in thousands):
Previous wording
As shown in the comparative figures for loan mix during 2024 and 2023, total loans decreased primarily as a result of decreases in agriculture, residential mortgage and residential construction loans, which was partially offset by increases in commercial, commercial real estate and consumer loans.
Current wording
As shown in the comparative figures for loan mix during 2025 and 2024, total loans increased primarily as a result of an increase in commercial loans, which was partially offset by decreases in commercial real estate and residential mortgage loans.
Previous wording
Non-accrual loans amounted to $11,212,000 at December 31, 2024, and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $7,993,000, two agriculture loans totaling $2,236,000, three residential mortgage loans totaling $202,000 and four consumer loans totaling $642,000. Non-accrual loans amounted to $3,998,000 at December 31, 2023, and were comprised of two agriculture loans totaling $2,871,000, three residential mortgage loan totaling $424,000 and four consumer loans totaling $703,000.
Current wording
Non-accrual loans amounted to $6,030,000 at December 31, 2025, and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $657,000, four agriculture loans totaling $4,423,000, three residential mortgage loans totaling $174,000 and five consumer loans totaling $637,000. Non-accrual loans amounted to $11,212,000 at December 31, 2024, and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $7,993,000, two agriculture loans totaling $2,236,000, three residential mortgage loans totaling $202,000 and four consumer loans totaling $642,000.
Previous wording
If interest on non-accrual loans had been accrued, such interest income would have approximated $1,529,000 and $364,000 during the years ended December 31, 2024 and 2023, respectively. Income actually recognized on nonaccrual loans at payoff approximated $450,000 and $1,626,000 for the years ended December 31, 2024 and 2023, respectively.
Current wording
If interest on non-accrual loans had been accrued, such interest income would have approximated $627,000 and $497,000 during the years ended December 31, 2025 and 2024, respectively. Income actually recognized on nonaccrual loans at payoff approximated $421,000 and $450,000 for the years ended December 31, 2025 and 2024, respectively.
Previous wording
As the following table illustrates, total non-performing assets, which consists of loans on non-accrual status, loans past due 90-days and still accruing and Other Real Estate Owned ("OREO") net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, increased $2,739,000, or 32.9%, to $11,073,000 from December 31, 2023 to December 31, 2024. Non-performing assets net of guarantees represented 0.6% and 0.5% of total assets at December 31, 2024 and 2023, respectively. The Bank’s management believes that the $11,212,000 in non-accrual loans were appropriately reflected at their fair value at December 31, 2024. However, no assurance can be given that the existing or any additional collateral will be sufficient to secure full recovery of the obligations owed under these loans.
Current wording
As the following table illustrates, total non-performing assets, which consists of loans on non-accrual status, loans past due 90-days and still accruing and Other Real Estate Owned ("OREO") net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, decreased $4,750,000, or 42.9%, to $6,323,000 from December 31, 2024 to December 31, 2025. Non-performing assets net of guarantees represented 0.3% and 0.6% of total assets at December 31, 2025 and 2024, respectively. The Bank’s management believes that the $6,030,000 in non-accrual loans were appropriately reflected at the lower of the carrying value of the loan or the fair value of the underlying collateral at December 31, 2025. However, no assurance can be given that the existing or any additional collateral will be sufficient to secure full recovery of the obligations owed under these loans.
Previous wording
The Company had no loans that were 90 days or more past due and still accruing at December 31, 2024. The Company had two loans totaling $4,336,000 that were 90 days or more past due and still accruing at December 31, 2023. The two loans totaling $4,336,000 that were 90 days or more past due and still accruing at December 31, 2023 were comprised of one residential construction loan totaling $3,420,000 and one residential mortgage loan totaling $916,000 that were both well secured and in process of collection.
Current wording
The Company had no loans that were 90 days or more past due and still accruing at December 31, 2025.
Previous wording
OREO consists of property that the Company has acquired by deed in lieu of foreclosure or through foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. The estimated fair value of the property is determined prior to transferring the balance to OREO. The balance transferred to OREO is the estimated fair value of the property less estimated cost to sell. Impairment may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals or loan officer evaluations are then conducted periodically thereafter charging any additional impairment to the appropriate expense account. The Company had no OREO as of the years ended December 31, 2024 and 2023.
Current wording
OREO consists of property that the Company has acquired by deed in lieu of foreclosure or through foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. OREO can also consist of Company owned properties that the Company has determined are no longer intended for use or future development. The estimated fair value of the property is determined prior to transferring the balance to OREO. The balance transferred to OREO is the estimated fair value of the property less estimated cost to sell. Impairment may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals or loan officer evaluations are then conducted periodically thereafter charging any additional impairment to the appropriate expense account. The Company had OREO totaling $1,241,000 as of the year ended December 31, 2025. OREO as of December 31, 2025 represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing it for sale. The Company had no OREO as of December 31, 2024.
Previous wording
Excluding the non-performing loans, net of guarantees cited previously, loans totaling $11,782,000 and $12,327,000 were classified as substandard or doubtful loans, representing potential problem loans at December 31, 2024 and 2023, respectively. In Management’s opinion, the potential loss related to these problem loans was sufficiently covered by the Bank’s existing loan loss reserve (Allowance for Credit Losses) at December 31, 2024 and 2023. The ratio of the allowance for credit losses to total loans at December 31, 2024 and 2023 was 1.49% and 1.55%, respectively. Management considered the allowance for credit losses of $15,885,000 to be adequate as a reserve against expected losses as of December 31, 2024.
Current wording
Excluding the non-performing loans, net of guarantees cited previously, loans totaling $18,259,000 and $11,782,000 were classified as substandard or doubtful loans, representing potential problem loans at December 31, 2025 and 2024, respectively. In Management’s opinion, the potential loss related to these problem loans was sufficiently covered by the Bank’s existing loan loss reserve (Allowance for Credit Losses) at December 31, 2025 and 2024. The ratio of the allowance for credit losses to total loans at December 31, 2025 and 2024 was 1.36% and 1.49%, respectively. The decrease in the ratio of the allowance for credit losses to total loans was primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in forecasted loss rates and improvements in qualitative risk factors. Management considered the allowance for credit losses of $14,519,000 to be adequate as a reserve against expected losses as of December 31, 2025.
Previous wording
Approximately 40% and 37% of our deposits were uninsured as of December 31, 2024 and 2023, respectively.
Current wording
Approximately 40% of our deposits were uninsured for each of the years ended December 31, 2025 and 2024.
Previous wording
Time Deposits include brokered deposits totaling $9,999,000 and $39,986,000 as of December 31, 2024 and December 31, 2023, respectively. The brokered deposits purchased are time deposits $250,000 (dollars in thousands) or less that mature within twelve months.
Current wording
Time Deposits include brokered deposits totaling $0 and $9,999,000 as of December 31, 2025 and December 31, 2024, respectively. The brokered deposits purchased are time deposits $250,000 (dollars in thousands) or less that mature within twelve months.
Previous wording
Additional short-term borrowings available to the Company consist of a line of credit and advances with the Federal Home Loan Bank ("FHLB") secured under terms of a blanket collateral agreement by a pledge of FHLB stock and all loans held by the Company. At December 31, 2024, the Company had a current collateral borrowing capacity with the FHLB of $403,087,000 and, at such date, also had unsecured formal lines of credit totaling $130,000,000 with correspondent banks.
Current wording
Additional short-term borrowings available to the Company consist of a line of credit and advances with the Federal Home Loan Bank ("FHLB") secured under terms of a blanket collateral agreement by a pledge of FHLB stock and all loans held by the Company. At December 31, 2025, the Company had a current collateral borrowing capacity with the FHLB of $390,191,000 and, at such date, also had unsecured formal lines of credit totaling $130,000,000 with correspondent banks.
Previous wording
The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees. Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board. Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. At December 31, 2024, the benefit obligation was $4,500,000, of which $4,793,000 was recorded in interest payable and other liabilities and $(293,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2023, the benefit obligation was $4,979,000, of which $4,879,000 was recorded in interest payable and other liabilities and $100,000 was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.
Current wording
The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees. Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board. Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. At December 31, 2025, the benefit obligation was $4,405,000, of which $4,716,000 was recorded in interest payable and other liabilities and $(311,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2024, the benefit obligation was $4,500,000, of which $4,793,000 was recorded in interest payable and other liabilities and $(293,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.
Previous wording
The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank. At December 31, 2024, the benefit obligation was $397,000, of which $539,000 was recorded in interest payable and other liabilities and $(142,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2023, the benefit obligation was $424,000, of which $596,000 was recorded in interest payable and other liabilities and $(172,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.
Current wording
The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank. At December 31, 2025, the benefit obligation was $380,000, of which $480,000 was recorded in interest payable and other liabilities and $(100,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2024, the benefit obligation was $397,000, of which $539,000 was recorded in interest payable and other liabilities and $(142,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.
Previous wording
Total assets were $1.89 billion as of December 31, 2024, representing an increase of $19.9 million, or 1.1%, compared to total assets of $1.87 billion as of December 31, 2023. For the year ended December 31, 2024 compared to the year ended December 31, 2023, there was a $61.5 million increase in investment securities, which was partially offset by a $29.8 million decrease in cash, $3.6 million decrease in certificates of deposit, $5.6 million decrease in net loans (including loans held-for-sale), $0.7 million decrease in premises and equipment, $0.8 million decrease in core deposit intangible and $1.1 million decrease in interest receivable and other assets. Total deposits increased $7.6 million, or 0.5%, to $1.70 billion as of December 31, 2024, compared to $1.69 billion at December 31, 2023.
Current wording
Total assets were $1.91 billion as of December 31, 2025, representing an increase of $19.2 million, or 1.0%, compared to total assets of $1.89 billion as of December 31, 2024. For the year ended December 31, 2025 compared to the year ended December 31, 2024, there was a $26.1 million increase in cash, $3.6 million increase in net loans, $9.9 million increase in interest receivable and other assets, which was partially offset by a $16.6 million decrease in investment securities and a $5.9 million decrease in certificates of deposit. Total deposits decreased $20.9 million, or 1.2%, to $1.68 billion as of December 31, 2025, compared to $1.70 billion at December 31, 2024.
Previous wording
Net interest income is the excess of interest and fees earned on the Bank’s loans, investment securities, federal funds sold and banker’s acceptances over the interest expense paid on deposits and other borrowed funds which are used to fund those assets. Net interest income is primarily affected by the yields and mix of the Bank’s interest-earning assets and interest-bearing liabilities outstanding during the period. The $4,529,000 increase in the Bank's interest and dividend income in 2024 from 2023 was primarily driven by an increase in interest rates and an increase in average balance of loans, which was partially offset by a decrease in average balances of due from banks and certificates of deposit. The $3,186,000 increase inthe Bank’s interest income on loans was primarily driven by an increase of $1,101,000 attributable to an increase in interest rates compounded by an increase of $2,085,000 driven by an increase in average loans outstanding. The $2,117,000 decrease in the Bank’s interest income on due from banks was primarily driven by a decrease of $2,472,000 due to the decreased average due from bank balances outstanding, which was partially offset by an increase of $355,000 attributable to an increase in average interest rates paid on excess reserves at the FRB. The $33,000 decrease in the Bank's interest income on certificates of deposit was driven by a decrease of $124,000 due to the decrease in average certificates of deposit outstanding, which was partially offset by an increase of $91,000 due to the increase in average interest rates paid on certificates of deposit. The $3,247,000 increase in the Bank’s interest income on investment securities was driven by an increase of $3,262,000 due to an increase in interest rates, which was partially offset by a decrease of $15,000 driven by decreased investment securities balances outstanding. The $6,708,000 increase in the Bank's interest expense on deposits was primarily driven by an increase of $4,978,000 due to increases in interest rates coupled with an increase of $1,730,000 due to an increase in average time certificates balances outstanding. See “Analysis of Changes in Interest Income and Interest Expense” set forth on page 40 of this Annual Report on Form 10-K for the effects of interest rates and loan/deposit volume on net interest income.
Current wording
Net interest income is the excess of interest and fees earned on the Bank’s loans, investment securities, federal funds sold and banker’s acceptances over the interest expense paid on deposits and other borrowed funds which are used to fund those assets. Net interest income is primarily affected by the yields and mix of the Bank’s interest-earning assets and interest-bearing liabilities outstanding during the period. The $3,655,000 increase in the Bank's interest and dividend income in 2025 from 2024 was primarily driven by an increase in interest rates on loans and investment securities, which was partially offset by a decrease in the average balance and interest rate on due from banks. The $2,610,000 increase in the Bank's interest income on loans was primarily driven by an increase of $2,444,000 attributable to an increase in interest rates. The $2,204,000 decrease in the Bank’s interest income on due from banks was primarily driven by a decrease of $1,000,000 due to the decreased average due from bank balances outstanding and a decrease of $1,204,000 attributable to a decrease in average interest rates paid on excess reserves at the FRB. The $132,000 decrease in the Bank's interest income on certificates of deposit was driven by a decrease of $147,000 due to the decrease in average certificates of deposit outstanding, which was partially offset by an increase of $15,000 due to the increase in average interest rates paid on certificates of deposit. The $3,414,000 increase in the Bank’s interest income on investment securities was driven by an increase of $2,773,000 due to an increase in interest rates and an increase of $641,000 driven by increased investment securities balances outstanding. The $543,000 increase in the Bank's interest expense on deposits was primarily driven by an increase of $568,000 due to increases in interest rates, which was partially offset by a decrease of $25,000 due to a decrease in average time certificates balances outstanding. See “Analysis of Changes in Interest Income and Interest Expense” in this Annual Report on Form 10-K for the effects of interest rates and loan/deposit volume on net interest income.
Previous wording
The FRB influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. As of December 31, 2023, the prime rate was 8.50%.
Current wording
The FRB influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. As of December 31, 2024, the prime rate was 7.50%. The prime rate decreased several times beginning in September 2025, decreasing to 6.75% as of December 31, 2025.
Previous wording
As of December 31, 2023, the target range for the federal funds rate was 5.25% to 5.50%. To support economic growth, the FRB cut interest rates in September, November and December. As of December 31, 2024, the target rate for the federal funds rate was 4.25% to 4.50%. For additional information, see “The Bank is Subject to Interest Rate Risk” and “Beginning in 2021, the U.S. Economy Began to Reflect Relatively Rapid Rates of Increase in the Consumer Price Index and Other Economic Indices; a Prolonged Elevated Rate of Inflation Could Present Risks for the U.S. Banking Industry and Our Business”, in “Risk Factors” (Item 1A) of this Annual Report on Form 10-K.
Current wording
As of December 31, 2024, the target range for the federal funds rate was 4.25% to 4.50%. During 2025 the FRB cut interest rates in each of September, October and December. As of December 31, 2025, the target rate for the federal funds rate was 3.50% to 3.75%. For additional information, see “The Bank is Subject to Interest Rate Risk” and “Beginning in 2021, the U.S. Economy Began to Reflect Relatively Rapid Rates of Increase in the Consumer Price Index and Other Economic Indices; a Prolonged Elevated Rate of Inflation Could Present Risks for the U.S. Banking Industry and Our Business”, in “Risk Factors” (Item 1A) of this Annual Report on Form 10-K.
Previous wording
Interest income on loans for 2024 was up 6.1% from 2023, increasing from $55,389,000 to $52,203,000. The increase in interest income on loans was primarily due to higher yields earned on newly originated loans and loans repricing at higher rates coupled with a 4.0% increase in average balance of loans.
Current wording
Interest income on loans for 2025 was up 4.7% from 2024, increasing from $55,389,000 to $57,999,000. The increase in interest income on loans was primarily due to higher yields earned on newly originated loans and loans repricing at higher rates coupled with a 0.3% increase in average balance of loans.
Previous wording
Interest income on interest-bearing due from banks for 2024 was down 24.6% from 2023, decreasing from $8,594,000 to $6,477,000. The decrease in interest income on interest-bearing due from banks was the result of a 27.7% decrease in average balances of interest-bearing due from banks, which was partially offset by a 22 basis point increase in yield on interest-bearing due from banks.
Current wording
Interest income on interest-bearing due from banks for 2025 was down 34.0% from 2024, decreasing from $6,477,000 to $4,273,000. The decrease in interest income on interest-bearing due from banks was the result of a 17.0% decrease in average balances of interest-bearing due from banks coupled with a 109 basis point decrease in yield on interest-bearing due from banks.
Previous wording
Interest income on certificates of deposit for 2024 was down 4.4% from 2023, decreasing from $757,000 to $724,000. The decrease in interest income on certificates of deposit was primarily due to a 15.3% decrease in average balances of certificates of deposit, which was partially offset by a 46 basis point increase in yield on certificates of deposit.
Current wording
Interest income on certificates of deposit for 2025 was down 18.2% from 2024, decreasing from $724,000 to $592,000. The decrease in interest income on certificates of deposit was primarily due to a 19.9% decrease in average balances of certificates of deposit, which was partially offset by an 9 basis point increase in yield on certificates of deposit.
Previous wording
Interest income on investment securities for 2024 was up 27.6% from 2023, increasing from $11,764,000 to $15,011,000. The increase in interest income on investment securities was the result of a 56 basis point increase in investment securities yields, which was partially offset by a 0.6% decrease in average investment securities volume. The Bank deployed excess liquidity into the investment portfolio over the course of 2024 at higher reinvestment rates. Investment securities yields were 2.54% and 1.98% for 2024 and 2023, respectively.
Current wording
Interest income on investment securities for 2025 was up 22.7% from 2024, increasing from $15,011,000 to $18,425,000. The increase in interest income on investment securities was the result of a 3.9% increase in average investment securities volume coupled with a 46 basis point increase in investment securities yields. The Bank deployed excess liquidity into the investment portfolio over the course of 2025 at higher reinvestment rates. Investment securities yields were 3.00% and 2.54% for 2025 and 2024, respectively.
Previous wording
The Bank’s net interest margin (net interest income divided by average earning assets) was 3.60% in 2024 and 3.70% in 2023. The net interest spread (average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities) was 2.92% in 2023 and 3.34% in 2023. The 42 basis point decrease in net spread in 2024 over 2023 was due to an overall increase in interest rates on interest-bearing deposits, which was partially offset by an overall increase in interest rates on earning assets.
Current wording
The Bank’s net interest margin (net interest income divided by average earning assets) was 3.77% in 2025 and 3.60% in 2024. The net interest spread (average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities) was 3.16% in 2025 and 2.98% in 2024. The 18 basis point increase in net spread in 2025 over 2024 was due to an overall increase in interest rates on earning assets, which was partially offset by an overall increase in interest rates on deposits.
Previous wording
The provision for credit losses is established by charges to earnings on management’s evaluation of expected losses on the loan portfolio. Based on this evaluation, the Company recorded a reversal of provision for credit losses of $250,000 in 2024 and a provision for credit losses of $1,100,000 in 2023. The reversal of provision for credit losses in 2024 was primarily due to a decrease in loans outstanding and a decrease in unfunded commitments. The provision for credit losses in 2023 was primarily due to loan growth. The ratio of the Allowance for Credit Losses to total loans at December 31, 2024 was 1.49% compared to 1.55% at December 31, 2023. The ratio of the Allowance for Credit Losses to total non-accrual loans and loans past due 90 days or more, net of guarantees was 143.5% at December 31, 2024, compared to 199.1% at December 31, 2023.
Current wording
The provision for credit losses is established by charges to earnings on management’s evaluation of expected losses on the loan portfolio. Based on this evaluation, the Company recorded no provision for credit losses in 2025 and a reversal of provision for credit losses of $250,000 in 2024. No provision for credit losses was recorded in 2025 primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in loss rates and improvements in risk factors. The reversal of provision for credit losses in 2024 was primarily due to a decrease in loans outstanding and a decrease in unfunded commitments. The ratio of the Allowance for Credit Losses to total loans at December 31, 2025 was 1.36% compared to 1.49% at December 31, 2024. The ratio of the Allowance for Credit Losses to total non-accrual loans and loans past due 90 days or more, net of guarantees was 285.7% at December 31, 2025, compared to 143.5% at December 31, 2024.
Previous wording
Non-interest income consisted primarily of service charges on deposit accounts, net losses on sale of available-for-sale securities, net realized gains on sales of loans held-for-sale, debit card income, gain on bargain purchase and other income. Non-interest income decreased to $6,019,000 in 2024 from $7,845,000 in 2023, representing a decrease of $1,826,000, or 23.3%. The decrease was primarily driven by a bargain purchase gain in 2023 which was not repeated in 2024. The Company recognized a bargain purchase gain totaling $1.4 million as a result of the acquisition of the Colusa, Willows, and Orland branches in 2023.
Current wording
Non-interest income consisted primarily of service charges on deposit accounts, net realized losses on sale of available-for-sale securities, net realized gains on sales of loans held-for-sale, debit card income and other income. Non-interest income increased to $6,097,000 in 2025 from $6,019,000 in 2024, representing an increase of $78,000, or 1.3%.
Previous wording
Non-interest expenses consisted primarily of salaries and employee benefits, occupancy and equipment expense, data processing expense, amortization of core deposit intangible and other expenses. Non-interest expenses decreased to $42,789,000 in 2024 from $43,638,000 in 2023, representing a decrease of $849,000, or 2.0%.
Current wording
Non-interest expenses consisted primarily of salaries and employee benefits, occupancy and equipment expense, data processing expense, amortization of core deposit intangible and other expenses. Non-interest expenses increased to $46,164,000 in 2025 from $42,789,000 in 2024, representing an increase of $3,375,000, or 7.9%.
Previous wording
The decrease in salaries and employee benefits in 2024 was primarily due to a 18.9% decrease in commissions, 55.8% decrease in contingent compensation and 42.3% decrease in profit sharing plan contributions, partially offset by a 67.5% increase in group insurance. The decrease in commissions is primarily due to a decrease in mortgage loan production volumes and deposit growth. The decrease in contingent compensation is primarily due to a decrease in incentive goals met. The decrease in profit sharing plan contributions is primarily due to a change in the calculation of profit sharing plan contributions. The increase in group insurance is primarily due to increased costs of insurance provided to employees. The increase in occupancy and equipment and data processing expense was primarily due to a full year of expenses related to the branches acquired in the first quarter of 2023. The increase in other expenses was primarily due to a 95.4% increase in contributions, a 30.5% increase in consulting fees and a 200.2% increase in loan collection expense, which was partially offset by a 51.5% decrease in legal fees.
Current wording
The increase in salaries and employee benefits in 2025 was primarily due to a 4.1% increase in regular salaries, 47.4% increase in contingent compensation, and 42.1% increase in group insurance, partially offset by a 24.5% decrease in commissions. The increase in regular salaries, contingent compensation, and group insurance was primarily due to an increase in full-time equivalent employees and increased costs of insurance provided to employees. The decrease in commissions was primarily due to a decrease in mortgage loan production volumes and deposit growth. The increase in occupancy and equipment was primarily due to an increase in service contracts related to upgrades to certain facilities coupled with the overall maintenance of facilities. The increase in data processing was primarily due to an increase in costs of service contracts. The increase in other expenses was primarily due to a 257.2% increase in legal fees, 84.5% increase in amortization expense on housing tax credits, 19.3% increase in contributions, and 16.3% increase in accounting and audit fees. The increase in legal fees is primarily due to general corporate matters and legal services rendered relating to the creation of the Company's new stock incentive plan and new employee stock purchase plan.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
retrospectively to all prior periods presented in the financial statements or (2) on a prospective basis. The Company has evaluated this ASU and does not expect the adoption to have a material impact on the Company’s consolidated financial statements, as the Company does not typically provide these types of awards.
Previous report — wording carried elsewhere
The prime rate decreased several times beginning in September 2024, decreasing to 7.50% as of December 31, 2024.