RBB Bancorp

Previous wording

A sensitivity analysis of our ACL was performed as of September 30, 2025. Based on this sensitivity analysis, a 25% increase in the assumed prepayment speed on loans would result in a $903,000, or 2.01%, decrease to the ACL. A 25% decrease in the assumed prepayment speed on loans would result in a $1.1 million, or 2.52%, increase to the ACL. Additionally, a one percentage point increase in the unemployment rate would result in a $1.0 million, or 2.27%, increase to the ACL and a one percentage point decrease in the unemployment rate would result in a $942,000, or 2.10%, decrease to the ACL. Management reviews the results using the comparison scenario for sensitivity analysis and considers the results when evaluating the qualitative factor adjustments.

Current wording

A sensitivity analysis of our ACL was performed as of March 31, 2026. Based on this sensitivity analysis, a 25% increase in the assumed prepayment speed on loans would result in an $899,000, or 2.04%, decrease to the ACL. A 25% decrease in the assumed prepayment speed on loans would result in a $1.1 million, or 2.56%, increase to the ACL. Additionally, a one percentage point increase in the unemployment rate would result in a $1.1 million, or 2.46%, increase to the ACL and a one percentage point decrease in the unemployment rate would result in a $970,000, or 2.20%, decrease to the ACL. Management reviews the results using the comparison scenario for sensitivity analysis and considers the results when evaluating the qualitative factor adjustments.

Previous wording

On a quarterly basis, we stress test our nine qualitative risk factors, which are categorized by lending policy, procedures and strategies; economic conditions; changes in nature and volume of the portfolio; credit and lending staff; problem loan trends; loan review results; collateral value; concentrations; and regulatory and business environment, by creating two scenarios, a moderate stress scenario and a major stress scenario. In the Moderate Stress scenario, the status of the nine risk factors across all pooled loan types were set at “High-Moderate Risk” while in the Major Stress scenario, the status of the nine risk factors across all pooled loan types were set at “Major Risk.” Under the Moderate Stress scenario, the ACL would increase by $10.7 million, or 23.78%, as of September 30, 2025. Under the Major Stress scenario, the ACL would increase by $30.6 million, or 68.18%, as of September 30, 2025. Management compared the stress test results to our internal forecasts for earnings and capital and has concluded that the Company would remain well-capitalized under these stressed scenarios.

Current wording

On a quarterly basis, we stress test our nine qualitative risk factors, which are categorized by lending policy, procedures and strategies; economic conditions; changes in nature and volume of the portfolio; credit and lending staff; problem loan trends; loan review results; collateral value; concentrations; and regulatory and business environment, by creating two scenarios, a moderate stress scenario and a major stress scenario. In the Moderate Stress scenario, the status of the nine risk factors across all pooled loan types were set at “High-Moderate Risk” while in the Major Stress scenario, the status of the nine risk factors across all pooled loan types were set at “Major Risk.” Under the Moderate Stress scenario, the ACL would increase by $11.0 million, or 24.89%, as of March 31, 2026. Under the Major Stress scenario, the ACL would increase by $31.3 million, or 70.80%, as of March 31, 2026. Management compared the stress test results to our internal forecasts for earnings and capital and has concluded that the Company would remain well-capitalized under these stressed scenarios.

Previous wording

RBB Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. RBB Bancorp’s principal business is to serve as the holding company for its wholly-owned subsidiaries, the Bank and RBB Asset Management Company (“RAM”). RAM was formed to hold and manage problem assets acquired in business combinations. At September 30, 2025, we had total assets of $4.2 billion, gross loans held for investment ("HFI") of $3.3 billion, total deposits of $3.4 billion and total shareholders' equity of $514.3 million. RBB’s common stock trades on the Nasdaq Global Select Market under the symbol “RBB.”

Current wording

RBB Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. RBB Bancorp’s principal business is to serve as the holding company for its wholly-owned subsidiaries, the Bank and RAM. RAM was formed in 2012 to hold and manage problem assets acquired in business combinations. There are no problem assets at RAM or activity in this subsidiary for the three months ended March 31, 2026, or the year ended December 31, 2025. At March 31, 2026, we had total assets of $4.2 billion, gross loans held for investment ("HFI") of $3.3 billion, total deposits of $3.3 billion, and total shareholders' equity of $531.1 million. RBB’s common stock trades on the Nasdaq Global Select Market under the symbol “RBB.”

Previous wording

The Bank provides business-banking products and services predominantly to Asian-centric communities through 24 full service branches located in Los Angeles County, Orange County and Ventura County in California, in the Las Vegas (Nevada), the New York City metropolitan areas, Chicago (Illinois), Edison (New Jersey) and Honolulu (Hawaii). The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance and a full range of depository accounts, including specialized services such as remote deposit, E-banking, mobile banking and treasury management services.

Current wording

The Bank provides business-banking products and services predominantly to Asian-centric communities through full service branches located in Los Angeles County, Orange County and Ventura County in California, in the Las Vegas (Nevada), the New York City metropolitan areas, Chicago (Illinois), Edison (New Jersey), and Honolulu (Hawaii). The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance, and a full range of depository accounts, including specialized services such as remote deposit, E-banking, mobile banking, and treasury management services.

Previous wording

We operate as a minority depository institution ("MDI"), which is defined by the FDIC as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. A MDI is eligible to receive support from the FDIC and other federal regulatory agencies such as training, technical assistance and review of proposed new deposit taking and lending programs, and the adoption of applicable policies and procedures governing such programs. We intend to maintain our MDI designation, as it is expected that at least 51% of our issued and outstanding shares of capital shall remain owned by minority individuals. The MDI designation has been historically beneficial to us, and we continue to use the program for technical assistance.

Current wording

We operate as a minority depository institution ("MDI"), which is defined by the FDIC as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. A MDI is eligible to receive support from the FDIC and other federal regulatory agencies such as training, technical assistance, and review of proposed new deposit taking and lending programs, and the adoption of applicable policies and procedures governing such programs. We intend to maintain our MDI designation, as it is expected that at least 51% of our issued and outstanding shares of capital shall remain owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. The MDI designation has been historically beneficial to us, and we continue to use the program for technical assistance.

Previous wording

We operate full-service banking offices in Arcadia, Cerritos, Diamond Bar, Irvine, Los Angeles, Monterey Park, Oxnard, Rowland Heights, San Gabriel, Silver Lake, Torrance, and Westlake Village, California; Las Vegas, Nevada; Manhattan, Brooklyn, Flushing and Elmhurst, New York; the Chinatown and Bridgeport neighborhoods of Chicago, Illinois; Edison, New Jersey; and Honolulu, Hawaii. Our primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals.

Current wording

We operate 24 banking offices in Arcadia, Cerritos, Diamond Bar, Irvine, Los Angeles, Monterey Park, Oxnard, Rowland Heights, San Gabriel, Silver Lake, Torrance, and Westlake Village, California; Las Vegas, Nevada; Manhattan, Brooklyn, Flushing, and Elmhurst, New York; the Chinatown and Bridgeport neighborhoods of Chicago, Illinois; Edison, New Jersey; and Honolulu, Hawaii. Our primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals.

Previous wording

The following discussion provides information about the results of operations, financial condition, liquidity and capital resources of RBB and its wholly owned subsidiaries. This information is intended to facilitate an understanding and assessment of significant changes and trends related to our financial condition and results of operations. This discussion and analysis should be read in conjunction with our audited consolidated financial statements included in our 2024 Annual Report, and the unaudited consolidated financial statements and accompanying notes presented elsewhere in this Report. The financial results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the year ending December 31, 2025.

Current wording

The following discussion provides information about the results of operations, financial condition, liquidity, and capital resources of RBB and its wholly owned subsidiaries. This information is intended to facilitate an understanding and assessment of significant changes and trends related to our financial condition and results of operations. This discussion and analysis should be read in conjunction with our audited consolidated financial statements included in our 2025 Annual Report, and the unaudited consolidated financial statements and accompanying notes presented elsewhere in this Report. The financial results for the three months ended March 31, 2026, are not necessarily indicative of the results expected for the year ending December 31, 2026.

Previous wording

We reported net income of $10.1 million, or $0.59 diluted earnings per share, for the quarter ended September 30, 2025, compared to net income of $9.3 million, or $0.52 diluted earnings per share, for the quarter ended June 30, 2025 and $7.0 million, or $0.39 diluted earnings per share for the quarter ended September 30, 2024. Net income for the third quarter of 2025 reflected higher net interest income, lower credit costs and a lower effective tax rate as compared to the prior quarter. Net income for the prior quarter included income from an Employee Retention Credit ("ERC") refund of $5.2 million (pre-tax), which was included in other income, offset partially by professional and advisory costs associated with filing and determining eligibility for the ERC totaling $1.2 million (pre-tax), which was included in legal and professional expense in our consolidated statements of income. There was no ERC income or related expenses for the third quarter of 2025.

Current wording

We reported net income of $11.3 million, or $0.66 diluted earnings per share, for the quarter ended March 31, 2026, compared to net income of $10.2 million, or $0.59 diluted earnings per share, for the quarter ended December 31, 2025, and $2.3 million, or $0.13 diluted earnings per share, for the quarter ended March 31, 2025. Net income for the first quarter of 2026 reflected higher net interest income, lower credit costs, and higher noninterest income as compared to the prior quarter and the same quarter last year.

Previous wording

As of September 30, 2025, the allowance for credit losses totaled $45.4 million, down from $51.6 million at June 30, 2025. The $6.2 million decrease in the allowance for credit losses for the third quarter of 2025 was due to net charge-offs of $6.9 million, partially offset by a $625,000 provision for credit losses. The allowance for loan losses ("ALL") as a percentage of loans HFI decreased to 1.36% at September 30, 2025, compared to 1.58% at June 30, 2025, due mainly to net charge-offs of amounts included in specific reserves at June 30, 2025. The ALL as a percentage of nonperforming loans HFI was 98.70% at September 30, 2025, an increase from 89.79% at June 30, 2025.

Current wording

As of March 31, 2026, the allowance for credit losses totaled $44.2 million, down from $44.4 million at December 31, 2025. The $222,000 decrease in the allowance for credit losses for the first quarter of 2026 was due to a $200,000 reversal of provision for credit losses and net charge-offs of $22,000. The allowance for loan losses ("ALL") as a percentage of loans HFI totaled 1.31% at March 31, 2026, compared to 1.32% at December 31, 2025. The ALL as a percentage of nonperforming loans HFI was 97.98% at March 31, 2026, and 98.33% at December 31, 2025.

Previous wording

Total shareholders' equity was $514.3 million, or $30.18 book value per share at September 30, 2025, compared to $517.7 million, or $29.25 book value per share, at June 30, 2025, and $509.7 million, or $28.81 book value per share at September 30, 2024. The decrease in shareholders' equity for the third quarter of 2025 compared to the prior quarter was due mostly to common stock repurchases totaling $12.5 million and common stock cash dividends paid totaling $2.8 million, offset by net income of $10.1 million and lower net unrealized losses on available for sale securities of $1.6 million. The increase in shareholders' equity for the last twelve months was due to net income of $26.2 million, lower net unrealized losses on AFS securities of $1.6 million, and equity compensation activity of $2.2 million, partially offset by common stock repurchases totaling $14.0 million and common stock cash dividends paid totaling $11.4 million. Tangible book value per share increased to $25.89 at September 30, 2025, up from $25.11 at June 30, 2025 and $24.51 at December 31, 2024. We repurchased 659,218 shares during the third quarter of 2025 at an average price of $18.75 per share and 746,949 shares at an average price of $18.55 during the nine months ended September 30, 2025. For additional information on tangible book value per share, see "Non-GAAP Financial Measures."

Current wording

Total shareholders' equity was $531.1 million, or $31.10 book value per share, at March 31, 2026, compared to $523.4 million, or $30.69 book value per share, at December 31, 2025. The increase in shareholders' equity for the first quarter of 2026 compared to the prior quarter was due mostly to net income of $11.3 million, offset by common stock cash dividends paid of $2.8 million and higher net unrealized losses on AFS securities of $962,000. Tangible book value per share increased to $26.84 at March 31, 2026, up from $26.42 at December 31, 2025. For additional information on tangible book value per share, see "Non-GAAP Financial Measures."

Previous wording

The following table summarizes the extent to which changes in (1) interest rates and (2) volume of average interest-earning assets and average interest-bearing liabilities affected our net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.

Current wording

The following table summarizes the extent to which changes in (1) volume and (2) interest rates of average interest-earning assets and average interest-bearing liabilities affected our net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.

Previous wording

The net interest margin ("NIM") was 2.98% for the third quarter of 2025, an increase of 6 basis points from 2.92% for the second quarter of 2025. The NIM expansion included a 6 basis point increase in the yield on average interest-earning assets, combined with a 2 basis point decrease in the overall cost of funds. The yield on average interest-earning assets increased to 5.85% for the third quarter of 2025 from 5.79% for the second quarter of 2025 driven by a 9 basis point increase in the yield on average loans to 6.12%. Average loans represented 83% of average interest-earning assets in the third quarter of 2025, as compared to 84% in the second quarter of 2025.

Current wording

The net interest margin (“NIM”) increased 16 basis points to 3.15% for the first quarter of 2026, from 2.99% for the fourth quarter of 2025. The NIM increase included an 8 basis point increase in the yield on average total interest-earning assets and an 8 basis point decrease in the overall cost of funds. The yield on average total interest-earning assets increased to 5.86% for the first quarter of 2026 from 5.78% for the fourth quarter of 2025 due mostly to the impact of a 7 basis point increase in the yield on average loans and a 4 basis point increase from the FHLB special dividend. Average loans represented 84% of average interest-earning assets in the first quarter of 2026, which was unchanged from the fourth quarter of 2025.

Previous wording

Net interest income increased $4.7 million to $29.3 million for the third quarter of 2025, compared to $24.5 million for the third quarter of 2024. The increase in net interest income was due to an increase in interest income of $3.0 million, combined with a $1.8 million decrease in interest expense. The increase in interest income was primarily due to average interest-earning asset growth of $247.7 million, or 6.8%, as compared to the same quarter in 2024. The growth in average interest-earning assets included higher average total loans and securities available for sale, offset partially by a decrease in average cash and cash equivalents. The impact of higher average interest-earning assets on income was partially offset by lower market interest rates as compared to the same period in 2024. The decrease in interest expense was driven largely by lower rates paid on interest-bearing deposits, partially offset by an increase in the average balance of those interest-bearing deposits.

Current wording

Net interest income increased $4.3 million to $30.5 million for the first quarter of 2026, compared to $26.2 million for the first quarter of 2025. The increase in net interest income was due to an increase in interest income of $4.5 million, offset by a $127,000 increase in interest expense. The increase in interest income was driven by loan growth as average total interest-earning assets were $252.1 million, or 6.8%, higher for the first quarter of 2026 compared to the same quarter in 2025. The increase in interest expense was primarily due to an increase in the average balance of interest-bearing deposits, offset by lower rates paid on those deposits.

Previous wording

The $3.0 million increase in interest income was due mainly to a $2.8 million increase in interest income from average total loans, of which $3.3 million was attributed to higher average balances, offset by a $550,000 decrease due to lower rates. Average total loans were $3.2 billion for the quarter ended September 30, 2025, an increase of $175.6 million from the third quarter of 2024 due to strong loan growth in 2025. The yield on average total loans declined 1 basis point to 6.12% for the quarter ended September 30, 2025 compared to 6.13% for the quarter ended September 30, 2024.

Current wording

The $4.5 million increase in interest income was due mainly to a $4.3 million increase in interest income from average total loans, of which $3.3 million was attributed to higher average balances and $1.0 million was attributed to an increase in rates. Average total loans increased $216.9 million due to strong loan growth since the end of the first quarter of 2025. The yield on average total loans increased 13 basis points to 6.14% for the quarter ended March 31, 2026 compared to 6.01% for the quarter ended March 31, 2025.

Previous wording

The $1.8 million decrease in interest expense was due mainly to a $2.9 million decrease in interest expense on deposits, partially offset by higher interest expense on FHLB advances of $1.2 million. The decrease in interest expense on deposits was primarily due to a 76 basis point decrease in the rates paid on average interest-bearing deposits, partially offset by the impact of a $193.7 million increase in the average balance of interest-bearing deposits. Interest expense on FHLB advances increased due mainly to a 234 basis point increase in the average rate paid on FHLB advances as $150 million of fixed rate term advances matured during the first quarter of 2025 and were replaced in the current rate environment.

Current wording

The $127,000 increase in interest expense was due mainly to higher interest expense on FHLB advances of $144,000 and an increase of $16,000 in interest expense on average interest-bearing deposits. Interest expense on FHLB advances increased due mainly to a 126 basis point increase in the average rate paid on FHLB advances as $150 million of fixed rate term advances matured during the first quarter of 2025 and were replaced in the higher rate environment, offset partially by the effect of the decrease in the average balance of outstanding FHLB advances. The increase in interest expense on average total interest-bearing deposits was primarily due to an increase of $281.6 million in the average balance of interest-bearing deposits, offset almost entirely by the impact of a 38 basis point decrease in the interest rate paid on total average interest-bearing deposits as deposits repriced in the current rate environment. The Federal Reserve lowered market interest rates 75 basis points since the end of the first quarter of 2025. The average overnight Federal Funds Rate was 3.64% for the first quarter of 2026 compared to 4.33% for the first quarter of 2025.

Previous wording

The NIM was 2.98% for the third quarter of 2025, an increase of 30 basis points from 2.68% for the third quarter of 2024. The increase was primarily due to a 45 basis point decrease in the total cost of funds to 3.12%, partially offset by a 9 basis point decrease in the yield on average interest-earning assets to 5.85% for the third quarter of 2025 from 5.94% for the third quarter of 2024. The decrease in the yield on average interest-earning assets was due mainly to lower market rates. The decrease in funding costs was due to the lower average cost of interest-bearing deposits in response to lower market rates, offset by the higher average cost for FHLB advances. Average noninterest-bearing deposits totaled $541.1 million, or 17% of total average deposits, for the third quarter of 2025 compared to $528.1 million, or 17% of total average deposits, for the third quarter of 2024.

Current wording

The NIM was 3.15% for the first quarter of 2026, an increase of 27 basis points from 2.88% for the first quarter of 2025. The increase was primarily due to a 19 basis point decrease in the total cost of funds to 2.96% combined with a 10 basis point increase in the yield on average total interest-earning assets to 5.86% for the first quarter of 2026 when compared to the rates for the first quarter of 2025. The increase in the yield on average total interest-earning assets was due mainly to an increase in loan rates, as well as the impact of the FHLB special dividend in the first quarter of 2026; there was no FHLB special dividend in 2025. The decrease in funding costs was due to the lower average total cost of interest-bearing deposits, offset by the higher average total cost for FHLB advances. Average noninterest-bearing deposits totaled $526.1 million, or 16% of total average deposits, for the first quarter of 2026 compared to $520.2 million, or 17% of total average deposits, for the first quarter of 2025.

Previous wording

As of September 30, 2025, we were servicing SFR mortgage loans for other financial institutions, the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA"), and SBA loans.

Current wording

As of March 31, 2026, we were servicing SFR mortgage loans for other financial institutions, the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA"), and SBA loans. The following table presents loans serviced for others as of the dates indicated:

Previous wording

Total Assets. At September 30, 2025, total assets were $4.2 billion, an increase of $216.0 million, from total assets of $4.0 billion at December 31, 2024, including a $249.3 million increase in gross loans HFI, partially offset by a $22.8 million decrease in cash and cash equivalents.

Current wording

Total Assets. At March 31, 2026, total assets were $4.2 billion, a decrease of $14.0 million from total assets at December 31, 2025. The decrease included a $15.4 million decrease in cash and cash equivalents and a $10.5 million decrease in income tax receivable. These decreases were partially offset by increases in loans HFI of $10.9 million and securities AFS of $8.6 million.

Previous wording

***Cash and Cash Equivalents.***Cash and cash equivalents decreased $22.8 million, or 8.9%, to $234.9 million as of September 30, 2025 as compared to $257.7 million at December 31, 2024. This decrease in cash and cash equivalents was comprised of $244.4 million used in net investing activities, including a net increase in loans of $305.6 million, offset by a net decrease in AFS securities of $20.2 million and proceeds from loan and OREO sales of $42.6 million; $31.5 million provided by cash from operating activities; and $190.0 million provided by financing activities, with deposit growth of $282.6 million offset by a net decrease in FHLB advances of $70.0 million.

Current wording

***Cash and Cash Equivalents.***Cash and cash equivalents decreased $15.4 million, or 7.3%, to $196.9 million as of March 31, 2026, as compared to $212.3 million at December 31, 2025. This decrease in cash and cash equivalents was comprised of $21.3 million used in net investing activities, including purchases of AFS securities of $54.9 million and a net increase in loans of $14.8 million, offset by maturities and repayment of AFS securities of $45.1 million and proceeds from loan and OREO sales of $5.4 million. Net cash used in financing activities was $13.5 million, consisting mainly of a net decrease in deposits of $10.5 million. Net cash provided by operating activities was $19.4 million, which consisted mainly of net income of $11.3 million and proceeds from loans held for sale of $6.4 million.

Previous wording

The weighted-average life of the total investment portfolio at September 30, 2025 and December 31, 2024 was 5.0 years. The weighted-average life is the average number of years that each dollar of unpaid principal due remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal pay-downs.

Current wording

The weighted-average life of the total investment portfolio was 4.6 years at March 31, 2026, and 4.9 years at December 31, 2025. The weighted-average life is the average number of years that each dollar of unpaid principal due remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal pay-downs.

Previous wording

The table below shows our investment securities’ fair value and weighted average yields by maturity in the following maturity groupings as of September 30, 2025. The fair value of the securities portfolio is shown by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Current wording

The table below summarizes the fair value of the securities portfolio and their weighted average yields by expected maturity as of March 31, 2026. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Previous wording

The table below shows our investment securities’ gross unrealized losses and estimated fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 and December 31, 2024. The unrealized losses on these securities were primarily attributed to changes in interest rates. There was no ACL on the AFS or HTM securities portfolios as of September 30, 2025 or December 31, 2024. We monitor our securities portfolio to ensure that all our investments have adequate credit support and we consider the lowest credit rating for identification of potential impairment. The issuers of these securities have not, to our knowledge, evidenced any cause for default on these securities. As of September 30, 2025, all our investment securities in an unrealized loss position received an investment grade credit rating. These securities have fluctuated in value since their purchase dates as market rates have also fluctuated. However, we have the ability and the intention to hold these securities until their fair values recover to cost or until their respective maturity dates. As such, management does not deem these securities to be impaired under the current expected credit loss model. A summary of our analysis of these securities and the unrealized losses is described more fully in "Note 3 —* *Investment Securities" of our audited consolidated financial statements included in our 2024 Annual Report. Economic trends may adversely affect the value of the portfolio of investment securities that we hold.

Current wording

The table below shows our investment securities’ gross unrealized losses and estimated fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2026 and December 31, 2025. The unrealized losses on these securities were primarily attributed to changes in interest rates. There was no ACL on the AFS or HTM securities portfolios as of March 31, 2026 or December 31, 2025. We monitor our securities portfolio to ensure that all our investments have adequate credit support and we consider the lowest credit rating for identification of potential impairment. The issuers of these securities have not, to our knowledge, evidenced any cause for default on these securities. As of March 31, 2026, all of our investment securities in an unrealized loss position received an investment grade credit rating. These securities have fluctuated in value since their purchase dates as market rates have also fluctuated. However, we have the ability and the intention to hold these securities until their fair values recover to cost or until their respective maturity dates. As such, management does not deem these securities to be impaired under the current expected credit loss model. A summary of our analysis of these securities and the unrealized losses is described more fully in "Note 3 —* *Investment Securities" of our audited consolidated financial statements included in our 2025 Annual Report. Economic trends may adversely affect the value of the portfolio of investment securities that we hold.

Previous wording

The loan portfolio is the largest category of our earning assets. Loans HFI increased $249.3 million, or 10.9% on an annualized basis, to $3.3 billion at September 30, 2025 since December 31, 2024. The increase was primarily due to increases in SFR mortgage loans of $157.0 million, CRE loans of $85.2 million, commercial and industrial ("C&I") loans of $17.1 million, and SBA loans of $6.8 million, partially offset by decreases in construction and land development ("C&D") loans of $14.1 million and in other loans of $2.5 million. SFR mortgage loans represented 50.0% of our total HFI loans as of September 30, 2025 and 48.9% at December 31, 2024. There were $756,000 of loans HFS at September 30, 2025 compared to $11.3 million loans HFS at December 31, 2024. The decrease in loans HFS was due to sales totaling $49.0 million, offset by loans originated or transferred into HFS of $37.8 million.

Current wording

The loan portfolio is the largest category of our earning assets. Loans HFI increased $10.9 million, or 1.3% on an annualized basis, to $3.3 billion at March 31, 2026, since December 31, 2025. The increase was primarily due to increases in SFR mortgage loans of $27.4 million, commercial and industrial ("C&I") loans of $12.9 million, and construction and land development ("C&D") loans of $3.8 million, partially offset by decreases in CRE loans of $28.9 million and SBA loans of $3.7 million. SFR mortgage loans represented 50.6% of our total HFI loans as of March 31, 2026, and 50.0% at December 31, 2025. There were no loans HFS at March 31, 2026, compared to $2.1 million loans HFS at December 31, 2025. The decrease in loans HFS was due to sales totaling $8.9 million, offset by loans originated or transferred into HFS of $6.8 million.

Previous wording

The majority of our loan portfolio is based on collateral or businesses located in California and New York, which represented 87.9% of our loan portfolio. Loans secured by collateral in other states represented approximately 12.1% of our portfolio and the majority of these loans are secured by real estate with a weighted average LTV of 56.6% at September 30, 2025.

Current wording

The majority of our loan portfolio is based on collateral or businesses located in California and New York, which represented 88.2% of our loan portfolio. Loans secured by collateral in other states represented approximately 11.8% of our portfolio and the majority of these loans are secured by real estate with a weighted average LTV of 55.1% at March 31, 2026.

Previous wording

SFR loans. SFR loans totaled $1.7 billion, or 50.0% of our loans HFI portfolio, as of September 30, 2025. SFR loans increased $157.0 million, or 10.5%, during the first nine months of 2025 due to higher originations relative to payoffs, paydowns and sales. As of September 30, 2025, the weighted-average LTV of the portfolio was 55.0%, the weighted average FICO score was 764, and the average age was 3.33 years as of September 30, 2025.

Current wording

SFR loans. SFR loans totaled $1.7 billion, or 50.6% of our loans HFI portfolio, as of March 31, 2026. SFR loans increased $27.4 million, or 6.7% annualized, during the first quarter of 2026 due to higher originations relative to payoffs, paydowns, and sales. As of March 31, 2026, the weighted-average LTV of the portfolio was 54%, the weighted average FICO score was 764, and the average age was 3.5 years.

Previous wording

For SFR mortgage loans sold to FNMA, FHLMC and to other third parties such as investment funds or other banks, we provide limited representations and warranties and with a repurchase and premium refund for loans that become delinquent in the first 90-days or a premium refund if paid-off in the first 90-days with respect to all loans sold. In certain loan sales to other banks, loans are sold with no representations or warranties and provide a replacement feature for the first six months if any loans pay off early. As a condition of the sale for all loans, the buyer must have the loans audited for underwriting and compliance standards. There were $756,000 and $11.3 million of SFR loans HFS at September 30, 2025 and December 31, 2024.

Current wording

For SFR mortgage loans sold to FNMA, FHLMC, and to other third parties such as investment funds or other banks, we provide limited representations and warranties and with a repurchase and premium refund for loans that become delinquent in the first 90-days or a premium refund if paid-off in the first 90-days with respect to all loans sold. In certain loan sales to other banks, loans are sold with no representations or warranties and provide a replacement feature for the first six months if any loans pay off early. As a condition of the sale for all loans, the buyer must have the loans audited for underwriting and compliance standards. There were no SFR loans HFS at March 31, 2026, and $2.1 million of SFR loans HFS at December 31, 2025.

Previous wording

The largest subset of CRE loans was the multi-family residential loan portfolio, which totaled $717.5 million as of September 30, 2025 and $605.5 million as of December 31, 2024.

Current wording

The largest subset of CRE loans was the multi-family residential loan portfolio, which totaled $740.6 million as of March 31, 2026, and $745.3 million as of December 31, 2025.

Previous wording

Construction and land development loans. C&D loans totaled $159.2 million, or 4.8% of the loan portfolio, at September 30, 2025. C&D loans decreased $14.1 million, or 8.2%, during the first nine months of 2025 due to decreases in land development loans and residential construction loans, offset by an increase in commercial construction loans. Our C&D loans are comprised of residential construction, commercial construction, and land acquisition and development. Interest reserves are generally established on real estate construction loans. These loans are typically Prime rate based and have maturities of less than 18 months.

Current wording

Construction and land development loans. C&D loans totaled $159.3 million, or 4.8% of the loan portfolio, at March 31, 2026. Our C&D loans are comprised of commercial construction, residential construction, and land acquisition and development loans. C&D loans increased $3.8 million, or 10.0% annualized, during the first three months of 2026 due to increases in commercial construction and land development loans, partially offset by a decrease in residential construction loans. Interest reserves are generally established on real estate construction loans. These loans are typically Prime rate based and have maturities of less than 18 months.

Previous wording

Commercial and industrial loans. C&I loans totaled $146.7 million, or 4.4% of the loan portfolio, as of September 30, 2025. C&I loans increased $17.1 million, or 13.2%, during the first nine months of 2025 due in part to an increase in commercial term loans and lines of credit, along with an increase in mortgage warehouse lines of credit. Our SFR mortgage lending unit originates mortgage warehouse lines of credit to certain correspondent banks.

Current wording

Commercial and industrial loans. C&I loans totaled $152.9 million, or 4.6% of the loan portfolio, as of March 31, 2026. C&I loans increased $12.9 million, or 37.2% annualized, during the first three months of 2026 due in part to an increase of $15.2 million in commercial term loans and lines of credit, partially offset by a decrease of $2.3 million in mortgage warehouse lines of credit. Our SFR mortgage lending unit originates mortgage warehouse lines of credit to certain correspondent banks.

Previous wording

SBA loans. SBA loans increased $6.8 million, or 14.3%, to $54.0 million at September 30, 2025 compared to $47.3 million at December 31, 2024. We originated SBA loans of $20.4 million during the first nine months of 2025. Offsetting these loan originations were loan sales of $7.9 million, net loan payoffs and paydowns of $4.8 million, and transfers to OREO of $970,000 during the first nine months of 2025.

Current wording

SBA loans. SBA loans decreased $3.7 million, or 6.6%, to $52.3 million at March 31, 2026, compared to $56.0 million at December 31, 2025. We originated SBA loans of $1.3 million and advanced an additional $292,000 on such loans during the first three months of 2026. Offsetting these loan originations and advances were loan sales of $4.0 million, refinances into non-SBA guaranteed loan types of $789,000, and net loan payoffs and paydowns of $513,000 during the first three months of 2026.

Previous wording

Individual loans considered to be uncollectible are charged off against the ACL. Factors used in determining the amount and timing of charge-offs on loans include consideration of the loan type, length of delinquency, sufficiency of collateral value, lien priority and the overall financial condition of the borrower. Loans deemed to be collateral-dependent are reviewed individually based on the estimated fair value of the collateral less selling costs. Collateral value is determined using appraisals and/or other market comparable information. Charge-offs are generally taken on loans when the loan balance is determined to be uncollectible. Recoveries on loans previously charged off are added to the ACL. Net charge-offs on an annualized basis represented 0.84% of average loans for the three months ended September 30, 2025, 0.54% for the nine months ended September 30, 2025, and 0.13% of average loans for the twelve months ended December 31, 2024. Net charge-offs for the third quarter of 2025 were higher than the same period in the prior year; however, $6.6 million of the 2025 charge-offs were related to one loan relationship and were reserved for in prior periods.

Current wording

Individual loans considered to be uncollectible are charged off against the ACL. Factors used in determining the amount and timing of charge-offs on loans include consideration of the loan type, length of delinquency, sufficiency of collateral value, lien priority and the overall financial condition of the borrower. Loans deemed to be collateral-dependent are reviewed individually based on the estimated fair value of the collateral less estimated selling costs. Collateral value is determined using appraisals and/or other market comparable information. Charge-offs are generally taken on loans when the loan balance is determined to be uncollectible. Recoveries on loans previously charged off are added to the ACL. Net charge-offs on an annualized basis represented 0.00% of average loans for the three months ended March 31, 2026, and 0.35% of average loans for the three months ended March 31, 2025.

Previous wording

As of September 30, 2025, the ACL totaled $45.4 million and was comprised of an ALL of $44.9 million and a RUC of $504,000 (included in “accrued interest and other liabilities”). This compares to the ACL of $48.5 million comprised of an ALL of $47.7 million and a RUC of $729,000 at December 31, 2024. The $3.1 million decrease in the ACL for the first nine months of 2025 was due to net charge-offs of $12.8 million offset by a $9.8 million provision for credit losses. The ALL as a percentage of loans HFI decreased to 1.36% at September 30, 2025, compared to 1.56% at December 31, 2024 due mainly to net charge-offs in 2025 which were included in specific reserves in prior periods. The ALL as a percentage of nonperforming loans HFI was 98.70% at September 30, 2025, an increase from 58.90% at December 31, 2024.

Current wording

As of March 31, 2026, the ACL totaled $44.2 million and was comprised of an ALL of $43.7 million and a RUC of $484,000. This compares to the ACL of $44.4 million comprised of an ALL of $43.9 million and a RUC of $484,000 at December 31, 2025. The $222,000 decrease in the ACL for the first three months of 2026 was due to a $200,000 reversal of provision for credit losses and net charge-offs of $22,000. The ALL as a percentage of loans HFI was 1.31% at March 31, 2026, compared to 1.32% at December 31, 2025, due mainly to the reversal of provision for credit losses and growth in the loan portfolio. The ALL as a percentage of nonperforming loans HFI was 97.98% at March 31, 2026, a decrease from 98.33% at December 31, 2025.

Previous wording

Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest (of which there were none during the periods presented). The balances of nonperforming loans included in the table below are the net investment in these assets and do not include $538,000 in specific reserves included in the ALL. The following table presents the net investment in nonperforming assets by loan class and certain nonperforming asset ratios as of the dates indicated.

Current wording

Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest (of which there were none during the periods presented). The balances of nonperforming loans included in the table below are the net investment in these assets and do not include specific reserves that are included in the ALL. The following table presents the net investment in nonperforming assets by loan class and certain nonperforming asset ratios as of the dates indicated.

Previous wording

Our 30-89 day delinquent loans, excluding nonperforming loans, totaled $6.5 million, or 0.20% of total loans, at September 30, 2025, down from $22.1 million, or 0.72% of total loans, at December 31, 2024. The $15.6 million decrease was mostly due to $14.8 million in loans returning to current status, $2.9 million in SFR mortgage loans included in a bulk sale of underperforming SFR mortgage loans and $931,000 in paydowns and payoffs. There were also $2.0 million of loans that were downgraded to nonperforming. These changes were partially offset by $5.2 million in new delinquent loans.

Current wording

Our 30-89 day delinquent loans, excluding nonperforming loans, totaled $7.9 million, or 0.24% of total loans, at March 31, 2026, down from $8.8 million, or 0.27% of total loans, at December 31, 2025. The $0.9 million decrease was mainly due to $3.4 million in loans returning to current status and $1.3 million in payoffs and paydowns, offset by $3.7 million in new delinquent loans.

Previous wording

We did not recognize any interest income on nonaccrual loans during the three and nine months ended September 30, 2025 and 2024, while the loans were in nonaccrual status.

Current wording

We did not recognize any interest income on nonaccrual loans during the three months ended March 31, 2026 and 2025, while the loans were in nonaccrual status.

Previous wording

We use a risk grading system to categorize and determine the credit risk of our loans. Potential problem loans include loans with a risk grade of 6, which are “special mention,” loans with a risk grade of 7, which are “substandard” loans that are generally not considered to be impaired and loans with a risk grade of 8, which are “doubtful” loans generally considered to be impaired. These loans generally require more frequent loan officer contact and receipt of financial data to closely monitor borrower performance. Potential problem loans are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive officers and other members of the Bank’s senior management.

Current wording

We use a risk grading system to categorize and determine the credit risk of our loans. Potential problem loans include loans with a risk grade of 6, which are “special mention,” loans with a risk grade of 7, which are “substandard” loans that are generally not considered to be impaired and loans with a risk grade of 8, which are “doubtful” loans generally considered to be impaired. These loans generally require more frequent loan officer contact and receipt of financial data to closely monitor borrower performance. Potential problem loans are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive officers and other members of senior management.

Previous wording

Substandard loans totaled $76.9 million at September 30, 2025, a decrease of $12.3 million from $89.1 million at December 31, 2024. In addition, there were $11.2 million of substandard loans HFS at December 31, 2024 that were subsequently sold in the first quarter of 2025. There were no substandard loans HFS at September 30, 2025. The $12.3 million decrease in substandard loans HFI was primarily due to payoffs and paydowns totaling $24.7 million, transfers to OREO of $13.8 million, charge-offs of $10.2 million, and upgrades to pass or special mention of $5.0 million, partially offset by the downgrade of loans totaling $42.3 million to substandard. Of the total substandard loans at September 30, 2025, there were $31.4 million on accrual status.

Current wording

Substandard loans totaled $72.5 million at March 31, 2026, a decrease of $2.7 million from $75.2 million at December 31, 2025. The decrease in substandard loans during the first quarter of 2026 was primarily due to payoffs and paydowns totaling $3.0 million and upgrades to pass-rated loans of $1.1 million, partially offset by downgrades to substandard totaling $1.5 million. Of the total substandard loans outstanding at March 31, 2026, there were $27.9 million, or 39% of such loans, on accrual status.

Previous wording

***Liabilities.***Total liabilities increased by $209.5 million to $3.7 billion at September 30, 2025 from $3.5 billion at December 31, 2024, primarily due to a $282.7 million increase in deposits, offset by a $70.0 million decrease in FHLB advances.

Current wording

***Liabilities.***Total liabilities decreased by $21.6 million to $3.7 billion at March 31, 2026, compared to December 31, 2025, primarily due to a $10.5 million decrease in deposits and a $10.8 million decrease in accrued interest and other liabilities.

Previous wording

Of the $975.1 million in time deposits over $250,000, the estimated aggregate amount of time deposits in excess of the FDIC insurance limit is $743.3 million at September 30, 2025. The following table presents the maturity distribution of uninsured time deposits in amounts of more than $250,000 as of the date indicated.

Current wording

Of the $773.6 million in time deposits over $250,000, the estimated aggregate amount of time deposits in excess of the FDIC insurance limit is $531.9 million at March 31, 2026. The following table presents the maturity distribution of uninsured time deposits in amounts of more than $250,000 as of the date indicated.

Previous wording

In addition, we offer deposit products through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC limit. Time deposits held through the CDARS program were $130.5 million at September 30, 2025 and $130.6 million at December 31, 2024 and ICS deposits totaled $147.2 million at September 30, 2025 and $146.1 million at December 31, 2024.

Current wording

In addition, we offer deposit products through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC limit. Time deposits held through the CDARS program were $139.8 million at March 31, 2026 and $128.3 million at December 31, 2025 and ICS deposits totaled $149.1 million at March 31, 2026 and $156.3 million at December 31, 2025.